The Texas Real Estate Commission met on November 13 and adopted amendments to existing rules and proposed others. In addition to the changes below, the commission made changes to how team names can be used in advertisements, tweaked rules regarding use of standard contract forms, and proposed amendments to TREC forms. Those changes will be reported in upcoming posts.
New rules for links to Consumer Protection Notice and Information About Brokerage Services form
The adopted rules clarify that sales agents, along with brokers, must provide a link to the Consumer Protection Notice form in at least 10-point font in a readily noticeable place on the homepage of their business websites. The footer of the website is an acceptable place as long as it’s readily noticeable. For both the Consumer Protection Notice and the Information About Brokerage Services form, TREC added a new option for using only “TREC” as opposed to “Texas Real Estate Commission” in the link so long as the font size is increased to at least 12 point.
The term “business website” means a website that is accessible to the public, has content controlled by the license holder, and has information about the license holder’s real estate business. For social media accounts, the links may be located in the account’s profile or on a separate page or website through a direct link from the profile.
TREC adopted a change to assess administrative penalties from $500 to $3,000 per violation per day for violating the rules about providing TREC’s Consumer Protection Notice and the Information About Brokerage Services form. Previously, penalties for violating these rules would have been assessed under a higher penalty range.
These rules will go into effect 20 days after the rules are filed with the Texas secretary of state, which has not happened as of this writing.
New statement required for comparative market analysis, broker price opinion, and sales price estimates
TREC adopted changes that require license holders to provide new language in writing when giving a broker price opinion, comparative market analysis, or estimate worth or sales price—which includes automated valuation models (AVMs)— to consumers. MLSs and RPR should provide the disclaimer when analyses are created through these platforms.
The new required disclosure statement needs to be reproduced verbatim and in at least 12-point type: “This represents an estimated sale price for this property. It is not the same as the opinion of value in an appraisal developed by a licensed appraiser under the Uniform Standards of Professional Appraisal Practice.”
This rule will go into effect 20 days after the rules are filed with the Texas secretary of state, which has not happened as of this writing.
Glad to see it….
Trec, please automatically have the verbage required at the bottom of every CMA printed or emailed.
Thank you for your consideration,
Not a TREC promulgated form so TREC is not going to create the form for you. It changes with each one you do.
Too wordy about CMA Disclaimer. WHY NOT JUST STATETHAT this Xama is NOT an Appraisal performed by a Licensed Apprsiser.
This is OK. In balance, Appraiser can better statiscally evaluate the value of a property with no bias whereby the Realtor can evaluate the emotional and the statiscal value of the property with bias. This is for homes only. Appraiser are much better at evaluating commercial properties.
My experience has been that most REALTORS…have a better handle of the value and selling price of a property than the appraiser. We sell properties every day in areas that we are quite familiar with. The value of a property IS what the buyer will pay.
True, but the appraisal is for the lender. The current buyer may be willing to pay more than other buyers (especially in multi offer situations) for the home. However, if the home is returned to the bank, the lender has to ensure their portion of the investment is covered. That’s really the point of the appraisal.
So true. Appraiser lean toward fear of overpricing and devalue properties more often since the real estate crash of 2008.
Typical Realtor response. If, an appraiser, appraises 2 houses a day that mea, at a minimum, they are doing an in-depth evaluation of 6-8 Sold Homes, 4 Listings, plus the 2 Subject properties, for a total of 14/day*5days = 50sales and listings/week * 50weeks= 2500 properties not to mention all the market and neighborhood analysis, analytics and regression analysis that goes into a market. How many does a realtor sell? There is a reason institutions do not allow a realtor to VALUE a property, and these responses prove the correctness of this procedure. Yes, I am an appraiser. Yes, I… Read more »
I agree with 95% of what you are saying (see my response to another commenter in this thread), however, appraisers are not infallible. I had a client who bought a new home from a builder and it appraised (VA) for $415K in Dec 2015. When he tried to sell it for $421K 17 months later, a different VA appraiser gave it a value of $365K. I live next to the house in question and my assessment is this…it was probably over valued in 2015 and under valued in 2017. Based on ‘comparable’ homes that have sold in this subdivision (and… Read more »
I agree, no one is infallible, we are all human and make mistakes. I feel the Realtor needs to understand, a BANK hires an appraiser to give his “opinion of value” to protect their interest in a security, based on an analysis of verifiable data at a certain time (date), so the BANK can make a lending decision. Problem is when they decide they don’t want to make that decision, “it is the appraisers fault”. Another thing is some Realtors do not understand the guidelines/restrictions placed on the appraiser by the GSE, VA or FHA.
I have had many Appraisers come into a neighborhood……knowing nothing about the neighborhood, the subdivision, the area of town…..nor who always knew how to ‘pull’ “Apple to Apple” Comps on a “subject Property.” In the last 12 years, I have had one, ONE property ‘not appraise’…..and it turned out that the “Lender” actually knew this Appraiser and the Lender (not the Seller) owned other properties within a few miles of the subject property. The Appraiser picked rental / income properties to compare to a newly renovated subject Property…..that were in what he thought was the same subdivision……but in fact…..they were… Read more »
I’m not a realtor but in my experience a CMA is thr most useless waste of Paper ever. While settling an estate I agreed to having a CMA done to give us a cheap method of deciding the properties. When preparing them the realtor came the houses peaked in the door, tool an outside picture of the front of the houses and went on her way, and the values set were above the value of the houses in perfect condition. She made no note of obvious roof leaks and the fact one roof had dozens of shingles missing. One home… Read more »
Websites are not measured in “points”, they are measured in “em” or “px”. A “point” is a measurement for printed material like books. Requiring a notice in “at least 10-point font” means that the notice must be 10/72 of an inch in height. That is a ridiculous requirement for a website because the agent has no way of knowing what display resolution the user will use to view the website. On a large desktop display 10-points would look quite small, but on a mobile phone display it would be gigantic! What TREC is specifying is unclear, but they seem to… Read more »
Most TREC changes are unclear. Pretty soon we will have to wear body cameras and record everything we do.
Excellent point Jim! Maybe TREC should re-write the rule (again) using website terminology (or give examples of acceptable website sizes using pixels, etc.) vs. a print point size. Good catch.
BAH HUMBUG! Our website Houston Association of Realtors is changing to MATRIX, which is AWFUL, Zip forms plus is changing…TREC is changing…but probably NOT for the Better..buyer’s are taking advantage of seller’s lately…makes me sick the LOW offers they want to submit…and fa la la la la…’tis the season to be jolly! 5 years ago I talked to a TREC lawyer and complained about the obnoxious amount of forms and suggested they get rid of some of the extra forms…incorporate into the main one…but still the same old endless amount of papers that need to be printed, no one reads.… Read more »
And society as a whole was much different back then. When I have clients complain about all the notices / forms I just quietly mention that people have made it necessary.
I believe you are correct. For a competent agent, the single 8.5″ x 14″ form was just as good and as the book length forms that we use today. Completing the forms with a pen was more efficient than completing the form on a computer and allowed the agent and clients to concentrate on the content of the agreement instead of the technical task of completing the form. The forms came with attached carbons, so there was no need for hauling around carbon paper or searching for a printer. No batteries required so you did not have to worry about… Read more »
Don’t know why you throw such a fit about IABS. All the law/rule says is that you must give it to the consumer at the first substantive conversation. Get their email & email it to them, hand it to them in person and make a note of the time, record it in an email to yourself, etc. You can ask that they initial and hand it back to you, but that part is NOT required.
Banks require the term “value”, but TREC says “value” is not allowed. This article says, “value or price”. How do we satisfy both the banks (for BPOs) and the TREC rule?