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The Maryland Association of REaltors速

The Voice for Real Estate in Maryland 速

Personal Information and Identity Theft

How Secure is Your Company?

Registration Opens April 10!

Consumer Website:


2012 Hotline Review


Lobby Day

MARYLAND REALTOR® February | March 2013 1

President’s Perspective C A R LT O N J . B O U J A I , J R .

Response To Calls For Action It’s true. Maryland REALTORS® have enthusiastically responded to a recent call for action at the federal level, and in record numbers. Thirty percent of you cared enough to tell Congress to “do no harm” to housing. It took two clicks. That’s encouraging, but it’s not enough. If we want to make Congress listen, we must ALL make our voices heard. State and federal legislators will be looking at all revenue sources in the next few months. We must continue to be the steadfast advocates for the rights of homeownership. We owe it to our clients, our public, and our profession. If not us, then who? Didn’t get the latest Call For Action? Check your information on NRDs and make sure you’ve entered your current email address. To make it even easier for you to respond and significantly increase our Calls for Action responses, simply download the NAR REALTOR® Action Center App to your smartphone. Go to for details, or scan the QR Code for the MAR website.

Because You Asked—Identity Theft Prevention Safeguarding your client’s sensitive data has never been more critical. This month you will find a primer for protecting sensitive data in your files and on your computer. “How Secure is Your Company?” begins on page 7.

From The Hotline In this issue we offer our annual recap of 2012 “Hotline” articles (see page 13). The ‘year in review’ articles are updated and edited to provide timely information on for REALTOR® Professionalism a variety of subjects critical to you as a practitioner. As REALTORS®, we are sworn We are pleased to announce to abide by the NAR Code of that the MAR Legal Hotline Ethics. Beyond ethics, however, will reinstate Friday call-in is acting professionally with all hours beginning Friday, parties through a transaction. February 1, 2013. The hours Good business practices are of operation are 10 a.m.–12 not only essential to a smooth noon and 2–4 p.m. Members process. They build good are eligible for four free calls relationships with clients and annually (unlimited for brokers with fellow REALTORS®, which and managers). can lead to more efficient future Call 800-888-1272, or visit transactions and even future to ask referrals, as well as more public your question online. respect for our profession. In short, professional behavior enhances your personal reputation and your business.





TA B L E O F CO N T E N TS Features

GRI 2013 Schedule


Personal Information AND Identity Theft How Secure is Your Company? 7 Pinterest Meets Real Estate Special Technology Article 11

2012 Hotline Review



Personal Information and Identity Theft How Secure is Your Company?


President’s Perspective

Regulation News Fishing in Another Pond Part Deux


Maryland Real Estate Commission News Commission Kicks Off Online CE Record Keeping


Residential Sales


Pinterest Meets Real Estate


Lobby Day


2012 Hotline Review




Start the Year Right— Minimize Your Risk of an Errors and Omissions Claim



COMMERCIAL CONNECTION Realtors Property Resource® RPR® Commercial


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MARYLAND REALTOR® 4 February | March 2013

2013 Maryland Association of REALTORS® Leadership Team


Maryland Association of REALTORS® 200 Harry S Truman Parkway | Suite 200 Annapolis, MD 21401-7348 800.638.6425 |

Executive Leadership Team Carlton J. Boujai Jr.

J. Russell Boyce

President EXIT Realty Prosperity Group 5300 Westview Drive Suite 105 Frederick, MD 21703-8339 301.698.8700

President Elect RE/MAX 100 10665 Stanhaven Place White Plains MD 20695-3062 301.843.5100

Carlton J. Boujai Jr. | President J. Russell Boyce | President Elect Janice R. Kirkner | Secretary Carole A. Maclure | Treasurer Patricia A. Terrill | Immediate Past President Mary C. Antoun | Chief Executive Officer


Deborah L. Hager |

Advisory Committee Yolanda R. Muckle | Chair Thomas P. Levin | Vice Chair

Advertising & Publication Design Ellipse Design 952 Frederick Street, Hagerstown, MD 21741 800.638.3508 |

Carole A. Maclure

Treasurer RE/MAX Advantage Realty 17304 Evangeline Lane Olney, MD 20832-2928 240.295.6000 Email:

Janice R. Kirkner Secretary Long & Foster Real Estate, Inc. 1208 Nottingham Drive Westminister, MD 21157-8334 410.795.9600

Patricia A. Terrill

Mary C. Antoun

Immediate Past President Prudential PenFed Realty 7501 Coastal Highway Ocean City, MD 21842-2937 410.524.7000 Fax 410.524.5695

Chief Executive Officer Maryland Association of REALTORS® 200 Harry S Truman Parkway Suite 200 Annapolis, MD 21401-7348 800.638.6425

Mission Statement

The Maryland Association of REALTORS® exists to support all segments of its membership and their specialties. The Maryland Association of REALTORS®, through collective efforts with local boards/associations and the National Association of REALTORS®: ■ Develops and delivers programs, services and related products that maintain and elevate the high standards of the real estate business and the professional conduct of its practitioners; ■ Assists members in ethically and professionally serving the public; ■ Promotes and preserves the right to own, transfer and use real property; and ■ Protects the right of members to conduct business within a framework of fair and reasonable laws and government regulations. In principle and in practice, the Maryland Association of REALTORS® values and seeks diversity and inclusive participation within the field of real estate and recognizes each member as a unique individual. Maryland REALTOR® (USPS 0016-017) is published bimonthly by the Maryland Association of REALTORS®, Suite 200, 200 Harry S Truman Parkway, Annapolis, MD 21401-7348. Periodical postage paid at Annapolis and additional mailing offices. Postmaster send address changes to: Maryland REALTOR®, Suite 200, 200 Harry S Truman Parkway, Annapolis, MD 21401-7348. Member subscriptions of $3.81 are paid with annual dues. This publication is designed to provide accurate and authoritative information regarding the subject matter covered. It is offered with the understanding that the publisher is not engaged in rendering professional advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. Articles that appear in Maryland REALTOR® are an informational service to members. Their contents are the opinions of the authors alone and do not necessarily represent those of the Maryland Association of REALTORS®. Permission to reprint articles appearing in Maryland REALTOR® magazine must be requested in writing. Also include purpose for request. While this magazine makes a reasonable effort to establish the integrity of its advertisers, it does not endorse advertised products or services unless specifically stated. ©2010 Maryland Association of REALTORS®, Inc.


3 GREAT THINGS come in

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REALTORS® with designations earn more income than those without designations. The GRI is a way to set you apart from the competition.

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The Name Says it All

As a GRI (Graduate, REALTOR® Institute), you have accomplished a high level of achievement which indicates to your clients and colleagues an increased skill level, industry knowledge and dedication to your profession.

GRI 2013 Schedule SERIES 100 MAR – Annapolis 800-638-6425 January 29, February 5, 12, 19, 26, 2013 MAR – Annapolis 800-638-6425 June 6, 11, 13, 18 & 25, 2013 Greater Baltimore Board 410-337-7200 August 1, 8, 15, 22 & 30, 2013

SERIES 200 MAR – Annapolis 800-638-6425 March 12, 14, 19, 26 & 28, 2013 MAR – Annapolis 800-638-6425 July 2, 9, 16, 23 & 30, 2013 Greater Baltimore Board 410-337-7200 October 2, 9, 16, 23 & 30, 2013

SERIES 300 Greater Baltimore Board 410-337-7200 February 7, 14, 21, 28 & March 7, 2013 MAR – Annapolis 800-638-6425 April 8, 10, 17, 22 & 24, 2013 MAR – Annapolis 800-638-6425 October 1, 8, 15, 22 & 29, 2013

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MARYLAND REALTOR® February | March 2013 7

Personal Information and Identity Theft

How Secure is Your Company?

Real Estate Companies and agents should take steps to protect the personal information from unauthorized access. Safeguarding sensitive data in your files and on your computers is just plain good business. If that information falls into the wrong hands it can lead to fraud or identity theft. A sound data security plan is built on five key principles: › Take stock. Know what personal information you have in your files and on your computers. › Scale down. Keep only what you need for your business. › Lock it. Protect the information in your care. › Pitch it. Properly dispose of what you no longer need. › Plan ahead. Create a plan to respond to security incidents.

MARYLAND REALTOR® 8 February | March 2013

Safeguarding sensitive data is just plain ‘good business.’ The Federal Trade Commission (FTC) has promoted these five key principles for protecting personal information, as set forth in its publication, “Protecting Personal Information; A Guide for Business.” The Guide can be found at: Maryland has a law covering “personal information” and under its definition, real estate agents and companies are almost certain to have such information. The Personal Information Protection Act (PIPA) was enacted to ensure that Maryland consumers’ personal identifying information is reasonably protected, and if it is compromised, they are notified so that they can take steps to protect themselves. “Personal Information” is defined as an individual’s first and last name in combination with a Social Security Number, Driver’s License Number, Financial Account Number or Individual Taxpayer Identification Number. A “security breach” is defined as the unauthorized acquisition of computerized data that compromises the security, confidentiality or integrity of personal information. If a business experiences a security breach and personal information was taken that may pose a threat to consumers if misused, that business must notify the affected consumers. A business may delay notification if requested by a law enforcement agency or to determine the scope of the

breach, identify all the affected individuals or restore the integrity of the system. Notice to affected consumers must be given in writing and sent to the most recent address, or by telephone to the most recent phone number. Notice may be sent via e-mail if an individual has already consented to receive electronic notice or the business primarily conducts its business via the Internet. The law also provides for substitute notice, allowing a business to provide notice of a security breach by e-mail, posting on its website and notice to statewide media if the cost of notice would exceed $100,000 or the number of consumers to be notified exceeds 175,000 individuals. The notice sent to consumers must include the following: › Description of the information compromised. › Contact information for the business, including a toll-free number if the business has one. › Toll-free numbers and addresses for each of the three credit reporting agencies. › Toll-free numbers, addresses and Websites for the Federal Trade Commission (FTC) and the Office of the Attorney General (OAG). › A statement that the individual can obtain information from these sources about steps to avoid identity theft.

MARYLAND REALTOR® February | March 2013 9

A “security breach” is defined as the unauthorized acquisition of computerized data that compromises the security, confidentiality or integrity of personal information.

Prior to sending notification to consumers, PIPA states that a business must notify the OAG, with: a brief description of the nature of the security breach; the number of Maryland residents being notified; what information has been compromised; and any steps the business is taking to restore the integrity of the system. Finally, beginning in 2009, when a business is destroying records that contain personal information, it must take reasonable steps to protect against unauthorized access to or use of the personal information. A business that owns or licenses personal information must implement and maintain reasonable security procedures and practices appropriate to nature of the personal information and nature and size of business. If a business uses a non-affiliated third party to perform services and discloses personal information to the third party, the contract must require the third party to implement and maintain reasonable security procedures. There are a number of steps real estate companies can take to prevent and prepare for data security breaches, including: › Identifying the personal information that is currently maintained › Using adequate data storage, security, encryption, and destruction methods › Restricting employee access to personal information

Finally, every brokerage company should have a document retention policy that ties together the elements discussed in this article. Once the sources and types of information are identified, companies can evaluate the time frames for retention of that information and plan to periodically dispose of documents you are no longer required to maintain. Remember that disposal of documents must be in accordance with the standards mentioned above. All of the principles discussed here are fully explained in great detail in a new publication by NAR, “Data Security and Privacy Toolkit,” which was unveiled at the 2010 NAR Annual Convention in New Orleans. The Toolkit will assist you in developing your company’s policies and procedures. We have provided you with the particulars of Maryland law concerning security breach notification and data disposal laws. The next step should be development of a document retention policy and creation of a data security program, a model for which is included in the Toolkit. You can find the Toolkit at: Security%20and%20Privacy%20Toolkit.pdf As always, please feel free to contact the MAR Legal Department at 800-638-6425 for assistance or more information. Charles A. Kasky, Esq., RCE, Vice President of Legal Affairs.

› Adequately destroying personal information that is no longer needed › Developing a privacy policy › Establishing a security breach response plan › Establishing a security breach response team consisting of administrative, IT, legal and communications personnel.

MARYLAND REALTOR® February | March 2013 11

Meets Real Estate Everything about niche-network site Pinterest, is a marketer’s dream. Ebay will roll out its new Pinterest-styled homepage soon, featuring a picture-oriented experience. Makes us wonder why more real estate sites aren’t doing the same. With 20 million or so users, Pinterest might not be the largest network, but we could argue the audience is still highly valuable: 80% of the users are women, 55% of whom use an iPad to spend almost 16 minutes each on the site (1.9 billion times a month). As for the spending that really matters, one third of Pinterest users have clicked through and purchased a product they saw in the network, at an average of $180 per purchase. That’s double the spending per person of Twitter or Facebook users.

MARYLAND REALTOR® 12 February | March 2013

…one third of Pinterest users have clicked through and purchased a product they saw in the network… So Pinterest is to Farmville what Coca-Cola is to the neighborhood lemonade stand. Recently, mega-selling site Ebay turned to Pinterest for its upcoming make-over. Combining picture shopping and auction-selling should propel Ebay back into the attention spans of users who’ve become Facebook’d to death. Which begs the question: Why haven’t more real estate companies copied Pinterest? Any housing site could benefit from the picture-meets-purchase nexus: Housing customers shop by desire, for months before contacting an agent. Great visual cues can even cause them to throw away their initial price restrictions! How fun and compelling would it be to browse a housing site arranged by kitchens, master bedrooms or sunsets? Helping buyers shop by desired experience would transform the process from a search to a quest. In fact, it’s high time we forgot about “price, beds and baths” as the main tools on a website. What a boring, nerdy way to drain away excitement with new customers. Instead, let’s show scrolling picture-sets of living rooms, kitchens or pools to draw people. Let people browse them, rate them, save them, even share them on Pinterest and other social networks. Such an approach would keep buyers on the site longer, and help sellers leverage the best feature of their home to. Certainly

better to showcase the best rooms to attract buyers, rather than rely upon searches by room size or bathroom sinks. To be honest, one look at today’s major real estate portals and you have to wonder how today’s buyers deal with such Sears catalog presentation of information. Databasedesign thinking is so 1980s! When was the last time you walked into a Nordstrom’s and performed a mental search-filter-sort-query before browsing through the inventory? Let’s not put customers through that online, then, either. Pinterest has reminded marketers of the power of casual browsing and dreaming. It has changed the model of online shopping, dramatically for the better. Everyone who has ever went to the mall for “one thing” and came out with bags of stuff understands what Pinterest has done for e-commerce. Now it’s up to real estate sites to take the hint and copy the model. Thanks, Pinterest, for reminding marketers that databases are for computers; but pictures are for purchasers. Matthew Ferrara has spent twenty years working with sales and marketing industries, with a special focus on real estate. Today Matthew helps clients prepare for the next generation of consumers, markets and technologies. You can reach him at or

MARYLAND REALTOR® February | March 2013 13


w e i v e R

Each year we collect the past year’s Legal Hotline articles and provide an update on the status of the issue if there is anything new to report. We hope you find this information valuable, and as always, if you need anything from the MAR Legal Department, please let us know.

Lead Paint and Ground Rent Cases Create Uncertainty Two recent Court of Appeals Cases have created a great uncertainty within the legal and real estate communities. Both were decided on constitutional grounds. In the first case, the court held that the immunity provisions of the Reduction of Lead Risk in Housing Act (“Lead Paint Act”), which provide compliant landlords with qualified immunity from tort liability under specified circumstances, violate Article 19 of the Maryland Declaration of Rights. In the second case, the law (“Ground Rent Act”) extinguishing ground rents that were not registered was invalidated as an unconstitutional taking of property without compensation. In the Lead Paint case (Jackson v. Dackman), the Court concluded that the substituted remedy under the Lead Paint Act for a child permanently brain damaged due to the child’s ingestion of lead-based paint in the rental property was inadequate and unreasonable to ameliorate the harm done. The Court also held that

the unconstitutional provisions of the Act could be severed from the remainder of the Act, leaving all other provisions unchanged. The Lead Paint Act defines “owner” to mean a person or entity who owns, holds, or controls the interest to any property. The Act specifies that the term “owner” includes any buyer in possession of the property and any authorized agent of the owner, including a property manager or leasing agent. The impact of the Court’s decision is that owners, agents and property managers are at an increased risk for liability resulting from an alleged injury or loss caused by the ingestion of lead by a person at risk. In other words, an affected person may sue an owner for an injury or loss and recover an amount exceeding $17,000, the maximum amount payable under the law, which is no longer applicable. Property owners should continue to comply with all of the requirements of the Act. Property owners who “opt-in” to the program can continue to do so. As with pre-1950 properties, qualified immunity from tort liability no longer exists. Continuance of registration and performance of the risk reduction activities at each change in occupancy may assist in demonstrating

MARYLAND REALTOR® 14 February | March 2013

due care on the part of the property owner. Owners, authorized agents and property managers dealing with affected properties are urged to consult their attorney to determine the appropriate course of action.

The state will likely notify homeowners that ground rents have been reinstated. We will update you on any legislative proposals to address this issue.

In Muskin v. State Department of Assessments and Taxation, the Court overturned a key part of the 2007 law, which extinguished unregistered ground rents. Under the Ground Rent Act, ground rent leaseholders were given three years to register ground rents with the State Department of Assessments and Taxation, or the ground rent would be subject to being extinguished. The ruling issued by the court said that extinguishing the ground rents is an unconstitutional taking.

In response to the Dackman lead paint case, the General Assembly passed a bill requiring the Maryland Insurance Commissioner to convene a workgroup to evaluate and make recommendations relating to lead liability protection for owners of pre–1978 rental property. The Workgroup issued its report in November 2012 and concluded that there is some limited insurance coverage available for landlords of pre-1978 rental properties and some limited opportunities for groups of landlords to take advantage of less traditional insurance vehicles, such as risk retention groups. For many landlords, however, the high cost of premiums and the cost of complete lead remediation and other possible underwriting criteria are obstacles to taking advantage of options in the private market.

The State Department of Assessments and Taxation has updated its website with the following statement: All ground rents that would have been extinguished for failure to register them are as valid as they were before the registration deadline. Any Certificate of Extinguishment issued by this Department is void and has no effect. Although failure to register the ground lease cannot be the basis for extinguishing it, the ruling left intact the requirement to register ground rents. Now, however, there is no penalty for not doing so. On that note, the Court suggested some examples of alternative statutory approaches that would be permissible. For example, a similar registration scheme might be one where failure to register a ground lease triggers an interim consequence, such as restrictions on collecting rents prospectively, or a denial of access to the courts for enforcement of unregistered ground rents until registration occurs.

The Lead Paint Act defines “owner” to mean a person or entity who owns, holds, or controls the interest to any property.

The Workgroup concluded that a State fund for lead liability insurance coverage, operating with either a retroactive “tail” claims or solely on prospective claims basis, is not financially viable due to: 1) the high cost to pre-1978 landlords for funding a required initial liability reserve; 2) the continuing and significant liability exposure as a result of past claims and potential claims in the future. The Workgroup recommended that the General Assembly should not pursue a State sponsored insurance fund designed to provide lead liability coverage for owners of pre-1978 rental property. Essentially, landlords are on their own. After the Muskin ground rent decision, the General Assembly passed legislation that requires a holder of a ground lease to comply with the existing requirement to register with SDAT before the holder may (1) collect any ground rent payments due under the ground lease; (2) bring a civil action against the leasehold tenant to enforce any rights the ground lease holder may have under the ground lease; or (3) obtain a lien on the property.

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Lingering Short Sale Questions Several issues concerning contracts for short sale properties continue to trouble callers to the MAR Legal Hotline. We are answering two of them in this month’s column. Please refer to the Legal Hotline page of the Maryland Association of REALTORS® website for more questions and answers on distressed property sales.


The Buyer submitted an offer that included the Short Sale Addendum, which provides that the contract is contingent on receipt of third party (lender) approval. Sellers accepted the offer, and the parties are awaiting third party approval. Is this an enforceable contract, or can the buyers withdraw the offer prior to receipt of third party approval?


We believe the preferred method of dealing with the short sale transaction is to treat the third party approval as any other contingency. In other words, the seller accepts the offer, creating an enforceable contract. Performance under the contract is contingent upon third party approval. Legally this is no different from any other contingency, such as financing or home inspection contingency. In this case, performance on part of the buyer and seller is conditioned upon receiving approval from the lender. Whether a buyer can rescind the contract depends on the terms of the contract itself. However, if the buyer has simply submitted an offer for consideration, the buyer can withdraw the offer any time before it is accepted or a counter-offer is received. Once the parties have entered into a contract, any changes the parties negotiate to the contract should be forwarded to the lender for review. Sometimes the lender requests changes to the contract. If this happens, the parties must negotiate the amendments. Failure to agree on amendments to an existing contract leaves the contract in force according to its original terms.


In a short sale, after buyer and seller enter into a contract, may I leave it active on the MLS and note that the seller is taking “back-up offers”? What should I do with offers I receive after the property is under contract?


No. Under MLS rules, once the property is under contract, that status must be reflected. Because the contract is contingent, the proper status is “under contract/contingent.” Do not include that the contract is subject to a kick-out provision unless the parties have actually signed a kick-out addendum. Once the property is under contract and the contract is being reviewed by the lender, you may receive additional offers. The seller (or listing agent with authorization to communicate with the lender) should contact the lender for instructions. Some lenders may ask to see subsequent offers, others may not. Once that instruction has been communicated to you, simply follow it. Remember that throughout this process the seller is your client, not the lender, and you are required to follow all lawful instructions of the client. Under the law of contract, there is no such thing as a “back up offer.” Subsequent offers should not be accepted once the buyer and seller have entered into a contract, unless they are accepted as “backup” contracts, through use of your company’s approved addendum. Sellers interested in creating backup contracts should be directed to consult an attorney because the contract provision or addendum that creates the backup contract must be carefully drafted. For our purposes, we define a “backup” contract to be a transaction that doesn’t take place unless another transaction, usually called the “primary contract,” falls through. The “backup” buyer is obligated to proceed with the sale if the seller notifies the buyer that the backup contract has become the primary contract.

Short Sales continue to represent a significant proportion of many members’ business. Please keep these issues in mind, as this guidance can help keep you from facing complaints from unhappy consumers.

MARYLAND REALTOR® 16 February | March 2013

The Duty to Disclose


As a listing agent, I struggle with how my duty to disclose property conditions relates to a seller’s obligations under the law. For example: the seller of a property filled out the Disclosure Statement on the Maryland Residential Property Disclosure/Disclaimer form. A contract was accepted, contingent on the buyer’s home inspection. After receiving the home inspection report, the buyer submitted a list of 70 items for “Corrective Action” by the seller. The seller agreed to make some, but not all repairs. In response, the buyer rescinded the contract. The seller now has knowledge of several conditions of which he was unaware before he received the report, as am I. Does this alter legal responsibilities for either of us?


The short answer is: almost certainly, yes.

Your situation crystallizes a common question we hear on the MAR Legal Hotline. You are right to distinguish a seller’s legal obligations from yours as a real estate licensee, because they are substantively different. The seller of residential property is required to provide to a buyer a completed Disclosure or Disclaimer Statement. If the seller completes the Disclosure Statement, it must be accurate, with no items left blank. If the seller completes the Disclaimer Statement, the seller is making no representations as to the condition of the property. Whether the seller discloses or disclaims, the seller is required to disclose latent defects of which the seller has actual knowledge. A latent defect is a condition that could cause harm to an occupant of the property and that could not be discovered by careful visual inspection of the property. If the seller chooses disclosure, and a subsequent home inspection exposes new conditions that would result in changes to the answers the seller provided on the Disclosure Statement, the seller must complete a new form and make that available to subsequent prospective buyers. Similarly, if the seller learns of latent defects of which he was previously unaware, the seller must disclose them, whether he disclosed or disclaimed.

Maryland real estate licensees, however, have entirely different obligations concerning disclosure of property conditions. Under the Real Estate Brokers Act, a licensee must disclose to all parties material facts the licensee knows or should know. The Real Estate Commission has said that this obligation requires a licensee to make a reasonable effort to ascertain all material facts concerning every property for which the licensee accepts agency. A material fact is anything that may affect the value of the property or a party’s decision to buy or sell the property (i.e., the terms or conditions on which the party would buy or sell). Under this standard, a licensee who comes into possession of material facts must disclose those facts to all parties. You and the seller received the inspection report. The law requires you to evaluate the conditions cited in the report in light of the definition of material facts above, and disclose to prospective purchasers the conditions that meet the definition. This is not a popular position, but it is clearly the law. For purposes of risk management, we recommend this disclosure be in writing and that you obtain an acknowledgment of receipt from the buyer. One final point. Before disclosing any material fact, first ask yourself: “What’s the fact?” In this case, it’s not simply that a condition exists, because you have no first-hand knowledge of it. Every home inspection report is an expression of the inspector’s opinion regarding the property. Therefore, your disclosure should begin with a statement like “In the opinion of a previous home inspector, the following material facts concerning the property exist.” Applying this analysis to any situation can insulate you from allegations that you failed to comply with your legal obligation to avoid error, exaggeration, misrepresentation or concealment of material facts. Questions to the Legal Hotline concerning disclosures continue to increase. In 2013 we will be developing a Continuing Education program focusing on the law governing disclosures by both sellers and real estate licensees.

MARYLAND REALTOR® February | March 2013 17

Properly Terminating a Contract


I represent the seller. The buyer did not obtain financing within the specified time provided in the contract. I sent the release to the buyer’s agent but the buyer refuses to sign it. Can I put the property back on the market?


There is still a lot of confusion about the right way to terminate or release a contract under various situations. We believe additional training is required and offer this information to assist in those efforts. MAR has published two forms that you should be using. The first step is to identify the circumstances under which the contract has failed to settle. On one hand, it could be because the parties have agreed to a contingency that has not been satisfied. Unless the specific contract provision provides otherwise, the parties would typically each sign a Release of Contract addendum. On the other hand, under the “Time is of the Essence” provision in the MAR Contract of Sale, the non-defaulting party sends written notice to the defaulting party terminating the agreement. Similarly, underthe Financing Paragraph (MAR Residential Contract Para. 10) and MAR Property Inspections Addendum, the contract is terminated when one party sends the other party to the contract written notice of the termination. There is a substantive difference between a mutual release and a unilateral termination. Essentially, the difference lies in whether the Contract permits one party to terminate the agreement under certain conditions (unilateral termination), or whether both parties must agree to terminate the Contract and relinquish their right to pursue legal and equitable remedies (contractual release). The “Time is of the Essence” paragraph of the MAR Residential Contract of Sale permits a party unilaterally to terminate the agreement when the other party fails to perform within the prescribed period. Where the Contract permits unilateral termination, consent of the other party is not required, the agreement is no longer binding when delivered to the other party, and the parties have no further obligation to perform.

In addition to the “Time is of the Essence” paragraph, several other provisions in the Contract (and related addenda) explicitly permit a party to terminate the agreement unilaterally if the other party fails to perform. For example, under the Deed and Title provision, if the seller is unable to cure a title defect and fails to obtain title insurance on the property, the buyer may terminate the Contract. Similarly, in the Buyer Responsibility provision of the Contract, if the buyer misrepresents her financial capability to purchase the property, the seller may unilaterally terminate the Contract. In all of these instances, the Contract language specifically provides that mutual assent is not required to terminate the agreement. Where the Contract permits one party unilaterally to terminate the agreement, it is our view that a seller may place the property back on the market once the notice has been sent. If the buyer terminates, the buyer may begin submitting offers on other properties. Of course, the party receiving the termination notice may disagree with the other party’s rationale for voiding the agreement. We make no representation regarding that party’s ability to pursue legal and equitable remedies against the other party. In this regard, it is important that the parties understand that if a party exercises the right to terminate the Contract, the other party is not precluded from pursuing any legal and equitable remedies that party believes she is entitled to.

There is a substantive difference between a mutual release and a unilateral termination.

MARYLAND REALTOR® 18 February | March 2013

In contrast, a contractual release requires mutual consent. In executing a contractual release, each party agrees to relinquish that party’s legal and equitable rights/claims against the other party and both parties’ obligations to perform are fully discharged. Keep in mind that both the contractual release and unilateral termination are different from the release of deposit agreement. (There is often confusion about this because many of the release forms currently in use address both the deposit and the contract in the same form.) Thus, although a party may unilaterally terminate the Contract if the Contract permits, that party must exercise the right in strict accordance with the Contract language and should refer to the specific provision that the party believes entitles him to end the agreement. Finally, regardless of whether the contract is voided mutually or unilaterally, the release of deposit agreement must always be signed by all the parties. This continues to be the single most common question to the Legal Hotline. Please familiarize yourself with the contents of this article. It will be of significant use to you in all of your transactions.

Another widespread misunderstanding of the law is that a seller’s agent must always disclose to a buyer’s agent that he or she represents the seller.

Agency Disclosure Forms — There is No Magic Number


There seems to be some confusion about the Understanding Whom Real Estate Agents Represent (Agency Disclosure) form. I have been told that every file must contain 4 forms. Is there, or is there not, a specific number of forms required for each transaction?


No, there is no specific, uniform number of agency disclosure forms for every transaction. We are aware that some instructors have taught a rule that each residential real estate transaction should or must include four completed agency disclosure forms. We also are aware that some brokers have adopted internal procedures that require managers to look for four agency disclosure forms in each transaction. However, Maryland law does not contain a provision requiring a specific number of agency forms to complete a residential real estate purchase or sale. So it is not legally correct that four agency disclosure forms are required for every residential real estate transaction. The law actually requires that an agent provide the disclosure form at the first scheduled faceto-face meeting; there is no standard number of contacts an agent should expect to have when working with a particular buyer or seller. It appears to be common for agents and some managers who have a listing to request a copy of the buyer’s agent disclosure form signed by the buyer. Sometimes the buyer’s agent requests a copy of the disclosure form signed by the seller at the request of the listing agent. The law does not require this, and the other agent does not have a legal obligation to provide a copy of the disclosure signed by his or her client. Another widespread misunderstanding of the law is that a seller’s agent must always disclose to a buyer’s agent that he or she represents the seller. In fact, the seller’s agent need only provide the agency disclosure form to unrepresented buyers. This is consistent with the policy behind the law that it is imperative to disclose whom you represent to a consumer, especially when the consumer is not represented and your client is on the other side. It’s easy to understand why this is the single most important

MARYLAND REALTOR® February | March 2013 19

aspect of the law. Consumers need to know to be careful because you represent the interests of the person the consumer may be negotiating with. For example, if the seller’s agent shows the listed property to an unrepresented buyer, as a customer, not as a client, the law requires the seller’s agent to present the Agency Disclosure form to the buyer and ask to have it signed, acknowledging the licensee as the seller’s agent. If the listing agent shows the property to five unrepresented buyers, five distinct forms must be in the file. (Don’t forget to give the consumer a copy of any form he or she signs.) This illustrates why there is no single, specific number of Agency Disclosure forms for every transaction. On the other hand, suppose the buyer views a property, is accompanied by an agent and the seller or listing agent is present to disable the alarm, etc. Under these circumstances, the duty of disclosure falls on the agent accompanying the buyer. Historically (before 1999), the agent taking a buyer to see property was the seller’s agent. After the current law took effect, almost all licensees take buyers to see property as the buyer’s agent. Therefore, it is important to provide the Agency Disclosure form to the seller (or seller’s agent) identifying oneself as the buyer’s agent. If, in the course of representing a buyer, you have 5 scheduled face-toface contacts with 5 different sellers or seller’s agents, you must have 5 Agency Disclosure forms signed, one for each contact. This is another illustration of why there is no uniform rule that applies to every transaction. You may be asking whether there are a minimum number of forms each transaction folder should contain. The answer is yes. Each file must contain the agency disclosure form the client signed when you disclosed to him that you were representing him. A listing agent’s file must contain a copy of any form the agent presented to any unrepresented buyer who viewed the property with the listing agent. The buyer’s agent’s file must contain the form used to disclose to the seller that the agent was the buyer’s agent. This is the bare minimum under the law.

Maryland’s agency disclosure law is not a model of user-friendly legislation. Nevertheless, it can be easily complied with by following a few simple guidelines. Imposing additional, unauthorized requirements, especially on agents from other companies, only makes compliance more difficult. Maryland’s Agency law is not going to change any time soon, so the MAR Legal Department will continue to provide guidance on the best ways to comply, with emphasis on simplicity. Advising members about managing risk has always been our top priority. If you have additional questions, please contact the MAR Legal Department at 800-638-6425 or

Trouble Seems to Find Us


I represent a seller in a short sale transaction. Where can I find guidance about the lender’s procedure for handling offers that come in after the property is under contract? Also, I’ve heard a real estate licensee who fails to notify the lender of all offers can be investigated for fraud. Is this true?


Let’s assume the seller and lender have agreed that a short sale is the best alternative. You have listed the property and received an offer that the seller accepts. Once the property is under contract, you change the status in the MLS to Under Contract/ Contingent because it’s subject to third party (lender) approval. Because buyers’ agents know it’s a potential short sale, they may advise buyers to pursue the property knowing that contracts are often not approved by the lender. As a consequence, many listing agents receive offers on short sales even after the property is under contract. There are best practices to follow under these circumstances.

MARYLAND REALTOR® 20 February | March 2013

Under Section 17-532(c)(1) of the Maryland Real Estate Brokers Act, a licensee shall, unless otherwise specified in the brokerage agreement, present in a timely manner all written offers or counteroffers to and from the client, even if the real estate is subject to an existing contract of sale or lease. The REALTOR® Code of Ethics contains a similar provision. Given this requirement, the best practice is to ask the seller/client for instructions. In turn, the seller should ask the lender for instructions according to its policy. If the lender requests the seller to forward offers after the property is under contract, and the seller requests you to do so, you must follow those lawful instructions and submit offers to the lender notwithstanding the property is under contract. Note that not all lenders will require this, so it’s important to ask and to place in the listing agreement exactly what those instructions are. This raises some concerns, especially given recent developments in other states. The FBI is investigating brokers who handled short sale transactions to determine whether fraud on the lender was committed. According to certain sources, it is the FBI’s position that a broker who does not submit all offers to the lender could be charged with fraud. This applies even if the property is under contract. I have several concerns about this. Certainly there is a potential problem. Although I am not personally aware of any wrongdoing here in Maryland, I have read accounts from other states where the process was manipulated to the benefit of the agents and brokers involved and to the detriment of sellers and lenders. If in fact legitimate offers are not presented in a timely manner and given

FREE Legal Hotline

full consideration by sellers, it’s clear that violations of Maryland law and the Code of Ethics have occurred, and that potential fraud on the lender has occurred if the offer would have increased the seller’s net, thereby decreasing the lender’s loss on the short sale. However, one could argue that if the brokerage agreement specifies that the seller, after communicating with the lender, directed the listing agent not to submit offers after the property was under contract, following that instruction cannot be considered fraud. However, given what apparently the FBI is investigating, it makes sense to take appropriate steps to minimize risk. Regardless of what’s in the listing agreement, I recommend that all brokers discuss this matter with their attorneys and to document (perhaps by certified mail) that the broker has forwarded to the lender all offers received on the property. If the lender is only accepting contract information online and the system does not accept offers after a contract has been accepted, the letter should make a reference to this fact and state that the broker is forwarding all subsequent offers received as part of the broker’s duties, for whatever action the lender deems appropriate. The goal here is to create a paper trail so there cannot be even an allegation that the broker failed to disclose information that could have resulted in a reduction in the amount of loss experienced by the lender or that would have affected the lender’s decision concerning the contract under consideration. Although this is not a common experience, you should be prepared for it.

Beginning Friday, February 1, 2013, the Legal Hotline call-in hours are Monday, Wednesday, and Friday • 10am – Noon and 2pm – 4pm • 1-800-888-1272

MARYLAND REALTOR® February | March 2013 21

REALTORS® Inaugural Lobby Day Aims at Influencing State Legislators Over 100 Realtors® met in Annapolis to talk to legislators about key issues and priorities in the 2013 General Assembly. Visiting 105 Delegate and Senate offices, Realtors presented key housing information so each representative could see the state of the housing market in his or her jurisdiction. Senate President Mike Miller addressed the group before it dispersed for individual visits. He congratulated Realtors® on their successful campaign to preserve the mortgage interest deduction, calling them one of the most powerful voices in Annapolis.

MAR President Carlton Boujai introduces Senate Speaker Mike Miller during Lobby Day program.

Frederick County Senator Ron Young meets with (L to R) FCAR President-elect Michael Kurtianyk, MAR President Carlton Boujai, Frederick REALTORS® and MAR Leadership Academy students Rose Thomas, Jennifer Grove, and Steve Jarvis.

2013 Legislative Committee Chair Gwen Wynn welcomes 115 REALTORS® to Lobby Day.

Frederick County Delegate Michael Hough reviews statistics from Frederick Association of REALTORS® President-elect Michael Kurtianyk.

Carroll County REALTORS® gather at the entrance of the Mike Miller Senate Building.

Preparing for their visits with Harford County legislators are REALTORS® Julie Duley, Maria Terry, Simon Nwaigwe, and Harford AE Mark Wilson.

Howard County REALTOR® delegation assemble prior to visiting their legislators.

Gwen Wynn, and Lobbyist Frank Boston greet Baltimore City Delegate Curt Anderson.

REALTORS® led by GCAAR delegation: Realtor Tim Knobloch, Executive Officer Mike Moran, GAD Katelyn Peters, and DC Association CEO Ed Krauss head to their appointments.

MARYLAND REALTOR® 22 February | March 2013

Regulation News

Fishing in Another Pond Part Deux Ed Note: The following article is based on articles published in the February/March and April/May 2006 editions of Maryland REALTOR®.

If you have decided that there are opportunities for you to expand your real estate practice to more distant parts of Maryland, you should consider carefully the issues that will arise. Before taking the leap into a new market, step back and answer some basic questions.

1. Do I have a business plan for this new market? 3. What about the requisite expertise to Do you intend to add a new location or specialty to your real estate practice, or do you simply have a particular client interested in doing a deal outside your normal area of expertise? If you decide to broaden your practice area, your plan must allow you to spend the time and financial resources necessary for you to educate yourself formally and informally about the requirements of your new market. Do not assume that you are “ready to go” immediately after reviewing the local contract addenda available on the MAR website— local customs, requirements and protocols may not all be reflected there.

2. What are the unique laws and land use restrictions that I must learn to provide competent service to my clients in the new market place or specialty?

Start by reviewing the local or specialized forms available on the MAR website. You should also review local laws and take classes in the local area or specialization. It may also be helpful to join the local REALTOR® association in the new market area, which can provide information and resources about local practices. If the prospect of assuming responsibility for learning a new set of local requirements is too daunting, or if you have a client who wants immediate representation, consider an affiliation with a REALTOR® in the area who is knowledgeable about local laws and restrictions. Sharing a commission may be a greater net benefit than spending the time and money necessary to be sure you are fully qualified in a new area.

represent clients in this area or specialty?

When an agent decides to practice outside parts of the state he or she is familiar with, others are also affected. If you are a broker or manager or team leader, you have the additional responsibility of ensuring that the agents under your supervision are fully qualified to practice in the new area or specialty. If the agent can not demonstrate that he is fully qualified, you should recommend that he refer the client to a qualified agent in the area. Remember that the firm has an obligation to work in the best interest of the client. A failure to fulfill that obligation could result in civil liability and or Real Estate Commission disciplinary action.

4. What disclosures are unique to the new market area?

Under both the National Association of REALTOR® Code of Ethics and Maryland law, real estate agents owe clients a high level of knowledge and competence. Virtually every Maryland jurisdiction has its own unique disclosure issues and requirements. These can include land use plans, waterfront access and riparian rights, septic/sewer/well and water notices and airport noise. Agents should also discuss with their clients how vacation and investment properties have been used in the past by the seller and whether the buyer intends to honor the long term lease of an existing tenant or the short term leases of vacationers. These are a few of the issues REALTORS® should consider and discuss with Brokers before attempting to represent a client outside the agents typical area of expertise. Referring a client to a more knowledgeable colleague will often result in a satisfied client and a lasting business relationship. Mark Feinroth MAR Director of Regulatory affairs and Don Martin is Director of Board and Member Services.


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MARYLAND REALTOR® 24 February | March 2013

Maryland Real Estate Commission News K atherine C onnelly


Commission Kicks Off Online CE Record Keeping

s of January 1, 2013, continuing education providers are required to upload every licensee’s course participation data directly to the Commission within 14 days of the class. When the Commission receives notice from an education provider that a licensee has earned credit for taking a CE class, we will automatically send an email informing the licensee that credit was earned and recorded by the Commission. The notification includes the name of the provider, course name and date, CE category and number of credit hours. PLEASE NOTE: You will receive a separate email for each class, even if taken on the same day at the same school. We expect that this new CE data bank will be an improvement over the random audit system the Commission previously relied upon, and will allow us to ensure that every Maryland real estate licensee has completed the education required by law. Licensees are no longer required to retain original course completion certificates for classes taken after January 1, 2013. However, you are expected to ensure that the Commission has your current email address so that we may send you the automated course completion notices. We recommend that you monitor the Commission’s database to ensure you are credited for the courses you take. You can access the CE web portal, at https://www. CEquery1.cgi to verify your individual CE records. Please remember that not all of your classes prior

to January 1, 2013 will be on the website, as the requirement was not in effect before that date. Use your current electronic licensing user identification and password to access your CE record. We recommend checking the database periodically to ensure its accuracy. The Commission will eventually link the electronic license renewal system to the digital CE records, but it will take four years to gather sufficient CE participation data to complete the transition, as licensees need only take their agency and or supervision courses once every fourth year. CE course providers are no longer required to provide licensees with paper CE certificates as of January 1, 2013. Providers may voluntarily issue course completion certificates and licensees may retain the certificates in their personal files as a back up CE record. During the transition period, the Commission will conduct random CE audits for CE taken prior to January 1, 2013. We expect to entirely discontinue the random audits by the end of 2014. If you have questions about CE information that has been uploaded, please contact the school where you took the class. The Real Estate Commission does not load the information and therefore cannot correct any errors. Katherine Connelly is the Executive Director of the Maryland Real Estate Commission. If you have other questions regarding the digital CE record system or any other matter concerning your Maryland real estate license at contact her at or visit

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MARYLAND REALTOR® 26 February | March 2013

Start the Year Right— Minimize Your Risk of an Errors and Omissions Claim


ven the most experienced REALTORS® know they cannot control all aspects of the transaction and could be at risk to an errors and omissions claim. Claims can be time consuming by giving depositions, and ensuring that proper documentation is available— not to mention the financial and emotional costs associated with litigation. Here are valuable tips to manage risk and avoid the possibility of a claim against you. ■ Keep and document everything—Significant phone calls, client intake interview notes, emails, and voice and text messages, in addition to the closing file. Winners in lawsuits aren’t always who is right but the person with the most comprehensive documentation. Documentation can be your best defense in the event of a lawsuit. ■ Recommend Experts—Your clients should utilize experts such as inspectors, surveyors, financial advisors, and attorneys. Avoid offering advice outside your area of expertise and recommend an outside professional. If your client does not wish to use an

Stay within your area of real estate expertise.

expert in a particular field, be sure to obtain a written waiver or acknowledgement of your recommendation. Stay within your area of real estate expertise. If you specialize in residential real estate sales, a complicated commercial transaction should be referred to someone specializing in commercial real estate. ■ Education—As REALTORS®, you are held to a high standard. Stay current on changes to forms, laws, and other relevant industry trends. Be careful about positioning yourself as an “expert,” which could open you up to risk. The Maryland Association of REALTORS® is your best resource for an array of free services that will assist you and keep you informed. ■ Follow Pre-Established Office Policies—You may have been practicing Real Estate for many years and feel comfortable “doing your own thing” but preestablished office policies are there for a reason. They promote consistency and provide defense counsel with a case promoting good office practices. A plaintiff’s attorney will look for examples of activities outside those office policies to establish a pattern to support the perception of non-compliance. With the market improving, it’s a very good time to be sure you are doing all you can to make 2013 a profitable year without the headaches associated with an E&O claim. Lisa Scoble, Vice President Program Business for Pearl Insurance. For more tips and other risk reduction techniques, visit:

MARYLAND REALTOR® February | March 2013 27

Residential Sales ANIRBAN BASU

Housing Leads U.S. Economic Recovery in 2012 Maryland Housing Indicators Continue to Improve


ith the noteworthy exception of the nation’s still rapidly expanding national debt, 2012 will be viewed by economic historians as a year of progress. U.S. financial markets performed well, with all major stock indices reporting year-overyear gains (NASDAQ: +16.0%, S&P 500: +13.4%, Dow Jones Industrial Average: +7.3%). The number of jobs expanded, unemployment fell, auto sales surged and consumer spending rose. According to the most recently revised estimate from the U.S. Bureau of Economic Analysis, national gross domestic product expanded 3.1 percent during the third quarter of 2012 on an annualized basis. The fourth quarter wasn’t nearly as good and though fourth quarter data have yet to be released; the expectation is that the U.S. economy expanded only about 1 percent on an annualized basis during the last quarter of the year. Despite that, many economists estimate that the nation’s economy expanded in the range of 2.1 percent last year, a bit better than 2011’s 2.0 percent performance. One of the most noteworthy improvements in 2012 occurred in the nation’s housing market, which is now

associated with both rising sales and median prices. According to the National Association of REALTORS®, existing home sales rose 5.9 percent to a seasonally adjusted annual rate of 5.04 million in November, from 4.76 million in October. Existing home sales are now 14.5 percent higher than a year ago, due primarily to a combination of consistent job growth and extraordinarily low mortgage rates. The national median existing-home price for all housing types was $180,600 in November of this year, up 10.1 percent from November 2011. Maryland has participated in the nation’s housing recovery. According to data supplied by MRIS and the Coastal Association of REALTORS®, home sales rose 18.8 percent in November compared to November 2011. Seventeen of Maryland’s 24 jurisdictions posted sales increases over the past year: Talbot County (127.3%), Dorchester County (50.0%), Cecil County (41.9%), Washington County (33.3%), Worcester County (35.6%), Anne Arundel County (31.9%), Frederick County (30.5%), Queen Anne’s County (28.9%), Baltimore County (28.3%), Baltimore City (23.3%), Montgomery County (23.0%), Carroll County (21.4%), Howard County (19.6%),

MARYLAND REALTOR® 28 February | March 2013

Kent County (14.3%), Calvert County (12.5%), Charles County (4.8%), and Harford County (4.2%).

November 2012 vs. 2011 Units

Average Price




% Change










Anne Arundel







Baltimore City







Baltimore County



























































































Prince George’s







Queen Anne’s














St. Mary’s



































TOTAL 4,520






Figures reflect resales and new properties. Residential resales are reported by MRIS ® and local boards MLS systems.

% Change

Jurisdictions with sales declines in November included Somerset (-35.7%), Allegany (-15.0%), St. Mary’s (-11.4%), Wicomico (-6.7%), Caroline (-4.5%), Garrett (-3.4%), and Prince George’s (-0.5%) counties. In many of these counties, the absolute decline in sales was quite small and not statistically significant. For instance, unit sales declined from 22 to 21 in Caroline County, from 626 to 623 in Prince George’s County, and from 45 to 42 in Wicomico County. The now well-established pattern of year-over-year sales increases persisted into December, with unit sales rising 8.2 percent statewide over the past year. All but 7 jurisdictions experienced increases in unit sales, with the largest increases occurring in Garrett (72.2%), Calvert (56.4%), Talbot (53.1%), and Caroline (50.0%) counties. The largest declines occurred in Somerset (-42.9%), Wicomico (-26.1%), and Dorchester (-13.6%) counties, though again the absolute decline in unit sales was small. Price dynamics also continue improve in Maryland. In November, average statewide sales price was up 5.3 percent, while median price rose 6.9 percent. For the month, 15 jurisdictions experienced year-over-year increases in average sales prices. The largest year-overyear sales price increases in November occurred in Kent County (average price rose 59.3%; median price was up 23.0%), Caroline County (average price increased 38.3%; median price rose 38.2%), and Talbot County (average price was up 13.3%; median price rose 39.7%). Prices climbed even faster in December on a year-overyear basis, with average sales prices up 9.8 percent statewide compared to December 2011 and median prices up 9.3 percent. During the month, 17 jurisdictions reported higher average sales prices compared to a year ago while 19 reported higher median sales prices. Certain jurisdictions experienced significant year-overyear increases in both average and median prices, notably Frederick County, where average price increased 20.4 percent and median price rose 33.5 percent, and Wicomico County, where average price rose 32.0 percent and median price was up 18.3 percent.

MARYLAND REALTOR® February | March 2013 29

Looking Ahead For the first time in years, the outlook for the national and local housing markets is decidedly optimistic. Leading economic indicators remain positive and for the most part support the promising outlook. Pending sales in Maryland were up on a year-over-year basis in both November and December. In December, pending units statewide rose from 4,193 in December 2011 to 4,290 in December 2012. Market strength has spread throughout much of Maryland and is no longer confined to leading jurisdictions like Montgomery and Howard counties. For instance, in Harford County, pending units totaled 150 in December of 2011 and rose to 182 one year later. In Anne Arundel County, pending sales rose from 364 to 414 over the past year. In Carroll County, pending units are up from 86 to 110. The active inventory of unsold homes also continues to decline on a statewide basis and is now below the perceived level at which housing supply and demand are at balance (6 months of supply). In December of 2011, months of unsold inventory stood at 7.2 months. One year later, inventory had dropped to 5.0 months. Several jurisdictions in and around the Capital region appear to now be experiencing a shortage of housing inventory, including Montgomery County (2.1 months), Prince George’s County (2.7 months), Frederick County (3.0 months) and Howard County (3.1 months). The implication is that the market has transitioned from a buyers’ market to more of a sellers’ market, which suggests that additional sales price increases are forthcoming. This does not signify that the housing market is out of the proverbial woods. The nation faces another debt showdown and households are wrestling with higher taxes. The first half of the year will be quite soft from an economic growth perspective, but the second half should be meaningfully better. Anirban Basu, Chairman & CEO, Sage Policy Group, Inc.

To view all monthly and annual calculations of the Maryland housing statistics visit: and scroll down the left sidebar to Housing & Statistics.

December 2012 vs. 2011 Units

Average Price




% Change



% Change








Anne Arundel







Baltimore City







Baltimore County



























































































Prince George’s







Queen Anne’s














St. Mary’s



































TOTAL 4,398






Figures reflect resales and new properties. Residential resales are reported by MRIS ® and local boards MLS systems.

MARYLAND REALTOR® 30 February | March 2013

SNIPPETS We’re always looking for ways to keep our members safe. With, set emergency contacts from your address book, then set an alarm. If you don’t check in before the designated time, the app alerts your contacts. There is also a panic button in case of unexpected danger. It works even if your phone gets turned off at some point, and will even tell your contact the last known location of your phone. Free for the IPhone. To date, there’s no Android equivalent.

REALTOR® License Plates Show everyone that you’re a REALTOR®. This special plate will set you apart from everyone else as a Maryland REALTOR®. For information or an application, contact Halle Papai at 800-638-6425 or halle. (Vanity plates are not available with this offer.)

Keep Up With News! is the most visually attractive way to keep up with the news of the day. You can then read the headlines, brief summaries or full articles. You can also customize the categories and news sources that contribute to the categories you choose for your feed. Free for the IPhone.

Planning An Event? Yapp lets you make your own mobile app for the big day. Guests download the app, which can include an invitation, a schedule of the day’s events, a news feed where guests can upload content and more. IPhone and Android.

Mark your calendars for April 20 and 21, 2013—and join REALTORS® and associations throughout the U.S. and internationally for a weekend open house. Contact your local association for more information.

If you have a ‘ridiculously useful website’ to share with fellow REALTORS®, email:

The sites are presented for information only. MAR is not responsible for the content of external websites and does not endorse them or their functionality. Although we make every effort to ensure these links are accurate, up to date and relevant, MAR cannot take responsibility for pages maintained by external providers. Views expressed by individuals and organizations on their own websites are not necessarily those of the Maryland Association of REALTORS®.

MARYLAND REALTOR® February | March 2013 31


Realtors Property Resource®

Expands the data power for commercial REALTORS®


aryland REALTORS® can now access a valuable and FREE resource for comprehensive residential and commercial property tools and information. Both the RPR® Residential and Commercial sites are available exclusively to REALTOR® members with a NRDS number. RPR® allows you quick access to hundreds of datasets on residential and commercial properties including Mini Reports and highly detailed Stats and Charts for properties within the U.S. No advanced technical skill sets are needed to fully use the RPR® search and data reporting tools. For example, the Trade Area Report has Consumer Segmentation categories, an effective differentiator for commercial listing proposals and sales presentation packages. Selected sold comps, property listings, and off market properties can be researched for inclusion in BPOs. RPR®’s Residential and Commercial database components feature: ■ Tax assessment/public records on 147 million parcels of property in the U.S. ■ MLS/CIE sourced data, where licensed from partnering MLS-CIEs ■ Best Businesses Report showing best types of businesses for a specific area

■ Aerial photography, bird’s eye view, geo-spatial data, and street level images ■ FDIC-owned properties for sale (CRE & RRE) plus mortgage and lien information ■ Census, demographic and lifestyle data, dynamic mapping, and FEMA flood maps ■ The largest national database, by county, of foreclosure, pre-foreclosure, REO & default data

STEPS TO ACCESS THE POWER OF RPR® Quick Start: 1. Go to the login page: 2. Click “create New Account” and enter: Last name & NRDS#. You will be guided through the application process. 3. On the MY PROFILE page: Fill in as many details as you can—especially your contact info, which will appear on the reports. Upload your photo and logo. Set your MLS info & home area—you will need to know your MLS and Agent ID numbers.

RPR® is currently contracted with 435 MLS partners across the country, representing over 72% of All REALTORS®. Since November 2012, there have been record levels of activity on all areas of RPR®’s Application and Support Systems, Training Classes, Broker Tool Sets, and RPR® Blog Traffic.

Sydney Machat, CCIM, CRE is a senior advisor with Sperry Van Ness–Miller Commercial Real Estate, a regional firm headquartered in Salisbury, MD. Syd operates SVN-Miller Commercial’s Hagerstown Area satellite office located at Keedysville, MD.

For FAQs, instructional videos, or to schedule a training class near you, visit RPR®’s Blog at for FAQs, overviews, instructional videos and webinars, or sign up for an RPR training class near you.

MARYLAND REALTOR® 32 February | March 2013

From the Hotline C H A R L E S A . K A S K Y, E S Q U I R E

A Perfect Illustration In this issue, we’re taking a break from the normal Q & A format of this column to discuss a recent case that illustrates perfectly the pitfalls facing REALTORS® and their duty to exercise care when representing parties who enter into contracts to purchase property. This case involved a short sale, but has relevance for any transaction. REALTORS® must pay attention to each detail of the transaction to protect the client’s interests. A Tennessee court has considered whether a prospective buyer could bring breach of contract allegations against the seller, the listing broker, and the eventual buyers of the property for allegedly failing to disclose that the transaction would require short sale approval. Seller listed a property for sale with Listing Broker and Listing Agent for $159,000. Buyer made an offer to purchase the property for $147,300. The offer was made on a standard form contract and incorporated by reference a short sale addendum. The Seller rejected the Buyer’s offer, but made a counteroffer that included a $151,000 sales price and making the contract subject to lender/3rd party approval. The Seller sent the counteroffer to the Buyer. Buyer accepted the counteroffer, but the contract was never approved by the seller’s lender. Ultimately, the property was sold to a different purchaser. Buyer filed a lawsuit against the Seller, Listing Broker and eventual purchaser seeking specific performance of the sales contract and alleging breach of contract. The court ruled against the Buyers and entered judgment in favor of the defendants, finding that there was not an enforceable contract between the parties. The Buyer appealed.

The Court of Appeals of Tennessee affirmed the trial court. The court considered whether a contract existed between the parties. The Buyer argued that there was no short sale addendum attached to the agreement and so a short sale was not part of the agreement between the parties. However, the purchase offer (prepared by the buyer’s representative) had incorporated by reference a short sale addendum and the Seller’s counteroffer had included as a requirement that the transaction was contingent on “lender/third party approval.” In examining a contract, courts look at the contract’s language to determine the intent of the parties. Looking at the language used in the initial purchase offer and the counteroffer, the court ruled that it was clear that the parties intended to include short sale provisions in the purchase contract. However, it was not clear what short sale provisions the parties intended to include in the contract and so there was no “meeting of the minds” on the terms of the contract. An enforceable contract requires a “meeting of the minds.” Therefore, the court affirmed the trial court’s ruling in favor of the Seller, Salesperson, and the Brokerage because there was never an enforceable agreement between the parties. What doomed this contract was the attempted short cut of incorporating by reference the short sale addendum instead of including the proper form into the actual contract. That simple step would have cured the problem. The Legal Hotline has reinstated its Friday call-in hours beginning Friday, February 1, 2013. The hours of operation are M, W, F, 10 a.m.–12 noon and 2–4 p.m. Charles A. Kasky, Esquire , Vice President of Legal Affairs Maryland Association of REALTORS®.


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February/March 2013