Questions and Answers

Ask George & Chuck: Questions from Consumers
by George Stephens & Chuck Jacobus
Realty Times
November 14, 2006


Question (NJ): My girlfriend and I are buying a condo unit in NJ. I am self-employed, and am not on our mortgage application. We want to know how to ensure that the house is equally both of ours and will go fully to the other person should one of us die. Do we put me on the title and deed at closing? Can we do this if I am not on the mortgage app? What effect will this have on us when we get married?

Answer: Since you are not currently married, you and your girl-friend can co-own the condo either as Tenants In Common or as Joint Tenants With Right of Survivorship. NUPPLegal defines these two methods of ownership as:


Tenancy in Common: In a tenancy in common, all owners have equal rights to use the property. Ownership shares may be equal, however, unequal shares may be arranged by deed or other written contract. An advantage of tenancy in common ownership is that each co-owner is free to transfer or bequeath his/her interest to anyone he/she chooses.

Tenancy in common is the most common way for unmarried people to own property together. Married couples also can use this form of co-ownership, but more often choose joint tenancy or tenancy by the entirety.

Joint Tenancy with Right of Survivorship: Any two (or more) people can own property-typically real estate or a bank account-in joint tenancy with rights of survivorship. When one of them dies, his or her share automatically goes to the surviving owner. The phrase "as joint tenants with full rights of survivorship" or similar wording (governed by state statute) must appear in the deed. A joint tenant cannot use a will to leave his or her share of joint tenancy property to someone else. If all joint tenants die simultaneously, no one owner has survived any of the others, each joint tenant's interest in the property passes by their will.
Sometimes owners decide to change ownership of property from joint tenancy to tenancy in common in order to leave their interests to someone other than the surviving joint tenant(s). In most all states, transfers out of joint tenancy into another form of co-ownership can be done even if the other joint tenant objects.

You may, however, need to be listed on your mortgage application as a co-purchaser, even though your credit is not used for loan qualification purposes, in order to have both of your names appear on the deed. We recommend that you check with a mortgage company as to the best way to disclose your co-tenancy of the condo.

Question (GA): I am a real estate agent in Georgia and have an exclusive right to sell listing on a piece of property for 5.5 million. The owner is a reasonably good client but will always try to talk me down on commissions. Last week he told me that he had taken a contract on this property but had not said anything to me because, there were still a couple of contingencies and he wanted me to continue to show it. Apparently he is going to pay a commission to an individual who constantly shows property and receives a commission, but who is not licensed.

From what I understand, he is sometimes paid by the buyers and sometimes the sellers. Naturally, I was shocked but kept my cool until I had talked with an attorney and my broker. What can be done to the person who is getting my commission? I do understand I have a claim against the seller but I also want to stop this individual from this practice.

Answer: If you have an Exclusive Right To Sell listing agreement (as opposed to an Exclusive Agency Agreement), then your first choice should be to enlist your broker's agreement to sue for the commission if and when it becomes appropriate.

We are surprised that neither your real estate broker nor the attorney with whom you stated that you spoke advised you to contact the Georgia Real Estate Commission ("GREC") and file a complaint against this unlicensed person. Are there substantive additional facts that make contacting GREC and/or filing a complaint unwise?

Question (CA): My wife and I are looking to buy a second home and also a section 8 rental in the Houston/Sugarland area. Our daughter and soon-to-be son-in-law live in Sugar Land. Can you recommend an affordable area?

Answer: We suggest that you register as buyer prospects on the Houston Association of REALTORS® website at har.com, under "Find a Home, Find a REALTOR&Reg;." That site is set up to specifically allow you to familiarize yourselves with homes and Realtors before you make any commitments. Once you develop a list of probable homes in which you have an interest, you will also have a list of Realtor Firms that are active in that area. Interview an adequate number of real estate brokerage firms to select the firm with which you feel the most comfortable, and then do enter into a written Residential Buyer/Tenant Representation Agreement with the firm you select.

Question (WI): I am a licensed loan originator in Wisconsin. In regards to compensating a third party for business, it is my understanding that compensating someone for a sale is against the law. Can the third party company and I have an agreement to make a donation to "cancer foundation" for every sale that I generate? Or what if I would like to know if I can pay the third party company X amount of dollars for every application I submit instead of for each sale generated.

Answer: First we must advise you to seek competent legal counsel licensed to practice in Wisconsin, to obtain the answers to your two questions. As a general response made with the understanding that our response is not legal advice, the State of Wisconsin Department of Financial Institutions requires Loan Originators to not only be licensed, but to also comply with the applicable Wisconsin statutes as well as the applicable federal statutes pertaining to residential mortgage loans (see USC Title 12 Chapter 27)

We advise you to pay special attention to USC Title 12 Chapter 27 Section 2607 since the fines for non-compliance are $10,000 or one year in prison, or both for each violation. There may also be other Wisconsin statutes and/or Rules that must be complied with such as Deceptive Trade Practices to avoid advertising and/or marketing noncompliance.

However, having said the above, it seems to us that if you paid for any advertising or promotion materials that are given out to customers of the third party (including postage if they are mailed), and the car dealership, moving company, or other third-party gave them out as a "thank you for doing business with us," and furthermore you paid the third-party a market rate for providing the thank-you gift, then no "thing of value" has been paid or received by you or the third party (in excess of the actual cost to produce and distribute), and so you may be okay. However, that is why we caution you to obtain an opinion from a Wisconsin licensed attorney who is experienced in mortgage lending and laws that apply to Mortgage Brokers and Loan Originators.

Published: November 14, 2006