REALTOR Magazine April May 2018 by Bakersfield Association of REALTORS®

M A G A Z I N E APRIL / MAY 201 8

INSIDE

LIFETIME CAREER of Community Service

BAKERSFIELD POLICE Guardians of our Community

BAKERSFIELD FIRE Standing Ready

JIM BURKE EDUCATION FOUNDATION Cultivating Leaders

R E A L T O R S

P O S I T I V E L Y

I M P A C T

O U R

1 C O M M U N I T Y BAKERSFIELD REALTOR® MAGAZINE

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update

CONTENTS

2018 OFFICERS President Derek Sprague Mossy Oak Properties

Bakersfield REALTOR® Magazine

President-Elect Athena Collup Miramar International — Mill Rock

BAKERSFIELD POLICE DEPARTMENT The community and police department working as one with a common goal.

Vice President Ronda Newport Watson Realty, ERA

Secretary/Treasurer Scott Knoeb Frontier Real Estate Services, Inc. Immediate Past President Midge Jimerson Boydstun Realty Co., Inc. Chief Executive Officer Linda Jay, RCE

2018 Directors

REALTORS® – GOOD COMMUNITY STEWARDS Ronda Newport’s commitment to a lifetime career of passionate service.

JIM BURKE EDUCATION FOUNDATION Helping the youth of Kern County to excel.

Anna Albiar Coldwell Banker Preferred, Coffee William Chicas Watson Realty ERA

SETTING THE STANDARD Our members helping to grow a stronger community.

A BROKER’S BITCOIN EXPERIENCE Here’s what you need to know about bitcoin transactions.

Michele Cooper Karpe Real Estate Center

DYNAMIC ADS FOR REAL ESTATE What you need to know about Facebook Dynamic Ads.

Wayland Louie RE/MAX Golden Empire Glenn Porter RE/MAX Golden Empire Darlene Tobias Century 21, Jordan Link & Company

Brian Tuttle Coldwell Banker Preferred – Coffee

BAKERSFIELD FIRE DEPARTMENT The History of the Bakersfield Fire Department.

Ashley Weaver Karpe Real Estate Center

ON THE COVER

M A G A Z I N E APRIL / MAY 201 8

INSIDE

LIFETIME CAREER of Community Service

Impacting and protecting our community

BAKERSFIELD POLICE Guardians of our Community

BAKERSFIELD FIRE Standing Ready

JIM BURKE EDUCATION FOUNDATION Cultivating Leaders

R E A L T O R S

P O S I T I V E L Y

I M P A C T

O U R

C O M M U N I T Y

Executive Editor - Linda Jay, CEO, RCE Managing Editor - Carol Duran Contributing Articles Editor - Tiffany Waldowski Statistics - Jamey Lyster Graphic Designers - Carol Duran and Jessica Bloom Bakersfield Association of REALTORS® 2300 Bahamas Drive, Bakersfield, CA 93309 P. 661-635-2300 F. 661-635-2317 www.bakersfieldrealtor.com facebook.com/bakersfieldrealtors twitter.com/bakorealtors BAKERSFIELD REALTOR

MAGAZINE

LETTER FROM THE PRESIDENT

Opening & optimistic Day ambitions DEREK SPRAGUE

a commitment to our industry. Surround yourself with colleagues who make you better, and achieve greatness by supporting the success of other REALTORS®.

2018 PRESIDENT

pringtime has arrived and baseball is back! Fresh cut grass, oversized American flags, and grilled hot dogs with cold beverages mark the celebration of Opening Day. Opening Day offers a fresh start; it doesn’t matter who might have a better player or the home-field advantage, everyone is in first place and optimistic that this is the year that they will win it all. Former President George W. Bush offered a unique perspective about the hopefulness of baseball in his book, A Charge to Keep. “Baseball is a pursuit for optimists, just like drilling for oil or running for office. To come to the ballpark every day, you have to believe that you can win. To drill another well after a dry hole, you have to believe that this one will succeed.” You see, “America’s Favorite Pastime” and “The American Dream” go hand in hand. REALTORS® have similar optimistic ambitions, and I know our members have drilled plenty of “dry wells” in a pursuit of success. But let’s Connect the Dots a little further…what are some of the similarities between a baseball player and a successful REALTOR®?

It Takes Teamwork to Win a Championship If a single player made the difference, one of the best players in baseball, Mike Trout of the Anaheim Angels, would have more

BAKERSFIELD REALTOR® MAGAZINE

Failure is Part of the Game Fall seven, rise eight. The best hitters fail seven out of ten times, and the best REALTORS® hear “no” more often than they hear “yes”. But failure isn’t evil. In fact, it is progress: a consequence of pushing forward and trying something new. It is inspirational to see successful REALTORS® confront failure everyday and adapt.

Have Hall-of-Fame Aspirations

Every day is a new opportunity. You can build on yesterday’s success or put its failures behind and start over again. That’s the way life is, with a new game every day, and that’s the way baseball is.” – Bob Feller

than zero playoff victories in his career. It takes an entire lineup, and I am fortunate to have the support of a leadership team who has demonstrated excellence in business and

I admire Cal Ripken Jr. for his work ethic, leadership, and commitment. He holds one of the most impressive records of all sports, having played in 2,632 consecutive Major League Baseball games. There are many more hard-working baseball legends like him, and while Cal was legendary because of his gritty mentality, he couldn’t hit like Joe DiMaggio or pitch like Sandy Koufax. Likewise, the giants in our real estate industry didn’t get there by being great at everything. In fact, “hall-of-fame” success does not have to include words like ‘volume’ or ‘production’. Matter of fact, some of the most important people in our community are not at the top of the producers list, but their entrepreneurial spirit drives them to make an impact in the lives of others every day. So keep working hard, because just as Yogi Berra said, “A nickel ain’t worth a dime anymore.”

LETTER FROM THE CEO

Telling

our story

LINDA JAY RCE, CEO

love a good story. One of my favorite memories of grade school is when my 4th grade teacher, Mrs. Miller, would bring out one of her cherished books, and read to our class. (Do teachers still do that these days? … just asking!). Her passion for the written word was always evident by the expressive and engaging manner in which she presented the story … it was captivating and always left me longing with great anticipation for the next story session. Her example instilled in me a deep appreciation at a young age for not only the written word, but also for how to tell a story in a meaningful way. It can be so powerful! If you’ve ever been to a family gathering or visiting with friends you

As REALTORS®, we do make a difference … you make a difference … every day … one family at a time … that’s why it’s important that we continue to tell our story in a meaningful and powerful way.”

haven’t seen for some time, remember how reminiscing about favorite memories would turn into hours of great story telling? Stories that are heart-warming, nostalgic, hilariously side-splitting, thought-provoking, maybe even embarrassing? That’s what stories do! They engage and stir our emotions. They bring to our remembrance those things that have touched our life in very special ways; and in some cases, may have changed our life forever. They can certainly leave an impression upon us, and in many cases even have a meaningful and long-lasting impact. Since the birth of our Association in 1905, we have been telling our story. A story about 15 visionary men who came together, committed to making a difference. A story of their passionate and ambitious entrepreneurial spirit. A story of how they helped shape our community in a powerful and positive way. And 113 years later, that impactful story continues. Each and every day our members are connecting with and

engaging families, neighbors, business associates and elected officials of our community to further our purpose of being a powerful and positive influence … to make a difference in the lives of the people we touch … and they have some amazing stories to share of how they have made a difference. Connecting is about building relationships, trust and credibility. The stronger the connections become, the more impactful and long-lasting the relationships will grow. Now, that builds community! As REALTORS®, we do make a difference … you make a difference … every day … one family at a time … that’s why it’s important that we continue to tell our story in a meaningful and powerful way. How about you? Do you have a story to tell? Will you share your story? Never underestimate the power and influence of a story well-told. I hope to hear from you soon! You can reach me at 661.635.2304 or linda@bakersfieldrealtor.org. BAKERSFIELD REALTOR® MAGAZINE

BPD – Serving as Guardians of our Community

The community and police department working as one with a common goal contribution by

EVAN DEMESTIHAS ASSISTANT CHIEF

I want to take this opportunity to thank our community for the support we as a police department feel and receive on a daily basis. The Bakersfield Police Department, “Your Police Department,” views the community and the police department as one entity working toward a common goal; a safe and thriving community for all. Unfortunately, when you hear about the Bakersfield Police Department or the police, what most often follows is news of a traffic accident or a crime of violence. What is too often missed are the many positive community activities YOUR police officers are involved in on a daily basis. At the core of most police officers lies a servant’s heart with a guardian spirit, and a deep desire to be of service to their community. In addition to the police officers, there are over 130 civilian BPD employees who serve with this same spirit. In 2017, as an organization, the Bakersfield Police Department conducted over 1700 presentations, reaching more than 81000 community members. Many of these events were attended by police officers who were off duty and decided to attend with their own families. As a police department we encourage and recognize our employees’ community service efforts both on and off duty. The philosophy of Chief Lyle Martin and the entire management team is “Community”. Chief Martin has publicly stated on numerous

occasions that we as a police department are “a problem solving organization with an emphasis on customer service”. Our community’s needs and expectations of their police department are very important to us. We are continuously looking for ways to become better connected. It is also important to us that we work hard to educate our community on our own processes and procedures so that we can strengthen our partnership and reach our goal of making Bakersfield a safe and thriving community for all. Several months ago we began hosting a community class called Principled Policing and Procedural Justice that is based on the tenets of Trust, Respect, Neutrality, and Trustworthiness. The session is held at a different location in the community and is meant to foster a healthy environment

Photo Source – BPD Facebook Page BAKERSFIELD REALTOR® MAGAZINE

between community members and police officers in order to encourage conversation about difficult and controversial topics. Both the police officers and the community members have the opportunity to hear each other’s perspective and come together to find resolution as a community. Since its inception we have received a significant amount of positive feedback and the class is now held one day a month. We encourage businesses and members of the community to host a principled policing class at their venue, or if you as an individual are interested in attending please contact us for the next available date. An example of one of our great partnerships we have in the community is with the Bakersfield Association of REALTORS® through a program called the Real Estate Anti-Fraud Advisory Coalition (REAAC), where several agencies partner to prevent, detect and report real estate fraud through both education and collaboration with law enforcement agencies. In addition to this program, the Bakersfield Police Department has many additional resources for the real estate community ranging from a crime free multi-housing program to personal safety tips. If you have ideas for community partnerships, need information, or if you’re curious about how you can become involved, please contact the Community Relations Unit at 661-326-3053 or email us Bpdcommunity@bakersfieldpd.us

Photo Source – BPD Facebook Page

REALTORS® WHO MAKE THEIR VOTE COUNT… JOIN THE RGR COMMITTEE NOW!

REALTORS® – Good Community Stewards Ronda Newport’s commitment to a lifetime career of passionate service

KIM SCHAEFER

for Humanity, Salvation Army and they painted homes for Veterans. In 2016 and GOVENRMENT AFFAIRS DIRECTOR 2017, Ronda co-chaired Bringing Home I can’t say it often enough, we are so the Cure. Both years were a great success fortunate here at the Bakersfield Association and the REALTORS® were able to give a of REALTORS® to have so many caring, large donation to both Relay for Life as dependable and committed volunteers. well as Kern County Cancer Fund. She Recently, I have had the pleasure of working has held other positions as well; Chair of with one of our volunteers, Ronda Newport. New Member Orientation, Career Booster Ronda is so deeply involved as a volunteer, and Strategic Planning and that it makes some of us Finance. She serves as the Vice ask, “How does she do President on the Associations it all?” I wanted to take Board of Directors and also a moment to highlight serves as a Director for the Ronda’s outstanding California Association of community service, and REALTORS®, where she sits impressive resume. as a Regional Representative Prior to selling Real on the Professional Standards Estate, Ronda had a Committee. lengthy career with the Ronda is a good steward of Kern County District her community, as well. She Attorney’s Office as a Ronda Newport is a volunteer for the Kern paralegal. She served as County Wounded Heroes Fund, California the Administrative Assistant to the second in Federation of Republican Women, and charge, Steve Tauzer, and she worked closely is on the Board of Directors for the Real with victims of crimes. In her off time, her Estate Professionals, and the Family Relief passion was home decorating and she owned Fund. She is also engaged in advocacy and and operated a small boutique where she politics. It is not uncommon to find Ronda could enjoy great relationships with her volunteering for local political campaigns clients and their homes. and out walking precincts on Saturdays. She Ronda’s legal ease and her love of was recently added to the Local Candidate decorating naturally evolved into a new real Review Committee because of outstanding estate adventure. She joined the Bakersfield knowledge of government and politics. Association as a REALTOR® member in In her home life, she is married to Walt 2008. Ronda’s volunteer involvement with who is not only her partner in life, but her the Bakersfield Association of REALTORS® partner at work. She loves their two dogs, began in 2012, serving as the chair of Alex and Cooper, their 5 children and each of the Community Spirit committee with a their spouses, and most of all she enjoys her heavy focus on community service. That grandchildren. year her committee worked with Habitat

The love she has for her profession as a REALTOR® with Watson Realty drives her to be an informed member of our Association. Every day she strives to be an ethical, fair and a well-respected REALTOR® member of the Association and her community. I’m looking forward to seeing more of Ronda Newport. I know we can expect great things. Thank you for all you do, Ronda! Here are a few ways you can do your part: ADVOCATE QUICKLY by completing Calls for Action VOTE. One of the easiest ways to positively impact your community is to simply participate by exercising your right to vote. Advocate by quickly completing Calls for Action from C.A.R. and N.A.R. ACT. Volunteer on a campaign for a candidate that is a REALTOR® champion. One hour of your time could make a big difference in a close election. INVEST. Contribute to the REALTOR® Action Fund. WRITE A LETTER to local elected officials encouraging them for making good decisions for the community, or take the time to submit a letter to the editor of the local newspaper. RUN FOR OFFICE. Seriously! We need more REALTOR® champions in elected positions. By doing our part to contribute to the community, we add people to our circle of influence and gain opportunities to build relationships and success. We also demonstrate what it means to be a good citizen to the next generation by leading by example. BAKERSFIELD REALTOR® MAGAZINE

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The Complexities of Procuring Cause What it is … and what it is not In the typical competing broker case, you have one agent who has in some way helped the buyer identify the property and another agent who helped them write the contract or assisted the buyer in performing the contract once written. Choosing between competing brokers requires a close examination of the entire course of events, from the time the buyer first learned of the property, until they closed the transaction. Showing and writing remain important events that have to be considered in determining procuring cause. The standard of proof on which an arbitration hearing decision is based shall be a “preponderance of the evidence.” That is, the evidence presented which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the facts sought to be proved are more probable than not. It is not hard to see that determining between competing agents whose actions lead to a sale can be very difficult. That difficulty creates uncertainty when competing broker situations arise. It is for that reason that experienced agents are watchful of potential procuring cause situations and either avoid them (No, I can’t write this contract for you) or consult with another agent (Let me contact the other agent before we write this contract) in the hopes of avoiding a potential procuring cause dispute. Additional information is available through California Association of REALTORS® legal services. The publication “Procuring Cause Guidelines” discusses the burden of proof, factors chart, and preventative tips for practitioners. Legal assistance is available at C.A.R.’s Member Legal Hotline at (213)739-8282 and (213)739-8350.

contribution by

JOE NEWTON

“Procuring cause” is a concept that, in a real estate transaction, can determine which agent, who may have interacted with a home buyer, is entitled to the buyer’s agent share of the commission. Procuring cause is defined by the National Association of REALTORS® as “the uninterrupted series of casual events which results in the successful transaction.” All REALTORS® agree that any disputes regarding which agent is entitled to a commission, be arbitrated. Recently enacted by the Bakersfield Association of REALTORS®, is mandatory mediation prior to an arbitration hearing between two members of the Association. Procuring cause, like many things, starts out with good intentions. In this process, agents work with prospects for various periods of time, to help a buyer find the right property, only to have the buyer obtain a second agent to write up the deal and claim the commission. It had its roots in a time when there were no buyer’s agents; all agents worked for the seller. Today It continues to be not well understood, which always leads to a conflict between two agents attempting to serve the same buyer.

JOE NEWTON | Ombudsman to a particular transaction. Those facts can be very complicated and will lead to many questions surrounding the transaction. Procuring cause then may be defined as a series of events, unbroken in their continuity, that result in the desired objective (i.e. generally, the sale of property). Black’s Law Dictionary, 5th edition, defines procuring cause as “the proximate cause; the cause originating a series of events which, without break in their continuity, result in the accomplishment of the prime object. The inducing cause; the direct or proximate cause.” In other words, a broker is regarded as the “procuring cause” of a sale, so is to be entitled to commission if his or her efforts are the foundation on which negotiations resulting in a sale began. It is the cause originating a series of events which, without break in their continuity, result in the accomplishment of the prime objective of the employment of the broker who produces a ready, willing, and able purchaser to buy real estate on the owner’s terms.

BASIS FOR AWARDS IN ARBITRATION: There can be no predetermined rule or standard that determines entitlement to an arbitration award. This means there is no “threshold” rule where whoever shows the property first earns the commission. There is also no “contract in hand” rule which says whoever writes the contract gets the commission. Instead, all rewards must be based on the facts and circumstances related

OMBUDSMAN REPORT JANUARY – MARCH 2018 n

258 Calls were received by our Ombudsman

n 3 Grievance/ethics packages were mailed to complaining parties regarding cases that could not be resolved

55 Calls were grievance/ethics complaints against agents that were resolved

n 0 Arbritraiion packages were mailed to complaining parties regarding cases that could not be resolved

n 3 Calls were arbitration complaints against agents, which were resolved

n 93 Calls requesting information on real estate procedures

0 Violations of public trust cases reported

70 Calls requesting information on deposits

Anonymous call

n 1 Call with complaint against a non-association member n

25 Cases referred to Association mediation

3 Kern River Lake Isabella calls

5 Tehachapi calls

258 Year-to-date total BAKERSFIELD REALTOR® MAGAZINE

Excitement abounds over the announcement of $37,000 in student scholarships that were given to the Ford-Dream Builder student leaders.

Cultivating Leaders

Jim Burke Education Foundation: Moving Forward Kern County’s Youth

who has been cultivating leaders within our n 1971 the Bakersfield Association of community for many years; and at the heart REALTORS® created a scholarship of that prestigious organization, is Mrs. trust fund to provide scholarships to the Mikie Hay, Director of Jim Burke Education youth of Kern County who have chosen Foundation. to pursue a path of higher education after How it all began … graduation from high school. Because we are passionate about professional and educational excellence, Ford Dimension we are inspired by other In 1974, the First Ford organizations within our Dimension Class, comprised of community who share that four West High School debate passion for the youth of our students, rolled-out a campaign community. It is an honor to educate business leaders about and privilege to recognize one the buying power of youth. The Mikie Hay such exemplary organization history begins.

BAKERSFIELD REALTOR® MAGAZINE

By 1994, more than 200 high school students had graduated from this exceptional program and whose leadership principles and experience would forever guide them along their life’s journey.

The Birth of the Jim Burke Foundation

In December of 1994, Ford Dimension Alumni from across the country gathered to honor Jim Burke and thank him for the contributions he had made to better the educational experiences of young people through the Ford Dimension program. As a tribute to him, they announced the founding

Caleb Garcia and Bryce Jackson, representing their team project “Hidden in Plain Sight” that won the Best in Class Award, presented Cynthia Giumarra a check for $500 to benefit the Kern Coalition Against Human Trafficking.

of the Jim Burke Education Foundation. The Foundation’s purpose is to continue the spirit of Jim Burke’s generosity by contributing to the educational support of others. In 2003, Ford Dimension Alumni along with the Jim Burke Education Foundation created the Dream Builders leadership program for achieving high school seniors. This year-long program focuses on civic responsibility, life skills, and leadership development through the creation of significant community service projects. Each winter, the Jim Burke Education Foundation accepts 32 high achieving, high school juniors to participate in the Ford Dimension and Dream Builders program. Together, these 32 students become the foundation’s Student Board Members and participate in their leadership programs. Only 22 high school seniors are accepted to participate in Dream Builders each year. Students selected to participate have demonstrated leadership, community involvement, and academic success. The Ford Dimension students work in conjunction with the Dream Builders to create significant community projects with an emphasis on “service over self”

Scholarship winners Michael Del Mundo, Caleb Garcia, Bailey Sweaney, Molly Soper, and Jada Ochoa received $1,000 for their commitment to “service over self.”

The distinction between the 10 Ford Dimension and 22 Dream Builders is very subtle. Due to its long, rich 43 years of history, we did not drop the name or special events of the Ford Dimension. A few years ago our student leaders began calling themselves “Ford-Dream Builders” since they work as a team on their community projects and attend all Monday night leadership meetings together. They are all our “Ford Family.” – Mikie Hay

and civic responsibility, while learning valuable business and life skills. Students attend monthly meetings together with a focus on leadership development, character, communication and career building skills. Since its inception, Dream Builder student leaders have developed 57 civic projects, focusing on issues such as skin cancer (Block On!); Diabetes (Undo Type 2); water conservations (Water Warriors); organ and tissue donation (Got the Dot?); veterans (Memories in Flight and OPERATION: Thank You!); cyberbullying (You’re worth More); kindness curriculum (Kind is the New Cool); education (The Need to Read); healthy lifestyles (Get Fit – Children’s cookbook), and many more. The foundation believes the cooperative efforts of business, educators, students, parents and people like you make a difference in the quality of education for our local students. Congratulations to the 2017-2018 Dream Builder Teams whose hard work and accomplishments were celebrated this month at their Annual Awards Night, showcasing the four community projects they presented. View this year’s award-winning projects at jimburkeeducationfoundation.org.

Vision Statement: The Legacy Continues It is the vision of the Jim Burke Foundation to help the youth of Kern County excel through the creation of a leadership program for high school seniors that promotes civic responsibility, youth mentoring and career building skills. BAKERSFIELD REALTOR® MAGAZINE

Standing Ready for Our Community

The History of the Bakersfield Fire Department contribution by

TYLER B. HARTLEY DEPUTY FIRE CHIEF

he Bakersfield Fire Department (BFD/the Department) was formally established 140 years ago on May 13, 1877 as the official Fire Department of the then unincorporated City of Bakersfield. The Department has been in continual operation since that inception date, and has been in operation longer than any other Fire Department in Kern County. After suffering several disastrous conflagrations in 1898, 1890 and 1904, local leaders decided they would never allow the community to be devastated by another massive fire again. From that point forward, the BFD began its rise as a progressive and respected west coast Fire Department. In the early 1900s, the Bakersfield Fire Department served the community with a fleet of “Steamer” Fire Engines, Hook and Ladder Trucks, Chemical Fire Engines, and Hose Wagons. These early firefighting

machines were faithfully pulled by at least twenty-five noble BFD Fire Horses with names like Prince, Ned, King and Mike. The last BFD Fire Horse made its final alarm run and was sent out to pasture in 1914, the year the Department was completely motorized. In the 1920s and 1930s, the Department grew to four Fire Stations and fifty-three Firefighters serving a commercial core and residential perimeter. The firefighting fleet

consisted of many state-of-the-art apparatus, including early motorized Fire Engines that pumped thousands of gallons of water through massive deck guns. City Firefighters protected the young but urbanized Bakersfield, stopping major commercial blazes in the downtown area through sheer will and a barrage of water from brass nozzles. BFD Firefighters routinely found themselves in harm’s way due

Photo Source – BFD Facebook Page BAKERSFIELD REALTOR® MAGAZINE

to exposure to clouds of noxious smoke and collapses of un-reinforced masonry structures that were prevalent in the central district. Progressive Chief Fire Officers began to rise through the ranks and implement improvements to fire suppression and fire alarm systems that would set the standard for future fire protection in the City of Bakersfield. In 1956, the Bakersfield Fire Department was awarded the Insurance

Services Office (ISO) rating in the United States – and a “Class 1 Fire Department” designation. Over the next several decades, the Department continued to progress with the growing community, celebrating its 100th birthday in 1977. Today, the Bakersfield Fire Department is a multidimensional public safety organization, which responds to over 41,000 calls for service annually, and includes an “all-risk” approach in its emergency service delivery system. The BFD provides fire suppression, emergency medical services, vehicle and technical rescue, hazardous materials mitigation, water rescue, and other life safety services aroundthe-clock to a growing community of over 380,000 citizens.

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With 240 sworn-in, support and reserve personnel operating from fourteen Fire Stations located throughout the City, the Bakersfield Fire Department is ready to meet challenges within the community, region and state. As an ISO rated Class 2 Fire Department, the BFD resides in the top 1.5% of Fire Departments nationwide, and is the highest rated firefighting agency in Kern County. The men and women of the BFD are proud and honored to be part of a tradition of City Fire service that began over 140 years ago, and look forward to carrying out their mission in this century as “Bakersfield’s Firefighters.”

2018 BAKERSFIELD ASSOCIATION OF REALTORS®

TASK FORCE/COMMITTEES

Get Involved…Together we can make a difference in our Community. Join any one of our committees; or, if you don’t have much time on your hands, we’ve set up many task forces just for you. Take part today and find a committee that’s a perfect fit for you. You can download the application at files.bakersfieldrealtor.org/images/JoinCommittee.pdf

Call 635-2315 now!

ON FACEBOOK

www.facebook.com/bakersfieldrealtorsypn

They’re a group of young energetic professionals who keep busy all year long. Here’s just a few of the events they have planned. Be sure to save the dates: 27th: Legislative Day Orientation 12th: YPN Softball Tournament n June 7th: Lunch and Learn — IREM n July 5th: Lunch and Learn — Tejon Ranch n August: Giving Month — Bowling Tournament at the Boulevard n September 6th: Lunch and Learn — Private Tour of Apple Store n October 4th: Lunch and Learn — Top Producer Panel n November 1st: Lunch and Learn — Goal Setting n December: YPN Christmas Party n April n May

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SUCCESS

through Targeted Keywords PAUL SALLEY | REALTRENDS, DIRECTOR OF BUSINESS DEVELOPMENT

he framework for understanding your visibility on both paid and unpaid search results depends on keywords that have been incorporated into your website and Google AdWords campaign structures. Keywords that are used should go hand-in-hand with what is heavily searched in your area concerning real estate and homes for sale. In addition to specific keywords, take into consideration primary keyword phrases, such as “homes for sale in Denver.” How do you know which keywords to incorporate into your website and blog copy? Here is how to get started: 1. Identify which keywords people are searching for in your area. There are multiple resources to help you accomplish

BAKERSFIELD REALTOR® MAGAZINE

this. The leading authority for identifying the most searched and used keywords is Google’s Keyword Planner: https://www. realtrends.com/digital-marketing/seo/ 2. Incorporate them. Once you have obtained the keywords and phrases you would like to use, incorporate them into your website structure, content and marketing campaigns. Remember to also incorporate these keywords into content that changes such as blog posts and social articles. 3. Keep tabs on keyword trends and changes. Neighborhoods within your area of business can increase and decrease in popularity, thus increase and decrease in the number of organic searches. Keep a pulse on events and new or popular restaurants that occur within the neighborhoods,

subdivisions and towns within your brokerage’s borders. A keyword strategy and content strategy go hand-in-hand. Focus on local content and being a local resource to give both potential and regular visitors to your site a reason to continue to come back. Establishing your real estate website as a local resource and authority of a particular geographic region is what will ultimately drive the most leads and traffic to your site. Being a local expert and resource is something with which the national listing portals and other sources trying to obtain your same leads cannot compete. Recognizing and implementing keywords is a small but critical step that forms the foundation of a successful web presence, both paid and organic. This article reprinted with the permission of Real Trends Inc. Copyright 2018

THE A TEAM (AFFILIATES IN ACTION) PARTNERSHIPS Becoming an Affiliate Member of the Bakersfield Association of REALTORS® gives you the chance to network with REALTORS®. The relationships you create gives you the opportunity to expand your network and assist you in business development. The Association has many activities and events in which Affiliate Members have the opportunity to participate. Collectively, we also have a special group of individuals who form a group of loyal, hard-working Affiliate Members called the A Team, who serve the Association in a variety of ways. To achieve the A Team status, the Affiliates must meet certain criteria that has been established. If you’d like to be part of this special group of Affiliate Members, the A Team, contact Jeff Aguilera, Affiliate Chair, or Marrisa Williams, staff liaison at 635-2300.

JEFF AGUILERA, CHAIR Cornerstone Mortgage 661.578.9259 jeff@csmbakersfield.com www.cornerstonemortgage.com

DEANA WITWER, VICE-CHAIR Built Right Home Inspection 661.377.7777 Deana@builtrighthi.com www.builtrighthi.com

DAN ARDIS San Joaquin Valley Mortgage 661.342.9381 danardis@sjvalleymortgage.com

SUZI BEATY Fidelity National Home Warranty 661.477.3906 suzi.beaty@fnf.com

MIKE GEORGE Agape Mortgage 661.324.2427 mikegeorge@agapemtgco.com www.agapemtgco.com

SHARI GEORGE Agape Mortgage 661.324.2427 sharigeorge@agapemtgco.com www.agapemtgco.com

LISA HOOK-ESTES The Mortgage House – Stockdale 661-301-5472 Lhook-estes@themortgagehouse

CHEREYL NUNN Loan Depot 661.270.8601 cnunn@loandepot.com www.loandepot.com

JANETTE RAMSEY Janette Ramsey Insurance 661.328.9250 janette@jramseyinsurance.com

BARBARA WELLS San Joaquin Valley Mortgage 661.703.2227 bwells@sjvalleymortgage.com BAKERSFIELD REALTOR® MAGAZINE

Closer to Alternative

Credit Scoring Decision

Should models other than FICO be used by the Enterprises to make mortgage purchasing decisions? SUE JOHNSON | REALTRENDS, STRATEGIC ALLIANCE CONSULTANT

n a move that could trigger a final decision this year on the use of alternative credit scoring models by Fannie Mae and Freddie Mac, the Federal Housing Finance Agency (FHFA) requested public input in December on whether models other than FICO should be used by the Enterprises to make mortgage purchasing decisions. The topic of whether Fannie Mae and Freddie Mac should adopt alternative credit scoring models has been debated for years. Bipartisan bills requiring them to consider models other than FICO have been introduced in both the House and Senate for two consecutive years. In 2017,

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the Consumer Financial Protection Bureau (CFPB) requested public input on the advisability of using alternative data in credit scoring as part of a broader inquiry into ways to expand access to credit for consumers. But unless legislation is passed, the decision over the use of alternative credit scoring models lies with the FHFA, which supervises the Enterprises. Here is an overview of the issues at stake and the FHFA’s Request for Input.

The Issues

Fannie Mae and Freddie Mac now rely on Classic FICO credit scoring models, which consider traditional information such payment history, debt burden, and length of credit history.

Newer models that look at a broader range of data (such as mobile phone, utility and rental payments) are available in the marketplace but are not allowed by the Enterprises. One prominent example of such a competitor is VantageScore, a joint venture of the three major credit bureaus (Equifax, Experian and TransUnion). Advocates of alternative credit scoring models argue that if sources of alternative data were used, a large number of consumers that are credit-invisible—meaning they have no credit history with a nationwide consumer reporting agency—would get access to mortgage credit or lower borrowing costs. A 2017 CFPB study found that 26 million consumers are credit-invisible and that another 19 million consumers have a credit

history that has gone stale or is insufficient to produce a credit score under current models. A 2015 VantageScore study estimated that the use of alternative models could give roughly 72,000 more households access to credit each year, 16 percent of these being Hispanic and African-American households. Skeptics believe that the issue is not so simple. Some point to the fact that the credit bureau owners of VantageScore control the supply of information now used by FICO and could gain an unfair advantage that could diminish long-term competition, although the credit bureaus could be required to sell their holdings in VantageScore. Some believe that the use of alternative data could be prone to more errors because of weaker standards in its collection, or could create privacy issues if consumers do not know that it is being collected or shared.

The FHFA Request for Input

The FHFA already required the Enterprises to assess the potential impact of allowing the use of alternative credit scoring

models such as FICO 9 and VantageScore in its 2015-2017 Scorecards, which outlined conservatorship priorities for the Enterprises. Its 2017 Scorecard concluded that empirical evidence shows only marginal benefits to requiring a different credit score than Classic FICO since their automated underwriting systems incorporate additional information provided by the borrower and third parties during the mortgage application process. The Request for Input is intended to gather further feedback from all interested parties impacted by a possible change. Specifically, the FHFA is evaluating four credit score model options: Option 1: Single Score. The Enterprises would require delivery of a single score, either FICO 9 or VantageScore, if available, on every loan. Option 2: Require Both. The Enterprises would require delivery of both scores, FICO 9 and VantageScore, if available, on every loan. Option 3: Lender Choice on Which Score to Deliver with Constraints. The

Enterprises would allow lenders to deliver loans with either FICO 9 or VantageScore, when available. Lenders would have to choose one score or the other for a defined period of time. Option 4: Waterfall. The Enterprises would allow delivery of multiple scores through a waterfall approach that would establish a primary credit score and secondary credit score. Where a borrower did not have a credit score under the primary credit score, a lender would have the option to provide the secondary credit score. FHFA Director Mel Watts said in a December speech that any credit scoring change would not take effect until 2019, although a decision could be announced in 2018. “The more we looked into this issue, the more complicated it became, and it is turning out to be among the most complicated decisions I have faced during my tenure at FHFA,” he told another audience. Now, it looks like a decision may finally come this year This article reprinted with the permission of Real Trends Inc. Copyright 2018

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B A K ER S F I E L D ASSOC I ATI ON O F RE A LTO RS ®

OUR MEMBERS SETTING THE STANDARD … Connecting, learning, giving back, and making a powerful and positive difference every day to help grow a stronger community

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One Broker’s Experience

Bitcoin and Cryptocurrencies TRACY C. VELT | REALTRENDS, PUBLISHER

Real estate professionals in several resort locations have already closed transactions with buyers using bitcoin or other cryptocurrencies. Here’s what you need to know. Paul Benson, co-owner and licensed partner of Engel & Völkers in Park City, Utah, closed two successful bitcoin transactions, both over $2 million, in less than 45 days. “Most importantly, these transactions happened before bitcoin’s huge upswing,” says Benson, who notes that bitcoin is extremely volatile. Both investors came from Europe. “Because it’s not on the United State’s monitored currency systems, it doesn’t go through the same channels, so a savvy investor who gets appropriate legal and tax advice can see tax benefits.” Both transactions went “smoother than we thought,” says Benson. “We thought it would take four days to convert the bitcoin to U.S. currency, but we got the title company and attorney on board. The title company was able to initiate the request, convert to U.S. dollars and put the money in the seller’s bank account in only 18 hours.” Because Benson works with many investors, he’s seen a lot of interest in buyers

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using bitcoin and other cryptocurrencies. “Many investors are coming from Europe, the Mideast and China. Bitcoin is truly an international currency. We forget how many countries are feeling bad about their economies, so it appeals to that group. “This is one of the currency’s biggest draws for investors who want to avoid the volatility of euros, dollars, and yen, especially in today’s tense global climate. For this reason, real estate professionals can expect to see increased interest in bitcoin among their international clientele.” According to Bitcoin.com, the heaviest user demographic of bitcoin is European males between the ages of 25-34. “Bitcoin is still very much in its infancy, and not every buyer is ready to do business in the cryptocurrency. The U.S. market especially has been slower to adopt bitcoin for real estate, so brokers and agents must take that learning curve into account,” notes Benson. Benson says he’s learned two valuable lessons through the transactions. The first is that bitcoin values are volatile. The value of bitcoin fluctuates by the second so there is a gap between when the title company can get on the computer to sell it and have

it converted to U.S. dollars. “You have to get buyers and sellers to agree on that window of fluctuation,” he says. “We have it written into the contract that there will be a three-day window and during that time, if the value of bitcoin falls outside of the parameters outlined by both parties, they can walk away with no penalty,” he says. Second, he says you should have flexible partners who truly understand how a bitcoin transaction works. From real estate agent to title company, sellers must find fluid partners who are comfortable working with bitcoin. Because the currency is so new and its value changes every day, there are payment service providers who will convert bitcoins into dollars to mitigate the risk for wary buyers. Right now, we’re figuring out how to market it. We’re also exploring the legalities and how we can protect our brokerage from any untoward transactions. Always work with an attorney and tax professional to ensure your brokerage is doing it correctly. Notes Benson, “The buyer of the future is open to creative ideas. I think it’s important to get onboard even if it’s not that comfortable.” This article reprinted with the permission of Real Trends Inc. Copyright 2018

The Misuse of Grow or Die

A recipe for long-term corporate success or proverbial burnout

PATRICK LENCIONI | REALTRENDS

e’ve all heard leaders refer to the adage grow or die in their attempt to motivate employees. Most people don’t dispute it and push harder to increase sales or revenue or customers. Well, I think it’s time to dispute the wisdom of this axiom, or better yet, to clarify it. Good growth is about improvement and development. Sometimes that growth leads to increasing size and scale. Sometimes it doesn’t. When leaders mistakenly insist that size and scale are necessary for growth, they often jeopardize the success of their organizations. And it happens all the time. Now, there are some organizations that feel an understandable pressure to continue

growing. These are public companies who must keep their stock prices high to fund their operations or fend off the threat of a hostile takeover. For the vast majority of other companies, the compulsion to grow is a result of groupthink and pride. It is not; however, a good predictor of long-term success. Boredom may be another driver of the misapplication of grow or die. When executives successfully lead their organization to a record year in revenue, they are faced with the prospect of what’s next? The easy answer is “more of the same.” While that may sometimes be the right answer; in many cases, it is not. Having a great year might actually be an opportunity to slow down and invest

in infrastructure or product development or culture. While those options are not mutually exclusive to growth in size or scale, they are not necessarily correlated. The fact is, the best companies, like the best athletes and performers in other disciplines, often need to slow down after a big push, to recover and reflect and restore. Forcing themselves to keep pushing without a compelling reason other than pride or boredom is a recipe for burnout, employee disillusionment and cultural implosion. Patrick Lencioni is founder of The Table Group and author of 11 books on leadership and organizational excellence. This article reprinted with the permission of Real Trends Inc. Copyright 2018

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Follow the Road Less Traveled Lasting client relationships = Lifetime Value

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LARRY KENDALL | REALTRENDS, AUTHOR OF NINJA SELLING & CHAIRMAN EMERITUS OF THE GROUP, INC.

t a recent Ninja Selling workshop, a woman came up to me and asked if I was concerned about all the so-called industry disruptors— Zillow Leads, Instant Offers, Open Door, Redfin, Purple Bricks, etc. She was obviously distraught and said, “We won’t even have a chance to compete for the business. They will have the business before we ever get in the game!” As she continued her rant, she suddenly stopped and said, “You don’t seem too concerned! Why aren’t you concerned?” I replied that we have a different business strategy—a road traveled by only 6 percent of our industry. The other 94 percent are trying to compete with or buy leads from the disruptors. Here’s what the industry looks like. The typical American household buys and sells a home every seven to nine years—let’s say eight years on average. The wheel above represents this eight-year cycle. Nearly our entire industry (94%) as well as the disruptors are focused on that last 12 months of the cycle (green section). Who’s moving? How do we capture them? How do we sell

(or buy) the leads? Lead generation, capture, and conversion is the name of the game here. At closing, the pattern starts over and the real estate professional runs back to the green section looking for leads and the next deal. According to the Zillow Consumer Housing Trends Report, only 6 percent of real estate professionals have a consistent (monthly) follow-up program with their customers after closing. An amazing 74 percent of buyers surveyed said they never heard from their real estate professional again after closing! Their real estate professional is back chasing the next lead in the final year of the eight-year cycle rather than building and maintaining a relationship. Here’s the Ninja Business Strategy, which is the road traveled by only 6 percent of the real estate professionals in our industry. The Ninja Business Strategy is built around three principles: 1. Relationship Activities. The closing is the START of the relationship not the end. Stay in flow with three touches a month that create value for the client. Maintain your relationship with them, and you will know well in advance when they are ready for a move—pre-empting the disruptors

who are swarming in the last 12 months of the home buying/selling cycle. 2. Referrals Mindset. According to Harris Interactive, Americans know at least four people who will move this year. The Ninja Mindset is, “How do I discover and earn those referrals?” Four referrals a year over the eight-year cycle is 32 transactions, plus the client’s purchase and sale in year eight, results in 34 potential transactions over this eight-year cycle. 3. Lifetime Value. Assuming your client moves four times in their lifetime (four 8-year cycles), there are 136 potential trans-actions available to you. The relationship with this client is solid gold. Do the math. Take 136 times your average commission. What if you have 100 of these clients? You are swimming in abundance! Why jump into the mosh pit with the disrupters and 94 percent of the real estate professionals who are chasing leads in the last 12 months of the process? Pre-empt them! Build a lucrative and fun relation-ship business by following the road less traveled. This article reprinted with the permission of Real Trends Inc. Copyright 2018

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SUCCESS

Welcome, New Members!

Your journey as a REALTOR® has just begun in making a positive impact in the lives of families in our community

new realtors ® february 2018

FEBRUARY 2018 Benjamin J. Atwood, Coldwell Banker Preferred, Ming; Heblin Balver, Real Estate eBroker Inc.; Calvin A. Cook,

Coldwell Banker Preferred, Ming; Arleigh Cortez, Keller Williams Realty; Jason M. Egbert, Keller Williams Realty; Aaron S. Fauke, Coldwell Banker Preferred–CO; Veronica Jimenez-Fietes, RE/MAX Golden Empire; Betty R. Flint, Miramar International,Riverwalk; Liana Frayne, Fenton Real Estate; Diana Galvan, Coldwell Banker Preferred–CO; Shandy L. Grantham, Intero Real Estate Services; Jeanie Kathryn Gray, Wyrick & Associates Real Estate; Stephanie House, Intero Real Estate Services; Hiromitsu Ishihara, Coldwell Banker Preferred, Ming; Laura Jimenez, Carroll Realty; Ezzat K. Khalil, Stratton Davis Realty; Roger N. Lampkin, Broker; Lorraine Luis, Robert Austin Smith. Broker; Valerie Marquez, The Producers Real Estate Team; Janie R. Marquez, eHomes of Bakersfield; Brandon R. Martinez, Miramar International-Mill Rock; Louis C. Martinez III, Keller Williams Realty; Joseph D. McLemore, Intero Real Estate Services; Julius G. Miano, Miramar International; Ronika Nand, Real Estate eBroker Inc.; Dillon Nunamaker, Watson Realty ERA; Irais Perez, Intero Real Estate Services; Adrian Perez, Stratton Davis Realty; Kayla S. Peterson, Keller Williams Realty; Willetta Reeves, Watson Realty ERA; Taylor D. Reyes, Coldwell Banker Preferred, Ming; Lizeth T. Salinas, Stratton Davis Realty; Justin D. Silva, Miramar International; Terry A. Thomas, Stratton Davis Realty; Tammy Trussell, eHomes of Bakersfield; Lindsay Turman, Wyrick & Associates Real Estate; Ben Bob Valdez Jr, Intero Real Estate Services; Paula D. Vargas, Team Tracey Tipton, Miramar International-Riverwalk; Hilda C. Vazquez, Solutions Realty, Inc.; Nicole Maxine Villalobos, Agentcor Realty; Terrie L. Watkins, Watson Realty ERA; Ellen Wattenbarger, Miramar International; Aaron Zavala, People Realty, Inc.

new realtors ® march 2018

MARCH 2018 Araceli Alaniz, Homes R Us Realty Inc.; Alli M. Cauzza, Soper Homes Realty; Kera N. Curtis, Keller Williams Realty; Sandra M. DeMita, Keller Williams Realty; Felix C. Diaz, Executive, REALTORS®; Jeanette Elston, Cimax Realty; Sasha K. Guinn, Marcom Real Estate; Manpreet K. Khurana, Keller Williams Realty; Maria L. Lopez, eHomes of Bakersfield; Cristina S. Martinez, Keller Williams Realty; Michael S. McCain, Stratton Davis Realty; Arlette Medina, Stratton Davis Realty; Lizzeth Menchaca, Open Door Real Estate; Joseph B. Mercado, Stratton Davis Realty; Elizabeth H. Olea, Fenton Real Estate; Jami Palmgren, Keller Williams Realty; Jose Miguel Perez, Platinum Real Estate, Inc; Jose L. Perez, Performance Realtors, Inc; Flavio A. Perez, Open Door Real Estate; Javier Pompa, Solutions Realty, Inc. ; Alfonso Quezada Jr, Intero Real Estate Services; Elena Quintana, Rueben Zamudio, Broker; Monique Rangel, RE/MAX Golden Empire; Luis H. Rodriguez, Keller Williams Realty; Wyatt C. Salinas, Stratton Davis Realty; Kelsey K. Scritchfield, McKinzie Nielsen Real Estate; Jaspal S. Suri, Miramar International Commercial; Christian Vera, Miramar International Downtown; Alisa Y. Wright, Sierra Central Real Estate; Gustavo Zannelli, Solutions Realty, Inc. BAKERSFIELD REALTOR MAGAZINE ®

Benchmarking Brokerage Spending How does your firm compare to your competitor’s firms?

SCOTT WRIGHT | REALTRENDS DIRECTOR OF MERGERS AND ACQUISITIONS

keep as well as any trans-action fees that may be charged. Below-the-line is operating expenses, what brokers spend to keep the doors open, the lights on, the staff paid and for getting their name out there.

ur highly sought-after REAL Trends Brokerage Benchmark report is an incredibly useful tool for our valuation clients. It not only gives AREAS OF PAIN them insight into how their firm compares Of course, brokers have some control over to regional peers using various performance above-the-line performance, but as they metrics (retained company dollar, return will all tell you, this is an area of pain that on revenue, etc.) and agent productivity they’ve been losing their grip on over the benchmarks, but it also offers a snapshot of years. Many broker/owners remember the how they scrub up with several key expense days when 30 percent+ ratios. retained company dollar Brokerage financial was the norm, a stark performance can be contrast from a national broken out into two average that is now well areas of focus, above-theunder 20 percent. In line and below-the-line. Retained Company today’s hyper-competitive Above-the-line focuses on Dollar (National Average) environment brokers only Gross Margin, or Retained have so much control above Company Dollar. Simply the line, so below-the-line management of put, Retained Company Dollar is what’s operating expenses is key to driving profits. left after brokers pay their agents. It’s the As part of our Benchmark, we look at portion of every dollar of commission they

Less Than

20%

three crucial areas of spend: Salaries & Payroll, Occupancy and Advertising & Marketing. To quantify comparably, we look at these expenses as a percentage of Gross Margin, and the three combine for over half of all operating expenses.

SALARIES & PAYROLL

Salaries and payroll-related costs are by far the largest expense for real estate brokerage companies. In fact, the three-year average shows brokers spending nearly one-third of Gross Margin on the management and support of their companies’ operations. Executives, office managers and support staff like admins and transaction coordinators play an integral role in the success of a broker’s primary asset, the agent. Though this expense bucket is a big one, it’s been trending down over the years. 2012 was the first year we started compiling this benchmark data, which interestingly was BENCHMARK, Continued on page 26

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BENCHMARK, CONTINUED FROM PAGE 25

also the first year average U.S. home prices rose coming out of the Great Recession. Since then, spend for Salaries & Payroll has declined by 20 percent on average. There are many reasons for this decline, but the biggest is the response to decreasing retained company dollar. As mentioned, brokers need to work below the line to manage their profits, and naturally, this large expense is a prime target for reduction.

OCCUPANCY

Occupancy-related expenses, of which the lion’s share is rent, comprises about one-fifth of a broker’s operating expenses. With this age of technology making it easier to telecommute, you’d think this would be an expense that brokers would aggressively target for reduction. Interestingly though, occupancy expenses have only decreased by about 11 percent since 2012. Many brokers are trying to reduce this expense, but what this slower-than-expected decline shows is that brick and mortar is

running under these brand names spend practically nothing on advertising and marketing given the name recognition and a little bit of advertising at the national level. Keller Williams has seen so much growth over the last five years that it alone has ADVERTISING & MARKETING skewed the data. Interestingly, if we remove Advertising & Marketing expenses aren’t Keller from the Benchmark, the national that large relative to the other two categories. average for advertising & marketing spend Though on average, this spend is just under is just over 8 percent and the 5 percent of Gross Margin, five-year decline is not nearly it’s an important one that as severe. brokers carefully monitor. Advertising The bottom line is that, Like the other two, this & Marketing given the tightening margins bucket has also seen a above the line, brokers decline since 2012, but must focus below the line this decline has been much in their efforts to maximize larger, to the tune of nearly of Gross Margin profitability. With expenses 50 percent. (on Average) on the salaries & payroll, This decline is a headoccupancy and advertising & scratcher to many brokers. marketing fronts declining, according to How do you get away with only spending 5 our latest Benchmark update, brokers are percent of Gross Margin in this important successfully adapting. area? It makes more sense when you take still important to most agents. Even the telecommuters like to have a place to drop by whether it be for making photocopies or using a conference room.

Less Than

into consideration the effects of Keller Williams and RE/MAX. Brokerages

Hit Your Target Market!

You can’t miss by advertising with the Bakersfield Association of REALTORS®

Start marketing and promoting your company today with the Bakersfield Association of REALTORS®.

The Association has over 1,700 REALTOR® and Affiliate members. We offer many ways for you to actively communicate your company’s brand and marketing message directly to our members. Every week we host a variety of activities, classes, and events. Reach your target market in effective and affordable ways. Consider one of our many opportunities.

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FOR ADVERTISING INFORMATION OR AD SIZES, PLEASE CONTACT: Carol Duran at 635-2307 Communications Design and Development

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What You Need to Know

about the Facebook Dynamic Ads PAUL SALLEY | REALTRENDS DIRECTOR OF BUSINESS ACQUISITIONS & TECHNOLOGY CONSULTING

Almost a year ago, Facebook released its Dynamic Ads for Real Estate, offered to the audience of digital marketers inside the industry. This powerful marketing tool is similar in capabilities to Google’s Dynamic Remarketing; however, rather than remarketing similar and related properties on the internet via various display networks, it leverages audiences on the native Facebook platform and Instagram.

Dynamic Ads Show revelant ads to the right people at the right time

SET UP CATALOG

BUILD AUDIENCE

CREATE AND DELIVER ADS FOR YOUR LISTINGS

Home listing feed

How it Works When users visit a particular listing on your website and later visits Facebook or Instagram, they are shown similar listings. The listings that are shown post-website-visit are selected by the brokerage firm and will match the types of properties the user was initially viewing. To use this powerful automation tool, your firm should have at least 100 active listings at any given time on its website. Then, the brokerage must implement an integration that transmits listing data to

Signals From a website

From an APP

Facebook’s ad platform. Once setup is complete, users will be shown properties on Facebook in a slideshow format. Marketers can track the performance of these ads via comprehensive performance analytics on Facebook’s Ad Manager dashboard.

Cumbersome Setup The initial setup process for Facebook Dynamic Ads can be cumbersome, especially connecting the listing and search feeds to Facebook. However, the automation components and effectiveness of the ads that display relevant properties branded to your brokerage produce a steep ROI. Another aspect that should not be overlooked is the reporting transparency and live metrics relating to ad performance. A brokerage interested in implementing this powerful tool to increase dramatically its digital footprint should plan on investing at least $1,000 a month to see action-able results. Of course, this budget can be increased or decreased depending on the number of leads coming in. Facebook, not unlike Google, is a pay-to-play platform, meaning that the more ad dollars you spend; the more impressions and visibility your ads will have. This article reprinted with the permission of Real Trends Inc. Copyright 2018

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Global Workplaces of the Future How will the workplaces of the future impact the real estate industry?

PETER GILMOUR | REALTRENDS, FOREIGN CORRESPONDENT

ver the next decade, workplaces are likely to change from drab, formal, functional designs to those geared to the needs of the employees containing a diverse mix of spaces, furniture, décor and services. There will be a strong move to flexibility in the workplace design and co-working platforms with a range of memberships to suit the needs of growing businesses, says Ron Friedman, organizational psychologist and author of “The Best Places to Work.” In researching his book, he analyzed thousands of academic studies to understand conditions that help people work more effectively. The recent update to the REAL Trends Brokerage Benchmark report shows that, on average, the retained company dollar that brokers are keeping is dropping. Being tied to long leases for space that you may outgrow or that may be too large, has always been a problem and comprises a major expense to real estate offices.

Co-Working Spaces Co-working community spaces are mushrooming all over the world and

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Co-working community spaces are mushrooming all over the world and combine flexibility with creative eco-friendly elements combine flexibility with creative eco-friendly elements such as green roofs to reduce energy use, solar power and windows that allow views and exposure to sunlight—all make for happier workers. One element that is constant in all countries is speed and consistency of internet supply as this is the driver of most businesses. In Australia, one such co-working space, called The Hub, has locations in Sydney, Melbourne and Adelaide, and offers common facilities such as high-speed fiber optics, excellent kitchens, jump-in phone booths, bookable meeting rooms and more. Spaces range from single desks to shared offices, to private offices and suites, and membership is flexible from month-tomonth arrangements to longer periods of occupation. In Cape Town, South Africa, The Bureaux has been in existence for five years with

multiple locations and offers a range of modern spaces with strong networking between tenants. Most locations are close to residential areas, provide convenience and promote work-life balance.

Spaces Close to Home In the United States, many co-working operations are small with less than 20 locations. The industry is led by Regus with locations in over 475 cities in the U.S. and globally. We Work has spaces in 19 cities as well as internationally, and there are others such as Proximity Space in Colorado, The Yard in New York City, Boston, Philadelphia and Washington D.C., and NextSpace with locations in California and Chicago. In some countries, real estate agents and teams are choosing these spaces rather than go to the home office as the added networking benefits assist them in controlling their costs and meeting the needs of their team members. Millennials and younger entrepreneurs are driving change in all industries and promoting the co-working concept in the workplaces of the future around the world. This article reprinted with the permission of Real Trends Inc. Copyright 2018

Blockchain Technology…

All the data is encrypted and can’t be changed or altered TRACEY C. VELT | REALTRENDS, PUBLISHER

Two industry vendors capitalize on Blockchain technology. Is it the next big trend? Before one understands how companies are using the blockchain, one has to understand what it is. Originally developed as a secure way to trade Bitcoin and other cryptocurrencies, the blockchain, according to Wikipedia, is a growing list of records, called blocks, which are linked and secured using cryptography. Each block typically contains a timestamp and transaction data. By design, blockchains are inherently resistant to modification of the data.

Why is it Important? What does that mean to you? According to Joel Leslie, a partner at Propify, a blockchain-based real estate marketing solution, “Brokers play an important role in the property process, specifically to the buyer. What the blockchain will do is provide visibility and transparency to the process. Real estate professionals and brokers will be able to find out exactly what is happening to a property at any given point in time. The blockchain can vouch for the trust of the data.” Propify promotes property content via a non-portal model. The platform provides transparency across the entire property

listing process, facilitating the safe and secure marketing of real estate and the secure communication between the consumer, agent and peers.

Data Quality The key is that blockchain is a protocolfirst technology, meaning that all the data is encrypted and can’t be changed or altered. So, once it’s in the blockchain (good or bad), it’s quality information. “The way our system works is that we have two blockchains working in tandem—one for the broker and one for the property asset. We match those together throughout the system, and it outputs data in the most accurate form possible. It’s 100 percent qualified, and anyone can look at the data and each block (which represents a property’s change) and see where the information came from,” says Leslie. Another product, ShelterZoom is also using blockchain technology to ensure the quality of its data. Built to be Real Estate Standards Organization (RESO) data dictionary-compliant, ShelterZoom refines and streamlines the process of making real estate offers, thereby reducing paperwork and bringing greater openness to what has traditionally been a fragmented and opaque process. The complete ShelterZoom Online Offer and Acceptance platform includes a

dashboard, the Offer NOW widget and a mobile app (available on iTunes and Google Play) that enables buyers and buyer agents to instantly submit offers from online real estate listings with just a few clicks or screen taps. According to Sergey Fradkov, ShelterZoom technical advisor and General Partner of Startup Accelerator iDealMachine, “We’ll see rapid adoption of blockchain technology by marketplaces, organizations and entire industries. Blockchain and related cryptocurrency implementations will enable new business models and streamline interactions between participants. They will also enable new participants to quickly establish themselves in the industry segments and create many new business opportunities.” Time will tell if this technology will bring about a slew of new disrupters and innovative marketing companies, but it will, no doubt, impact everything from title search and appraisal to digital marketing and the mortgage qualification process. Want more? Check out the REAL Trends podcast on the subject where Tracey Velt interviews ShelterZoom founders Chao Cheng-Sorland and Amir Allen Alishahi: www.itunes.apple.com/us/podcast. This article reprinted with the permission of Real Trends Inc. Copyright 2018 BAKERSFIELD REALTOR® MAGAZINE

state of the

HOUSINGMARKET

JANUARY 2018

2017 Compared to 2018 by MLS Area

FEBRUARY 2018

All Areas

Bakersfield

* Figures from Single Family Homes Only. Statistics were run on March 19, 2018

QUARTERLY COMPARISONS

BAKERSFIELD REALTORÂ® MAGAZINE

Bakersfield uses the following Zip Codes: 93301, 93302, 93303, 93304, 93305, 93306, 93307, 93308, 93309, 93310, 93311, 93312, 93313, 93314.

2018 YEAR-TO-DATE STATS

*Figures from Single Family Homes Only. Statistics were run on April 2, 2018

Will Tech Kill the Industry? If you turn down the tech noise, what do you hear?

STEVE MURRAY | REALTRENDS PRESIDENT

I had a conversation with a young woman who has a senior level position in our industry and almost 12 years of experience in our business. I asked her what she thought about the screaming voices about how technology will kill the industry in some fashion or another. She had an interesting view. She said, “I don’t think there is a lot of unhappiness with real estate agents or teams. Certainly, they are not all perfect, but most consumers we have worked with or encountered are fairly well satisfied with their agent’s service. Communications could improve, but, overall, consumers seem pleased.” She went on to say that what consumers aren’t pleased with is the process—the mortgage, closing costs and fees, title insurance, inspections, etc. She says, “Their dissatisfaction is far more focused on the complexity, time it takes, and the number of different parties involved to get a purchase or sale completed. Many young buyers and sellers, I think, are unhappy about that part of the process.

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I think the industry would be well served to use technology to get all the different platforms together into one seamless system that could lower the complexity, increase the access to transactional data and, in some ways, lower the cost of buying and selling homes.” I think she is on to something. Are we looking at the challenges correctly? Is it perhaps true that it is not the agent where the problem is but rather the multiplicity of service suppliers and the lack of any real integration of each of them that causes anxiety and dissatisfaction? We are launching a consumer study with The Harris Poll folks—with whom we have done six prior consumer studies—to find out. This article reprinted with the permission of Real Trends Inc. Copyright 2018

Operating a Profitable Business What’s an Average Advertising and Marketing Spend?

SCOTT WRIGHT | REALTRENDS DIRECTOR OF MERGERS AND ACQUISITIONS

perating a profitable real estate brokerage business is simple— spend less than what you’re bringing in! Of course, it’s the bringing in part that is the ultimate challenge. It’s a constant battle to recruit and retain talent. As the nation’s leader in valuations, mergers and acquisitions and consulting in the residential real estate industry, REAL Trends gets to see the inner workings of hundreds of brokerage companies each year. From small one-office firms to regional power players to firms struggling to stay afloat and those swimming in money—we see it all. The brokers who are profitable go about it many ways, but they all adhere to the principle of spending less than they’re bringing in. This practice is easier said than done, especially in an environment where retained company dollar continues to trend from the northwest to the southeast.

Below-the-line Spend Managing below-the-line operating expenses, or spend, is a challenge in every business. With less control above-the-line, controlling below-the-line spend is especially important for real estate brokerage firms. Brokers’ largest expenses are on salaries, payroll and occupancy, which for most is at least half the budget. Next up is usually

monies spent on advertising and marketing, and this is an area where we see wild variations. As a percentage of gross margin, we see brokers spend between 0 and 20 percent on advertising and marketing. On the low side are firms affiliated with Keller Williams and RE/MAX, with Keller brokers spending practically nothing in this department. According to our Benchmark Report, the national average for advertising and marketing spend is less than 5 percent of gross margin, but this is skewed to the downside by the aforementioned franchises. If we remove Keller Williams and RE/MAX, we see the national average just above 8 percent. As implied by the rule of averages, there are outliers well above and below par.

Brokerage Model Drives Marketing Spend In our observation, it’s the brokerage model that drives where they fall within the advertising and marketing spend spectrum. On the lower end are the 100 percent, flatfee and low-cap models. Agents working for firms that operate these models typically keep a bigger piece of the pie. As a trade-off, their brokers tend not to spend as much on advertising and marketing. With tighter margins, the broker can’t afford to spend a lot in this area if they hope to turn a profit. On the flip side are more traditional brokerage models running fixed splits or graduated commission plans. Some firms

employing these models pour a ton of money into advertising and marketing on print ads, television, radio and mass mailings. Some also invest heavily in online marketing and lead generation. Agents who work for firms like these greatly benefit from this spend and rely on it to support their businesses. As a trade-off, these agents accept lower splits. Lower splits lead to higher retained company dollar for the broker, which ultimately allows them to spend more on advertising and marketing.

Turning Profits We see brokers turn spectacular profits using variations of any of these models. Brokers must be careful as there’s an art to making sure advertising and marketing spend falls in line with the operating model. When we run our valuation clients through the benchmark, this can be an area where they may either lead or lag their peers, and this variance can be the differentiating factor in whether they achieve profitability or affect return on revenue. The bottom line is that advertising and marketing are major parts of brokerage’s overall spend. A wise man once told me, if your outflow exceeds your inflow, then your upkeep will be your downfall. Spending less than you’re bringing in is no easy feat, but those disciplined in doing so will live to see another day. This article reprinted with the permission of Real Trends Inc. Copyright 2018

BAKERSFIELD REALTOR® MAGAZINE

THE LAW OF THE

SKYSCRAPER contribution by

JON GORDON

When builders begin building a skyscraper they don’t start by building up. Instead they start by digging below the ground in order to create a foundation of stability. They have to go down deep and excavate soil, sand, clay, etc. to reach the bedrock so that they can build something that will reach incredible heights. Our lives, careers and teams work the same way. If we want to build up we have to first dig deep and develop our foundation. It’s not always easy to unearth the stuff below (the fears we have, the wounds we carry and the things that hold us back) but once we uncover them we can reach the core of our foundation and begin the building process to reach greater heights. Today I want to encourage you to do some digging. Think about what’s holding you and your team back. What needs to be unearthed and dealt with? I know it’s easier not to address or confront it but remember the law of the skyscraper. If you don’t dig you’ll never be able to build the foundation you need to create the life and team that you want. One of the ways I have built my foundation over the years is by choosing/ receiving One Word for the year that is meant to shape and mold me to be my best. Seven years ago my word was Purpose. Then it was Surrender, Serve, Pray, Rise, Forgive and Still. Looking back I realize that in choosing my word each year I was digging and building a foundation. My word for this year is Connected. I didn’t

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choose this word. It chose me. I wanted to pick “Grow” but “Connected” came to me on a walk New Year’s eve. I knew that I still had some digging and building to do and that involved being connected. Connected to God. Connected to my family when I’m on the road. Connected to people. We live at a time when we have more ways to connect but are often not connecting meaningfully. To dig and grow I want to connect meaningfully and create a life filled with meaning. I don’t know what kind of digging you have to do personally or professionally, individually or collectively but I hope you’ll consider building your foundation this year so we can grow to greater heights together. Identify what you stand for. Once you know what you stand for decisions are easy to make. Have a vision for the road ahead. If you have a vision you also have the power to make it happen. Know your why. When you know your why you will know the way and won’t let obstacles get in the way. Let go of what’s holding you back. Chose faith instead of fear. Pick a word and live it this year. We know that there’s a limit to how high skyscrapers can physically be built but there’s no limit to how high you can soar when you are willing to keep building your life, work and team. I wish you great growth this year, Jon JonGordon.com This article reprinted with the permission of Jon Gordon | Bestselling Author and Keynote Speaker

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