LUBBOCK REALTOR® July 12, 2013 Phone (806) 795-9533 Fax (806) 791-6529 5015 Knoxville Avenue, Lubbock Texas 79413-4039 2013 Board Officers Coby Crump, President Nancy Rawls, President Elect Rusty DeLoach, Treasurer Charles Kearney, Secretary Debora Perez-Ruiz, Chairman of the Board DIRECTORS Cynthia Arriaga, 2013—2014
JUNE MONTHLY MARKET COMPARISON Categories
June 2012
June 2013
Percent Change
Total Residential Property Sales
365
407
11.5%
Total Residential Dollar Volume
$57,557,518
$64,754,014
12.5%
Average Single-Family Sales Price
$157,692
$159,101
0.9%
Median Single-Family Sales Price
$127,500
$125,000
-2.0%
Jef Conn, 2013—2014
Total Active Residential Listings
1,670
1,109
-33.6%
Mary Ann Grafft, 2012—2013
Total Pending Residential Sales
242
308
27.3%
Frank Harmon, 2013—2014
Months Inventory*
6.6
3.6
-45.5%
Jacky Howard, 2013—2014
*Months inventory estimates the number of months it will take to deplete current active inventory based on the prior 12 months sales activity.
Tara Newton, 2012—2013
Year-to-Date Comparison
Gary Owen, 2012—2013 Jeff Sellers, 2012—2013
Jan-June 2012
Jan-June 2013
Percent Change
Total Residential Property Sales
1,687
2,089
23.8%
Dan Williams, 2013—2014
Total Residential Dollar Volume
$247,390,867
$319,404,106
29.1%
Jana Wuthrich, 2013—2014
Average Single-Family Sales Price
$146,645
$152,898
4.3%
EX OFFICIO DIRECTORS Cheryl Isaacs, 2011-2013 TAR
Median Single-Family Sales Price
$119,000
$123,350
3.7%
Susan Shakespeare, 2012—2013 Scott Toman, 2012—2013
Director John Walton, TAR Director Lifetime
Categories
Notice on this information: Multiple Listing Service data is reported to the Real Estate Center at Texas A & M and the National Association of REALTORS® on the eighth of each month. Year‐to‐date data may be corrected for information reported after the eighth. Neither the association nor its MLS guarantees or is in any way responsible for its accuracy. Data maintained by the association or its MLS may not reflect all activity in the real estate market.
June—Another Positive Month for the Lubbock Real Estate Market MLS sales continue to show positive indicators with Lubbock REALTORS® selling almost 12 percent more homes than in June of 2012, although sales were slightly down from May’s number of 427. The market also saw increases in the average sales price and the number of pending sales, indicating that the summer months will continue to show improvement. The good news continues for sellers as there are almost 34 percent fewer homes on the market than this time last year. Agents are seeing multiple offers on listings as the number continues to drop since the beginning of the year. Buyers are being driven into the market as we see an up-tick in interest rates and must act quickly as the months inventory has stayed below 4 for the fourth consecutive month. While the median sales price saw a slight decrease in June, it is up almost 4 percent for the year, and the same can be seen for the average sales price. A disproportionate appreciation in home prices could indicate a bubble, and Lubbock has been fortunate to not experience steep gains.
How to Use Financing to Attract More Buyers and Create More Sales 4 Hour MCE Course Date: Wed, August 7, 2013 Time: 9:00 p.m.—1:00 p.m. Cost: $10—cash or check for LAR members / $30 for non-members Registration: See the registration form in this newsletter Location: LAR Office Instructor: Jeff Elias Page 1
MEMBER NEWS About this course: Jeff Elias, nationally recognized financing guru, will show you: How to help buyers improve their credit scores and loan qualifications. How to overcome lenders’ more stringent underwriting guidelines now in force. How to get the buyer excellent terms while getting the seller full price. How the seller can advertise “cash” concessions in lieu of price reductions. How relatives can act as co-borrowers to help buyers qualify and provide down payments. How to use VA and FHA financing when the buyer’s credit score is too low for conventional loans. How real estate investors and real estate agents can shelter $25,000 yearly from federal taxes. How to get your clients and additional $50-500 per month in take-home pay, so they can budget a move-up or investment property. How to provide “annual reviews” to generate listings, move-up sales and investment sales and much, much more! Jeff Elias is the author of five books on real estate finance and taxes. His best seller, Jeff Elias’ Comprehensive Guide to Real Estate Finance, has sold over 250,000 copies nationwide. He also publishes a newsletter on real estate finance and real estate tax law called “Mortgage Note$.” He conducts over 100 programs each year and has completed over 3,100 seminars in the past 29 years in all 50 states, Puerto Rico and the U.S. Virgin Islands. He is an active real estate investor and currently owns over three million ($3,000,000) dollars worth of residential properties. No credit can be given to late arrivals. hollymcbroom@lubbockrealtors.com or fax to 791-6429.
Cook Out for United Way
Total Members 801 (↑ 6.3% YTD) 170 Companies │ 631 Salespersons REALTOR® Applications Companies Lindsey Valdez
My Elite Appraisals
Bobby Day
Day & Co.
Salespersons Brad McMinn
Brookshire Real Estate Company
Angela Zesiger
Exit Realty of Lubbock
Vanessa Baker
RE/MAX Lubbock
Karolyn Gass
The WestMark Companies
Jackie Pierce
Exit Realty of Lubbock
Spike Wideman
W Brokerage Group, Inc.
Greg Johnson
Lubbock Discount Realty
Evan Botsford
Day & Co.
Affiliate Members All Star Home Inspections
Edd Dillashaw, representative
Membership Cancellations Michelle Elliott
Exit Realty of Lubbock
Perry Williams
Perry L. Williams Real Estate
REALTORS® on the Move Ashley Mott
Tech Terrace Real Estate to Amy Tapp Realty
Johnny Armes
Real Living Greg Garrett, REALTORS® to Keller Williams Realty
Jacob Goertzen
Exit Realty to Texas Sky Realty
Date: Thurs, July 18 Location: LAR Office Time: 11:30 AM Cost: $5 The LAR’s United Way campaign is under way and since there is no July luncheon, Carpet Tech is cooking out for us to help with our campaign! There will be some great silent auction items that will count towards your United Way donation as well. This is also a great time to make your United Way donation and get opportunities at some great prizes: 1 Tablet (iPad, Microsoft Surface, or Dell XPS) 3—$100 cash prizes 2—$250 cash prizes 1—$500 cash prize
When you donate, the LAR will automatically enter your name in the drawing. For each $25 donation, you will get one entry, when you donate $100, you’ll get one extra entry! The drawing will be held at the September luncheon, and you do not have to be present to win! You can donate by cash or check and on-line at UnitedWay-Lubbock.org. The LAR will know if you donated through the website as well. Remember, your donation is tax deductible and $.87 of every dollar stays right here in Lubbock to help over 30 partner agencies that do so much for our community! Page 2
Off MLS Marketing: From Pocket Listing to Industry Tsunami By Jeremy Conaway The “pocket listing” is one of the oldest and most contested scenarios in the real estate industry. A seller retains an agent to sell a property and a listing agreement is executed. If it is a classic “Exclusive Right to Sell Agreement,” the broker has already executed a MLS subscriber document specifying that, unless certain conditions are met, the listing will be entered into the MLS within 48 hours, the agent will share information (cooperation) with other MLS subscribers and will share a portion of the total real estate commission (compensation) paid by the seller to the agent who brings forth a buyer (collaboration). This marketing standard, which has been the centerpiece of the American real estate market for almost fifty years, is approaching extinction in the face of a rapidly expanding market segment known as the “off MLS listing.” The Changing Scope of Pocket Listings The “pocket listing,” which is a listing that is kept off the MLS for a variety of reasons, has had a lengthy and illustrious history, though it has been a rare exception to ‘normal’ practice, and has been, almost universally, questionable. From a listing agent’s perspective the rationale for a pocket listing might range from the client’s legitimate desire for privacy or secrecy, to constructive discrimination, to an effort to net “both sides.” Indeed, some sellers may have their own reasons for not listing on the MLS, including wanting to sell to only certain “types” of people, not wanting the wrong strangers touring their property, or the completion of construction-related activities. Historically, select agents have had “inside” knowledge of pocket listings in their own offices, yet most agents were left in the dark. It is unclear what knowledge brokers have had regarding these practices over the years. The historic relationship between the MLS and the pocket listing is also unclear. Some MLS systems have attempted to regulate this type of activity by requiring the execution of a written exception by the seller, the agent and even the broker. Other MLSs and REALTOR® organizations actively discourage members from taking pocket listings and/or require execution of a notice regarding the benefits of MLS publicity. The current California Association of REALTORS® consumer education program definitely represents the ultimate activism. Possibly many MLSs have either felt helpless in the face of the problem or simply looked the other way. Recently, an increasing number of high production agents are using their power and influence with sellers to generate listings that are exempt from the accepted practice of cooperation, compensation and collaboration. Sellers involved in this type of transaction are executing an exception that states that the property shall not be exposed to buyers through the MLS, generally for a time certain or until a specific event occurs. Many of these listings never make it to the MLS before the sale is completed. The precise number of non-MLS sales within any market is not determinate of the crisis. Rather, it is the existence of a set of practices that are rapidly gaining ground and which are seen by some of the most ethical practitioners in the industry as being legitimate that have the potential to rapidly and negatively impact the stability of the new real estate marketplace. The Current Situation The impact of past pocket listings is minor compared to what is happening in today’s marketplace. Informal research and interviews conducted over the past several weeks have revealed the following with respect to what is now referred to as “off MLS” marketing activities: Individuals and entities from a wide range of financial, marketing, brokerage and regulatory elements are dedicating significant efforts, resources and energies to ensure that this new market demonstrates specific characteristics deemed to be advantageous to their specific interests. Some companies are routinely listing properties as pocket listings (with executed exceptions) before entering the property into the MLS. The most obvious benefit of this arrangement is to allow the company to try to obtain both the listing side and the “selling” side of the commission. There are a growing number of agents and agent networks that are more or less openly advising sellers to execute MLS exception documents for the sole purpose of effecting a sale that is to the clear benefit of the seller. The names attached to this growing practice include: “off MLS,” “off market,” “created sales,” “listing networks” and “listing parties.” Many of these groups go beyond brokerage boundaries. Page 3
The research suggests that 15% of homes are sold “off MLS” across the country. It appears that few MLSs are tracking such statistics. Some MLSs report rates approaching 26% with a smaller number reporting near 35%. The Probable Causes of This Shift The traditional real estate marketing system is making a significant effort to accommodate the emerging influence and interests of a more powerful consumer, the enhanced role of the Internet, new applied technologies, expanded regulation, new Internet based players and new brokerage business models. Although many of the practitioners of “off MLS” listings are suggesting consumer self-election, miscellaneous reasons and frequently manufactured consumer benefits, the fact is that the primary driver of this trend are real estate professionals themselves. There are at least two primary strategies at work here: 1) Arguably the most powerful strategy is being employed by “off MLS” real estate professionals who are totally focused on maximizing their incomes. Nothing can reach this objective as quickly as “scoring both sides” and “rewarding one’s friends that will return the favor in the future.” 2) The second strategy appears to be coming from those real estate professionals who have lost their confidence in organized real estate’s and/or the industry’s willingness or ability to cleanse itself of practitioners and practices which are inconsistent with the creation, legitimization and practice of ethical standards in the marketplace. There may be nothing that will achieve this result as effectively as denying marginal, unprofessional and unethical practitioners the listings they need to protract their incompetence. Unfortunately however, whatever their financial motivations, or however noble their efforts may be, it seems clear that neither of these groups have taken the time to either project or anticipate the “unintended” consequences of their activities. The Unintended Consequences The possible ramifications of “off MLS” marketing activities are both far-reaching and ominous for the future of the market. Consider the following: The loss of the MLS’s credibility as a data source in the home search process The loss of the MLS’s credibility within the appraisal process The deterioration of the credibility of the REALTOR® in the eyes of the American consumer. The overall REALTOR® value proposition in the eyes of anyone and everyone in the real estate space. After all, less work might mean less compensation. Potential anti-trust violations. The new listing networks are, in fact, groups of competitors that, it can be argued, are attempting to impact pricing, competition and market conditions. Potential Fair Housing violations. Any time there is a process that undertakes to unilaterally decide who are the “right people” to make a housing purchase, the potential for a fair housing violation cannot be far behind. Potential civil liability issues. Sooner or later suits will be filed by consumers who allege that they would have benefited from rising prices had their property been listed in the MLS. The potential of government regulation or even a governmental takeover of the MLS as a critical national economic system. In the final analysis perhaps no outcome will be as critical as the impact of the “off MLS” situation on organized real estate and the REALTOR® culture: As an agent driven condition, massive “off MLS” Listings will dramatically affect the way REALTORS® interact with each other and their clients. Relationships between REALTORS® will be strained by eliminating the come-one-come-all exposure currently being practiced. The practice of not exposing a seller’s home to the entire REALTOR® community changes the legal balance and thus the relative liability of both agents and brokers. One of the key elements of the current REALTOR® interactive community is the sharing of information in a manner that benefits both buyers and sellers. Creating a parallel “off market” environment cannot help but create a process that undermines what the public gets to see or know about properties, neighborhoods, and conditions related to the sale.
Page 4
Traditional REALTOR® MLS practices have been subject to at least minimal levels of transparency and rule making. It is readily apparent that the new “off MLS” practices will, to a great extent, be developed on a transaction-by -transaction basis. Some experts suggest that the current agent/broker relationship lacks the fundamental universal accountability, and that the creation of listing parties, networks or “created sales” will further erode the situation, potentially to a point of total dysfunction.
The Four (4) Criteria for Determining the Effective Date
Tax Reform Should Do No Harm
Get answers to more than 430 Legal FAQs at TexasRealtors.com.
The final date of acceptance is the date on which the contract becomes binding between the parties. It is the date that both buyer and seller have agreed The very nature of current “off MLS” practices suggests that they will to all terms of the contract and have executed the quickly come under review by errors and omissions carriers, especially if contract. Four elements must be satisfied for final consumer lawsuits are generated. It seems likely that such a review would acceptance to take place: generate a rate increase for all REALTORS®. 1. The final contract must be in writing. (This is The current “off MLS” situation is, for the most part, being practiced by typically satisfied when negotiations are made REALTORS® who represent the most professional and productive of using promulgated forms.) REALTOR® ranks in most markets. These are the top agents. One can only 2. The buyer and seller must sign the final imagine what will occur when these practices are undertaken by the contract, including the initialing of any legions of agents who fall far below this status. The term “wild west” comes handwritten changes to the initially drafted to mind. The utilization of “off MLS” practices has the potential of threatening the offer, if applicable. security and safety of every American. This is a situation that must be 3. Acceptance must be unequivocal. immediately addressed and solved by the very highest levels of authority 4. The last party to accept must communicate and expertise within our industry. Thanks to those who are already on the acceptance back to the other party or the other front lines of this critical battle. party’s agent, if applicable. Jeremy Conaway is a keynote speaker, conference facilitator, and consultant to the real estate industry. He is President of RECON The effective date is the date when the last intelligence Services, and may be reached at element (communicating acceptance back) is made Jeremy.conaway@reconis.com. after the other three elements are satisfied. One reason why communicating acceptance back to the other party is mandated is so the other party will know when the contract performance requirements or periods for performance begin.
Tax Reform is underway on Capitol Hill. The Senate has adopted a “Blank Slate” approach that initially eliminates every provision in the tax code, including those that encourage real
estate ownership and investment.
Senators must submit their tax reform priorities to need to make their voices heard now so real estate
Senate leaders by July 26th. REALTORS® provisions are on the top of the Senators' lists.
When approaching tax reform, Congress should be either the economy or the unique legacy that have contributed to making our country prosperous.
careful not to inflict adverse consequences on homeownership and real estate investment
REALTORS® must stand united that tax reform should above all “Do No Harm” and encourage Congress to retain tax provisions vital to real estate. Not only does this affect REALTORS®, but all industries that are involved in home buying and selling, including mortgage and title companies, home inspectors and home warranty companies. You can take action with 2 clicks of your mouse by visiting REALTORActionCenter.com.
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2013 Texas Real Estate Political Action Committee (TREPAC) Investors—Levels Reached as of July 10 Crystal R ($2,500) Jeff Sellers Sterling R ($1,000) Cade Fowler Tim Grissom Renessa Knowles Tony Lloyd Capital Club ($500) Karleen Boyd Coby Crump Rusty DeLoach Bill deTournillon Norma Edwards Brad Elder Linda Ferguson Kyle Forster Mary Ann Grafft Steve Gwinn Charlie Kearney Larry Jones Greg Luman Josh Putman Nancy Rawls Winn Sikes Pam Titzell John Walton Jon Willey Lone Star Statesmen ($250) Brian Aycock Stephen Bearden Joe Bellar Sandra Blocker Bob Brandt Jef Conn Kathy Davis Vanessa Dirks
Lone Star Statesmen ($250) continued Kelley Elliott Clay Enger Kent Gamble Greg Garrett Ella Glover Stephanie Henderson Gary Henry Jay Herrin Michael Huff Joe Humphreys David Jeter Tom Jones Brooke Lair Kathy Marable Chase Marberry Gene McGuire Tim Minnix
Chris Raney
Rod Reynolds Debora Perez-Ruiz Susan Shakespeare Shari Straley Scott Toman
110 Club ($110) Andrew Albares Andy Anderson Tricia Anderson Carol Bishop Cynthia Arriaga Wayne Backus Brian Blackwell Leigh Anne Brozo June Burks Lisa Carswell Danny Clark Bobbe Crawford Joy Daniel Lori Daniel Rich Eberhardt Don Enger Andy Ellis Phoebe Ellis
110 Club ($110) - continued Darlene Fillman Rick Fowler Teresa Franco Linda Gaither Paul Garrett Tim Garrett Alison Gaut Ken Harlan Frank Harmon David Haymes Tyler Haynes Brent Hodges Jackie Howell Larry Leivas Russell McGuire Mark McMillan Velma Medina Joe L. Murfee, III Gayle Ninemire Gary Owen Lisa Pearce Emily Ratcliff Ginger Robertson Bert Rogers Liz Smart Leslie Smith Melissa Smith Beverly Sowell Johnny Stringer Jack Strong Liz Tilson Rachel Townsley Dan Williams Tammi Wood Jana Wuthrich
Invest online at www.texasrealtors.com Year-to-Date Investments $51,475 Year-to-Date Participation 48%
Thank You Investors! As REALTORS® and private property owners, you know the value of protecting the real estate industry. That’s why TREPAC is so important. Not only is it an insurance policy on your career, but it makes you the ultimate advocate for your clients, friends and family. Every legislative session, TREPAC fights to protect the interests of home owners a the local, state, and national level including protecting homeowner’s equity, requiring the licensing of mortgage brokers for consumer protection and stopping additional taxes on the sale of real property. For every TREPAC event you attend, like our golf tournament or the July 26th Bingo Night, your participation goes towards your overall TREPAC investment. So invest today and not only will you save money by defeating more pesky fees, but you also show your clients another reason why using a REALTOR® is so important.
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Engaging the Next Generation of REALTORS
®
Lubbock Association of REALTORS
®
Bingo Night! [July 26, 6—9:00 PM at the LAR Office] $10 first 2 games, $5 for more Kids are FREE! Join the NextGEN Realtors in support of TREPAC for a night of heart pounding BINGO! Food, Drinks, Fun, and Prizes! RSVP to the LAR at hollymcbroom@lubbockrealtors.com or call 795-9533. Page 7
The Lubbock Association of REALTORS® Hosts
HOW TO USE FINANCING TO ATTRACT MORE BUYERS & CREATE MORE SALES August 7, 2013 9:00 a.m. – 1:00 p.m. FOUR (4) Hours MCE Credit
WHAT YOU WILL LEARN: ‐ How to help buyers improve their credit scores and loan qualifications ‐ How to overcome lenders’ more stringent underwriting guidelines ‐ How to get the buyer excellent terms while getting the seller full price ‐ How the seller can advertise “cash” concessions in lieu of price reductions ‐ How relatives can act as co‐borrowers to help buyers qualify and provide down payments ‐ How to use VA & FHA financing when the buyer’s credit score is too low for conventional loans ‐ How real estate investors and real estate agents can shelter $25,000 yearly from federal taxes ‐ How to get your clients an additional $50‐500 per month in take‐home pay so they can budget a move‐up or investment property
Cost: $10 $30
LAR members non‐members
Location: LAR Office – 5015 Knoxville Ave Instructor: Jeff Elias Provider: 0008 Course #: 04‐00‐074‐24282
Registration: send this form to the LAR, attn Holly McBroom, fax 806‐791‐6429, e‐mail hollymcbroom@lubbockrealtors.com Registration Information Payment: Check (make payable to LAR) Cash
Name:
Phone:
License #: Email:
Cancellation and class attendance policy: A full refund will be given if cancelling at least forty‐eight (48) hours prior to the class start. You must arrive prior to the class start time, and stay in class while it is in session. Those who fail to arrive on time or attend will forfeit the class fee and will not receive MCE credit. No exceptions will be made regarding this policy.