Capital Area REALTOR® May/June 2012 by GCAAR

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Capital Area Realtor

The official newsletter of the Greater Capital Area Association of REALTORS®

May - June 2012

Inside This Issue

Association News..............................page 3 GCAAR Bowling Event.......................page 3 Great Seneca Corridor ......................page 3 Ask the President..............................page 4 Past President’s Luncheon ��page 4 Fair Housing Poster Winner ��page 4 GCAAR in the News...........................page 5 NAR Director’s Report.......................page 6 Board Briefing..................................page 6 Committee Luncheon........................page 6 Region 3 Meeting..............................page 7 Broker/Manager Forum....................page 7 Spring Gala.......................................page 7 Emeritus Members............................page 7 Affordable Housing Conference ��page 8 Technology.......................................page 9 MC Market Report..........................page 10 DC Market Report.......................... page 12 Advice at Rookie Event................... page 12 GCAAR Cares..................................page 14 MAR Leadership Academy...............page 15 NVAR Housing Summit....................page 16 NAR’s MVP Program........................page 16 Education Schedule........................page 17 Public Policy...................................page 18 RPAC Investors...............................page 21 REALTOR® Rally Pics......................page 21 Quiz............................................... page 22

USPS: 017-467

Volume 18, Number 3

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GCAAR Members “Rally” for Homeownership A contingent of blue t-shirts converged on the Washington Monument as GCAAR and DCAR members joined their fellow REALTORS® from across the country at the Rally to Protect the American Dream on May 17. The National Park Service reported that over 13,800 gathered at the Monument to hear NAR President Moe Veissi and others emphasize the importance of homeownership with another 14,000 participating in the Virtual Rally. GCAAR President Bonnie Casper and

to the Monument. GCAAR President Bonnie Casper and DCAR President Ed Downs were interviewed by NAR on the question, “What are the issues facing homeowners today” for a video package that was sent to news outlets across the country. Bonnie and Ed stressed the importance of homeownership, emphasizing Congress’ need to focus on reasonable lending practices, fair and accurate appraisals, and the extension of the mortgage interest deduction. Additional pics of the event are on page 21.

DCAR President Ed Downs prepare for interviews

GCAAR’s Maryland contingent traveled by bus from the Rockville office to The Hamilton Live where they joined fellow members for a buffet breakfast before walking down

Bonnie with MAR CEO Mary Antoun and MAR Treasurer Carole Maclure

The 3.8% Tax Is Not a Real Estate Transfer Tax By Robert Freedman, Senior Editor, REALTOR® Magazine Shortly after the federal government enacted sweeping healthcare reform in 2010, there was considerable concern over a last-minute addition to the legislation: a 3.8 percent tax on investment income of upperincome households to help shore up Medicare. The tax takes effect in 2013.

Greater Capital Area Association of REALTORS® 8757 Georgia Avenue, Suite 600 Silver Spring, MD 20910

Among the concerns expressed by consumers and business people, including real estate professionals, both then and today, is that the tax amounts to a transfer tax on real estate. Not true, NAR Director of Tax Policy Linda Goold says. Here’s how the tax works. For individuals earning $200,000 a year or more and married couples earning $250,000 a year or more, certain investment income above these income levels might be subject to the 3.8 percent tax on a portion of that income. I say “might” because whether the tax applies or not depends on many factors having to do with the kind and amount of the investment income the household receives. Investment income includes capital gains, dividends, interest payments, and, for those who own rental property, net rental income. continued on page 15 Like Us on Facebook! www.facebook.com/GCAAR2

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2012 May - June

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2012 May - June

A ssociation N ews 2012 Board of Directors President

Bonnie R. Casper

President-Elect Michael McGreevy

Great Time at GCAAR Bowling Event! Thank you to all who came out to support GCAAR at our first ever bowling event at 300 Shady Grove Bowling Lanes in Gaithersburg. A great time was had by all! Special thanks to all of our sponsors: First Savings Mortgage Corp., Capitol Title, Coldwell Banker, Classic Settlements, Embrace Home Loans, Home Team Title, Paragon Title, and Village Settlements. “Like” us on GCAAR’s Facebook page you haven’t already to see additional pictures from the event.

Secretary

Gregory Ford

Treasurer

William H. Highsmith Jr. , JD, GRI

Fred Brandt checks in

Bowling under the neon lights

Immediate Past President Adrian Hunnings

Chief Executive Officer Michael Moran

Directors

David Bediz Suzanne Des Marais Carter Ferrington Mynor Herrera Ellen Katz Tim Knobloch Elley Kott Emiliana Lobos-Kirker Margaret “Peg” Mancuso Obiora “Bo” Menkiti Gerard “Gerry” Occhiuzzo Prabhjit Singh

Editor

Bobette Banks

Advertising Representative Arlene Braithwaite

Capital Area REALTOR® (USPS 017-467) is published six times a year by the Greater Capital Area Association of REALTORS®, 8757 Georgia Avenue, Suite 600, Silver Spring, MD 20910. Periodicals postage paid at Silver Spring, MD. Member subscriptions account for $10 of each member’s annual dues. Annual subscriptions are available to non-members for $25. Subscription inquiries may be sent to Capital Area REALTOR® at the above address. Copyright© 2012 by the Greater Capital Area Association of REALTORS®. All rights reserved. POSTMASTER: SEND ADDRESS CHANGES TO CAPITAL AREA REALTOR®, ATTN: GCAAR, 8757 Georgia Avenue, Suite 600, Silver Spring, MD 20910. The Greater Capital Area Association of REALTORS® makes no warranties and assumes no responsibility for the accuracy of the information contained herein. The opinions expressed herein do not necessary reflect the opinions of the officers, directors or staff of the Greater Capital Area Association of REALTORS®. The Greater Capital Area Association of REALTORS® accepts submissions of articles and photographs and remains the property of the Capital Area Association of REALTORS®. The publisher reserves the right of full editorial authority and to decline publication of any article not deemed proper. Deadline for all submissions, including cameraready advertising on disk or film, is the first of the month prior to publication. Reprint with permission only. Reprint permission may be obtained by contacting the Greater Capital Area Association of REALTORS® at 301.590.2000; via fax at 301.590.2248; or via e-mail at bbanks@gcaar.com. REALTOR® is a registered collective membership mark that identifies and may be used only by real estate professionals who are members of the National Association of REALTORS® and subscribe to its Code of Ethics.

GCAAR Members Learn About Plans to Transform the Great Seneca Corridor GCAAR President Bonnie Casper welcomed a packed crowd on April 4 as attendees got an overview of the plan to develop the Great Seneca Science Corridor. The economic development plan forecasts the creation of 60,000 new jobs, and potentially thousands of new real estate clients. The speakers discussed what’s in the plan, obstacles to getting it done, how much residential and commercial development will be built and where, and how mass rapid transit will be integrated into the housing and employment patterns. The discussion was moderated by consultant Tom Osborne and included from the private sector: Margaret Smith Ford, Partner, L-R, Greg Ossant, Steve Fenley, Tom Osborne, GCAAR President Bonnie Woodfield Investments; Jack Jaeger, Casper, Diane Ratcliff, Mark Winston, and Dave McDonough President, Danac Corporation; David McDonough, Senior Director Johns Hopkins Real Estate; and Bill Robertson, President and CEO, Adventist Health Care, Inc. Public Sector panelists were: Greg Ossont, Deputy Director of Planning and Development for Montgomery County; Diane Ratcliff, Director of Planning and Programming, Maryland Transit Administration; and Mark Winston, Chair of the Montgomery Country Transit Task Force. “We were happy to have such a good turnout,” said GCAAR President Bonnie Casper. “Our members are interested in the future growth of Montgomery County, and we are planning a number of events throughout the year to keep them well informed.” Full house in attendance

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2012 May - June

Ask the President Bonnie Casper 2012 GCAAR President Q. Does GCAAR think about diversity in leadership? I see all these pictures from the REALTOR® associations and it bothers me that often they all look alike! -A member from Germantown A. Funny you should say that, I’ve thought about that too. But yes, I can speak for GCAAR in that diversity is a high goal, right after getting the best person for the job. Our Board has been historically very diverse by sex, ethnicity and many other measures, and of the last 15 Presidents 10 have been female and five have been male. Since our membership is very diverse our leadership tends to reflect it. You could say we’re leading by example. Again, I think our members want the best representation first, and then it follows that if that’s true we have a good mix of folks in leadership. Does it ever exactly reflect the makeup of our membership in every way - no - that would be virtually impossible.

Capital Area REALTOR®

Q. How often do you speak to the press as GCAAR President? -A manager from U Street A. I get calls from reporters about twice a month, and talk to them as soon as possible. When we have a special event (like a rally) I speak to both print and other media as soon as I can because the issue at hand is more topical. In today’s news environment, it’s hard to get the media outlets to focus on the local real estate news; they often want the national story, even though it doesn’t portray what’s relevant to our market. So we try hard to get our message out. Q. Once in a great while something another agent does drives me crazy! What can I do about that? -An agent from Bethesda A. Yes, this is a very stressful business and there’s plenty that can make us angry. I guess I’d say take a deep breath, wait ‘til the transaction is completed and see if you still feel the same way. GCAAR has procedures to deal with procuring cause, cooperation, and ethics, and we often empanel groups of our peers to look into disagreements between members and brokers. We don’t make it too hard and we don’t make it too easy. Weigh the pros and cons of making a complaint, the time and effort involved and the seriousness of the matter. If you want to proceed, we’re here to help. Call or email GCAAR to get the ball rolling. It’s in everyone’s best interest that real estate is practiced professionally, ethically, and with civility.

Bonnie Casper is 2012 GCAAR President, MAR, DCAR and NAR Director. She can be reached at Bonnie.Casper@cbmove.com.

Past Presidents Share Stories Over Lunch Several GCAAR past presidents gathered for lunch on April 20 at Season’s 52 Restaurant in Bethesda. GCAAR President Bonnie Casper broke the tradition of having a luncheon at the end of the year – instead opting to give the impressive array of past leaders an update on what GCAAR’s been doing since she took office. She also thanked the group for their service to GCAAR, with special kudos to Immediate Past President Adrian Hunnings for his great work in 2011. L-R, Judith DiFilippo, 1991- MCAR; Carole Maclure, 1997-MCAR; Martha Schmidt, 1998- MCAR; Alana Lasover, 2001-GCAAR; Mary Vaarwerk, 1992 – MCAR; Jim Kneussl, 2004- GCAAR; Brenda Small, 2007-GCAAR; Dennis Melby, 2008-GCAAR; Bonnie Casper, 2012- GCAAR; Adrian Hunnings, 2011-GCAAR; Shelly Murray, 2010-GCAAR

GCAAR’s 2013 Fair Housing Poster Contest Winner - Sarah Miller Sarah Miller not only won the 2013 Fair Housing Poster Contest for Montgomery County, but Sarah’s drawing also was chosen as the Fair Housing calendar cover! Sarah, of St. Elizabeth’s School in Rockville, Maryland, and nine other Maryland County winners were honored at a reception at the Maryland Senate Building in Annapolis on April 24. The Maryland Association of REALTORS® partners with local schools and organizations to promote fair housing through their annual Poster Contest. Students from across the state in grades K - 8 are eligible to participate in the contest, and were asked to illustrate the theme, “Fair Housing Lives in Maryland.” Each student received a gift card from BB&T Bank and 30-50 calendars to share with friends and family. Maryland State Treasurer Nancy Kopp presented the certificates to the winners.

Capital Area Realtor®

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2012 May - June

but interest rates are low, there’s not a lot of inventory, and I would say that it’s always better to deal with the market you know than the market you don’t know.” - Bonnie Casper, President of GCAAR joined FOX 5 News to explain how the DC housing market is faring.

in the News Washington Area Prices Pick Up in May Washington Examiner, June 11, 2012 “Buyers feel like they’re getting a lot of house for their money…and sellers are doing well because they feel like they’re getting good value for their homes.” - Bonnie Casper, 2012 GCAAR President Home Prices Rise in Most Major US Cities FOX 5 News, May 29, 2012 “It’s not often you can say it’s both a buyer’s market and a seller’s market,

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Rising Home Prices in Maryland Encouraging, Agents Say Gazette.net, May 14, 2012 “My office had its best April in the past four years,” said Dennis Melby, vice president for Montgomery County with the Maryland Association of REALTORS® and an agent with Long and Foster’s Bethesda Gateway office. “People are more optimistic with the pent-up demand and low mortgage rates.” A Weekend of Open Houses Express Night Out, April 27, 2012 On April 28 and 29, sellers across the country will open their homes, making it easier for buyers to check out multiple properties. Members of the Northern Virginia Association of REALTORS® (NVAR) and the Greater Capital Area Association of REALTORS® are hosting in the DC area.

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2012 May - June

NAR Director’s Report Michael McGreevy GCAAR President-Elect, NAR Director

Hot Town Summer in the City!

Once again, GCAAR and DCAR were the host local and state associations respectively for the annual NAR (National Association of REALTORS®) Midyear meetings held in the Calvert/Woodley Park area of our nation’s capital. During the meetings we accomplished a great deal, learned a lot, and even found time to have fun with REALTORS® from both near and far. Many of our local members that attended (for free I might add) participated in the meetings, attended the REALTOR® Rally (see the separate story in this issue), and had a blast at the Trade Show and the social events in our own backyard meetings. DCAR sponsored a reception for our members and for guests from around the region and the country. Ed Downs, DCAR President and NAR Director, served as host during the afternoon reception held at the Wardman Park Marriott. It’s a tradition that was started by GCAAR years ago that brings us in contact with agents and brokers from across the country. It was great to see the turn out by so many of our members.

BOARD BRIEFING

The GCAAR Board of Directors met on April 27, 2012 in our Rockville, Maryland office. The Board welcomed 2012 Maryland Association of REALTORS® (MAR) President Pat Terrill. President Pat congratulated the Association for the great turnout at the “Rally to Save the MID” in Annapolis, and updated the Board on MAR activities and the ongoing challenges facing the housing industry in the Maryland legislature. President Pat was also on hand to help the Board congratulate Samar Caverly and La Crisha Butler, GCAAR members who recently graduated from the MAR Leadership Academy.

FORMS

The Contract and Clause Committee updated, and the Board approved, the release of the revised Buyer/Tenant Agency Agreement. The Property Management Committee is working on a revised Rental Application.

One of the most interesting opportunities I had at these meetings is attending the roundtables for the Presidents-Elect from all the other associations in the U.S. It’s a great venue to discuss trends in real estate from across the country, government policy issues that are facing other REALTORS®, the state of the market, and even how to run an association more efficiently and effectively. Now I’d like to share some great news! I’m happy to report that our NAR dues will remain the same for 2013. I and the other NAR Directors felt that we, as a professional association, are well positioned to represent both REALTORS® and homeownership with the resources we have. While markets continue to change, the fundamental principle that owning a home builds a strong community and personal security is the bedrock of our profession. We’ll continue our very popular REALTOR® ad campaign on TV, radio, and print ads throughout the year, as well as lobby and support those in government who believe in homeownership. As GCAAR’s President-Elect and a NAR Director, I plan to attend the NAR Convention in Orlando later this year and would love to see many of you there as well. It’s a great opportunity to network with REALTORS® from across the world, obtain valuable education in real estate trends, and take a well-deserved break. I hope you can join me there, and I look forward to continued progress and improvement for our real estate community. -Michael McGreevyMichael McGreevy is the President-Elect of GCAAR and a NAR Director. He can be reached at MVP@LNF.COM

Jennifer Hughes, Director of the Montgomery County Office of Management and Budget talked about the budget challenges in the County with Board and Public Policy Committee members at the April meeting. Montgomery County Planning Board Chair Francoise Carrier spoke at the May Public Policy meeting.

DEVELOPMENT ROUNDTABLES

The 2012 Development Roundtable series kicked off with a presentation on the Greater Seneca Science Corridor. Over 70 members attended to learn about the planned development that could attract up to 60,000 jobs over the next 20 years. Stay tuned for details on the Roundtables planned for Silver Spring, Bethesda, and the DC Waterfront area.

Committee Luncheon April 23

REALTOR® Party

GCAAR members have already invested over $120,000 in the REALTOR® Party (RPAC) in 2012! Please support the REALTOR® Party and make your 2012 investment today! Invest online at www.gcaar.com.

SPEAKER SERIES

The Public Policy Committee continued the 2012 Speaker Series with Montgomery County Transit Task Force Chair Mark Winston, who outlined the Task Force’s work on a county-wide mass transit proposal which will be presented to County Executive Leggett in May.

Capital Area REALTOR®

Committees chat with President Bonnie Casper

Committed Chairs and liaisons met at GCAAR on April 23 to touch base on how the committees were working so far – a promise made by President Bonnie Casper to get the pulse of the committees periodically throughout the year.

Capital Area Realtor®

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2012 May - June

Region 3 Meeting and Reception Highlights

DCAR President Ed Downs

NAR President Moe Veissi, 2012 President Bonnie Casper and 2012 GCAAR President-Elect Michael McGreevy

GCAAR President Bonnie Casper with NAR Treasurer Bill Armstrong

DCAR in the house: Immediate DCAR Past President Suzanne Des Marais, Ron Rochowiak of Stages Realty, DCAR Secretary Marcus Jaffe, and 2012 President-Elect Bo Menkiti

PGCAR President Alease Bowles with DCAR Board Member Bonnie Roberts-Burke

DCAR President and Region 3 Reception Host Ed Downs with John Stepney

2012 GCAAR Broker/Manager Forums

Save the Dates!

Lunch will be served! Cost: FREE! Register online at gcaar.com

GCAAR Represents at Democrats Spring Gala GCAAR members Greg Ford, Tim Knobloch, and Aaron Hargrove with Maryland Senator Barbara Mikulski at the Montgomery County Democrats Spring Gala on May 12.

September 19: “All You Need To Know about Procuring Cause” Speaker: Al Monshower, Esq. Time: 12 p.m. . Location: GCAAR Silver Spring Office (8757 Georgia Ave, Suite 600, Silver Spring, MD)

October 17: “The Most Common Mistakes Made by Agents that Delay Settlement and How to Avoid Them” Speaker: Randy Rothstein, Esq. Time: 12 p.m. Location: GCAAR Silver Spring Office (8757 Georgia Ave, Suite 600, Silver Spring, MD)

GCAAR Welcomes Emeritus Members! The National Association of REALTORS® Emeritus status is given to those REALTORS® who have 40 years of membership in the national organization. GCAAR is proud to congratulate the following members who have reached Emeritus status: Geraldine Checkon Sophia Henry

Margaret Lamberton Jeanne Livingston

Rita Orcino Genevieve Rostad

William Stein

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2012 May - June

Capital Area REALTOR®

Bonnie Casper Represents GCAAR at Affordable Housing Conference GCAAR President Bonnie Casper represented GCAAR at the 21st Annual Affordable Housing Conference on May 7 at the Bethesda North Marriott. Bonnie spoke on the panel, Housing and Jobs: Contributions to the Economy, which addressed current and projected housing needs in the region and the county’s economic development goals for long-term sustainable investments. The panel also discussed connections to job creation in the commercial and residential real estate development. Moderated by Lisa Sturtevant of George Mason University, the panel also included Steve Silverman, Director of Economic Development for Montgomery County, and Peter Gartlan, of Donohoe Construction. GCAAR also sponsored the Closing Costs Assistance Award.

L-R: Peter Gartlan, GCAAR President Bonnie Casper, Steve Silverman, and Lisa Sturtevant

GCAAR’s Closing Costs Assistance Award Family with Bonnie Casper

GCAAR’s Green Committee Chair Moderates Panel at Affordable Housing Conference Beth Irons, Chair, GCAAR’s Green Committee, chaired the “Green Housing & Sustainable Design” panel at the 21st Annual Affordable Housing Conference of Montgomery County held at the Bethesda North Marriott Hotel & Conference Center on May 7, 2012. GCAAR was a major sponsor of the Conference. The panel of experts included: + Michael Freedberg, HUD’s Office of Sustainable Housing and Communities www.hud.gov/sustainability

+ John Spears, Founder and President, Sustainable Design Group www.sustainabledesign.com

+ Michael Wiencek, Principal, Wiencek + Associates Architects + Planners, www.wiencek-associates.com

Low-income families often spend 30% of their income on utilities, some even going without food and medicine, to keep the utilities on. Any savings in utilities which can be achieved by building and retrofitting housing in a “green”, energy-saving way, provides proportionately larger savings and benefits to low income families.

L-R , John Spears, Michael Freedberg, Michael Wiencek, and GCAAR’s Green Committee Chair Beth Irons

Mr. Freedberg reviewed a number of “green”, energy-saving initiatives which HUD has sponsored (see the above HUD website for the many details). HUD will have financed nearly 20,000 energy and green retrofits under the Green Retrofit Program using funds from the Recovery Act by the end of FY2012. Mr. Wiencek, whose firm is involved in the design and construction of 4-6,000 multi-family housing units per year, reviewed the rapid advancement of “green” construction in the last 6 years. “Green” construction results in lower maintenance costs and thus lower rents, and improved health for residents. Mr. Spears provided a case study of a geo-solar community his firm is working on in Frederick, MD. North Pointe (www.homesatnorthpointe.com) is a development of 58 town/semi-detached homes. Phase I was 85% sold out in 4 months. Each home at North Pointe offers a number of features that reduce environmental impact and allow each resident to save energy, water, and money. These features include: the use of environmentallyfriendly building materials, recycled content finishes, high energy-efficient geothermal heating and cooling system, energy-saving LED and fluorescent lights, Energy Star-rated appliances, an energy-efficient hot water system, electricity producing solar panels, total recovery ventilation, central vacuum system, whole house HEPA filtration system and NexusVison (Nexus’ proprietary home communication system / smart house system).

Capital Area Realtor®

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2012 May - June

T echnology Google Drive is On the Way By Amy Chorew, The Tech Byte

You may have noticed a message when accessing your Google Documents telling you that your account will be switched over to Google Drive soon. Google Drive is the newest release from Google that allows file storage, sharing, and collaboration all in one and is replacing the popular Google Documents. The interface is very similar to Google Docs so don’t panic. You have options to download Drive to your computer for easy synchronizing. Log into your current Google Documents to download or go to Drive.google.com. Google Drive provides up to 5MB of storage for free which is plenty providing you aren’t uploading tons of images and/or videos. There are better storage options for videos and images but that is for another article. Drive does allow you to purchase more space for just $2.49 a month. If you aren’t already using Google in your real estate business we suggest you start using Google Drive today. The uses are limitless! Here are some of the things you can do with Google Drive: • Share transaction documents for easy access anywhere with a computer • Buyer/seller reports • Open house feedback forms • Client surveys • Obtain testimonials • Create planning documents with your team • Share listing presentations • Share transaction documents with your tech-savvy clients Google Drive is currently available with your Mac, PC and Android devices. Drive notes that Monach_halfpagead_Suite#_Layout 1 4/16/12 10:49 AM Google Page 1 is pretty quick about rolling things out. iPhone and iPad access is coming soon and

Monarch Title is pleased to announce the opening of our newest settlement office at 5151 Wisconsin Ave., Suite 350 in Friendship Heights in early Summer 2012. Please contact Patrick Tangney @ 202.298.6270 for further information Visit us at www.monarchtitle.net

2012 May - June

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Capital Area REALTORÂŽ

Montgomery County Market Report By Fred Flick, Ph.D., Consultant/Housing Economist

Fred Flick

In the first quarter of 2012, the state of Maryland experienced a down market in both sales units and prices. Over the first three months, property sales totaled 10,554 units and were off 1.6% from the first quarter of 2011. Similarly, the average price of $261,448 was down 0.6% from the 2011 annual figure. Moreover, the first quarter median price of $219,722 slipped 2.7% from a year before.

On a monthly basis, March prices performed better than sales. Marylandâ&#x20AC;&#x2122;s total sales in March (4,225) were down 2% compared to a year ago, but both price measures rose. Statewide, the average home price rose to $267,196, slightly above that of a year before. Nevertheless, the median price of $225,601 was up almost 6% from March 2011. Now on to Montgomery County:

Unfortunately, through the first quarter prices were still trending down. For the first three months of this year the average price was $481,885, and the median was $378,250. While these figures were higher than in February, still they were 6.5% and 6.6% below the respective prices for 2011. In 2011, the average single-family home sold for $515,161 and the median priced unit cost $405,000. While 2011 saw a rise in single-family prices from 2010; so far in 2012 prices remain soft. Foreclosures and short sales are probably affecting the market, as they seem to be increasing after the end of the moratorium on foreclosures by the banks.

Single-Family Market Single-family contracts and settlements performance was mixed in the first quarter. March year-to-date contracts (2,193) were up by 5% from a year ago. However, new contracts for the month (967) were only two sales higher compared to last March. But, single-family settlements for the first three months (1,318) were off by almost 4% from a year before. Similarly, the monthly settlements tally (522) was down by 4%. MARCH Condominiums and Cooperatives Over the first quarter of 2012, the condo/coop market also experienced mixed performance. Year-to-date sales contracts were up, but settlements were down compared to the first quarter of 2011. Year-to-date there have been 710 contracts, rising almost 6%, but new contracts for the month (266) slipped almost 7% from last March. As far as settlements have been going, year-to-date figures totaled 466 -- down about 6% -- with 189 monthly settlements down exactly 6% from March 2011.

The quarterly listings volume was significantly lower compared to a year ago as well. Total single-family active listings of 2,069 properties were down almost 13% from the first three months of 2011. Nevertheless, March monthly new listings of 1,362 units inched up 1.8% from a year before. Computing the absorption rate, at the March contracts pace there was a 2.1 months supply. Hopefully, this will be good news for prices this season.

So far this year, condo/coop inventory has been significantly below the 2011 level. Total actives through March (551) fell 32% from last year. But, as we would expect by early spring, new listings were up over 6% compared to March 2011. Looking at absorption, at the March contracts pace, there was about a 2.1-months supply of properties -exactly the same ratio as for the single-family market. This relatively low level of available properties should help keep upward pressure on prices.

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2012 May - June

Furthermore, the most recent Institute for Supply Management (“ISM”) survey data indicates that U.S. service companies, which employ about 90 percent of the labor force, expanded more slowly in April leading to lower growth in new orders and hiring. So far, manufacturing has been driving the recovery, with the manufacturing sector expanding at its fastest pace in about a year. Unfortunately, while new manufacturing orders, production, and employment rose, manufacturing is only about 12 percent of U.S. output.

Although condo/coop prices have been on a downward slide since 2008, the rate of decline seems to be flattening out. Through March, average and median prices were $233,787 and $188,950, respectively. These are higher than the February numbers and they are down only 2% and 0.6% from the respective figures for the year 2011. Compared to past years, the rate of decline appears to be leveling off. Prices should rise with the spring and summer markets and hopefully they portend a true bottom this year.

Economic JOBS AND GROWTH So far, the first quarter of 2012 has shown a pretty tepid rate of national economic growth. The Bureau of Economic Analysis’ first quarter advance estimate for real economic growth came in at a very soft 2.2% (the fourth quarter 2011 final rate was 3%). This is not an encouraging statistic and economists are now worried that the Fed may need to do more quantitative easing. This figure will probably be revised, but the direction is not yet immediately obvious. Moreover, the rate of new job growth seems to be trending down. In April, the economy added only 130,000 private jobs, although the national unemployment rate eased down a bit to 8.1%. However, actual total full-time employment fell as discouraged workers increased. The job creation numbers were below those for previous months and below analysts’ expectations. Also, while the service sector gained 101,000 jobs, manufacturing added only 16,000 new jobs. Part-time employment also increased. The only bright spot was that the Bureau of Labor Statistics revised its previous March figures upward from 120,000 to 154,000 jobs. Maybe that will happen next month for these April numbers, but that is cold comfort.

Housing Industry Production News for the housing industry has been mixed as well. The new home sales rate was only 328,000 units in March (at a seasonally adjusted and annualized rate, or “SAAR”). On the bright side, while it was down 7% from the February figure, it was 7.5% above the March 2011 figure. And, prices are up as well. The average price of $291,200 was up 11.7% from a year ago; and, the median at $234,500 rose 6.4% above the March 2011 figure. So, the new sales market looks to have hit bottom and is coming back. Continuing on this theme, there was some good news for home construction. While March total starts of 654,000 units (SAAR) were down 6% from February, they were up 10% compared to March 2011. And single-family home starts (462,000), while down slightly from the previous month, were 10.5% above a year before. Furthermore, builders seem to be more optimistic about the future as total housing permits (747,000) were 4.5% above the February figure, and a full 30% above the rate for March 2011. Single-family permits (462,000) were about 4% below February, but 18% higher than in March 2011. The home resale market seems to be improving as well. While March single-family home sales slipped 2.5% (3.97 million, SAAR) from February, they were 5.9% above the pace of March 2011. Furthermore, the single-family median price ($163,600) rose 1.9% from March 2011. And, although condo/coop sales (510,000) declined 3.8% from February, they were flat relative to March 2011. However, the condo/coop median price came in at $165,200 -- up a substantial 7.1% from a year before. The total inventory of 2.37 million properties represented a ‘normal’ 6.3 months supply, significantly improved over a year ago. However, as the National Association of REALTORS® notes, distressed sales have been about 30% of the market. And, there are still a lot of foreclosed properties that will eventually hit the market. Economic Policy, Interest Rates, and Inflation Unfortunately, while the economy is barely holding its own, the political debate over tax and fiscal policy rages, with little to be done for the rest of the year. The absence of fiscal stimulus is likely failing us now. The only stimulus we have is Fed monetary policy. The political season, concern over the deficit and national debt, as well as the fight over who will pay for government programs, has paralyzed Congress. What is likely is that if we go through two or three more months of lack luster job creation, the Fed will bring back some form of quantitative easing program, probably by the end of summer. While conservatives worry about future inflation from fiscal and monetary expansion, at this point inflation is not even a remotely serious threat to price stability. Some economists even have suggested that the Fed should modify its inflation target upward to allow for more aggressive quantitative easing, but that will encounter political difficulties. However, if economic growth slows much more, the Fed will need to do more to avoid another recession. continued on page 16

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DC Market Report By Fred Kendrick

The Washington, DC housing market continued to suffer from a shortage of inventory with 33% fewer single-family homes, condominiums and cooperatives on the market than last year according to Real Estate Business Intelligence (RBI). There were 20% fewer new listings in April of 2012 than last year, but there was still an 11% increase in pending sales for Fred Kendrick the month. However, this increase came exclusively from the condo/co-op side as it continues to recover from a lackluster 2011 performance. With the low inventory and high demand for homes, buyers are facing increased competition for homes as multi-offers have become more common. In April, the average days on market fell 19% (from 83 days on average to 67) from last year as 30% of the properties that sold during the month were on the market less than 10 days and 57% listed in April were under contract or sold by the end of May. Seventeen percent of buyers in April were cash buyers, compared to 28% a year ago and to 24% for year-to-date sales. The median price for properties sold in April was up 13% from April of last year, while the average price remained even. For the first four months of the year, the median price is up 3% and the average price up 4% compared to the same period last year. The bump in median price for the month of April is an indication that the coming months could very well see additional increases higher that the 3% year-to-date increase. The forecast for the late spring and early summer real estate market is for more of the same. The summer months could see a lessening in intensity as some buyers take a summer vacation from the homebuying process, but with only 2.09 months of inventory it is likely that the current sales pace will continue through the summer and into the fall. Single-Family HOMES The number of new listings for single-family homes was down 17% from April of last year, and the overall number of available homes at the end of April was down 27%. The largest losses came in the block of homes priced below $500,000 (the median price of homes sold in 2012 is $472,000). The were 39% fewer homes on the market from 2012 at this price point, while the top half of the market priced over $500,000 had 10% fewer properties on the market. At the end of April there was 1.96 months of single-family inventory. This was the first time this number has fallen below two months since August of 2005 -- not so far off the marks set in April of 2010 and 2011 of 2.31 and 2.60 months, but substantially lower than the 5.64 and 4.60 months of April of 2008 and 2009.

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New contracts on single-family homes fell 4% from April of 2011. Only two price categories registered substantial losses from last year. Pending sales of homes priced below $200,000 were down 30% and for homes $700,000 and $800,000, down 31%. Homes priced from $800,000 to $900,000 were up 55%, while homes prices from $900,000 to $1,000,000 were up 36%. Year-to-date sales of single-family homes were down 5.5% from 2011. The largest gains from last year came in the $1.25 million to $1.5 million range (up 59%) and the $600,000 to $700,000 range (up 30%). Sales of homes below $200,000 were down 27%. As the market improves, it will become even harder to find lower-priced homes in the District, but it is possible that we could see some relief in the middle and upper price points as the year goes on. The median price of homes sold in the first four months of 2012 is up 5%, while the average price is up 3%. Median prices have now risen 16% from the bottom of the market in 2008, but they are still 11% below the top of the market reached in 2007. Condominiums and Cooperatives Condominiums and cooperatives continued their 2012 resurgence with a strong April performance. The number of new contracts on condos and co-ops in April rose 27% from 2011, to register the second best sales month in two years. Pending sales on units priced between $500,000 and $800,000 (25% of the market) were up 77% from last year, while units priced between $200,000 and $300,000 (21% of the market) were up 45%. Through the first four months of the year, sales of condominium and cooperative units were up 12% from 2011. The highest gains were seen in $400,000 to $600,000 price range, which was up 32%, and in the $1.5 million and up range, which was up 60%. The inventory of available units has fallen 31% from a year ago, with 23% fewer units coming on the market in April of 2012 compared to 2011. All price ranges under $800,000 have suffered double-digit inventory losses from 2011. The number of units priced over $800,000 is only down 5%. At the end of April there was 2.45 months of available inventory, compared to 4.53 months last year. In 2011, there was over four months of inventory in all but one month of the year. So far in 2012, all but one month has registered less than three months of inventory. The average price of a condominium/cooperative unit in 2012 is unchanged from 2011. The median price is up by 3%, and has now equaled the high point reached in 2005. Condo/co-op prices have avoided the double-digit, double-dip loss seen in 2009 on the singlefamily side and have remained more stable since the peak of the market. Prepared by Fred Kendrick, TTR Sotheby’s International Realty Data from the Greater Capitol Area Association of Realtors (GCAAR) and Real Estate Business Intelligence (RBI)

Successful Agents Share Advice at Rookie Event A few of GCAAR’s top talent shared their secrets of success at the “Pick the Brains of Successful Agents” event sponsored by the Rookie Committee on May 9 at GCAAR’s Rockville office. Moderated by Nathan Dart, ranked by ReMax as one of Maryland’s Top 5 agents since 2008, the panel included Jim Roy of Long & Foster, 2003 Winner of NAR’s 30 Agents Under 30, Rachel Valentino of Coldwell Banker, recognized by Washington Life Magazine as one of the 250 Most Influential in Washington Under 40, and Pamela Wye of TTR Sotheby’s International Realty, 2011 GCAAR Rookie of the Year, and 2011 Winner of NAR’s 30 Agents Under 30. “Although I have been in the business a while, I always get some great information from the superstar panel and it’s nice to meet the up and coming agents as well,” said GCAAR Cares Chair Sharon Rogers of Long & Foster.

B:10.875”

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Serving the Business Needs of OUR Professionals T:10”

2012 May - June

S:9.625”

for making “pre-approved” mean something.

Subject to property underwriting and appraisal. Borrower must satisfy pre-approval conditions outlined in commitment letter. Loan amount subject to property appraisal. PNC is a registered service mark of The PNC Financial Services Group, Inc. (“PNC”). PNC Mortgage is a division of PNC Bank, National Association, a subsidiary of PNC. All loans are provided by PNC Bank, National Association. This information is provided for business and professional uses only and is not to be provided to a consumer or the public. This information is provided to assist real estate professionals and is not an advertisement to extend consumer credit as deﬁned by Section 226.2 of Regulation Z. Programs, interest rates, and fees are subject to change without notice GEN-7957 ©2012 The PNC Financial Services Group, Inc. All rights reserved. Member FDIC

T:14”

An in-depth pre-approval process. A more predictable outcome. The PNC pre-approval is underwritten by a PNC mortgage professional. We walk your client through the entire application process. We perform a full credit review and, if approved, the result is a true commitment to lend. From the start. See what makes us different at pncmortgage.com/agentalliance

B:15”

S:13.5”

PNC Mortgage

2012 May - June

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Overflow of Support Marks 2012 Rebuilding Together®

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Special Thank You to our Food Sponsors:

Our housing market may be tough, but so were the 77 volunteers who poured out in record number for the 2012 Rebuilding Together® projects in Montgomery County, MD and Washington, DC on Saturday, April 28. GCAAR has supported Rebuilding Together® since 1989 when it was called Christmas in April, but never have we had such an incredible outpouring of support from our REALTOR® community! So much so, that we had extra volunteers to help a nearby Rebuilding Together® project in Montgomery County and a fellow neighbor in DC. 2012 GCAAR President Bonnie Casper had fun contributing to both Rebuilding Together® projects in DC and Montgomery County, while DCAR and GCAAR Past Presidents Nathan Carnes and Adrian Hunnings had a great time chopping down vines at the DC project. We even put a couple more Board Members to work, namely Peg Mancuso, David Bediz, and Greg Ford, with 2012 President-Elect Michael McGreevy “supervising” both projects. Thank you to our YPNers, led by 2012 Chair Colin Johnson, who rocked it out at the DC site, and brought snacks, and our volunteers from So What Else, Inc. who rounded up a great group of youths to volunteer at the MC project. The Rebuilding Together® projects are amazing and lifechanging experiences for both the homeowners and the volunteers, as our DC homeowner fondly recalled being helped by GCAAR Christmas-in-April volunteers many years ago. This year’s Rebuilding Together® volunteers were led by 2012 GCAAR Cares Committee Chair Sharon Rogers. Many thanks to our GCAAR Community Service Committee and Staff who coordinate these projects every year and continue to make it a memorable occasion for all involved. Most importantly, we thank each of you for coming out to support GCAAR Cares with 2012 Rebuilding Together®!

Thank you DC Rebuilding Together® team: Lyn Alexander, House Captain John Clapp, Co-Captain Jason Alexander, Ambassador

Thank you Montgomery County Rebuilding Together® team: Margie McNabb, House Captain Linda Tomlinson, Co-Captain Ntumba Makenda, Ambassador

Washington, DC 2012 Rebuilding Together® Washington, DC volunteers

Montgomery County 2012 Rebuilding Together® Montgomery County volunteers

Save the Date! October 18 REALTOR®Fest Marriott Wardman Park Washington, DC

Special Round of Applause to our Contractors: Bob Corbey, GCAAR Member Gerry Herron, Painting Plus, Inc. Mike Holmes, Holmes Handyman Service

Stay Tuned for Details!

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The 3.8% Tax Is Not a Real Estate Transfer Tax continued from page 1 Importantly, the $250,000 (for individuals) and $500,000 (for married couples) capital gain exclusion on the sale of a principal residence remains in place. So, if you’re a married household that sold a house for a $500,000 gain (that’s gain, not sale proceeds), that amount remains excluded from your income calculation. Let’s take a look at a married couple that has $325,000 in adjusted gross income (AGI), plus $525,000 in capital gains from the sale of their house. This household would be considered upper-income by most standards. Not only is their income relatively high, at $325,000 (adjusted gross income, or AGI), but they’re receiving a $525,000 gain on their house sale. Presumably, they bought their house years ago and it’s appreciated over the years, so upon selling it, their gain is a relatively high $525,000. For this household, only $25,000 in investment income would be subject to the 3.8 percent tax. That would amount to $950. That’s because it’s the $25,000 over the $500,000 capital gains exclusion that’s taxable. Before they would know that, though, they would have to do a calculation that involves their adjusted gross income. They would have to add their capital gain of $25,000 to the amount of their income above the $250,000 income trigger (for married couples). Since their income is $325,000, they would add the $25,000 to $75,000 ($325,000 – $250,000), which would equal $100,000. Then they would compare the $25,000 to that $100,000, and apply the tax to the lesser of the two, which is the $25,000. Thus, $25,000 x 3.8% = $950.

GCAAR Members Complete MAR Leadership Academy Samar Caverly of ReMax and LaCrisha Butler of Coldwell Banker recently completed the Maryland Association of REALTORS® (MAR) Leadership Academy. Samar and LaCrisha were two of sixteen graduates from the twelfth annual Leadership Academy recently honored at ceremonies held in Annapolis. The Leadership Academy offers an intensive curriculum designed around developing skills in leadership, communications, strategic planning, legislative and government affairs, and community involvement. Classes are conducted over seven months and stress the

MAR Leadership Academy Graduate Samar Caverly with Bill Armstrong, Steve Brown, and Pat Terrill

2012 May - June

So, you have a household that had income of $850,000 for the year, and its tax on investment equaled $950. This is a simplification. Other tax issues could come into play. But it shows that the tax applies to just a portion of investment income for certain upper-income households and that the capital gains exclusion remains untouched. Nobody likes taxes, and this tax was inserted into the legislation at the 11th hour as a “pay-for,” that is, as a revenue generator to help offset some of the costs of the reform. It’s expected to generate $325 billion over eight years. NAR has prepared a brochure that looks at how the tax might apply under eight income scenarios: 1) sale of principal residence (which we just looked at), 2) sale of a non-real estate asset, 3) gain, interest, and dividend from securities, 4) real estate investment income, 5) rental income as sole source of earnings, 6) sale of second home with no rental use, 7) sale of inherited investment property, and 8) purchase and sale of investment property. You can download the brochure for free. It’s written in plain language and I think you’ll find it organized efficiently, so you can see at a glance the potential considerations for the different scenarios. Of course, it’s just guidance: each household’s situation will be different, so you would want to suggest to your customers and clients that they consult with a tax advisor to make sure the tax is applied correctly in their case. Scan the QR Code to download the brochure. http://www.ksefocus.com/billdatabase/ clientfiles/172/8/1437.pdf

value of professional and personal commitment to business, charitable, and civic endeavors. The MAR Leadership Academy was formed by REALTORS® who understand the important role they play in their community and the need to enhance the leadership skills, knowledge, and competencies of fellow REALTORS® interested in making a difference in their personal lives and in their communities. Honored guests were William J. Armstrong, III, 2012 Treasurer of the National Association of REALTORS® (NAR) and NAR 1st Vice President Steve Brown who addressed the graduates and guests. “Being comfortable with and knowing yourself will define you as a leader,” Brown emphasized.

L-R, NAR Treasurer Bill Armstrong, MAR Leadership Academy Graduate LaCrisha Butler, NAR 1st Vice President Steve Brown, and 2012 MAR President Pat Terrill

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2012 May - June

Montgomery County Market Report continued from page 11

Mortgage Interest Rates Freddie Mac’s first May report showed that average mortgage interest rates have dropped about 5 to 10 basis points from the beginning of the year. In this survey, the 30-year fixed-rate averaged 3.84%, while 1-year adjustables (ARMs) averaged 2.70%. Fifteen-year loans came in at 3.07% and 5/1-yr. ARMs were very affordable at 2.85%. These are some of the lowest mortgage rates ever seen in our economy. Purchase mortgage demand should be higher, but the problem seems to be homebuyer fear of falling prices as well as difficulty in qualifying for credit. This is an incredible time to get a mortgage, but many of the buyers are investors looking for bargain basement prices with cash deals. Consumer Prices and Energy Costs The Consumer price index rose 0.3 percent in March, equivalent to an annualized rate of 3.6% price inflation. However, over the past 12 months, the index increased only 2.7%. Energy was the largest source of increases, but there are recent indications that gasoline prices should be easing. Accordingly, when food and energy costs are taken out of the index, the monthly rate of increase was only 0.2 percent or 2.4% annualized. Nevertheless, the recent spikes in gasoline prices caused analysts great

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worry about economic growth. Looking at the key components of the March index over the previous year: food prices rose 3.3%; housing shelter costs (mostly rents) edged up 2.1%; but, apparel prices bumped 4.9%. On the bright side, medical care services rose just 3.5%, and medical care commodities were up only 3.3% from March 2011. On the other hand, energy commodities jumped 8.7% -- gasoline was up 9% and fuel oil increased 5.3%. However, energy services (electricity and natural gas) actually decreased 1.8%, due to a 9% fall in natural gas prices. The Bottom Line Montgomery County’s real estate markets this year are continuing the long, hard slog. Overall, real estate should be better in 2012 than in 2011, as inventory is down and the local economy is stable. However, we will have to see how future government budgets impact the local market area. Not much will be decided until after the election and even then we may see gridlock for quite a while. We must keep in mind that we have just been through the worst economic crisis since the Great Depression, and getting out of these messes takes about a decade. While the County is one of the highest income areas in the country, it will take time to get back to a point where sales and prices are rising together at a reasonable pace. So we can expect fits and starts in markets for the near to intermediate future. All I can advise is keep hanging in there.

NVAR Affordable Housing Summit The Northern Virginia Association of REALTORS® (NVAR) benefitted from the expertise of DCAR’s Past President Brenda Small and GCAAR Board Member Mynor Herrera at NVAR’s Affordable Housing Summit on March 21. Brenda and Mynor were part of a panel that offered affordable housing resources for residents of Northern Virginia, Montgomery County, MD, and the District of Columbia.

Mynor Herrera and Brenda Small

Brenda and Mynor with other panel members

members who take the most active role are rewarded with resources that can continue to strengthen their own business.

How it Works

Every two weeks a new MVP offer will be posted. All you have to do is complete the specified action within the two-week timeframe. After you complete the action, you’ll receive instructions and a code via e-mail to redeem your reward. That’s it. It doesn’t get simpler than that.

NAR’s New MVP Program - Earn Rewards for Taking Action The NATIONAL ASSOCIATION OF REALTORS® created the Member Value Plus (MVP) Program to encourage members to take actions that will benefit NAR and its members, as well as to reward members for being an active participant in their Association. Active involvement is the best way to maximize your membership, as well as the best way to make the Association and all our members more successful. Those

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What You Can Expect to Receive

All across the Association, groups have identified actions and provided valuable rewards for inclusion in the MVP program, ranging from free e-products to discounts on NAR event registration, and many other valuable rewards. No matter what the reward is, the one thing you can count on them all having in common is the incredible value they bring to you as a member. Scan the QR code to see what actions are available!

You Could Have a Byline in the Next Issue of Capital Area REALTOR®

If you would like to write a story for an issue of Capital Areal REALTOR®, we would like to hear from you. We are looking for content that would be relevant to the business, timely, and interesting to our members. GCAAR would reserve the right to edit any content before final printing, and stories that discuss specific business transactions or competitive information would not be allowed. If you think you might want to put pen to paper, send an e-mail to communications@gcaar.com. We hope to hear from you!

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June – August Education & Event Schedule Unless otherwise noted, all classes listed will be held at the GCAAR Conference Center, 8757 Georgia Ave., Suite 600, Silver Spring, MD. Please check our website at www.gcaar.com for more updates and additions.

June 27, 2012 Working with Investors CEU: 1.5 hours DC & MD (elective) credit Instructor: Lisa Williams Time: 9:30 a.m. to 11:00 a.m.

July 18, 2012 (con’t) Condo Underwriting Update CEU: 1.5 hours DC & MD (elective) credit Instructor: Brian Martucci Time: 3:30 a.m. - 5:00 p.m.

August 6, 2012 Reverse Mortgage CEU: 1.5 hours DC & MD (elective) credit Instructor: Eric Rittmeyer Time: 11:00 a.m. to 12:30 p.m.

June 28, 2012 DCHFA and DHCD Mortgage and Assistance Programs CEU: 3 hours DC (elective) credit Instructors: Carissa Stanley and Janice Blassingame Time: 9:30 a.m. to 12:30 p.m.

July 19, 2012 Non-Conforming Financing CEU: 3 hours DC & MD (elective) credit Instructor: Jim Semeyn Time: 9:30 a.m. - 12:30 p.m.

August 9, 2012 Short Sales CEU: 3 hours DC, MD & VA (elective) credit Instructor: Everett Sands Time: 9:30 a.m. - 12:30 p.m.

Advancing and Protecting Your Client CEU: 3 hours DC & MD (elective) credit Instructor: Ann Johnston, Esq. Time: 1:30 p.m. - 4:30 p.m. July 9, 2012 Reverse Mortgage CEU: 1.5 hours DC & MD (elective) credit Instructor: Eric Rittmeyer Time: 11:00 a.m. to 12:30 p.m. July 16, 2012 MREC-Agency Residential CEU: 3 hours MD (required) & DC (elective) credit Instructor: Al Monshower, Esq. Time: 9:30 a.m. - 12:30 p.m. Property Conditions Disclosure CEU: 3 hours MD (required) & DC (elective) credit Instructor: Al Monshower, Esq. Time: 1:30 p.m. - 4:30 p.m. July 18, 2012 *500 New Jersey Avenue, NW, 2nd Floor* DCHFA and DHCD Mortgage and Assistance Programs CEU: 3 hours DC (elective) credit Instructors: Carissa Stanley and Janice Blassingame Time: 9:30 a.m. to 12:30 p.m. Working with Investors CEU: 1.5 hours DC & MD (elective) credit Instructor: Lisa Williams Time: 1:30 p.m. to 3:00 p.m.

Advanced FHA CEU: 3 hours DC & MD (elective) credit Instructor: Jim Semeyn Time: 1:30 p.m. - 4:30 p.m. July 20, 2012 New Member Orientation CEU: No CEUs Instructor: Prabhjit Singh Time: 11:00 a.m. - 12:30 p.m. (mandatory for new members) Maryland Codes of Ethics & Predatory Lending CEU: 3 hours MD (required) & 3 hours DC (elective) Instructor: Jill Michaels, Esq. Time: 1:30 p.m. - 4:30 p.m.

Foreclosures CEU: 3 hours DC, MD & VA (elective) credit Instructor: Everett Sands Time: 1:30 p.m. - 4:30 p.m. August 16, 2012 MREC-Broker Supervision CEU: 3 hours MD (required) & 3 hours DC (elective) Instructor: Al Monshower, Esq. Time: 9:30 a.m. - 12:30 p.m. MREC- Agency Residential CEU: 3 hours DC (required) credit Instructor: Al Monshower, Esq. Time: 1:30 p.m. - 4:30 p.m.

July 25, 2012 Foreclosures CEU: 3 hours DC, MD & VA (elective) credit Instructor: Everett Sands Time: 9:30 a.m. - 12:30 p.m.

August 20, 2012 New Member Orientation CEU: No CEUs Instructor: Prabhjit Singh Time: 11:00 a.m. - 12:30 p.m. (mandatory for new members)

Short Sales CEU: 3 hours DC, MD & VA (elective) credit Instructor: Everett Sands Time: 1:30 p.m. - 4:30 p.m.

Maryland Codes of Ethics & Predatory Lending CEU: 3 hours MD (required) & 3 hours DC (elective) Instructor: Jill Michaels, Esq. Time: 1:30 p.m. - 4:30 p.m.

August 1, 2012 203K CEU: 3 hours DC, MD & VA (elective) credit Instructor: Jim Semeyn Time: 9:30 a.m. - 12:30 p.m. Creative Financing CEU: 3 hours DC & MD (elective) credit Instructor: Jim Semeyn Time: 1:30 p.m. - 4:30 p.m.

August 25, 2012 Affiliate Orientation Time: 11:00 a.m. – 12:30 p.m.

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2012 May - June

Capital Area REALTOR®

P ublic P olicy REAL Advocacy for REALTORS®

On Capitol Hill NAR is working for you! Stay up to date on NAR’s political activity and access all CALLS FOR ACTION through NAR’s REALTOR® Action Center at http://www.realtoractioncenter.com

REALTOR® Rally a Success!

Over 13,000 attended NAR’s first REALTOR® Rally in Washington, DC on Thursday, May 17. REALTORS®, family and friends from all over the United States marched out onto the Washington Monument with one important message, “Homeownership Matters!” Check out the videos and fancam! http://tools.realtoractioncenter.com/virtualmap/

Maryland Public Policy Update For additional information or to submit comments, please contact Meredith Weisel, Esq. at meredith@wgrelations.com or Katalin Peter, Esq. at kpeter@gcaar.com.

Maryland General Assembly

The legislative session began on January 11, 2012 and finished on April 9, 2012. For more information, including a detailed summary of pertinent 2012 real estate legislation that MAR’s Legislative Committee has reviewed, please visit the “Legislative” section at www.mdrealtor.org.

MAR 2012 Legislative Priorities Mortgage Interest Deduction MAR opposed any reduction in the mortgage interest deduction (MID). Under the Governor’s Budget Reconciliation Bill, itemized deductions would have been reduced by 10-20 percent for tax filers with an adjusted gross income exceeding $100,000. The mortgage interest deduction and the deductibility of state and local property taxes account for almost 70% of the itemized tax deductions taken by Maryland filers. http://mlis.state.md.us/2012rs/billfile/sb0152.htm STATUS: Itemized deductions, including MID and property taxes, were not changed in the budget reconciliation bill. However, because the Legislature adjourned without passing a revenue measure for the budget, it is likely that a special session will be called before July 1 to complete action on a revenue bill. While unlikely, it is possible that the proposal to reduce deductions could be revived. Tax on Property Management Services Legislation was introduced to place a sales tax on property management and a number of other services. MAR opposed this legislation. http://mlis.state.md.us/2012rs/billfile/hb1051.htm

STATUS: This legislation did not pass. Real Estate Brokerage Reform Legislation making far reaching changes to real estate practice in Maryland was also considered this year. The legislation would have eliminated exclusive right to sell contracts in Maryland (the basis for the MLS), and would have limited brokerage agreements to 90 days, among other provisions. MAR opposed this legislation. http://mlis.state.md.us/2012rs/billfile/sb0538.htm STATUS: This legislation did not pass. Real Estate Agency Legislation Legislation was introduced to clarify and redefine some of the agency categories now used in Maryland, and change some of the disclosure language in the agency disclosure form. MAR did not support this legislation. http://mlis.state.md.us/2012rs/billfile/hb0644.htm STATUS: This legislation did not pass. Sustainable Growth The Governor proposed legislation to restrict new subdivision development on septic systems throughout Maryland. The legislation would have given the Maryland Department of Environment (MDE) and the Maryland Department of Planning (MDP) authority to approve creation of zoning overlays where septic subdivisions could and could not be developed. Although it became clear that there were not enough votes to defeat the bill, MAR joined a coalition of concerned groups to remove state approval for the local growth tiers. http://mlis.state.md.us/2012rs/billfile/sb0236.htm STATUS: State approval authority was removed from the bill. As passed, the legislation will require local governments to define and develop growth tiers that will direct where major subdivisions using septic systems may be located. Septic System Grants and Bay Restoration Fund Under the Bay Restoration Fund, MDE provides 100% cost-differential grants for homeowners with failing systems living in Maryland’s Critical Area. The grants cover the cost of Best Available Technology (BAT) systems that have enhanced nitrogen removal technology. Authority for the 100% grants terminates at the end of 2012, and MAR sought legislation (http://mlis.state.md.us/2012rs/billfile/hb1333.htm) to continue the grant program with a more generous grant formula than MDE now provides. In addition, legislation was introduced to increase the Bay Fund fees. MAR opposed a consumption based fee, and preferred the recommendation of the Task Force to simply double the fee. http://mlis.state.md.us/2012rs/billfile/hb0446.htm STATUS: Mandatory septic grant legislation did not pass. The Bay Restoration Fee was doubled from $30 a year to $60 a year (without a consumption based formula). PlanMaryland The Maryland Department of Planning (MDP) submitted a statewide development plan called PlanMaryland before the Legislature convened in January. MAR had submitted two comment letters expressing concern that PlanMaryland could override local planning decisions by

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allowing the state to deny permits and funding to local development projects. Other groups, including the Maryland Association of Counties (MACO), shared those concerns. STATUS: MAR supported a MACO drafted bill to clarify that PlanMaryland cannot be used to deny permits and statutorily required funding to local governments. The legislation passed. http://mlis.state.md.us/2012rs/billfile/hb1201.htm Stormwater Management Fee Legislation was introduced to require local county governments to impose a stormwater management fee on all residential and commercial property. MAR opposed the bill, because counties already have authority to impose stormwater fees, and because many counties were already considering such actions given stormwater requirements imposed by the Environmental Protection Agency. http://mlis.state.md.us/2012rs/billfile/hb0987.htm STATUS: Legislation passed requiring the ten Maryland counties subject to EPA stormwater requirements to impose a stormwater fee. The legislation gives local government discretion in creating the fee. Real Estate Commission Regulatory Authority Every ten years, the Real Estate Commission’s (REC) operations are reviewed and a written report is issued. The report is the basis for legislation which extends the REC’s regulatory authority. Without passage, the REC would no longer be able to function and issue real estate licenses. MAR supported reauthorization of the Real Estate Commission, but requested that the guarantee fund cap remain at $25,000. http://mlis.state.md.us/2012rs/billfile/sb0134.htm STATUS: The REC’s reauthorization passed with an increase in the guarantee fund cap to $50,000. The Legislature increased the cap because it has been over 20 years since any change was made. Real Estate Commission Continuing Education The Real Estate Commission requested legislation to allow legal and legislative update classes more flexibility in the material presented to licensees, including court cases and legal trends. MAR supported the bill, which also allows electronic transmission of continuing education class certificates. http://mlis.state.md.us/2012rs/billfile/sb0145.htm STATUS: This legislation passed. Lead Paint Just before the Legislature convened, the Maryland Court of Appeals overturned the property owner liability protections in the Reduction of Lead Risk in Housing law. As a result, property owners and property managers were subject to uncapped liability for any injuries resulting from elevated blood lead levels. Numerous bills were introduced to address this problem. In addition, a Lead Work Group met over the summer to examine whether sellers of owner-occupied housing should be required to conduct lead dust tests. Although the work group did not recommend point of sale dust tests for owner-occupied property, legislation was introduced which would have required such tests. STATUS: Legislation passed creating liability protections for property owners; increasing the registration fees from $15-$30 for rental properties; requiring 1950-1978 rental properties to participate in the Lead Poisoning Prevention Program (by 2015); and giving MDE authority to mandate clearance tests for any properties subject to the EPA Renovation, Repair and Painting (RRP) Rule. Mandatory dust tests for owner occupied property sales did not pass. http://mlis.state.md.us/2012rs/billfile/hb0644.htm Homestead Tax Disclosure Real Estate Legislation was introduced that required real estate agents and brokers

2012 May - June

to disclose the Homestead Tax Credit to homebuyers for each property subject to the credit. The legislation also included a penalty for property owners who wrongly claimed the credit. http://mlis.state.md.us/2012rs/billfile/hb1081.htm STATUS: Legislation passed with a penalty for homeowners who willfully misrepresent facts in order to claim the credit. The legislation does not require real estate agents to disclose the credit. Foreclosures A Task Force met last summer to discuss several issues related to foreclosures, including changes to the mediation program, property registration, and the creation of a safe harbor for licensed real estate agents who assist clients applying for short sale approvals. Legislation was introduced to require only mediation changes and the property registry. STATUS: Legislation passed that creates a process to allow preforeclosure (http://mlis.state.md.us/2012rs/billfile/hb1374.htm) mediation, and a statewide registry of foreclosed properties. http://mlis.state.md.us/2012rs/billfile/hb1373.htm Ground Rents The Maryland Court of Appeals also ruled that a state law penalizing ground rent owners was unconstitutional. That law required ground rent owners to register the ground rent with the State Department of Assessments and Taxation (SDAT) or forfeit fee simple title. The Legislature considered legislation to create a more appropriate penalty for failing to register a ground rent with SDAT. http://mlis.state.md.us/2012rs/billfile/hb0177.htm STATUS: Legislation passed that penalizes ground rent owners who fail to register a ground rent by prohibiting them from filing a lien or collecting rent. Interest Rate on Security Deposits Currently, property owners are required to return a security deposit to a tenant with at least a 3% annual interest rate. Unfortunately, most savings and checking accounts are well below 3% and have been for a long time. MAR supported legislation to require a security deposit to be returned to a tenant with the higher of a 1.5% flat rate, or a rate comparable to the U.S. Treasury Daily Yield Curve Rate as measured by the first of the year. http://mlis.state.md.us/2012rs/billfile/hb0022.htm STATUS: This legislation did not pass.

Special Session

On May 14, 2012, Governor O’Malley called legislators back to Annapolis for a special session specifically to address the budget. The General Assembly convened on April 9 without passing a budget package so under Maryland law a what was being called “doomsday” budget of cuts to local governments and other services would go into effect July 1, 2012. But instead Maryland’s General Assembly on Wednesday, May 16, passed the state’s first income-tax hike in five years, targeting six-figure earners. Under the $260 million package, income tax rates for most Marylanders who report annual income above $100,000 will increase a quarter percentage. For joint filers, the new, higher rates will kick in at combined taxable income of $150,000.

Montgomery County Legislation

For the most up to date information on Montgomery County legislation, visit the County’s website at www.montgomerycountymd.gov. For Zoning Text Amendments (ZTA), refer to the following legend: http://www.montgomeryplanning.org/development/about/ zoning_legend.shtm continued on page 20

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Montgomery County Legislation, continued from page 19 COUNTY EXECUTIVE’S RECOMMENDED FY13 OPERATING BUDGET AND FY13-18 PUBLIC SERVICES PROGRAM County Executive’s Message: http://www.montgomerycountymd.gov/content/omb/FY13/ psprec/pdf/message.pdf Budget Highlights: http://www.montgomerycountymd.gov/content/omb/FY13/ psprec/pdf/psp-highlights.pdf For Zoning Text Amendments, please see zoning legend for reference: http://www.montgomeryplanning.org/development/about/ zoning_legend.shtm Bill 14-12, Economic Development Fund Amendments Summary: Bill 14-12, Economic Development Fund Amendments, sponsored by Council President Berliner, and Council members Riemer, Ervin, EIrich, Leventhal and Navarro, was introduced on March 20, 2012. A Planning, Housing and Economic Development Committee worksession will be scheduled at a later date. Bill 14-12 would require the Executive to propose and update an economic development strategic plan, subject to approval by the Council. The success or progress of the strategic plan must be measurable and include measures to address: (1) job creation; (2) private sector compensation and benefits; (3) target industries; (4) target geographic areas; (5) workforce education and training; (6) growth in tax base; (7) economic opportunity for residents; (8) encouragement of entrepreneurs and small business; (9) land use; and (10) other actions necessary to promote economic development in the County. The Bill would also amend the Economic Development Fund (EDF) law by establishing criteria for offers of assistance from the EDF, modify the time and content of the notice the Executive must give to the Council before making a tentative offer of more than $100,000, and require Council approval of a tentative offer of more than $500,000. Full Text: http://www.montgomerycountymd.gov/content/council/pdf/ bill/2012/Packets/20120410_14.pdf Zoning Text Amendment No.: 12-01 Concerning: Commercial zonesLarge Retail Uses Timeline: Introduced by Council President Berliner and Valerie Ervin Planning Board discussion March 8 Hearing March 20 (GCAAR testified) Adopted: April 10, 2012 Effective: April 30, 2012 Summary: An amendment to the Montgomery County Zoning Ordinance to establish additional requirements in the C-4 zone for retail uses of a certain size, located within one-half mile of a metro station and generally providing standards for the development of certain size retail uses. Full Text: http://www.montgomerycountymd.gov/content/council/pdf/ zta/2012/zta_12-01.pdf Planning Board Recommendation: http://www.montgomeryplanningboard.org/agenda/2012/ documents/20120308_ZTA12_01and12_02_000.pdf Zoning Text Amendment No: 12-05 Commercial/Residential ZonesGrandfathering Summary: An amendment to the Montgomery County Zoning Ordinance to: - apply the grandfathering provisions of CR zones to CRT and CRN zones; and

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- revise the grandfathering provision for projects with a previously approved special exception. Full Text: http://www.montgomerycountymd.gov/content/council/pdf/ zta/2012/zta_12-05.pdf ZTA 12-06 Commercial/Residential Zones-Transit Proximity Definition Summary: AN AMENDMENT to the Montgomery County Zoning Ordinance to: - amend the definition of transit proximity for CR, CRN, and CRT zones. Transit proximity: Transit proximity is categorized in two levels: proximity to an existing or master planned Metrorail Station; 2. proximity to an existing or master planned station or stop along a rail or bus line with a dedicated, fixed path; excluding a site that is within one mile of a MARC station and that is more than one mile from any other transit station serving a dedicated, fixed path transit facility. All distances for transit proximity are measured from the nearest transit station entrance or bus stop entrance. Full Text: http://montgomerycountymd.granicus.com/MetaViewer. php?view_id=6&event_id=419&meta_id=30684 For additional information please contact Meredith Weisel, Esq. at meredith@wgrelations.com or Katalin Peter, Esq. at kpeter@gcaar.com.

DC Public Policy Update

For additional information or to submit comments, please contact Ed Krauze, Esq. at ekrauze@gcaar. com or Katalin Peter, Esq. at kpeter@gcaar.com.

New DC Lead Disclosure Form The District of Columbia Lead-Hazard Prevention and Elimination Act, D.C. Code § 8-231.01 (2011), requires an owner of residential property constructed before March 1, 1978, to disclose the information contained in this disclosure document to prospective purchasers and prospective tenants before any change in occupancy or contract for possession is executed. Owners are required to disclose specific information which they know or reasonably should know about the presence of lead-based paint and/or lead-based paint hazards in the property, as well as and any pending actions ordered under the Act. Please note that the form indicates that it may be completed by the owner or her/his Authorized Owners Agent. (The real estate agent should not complete the form.) This form was created by the District government and is required to be used in addition to and not in lieu of the Federal Lead Paint Disclosure.

Background During the debate surrounding this legislation GCAAR and DCAR successfully advocated against Mandatory Point-of-Sale Inspections. The District’s Department of the Environment (DDOE) has acknowledged that not all Sales require Lead Paint Inspections and/or remediation. However, the language in the Disclosure Forms and in the Instructions Sheet is not completely clear on exactly which homes fall within which respective paragraphs on the Disclosure Forms. DDOE is in the process of drafting regulations for the implementation of this law. The proposed regulations are expected to be published for comment in the next 45-60 days. GCAAR and DCAR have been and will continue to reach out and work with the DDOE regulators. We will update you with any new information when it becomes available. In the meantime, do not hesitate to contact your broker and/or your attorney for guidance, if you are concerned about a particular transaction. These forms are available online along with other forms in the GCAAR website library and are listed as Form number 917-Lead Paint-D.C. Lead Disclosure Form.

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REALTOR® Rally

Additional images are on page 22.

Ready to board the GCAAR bus

Thank You 2012 RPAC Investors! Golden ‘R’

Thomas Carruthers III Bonnie Casper GCAAR Carole Maclure Dale Ross

Crystal ‘R’

Fred Kendrick Jill Pogach Michaels Michael Moran

Rally bus riders!

Sterling ‘R’ James Coley, Jr. Suzanne Des Marais Edward Downs Brandon Green Harold Huggins Adrian Hunnings Ellen Katz Tim Knobloch Ed Krauze Dana Landry Alana Lasover Bo Menkiti

Shelly Murray Frank Pietranton, Jr. Scott Reiter Randy Rothstein Joy Siegel Brenda Small Frank Snodgrass Mo Snowden Christopher Suranna Patrick Tangney Patrick Weed Edward Wood

Capital Club Wendy Banner David Bediz Elizabeth Blakeslee John Bragale Jan Brito Nathan Carnes Lori Connor Christopher Darby Joe Detrick Jane Fairweather Gregory Ford Jeffrey Ganz Ricki Gerger Carl Gewirz Sally Hamidi Mynor Herrera Diana Keeling Elley Kott Judith Levin Kymber Lovett-Menkiti Donald Maclure

Katie Maclure Yolanda Mamone Peg Mancuso Dale Mattison Kevin McDuffie Michael McGreevy Dennis Melby Thomas Muldoon Vittorio Muzzatti John Nalls Ruth Papuchis Amy Ritsko-Warren Bonnie Roberts-Burke Raymond Ruppert Jr. Susan Sanford Jason Sherman Prabhjit Singh Colleen Smyth Cogan Glen Sutcliffe Rachel Valentino Kirsten Williams

DC delegation makes its statement

Rally goers were well equipped with sunscreen and lip balm from GCAAR and DCAR

Ed Downs at NAR interview

Maryland Congressman Steny Hoyer greets GCAAR President Bonnie Casper and MAR Treasurer Carole Maclure

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Q uiz Listing a Property If listing is the key to real estate success, you better be good at it. Find out how you stack up. 1. When you encounter objections, what should you not do?

a. Have answers ready to address the most common objections. b. Arm yourself with statistics and illustrate politely why sellers’ c. perceptions are inaccurate. d. Argue each objection point-by-point and prove your prospect wrong. e. Tell the truth in an attractive way.

2. When is it appropriate to call a FSBO?

a. When you are interested in buying the home b. When you have a buyer interested in the property c. A & B d. None of the above

3. Which items should a prelisting package not include:

a. A brochure that outlines your background, how long you’ve been in the industry, and your business philosophy. b. Letters from prominent people praising your services. c. Information about your Web site. d. Your full PowerPoint presentation that prospects can review before your arrival.

4. When pricing a home, you shouldn’t consider:

a. The property’s condition. b. How much you need to make this month and how this sale will affect your bottom line. c. The market conditions, whether you’re in a hot or slow market, and if values are rising or falling. d. How the property stacks up against others currently on the market.

5. You should consider cutting your commission when:

a. You know the sellers are in a financial bind. b. Never. You work hard, bring an expertise to the job, and de serve to get paid what you’re worth. c. Sellers threaten to sell the property themselves if you won’t cut your commission by 1 percent. d. Sellers show you that your competition has already agreed— in writing—to reduce their commission.

6 . As an agent of the seller you must:

a. Act in the best interest of the seller. b. Disclose all relevant information on the sale to the seller. c. Negotiate in good faith on the sellers’ behalf. d. All of the above.

7 . What’s the best way to build rapport during a listing presentation? a. Ask a great many personal questions of the prospects. b. Mirror the demeanor of the prospects and adapt to their personalities. c. Invite them out for a meal. d. Repeat back everything the prospects say, exactly as they say it.

8 . A fee-for-service arrangement can include:

a. Charging an hourly fee to conduct an open house. b. Charging for a CMA. c. Charging for a consultation about how sellers can remodel or refresh their home to prepare it for sale. d. All of the above.

REALTOR® Rally Even GCAAR Board Member David Bediz’s pups showed their support

GCAAR Board Member Greg Ford and 2008 GCAAR President Dennis Melby enjoy the day’s events

GCAAR members “Q” Armstrong, Karen Thomas and Ingrid Dallaire Maryland flags flying high

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Quiz Answers 1. When you encounter objections, what should you not do? Correct Answer: C Argue each objection point-by-point and prove your prospect wrong. You want to politely counter sellers’ objections with facts, not get into a combat situation. 2. When is it appropriate to call a FSBO? Correct Answer: A & B There are two instances when a real estate professional would call a FSBO seller. The first would be a real estate professional who is interested in buying the FSBO listing, and the second would be a buyer's representative who believes his/ her client might be interested in a FSBO property. A buyer's representative can contact a FSBO owner whose number is listed in the National Do-Not-Call Registry about a client's potential interest in the property, but the buyer's representative can only discuss his/her client's interest in the property and not use a purported client's interest as a way to also discuss the possibility of the FSBO owner listing his/her property with the buyer's representative. 3. Which items should a prelisting package not include: Correct Answer D: Your full PowerPoint presentation that prospects can review before your arrival. You want your prelisting package to give prospects an introduction to your background and services. Save the full presentation for the face-to-face appointment when you can walk prospects through your marketing plan step-by-step.

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4. When pricing a home, you shouldn’t consider: Correct Answer B: How much you need to make this month and how this sale will affect your bottom line. The market and the house’s condition are the main factors that affect prices. 5. You should consider cutting your commission when: Correct Answer B: Never. You work hard, bring an expertise to the job, and deserve to get paid what you’re worth. You work hard for your money. You should be able to make a living and charge what you’re worth. 6 . As an agent of the seller you must: Correct Answer D: All of the above. All of these responsibilities, plus the timely transfer of money and the requirement of due diligence are part of an agent’s responsibilities. 7 . What’s the best way to build rapport during a listing presentation? Correct Answer B: Mirror the demeanor of the prospects and adapt to their personalities. A key to establishing rapport with anyone is to put them at ease by creating a comfortable environment with similar demeanor. 8 . A fee-for-service arrangement can include: Correct Answer D: All of the above. If you want to offer a fee-for-service arrangement, break down the steps of the marketing and selling process and assign an appropriate fee for each service you’re willing to provide to sellers.

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