VOLUME XLV NUmber 4
The Maryland Association of REaltors®
June/July 2011
www.mdrealtor.org
The Voice for Real Estate in Maryland ®
Take a ‘walk around’ p 32
p 32
p 3
September 12-14, 2011 Register Online or See Registration Material on page 32
Consumer Website: WWW.MARYLANDHOMEOWNERSHIP.COM
Also In This Issue: p 8
p 14
RPAC of Maryland 2010 Leaders of the PAC
Checkers or Wreckers 2011 Legislative Review
p 20
Economic Forecast
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June is Homeownership Month Cathy A. Werner
HomeOwnership Matters N O T J U S T A ‘ C AT C H Y P H R A S E ’ Last week, over 8,000 members of the National Association of REALTORS® from around the country were in Washington to meet with their states’ Congressional Delegations. Their message was simple: “Don’t let homeownership become out of reach for future generations.” Maryland REALTORS® were among them. We urged our members of Congress to remember some key points as they make decisions that threaten homeownership: •
•
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aintain the mortgage interest deduction (MID). Any change to this M deduction will slow the housing recovery in Maryland, where homeowners are the highest users of MID in the country. We urged them to cosponsor H.Res 25 to keep the MID. llow for reasonable down payments. The proposed 20% regulatory A requirement for “qualified residential mortgages” will subject the vast majority of credit worthy borrowers to higher rates and other hurdles. Congress must ensure that home mortgage loans are available to credit worthy consumers in every community. Increasing down payments only puts homeownership more ‘out of reach’ for many Maryland families. Preserve the 30-year fixed rate home mortgage. The Federal government must have a role in the secondary mortgage market. If it does not, the 30-year fixed rate mortgage will be a thing of the past, and mortgage rates with be much higher.
YOU CAN HELP CARRY THE MESSAGE I know you as a practitioner are concerned about the future of real estate and homeownership. Here are some simple steps that you can do right now to carry the message that Maryland Homeownership Matters. Numbers do make a difference—respond to the calls to action by your state, local, and national associations or your broker. OPEN THE EMAIL AND RESPOND! It takes less than a minute and it really does have an impact. Directly contact your Congressional representatives at all levels on issues important to maintaining and protecting private property issues. Educate your clients and those in your spheres of influence. Tell them how REALTORS® are actively trying to protect their rights and interests. Encourage them to ask their Member of Congress and our Senators to support homeownership. This is our industry and these are our communities. REALTORS® are the only voice for homeowners and homeownership. If you care about your livelihood and the interests of your clients, now is the time to take action. Learn more—log on to www.mdrealtor.org and go to Government Affairs News.
M A R Y L A N D R E A L T O R ® June/July 2011
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June / July 2011
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F e atu r e s 8 leaders of the pac: 2010 Edition REALTORS® Political Action Committee of Maryland 14 Checkers or wreckers MAR 2011 Legislative Review 20 Economic Forecast There’s Still Plenty of Reason for Concern, but the Reasons Have Changed 27 2011 annual conference and tradeshow MAR Rally for Success 2011 32 take a ‘walk around’ marylandhomeownership.com
table of contents D e pa r tm e n t s
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3 HOMEOWNERSHIP MATTERS – NOT JUST A ‘CATCHY PHRASE’
6 MAR 2011 LEADERSHIP TEAM
34 FROM THE HOTLINE Independent Contractors in Real Estate – Know the Rules 36 Regulation News Final Continuing Education Regulations 37 MARYLAND REAL ESTATE COMMISSION NEWS Agency Intricacies 38 MRIS UPDATE Market Your Way with Media Connect
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M A R Y L A N D R E A L T O R ® June/July 2011
40 snippets & Industry tips 42 RESIDENTIAL SALES Maryland’s Housing Market Limps into Spring 46 Commercial Connection Maryland Green Building Initiatives on the Rise
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2011 Maryland Association of REALTORS® Leadership Team
Maryland Association of REALTORS® 200 Harry S Truman Parkway | Suite 200 Annapolis, MD 21401-7348 800.638.6425 | www.mdrealtor.org
Cathy A. Werner President RE/MAX American Dream 9414 Belair Road Baltimore, MD 21236-1504 410.529.7900 Fax 410.529.7906 cwerner@remax.net
Patricia A. Terrill President - Elect Prudential Carruthers REALTORS® 7500 Coastal Highway Ocean City, MD 21842-2937 410.524.7000 Fax 410.524.5695 pat.terrill@gmail.com
Executive Leadership Team Cathy A. Werner | President Patricia A. Terrill | President-Elect Carlton J. Boujai Jr. | Secretary Carole A. Maclure | Treasurer Steve Meszaros | Immediate Past President Mary C. Antoun | Chief Executive Officer
Editor Deborah L. Hager | debbie.hager@mdrealtor.org
Advisory Committee Ken Montville | Chair Ron Howard | Vice Chair
Advertising & Publication Design
Carlton J. Boujai Jr.
Carole A. Maclure
Secretary Exit Realty Prosperity Group 5300 Westview Drive Suite 105 Frederick, MD 21703-8339 301.698.8700 carltonboujai@mris.com
Treasurer Long and Foster Real Estate, Inc. 4650 East West Highway Bethesda, MD 20814-5330 301.907.7600 Fax 301.907.6610 carole.maclure@longandfoster.com
Art Comp & Design Alison Cooper | Senior Designer 1921 York Road, Timonium, MD 21093 410.252.4027 | www.acd1.com
Mission Statement The Maryland Association of REALTORS® exists to support all segments of its membership and their specialties. The Maryland Association of REALTORS®, through collective efforts with local boards/associations and the National Association of REALTORS®: ■ Develops and delivers programs, services and related products that
maintain and elevate the high standards of the real estate business and the professional conduct of its practitioners; ■ Assists members in ethically and professionally serving the public; ■ Promotes and preserves the right to own, transfer and use real
property; and ■ Protects the right of members to conduct business within a framework
of fair and reasonable laws and government regulations. In principle and in practice, the Maryland Association of REALTORS® values and seeks diversity and inclusive participation within the field of real estate and recognizes each member as a unique individual.
Steve Meszaros Immediate Past President Yerman, Witman, Gaines & Conklin Realty 1500 Whetstone Way Suite 100 Baltimore, MD 21230 410-401-3600 smeszaros@ywgcrealty.com
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M A R Y L A N D R E A L T O R ® June/July 2011
Mary C. Antoun Chief Executive Officer Maryland Association of REALTORS® 200 Harry S Truman Parkway, Suite 200 Annapolis, MD 21401-7348 800.638.6425 mary.antoun@mdrealtor.org
Maryland REALTOR® (USPS 0016-017) is published bimonthly by the Maryland Association of REALTORS®, 200 Harry S Truman Parkway, Annapolis, MD 21401-7348. Periodical postage paid at Annapolis and additional mailing offices. Postmaster send address changes to: Maryland REALTOR ®, 200 Harry S Truman Parkway, Annapolis, MD 21401-7348. Member subscriptions of $3.81 are paid with annual dues. This publication is designed to provide accurate and authoritative information regarding the subject matter covered. It is offered with the understanding that the publisher is not engaged in rendering professional advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. Articles that appear in Maryland REALTOR® are an informational service to members. Their contents are the opinions of the authors alone and do not necessarily represent those of the Maryland Association of REALTORS®. Permission to reprint articles appearing in Maryland REALTOR® magazine must be requested in writing. Also include purpose for request. While this magazine makes a reasonable effort to establish the integrity of its advertisers, it does not endorse advertised products or services unless specifically stated. ©2010 Maryland Association of REALTORS®, Inc.
2010 edition Thank You to all our 2010 RPAC Contributors.
Leaders of the PAC
Your support of RPAC demonstrates your insight about the importance of our efforts to support candidates who support our industry and our profession. Special thanks to the continued, generous support of RPAC Golden R Contributors for their extraordinary leadership and dedication.
President’s Circle ®
Those REALTORS who are major donor contributors AND pledge $2,000 direct-candidate contributions. W Mary Antoun W William Armstrong W Carlton Boujai W Rick Brown W Bonnie Casper W Adam Cockey W Gloria Farrar W Iona Harrison W John Harrison W Al Ingraham W Ilene Kessler W Janice Kirkner W Carole Maclure W Steve Meszaros W Ken Montville W Shelly Murray W JoAnne Poole W Dale Ross W Cathy Werner
Golden R Contributors Thank You Golden and Sustaining Golden R Contributors! W William Armstrong W Bonnie Casper W Greater Capital Area Association of REALTORS® W JoAnne Poole
Sustaining Golden R W Mary Antoun W J. Thomas Carruthers III W Adam Cockey W Greater Baltimore Board of REALTORS® W Iona Harrison
W John Harrison W Alan Ingraham W Ilene Kessler W Carole Maclure W Maryland Association of REALTORS® W Prince George’s County Association of REALTORS® W Dale Ross (Pioneer Realty) W Joan Ryder W Jay Webster W Cathy Werner W Wayne Wyvill
Sustaining Crystal R W Thomas Earnest W Gloria Farrar W Harford County Association of REALTORS® W Howard County Association of REALTORS® W Marc Witman W William Yerman
Sterling R Contributors The RPAC Trustees would like to recognize first-time Sterling R Contributors for their generous contribution of $1000 to RPAC in 2010. Thank you for your support! W Cheryl Abrams W Waribo Adasi-Efuya W Jean Andrews W Cheryl Bare W Candace Claster W John Coller W Roger Fairbourn W John Ford W Howard County Million Dollar Club W Bob Kimball W Michael McGreevy W Rebecca Perlow W Audrey Primozic W Patricia Terrill W Meredith Weisel
Realtor Party ®
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M A R Y L A N D R E A L T O R ® June/July 2011
VOTE
ACT
INVEST
Multi-Year Sterling R Contributors The RPAC Trustees would further like to recognize our MULTI-YEAR STERLING R CONTRIBUTORS for 2010, and thank them for their support! W Timothy Blanchfield – Two-Time Sterling R W Desiree Callender – Two-Time Sterling R W Brian Donnellan – Two-Time Sterling R W Rick M Rall Jr. – Two-Time Sterling R W Marilyn Rhodovi – Two-Time Sterling R W P. Joy Siegel – Two-Time Sterling R W Kenneth Smallwood – Two-Time Sterling R
W Cindy Ariosa – Nine-Time Sterling R W Boyd Campbell – Nine-Time Sterling R W Anne Cooke – Nine-Time Sterling R W Alexander Karavasilis – Nine-Time Sterling R
W Barbara Baumler – Three-Time Sterling R W Russell Boyce – Three-Time Sterling R W Richard Brown – Three-Time Sterling R W Thomas Hough – Three-Time Sterling R W Fred Pumphrey – Three-Time Sterling R W Stephanie Rall – Three-Time Sterling R W Noel Wood – Three-Time Sterling R
W Mary Lou Kaestner – Eleven-Time Sterling R W Judy Morris – Eleven-Time Sterling R W Nancy Simpers – Eleven-Time Sterling R
W David Charron – Four-Time Sterling R W Frederick County Association of REALTORS® – Four-Time Sterling R W Janice Kirkner – Four-Time Sterling R W Charles Llewellyn – Four-Time Sterling R W Shirley Matlock – Four-Time Sterling R W David McIIvaine – Four-Time Sterling R W Bob Simon – Four-Time Sterling R W Michael Cerrito – Five-Time Sterling R W Joanne Darling – Five-Time Sterling R W Karol Hess – Five-Time Sterling R W Claude Humbert – Five-Time Sterling R W Stephen Meszaros – Five-Time Sterling R W Jill Pogach Michaels – Five-Time Sterling R W Kenneth Montville – Five-Time Sterling R
W Jan Hayden – Ten-Time Sterling R W Jeanne Turnock – Ten-Time Sterling R
W Jody Landers – Twelve-Time Sterling R W Real Estate Million Dollar Association of Baltimore – Fifteen-Time Sterling R W Georgiana Tyler – Fifteen-Time Sterling R W Harold Huggins – Eighteen-Time Sterling R W Michael Yerman – Twenty-Time Sterling R W Nancy Hubble – Twenty-One-Time Sterling R W Women’s Council of REALTORS® – Twenty-One-Time Sterling R W Nicholas D’Ambrosia – Twenty-Two-Time Sterling R W Distinguished Sales Club of Prince George’s County – Twenty-ThreeTime Sterling R W Women’s Council of Prince George’s County – Twenty-Three-Time Sterling R
W Carlton Boujai – Six-Time Sterling R W Carroll County Association of REALTORS® – Six-Time Sterling R W Coastal Association of REALTORS® – Six-Time Sterling R W Creighton Northrop – Six-Time Sterling R W Susan Pruden – Six-Time Sterling R W Ashley Richardson – Six-Time Sterling R W Alease Bowles – Seven-Time Sterling R W Melvina Brown – Seven-Time Sterling R W Alana Lasover – Seven-Time Sterling R W John Lesniewski – Seven-Time Sterling R W Michael Moran – Seven-Time Sterling R W Ann Moxley – Seven-Time Sterling R W Shelly Murray – Seven-Time Sterling R W Thomas Quattlebaum – Seven-Time Sterling R W Patrick Ulrich – Seven-Time Sterling R W Jack Bannister – Eight-Time Sterling R W Buzz Mackintosh – Eight-Time Sterling R W Barbara Miles – Eight-Time Sterling R W Patricia Smallwood – Eight-Time Sterling R
,
Local Board that Exceeded their Goal Marianne Ferguson (Harford County President-Elect)
M A R Y L A N D R E A L T O R ® June/July 2011
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Capital Club
Local Association that Exceeded their Goal First Association to Reach their Goal Local Association with Highest Dollar Percentage over Goal Pictured left to right: Marie Shantz (Carroll County Local Association President) Janice Kirkner (Carroll County Local RPAC Trustee)
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Local Board with the Most Sterling R Contributors Local Board that Exceeded their Goal Pictured left to right: Jody Landers (Greater Baltimore Board Association Executive) Bob Kimball (Greater Baltimore Board President)
Most Improved Local Association- Dollar Percentage Local Board that Exceeded their Goal Local Association that Exceeded Goal by Most Dollars Paul Fenton (Southern Maryland President-Elect)
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M A R Y L A N D R E A L T O R ® June/July 2011
W Phyllis Adam W Diana Armacost W Susan K Balderson W Wendy I Banner W Bay Area Association of REALTORS® W Kathleen F Beadell W Thomas A Bennetts W Rusling D Blackburn W Carolyn Blanchard-Cook W Brenda Blaney W James M Blaney W John P Bragale W Damian E Buckley W Tracy Burke W R. Bruce Campbell (Wallace H Campbell & Co.) W J. Joseph Casey W William A Castelli W Collette B Cavegn W Anita M Centofanti W Boyd Campbell (Century 21 Home Center) W Gazexer Green (Champion Homes Realty LLC.) W John P Cinquegrani W James M Coley Jr. W Lori M Connor W Terence F Daly W Kay Deitz W Alicyn DelZoppo W Anthony R DeVol W Katherine Dixon W Thomas J Drechsler W Connie Dube W Jennifer Dwyer W Frank G Ferguson W Margaret M Finn W William J Fitzgerald W Gregory J Ford W Carl T Franzen W Jeffrey S Ganz W Joan E Gardiner W Gina Gargeu W Eleonore A Gerstenfeld W Lee R Goldstein W Elizabeth C Gray W Jamie L Gregory W Patricia C Groth W Dana H Haraway W Edward G Haraway W Shari L Harris W Theo Harris W Mynor R Herrera W Barry Hess
W Sharon K Hiner W Gregg B Holland W James R Hyatt W Joanie M Hynes W Robert L Jebsen W Marla Johnson W Guy D Josey W Ellen C Katz W Russell S. Katz W Sandra Kennedy W Roberta D Kimball W Elley S Kott W Anthony C Launi W Martha B Lessner W Reuben F Lilly Jr. W Patricia H Long W Diane M Mahaffey W Santhy Mallios W Aaron M Max W Ann McClure W Sharon A McKenna W Linda McKinnon W Dennis B Melby W George E Mitchell W Linda A Moran W Nathalie F Mullinix W Amy R Musher W Vittorio Muzzatti W William J Neary Jr. W Dean A Noah W Cristina L O’Bryhim-Curtis W Michael W Patrick W Erin M Phelps W Robert G Ramoy W Kelly Renfro W Richard M Rhodes W Ned Rich W Amy Ritsko-Warren W Roni Schultz W Anne C Smoley W Mo B Snowden W Connie M Stommel W Pamela D Stone W Craig J Strobel W Jeffrey Sussman W Lynda O Teubner W Virgil R Twigg W William Van Horn W David R Vane W Patrick A Weed W Norman P Wehner W Harlan C Williams W James D Williams W Linda F Wilson W Philip L Wineman VII W William R Wootan
$99 Club W JA Falkenstein (Absolute Appraisals) W Allison E Adams W Gregg Adams W Jeffrey Sussman (Company Advantage Title) W Deborah A Ailiff W Akinbode Akinola W Eugene S Albert Jr. W Lewie A Aldridge III W Jacqueline A Alexander W Semere Ambaye W Allan P Amernick W Allen K Anders W Leon G Anderson W Bernard Andrews W Leon W Andris W Kannan Annamalai W Jeffrey Annis W Kathleen F Anselmo W Frederick W Archer W John F Argentino W Cuvator H Armstrong W John M Ashley III W Steve L Atkocius W Brian D Austin W Nairi C Balian W Robin Ballinger W Joseph M Barry W Thurman L Battle W Chris Beall W William F Beauchamp W Debra Beitzel W Deborah Benkert W Wayne P Benson W Michael W Benton W Molly A Beringson W Janet L Bernard W Donald Berry W Dan G Betsher W Donald L Biedenback W Daniel M Billig W James H Billingslea Jr. W Bill Bittner W Alexandra D Blond W Gary Bockelmann W Nancy Boehmer W Achala Bonde W Jaime R Borda W Susan R Boslough W William G Bowen W Ronald Bowers W Fred C Brand W G V Brenneman Jr. W Jonas Brodie
W George W Brookhart W Thomas B Brooks W Anne M Brown W Hattie L Brown W Maria A Brown W Leo A Bruso W Elizabeth Buffington W Cam A Bunting W F (Chip) Burnett W William E Burris W Linda V Burton W Mark C Butterfield W Mary Calder W Andrea F Caldwell W Lisa S Cameron W Juan F Campos W Teresa J Caplan W Michael J Casey Sr. W William F Cassidy W James R Castle W Peggy Castle W Jennifer S Chaney W Lin Chen W William Turner (Chesapeake Bay Realty) W Herbert E Chisholm W Christina Christopher W Barbara A Ciment W Galen R Clagett W Jamaal S Claggion W Garnett Y Clark Jr. W Jann Clark W Joseph M Clark W Kathleen M Clark W Thelma K Clark W Wm N Clark W James F Clement W Geoffrey R Close W Rory S Coakley W Julian Coiner W Bernadette L Cole W John J Collins W Gretchen L Conley W Robert M Connelly W William J Connor W Raymond S Contee Jr. W Carol E Cook W David M Coombe W Peter S Copenhaver W Kay D Corbin W Andie J Corby W Dottie J Cordwell W Lou Ramsay Cotta W Dean E Cottrill W James B Coulter Jr. W Gerald A Cousineau Jr.
W Neda R Cox W Daniel F Craney W Jennifer L Cropper-Rines W Mary Judith J Curren W Donald R Curry W Morris A Curtis W Richard M Curtis W Sharon Curtiss W Ronald D’Anna W Anne Smoley (DANDAS, Inc.) W Rhonda C Darden W Leslie E Davies W Anita T Davis W Ann B Davis W Herbert A Davis W Phyllis Davis W Robert L Davis Jr. W William R Davis W Joyce L Deale W Yvonne Deardorff W Don M DeHanas W Rachel A DeHanas W Joseph A DeLuca W Sara Demb W Michael Demyan W Jill C Dennis W William D Dewar W Kevin J Dey W James C Diamond W Denise M Diana W Linda C Dieter W Judith M DiFilippo W Barbara Discenza W Maria Willis Dodge W Tiffany S Domneys W Glenn Donaldson W Karen L Donaldson W Eugenia C Donnelly W Gertrude O Douglas W R L Downey W Patricia A Dowtin W Michael R Draper W Betty A Drury W Tammy L Dumenil W Mike Dunn W Bonnie G Dypsky W Daniel A Early W Maureen A Earp Wood W Maria P Eaves W James K Eder W Chris Jett (Elite Marketing & Sales, LLC.) W Mary Ann Elliott W Malik O Ellis (Horizon Real Estate Group) W Duane M Emmet
W Troy D Emory W Norma S Epstein W John P Evans, Esq. W Peter D Evans W Richard E Evans W Michael Farabaugh II W James Fegan W Paul J Fenton W Marianne S Ferguson W Steve L Ferguson W Carol D Feria W Lynn Finckel W Brian L Flook W Gabriel J Fontana W Eric Ford W Julia S Fortin W Sandra M Fouche W Preston Fouke W Carole K Fradkin W Terri Franks W Ben Frederick III W Candice L Friday W Martin Friend W Maria B Froneberger W Edwin R Fry W Sarah M Funt W Carol J Gamble W Susan C Garczynski W Luciano Gargano W Marianne V Garrison W Richard E Gatchell W Theresa A Gatton W Robert G Gauger W James L Gay III W Baochun Ge W Ivy K Gifford W Paula H Gilley W Kim K Gillum W Jean Gilman III W Jennifer Glass W Suzanne Glocker W Fred Godman W Jason Goldberg W Quyen Quach (Golden Gate Realty, Inc.) W Robert R Golden W Ashton G Gonella W Karrie M Gonzalez W Melissa S Goodfellow W Michael P Goodfellow W Judith A Gordon W Thurman S Graham W James W Granzow W Christine L Gray W Mike Graziano W Rebecca F Greco M A R Y L A N D R E A L T O R ® June/July 2011
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Leaders of the PAC
Continued from page 11
W Elizabeth A Green W Janet J Greene W Jason S Gregg W Rachel Grove W Mary M Groven W Neng-hua Guo W John Guynn W Susan E Hale W Bonnie J Haley W Robert A Hall W Alan Halle W Peter A Hamelman W Mary C Hamersley W William E. Hand Jr. W James F Hanes W Gwendolyn B Hankerson W Yvonne Y Hardy W Aaron B Hargrove W Thomas Harner W John A Harrison W Craig P Harshman W Joyce H Hartnett W Thomas Harwood W John S Hawk Jr. W Elizabeth M Hays W Sigrid S Hayward W Dale W Heller W Irene E Heller W Susan Hemmerly W William J Hennessy W Jo-Ann Henry W Elsie M Herbst W Arthur F Hess W Joseph B Higdon W Wanda J Higgs W Debora E Hileman W Cheryl E Hill W Kim A Hills W Helen G Hillstrom W Historic Highlands Association of REALTORS® W Daniel E Hoff W Samuel C Hoff W Mary L Hoffman W Donna L Hoffmann W Lawrence J Hogan Jr. W Vaughn R Hogans W Earline K Holloway W Mark S Holloway W William J Homoky W James B Hooper W Lucia P Hopkins W Timothy N Hopkins W Clarence E Horst W Sara L Hourihan-Taylor W Robert P Howard W Edward B Howlin Jr.
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M A R Y L A N D R E A L T O R ® June/July 2011
W Paing T Htoo W Tai L Huang W Larry R Hudson W Diebold E Hughes W Linda C Hughes W John W Hurt Jr. W James R Huston W Judith E Isom W Marcia U Jackson W Sanford B Jaffe W Gary L James W Francis L Jenkins W Sandra L Jenkins W Ann F Johnson W George H Johnson W Robert E Johnston III W Robert L Johnston W Sharon S Johnston W Candice E Jones W R Bruce Jones W John J Jubin W Rose Marie Jung W Alfred B Kagan Jr. W Patrick J Kane W Carolyn C Kappra W Thomas Keats W Edwin L Kelly W Joan L Kennedy W Heidi S Kenny W Meghan Kerlavage W Renee M Keshishian W Wilson S Kidwell W Karen L Kilheffer W Chang K Kim W Brooke E King W Edisel D King W Kim King W Marsha Kinzer W Marney P Kirk W Peter J Klebenow W Diana Klein W Donieta Jeni Kneessi W Leah D Knoerlein W Elaine S Kogan W Mark K Konka W Charles L Koontz Jr. W Jenny Koontz W Jeffrey J Krahling W Edward Krauze W Paul C Lancaster W Suzanne G Lancelotta W Billie D Landbeck W Annette E Lane W Robert L Langley Sr. W Joan Sharon S Lanier W Cynthia M Lantz W Nicole D Lapera-Holler
W John J Lavery W Leigh Lawson-Everstine W William D Leager W Jennifer League W Scott M Lederer W Jonathan P Lee W Mary A Lee W Peter S Lee W Ginger Bigelow (Legacy Settlements) W Malcolm W Leggett W Ronald L Leonard W Thomas R Leverance W Michael S Levine W Theodore W Levy Sr. W Denise M Lewis W George M Leypoldt W Arlene O Linn W Matthew E Lipsky W Jane L Litchfield W Dawn M Litrenta W Lungchiang E Liu W Sandra M Lofgren-Sargent W Jeremy Loomis W Stephen Lovellette W Charlotte A Lowe W Robin S Lower W John D Lowry W Freda K Lusby W Beth J Luskey W Gary G Luttrell W Leonard J Lyons Jr. W Michael J Lyons W John C MacBryde W Sydney L Machat W John C Mackie W Andrew V Mackintosh W Dennis P Maguire W Kathy Malone W Kevin M Maloney W Ali R Mansouri W Robyn D Marbray W John S Margelos Sr. W Jacqueline S Margolis W Diane M Marsden W Gilbert D Marsiglia Sr. W William E Martin Jr. W Judith I Martinak W Paula Martino W Cynthia A Massari W Grace P Masten W Christine P Master W Zakhar Matlin W James E Matthews W Jeffrey A Matthews W Barbara C Mattingly W Dale E Mattison
W Brian P Maury W Patrick McClary W David D McCollough W John McConnell W Vernee J McFarlin W Walter F McGuire Jr. W Karen A McHugh W Sherilyn McLaughlin W Joan McLernon W Christopher D McMahon W Susan B Megargee W Francis A Mehlfelt W Ronald D Mellott Jr. W Deborah A Meushaw W Ronald B Meyer W Catherine Meyers W Kathleen A Miller W Willie T Miller W Shannon Miller-Lutz W Phyllis L Minik W Ronald F Miscavich W Donna Moffett W Sandra N Monger W H. Barry Montgomery W Allison D Mooney W Thomas J Mooney IV W Cheryl A Moore W Kieyasien K Moore W Constance J Morrissette W Debra Moser W Cynthia G Moses W Maynard Gottlieb (Mr. Lister Realty, Inc.) W Michael J Muren W Deanna Murphy W Dennis C Murphy W Madeleine Murphy W Judy L Murray W Arletha Myers W Susan Myszkowski W Nanci Neff W Barbara Neville W Kimberly Ann Nicholson W Vernon J Nily Jr. W Brodist R Norton W Boyd Campbell (Nova Companies, LLC.) W Kim A Nunnally-Williams W Simon N Nwaigwe W Mary C O’Brien W Michael P O’Brien W Nnaemeka A Obiegbu-Chima W Gerard F Occhiuzzo W John Michael O’Connell W Moon S Oh W Michael Oleru W Christina B O’Meara
W John C O’Neill W Sue D Pakulla W David D Palmer Jr. W Sarah I Paplauckas W Bonnita A Parks W Irene C Parks W James Parks W Irene B Parrish W Barbara Passwater W Lanell Patrick W Stephen T Paul W Art Payne W Kathi L Payne W Vincent Payne W Nicole M Peter W Craig B Pittinger W Joan Pittroff W Claudia F Pleasants W Daniel L Plombon W Carol S Plunkert W David D Pool W Doug Poole W Margaret C Poss W Stephen J Potorti W Jeffrey C Powell W Patrick Powers W Quyen Quach W Jean I Quattlebaum W Carter Rardon W Rick Saylor (RCS Home Inspections) W RE/MAX Solutions W Tammi Reeder W Margaret M Regnier W John E Reid W Bonnie S Reio W Walter A Reiter Jr. W Janet Reynolds W Elizabeth A Rhodes W Willie M Rhone W Dean Richardson W Jon J Ridgeway W William B Rinnier Jr. W Renaire E Rivers W Carolyn I Roberson W Gayle Roberts W James C Robinson W Charles Rodriguez W Sharon L Rogers W Karen L Rohrbaugh W Harry R Roop W Charles I Rosen W Faith M Rosselle W J Quinn Rounsaville W Patricia A Rowe W Robert C Ruggieri II W Mary Betsie Russell
W Mia B Russell W Sherri J Russell W Alexander Ruygrok W Sandy L Sadler W Brenda K Sarver W Edward J Sauerhoff W Steven S Saunders W Monzella Saunders-Owings W George R Savani W Patricia M Savani W Ruby D Scherer W Nick Schiaffino W Tazuko O Schmitz W James F Schneider W Louise Schultz W Hattie C Scott W Gene J Sementilli W Mark A Shapiro W Harry A Shasho W Robert T Sheets Jr. W James W Shelton Jr. W Carol Simmons W Vito Simone W Art S Simpson W Alfred L Singer W Van Singh W Guy Slone W Douglas M Smith W Kenneth E Smith W Larry E Smith W Linda D Smith W Sandra J Smith W Kenneth J Smondrowski W RoseAnn C Spalt W Mark Sponsky W Lisa M St. Clair W Debbie Stallings W Jeremy Stallings W Glenn B Staples W Art Hess (Statewide Real Estate Services) W Marvin Steen W Carl V Stein W Stuart J Stern W Patricia Stinnett W Paul L Stokes W Gregory M Stone W Dennis Stouffer W David Straitman W Stephen W Stran W Joan M Strang W David H Stromberg W Kathy L Suite W Ronald L Sullivan W Timothy B Sullivan W Carol A Sutfin W Max Sweet
W Shauna Talbot W Doannie A Tambascio W John W Tauber W Michael Taylor W Ronald G Taylor W Bonnie J Teague W Maria A Terry W Lee R Tessier W Mary Thingelstad W Thomas Thingelstad W Timothy K Thomas W Jean A Thompson W Evelyn E Thorne W Jennifer D Tilghman W Boyd Campbell (Title Max LLC.) W Keely E Tolley W Karen J Towne W Kevin M Tracy W Leland B Trice W Evelyn K Trimbath W Debra L Trott Poquette W David L Trower W Kevin Turner W Chad Tyler W Judy C Tyree W Harry D Van Mater W Laura A Van Meter W Lisa Velenovsky W James F Velich W Kelly R Vezzi W John Von Paris W Frances Wade W Pam J Wadler W Annette M Wagner
W Stephen Walker W Daniel Walsh W Paul W Wang W Marysusan S Wanich W Elinor W Warring W Devin J Warwick W Barry P Waterman W Mareen D Waterman W Michael C Weisner W David J Weiss W Jay Weitzel W Barbara F Whitaker W Charles W White W Edward A White W Tammy White W Diana L Whitney W Kevin A Wiles W Farone Williams W Jennifer Williams W Cynthia L Wilson W Leonard E Wilson Jr. W Mark F Wilson W Maurice O Wimbrow III W Charles W Windsor W Sandra K Wing W Janet A Wojaczyk W Craig Wolf W Mimi Wood W James F Wright W John L Wright W Elizabeth Wynne W Darlene Zepp W Yili Zhang
Congratulations to ALL REALTOR® Local Boards/Associations that exceeded their 2010 RPAC Goals! W Anne Arundel County Association of REALTORS® W Bay Area Association of REALTORS® W Carroll County Association of REALTORS® W Cecil County Board of REALTORS® W Coastal Association of REALTORS® W Frederick County Association of REALTORS® W Garrett County Board of REALTORS® W Greater Baltimore Board of REALTORS® W Greater Capital Area Association of REALTORS® W Greater Washington Commercial Association of REALTORS® W Harford County Association of REALTORS® W Historic Highlands Association of REALTORS® W Howard County Association of REALTORS® W Pen-Mar Regional Association of REALTORS® W Prince George’s County Association of REALTORS® W Southern Maryland Association of REALTORS® M A R Y L A N D R E A L T O R ® June/July 2011
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CW
heckers OR Reckers
“Checkers or Wreckers” is a familiar NASCAR phrase that means a driver is either going to come in first or crash trying. It’s also a pretty good description of the legislative session just ended for Maryland REALTORS®, as we geared up to oppose one of the Governor’s key initiatives: a prohibition on new septic systems in subdivisions of 5 or more units. MAR’s leadership was committed to either stopping this proposal outright or crash trying. Fortunately for us this year, it was the checkered flag. 14
M A R Y L A N D R E A L T O R ® June/July 2011
By Bill Castelli Vice President MAR Government Affairs
Given the concern expressed by rural legislators as well as interest groups like MAR, the Governor agreed to “study” the septic issue over the summer, so the various bills were never voted. Recently, the Governor announced the creation of a Task Force on Sustainable Growth and Wastewater Disposal to carry out the study. The Task Force will include interested parties from real estate, development, local government, agriculture, and environmentalists. The goal of the group is to seek a solution to poorly planned growth and pollution released from septic systems.
We are pleased, too, that the two bills requested by our Public Policy Committee were passed by the General Assembly and have already been signed into law by the Governor. Those bills affected real estate teams and the return of deposit money. Below is a comprehensive summary of the most important legislation affecting REALTORS® during the legislative session.
AFFORDABLE HOUSING AND TAXES HB 72 – Budget Reconciliation and Financing Act of 2011 – Recording Fees STATUS: PASSED – Effective July 1, 2011 – July 1, 2015 Increases the real estate recording fee from $20 to $40 for each recordable document. HB 437 – Real Property – Sales of New Homes – Minimum Visitability Features STATUS: PASSED – Applies to any planned subdivision receiving preliminary plan approval on or after October 1, 2012 Requires certain new subdivisions receiving preliminary plan approval on or after October 1, 2012 to offer consumers an option to purchase a “visitable” home. The law applies only to subdivisions of 11 or more single-family, detached units. To be “visitable,” a home must include a ground level entrance at least 36 inches in width and accessible to parking or a public right of way, with no vertical obstacles such as steps or curbs. A more burdensome visitability proposal opposed by MAR was defeated. HB 981 would have required at least 50% of the units in a subdivision of 5 or more to be built as “visitable” units. HB 521/SB 328 – Estates and Trusts – Transfers – Recordation and Transfer Taxes STATUS: PASSED – Effective July 1, 2011 Clarifies that transfer and recordation taxes may not be imposed on a mortgage or deed of trust that is transferred as part of an estate or trust to a beneficiary or a trust as long as there was no consideration. The bill provides a more uniform treatment of estate and trust property; some counties impose transfer and recordation taxes on the mortgage or deed of trust when property is transferred as part of the management of the estate or trust.
HB 603 – Maryland Energy Administration – Clean Energy Loan Payment Program STATUS: NOT PASSED Would have established a Clean Energy Loan Program to help fund energy efficiency and clean energy improvements for property owners. The bill would have allowed property owners to voluntarily enter into agreements that impose a property tax surcharge on their own property in order to repay the underlying loan costs. HB 662/SB 648 – Renewable Energy Surcharge – Retail Electric Customers STATUS: DEFEATED Would have charged electricity ratepayers a renewable energy surcharge if the ratepayer’s usage exceeded average energy usage by 25%. The bill also would have established a rebate against the electricity rate for ratepayers who choose renewable energy electric providers. HB 695 – Property Tax – Semiannual Payment for Residential Property STATUS: NOT PASSED Would have extended the semi-annual payment of property taxes to non-owner occupied residential property. HB 856/SB 332 – Gas Companies – Infrastructure Replacement – Surcharge STATUS: DEFEATED Would have imposed a monthly surcharge on residential and commercial gas customers to pay for gas infrastructure improvements. HB 1064 – Watershed Protection and Restoration Act STATUS: NOT PASSED Would have imposed a stormwater fee on all residential and commercial property to pay for stormwater infrastructure improvements. The legislation would have required local governments to impose the fee at a rate the local government determined. Residential owners would pay a flat rate and commercial owners would pay a rate based on their property’s impervious surface.
HB 1245 – Recordation Tax and State Transfer Tax – Exemptions STATUS: PASSED – Effective July 1, 2011 Expands the class of intra-family real property transfers that are exempt from recordation and transfer taxes to grandparents or step-grandparents. HB 1295 – Property Tax – Charter Counties – Limits STATUS: NOT PASSED Would have allowed the five charter counties with property tax limitations to increase property taxes in excess of the Charter limits by a two-thirds vote of their county council. The five counties are Anne Arundel, Montgomery, Prince George’s, Talbot, and Wicomico. HB 1352 – Local School Boards – Authority to Impose a Property Tax STATUS: NOT PASSED Would have given local school boards the authority to levy property taxes to pay for the operation of local schools. If a school board exercised such authority, a county government would be required to reduce the county property tax by an amount equal to the new tax imposed by the school board. SB 304 – Renewable Energy Surcharge – Retail Residential Electric Customers STATUS: DEFEATED Would have required electric companies to impose a surcharge on residential ratepayers if their electricity consumption exceeds 1000 kilowatt hours per month. The ratepayer would be entitled to a rebate of some of the cost by using electricity generated by renewable energy sources. SB 316 – Property Tax – Charter Counties – Education Funding STATUS: NOT PASSED Would have allowed the five charter counties with property tax limitations to increase property taxes in excess of the Charter limits to fund the local school budget. If a county exercised this authority, it would be prohibited from reducing education funding from other sources. Those five counties are Anne Arundel, Montgomery, Prince George’s, Talbot, and Wicomico.
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REAL ESTATE BROKERAGE AND CONTRACTS *HB 102 – Financial Institutions – Mortgage Loan Originators – Prohibited Acts STATUS: PASSED – Effective October 1, 2011 Prohibits a mortgage loan originator from making a payment, threat, or promise in order to improperly influence the independent judgment of a real estate appraiser. However, HB 102 still permits a mortgage loan originator to request the appraiser to: consider additional information; provide further substantiation of the appraiser’s conclusions; and correct errors. Payment may also be withheld if the appraisal is subject to a legal or administrative action. HB 128 – Consumer Law – Maryland Consumer Protection Act – Scope STATUS: PASSED – Effective October 1, 2011 Adds merchants whose business includes paying off consumer debt in connection with consumer goods and realty to the purview of the unfair or deceptive trade practices act if the merchant is purchasing or offering to purchase consumer goods or realty. HB 289/SB 410 – State Highway Administration – Unauthorized Signs on Highway Rights-of-Way STATUS: PASSED – Effective October 1, 2011 Authorizes local governments (on behalf of the state) to enforce the current prohibition against signs on state highway rights-of-way through an administrative fine and sign collection. MAR worked with the sponsor of the legislation to lower the original fine from $100 to $25 per sign, and to require local jurisdictions to forego collecting fines for the first three months so that individuals may be educated about the new requirement. HB 357/SB 234 – State Real Estate Commission – Sunset Extension and Program Evaluation STATUS: NOT PASSED Would have reauthorized the Maryland Real Estate Commission starting in July 2012. Would have increased the maximum guarantee fund payment from $25,000 to $50,000. Would have clarified that associate brokers and licensees must submit and change their licenses when the address of the real estate office changes. Would have increased the dishonored check fee from $25 to $35. Would have required the Real
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Estate Commission to issue a report detailing foreclosures associated with transactions by a licensee. Note: House and Senate conferees were not able to agree on additional amendments in the closing hours of the 2011 General Assembly Session. Under existing law, the Commission continues to operate until July 2012. Legislation to extend the Commission’s sunset date will be considered next year.
HB 719/SB 606 – Residential Property Sales – Disclosure of Utility Consumption STATUS: NOT PASSED Although MAR was opposed to the bill as originally conceived, we agreed to a compromise with the Maryland Energy Administration that would have required utility information to be provided to buyers visiting a property.
HB 379/SB 334 – Real Property – Deposits on New Homes – Escrow Accounts STATUS: PASSED – Effective July 1, 2011 Clarifies that a builder must open an escrow account prior to construction of a new residential unit, and maintain the funds in the account until the home is completed. Clarifies that money deposited in an escrow account to pay a construction draw schedule may be released in accordance with the draw schedule. The bill addresses ambiguities in current law due to a recent court case.
*HB 944 – Financial Institutions – Mortgage Lenders and Mortgage Loan Originators STATUS: PASSED – Effective October 1, 2011 Requires a person who is exempt from State Mortgage Licensing requirements to register with the Nationwide Mortgage Licensing System and Registry (NMLS) if the person employs a licensed mortgage loan originator. This change conforms state law with new requirements in the federal Secure and Fair Enforcement for Mortgage Licensing Act (SAFE ACT).
*HB 509 – Real Property – Mortgages – Enforcement STATUS: PASSED – Effective April 12, 2011 Authorizes the Commissioner of Financial Regulation to enforce the foreclosure and mortgage fraud laws in Maryland. Clarifies that the Commission may use certain investigative authority as well as compel violators of the law to make restitution to victims. HB 713/HB 838/SB 530 – Residential Property Tax Disclaimer Act STATUS: NOT PASSED As originally introduced in past years, this legislation would have required all real estate advertisements to contain the estimated property tax payment of a property for sale. MAR opposed that legislation, but agreed to amendments that would have provided a notice to the buyer in the Seller Property Condition Disclosure/ Disclaimer form as an alternative. The notice to the buyer states that the buyer’s tax bill may be significantly different from the seller’s current bill, and that buyers should contact local government to estimate their future tax obligation. The legislation passed the House but was not voted in the Senate Committee.
HB 1038 – Commercial Law – Residential Mortgage Loans – Escrow Amounts STATUS: PASSED – Effective October 1, 2011 Prohibits a lender from charging interest for up to one year on the amount of additional escrow money a lender requires a borrower to pay after establishment of the original escrow. *HB 1041/SB 256 – Business Regulation – Definition of Homebuilder STATUS: PASSED – Effective October 1, 2011 Requires developers to register as a homebuilder if the developer enters into contracts with consumers to provide or construct homes. *HB 1049 – Real Estate Brokers – Intracompany Agents STATUS: PASSED – Effective October 1, 2011 Authorizes a broker to appoint another licensee in the office to designate the intracompany agents working for the same real estate team. The designee appointed by the broker may not be a member of that real estate team. Prior to this change, the broker of record was the only licensee authorized to designate the intracompany agents for real estate teams.
*HB 1109 – Real Property – Rescission of Sales Contracts – Return of Deposits STATUS: PASSED – Effective October 1, 2011 Clarifies that brokers must follow the current rules under 17-505 of the Business Occupations and Professions Article for returning deposit money when state law permits a buyer to rescind a contract of sale. To return deposit money, 17-505 requires: an agreement of the parties; an interpleader action; or a determination by the broker of who should receive the money and notification to the parties of the decision. This process must be followed even if the property is subject to a condo, HOA or Coop regime.
HB 1181/SB 658 – State Commission of Real Estate Appraisers and Home Inspectors – Special Fund and Registration and Regulation of Real Estate Appraisal Management Companies STATUS: PASSED – Effective July 1, 2011 Requires Appraisal Management Companies (AMCs) to register with the State Commission of Real Estate Appraisers and Home Inspectors. Institutes standards that the AMCs must meet when working with appraisers.
prohibitions. Would have given authority to other licensing agencies (e.g. appraisers) to take action against their licensees as well.
HB 1309 – Real Estate Appraisers – Valuation Appraisals – Requirements STATUS: NOT PASSED Would have prohibited the use of distressed sales when preparing a property appraisal.
SB 285 – State Real Estate Commission – Reinstatement of Licenses and Inactive Status STATUS: PASSED – Effective October 1, 2011 Requires real estate licensees on inactive status to reinstate their full license after three years of inactive status rather than four years. Requires licensees on inactive status to keep up with continuing education requirements before renewing their inactive status after two years. MAR requested an amendment so that the bill would not apply to licensees going on inactive status until on or after October 1, 2011.
SB 210 – Real Estate Settlements – Paying or Receiving Consideration – Penalties STATUS: NOT PASSED Would have given clearer authority to the real estate commission to take action against licensees violating kickback
SB 918 – Real Property – Recordation of Deed – Foreclosure Sales STATUS: NOT PASSED Would have required a deed from a foreclosure sale to be recorded within 60 days after the date of the final order of ratification.
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M A R Y L A N D R E A L T O R ® June/July 2011
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COMMON OWNERSHIP COMMUNITIES HB 592/HB 942 – Common Interest Community Managers – Licensing and Regulation STATUS: NOT PASSED Would have required property managers for common interest communities (e.g., condos and HOAs) to be licensed and regulated by the Maryland Department of Labor, Licensing and Regulation. The bill excluded time share communities or completely commercial properties. There were other proposals as well that would have only required registration rather than a full license.
HB 57/SB 539 – Environment – Bay Restoration Fund – Authorized Uses STATUS: PASSED – Effective October 1, 2011 Authorizes the use of Bay Restoration Fund grants to pay some of the cost of connecting properties to sewer. Currently, grant money may only be used to pay for septic system upgrades. This bill allows grants for a sewer connection in instances when a septic upgrade would be more expensive or not feasible.
HB 827/SB 548 – Condominium and Homeowners Associations – Assessments – Increase Necessary to Meet Government Requirements STATUS: DEFEATED Would have authorized condo and HOA association Boards of Directors to increase association assessments without the approval of the association members to pay for costs imposed upon the association by government since the adoption of the last annual budget.
HB 177/SB 160 – Environment – On-Site Sewage Disposal Systems – Nitrogen Removal STATUS: NOT PASSED Would have required all new residential construction located in the Chesapeake or Atlantic Coastal Bay Watershed in Maryland to use Best-Available-Technology (BAT) if the property relies on a septic system. BAT systems are very expensive and would significantly increase the cost of most affordable housing. This bill will be studied over the summer along with other environmental issues affecting the Bay.
*HB 679 – Real Property – Condominiums – Amendment to Bylaws to Require Unit Insurance Coverage STATUS: PASSED – Effective October 1, 2011 Authorizes condominiums to amend their bylaws by a simple majority (51%) of the council of unit owners to require unit owners to maintain individual homeowner insurance policies. HB 1246/SB 946 – Condominiums and Homeowner Associations – Priority of Liens STATUS: PASSED – Effective October 1, 2011 Establishes that a condo or HOA has a limited priority lien over all other liens except those imposed by government. The lien is limited to 4 months of unpaid regular assessments for the common expenses or a maximum of $1,200. The priority lien cannot include special assessments, attorney fees, late charges, interest and other charges beyond the normal assessment. If a lender requests specific information regarding the priority lien, the condo or HOA association must provide that information within 30 days of filing the lien statement in the land records.
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LAND-USE, PROPERTY RIGHTS, AND THE ENVIRONMENT
M A R Y L A N D R E A L T O R ® June/July 2011
HB 1107/SB 846 – Sustainable Growth and Agricultural Preservation Act of 2011 STATUS: NOT PASSED Would have prohibited septic systems in all new residential subdivisions of 5 or more lots in Maryland. The bill would have permitted certain community systems to be used for the affected subdivisions. Because the cost of community systems or connecting to sewer would be too much for many subdivisions, this legislation would have undermined many county growth plans. This bill will be studied over the summer along with other environmental issues impacting the Bay. SB 873 – Private Property Rights – Regulatory Infringement – Compensation STATUS: NOT PASSED Would have provided property owners with a cause of action if regulations promulgated by state agencies diminished a property’s value. The state agencies would be liable for compensation only if they could not demonstrate that their action protected public safety or was necessary to comply with federal law.
PROPERTY MANAGEMENT HB 179/SB 111 – Environment – Recycling – Apartment Buildings or Condominiums STATUS: DEFEATED As originally proposed, this legislation would have required apartment buildings and condominiums to offer recycling to their occupants regardless of whether the county provided recycling to multi-unit buildings. However, as amended, the legislation would have required apartments and condo buildings to keep records on the amount and type of recycled materials. *HB 653/SB 457 – Lawyers – Bar Admission Requirement – Exception for Rent Escrow Proceedings STATUS: PASSED – Effective October 1, 2011 Allows non-attorneys to represent landlords or tenants in rent escrow cases. Occasionally, proper ty managers representing owners in court on a summary ejectment proceeding find themselves also engaged in a rent escrow action. HB 670/SB 620 – Real Property – Retaliatory Actions – Landlords and Mobile Home Park Owners STATUS: PASSED – Effective October 1, 2011 Establishes a different standard for a tenant to prove a retaliatory action by a landlord. Under current law, a tenant can only prove a retaliatory action if the “sole” reason for the action was to target the tenant. Landlord groups crafted a compromise with tenant groups to permit tenant actions to move forward in a limited way with a cap on damages of 3 months and court costs. HB 842/SB 516 – Foreclosed Residential Property – Tenants – Collection of rent Payments – Prior Notice STATUS: PASSED – Effective July 1, 2011 Requires a purchaser of a foreclosed property with a bona fide tenant to notify the tenant about the purchaser’s ownership so the tenant can pay the rent. A tenant is not required to pay any rent until the tenant receives the notice. MAR successfully sought [SUCCESSFULLY?] an amendment to give the new purchaser 15 days to notify the tenant before the purchaser foregoes any claim on the rent.
HB 902/HB 928/SB 643 – Human Relations – Housing Discrimination – Source of Income STATUS: DEFEATED Two bills were introduced to make “source of income” a protected class under Maryland law. MAR supported one (HB 928) and opposed the other (HB 902). HB 902 would have included all sources of income as a protected class, even government vouchers such as Section 8. HB 928 would have made all sources of income except vouchers a protected “source of income.” HB 917/HB 284/SB 429/SB 669 – Real Property – Residential Leases – Interest on Security Deposits STATUS: NOT PASSED Many bills were introduced to address this issue, but HB 917 was the only one of the bills to advance. It would have required landlords to return deposits with an interest rate of 1.5% or a rate equal to the U.S. Treasury Daily Yield Curve Rate, whichever is higher. The House passed HB 917, but the Senate did not take action on the bill. HB 1004 – Real Property – Landlord and Tenant – Breach of Lease STATUS: NOT PASSED Would have allowed landlords to use a faster process to file an eviction case against a tenant engaged in disorderly conduct which disrupts other tenants. HB 1033/SB 840 – Environment – Reducing Lead Risk in Housing – Risk Reduction Standards STATUS: PASSED – Effective January 1, 2012 Requires that landlords subject to the Maryland Lead Poisoning Prevention Program (LPPP) use a dust test when verifying whether a property is in compliance with the program. The current law allows a landlord to conduct either a lead dust test or perform certain risk reduction acts. The original version of this bill would have required a landlord to perform both a dust test and the risk reduction steps. The bill also requests the Maryland Department of the Environment to conduct a study regarding lead poisoning in owner-occupied properties and rental properties not subject to the current law. HB 1254 – Environment – Reduction of Lead Risk in Housing – Registration and Fees STATUS: PASSED – Effective July 1, 2011 Authorizes the Maryland Department of the Environment (MDE) to establish a rolling
payment schedule for landlords participating in the Lead Poisoning Prevention Program (LPPP). Under current law, all landlords are required to pay by December 31. For landlords with multi-unit buildings, a single payment in December is a significant cost. MDE is seeking to establish a schedule that will allow the Department to spread its work out as well as a schedule that allows landlords to spread out their payment. SB 503 – Foreclosure Purchaser and Tenant – Evictions – Tenant’s Right to Reclaim Personal Property STATUS: NOT PASSED Would have given tenants an extra 3 days to remove property from a unit after the day of eviction.
COMMERCIAL HB 420 – Recordation Tax – Indemnity Mortgages STATUS: NOT PASSED Would have required recordation taxes to be paid on indemnity mortgages for property when the mortgage is $5 million or more. The intent of the legislation was to capture transactions that were using indemnity mortgages as a way to avoid paying the recordation tax. HB 463 – Property Tax – Semiannual Payment Schedule – Business Property STATUS: PASSED – Effective to tax years starting after June 30, 2012 Expands the number of businesses that may pay property taxes under a semiannual schedule. Under the existing law, only a small business assigned a commercial use code by the State Department of Assessments and Taxation and whose annual property taxes does not exceed $50,000 may pay property taxes on a semi-annual schedule. This bill allows any business assigned a commercial use code and paying property taxes up to $100,000 to pay taxes semi-annually. *HB 601 – Sustainable Communities Tax Credit Program – Eligibility STATUS: PASSED – Effective July 1, 2011 Clarifies that the Sustainable Communities Tax Credit may be used for commercial properties that have already begun rehabilitation work, if the rehabilitation work had already been approved under the Federal Historic Tax Credit.
HB 718/SB 261 – Real Property – Commercial Buildings – Disclosures STATUS: NOT PASSED Would have required certain commercial building owners to disclose to prospective buyers and lessees the energy performance of the building or rental space. MAR was particularly concerned over provisions that would have given buyers and lessees the unconditional right to rescind a contract for up to 60 days after taking possession. HB 976 – Displaced Building Service Workers Protection Act STATUS: DEFEATED Would have required companies (like rental properties) to keep employed the workers of a contractor working for the rental property for at least 90 days after the contractor was terminated. After the 90 day period, the new contractor hired by the rental property would be required to use the workers from the terminated contractor if there was no cause to fire those workers during the 90 day transition period. HB 1050 – Construction Permits – Expiration Dates STATUS: NOT PASSED Would have extended the duration of development and construction permits approved by state, local and municipal governments. The bill applied only to permits approved on or after January 1, 2008.
MISCELLANEOUS *SB 182 – Maryland Health Benefit Exchange Act of 2011 STATUS: PASSED – Effective June 1, 2011 Provides the initial framework of the Health Benefit Exchanges that will become available to all Marylanders in 2014. These state exchanges are intended to provide greater choice and affordability in health insurance particularly to individuals like independent contractors.
* Indicates a bill that has been signed by the Governor. All other bills listed as passed await the Governor’s signature to take effect. “Defeated” indicates bills that were voted down. “Not Passed” indicates bills did not receive a vote.
M A R Y L A N D R E A L T O R ® June/July 2011
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Economic Forecast Anirban Basu
There’s Still Plenty of Reason for Concern,
but the Reasons Have Changed Focus Shifts from Growth to Inflation
Economy Now Enjoying Self-Sustaining Momentum Coming into 2011, economists remained largely fixated on the inadequacy of demand for labor, housing, commercial real estate and other aspects of economic life. Economists have been busily pouring over reams of data regarding senior bank loan officer attitudes, consumer credit availability and other indicators of a thaw in the credit market. The conventional wisdom has been that until banks begin lending more aggressively, the growth of the U.S. economy will continue to be lackluster and the recovery that began in mid-2009 will remain fragile.
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With the first quarter now over, many of the principal economic concerns coming into the year have been largely addressed. Demand on many levels is building. Retail sales are up 7.1 percent on a year-over-year basis through March. Moody’s Economy.com presently predicts that overall consumption will expand 3.3 percent in 2011, with motor vehicle sales rising 13.6 percent. Fixed investment is predicted to rise nearly 9.6 percent this year, with investment in equipment up 10.3 percent.
Exhibit 1. U.S. Export Growth, February 2001 through February 2011
Source: Bureau of Economic Analysis
Exhibit 2. Consumer Price Index Growth, March 2001 through March 2011
Source: Bureau of Labor Statistics
Foreign demand has also been strong. Despite a sea of economic troubles in Portugal, Greece and Ireland, a natural disaster in Japan and political uncertainty engulfing the Ivory Coast, Tunisia, Nigeria, Egypt, Libya, Yemen, Afghanistan, Bahrain and Pakistan, the world is increasingly looking to America for output of goods. That is very encouraging. Since January 2010, U.S. exports are up 6.9 percent on a seasonally adjusted basis and 18.9 percent on a not seasonally adjusted basis, with sales to China, India and Brazil up 17.3 percent, 42.2 percent and 7.4 percent, respectively.
The accompanying increase in production has led to the emergence of a new trend in America: employment growth in manufacturing. For eight months running, the number of manufacturing jobs is up on a year-over-year basis. Manufacturing employment nationally rose by 29,000 jobs in April. Since reaching an employment low in December 2009, manufacturing has added 250,000 jobs, including 141,000 in 2011. Unfortunately, the number of manufacturing jobs in Maryland has been declining during this period. Employment growth has generally been accelerating. Nonfarm payroll employment increased by 244,000 in April according to the Bureau of Labor Statistics (BLS), though the nation’s unemployment ticked up to 9.0 percent. The number of private sector jobs expanded to 268,000 in April, the best monthly performance since February 2006. BLS has observed job gains in professional and business services, health care, leisure and hospitality and mining, among other industries. Employment in retail trade rose by 57,000 jobs in April, with department stores adding 27,000 of those jobs. In other words, consumer spending continues to help drive economic expansion despite all the negative news that households encounter on a daily basis. However, the number of long-term unemployed (those jobless for 27 weeks or more) totaled 5.8 million in April, and their share of the unemployed continues high, at 43.4 percent.
Generally positive economic news has allowed equity markets to bounce higher, too. At the beginning of the year, the Dow Jones Industrial Average stood at 11,577. As of this writing (May 9th intra-day), the Dow stands at over 12,700 (translating into a gain of nearly 10 percent for the year). That performance is simply remarkable given the headwinds that have emerged in recent months, including the three-legged tragedy in Japan, ongoing sovereign debt issues in Europe, civil war in Libya and oil prices now above $100 a barrel.
M A R Y L A N D R E A L T O R ÂŽ June/July 2011
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Economic Forecast
Continued from page 21
Inflationary Pressures Building For months, we have been suggesting that it is still too soon to tell whether inflation will become problematic. Indeed, recent core inflation data (all components except food and energy) indicate that inflation remains mild. Through February, core inflation was running at a 0.2 percent monthly rate and 1.1 percent annual rate in America despite increases in medical care expenses (up 0.4% for the month and 2.9 percent year-over-year). But inflationary buzzards have begun to circle. There are a number of factors that collectively conspire to support the emerging view that at some point later this year or in 2012 the U.S. Federal Reserve will begin to find it necessary to constrain inflationary pressures by reducing money supply growth and increasing short-term rates. While much of the recent focus has been upon food and energy prices, commodity prices generally have been marching higher. For instance, steel and iron producer prices are up 16.8 percent through February on a year-over-year basis. Gold stands at about $1,500 a troy ounce, up approximately 30 percent from a year ago. Cotton prices recently set a record at well above $2 a pound. Certain non-commodity prices have also been drifting higher, including airline fares, which are up 12.3 percent year-over-year through February. Import prices are also up, with a growing number of nations reporting widening inflationary issues. In India, inflation is up 18.9 percent yearto-date through February. In China, the corresponding statistic is 10.0 percent. In Mexico, consumer prices are up 10.8 percent through March. Presumably, this inflation will continue to be exported to America in the form of higher priced clothing, food and household items. Thus far, many prices have been constrained due to productivity gains and the inability of producers to pass along input price increases (including those associated with oil prices) to consumers. But with the economy steadily improving, consumers are likely to face rising prices for many goods and services, and that will ultimately prompt the Federal Reserve to begin chipping
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M A R Y L A N D R E A L T O R ® June/July 2011
away at the massive monetary accommodation it has been providing to the economy (e.g., low interest rates, money supply creation) in the wake of the financial crisis that gripped us in September of 2008 and the accompanying Great Recession. If interest rates rise as expected, the housing market’s belated recovery would be delayed even further. REALTORS® and other housing industry stakeholders should pay close attention to inflation numbers over the summer. If rising prices begin to characterize a growing share of the nation’s economy (e.g., restaurant prices, hotel rooms, apartment rent), the Federal Reserve will be forced to act more quickly and perhaps in grander fashion with respect to contracting money supply and that would not be good for home sales.
What is Going On in Maryland? We Literally Don’t Know The title of this quarter’s piece sounds as if we are about to go off on a rant. Actually, that’s not the case at all. It’s just that the data characterizing economic activity in Maryland has become so volatile that one’s view of the state’s economy is likely to change like the weather – frequently. Coming into 2011, establishment data from the Bureau of Labor Statistics (BLS) indicated that the Free State added 26,000 jobs in 2010 or 1.0 percent to job totals. That represented reasonably solid performance and corresponded to the view that Maryland has been outperforming the nation along arguably the most important dimension – job growth.
If interest rates rise as expected, the housing market’s belated recovery would be delayed even further. REALTORS® and other housing industry stakeholders should pay close attention to inflation numbers over the summer.
But on March 25, we learned that the BLS had radically revised Maryland job growth data. After the revision, Maryland’s job growth for 2010 stood at 11,300 jobs, or 0.5 percent. That means that Maryland has been underperforming the nation, which seems counter-intuitive for a number of reasons, including base realignment, cyber-security, overall federal spending and overall federal spending growth.
Unemployment Rates By Maryland Counties, March 2011 COUNTY: March 2010 March 2011 Howard County, MD 5.5 5.1 Montgomery County, MD 5.8 5.0 Calvert County, MD 6.4 5.7 St. Mary’s County, MD 6.5 5.7 Charles County, MD 6.4 5.8 Frederick County, MD 7.0 6.3 Anne Arundel County, MD 7.1 6.4 Carroll County, MD 7.3 6.4 Prince George’s County, MD 7.7 6.8 Queen Anne’s County, MD 8.0 7.1 Harford County, MD 8.1 7.2 Baltimore County, MD 8.0 7.6 Kent County, MD 9.1 7.6 Talbot County, MD 8.8 7.9 Garrett County, MD 9.6 8.0 Wicomico County, MD 9.5 8.4 Allegany County, MD 9.8 8.9 Caroline County, MD 10.5 8.9 Cecil County, MD 10.2 9.3 Baltimore City, MD 10.6 9.9 Washington County, MD 11.1 9.9 Somerset County, MD 10.8 10.1 Dorchester County, MD 11.7 10.9 Worcester County, MD 16.5 15.4 MARYLAND 7.7 7.0 UNITED STATES 10.2 9.2 Source: Bureau of Labor Statistics Even other Maryland employment data prove somewhat contradictory. For instance, the household survey upon which unemployment rates are based indicates that Maryland’s labor market remains considerably healthier than the nation’s overall. The state’s unemployment rate presently stands at 6.9 percent, the 13th lowest in the nation and roughly 2 full percentage points below the national average. All of this leaves us economists somewhat puzzled. Hopefully, future jobs data will be more consistent and permit simpler interpretation.
What this Means for Housing The recipe for housing market recovery is in place. The current economic environment is characterized by motivated sellers, plentiful choice, diminished prices, job growth and favorable mortgage rates.
Data characterizing consumer behavior suggest that households have become increasingly comfortable with the notion of spending, though gasoline prices have clearly dented a certain fraction of U.S. consumer purchasing power. All of this suggests that the housing market should be in a period of recovery now despite the overhang of foreclosures and shadow inventory. But that is largely not the case, including here in Maryland. Between March 2010 and March 2011, unit sales in Maryland declined 6.6 percent, including, for instance, a 10 percent decline in Talbot County, a 15 percent decline in Howard County and a 14 percent decline in Baltimore County. These three counties are highly diverse in terms of price points and the demographic profile of buyers. The fact that each of these three counties experienced unit sales declines over the past year reflects a still broadly weak housing market. Of course, these three jurisdictions were hardly alone. Of Maryland’s 24 jurisdictions, 14 experienced a decline in sales volume over the past year. Sales gains were observed, however, in a number of jurisdictions affected directly or indirectly by base realignment, including in Harford County (+15%), Cecil County (+2%) and Calvert County (+51%). Those who monitor the housing market will also note that comparing year over year sales totals for March is at least partially an exercise in comparing apples and oranges. Last year, federal tax credits were still affecting the housing market. Today, the housing market is required to continue its track of recovery in the absence of tax credits. Nonetheless, even markets that are generally not associated with a large proportion of first-time buyers have experienced a downturn in sales volume over the past year (e.g., Allegany County, down 21 percent in unit sales year-over-year). Average and median price data also reflect a market that remains largely in disequilibrium and impacted by the specter of large numbers of distressed sales. For instance, in Baltimore City, unit sales volume is up 3.2 percent year-over-year despite the absence of first-time and move-up buyer tax credits, but median sales price has swooned from $109,500 a year ago to just $52,000 in March 2011. This 52.5 percent decline is an indication of just how profound the impact of foreclosures and short sales is in that market. In Prince George’s County, a jurisdiction also disproportionately affected by distressed sales, has experienced a decline in median sales prices of 19 percent year-over year.
M A R Y L A N D R E A L T O R ® June/July 2011
23
Economic Forecast
Continued from page 23
Fully 19 of Maryland’s 24 jurisdictions have experienced a decline in median sales price over the past year, though Baltimore City’s price decline has been the most severe. With respect to average sales price, 15 of Maryland’s jurisdictions have experienced a year-over-year decline. Average price statewide is down 2.2 percent over the past year, falling from $271,961 in March 2010 to $265,883 one year later. This is not to suggest that there are no signs of recovery. It is simply that the marketplace is healing very slowly, in part because many prospective buyers have chosen to embrace a wait and see attitude in the context of declining prices. One of the key indicators of home prices nationally is the S&P/Case-Shiller Home Price 20-City Composite Index. In February, the 20-City Composite was down 3.3 percent from February 2010 levels, with Washington, D.C. the only market to post a year-over-year gain, an annual growth rate of 2.7 percent. The 20-City Composite is now virtually back to its April 2009 lowest value and the 10-City Composite is just 1.5 percent above its all-time low. The economics of deflation have apparently convinced many buyers that they can afford to wait. There
may also be a cultural shift taking place in America, with a greater fraction of households convinced that for now renting is more advantageous than ownership status. Despite these considerations and the absence of federal tax credits, pending unit sales in March were up 9.3 percent from a year ago and the active inventory of unsold homes has declined from 37,037 last March to 36,468 this March. In other words, the recovery in the broader economy is gradually permeating the state’s housing market. With economic leading indicators generally suggesting that further improvement is ahead for the broader economy, the housing market is positioned for ongoing improvement through the summer and beyond. However, the marketplace won’t truly become dynamic until the overhang of excess inventory, including in the form of distressed properties, is more meaningfully whittled away. Once that occurs, prices will begin to rise again, setting the stage for greater urgency among prospective home buyers. Anirban Basu, Sage Policy Group, Inc.
GRI – The Next Level
Here’s what you can expect from attending GRI –
■ networking and referral opportunities
■ increased knowledge on a wide array of topics and skill enhancements
■ confidence building through in-depth knowledge, skills training and better understanding of industry practices ■ earn a national designation which has proven greater income potential ■ receive continuing education credits, and
■ earn credits toward your broker/associates broker’s license.
Why wait? For class schedules and program details, visit www.mdrealtor.org. Click the Education tab and scroll to REALTOR® Institute (GRI), GRI Overview. 24
M A R Y L A N D R E A L T O R ® June/July 2011
Why Top Associates Partner with Coldwell Banker
“
Coldwell Banker provides me with today’s cutting edge tools to harness the power of the internet. I can do more for my clients as a Coldwell Banker agent and that is what matters most to me…my clients needs always come first. My office is like a family. We care about each other and the needs of the communities we serve. Through the Cares Foundation and charitable giving programs, Coldwell Banker agents have the ability to help others and that is really important to me.
“
“
~ Nancy Hulsman, Sales Associate
Coldwell Banker is a name that defines real estate excellence and professionalism and I benefit as an agent by being associated with such a well known brand. Even though Coldwell Banker is a national brand, I feel I am working for a local, small town company because of the personal guidance, training and support I receive daily from my manager. It’s that type of support that drives me to deliver exceptional results for my clients everyday!
“
I enjoy working with Coldwell Banker Residential Brokerage because of the very strong world-wide name recognition. Coldwell Banker provides us with the latest tools and technology to help us assist our clients and customers in this complex market today. They give us the infrastructure needed to get the job done! This is a win-win situation for everyone!
“
“
~ Kellie Langley, Sales Associate
~ Cindy Spieczny, Sales Associate
If you are ready to challenge your limits, your thinking and yourself, then Coldwell Banker is the place for you. Join the more than 96,600 experienced sales professionals at Coldwell Banker who have Discovered the Difference Use your mobile device to learn more about Coldwell Banker
careerscb.com • 1-866-559-2272 ©2011 Coldwell Banker Real Estate LLC. Coldwell Banker ® is a registered trademark licensed to Coldwell Banker Real Estate LLC. An Equal Opportunity Company. Equal Housing Opportunity. Owned and Operated by NRT LLC.
Maryland Association of REALTORS®
2011 Annual Conference and Tradeshow September 12 –14, 2011 Roland E. Powell Convention Center Ocean City, Maryland New this year! GREAT Networking Opportunities during the Grand Opening Cocktail Party on Monday PM and the Happy Hour with Exhibitors on Tuesday PM
Keynote presenter Steve Harney will present “Keeping Current Matters” on Monday during Lunch
YPN Networking Event After the Grand Opening Cocktail Party at the Convention Center. This event is geared toward REALTORS® 40 and under. $10 pre-register, $20 at the door.
register online www.mdrealtor.org
go to:
www.mdrealtor.org/ Events/2011AnnualConference.aspx UNDER ‘PROGRAMS AND EDUCATION’ TAB SPECIAL HOTEL RATES FOR CONFERENCE ATTENDEES STARTING at $49 PER NIGHT, PLUS TAX M A R Y L A N D R E A L T O R ® June/July 2011
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monday, September 12 7:30 AM
Registration Opens
8 AM
NAR Directors Breakfast (NAR Directors only)
8–11:15 AM
MREC Supervision Brokers, Branch Office Managers & Team Leaders Al Monshower, Esq. (3 hours, Broker Supervision, Course #617-1604)
8:30–11:45 AM
MREC Agency—Residential (3 hours, Agency, Course #616-1604)
8:30–11:45 AM
Ethics (3 hours, Ethics CE Pending)
8:30–11:45 AM
Real Estate Consulting Essentials—Part I (3 hours, Professional Enhancement CE pending)
monday, September 12 HIGHLIGHTS
Colin McGowan Tom Drechsler Syd Machat
8:45 AM–12 PM Social Marketing: The Money Magnet
Gee Dunsten
11:30 AM
MAR Board of Directors Meeting & President & Shining Star Awards Presentation
12 NOON
Light Lunch & KEYNOTE
1:30–3 PM
Risk Reduction for Brokers/Managers (1.5 hours Professional Enhancement CE pending)
2–5:15 PM
Legal & Legislative Update (3 hours, Legal & Legislative CE pending)
2–5:15 PM
Real Estate Consulting Essentials—Part II (3 hours Professional Enhancement CE pending)
2–5:15 PM
I’m Not Making Money Using Facebook…So What’s the “Secret Sauce?”
Gee Dunsten
2:30–4 PM
Pricing to Sell—How to Convince the Seller
Steve Harney
3–4 PM
Tune Up with MRIS MRIS
4–5:30 PM
Commission Update (1.5 hours, Legal/Legislative CE pending)
5–7 PM
Grand Opening Cocktail Party plus Tradeshow Learning Labs
6:30–7:30 PM
NEW this YEAR Young Professionals Network Event (YPN) $$$
Steve Harney Al Monshower, Esq.
8–11:15 AM MREC Supervision Brokers, Branch Office Managers & Team Leaders
Brokers & Office Managers only – MREC Supervision presented by Al Monshower. Register early. Seating is limited. 2:30–4 PM Pricing to Sell — How to Convince the Seller
with Steve Harney Charles A. Kasky, Esq. Syd Machat
Use current trends to your advantage to educate and inform sellers on pricing strategy.
Kathie Connelly
Executive Director Maryland Real Estate Commission
Tuesday, September 13 7:30 AM
Registration Opens
8:30–10 AM
Fair Housing (1.5 hours, Fair Housing CE pending)
8:30–11:45 AM
MREC Agency—Residential (REPEAT) (3 hours, Agency, Course #616-1604)
8:45 AM–12 PM Contract Analysis (3 hours, Professional Enhancement CE pending)
Tuesday, September 13 HIGHLIGHTS Deborah Hutson Charles A. Kasky, Esq. Tom Drechsler
10:30–11:30 AM Tune Up with MRIS (REPEAT) MRIS 10:30 AM–12 PM Real Estate Tax Law Update (1.5 hours Professional Enhancement CE pending) 10:30 AM–12 PM The New Interactive Web (1.5 hours, Technology CE pending) 10:30 AM–12 PM OOOPS! Keeping Risks Under Control (1.5 hours, Professional Enhancement CE pending) 2–3:30 PM
Fair Housing (REPEAT) (1.5 hours, Fair Housing CE pending)
2–3:30 PM
Durable Listing Practices (1.5 hours, Professional Enhancement CE pending)
Linda DeMarlor
10:30 AM–12 PM The New Interactive Web
Using the latest technology tools, Amy Chorew will show you how to successfully manage real estate transactions.
Amy Chorew Allison Mooney Deborah Hutson Allison Mooney
register online 28
M A R Y L A N D R E A L T O R ® June/July 2011
register online
Tuesday, September 13
continued
2–5:15 PM
Legal & Legislative Update (REPEAT) (3 hours, Legal & Legislative CE pending)
2–5:15 PM
Raising the Real Estate Professional Bar (3 hours, Professional Enhancement CE pending)
2–5:30 PM
Staying Connected with Today’s Consumer (3 hours, Technology CE pending)
3–4 PM
Tune Up with MRIS (REPEAT) MRIS
4–5:30 PM
Decoding the Real Estate Blueprint…Discover the Systems for Success
4–5:30 PM
Financial Planning
4:30–6:30 PM
Happy Hour with Exhibitors
Diamonds Tuesday, September 13th, 6:30 PM
Denim & Diamonds Cocktail Reception & Recognition Banquet/Installation of Officers Elegant “Denim & Diamonds” reception featuring a “wine tasting” from a leading Maryland winery followed by a fabulous Gourmet Buffet and a special evening for the installation of 2012 MAR President, Pat Terrill and elected officers. An exceptional recognition ceremony including the announcement of the winners of the REALTOR® of the YEAR, Community Action and REALTOR®
Charles A. Kasky, Esq. Frank Serio Amy Cherow
Koki Adasi-Efuya Linda DeMarlor
Tuesday, September 13 HIGHLIGHTS 4–5:30 PM Decoding the Real Estate Blueprint… Discover the Systems for Success
Koki Adasi-Efuya will provide surefire ways to use database management to generate leads and tips to create a brand that will last.
Excellence (CARE), and other esteemed industry awards. Cocktail attire OR dress up your favorite blue jeans with a tuxedo jacket. For the gentlemen—from black tie and cocktail attire to sport jacket and jeans, or choose a combination of both! For the ladies—from cocktail dresses to your favorite denim and sequined blouse, feel free to mix it up and add your diamonds! Sponsors: Prudential Carruthers REALTORS®, Lynette Bridges-Catha, REALTOR®, Coastal Association of REALTORS® Cost $65
Wednesday, September 14 HIGHLIGHTS
Wednesday, September 14 8 AM
Registration Opens
8:30–11:45 AM
At Home with Diversity (6 hours, Professional Enhancement CE pending)
8:30–11:45 AM
CRS 112—Guiding the Buyer in the Distressed Property Market (6 hours, Professional Enhancement CE pending)
8:30–11:45 AM
e-Pro® (3 hours, Technology CE pending)
8:30–11:45 AM
Ethics (REPEAT) (3 hours, Ethics CE pending)
8:30–11:45 AM
Legal Hot Topics (3 hours, Legal & Legislative CE pending)
9–10:30 AM
Taking the HYSTERICAL out of Historic Homes (1.5 hours, Professional Enhancement CE pending)
9–11:15 AM
WHC—Bridging the Gap between Availability and Affordability (2 hours, Professional Enhancement, Course #615-1604)
Steve Pearson
1–3:15 PM
WHC—Federal Programs and National Initiatives (2 hours, Professional Enhancement, Course #613-1604)
Steve Pearson
1–5:30 PM
CRS 112—Guiding the Buyer in the Distressed Property Market (continued)
1–5:30 PM
At Home with Diversity (continued)
1–5:30 PM
e-Pro® (continued)
Amy Cherow
3:30–5:45 PM
WHC—State & Local Programs (2 hours, Professional Enhancement, Course #614-1604)
Speaker: TBA
Barbara Fairfield Frank Serio
9–11:15 AM Workforce Housing Courses that count toward the Workforce Housing Designation • Bridging the Gap
Amy Cherow Deborah Hutson Charles A. Kasky, Esq.
Steven Showalter
Frank Serio
Barbara Fairfield
• F ederal Programs and National Initiatives • State & Local Programs
50/50 Raffle Drawing 50/50 Raffle Tickets Purchase 1 ticket for $5 or 5 tickets for $20. All proceeds to benefit the Partnership for Housing Foundation. Drawing is Wednesday, September 14 during the Exhibit Hall Brunch.
50/50 drawing
Need not attend conference to participate. Will benefit the Partnership for Housing Foundation. M A R Y L A N D R E A L T O R ® June/July 2011
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‘Best Value ’ Registration option: 3-day registration includes ONE ticket to: • Monday’s Keynote & Light Lunch • Tuesday’s Light Lunch with Exhibitors • Monday’s Grand Opening Cocktail Party • Tuesday’s Happy Hour with Exhibitors • Wednesday’s Exhibit Hall Brunch Continental Breakfasts, Refreshment Breaks, Conference gift, and full access to the Tradeshow, and Learning Lab sessions Monday/Tuesday.
PLUS
REALTORS® and MAR Affiliate members: Thru June 1 - $195 June 2 – August 15 - $245 Onsite – $275 (Cash & Credit Cards ONLY – NO Checks will be accepted On-Site)
!
NEW THIS YEAR
Rookie REALTOR® $50 off 3-day registration $50 Discount does not apply to on-site registrations.
Don’t forget to Register for the rookie Luncheon on Tuesday $10
– No ID, No CE
Newly enacted Maryland Real Estate Commission Continuing Education (CE) rules require that everyone must have their identification verified (photo ID required) before entering the class. It is important that you arrive early to your CE classes for check-in. It is also required that we obtain your MD Real Estate License Number which can be provided ahead of time when you complete your online registration form.
No ID,
No CE
Eligibility for Continuing Education (CE) Credit: Course registration is REQUIRED at the time of Conference registration. MAR does not guarantee class availability if classes are not selected at the time of registration. Classes are available on a first-come, first served basis. Additional courses, changes and/or filled class status will be posted on the MAR website under http://www.mdrealtor.org/Events/2011AnnualConference.aspx • You MUST arrive on time. Arrive EARLY for session check-in. • NEW! You are REQUIRED to show a photo ID to gain entrance to each class. • NO CE credit will be given once the session has started. NO EXCEPTIONS. • Full session attendance is required. • CE will not be given unless participant is registered as a 2011 Conference Attendee once the class begins. • All electronic devices MUST be turned off while the class is in session. • Please allow at least 30 days for post-Conference CE processing.
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MD REAL ESTATE COMMISSION LICENSING REQUIREMENTS IF YOUR LICENSE EXPIRES ON OR AFTER 10/2/08, HOURS NEEDED ARE: • Residential (ALL LICENSEES): 15 hours including 3.0 Legislative (A), 1.5 Fair Housing (C), 3.0 Ethics (D) (required classes) • Commercial Designation (SOLELY - NO RESIDENTIAL BUSINESS): 15 hours including 3.0 Legislative (A) & 3.0 Ethics (D)(required classes) • Licensees with a graduate degree in law or real estate from an accredited college or university (must supply documentation at audit): 7.5 hours (3.0 Legislative (A), 3.0 Maryland Ethics(D) and 1.5 Fair Housing (C) (Residential); if solely commercial, 7.5 hours including 3.0 Legislative (A) 3.0 Maryland Ethics (D) and 1.5 elective) (required classes) • Legislative topic (A), fair housing topic (C), and ethics topic (D) are required Maryland courses. The ethics course must include MD Code of Ethics, Flipping and Predatory Lending. Source: http://dllr.maryland.gov/license/mrec/ mreceducreq.shtml (04/11)
register online M A R Y L A N D R E A LT O R
®
June/July 2011
Pe n Fe d R e a l t y i s a m e m b e r o f t h e Pe n t a g o n Fe d e r a l Cr e d i t U n i o n f a m i l y.
Our Growth is your growth. “Best kept secret in town.” – PenFed Realty Agents
PenFed Realty invests in your growth. Join our winning team today. For every motivated and hard working agent, we offer: 80/20 split on your business 100% commission after company cap Loyal, consistent, and qualified leads Transparent lead distribution Unmatched marketing and business development opportunities with PenFed member direct advertising, PenFed branch promotions, military tabling events, and on site customer training seminars. Free photo ads for your listings in the Washington Post Free enhanced showcase listings on Realtor.com Free enhanced listings on Trulia and WashingtonPost.com Free listing syndication on major internet real estate channels No monthly fees, no administration fees Maryland: Bob Moorman 301-980-2281 DC & No. Virginia: John Sabo 703-216-8222 Careers@PenfedRealty.com • www.PenfedRealty.com
2657 C Annapolis Road, Ridgeview Plaza, Hanover, MD, 21076 • 410-519-4221 Please visit our Web site for other locations.
Take a ‘walk around’
Marylandhomeownership.com is a consumer site designed to promote homeownership and offer information to consumers, whether they are homeowners or getting ready to sell or purchasing a home. The broad scope of current and useful information can also be used by you as a REALTOR® to stay abreast of programs specifically pertinent to Marylanders. MAR has gathered many resources and placed them where you, your clients and the public can access them easily. A colorful widget is accessible to REALTORS® as a link from their website to Marylandhomeownership.com. We encourage you to take a “walk around” the website to
become familiar with the array of useful articles and information. There are checklists for “Getting Your Home Ready to Sell” and “Pricing Your Home to Sell” which can be used in presentation kits for sellers. If you send regular communications to your favorite clients, you will want to send them “Ten Tips to Maintain Your Home.” If you are working with a first-time homebuyer, send them “Home Closing Procedure.” Be sure to check out the index on “Available Financing Programs” for current federal, state and local programs and follow the link to www.mdhomeprograms.com for more detailed information.
FAQs for HOMEBUYERS/SELLERS The Frequently Asked Questions section (FAQs) answers the most common inquiries, such as the 3 most important steps to take before buying a home in today’s market are: 1. Improve your credit score; 2. Increase your household savings/reserves; 3. Be prepared to make a minimum cash down payment of 3% to 5% of the sales price.
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M A R Y L A N D R E A L T O R ® June/July 2011
UPDATE YOUR PERSONAL NAR PROFILE The site connects directly with the NAR search program “Find a REALTOR®.” You’ll want to make sure your NAR membership profile is up-to-date with your designations, the languages you speak, and your niche or specialty so that potential consumers can find you when they search for a great match.
Fresh Maryland-specific content for consumers and clients is added regularly to keep them informed as they navigate through buying or selling homes. Here are a few useful tools: • “ Buying a Home” – Tools to help calculate how much house a buyer can afford, information on the mortgage and home inspection processes, and a full index of national, state and local financing programs and a link to homesdatabase.com • “Moving to Maryland” – Tips for new homebuyers and renters relocating to Maryland. • “Selling A Home” – Information to help understand the process and make a home more marketable. • “ Homeownership Sustainability” – Information about maintaining property, avoiding foreclosure, as well as listings of certified nonprofit housing counselors in communities who can help navigate the foreclosure process and avoid scams.
HouseLogic A RESOURCE FOR REALTORS® AND CONSUMERS Marylandhomeownership.com includes a link to HouseLogic.com, NAR’s homeownership site. This nationally-focused site includes embedded videos, articles, and other information about maintaining, protecting and increasing the value and livability of owning a home.
Let Us Know How We’re Doing Take a tour of www.marylandhomeownership.com, download the widget to connect your clients and customers to a wealth of meaningful information. We welcome your comments and content suggestions—send them to us at info@marylandhomeownership.com.
OTHER RESOURCES Other helpful Maryland specific resources: Maryland Life magazine (www.marylandlife.com) is an excellent source of information about life in Maryland. The site includes other magazines as well as event listings, information on traveling in Maryland, dining and an on-line forum. Towson University offers specific information for military personnel and their families who are relocating to Maryland as well as for people who are simply relocating for a new job. The site, www.towson.edu/financialskills/maryland/, includes specific information for BRAC employment, regional and county resources, and information on choosing a Maryland location, K-12 public schools, higher education, and resources for higher education and incentives. It also includes information on the Maryland state taxes and resources for housing, employment and vehicle registration.
Fair and Accurate Credit Transactions Act (FACT or FACTA) allows consumers to request and obtain a free credit report once every twelve months from each of the three nationwide consumer credit reporting companies - TransUnion, Experian and Equifax. Consumers may contact them individually, or go to a central website, www.annualcreditreport.com, to obtain free access to annual credit reports. Nonprofit housing counselors are an important resource for consumers. They can provide counseling on debt management, home buying, mortgage delinquency and predatory lending. Get the listings and information about where to find them and how they can help your buyer.
M A R Y L A N D R E A L T O R ® June/July 2011
33
From the Hotline Charles A. Kasky, Esquire
Independent Contractors in Real Estate – Know the Rules
Q.
I am the broker of a small company. I know that I am required to
Generally, the question of who is an employee and who is an independent
take a class on Supervision, but I thought that my ability to direct the
contractor is important and often complex. Moreover, the financial
activities of licensees affiliated with my company was limited because
consequences in making this determination are significant for both
they are independent contractors. Please clarify the relationship between
workers and employers. For workers, these consequences include
a real estate licensee and a supervising broker or branch office manager.
entitlements to minimum wage and overtime pay, unemployment
A. I’ve encountered this and related questions as I travel throughout
contributions, federal and state tax withholdings, protections against
Maryland teaching the new classes in Agency and Supervision. The
illegal employment discrimination, etc. At stake for employers are the
attorneys who staff the MAR Legal Hotline have answered similar
financial and legal obligations in complying with these federal and state
questions.
requirements.
Many licensees cling to the mistaken belief that because they are
Real estate licensees enjoy a special IRS classification as Statutory
independent contractors, brokers and managers cannot supervise them by,
Independent Contractors under a 1992 federal law. The law applies for
for example, requiring their attendance at sales meetings. This is incorrect.
federal tax purposes. In other words, a “statutory non-employee” is a real
Although licensed real estate salespersons and associate brokers are
estate agent who, but for this law, could be an employee for tax purposes.
classified as independent contractors, brokers and branch office managers
Such a person is treated as an independent contractor for tax purposes even
are required by law to provide reasonable and adequate supervision over
when, applying the normal rules, he or she might have been an employee.
the activities of licensees affiliated with that firm or office. This apparent
The tax treatment of such a person is the same as for any other independent
contradiction can be explained.
contractor.
FREE Legal Hotline 34
benefits, workers’ compensation benefits, Social Security employer
1-800-888-1272 • Monday, Wednesday and Friday • 10am – Noon and 2 pm – 4 pm www.mdrealtor.org • Complete an Online Form available in the Legal Hotline tab
M A R Y L A N D R E A L T O R ® June/July 2011
Prior to that, the common-law tests of control of work were used, as well as other tests applied by the IRS. These tests also took into account how the agent was paid for his or her efforts. The uneven application of the rules by the IRS to the real estate industry resulted in Congress passing the law creating the status of statutory independent contractor. The single biggest reason for the confusion is the fact that, even though agents are independent contractors, brokers and managers are, by law, required to supervise their activities. In the real estate industry, you are an independent contractor if: n You are a licensed real estate salesperson; n Your income is related to sales and not hours worked; and n You and the broker have signed a written independent contractor agreement. A written independent contractor agreement between the real estate agent and the broker would state the fact that the agent is to be treated as an independent contractor for federal tax purposes. However, this has no impact on the legal duty of supervision placed on brokers and managers. In Maryland, special laws created a similar category of independent contractor for the real estate industry, which allows real estate firms to hire independent contractors and exempts them from payment of unemployment and workers’ compensation insurance premiums.
What are your colleagues saying about PRO$ ? Clients look to you for expertise. Look to PRO$ for the right answers when it comes to oilheat.
“I liked the PRO$ presentation
because it was so educational. You weren’t selling anything. Costs and underground oil tanks are always hot topics for Realtors. ”
—Sharon Callahan, Branch Manager Coldwell Banker Residential Brokerage
“All of our offices need to hear your presentation. I’m setting up a regional meeting just for PRO$!”
—Jay Wise Sales Manager Prudential Carruthers
State tax treatment follows federal law. Independent contractor status in these circumstances is a special category of “nonemployee,” and is purely a tax-related rule. It has no impact on the legal requirements concerning supervision. Do not confuse independent contractor status in the real estate industry with a business consultant, for example. Consultants are independent contractors because they meet other standards. Real estate licensees are independent contractors because the law says they are, and Maryland law also says that they are subject to the supervision of brokers, branch office managers and team leaders. Charles A. Kasky, Esquire, Vice President of Legal Affairs Maryland Association of REALTORS®
Schedule a 15-min. presentation: call 866-807-PRO$ (7767), visit www.md.oilheatpros.com, or email SJanett@oilheatpros.com.
ay ! C o n n e ct t o d
M A R Y L A N D R E A L T O R ® June/July 2011
35
Regulation News Mark Feinroth
Final Continuing Education
Regulations
After nearly two years of effort, the Maryland Real Estate Commission has modified its regulations governing the conduct of continuing education. The regulations were adopted by a unanimous vote at the March 16, 2011 meeting of the Commission, published in the Maryland Register on April 8, and became effective ten days later on April 18. The Maryland Association of REALTORS® participated in the process of developing the draft regulatory proposals, and we commented in writing following the Commission’s formal publication of the proposed regulations. Several of our recommendations were incorporated into the final regulation adopted by the Commission. The new regulation is detailed and lengthy. Highlights of the more important provisions:
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conference or convention. Classrooms where real estate continuing education is taught must comply with applicable fire, safety, zoning and Americans with Disabilities Act requirements. Meal breaks are mandatory for courses scheduled for more than four hours in one day. 4. A new rule obligates all students to show picture identification to be admitted to a continuing education class.
The regulations make it clear that a student may be denied entry to a continuing education classroom or denied credit for the class if the student takes into the classroom reading materials unrelated to the class or consults any personal electronic communication devices.
1. The regulations establish an Education Committee, composed of members appointed by the Chairman of the Commission. The Committee is empowered to review Commission staff decisions to deny approval of a course provider. If the Committee also declines to approve the provider, the matter is referred to a Commission hearing panel, whose decision is final.
Any student who arrives for the class after instruction begins or leaves before the class is dismissed may not receive credit. A student will also be denied credit if out of the classroom more than five minutes during any 60 minute classroom period.
2. The new regulation includes detailed standards for course content, providers, advertisements and classroom facilities, including requirements to provide qualified instructors and monitors.
The new regulations are posted on the MAR website at http://mdrealtor.org/Legislative/GovernmentAffairsNews/articleType/ ArticleView/articleId/421.aspx. Please feel free to contact me directly at mark.feinroth@mdrealtor.org if you have any question regarding these or
3. The course approval procedure is spelled out, and includes a requirement for providers to apply for a course approval at least 30 days prior to the date a course is first offered. In advertisements for the course, providers may not identify a sponsorship of the course unless the course is offered as part of a larger event such as a
any other regulations effecting real estate brokerage.
M A R Y L A N D R E A L T O R ® June/July 2011
Mark Feinroth, Esquire, Director of Legal and Regulatory Affairs Maryland Association of REALTORS®
Maryland Real Estate Commission News Katherine Connelly
Agency Intricacies Many real estate licensees have seen the February 7, 2011 email sent from
the licensee’s other clients” unless the former client consents in writing.
the Maryland Real Estate Commission regarding open houses and the
A majority of the members of the Maryland Real Estate Commission have
efforts of licensees who hope to find buyer clients while hosting an open
concluded that it is therefore acceptable for a licensee to enter into a
house. Judging from the volume of telephone calls, email and questions
buyer’s agency agreement with a buyer the licensee met at an open house
received by Real Estate Commissioners and our staff since the email was
who wishes to make an offer on that same house so long as the licensee
sent, it seems that a further explanation might be helpful. The simplest
notifies both the buyer and seller that the agent owes a duty of
general rule for practitioners to observe is that during an open house the
confidentiality to the seller concerning any confidential information the
agent owes his or her duty of loyalty to the seller and must avoid any
agent may have learned in connection with the open house.
conduct that violates that duty. The previous guidance was not intended to prohibit an agent at the open house from gathering contact information
We recommend that brokers ensure that if these kinds of agency
and following up with prospective buyers. The simple rule is to not engage
relationships arise, both the buyer and seller acknowledge in writing that
in buyer representation during the open house at the seller’s property.
they do not object to the arrangement. The agency acknowledgement must be after the open house and prior to the offer being written. This is
One scenario that has generated discussion involves an agent who is not
not meant to be construed that a blanket waiver of agency is allowed.
the listing agent but who sits on the open house and meets potential buyers. At the open house, the agent provides agency disclosure forms
The agency provisions of the Real Estate Brokers Act are challenging for
that they represent the seller when prospective buyers express an interest
all of us and it is the reason the Commission sought legislative authority
in the property. After the open house, the agent follows up with those
in 2010 to require licensees to regularly review the law governing agency
prospects and asks if they are interested in buyer representation. The
in real estate brokerage. The Commission will continue to address
question is whether a licensee who sat at the open house can represent a
practical agency problems that confront licensees and we ask and welcome
buyer he or she first met at the house if that buyer expresses an interest in
you to contact us (www.mrec.dllr.state.md.us) with your questions and
that specific property. The answer is yes, with caveats.
comments. It is through this avenue of communication that the Commission is able to assist you in complying with the laws and
Nothing in the Real Estate Brokers Act states that the agent is prohibited
regulations of the Commission.
from entering into a buyer agent agreement with this buyer. There is, however, a requirement in Title 17 Sec. 532 (3) that a licensee who receives confidential information “may not disclose that information to: (i) any of
Katherine Connelly is the Executive Director of the Maryland Real Estate Commission For more information, visit http://www.dllr.state.md.us/license/mrec
M A R Y L A N D R E A L T O R ® June/July 2011
37
Metropolitan Regional Information Systems, Inc.
Market Your Way with Media Connect
Buckle-up, you’re in the driver’s seat with Media Connect. MRIS recently
Media Connect replaces scene codes with the following three-part system
overhauled Keystone Photo Upload (KPU) to let you describe photos in
to label photos quickly:
your own words, giving a final farewell to the 157-choice “scene code” pick list. More freedom and more control; it’s all available with Media Connect.
n Category (Required) – Provides a consistent way to classify and compare “like” photographs, with 15 simple choices.
Save time and expedite the search process by dropping listings that just
n Caption (Required) – Shown with the photographs in Matrix displays.
don’t make the cut. Media Connect syncs real estate in real time, and
Freeform text field lets you convey the key selling points in the photo
helps get your clients into their dream home faster than ever before!
with a 50-character limit.
Media Connect not only makes uploading multiple photos painless, it
n Description (Optional) – Shown in the Media Center on the Matrix
also makes marketing your listings easy. Upload photos now, add captions
Full listing to fully describe the details of the photo with a
later, and submit to the MLS only when you’re ready. Feel confident your
250-character limit.
listings will always be viewed as a complete package. New displays in Matrix offer the option to present your search results in By eliminating scene codes, Media Connect does away with confusing
pictures, instead of listing data, much like on HomesDatabase.com.
labels. As Tim Campbell, Keystone Product Manager, explained, “With
Quickly view the kitchen of one house and directly compare it to the
KPU, you might have selected between Master Bedroom One and Master
kitchen of another with the identical search criteria. The 15 categories
Bedroom Two. But did that mean there were two photographs of the same
allow you to compare these “like” photographs, and offer your clients a
Master Bedroom or are there two Master Bedrooms? Eliminating scene
side-by-side comparison view of kitchens, living rooms and more of
codes and incorporating open-ended descriptions ensures those questions
listings that already meet their search criteria.
will never be asked again. The answer lies in the caption.” For more information, go to www.mris.com
38
M A R Y L A N D R E A L T O R ® June/July 2011
Snippets REALTOR® Toolkit for Marketing and Technology News The REALTOR® Toolkit is a compilation of noteworthy articles selected from nearly 7,000 sources that provide information and ideas on marketing and technology to help you improve your business. Delivered directly to you by electronic mail twice per month, the REALTOR® Toolkit focuses on productivity solutions dealing with communication
5 ‘Most Innovative’ Mobile Apps PC World recently released its top picks for most innovative apps for 2011 — mobile apps for tablets and smartphones that have the potential of making your life easier. Here are five free apps that made the list for iPhone or Android:
tools, web-based technology, effective marketing techniques, MLS issues, success stories and more. This valuable benefit is emailed to members twice a month FREE—no subscription costs. To ensure that you receive the REALTOR® Toolkit for Marketing and Technology News contact
1. www.Fring.com
info@mdrealtor.org and to access back issues of the
An upcoming version of this app will offer free video group calls with up to four people at once (A beta is currently available at www.fring.com/blog/?p=2857). Platform: Apple’s iOS, Android Price: Free
2. www.UpSoundDown.com You can put your phone on speakerphone mode automatically by just laying your phone down on a table or turning the phone upside down like you’re using it as a microphone. When you pick the phone back up, you’ll be able to use the handset again. Platform: Android Price: Free
REALTOR® Toolkit, www.mdrealtor.org/Publications/ Toolkits/REALTORToolKit.aspx
4. Adobe Photoshop Express You can manipulate photos using this app’s simple features on your iPhone or iPad and then store your photos on the Internet to access from anywhere. Coming soon: Photoshop for iPad at www.macrumors.com/2011/03/31/adobe-shows-offphotoshop-for-ipad-with-layer-support/, which works like a desktop version of the Photoshop software, which includes layers and effect features (price to be determined for iPad version). Platform: Apple iOS Price: Free
3. www.Zite.com This app learns what you like to read and then scans your Facebook and Twitter feeds for news based on your reading habits. It then populates a virtual magazine with content that is tailored to your reading habits. Platform: Apple iOS Price: Free
40
M A R Y L A N D R E A L T O R ® June/July 2011
5. www.iSwifter.com Monday-Friday • 9AM- 6PM
iPad lovers will appreciate this app, which allows you to watch Flash videos and view Web site animations. Platform: Apple iOS Price: Free
Scan and find out how
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An independently owned and operated member of The Prudential Real Estate Affiliates, Inc.
Residential Sales Anirban Basu
Maryland’s Housing Market
Limps into Spring
Signs of Broad-Based Market Improvement Remain Elusive A certain amount of lost momentum was to
The hope has been that the pace of broader economic recovery would
be expected. After all, a year ago federal tax
largely offset the absence of federal tax credits, leaving sales volume
credits were still inducing certain buyers
Maryland were off 6.6 percent from year ago levels. In April, precisely one
who would likely have chosen to retain a
year after the end of the federal tax credit period (one had to be under
wait and see attitude to purchase a home.
contract by April 2010 to qualify for the most recent round of federal tax
This was particularly true among first-time
credits), unit sales were down nearly 17 percent on a year-over-year basis.
homebuyers, who are more likely to be
Of Maryland’s 24 jurisdictions, fourteen experienced a decline in yearover-year unit sales volumes in March. The corresponding figure in April
induced to purchase by an $8,000 tax credit
was nineteen. The five jurisdictions to experience an increase in unit
than a move-up buyer is to be persuaded to
sales volume on a year-over-year basis include Kent County (+75%),
transact with a $6,500 tax credit. Moreover,
Caroline County (+41%), Worcester County (+28%), Garrett County
first-time homebuyers are not burdened by
42
roughly unchanged on a year-over-year basis. But in March, unit sales in
(+17%) and Baltimore City (+3.2%). Three of these jurisdictions are on the Eastern Shore and for the most part they are not structured to primarily
the need to sell an existing home, which
appeal to younger, first-time buyers. For example, the eastern shore
made it much easier for them to access the
counties of Worcester and Garrett are heavily marketed toward second
tax credits.
home purchasers, so the fact that both of these counties are on this short
M A R Y L A N D R E A L T O R ÂŽ June/July 2011
list suggests that the appetite for vacation/second homes is building.
in median sales price in March. In April, the corresponding statistic was
Baltimore City’s presence on this list of increased sales is largely a
seventeen jurisdictions. Statewide, median sales price fell 7 percent
reflection of the renewed appetite for properties among investors as well
between April 2010 and April 2011.
as the substantial volume of distressed sales in these communities. Average sales price was down 4.3 percent over this period from April 2010 This view fits neatly with data characterizing median sales prices. In both
to April 2011 statewide, with eighteen Maryland jurisdictions
March and April of this year, median sales price in Baltimore City fell
experiencing a decline in average price. There were six jurisdictions
below the $100,000 mark. In April, the city’s median sales price stood at
where average sales price increased: Kent County (+85%), Queen Anne’s
$95,000, nearly 26 percent below the median price one year earlier.
County (+32%), Allegany County (+12%), Howard County (+7%), Montgomery County (+3%) and Anne Arundel County (+2%).
Other jurisdictions experiencing sharp reductions in median sales price include Somerset County (-34%), Caroline County (-27%), Prince George’s
Not coincidentally, Howard and Montgomery counties presently boast
County (-18%), Worcester County (-15%) and Charles County (-14%). In
some of Maryland’s lowest amount of inventory measured in months. In
all, nineteen Maryland jurisdictions experienced a year-over-year decline
other words, jurisdictions characterized by fewer inventories are more likely to produce stable to rising prices relative to jurisdictions characterized by excess supply. Over the past year, only one Maryland jurisdiction experienced an increase in sales volume coupled with rising sales prices – Kent County, which in April represented 0.45 percent of total statewide sales volume.
Pending sales in March rose from 6,495 one year ago to 7,101 more recently, an increase of 9
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in April of 2010 due to the then imminent expiration of the tax credit. In April 2010, pending unit sales totaled 7,871 in Maryland; there were more than 1,500 pending sales in
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M A R Y L A N D R E A L T O R ® June/July 2011
43
Residential Sales
Continued from page 43
March 2011 vs. 2010 were 6,566 pending sales, a decline approaching 17 percent. Pending
Units Average Price
unit sales in Montgomery County were down nearly 23 percent on a
County 2011
year-over-year basis, but were up about 7.5 percent in Prince George’s
Allegany 38
County, likely a reflection of the heightened level of activity taking place among investors buying distressed properties there. In April, pending sales were down in all but two Maryland jurisdictions on a year-over-year basis. In addition to Prince George’s County, pending sales were also up in neighboring Charles County.
The active inventory of unsold homes stood at 37,767 in April 2011, down from 38,535 one year earlier. In absolute terms, active inventory has declined in eighteen Maryland jurisdictions over the past year, which is perhaps the most uplifting aspect of recent data characterizing the housing market.
2010 Change
2011
2010 Change
48 -20.8% $80,535 $103,307 -22.0%
Anne Arundel 394
411 -4.1% 366,858 333,298 10.1%
Baltimore City 487
472 3.2% 98,244 138,151 -28.9%
Baltimore County 483
563 -14.2% 228,493 254,323 -10.2%
Calvert 95
63 50.8% 327,753 285,049 15.0%
Caroline 18
20 -10.0% 137,047 147,158 -6.9%
Carroll 85
92 -7.6% 265,461 282,892 -6.2%
Cecil 57
56 1.8% 228,020 223,859 1.9%
Charles 129
124 4.0% 212,883 240,182 -11.4%
Dorchester 16
16 0.0% 161,556 143,179 12.8%
Frederick 202
251 -19.5% 268,275 258,878 3.6%
Garrett 21
16 31.3% 302,067 404,031 -25.2%
Harford 209
182 14.8% 245,313 245,172 0.1%
Howard 204
239 -14.6% 355,750 380,932 -6.6%
Kent 14 9 55.6% 194,457 314,806 -38.2%
However, measured in terms of months of inventory, the story is a bit less benign. Based on April 2010 sales volume, the months of inventory in Maryland stood at 7.0 months one year ago. Based on
Montgomery 756
839 -9.9% 450,671 398,807 13.0%
Prince George’s 730
810 -9.9% 174,456 200,976 -13.2%
Queen Anne’s 38
36 5.6% 280,405 386,511 -27.5%
Somerset 7 16 -56.3% 150,782 120,175
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M A R Y L A N D R E A L T O R ® June/July 2011
25.5%
St. Mary’s 74
89 -16.9% 250,447 295,739 -15.3%
Talbot 26
29 -10.3% 635,374 518,017 22.7%
Washington 93
96 -3.1% 135,480 155,271 -12.7%
Wicomico 49
59 -16.9% 141,998 157,916 -10.1%
Worcester 118
113 4.4% 239,194 298,607 -19.9%
Total 4,343 4,649 -6.6% $265,883 $271,961 -2.2% Figures reflect resales and new properties. Residential resales are reported by MRIS ® and local boards MLS systems.
April 2011 vs. 2010 April 2011 sales volume, which was substantially lower than the year-ago level, inventory is up to 8.2 months. Montgomery County’s inventory is down to 4.2 months, and anecdotal evidence suggests
Units Average Price County 2011 Allegany 41
2010 Change 44
2011
2010 Change
-6.8% $109,850 $97,920 12.2%
that the symptoms of a tight housing market have become
Anne Arundel 457
517 -11.6% 340,032 333,071 2.1%
increasingly apparent there, including bidding wars for individual
Baltimore City 464
539 -13.9% 124,112 149,518 -17.0%
Baltimore County 512
681 -24.8% 226,905 254,875 -11.0%
properties and buyers bidding in excess of asking price. Inventory is below 6 months of supply in Frederick County and below 7 months in both Howard and Prince George’s County. However, in thirteen Maryland jurisdictions, months of inventory is in double digits, with Talbot and Garrett counties both associated with more than 30 months of inventory based upon April’s pace of unit sales.
Looking Ahead With much of the impact of federal tax credits now removed from year-ago data, year-over-year comparisons should begin to look
Calvert 79
84 -6.0% 274,155 282,812 -3.1%
Caroline 24
17 41.2% 140,450 191,618 -26.7%
Carroll 122
130 -6.2% 276,843 297,477 -6.9%
Cecil 63 Charles 123
74 -14.9% 228,998 232,817 -1.6% 165 -25.5% 213,774 259,508 -17.6%
Dorchester 20
30 -33.3% 178,625 237,018 -24.6%
Frederick 215
274 -21.5% 239,533 250,783 -4.5%
better. The U.S. and Maryland economies continue to improve
Garrett 21
gradually and employment growth remains apparent. Mortgage
Harford 226
275 -17.8% 252,864 255,713
rates have remained incredibly well behaved and have actually been
Howard 219
275 -20.4% 412,782 387,471 6.5%
declining recently. All of this suggests that the marketplace should be positioned for incremental improvement over the months ahead, though ongoing declines in home prices as measured by an array of indicators will likely induce many prospective buyers to retain their wait-and-see postures. Anirban Basu, Sage Policy Group, Inc.
Kent 21
18 16.7% 320,310 377,722 -15.2% -1.1%
12 75.0% 342,286 185,099 84.9%
Montgomery 837 1,070 -21.8% 436,537 425,250 2.7% Prince George’s 702
863 -18.7% 170,275 199,179 -14.5%
Queen Anne’s 36
28 28.6% 427,346 324,886 31.5%
Somerset 13
14 -7.1% 97,215 128,850 -24.6%
St. Mary’s 85
94 -9.6% 283,157 286,262 -1.1%
Talbot 22
32 -31.3% 329,339 347,618 -5.3%
Washington 110
116 -5.2% 150,785 165,852 -9.1%
Wicomico 57
60 -5.0% 145,428 170,024 -14.5%
Worcester 152
119 27.7% 266,942 310,165 -13.9%
Total 4,621 5,531 -16.5% $270,082 $282,103
-4.3%
Figures reflect resales and new properties. Residential resales are reported by MRIS ® and local boards MLS systems.
M A R Y L A N D R E A L T O R ® June/July 2011
45
Commercial Connection Aimee M. Bader, Esquire
Maryland Green Building Initiatives
on the Rise
LEED® Public Comment Period Open July 2011
As global warming becomes a threat that most governments openly
This year the Maryland legislature passed House Bill 972, authorizing the
acknowledge, the focus on green building codes and voluntary green
use of the International Green Construction Code (IGCC) effective
building rating systems, such as the Leadership in Energy and
March 1, 2012.
Environmental Design (“LEED ”) standards, is taking the forefront in
governments to implement the IGCC as a voluntary compliance
Maryland.
alternative. Stuart Kaplow, Chair of the USBGC Maryland Chapter,
®
Maryland will now be the first state to enable local
reports that 14 local governments have already enacted LEED® based It’s not surprising that buildings are becoming the focus of the green
green building initiatives, including several that have mandatory green
movement. The Environmental Protection Agency says that buildings
building laws imposed on private buildings.
account for 70% of electricity consumption, 30% of energy use, 39% of all carbon dioxide emissions, 40% of raw materials use, 30% of waste
LEED® 2009, an internationally recognized green building certification
output (136 million tons annually) and 12% of potable water consumption.
system, is presently under revision. Green building stakeholders should take advantage of the second public comment period, open July 1 through
According to the U.S. Green Building Council’s (USGBC) Maryland
August 15, 2011. (The first public comment period, which closed January
Chapter, statewide there are over 900 projects participating in LEED ®
19, 2011, generated over 5,000 comments.) At the end of this process, a
Rating systems, 40 LEED Certified Buildings, and 520 LEED Registered
final draft will go before USBGC’s membership for a vote, and the
Projects.
new version will be delivered after 2012. For more information, visit
®
®
www.usgbc.org.
Aimee M. Bader, Esquire, Staff Attorney of Legal Affairs Maryland Association of REALTORS®
46
M A R Y L A N D R E A L T O R ® June/July 2011
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