Kentucky 速
REALTOR FALL 2008
A publication of the Kentucky Association of REALTORS速
Bridging the Generation Gap
Short Sales and Foreclosures National Housing Bill Safety Week
Contents
Volume 2, Number 1, Fall 2008
IN THIS ISSUE Bridging the Generation Gap 10 A publication of the Kentucky Association of REALTORS®
President Robert A. Damron Eastern Kentucky Association of REALTORS® President-Elect Jeffrey L. Smith Northern Kentucky Association of REALTORS®
National Housing Bill
16
Safety Week
19
Short Sales & Foreclosures
20
Treasurer John W. Smither, GRI Lexington-Bluegrass Association of REALTORS® Treasurer-Elect Santosh S. Bhatt, ABR, CRS Greater Louisville Association of REALTORS®
REGULAR FEATURES
Executive Vice President Susan W. Helm, RCE susiehelm@kar.com
President’s Message
5
Marketing/Communications Director Hunt Cooper hcooper@kar.com
Tools You Can Use
6
Legal Update
8
Address letters and inquiries to: Kentucky REALTOR® 161 Prosperous Place Lexington, KY 40509 TF 800.264.2185 T 859.263.7377 F 859.263.7565 www.kar.com email: hcooper@kar.com KAR members should always send address changes to their local board/association first. Subscription rates: $10 per year (included in dues) for members, $25 per year for nonmembers.
Kentucky REALTOR® is published quarterly (Fall, Winter, Spring, Summer) by the Kentucky Association of REALTORS®, 161 Prosperous Place, Lexington, KY 40509. Application to mail at periodicals postage rates is pending at Lexington, Kentucky. POSTMASTER: Send address changes to Kentucky REALTOR®, 161 Prosperous Place, Lexington, KY 40509. All articles represent the opinions of the authors and do not necessarily represent the opinions of Kentucky REALTOR® or KAR and should not be construed as a recommendation for any course of action regarding financial, legal or accounting matters by KAR or Kentucky REALTOR® and its authors.
Government Affairs
14
KREC Information
18
Local Association News
22
Housing Stats
25
Community Profile
26
From the Helm
28
Code of Ethics
29
A Day in the Life of...
30
Reproduction prohibited without permission. Copyright © 2008 Kentucky Association of REALTORS®, Inc. All rights reserved.
FALL 2008 KENTUCKY REALTOR® 3
KAR News
KAR Annual Convention & Expo The 2008 KAR Annual Convention & Expo will be held in Covington, Kentucky at the Northern Kentucky Convention Center and Embassy Suites from September 23 - 25. The Northern Kentucky Convention, the first in five years, is always a huge hit with attendees and expect this year to be even better. Members can network with colleagues from across the state while picking up free CE credits to satisfy annual requirements. New this year are one and a half hour educational sessions giving attendees more learning opportunities than ever before. If that’s not enough, check out these 1 0 r e a s o n s why you can’t afford to miss this year. If you have never been to Convention, now is the time to r e t h i N K . Hear Michael Tchong and Terry Watson, two great nationally known speakers that you would be crazy to miss
CRS/GRI course on Tuesday - The New Negotiating Edge – A 5-Step Behavioral Strategy – taught by Ed Hatch - HUGE group discounts are available – separate registration required Field of Bling - your chance to win a 1 carat loose diamond - get yours today, deadline is noon on Sept. 24 Installation dinner on Thursday night to formally announce next year’s association leadership
&
Michael Tchong
Terry Watson
Tuesday night at Gameworks - 2 FREE drink tickets and appetizers along with FREE game play Wednesday night at the Great American Ballpark - again, 2 FREE drink tickets and appetizers, this time with a great 360 degree view - tours of the Hall of Fame Museum are free, tours of the ballpark are $5 and require a separate registration (login to IMS and click under Events) The chance to win a two year lease on one of two Cadillac CTSs at the expo More educational courses and sessions than you can shake a stick at (get both elective and CORE credit free at Convention)
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Golf outing on Monday at Twin Oaks Golf Course (call Judy Ball at 859.344.8400)
Registration is available online at www.kar.com, by mail/fax or at the door. A one-day pass is available for Wednesday only. Call 800.264.2185 for more information.
Join KAR on Facebook Join now and be one of the first members to the newest online KAR group! If you are not currently on Facebook, getting started is easy. Just log on to www.facebook.com and set up a profile. It’s free and once you become a Facebook member, you can request to be added to the KAR group. Under the KAR logo on the right, click the link that says “Request to Join Group.” That’s all there is to it. To locate the KAR group, use the search feature or go directly to the group by typing http://www.facebook.com/group.php?gid=9244727021.
President’s Message
Remembering the Good Old Days If you are like me, you can sit back and reminisce about the good old days when gas was only $1.50 a gallon. Now we would be getting a bargain if we could find it for $3.00. And as you know, it’s not just gasoline that has increased; every crude-oil based product has increased in cost, with no clear signs that the trend will reverse. Robert Damron, 2008 KAR President As REALTORS®, we have a unique perspective on the burden of high fuel and heating costs. Not only does it affect our bottom line directly, but it seriously impacts our clients seeking new homes. Kentucky REALTORS® are concerned about the families and individuals throughout our great state that are facing increased costs associated with heating their homes this winter. As real estate professionals helping Kentuckian’s buy and sell homes, we recognize the increase in costs of natural gas, propane and home heating oil energy prices create significant burdens on the families and communities we serve.
The most recent U.S. Energy Information Association (EIA) Short Term Outlook report has some grim projections for home heating prices. According to the EIA, residential heating oil prices during the upcoming heating season (October though March) are projected to average $4.34 per gallon compared with $3.31 during the last heating season, an increase of about 31 percent. Prices for natural gas look no better – they are projected to average $15.58 per Mcf compared with $12.72 per Mcf during the last season, an increase of about 22 percent. Coupled with the rise in gasoline and the downturn in the national economy, these financial pressures are even more acute. REALTORS® spend a great deal of time in our cars driving to and from various properties. All of us are well aware that gasoline prices are up from last year and the
data confirms that we are paying nearly 70 percent more for gas than this time last year. Rising gasoline prices not only adversely affect real estate agents, but nearly every facet of the real estate industry in the Commonwealth, including home construction, remodeling, property development, and sales. Significantly, as small business owners, many REALTORS® are already struggling with the costs of health care insurance and other businessrelated expenses. While we strongly believe the real estate market will strengthen and prosper, the cost of gasoline will continue to rise. This past July, I wrote to the Kentucky Congressional Delegation on behalf of the families and communities served by our membership. I asked each of our Senators and Representatives to provide their personal proposals, ideas or plan to address the burden of rising home heating and gasoline costs. Additionally, I implored them to work with their colleagues in Congress to enact responsible and effective measures to reduce the high costs of crude oilbased energy for Kentucky and our nation. Like you, and am very interested in learning what, if anything, Congress can do to help Kentucky and our nation with rising fuel costs.
Robert Damron 2008 KAR President
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Tools You Can Use
Marketing Minute
Yahoo! released the results of a 500 participant study they performed on how the Internet influences home buyers and sellers and specifically how it impacts consumers’ decisions when it comes to selecting a real estate agent. Although the survey group was small, there results did show the Internet plays a fundamental role in the agent selection process and in helping consumers identify agents. Here are some of the specifics from the Yahoo! study, according to a post by Joel Burslem on the FOREM blog: • Home buyers and sellers consider approximately two agents on average before making a final decision. • The Internet impacts consumer trust. Forty percent of respondents credited a site in increasing their trust in the agent. • 74 percent of people who accessed an agent Web site got there with the help of a search engine. • The online research process is quick and intense: consumers spent an average of 12 hours online researching agents and 75 percent selected an agent within one week of starting their search. • 45 percent of respondents used the Internet to learn about agents they didn’t know existed. • 41 percent discovered special deals and promotions offered from an agent through the Internet.
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Call International For Free Talkster is the only service for making completely free long distance, international, and group conference calls from any phone - cell phones, landlines, computers or VoIP - to any other phone, on any network. No registration or credit card is ever required and you won’t need any new software or downloads to use the service; only an existing phone. It can be used with Facebook as well. Talkster.com lets you chat for free for as long as you please. Enter your home or cell number and a friend’s number at the website. Talkster issues a set of local numbers you can call to connect. The catch: You have to listen to a 10-second ad. Directory Service with Google To use this free, enhanced directory service feature, you don’t need a computer, an Internet connection or even the keypad on your phone or mobile device. GOOG-411 is voice-activated, so you can access it from any phone (mobile or land line), in any location, at any time. Dial 800-GOOG-411 (800-4664-411). Say where and what you’re looking for. GOOG-411 will connect you with the business you choose. If you are calling from a mobile device, GOOG411 can even send you a text message with more details and a map. Simply say “Text message” or “Map it.” Save Time Searching Checking all the websites and blogs you enjoy on a daily basis takes tons of time. But it doesn’t have to thanks to a program that will help bring that information directly to you. You can have RSS feeds from your favorite websites emailed to your inbox from a program called RSS FWD. The site offers a simple, time-saving way to have information you want delivered each and every day. To receive the RSS feed (RSS is short for Really Simple Syndication and more information about this technology can be found on Wikipedia or through videos posted on YouTube), you need to visit the RSS FWD site (www.rssfwd.com) and follow the instructions. Of course, you need to have the URL of the RSS feed and your email address handy. Once you complete the steps, just click the confirmation link inside the e-mail you receive after subscribing (it’s free) and you’ll be good to go! The RSSFWD service will start sending you e-mail updates in accordance to the preferences you chose. Enjoy!
Design Your New Space www.floorplanner.com Ever wish you could see your layout ideas on paper? Now you can with this new online program. Floorplanner lets you design your new home or office, rearrange a room or plan a new outdoor space on the computer before tackling the job for real, saving you time and allowing you to have a little fun. Floorplanner is the easiest, quickest and best looking way to create and share interactive floorplans. Using point-and-click, drag-and-drop tools, you can design your layout in minutes and rearrange it as often as you want. Then you can save, send and/or print your designs to share them with others through email or place them on your own website. The program is free for personal use and offers paid subscription packages with updated features if needed. Special versions are also available for real estate professionals. It’s easy to use with no downloads and no heavy lifting required.
A true to life “bucket list,” 43Things is a social networking Web site with a twist! Sure, you can meet new people and share your information, but you can keep track of your to-do list there as well. Everything you want to do, everything you’ve done in the past and everything worthwhile in your life that you’d like to share with others can be found (or created) on the site. For example, let’s say you want to make a list of goals you would like to accomplish within the next month (or day or year or your whole life). First, create your free account and put your goals in place. Once they are logged into your profile you can track your goals as well as see how many other people are trying to achieve the same ones. You can even ask 43 Things to remind you via e-mail that you need to accomplish a particular goal within a certain amount of time. There is also a mini blog section that can be used to talk about your experiences and update others on your progress.
Bits and Bytes
A new service called Eyejot allows you to record and send video messages with the same speed and ease as composing an e-mail. Eyejot is a free, online video messaging platform that can be used for both business and personal communications. It works with any browser and on any platform. There is no software to download or install. All you have to do is login, record or upload your video, and send it. The recipient is notified by e-mail that there is a new video message. To watch, all they have to do is click on the link. Eyejot supports iTunes and RSS (blog feeds), as well as mobile devices. They also have an Eyejot widget that you can embed on your blog. Joining is free and allows you to send unlimited messages of up to 60 seconds each. You will need a webcam to use Eyejot and the site can help you locate the best - the site has links to numerous reviews on different webcams. They vary by price and quality, however, you can get a great webcam for under $100. Visit the site to watch examples of Eyejot in action.
FALL 2008 KENTUCKY REALTOR® 7
Legal Update
What is Unfair Under the U.S. Fair Housing Act? Doug Martin is Legal Counsel for the Kentucky Association of REALTORS® and is a member of Murphy & Martin, PLC in Lexington, KY.
The U.S. Department of Housing And Urban Development (HUD) has played a lead role in administering the Fair Housing Act since its adoption in 1968. The Fair Housing Act covers most housing, but generally exempts owneroccupied buildings with four (4) units or less, single-family housing sold or rented without the use of a broker, and housing operated by organizations and private clubs that limit occupancy to members. The Fair Housing Act broadly addresses a number of housing issues: 1. Illegal discrimination in the sale or leasing of housing, or in the making of mortgage loans. 2. Housing accommodations for individuals with disabilities. 3. Construction requirements for new buildings occupied after March 13, 1991. 4. Discrimination based on familial status. 5. Housing for older persons.
Fair Housing Act – Sale or Rental of Housing No person may take any of the following actions based on race, color, national origin, religion, sex, familial status or disability in connection with the sale or rental of housing: • Refuse to rent or sell housing. • Refuse to negotiate for housing. • Make housing unavailable. • Deny a dwelling. • Set different terms, conditions or privileges for the sale or rental of a dwelling. • Provide different housing services or facilities. • Falsely deny that housing is available for inspection, sale, or rental. • For profit, persuade owners to sell or rent (blockbusting).
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• Deny anyone access to or membership in a facility or service (such as a multiple listing service) related to the sale or rental of housing.
Fair Housing Act – Mortgage Loans No person may take any of the following actions based on race, color, national origin, religion, sex, familial status or disability in connection with residential mortgage lending: • Refuse to make a residential mortgage loan. • Refuse to provide information regarding loans. • Impose different terms or conditions on a loan, such as different interest rates, points, or fees. • Discriminate in appraising property. • Refuse to purchase a loan. • Set different terms or conditions for purchasing a loan.
Fair Housing Act – Disabled Individuals The Fair Housing Act also provides protections for individuals who have a physical or mental disability that substantially limits one or more major life activities. Under the Fair Housing Act, a landlord may not refuse to permit reasonable modifications to the disabled individual’s dwelling or common use areas – at their own expense – if necessary for the disabled person to use the housing. Where reasonable, the landlord may permit changes only if the individual agrees to restore the property to its original condition when they move. A landlord may also not refuse to make reasonable accommodations in rules, policies, practices or services if necessary for the disabled person to use the housing. For example, a building with a “no pets” policy must allow a visually impaired tenant to keep a guide dog. Also, an
apartment complex that offers tenants ample, unassigned parking must honor a request from a mobility-impaired tenant for a reserved space near his or her apartment if necessary to assure access to the apartment.
• A parent; • A person who has legal custody of the child or children; or • The designee of the parent or legal custodian, with the parent or custodian’s written permission.
Fair Housing Act – Other Prohibitions In addition to restrictions relating to the sale or rental of housing or mortgage lending, one cannot: • Threaten, coerce, intimidate or interfere with anyone exercising a fair housing right or assisting others who exercise that right. • Advertise or make any statement that indicates a limitation or preference based on race, color, national origin, religion, sex, familial status, or disability.
Fair Housing Act – Building Requirements The Fair Housing Act established construction requirements for all new buildings occupied after March 13, 1991 that have an elevator and four (4) or more units: • Public and common areas must be accessible to persons with disabilities. • Doors and hallways must be wide enough for wheelchairs. In addition, all new buildings occupied after March 13, 1991 that have an elevator and four (4) or more units must also have: • An accessible route into and through the unit. • Accessible light switches, electrical outlets, thermostats and other environmental controls. • Reinforced bathroom walls to allow later installation of grab bars. • Kitchens and bathrooms that can be used by people in wheelchairs.
Familial status protection also applies to pregnant women and anyone securing legal custody of a child under 18.
Fair Housing Act – Older Persons The Fair Housing Act provides an exemption for ‘housing for older persons’ from the prohibitions against familial status discrimination if one of the three (3) following criteria is met: • The HUD Secretary has determined that it is specifically designed for and occupied by elderly persons under a Federal, State or local government program; or • It is occupied solely by persons who are 62 or older; or • It houses at least one person who is 55 or older in at least 80 percent of the occupied units, and adheres to a policy that demonstrates an intent to house persons who are 55 or older. Penalties for violations of the Fair Housing Act are severe. Persons can be fined not more than $1,000, or imprisoned not more than one (1) year, or both. If bodily injury results, persons can be fined not more than $10,000, or imprisoned not more than ten (10) years, or both. If death results, the person is subject to imprisonment for any term of years, or for life.
(For buildings with four (4) or more units but no elevator, only ground floor units need comply.)
Fair Housing Act – Protections for Families Unless a building or community qualifies as ‘housing for older persons,’ it may not discriminate based on familial status. That is, it may not discriminate against families in which one or more children under 18 live with:
The previous discussion should not be viewed as legal advice. Please consult your attorney.
FALL 2008 KENTUCKY REALTOR® 9
Feature Story
Bridging the Generation Gap By Terry W. Watson
Boomers Mean Business Baby Boomers have traditionally approached their purchases with family in mind. Even now, as Boomers slip out of their suburban dwellings and into resort condos in urban areas, or take up dual residences, their eyes are on coupledom, community and coming together as an extended family. The influx of inherited wealth this group is seeing as their thrifty parents pass away makes them open to a wide range of products and services. Boomers are throwing caution to the wind to spend, spend, spend. The only group really able to do so with abandon, they are not holding back. Boomers are buying luxury items and luxurious experiences with gusto. Their motto, “Live!” This is a switch from the Boomer motto
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just fifteen years ago of “Manage with care.” A lot of economic changes have come down the pike since 1990, not the least of which has been the skyrocketing of real estate values. For a generation so careful to move into home ownership and stay put for long periods of time, this has been a welcome boon. Now, with savings, inheritance and real estate earnings all in their back pockets, Baby Boomers are putting the “Whee!” into “We.” How does this spending square dance affect you the seller? It explodes your market, for one. Instead of focusing on specific needs and cost comparisons, sellers can develop more diversified and upgraded services and products to their hearts’ content. The more the merrier. Boomers want to have a vast choice. They want to have as much fun buying as they do with the product they bought.
What is your plan to sell the socks off of these people?
The Ignored Generation No More Gen Xers have to speak for themselves. Here is what they would say, I think: Those of us called “Generation X”; we are a revolution, a new Atlantis rising from the ashes of the past to irrevocably change commerce. We march to an electronic beat, our souls long for meaning over money and, even so, we want our share of the big, fat American pie. If you think we’re saying, “Move over!” you’re right. It’s our turn and we are taking it. You can listen up and learn how to come along for the ride or you can lose out. When I say, “lose out,” I mean lose dollars and lots of them. Generation X can make or break your business, as customers and as employees. My advice to you is, ‘Get ready to get uncomfortable.’ The way you’ve been marketing and managing simply doesn’t work for this group of 40 million in the U.S. alone. (According to Census 2000, there were approximately 39.9 million individuals between the ages of 25 and 34. Young adults accounted for 14.2% of the population as a whole.) U.S. Census statistics indicate that the buying power (defined as disposable, or after-tax, personal income) of young adults totaled approximately one trillion in 2000. The bottom line (that’s what this is all about) is that you have to flex for them. They are not going to get your approach to business, marketing or management and if they don’t get it: they won’t buy it or work for it. How much is the spending/labor power of forty million people
worth to you? If you are now ready to get uncomfortable, let’s start by defining Generation X more precisely. Since it is reported that Gen-Xers represent a $125 billion dollar market that already flexes its muscle, both parents (Baby Boomers) and grandparents (Traditionalists) of Gen-Xers who currently run American businesses have begun to respect Gen-Xer’s emerging position in our culture. Research identifies Gen-Xers as highly educated, creative, and materialistic individuals who juggle the stresses associated with being underemployed and unsure about their futures. As their futures become more stable, their code switches and we begin to see a whole new set of buying themes emerge. The “My” code still thinks like an investor at every turn, asking, “What’s in it for me?” but now that they’re a bit more seasoned in global economics and the part they play as Americans, they’re quicker to ask, “What long-term effects with this purchase have?” The “My” has become a “My world”….to some degree.
Coming of Age: The Millennials The Y Generation was born between 1977 and 1990. This group of teens’ main identifying characteristic is dynamic unpredictability. Talk about hard to pin down in any cultural, economic or even political sense of the word! The Gen-Yer stands alone, wanting something that says, “I am unique” and “I am just like you” at the same time. Rap music with its highly personalized lyrics and universal beat says it all. Class, race, gender, nationality, political stance and sexual identity are all fluid with this group that (Continued on page 12)
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Feature Story wants a big, wide brand that is no brand. How does this work? Gen-Y marketing shows up in Tommy Hilfiger, in digital media and in fast food restaurants that sell hormone-free beef, organic greens and Red Bull on the side. Unlike their older brothers and sisters, they aren’t going to make any pronouncements about who they are because, quite frankly, that could change tomorrow. The Gen-Y market is paisley and black, Cheetos and Indian food, electric cars, recycled running shoes and 400 MGz amped lights on the playing field. Got it? The only guarantee with the “I” code is that once you get it, it’s not there anymore. Don’t be hamstrung by the fragmentation of Gen-Y market because once you get the hang of it, it’s not that hard. These three groups, ladies and gentlemen of the sales force and product development team, are your markets, the equations made solid by researchers telling you what your demographic wants and how they think. Now, I want to ask you the most important question of this article: the question, in fact, that this article is designed to answer. What is your plan to sell the socks off of these people? So far, I am faced at every turn with sales forces that do not know their products, can’t or won’t provide minimal customer service and don’t bother to get to know their customer. Frankly, the state of sales is so sad, I’m reduced to tears – tears of anger and frustration, mainly. I’m also reduced to staying at home and making almost all of my purchases on the Internet. Every single salesperson I encounter these days is out of whack. Either they are aggressively calling me five times a day to sell me a dating service or they are telling me, “I don’t know,” to every small request for information about their product. Honestly, if you are selling a car and you don’t know what kind of gas mileage it gets, I have to ask you if you are crazy, stupid or both. Why is it that I can go into a bookstore, ask for a certain title and the salesperson will find it, lead me to it, suggest other titles and offer to have it shipped or gift wrapped for me but I can’t ask the person selling $800.00 mens’ shirts whether or not the silk is a blend, what the material does with moisture and how the sizes run for that brand. I get a blank stare and the ever ready answer, “I don’t know.”
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This article talks about your three basic markets and some sales fundamentals to address if you want to actually sell anything in person. Is the traditional salesperson becoming obsolete? I don’t think so. I think that as long as people go out to spend money, they’re going to want a personal guide in the process. That means that it’s time to stop literally driving people eager to spend their money on your products and services out of your place of business because they can’t find any one who cares enough to get to know them, get to know the product and combine the two skills for a monetary outcome. Obviously, this article begs the question, “What sort of work ethic creates this sort of pervasive attitude?” Since the people you are selling to: Boomers, X-ers and Gen-Ys are also making up your sales force, we can look not only at their buying habits but also at their perspectives and attitudes around work. Wouldn’t you like to be able to sell anything to anyone and to be rest assured that your sales force can and will do the same? What’s a high sales volume worth to you? I hope it’s worth a lot because I’m going to challenge you to rethiNK the way you’ve been doing business and handling management relationships. Let’s go crack the generational codes, penetrate markets and rack up sales every day like it is November 28th. Terry is one of the most sought after real estate trainers in the country and the youngest person ever to be inducted into the Accredited Buyer Representative (ABR®) Hall of Fame and is one of only 156 people in the world to hold the Distinguished Real Estate Instructor (DREI) designation. After speaking at last year’s Convention, he was so highly requested by the membership that he is coming back again this year. Terry will be teaching three sessions: Marketing 101, Buyer Your Mine and Effective Sales Strategies. Register today for the Convention at www.kar.com.
Government Affairs
It’s Fall in Kentucky – Get Out and Vote! Children are back at school, football teams and fans are preparing to take the field, and political signs and commercials are sprouting up all over – it’s fall in Kentucky, folks! The Kentucky General Election will take place on Tuesday, November 4, 2008 with polls open from 6am until 6pm local time. This election will feature a U.S President, a U.S. Senator, and U.S Representatives on the ballot. Additionally, all 100 members of the Kentucky House are up for election and nearly half of the Kentucky Senate. It is an exciting time to be a political junkie in Kentucky! And statistics certainly indicate Kentucky REALTORS® are a politically astute and active group; nearly 88% of all REALTORS® in the Commonwealth are registered to vote. This compares to a statewide voter registration of about 67% and a national REALTOR® registration of 73%. If you are one of the few Kentucky REALTORS® not yet registered to vote, there is still time. Check with your county clerk before October 7, 2008 and then exercise your REALTOR® rights and vote!
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By James Sharp Governmental Affairs Director Kentucky Association of REALTORS®
Speaking of REALTOR® rights and political voice, as you already know, KAR works to advance home ownership, real estate investment, private property rights, unencumbered transfers of property, and the free enterprise system in Kentucky. As small business owners and entrepreneurs, KAR seeks to support and enhance the ability of members to grow and succeed in their business in an ethical and competent manner. Additionally, KAR supports increased civic participation and input in the legislative process through open and public access to and communication with elected officials in Kentucky. With over 11,000 members across the Commonwealth, KAR is well positioned to capture the attention of state legislators and establish our association as the definitive resource for the Kentucky real estate industry. Combined with NAR’s efforts on the federal level, Kentucky REALTORS® are truly an effective and comprehensive political force.
Local Elections While not all 29 local associations interviewed candidates for local offices (such as mayor, council, PVA, etc), several of them did conduct interviews or “meet the candidates” events locally. These events are critical because it introduces and establishes REALTORS® with local decision makers. With the nature of politics in Kentucky, a successful candidate for a local office may eventually run for a state or federal position. By engaging and supporting local candidates, REALTORS® get an opportunity to not only shape the dynamics of local politics, but also create a lasting, trusted relationship with a legislator who may well influence national policy! KAR has many great resources for local associations eager to get active in local politics. Contact KAR today and we would be happy to help customize a program specifically for your needs.
Government Affairs Take Kentucky REALTOR® Politics to the Next Level Join the State Political Coordinator (SPC) Network Today
State Elections As previously mentioned, all 100 Kentucky House seats are up for election as well as Senate seats in odd-numbered districts. With a large Democratic majority in the House, and a solid Republican majority in the Senate, Kentucky will not see a paradigm shift in political party control of the General Assembly. For 2008, the attention will focus on the Leadership races in the Democrat Party for the House. There have already been many rumors and announced candidates for some leadership posts, but after the November elections, look for this dynamic to really take off. Regardless, Kentucky REALTORS® will continue the prudent, responsible, and most importantly, nonpartisan approach to politics. We serve the REALTOR® Party and support the policymakers who help improve the real estate industry in the Commonwealth and beyond, regardless of political affiliation.
National Elections Kentucky may play a critical role in the 2008 U.S. Presidential election as both national nominees look to establish themselves with Electoral College votes from the South and Midwest. Additionally, with incumbent Senator Mitch McConnell in a reelection bid against Bruce Lunsford, Kentuckians will likely see strong spending from the national Republican and Democratic parties.
All politics is local. Therefore, it is critical to harness the energy, enthusiasm and knowledge of REALTORS® and connect with policymakers starting at the local level. REALTOR® interest and involvement with local politics and issues will not only help the Kentucky real estate industry thrive and prosper, it will also strategically position your local association as a vital resource for legislators. Lobbying and government affairs efforts are most effective when Kentucky legislators have a direct connection to the voices of Kentucky REALTORS®. Therefore, the Kentucky Association of REALTORS® is pleased to announce an exciting new grassroots initiative designed to help connect you directly with state legislators on a personal level – the KAR State Political Coordinator Network! The State Political Coordinator (SPC) Network will strategically match REALTORS® with their state Senator and Representative in a positive, one-on-one relationship. The intent is to maintain, enhance and foster high quality, local REALTOR® contacts for state Senators and Representatives regarding real estate issues in Kentucky. We identify the policymakers who are driving the issues that affect us and reach out to learn more about their goals and concerns. Then, as key issues develop in the General Assembly, specific members of the SPC Network will mobilize to relay the Kentucky REALTOR® position to their designated legislator. Through strategic and targeted use of personal relationships with legislators, we will put a local and personal touch to legislative and political advocacy using a trusted and respected source – YOU! As a REALTOR® you have committed yourself to a higher standard in the real estate profession. Why not take your commitment to the next level and get involved with this exciting grassroots program today! If you know a current Kentucky state Senator or Representative, please email KAR Governmental Affairs Director James Sharp at jsharp@kar.com. In the subject line, please put “SPC Network.” For more effective matching, please briefly describe the nature of your relationship with the legislator and any other important information. As always, please do not hesitate to contact KAR if you have any questions or would like additional information.
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Government Affairs
It’s Fall in Kentucky – Get Out and Vote! (Continued) At least two of the six seats for Representative – KY-02 and KY-03 – should draw some attention. Constituents in Kentucky’s second Congressional district will elect a brand new Representative to Congress following the retirement of Representative Lewis, while voters in the third will decide on incumbent John Yarmuth and former incumbent Anne Northup. REALTORS® have a well-deserved reputation for being active, civic participants in their
communities. All REALTORS® should be sure to exercise their right to vote in November and beyond. It is an exciting and challenging time for our elected officials on all levels of government. They need your help, guidance and opinions. It all starts with a REALTOR® vote and continues with active participation in government affairs. Contact KAR today and learn ways you can become more involved!
Landmark Housing Legislation Will Help First-Time Home Buyers Centerpiece of the Bill is a $7,500 Tax Credit On July 30th, President Bush signed a major new housing bill into law, the Housing and Economic Recovery Act of 2008 (H.R. 3221). As you may have heard, a section of this law creates a new, temporary tax credit for first-time homebuyers. The intent is obvious; to convert on the fence, “just looking” people to buy their first home. REALTORS® should be aware and use this exciting new tool to their advantage, but keep in mind that the time period of the tax credit it limited – it only applies to first-time homebuyers who purchase a home between April 9, 2008 and July 1, 2009. The law provides a tax credit for 10 percent of the cost of a home, up to a maximum of $7,500. Tax credits are claimed on an individual’s income tax return in the form of a “refundable” credit, and the amount of credit is the same for all taxpayers, married or single. This means that if the actual tax liability for the purchaser was $6,000, that purchaser would receive a credit refund of $1,500. In other words, the refundable amount is the difference between the $7,500 credit amount and the amount of tax liability. Another important point to keep in mind is that this tax credit only applies to first-time homebuyers. Under this law, a first-time homebuyer is defined as an individual who has not had an ownership interest in a principal residence in the previous three years. Also, there are income restrictions that phase out the tax credit starting a certain income levels. Individuals with who file a Form 1040 as a Single or Head of Household are eligible if their income is no more than
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$75,000. For individuals filing a Joint return, the maximum income limit can be no more than $150,000. Unlike most tax credits, this tax incentive must be paid back over a 15 year period but there are no interest charges. The minimum repayment is specified in the law; the amount is 6.67% of the credit each year. Thus, a buyer who qualifies for the full $7,500 credit will repay about $502.50 every year. Essentially, the repayment feature of the credit is similar to a recapture provision because in some circumstances the tax system takes back all or part of the tax benefit. Currently, the IRS does not have any precedent for this type of tax credit and currently not much is known about how the repayment will occur or how it will be reflected at settlement. In addition to the tax credit, the housing bill includes several other provisions such as FHA modernization, GSE (government-sponsored enterprise) reform, Mortgage Revenue Bond Program and a Low Income Housing Tax Credit. For more information on the Housing and Economic Recovery Act of 2008, check out these sites: Kentucky Association of REALTORS® http://www.kar.com/resources.asp?p=issuetracker National Association of REALTORS® www.realtor.org F e d e r a l H o u si n g T a x C r e d it http://www.federalhousingtaxcredit.com
RPAC Through July 31, 2008, the following REALTORS速 contributed to the REALTOR速 Political Action Committee (RPAC) at the major designated levels. By contributing to RPAC, you are able to support REALTOR速-friendly legislators who believe in our industry and protecting private property rights, preserving the American dream of home ownership, fighting for tax reforms and reducing burdensome regulations on our business. For more information on the value of RPAC and how it works for you, contact James Sharp at jsharp@kar.com or 800.264.2185. Big Blue R ($1,500 and up) Harrell N. Tague Jr. Sterling R ($1,000 - $1,499) Dennis R. Anderson Kevin R. Farris Todd Hyatt Rue O. McFarland Jerry McMahan Guy Montgomery Betty A. Schutte William P. Snyder John J. Weikel II Thoroughbred R ($500 - $999) Gary Barlow Nelson Collins Judy A. Craft Brad DeVries Lois Ann Disponett Carolyn S. Edwards Donna W. Ensminger Susan Helm John A. Hodge Bobbie Johnson Donald M. Kepple John Miranda Karen S. Murphy Charlie L. Murphy Charles Nichols Lisa L. Presley-McGrew Jim J. Schack Richard Y. Vreeland Pearl R ($250 - $499) Tony Clark Steve K. Cline Jayne Cox Sharon Dickman Donna W. Ensminger Brenda G. Gooslin Ronald E. Hughes Bobbie Johnson Melody Malone Janet S. Robinson Catherine J. Schramm John A. Stephenson Don C. Sullivan II Peggy F. Thurza John T. Vince Jr. Mike M. Wheatley Commonwealth Club ($99 - $249) Lucy Ackerson Garrett Ackles Buddy Adams Carl E. Adams Connie K. Albrecht Cynthia Albright-Parrish Chris S. Allen Mary K. Allhoff Nancy Allison Joy E. Amann Dana W. Anderson Sharon A. Angermeier Sarah A. Bailey Mike Ballard J. Charles Ballard Mary M. Ballard Connie L. Barnett Michael J. Bauer Ruth Baumrucker David A. Bell Lin E. Bell Karen Bhatt Santosh Bhatt
Judy Bidwell David C. Bischof Jo Bishop Nancy R. Black Marsha L. Booth Pat H.Borg Kaye Bowles-Durnell Julie Bradford David L. Bray Ted L. Bray Michael A. Brewer Connie H. Brooks Cindy Brouillette Freddie Brown Jewel Buckley Pete E. Buhl Pitsy M. Buren Thomas R. Burke John Burns Wm. E. Buzan Jr. Connie C. Byers Patricia A. Byrd Cindy A. Cahill Cindi Calvert Jennifer Carroll Susie S. Carter Doris E. Carver Jesse L. Case Steve Cassin Pam Catlett Lynn T. Caudill Karen K. Cecil Linda Gibson Cecil Brian N. Chase Ellen A. Christian Suzy Clark Donna R. Clark Jerry B. Cleland Marilyn V. Cleland Lee S. Clore Myrtle B. Coffman Jack S. Colley James C. Collier Charles A. Collier Harriet A. Conely Russ Connors Nancy Cook James W. Cook Whit Courtenay Chris Coury Margie Cox Linzie T. Craig Martin T. Crane Shari L. Crisp Cindy W. Crutcher Shirley Culton Marilyn Cundiff Rick Curby Joe Cusick Garlene Daniel Lynn Davenport David Davis Joan R. Davis P. Diane Davis John S. Davis Donald E. Davis Sr. Sandie Davis-Klemenz Shirley A. DeBoor Darrell Defler Alfred T. Dent Betty J. Dils J. Ray Diuguid Camilla C. Diuguid Lydia Drexler Suzanne Duncan Dennis R. Dutton
Joy R. Eberenz Glenn C. Edelen Louise Edelen Tim Eickhoff Sidney W. Eline Jr. Ann Elliott Steven A. Elmore Linda S. English Sue Ernst Jason Farabee Michael Farrar Carol Fening Stacey R. Fergerson John Fischbach Barbara B. Flannery Frank Fleck Jr. David S. Fleischaker Charles M. Ford Robert D. Ford George Foree Karen S. Fox Leo W. Frank Connie French Connie M. Fryer Sandra K. Gaither Lonnie R. Gann Jeffrey M. Gapen Douglas A. Garner Larry Gatti III Linda K Gay Elizabeth T. Gibson Don W. Gilmour Aaron T. Givhan Eston Glover Richard Grammer Glenn E. Green Jr. Joe Gribbins Paul M. Grisanti Kevin Grove Erika C. Gudenkauf Sandy Gulick Sherrye Guthrie Cindy Hack Debra Haddad Pat Hagan Betty L. Hall Steve K. Hall Joseph Hampton Elaine M. Hangis Elayne Harkness William F. Harned Kenneth Harrison Mark Hass Jennifer Haubner-Vories Laura H. Hayden Leslie D. Heath Tom Hebert Paul N. Herron Bob M. Heuglin Arthur Higdon Dianna Higgins Linda M. Hill Melody J. Holder Sue Holloway Lynda G. Houck Robert T. Howard Sherry Howes Mary Hubbs John F. Huggins Thomas F. Hughes Kathy A. Jennings Loretta C. Jobs Kelly Johnson Paula P. Johnston Kenneth H. Jones Jr. Shelia V. Jones
Rhonda O. Karageorge Charles Kavanaugh Cindy R. Kelly Donna Kelly Kathy C. Kimbel Marsha A. Kirven Jacqueline W. Klein Christopher Knopf Chuck Koller William R. Kopperud Angie Koss Kurt H. Krug Evelyn M. Lacey Brenda T. Lady Nancy R. Lage Judy Lambert Kathy Lewis Maxine Littrell Laurie Logan Charles I. Lotze Brenda H. Loyal Cheery Malone Robert H. Marrett Gertrude Martin Judy Martin Mary K. Martin R. Douglas Martin Barbara A. Massman Dave Mattingly Mina D. Mattone Jim D. Mayberry Floyd Mc Carty Sandra F. McMillan-White Randi S. Means Sandra J. Metts Mimi Middleton-Osborn Janice E. Miller Dot M. Miller Louise M.Miller Sandra Mills Lynda Minzenberger Barbara B. Miranda Rebecca Mobley Elizabeth Monarch Donna F. Moore Lou Ann Moore Steve Moorhead Teresa Morgan Christine L. Morgan Becky Murphy Douglas Myers Joyce A. Nay William J. Nevitt Patricia Nuccitelli Deborah M. Nunley Laura N. Oatley Paul J. Ogden Jr. Ephraim Osborne Pamula K. Owens Evelyn C. G. Page Scott Panella Karen G. Pannell Lenora Paradis Ashley S. Parker Gwen Paul Vance A. Peers Kathryn S. Pendleton Janet L. Perkins Betty L. Peyton Rip I. Phillips Carol A. Pike John A. Pirtle III Brandon Priest Lawrence S. Profumo September L. Puckett Evelyn J. Pusateri J. Richard Queen Russell V. Quick Patricia A. Radcliff Rick W. Rand Jr. Terri L. Raney Joann Rankin Norma G. Rapier Dottie L. Ray Theresa E. Reekers Luly Reinhardt Scott Rhodes Michael T. Ridge
Joann K. Risner Gay N. Rittenberry Stephen A. Robinson Kristian Ruble Grace P. Rucker William E. Rudd Jr. Bill A. Russell Jr Leon R. Russell William R. Sanderfer Lester Sanders Charles K. Sassin Mark Schaffer Judy H. Scherer Andrea Scholtz Jan Scholtz Mary Jo Schuerman Chuck R. Scott Kathy P. Sears Trish Segrest Cindy D. Shannon Curtis M. Sharff James Sharp Joseph E. Simms Donald G. Sims Mike Skelton Toni M. Skiles Rodney Skoog Rex Slinker Colleen Smith Jeff W. Smith Steve Smith Torrey M. Smith Patsy J. Smith Sharon A. Smith Sherry Spanyer Joyce S. St. Clair Stephanie Steffen Lisa Stephenson David L. Stewart Melissa A. Stinnett Sam Stockard Brian Stocker Rich Streicher Sr. Cindy Stuart Terri Tackett Greg Taylor Shannon Tekelenburg Phil Terry Glenn E. Thomas Phyllis Thomas Jessica L. Thomas Richard H. Thompson James K. Tinsley Sharon G. Toms Van Tran Debbie Travis Sharon L. Tryon Lisa Tyler Betsey Vaughan Kathryn E. S. Vaughn Lois Wagner Linda Waldroop-Lewis Mary Walkiewicz Rick Walters Robert Wasylina Cindy Z. Waterman David Waterman Barbara B. Wathen Suzy N. Watkins Nelson B. Weaver Dean E. Wegley Jana S. White Stan White Shawn P. Willard Keith L. Williams George M. Williamson Betsy L. Wilson Ray Wilson Susan M. Wilson Harold H. Wimsett Louis A. Winkler Beverly A. Withers Wayne L. Wohlbold Jo Wright
Hall of Fame members have contributed to RPAC a cumulative amount exceeding $25,000.
FALL 2008 KENTUCKY REALTOR速 17
KREC Information Changes to Kentucky License Law and How This Affects You NAR’s Standards of Practice Also Play a Role
Lee Harris is General Counsel for the Kentucky Real Estate Commission
At their July 2008 KREC meeting, the Commissioners voted on a new interpretation of KRS 324.160(4)(p). In the past, if a listed seller contacted a Kentucky licensee, the licensee could only tell the seller what fee he or she charged and what services were provided for that fee. Under this new ruling, if a seller who is under a listing agreement contacts a different agent or broker prior to the expiration of the current listing, the contacted licensee may meet with the seller to discuss the listing and may enter into a listing contract that will take effect upon the expiration of the current listing (“effective date”). This new ruling in no way allows licensees to contact sellers, either directly or indirectly, in order to pursue their listing agreement. This means that it would still be improper for an agent to encourage someone else – a friend or family member, for example – to ask the seller to contact another agent while under a current listing agreement. Associations may want to consider amending their form listing agreements to address the “effective date” issues for situations like these. In addition, form listing agreements may need to be amended to reflect certain scenarios that may arise, such as contingency contracts and contracts that do not close during the period of the original listing agreement. For example, who is to handle offers that are in negotiation when the original agreement expires?
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This new ruling in no way allows licensees to contact sellers, either directly or indirectly, in order to pursue their listing agreement. The Commission recommends that the new listing agent ask the seller to sign off, indicating that the seller contacted the agent and on what date. This could also be made a part of the revised listing agreement. There is sample language on the Commission’s website at www.krec.ky.gov. There has been some question about how the signatures, dates and times should be handled. The signatures should be for the actual dates that the seller and listing agent sign the document. As always, if you have questions about how to handle a particular situation, please feel free to contact me at 502-429-7250, extension 12, or e-mail me at lee.harris@ky.gov.
KREC Update At its August 21, 2008 meeting, the Commission looked at the issue of escrow accounts in which brokers are holding more than $100,000. The Commission determined that brokers can have more than one escrow account, so long as they are all registered with the Commission, or the broker or the bank can provide additional insurance above the standard $100,000 cap from FDIC in order to protect those deposits.
REALTOR® Safety Safety Tips for Your Clients
Your personal safety is crucially important – and so is the safety of your clients. As you become more aware of practices and perspectives that help keep you out of danger, share that knowledge with your buyers and sellers. They, too, can be vulnerable as they allow strangers into their homes, or visit other people’s property. The below list is only a few of the possibilities you and your clients may face but is a good start to bring awareness during REALTOR® Safety Week. Share this valuable advice with everyone, and you’ll help them learn to protect themselves against crime: • Remind sellers that strangers will be walking through their home during showings or open houses. Tell them to hide any valuables in a safe place, including prescription medications and alcohol, as well as personal information such as bank statements that could be used for identity theft. • Warn your clients that not all agents, buyers and sellers are who they say they are. Strangers who stop by a listing unannounced should be asked to make an appointment with the REALTOR®. Stress that your clients should never show a home without an agent present.
• Inform your clients that they are responsible for their pets. If possible, animals should be removed during showings. Make clients aware that buyers and agents are sometimes attacked, and the owner will be held liable. • At an open house, be alert to the pattern of visitors’ arrivals, especially near the end of showing hours. In some areas, a group of thieves will show up together near the end of the open house and, while a string of supposed buyers distracts the REALTOR®, the rest of the group walks through the house, stealing valuables. • When you leave a property, whether after an open house or a showing, make sure that all doors and windows are locked. Thieves commonly use open houses to scout for valuables and possible points of entry, then return after the agent leaves. • Let your clients know that you will take all of the above safety precautions, but that when they return home, they should immediately verify that all doors are locked and all valuables accounted for.
Source: Nevada County Board of REALTORS® (CA); Realty Times
FALL 2008 KENTUCKY REALTOR® 19
Industry Issues
By Virginia Lawson
Short Sales and Foreclosures: Pitfalls for the REALTOR® These two issues face REALTORS® on a daily basis, and they are filled with often unseen pitfalls and problems for the unsuspecting REALTOR®. Although a successful short sale or sale of a property in foreclosure is possible, it is rare. A short sale occurs when the lien holder agrees to take less than what is owed to release the lien, enabling the owner to sell the property. This is the first surprise. The short sale has to be negotiated with all lien holders, not only the first mortgage company. If a seller has a second mortgage, unpaid income taxes or judgment lien, each of these lien holders must cooperate and agree to release their liens for nothing, something they are not anxious to do. The first mortgage holder may be reluctant to help. These lenders do not have to cooperate, work on anyone’s timetable, or care that the deal won’t close if a short sale is not accomplished. Patience and persistence over a long time period is a must for the seller, REALTOR®, and buyer – not only for weeks, but for months. Many lien holders are going to require the seller to have a signed sales contract before they talk. The lien holder will want to see a net sheet showing the seller will not receive any net proceeds. Lien holders may try to negotiate down the real estate commission. This obviously places
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the REALTOR® in an uncomfortable situation – the deal will work and everyone will be happy if the REALTOR® isn’t paid. If the REALTOR® doesn’t agree, the deal is off. Another sticky issue occurs when the lien holder requires the seller produce financial records that may not conform to the numbers he/she gave the lender to obtain the mortgage in the first place. If the seller fudged on the numbers to obtain the loan, the REALTOR® should immediately advise him/her to obtain legal advice. A seller who is caught falsifying numbers to obtain a loan may be guilty of fraud. Tax consequences must be considered in short sales, because money saved in the short sale is income under the federal and state income tax codes. A new law passed in December of 2007 appeared to “fix” the problem and not have sellers of short sales end up with income tax consequences. Unfortunately, there are many exclusions and REALTORS® should inform sellers to consult their tax advisers. A foreclosure is a lawsuit against everyone that has an interest in the property. The foreclosing attorney will run a title examination to see who must be named in the lawsuit. Once a foreclosure is completed and the property sold on the courthouse
steps, everyone who has an interest in the property and named in the lawsuit loses that interest, even without being paid. It is important to remember if the seller is trying to work out a short sale or sell the property, once the foreclosure action is filed, the legal action will continue even if the seller has signed a sales contract. A recent case had the court sale scheduled for noon on Monday and the buyer’s closing on Tuesday. The lender decided to go forward with the court sale on Monday and the Tuesday closing could not occur. As harsh as it seems, the lender was acting within its legal rights. REALTORS® who want to beat the courthouse sale are taking a risk, since the foreclosure can move as fast as a couple of months. REALTORS® must remember – lien holders do not have to communicate or cooperate with the REALTORS®, and, if they do cooperate, the lender will not work on the seller or REALTORS’® timetable. Be prepared to grovel and wait. REALTORS® should always ask sellers when they are listing property to prove the mortgage payment is current – not just ask. This should be the rule if the listing is $50,000 or $5,000,000. Foreclosure knows no socio-economic boundaries. A good practice is for the REALTOR® to have the seller verify the information through out the listing. The mortgage may be current when the property is listed and the seller may not make another payment. Lenders who purchase property at the foreclosure sale often work with REALTORS® to market the property. They often send the REALTOR® an email to change locks, turn on utilities and clean out the property as soon as the sale is over. That is a huge mistake for the REALTOR®. The buyer at the foreclosure sale does not own the property until the sale is confirmed and a deed is executed under Court order. A REALTOR® who enters the property is trespassing, and if a listing is signed
prior to the deed, it is not valid because it is not signed by the owner. If a sign is placed in the yard or other advertising takes place, the REALTOR® would be in violation of the license law – the true owner has not given written permission to advertise. Other pitfalls occur for REALTORS® who go to foreclosure sales to purchase property. Once a property is sold by the Master Commissioner (the person appointed by the Court to hold these sales), the buyer has ten days to have a title examination and “file exceptions” with the Court if there is a title defect not cleared by the foreclosure sale. If the buyer fails to take this step and there is a title defect, the buyer must take the title with the defect. REALTORS® should hire only title examiners who know how to do a foreclosure title, which involves reviewing the Circuit Court records as well as the County Clerk’s. Buyers should always purchase owner’s title insurance on these properties. This brief article is only the tip of the iceberg for issues relating to short sales and foreclosures. REALTORS® should investigate and research this issue further before pursuing business opportunities and/or assisting buyers or sellers in this area.
Virginia has been providing continuing education to REALTORS® for 23 years. The class “What a Mess... Foreclosures, Short Sales, Deeds in Lieu of Foreclosure, and Bankruptcy” is being offered several times between now and the end of the year.
FALL 2008 KENTUCKY REALTOR® 21
Local Association News
Introduction Local boards/associations are encouraged to submit information for this section. Pictures must be at least 300dpi. Send all association news to hcooper@kar.com. Citation of Appreciation from Jody Richards, Speaker of the Kentucky House of Representatives and Representative Will Coursey from Marshall County. It reads:
The House of Representatives of the Commonwealth of Kentucky hereby pays most ardent tribute to the KentuckyBarkley Lakes Board of REALTORS® as they join other REALTOR® associations around the nation to mark the 40th Anniversary of the Federal Fair Housing Act by celebrating Fair Housing Month. Inasmuch as the members of the KentuckyBarkley Lakes Board of REALTORS® have labored with such dedication and professionalism on behalf of the citizens of the Marshall County, KY community, the members of this August body are delighted to join with Representative Will Coursey in offering sincerest commendation for the continued effort put forth in this most worthwhile and consequential endeavor and in extending best wishes for the utmost success and good fortune in the future.
GLAR Introduces New Consumer Podcast Series As part of the advertising efforts for the Greater Louisville Association of REALTORS®, consumers will be directed by radio ads to a new consumer information website, www.RealtorsMakeaDifference.com. Here consumers will learn why they should enlist the assistance of REALTOR®, why now is a good time to buy in the Louisville area, as well as other helpful tips and links to various information on homeownership. A series of Podcasts hosted by members of our Board of Directors is available on the site. Topics of the podcasts include: Tips for the First Time Homebuyer, Choosing a REALTOR®, Why Pre-Approval is Important, Tips on Selling, Downsizing or Moving Up and Estate Planning. To view these podcasts, just go to www.RealtorsMakeaDifference.com.
In addition, KBL had Mike Miller, County Judge Executive, sign a proclamation in recognition of Fair Housing Month. Diana Stubblefield, president of KBL and Alice Kidd, Fair Housing Chairman were in attendance.
Kentucky-Barkley Lakes Board of REALTORS® As part of National Fair Housing Month in April, the Kentucky-Barkley Lakes Board of REALTORS® (KBL) received a
Lexington-Bluegrass Association of REALTORS® The Lexington-Bluegrass Association of REALTORS® (LBAR) was presented with the 2008 Outstanding Achievement in Fair Housing Award in April by the Lexington-Fayette Urban County Human Rights Commission (LFUHRC) for the association’s exemplary performance in fair housing practices. For many years, LBAR has partnered with the LFUHRC to provide fair housing training to members of the association. And, LBAR offers
Diana Stubblefield, president of KBL (left) and Alice Kidd, KBL Fair Housing Chair (right) watch as Mike Miller, Marshall County Judge Executive, signs the Fair Housing proclamation.
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LFUHRC Executive Director William Wharton, RCHF President Karen Mundy, LBAR President Judy Craft and LFUHRC Chair Rabbi Marc Kline at the award ceremony.
cross cultural training programs for members to learn about doing business with clients from other countries. LFUHRC recognizes individuals and organizations that have profoundly impacted the way that fair housing is conducted over the course of their entire lifetime or who have made significant contributions that support the spirit and letter of Fair Housing Laws which they have demonstrated through words, deeds, business policies or other means. Hopkinsville Christian County Board of REALTORS® The Hopkinsville Christian County Board of REALTOR® is doing its part in the upcoming Christian County Salutes Fort Campbell Week, a week long celebration of friendship between the Hopkinsville, Oak Grove, Christian County and Fort Campbell communities. The event is held annually in Christian County with all events free to the military and their families as a thank you for the many sacrifices they make year round to ensure liberty and freedom. The HCC Board will be involved in several events during this week such as sponsoring the Hopkinsville Tour of Homes, hosting a team for the Chili Cook Off, and the local Coldwell Banker office is sponsoring the Ladies Luncheon. Lexington Named To “Best Places for Business and Careers” List In the Forbes’ 10th annual ranking of the Best Places for Business and Careers, L ex i n g to n ranks as the #5 city on the list. The rankings, which cover the 200 largest metro areas (populations over 240,000) as defined by the U.S. Office of Management and Budget, included cities that demonstrated common themes based on nine
factors such as solid job growth, an educated labor supply and low business costs. Louisville, the only other large metro city in Kentucky on the list, ranked 91. Bowling Green, Owensboro and Elizabethtown, cities listed under the Best Small Places for Business and Careers, ranked 12, 52 and 120 respectively. Louisville Named To “Best Places to Live” List Relocate America’s 100 Top Places to Live includes Louisville in its list of cities for 2008. This year’s list marks the eleventh year of compilation of the best places to live in the United States and is the only list that is determined by statistics and feedback of the people who live, work and play in the communities themselves. Throughout the calendar year, Relocate America accepts nominations for cities and towns throughout the country to be considered as a “great place to live.” The nominating parties must include their own reasons why they feel their city should make the list. The nominations, along with key data regarding education, employment, economy, crime, parks, recreation and housing are reviewed, rated and judged by the editorial team. 10 Fastest Growing U.S. Cities The fast-growing areas in the United States are in the Sunbelt, with Texas leading the way, according to data released today by the U.S. Census Bureau. Experts credit much of the growth in the South to strong local economies and housing prices that are among the most affordable in the United States. In the fastest growing metro areas in the entire country, the Clarksville, Tennessee/Kentucky area, near Fort Campbell and Hopkinsville, grew by 3.7 percent during the period of July 2006 to July 2007, giving it the 10th highest ranking for metro areas in the U.S.
FALL 2008 KENTUCKY REALTOR® 23
By The Numbers
39%
Of all home purchases in 2007, the percent which were made by first-time home buyers. Over the 12 years prior to 2006, first-time home buyers were responsible for buying 42% of all the homes purchased in the U.S. In 2006, that number dipped to 36% but rose again in 2007.
25%
Percentage of first-time home buyers who are single females. Only 11% of first-time home buyers are single males. 51% are married couples, the largest first-time home buying group, and 11% are unmarried couples.
77%
According to a Yahoo! survey, the percent of respondents who searched the Internet for information during their research process compared to 34 percent for print. This reinforces the disconnect between REALTORSŽ’ advertising budgets and where consumers are looking for information because a Borrell Associates report by Yahoo! says that newspapers continue to get biggest share of REALTORŽ advertising dollars at 40 percent (though online is catching up - and now stands at 32 percent).
$
3,123
Average closing cost estimate for Kentucky, according to Bankrate.com researchers, on a $200,000 loan, assuming a 20-percent down payment and good credit. In the lists of states, Kentucky jumped to 14th most expensive in 2008 compared to 35th in 2007, the second highest increase on the list (Oregon jumped from 41st to 20th).
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Among prospective home buyers, the percentage who said they face barriers to buying in the current market according to a Harris Interactive poll commissioned by Move Inc. The greatest barrier to home ownership, cited by 31 percent of the 2,462 adults surveyed, was high home prices. The second-greatest barrier keeping buyers out of the current market is coming up with the money for a down payment (28 percent), with lack of confidence in the economy (26 percent) ranking third.
81%
866.830.7868 The phone number to the Kentucky Homeownership Protection Center, established by the 2008 Kentucky General Assembly, which provides a centralized location for information on public services to assist Kentuckians in keeping their homes. Known as Protect My Kentucky Home, this new program is a joint effort of the Department of Financial Institutions, Kentucky Housing Corporation and many other agencies and groups across the state. Information can also be found at www.protectmykyhome.org.
The amount of tax credit for first-time home buyers included in the Housing and Economic Recovery Act of 2008 (H.R. 3221). The tax credit can be used for a home sale closing on or after April 9, 2008 and before July 1, 2009. See page 17 for more details.
$7,500
Housing Stats
Horizon Looks Good for Kentucky Housing First half of 2008 revealed state slowdown in sales Local housing markets in Kentucky aren’t feeling the pinch in home prices. It’s the overall home sales that are putting the squeeze on the state. Sales were down just over 17 percent with 19,992 homes sold in the first six months of the year compared to 24,183 sold in the same period for 2007. The bright spot, however, was in median home prices, which rose slightly to $106,000 from a previous $104,500, a gain of almost 1.5 percent so far in 2008 versus 2007. “It’s hard to explain why the number of homes sold is down,” says Robert Damron, president of the Kentucky Association of REALTORS®. “The market in Kentucky is stable with prices in many areas remaining level or rising. Even in the areas where prices have fallen, the declines have not been substantial. Buyers should take note of this and realize that Kentucky remains a great place to purchase a home even when other parts of the country are still seeing considerable drops.” The three largest associations in the state – Lexington, Louisville and Northern Kentucky – saw slight median price declines, all less than 5 percent during the first half of the year. The national picture, however, has seen price declines of 16 percent year over year with the Case-Shiller index showing current house prices 18.4 percent below their mid-2006 peak. Many of the large national markets have decreased 20 percent or more starting months ago when talk of the national slowdown began. The recent housing legislation has brought good news to first-time home buyers and more good news may soon follow. NAR’s chief economist Lawrence Yun has said that existinghome prices in some areas are now less than replacement building costs and that national home prices are projected to increase 3 to 6 percent in 2009. Damron continued, “With an increase in prices being forecasted for the upcoming year, Kentucky should consider itself in an excellent position to continue its long history of stable market conditions when the national markets turn around.”
Stats through first half - 2007 and 2008
Board/Association
# Sold 2008
# Sold 2007
# Sold %
Henderson-Audubon BOR
146
199
Hopkinsville-Christian BOR
192
295
-34.92%
Kentucky-Barkley Lakes BOR
135
191
-29.32%
Median Price 2008
Median Price 2007
Median Price %
87300
99950
-12.66%
95030
99925
-4.90%
106000
100251
5.74%
Region One -26.63%
Madisonville-Hopkins BOR
204
230
-11.30%
94750
89940
5.35%
Mayfield-Graves BOR
143
144
-0.69%
72792
61875
17.64%
Murray Calloway County BOR
109
125
-12.80%
116100
124900
-7.05%
Owensboro BOR
529
668
-20.81%
107725
93000
15.83%
Paducah BOR
325
380
-14.47%
119250
104500
14.11%
Pennyrile BOR
195
225
-13.33%
99500
96700
2.90%
Central Kentucky AOR
268
307
-12.70%
109125
115875
-5.83%
Heart of Kentucky AOR
796
978
-18.61%
135000
129650
4.13%
Old Kentucky Home BOR
206
321
-35.83%
104375
106725
-2.20%
REALTOR® Assn of SKY
878
1145
-23.32%
126250
118500
6.54%
Russellville-Logan BOR
88
109
-19.27%
104700
79250
32.11%
Shelbyville BOR
212
270
-21.48%
147544
157188
-6.14%
South Central Kentucky AOR
120
162
-25.93%
96500
106375
-9.28%
6042
7541
-19.88%
134150
137000
-2.08%
4334
4822
-10.12%
138800
145736
-4.76%
2589
3099
-16.46%
134500
137725
-2.34%
391
481
-18.71%
93075
88000
5.77%
Region Two
Region Three Greater Louisville AOR Region Four Lexington Bluegrass AOR Region Five Northern Kentucky AOR Region Six Ashland Area BOR Cumberland Valley BOR
254
362
-29.83%
91750
103200
-11.09%
Eastern Kentucky AOR
222
261
-14.94%
98375
87566
12.34%
Madison County BOR
1215
1380
-11.96%
133975
135822
-1.36%
102
177
-42.37%
82250
94000
-12.50%
Pioneer Trace BOR Somerset-Lake Cumberland BOR Totals
297
311
-4.50%
107500
120250
-10.60%
19992
24183
-17.33%
106000
104500
1.44%
Based on information from local REALTOR® associations/MLSs for the periods of January 1 – June 30, 2007 and 2008. *Statistics are unavailable for the following local associations: Cave Run, Cynthiana-Harrison Co., Dix River and Frankfort. Correction: The totals in the Summer 2008 issue were incorrect. We apologize for any inconvenience this may have caused.
FALL 2008 KENTUCKY REALTOR® 25
Community Profile
A Spotlight on...Bowling Green Bowling Green has been named an Ambassador City by the National Association of REALTORS® and the U.S. Conference of Mayors for their efforts to promote homeownership and affordable housing in the area. NAR and the U.S. Conference of Mayors, through its Council on the New American City, launched the Ambassadors for Cities program in 2003 to encourage cities and local REALTOR® associations to form strong and lasting partnerships to help reach out to home buyers and sellers. “REALTORS® build communities,” said Lonnie Gann, president of the REALTOR® Association of Southern Kentucky (RASK) and REALTOR® with the Hunt Real Estate Group. “They are the leading advocates for consumers’ housing needs, both in Bowling Green and cities across the country. Through innovative partnerships like this, more consumers are able to achieve and sustain the American dream of homeownership.” During an event held on July 30, Bowling Green and RASK were honored for their efforts to promote homeownership on the same day President Bush signed the Housing and Economic Recovery Act of 2008 into law. In attendance at this ceremony were Association Executive Meg Manning, KAR President-Elect Jeff Smith and Gann who were joined by Bowling Green Mayor Elaine Walker, Director David Gatton, Council on the New American City, U.S. Conference of Mayors, Donna Smith, NAR Region 4 Vice President and Bonnie Boyd, NAR Housing Opportunity Advisory Board Chair. The city and local REALTOR® association were presented with the Ambassador for Cities plaque and a $5,000 grant. Only five other cities across the nation were honored with Photo provided by the Bowling Green Area CVB this award in 2008. 26 www.kar.com
Photo by Devin Miller, CommunityLink
The initial goal of the program, called “Creating a Credit Responsible Community,” a title coined by Gann, will be to educate first-time homebuyers and provide pre-credit and post-purchase counseling. A significant part of the program will be to promote a portion of the new legislation that allows incomequalifying first-time home buyers who purchase a home between April 9, 2008 and June 30, 2009 to receive up to a $7,500 tax credit. Bonnie Boyd, Housing Opportunity Advisory Board chairwoman for NAR stated during the award ceremony that if the nation had more counseling, both pre and post, we would not be in the situation we are in today and she hopes Bowling Green’s initiative will serve as a model for other cities. The importance of homeownership was highlighted by Donna Smith, Region 4 vice president of NAR, who said 75 percent of this country’s wealth is in the equity of homes, so it is important for communities to do what they can to get qualified people into homes. Bowling Green should be able to capitalize on its housing initiatives due to many recent accomplishments that develop and expand a healthy workforce. The city was recognized once again for its positive business environment by Forbes Magazine, which recently released its list of Best Small Places for Business and Careers. Bowling Green was listed as No. 12 on the list for 2008. Mayor Walker says it’s no surprise that Bowling Green has been recognized by a prestigious magazine for its business and career opportunities due to the many new and expanding industry announcements the city has had in the last year. Bowling Green’s most renowned company is the General Motors Corvette & Cadillac XLR
Assembly Plant, where every Corvette and XLR is made. Across from the assembly plant is the 68,000 square foot National Corvette Museum, which has on display the one millionth Corvette to roll off the assembly line, along with dozens of others from eras spanning back to 1953 when the first “Vette” was produced. Several other high profile corporations call the city of 58,000 people home including the Fruit of the Loom headquarters. In fact, in 2007 alone, nine new major industry additions or expansions and more than $81 million of investments were announced for the city. One of the boldest initiatives, however, is a revitalization project that is being planned to further improve the drawing power of its downtown landscape. With a proposed $250 million of new development in the downtown area along with an estimated 800 permanent jobs, the future WKU Gateway to Downtown Bowling Green will be the largest economic development initiative in South Central Kentucky to date. This project will bring with it attractions such as SKyPAC (Southern Kentucky Performing Arts Center), a 4,000 seat minor league baseball park and Circus Square Park (opened in June 2008) along with office, retail, restaurant and residential space. The overall project will heighten the appeal of Bowling Green to current and future residents, business owners and visitors.
Photo provided by the Bowling Green Area CVB
But the city is not all about business and industry. Tourism in this area is also a driving force to the growth of the overall economy. Last year, many diverse, affordable attractions helped spur the state’s largest increase in tourism dollars for a ten-county group which included Warren County, home to Bowling Green. And it’s not all about what is seen on the surface. One of the more unique tourist stops lies deep within Bowling Green. The Lost River Cave, once used as a nightclub complete with stage, bar and dance floor, offers a fascinating adventure into Bowling Green’s cave system, one of the largest cave entrances east of the Mississippi River. It is also home to Kentucky’s only underground boat tour on a river that Ripley’s Believe it or Not claims is the shortest, deepest in the world. Escape the hustle and bustle of city life with a drive down the Duncan Hines Scenic Byway, an 82mile route named after Bowling Green’s native son, Duncan Hines. Along the route are stately mansions, quaint homes, one-room schoolhouses, an old train depot, historic cemeteries, Civil War battlefields and an old grainery and a stagecoach stop, which was once the home of Patrick Henry’s sister. For a city that, in 1810, had only 154 residents, Bowling Green, now the fourth largest city in Kentucky, continues to push forward as a home for those seeking genuine southern hospitality and a destination spot for tourists looking for a unique blend of events and entertainment that’s hard to find.
Photo by Devin Miller, CommunityLink
FALL 2008 KENTUCKY REALTOR® 27
From the Helm
2)
Unforgettable Experience “That was a forgettable performance.” The words of American Idol judge Simon Cowell, while harsh, usually ring true for the Idol contestants who deliver an adequate, or even good performance. But, if the performance doesn’t have the pizzazz to make it fantastic, then they get the criticism of being “forgettable.” What does it take to be “unforgettable” in the real estate business? How can you deliver service that is so “unforgettable” that not only do you have repeat customers, but your customers tell their friends and family how great you are? I recently had an “unforgettable” customer service experience. I have repeated this story to many people, and now I am telling 11,500 potential readers. I ordered a Barbeque Chicken Salad from Billy’s BAR-B-Q, which is down the street. (By the way, Billy’s was featured in the most recent Southern Living magazine.) When I got back to the office to eat, there was no Barbeque Chicken – only lettuce. I called them and they said to come on down and get another salad, but I had a meeting and couldn’t go. They called me back in a few minutes and said “Next time you come here, there is a $10 gift certificate waiting for you.” My salad was only $7.95. To me, that was “unforgettable” because (1) they were fast to remedy the problem and (2) their solution was better than the original purchase. Today’s real estate consumer has tons of information at their fingertips, so REALTORS® must ensure that each encounter with their customers is more than just adequate, but “unforgettable.” REALTORS® don’t have the advantage of having the best widget or newest thingamajig, so their customer’s experience is the only thing to set them apart from their competitors. Not only does the customer’s experience have to be incredible, it has to be incredible every time. Here are a few things a REALTOR® can do to provide “unforgettable” customer service: 1) Understand your customer’s needs. A good communication tool is to repeat what you heard. I once
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3)
4)
5)
6)
worked with someone who would say to me, “Let me repeat what I thought I heard.” It both confirmed our agreement, and assured me he was listening to what I was saying. Customers want the same service you would give yourself or a member of your family. If you have to break their hearts about the house they love, they may be unhappy for a while, but thank you later. If you try to make them happy for the moment in a house that won’t work, it could back fire on you in many ways. Having an uncomfortable conversation with them earlier may prevent upset customers or even legal issues for you later. Communicate your communication plans, and make sure they are harmonious with their style. For example, you may be calling them frequently, only to irritate a client who prefers e-mail. Ask them what frequency they prefer, and what communication method – e-mail, texting, phone calls – they would like to use. Trust, but verify. There are many people involved in a real estate transaction, and although you may know they are working with a competent lender, inspector, attorney, etc., checking in with those involved in the transaction on the progress will assure your client you are in the center of the transaction, and you are the one to go to if issues arise during the transaction. Do your homework. The customer expects REALTORS® to know about the house, the neighborhood, schools, churches, crime statistics, etc. More than ever, the purchaser can get information online about that but they don’t know about the neighbor with a barking dog, the loud music playing next door or the parties that go on all night. Selling the lifestyle can be as important as the house itself; the house and neighborhood should match your client’s wants and needs. Little things mean a lot. Sometimes, small gestures go a long way. A small gift, a little note or a homemade treat are ways that can help ensure your client remembers you. While a magnet with your business card is handy, it isn’t unusual; but a special scented or decorative candle will make them think of you every time they light it.
Make your client’s real estate buying and selling process such a great experience, they want to repeat it over and over again . . . with you as the REALTOR®.
Susan W. Helm, RCE KAR Executive Vice President
Code of Ethics
REALTOR® to REALTOR® Communications How to Make Your Next Co-op Experience Stand Out
While the Code of Ethics and Standards of Practice of the National Association of REALTORS® establish objective, enforceable ethical standards governing the professional conduct of REALTORS®, it does not specifically address issues of courtesy or etiquette. Below is a list of items that begin with a not-so-good approach to business followed by what should be done in each situation. 1) Thank goodness for voice mail! It helps cover for me. Check voice mail regularly and return phone calls promptly. 2) No phone call is so urgent that it can’t wait. Separate urgent calls from those that are not as important and act accordingly. 3) Call the REALTOR® later when you’ve got time! Confirm receipt of contracts or other important messages as soon as possible.
8) Hoard paperwork. Co-op agents do not need to see it. Return documents to co-op agent in a timely manner.
4) As long as I have received fax confirmation, I know the co-op agent got it. Notify the co-op agent at his/her office and/or home that an offer, counter-offer or anything that you are communicating about will be forthcoming, via fax, e-mail or hand delivery.
9) Whatever you do, don’t let them talk to each other! Encourage communication with clients, lenders and title companies.
5) Deadlines do not mean anything in this business! Pay close attention to timeliness and follow up with all relevant information and updates from the beginning to the end of the transaction.
11) When you’re gone, put everybody on hold until you return. Ensure that your business is covered by another agent in your absence.
6) There is too much paperwork, too many regulations! Always convey a positive attitude, follow the rules and remember the key to success is in the details. 7) Fill out the important items – it’s OK to leave blanks. Make sure that forms and contracts are legible, properly written and complete.
10) Ignore problems, they will go away. Address problems immediately.
12) Take all the credit for solds! When a home is sold, it would be informative and polite to mention both the listing and selling agents’ names on “Just Sold” cards. 13) Courtesies are only necessary in your own office. Always practice professional courtesies to all others. List compiled by the Columbus Board of REALTORS®
FALL 2008 KENTUCKY REALTOR® 29
A Day in the Life of... An Association Executive Margie Harper, Association Executive Heart of Kentucky Association of REALTORS® Elizabethtown, Kentucky Years of service: 13.5
If you could name one thing that puts a smile on your face, what would it be? When a member comments about something good or I receive a special “thank you” in the mail for a job well done, it makes all the stress of the job worthwhile. What is your favorite part of being involved in the REALTOR® organization? Probably my favorite part is the independence it allows me to do my job, along with meeting new people. What is unique about your association? Because of our proximity to Fort Knox, I believe the ethnic diversity in of our agents is unique. Many of them are from other countries and most have a connection to the military. Have there been any major changes with your REALTOR® association over the past decade? Our big thing was buying a building. Getting everyone to agree was a major accomplishment. Letting go of the MLS books last year was also a progressive change. It took awhile for everyone to realize that the internet was more up-to-date. What are some of the biggest challenges that you face as a local REALTOR® association? Our challenge right now is with Fort Knox and the Base Closure and Realignment Commission (BRAC). The projection is that in 2011 the area should have an increase of over 11,000 people. In the last year we have had issues with planning and zoning and used NAR Land Initiatives. They were a great asset. We also had 2 President-Elects resign and now we are selecting our third. Your area is heavily impacted by Fort Knox. What are you doing to help leverage the housing market through this asset? We have been working with an organization called OneKnox to help with BRAC (http://www.oneknox.com). We have been involved in
30 www.kar.com
road trips where Fort Knox and leaders of the community traveled to several other states that will be impacted and talked to the people about relocating to this area. OneKnox is now working on community tours and bringing some of those folks here. We will be welcoming those people by sponsoring a lunch and distributing materials to encourage them to visit our website. How is the local housing market? The market is still down somewhat compared to last year but with the change in Fort Knox we anticipate that to change and we should start seeing results. Are you taking any steps to counter the negative media on housing? Our association partnered with the local homebuilders and did the Buy Now, Build Now campaign. We had print, TV, radio and movie theater ads running. We are now doing articles weekly in our real estate section that hopefully is helping with some of the negative media. Outside of your participation in the REALTOR® organization, what is your biggest hobby? My life centers around my 9 year old daughter, Briana. My life consists of taking her to church events, Girl Scout meetings and basketball games. She had leukemia when she was 3, so I am so blessed with having her. She makes me very proud. One hobby I am into now is genealogy. What organizations, outside of work, are you involved? The association is connected with many different groups which I stay involved with personally and I just finished Leadership Radcliff and am applying for Leadership Elizabethtown. Last question, what is the best piece of advice you’ve ever received? My ex husband used to tell me “Don’t be afraid of people, they can’t eat you.”