KYREALTORFall2010

Kentucky

REALTOR ®

Fall 2010

A publication of the Kentucky Association of REALTORS ®

KAR Convention & Expo September 21 - 23 French Lick Resort, French Lick, IN

IT’S NOT JUST A CONVENTION, IT’S A DESTINATION! S.A.F.E. ACT FEDERAL ISSUES STARTING SOCIAL MEDIA ELECTION INFORMATION Photo: courtesy of French Lick Resort

www.kar.com

Contents

Volume 4, Number 1, Fall 2010

IN THIS ISSUE 4

KAR News

A publication of the ® Kentucky Association of REALTORS President John W. Smither, GRI ® Lexington-Bluegrass Association of REALTORS President-Elect Tony Clark, ABR, CRB, CRS, GRI ® Owensboro Board of REALTORS Treasurer Kevin Farris ® Heart of Kentucky Association of REALTORS Treasurer-Elect Ronald E. Hughes, ABR, CRS, GRI ® Paducah Board of REALTORS Executive Vice President Susan W. Helm, RCE susiehelm@kar.com Communications/Education Director Hunt Cooper hcooper@kar.com Address letters and inquiries to: ® Kentucky REALTOR 161 Prosperous Place, Suite 100 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.

Federal Issues Affecting Real Estate

10

Social Media

14

Join the REALTOR® Party and Vote

16

Make Your Open House a Safe One

18

Are you S.A.F.E.?

20

REGULAR FEATURES President’s Message

5

Tools You Can Use

6

Legal Update

8

Education

19

Local Association News

22

By the Numbers

24

Housing Stats

25

Community Profile

26

From the Helm

28

Code of Ethics

29

A Day in the Life of...

30

®

Kentucky REALTOR (USPS 024-933) is published quarterly (Fall, Winter, Spring, Summer) by ® the Kentucky Association of REALTORS , 161 Prosperous Place, Lexington, KY 40509.

Periodicals postage paid at Lexington, KY. POSTMASTER: Send address changes to ® Kentucky REALTOR , 161 Prosperous Place, Suite 100, 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.

Reproduction prohibited without permission.

Copyright © 2010 ® Kentucky Association of REALTORS , Inc. All rights reserved.

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KAR News Candidates for 2011 KAR Leadership Positions Voting will be held at KAR’s Annual Convention & Expo in French Lick, Indiana. The winners will be announced at the Delegate Body/Annual Membership Meeting.

Earleene Woods Murray-Calloway County Board of REALTORS®

Members of the Delegate Body vote for KAR Officers, Representatives to NAR, all At-Large Directors and Region Directors in their region. The membership of KAR may vote for all At-Large Directors and Region Directors in their region. Note that the manner of the election of Region Directors shall be either directly by the entire membership of the region or indirectly by all member boards or associations in the respective regions. Regions may also request assistance from KAR in conducting their Region Director elections. For more information, visit www.kar.com > Members > Elections.

Donnie Sims REALTOR® Association of Southern KY

Unofficial* List of Candidates President-Elect Ann McDonald Lexington-Bluegrass Association of REALTORS®

Treasurer-Elect Jack Hoffman Northern Kentucky Association of REALTORS® Norman Jones Eastern Kentucky Association of REALTORS®

At-Large Director Linda Gibson Cecil Greater Louisville Association of REALTORS®

Region Director, Region 2

Region Director, Region 4 C. Gale Fulton Lexington-Bluegrass Association of REALTORS®

At-Large Delegate Jim DeMaio

Greater Owensboro REALTOR® Association Lisa Presley-McGrew Greater Louisville Association of REALTORS® Libbi Taylor Lexington-Bluegrass Association of REALTORS®

NAR Director Charlie Murphy Lexington-Bluegrass Association of REALTORS® Kenneth W. Warden Northern Kentucky Association of REALTORS®

NAR Regional Vice President, Region IV Rebecca D. Murphy Lexington-Bluegrass Association of REALTORS® John J. Weikel, II Greater Louisville Association of REALTORS®

Ashley Trautner Lexington-Bluegrass Association of REALTORS®

Nominees listed above submitted a completed form to KAR by the August 17th deadline.

Rebecca Trout Northern Kentucky Association of REALTORS®

* A Nomination Form has been received by KAR, but has not yet been reviewed by the Past Presidents Committee.

LeadershipKAR – Applications Being Accepted Would you like to join the ranks of some of the most successful REALTORS® from around the state?

You can by becoming part of the LeadershipKAR program. This program allows participants to work together in a training course that combines individual study, group sessions and actual project experience in building leadership skills. LeadershipKAR is open to all REALTORS® members of KAR, however, a maximum of 15 individuals will be appointed to participate in the program.

Apply for the 2011 LeadershipKAR program www.kreef.org > LeadershipKAR

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For more photos from the Summer Business Meeting at Lake Barkley or other past events, check out kyrealtors.smugmug.com.

President’s Message The Long Days of Summer Summer is in its final stages and we have read nothing but real estate doom and gloom from all types of national news sources, but I am here to tell you that it is better in this state than in other places and it is continuing to move more in that direction. I am hearing it from all across Kentucky from both inside our ranks and folks outside the industry.

John Smither, 2010 KAR President

Home sales through the first half of 2010 were certainly boosted by the tax credit and prices held steady leaving us in much better shape than most of the 49 other states that we don’t have much room to complain (see page 25). Isn’t it good to be a REALTOR® in Kentucky?

The remainder of 2010 is uncertain and most of us have been through the valleys before and we know what to do when the path gets a little bumpy. That is, go back to the basics and do what we did when we first received our license and became active in real estate. I believe it is what we used to call “prospecting,” a lost science in today’s marketplace. Everyone (note: as long as they are qualified) is a candidate for making a home purchase either now or in the future. Hand those business cards out, start networking and get back in touch with your SOI. It is amazing how quickly old contacts forget you are a REALTOR®.

Vacations are winding down!

Kids are preparing to go back to school!

Interest rates at an all time low!

this?” Taxes and more taxes are going to be proposed at all levels of government that WILL (read: definitely) affect your bottom line. If you are going to stay in this business and think someone else is going to pay your share – think again. It won’t work this time. KAR will be working at all levels to try to make a difference, but the only way we can do this is with your help. Do I need to beg for your help?

If so, then consider this my calling.

On another note, we have a fun and action-packed Convention being held at the French Lick Resort coming up soon. Twenty-three hours of continuing education classes and even a CRS/GRI elective course is being offered. I encourage you to look at the information available for this event (visit www.kar.com) and consider attending. You will benefit from it more than you realize.

As my days as your President start to wind down, we will be gearing up to install your new President in French Lick and I know that Tony would be happy to see each and every one of you there.

Inventories are at a reasonable level!

With the summer winding down, let me remind you to not forget your business insurance plan. I do trust that you have made the decision to purchase it before now. If you haven’t, there are more reasons today than ever before to make that a reality.

John Smither 2010 KAR President

I’ve said it before, the federal government, the state government and even the city governments are broke.

I could go on and on because I, too, am broke. The difference is I can’t tax anything or print any more money.

You are asking yourself, “Just where I am going with

FALL 2010 KENTUCKY REALTOR® 5

Tools You Can Use Marketing Minute www.addthis.com AddThis, a bookmarking and sharing button, enables website publishers and bloggers to spread their content across the web by making it easy for visitors to bookmark and share content to their favorite social destinations. The program is fast, powerful and easy to install. Even better, it’s free and offers sophisticated analytics to help users understand how and where their content is being shared.

Content can now be shared with a huge list of services (over 300) such as Facebook, Twitter, LinkedIn, Digg, sites popular in other countries and even new utilities that are popping up every day. The best part is, the list is growing and automatically updates to keep your sharing tools current with these new services, so you don’t have to.

AddThis automatically optimizes itself for each person who visits your site. Every person shares differently, so AddThis custom fits each menu with the services they’ll normally use.

For example, if a user shares to Facebook and Amazon Wishlist, they will be presented with those first. Also, if a user is sharing from an iPhone, the program will provide an alternate menu view. This ensures that your content is always one click away, because the right service is always tailored to the right person.

The program can also be customized. You can tweak the colors, swap out the destinations and even add your branding.

AddThis offers the chance to simply customize the entire experience through a client API. For total control, you can create your own sharing menu, complete with the way the program looks on your site, with the toolbox feature.

One of the most popular features is the analytics provided.

They are designed to give stats on sharing trends, top content shared, top services, etc. These reports can help you understand how people are sharing your content and what is popular on your site.

Do you have SMFS? According to Bernice Ross, CEO of RealEstateCoach.com, social media fatigue syndrome (SMFS) is defined as: “A feeling of physical and emotional exhaustion resulting from having to respond to too many pieces of digital communication.

Symptoms include thumb cramps, chronic dry eye due to excessive computer screen exposure, quickness to ‘flame’ people who disagree with you on discussion boards, dizzy spells resulting from overexposure to Flash applications, plus the inability to make eye contact or carry on a conversation in face-to-face situations. Additional identifying symptoms include unconscious compulsive eating of high-sugar and high-carbohydrate foods, caffeine addiction, and lack of muscle tone from too much sitting. She goes on to say that people suffering from advanced cases of this syndrome stay connected 24-7, even taking their digital communication device with them to the toilet or using it in other intimate settings. That just about sums it up, doesn’t it?

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Ask.com

Do you answer real estate related questions posted with online forums like Trulia Voices, Activerain or other outlets (there are many)? You may have heard of Ask. com, the forum that has, for years, been creating massive amounts of content by independent writers to answer basic questions. It works by “experts” being hired to focus on a specific topic like automotive, retail or real estate. Soon, Ask. com will launch a question and answer community that will be invite only and in beta but could easily be the next “big thing” for local real estate due to its mass appeal and huge database.

Ask.com has said the project’s goal is to locate the most relevant, high-quality answer and display it right at the top of page which will reduce spam and question fatigue by indexing responses based on relevance.

Springpad

springpadit.com Springpad, a free online app, has been described as a super advanced personal assistant. The program, which is similar to Evernote, helps organize the stuff you encounter throughout the day – ideas, tasks, restaurants, products, books, photos, recipes, etc. The platform not only organizes items into categories and bookmarks pages; it also figures out what you’re saving and tries to put it into context to help you use it. Mobile apps are available for iOS and Android, so you can also access it all offline. Springpad also offers a web interface that uses a “My Stuff” section so as you come across cool things on the net or in real life, you can add them by clicking the plus (‘+’) button. You can also add stuff by way of a special Springpad email address. But, probably the best way to add stuff is via the web clipping bookmarklet that adds your current page to Springpad immediately. The program is also supports basic tasks like quick notes and lists from your phone including photos, voice memos and checklists – all of which are synced to the “cloud.” Calendar events are able to be synced with Google and alerts can be set to remind you of deadlines and so forth by way of email or text message. The app is still being developed so updates and new features are still to come and as most online apps go, it’s free.

Follr.com Consider the traditional business card; it contains your name, your company, phone numbers, email and website. But is it a complete representation of who you are and the variety of online channels that you can be found? Does it include your social networks or blogs, Flickr, Twitter or Skype, just to name a few? How do you let the people you interact with know all these addresses? follr.com, a new business tool in the form of a social business card, could be the answer. The application is a website combining all your online social activity streams and contact information into one easy contact solution.

REALTORS® can list all their social profiles, with links, giving consumers easy access to their online world, contact information and listings. The free version of the card lets a user share six

social sites, full contact and profile information (including a video embed), activity streams and custom links. A paid version allows for up to 100 social sites and increased personalization, SEO control and traffic analytics.

Carbonite

carbonite.com Your computer is filled with irreplaceable files: emails, photos, music, business contacts and financials. Carbonite is one of several programs that automatically and securely backs up this content on your computer through the “cloud.” Prices for services can vary from company to company and can also differ in the amount of storage offered. By default, Carbonite backs up everything in your Documents and Settings folder including documents, photos, email and data files from applications, such as Quicken, Money, etc. Music can also be added to the list. The program works for both PCs and Macs.

If the unthinkable does happen (that is, you lose everything), Carbonite makes restoring files fast and easy. You can restore any file or folder from your backup with just a few clicks.

Usually, recovering small amounts of data (a few files here or there) will probably take only seconds or minutes. Restoring all of your data will take longer and depends on how much data you have and the speed of your Internet connection.

New PSA Campaign to Raise Awareness The Advertising Council, in partnership with the U.S. Department of the Treasury and the U.S. Department of Housing and Urban Development (HUD), announced recently the launch of a national public service advertising (PSA) campaign designed to encourage homeowners who are struggling with their monthly mortgage payments to learn about the Making Home Affordable Program. The national campaign encourages other struggling homeowners who may be eligible for assistance to reach out for the help they need through free resources made available by the Federal Government. The PSAs direct homeowners to visit MakingHomeAffordable.gov or call 1-888-995-HOPE (4673) to see if they may be eligible for assistance to make their mortgage payments more affordable and to understand options they may have to avoid foreclosure.

LinkedIn App Real estate technology company Rofo has created a new app for LinkedIn.com that allows real estate professionals to add property listings and information about past transactions to their profile pages. The app was originally designed for Rofo’s base in commercial real estate, but it was expanded to be useful for residential practitioners as well. Listings entered with the app also appear on Rofo.com and anyone who views the deals at LinkedIn can also see additional information at Rofo.com where they can click through to the practitioners’ websites. The app is free for individuals, but the listings remain visible for only 30 days. For $19 a month, a user can post 11 listings that stay visible with no time limit.

Bits and Bytes ReadNotify www.readnotify.com ReadNotify, an email tracking service, tells you when email you send gets read / re-opened / forwarded and so much more. The service makes bugging e-mail a matter of pointing and clicking.

Users of the service register their e-mail addresses with ReadNotify, then simply append “.readnotify.com” to any e-mail address they send mail to if they want the message to be tracked. (in the default setting, an e-mail recipient could tell that tracking is installed by a return receipt message popping up, but the service also has an “invisible tracking” setting).

The service offers free trials for two weeks or 25 emails (whichever comes first) and the continuous service offers a few plans which vary in price depending on the length of contract you need.

ReadNotify will provide the following in your tracking reports: • Date and time opened • Location of recipient (per their ISP city /town) • Map of location (available on paid subscriptions) • Recipients IP address • Apparent email address of opening (if available) • Referrer details (ie; if accessed via web mail etc) • URL clicks • How long the email was read • How many times the email was opened • If the email was forwarded or opened on a different computer There are lots of great sending options and features as well: • Certified email • Ensured-Receipts and retractable emails • Invisible tracking • Self-Destructing emails • Block printing • Adobe Acrobat PDF Document Tracking • Tracking of Word or Excel documents

FALL 2010 KENTUCKY REALTOR® 7

Legal Update The ABC’s of General Agency Law When does a person have the authority to sign a document on behalf of another? Or on behalf of an association or entity? From powers of attorney to presidents of corporations, agency law can play an important role in almost any real estate closing.

Agency Defined In Kentucky, ‘agency’ consists of a contract, either expressed or implied, where the ‘principal’ entrusts an ‘agent’ with the management of some business to be transacted in the principal’s name, or for the principal’s account, and where the agent agrees to undertake the business for the principal and to be held accountable for it.

Legal Capacity of Principals Any person who has the legal capacity to enter into a contracts and who is not under a legal disability may authorize another to be their agent. If the principal is under a legal disability, the nature of the incapacity determines its legal effect. For example:

1

The acts of a minor are voidable but not void, and a minor acting as a principal can choose to ratify or affirm the appointment and acts of the agent once the minor has reached legal age.

2

A person who lacks the mental capacity to contract and conduct business is not competent to appoint an agent for those purposes.

Kentucky recognizes ‘durable’ powers of attorney pursuant to KRS 386.093. By complying with the statute, the acts of an attorney-in-fact under a durable power of attorney are valid even though the principal may actually have a legal disability. The durable power of attorney becomes ineffective at the time the legal disability of the principal is established by a court of law.

It is important to be aware of the rules governing ‘durable’ powers of attorney. Powers of attorney that are not ‘durable’ may be invalid if the principal has lost legal capacity, such as where a principal might be involved in a serious accident, or suffer from dementia, or experience an incapacity due to serious illness.

Legal Capacity of Agents The rules governing the capacity of agents are somewhat looser than those for principals. Even one who suffers under a legal disability without the capacity to contract can act as an agent and bind his or her principal. For example, a minor, or someone who lacks mental capacity, or even someone who is intoxicated, may act as an agent in a representative capacity and bind the principal. The principal’s full knowledge and

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consent to the agency relationship gives rise to a conclusive presumption that the agent has legal capacity, regardless of the agent’s actual capacity.

Duty of Loyalty and Good Faith The agent owes its principal the duties of absolute good faith and utmost fair dealing, and is required to advise its principal fully of all facts within the agent’s knowledge.

An agent is not permitted to deal in the subject matter of the agency for personal gain without the consent of the principal. Similarly, profits realized by an agent in the course of his duties belong to the principal, unless the parties have agreed otherwise.

In short, agency is a fiduciary relationship, and the agent may not seek to profit from the relationship at the principal’s expense beyond the agent’s agreed compensation. The fiduciary’s duty of loyalty and good faith includes the duty not to act against the principal’s interest.

Liability of Principal and Agent In Kentucky, a principal is bound by the acts of his agent undertaken within the scope of the agent’s duties. Thus, if the principal has held out that the agent is authorized to buy land for the principal, the principal is bound by the purchases made by the agent that fairly and reasonably fall within the class specifically authorized by the principal, or within the scope of authority that the principal has appeared to vest in the agent.

Kentucky’s Statue of Frauds Kentucky’s Statue of Frauds, KRS 371.010, holds that certain contracts are not valid unless put in writing and signed by the party to be charged or by his or her authorized agent. The statue invalidates otherwise enforceable agreements that fall short of the statute’s writing requirement. Basically, the purpose of the Statue of Frauds is to make sure there is written evidence for the existence of certain contracts.

Kentucky law has long held that the authority of an agent to bind his or her principal to a contract for land does not have to be evidenced in writing. KRS 371.010 allows the required writing to be signed by an agent, but not the principal, and this creates an exception to the writing requirement.

In Kentucky, a principal is bound by the acts of his agent undertaken within the scope of the agent’s duties.

As a general matter, the law of undisclosed principals departs from general agency law by allowing a third party to be bound to a transaction with a person with whom the third party did not intend to contract.

Unless otherwise specified by agreement, a contract entered into by an agent for the benefit of an undisclosed principal becomes the contract of the principal. The undisclosed principal is entitled to enforce the terms of the contract as if he or she were an original contracting party, and the agent may hold the principal to the contract even though the agency is not evidenced by a writing.

Closing Thoughts Careful and informed documentation can help real estate practitioners make the best of general agency rules, and prevent disastrous problems from arising. Powers of attorney should be obtained for every significant party who is not physically present at closing, and resolutions of associations and entities should be signed by every partner, LLC member or shareholder, whether or not they are physically present at closing. In addition, someone at the closing should sign an affidavit to verify that signatures on resolutions are valid, and that the authority granted in resolutions have not been revoked. Also, make sure powers of attorney and resolutions are dated as near to the closing date as possible. Finally, be sure to record any resolutions or powers of attorney with the deed or lease memorandum, so that title examiners can easily verify that signatures on the documents were properly authorized.

This twist in the law deserves a note of warning — a principal can be bound to a real estate transaction without ever having executed a writing that complies with the Statute of Frauds, so long as there exists a valid agency relationship and so long as the agent has executed a writing evidencing the transaction that satisfies KRS 371.010.

Undisclosed Agency Where a third party dealing with the agent has reason to believe that the agent is or may be acting on behalf of another, but does not know the identity of the principal, the principal on behalf of whom the agent is acting is considered to be ‘partially disclosed’. Where a third party dealing with the agent is totally unaware that the agent is or may be acting on behalf of another, the principal is considered to be ‘undisclosed’.

Doug Martin is Legal Counsel for the Kentucky Association of REALTORS® and maintains his private law practice in Lexington, KY.

The previous discussion should not be viewed as legal advice.

Please consult your attorney.

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Feature Article

Federal Issues Affecting Real Estate Over the past several months, Congress has been introducing legislation and making sweeping changes to many issues that have a direct impact on the real estate industry and the way REALTORS handle day to day transactions. NAR has been busy lobbying so these changes don’t have negative impacts on both you and your clients while you have been trying to make sense of it all. As a way to help clarify some of the federal issues, we have outlined a few of the major changes. By Anetha Sanford, KAR Government Affairs Director ®

Financial Reform Since early 2009, NAR has been working closely with the members and staffs of the House Financial Services Committee and the Senate Banking Committee to ensure that Wall Street Reform legislation did not adversely affect REALTORS®. Now that the financial reform has been put into place, it’s important for KAR members to know how this will influence the real estate industry. Below is a summary of the issues of particular interest to REALTORS®:

Consumer Financial Protection Bureau (CFPB) NAR secured an exemption for real estate professionals performing traditional real estate activities from the jurisdiction of the Consumer Financial Protection Bureau except to the extent they are governed by existing laws such as the Real Estate Settlement Procedures Act (RESPA) that will now come under the bureau’s purview.

Mortgages Risk Retention – Qualified Mortgage Exemption • At NAR’s request, Congress included a qualified mortgage exemption from potentially costly – for both lenders and consumers – risk retention requirements.

• Congress gave the regulator flexibility in determining what a qualified mortgage is, however the mortgage must meet the standards laid out in the predatory lending portion of the bill. These standards include underwriting based upon full documentation, ability to repay and limitations on fees among other things.

• NAR will work with the regulators to ensure that the regulatory framework maximizes access to affordable mortgages for consumers.

Qualified Mortgage Safe Harbor • A safe harbor from the “ability to repay” requirement was created, which limits the total points and fees collected by lenders and their affiliates to three. This provision was included over NAR’s strenuous and repeated objection.

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• However, we believe there is some regulatory flexibility in this provision including flexibility for smaller loan amounts with “smaller” being left undefined.

• NAR will work diligently to ensure this provision is interpreted in a manner consistent with the best interests of real estate professionals, their lender partners and their clients and customers.

Seller Financing NAR was successful in getting the legislation amended to allow an individual to conduct three seller financed transactions in a 12-month period without being subject to the complicated mortgage rules in the new Act. NAR has asked HUD to adopt a similar approach to exempt seller financing, up to three transactions in a 12 month period, from loan originator licensing requirements under the S.A.F.E. Act. (To learn more about the S.A.F.E. Act, see page 20).

Commercial Accounting Rules Study The Act requires the Federal Reserve to study the combined effects of the risk retention requirements with recent new accounting rules put in place by the Financial Accounting Standards Board (FASB) that represent dramatic changes in securitization accounting (FAS 166 and 167).

Accredited Investor The Act gives the SEC the authority to review the current standard and update it to reflect inflation and the characteristics of the modern economy. The bill excludes the investor’s primary residence from $1 million net worth standard. The SEC review may raise the threshold for defining a customer as an accredited investor, forcing companies that sell securities to them to register the products with the SEC.

Commercial End Users The Act appears to allow commercial end users – including owners, operators and developers of commercial real estate – to continue to engage in swaps used to manage commercial

Appraisal • Appraisers are to be compensated at a rate that is reasonable and customary for appraisal services in the market area of the property being appraised.

risk without being subjected to central clearing. However, regulators would now be authorized to impose initial and variation margins on these un-cleared trades.

As for provisions governing securitization, the final language retained - with minor modifications - an amendment by Senator Mike Crapo (R-ID), allowing “third party” (B-piece) investors to satisfy new risk retention requirements for commercial mortgage-backed securities (CMBS). This language also directs bank regulators to consider exemptions or different riskretention requirements for CMBS.

Securitization The Act requires banks that package loans into CMBS to keep 5% of the credit risk on their balance sheets. Directs regulators to exempt low-risk mortgages that meet certain minimum standards. (See “Risk Retention – Qualified Mortgage Exemption” above.)

Swaps Financial firms, a class that likely includes mortgage real estate investment trusts (REITS), will be required to centrally clear their swap transactions and meet margin requirements.

• Home Valuation Code of Conduct (HVCC) sunsets when Consumer Financial Protection Bureau issues interim final regulations implementing the appraisal provisions of the Dodd-Frank Act. • A subprime mortgage requires a written appraisal of the property to be mortgaged.

• The

applicant is entitled to one free copy of the appraisal.

• The

applicant must be notified that the appraisal is prepared for the sole use of the creditor.

• It is unlawful to coerce, extort, collude, instruct, induce, bribe, or intimidate an appraiser in an attempt to influence the independent judgment of the appraiser.

• An

appraiser may consider additional, appropriate property information including additional comparable sales to support an appraisal, provide further detail, or correct errors.

• Appraisal Qualifications Board (AQB) Qualification Criteria for licensed and trainee appraisers becomes mandatory for the states (currently voluntary).

• The Federal Housing Finance Agency (FHFA) and the new Consumer Financial Protection Bureau become members of ASC. The Office of Thrift Supervision is no longer a member of ASC because it is being merged into the Office of the Comptroller of the Currency.

FALL 2010 KENTUCKY REALTOR® 11

Feature Article cont.

1031 Like Kind Exchange Intermediaries NAR supported language requiring the SEC to conduct a study on how best to regulate 1031 Like Kind Exchange Intermediaries to end the fraudulent practices that have been taking place.

Foreclosure Aid The federal government is providing $3 billion to unemployed homeowners facing foreclosure in the nation’s toughest job markets. The Treasury Department said it will send $2 billion to 17 states, including $56 million to Kentucky, which have unemployment rates higher than the national average for a year. The money will be earmarked for programs to aid unemployed homeowners.

Governor Beshear has said the funds will help active job seekers bridge the gap for a few months with their mortgage payments. The Kentucky Housing Corporation will be overseeing the aid process and details should be made available soon. For now, struggling homeowners in Kentucky can get free advice by using the state’s existing Homeownership Protection Center by visiting www.protectmykyhome.org.

The Obama administration also announced another $1 billion will go to a new program being run by the Department of Housing and Urban Development. It will provide homeowners with emergency zero-interest rate loans of up to $50,000 for up to two years. The administration was required to launch the HUD emergency loan program by the financial regulatory bill.

National Flood Insurance Program For some time now, the Congress had been approving short-term extensions of the NFIP authority to issue flood insurance policies while debate continued over how to pay for debt from the 2005 hurricane season. Since September of 2008, there have been 8 short-term flood extensions and, twice, authority has been allowed to expire. The latest extension was set to end on September 30, 2010.

Recently, the House passed H.R. 5114: “Flood Insurance Reform Priorities Act,” which would: Extend NFIP authority through fiscal year 2015, a step that would end the current month-to-month approach that has resulted in 8 extensions and 2 expirations since September 2008.

Increase the maximum coverage limits which have not been updated since 1994.

Prevent insurance companies from denying wind claims because some of the damage was attributed to flooding.

Reform and ensure continuation of a program which is

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now $20 billion in debt, including phasing-in actuarial rates over a 5-year timeframe for some older properties which have been paying less than the market rate. For commercial properties and non-primary residences, the phase-in would begin 3 years after enactment. The phase-in for primary residences would begin once a property is sold. The bill also extends a pilot mitigation program and phases-in rates for properties with severe and repeated losses.

The Senate has yet to act and NAR continues to work with Senate leadership on this issue and will pursue more action be taken this fall.

REALTORS® want to know what this could mean to their business. Without the NFIP, property owners in federally designated areas across nearly 20,000 communities nationwide could not obtain a mortgage or flood insurance to protect their properties.

Rural Housing Fund The long anticipated restoration of the Section 502 singlefamily rural housing program has been restored after being discontinued in May because it had exhausted its existing funds of $13.1bn. The program will have a few changes but allows 30-year originations primarily for lowincome families (defined as those making less than 115% of local area median income) to purchase households or renovate the ones they already own with no down payment at the time of application. Loans are guaranteed by the federal government and, although the legislation increases the guarantee fee for borrowers to 3.5%, the fee can still be financed. This change will make the program completely self-

sufficient. The legislation also increases the Rural Housing Service (RHS) commitment authority allowing guaranteed loans. Previously RHS had been providing conditional commitments. RHS will be announcing new guidelines soon. So far this year the program has provided financing for approximately 85,000 families in rural communities.

FHA Reform Congress has been busy dealing with FHA with the introduction of S. 3704, the FHA Reform Act of 2010. This bill implements changes necessary to help FHA remain strong and rebuild its capital reserves. The bill provides a number of taxpayer protection measures, while ensuring that the FHA program remains affordable and available to responsible homebuyers. A companion measure (HR 5072) passed the House in June. NAR strongly supports this bill to continue FHA’s mission of providing responsible borrowers with affordable mortgage financing.

The Senate also passed a measure to increase FHA’s annual premiums. FHA needs to increase premiums to restore their capital reserves fund that had fallen to .55% from the required 2%. FHA has published a letter, announcing their intent to implement the new premiums for case numbers issued after September 7, 2010. They will lower the upfront premium to 1%, and increase the annual premium to .85.90%, depending on LTV.

Lead Paint On June 18, the Environmental Protection Agency (EPA) announced that it will provide renovation firms and contractors additional time to obtain the requisite training and certifications to comply with the new Lead Renovation, Repair and Painting (RRP) Rule. Until October 1, the EPA will not fine workers for lacking certification if they have applied to enroll or are enrolled in a class by September 30 and complete the training by December 31. This is largely a response to the Senate voting, May 27, to delay those certification requirements with an NAR-supported amendment to a supplemental spending bill (H.R. 4899). While delaying enforcement of the same requirements, the Agency wrote that it will continue to enforce the rule’s other requirements pertaining to lead-safe work practices.

Concerning the proposed Commercial Lead Paint Rule, the EPA issued an Advanced Notice of Proposed Rulemaking (ANPR) concerning the Renovation, Repair and Painting Program for Commercial and Public Buildings. The purpose of this ANPR was to solicit feedback and comments on a proposed program that would be similar to the one promulgated for homes, which aims to reduce children’s exposure to lead dust during renovation activities. In this most recent ANPRM, EPA has requested

comments on a variety of issues specific to the regulation of RRP activities in commercial and public buildings.

NAR, in coalition with several other impacted organizations, submitted comments on July 6, 2010 to express a variety of concerns regarding this proposed regulation. In the comments, the Coalition emphasized that EPA must consider the scope of its authority before proceeding with any regulations.

1099 Rules Self-employed real estate practitioners should expect a host of new paperwork beginning in 2012. That will be the first year that whenever a firm buys more than $600 a year in goods or services from a vendor – whether it is a giant company or a one-person show – the vendor will be due a 1099 from the purchaser at the end of the year. Lawmakers passed the provision to help fund healthcare changes by closing the “tax gap” created by cheaters. An estimated $300 billion of revenue is lost to tax evasion every year.

Critics say the new rules expand current reporting requirements significantly, with the burden falling on sole proprietors and other very small businesses. The new rules require tracking payments throughout the year to see if they fall into the over-$600 category.

If the vendor fails to supply his or her tax ID number, then the payer is required to withhold 28 percent of the payment and send that amount to the IRS. There is a way around this. Businesses that pay with credit or debit cards are excused from sending 1099s.

Sources: Excerpts taken from NAR and the Wall Street Journal

FALL 2010 KENTUCKY REALTOR® 13

Business Tools Getting Started in Social Media Without Hitting a Tree

By William H. Lublin GRI, CRS, CRB, CSM

Engaging in Social Media is a “no brainer” for professionals and businesses. The tools are easy to use, they cost little or nothing and they provide a way for us to amplify our networking efforts.

However, the very thing that makes them attractive also makes them dangerous. Because social marketing tools are so easy to use, people have a tendency to use them before they formulate a strategy or a policy for the use of those tools.

If the risks aren’t obvious to you, think about a young child driving a car. By the age of 10 or 11 years old, a child is physically large enough to enter a car, start the car, engage the transmission and press the pedals – and because of that they are able to drive the car. But getting from point A to point B safely, without running over the family pet or hitting a tree or taking out a fence, is a lot tougher to do without training.

REALTORS® are jumping into social media in increasing numbers because the buzz about social media is everywhere. In fact, a Google search of the words “REALTOR® social media” brings over 8,000,000 responses while a search for the words “real estate social media” shows 50,000,000 responses in just seconds. Sadly, most of them are going to start their “trip” in social marketing without a road map – a sure way to get lost.

Here are a few tips to help keep you pointed in the right direction when you start on your social media excursion:

1

2

3

Remember that you are always wearing your REALTOR® hat - even on Facebook. That means you need to be careful talking about your buyers and sellers and their reactions to showings or conversation you have had. You don’t know what information your opposite number may glean from the most innocent of statements.

Dual Incomes are not uncommon in the real estate industry, and sometimes REALTORS® are also participants in other business ventures, but confusing your online community by trying to promote two businesses at a time is a real mistake. Pick one horse and ride it to the finish line!

Social media is not called advertising media for a reason.

If you make your participation in social media a one way stream of promotional statements, you’ll find that no one is listening. Be a valued member of your online

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community. Participate in discussions, listen to others, praise their efforts when appropriate and engage people in a meaningful manner.

4

Be consistent in your manner and appearance online. If you want people to connect with you, don’t choose a logo as your avatar. People want to connect with people, not with companies. Speak the way you speak naturally.

Be interested in what they are interested in and they will be interested in what you have to contribute.

5

Keep an eye on what people are saying about you and your company, and even if they’re not talking about you at all! If someone says something negative, don’t respond in haste or in anger, and never let a disagreement turn into a personal attack. Stick to the facts and show yourself to be a reasonable person with a regard for the truth. The details of your disagreement are public and permanent - so be careful.

6

Don’t worry about how many “friends” you have on Facebook or followers on Twitter. Instead worry about who they are, why you want to be connected with them and what you want the nature of that connection to be. What value do you offer them in your relationship? Think about how you want to engage with people and what you can do to enhance your business. Social media is a space where you truly have to give value to receive value.

7

Don’t forget to connect with your offline community in these new spaces, and remember to move your online community offline. Back in the dark ages, I worked for a broker who said you need to use your time on the phone to get appointments because they can’t fit a pen through the little holes on the receiver. While that’s not quite true in a world of digital signatures, you still need to connect with people face to face in order to accomplish much of what needs to be done in the real estate business.

Finally, and most importantly think about what you are going to use the technology for? What are you going to do online in an appropriate, ethical and effective manner that has a business purpose? How will you become a valued member of this new community? You’ve done it in your business in the physical world - you can do it in the virtual world.

William H. Lublin GRI, CRS, CRB, CSM, will be a featured speaker at the upcoming KAR Convention & Expo. His courses – Tech Agent: Managing Your Risks & Reputation and Tech Agent: Essential Concepts & Best Practices – will be held on Thursday, September 23.

As an instructor, his ability to connect real world business experience with the use of social media has made him a popular and in demand speaker at conventions and meetings throughout the nation. He has been recognized by Inman News as one of “Real Estate’s 50 Most Influential Online,” Roost’s “50 RE People to follow on Twitter,” and Swanepol’s “100 Most Interesting & Influential in Real Estate.”

FALL 2010 KENTUCKY REALTOR® 15

Political Update Join the REALTOR® Party and Vote With federal and state elections coming up in November, it’s important to know who is running for office, but equally important is knowing how the RPAC dollars you contribute assists to ensure a positive atmosphere for your real estate business and the clients you help every day. With the slew of changes being seen at all levels of government, now is the time to dig in your heels and understand your role in the political process. Your voice is powerful and as we as a country move into the future, it will be amplified if more and more REALTORS® can stand together as one. This is your charge to become more involved in your industry and to vote in the upcoming elections.

Why political involvement?

Since 1969, RPAC has been promoting the election of proREALTOR® candidates across the United States. During the last federal election cycle alone, RPAC contributed over $12 million to pro-REALTOR® candidates to Congress and in the last state election cycle over $76,000 to proREALTOR® candidates and political party committees in the Kentucky General Assembly.

Why has RPAC been successful?

In America, the exercise of good government has its foundation in the participation of its citizens in politics.

By definition of the work you do, REALTORS® are contributors to the American dream - home ownership.

REALTORS® make it possible for people to bring value to their communities, their lives, to schools and to the future.

Increasingly REALTORS® are facing forces from many directions that threaten their ability to help bring about the American dream for more people. Increasing health care premiums, the economy, property tax and sales tax burdens, rent controls, impact fees and the taking of private property for the public domain are only a quick handful of issues that somewhere, everyday REALTORS® confront.

If not you, who?

That is why it is vitally important that REALTORS® be politically active: to take on the responsibility of protecting the values and rights we hold dear. If not REALTORS®, then who? No one knows a community better than a REALTOR®. It would be difficult to believe that a local no-growth group would represent your real estate business interests, or that those employed by the local government know best how much and where to spend the tax dollar better than you do. REALTORS® are the experts on their communities. REALTORS® know the lay of the land, the families, the best schools, the neighborhoods, and the leaders. With REALTORS® in virtually every community in the nation, you are in a strong position to be on the front line as either a proponent or a defender.

Failure to be involved politically can and likely will result in someone else filling the vacuum left by you. That may sound okay at first; because we are sure someone else will do the job

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and see things as we do. That is until one discovers that the voices being heard may be contrary to wise business planning and a threat to property owners and their rights. If you as a REALTOR® do not speak out, get involved, and help shape your community, someone else will. It is a good bet that they won’t be supportive of your position.

On the state and national levels, we give money to those in the Kentucky General Assembly and U. S. Congress who both understand and support REALTOR® issues. We look to build the future by putting RPAC dollars in places that will help advance the interests of Real Estate professionals.

RPAC is the only political group in the country organized for REALTORS®, run by REALTORS® and exists solely to further issues important to REALTORS®.

Join the REALTOR ® Party and…

Support the REALTOR® Party goals and values and join with other REALTORS® around the country working together in the best interest of our industry and our customers. As a member of the REALTOR® Party make a pledge to:

VOTE for candidates at the local, state, and national levels who support the REALTOR® Party and make the right decisions for my profession and my customers.

ACT when called upon to support the REALTOR® Party at the local, state, and national level. I recognize the importance of REALTORS® speaking with one voice, therefore I will participate in Calls for Action, and if a broker, I will join the Broker Involvement Program.

INVEST in my business by giving to the REALTOR® Political Action Committee (RPAC), and help RPAC build the bipartisan relationships necessary at all levels of government to ensure a sound and dynamic real estate market.

Politicians are making decisions that affect your business everyday and this is why it’s important to vote in the upcoming elections.

The following federal and state candidates on the Kentucky ballot for 2010 are:

Federal and State Legislative Candidates: 2010 CANDIDATES FOR U.S. SENATE

32

Mike Wilson

Bowling Green

28

Charles Miller*

Louisville

72

Stephen West

Paris

NAME

CITY

32

Mike Reynolds*

Bowling Green

28

John Brewer

Louisville

73

Don Pasley*

Winchester

Rand Paul

Bowling Green

34

Jared Carpenter

Berea

29

Dustin Wilcher

Louisville

73

Donna Mayfield

Winchester

Jack Conway

Louisville

34

Lee Murphy*

Richmond

29

Kevin Bratcher*

Louisville

74

Richard Henderson*

Jeffersonville

CANDIDATES FOR U.S. HOUSE OF REPRESENTATIVES #

NAME

CITY

1

Ed Whitfield*

Hopkinsville

1

Charles Hatchett

Benton

2

Brett Guthrie*

Bowling Green

2

Ed Marksberry

Owensboro

3

Todd Lally

Louisville

3

John Yarmuth*

Louisville

4 4 5 5 6 6

Geoff Davis * John Waltz Hal Rogers * Jame Holbert Andy Barr Ben Chandler*

Ft. Mitchell Florence Somerset London Lexington Versailles

CANDIDATES FOR KENTUCKY SENATE

34

Donald Paul Van Winkle Berea

30

Tom Burch*

Louisville

74

Jeff Moore

Mt. Sterling

36

Julie Denton*

Louisville

30

Aaron Wilson

Louisville

76

Ruth Ann Palumbo*

Lexington

36

Rick Hiles

Louisville

32

Nellie D. Stallings

Louisville

76

Richard Marrs

Lexington

38

Dan Seum*

Louisville

32

Julie Raque Adams

Louisville

77

Jesse Crenshaw*

Lexington

38

Marty Meyer

Louisville

33

Kimberly Greewell

Louisville

77

David Darnell

Lexington

33

Ron Crimm*

Louisville

78

Thomas McKee*

Cynthiana

35

Jim Wayne*

Louisville

78

Timothy Fairfield

Berry

35

Michael P.W. Lewis

Louisville

81

Rita Smart

Richmond

CANDIDATES FOR KENTUCKY HOUSE OF REPRESENTATIVES #

NAME

CITY

36

Jerome Isaacs

Paint Lick

81

Tiffany Nash

Richmond

1

Mike Lawrence

Paducah

36

Lonnie Napier*

Lancaster

87

Rick Nelson*

Middlesboro

1

Steven Rudy*

West Paducah

37

Jeffery Donohue

Fairdale

87

Barry Carnes

Middlesboro

4

C. Lynn Belcher

Dycusburg

37

Wade Hurt

Louisville

91

Teddy Edmonds*

Jackson

4

Mike Cherry*

Princeton

38

Tim Firkins*

Louisville

91

Mike Bryant

Jackson

5

Melvin Henley*

Murray

38

Mike Nemes

Louisville

92

John Short

Hindman

5

Corey McBee

Murray

39

Robert Damron*

Nicholasville

92

Ruby E. Couch

Mallie

6

Will Coursey*

Symsonia

39

Peter Kerr

Wilmore

93

Keith Hall*

Phelps

6

Monti Collins

Benon

41

Tom Riner*

Louisville

93

Raul T. Urias II

Phyllis

#

NAME

CITY

10

Michael Duncan

Dawson Springs

41

Nathan Haney

Louisville

94

Leslie Combs*

Pikeville

2

Mike East

Kevil

10

F.L. “Ben” Waide

Madisonville

44

Jonie Jenkins*

Louisville

94

Roger Ford

Pikeville

2

Rex Smith

Paducah

11

David Watkins*

Henderson

44

Gail Powers

Louisville

95

Greg Stumbo*

Prestonsburg

2

Bob Leeper*

Paducah

11

Paul DeSpain

Henderson

45

Matthew Vanderpool

Lexington

95

James A. Williams

Banner

6

Jack Whitfield, Jr.

Madisonville

13

Jim Glenn*

Owensboro

45

Stan Lee*

Lexington

96

David Hayes

Grayson

6

Jerry Rhoads*

Madisonville

13

Ben Boarman

Owensboro

46

Larry Clark*

Louisville

96

Jill York*

Grayson

8

Joe Bowen

Owensboro

14

Tommy Thompson*

Owensboro

46

Brian Simpson

Louisville

97

Hubert Collins*

Wittensville

8

David Boswell*

Owensboro

14

Paul Estep

Owensboro

47

Rick Rand*

Bedford

97

Bill Mike Runyon

Paintsville

10

Elizabeth Tori*

Elizabethtown

16

Martha Jane King*

Lewisburg

47

Theodore Broecker

LaGrange

100

Kevin Sinnette*

Ashland

10

Dennis Parrett

Elizabethtown

16

Larry Noe

Russellville

49

Linda Belcher*

Shepherdsville

100

Cheryl Spriggs

Ashland

12

Alice Forgy Kerr*

Lexington

17

Les Russell

Big Clifty

49

Russell Webber

Shepherdsville

12

Don Blevins

Lexington

17

C.B. Embry, Jr.*

Morgantown

50

Eddie O’Daniel

Bloomfield

18

Jack Ditty

Flatwoods

19

Dottie Sims*

Horse Cave

50

David Floyd*

Bardstown

18

Robin Webb*

Grayson

19

Michael Meredith

Brownsville

55

Kent Stevens*

Lawrenceburg

20

Paul Hornback

Shelbyville

23

Johnny Bell*

Glasgow

55

Kim King

Harrodsburg

20

David Eaton

Shelbyville

23

Pam H. Browning

Glasgow

56

Carl Rollins*

Midway

Democrat

24

Katie Stine*

Southgate

24

Terry Mills*

Lebanon

56

Lyen Crews

Versailles

Republican

24

Julie Smith-Morrow

Newport

24

Leo Johnson

Liberty

57

Derrick Graham*

Frankfort

26

Ernie Harris*

Crestwood

25

Jimmie Lee*

Elizabethtown

57

Frank Haynes

Frankfort

26

John Black

LaGrange

25

Carl Lay

Elizabethtown

62

Charlie Hoffman*

Georgetown

28

Ralph Alvarado

Winchester

26

Allan Francis

Elizabethtown

62

Ryan Quarles

Georgetown

28

R.J. Palmer*

Winchester

26

Tim Moore*

Elizabethtown

67

Dennis Keene*

Wilder

30

Brandon Smith*

Hazard

27

Jeff Greer*

Brandenburg

67

Roger Thoney

Highland Heights

30

Johnnie Turner

Harlan

27

Dalton Jantzen

Payneville

72

Sannie Overly*

Paris

KEY

Independant District * incumbents

FALL 2010 KENTUCKY REALTOR® 17

Safety Tools Make Your Next Open House a Safe One Open houses can be a great sales tool – but hosting one also exposes you to numerous unfamiliar people for the first time. Take these steps to stay safe: If possible, always try to have at least one other person working with you at the open house.

Check your cell phone’s strength and signal prior to the open house.

Have emergency numbers programmed on speed dial.

Upon entering a house for the first time, check all rooms and determine several “escape” routes. Make sure all deadbolt locks are unlocked to facilitate a faster escape.

Make sure that if you were to escape by the back door, you could escape from the backyard. Frequently, high fences surround yards that contain swimming pools or hot tubs.

Place one of your business cards, with the date and time written on the back, in a kitchen cabinet. Note on it if you were the first to arrive or if clients were waiting.

Have all open house visitors sign in. Ask for full name, address, phone number and e-mail.

When showing the house, always walk behind the prospect. Direct them; don’t lead them. Say, for example, “The kitchen is on your left,” and gesture for them to go ahead of you.

Avoid attics, basements, and getting trapped in small rooms.

Notify someone in your office, your answering service, a friend or a relative that you will be calling in every hour on the hour. And if you don’t call, they are to call you.

Inform a neighbor that you will be showing the house and ask if he or she would keep an eye and ear open for anything out of the ordinary.

Don’t assume that everyone has left the premises at the end of an open house. Check all of the rooms and the backyard prior to locking the doors. Be prepared to defend yourself, if necessary.

(Sources: Washington Real Estate Safety Council; City of Mesa, Arizona; Nevada County Board of REALTORS“; Georgia Real Estate Commission)

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Use these other to help keep you out of trouble: Keep it light Show properties before dark. If you are going to be working after hours, advise your associate or first-line supervisor of your schedule. If you must show a property after dark, turn on all lights as you go through, and don’t lower any shades or draw curtains or blinds.

Hide personal information Tell your sellers: DON’T leave personal information like mail or bills out in the open where anyone can see it. Be sure to lock down your computer and lock up your laptop and any other expensive, easy-to-pocket electronics, like iPods, before your showing.

Agree on an office distress code Create a voice distress code, a secret word or phrase that is not commonly used but can be worked into any conversation for cases where you feel that you are in danger. Use this if the person you are with can overhear the conversation, but you don’t want to alarm them. Example: “Hi, this is Jennifer. I’m with Mr. Henderson at the Elm Street listing. Could you e-mail me the RED FILE?”

Got cell service, everywhere?

When you’re showing commercial property, thick walls and/or remote locations may interfere with mobile phone reception. Check in advance to be sure your phone is serviceable in the area in which you are showing the property.

Carry less If you carry a purse, lock it in your car trunk before arriving at an appointment.

Carry only non-valuable business items (except for your cell phone), and do not wear expensive jewelry or watches, or appear to be carrying large sums of money.

Visit NAR’s REALTOR® Safety website at www.REALTOR.org/Safety

Education GRI schedule

KREEF’s Online CE Courses

GRI courses are approved for CE credit (check below and the website for details) and other NAR designation courses may be applied toward the GRI designation. The 2010 classes are guaranteed not to be cancelled.

Three to choose from and they can be taken anytime and anywhere – 24/7. All that is needed is a computer and internet access.

Register now - visit www.kreef.org > Online Education.

Visit www.kreef.org > GRI for more benefits on obtaining this professional designation. Also on the website, you can get the schedule, pricing and other important information.

2010 GRI Schedule Early-bird price: $99 for GRI 1-5 and $49 for GRI electives (up to two weeks prior to course date) GRI 3 (3 hrs elective CE) Sept. 9-10 - Florence

Environmental Issues in Real Estate 6 hours (3 hours law credit & 3 hours elective credit) Cost: $50 Real Estate Finance Today 3 hours (3 hours elective credit) Cost: $30 Fair Housing 3 hours (3 hours law credit) Cost: $30

Courses CRS 111 – Short Sales & Foreclosures September 21

GRI 5 (3 hrs elective CE) Oct. 13-14 - Owensboro GRI 4 (3 hrs law CE and 3 hrs elective CE) Nov. 8-9 - Ivel Elective: RE Investments (3 hrs elective CE) Nov. 11 - Ashland

CRS 200 – Business Planning & Marketing October 7 & 8 Visit www.kreef.org > CRS for more details including course descriptions, locations and pricing.

Pre-licensing Classroom Schedule

Eastern KY - GRI 1, 2 and 3

KREEF offers the 96 hour pre-license course with a mix of online and classroom hours – 60 online and 36 classroom.

Registration must be made prior to beginning the classroom hours, however, the online hours can be started and finished prior to, during or after the classroom portion. Find out more at www.kreef.org > Pre-licensing. Below are the dates and locations for the classroom hours:

Western KY - GRI 1, 2 and 3

Lexington, KY – Oct. 2-3, 9-10, 16-17

Central KY - GRI 4, 5 and Electives

Florence, KY – Oct. 9-10, 16-17, 23-24

Elective: Sales Contracts (6 hrs law CE) Nov. 12 - Ashland

Look for the following GRI courses in your area in 2011

NEW LOCATION! Louisville, KY – Oct. 23-24, 30-31, Nov. 6-7

CORE Courses The Kentucky Real Estate Commission (KREC) requires all licensees to complete a CORE course once every four years. The CORE course also counts toward all 6 hours of the mandatory education required annually by the Commission. This course is offered at $50 for online registration or $55 by paper/fax or at the door.

Oct. 6 – Murray Oct. 21 – Prestonsburg Oct. 28 – Owensboro (Broker CORE)

Nov. 3 – Florence Nov. 17 – Henderson Dec. 17 – Lexington Dec. 22 - Louisville

KREEF’s Course Cancellation Policy If a student cancels his/her registration 3 or more business days before class, no cancellation fee will be applied, and a full refund will be granted.

If a student cancels his/her registration less than 3 days before class through the day of the class, a refund will be given minus a cancellation fee. Cancellation fees apply as follows: $5 per CE course, $10 per CORE course or GRI elective and $25 per GRI course 1-5.

Cancellation fees for other designation/specialty courses will be assessed on an individual basis. It is the responsibility of the student to notify KREEF, in writing, of the cancellation.

If a student is a “no show” on the day of class and does not provide written notification to KREEF, he/she will not be eligible for any refund.

FALL 2010 KENTUCKY REALTOR® 19

Industry Issues Are You S.A.F.E?

Owner Financing and Private Financing Significantly Impacted by the S.A.F.E. Act.

By Harry Borders

On July 30, 2008 the Federal S.A.F.E. Act (Secure and Fair Enforcement for Mortgage Licensing Act of 2008) was signed into law. The federal S.A.F.E. Act is a law that gave the states one year to enact their own legislation for the licensing of residential loan officers, including private lenders and sellers willing to give a “mortgage loan” (i.e. carry the financing for the buyer, including contracts for deed). On June 25, 2009, Kentucky enacted our version of the S.A.F.E. Act.

Congress’ concern when enacting this legislation was that even if states identified a “bad actor” mortgage broker, he or she could just pull up stakes and move to another state.

Congress observed that, without a national registration system, the states found it difficult to track such bad actors and put them out of business permanently.

The S.A.F.E. Act only applies to “residential” properties (defined by the Truth in Lending Act as up to and including a 4-plex, therefore, anything larger than a 4-plex does not apply). The thinking was that most residential purchasers (unlike commercial purchasers) are not “professional” buyers and therefore, they need protection against bad loans, whereas “professional” buyers were savvy enough to protect themselves from bad loans and therefore don’t need protection.

There are a few very strict exceptions to Kentucky’s S.A.F.E. Act. Unfortunately, there is no exception for “professional” buyers if they are buying “residential” properties under the Kentucky S.A.F.E. Act. Therefore, these “professional” buyers (i.e. real estate investors) also are unable to buy with owner financing or private financing unless the owner or private lender is either exempt from the rules or is a licensed loan officer. It appears that Congress intended to exempt “professional” buyers from the Act, however, when HUD wrote the Model Act (designed to give states guidance on how to draft their version of the law) which was subsequently adopted by most states, this exemption was not included in the Model Act, and thus it was not included in Kentucky’s version.

The S.A.F.E. Act requires the establishment of a national tracking system, and requires states to adopt statutes meeting certain minimum standards for registration, for

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continuing education, for criminal background checks and the like. Under the S.A.F.E. Act, all states must implement licensing systems that require Mortgage Loan Originators (including private lenders and sellers willing to carry financing) to: Provide fingerprints for an FBI criminal history background check; Provide authorization for Nationwide Mortgage Licensing System and Registry (NMLS&R) to obtain a credit report; Input and maintain their personal Mortgage Loan Originator record in NMLS&R as their license in each state in which they wish to conduct loan origination activity; Pass a national mortgage test; Take 20 hours of pre-licensure education courses approved by NMLS&R. The Act allows for fines of between $1,000 and $25,000 for violations.

There are a few very strict exceptions to Kentucky’s S.A.F.E. Act. The exceptions are as follows:

1

A natural person (i.e. a real human being, not an LLC or Land Trust) may make a residential loan to an immediate family member (i.e. spouse, child, sibling, parent, grandparent, grandchild). However, the person cannot be compensated by a mortgage loan officer, broker or originator.

2

A seller who is a natural person may originate a mortgage loan secured by a dwelling that served as the natural person’s residence. However, the seller cannot be compensated in connection with that transaction by a mortgage loan company, mortgage loan broker, or other mortgage loan originator, or by an agent of such company, broker, or other originator.

Therefore, if the seller is selling his/her residence, the transaction will be exempt from the S.A.F.E. Act. However, the exemption is very narrow – it clearly states that the dwelling must be the person’s residence. Consequently, there is not an exemption for a person financing the sale of a property that is not his/her residence. Therefore, investors or builders may not carry the financing on the sale of any of their residential real estate, provided it is not the investor or builder’s primary residence of the buyer is not immediate family.

Technically, there are other exceptions, but frankly, these exceptions are not very helpful. One such exception is for “Other natural persons making mortgage loans from their own funds for investment without intent to resell.”

However, the statute still requires these individuals to be licensed with the Kentucky Department of Financial Institutions (“DFI”). Therefore, they still must register with DFI, have 20 hours of pre-licensing education, pay the fees, etc. Realistically, this will prevent most investors and builders from being able to carry financing on their sales.

The Act allows for fines of between $1,000 and $25,000 for violations.

The intent of the law has merit. Unfortunately, the law was drafted so narrowly that it now prevents most owner financing or private financing on residential properties, despite the fact that this type of financing is not what the law was targeting.

There is a push both on the state level and on the federal level to change this law. However, in the meantime, it is important that REALTORS® are aware of the law and its implications to your business.

KAR will be holding two courses on this subject at the upcoming KAR Convention & Expo in French Lick, Indiana to educate REALTORS® and provide more clarification on the issues you could be facing with the S.A.F.E. Act.

This information is provided to you by Harry Borders, a residential real estate attorney with Borders & Borders Attorneys in Louisville, Kentucky.

The previous discussion should not be viewed as legal advice.

Please consult your attorney.

The other exception is the “attorney” exception. While there is an attorney exception, this merely exempts attorneys from having to be licensed. It does NOT allow attorneys to negotiate loans with otherwise non-exempt lenders. Therefore, this exemption also has very little benefit to investors, builders and REALTORS®.

Unfortunately, HUD has not issued its regulations regarding the S.A.F.E. Act, and therefore, we do not know the answers to many questions (such as “did I have to occupy the house immediately before closing? What if I moved out 3 months ago, do I still qualify?”). HUD is not expected to issue the regulations until possibly July of 2011.

FALL 2010 KENTUCKY REALTOR® 21

Local Association News 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.

Northern Kentucky Association

Henderson Audubon Board

NKAR held their 7th Annual Golf Outing this summer at Twin Oaks & Plantation Club in Covington, Kentucky.

The NKAR Affiliate Council orchestrates this event every year and they select a charity to receive the proceeds.

The Henderson Audubon Board of REALTORS® moved to a new location and celebrated with a “Cookies and Tea Open House” in July. It was a wonderful opportunity for REALTORS® and affiliates to have pleasant, light hearted conversations about the past and looking into the future under their new roof. The new address is 230 Second Street, Suite 310, Henderson, Kentucky.

When a longtime NKAR member approached the Council to consider her request, they couldn’t refuse. Ruth Voorhees, from Huff Realty, told them all about her special grandson, Jonathan, who had undergone a liver transplant at the age of 8 months old.

The Affiliate Council presented a check for $6,317 to the Children’s Organ Transplant Association (COTA) for the Jonathan V Fund. Ruth Voorhees, her son William Voorhees and Jonathan were present to accept the check. Jonathan was the “star” of the day!!!

As Jonathan’s family states, “Jonathan is a little miracle. We have learned that miracles happen all around us all the time. It is our heartfelt belief that sharing Jonathan’s journey can bring light to the importance of organ donation, and hopefully make miracles happen for others who are facing this rough road.”

For more on Jonathan and the Children’s Organ Transplant Association (COTA) visit www.cotaforjonathanv.com.

Bowling Green Predicted to See Growth The Bowling Green metro area was projected to have the largest percentage of housing growth in Kentucky over the next four years by Bloomberg Businessweek.

The information was compiled in “America’s Strongest Housing Markets in 2014” by taking into consideration such factors as employment, foreclosure rates, income growth, demographic trends and construction costs.

Moody’s and Fiserv estimated that by 2014, U.S. home prices will be 7.2 percent above 2010 levels and here’s what was estimated for Bowling Green: Forecast 4-year price increase: 9.2 percent Current median price: $103,840 Prices to reach trough in: 2010 Q2 Median family income: $53,900 Population: 120,600 Through 2014, the Bowling Green area has the largest growth forecast, 9.2 percent, in Kentucky. Fiserv and Moody’s Economy.com estimate that from their peak (in the second quarter of 2009) to their trough (second quarter, 2010), home prices in the area dropped only 2.4 percent. The metro, hit by layoffs in the auto industry, had an unemployment rate of 11.1 percent in January, which fell to 9.2 percent by June.

Greater Louisville Association GLAR recently introduced a social media webinar that is designed to help REALTORS® better utilize social media pages for their business. The webinar includes best practices as well as clever ways that other businesses have used social media successfully within their business. A continuation of webinars on this topic is planned to create an easy to use social media online library for GLAR members to take the guess work out of social media.

Madison County Board Each year, the MC Board provides some fun to the Special Olympics, held at the EKU Richmond Campus. Members of the board assemble humorous photo boards and take photos of the athletes posing with them. The athletes love the pictures judging by the comments received and many say they look forward to the booth every year. As a gift, the Board prints the photos at the booth and the Richmond Kiwanis Club helps the athletes make cute picture frames.

22 www.kar.com

Louisville Good for Working Mothers For the second year running, ForbesWoman published its list of the U.S. cities that offer the most to working moms.

The list looks at the 50 largest metropolitan statistical areas (MSAs) in the U.S. and uses obvious factors such as safety, schools and health care but also categorizes job opportunities, high earnings potential, cost of living, employment rates and women’s average weekly earnings.

On the overall list, Louisville ranked 38th but came in on the top of the list in the cost of living category.

Owensboro Ranks as “Best Place to Live” The recent CNNMoney list of America’s Best Small Cities listed Owensboro a “Best Place to Live.” Ranked 93rd and the only Kentucky city on the list in the top 100, Owensboro was listed with the following remarks: This town along the banks of the Ohio River spawned actors Johnny Depp and Florence Henderson (a.k.a.

Carol Brady). But its biggest claim to fame is a perfect complement to a state known for bourbon and bluegrass: Barbecue. Owensboro calls itself the “Bar-B-Q Capital of the World,” holding a citywide festival and competition each year. Additionally, there’s “Friday after 5,” a free weekly series of outdoor concerts on the city’s downtown riverfront, which draws thousands of people each summer.

Covington Named as One of the “10 Least-Expensive Cities for Living” Covington was ranked 8th on the list by Kiplinger, publisher of business forecasts and personal finance advice. Rankings, for all U.S. cities with metropolitan area populations of at least 75,000, were compiled based on the ACCRA Cost of Living Index produced by the Council for Community and Economic Research.

The Index measures relative price levels for housing, utilities, transportation, grocery items, health care and miscellaneous goods and services (it does not include taxes). Median household income and average home prices are from the Toronto-based Martin Prosperity Institute.

Here are the stats indicated by the publication: Covington, Ky. Cost of Living Index: 87.4 Metro Population (including Cincinnati): 2,138, 528 Median Household Income: $51,926 Average Home Price: $238,675 Although Covington is just across the Ohio River from Cincinnati, the cost of living in this Northern Kentucky city is lower than in its big-city neighbor. Low housing, utility and transportation costs make Covington more affordable.

Another Kentucky city, Louisville, ranked in the top 10 at number 9.

Louisville Ranked as One of America’s Top Underrated Cities Online travel site, ShermansTravel, ranked its top 10 overrated U.S. cities and Louisville was on the list at number 5. The site said the cities on the list are overlooked and underrated and are ready to emerge from the shadows into the limelight. These are American cities that just don’t get their fair share of the spotlight. Here’s what was said about Louisville: The Kentucky Derby may be its claim to fame, but the famous horse race isn’t all Louisville has to offer. Nestled on the banks of the Ohio River, this Southern underrated city has loads of small-town charm, a cosmopolitan riverfront district, a diverse art scene – thanks to the Kentucky Center for the Arts and a growing foodie market with its own Restaurant Row. Sports lovers should make a stop at the Louisville Slugger Museum, while history lovers can sip mint juleps on a river cruise aboard the Belle of Louisville, a National Historic Landmark.

Lexington is “Editor’s Pick” in Business Facilities Magazine The latest issue of Business Facilities magazine picked Lexington as an “Editors’ Location Pick,” one of only seven cities out of roughly 250 MSAs that were covered. The locations selected “are not waiting for lagging economic indicators to steady their upward climb before putting down their investment markers; they have boldly chosen to doubledown on the future.” Here is what the magazine said: When we think of Lexington, KY, we usually conjure up fond memories of an idyllic location in the heart of the Bluegrass State. We picture majestic thoroughbreds serenely stepping their way through lush blue-green pastures, memories accompanied by a few sips of the world’s smoothest bourbon. These bucolic images are now accompanied by a dramatic update: Lexington is no horse-and-buggy town. In fact, it is rapidly emerging as Kentucky’s high-tech hub. Hardly a week goes by without another ribbon-slicing at a cutting edge facility.

Wilson Presented with Mayoral Award for Service Gay Wilson, Association Executive for HopkinsvilleChristian County Board, received the “Mayor’s Make Your Mark” Award.

The award was presented to Ms. Wilson at the Annual Chamber of Commerce Dinner in June for serving on the HopkinsvilleChristian County Chamber of Commerce Community Vision Plan, and for her work on the 2010 Mayor’s Housing Conference, which received a $5,000 Housing Opportunity Grant from NAR. The award, presented

by Mayor Dan Kemp, states that it is for “outstanding leadership in the area of quality of place and residential development.” Ms. Wilson has been serving on this committee for the last five years. The committee has the following five objectives: • Increase local support for the revitalization of Downtown Hopkinsville • Maintain and enhance efforts to provide quality housing in Hopkinsville-Christian County • Seek and foster retail development that will meet local demand in Hopkinsville-Christian County • Enhance arts, culture and recreation amenities in Hopkinsville-Christian County • Effectively implement key community aesthetic and public safety improvement efforts

FALL 2010 KENTUCKY REALTOR® 23

By The Numbers

93% versus 86%

In a January 2010 survey, the Center for REALTOR® Technology (CRT) noted 93% of respondents indicated that they were 40 years old or younger and use a smartphone to conduct real estate business. 86% of respondents older than 40 use a smartphone. Other highlights of the survey revealed the top 3 smartphone brands used by respondents were Blackberry (41.2%), iPhone 3G (14.1%), Palm (14.0%) and iPhone 3GS (11.9%). The top 3 reasons why respondents were motivated to choose their current smartphone were best device for email (45.9%), ease of use (26.2%) and the ability to use a keyboard (23.7%). The top 5 features used most by respondents on their smartphones were telephone (91.2%), email (88.4%), SMS/texting (73.8%), calendar (52.6%) and web browser (42.3%).

A recent Coldwell Banker survey showed this percent of single buyers chose suburban homes over urban locations in April 2010.

% 52

HUD’s 2009 American Housing Survey (AHS) reveals the median age of the American home is 36 years, 68 percent of U.S. homes are owner-occupied and the median size of an occupied home is 1,800 square feet.

Interestingly, only a third of American homes have a working carbon monoxide detector.

90percent

The percent of Americans who don’t regret buying their current home, according to a survey for Bankrate.com. Among the small percent who do regret the purchase, most say they are unhappy they can’t sell their home and move elsewhere or they can’t afford their monthly mortgage.

8%

Homeowners have become savvier when it comes to their mortgages: only eight percent of homeowners don’t know whether they have a fixed-rate or adjustablerate loan, or something more exotic, according to a survey for Bankrate. Two years ago, 26 percent of borrowers couldn’t identify their mortgage type.

24 www.kar.com

48

According to Arbitron/Edison Research, the percent of Americans who have a profile on a social networking site today, a figure that has doubled since 2008.

66.9%

%

According to the latest figures from the Census Bureau on homeownership rates, U.S. homeownership rate dropped to this percent during the second quarter of this year, the lowest mark in more than 10 years, from a peak of 69.4% in 2004. Fresh projections say the rate could plummet to about 62% as early as 2012 and almost certainly by the end of the decade.

Homeownership rates haven’t been that low since they hit 61.9% in 1960.

85.6 percent

The Census Bureau also reports this percent of the housing units in the United States in the second quarter were occupied. Owneroccupied homes made up 57.3 percent of total housing units, while renter-occupied units made up 28.3 percent of the inventory.

803

Overall satisfaction among home buyers averages 803 on a 1,000point scale in 2010 – increasing by 12 points from 2009. According to the J.D. Power and Associates 2010 Home Buyer/Seller Study, this improvement is primarily driven by increased satisfaction with agents and salespersons. In contrast, overall satisfaction among home sellers has declined by 40 points from 2009 and averages 742 in 2010. Among home sellers, satisfaction has decreased in all four areas measured, with the largest declines observed in marketing of the home and the variety of additional services offered.

25%

Nielsen research says Americans spend nearly a quarter of the time they’re on the Internet from their PC, or about six hours a month, on social-networking sites and blogs. The new research also reveals U.S. consumers spend the plurality of their time online, or 36% of it, communicating and networking across social networks, blogs, personal e-mail and instant messaging. In addition, the research shows that twice as many Americans over 50 visited social networks than kids under 18.

Housing Stats Tax Credit Closing Deadline Extended Thanks to an extension on the closing deadline for the federal home buyer tax credit, many buyers in Kentucky will now be able to receive the benefits from this program. According to NAR, there would have been 2,540 Kentucky home sales delayed past the June 30 cut-off for closing through no fault of their own if an extension wasn’t put into place. In total, the estimate was up to 180,000 total delayed sales. Buyers who had a contract in place by April 30, 2010 will now have the opportunity to be closed by the pushed back deadline of September 30, 2010.

The bright side of the tax credit is that Kentucky home sales for the second quarter were given a much appreciated boost. For the period, total sales were up over 28% for 2010 compared to the same time in 2009. Looking at each month, April saw an increase of over 34%, May increased over 38% and June over 14%. Prices for homes remained relatively flat for the quarter with a decrease of less than half a percent to a median of $111,000.

“According to a recent report from Bankrate, 90 percent of people in the U.S. don’t regret buying their current home,” said John Smither, 2010 KAR president. “Our hope is this statistic holds up throughout the rest of the year and folks in Kentucky continue to see how affordable the cost of living is in our state.”

And interest rates should be enticing to those who are looking to make the home buying decision.

Many economists and others within the real estate ranks predicted that the end of the tax credit would bring about a tremendous uptick in interest rates.

Coincidentally, the opposite effect has taken place as rates are close to the lowest ever on record.

“The federal government announced some time ago they would cease buying mortgage backed securities,” stated Smither. “That, along with the end of the tax credit, had the real estate industry on its heels as to what the future holds. We still don’t have a crystal ball, but with the interest rates remaining at historical lows, my hope is that buyers, especially in Kentucky, see housing as a good investment.”

Nationally, reports show existing-home sales down 27 percent in July, however, projections had already been anticipating a sharp decline for the period immediately following expiration of the home buyer tax credit. For Kentucky, it’s left to be seen what will happen in the fourth quarter. If job creation picks up and the housing environment - interest rates and housing affordability – stays put, the pace of a sales recovery could pick up quickly noted Lawrence Yun, NAR chief economist.

2ND QUARTER 2010 VS. 2ND QUARTER 2009 BOARD/ASSOCIATION

SOLD SOLD SOLD MEDIAN MEDIAN MEDIAN 2010 2009 % PRICE 2010 PRICE 2009 %

REGION ONE Henderson-Audubon Board of REALTORS®

92

73

26.03%

95000

74250

27.95%

Hopkinsville-Christian Board of REALTORS®

104

104

0.00%

108000

114920

-6.02%

Kentucky-Barkley Lakes Board of REALTORS®

77

84

-8.33%

89000

98000

-9.18%

Madisonville-Hopkins Board of REALTORS®

109

121

-9.92%

94950

96500

-1.61%

®

Mayfield-Graves Board of REALTORS

73

54

35.19%

68000

67500

0.74%

Murray Calloway County Board of REALTORS®

80

94

-14.89%

118000

112500

-2.00%

Owensboro Board of REALTORS®

314

265

18.49%

95750

111450

-14.09%

®

Paducah Board of REALTORS

189

166

13.86%

120000

119900

0.08%

Pennyrile Board of REALTORS®

111

86

29.07%

87750

89300

-1.74%

REGION TWO Central Kentucky Association of REALTORS®

151

130

16.15%

98000

90250

8.59%

Heart of Kentucky Association of REALTORS®

724

405

78.77%

149500

128750

16.12%

Old Kentucky Home Board of REALTORS®

134

114

17.54%

122000

144150

-15.37%

®

REALTOR Association of Southern Kentucky

503

355

41.69%

119500

125750

-4.97%

Russellville-Logan Board of REALTORS®

42

17

147.06%

76950

86500

-11.04%

Shelbyville Board of REALTORS®

128

South Central Kentucky Association of REALTORS® 86

100

28.00%

142500

136500

4.40%

61

40.98%

106250

87500

21.43%

129000

6.98%

138000

3.55%

125000

1.06%

REGION THREE Greater Louisville Association of REALTORS®

3930

2882 36.36%

138000

REGION FOUR Lexington Bluegrass Association of REALTORS®

2528

2067 22.30%

142900

REGION FIVE Northern Kentucky Association of REALTORS®

1536

1280 20.00%

126325

REGION SIX Ashland Area Board of REALTORS®

198

169

17.16%

91000

94500

-3.70%

Cave Run Association of REALTORS®

58

42

38.10%

102000

115000

-11.30%

Cumberland Valley Board of REALTORS®

156

123

26.83%

113500

106250

6.82%

®

Madison County Board of REALTORS

311

249

24.90%

129050

124200

3.90%

Pioneer Trace Board of REALTORS®

57

42

35.71%

116000

70000

65.71%

169

8.28%

111000

100000

11.00%

111000

111450

-0.40%

Somerset-Lake Cumberland Board of REALTORS® 183 TOTAL

11874 9252 28.34%

* Statistics are unavailable for the following local associations: Cynthiana-Harrison Co., Dix River, & Eastern KY Based on information from local REALTOR® associations/MLSs for the periods of April 1 – June 30, 2009 and 2010

Note: for U.S. service members, the homebuyer tax credit deadline is extended through April 2011. According to the IRS, members of the uniformed services, Foreign Service and employees of the intelligence community serving outside the United States are eligible for this special rule.

To see housing statistics from 2006 to present, visit www.kar.com>Media Center>Housing Statistics FALL 2010 KENTUCKY REALTOR® 25

Community Profile The Kentucky Horse Park: Jewel of the Horse Capital of the World Home of the 2010 Alltech FEI World Equestrian Games

By Cindy Rullman, Kentucky Horse Park

The trilling of a Meadow Lark floats along a warm breeze as it gently fans a field dotted with grazing horses. Relaxed and content, the horses are enjoying a well-deserved day off from their jobs at the Kentucky Horse Park where they serve as equine ambassadors for nearly one million tourists each year. They are part of a much larger herd representing more than 40 different breeds who are full or part-time residents of the park.

John Nicholson, executive director of the park observed, “Our horses are the heart and soul of Kentucky. Horses, and in particular Thoroughbreds, are responsible for putting Kentucky on the international map and they have kept us there for nearly two centuries. For true Kentuckians, horses are as essential to our way of life as eating and breathing.

“The reason I say ‘true Kentuckians’ is that while Kentucky lays claim to the title ‘Horse Capital of the World’ we can’t claim a monopoly on the innate love of horses. Anyone whose soul is nourished by the sight, sound, smell and feel of a horse is part of our extended Kentucky family - a kindred spirit. And now our family has been increased by several hundred thousand people who have followed our mutual passion for horses to the Kentucky Horse Park for the Alltech FEI World Equestrian Games.”

The Alltech FEI World Equestrian Games are the world championships for eight equine sports and will be held at the Kentucky Horse Park September 26-October 10.

Until this year, the ultra-prestigious games had never been held outside of Europe. This will be a once-in-alifetime opportunity for Americans to see the world’s best equestrian athletes go for the gold, right here in their own backyard. They games were awarded to Kentucky, and specifically the Kentucky Horse Park because it is undisputedly the finest equestrian facility in the world.

For more than three decades the Kentucky Horse Park has existed to celebrate the long, complex and vital relationship between man and horse. Like that relationship, the park itself is a living, breathing, evolving entity that is ever changing.

It is part working horse farm, part tourist attraction, part equine office park and part equine competition facility – an altogether happy clash of the bucolic and the urbane, where every field and building is dedicated to – and filled with – horses and the people who are devoted to them.

26 www.kar.com

Photo: Courtesy of the Kentucky Horse Park

The purpose of the park is to celebrate man’s relationship with the horse, and it is intrinsic to everything done here, from special equine presentations to horse shows, museums, campground and more than 30 equine organizations comprising the National Horse Center.

Everything honors horses and the special bond that exists between horse and human.

The Kentucky Horse Park is a working 1,200acre horse farm, educational theme park and equine competition facility which welcomes approximately 900,000 visitors and 15,000 competition horses each year to the heart of Kentucky’s famous Bluegrass Region.

Nowhere else in the world is it possible for tourists to see so many different breeds of horses in one place, including Kentucky’s signature asset, the Thoroughbred.

Several outstanding representatives of that breed are permanent residents of the park’s Hall of Champions - a “must see” destination for most visitors. Celebrity Thoroughbreds such as Kentucky Derby winner Funny Cide as well as Cigar, a two-time Horse of the Year who was Thoroughbred racing’s leading money-earner when he retired with nearly $10 million in earnings, are on hand each day to welcome their fans. They are joined by the sensational two-time Breeders’ Cup winner Da Hoss. In the same barn visitors can meet a five-time World Grand Champion American Saddlebred, Ch Gypsy Supreme, and three Standardbred champions: Staying Together, Western Dreemer and Mr. Muscleman. Rounding out the line-up is an American Quarter Horse champion Be A Bono.

One of the park’s many features is the International Museum of the Horse, a Smithsonian Affiliate, which offers a visual record of the history of man’s relationship with the horse through the centuries. In addition to the unparalleled permanent collection of equine artifacts, the museum is currently hosting a world exclusive, international blockbuster exhibition called “A Gift from the Desert: The Art, History and Culture of the Arabian Horse,” which is one of the most important cultural events in the country this year. It is the first major exhibition in the world to explore the impact of the horse on Near Eastern civilization. Approximately 400 artifacts and works of art are on display from lenders around the world including the British Museum, Metropolitan Museum of Art and the Kingdom of Saudi Arabia.

The recent opening of a new $10-million wing of the International Museum of the Horse is also dedicated solely to the Arabian horse and its vast and rich history.

Nearby, the American Saddlebred Museum also recently opened a new multi-million dollar wing called The Showplace for Saddlebreds.

horse shows of any size or type year-round, from small, rarebreed shows with as few as 100 horses, to Hunter Jumper shows in which nearly 2,000 horses compete.

The horses, land, programs, facilities and competitions are all wrapped up in a very pretty package of great ambiance and tied with a ribbon of Southern hospitality. As the “jewel” of the Horse Capital of the World, the Kentucky Horse Park is sure to please every visitor.

John Nicholson concluded, “For more than 30 years, we have been enormously blessed to be the stewards of a beautiful piece of land, truly fine horses, and excellent facilities. To date, the Alltech FEI World Equestrian Games have been the pinnacle of our success, but the next 30 years for the park are shaping up to be even better. We cherish what we have here at the Kentucky Horse Park and we take great pleasure in sharing it with the world.”

The highlight for most visitors is interacting with the real thing, the horses themselves. Touching a velvety nose, feeling a horse’s warm breath on an arm, listening to the low, soft sound of a mare nickering to her foal, and watching stupendous athletes competing in the park’s world-class competition facilities are all experiences that create indelible memories.

A perennial favorite with visitors, the daily Parade of Breeds show, features a number of horses and riders representing a variety of breeds, all dressed in native tack and costume.

This show offers park visitors a chance to see and compare familiar and rare breeds of horses from around the world and learn about their historic and contemporary uses.

In addition, dozens of horse shows take place each year, featuring a variety of equine breeds and disciplines. Some of the best horses and their riders come to the park from around the world to compete in these shows, including numerous Olympic athletes. The park’s new Outdoor Stadium and Indoor Arena have made the park the greatest equestrian competition venue in the world, and allow the park to host

Photo: Courtesy of Jennifer Munson

There are a number of changes underway at the Kentucky Horse Park as it prepares for the 2010 Alltech FEI World Equestrian Games, starting September 25th. These permanent additions and upgrades will benefit the Kentucky Horse Park before and long after the 2010 Games. These major changes include: X Construction of a climate-controlled, 6,000 seat Indoor Arena. Completed in July 2009.

X Construction of a new 7,500 seat Outdoor Stadium. Completed in March 2009.

X Construction of a new vehicle entrance.

X Upgrades to roads, pathways and visitor gathering points throughout the Park.

Photo: Courtesy of Jennifer Munson

FALL 2010 KENTUCKY REALTOR® 27

From the Helm

More than bows and curtsies Queen Elizabeth II addressed the United Nations in New York in July 2010. She last addressed the United Nations in 1957. Queen Elizabeth II has had 53 years to reflect back to her first visit to New York and her United Nations address. Her first visit was when the United Nations was a relatively new organization, in existence for only 12 years at that time, and she spoke about the purpose of the United Nations:

“This Assembly was born of the endeavors of countless men and women from different nations who, over the centuries, have pursued the aims of the preservation of peace between nations, equality of justice for all before the law and the right of the peoples of the world to live their lives in freedom and security.” She added: “The Charter of the United Nations was framed with a view to giving expression to these great purposes and so forming a fitting memorial to the men and women whose toil and sacrifices turned those ideas into articles of faith for the nations of today.”

Then, Queen Elizabeth continued with this statement:

“Common ideals and hopes, not formal bonds, unite the members of the Commonwealth and promote that association between them which, in my belief, has contributed significantly to the cause of human freedom.”

With a few minor changes, that statement can be applied to Associations, specifically the REALTOR® Association.

Here’s an alteration:

“Common ideals and hopes, not formal bonds, unite the members of the Kentucky Association of REALTORS® and promote that association between members, which, in my belief, has contributed significantly to the cause of individuals’ rights to own homes, businesses, real estate and engage in the free enterprise system.”

28 www.kar.com

Fast forward through the next 53 years. Queen Elizabeth has reigned through triumphs and tribulations as the hereditary monarch leader. Through those times, Queen Elizabeth’s leadership must have been judiciously exercised by her most unique position. And yet, 53 years later, she reflects on leadership in a universal approach.

“It has perhaps always been the case that the waging of peace is the hardest form of leadership of all,” she said. Although it was spoken in an address to the United Nations, could again be applied to associations.

“I know of no single formula for success, but over the years I have observed that some attributes of leadership are universal, and are often about finding ways of encouraging people to combine their efforts, their talents, their insights, their enthusiasm and their inspiration, to work together.”

Those words also apply to REALTOR® Associations.

No changes are necessary.

Queen Elizabeth: Stalwart.

Dignified. Graceful. Great Hats.

Deserving of bows and curtsies.

Susan W. Helm is the Executive Vice President of the Kentucky Association of REALTORS®

Code of Ethics

z i u Q a

A “mock” arbitration hearing was held during the 2010 training sessions. Many potential hearing panelists appreciated the opportunity to receive additional guidance on the policies and procedures that govern an arbitration hearing.

Take this quiz and see how much you know about the arbitration process!

1. A seller-client can compel arbitration A. with a cooperating (“selling”) broker B. with the buyer C. any time subsequent to the closing D. if there is a contractual agreement with the listing broker

2. The grievance committee’s role in arbitration is to A. determine arbitrability B. determine whether arbitration is mandatory or voluntary C. determine if the appropriate parties are named D. all of the above

3. Subpoenas can be issued by hearing panels to compel witnesses to testify A. in some ethics hearings B. in some arbitration hearings C. by the grievance committee D. only on matters considered by the board of directors

4. Mediation is a voluntary dispute resolving process which should be initiated before a request for arbitration is reviewed by the grievance committee.

A. true B. false C. unable to answer given the information provided D. only if the board has adopted a policy to this effect

5. For procuring cause purposes, a “successful transaction” is defined as A. the party paid the cooperating broker’s portion of a commission B. as a sale that closes or a lease that is executed C. one in which no parties or REALTORS® are sued D. when the seller accepts the buyer’s offer to purchase

6. A commission dispute between two REALTOR® salespeople affiliated with the same company A. must be arbitrated by the local association B. must join the REALTOR® principal C. may be arbitrated if the salespeople are still affiliated with the same company at the time of the hearing D. can relate to advertising expenses

7. Arbitration requests A. must be filed prior to closing of the underlying transaction B. must be filed within 180 days after the closing, regardless of when the complainant learned of the dispute C. may specify the dollar amount in dispute D. must be dated and signed by the complainant

8. Members of a hearing panel A. cannot question a witness before the opposing party has questioned the witness B. may discuss the case with any party subsequent to the hearing C. cannot recess a hearing for more than one hour D. may not absent themselves from the hearing while testimony or evidence is being submitted and then rejoin the tribunal

9. The standard of proof A. for ethics decisions is a preponderance of the evidence B. for arbitration awards is clear, strong, and convincing proof C. for violations of MLS rules is a preponderance of the evidence D. for ethics appeals and procedural review of arbitration based on alleged procedural deficiencies or failures of due process is whether the effect was to deny the appellant a fair hearing

10. Which of the following is an appropriate basis for a procedural review request?

A. an error in interpreting or applying the procuring cause factors B. the discipline imposed is too severe C. the panel awarded more money than was requested D. the award amount is too large or too small for consideration Source: National Association of REALTORS®

One hundred and seventy-six local board appointees attended the KAR Professional Standards training sessions held in January in Lexington, Louisville, and Madisonville. If you were unable to participate in 2010, please contact your local Board President or Association Executive and let them know that you would like to be considered for a one, two or three year appointment for the 2011 Professional Standards Committee. Experienced agents and brokers are needed to serve as hearing panelists, to serve on the Grievance Committee or on the Appeals Panel. For more information regarding the roles and responsibilities of serving on one of these committees, contact Julie Johnson, KAR Director of Legal Affairs, at jjohnson@kar.com.

For additional resources, see Article 17 of NAR’s Code of Ethics and Standards of Practice and a REALTORS® Guide to Arbitration and Mediation, both found on NAR’s website at www.realtor.org.

Answers: 1) D 2) D 3) B 4) D 5) B 6) B 7) D 8) D 9) D 10) C

Professional Standards and Arbitration:

FALL 2010 KENTUCKY REALTOR® 29

A Day in the Life of...

What have been some of the major accomplishments the Oscar Cross Legacy Committee has experienced?

A Volunteering Works* Recipient Leslie Heath, Paducah, KY

How many years have you been in Real Estate?

I have been in real estate for 11 years.

How did you get involved with charity work as a real estate practitioner?

I was selected to participate in Leadership Paducah in 2008 and through that program I saw needs in our city. I have always been active in volunteer work but not in this role. I was contacted, and asked for help, by a lady who was about to lose her house to the city. Hearing the house was going to be torn down, I went to the house and immediately found out who used to live there. With this information, I asked the City Commission for $10,000 to purchase the home to keep it as a landmark. They gave me the money for the house and from there I began a mission to save this historic home, which once belonged to Oscar Cross.

You started the Oscar Cross Legacy Committee in Paducah. Who is Oscar Cross and how did this charity come about?

Oscar Cross is the founder of the Paducah chapter of The Boys and Girls Club of America. He started the club there in his home - the one we are restoring. Mr. Cross was recognized by the National Boys and Girls Club of America for forming the first integrated club in the USA. He touched the hearts of many families, children and young teens in our city. His photo hangs in the Capitol Rotunda at the Kentucky Capitol for his accomplishments.

There were many nights his own children had to share their home with others and his wife fed other kids at her own expense. Children played games in their yard and completed homework in their living room.

Obviously, the first major accomplishment was the $10,000. Since then, we have had a few fundraisers and generous donations from area churches to keep our project running. The support of many area businesspeople who have donated time and materials is also success.

You were a recent recipient of the Volunteering Works program through NAR. Who nominated you and what do you receive as a winning applicant?

One of my dearest friends nominated me. The award will provide $1000 to the charity and a year of one-on-one mentoring from someone who has previously won NAR’s Good Neighbor Award. My mentor is 2009 Good Neighbor and high school teacher Regina Ragon of Flintstone, Ga., founder of Latin American Community Development. I want to utilize the program to find new ways to network with local businesses, market this cause to the community and balance volunteer work with my real estate career.

What do you see on the horizon for this charity?

The future of this charity is to complete this house and get it open for the children who are in my heart so they don’t fall through the cracks. Many just need a loving hug from an adult who can tell them they are important! We hope to get more volunteers to help as well as donations to complete the house into an after-school homework and meal center for children in the community.

Is it difficult to find enough time in the week to give back?

At times, it can be very difficult to find the time to work on this project, but when I see the faces of the children that we help, I find the time. It is a very rewarding work and I wouldn’t give it up for anything. When you have a passion for something, you work it out and get it done.

Outside of real estate, what is your favorite pastime?

Two of my favorite things are golf and riding horses.

What is the best advice you have ever received?

The best advice I ever received came from an attorney friend who said “make yourself available to volunteer and your heart will always be full of joy.”

* As part of NAR’s Good Neighbor Awards, the Volunteering Works program matches REALTORS® who would like to expand their community service outreach with a mentor who is already a successful volunteer leader. If you or someone you know would like to learn more about either of these award programs, please visit realtor.org and search keyword: Good Neighbor. You can also read about Leslie and the other recipients of this award.

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