Kyrealtorfall14 by Kentucky REALTORS

Kentucky

REALTOR 速

Fall 2014

A publication of the Kentucky Association of REALTORS 速

In this issue:

Monitor your listings to track results Realtor Safety Month Does your brokerage have a document rentention policy?

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FALL 2014 KENTUCKY REALTOR速 1

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Contents

Volume 7, Number 2, FALL 2014

IN THIS ISSUE Safety tips to share with sellers 8

A publication of the

A higher bar to professionalism in Kentucky 14

Kentucky Association of REALTORS® President Ronald E. Hughes Paducah Board President-Elect Norman Jones Eastern Kentucky Association Treasurer Gale Fulton Lexington Bluegrass Association Treasurer-Elect Mike Becker Northern Kentucky Association

Do you know where your listings are? 16

Will the Zillow acquisition end your business? 20

REGULAR FEATURES

KAR News 4

Chief Executive Officer Joe McClary jmcclary@kar.com

President’s Message 5

Communications/Education Director Hunt Cooper hcooper@kar.com

Tools You Can Use 6

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. 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 © 2014. Kentucky Association of REALTORS®, Inc. All rights reserved.

Legal Update 9 Legislative Update

KREC Update

Education

Local Association News

By the Numbers

Housing Stats

Community Profile

CEO Message

A Day in the Life of...

FALL 2014 KENTUCKY REALTOR® 3

CMYK / .eps

KAR News Facebook “f ” Logo

CMYK / .eps

Follow KAR on Facebook and Twitter @kyrealtors KAR has posted its Twitter feed and Facebook page link on the home page of its website so members and consumers can follow all the things going on with the association. Keep up with all things KAR on a real time basis – legislative updates, industry news, business tips and much more!

Serve on a KAR committee Want to get involved with your state association and give back to the industry? KAR has over two dozen committees, task forces and workgroups that need volunteers to help keep the association moving forward. Check out all the options available at portal.kar.com (you will need to log-in first). You can view all the committees, see descriptions of each and view current committee members. At the bottom, select “My Committees” to see a list of committees you are currently serving and the term. From there, you can select “Volunteer for Committee Service” to request appointment to any of KAR’s committee positions. Make your selections soon for consideration in 2015.

Mark Your Calendar—

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KAR Leadership Conference December 3-4, 2014 Hyatt Regency, Lexington, KY Get feedback on your listings, improve communication with your sellers, and set yourself apart from your competition with HomeFeedback®. Special rates available for KAR members for this great client tool.

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Through this special auto insurance program, you will save up to $500 with special rates on your auto policy even if you already have Nationwide as your carrier. In addition to auto insurance, Nationwide can also provide you with other products such as home/ renters, boat and RV insurance as well as identity theft protection. To view all affiliate partner offers, visit www.kar.com > Members > Affiliate Partners.

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President’s Message

The journey to be better Well here it is the middle of September and I am amazed at how quickly this year has gone.

e managed to get through the first half of the year – also known to many as the all-important legislative round – relatively unscathed. Real estate escaped having any unnecessary burdens placed on it in the last session and we continue to play offense in preparation for the session in 2015. In case you missed it, NAR’s June midyear meeting, now known as the REALTOR® Party Convention & Trade Expo, in Washington D.C. was full of business initiatives for the states. The major news was the rollout of the Organizational Alignment Core Standards (Core Standards) which are requirements set forth to improve the professionalism of associations of REALTORS® across the country and the level of service they provide to members. You may have heard about this, or even been involved in this, at your local association as a way to enhance benefits and improve the structure of your organization going forward. The summer meeting for KAR went off well with its usual lack of responsive phone reception and spotty internet service. But those aspects aside (because it is nice to be “off the grid” every now and again), the business conducted will help move the industry forward for all members. And that’s really why we, as volunteers, do what we do. In November, it’s off to the NAR Conference and Expo in New Orleans and then we wrap up the year in Lexington at the Leadership Conference. The year is definitely a busy time for me as the state president but I enjoy all the various aspects of these meetings from the local association visits to the Hill Visits in Washington. In December, I wrap up my official duties with the last KAR meeting of the year, the Leadership Conference. This meeting brings together all KAR committee chairs, KAR leadership, local Association Executives from across the state, along with their respective leadership for the following year, and many others in a forum setting to review important real estate issues while becoming more educated on KAR and the challenges being faced at all levels of the organization – local, state and national. The importance of being involved in the REALTOR® organization cannot be over stated. Your participation benefits the entire

industry so please consider giving your time to helping lead the charge. To learn more about getting involved at the state, see the previous page, or contact your local association for more details. This year, I had the wonderful opportunity to ride over to Branson, Missouri to participate in Region 9’s “Ride For America” RPAC fundraiser. Just like you and I, they, too, have a great concern for making sure that any legislation Congress enacts is friendly to the property owner and the real estate industry as a whole. If you haven’t already invested in RPAC, then I ask that you do before the October deadline for 2014. Your fair share is only $15 and I’m sure each of you know that nothing affects our business, the consumers or the nation like governmental legislation. The Board of Directors has looked at the future of the association and laid the ground work for a prosperous and exciting path for both KAR and KREEF. We find ourselves at a threshold for new opportunities at KAR. This is also the case for local associations throughout the state as they will be stronger, more involved and attuned to members and the public we serve with the new standards and focus. Many associations, for the first time, are actually looking at a future strategy of growth, prosperity and involvement for themselves and their members. The REALTOR® brand through this progression should be brighter and more prominent than ever before. As with anything, the journey won’t be perfect but we strive to and have made steps toward being a better us. And as I have mentioned in the past and asked this entire year - “What is it that we can do to make a difference and what is it we can do to be the difference.” I look forward to seeing you soon. Take care of yourself,

Ron Hughes, 2014 KAR President

FALL 2014 KENTUCKY REALTOR® 5

Tools You Can Use What are the biggest challenges to recruiting?

Top amenities for home buyers

With insights into the 2013 Imprev Thought Leader Survey, it was the recruiting topic that dominated this survey. It was cited as the number one business challenge among the leaders surveyed in 2012 and it took the top spot again in 2013. “The Recruiting Report” includes the specific survey questions and the percentage of responses received for each question. Below is the data: The 3 biggest “competitive challenges” faced in recruiting top talent:

Home buyers are showing some willingness to pay more for certain amenities in a home, according to the latest PulteGroup Home Index Survey of more than 1,000 adults ages 25 to 65. What’s surprising is that buyers say they’d give up some pretty alluring draws about a property for certain amenities: Forty-four percent surveyed say they’re willing to give up a location near public transportation in exchange for certain amenities, and 35 percent say they’d give up better schools and proximity to entertainment and shopping. So what are these amenities that home buyers want so badly? Fifty-one percent surveyed say they want their next home to be larger than their current residence, and 64 percent say they prefer a move-in ready home.

• Commissions (competitors offer a better split)

49%

Among the most important features home buyers identified:

• Costs (competitors offer lower costs)

46%

• Market share (competitors have more market share)

23%

•

“His and her closets” in the master bedroom (31%) and spa-like master bathrooms (23%)

• Bonuses (competitors offer signing bonuses)

22%

•

A large eat-in kitchen area (23%) and a kitchen island (22%)

• Leads (competitors offer more leads)

21%

•

At least one bathtub in a home (54%)

• Marketing (competitors offer more support)

21%

• Brand (competitors have better brand recognition)

15%

• Technology (competitors offer better technology)

10%

• Mentors (competitors have better agent mentors)

• Benefits (competitors offer better benefits)

• Facilities (competitors offer better facilities)

The most important areas to home buyers when choosing a new home: kitchen (29%), bedroom (22%), and living room (18%).

Homeowner regrets after the purchase According to survey by Chase, nine out of every ten buyers felt prepared when they bought their home, but after the fact, well more than half (56%) wish they had known more about the financial process involved in buying a home. The loan closing process was at the top of the should-have-known-more list (22%), followed by making an offer and negotiating (19%) and financing (15%). Nearly four in ten (39%) said that knowing what they know now, they would have bought a different-size or different-priced home, perhaps even in a different neighborhood. Most recent homebuyers were surprised by how long the purchase process took, too: 40% said it took longer than they expected. More than one-third (34%) said owning a home cost more than expected. And while more than 80% of buyers considered their home move-in ready, nearly as many (76%) now admit they’ve done, or are planning to do, renovations to their home soon.

The 3 biggest “personal challenges” faced in recruiting top talent:

A survey fielded one year ago by Trulia found similar results. More than one third (34%) of homeowners with regrets responding to a March 2013 poll said they wished they had chosen a larger home.

• Not attracting enough younger agents

51%

• Not able to spend enough time recruiting

44%

• Not able to get top producers to apply

36%

• Too few quality prospects

33%

• Not able to get your team to help recruit

28%

• Not able to find prospects that fit your culture

27%

• Wish I had more information about the home before I decided (22%)

• Not able to nurture prospects long term

18%

• Wish I had made a larger down payment (18%)

• Not spending enough to recruit

17%

• Wish I had been more financially secure before buying (16%)

To read the survey and the insights from participants, visit bit.ly/imprev. 6 kar.com

Other regrets included: • Wish I had done more remodeling on the home than I did (27%)

• Wish I had chosen a home with a shorter commute to work (15%)

Home buyers rank features in a home

Why people move

What are some of the most popular home features luring home buyers? The real estate brokerage Redfin surveyed 435 of its real estate professionals across the country to find out what the biggest real estate trends are with home features.

According to a recent report from the Census Bureau, while nearly half of Americans move for housing-related reasons (48 percent), the percentage has fallen from its peak of 52.8 percent in 2004. However, both job-related (19.4 percent) and family-related (30.3 percent) reasons have been on the rise over the past 15 years. Other interesting tidbits from the report include (source: RISMedia):

According to the survey, real estate professionals identified the following features as the most popular among home buyers: •

Open floor plans

•

Move-in-ready homes

•

Granite in areas such as bathrooms or kitchens

•

Upgraded windows

•

Locations near public transportation

•

Energy-saving appliances

•

Large closets

•

Updated lighting fixtures

•

Two-story home with a bedroom on the main floor

•

Wood floors

The survey revealed the following home features are not popular with home buyers:

•

Men were more likely than women to move for job-related reasons.

•

Better-educated people were more likely to move for job-related reasons than those with lower levels of education.

•

Married respondents were the least likely to move for family-related reasons.

•

Moves within the same county were typically for housing-related reasons, while inter-county moves and moves from abroad were for job-related reasons.

•

Several individual reasons, such as “change of climate,” health reasons,” and natural disaster,” were cited as the main reason for moving by fewer than one percent of householders.

Mobile rules real estate search According to comScore, June marked the first month in which more visitors came to the top three real estate networks - Zillow, Trulia and Move - from mobile devices than from desktop computers. Zillow had 1.4 million more unique visitors from mobile devices than from desktop computers and the margin for Trulia and Move was 600,000 and 1.1 million, respectively. In total, when looking at overall traffic to real estate sites, desktop computers still lead mobile by an ever shrinking six percentage points.

•

Popcorn ceilings

•

Carpet

•

Lack of parking

•

Small kitchens and bathrooms

•

Minimal amount of natural light

•

Dated homes

Professional photography sells homes

•

Wallpaper

•

Low ceilings

•

Limited storage space

Realtors® who use professional real estate photographs sell listed homes 32 percent faster than all other listings, according to a 2014 study of Chicago-area real estate sales by VHT Studios, who analyzed homes in every price range.

•

Loud location on a busy street

FALL 2014 KENTUCKY REALTOR® 7

Safety

Safety tips to share with sellers Share this valuable advice with everyone, including your sellers, and you’ll help them learn to protect themselves against crime while their home is on the market.

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Remind your clients that strangers will be walking through their home during showings or open houses. Tell them to hide any valuables in a safe place. For security’s sake, remember to remove keys, credit cards, jewelry, crystal, furs and other valuables from the home or lock them away during showings. Also remove prescription drugs. Some seemingly honest people wouldn’t mind getting their hands on a bottle of prescription medicine or other narcotics. 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, easyto-pocket electronics, like iPods, before your showing. Tell your clients not to show their home by themselves. Alert them that not all agents, buyers and sellers are who they say they are. Predators come in all shapes and sizes. We tell our children not to talk to strangers. Tell your sellers not to talk to other agents or buyers, and to refer all inquiries to you.

4 5

Instruct your clients that they are responsible for their pets. If possible, animals should be removed during showings. Make clients aware that buyers and agents are sometimes attacked, and the owner will be held liable. At an open house, be alert to the pattern of visitors’ arrivals, especially near the end of showing hours. In some areas, a group of thieves will show up together near the end of the open house and, while a string of “potential buyers” distracts the agent, the rest of the group walks through the house, stealing any valuables they come across.

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And, finally, let your clients know that you will take all of the above safety precautions, but that when they return home, they should immediately verify that all doors are locked and all valuables accounted for.

Providing Auction Marketing Solutions For: n

Lonnie R. Gann, GRI Auctioneer/Realtor

When you leave a client’s property, whether after an open house or a standard showing, make sure that all doors and windows are locked. Thieves commonly use open houses to scout for valuables and possible points of entry, then return after the agent leaves.

auctionsolutionsllc.com Licensed in Kentucky and Indiana • Office in Bowling Green and Louisville

Source: REALTORSafety911.com; Realty Times; ThinkGlink.com

Legal Update

Does your brokerage have a document retention policy? By Jason C. Vaughn

Every brokerage should have a document retention policy. Such a policy is helpful for a variety of reasons: retaining important information for future reference; deleting documents that are no longer necessary for the proper functioning of the brokerage; efficient retrieval of information in preparation of litigation; and ensuring that all employees are aware of the legal requirements for document maintenance. Moreover, the law requires that a brokerage maintain certain types of information for a specific period of time. All employees should be apprised of the provisions and ramifications for noncompliance. Failure to properly maintain that information could result in penalties and fines or could otherwise seriously disadvantage a brokerage’s position in litigation. For example, in the event a brokerage is unable to produce documents in a timely manner in response to a discovery request or is unable to explain the absence of a document, a court could make a determination, among other things, that the brokerage participated in the obstruction of justice, spoliation, or contempt of court.

Ignorance is not a defense Obstruction of justice is a general charge directed at those who impede parties from seeking justice in court. Black’s Law Dictionary defines spoliation, in part, as “[t]he intentional destruction of evidence,” and, where that is the case, the “fact finder may draw inference that evidence destroyed was unfavorable to [the] party responsible for its spoliation.” Spoliation is a specific kind of obstruction of justice. Lastly, contempt of court refers to any behavior that frustrates the administration of justice. Of course, not being able to comply with a court order to produce a particular document or delaying court proceedings and running up costs as a result of being unable to retrieve information efficiently can lead to those charges. A detailed policy will include provisions for all documents that pertain to the business, including brokerage records, accounting records, corporate records, employment records, legal documents, and property records. In addition, a good policy will address both paper documents and electronic information, and it will describe not only the manner in which information is retained, but also the manner in which information is destroyed. Lastly, a policy will state its effective date and the date of last review.

Seek competent legal advice Any brokerage considering adopting a document retention policy should seek legal advice before implementing such a policy. Some information must be maintained longer than others, and some records, if they will be relevant to litigation or potential litigation, should be preserved even though they could ordinarily be destroyed. No policy is good unless all employees understand and comply with it. Constructing a memo or educational program for all employees, including those in billing and IT, will be important to ensure that everyone at the brokerage has a good understanding of the policy.

Not to be ignored In conclusion, a document retention policy makes sense for an organized brokerage. It serves to keep a brokerage organized and prepared for whatever litigation may follow.

For a sample document retention policy that can be customized and used at your brokerage or local board/association, visit bit.ly/docretentionsample This discussion should not be viewed as legal advice. Please consult your attorney.

Jason Vaughn is a lawyer with Vaughn & Smith, PLLC in Louisville and serves as legal counsel to KAR. The attorneys at Vaughn & Smith, PLLC constantly monitor the real estate industry as a whole, as well as any and all changes in the law that may affect it. They have intimate knowledge of commercial and residential real estate transactions and can utilize this base knowledge when representing their client’s interests.

FALL 2014 KENTUCKY REALTOR® 9

Legislative Update 2015 Kentucky Legislature The Kentucky legislative session is only four months away and there’s no telling what ideas the Kentucky Legislature will put forth during its time at the Capitol. Each session, hundreds of bills are proposed - many affecting property owners, your business and the real estate industry. What happens at the Capitol and in local government affects your business. That’s why the Kentucky Association of REALTORS® follows a wide range of public-policy issues at the local and state level that affect your business and consumers. The KAR Governmental Affairs Department advocates for state policy initiatives that strengthen the ability for Kentuckians to own, buy and sell real property. KAR advocates on behalf of REALTORS® to foster a sound and dynamic Kentucky real estate market that creates vibrant communities in which to live and work. Here are some issues that affect REALTORS®, home buyers, and private property owners that may be discusses in the 2015 legislature: Commercial issues, environmental and property rights issue, fair housing, state housing programs, tax issues, financial and credit issues, insurance issues, foreclosures, right of ownership, banking issues and transportation issues. KAR will continue to focus on revitalizing the state’s economy and strengthening the real estate market. REALTORS® will oppose legislation that could hinder Kentucky’s real estate market recovery and support proposals that encourage job creation and economic growth. REALTORS® have endless possibilities to engage in advocacy on every level. So it is more important than ever that REALTORS® become engaged on the issues that affect the industry and provide a loud, clear and unified voice. Here’s how you can engage in advocacy at both the state and national levels:

Download the REALTOR® Action Center Mobile App

Vote, Act, and Invest on the go! This app is designed to help members learn about the latest government affairs and advocacy news and issues, track Federal Calls for Action and allows for a quick and efficient way to invest in RPAC and provide a way to track REALTOR® Party Activities. The app is available for download for the iPhone and DROID platforms. Simply search for NAR Action Center in your app market or text APP to 30644 to receive a link to download.

The NAR Broker Involvement Program is an enormous breakthrough in how REALTORS® can more effectively lobby their federal and state lawmakers through greater participation in these efforts. The program provides broker-owners and managing brokers the tools necessary to inform their agents on important issues being debated. It also reinforces the status of the broker-owner or managing broker as a resource for their agents on important public policy matters by providing brokers with advance notice of important legislation before Calls to Action are issued.

Both of these ideas are easy to participate, take very little time and are absolutely free.

State Issues New Data Security Breach Notification Requirements The Security Breach Notification legislation went into effect July 15th, 2014 in Kentucky. This legislation requires businesses and organizations to provide notice to their consumers when a security breach involving personal data occurs. The issue of data security is hot – from the Data Security and Breach Notification Act of 2013 to the CEO of Target Corp being hauled to The Hill for grilling over his company’s recent security breach. According to HB 232, a security breach is defined as unauthorized acquisition of unencrypted and unredacted computerized data that compromises the security, confidentiality, or integrity of personally identifiable information maintained by the information holder as part of a database regarding multiple individuals that causes, or leads the information holder to reasonably believe has caused or will cause, identity

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theft or fraud against any Kentucky resident.

• •

Personally identifiable information – means an individual’s first name or first initial and last name in combination with a social security number, driver’s license number or account number (credit, debit cards, security and access codes Information holder – means any person or business entity that conducts business in Kentucky (i.e. real estate broker/owner)

Any information holder is required to disclose any breach of the security system following discovery or notification of the breach to any Kentucky resident whose unencrypted personal information was/ is reasonably believed to have been acquired by an unauthorized person. This disclosure should be made in the most expedient time possible

and without reasonably delay. The notification may be delayed if a law enforcement agency determines that the notification will impede a criminal investigation. Notices may be provided by one of the following methods: (1) Written notice; (2) electronic notice; or (3) substitute notice and that’s if the information holder is able to demonstrate that the cost of providing notice would exceed $250,000 or that the affected class of subject persons to be notified exceeds $500,000, or the information holder does not have sufficient contact information.

Many consumers are looking at data and how’s it’s used in business. NAR Senior Technology Policy Representative Melanie Wyne says “Clients today are smart and savvy. They want to know what you’re doing to keep their data safe.” Real estate professionals need to make sure they are securing clients’ driver’s license numbers, earnest money checks, HUD1 forms, rental applications, and any mortgage broker/lender information they may have on behalf of their customers.

Federal Issues FHFA Seeks Input on Single Security for Fannie, Freddie On August 12, 2014, the Federal Housing Finance Agency (FHFA), the regulator of Fannie Mae and Freddie Mac, published a proposed framework for how the two mortgage-finance companies might issue and back a singletype of mortgage-backed security (MBS). The framework is a key step on the way to development of a single security, which FHFA officials said will reduce borrowing costs for potential homeowners. It would also potentially reduce costs for Freddie Mac who has had to offer discounts on guarantee fees to make up for the price difference of their MBS versus Fannie Mae’s. Originally discussed conceptually, Director Watt made the development of creating a single security a priority for the agency when he took office in January. The FHFA said the new security would combine some aspects of the current Fannie mortgage-backed security with the disclosure framework of Freddie’s securities. The new security would have underlying loans that were purchased either by Fannie or Freddie, rather than combine the loans. The FHFA has requested input from the public on the proposed security’s structure and NAR plans to submit comments.

NAR Comments on Treasury’s Request of Private Label Securities Market On August 8, 2014, NAR submitted comments in response to the Treasury Department’s request for feedback on the role of private residential mortgage-backed private label securities (PLS) market in the current and future housing finance system. In its comments, NAR stated that the federal government must clearly, and explicitly, offer a guarantee of mortgage securities and that full privatization is not an effective option for a secondary market because private firms’ business strategies will focus on optimizing their revenues and profits. NAR noted a uniform securitization platform should be required for issuers of government guaranteed securities and be open to use by issuers of private label securities. Additionally, the letter mentioned that finalizing the QRM rule will provide the certainty of a regulatory framework for securitization and that the QRM rule should follow the standard of the current Qualified Mortgage (QM) rule.

event allows private insurers to provide affordable terrorism insurance coverage throughout the country, and the recoupment provision in it protects taxpayers while costing the government nothing. In June, the House Financial Services Committee approved its version of a TRIA reauthorization bill, H.R. 4187. NAR will continue to monitor this issue and advocate for a quick and smooth reauthorization of this program which provides such important protections to commercial real estate.

RPAC Numbers (as of August 28) Goal - $132,300 / Raised - $128,500 (97% of goal) Participation Goal - 37% / Participation - 27% Major Investors Goal - 41 / Major Investors - 32 President’s Circle Goal - 2 / President’s Circle Investors - 8

Associations that have met or exceeded their RPAC Goal! Henderson Audubon Board Hopkinsville-Christian & Todd County Board Greater Owensboro REALTOR® Association Madisonville-Hopkins Co. Board Murray Calloway County Board Paducah Board Central Kentucky Association REALTOR® Association of SKY Heart of Kentucky Association Lexington-Bluegrass Association Northern Kentucky Association Cumberland Valley Board Somerset Lake Cumberland Board

Senate Approves TRIA Reauthorization Bill In July, the Senate approved S. 2244, the Terrorism Risk Insurance Program Reauthorization Act of 2014, by a vote of 93-4. This strong show of bipartisan support for the program follows NAR sending a letter to the Senate and conducting a “Call for Action” among its members urging Senators to support this bill when it was voted on. S. 2244 reauthorizes the federal program created by the Terrorism Risk Insurance Act (TRIA) of 2002 for seven years. The government backstop created by the program for cases of catastrophic losses due to a terrorist

FALL 2014 KENTUCKY REALTOR® 11

Legislative Update cont. Get out and vote

Why I invest in RPAC

REALTORS®, plan on heading to the polls on Tuesday, November 4 for local, state and federal elections. Kentucky REALTORS® have an 88% voter registration rate which is a higher rate than both the National Association of REALTORS® and the Commonwealth of Kentucky.

“In the quest to generate additional funding, government at all levels will try for tax reform (meaning increases) on fees, etc., at almost every step in the home buying and home owning process. Often these are not mentioned in the media. My RPAC investment funds the efforts to discover these political tactics, educate REALTORS® how to fight back and help prevent the government from complicating and making it more difficult and financially burdensome to do business.

Here are some details to keep in mind: • Voter registration deadline is October 6, 2014 • Polls open at 6:00am and close at 6:00pm • For voting information, sample ballots and to find out where you vote visit elect.ky.gov • On the 2014 Ballot: o U.S. Senate o U.S. House

Think about the impact any of the following: 1) the loss of the Mortgage Interest Deduction 2) the loss of 30-year fixed rate mortgages 3) a 20% minimum down payment 4) the loss of Federal Flood Insurance programs and 5) Tax on Services would have on your ability to maintain your business at its present level. Your Government Affairs and RPAC committees have.”

o State Senate o State House

o Local elections (PVA, Sheriffs, School Boards, etc.) • Visit kar.com for a list of supported candidates in the Kentucky General Assembly Get involved, get out the vote and make sure the REALTOR® voice is heard on Election Day in November.

Michael Becker, Major Investor

Elimination of FHA “Prepayment Penalty” In late August, the Federal Housing Administration (FHA) issued its final rule to eliminate post-payment interest charges on FHA-insured single family mortgages. NAR has urged FHA and Ginnie Mae to remove this prepayment penalty for years as the policy placed an unreasonable burden on consumers who already face high housing and closing costs. Conventional loans, as well as loans from the Veterans Administration’s Loan Guaranty Program and the U.S. Department of Agriculture’s Rural Housing Service loan program, do not have postpayment interest charges. The policy change will prohibit mortgagees from charging borrowers interest on their home mortgages after a principal balance pay-off. The final rule will go into effect on January 21, 2015.

Ride for the American Dream KAR President Ron Hughes, shown here on his Harley-Davidson, joined REALTORS from Region 9 – Missouri, Arkansas, Oklahoma and Kansas – on the “Ride for the American Dream,” a benefit ride to support RPAC. This event, which started in Branson, Missouri, took riders south toward Scenic Highway 7 in Arkansas, known as one of the 10 most beautiful drives in the United States, in the heart of the Ozarks.

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KREC Update

Kentucky real estate needs to improve education standards by Michael W. Wooden Executive Director, Kentucky Real Estate Commission According to information published by the Association of Real Estate License Law Officials (ARELLO®), all states require continuing education as a condition of ongoing real estate licensure. Many of those states, at any given time, are in the process of adjusting course requirements in order to best serve the goal of protecting the public in regulated real estate transactions. Kentucky is no exception to this trend. During the 2014 Kentucky General Assembly, the Kentucky Real Estate Commission (KREC) supported legislation (Senate Bill 51) intended to increase the number of required annual continuing education hours for active licensees from six hours to twelve hours. As we approach a new year and a new legislative session, more work remains to pass a bill that will ultimately improve education standards for real estate licensees. The look of such a bill is still being researched and evaluated, however, the Commission remains committed to the concept of expanded continuing education for active licensees. Many licensees have asked about the rationale for introducing and advocating the passage of legislation to increase, and ultimately improve, education standards in Kentucky. As noted below, the Commission’s reasons for supporting this type of legislation have not changed. 1.

The Commission continues to witness an increasing number of repeated license law violations;

The real estate transaction has never been more complex. In-depth industry knowledge on a number of topics is necessary to ensure an acceptable experience for the consumer.

The current trend across the United States is increased continuing education for real estate licensees in order to better ensure professional competency;

Licensees are responsible for being knowledgeable of Kentucky’s License Laws and Administrative Regulations being uninformed is not a defense for a violation.

In the coming months, we encourage all licensees to join with us and other real estate organizations in Kentucky in supporting the improvement of education standards. Your leadership and commitment to enhancing the status of real estate professionals and allowing Kentucky’s consumers to receive the benefits of this professionalism will be critical to the ultimate passage of the legislation.

CE Deadline: December 31st If you are an active licensee, it is imperative for you to remember that you must to have your continuing education completed by December 31, 2014. All active licensees (except for those licensed prior to June 19, 1976) must complete 6 hours of continuing education (3 in law) every year to maintain a license in good standing. You should also check to determine

The home is the largest investment most people make. Licensees have an obligation to their clients to protect the public interest by calling for the highest standards when it comes to the real estate transaction.

if it is your year to complete the Kentucky Core Course, which

Industry professionals and real estate educators, based upon their observations and experience, have recommended the increasing education standards;

four years. Be sure to check the KREC website (krec.ky.gov) and

Increased continuing education will improve protection to Kentucky consumers by maintaining high standards and professional competency for active real estate licensees; The real estate industry, mortgage financing, and technology is rapidly changing and necessitates licensees being current with these changes;

must be completed every 4 years. If you are a new licensee, you can still be required to take the Core Course in less than its Licensee Database for the information stating what year you must complete the Core Course. You can also verify that your CE credit has been received. We encourage all licensees to maintain a current email address with the KREC to receive timely notifications and updates on the upcoming CE deadlines. It is important to comply with these annual CE requirements as failure to do so will result in a $500 fine.

FALL 2014 KENTUCKY REALTOR® 13

Professional Development

A higher bar to professionalism in Kentucky NAR President Steve Brown highlights three ways to raise the bar in the real estate industry. Dear Kentucky REALTORS®, not only with clients but also with their colleagues. Too often, that second part is overlooked in discussions of professionalism. While REALTORS® must provide topnotch service to their clients, it is just as important to be cooperative and courteous with fellow professionals. Cooperation and courtesy are foundations of our REALTOR® ethos. This must be taught by the brokerages to which our members belong.

Being a REALTOR® in Ohio, I wanted to write personally to convey how proud I am of REALTORS® in my neighboring state of Kentucky for promoting higher education standards for professionals. I want to congratulate your Board of Directors for supporting legislation that would do just that. I know the fight for higher standards is rarely an easy one, but protecting the REALTOR® brand is worth it and I’m excited to see the progress you make with this initiative as you advance the cause forward. Wherever I go, the question I’m most frequently asked is, “How do we raise professionalism in our industry?” This is the way I see it:

We raise the bar of professionalism by aspiring to a higher degree of excellence everywhere, holistically improving all parts of the industry and organized real estate. Each REALTOR® association—local, state, and national—must provide its members with every program and service their membership entitles them to. Sometimes in assessing an association’s work, a criteria of “minimum standards” is set forward as a guideline to judge performance. But what REALTOR® goes on a listing call and tells potential clients, “I am here to guarantee you minimum service”? Every one of our associations must provide all of the services REALTORS® need so they can be more effective and professional in their business. Likewise for REALTORS®, they must constantly seek to raise the bar to please their customers. Training is most effectively conducted at the company level. The broker-owner or manager of every company must take responsibility for training sales associates to be professionals,

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REALTORS® themselves must take responsibility for seeking advanced training. Every NAR member has the opportunity to learn and network with professional and successful practitioners in whatever field of real estate they wish to specialize in through NAR-affiliated designation and certification programs, including ABR, CCIM, SIOR, CRS, CRB, CPM, and NAR’s green, to name a few. Of course, those who want to go deeper in their specialized fields can pursue a Master of Real Estate degree and other professional development courses at REALTOR® University. Designations, certifications, and the MRE give you more than just letters following your name. They show your colleagues and your clients that you’re dedicated to your profession. You can read more in the March issue of NAR’s REALTOR® Magazine about how the education programs of NAR’s eight affiliated organizations are providing tangible business benefits to members. I spent the first 25 years of a successful career with no designations, believing my two graduate degrees were enough advanced education. But I have become an even more effective real estate professional by completing four designations over the past 10 years. There is no secret to raising the professional bar of our industry. Getting started is as easy as 1-2-3. The time is now. Let’s do it.

Education Pre-licensing course available online – it’s affordable and convenient www.kreef.org > Pre-licensing In order to meet the needs of today’s student, KREEF is offering the entire 96 hour prelicensing program entirely online. All the materials and resources needed to get started in real estate are included in the $599 price. In addition, the license law portion of the course was written by the highly respected and often requested attorney and real estate instructor Virginia Lawson and provides a comprehensive look into the Kentucky statutes and regulations applicable to all licensees. Note: KREEF also offers this program in a blended format giving students the ability to complete a portion or the program online and a portion in the classroom. www.kreef.org > Pre-licensing

Online CE and Core: get it completed early www.kreef.org > Online Education Courses are available to you 24/7 – all you need is a computer and internet access. It’s that simple. These courses can be taken at your pace. Finish the entire course in one sitting or you can enter and exit as your schedule allows. Don’t wait until the last day or week of the year and chance getting hit with a $500 fine for missing the December 31 deadline.

GRI – start on your designation journey today! www.kreef.org > Designations > GRI With GRI, you can build your business through courses that offer specific training in key areas of real estate. And, you will expand your network of real estate professionals that can assist in generating leads and referrals from across the state. What are you waiting for? Get started now on the most popular national designation in real estate. If you complete your GRI by the end of the year, your last course is on the house (see website for details). Bonus: these courses also count for CE credit, broker credit and the completed GRI program counts for ABR elective credit.

Upcoming Classroom Courses:

Upcoming GRI Courses:

Core Course October 8 - Prestonsburg, KY 6 hours law CE

GRI 1: Professionalism in Real Estate October 20 & 21 Greater Louisville Association 6 hrs law CE (KY) - 7 hrs CE (OH) Instructor: Virginia Lawson

Costly Mistakes Made on Common Forms October 29 (am) – Hopkinsville, KY 3 hours law CE 23 Federal Laws that Apply to Real Estate Sales October 29 (pm) – Hopkinsville, KY 3 hours elective CE ANSI Residential Measuring Standard October 30 (am) – Murray, KY 3 hours law CE Ethics& Real Estate October 30 (pm) – Murray, KY 3 hours elective CE and ethics credit Agents, Ethics & the Law November 12 (am) – Owensboro, KY 3 hours law CE and ethics credit Mishaps, Mistakes & Risk Management November 12 (pm) – Owensboro, KY 3 hours law CE

GRI 2: Smart Marketing October 9 & 10 Lexington Bluegrass Association 3 hrs elective CE Instructor: Mike Gooch GRI 3: Financing the Successful Transaction October 23 & 24 Lexington Bluegrass Association 3 hrs elective CE Instructor: Jeff Ratanapool GRI 4: From Offer to Contract to Closing November 19 & 20 Northern Kentucky Association 3 hrs law CE and 3 hrs elective CE (KY) - 8 hrs CE (OH) Instructor: Harry Borders

Scholarships available for education www.kreef.org > Scholarships

The Kentucky Real Estate Education Foundation (KREEF) is dedicated to providing education, services and research for members of the Kentucky Association of REALTORS®, Kentucky real estate licensees and the public. To accomplish this, KREEF offers three types of scholarships – GRI, college/post-secondary education and REALTOR® University’s Master of Real Estate program. The deadline for submitting applications for 2015 is Friday, June 5. To learn more about each of the scholarships, eligibility requirements or to download an application, visit. The following were selected for awards in 2014: GRI Scholarship Recipients: Angi Williams, Bowling Green, KY Claire Schenk, Louisville, KY

College Scholarship Recipients: Anna-Marie Hyatt, Lawrenceburg, KY Harold “Brent” Smith, Corbin, KY

Start the journey in real estate leadership by joining the ranks of some of the most successful REALTORS® in the state. Apply now for the 2015 LeadershipKAR class by visiting www.kreef.org > LeadershipKAR. Deadline is December 31.

FALL 2014 KENTUCKY REALTOR® 15

Feature Article Do You Know Where Your Listings Are? By Meg White As relationships between MLSs, aggregators, syndicators, and brokerages shift, pay close attention to what happens after your listings are entered into the MLS. It’s your data, after all. Everyone knows that the listing agent’s duty is to get property sold under the best conditions for the seller. Usually that means getting the listing in front of as many eyeballs as possible. But spreading your data far and wide can have unforeseen consequences. “A lot of folks don’t know where their data is going,” says Kip Cooper, CEO of the Huntsville (Ala.) Area Association of REALTORS® and the North Alabama Multiple Listing Service. “They just set the dial and forget about it.” After hearing from frustrated members - including one whose listing was next to a video explaining how to buy and sell property without the help of a real estate agent - the association decided it needed a different approach to distributing its data. It was time to “take control of the information,” he says. The North Alabama Multiple Listing Service took one route - ending an agreement with a company that distributes listing data to more than 50 websites - but there are almost as many distribution scenarios as there are listings at any given time. From a “pocket listing” with no public exposure to a listing advertised on a public-facing MLS site, brokers’ sites and feeds, realtor.com®, Zillow, Trulia, Homes.com, and the local newspaper site, or some combination thereof, the possibilities are virtually endless. The one thing nearly everyone can agree on is that sellers should have the final say as to where their property is advertised online. To make an informed decision, they’ll need your guidance. That starts with understanding syndication—the process of distributing listing data to online portals. Typically, when you enter listing data, including photos and video, into your MLS, you have options regarding just how the MLS and other MLS participants will use your content. The National Association of REALTORS®’ Internet Data Display (IDX) and Virtual Office Website (VOW) policies authorize electronic display of listing content by other cooperating participants under specific rules. The policies also say a broker’s listing content can’t be transferred to a third-party site without the listing broker’s consent. The purpose is to ensure that brokers retain control over where their listing content appears and that the data is up-to-date. But such safeguards aren’t necessarily in place when it comes to data aggregators (sometime referred to as portals, sites that display listings from several sources) or syndicators (those who push listing data out to other sites). Displays that aren’t governed by the MLS rules or controlled by a person connected with the transaction can easily become out-of-date or contain inaccurate information, as any agent who’s had to answer e-mails from excited buyers inquiring about a home that sold months before can wearily attest. Finally, there’s almost zero control to be had over the

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information posted by data “scrapers,” who lift listing data and often post it far and wide without any rights to do so.

Syndication: It’s Complicated MLSs have been syndicating their data to aggregators since 1996, when realtor.com® put the real estate industry at the center of the burgeoning dotcom world. Today, a majority of MLSs syndicate their data under the premise that it’s the best way to reach consumers where they’re shopping. Syndicators like ListHub and Point2 make it relatively easy, delivering data to dozens of aggregators including Zillow and Trulia—and providing analytics to MLS participants. But in the past year, MLSs and syndicators have been moving toward imposing more controls on how data is used. Besides the concern that consumers will see out-of-date or inaccurate data, critics charge that third-party aggregators use their listing data to

where Zillow has multiple agreements covering the same market areas, the free program allows brokers to choose the data source - whether it’s the brokerage’s data, a ListHub aggregation, or an MLS feed - that will take precedence over or trump other sources. Brokers also get analytic data and preferred placement for agents on their own listings. Trulia, too, is actively courting the industry. The company purchased the marketing and lead management solution Market Leader in 2013 for about $355 million and has launched a number of tools for real estate agents and brokers, including an app, Trulia for Agents. “We get some listing information from MLSs that syndicate their data,” says Matt Flegal, senior manager of communications for Trulia. “We also allow MLSs to use our Trulia Data Connect service to share listings directly. And, we get listings directly from brokers and agents. Our goal is to have the most current, accurate data possible.”As the official property listing website of NAR, realtor.com® has the advantage of direct relationships with more board- operated MLSs, which gives it the ability to say its data is most accurate. The site, which is operated by San Jose, Calif.–based Move Inc., receives listings from more than 800 MLSs and updates most listings every 15 minutes. Like its competitors, realtor. com® sells marketing solutions to real estate practitioners. However, it doesn’t charge for leads, and its core mission includes keeping real estate brokers and agents central to the transaction. “It’s not something that can be quantified in dollars and cents or in traffic. It’s just a very important part of continuing to build what we believe is a unique brand value proposition,” says Move CEO Steve Berkowitz. “We will always be promoting the value a REALTOR® brings to the transaction.”

attract traffic and ad dollars and to capture and sell leads. Others are frustrated with aggregators that sell ZIP code–based “local expert” status to their competitors or present a distorted view of market values. And as in Huntsville, MLSs are beginning to assert their own interests, says Saul Klein, industry principal with Yardi-owned Point2. Without controls on what data is syndicated and how it’s used, he says, MLSs could be giving away the farm. Klein’s talking about monetization of “derivative works,” or companies profiting from big-data solutions built using MLS data. Not surprisingly, third-party aggregators see things differently. Zillow positions itself as the go-to resource for consumers, but Chief Revenue Officer Greg Schwartz says the company is working hard to build relationships within the industry. Schwartz notes that the company has signed more than 200 brokers to its Zillow Pro for Brokers program, through which brokers provide an MLS-sourced feed of their listing data to Zillow. In areas

While most brokers have embraced the idea of sharing listing data, there are plenty of practitioners who just wish  the third-party sites would go away. But that’s not realistic, says Jeff Barnett, vice president of the Los Gatos, Calif.,  office of Alain Pinel, REALTORS®, during an MLS forum at the  REALTORS® Conference & Expo in November. “I would love not to have Zillow, Trulia, and all of the rest of them, but in reality that’s not the way it works.”

Direct to Consumers Recognizing the staying power of these sites doesn’t mean giving up the fight for consumer attention. In some areas, MLSs are looking to wrest away that coveted top spot in a Google search result by making their own consumer play. The public-facing, broker-run MLS site used by Barnett’s office is well-liked by consumers and “has leads that go back to the agents,” which Barnett says translates to a 99 percent opt-in rate among brokers. One of the most successful examples of a public-facing site is that of the Houston Area Association of REALTORS®. HAR.com debuted in 1997; (continued on page 18)

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Feature Article by March 2013, HAR says, the site had facilitated 1 million home sales. The Houston association recently announced a public-private partnership to launch a mobile app connecting real estate data with city services and other local data. Houston city officials see the marriage of real estate and municipal information as a natural for consumers. “This app meets the needs of our new residents while being equally valuable to those who’ve called Houston home for some time,” Houston Mayor Annise Parker said in an October 2013 statement. “They need quick and easy access to real estate resources as well as general information about the city.” Other public-facing MLSs are integrating new tools to bring in more users from all over the world. The Metropolitan Indianapolis Board of REALTORS®’ public-facing MLS site offers listings in twelve different languages, each with a direct link to the brokers’ site and contact information for the listing agent. Not everyone likes the idea of these consumer sites. Critics see the publicfacing portals as direct competition with brokerage websites and individual IDX feeds. Because brokers pay to participate in the MLS, they might also see the sites as a forced contribution to the visibility of competitors. John Mosey, president of NorthstarMLS, which serves the MinnesotaWestern Wisconsin market, says he has been asked by nonmember shareholders to create a public-facing MLS site but has resisted because of broker opposition. “We serve our broker and agent community,” Mosey said at the MLS forum in November. The Indianapolis board has a different perspective, CEO Stephen J. Sullivan told attendees at the forum. “Where would [consumers] go if they didn’t go to our website? They would probably go someplace that’s going to charge [brokers] to get those leads back,” he said. “That’s why some of the larger brokers tolerate it.”

The Draw of Independent Distribution Whether or not they host a public-facing site, all MLSs have to answer to their participants on the question of data integrity. Indeed, one criticism leveled by practitioners has been that MLSs’ syndication agreements themselves are responsible for the far-flung presence of their listing data. In general, though, individual brokers are the ones with ultimate control. Syndicators such as ListHub - owned by Move - rely on a prescribed set of data standards to access listing data. Designated brokers can log on to ListHub and manage how their office’s listings are syndicated across a variety of online aggregators. But, as Cooper in Hunstville discovered, just because brokers have control doesn’t mean they are actively managing the feeds. Cooper isn’t the only executive whose MLS is moving to a different distribution model. After receiving unanimous consent from board members, the Austin (Texas) Board of REALTORS® announced last September it would end its ListHub agreement on April 30. The association’s task force in charge of studying the issue found that, in the five years since the agreement had been forged, many brokers had their feeds on autopilot. “Most did not remember setting up ListHub, nor did they have any idea which websites their agents’ listings were being sent to,” says task force member Jonathan Boatwright, co-owner of Realty Austin. He says brokerages set their syndication levels to maximize online marketing impact years ago. That was before ListHub’s reach had grown to 58 different third-party websites, where, in some cases, data wasn’t updated frequently or was blended with information from outside sources.

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“Members voiced concerns about the way their listings were being presented and the confusion it caused,” he says. “[The blanket syndication] causes consumers to question our credibility as they inquire about outdated listings and then feel like they are getting the bait-and-switch.” When the direct ListHub feed to aggregators ends this spring, the board’s 9,400 brokers and agents will have to decide where and how they want to post their listings online. Though he’s an agent with Keller Williams, a company that provides listing syndication to its agents and brokers via Market Leader, Jordan Gouger believes ABoR made the wrong choice. Home buyers are “trained to go to Trulia and Zillow and maybe realtor.com®,” he says. In addition to having his leads syndicated out to aggregators via ListHub, Gouger advertises on Trulia. He acknowledges that the data quality isn’t perfect on outside aggregators’ sites but says that’s where the consumers are. The Austin association says the decision wasn’t about punishing the aggregators or syndicators for inaccurate data. “We are simply getting the Board of REALTORS® out of the business of syndicating member listings to nonmember websites,” Boatwright says. “Third-party websites will continue to provide advertising services for members who find value in their services, but members will be able to negotiate directly with each company they choose to advertise with, rather than blindly sending their listings to 58 different publishers.” Cooper’s North Alabama Multiple Listing Service Inc. also made a move away from ListHub, but it decided to become more involved in syndication rather than less. In October 2013, the MLS - which represents more than 2,000 real estate professionals in seven markets - set up separate, confidential agreements with sites such as Trulia, Homes. com, Zillow, realtor.com®, and others. Each agreement forges a direct feed of members’ listings to each site and delivers web analytics data from the sites back to brokers. Listings are syndicated by Atlanta-based Bridge Interactive Group. Cooper says the agreements ensure that listing data from brokers trumps all other data that third-party sites might normally add to a listing without such protections. “This puts all of the power back in the hands of our REALTORS®. It puts them back in the center of the transaction,” says Cooper. The new system also helps the MLS see where the data goes after that first syndication push. “We know the minute our feed goes someplace that it does not belong.” Cooper cites the same issue as Boatwright in Austin: Many brokers weren’t managing the aggregation process under ListHub. “There are controls that ListHub puts in place, but it’s up to the brokers to limit it,” Cooper says. Even if brokers are vigilant about each and every listing, however, “often it’s the end user that is resyndicating without permission.” Cooper says he’s seen pretty much universal buy-in from his MLS participants. Still, he admits that this first-of-its-kind restructuring was easier for his area than it would be elsewhere, because the MLS already has a robust web presence at ValleyMLS.com. The member-owned listings site is “the highest performing public-facing website for real estate websites” in the area, he says, which made it much easier to get buy-in from members. “For us to pull out of ListHub, there was not as much fear on the broker side,” he says. “Your very small MLSs would have a degree of difficulty.” And taking control of syndication may be more than  some MLSs want to handle. In a statement last November, ListHub General Manager Luke Glass said the company had welcomed back some MLSs “who have experienced first- hand the complexity of managing listing distribution

independently.” For example, the Corpus Christi (Texas) Association of REALTORS® returned to ListHub in 2013 after two years of managing syndication for its members independently. ListHub said in November that it was powering 450 data sources across the country.

“There are hundreds of MLS organizations, and just as many different ways to approach the marketing of their listings … If every major metro’s MLS adopted a different approach to marketing and syndication, we’d get the largest test case we could possibly imagine with real-world results.”

With MLSs taking a variety of approaches to secure data, what’s the effect on REALTORS®’ own portal, realtor.com®?

“Because of our unique industry position and relationships, these decisions have had no impact on realtor.com®,” says Move’s Berkowitz. Of course, Move wasn’t happy to see ListHub lose a customer, but in the case of Austin’s expiring agreement, he notes that “instead of getting a single feed from ListHub, other portals will now have to sign over 1,000 individual brokers and manage that number of individual data feeds. Realtor.com® will continue to have one agreement and one feed from the Austin MLS.”

Diversity Is a Good Thing In the coming years, MLSs and brokers will continue to change the agreements they use to syndicate their listings online. And that might not be a bad thing. While the huge variety of listing agreement landscapes makes tackling this issue more difficult, some see the advantages of diversity. In a recent commentary, Washington REALTORS® state director Sam DeBord, of Coldwell Banker Danforth in Seattle, wrote that this tumultuous situation is something “that most industries would kill for.”

What is IDX? Also known as “broker reciprocity,” Internet Data Exchange gives MLS participants the ability to authorize other participants to display their listings electronically and exercise some control over the display of listing data. In May 2000, NAR’s board of directors voted to add IDX to the existing MLS policy. The IDX policy has been modified six times since then.

“Boards from across the country can simultaneously take widely divergent steps to attempt to improve the way listing data is displayed,” he wrote.

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FALL 2014 KENTUCKY REALTOR® 19

Feature Article

Will the Zillow acquisition end your business?

A blog post by Brian Copeland

Folks. Define your value proposition. For consumers who are reading this, I hope you will finish this and understand what a REALTOR® does. For real estate industry people who read this, I hope you will get a refreshed perspective and a challenge to up your game.

I have to ask you a question. When did online syndication become the center of your value proposition? When I look at the smartest 35 REALTORS® I know (yes, I can name the 35), none of them are threatened, concerned or panicked. And I’m going to tell you exactly why.

Over the past 24 hours, and technically over the past five years, all I have heard in circles has been the “sky is falling” mentality about internet sites that showcase real estate listings. I’ve also read a few opinions. A few were from people I really respect. The vast majority of opinions I’ve seen are written or expressed by people who I’ve never seen in this industry at association events, trade shows, courses, conventions and the spheres of true influence in the industry.

They understand value proposition. They understand what a quadruplethreat real estate professional is. They understand that in the 100% that makes up our value proposition, online syndication makes up less than five percent of the value proposition. They have frustrations with the industry, but I’ll touch on that later, and many of you will not like it. Read on.

I’ve grown frustrated that no practitioner who is truly connected has gone into detail about what this means for our business, not our industry, but our business. “Industry” is impersonal and too abstract. “Business” is in your home and office every day. It’s tangible and impactful. I want you to look at the chart I sketched, down and dirty, that shows what I personally consider the pillars of what I do on a daily basis. This isn’t copied from a book or a class. It’s just one guy’s perspective from the trenches. I’m certain things have been omitted, but you’ll get the general idea.

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Why do agents feel threatened? Why do consumers feel underserved by this industry’s professionals? Many agents have grown comfortable. You don’t crave learning. Recently, I sat in a global course. I’ve worked with only three global consumers, yet the information I’ve received this week is priceless in serving all consumers. I’ve been challenged, frustrated and confused in the course, but I knew it was part of expanding my brain and improving my customer service skills. When was the last time you took a class or attended an education event that offered no continuing education? We’ve grown comfortable that someone else will advocate for us on the “hills” of government. A new regulation that some legislator passed

impairs the ease and flow of real estate exchange. We jump on Facebook to complain, when we didn’t care to respond to a call for action communicated via email or by a colleague desperately asking for our help to lobby our representatives to stop it. Yes, someone else will handle that for me. Many have grown complacent in relationships. We’ve only invested in others when there is something good in it for our wallets. When given the opportunity to dig deeply into neighborhood action that fortifies our neighborhoods, we’d rather toss a charity a few hundred dollars through a website and feel good about ourselves for the rest of the year. Syndication services like Trulia and Zillow are not your business value proposition. If they are, leave our industry. The consumers do not need you. Trulia and Zillow have a place in the real estate scene. Zillow is a fun site. It really is. It’s fun to check your home’s potential value. It’s fun to look at photos and tours. It’s a hobby site, like Pinterest, for many of you. Enjoy it and keep on going! If you’re looking to Zillow as the authority as a consumer, you’re likely the type who doesn’t take their kids to the doctor because WebMD told you everything you need to know about your child’s health. This is how I explained it to a dear friend who is a news anchor, and buyer, who kept using Zillow as a source for real estate search. “Finally, on the other listings you sent over from Zillow, we do not work with Zillow data. Imagine preparing for your news show as a professional and finding a source that is giving you the juiciest, most original news out there. You report it to the world only to find out, it was completely false. Your integrity is bruised, you’re embarrassed, and the public you work to inform is leery of you every time you get on the radio. Every now and then, the source actually tells the truth and you miss a scoop, but the greater issue of inaccuracy keeps you to your policy of ‘I will not use this source and will only use the ones I KNOW for a fact are accurate to protect and preserve my reputation.’ That is the same policy we have with Zillow. We work with 100s of buyers and sellers each year. Zillow has sent the Zillow-faithful on many a disappointing journey dragging our relationships through the mud alongside them. It’s just not a good match for the value statement we have set forth as a team. In 2011, we actually took a retreat to craft a valuestatement around this very issue. All that to say, none of the Zillow listings you sent over are currently conveyable to anyone. When something is in pre-foreclosure, there is no guarantee of it ever hitting the mainstream market. We’ve chased banks for clients who say, ‘But it will hit and before it does, I want in first,’ and none have ever seen success. Zillow is like a ‘data tank’ meaning it obtains data from every source it can find and creates a product. It doesn’t care if it’s accurate or not. They simply want your eyes on their site so they can sell advertising to “featured agents” who pay them (no joke) $1000-$10,000 a month for rights to zip codes. It’s an ugly, ugly world we don’t even try to explain to our clientbase. When I explain it to the normal ‘Non-you-type,’ they don’t get it, get

mad and move along to another agent who they can string along. The source I pay huge money for (and sit in DC, as I type this, to protect its integrity) is the steward of the true data. Zillow, in fact, obtains its information, too, to grab eyes. If it’s accurate on Zillow, it definitely came from my data source, which I’m checking for you daily (if not hourly.) I hope that all makes sense.” The data statement above opens up another can of worms - the MLS (multiple listing service). I don’t like talking about it because I will make a lot of people very angry whom I respect and care for a lot. For consumers reading this, the MLS is the original source point where we enter our listings into the computer and how they end up in all the areas of the internet. We’ve allowed MLS politics to become a mess. Just a mess. There’s no other way to explain it. We’re afraid to call it like it is in the MLS world. Unfortunately, many associations would close without the income from their MLS. When associations close, jobs are lost. Pride is injured. Legacy is obliterated. Egos are bruised. I’m embarrassed at the battles I’ve seen over the control of this data entry tool. Most are more concerned about legacy, ego and employment instead of the greater good and success of the professionals that they were founded to serve. I know of agents in some areas who pay over $50,000 a year in order to access the MLS. Some pay hundreds. Some pay thousands. Some, like me, only have to pay one MLS service. Others pay several MLSs in order to conduct business. When anyone brings up the term “National MLS,” you will see the fur fly. For the consumers reading this, do you really care about our battle? I’m certain many of you didn’t even know about this dissonance until you read this. You just want the information, which is one part of our value proposition. Technically, our only value in electronic information is that some of our data is more accurate than Zillow or Trulia. Our true value is being a cumulative, quality professional through education, advocacy and relationships. This is why none of the professionals I respect are fearful of mergers and industry change. Their foundations are so strong, no matter what implied storm is about to hit, they will not only survive, they will thrive. Brian was a featured speaker at the 2014 KAR Convention & Expo in Bowling Green, KY on September 23-25. He discussed how to connect with your clients and community. Brian is in the top one percent of REALTORS® in his Nashville, Tennessee market. He was the recipient of NAR’s 2010 Technology Advocate Award and has served or serves on NAR’s Professional Standards Committee, The Federal Technology Advisory Board and is the 2011 National Young Professionals Network Board Chair. Brian has appeared on countless reality TV shows including HGTV’s Good-buy Bad-buy, House Hunters, The Top 25 Home Buying Tips and The Learning Channel’s Flip That House.

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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. Hopkinsville Christian & Todd County Association The Hopkinsville Christian & Todd County Association received an NAR grant for $5,000 to help with their second annual REALTOR® Military Appreciation Picnic (RMAP). All military families from Fort Campbell are invited to come spend Sunday afternoon to celebrate. This year it will be located at Christian Way Farm with petting farm animals, mini golf course, corn maze, hay castle along with lots of food and fun! The Board will be providing goody bags with maps of the area, the latest Community Guide & Chamber Directory, information about the “Secrets of Hopkinsville” and the out of the ordinary places to go. The community is getting involved by providing nice door prizes. Gay Wilson, Board AE stated, “It has been awesome to see my members working together to plan, serve and show their appreciation to the Ft. Campbell military families living in our area.” The event date is September 21 from 2:00pm to 5:00pm if you would like to attend.

Madisonville-Hopkins County Board Madisonville REALTORS® are hosting their first ever 5K color run in October. They are partnering with the Light of Chance’s Breathe Youth Arts Program, an after school arts program that provides free sessions for grades 5-12. The program helps to develop the creativity in youth while providing a positive and safe learning environment for the children to express themselves. If you would like to participate on October 18, call 270.821.8888 to register.

Central Kentucky Association The Central Kentucky Association has held several events throughout the year as a way to encourage investments to RPAC so they can reach (and exceed) their RPAC goal and increase participation throughout their membership. One of the most recent events was holding a Treasure Chest drawing where a member would walk away with a new iPad. CKAR has been accepting RPAC contributions all year to reach their goal. Members who invest a minimum amount were given a key and a chance to unlock the Treasure Chest and win. The drawing was held at their July general membership meeting where a Dessert Auction was held and raised an additional $910 for RPAC. Mary Ann Hollon held the winning key for the iPad and CKAR surpassed their 2014 RPAC goal.

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Greater Louisville Association The GLAR annual Charity Golf Outing, held in July, was a huge success raising over $16,000 for Louisville Area Ministries. The success goes to all the golfers who participated, lots of wonderful sponsors, dedicated volunteers and members of the Community Relations Committee. GLAR also hosted a photo fundraiser for GLARPAC with Studio16, an on-site photography studio, where members contributed $20 to GLARPAC and were able to have a professional portrait done. The event was a huge success with 110 REALTORS® participating.

Somerset-Lake Cumberland Association In May, members of the Somerset-Lake Cumberland Association dedicated their monthly membership meeting to the Relay for Life Auction. With items and desserts donated by our REALTOR® and Affiliate members, everyone enjoyed the competition of bidding against one another for various items and helping out a good cause at the same time. The theme of this year’s auction was “Carnival for a Cure” and some of the activities that participants enjoyed were the duck pond, dart throwing, cake walk, corn hole, a lemonade stand and the “Pot of Gold.” With Rick Barker serving as our “Carnival Barker,” the festivities were kept upbeat over $5000 was raised for the American Cancer Society.

Madison County Board In June, the Madison County Board, along with several of their affiliate members, participated in the Special Olympics held at Eastern Kentucky University in Richmond where they photographed the athletes and gave them a complimentary picture at no charge. The Madison County Board is also a corporate sponsor for the Relay for Life and was recently honored with a plaque presentation for their commitment.

Harrodsburg listed as one of America’s Best Small Towns In Smithsonian magazine’s third annual search-and-enjoy mission, they singled out communities for particular strengths in history, music, visual arts, learning, food, theater and science. Working with the geographical information systems company Esri, which analyzed tons of data to find towns or cities of fewer than 15,000 residents where cultural opportunities abound, at least on a per capita basis, they selected Harrodsburg, KY as number 17 on their list of America’s Best Small Towns.

Change happening in Lexington A social media website called MyLife says Lexington ranks number 3 in a list of best cities for starting a new life. The study looked at 100 cities and compared five pieces of data - unemployment rate, average income, average rent, percentage of transplants and percentage of 20- 34-yearolds. The two most important factors in determining the top ten were percentage of transplants and of population between the ages of 20-34, the website says. Lexington also had the lowest costs of living among the top 10 on the list.

Kentucky cities make list for “most affordable” A social media website called MyLife says Lexington ranks number 3 in a list of best cities for starting a new life. The study looked at 100 cities and compared five pieces of data - unemployment rate, average income, average rent, percentage of transplants and percentage of 20- 34-year-olds. The two most important factors in determining the top ten were percentage of transplants and of population between the ages of 20-34, the website says. Lexington also had the lowest costs of living among the top 10 on the l

Bardstown named one of America’s Best Small Towns Fodor’s Travel compiled a list of places that highlight some of the best places in the country you don’t hear about every day. They focus on destinations with populations under 30,000 that have a vibrancy of their own and year-round appeal with a list made up of detour-worthy towns all over the U.S. that have strong cultural offerings or great outdoor adventures, in addition to standout dining and lodging options. Bardstown landed on this list of the top 10 towns in the country. For a stopover in Kentucky bourbon country, it’s hard to beat Bardstown, where it’s easy to be charmed by the Georgian architecture and local hospitality. With a nostalgia-inducing Main Street, featuring a historic courthouse and an old-fashioned soda fountain, Kentucky’s second-oldest town retains its historic splendor. Here you’ ll find My Old Kentucky Home State Park, said to have inspired Stephen Foster when he penned the state song of the same name. The downtown area has been recognized by the National Register of Historic Places, and a Civil War Museum, Museum of Whiskey, and a packed events calendar round out the offerings in

Check it off the bucket list In the USA Today feature, “10 best bucket-list” for the monuments and landmarks piece, photographer Blaine Harrington III named Kentucky’s horse country and Lexington to his list. His description is as follows: While the region’s famed bluegrass isn’t exactly blue, it still makes for unforgettable scenery, Harrington says. “In spring it’s very green and you contrast that with the horses in the fields, and the fence lines going hill and dale. It’s beautiful country and (has) such a deep heritage.” The limestone-rich soil is said to be responsible for the distinctive taste of Kentucky bourbon and for the speed and strength of its thoroughbred racehorses. You can see farms by driving country roads outside the city. Guided tours are also available. Bucket list tip: Time a spring or fall visit to see thoroughbreds in action at Keeneland Race Course, a National Historic Landmark.

Kentucky tops list of “cheapest state to live” CNBC recently reported its cheapest state to live in 2014 and Kentucky topped the list as the least expensive. The same report in 2013 had Kentucky ranked third. The report used average price data based on the Council for Community and Economic Research (C2ER) Cost of Living Index.

Bardstown, named the Most Beautiful Small Town in America in 2012. Though a visit to the several distilleries in the area (including Jim Beam and Maker’s Mark) will likely top your list of things to do, don’t leave town without stopping into Old Tabbott Tavern, in continuous operation since 1779.

Don’t forget about Lexington The Huffington Post Travel section mentioned Lexington in its “9 Southern Towns You’re Forgetting About But Shouldn’t” article. The place, listed in no particular order, says this about Lexington: Horses, bourbon and Kentucky basketball are the names of the game in this town. And that’s just fine by them. If you want a dose of history, head over to Ashland, the Italianate estate of Henry Clay, or the Mary Todd Lincoln house.

FALL 2014 KENTUCKY REALTOR® 23

By the Numbers

86 percent Based on a study by Flurry, a mobile data firm, mobile apps now account for this percent of the average users’ time on their mobile devices. Just 14 percent of mobile users’ time was spent using a Web browser. Gaming apps accounted for 32 percent of time users spent on mobile devices while social media apps accounted for 28 percent of users’ time.

According to NAR, the percent of home shoppers who use a mobile device during their search. Furthermore, 68 percent of them contacted a real estate professional based on a mobile search and 21 percent of them found a listing agent based on their mobile search.

89%

$68K

The average amount of economic activity generated by one home sale. This activity takes the form of things like moving expenses, home furnishing purchases, landscaping, insurance and more. Real estate and related industries account for about 18 percent of the U.S. Gross Domestic Product.

36.2%

The home ownership rate in the first quarter of 2014 for Americans 35 and under fell to this percent, dropping from 36.8 percent in 2013. Broken down even further, Americans in the 25-29 age group had the biggest decline in home ownership rates at 33.3 percent, followed by 47.5 percent for the 30-34 age group. In comparison, home ownership for all age groups has fallen to 64.8 percent, the lowest level since 1995.

64.7 PERCENT The portion of Americans who own the home they live in dropped onetenth of a percentage point in the second quarter, to 64.7% - the lowest level in 19 years. Homeownership peaked at 69.2% in 2004, and the 4.5 point drop since then is the biggest decline on record.

2,598

The average size of home built in 2013, an all-time high according to the Census Bureau. In 2003, the average size was 2,330.

$1,410 vs $848

600,000 67%

Real estate brokers in the last 12 months spent a median of $1,410 on technology for their real estate business, up from $1,122 in 2012, while agents spent a median of $848, up slightly from $822 in 2012 according to the 2013-2014 REALTOR® Technology Survey.

Single-family homebuilding is at its lowest rate in decades, as only this number of single-family homes were built in 2013, down from 1.7 million in 2005.

12.1%

The nation’s urban population increased by this percent between 2000 and 2010. According to the Census, urban areas accounted for 83% of the U.S. population in 2012.

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According to Realtor.com, the percent of consumers who plan to renovate within the next six months and some 32% will spend over $10,000 on renovations.

$325

Amount the average buyer could save per year on a home loan under a new government program now in a pilot stage. The Federal Housing Agency is testing its new Homeowners Armed with Knowledge (HAWK) program, which offers discounts on FHA mortgage insurance premiums to first-time home buyers as long as they complete housing counseling and stay current on their loans.

Housing Stats

Streak ends but home sales are moving forward with an increase of 6 percent.

For 34 consecutive months, Kentucky saw total home sales increase each month compared to the same month the previous year, with 21 of those months showing double digit gains. The streak ended in May when only 69 less houses were sold than in May 2013 (4,332 vs 4,401). This 2 percent decrease didn’t last long as sales picked back up in June

In the second quarter of the year, homes sold finished up 3 percent compared to the second quarter of 2013 (12,761 vs 12,346). This helped complete a strong first half of the year, January through June, where total homes sold were 21,490 versus 20,869 for the same period in 2013, an increase of 3 percent.

1st Half 2014 vs 1stvs Half1st 2013half 2013 1st half 2014 Housing Statistics

Board/Association

# Sold 2014

# Sold 2013

Sold %

Median Price 2014

Median Price 2013

Median Price %

Region One Henderson-Audubon Board

184

193

-5%

Hopkinsville-Christian Board

200

164

114450

101725

13%

Kentucky-Barkley Lakes Board

116

126

22%

93200

104675

-11%

-8%

95575

69750

Madisonville-Hopkins Board

190

37%

185

105000

88975

Mayfield-Graves Board

18%

189

157

20%

70750

69175

Murray Calloway County Board

124

129

-4%

107250

120250

-11%

Greater Owensboro Board

567

591

-4%

109500

104963

Paducah Board

327

320

129000

131375

-2%

Pennyrile Board

132

119

11%

123700

105000

18%

Central Kentucky Association

381

339

12%

80250

96946

-17%

Heart of Kentucky Association

862

883

-2%

116075

123725

-6%

Old Kentucky Home Board

261

268

-3%

112500

117490

-4%

REALTOR® Association of SKY

882

824

127500

132375

-4%

-13%

87750

69853

26%

Shelbyville Board

284

269

154500

139500

11%

South Central Kentucky Association

123

130

-5%

108375

98375

10%

7049

6823

134580

137500

-2%

4587

4559

140000

145375

-4%

2772

2682

130880

132225

-1%

Ashland Area Board

385

372

105875

99875

Cave Run Association

101

102

-1%

94625

75850

25%

Cumberland Valley Board

335

287

17%

64775

60875

Eastern Kentucky Association

225

201

12%

98000

93500

Madison County Board

639

544

17%

124000

122125

-8%

81000

409

417

-2%

93100

83523

11%

21490

20869

110000

107000

Region Two

Russellville-Logan Board

Region Three Greater Louisville Association Region Four Lexington Bluegrass Association Region Five Northern Kentucky Association Region Six

Pioneer Trace Board Somerset-Lake Cumberland Board Grand Total

“The weather has been somewhat unpredictable up to this point but hasn’t seemed to negatively impact home sales so far,” stated Ron Hughes, president of the Kentucky Association of REALTORS® (KAR). “The biggest driver for home sales starting this year has likely been growth in the job market, a perceived improvement in the overall economy and a higher inventory trend.” Home prices in the state have risen slightly over the first six months of the year to a median of $110,000 compared to $107,000 over the same period last year. In the first quarter of 2014, the median home price dropped slightly from $104,725 in 2013 to $101,000 in 2014 – a 4 percent decrease. The second quarter of the year saw a complete reversal with the median price up 8 percent - $119,700 versus $111,000 in 2013. The national picture is showing that existing home sales hit their highest annual pace of the year in July and that distressed sales continued to decline, both important measures to a healthy market going forward. Lawrence Yun, NAR’s chief economist, says that in coming years, due to changes in monetary policy, that mortgage rates will inevitably rise. But, for now, people should take advantage of low interest rates and comfortable market conditions. “It’s been said many times before, that Kentucky has the ideal housing market – affordable prices and steady property value increases over time,” said Hughes. “For almost three years (34 out of the previous 35 months) dating back to July 2011, home sales in Kentucky have increased monthly compared to the same month in the previous year. Add in all the other positive factors that exist currently, such as a better selection of property and the low mortgage rates, and you can’t go wrong if you are in a position to buy and do it wisely.”

Note: Totals don't include June figures for KY Barkley Lakes Board and Murray Calloway Co.

FALL 2014 KENTUCKY REALTOR® 25

Community Profile

Interesting and mostly true, Kentucky facts 1. Starters in the Kentucky Derby, the oldest continuously held horse

race, have had names beginning with every letter of the alphabet except for “X”.

13. Martin van Buren Bates, a captain in the 7th Kentucky Cavalry, was so tall (about 7’ 9”) that his feet were said to drag on the ground when he sat in the saddle. After the war he achieved the nearly impossible - he met (and married) a woman almost as tall as himself (Anna Haining, 7’ 5.5”).

Man o’ War, one of the most famous horses ever born in Kentucky, never actually ran a race in the state.

14. Richmond, KY could have been a contender - in fact, it was

3. Thunder Over

restaurant in Louisville claims to have invented the cheeseburger in 1934, although a Denver drive-in called Humpty Dumpty’s patented it a year later.

Louisville, the Derby festivities’ opening ceremony, has one of the world’s largest fireworks display.

4. A typical Derby crowd guzzles 120,000 mint juleps and drains 7,000 liters of bourbon.

5. Internet lore that would have you believe Bourbon County is among the state’s 37 dry counties is actually false.

6. Speaking of Bourbon, this beverage takes its name from Bourbon County, where it was first distilled.

7. In 1888, “Honest Dick” Tate, the state treasurer, embezzled $247,000 and fled the state.

8. Frederick Vinson, who later became the 13th Chief Justice of the

almost chosen to be the nation’s capital, but it lost out to Washington, D.C. due to lack of nearby seaports.

15. Kaelin’s

16. And what goes better with a cheeseburger than a Pepsi? Pikeville, KY leads the nation in per-capita Pepsi consumption.

17. Unlike Uncle Ben, Aunt Jemima, and Betty Crocker, Colonel

Sanders really did exist, and he developed his “secret recipe” for fried chicken in Corbin, KY.

18. Duncan Hines, of cake mix fame, was the real deal too, and he hailed from Bowling Green.

United States, began life in a Louisa County jailhouse.

19. Bowling

Green is also the birthplace of all little red Corvettes (as well as the rest of the colors they come in).

9. Kentucky treasurer “Honest Dick” Tate, at least, provided us with a wee bit of historical irony, absconding in 1888 with a cool quarter million from the state treasury.

10. Kentucky has the only memorial to Union soldiers killed during the Civil War to be erected south of the Ohio River. It’s located in Vanceburg and pays tribute to 107 local boys who gave their lives fighting for the North.

11. To this

day, Kentucky’s governors must swear an oath before taking office that they have never fought a duel with deadly weapons.

12. Frankfort was the only Union state capital to be occupied by Confederate troops.

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20. Post-It notes are produced nowhere else but Cynthiana, but the exact number manufactured each year is a closely guarded secret.

21. Mammoth Cave is the longest cave system in the world, and also the U.S.’s second-oldest tourist attraction, right behind Niagara Falls.

22. Cumberland Falls in the Daniel Boone National Forest is one of the few places on earth you might be able to see a moonbow.

23. The nation’s first commercial oil well was actually not in Texas, but was

drilled in 1819 along the banks of the Cumberland River in McCreary County.

24. The melody of the song “Happy Birthday” was composed in 1893 by Patty and Mildred Hill, two Louisville sisters.

25. Mother’s Day also originated in Kentucky, when Henderson

schoolteacher Mary Towles Sasseen created it to honor her own mama.

26. The Hatfields and McCoys were real families who carried on a real

feud for a quarter century after the Civil War. While Devil Anse and Co. were West Virginia boys, the McCoys were all from Pike County.

Haha, no, it’s gold, of course—about $6 billion and change.

37.

Middlesboro is the only U.S. city built inside a meteor crater.

38. Middlesboro is also the home of the Coal House, which was

constructed from 42 tons of bituminous coal and today houses Bell County’s Chamber of Commerce.

39. High Bridge, towering

275 feet over the Kentucky River in Jessamine County, is said to be the nation’s tallest railroad bridge spanning navigable waters.

40. Bibb lettuce was developed by (and named for) John Bibb of Frankfort. 41. The world’s first enamel bathtub

was manufactured in Louisville in 1856.

42. Traffic lights were invented by Garrett 27. Washington, KY was the first town to be named after numero uno George, back in 1780 when he was actually still president.

28. Postlethwait’s Tavern in Lexington hosted the nation’s first performance of a Beethoven Symphony (#1, naturally) in 1817.

Morgan, a former slave from Paris, KY.

43. The radio was actually invented by

Murray, KY’s own Nathan B. Stubblefield in 1892, three years before that copycat Marconi jumped in and claimed the patent.

44. Thomas Edison really lit things up at

29. Saloon-smashing, alcohol suppressing crusader Carrie Nation was

the 1893 Southern Exposition in Louisville, introducing the public to the electric light bulb.

born in Garrard County.

30. Another Kentucky notable, Zerelda James (mom of outlaws Frank and Jesse) is rumored to have been born in a saloon - the Offutt-Cole Tavern, which still stands today at the intersection of Old Frankfort Pike and US 62 near Midway.

45. Louisville was founded by George

Rogers Clark, older brother of the Clark whose name is usually preceded by “Lewis and...”

31. In Kentucky, it’s illegal to release a feral hog into the wild.

46. Old Louisville is America’s largest

32. More than half of all U.S. troops killed in the War of 1812 were Kentuckians.

33. One of the first U.S. casualties of WWI was also Kentucky-born:

Victorian preservation district.

47. Students at Lexington’s Transylvania University enter a lottery for

Corporal James Bethel Gresham from McLean County.

the chance to spend the night in the on-campus tomb of a 19th-century botany professor.

34. Mark Spitz’s star-spangled Speedos, the hit of the 1972 Olympics,

48. Kentucky has more miles of running water than any other state in

were the height of Paris couture - Paris, KY, that is.

the lower 48.

35. Covington’s Cathedral Basilica of the Assumption boasts the

49. Kentucky may not be the largest state (in fact, it’s the 14th-smallest),

world’s largest hand-blown stained glass window, a 67’ x 24’ depiction of the epically exciting Council of Ephesus.

36. Fort Knox holds the

world’s largest store of Jello.

but it’s bordered by a whopping seven neighbors: Virginia, West Virginia, Tennessee, Indiana, Ohio, Illinois and Missouri.

50. The Lost Mountain coal mine, in rural Breathitt County, has

been abandoned for over 40 years, but it isn’t hard to find - just look for the plumes of billowing smoke. Don’t bother calling 9-1-1, though - it seems these underground coal fires are nearly impossible to put out.

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CEO Message

What type of REALTOR® do you want to be? By Joe McClary, CEO, Kentucky Association of REALTORS®

One of the joys of my position as CEO is to sift through volumes of books, articles, blogs and other resources about the real estate industry looking for the most relevant and compelling information to share with our members. In April 2014, Real Trends published a resource called Game Changers – The Unfounded Fears and Future Prosperity of the Residential Real Estate Industry. One of first attention grabbing statistics was that in recent survey of 1,004 consumers, 49% of respondents below the age of 33 years say, “Agent services are less valuable due to the Internet information available.” (Real Trends, p. 4) I do not believe this comes as a surprise to many of our members. However, the statistic is one that compels REALTORS® to identify where their value lies in a 21st century economy. I remember growing up many years ago, my mother practicing real estate part time. She helped find property and showed it to prospective buyers. She essentially was the “facilitator” of a transaction. Her experience, education and the market did not require her to do anything else. Today, the game has changed. Expectations have risen. Technology has made information, that agents like my mom used to provide, readily available to clients. Today, research and insight for industry experts is not ambiguous about how agents bring value. Value is realized when agents leverage their experience and education to interpret the information into something useful for the client. As Real Trends identifies, this illustrates the difference between a real estate transaction “facilitator” and a “counselor.” “Facilitators have access to technologies that enable easier deal navigation for the clients, but they have not adopted them as extensively as high-volume agents have. Facilitators lack transaction experience and are not as skilled in the details of either the market or the transaction. Generally, facilitators have far less experience overall. Facilitators are not in a position to offer as much in the way of true guidance to their clients and customers.” (Real Trends, p. 3) In contrast, “Counselors provide intense focus on activities that produce more business, quickly adopt technology that will enable better business processes, have expertise and knowledge in housing

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markets and mastery of the complexities of the buying and selling transaction.” (Real Trends, p. 2) Consider what one owner of a large independent firm with more than $4 billion in revenue says, “Maybe 60% of real estate sales people are Facilitators; they do not have the skill set, because they have not done enough transactions. They have not moved their game up to a highenough level to be a Counselor in the future. They just present offers and show properties. Ten years ago – that was all you needed. Now, the clients have all the information and you need to be an interpreter, not a provider. All that shifts to the counseling side of things.” (Real Trends, p. 7) So how does this translate to KAR and our local associations? As many of you know, NAR’s new core standards for local associations of REALTORS® are helping raise standards for local and state associations to better ensure the REALTOR® brand is protected. In essence, the core standards are about ensuring REALTORS® provide a higher level of service and that the public knows REALTORS® are likely to be counselors, not just facilitators. At the Kentucky Association of REALTORS®, our mission is to provide essential resources for agents that want to be counselors of real estate. Conferences, training opportunities, resources, communications, governmental advocacy and networking opportunities highlight the value of what KAR and your local association offers members. As an example, did you know that the 2014 convention has more educational opportunities than any other KAR convention in our recorded history? The education received in Bowling Green was planned to strengthen your skills and reinforce your position as an exceptional REALTOR®. It is the largest real estate event in Kentucky and will only continue to get better. If you haven’t already, take time for a self-evaluation to see where you currently stand and decide what type of REALTOR® you want to be as you carve your path in real estate.

Up to Code

How the Professional Standards process works in Kentucky The professionalism, knowledge and commitment REALTORS® bring to clients and customers ensures they receive a high level of service regardless of the real estate discipline practiced, from residential brokerage, property management, auctions, to international real estate. REALTORS® should expect the same standards from their state and local REALTOR® associations. By delegating the professional standards process to the Kentucky Association of REALTORS® (KAR), a local association has satisfied the requirement that every association maintain a viable professional standards process mandated by the new Organizational Alignment Core Standards (visit bit.ly/narcorestandards to read more) of the National Association of REALTORS® (NAR). In addition to administering the process, KAR is responsible for training the volunteers who administer and enforce the Code. KAR holds three training sessions annually around the state to ensure that our pool of 150 volunteers can attend a training. Through KAR, every local association provides mediation services to members, as required by NAR. Training for the locally appointed mediators is also provided by KAR. Let’s review the work done by KAR’s volunteers and explore the ways that each person plays a part in enforcement of the REALTOR® Code of Ethics.

Work of the KAR Grievance Committee A three member panel of the Grievance Committee, plus one alternate, determines whether a complaint merits further consideration at a hearing. During 2013, Grievance Committee members reviewed 23 cases via conference call. This format gives REALTORS® the opportunity to volunteer, yet spend minimal time away from the office. Approximately 40 volunteers commit to serving on the Grievance Committee annually. If needed, the Grievance Committee may request additional information from the complainant. The committee will review the case again once the requested information is received by KAR. If the Committee dismisses the complaint, the reason is stated on the Grievance Committee Report Form and the complainant has the right to appeal the dismissal to the Appeals Panel. If the Appeals Panel overturns the dismissal, it will be sent to the Professional Standards Committee for a hearing.

Work of the Hearing Panel Members All Arbitration and Ethics hearings are heard by a three member panel, plus one alternate if they choose to attend the hearing. In 2013, KAR drew from a pool of 80 potential hearing panel volunteers from across the state. Parties have the opportunity to challenge any potential panel member. The hearing provides an opportunity for the Complainant and the Respondent to explain “his or her side of the story” by presenting

For all Ethics Complaints filed in Kentucky last year, the most commonly cited Articles of the Code of Ethics and Standards of Practice were Article 1 (cited 13 times), Article 2 (cited 11 times), Article 12 (cited 9 times), Article 9 (cited 5 times) and Article 11 (cited 4 times). testimony and witnesses, if any. Once all of the facts have been presented, the parties are dismissed and a Hearing Panel determines whether the Code of Ethics has been violated and if so, what discipline will be imposed. At this point, the Findings of Facts of the Ethics Hearing Panel is written and included with the Decision of Ethics Hearing Panel. If the hearing is an Arbitration Hearing, the panel members will determine the disposition of the funds in dispute, sign and date the Award of Arbitrators.

Work of the KAR Appeals Panel The five member KAR Appeals Panel, plus an alternate, may review cases at several stages in the Professional Standards process and is the body that hears all appeals. The Appeals Panel is also responsible for ratifying the Decisions of Ethics Hearing Panel. For 2013, the total number of REALTOR® volunteers eligible to serve on an Appeals Panel was 30. Most of the work of Appeals Panel member is handled via mail or conference call. When reviewing the Decision of Ethics Hearing Panel, Appeals Panel members specifically look for any possible misapplication or misinterpretation of an Article(s) of the Code of Ethics, any procedural deficiency or any lack of procedural due process. Finally, Appeals Panelists evaluate whether the discipline recommended by the Hearing Panel is commensurate with the ethics violation found to have occurred.

Work of KAR Mediators KAR’s Board of Directors adopted a policy that requires REALTORS® to mediate otherwise arbitrable disputes unless both parties advise KAR, in writing, that they choose not to mediate. KAR has a pool of 21 mediators who have been appointed by their local associations and been trained by KAR. In 2013, three mediation conferences were held. In two of the three mediation conferences, the parties reached an agreement to their dispute and the arbitration was terminated.

To review the complete 2013 Professional Standards Case Statistics report, please visit bit.ly/2013prostand. If you have any questions about the professional standards process, please contact Julie Johnson, Director of Professional Standards, at jjohnson@kar.com or call 800.264.2185.

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A Day in the Life of...

A Day in the Life of… REALTORS® featured on TLC’s My First Home Carrie King & Judy Gordon Agents with Kentucky Select Properties Louisville, KY How many years have you been in real estate?

Carrie King: 8 years Judy Gordon: Almost 10 years You were recently selected to appear on TLC’s my first home, what made you want to apply to be on the show and what was it like to be selected?

did take pull the dramatic license card even though real estate is dramatic enough already. For first time buyers, I wish they would show more of the financing aspect. And maybe emphasize more concrete do’s and don’ts.

CK: I received an email in July

2013 from the producers looking for participants in the area. I love the TV show “Flipping Out” featuring Jeff Lewis so I recognized the producer right away because they produce his show. I responded I was interested in more information and within 30 minutes my phone was ringing and it was one of the producers. After a brief conversation, she sent me the information I needed to tape the audition video. It was literally that quick!

What are a few secrets of the show that the viewers may not realize when they are watching?

JG: I am a fan of many of the real

Would you agree to do it again?

CK: That the episode was filmed over 7 days. Essentially, we are recreating the buyers’ experience. There were 20+ wardrobe changes!

JG: Also, you don’t know how your

episode is going to turn out until it airs. That was surprising and stressful all at the same time.

estate based television shows, so I thought it would be fun! I told my brokers that it might not be real but I could possibly be on a real estate reality show. Then I found out Carrie King from my office had also been cast for an episode. I was so happy and proud that we were the two agents chosen in Kentucky - both in the same company! Going “Behind the scenes” how does the show operate and does it paint a true picture of the home buying process?

CK: Yes, well sorta. You actually film the show in reverse. By the time

CK: Yes! JG: Even though I was really pleased

with the end result, waiting for the show to air was stressful for me because I felt like my reputation, my company’s reputation and the impression viewers were going to have of Louisville were on the line. I think I would say no unless I had more control. Have you seen any direct benefits from appearing on the show?

we shot the show, my first time buyers had already found their perfect home.

CK: Yes, these real estate shows have a true following. Friends, family,

JG: People are surprised to find out you shoot the last scene first. So,

JG: Yes, mainly through referrals and connecting with past clients who

our first day of filming was my buyer’s house warming party. Also, they

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clients and potential clients have all reached out to say “I saw you on TV. are fans of real estate shows.

What is your background and how did you find your way into real estate?

What is the craziest experience you have encountered while showing a property?

CK: Before real estate I was a stylist for many years. I would watch

CK: Early on, I accidentally let someone else’s cat into a property I was

the paper for open houses of my favorite homes and go on Sundays. I would always see how people decorated and designed their home and I loved walking through them. I was one of the people the industry calls a “tire kicker.” I had a life-long friend who was an agent and I thought “I can do this, I want to do this” and it was off to real estate school. My background in styling has helped me to get listings. I have a vision on how homes should/could look and I can share that vision with buyers and sellers which has been a tremendous help in my business.

JG: I worked in the restaurant business when my children were younger and then moved into property management. I use my restaurant background for creating epic wine & cheese and open house luncheons. And, of course, a property management background is super helpful. But real estate runs in my blood. My father and grandfather built homes together, my brothers are builders and my sister is a broker. Being in different generations, what traits do you have that help in your business?

CK: (GenX) I am pretty tech savvy. I am all over social media which has helped my business tremendously. I try to think outside the box. Plus, I associate myself with the best - the best photographer, the best stager, the best mortgage broker, the best closing attorney - I can’t take all the credit. Surrounding yourself with the best has made me look good as well!

JG: (Baby Boomer) I was fortunate to grow up in a time that was

empowering for women and accepting of change. I try to empower my clients with information and prepare them for all the things they can expect when buying or selling. I emphasize how important it is to do all the prep work and then go with the flow. That’s a tough combination but the more prepared you are, the less stressful the process.

showing. There was a cat at the front door crying to come in. The agent notes said “do not let cat out.” I thought it was the seller’s cat so I let it in. Later, I got a call from the listing agent asking if I let the cat in. I told her that, yes, I let the cat in but, as it turned out, it was not their cat. Apparently it took hours to get the wrong cat out of the house - lesson learned. I now let no one in - people, dogs, cats - no one is coming in that house while I am there!

JG: Due to an error in scheduling, my client and I walked into the

master bedroom where the seller was in bed asleep. We just tiptoed out of the house and locked the door. I called the listing agent to let her know what had happened. I found out the seller didn’t wake up until later in the day and thought he had a bad “my house is on the market and I slept through a showing” dream. Outside of your career, what is your favorite pastime?

CK: I love to play tennis. I also love walking my dogs. I may be a

better dog walker then tennis player but the tennis skirts sure are cute. I actually love doing both.

JG: I enjoy spending time with my family and friends especially around water. When I am not working in the summer, you can find me at Lakeside Swim Club with my granddaughters. What is the best advice you have ever received?

CK: Fake it until you make it. Thankfully, I had some success early on and didn’t have to fake it for long.

JG: Don’t be afraid to work hard and don’t worry about what anyone else is doing.

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