Kyrealtorfall15

Kentucky

REALTOR FALL 2015

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A publication of the Kentucky Association of REALTORS 速

Cover photo by AP Imagery/Adam Paris

Convention Highlights: Elections, Awards and More...

In this issue:

7 Deadly Sins of Real Estate 5 Reasons to Use an iPad in Business

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FALL 2015 KENTUCKY REALTOR速 1

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Contents

Volume 8, Number 2, FALL 2015

IN THIS ISSUE

Five Reasons to Use an iPad 7 in Your Business Seven Deadly Sins of Real Estate 10

KAR Convention Recap 18

Apublication of the Kentucky Association of REALTORS® President Norman Jones Eastern Kentucky Association Treasurer Mike Becker Northern Kentucky Association Communications/Education Director Hunt Cooper hcooper@kar.com

Address letters and inquiries to: Kentucky REALTOR® 2801 Palumbo Drive, Suite 202 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 © 2015. Kentucky Association of REALTORS®, Inc. All rights reserved.

Should Sellers Disclose Drug Labs?

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REGULAR FEATURES

KAR News 4

President’s Message 5

Tools You Can Use 6 Education

9

Legislative Update

14

Local Association News

22

By the Numbers

24

Housing Stats

25

Up to Code

29

A Day in the Life of...

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KAR News Want to serve on a KAR committee in 2016?

2016 KAR Leadership Conference December 2 & 3, 2015 Hyatt Regency Lexington, KY If you are jumping into REALTOR® Association leadership at the local or state level or serving at the state level, consider attending the KAR Leadership Conference. This meeting will give attendees the opportunity to learn the various aspects of volunteer leadership including roles and responsibilities, budgeting, committees and a host of other topics. You can also build your network with other leaders across the state. The meeting is open and free to the following members: • Local association presidents and president-elects • KAR board of directors and delegate body • KAR committee chairs and vice chairs

Members who want to be considered for a committee with KAR can now sign up online. The new website feature allows members to log in and select the committees they want to be considered for. Visit kar.com and look under Members for the committee sign-up link (listed as 2016 Workgroup Signup). Once there, it’s a drag and drop process to list the committees in order of interest. The deadline to sign-up for consideration is Friday, November 13. Before the end of the year, appointments will be made and notifications will be sent to each member who is selected for a 2016 committee. It’s the people who serve and give back to the association that help push real estate forward in Kentucky.

RPR Webinars Realtors Property Resource® (RPR), which gives exclusive access to the most powerful data platform available to members of the REALTOR® family, is offering free educational webinars exclusively to KAR members. To register, visit kar.com > Members > Realtors Property Resource .

• RPAC Trustees

10 Ways to Earn More Business than Your Competition

• Local association executives and secretaries

November 03, 2015

• KREEF Trustees

To register or to access hotel information and book a room, visit kar.com > Meetings.

RPR is more than a comprehensive database. It provides tools and resources to help expand your business. During this session, you’ll learn how to use RPR to improve prospecting and farming strategies, run accurate comp analyses, identify distressed properties and their impact on neighborhoods, set industry standard values on home investment. You’ll also get a quick overview of RPR Mobile™. Start impressing clients - register for this class today.

Our Affiliate Partners

Contact GEICO for a free quote on auto insurance to see how much you could be saving. Mention your KAR affiliation, you could qualify for an exclusive member savings opportunity on auto, homeowners, renters, motorcycle insurance and more!

KAR members can save up to 30 percent on UPS shipping. Members currently enrolled in the UPS Savings Program must re-enroll to take advantage of this new exclusive offer.

Provided to you and your family & friends to help lower your prescription drug costs. Your FREE Prescription Drug Card can save you up to 75 percent (discounts average roughly 30 percent) at more than 54,000 national and regional pharmacies.

KAR members can now join the UKFCU and enjoy all the benefits offered like free online banking and bill pay, great rates on mortgages and other savings and loans and over 30,000 free ATMs nationwide. With many diff­ erent ‑financial products and services, from checking and savings accounts to auto loans and money market accounts, UKFCU can meet your needs and serve you for life. And, you receive $50 just for joining.

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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.

KAR members can now save over 40% on tickets to Kings Island, a 364-acre amusement park located 24 miles northeast of Cincinnati in Mason, Ohio that has won Amusement Today’s Golden Ticket Award for having the “Best Kids’ Area” in the world for fourteen consecutive years (2001–2014). The park features over 80 rides, including 14 roller coasters and a 33-acre water park.

President’s Message

We are family

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ost everyone heard about the flooding that occurred in the eastern part of the state a few months ago and the numerous homes destroyed and the lives lost. This unfortunate and devastating event was not only in my neck of the woods but affected many of my family and friends as well as dozens of our own REALTOR® members.

So when something bad happens to our community and the people in it, whether it be a flood or some other catastrophe, REALTORS® take it personally and do something about it. My hope is that in all areas of the state, communities continue to be supported by those of us in real estate and we lend a helping hand to those who need it. Because above all else, we are all family.

Being involved in real estate, the areas involved were places many of us knew intimately, where we helped clients buy and sell starter homes, move up homes and, for some, forever homes. The area consists of very close knit communities and we knew people by name and have attended cookouts, church functions and wedding ceremonies in many of the backyards.

Speaking of family, one of the best ways to be successful in this business is to network with colleagues around the state. KAR hosts several meetings throughout the year and all of them, except Convention, are free for members to attend. With hundreds in attendance at each, not only are these great opportunities to build your business contacts and referrals but also to make a difference in your industry. We just concluded the Annual Convention in Owensboro and I can truly say it was a great time but, more importantly, it strengthened my bond with so many of our members from across the state. I encourage every member to attend one or more of the KAR meetings coming up in the near future.

Through it all, with donations pouring in from all over, we, as a board, came together to contribute to the relief efforts. But that’s not all. In addition to the financial contributions and material donations, we also provided (and continue to provide) emotional support where it was, and is, needed – we hug our neighbors, we help locate the resources they desperately need to find food and shelter and we stand by their side. We are, after all, REALTORS®.

That’s what we do. We are entrenched into the fabric of our communities. We serve on charitable boards, we hold elected office, we volunteer to help on the PTA, belong to the chamber and the list goes on.

When disaster strikes, in whatever form it may take, REALTORS® step up to the plate because we understand the importance of strong communities. We live it every day. We see firsthand the issues that people face and the struggles that families go through.

And when a community comes together, big things can happen.

That’s why it is so important that we continue to wrap our arms around others and do the work that needs to be done.

Yes, we make a living helping people realize their dreams of home ownership but it’s really more than that. When we dig a little deeper, for many of us, we stay in this profession because it’s knowing that you have helped give a family a better life, overcome an obstacle and start down a road of new and exciting memories.

I also want to take the time to thank everyone for their support over the past year. As president of this Association, I travel to many areas of the state and I see all the good work our family is doing. I also know, even as I accumulate the miles on the roads that connect all of us, that our industry will be facing many challenges in the coming years. It is through our continued persistence to making our industry great now that we will overcome any obstacles we encounter as we navigate the future.

Norman Jones, 2015 KAR President

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Tools You Can Use What are the unmet housing desires of movers?

What Millenials want from real estate agents

The Demand Institute’s research reveals several unmet housing-related desires – gaps between what Americans say they have currently and what they say they want in their next home. The following are the top 10 housing desires, ranked according to the satisfaction gap i.e. what movers are likely searching for in their next home (and what you may want to emphasize if your listing has any of these features):

Millennials, aka Gen Y, are the largest home buying generation in the U.S., making up 32 percent of all homebuyers. This is the population segment defined as anyone born between the years 1980 and 1995. And, according to the NAR Home Buyer and Seller Generational Trends report for 2015 (view the full report at bit.ly/2015gentrendsreport), this group is big on housing even if the current home sale data doesn’t reflect it. Here is what millennials say they want from real estate and their agent: • Despite what you may think, millennials are big into working with agents, more than any other generation. 90% of millennial homebuyers use an agent.

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Very energy efficient with lower monthly utility costs

2. Requires little or no renovation or improvements 3.

Has an updated kitchen with modern appliances and fixtures

4.

A home I can stay in as I get older

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Home is located in a safe neighborhood with low crime

6. Fits my budget, without requiring sacrifices 7.

Offers a lot of privacy from neighbors

8. Has a lot of storage space 9.

Has a good landlord that is responsive to maintenance requests

10. Is a good long-term investment

Most Popular New-Home Amenities in 2015 The top features that builders are most likely to include in a new home this year, according to a survey of builders conducted by the National Association of Home Builders, speak to improving organization and storage. Greater energy efficiency amenities also were ranked as important. The following were ranked as the most likely features and amenities to be included on an average single-family home in 2015: • Walk-in closet in master bedroom • Laundry room • Low-E windows • Great room (kitchen-family room-living room) • Energy-Star rated windows • Ceiling height on the first floor of 9 feet or more • 2-car garage • Programmable thermostat • Granite countertop in the kitchen • Central island in the kitchen • Bathroom linen closet • Front porch On the other hand, the features identified in the survey as the most unlikely to be included in new homes this year are: • Outdoor kitchen (cooking, refrigerators and sinks) • Laminate countertops in the kitchen • Outdoor fireplace • Sunroom • Two-story family room • Media room • Two-story foyer • Walking/jogging trails in the community • Whirlpool in the master bathroom • Carpeting as the flooring on the main level

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• 63% of millennial home sellers would use their agent again or recommend him or her to others, the lowest percentage of any generation. On the flip side, 70% of millennial homebuyers would hire their agent again or send a friend or family member to him or her, a lower proportion than buyers in any other generation.

• Approximately half of millennial homebuyers and sellers – 45% and 50%, respectively – found their agent through friends or relatives, a much higher proportion than other generations.

• It’s more important to millennials that agents communicate with them via text message than other generations, but a large percentage – 75% - also highly value phone calls.

• 58% used an iPhone and 32% used an Android device to search for homes on their smartphones and via mobile apps, more than any other generation.

• More millennial homebuyers used websites – 94% - for information in their home search than buyers from other generations. In addition, 51% found the home they purchased online, more than any other generation.

• 75% of millennial homebuyers rely on agents to help them understand the home buying process and 87% turned to agents for information.

• 26% rated honesty and trustworthiness as the most important factor they considered when choosing an agent while an agent’s reputation, at 21%, was the second most important.

• 84% felt their homes were a good financial investment with 42% stating that buying a home was a better investment than stocks.

Take the KAR Survey of the Month Each month, KAR is asking members to respond to a question about the real estate industry. The feedback received is used to gather insight on a topic trending in the industry.

The information will be used to develop articles, create education and is shared in newsletters, social media and the magazine. To see the latest question, visit kar.com/QOTM.

Technology

Five Reasons to Utilize an iPad in Your Business

by Juanita McDowell Do you want a competitive advantage for your real estate business? If used properly, an iPad can give you that edge over the competition by making the home buying process more interactive and seamless.

To appreciate an iPad’s full value in the life of a real estate agent, let’s first consider the fact that every potential buyer wants to find the perfect place to live. Agents know that the search involves more than just looking for a house. It’s about finding a place to grow a family, to make dreams manifest, to connect with a community, to retire and the list goes on.

An agent, occupying the driver’s seat of this process, recognizes the importance of a smooth ride, from the initial consultation to the closing.

This gives the client something to later brag about to family, co-workers and friends. Translation: a referral is waiting in the wings at the right time.

With the help of the iPad and a few key applications from the App Store, an agent can successfully steer around several bumps in the road. Let’s discuss five key ways that an iPad can be utilized by real estate agents.

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Increase Productivity

It’s hard enough to keep up with one client’s preferences, concerns and issues, so imagine managing several clients simultaneously without technology. The iPad with the Evernote app loaded is able to keep your productivity, memory and organization on point.

With Evernote you can create a digital filing cabinet, complete with notebooks and notes. Within each note you can type to-do lists, capture

photos, record conversations (“What did you think?”) and later add contracts, business cards and mortgage calculator screenshots. The best part: everything is completely searchable from your PC, iPad or smartphone.

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Manage Transactions

Using your iPad and apps, such as Cartavi from DocuSign, you can create a “Transaction Room” online and invite all relevant parties to join, including your buyer and seller, closing attorney and loan officer. One of the slickest features of this app is the ability to receive SMS and email alerts when someone views a document.

Work with Buyers and Sellers There are a few apps that you should consider to help you work with your buyers and sellers.

• Glympse (Free): You have arrived at the house but your client is lost. Use this app to give them a glimpse of your location.

Running late to a listing appointment? Send your potential client a glimpse of your location and your ETA if you desire.

• Homesnap (Free): Snap a picture of a home and get details and info instantly.

• Skitch (Free): The ideal sketch pad on your iPad and so much more.

Use it to create maps and write on images, among other features.

FALL 2015 KENTUCKY REALTOR® 7

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Improve Response Time

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Taking Care of the Small But Important Stuff

Time is everything when it comes to a real estate deal. Imagine this: an agent arrives at a hot new listing that she knows will not be on the market for any length of time. Her clients want the house.

The agent whips out her iPad and retrieves a contract from one of her favorite apps. Before they leave the house, the agent has submitted an offer. Before they drive away, the offer is accepted. With the aid of apps like PDF Expert and Dropbox you can pull this off.

Agents can use their iPads to easily handle small but critical matters. Saying “thank you” is important when someone gives you a referral or goes beyond the call of duty. Every now and then words are not enough. Apps like ThankYouPro allow you to express your gratitude by sending a sturdy “thank you” card right from your iPad or iPhone. The app is free but the cost of the card and mailing is $2.99. Now you can also add gift cards and other greeting cards.

Sure, there’s a boat-load of apps to consider, but you should not download apps too quickly.

Ask yourself if the app will honestly help you facilitate a task that you are currently doing or one that you need to do. Avoid what I call “the new app itch,” a condition that users catch when someone raves about an app.

Months later, you stare at the app icon and can barely remember what it does.

Instead, focus on keeping your business goals top of mind. This will motivate you to invest time in learning apps that are key to your success – apps that will save time, streamline your operation, lower costs and increase your overall profitability. As such you will always keep a leg up on your competition.

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Juanita began her real estate career as a loan officer. In less than a year she built a 30 million dollar team with one processor and one assistant. In 2009, she decided to add agent training to her marketing strategy and not long after, the demand for her training escalated.

In March 2010, Juanita sold her origination pipeline to another loan officer and became a full-time trainer and speaker. Today, her real estate school trains over a thousand agents a year in the area of technology, marketing, mortgage education, and social media.

Education Education history now accessible on kar.com

KREEF Scholarship Recipients

Members can now view their entire education history online through the KAR website. To do this, you must log-in to the site. From there, you can visit “My Profile,” the link is in the top right corner of the page or it can be found under “Members.” Once on this page, there are several options to choose from including your user profile, committees, meetings you have attended and communication preferences. Also included are your education records. Click the appropriate link and your education history will appear. Included is current year education courses attended along with the previous three years. The page will also tell you when your next

The KREEF Trustees award scholarships on an annual basis as a way to live up to its mission – to enhance real estate professionalism and knowledge by providing quality educational services and programs for the real estate industry and the public.

KREEF makes scholarships available to members who want to obtain the GRI designation as well as provide scholarships to Kentucky residents (members and non-members) who wish to pursue a career in real estate. Scholarship winners for 2015 were:

Pre-licensing course available online – it’s affordable and convenientwww.kreef.org > Pre-licensing

GRI Scholarship

In order to meet the needs of today’s student, KREEF is offering the entire 96 hour pre-licensing 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.

Chris Fox, Louisville

Online education: ready when you are 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.

Jamie Abell, Paducah

College Scholarship

GRI — Start on your designation journey today! www.kreef.org > GRI The program has been redesigned to meet the needs of today’s real estate professional including one day courses and a full year’s worth of CE per course. 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. Get started now on the most popular national designation in real estate. Bonus: these courses also count broker credit and the completed GRI program counts for ABR elective credit.

Deadline for 2015 CE: December 31 Don’t wait until it’s too late... take it online— www.kar.com/onlineed

Anna-Marie Hyatt, Lawrenceburg, Campbellsville University

Pre-license Scholarship

Horton Stull, Lexington

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Feature Article

Deadly Sins

By Leigh Brown I recently saw a Facebook post from a real estate agent mentioning that a consumer looked at 250 houses with eight different practitioners before finally making a purchase. You should have seen the comments on that post. You’d think that wretched consumer should be burned at the stake! What heresy!

How dare a consumer waste professionals’ time like that!

Excuse me. Why is everyone so sure the consumer is the bad guy here?

We all know some clients are more difficult to work with than others, but that doesn’t automatically put them at fault when things don’t work out between you. They might have moved on because you didn’t up your game enough.

There are seven deadly sins in real estate, offenses that could turn off any consumer. (Actually, I can think of many more sins, but we’re keeping it simple for now.) If you commit any of them, then you can blame yourself for the loss of a client. As real estate professionals, we can be amazing advocates for consumers, but there’s always room to improve. Start by absolving yourself of these shameful transgressions.

Sin No. 1: Abandonment You work your butt off to earn clients’ trust and win their business. They share intimate details with you, and you become their confidante. But after the sale, where do you go? Do you drop them like a hot potato? Cash the check and leave?

Don’t stop calling, texting, and e-mailing your clients after they had the nerve to — gasp! — actually buy a house. Check in every so often. See how the kids are adjusting or if there are any questions popping up that you can answer. Call them when the county tax office does a re-evaluation of their property to see if they have any concerns. Be a resource forever. My clients know that unless they beg off or die, they are going to hear from me forever.

Sin No. 2: Cherry-picking If you care about serving clients only in higher price points, you’re turning away a ton of potential business at the lower end - and future referrals. You should have learned this during the 2008–12 real estate bust. It was then that agents who insisted on only working the top end found out that when those price points dry up, it’s the cheap seats where folks continue to buy and sell.

Sure, it’s hard work to deal with a short sale or a nasty foreclosure, and trailer houses aren’t the most glamorous side of real estate. But last time I checked, that money spends, too, regardless of market conditions. The folks you helped when no one else would - who you treated with as much respect as any other client - often turn into the best referral bird dogs you can imagine.

Treat all price points well. It’s smart business. And if you’re so busy you can’t see straight, then set up referral partners in your own amazing real estate community, and make sure that every potential client is cared for.

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of Real Estate Sin No. 3: Not Asking Enough Questions Finding out how to best serve your client isn’t just about asking their price range and how many bedrooms and bathrooms they need. If you don’t know why they want to move and what their goals are for buying or selling, then you don’t know what’s really important to them. Ask enough questions to get them to tell you everything, and listen.

Any of you old-timers remember the immortal Howard Brinton?

He taught me to always go “three deep” with questions. Clients will usually spill the truth after you’ve asked the third question. If they answer with things that make you feel nervous about fair housing, you should have the resources available to direct them to the research they’re seeking. For example, if you can’t answer questions about school districts per your local laws, offer websites where your clients can do their own information gathering.

Ask. Ask. Ask. Y’all keep fussing about competition from online real estate portals. So ask questions and offer professional advice and expertise that buyers and sellers can’t find on the Internet.

Sin No. 4: Too Much Ego

It meant something in 1978 to be a “million-dollar agent,” I suppose. Back then, I was still just a strapping young thing, so it wouldn’t have made a difference to me. But for heaven’s sake, it means nothing now. In some markets today, a million bucks isn’t even a whole house. My second favorite phrase is “No. 1 agent.” No. 1 at what? And how many No. 1s are out there? Lots and lots, by my estimation.

Clients are coming to us armed with more knowledge and education than ever before, but they still crave professional guidance and advice in understanding the data sets surrounding local real estate.

How does your trumpeted-up marketing hailing yourself as the king or queen of real estate provide that for them? Instead of talking about ourselves, let’s focus on the consumer. Figure out what you can offer that helps them reach their goals - not yours - and start setting yourself apart. Need a starting point? Read Simon Sinek’s book, Start With Why.

Sin No. 5: Reluctance to Call I don’t know why it’s said that the two things people fear most are public speaking and death. I’m inclined to think picking up the phone has an even higher fear factor, since people use them almost exclusively to swipe and poke instead of talk. If I check any agent’s phone at any time, I bet I’ll see more incoming than outgoing calls.

How about actually dialing a number or answering the phone when it rings? Even the millennial generation wants to talk on the phone when it’s time. Vocal inflection makes a huge difference in the outcome of a conversation and can’t be replaced by text and e-mail.

By the way, when you get a call, you have to answer it quickly.

If you need help managing all those calls, set up a Google Voice number for your business (yes, it’s free!) so you can forward calls when you need some down time.

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Feature Article

Sin No. 6: Fluff and Puff You know you’ve giggled at the bad photos in your MLS the ones with neon-green grass or a sky that is an unreal (a.k.a.

Photoshopped) shade of blue. Or property descriptions like “diamond in the rough” (read: falling down), “charming” (overly decorated), or “cozy” (cramped).

We’ve taught the consumer not to trust us by using deceptive marketing. We keep going back to the same tired phrases that don’t realistically describe properties, and we use photos that are so doctored, they might as well be animations. If we want the general public to believe us, we need to use smart marketing words that are vivid but also accurate. Photos should be as flattering as possible, but they should also accurately depict a property. We need to do this for reasons beyond following the Code of Ethics or doing good business. It’s just the right thing to do.

Passion + Energy + Experience = Real Estate Rock Star. Yes, that is Leigh Brown, the keynote speaker for the 2015 KAR Convention & Expo in Owensboro on September 24 -26. When she walks into the room there is a spring to her step and a sparkle in her eye, but be prepared… she will definitely knock your socks off with her no-holds-barred approach to her presentations.

Leigh began her career in real estate in 2000 and quickly rose to the top of her game. In 2003 Leigh started her own RE/MAX franchise and it was then that her passion ignited. Since 2007 she has been recognized by RE/MAX as Platinum, Chairman and Diamond Club. In 2010, Leigh was inducted into the RE/MAX Hall of Fame, in 2011 she received the prestigious RE/MAX Lifetime Achievement award and in 2013 she was named the North Carolina CRS of the Year.

Sin No. 7: Inverted Priorities Getting a call or a text? Drop everything and answer it.

Supposed to have a date night? Reschedule it. Kids playing a ball game? Catch the next one. Church? Get there next week.

Is this what you’ll do for a deal? Too many real estate professionals who are amazing at their jobs and would walk across hot coals for their clients get life completely backwards. They’ll put everything - the most important things, such as family, worship, or themselves - on hold to catch a deal. But you know what happens when real estate becomes your 24/7 be-all and end-all? Burnout.

When you’re burned out, you just can’t do a great job for anyone. Your sharp wit is dulled, your follow-up is lackluster, and you can give the impression that you just don’t care anymore.

Make yourself and your family your most important clients.

Block time on your calendar for you and for them. Create a life environment that is healthy because when you are healthy, your client relationships will blossom and grow into more than you ever imagined.

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Broker Tools

Rural area agents cover all the bases for residential and commercial clients

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ometown real estate agents are quintessential multitaskers, ready and willing to do whatever it takes to meet the needs of their rural communities. Here at Realtors Property Resource® (RPR®), we recently heard an entertaining tale of a REALTOR®, working in a one-trafficlight town, who exemplifies that “do what it takes” spirit.

The story goes that the REALTOR® stood in the street outside a seller’s home to flag down a pickup truck. Frantic to conclude the final walk through with her buyers, the agent sifted through her purse, coming up with $48 as payment to convince the driver to remove a 200-pound, 1950s wet bar from the basement of the seller’s home. The unit had become a serious point of contention between buyer and seller, and the buyer refused to sign off on the walk through until the behemoth bar was removed. The driver agreed, but not until the agent and buyer helped lift the bar onto the truck, which they did, and then, happy and sweat-laden, went to closing.

Not everyone is so inclined to close a deal, but the story got us thinking about adaptability as a contributing factor in an agent’s rise to success, and how that adaptableness lends itself to a rising phenomenon in real estate, one that is steadily inviting traditionally residential agents to assume a variety of roles in their own right. Insiders refer to this larger than expected group as “resimercials,” although Emily Line, director of commercial services for RPR, refers to them as “hometown heroes.”

“These are the folks that juggle multiple obligations in terms of servicing the diverse needs of their communities,” said Line. “They are from rural areas professionals plugged into their communities who have a vested interest in attracting small business, in addition to meeting the needs of homebuyers.”

By Line’s account, more than 200,000 NRDS-number-holding agents in the United States claim commercial real estate as their secondary area of business and that they tend to practice in tertiary and rural markets.

These multi-skilled community experts run the gamut in terms of their adaptability and willingness to tap into new resources. They are business advisors who know how to analyze a marketplace by determining who is

buying specific consumer goods, where they work, how long they commute, what they spend and how much they make. They study locations to determine employability for a potential enterprise, what the workforce will support, and what the population will look and feel like in years to come.

Increasingly, these rural-centric agents are turning to RPR to identify marketplace opportunities for business owners, property managers and developers intent on moving into the area.

Using demographic, psychographic and spending data information, RPR’s advanced analytical tools produce persuasive trade area analyses, commercial property reports, and best business reports, coupled with powerful thematic maps, that provide answers to six essential questions:

• WHO are the right customers and/or employees for this business?

The Commercial Trade Area Report compares home values, education, employment, consumer spending, income, marital status, age and population trends, and lifestyle preferences.

• WHAT will the community support? The Best Business Report pinpoints over-and-underrepresented business types in a specific geography.

• WHEN will this business experience its greatest growth or challenges?

The Trade Area Analysis reveals what a commercial-property seeker can expect in terms of population and household growth.

• WHERE is the best location for the client’s target audience and WHY is it a good fit? The Trade Area Report helps agents and business owners match the best location with the most suitable target audience based on an analysis of spending data within a drive time, radius, or general area.

• HOW does this location match the client’s expectations? The Property Report, a foundational first step, provides data on property type, lot size, maps, high res photos, owner information, assessed values and more.

Learn more about how to measure, predict and target the perfect spot for commercial endeavors by visiting narrpr.com/commercial.

FALL 2015 KENTUCKY REALTOR® 13

Legislative Update State Update Upcoming 2016 Legislative Session The Kentucky Legislature returns to Frankfort on Tuesday, January 5th 2016 for the 60-day session. Prior to the start of the next legislative session, Frankfort will welcome a new Governor, his administration and the other Constitutional Officers who are eager to hit the ground running.

During the session, the Governor will present his biennial General Fund and Transportation budgets and present his broader legislative agenda to move the Commonwealth forward. Additionally, legislators will propose hundreds of bills, many affecting property owners, small businesses and the real estate industry. KAR will work with the Executive and Legislative branches on issues of common purpose that will strengthen and grow our economy.

Here are some issues that affect REALTORS, home buyers, and private property owners that may be discussed in the upcoming session: •

Non-judicial foreclosure

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Landlord tenant issues

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Homeowner associations

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Housing code inspection and enforcement

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Blighted properties

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Land banks

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Tax, financial and credit issues

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Banking and transportation issues

KAR continues to promote the values of home ownership and private property rights to encourage job creation and economic growth.

Above: At the Summer Business Meeting in French Lick, RPAC’s Bowl-AThon was a huge success with over 94 attendees raising $5,840. Special guest was 2015 REALTOR ® Party Director Kenny Parcell.

Get out and vote!

Plan on heading to the polls on Tuesday, November 3 for Constitutional Offices. Kentucky REALTORS® have an 88% voter registration rate which is higher than both the National Association of REALTORS® and the Commonwealth of Kentucky as a whole.

Here are some details to keep in mind: • Polls are open 6:00am – 6:00pm • For voting information, sample ballots and to find out where you vote, visit elect.ky.gov • On the 2015 Primary Ballot o Governor/ Lt. Governor o Secretary of State o Attorney General o Auditor of Public Accounts o State Treasurer o Commissioner of Agriculture Get involved, get out the vote and make sure the REALTOR® voice is heard on Election Day.

Above: In April, RPAC hosted an event at Keeneland selling over 60 tickets and raised $13,100. Special guests included Congressman Andy Barr and State Senator Steve West.

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RPAC Numbers (as of October 5) Major Investor Goal: 65 / Major Investors: 45 Presidnt’s Circle Goal: 7 / Presidnt’s Circle Investors: 9

2015 Major Investors * Presidents Circle ** Presidents Circle & HOF Golden R Al Blevins* Tony Clark** Guy Montgomery** Charlie L. Murphy** Betty A. Schutte** John Weikel** Sterling R Nita Allen-Phillips Dennis Anderson Rick Barker Michael Becker Tyrone Brown Greggery Buchanan Bonnie Byerly Steve Cline Jayne Cox Barbara Curtis Sallie Davidson John Davis Kristy Dugan

David Alan Earls Larry Freels Lonnie Gann Donna Gordon-Willoughby Donna Gregorich Elaine Hangis Charles Hinckley Ronald Hughes Mike Inman Norman Jones Connie Lawson Brenda Loyal Jerry McMahan** Ann McDonald** Rue McFarland Becky Murphy Rip Phillips Arthur Reed Jan Scholtz Trish Segrest Mike Spicer Lisa Stephenson Amanda Stepp-Marcum Carl M Tackett** Greg Taylor Ken Warden

Associations that have met or exceeded their 2015 RPAC goal Ashland Area Board Central Kentucky Association Eastern Kentucky Association Greater Louisville Association Greater Owensboro Association Heart of Kentucky Association Henderson Audubon Board Hopkinsville Christian County Board Lexington-Bluegrass Association Madisonville Hopkins County Board Murray Calloway County Board Paducah Board REALTOR® Association of Southern Kentucky Somerset-Lake Cumberland Board

Hopkinsville REALTORS® Introduce Military Families to Housing Opportunities The town of Hopkinsville, Kentucky is a great place to live. But the thousands of military families just 15 minutes south at Fort Campbell didn’t even seem to be aware of it, buying homes and settling instead in a bigger, higher-profile metropolis in the opposite direction. Last September, with the help of a Housing Opportunity Grant from the REALTOR® Party, the 64-member Hopkinsville Christian & Todd County Association of REALTORS® [HCCBOR] got their attention with a fun-filled “REALTOR® Military Appreciation Picnic.”

“We realized that the issue was promotion,” recalls HCCBOR Association Executive GayWilson. “So we brainstormed ways to let the soldiers at Fort Campbell know about us, and at the same time, let them know how much we appreciate their service to our country.” The local association is so small, she notes, that it would not have been possible to pull off such an event without the support of the REALTOR® Party. “We are so thankful that, even at our size, we can do things like this for our community and, ultimately, for our members,” she says.

Working with the Military Affairs Committee of the local Chamber of Commerce, HCCBOR planned and promoted the picnic at an attractive working farm venue north of town, which forced its guests from Fort Campbell to drive through Hopkinsville en route to the event. They got the word out with radio spots and through social media, specifically targeting military spouses on the base. Local businesses and HCCBOR affiliate members contributed gift cards, door prizes, and items for goody bags. The local electric company provided bottled water. Although they had no way of predicting how many people to expect, they were hoping to attract about 500 military family members. “Imagine our shock when over 700 military family members showed up!” laughs Wilson, “Luckily, we had increased our food order at the last minute, just in case.” Almost half of HCCBOR’s membership worked the event, greeting the military families, thanking them personally, and sharing information about Hopkinsville and its small-town benefits, as well as housing opportunities in the community. Others manned the grills and served the hundreds upon hundreds of hotdogs. “Everyone had a great time, and we kept hearing from our military guests, ‘We’d never even heard of Hopkinsville!’

So, it really was a huge success,” states Wilson, who would like to be able to repeat the event every few years.

Meanwhile, HCCBOR has been able to follow up with picnic guests who registered for door prizes. Businesses in Hopkinsville are benefiting from the military-spouse word-of mouth network. With the active support of HCCBOR, a member of the Military Affairs Committee of the Chamber of Commerce now attends a weekly orientation for new soldiers at Fort Campbell, to raise the town’s profile on the base. And, since the picnic, Hopkinsville has seen steady home sales to military families: “We’re up to between 7-10 a month,” reports Wilson. “It has been awesome!”

FALL 2015 KENTUCKY REALTOR® 15

Legislative Update Federal Update TRID Rules Take Effect; CFPB Reassures

1031 Like-Kind Exchanges

The new TILA-RESPA Integrated Disclosure (TRID) rules for mortgage closings took effect for new loan applications on October 3. The Director of the Consumer Financial Protection Bureau, on behalf of the six federal financial regulatory agencies, provided written assurances that the early enforcement of the new rules will take into account the good faith efforts of supervised entities. The letter coincides with Director Cordray’s testimony on September 29 before the House Financial Services Committee that early enforcement efforts would be corrective and not punitive for a period of several months.

Though comprehensive tax reform is not likely to be enacted in 2015 and no viable comprehensive tax reform legislation has been introduced, key Members of Congress including members of the House Ways and Means and Senate Finance are still exploring the possibility of some limited tax changes. Lawmakers and their staffs must continue to be educated about the vital role that investment and commercial real estate tax provisions play in the nation’s economy. Congress should oppose proposals that would repeal like-kind exchanges.

Patent Reform - H.R. 9 - the Innovation Act of 2015 This fall, Congress will hold critical votes on the H.R. 9 – the Innovation Act of 2015/S. 1137 the Patent Act. This legislation will take vital steps to protect our industry from frivolous lawsuits brought by patent trolls, and it is critical that you urge your member of Congress to support them.

REALTORS® are targeted by patent trolls at alarming rates. Patent trolls do not manufacturer or make anything. They exist solely to purchase old patents and to use the threat of expensive lawsuits to extort money from legitimate businesses.

Patent reform legislation will help close the loopholes in our legal system that allow trolls to thrive.

Patent trolls target REALTORS® in their role as end-users of common business technologies: O

Dropdown menus on websites

O

Website mapping technologies

O

On line search alert functions

O

Scan-to-email technologies

Congress must pass common-sense, comprehensive patent litigation reform to protect Main Street businesses from patent troll abuse. NAR is pushing to see a final bill that will: •

Require patent demand letters to include basic information about the alleged infringement and the method by which a royalty demand is calculated;

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Require patent owners to reveal their ownership when demanding licenses and royalties;

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Protect customers and end users from lawsuits based on infringements by manufacturers and service providers

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Require the party bringing the lawsuit to disclose the bases and scope of the suit in the initial pleading;

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Create greater clarity in the discovery process, including when and what information is discoverable throughout the litigation process; and

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Require more patent owners to pay for defendants’ legal fees and costs when a lawsuit alleging infringement is objectively baseless and frivolous.

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Since 1921, the Section 1031 provision has allowed investment real estate to be exchanged for property of a like kind on a tax-deferred basis. Exchanges are essential in investment and commercial real estate transactions; if repealed, fewer redevelopment projects will go forward, resulting in fewer new jobs. The like-kind exchange provision provides liquidity to an illiquid asset. More than 60% of REALTORS® have participated in a 1031 exchange transaction in the past 4 years. Repealing the like-kind exchange provision would be counterproductive and result in the loss of jobs and economic growth with little gain in revenue While enactment of tax reform has little chance this year, the ideas promoted by House and Senate tax leaders will be on the table when Congress gets serious about moving tax reform. Members of Congress need to understand now that tax proposals that harm real estate are nonstarters.

Waters of the United States The EPA recently finalized its “Waters of the U.S.” (WOTUS) regulation. This regulation will place more U.S. bodies of water, including small streams and isolated wetlands, under the jurisdiction of the federal government. This will have significant impact on real estate development and property rights in communities across the country. The House has passed legislation. The Senate must act now to force the EPA to withdraw the rule and start from scratch.

In May, House of Representatives passed H.R. 1732, the Regulatory Integrity Protection Act, sponsored by Rep. Shuster (R-PA), heading the Senate for action. In the Senate, Sen. Barrasso (R-WY) and Sen. Donnelly (D-IN) sponsored S. 1140, the Federal Water Quality Protection Act which passed out of the Senate Environment and Public Works Committee. This bill must get to the Senate floor as soon as possible for passage and get to the President’s desk.

NAR appreciates the House of Representatives for passing H.R. 1732 and seeks action on S. 1140. Both bills require the EPA to withdraw the regulation and start the process from scratch.

Currently, the Clean Water Act authorizes the federal government to protect “navigable waters”. The EPA has been trying for years to enlarge its jurisdiction over “all waters” of the U.S., despite three Supreme Court rulings that narrowed the scope of their authority over U.S. waters.

Under the guise of “clarifying” which waters are regulated by the federal government and which waters are not, the EPA has finally accomplished this goal by including many more waters of the U.S. under the Agency’s authority. Only Congress can change the scope and authority of the Clean Water Act. Congress needs to force the EPA to withdraw this damaging rule and start over.

Highway Bill Passes U.S. Senate On July 30, 2015, the U.S. Senate passed a short-term highway and transit bill, which extends authority through October 29, 2015, but replenishes the Highway Trust Fund into December 2015. The U.S. House passed the measure the previous day and it is expected to be signed into law by the President.

However, hours before its short-term extension vote, the U.S. Senate also passed a 6-year reauthorization bill. This legislation included an NAR supported Safe Streets amendment that would require states and metropolitan planning entities to plan and design for the safety needs of all users of federally funded projects. Since 2008, NAR has been a member of the Complete Streets Coalition asking Congress to establish a baseline of safety design to accommodate all users of transportation.

The bill also included a controversial provision to use guarantee fees (g-fees) as a pay-for, but Senate Majority Leader Mitch McConnell (R-KY) was able to approve his multi-year bill by a vote of 65-34 through his chamber. G-fees are charged and used as a risk management tool by the government-sponsored entities to protect against losses from home mortgages. However, since Fannie Mae and Freddie Mac were place in conservatorship, Congress has used their funds to pay for unrelated federal spending. Prior to the Senate vote, NAR and a coalition of real estate trades submitted 2 letters to the Senate opposing the use of g-fees for this purpose. The letters reiterated the coalition’s position that g-fees should only be used to manage the companies’ credit risk and not be diverted for unrelated spending by Congress.

This six-year transportation bill will be the U.S. Senate’s starting point for fall negotiations with the U.S. House. U.S. House leaders, however, made clear that the U.S. Senate’s 6-year bill wouldn’t receive a vote in the lower chamber. Unless U.S. House and U.S. Senate leaders are able to hammer out their differences and produce a long-term bill that can make it through both chambers, this debate will continue and could prove contentious this fall

Above: FPC Leslie Heath presented a NAR RPAC check to Congressman Ed Whitfield.

Download the REALTOR® Action Center Mobile App More than 60,000 REALTORS® from across the country have already signed up for REALTOR® Party Mobile Alerts – have you? You can vote, act and invest on the go! The 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 - simply search for NAR Action Center in your app market or text APP to 30644 to receive a link to download.

Consumer Agency Unveils Results of E-Closing Pilot In a public forum attended by representatives of NAR in August, the Consumer Financial Protection Bureau (CFPB) heralded e-Closings as a significant step forward to enhance the closing process for both consumers and the mortgage industry. The pilot program, begun in 2014, was designed to demonstrate that electronic closings can improve consumer understanding of the mortgage process, thus empowering consumers, and improve efficiency and cut costs for providers and consumers.

The pilots involved teams of lenders, settlement providers, real estate professionals and technology vendors. Among the key findings of the pilot programs, involving approximately 3,000 borrowers, was the need for enhanced teamwork among the many participants in the settlement process.

Candidate Training Academy NAR developed the Candidate Training Academy to give REALTORS® REALTOR®-friendly candidates and those interested in running for a political position an introduction to and expectation of how run for office. KAR recently offered the day-long live training session on August 7th at Lexington Bluegrass Association of Realtors. Special guest State Senator Damon Thayer of Georgetown. The event gave the attendees a valuable head start in their political journeys, as well as information on how to run successful campaigns. They learned about campaign plan, budgeting, research and targeting, fundraising, voter contact, winning online and GOTV.

At a subsequent roundtable discussion with CFPB officials, industry partners including NAR discussed the encouraging results of the pilot program and the need for wider acceptance of electronic signatures and documents. The immediate outlook is for growth in “hybrid” e-closings, where some of the documents are done electronically. Fully electronic closings can be achieved with maximal co-operation among all participants in the transaction. CFPB officials emphasized the continual need for the personal involvement of real estate professionals and others despite the move toward e-closings.

SPRING FALL 2015 KENTUCKY REALTOR® 17

KAR Annual Convention Leaders elected and award winners honored at Annual Convention Owensboro, and its newly renovated riverfront, welcomed 300+ REALTORS in September for the KAR Annual Convention & Expo. It consisted of four days of education, networking and business planning for the upcoming year as well as a great deal of social events to allow everyone who attended to make new friends and reconnect with those from other parts of the state. By the time it was over, KAR had elected new leaders, recognized many for their commitment to the industry and made decisions that will keep KAR moving forward. Here are the action items from the BOD meeting as well as other highlights.

BOD Actions: •

Approved the 2016 budget with annual dues to remain at $125 per member.

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Approved the 2014 financial audit.

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Approved up to $30,000 for the CEO search consultant and related expenses.

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Approved up to $5,000 for a space planner related to locating a new building for KAR.

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Approved a $2,500 donation to the NAR REALTOR Relief Fund to assist in the wildfires in Idaho and other states.

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Approved naming the LeadershipKAR scholarship in honor of Carl Adams, KAR member and graduate of the 2005 class.

Lamont Breland, a member of the Greater Louisville Association of REALTORS® (GLAR), was installed at the Convention as the 2016 president of the Kentucky Association of REALTORS®. Lamont has been a licensed REALTOR® since 1987, having worked for several area real estate companies prior to obtaining his broker’s license and forming Breland Group REALTORS® in 1995. Lamont is the immediate past president of GLAR and has served on the board of directors as well as the community relations task force and advertising committee. On the state level, he has served on the delegate body, board of directors, region director as well as several committees including strategic planning, legislative quick response and economic and local issues. He is a board member of the University of Louisville Center for Real Estate Studies, the Louisville Metro Police Foundation, where he also served as president, and is an active member of the Hurstbourne Baptist Church. Lamont is a graduate of the University of Louisville.

Other leaders elected to the board of directors were as follows: • President-elect: Mike Becker (Florence) • Treasurer-elect: Rip Phillips (Louisville) • Region 1 Director: Bonnie Byerly (Murray) • Region 3 Director: Lester Sanders (Louisville)

Other items •

Election results:

KREEF Trustees elected were:

• Region 5 Director: Robin Schneider Roseberry (Crescent Springs) • At-Large Director: Donna Gordon-Willoughby (Louisville)

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Pam Featherstone, President-elect

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Randy Newsome, Treasurer-elect

• At-Large Director: Charles Hinckley (Radcliff)

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Christine Morgan

• At-Large Director: Mike Spicer (Crestview Hills)

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Brian Bingham

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Chris Fox

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Erika Gudenkauf.

Existing members serving on the board of directors will be Immediate Past President Norman Jones (Pikeville), Treasurer Steve Cline (Bowling Green), Region 2 Director Molly Mattingly (Bardstown), Region 4 Director Linda Wiley (Lexington) and Region 6 Director Bill Leslie (Burnside).

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The KREC Selection Committee is sending the names of Paul David Brown, David Chelf, John Durbin, Tom Stegman and Tom Waldrop to the Governor for his selection of the next KREC Commissioner.

The six remaining At-Large Directors for the state include Al Blevins (Mt. Sterling), Pam Featherstone (Elizabethtown), Barbara Flannery (London), Brenda Loyal (Owensboro), Nelson Rennekamp (Crescent Springs) and Libbi Taylor (Lexington).

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The RPAC events throughout the Convention raised almost $13,000 and brought in several new and previous major investors - those who invest $1,000 or more in RPAC. The RPAC Scavenger Hunt winners were Mike Inman, Robin Schneider Roseberry, Sue Ann Collins and Marsha Westerfield.

In addition, Jeff Smith, Lynda Minzenberger, Grace Patterson, Nelson Weaver and Lonnie Gann won a total of $4,095 in the Money Machine.

Jay Velotta (Owensboro), Karen Gross (Owensboro) and Sue Ann Collins (Florence) were elected to serve as At-Large Delegates on the leadership team in 2016.

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All past graduates of the LeadershipKAR program were awarded the first Kentucky specific designation of LKAR which will now be given to all future graduates as well.

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A ceremony honoring Vietnam Vets was held as 2015 marks the 50th anniversary of the start of the war. Several KAR members in attendance were given recognition and a medallion for their service to our country.

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Charlie Murphy (Lexington) was elected to serve as a director for the National Association of REALTORS®.

Award winners include: Steve Cline, a broker with Berkshire Hathaway Home Services in Bowling Green and member of the REALTOR® Association of Southern Kentucky (RASKY), was named KAR’s 2015 REALTOR® of the Year. Cline has been a REALTOR® for over 25 years and has served the real estate industry at the local, state and national levels. He currently serves as treasurer-elect for KAR and also serves on the Board of Directors, Delegate Body and Leadership Team.

He has been a member of the investment, strategic planning and finance committees, the legislative quick response team and served as a Trustee for both the Kentucky Real Estate Education Foundation (KREEF) and the REALTOR® Political Action Committee (RPAC), where he also served as chair. Cline was a member of the LeadershipKAR class of 2005 and holds the Graduate, REALTOR® Institute (GRI), e-PRO and Certified Residential Specialist (CRS) designations. Cline served as president of RASKY in 2000, the MLS in 2005 and 2009 and the Kentucky chapter of CRS in 2009 and 2010. Locally, he was named REALTOR® of the Year in 1997 and 2004 and was twice honored with the Distinguished Service Award. He participated in Leadership Bowling Green where he served as class president and received the Bart Hagerman Award. Nationally, he is a major investor in the REALTOR® Political Action Committee and serves as a federal political coordinator for U.S. Representative Brett Guthrie. In his community, he has served on numerous boards including Big Brother’s Big Sister’s, Foster Grandparent Program, Indian Hills Country Club, the Homebuilders Association and the Hilltopper Athletic Foundation. He is actively involved with his church, Hillview Heights & Lakeside Experience, and currently serves as president of the Bowling Green Quarterback Club.

The 2015 KAR Distinguished Service Award was presented to Ken Warden, principal broker and owner of Warden & Associates, REALTORS® in Fort Thomas and member of the Northern Kentucky Association of REALTORS® (NKAR). This award is given to someone who has provided outstanding contributions and service to the real estate industry and his/her local community. Warden was president of KAR in 2004, served on the board of directors and was named REALTOR® of the Year in 2005. Through his involvement over the last 41 years, he has served on numerous committees, work groups and task forces at the state level including legal affairs, strategic planning and appraisal as well as a Trustee for the REALTOR® Political Action Committee (RPAC). He has earned designations as a Certified Residential Specialist (CRS), Graduate, REALTOR® Institute (GRI) and Seniors Real Estate Specialist (SRES).

Nationally, he has served on the board of directors, as a federal political coordinator for two Congressman and as the vice president for region four, which covers the states of Kentucky, Tennessee, North Carolina and South Carolina. On the local level, Warden has served as president of the Campbell County Board in 1982, NKAR in 2012 and the MLS in 1996 and has twice received the Robert J. Enos Dedicated Service award. He was also awarded REALTOR® of the Year for his local association in 1985 and again in 2003.

In the community, he serves on the Ft. Thomas Renaissance Main Street Board of Directors and is currently the chairman of Economic Restructuring Committee. He has served on the Kentucky Progress Commission, the Kentucky Housing Corporation Affordable Housing Trust Fund Advisory Committee, the American Legion and the Northern Kentucky University alumni group. Warden is also a constable in District 2 of Campbell County.

Doug Myers, a REALTOR® with Semonin REALTORS® and member of the Greater Louisville Association of REALTORS® (GLAR), has dedicated his professional life to educating others. Myers was presented the 2015 Nat Sanders Education Award, an award created to honor Nat Sanders, former executive vice president of the Greater Louisville Association of REALTORS®, that is designed to recognize an individual who has made the most significant contributions to, and exemplified leadership and service in, real estate education at either the local, state or national level. Myers is an educator for KREEF, a certified instructor through the Kentucky Real Estate Commission and a highly requested educator throughout the state. He is a member of the Kentucky Real Estate Educators Association (KREEA) and has authored several continuing education and pre-licensing courses in both Kentucky and Indiana.

The 2015 Good Neighbor Award is designed to recognize a REALTOR® who has made an extraordinary impact on his or her community, or on the national or world stage, through volunteer work.

The award went to Bobby Hunton, of Bowling Green and the REALTOR® Association of Southern Kentucky, for his involvement with the “Stuff the Bus” campaign. This event, co-founded by Hunton in 2005, brought in over 15.5 tons of school supplies this year to be distributed throughout a 10 county region. What started with one bus now takes five to hold all the supplies.

From the monetary and other donations, it is estimated that over one million dollars is saved annually by school resource centers through this event.

Hunton has served as president of his local association and has been awarded REALTOR® of the Year. With the state, he has served on the delegate body and served on various committees.

The 2015 Community Service Awards, given to REALTOR® associations on the local level that improve the quality of life in their communities, were presented to three local REALTOR® associations based on membership numbers – small, medium and large. The award in the large category went to the Lexington Bluegrass Association of REALTORS® (LBAR) for home repairs provided through their REALTOR®-Community Housing Foundation and their local book donation project, which provides thousands of books to over 100 elementary schools in the central Kentucky region.

In addition, their Young REALTORS® of the Bluegrass (YRB) committee supports several local organizations throughout the year. In the medium category, the REALTOR® Association of Southern Kentucky won for their involvement with several community projects including their signature project, the “REALTORS® Hope for the Homeless” event where they collected over 32,000 pounds of food and supplies for local charities. They also implemented a 4K/2K Glow Run/Walk to help raise funds for their charitable efforts. For their work with RETAKE (REALTORS® Engaged Through Acts of Kindness Events), the Eastern Kentucky Association of REALTORS® took home the award in the small category. Through RETAKE, members identify and address issues in the 13 counties served by the Association. Over the last year, they completed home improvement projects for the elderly, made donations to veteran groups and provided assistance and supplies after the disastrous July flooding in Johnson County.

To view all the excitement from the event, go to kyrealtors.smugmug.com.

SPRING FALL 2015 KENTUCKY REALTOR® 19

Business Tips

Seeking the 13 Steps of Quality Leadership

By Mark Given

I

’m not sure about you, but in my life, and in my current

combined with thoughts from a recent monthly issue of Success

surroundings, it seems harder and harder to find people with

Magazine article focused on leadership skills, here are my “13 Steps of

integrity and vision. Most people just don’t have the qualities

Quality Leadership” that I believe we all need to follow everyday to

that help them stand above the masses, and training as often as needs require. As a young Boy Scout, I vividly remember being taught the traits that make a quality leader. My scout master didn’t teach with a blackboard, but rather set a personal example that has caused me to pause whenever I get off track. Thanks to him, I’ve been able to help 19 boys earn their Eagle Scout award (4 of them my own sons), run a successful company for 20 years, serve in key leadership positions in other organizations, and become an international speaker and trainer.

The latter allows me the good fortune to help others improve lives and

build a life worthy of others joining our team: The best part of leadership is the thought that you can leave this place better than it was when you got here. It might not be significant enough to read about in the daily news, but you know that you made a difference. There’s an old proverb that goes…….”When you were born you cried and the world celebrated. Live your life in such a way that when you die, the world cries and you celebrate.” That’s really good leadership advice.

find new success in their business. So, inspired by my past and

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Don’t be afraid to fail – great leaders realize that they won’t win all the time, so give it your best shot every time you take the field. Failures make the win even sweeter! Samuel Beckett once said “Ever tried? Ever failed? No Matter, try again, fail again, Fail better”.

Ask yourself why – why do you even want to be a leader in this group, or company, or situation. Sometimes, it’s better to let someone else be in charge when they have the experience or talent to do a better job. You can learn a lot from watching and serving someone else as they lead so you’ll do a quality job when it’s your turn.

Ask your customer – it’s tough to be criticized, but if you want to grow, ask those you serve how you’re doing and listen for the points where you can improve. And by customer, I don’t just mean those you sell, also ask your team members.

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Evaluate - it’s easy to ask why when we lose, but evaluating why we win is even more important. Like you, most people like to win a lot, so make a list of the things that worked and repeat them.

Show enthusiasm – people need an example of energy and vitality. You need to be the muscle that pumps the heart even when you’re pushed to your limits. Sir Winston Churchill said “Success is the ability to go from one failure to another with no loss of enthusiasm”. Show it, shout it, share it, and exemplify it. And don’t be so grumpy!

Study the past – great leaders don’t lead their people to success by repeating the past failures of others. Do your homework and find the gaps. Then charge. I have a personal quote that I’ve been sharing a lot lately which is appropriate here. “When in a slump, retreat and attack from a different direction.

Success comes to those that are FEARLESS.”

Increase productivity with these five back-to-the-basic tips for marketing you and your real estate business— 1. Contact the folks you’ve neglected and apologize. If you’ve ignored

some folks, it’s time to say that you’re sorry. They’ll forgive you if you are sincere and don’t do it again. It is important to know how best to connect with them. For some, it would be a phone call. Others, it’s best to send an email or a text. And for many, a personal visit will always replace electronic communication….it just feels good to know someone cares.

2. Don’t forget to say thanks for their past business and how much they mean to your success. Let them know you’re excited about helping them in the future. Remind them of what you do and encourage them to mention you if someone mentions real estate. And have them give you a call when they drop your name.

3. If you don’t currently send thank you notes on a regular business, it’s time to start. Two simple hand written notes a day have created and sustained more regular business for me than anything else I do. In 15 minutes a day, you can write 3 or 4 cards. They always work!

4. Maybe it’s time to be seen at more local activities like your child’s

sporting events, volunteering, church, or service organizations. Start bowling or play tennis! Find something to connect with more people. I call it “increasing your intentional collisions”. And wear your name tag or logo shirt. Someone will always ask you about the real estate business.

5. Do you know anyone that owns a home? What property owners want to know right now more than ever is what their property is worth. Recently, I was speaking to a group of REALTORS® in Virginia Beach, VA. I suggested that they begin doing two real estate reviews a week. Just put together a 5 minute CMA and make an appointment to present the information at your friends home, or meet for a brief breakfast or lunch. Don’t spend more than 15 minutes presenting your findings. Spend more time listening to them and discovering their current pleasure or pain. I received a call back from one of the agents that reported he had created and closed four transactions off of two real estate reviews a week for two months. That is fantastic and easy! All you have to do is give people what they already want and don’t be afraid to give them bad news if necessary.

Mark Given, co-author of the “Finding My Why” book series, is a regularly requested as a keynote speaker and trainer for private companies, national, regional, and state conventions. In the real estate industry, Mark is a Senior Instructor for The Council of Residential Specialists, Ninja Selling, REBAC® (ABR), Seniors Real Estate Specialist® (SRES), NAR Green, and is a GRI Instructor for many states. Mark has authored a number of national real estate courses and recently authored the CRS 1 day “Going Green” course.

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Remove the negative – one bad apple can spoil the whole bunch! Remove the canker from the team and do it fast.

Negativity can delay or kill success. Do it now. It will just get worse!

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Celebrate – even the small successes. Get use to celebrating all along the way. It makes the work so much more fun.

Forecast the future – leaders with vision inspire others to focus, create, and see a bigger and brighter picture.

Give up traditional thinking – I love to study the successes of great thought leaders that changed the world and the marketplace. People like Tony Hsieh, Walt Disney, and Larry Kendall. It doesn’t matter what industry you are in, there are those worth reading about or getting to know on a personal basis.

Seek determination – Og Mandino is quoted as writing “Failure will never overtake me if my determination to succeed is strong enough”. Real leaders have a determination that is unquenchable.

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Try new things – Get out of your comfort zone. Gather your team together and do some mind mapping. No criticism or judgment allowed. You might be amazed at what you can create with a little break from the stress and some added creativity.

Seek change – I have always loved what Gandhi said: “You must be the change you want to see in the world.”

There will be people that want to follow you when your passion and example are sufficient for others to see and feel. It’s palpable. They’ll want to follow you. Scary huh?

FALL 2015 KENTUCKY REALTOR® 21

Local Association News Local boards/associations are encouraged to submit information for this section. Pictures must be at least 300dpi. Send all association news to hcooper@kar.com.

Somerset-Lake Cumberland Association The SLC Association held a Relay for Life auction in May that was a huge success, raising $10,360, double the amount from the previous year, for the American Cancer Society. Thanks to the tireless work from the committee members, auctioneers and generous sponsors, SLC Association placed 2nd among 81 Pulaski county groups for total dollars raised.

The event, with the theme, Pictured L-R front row: SLC members “Light, Camera, Cure…

Rolling out the Purple Carpet,”Stephanie Todd, Beverly Whitis, Linda Skaarup (2015 Association President), Brooke was set like a Hollywood Cary Whitis (American Cancer Society), premier where attendees walked the purple carpet and Vicki Hines and Susan Alderdice. Back row: Tucker McAlpin, Millie King, Vickie Hyden, the table decorations included Mike Hines, Rick Barker (2015 Association a director’s clapboard and film President-elect) and Verlan Owens. themed balloons as well as a photo booth where you could pick out your favorite accessories and snap pictures with your “bestie.”

Hopkinsville Christian & Todd County Association The Board received a NAR PlaceMaking Grant for $2,500 for a dog park in Hopkinsville. The Association is partnering with the City of Hopkinsville, the Mayor and the City Council. The groundbreaking event was held inside due to the weather and the Association presented the check to Pictured are Mayor Hendricks, Board Mayor Hendricks and the city council. President Bruce Smiley and Paul Henson

Greater Owensboro REALTOR® Association REALTOR® and Affiliate members of the Greater Owensboro REALTOR® Association’s RPAC Committee joined together in July for a fun filled Day at the Races at Ellis Park in Henderson, Kentucky.

Members made contributions to Pictured are Walter Mayes, Diane Brancato, RPAC as the price of admission Landon Barrowclough, Karen Carper, to the event. A presentation of the Lindsey Purcell, John Reynolds, Karen Gross, Kentucky REALTORS® Political Melissa Maze, Devin Taylor, Gail Niehaus, Action Committee blanket was Jay Velotta, Stephanie Williams, Brenda announced on the track PA Loyal, Tyler Shookman, Joe Johnson (Jockey), system, while the members posed Chris Roberts, Mary Ellen Hayden, Zachary for a group photo in the winner’s Blackburn, Tony Clark, Glenn Ashby, Tony Schaad, Mark McCoy, and Johnny West, circle of the fifth race.

Statewide Realty, Evansville, Indiana.

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Henderson Audubon Board The Henderson Audubon Board recently made a donation to Opportunity16. The board has been a supporter of Opportunity16 since its inception in 2011 as an Economic Development campaign.

Since then, Opportunity16 has assisted companies with 2,000 new and retained jobs in our region, has helped unemployment rates return to pre-recession levels and increased total payroll by 30% Pictured are Henderson Audubon Board A.E. in the four counties within the board’s jurisdiction (Henderson, Missy Vanderpool, KYNDLE CEO and President Brad Schneider and Henderson Webster, Union and Mclean).

Audubon Board President Linda White.

The board has also been working to improve communication efforts with our members and affiliates through a new and improved, mobile-friendly website, a new Facebook page and newsletter.

Paducah Board The Paducah Board has received a $2,500 Placemaking Grant from NAR. PBOR, in conjunction with the City of Paducah, Paducah Main Street, Paducah School of Art and Design, and others, are helping with the construction of a ‘Pocket Park’ on Second Street in downtown Paducah. This area, a vacant lot between two historic buildings in the middle of the historic district, is being converted to a small park with planters and bench seating. It will be used to display art pieces by local artists and include an area for performing arts. The park will enrich the quality of life for our historic district and hopefully help increase our residential occupancy in downtown.

PBOR also participated in the second annual Showcase Paducah 2015, an event spearheaded by Paducah Mainstreet to market, both locally and nationally, the commercial and residential properties for sale in the lowertown and historic areas of downtown Paducah. This years’ event was complete with open houses all over downtown and included industry folks on hand to discuss the many financial incentives available to those wishing to rehabilitate a historic property.

REALTOR® Association of Southern Kentucky RASK has launched a revamped website along with a new logo. The association’s new site was designed and built to work on all platforms and devices. The site was developed to feature all of our counties of jurisdiction as we have expanded recently. One feature of the site that stands out is the “Go Local” tab that includes the “Go Local Directory.” This feature allows REALTORS® and consumers to connect with businesses that assist in the buying and selling process. The association believes this is one more way to create added value to our Business Partners (formerly affiliate members) and hopes that it will encourage more business to join the association. Visit www.raskrealtors.com to see the site.

Greater Louisville Association The GLAR Annual Charity Golf Outing held in July was a huge success raising over $13,000 for local veterans in our area. The funds raised were split between two charities, Active Heroes and the Coalition for the Homeless - Veteran Housing Initiative. Active Heroes is an organization that helps strengthen veterans and active military and their families in order to provide coping skills to manage stress and triggering points that

lead to military veteran suicide. The Coalition for the Homeless Initiative is to eradicate veteran homelessness in Louisville, KY by 2016.

Union reported as the richest town in Kentucky Union, Kentucky, with a median household income of $102,271, and population of 5,477, was named the richest town in Kentucky. The income exceeded the state’s median HH income of $43,036 by 136%.

More than 93% of Union homes were occupied by their owners, much higher than the national rate of 64.5%. To identify the richest town in each state, 24/7 Wall St. reviewed median household incomes for every town with a population of 25,000 or less in each state from the U.S. Census Bureau’s American Community Survey (ACS). Due to relatively small sample sizes for town-level data, all social and economic figures were based on five-year estimates for the period 2009-2013

Louisville is a top 10 city for job creation Louisville is one of 10 cities that are leading job creation, according to recent data compiled by Gallup and reported by New York City-based employment search company Monster. The list, on which Louisville ranks seventh, is based on an index that captures the percentage of workers in each city who say their employers are expanding their workforce level minus the percentage who say their employers are downsizing their workforce level.

Maysville is a charming small town Country Living asked their Facebook fans to share their picks for the cutest small towns in America, and with more than 1,000 comments, Maysville made the list. The only requirement was each town nominated had to have a population of under 13,000. As it states, Maysville was “once an important stop on the Underground Railroad and this picturesque Ohio River city is filled with history - Rosemary Clooney was born here, for example!”

Kentucky a top competitive state for business Site Selection magazine released its rankings of the “Top 10 Competitive States for 2014,” and Kentucky is 6th on the list, which is watched closely by economic development professionals. States are ranked based on how many new and expanded facilities opened in 2014, total capital investment and facilities per 1 million people. The magazine also ranked states based on their state tax climate, number of new jobs and rank on the Beacon Hill Institute’s state

Kentucky receives award for economic development Gov. Steve Beshear announced this summer that Area Development magazine, a leading economic development trade publication, has recognized Kentucky with a Silver Shovel Award, recognizing the Commonwealth as one of the most successful states in creating jobs and securing investments in 2014. In the summer 2015 issue, Area Development magazine awarded Silver Shovels in four population categories, with Kentucky’s honor coming in the 3-to-5 million population tier. The awards are based on a state’s top 10 job-creation and investment projects that began to materialize in the previous year.

Kentucky’s top projects resulted in nearly 4,000 new and retained jobs and more than $1 billion in investments.

Lexington named a Most Inspiring City for Young Artists The educational website WorldWideLearn recently analyzed data from the American Community Survey and the Local Arts Index to rank the 15 most creatively inspiring cities in the United States for aspiring young artists and art students. Few people think of Lexington, which came in sixth, when considering locales particularly conducive to art studies, however, it is impressive when you know the top five cities were art powerhouses: New York, Boston, Washington D.C., Los Angeles, and San Francisco. Lexington ranked sixth because of its young student population (13.9% of resident are in school, and 23.7% are aged 18-34). Factors considered in the ranking were student population, % of the population aged 18-34, concentration of art dealers, museums, performing arts institutions and fine arts schools and the number of business classified as “creative industries.”

Bardstown is a USA Today Best Southern Small Town In a partnership between USA Today and 10Best, a panel of experts, chosen based on their extensive knowledge of travel in the American South, picked the initial 20 nominees, and the top 10 winners were determined by popular vote. For four weeks, readers voted on their favorites and Bardstown was selected third on the list of best southern small towns.

Louisville has work Glassdoor released its report on the 25 Best Cities for Jobs and Louisville came in at number eight. The site ranked cities by weighing three factors equally: how easy it is to get a job (hiring opportunity), how affordable it is to live there (cost of living), and how satisfied employees are working there (job satisfaction). As part of the report, they included each city’s median pay for employees, median home value, job satisfaction rating, number of current job openings and population.

Lexington selected as a “Best Place to Live” Lexington is known as the Horse Capital of the World - home of legendary racing champions and some of the world’s most beautiful horse farms. But Lexington, which placed 66 on the 2015 list of the Top 100 Best Places to Live by Livability, is also known for its affordability, vibrant cultural scene, highly educated population, and welcoming vibe that delights both visitors and residents.

The recent floods in Eastern Kentucky devastated the area with over 150 homes destroyed, at least 4 people confirmed dead and more widespread damage than anyone should have to experience. The Eastern Kentucky Board stepped up to help during the state of emergency by raising money and donating supplies to the flood relief efforts. Members from all the affected counties chipped in to do their part.

FALL 2015 KENTUCKY REALTOR® 23

By the Numbers

One in three

The number of U.S. households that say they plan to move in the next five years, according to a survey of 10,000 households by The Demand Institute.

62%

The percent of interested buyers who believe now is a better time to purchase a home compared to last year according to a survey by Chase.

However, nearly 70 percent of prospective home buyers say they worry that they missed the chance to buy at the best time because of rising home prices and 56 percent say they are concerned about finding a home that fits within their budget and that’s located in a quality neighborhood.

30.3%

According to the Census Bureau, the percent of millennials ages 18 to 34 who still live at home with their parents. That’s more than 22 million out of 76 million millennials, including nearly 12 million between the ages of 25 and 34.

2,736

According to the National Association of Home Builders, the average square footage of new single-family homes in the first quarter of 2015, which rose from 2,677 square feet in the fourth quarter of 2014.

84 percent The percent of adults who say that the quality of a home’s landscape and yard would affect their decision on whether to purchase a home or not, according to a new survey by the National Association of Landscape Professionals.

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52 vs. 64

According to a report by Business Insider, Reidland, located just to the east of Paducah, is Kentucky’s most affordable town, with 93.4% of homes falling in the affordable range. The result is a compilation of Census data and several other housing analytics. The report also showed that the median household income in the McCracken County town is $62,387 (more than $20,000 higher than the median for Kentucky overall).

6 4%

The percent of contracts that are settled on time with no delays to closing according to the latest REALTORS® Confidence Index Survey, a survey of more than 1,500 REALTORS®. Twenty-six percent of REALTORS® surveyed identified a delay to settlement, while 10 percent said they have even had a contract terminated prior to closing.

Out of the 60 percent of REALTORS® who reported some type of issue on their contract, 12 percent identified a financing issue; 8 percent had home inspection problems surface; and 7 percent had an appraisal issue.

32 percent

Millennials still make up the largest share of home buyers at this percent, according to a recent generational trends report by NAR.

one half

A recent report from the Joint Center for Housing Studies (JCHS) at Harvard, shows about half of all renters in the U.S. are using more than 30 percent of their income to cover housing costs, and about 25 percent have rent that exceeds 50 percent of their monthly pay.

56 percent

The percent of real estate professionals who call open houses “pointless,” according to a survey by RISMedia. 44 percent said they were “powerful” in the marketing of a home. Regardless of the spectrum, nearly 72 percent of agents claimed to host one to six open houses per month and nearly a quarter of agents said they avoid open houses completely.

Housing Stats

Homes sales, prices continue improvement

A

t the halfway 1st Half 2015 vs 1st Half 2014 point of the year, Board/Association 2015 Sold 2014 Sold Sold % 2015 Median Price 2014 Median Price Median Price % Kentucky is on Ashland Area Board 494 385 28.3% 95500.00 105875.00 -­‐9.8% Central Kentucky Association 261 381 -­‐31.5% 103600.00 80250.00 29.1% track to sale more homes Eastern Kentucky Association 249 225 10.7% 106375.00 98000.00 8.5% this year than in any other Greater Louisville Association 7485 7049 6.2% 149625.00 134580.00 11.2% year since 2006, which Greater Owensboro Board 656 567 15.7% 114250.00 109500.00 4.3% set a state record during Heart of Kentucky Association 985 862 14.3% 130750.00 116075.00 12.6% the boom. Through the Henderson-­‐Audubon Board 191 184 3.8% 110375.00 114450.00 -­‐3.6% first six months of the year Hopkinsville-­‐Christian Board 209 200 4.5% 118187.50 93200.00 26.8% (January – June), Kentucky Kentucky-­‐Barkley Lakes Board 169 135 25.2% 106450.00 105025.00 1.4% saw home sales reach 22,429 Lexington Bluegrass Association 5555 5123 8.4% 141500.00 135150.00 4.7% 564 639 -­‐11.7% 128100.00 124000.00 3.3% versus the 21,241 sold in the Madison County Board Madisonville-­‐Hopkins Board 220 190 15.8% 105500.00 105000.00 0.5% same period in 2014. The Mayfield-­‐Graves Board 134 189 -­‐29.1% 74500.00 70750.00 5.3% 5.6 percent increase over Murray Calloway County Board 182 154 18.2% 133250.00 107250.00 24.2% the first half of the year is Northern Kentucky Association 2820 2783 1.3% 136750.00 130880.00 4.5% only 842 home sales shy Old Kentucky Home Board 284 261 8.8% 114750.00 112500.00 2.0% of the record. As for home Paducah Board 402 327 22.9% 123250.00 129000.00 -­‐4.5% prices, they have surged as REALTOR® Association of SKY 1049 1048 0.1% 137625.00 122475.00 12.4% well. The median price in Somerset-­‐Lake Cumberland Board 376 409 -­‐8.1% 104750.00 93100.00 12.5% South Central Kentucky Association 144 130 10.8% 108500.00 107875.00 0.6% the state reached $117,188 Grand T otals 22429 21241 5.6% 117188.00 112375.00 4.3% over the first six months compared to $112,375 for 2014, an increase of 4.3 percent. In 2006, the record year for home “Buyers are taking advantage of the current environment of low interest sales, the median price in the first half of the year was $109,924. rates and an improving economy to find their ideal home. The pent up demand is showing itself as the year progresses.”

Looking at the second quarter of 2015, homes sales reached 13,630, the highest of any year on record, exceeding the 13,328 sold in 2006, and increasing 7.8 percent over the 12,642 sold in 2014. Median home prices reached $123,000 in the second quarter of this year, also the highest on record for a three month period. In comparison, the national median home price jumped to $229,400 in the second quarter, making Kentucky’s housing market quite affordable when compared nationally.

“Even with the inventory shortages that are being reported across the state, home sales are still finding a way to happen,” stated Norman Jones, president of the Kentucky Association of REALTORS® (KAR).

Within the state, June saw a tremendous uptick with 5,314 homes sold versus 4,698 in 2014, an increase of over 13 percent. The June median price of $132,307 was up over 14 percent from the $115,586 reported in 2014.

The good news for home owners, both in Kentucky and across the country, is that negative equity is being stripped away with the pricing increases. Lawrence Yun, NAR’s chief economist, has stated “the ongoing rise in home values in recent years has greatly benefited homeowners by increasing their household wealth.”

FALL 2015 KENTUCKY REALTOR® 25

Legal Update

Should sellers disclose drug labs?

by Jason Vaughn

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n recent years, methamphetamine labs have become a large problem spreading throughout the Midwest region and specifically, the Commonwealth. Methamphetamine, more commonly known as “meth,” is a highly toxic, addictive stimulant that is “cooked” in makeshift labs. These labs have rapidly increased due to the drug being relatively cheap and easy to produce using over-the-counter ingredients.

Many of these labs are often found in homes that are later sold to buyers, who mostly have no idea about the toxic and dangerous activities that previously occurred on the property1. Poisonous substances may be saturated deep inside the home’s surfaces including the insulation, drapes and carpeting.2

law rule requiring sellers to disclose latent defects. A latent defect is not discoverable by reasonable inspection.4 For example, if a prospective buyer walks into a home and notices burn marks or chemical staining on the walls or counters, strange odors, blacked-out windows, then this property damage could be patent defects from which a reasonable buyer could visually recognize the existence of a possible meth lab. However, if the home was previously cleaned up, the prospective buyer could walk in and see no visual signs of previous meth activity. The hidden contaminants left on the counters, walls, and carpets are latent defects, which the buyer will remain unaware of unless he hires an inspector to test specifically for the drug.

Generally, after a meth lab is discovered by law enforcement, a company is hired to clean the site. There are not national guidelines or standards that address the issue of cleaning up the toxic waste found in meth homes. These regulations are deferred by the federal government to the states which leaves room for lax standards and bad certification methods for licensing meth lab cleanup companies.

This leads to issues with the overall process of decontaminating a meth lab home. While the bulk of the lab-related debris is usually removed, often times small amounts of the chemicals may still be present in contaminated sinks, drains, ventilation systems, carpets, and other absorbent materials that are not removed nor cleaned. Therefore, the subsequent owners of these homes may be exposed to toxic chemicals by simply breathing the air or touching surfaces inside homes that are still contaminated. These leftover contaminants can be harmful to people when they are exposed to them.

Health problems include respiratory issues, skin burns, eye irritation, headaches, nausea and dizziness.3

Furthermore, thirty-six years later, the Kentucky legislature passed legislation that imposed a duty to disclose on all sellers of residential property, which are listed by real estate brokers. The statute created the commonly known Seller’s Disclosure of Conditions Form, requiring the seller disclose any knowledge or information he has about the condition of the basement, roof, water supply, sewage service, and the working condition of component systems.

Currently, there is a nationwide question as to whether or not

While Kentucky has imposed some duties on sellers, the Indiana legislature has gone even further to specify those duties pertaining to disclosure of drug labs. In July 2014, Indiana passed a new state law, IC 32-215-7, that requires the sellers to disclose to potential buyers of property if a meth lab was found in the home previously. Effectively, Indiana’s Seller Disclosure Form was modified after the law was passed and it now contains two new areas a seller must address - if there has been manufacturing of meth on the property and whether or not the property has been certified as decontaminated by a state-certified individual.5

the former use of a home as a drug lab is a defect that the seller

of residential property is required to disclose.

Currently, there is a nationwide question as to whether or not the former use of a home as a drug lab is a defect that the seller of residential property is required to disclose.

It is necessary to provide some historical context of seller duties in the Commonwealth. In 1956, the Kentucky Court of Appeals carved out a large exception to the caveat emptor doctrine by establishing a common

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Importantly, Indiana is not the first state to pass legislation that requires sellers to disclose information about methamphetamine. In 2009, Indiana’s bordering neighbor, Illinois, passed the Residential Real Property Act to require sellers to disclose knowledge they have of the property being used for the manufacturing of methamphetamine.6 Nationwide, there has been a push for legislation to protect the public against meth-related issues.

When looking over Kentucky’s Seller’s Disclosure Form, nowhere in the document are the words “methamphetamine,” “controlled substance,” or “decontamination.” The arguably closest area on the form is Paragraph 10(l), which asks if there are any environmental hazards known to seller.

What does “environmental hazards” mean in this context? The form does not supply the seller with a definition or any sort of examples to indicate a clear meaning. Therefore, the seller could argue that in their subjective standard, a previous meth lab should not be deemed an “environmental hazard” and subsequently interpret that language to suggest that they do not have an affirmative duty to disclose any previous meth production.

This is where the issue for Kentucky courts, legislators, real estate brokers and practitioners arises: is the manufacturing of methamphetamine in a residential structure on the property a latent defect? Does the seller have a common law duty to disclose the knowledge?

When determining whether a seller has an affirmative duty to disclose to prospective buyers the past meth manufacturing on the property, it is important to determine where exactly Kentucky law currently sits.

While Kentucky does not have a methamphetamine area on the Seller’s Disclosure Form, KRS § 224.1-410 does require that a property owner, who chooses not to decontaminate a property contaminated by the production of methamphetamine, shall disclose the contamination in writing to address the presence of the condition to all prospective buyers, tenants, and lessees of the property. That notice can be removed once the site is decontaminated pursuant to the requirements set out in the statute.7 This statute indicates that Kentucky is aware of the potential dangers innocent parties face when they reside in a residential property that was once used for meth manufacturing. Although this statute provides some rights to prospective buyers, its coverage does not prove enough definitive protection against the risks of living in a home that was previously contaminated with meth.

As mentioned, before the Seller’s Disclosure Form was created by state statute, common law provided disclosure requirements in real estate transactions. In Kentucky, a seller is liable for failure to disclose a latent defect when he or she has knowledge about one, and does not share this knowledge with the buyer, who is acting on the assumption that no defect exists. Past methamphetamine production could arguably arise to the level of latent defect, since the contaminants are not easily

Check out KAR’s newest member benefit the Legal Hotline for direct access to a qualified attorney. kar.com/hotline

discoverable unless the prospective buyer contracts services to have the house tested specifically for the drug. Would you, as a prospective buyer, think to take this precautionary measure? Possibly not. While buyers generally cannot recover for damages under caveat emptor, sellers should be aware that failure to disclose knowledge that the property was formerly used for meth production could possibly lead to claims that the seller failed to disclose a latent defect and committed fraud or fraud by omission.

Currently, Kentucky does not have a statute that specifically requires sellers to disclose any knowledge they have about previous meth production on the property after it’s been cleared under KRS § 224.1-410 and there is not a specific area addressing it on Seller’s Disclosure form, However, Kentuckians should pay attention to future statutory changes made by the legislature possibly adding a methamphetamine section to the Seller’s Disclosure Form within the next couple of years. Additionally, it’s important for sellers to remember that the historic common law rule pertaining to latent defects, set out over fifty-nine years ago, still exist.

Considering the toxic contaminants and health problems that usually result from the leftovers of meth labs, a court could very well hold a seller liable for damages if they had knowledge of this potential risk and failed to disclose it to the buyer based solely on common law. Subsequently, real estate brokers and agents should advise their clients to disclose of any knowledge of past meth production on the property to prevent such litigation

Citations 1 http://money.cnn.com/2013/02/12/real_estate/meth-lab-house/ 2 Id. 3 http://www.deq.state.ok.us/LPDnew/methlabs/meth.htm 4 Black’s Law Dictionary 342 (Bryan A. Garner ed., 7th ed. abridged, West 2003). –Pulled this from Rizzo 5 https://www.angieslist.com/articles/indiana-meth-law-giveshomeowners-realtors-new-tool-avoid-drug.htm 6 http://www.americanbar.org/content/dam/aba/publications/rpte_ ereport/2009/october/rp_gomez.authcheckdam.pdf 7 KRS § 224.1-410 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 2015 KENTUCKY REALTOR® 27

Business Tip

It’s A Price War to the Door J

ackie Leavenworth believes there’s a way to position properties to have them sell and still have a happy seller.

Known as “Coach Jackie” to students all across the country, Leavenworth said the Internet has changed how properties should be priced, so she recommends a different approach to pricing.

“When we price a house based solely on a CMA (comparative market analysis), it doesn’t tell us how people are searching on the Internet,” she said. “Too many REALTORS® are afraid to tell sellers the truth and properties don’t get priced properly.”

Leavenworth, based in Cleveland, said because consumers begin home shopping on the Internet, that becomes the property’s first showing.

“How we position the home on the Internet will determine how many second showings we get,” she added.

She suggests looking at homes and their prices on the Internet through the buyer’s eyes. Then look at the property through the appraiser’s eyes with the CMA. “By putting the two thought processes together, we can properly position a home,” she said. “The bottom line is that when we just do a CMA, it’s pricing through an appraiser’s eyes without regard to the buyer’s perception.”

A buyer shopping on the Internet typically selects a large price range, like $200,000 to $250,000 in a large geographic area many times without details like four bedrooms, two-and-a-half baths and two stories. The search site then gives them all the homes in that price range and they look through those properties, usually beginning at the lowest price range.

“The truth is that buyers will come to an appointment saying they want a two-story with four bedrooms and two-and-a-half baths in a specific school system,” she said. “But many times they end up buying a three bedroom, one-story home in a different school district because it was a better value in their price range.”

By showing sellers how this new pricing system works, Leavenworth said it helps sellers become more realistic about the market. “And that’s our ultimate goal, to bring sellers’ expectations closer to today’s reality,” she added.

“Sellers are unrealistic about the price of their home because they’re hurting,” Leavenworth said. “Sellers need more money out of their home than the market will bear and it makes them sad and unrealistic.

Using a different, unique and easy approach (Leavenworth’s Dartboard Approach and Shopping Cart Report), helps show them the true competition for their home.”

Leavenworth believes too many properties are overpriced in today’s market. “I don’t believe we’ve ever had a shortage of buyers. We’ve had a shortage of realistic sellers. If a home is priced right, it sells in any market but it has to be priced for the current market.

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5 1.

Pricing Tips from Coach Jackie Leavenworth

Never set a list price for a home, give a range and let the seller pick the exact price.

2. Stop using the term “active listings,” it suggests that there is “activity” on all of those listings. A better term would be “unsold listings.”

3.

Stop using the word “price” in your presentation. Price means worth or value and suggests that whatever number that is reflects what the home is worth. The word “position” is simply to place something among others.

We should be positioning homes among the competition, not establishing perceived value.

4. Help the seller see their home through the buyer’s eyes…“It’s a Price War to the Door” and it begins on the Internet.

5.

First showings are no longer in the home, they are on the Internet, help the seller understand the new world of selling homes.

Jackie Leavenworth, ABR, CRB, CRS, GRI, SFR, was an instructor at the 2015 KAR Convention & Expo in Owensboro on September 24-26. Her humorous, engaging style delivers distinct and unique strategies taken from over 30 years of award-winning success as a top producer, a manager of a large real estate brokerage and an in-demand international presenter.

Coach Jackie brings skill enhancements and dialogues to life with insights from her extensive training in DISC behavioral patterns and her spot-on observations about people and communication.

Up to Code The “Facts” about Article 2 of the Code

C

onsumers frequently call the Kentucky Association of REALTORS® to ask real estate related questions. Many times, they are referred from the local REALTOR® association and ask how to file an ethics complaint against a REALTOR®. Often, they ask about making a change to their listing contact or ask about the process of submitting an offer to purchase on a house. They may ask about the laws in Kentucky that govern real estate transactions, or who sets the time for the closing on a property. They may ask who supplies the information that is listed in the MLS, or inquire about appraisals or interpreting property inspection reports.

any material fact that could affect a reasonable purchaser’s decision to purchase, or the price that a purchaser might pay, should be disclosed as required by Standard of Practice 2-1 if known by the REALTOR® unless, again, otherwise prohibited by law or regulation. Such factors include, but are not limited to, those factors that might affect the habitability of the property. Other factors that do not affect the habitability of the property may nonetheless have an effect on the desirability of the property, the price a reasonable purchaser might pay for it, or the potential purchaser’s ability to resell the property at a future date.

In the Code of Ethics and Arbitration Manual, NAR provides guidance to REALTORS® and ethics hearing panel members who are asked to determine whether a violation of Article 2 has occurred. An excerpt of Appropriate Interpretation of “Pertinent Facts” as Used in Article 2 of the Code of Ethics is provided below, and may prove helpful to REALTORS® as they navigate the sometimes murky waters of property condition disclosures.

it would be to establish a “procuring cause” template or rule that would define with precision, in every instance, entitlement to compensation in an otherwise arbitrable situation. Rather, reasonableness and common sense must be relied on in making such determinations. The question that Hearing Panels should consider in determining whether a REALTOR® has exaggerated, misrepresented, or concealed a pertinent fact is whether disclosure of the fact in question could have had an effect on a reasonable purchaser’s decision. If the Hearing Panel concludes that the fact was material and was adverse but not necessarily subject to Standard of Practice 2-1’s discovery requirement, but was known by the REALTOR® and could have influenced a reasonable purchaser’s decision, then exaggeration, misrepresentation, or concealment of that fact could be the basis for finding that Article 2 had been violated. (Approved 4/91)

Hearing Panels should also consider that a once-pertinent factor can, in some instances, diminish in relevancy over a period of years. For example, Article 1 of the REALTOR® Code of Ethics is the most frequently cited a traumatic death that occurred recently in a home could have a greater article in the written ethics complaints received by KAR. Article 1 states influence on a reasonable purchaser’s that REALTORS® protect and promote decision than a similar occurrence your client’s interests, but REALTORS® Article 2 states twenty, fifty or one hundred years must be honest with all parties. The earlier. By way of further example, topic consumers most frequently want to REALTORS® shall avoid exaggeration, the fact that a former occupant had discuss with staff on phone calls relates died of scarlet fever fifty years earlier to Article 2 of the REALTOR® Code misrepresentation and concealment would likely have less of an effect on a of Ethics: REALTORS® shall avoid of pertinent facts relating potential purchaser’s decision than the exaggeration, misrepresentation and fact that there had been a murder on concealment of pertinent facts relating to the property or transaction. the premises within the past year. to the property or the transaction. Most often the “pertinent facts” have to do It is no more possible to establish a with property condition disclosures. black-letter definition of “pertinent facts,” as related to Article 2, than

A number of states have chosen, either through legislation or by regulation, to specify that real estate licensees have no obligation to discover or disclose certain facts regarding a property or its former or current occupants. In some instances, the disclosure of such information is expressly prohibited. In still other instances, states have chosen not to provide such guidance, and REALTORS® and others have looked to a variety of sources for guidance. The Code of Ethics, which frequently establishes duties and obligations higher than those required by the law, must give way when those obligations conflict with the law. If the law prohibits disclosure of certain types of information, for example, to potential purchasers, then the Code of Ethics must not, under any circumstances, be read as requiring such disclosures.

If you have any questions or would like any additional information regarding Professional Standards, please contact Julie Johnson, Director of Professional Standards, at jjohnson@kar.com.

At the same time, where the law simply provides that there is no express or implied duty to discover or disclose pertinent factors, the duties imposed by Article 2 come into play. Absent a legal prohibition,

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A Day in the Life of...

A Day in the Life of… RPAC Donors and Hall of Fame Members Charlie Murphy — Lexington - NAR President’s Circle, Golden R, NAR Hall of Fame Member John Weikel — Louisvile - NAR President’s Circle, Golden R, NAR Hall of Fame Member How many years have you been in real estate?

Charlie Murphy: 55 years, opening my own brokerage in 1960.

John Weikel: Officially since 1976. As a second generation REALTOR® member, I fondly recall “helping” my father prepare for an open house at age six in 1963.

When did you make your first RPAC contribution?

CM: In 1969 I contributed $99 because I was ask to give.

JW: My first contribution was to the $99 Club in the late 1970’s because I was asked by the RPAC Chairman at my local Board.

I believe that it is important to give back to our industry and was taught early on that contributing to RPAC was essential to promote the REALTOR® point of view.

What made you want to become a major investor in RPAC?

CM: To protect the American Dream of Charlie Murphy Homeownership, which in turn promotes the local economy, provides a method of building long term wealth and maintaining the mortgage deduction to name a few benefits. The most important outcome is for the door of the legislator to always be open to REALTORS®.

JW: My first major contribution was in 1981. The recession of that era was at its worst and it was my belief that our industry needed to get the attention of elected leaders by standing together. My board RPAC Chairman let me make ten monthly payments of $100 each. That is how my first RPAC Major Investment was made. Then, as president of KAR in 1998, I solicited the members of KAR’s Board of Directors to become RPAC Major Investors. I promised each RPAC Major Investor on the KAR BOD that I would match their 1998 contribution when they became president of KAR.

RPAC protects the industry but what is the most important aspect of RPAC to your business?

CM:: Since 1969, RPAC has promoted the election of pro-REALTOR® candidates across the U.S. REALTORS® raise and spend money to elect candidates who understand and support their interests. The money to accomplish this comes from voluntary contributions made by REALTORS® and are not members’ dues; this is money given freely by REALTORS® in recognition of how important campaign fundraising is to the political process. RPAC opens the door for discussions with legislators and leaders at the local, state and national level.

JW: RPAC participation has given me the opportunity to meet elected leaders of both political parties at all levels of government: local, state and federal.

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What would you say to another REALTOR® that is struggling to get off the fence and invest in RPAC? CM: It is time to put partisan politics behind us and work with leaders on both sides of the aisle who are fighting to keep homeownership alive. Studies have shown that home ownership has a significant impact on net worth, educational achievement, civic participation, health and overall quality of life.

JW: Every successful member of the REALTOR® family should contribute to the future of our industry to the best of their ability.

You are heavily involved in the political process. Why do you stay so involved and what does that do, in your opinion, for the real estate profession?

CM: I am very proud of my sustained 46 year commitment to RPAC. My contributions have helped put in place policies that benefit my personal brokerage and for the benefit of my peers, all of which John Weikel benefits buyers and sellers. And just as importantly, my investment has helped to keep harmful legislation from becoming law.

JW: It is critical that we, as REALTORS® maintain our support for homeownership and free enterprise. RPAC keeps the doors open so that we have that opportunity to speak with elected leaders. There is a saying in government, that you can either have a seat at the table, or you can be what’s for dinner. RPAC gives REALTORS® a seat at the legislative table so that we can vigorously promote our issues.

Over the years of being involved, what has been the biggest success story to come from the RPAC arena?

CM: Seeing the evolution of the Advocacy component of the REALTOR Party develop and grow to encompass homeowners in the importance of private property rights and how they can be involved in the process.

JW: There have been too many to list... RPAC’s greatest success story is in the future and will be written by every member that steps up and invests in RPAC both today and tomorrow.

Outside of business, what is your favorite past time.

CM: Traveling, cooking, spending time with grandchildren and raising a 14 year old young lady!!

JW: Cooking for family and friends as a way to bring people together is my favorite past-time activity at this point in life. Photography and travel are great when time permits.

What is the best advice you have ever received?

CM:Treat people the way you would like to be treated. Live by the golden rule.

JW: Listen to all sides of an issue before making a decision.

Learn more at: APHW.COM/REPORTAL Linda Donnelly - Kentucky Area Sales Manager 513.479.2505 | ldonnelly@aphw.net FALL 2015 KENTUCKY REALTOR速 31

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