KYREALTORSpring10

Kentucky

REALTOR ®

Spring 2010

A publication of the Kentucky Association of REALTORS®

SIGN UP NOW, PAGE 15 Kentucky Open House Short Sales: 7 Legal Pitfalls Which Phone to Choose?

What’s that? (see page 21)

www.kar.com

Contents

Volume 3, Number 3, Spring 2010

IN THIS ISSUE 4

KAR News A publication of the Kentucky Association of REALTORS®

President John W. Smither, GRI Lexington-Bluegrass Association of REALTORS® President-Elect Tony Clark, ABR, CRB, CRS, GRI Owensboro Board of REALTORS® Treasurer Kevin Farris Heart of Kentucky Association of REALTORS® Treasurer-Elect Ronald E. Hughes, ABR, CRS, GRI Paducah Board of REALTORS® Executive Vice President Susan W. Helm, RCE susiehelm@kar.com Communications/Education Director Hunt Cooper hcooper@kar.com Address letters and inquiries to: Kentucky REALTOR® 161 Prosperous Place, Suite 100 Lexington, KY 40509 TF 800.264.2185 T 859.263.7377 F 859.263.7565 www.kar.com email: hcooper@kar.com KAR members should always send address changes to their local board/association first.

Subscription rates: $10 per year (included in dues) for members, $25 per year for nonmembers.

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

Periodicals postage paid at Lexington, KY. POSTMASTER: Send address changes to Kentucky REALTOR®, 161 Prosperous Place, Suite 100, Lexington, KY 40509.

All articles represent the opinions of the authors and do not necessarily represent the opinions of Kentucky REALTOR® or KAR and should not be construed as a recommendation for any course of action regarding financial, legal or accounting matters by KAR or Kentucky REALTOR® and its authors.

Reproduction prohibited without permission.

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

Which Phone to Choose?

10

Hill Visits a Success

16

Short Sales

18

Will You Have the ‘Touch’? 20 KAR Bylaws

29

REGULAR FEATURES President’s Message

5

Tools You Can Use

6

Legal Update

8

Legislative Issues

13

Education

19

Local Association News

22

By the Numbers

24

Housing Stats

25

Community Profile

26

From the Helm

28

Code of Ethics

29

A Day in the Life of...

30

SPRING 2010 KENTUCKY REALTOR® 3

KAR News Kentucky Open House Weekend April 10 - 11 www.kar.com > Events > Open House

The Kentucky Association of REALTORS® has teamed up with associations across the country for one weekend of Nationwide Open Houses. The purpose is to encourage those who are thinking of buying a home to take advantage of unique home market factors and the federal first-time home buyer tax credit that expires on April 30th. This is the first event of its kind nationwide.

Be sure to include your open houses for that weekend on the MLS and in other promotions you are putting together! We'll be directing the public to the KAR website and you can direct

them to your listings on the MLS or personal sites as well. This is at no cost to you! KAR will be sending free balloons to your local association, available for you to tie to your open house signs and will be providing free tools on the website to help build excitement and participation among REALTORS® for Kentucky’s first statewide Open House event. Tools include event flyers and ads, graphics, press announcements and other promotional documents. NAR will be promoting the event on a national level.

NAR’s HouseLogic

REALTORS® Property Resource

www.houselogic.com

blog.narrpr.com NAR has just launched its new HouseLogic website to the public although the site has been open since last fall for REALTORS®.

HouseLogic, a comprehensive consumer website about all aspects of homeownership, helps homeowners make smart decisions and take responsible actions to maintain, protect and increase the value of their homes. The free site helps homeowners plan and organize their home projects and provides timely articles and news; home improvement advice and how-to’s; and information about taxes, home finances and insurance. Unlike other homeownership sites, HouseLogic helps consumers view their home through a financial lens and make smart, informed home improvement investment decisions. Users who register can save relevant information, create to-do lists and set project reminders.

The site can also be customized for individual homeowners depending on how handy or ambitious they are regarding home projects; how much money they want to spend or save; where they live; and their priorities, such as increasing the value of their home or improving their neighborhood. There's also a special section for members to access informative content for your own newsletters and websites. For this feature, go to www.houselogic.com/members.

Be sure to tell your clients about it. The site has already won the Outstanding Achievement Award from the Interactive Media Awards.

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The REALTORS® Property Resource® (RPR), the massive property data project, which will contain information on more than 140 million properties across the country, has been the buzz of the industry since it was unveiled at the REALTORS® Conference & Expo in November 2009. It is expected to be available through select MLSs by May with a March launch in beta testing for multiple markets.

According to Jeff Young, senior vice president of operations, there are still opportunities for input from MLSs, association leaders and members from across the country. “The response to the beta testing and RPR User Advisory Council has been very positive. The RPR is a very fluid project and is likely to gain even more support as the potential of the RPR system is seen by more and more members.”

RPR is a wholly owned subsidiary of NAR and recently launched a blog to help explain exactly what the database will provide for associations and members. The blog contains a 28-minute demo video, posts and comments from visitors, a lengthy FAQ section and a subscription newsletter.

President’s Message A Forecast on the Year to Come

2010 will be a very interesting year for REALTORS®. We face turbulent economic times as well as divisive political times. If there was ever a time for us, as an industry, to unite to save each other, it is now.

Trying to make a living seems to get harder by the day. But you know if we don’t take care of the little things that happen along the way, then we tend to lose sight of what we need to do to survive.

“Do you realize if 9,600 Kentucky REALTORS® give $15.00 to RPAC, what a powerful voice we could be?”

We understand that jobs are the well-kept secret to this country’s economic recovery. That fact is scary knowing we cannot control the employment market.

Wait a minute. We can have an impact if we unite to tell Frankfort and Washington that we need extensions on the tax credit and other progressive changes to spur growth. They (i.e. legislators and others within the agencies who can influence change) will listen if we stand 9,600 strong and arm ourselves with RPAC dollars.

So I will let you decide. Are you going to trust 13% of our members supporting RPAC to try and save you or are you going to help all of us to be heard?

Do you realize if 9,600 Kentucky REALTORS® give $15.00 to RPAC, what a powerful voice we could be? If my math is correct, that is a total of $144,000 and none

John Smither, 2010 KAR President

of us can say we cannot afford that – it’s equal to a lunch or a few cups of coffee. We all know that if the real estate market is moving then jobs are created and we can pat ourselves on the back.

Now on to the bright side. Your Association is going to work very hard to bring more services across the state to each of you. We are negotiating with companies and will continue throughout this year looking for vendors that have products we would like to use in our business, but individually, cannot justify the cost. Believe me, we will be using you to get just that.

One price fits all. So keep on the lookout for important announcements throughout this year.

Just remember, this is your Association and I hope that you will take the time to come to your quarterly Association meetings this year and consider becoming more involved at the state level.

Playing off a quote by a former president – “Ask not what your Association can do for you, ask what you can do for your Association.”

Your fellow REALTOR®,

John Smither 2010 KAR President

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KENTUCKY REALTOR® 5

Tools You Can Use Marketing Minute iPhone App Released by Realtor.com Realtor.com has released a dedicated iPhone app that allows users to search the site's 4 million listings on the go.

The Realtor.com iPhone application includes a onetap call capability that connects users with the listing agent for additional details or to arrange a tour.

Homebuyers can also synchronize the app with their Realtor.com account, making it easy to find previously saved homes, and also store their agent’s contact information in order to send comments about properties they are interested in.

The iPhone app sorts, refines and filters search results for every property listed on Realtor.com by price, location, property type, MLS ID number, square-foot, lot size, upcoming open house events, distance from a user's current location, and age of home. Results are returned in a map or list view, and the app can map the route to properties that users want to visit in person using the iPhone's Global Positioning System (GPS) satellite location tracking capabilities.

Users can identify open houses within a 20-mile search radius from their current location, and get directions to those properties that are updated as they drive or walk to each location.

Search for the Realtor.com iPhone app at the Apple's iTunes store – it’s free.

Realtor.com offered an alternate version of the Web site optimized for the iPhone, but accessible to other smartphones and any Web browsers at iPhone.Realtor.com. Realtor.com also offers a mobile app for smartphones running the Windows Mobile operating system.

Source: Inman News

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Evernote www.evernote.com Evernote is basically your giant file cabinet in the sky that can grab and store web pages; a desktop application that you can stuff with all kinds of files, including text documents, voice notes, images, PDFs, Web pages and anything else you can think of; and a mobile application that you can use to store a variety of items and access them while on the go.

Once you have things in Evernote, the software stores it all in the "cloud,” aka a remote server that you can access from anywhere you can access the Web, such as your computer or phone. It syncs all the data across all platforms so it’s always up to date no matter where you are. Evernote makes all the information searchable and even reads text in images and photographs and makes that text searchable. Yeah, those photos of business cards you take with your iPhone: searchable.

TinEye www.tineye.com This free program touts itself as a “reverse image search engine.” Upload an image to them and they’ll search the interwebs reporting back to you who has used your image (properly or improperly). A great use would be for real estate agents who take photos of external areas for their listings such as parks, landmarks, neighborhood highlights, etc. and discover their shots being used by other agents without their permission. Conversely, you can submit an image to TinEye to find out where it came from, how it is being used, if modified versions of the image exist or to find higher resolution versions.

4 Tips for Taking Better Real Estate Photos Larry Lohrman, author of “Learn Real Estate Photography and Real Estate Photographer Stimulus Package e-books,” offers these key tips for shooting the best real estate photos.

• Get the best photo you can of the exterior because that’s the one that will persuade potential buyers to look at the rest of the photos.

• Emphasize the home’s best points. Make sure you include a picture of the area the sellers think is its most attractive selling point.

• If possible, shoot the exterior shot a half hour before or after sunset with all the interior lights turned on.

• Hold the camera straight. Using a tripod is always a good idea.

If you want to see firsthand why photos are important to real estate, visit lovelylisting.com.

Dropbox www.dropbox.com Dropbox is a great example of how document management has changed through the technology revolution. It's a simple application that lets you store your files securely in the “cloud.” Dropbox makes sharing documents, presentations and photographs a breeze. Best of all, it's free (a free account nets you up to 2GB in storage space; "Pro" accounts expand your storage capacity up to 100GB and a cost per month).

Download the Dropbox application, create an account, and once up and running on your computer, your Dropbox folders show up like any other folder on your desktop. Simply drag a file into the folder and it’s automatically synced to Dropbox's remote servers. You can access the files through the Web from remote locations (there’s also an iPhone app) and share files with team members and clients through a “public” folder.

Other online document management programs are available and many with free account options: • GoogleDocs • Zoho • Box.net • filesanywhere.com

Gist www.gist.com Gist is an online service that helps you build stronger relationships. By connecting your inbox to the web, you get business-critical information about key people and companies. In essence, Gist helps you know more about who you know.

The application is part of a movement under way among makers of customer relationship management (CRM) tools to incorporate all of that social stuff into useful platforms.

You give it access to your Facebook, LinkedIn, email, Twitter and anything else you can manually enter or upload as a CSV file. Then Gist consolidates all of those leads, creates a list of all the people in your network, and hunts down their social media content streams.

From that point on you can get a custom display of social media published by any of your contacts at any time. You also get a dashboard view of all the content created by all of your contacts. And you can share any of that content from one network to another. It’s free and has an iPhone app.

Bits and Bytes A Cell Phone With a Projector?

It seems like technology that could never happen, unless it was very distant future technology.

But it is a feature that has probably been dreamed of

by REALTORS® and would get the attention of many practitioners if such a beast existed. Well, guess what – the wait is over.

AT&T and LG introduced, late last year, this technology to market - a phone with a built-in projector that can be used for many things including listing presentations, property descriptions and other business applications. Since this announcement, other options have hit the market such as the Samsung Show and the Logic Bolt but here is the scoop on one of the first mainstream devices known to hit the U.S. The Windows 6.5 smartphone has a 5 megapixel camera, GPS and a QWERTY keypad, but the real killer feature is the Pico projector, available as an optional feature (at the time, it was $179 for the projector option).

For as long as phones have had multimedia functions and Internet connectivity, it’s been the custom to pass a phone around when you want to show someone a picture or video. What if you want to show several people the same thing at the same time, though?

Wouldn't it be nice not to have to worry about making sure a full-size projector is available at your next presentation on the road? Better yet, wouldn't it be nice not to always have one in tow?

Keep an eye open for this technology to develop and spread. In the meantime, there are options for smaller pocket-sized projectors that work with laptops and mobile devices. Might be worth some investigation.

SPRING 2010

KENTUCKY REALTOR® 7

Legal Update 2009 Kentucky Court Decisions - Overview

T

his legal update for the Kentucky REALTOR® reviews a number of Kentucky court decisions from 2009 that may be of interest to you.

Betsy Wilson Realty, Inc. v. Linda Green In an unpublished opinion, the Kentucky Court of Appeals reviewed a dispute involving a real estate sales commission. In this case, the Listing Agent entered into an “Exclusive Right to Sell” Agreement with Developer to sell lots in the Developer’s new neighborhood in Danville, Kentucky. The parties extended the Agreement a number of times. While operating under the Agreement, Broker received a commission and paid the Listing Agent based on a formula set out in the Broker’s policy manual.

At some point, Developer decided to sell the remaining lots in the neighborhood at public auction.

Broker referred Developer to a licensed Auctioneer, who was the Broker’s brother. Auctioneer entered into an auction agreement that provided for payment of a five percent commission to Broker from the proceeds of the auction. The parties all testified that auction commissions were traditionally spit one-third to the Auctioneer, one-third to Broker, and one-third to the particular listing agent.

Before the auction, the Listing Agent notified the Auctioneer that Listing Agent was not available to attend the auction due to a previously scheduled vacation. Auctioneer advised that the Listing Agent would only be paid one-sixth of any commission rather than the traditional one-third. Listing Agent offered to arrange for someone to work the auction so the Listing Agent could receive her one-third fee. The Auctioneer would not agree to this. Despite her dissatisfaction with the reduced fee, Listing Agent helped with pre-auction preparations by making telephone calls, gathering documents, arranging for mowing and clearing of the property, and passing out fliers.

There was evidence that before the auction, Listing Agent’s husband disparaged Broker and Auctioneer to friends about the reduced fee. As a result, Auctioneer told Listing Agent that she would not get any commission from the auction, and Listing Agent quit Broker’s agency.

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Listing Agent filed suit against the Broker to recover what was owed to her. At trial, a jury found for Listing Agent and awarded compensatory and punitive damages.

On appeal, the Kentucky Court of Appeals reviewed (1) whether Listing Agent had a contractual right to a commission, and (2) whether Broker had any fiduciary duty to Listing Agent.

The Court of Appeals first found that the Listing Agent had a contractual right to compensation.

However, the contract supporting her right to compensation was not the Exclusive Right to Sell Agreement or the Auction Agreement. Instead, the Listing Agent’s right to compensation was based on the Broker’s policy manual and on the Listing Agent’s relationship with the Broker. The policy manual provided for “Salesman’s Compensation . . . based on collected sales commission only.” The Court found that the Listing Agent earned not a commission but compensation based on the policy manual, and that the compensation was simply calculated from the commission earned by the Broker. The Court found that a reasonable interpretation of the policy manual, in conjunction with Broker’s practice, was that Listing Agent was entitled to compensation from the Broker equal to one-third of the Broker’s commission from the auction.

The Court of Appeals also reviewed whether the Broker owed a fiduciary duty to the Listing Agent. The Court of Appeals stated that in Kentucky, a fiduciary duty is a relationship “founded on trust or confidence reposed by one person in the integrity and fidelity of another and which also necessarily involves an undertaking in which a duty is created in one person to act primarily for another’s benefit in matters connected with such undertaking.”

In this case, the Broker had argued that she had no written contract and thus no duty to the Listing Agent.

The Court of Appeals disagreed, and found that the Broker had both contractual and fiduciary obligations to the Listing Agent. The Court found that the Broker was the only person entitled to receive a commission under the Exclusive Right to Sell Agreement, and that under the “policy manual” only the Broker had the right to

recover commissions. Because Broker, when she collected commissions, acted not only for herself but also on behalf of her agents, Broker had a duty to act with integrity and fidelity. Thus, the Court of Appeals found that the Broker in this case owed a fiduciary duty to the Listing Agent.

Brooks Wells, Inc. v. PASW, LLC This case involved the purchase of the Ashland Plaza Hotel in Ashland, Kentucky. Listing Agent approached Buyer regarding the purchase of the Ashland Plaza Hotel. Buyer signed a commission agreement with Broker, and also signed an offer to purchase the Hotel for a total of $2,750,000 that included an agreement to pay Broker a commission if the purchase was completed by November 15th. The offer was not accepted by the November 15th deadline.

In spring of the next year, Buyer’s owners organized a new company that eventually purchased the Hotel for slightly in excess of $4 million. Listing Agent sought the commission provided for in the November 2001 listing agreement and Buyer refused to pay. The trial court granted summary judgment in favor of both Buyer and Buyer’s affiliate company.

In an unpublished opinion, the Court of Appeals reviewed how Kentucky’s Statute of Frauds, KRS 371.010(8), applied to the facts of the case: No action shall be brought to charge any person upon any promise, agreement, or contract for any commission or compensation for the sale or lease of any real estate or for assisting another in the sale or lease of any real estate, unless the promise, contract, agreement, representation,

assurance, or ratification, or some memorandum or note thereof, be in writing and signed by the party to be charged therefrom.

The Court of Appeals found that the purchase offer expired when it was not accepted by the November 15th deadline, and that the commission agreement signed by the parties “related to the purchase offer” written by the Buyer and thus expired as well. Thus, there existed no writing to satisfy the Statue of Frauds.

After finding that the legal theories of quantum meruit and promissory estoppel did not support a recovery in favor of Broker, the Court of Appeals discussed the theory of procuring cause. The Court cited Kentucky’s general rule: A real estate broker is entitled to a commission where he has been the procuring cause of a sale, even though the owner enters into negotiations with the person so procured and consummates the sale... The rule of reason, which seems to be supported by all of the authorities on the subject, is that a broker is entitled to his commission. Although he may not have conducted all of the negotiations leading to the sale, it being sufficient if he set in motion the machinery by which the work was done, which without break in its continuity, was the procuring cause of the sale.

The Court of Appeals found that the legal theory of procuring cause raised sufficient questions of fact that were not properly decided or even addressed by the trial court, and that Kentucky’s statute of frauds did not necessarily bar the Broker’s recovery under a procuring cause claim.

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

The previous discussion should not be viewed as legal advice. Please consult your attorney.

SPRING 2010

KENTUCKY REALTOR® 9

Business Tools

Which Phone to Choose?

by G. William James

ne of the most satisfying perks of my job as a mobile technology consultant is how people seem to value my opinion when it comes to choosing a smartphone, netbook or mobile application. I do my homework, compare the devices as objectively as one possibly can, and after all that, my answer more often than not is, “it depends upon how you intend to use it most.�

O

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“How they (phones) deliver these services will oftentimes be the deciding factor in which device will work best for you.

The other main deciding factor will be the apps.”

Some advisor, huh?

The truth is, there are so many choices to make between smartphone platforms, manufacturers, models and wireless providers, that it can be a confusing proposition, especially if you are relying on your choice to help you in business, first know that there is only a slight difference between devices in terms of the features and capabilities they offer. How they deliver these services will oftentimes be the deciding factor in which device will work best for you. The other main deciding factor will be the apps.

Next time you see a commercial for a smartphone, look closely at what they are presenting to you. They aren't touting the screen brightness or the speed of the processor; they are selling you on the software applications, or apps. The buzzword for iPhone for example is the over 100 thousand apps, and the list is growing. Never mind that to me, over half of them offer no value to a mobile professional, but the sheer number is worth Apple’s advertising focus on them. Google Android boasts 10 thousand apps, while the Palm WebOS devices, Pre and Pixi, are still growing their list, currently around a thousand.

Should this mean anything to you, mobile professional? Not really. If the apps that make you more productive are available on the iPhone as well as the Pre, then how many apps they offer becomes irrelevant. If your device makes it easy for you to access, to navigate and to utilize the application, then you have the right one for you. All smartphones share a core suite of applications: • • • • • • •

Phone Email Text messaging Internet Calendar Contacts Multimedia (photos, video, camera, music, e-reader)

Beyond these, there are conveniences such as calculators and the like, but the variety of other applications depend on what has been developed and offered by the manufacturer. Applications are typically downloaded directly to the phones from the application stores of the manufacturer. Apple has the App Store, Google has the Google Market, while Palm sells through their App Catalog. According to a number of Web sources, the average smartphone user purchases 7 applications per year, with an average cost of $5. Many apps downloaded are free or ad sponsored.

What types of apps do mobile professionals find useful? Here is a sampling: • • • • •

Document management software GPS navigation applications Real estate calculators Sales management tools Database management tools

Apple iPhone seems to be leading the list of most innovative apps so far. With an iPhone, you can snap a photo of a business card which will update to your contacts list, share contact information with another iPhone with a "bump" of the devices, and even identify a song title by allowing your iPhone to hear it while it plays. While these are novelties exclusive to the iPhone, I would imagine them being available on most top smartphones in the near future.

Also available are many “cloud” applications that are accessed on the Web rather than stored on the smartphone, like social networking applications. This to me is the primary reason why the applications are more important to the user than the device. If your smartphone delivers a rich Web browsing experience, then the apps, which eventually will be almost exclusively on the cloud, will provide the data and convenience we want most.

If you are looking to buy the right smartphone for your business, I have some points to consider:

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KENTUCKY REALTOR® 11

This is where your technology budget takes the biggest hit, so make sure you know the bottom line before making your decision final.

Add to this cost the purchase of applications (the national average ranges from $7-$50 per year), and you can see that the smartphone is a major investment in the cost of doing business.

1 Consider for what you will use your device most. Will it be phone calling, or email or surfing the web?

Perhaps maintaining your calendar and contacts will be high on the priority list. Think of the top three, and base your decision on: • Battery life (talk time, standby time, even battery size matters) • Screen size and resolution (could affect battery life) • Form factor (overall size and shape of the device-is it easy to hold and use?)

• Input technology (on-screen keyboard vs. buttons, or the now old-school stylus) • Applications (not the overall quantity of available apps, but having apps useful to your needs) 2 The cost of buying a device these days is hardly a factor in the decision anymore. If you purchase without a contract, the carriers will penalize you with a ridiculous purchase price. What they want is the activation and the two-year service commitment. With that marriage, the price becomes negligible, sometimes even offering a free device (or two) with purchase.

Your major concern here should be the TCO, or total cost of ownership, which includes the cost of service.

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3 Keep in mind that the device generating the most buzz may not be the best device for you. While it may be very appealing, and it seems everyone has one, its liabilities may outweigh the benefits for you. Choose the device that offers ease of use, lots of functionality and offers wireless plans that won't compromise your budget.

Smartphones have greatly changed the way mobile professionals manage their business day. While the wide variety of devices on the shelves become more alike than they are different, the applications play a larger role in what they deliver, and which ones will ultimately be the best for us to use.

About the Author: G. William James is one of real estate's top consultants and trainers of wireless technologies, providing solutions and technologies to achieve ultimate success in real estate. He has presented to the National Association of REALTORS®, numerous state conventions and Real Estate Associations throughout the nation.

Please contact Mr. James at william@pdapowerplus.com.

Reprinted from RealtyTimes, G. William James, February 1, 2010

Legislative Issues KAR’s Top Legislative Priorities HB 78 – Sales Tax on Services (OPPOSE) Applying the sales tax to real estate services is likely to reduce the demand for housing by effectively increasing the cost of purchasing a home. The total impact is based on several reinforcing effects: • Increased closing costs on the transfer of existing residential and nonresidential property • Increased cost of operating a brokerage business • Increased cost of new single family and multifamily housing • A 6% sales tax could have the same impact as raising the mortgage rate by .75% • This is a regressive tax and has the highest impact on those who can least afford it HB 112 – Local Taxation of Businesses (SUPPORT) HB 112 will exempt any proceeds derived by a business entity from the transfer or sale of business property from the definition of “gross receipts” and “net profit” for purposes of local net profits, gross receipts, and occupational license taxes. This bill is a clean-up bill that addresses issues from a bill passed in 2003.

HB 353 – Centralized Revenue Collection (SUPPORT) This bill will develop and administer a Web-based system for the centralized reporting and collection of local occupational license taxes and fees. The system must have the ability to: • Accommodate the payment and reporting of license and occupational taxes imposed against businesses on business income; and occupational taxes withheld by employers from wages paid to employees • Report and pay all local/county occupational license taxes and fees in one transaction with automatic distribution of payment to each local/county government entity

real estate broker to perform a broker’s price opinion or comparative market analysis to be used in lieu of a requested appraisal. KAR is opposed to this bill unless the above changes are made.

SB 96 – Real Estate Licensure Sex Crimes (SUPPORT) SB 96 relates to real estate licensure and would deny licensure for applicants convicted of a sex crime and would revoke the license of person convicted of a sex crime.

HB 348 – Comprehensive Environmental Status Reviews (OPPOSE) HB 348 would require a “Comprehensive Environmental Status Review” where a planning body is creating or considering a comprehensive plan, a plan amendment, a land use or zoning regulation, a subdivision regulation, a public improvements program, etc. The bill includes the following language, “The comprehensive plan shall not authorize development in a location or manner that causes or contributes to violations of the general laws prohibiting air, land, and water pollution.” The requirements of this measure are extensive and include reviews of air, land and water pollution, among other issues. Overall, this bill, if enacted, has the potential to at least delay and ultimately deny any new development.

IMPORTANT (Bills KAR will monitor closely) SB 66 – Regulation of Appraisal Management Companies (SUPPORT with amendment) Senate Bill 66 defines terms related to the regulation and registration of real estate appraisal management companies. KAR recommends the language of Section 5(2)b be stricken. This section would not allow an AMC to hire, employ, or in any way contract with or pay a

HB 357 – KREC Bill / Real Estate Compensation (this bill has been WITHDRAWN) • This bill will exempt employees of builders or developers who receive bonuses for sale of property

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KENTUCKY REALTOR® 13

and employees of property managers who receive bonuses for property management from the definition of “regular employee” • This bill also expands forms of compensation that would require a seller to issue a seller's disclosure of conditions form.

HB 394 – New Home Tax Credit (SUPPORT) This bill will allow qualified buyers of new homes to utilize the new home state tax credit of up to $5,000 in conjunction with the Federal First Time Home Buyer Tax Credit of $8,000 for first time home buyers and $6,500 for repeat home buyers.

SIGNIFICANT (Bills KAR will monitor) HB 123 – Contracts HB 123 will require consumer contracts with an automatic renewal clause have the clause conspicuously displayed in the contract and require that notice of an upcoming renewal period be sent to the consumer.

HB 219 – Crimes and Punishments (Auction Escrow Account) HB 219 relates to theft by deception to include the issuance of a check with knowledge that it will not be honored by the drawee for the lease, rent, or purchase of property, or for payment to an auction escrow account.

customers to impose a lien on their property for any outstanding charges and fees when utility bill is in arrears in excess of $50,000. This lien would take priority over a mortgage, contract lien, or bona fide conveyance under specific conditions.

HB 465 – Residential Property This bill will require a creditor to register vacant residential property with the local government in which the property is located and will create a penalty for failure to comply.

HB 494 – Radon Professionals This bill is relating to radon professionals and making an appropriation thereof. This bill would require certification and regulation of radon measurement professionals, mitigation professionals, and radon laboratories as well as establish the Kentucky Board of Radon Professionals and its appointment and meeting procedures.

HB 496 – Judgment Liens This bill is relating to judgment liens on real property to provide that where the real property is under joint ownership, the lien shall not extend beyond the interest held by the debtor.

GENERAL (Bills listed for informational purposes)

HB 362 – Energy Star Tax Credit HB 362 expands the ENERGY STAR Tax Credit, making it available to S-Corporations, Pass-Through’s, LLC’s and LLP’s.

HB 298 – Collection of Property Taxes This bill is intended to clean up some processes that were established in last year's HB 262. This all relates to stabilizing the 3rd party purchase of delinquent tax bills.

HB 391 – Condominiums HB 391 relates to condominiums and the Uniform Condominium Act. This bill defines relevant terms, provides requirements and procedures for establishment of associations and for the conduct of business. This bill also establishes rights and responsibilities of unit owners, provides criteria related to the sale of units by unit owners and collection of delinquent fees and assessments.

HB 452 – Relating to property tax HB 452 will provide a totally disabled individual with an irreversible disability to report the disability only upon the initial application for the homestead exemption and this would apply to property assessed on or after January 1, 2011.

HB 454 – Utility Lien This bill would authorize utilities that provide gas, electric, sewer or water service to retail business

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HB 569 – Recording of Deeds This bill will require each deed recorded to contain a map index number. This map index number shall be the same map index number on record with the county property valuation administrator.

To increase our influence on important legislation and to help shape legislation that can affect your bottom line, NAR has created the Broker Involvement Program. With strong and united voices, Congress will pay attention to our important real estate issues through this program.

NAR has discovered that when brokers alert their agents to key issues, agents listen and respond. The new Broker Involvement Program is designed to give your principal broker a quick tool to enlist your company’s agents in bringing to Congress’ attention issues of concern to you and your business.

The Program provides your agents a direct communication link to their lawmakers and in just seconds allows your agents to express their opinions on those business issues with a personal letter that’s ready for them to sign and send.

Specifically, the Broker Involvement Program offers: • An efficient and easy to use web-based function, called the Broker Portal, to personalize messages to each of your agents from you requesting their participation in federal “Calls for Action”. NAR writes and sends the message on your approval.

• Your agents receive a special message from you with a pre-written letter to their federal lawmaker(s) ready for their signature.

• An opportunity to bring a strong and united REALTOR® voice to members of Congress, your involvement will strengthen REALTOR® influence in determining outcomes of legislation.

You, as a broker-owner, should consider joining the nearly 3,000 brokers already in the program! By urging your people to respond to NAR’s “Calls for Action”, we can shine a very bright light in Congress on important real estate issues. This program is free to enroll. Contact Anetha Dunn Sanford, Governmental Affairs Director at KAR (800.264.2185) for more information on how to get started.

FHA Anti-Flipping Waiver Extended On Feb. 1, the Federal Housing Administration placed a one-year moratorium on its anti-flipping rule, which allows buyers with FHA-backed loans to purchase homes that have been held for less than 90 days.

This move opened a new pool of homes to firsttime homebuyers who have been losing bids to cash buyers, but shouldn't have much effect on home prices, analysts said.

The new rules have several conditions and caveats that have to be met. One of which is that it limits seller's profits to 20 percent above the purchase cost, unless an independent appraiser confirms that renovations and repairs justify the higher price.

To read the official HUD waiver release, visit bit.ly/9PgSnF

2009 RPAC AWARDS LIST Highest Membership Participation Murray-Calloway County Board of REALTORS® 105% Pacesetter Award (first to achieve goal) Hopkinsville Christian County Board of REALTORS® (June 2009) Most Contributions Raised (overall) Greater Louisville Association of REALTORS® $55,065.00 Largest Percentage Over Goal Small Board Division - Hopkinsville Christian County Board of REALTORS® 191.56% Medium Board Division - Paducah Board of REALTORS® 158.88%

To enroll online, visit http://bit.ly/BrokerIP SPRING 2010

KENTUCKY REALTOR® 15

Legislative and Business Meeting REALTOR® Hill Visits a Success Many REALTORS® from across the Commonwealth participated in the 2010 Hill Visits held at the Capitol during the KAR Legislative & Business Meeting in February. REALTORS® had the opportunity to meet with their Senators and Representatives on several issues affecting real estate including KAR’s number one issue tax on services. For a complete list of issues and bills that are being monitored by KAR, see pages 13 and 14 or visit www.kar.com > Government Affairs > Action Center, click “Kentucky Legislative Action Center,” then search the Legislative Updates. You can also check under Issue Tracker to find updates to legislation under KAR’s watch.

During the Board of Directors meeting, KAR awarded the first ever Jess and Carolyn Kinman Award. The award is named in honor of Jess, a former KAR past president and REALTOR® of the Year who passed away in 2007, and his wife Carolyn, who worked for many years at the LRC and General Assembly. It is presented to an outstanding Kentuckian whose involvement in the legislative and political arenas have left an indelible mark on all those who have known or worked with them. The first recipient was Senator Gary Tapp who represents Bullitt, Shelby and Spencer counties and is a long time supporter of REALTOR® friendly issues.

Richie Farmer, Kentucky’s Commissioner of Agriculture, stopped by GLAR’s room on the Hill to say a few words.

The Kinman family receives special recognition prior to the announcement of the first Jess and Carolyn Kinman Award.

Representative Dennis Keene and Senator Ray Jones enjoying time at the Legislative Reception.

Rep. Will Coursey sported this fine pair of boots, emblazoned with the state seal.

KAR members networking between the committee meetings.

16 www.kar.com

KAR President John Smither welcomes everyone to the Legislative Reception.

Important action items from the BOD meeting:

Members of LBAR review the effect tax on services would have on closing costs for home buyers in Kentucky.

Members discuss legislative issues during the Frankfort meeting.

Representative Danny Ford with members of the Somerset Lake Cumberland Board during the Hill Visits.

• KAR Quick Response Team utilize funding from the Issues Mobilization Fund to be used to fight the tax on services under review in the Kentucky Legislature. The Communications/PR Committee made a similar proposal.

• To have a goal of $500,000 for the Issues & Mobilizations Fund.

• Amendment of the Nomination Form for 2010 Elections to include that Nomination Forms may be submitted via fax or email in addition to mailed. The submission date will be changed to August 17, 2010.

• The 2013 Summer Meeting to be held at Lake Barkley with shuttle service provided between the convention center and the lodge to address concerns of accessibility.

• Emergency repairs to the building costing $1000 or less may be completed with just the approval of the building committee chair and vice-chair.

Repairs costing over $1000 will require the approval of the committee.

• KAR provide additional funding to the Owensboro Board of REALTORS® in the amount of $1,859.00 from the Legal Action Fund.

The Owensboro Board of REALTORS® had previously submitted a Legal Action Fund Request to KAR which was funded in the amount $3,718.01.

• Board of Directors to take specific and immediate action to address the problem associated with the exorbitant cost of access to PVA and county clerk information on a statewide basis.

• KAR will be a participant in drafting legislation with KREC or will receive a draft of any legislation that KREC has suggested at least 45 days prior to any session; or, KAR will not participate in the legislation.

• Approval of Lynn Caudill from CD-01 for RPAC Trustee. This is to fill the term of Shelly Tilley which ends Dec 2010.

Rebecca Trout and Jack Hoffman review committee reports during the Board of Directors’ meeting.

SPRING 2010

KENTUCKY REALTOR® 17

Industry Issue Short Sales: 7 Legal Pitfalls

By Robert Freedman

I

n many areas, short sales are the biggest game in town.

But you don't want to jump into this niche willy-nilly.

In addition to educating yourself on the ins and outs of these complex deals, you also need a good picture of the legal risks that exist for you.

1. Misrepresenting tax consequences.

Although it’s true that the federal government passed a law in 2007 directing the IRS not to count mortgage debt forgiven by a lender as income, the provision is limited. It applies only to purchase money; it doesn’t apply to debt on a cash-out refinancing, and it doesn’t apply to second homes. There’s also a dollar limitation, albeit a generous one ($1 million for married couples filing separately, twice that for joint filers). “A lot of associates are telling people there are no tax consequences,” says Lance Churchill, a short sales specialist and trainer who operates in Boise, Idaho, and San Diego. “But it’s a limited law and you just need to be accurate about it.”

2. Misrepresenting how secondary debt is treated.

Practitioners might mistakenly tell sellers that all the house debt is forgiven once the primary lender approves a short sale. But that might not be the case, Churchill says. Holders of second deeds of trust don’t typically forgive the debt. More commonly, they accept a partial payment, like $2,000; and rather than write off the balance, they sell the balance to a collection agency for another few thousand dollars. In many states, these second loans are recourse, so sellers can be caught by surprise when the collection agency contacts them a year later seeking payment of the debt.

3. Acting on inappropriate lender requests for seller contributions.

It’s not uncommon for lenders to go after money that the sellers have in the bank or in a retirement account before they approve a short sale request. They’ll sometimes seek to put the onus on the real estate practitioner to get sellers to sign over a note for the amount they have in the bank as a condition of sale. But in states where mortgage debt is nonrecourse, lenders have no right to the money, and associates that suggest otherwise to the sellers might be later sued for negligence.

18 www.kar.com

4. Breaching fiduciary duty.

Investors are increasingly executing what’s known as a “double close and flip,” a type of short-sale transaction that can leave practitioners exposed to irate sellers who say they got a raw deal. Here’s what typically happens: Investors insist on handling short-sale negotiations with the lender, freeing up their real estate practitioner to concentrate on finding a buyer. During the negotiations, the investors—often without the practitioner’s knowledge—talk the sellers into turning over the deed.

Once the practitioner finds a buyer, the investors do a double closing, buying it themselves at a deep discount and then flipping it to the buyer at the listed price, making money on the spread. “The seller might feel he got less than he would have had the associate done his job and not handed over negotiations to the investor,” says Churchill.

5. Providing poor oversight of a loss mitigation company.

Companies that specialize in managing short sales promise to focus on the complicated details of the short sale, freeing up practitioners’ time to find buyers. But if you take a hands-off approach, you can be charged with negligence if a deal falls apart. “A lot of these companies are fly-by-night or have one person who’s overworked,” Churchill says. “Practitioners are coming back a month later to find no one’s even opened the file.”

(Continued on page 21)

Short Sales Courses – Only $5 If you want to learn more about short sales, you can choose to attend any of the following courses, which will give you tons of information about the short sale process.

May 4 - Florence, NKAR Board Office May 5 - Lexington, Crowne Plaza May 6 - Prestonsburg, Jenny Wiley Park May 11 - Paducah, Linden Plantation May 12 - Owensboro, OBR Board Office May 13 - Louisville, Park Inn Courses will be held from 1pm - 4pm and Charles Cease will be the instructor. Online registration is open - visit www.kreef.org > Short Sales for more details.

Education GRI Changes & Schedule KREEF has made several changes to the GRI program so members can take advantage of this designation. And keep in mind, GRI courses are approved for CE credit (check the website for details) and other designation courses may be applied toward the GRI designation.

• The schedule has been set for two years (2010 is posted online and below and 2011 will be coming soon) • Classes will NOT be cancelled during this two year time frame • Early bird pricing has been set to save you money: $99 for GRI 1 through 5 and $49 for each of the electives.

Early bird registration is up to two weeks before the class date, then regular pricing applies ($149 and $99) Visit www.kreef.org for more benefits on obtaining this professional designation and to register for classes.

Short Sale CE Course – Only $5 If you want to learn more about short sales, you can choose to attend any of the following courses for only $5! These courses, held from 1pm – 4pm and taught by Charles Cease, will give you tons of information about the short sale process. Online registration is open.

May 4 – Florence May 5 – Lexington May 6 – Prestonsburg May 11 – Paducah May 12 – Owensboro May 13 – Louisville KREEF’s Online CE Courses Three to choose from and they can be taken anytime and anywhere – 24/7. All that is needed is a computer and internet access. Register now visit www.kreef.org > Online Education.

2010 GRI Schedule April 7-8

GRI 5

London

April 13-14

GRI 1

Louisville

May 6-7

GRI 2

Lexington

June 10-11

GRI 4

Bowling Green

Sept. 9-10

GRI 3

Florence

Oct 13-14

GRI 5

Owensboro

Oct. 21

Elective: Sales Contracts

Ashland

Oct. 22

Elective: RE Investments Ashland

Nov. 8-9

GRI 4

Ivel

Look for the following courses in your area in 2011: Eastern KY - GRI 1, 2 and 3 Western KY - GRI 1, 2 and 3 Central KY - GRI 4, 5 and Electives

Data from the 2008 Member Survey show that REALTORS® without any NAR designation earned a median of $33,200 while those with a designation earned a median income of $67,900.

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

Do you know someone who is interested in a real estate career?

Courses are now scheduled for summer 2010.

Total cost for the program is only $550 and the online portion can be started immediately! Find out more online at www.kreef.org > Pre-Licensing.

Classroom Dates/Locations: Northern KY Association of REALTORS® June 12-13, 19-20, 26-27 Lexington-Bluegrass Association of REALTORS® July10-11, 17-18, 24-25

SPRING 2010

KENTUCKY REALTOR® 19

Business Development Will you have the ‘touch’ for 2010?

By Bob Corcoran

H

ere’s one way to make 2010 better than 2009 – stay in better touch with your past clients and prospects.

How do I know it will make your business better?

Many reasons but here are three that come to mind immediately: 1. It keeps the door open for referrals. Remember, it’s much easier to keep the clients you have than to find new ones. Plus, why not let your past clients find new clients for you through their referrals?

2. It helps you stand out from the crowd. NAR reports that most REALTORS® begin losing touch with their clients in six months. Stay in touch and you’ll shine.

3. It shows you care. What do you think your past clients think when communication drops off or ends?

One possibility is that they think you “got your money and ran.” That doesn’t put you in a very good light.

Now, how to stay in touch? Yes, customer relationship management (CRM) software packages are plentiful and I’m not saying ignore them. In fact, I often recommend Top Producer to my clients because it operates online and you can see everything at once.

But let me address all those bland postcards, cut-andpaste generic letters and e-mails that border on spam.

They’re not cutting it today. We’re smack dab in the middle of the information age, and people are becoming connoisseurs of information because it’s so pervasive and accessible with a single mouse click.

So what does this have to do with CRM for REALTORS®? It means you better be dishing out some high-quality, useful information about real estate.

Today’s best agents and brokers understand this.

And they’re steadily building job security by giving past clients and prospects bona fide information they can use.

Not just postcards talking about how many listings they got last month.

This is just one of many CRM tactics I suggest (and I’ll hit on some more in a minute), but I believe it’s one of the most important ways to keep your business

20 www.kar.com

“Let me address all those bland postcards, cut-andpaste generic letters and e-mails that border on spam. They’re not cutting it today. We’re smack dab in the middle of the information age…” growing both in the number of clients and your reputation as a professional.

So how do you share this information and exactly what kind of information are we talking about?

First, I like blogging, it’s easy and it’s free. I blog once a day and it’s helped me grow my business by leaps and bounds. I give my clients – REALTORS® – tips and news that help them in their business (incidentally, you can get my blogs at www.activerain.com/blogs/corcoran).

So consider a blog, Facebook (and other social media) and an electronic newsletter (emphasis on news) that’s chocked full of items that relate directly to your farm area. The better quality information you’re sharing, the more demand you’ll create. And remember, if you don’t have the time to do this, hire a virtual assistant to manage your social networks for you.

In a phrase it boils down to this: be helpful. Share referrals for plumbers, electricians, contractors, carpet installers, landscapers, or appliance dealers – these are things every homeowner has to grapple with. What about offering a free advice on which home improvements have the best return on investment?

Market updates? You bet.

As for how often these touches should occur, I recommend a touch a month: think personal such as birthday cards, home anniversary cards and toss in a phone call each quarter.

And start off your post-closing relationship with a memorable closing gift. Be strategic here. I recommend gifts that they see often and that remind them of you.

Some I’ve heard about include: cool mailboxes, a door hanger, brass house numbers, doorknockers or

nameplates, wind chimes, bird houses or feeders, picture frames or a nice photo of the home.

How are you being useful to your past clients?

(Continued from page 18)

7. Facilitating transactions not listed on the HUD-1 form.

It’s not uncommon for investors to offer incentives to sellers to move a deal forward, but lenders typically frown upon sellers who walk away with money when they’re supposedly taking a loss. Investors sometimes work around this limitation by offering to buy something from the sellers at an attractive price, such as a couch for $5,000. Associates who communicate these offers to sellers can get tied into charges of lender fraud because the deals may be deceptive.

6. Lacking the required license to undertake loss mitigation.

It often makes sense for practitioners to take a twopronged approach with clients facing a difficult time paying their mortgage—first trying to help them accomplish a loan modification (for a fee), and then finding a buyer if a modification doesn’t work. But watch out. Depending on your state, you could need a specific license, sometimes called a credit repair license, to earn a fee for helping owners modify mortgage terms.

Without having the right credentials, taking a fee for loan modification assistance could be a criminal offense.

Bob Corcoran is a nationally recognized speaker and author who is founder and president of Corcoran Consulting Inc. (CorcoranCoaching.com, 800-957-8353), an international consulting and coaching company that specializes in performance coaching and the implementation of sound business systems into the residential or commercial broker or agent’s existing practice. Sign up TODAY for your complimentary business consultation. http://www.CorcoranCoaching.com/bpw.php

On the Cover Scan the QRCode on the cover with your iPhone (QRCode scanner required - ScanLife app is free to download) to view the KAR webpage.

Reprinted from REALTOR® Magazine Online, April 2009, with permission of the NATIONAL ASSOCIATION OF REALTORS®. Copyright 2009. All rights reserved.

SPRING 2010

KENTUCKY REALTOR® 21

Local Association News Local boards/associations are encouraged to submit information for this section.

Pictures must be at least 300dpi. Send all association news to hcooper@kar.com.

Murray Calloway County Board Six members of the MCCBOR have qualified for the Circle of Excellence Award for 2009. They are Earleene Woods, Mary Jane Roberson, Lynda Houck, Kathy Kopperud, Loretta Jobs and Barbara Barnett. The award was created in 2007 to encourage members to go above and beyond in their profession as a REALTOR® while pushing themselves to a higher level of achievement. In order to qualify for the Circle of Excellence Award, members must meet a rigorous set of criteria.

Also receiving awards for 2009 were Gale Cornelison for REALTOR® of the Year; and Tommy Chavis for the Hoyt Roberts Award, given to a new member that has taken an active interest in the Board.

cookbooks, but also volunteering time to participate in packing lunches, sponsoring car shows, helping at the homeless shelter and answering phones at the United Way. These efforts have help raise awareness and money for the community.

Madisonville Hopkins County Board Bring your hammers and work gloves and get ready for a Habitat for Humanity build with the MHCBOR! The build will be April 12 – 23, five days a week (M-F) and will consist of helping with two houses on Hall Street. They will need five REALTORS® each day. If you would like to assist the board on this project, contact the board office at 270.821.8888.

Greater Louisville Association

Lexington-Bluegrass Association

The Greater Louisville Association of REALTORS® kicked off their new theme for 2010, It’s A New Day in January with special motivational speaker Scotty Davenport, Head Coach at Bellarmine University. These special events will be held throughout the year and are free to members. The programs are designed to give REALTORS® the opportunity to network with each other, while obtaining useful, relevant information that will have a positive impact on their career.

Three years ago, LBAR started a book donation program with Ashland Elementary School which has now grown in its second year to over 100 elementary schools in the area. This year, focusing on the issue of bullying in schools, LBAR’s Community Education Task Force chose the book Enemy Pie. Melissa Poynter, the chairperson of the task force, did not stop at simply giving a book; she had a dream of taking the message of anti-bullying all the way to the halls of the Capitol.

In February, joined by Tara Calahan King, illustrator of Enemy Pie, and LBAR members, a proclamation was presented by Colmon Eldridge, Executive Assistant to the Governor, naming March as Safe Passage Month. Safe Passage Month has been initiated to call awareness to the most common form of violence in our society, bullying. The proclamation recognizes children as our greatest resource, and stresses the importance of community education to develop better relationships between children.

Cumberland Valley Board In 2009, CVBOR raised money as way to give back to area charities and was able to donate $800 to each of five groups. The groups that received assistance were: Bac Pac Club of Corbin, Bac Pac Club of London, Williamsburg Homeless Shelter, Christian Homeless Shelter of London and the Optimist Club of London.

Members of the board have been so generous not only in raising money for local charities through Freedom Rides, garage sales and

22 www.kar.com

LBAR also announced Janice Mueller as the 2009 Good Neighbor award recipient at the association’s annual dinner in January. Mueller has been a member of LBAR for 35 years, and in September 2001 helped found the Makenna Foundation in memory of Makenna David who died of a rare lung disease in 1998.

Heart of Kentucky Association The Heart of Kentucky Association of REALTORS® Community Service Committee volunteers at Warm Blessings, a non-profit organization dedicated to ministering to the whole person. The corporation is organized for the purpose of providing meals to hungry people with the vision to offer emergency shelter to people in crisis. HKAR REALTORS® are there on the first, third and fifth Wednesday’s of every month cooking and serving hot meals.

Louisville Makes List of Places to Retire CNNMoney placed Louisville on their 25 Best Places to Retire list for 2009. Ranked 20th, the magazine has this to say about Kentucky’s largest metro area: Louisville has installed more than 50 bike lanes on city streets in the past four years, in response to mounting demand by ride-happy residents. Retirees looking to cycle away without sharing space with cars can hit the Louisville Loop, a partially constructed hiking and biking path that will eventually span more than 100 miles and connect many of Louisville’s parks and neighborhoods.

(It's currently about 25% complete.) More than 5,000 people participate in the semiannual Hike and Bike event, in which streets are closed to cars in favor of hikers and bikers.

There's also plenty to do downtown once the pedals stop. The city’s East Market section houses a thriving arts district and is just a short walk from the Louisville Waterfront Park, an 85-acre area that hosts concerts and festivals along the Ohio River. West Main Street, aka “Museum Row,” has seven museums, including the Muhammad Ali Museum, Louisville Slugger Museum and Kentucky Museum of Art & Craft.

On another note, Louisville was also ranked 37th on the Forbes list, America’s fastest recovering cities. The list, comprised from the 100 largest metro areas, considered five categories: unemployment rate, GMP (a

measure of the size of a city's economy), foreclosures, home prices and sales rates. (Cincinnati and the northern section of Kentucky ranked #55).

10 Cities Where It's Smarter to Buy To determine what cities are smart buys, Forbes magazine computed the premium and also identified locales where economists predict home prices will go up the most over the next five years. Here are the top 10 cities the magazine chose as the best places to buy right now.

1. Boston-Cambridge-Quincy, Mass.

2. Charlotte-Gastonia-Concord, N.C.-S.C. 3. Chicago-Naperville-Joliet, Ill.-Ind.-Wis. 4. Cincinnati-Middletown, Ohio-Ky.-Ind. 5. Denver-Aurora-Broomfield, Colo 6. Minneapolis-St. Paul-Bloomington, Minn.-Wis. 7. Philadelphia-Camden-Wilmington, Pa.-N.J.-Del.-Md. 8. Portland-Vancouver-Beaverton, Ore.-Wash.

9. San Francisco-Oakland-Fremont, Calif.

10. Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.V. Source: Forbes, Francesca Levy (01/21/2010)

2009 Local REALTORS® of the Year Greater Louisville Eastern Kentucky Ashland Area Heart of Kentucky Central Kentucky RASKY Henderson Audubon Somerset Lake Cumberland Hopkinsville-Christian Co. Madisonville-Hopkins Co. Murray-Calloway Co. Owensboro Northern Kentucky Lexington-Bluegrass Kentucky Barkley Lakes Cumberland Valley

SPRING 2010

John May Brenda Gooslin David McDowell Hardin McLane Nina Kinkland Ruth Ann Bowen Missy Marable Matt Ford Janie Ezell Tammie Wilson Gale Cornelison David Slaughter Laura Sanders Judy Craft Jennifer Fisk Barbara Flannery

KENTUCKY REALTOR® 23

By The Numbers

87%

Percent of adults who said they prefer dealing with others in person instead of by computers or smartphones, according to GIK Technology.

$143,500 The median price of second homes, compared to $186,000 for primary homes. Second home buyers more often purchased condos (22 percent) than did primary home buyers (9 percent) according to NAR’s 2009 Profile of Home Buyers and Sellers.

90% According to NAR’s 2009 Profile of Home Buyers and Sellers, the percent of home buyers who used the internet to search for homes in 2009, up from 87% in 2008 and 71% in 2003.

According to a national survey conducted by Apartments.com (securing more than 1,500 renter responses), the percent of renters who said they are planning a move in 2010.

95%

44% 24 www.kar.com

According to NAR’s 2009 Profile of Home Buyers and Sellers, the percent of all buyers who found their agents through a friend, neighbor or relative (53 percent for all first-time buyers).

Increase in Kentucky’s population over the decade, to 4.31 million - a greater increase than in Indiana, Illinois, Ohio and West Virginia.

Kentucky started the decade losing residents to other states before reversing the trend. But between 2003 and 2007, the state had a net population boost of nearly 62,000.

7%

37%

Percent of brokers surveyed by Inman News recently who said homes sold to first-time buyers made up the largest share of home sales. About one-quarter of the brokers responding said bank-owned (REO) properties accounted for the largest share of sales in their market, while 16 percent said short sales dominated. Second-home purchases were the most rapidly shrinking segment of home sales, 48 percent of the 163 brokers responding to that question said, followed by move-up homes (33 percent), REO sales (5 percent) and high-end sales (5 percent).

37

The median age of home searchers who used the internet, compared to those who did not use the internet to search for homes (55 years of age).

The median income home searchers who used the internet was also greater ($75,500 versus $57,800) and they spent twice as much time searching for a home and visited three times as many homes as home searchers who did not use the internet, according to NAR’s 2009 Profile of Home Buyers and Sellers, (download available FREE to all KAR members at realtor.org. Also available is the 2009 Member Profile.)

9,682 Number of foreclosure filings in Kentucky for 2009, an increase of 33.7% from 2008. The number of foreclosure filings in the U.S. increased 21.2% for the same time period, according to RealtyTrac.

Housing Stats Boost to Kentucky’s Fourth Quarter Keeps Housing Stable

T

he first time home buyer tax credit deadline, before it was extended and expanded, appears to have strongly impacted home sales in Kentucky. The original tax credit, with a cutoff of November 30, created a sense of urgency with buyers and the numbers are reflective. For the three months making up the fourth quarter in Kentucky, increases were realized across the board in both the median sales price and the number of homes sold. The median home price increased 11.6 percent, 16.6 percent and 15.2 percent in October, November and December 2009 versus the same periods in 2008. The number of homes sold saw even more impressive gains in the final three months of the year with increases of 19.7 percent, 42.3 percent and 17.7 percent over 2008 figures.

As for totals for the fourth quarter of 2009, the state saw upticks of 25.7 percent in total homes sold (9,829 versus 7,821 in 2008) and 14.2 percent in the median price of homes ($109,875 versus $96,200 in 2008). In November, the month with the biggest increases, the number of homes sold was 3,272 in 2009 compared to 2,300 in 2008 while the median price jumped to $110,663 in 2009 from $94,913 in 2008.

The impact this had on year end numbers kept 2009 stable from what had been seen in 2008. For year end, Kentucky home sales were down slightly (2.5 percent) or 37,368 sold in 2009 versus 38,323 in 2008, however, the median price saw a slim increase of nearly one percent (up $925 to end at $104,300).

Lawrence Yun, NAR chief economist, said “The surge in home sales was driven by buyers responding strongly to the tax credit combined with record low mortgage interest rates. With inventory levels trending down over the past 18 months, we expect broadly balanced housing market conditions in much of the country by late spring (2010) with more areas showing higher prices.”

Yun projects the extended and expanded tax credit will encourage 2.4 million households to take the credit in 2010. “While new-home sales will remain low due to a lack of construction, existing-home sales are projected to rise to around 5.6 million in 2010,” Yun said. Last year there were 5.16 million existing-home sales.

2009 vs. 2008 Board/Association

# Sold 2009

# Sold 2008

Henderson-Audubon BOR

294

325

Hopkinsville-Christian BOR

404

Kentucky-Barkley Lakes BOR

277

# Sold %

Median Price 2009

Median Price 2008

Median Price %

-9.54%

106750

87300

22.28%

345

17.10%

102250

98280

4.04%

277

0.00%

92750

98250

-5.60%

Region One

Madisonville-Hopkins BOR

378

392

-3.57%

89100

80200

11.10%

Mayfield-Graves BOR

327

276

18.48%

68750

76375

-9.98%

Murray Calloway County BOR

303

234

29.49%

124000

114825

7.99%

1009

1062

-4.99%

104599

105725

-1.07%

Paducah BOR

593

639

-7.20%

120950

119250

1.43%

Pennyrile BOR

339

374

-9.36%

94650

103750

-8.77%

Central Kentucky AOR

456

508

-10.24%

98000

107663

-8.97%

Heart of Kentucky AOR

1721

1557

10.53%

128363

133450

-3.81%

Old Kentucky Home BOR

471

438

7.53%

113072

112100

0.87%

REALTOR® Assn of SKY

1413

1668

-15.29%

119675

122950

2.66%

Russellville-Logan BOR

104

168

-38.10%

82500

89500

-7.82%

Shelbyville BOR

429

372

15.32%

135750

147350

-7.87%

South Central Kentucky AOR

235

269

-12.64%

98475

95750

2.85%

11662

11375

2.52%

130500

132900

-1.81%

7648

7995

-4.34%

138900

138993

-0.07%

4697

5031

-6.64%

125000

132463

-5.63%

668

765

-12.68%

89000

95375

-6.68%

Owensboro BOR

Region Two

Region Three Greater Louisville AOR Region Four Lexington Bluegrass AOR Region Five Northern Kentucky AOR Region Six Ashland Area BOR Cave Run AOR

132

105

25.71%

103750

87900

18.03%

Cumberland Valley BOR

526

568

-7.39%

99000

99750

-0.75%

Eastern Kentucky AOR

418

437

-4.35%

104000

94838

9.66%

Madison County BOR

2105

2305

-8.68%

129709

131475

-1.34%

Pioneer Trace BOR

167

195

-14.36%

70000

82250

-14.89%

Somerset-Lake Cumberland BOR

592

643

-7.93%

107950

103000

4.81%

37368

38323

-2.49%

104300

103375

0.89%

Totals

Based on information from local REALTOR® associations/MLSs for the periods of January 1 – December 31, 2008 and 2009. * Statistics are unavailable for the following local associations: Cynthiana-Harrison Co. & Dix River ** Statistics for Cave Run are unavailable prior to April 2008

To learn more about the tax credit, visit www.kar.com > Media Center > Home Buyer Tax Credit.

SPRING 2010

KENTUCKY REALTOR® 25

Community Profile Kentucky's “must places to visit”

By Gary P. West

W

hen Dr. Thomas Walker discovered a small gap in the Cumberland Mountains back in 1750, he and his associates unknowingly became the state’s first tourists. They liked what they saw, went back home, and told others.

And guess what? They came, too.

Walker and all of the other early adventurers never gave up in their quest to discover what was out there.

When some thought they had gone far enough, Walker wanted to know what was just ahead.

Today, in true Kentucky tradition, we find ourselves pressing on, to see what’s over the next hill or around the curve. I do it, and so do you.

In my progression of writing books about fun places in Kentucky, a “bucket list” type guide made sense. After writing books on 101 must places to eat, followed by 101 places to shop, a book on places to visit seemed logical.

It’s difficult deciding on only 101 places to include, and exclusion in no way means a place isn’t worthy. If I were listing 201 must-see places, I would still have to leave something out.

In an effort to stir your curiosity, here are a few examples from my newest book, 101 Must Places to Visit in Kentucky Before You Die.

Years ago, Kentucky boasted more than 400 covered bridges. Records reveal that the first were built in the 1790s, but floods, fire, Mother Nature, and modernization have taken their toll. The 13 that have survived are well worth seeing.

Fleming County lays claim to being the State Covered Bridge Capital of Kentucky with three of the bridges. Other counties with covered bridges are Greenup, Lewis, Robertson, Bracken, Bourbon, Franklin, Washington, and Mason.

My Old Kentucky Dinner Train

Covered Bridges of Kentucky

Photo courtesy of www.kentuckytourism.com

This is the only train in Kentucky where you can ride and also dine in style. Based in Bardstown, it’s been around since 1988, and it’s definitely one of those things you want to experience at least once. What I really enjoy, other than the five-course dinner, is the closeness of the tables, which allows for friendly conversation with other travelers.

The dinner train is open year-round and also serves lunch.

Photo courtesy of www.kentuckytourism.com

26 www.kar.com

John James Audubon State Park

Mississippi River. Forces blocked river travel by stretching a mile-long chain across the Mississippi, secured by a 6-ton anchor on the Columbus side.

Today, that anchor and a 7,545-pound cannon are displayed in the park.

Yew Dell Gardens The locals around Louisville and LaGrange know about this Crestwood paradise, but it’s a good bet most Kentuckians don’t.

This 33-acre botanical garden’s beginnings date back to 1941, when the Klein family set out to establish a collection of some of the most unusual plants found anywhere in the United States. They did. And more than 20 years after Theodore Klein’s death, local and national garden groups have stepped up to make sure this Oldham County treasure lives on.

You don’t have to be a nature lover to appreciate this 700-acre park, named after one of America’s most recognizable wildlife artists. The park’s Museum and Nature Center interprets Audubon’s love of the outdoors through his paintings, sketches, and personal memorabilia.

Audubon lived in Henderson from 1810 to 1819 with very little success as a businessman. However, his far-reaching accomplishments as an artist of wildlife and birds are what he’s remembered for, even in Kentucky.

World Chicken Festival The last weekend in September, London is overrun with thousands of visitors to the World Chicken Festival. What really attracted me is that skillet. It is the world’s largest, weighing 700 pounds. It’s more than 10 feet in diameter, 8 inches deep, and has an 8-foot handle.

It’s easy to see how it has cooked more than 40,000 chicken dinners in the last few years.

This event is all about food. Not just eating it, mind you. There’s also a cooking contest. Laurel County residents relish the fact that Colonel Harland Sanders sold his first fried chicken in nearby Corbin. And if that’s not enough, another fried chicken pioneer got started here. Lee Cummings, along with his uncle, opened Lee’s Famous Recipe back in 1952.

Columbus-Belmont State Park During the presidency of Thomas Jefferson, a fire in Washington, D.C., caused him to propose that the U.S. Capitol be moved to the centrally located Kentucky town of Columbus. His recommendation failed in the Senate by one vote!

This small town of less than 300 residents played a role in the Civil War because of its location by the

Reprinted with permission from January 2010 Kentucky Living Magazine and author Gary P. West, who readily admits that he has never had an original idea in his life.

“Why would I want to start now,” he says in reference to his Kentucky travel books.

Photo courtesy of www.kentuckytourism.com

SPRING 2010

KENTUCKY REALTOR® 27

From the Helm Taxes, Taxes and More Taxes

by Susan W. Helm

A

few weeks ago, 175 REALTORS® came to Frankfort to discuss real estate issues with legislators. To the 9,600 members of KAR who did not attend: Please thank these dedicated people for taking the time from their business to do work on your behalf.

Throughout the three days of meetings, many issues important to our industry were discussed including tax on services, an issue currently being discussed by legislators and others. Kentucky has a serious budget problem but imposing a tax on homebuyers for the services their real estate professionals provide is detrimental to future property owners in Kentucky. It puts an extra burden on buyers as they will be forced to pay a 6% tax on ALL services in their real estate transaction from commissions to title work to appraisal fees. Its full economic impact includes: • Increasing the closing costs on the transfer of residential and nonresidential property • Increased cost of operating a brokerage business • Increased cost of new single family and multi family housing Another important proposal being discussed before the legislature is a two-year moratorium in allowing individuals and businesses to offset their net operating losses (NOL) in their tax returns. Currently, businesses can offset any net operating losses they have incurred against net operating income over a 20-year period in order to lower their taxes. In a difficult economic climate, Kentucky businesses, including those in the real estate profession as well as many real estate investors, will have to pay more in taxes. This will be detrimental to business when business doesn’t need an extra tax burden.

At a time when the real estate market is set for a much-needed rebound, these extra taxes may deter people from purchasing homes, be detrimental to operating a brokerage business and increasing the overall cost of housing. As a result members of our industry will also be hurt due to a further downturn in sales.

These are two of the important issues facing our industry in the current legislative session. But we can successfully fight these issues if we maintain our solidarity. The Kentucky Association of REALTORS® is one of the largest trade associations in Kentucky; REALTORS® have the third largest PAC in Kentucky and the largest business PAC in the state. With strength in numbers and by staying focused on the goal of working for consumers of real property, we can be successful in defeating detrimental legislation.

28 www.kar.com

“At a time when the real estate market is set for a much-needed rebound, these extra taxes may deter people from purchasing homes.”

Your leadership and staff are working diligently to ensure legislation is passed that protects property owners and members. But we need your help to ensure the success of our efforts. You may be asking yourself what you can do and here it is: contact your state legislators, especially when asked to respond to a Call For Action; participate in your local association governmental affairs activities; contribute to RPAC, your political action committee; ensure your broker has signed up for the Broker Involvement Program; and, educate yourself on issues that affect your business and your clients.

Remember the more solid, steadfast and focused we are as an industry, the more likely we can achieve the results we desire for buyers, sellers and YOU, our member.

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

Code of Ethics “Ignorance is no excuse”

by Julie Johnson

“Ignorance is no excuse” is a mantra that has been drilled into my head, from elementary school to the college I attended where an Honor Code pervaded every aspect of campus life. All academic work had to be “pledged” before turning it in, and the consequences for violating the pledge were severe.

Because of the high standards held by the Honor Code, students were, and still are, permitted to take un-proctored, self scheduled exams. Dorm rooms are generally left unlocked. You could count on the fact that any belongings inadvertently left behind in the dining hall or a classroom would still be there five minutes, or five hours, later. The Honor Code made, and still makes, my school unique.

The privilege of observing the Code of Ethics and Standards of Practice is what distinguishes REALTORS® from other real estate licensees, and makes REALTORS® unique. The Code of Ethics was adopted nearly 100 years ago and was amended 11 times between 1913 and 1986.

Between 1986 and 2010, the Code was amended every year, 23 times. What is the likelihood it will be amended again for 2011? The rapid progression of technology coupled with impossible to predict market and regulatory conditions make it very likely that the Code will be amended annually for the foreseeable future.

Like an Honor Code, ignorance of the current Articles of the Code of Ethics and the associated Standards of Practice does not relieve REALTORS® of their obligation to follow them. Changes to the Code are effective January 1 of each year. So what is new in the Code of Ethics and Standards of Practice for 2010?

Here are a few changes/additions to the Code of Ethics and Standards of Practice (underscoring indicates additions, strikeouts indicate deletions) Standard of Practice 3-2 revised: REALTORS® shall, with respect to offers of compensation to another REALTOR®, timely communicate To be effective, any

change of in compensation offered for cooperative services must be communicated to the other REALTOR® prior to the time such that REALTOR® produces submits an offer to purchase/lease the property. (Amended 1/10) Standard of Practice 3-9 new: REALTORS® shall not provide access to listed property on terms other than those established by the owner or the listing broker.

(Adopted 1/10) Standard of Practice 15-3 new: The obligation to refrain from making false or misleading statements about competitors, competitors’ businesses and competitors’ business practices includes the duty to publish a clarification about or to remove statements made by others on electronic media the REALTOR® controls once the REALTOR® knows the statement is false or misleading. (Adopted 1/10) There are resources available to help REALTORS® better understand and abide by the Code of Ethics. The Code of Ethics Video Series can be used to explain particular articles of the Code of Ethics. Video segments are between five and seven minutes long and are available 24/7, free of charge. In addition, the Code of Ethics online training is free. Have your NRDS ID handy and register for either the New Member Code of Ethics Orientation - Online Course, or the Quadrennial REALTOR® Ethics Training - Online Course. Course completion takes 2 _ hours but does not have to be completed in one session. Users can exit after the Quick Review Quiz in any lesson and restart another time at the beginning of the next lesson.

The time you invest now to gain a more thorough understanding of the Code of Ethics may help you avoid a possible ethics charge in the future.

To view the 2010 summary of changes/revisions to the NAR Code of Ethics, to download a copy of the Code of Ethics, to take the Code of Ethics training or to view the video series, visit www.kar.com > Legal Affairs > Code of Ethics.

SPRING 2010

KENTUCKY REALTOR® 29

A Day in the Life of...

A Charitable REALTOR® Janice Mueller Lexington, Kentucky

How many years have you been in real estate and how long have you been broker/owner of your own office?

I was licensed in 1975, earned my broker’s license in 1979, opened my first company in 1982 and purchased the first RE/MAX franchise in Central Kentucky in 1987.

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

From growing up in the housing projects in Lexington, attending UK, then working as an elementary school teacher, I always had the desire to give back to the children of our community. It wasn’t until 1992 when RE/MAX joined with the Children’s Miracle Network that I found the right platform. My agents began giving a portion of their commissions annually to CMN and over the years we have been involved in telethons, phonations and other fundraising events to help Kentucky’s sick and hurting children.

You started the Makenna Foundation in Lexington.

How did that come about?

In 2001, one of my REALTORS® had a past client, Greg & Sheila David, who had recently lost a young daughter.

The Davids wanted to give back to the Kentucky Children’s Hospital by building a three dimensional wall like one Makenna played with in Texas when she was hospitalized there. We all knew we were on to something big when we saw the outpouring of support from the community to help make Makenna’s Wall a reality. I wanted to turn the focus to other needs and dreams of the hospital and on September 6, 2001 the Makenna Foundation became a reality.

What have been some of the major accomplishments through the Makenna Foundation?

Makenna’s 40-foot ceramic tile wall led to assisting with the sedation suite remodel, a toddler playroom, the purchase of a pediatric bronchoscope, and so much more.

Our proudest accomplishment to date will be completed this summer with the opening of the first pediatric emergency center in our region outside of Louisville and Cincinnati. The Makenna David Pediatric Emergency Center will open at Kentucky Children’s Hospital in July 2010.

30 www.kar.com

Janice stands with Vinnie Tracey, president of RE/MAX International, from a past Art of Making Miracles event.

You recently received the Good Neighbor Award from LBAR. How did it feel to be recognized by your peers for your efforts?

To say I was in shock when my name was announced is an understatement; I had no idea I was being nominated.

To know that the good work of the Makenna Foundation was being recognized through me was an absolute thrill!

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

I am one of those people who thrive on activity. The more I have to do the more I can get done. I just make giving back one of my priorities in life.

Outside of business, what is your favorite past-time?

Cooking is a passion of mine and of course I love spending time with my two young grandsons. A couple of times a year, my husband and I love to get away to Florida. The time away helps clear my head and rejuvenate my spirit.

What is the best advice you have ever received?

Giving to others means getting more in return.

The 10th annual Art of Making Miracles will be held on the grounds of RE/MAX Creative Realty on Friday, September 10, 2010. This main event for the Makenna Foundation is attended by more than 800 people annually and brings in nearly $200,000 in proceeds to Kentucky Children’s Hospital.