Kyrealtorspring15

速

SPRING 2015

A publication of the Kentucky Association of REALTORS 速

15 Remarkable Apps for Your Real Estate Business In this issue:

What is Non-Judicial Foreclosure?

The New Loan Closing Statement Snow Days: Get Up and Get Busy

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SPRING 2015 KENTUCKY REALTOR速 1

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Contents

Volume 8, Number 1, SPRING 2015

IN THIS ISSUE What is Non-Judicial Forelosure?

8 New Loan Closing Statement 13

15 Remarkable Apps for Your Real Estate Business 14

Apublication of the Kentucky Association of REALTORS® President Norman Jones Eastern Kentucky Association Treasurer Mike Becker Northern Kentucky Association Chief Executive Officer Joe McClary jmcclary@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

Snow Days: Get Up and Get Busy 20

REGULAR FEATURES

KAR News 4

President’s Message 5

Tools You Can Use 6

Communications/Education Director Hunt Cooper 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.

Legislative Update

10

Education

19

Local Association News

22

By the Numbers

24

Housing Stats

25

Community Profile

26

CEO Message

28

Up to Code

29

A Day in the Life of...

30

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To view all affiliate partner offers, visit www.kar.com > Members > Affiliate Partners.

SPRING 2015 KENTUCKY REALTOR® 3

KAR News Local REALTORS® of the Year

KAR Elections KAR is seeking nominations for several leadership positions for 2016.

The information regarding the openings, terms, voting information and the form are included in the packet found on the KAR website under the Member section. If you need additional information or would like to discuss, please contact Julie Johnson, Legal Affairs Director, at 800.264.2185 or at jjohnson@kar.com.

Arin Wagner

Henderson Audubon Board

Lamont Breland

Greater Louisville Association

Steve Cline

REALTOR® Association of SKY

Cheryl Watson

Northern Kentucky Association

Sherra Riley

Kentucky Barkley Lakes Board

Barbara Curtis

Lexington Bluegrass Association

Sandy White

Hopkins Christian & Todd County Association

Brenda Loyal

Greater Owensboro Association

Treasurer-Elect (1 position, 1 year term)

Bill Leslie

Somerset-Lake Cumberland Board

At-Large Director (3 positions, 3 year term)

Linda Sparrow

Central Kentucky Association

Region Director (3 positions, 2 year term)

Open Positions: President-Elect (1 position, 1 year term)

Sharon Billingsley South Central Kentucky Association

At-Large Delegate (3 positions, 3 year term)

Patrick H. Hagan

Old Kentucky Home Board (President’s Award)

NAR Director (1 position, 3 year term)

Nita Allen

Heart of Kentucky Association

Marcie Estepp

Eastern Kentucky Association

Brian Bingham

Madison Country Board

Judy Denton

Murray Calloway County Board

In Memoriam David P. Schoepf (12/8/1931 – 3/142015) of Fort Thomas, was as a real estate broker and appraiser in Northern KY and Cincinnati for over 50 years. He was a past president and REALTOR® of the Year for KAR and also received the Distinguished Service Award from the Northern Kentucky Association, KAR and NAR. He passed away in Bradenton, Florida.

Wayne Beazley (12/15/1945 – 3/11/2015), of Richmond, was a REALTOR® before serving as the Association Executive of the Madison County Board for 10 years where he recently retired. Wayne, 69, passed away at the Richmond Health & Rehab Complex – Kenwood.

Lynn Waller (11/11/1923 – 12/26/2014), of Cadiz, was the retired owner of Lynn Waller Lakeside Properties where he was a real estate broker & appraiser and long-time member and supporter of KAR. Lynn, 91, passed away at the Skyline Medical Center in Nashville, Tennessee.

DID YOU KNOW ?

KAR consists of 22 local REALTOR® associations located across the state with approximately 9,200 members.

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President’s Message

The Difference of Choosing a REALTOR®

W

hen you’re looking for a good product or service, you probably get input from a friend, coworker, or family member. Or you may go online and use one of the various review sites that have grown in popularity.

The same is probably true when potential home buyers or sellers are searching for a real estate agent to help them find a property. The fact is, recommendations, or referrals, are one of the best ways for agents to get new clients.

When you finally receive a recommendation about that product or service, how much research do you actually do before making a choice?

I’m sure it varies but I would gather often times it’s more than buyers or sellers put into choosing a real estate agent. At a time when the largest and most important decision for most people looms in the very near distance, the impact of this choice bears much weight.

One of the first steps to evaluate a real estate professional should be to find out if the agent merely holds a real estate license or has taken the steps to become a REALTOR®. There’s a difference between the two, and the difference matters.

Becoming a REALTOR® Before a person can sell real estate, or manage property for others, in Kentucky, he or she must be licensed by the Kentucky Real Estate Commission (KREC) and his or her license held by an established broker. In order to do this, a person must take 96 hours of required pre-license courses and pass the real estate licensing exam. Starting in 2016, within two years, the licensee must also complete an additional 48 classroom hours of real estate post-license education.

But holding a real estate license from KREC does not make someone a REALTOR®. After earning their license, many agents elect to join their local association of REALTORS®, the state-level association, and the National Association of REALTORS® (NAR). Only after these steps are taken can a person be called a REALTOR®. Membership in these organizations gives REALTORS® advantages over agents who don’t join while also increasing their responsibilities to clients while practicing real estate.

• Disclosure: reporting to the client anything that would be useful • Accounting: responsibility to the client for any money involved • Reasonable care and skill: performing up to certain standards In addition, REALTORS® must adhere to NAR’s Code of Ethics, which clearly identifies their responsibilities to the consumer. The Code of Ethics is the cornerstone of what it means to be a REALTOR®.

REALTORS® pledge they will treat all parties fairly and protect their clients’ interests. It’s a consumer-oriented code that holds REALTORS® to a higher standard of professional behavior. If the Code is not followed, REALTORS® are held accountable and can be disciplined.

Adhering to the Code of Ethics isn’t the only way REALTORS® are different from real estate licensees. REALTORS® have a long track record of engaging in governmental affairs activities with public officials and other elected representatives to create strong communities by supporting economic prosperity and creating new housing opportunities. They work vigorously to protect the rights of private property owners and are committed to pushing diligently for a high quality of life for the citizens of the state of Kentucky.

If that’s not enough, REALTORS® are connected to the best information, education and resources, so they will have a deeper engagement with the process of buying and selling real estate. The Kentucky Association of REALTORS®, and other local REALTOR® associations across the state, provide relevant and unique opportunities for members to further their real estate knowledge and become more proficient in the industry. These associations also supply REALTORS® with the highest level of listing and marketing opportunities possible for a client’s property.

Whether you have clients who are buying or selling property, working side by side with a Kentucky REALTOR® can make a huge difference in the level of professionalism and skill they’ll receive during the process.

Make sure your clients understand the difference.

What sets REALTORS® apart?

All agents are bound by certain legal obligations, or fiduciary duties, to their clients. Traditionally, these are to: • Loyalty: putting the client’s interests above anyone else’s • Confidentiality: keeping the client’s information private • Obedience: obeying the client’s lawful instructions

Norman Jones, 2015 KAR President

SPRING 2015 KENTUCKY REALTOR® 5

Tools You Can Use Being single and real estate

The next generation of home features

Single Americans now make up more than half of the adult population, the first time the number of singles has passed the 50 percent mark since the government began tracking such data in 1976. About 124.6 million Americans indicated they were single in August 2014; 50.2 percent were age 16 or older, according to new data from the Bureau of Labor Statistics. The percentage has been gradually trending upward since the beginning of 2013.

Nearly half of consumers - 46 percent - say it’s important their current home or the next home they purchase have smart home technology, according to a survey conducted by ERA Real Estate and HGTV of nearly 2,500 consumers who participated in an HGTV national focus group on smart home technology. Home owners and buyers say they see the value in smart home technology for comfort, safety and cost savings, and 51 percent surveyed say they would consider installing smart home technology in their home to make their home more marketable to future home buyers. The younger segment of the millennial generation is 10 times more likely than generation X members to consider adding smart home technology to their homes and 70 percent of millennials say it’s important that smart home technology integrate with their smartphone.

The number of never-married adult Americans has been on the rise, too, increasing to 30.4 percent from 22.1 percent in 1976. The number of divorced, separated, or widowed adults also has risen up to 19.8 percent from 15.3 percent. And, according to NAR data, single women make up the second largest segment of home purchases, with one out of every five homes purchased by a single woman.

Gen Z: real estate’s future buyer The newest generation, consisting of 21 million strong, are between the ages of 13 to 17 and are known as Generation Z. According to a study from Better Homes and Gardens Real Estate, the home ownership wish lists of this group was revealed. Here’s what it found: • 89% surveyed say owning a home is part of what they believe the American dream is, followed by graduating from college (78%), getting married (71%) and having children (68%).

• The majority of the Gen Z teens surveyed say they are aiming to own their first home by age 28, which is three years earlier than the median age of first-time home owners. But before they purchase their first home, they expect to have an advanced college degree (60%), gotten married (59%), own a pet (58%) and have children (21%).

• Of the 97% who say they will own a home one day, they estimate paying an average $274,323 for their first home.

• 95% of Gen Z teens surveyed say they believe they would start their future home buying process online. They would view home listings and take virtual tours, but 29% also say they’d expect to be able to video chat with real estate agents.

• 59% say they believe they will undertake the search process for their future home with a real estate professional’s help.

• 47% of respondents say they’ll likely pick their future home in a suburban neighborhood, followed by 23% who say they’ll choose a city and 20% who say they’ll live in a country or rural area.

Share your photos wirelessly Eyefi is the company that lets you pop a Wi-Fi enabled SD card into a digital camera or smartphone. This special card wirelessly and automatically uploads photos and videos from digital cameras and smartphones to online, in-home and retail destinations through your computer, tablet or smartphone. Eyefi has also built an integration that will make it easier to dictate how and where photos are shared even sending directly to the Eyefi cloud.

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According to the 2014 Profile of Home Buyers and Sellers…

• First-time homebuyers constituted 33 percent of the market. This reflects a steady drop since 2010, and in fact is the lowest figure in more than a decade.

• 74 percent of buyers said that they used the internet frequently during the search process. In 2003 that number was only 42%.

• 34 percent of buyers said that they frequently used a mobile or tablet application.

• 63 percent of buyers said that they frequently relied on a real estate agent for information.

• 43 percent of buyers went to the internet as the first step in the home search process. 15 percent contacted a real estate agent first, 12 percent went online and 6 percent began by driving through neighborhoods looking for homes for sale.

• The most used sources used by buyers are on-line websites (88%) and real estate agents (87%). Mobile or tablet applications (50%) have replaced yard signs (48%) as the third most used source of information. Only 21% of buyers indicate that they used newspaper ads and a mere 4% garnered information from television.

• Only 1 percent of homebuyers found the home they purchased through a newspaper ad or home book/magazine.

Cool app for your arsenal If you host open houses for your clients, OpenHomePro may be the app of your dreams.

Every aspect of the user interface, from the front end to the back, is simple and responsive. The app ensures prospects will receive thank-you emails with additional property stats at the conclusion of the open house because it is able to capture and download lead information faster than ever before. All contact information is entered electronically and can be easily exported into a spreadsheet or CRM. This means no more Mondays spent deciphering visitors’ handwriting. It’s available for the iPad and Android devices and a broker platform is also offered. It’s not free but may be worth the cost.

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Take the KAR Survey of the Month

things people say their homes don’t have

The majority of Americans say they are living in less-than-ideal housing and neighborhoods. The Demand Institute polled more than 10,000 households (both renters and home owners) across income levels to find their top unfulfilled housing needs and desires. In the report titled, “The Housing Satisfaction Gap: What People Want But Don’t Have,” here’s what people don’t have that they wish they did: 1. Energy efficiency: 71 percent of respondents ranked it as important, but only 35 percent are satisfied with their current home’s energy efficiency.

2. Renovation-ready: More than 75 percent of households say their homes require repairs. The top five major home-improvement jobs identified among households are painting; replacing carpet/ flooring; remodeling a bathroom; remodeling a kitchen; and replacing windows and doors.

3. Updated kitchens and finishes: 62 percent of households say an updated kitchen with modern appliances and fixtures is important; only 38 percent are satisfied with their current home’s kitchen.

4. Accessibility: 76 percent of Americans surveyed believe a home they can stay in as they get older is important, but only 53 percent think their home meets that criteria.

5. Affordability: 20 percent of Americans surveyed say they are unsatisfied with the cost of their current living situation. 26 percent of owners and 40 percent of renters are spending more than 30 percent of their income on housing expenses.

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 > Education.

Lower cost projects bring higher return As the 2015 Remodeling Cost vs. Value Report makes clear, largescale jobs aren’t likely to return sellers their full cost. But there are improvements worth doing in anticipation of an upcoming sale. Some will return almost 100 percent of their cost. Others may not have as great a payback, but they can improve the market position of the property in relation to the competition. (Think about the impact of beautiful kitchen photos on online home shoppers.) In addition, several pricier projects can provide owners with a few years of enjoyment while still offering a decent payback down the road. Here are the top 5 projects nationally in terms of cost recouped (to view the entire report, visit bit.ly/costvalue2015): • Entry door replacement (101.8%) • Manufactured stone veneer (92.2%)

6. Safety: 22 percent of those surveyed say they’re unsatisfied with the safety in their current home. About 20 percent of that group - most of whom live in non-urban areas - say they feel their neighborhood has become less safe in recent years.

7. Privacy: 63 percent consider privacy important, but only 42 percent say they’re satisfied with their current home’s privacy.

Follow KAR on Facebook and Twitter Facebook “f ” Logo

facebook.com/kentuckyrealtors twitter.com/kyrealtors.

• Siding replacement, fiber cement (84.3%) • Garage door replacement (82.5%)

Amenities trump location in some cases

8. Greater storage: Almost 50 percent of people planning to move say they want more space than they have in their current home. 55 percent of households say a home with storage space is important, but only 35 percent are currently satisfied with their home’s storage space.

KAR has posted its Twitter feed and Facebook page link on the home page of its website (kar.com) so members and consumers can follow all the things going on with the association. Keep up with KAR on a real time basis – legislative updates, industry news, business tips and much more! Or you can visit the pages directly:

• Garage door replacement (88.5%)

CMYK / .eps

Forty-four percent of adults surveyed in the 2014 PulteGroup Home Index Survey of more than 1,000 adults ages 25 to 65, said they’d give up a location near public transportation and 35 percent would give up better schools and proximity to entertainment and shopping for certain upgrades in their next home. This indicates that home buyers are willing to give in on the home’s location in order to get certain must-have amenities in their next home.

Here are the top items that home owners said they’d be willing to make sacrifices on location in order to have: Facebook “f ” Logo

•

Move-in ready home: 64%

•

At least one bathtub in a home: 54%

•

More space than their current residence: 51%

•

His and her closets: 23%

•

Spa-like master bedroom: 23%

•

Large eat-in kitchen area: 23%

•

Kitchen island: 22%

CMYK / .eps

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

SPRING 2015 KENTUCKY REALTOR® 7

Legal Update

What is Non-Judicial Foreclosure?

By Jason C. Vaughn & Matthew Dry

Editor’s note: Kentucky saw one of its first non-judicial foreclosure bills during the 2015 legislative session. Backed by Kentucky Bankers, the bill died but is almost certain to reappear in the future. It will be important for Kentucky REALTORS® to understand the implications of such a bill and that is why we have asked the author to share more on this important topic.

N

on-judicial foreclosure is a procedure that allows lenders to foreclose on properties without having to go through the court system. It is faster and cheaper than foreclosures processed through the courts, but it also lacks the oversight that a court can provide. This can result in a greater abundance of mistakes in the foreclosure process that could have been caught by a court, as well as making it more difficult for borrowers to challenge the foreclosure process.

Non-Judicial Foreclosure: Overview In order to look at non-judicial foreclosures, it is helpful to first examine judicial foreclosures. In a judicial foreclosure state, a foreclosure sale must be initiated through the courts, i.e., a lender must sue the borrower before selling the property.1 A typical judicial foreclosure involves multiple steps: (1) the filing of a lis pendens that provides evidence of the amount of the debt, the fact of its delinquency, and reasons why the delinquency should allow the lender to sell the property; (2) service of process on all interested parties; (3) a hearing in front of a judge or courtappointed official who then enters a decree or judgment; (4) noticing a public sale of the property; (5) the public sale, usually an auction conducted by the sheriff; (6) post-sale adjudication of the disposition of the foreclosure proceeds; and, when appropriate, (7) the entry of a deficiency judgment.2 This process may be followed by an appeal to a higher court.3 In a judicial foreclosure state, the court has an active role in the foreclosure proceedings and oversees the foreclosure to ensure that it is being done properly and according to statutory guidelines.4 In a non-judicial foreclosure jurisdiction, a lender does not need court approval to initiate foreclosure and sell the property.5 A lender can foreclose on and sell property outside the court system so long as the borrower has signed a mortgage or a deed of trust containing a “power of sale” clause.6 Prior to the foreclosure sale, notice must be given to the borrower that the borrower is in default and that the lender is accelerating the loan and intends to sell the property.7 The type of notice that must be given and the time that must lapse between the notice and the foreclosure sale differs depending on the terms of the mortgage or deed of trust and applicable state statutes.8 A borrower is typically mailed written notice and, in most non-judicial foreclosure states, notice is also publically advertised or posted.9 Once the lender complies with all notice procedures then it will typically schedule the sale of the property with an auctioneer.10 In order to stop a non-judicial foreclosure, a borrower must initiate court action before the

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notice period is up by filing for an injunction to stop the sale, convince the lender or trustee selling the property to delay the sale, or file for bankruptcy.11

Where is it Used?

While a lender can opt to use either judicial or non-judicial foreclosures in a non-judicial foreclosure jurisdiction, when given the option lenders almost always choose to include power of sale clauses in their documentation and foreclose on property via non-judicial foreclosure.12 Non-judicial foreclosure is the dominant process used in thirty-one states and the District of Colombia.13 This includes almost all of the Western states and a large percentage of Southern states as well.14 Judicial foreclosure states, where the dominant method of foreclosure is through the court system, are mostly Midwestern and Northeastern states, with a few exceptions.15

Pros and Cons of Non-Judicial Foreclosure The key difference between judicial and non-judicial foreclosure is the ability in a non-judicial jurisdiction to avoid the court system, which leads to a significantly expedited foreclosure process.16 The time between when a borrower has notice of a foreclosure and the sale of the property in a foreclosure auction is substantially less in a non-judicial foreclosure state.17 A non-judicial foreclosure can be completed in 20 to 120 days, depending on the applicable state laws.18 A judicial foreclosure takes an average of five months longer than a non-judicial foreclosure.19 While a speedier foreclosure sale is seen as a benefit to lenders, it can be detrimental to borrowers who have less time to respond to the foreclosure action and obtain legal assistance or seek a loan modification.20 Borrowers may struggle to find legal representation to initiate court proceedings in challenge to an impending foreclosure sale.21 It can be challenging for borrowers to obtain counsel due to the shorter periods of time between the receipt of notice and the foreclosure sale and because of the lack of lawyers willing to navigate the foreclosure process for clients who are more likely to be struggling financially.22 Besides the faster resolution of the foreclosure process in nonjudicial jurisdictions, the other main benefit for lenders is cost.23 The combination of additional monetary costs in legal fees and delays in a judicial foreclosure state can increase the total cost of a foreclosure an average of 260 percent.24 Overall, the non-judicial foreclosure process is typically quicker, easier, and less costly for lenders.25 The effect of the significantly lower costs and quicker resolutions experienced by lenders in non-judicial foreclosure states is reflected in the much higher foreclosure rate seen in those states.26 Default events by borrowers lead to foreclosures in non-judicial foreclosure states at more than double the rate at which a default is converted to a foreclosure in a judicial foreclosure state, even when the default rate in the compared

states is similar.27 In other words, lenders operating in non-judicial foreclosure states have shown a much greater propensity to foreclose on property after a borrower defaults then lenders operating in a judicial foreclosure state.

The non-judicial foreclosure process is also more open to fraud and mistake due to a lack of judicial oversight and increased obstacles for a borrower that wishes to challenge a foreclosure.28 This has resulted in the titles produced by non-judicial foreclosures being considered to be less stable than titles from jurisdictions that require judicial foreclosures.29 Court supervision of foreclosures reduces defects through both judicial supervision and the adversarial nature of court proceedings.30 The lack of judicial oversight within non-judicial foreclosure states has led to an increase in foreclosures that are later declared void or voidable because of procedural or substantive defects, such as a foreclosure that is initiated when a borrower is not actually in default or a foreclosure that is initiated by a party who is not the note holder and therefore has no right to foreclose on the note.31

Conclusion A majority of states are non-judicial foreclosure states that allow foreclosure pursuant to a power of sale clause in a deed of trust or a mortgage. Such foreclosures are conducted outside of the court system by the lender or at its behest. Non-judicial foreclosure is faster and less costly to lenders and so is the preferred method of foreclosure where it is available. However, the increased ease of foreclosure has led to an increased foreclosure rate and an increase in title defects for foreclosed properties. Furthermore, the decreased cost and time for lenders comes at a price of eliminating judicial oversight, which could reduce the rate of such title defects and increase protections for borrowers who find it harder to challenge foreclosures in a non-judicial foreclosure state.

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

References Atif Mian, et al., Foreclosures, House Prices, and the Real Economy 1 (Kreisman Working Paper Series in Housing Law and Policy No. 6, 2014). 2 Grant S. Nelson & Dale A. Whitman, Reforming Foreclosure: The Uniform Nonjudicial Foreclosure Act, 53 Duke L.J. 1399, 1403 (2004). Mian supra at 8. 3 Nelson supra at 1403. 4 Elizabeth Renuart, Toward a More Equitable Balance: Homeowner and Purchaser Tensions in Non-Judicial Foreclosure States, 24 Loy. Consumer L. Rev. 562, 564 (2010). 5 Mian supra at 9. 6 Kelly D. Edmiston & Roger Zalneraitis, Rising Foreclosure in the United States: A Perfect Storm, 92 Econ. Rev. 115, 120 (2007). 7 Alexander, et al., Legislative Responses to the Foreclosure Crisis in Nonjudicial States 31 Rev. of Banking & Fin. L. 341, 343 (2011). Mian supra at 9. 8 Elizabeth Renuart, Property Title Trouble in Non-Judicial Foreclosure States: The Ibanez Time Bomb?, 4 Wm. & Mary Bus. L. Rev. 111, 140 (2013).

9 John Campbell, Can We Trust Trustees? Proposals for Reducing Wrongful Foreclosures, 63 Cath. U. L. Rev. 103, 126 (2013). 10 Renuart, Ibanez Time Bomb supra at 141. 11 Campbell supra at 127. 12 Quinn Curtis, State Foreclosure Laws and Mortgage Orientation in the Subprime Market 6 (July 26, 2013), available at http://ssrn.com/abstract=2298684. 13 Id. at 33−37. 14 See id. States using nonjudicial foreclosure as the dominant method of foreclosure: AL, AK, AZ, AR CA, CO, DC, GA, HI, ID, MD, MA, MI, MN, MS, MO, MT, NE, NV, NH, NM, NC, OR, RI, SD, TN, TX, UT, VA, WA, WV, WY. 15 See id. States that primarily use judicial foreclosure: CT, DE, FL, IL, IN, IA, KS, KY, LA, ME, NJ, NY, ND, OH, OK, PA, SC, VT, WI 16 Alexander supra at 344. 17 Id. 18 Renuart, Ibanez Time Bomb supra at 141. 19 Edmiston supra at 120. 20 Alexander supra at 344. 21 Campbell supra at 126. 22 Id. at 126−27. 23 Mian supra at 9.

24 Edmistion supra at 120. 25 Renuart, Equitable Balance supra at 567. 26 Mian supra at 10. 27 Id. at 10−11. 28 Renuart, Equitable Balance supra at 568−69. 29 Nelson supra 1498. 30 Id. at 1499. 31 Id. at 1499−1502.

(This discussion should not be viewed as legal advice.

Please consult your attorney.)

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

SPRING 2015 KENTUCKY REALTOR® 9

Feature Article

15 Remarkable Apps for Your Real Estate Business

By Reggie Nicolay, Realtors Property Resource®

O

ur phones and the apps we use have become central to our daily productivity. Some apps streamline an existing process, or simplify a task, while others introduce new services we never thought we’d use on our phones. What’s great about each app is the freedom and anytime access it affords us. With 2015 underway, I’d like to share 15 fresh and powerful apps that should be on every Real Estate agent’s phone.

Refresh

RPR Mobile

BombBomb

Scannable

Photoshop Express

One of my favorite apps right now is Refresh.

This app can be very helpful with your everyday interactions. It works by connecting everything from your social networks, contacts, calendar and more to bring in the big picture of who you are meeting with, by delivering you insights before each meeting.

Or maybe you just want to know more about someone, search their name to locate background information, etc. It’s like searching through multiple social media profiles all from one simple app.

It wouldn’t be a complete list without RPR Mobile.

You never know when you are going to get that next property question. RPR Mobile delivers the data and reporting found on the RPR website, directly to your phone. Using RPR Mobile, REALTORS® can use their location to search both on and off market properties, while also uncovering mortgage, historical and distressed data, flood zones, school info and more. Then easily create one of 5 different property and neighborhood reports, each branded with your photo, logo and contact information. As a REALTOR®, there is no cost to use RPR, the system is 100% covered by your NAR member dues.

Communicating through video can be very powerful. And being able to do it from your mobile device, means that you don’t need an elaborate setup just to get the job done. That’s where BombBomb comes in, it’s a slick app that makes video email possible, while also giving you metrics to track who is viewing your content. Each video you make is delivered using a branded template that plays on any device.

BombBomb also works with RPR reports, so the next time you want to send a monthly update give this combination a try. It’s worth noting that BombBomb requires a subscription, but you can give the service a try using their 2 week trial.

If you use Evernote, you’re going to appreciate this app! Scannable is the newest app from Evernote, and makes saving and sharing scans easy. Just aim the camera, and Scannable immediately identifies business cards, receipts, and other paper items it’s pointed at. The app automatically detects the document edges and then captures it. In regards to the business card scanning, I really like the additional photo and LinkedIn details that it added to the contact records. For now this app is only available for iPhone and iPad, although an Android version is rumored to be in the works.

What’s your go to app for editing images? If you don’t have one, install Adobe Photoshop Express.

This powerful app does all the basics like cropping, rotating, red eye and blemish removal. Also makes it easy to apply adjustments to correct contrast, exposure, and white balance. Once you’ve applied your tweaks to the photo, save back to your camera roll or share to social media sites including Instagram, Facebook and Twitter.

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Lastpass

IFTTT

Todolist

Deduct

Microsoft Word

Remembering all of your passwords can be a hassle. And to be safe, each password should be different and secure.

So how do you keep track of them all? Introducing Lastpass—a powerful cross platform password manager. The app is a powerful, and saves time by allowing you to access and manage passwords wherever you are, and syncs those passwords between your devices.

For iOS 8 users, Lastpass integrates directly into Safari as an extension.

If you access passwordprotected sites regularly, you might want to check out their premium service for a $12 annual fee.

Much more than just another acronym, If This Then That (IFTTT) aims to automate tasks between Internet-connected services. IFTTT has more than 160 channels for you to create connections between. For example, maybe you want new comments on your blog to send you a text message, or you want to backup each new contact you add to your phone in a Google Spreadsheet, or maybe even log how much time you spend at home or the office. This and thousands of other configurations can be accomplished with this powerful service.

At first glance you might think this is just another to-do app, but I think it’s much more. I use this app for managing the tasks that come in from my email. I’ve use Todoist in conjunction with their Google Chrome add-on so that when I’m in my webmail. I can add any email as a follow up task.

Best of all, when I select the task it brings up the email originally referenced in the task. Saving me the time of hunting through my inbox. The free version of Todoist can manage up to 80 active items; if you exceed that number consider the premium version for $29 a year.

When it comes to tax time, Deductr 2 is an app that will help you make tracking tax deductions easy. Use the app to add business income and expenses, log receipts, even track mileage using your phone’s GPS. Then come tax time, use the Deductr website to create a profit & loss report, tax summary, mileage summary and lots more. Although the app is free, the Deductr Pro service is $19.95 a month or $199 for the year. This can be a small expense given that without proper records, many REALTORS® likely pay thousands extra each year in overpaid taxes.

Word is still the go-to document editor, and with this app viewing and editing Word documents on your phone is easier than ever. Unlike with other document viewers, the Word app ensures your documents view and behave how they were intended. I find myself often using the app to track and view document changes from my team. Also when I am finished with a document, it’s easy to print using AirPrint. One thing to note, although the basic app is free, an Office 365 subscription is required to unlock the full Office experience.

SPRING 2015 KENTUCKY REALTOR® 11

Feature Article

Apps for your Real Estate Business

RoomScan Pro

Videolicious

Buffer

Vert

Box

This Roomscan app is designed to draw floor plans for you, by simply holding your phone up against each wall. As you tap the wall, you will see it appear on your screen, now move to the next wall and repeat. Continue until you are back where you started. The makers of the app claim that Roomscan is accurate to within half a foot. If you need to be more accurate, Roomscan Pro has an option allowing REALTORS® to manually add your own measurements, doors and windows.

This app makes quality video creation easy. Give Videolicious a try by first recording yourself talking into the camera. Then add any photos or videos over the top as b-roll. Next add music and cinematic filters to your photos and video footage. The completed videos can be saved, emailed and shared via social media channels like Twitter, Facebook and YouTube. To test the app, try the free personal account. If you like what you see, pay $60 annually for their business plan.

The Buffer app provides a great interface for managing multiple social media accounts like Twitter, Facebook, Google+, and LinkedIn. With Buffer pick what you want to share and set when you want the items to be shared. It’s that easy. Just don’t forget to engage with any replies or comments that come in.

As a REALTOR®, you often need to convert metrics, whether it’s size, weight, length, even currency. This nifty app makes those conversations dead simple—tap on the measurement and then swipe. The basic app is free, and Pro version is $2.99.

If you are a fan of Dropbox but looking for more security and control, Box is the perfect app for you. Box provides the ability to view, download, edit and annotate files, and then securely send those files to colleagues or clients anywhere. With Box, I’m also able to mark a folder for offline viewing.

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Finance The New Loan Closing Statement and Cost Estimate: What does it mean to the REALTOR® community?

By Jeff Ratanapool

O

n the heels of the “Great Recession” of 2005, the Mortgage Lending industry is still swallowing the most comprehensive legislation to be passed in the last decade. The last four years has had more change than the previous 50 years combined. From appraisers to loan officers to borrowers and REALTORS®, none have been exempt from the rules. The latest round of regulations become effective on August 1, 2015. Specifically, I am referring to the new Loan Estimate and Closing Statement.

As a refresher, borrowers currently receive a Good Faith Estimate and Truth-in-Lending disclosure within three days of their loan inception. These forms follow the borrower all the way through the loan process until closing. At that time, the numbers convert to the HUD-1 Settlement Statement and a final Truth-in-Lending disclosure on the day of closing. Changes to the terms of the loan, outside of allowed tolerances, can trigger a waiting period of 3-7 business days under the current rule. What can trigger a change? A change in loan program, additional fees charged or a change in the interest rate on the borrowers existing loan program are the primary culprits today.

Effective August 1, 2015, borrowers will now receive a Loan Estimate within 3 days of their loan inception. The form will also include their Truth-in-Lending terms. The form is easier to read and understand, and will still be subject to the change rules that are in place currently for the Good Faith Estimate and Truthin-Lending terms. Beginning with closings after loans originated with August 1, 2015 dates or later, the HUD-1 Settlement Statement is being replaced with a Loan Closing Statement. The Loan Closing Statement will include the final fees and terms of loan to be disclosed to the borrower.

at the closing table, are typically absorbed with minor difficulty today. After August 1, 2015, they will either not be allowed, or will cause a 3 day delay in closing.

The real challenge for our local real-estate community will be making sure we get all the fees right and upfront and we communicate with the borrowers about the 3 day rule. Lenders, like Century Mortgage, are currently installing systems to ensure delivery and receipt of the document to prevent delays. If a lender cannot confirm receipt of the Loan Closing Statement, we are instructed to fall back on the “mail box” rule. This rule would mean the 3 day wait for closing will be extended to 7 days.

Outside of that one major change, the current forms have been compressed into a simple, easy to understand disclosure for the borrower. As well, since the final terms are locked 3 days prior to the consummation of the closing, closings should go much smoother and faster.

Jeff Ratanapool is the COO of Century Mortgage Company. Headquartered in Louisville and with multiple offices throughout Kentucky, Century Mortgage is the largest, privately owned mortgage bank in Kentucky with over $1,000,000,000 in mortgages funded annually. Jeff is KREEF’s instructor for GRI 300 where he has been teaching for over 10 years. Jeff will be presenting a course on this material at the 2015 KAR Convention & Expo in Owensboro on September 22-24.

The Loan Closing Statement is truly where the REALTOR®, borrower and lender community will be impacted the most. The largest impact is that borrowers will have to receive their Loan Closing Statement 3 days prior to closing. Yes, closings CANNOT occur until 72 hours have passed since the borrower has RECEIVED their Loan Closing Statement.

As far as the changes that occur with the loan after the Loan Closing Statement has been issued, we could see an additional 3 day delay if allowed tolerances are exceeded. A note here is that the current rule is following that same timeline.

So, the real challenge will be the initial 3 day waiting period.

What will trigger a change? Any changes to fees that impact the borrower’s loan. So, you can still add a cost to the seller side of the Loan Closing Statement. You can still make the normal changes that you are used to making today and the loan will close on the same day.

What you cannot do without jeopardizing your closing date is add a fee that was not disclosed to the borrower. One of the common fees we see added at close are Broker Administration fees. The small $99-$149 fees that get added

SPRING 2015 KENTUCKY REALTOR® 13

Legislative Update HB 149: Post-License Education

2015 Legislative Scorecard - Regular Session

KAR has long been a strong advocate for raising professional standards and increasing education requirements for real estate licensees. As a direct result of KAR’s effort, on March 30, 2015 Kentucky Governor, Steve Beshear signed KAR’s initiated and backed House Bill 149 (HB 149) into law leading to one of the most significant real estate education policies in the last two decades. HB 149 requires 48 hours of Kentucky Real Estate Commission approved education within 2 years after a person receives a real estate sales license. The law will only apply to new licensees who receive their license after January 1, 2016. The online or classroom courses must be taken at an accredited institution; or a commissionapproved: real estate school or broker-affiliated training program.

Bills Filed – 752 KAR followed – 50 Passed by both Chambers and delivered to Governor – 127

KAR would like to thank Senator Albert Robinson and the bill sponsor Representative Tommy Thompson who found common ground to move this legislation during the 2015 session. The House Committee on Licensing and Occupations unanimously moved the bill and subsequently passed the House of Representatives with overwhelming support by a vote of 91 to 0. The Senate Committee on Veterans, Military Affairs and Public Protection moved the bill and the full Senate voted 37 to 0 to send the bill to the Governor.

Kentucky Association of REALTORS® 2015 President, Norman Jones, said, “Forty-eight hours of post-license real estate education represents an optimal number of curricular hours for the topics that need to be covered and positions Kentucky to be proactive in facing the challenges of ensuring competent licensees.” While regulations must now be promulgated by the Kentucky Real Estate Commission, KAR will be advocating for courses work that will cover a wide array of topics so licensees can tailor their education to match their professional interests.

HB 149 has been supported by a wide range stakeholders, including the Kentucky Real Estate Commission, the Kentucky Association of REALTORS® and numerous boards of REALTORS® located throughout the Commonwealth. Currently, according to the Association of Real Estate License Law Officials, Kentucky joins 24 other states that require mandatory post-license education.

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KAR priority legislation that passed both chambers and was sent to the governor for his signature: •

HB 149 – Thompson – Post License Education – Requires new licensees to complete 48 hours of classroom/online hours of KREC approved post-license education within 2 years of receiving their license.

KAR priority legislation that did not pass: •

HB 311 – Lee and SB 123 – Girdler - Dog Bite Legislation modified the definition of persons who would qualify as the owner of a dog. The bills remove the landlord from liability if the renter’s dog bites someone.

KAR supported legislation that did not pass: •

•

•

•

HB 317 – Marzian – and SB 156 – McGarvey - Civil Rights: Kentucky’s civil rights chapter, to include a prohibition against discrimination because of sexual orientation and gender identity. The bill applied to labor and employment practices, places of public accommodation and advertisements, and housing, real estate, and other financial transactions.

HB 389 – Kay – Mortgage Interest Deduction - allow a firsttime homebuyer an additional deduction for interest paid on indebtedness related to a qualified residence.

HB 405 – Jenkins – Tenancies in Real Property – Domestic Violence victims may terminate their lease with at least 30 days notice, while the lease continues for co-tenants.

HB 424 – Wayne – Public Records - Require county clerks who keep an electronic version of the cross-index of conveyances recorded in his or her office, who made any corrections to include an audit trail of the correction and this which shall remain part of the electronic version.

Get out and vote!

Plan on heading to the polls on Tuesday, May 19 to vote for Constitutional Offices. Kentucky REALTORS® have an 88% voter registration rate which is higher than both NAR and the Commonwealth of Kentucky. Get involved, get out the vote and make sure the REALTOR® voice is heard on Election Day. 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

2014 RPAC Awards and Honors Highest Member Participation – Henderson Audubon Board of REALTORS – 107% Pacesetter (first to achieve goal) – Hopkinsville Christian & Todd County Association of REALTORS – December 2013 Most Contributions Raised (Overall) – Greater Louisville Association of REALTORS - $53,590 Largest Percentage Over Goal – Small Board Division – Hopkinsville Christian & Todd County Association – 353% Largest Percentage Over Goal – Medium Board Division - REALTOR® Association of Southern Kentucky – 211% Largest Percentage Over Goal – Large Board Division - Lexington-Bluegrass Association – 156%

Jess and Carolyn Kinman Award

KAR opposed legislation (real estate legislation defeated): • •

•

•

•

HB 132 – Wayne – Taxation – Increased taxes by half billion dollars opened the door for taxing services.

HB 368 – Marzian – Landlord and Tenant Act - apply the Uniform Residential Landlord and Tenant Act on a statewide basis.

HB 371 – Riggs – Radon Certification – remove exemptions for apprentices to work under the “General Direction” of a licensed individual; change the renewal cycle from annually to biennially; mitigation system registration fee in an amount not to exceed $50.

HB 531 – Riggs – Planned Communities – Created a new section for planned communities governing homeowner/ neighborhood associations addressing minimum content for bylaws, board of directors, financial reports, disclosures and sales contracts.

SB 155 – McGarvey – Airport Noise - allow a planning unit to incorporate airport noise overlay districts within its zoning texts and maps; allow the planning unit to incorporate guidelines on building techniques and materials that are designed to provide acoustical insulation benefits to structures within the zone.

The Kinman 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 Legislative Research Commission and the General Assembly. The award 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 him or her. In 2015, the award was given to State Senator Julian Carroll and State Representative Larry Clark.

SPRING 2015 KENTUCKY REALTOR® 15

Legislative Update Drone use in real estate The Federal Aviation Administration’s proposed rules for the commercial use of unmanned aircraft vehicles, or drones, announced in February has generated much discussion among members about the legality of their use in the real estate industry. Many real estate pros

are enthusiastic about the prospect of using drones to capture aerial photos and videos of properties for sale, but without an exemption, their commercial use remains prohibited, explains NAR Associate Counsel Lesley Walker. “A recent decision by the National Transportation Safety Board supports the FAA’s longstanding position that UAVs are ‘aircraft’

under federal law and therefore subject to FAA regulations. While the FAA’s proposed rules would allow for future commercial use of UAV’s until final rules are issued and without an exemption, any current commercial use of a UAV could result in an FAA enforcement action.”

The FAA’s proposed rules stated that drones should be legally allowed to fly in the United States for business purposes and would allow commercial use of drones in a variety of situations, including real estate photography. The rule governs machines weighing 55 lbs or less, and some of the restrictions placed on operators include: daylight flights only, line of sight operations only, flights limited to an altitude of 500 feet, and operator certification (passing a knowledge test) by the FAA. The proposed rule does not require the operator to obtain a pilot’s license. The proposed rule also includes extensive discussion of the possibility of an additional, more flexible framework for “micro” UAVs under 4.4 pounds.

“The proposed rules announced for the commercial use of unmanned aerial vehicles are good news for property owners and REALTORS® who desire to embrace cuttingedge technology to enhance the process of buying and selling real estate with images

gathered by unmanned aerial vehicles,” says NAR President Chris Polychron, who applauds the proposed rule, believing it “would allow for safe commercial use of UAV technology by the real estate industry for the purposes of marketing real estate.”

Polychron added that “NAR plans to submit comments to the agency and will continue to work with our members to educate them about the future safe, responsible and legal uses of UAVs. However, until the final rule is published, NAR discourages REALTORS® from using UAV photography or video for commercial purposes without an FAA exemption.”

An FAA exemption was granted to Douglas Trudeau, a REALTOR® in Tucson AZ, to use UAVs to create marketing videos to sell property. While Trudeau has to comply with the requirements set out for him by the FAA, NAR is heartened that this represents a positive

In a KAR survey, 62% of members said they are using or will use drones in their business, while 29% said they would consider using drones and 9% said they would not use drones. To take the survey, visit kar.com/QOTM

2014 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 Ton A. Ali Nita Allen-Phillips Dennis R. Anderson Michael H. Becker C. Lamont Breland Brian Brockman Bonnie Byerly Mary E. Carpenter

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Linda Gibson Cecil Steve K. Cline Jayne Cox AnnElizabeth Delahanty Brad DeVries Kristy D. Dugan Glenn C. Edelen Carolyn S. Edwards Barbara Flannery Lonnie R. Gann Donna Gordon-Willoughby

Leslie D. Heath Ronald E. Hughes Todd Hyatt Michael T. Inman Norman Jones Connie C. Lawson Brenda Loyal Rue O. McFarland Jerry McMahan* Joseph McClary Ann D. McDonald**

Louise M. Miller Becky Murphy Judie Parks Dave L. Parks R. Rip Phillips Cindy Flynn Piela Arthur Reed Becky Reinhold Jan Scholtz Joseph E. Simms Mike Spicer Lisa Stephenson John A. Stough Carl M. Tackett* Harrell N. Tague Libbi J. Taylor Greg Taylor Linda J. Wiley Melissa Winchell

Federal Issues Flood insurance Increases an Average of 10% on April 1 The National Flood Insurance Program (NFIP) has released the 2015 rate changes which take effect on April 1. On average overall, rates are rising 10%. This is consistent with the 5-10% increases prior to the 2012 Biggert-Waters Act. There is also a new surcharge to pay for recent NFIP legislative reforms.

Last year, Biggert-Waters was amended for about 20% of policy holders who bought an older property (including second homes) and jumped from a subsidized rate to full cost for flood insurance overnight. The amendments resolve the implementation problems by resetting the rates to pre-Biggert-Waters levels and capping them at 18-25% per year in the future.

Credit Reporting Firms to Improve Practices On Monday, March 9, 2015, the 3 largest credit-reporting firms – Equifax, Experian, and TransUnion – reached an agreement with New York state to overhaul their reporting and error resolution practices. Many of these changes will be implemented on a national basis roughly over the next three years.

Specifically, the firms will be required to use trained employees to review and resolve consumer disputes.

Another major change will be the removal of medical debts from credit reports once the debts are paid instead of the typical seven years. Finally, the credit bureaus will be required to implement a 180-day waiting period before adding any medical debt information to consumers’ credit reports. This grace period is intended to allow consumers to clear up any discrepancies and catch up with other unpaid bills. Since 2010, NAR has called on industry participants to reassess and amend credit policies that have been unduly restricting consumer access to mortgage credit.

From initial reports, the agreement appears consistent with the Consumer Financial Protection Bureau’s key concerns with the credit-reporting firm’s error resolution process and the rising role of medical debts in consumer reports.

sold only to buyers who intend to occupy the property as their primary residence or to non-profits. ensuring competent licensees. The courses can cover a wide array of topics so licensees can tailor their education to match their professional

DID YOU KNOW ?

In 2014, KAR supported 30 Republicans and 24 Democrats, and our candidates won in 48 of 54 races (or 89%) held within the state.

KAR Members in Frankfort

FHFA Improves Note Sale Program On March 2, 2015, the Federal Housing Finance Agency enhanced requirements for sales of non-performing loans by Freddie Mac and Fannie Mae (the GSEs). In a letter last year to Director Mel Watt, NAR raised concerns that this disposition strategy gives investors an advantage over potential owner occupant buyers. NAR requested more information on the sale of the notes and asked FHFA to study the cost and impact of bulk note sales to institutional investors. In January, NAR met with FHFA officials who indicated that coming changes would improve the note sale process.

As part of the changes, borrowers whose loans are sold as part of the program must be considered for other relief such as a short sale.

Additionally, if the home should go through the foreclosure process, for the first 20 days after an REO property is marketed, the property may be

SPRING 2015 KENTUCKY REALTOR® 17

KAR Awards KAR Distinguished Service Award

2014 Nat Sanders Education Award

The 2014 KAR Distinguished Service Award was presented to Carolyn Stone Edwards, a REALTOR® with RE/MAX Creative Realty in Lexington and member of the Lexington Bluegrass Association of REALTORS® (LBAR). This award is given to someone who has provided outstanding contributions and service to the real estate industry and his/her local community.

Edwards was president of KAR in 2006, treasurer in 2004, served as a regional vice president for six years and was named REALTOR® of the Year in 2007. Through her involvement over the last 28 years, she has served on many committees, work groups and task forces at the state level. Edwards served as president of LBAR in 1993 and was twice awarded REALTOR® of the Year (1994 & 2007). She served two terms as president for the REALTOR®-Community Housing Foundation and is still serving on the Board. With the National Association of REALTORS®, Edwards chaired the Credentials Committee and has served on other committees over the past several years. Edwards previously served on the Lexington Urban Fayette County Government’s (LFUCG) Board of Adjustments and was a past member of the LFUCG Human Rights Commission where she chaired the Housing Committee for two years. Through her real estate office, Edwards is involved in many charitable organizations including the McKenna Foundation, Children’s Miracle Network and Habitat for Humanity, where she served as KAR’s team leader for a Global Village Trip that helped rebuild homes in Mobile, Alabama after Hurricane Katrina

Harry Borders, a Louisville attorney who specializes in real estate closings and teaches various real estate courses for both the state and local associations, was presented the 2014 Nat Sanders Education Award.

Borders is an instructor for the Graduate, REALTOR® Institute program through KREEF, a certified instructor through the Kentucky Real Estate Commission and a highly requested educator throughout the state. This award, created to honor Nat Sanders, former executive vice president of the Greater Louisville Association of REALTORS®, 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.

KAR REALTOR® of the Year Betty Schutte, the broker/owner of Betty Schutte REALTORS® in Louisville and member of the Greater Louisville Association of REALTORS® (GLAR), was named KAR’s 2014 REALTOR® of the Year.

Schutte has been a REALTOR® for over 40 years and has served the real estate industry at the local, state and national levels. She was treasurer for KAR in 2001 and also served on the Board of Directors, Delegate Body and Leadership Team. Schutte has been a member of the Investment Committee, 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). She served as president of GLAR in 1998, honored as REALTOR® of the Year for the board the following year and, in 2007, was named to the GLAR Wall of Honor. Schutte has also served as president for the local chapters of both the Women’s Council of REALTORS® and the Institute of Real Estate Management. In 2010, she was inducted into the RPAC Hall of Fame and is a Golden R major investor as well as a member of RPAC’s President’s Circle. Schutte currently serves as a Federal Political Coordinator where she is a liaison to Senator Mitch McConnell.

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Award nominating forms REALTOR® of the Year Award Deadline: Monday, June 1

Nat Sanders Educator Award Deadline: Saturday, August 15

Distinguished Service Award Deadline: Friday, June 12

REALTOR® Community Service Award Deadline: Saturday, August 15

Good Neighbor Award Deadline: Monday, June 1 If you want to nominate someone (even yourself) for these awards or want to learn more, visit www.kar.com > Members > Awards

LeadershipKAR Members of the 2015 LeadershipKAR class enjoy team building at Wooded Glen. (Back Row) Tommy Black, Corbin; Dave Earls, Elizabethtown; Keisha Brooks, Williamsburg; Angela Clark, Owensboro; Kelley Nisbet, Winchester; Kristin Brockett, Ft. Thomas; Kim Sickles, Louisville; Randy Newsome, Morehead; Brian Bingham, Richmond. (Front Row) Stephanie Hembree, Berea; Laura Disney, Lexington; Mary E. Carpenter, Bowling Green; Cindy Flynn Piela, Louisville; Trish Segrest, Louisville; Sue Ann Collins, Florence.

Education Education scholarships available www.kreef.org > Scholarships KREEF scholarships are available to assist members in furthering education through the GRI program as well as offering assistance for college/post-secondary education. Also, just introduced this year, prelicensing assistance has been added. The deadline for applying is Friday, June 12. To review specifics of each scholarship, visit the webpage directly.

Pre-licensing course available online – it’s affordable and convenient www.kreef.org > Pre-licensing In order to meet the needs of today’s student, KREEF is offering the entire 96 hour 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.

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.

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 for broker credit and the completed GRI program counts for ABR elective credit.

Real Estate Licensing Exam Pass Rates Over the past couple of years, the Kentucky Real Estate Commission has been engaging in a more in depth review of the testing statistics for the real estate licensing exam. This includes compiling and reviewing the pass/fail rates for both the salesperson and broker examinations. In order to receive a real estate license in Kentucky, a candidate must pass both the National and State specific portions of the exam. In November 2014, Tadas Dabsys, Executive VP of Marketing & Solution Management with PSI, which serves as the KREC’s testing provider, attended a Commission meeting to discuss this issue. Mr. Dabsys shared that PSI has had an ARELLO accredited exam for over 20 years.

He explained that, in order to develop the exam, PSI goes through a thorough job analysis, establishes a content base and links knowledge areas to professional activities. Mr. Dabsys provided the following statistics for Kentucky pass rates: 2013 Sales associate first time pass rate:

77.7%

Sales associate repeat pass rate:

45.19%

Broker first time pass rate:

87.14%

Broker repeat pass rate:

88.57%

Sales associate first time pass rate:

76.41%

Sales associate repeat pass rate:

47.01%

Broker first time pass rate:

73.47%

Broker repeat pass rate:

66.57%

2014

Mr. Dabsys further shared that when compared nationally, Kentucky only has 3 or 4 states with higher pass percentages. He explained these higher pass rates are a reflection of the focus that KREC and Kentucky real estate educators have on providing quality real estate education. KREC is continuing to gather information and data on its licensing exam with the goal being to maintain a fair examination that ensures qualified and capable individuals are obtaining Kentucky real estate licenses.

SPRING 2015 KENTUCKY REALTOR® 19

Business Tips

Snow Days: Get Up and Get Busy

By Leigh Brown

Disclaimer: to all current and former Yankees — it’s different in the South when we get snow and/or ice, and trust me, we had our fair share this winter.

No judgment from you shall be tolerated.

“I’m bored.”

annoyed with your siblings and completely under your mama’s skin?

“There’s nothing to do.”

REALTORS®, believe it or not, have snow days, too. And should.

Enough of working 24/7, I say! Take the time to smell the roses and take a nap and recharge your batteries! Why?

“I’m cold.”

“Stop it!”

“She’s looking at me!”

“He’s breathing weird!”

It doesn’t even have to be a snow day for those phrases to come out of my children’s mouths. But on a snow day, they multiply exponentially.

On multiple snow days... “Just. Make. It. Stop!”

You remember your childhood snow days. Even those of you who trudged uphill for 10 miles barefoot in both directions in six foot drifts had the occasional day off from school. What did you do? Play outside?

Drink hot chocolate? Play board games? Still wind up terribly bored and

“She won’t call me back!”

“He didn’t give enough appointment notice!”

“I am not getting enough leads!”

“Why won’t they just BUY already?”

When it seems that every phone call rubs you the wrong way, or everything that surrounds you is drama, you NEED that snow day. This is why you have to be careful, though. One snow day is great. five in a row? Deadly.

What happens when you get off your routine? If you were around during the rough years...remember what happened to your routine in 2008, 2009, 2010? When things got slow, many agents forgot what to do next. When you forget what to do next, you don’t do anything. Then you get scared because you have nothing to do. It’s a hard cycle to break.

Now we’re seeing the turn, but the recovery does still have its fits and spurts. Class after class has taught “Back to Basics.” But what exactly are those? In 2015, what DO agents want?

Leads! Leads! Leads! More leads! a.k.a. the silver bullet.

When you get off the regular routine of prospecting – of calling, writing, visiting past clients. When you let the “Hour of Power” go, your pipeline dries up. And instead of using those snow days to your advantage, the slower moments, for doing the “basics,” agents seek a silver bullet.

There MUST be something we can buy for $99/month that will generate actionable A+ leads right now!

So instead of using the snow day (i.e. the slow day) for the boring stuff, which has a long term benefit, we get lazy (or somehow think that whiling away the hours online is working) and then just magically hope it will all be better the next day.

As the alternative, what if that snow day became a chance to read the business book you bought at last year’s conference, after you heard that amazing speaker, but which sat collecting dust because you were ‘too busy’ to read it? What if that snow day became a chance to input the 2014 closings into a spreadsheet so you can effectively call and check on the folks who trusted you with a purchase or a sale? What if that snow

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• •

day became the focused time to actually use that shiny gadget to CALL people and ask how they’re doing instead of playing Candy Crush or Words With Friends (we’re all guilty, right?)?

The result might just be a pipeline full of possibilities instead of an empty to-do list of panic.

Read something beneficial to your business, or your spiritual life, or your mind. Check the twitter feed for NAR and NAR Research, and evaluate the current trends. Oh by the way, if technology is Greek to you, call someone who can explain it.

There are tons of REALTOR® geeks who LOVE this stuff and can help you put it into layman’s terms.

Smile. Laugh. Go have a cup of coffee with someone. Anyone.

And put the phone down THE WHOLE TIME. It’s amazing what connections will result. You might wind up saving that $99/month and still watch your business grow.

Dedicated. Enthusiastic. Responsive. Knowledgeable.

Professional. These are words that describe Charlotte, North Carolina REALTOR® Leigh Brown, the keynote speaker for the 2015 KAR Convention & Expo in Owensboro on September 22 -24. Though Leigh’s career background is colorful – she has sold liquor, stocks, and chainsaws – for the past 14 years, she has been dedicated to building relationships with her clients in real estate, both current and past. Her enthusiasm about the real estate industry shows on her face, in her work ethic and within her strong team – which sells an average of 300 homes per year.

Leigh’s industry passions include working with NAR, CRS, and RPAC to improve the lives of REALTORS® and to protect property rights for all.

Leigh’s personal passions include her family, church, singing and playing the piano.

So on your next snow day or slow day or need-to-get-your-act-together day, here are some ideas to get up and get busy.

• •

Call somebody. In fact, call 5 somebodies. Doesn’t matter who. Just make a connection. Ask how things are going in their world. Guess what? They’ll probably ask you how the market is. For heaven’s sake, tell the TRUTH. If it’s hot, great. If it’s balanced, yay. If it’s gone quiet, say so. Don’t just spew off “I sold 4 houses today and listed 5 and houses are FLYING off the shelves” because you heard your competitor say it on Facebook.

Go preview something. In fact, preview five somethings.

In your market, there are homes that you need to view, so you can be educated on the available inventory. Nothing in the MLS? Call up some For Sale By Owners or Make Me Move folks and request to view their homes. Nothing pleases buyers and sellers more than knowing that agents are paying attention to their home.

SPRING 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.

Greater Owensboro REALTOR® Association GORA affiliate member, Jagoe Homes, an area home builder, pledged proceeds from the sale of a new home to Aid the Homeless. GORA member company L. Steve Castlen REALTORS® listed the home, Castlen agent Tyler Shookman sold the home and both Castlen and Shookman waived their listing and sales commissions on the transaction allowing for $19,696 to be donated, bringing the total raised by the charity in 2014 to $60,275.

In addition, the 2015 fund raising venture, Aid the Homeless, to aid local area homeless shelters is scheduled for June 4 at the Owensboro River Park Center. In its fourth year, the goal is to make another significant contribution by adding to the $140,947 previously raised by the charity. The cost to produce the event is offset by proceeds from an annual Association golf scramble, thereby allowing for 100% of the Benefit sponsorship donations to be given to the shelters.

Lexington Bluegrass Association Continuing its long-term commitment to homeownership, in 2014, LBAR invested in local economic development organizations within its jurisdiction as part of a $165,000 contribution the association has pledged over the next five years to promote economic development. Through a financial investment to local economic development organizations, this initiative supports activities directly related to job creation, expansion and retention.

Organizations that applied and received an investment in 2014 included: Lawrenceburg-Anderson County Economic Development Authority, Commerce Lexington, Kentucky Capital Development Corporation, Jessamine County Joint Economic Development Authority, Mt. Sterling-Montgomery County Industrial Authority, Scott County United, Inc. and Woodford County Economic Development Authority.

REALTOR® Association of SKY Community service projects fill the calendar for RASKY in the spring.

In March, the Association held RPAC projects including March Madness, a Fashion Show and, sponsored jointly with the Builder’s Association of SKY, a Leadership Reception. In April, the Hope for Homeless event, the Association’s signature event, will be held where over 50 members work tirelessly to make it happen. RASKY will sponsor a student to drive the RASKY car in the Soap Box Derby in May and will also hold their annual golf tournament

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at the Crosswinds Golf Course. Helping with these projects is a very active Young Professionals Network (YPN) which also holds lunch and learns throughout the year.

Greater Louisville Association The GLAR Community Relations Committee hosted their popular Charity Bowl-a-thon in February to raise money for 3 local charities Hand in Hand Ministries, Child’s Spirit and West End School. Over 250 REALTORS and Affiliates participated in the event and $4,600 was raised! Then, during the month of March, GLAR held a Diaper Drive for St. Bernadette’s Diaper Bank. The donated diapers are given to low income families throughout the Louisville area. Members were asked bring a pack of diapers every time they visited the GLAR office for a class or meeting.

Old Kentucky Home Board The Old Kentucky Home Board, along with the local newspaper, the Kentucky Standard, as one of their most interactive affiliate members, have collaborated on several projects over the past couple of years including becoming co-sponsors of the Spring Home and Garden Show.

Organizing and running the event together, the board members are available throughout the day, serving as hosts and distinguished experts in “Homeownership Matters.” Another arrangement between the two is a bi-weekly newspaper article about all things associated with real estate. The articles always emphasize the importance of working with a REALTOR®, the value of our Code of Ethics and the positive affect that homeownership has on our communities. The benefit is win-win as the board gets to inform the community about home ownership and the newspaper gets local content which is valuable in a hometown newspaper. In the past three years, we’ve had over 75 locally generated articles published in our Kentucky Standard. Also, the OKH Board is celebrating its 50 year milestone this year as the original charter was issued on May 11, 1965.

Louisville riverfront makes list as a top favorite Readers of USA TODAY and 10Best came out in droves for a vote on America’s Best Riverfront. The award, as chosen as a “readers’ choice,” named Louisville one of the 10 best in the country, ranking number six on the list. Here is what the site had to say about Louisville: Since 1986, Louisville’s frontage along the Ohio River has undergone quite the renaissance with the introduction of the 85-acre Waterfront Park, an expanse of picnic areas, walking paths and sprawling green spaces. In spring and summer, the park hosts Thunder Over Louisville and the Fifth Third Waterfront Independence Festival. RiverPark Place, Louisville’s newest waterside development, aims to be a mixed-use development with restaurants, shopping and the largest marina on the Ohio River.

Florence, Kentucky named a 2014 Google eCity

Middlesboro wins grant to help revitalize downtown

Google recently named Florence as the 2014 eCity for the state of Kentucky, an award that recognizes the strongest online business communities across all 50 states. 2014 was the second year Google has presented this award and in order to be considered for the award, a city has to have a strong business sector that has a strong focus on Internet sales. Google says the businesses in these eCity communities are embracing the web to find new customers, connect with existing clients and fuel their economies.

Levitt Pavilions named Middlesboro as one of 10 small to mid-sized cities across America to win a Levitt AMP Grant Award of $25K in matching funds to present a free concert series at a pop-up park on Cumberland Avenue, currently a vacant gravel lot. The goal of the grant is to amplify community pride and the city’s unique character, enrich lives through the power of free, live music and illustrate the importance of vibrant public places. Discover Downtown Middlesboro’s objective with the grant is to bring residents together and to augment the city’s community-driven revitalization efforts.

Lexington and Louisville named top affordable big cities in the US Lexington is named one of the top ten affordable big cities in the United States. According to a recent report by Kiplinger, big cities are identified with populations above 250,000 with the lowest cost of living. Lexington is named number seven in this list with the median home value of $163,000 and a cost of living 10.3% below US average.

The median household income is $48,779. Louisville was named number 10 on the list with a median home value of $139,400 and a cost of living 8.6% below US average. The median household income is $44,111.

Kentucky suburbs named best in America Business Insider recently named the 50 best suburbs in America as ranked by an almost exhaustive list of criteria and measures. They looked at cities and towns with populations between 5,000 and 100,000 which were within 24.9 miles of the nearest metropolitan area. Then factored in average commute times, median household income, poverty rates and a measure of housing affordability (percentage of homeowners who pay less than 30% of monthly income on housing). Lastly, the rankings took into consideration FBI crime rate data for both violent and property crimes in 2013 as well as public school ratings for high schools from GreatSchools.org. To create the final ranking, they took the percentile rank from 0 to 1 for each measure (from 0, being the worst, to 1, being the best) and took an unweighted simple average of these measures, with each criterion weighted the same. The results showed the northern Kentucky communities of Villa Hills (#7), Fort Thomas (#29) and Edgewood (#34) in the top 50.

Lexington named to Money magazine’s list of small cities for retirement As an affordable small city (population of 150,000 to 500,000), Lexington was named to the Money magazine list of 5 great small cities for retirement. The article says that Lexington stands out because “retirees looking to mix city activities with country charm will find a lot to love here. Lexington’s historic downtown is packed with galleries, restaurants, and boutiques. But drive just a few minutes and you’re in the rolling hills of Bluegrass Country. The city is also home to one of the country’s oldest and most robust lifelong-learning programs, as well as the top-scoring Univer¬sity of Kentucky Albert B. Chandler Hospital, which has received accolades from the American Heart Association and National Cancer Institute.”

Berea is one cool town Levitt Pavilions named Middlesboro as one of 10 small to mid-sized cities across America to win a Levitt AMP Grant Award of $25K in matching funds to present a free concert series at a pop-up park on Cumberland Avenue, currently a vacant gravel lot. The goal of the grant is to amplify community pride and the city’s unique character, enrich lives through the power of free, live music and illustrate the importance of vibrant public places. Discover Downtown Middlesboro’s objective with the grant is to bring residents together and to augment the city’s community-driven revitalization efforts.

Bowling Green named in top 25 best places to retire Forbes’ list of 25 top U.S. cities for retirement in 2014 included Bowling Green at number eight. Data used included housing and living costs, taxes, weather and air quality, crime rates, doctor availability, and active-lifestyle rankings for walkability, bicycling and volunteering. They also looked at economic data with an eye toward a “working” retirement.

Trivia: All Chevolet Corvettes are built here.

Pro: College town (Western Kentucky University), decent economy, cost of living 6% below national average, average home price $138,000, warm climate, low crime rate. Con: Low walkability rank.

Harrodsburg honored for its downtown Small town Americana is alive and well across the entire United States.

With thousands of sleepy towns and beautiful villages, a new idea of an American downtown has emerged. Gone are the days of a downtown area with a post office, market and police department. What has taken the place of this outdated notion are unique and eclectic downtown areas full of energy, entertainment and accessibility for Americans of all ages. That’s why Best Choice Reviews, an online consumer review site, listed Harrodsburg (#41) on their list of the 50 Best Small Town Downtowns in America.

SPRING 2015 KENTUCKY REALTOR® 23

By the Numbers

32 percent

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

$200,000 vs. $5,000

In the past 15 years, the net worth of the typical home owner has ranged between 31 and 46 times that of the net worth of the typical renter, according to the Federal Reserve’s Survey of Consumer Finances, which is based on 2013 data. On average, home owners had nearly $200,000 in net worth compared to the average $5,000 net worth of renters, according to the survey.

4,000

Kentucky is home to more than this many manufacturers, representing 220,000 jobs. In 2013 alone, more than 200 manufacturers announced new locations or expansions in the state. These projects are expected to create nearly 7,500 jobs and $2.2 billion in new investment for Kentucky.

86%

The percent of respondents, according to a Zendesk.com survey, who have read negative online reviews claim their purchase decision was influenced by those reviews.

93.4%

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).

4.7 Hours

The average amount of time Americans are now spending on their smartphones every day – more than their counterparts in at least 11 countries around the world – according to a report from Informate Mobile Intelligence. The report also reveals the U.S. as having the

3 out of 4 This many Internet users (76%) in the U.S. admitted in a poll conducted by Inlet that they repeatedly have to reset their passwords because they forget them.

1/3

90% 34 & The percent of mortgaged properties (or about 273,000 homes) that returned to positive equity in the third quarter of 2014, bringing the total to 44.6 million of all properties with a mortgage, according to a report from CoreLogic. If home prices rose by 5 percent more - which is largely predicted to happen this year - an additional 1 million home owners now in negative equity would also move into positive territory.

64

%

The homeownership rate fell to 64% in the 4th quarter of 2014, the owest level since 1994. The homeownership rate is now back to its historical average after reaching a high of over 69% in 2005.

47 years

Number of years since the Fair Housing Act was signed into law.

While the Civil Rights Act of 1866 was the first U.S. law to affirm that all citizens were equally protected, it wasn’t until April 1968 that federal law declared fair housing for everyone.

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A recent study by Bank of America Merrill Lynch found that nearly one-third of Baby Boomers and seniors are choosing to buy larger homes in retirement instead of downsizing so they can have a home large enough for family members to visit.

younger

According to the 2015 National Association of Realtors® Home Buyer and Seller Generational Trends study, which evaluates the generational differences of recent home buyers and sellers, found that, for the second consecutive year, the largest group of recent buyers was the millennial generation, those 34 and younger, who composed 32 percent of all buyers (31 percent in 2013). Generation X, ages 35-49, was closely behind with a 27 percent share.

Millennial buyers represented more than double the amount of younger boomer (ages 50-59) and older boomer (60-68) buyers (at 31 percent). The Silent Generation (ages 69-89) made up 10 percent of buyers in the past year.

2.7%

According to a study by the Federal Reserve Bank of Cleveland, the value of property is lowered by up to this percent for each vacant property within 500 feet.

Housing Stats

Homes are being sold, prices are up, inventory may be a concern

A

t the close of 2014, Kentucky had seen more homes sold (45,570) than in any year since 2006 (48,469), making it the second highest year ever on record. It also marked the highest median price reported in the state for a given year ($110,130). Even with record high prices, Kentucky homes are sitting at 52 percent of the national median of $208,500, showing the affordability of owning a home in the state.

Total homes sold in 2014 increased by 5 percent over 2013 (45,570 versus 43,359) while the median price jumped 1.5 percent, going from $108,509 in 2013 to $110,130 in 2014.

“The year ended strong despite several unrelated obstacles like extreme weather during the colder months and a shortage of inventory reported across Board/Association Region One the state,” stated Norman Jones, president of the Kentucky Association Henderson-­‐Audubon Board of REALTORS® (KAR). “With the Hopkinsville-­‐Christian Board economy improving over the course of Kentucky-­‐Barkley Lakes Board the year, buyers felt confident enough, Madisonville-­‐Hopkins Board however, to take a step toward home ownership.”

Mayfield-­‐Graves Board In the fourth quarter of 2014, homes sold were 10,577 compared to 9,983 in 2013 for an increase of 6 percent.

Median prices also rose slightly at 2.3 percent in the fourth quarter to $114,600 in 2014 from $112,000 in 2013. This helped complete a strong second half of the year, July through December, where total homes sold were 23,913 versus 23,009 for the same period in 2013, an increase of almost 4 percent. Median prices for this period also rose 2.8 percent from $111,750 in 2013 to $114,975 in 2014.

The bitter cold and heavy snow falls across the state dampened home sales to start 2015. January saw home sales drop 4.5 percent year over year, from 2,680 in 2014 to 2,559 in 2015.

Median home prices, however, saw a sharp increase to $108,500, a 7.3 percent increase over the January 2013 median price of $101,144.

“Hopefully the dip in home sales for January was a product of the weather and 2015 shapes up to be another great year for real estate,” continued Jones. “The rising prices could be a result of the lower inventory available

Murray Calloway County Board Greater Owensboro Board Paducah Board Pennyrile Board Region Two Central Kentucky Association Heart of Kentucky Association Old Kentucky Home Board REALTOR® Association of SKY Shelbyville Board South Central Kentucky Association Region Three Greater Louisville Association Region Four Lexington Bluegrass Association Region Five Northern Kentucky Association Region Six Ashland Area Board Eastern Kentucky Association Madison County Board Somerset-­‐Lake Cumberland Board Grand Total

coupled with sub-4 percent interest rates. The next several months will be interesting to see how the market plays out here in Kentucky.”

Nationally, Lawrence Yun, NAR’s chief economist, says low housing supply and the ongoing rise in home prices above the pace of inflation appeared to slow sales in January despite interest rates remaining near historic lows. Yun then stated that all indications are pointing to a rate increase from the Federal Reserve this year – perhaps as early as this summer – and affordability concerns could heighten as home prices and rents both continue to exceed wages.

# Sold 2014 # Sold 2013 Sold % Median Price 2014

Median Price 2013

Median Price %

376 405 255 401 366 342 1265 721 268

362 397 316 395 330 331 1302 646 254

3.9% 2.0% -­‐19.3% 1.5% 10.9% 3.3% -­‐2.8% 11.6% 5.5%

112000 105000 105200 102750 71750 121375 117875 128406 107500

104000 104675 94625 88975 77475 122850 106350 128975 104825

7.7% 0.3% 11.2% 15.5% -­‐7.4% -­‐1.2% 10.8% -­‐0.4% 2.6%

803 1894 546 2172 576 288

725 1829 556 1693 603 279

10.8% 3.6% -­‐1.8% 28.3% -­‐4.5% 3.2%

88350 125950 114200 131500 158213 102500

94446 125250 117250 134875 140500 102000

-­‐6.5% 0.6% -­‐2.6% -­‐2.5% 12.6% 0.5%

14790

14808 -­‐0.1%

139450

142350

-­‐2.0%

10783

9605 12.3%

139225

142125

-­‐2.0%

5810

5644 2.9%

132880

132450

0.3%

807 495 1304 903 45570

752 406 1228 898 43359

100375 91250 124000 98100 110130

99850 101553 124225 85273 108509

0.5% -­‐10.1% -­‐0.2% 15.0% 1.5%

7.3% 21.9% 6.2% 0.6% 5.1%

Figures for 2014/2013 have been adjusted due to several board/association mergers taking place in 2014.

SPRING 2015 KENTUCKY REALTOR® 25

Community Profile

Kentucky is a hot (pocket) bed for manufacturing

K

entucky is home to more than 4,000 manufacturers, representing 220,000 jobs. In 2013, more than 200 manufacturers announced new locations or expansions in the state. These projects are expected to create nearly 7,500 new jobs and $2.2 billion in additional investment.

While Kentucky is widely known for automobiles, bourbon and award-winning thoroughbreds, the Commonwealth is a melting pot for manufacturing.

According to the Kentucky Cabinet for Economic Development, in 2013 the state exported a record $25.3 billion in goods and services to more than 200 countries. In 2014, the state set a new record for the fourth straight year, exporting $27.5 billion.

The Kentucky Cabinet for Economic Development released a list of some of the lesser-known products manufactured in the Commonwealth. Coupled with additional products and companies, the following is a short list of products many might be surprised to learn are made in Kentucky, as complied by KCED:

• •

• Disco Balls: 90 percent of all disco balls made in the U.S. are manufactured by Omega National Products in Louisville.

• Fast food bags: Ever order your food to-go? DURO Bag Manufacturing Company, which has four facilities in Northern Kentucky, manufactures paper bags for the food service and grocery industries, including McDonald’s, Wendy’s, Burger King, Sam’s Club, Wal-Mart and Kroger.

•

• Dixie Cups: Dixie cups and plates are made by the GeorgiaPacific company, which has its facilities in Bowling Green (Dixie Consumer Products) and Lexington (Lexington Dixie Plant)

•

• Fighting rings: Monster Rings and Cages in Lawrenceburg designs and ships boxing rings, wrestling cages and other fighting equipment worldwide. Many famous rings, such as the one in Madison Square Garden, were made in Kentucky.

•

• Hot Pockets: The popular snack food is made by Nestle Prepared Foods in Mt. Sterling.

• Airheads/Mentos: The popular soft candy and breath mints are produced by Perfetti Van Melle in Erlanger.

•

• Beehive equipment: There’s lots of buzz surrounding Kelley Beekeeping in Clarkson. Started back in 1934, Kelley Beekeeping is one of the four largest honey hive manufacturers.

The company builds 75 percent of the items used in the honey and bee market.

•

• • • •

• Bowling Balls: Ebonite bowling balls and equipment are manufactured in Hopkinsville.

• Breweries and Wineries: Though the state’s bourbon industry may receive most of the hype, Kentucky has certainly played an important hand in the history of wine in the U.S. Did you know that Kentucky was home to the first commercial vineyard in the country? Or, that Kentucky wineries once produced more than 50 percent of the United States’ grape harvest and wine yield? You can also find more than a dozen Kentucky breweries throughout the state. Many breweries also double as restaurants and often offer live music and special events to go along with their unique in-house brewery atmospheres.

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• Fitness Equipment: Life Fitness is manufacturer of fitness equipment, i.e., treadmills, ellipticals, strength equipment. The products manufactured in Falmouth is a brand called Hammer Strength which supplies professional sports teams (among other customers) with strength training equipment.

• Houseboats: Designated as the “Houseboat Capital of the World,” Kentucky is the birthplace of the first houseboat in 1953. Today, the boating industry contributes more than $826 million a year to Kentucky’s economy.

•

• iPhone glass: The Corning Incorporated plant in Harrodsburg makes glass used in iPhones.

• • • • •

• JIF: It takes 188 billion peanuts to produce the amount of peanut butter made at the JIF (J M Smucker) plant in Lexington.

• L’Oreal: The beauty product manufacturer makes Garnier Fructis, as well as other shampoos and conditioners, in Florence.

• Playing cards: The United States Playing Card Company, in Erlanger, produces and distributes the nation’s favorite brands of playing cards, including Bee, Bicycle, Aviator and Hoyle.

• Pop-tarts: The breakfast favorite is made at the Kellogg’s facility in Pikeville.

• Post-it Notes: Invented in 1968, America’s familiar yellow “sticky note” is manufactured by the 3M Company in Cynthiana.

•

• Reynolds Wrap: All Reynolds Wrap aluminum foil is produced in Louisville, which is where it was founded in 1919.

• •

• • •

• Tempur-Pedic: The world-famous mattress and pillow manufacturer has its international headquarters in Lexington.

• Tiffany engagement rings: Tiffany & Co., in Lexington, produces the classic six-prong engagement ring and other pieces of fine jewelry.

• Truffles for the stars: Every guest attending the 86th Academy Awards received a box of truffles handmade by Art Eatables, a Kentucky Proud business

SPRING 2015 KENTUCKY REALTOR® 27

CEO Message

2014: A Year in Review

By Joe McClary, CEO, Kentucky Association of REALTORS®

A

responsible part of planning ahead involves taking a moment to look behind. In our first 2015 edition of the Kentucky REALTOR® Magazine, I would like to take the opportunity to reflect on 10 great accomplishments for the association in 2014:

10. Hired a director of technology who is responsible for building

Internet based information systems that can strengthen each of the three major areas of KAR’s strategic plan: 1) governmental affairs 2) professional standards and 3) education. The services we are creating through the director of technology also offer a strong foundation for developing future programs to create non-dues revenue for the association.

9.

8.

7.

Hired an advocacy coordinator who works under the Director of Governmental Affairs and is involved in the planning and implementation of the “REALTOR® Party” initiative. This involves work to enhance the state and local association’s use of the REALTOR® Party programs and engagement on local issues.

Strengthened KAR’s non-profit education arm, the Kentucky Real Estate Education Foundation (KREEF). In 2014, KREEF Trustees developed the organization’s first strategic plan. The strategic plan focuses on strengthening the organization in order to fully realize it mission which is to “enhance real estate professionalism and knowledge by providing quality educational services and programs for the real estate industry and the public.”

Most members do not realize that KREEF helps keep KAR dues low by funding a number of educational events for the association throughout the year. Any monies made by KREEF in the process of offering education is reinvested into educational events and other community benefits such as real estate education scholarships.

Initiated plans for KAR’s new legal hotline. The legal hotline was inaugurated in early 2015 and provides free access to a highly qualified attorney who specializes in real estate litigation. With the average cost of legal counsel exceeding $200 per hour, designated broker members who use the legal hotline receive benefits in excess of their $125 annual KAR dues. For more information about the legal hotline, visit kar.com/hotline.

6. Strengthened KAR’s professional standards program by

inaugurating a new fast track process for members that have grievances regarding the Code of Ethics or other disputes. Now, members can have their grievances addressed in half the time of the traditional process.

5.

Began restoring strategic reserves as set forth in the association’s governing documents. Strategic reserves are an important part of any association’s financial portfolio. On occasion, the association has to mobilize on an important issue.

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It is critical the association have the financial flexibility to invest in those non-budgeted issues without the threat of experiencing distress as a result. In 2014, KAR streamlined operations and achieved a budgetary surplus that was allocated toward restoring important strategic reserves.

4.

KAR’s HB 149 passed the Kentucky House of Representatives 91 to 0, unanimously passed out of a Senate 37 to 0 and was signed by the Governor. This means Kentucky leads the way nationally with some of the strongest pre/post license requirements for the industry. The work now begins to lay out the KREC regulations to be ready for the January 1, 2016 implementation date.

3.

Maintained close ties to the Real Estate Commission. After working more than a decade with real estate regulators, I can tell you Kentucky enjoys a great group of appointed officials to oversee our regulatory agency. While lobbying for higher educational standards, it was paramount that KAR act cooperatively with our regulators. From my view, we have no greater partner and advocate for high industry standards than our real estate commission. In addition, we are grateful to the Kentucky Real Estate Commission for providing KAR with $15,500.00 in educational sponsorships in 2014.

2.

KAR facilitated strategic planning sessions for numerous local boards and is bringing more than $60,000 in NAR grant money back to Kentucky’s local and state associations. Part of the new mandatory NAR core standards for local boards requires an organizational strategic plan. I was proud to certify through NAR to facilitate strategic plans and worked with a large number of local boards throughout the state. I’m also happy to report all of the plans we submitted to NAR have been approved. The strategic planning initiative has provided unprecedented focus on a set of core standards that will strengthen the REALTOR® brand for years to come. In addition, KAR successfully applied for, and received, a grant for core standards implementation. Most of our grant request was based on new technology services to be developed by our new director of technology.

1.

Kept dues and other expenses low. Even after a recent dues adjustment made by the KAR Board of Directors and Delegate Body, KAR members enjoy dues that are 30% less than any similarly sized REALTOR® association. We are proud that KAR can provide strong value to its 9,200 members while extending benefits and keeping costs low.

That was 2014! 2015 is off to a tremendous start and we look forward to sharing with you more as the year progresses about the relevance and value of the Kentucky Association of REALTORS®.

Up to Code

Policy changes impact Professional Standards and the Code of Ethics

T

he Professional Standards Committee of the National Association of REALTORS® (NAR) and the Kentucky Association of REALTORS® (KAR) have had a lot on their plates in recent months. Both committees advise their Board of Directors and make recommendations on matters relating to the Code of Ethics. It is hardly news that the real estate industry is changing at a fast pace, and to keep up with those changes, the NAR professional standards committee reviews the Code of Ethics and interpretations of the Code continually so the Code remains relevant to REALTORS® and to the public which REALTORS® serve.

Since the Code has been revised substantially in recent years, the NAR Board of Directors has taken steps to ensure that REALTORS® have a timely understanding of the Code. In fact, the Board recently amended the four year Code of Ethics training timetable to a two year time frame.

The change goes into effect following conclusion of the current four year cycle ending on December 31, 2016. Beginning January 1, 2017, all REALTORS® will be required to complete Code of Ethics training every two years.

services) in order to offer Ombudsman Services to members, clients and consumers as required by NAR. The deadline for providing these services is January 1, 2016.

KAR’s Professional Standards Committee will also consider adopting an optional citation policy, a citation schedule of potential violations, and specific fines that apply to ethics violations. The committee will review the Model Citation (www.realtor.org/policy/nar-model-citation-policyand-schedule-of-fines) and make a recommendation to the KAR Board of Directors. If approved, this policy would go into effect on January 1, 2016 as well.

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.

The policies and procedures for administration of the Professional Standards Process have undergone some changes as well. Chances are, these changes won’t impact you unless you are a Grievance Committee, Hearing Panel, Appeal Panel member or party to an ethics complaint or a request for arbitration, but these changes do show NAR’s continual effort to improve and expedite the complaint process. For example, when possible, panels are strongly encouraged to use conference calls or alternative communication technologies for meetings other than hearings and appeals to expedite the decision-making process. Previous policy also called for correspondence to be sent via Certified Mail if an email wasn’t acknowledged by the recipient within 24 hours. Policy now allows that correspondence to be sent first class mail.

KAR has adopted several of NAR’s new optional policies, including the “fast track” process for receipt, consideration and resolution of ethics complaints (www.realtor.org/policy/fast-track-supplement-to-ceam).

KAR has also adopted the Expedited Ethics Administrative Procedures developed by NAR. The expedited procedures provide an opportunity for a respondent who has not had any Code of Ethics violations in the past three years to waive the right to a hearing by acknowledging the conduct alleged in the complaint and to agree to accept discipline.

Alternatively, if they desire, the respondent has the right to an ethics hearing in accordance with the Code of Ethics and Arbitration Manual.

In June, KAR’s Professional Standards Committee will be working diligently, reviewing NAR’s ombudsman resources (www.realtor.org/ ae/manage-your-association/local-and-state-association-ombudsman-

Lexington broker Anthony DeMovellan and Chip Diehl, 2015 Chair of LBAR’s Professional Standards Committee, work on a Grievance Committee exercise during the 2015 Professional Standards Training held in Lexington. KAR Legal Counsel Jason Vaughn taught three classes around the state in order to prepare over 200 Professional Standards Committee members for their work on the Grievance Committee, Appeals Panel and to serve as ethics and arbitration hearing panel members.

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A Day in the Life of...

A Day in the Life of… a REALTOR® Who Gives Back Liz Davenport — Lexington, KY How many years have you been in real estate?

LD: Almost 2 years. I went into real estate after a career in nursing

and being at home with my youngest daughter. I wanted a profession that allowed me to set my hours and have flexibility while still providing for my two daughters. I love my job. Everyday is new and no two transactions are the same. It is exciting and keeps me on my toes.

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

LD: I have always enjoyed doing things for others…being active in

my community and through religious organizations. But the great thing about real estate is the connections you make and the friendships formed.

I was able to network very easily and find there was support in our community for a program like A Running Start.

You recently won the Most Encouraging Kentuckian award for 2014 through LeXenomics. How did it feel to be recognized by your colleagues for your efforts?

LD: I was humbled. The people that were also nominated are stars in

our community. They are fueling new ideas and ways to give back into the place they love…reaching out to those in need and building our local energy. I was deeply honored. I didn’t even know the person who nominated me. I was just grateful to bring awareness to both my own non-profit and to LeXenomics.

You won for your nonprofit project, A Running Start. How did that project come about?

LD: My dear friend, Rachel Crabtree, and myself started this based on a

national program called Back On My Feet. We are both runners and see the benefits of running in our lives, mentally and physically. We love to share that love with others. She has volunteered with those that suffer through homelessness for a long time and I have a heart for those working through addictions. We started running with a group of men in a local rehabilitation program and trained two for a half marathon and two others ran a 7-mile race. The pride and self esteem that we saw build in these guys, who had not had much positive in their lives, was amazing. And we wanted to do more. We began running with several different facilities - a women-only recovery program and County Drug Court. The mind and body connection is instrumental in recovery. And the pride and accomplishment builds up a person who has stumbled in life. Running changes people.

What have been some of the major accomplishments realized through A Running Start?

LD: I would say seeing our participants cross finish lines of any kind.

Whether that is a 5K, a half marathon or they are holding a solid job and get their own apartment and are living life differently. I think that is all we can hope for…we don’t necessarily want to make “runners” out of everyone,

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we want to offer them new chances, new goals and a new community to live around. We want to see many smiling faces from achievements in life.

Are there any big developments for this project in the near future?

LD: We are trying to transition and be available to groups such as AA

and NA. To connect with people that are back in their lives and needing to have a new set of friends and a new healthy habit.

Is it difficult to find enough time, between work and other responsibilities, to volunteer?

LD: (Ha! Yes, I also work full time for a domestic violence program

called GreenHouse17, we service 17 counties with care and I am the development specialist that reaches out for community connections. I have two daughters. I volunteer in my church. I play guitar (horribly).

And I like to run half-marathons for myself. We are all busy, but especially as REALTORS®, we are responsible for knowing what is going on locally so we are well informed. And sometimes you hear of a need that you can reach out and do. Doesn’t have to be starting a charity.

It can be volunteering one day a month in your local soup kitchen or making a meal for a neighbor. We are in a unique career where we hear of needs all the time. I like to think that REALTORS® have some of the biggest hearts and I love seeing us be involved.

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

LD: You mean beyond my girls? I’m a HUGE UK basketball fan. I am

a runner and enjoy all the beauty I get to experience being outside in our lovely Bluegrass. And I am a big nerd. I love to read and watch 80’s movies.

What is the best advice you have ever received?

“Just keep putting one foot in front of the other. The mile will be a mile. If you continue to move forward, you will reach the finish line.” My co-founder, Rachel, said that. She is a smart cookie. And runs faster than me.

Members who have dedicated themselves to volunteer service in their communities are encouraged to apply for the KAR Good Neighbor Award.

The deadline for submissions is June 1, 2015. The winner will receive $500 to their designated charity and a plaque of recognition. If you or someone you know would like to learn more about this award or apply, visit kar.com > Members > Awards.

Reader Photos from Around Kentucky Submitted by KAR Members

The Purple People Bridge over the Ohio River in Campbell County, located in northern Kentucky. After a $4 million restoration, the former L&N Railroad Bridge between Newport and Cincinnati, is now open as a pedestrian walkway. Officially named the Newport Southbank Bridge, the bridge is the longest connector of its kind in the country that links two states. Photo courtesy of Abbe Kasirosafar, Crestview Hills, Coldwell Banker West Shell.

Nazareth is an unincorporated community and a historic site in Nelson County, located about three miles north of Bardstown. Nazareth used to be a girls prep school, a convent, and now an assisted/retirement living community. In 1822, Nazareth became the new home of the Sisters of Charity of Nazareth, founded in 1812, whose motherhouse is still there. It was the location of their school, Nazareth Academy, later known as Nazareth College, which the Sisters operated there until 1971.

It is now used as a retirement community and a retreat center. It is about 300 acres of pure serenity. It has many walking paths, a couple of lakes, ponds, bridges and grottos. It’s open to the public and many of the nuns still live there. Photo courtesy of Peggy Smith, Bardstown, Old Kentucky Home Association.

Newport on the Levee is a multi-level urban retail entertainment center located on the south bank of the Ohio River in Newport, Kentucky directly across from Downtown Cincinnati. It is home to the Newport Aquarium and a 300 foot mural leading up to the Aquarium entrance.

The aquatic-marine-life-themed mural, produced to celebrate the aquarium’s 15-year anniversary and dubbed the SharkWall, was created

by ArtWorks as part of the Cincinnati-based nonprofit’s 2014 Public Art campaign. Photo courtesy of Larry Howard, Newport, Act REALTORS®

Thousands of American white pelicans visit the shallow waters along shores, sandbars and islands in Lake Barkley. This spectacle occurs twice every year, during migration in the spring and fall, when the birds travel from western Canada, northern Great Plains and the mountain regions in summer to the Gulf Coast states in winter. Photo courtesy of Tammy Warner, Cadiz, Lakeland Realty (by Sam and Beverly Conver).

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