KYREALTORSummer08

Kentucky ®

SUMMER 2008

A publication of the Kentucky Association of REALTORS®

GREEN

This Season’s Fashionable Color

Vacation Homes Independent Contractor Agreement Get Involved in YOUR Association

Contents

Volume 1, Number 4, Summer 2008

IN THIS ISSUE A publication of the Kentucky Association of REALTORS®

President Robert A. Damron Eastern Kentucky Association of REALTORS® President-Elect Jeffrey L. Smith Northern Kentucky Association of REALTORS®

Going Green

10

EcoBroker Designation

19

Vacation Homes

20

Green Terminology

27

Treasurer John W. Smither, GRI Lexington-Bluegrass Association of REALTORS® Treasurer-Elect Santosh S. Bhatt, ABR, CRS Greater Louisville Association of REALTORS®

REGULAR FEATURES

Executive Vice President Susan W. Helm, RCE susiehelm@kar.com

President’s Message

5

Communications/Marketing Director Hunt Cooper hcooper@kar.com

Tools You Can Use

6

Legal Update

8

Address letters and inquiries to: Kentucky REALTOR® 161 Prosperous Place Lexington, KY 40509 TF 800.264.2185 T 859.263.7377 F 859.263.7565 www.kar.com email: hcooper@kar.com KAR members should always send address changes to their local board/association first.

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

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

Application to mail at periodicals postage rates is pending at Lexington, Kentucky. POSTMASTER: Send address changes to Kentucky REALTOR®, 161 Prosperous Place, Lexington, KY 40509.

Legislative Update

14

Housing Stats

17

KREC Information

18

Local Association News

22

A Day In The Life Of...

28

From the Helm

30

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 © 2008 Kentucky Association of REALTORS®, Inc. All rights reserved.

SUMMER 2008 KENTUCKY REALTOR® 3

KAR News KAR Elections The Kentucky Association of REALTORS® announces the following openings for 2009 Leadership Positions.

Nominations are now being accepted for: President-Elect (1 position for 1 year term) Treasurer-Elect (1 position for 1 year term) At-Large Director (3 positions for 3 year term) Region Director (3 positions for 2 year term)Regions 2, 4 & 6 At-Large Delegates (3 positions for 3 year term) NAR Director (for 3 year term) Candidate nomination forms are due to KAR by August 15, 2008. The nomination form, as well as election information, can be found on the KAR website by clicking “About KAR” and “Leadership.”

Nominations can be sent to: Kentucky Association of REALTORS® Attn: KAR Nominations 869 East High Street, Lexington, Kentucky 40502

Join KAR on Facebook now and be one of the first members to the newest online KAR group! If you are not currently on Facebook, getting started is easy. Just log on to www.facebook.com and set up a profile. It’s free and once you become a Facebook member, you can request to be added to the KAR group. Under the KAR logo on the right, click the link that says “Request to Join Group.” That’s all there is to it. To locate the KAR group, use the search feature or go directly to the group by typing www.facebook.com/group.php?gid=9244727021.

Kentucky REALTORS® Push for Changes in DC Over 40 Kentucky REALTORS® met with the entire Kentucky delegation to Congress, including visits with Senator McConnell in his private leadership office and Senator Bunning in his office. Representative Chandler and other KY Representatives spent over 30 minutes discussing the issues at the KAR lunch reception in the Capitol. KAR members advocated important federal issues such as housing stimulus legislation, improving access to affordable insurance, and health care coverage for small businesses.

Elections will take place in September during the KAR Convention & Expo in Covington, Kentucky.

KAR Awards Each year, KAR presents awards to recognize members and associations through their unique contributions to the profession and dedication to the industry. To access the nomination forms and find out more about the awards, visit http://www.kar.com/aboutkar.asp?p=recognition.

Sen. McConnell welcomed KAR members into his private office reserved for the Senate Minority Leader.

REALTOR® of the Year Award Deadline: Friday, August 15 REALTOR® Community Service Award Deadline: Friday, August 15 Nat Sanders Education Award Deadline: Friday, August 15

2008 KAR Broker Summit a Success The 2008 KAR Broker Summit kicked off with a standing ovation for Trends Report publisher, Stefan Swanepoel.

Brokers and managers from across the commonwealth gathered in Louisville to network and enhance their management skills. Many left with knowledge of the latest trends and issues affecting the real estate business.

Sen. Bunning met with KAR members in his office, decorated with various baseball memorabilia from his career.

We hope you can join us for the 2009 Broker Summit!

More information will be provided in the next issue of the Kentucky REALTOR®. Check www.kar.com for new details.

4 www.kar.com

Members of LBAR discussed important issues with Rep. Chandler during KAR's reception and hill luncheon.

President’s Message It’s Back to Basics and a List to Show You How With the housing market over the last few months being somewhat slower for many and others struggling to figure out how to make it in this industry, many REALTORS® are going to great lengths to find and retain clients. You may be contemplating a change to your business plan, re-evaluating your marketing strategies or even rethinking the way you approach a listing presentation.

One thing is certain – whatever you do, behave ethically, keep to the basics and maintain the highest level of service possible to those you serve. I recently came across a list that relates these steps in a humorous light and want to share them with you.

Some of these may even help you shine in this lessthan-perfect environment.

How NOT To Serve Your Clients A Not-So-Good List of REALTOR® to Client Courtesies 1. Show it anytime – they know their house is listed! Have a confirmed appointment before showing any property. Record the date, time and the name of the person who gave confirmation. Record this information in your showing log.

2. Always arrive early – you will impress the seller! Arrive on time for showings. Don't be early. Occupied homes may have owners preparing to leave. On vacant houses, other appointments may be scheduled.

3. Don’t call – we all know that real estate people run late! If you are going to be more than 5 minutes late for a showing, please call the listing salesperson and/or office to notify the seller of your tardiness.

4. Make yourself at home and use the telephone – Do not use the telephone in someone's home or business without prior permission! You never know when a telephone may be programmed.

Use your cell phone or a pay phone.

Robert Damron, 2008 KAR President

5. Tell them all the bad news about their listings – Please have the courtesy to let another agent know the good news about a showing as well as the things that need attention. No listing can be all bad!

6. Leave the lights on and leave the doors unlocked – No. Not really! Follow the instructions of the listing office.

7. The nearest bathroom is at my office, no one will know – Never use a bathroom at a listing unless it is marked “public.” Make sure your clients know not to use the bathroom either.

8. Low ball every offer – Feel the seller out!

Courtesy is that you should be a professional who knows the market value of property. Make offers that reflect value and not “low” balls.

9. List them as high as we can and hope they will still sell – Again, courtesy is that you should be a professional who knows the market value of property. List property that reflects market value and no “high” ball price.

10. Let everyone in your company know of your new listings first. Great rewards for ‘in-house’ deals – Remember that you should treat all agents the same. Follow MLS rules and the REALTORS® Code of Ethics. If you are working for your seller, you will want to give the utmost exposure.

Robert Damron 2008 KAR President

SUMMER 2008 KENTUCKY REALTOR® 5

Tools You Can Use

Marketing Minute

Chat Widget for Your Website www.plugoo.com Can potential clients reach you 24/7 through your existing website? If not, they can now with a web-based instant messaging tool called Plugoo. Plugoo can be placed (for free) on your website, blog or social network profile to enable simple, real time chat with potential clients and web visitors interested in buying, selling or finding out more about the services you provide. Setup is easy and only requires you to subscribe to an Instant Messenger client (your visitors do not need this to communicate). Plugoo is also customizable, allowing you to change the size, colors and welcome message to fit with your website design.

When you're logged into your Instant Messenger (Windows Live Messenger, Yahoo! Messenger, AIM, GoogleTalk, Jabber or ICQ), you can instantly receive all the comments of your visitors or any question they might ask, and answer immediately. Plugoo allows you to chat with up to five people at a time and conversation between you and a visitor is strictly private meaning other simultaneous visitors on the website don’t see the conversation. If you are offline, visitors can still send messages which will then be e-mailed to you or received when you sign in to your Instant Messenger account.

Another great feature is myPlugoo, a simple link (http://www.myPlugoo.com/yourname) to let your friends to IM you from any website, email or blog. For instance, you can add this link to your email signatures.

This way, your email recipients have the opportunity to open up a Plugoo with just one click and start a live conversation with you!

6 www.kar.com

tinySpell http://tinyspell.m6.net/ Occasionally you need to check your spelling in an application that does not include a spell checker and you don't want to launch your word processor just for that. This is when tinySpell becomes handy. It is a small utility that allows you to easily and quickly check and correct the spelling in any Windows application. tinySpell will watch your typing on the fly and alert you whenever it detects a misspelled word. It can also check the spelling of text that you copy to the clipboard.

One nice feature of this application is that you can enable/disable the program with just one simple click if you don’t want it to run on a consistent basis. tinySpell installs itself in the system tray for easy access and includes several nice features such as a 110,000 word dictionary which words can be added to improve its functionality.

Top Online Video Sites The world of online video has become mainstream for many industries and real estate can be listed among them. With such a diverse group of sites available for posting video, it’s hard to know which ones are the best for getting the word out. According to Hitwise, the leader is YouTube, which accounted for over 73% of the market share in the online video site category in March 2008 and a 32% increase since March 2007.

Other top online video sites are MySpaceTV (9.2% market share), Google Video (4.06%) and Yahoo!

Video (2.16%). Overall, the online video category accounted for just over 1% of all U.S. internet visits in March 2008, a decline of 7 percent compared to March 2007.

Get the 411 With 46645 A service from Google that uses SMS (short message service), also called text messaging, to send requests and receive precise answers to a variety of topics. To utilize Google SMS, you must first have text messaging services enabled on your phone (charges will only apply if you currently pay per text). Send a text to 46645 (spells GOOGL) with your question and in seconds your will receive a text message with results back to your phone. This free service is a handy way to get a listing for a nearby restaurant or other business, find the definition of a word, or look up the price of a

product, an area code or Zip code. You can also find movie show times, weather, facts, definitions and more.

If you are out and about and need information quick, these 5 digits are great to have at your fingertips. To learn more about how to use this service, visit http://sms.google.com.

Bits and Bytes

Got Gas? http://autos.msn.com/everyday/gasstations.aspx Have you ever wished you could find out how much gas was before you left the office, home, etc. and turned into the filling station only to find out gas was cheaper down the street? Now you can with MSN Auto. The site is pretty nifty and here’s why. You enter your zip code at the site and it tells you which gas stations have the cheapest prices (and the highest) on gasoline in your zip code area. It's updated every evening from over 90,000 gas stations across the nation.

A recent search of the 40515 zip code in Lexington pulled up 30 stations in the area and ranked them in order from the least expensive to the most expensive and sorts them by address and charts all the locations on a map.

Do you Jott?

Top Ten Riskiest Housing Markets To find the country's riskiest real estate markets, Forbes.com looked at the country's 40 largest metro areas and combined data on foreclosures from RealtyTrac; job growth from the Bureau of Labor Statistics; transaction volume data from Radar Logic, a New York real estate research firm; and vacancy and current inventory rates from the U.S. Census Bureau and ZipRealty, an aggregator of multiple listing service data.

The riskiest markets were those that had the highest foreclosure rates, slow job growth (or job loss) and a rash of listed homes. The top ten riskiest markets identified in the survey were: 1.

2.

3.

4.

5.

Detroit Orlando Cleveland St. Louis Miami

6. Las Vegas 7. Sacramento 8. Denver 9. Tampa 10. Phoenix

www.jott.com Jott.com is one of the most convenient technology tools that you can use as a real estate agent. It only takes a few minutes to set up your account and the service is free. Once your account is set up, you can leave a message for yourself or broadcast a message to a friend or entire group in a single, easy step.

Inside your account, you will need to enter your important phone numbers, email addresses and other relevant information such as group names and individual contacts. To send a message, Jott will contact these people using voice recognition software. For example, if you wanted to let both the buyers and sellers of a property know that you have scheduled an inspection, you would call Jott. The system greets you and asks, "Who would you like to Jott?" You reply by giving both the buyer and seller names or you could also use a grouping that you set up for that particular transaction. Jott then takes your message and sends it to your recipients as an MP3 file that can be played on a phone or computer. It also sends an e-mail and a text version as well (if that information was loaded in your account). This is more efficient than texting and much safer, especially when driving in rush hour traffic.

There are hundreds of applications for Jott. Here are just a few that may take away daily stress: track your expenses, a quick reminder on just about anything, plan your daily errands and appointments and customize your client communications.

SUMMER 2008 KENTUCKY REALTORÂŽ 7

Legal Update

KAR’s Out-of-State Commercial Broker Bill Passes House Bill 638 outlines broker requirements

Doug Martin is Legal Counsel for the Kentucky Association of REALTORS® and is a member of Murphy & Martin, PLC in Lexington, KY.

On April 24, 2008, Kentucky’s Governor signed into law KAR’s own House Bill 638, which allows an out-of-state licensee to earn a commission in a Kentucky commercial real estate transaction without first having to obtain a Kentucky real estate license.

House Bill 638 was written in response to River Oaks Management, LLC v. Brown, a U.S. District Court case from Louisville, in which the Court held that the U.S. Constitution does not allow Kentucky or KREC to prohibit the payment of brokerage commissions to out-of-state licensees.

6. Must comply with the Act’s limitations on brokerage activities in Kentucky.

7. All actions must be performed under the direct supervision and control of the Kentucky cooperating broker.

HB 638 - Overview

1. Lawfully used primarily for sales, retail, wholesale, office, research, institutional, warehouse, manufacturing, or industrial purposes; 2. Lawfully used primarily for multifamily residential purposes involving five (5) or more dwelling units; or 3. Zoned for a business or commercial use by a planning unit acting pursuant to KRS Chapter 100.

House Bill 638 allows out-of-state licensees who comply with the requirements of the Act to broker commercial real estate in Kentucky on a limited basis without first obtaining a Kentucky real estate license.

The out-of-state licensee must meet certain requirements to take advantage of Kentucky’s license law exception: 1. Hold a valid real estate brokerage license in a state other than Kentucky.

2. Have no license revocations or felony convictions in the previous five (5) years.

3. Enter into a ‘cooperation agreement’ with a Kentucky cooperating broker.

4. File a sworn ‘notice of affiliation’ with a Kentucky cooperating broker.

5. The transaction must be limited to specific ‘commercial real estate’ identified in the cooperation agreement.

8 www.kar.com

HB 638 - ‘Commercial Real Estate’ House Bill 638 limits the real estate license exception to transactions involving commercial real estate. ‘Commercial real estate’ under HB 638 means any parcel of real estate located in this state that is:

Under the Act, ‘commercial real estate’ does not include single-family residential units such as condominiums, townhouses, manufactured homes, or homes or lots in a subdivision when sold, or residential units otherwise conveyed on a unit-by-unit basis, even if those units are a part of a larger building or parcel of real estate containing more than four (4) residential units.

Under the Act, ‘commercial real estate’ does not include single-family residential units such as condominiums, townhouses, manufactured homes, or homes or lots in a subdivision when sold, or residential units otherwise conveyed on a unit-by-unit basis, even if those units are a part of a larger building or parcel of real estate containing more than four (4) residential units.

HB 638 - ‘Cooperation Agreement’

HB 638 - Limitations on Activities

The out-of-state principal broker must enter into a written ‘cooperation agreement’ with the Kentucky cooperating broker. The ‘cooperation agreement’ must contain:

In keeping with the limited rights granted to outof-state licensees, House Bill 638 limits in what brokerage activities an out-of-state licensee may engage without having to have a Kentucky license. Under the Act, the out-of-state licensee:

1. The terms of cooperation and compensation among the brokers.

2. Information sufficient to identify the specific commercial real estate transactions governed by the cooperation agreement.

3. The effective date and a definite termination date of the cooperation agreement.

HB 638 -‘Notice of Affiliation’ The out-of-state principal broker and the out-ofstate licensee must file a sworn ‘notice of affiliation’ with the Kentucky cooperating broker that contains the following: 1. Contact and license information for the out-of-state principal broker, the out-of-state licensee and the Kentucky cooperating broker.

2. Effective date and termination date of the corresponding cooperation agreement.

3. Agreement to comply with Kentucky laws and KREC regulations.

4. Consent to participate in lawsuits brought against them in Kentucky courts, and consent to service of summons through the Kentucky Secretary of State.

5. Statement that the out-of-state principal broker and the out-of-state licensee have no license revocations or felony convictions in the previous five (5) years.

6. Consent to a criminal records check by KREC in an investigation of wrongful conduct pursuant to KRS 324.150.

1. May co-list with the Kentucky cooperating broker - but may not list - the Kentucky commercial real estate.

2. May not hold escrow funds, security deposits, or other moneys in escrow or other accounts outside of Kentucky.

3. Must keep the Kentucky cooperating broker fully informed of all activities through prompt communications and copies of all documentation.

4. Must generally include the name of the Kentucky cooperating broker on all advertising. [Limited exceptions apply.]

5. May engage in preliminary exchanges of information and materials, discussions, and investment or other advice without constituting ‘brokerage’ or having to comply with the Act.

Out-of-state principal brokers and licensees interested in taking advantage of Kentucky’s new commercial real estate license law exception should read carefully the full requirements of House Bill 638.

The final adopted version of the Act may be found at www.lrc.ky.gov/record/08RS/HB638/bill.doc. The new law becomes effective on July 15, 2008.

SUMMER 2008 KENTUCKY REALTOR® 9

Feature Story

GREEN THIS SEASON’S FASHIONABLE COLOR But it’s not just a passing fad

By Hunt Cooper KAR Communications/Marketing Director

he term “green” has become a buzzword across the country as marketers and industry players try to capitalize on an eco-friendly movement that has taken off with consumers. Interest across the board has never been so high for products and services that make less of a dent in the environment and aim to lower carbon footprints. Everything from apparel companies to household cleaning products, even bottled water companies, have joined in the act and started promoting themselves as being “green.” And it’s not just a fad that is a flash in the pan, it’s a lifestyle that is quickly becoming mainstream in our society.

This is true in real estate as well. Builders, REALTORS® and, yes, even lenders are educating themselves on the heightened interest being placed on the green housing market and are beginning to offer services tailored toward the “green” movement.

Consumers themselves are giving the industry an opportunity to capitalize on this phenomenon. Take these facts for example: A recent NAR survey of REALTORS® who practice residential real estate showed there is high demand among potential home buyers for green features. Nearly nine out of 10 REALTORS® said their clients are most interested in the energy efficient features of green homes and their potential cost savings.

T

10 www.kar.com

Nearly half of those surveyed said they frequently discuss green building practices with their clients and nearly 90 percent agreed there will be even more interest in green building a year from now, evidenced by studies that show homes meeting EPA energy efficiency standards can save $200-$400 a year in utility bills. Buyers seem to agree. Sixty-five percent of homebuyers view energy efficiency as an important consideration and 46 percent of buyers would like a green home.

An informal survey of REALTORS® who practice commercial real estate showed similar findings. Onethird of those surveyed said green building is important to their clients and more than half frequently discuss green building practices with their clients. Nine out of 10 agreed that a year from now there will be even more interest in environmentally friendly building.

So what can REALTORS® do to take advantage of the demands made by those seeking a more earthfriendly lifestyle? To start, REALTORS® should learn as much as possible about what exactly makes a green home and the benefits it provides to both buyers and sellers. On a personal level, this translates into how to work with buyers who are considering purchasing a home that can provide lower energy consumption and cleaner indoor air, and how to instruct sellers on

changes that will make their homes more energy efficient and desirable to a particular buyer.

In order to become more educated, REALTORS® have a plethora of resources at their disposal and more information becomes available, it seems, daily. By typing “green living” or “green homes” in Google, millions of links will generate from various sources, which could take years to research. There are, however, several good starting points. For the basics, REALTORS® should understand what makes a home Energy Star® qualified, what benefits are provided by the U.S. Green Building Council (USGBC) and the LEED Green Building Rating System, frequently used terms (see page 27) and other basic upgrades and improvements that could potentially make homes more marketable for both buyers and sellers. There are also green certification programs, such as EcoBroker (see page 19) and Green Real Estate Education, designed to provide training to address such topics as green home certification, energy efficiency and sustainable design.

REALTORS® are also prepared to provide solutions for issues that may arise in real estate transactions such as mold, radon and poor indoor air quality.

The National Association of Home Builders (NAHB) began the National Green Building Program in 1998, which is continuing to help its members move the practice of green building into the mainstream.

Aspects such as energy efficiency, water and resource conservation, sustainable or recycled products and indoor air quality are being promoted to become incorporated into the everyday process of home building. To achieve this, the NAHB holds the National Green Building Conference annually and honors achievements and commitments to green building with the National Green Building Awards.

According to a survey in late 2007, the vast majority of residential builders and developers - 90% are interested in participating in a voluntary green building certification program. On the state level, the Home Builders Association of Kentucky took the lead from NAHB and recently rolled out its “Green Build Kentucky” Program, designed to make new homes built in the state more environmentally friendly (see sidebar for more information of the program).

As for lowering the cost of purchasing “green,” some major mortgage lenders are trying to lure greenminded homeowners with discounts for upgrades that make a home more eco-friendly. Companies are pushing special programs for so called "green

National Association of REALTORS® “Green” Building The NAR building, a landmark in the heart of America’s capital city, serves as the Washington, D.C. operations center for the association.

The building is the first, newly constructed building in the District of Columbia to meet “green” standards – high levels of environmental performance as set by the U.S. Green Building Council. For its achievements in the field of sustainable environmental design, the building was awarded the Silver Certification from the LEED (Leadership in Energy and Environmental Design) Green Building Rating System.

The striking, glass-wrapped structure sets new architectural and environmental standards for the city, has been honored with several awards for architecture, design, finance and environmental projects, and creates a dramatic presence with its breathtaking view of the U.S. Capitol only three blocks away.

Construction of the $46-million, 96,000 square foot Class “A” building was begun in October 2002, and the building was dedicated and opened for business two years later in October 2004. NAR occupies five floors of the 12-story building, using more than 44,000 square feet. The remaining 48,000 square feet is rented.

To find out about the “green” features incorporated into the NAR building, please visit http://www.kar.com/ media/pdf/NARGreenBuilding.pdf

mortgages,” which offer, among other things, discounts on closing costs/fees for meeting certain standards, and credits for making certain energy-efficient upgrades.

Certain states are getting in on the act as well (Kentucky is not yet one of them) by offering subsidized mortgages that can help homeowners “go green.” The good news is not only do the improvements being made help the planet, but they can also save homeowners money.

SUMMER 2008 KENTUCKY REALTOR® 11

Feature Story What Makes A Home Green?

According to the U.S. Environmental Protection Agency (EPA), residential and commercial buildings account for more than one-third of the nation’s total energy use, 12 percent of water use, 68 percent of electricity consumption and 38 percent of carbon dioxide emissions. Further, if you read the government statistics, U.S. households waste more than $300 billion every year because of inefficient energy use. Because homes and buildings have a major impact on the environment, it is important to know what features make up a “green” home.

Most homes that fit the term “green” feature energy efficient heating and cooling systems, lighting

and appliances, all geared toward achieving the seal of approval from the EPA’s Energy Star® program, which encompasses over 50 types of products ranging from furnaces and appliances to complete homes. To qualify for the label, homes must be at least 15% more energy efficient than homes built to the 2004 International Residential Code, and include additional energy-saving features that typically make them 20–30% more efficient than standard homes.

In new home construction, the “green” features encompass everything from land planning techniques that preserve the natural environment, site development that reduces erosion and protects trees, indoor and outdoor water conservation to the use of recyclable and

By Bob Weiss, Executive Vice President of the Home Builders Association of Kentucky

HBAK Rolls Out New Green Program The Home Builders Association of Kentucky recently rolled out its “Green Build Kentucky” Program, designed to make new homes built in the state more environmentally friendly.

“Green Build Kentucky” is a voluntary program for builders based on the National Association of Home Builders Green Building Guidelines and the federal Energy Star® Program.

It is compromised of six guiding principles as outlined in the guidelines: • Lot preparation: Includes, among other things, how the home affects existing plants and trees and the placement of the home on the lot to take advantage of the winter sun.

• Resource Efficiency: Advance framing techniques and the efficient use of materials as well as conducting a recycling program.

• Energy efficiency: Building the home according to the Energy Star® Program.

• Water efficiency and conservation: Installation of low flow devices as well as other practices designed to conserve water.

12 www.kar.com

• Indoor Air Quality: Managing the moisture content and ventilation of the home.

• Operation, Maintenance and Education: The builder will educate the home buyer on the maintenance techniques that need to be adhered to, as well as the buyer’s knowledge of the conservation systems in the home.

Builders who choose to build “green” homes will first follow the guidelines set by the Energy Star® Program, a successful energy efficient program administered by the federal EPA. They will then earn points toward being green by incorporating efficient building techniques from the other areas in the guidelines. All of the techniques leading to a “green” home will be inspected and documented by a third party verifier, which will be an Energy Star® trained HERS Rater.

The Home Builders Association of Kentucky and its local associations will provide education and training on the construction, marketing and financing of “green” homes. Classes have already been held in Lexington and Northern Kentucky and will soon be held in other areas.

renewable materials, waste reduction and recycling during the building process and throughout the life of the home.

Other simple ways homeowners can get into the eco-friendly act are caulking and weather-stripping windows, replacing light bulbs with energy-efficient CF bulbs, using low-emission carpets, stains, and paints, installing a programmable thermostat or adding insulation to the attic. Advanced ways to implement earth saving features can be capturing rainwater in holding tanks, installing solar panels, smart irrigation systems or geothermal heating and cooling and using reclaimed wood on countertops and other furniture.

To reveal additional ways to save and possibly make a home more marketable when it is listed, sellers can have an energy audit performed, which will assess a home’s energy usage, determine what improvements could increase energy efficiency further and compute the savings and payback period of various options.

Audit results can be used as a marketing tool if the sellers get a positive report or implement recommendations as a result.

To find out more information about how to “green up,” start with these sites: U.S. Green Building Council www.usgbc.org Energy Star® www.energystar.gov Home Energy Rating System www.hers.org Environmental Protection Agency www.epa.gov

For a complete list of “Green” terms every real estate professional should know, turn to page 27.

Boone Tavern Hotel Gets “Green” Renovation A comprehensive “green” renovation of the historic Boone Tavern Hotel in Berea, Kentucky began January 1, 2008. The $9.6 million, eco-friendly renovation project is designed to ensure that the historic charm of Boone Tavern, which is nearly 100 years old, is preserved and enhanced. The renovation of Boone Tavern is expected to earn the distinction of being the first LEED-certified hotel in Kentucky, as recognized by the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED).

After the renovation, the on-going operations of the hotel will be eco-friendly as well.

The environmentally focused renovation is consistent with the historical values of Berea College, long recognized as a leader in preserving Appalachian cultural and natural resources. The full-scale renovation will revive the ecological integrity of many features original to the building’s design, such as: • Open-air porches on two levels • Restoration of skylights in the original dining room • Ventilating roof windows • Deciduous and native shade trees • Efficient, state-of-the-art kitchen has replaced the former one, which dated to the 1940s • Guest rooms will be furnished with beds and other items made by Berea College Crafts • Water saving features include dual-flush toilets and shower heads that provide better pressure while reducing water flow

SUMMER 2008 KENTUCKY REALTOR® 13

Legislative Update

2008 General Assembly – The KAR Perspective A Review of the Session

James Sharp Governmental Affairs Director Kentucky Association of REALTORS®

he Kentucky General Assembly officially concluded legislative business in the early morning hours of April 15th, adjourning sine die until next year. In addition to the highly contentious political debate on issues such as casino gambling and the biennial budget, legislators worked through re-election campaign concerns and intra-party disagreements. Despite these challenges, the Kentucky Association of REALTORS® (KAR) was successful in passing landmark legislation regarding commercial real estate transactions.

Additionally, KAR lobbied on several other important legislative proposals of significance to the real estate industry and small businesses in the Commonwealth, with a solid record of success the issues.

The KAR lobbying and government affairs efforts in Frankfort are at the most effective and strongest when Kentucky legislators are connected with the voices of Kentucky REALTORS®. Many of you received and responded to important Legislative Calls for Action this past session which enabled the KAR team to help pass various bills. Every REALTOR® that took the time to contact representatives in Frankfort deserves a solid “Thank You.” One of the highlights of this past session was the introduction and passage of a KAR-developed bill, HB 638 regarding Commercial License Law. For a more indepth look at HB 638 and what this new law will mean for commercial real estate professionals in Kentucky, be sure to read the article by KAR Counsel, Doug Martin on page 8. Continue reading for a summary of legislation of interest to Kentucky REALTORS®.

T

Commercial License Law, HB 638: HB 638 was introduced by KAR that passed the Kentucky General Assembly and will go into law July 15th. This important bill provides an efficient, structured

14 www.kar.com

framework by which out-of-state real estate professionals can cooperate with their Kentucky counterparts to buy and sell commercial real estate in Commonwealth. The bill is in response to and follows the guidance of a Federal court decision regarding outof-state brokers working with Kentuckians.

The new law requires an out-of-state broker and their Kentucky counterpart to enter into a written cooperation agreement and specifying the details of the transaction such as the terms of compensation and cooperation, and other important information.

Additionally, the out-of-state real estate professional is required to file a Notice of Affiliation with the Kentucky real estate professional that includes important information such as the license number, address, and consent to Kentucky jurisdiction. Importantly, the Kentucky Real Estate Commission (KREC) retains full investigative powers and authority to respond to complaints of violation of the notice of affiliation.

KAR worked closely with the KREC, commercial brokers, and our membership to achieve a responsible, consensus legislation that unanimously passed both the Kentucky House and Senate.

Occupational Tax Collection Modernization, HB 729: Another KAR-introduced bill, HB 729, the Occupational Tax Collection Modernization, was stalled in Committee. This bill would have created an online, centralized system for the calculation, collection, and distribution of multi-jurisdiction payroll and license taxes. The proposed system would have been administered by the Kentucky Department of Revenue or a third party vendor, and would have created an online form with the tax rate for each local entity as well as calculation function. REALTORS® would then go online, enter the payroll for each local jurisdiction and pay all of the taxes with one electronic transfer. The system would be available for audit by local jurisdictions. It would dramatically reduce payroll tax collection costs for local jurisdictions and encourage filing by businesses currently ignoring the local laws.

This bill was in response to Kentucky local municipal and county governments across the state

Legislative Update levying local payroll and business license taxes that differ from one municipality to the next. Businesses and individuals that cross each boundary are required to file a return with each local government with an allocation of the payroll used on sites within the local jurisdiction. It’s not just a REALTOR® issue; service and construction businesses are often filing dozens of local tax returns, the preparation costs of which add up quickly, often greatly exceeding the amount of tax owed.

Prohibiting “Inclusionary Zoning,” HB 447: State Representative and REALTOR® member introduced HB 447, which would have diminished local government’s ability to set the price of housing by preventing local governments from approving or denying a permit based on the price of the homes to be built. Artificially dictating the price of homes rather than allowing the market to determine price may unintentionally cap the value of a home thus lower the equity value for families. This bill will not damage Kentucky’s affordable housing objective by diminishing the number of affordable homes for sale. It will allow a free, competitive market to continue.

Because of concerns from many non-profit organizations, HB 447 was stalled in committee. KAR has a strong record of supporting affordable housing, and just last year helped pass a bill that would allow a $6.00 charge from every recording and filing fee to help fund the Kentucky Affordable Housing Trust Fund for needy citizens.

Expanding Affordable Housing Opportunities, HB 373: This important bill, signed into law by the governor, doubles the debt ceiling of Kentucky Housing Corporation (KHC) from $2.5 billion to $5 billion. The increase enables KHC to assist at least 25,000 additional low income households with safe, secure home mortgage loans.

Misclassification of Independent Contractors, HB 654: In an attempt to address the issue of misclassifying employees as independent contractors, Rep. Stumbo filed HB 654. If the bill had passed, it would have permitted any interested party to file a complaint against a contractor they felt had been issuing 1099’s instead of W-2’s. The complaint would have been filed with the Department of Labor, who would then have the

Kentucky General Assembly Promotes Green REALTORS® can benefit from a new energy efficiency law Did you know that the Kentucky General Assembly passed an important “green” bill into law this year?

HB 2, the Energy Efficiency and Sustainability Bill will benefit REALTORS®, homebuilders, and individual consumers through limited nonrefundable tax credits for certain green energy improvements as well construction or sale of an Energy Star home.

Improvements such as insulation upgrades, solar and wind systems installation, energy efficient lighting or HVAC systems qualify. Credits would total up to $500 per taxpayer for residential projects, up to $1,000 per taxpayer on commercial and multi-family rental property projects (for certain upgrades), $800 per taxpayer for purchase or construction of an Energy Star home and $400 for purchase of an Energy Star manufactured home. The credits would be offered between 2009 and 2015.

Additionally, HB 2 creates a high-performance Buildings Advisory Committee to make recommendations to the Finance and Administration Cabinet. It directs the Finance and Administration Cabinet to promulgate administrative regulations and develop standards and criteria for high performance buildings.

REALTORS® should use this new green law to their advantage when showing homes to clients, especially if those clients are considering upgrading certain household appliances like water heaters, central air conditioning units and electric heat pumps or considering new windows and insulation. Here is a brief summary of some of the tax credits available to residential customers under HB 2: Residential Improvements and Tax Credit Amount: • Energy Star windows or storm doors up to $250 • Energy Star electric heat pump, air conditioning unit, natural gas, propane, or oil furnace or geothermal heat pump Up to $250 • Energy Star upgraded insulationu p to $100 These are just a few of the credits available to you and your clients. For more information and a full summary of the new law, go to www.energy.ky.gov and click on “Summary of House Bill 2 - Energy Legislation” on the right side.

SUMMER 2008 KENTUCKY REALTOR® 15

RPAC opportunity to investigate the general contractor. If the Department found the contractor guilty, they would then forward the contractor’s information onto other related cabinets, including the Department of Revenue.

KAR opposed this bill which stalled in the Senate due to significant opposition.

Revised Continuing Education Requirements, HB 255: A Kentucky Real Estate Commission (KREC) sponsored bill, HB 255 sought to establish new Continuing Education requirements for new real estate licensees. This bill would have required 15 hours of Continuing Education within a 12 month period for any new real estate licensees but would have grandfathered existing licensees.

Although HB 255 passed the House after some discussion on the issue, time ran out for Senate consideration of this bill. During debate, an issue was raised regarding the applicability of new agent orientation as CE under this law. However, the topic was never fully clarified before the end of session.

Escrow violation changes, administrative and technical corrections, HB 254: Another KREC bill, HB 254, moved through the House and was scheduled for consideration by a Senate Committee. However, HB 254 was pulled after it was suggested that an amendment would be filed to the bill.

Ultimately, the Session ended before the bill could be reconsidered.

Once again, thank you to all who responded and participated in the Calls for Action. Your continued involvement will help ensure Kentucky REALTORS® have a strong and concerted grassroots lobbying effort in Frankfort. If you have any questions regarding this or any other legislative proposal, or are interested in learning how you can get your local association involved in government affairs, please do not hesitate to call James Sharp, KAR’s Governmental Affairs Director, at 1-800-264-2185.

RPAC Contributors - $99 and up Through April 30, 2008, the following REALTORS® contributed to the REALTOR® Political Action Committee (RPAC) at the major designated levels. By contributing to RPAC, you are able to support REALTOR®-friendly legislators who believe in our industry and protecting private property rights, preserving the American dream of home ownership, fighting for tax reforms and reducing burdensome regulations on our business. For more information on the value of RPAC and how it works for you, contact James Sharp at jsharp@kar.com or 800.264.2185.

Big Blue R ($1,500 and up) Harrell N. Tague Jr. Sterling R ($1,000 - $1,499) Dennis R. Anderson William P. Snyder* Thoroughbred R ($500 - $999) Gary Barlow Judy A. Craft Richard Y. Vreeland Pearl R ($250 - $499) Tony Clark Steve K. Cline Jayne Cox Sharon Dickman Donna W. Ensminger Brenda G. Gooslin Ronald E. Hughes Bobbie Johnson Melody Malone Janet S. Robinson Catherine J. Schramm John A. Stephenson

Don C. Sullivan II Peggy F. Thurza John T. Vince Jr. Mike M. Wheatley Commonwealth Club ($99 - $249) Connie K. Albrecht Gina R. Allen Mary K. Allhoff Nancy Allison Joy E. Amann Dana W. Anderson Sarah A. Bailey Kaye Bowles-Durnell Julie Bradford David L. Bray Ted L. Bray Cindy Brouillette Freddie Brown Pitsy M. Buren Cindy A. Cahill Doris E. Carver Jesse L. Case Lynn T. Caudill Jerry B. Cleland

James C. Collier Russ Connors James W. Cook Shirley Culton Rick Curby Joe Cusick Garlene Daniel Lynn Davenport David Davis John S. Davis Darrell Defler Alfred T. Dent Betty J. Dils Tim Eickhoff Ann Elliott Stacey R. Fergerson Charles M. Ford George Foree Leo W. Frank Douglas A. Garner Elizabeth T. Gibson Aaron T. Givhan Glenn E. Green Jr. Sandy Gulick Cindy Hack

* Hall of Fame members have contributed to RPAC a cumulative amount exceeding $25,000.

16 www.kar.com

Pat Hagan William F. Harned Mark Hass Jennifer Haubner-Vories Laura H. Hayden Leslie D. Heath Paul N. Herron Melody J. Holder Lynda G. Houck Robert T. Howard John F. Huggins Thomas F. Hughes Sandy Huwel Loretta C. Jobs Paula P. Johnston Kathy C. Kimbel Chuck Koller William R. Kopperud Kurt H. Krug Mary Ann Krumpelman Evelyn M. Lacey Nancy R. Lage Maxine Littrell Laurie Logan Cheery Malone

R. Douglas Martin Barbara A. Massman Dot M. Miller Sandra Mills Elizabeth Monarch Christine L. Morgan Patricia Nuccitelli Evelyn C. G. Page Scott Panella Lenora Paradis Kathryn S. Pendleton Betty L. Peyton J. Richard Queen Terri L. Raney Norma G. Rapier Theresa E. Reekers William E. Rudd Jr. Mark Schaffer Mary Jo Schuerman Donald G. Sims Jeff W. Smith Sherry Spanyer Stephanie Steffen Lisa Stephenson David L. Stewart Phil Terry

Housing Stats

he national media coverage of the housing market makes it seem as though the entire country is in a deep recession. Daily headlines — “Real estate prices are plummeting!” — “Foreclosures are at an all time high!” — “Prices predicted to decline another 20 to 30 percent!” — are starting to take a toll on the local housing markets. Buyers in the state are fence sitting, thinking the bottom is yet to come and that entering the market now is a bad financial move.

As many states saw the declines hit in 2007 with large decreases in sales and prices, Kentucky remained stable and ended the year on a somewhat positive note – median prices rose almost 2% while sales were down only 5% from the previous year.

In 2008, however, the negative coverage of the housing market has started its rippling effect across the Commonwealth. For the first quarter of 2008, total home sales slipped in every market across Kentucky (down 19%) with home prices falling 5%. And although this seems much worse than last year, as a whole, Kentucky has still managed to keep the market in perspective. National figures saw prices decline more than 7% during the first quarter, steeper than what has been seen on the state level.

“Now is a perfect time to buy,” says Robert Damron, president of the Kentucky Association of REALTORS®. “The same reasons that were prevalent last year still remain true today – interest rates are at historic lows, the selection of homes is abundant and buyers can get more house for their money.”

One reason for the hesitation may relate to the mortgage industry. As the subprime fallout continued into the later months of 2007, borrowers were faced with more restrictive lending practices, according to Lawrence Yun, NAR’s chief economist. Even though Kentucky didn’t see the extent of the problems in the foreclosure market as did some other states, the carryover effect has caused some tightening on borrowers in Kentucky.

The turnaround in Kentucky may be short lived, however, as optimism is just over the horizon. Members from around the state have voiced opinions that the market will pick up as the warm weather takes over and even Yun has stated that “home sales and prices throughout most of the country are poised for improvement in the second half of 2008.”

National Media Takes Toll on Kentucky Housing

T

State remains optimistic for remainder of 2008 Stats through 1st quarter - 2007 & 2008 Board/Association

# Sold 2008

# Sold 2007

# Sold %

Median Price 2008

Median Price 2007

Median Price %

Henderson-Audubon BOR

66

89

-34.85%

87700

111950

-27.65%

Hopkinsville-Christian BOR

85

134

Kentucky-Barkley Lakes BOR

63

77

-57.65%

86700

99900

-15.22%

-22.22%

98500

90001

8.63%

Madisonville-Hopkins BOR

92

105

-14.13%

92000

92380

-0.41

Mayfield-Graves BOR

66

69

-4.55%

72750

50250

30.93%

Region One

Murray Calloway County BOR

42

49

-16.67%

117450

113500

3.36%

Owensboro BOR

255

298

-16.86%

104000

84250

18.99%

Paducah BOR

155

169

-9.03%

119500

95000

20.50%

Pennyrile BOR

96

97

-1.04%

95500

99900

-4.61%

Central Kentucky AOR

119

141

-18.49%

108250

110000

-1.62%

Heart of Kentucky AOR

355

424

-19.44%

135000

125000

7.41%

Old Kentucky Home BOR

88

144

-63.64%

102600

116600

-13.65%

Region Two

394

519

-31.73%

121250

117000

3.51%

Shelbyville BOR

REALTOR® Assn of SKY

98

110

-12.24%

148888

152375

-2.34%

South Central Kentucky AOR

49

69

-40.82%

94000

113750

-21.01%

2695

3210

-19.11%

133800

134500

-0.52%

1781

2074

-16.45%

137600

146900

-6.76%

1157

1354

-17.03%

136000

137450

1.07%

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

173

207

-19.65%

84500

85000

-0.59%

Cumberland Valley BOR

104

173

-66.35%

93000

95400

-2.58%

Eastern Kentucky AOR

100

124

-24.00%

105000

84112

19.89%

Madison County BOR

621

696

-12.08%

127500

134176

-5.24%

Pioneer Trace BOR Somerset-Lake Cumberland BOR Totals

42

75

-78.57%

83000

90300

-88.80%

135

139

-2.96%

95000

122000

-28.42%

17613

21023

-19.36%

106000

111950

5.61%

* Statistics are unavailable for the following local associations: Cave Run, Cynthiana-Harrison Co., Dix River and Frankfort ** Statistics for Russellville-Logan Co. are included in those provided by the REALTOR® Assn. of Southern KY

SUMMER 2008 KENTUCKY REALTOR® 17

KREC Information Independent Contractor Agreement Create a clear understanding between both parties Lee Harris is General Counsel for the Kentucky Real Estate Commission

s a sales associate, when you place your license with a new principal broker, you should enter into a written independent contractor agreement. This agreement should outline the payment schedule, or commission split, to which you and the broker have agreed. In addition, it should outline any office responsibilities, such as phone or weekend duty, that are required of you.

Perhaps most importantly, the agreement should outline what will occur in case you leave the broker’s employ or put your license into escrow at some point in the future. While this seems like a burdensome thing to do when you are just starting a new business relationship, that agreement can be very helpful to both the broker and the sales associate.

All listings belong to the principal broker, whether you have originated that business or not. When you leave, there are often listings that have not yet sold. The questions that need to be addressed in your employment agreement are whether you will be entitled to move those listings upon your departure and also whether you will be paid for listings that close after your departure.

Many sales associates do not have a written independent contractor agreement. So, if or when they decide to leave that principal broker or to move their licenses to another company, these questions arise. It is very difficult to know how such issues should be handled, because there has been no agreement.

If you do not have a written agreement and are leaving your current principal broker, you should discuss these issues at the time you decide to leave.

Once you and the broker have come to an agreement as to how the listings and contracts will be handled,

A

18 www.kar.com

All listings belong to the principal broker, whether you have originated that business or not. reduce that agreement to writing. Your principal broker certainly can pay you for listings that close after you leave, but he or she is not required to do so. That is why a written agreement will ensure that all parties have a clear understanding of how things will be handled once you have departed.

Important Update: The Kentucky Real Estate Commission has increased the continuing education delinquency fine from $200 to $500. This is for any licensee who did not complete their continuing education requirement by the end of the calendar year.

The details of this regulation can be found in the KREC Licensing Law manual 201 KAR 11:230 Section 7 or online by visiting http://www.lrc.ky.gov/kar/201/011/230.htm.

Education EcoBroker® Offers Green Designation Offer Clients Added Benefits ith national surveys indicating that 80 percent of consumers consider themselves " green-minded,” people are looking for innovative ways to live green and increase the comfort, health and affordability of their home.

Consumers are looking to the “experts” to help make green choices that contribute to environmental sustainability easier. As a result, a trend toward green building practices has emerged to mitigate the environmental impact of home building and remodeling.

According to GreenBiz.com, the market for green homes is expected to rise from $2 billion to $20 billion over the next ten years. With this growth comes misinformation and the need for education.

EcoBroker International (EcoBroker) fills a niche in the real estate space by offering licensed real estate professionals the only comprehensive green educational curriculum available, focusing on how to live and build green.

EcoBroker is the first and largest provider of green designation training for real estate professionals.

Through EcoBroker’s unique energy and environmental curriculum, which emphasizes everything from energy efficiency to solar energy to indoor air quality, real estate professionals acquire the knowledge and resources to become a Certified EcoBroker and assist clients in their pursuit of green properties that provide affordability, comfort and health. To date, EcoBroker has nearly 3,000 members in 46 states, four Canadian provinces and the Caribbean.

W

EcoBroker offers the most comprehensive green real estate curriculum available. In order to earn the EcoBroker Designation, licensed real estate professionals must fulfill a straight-forward set of requirements that center on an energy, environmental and marketing training program.

The curriculum is $395 and includes three day-long interactive classes complete with quizzes, homework and activities and concluding with a final exam. Unlike other programs, every EcoBroker member is required to renew their certification on an annual basis through the program’s 4-hour annual update course.

The curriculum is designed to help real estate professionals address a variety of topics that impact the environment, such as green home certification programs like Energy Star® Qualified Homes, energy-efficiency and environmentally sensitive design as well as health issues that may arise in real estate transactions, such as mold, radon and poor indoor air quality. Affordability is also of key concern, offering agents information to help improve the efficiency and comfort of homes and leading to substantial energy cost savings for their clients every month.

The designation offers agents a competitive advantage when building their client base as more and more consumers are looking for agents with green expertise when buying, selling or retrofitting a home.

EcoBroker International can be reached by phone at 1-800-706-4321, online at www.ecobroker.com, and by email at customerservice@ecobroker.com.

Register now for the CRS/GRI Elective course, The New Negotiating Edge... A 5-Step Behavioral Strategy, an innovative approach to effective negotiating strategies, taught by Ed Hatch.The 8-hour course will be held on Tuesday, September 23 during KAR’s 2008 Annual Convention & Expo in Covington, Kentucky. Group discounts are available – registration fees are $125 for one person, $100 per person for groups of 2 to 4 and $75 per person for groups of 5 or more. Download a registration form at www.kar.com/aboutkar.asp?p=conventionexpo.

SUMMER 2008 KENTUCKY REALTOR® 19

Community Profile

A Spotlight on...Vacation Homes In 2007, vacation homes made up 12 percent of all existing- and new-home sales in the U.S. And, although last year saw decreases in the number of vacation homes sold and a slight drop in the overall median price across the country, Kentucky’s vacation home market is a bright spot that seems to be picking up steam.

Three lake areas across the state are highlighted below, providing the ins and outs of how this specialized market operates:

Lake Barkley and Kentucky Lake Located in Western Kentucky, you will find both Lake Barkley and Kentucky Lake, two of the world’s best kept retirement and second home buyers’ secrets.

As the largest tourist destination in the state, the lake area’s recreational use amounts to millions of visits each year.

“Folks from Ohio to Minnesota, Hawaii and California visit the area and fall in love with the relaxed lifestyle, friendly people and breathtaking scenery,” says Glenda Ritchie, a REALTOR® with 1st Realty Group in Murray. “They ultimately decide to make Western Kentucky’s waterways their home.”

Her clients are known as “Besters,” Baby Boomers in the stage in life between being an empty nester and entering full-time retirement who are seeking a better lifestyle. Ritchie admits, as she sits in her fainting sofa overlooking the water, that she is a “Bester” and says she specializes in selling property to others like herself who want to make their dreams come true. Something that she has, herself, achieved.

Considered a “niche marketing REALTOR®,” Ritchie says her buyers begin their search for waterfront property three to five years before they are ready to buy, usually live within a 500 mile radius of either lake and have an average income in excess of $100,000. They enjoy the water, are avid fishermen or pleasure boaters and are looking for a milder climate.

“Besters,” she says, appreciate the small town rural atmosphere of days gone by and the low crime rates.

Ritchie confesses, “I don’t ever know where the keys to my home are.”

The lakes area has seen some impressive housing numbers since 2003. Over the last six years, 656 waterfront homes have sold in the 5 counties that surround Kentucky Lake and Lake Barkley. The

20 www.kar.com

average sale price of these homes was $262,623 with the highest price being $1.2 million and the low being $6,800. The average length of time on the market for waterfront homes has been 206 days. Overall waterfront homes in this period have brought 93.5% of their list value. In 2008, the list to sale ratio on waterfront homes has remained constant. As an example, Ritchie points out that the list to sale ratio through May this year is 93.17% on waterfront homes.

Demonstrating commitment to her niche, she explains that waterfront sales have made up only 5% of the total West Kentucky Regional MLS home sales since January of 2003, but that 78% of her personal sales during this time were waterfront homes.

To achieve this level of sales and interest, Ritchie says she focuses much of her marketing attention to her website and online activities. “Ninety percent of my clients make first contact with me through my website, which has received over 3.7 million hits since April of 2006. To attract visitors to my site, I use the large listing sites like realtor.com and niche sites like lakehouse.com.

In addition, I pay for placement on search engines using various search terms and I advertise in the three different homes guides, making the focal point of each ad a link back to my web site. Email is also a necessity for me.”

She goes on to explain that 38 percent of her clients have never been to either of the lakes before their initial trip to look for their dream home. When they do visit, buyers spend an average of 3 days visiting and view an average of 13 homes before making a decision.

While my clients are here,” says Ritchie, “I wear many hats - from tour guide to dining expert and area activity consultant. In fact, I keep a list of fishing guides on hand so I can call and book a half day fishing trip if needed.”

Lake Cumberland Lake Cumberland is one of the largest man-made lakes east of the Mississippi and is considered the “Houseboat Capital of the World.” The lake hosts one of the largest annual Poker Runs in the nation each September, which attracts some of the nicest and fastest boats around. On a normal weekend one can enjoy several different water sports including skiing, wakeboarding, & tubing along with just relaxing in one of the numerous coves along the shores of the lake.

Besides the lake itself, the area is home to numerous other outdoor opportunities such as hiking, rafting/canoeing, horse-back riding, biking, ATV riding, & camping. The area is rich in history dating back to the pioneer days and especially during the Civil War with the Battle of Mill Springs taking placed along the banks of the Cumberland River.

“With so much to do and see it is no wonder why so many people have been interested in permanently relocating to the area, retiring or purchasing a second home,” says Nelson Weaver, Broker/Co-owner of Key Associates Waterfront Realty in Somerset. “Our two largest markets of buyers are those who are retiring here and those purchasing vacation homes.”

Compared to other large national markets, the prices of properties are attractive and the cost of living is typically much lower than where most of the buyers are relocating from. As with many vacation home areas, Lake Cumberland is starting to see a large number of Baby Boomers either retiring or moving

here from a different retirement destinations, especially from the north in the Cincinnati, Dayton and Indianapolis markets.

The number one way to reach potential buyers, Weaver says, is through the use of the internet. Buyers can see what the area has to offer and browse through available properties to get an idea of the homes available and what they can get for their money. Some companies, according to Weaver, also use real estate classifieds and home magazines catering to vacation homes in the larger markets to directly connect with potential buyers.

“Sometimes a tour of the area to show the different neighborhoods and locations is necessary to determine how close buyers want to be to lake access, shopping, restaurants, etc. We can then narrow down the list based on the type of home or community they desire. On occasion, we have given boat tours to show potential buyers the area from the lake, plus it gives them a chance to see all the fun they are missing out on!”

Cave Run Lake Cave Run Lake, known as the “Muskie Fishing Capital of the South,” draws anglers from states as far north as Michigan, and as far west as Minnesota and the Dakotas.

Outside the real estate industry, promotional efforts from the Morehead Tourism Commission, the (Continued on page 26)

SUMMER 2008 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.

REALTOR® Association of Southern Kentucky In December of 2007, RASKY members attended an @Risk Summit, organized by the City of Bowling Green and comprised of community leaders, to address possible solutions to the potential foreclosure crisis. While it was determined that our area has been minimally impacted by foreclosures, it was at that meeting that a partnership began with the REALTOR® Association of Southern Kentucky, the city’s Housing Assistance and Development Services (HANDS) and other non-profits and lenders to develop a program “Creating a Credit Responsible Community” with the title being coined by local president, Lonnie Gann. The program is multi-faceted but the main focus of the REALTORS® will be to increase the homeownership rate in the city at a time when many feel it is not a good time to buy.

While the program is still in its infancy, the program will be designed to create greater consumer awareness and to be more pro-active in assisting people into homeownership. To help ensure the program’s success, the association, along with the Bowling Green Mayor, applied for and received the 2008 Ambassadors for Cities Program grant awarded by the National Association of REALTORS® and the United States Conference of Mayors. The program began in 2004 and it encourages cities and local associations to form partnerships to promote affordable housing. The REALTOR® Association of Southern Kentucky, along with the National Association of REALTORS®, will be holding a public event to receive the $5,000 grant (the date has not yet been determined). Since the program’s inception, 29 cities have been honored and $145,000 has been awarded.

Madison County Board of REALTORS® This year, the Madison County Board of REALTORS® has had wonderful REALTOR® participation in several community service events.

Throughout April, MCBR joined with the Madison County Animal Shelter to raise awareness on the

22 www.kar.com

Darrell Logan, Community Service Director for MCBR and Keith Crawford, Director of the Madison County Animal Sheltern, Community Service Director for MCBR and Keith Crawford, Director of the Madison County Animal Shelter

importance of animal adoption. REALTORS® were encouraged to advertise for the shelter, as well as donate cleaning supplies to help offset operating costs. The results speak for themselves - the shelter had 65 adoptions during the month according to Keith Crawford, Director of the Madison County Animal Shelter.

Earlier in March, the local division of the National “Empty Bowls” Project hosted a fundraiser to raise money for our local food banks.

REALTORS® volunteered services as well as purchased pottery bowls to help raise money for the event.

Greater Louisville Association of REALTORS® In April, the GLAR Affiliates Council put on their 3rd REALTOR® Appreciation Day at Thunder Over Louisville! Over 1000 REALTORS® and their families attended this popular event.

GLAR had a prime location at the corner of Witherspoon Street, right across from the Great Lawn, which showed an excellent view of the fireworks.

FREE tickets were given away to REALTORS® by the GLAR Affiliate members who sponsored the event. Catered lunch was provided to all attendees and face painters and a balloon artist entertained the kids until it was time for the fireworks to begin. This fun-filled event would not have been possible without our Affiliate Members who sponsored as well as the members of the hard work and dedication this year’s Affiliate Council!

MHCBR members provide students with the information needed to make smart life decisions.

LBAR President Judy Craft presents books to Ashland Elementary Principal Schuronda Morton. LBAR Comm. Ed. Task Force Chair Melissa Poynter looks on.

Madisonville-Hopkins County Board of REALTORS® The Madisonville-Hopkins County Board of REALTORS® participated in the L.I.F.E. program on May 2, 2008. L.I.F.E. stands for “Learning It First through Education” and is for the 8th grade students in our school system. Through the LIFE project, students experience first hand what life will be like as they make stops through 19 booths consisting of: transportation, insurance, utilities, housing, communications, child care, taxes, furniture and clothing, just to name a few. They draw to see what career they have, if they are married and how many children they have. They have one hour to visit all the booths and make decisions that will make the most of their “salary.” At our Housing booth, they have the option to purchase a home or to rent. Most start out with the most expensive and then come back to us for something to rent. We do see several students each year that really seem to “get it!”

Our goal is to motivate the students to stay in school, stay away from drugs and avoid teenage pregnancy. We stress to them, while they are at our housing booth, to be able to afford the bigger homes, they need more education to be able to get the better paying jobs! The best quote from a former student sums it up really well, she said, “I understand why my Mom is always in a bad mood!”

She went on to say she didn’t know it was so hard in the real world! When we, as REALTORS®, who are donating our time, hear comments like that, it makes it all worth it. The MHCBOR has been participating in L.I.F.E. since its beginning here 12 years ago.

Lexington-Bluegrass Association of REALTORS® The Lexington-Bluegrass Association of REALTORS® (LBAR) was presented with the 2008 Outstanding Achievement in Fair Housing Award by the Lexington-Fayette Urban County Human Rights Commission (LFUHRC) for the association’s exemplary performance in fair housing practices. For many years, LBAR has partnered with the LFUHRC to provide fair housing training to members of the association. And, LBAR offers cross cultural training programs for members to learn about doing business with clients from other countries.

LBAR has also set up a regional book donation and reading program at elementary schools throughout the region. The association will be giving more than 1,000 books to 99 elementary schools in their 14 county coverage area. The project is part of a goal to become involved with the school systems in innovative ways that will positively shape the future of our community’s children. The Community Education Task Force, established specifically for the elementary school book donation effort, also has plans to reach out to high schools in Central Kentucky to focus on financial literacy.

SUMMER 2008 KENTUCKY REALTOR® 23

95%

By The Numbers

According to spam filtering services firm Barracuda Networks, the percent of all email that is spam. Out of 1 billion e-mail messages, only one or two out of 20 e-mail messages are now not spam. In 2001, Barracuda stated that spam accounted for 5% of all mail; that number rose to 70% by 2004, 8085% by 2005 and 85-90% by 2006.

8

An unhappy customer will tell this many or more people about a bad experience, and three-quarters will never buy from you again. Of course, only one in 10 unhappy customers will ever tell you about their experience.

A Harris InteractiveÂŽ survey shows that younger adults (18-34) are more than twice as likely to be at least somewhat likely to consider purchasing a foreclosed home than U.S. adults ages 55+ (69% versus 32%).

2X

69 million

The number of active users counted by the social network Facebook. You can join the KAR group on Facebook by using the search feature or access it directly at http://www.facebook.com/group.php? gid=9244727021.

67.7% 10 times

Percent of respondents from a Burst Media study said that their daily routine would be disrupted if they could not access the Internet for a week, with 42.9% saying that they would be significantly impacted.

Percent of first-time buyers are single females who purchased their first home on a median income of $44,500, according to the 2007 NAR Profile of Home Buyers and Sellers.

25%

The rule that says for each listing, knock on 10 doors to the left, 10 to the right and 20 doors across the street. People in these homes are the most likely to know the listing family personally, and therefore are most likely to want to help them find a buyer.

Much easier than the old rule of “knocking on 100 doors,� which takes a lot of time and energy.

10-10-20

24 www.kar.com

According to a study by Point2, listings that added 20+ photos generated nearly 10 times the number of leads and over 15 times the number of views as a listing with just one photo. Over a 30-day period, properties which feature just one photo generated approximately 5 views and 1.37 leads, while listings displaying 21 or more images received over 77 views and close to 11 leads.

Percent of participants in the AOL Real Estate/Zogby International survey who said they feel their home is worth more today than it was a year ago, and 56 percent do not think their home will be worth less in five years.

31%

69%

The Real Trends June PULSE survey revealed that 69 percent of respondents said that they strongly or somewhat agree their market is showing signs of improvement. This shows material improvement from May where the equivalent number was only 60 percent.

Community Profile

A Spotlight on...Vacation Homes (Continued from page 21) state tourism department and other groups have spurred interest in this recreational oasis through different avenues such as print advertising and direct marketing as well as at regional boat, sport and travel shows in large areas such as Cincinnati, Indianapolis, Columbus and Cleveland.

With this interest comes the desire to own a piece of the landscape and Scott Jenkins, a REALTOR® with Newsome and Associates Real Estate in Morehead and known in the area as the “Cabin King,” has capitalized on this niche, successfully selling this specialty now for almost 7 years. According to Jenkins, when he first started, people were looking for a seasonal getaway.

Now, he says, recreational property, which is a stable part of the area’s market, has become a year round draw.

Cave Run Lake, known until recently as a ‘weekend warrior’ lake, has transformed into a place that has non-stop activity due in large part to the types of buyers who have taken an interest in the area. Buyers include everyone from retirees and newlyweds to singles and parents of college students who see it as a way to have a place to visit and provide housing for their children while in college.

“Young people find this niche market appealing because it’s hard to get anything in the Morehead area for $50,000-$75,000,” says Jenkins. “Most will forgo the convenience and drive the 20-30 minutes to get to the area where the cabins are. There is also the romanticism that comes with owning a ‘cabin in the woods’ and to some young newlyweds it’s hard to pass up this verses living in a mobile home or even renting.

26 www.kar.com

Because many of the homes were built originally as weekend getaways, conventional financing was not available to buyers of these properties because they were not built to the required specifications. However, as demand grew, owners of many of the original cabins have remodeled and made necessary upgrades to alleviate these problems. Most new cabins, some as comfortable and plush as regular homes, have been built to meet or exceed specifications needed to overcome the financing issues. Jenkins says that he has a lot of cash deals, most using equity out of their permanent residence, to purchase their recreational property.

When asked how he chose this niche, he said, “It chose me, it just kind of fell in my lap. I like the people who are interested in these properties because they are kind of like campers - relaxed, laid back, down to earth and would drop anything they are doing to help someone.”

Green Glossary Getting Familar With Green Language

ALTERNATIVE ENERGY – Energy from sources other than fossil fuels (coal and natural gas), such as renewable sources like wind, sun, or running water.

CARBON FOOTPRINT – The total amount of carbon dioxide emitted over a given time by a person, organization, or state. Usually expressed in equivalent tons of carbon dioxide (CO2).

DAYLIGHTING – Natural daylight introduced into interior spaces and controlled specifically to reduce levels of electric lighting, minimize glare and optimize lighting quality.

ENERGY STAR® – Introduced in 1992 by the United States Environmental Protection Agency as a voluntary labeling program to identify and promote energy-efficient products to help reduce greenhouse emissions. Originally designed for computers and monitors, it expanded to include office products, major appliances, lighting, home electronics and more. New expanded programs now also include complete buildings such as homes, commercial and industrial buildings.

GREEN POWER – Generally this is the production of electricity from environmentally friendly sources such as photovoltaic, geothermal, hydroelectric, biomass, hydrogen fuel cells, ocean energy and wind power. Many homes and businesses are taking advantage of solar systems that not only make electricity but also heat water and interior environments.

GREENWASHING – The practice of making an unsubstantiated or misleading claim about the environmental benefits of a product, service, technology or company practice.

GREYWATER – Waste water from lavatories, showers, baths and sinks only.

This water can be stored in special equipment and may then be used to water lawns, gardens or other relatively benign non-potable uses such as groundwater recharge. Water from toilets is called black water; it must be properly drained to the sewer or septic system.

LEED – The acronym for "Leadership in Energy and Environmental Design." The LEED program was developed by the U.S. Green Building Council as a system for rating new and existing commercial, institutional and residential buildings. It evaluates the overall environmental performance during the lifecycle of a building and provides a tangible methodology for analyzing the standards of a green building.

RECYCLING – A series of activities including collection, separation and processing by which products or materials are recovered from the solid waste stream for use in the form of raw materials in the manufacture of new products other than fuel for producing heat or power by combustion.

RENEWABLE ENERGY – Energy harvested from sources that are not depleted when used, typically causing very low environmental impact. Examples include solar energy, hydroelectric power and wind power.

SUSTAINABILITY – A way of working and living that balances immediate needs for commerce, living, habitation, food, transportation, energy and entertainment with future needs for these resources and systems as well as the liveliness and support of nature, natural resources and future generations.

SUMMER 2008 KENTUCKY REALTOR® 27

A Day in the Life of...

Involved REALTORS® Steve Hiland REALTOR®/Broker/Owner KAR Delegate Body 14 Years in Real Estate

Patricia Edison, ABR, GRI REALTOR®/Broker/Owner KAR Region 3 Director 7 Years in Real Estate

T

wo REALTORS®, each with different levels of experience in the real estate industry, explain why they have chosen to actively participate in the industry that provides for them and why it is important for all REALTORS® to step up and make a difference through volunteer service.

board. I wanted to know as much about the who, what, when, where and why of the business as possible. The Rookies teacher told the class that each of us should fill out one of the forms to be put on one of the committees at the board. I did just that and within one year, I was placed on the Community Relations Committee.

What made you want to become a REALTOR®?

Steve Hiland: I felt that belonging to a professional business organization would help me grow as a real estate agent and help to keep me motivated. I found that KAR and NAR were just such organizations.

Patricia Edison: I worked for a builder as an administrative assistant which included working with subcontractors, compliances officers, etc. Then I went to work for a real estate investment company who later sold the garden home portion of their business and I was going to be out of a job. One of the executives I was working with said she was going to get her real estate license. She convinced me that I would be good at it so, I decided to go for it. So after years of working with properties in one form or another, I decided to become a REALTOR®.

After becoming a REALTOR®, how long did it take you to get involved and in what areas?

SH: I didn’t become active until I bought my own agency and obtained my broker license. After attending a few KAR meetings, I realized that taking an active part would help me and my business grow, help keep me motivated and set a good example for my agents and fellow REALTORS®.

PE: Approximately one week after getting my license, I signed up for a Rookie REALTOR® Class. That was the absolute best thing I could have done for my career. I signed up for every free class offered by my

28 www.kar.com

What areas of the organization are you the most passionate about?

SH: Politics and education. I really enjoy visiting with our state and federal politicians and talking with them about what’s important to REALTORS® and our local communities and encouraging them to support our issues. I feel that education is a key to becoming a more successful and more professional REALTOR® and I work hard at the local and state levels to increase educational opportunities for REALTORS®.

PE: First-time homebuyers and their process. My first client told me that she was approved for a loan to purchase a home and that she would receive incentive money for completing classes. I went with her to her class to find out what it was all about. Once at the class, the instructor asked me if I would consider helping their organization to educate their clients about sales contracts and purchasing a home. I agreed to offer my services and I still do those classes today.

They are very rewarding.

What is your favorite part of being involved in the REALTOR® organization?

SH: The state and national meetings and conventions where I get to see old friends make new ones, pick up current business information and view new products and technology. I also enjoy serving on and chairing various committees.

PE: Networking is my favorite part of being involved with the REALTOR® organization. We never know how small things such as stuffing Christmas stockings, wrapping presents for Dream Factory Kids or putting labels on water bottles for a Cancer Run can bring us closer together as a group. It takes us away from the daily grind and refreshes us.

Name the biggest highlight that has come as a part of volunteering in the REALTOR® organization.

SH: Serving as the Federal Political Coordinator for First District Congressman Ed Whitfield.

PE: My biggest highlight lies somewhere between being Rookie of the Year for GLAR, graduating from LeadershipKAR and my inauguration as Region 3 Director for KAR. Has being involved helped improve your business?

If so, how?

SH: Yes! I’ve picked up lots of information about current business practices and new technology which I’ve passed on to my agents.

PE: Of course! Great relationships are formed in these groups and getting to know each other as fellow REALTORS® can be helpful. I used to sell quite a bit in counties other than my own. I refer these clients and I have received referrals as well.

What would you say to a REALTOR® who is thinking about getting involved but hasn’t yet taken that first step?

SH: Every REALTOR can benefit from the educational and networking opportunities that will help them grow their business. ®

Outside of your participation in the REALTOR® organization, what is your biggest hobby?

SH: I enjoy golf with my friends.

PE: I am involved in league bowling.

Are you involved with other organizations?

SH: I’m the Governmental Affairs Director for two local REALTOR® organizations, on the Board of Directors for Kentucky Western Waterlands, the Lyon County Chamber of Commerce and the Western Kentucky Regional MLS. I also do some volunteer work for my church.

PE: I am a Sunday school teacher. I also serve on the Home Expo Committee with the Louisville Urban League.

Volunteers are often referred to as superheroes.

Who is your favorite superhero?

SH: I don’t consider volunteers to be superheroes.

I feel everyone should be willing to give back to the organizations they benefit from and to those groups and individuals who genuinely need their help.

PE: My favorite superhero is the group of volunteers at GLAR, especially the trail blazers that give of their time and support to those of us just coming on today.

Last question, what is the best piece of advice you’ve ever received?

SH: Practice the “Golden Rule” and always strive for PMA (a Positive Mental Attitude) in everything you do and say.

PE: You should be selling real estate!

PE: Call your local board and ask to speak with the person in charge of their various committees.

SUMMER 2008 KENTUCKY REALTOR® 29

From the Helm M a ke it a w a y o f l i f e Standing outside the nation’s capitol building, KAR’s Executive Vice President Susie Helm, along with dozens of KAR members, spent several days at the recent NAR Midyear meeting talking with Kentucky legislators about issues important to the real estate industry.

bout a year ago, KAR Member Services Coordinator Becca Baxter came to me and asked if we had a recycling program. We didn’t.

She offered to set it up for us in the office. So Becca took the initiative to contact the City of Lexington to find out about recycling pick up. She ordered the needed containers and once a week, Becca takes the recycling out to the curb, and brings it back in at the end of the day. Then, Becca designated certain trash cans for recycling and put nice recycling logos on those trash cans and she set up the separate recycling trash cans in various parts of the office. Paper, aluminum cans, glass and other recyclables go in one trash can, and other trash in the other cans.

Then we moved, and Becca didn’t let the program drop. She made sure it continued in the new temporary location. And again, she did the work. Setting up the recycling cans where she knew they would be most used (by the copier) and making sure it gets out each week.

There was no extra credit, no days off, no extra pay or any other type of special recognition (except for the mention in this column). She did it, because she knows preservation of her earth was important.

You see, recycling is a way of life for Becca. She couldn’t imagine that we wouldn’t participate in a recycling program at the office (shame on us for not doing it these past several years).

Inspired by Becca, I looked up other ways we could help save the earth. And I found that while doing our part to help the planet, we can also help our wallets. So, being “green” and “saving green” can coexist. Here are some ideas: 1 Drink filtered tap water (if you don’t want it directly from the tap). You can save a lot of money by drinking tap water instead of buying bottled water. Plus, no trash!

2 Share rides to meetings. With the price of gas today, don’t be afraid to call up your fellow REALTOR® and share a ride to REALTOR® association meetings together. Better yet, call up three or four REALTORS®. Most cars hold four adults comfortably.

3 Replace your light bulbs with energy-efficient lights.

A

30 www.kar.com

4 Print on both sides of the paper.

5 Flip that switch to OFF. Save on your electric bill just by turning off the lights, computers and other office equipment when they are not in use, and especially overnight. In a typical home, 75 percent of electricity is used by products in standby mode.

6 Buy Energy Star. The US Environmental Protection Agency has a program called Energy Star that features energyefficient electronics and appliances that are better for the environment and save consumer’s money. When you Baxter need a new printer Becca KAR Member Services Coordinator or copy machine, consider upgrading to an environmental model.

Check out www.energystar.com for more information.

7 Create an office “green team” to find ways to recycle and save money.

8 Green your coffee. What? Instead of buying coffee in a disposable cup, bring your own coffee mug and ask for your favorite coffee spot to “fill it up.”

Perhaps they will give you a discount for using fewer resources, but if not, at least you are reducing the number of cups thrown away daily. For example: let’s say that one-half of the Kentucky REALTOR® members purchase one cup of coffee a day – that’s 5500 cups of coffee a day. Do the math … and bring your own cup! (By the way, that’s more than two million cups per year.)

I have been recycling at home for over a decade, but I never forced the issue at the office. So, thank you, Becca, from all of us, for reminding us to make it a way of life at home and at the office.

Susan W. Helm, RCE KAR Executive Vice President