Kyrealtorwinter08 by Kentucky REALTORS

Kentucky

REALTOR 速

WINTER 2008

A publication of the Kentucky Association of REALTORS速

DIGITAL PHOTOGRAPHY A GUIDE TO THE BASICS Blogging Tips Tax Law Changes Online CE

Contents

Volume 2, Number 2, Winter 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®

Digital Photography

Tax Law Changes

Online CE

Blogging Tips

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

Marketing/Communications Director Hunt Cooper hcooper@kar.com

Tools You Can Use

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

Legal Update

KAR members should always send address changes to their local board/association first. Subscription rates: $10 per year (included in dues) for members, $25 per year for nonmembers.

Kentucky REALTOR® (USPS 024-933) is published quarterly (Fall, Winter, Spring, Summer) by the Kentucky Association of REALTORS®, 161 Prosperous Place, Lexington, KY 40509. Periodicals postage paid at Lexington, KY. POSTMASTER: Send address changes to Kentucky REALTOR®, 161 Prosperous Place, Lexington, KY 40509. All articles represent the opinions of the authors and do not necessarily represent the opinions of Kentucky REALTOR® or KAR and should not be construed as a recommendation for any course of action regarding financial, legal or accounting matters by KAR or Kentucky REALTOR® and its authors.

Government Affairs

KREC Information

Local Association News

Housing Stats

Community Profile

From the Helm

Code of Ethics

A Day in the Life of...

WINTER 2008 KENTUCKY REALTOR® 3

KAR News 2009 KAR Election Results

2008 KAR Awards

President-Elect John Smither (Lexington) Treasurer-Elect Kevin Farris (Elizabethtown) Region 2 Director Steve Cline (Bowling Green) Region 4 Director Ann McDonald (Lexington) Region 6 Director Norman Jones (Pikeville) At-Large Director Carl Adams (Paducah) At-Large Director Linda Sparrow (Danville) At-Large Director Janie Wilson (Fort Mitchell)

R E A L T O R ® o f t h e Y e a r - John J. Weikel II (Greater Louisville AOR)

Jeff Smith (Fort Mitchell) will serve as the 2009 President. Existing members serving on the Board of Directors will be Immediate Past President Robert Damron (Pikeville), Treasurer Santosh Bhatt (Louisville), Region 1 Director Larry Gillette (Hopkinsville), Region 3 Director Patricia Edison (Louisville) and Region 5 Director Jennifer Harris (Florence). The six remaining At-Large Directors for the state include Charles Ballard (Louisville), Paul Fox (Cold Spring), Gale Fulton (Lexington), Ron Hughes (Paducah), Ashley Trautner (Frankfort) and Nelson Weaver (Somerset).

D i s t in g u is h e d S e r v i c e A w a rd - David P. Schoepf (Northern Kentucky AOR) N at S a nd ers Ed uca to r o f th e Ye ar - Woodrow Wilson (Lexington-Bluegrass AOR) Community Service Awards Large category - Greater Louisville Association of REALTORS® Medium category - Madison County Board of REALTORS® Small category - Kentucky-Barkley Lakes Board of REALTORS® Paul Kendall Membership Awards First Place - Murray-Calloway County Board of REALTORS® Second Place - Old Kentucky Home Board of REALTORS® Third Place - Hopkinsville-Christian County Board of REALTORS® A mm er ma n A t te nd a nc e A w a rd - Northern Kentucky Association of REALTORS®

Barbara Flannery (London), Donnie Sims (Bowling Green) and Alvena Stanfield (Florence) were elected to serve as At-Large Delegates on the leadership team in 2009. Joe Simms (Louisville) was elected to serve as a Director of the National Association of REALTORS®.

Jeff Smith, Fort Mitchell 2009 KAR President

John Weikel 2008 REALTOR® of the Year.

David Schoepf 2008 Distinguished Service Award.

KAR Bylaws Amendments This serves as official notice of proposed Bylaws amendments to be voted on by the general membership of the Kentucky Association of REALTORS® at the membership meeting to be held in Frankfort, KY on February 12, 2009 immediately following the Delegate Body meeting (see www.kar.com for meeting details). The following are the substantive changes to the Bylaws for the general membership’s consideration: (Strikethrough text indicates text to be deleted. Underline indicates text to be added) ARTICLE V: Delegate Body, Section 2 Insert the following text in reserved item (G): (G) Any REALTOR or REALTOR-ASSOCIATE member in good standing shall be eligible to serve on the Delegate Body. Article VI: Board of Directors, Section 8 Add text to existing Section 8 which describes removal of a director by the remaining Directors on the basis of two (2) consecutive unexcused absences. The Delegate Body may remove any Director with 2/3 majority vote. A copy of the proposed motion to remove a Director shall be included with the notice convening the Delegate Body meeting. The Director’s position shall be vacated if a quorum of the Delegate Body is present at the noticed meeting and a 2/3 majority of the Delegates present approve the motion to vacate. ARTICLE VI: Board of Directors, Section 1 (C) (2) Delete item (2) text as indicated below and replace with the following text: (2) Three At-Large Directors shall be elected each year by all registered attendees of the Annual Convention in accordance with Article V, Section 1(A). The term of office for At-Large Directors is three (3) years. (2) Three (3) At-Large Directors shall be elected by the membership during each convention, held in conjunction with the regular annual membership meeting, to serve terms of three (3) years each, such that there shall be nine (9) At-Large Directors serving at all times.

4 www.kar.com

President’s Message

Invest in YOUR Future

Fellow Members,

would first like to thank Robert Damron for his Association leadership in 2008 and for the onthe-job training he has given me over the past several months. As we enter one of the most economically trying times in the history of the industry and for the Kentucky Association of REALTORS®, now is a great time to invest in YOUR future. Take a GRI, CRS, CCIM course or any elected course you may enjoy. Earn a designation and further your education. A deep understanding of the industry will pay off more than you can imagine. KAR will continue to take a hit in membership this year and we will tighten our belts once again. It may come to a point that we are forced to dip into reserves in 2009. Many of you have heard me say there are only two reasons you should have reserves of member dues in an Association: Reason #1 – to pay unexpected expenses (this year was for the KAR building) and Reason #2 – to continue to provide a high level of services to our members in down times. Your leadership team recently attended the National Association of REALTORS® Annual Conference and Expo in Orlando. It was during a session of this 100th anniversary celebration where NAR’s 2009 President, Charles McMillan, was quoted as saying:

“REALTORS® must build a bridge to the future, over the chasm of today’s market challenges, so that tomorrow’s real estate industry will be empowered to move forward into its second century.” As we move forward into the next hundred years, my hope is that every member of KAR listens to these words and takes action to elevate themselves and this industry to a higher level. Through hard work, anything is possible.

Jeff Smith, 2009 KAR President

I am blessed and honored to be your president in this 87th year of our Association. I encourage all of you to become involved in your Association – attend meetings, join a committee, take CE courses, run for an office – whatever you choose, make a difference. Join KAR this February as we head to Frankfort to continue our support of the political process and we fight to protect property rights for all property owners here in the Commonwealth.

Jeff Smith 2009 KAR President

UPCOMING EVENTS KAR Legislative & Business Meeting Capital Plaza Hotel Frankfort, KY February 10 – 12

KAR Annual Convention & Expo Galt House Louisville, KY September 29 – October 1

NAR Midyear Meeting Washington, DC May 11 – 16

NAR Conference & Expo San Diego, CA November 11 – 16

KAR Summer Business Meeting Lake Barkley Cadiz, KY June 16 – 18

KAR Leadership Conference Dates and times TBD

Visit www.kar.com for meeting information.

WINTER 2008 KENTUCKY REALTOR® 5

Tools You Can Use

Marketing Minute

Try Cozi, a free web service that helps families manage crazy schedules, track shopping and to-do lists, organize household chores, stay in communication and share memories all in one place. Every family is different, but they all have one thing in common: they’re crazybusy and Cozi was designed to make it easier to manage everything that has to be done.

Creative Way to Market Yourself and Your Listings MOO is a printing company that creates unique specialty products with custom photography. The most unique (and first product) called MiniCards are about half the size of a normal business card and come complete with your own photos, designs and text. They come in boxes of 100 with the option of having a different image on every one. Each card also comes with the option of providing text on the reverse side. Great for marketing each of your listings, personal blog or social network as well as your personal brand. The company also produces normal business cards, sticker books, postcards, note cards, holiday cards and other items that can be customized for you and your business.

Signing up is free and easy! After creating your account, you will first need to customize your features. You’ll set up a household name, and add contacts. That’s it. You’re ready to start organizing! The actions you can take are: type an appointment in the calendar, add items to your shopping list and jot down an entry in your family journal. It also has mobile and Outlook syncing to keep everyone on the same page. The only downside (if you want to call it that) is that you will see advertisements or other information that pertain to family needs. Some are beneficial such as links to recipes or dinner suggestions; others are simply banner ads for products and services. With families becoming more and more technological (and hectic) these days, this Web site provides a great way to keep your family organized. Give it a try!

6 www.kar.com

Consolidate Your Persona Retaggr allows you to create a virtual business card that you can put almost anywhere on the web, and share all of your web activity, in one organized location. Your profile card contains any information you wish to share because it’s all customizable. It acts as your portable interactive Web 2.0 profile by consolidating your online presence, i.e. social networking profiles such as Facebook, LinkedIn and Myspace, into an interactive online social and business card. It allows you to display content like recent tweets from Twitter, blog posts and photos right in your card. In fact, any widget you can find on the web can be incorporated into your retaggr profile. Your retaggr profile can be used as your email signature which allows your clients, friends and family to know more about the things going on with you.

Use Your Camera Phone as Your Digital Photographic Memory Almost every cell phone model now includes a built-in camera, and they’re good for more than just snapping pics of your friends out at the local watering hole having a good time. Use your phone’s camera and memory card to capture: • the spot where you parked • the label on a bottle of wine your spouse loved • the price on a new gadget to look up online • an amazing meal you’d like to try to cook at home. Another quick tip for cell phones – most are also equipped with a voice recorder. Use this feature much the same way – to leave personal notes and reminders when you’re in a hurry so you won’t forget to add them to your to-do list later. Distributing Video Made Easy Real estate property videos are becoming increasingly common in the marketplace. The trouble is the time it takes to upload a video to multiple sites (let alone one). TubeMogul, an online video distributor that also provides analytics, takes care of the hassle for you. It serves those who need independent information about video performance on the Internet and automated upload to the Web’s top video sharing sites including YouTube, Google Video, MySpace, AOL, Yahoo!, MetaCafe, Revver and many more. TubeMogul’s analytic technology aggregates video-viewing data from multiple sources to give publishers improved understanding of when, where and how often videos are watched, track and compare what’s hot and what’s not, measure the impact of marketing campaigns, gather competitive intelligence, and share the data with colleagues or friends.

Bits and Bytes Laptops tend to lose their charm quickly when you’re constantly looking for the nearest power outlet to charge up. How do you keep your battery going for as long as possible? Here are easy ways to stay charged: Defrag regularly - The faster your hard drive does its work - less demand you are going to put on the hard drive and your battery. Make your hard drive as efficient as possible by defragging it regularly. (but not while it’s on battery of course!) Dim your screen - Most laptops come with the ability to dim your laptop screen. Some even come with ways to modify CPU and cooling performance. Cut down on programs running in the background All these add to the CPU load and cut down battery life. Cut down external devices - USB devices (including your mouse) & WiFi drain down your laptop battery. Remove or shut them down when not in use. Run off a hard drive rather than CD/DVD - As power consuming as hard drives are, CD and DVD drives are worse. Even having one in the drive can be power consuming. Keep the battery contacts clean - Clean your battery’s metal contacts every couple of months with a cloth moistened with rubbing alcohol. While you’re at it, do not leave a charged battery dormant for long periods of time. Once charged, you should at least use the battery at least once every two to three weeks. Also, do not let a Li-Ion battery completely discharge. Hibernate not standby - Although placing a laptop in standby mode saves some power and you can instantly resume where you left off, it doesn’t save as much power as the hibernate function does. Keep operating temperature down - Your laptop operates more efficiently when it’s cooler. Clean out your air vents with a cloth or keyboard cleaner. Don’t multitask - Do one thing at a time when you’re on battery. Rather than working on a spreadsheet, letting your email client run in the background and listening to your latest set of MP3’s, set your mind to one thing only. Go easy on the PC demands - Passive activities like email and word processing consume much less power than gaming or playing a DVD.

Tips excerpted from the Friedbeef’s Tech blog

WINTER 2008 KENTUCKY REALTOR® 7

Legal Update

The ABC’s of Kentucky Business Entities Doug Martin is Legal Counsel for the Kentucky Association of REALTORS® and is a member of Murphy & Martin, PLC in Lexington, KY.

EALTORS® are constantly faced with a wide range of Kentucky business entities: • sole proprietorships • joint ventures • general partnerships • limited liability partnerships • limited partnerships • limited liability limited partnerships • corporations • nonprofit corporations • limited liability companies • nonprofit limited liability companies

REALTORS® are frequently the first ones on the scene to spot trouble, and having a good working knowledge of common business entities can sometimes make the difference in a successful closing. One of the main ways one entity is different from another is whether owners have “limited liability” – if business owners can avoid personal liability for the obligations of their business. Other important differences are whether the business has a board of directors or officers, whether the business has owners with limited rights, and whether the business must register with the Secretary of State.

Sole Proprietorships Sole proprietorships are the most common form of doing business – one person sells a product or provides a service to another. A sole proprietor is a person that works for himself or herself (i.e., a lawyer, accountant, doctor, freelance photographer, carpenter, roofer), and who has not otherwise registered with the Secretary of State.

8 www.kar.com

In a sole proprietorship, no legal entity needs to be created and no assets are required to be contributed to form a separate company. The business itself is not registered, although sole proprietors using business names must file a “certificate of assumed name” with the Secretary of State. Because sole proprietors are simply individuals operating a business, contracts involving sole proprietors should usually be written in name of the individual, and not in the “assumed name” used for the business.

Joint Ventures A “joint venture” is a common enterprise undertaken for mutual benefit and for a particular transaction. A joint venture is not a type of business organization, but a common enterprise for a limited purpose. Joint ventures can take on various business forms. For example, a nonprofit hospital and a physician partnership might organize a new LLC to own a medical office building. In this situation, the joint venture will operate as a limited liability company, even though one party is a nonprofit corporation and the other is a general partnership.

General Partnerships General partnerships are essentially sole proprietorships with more than one owner. A general partnership is not required to register with the state unless it uses an assumed name. Partnerships are defined mainly by the agency relationship that exists among its partners: Each partner is an agent of the partnership for the purpose of its business. An act of a partner... for apparently carrying on in the ordinary course the partnership business . . . binds the

partnership, unless [1] the partner had no authority to act for the partnership in the particular matter and [2] the person with whom the partner was dealing had notice that the partner lacked authority. Real estate transactions with general partnerships are tricky. If the general partnership has filed a “statement of partnership authority” with the Secretary of State, then the general partnership may hold title to real property in the partnership name listed in the “statement of partnership authority.” If no such statement has been filed (and the partnership is not otherwise a limited liability partnership), then the general partnership can only hold title to real property in the partnership name that includes the names of each of the partners. Such a name might be – “John Doe and Ted E. Bear, a general partnership, doing business as Kentucky XYZ.” The safe rule in dealing with general partnerships – as with most closely held companies – is to make everyone sign the purchase contract. The closing attorney is responsible for addressing other legal issues. A “limited liability partnership” is a general partnership in which the partners have filed a “statement of qualification” with the Secretary of State. This provides the partners with partial limited liability while keeping the flexible business structure of a general partnership.In almost every other way, limited liability partnerships function the same as general partnerships.

Limited Partnerships Limited partnerships are partnerships formed by two or more persons with two separate classes of partners – general partners and limited partners. General partners have all the rights, duties and obligations of partners in a general partnership. The limited partners, however, are not allowed to participate in control or management, may not contribute services, and generally have liability only to the extent of their contribution. A limited partnership can own real estate in the name stated in its certificate of limited partnership filed with the Secretary of State. This makes limited partnerships easier to work with than general partnerships. While limited partners are not allowed to sign legal documents, it is prudent to require that all of the general partners sign the purchase contract.

A “limited liability limited partnership” is simply a limited partnership whose certificate of limited partnership states that the limited partnership is a limited liability limited partnership. This gives the general partners some degree of limited liability protection which they do not have as simple limited partnerships.

Profit & Nonprofit Corporations A corporation is a business organization in which the business is a separate and distinct entity from its owners. Corporations have rigid, formalistic structures that must be observed to preserve shareholder limited liability status. Corporations are managed by their directors and officers, who do not have to be shareholders, and directors are selected by the shareholders. Nonprofit corporations operate like “for profit” corporations, except that the business conducted by nonprofit corporations is restricted to its tax exempt purposes, such as a charitable or educational organization or a business league.

Limited Liability Companies Limited liability companies are the Swiss army knives of Kentucky business forms, and most closely held companies are now organized as LLCs. Members of LLCs have limited liability from general business obligations. LLCs are very flexible, and can be organized to mimic virtually any other type of business entity. For example, an LLC can be set up with a board of directors and officers like a corporation, or voting and nonvoting members like a limited partnership. LLCs come in two main varieties – “member managed” and “manager managed.” A member managed LLC operates like a partnership, where all owners vote in proportion to their ownership. A manager managed LLC operates like a limited partnership, where the managers exercise most of the control and members generally do not vote. In 2007, Kentucky revised its LLC statute to allow nonprofit LLCs, which operate like normal LLCs but with a nonprofit purpose similar to nonprofit corporations. Again, the safe rule for dealing with LLCs – get everyone to sign the purchase contract.

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

WINTER 2008 KENTUCKY REALTOR® 9

Feature Story

Digital Photography: A Guide to the Basics by Hunt Cooper, KAR Marketing/Communications Director

A few good pictures can lead to a quicker sale. Here are the basics you need to know about camera choices, options and accessories.

few years ago, a digital camera was viewed by some in the industry as a competitive edge. Nowadays, the digital camera is one of the most common tools a real estate agent possesses. It is also probably an afterthought for many and when asked, most agents probably respond with a quick, “Yeah, I have a couple of ‘em.” For any given listing, you probably take several photos of each property, without much thought and then print them, e-mail them to clients and the local MLS, upload them to your Web page and the list goes on. Now that you are thinking about all the ways you use pictures in your business, you understand the importance of equipping yourself with a digital camera that’s suited to meet the various demands of real estate. And with today’s competitive environment and the expansive inventory of homes on the market, good photography can help your listing stand out from the crowd. Digital cameras are being sold just about everywhere, from the big box superstores found in most towns across America to the many online retailers popping up on the web every day. And the cameras themselves have more features than any one human could ever use in a lifetime, ranging in prices from under $100 to several thousand depending on the brand you choose and the level of quality you

10 www.kar.com

want to purchase. As technology continues to get better, even the smaller and more reasonably priced cameras come with more megapixels, larger LCD screens, video options and enhanced zoom features. With all the decisions to be made, what features do you have to have and which ones can be a tradeoff? Size Does Matter When it Comes to Megapixels When digital cameras first made their debuts, one of the easiest and quickest ways to determine “quality” was in the number of megapixels (MP) it included. Megapixels are the number of dots (a.k.a. pixels) a camera can capture per image and are referred to as either dots per inch (DPI) or pixels per inch (PPI). What this means in basic terms is the higher the megapixel, the better the picture quality. Most cameras developed, whether they are low or high end, usually come with at least 4 or more megapixels, which is more than enough for most real estate related functions. Even as important as megapixels are, cameras today see overall picture quality affected by other technological advances, so it pays to take into consideration other factors before plunking down a small fortune for too many extras. If you are unsure of what you need in a camera, make a list of requirements and talk to a qualified professional.

Many people think just by looking at the same megapixel camera in two or three models with cost being the only difference, the cheaper product is the way to go, using the rationale, “I’m getting more for less, right?” This isn’t always the best option because there are so many other factors to consider. One being the ever allusive and consumer confusing zoom feature. All Cameras Zoom, Don’t They? Many people don’t realize that most digital cameras come with not just one, but two types of zooms – optical and digital. And when it comes to selecting a digital camera, optical zoom is the only one that matters. Why, you ask? Let’s examine, in simple terms, what each type of zoom really is. Optical zoom uses the optics (lens) of the camera to bring the subject closer, thereby resolution is not lost when scaling in towards the subject matter. This zoom is the truest form as it is similar to what you find in regular 35mm cameras: When you push the button to zoom in or out, physical lens elements move inside the camera, to achieve the desired effect. Digital zoom, in a sense, is not really zoom at all in that this “zoom” crops a portion of the image and then enlarges it back to size, to what the camera thinks it should look like. You lose quality when you do this - your images will tend to be more pixelated than the same image taken with the optical zoom feature. Most digital zoom outcomes can be made using the same features found on most photo editing software. And remember, since real estate photography takes place in a variety of spaces such as the cramped quarters of a spare bedroom or bathroom, a long, narrow hallway, highlighting a specific home feature or the ever popular outside, full house view, a camera with an outstanding zoom is a musthave to get top quality shots to impress buyers. Memory Makers It’s not uncommon for digital cameras to come with a small amount of internal memory, enough to store a handful of photos but not enough to store an entire listing’s worth. Therefore, a companion purchase to the

camera itself should be a memory card with adequate capacity. Cameras today can come with one of several options including SD cards, compact flash (CD) cards or a Memory Stick depending on the model you choose. The more memory on the card, the more photos it can hold. For real estate professionals who take a fair share of pictures, the general rule should be the more memory, the better. Memory cards, given recent improvements, can hold up to or exceeding 32GB (or as little as 16MB). You should always buy the largest card you can afford so you have a seemingly endless supply of space. Typically, with a 5MP camera on the normal setting, plan on being able to take half as many pictures as the capacity of the memory card. For example, a 512MB camera should hold about 250 or so pictures. When I t Comes to Cam er as, Is Bi gger Al ways Better? The best way to answer this question is to first understand exactly what you are going to use the camera for. Are you using it primarily for pictures to use on websites and in your advertisements or are you snapping photos to market high-end homes in a upscale boutique magazine? The difference can help make your decision easier. Digital cameras come in so many sizes it could take years to investigate them all. The biggest difference comes in whether you want a compact camera with limited moving parts, a larger single lens reflex (SLR) model that uses interchangeable lenses and flash assemblies or (Continued on page 12)

WINTER 2008 KENTUCKY REALTOR® 11

Feature Story something in between. The newer, more modern compact cameras are small enough to carry in your pocket, briefcase or purse and provide ample amount of power to get the job done. The higher end cameras have more features than even the most sophisticated professional could imagine, but are great choices when you need top of the line images taken at various distances and angles and don’t mind the bulkier size. For most real estate professionals, a nice compact camera will suffice. Just make sure the camera you choose has enough megapixels and sufficient zoom to make your pictures shine. What Are You Looking At? Everyone can remember the good old days when you had to hold the camera up to one eye and close the other to see what in the heck you were shooting. That was before digital cameras and the great invention of the LCD screen. The LCD is the window on the back of the camera that allows the user to see camera features as well as displays the pictures stored on the camera. To increase viewability and save your eyesight, look for a camera with a large LCD screen. Having a large LCD helps in many ways, especially when taking real estate shots. The increased size of the screen allows you to review shots immediately so you know exactly what image was captured and retake the picture if it isn’t what you expected. It also allows you to use the camera, if needed, as a presentation vehicle for clients to see pictures of a particular property. Play It Forward Another great feature with many of the digital cameras today is they come with a movie mode built-in, allowing you to record movie clips while shooting still shots. Having movie clips as a part of your digital camera gives you the flexibility to decide how you want to market a certain property. In today’s high-tech world of online video, many real

estate professionals have the ability to use video in their marketing presentations i.e. video tours on numerous websites and with many MLSs. Instead of being limited to showing prospective buyers still shots of individual rooms, agents can now present them as a live walkthrough of the entire property. When choosing a camera, selecting one that can record video is usually not high on the list, however, there are some things to keep in mind. Make sure the resolution you select will work with the media you will be using. Some models produce low grade, grainy videos, which are unusable practically anywhere. If you are going to produce a lengthy property walk-through without breaks, select a camera that does not limit movie length and will record as long as there is memory space available on the card. I Have the Pictures. Now What? Once you shoot a property and have dozens, possibly hundreds, of pictures, you may ask yourself, “Now what do I do?” There are many ways to organize all these images. First of all, you want to take them from your camera to your computer to have them saved on your hard drive. Instead of storing them on your internal hard drive, some professionals choose to utilize an external hard drive or thumb drive that can be transported from one computer to another without much hassle. Once there, it seems as though there are an endless supply of photo management programs from which to choose. Your computer probably came equipped with a program or two that can be used to help organize your shots and many companies offer programs, some of which can get pricey. Along with several online software programs that offer photo management solutions, Google has a program called Picasa which can help organize your photos and best of all, it’s free. With a little research, you will find the one program that will suit your needs. (Continued on page 29)

12 www.kar.com

AUTO

HOME

LIFE

BUSINESS

A MEMBER SERVICE

WWWsKYFBsCOM

Last time we checked, bad weather wasn’t known for keeping business hours. Weather is unpredictable, but your insurance agent shouldn’t be. That’s why Kentucky Farm Bureau has agents in every county in the state, so you can count on a quick response and great service when you need it. This commitment has helped us grow into the state’s largest property and casualty insurer. So if you need home, auto or business insurance give us a call or drop by. We’re there when you need us.

Tax Law

Recent Tax Law Changes Impacting Real Estate Ventures by Stephen M. Lukinovich, CPA, CVA

uring this very volatile year for our economy and specifically the real estate market, on July 7, 2008 Congress passed The Housing Assistance Tax Act of 2008 (“The Act”). The provisions in the bill enacted significant changes. The real estatespecific tax incentives focus on home ownership and affordable housing, while the offsets to these incentives are obtained from a range of sources. Quick highlights of 2008 tax law changes: • Tax credit of up to $7,500 for first-time homebuyers, to be repaid over 15 years. • Additional property tax deduction for people who don’t itemize. • Reduced home sale exclusion under certain circumstances. • 15 Year Qualified Leasehold Property, 50% bonus depreciation, effective January 1, 2008.

First-Time Homebuyers Credit The Act entitles first-time homebuyers, defined as not owning a primary residence in the past 3 years, to a temporary refundable credit equal to 10% of the purchase price of a home, up to $7,500. The new credit is effective for qualifying home purchases made on or after April 9th, 2008, and before July 1, 2009. The credit will be subject to a phase-out for taxpayers with a modified adjusted gross income in excess of $75,000. Unlike other credits, the first-time homebuyer credit must be repaid in equal installments over 15 years, essentially making it an interest-free loan from the government. The first-time homebuyer credit (see page 17) is by far the biggest tax break in the new law, weighing in at an estimated cost of $4.8 billion over ten years. However, that figure hides the credit’s true immediate impact since new homeowners are predicted to take this credit to an amount of $13.6 billion in 2009. The IRS is not giving the $7,500 credit as cash at closing. The individual must claim the credit on a

14 www.kar.com

2008 or 2009 tax return. However, a first-time buyer who purchases a principal residence in 2009 after filing a 2008 tax return has the option of filing an amended 2008 return to claim the credit. Purchasers should also investigate adjusting their wage withholdings or estimated tax payments for the balance of the year to account for the credit.

Additional Standard Deduction for State and Local Property Taxes This provision of the Act targets homeowners who claim the basic standard deduction, instead of itemized deductions, on their individual tax returns. Taxpayers who itemize their deductions may deduct state and local taxes paid, including individual income taxes, real property taxes, and personal property taxes. The Act gives homeowners a limited deduction up to $500 for state and local real property taxes by increasing the amount of their standard deduction.

Reduced Home Sale Exclusion Under current tax law, a homeowner may generally exclude from income up to $250,000 of a gain ($500,000 married couples) realized on the sale of a principal residence as long as the residence was owned and used for two out of the last five years. The general rule also allows for a partial exclusion if the ownership and use test is not met. The Act changes this general rule by excluding periods of “nonqualifying use” during the five-year period before a principal residence is sold. This provision applies to residences sold after December 31, 2008. Starting on January 1, 2009, homeowners who use their home as a vacation home or for rental for some time will no longer be able to exclude the portion of the gain allocated to such nonqualified use. Fortunately, any nonqualified use prior to 2009 does not count. Certain use is not treated as nonqualified use, including leaving the home vacant and temporary absences due to a change in employment, health, or unforeseen circumstances.

15 Year Leasehold Improvements The 15-year MACRS (Modified Accelerated Cost Recovery System) depreciation recovery period for qualified leasehold improvement property is extended 2 more years to apply to nonresidential real property placed in service beginning January 1, 2008 through December 31, 2009 as part of the most recent tax act, Emergency Economic Stabilization Act of 2008, signed into law on October 3, 2008. Qualified leasehold improvements acquired and placed into service during 2008 are also eligible for 50% depreciation. However, as it looks now, the 50% bonus depreciation will not be around for the year 2009.

Stephen M. Lukinovich, CPA, CVA, a partner with Chilton & Medley Certified Public Accountants in Louisville, began his career in public accounting in 1988. His professional emphasis is in individual and business income taxes with emphasis on real estate, partnerships, and S corporations; business transition consulting, including purchases and sales of closely-held companies, corporate reorganizations, and mergers and acquisitions; and state and local tax issues.

Retirement Plans for Real Estate Agents and Brokers All real estate agents and brokers should consider some type of retirement savings plan, whether it is a 401K, Simple IRA, or SEP Retirement Plan. The need for a retirement plan for highly profitable agents and brokers has become even more important. We have found that in certain circumstances Defined Benefit Plans have proven to create tax benefits to high income earners.

Summary Understanding and applying these two new 2008 tax law changes in the real estate market could be factors that set agents and brokers apart from their competition. Individuals rely on their agent to be a professional in their particular industry; so, without knowledge of these new tax changes agent/broker may be at a disadvantage. Taking the time to keep yourself updated on new tax law changes, by either consulting with a CPA or researching on your own could be extremely beneficial.

WINTER 2008 KENTUCKY REALTOR速 15

Government Affairs

Stimulating the Economy and the Housing Market

he National Association of REALTORS® (NAR) has proposed to Congress a four-point legislative plan to reinvigorate the housing market (see sidebar for details of the plan). NAR believes the plan will give a boost to the economy and help to calm jittery potential homebuyers. The NAR plan, which follows up on a previously approved federal “bailout” plan, features such consumer-driven provisions as eliminating the repayment of the first-time homebuyer tax credit and expanding it to all homebuyers, making higher mortgage loan limits permanent, pushing banks to extend credit to Main Street and prohibiting banks from entering into real estate. NAR President Richard F. Gaylord stated, “Housing has always lifted the economy out of downturns, and it is imperative to get the housing market moving forward as quickly as possible. It is vital to the economy that Congress take specific actions to boost the confidence of potential homebuyers in the housing market and make it easier for qualified buyers to get safe and affordable mortgage loans.” According to Joe Price, Vice President of Financial Services for Huff Realty, qualified buyers can still get loans regardless of bailout plan specifics, but the process may be somewhat different than in years past with more required documentation and the buyer having to put “a little skin in the game.” “There is money to lend today to qualified borrowers. As much as qualified doesn’t mean 800 credit scores and 20% down payments, it does mean those with a ‘credit worthy’ track record, i.e. consistent employment history, credible credit scores or alternative credit lines and some level of down payment – as little as 3% of the purchase price,” says Price. “I approach the assembling of a loan file as if I were going to court. I want to present as strong a case as possible so there is no doubt as to the outcome. Lenders must make sure the borrower has the means to make on-time monthly payments.”

16 www.kar.com

The NAR proposal takes into account what has already set in place with the federal bailout plan, the approval of $700 billion to stimulate the economy, but the method of allocating these funds is still in its infancy. However, $250 billion has been set aside by the Treasury to recapitalize banks instead of buying up their toxic securities, which may or may not end up helping homeowners and the real estate industry in the long run. NAR recommends Congress pass new housing stimulus legislation that includes the following priorities: 1. Remove the requirement in the current law that first-time homebuyers repay the $7,500 tax credit, and expand the tax credit to apply not only to firsttime buyers but also to all buyers of a primary residence. 2. Revise the FHA, Fannie Mae and Freddie Mac 2008 stimulus loan limit increases to make them permanent. The Economic Stabilization Act, enacted in February, made loan limit increases temporary, and subsequent legislation reduced the loan limits and made them permanent. This has broad implication for homebuyers in high cost areas. 3. Urge the government to use a portion of the allotted $700 billion that was provided to purchase mortgage-backed securities from banks to provide price stabilization for housing. The Treasury department should be required to use the newly enacted Troubled Assets Relief Program to push banks to: • Extend credit down to Main Street, making credit more available to consumers and small businesses; • Expedite the process for short sales; • Expedite the resolution of banks’ real estate owned (REOs) properties. 4. Make permanent the prohibition against banks entering real estate brokerage and management, further protecting consumers and the economy.

HOUSING AND ECONOMIC RECOVERY ACT OF 2008 First-time Homebuyer Tax Credit

First-Time Buyer Tax Credit: A Reason to Buy Now

H.R. 3221 Housing and Economic Recovery Act of 2008

FEATURE

The homeownership tax credit that the federal government created as part of the 2008 Housing and Economic Recovery Act, is a hard-won tool at your disposal to encourage your customers to jump off the fence and get into the home buying market. When you combine the tax credit with today’s continuing low interest rates, large selection of forsale inventory and low home prices, many of the pieces are in place for your customers to buy now. So what exactly is the first-time buyer tax credit? The chart to the right may help explain. And you can find more information about the credit by visiting the KAR website at www.kar.com/resources.asp?p=issuetracker.

Ten percent of cost of home, not to exceed $7500

Amount of Credit

Eligible Property

Any single-family residence (including condos, co-ops) that will be used as a principal residence.

Refundable

Yes. Reduces income tax liability for the year of purchase. Claimed on tax return for that tax year. Yes. Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). Phases out above those caps ($95,000 and $170,000, respectively).

Income Limit

First-time Homebuyer Only

Yes. Portion (6.67 % of credit) to be repaid each year for 15 years. If home sold before 15 years, then remainder of credit recaptured on sale.

Recapture

RPAC Contributors Due to the large amount of contributors to RPAC, the names are now be posted on the KAR website. However, a list of annual contributors to the Commonwealth Club and above ($99 and up) will be printed in the first issue of the following year. To see the list of RPAC contributors, please visit www.kar.com. Click on Legislative Affairs, then RPAC.

Yes. Purchaser (and purchaser’s spouse) may not have owned a principal residence in 3 years previous to purchase.

Impact on District of Columbia Homebuyer Credit

DC credit not available if purchaser uses this credit.

Purchases on or after April 9, 2008 Effective Date July 1, 2009 Termination

Interaction with Alternative Minimum Tax

Can be used against AMT, so credit will not throw individual into AMT.

2008 Kentucky General Election Results The 2008 General Elections for Kentucky are over and the results are in! During this election, KY RPAC supported 107 candidates – 18 Senators and 89 Representatives. Here are the breakdowns: • KY RPAC supported 18 Senators and supported candidates won 100% of the races. The support went to 10 Democrats (55%) and 8 Republicans (45%).

• KY RPAC supported 89 Representatives and supported candidates won 94% (84) of the races. The support went to 58 Democrats (65%) and 31 Republicans (35%). • In total, KY RPAC supported candidates won over 95% (102 out of 107) of the races during this election cycle. Democrats received 63.5% of the support compared to 36.5% of Republicans. The Kentucky REALTORS® Political Action Committee supports candidates who support important real estate industry issues and help fight for the rights of homeowners.

WINTER 2008 KENTUCKY REALTOR® 17

KREC Information Dealing with Short Sales and Foreclosures How to Handle With Buyers and Sellers

Lee Harris is General Counsel for the Kentucky Real Estate Commission

s a REALTOR®, you already know that there has been a steady rise in the number of short sales and foreclosures in the past year or so. These types of sales have caused great consternation for sellers, buyers and licensees alike. In many cases, there are extended delays in obtaining an acceptance or rejection of a written offer. Sometimes, these delays are as long as several months, depending on where the offer is sent. Frustrated buyers and buyers’ agents are often left in a lurch, helpless to speed up the process but wanting to pursue the property. Sellers’ agents feel likewise frustrated from the delays, as they have no control over when or how offers will be submitted for consideration. In other cases, there are frustrations borne out of the fact that the third-party entities will not always deal in written offers and try to negotiate verbally with buyers until the very end. In these instances, buyers oftentimes believe that they have a valid contract, when, in fact, they have nothing enforceable at all under the Statute of Frauds. The Kentucky Real Estate Commission, the National Association of REALTORS® and many local Associations have been working on trying to come up with reasonable solutions to some of these problems. However, there is no perfect answer. If a listing agent were to advertise that the seller is in dire financial straits, this could seriously affect the seller’s bargaining position. For example, under those circumstances, many buyers will make a lowball offer. In those situations, there is often not enough money on the table to cover mortgages, late fees, commissions and other expenses. If the listing agent does not let buyers know of a seller’s financial

18 www.kar.com

status, they may expend good money on inspections, appraisals and the like. If the contract cannot go through due to a foreclosure proceeding, how will the buyer be made whole by a seller who is in such financial difficulty? The Commission has addressed these questions and has said that listing agents must alert buyers to potential foreclosure or short sale issues, once the facts will affect the buyers’ ability to purchase the property. This will obviously occur at different times in different sales. If the seller chooses to disclose this information earlier, listing agents may certainly do so. Some agents are putting information in the Multiple Listing Service (“MLS”), such as “subject to thirdparty approval.” This type of language is also necessary if the mortgage company or lender must approve the terms of the purchase offer. There are several documents available to you on the KREC website. These documents are not required; rather, they are informational and, hopefully, informative for you and your clients. If you have any questions about these documents, please do not hesitate to contact the KREC’s Legal Department for assistance. As my wise father always said, “This too shall pass.” In the meantime, all players in the industry must use their collective wisdom to try to come up with creative and helpful suggestions for buyers and sellers in this market.

Education

Broker Summit

Online CE Now Offered Through KAR It is now possible to earn CE credit for your real estate license renewal without leaving your home or office. These courses may be entered and exited at your convenience. Once you register for a course, you can begin immediately. All course work must be completed in a 12-month period to earn CE credit. Your completion date of the course determines the year the credit will be issued. IMPORTANT: KREC’s continuing education calendar year is January 1-December 31. Two courses are currently available online: Environmental Issues in Real Estate 6 hours (3 hours law credit & 3 hours elective credit) - $50 Real Estate Finance Today 3 hours (3 hours elective credit) - $30

KAR’s second annual Broker Summit has been scheduled for April 23 & 24, 2009. Mark your calendars to attend the state’s premier training event at the Crowne Plaza in Lexington. Speakers will include names from the national stage who will present topics relevant in today’s challenging market (KAR’s website will be updated once confirmation of speakers is made). Following the conclusion of the Summit, attendees will be treated to complimentary tickets to Keeneland to extend their networking experience.

30 Under 30 in REALTOR® Magazine Are you or someone you know under 30 and a rising star in the real estate industry? NAR is looking for the next generation’s leaders for the 10th annual “30 under 30” feature, which will appear in the June 2009 issue of REALTOR® Magazine. If you or your candidate will be under age 30 as of May 31, 2009, please fill out the “30 under 30” application to be considered for this feature. Applications must be submitted by Jan. 12, 2009. Check out www.realtor.org/30under30 for more details.

If you want to find out more or to register, go to the KAR website > REALTOR® Resources > Education & Registration.

Join KAR on Facebook, LinkedIn and ActiveRain KAR has added additional sites to its list of social networking outlets. If you are not currently on these sites, getting started is easy. Just log on to www.facebook.com, www.linkedin.com or www.activerain.com and set up a profile. Joining is free and once you become a member, you can request to be added to the KAR groups. That’s all there is to it. To locate the KAR groups, use the search feature or go directly to the group: Facebook – www.facebook.com/group.php?gid=9244727021 LinkedIn – www.linkedin.com/groups?gid=1323837 ActiveRain – www.activerain.com/groups/kar

WINTER 2008 KENTUCKY REALTOR® 19

Industry Issues

Blog? Why Would I Do That?

Tips to Help You Get Started by Hunt Cooper, KAR Marketing/Communications Director

ou’ve heard about it. You don’t know exactly what it is but it sounds interesting. You want to give it a try because everyone says it will revolutionize your business and give you tons of leads. But what do you do and how do you get started?

out if blogging can truly help you in finding more clients, whether directly or indirectly. Next, you have to allocate the time to making it work. And finally, if you decide to take on this challenge, you will have to choose a blogging platform. There are more than a few out there so find the one that works best for you. Most people, after deciding blogging is right for them, struggle to get started for one reason or another. What do I name my blog, where can I find content and how do I encourage more people to read what I have to say are many of the obstacles that can stand in the way. Overcome those obstacles and build an effective blog with these tips:

What’s in a Name? Take naming your blog into consideration and give your blog a name you like, one that fits somehow with your business and its mission. Use words that describe what you do. The name you choose for your blog can also help your position in Google and other search engines. Include words or a phrase that you’d like to own – something that, when searched, will return your site as a top result. Don’t call it “Real Estate Blog” or something else similarly vague. Finally, don’t make the name too artificial or too long. Blogging is a fairly new phenomenon in the world of real estate. Some REALTORS® jumped on the bandwagon before blogging was even considered part of Web 2.0. Others waited to see how this whole thing would pan out. Even more are still wondering if this is a journey they want to embark on. Sure, blogging is cool and using this technology can make you stand out from the crowd but knowing how and why you are doing it can be a tough issue to overcome. First, you need to figure

20 www.kar.com

Find a Niche If you find it advantageous to do so, build your blog around a specific niche. Rather than trying to be all things to all people, tailor your blog to a specific demographic or geographical area. If you sell horse farms in Winchester or lake property in Somerset, try something related. Become the expert in that area.

Motivating Headlines You have only a fleeting moment to capture the reader’s interest. A good blog headline gets a reader’s

attention, tells them the story or part of it and draws them into visiting the site and reading the rest of the article. Be descriptive. A sharp first paragraph or lead can also help draw in readers as well. Using prime keywords in your headline and lead paragraph will help you drive more traffic to your site, especially if you are using an RSS feed for your blog.

Would You Like a Side of Writer’s Block With That? Let your personality shine through on your blog. If your journalism skills are not finely tuned, write about what you know. Visit other blogs, news sources and your market for inspiration. Begin by leaving comments on blogs you find interesting. In terms of writing style, blogs can be somewhat informal, however, you should write as if your readers were paid subscribers whose subscriptions were about to expire. Compel them to mentally resubscribe. Continue to give them something that makes them want to return over and over.

Make Connections Don’t be afraid of links. Include them – link to news articles, other real estate Web sites and blogs – in your posts. For most people, you are providing a valuable service by pointing them to important information in your area of expertise. They may leave your site for the moment, but they’ll come back because you will be a source of relevant information. Linking is about sharing your wealth of information with others. This sharing can increase readership and some of those folks will share right back meaning when you reference other blogs in your own blog, you may end up with a reciprocal link back to you. Also, set-up your blog so consumers can post comments on what you have to say. They allow consumers to develop a connection and participate with your blog and they give you a way to interact with potential clients. It is also a good idea to give people a way to subscribe to your blog by way of an RSS feed or email.

Don’t Be a Copy Cat Make your blog unique to you. Offer fresh, new content. If you find a post or other interesting content somewhere else, avoid copying it. Reference the content with a snippet of information and follow it up with a link to the information. This not only is the right thing to do, it can also boost your rankings with search engines. Just because blogging is not considered traditional media, you don’t want to fall into hot water over stealing someone else’s intellectual property. And, most importantly, spell check your posts, and read them for clarity. Do this at least once or twice before posting so you can avoid embarrassment later.

For more information on how to use blogs for your business, check out the NAR Field Guide to Marketing with Blogs at www.realtor.org/library/library/fg910.

From the 2007 NAR Member Profile: Only 2 percent of REALTORS® “frequently use blogs” compared with 88 percent who “rarely or never use blogs.” Only four percent of the survey respondents had blogs, however, 10 percent plan to have one in the future. The younger the REALTOR®, the more likely they are to have a blog (9 percent of those 29 or younger). The overall goal is to establish your blog as the go-to resource in your area so you can generate business now and into the future.

WINTER 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.

GLAR Launches New Ad Campaign for Open Houses In an effort to keep costs down for GLAR members as well as offer then increased exposure for their listings, the Greater Louisville Association of REALTORS® recently launched a new initiative that focuses on publicizing open house information to the consumer. The advertising campaign, called SeeItThisWeekend.com, directs consumers to search for open houses through the association website. Print ads are placed in the Sunday real estate section of The Courier Journal, Louisville’s most predominant local newspaper, and radio ads are running on various local stations. These ads are designed to direct consumers to visit SeeItThisWeekend.com, the official open house site of the Greater Louisville Association of REALTORS®. When the consumer enters this website address in their browser they will be directed to the open house results page of LouisvilleRealtors.com and are able to view details on all upcoming open houses. Response to this campaign has been very positive with GLAR members as well as consumers.

NKAR Celebrates the Opening of a New Home In the midst of a nationwide real estate market pullback, the Northern Kentucky Association of REALTORS® (NKAR) is making a major statement about the health and vitality of their market by opening the doors to a new, larger association headquarters. 22 www.kar.com

NKAR’s new home is on Turfway Road, in front of Turfway Park Race Track. The structure is a two-story building with approximately 20,000 square feet of office space – approximately four times larger than NKAR’s previous office in Edgewood. A grand opening ceremony at the new facility at 7660 Turfway Road was held on Thursday, August 28. NKAR leadership hosted a short program with an official ribbon cutting ceremony. A number of local and state government representatives were on hand for the event. “Tri-state residents continue to discover the appeal of living in Northern Kentucky,” said Jim Schack, president of NKAR. “Unlike some other local regions, Northern Kentucky has not seen as great as a decline in home sales or value. Our new Florence headquarters is a central location, enabling NKAR to continue providing the exemplary services home buyers and sellers have come to expect from our organization.”

Paducah Board of REALTORS® Help Renovate Landmark The Paducah Board of REALTORS® committed to help the Oscar Cross Legacy Committee by adopting the renovation project of Oscar Cross’s grandchildren stand in what the home that started the was the foyer of the home prior to Paducah Chapter of the renovations. Boys and Girls Club of America. The 101 year old home, one of the oldest in the city, belonged to Oscar Cross, founder of the BGCA-Paducah Chapter and the first AfricanAmerican to be on the National Boys Club Board. The house itself served as the birthplace for the Paducah Club. With the help of the city and a grant from the City Commission for $10,000, members of the

Legacy Committee purchased the home and started raising money to renovate the historical site. On one of the first days to prep the home in August, approximately 10 REALTORS® from the Paducah Board were present for the open house complete with food, ice cream and drinks and to look at the inside of the home before the project began.

REALTOR® Association of Southern Kentucky and Kentucky CRS Chapter Sponsor Rebuild Project The REALTOR® Association of Southern Kentucky took on a project in September that raised funds for the Kentucky CRS chapter to assist with Standing in front of Ms. Johnson and her new home, Steve the 2009 president of KY CRS Chapter, accepts a check from rebuilding of Cline, Lynn Caudill, member of RASK, as part of the fundraising for a home in the rebuilding project. Franklin, Kentucky. RASK raised money at their monthly meeting and donated a TV for raffle to the Kentucky CRS Chapter to assist with the “Johnson Project,” a rebuilding effort that took a total of 18 days to complete. The amount committed by the two groups was over $1,200, along with volunteer time. The entire community came together with volunteers from every profession – plumbers, electricians, contractors, painters, etc., – to construct a brand new home for Ms. Johnson. They tore down the entire home, removed the debris, leveled the lot and built an 850 square foot all electric ranch home furnished with new appliances, new furniture and a seeded lawn. She was out no expense.

Magazine Names Cumberland Gap As No. 1 Fall Trip The Cumberland Gap area of southeastern Kentucky was named the top fall destination in the southern U.S. by Southern Living magazine in its October 2008 edition. In addition to brilliant foliage, Cumberland Gap – one of Kentucky’s highest points – shelters buildings from a long-gone settlement, along with an unparalleled view, the magazine reports in the

featured story about the top three Southern destinations for fall travelers. Also, Pine Mountain State Resort Park in Pineville, Kentucky, about 15 miles north of Cumberland Gap, was chosen by readers of the Middlesboro Daily News as the best spot to entertain out-of-town guests, the best dining atmosphere and the best place to play golf in the tri-state area of southeastern Kentucky, southwestern Virginia and northeastern Tennessee.

Kentucky Broker’s Son Killed in Action Hopkins County Native Sgt. William Patrick Rudd, a Hopkins County native and Army Ranger, was killed in action in Iraq this past October. Patrick was the son of William (Bill) Rudd, Jr, a broker with Rudd Real Estate & Associates in Madisonville, Kentucky. Sgt. Rudd joined the Army on Oct. 2, 2003 and after completing one station unit training and the Ranger Indoctrination Program, he was assigned to B Company, 3rd Battalion, 75th Ranger Regiment on Aug. 9, 2004. He served as a rifleman, grenadier and fire team leader. Sgt. Rudd’s awards and decorations include the Joint Service Commendation Medal, the Army Commendation Medal, the Army Achievement Medal with two oak leaf clusters, the Army Good Conduct Medal, the National Defense Service Medal, the Global War on Terrorism Expeditionary Medal, the Global War on Terrorism Service Medal, the Afghanistan Campaign Medal, the Iraq Campaign Medal, the Army Service Ribbon, the Ranger Tab, the Combat Infantryman Badge and the Parachutist Badge. He is expected to be posthumously awarded the Purple Heart, the Bronze Star Medal and the Meritorious Service Medal. He had previously been deployed twice to Afghanistan and five times to Iraq. Sgt. William Patrick Rudd

Memorial contributions may take the form of donations to the Special Operations Warrior Foundation, PO Box 13483, Tampa FL 33629. WINTER 2008 KENTUCKY REALTOR® 23

By The Numbers

50%

According to Silverpop’s landing page report, “Eight Seconds to Capture Attention,” the percent of users who will leave a Web site’s landing page or micro-site within eight seconds if nothing piques their interest.

According to a Yahoo! study, home buyers and sellers consider approximately this many agents on average before making a final decision.

% 81

According to a Coldwell Banker survey, the percentage of first-time home buyers who consider move-in conditions to be very important when searching for homes. In contrast, only 7% are looking to purchase “fixer-upper” homes that they could buy at a lower price and renovate themselves. It was also reported that affordability was the No. 1 concern for this group of buyers.

KAR thanks the following sponsors for their support of the 2008 Convention & Expo:

23% vs 68% According to recent research by the National Association of REALTORS® Annual Survey of Members compared to notes from the Wikipedia entry for Generation Y (those born between 1978 and 2000), the percent of REALTORS® who send text messages at least once a day compared to the percent of Gen Y who text message daily. Other percentages of note: • 88% of REALTORS® own a computer; 97% of Gen Y have computers. • 93% of REALTORS® have a cell phone; 94% of Gen Y have a cell phone. • 14% of REALTORS® have used IM “infrequently;” 76% of Gen Y use IM every day (15% are logged in 24/7). • 1% of REALTORS® use podcasts regularly; 49% of Gen Y download podcasts regularly.

38.7

The Census Bureau reported that between 2006 and 2007, this many people moved in the United States. Of that number, 25.2 million stayed in the same county, 7.4 million moved to a different county within the same state, only 4.9 million moved to a different state and 1.2 million moved from abroad to the United States. Forty two percent said they wanted to live in a better neighborhood; 30 percent said their move involved family concerns; 21 percent said employment; and 7 percent listed other factors.

million

US Bank Systems Engineering NKREC Insight Communications The Appointment Desk Forcht Bank Century 21 24 www.kar.com

Housing Stats

Home Prices in Kentucky Still Holding Strong Sales continue to be slow

ven during the national election results and economic news, housing still seems to break through the clutter and remains top of mind for buyers and sellers across the country. This is also true for the so-called fence sitters who think now may be a bad time to buy and want to wait it out. In some parts of the country, buying a home (or trying to sell one) may not be the best idea for everyone but in Kentucky that is generally not the case. For the third quarter of 2008, median home prices in Kentucky rose slightly, an increase of 3.3 percent, compared to the same period in 2007. The numbers have seen slight variations from month to month but prices remain solid. The number of homes sold for the quarter, however, continues to be in line with the prior months of the year as sales were down just over 19 percent in the third quarter of 2008 compared to the same period in 2007. “The federal government continues discussions on ways to boost the housing market and have implemented many great ideas,” says Robert Damron, president of the Kentucky Association of REALTORS®. “The $7,500 tax credit is available and talks are being held by NAR and other groups on ways to extend this program to make it even more effective for a wider audience. Hopefully we will see more programs aimed at making homeowners more comfortable with their current situations and potential buyers more comfortable with taking the necessary steps to get into a home.” In a market forecast session at the recent NAR Conference in Orlando, Jed Smith, NAR’s Managing Director for Quantitative Research, explained the economic fundamentals related to housing and spoke about the decline in the number of housing starts the country has seen over

Third Quarter 2008 vs. 2007 Board/Association

# Sold 2008

# Sold 2007

Henderson-Audubon BOR

104

107

Hopkinsville-Christian BOR

Kentucky-Barkley Lakes BOR

# Sold %

Median Price 2008

Median Price 2007

Median Price %

-2.80%

90950

95125

-4.39%

147

-43.54%

105200

112950

-6.86%

-8.33%

98000

82000

19.51%

Region One

Madisonville-Hopkins BOR Mayfield-Graves BOR Murray Calloway County BOR

104

123

-15.45%

75185

92625

-18.83%

100

-17.00%

85000

70000

21.43%

-2.50%

122500

112000

9.38%

Owensboro BOR

307

319

-3.76%

112193

103200

8.71%

Paducah BOR

187

274

-31.75%

129250

130000

-0.58%

Pennyrile BOR

106

123

-13.82%

112500

97500

15.38%

Central Kentucky AOR

148

183

-19.13%

115500

105250

9.74%

Heart of Kentucky AOR

443

485

-8.66%

136250

130900

4.09%

Old Kentucky Home BOR

139

116

19.83%

114800

113330

1.30%

REALTOR® Assn of SKY

467

551

-15.25%

121500

123600

-1.70%

Russellville-Logan BOR

-5.66%

77500

110000

-29.55%

Shelbyville BOR

150

-36.00%

149000

148000

0.68%

South Central Kentucky AOR

-18.75%

109000

109500

-0.46%

2993

4197

-28.69%

140000

141750

-1.23%

2221

2675

-16.97%

147800

146415

0.95%

1374

1649

-16.68%

135000

140000

-3.57%

219

255

-14.12%

95750

95000

0.79%

Region Two

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

150

208

-27.88%

110000

109000

107750

1.16%

Eastern Kentucky AOR

126

159

-20.75%

117500

105289

11.60%

Madison County BOR

643

677

-5.02%

142000

136250

4.22%

Pioneer Trace BOR Somerset-Lake Cumberland BOR Totals

109

-55.05%

75625

100000

-24.38%

192

213

-9.86%

115000

125000

-8.00%

10574

13145

-19.56%

113650

110000

3.32%

Based on information from local REALTOR® associations/MLSs for the periods of July 1 – September 30, 2007 and 2008. * Statistics are unavailable for the following local associations: Cynthiana-Harrison Co., Dix River and Frankfort. Cave Run does not have statistics for 2007 (new association in 2008).

(Continued on page 29) WINTER 2008 KENTUCKY REALTOR® 25

Community Profile A Spotlight on...Maysville All photos courtesy of Lloyd Schiltz

ituated along the Ohio River, Maysville is located in the northeastern corner of Kentucky’s fertile Bluegrass Region. This location places the community directly in the crosshairs of Lexington, Cincinnati, Ohio and Huntington, West Virginia. But Maysville wasn’t always known by the same name which begins the deep and unique history associated with what is now the fiftieth largest city in Kentucky (at one point, in 1790, Maysville was the second largest town in the state with 119 log cabins). Maysville was originally called Limestone due to its location on the Ohio River at the mouth of Limestone Creek. The area was a natural path for buffalo and settlers, particularly Simon Kenton, Daniel Boone and John May, to the interior of the state. In fact, Simon Kenton made the first settlement in the region in 1775 before being forced out during the American Revolution. It was during this time, and up through 1787 after Kenton returned, that the three men established the village into Maysville, even though the Limestone name continued well into the nineteenth century. By 1830, Maysville had become a thriving river port and, after petitioning the Kentucky Legislature three times and eventually passing by a slender margin, Maysville became the seat of Mason County in 1848. Access to a major waterway played a major role in the town’s initial growth. Maysville, in addition to being a major exporter of hemp, tobacco and bourbon, was once a center of wrought-iron manufacturing, sending much of the fancy ironwork it produced down the Ohio to decorate the elaborate buildings of New Orleans. When merchants would return, they would bring with them architectural styles and trends to incorporate into the booming river town. From the row houses to the ornate ironwork that accompanies them, the inspiration of The Big Easy can be seen in the structures of the town’s original developments to the current restoration projects. The river also helped spur growth for Maysville into the twentieth century as it was home to one of the largest tobacco auction warehouse systems in the world.

26 www.kar.com

Maysville’s history is also linked to Kentucky’s physical location during the Civil War era. Kentucky, a border state for both its views on the war and slavery, had the region divided by loyalties during the battles. It was said that many families had siblings fighting against each other because one chose to fight for the North and the other for the South. Even counties were split in their views and styles of governments. Maysville, because of its proximity to Ohio, a free state, was an important stop on the Underground Railroad. Harriet Beecher Stowe visited the area in 1833, witnessed a slave auction in front of the county court house in Washington, now annexed into Maysville and included the scene in her novel Uncle Tom’s Cabin. The Underground Railroad is also the focus of a new 2,100 mile cycling route that follows the trail from Mobile, Alabama, through Maysville and on to Owen Sound, Ontario. Today, this deep history lives on in Maysville. The notable past can be explored at the many museums that can be found in the region or by way of a guided tour through the two historic districts – downtown Maysville and Old Washington, a 1700’s village of craft and collectibles shops and fine Kentucky dining. Outside of the historical footprints of the city, there are many cultural draws to this area for visitors and locals alike. According to Lloyd Schiltz, president of the Pioneer Trace Board of REALTORS®, the local city and county government have taken great strides to revitalize Maysville’s downtown to keep that culture alive. “I have lived here my entire life and the historic charm that we know is essential in order for us to ‘sell’ this town as a destination,” said Schiltz. “New construction, such as the county courthouse, has a look that is consistent with Maysville’s past. In

addition, utilities have been placed underground so the wonderful architecture is not obscured by wires and poles and the direction of traffic on some of the streets has been rerouted over the past few years to make flow more efficient.” The Washington Opera House, the fifth oldest theater in the United States, is the stage for a wide variety of performers including Michael Bolton and Rich Little. It is also home to the Maysville Players, themselves one of the oldest acting groups in the state. The Washington Opera House received national attention this year when it held the world premier of the movie Leatherheads, starring George Clooney. Rosemary Clooney, aunt to the aforementioned George and a great singer and actress, started the Rosemary Clooney Music Festival in 1999 (and performed every year until her death in 2002) to benefit the restoration of the Russell Theater. Past performers at the festival include Roberta Flack, Alison Krauss, The Pointer Sisters and Linda Ronstadt. The recently expanded and remodeled Kentucky Gateway Museum Center tells the story of the region through exhibits and original art work by acclaimed artists. The pieces on display and the research library are renowned for their superb collection of original documents, photos and books outlining the progress of Maysville and surrounding areas. The Kathleen Savage Browning Miniatures Gallery, a world class collection of 1/12 scale miniatures, is also housed at the Center. One of the more unique displays within Maysville is in the floodwall artwork of renowned Louisiana muralist Robert Dafford. The Maysville Floodwall Mural Project, a series of ten murals along the McDonald Parkway, depicts the early river history of the region by capturing details of the architecture, transportation, dress and other aspects from the past four centuries. The landscape of the area can be experienced along the route of the Antiques, Collectibles and

Stuff 400 Mile Sale across Kentucky from Washington to Paducah. The journey encompasses over 200 antique shops, 11 state parks, numerous Civil War sites, museums, original Kentucky crafts and specialty shops and hundreds of individual yard sales along the way. Interstate travel in this part of Kentucky is made easy with the only two bridges, the Simon Kenton Memorial Bridge and the William H. Harsha Bridge, crossing the Ohio River for nearly 100 miles. Both bridges connect Maysville to Aberdeen, Ohio and are very substantial impact projects for the region. Built in 1931, the Simon Kenton Memorial Bridge is a suspension bridge and originally opened with a toll. Those tolls were removed in 1945 to much fanfare including celebrations from the local Rotary and Lions Club, and a parade in downtown Maysville. Its main span is 1,060 feet long, and the total length of the bridge is 1,991 feet. The newer of the two bridges, the William H. Harsha Bridge, opened to traffic in 2001 and was the first in Kentucky to use the cable-stayed suspension method. It measures 2,100 feet in total length, 1,050 feet across the center span and the supporting towers each rise to 332 feet. The recreational opportunities in and around Maysville are plentiful not only because of the proximity of the river, but also because of the excellent highway systems running through the area. Boating, fishing, camping and other outdoor activities are big draws for the immediate area. An off-road park is available for trail riding and the Maysville-Mason County’s Recreation Park offers many facilities, activities and a 12-acre fishing lake. Within the county are several golf courses as well as annual festivals, BBQs, wine tastings and a hot air balloon race. Whether Maysville is a daytrip, a weeklong vacation or a permanent residence, exploring the area is sure to offer a history lesson like no other.

WINTER 2008 KENTUCKY REALTOR® 27

From the Helm

Accentuate THE POSITIVE KAR Executive Vice President Susie Helm stands next to the “logo wall” inside the newly renovated office building for the Association.

hen I was much younger, I swam on a team. One time, while swimming backstroke, I finished last … dead last by a wide margin. When I got out of the pool, proud that I finished but embarrassed by my slowness, my Mom said to me, “Honey, look, you got your best time.” She didn’t say, “You’ll do better next time” or “it’s OK” or even, “you were really slow!” She said THE POSITIVE. THE POSITIVE gave me the confidence to swim backstroke again, even though I didn’t really like backstroke. I knew I could get my best time again if I kept trying. Throughout my life, I received THE POSITIVE from family members, especially my Mom. Many times, I got THE POSITIVE from Association leaders, peers and employees. What is THE POSITIVE? It is a positive comment without conditions, delivered with sincerity. It is not fake or phony; it is the real thing. It is usually delivered spontaneously. It is genuine. When you are the recipient of THE POSITIVE, you never forget how you feel when it is given to you. I remember the swimming encouragement from nearly 40 years ago. THE POSITIVE has that much impact.

In these difficult economic times, all of us need to find ways to accentuate THE POSITIVE. Because, as all economic cycles go, there will be a rebound and an upturn in our business as well as the rest of the economy. We need to position ourselves in a positive way for the real estate market rebound. But in the meantime, we need to accentuate THE

28 www.kar.com

POSITIVE in everything we do. From our clients to our business associates to our friends and family, we need to be accentuating THE POSITIVE in all of our endeavors. As the holiday season approaches, spreading good cheer and being positive is an important part of the equation. There are many people less fortunate than ourselves who are in need of our assistance and encouragement and with that comes the positive influence we can have in someone’s life. It can be charitable assistance or just a note to say we are thinking of you and your loved ones this time of year. We all like to have someone accentuate THE POSITIVE in our lives. Now, here is a very POSITIVE story: Our staff meetings usually consist of planning upcoming events and meetings, reviewing schedules and general discussions. We were reviewing our plans for our staff Christmas luncheon and gift exchange when Cinda Hatfield, KAR’s executive assistant, suggested that we forego our own exchange and give the money to a charity instead. It was immediately seconded by several staff members and, ultimately, we decided to adopt a family for Christmas. I really admire their desire to help others with their generosity and am proud to be part of this fine group. On behalf of the entire staff at KAR, we wish you a safe and happy holiday season and hope for a prosperous new year!

Susan W. Helm, RCE

Digital Photography

(continued from page 12)

Regardless of how you decide to organize the vast amount of images you may have in your possession, the best thing to remember is to keep these organized in a way that allows you to reference your photos quickly and easily so you don’t spend valuable time searching when you can be selling.

These are just a few of the questions that should assist you in making an informed decision on a very important piece of your overall real estate career puzzle.

Extra This, Extra That Digital cameras and digital photography have come a long way in a short amount of time which can make purchasing the equipment feel a little overwhelming. There are, however, several other items that can make the journey whole. Once you select a camera and you’ve thought about the many uses you have for your new found freedom of expression, don’t forget to overlook the “extras” that may be necessary to complete the package.

There are no hard and fast rules for composing real estate shots, but do keep in mind a few principles.

• Did you consider a tripod to help steady your shots and keep them from being fuzzy and out of focus? • What about extra batteries or a few rechargeable sets that can be swapped out so you are never without power? • If the camera has options for a bigger, better lens or flash, what type do you need to get the pictures you want? • How about a carrying case to protect the camera and, possibly, carry your supplies and personal items?

Housing Stats

Quick Tips for a Great Shot

Do some staging. Temporarily move distracting items from the scene such as a car in the driveway or a For Sale sign on the lawn. For interior shots, tidy up the room so it looks uncluttered. Highlight positive areas of the property. Before snapping the shutter button, review the scene so vertical or horizontal lines are perpendicular. Take shots from different angles so nothing obstructs an important part of the scene. Moving slightly to the left or right, or back a few steps, before taking a photo can improve composition. Make a habit of checking the composition in the viewfinder or on the LCD before and after taking a photo.

(continued from page 25)

the past three years (down 65% from March 2005 peak). Although this represents a slow time for builders and affiliated industries, the good news is the slowdown should control inventory in the short term and help push the demand for housing, both new and existing, in the future. In an interview with the Lane Report, Bob Weiss, executive vice president of the Home Builders Association of Kentucky said that Kentucky’s rural areas have not been hit as hard as those areas in the “golden triangle” when it comes to new home building. Although home starts in the state are slower than they were during the peak of

2005, Weiss says that new homes have seen modest price appreciations and prices are still going up. As mentioned over the past several months when the slowdown first hit the national markets, housing in Kentucky remains a stable investment when purchased for the right reasons. The state has not seen the extreme rise and fall of home prices as did many parts of the country, especially the east and west coasts. On a national level, home sales in 2008 are down 29% through September from a September 2005 peak. Prices across the country are down 17% through July 2008 over the same period in 2007. WINTER 2008 KENTUCKY REALTOR® 29

A Day in the Life of... A Kentucky Real Estate Commissioner Ken Perry, Chairman, KREC Cold Spring, Kentucky Years as a Commissioner: 3

How did you get involved with the Commission? I felt as though I was at a point in my career where I could commit to give back to an industry I had worked in for a long time. I applied for a spot on the Commission so I could serve the licensees of the state.

How is the market in Kentucky going to play out over the next few months? We have seen a decline in the market and the current cycle is going to be a long downward trend with no relief in sight.

What are some of the challenges you face at the Commission? We are facing a huge retirement issue inside the organization. Many of these employees have been with the KREC for 20 to 30 years and they are now moving on – about half the staff is leaving. The real estate industry and the Commission have been their entire careers so, needless to say, they are taking with them a ton of knowledge of the business. We will have to rehire and train these new positions.

What are some of the upcoming changes for the industry? I believe we will see continuing pressure on Commissions. I also think within real estate operations, we will see a smaller number of mid-sized firms. This will be the result of a downward pressure on revenue and increased operating expenses. I also see an increase in the number of alternative model firms. The growth of these firms will be the result of a favorable law environment, limited consumer home equity and a continued growth in technology. Within the state, I think online CE will start to take hold with licensees as well.

What are the proudest accomplishments for you as a Commissioner? There were four goals I had when I became a Commissioner and all four have been accomplished. These were developing a commercial CORE course for CE, reworking and approving the new agency disclosure form, starting a broker manager’s course and improving the state’s curriculum quality through online CE to allow folks in the rural areas to get their education without having to travel. Recently, we implemented the new commercial license law, which modernized our system to be in compliance with the federal court order. That was a great accomplishment for me as well. In your opinion, where is the state headed in the next three or so years for licensees? I feel we will have fewer and fewer licensees – a decline in new REALTORS® and more agents in escrow due to the challenging economic times. I am personally expecting a drop of 10% in total agent count before the next renewal cycle for licensees. But that’s just my opinion.

30 www.kar.com

From the perspective of the KREC, what advice would give a real estate agent? I would say it’s time to focus on your education and getting back to the basics. What is your main goal as the Chairman of the KREC? To further improve the efficiency of the organization and hire quality employees that will help us operate smoothly. Outside of your real estate business, what is your biggest hobby? A good day’s work out on the farm – I have a 900 acre place that I love to keep up. It really gets my perspective and focus ready for Monday and the rest of the week. Last question, what is the best piece of advice you’ve ever received? You can obtain anything; all you have to do is work for it and want it.