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6 Home Remodeling Projects to Add Value p. 12 What Realtors速 Need to Know About the TILA-RESPA Changes p. 20 The Right Way of Pricing Property p. 18
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PROFESSIONAL GROWTH THROUGH FORWARD THINKING
ANNOUNCING THE OPENING OF OUR NEW SALT LAKE CITY OFFICE
Located at the base of Big Cottonwood Canyon in the Old Mill area, our new state-of-the-art office provides an open and collaborative work space. “This remarkable location gives our agents access to all of Salt Lake Valley and is truly the premier real estate office in the valley,” says Steve Roney, owner and CEO of Berkshire Hathaway HomeServices Utah Properties.
Old Mill Office › Just off I-215 6340 South 3000 East, Ste. 600 Cottonwood Heights, UT 84121
© 2015 BHH Affiliates, LLC. An independently owned and operated subsidiary of HomeServices of America, Inc., a Berkshire Hathaway affiliate, and a franchisee of BHH Affiliates, LLC. Berkshire Hathaway HomeServices and the Berkshire Hathaway HomeServices symbol are registered service marks of HomeServices of America, Inc. Equal Housing Opportunity.
Good to know.™ 801 990 0400 | BHHSUtah.com BARRON’S 2014 “Top 100 Most Respected Companies”.
Major changes are coming to real estate transactions starting Aug. 1. p. 20
Table of Contents Features 10 Realtors® Rock REAL 12 6 Remodeling Projects That Add to Your Resale Value
Patti Stern
18 Price per Square Foot: The Right Way of Pricing Property Craig Hawker
20 New Disclosure Forms Alter Transactions
Columns 7 Pete and Repete Dave Robison
– President’s Message
Departments 8 Happenings 8 In the News 26 Housing Watch 28 Realtor® Connections 28 On the Move
On the Cover: Photo: © iStockphoto.com/filo
This Magazine is Self-Supporting Salt Lake Realtor® Magazine is self-supporting. The advertisers in this magazine pay for all production and distribution costs. Help support this magazine by advertising. For advertising rates, please contact Mills Publishing at 801.467.9419. The paper used in Salt Lake Realtor® Magazine comes from trees in managed timberlands. These trees are planted and grown specifically to make paper and do not come from parks or wilderness areas. In addition, a portion of this magazine is printed from recycled paper.
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June 2015 volume 75 number 6 The Salt Lake REALTOR® (ISSN 2153 2141) is published monthly by Mills Publishing, located at 772 E. 3300 South, Suite 200 Salt Lake City, Utah 84106. Periodicals Postage Paid at Salt Lake City, UT. POSTMASTER: Send address changes to: The Salt Lake REALTOR,® 772 E. 3300 South, Suite 200 Salt Lake City, Utah 84106-4618.
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President Dave Robison goBE Realty
Directors Managing Editor Dave AndertonM. Brock Andersen Berkshire Hathaway
Copy Editor
Jared Booth Georgia Cuthbert Coldwell Banker First Vice President Cheryl Acker Communications Committee Tom Colemere Realtypath LLC (Success)Lori Lee – Chairwoman Colemere Realty Annie Hedberg – Vice Chairwoman Kim Farber Equity Real Estate Second Vice President Publisher Adam Kirkham Mills Publishing, Inc.Kevin Larsen Kirkham Real Estate Coldwell Banker Residential www.millspub.com Mike Morgan President Sales Staff Keller Williams Treasurer Dan Miller Paula Bell Lisa Jungemann Steve Perry BillLLCLines Windermere Real Estate Realtypath (Community Branch) Office Administrator Karen Malan Cynthia Bell Snow Troy Peterson PaulEquity Nicholas Real Estate Past President Art Director Don Nothdorft Angie Domichel Nelden Michael Rowe Jackie Medina Coldwell Banker Residential BerkshireAssistant Hathaway Administrative Magazine Designer ChloéRandy Herrman Smith Real Estate CEO OfficeEquity Assistant Curtis Bullock Graphic Design Matthew Jessica SnowUlrich Ulrich Realtors® Ken Magleby Patrick Witmer Advertisinginformation informationmay maybe beobtained obtainedby bycalling calling Advertising (801)467-9419 467-9419ororby byvisiting visitingwww.millspub.com www.millspub.com (801)
Managing Editor Directors President DeAnna Dipo Dave Anderton Cheryl Acker Distinctive Properties
At Home Realty
First Vice President Publisher Jillinda Bowers Purdential Utah Donna PozzuoliMills Publishing, Inc. Daniel Christensen Prudential Utah www.millspub.com Coldwell Banker
Second Vice President President Sarah M. Colbert Dave Frederickson Dan Miller Summit Sotheby’s Keller Williams Art Director Tom Colemere Treasurer Jackie Medina Colemere Realty Charlotte Thomas Kim Farber-Lynch OfficeEquity Administrator Graphic Design Keller Williams Real Estate Cynthia Bell Snow Leslie Hanna Lisa Hyte PastKen President Magleby RE/MAX Canyons Office Assistant Bill Heiner Patrick Witmer JessicaJacobson Snow Shirley RE/MAX Associates
Sales Staff Chief Executive Officer Paula Bell Bryan Kohler Karen Malan Paul Nicholas
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Administrative Assistant Fred Law Kyrsten Holland Law Real Estate Angie Domichel-Nelden Coldwell Banker
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Salt Lake Board: (801) 542-8840 Salt Lakee-mail: dave@saltlakeboard.com Board: (801) 542-8840 e-mail: dave@saltlakeboard.com Web Site: www.slrealtors.com Web Site: www.slrealtors.com The Salt Lake Board of REALTORS® is pledged to the letter and spirit of U.S. policy ® for the equal housing opportunity the nation. We The Saltachievement Lake Board ofofREALTORS is pledged to thethroughout letter and spirit of U.S. policy encourage and support the affirmative advertising throughout and marketing for the achievement of equal housing opportunity the program nation. Wein which thereand are support no barriers obtaining advertising housing because of race, color, religion, encourage thetoaffirmative and marketing program in sex, handicap, familial or national origin. which status, there are no barriers to obtaining housing because of race, color, religion, sex, handicap, familial status, or national origin. The Salt Lake REALTOR® is the monthly magazine of the Salt Lake Board of REALTORS®. Opinions ® persons quoted in articles are their own and do not necessarily expressed by writers is the monthly magazine of the Salt Lake Board of REALTORS®. Opinions The Salt Lake REALTORand reflect positions of theand Saltpersons Lake Board of REALTORS expressed by writers quoted in articles®. are their own and do not necessarily reflect positions of the Salt Lake Board of REALTORS®. Permission will be granted in most cases, upon written request, to reprint or reproduce articles well and photographs this issue, provided proper is given to The Salt Lake REALTOR®, as Permission will beingranted in most cases, uponcredit written request, to reprint or reproduce articles ® as any writers and photographers whose names appear withtothe andREALTOR photographs. , as well andtophotographs in this issue, provided proper credit is given Thearticles Salt Lake While unsolicited original manuscripts and photographs related to the real estate profession as to any writers and photographers whose names appear with the articles and photographs. are welcome, no payment is made for their in the publication. While unsolicited original manuscripts and use photographs related to the real estate profession are welcome, no payment is made for their use in the publication. Views and opinions expressed in the editorial and advertising content of the The Salt Lake ® ® not necessarily by theand Saltadvertising Lake Board content of REALTORS REALTOR Views andare opinions expressedendorsed in the editorial of the. However, The Salt Lake advertisers do not make publication of this magazine so consideration products and necessarily endorsed by the Saltpossible, Lake Board of REALTORS®.ofHowever, REALTOR® are services listed greatly appreciated. advertisers doismake publication of this magazine possible, so consideration of products and services listed is greatly appreciated.
Pete and Repete W
hen I was a kid my dad told me this joke that I had no idea how in the world it was ever going to end. It just kept going. He would say to me, “David...lemme ask you a question, Pete and Repete sat on a fence, Pete fell off, who was left? I would think, “Oh, that’s easy and I would answer, ‘Repete.’ He started again, “Pete and Repete sat on a fence, Pete fell off who was left.” I would again say “Repete.” I’m not sure how many times this went on before I told him to quit the joke. But I will tell you this important part, out of all the jokes my father ever told me, this one is probably the most memorable to me 35 years later. There is power in repeating a message. In a business book I read it said you need to repeat your message to people in your company over and over and over until they start making fun of you for repeating the message so much. At that point they start living the message and the culture and then you keep repeating it. With brokerages and the Salt Lake Board gaining new agents monthly (and also less active agents becoming active) we have to repeat a lot of simple things that are being broken. Brokers please go over these with your agents and repeat and repeat please. 1. Blind ads. Be sure all advertising on Facebook, radio ads, websites, postcards, etc. have your company’s brokerage on it. There have been radio ads, many websites or Facebook community pages, or postcards sent to homeowners without company brokerage information. Be sure to teach the 50 percent rule to your agents and go over their marketing. 2. Follow instructions on showing homes. There have been keys taken home from the lockboxes, people leaving doors unlocked or open, and people just using a lockbox without following the MLS instructions. These are potential ethic violations. Also, our CEO Curtis Bullock is worried any unlocked home could open you up to liability if there was any damage to the home. Don’t just text a phone number on the MLS or email and expect that you are going to get a showing set up. Follow the instructions. 3. Earnest money. Where is it being deposited? Is it in the paperwork? Was it deposited on time? If it wasn’t, did you disclose it right away and send an addendum to fix it? Make sure agents live this rule religiously. 4. Don’t give out your ActiveKey (keypad) (If you still have one). I’m guessing most people won’t give their phone out...but just in case...don’t do it. 5. Call the other agent when sending an offer. I heard recently where the agent never got the offer and never knew one was coming....four days later the buyer’s agent called and asked for a response. Be sure to communicate when sending offers so the public has a good experience. If we Pete and Repeat this message to our agents we will have less issues while protecting ourselves and the public. Pete and Repeat away!
Dave Robison 2015 President
OFFICIAL PUBLICATION OF THE OFFICIAL PUBLICATION OF THE SALT LAKE BOARD OF REALTORS ®® SALT LAKE BOARD OF REALTORS REALTOR is a registered mark which identifies a professional in real estate who subscribes ®
® . toREALTOR a strict®Code of Ethics asmark a member of the NATIONAL ASSOCIATION REALTORS is a registered which identifies a professional in realOFestate who subscribes to a strict Code of Ethics as a member of the NATIONAL ASSOCIATION OF REALTORS®.
October 2005
October 2005
June 2015 | Salt Lake Realtor ® | 7
Happenings
In the News CFPB Announces ‘Sensitive’ Approach to RESPA-TILA Enforcement
Pictured: Craig Call, Amy Winder (Salt Lake County council member), Jaren Davis, Justin Allen (government affairs director of the Salt Lake Board of Realtors®), Beth Holbrook (Bountiful City council member and Realtor®), and Chuck Newton (South Jordan City council member).
Elected Officials Meet at the Realtor® Campus Elected officials from across the Salt Lake Valley gathered at the Realtor® Campus on May 8. The gathering provided a networking venue for officials to become familiar with the mission of the Salt Lake Board of Realtors® and efforts to strengthen the housing market. Speakers included: Dave Anderton, communications director of the Salt Lake Board of Realtors®; Craig M. Call, partner with Anderson Call and Wilkinson; and Jaren Davis, executive director of the Salt Lake Home Builders Association.
Pictured: Leo Perez, chairman of the Christmas in July Committee, with Mariana Kowalski.
Committee Prepares for Christmas in July The Christmas in July Committee is gearing up for the annual Christmas in July event to be held on July 31 at The Road Home homeless shelter in downtown Salt Lake City. Each year, volunteers help fill hundreds of backpacks with donated items of games, toys, books, school supplies, blankets, clothing and personal hygiene articles.
8 | Salt Lake Realtor ® | June 2015
The following is a statement from National Association of Realtors® President Chris Polychron, executive broker with 1st Choice Realty in Hot Springs, Ark., in response to the Consumer Financial Protection Bureau’s announcement of “sensitivity” to companies making a good-faith effort to comply with the new Truth in Lending Act and Real Estate Settlement Procedures Act Integrated Disclosure regulation. “The action announced by the CFPB is a welcome first step toward clarifying the changes coming to real estate closings August 1. NAR appreciates the “sensitivity” offered by the CFPB to companies making a good-faith effort to comply with the new TILA-RESPA Integrated Disclosure regulation. “NAR will continue to work with the CFPB to minimize any possible market disruptions or uncertainty when the rule takes effect August 1, during the busiest transaction season for real estate. “Almost 300 U.S. Senators and Representatives asked the CFPB to further develop market certainty through a clarification of the TRID regulation. NAR has long advocated a period of restrained enforcement and liability for the TILA-RESPA Integrated Disclosure rule. “While NAR appreciates the CFPB’s understanding of the difficulties involved in making a change of this magnitude, we hope that continued dialog with U.S. Senate and House leaders will result in a solution that allows the lending industry and CFPB to address any implementation issues and minimize costly closing delays for home buyers and sellers.”
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Realtors® Rock REAL
T
he Salt Lake Board of Realtors® held its annual Score for RPAC with REAL Salt Lake event May 6. More than 300 members of the Board attended the event and enjoyed an evening of fun, food and soccer. All proceeds from the event benefited the Realtors® Political Action Committee. Pictured (left): Cheryl Acker, president elect of the Salt Lake Board of Realtors®, with Claire Larson. Above: Bill Heiner, former president of the Salt Lake Board of Realtors®, with Leo the Lion and Miranda and Eric Hurd. Opposite page (top left, clockwise): Dave Young, Kristin Coleman-Nicholl, Bob Goodson, Curtis Bullock, CEO of the Salt Lake Board of Realtors®, Brad McLeese and Justin Allen, government affairs director of the Salt Lake Board of Realtors®. This year’s event was held in REAL’s new outdoor pavilion. Misti Rosenbaum, Jason VandenBerg and Tony Ketterling. Jim and Kimberly Hammond. Dawn and Dave Robison, president of the Salt Lake Board of Realtors®. Sharon Spratley, Cathy and Greg Sneyd with a guest.
10 | Salt Lake Realtor ® | June 2015
Photos: Dave Anderton
June 2015 | Salt Lake Realtor 速 | 11
Photo: © Jamie Hooper / Dollar Photo Club
6 Remodeling Projects That Can Add to Your Resale Value Selling your home? Updating the bathroom and kitchen is a big draw for potential home buyers. By Patti Stern
H
ome remodeling has become more popular than ever to attract buyers, thanks to an improving economy, strong job growth, higher disposable income, more home sales, low interest rates, and a more competitive housing market. Home owners looking to sell their home this year may want to complete a few upgrades and renovations that will help make their home get noticed among the competition. The following are the remodeling trends recommended by both PJ & Company Staging and Interior Decorating as well as Remodeling Magazine’s Cost vs. Value report:
12 | Salt Lake Realtor ® | June 2015
1. Curb appeal. According to Remodeling Magazine’s report, the key improvements with the highest ROI include the front door and garage door replacements, manufactured stone veneer front steps or foundations, vinyl siding, and replacing windows. Each of these upgrades will boost both buyer interest as well as the value of a home. 2. Deck addition. At a fraction of the price of an indoor addition, a new deck both enhances the landscaping of a yard as well as offers additional living space for al fresco dining, relaxing and
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Enjoy our 3% commission offer—valid on the total price of any spec or new build.* Learn more at 801-545-3429 or visit RichmondAmerican.com.
*3% commission offer is valid to real estate agents with new buyers on new contracts for homes offered by Richmond American Homes of Utah, Inc. that contract by August 31, 2015, and close in a timely manner. Offer must be documented in the contract at time of original contract to be eligible. 3% commission will be paid based on the total purchase price of the home and paid to the managing/employing broker at closing. Offer is not valid on lot or community transfers, plan changes or in conjunction with any other offer. Richmond American Homes requires that brokers comply with its Co-op Broker and client registration polices to be eligible for a commission. Visit a Sales Center for details. Richmond American Homes reserves the right to change or withdraw this offer at any time without notice. Prices, specifications and availability are subject to change without notice. Actual homes as constructed may not contain the features and layouts depicted and may vary from image(s). Š2015 Richmond American Homes, Richmond American Homes of Utah, Inc. (866-400-4131).
Photo: © highwaystarz / Dollar Photo Club
entertaining. Most people use their decks for at least six months out of the year so it’s a worthwhile investment. 3. Kitchen remodel. Without having to completely gut the kitchen, replacing cabinet doors and drawer fronts, new appliances, countertops and flooring continues to rank as one of the top renovations for the last 10 years. 4. Bathroom remodel. Buyers are looking for a bathroom that doesn’t feel outdated. Even the smallest bathrooms can look more attractive
with the right finishing touches. The key features that will sell a bathroom are updated vanities, wall color, tile, sink, faucets, toilet, and lighting fixtures. 5. Reinventing an existing room. Buyers and home owners want as much space as they can get. Remodeling an attic into a master or guest bedroom or converting a basement into a playroom, home theater, or exercise room are popular and profitable ways to add usable space to an older home as opposed to the bigger expense of an addition. 6. Painting and removing outdated wallpaper. Finally, if you don’t have time or money to invest in a remodel, one of the simplest and most affordable solutions is to remove dated wallpaper and add a trendy wall color. Don’t go too bold, though. Painting walls a neutral color will also bring out the home’s best features. This simple update provides a boost with instant universal appeal to buyers who want to envision living in the space. Patti Stern, principal, interior decorator and professional stager of PJ & Company Staging and Interior Decorating, has been decorating and staging homes since 2005. Reprinted from Realtor® Magazine Online, June 2015, with permission of the National Association of Realtors®. Copyright June 2015. All rights reserved.
Photo: © GIS / Dollar Photo Club
14 | Salt Lake Realtor ® | June 2015
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MEET THE LEADING SALES CONSULTANTS AT UTAH’S NUMBER ONE HOMEBUILDER. Larry Mitchell, honored recently as Ivory’s leading Sales Consultant, has closed over $90,000,000 in the past 11 years he’s been with Ivory Homes. A significant factor in his success is his ability to truly listen to homebuyers and offer professional, experienced advice regarding what options best meet their needs. Larry also attributes his remarkable success to the entire Ivory team and their commitment to excellence in all areas. In Salt Lake County contact Larry Mitchell at 801-918-7240 or larrym@ivoryhomes.com
Verlyn Pullman, is Ivory’s leading Sales Consultant in Davis and Weber Counties. Verlyn has been with Ivory for 15 years and lives in an Ivory home and community. She credits her success to unparalleled customer service, but says, “It’s easy to sell a product you believe in from a company that stands behind everything they build. Ivory has amazing quality and integrity for long term value. I’ve sold multiple Ivory homes to many families — not only second and third homes to parents but also to their children.” In Davis and Weber Counties contact Verlyn Pullman at 801-721-9299 or verlynp@ivoryhomes.com
Tim Sweat, Ivory’s leading Sales Consultant in Utah County, came to Ivory Homes over 3 years ago. Tim attributes his success to Ivory offering the best product and customer support system that assures each buyer will be taken care of properly. His laid-back personality, which does help in raising triplets, puts his customers at ease as he focuses on their individual needs. Tim finds great satisfaction in helping them work toward their dream of homeownership or ultimately building their final dream home. In Utah County contact Tim Sweat at 801-494-3552 or tims@ivoryhomes.com
“It takes a team effort to produce such remarkable results...and there is not a better team out there than Ivory Homes.” 14000
For over two decades, Ivory Homes has been Utah’s number one homebuilder*. A record like that requires a constant focus on improvement. Ivory continually finds ways to maintain high levels of quality and design while simplifying the home buying process.
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Ivory also leads the way in location and design with 65 beautiful communities across the Wasatch Front and over 100 floor plans to choose from. In addition, they’ve achieved a customer satisfaction rating of over 90% for the past 15 years.
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#1
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Number of homes built by Ivory Homes vs other homebuilders * Based on number of homes built from 1990-2014. Source: Wasatch Front Construction Monitor
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Image licensed by Ingram Image
Price per Square Foot: The Right Way of Pricing Property? Each neighborhood is different and cannot be lumped into one general rule of thumb for price per square feet. By Craig Hawker
A
few years ago, the Wasatch Front Multiple Listing Service (UtahRealEstate.com) started putting on each listing the price per square foot in the top left corner of each MLS printout. I remember talking with many employees and board of directors at the MLS about why they did it, and how they had many people angry over it, but they had a much stronger, voice with a tremendous amount of support and cheers for doing it. This article is not about whether it is right or wrong, but what the pros and cons of using price per square foot as an agent, and how we apply this education to our respective clients.
18 | Salt Lake Realtor 速 | June 2015
Price per Square foot historically has been used in the commercial real estate side as a quick and easy way to determine price. It makes sense because commercial real estate is much more about the price, than the emotions of things like schools, floorplans, neighborhood feel, etc. In commercial there are two main negotiating items, price per square footage, and second, tenant improvements. Remember in commercial you can negotiate on a shell of a building. It makes sense to do price per square foot on that because you really are comparing like for like. It is a concrete floor with steel beams on the sides. Then, you
negotiate the tenant improvements and they can range from $5 to $100 a square foot depending on the amenities, and custom work done. Now let’s put that in perspective to residential real estate. In residential real estate you can have two identical properties side by side. Both homes we are comparing are rambler/ranch style homes, and 3,000 square feet. One is listed at $300,000 or $100 price per square feet, and the other is priced at $265,000 or $88 price per square feet. There are some real estate agents and buyers who would say, the $88/square foot home is the best deal, and the way to go. But, after looking at the spec sheet or MLS printout you see the second home doesn’t have a finished basement, and the yard is trashed, and it is just in okay condition. The first home, has updated granite in the kitchen, and an immaculate yard, and a brand new finished basement. It really is turnkey ready for immediate move in. When comparing these homes, side by side, you discover a finished basement for 1,500 square feet will run anywhere from $15 to $40 per foot in most price ranges. In this price range we can find someone to do it for $20 a foot. That is a $30,000 bill right there. Granite will cost a minimum of $3,000, and to get the sprinklers, sod, and trees back to shape it will cost another $2,000. So, if you added that to the $265,000 list price it now is $300,000. That still doesn’t factor in the other amenities or the holding costs of coming up with $35,000. So, both properties are now close to being equal, and would be at the same price per square foot. Which one is the better deal? Is there a right choice? I believe, if we teach our clients and we use price per square foot only to measure value on a property we are doing the client, the industry, and the neighborhood a disservice. There are so many other factors to consider, like view, area, floorplan, acreage, finished basement, garages, or multiple garages, amenities or upgrades to the home, busy roads verse cul-de-sacs, and the holding costs to improve the lower quality homes into the same quality as the higher price per square foot homes. If we factor all those things in, then and only then can we consider the homes in this scenario equal. If you don’t factor these things in, you could have a very big discrepancy in pricing property as the listing agent, or could be on the losing end of writing offers for your buyer that are not accepted. Finally, I think it is important, to let our clients know we are not New York City, or Chicago. The public has been enamored with television shows that focus on price per square foot. Most of these shows are in markets not like ours, and some are in big cities where they are selling stacked flat condos/penthouses. Again, those are more like commercial buildings than single family homes. So the public is seeing Realtors® use price per
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square foot and making that the only deciding factor for buying a home. It is not uncommon for homes in the downtown Salt Lake or Sugarhouse market to be well above $200 per square foot on a single family home, verses homes in West Jordan that are $85 per square foot. Each city in our state, and each neighborhood is different and cannot be lumped into one general rule of thumb for price per square feet. I would hope we would use our true value as pricing and marketing experts, and market properties based upon location, views, acreage, amenities, style of home, garages, and above ground square footage just like the appraisers do, and not just price per square foot. Good luck out there. Craig Hawker is the Principal Broker/Owner of Action Team Realty.
June 2015 | Salt Lake Realtor ® | 19
Photo: Š Coloures-pic / Dollar Photo Club
New Disclosure Forms Alter Transactions Real estate professionals need to educate their clients about what has changed and help them understand that the transaction will take longer.
M
ajor changes are coming to real estate transactions starting Aug. 1. Any transaction involving a mortgage will use the new disclosure forms created by the Consumer Financial Protection Bureau (CFPB). The Truth-in-Lending Act/RESPA Integrated Disclosures (TRID) creates timing requirements for disclosures that lenders need to make to consumers. Not only will the new forms be used in transactions, the relationship between the lender and other parties like the closing agent and the mortgage broker is now altered because the lender can be liable if certain costs exceed the tolerance limitations set forth in the TRID. In addition, the changes may also delay a transaction if certain changes occur near closing,
20 | Salt Lake Realtor ÂŽ | June 2015
as TRID requires a three-day waiting period prior to closing and certain changes may cause lender delays. TRID Overview Through the Dodd-Frank Act, Congress ordered the creation of TRID in order to improve the loan disclosures made to consumers. TRID combines the prior TILA and RESPA disclosures into two forms: the Loan Estimate and the Closing Disclosure. The new forms are required to be used in all transactions starting Aug. 1, and cannot be used for transactions prior to that date. TRID contains many intricate requirements for the disclosure forms and this article is merely an overview of these requirements. There are also
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parade preview brunch Tuesday, July 28 2015 8:30 - Noon
PARADE OF HOMES TICKETS Available ONLY at the REALTOR Brunch, the day of the event. Tickets will be good for the duration of the Parade, July 31 through August 15. Homes open 12:00-9:00, Monday through Saturday.
Realtor Day TICKET PRICING* $8 each $7 / 10 or more $6 / 50 or more
RSVP for the REALTOR Day Brunch to the Salt Lake Board at www.slrealtors.com by July 21st, 2015. QUESTIONS Barbara Breen at Daybreak: Call 801.204.2844 or email Barbara.Breen@riotinto.com Or Laura Palmer, Salt Lake Board of REALTORS (SLBR): Call 801.542.8856 or email Laura@SLREALTORS.com
*Special SL Board of REALTOR ticket pricing day of event only.
CHARITY GALA 2015 WHITE Save the Date Friday, Sept. 11 Sponsor’s Reception 5:30 p.m. Silent Auction 6-7 p.m. Dinner & Live Auction 7 p.m. Salt Lake Marriott Downtown City Creek 75 South West Temple Tickets coming soon to
www.slrealtors.com Benefiting The Road Home and The Christmas Box International
30 CELEBRATING
30 YEARS OF GIVING
tolerance limitations that may require a lender to refund fees paid by a consumer if the actual costs paid exceeds the estimated costs by certain factors. The Loan Estimate is how consumers will apply for a loan. A lender cannot charge a fee except for the credit report until after a consumer has received a Loan Estimate from a lender and has decided to proceed with the transaction. The lender must send the Loan Estimate within three business days after receiving application from a consumer and the final Loan Estimate must be issued at least 7 business days prior to the closing. The cost estimates used by the lender in calculating the Loan Estimate must be made in “good faith,” meaning that the numbers will be presumed to be based on the best information available and the lender may have to refund to the consumer certain amounts if the amounts vary between the Loan Estimate and the Closing Disclosure. A consumer has 10 business days after it is deemed to have received the Loan Estimate to decide whether to proceed with the transaction. The consumer must receive the Closing Disclosure within three business days of closing. The Closing Disclosure captures all of the costs paid by the consumer, and so any alterations
Sugar House
made at the closing table must be reflected in an amended Closing Disclosure following the closing. Three changes will require a new Closing Disclosure and will require a new three-day waiting period: APR changes by more than 1/8 percentage point; loan product changes; or a prepayment penalty is added. Association Purchase Contract Revisions The new disclosure timing requirements needs to be addressed in the model form contracts that many Realtor® associations create. All associations who create form contracts need to revisit the timelines established in these agreements, as the process for completing a real estate transaction will be altered starting on Aug. 1. One important issue that may need to be addressed is the buyer’s duty to close the transaction on a date certain. Since TRID may cause delays in the transaction through no fault of the buyer, purchase contracts need to be adjusted so that the buyer is not in breach of the agreement for not closing on a certain date. As stated above, TRID will cause a reset in the three-day waiting period in certain instances, but the lender may also cause delays due to the new tolerance limitations.
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transaction, which could be almost three weeks after the initial application. The association should work with lenders and closing agents in its area to help revise its contract, as those groups will be familiar with how the rule will be implemented and so will have insight into workable timelines for a transaction. A few associations have already considered the changes that need to be made to their forms. Some have made changes to their forms by including language that contract will extend if the closing is delayed through no fault of either party. Others have found that their existing contract adequately covered the delay scenario, as the contracts already accounted for delays such as these. Finally, many associations have decided to take a wait-and-see approach before adapting their agreements, as they want to see how the new process works before adapting their contracts. A couple of other issues have arisen. A lender group is hoping to have licensee information captured in the purchase/sale agreement, as lenders need to have this information to complete the Closing Disclosure. Some lenders are taking the position that privacy laws restrict their ability to share the Closing Disclosure with real estate professionals and will only share the Closing Disclosure after consent is obtained from the borrower. NAR is investigating this issue.
Image licensed by Ingram Image
For example, a problem with the home’s plumbing could potentially require the lender to seek a new valuation of the property, which in turn could require new disclosures and a delay in the transaction. Thus, the buyer’s obligation to close should not be required on a certain date since the potential for delays can cause this date to move. In addition to the buyer’s obligation to close, all other timelines need to be reviewed. For example, a financing contingency that requires an immediate application by a buyer may not be practical, as the Loan Estimate won’t be a final commitment by a lender and potentially is subject to change, like following the appraisal. In addition, a lender can’t charge a buyer for an appraisal until the buyer evidences intent to proceed with the
24 | Salt Lake Realtor ® | June 2015
Real Estate Professional Takeaway While real estate professionals do not have any direct responsibilities under the TRID, they still have a role in the process. Real estate professionals need to educate their clients about what has changed and help them understand that the transaction will take longer. In addition, clients also need to be educated about the possibility for closing delays and so should be wary of scheduling back-to-back closings, as there is risk that one of the transactions may be delayed. Finally, real estate professionals need to help their clients understand that attempts at last minute negotiations could derail the closing and so the parties should try to have all issues resolved well in advance of closing. In particular, changes made within the three-day waiting could cause a delay to the closing. Conclusion TRID disclosures will change the timing for transactions involving a mortgage. Realtor® associations who create form contracts should review these contracts in light of these new requirements. Real estate professionals will need to help their clients understand how the changes will change the transaction, explaining how the transactions may take longer and that there exists the possibility for delays.
SUPPORT & RIDE TEAM VERITAS
MS 150
Veritas Funding is going on the Bike MS: Harmon’s Best Dam Bike Ride June 27-28, 2015 and we need your help! We want to raise $50,000 to support finding a cure for MS! Veritas will match dollar for dollar up to the first $25,000 raised! We want to invite you to get involved! Please click on the link below or scan the QR code to donate, or register to ride with Team Veritas MS 150!
NMLS# 252108
http://www.nationalmssociety.org/goto/teamveritasms150
Housing Watch April Home Sales Marked Highest Level since 2006; Prices Up 9%
H
ome sales in Salt Lake County in April increased sharply year-over-year as the spring-summer selling season kicked off, reaching a nine-year high in sales for an April month, according to the Salt Lake Board of Realtors®. Home sales (all housing types) increased 19 percent to 1,463 sales in April compared to 1,232 sales the same month a year ago. The median price of homes sold in April in Salt Lake County climbed to $245,990, a 9 percent rise compared to a median price of $225,000 last year. The median cumulative days on the market for listings in April was 20 days compared to 29 days in April 2014. Pending home sales in Salt Lake County in April continued to be strong at 1,805 contracts signed, up 20 percent compared to 1,509 contracts in April 2014. In Davis County there were 438 homes sold in April, an 18 percent year-over-year increase from April 2014. The median home price increased to $220,500, up 5 percent compared to $210,500 a year earlier. Nationally, homes sales in April increased 6 percent above last year’s level, according to the National Association of Realtors®. The national median existing– home price for all housing types in April was $219,400, a 9 percent rise over April 2014. Lawrence Yun, NAR chief economist, said the “housing inventory declined from last year and supply
6
3
Salt Lake County Sales (all housing types) Year-Over-Year (Up 19%)
1,232 26 | Salt Lake Realtor ® | June 2015
1,463
in many markets is very tight, which in turn is leading to bidding wars, faster price growth and properties selling at a quicker pace. To put it in perspective, roughly 40 percent of properties sold last month went at or above asking price, the highest since NAR began tracking this monthly data in December 2012.” Across the country, the percent share of first–time buyers remained at 30 percent in April for the second consecutive month. First–time buyers represented 29 percent of all buyers in April 2014. All–cash sales were 24 percent of transactions in April, unchanged from March and down considerably from a year ago (32 percent). Individual investors, who account for many cash sales, purchased 14 percent of homes in April, unchanged from last month and down from 18 percent in April 2014. Seventy–one percent of investors paid cash in April. Distressed sales — foreclosures and short sales — were 10 percent of sales in April, unchanged from March and below the 15 percent share a year ago. Seven percent of April sales were foreclosures and 3 percent were short sales. According to Freddie Mac, the average commitment rate for a 30–year, conventional, fixed– rate mortgage remained below 4 percent for the fifth straight month, falling in April to 3.67 percent from 3.77 percent in March.
Salt Lake County Median Price (all housing types) Year-Over-Year (Up 9%)
$225,000
$245,990
2 - C OL OR
1
Salt Lake County Days on Market (all housing types) Year-Over-Year (Down 31%)
2 20
5
Davis County
Median Price (all housing types) Year-Over-Year (Up 5%) $220,500
1,805
Pending Sales (Up 20%)
1,509
29
Sales $
Salt Lake County
4
Sales
Davis County Sales (all housing types) Year-Over-Year (Up 18%)
438
372
$210,500 June 2015 | Salt Lake Realtor 速 | 27
REALTOR® Connections
On the Move
Q&A: Curtis A. Bullock Curtis A. Bullock is the CEO of the Salt Lake Board of Realtors®. Q: What is the 2015 Realtors® Legislative Meeting in Washington, D.C.? A: This gathering is held annually by the National Association of Realtors®. It is more commonly known as NAR Mid-Year. These meetings offer Realtors® an opportunity to meet with their elected representatives and discuss issues important to real estate professionals. We were able to spend time with Sen. Orrin Hatch (R-Utah) and Sen. Mike Lee (R-Utah). Q: What were some of the issues discussed? A: There were several issues we urged our representatives to support: One, borrowers need to be able to get financing to buy a home. Two, the mortgage interest deduction must remain an incentive for home buyers. Three, patent troll lawsuits continue to be a problem for Realtors® and others. We support legislation to stop this extortion. Q: What about the RESPA-TILA disclosure rules coming this summer? A: We asked our representatives to support a grace period for those seeking to comply in good faith with new rules for loan closing procedures and settlement documents set to take effect Aug. 1. The Consumer Financial Protection Bureau has agreed to be “sensitive” in its enforcement of companies making a good-faith effort to comply with the new act.
Pictured: Jim Bringhurst, left, Hall of Fame, has invested more than $50,000 to RPAC; Curtis Bullock, CEO of the Salt Lake Board of Realtors®; Gary Cannon, Hall of Fame, has invested more than $25,000; Justin Allen, government affairs director; and Cheryl Acker, Sterling R investor and president elect of the Salt Lake Board of Realtors®.
Major Investors Recognized The Salt Lake Board of Realtors® recently recognized major investors who donated at least $1,000 to the Realtors® Political Action Committee. In 2014, the Board raised $239,000 in RPAC money, the most RPAC money raised by any large association in the country (2,000-7,000 members). There were 128 major investors in the Salt Lake Board in 2014, more than any other association in the country.
28 | Salt Lake Realtor ® | June 2015
Keller Williams Realty, Inc. announced it achieved the No. 1 spot in the 2015 Training Top 125, a worldwide ranking of organizations that excel at training and human capital development, as determined by Training magazine. The Austin, Texas,-based real estate company helps real estate agents increase the profitability of their businesses, through BOLD: Business Objective, Life by Design. Over the course of seven weeks, BOLD conditions agents with mindset exercises, language techniques, and lead-generation activities. Participants are assigned to accountability teams and challenged to push each other to achieve big results. Equity Real Estate welcomes the following new Realtors®: Brandi Burrola, William Richmond, Lourdes Tea, Brian Huggard, Kristin Covili, Adrian Diaz, Chris Harper, Nicole Hansen, Christopher Cannon, Mike Evans, Nathan Wiest, Jodie Coon, Sergei Gritsaev, Dawna “Suzann” Betts, Shane Kersey, Stacie Manning, Lacey Togerson, Jerry Meakin, David Wiser, Tyson Beaman, Kristy Wiser, Kelly Lee, Mark Luchsinger, Ray Manning, Heather Lorenzana, Kelle Herrera, Michelle Torres, David Miller, William “Troy” Rydalch, Sandra Perez, Puni Homer, Dustin Griffiths, Seth Scott and David McCulloch. Salt Lake Realtor® Magazine welcomes announcements on new Realtors®, affiliates, awards and professional accomplishments. Items received are printed at the discretion of Salt Lake Realtor® Magazine on a first-come, firstserve basis. Send your news to dave@ slrealtors.com.
Why did Kenny Parcell, the 2015 Realtor Party Director Liaison for the National Association of REALTORS®, join Equity? “With all the various business models and fee structures out there for REALTORS®. I have not found one more positive than Equity for anyone with a real estate license...” See what Equity can do for you at...
equity-usa.com “...Whether you’re part-time, full-time, small team, or large team; Equity should be looked into by anyone thinking about making a move. With a low fee per transaction and the potential of only $100 per transaction, to an unbeatable profit share program, Equity has the resources and systems to help facilitate success...”
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