OC REALTOR®: March/April 2021 by Orange County REALTORS®

INTRODUCING YOUR REALTOR® PLAYBOOK FOR 2021

FINDING THE COMMUNICATIONS SWEET SPOT

ON PAGE 8 LEARNING FROM EXPERIENCE: TIPS FROM TOP PRODUCERS

ON PAGE 29

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ON PAGE 32

FIVE NEW LAWS THAT MAY AFFECT REALTORS® ON PAGE 24

OC HOUSING UPDATE: INSATIABLE DEMAND

IT PAYS TO USE A REALTOR®

ON PAGE 16

ON PAGE 36

THE REALTOR® PLAYBOOK For every game, there’s a playbook that describes the tactics and methods to use in successfully moving the team down the field toward the goal. This March/April issue of OC REALTOR® has been called THE REALTOR® PLAYBOOK because it is a compilation of information and resources selected to help you improve your real estate game and reach more of your business goals. ON PAGES 28–37

CONTENTS The REALTOR® Playbook

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For every important game, there’s a playbook that describes the overall strategy and the specific tactics and methods to use in moving the team successfully down the court, the field, or the pitch toward the goal. Do you fake right and go left? Do you throw a long shot or move in under the hoop for a slam dunk? Do you march steadily down the field in measured increments or do you gamble on the success of a single Hail Mary pass? This issue of OC REALTOR® has been called “The REALTOR® Playbook” because it is a compilation of information and resources carefully curated to help you improve your real estate game and reach more of your business goals. On its pages, you will find questions to ask to help you sharpen your communication skills and tips from top producers about how to get started in real estate if you are new to the game and how to hone your skills if you are more experienced. Long ago, Julius Caesar wrote that experience was the best teacher. This issue of OC REALTOR® will give you an opportunity to supplement your own experience with the experience of others and, in doing so, to discover news ways to do old things and better ways to do many things.

President's Message 8

Features 16

Introducing Your REALTOR Playbook for 2021

Learning from Experience: An Interview With Two Top Producers

The Orange County Housing Update

Lori Namazi describes the virtual retreat during which the Directors wrote the Strategic Plan to Lead, Educate, Advocate, Serve, and Engage as they build back better during the next three years.

Sherri Butterfield interviews Ken Bowen and Doug Echelberger regarding how to set goals, sharpen skills, find clients, and stay in touch after escrow closes.

Steven Thomas says that a recordlow supply of available homes and a staggering demand are fueling a hot housing market.

Cover Story: The REALTOR® Playbook 28 Finding the Communications Sweet Spot Sabrina Blair lists questions you can ask your clients to discover what they are looking for and establish their expectations. 4

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36 It Pays to Use a REALTOR® In words and examples, Michelle McCann describes the Marketing Toolbox Orange County REALTORS® has assembled to help members sharpen their game.

20 Risk Management: New Laws with Gov Hutchinson The C.A.R. assistant general counsel describes current COVID laws and offers some good news for landlords.

24 Five New Laws that May Affect REALTORS® Among them, C.A.R. 2021 President Dave Walsh mentions Proposition 19, the new Home Hardening Disclosure, and the rent moratorium.

42 Affiliates in Action: New REALTOR® Orientation in February

47 Mentions A member thanks OCAR Cares, and OC Treasurer-Tax Collector Shari Freidenrich mentions SB 219, which may allow her to cancel late penalties for some taxpayers.

On the Cover:

38 A Touch of Humor: Some Wit and Wisdom for Taxing Times Benjamin Franklin, Will Rogers, Mark Twain, and Albert Einstein have their say about taxes.

Print and Marketing Specialist Ivan Salmeron has illustrated the complicated series of plays often required to move clients from a house they have lived in to a home they love, including making appointments, obtaining a loan, signing and transmitting documents, and staying in touch throughout the entire process.

Departments 10 Names in the News

22 Education Central: Upcoming Classes by Track

ORANGE COUNTY

REALTOR®

Love the Orange County REALTOR®? Did you know that you can read it online, anytime? Read past issues at www.ocrealtors.org/magazine.

MAGAZINE

25552 La Paz Road Laguna Hills, CA 92653

10540 Talbert Avenue, Ste. 225 West Fountain Valley, CA 92708

949-586-6800

714-375-9313

www.ocrealtors.org

2021 OFFICERS Lori Namazi President Adam Rodell President-Elect Joyce Endo Treasurer Danielle Corliss Immediate Past President Dave Stefanides Chief Executive Officer

2021 BOARD OF DIRECTORS Mary Jane Cambria Matt Cortez Sandra Deering Dorinda Francois Michele Harrington Julie Hile Jeff Jackson Liz Lewis Yami Martinez Chip McAllister

Ed Molina Charleen Nagata-Newhouse Pamela Pedego Joe Pierce Vinil Ramchandran Lacy Robertson Lisa Schulz Jessica Siguenza Lynne Suzanski Scott White

MAGAZINE STAFF Sabrina Blair

Breanna Reed

Sherri Butterfield

Ivan Salmeron

Director of Communications sabrina@ocrealtors.org Communications Specialist sherri@ocrealtors.org

Accounting Administrator breanna@ocrealtors.org Print & Marketing Specialist ivan@ocrealtors.org

Mission Statement The mission of the OC REALTORS® is to promote the REALTOR® Code of Ethics; to provide education, services, and resources to our members; and to advocate the protection of real property rights.

Notice to All Members It is the long-established policy of this Association, the California Association of REALTORS®, and the National Association of REALTORS® to adhere to both the letter and spirit of the federal and state antitrust laws. For their own protection, members should be aware of the antitrust laws as they affect their specific business activities. Any illegal activity under the state and federal antitrust laws is not in compliance with Association policy, nor is it in the interests of the Association or its members. Participation in Association activities must occur only in harmony with these very important laws. Federal law prohibits discrimination based on race, color, sex, religion, or national origin in connection with the sale or rental of residential real estate, in advertising the sale or rental of housing, in the financing of housing, and the provision of real estate brokerage services. The Orange County REALTOR® editor reserves the right to review and edit all submissions. Orange County REALTORS® makes no warranties and assumes no responsibility for the accuracy of the information contained herein. The opinions expressed in articles are not necessarily the opinions of the Orange County REALTORS®. Orange County REALTORS® does not necessarily endorse the companies, products, or services advertised in this magazine unless specifically stated. The OC REALTOR® (USPS 025-445, ISSN 1945-2179) Volume 12, Issue 2, is published by the Orange County REALTORS®, 25552 La Paz Road, Laguna Hills, CA 92653. Periodicals postage paid at Laguna Beach, CA, and additional mailing offices. POSTMASTER: Send address changes to Orange County REALTORS®, 25552 La Paz Road, Laguna Hills, CA 92653-5127. Annual membership dues include $3.13 for a one-year (6 issues) subscription to the OC REALTOR® magazine. OC REALTOR® cannot be responsible for unsolicited materials. Publisher: Orange County REALTORS® Printer: The Monaco Group

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OC REALTOR®

PRESIDENT’S MESSAGE

Introducing Your

For 2021 This issue of OC REALTOR® features a customized compilation of information and resources to better prepare you for the business of real estate. By Lori Namazi 2021 PRESIDENT, ORANGE COUNTY REALTORS®

his month’s issue of OC REALTOR® is called “The REALTOR® Playbook.” When I think of a playbook, I immediately envision a compilation of information and resources that prepare you for the show, the game, or your business. It is used to help you create and follow a plan for yourself. That’s exactly what this issue is all about.

The Board of Directors ensures that the Mission of Orange County REALTORS®—"To promote the REALTOR® Code of Ethics; to provide education, services, and resources to our members; and to advocate the protection of real property rights”—is always the focus of the resources spent and the benefits and services made available to members.

Because Orange County REALTORS® is a trade Association, it operates a little differently from a regular business. We must make decisions based on bylaws and on policies and procedures. The Board of Directors is made up of elected and appointed Directors. The term of office for each Director begins on January 1.

To help guide the Board of Directors, in January we have an annual business retreat where we hear from experts who help us increase our leadership knowledge and establish our goals for the year.

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OC REALTOR®

During this year’s virtual retreat, we heard from two industry experts. The first was Robert Harris. Robert is a Certified Association Executive

who has worked with hundreds of trade associations across the globe. First, he outlined the roles and responsibilities of Directors. It is our duty to make decisions that advance the mission of the corporation and to follow our bylaws. Then, Robert assisted us in developing a new Strategic Plan. Strategic planning is an organization's process of defining its strategy, or direction, and making decisions about allocating resources in pursuit of this strategy. Orange County REALTORS® creates its Strategic Plan for three years, so this new one, which will be finalized in the coming weeks, will be our roadmap for 2021–2023.

PRESIDENT’S MESSAGE Speaking of roadmaps, did you receive your roadmap with your annual dues billing statement in the mail? The Game of Real Estate is a fun depiction of the benefits and services provided to members by Orange County REALTORS®, the California Association of REALTORS®, and the National Association of REALTORS®. The map is ideal for new agents or for those looking to get back to work and wanting to know where to start. At the virtual retreat, we also heard from Executive Leadership Coach Mike Staver. Mike is the author of Leadership Isn’t for Cowards: How to Drive Performance by Challenging People and Confronting Problems. Mike pointed out that we come from a primary perspective, yet have a secondary perspective as well. Specifically, he shared how, as individuals, we view most of the national news through three lenses: health, wealth, and freedom. When we consider how we each view the pandemic and politics, the two most talked-about topics of 2020, we formulate our actions and reactions primarily based on what we see through one of those lenses.

“When I think of a playbook, I immediately envision a compilation of information and resources that prepare you for the show, the game, or your business.”

Further, Mike emphasized that, although each of us may have a different perspective from others, all of us are right in how we view the topic. As an example, he said that his reaction to the pandemic was initially from a health perspective. He wanted to protect himself and those around him. Yet, as a business owner and an employer, he also needed to look at it from a wealth perspective. He had an obligation to help keep his people employed. But he did not forget the freedom perspective. As a proud American, he understood the balance of personal freedom and government intervention for the good of many. His discussion about how to respect one another regardless of our primary perspective was invaluable. As I look ahead, I am confident that, as an Association, Orange County REALTORS® is well positioned to provide services and benefits outlined in our Strategic Plan. We want to

Lead.

Maintain a reputation as a premier REALTOR® local Association.

Educate.

Elevate careers and enhance professionalism.

Advocate.

Mobilize members on critical issues and influence decision makers.

Serve.

Enhance communities through REALTOR® effort.

Engage.

Provide signature events, products, and services that support member success.

I am proud of the work that we do at Orange County REALTORS®. We provide the services and education that allow you to be the best agent you can be for your clients. We promote housing rights, and we serve our communities. As we reemerge from the isolation that has been necessary to slow the spread of COVID-19, we are looking for ways to build back better. We hope that this playbook provides you with ideas and resources you can use to prepare for a more successful, rewarding, and satisfying year.

OC REALTOR®

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NAMES IN THE NEWS

NAMES NEWS in the

Happy Valentine’s Day from OC REALTORS® In late January, Capistrano Unified School District Board of Trustees President Judy Bullockus sent an email to several community groups announcing an unusual service opportunity. The CUSD had more than 5,500 children who were either homeless, multi-family living, military, or in foster care. The goal was to wish each of these children a Happy Valentine’s Day with a small gift bag. On February 5, with the help of Kim Cosbey (K.C. and Company), OC REALTORS® supplied more than 500 Valentine’s totes, each filled with small treasures. Judy later commented on the “wonderful outpouring” she had received in response to her emailed request. Similarly, Illumination Foundation issued a request for goodie bags to give clients in its special programs and rehabilitation centers. The request was for bags with adult activity books, including word searches, sudoku puzzles, and coloring books. Rita Tayenaka reports that many REALTOR® and Affiliate members of OC REALTORS® donated and, on February 5, some 75 bags were delivered to the Illumination Foundation, which provides targeted interdisciplinary services for the most vulnerable homeless adults and children. According to the Foundation, more than 55,000 people are homeless in Southern California, and 32,000 of these are children.

Rich Steinhoff Reappointed Mission Viejo Mayor Pro Tem Wendy Bucknum has reappointed Rich Steinhoff to that city’s Investment Advisory Commission. Established by the Mission Viejo City Council as an oversight body in the wake of the Orange County bankruptcy that was declared on December 6, 1994, this commission is charged with overseeing the city’s investment program and recommending investment policies. In addition, Mission Viejo City Manager Dennis Wilberg has appointed Rich to another two-year term as chairman of the Board of Trustees for the City of Mission Viejo’s Employee Benefit Trust. This Trust is funded by contributions made by employees and the city and is used to pay retirement benefits. Rich is the author of ten books, including Turning Myths into Money: An Insider’s Guide to Winning the Real Estate Game, which was published in 2011 and reviewed on pages 32–33 in the February 2012 issue of OC REALTOR®. 10

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Photos by Marion Butterfield

NAMES IN THE NEWS

Author Dan Smith Interviews Lori Namazi In early February, Dan Smith, the author of Failing Greatly: Your Guide to Achieving Success After Failure, interviewed OC REALTORS® President Lori Namazi as part of the Real Interviews Series. Lori, who left the real estate corporate world several years ago to start her own brokerage and now also advises independent brokers about how to run their businesses in a compliant way, has adopted as her motto for this year “Build Back Better.” When Dan asked Lori where the idea had come from, she explained that the isolation of 2020 had provided an opportunity to go more slowly, to reflect, and to think about how we can evolve, how we can make the transition and reemerge to be better, “better for our clients and better for our members.” As one example, Lori mentioned the classes that OC REALTORS® provides. Although the usual attendance at these classes had been around forty when they were taught in person, the online versions are attracting as many as ten times that number. “We are offering the same information in the same period of time,” said Lori, “but sharing it with far more people. We are building education back better.”

The U.S. Creates a Water Safety Plan The World Health Organization (WHO) has recommended that all countries create a water safety plan to reduce the incidence of drowning. With the support of Water Safety USA and stakeholders across the nation, working groups have been formed to develop a plan for the United States. Julie Lopiccolo and Rob Williams have been asked to serve as co-chairs for two of the working groups. OC REALTOR® readers will remember that Julie is the mother whose twenty-one-month-old son Jasper Ray drowned when his babysitter took him to a home with an unfenced swimming pool. In response, Julie and her husband established the Jasper Ray Foundation for Drowning Prevention and Child Safety.

OC REALTOR®

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Photos by Marion Butterfield

NAMES IN THE NEWS

Who Will Represent the Second District? A Special Election will be held on Tuesday, March 9, to fill the vacancy created when former Supervisor Michelle Steel was elected to represent California’s 48th Congressional District. Candidates are former State Senator John Moorlach, Republican; Costa Mesa Mayor Katrina Foley, Democrat; Newport Beach Councilman Kevin Muldoon, Republican; Corona del Mar Tax Attorney Janet Rappaport, Democrat; and Fountain Valley Mayor Michael Vo, Republican. During a virtual Multi-Chamber Forum on February 12, Candidates Rappaport (upper left photo), Muldoon (upper right photo), and Moorlach (lower photo) answered questions about the County’s handling of vaccine distribution, priorities in a reduced-budget environment, homelessness, the struggle of small businesses to stay afloat during the pandemic, and flight operations at John Wayne Airport. In closing, Moorlach pointed out that he has a history of dealing with financial crises and has taken no money from public employee unions.

Anduril Leases Former Times Printing Facility Defense tech firm Anduril Industries has leased the former Los Angeles Times printing facility on Sunflower Avenue near Harbor Boulevard in Costa Mesa for its new headquarters. Anduril plans to add a 200,000-square-foot research-and-development building to the existing 432,000-square-foot press building. Anduril Chief Operating Officer Matt Grimm explains that the additional space is needed because “our teams collaborate best when they are hands-on and face-to-face solving problems.”

Composition of New Energy Purveyor in Flux Although Huntington Beach and Buena Park have joined Irvine and Fullerton in their effort to form a joint powers authority (JPA) for the purpose of purchasing electric power, Costa Mesa and Lake Forest have dropped out. Under the plan, Southern California Edison would continue to deliver power to member cities through its transmission lines, but the JPA would procure its own electricity and might be able to purchase cleaner power and provide it to customers at lower rates. 12

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RIS Media Recognizes Leadership Academy Graduates RIS Media has named OC REALTORS® Leadership Academy graduates Olesya Drozdova, Spencer Hoo, and Yami Martinez as Thought Leaders for their efforts in organizing REAL Estate Pros Without Borders. To keep spirits high and share hope with the real estate community, despite the COVID-19 pandemic, the trio hosted a worldwide call during which agents shared information and gave updates regarding their marketplaces.

NAMES IN THE NEWS

PACE Lender Files for Bankruptcy Protection In late December 2020, San Diego-based Renovate America, which provided financing for solar and other energy-saving home improvements, filed for Chapter 11 bankruptcy protection. According to the bankruptcy filings, Renovate America has been the target of fifty-six lawsuits, including three proposed class actions, and has spent $15 million on litigation expenses in the past two years. Founded in 2009, Renovate American became the largest originator of Property Assessed Clean Energy (PACE) financing in California. By 2016, it had captured about 60 percent of the $1.5 billion market. In 2016 alone, the company originated $914 million in PACE financing, marketing the program under the Home Energy Renovation Opportunity (HERO) brand. But there were no credit score requirements. And many homeowners were not aware that the financing was being paid off through their property tax bills. This repayment method increased their property taxes and made the debt akin to a tax lien on their property, which caused problems when they tried to refinance or sell. Concerned REALTORS® sounded a warning in city council meetings and called for better consumer protection at the federal level, urging support for H.R. 1958, the Protecting Americans from Credit Entanglements (PACE) Act of 2017. (See Craig Borner, “PACE Financing Puts California Homeowners at Serious Risk,” OC REALTOR®, July/August 2017, p. 22.) Predictably, tightened credit and disclosure requirements for PACE loans caused a steep drop in Renovate America’s originations, which plunged to $134 million in 2019.

Ten Win Early Bird Dues Drawing Congratulations to the following ten members of Orange County REALTORS® who received a partial refund of their membership dues by paying in full, online in December: Nina Agade, Astrid Ashworth, Alice Estrada Bechtold, Jerlene Dinnage, Jerry Johnson, Leon Li, Ray Mitchell, Jack Roemer, Jason Thibodeau, and Feng Xu.

Names in the News is intended to be primarily a place where REALTOR® and Affiliate members of Orange County REALTORS® can share both personal and professional news—about births (of children or grandchildren), graduations, weddings, anniversaries, accomplishments, awards, and other milestones—with one another. If you have news to share, email it to Orange County REALTORS® Writer and Editor Sherri Butterfield at Sherri@ocrealtors.org.

OC REALTOR®

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NAMES IN THE NEWS Listed Among Orange County’s 100 Most Influential

As chief executive officer for the Transportation Corridor Agencies (TCA), Mike Kraman helped finalize an agreement with Caltrans and the Orange County Transportation Authority to end decades of debate over possible routes for the extension of the 241 Toll Road from Oso Parkway to Interstate 5. The agreement included plans to extend Los Patrones Parkway to Avenida La Pata instead of running the 241 through San Clemente. The Register credits Orange County Registrar of Voters Neal Kelley with being “the voice of competence and information about election integrity in a highly volatile year” and points out that, in a general election in which more than 1.5 million Orange County voters—87.3 percent of all registered voters in the county—cast their ballots, “there were no significant issues.”

Photo by Marion Butterfield

During California’s worst wildfire year in recorded history, Orange County Fire Authority (OCFA) Fire Chief Brian Fennessy (pictured with Mission Viejo City Council Member Ed Sachs) led a team of about 1,110 firefighters while collaborating with fire and law enforcement agencies statewide in devising workable strategies that made a meaningful and lasting difference.

Photo by Marion Butterfield

Each year, the Orange County Register names the 100 Most Influential People in Orange County and highlights them in a series of articles that run in that newspaper in late December. All are “people who made a difference,” explains the Register. “All, in some way, inspired.” Eight of the 2020 honorees are described below.

Republicans Young Kim and Michelle Steel join Congresswoman Marilyn Strickland (D-Washington) as the first three Korean American Women elected to the U.S. House of Representatives and are the first women to represent their geographic districts. Steel, 65, of Seal Beach, who formerly represented the Second District on the Orange County Board of Supervisors and was chair of that Board, defeated Representative Harley Rouda to represent the county’s coastal 48th Congressional District. Kim, 58, of La Habra, beat Gil Cisneros to represent the three-county 39th Congressional District.

An expert in consumer protection, Katie Porter (pictured with Federal Political Coordinator Jeff Jackson) handily won reelection to the House of Representatives and became the Democrats’ go-to person to wield the white board and ask the tough questions as a member of the House Banking Committee. After a fire on February 2, 2020, destroyed the Irvine headquarters of Working Wardrobes and despite the pandemic, Jerri Rosen, that organization’s chief executive officer, rebuilt and reopened Working Wardrobes in the early fall.

Milestones

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OC REALTOR®

Photo by Marion Butterfield

When the COVID-19 pandemic shut down the offices of Orange County Clerk-Recorder Hugh Nguyen, he creatively turned ticket booths in the Honda Center parking lot into temporary stops for marriage licenses and civil ceremonies.

NAMES IN THE NEWS

Milestones Photo by Marion Butterfield

Sandra Sue Hutchens March 18, 1955 – January 4, 2021 Sandra Hutchens, the first woman to lead the Orange County Sheriff’s Department, lost her battle with breast cancer in early January at the age of 66. Chosen by the Orange County Board of Supervisors to fill the position of Sheriff-Coroner on a three-to-two vote in 2008, she replaced Mike Carona, who had been indicted on federal corruption charges. On that occasion, Hutchens told the supervisors, “I look forward to hitting the ground running. I will work very hard. You will not be disappointed.” Hutchens, who encouraged even strangers to call her “Sandy,” recalled during an interview in 2011, that, on the day she was appointed as sheriff, she walked out to face the media and someone asked, “How is it different being a female sheriff?” She replied, “Well, I really don’t know. I’ve never been a male sheriff.” She went on to explain, “For me it’s not about being female. It’s about having the qualifications to do the job.” And she did. Hutchens had built her resume in Los Angeles. She had been hired in 1978 by the Los Angeles Sheriff’s Department—the largest sheriff’s department in the nation—where she had a long and distinguished career. She had been retired less than a year when reading about the difficulties in Orange County motivated her to apply for the position in Orange County. “As a law enforcement professional, I was embarrassed; and I believed I knew how to fix what was wrong,” she explained. Appointed as Sheriff in 2008, Sandy Hutchens was elected to her first term in 2010, reelected in 2014, and had served for a decade when she retired 2017. She is widely credited with having both restored public trust in the Orange County Sheriff’s Department and blazed a trail for women in law enforcement. Of her personal health battle and her more public climb to the top of law enforcement, she once said, “I have always been one to lean forward into the wind,” something she did with unparalleled courage and uncommon grace.

Reed Royalty Reed Royalty, founding chief executive officer and president of the Orange County Taxpayers Association (OCTax), passed away on January 7, 2021. A Navy ROTC honors graduate of Harvard University, Reed served for a time as surface ship executive officer and a submarine engineer officer. Following his military service, Reed was hired by AT&T as that company’s designated lobbyist to the California State Legislature, where he never lost a bill, an accomplishment he attributed to his reputation as a person who “tells the truth, all the time.” Later, Reed became the Southern California area vice president for AT&T and then the founding vice president of Air Touch Cellular (now Verizon Wireless). Reed was also a founder of the Cellular Telecommunications & Internet Association, in Washington, D.C., and an important part of his legacy is the nationwide partnership of cellular companies he negotiated. In 1986, Reed helped found the Orange County Taxpayers Association (OCTax) and served as its chief executive officer and president for twenty-six years, until his retirement in 2012. He believed simply that taxes and tax-supported government programs should be “fair, understandable, cost-effective, and good for business.” Several years ago, OCTax established the Royalty Award to be given each year to a person or entity that has acted in the best interests of Orange County Taxpayers. In the first year in which the award was given, it went to Reed, who was by then the OCTax President Emeritus, in recognition of the generous way in which he had shared his knowledge and the legacy he had created by being throughout his adult life a passionate and effective advocate for the taxpayers of Orange County. OC REALTOR®

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THE ORANGE COUNTY HOUSING UPDATE

INSATIABLE

DEMAND

A record-low supply of homes available to purchase and a staggering demand have combined to fuel a housing market that is extremely hot. By Steven Thomas

The unveiling of the new Star Wars: Galaxy’s Edge at the Disneyland Resort in Anaheim was met with throngs of eager parkgoers, and the line for the Millennium Falcon on opening day was five hours long. Movie tickets for the initial release of Avengers: Endgame in April 2019 were extremely hard to come by, and it ultimately became the number one box office hit of all time. In December 2015, Adele placed all fifty shows of her Adele Live 2016 international tour on sale at the same time—a total of 750,000 tickets—and they sold out in just twenty minutes. These are examples of what happens when overwhelming demand meets limited supply. That is precisely what is occurring in the Orange County housing market today. There is an imbalance in supply and demand. The supply of homes is at a record low, and demand is off the charts. As a result, the market has been hot since day one of 2021. The only other time that occurred was back in 2013. What 2013 and 2021 have in common are record-low mortgage interest rates. On January 3, 2013, mortgage interest rates were at 3.34 percent, slightly higher than the record low 3.31 percent achieved on November 21, 2012. On January 7, 2021, according to the Primary Mortgage Market Survey conducted by Freddie Mac for the past fifty years, mortgage interest rates hit a 17th record low since March 2020, dropping to 2.65 percent. In the past year, mortgage interest rates continued to drop to record-low territory, falling below 3 percent in July for the first time ever. The further rates dropped, the more demand soared, and the hotter the market became.

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OC REALTOR®

Photos: www.istockphoto.com/Natee Meepian

REPORTSONHOUSING.COM

THE ORANGE COUNTY HOUSING UPDATE

Figure 1. Low mortgage interest rates boost purchasing power. With today’s 2.77 percent rate, the monthly payment drops to $2,865, a savings of $318 per month over the price of a comparable home one year ago.

WITH TODAY’S 2.77 PERCENT RATE, THE PAYMENT DROPS TO A SAVINGS OF $318 PER MONTH.

When rates drop to a level that is too good to pass up, everyone flocks to purchase. That is what is happening in housing. It is not that home values have plunged by 40 percent; instead, it is historically low mortgage interest rates that are the catalyst for surging demand. As a result, buyers are coming out in droves to purchase. This opportunity is too good to pass up. For a $700,000 mortgage at last year’s 3.6 percent fixed rate, the payment would have been $3,183 per month. With today’s 2.77 percent rate, the payment drops to $2,865, a savings of $318 per month, essentially a 10 percent discount. Comparing today to November 2018 when rates nearly hit 5 percent, the savings jumps to $893 per month, a 24 percent savings (see Figure 1). It is not a one-time savings either. This savings is every single month for the duration of the mortgage, quite possibly thirty years!

“When rates drop to a level that is too good to pass up, everyone flocks to purchase.”

With record-low mortgage rates, there is almost too much demand. It is like a pot of spaghetti that is boiling over. A quick fix would be to turn down the temperature, which is not that easy to do in housing. The only way to turn down the heat is for mortgage interest rates to rise. Buyers may be rooting for an easier market with fewer competing offers and a gentler rise in values, but the price for that scenario would be higher mortgage interest rates and higher monthly mortgage payments. The thing that buyers are eager to take advantage of is causing all their frustrations: mortgage interest rates below 3 percent. It seems that everyone wants to cash in on these incredible savings at the same time. At lower interest rates, homes become a lot more affordable, even in Southern California’s high-dollar-value housing stock. And low mortgage interest rates improve a buyer’s purchasing power, allowing a family on a budget to afford a lot more home. OC REALTOR®

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THE ORANGE COUNTY HOUSING UPDATE

“Low mortgage interest rates improve a buyer’s purchasing power, allowing a family on a budget to afford a lot more home.”

THE CURRENT RATE HAS BOOSTED THAT BUYER’S PURCHASING POWER BY

91,250

Last year, a buyer desiring a mortgage-and-interest payment of $3,000 per month would have been looking at purchasing an $825,000 home. Today, it could be a $916,250 home. The current rate has boosted that buyer’s purchasing power by $91,250! When purchasing power at the 5 percent that was charted November 2018 is compared with the purchasing power at today’s rate, the difference is mind blowing, an additional $217,500 (see Figure 2). Searching for a $916,250 home is much different from searching for a $698,750 home. In Orange County, the difference is night and day. Because of these low mortgage interest rates, demand has been off the charts and everything that comes on the market has been gobbled up almost immediately. To start February, demand (a snapshot of the prior 30 days of pending sales activity) climbed to 2,600 pending sales compared with 2,173 last year, 20 percent higher. The active inventory (the number of homes available to purchase) typically rises slowly from January through March. In 2021, it had dropped from 2,633 at the beginning of the year to 2,475 by February, its lowest level since tracking began in 2004. To start February 2020, it was at 4,005, an eye-opening 62 percent more homes available to purchase.

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OC REALTOR®

Figure 2. At today’s interest rates, a monthly payment of $3,000 buys more home. Last year, a buyer desiring a mortgage-and-interest payment of $3,000 per month would have been able to purchase an $825,000 home. Today, the same buyer can purchase a $916,250 home.

With rock-solid demand and an exceptionally low supply, the market was unbelievably hot and lined up heavily in the seller’s favor. The Expected Market Time (the number of months to sell all Orange County listings at the current buying pace) was 31 days, the lowest level since tracking began. Last year, it was 55 days; and in November 2018, it was 122 days. The bottom line: As mortgage rates climb, the market cools, homes take a lot longer to sell, and demand drops. The tradeoff is higher mortgage payments and a steep drop in a buyer’s purchasing power. While today’s housing market may be boiling over on the backs of record-low mortgage interest rates, buyers should keep the pedal to the metal and not give up. Home values are on the rise, and mortgage rates are slated to increase to the mid-3’s by year’s end. Waiting is quite simply not the answer.

Steven Thomas has a degree in quantitative economics and decision sciences from the University of California, San Diego, and more than twenty years of experience in real estate. His bimonthly Orange County Housing Report is available by subscription and provides housing market analysis that is easy to understand and useful in setting the expectations of both buyers and sellers. His website is www.ReportsOnHousing.com.

RISK MANAGEMENT

NEW LAWS with Gov Hutchinson The C.A.R. vice president and assistant general counsel describes some of the laws that will affect REALTORS® and real estate practice in 2021. By Sherri Butterfield

Photo by Marion Butterfield

WRITER AND EDITOR

On January 22, Orange County REALTORS® President Lori Namazi (in the lower photo) and Risk Management Committee Chair Lisa Dunn (upper right) welcomed C.A.R. Vice President and Assistant General Counsel Gov Hutchinson (upper left), who discussed some of the new laws that will affect REALTORS® and the practice of real estate in 2021.

As is the custom at Orange County REALTORS®, in late January, the Risk Management Committee hosted a virtual meeting at which Gov Hutchinson, vice president and general counsel at the California Association of REALTORS® (C.A.R.), described some of the laws that will take effect in 2021 and the ways in which they are likely to affect REALTORS® and the practice of real estate. Below is a condensed version of his presentation.

The first of the year is a perfect time to discuss new laws because that’s when the new laws take effect and when the new forms come out. Incidentally, in discussions of this type, I always take a conservative approach. The advice I will give here is general. If you have questions about a specific situation, I recommend that you either call the Legal Hotline or consult a real estate attorney whose specialty applies in the instance or to the case involved.

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“REALTORS® are essential, but that does not mean you can do all the things you used to do.”

COVID LAWS You have to be flexible when it comes to COVID; things are always in a state of flux. Open Houses. Nothing has changed regarding open houses. The December order reaffirmed that you cannot hold open houses. Showings must be by appointment. You can have as many showings as you want as long as (1) the showings are by appointment, (2) you show only to one party of related persons at a time, and (3) you allow enough time between showings to clean the property. Masks. If you leave your house to work, you are supposed to be wearing a mask unless you are outside or are in your office alone. Marketing. REALTORS® are essential, but that does not mean you can do all the things you used to do. You are only supposed to be out there doing stuff that you cannot do virtually. You are not supposed to be knocking on doors and doing in-person marketing. Whether you can drop off flyers or not is a gray area. I cannot say that the law forbids it; however, I can say if there is any risk involved, don’t do it.

RISK MANAGEMENT

Photos: www.istockphoto.com/ plusphoto

Exposure Notification. There is a new rule: AB 685. COVID-19 Infection Prevention Requirements: Notification to Employees. This rule states that, whether you are a brokerage or any other office, if your office is open and someone who works in your office tests positive for COVID, before the end of the next business day you must • notify everyone else who works from the office (other agents, employees, independent contractors) in writing regarding the possible exposure; • tell them what you plan to do to disinfect the office; and • advise them of their rights. If you open your office and allow people who do not work there to come in, you must screen them and keep a record of who was there and when. If they test positive, they need to inform you, and you need to notify everyone who came into the office and may have been exposed. Rental Situation. President Biden has extended the federal nationwide eviction moratorium to the end of March and possibly April. If you have tenants who are not paying rent because of COVID, legally, you cannot evict them until the end of March; but you can sue for the money (back rent) you are owed. Coming up in March, landlords will be able to sue tenants for back COVID rent in Small Claims Court even if the amount is more than $10,000. There are only three reasons to evict a tenant if the tenant has not done anything wrong (no fault): • you want to live in the property yourself, • you plan to take the property off the rental market, or • you have a buyer in contract who wants to live there. Under federal law, if tenants have a COVID reason for not paying rent, you cannot evict them for one of these nofault reasons until the moratorium ends.

PROPOSITION 19 (STATEWIDE TAX BASIS PORTABILITY) Proposition 19 says two things: if you are at least 55 years old or disabled, you can move three times and take your property tax basis with you anywhere in the state. You do not have to stay in Southern California. The unsettled question regarding Proposition 19 is the effective date. We still do not know about the deadline for the portability. C.A.R. is sponsoring legislation to clarify when you can sell.

Of course, you can sell right now under Proposition 60 or 90 and move within the same county (Proposition 60) or between counties (Proposition 90) if the replacement property is of "equal or lesser value" and you do so only one time.

GOOD NEWS FOR LANDLORDS There’s money coming. President Biden is preparing a new stimulus package that will aid property owners who have lost rent because of COVID. To qualify, the income of the tenant household must be less than 80 percent of the median income of the county. Under this bill, the government will give you money to replace the rent you have lost; however, you will not be able to go after the tenant for back rent if you accept the government money. We do not know the application process yet, but we will let you know as soon as that information becomes available.

AB 38 (HOME HARDENING DISCLOSURE) This law is not a new law for 2021—it was passed in 2019—but it applies to transactions starting January 1 of this year and makes mandatory a disclosure form for homes located in a very high or high fire hazard severity zone and built before 2010. Your job is to figure out if the form is required. It’s the sellers’ job to fill it out, and the sellers need only disclose what they are aware of. The form describes the circumstances under which the form must be filled out and lists ways to improve the property to make it fire resistant. It also includes six questions the seller must answer regarding the property, for example, if it has a wood roof, if it has combustible landscaping within five feet of the house, if it has singlepane windows, or if the rain gutters are equipped with noncombustible gutter cups. The seller is not required to upgrade the house but is required to disclose its fire vulnerability to a potential buyer. C.A.R.'s new form Home Fire Hardening Disclosure and Advisory (HHDA) may be used to comply with this disclosure requirement.

OC REALTOR®

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OC REALTOR®

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STATE UPDATE

Five New California Laws

That May Affect

REALTORS

New state laws increase property tax basis portability; require the delivery of a statutory disclosure form; guarantee the right to rent out your unit in a common-interest development; grant specific entities a 45-day window in which to purchase residential property through foreclosure; and create a limited statewide rent moratorium.

new year brings new beginnings and new opportunities. 2020 was challenging in many aspects, but it gave me more opportunities to be a problem solver and connect with members— both of which I plan to continue doing throughout my presidency this year. As we turn the pages from a year filled with obstacles no one could foresee, let’s not forget the victories we achieved in the face of adversity as we fast-forward to a new year filled with promise. I’m looking forward to meeting the challenges that invariably present themselves as the new year gets under way, and I hope your year is filled with good health and many more victories.

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One victory we achieved just before the year ended was the passage of Proposition 19 at the ballot box, which allows homeowners who are 55 and older, people with severe disabilities, wildfire or natural disaster victims to transfer their current property tax base to a replacement home anywhere in California. Beginning February 16, 2021, it also changes the rules on exemptions from reassessment for intergenerational transfers by limiting the exemption to the transfer of a primary residence to a child (or grandchild) only when the property continues to be used as a family home by the child (or grandchild), and even then, if the divergence between the taxable value and the actual value is too great, a partial increase in the new taxable value will be imposed. As is the case under current law, under Proposition 19, a grandparent-to-grandchild transfer receives the exemption only if the parents are deceased.

Photos: www.istockphoto.com/courtneyk

BY DAVE WALSH C.A.R. 2021 PRESIDENT

STATE UPDATE

Finally, a new year always brings new laws that may affect REALTORS®. Here are a few of the top new laws: Proposition 19 (Statewide Tax Basis Portability) With the passage of Proposition 19, homeowners who are 55 years of age or older, severely disabled, or whose home has been substantially damaged by wildfire or natural disaster may transfer the taxable value of their primary residence to ο ο ο ο ο

Our monthly Boost Your Biz newsletter returned on Tuesday, January 26. The “back-from-our2020-hiatus” module is not exactly what you expect it to be. It is so much more than a newsletter. We’re bringing back this monthly member benefit because it provides you with actionable tips from industry pros on marketing, tech skills, and new routes to more leads—ideas that can help you meet our new business reality. Real estate is constantly evolving, and we want to provide you with the howtos on utilizing the most advanced business strategies. Mark your calendars to check your inbox on the last Tuesday of each month.

A replacement primary residence, Anywhere in the state, Regardless of the value of the replacement primary residence (with adjustments if "greater" in value), Within two years of the sale, Up to three times (but without limitation for those whose houses were destroyed by fire).

Proposition 19 will supersede the old rules, which limited this exemption to the sale and purchase of a principal residence within the same county (Proposition 60) or between certain counties (Proposition 90)—but only if the replacement property was of "equal or lesser value" and only one time. Proposition 19 tax portability clearly applies to any sale or purchase on or after April 1, 2021. However, if an agent has a client who wishes to obtain the tax benefits of Proposition 19 for a transaction that closes prior to April 1, 2021, whether it is buying or selling a property, the client should be encouraged to seek the advice of a qualified California real estate attorney or tax advisor.

AB 38 (Home Hardening Disclosure) This law requires delivery of a statutory disclosure for homes in designated high-fire areas built before 2010. In it, the seller will disclose specified home hardening retrofits that the property lacks. The disclosure will apply to any property in which the Transfer Disclosure Statement (TDS) must be delivered, and the standard TDS exemptions and cancellation rights apply. This law is not actually a new law for 2021. In fact, it was passed the year before last. However, it applies to transactions starting January 1 of this year. C.A.R.'s new form "Home Fire Hardening Disclosure and Advisory" (HHDA) may be used to comply with this disclosure. OC REALTOR®

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STATE UPDATE

Photos: www.istockphoto.com/grimlin

"A new year brings new beginnings and new opportunities."

AB 3182 (The Right to Rent out Your Unit in a Common-Interest Development)

3088 (Temporary Statewide Rent Moratorium)

This new law requires common-interest developments (CIDs) to allow at least 25 percent of owners to rent or lease out their units starting January 1, 2021, regardless of whether the homeowners’ association (HOA) has formally amended its governing documents. If the owner actually occupies his or her own unit rather than renting out a space within the unit, an accessory dwelling unit (ADU) or junior ADU must be permitted. No matter what, the existing rights that owners currently enjoy to rent out their units cannot be changed.

The COVID-19 Tenant Protection Act of 2020 created a statewide rent moratorium effective from March 1, 2020, through January 31, 2021, for when a tenant cannot meet the rent due to a COVID-related financial hardship. By the time this magazine is published, this law may already have been extended beyond the January 31 deadline. Under this law, rent owed during this period could be collected at the owner's option through small claims court beginning March 1, 2020, for any amount, but could not be collected in connection with an action for possession. Not only was a rent moratorium put in place but the just cause eviction rules under the statewide just cause eviction laws were extended temporarily to all properties even if previously exempt from the just cause eviction rules. However, a homeowner of a single-family home can still evict a tenant for no cause if the owner is in contract to sell to a buyer who will take occupancy.

SB 1079 (Tenant, Prospective Owner and Nonprofit Right of First Refusal to Purchase Residential Property after Foreclosure) This law grants tenants, prospective owner-occupants, nonprofit affordable housing providers, and other entities a 45-day window in which to purchase residential property through foreclosure if they can match (in the case of tenants) or exceed (in the case of other purchasers) the last and highest bid made on residential one to four single-family homes at the foreclosure auction. To ensure that residential properties are available to potential consumer purchasers, this law prohibits a trustee at a foreclosure sale from bundling for sale one to four single-family homes. Each one must be sold as a single sale. AB 26

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This column is based on and has been excerpted from the Monthly Message by C.A.R. President Dave Walsh that was distributed via email on January 21, 2021. It is being reprinted here with permission.

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THE REALTOR® PLAYBOOK

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THE REALTOR® PLAYBOOK

Finding the Communications

SWEET SPOT:

Questions for REALTORS® to Ask—and Answer By Sabrina Blair DIRECTOR OF COMMUNICATIONS AND PROGRAMS

eal estate is a relationship business. To be successful, you need to establish a working relationship with your clients. When you are becoming acquainted with clients initially, it is important to learn what real estate experiences they have had, what they expect from you as their REALTOR®, and how they will measure the satisfaction and success of their experience with you. On these pages are some questions you might ask with brief descriptions of what you might learn from the responses you receive. On the last page of this article (page 31) is a list titled Ten Questions to Ask Your REALTOR®, which you might reproduce and give to potential clients to help them know what questions to ask as a way of becoming better acquainted with you, with the education and experience you have had, and with the service you are prepared to offer.

Questions to Ask Your Clients For Both Buyers and Sellers 1. What do I need to do for you to feel satisfied after we have worked together? The answer to this question is the key to your success! It should help you understand what your clients value most in a real estate transaction, and that is what you should focus on.

2. What would cause you to feel dissatisfied with our experience working together? Whatever the response to this question, make sure to avoid it to ensure a smooth transaction and a lasting professional relationship.

3. What would lead you to refer me to family members and friends? This is a follow-up to Question 1; but if you meet this threshold, you already will have planted in their mind the idea that they should refer you to others.

4. In what ways would you like for me to communicate with you and how often? It is important to set expectations. Do your clients prefer to be contacted by phone, text, email, or in person? How often and at what times of day would they like to hear from you? Hearing from you too early in the morning, too late at night, or too often during the dinner hour could become annoying. On the other hand, if you don’t reach out often enough, they may feel unimportant or neglected. Find their communications sweet spot!

5. Who else will be helping you make the decision to buy or sell (for example, relatives, friends, or co-workers)? You may think that you need cater only to the buyer(s) or the seller(s) until Dad shows up to critique the property or a friend gives his or her own evaluation of the home. Knowing the answer to this question will help you be better prepared to work with everyone involved in the purchase or sale process.

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THE REALTOR® PLAYBOOK

Questions to Ask Your Clients

For Sellers Only

For Buyers Only

1. What attracted you to this home? Why did you prefer it over another?

1. Why do you want to buy now?

Finding out what drew your clients to this home could help you pinpoint benefits or features of the home that might appeal to other buyers as well.

2. What do you think buyers will like or dislike about your home? Although this question is similar to Question 1, it is helpful to learn which features to emphasize versus which ones to downplay. The responses also may make you aware of the potential drawbacks of the property and help you address them in some positive fashion.

3. What is the main reason you want to sell? Your clients may want to downsize, to find a quieter neighborhood, or to move closer to family. Their answer will not only give you more insight into the property but also help you understand what they might be looking for if you are asked to help them buy a replacement property. For example, if the seller wants a quieter place, then you may want to appeal to buyers who like to entertain or socialize with neighbors.

4. How many homes have you bought and sold in the past? The answer to this question will give you some idea about how experienced your clients are with real estate. If this is their first time selling, then you will likely need to walk them through the process, which can be nerve-wracking.

Often, life changes like marriage, a new child, or a job change can lead to the purchase of a home. It is important to get to know your clients and to build rapport with them, but it is also helpful to understand their motivations.

2. What price range are you considering? Some clients will know exactly how much money they can afford to put down and to spend on monthly mortgage payments, homeowners’ insurance, property taxes, and the other expenses usually associated with homeownership. Other clients, particularly those who are new to homeowning, may have little or no idea. In either case, this is your opportunity to begin aligning expectations with budget.

3. What is the most important room in a house? The answer to this question will tell you where you should focus for your home search. If the kitchen is your clients’ go-to room, then look for properties with a chef’s kitchen or, at least, adequate space for one.

4. What would be a deal breaker in a home? For some, this is an easy question to answers; for others, it is not. Is it the architectural design or style? Is it proximity to work or school, or access to public transit? Is it the reputation of a particular school district? Is it the shopping or recreation amenities that the surrounding community has to offer? Knowing the answer to this question will help you narrow the search and avoid wasting time showing properties that will not appeal to your clients.

5. How long do you plan to live in this home? 5. Did you have any bad experiences during your past transactions? If so, what were they? Just because clients have bought or sold in the past does not mean that this transaction will be easy. Because they may have been burned in the past, it is beneficial to know upfront what happened so you can reassure them that you will do what you can to make the current process go more smoothly.

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If your clients plan to stay only a few years, then perhaps some compromises can be made now in the hope of getting all their wants and needs met down the road. On the other hand, if this is their forever home, then you need to discover their priorities and focus your efforts on meeting them.

6. Have you looked at homes online? If so, what websites do you visit frequently? It may seem like everyone looks at real estate online, but some may not. In those cases, you will need to make a conscious effort to recommend properties for them to look at. For internet-savvy buyers, it is good to know where they are looking and to suggest a process by which they send you the properties that they find attractive and within their price range.

Questions Clients Might Ask a REALTOR®

THE REALTOR® PLAYBOOK

1. How long have you been a REALTOR®? It is important to answer this question honestly! If you have not been in real estate very long, emphasize your reason for becoming a REALTOR®, your enthusiasm, and your willingness to help.

2. Do you have any special education, certifications, or designations for real estate? Don’t let those certifications and designations go to waste! Some clients may place a high value on education so this could be the thing that helps you stand out from the crowd.

3. In which neighborhoods or geographic areas do you specialize? Are you familiar with the area in which I am selling (or buying)?

Ten Questions to Ask Your REALTOR® 1. How long have you been a REALTOR®? 2. Do you have any special education, certifications, or designations for real estate?

4. How many buyers did you help close on a home in the past year?

3. In which neighborhoods or geographic areas do you specialize? Are you familiar with the area in which I am selling (or buying)?

It is important to distinguish how many buyers you helped close on a property in the past twelve months. Buyers want some assurance that you will go the distance for them.

4. How many buyers did you help close on a home in the past year?

5. How many homes have you sold in the past year?

Again, be honest. If you do not have experience working in a particular neighborhood or geographic area, admit it, but do your research before a listing appointment.

REALTOR®

Every should know this figure by heart! Sellers want to know you can walk the talk.

6. On average, what percentage of the asking price do you get?

Another figure to know off the top of your head. It is important not only to close a sale but also to get more than the asking price. This can be a good segue into the conversation about pricing right.

7. How often will you be in contact with me?

8. Do you have any clients whom I can contact for references?

Ideally, you want to be in contact with clients as often as they prefer so it is best to set these kinds of expectations early.

8. Do you have any clients whom I can contact for references? It is important to have past clients whom you can call on for references. If you are working with first-time buyers, it would be ideal to have another recent first-time buyer to whom you can refer these clients.

9. During the transaction, will I be working primarily with you or with other members on your team?

9. During the transaction, will I be working primarily with you or with other members on your team? 10. With how many other buyers and sellers are you currently working?

If you have a team, let them know at the outset who will be assisting you with the transaction. Again, this is about setting expectations.

Visit www.ocrealtors.org/questions

10. With how many other buyers and sellers are you currently working? Be upfront in answering this question. If you are working with several clients, say so. Your potential new client might see that as a positive because you are doing a lot of business and are obviously successful. Working with several clients also can be construed as a negative indicating that you are too busy to take on additional work. Reassure your clients that you have adequate time to dedicate to helping them meet their real estate needs, whether they are buying or selling. OC REALTOR®

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THE REALTOR® PLAYBOOK

Learning from Experience:

Ken Bowensays that a career in

real estate seems to have been his destiny. As a preteen, his first “real job” was delivering newspapers on his bicycle. He recalls that a local REALTOR® asked him if he would also distribute marketing materials throughout the neighborhood. Ken agreed to do so and says that, from this experience, he learned the importance of marketing and advertising. Ken and his dad opened a residential real estate business in Orange County in the early 1990s. "Serving well over one thousand families has been one of the most gratifying aspects of my job,” says Ken. “Words cannot express what it feels like to receive a hand-drawn picture from a young child thanking us for a new home.” Ken can be reached at ken@thebowenteam.com.

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OC REALTOR®

Doug Echelberger,

a lifelong resident of San Clemente, may have inherited his passion for real estate. His family owned and operated San Clemente Real Estate, a brokerage that served that beachside community for more than twenty years. Doug earned a Bachelor of Arts in Entertainment Management from the University of the Pacific in Stockton, California, with a minor in business management and communications. Now the veteran of some twenty-seven years in real estate, he is chief executive officer of the Echelberger Group and reports that he has “helped countless sellers achieve and often exceed their real estate goals in record time.” Doug has successfully closed more than one thousand transactions and was marked as a multi-million-dollar producer from 1998 through 2017. He can be reached at doug@echelberger.com.

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Tips from Two Top Producers Although experience is an excellent teacher, the experience from which you learn need not always be exclusively your own. Often, you can save time and avoid costly missteps by learning from the experience of others. By Sherri Butterfield WRITER AND EDITOR “Experience is the teacher of all things [Ut est rerum omnium magister usus],” wrote Julius Caesar in his commentaries on the Civil War. And while many experts agree that experience is the best teacher, must the experience you learn from be exclusively your own? To put it another way, if you are relatively new to a business, might you be able to learn more quickly from the experience of others who have preceded you rather than having to ferret out everything for yourself, sometimes learning through trial and error? Might you be able to avoid some of the trials and make fewer errors by taking a tip or two from those who already have had the experience and acquired the wisdom that came with it? Believing that, for real estate, the answer to these questions is an emphatic yes, OC REALTOR® invited several successful REALTORS® to offer advice based on their own experience. Two of these REALTORS®—Ken Bowen and Doug Echelberger—graciously agreed to do so.

Six questions were sent separately to these two REALTORS® by email. The answers they provided are printed below. Although the answers are in their own words, in some instances, their responses have been condensed.

1. Real Estate is a relationship business. Where do you find new clients and how do you build effective relationships with them? Ken: We have one of the largest marketing budgets in our area and invest heavily in sending some of the finest-quality mailers to more than five thousand homes on a regular basis. We continue to advertise in print publications targeted to the neighborhoods in which we specialize and to Orange County business leaders, movers, and shakers. Our relationships are built on trust. Our clients immediately realize that we always put their needs before our own. It’s all about surpassing expectations and not about closing a deal.

"It’s all about surpassing expectations and not about closing a deal."

Doug: I am in my twenty-seventh year of practicing real estate. New clients come to me through referrals and relationships that I have developed over the years. However, if I were starting fresh again, I would focus on building relationships with other professionals—for example, CPAs, trust attorneys, family law attorneys, and financial planners—in other words, cultivating a professional farm rather than a geographic one. Offering prospects quick valuations, property information, or answering general questions for them and their clients can develop fruitful relationships over time.

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2. You have been very successful in what can be a very competitive business. What is the key to your success? Ken: Always putting our customers first! We literally make ourselves available to our clients as close to 24/7 as it gets. Knowing your areas and inventory is key. This gives us the ability to connect more buyers and sellers without wasting valuable time. Doug: The key to my success has been simple but very consistent throughout my career. I studied the sales process and the language of effective communication. I learned to be quiet and listen. I constantly recorded myself to hear what I sounded like when talking to people. I studied home pricing, floor plans, neighborhoods, and the data that the Multiple Listing Service provided. I learned every paragraph of the Purchase Agreement so I knew how to spell out exactly what my clients wanted. Essentially, I did not want ever to be caught off guard on a question about a house, a contract, or a disclosure document. I always answered my phone and returned messages. That last sentence is likely the most important because I still get agents who are surprised that I answer my calls and return their messages, regardless of how minor the question seems. That is how you build good agent relationships and work well with others.

3. What certifications, courses, or coaching (if any) have been especially helpful to you in building your career?

"It is important to always be sharpening your skills."

Ken: I believe it is important to always be sharpening your skills. I am an early riser and believe you should start each day with the goal of improving yourself and the experience you are able to offer your customers. As a broker and a licensed agent for thirty-five years, I recognize that you should never be complacent and always strive to accelerate to the next level.

Doug: I liked the simplicity of Mike Ferry when he was teaching back in the 1990s. His son Matt was teaching Neuro-Linguistic Programming (NLP) and mirror and matching techniques. I’ve seen what his other son Tom is teaching today, and not much has changed from the basics back in those days. I was involved with their coaching program as a student for years and enjoyed the accountability. I have always been open to business coaching and have participated in other programs with Tony Robbins. Creating motivation was always key to keeping a focused path in my career.

4. What, in your opinion, separates you from the competition? Ken: Honestly, I think it goes back to, “What you put in is what you get out.” I have been doing this full throttle, so to speak, for more than thirty-five years and have been fortunate enough to build a very strong foundation with some amazing customers and some of the best team members in the industry. Doug: What I said about the “key to success” is what separates me from a fair amount of agents because they simply don’t take the time to learn their craft. I compete fiercely with myself to improve on what I have done in the past, not on what my current competitor is doing. I practice staying calm and proactive in stressful situations. I keep my emotions within the lines and act professionally at all times. All of what I am saying sounds simple—and it is—but it takes a lot of practice, and that is what separates me from others.

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OC REALTOR®

THE REALTOR® PLAYBOOK

5. What methods do you use for staying in touch with clients after the deal closes so that they will rely on you for their future real estate needs and will recommend your services to family members and friends? Ken: Our customer appreciation promotions keep us in front of our customers for many years after they do busines with us. We have customers who are shocked that we still follow up with them ten, fifteen, and even twenty years after we have done business with them. Doug: We stay in touch using our customer relationship management (CRM) software for reminders and using market updates to keep them informed. We also call one or two times a year to touch base and check in to see how they are doing and if they have any real-estate needs. We keep it simple because that is the way I liked to be followed up with after working with a salesperson.

6. What one piece of advice would you give to someone who is just beginning a career in real estate? And what advice would you give to experienced agents who are looking to build their business? Ken: For new agents, connect with a top-producing team. The knowledge and strength of a proven team is hard to duplicate, and it would take you many years to obtain these skills on your own. For experienced agents, continue to sharpen your skills and expand your reach. Doug: For new agents, I would consider a coaching program, a mentor program, or working on a team. It will be the fastest way for you to learn and gain experience. It will also give you exposure to other producing agents, and exposure is going to be the key to your ability to succeed in real estate. Experienced agents who want to build their business should consider ways in which they can leverage everything in their business except contact with clients, negotiations, and going on appointments. If you are doing something an assistant or a marketing person can do better, then hire someone to do it. This will give you more time to focus on money-making activities. There are too many hats to wear in our business for a successful agent to "There are too many wear them all. Mike Ferry told my twenty-five-year-old self, “If you don’t have hats to wear in our an assistant, then you are one.” That made me mad because I thought I was a REALTOR . However, he was right, and I hired my first assistant when I had no business for a business, and the pressure of giving her something to do made me go out and successful agent to find new business. wear them all." ®

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THE REALTOR® PLAYBOOK

It Pays to Use a

REALTOR By Michelle McCann

What is the value of using a REALTOR®? Clearly identifying and communicating the added value you bring to a transaction as a REALTOR® is essential to being able to sell yourself and your services to both buyers and sellers. All REALTORS® should assume that potential clients are thinking Does it pay to use a REALTOR®? To answer this question, Orange County REALTORS® has assembled a Marketing Toolbox of resources for you to use in advertising yourself and communicating your worth to potential clients. Visit www.ocrealtors.org/toolbox to download ready-to-use marketing collateral for your social media, print, website, and even your listing presentation. In addition, Orange County REALTORS® will be launching a social media advertising campaign to continue promoting the REALTOR® brand, to communicate the value of using a REALTOR®, and to tell readers how to find a REALTOR® at www.ocrealtors.org/find-realtor.

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OC REALTOR®

Here are some of the Graphics that are available

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Sodme Wit an Wisdom

A TOUCH OF HUMOR

s e m i T g n i x a T r o f By Sherri Butterfield WRITER AND EDITOR

“The only difference between death and taxes is that death doesn’t get worse every time Congress meets.”

“The hardest thing to understand in the world is the income tax.” —Albert Einstein

“The only difference between a tax man and a taxidermist is that the taxidermist leaves the skin.” —Mark Twain

—Will Rogers

“Taxes are what we pay for civilized society.” —Oliver Wendell Holmes, Jr.

MARCH | APRIL 2021

OC REALTOR®

Photos: www.istockphoto.com/AzmanJaka

“[Government’s] great contribution to human wisdom . . . is the discovery that the taxpayer has more than one pocket.” —H. L. Mencken

A TOUCH OF HUMOR

“I’m proud to be paying taxes in the United States. The only thing is—I could be just as proud for half the money.” —Arthur Godfrey

“Thank goodness we don’t get all the government we pay for.” —Will Rogers

“We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.” —Winston Churchill

“Government does not tax to get the money it needs; government always finds a need for the money it gets.” —Ronald Reagan

“Tax reform is taking taxes off things that have been taxed in the past and putting taxes on things that haven’t been taxed before.” —Art Buchwald

“In this world, nothing can be said to be certain, except death and taxes.”

“A government that robs Peter to pay Paul can always depend on the support of Paul.” —George Bernard Shaw

—Benjamin Franklin

OC REALTOR®

MARCH | APRIL 2021

OC REALTOR®

AFFILIATES IN ACTION

AFFILIATES

HELP EDUCATE NEW Reem

Inna

KurdMisto

Peshkova

REALTOR

Van Gordon

Joe Joe

Pierce Pierce

MEMBERS Kerri Finch

IN FEBRUARY Because of the limitations placed on group gatherings during the COVID-19 pandemic, Orange County REALTORS® is offering its regular New REALTOR® Orientations online.

MARCH | APRIL 2021

OC REALTOR®

A special thank you to the following Affiliates who provided short video clips to help educate the new REALTOR® members who joined Orange County REALTORS ® in February: Affiliate South Chair Joe Pierce, Iron Key Escrow; Affiliate South Co-Chair Reem KurdMisto, National Pacific Lending; Affiliate North Chair Kerri Finch, J&J Coastal Lending; Affiliate North Co-Chair Van Gordon, Van Gordon Insurance Agency; and Inna Peshkova, Quantum Works.

MENTIONS

MENTIONS Dave, I want to thank OCAR Cares for its financial assistance, which allowed me to cover a large majority of the medical expenses from my surgeries. I am still recovering, but this was a huge help. Thank you and Orange County REALTORS® for stepping up and helping. I plan to donate to OCAR Cares as much as possible. Again, thank you from my heart! Sincerely, James Thor Keller Williams Realty

EDITOR’S NOTE: This email was addressed to Orange County REALTORS Chief Executive Officer Dave Stefanides. OCAR Cares is a relief fund created to assist REALTOR® and Affiliate members of Orange County REALTORS® who are suffering financial hardship because of the onset of a major illness, an accident, or some other unforeseeable life-changing event. Members may donate to the OCAR Cares Foundation Member Relief Fund when paying their annual dues or at any time throughout the year. To receive funds from OCAR Cares, members must meet certain eligibility requirements. Eligibility Guidelines and the OCAR Cares Application are available at ocrealtors.org. ®

You Laid It Out Well Sherri, I received a copy of the November/December 2020 issue of OC REALTOR® yesterday. You laid out my article very well in the magazine. Thank you for helping me get the word out. I appreciate the opportunity to assist the REALTORS® and to provide them with this critical information for homeowners.

Senate Bill Offers Some Relief For Beleagured Taxpayers Senate Bill 219–Property Taxation, which was introduced by Senator Mike McGuire (D-Sonoma), seeks to codify the county tax collector’s ability to cancel late payment penalties or other charges for property taxpayers who have experienced financial hardship as a result of the shelter-in-place order. The statutory authority offered by this bill would provide a tool for county tax collectors to use in assisting those adversely impacted by the COVID-19 pandemic while sustaining revenue predictability for counties and local agencies that rely on property tax for the majority of their general funds. Orange County Treasurer–Tax Collector Shari Freidenrich reports that the Orange County Board of Supervisors voted 4-0 in favor of this bill and that her office has sent a letter of support.

Stay safe. Shari L. Freidenrich Orange County Treasurer EDITOR’S NOTE: Shari’s article titled “Reminder: It’s Time to Pay Your Property Taxes” appeared on pages 26–27 in the November/December 2020 issue of OC REALTOR® and explained that the first installment of the FY 2020–21 Property Tax bill was due on November 1, 2020, and delinquent if not postmarked by December 10, and that the second installment was due on February 1, 2021. Shari reports that a bill being considered by the California Legislature would waive penalties for all taxpayers, not just homeowners and small businesses, and would apply to both secured and unsecured property taxes if paid by June 30, 2021. She has promised to keep us posted regarding the progress of this bill.

CALL FOR MENTIONS Media postings and emails intended for possible publication in this magazine should be sent either to Director of Communications and Programs Sabrina Blair at Sabrina@ocrealtors.org or to Writer and Editor Sherri Butterfield at Sherri@ocrealtors.org. All written material may be edited for content, length, or style and may appear either online or in print. Emails become the property of Orange County REALTORS®. Although some may be answered, none will be returned. OC REALTOR®

MARCH | APRIL 2021

Photos: www.istockphoto.com/ThitareeSarmkasat

Thank You, OCAR Cares!