The Residential Specialist, January/February 2012

J a nua r y / Feb r ua r y 2 0 1 2

THE RESIDENTIAL SPECIALIST

Building Trust in Tough Times Fixing the Housing Market: CRSs Weigh in

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J an u ar y / F e b r u ar y 2 0 1 2

Surge AHEAD Winning Foreclosure and Short Sale Listings

Mark Minchew, CRS

New CRS President Mark Minchew looks to create a fresh wave of member engagement.

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residential The

S pecia li s t

January/February 2012 VOL. 11, NO. 1

18 features

30

18 Surge Ahead

By Michael Fenner New CRS President Mark Minchew looks to create a fresh wave of member engagement with CRS chapters and education.

22 Golden Opportunities

By Daniel Rome Levine Foreclosures and short sales can be a boon to business, but winning such listings requires strategic work with banks and clients.

26 Trust Funds

By Regina Ludes CRSs reveal how they overcome client skepticism to build lasting relationships.

30 The Big Fix w w w . c r s . c o m Cover photo by Michael Thad Carter

By Gwen Moran What will it take to turn the housing market around? CRSs offer their perspectives on what lenders, government officials and real estate agents can do to address current problems and prevent them in the future. www.crs.com | 1

residential The

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16 departments 4 President ’s Message 5 Q uick Takes

9

By Mark Minchew, CRS

Housing and the 2012 election; NAR goes global; homebuyer smarts; and more

9 Great Finds 10 Technolo gy Green closing gifts

By Dan Tynan Managing mobile devices

12 Trends

By Caroline Mayer Shadow inventory revisited

14 Pi p eline

By Mary Ellen Collins Listing presentation makeover

16 Up Close

inside CRS FROM 36 NEWS THE COUNCIL 2011 NAR Conference Recap New CRS Products Program Chapter Updates Your Home newsletter

l 46 Referra Marketplace 48 Ask a CRS

Advice from the country’s top agents

Clinton Howlett, CRS Century 21 Brock & Associates Wilmington, N.C.

34 Good Read

Reviewed by Allan Fallow Taking People With You: The Only Way to Make Big Things Happen

By David Novak

2 | January/February 2012

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residential The

Coming In The Next Issue ... n

Pulse Check

What’s the state of the housing market? CRSs offer an up-close look at what’s happening in local markets around the country. n

Face Time

Using Facebook effectively for business requires turning “likes” into loyalty. n

Waiting Game

Keeping sellers happy when their homes are stuck on the market can be a challenge. n

Climate Change

Agents who turned their businesses around share insights about how and why they made it happen.

Would you like to be considered as a source for a future story in The ­Residential Specialist? Send an email to mfenner@crs.com to be added to our potential source list. To see a list of the topics we’ll be covering, check out the magazine’s 2012 Editorial Calendar online at www.crs.com/File/ PDF/editorial_cal.pdf.

PLUS: Email marketing: Is it dead?

Specia li s t

EDITOR Michael Fenner Email: mfenner@crs.com Tel: 800.462.8841, ext. 4428 Fax: 312.329.8882 ASSOCIATE EDITOR Regina Ludes Email: rludes@crs.com Tel: 800.462.8841, ext. 4404 Fax: 312.329.8882 2012 COMMUNICATIONS ADVISORY PANEL Moderator: Colleen McKean, CRS Co-Moderator: John W. Goede, CRS 2012 COMMUNICATIONS ADVISORY PANEL MEMBERS Israel V. Ameijeiras, CRS; Shelly Campbell, CRS DeDe J. Carney, CRS; Gretchen Conley, CRS Lois Cox, CRS; Bonnie Dailey, CRS Wendy Furth, CRS; Geri Kenyon, CRS Rita McNeil, CRS; Nancy Metcalf, CRS Thomas M. Patterson, CRS; Rae Roeder, CRS CONTRIBUTING WRITERS Mary Ellen Collins, Daniel Rome Levine, Gwen Moran OFFICERS: 2012 President Mark Minchew, CRS Chief Executive Officer Nina J. Cottrell 2012 President-Elect Mary McCall, CRS 2012 First Vice President Ron Canning, CRS 2012 Immediate Past President Frank Serio, CRS

PUBLICATION MANAGEMENT

Tel: 202.331.7700 Fax: 202.331.2043 Publishing Manager Andrea Gabrick Email: agabrick@tmgcustommedia.com Advertising Manager Andrea Katz Email: akatz@tmgcustommedia.com Tel: 202.721.1482 Project Manager Katie Mason Art Director Josh Coleman Production Artist Tommy Dingus The Residential Specialist is published for Certified Residential Specialists, General Members and Subscribers by the Council of Residential Specialists.

The magazine’s mission is: To be a superior educational resource for CRS Designees and Members, providing the information and tools they need to be exceptionally successful in selling residential real estate.

The Residential Specialist is published bimonthly by the Council of Residential Specialists, 430 North Michigan Ave., Suite 300, Chicago, IL 60611-4092. Periodicals postage paid at Chicago, IL, and additional mailing offices.

Change of address? E-mail requests to crshelp@crs.com, call Customer Service at 800.462.8841 or mail to CRS at the above address.

The Residential Specialist (USPS-0021-699, ISSN 15397572) is d ­ istributed to members of the Council as part of their membership dues. Non-members may purchase subscriptions for $29.95 per year in the U.S., $44.95 in Canada and $89.95 in other international countries. All articles and paid advertising represent the opinions of the authors and advertisers, not the Council.

POSTMASTER: Please send address changes to The Residential Specialist, c/o Council of Residential Specialists, 430 North Michigan Ave., Suite 300, Chicago, IL 60611-4092.

COPYRIGHT 2012 by the Council of Residential Specialists.

All rights reserved. Printed in U.S.A.

www.crs.com Ja nua r y/

Feb r ua r y

2012

DENT THE RESI

T BUILDING TRUS in Tough Times

IALI IAL SPEC

FIXING THE RKET: HOUSING MA CRSs Weigh In

ST ■

JANUARY /FEBRUAR Y 201

SURGE

New CRS president Mark Minchew looks to create a new wave of member engagement.

www.crs.com | 3

President’s Message | News from Mark Minchew, CRS

Michael Thad Carter

What Are We All About?

I do not believe there is a residential real estate entity anywhere whose educational curriculum is superior to that offered by the Council and its instructors.

What is the value of knowledge if our actions and behaviors are not changed as a result of that knowledge?

When I first heard these words, they were spoken by real estate teacher and coach Verl Workman. They have stayed with me for some years now. Truly, what is the value of knowledge? As CRSs, we pride ourselves on the knowledge we have obtained, and it is no coincidence that our designees are some of the highest-producing agents in America today.

So, what actions or behaviors did we change that helped make us more successful than we were before? Did the Business Planning and Marketing course help you improve your planning skills and market yourself and your services more effectively? Or did the Listing and Sales courses improve your techniques for obtaining more business? Perhaps the Technology, Referral and Financing courses gave you the edge you needed to help another family with their real estate needs. Even though we offer all these courses, in addition to eLearning courses and webinars that cover timely topics, many of our own designees do not avail themselves of these opportunities.

When I left the education field for real estate (see cover story, page 18), I found the average agent and broker did not possess the knowledge and skill they should. When I found CRS, I found the answers to myriad practical real estate questions, but I also found much more. I am a lifelong learner, and I truly believe that when I stop learning, I stop living. I take many courses from many providers, but none are more valuable than the CRS courses. I do not believe there is a residential real estate entity anywhere whose educational curriculum is superior to that offered by the Council and its instructors. It is imperative that we continue to gain knowledge and share this knowledge with other REALTORS® in an effort to better serve the public and raise our industry’s reputation. I believe we CRS Designees are defined by the desire to produce Better Educated REALTORS®.

So if you need a lift in your business, or if you know any agents who do, don’t forget about the outstanding education the Council offers. The knowledge you will gain can help you change your actions and behaviors in a positive way as you make your way down the proven path to success. Your business will be glad you did.

See you in the trenches,

4 | January/February 2012

QuickTakes | Industry headlines, statistics and trends

A

for Housing How important is housing to American voters? For nearly seven in 10 Americans, political candidates’ positions on housing will be an important consideration in the 2012 presidential and congressional elections, according to a national survey released by real estate listings site Move, Inc. The housing issue will be particularly important for 70.7 percent of Millennials (those born between approximately 1980 and 1999), who represent the next generation of homebuyers. This key demographic is likely to have a significant impact on election results in 2012, as it did in 2008.

While a majority of Americans (81.7 percent) consider housing to be a critical component of the nation’s economic recovery, most don’t expect to see housing conditions improve before the next election.

Nearly three-fourths (73.1 percent) believe conditions for buying a home one year from now will be the same or worse than they are today, while only 23.2 percent believe conditions will improve.

Nearly one-third of Americans (30.9 percent) believe helping troubled homeowners avoid foreclosure should be a priority in the next president’s first 100 days in office, while 26.4 percent advocate keeping interest rates low and 14 percent seek more affordable mortgage credit.

Staying Put ... For Now High unemployment and continuing concerns about the economy are prompting more Americans to stay in their current homes rather than move, according to new data from the U.S. Census Bureau. In 2010, 35.1 million Americans, or 11.6 percent of the population, moved to a new home, down from 12.5 percent the previous year.

The two generations that have the most potential impact on the housing market — baby boomers and young adults — have put their moving plans on hold. Baby boomers are delaying retirement plans due to financial losses, and young adults are increasingly moving back in with their parents, the data shows. The one bright spot is the growth of urban, high-tech college areas, such as Raleigh, N.C., and Austin, Texas, which continue to attract young professionals.

Free and Clear?

An estimated 79 million Americans belong to the baby boom generation, and many of them are feeling the effects of the struggling economy. A study by the AARP Public Policy Institute finds that housing costs are becoming increasingly burdensome for many older Americans. In 2009, 36 percent of homeowners over age 50 who had mortgages devoted at least 30 percent of income to housing costs, up from 29 percent of homeowners in 2000. In addition, fewer homeowners over age 50 owned their homes free and clear in 2009 than in 2000.

In 2000:

38% owned with a mortgage 40% owned free and clear 20% rented In 2009:

40% owned with a mortgage 36% owned free and clear 20% rented Source: AARP Public Policy Institute, 2011

Homeownership Risk?

Nearly six out of 10 U.S. homeowners (58 percent) say declining home values pose a greater risk to their home than catastrophes, such as fire (15 percent), tornado (9 percent) or hurricane (8 percent), according to a study commissioned by property and casualty insurance provider Home Value Protection. While 52 percent of those surveyed say homeownership is part of the American Dream, 37 percent believe buying a home in the current market is risky. More than half of homeowners (56 percent) say they regularly monitor home prices in their local market, and those homeowners are twice as likely to monitor housing prices as they are to monitor their cholesterol level. www.crs.com | 5

QuickTakes | Industry headlines, statistics and trends

Poised for a

NAR Goes Global

Rebound

With a low unemployment rate of 3.5 percent and a growing economy, Bismarck, N.D., is expected to see housing values appreciate by 5.6 percent in 2012, according to a recent forecast

by Veros Real Estate Solutions.

5 Strongest Housing Markets in 2012 1. Bismarck, N.D. 2. Honolulu 3. Fargo, N.D. – Minn.

4. Harrisburg/Carlisle, Pa. 5. Pittsburgh, Pa.

Ilin Sergey/Veer

The NATIONAL ASSOCIATION OF REALTORS® (NAR) and Move Inc. have launched REALTOR.com International, a website that displays both domestic and foreign property listings to buyers across the globe.

At launch, the site listed properties in 11 countries, including Brazil, Bulgaria, Croatia, France, Italy, Portugal, Romania, Serbia, Slovakia, Spain and the United States. The website provides an enhanced translation option in 11 languages, including Chinese, Dutch, English, French, German, Italian, Japanese, Korean, Portuguese, Russian and Spanish. It can be accessed from the REALTOR.com home page or at www.REALTOR. com/International.

According to NAR, more than 2.6 million international visitors searched for U.S. real estate on REALTOR. com in the three months preceding the international sites’ launch. “Increasingly, more and more REALTORS® are working with international clients who want to buy property in the U.S., and the new REALTOR.com International website will not only allow REALTORS® to offer their expertise and knowledge to a broader audience, but will also bring buyers and sellers together across the globe,” says 2011 NAR President Ron Phipps.

5 Weakest Housing Markets in 2012 1. Bakersfield, Calif.

2. Reno/Sparks, Nev. 3. Deltona/Daytona Beach/ Ormond Beach, Fla. 4. Las Vegas/Paradise, Nev. 5. Fresno, Calif.

Suburban Poverty

America’s suburbs — once considered a symbol of stable and prosperous living for the middle class — are becoming increasingly poor, according to the Brookings Institution’s analysis of U.S. Census data. Since 2000, the poor population in the suburbs has risen by 53 percent, compared with a 26 percent increase in the cities. The recent recession accelerated the pace: Two-thirds of new suburban poor were added between 2007 and 2010, totaling 5 million people.

The biggest increases have occurred in communities that were hit hardest by the housing collapse, such as Cape Coral, Fla., and Riverside, Calif., according to Brookings.

The influx of poor residents has put more pressure on suburban communities to deal with an unfamiliar set of challenges, such as: how to provide residents with key social services; how to get residents to those services without public transportation; and how to pay for it all amid a budget crunch that has hit virtually every community in the U.S. 6 | January/February 2012

Buyer and Seller Profiles First-time Buyers

Median age: 31 Median income in 2011: $62,400 Home size purchased: 1,570 square feet Cost of home purchased: $155,000 Monthly mortgage payment: $794 Market share of all buyers: 37 percent

Repeat Buyers

Michael Roeder/Veer

Median age: 53 Median income: $96,600 Home size purchased: 2,100 square feet Cost of home purchased: $219,500 Monthly mortgage payment: $1,006 Market share of all buyers: 63 percent

Home Sellers

Median age: 53 Median income: $101,500 Average time on market: 9 weeks Moved to a larger home: 46 percent Moved to a smaller home: 23 percent Median distance of move: 20 miles Median time in the home: 9 years Source: 2011 NAR Profile of Home Buyers and Sellers

Succession Planning Gone Wrong The key to creating a good business-leadership succession plan may hinge on understanding where such plans typically go wrong, according to a study by Cutting Edge Information, a business-intelligence research and consulting group.

Its report, Succession Planning: Preparing Tomorrow’s Leaders, outlines several mistakes organizations make when preparing succession plans.

Many succession plans fail because organizations do not take into account the company’s mission, goals and organizational values during the succession planning process, instead focusing on short-term needs. Another common mistake is the tendency to choose individuals who will help maintain the status quo in the business. Companies also tend to experience problems when they base a successor’s job requirements solely on the current jobholder’s responsibilities, or if they rely on the incumbent to choose their own replacement.

Successful succession plans incorporate a balance of objective criteria and subjective judgments about candidates’ ability to take the organization to its maximum potential, the study finds.

They also focus on candidates with greater depth and breadth of experience and less on industry-specific skills.

Fixed-Rate Rules Fixed-rate mortgage loans accounted for more than 95 percent of all refinance loans in the third quarter of 2011, according to a report by Freddie Mac. Nearly two-thirds of refinancing borrowers who had a hybrid ARM (63 percent) chose a fixed-rate loan during the third quarter, while the remaining 37 percent refinanced into a similar product.

An increasing number of refinancing borrowers chose to shorten their loan terms.

Of those who paid off a 30-year fixed-rate loan, 40 percent chose a 15-year or 20-year loan, the highest such share since the second quarter of 2003. The strong refinance activity is attributed to continuing low interest rates on fixed-rate mortgages, which averaged 4.29 percent for 30-year loans and 3.47 percent for 15-year loans during the third quarter, according to Freddie Mac’s Primary Mortgage Market Survey.

www.crs.com | 7

QuickTakes | Industry headlines, statistics and trends

Small Business and Social Media Small businesses received customer recommendations by: Fans on Facebook 69% Networking on LinkedIn Followers on Twitter 44%

62%

Seeking First-Time Buyers

Fewer first-time buyers purchased homes in 2011 than in 2010, according to the 2011 National Association of REALTORSÂŽ Profile of Home Buyers and Sellers. The percentage of first-time buyers among all buyers who purchased homes in 2011 was 37 percent, down from nearly 50 percent in 2010, thanks in part to tighter lending requirements and the expiration of the homebuyer tax credit.

Despite the difficulties in the housing market and tighter lending conditions, most buyers still believe in the value of homeownership. More than three out of four homebuyers (78 percent) say their home is a good investment, and 45 percent believe it is a better investment than stocks.

Small business received traffic to their website by: Facebook 59% LinkedIn 55% Twitter 35% Small business received sales leads through: Facebook 42% LinkedIn 36% Twitter 16% Source: Crowdspring

Out of Touch

While most homebuyers seem to understand the home-buying process, many have unrealistic expectations about homeownership, according to a Zillow survey. More than two in five buyers surveyed (42 percent) believe home values typically appreciate by 7 percent a year, when in reality, home values rise an average of 2 percent to 5 percent a year.

While buyers are fairly knowledgeable about how to purchase a home, they are confused about several details, the survey finds. For example, 41 percent of buyers think they are required to purchase private mortgage insurance (PMI), regardless of the amount of their down payment, when PMI is typically required only on down payments of less than 20 percent.

More than half of all buyers (56 percent) believe an appraisal determines if a home is in good condition, when in fact that is the purpose of an inspection. More than one-third of prospective buyers (37 percent) believe buying homeowner’s insurance is optional, when in reality, lenders require borrowers to purchase insurance to protect their investment. Nearly half (47 percent) believe buyers own a home after the purchase contract is signed, not realizing that the agreement merely kicks off the closing process, which could take several months.

8 | January/February 2012

Great Finds | Tools of the trade

green light The best closing gifts are the ones that keep on giving. For a new spin on the tried-and-true, go green when shopping for client gifts this year. Help homeowners help the planet — and leave a lasting impression — with these eco-friendly options.

waste not www.norpro.com Composting is catching on, but it can be a bit of a hassle — where to store all those unsightly food scraps and coffee grinds? Make it easy — and easy on the eyes — with a decorative kitchen-countertop composting pail from Norpro. The ceramic compost crockpot is 10.5 inches tall and includes a charcoal filter to prevent odors as well as a sturdy stainless steel handle to carry the pail from kitchen to garden with ease.

25

shock value www.bluelineinnovations.com It might be more practical than pretty, but your clients are sure to appreciate the gift of energy efficiency. Help them pinpoint which home appliances are draining energy (and driving up the electricity bill) with the easy-to-use wireless PowerCost Monitor. The device scans the home’s power meter to provide real-time usage information, which can help owners make simple changes to their energy usage that can save them money.

Price varies by retail location; starts at

85

basket case www.itsonlynaturalgifts.com Gift baskets can seem old hat, but not when you mix it up with an organic and all-natural set from It’s Only Natural Gifts. Build your own or choose from a variety of categories, including “Housewarming Gifts,” which range from snacks and pantry essentials to home goods and at-home spa treatments, many of which come in eco-friendly canvas bags or other reusable containers. For a truly green gift, consider the “Garden in a Bag” ($22.50), with seeds to grow kitchen herbs.

Prices vary

book smart www.amazon.com Have handy, eco-conscious clients? Help them become the greenest homeowners on the block with the expert ideas in DIY Projects for the Self-Sufficient Homeowner: 25 Ways to Build a Self-Reliant Lifestyle. This 160-page book offers tips and photographic step-by-step instructions for projects ranging from composting and container gardening to building a greenhouse and growing and transplanting seedlings.

13.59 www.crs.com | 9

Technology | Streamlining your business

juggling act Now that you’ve gone mobile, how do you go about managing all those devices?

57.9 percent of U.S. households own one to three electronic gadgets, while 36.4 percent own four to eight.

Source: U.S. Energy Information Administration, 2009 Residential Energy Consumption Survey

10 | January/February 2012

M

argaret Rome, CRS, has relied on pocket-sized computing devices to help run her real estate business since the Palm Pilot era in the late 1990s. Now the Baltimore-based solo practitioner never goes anywhere without an Apple iPhone on her belt and a 3G iPad under her arm.

“Wherever I am, that’s where my office is,” she says. “I can call up listings, take notes and do virtually everything else I need to do using my iPad.” Rome has learned to love and rely on her mobile devices for countless day-to-day business tasks. But for many REALTORS®, keeping track of a smartphone, laptop, tablet computer and a host of other devices, not to mention their respective power cords and accessories, can be a challenge. The goal, after all, is for the latest tech gadgets to enhance an agent’s productivity, not induce more headaches. CRSs who can develop a system to manage their own tangle of electronic gizmos and keep them safe,

secure, charged and synced will have a big leg up on the competition.

Cover the Important Assets Mobile devices tend to be easy to break and expensive to replace. One out of three smartphone owners lose or damage their handsets, according to a July 2011 survey by online contact management service Plaxo.

The average cost to repair a device can be 50 percent or more of the cost of a new one, according to online warranty specialists N.E.W. Customer Service Companies.

The first order of business is to keep the device protected. Rome keeps her iPhone in a cellphone case clipped to her hip and uses a Marware C.E.O. Hybrid case with a handstrap to carry her iPad. Marliss Gruver, CRS, with RE/MAX Four Seasons in Olympia, Wash., carries her iPhone in a bright pink shockproof case made by OtterBox. “I am always getting out of the car and having my phone fall out of my lap,” she says. “The OtterBox

Stephen Morris/Getty Images

By Dan Tynan

keeps it safe, and the pink color makes it easy to find in my purse.”

For her iPad 2, Gruver relies on a stainless steel cover from ZAGG that doubles as a Bluetooth wireless keyboard.

“It is the coolest thing ever,” she says.

Keep the Juice Flowing Agents who miss a call because their smartphone battery is dead may miss out on a major deal. That’s why Nick Jabbour, CRS, and vice president of Nest Seekers International in New York City, always carries spare batteries for his BlackBerry and power cables he can plug in to his MacBook laptop for a quick power boost if needed. “This business is so high speed you need access to information 24/7,” he says. “It’s especially important in the New York market because everybody wants everything yesterday.”

Margaret Rome always carries her charger with her, though she says battery life for her iPhone is so good she rarely needs it. She also keeps a charger in her car in case she or one of her clients needs a quick power boost.

To extend time between charges on a smartphone, turn off apps you don’t use that automatically run in the background, advises Brian Greenberg, a senior strategy consultant and founder of General System Dynamics, a Chicago-based provider of eDiscovery services and solutions. GPS and WiFi are big battery hogs, as are streaming music and downloading lots of data.

REALTORS® who need battery power on the go can purchase a portable battery pack like the iGo Charge Anywhere, a wallet-sized portable battery that works with a variety of devices. Or they can use the Powerbag, a backpack- or briefcase-style bag that features an internal AC-rechargeable battery and can charge up to four mobile devices at a time.

off with it. “I try to keep everything centrally located so I don’t go over here for this and over there for that,” she says.

Jabbour keeps identical charging mounts with a keyboard and external display for his MacBook in his office and at home. “The minute I arrive in either place everything synchronizes immediately,” he says. “With this setup, I’m able to pick up wherever I left off.”

Keep Everything in Sync Toting files from home to the office or juggling multiple versions of the same document can be maddening — and bad for business if important files get lost or the wrong version of paperwork accidentally gets filed. That’s why savvy CRSs rely on software programs like Dropbox or SugarSync that store data in the cloud and then sync it to a user’s desktop, laptop and mobile devices.

For $9 a month, Dropbox syncs files between Gruver’s iPhone, iPad, Dell laptop, and the desktop PC she uses at her office.

She simply installs a Dropbox app or client on each device and saves her files to the Dropbox folder. As a file changes, the software automatically updates copies of the file on its servers. When she wants to open that file on another device, Dropbox grabs the most recent copy off its servers.

“I used to keep everything in PDFs on a hard drive I carried from my home to the office and back,” she notes. “After forgetting it at the office 92,000 times I said ‘this is stupid.’ When I came across Dropbox it was a lifesaver. I can’t imagine not having it now.”

Jabbour also uses Dropbox to sync files between his desktop PC, MacBook, BlackBerry and iPad. When he needs a document he doesn’t have, he calls his assistant, who places it inside his Dropbox folder so he can download it no matter where he is.

Find Them a Good Home

Lock Them Down

Just like busy REALTORS®, these devices eventually need a place where they can kick back and recharge. Much to her husband’s chagrin, Gruver has turned her kitchen table into “command central,” keeping her laptop there and plugging all her devices into it so they can charge overnight. The exception: She keeps the iPad 2 in a cabinet with an electrical outlet inside, so the kids won’t run

Smartphones and tablets often store extremely sensitive financial data, the loss of which could cripple an agent’s business.

To prevent that, create a password for every device you use, says Greenberg, so thieves can’t access your data. Most devices let users set up passcodes and enable other security precautions to keep sensitive data secure, even if the device falls into the wrong hands.

Choosing a passcode will automatically encrypt the data on Apple iOS devices, Android phones and tablets, and BlackBerrys, scrambling it so a thief can’t access it, even if they physically remove the device’s memory and put it inside another machine. Apple, Google and RIM also offer apps that can locate a lost or stolen device when it connects to the Net, lock it down or remotely erase all the data from it. Make sure these apps are installed and enabled.

Back Them Up Losing a smartphone is bad, but losing the data that’s on it can be a disaster.

Savvy REALTORS® avoid the worst-case scenario by making regular backups of their contacts, schedules, email, applications and other data. iPad and iPhone fans can use iTunes to copy data to their computers or Apple’s iCloud service to keep backups on the Net. BlackBerry addicts can use RIM’s BlackBerry Desktop Manager to keep copies of their contacts and calendars on their computers; Android users may have to download an app like MyBackup Pro to accomplish the same task.

Beware of Malware Mobile devices are becoming a favorite target of scammers. Malicious software that pretends to be games or other mobile apps could end up stealing your data or rack up bogus pay-per-text charges, warns Dan Hoffman, chief mobile security evangelist for Juniper Networks. Android apps are a particular risk, since they undergo a less stringent approval process, but even Apple apps aren’t immune.

His advice: Pay $10 to $30 a year for a mobile security program like Lookout Mobile or Kaspersky Mobile Security, and don’t download apps without carefully researching them first. “Go to the vendor’s website and follow the download link from there,” he says. “Read reviews for the app that are published outside the app’s page in the market. That may cost you an extra three or four minutes per download, but it’s well worth it.”

Dan Tynan is a freelance writer based in Wilmington, N.C.

www.crs.com | 1 1

Trends | Today and tomorrow

waiting game

By Caroline Mayer

“We estimate that it will take 45 months to clear the national shadow inventory.

This is seven months below our peak estimate but three months longer than our estimate a year ago.”

Source: Standard & Poor’s Rating Services, Nov. 17, 2011

12 | January/February 2012

C

incinnati broker Larry A. Whited, CRS, CRB, braces himself every time there is good news about the real estate market. “At the slightest signal that things are looking better, we’re flooded with inventory. Then, we see a downturn in prices,” says Whited, who owns the Ohio-based online company WebMLS. net. “People who have wanted to sell their homes but have been holding them back are encouraged by the good news.”

Whited is experiencing the impact of what the real estate industry has come to call “shadow inventory,” those homes not officially listed for sale, but close to it. Generally, most economists refer to distressed properties when they talk about the shadow inventory: foreclosed homes already owned by banks

but not yet listed, houses in the foreclosure process and properties where owners are at least 90 days late in paying their mortgage.

But agents say those numbers — which, while on the decline, are still significantly high — overlook the large pool of homeowners who want to sell, but won’t at current prices. “Since the peak of our market [2008], I would say about 30 to 40 percent of the prospective sellers I speak to say, ‘I’ll wait for prices to go up,’ ” says Daniel Webster Johnson, CRS, a broker associate for Resort Brokers Real Estate in Breckenridge, Colo.

“Sellers are sitting in the shadow of the market [looking] for signs prices are getting better. When they see such signs, as they did in the summer of 2011, they put their properties on the market,” Johnson

faberfoto/Veer

How will so-called shadow inventory affect the real estate market in 2012 and beyond?

says. In Breckenridge, properties for sale in the summer of 2011 increased by more than 15 percent to 1,063 in August, “far more than the market could absorb,” he says. The result: Prices that had been stable for eight months dropped.

By mid-November, the inventory was down to about 800. “Where did those properties go? They became shadow inventory,” Johnson says. “You can expect these same properties to hit the market either next spring and summer — or when there are indications prices will go up.”

And while it’s tough to tell exactly how big an impact shadow inventory will have on home sales and price trends, there is a growing sense that it represents a significant challenge. Many market analysts and in-the-trenches REALTORS® have concluded that the “shadow” might cool off the housing recovery they hoped was starting to heat up.

Numbers Gain According to several recent surveys, the key components of the nation’s shadow inventory show a slow but steady decline. Daren Blomquist, director of marketing and communications for the foreclosure research firm RealtyTrac Inc., cites several key statistics.

In 2010, there were more than 1 million bank-owned, foreclosed homes not yet listed for sale. At the end of September, there were 709,000. Similarly, the number of homes in foreclosure dropped from about 1.2 million at the end of 2010 to 778,000 in late 2011. “Lenders have been slowing down the foreclosure process — in part because of concerns over the paperwork — while at the same time increasing the pace of short sales, all helping to clear out the inventory,” Blomquist explains.

Even so, he notes, “there is still a fairly significant chunk of inventory that the market needs to absorb,” especially properties where homeowners are delinquent in their mortgage payments. Delinquencies appear to be growing, with the latest report showing 3.6 million mortgages in arrears.

“We would estimate about half would end up on the shadow inventory sometime in the future,” Blomquist says.

As a result, he estimates the current shadow inventory to be as high as 3.3 million homes. “Based on current sales levels, that’s a 37-month supply of houses,” a sobering number, even if an improvement over last

year’s four-year supply. “Until these houses are absorbed, you won’t see any meaningful appreciation in home prices.”

Even more worrisome, Blomquist says, is the “wild card” recently uncovered in a new national RealtyTrac study, which found 12 million homes “underwater,” or worth less than the value of the mortgage loan. “That’s nearly four times the current shadow inventory and represents 27 percent of all loans out there,” he says. “It’s a little scary to think what would happen if all those folks started to walk away from their home or try to sell.”

Distressing News A recent Standard & Poor’s Rating Services report that found the value of the shadow inventory had shrunk from $433 billion to $405 billion concluded that “distressed loans continue to loom over the housing market and threaten to further depress home prices.”

Nationwide, S&P says, it will take 47 months to clear the shadow inventory — although that number varies greatly by region. Phoenix, for example, has one of the smallest inventories — one that would take 20 months to clear, while New York’s is among the highest, at 144 months.

Diane Westerback, S&P’s managing director for global surveillance analytics, explains the difference: In New York and other Northeastern cities, the foreclosure process requires judicial review, which prolongs the resolution process and keeps more distressed properties from being promptly listed for sale. “The bucket keeps backing up and nothing is coming out of it,” she says. “The larger the backup, the more likely [it is] that at some point, properties will flood the market and depress prices.”

Even where the shadow inventory is relatively small, distressed houses are still a drag on the market. Banks used to foreclose in as little as six months in Phoenix, says Brett Barry, CRS, GRI, a broker with HomeSmart Real Estate in Phoenix. “Now banks are delaying foreclosures; we’re seeing people miss up to three years of payments with no bank action.”

Barry believes the delay is not just because banks are more careful in their paperwork, but also due to an accounting rule change that permits banks to delay posting losses to their property assets until an actual sale is made. Banks “can keep the house on the books at the old price — and don’t have to take a loss until they sell it,” Barry explains.

“Banks are not in any rush to foreclose.

The inventory is building and at some point, there will be a day of reckoning. Then we can expect to see another drop in prices, probably another 10 to 15 percent,” says Barry. “Overall prices in Phoenix are down about 55 to 60 percent since the beginning of 2006. That means when the dust settles, overall prices here could be down 70 to 75 percent total, for anyone who bought at the market peak. Breathtaking, but true.”

Drive Buys The large inventory is creating a challenge in getting buyers to act, says Jacqueline “Jaci” Hoff, CRS, an associate broker at Coldwell Banker Residential Brokerage in Ogden, Utah. “Buyers today have little sense of urgency. They drive around and see vacant homes. They believe there’s no lack of inventory and interest rates remain low. So, there’s no rush to buy. I tell buyers, ‘If you find the perfect house for you, buy it. If you don’t, someone else will. It’s the perfect time to take advantage of low prices and low interest rates. Buy now.’ ” For sellers, Whited says, the shadow market presents another challenge: “confronting reality.” As he explains, “Many people are in denial and react too slowly, so that by the time they put their house on the market, prices have already gone down.

They are behind the curve and they end up chasing the bottom of the market.”

Consider the case of one home in West Chester, Ohio that the owner bought for $314,000 in 2003. “In March, they listed the house for $329,000. I told them it wouldn’t happen, and it hasn’t. The price has been systematically reduced — it’s now at $295,000 — and still for sale. Had the owner started his listing at that price, the house would probably have sold already,” Whited says. Refusal to recognize the new pricing realities is why 70 percent of the houses for sale do not sell, Whited adds.

He does offer one consolation to sellers.

“I tell them, ‘You’ll get much less than you hoped for your house — but you’ll also pay much less for the house you buy, so it balances out. Wait for your home to go up in value, and the home you buy will also go up. You should sell and buy now while we have low interest rates.’ ” Caroline Mayer is a writer based in Arlington, Va.

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Pipeline | Strategies to grow your business

makeover story The market has changed — should your listing presentation change, too?

Many of the most successful agents work hard to tailor their pitch to meet the specific needs and interests of individual clients.

14 | January/February 2012

“B

efore 2007, all you had to do was put the house on the market, and the market did the rest,” says Nicole Mangina, CRS, with Windemere Real Estate in the Seattle area. “Now, sellers know the market isn’t what it used to be. They know the price isn’t going to be what they want it to be.

And they want to know specifically what you’re going to do for them.”

Most agents regularly tweak their listing presentation to keep it fresh, but the market has prompted many to make more substantive changes in response to sellers’ new concerns and priorities. For some agents, it’s a matter of streamlining information and key details; for others, it’s providing a more detailed look at the market, complete with data and

charts. Either way, agents who take the time to assess what works and what doesn’t in their listing presentation will put themselves in a better position to succeed.

Set the Stage Several years ago, Mangina trimmed her listing presentation book from 30 pages to six because sellers told her they didn’t read the long version. She eliminated “stupid, fluffy stuff,” like information about key boxes and yard signage, and created three succinct sections that outline her strategies before, during and after the house is on the market. She also adopted a straight-talking approach that serves her well.

“I looked at where I was having issues with clients, and it was around things like getting low offers, reducing the price and

Biwa Studio/Getty Images

By Mary Ellen Collins

dealing with their annoyance after they get one showing the first weekend when they expected 15,” she says. “So now I’m completely honest from the beginning, and I have the courage to tell the seller how it really works in this market — for example, ‘You might only get one or two showings a week, and that’s good.’ I never used to set expectations about price reduction, but now I tell them, ‘Eight showings or 30 days — if the house hasn’t sold, we’ll be dropping the price.’ ” Now they go into the process with much clearer expectations and there aren’t any surprises. “I say, ‘You’re going to get an offensively low offer,’ and then I explain how we’re going to evaluate whether the person is a legitimate buyer. Before, they would get angry and hurt. Now, they take it in stride more. We bypass the emotional part of the process, or we cycle through it so much faster.”

Mangina does not tailor her approach for different clients, nor does she inundate them with charts and statistics. “I’ve found that when I clearly articulate how it all works, the pricing conversation is not a big deal. You don’t need to bury them in numbers to get the point across.”

Put It in Context Karen Marti Hale, CRS, ABR, vice president of regional sales for Virginia Cook REALTORS® in the Dallas-Ft. Worth area, has modified her presentation to focus on information that helps the seller truly understand the field on which they’re playing.

“People are more realistic about pricing, and they’re more concerned about numbers. We’ve always showed them the competitive market analysis, but we now really focus on the price differential — what the homes listed for and sold for. We also give sellers a view of daily, weekly or monthly showings based on price range or ZIP code, which is very useful as we monitor our market and activity. Real estate obituaries are properties that didn’t sell or expired for one reason or another, and we share those

Alth ou g h a g en ts var y in th eir listin g p r es en ta tion s tr a teg ies, su ccess d ep en d s on b ein g a war e an d flexib le en ou g h to ch an g e tactics wh en th e s itu a tion war r an ts it. as part of the educational process for sellers to show them how important it is to position themselves in the market with correct pricing, photography and effective marketing so they don’t end up on there.”

Marti Hale has also increased her emphasis on each home’s unique features.

“In the past, I wasn’t as laser-focused on what we need to do to set them apart,” she says. “Part of my listing presentation now includes detailed, specific questions about their home: ‘What changes have you made to your home and why? Did you do the work [yourself ] or use a licensed contractor? Do you have any energy-efficient appliances? Are the windows EnergyStar rated? What kind of Internet service is available for your location?’ It triggers the seller to understand what a buyer is looking for, and I get sellers who say, ‘You’re the first person who asked questions about the house.’ ”

Tools of the Trade For George R. Harvey Jr., CRS, brokerowner of the Harvey Team in Telluride, Colo., his 100-page listing presentation is particularly critical because he doesn’t meet 75 percent of his potential clients in person. He specializes in selling luxury second homes in a recreational resort market, and frequently the owners, who live

elsewhere, call or email him when they want to sell their house.

Harvey sends the listing presentation in a custom leather three-ring binder via overnight mail. “The idea is that it sends a message of luxury and class. Thirty percent of the people will read all of it; 70 percent will leaf through it, but 100 percent will want to know the information is there [if they need it]. I have to have everything in there for the person who’s the most analytical. Their standards are very high — they want to work with successful people, and you can’t fake that.”

His marketing strategy highlights specific tools that resonate with his audience, such as his Certified International Property Specialist Designation and his membership in the International Real Estate Federation (FIABCI). “All of my clients are very aware of where economics are good globally, and they want to know how you’re going to reach out and access those markets. … REALTOR.com is now international, in 11 languages and 11 countries. That might be something I include in the listing presentation to show clients that I could market their property internationally. I have to show them my networks that will reach clients in the Pacific Rim and South American emerging economies.”

Harvey says he is continually on the lookout for ways to enhance his listing presentation, and he’s currently developing an electronic version as an option for more tech-savvy clients. “Whether people open it physically or electronically, their first impression better be ‘Wow,’ ” he says.

Although agents vary in their listing presentation strategies, success depends on being aware and flexible enough to change tactics when the situation warrants it. After all, the simple goal is to provide a listing presentation that convinces sellers to say, “This is the approach — and the agent — for me.”

Mary Ellen Collins is a writer based in St. Petersburg, Fla., and is a frequent contributor to The Residential Specialist.

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Up Close | Profiles of people to watch

clinton howlett,

CRS

Century 21 Brock & Associates, Wilmington, N.C.

Designee since: 2007 Contact: clintonhowlett@ msn.com; 910.395.8266

get the tours on the MLS the same day; I want to use Facebook and Twitter to get my message across. There’s a little resistance in adopting new technology in the older generation, but then there are lessons that the younger generations have to learn, too.

I think there’s definitely a fine line in knowing when to rely on technology. You need to use the technology tools to spread the word as quickly and efficiently as possible, but you also need good communication skills, both written and verbal, to really reel in the business and go after what you’re looking for. I don’t think that the two are mutually exclusive, especially in today’s market.

You entered real estate in the boom times, but the economic climate has changed drastically. How have you survived amid changing conditions?

Since 2002, I’ve specialized in bank foreclosures. I was doing them when no one else wanted to do it, when my only listings were mobile homes down dirt roads and abandoned houses. Now, with the economy the way it is and real estate the way it is, my listings are the envy of every REALTOR® out there. I have listings in every price range, every condition — second homes, vacation homes, investment property, commercial, condos. Focusing on that market when I was younger and working to build it made the difference in the long run. When the economy turned, I already had a client base set up.

What’s the toughest thing about being a young agent?

Even as recently as a couple of years ago, people would look at me and assume that I was the kid REALTOR® who was out in the field a day after taking the licensing test trying to sell a house. A lot of my communication is via email or telephone, so people really don’t know how old I am, and sometimes clients are taken aback. Agents show up at my office to deliver contracts and whatnot and they say to me, “I expected you to be so much older.” I take it as a compliment, I really do. I do a good job and I take my job seriously, and I am thorough with follow-through on expectations.

Foreclosures are widespread, but is there another reason you have such a vested interest in this niche?

I think it’s important to have an area that you specialize in.

I prefer the lack of emotion involved in working with an institutional seller. I like the fact that my client is a bank that wants to sell its property for the most amount of money in the shortest amount of time. Banks work off of metrics and numbers and they’re very analytical, and that’s kind of my style, too. It takes all the drama out of it. It really boils the real estate down to a science as much as you can.

You’re 32, but have been in the business for 10 years and have worked alongside your mom a long time. What are some key differences you see between the generations?

I value the experience of people that have been in the business for years. I learn things from my mom, even today. I think what sets me apart is that I do embrace all of the technology. I want to be the first one to start using it and 16 | January/February 2012

You’re on the board of the CRS North Carolina chapter.

Why did you get involved?

I take leadership — whether for my homeowner’s association or my role on the chapter board — seriously. I consider it a huge honor and [a gesture of ] respect. I see CRS chapter involvement as an opportunity to enhance my business, increase my level of professionalism and help my fellow REALTORS® get the tools to succeed and do a good job, whether in contract management or with negotiation skills.

CRS offers really great classes, and to be an advocate for that so that my profession can be more educated, better understood and better respected, is really important to me.

Where do you see yourself in 10 years?

I don’t know if I’ll still be doing real estate in this sense.

I really love policy, and I can see myself doing real estate policy at some point on a macro level. The rules and the programs that we have as a country right now might not be the best thing for our country; it’s just what we have to work with. I don’t know if that’s five or 10 years down the road, but I see that for me in the future.

Charles Harris

REALTOR® since: 2002

How did you get started in real estate?

Technically, I started in real estate when I was 5 years old. I would ride around with my mom [Faye Brock, CRS] — a current CRS regional vice president who’s been in business since 1981 — in the back of her car, listening in during her showings. At 6 years old, I knew what an amortization statement was. I used to help my mom calculate mortgage payments. I probably learned more about real estate during that time than anytime in my life. But I got my real estate license when I was 18, went to college and got a B.A. in economics, and came back to work for the family company when I was 23.

“You need to use technology tools, but you also need good communication skills. I don’t think the two are mutually exclusive, especially in today’s market.”

Clinton Howlett, CRS

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Surge

Ahead Michael Thad Carter

By Michael Fenner

With his background in education, Mark Minchew, CRS, knows firsthand the impact that quality instruction and training can have on an individual’s success. As a longtime member and leader of a CRS chapter, he can also attest to the value these grassroots organizations bring to the Council and its members.

When he took the helm as the 2012 CRS president in November, Minchew announced plans to focus his efforts on strengthening the chapter program and promoting the CRS courses that help drive the Council’s success. By nurturing both the chapter and education programs during this tighter market, Minchew hopes to help CRS engineer what he calls a “surge” in member engagement with the Council that will help usher the organization into the future.

“REALTORS® who flourish in these times will be those who are equipped with knowledge and the tools to succeed,” Minchew says. “I believe in the strength of CRS Designees and their ability to adapt to any economic environment.” And the benefits members will reap by engaging with CRS chapters and maximizing the Council’s educational offerings will help them do just that.

The Residential Specialist caught up with Minchew shortly after he was installed as the 2012 CRS president to discuss his background, his commitment to education, and his vision of what lies ahead for the Council this year.

New CRS President Mark Minchew looks to create a fresh wave of member engagement with CRS chapters and education.

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Get to Know…

Mark Minchew, CRS, ABR, CIPS, CRB, GRI, SRES • Broker/Owner of RE/MAX Austin Associates • REALTOR® Since: 1977 • CRS Since: 1986 • Austin Board of REALTORS® Salesman of the Year: 1997 • Outstanding CRS Member Lone Star Chapter: 2006 • CRS President’s Award: 2007 • CRS Medallion Award: 2005 • NAR Omega Tau Rho Award: 1997 • RPAC Golden R, President’s Circle • RE/MAX Lifetime Achievement Award

What was your background before you got into the real estate business?

I received a master’s degree in education from Baylor University and proceeded to teach on the junior high, high school, junior college and university levels over the next few years. I left the education field to enter the home-building business and spent five years as a homebuilder. Just before I left teaching, I obtained my real estate license, and as the home-building business subsided, my real estate sales began to increase. I had more questions about working in the real estate profession than I had answers, so I decided to pursue real estate education. My board executive officer suggested I start with the Graduate, REALTORS® Institute (GRI) courses, which opened my eyes to a whole new world. I could see the possibilities.

What attracted you to real estate as a profession?

My father owned a car dealership when I was growing up and I spent a lot of time with him. Sales came naturally to me due to my upbringing. As a teacher I had to

find summer jobs to make ends meet — that’s when I decided to get my real estate license and sell homes one summer in Baytown, Texas. I saw very quickly that I could provide much better for my family by selling homes than I could teaching.

Still, I loved teaching my students, and I was afraid to leave the benefits that come with steady employment. I also probably wasn’t as sure of myself as I should have been, and that’s how I ended up taking a job as an apprentice homebuilder to keep a salary and benefits. I learned a lot about homes during that time, but I also discovered that there is great satisfaction that comes with helping people find a home of their own. When the building business started to wane, I relied more and more on my real estate business. Eventually I became the manager of the fourth largest real estate company in Baytown.

What kind of difference did your training as a CRS make in your career?

I first learned of CRS at a GRI class, and I could hardly wait to take the Council’s courses. Since I wanted to get my

education as quickly as possible, I traveled to cities where the courses were being offered. The courses exposed me to many different philosophies in real estate, I learned several techniques I had not known, and I was able to meet and learn from top producers that I aspired to become. I soon began receiving referrals from colleagues I had met in CRS classes in cities other than my hometown.

By this time I had moved to Austin, Texas, where the home prices were double that of Baytown. I took my last CRS course and my first CRB course during my first year in Austin, where I had arrived just prior to the real estate bust of 1986 to 1989. The Austin housing market lost 32 percent of its value in that short period, and the number of REALTORS® in the Austin Board dropped 60 percent. But, due to the knowledge I had gained, I never had a year that wasn’t better than the one before.

CRS referrals come to me regularly, and I can attribute much of my sales success to those referrals. I strongly believe that knowledge is power — when it is used properly. That saying has been on all of my marketing materials since 1984.

When did you start getting involved as a volunteer leader for the Council? Why? When I began with CRS it was still a relatively new organization, and an organized chapter program was just becoming established. After I obtained my designation I went to the next national meeting and explained that I was a new designee and that I wanted to see what was going on.

The leadership warmly embraced me and invited me to sit in on the meetings. To the best of my knowledge I was the only new designee there.

I was offered a position on the Board of Governors in 1987. I have been very active in the chapter program for years, and by now I have served on virtually every committee within the national Council and chaired 10

of them. But I probably learned the most about the Council’s operations while serving on the Executive Committee for two years.

I have gained in knowledge and experience by serving in these various positions, and this has enabled me to implement positive changes in my own business and helped me serve my clientele better.

What have your years in leadership taught you?

Early on in my various roles as a leader, I always tried to do everything myself — I had a vision and I wanted to see it fulfilled. CRS has taught me that being a leader is a team effort. When others share your vision you have an opportunity to see great things happen — much greater than what you could ever accomplish by yourself. I see the Council growing into a true grassroots organization, and we can choose either to nurture that growth or to resist it. If we nurture it, I believe we will watch CRS maintain its position as the strongest and most highly respected affiliate under NAR’s umbrella. I hope all CRS Designees see themselves as potential local or national leaders. We have an abundance of talent in our membership. As we grow, that will become more and more evident.

Our Leadership Academy has been well attended, and these skillful leaders represent a spirit of inclusiveness and growth, both in the Council and within each one of us individually. I encourage participation on all levels of our Council.

You have a background in education, and a long career in real estate.

What kind of insight does that give you into what CRS members face on a daily basis?

My educational background prepared me for speaking. I have a minor in speech and plenty of practical experience giving presentations over the years I taught classes.

I was able to hone my presentation skills by teaching, but I also became much more aware of whether or not I was communicating

effectively. In the teaching profession if you fail to communicate, the student fails; in real estate if you fail to communicate, you fail. I had the opportunity to teach the GRI for 10 years to adults who would challenge me. I taught the first mandatory continuing education (MCE) class in Texas and I am still an MCE instructor. All of these experiences helped me develop into who I am today, and God isn’t finished with me yet. In this ever-changing profession, one must continue learning and retooling to remain successful. That is why taking additional CRS courses is critical for members’ future success.

Where do you see the real estate industry heading in the coming year and beyond? What are the big issues and challenges REALTORS® will encounter?

I believe in the American people, and I believe capitalism works. Now, more than any time in the last 75 years, what our government does economically will dramatically affect our way of life and our livelihoods. We are tied to a global economy more than ever before. We need to recognize that as REALTORS® we must prepare ourselves to meet the expectations of an ever-changing consumer. We have already seen a resurgence in various parts of our nation’s economy, and I believe it will spread barring unforeseen national or international upheavals.

What kind of legacy would you like to leave with the Council?

I trust my legacy with the Council will be one of inspired leadership and empowered members by fostering chapter growth and cultivating leaders who share my vision of nurturing REALTORS® by providing top-notch education, real member benefits, personal support and networking opportunities.

Michael Fenner is the editor of The Residential Specialist.

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Golden 22 | January/February 2012

Foreclosures and short sales can be a boon to business, but winning such listings requires strategic work with banks and clients.

Opportunities

By Daniel Rome Levine

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Sad/Veer

en

W

hen it comes to putting himself in a position to sell bank-owned homes, Bill Carter, CRS, knows the power of education and networking.

When Carter, of the Carter Team, RE/MAX Real Estate Groups, in Anderson, Ind., decided to pursue this segment of the market in late 2004, the first thing he did was start attending conferences put on by organizations specializing in such REO sales. He spent time learning the ins and outs of REOs from bank asset managers who select the REALTORS速 they want to sell these homes, as well as from agents who specialize in these sales.

Once he felt he had a firm grasp of his new subject matter, Carter started calling local financial institutions in his city and introducing himself to their asset managers.

He briefly outlined his credentials and qualifications and asked them questions about their properties, such as how many they had and how they were selling. He ended these calls by asking the asset managers if they might be willing to try him out. Carter always followed up with an email thanking them for their time and stressing that his expert marketing skills would ensure that their homes would sell quickly and at a price the bank would like.

Attached to these emails was a 20-page PDF spelling out in detail his credentials, his focus on pricing homes realistically so they sell quickly and his aggressive use of Internet marketing. Carter would follow up a week or so later with letters and phone calls, and he also kept an eye out for other opportunities to mingle with the asset managers, such as chamber of commerce meetings or other local civic events.

His pursuit of this business required diligence, tenacity and great patience, says Carter. It took nearly a year to get his first listing from an asset manager he had been courting. He closed that sale and has never looked back. In the past seven years, Carter has sold more than 125 bank-owned homes and now handles sales for some seven banks and other lenders. “Going about winning these listings from banks is really not that different from winning a retail listing prospect,” he says. “It’s all about building relationships and convincing them you are the best person to be their partner in selling their properties.”

In today’s struggling economy, winning listings of bank-owned homes and short sales can be the key to surviving for many agents whose other business has slowed.

Carter, for instance, says his business would be down more than 50 percent were it not for his bank-owned homes. Knowing how to win these listings and close them successfully can put agents in a desirable position — they can become the go-to person in their communities for such sales and enhance their reputation as a trusted partner to banks and homeowners in need of help.

REO Redux One key to Carter’s success in winning and handling the sales of bank-owned homes, he says, is knowing the importance asset managers place on having their foreclosed properties marketed in a professional, high-quality manner. This wasn’t always the case. “In the past, there was less professionalism in this segment of the market,” he says. “Now banks want their properties to really stand out.”

When pitching himself to a bank, Carter emphasizes the specialized sales training and commitment to high-quality marketing that he learned while working toward the CRS Designation. He spells out in detail the top-notch services he would provide, including widespread Internet exposure, virtual tours, numerous high-quality photos and a weekly online marketing report showing, among other things, how many people have looked at the property. “These kinds of touches really resonate with asset managers,” Carter says. “They appreciate that you will give their foreclosure listings all the bells and whistles.”

Carter also wins and keeps business by positioning himself with bank asset managers as someone who wants to be their partner and help them achieve their goals. These bankers, Carter points out, are graded and receive bonuses based on how many homes they get off their banks’ books each month. “If you help them do this, they will certainly not forget about you when it comes to deciding where to direct future listings,” he says.

Mark Ryan, CRS, owner of Mark Ryan Group, part of RE/MAX Victory in Dayton, Ohio, suggests getting on asset managers’ radar screens by signing up with Web-based companies such as Equator (www.equator.com) and RES.NET (www. res.net), which, among other things, allow REALTORS® to post detailed profiles of themselves that can be viewed by asset managers looking for help selling foreclosed properties. “These sites are especially useful to asset managers who don’t have agents in a particular area,” he says. Getting the highest level of service from these sites can cost as much as $700, but the expense can be worth it, Ryan says.

A note of caution, however. Ryan points out that trying to curry favor with asset managers by sending gifts or frequently inviting them out for lunch or drinks is a bad idea that can backfire. “They are really hypersensitive about any perceived impropriety or the perception that they are being bribed,” says Ryan. “Any candies or cookies you send will probably end up in the trash, and your reputation with the bank will go in there, too, right along with them.”

If you are selected by a bank to sell its properties, Ryan adds, don’t be picky or turn down listings for homes that appear tough to sell because they are in rundown condition. “Some agents don’t want to take the crappy ones,” he says. “But you should take whatever they give you. If you don’t, they will find somebody else who will. You’ve got to take them all or you get none of them.”

Short Order Travis Waller, CRS, has established himself over the past six years as the go-to guy for a different type of transaction involving banks and financially strapped homeowners — short sales. These, as well as the 24 | January/February 2012

Distressed Real Estate

35%

Foreclosed

Short Sale

30% 25% 20% 15% 10%

Oct. 2011

Aug. 2011

Jun. 2011

Apr. 2011

Feb. 2011

Dec. 2010

Oct. 2010

Aug. 2010

Jun. 2010

Apr. 2010

Feb. 2010

Dec. 2009

Oct. 2009

Aug. 2009

Jun. 2009

Apr. 2009

Feb. 2009

Dec. 2008

0%

Oct. 2008

5%

Source: NAR REALTORS® Confidence Index Survey

sale of bank-owned properties, have been big business for REALTORS® in Bergen County, N.J., the past five years, he says.

Waller, with Exit Realty Your Home Connection in Ridgefield Park, N.J., has become an expert in these complex transactions through ongoing education and constant research. “Most agents simply don’t take the time to learn how banks work a short sale,” he says. “I see a lot of agents who have no clue how to close short sales.” Waller strongly recommends taking CRS’s online short sale course, Short Sales and Foreclosures: Protecting Your Clients’ Interests (CRS 111), as well as reading the multitude of articles and blogs by shortsale experts, especially those found at www.shortsaleopedia.com, www.cdpe.com and www.agentreosecrets.com.

He says sharing that education with clients is what really helps him win short sales. By sharing trends in the Bergen County housing market with clients on social networking sites, Waller not only helps them make educated choices should they find themselves having to consider a short sale, but also keeps him top of mind as their go-to agent. In addition to the

information that he shares daily on Facebook, Twitter and LinkedIn, as well as in weekly emails, he also sends clients links to pertinent articles he finds on websites such as HousingWire and REALTOR. org. Clients frequently pass these emails on to friends and family and many of these people become future clients.

“My emails are my bread and butter,” Waller says. “They keep my face out there as the expert in this area and make it hard for anyone to forget my name.”

Waller’s knowledge and experience — he handles some 30 short sales a year — give him a leg up on the ins and outs of dealing with banks and other mortgage lenders to get these normally time-consuming transactions processed quickly.

Standard procedure dictates, for instance, that agents submit their client’s request for a short sale to the bank’s loss mitigation department and then sit back and wait for a phone call. Knowing full well that these departments are overwhelmed by requests and often turn out to be black holes, Waller also sends his requests, along with a quick email, to a specific short sale negotiator he has worked with previously

at the bank, asking them to take on the file and expedite the process.

“They usually say yes, and this enables you to skip two or three steps to get the approval completed because you’re dealing with someone you have a working relationship with, instead of a complete stranger,” says Waller.

It’s an effective strategy. Waller recently got approval on a complicated short sale for a client in just 22 days. Not bad, considering many agents cool their heels for four months waiting to find out if a bank has approved or rejected their short sale.

As people continue to struggle in the face of economic downturn, short sales and foreclosure listings will remain a fixture in real estate markets around the country.

Agents who put themselves in a position to win these listings and handle them successfully not only will stand out from the competition but will ensure that they become a valuable partner to homeowners in need and to banks looking for expert help.

Daniel Rome Levine is a writer based in Wilmette, Ill., and is a frequent contributor to The Residential Specialist.

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trust

funds CRSs reveal how they overcome client skepticism to build lasting relationships.

By Regina Ludes

26 | January/February 2012

“I think she realized I wasn’t just interested in a commission, that I really was interested in knowing her,” she says.

Ashley got the listing and sold it within three months. The wary Navy captain subsequently sent several referrals Ashley’s way, including her adult children. “It’s one thing when a client sends a referral. But when they send their kids to me, that shows true trust,” Ashley says.

At a time when more than a quarter of mortgage holders are underwater and many others are worried about their jobs, it is no wonder that many consumers are wary of the housing market and the REALTORS® who serve it. Building trust with prospective clients is never easy, even in the best markets, and when consumer confidence lags, it can be especially challenging. But it is not impossible, as agents like Ashley have learned.

By putting clients’ needs first and being honest and forthright when communicating with them, REALTORS® can not only earn consumers’ trust, but also create loyal customers for life.

Leeser/Veer

G

ay Ashley, CRS, has seen some bad housing markets in her 25-year real estate career, but she doesn’t remember another time of such consumer mistrust of real estate agents. “It’s brought out the protective instinct in people.

They’re like first-time buyers all over again,” says Ashley, who is with Ashley Realty Group in Fairfax, Va. She experienced that mistrust firsthand while working with a Navy captain whose home had been on the market for nearly 18 months after several agents failed to sell it. When the client met Ashley for the first time, the client’s first words were, “So what are you going to do that’s different?” Unfazed, Ashley looked her in the eye and said: “I’m going to sell your house.”

As they talked, the discussion shifted from housing issues to more personal matters. Ashley learned that the woman had divorced recently, that she was underwater on her mortgage and that her mother was seriously ill. From that moment, Ashley says, the woman’s demeanor became more relaxed.

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Trust Agents “The more you focus on the client, the better you do for yourself,” says Charles H. Green, author of Trust-Based Selling.

There’s a paradoxical quality to selling, he says. “The best way to sell is to stop trying so hard to sell. When we try to force things is when we don’t succeed,” Green says.

He adds that it is easier to build trust in an era of low consumer confidence.

“When times are bad, people are more open and willing to listen to suggestions,” Green says. “The most trustworthy people stand out more. They know there are up and down times, and when they take care of their clients’ interests, everything else takes care of itself.”

Time and conversation are keys to building trust, says Ashley. When she first meets with clients, she spends 15 to 30 minutes learning about their personal lives. “I find out what they like to do, where their kids go to school, and what their last house was like. That’s when they realize you are interested in them, not just the transaction,” Ashley says.

She knows when she has gained a client’s trust by reading their body language.

“You see a physical difference in people.

Usually, they chatter more, their smiles come more easily and their shoulders relax. Plus, they quit challenging you.

There’s a shift from ‘This is my experience’ to ‘Gay said this.’ ” Tony Dahm, CRS, with Prudential Fox & Roach Realtors in West Chester, Pa., also notices changes in receptive clients’ body language. “There will be more eye contact; they’re more attentive and they sit up straighter. If it’s a couple, they might talk to one another at first, but then they’ll start to ask questions of me,” Dahm says.

He says agents can get a head start earning clients’ trust by preparing themselves well for all client meetings, which shows your professionalism and indicates you take their business seriously. For example, Dahm compiles current market data and prepares a buyer’s packet that contains an agency disclosure form, an explanation of the home-buying process, financing resources, and his professional 28 | January/February 2012

bio and company data. If clients are looking to sell, he will research data about neighborhood listing prices and time on the market.

Asking the right questions and engaging with everybody involved helped Dahm gain the trust of a couple with two teenage children who had interviewed several agents before contacting him. Dahm asked the couple about their jobs, the kids’ hobbies and the school activities they were involved in. Afterward, the husband pulled Dahm aside to say, “My wife is hard to impress, but she was impressed with you. You were the only agent we talked to who didn’t treat her like she was invisible.” The husband explained that the other agents

they interviewed addressed only him and ignored his wife.

Dahm believes it is much easier to build trust with clients in the current market than it was a few years ago. “Five years ago, real estate sold itself. But people are nervous in this market, and they need a good agent to evaluate the market and put them in the best negotiating position possible. It’s easier to be trusted when you’re needed and respected,” he says.

Knowledge Is Power “It isn’t mistrust that clients feel, but rather ‘what do we need you for?’ ” says Kathy McGuriman, CRS, with Long & Foster Real Estate in Lansdale, Pa. “Before, they needed us for finding homes, but with

Four Pillars of Trust The only way to become a successful sales professional is to become trustworthy, says Charles H. Green, co-author of The Trusted Advisor Fieldbook and author of Trust-based Selling. Agents can increase their trustworthiness by following the four basic principles.

1. Focus on the client, not on the commission. Work for the client’s interests, even if it means referring them to another agent or firm to handle their business.

2. Seek collaboration. Be sure you and the client are working as a team, not in competition with one another. Don’t speculate about what they want — ask them. Engage clients in conversation and get them involved in the process.

3. Focus on long-term goals, not short-term victories. The long-term goal is establishing a client relationship for life that will generate referrals for years to come.

4. Be transparent. Withholding information or trying to control the relationship can destroy trust. Be up front about everything, including pricing policies, the state of the local housing market, legal issues, your commission and any other matters that could affect the relationship. Don’t put a sunny picture on gloomy situations.

the Internet, they can find much of that information on their own. Consumers can digest all the information that’s out there, but they don’t know if what they are reading is correct or if they can use it in their home purchase,” she explains.

To help clients make sense of the abundant and sometimes confusing information available on the Internet, McGuriman says agents need to maintain their expertise by attending classes and webinars, even if budgets are tight. The more REALTORS® understand what is happening in the industry, the better prepared they will be to provide the expertise that clients need, she says. “Individuals must keep up to date about rules and regulations, marketing techniques, lending criteria and contracts.

There’s so much to know. You have to make sense of it so you can be the best REALTOR® for your client. In the end it’s your advice they are paying for, not the house,” McGuriman says.

She also believes it is important to be honest with clients, even if it means telling them something they don’t want to hear. Recently she worked with a man who wanted to buy a home even as he was going through a divorce and still lived in the house that he shared with his wife.

McGuriman felt he wasn’t ready to buy and advised him to rent an apartment for a few months instead. The client disagreed, and McGuriman wound up showing him several homes. After his first offer fell through, the man went on vacation to think things over. “When he returned, he realized I was right. He was still interested in buying a home, but he decided to wait six months. I believe he will call me then because I was honest, and he trusted my advice,” McGuriman says.

Craig Hawker, CRS, with Coldwell Banker Residential Brokerage in Draper, Utah, says many consumers are wary of real estate professionals, but it hasn’t shaken their faith in homeownership.

“Many still think homeownership is the real deal, but they want to work with professionals who know what they are doing and are full-time agents,” he says.

Hawker says REALTORS® are partly responsible for creating an atmosphere of

The Trust Equation What makes a person trustworthy? Charles H. Green, author of Trustbased Selling, identifies four factors that determine whether someone is trustworthy. Do you fit the bill?

Credibility Do people believe what you say? Do you have good credentials? Are you smart?

Reliability Are you dependable? Do you keep your promises?

Do you do what you say you are going to do? Do you have a good track record?

Intimacy Do people feel secure with you? Do they feel comfortable enough with you to share their confidences?

Self-orientation Are you concerned about the client or about yourself? Self-orientation can come across as either selfishness or self-absorption.

mistrust in the current economic climate.

With fewer buyers shopping for homes, many agents get overly excited when someone inquires about a listing, and they rush to show properties without knowing what the client wants or if they are pre-qualified.

That behavior, Hawker says, sets up an expectation that agents care only about making the deal, which hurts the industry.

To counter this trend, he offers a complimentary, no-obligation one-hour consultation to prospective clients before showing any properties. During the consultation, he explains all aspects of the home-buying process, including agency agreement, loans, inspections, radon and meth tests, and the expenses involved in owning a home. He shows prospects the buyer agreement, but puts no pressure on them to sign it.

Hawker also explains his commission structure and work hours. He believes agents should discuss their income and establish regular work hours, so clients know what to expect when working with

them. Being up front about these matters helps clients see agents as the professionals that they are and earns their respect and trust, says Hawker.

For those who are still skeptical, Hawker offers the option of signing a buyer agreement for a two-week trial period before committing to a full six months. “I tell them that this allows me to work exclusively with them and we can decide if we can work together. At the end of two weeks, we can cancel the agreement if we decide the arrangement is not working, or they can sign an extension.” In nearly every instance, Hawker says the consultation has resulted in a signed agreement.

Agents who work to cultivate their reputation as trustworthy professionals will go a long way toward building client relationships for life, no matter what the market may bring.

Regina Ludes is associate editor of The Residential Specialist.

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Big Fix

Maciej Frolow/Getty Images

The

30 | January/February 2012

What will it take to turn the housing market around? CRSs offer their perspectives on what lenders, government officials and real estate agents can do to address current problems and prevent them in the future.

By Gwen Moran The housing market has been struggling for quite some time now — perhaps longer than many expected — and although it’s been heading toward recovery in some parts of the country, it’s languishing in others. Fixing the market’s multilayered problems is a tall order. Politics inevitably get in the way, and with such a disparate group of stakeholders — government officials, mortgage lenders, real estate appraisers and, of course, REALTORS® — it’s impossible to get everyone to agree on the best way to move the real estate market in the right direction. The only thing people can agree on, it seems, is that there isn’t a single solution or quick fix.

Nonetheless, The Residential Specialist asked CRSs what key players can do to move the market in the right direction and prevent a similar downturn in the future.

Mortgage Lenders Tight credit markets and multiple barriers in the mortgage underwriting process are the main obstacles to recovery, according to Chris McElroy, CRS, of The Group Real Estate in Fort Collins, Colo. In addition to loosening underwriting requirements for buyers to get more people into the market, McElroy suggests mortgage lenders place a greater emphasis on the

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willingness of borrowers to repay and implement systems to allow qualified borrowers to refinance underwater mortgages at lower interest rates.

“There are people who continue to make payments whether they are upsidedown or not. As long as they’ve made their payments over a period of time — a year or two — haven’t been behind, and their credit’s excellent, they should be able to refinance,” McElroy says.

Jim Kouns, CRS, a broker associate with Coldwell Banker Lunsford in Muncie, Ind., also believes allowing people to take advantage of today’s low interest rates is a solution — but only for the short term.

Instead, buyers with good credit could refinance temporarily to a lower interest rate. However, the interest rate would be fixed for a period of time, perhaps a few years, and then rise as the prevailing interest rate rises, but “have a cap at whatever the borrower’s original interest rate was,” he suggests.

Some advocate going even further. Vernon E. Taylor, CRS, a REALTOR® with Keller Williams in Tampa, Fla., has outlined a multistep proposal that includes easier refinancing guidelines, but also advocates adjusting mortgage principal, which he presented to his local REALTOR® board earlier this year. Under Taylor’s plan, loans would be adjusted to the actual value of the home as long as the owner could prove that he or she was able to meet that obligation and agreed to live there for a period of time, ideally three to five years.

Selling the home before then would make the homeowner liable to pay a percentage of profit to the lender. The bank would absorb half the cost of the adjustment, with the government responsible for the other half. This, he says, would keep more 32 | January/February 2012

people in their homes for longer periods of time and reduce the number of distressed properties coming onto the market, including strategic defaults.

Lenders should also allow homeowners to occupy the property for as long as possible, even in cases where they would ordinarily be displaced due to foreclosure, impending short sale or other financial hardship, says C. Michael Royce, CRS, founder of Royce & Associates in Dayton, Ohio. Vacant homes are more likely to be damaged by weather changes or vandalized. Allowing homeowners to remain in the property, keep the utilities on, and maintain the home reduces such damage and often makes the properties easier to sell, he says.

Appraisers The appraisal process can also play a role in recovery, McElroy says. But because real estate markets and conditions can vary significantly from town to town, it’s critical for appraisers to be well-versed in the areas in which they are working. With banks and appraisers facing stricter regulations requiring independent appraisals, banks may often be ordering appraisals from appraisal management firms in different parts of the country, which can easily lead to an inaccurate appraisal, dooming a good deal, he says. “[Appraisers] don’t even have a clue what’s going on in Colorado or Georgia or D.C. or whatever. Right now, it’s gone to a place where I think Congress wanted it to go, where it’s very impersonal, but it doesn’t take into account knowledge of the local market,” McElroy says.

David C. Jones III, CRS, a broker with Windermere Real Estate/West Sound Inc. in Silverdale, Wash., suggests eliminating appraisals for refinancing altogether, since they take homeowners whose mortgages are underwater out of the game after they have spent hundreds of dollars trying to refinance.

“I understand the property is collateral for the loan. However, if we’re trying to get out from under this shadow inventory of homes facing foreclosure, we have to let

those who are able [to] refinance. Sometimes, the appraisal makes that impossible,” he says.

Real Estate Agents REALTORS® can play a key role in moving the market forward, says Barry Owen, CRS, principal real estate broker at Pareto Realty in Nashville, Tenn. Owen uses his database of 500 real estate professionals to hold brainstorming meetings — often 10 to 15 participants from five to 10 firms, plus vendors, who discuss trends in the market and ideas to improve sales. Over time, the group, which has been meeting for seven years, realized that whittling their market focus to very specific areas was yielding more sales. As a result, Owen trimmed his primary database to 200 clients and prospects and focused on building relationships with that smaller group. “I’m going to have my best year in 20 years,” he says.

Royce is taking his ideas — including lifting HUD limitations on investor purchases — to the government. Royce was recently elected the 2012 director of the Dayton Board of REALTORS®. He plans to meet with legislators to share his ideas about improving the real estate market. He suggests that other REALTORS® contact their legislators as well, as part of a grassroots lobbying effort. “The government is trying, but they need more people on the ground to help them identify things that are really going to make a difference,” he says.

Government Many REALTORS® have advice for their representatives in Congress. Jones believes a simpler tax code or a flat tax would put more money in people’s pockets and improve the economy. He is also an advocate of disbanding Fannie Mae and Freddie Mac and allowing real estate financing markets to run without government intervention. Royce would like to see an overhaul of rules that apply to investors, including the 30-day HUD restriction on investor purchases, to increase the pool of buyers in the marketplace. Currently, HUD does not allow investors to buy foreclosed

Big Think Some of the nation’s leading economists have distinct ideas about the state of the housing market and what can be done to fix it.

properties for the first 30 days they are on the market. By eliminating that restriction, Royce believes he could sell properties faster to these investors, who have the resources to buy them.

Taylor says his plans to reduce principal balances on underwater mortgages would be further incentivized if the federal government offered tax breaks to lenders who do so. The government would also absorb part or all (in the case of Fannie Mae- and Freddie Mac-backed loans) of the cost of writing down principal balances.

In addition, he would like to see the current appraisal-ordering process overhauled to help ensure that appraisers are qualified and knowledgeable in the areas they work.

Going Forward What will it take to ensure a similar market downturn doesn’t happen again?

Jones thinks it’s a good idea to require a 10 percent down payment from buyers to ensure they can afford the property they’re purchasing.

Royce would like to end programs that create incentives for questionable behavior, such as lenders paying owners to encourage short sales or vacating properties.

Taylor would like to see banks allow their branches and regional management more latitude in making adjustments and offering loan products or special accommodations for specific markets, such as relaxing refinancing standards for states that have been particularly hard-hit. Such flexibility would allow banks to address local market conditions more readily, he says.

Everyone, however, seems to agree that better financial education and better communication among agents, lenders, government officials and appraisers will help bring about the changes needed to safeguard against similar problems in the future. “I think what we’re all trying to do is say, ‘OK, let’s build a foundation. Let’s take a deep breath and do what we have to do to move to the other side,’ ” Taylor says.

Gwen Moran is a writer based in Wall Township, N.J., and is a frequent contributor to The Residential Specialist.

Mark Zandi, Chief Economist Moody’s Analytics In a May 2011 interview with Builder magazine, economist Mark Zandi said he expects new and existing home sales to reach “normal” levels of 6 million to 6.5 million by 2013. He also predicted prices will remain flat in 2012 and begin growing in 2013. However, he cautioned that buyers would remain on the market sidelines until they saw evidence that the market had bottomed. In a May 2011 report, Zandi suggested delaying planned reductions in conforming mortgage loan limits and refocusing on the Home Affordable Refinancing Program (HARP) to encourage more people to refinance. In addition, Zandi outlines a targeted and limited national principal reduction program, with forgiveness of up to $50,000 in loan principal, for qualifying homeowners. This, he says, “would be a much larger and costlier step, but would bring the housing downturn to a quick and definite end.”

Lawrence Yun, Chief Economist NATIONAL ASSOCIATION OF REALTORS® In a November 2011 statement from the National Association of REALTORS®, chief economist Lawrence Yun stated that he expects gradual improvement in the housing market in 2012 and beyond, saying the combination of pent-up demand and excellent housing affordability conditions will help turn the market around, as long as credit restrictions ease.

“Housing affordability conditions, based on the relationship between median home prices, mortgage interest rates, and median family income, have been at a record high this year,” Yun said. “Very favorable affordability conditions will dominate next year as well, which will probably be the second-best year on record dating back to 1970.”

Martin Feldstein, Professor of Economics Harvard University In an opinion piece in the Oct. 13, 2011, edition of The New York Times, Martin Feldstein, Harvard University professor of economics and a former economic adviser to President Ronald Reagan, outlined his plan for mortgage principal reduction to stop the fall of housing prices. When principal exceeds 110 percent of the home value, as is the case with 11 million of the 15 million “underwater” homes nationwide, the principal balance would be adjusted to the value of the home. The government would absorb half of the cost, and the bank would absorb the other half. (In cases of Fannie Mae- and Freddie Mac-backed mortgages, the government would be paying itself, he says.) In exchange, the borrower would voluntarily accept that the new mortgage has full recourse and that, regardless of state laws prohibiting such action, the government would be granted permission to seize other personal assets if the loan goes into default. He reasons that the lower loan-to-value ratio and full recourse feature would make these loans less likely to go bad.

Robert Reich, Professor of Public Policy University of California, Berkeley In a June 2011 editorial in The Financial Times, Robert Reich, professor of public policy at the University of California, Berkeley and former economic adviser to President Bill Clinton, expressed his support for an amendment to bankruptcy laws to aid recovery. “[The federal government] could amend the bankruptcy law to allow people to include their prime residences in personal bankruptcy, thereby giving homeowners more leverage to get mortgage lenders to mitigate the terms of their loans.”

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Good Read | Resources in print

take away The key to achieving breakthrough results is to hone your powers of “taking people with you.”

Reviewed by Allan Fallow

Taking People With You: The Only Way to Make Big Things Happen

by David Novak Portfolio/Penguin 242 pages, $25.95

You might not expect the CEO of a multinational conglomerate to have time for classroom instruction, but teaching others what he has learned about leadership in more than a decade at the helm of Yum! Brands (KFC/Pizza Hut/Taco Bell) is clearly David Novak’s driving passion.

Since 1996, he has taught a three-day leadership program, “Taking People with You,” as often as eight times a year, steeping some 4,000 students in Novakian precepts such as how to create a “performance-recognition culture” and how to generate the sort of charismatic positive energy that will sweep people up in your cause and inspire them — and you — to attain “breakthrough results.”

Ordinarily I’d douse such hifalutin aspirations with the pepper spray of journalistic skepticism, but you know something? I’m kind of taken with the genuinely upbeat message that emerges on every page of Novak’s new book, Taking People With You: The Only Way to Make Big Things Happen. Novak has structured the book along the same lines as the program he teaches, with three major sections devoted to honing your mindset, devising a plan and following through to guarantee results. Let’s slip into the back of the classroom for an admittedly arbitrary sampling of what he has to say.

Aiming High “I’m a marketer at heart,” the instructor introduces himself to the class. Novak graduated not from Harvard Business School but from the University of Missouri, he proudly announces, where he 34 | January/February 2012

majored in advertising and got a B.A. in journalism. This makes it easier to swallow his claim that “Taking People With You is not just another book filled with leadership principles you’ve heard time and time again.” Instead, he exhorts readers to think of it as “really more of an action plan … a workbook on how to get things done better and faster by getting people fired up to help you achieve your goals.”

How you light that fire is up to you, of course, but one sure way to stoke it is to be absolutely unapologetic in defining the “Big Goal” you want to accomplish.

To identify that aim, Novak suggests, ask yourself this question: “What’s the single biggest thing you can imagine that will grow your business or change your life?”

There’s no room for modesty or caution, says Novak, in the formulation of this crucial statement of purpose: “Leaders often fall short in this area by not aiming high enough.”

You’ll also want to draw on whatever native insights you’ve developed in your career to date. For Novak, this entailed an epiphany: Merely broadcasting the features of a product just wasn’t cutting it.

Instead, you must get inside the head of your customers, then “reframe” your brand to make it newly relevant to them. If you are Snickers, for example, you overcome the consumer mindset that candy bars are unhealthy by revamping your product as “The Snack That Satisfies.” If you are Swatch, you reposition your watch bands as fashion accessories. And if you are Taco Bell, where Novak was charged with shoring up sagging sales a few years

back, you honor the fact that 70 percent of your dollars come in through the driveup window by redesigning your menu to feature less spillable products. Rolled out under a “Good to Go” ad campaign, the more portable food products distinguished Taco Bell as Novak’s most profitable U.S. brand today. Arming yourself with this “insight-driven approach,” Novak concludes, “is the right first step in any leadership situation.”

In a book that congratulates itself (justifiably) on “forc[ing] you to look in the mirror and challenge yourself to rise to a higher level,” it’s no surprise that one of Novak’s prime directives is the Socraticsounding “Be yourself.” “Easier said than done,” the author admits with his trademark disarming honesty: Adopting and displaying “extraordinary authenticity” in a business setting, he says, “means having the ability to be yourself even in the toughest situations.” [emphasis added] In short, you must embody a paradox: To inspire others as a leader, Novak counsels us, you must know your stuff — and show that you do — while at the same time being willing, possibly even eager, “to admit when you don’t know stuff. You need to be confident and vulnerable at the same time. … Being yourself means letting your weaknesses show too.”

For professionals concerned with maximizing home sales, aren’t we edging into sort of frou-frou terrain here? Not at all, Novak insists: Self-awareness comes up repeatedly throughout his book, he explains, “because you’ll never get better at what you do without it.” And if you want to guide a team to achieve a certain goal, your responsibility doesn’t end at selfacceptance. You must also communicate to everyone you lead “how important it is for them to be themselves too.”

A Contrarian Approach Novak trots out a quartet of ideas designed to facilitate this sort of collective selfactualization. The one that makes me wish I worked for him is number three, “Create

To inspire others as a leader, Novak counsels us, you must know your stuff — and show that you do — while at the same time being willing, possibly even eager, “to admit when you don’t know stuff.” a Safe Haven: Make it easy for people to speak up, share their points of view, and express their individuality. Allow people to disagree with you, and when they do, thank them for it.”

Another worthwhile takeaway lesson from Taking People With You concerns the nature of learning itself. When people ask Novak what he looks for in a new hire, he confides, “an avid learner tops the list.”

He offers several tactics for becoming a “know-how junkie,” two of which bear repeating: 1. Seek Out Knowledge Holders and Sources. You’ll be astonished at the number of doors that fly open, Novak reveals, from the simple act of “just telling people you’d like to learn from them.”

2. Banish the Mindset of “Not Invented Here.” Businesspeople are too hung up on

the notion of pure originality, the author evangelizes. “Of course we need to distinguish ourselves from our competition,” he writes, “but that does not mean we can’t borrow good ideas, make them our own, and do an even better job of executing them.”

If you’re starting to get the sense that David Novak believes in “unleashing the power of people” — another key teaching from Taking People With You — you have clearly gotten with the program. He’s the sort of leader who’s unafraid to gainsay the findings of his finance department: When the latter credited a business turnaround at KFC to two new homegrown products (Crispy Strips and Chicken Pot Pie), Novak countered that it was actually “a triumph of the human spirit.” When those lower down the chain of command suggested a “customer focus” program, Novak escalated it to a “customer mania” program. And when some in-house apostate demurs that it may not always make sense to “put your faith in people,” Novak fires back that “you can reach your customers only through your people, so you better hire great ones, train them well, and empower them to satisfy your customers.”

Though Novak never explicitly articulates it as such, a strong theme of Taking People With You is precisely this notion of employee empowerment. His employees run the risk, we learn, of being recognized for their contributions to corporate growth by the public bestowal of a signed and numbered rubber chicken or see-through piggy bank; still, I wonder if some underling inspired by Novak’s leadership might not have come up with the worthiest idea in Taking People With You: All of the book’s profits will be donated to the United Nations Food Programme to support its mission to save the lives of starving kids around the globe. Who ever said that profits and ethics don’t mix?

Allan Fallow is a writer and book editor in Alexandria, Va. You can follow him on Twitter @TheFallow.

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New Products Program

CRS Chapters With a Heart

Course Listings

p. 38

p. 39

p. 43

inside CRS N E W S

F R O M

T H E

C O U N C I L

2011 CRS President Frank Serio, CRS (left), and 2012 President Mark Minchew, CRS

2011 NAR Conference Recap

T

he NATIONAL ASSOCIATION OF REALTORS® (NAR) Conference & Expo drew thousands of real estate professionals to Anaheim, Calif., in November, where attendees gathered to learn and share strategies for success.

Amid the festivities, the annual CRS meetings were held Nov. 9 – 12 and concluded with the inauguration of 2012 President Mark Minchew, CRS; President-elect Mary McCall, CRS; and First Vice President Ron Canning, CRS. All were sworn into

36 | January/February 2012

office during the Council’s inaugural dinner and awards ceremony Nov. 12.

New CRS President Mark Minchew has served the Council at all levels of the organization, including several national committees and the board of directors (see cover story, page 18). He also served as the first president of the Lone Star CRS Chapter and later as a regional vice president. Minchew has received the CRS President’s Award and the Medallion Award. He is broker-owner of RE/MAX Austin Associates in Austin, Texas.

CRS President-elect Mary McCall became a REALTOR® in 1988 and served as president of the Greater Tampa Association of REALTORS® and the Florida CRS Chapter. She has served on numerous committees and the board of directors for CRS, the Greater Tampa Association of REALTORS®, Florida Association of REALTORS® and NAR. She served two terms as a CRS regional vice president and is a CRS Medallion Award winner. McCall is a broker associate with RE/MAX ACR Elite Group in Tampa, Fla. CRS First Vice President Ron Canning has served the Council in multiple capacities over the years, including several national committees and the board of directors. He was a two-time president of the Ohio CRS chapter and was a regional vice president for six years. He is a Medallion Award winner and has taught real estate pre-licensing classes for the past 30 years. Canning is a broker associate for Comey & Shepherd REALTORS® in Cincinnati.

Celebrating Achievement During the ceremony, the Council’s 2011 president, Frank Serio, CRS, presented the President’s Award to LeRoy Houser, CRS; Geri Toberman, the Council’s director of executive and human resources administration; and Nina Cottrell, the Council’s CEO. The President’s Award recognizes individuals who provide exceptional support to the Council and its members, consistently demonstrate a

high level of service, go beyond what is expected, always show respect for others and foster trust by always acting with integrity.

Houser, who has been an outstanding CRS instructor for more than 30 years, has influenced countless CRS Designees and past and future Council leaders, Serio said. Toberman is “the person who literally keeps everything together for CRS,” he said. “Her efforts and ability to assist leadership, staff and the organization are truly remarkable.”

And while presenting the award to Cottrell, Serio conceded that Cottrell needed no introduction. “Everybody in this room knows about her unselfish commitment to CRS, her ability to manage Council initiatives and push all the right buttons, her joy in watching others receive this award instead of her, and everything she has done for CRS over an unbelievable 35 years,” he said.

Above: 2012 President-elect Mary McCall, CRS, and First Vice President Ron Canning, CRS, take the oath of office at the inaugural dinner.

Left: Serio hands off the president's gavel to Minchew at the CRS Board of Directors meeting.

Chapter Winners Serio also announced the 2011 Chapter of the Year award winners.

The Chapter of the Year award is given annually to CRS chapters in three categories — small, medium and large — in recognition of their outstanding effort to advance the Council’s mission and further the organization’s goals and objectives at the chapter level.

The small chapter of the year award went to the Idaho CRS chapter, which added several area representatives to assist with outreach activities to potential members and to connect with more than 141 members throughout the state. The chapter implemented a membership recruitment plan, launched its first Lunch and Learn program, hosted an education program about the CRS Designation, developed partnerships with local real estate groups to schedule and promote CRS classes, recruited sponsors for the annual membership meeting and increased

advertising to offset the costs of producing a regional membership directory.

The medium-sized chapter of the year was the Sierra Nevada CRS chapter, which expanded its educational programming and increased the number of sponsorships to help defray the costs of its events.

The CRS two-day class presented in March drew the chapter’s largest attendance in several years and brought in $2,700 in revenue. The chapter hosted a fashion show, which raised $4,500 to benefit RAVE Family Foundation and the Salvation Army Toys for Tots toy drive. Its “Choose Wisely” advertising campaign reached thousands of consumers via local newspapers, and the chapter raised the profile of CRS in the community by participating in a local breast

cancer walk and posting scoreboard announcements at a minor-league baseball game.

The Southern California CRS chapter won top honors in the large chapter category. The 519-member chapter expanded its course offerings and education programs, including presenting eight CRS two-day courses, which resulted in 28 new chapter members. The chapter promoted Sella-bration® with both an online and a live auction, and implemented video emails to promote upcoming classes and events. It also added five area VPs to connect with agents in far-reaching geographical areas, formed a Diversity Committee to broaden the chapter’s diverse membership, implemented a chapter stimulus plan for discounted CRS two-day courses, and set up an online registration website for events.

www.crs.com | 3 7

inside CRS

New Reviewed Products Program Debuts

O

ver the years, the Council of Residential Specialists has given its members access to hundreds of top-quality products and services to help them be more productive and successful in their business. Now the process for bringing those products to CRS members is about to change.

Effective Jan. 1, 2012, the QualityTested Seal of Approval program has been replaced by the CRS Reviewed Product Program to streamline the process for reviewing real estate products submitted by vendors and ensuring the Council offers the best quality products to its members. “Our current review process has been ineffective since it has not kept pace with changes in our membership and education,” says Stephanie Crain, the Council’s director of products. “The new program increases the opportunity for CRS to partner with multiple vendors and ensures that only the best-quality products and services will be linked to the CRS brand.”

Under the previous program, vendors paid CRS a nonrefundable application fee of $1,500 and provided access to their product or service for six reviewers, who had 45 days to complete their review.

Technical products were reviewed by an independent third party. Once it passed the initial review, the product was recommended to the CRS Executive Committee for the Quality-Tested Seal. Once approved by the Executive Committee, vendors signed a contract with CRS stipulating the share of revenue on the sales of their product to CRS members.

Both the Council and the real estate industry have experienced significant changes in recent years, and the previous program did not adapt well to those changes, says Clark Niblock, CRS, with Niblock Co. REALTORS® in San Antonio and chair of the Product Review

38 | January/February 2012

Committee. “The Council no longer ships product to courses nor warehouses any goods and/or services. This new business model is more realistic, costeffective and strategic, not to mention more CRS member-based,” Niblock says.

Under the new program, vendors submit a brief application form and a $500 application fee and give access to the product or service to 10 reviewers, who must review the product within 21 days. After the vendor receives feedback from the Product Review Committee, the product or service may be added to the CRS Store. CRS members who have purchased and used the product will be able to rate it. The product must receive ratings of 70 percent or higher from at least 10 CRS-designated reviewers in order to remain on the CRS Store.

Vendors also must pay a flat-rate fee of $250 per year to remain on the store, provided their ratings remain acceptable.

The program benefits CRS members who not only learn about new products, services and technology, but actively participate in the process by rating them on the CRS Store. “The reviews will be honest, straightforward opinions of how the product or service works in the real world of residential real estate. This input will allow fellow CRS Designees to make wiser decisions in the marketplace,” says Niblock. “Later in the process, all CRS Designees will be allowed and encouraged to express their views of the product. So this new process will be very interactive and give CRS Designees the opportunity to build their brand and credibility across the CRS membership. I am confident our members will enjoy and appreciate the opportunity to network among themselves about their favorite products.”

To learn more about the program or to submit a product for review, please email products@crs.com.

NAR Offers Automotive Benefit to Members Thanks to a recent partnership agreement, the Chrysler Group has become the exclusive automotive manufacturer for the NATIONAL ASSOCIATION OF REALTORS® as part of the REALTOR Benefits® Program.

Under the partnership, REALTORS® can receive a $500 cash allowance on the purchase or lease of select new Chrysler, Dodge, Jeep or Ram model vehicles. The cash allowance may be used in addition to other Chrysler Group retail incentives and special offers.

Also, REALTORS® who meet Chrysler’s requirements for its “On The Job” program will receive a free two-year service agreement that includes eight oil changes, lube job and filter with their purchase or lease — a $300 value. For details, visit www.REALTOR.org/Chrysler.

2011 REALTORS® of the Year

C

ongratulations to the following CRS Designees who were honored as the 2011 REALTORS® of the Year for their respective state REALTOR® associations.

ARKANSAS Kent Dover, CRS COLORADO Greg Zadel, CRS IDAHO Sara Bullers, CRS MARYLAND Anita T. Davis, CRS MISSOURI Doug Andrews, CRS NEW MEXICO Cheryl Ann Ragsdale, CRS NORTH CAROLINA Mary Louise Koebberling, CRS NORTH DAKOTA Rita Schuster, CRS PENNSYLVANIA Suzanne Gruneberg, CRS TENNESSEE Fontaine Taylor, CRS UTAH Stefanie Tugaw-Madsen, CRS VIRGIN ISLANDS B.J. Harris, CRS VIRGINIA John L. Powell, CRS WYOMING Sherry McGrath, CRS

C

RS chapters proved they had heart in 2011. Not only do they offer educational and networking opportunities for their members, they work hard to play a positive role in their communities. The Council’s annual Chapter with a Heart program recognizes these chapters for their charitable and humanitarian endeavors.

To qualify, CRS chapters must have donated at least $100 in cash or goods between Sept. 1, 2010, and Aug. 31, 2011. This year, CRS chapters and their members collectively donated $96,065 in cash along with food and supplies.

They also devoted hundreds of hours in volunteer time to help others in their communities. Congratulations to the following Chapter with a Heart award recipients: Alaska $2,000 for Kids’ Kitchen Arizona $1,610 for The Hearth Foundation Central Virginia Donations of food, volunteer time and $924 cash to the Central Virginia Food Bank

Colorado $1,370 to Operation Smile Connecticut $200 plus toiletries to Martha’s Place shelter for battered women Dakotas $456 plus personalcare items to Grand Forks Community Center Florida $5,000 to American Cancer Society Georgia $1,000 to Fisher House, $250 to GAR Scholarship Fund and $250 to Ronald McDonald House

Iowa $3,000 to American Red Cross for flood relief Kentucky $700 to benefit The Nest Louisiana $4,867 plus children’s clothing and school supplies for Polk Elementary School, NW Louisiana Food Bank, Susan G. Komen, Wellspring Alliance Maine $165 plus 100 pounds of food to Preble Street Resource Center Maryland/DC $370 plus 120 pairs of shoes to Project Alive, Soles4Souls, NAMI Massachusetts $2,013 to Angel Flight and $1,000 to VT/NH ABMEM Disaster Relief Michigan 580 pounds of can tabs to benefit Ronald McDonald House Mid South $250 plus toys and volunteer time to Youth Villages Minnesota $5,453 to Children’s Hospital and Clinics, Ascension Place and Hunger Solutions of Minnesota Missouri $876 to benefit three CRS members affected by the Joplin tornado Montana $4,415 to Camp Mak-ADream and American Red Cross Nebraska $6,480 to Central Nebraska Humane Society New Jersey $500 plus supplies and volunteer time to Eva’s Village New Mexico $200 to Presbyterian Blood Donor Services and Animal Humane Society of New Mexico New York $340 to The Morgan Center

Hawaii Aloha $9,490 to Shriners’ Hospital for Children

North Alabama $1,000 to Home Instead Senior Care

Idaho $500 to Habitat for Humanity

North Carolina $1,732 to Hope For The Warriors

Illinois $1,950 to Habitat for Humanity of Illinois

Northern California $1,915 to California Association of REALTORS® Housing Affordability Fund

Indiana $3,325 to Riley’s Children’s Hospital

North Florida $428 to Early Learning Center/Imagination Library of Escambia County Ohio $1,000 to Operation Buckeye Oklahoma $1,000 to Armed Services YMCA Oregon $490 to Oregon Food Bank and Oregon Association of REALTORS® Home Foundation Project Pennsylvania $1,801 to Multiple Sclerosis Society of Central Pennsylvania Sierra Nevada $450 to Komen Race for the Cure; $4,950 to Northern Nevada RAVE Family Foundation and Toys for Tots Southern California $3,000 to Habitat for Humanity (six local affiliates) South Carolina $193 and food to Helping Hands of Myrtle Beach, Miracle Hill Ministries and Lowcountry Food Bank Tennessee $2,300 for Susan G. Komen Race for the Cure Texas $2,500 Warrior and Family Support Center Texas Lone Star $13,450 to benefit Any Baby Can, Southeast Texas Food Bank, Promise House and My Friend’s House Virginia $5,965 and children’s clothing to Central Virginia Food Bank, Pediatric Center, Graham Road Elementary School and Leukemia and Lymphoma Society Washington State $599 to Habitat for Humanity Wisconsin $1,200 plus toiletries to Camp Hozhoni of the American Cancer Society, The Road Home Wyoming $500 to Niobrara County Sheriff ’s Search and Rescue Division www.crs.com | 3 9

Monkey Business Images/Veer

CRS Chapters Give Back

inside CRS CRSs Honored as CRS Chapter Structure Expands Good Neighbors The CRS chapter program continues to grow. The Council has added four new CRS chapters, including one international chapter. The new chapters are the Austin Area CRS chapter, the Greater Houston CRS chapter, the Rhode Island CRS chapter and the second international chapter, the Taiwan CRS chapter, bringing the total to 57.

Toni Sherman, CRS director of business relations, will serve as the regional vice president for the Taiwan chapter.

With the additional chapters, a 17th region was created and the regions were restructured as follows, effective Jan. 1, 2012: • R egion 1: Connecticut, Maine, Massachusetts, Rhode Island • R egion 2: New Jersey, New York, Pennsylvania • R egion 3: Maryland/DC, Virginia, Central Virginia, West Virginia • R egion 4: North Carolina, South Carolina, Tennessee • R egion 5: Alabama, North Alabama, Georgia, North Florida • Region 6: Kentucky, Michigan, Ohio • Region 7: Illinois, Indiana, Wisconsin • R egion 8: Iowa, Minnesota, Nebraska, Dakotas • Region 9: Kansas, Missouri, Oklahoma • R egion 10: Austin Area, Greater Houston, Texas, Texas Lone Star • R egion 11: Sierra Nevada, Southern Nevada, Utah • R egion 12: Alaska, Oregon, Washington • R egion 13: Northern California, Southern California, Hawaii Aloha • R egion 14: Florida, Bahamas (Int’l.), Louisiana • R egion 15: Arizona, Colorado, New Mexico • Region 16: Idaho, Montana, Wyoming • NEW Region 17: Arkansas, Mid South, Mississippi 40 | January/February 2012

Two CRS Designees are among the 2011 REALTOR® magazine Good Neighbor Award winners. Honorees are chosen for their commitment to improving their communities and for being examples of how REALTORS® value service.

For the past 20 years, LeRoy Bendickson, CRS, has led bike teams to raise money for the National Multiple Sclerosis Society, Minnesota chapter.

In 2011, his team of 250 “Real Estate Riders” completed a two-day, 150mile ride across the state and raised $146,000. Bendickson recruits riders from throughout Minnesota, coordinates their training, obtains sponsors, organizes lodging and transportation for his team, and provides a hospitality tent after the race. In the 20 years of these rides, his teams have raised nearly $1 million.

Bendickson is with Edina Realty in Edina, Minn.

“The award means so much in being able to promote the cause of [fighting] multiple sclerosis,” says Bendickson. “The $10,000 award was huge, and to be able to go out and promote our biking team, the Minnesota Multiple Sclerosis Society and the National Association of REALTORS® is a great honor.

The award gives us so much meaning to promote these organizations. It is now my responsibility to do all that I can to put out the word about the organizations and what they stand for.”

Judy Pitt, CRS, founded the nonprofit Kazi Yake in 2008 to bring clean water and improved hygiene practices to Kenyan families. Twice a year, Pitt takes teams of 20 volunteers to Kenya to provide water filters, train midwives and teach farmers how to increase their crop yields. In September 2011, Pitt, who is with Wright Kingdom Real Estate in Boulder, Colo., traveled to Kenya to open a well that brings clean water to 10,000 people in a rural village. She is raising money to build a medical clinic and plans to move to Kenya permanently one day to continue her work.

Personalize, Reproduce and Mail This Newsletter to Your Clients

Edit

Leave YOUR HOME as is, or personalize the newsletter by adding your photo, logo, address and phone number to the mailing panel.* You can also substitute any article in the newsletter with one of your own. Edit the newsletter ­electronically by downloading the Microsoft Word version at www.crs.com/ magazine/your_home_newsletter.shtml.

PLEASE NOTE: The images featured in the YOUR HOME newsletter may only be used within the PDF version of the newsletter. These images may not be reproduced or republished elsewhere outside of this newsletter format. CRS members are free to re-use the text of the articles contained in the newsletter, however.

Reproduce

Do it yourself with your office copier, or take the newsletter or electronic file (in addition to your photograph and any information you want inserted) to a printer who can prepare and reproduce the newsletter for you.

Distribute

Mail. If you photocopy YOUR HOME or use it “as is,” please note that it is designed to be folded in a Z fold with the words YOUR HOME facing out on one side and the mailing panel facing out on the other side. Postal regulations require that Z folds have three closures (tabs or tape) — one on top in the center and two on the bottom. For your convenience, we have placed asterisks (*) where the closures should be. Be sure to check with your local mailer or post office to make sure you have prepared your mailings properly.

Electronic File. Attach the customized newsletter file to an email to your clients or create a Web link to the file on your website. Consult your webmaster or technician to make sure the file is prepared correctly for these purposes, since these basic instructions will vary by person and system. * This newsletter is for the exclusive use of CRS members.

For a complete step-by-step guide to personalizing and ­reproducing the YOUR HOME newsletter, visit www.crs.com/ magazine/your_home_newsletter.shtml.

HOME *

YOUR T i p s

a n d

T r e n d s

f o r

h o m e o w n e r s ,

ROI matters

I

f you’re looking to make some upgrades to your home this year, be sure to think about what makes sense for your lifestyle as well as what will offer the best return on investment. Start by checking out the results of Remodeling magazine’s latest Cost vs. Value report.

If you have an attic, you could be using it for much more than just storing holiday decorations and boxes of mementos. According to the report, converting part of the attic into an extra bedroom — which, on average, costs just over $50,000 — can recoup 72 percent of the cost when the home is sold.

On the other hand, the addition of a deluxe master suite (an average cost of $230,000) will only recoup just over half of the investment.

If you’ve been thinking about sprucing up your outdoor space, now might be the time to invest in a new backyard deck; at an average cost of just over $10,000, this investment will recoup nearly 70 percent, the report says. When considering deck materials, choose wood over composite — it will recoup nearly 10 percent more on your investment.

Making over your garage can also be a good idea — replacing a garage door, which costs less than $2,000, recoups just over 70 percent of the total cost. But if your home is up for sale without a garage, it’s best to leave it alone. The addition of a garage costs about $58,000 and only recoups about 57 percent during resale.

Some other minor projects that might be worth the investment include replacing windows with insulated vinyl or wood models (the cost, between $7,600 and just over $8,000, is recouped by almost 70 percent), and remodeling the bathroom (cost is about $16,000 and the cost recouped is about 62 percent).

The bottom line? When making renovations, think small for an optimal return on investment.

b u y e r s

a n d

Ja n ua ry

2012

s e l l e r s

Bright Idea

L

ooking for a cost-effective way to increase security in your home and save energy at the same time? You could put some of the lamps in your house on a timer — or you could consider wireless lighting.

According to Frontdoor.com, wireless lighting enables you to replace switches in your home with receivers that respond to radio frequency signals from remote controls. It might sound complicated, but it’s fairly simple: Disconnect the manual switches and replace them with dimmers. Freestanding lamps that must be plugged into an outlet can be plugged into wireless receptors connected to the outlet. You can even program one remote to operate multiple lights throughout your house, no matter the size.

Aside from the ability to turn off a light downstairs when you’re already upstairs or turn on a light from anywhere in your home if you hear a suspicious noise, the main benefit of installing a wireless lighting system is reducing electricity and energy consumption. You can connect the system to a timer to set lights to turn on and off at specific times.

Wireless systems can range in price, from as little as $30 for a starter kit to hundreds of dollars to equip your entire home.

Before installation, talk to a certified electrician to ensure the kit you purchase is the best for your home.

fast fact »

»»»»»»»»

The most popular U.S. winter travel destination, according to Travel + Leisure magazine, is Salt Lake City.

B R O U G H T T O Y O U B Y Y O U R A G E N T, A M E M B E R O F T H E C O U N C I L O F R E S I D E N T I A L S P E C I A L I S T S

Clean Sweep

H

ave you made a New Year’s resolution to downsize all the “stuff” you’ve accumulated in your home?

You’re not alone. Get started with these tips from TLC and Real Simple magazine for tackling clutter in prominent spaces.

Closet Consider installing a second rod underneath the primary clothing rod to hang skirts, shorts, scarves and bags; you can double your storage and eliminate the need for shelving. Keep only in-season items in your closet; box the rest and store underneath the bed or in a storage closet.

To keep your closets from getting cluttered in the first place, implement a new rule: For each new item that comes in, two items must be thrown out or donated.

Kitchen Keep objects close to where they are used. For example, keep the dishes near the dishwasher, and the spices at arm’s length of the stove. If the objects in question are easier to put away after use, the kitchen is more likely to stay clean. Clear counters of unused small appliances and cookbooks and store them in cabinets or

shelves instead. Use the insides of cabinets and pantry doors to organize knickknacks, such as chip clips or bottle openers that can hang, or trim down an over-the-door shoe organizer to fit the inside of the cabinet to house these items.

Home Office Establish a filing system that you can easily — and immediately — use to keep bills and loose papers from getting out of hand. Keep labeled manila folders at the ready; assign folders for tax records, utility bills and medical expenses, for example. Consider investing in a scanner to digitize important documents and save them on a hard drive for easy (and paper-free) access. Create a “shelf life” rule for magazines; for example, purge weeklies after a month and monthlies every few months.

Say Yes to CRS

referr ve

s! al

I Lo

Buying or selling a home can seem like an overwhelming task. But the right REALTOR® can make the process easier — and more profitable.

A Certified Residential Specialist (CRS), with years of experience and success, will help you make smart decisions in a fast-paced, complex and competitive market.

To receive the CRS Designation, REALTORS® must demonstrate outstanding professional achievements — including high-volume sales — and pursue advanced training in areas such as finance, marketing and technology. They must also maintain membership in the NATIONAL ASSOCIATION OF REALTORS® and abide by its Code of Ethics.

Work with a REALTOR® who belongs among the top 4 percent in the nation. Contact a CRS today.

*

Do you know someone who is thinking about buying or selling a home?

DID YOU KNOW?

When deicing your steps this winter, consider magnesium chloride over calcium or sodium chloride. The latter can damage concrete and metal steps.

Please mention my name.

This newsletter is for informational purposes only and should not be substituted for legal or financial advice.

If you are currently working with another real estate agent or broker, it is not a solicitation for business.

*

inside CRS » » » » » » »

S E A R C H C O U R S E O F F E R I N G S B Y C I T Y A N D S TAT E AT W W W. C R S . C O M

CRS Classroom Courses CRS classroom courses earn either eight credits (for 100-level, one-day courses) or 16 credits (for 200-level, two-day courses) toward the CRS Designation. CRS Courses listed below are from Jan. 15, 2012, to April 30, 2012. For more up-to-date listings, visit www.crs.com/education/173.

FEB. 8 – 9 GRAND ISLAND, NEB.

MARCH 15 HELENA, MONT.

Grand Island Board of REALTORS® 308.382.0456 Instructor: Chuck Bode, CRS

Montana CRS Chapter

406.441.4863 Instructor: Mark Given, CRS

FEB. 9 – 10 EDINA, MINN.

Ninja Selling Life Planning

CRS 111 — Short Sales and Foreclosures: Protecting Your Clients’ Interests

FEB. 23 – 24 WICHITA, KAN.

MARCH 7 LITTLE ROCK, ARK. Arkansas CRS Chapter

501.860.0400 Instructor: Robert Morris, CRS, CRB

CRS 112 — Guiding the Buyer in the Distressed Property Market FEB. 2 LIHUE, HAWAII Hawaii Aloha Chapter of CRS 808.733.7060, ext. 105 Instructor: Frank Serio, CRS, CRB

FEB. 3 WAILUKU, HAWAII Hawaii Aloha Chapter of CRS 808.733.7060, ext. 105 Instructor: Frank Serio, CRS, CRB

CRS 201 — Listing Course FEB. 8 – 9 ORLANDO, FLA. Florida CRS Chapter

407.513.7268 Instructor: Gee Dunsten, CRS

FEB. 9 – 10 MERRILLVILLE, IND. Indiana CRS Chapter

309.579.2947 Instructor: Rich Sands, CRS

Minnesota CRS Chapter

952.912.2667 Instructor: Jackie Leavenworth, CRS Wichita Area Association of REALTORS® 316.263.3167 Instructor: Rich Sands, CRS

APRIL 19 – 20 STATE COLLEGE, PA. Suburban West REALTORS® 610.560.4800 Instructor: Michael Selvaggio, CRS, CCIM

CRS 204 — Wealth Building APRIL 18 – 19 MEMPHIS, TENN. Memphis Area Association of REALTORS®

901.685.2100 Instructor: Tina Daniel, CRS

FEB.16 TINTON FALLS, N.J. Monmouth County Association of REALTORS®

732.918.1340 Instructor: Michael Selvaggio, CRS, CCIM Ninja Selling Business Systems

MARCH 8 TINTON FALLS, N.J. Monmouth County Association of REALTORS®

732.918.1340 Instructor: Michael Selvaggio, CRS, CCIM The New Negotiating Edge … A 5-Step Behavioral Model

MARCH 14 BAXTER, MINN. Greater Lakes Association of REALTORS® 218.828.4567 Instructor: Ed Hatch, CRS, CRB

CRS 205 — Financing and Tax Course MARCH 21 – 22 HONOLULU, HAWAII Hawaii Aloha Chapter of CRS 808.733.7060, ext. 105 Instructor: Tina Daniel, CRS

Rich Buyer, Rich Seller – Part 1: Positioning and Branding Yourself as a Luxury Marketing Expert

JAN. 25 HOUSTON

CRS 210 — Referral Course

Hub Personal Insurance 214.485.3000 Instructor: Laurie Moore-Moore

FEB. 8 – 9 BELLEVUE, WASH.

FEB. 8 MIAMI

Washington CRS Chapter 425.974.1011 Instructor: Tina Daniel, CRS

Miami Association of REALTORS® 305.468.7050 Instructor: Laurie Moore-Moore

FEB. 28 SARASOTA, FLA.

MARCH 26 – 27 LOS ANGELES

CRS Elective Courses

Idaho CRS Chapter 208.239.0355 Instructor: Frank Serio, CRS, CRB

Each elective course is one day and earns eight units of credit toward the CRS Designation.

Sarasota Association of REALTORS® 214.485.3000 Instructor: Laurie Moore-Moore

Ninja Selling

MARCH 22 UPPER MARLBORO, MD.

CRS 202 — Sales Course FEB. 6 – 7 EAU CLAIRE, WIS. Wisconsin REALTORS® Association 608.241.2047 Instructor: Jackie Leavenworth, CRS

JAN. 26 TINTON FALLS, N.J. Monmouth County Association of REALTORS®

732.918.1340 Instructor: Michael Selvaggio, CRS, CCIM

Keller Williams Preferred Properties 214.485.3000 Instructor: Laurie Moore-Moore

APRIL 12 TUCsON, ARIZ. Keller Williams Southern Arizona 214.485.3000 Instructor: Laurie Moore-Moore

www.crs.com | 4 3

inside CRS Rich Buyer, Rich Seller – Part 2: A Luxury Marketing Idea Blitz

JAN. 26 HOUSTON Hub Personal Insurance 214.485.3000 Instructor: Laurie Moore-Moore

FEB. 9 MIAMI Miami Association of REALTORS® 305.468.7050 Instructor: Laurie Moore-Moore

It’s a Price War to the Door

FEB. 29 SARASOTA, FLA. Sarasota Association of REALTORS® 214.485.3000 Instructor: Laurie Moore-Moore

MARCH 23 UPPER MARLBORO, MD.

MARCH 7 KESWICK, VA. Virginia CRS Chapter

800.755.8271 Instructor: Jackie Leavenworth, CRS

Keller Williams Preferred Properties 214.485.3000 Instructor: Laurie Moore-Moore

APRIL 13 TUCSON, ARIZ. Keller Williams Southern Arizona 214.485.3000 Instructor: Laurie Moore-Moore

NOTE: Instructors listed on all courses are subject to change.

RESOURCES • January/February 2012

residential The

Specia li s t

Golden Opportunities Bill Carter, CRS, RE/MAX Real Estate Groups billcarter@remax.net

Trust Funds

The Big Fix

Gay Ashley, CRS, Ashley Realty Group GayAshley@AshleyRealtyGroup.com

David C. Jones III, CRS, Windermere Real Estate/West Sound Inc. dcjones@windermere.com

Mark Ryan, CRS, RE/MAX Victory Mark@MarkRyanGroup.com

Tony Dahm, CRS, Prudential Fox & Roach Realtors Tony@TonyDahm.com

Travis Waller, CRS, Exit Realty Your Home Connection TravisCWaller@gmail.com

Craig Hawker, CRS, Coldwell Banker Residential Brokerage Craig@HawkerHomes.com Kathy McGuriman, CRS, with Long & Foster Real Estate Kathy.mcguriman@lnf.com

w w w. c r s . c o m

44 | January/February 2012

Jim Kouns, CRS, Coldwell Banker Lunsford jkrealtor@jekouns.com Chris McElroy, CRS, The Group Inc. chris@thegroupinc.com Barry Owen, CRS, Pareto Realty barryo@comcast.net C. Michael Royce, CRS, Royce & Associates Realty MikeRoyce@MikeSellsDayton.com Vernon E. Taylor, CRS, Keller Williams Tampa Properties vernont@kw.com

CRS REFERRAL MARKETPLACE

East Coast

Manuel Vargas Licensed Broker Associate

Bachelor of Science in Real Estate, NYU, Magna Cum Laude Serving Manhattan and Queens for over 17 years

C

Cell: 917-559-2002

E m a i l : M a n u e l @ i s e l l ny. c o m

SO U T H

Claire Bisignano Chesnoff

N.Y.S. Licensed Real Estate Broker, ABR, AHWD, ASP, BCREP, CHLMS, CRS, GREEN, GRI, SRES

Board Certified Real Estate Professional DIRECT: 917-974-2239 OFFICE: 718-524-4424 FAX: 718-524-8538

EMAIL: claire@claireproperties.com

Serving the Real Estate needs of Staten Island and Brooklyn, New York www.claireproperties.com

ABR, CRS, SRES, GRI, CDPE

Serving Northern Virginia and the Dulles Tech corridor

Offices in Ashburn, Leesburg and Sterling Re/Max Select Properties, Inc.

703-999-6535 lisacromwell@remax.net www.LisaCromwell.com

SOUTH FLORIDA Serving Fort Lauderdale & the Palm Beaches “Dr. Short Sale”

Sandy Ernst, CRS

Ray Singhal, Ph.D Past President of MN CRS

(954) 770-8083 SinghalFlorida.com Ray@SinghalFlorida.com Wieder Realty, Inc. CRS, GRI, CDPE, ABR, SRES, SFR, CSSP, E-Pro

H AWA I I

Lance Jason Boca Expert Realty, LLC Broker Associate CRS, GRI, e-Pro, SRES Phone: 561-290-9866 Lance@LanceJason.com www.LanceJason.com Specializing in Boca Raton, FL and surrounding areas.

Canada

BUILD REFERRALS

to your region from more than 36,000 CRS Designees and members with an ad in the Referral Marketplace.

Limited Space Available First Come, First Served Ask us about multi-issue discounts

Just call Andrea Katz at 202.721.1482 46 | January/February 2012

Ask a CRS | Advice from the country’s top Certified Residential Specialists

office space Q U ESTIO N : Does the location of your office matter to your clients?

IN OUR EXPERIEN C E . . .

“A great office location makes sense if you wish to grow and add agents. Signage is important to get walk-in traffic. As the regional owner of Realty World in the Carolinas, I have great office locations and some where the broker-owner or team operates out of their basement or garage, and they do real well. It just depends on what your future plans are and what kind of growth you want for your business.”

“It matters a great deal to agents looking for a new broker, but not to consumers. In the six years I’ve been independent, I’ve only had one customer ask where my office is, and it did not bother them that I work from my home. Sellers prefer to meet at the property they are selling, and buyers like to meet at the property they want to see. And kitchen countertops work just fine for signing paperwork.”

Maurice Johnson, CRS

Kimberly Brandon, CRS

Realty World Carolinas

Smart Moves Real Estate

Pinehurst, N.C.

Panama City, Fla.

Carolinas@realtyworld.com

SmartMovesRE@gmail.com

“I have a fantastic office at the edge of one of our biggest suburbs, Bellevue, that I am hardly in.

Since most of my customers are referrals, we meet in their homes or at a local coffee shop. Less than a handful of clients prefer coming into the office as parking is not always available or traffic is terrible, etc., unless they are coming from work. They don’t even know that I work from home, but I am willing to come to them. A big, visible, two-story office is great for the franchise, but not for providing individualized service to clients.”

Barb Avery, CRS RE/MAX Eastside Brokers Bellevue, Wash.

seattlesuburbs@yahoo.com

»»»»»

Please submit real estate questions for “Ask a CRS” to Mike Fenner at mfenner@crs.com.

48 | January/February 2012

There are so many ways to do business with Stewart, you’re sure to find a flavor you like.

Four convenient ways to access your transactions – another reason why we’re the right choice for you.

Stewart Title Company understands you deserve to choose when and where you manage your transactions. And we provide an assortment of choices to better meet your needs.

Try them all to discover your favorite, such as: Stewart Online™, powered by SureClose® Anytime access through your computer Stewart My Files mobile app Get information on the go, 24/7, over your Apple® or Android™ device Weekly Summary Reports All activity in the past seven days delivered to your inbox in one, easy-to-read email Personal update Call or drop by our office to experience personalized service.

For more information on the many ways to access your transactions and why Stewart Title is the right title company for you, visit stewart.com/convenience or call (800) STEWART.

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