March/April 2013
State of the MARKET REPORT THE RESIDENTIAL SPECIALIST
Navigating SHORT SALES Understanding Estates AND FAMILY TRUSTS
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FOND MARCH/APRIL 2013
FAREWELL COUNCIL
CEO NINA COTTRELL
PREPARES TO RETIRE AFTER A LONG AND SUCCESSFUL CAREER.
THE POWER OF PROFESSIONALISM
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residential The
S pecia li s t
March/April 2013 VOL. 12, NO. 2
30
18 features
18 Take a Bow
By Michael Fenner After four decades with CRS, CEO Nina Cottrell prepares to retire.
22 State of Play
By Gayle Bennett State REALTOR速 association representatives assess where their markets have been and where they are going.
26 Estate of the Heart
By Regina Ludes A good attorney can help agents grasp the complexities of trusts and estates law, but REALTORS速 also must rely on their own real estate experience.
30 Short Cuts
By Gwen Moran CRSs share their strategies for navigating the short-sale process.
w w w . c r s . c o m Cover photo by Callie Lipkin
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residential The
S pecia li s t
5 9
departments 4 PRESIDEN T ’S MESSAGE 5 Q UICK TAKES
inside CRS FROM 36 NEWS THE COUNCIL Sell-a-bration® Recap Howard Brinton Tribute CRSs of the Year Your Home newsletter
By Mary McCall, CRS
Luxury home sales; mortgage highs and lows by state; remodelers’ outlook; and more
9 GREAT FINDS 10 TECHNOLO GY
Digital video cameras
47 REFERRAL MARKE TPLACE 48 ASK A CRS
Advice from the country’s top agents
By Dan Tynan Mobile-friendly websites
12 TRENDS
By Rebecca Scherr The college-town market
14 P IP ELINE By Chris Bird Tax tips
16 UP CLOSE
Stephanie Burg-Brown, CRS Nextage Diamond Realty Philadelphia
34 GO OD READ
Reviewed by Allan Fallow The Zen of Social Media Marketing: An Easier Way to Build Credibility, Generate Buzz, and Increase Revenue By Shama Hyder Kabani
2 | March/April 2013
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Coming In The Next Issue ... n
In the Shadows
What do agents need to do to serve pent-up demand from buyers and sellers who were waiting out the market? n
Veteran Affair
As more military veterans return home from conflicts overseas, agents must learn how to serve them and their unique needs. n
EDITOR Michael Fenner Email: mfenner@crs.com Tel: 800.462.8841, ext. 4428 Fax: 312.329.8882
PUBLICATION MANAGEMENT
ASSOCIATE EDITOR Regina Ludes Email: rludes@crs.com Tel: 800.462.8841, ext. 4404 Fax: 312.329.8882
Publishing Manager Andrea Gabrick Email: agabrick@tmgcustommedia.com
Luxe Life
2013 COMMUNICATIONS ADVISORY PANEL Moderator: John W. Goede, CRS Co-Moderator: Clark Niblock, CRS
Field Day
2013 COMMUNICATIONS ADVISORY PANEL MEMBERS Israel Ameijeiras, CRS; Cathy Armstrong, CRS; Jan Brito, CRS; Alexis Bolin, CRS; Shelly Campbell, CRS; DeDe Carney, CRS; Gretchen Conley, CRS; Bobbi Howe, CRS; Colleen McKean, CRS; Nancy Metcalf, CRS; Vince Price, CRS; John Stark, CRS; Marylea Todd, CRS; Beverlee Vidoli, CRS
A look at the state of the luxury home market. n
Specia li s t
A day in the life of a CRS: How do they stay productive and focused? Would you like to be 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 2013 editorial calendar online at www.crs.com.
CONTRIBUTING WRITERS Mary Ellen Collins, Daniel Rome Levine, Gwen Moran OFFICERS: 2013 President Mary McCall, CRS Chief Executive Officer Nina J. Cottrell
PLUS: What agents need to know about flooding
2013 President-Elect Ron Canning, CRS 2013 First Vice President Dale Carlton, CRS 2013 Immediate Past President Mark Minchew, CRS
McMurry/TMG, LLC Tel: 202.331.7700 Fax: 202.331.2043
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? Email 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 2013 by the Council of Residential Specialists. All rights reserved. Printed in U.S.A.
www.crs.com Jan uary /Feb
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e for a How to PreparMa rket Recovering
DENT THE RESI
Pros and Cons ofs n Site Listing Aggregatio to Get es Tak It at Wh Fence Clients Off the
IALI IAL SPEC ST
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President’s Message | News from Mary McCall, CRS
Jensen Larson Photography
Opportunities for Growth
While the Council enters a new phase, it remains committed to delivering cutting-edge education and events.
4 | March/April 2013
I’ve just returned from Las Vegas, where the Council hosted Sell-a-bration® 2013, its annual education conference. This year marked the 25th anniversary of the event, which more than 500 real estate professionals attended. Whether by attending the workshops and education sessions, participating in the small-group discussions or simply conversing with colleagues over lunch, attendees walked away armed with practical solutions to many of today’s business challenges. It was wonderful to see so many familiar faces there and to get acquainted with new Designees I had not met. (See page 36 for a recap of Sell-a-bration® 2013.) Sell-a-bration® was especially bittersweet this year as the Council honored the legendary Howard Brinton, who passed away in December after a lengthy illness. Howard inspired hundreds of real estate professionals over the years as an instructor. He emceed six Sell-a-brations® and served as the Council’s president in 1984. He will be tremendously missed and always remembered (see tribute, p. 40). This was also the final Sell-a-bration® for the Council’s CEO, Nina Cottrell, who will retire at the end of May. She is an icon in our industry who nurtured the Council from its infancy to the stellar worldwide premier organization it is today. Nina is featured in this issue of The Residential Specialist (p. 18). The Council continues its search for a new CEO, who will be introduced in a future issue of the magazine. There’s much to look forward to in the coming months. While the Council enters a new phase, it remains committed to delivering cutting-edge education and events like Sell-a-bration® and the Legends Series so our members can learn the skills they need to help them succeed in the “new normal” marketplace. So keep learning and keep building your referral network. Those two components will help you provide superior service to your customers for many years to come. I hope to see many of you in May at our Mid-Year meetings!
QuickTakes | Industry headlines, statistics and trends
Internet Search
REMODELERS SEE A BRIGHT 2013
States with the most online inquiries from first-time buyers: 1. Delaware 2. Louisiana 3. Mississippi 4. South Dakota 5. Wyoming
As the housing market continues to improve in many areas of the country, so does the remodeling industry, which grew significantly in the fourth quarter of 2012 and is forecast to hit an all-time high in the first quarter of 2013, according to the National Association of the Remodeling Industry (NARI). Growth indicators for current business conditions rose 2.1 percent in the fourth quarter from the previous quarter. The number of inquiries increased 3.9 percent, requests for bids rose 3.7 percent and conversion of bids to jobs rose 3.5 percent. Two-thirds of remodelers surveyed say prospects for the first quarter of 2013 are positive, with a rating jump of 13.1 percent from the third quarter of 2012. Homeowner security is driving these positive results, says Tom O’Grady, chairman of NARI’s Strategic Planning and Research Committee. “Remodelers are indicating major growth in the future, with many saying that clients are feeling more stable in their financial future and their employment situations; therefore, they are spending more freely on remodeling needs,” O’Grady says. However, NARI members say some homeowners are spending on remodeling out of necessity after delaying projects because of the recent recession. They also seem to be spending more conservatively than they did prior to the housing crash.
States with the most online inquiries related to retirement homes: 1. Nebraska 2. North Carolina 3. Oregon 4. Virginia 5. Washington States with the most online inquiries related to vacation homes: 1. Florida 2. Ohio 3. Oregon 4. South Carolina 5. South Dakota Source: The Digital House Hunt: Consumer and Market Trends in Real Estate, NATIONAL ASSOCIATION OF REALTORS® and Google, January 2012
Debt-Free Homeownership Nearly three out of 10 homeowners, or 20.6 million Americans, own their homes free and clear of mortgage debt, according to a recent survey by Zillow, the online listing aggregation and valuation service. Among the nation’s 30 largest metro areas included in the study, Pittsburgh had the highest percentage of free-and-clear homeowners at 38.6 percent, followed by Tampa (33.2 percent), New York (29.7 percent), Cleveland (29.4 percent) and Miami (28.9 percent). Washington, D.C., had the lowest percentage of mortgage-free homeowners at 15.5 percent, followed by Atlanta (17.7 percent), Las Vegas (18.3 percent), Denver (18.5 percent) and Charlotte (20 percent). Median home values may be one factor driving the percentage of homeowners who are debt-free. Cities with lower home values, for example, generally have higher homeownership rates, as smaller loan amounts can be paid off more quickly. Demographics and borrowers’ credit ratings can also influence the percentage of free-and-clear homeowners. About 20.5 percent of those age 65 to 74 own their homes outright, followed by those age 75 to 84 (17.9 percent). Meanwhile, a staggering 34.5 percent of owners between the ages of 20 and 24 are free of mortgages. www.crs.com | 5
QuickTakes | Industry headlines, statistics and trends
ABILITY-TO-REPAY RULE
A new mortgage lending rule from the U.S. government’s consumer watchdog group will require lenders to ensure that buyers are able to repay their mortgage and protect borrowers from risky lending practices. The Consumer Financial Protection Bureau’s (CFPB’s) Ability-to-Repay rule, which will go into effect in January 2014, addresses some of the core factors that fueled the mortgage crisis, including a deterioration in lending standards and lenders who originated mortgages to consumers without verifying their ability to repay the loans. The CFPB was established as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. “Our Ability-to-Repay rule protects borrowers from the kinds of risky lending practices that resulted in so many families losing their homes. This common-sense rule ensures responsible borrowers get responsible loans,” says CFPB director Richard Cordray. Some of the Ability-to-Repay rule’s key requirements include: • Financial information must be supplied and verified. Lenders must document borrowers’ employment, income, debt obligations, credit history, etc. In other words, lenders can no longer offer “low-doc” or “no-doc” loans. •A borrower must have sufficient assets or income to pay back the loan. Lenders must evaluate a consumer’s debt-to-income ratio to determine if he or she can afford the loan. • T easer rates can no longer hide a mortgage’s true cost. Lenders must base their evaluation on a consumer’s ability to repay the principal and interest over the long term — not just during an introductory teaser rate. In order to comply with the new Ability-to-Repay rule, lenders must issue “qualified mortgages,” which include: no excess upfront points and fees; no toxic loan features; and a cap on how much income can go to debt. “When consumers sit down at the closing table, they shouldn’t be set up to fail with mortgages they can’t afford,” Cordray says.
ON THE MOVE The number of people who changed residences in 2012 increased from 35.1 million in 2011 to nearly 36.5 million in 2012, representing 12 percent of the population, up from a record low of 11.6 percent in 2011, according to recent U.S. Census Bureau estimates. While the overall mover rate has increased since the record low set in 2011, mobility is still at low levels, even for the most mobile age group, 18to 29-year-olds. The most common state-to-state moves were regional in nature. Some 59,288 residents moved from New York to Florida in 2012, while 58,992 individuals moved from California to Texas and 49,635 moved from California to Arizona. More people moved out of metropolitan areas and into the suburbs. Between 2005 and 2010, 15.4 million people moved out of principal cities while 11.0 million moved in — a decrease of 4.4 million movers, the U.S. Census Bureau reports.
Multigenerational Households Many homeowners expect their adult children or aging parents to move in with them at some point in the future, according to a recent survey by homebuilder Pulte Homes. Two demographic groups were surveyed: adults with children aged 16–30 and those with living parents. Among respondents with grown children, 14 percent reported they already have an adult child living with them, and 31 percent expect at least one child will be returning home in the future. Among those with living parents, 15 percent said they 6 | March/April 2013
already have an aging parent living with them, but 32 percent expect eventually to share their home with a parent. As multigenerational households continue to grow over the next few years, homeowners say they plan to purchase a new home or renovate their current one to accommodate additional family members. The most important features to comfortably support an extended family include separate living spaces, such as a mother-in-law suite, extra bathrooms and larger great rooms, the survey concludes.
BOOMERS’ HOUSING OPTIONS Beyond traditional senior housing, baby boomers (born 1946–1964) and those from the previous “silent” generation are exploring a mix of housing options, creating niche markets that could grow as more over-65 Americans decide to move, according to a recently published report by the Urban Land Institute. These housing options include: • College towns, which allow boomers to live near their children and grandchildren while enjoying campus activities. • Manufactured housing, a more affordable option, but which faces the challenge of locating approved sites in established areas. • Co-housing and group living, which must be multigenerational to maintain mutual support as residents get older. • Multigenerational living, which is increasing faster than overall household growth, but is difficult to implement in urban areas dominated by apartment communities. • Affinity retirement communities, which bring people together with shared interests ranging from sports to gardening to culture. The number of retirement communities targeting specific university alumni, for example, has doubled over the past 10 years.
BEST HOUSING BETS
LUXURY-HOME
SALES
Caroline von Tuempling/Getty Images
Which cities (by ZIP code) had the most sales of luxury homes over $5 million in 2012?
ZIP code City/State # of Listings 90210 Beverly Hills, Calif. 70 90265 Malibu, Calif. 40 81611 Aspen, Colo. 33 93108 Santa Barbara, Calif. 33 33139 Miami Beach, Fla. 29 06830 Greenwich, Conn. 28 90049 Los Angeles 24 94027 Atherton, Calif. 23 90077 Los Angeles 21 92651 Laguna Beach, Calif. 20 90272 Pacific Palisades, Calif. 20
Cities in the Western U.S. offer the best opportunities for sellers, while Midwest and MidAtlantic markets offer the best deals for buyers, according to Zillow. In Western cities such as San Francisco, Las Vegas and Phoenix, home sellers can take advantage of locally strong demand and may have the upper hand in negotiations. Meanwhile, homebuyers in Midwestern and Mid-Atlantic markets such as Chicago, Cleveland and Philadelphia can take advantage of price discounts exceeding 5 percent in some areas and listings that have been on the market for 100 days or longer. The strength of sellers’ markets in California, Nevada and Arizona — areas previously hit hard by the housing bust — is driven by investors, who purchase distressed and non-distressed properties and convert them to rentals. The high investor activity is dropping inventory in these areas to record lows, which in turn has increased demand and is driving up home prices, Zillow concludes.
Source: Coldwell Banker Previews International, Luxury Market Report Ultra-Luxury Survey, 2012
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QuickTakes | Industry headlines, statistics and trends
Highs and
Lows
States with Lowest Monthly Mortgage Payments: (Nov. 2011 – Nov. 2012) 1. Nebraska — $711 2. Arkansas — $716 3. Iowa — $717 4. Oklahoma — $731 5. Missouri — $741 Source: Lending Tree
U.S. Populace Gets Older, More Diverse The U.S. population will be considerably older and more racially and ethnically diverse by 2060, according to the U.S. Census Bureau. The population is projected to grow more slowly over the next several decades as the birth rate and net international migration are expected to be lower than previous projections made by the Census Bureau in 2008 and 2009. The population of Americans over age 65 is expected to more than double from 43.1 million in 2012 to 92.0 million in 2060, representing about one in five people. Meanwhile, individuals age 85 and older are projected to triple from 5.9 million in 2012 to 18.2 million in 2060, which would account for 4.3 percent of the population. 8 | March/April 2013
GLOBAL WARMING Foreign investors appear to be warming up to the idea of purchasing U.S. real estate again, according to a survey by the Association of Foreign Investors in Real Estate (AFIRE). Four U.S. cities — New York, San Francisco, Washington, D.C., and Houston — are among the top five global markets for foreign investment, while London is the lone international market on the list. San Francisco and Houston were cited for their job growth in energy and technology, which could drive future economic growth, says AFIRE CEO James Fetgatter. “As other economic drivers emerge, it will not be surprising to see investors seek opportunities beyond the traditional New York and Washington, D.C., markets.” More than half of those foreign investors surveyed (55 percent) ranked the U.S. first in providing opportunities for capital appreciation. Eight out of 10 said they plan to increase the size of their U.S. portfolios, with 31 percent planning a “major net increase.” Further, 55 percent believe the U.S. will provide the most stable and secure real estate investments in 2013. Nearly four out of 10 (39 percent) viewed the U.S. real estate market more optimistically in 2013 than they did a year ago. Meanwhile, the 33 percent who had viewed the U.S. market negatively a year ago have all but disappeared.
Arrows: Leigh Prather/Veer
States with Highest Monthly Mortgage Payments: (Nov. 2011 – Nov. 2012) 1. District of Columbia — $1,641 2. Hawaii — $1,536 3. California — $1,445 4. Virginia — $1,357 5. New Jersey — $1,237
Great Finds | Tools of the trade
video gains Sometimes a still photo just isn’t enough to capture the essence of a real estate listing — or your personality as a REALTOR®. Getting clients’ attention in a crowded market calls for an important piece of equipment: the digital video camera. But with all the choices — at a variety of price points — which is the right one for you? Consider these options.
pocket pick shop.panasonic.com/shop/model/HX-WA03W If you’re looking for a video camera that’s the same size as your smartphone, but isn’t your smartphone, the Panasonic HX-WA03: Active Lifestyle Camcorder might fit the bill. This easy-to-use device captures full HD video and allows users to record up to 60 minutes comfortably in one hand, making hard-to-reach places more accessible. It features a full LCD screen and an autofocus 18x zoom lens with a digital image stabilizer. An added bonus: It snaps 16-megapixel photos and includes nine filters for artistic or heightened effects, such as sepia, vivid and monochrome.
199.99
sound effect www.zoom.co.jp/products/q2hd The Zoom Q2HD, a pocket-sized handheld digital video camera, is known for its high-end audio features. Its high-quality microphone captures sound in front as well as on the sides of the camera and features a preset function that automatically sets the recording level for any situation. This device shoots full HD videos and features a 4x zoom lens, lighting selection modes that allow users to adjust to any lighting, in-camera editing and an easy-to-navigate menu. It also allows users to live-stream events and connect to HDTVs.
199
pro go store.sony.com If you’ve got skills that rival a professional videographer’s, you might want to consider a more advanced (and more expensive) camcorder — the Sony HDR-PJ710V. Although not compact, it’s portable, weighing a little over a pound. The camera features image-stabilization technology, which will help while filming as you move through a house, as well as easy-touse automatic and manual controls. blog cabin store.sony.com Is your blog an important part of your marketing efforts? Then make video a part of your blog. The Sony Bloggie MHS-TS55/S, a high-definition video camera, has all the features that make video blogging easy: three HD capability options, along with a 360-degree camera lens, which allows you to capture all angles of a room. It can shoot 5-megapixel still images, and it has an expandable memory.
1,418
249.99 www.crs.com | 9
Technology | Streamlining your business
going mobile By Dan Tynan
Nearly 75 percent of mobile device users prefer a mobile-friendly website, and 67 percent say they are more likely to buy a product or service from a mobilefriendly site. Source: Google
10 | March/April 2013
R
ob Levy, CRS, shows two distinctly different faces to the Internet — and that’s a good thing. Visit the Portland, Ore., REALTOR’S® site (roblevy.com) on a laptop or desktop computer, and you’ll see a fairly standard agent site, complete with photos of Levy and his Keller Williams Realty Professionals team on the home page, short videos and photos of top listings, an email sign-up form, an RSS feed for his blog and a link to an MLS property search tool. Visit Roblevy.com on a smartphone, however, and you’ll see something different: a scrollable list of his top 10 properties sorted by price, along with photos and the essential listing information. Tap a listing to view up to 21 more photos of each property;
tap a button to see it on a map, set up a showing or request more information. So the same REALTOR® provides two very different sites — and that’s intentional. Like a lot of plugged-in agents, Levy understands that mobile devices are changing the way real estate is bought and sold and what that might mean for how he markets himself. Late last year, the 25-year real estate veteran began working with Real Pro Systems to create a mobile site targeted at consumers using smartphones. His goal: to put the information customers want most — photos, prices and property specs — within easy reach while branding himself as a mobilesavvy professional. According to a 2012 survey by the NATIONAL ASSOCIATION OF
violetkaipa/Veer
REALTORS ® who have not optimized their websites for mobile devices may be putting themselves behind the competition.
REALTORS® and Google, more than 90 percent of homebuyers research purchases using their mobile devices. Real-estaterelated Google searches on mobile devices increased 120 percent from 2011 to 2012. “REALTORS® are making a huge mistake when they say, ‘Look at my site on your phone,’ and all they’ve done is take their normal Web page and squeezed it down to fit on a 4-inch screen,” Levy says. “That’s not a mobile site. So many people live on their mobile phones these days that it’s got to be a good experience for them, or they will just go elsewhere.” Many REALTORS® are realizing that if they optimize their websites to better reach mobile consumers, they may get a step ahead of the competition. Likewise, as smartphones become an even more important tool for buyers and sellers looking for real estate information, agents who can’t compete are at risk of falling behind.
Think Mobile First Creating a user-friendly site should be the goal of any business, but making it mobile-friendly takes more work, says Sandy Greene, partner and creative director at Intuitive Company, a Philadelphia firm that creates mobile sites and apps for businesses across a wide range of industries. If you’re thinking about redesigning your current site or starting from scratch, design the mobile site first, Greene says. The lessons you learn in streamlining the mobile experience will translate well to the larger site. “Thinking about your mobile site first forces you to start with something simple — the key information on the home page, the more obvious actions you want visitors to take, and simpler flows from one part of the site to the next,” Greene says. “Keeping that philosophy pays dividends as people experience your site on a larger device. They will understand things more quickly, and you won’t be forcing them to do a million things at once.”
Find Your Focus Since mobile sites are, by definition, smaller and simpler, their content matters more. So REALTORS® should focus on what makes their real estate practice stand out, Greene advises. “The REALTORS® we’ve worked with have lots of ways to stay in front of their customers, like Facebook, Twitter and
“REALTORS® are making a huge mistake when they say, ‘Look at my site on your phone,’ and all they’ve done is take their normal Web page and squeezed it down to fit on a 4-inch screen.”
email blasts,” Greene says. “We often start by asking them, ‘What makes users come to your site versus others? What can we do to make your site more valuable to customers and prospects?’ ” For Levy, figuring out what to emphasize on his mobile site was a bit like deciding how much information to put on a flyer. Include too much data, and buyers might not feel the need to contact you. Reveal too little, and you risk making the sellers unhappy. His solution was simple: Include as many pictures as possible. “Photos are what get people excited and cause them to want to see your listing,” he says. “It’s all about exposure. Going mobile really helps promote my properties.”
Get Responsive The key to creating a seamless mobile experience is to embrace “responsive design,” says WordPress consultant Brian Lis. Simply put, responsive design means that the site’s appearance and functionality will change depending on the device used
to view it; responsive-designed sites automatically configure the information viewers see on screens according to the device being used, be it a desktop, tablet, smartphone or the next big thing. “The future of Web design is responsive design,” Lis says. “If you have four horizontal pictures on your site and it’s not responsive, they’ll be smashed together or viewers will have to zoom in to look at each one. In a responsive design, the pictures will be large enough to see and will line up vertically, so you can scroll up and down between them.” Responsive design also has some SEO benefits — having a separate mobile site in addition to your main site can create duplicate search results, which confuses search engines and siphons traffic. But there are some downsides to responsive design. Because it’s so new, your choice of templates may be limited at first. Responsive design also requires coding skills beyond that of many graphic artists who market themselves as Web designers, Lis says. Hiring a programmer can boost the cost of building a site by as much as 25 percent, he estimates. Still, he says, that’s far less than the cost of potential lost sales due to a lousy mobile Web site. “REALTORS® are missing their market if they don’t assume customers are out there using smartphones,” Lis says. “They drive through neighborhoods, see a for-sale sign and look at their phones. If the site accommodates that well, it reinforces the idea you’re a professional they’d want to do business with.”
Do It Now In three or four years, responsive design will be standard for most sites, Lis says. But for agents who want to reach younger tech-savvy buyers, it’s important to get started now. “If you want to reach Generation X and Y buyers who use their smartphones for everything, you really need to do this,” Levy says. “If you don’t, they won’t be looking at the listing properly, and you won’t be getting any future business out of them. Making your site mobile-friendly is really just giving customers, buyers and sellers what they want.” Dan Tynan is a freelance writer based in Wilmington, N.C.
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Trends | Today and tomorrow
campus life College towns weren’t exempt from the housing crisis. Now they, too, are showing signs of recovery.
“The parents and family members of the college students can produce a great pool of buyers.” —Kelly Kniffin, CRS
12 | March/April 2013
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icturesque. Vibrant. Seemingly recession-proof. From a real estate perspective, college towns can be very appealing. And it’s not just students, faculty, staff and their families who feed the real estate market in such towns. Some baby boomers are choosing college towns over the stereotypical Florida and Arizona retirement locales, in part because they want a location that offers an energetic, affordable lifestyle, says Kelly Kniffin, CRS, of RE/MAX Pinnacle in Durango, Colo. Investors, too, flock to these towns to take advantage of low prices and a steady stream of renters. And in some cases, parents of college students believe it makes financial sense to buy a place for their college-student child to live in and resell it after graduation.
But despite these positive factors, college towns, it turns out, are not recessionproof. Like most other parts of the country, the housing markets in many college towns took a hit when the bubble burst in 2007. And for REALTORS® who serve college towns and the surrounding areas, the economy remains top of mind, much as it has for their peers across the country. Home sales generally are on the upswing, and while most college towns report that the bubble did in fact hit — just not as hard — CRSs are starting to see home prices near campuses turning around, too.
Fayetteville, Ark. Population: 75,102 University of Arkansas enrollment: 24,537 In Fayetteville, Ark., says Judy Luna, CRS,
Skip O’Donnell/iStockphoto
By Rebecca Scherr
of Keller Williams, the market has seen significant changes over the past few years. She describes her area as a series of small towns that are rapidly urbanizing. Traditionally, the college town had been the cultural center, but with big employers such as Tyson Foods just north in Springdale and Walmart farther north in Bentonville, the towns are starting to grow together. In 2012, there were 1,131 homes sold, with a median price of $165,000. Based on MLS data, Luna sees a trend. “The number of sales haven’t gone up, but prices have started to creep up. A lot of that has to do with consumer confidence.” In the early to mid-2000s, there was a big building boom, primarily to accommodate the new Walmart vendors and an increased university enrollment goal. The normal appreciation rate of 3 to 4 percent per year jumped over the next few years to the double digits. Fayetteville was on the national radar, with first-time homebuyers competing with investors. But by fall 2007, the market had peaked. “If any home under $150,000 wasn’t sold in two weeks, it was like, ‘What was wrong with this house?’ ” Luna says. Then the market turned. “There was initially a steep decline in prices and it sort of evened out and there was a lesser decline. In the past two years, prices have been bumping along the bottom, and now they’ve started to turn the corner.” As of January, there were 636 homes in the MLS. Luna says there’s a shortage of homes at the medium to high end ($250,000 to $450,000), but low-end homes (less than $200,000) are selling well. There are not many properties in the highprice-point range (more than $450,000), she says.
Charlottesville, Va. Population: 43,511 University of Virginia enrollment: 21,106 On a Sunday in January, Margaret Callaway Ramsey, CRS, associate broker at Charlotte Ramsey, Inc. REALTORS® in Charlottesville, Va., showed nine properties to three different parties. That’s unusual, she says. “The market seems to be starting earlier this year. I’m seeing more activity.” In fact, Ramsey says, she started to see a turnaround in the market during the 2012 holiday season. And, according to the
Smart Money According to a report by the American Institute for Economic Research (AIER), college towns with populations under 250,000 are mostly recession-proof. That’s because the schools and the students form a steady spending population, and their economies tend to be more stable compared with larger cities. Also, the report notes that when the recession hit, many people delayed job searches and continued their higher education, boosting college areas with even more students. Ithaca, N.Y., home of Cornell University and Ithaca College, took the top spot on the AIER list of best college towns, with a two-bedroom apartment costing $950 per month. The standings were measured by factors such as arts and leisure, unemployment and entrepreneurial activity. Because of this steady spending population, many investors have seen the value in college towns. REALTOR.com recently released its second list of collegiate investment markets, with Boston; Princeton, N.J.; Chicago; Washington, D.C.; and Houston the top markets based on average monthly rent prices compared with estimated mortgage payments.
Charlottesville Area Association of REALTORS®, overall sales for 2012 were up 15 percent over 2011, the largest year-overyear increase in seven years. And while there are many pockets of rental properties in Charlottesville, Ramsey says most of her transactions are home sales. But, when the bubble hit, Ramsey estimates her rental transactions accounted for about 20 percent of her total business, compared with this year’s 10 percent. During that time, Charlottesville wasn’t as hard hit with short sales and foreclosures as areas to the north. “We saw a distinct drop in prices, an increase of days on the market and an increase in months of inventory.” Ramsey says one of the biggest differences between Charlottesville and Greene, a town just to the north, is that there’s more investor involvement closer to the university. “You see the short-term investors — the parents — have students managing the property and paying off the mortgage by having roommates pay off bills. With rents going up, it’s a better option than in the past.” Population: 17,069 Fort Lewis College enrollment: 3,856
that investors are taking notice. “A lot of people who have money to invest feel more confident about putting it in real estate here. It’s an investment property, and they get an income from it.” But in this outdoorsy community, there are also parents who purchase condos for their students rather than paying their rent, and many other buyers are secondhome baby boomers or telecommuters. For this reason, Kniffin says she thought the recession wouldn’t hit Durango, but it did — just not as hard as some other areas. “We’re not seeing people losing 50 percent of their equity — more like 30 percent,” she says. Starting in fall 2011, Kniffin says, the market started to turn around. There was a 92 percent increase in home sales from 2011 to 2012, and the median price increased 9.8 percent, according to MLS data. Remember, Kniffin says, that “the parents and family members of the college students can produce a great pool of buyers.” She’s speaking from experience: She fell in love with Durango when she went to visit her sister at college there. A few years later, she saw great value in the market and jumped in head first by moving her family there and becoming a REALTOR®.
Kniffin says the value of homes in a college town such as Durango is so strong
Rebecca Scherr is a writer and editor based in Washington, D.C.
Durango, Colo.
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Pipeline | Strategies to grow your business
taxing matters Big changes to the tax code should prompt REALTORS ® to have an in-depth discussion with their tax professionals.
“I personally have not seen a year where the tax changes have been so significant, with one possible exception: the Tax Reform Act of 1986.”
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L
ate 2012 and early 2013 were trying times for the tax preparation community and the general public. Many tax deductions and credits that expired Dec. 31, 2011, were in limbo regarding an extension into 2012, and many deductions, tax rates and credits were set to change Jan. 1, 2013, due to the so-called fiscal cliff negotiations. Don’t forget that the IRS had to delay processing many tax returns because it needed to reprogram computers and reissue many tax forms. This article will present an overview of the items included in the tax law change of Jan. 2, 2013 (The American Tax Relief Act
of 2012) that will have an impact on the business of real estate and the tax returns of real estate professionals. We will also examine one of the major items included in the Affordable Care Act of 2010 (the health care law) that will affect tax years 2013 and later, and we will focus on those items that are most relevant to the real estate community.
The American Tax Relief Act of 2012 First, let’s focus on what the legislation, which was signed into law Jan. 2, 2013, did not do. It did not extend past 2012 the 2 percent payroll tax reduction that everyone
Fancy Photography/Veer
By Chris Bird
with earned income enjoyed for the past two years. Congress’ silence on this issue may be due to the unpopularity of increasing taxes for everyone — low, middle and high income included. For REALTORS®, this means higher estimated tax payments because the self-employment tax rate rises to 15.3 percent from the 13.3 percent rate of the past two years. In dollars, a selfemployed REALTOR® making a net profit of $50,000 will pay $924 more in taxes in 2013 than in 2012. Double that profit to $100,000 and the difference is $1,846. All that said, here are some of the things the law did do: Extended tax items from 2011 into 2012 and 2013, including: 1. Deduction for state and local general sales taxes; 2. Deduction for qualified tuition and related education expenses; 3. Deduction for private mortgage insurance premiums (PMI) as principalresidence mortgage interest; 4. Contributions from IRAs to charity of choice; 5. Deduction for certain expenses of elementary and secondary school teachers; 6. Deduction for contributions of capital gain real estate for conservation purposes; 7. Tax-free forgiveness of indebtedness on a principal residence (note: this provision expired in 2012, not 2011, and was extended for only one year, through 2013); 8. A 15-year write-off (depreciation) for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements (note: this is for commercial real estate owners and investors, not residential rental); 9. Deduction for up to $250,000 of qualified leasehold improvements under IRC 179 (note: this provision is for commercial real estate owners and investors, not residential rental); 10. Deduction of $500,000 for first-year expensing of equipment and certain items in commercial real estate under IRC 179;
If there ever has been a time when REALTORS® need to have an in-depth discussion with their tax professionals, that time is now. Planning for the changes in 2013 and later years, especially for higherincome earners, is extremely important. 11. Tax credit of $500 for certain nonbusiness energy property placed into a principal residence; 12. Tax credit of $2,000 for builders of highly energy-efficient homes. Extended tax items that would have expired in 2012, including: 1. Permanent extension of the 10, 15, 25, 28, 33 and 35 percent tax brackets; 2. Permanent extension of the 2012 estate and gift tax provisions; 3. Permanent extension of higher education tax credits, child tax credits and earned-income tax credits; 4. Permanent extension of the adoption tax credit; 5. Permanent extension of the capital gains and qualified dividends tax rates; 6. Permanent extension of the so-called alternative minimum tax exemption amount; 7. One-year extension, through 2013, of the 50 percent bonus depreciation deduction for new equipment. Implemented new changes for individual high-income earners, effective Jan. 1, 2013: 1. New 39.6 percent marginal tax rate (as opposed to 35 percent) on taxable incomes above $400,000 for singles, $425,000 for head of household and $450,000 for married filing jointly.
2. New 20 percent capital gains tax rate and qualified dividends tax rate (as opposed to 15 percent) for taxable incomes above $400,000 for singles, $425,000 for head of household and $450,000 for married filing jointly. 3. Phase-out of itemized deductions, including home mortgage interest, state and local income taxes, real estate taxes and charitable contributions for adjusted gross incomes above $250,000 for singles and $300,000 for married filing jointly.
The Affordable Care Act of 2010 This tax law includes a 3.8 percent Medicare tax on net investment income, effective Jan. 1, 2013. Net investment income includes capital gains, dividend income, interest income, non-qualified deferred annuity distributions, royalty income and net rental income. This new tax is in addition to every other tax or tax increase in the Internal Revenue Code, including everything mentioned previously. Effectively, the new capital gains tax rate mentioned above plus this new tax results in a 23.8 percent total tax for sales of property after 2012. A taxpayer in the highest marginal tax rate of 39.6 percent who earns significant net rental income will have to pay tax to the total of 43.4 percent.
Big Changes I have been interviewed by several REALTOR® associations and state organizations about these changes. As I have told them, I personally have not seen a year where the tax changes have been so significant, with one possible exception: the Tax Reform Act of 1986. If there ever has been a time when REALTORS® need to have an in-depth discussion with their tax professionals, that time is now. Planning for the changes in 2013 and later years, especially for higher-income earners, is extremely important. Remember, the levels of income at which these new provisions kick in can vary significantly. Chris Bird is a CRS certified instructor who was an IRS agent for 16 years before launching his company, Chris Bird Seminars, Inc., in 1986.
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Up Close | Profiles of people to watch
stephanie burg-brown,
CRS
Nextage Diamond Realty and BSA Management, Philadelphia
REALTOR® since: 2006 CRS since: 2008 Contact: 267.888.7030; stephanie@ stephaniebrown. biz
You describe your CRS experience as life-changing. Why did you get your Designation? The CRS Designation is the best education in the real estate field. Before I took the courses, I was all over the place with no direction. None of the traditional real estate training taught me how to manage time and clients or how to run a business. I thought I needed to be everything for everybody and available 24/7. The CRS Listing and Buyers Courses (CRS 201 and CRS 202) really taught me how to manage me and to look at real estate as a “business.” The takeaway from the CRS courses gave me the ability to do more business with less stress, teach my clients how to work with me, and make time for family. Out of all of the designations and certifications I have — ABR, GRI, CDPE, CPM, ePro — CRS is my most treasured. I had to earn it by performance and education, not just by taking a few classes and paying a membership fee. Other than CRS, what else has helped you in your career? Besides ongoing education, mentors — professionals in different fields from across the country I met through networking and referrals — have helped me. Being able to pick up the phone, send a quick text or email and get a response is priceless. My “circle” does not say, “This is how you do it.” They provide examples and scenarios to help me make the best decisions. I attribute a lot of the success I have right now to my mentors. The experience has inspired me to become a mentor to other real estate agents and to share knowledge with anyone who asks me.
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You’re active in your community. Is all your work realestate related? Yes and no. Since 2009, I have been the president of the Women’s Council of Philadelphia, which is the Philadelphia chapter of the Women’s Council of the National Association of Real Estate Brokers. Our activities include conducting monthly homebuyer seminars, raising funds for women in transition and female homeless veterans, providing downpayment assistance grants, stabilizing neighborhoods and educating the youth. This year we’re raising funds for inner-city students preparing to go to college. In my role as an advocate for housing initiatives, I work with a number of housing counseling agencies, teaching financial literacy, credit and pre-foreclosure classes. We must be able to provide what service is really needed to our clients. I did not enter into real estate to just sell and list property. I started doing real estate so I could contribute to helping other people realize their dream of homeownership. There is such a good feeling when I can help clients through the loan modification process, because another home is saved. I also serve as vice president of Real Estate Managers for Families in Crisis Foundation, another nonprofit organization. We raise funds specifically to provide assistance to individuals and families who are experiencing a period of distress, hardship and extreme financial need, and are unable to pay for their necessary expenses. What motivates you? My family, my friends, my clients, and also, I have to say, the CRS Designation. Because we represent 3 percent of the REALTOR® population, we have a commitment to succeed. People look toward us as the professionals in the industry. We just can’t give up now. We have to keep going, even though the economy is down. “Failure is not an option.” That’s one of my daily affirmations. What’s the best work-related advice you’ve received? Make time for family. Sometimes we get so busy serving our clients’ needs and running our business that our family comes last. I was told, be true to yourself. Treat real estate as a business. It’s not a job. It’s a business that you own. The best broker advice I received is, “Never keep nonproductive agents in the office, because it deters high-producing agents from wanting to come and work at your office.”
Colin Lenton
How did you get started in real estate? I kind of fell into it. Before real estate, I worked in a number of different industries — transportation, finance, housing and the IRS. My first sales job was selling Avon. I hold cosmetologist, notary and commercial driver’s licenses, and I’m currently completing my Ph.D. I’m a people person, and real estate has always been a career that I wanted to explore. I took a real estate licensing course, passed the exam and have never looked back. The market was good at the time I entered in 2006. My niche was first-time homebuyers and investors. As the market shifted, the rental market exploded, and further education was required to service the new rental and distressed market (property management, foreclosures, REOs and short sales).
“I did not enter into real estate to just sell and list property. I started doing real estate so I could contribute to helping other people realize their dream of homeownership.� Stephanie Burg-Brown, CRS
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Callie Lipkin
Takea
Bow
After four decades with CRS, CEO Nina Cottrell prepares to retire. By Michael Fenner
When CRS CEO Nina Cottrell was growing up in Danville, Ill., she couldn’t have imagined how much she would achieve. After making her way to Chicago, she took a job with an NAR affiliate (which would become CRS) as a secretary in 1973. Forty years later, she prepares to retire as the Council’s CEO and one of the most recognized association executives in the real estate industry. Cottrell’s story is a quintessentially American one in which a talented and dedicated person climbs from the lowest rung on the ladder to the very top. Cottrell was named the Council’s executive vice president in 1984, and she was given the title of CEO in 1999. “The Council and I have evolved together,” says Cottrell. “I will always take pride in the growth we experienced during my tenure. The energy and personality of our members made the work exciting and fulfilling.” The Residential Specialist talked with Cottrell as she prepares to retire from her CEO post on May 31.
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What was your background, and how did you get your start working for the organization that would become CRS?
What have your years in executive leadership taught you about managing both people and projects?
After graduating from high school, I attended a business college in Danville, Ill., and worked in a department store. After moving to Chicago, I worked for an advertising agency and modeled part time. My five-year marriage was ending, and I wanted to do something different. I answered an ad in the Chicago Sun-Times newspaper for a secretarial job at the REALTORS® National Marketing Institute (RNMI) in 1973.
You can’t judge a book by its cover, nor can you go to the last chapter, read it and assume that you have a full understanding of the book. I have learned that you have to be patient and deliberate when you manage people. Digging deep to uncover the rationale or motivation behind a person’s actions can tell you a lot. I try to approach managing projects in the same manner. But new initiatives are more complex: There are more facets to examine under the magnifying glass to help you discover the various opportunities and challenges that the project presents.
What attracted you to working in a real estate association? I did not really know the specific differences between a forprofit business versus a not-for-profit business, so I had no clear concept of how a member-driven organization worked. I was interviewed by two amazing women who loved to laugh, Ruth Ellis and Bonnie Cobean. I was more sold on them than anything. But then I learned there was an opportunity to travel, and that was the hook for me — and an unexpected surprise.
How did your early mentors at CRS influence your career? Ruth and Bonnie were my first mentors. I realized that they were taking a chance hiring someone like me, who had no previous business experience. But they taught me the importance of having a passion for what you do and compassion for those you interact with — including staff, members, volunteers and vendors. They also shared the notion that creativity and a wicked sense of humor can help you deal with a multitude of unmanageable happenstances that can come up at any time. And last but not least, they taught me patience. Howard Brinton was my other mentor in my early years (see sidebar), and his influence taught me the importance of being a distinctive individual and the beauty of possessing a lighthearted nature.
When did you realize you had the ability, talent and drive to lead this organization? First of all, I have never led this organization. CRS Designee volunteers lead, while staff lays the foundation. Staff provides the tools and resources necessary to execute the Council’s goals and objectives to the extent that it is possible. CRS staff is the engine that helps move the Council forward, but CRS leadership is at the wheel. I have been extremely fortunate to be surrounded with leadership and staff who are passionate about CRS, what it stands for, and how it is perceived in the industry. Their trust in me to protect the integrity and professional image of CRS was the driving force that kept me moving forward for the past 40 years. 20 | March/April 2013
What are some of the biggest challenges you think the Council might face in the years to come? Implementing a more efficient governance structure would allow CRS to have a simpler approval process and might help the organization make timely changes when needed. We have to be more proactive in identifying all the challenges and issues that impact our industry. To put ourselves in a better position to compete with for-profit membership and educational organizations, we need to operate more like those for-profit competitors. It’s always a tough challenge to leave the past behind and embrace new trends, but CRS needs to dedicate itself to delivering the best education and member benefits in new ways. This will ensure that CRS attracts the next generation of valued CRS members who will carry the organization into the future.
What will you take away from your years at CRS? I walk away feeling extremely fortunate to have spent more than half my life affiliated with an organization that has had a positive impact on so many people’s lives. Some of my closest relationships have been formed within the REALTOR® organization. I walk away with a treasure trove of memories and an abundance of friendships, both with staff members and volunteers, which will remain a cherished part of my life after CRS. My one and only regret is that Howard Brinton is not here to celebrate my retirement with me. Michael Fenner is the editor of The Residential Specialist.
One of the most important people in Nina Cottrell’s life was Howard Brinton, CRS, who passed away in December 2012. Brinton, who served as CRS president in 1984, mentored and inspired many CRSs over the years as an instructor, a visionary and a mentor. The Residential Specialist asked Cottrell to discuss Brinton’s impact on her own career, and how his work inspired countless REALTORS®. What did you think of Howard when you met him for the first time? We were holding instructor auditions in Colorado Springs. He was very upbeat, extremely confident, sharp, and he possessed a sense of humor that was unmatched. He had an innate ability to laugh at himself and find the funny side of everything. What role did he play in helping you advance in your career? Howard saw qualities in me that I wasn’t aware that I had when he fought for my promotion to executive director of the residential division of the REALTOR® National Marketing Institute (RNMI). I remember the day that he said, “You can do this! I know that you won’t let me down.” At the time, I was certainly overwhelmed, and I doubted my ability to succeed in the position. But I knew that I could not let Howard and my other mentors down, so I drew from the lessons my parents taught me growing up: My mother was a stickler about appearance and standing tall; my father was a believer in the credo, “never let them see you sweat.” What did Howard’s success teach you about being a leader and inspiring people? To be a leader, you have to be respected. People need to know that they are following a person who respects them in return, is trustworthy and cares about their well-being. Howard had rock-star status in the real estate industry, but he remained a very humble and kind-hearted person. Any funny Howard story you’d like to share? I have plenty of funny stories about Howard, but none that I will share! No story I tell would help people understand the humor and animation that Howard was known for. To fully appreciate a funny Howard story, you had to see the man in action and understand the reason for his humorous response to any given situation. As a result, Howard left his friends with a treasure chest of memories that we will cherish for the rest of our lives. I am honored and privileged to have been part of his inner circle, and he certainly enriched my life in so many ways. What do you think is Howard’s lasting legacy in the real estate industry? What he managed to do by creating the Star Power group is unquestionably his biggest legacy. His vision to help top agents share their tools for success helped countless agents reach the next level of success, and it took real estate training to a higher level. The real estate industry is better off today thanks to Howard’s talents and boundless energy. For more tributes to Howard Brinton, see story on p. 40.
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22 | March/April 2013
Soleilc/Veer
In 2012, the U.S. economy started to recover in a way people could see and feel. Unemployment numbers inched down, and consumer confidence started to rebound. On the whole, the U.S. real estate market behaved similarly, with sales increasing and prices beginning to tick up. In fact, by year’s end, many agents across the country were busier than they had been in years, and 2013 has started off on a similar note. In many states and locales, the trending phrase is “pent-up demand.” To find out what’s happening in different regions of the United States, The Residential Specialist talked to representatives from state REALTOR® associations in California, Minnesota, Virginia and Massachusetts about what they saw in 2012 and what they expect for 2013. www.crs.com | 2 3
CALIFORNIA
The year-end wrangling over the “fiscal cliff ” helped California close out 2012 stronger than predicted, according to the California Association of REALTORS® (CAR). The congressional budget negotiations included an expected increase in capital gains taxes. As the debate went on, December 2012 sales of homes priced $500,000 and above rose 42 percent compared with December 2011. Overall, 2012 existing-home sales in California rose 5.4 percent from the previous year to 525,120 transactions. From 2011 to 2012, the median sale price increased 11.6 percent — from $286,040 to an estimated $319,340. “We ended right at the forecast in terms of sales and a bit above in terms of prices,” says Selma Hepp, senior economist at CAR. But, Hepp emphasizes, the California market is still a mixed bag. “We’re having a lot more sales in the upper segments of the market — $500,000 and above — and fewer sales in the REO [real estate owned] and lower end of the market.” The hotter markets are in the Bay Area, Silicon Valley and other regions with strong job markets. The higher-end markets in San Diego and Orange County are also doing well. The slower markets — such as the Inland Empire and the Central Valley — have higher foreclosure rates.
In 2012, the state saw an increase in short sales and a decrease in foreclosures, says Hepp. In January of this year, REOs made up 11 percent of sales and short sales accounted for 25 percent; in January 2009, REOs were 60 percent and short sales were 9 percent. As for 2013, CAR forecasts a sales increase of 1.3 percent over 2012. “Sales are back to the level we saw in the stronger years of the market,” Hepp says. She also predicts moderate price increases because inventory is tight, but she thinks it will loosen as the year progresses. “As the prices keep going up, I think people are going to be more willing to put their homes on the market. There’s a lot of pent-up demand.”
MINNESOTA
A few years ago, Minnesota was one of the top 10 states for foreclosures. Not so today. “We’ve seen steady progress in the last 18 months in the number of transactions, which cleared out a lot of the distressed properties,” says Chris Galler, CEO of the Minnesota Association of REALTORS®. “For the last 12 months, we’ve seen consistent price increases.” By the end of 2012, existing-home sales were up 8.4 percent for a total of 86,029 transactions, the most since 2007. Nondistressed properties were selling for
LOCAL FLAVOR Because all real estate is local, The Residential Specialist asked CRSs across the country for a quick assessment of where their market is now and where they see it going. “Honolulu’s real estate market did not suffer nearly as much as other metropolitan areas in the United States during the mortgage crisis. The market hit bottom in July 2009 and was relatively stable until mid-2012. Now, pent-up buyer demand, coupled with the lowest inventories in history, has resulted in multiple offers, bid-ups and increasing prices. In the last few months, over 20 percent of single-family home sales were over list price.” Sherrie Au, CRS Prudential Locations Oahu, Hawaii
24 | March/April 2013
about 92 percent of list price, up 3 percent over 2011. And 2012 saw a 10.4 percent median price gain over 2011 to end the year at $149,000. Galler says the hottest market in the state is Mankato. The other bustling areas are the regional centers: Rochester, St. Cloud, Duluth and the Twin Cities. Galler predicts the state will reach a balanced market in 2013, “especially for properties above $250,000.” He also thinks the median price will appreciate by 4 to 6 percent. The state’s economy is strong, and Galler says North Dakotans are buying vacation properties. “They are able to sell because of the price of farmland and the oil find up there.” The Minnesota Association of REALTORS® recently polled buyers about interest rate increases. The poll, Galler says, revealed that buyers are not immediately worried about rates increasing. But they know rates will go up eventually, which makes now a good time to buy. Galler says the market downturn has caused some first-time buyers to question the value of an agent more than ever before. But he believes CRSs have an edge. “We know that CRSs are doing better than most people in the business,” he says. “They’ve survived at a higher ratio than regular agents.”
“Home sales were up 13 percent from 2011 to 2012, and values were stable in 2012 — no growth, but no longer declining. We hit a sellers’ market in April 2012, going below 6 months of inventory for the first time since January 2010. We are educating buyers that the days of ‘stealing’ a home are over; a home that is well prepared and priced well is selling quickly, often with multiple offers.” Kimberly Cameron, CRS RE/MAX Properties West St. Louis, Mo. “Our market is drastically different than a year ago. In January 2012, the Reno/Sparks median home price was $135,000. It’s now $188,000 — almost a 40 percent increase in one year. I would like the home builders to break new ground; they are still a little gun shy, but I think they’ll start building again this year. Anything that hits the market gets multiple offers because we have less than five weeks of inventory.” Guy Johnson, CRS Keller Williams Realty Group One Reno, Nevada
VIRGINIA
“If 2011 was the year of transition for Virginia,” says Stacey Ricks, director of public relations at the Virginia Association of REALTORS®, “then 2012 was the year of strength.” Existing-home sales in the state were up 8 percent between 2011 and 2012, and the median singlefamily home price increased 7 percent from $225,000 to $240,000. Foreclosures in the state went from 2,456 in the first quarter of 2012 to 1,896 in the fourth, with all regions seeing a drop. Furthermore, Ricks notes an important home sale price distribution. A couple of years ago, “we saw a huge spike [in sales below] $100,000 because investors were coming back on the market, buying those foreclosures,” but that was all that was happening. Now, she says, “we’re seeing spikes between $200,000 and $300,000 and $300,000 and $400,000,” as people move out of their first or second homes and into their second or third. Northern Virginia near Washington, D.C., is doing particularly well, with existing-home sales increasing 8.6 percent in 2012 over 2011. Richmond also did well in 2012, up 11 percent year over year. “Nationwide, a lot of people are moving back to the urban core,” says Ricks. “The Richmond central REALTORS® talk about inventory being down,
and that didn’t happen until 2012.” The markets in some of the southwest areas of the state have plateaued, according to Ricks. “Their economy hasn’t recovered as quickly as some of the more densely populated areas.” As for 2013, Ricks thinks sale prices will probably inch up, but she doesn’t foresee a spike. “We’re going to go slow and steady.”
MASSACHUSETTS A lack of inventory is the big story in Massachusetts. From 2011 to 2012, inventory of both single-family homes and condos fell 14 percent. And the beginning of 2013 isn’t looking any better. There was a 40 percent decrease in inventory in January 2013 compared with January 2012, says Gary Rogers, CRS, past president of the Massachusetts Association of REALTORS®. “It’s really a seller’s market, but nobody’s told the sellers,” says Rogers, with RE/ MAX On The Charles in Waltham. Rogers says he really saw the pent-up demand in September and October 2012. “The inventory wasn’t being replaced.” The other data for the state look good: From 2011 to 2012, sales increased by 21.7 percent and the median price rose 1 percent for single-family homes (from
$295,000 to $298,000) and 4.4 percent for condos (from $270,000 to $282,000), according to the Massachusetts Association of REALTORS®. Rogers says Arlington and Wayland in Middlesex County, northwest of Boston, both experienced 15 percent appreciation from 2011 to 2012. “People saw a great opportunity to get into some nice areas that have great schools,” he says. Cape Cod is also seeing strong sales of vacation and second homes, he says. He calls the western part of the state a “mish-mash,” with some cities — such as Springfield — doing better than others. As for 2013, Rogers predicts inventory will increase as people realize prices have rebounded somewhat. But he sounds a word of warning to his fellow agents: “We, as professionals, need to be very careful about maintaining our accuracy on prices to keep the market moving. If too many overpriced listings come on, buyers lose interest.” Gayle Bennett is a writer and editor based in Washington, D.C.
“In the downtown Charlotte area, we have seen a reduced amount of inventory, increasing the amount of demand. Last year a lot of people were looking, but not as many people were willing to pull the trigger. Many of the buyers out there today have been sitting on the fence for a while, and they are starting to jump off the fence. We’re poised to get back to a market that is more balanced for sellers and not a one-sided buyers’ market.” Scott Pridemore, CRS Pridemore Properties Charlotte, N.C.
“There are positive changes in Hamden, but it’s a bifurcated, or schizophrenic, market. Eighty percent of the sales are owner-owned and 20 percent are foreclosures or short sales. The foreclosures are selling, but selling low, while the owner houses are selling at better prices than in the past two years. Single-family year-over-year sales were up 14 percent [in 2012], but the average price decreased from $229,000 in 2011 to $205,000 in 2012.” Millie C. Legenhausen, CRS Home & Hearth Realty Hamden, Conn.
“The market in Wausau, Wis., is pretty strong and improving. Sales are up 16.4 percent year over year. Inventory is less than sales, so it’s trending into more of a seller’s market, but it’s more balanced than it has been in years. I can’t say that prices are going up, but homes are selling; 2013 is off to a great start.” Ron Zahrt, CRS First Weber Group Wausau, Wis.
“I just had the best year ever in 20 years. Sales are up 12 percent over 2011. We are not through the foreclosures, so that’s keeping a lid on the prices, but buyers finally realized this is a great time to buy. This year the foreclosures are going to keep coming. That might be tough for sellers in terms of prices, but the buyers are there. We’re going to have another great year.” Christi H. Reece, CRS Bray Real Estate Grand Junction, Colo. www.crs.com | 2 5
Estate HEART of the
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Andy Norton, CRS, with RE/MAX Distinctive in McLean, Va., had never worked an estate listing in his 25-year real estate career. But when a 91-yearold client was moved into an assisted-living facility after suffering a stroke last year, the woman’s two oldest children, who were trustees of her estate, asked Norton to help them sell her home. The family attorney who drew up the trust had little knowledge of real estate, so when Norton’s attorney reviewed the document, he found several key issues had not been addressed. “No one looked at the trust from the perspective of selling the house, or whether a mortgage lender or title company would approve it,” recalls Norton. “The title could not be insured as it was written. Without insurable title, a sale could not happen.”
Bgwalker/Getty Images
A good attorney can help agents grasp the complexities of trusts and estates law, but REALTORS® must rely on their own real estate experience to bring these transactions By Regina Ludes to a satisfactory conclusion.
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Via email, Norton introduced the two attorneys, who corresponded frequently over the weeks that followed to amend the trust document. Once it was finalized, Norton listed and sold the property. Family trusts and estates can present some complex and challenging situations for agents. In addition to the legal obstacles, multiple trustees may not agree on how the estate should be handled, which can cause emotional tension among family members. To work through these distractions and still get the deal done, agents must focus on the immediate tasks at hand, such as reviewing trust documents with an attorney’s guidance, making arrangements for moving or selling furnishings, finding alternative sources of financing, and simply lending a sympathetic ear. But by relying on their real estate knowledge and working with qualified outside professionals, REALTORS® can provide sound advice that will help their clients through a difficult transaction.
Family Trusts 101 According to the American Bar Association, a trust is an arrangement whereby property is legally owned and managed by an individual or corporate fiduciary as trustee for a beneficiary. David Dietrich, an attorney with Dietrich and Associates in Billings, Mont., who specializes in trusts
“I wouldn’t work without [an attorney]. There’s too much potential liability for agents.” and estates law, says family trusts vary by state. Generally, the trust involves three parties: the grantor, who sets up the trust; the trustee, who holds the trust; and the beneficiaries, who in many cases are also the trustees. One to three people are usually named as trustees, but there can be many more, which makes it difficult to gain consensus on property matters. “It’s important to identify who the trustees are, so you know with whom you are dealing,” Dietrich says. Family trusts are used primarily to avoid probate, the process by which the courts determine the validity of a will and how property will be distributed under the will. “In some states, probate is the enemy because fees are higher when they have to go through the court system. But in other states where the court system isn’t used
UNDER REVIEW When REALTORS® first receive an estate listing, they should carefully review the trust document with an attorney, says David Dietrich, an attorney with Dietrich and Associates in Billings, Mont. The trust document should contain several components. 1. Who is the trustee? Are there any incumbent trustees—individuals who will succeed the primary trustee when that person dies? Names of incumbent trustees may be buried in the trust document, which can run anywhere from seven to 70 pages. 2. Does the trust own or is it funded with real estate? Agents may need to run a title search to confirm that the property is held in a trust. Also, does the trust address personal property? In many instances, only real property is addressed by the trust. 3. Identify the ultimate distribution language in the trust document. In other words, does the trust give the trustee the right to sell the property and keep the proceeds, or does it only divide the property equally among the trustees? The trust document should include specific language that gives the trustee responsibility for selling the property, says Dietrich. “For example, it might say, ‘I direct that the property be listed for sale and that the trustee determine what the fair market price should be. Trustee can divide the proceeds equally between brother and sister.’ With multiple beneficiaries, it is especially important to have a trustee with this responsibility,” Dietrich says. Without this specific language, the property cannot be sold.
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much in probate, fees are much lower,” Dietrich explains. When agents get an estate listing, they should review the trust document carefully with an attorney, who can provide guidance and answer questions, Dietrich says. (See sidebar.) Norton often sought his attorney’s advice whenever he noted any red flags, such as when the two sibling trustees could not agree about whether their mother was mentally competent to sign legal documents. On his attorney’s advice, Norton obtained a statement from the attending physician at the nursing facility confirming her mental state, which was needed to move ahead with the sale. “Trust your real estate experience. If something seems odd, bring in a professional to look at it,” Norton says.
Split Decision If working with two trustees seems problematic, imagine dealing with 13 of them, as Gary Rogers, CRS, and his associate, Darleen Foster, did recently. Foster’s friend was one of 13 trustees who decided to sell a property that had been in their family for more than 100 years. Located in Cambridge, Mass., the home was in disrepair and clearly needed to be torn down, says Rogers, who is with RE/MAX On The Charles in Waltham, Mass. The family signed a six-month listing agreement, and the home was listed at $1.05 million. At the start, Foster’s friend said the family would accept offers starting at $900,000. But when several offers came in, including one for $925,000 that was countered, the same five or six trustees declined them. “When they stopped countering offers altogether, and it was taking longer and longer to get responses from the family, that’s when we suspected something was wrong,” Rogers says.
At that point, Foster confronted her friend, who revealed that six of the trustees had made a verbal agreement with a developer working on a project down the street. The developer offered to pay the trustees a certain amount up front for the property, plus a percentage of the profits from the sale of three high-end condo units he planned to build there, if they were willing to wait one year while he completed his current project. All the trustees knew about the agreement, but because it was not in writing, it was difficult to prove, Rogers says. “They were intentionally stalling for time knowing when the listing agreement would expire,” he says. Since the agreement expired in December, the house has been off the market. So what should agents do when dealing with multiple trustees? “As real estate professionals, we need to find out if there are any factions within the group, who those factions are, and whether they [all the trustees] are unified in their intent to sell,” Rogers says. He also recommends including language in the listing agreement that discourages trustees from going around the listing agent.
Remodel or Sell? Multiple trustees can make it difficult to upgrade a property that needs repairs, says Linda DeVlieg, CRS, with Coldwell Banker Legacy in Albuquerque, N.M. “Often you can’t get those repairs addressed when decision makers have different ideas of what needs to be done. Some may live out of town and have never stepped inside the house,” DeVlieg says. “But it’s your market. You may know what to do, but you still need to gain everyone’s agreement.” To accomplish this, DeVlieg emphasizes her experience and knowledge of the local market and, for those who are data-oriented, she provides sales and pricing statistics for the area. When it comes to dispersing personal property, DeVlieg provides clients with resources they may need, such as moving and storage companies, auction companies and estate sales specialists who can help set up garage sales. She advises agents to become familiar with remodeling costs and how those costs can affect pricing. Once families see the investment required for some upgrades,
many opt to forgo them in favor of a quicker sale, says DeVlieg. For example, an estate property she listed recently had not been updated since the 1960s. “It probably needed about $100,000 worth of work to be competitive with houses nearby that were valued at $300,000,” DeVlieg says. The owners didn’t have the money to make the improvements to bring it up to current standards, so DeVlieg advised them to list it as-is at $189,000, reasoning that it would appeal to more buyers. It sold within 24 hours, with several buyers bidding up the price, DeVlieg says.
Prized Possessions When Diane Cadogan Hughes, CRS, receives an estate listing, she contacts her real estate attorney immediately. “I wouldn’t work without one. There’s too much potential liability for agents,” says Hughes, a broker associate with The Higgins Group Realtors in Bedford, Mass. After assessing how the family trust was established — how many players are involved, and who is in charge — she outlines her plan for selling the property. “I tell the family, this is what we will do to get the house ready for the market. I insist on working with one point person who will be the key communicator for the family. Sometimes that person isn’t the primary trustee,” Hughes says. She occasionally works with a transition coordinator, who assesses the owner’s personal possessions to determine if any will be given to family members, or whether they can be sold, donated or liquidated. Hughes also identifies pieces that can be used for showings, usually with the family’s permission. Family members can be sensitive about the décor and personal property in their family home, especially if they are still mourning, says Hughes. In one still-grieving family Hughes worked with, a family member became upset when Hughes suggested they remove a valance from a window before putting the home on the market. “People are in different stages of grief, so you can’t take it personally. You just have to do your job, because they need someone who will remain objective,” she says.
Financing Concerns Debra Attman, CRS, worked her first estate transaction 10 years ago when her recently divorced sister-in-law wanted to buy the house she was renting at the time. “But her mortgage had to be put into trust, which was required as part of her inheritance after her father’s death,” recalls Attman, a 30-year real estate veteran with Long and Foster in Lutherville, Md., outside Baltimore. “We had to find a lender who would allow her to set up the mortgage that way,” she recalls. “Every time I do this kind of loan, where parents have set up a trust fund, no one wants to finance it because it is such a complex transaction and they don’t want to take the risk. Commercial banks … won’t touch it,” Attman says. Instead, she typically goes to a private savings and loan association or someone who will privately hold the funds. These transactions also may require estate sellers to show legal documentation of the will or trust document. “Some people are funny about showing that information because they consider it to be private,” Attman says. And that can delay or halt a sale altogether. Family trusts and estates are often complicated and challenging. But by trusting their real estate experience and the advice of a reputable attorney, agents can provide the empathy and objectivity their clients need to help them through a difficult transition. Regina Ludes is the associate editor of The Residential Specialist.
LEARN MORE For more information about trusts and estates, visit the American Bar Association, Section of Real Property, Trust and Estate Law website: americanbar. org/groups/real_property_trust_estate/ resources.html. For state-specific information about how trusts and estates are handled, visit your state’s bar association website.
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cuts SHO R T SHORT By Gwen Moran
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CRSs share STRATEGIES for NAVIGATING the short-sale process. BY GWEN MORAN
I
n 2007, Barbara Markham, CRS, repositioned herself as a short-sale specialist. She recognized early on that adapting to the growing number of short sales in O’Fallon, Ill., would present a big learning curve, but it was also an opportunity for her business at RE/MAX Preferred. “I’d never really done short sales before, and in recognizing that the market was changing, I knew I had to adapt or I would be one of the many that have changed careers. Having been in the business so long, I didn’t want to see that happen to me,” she says. Today, short sales make up approximately 30 percent of Markham’s business. She says the process has become more streamlined since so many distressed properties have come to market over the past six years. Despite signs that the country’s real estate market is recovering, a large number of distressed properties and short sales remain on the market in many areas. RealtyTrac’s Year-End 2012 U.S. Foreclosure Market Report shows there were more than 2.3 million foreclosure filings on more than 1.8 million U.S. properties in 2012. That’s down 3 percent from the previous year, but 25 states showed increases as high as 55 percent over 2011. The report also finds that last year, 26 percent of all homes were “seriously” underwater, with mortgages totaling at least 25 percent more than the property is worth. So as REALTORS® position themselves to compete in a busy recovering market, it’s clear that many will be dealing with short sales for the foreseeable future. The good news is that many CRSs have successfully navigated the short-sale minefield: They have learned why short sales sometimes fall apart — and how to help them succeed by developing strategies to stay organized, manage expectations and keep transactions moving ahead to the closing table.
Jhan/Veer
Get the Facts “I don’t care how long you’ve been in business, how many listings you’ve had or, quite frankly, how many short sales you’ve already done, you need to have your systems in place,” says Chandra Hall, CRS, managing broker-owner of Colorado
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Mesa Realty in Colorado Springs, Colo., who teaches CRS courses in short sales. For Amy Shocket, CRS, with Dickson Realty in Sparks, Nev., where short sales make up a third of the market, that process begins when she gives clients a questionnaire that helps her learn all the information she needs to counsel them on how to proceed. She asks about the sellers’ preferences: Would they prefer to stay in the home if there are other options, and have they investigated those options? Are they current on their payments? If not, how far behind are they? What’s the mortgage balance, and who owns or services the loan? Shocket also verifies that the client has a legitimate hardship. “We do experience a lot of homeowners coming to us that say, ‘I’m underwater. I don’t want to continue to pay on a house that’s never going to be worth what I owe on it,’ and they have a million dollars in the bank. The bank’s not going to help them because you’ve got too much money,” she says. Shocket’s detailed questionnaire can also reveal potential snags that clients might be too embarrassed to share or might overlook. For example, if they have filed
for bankruptcy protection, the short sale can be delayed. Markham conducts a title search on properties immediately after listing them. This research has revealed useful information, including liens that the seller forgot to mention, or incorrect liens such as child support payments that have been paid or mortgages that were paid through a refinance that was not recorded.
Talk It Out After agents have gathered the initial information, they generally need to manage client expectations about how to navigate the transaction and the risks clients might need to take to close a deal. They also need to educate their clients thoroughly about the ins and outs of the short-sale process: The documentation can be lengthy, and transactions can take weeks or months, depending 32 | March/April 2013
Percentage of Home Sales Due to Short Sales or Foreclosures
34 30 PERCENT
PERCENT
23 PERCENT
2010
2011
2012
Source: NAR: Statistics from Q4
on the mortgage size, lien holder and other factors. Barbara Keathley, CRS, of The Seller’s Agent in St. Louis, breaks down every step of the process to her clients, including the possible outcomes. If the seller has assets, she says, it’s very possible the lender will ask for some contribution to make the deal happen. Some are caught off guard by that request, thinking the short sale will simply release them from the property. “We had a situation recently where the bank asked [the sellers] to contribute $13,000 to the short sale,” she says. If REALTORS® don’t explain up front that this is a possibility, it can be a shock, she says. It’s not only clients with whom agents need to communicate. Christi Conroy, CRS, with William E. Wood & Associates REALTORS® in Virginia Beach, Va., finds that sometimes she needs to educate buyers’ agents. “The buyer’s agent is taught to protect the client — don’t let them put out money, don’t have them spend money on inspections. I show them the flip side of that,” Conroy says. For example, she’ll explain that if a house is headed for foreclosure, holding it off the market for 45 days while the client completes inspections, only to back out after he or she finds something objectionable about the property, just isn’t fair to the seller. At that point, there may be little time left before the bank forecloses. She finds that buyers understand this, and those who are serious about a property are often
willing to do the inspections necessary before making a firm offer, especially if it looks like they could get a great deal on the property. Agents also need to educate themselves about lienholder needs. Shocket calls the mortgage holder or servicer directly to find out the exact offer necessary to get the deal done. That can be challenging, Keathley says, if the lender or servicing company has obtained a high appraisal price on the property — a situation that is not uncommon. In those cases, she’ll provide comps to help them see the true market value. Hall says she’s careful to find out if Fannie Mae or Freddie Mac owns the loan. If so, there are restrictions on payouts to second-mortgage holders, which could cause complications during negotiation, and that needs to be addressed up front with the second-mortgage holder and the seller. Conroy says she has been pleasantly surprised by some bank decisions in deals she’s handled. She says she is working on a deal in which the mortgage total is about $140,000 and the contract is for $42,000. The bank is giving her seller $10,000 in moving assistance and $8,500 toward another lien. “The math doesn’t add up, but that’s what they did,” she says. While she doesn’t know why the bank did so, she says it’s just one illustration of why REALTORS® should help their clients navigate the short-sale process to the best of their ability, even when it’s frustrating.
Getting It Done As agents get closer to sealing the deal, the right documentation can make the difference between getting it done and having it fall apart. Lenders are notorious for asking for multiple copies of documents throughout the process, so Hall has developed a format for the package she has her sellers compile. It includes the seller’s name as it appears on the loan, the loan
To learn more about working with distressed properties, check out the CRS course Short Sales and Foreclosures: Protecting Your Clients’ Interests. Find information at crs.com/education.
The right documentation can make the difference between getting a deal done and having it fall apart. number and supporting documentation with page numbers. That way, when the lender calls and asks for documentation that has already been provided, she can simply refer the contact to the appropriate pages in the package. Keeping copies of all documents is essential, she says. Keathley uses document-processing platforms such as Equator or RES. NET, which are used by banks and allow her to provide additional documentation easily and check on the deal’s status. Lack of communication can also derail a deal. When sellers don’t understand what lies ahead, they may become overwhelmed or feel like the short-sale process isn’t worth the trouble. They may get frustrated at the long, arduous and sometimes frustrating process and give up, opting to just let the foreclosure proceed. Conroy says that can be a problem, especially if the seller moves out of the property to avoid the uncertainty of whether and when the foreclosure will take place. “The bank wants to know that the seller is still in the house, maintaining the property, and that it’s not vacant, especially in colder climates [where pipes can freeze],” she says. She uses a customer relationship management system that reminds her to follow up regularly with the bank, the seller and other parties to keep the deal moving forward. Hall says it’s a good idea to cultivate contacts at various banks. While it’s unlikely that agents will work with the same contact multiple times, a friendly insider can be a good source of information in the future. Conroy says she always takes time to get to know the bank contacts with whom she works. Being friendly and collegial can make all the difference, she says, when she calls to find out the status of a deal. “There’s nothing like treating people with respect and developing relationships. It’s no different than in any area of the real estate business,” she says. “It can be a real advantage. If you treat them right, in most cases, people genuinely want to help other people.” Gwen Moran is a writer based in Wall Township, N.J., and is a frequent contributor to The Residential Specialist.
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Good Read | Resources in print
zen and now Face-to-face marketing is still vital, but social media tools can help businesses maintain customer relationships between those in-person interactions. Reviewed by Allan Fallow
A
The Zen of Social Media Marketing: An Easier Way to Build Credibility, Generate Buzz, and Increase Revenue by Shama Hyder Kabani BenBella Books 240 pages, $16.95
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s an editor at Time Inc. for more than 20 years, I hit on a foolproof method for maximizing the enjoyment of reading the company’s stodgy flagship, Time magazine: I’d leaf my way from the back of the glossy toward the front, savoring the dish on movies, personalities, and books before wading into the dutiful mire of national events and letters to the editor. I recommend a similar angle of attack for readers of The Zen of Social Media Marketing by Shama Hyder Kabani, the one-woman typhoon of online evangelism who heads Austin’s Marketing Zen Group. By adopting my backward approach, you’ll arrive much quicker at this insight Kabani holds in reserve until the book’s penultimate chapter: “My personal definition of social media is any website or medium (including video) that allows for communication in the open.” Now, why couldn’t she have said that sooner? Kabani likewise waits 191 pages before making a persuasive case for why
salespeople should care about Twitter, Facebook, LinkedIn and Google+: If your best friend was selling you a car that you needed, how long would you hesitate before buying? Given that you had the money and trusted your friend, not long! Compare that to buying a car from a dealer. How many dealers would you visit? How much research would you do? Social media marketing allows you to be that friend — the person or company that people trust. Provided you can forgive the plugs for her company’s services that Kabani sprinkles throughout, her philosophy about social media — specifically, how soon and how deep you might want to dive in — is refreshingly reasoned. A crucial first step, she counsels, is to gauge your organization’s overall attitude about social media: Has it committed to generating Facebook posts, tweets, LinkedIn profiles and Google+ circles? The odds are high, Kabani observes, that some corner of the online community has already begun discussing your company and its products. So why not join the conversation? You won’t be able to mold your firm’s online image to fit your ideal, but venturing into social media marketing will reveal you to be
a responsible and proactive player in an arena that takes issues of authenticity very seriously: “If you can establish your expertise online,” Kabani explains, “you will find that people are more than eager to do business with you…. You may not be Coca-Cola, but you can certainly establish trust through open communication and transparency.”
Social Work Let’s say you’ve devised a social-media policy for your organization. Does that mean you must command your IT or HR department to carry it out? Not at all: You’re probably well stocked with inhouse mavens already. “The best way to find a social media advocate within the company,” says Kabani, “is to seek out the one person or team of people who are most passionate about communicating with customers in such a manner. They may already be doing so without your knowing it. Seek out those people, and train them well.” Train them to do what, though? Kabani does an admirably exhaustive job of getting down in the weeds to explain how, what and when to post on the “Big Four” social-media sites, namely Facebook, Twitter, LinkedIn and — for this second edition of the book, printed in 2012 — Google+. She likewise never loses sight of the larger strategy. Every thought you utter in the online sphere should be designed to drive traffic to your website: There, one hopes, casual visitors will be sufficiently impressed by the genuineness (there’s that theme again) of your online presence to see value in divulging their name and email address. Kabani dubs this area of your website a “lead-capture mechanism” and suggests you offer some sort of incentive — a recorded webinar, for example, or a white paper or free report of some
“The best way to find a social media advocate within the company is to seek out the one person or team of people who are most passionate about communicating with customers in such a manner. They may already be doing so without your knowing it. Seek out those people, and train them well.” kind — to persuade visitors to part with those essential email addresses. But she also manages to have some fun with the relatively new phenomenon of how we (both as individuals and as groups) go about crafting a digital identity: “If eyes are the window to a person’s soul, a website is the window to a company’s soul. Okay, okay, so now you know why I am sticking to writing nonfiction. My point is your website is crucial.” As to how much of your company’s soul to disclose, Kabani covers that, too. Content remains king, she notes, because the prime directive of every good website is to educate prospects and build expertise. And how do you accomplish that? “A well-written blog,” for starters, “can help you stand out from the competition and educate your prospects.”
Freedom of Choice And don’t stop at a blog, says the author; likewise, think about providing podcasts and videos to document your expertise. In a world where “multiple online mediums [are] controlled by the people participating within them,” she writes, providing written, audio and visual content is hardly overkill. “It’s about appealing to the various learning preferences of a potential visitor… Give your visitors a choice, and they are much more likely to choose you.” That choice should likewise extend to which social-media network visitors can use to follow you. To facilitate this, have a designer add to your website those little clickable buttons (or “badges”) for Facebook, Twitter, LinkedIn and Google+. This obligingly accommodates user preferences: Some potential customers prefer the livingroom feel of Facebook, others the brevity and simplicity of Twitter, and others still the more professional demeanor of LinkedIn. Kabani concedes that Google+ is the fastest-growing social-networking site, but she also cautions that it “has so many new, exciting features that it can be confusing for those just starting out.” If there’s one clear “winner” among the book’s competing social platforms, it’s Twitter: Nine of the 12 online entrepreneurs whom Kabani profiles in a 31-page appendix devoted to “Social Media Marketing Case Studies” cited that easy-touse service as their favorite. In that spirit, if I were tweeting this review at Twitter’s maximum 140-character length, it would boil down to something like this: “People, especially strangers, crave social proof B4 deciding 2 buy, sez ZEN master Shama Kabani. Why wait? Give it to them w/ social media!” Allan Fallow is a magazine writer and book editor in Alexandria, Va. You can follow him on Twitter (of course) @TheFallow.
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Buyer Legends
Remembering Brinton
Course Listings
p. 38
p. 40
p. 45
inside CRS N E W S
F R O M
T H E
C O U N C I L
Tradition vs. Transition at Sell-a-bration®
estate industry, was remembered fondly by more than 35 CRS members who said they owe much of their success to the lessons he taught them at past Sella-bration® events and elsewhere.
Strategies to Stay on Track
M
ore than 500 real estate professionals gathered in Las Vegas to attend the 25th annual CRS Sell-a-bration® event at Caesars Palace in Las Vegas Jan. 31 – Feb. 2. The three-day lineup of workshops, keynotes and general sessions was sponsored by Cutco Closing Gifts and preceded by a popular pre-conference course, Buyer Legends (see story, p. 38). Sell-a-bration® emcee Brian Copeland, CRS, launched his introductory keynote presentation with a question: “Are you going to tradition yourself out of business, or are you going to transition yourself into new business?” Tradition undoubtedly plays a key role in the way REALTORS® operate — after all, the pillars of solid real estate work are timeless. But in today’s market, agents must embrace
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BRIAN COPELAND, CRS
new technologies and practices if they plan to compete for tomorrow’s clients, Copeland said. In other words, using technology to build business is not a gimmick — it is the new normal. The typical buyer will take 12 weeks to find a home, but just three weeks to find an agent, Copeland said. Likewise, sellers look for an agent who can put their listing in front of as many buyers as possible. Increasingly, these buyers examine listings from a mobile device. Thus, Copeland said, “It’s my job to make sure your home [listing] is everywhere a decision may be made. Our homes have to be everywhere to create this opportunity for them to be found.” Copeland’s session was preceded by an emotional tribute to the late Howard Brinton, CRS (see stories on pages 21 and 40). Brinton, a legend within the Council and the broader real
At her Sell-a-bration® workshop, CRS certified instructor Chandra Hall, CRS, focused on the business-planning systems agents can use to keep their careers healthy for years to come. REALTORS® should have a structure in place so their business can carry on without them should they be unable to work for any reason. Businesses that are run according to established systems are far more salable when an agent decides to retire. They also tend to be much more valuable. Hall said REALTORS® must clarify their business goals while avoiding the pitfalls of overanalysis. Striving for perfection in business may be admirable, but it is not necessarily productive. “Sometimes you have to move forward, even if it doesn’t feel perfect. Sometimes good enough needs to be good enough. Done is better than perfect.” That’s not to say that mediocrity is OK, Hall said, but the goal is to understand that, one way or another, the job must get done. Some agents get bogged down in the budgeting process. To ease that burden, Hall recommended that agents start calling their budget their “spending plan.” “Budgeting isn’t about not spending money; it’s about being aware of what you are spending,” she said.
Sell-a-bration® Audio Files The 2013 Sell-a-bration® Audio Library is available for purchase at crs.com/education/courses/2013-sell-bration-audio-library. Recordings from past Sell-a-brations® (2007 – 2012) are available for free to CRS Members in the Education Resources section of the CRS website (crs.com/education). Listen at home, at work, in your car or anywhere you can play MP3 files.
Rob Levy, CRS, and Linda Hall, CRS
To learn more about business planning, check out the CRS course Business Planning and Marketing for the Residential Specialist (CRS 200).
From Present to Future “When you go from irrational to rational, that is the true indication of market recovery,” said Denny Grimes, CRS, in his keynote presentation. He said agents must persuade clients to focus on the present without dwelling in the past or looking ahead to a bright future that has not yet materialized. Grimes drove home the point that what he calls “outlier” markets, such as the real estate bubble inflation of 2004 – 06 and the subsequent panicked correction of 2008 – 10, are not normal. More important, “You cannot make a living based on [these] outlier events,” he said. “The market we had in ’05 and ’06 is not returning.” The question
Cottrell Honored by UCI Roberto Colomer, CEO of UCI, a major lender in Spain, Portugal and Greece, presented his organization’s Leader Award to CRS CEO Nina Cottrell at UCI’s closing dinner at Sella-bration®. UCI awards this distinction each year to one of its directors who has excelled and displayed dedication and extraordinary performance. This is just the third time the award has been given to a non-UCI employee. Colomer announced the award in January at the UCI convention in front of more than 700 employees and guests.
is, what can agents do to prepare themselves and their clients for the current market realities? For agents who find themselves struggling in slowly recovering markets, Grimes offered this: “There is never a shortage of buyers. There is only a shortage of realistic sellers.” Buyers will step in when they find what they want at market value, and there is nothing an agent can do to sell a home for greater than its market value, Grimes said. CRS certified instructor Frank Serio, CRS, led a mega-panel in which he encouraged attendees to “live in the visible future” 30 to 120 days from the present. “When you live in the visible future, predicting the future becomes a whole lot easier,” he said. Agents must be able to “adapt to change…[and] exploit the opportunities.” Panelists discussed the pitfalls of being unprepared for the downturn
and what they did to correct their plans. Shane White, CRS, noted that he should have changed his approach sooner than he did when the downturn came. But since his market was late to decline, he had not yet adjusted his business plan to enable him to make more money during that downturn. Likewise, when the market correction came along, said panelist Orly Steinberg, CRS, “I was in denial along with my sellers.” Suddenly it became time to react, and “it was a matter of putting everything in order quickly,” she said. Wise agents came to realize the downturn demanded a new dedication to austerity. “Everything that we did… was designed to add to the bottom line, even if it meant selling fewer units,” White said. Agents must be able to track how much business their marketing efforts — such as direct mail, a newsletter or prospecting — bring in the door, he said. As Serio said, “If you can’t track it, don’t do it. Otherwise you’re just spending money that you needn’t spend.” The closing session of Sell-abration® featured the father-son duo of Ron Phipps, CRS, a past president of NAR, and his son Matt Phipps, CRS. Ron Phipps advised REALTORS® to be determined in everything they do, but guard against getting discouraged when things don’t go their way. “Everybody fails,” he said. “The difference between the people who succeed and those who fail is persistence.”
www.crs.com | 3 7
inside CRS
Buyer Legends Hold Court
“P
lease see the attached offer. John and Jane saw a couple of great properties in that area, and this is the one they wanted to make an offer on first. I encouraged my buyers to come in with their best foot forward, and I hope these terms are workable for your seller. I hope we have the opportunity to work together on this.” This basic offer email, as presented by Seth Dailey, CRS, at the Jan. 30 CRS Buyer Legends event in Las Vegas, may seem deceptively simple. But it results from an agent’s specific skill in attracting a buyer
38 | March/April 2013
lead, converting that lead into a real client, and working that client through the transaction process toward a successful conclusion. What’s more, happy buyers help REALTORS® build their referral business for years to come. Panelist Frank Serio, CRS, said he focuses many of his efforts on expanding his reputation as the goto market expert in his Delaware vacation community. For years he has been sending monthly market statistics, such as available properties, absorption rates and appreciation rates, to the local TV station. As a result, he is occasionally featured on the nightly news as a local market expert. This brings new buyers in the door.
Technology also plays a key role in attracting buyer clients in today’s market, the event’s panelists agreed. For example, Sven Andersen, CRS, posts videos for buyers on his website, northofbostonrealestate. com. “A buyer called us not long ago and said he saw a buyer video on our site. Two weeks later he bought an $850,000 house,” he said. The personal nature of video works well for his target market of buyers looking for homes located north of Boston, he said. Given the ubiquity of Facebook and other social media outlets, agents would be foolish to ignore this simple method for connecting with potential clients, panelists said. For example, by using social media as a means to allow potential buyers to get to know him, Mario Romero, CRS, said he has won clients: “If people like you, they want to work with you.” Likewise, he said, he looks at other agents’ Facebook pages to make sure they are someone he might like to work with before he sends a referral. But agents must make an effort to represent themselves genuinely on social media. Leigh Brown, CRS, says she doesn’t mind offending people online. “If people are going to be offended by things that I say, I don’t want to work with them anyway. Most REALTORS® are abusing Facebook by being fake. If you find like-minded people, they are going to want to work with you.” Many agents who were reluctant to embrace Facebook and other social media options as a strategy for attracting buyer leads have changed their minds. Sandra Nickel, CRS, an admitted late adopter of technology tools, said, “I finally figured out that [this is] a tool that, if I pay attention to it, will help me.” In other words, figure out what your clients like about these technologies, and then learn to communicate with them via those channels.
Making Converts
Still, “You can have all the Internet leads in the world, but if you don’t work them, they’re useless,” said panelist Carol Greco, CRS. Indeed, REALTORS® who fail to respond immediately to buyer leads will lose out to those who do, panelists agreed. Brown said she responds to buyer inquiries by shooting a quick, 30-second video on her smartphone to introduce herself, which she sends back to the prospect immediately. James Nellis, CRS, said his team calls all leads immediately upon receipt of an inquiry, then emails them, ideally within 15 minutes. He follows up with a text message and a personalized quick introductory video. By engaging leads in a conversation, asking them questions and telling them about the home-buying process, agents can get to know the motivations behind the client’s desire to buy. Gather information about what the buyer wants, Serio said, then inquire if you can ask them some questions to get to know them better so you can help them “find the home of their dreams.” When it comes to getting from the home search process to the closing
sellers overvalue their homes, especially those who may need to move quickly. Agents need to “educate the buyer that there is a definite difference between price and value,” he said.
Help Them Help You Referrals generate the lion’s share of most successful CRSs’ business. James Nellis, who said 80 percent of his business comes from referrals, said, “The best time for you to generate a referral is the 30 days before they go to contract and the 60 days after. That’s the time that you should be completely focused on them.” Why? Because that’s when those clients will be most active talking about the transaction with friends, family and work colleagues. Leigh Brown suggested that asking happy buyer clients for a “referral” may throw them for a loop. “Don’t ask for ‘referrals’; ask them to ‘recommend you,’ ” she said. The general consumer may not understand the word referral, but happy clients are usually more than willing to recommend their REALTOR® to friends and family.
MARK YOUR CALENDAR The 2013 Mid-Year Meetings will take place MAY 16 – 19, 2013, at the Hilton Washington in Washington, D.C. For more details, visit crs.com/events/midyear.
Buyer Legends will be held on MAY 15. For details, visit crs.com/events/crs-legends. CRS also will hold a dinner to honor retiring CEO Nina Cottrell on Friday, May 17. For inquiries about the event and to purchase tickets, contact Lauren Rich at LRich@crs.com.
Ryanrodrickbeiler.com/Veer
FRANK SERIO, CRS
table, agents can rely on some key strategies for success. REALTORS® who did their jobs right during the initial buyer consultation should be able to anticipate many of the problems they may encounter, panelists said. “Seeds planted in the initial interview bear fruit throughout the entire process,” Dailey said. “The first person we need to negotiate with is our client.” For example, panelist Maura Neill, CRS, said agents should use the initial meeting with a buyer to determine how that buyer likes to communicate — via email, text, phone or Facebook, for example — and where they fall on the DISC personality profile. This will help agents tailor their behavior to best serve that individual client. When the client is ready to make an offer, “Tell your buyer that their first offer is really the first counteroffer [based on the sellers’ list price],” Neill said. This puts them in the right mindset to begin the negotiation process. Panelist Jeff Scislow, CRS, points out to his buyer clients that not all
www.crs.com | 3 9
inside CRS
H
oward Brinton, CRS, a past president of the Council and a longtime CRS instructor and facilitator of the Sell-a-bration® education conference, passed away in late 2012. Brinton mentored and inspired many CRSs over the years. CRS asked several of its luminaries to offer their thoughts on Brinton’s legacy within the Council and the real estate industry at large. (Read CRS CEO Nina Cottrell’s memories of Brinton on p. 21 and watch a video tribute at youtube.com/watch?v=urCj7OohGRg.) Gail Lyons, CRS CRS President 1987 “Howard had an uncanny ability to combine in-depth knowledge…with entertainment. He was able to draw out extraordinary skills of practitioners in a way that made his audiences think that they could develop and use the same skills. He often did this within the context of the Council, making members and nonmembers alike think of the Council as the source of education…He was warm and generous, willingly giving his ‘trade’ secrets.” Charles G. “Chip” Morrison, CRS CRS President 1985 “Howard’s greatest contribution to real estate is without a doubt his Star Power Program and tape series that went with it. More than any other individual, he has been responsible for helping agents grow to “super star” greatness, excelling in their careers and growing their incomes to unimaginable levels. Within the Council, Howard was responsible for introducing Nina Cottrell to me, who I personally hired as the first and only executive officer of the Council. (He was also one hell of a backgammon player, as Nina will attest.) Howard was a very special person and a true friend.” Dave Beson, CRS CRS President 1989 “Howard was an amazing sports fan, especially of the Denver Broncos. He was a great golfer
40 | March/April 2013
stir up the pot and get people to think about how to do things differently. For me, he was one of my best friends in the world. From the business side, he changed the industry by creating stars from the best agents in the business. He brought the best practices of these agents and shared them with the industry. He had an uncanny ability to create a rapport with an audience, and he taught me that. There isn’t a day that goes by that I don’t think about him. He was an icon in the business.” and buddy, especially if there was money on the line. Many would be surprised that Howard got up early every day to play Yahtzee or backgammon with Babsie. His legacy is that he helped people to be their best and brought their coolest ideas and strategies to others in a sharing and caring way. He was a great friend, humorist and a true bon vivant!” Pat Zaby, CRS CRS President 1990 “Howard’s legacy is how he inspired agents to reach new levels of productivity that they had never reached before. He did it by finding professionals who were handling parts of their business in an extraordinary way. He presented their techniques and systems in a way that allowed the average agent to believe that they could achieve those levels also. While doing that, he made these professionals “stars” in the real estate community and built a family that would share every detail of their business with each other. Howard used his humor and great storytelling to entertain his students while they were learning. He made it fun and interesting to the point that agents looked forward to their next class before the current one was even finished.” David Knox David Knox Productions “With CRS, he helped the Council to think as a profit center and as a business, and he helped the Council grow. He was a tremendous contributor and a great instructor. He liked to
John Clements, CRS CRS President 1991 “Howard’s legacy will be that he made everyone better. Most learned from his humor, wit and love for people. He never let you get away with doing less than your best, and in most cases, he helped you understand how to get there. Howard was a true original, and he was one of the reasons the Council was so successful. If Howard had not been my wingman over the years, my time with the Council would have been far less educational and enjoyable. I will always treasure those times with Howard and the rest of the faculty. I am a better person for being around Howard, and for sure I have a better life as a direct result of my involvement with Howard and the Council.” Jock Barker, CRS CRS President 1981 “Anyone who ever met Howard was a happier person for the encounter. Howard was every instructor’s favorite to teach with, and I loved teaching with him. A day with Howard was a day without clouds — just sun and positive vibes. Any person who took a CRS class with Howard never forgot who their instructor was. He gave leading-edge techniques, strategies and scripts that worked. Students had writers’ cramp taking notes when they weren’t crying with laughter at his wonderful unique delivery. We will miss Howard, but we will never forget the man who helped all of us to grow, earn and enjoy our business so much. Thanks, Howard, so very much.”
CRSs of the Year
C
ongratulations to all the CRS of the Year winners for 2012. These individuals showed exceptional dedication to their chapters, contributed generously of their time and resources to their communities and operated successful businesses. Winners also must be members of their local boards or state associations for more than five years. Below are the 44 winners who were notified by press time.
Winner
Chapter
Company, Location
Winner
Chapter
Company, Location
Angie Newby, CRS
Alaska
Homer Real Estate Associates, Homer, Alaska
Rosemarie Doshier, CRS
North Carolina
Four Seasons Realty, Nags Head, N.C.
Sylvia Stewart, CRS
Alabama
Keller Williams Realty, Fairhope, Ala.
Carolyn Zeigler, CRS
No. California
RE/MAX Accord, Danville, Calif.
Rise’ Johns, CRS
Austin Area
Keller Williams – Lake Travis, Lago Vista, Texas
Mark Leaders, CRS
Nebraska
CBSHOME Real Estate, Omaha, Neb.
Pam Ruggeroli, CRS
Arizona
Long Realty Company, Tucson, Ariz.
Lois Capitani, CRS
New Jersey/ Delaware
NextRE, Middletown, Del.
Robert Walkowicz, CRS
Colorado
The Group, Inc., Fort Collins, Colo.
Lynne Mortimer, CRS
New Jersey/ Delaware
Coldwell Banker, Montclair, N.J.
Millie Legenhausen, CRS
Connecticut
Home & Hearth Realty, Hamden, Conn.
Waylon Chavez, CRS
New Mexico
ABQ Premiere Properties, Albuquerque, N.M.
Tom Gaye, CRS
Central Virginia
Rushing Realty, Richmond, Va.
Jody Scowcroft, CRS
Sierra Nevada
Faith Wendt, CRS
Dakotas
Coldwell Banker LKH, Rapid City, S.D.
Coldwell Banker Boice Realty, Truckee, Calif.
Bill Lawson, CRS
Georgia
Harry Norman, REALTORS®, Atlanta
Nina Betancourt, CRS
New York
North Country Sotheby’s, Croton-onHudson, N.Y.
Ramona Biho, CRS
Hawaii
Ramona J. Biho Realty, Koloa, Hawaii
Bonnie Boyd, CRS
Ohio
Dianna Dieatrick, CRS
Iowa
N. P. Dodge Company, Council Bluffs, Iowa
Howard Hanna Real Estate, Mentor, Ohio
Genie Vinson, CRS
Oklahoma
Keller Williams Realty, Yukon, Okla.
Gene Strate, CRS
Idaho
Keller Williams Realty Boise, Meridian, Idaho
Ferne Silberman, CRS
Pennsylvania
Prudential HSG, Mount Joy, Pa.
South Carolina
RE/MAX Pro Realty, Charleston, S.C.
Illinois
Realty Executives Prestige, Arlington Heights, Ill.
Jeff Bowers, CRS
Anita Zabielski, CRS
Bob Moffatt, CRS
South Carolina
Carolyn Kelly, CRS
Indiana
Coldwell Banker Troy Helman, Terre Haute, Ind.
Prudential C Dan Joyner, Greenville, S.C.
Susie Hafer, CRS
So. California
Cobalt Realty Group, Camarillo, Calif.
Erika Gudenkauf, CRS
Kentucky
RE/MAX Advantage Plus, Radcliff, Ky.
Barbara DuDeck, CRS
So. California
RE/MAX Ranch and Beach, San Diego
Gary Rogers, CRS
Massachusetts
RE/MAX on the Charles, Waltham, Mass.
Melissa Stuart, CRS
Tennessee
Realty III, Maryville, Tenn.
Janet Gremillion, CRS
Louisiana
C J Brown, Baton Rouge, La.
Sherry Gambitta, CRS
Texas
RE/MAX North - San Antonio, Helotes, Texas
Sharron Dorsey, CRS
Maryland/D.C.
Long and Foster Real Estate, Belcamp, Md.
Rebecca Ray, CRS
Texas Lone Star
Mountain Springs Realty, Mountain Springs, Texas
Stephen Stewart, CRS
Minnesota
Edina Realty, Edina, Minn.
Kris Furrow, CRS
Utah
Joe Spake, CRS
Mid-South
InCity Realty, Memphis, Tenn.
UtahDave.com Real Estate, South Jordan, Utah
Germaine Haberman, CRS
Montana
Prudential Montana Real Estate, Missoula, Mont.
Susan Cooper, CRS
Washington
Preview Properties Skagit, Mount Vernon, Wash.
Eunice Beekman, CRS
Wisconsin
House to Home Properties, Waupun, Wis.
Linda Sheffield, CRS
North Alabama
Rise Real Estate, Huntsville, Ala.
Karen Valentine-Pond, CRS
Wyoming
Valentine Real Estate, Laramie, Wyo.
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NAR Leadership Academy
C
RS is well represented in NAR’s Leadership Academy class of 2013. Of 16 REALTORS® selected to participate in the program, seven are active CRS Designees. The Academy Advisory Board selects applicants who have demonstrated personal and professional leadership in their respective local markets, but who are not actively involved on the national level. The Academy aims to expand participants’ leadership abilities while giving them an opportunity to learn about NAR and the industry in the process.
Referral Story: CRSs Help in LongDistance Relocation
K
athleen O’Donnell earned her CRS Designation in 2012, but it didn’t take long for her to take advantage of her CRS connections. A client referred O’Donnell, broker with the O’Donnell Group in Portland, Ore., to her brother and his wife, who were moving to that area from Wayne, N.J., where they had lived in the same house for more than 20 years. The wife was especially anxious about the huge change in their lives, recalls O’Donnell. “During my initial meeting with the couple when they visited Portland to look for a temporary rental, I asked if they had someone to help them sell their home
Academy participants undergo a series of challenging team-building exercises and workshops over a sevenmonth period. Graduates have gone on to serve in numerous volunteer positions within their respective state and local real estate associations, as well as within NAR and its affiliates. Congratulations to the following CRS Designees who were chosen to participate in 2013: Martha Dent, CRS; Scott Caballero, CRS; Cathy Colvin, CRS; Claire Forcier-Rowe, CRS; Nicole Brule-Fisher, CRS; Terri Bersach, CRS; and Kathleen Fowler, CRS. NAR is accepting applications for the 2014 Leadership Academy class. To learn more and to apply, visit www. realtor.org/programs/leadership-academy. in New Jersey. When they said they did not, I explained what it means to hold the CRS Designation and I offered to help them find someone among the CRS membership,” she recalls. After searching the CRS online directory for agents in their area, O’Donnell briefly interviewed several of them. “I explained what my clients needed and what I thought would be important to them in selecting a broker.” Within one week of their return to New Jersey, the couple met and hired Sonja Horvath, CRS, of Coldwell Banker. Within one week of being listed, the home went under contract. “Unfortunately, the physical move to Portland was more problematic, and the couple has decided to rent for the next year before choosing a home,” she says. But O’Donnell says she will keep in touch with them until they are ready to buy.
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.
42 | March/April 2013
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 ,
B U Y E R S
A N D
2013 MA RCH
S E L L E R S
Common Scents
T
E
Curb View
verybody knows that first impressions matter. The outside of your house says a lot to guests and potential buyers before they even walk in the door. There are easy ways to clean and freshen up the exterior of your home that don’t require gallons of paint or a landscaping crew. Consider these tips from DIY Network. Start with the front door. If you’re willing to make a bold move, paint your door a bright color like canary yellow to help your house stand out (as long as the color is complementary to the trim, the shutters and the rest of the house). Also, make sure lighting fixtures match the style of your house and are working properly. Another quick way to brighten up the front of the house: Add flower boxes or pots with colorful blooms to your porch railings or around your door. Curb appeal is all about the details. Ask yourself: Is there sufficient outdoor lighting? Are overgrown plants and bushes creating an unsightly mess? Is your home address visible? Revitalize your door by replacing the old hardware, installing tidy new address numbers or giving it a paint job. What’s more, as simple as it sounds, installing a new mailbox — near the road or mounted to your house — can go a long way toward showing off your home. The options and materials are endless, but as with any other updates, make sure the style fits your house.
here is a strong connection between smells and human emotions. Given that homebuying can be an emotional process, you’ll want your home to look and smell good when you’re getting it ready for a showing. Make sure your home passes the smell test by following these tips from HGTV. If there are any foul odors in your home, don’t just cover them up by baking cookies — try to identify the source and focus on eliminating the odors. Old carpets are often the biggest culprit. If you don’t have the time or budget to replace old rugs with new carpet or hardwood floors, wash the carpet with mild detergent soap and water solution, then go over it with a damp towel to neutralize the odor. And be sure to circulate the fresh air by keeping windows on opposite walls open. After you’ve rid your home of bad scents, or if you just want to fill it with more pleasant smells, consider boiling fruit peels, spices or herbs in water. Rather than throwing away lemon or orange peels, boil water and let the peels sit for a few minutes, adding water every half-hour or so. You can also mix the peels with other soothing scents. Using oils such as sandalwood, lavender, tea tree and eucalyptus can be therapeutic and inviting.
fast fact »
»»»»»»»»»»»
Indoor and outdoor allergies affect more than 40 million Americans. The most common triggers are tree, grass and weed pollen, mold spores, dust mite and cockroach allergens, and pet dander.
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
Drain Trust S
pring is prime time for house cleaning and maintenance, which should include careful cleaning of gutters. Although they’re designed to act as a drain and protect your home, they often get clogged with leaves and water. They should be cleaned twice a year. To get started, consider these steps from Lowes.
First, clean the downspout. Set a ladder on the side of the house where the gutter starts and where most leaves and twigs get trapped. With gloves and a towel, remove the debris and let it fall in a bucket. Move the ladder down the gutter and repeat the process. Check all gutters for holes, leaks, dents and other features that may need
Say Yes to CRS
DID YOU KNOW?
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 marketplace. To earn 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 in the top 3 percent in the nation. Contact a CRS today.
REFERR VE
*
Do you know someone who is thinking about buying or selling a home?
repairs. If your hangers are loose, tighten them or replace them if they seem damaged. Sagging gutters are an indication that the hangers are too loose. After you’ve covered the perimeter and have removed most of the debris, spray the gutter with a garden hose to rid any remaining debris.
You can make your own window cleaner by mixing equal parts white vinegar and warm water. The vinegar eliminates window streaks and smudges on glass surfaces.
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.
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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 March 14, 2013, to June 15, 2013. For more upto-date listings, visit www.crs.com.
CRS 200 — Business Planning and Marketing APRIL 22 – 23 AUSTIN, TEXAS Austin Board of REALTORS® 512.454.7636 Instructor: Dale Carlton, CRS
MAY 30 – 31 MURRIETA, CALIF. Southern California CRS Chapter 951.894.2571 Instructor: Frank Serio, CRS, CRB
CRS 202 — Buyer Sales Course APRIL 25 – 26 AUSTIN, TEXAS
APRIL 15 LA VISTA, NEB.
Austin Board of REALTORS® 512.454.7636 Instructor: Michael Selvaggio, CRS, CCIM
Nebraska CRS Chapter 800.777.5231 Instructor: Martha Webb
CRS 204 — Income Properties
Rich Buyer, Rich Seller, Part 1: Positioning and Branding Yourself as a Luxury Market Expert
MARCH 27 – 28 CLIVE, IOWA Iowa Association of REALTORS® 800.532.1515, ext. 1 Instructor: Chris Bird
APRIL 24 – 25 BELLVUE, WASH.
CRS 201 — Listing Course MARCH 20 – 21 SCOTTSDALE, ARIZ.
CRS 206 — Technology Course
MARCH 25 – 26 SANDY, UTAH Utah CRS Chapter 801.699.9431 Instructor: Ed Hatch, CRS
MARCH 27 – 28 SAN ANTONIO Texas CRS Chapter 210.602.2488 Instructor: Robert Morris, CRS, CRB
APRIL 4 – 5 WOODBURY, N.Y. New York State Association of REALTORS® 800.239.4432, ext. 219 Instructor: Gee Dunsten, CRS
APRIL 9 – 10 ELLICOTT CITY, MD Maryland/DC CRS Chapter 410.575.5053 Instructor: Jackie Leavenworth, CRS
APRIL 18 – 19 ANCHORAGE, ALASKA Alaska CRS Chapter 907.561.2338 Instructor: Lee Barrett, CRS
APRIL 24 – 25 HONOLULU Hawaii Aloha Chapter of CRS 808.733.7060, ext. 105 Instructor: Jackie Leavenworth, CRS
APRIL 29 – 30 GEORGETOWN, DEL. Sussex County Association of REALTORS® 302.855.2300 Instructor: Frank Serio, CRS, CRB
MARCH 22 SANTA FE, N.M. Sante Fe Association of REALTORS® 505.982.8385 Instructor: Martha Webb
Washington CRS Chapter 866.556.5277 Instructor: Doug Richards, CRS
Arizona CRS Chapter 866.440.9804 Instructor: Frank Serio, CRS, CRB
Positioning Properties to Compete in the Market
MARCH 14 – 15 MERRILLVILLE, IND. Indiana CRS Chapter 800.681.8056 Instructor: Mark Porter, CRS
MARCH 21 – 22 JOHNSON CITY, N.Y. New York State Association of REALTORS® 800.239.4432, ext. 219 Instructor: Rich Sands, CRS
MARCH 19 SARASOTA, FLA. Sarasota Association of REALTORS® 214.485.3000 Instructor: Laurie Moore-Moore
MAY 16 MIAMI Miami Association of REALTORS® 214.485.3000 Instructor: Laurie Moore-Moore Rich Buyer, Rich Seller, Part 2: A Luxury Marketing Idea Blitz
MARCH 20 SARASOTA, FLA Sarasota Association of REALTORS® 214.485.3000 Instructor: Laurie Moore-Moore
MAY 17 MIAMI
CRS 210 — Referral Course
Miami Association of REALTORS® 214.485.3000 Instructor: Laurie Moore-Moore
APRIL 17 REHOBOTH, DEL.
Silver Bullet Solutions
New Jersey Delaware CRS Chapter 855.696.5277 Instructor: Chuck Bode, CRS
Elective Courses Elective courses vary in length and credits earned toward the CRS Designation. Please visit the CRS website for details. Listings by the Dozen
APRIL 12 RICHMOND, VA. Central Virginia CRS Chapter 804.422.5000 Instructor: Jackie Leavenworth, CRS No Bull Selling
APRIL 16 AMHERST, N.Y. New York State Association of REALTORS® 800.239.4432, ext. 219 Instructor: Michael Selvaggio, CRS, CCIM
APRIL 18 RICHMOND HILL, ONTARIO CRS 800.462.8841 Instructor: Michael Selvaggio, CRS, CCIM Top Secrets of Outlook E-Marketing Strategies
MARCH 21 BOZEMAN, MONT. Montana Association of REALTORS® 406.441.4863 Instructor: Mark Porter, CRS
APRIL 10 HOT SPRINGS, ARK. Arkansas CRS Chapter 501.622.0513 Instructor: LeRoy Houser, CRS
Note: Instructors listed on all courses are subject to change.
www.crs.com | 4 5
OVER 25 HOURS of AUDIO HEAR WHAT YOU MISSED 12 SESSIONS 12 WORKSHOPS 2 MEGAPANELS
Download the complete MP3 audio library onto your computer or listen to it directly from our site on your media player.
AUDIO LIBRARY PRICING $10 CRS Designees $20 CRS Members $50 Non Members To purchase these audio files, visit
www.crs.com RESOURCES • March/April 2013
residential The
Specia li s t
State of Play
Estate of the Heart
Short Cuts
Chris Galler, Minnesota Association of REALTORS®, cgaller@mnrealtor.com
Debra Attman, CRS, Long and Foster, attwoman@aol.com
Selma Hepp, California Association of REALTORS®, selmah@car.org
Linda DeVlieg, CRS, Coldwell Banker Legacy, linda@realestateinABQ.com
Christi Conroy, CRS, William E. Wood & Associates REALTORS®, christiconroy@ williamemewood.com
Stacey Ricks, Virginia Association of REALTORS®, Stacey@varealtor.com
Diane Cadogan Hughes, CRS, The Higgins Group REALTORS®, diane@ dianechughes.com
Gary Rogers, CRS, Massachusetts Association of REALTORS®, grogers@ remax.net
Andy Norton, CRS, RE/MAX Distinctive, andynorton@mac.com Gary Rogers, CRS, RE/MAX on the Charles, grogers@remax.net
46 | March/April 2013
Chandra Hall, CRS, Colorado Mesa Realty, chandra@chandrahall.com Barbara Keathley, CRS, The Seller’s Agent, barb@sellersagent.com Amy Shocket, CRS, Dickson Realty, amyshocket@sbcglobal.net
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
Manuel Vargas Licensed Broker Associate ABR, CRS, SRES, GRI, CDPE
Serving Northern Virginia and the Dulles Tech corridor Offices in Ashburn and Sterling Re/Max Select Properties, Inc.
703-999-6535 lisacromwell@remax.net www.LisaCromwell.com
Bachelor of Science in Real Estate, NYU, Magna Cum Laude Serving Manhattan and Queens for over 17 years
Cell: 917-559-2002 E m a i l : M a n u e l @ i s e l l ny. c o m
SOUTH
Boca Raton, Florida
Lance Jason CRS, GRI, e-Pro, SRES Phone: 561-290-9866 lance@lancejason.com Serving the real estate needs of the baby boomer community
WEST COAST NAPLES, BONITA SPRINGS, ESTERO, FT MYERS—FLORIDA
Marie Pimm,
SOUTHERN CALIFORNIA TEMECULA – MURRIETA RIVERSIDE & ORANGE COUNTIES
P.A.
Realtor—CRS, CIPS, e-PRO, GRI
(239) 770-3383
“Everyone Likes Sara Lee!” SARA LEE PAULL CRS, SRES,e-PRO
Marie@MariePimm.com www.MariePimm.com
www.NaplesBonitaEsteroHomefinder.com
H AWA I I
Broker Associate (#00547900) Cell: 951-970-5211 Direct: 951-461-4611 saralee@saraleepaull.com saraleepaull@verizon.net www.saraleepaull.com
CANADA
Real Estate
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
www.crs.com | 4 7
CRS REFERRAL MARKETPLACE
C EAST COAST
Ask a CRS | Advice from the country’s top Certified Residential Specialists
miles away Q U ESTIO N : How do you log your mileage and expenses?
IN OUR EXPERIEN C E . . . “I USE THE MileBug phone app. You can track multiple vehicles, set up standard trips and reasons for travel (e.g., open house, listing maintenance, showings, etc.), and email the reports to yourself. Like any method, you have to get into the habit of doing it. It is the first thing I do before I pull out of the driveway.”
“I START MY mileage odometer over each morning when I start work and record each day’s mileage in Outlook. Then I just total each month and total for the year.” Sandi Shearer, CRS Prudential Brokerage West
“I USE AN app on my iPhone called Travelreporter, which was free when I got it. I have my phone programmed to remind me to turn it on when I leave the house and off when I return. I can save the daily mileage and email a report to myself. Really simple.”
Cody, Wyo.
Sandi@wavecom.net
Dave Chomitz, CRS Royal LePage ProAlliance
Kathy Toomey, CRS
Cobourg, Ontario
New View Realty LLC
Dave@movingtocobourg.com
Tryon, N.C.
Kathy@KathyToomey.com
»»»»»
Please submit real estate questions for “Ask a CRS” to Mike Fenner at mfenner@crs.com.
48 | March/April 2013
CRS eLEARNING
YOUR COURSES ON YOUR TERMS
Upon completion of any CRS eLearning course, you will earn 2 to 8 credits of CRS Education toward the CRS Designation. You may also use CRS eLearning courses to earn continuing education credit in some states. Please check the CRS website at www.crs.com for up-to-date CE credit availability per state and course.
FIVE COURSES TO CHOOSE FROM NEW
2 credits
CLIENT NEGOTIATIONS: UNLOCKING HEARTS VS. LOCKING HORNS Discover how to work more effectively by identifying and addressing your clients' underlying interests beginning with the first client contact, continuing through the transaction process, and extending into the post-transaction follow-up. Topics covered: • Setting client expectations up front • Differentiate between positions and interests • Discover client’s underlying interests • Recognize new positions • Reframe client’s position to interest • Using interests to negotiate with clients: • Buyer and Seller techniques • Encourage repeat and referral business
8 credits SHORT SALES AND FORECLOSURES: PROTECTING YOUR CLIENTS` INTERESTS (CRS 111)* Learn how to work with buyers and sellers of distressed properties in the online version of the popular classroom course. Topics covered: • Short sales process • Buying short sales • Short sales misconceptions • Avoiding a foreclosure • Alternatives to a foreclosure • Necessary skills for listing REOs • The REO process • And much more! *This course also completes the core course requirement for NAR’s SFR Certification.
8 credits
8 credits
KEEP IT SIMPLE WITH LOW-COST ONLINE MARKETING
PUTTING TECHNOLOGY TO WORK FOR YOUR CLIENTS
The economy has changed and an agent’s marketing strategies need to change as well. Discover the world of online marketing. Topics covered:
Expand your knowledge of today’s real estate technology to be better prepared to work effectively with online consumers. Topics covered:
• Getting your website noticed • Blogging • Working with social media • Shooting video • Getting an online presence • Website resources
8 credits CREATING VALUE FOR YOUR CLIENTS Learn how to be more valuable to your clients and maximize your income. Topics covered: • Business plan development • Prepare and conduct effective listing presentations • Develop your negotiating skills • Utilize digital technology • Analyze potential investment opportunities • Build a referral business
• Communicating with today’s Internet consumers • Website enhancements to expand your business • Developing Internet marketing plans • Creating customizable marketing materials • Purchasing new products and service upgrades • Determine what technology can support you
eLearning Course Pricing: 2 credits CRS Designees $30 CRS General Members $40 Everyone else $50
8 credits $125 $150 $175
Register for a CRS eLearning course by visiting www.crs.com/education today. For information on the Council of Residential Specialists and the CRS Designation, please contact Customer Service at 800.462.8841, or visit www.crs.com.
LEGENDS SERIES PRESENTS:
BUYER LEGENDS May 15, 2013 Washington Hilton Washington D.C.
8:30 A.M. - 5:00 P.M. Networking Lunch Included
A PANEL OF PROS SHARE HOW TO MAXIMIZE YOUR TIME AND EFFORT WHEN YOU WORK ON THE BUYER SIDE OF THE EQUATION
Join leading thinkers and practitioners in residential real estate as they teach you to be more successful through proven methods they use in their own businesses. Each intensive session focuses on a different aspect of working with buyers. You will convert more prospects into clients, show fewer homes, learn to navigate contract negotiations, discover which systems work and which don't, and find out how to build buyer loyalty.
The Buyer Legends experience: A one-day event with a singular focus on working with buyers. Learn what steps expert panelists and other attendees use at each stage of the buying process. Create a formal strategy for working with buyers and learn how to implement each step into your business. Understand where the obvious and hidden sources of buyer leads come from and what lead-generation systems you should be using in your business. Networking opportunities to meet agents from across the nation. Online access to presentations, handouts and forms from the event. Attendees who are working towards their CRS Designation will receive 8 CRS Education credits toward the CRS Designation. Find that one referral that pays for the entire experience.