2011-07-08 Commonwealth

GUEST WRITERS Galore: REal Show speakers strut their stuff July/August 2011

A journal for real estate professionals published by the Virginia Association of REALTORS® • www.VARealtor.com

Who goes there?

Franchises, IDX, and the future of MLS access

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firstword ANDREW KANTOR

PUBLISHED BY THE VIRGINIA ASSOCIATION OF REALTORS® The Business Advocate for Virginia Real Estate Professionals John Dickinson, CCIM, GRI President Trish Szego, CRB, CRS President-Elect Mary Victoria Dykstra, ABR, CRS Vice President John Daly, SFR Treasurer Cindy Stackhouse, GRI Immediate Past President R. Scott Brunner, CAE Chief Executive Officer scott@VARealtor.com Amanda Arwood Vice President of Marketing & Communications amanda@VARealtor.com Andrew Kantor Editor & Information Manager andrew@VARealtor.com For advertising information, Brittany Sullivan at (410) 584-1968 or e-mail var@networkmediapartners.com The mission of The Virginia Association of REALTORS® is to enhance its membership’s ability to achieve business success.

Commonwealth magazine (ISSN#10888721) is published bi-monthly by the Virginia Association of REALTORS®, 10231 Telegraph Road, Glen Allen, VA 23059-4578; (804) 264-5033.

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VARealtor.com/twitter VARealtor.com/facebook VARealtor.com/linkedin VOLUME 18 ● ISSUE 4

The pace of change YOU KNOW THE guy who, while waiting in the “12 Items or Less” line at the supermarket, mumbles “It’s 12 items or fewer”? That’s me. I’m old-fashioned that way — a stickler for the status quo, at least when it comes to language.

(I hate hearing “Someone left their keys here” when it should be “Someone left his keys here.”)

At the same time, I recognize that English is a wonderfully flexible language. It evolves. In grade school, for instance, I was taught never to begin a sentence with “But” or “And.” But that’s no longer the case.

So why do people like me continue to fight for the status quo, to grouse about writers who use “over” when they mean “more than”?

Because it’s our job in the process of change. We’re there not to stop the change (which is impossible), but to slow it down.

English will evolve, sure, but it needs to evolve slowly, and sticklers like me exist to keep the pace of change reasonable, lest every slang term and style error make it to Webster’s in months.

Here’s the important part: I know that, despite my efforts, change will happen. And I’m okay with that. I can see the end result will be something different — that today’s faux pas will be tomorrow’s standard usage. I don’t find anything wrong with defending the status quo, though. It’s my job.

This issue’s cover story is about

the quiet, raging battle over the role and place of the Multiple Listing Service. How much will (or should) tomorrow’s MLS resemble today’s? Is change necessary? Dangerous? Inevitable?

English will evolve, sure, but it needs to evolve slowly, and sticklers like me exist to keep the pace of change reasonable, lest every slang term and style error make it to Webster’s in months.”

Just as with language, it’s easy to see that it will change… eventually. And just as with language, there are forces pushing for quicker change and slower change. That’s exactly as is should be. It’s helps ensure that we move at a reasonable pace, and that tomorrow — whatever tomorrow is — doesn’t come too late ... or too soon. ●

Andrew Kantor, Editor andrew@VARealtor.com JULY/AUGUST 2011

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July/August 2011 Volume 18 ● Issue 4

contents

departments 4 quickhits The latest news and announcements for Virginia’s Realtors®

8 statswatch The numbers that shape your world

10 legallines Questions and answers about Virginia real estate law

14 lifelessons When real estate pros break the rules ... and get caught

16 formfactor A new disclosure for our popular residential purchase contract

features

18

Who goes there?

28

Carving their territory

31 accessibletech Why you shouldn’t worry about being left behind

in every issue 1 firstword 36 rpacreport

It’s called “Franchise IDX” and it’s a policy that’s stirred plenty of debate — because behind the technical talk, the real discussion is about the means, methods, and future of the MLS.

Virginia’s lawmakers have redrawn the state’s district lines, and the new map means new faces, retirements, and some new lobbying tactics.

43 contactvar 44 lastword APEX Award of Excellence winner 2

July/August 2011

www.VARealtor.com

PRIME FRANCHISE TERRITORIES AVAILABLE Contact Nancy & Tom Shaver EXIT Realty Virginia Office: 800-906-3948 info@exitvirginia.com E

EXIT REALTY ASSOCIATES HAVE EARNED OVER 200 MILLION DOLLARS ABOVE THEIR COMMISSIONS IN SPONSORING BONUSES AS A THANK YOU FOR GROWING THE COMPANY!

quickhits

ANDREW KANTOR

Forms

Important forms changes — have you updated yours?

Several standard VAR forms were updated to comply with new Virginia legislation that took effect July 1. They’re all available on VARealtor.com/standardforms and through ZipForms; you should begin using them immediately.

Summary of Rights and Obligations of Sellers and Purchasers Under the Virginia Residential Property Disclosure Act (VAR Form SUM1) The SUM1 form has been amended slightly to conform to the changes in the law. It should still be given in combination with the Residential Property Disclosure Statement to inform clients, and the customers you actually deal with, of their rights and obligations under the Residential Property Disclosure Act.

Defective Drywall Disclosure Statement: Notice to Prospective Purchaser The Real Estate Board has approved a disclosure form concerning sales of properties with defective drywall; it applies to all configurations of owners, sellers, buyers, and tenants, and potential tenants.

Disclosure is required of REO and foreclosed property holders as well, unlike the requirements of the Virginia Residential Property Disclosure Act.

Defective Drywall Disclosure Statement: Notice to Prospective Tenant This form was created by VAR to more specifically address disclosure of defective drywall in lease situations. This is not a Real Estate Boardapproved form.

The Code of Virginia requires the landlord of a residential dwelling unit who has actual knowledge that the property contains defective drywall to provide a written disclosure of that fact to the prospective tenant prior to the execution of a lease, or if no lease, occupancy of the property.

Please note that a tenant may terminate the lease if the defective drywall condition is not disclosed prior to lease execution.

§ 55-248.12:2 Any tenant who is not provided the disclosure required by subsection A may terminate the lease agreement at any time within 60 days of discovery of the existence of defective drywall by providing written notice to the landlord in accordance with the lease or as required by law.

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July/August 2011

Virginia Residential Property Disclosure Statement The disclosures that appear on the Residential Property Disclosure Statement provided by sellers to purchasers of residential property will change dramatically.

The current list of disclosures/ disclaimers on that form will move to a website maintained by the Real Estate Board, thus eliminating the risk of using an out-of-date form (and threatening your contract).

The Residential Property Disclosure Statement will direct the purchaser to view that website. Of course, you can print the site’s contents and provide it to the purchaser at the seller’s discretion or if required by contract.

The new form must be given to all prospective buyers unless the seller is exempt from the requirements of the statute (exemption rules have not changed) and it must be given effective July 1, 2011. This means that Realtors® who took listings before that date will have to get their sellers to sign new disclosure forms. You do not have to give the new form to buyers who got the old form before July 1.

Remember: It doesn’t matter when you took the listing. If you are giving a form to a prospective buyer after July 1, it must be the new disclosure form, regardless of when you took the listing.

www.VARealtor.com

Capitol Hill

Lawmakers look to lengthen larger loan limits The FHA’s conforming loan limits — the largest mortgages the government is willing to back — are set to drop on October 1. That would mean, realistically, that prospective buyers of millions of homes across the country would no longer be able to get reasonable financing.

For example: • In Richmond the loan limit will drop from $300,000 to $271,050.

• In Roanoke it will drop from $280,000 to $271,050.

• In Essex County it will drop from $375,000 to $274,850.

Get the picture? These loan limits don’t just affect highpriced homes. They affect the middle of the market. If the higher limits aren’t extended, any house in Essex that costs between $274,850 and $375,000 will suddenly become much harder to buy or sell.

We’ve gotten some Congressional support for extending the limits from Reps. Gary Ackerman (D-N.Y.) and John Campbell (R-Calif.), who introduced a bill to extend the current conforming loan limit for another two years.

Their bill, the Conforming Loan Limits Extension Act, would allow Fannie, Freddie, and the FHA to continue to buy or back mortgages up to the current maximum ($729,750 nationwide, with local limits — see above.)

When the National Association of Home Builders did the math, it found that something like 17 million homes would instantly be out of range of federal backing.

The idea, of course, is to wean the nation from such wide government support — more than 90% of mortgages these days are backed or owned by one of those “F”s. But we’ve all seen how finicky private capital can be, especially when things get rough.

As Rep. Ackerman put it, “The housing market does not need a self-inflicted wound. With the economy remaining fragile and the housing sector still struggling to recover, now is not the time to make the cost of mortgages more expensive.”

Volume 18 ● Issue 4

International connections

Pole position: NVAR goes international Acting as the NAR Ambassador Association to the Polish Real Estate Federation, leadership from the Northern Virginia Association of Realtors® traveled to Poland to teach their Polish counterparts how real estate is listed, marketed, appraised, and sold in the United States, and to offer suggestions about how to manage a real estate association.

“Our seminar topics have included the history and evolution of our Multiple Listing Service, standardized real estate contracts, value and enforcement of the Realtors® Code of Ethics, designing educational programs, non-dues income, creating a public awareness campaign for the real estate profession and many others,” wrote Christine Todd, CEO of NVAR. Of particular interest was working with the government. The real estate profession is still relatively young in eastern and central Europe, and the relationship between real estate professionals and government regulators is still evolving. (For example, the concept of lobbying members of Parliament struck the Poles as unprofessional.)

Polish real estate agents, using the techniques they learned from NVAR, successfully passed a real estate license law — its first major legislative success.

Forms

B of A adds addendum to short sale form If you happen to be dealing with Bank of America on a short sale, keep your eyes open for a new addendum that the bank claims is aimed at preventing fraud.

“We want to ensure that the transaction is at arm’s length and that the property isn’t immediately flipped for a higher price without there being any repairs or upgrades,” said a B of A spokesperson, adding, “It’s not punitive in any way and has nothing to do with deterring any part of the transaction, and certainly not the compensation that goes to the agent.”

Get the details at B of A’s short-sale info page: VARealtor.com/boashort.

July/August 2011

5

quickhits NAR news

NAR meets first payment milestone with CIVIX In December 2005, a company called CIVIX sued NAR, Move.com (which runs Realtor.com), and Hotels.com claiming the companies’ websites infringed on CIVIX’s patents for location-based services. Later CIVIX also sued two giant mlss: mReD (in Illinois) and mRIs. move and mRIs each settled for an undisclosed sum.

Seeing the writing on the wall, about 50 MLSs across the country — each of which could be the target of a CIVIX suit — asked NAR to negotiate a blanket agreement. when the dust cleared, NAR agreed to pay the company $7.5 million to license the technology, and the MLSs were off the hook.

(Considering that CIVIX was demanding $6 per member for four years, the alternative could have been crippling for mlss and Realtor associations; NAR estimated it would have cost the industry $20 million.)

So CIVIX agreed not to sue any MLS or Realtor® association if NAR raised that $7.5 million in licensing fees in three equal installments: $2.5 million by June 17, another by July 17, and another by August 16. so far, working with state and local associations, NAR has hit the first two $2.5 million goals. (But if it doesn’t make that final installment, any MLS or Realtor® association that hasn’t paid the licensing fee could find itself facing a lawsuit.) want to know more? For some good background on the issue, crain’s Detroit Business has an excellent piece (VARealtor.com/civix-crains), and Realtown has one with a real estate perspective (VARealtor.com/ civix-realtown).

Foreclosures

Ripples continue: REOs hurting sales A New York Times report found that bank-owned properties are hurting other sales.

Banks and other lenders own more than 872,000 homes in the country, thanks to all those foreclosures. more are in the pipeline. that pushes down prices, and therefore property values. more people are underwater, which means more foreclosures… you get the idea. over all, economists project that it would take about three years for lenders to sell their backlog of foreclosed homes. As a result, home values nationally could fall 5 percent by the end of 2011, according to Moody’s, and rise only modestly over the following year.

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July/August 2011

consumers

Home ownership still ranks high A survey by The New York Times found that, despite the last few years, the vast majority of voters value homeownership highly — and consider a home to be a good investment.

According to the Times/cBs poll, nearly nine in 10 Americans say homeownership is an important part of the American dream, and “they are keen on making sure it stays that way, for themselves and everyone else.” what does that mean? Not only do 45% say the government should be doing more for the housing market (only 16% said it should do less), but get this: 53% were in favor of the government offering direct financial assistance to those having trouble paying their mortgages.

It gets better: “support for helping people in financial distress over housing is higher than support for helping those without a job for many months.”

Better still, “[A]lmost no one favors discontinuing the mortgage tax deduction, a prized middle-class benefit.” to be fair, the news isn’t all good: more than half of those polled think a 20 percent down payment is a good idea. But by and large, the picture is crystal clear: Americans value housing, they value homeownership, and they’re willing to put their tax dollars where their mouths are.

www.VAReAltoR.com

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statswatch Virginia home sales in the second quarter Most regions in Virginia saw a decrease in home sales in the second quarter of 2011 compared to the second quarter a year ago.

The two largest metro areas in the state took the biggest losses in the pace of home sales:

Northern Virginia declined 17% and the Greater Richmond area declined 18%.

One notable exception: Southwest Virginia showed a significant increase in home sales — up almost 10% from 2010.

Regional changes in unit sales: 2010-Q2 vs. 2011-Q2

Regional Changes in Sales 2010-Q2 vs. 2011-Q2 Units

Northern Virginia -16.8% Central Valley -14.6%

Greater Richmond -17.8% Roanoke / Lynchburg / Blacksburg -12.5% Southwest Virginia +9.8%

Southside Virginia -9.2%

Hampton Roads / Chesapeake Bay -14.2%

New home sales report!

Check out the new Virginia Home Sales Report — redesigned to include colorful graphs, regional breakdowns, and brief, easily understood commentary.

How can you use it? Here are some ideas: • Send the market report to your clients and sphere of influence to give them a context for the housing market across the state. Ask them to contact you for updated market statistics for your local area.

• Send the market report to local lenders, home builders, financial planners, attorneys, and bankers

8

JULY/AUGUST 2011

to establish yourself as a source of reliable housing market data.

• Post the market report to your Web site, Facebook, Google+, or Twitter to reinforce your credentials as a housing expert.

• Print selected pages of the market report to take along to appointments with clients. While local market conditions will likely be more pertinent than statewide data, the information will still be helpful to and appreciated by your clients.

WWW.VAREALTOR.COM

WHAT MAKES A CENTURY 21 AGENT? SWAGGER STRAiGHT oUT of THE old WEST CoMbiNEd WiTH THE dRivE of A Gold-MEdAl-WiNNiNG GYMNAST. PlUS SMARTS. ElECTRiC CAR SMARTS, NoT PAPER-CUT SMARTS. bECAUSE THAT’S No Good AT All. CENTURY 21 AGENTS. SMARTER. boldER. fASTER. ®

C21.CoM © 2011 CENTURY 21 REAL ESTATE LLC. ALL RIGHTS RESERVED. CENTURY 21® IS A REGISTERED TRADEMARK OWNED BY CENTURY 21 REAL ESTATE LLC. AN EQUAL OPPORTUNITY COMPANY. EQUAL HOUSING OPPORTUNITY. EACH OFFICE IS INDEPENDENTLY OWNED AND OPERATED.

legallines BRYAN LYTLE

When worlds collide

Q:

Who signs?

A: There are two types of seller situations that give

agents fits about who is to sign the contract: estates and divorces. Quite often these result in the listing agent either having the wrong parties sign, or having last-minute crises near closing.

In Virginia, when the owner of property dies, absent a survivorship provision in the deed, that property is transferred in one of two ways: by will or by intestate succession (no will).

If there is a will, then the will must be recorded in the land records in order to transfer title to the persons named in the will (called devisees). If there is no will, then a list of heirs (at a minimum) must be prepared and recorded in order to vest title in those heirs. Determining the heirs by intestate succession requires an attorney because it is not always who one might think.

In my experience, one of the children, or someone in a similar capacity, goes to an agent and says “I am the heir” or “I am the executor” and wants to sell the property. Rarely does the agent actually determine if that is in fact true, and in many cases it is not true. (For example, the “executor” may not have actually qualified, may not have the power to sell the real estate, there may be step-children with an interest, etc.).

In far too many cases the documentation necessary to vest title has not been recorded, and the day before 10 July/August 2011

closing is too late to get it done. So whenever you consider taking an estate listing, you must have the prospective clients contact an attorney early in the process to ensure your clients actually have authority to sign your listing and sell the property, and to make sure that the documentation will be ready at any subsequent closing.

With respect to divorces, typically what happens is one of the parties says “I got the house in the divorce and I want to sell it.” That may be true, and usually is, but the problem is that most divorce attorneys are not familiar with real estate and do not prepare a deed to properly vest title in the spouse who got the property in the divorce. In other words, the divorce decree or separation agreement may say that your prospective client got the house, but that divorce decree and/or separation agreement does not vest title in your client — there must be a deed from the ex-spouse.

What happens? You get near closing only to find out that that divorce deed was never prepared and executed and you have to hunt down the ex-spouse in order to obtain a deed. I don’t think it would surprise you that many ex-spouses are not very cooperative — especially if they got burned in the divorce and lost the house.

The solution is simple: Whenever anyone, including a prospective client who recently got divorced, asks you to list their house, you should ask for a copy of their deed. Unless a lawyer tells you differently, every person listed on that deed must sign your listing and any subsequent contract.

If they do not have a deed, then ask your favorite settlement agent to get you a copy from the clerk’s office. If no one can provide you with a deed with just your prospective seller’s name(s), that should tell you there is a problem, and you should have your prospective client consult an attorney as soon as possible.

As always, if you are in any doubt about a prospective client’s ability to sign, or how they sign, then the time to ask an attorney or your broker is sooner rather than later. Remember, it would be both a Real Estate Board and Code of Ethics violation for you to list property for sale where you do not have the authorization and consent of all of the owners. www.VARealtor.com

Bad Fences, Bad Neighbors

Q:

Does a listing agent have a duty to disclose that his seller’s fence encroaches on the neighbor’s lot?

A: Oh, those pesky, nosy, neighbors.

Imagine this: A neighbor makes a point of contacting the listing agent during the listing to advise the agent that his client’s fence encroaches on the neighbor’s lot.

While there was some disagreement, the neighbor’s recollection was that she had agreed with the seller to have the encroachment resolved if either one of them sold their property. The listing agent, aware that the buyer was obtaining a survey, and uncertain whether the fence encroached and to what extent, decided to wait and see what the buyer’s survey showed.

The buyer’s survey said nothing about an encroachment. The transaction closed without incident. But after closing, the furious neighbor contacted the listing agent’s broker and threatened a complaint on the grounds that the listing agent had a duty to disclose the encroachment to the buyer.

Did she? As always, we look to Va. Code § 54.1-2131(B) regarding a listing agent’s duty to disclose to a prospective buyer: A licensee engaged by a seller shall disclose to prospective buyers all material adverse facts pertaining to the physical condition of the property which are actually known by the licensee. As used in this section, the term “physical condition Volume 18 ● Issue 4

of the property” shall refer to the physical condition of the land and any improvements thereon, and shall not refer to: (i) matters outside the boundaries of the land or relating to adjacent or other properties in proximity thereto, (ii) matters relating to governmental land use regulations, and (iii) matters relating to highways or public streets.

Let’s assume for the moment that the encroachment was material and adverse. Whether it constituted a “fact” actually known by the listing agent, strictly based on a neighbor’s comments, is questionable, but let’s assume it was. The question in my mind is whether a fence encroachment is something that “pertains to the physical condition of the property.”

It seems to me that “physical condition” literally pertains to the

The term “physical condition of the property” shall refer to the physical condition of the land and any improvements...

Legal Hotline: Why brokers only?

The Legal Hotline is one of the most highlyrated services we provide at VAR, and we encourage all eligible members to use it as often as they need it. However, this service is limited to the principal broker and one designee, mainly because we encourage agents to go to their brokers first. After all, principal brokers are accountable for the actions of their agents and need to be informed of any pending legal issues.

So agents, if you have a legal issue please go to your broker.

Brokers, if you don’t know the answer, call the Legal Hotline — we would love to help!

Also note that our Legal Resources Center at www.VARealtor. com/legalresources contains a wealth of legal information that is available to all members.

July/August 2011 11

legallines

NEW NUMBER!

VAR Legal Hotline (804) 622-7955 Monday through Friday, 10 a.m. – 4 p.m.

The VAR Legal Hotline is a free, members-only benefit for brokers.

You can receive answers to questions about Virginia real estate law, and timely information on legal and regulatory issues concerning the real estate industry.

The Legal Hotline provides legal information, not legal services. You should consult your attorney if you need representation or advice.

You must register for the Hotline before you can call. Registration is free and quick. Go to www.VARealtor.com/legalhotline; you will need your NRDS ID number.

Who can use the Hotline?

condition of the property (land and any improvements) not its location.

In other words, the fence was not in bad shape, it was not falling down, so I do not believe it meets either the spirit or intent, much less the technical wording, of the disclosure statute. An encroachment is more (if not entirely) a title problem than a physical condition, and agents are not obligated to make title disclosures.

Perhaps this is an issue upon which reasonable people, including the Virginia Real Estate Board, might differ. In close cases, the best course of action is to discuss the matter with your client and seek permission to disclose, because in almost all cases it will be in the client’s best interest to make the disclosure anyway — deal with it early and avoid lawsuits later. Should your client forbid you to make the disclosure then seek the advice of your broker and company counsel for a determination.

There is a lesson in most disclosure cases. In this case the broker intervened with the neighbor, calmed everyone down, obtained the buyer’s survey (it turns out the encroachment is very minor), talked to the seller, and it seems likely that a solution will be reached that satisfies everyone involved. Addressing client and third-party concerns is always the best course of action, because it’s when people feel ignored that complaints and lawsuits ensue. ●

Bryan lytle has been a Virginia lawyer for 27 years, as well as a settlement agent and VReBlicensed instructor. you can see Bryan live at the Real show, where he’ll be teaching courses on “Agents in Jeopardy” and “Reos: Addenda, Practice & Procedure.”

Register at REalShow2011.com.

12 July/August 2011

• You must be a principal or supervising broker.* • You must be a VAR member.

• You must have registered for the Hotline (see above).

• You must have your NRDS ID number available when you call. (* Each office can have one other person designated by the principal broker for Hotline access.)

E-mailing the Hotline You can e-mail your questions to hotline@ VARealtor.com.

• Responses will be by phone; we no longer provide written answers to Hotline questions.

• You must include your full name, phone number, and NRDS ID. We cannot respond to messages that do not include all three.

• We will try to respond within 24 hours, but response time depends on Hotline activity.

Not a broker or member?

If you aren’t eligible to use the Hotline, you can browse and search our Hotline archives at www.VARealtor.com/hotlinearchive and find more legal and risk management information in VAR’s Legal Resources Center at www.

VARealtor.com/legalresources.

You will need your NRDS ID number to log into the site.

Questions?

If you have questions about the Hotline, contact VAR at (800) 755-8271 or (804) 264-5033, or by e-mail at info@VARealtor.com The VAR Legal Hotline should not replace your own legal counsel. We will not answer questions on matters unrelated to real estatewww.VAReAltoR.com or real estate brokerage, nor can we help with pending arbitrations.

VirginiaHousingSearch.com

lifelessons MELANIE MCLANE

You can’t make this stuff up AS A PRACTICING appraiser, I occasionally do review work. One of the worst reviews I ever did was of an appraisal that turned out to be fraudulent from beginning to end. It started badly, and got worse.

I received the entire report by e-mail, printed it out, and then found and brought up the picture of the house and the tax card information via the county website. To begin with, the photos of the house in the appraisal did not look anything like the photos of the house on the county site. Giving the appraiser the benefit of the doubt (courthouses make errors too) I continued the review.

The tax parcel number was wrong; the census tract number was wrong; the flood map number was wrong.

One or two errors, sure — but really? All those numbers wrong?

The comps looked great — until I tried to find them.

This was a “field review,” which meant I went out into the field and inspected the subject and the comps from the street. First of all, guess what? The courthouse photos of the subject were correct! The photos in the report of the “subject property” — well, they were of someone’s house — just not this owner’s.

Then I began looking for the comparables.

Although there were real photos of real houses, they simply did not exist — not here, anyway. One comp, for example, was supposedly located in the 2700 block of a street ... which dead-ended in the 2400 block.

I could find none of the comps anywhere where the appraiser said they were.

It was a shame, because the appraisal “came in” beautifully — very few net and gross adjustments, very tight range of value. Of course, I realized as I was reviewing it, if you can make up the facts as you go along, it’s easy to get the value you want. This appraiser had “appraised” this house so it had doubled in value in just 12 months — very unlikely in my market area.

At the end of my review, morbid curiosity overcame me. Usually, when I receive a review, the original appraiser’s name is redacted from the report, so I don’t know who I’m reviewing. In this case, because the 14 JULY/AUGUST 2011

appraisal had been sent via a PDF file, I could see both the name and the license number.

With that information in hand, I went first to the appraisal board website where I saw the following notation: “This license has been permanently revoked.” Permanently revoked is as bad as it gets from a licensing board. It is beyond suspension, beyond “maybe we’ll give it back to you in a year or so.” It is gone for good. I then Googled the name of the appraiser. Lo and behold, he was doing time in the state penitentiary for fraud.

Moral: Whatever the fee he received for that fraudulent appraisal, it certainly wasn’t worth what it cost him — his license and his freedom! ●

Melanie J. McLane, ABR, CDEI, CRB, CRS, ePRO, GREEN, GRI, RAA, RSPS, SRES, SRS is a practicing real estate appraiser, broker, consultant, and educator, and former owner of a brokerage.

You can see Melanie live at the REal Show — she’ll be teaching courses on “Pricing in a Competitive Market” and “Relocation: Best Practices.”

Register at REalShow2011.com.

WWW.VAREALTOR.COM

Big difference.

Realtors® who hold a designation like GRI typically earn more than twice as much as those who don’t. All it takes is 12 classes — and a commitment to your career.

GRI: Your first next step.

It’s time to get serious. Go to VARealtor.com/GRI

Another great member service brought to you by the Virginia Association of REALTORS®

formfactor BLAKE HEGEMAN

VAR Form 600: Residential Contract of Purchase VAR recently updated its purchase contract, changing the language in section 18 to reflect a largely administrative change in the law. (See highlighted area below.) Residential purchase contracts for four or fewer dwelling units must include the reworded disclosure below in at least a 10-point, boldface font. (This disclosure language is similar to the original CRESPA language.)

Deposit shall be returned to Purchaser, and Purchaser and Seller shall have no further obligations hereunder, or (ii) waive the defect and proceed to settlement with no adjustments to the Purchase Price.

16. SELLER’S AND PURCHASER’S OPTION: In the event that the total cost of fulfilling Seller’s obligations set forth in paragraphs 13, 14 (c), and 15 above exceed $_____________________ in the aggregate (the “Remediation Limit”), Seller TORS® OF REALfully TION obligations shall have the option (i) fulfill at Seller’s expense, or (ii) to pay or credit the Remediation Limit CIASeller’s IA AStoSO RCHASE nt advice before signing.)

GIN PUamount.

VIRand OFthat to Purchaser refuse toLpay any over If Seller RACT pete elects option (ii), Purchaser shall have the right to either NTexcess CO seek com it, please of which SIDENinTIA part any accept theRE Property its present condition (in case the Seller shall pay or credit the Remediation nd __ Limit to Purchaser at ersta ____________ you do not und . Ifto _________ ing contractor is in the space in this settlement), terminate this Contract and receivebetw a refund the___ Deposit.

If no amount is entered bind een ___of___ whose address _, (This is a legally 20_______ one or more),Limit ___,amount paragraph, the parties agree that shall be $1,000.

The is___ independent of any obligations therRemediation ___the whe __,and ” ___ ller, ___ ___ “Se ___ ___ the of as __( _________ , to this Contract, or ASEtomad ______ agreed byeSeller in connection with an ___ inspection of the Property pursuant to a separate addendum ______ CT OF PURCH ________________________ (the “Purchaser” ____________ ___ of ___ ___right ___ ___ ___ This CONTRA _________ ___ : ___ ___ provision other than contained in paragraphs 13, 14 (c) and 15, dealing with the Purchaser to conduct an inspection of ___ ides ___ ___ ____________ _______, prov ____________ ___ ___ ___ ___ ___ ___ ___ ___ ___ ____________ the___ Property. ________ ____________ ____________ ____________ ____________ ____________ ____________ ____________ and the ____________ ____________ ____________ __ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ is ___ _________ ____________ __ PURCHASER’S INSPECTION: Purchaser may have ___ a professional home inspection at Purchaser’s se address ____________ ___performed whoHOME more),17. ____________ ____________ er) is _________ ts Sell ______ _________ whether one or represenby one or more qualified inspectors.

Purchaser WAIVES _____ OR DESIRES _____ _____. a professional home _________ _________ ___ pany (whoexpense ____________ ____________ _________desires ______ The Listing Com _________ ser) is ___ _________ ______ inspection.

If Purchaser contingency, see ___ attached home inspection addendum or separate provision of chainspection esent Puran ______ ___ repr ___ ___ __ ___ ___ not ___ s ___ ___ r doe ______ Contract. s __o in the y (who doethis ____________ thereon located Selling Compan ________________________ improvements tion): ___ the land and all as (legal descrip _ cribedSETTLEMENT ____________ and desAND er agrees to sell ___ 18. NOTICE TO PURCHASER REGARDING SETTLEMENT AGENT SERVICES: Choice of es to buy and Sell __________________, Virginia ________________________ agre ser cha _ the purchaser or Pur : of ___ Title 55___ of the Code of Virginia provides Settlement Agent: Chapter 27.3 (§ 55-525.16 et seq.)___ ___ ______that ___ PERTY ______ ______ ___ PRO ___ ___ ___ AL ___ ___ ___ RE ___ ___ ___ ___ 1. ___ _ settlement agent's ___ ___settlement ______ has the right borrower to select the agent to___ hand handle the closing of this transaction.

The ______ ______ of ___ ______ ___ ___ City ___ ___ ___ or ___ ___ ___ nty ___ ___ Cou ___ ___ ______ _ ______ ___ ___functions _________ of ___ numerous administrative and clerical relating to role in___ closing this transaction involves the coordination ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ______ ______ _________ _________ _ the terms of the ______ the___ collection of documents and collection and disbursement of___ funds required to carry out ___the ______ _________ ______ _________ ____________ ____________ ______ ____________ ___ ___ ___ ___ ___ ___ _ will instruct the ___ ___ ___ ___ ___ the lender for the purchaser contract between the parties.

If part of the purchase price is financed, ___ ______ ____________ ____________ ____________ ___ ___ ___ ____________ ___ ___ ___ ___ ___ ___ __loan proceeds. No ___ ______ and the disbursement ______ settlement agent as ___ to the signing and recording of loan ___ documents ______of ______ ___ ______ ____________ ____________ ___can ____________ ___any ______to tract),who is engaged in ___advice except a settlement agent agent provide___ legal party to the transaction ____________ ____________ ___settlement of this Con ____________ ____________ ____________ the of the date ______ r ______ doo ______and or as engaged by a party togethe transaction for the private practice___ of ___ law___ in ___ Virginia who has been retained (if present _________ located thereon dishwasher, door knockers, gara ures, ____________ purpose ______ legal ures as:providing fixt wn all kno The provisions of Chapter 27.3 (§ 55of services to that party.

Variation by agreement: fixt ly t __, together with brackets, built-in d mirrors, ligh and more common525.16 alleagreement, ______ s and s ___seq.) rodof gs, instby dowconferred erin of Title 55fans of, the Code Virginia may varied and rights by this curtain m win _________et l covbe stor walnot s, ing and ctor ceil r dete ds, t floo ____________ chapter d blin hea n, not be waived. inse installe ofkea and particular settlement agent a condition of the seller may not require the use smo r withasthe out limitatiomay tters,us and Therts, rs (togethe including, with sales,ofgas en doo and trees, shu place logsEscrow, ts settlement rior plan ens and screThe and service Virginia State Bar issues guidelines to thefire property. closing, trol screguidelines: window es, shrubs, exte openers and con help nna(e), range, shad on antethe settlement agents avoid andvisi prevent unauthorized practice of law in connection with furnishing escrow, t, built-in ers, tele le cov ). ptac mailbox and pos settlement rty” rece ope : and “Pr sale or closing services. party to a real estate tran transaction, the purchaser dor borrower 2, athe rs, switch graphAs in this is entitled to receive a and storm doo copy of ribed in para descguidelines are include request, with the provisions from his settleme settlement agent, upon ______of_ Chapter 27.3 (§ l propertythese propertiny accordance ____________ items of persona of personal itemsof Virginia. ____ ____________ 55owi ofng the Code 55-525.16 et seq.) of Title ___ ___ ___ ___ ___ ___ foll _________ ____________ TY: The ____ ____________ AL PROPER ________________________ ____________ ____________ _________ 2. PERSON 19. ___ _ ___permits _________ ___Virginia _________ LIEN___ ______ law (Section 43-1___ et___ seq.) persons who performed labor or MECHANICS NOTICE: ___have _________(a) ____________ ____________ ____________ ___ _________ _________ ______material furnished for___ the___ construction, repair ___ or improvement any building or structure to ___ file _a lien against the ___ ______ _________of___ _________removal, ___ ___ ___ ___ ___ ___ ____________ ___ ___ ___ ______ _ later than the ______ ___not ______ ___time ______This ___ Property. lien may be filed at any after the work is commenced or the material is furnished, but ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ______ ______ ______ ___ _________ ___ ___ _ ___ ___ ___ ___ ___ ___ ___ ___ earlier of (i) 90 days from the last day of the month in which the lienor last performed work or furnished materials or (ii) 90 ___ ___ ___ ___ ___ ___ _________ _________ _________ ____________ ______ _________AN ______ is ___ terminated.

EFFECTIVE LIEN FOR WORK days from the___ time the ___ construction, removal or im improvement ______ ____________ _________ ____________ _________ ____________ MAY BE FILED AFTER SETTLEMENT. ___SETTLEMENT ___ LEGAL COUNSEL PERFORMED TO___ THE ______OF ____________ PRIOR ___DATE _________ ___ ___ ___ ___ ___ ____________ ______ ______ an affidavit, ___ ___), acceptable to Purchaser at___ settlement on ___ a form SHOULD CONSULTED. (b) Seller shall deliver _________BE _________ ___to___ ____________ ____________ ___been is ______ ns within the Propert ($________ or materials have furnishedthe to pro theratio Property Purchaser’s lender, ifseapplicable, byy Seller that no labor rs thesigned cha Price of ________Dolla ck or wired funds subject to Purfor period the filing of mechanics’ or materialmens’ ____________ PRICE: The che against the Property. If labor or materials have been SE statutory certified liens or ____________ s ___ ier’ 3. PURCHA furnished ___ cash ___ statutory Seller shall deliver to Purchaser an affidavit signed by Seller and the person(s) ______ during the lem cash or by in period, ent ____________ sett at g ( ): a furnishing theerlabor or materials that : the costs thereof have been paid. paid to Sell ( ) or assumin which shall be following sources ser’s obtaining (describe) in and from the ent on Purcha ), or other described here is contingthat ( s sale represents of trust lien unit subject VHDA 20. VIRGINIA CONDOMINUM the),Property is _____ or isby nota _____ a dcondominium ACT: : ThiSeller first dee ( FIRST TRUST red VA TY secu ), PAR loan (the “Condominium ___% ofIfthe ( to IRD Virginia Condominium 55-79.39 et seq.___ of ___ the ___ Code the Property is ___of_)Virginia FHASection ), Act, ( ) (a) TH _____, or ___ Act”). ______from an ____________ Act requires ______ ___Condominium rate withassociation ___ ventiontoal the( Condominium subject Act, Seller to obtain the unit owner’s (the ___the con ____________ at an adjustable ____________ __% shall be $ ___it___ year, orcontained of per % unt ing ___ ____________ The information in the resale certificate “Association”) a resale certificate and provide to Purchaser. eed ___ amo (___ l exc ___ ing loan not the principa of the not exceed ya in and pert rate term rs, d Pro yea the fixe may cancel this Contract (i) within three (3) days after the current as of date specified on the resale certificate.

Purchaser ser t the ng __ a on m rate duri interest at a term of ___ imu r ring max ove bea a e ion ed and Pric mpt rtiz r se this Contract, if ___ yea amo chaof on or before the date Purchaser executed date Purchaser received the resale of certificate an assu this Contract, (ii) Pur __% per settlement, ination fee, or eeding time orig excdays of asix (6) days not(3) at the restresale ng a loan is mption al rate resale hand delivered, or (iii) within within three after receiving the certificate if the inte ludicertificate assu initi of exc the ts, rate for poin s ket t vide oun disc t promail. to be or at the mar untcancellation r, postmark contrac ___ loan is Purchaser by United States Written notice shall afteryea the date if the lresale certificate sent to___ this l amoof per of ___ principa a tota the ___ ___. (If ___return and that me all the resale not more than ______ l assu iring delivered mail, receipt requested, toeSeller.

Purchaser’s shal right to receive be hand or sent by United States approximat ______ requ forth above is $___________ (ii) Purchaser nce setconclusively eeding ent, and not excand certificate to cancel this Contract waived if not exercised before settlement. Purchaser shall have the settlem fee e that thearebala ledg date of the now on ack ies nce part principal bala loan: (i) the the outstanding .) by a will beREV. med 600 loan VAR assu FORM 5/11 6 of 9 g a loan secured Page of Seller under such chaser’s obtainin l amount obligations of tingent on Pur principa the s sale is also con perty in D TRUST: Thi Pro ON the SEC TY on IRD PAR lien Page 1 of 9 trust ( ) (b) TH of deed second

Section 18

600 VAR FORM

REV. 5/11

NOTICE TO PURCHASER REGARDING SETTLEMENT AGENT AND SETTLEMENT SERVICES: Choice of Settlement Agent: Chapter 27.3 (§ 55-525.16 et seq.) of Title 55 of the Code of Virginia provides that the purchaser or borrower has the right to select the settlement agent to handle the closing of this transaction. The settlement agent’s role in closing this transaction involves the coordination of numerous administrative and clerical functions relating to the collection of documents and the collection and disbursement of funds required to carry out the terms of the contract between the parties. If part of the purchase price is financed, the lender for the purchaser will instruct the settlement agent as to the signing and recording of loan documents and the disbursement of loan proceeds. No settlement agent can provide legal advice to any party to the transaction except a settlement agent who is engaged in the

private practice of law in Virginia and who has been retained or engaged by a party to the transaction for the purpose of providing legal services to that party. Variation by agreement: The provisions of Chapter 27.3 (§ 55-525.16 et seq.) of Title 55 of the Code of Virginia may not be varied by agreement, and rights conferred by this chapter may not be waived. The seller may not require the use of a particular settlement agent as a condition of the sale of the property.

Escrow, closing, and settlement service guidelines: The Virginia State Bar issues guidelines to help settlement agents avoid and prevent the unauthorized practice of law in connection with furnishing escrow, settlement or closing services. As a party to a real estate transaction, the purchaser or borrower is entitled to receive a copy of these guidelines from his settlement agent, upon request, in accordance with the provisions of Chapter 27.3 (§ 55-525.16 et seq.) of Title 55 of the Code of Virginia.

Forms — they’re the bread and butter of a deal. They’re full of fine print and legalese, and not everyone “gets” the details. And that often ends up as a call to our Legal Hotline. (Shameless plug: (804) 622-7955.) So we asked our intrepid legal counsel (read: lawyer), Blake Hegeman, to take one of the forms the Hotline gets the most questions about and illuminate it for us. They’re all available, free for download, at www.VARealtor.com/standardforms.

16 JULY/AUGUST 2011

WWW.VAREALTOR.COM

Feeling lucky?

Don’t take a chance with your real estate license. If you aren’t sure, visit VAR’s Legal Hotline archive. It can help you figure out what’s a smart move — and what isn’t.

www.VARealtor.com/LegalHotline

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Who goes

18 July/August 2011

www.VARealtor.com

there?

By Robert Hahn

There’s a controversy bubbling at NAR that may well determine the future of the real estate business in America.

That’s not an exaggeration. In one sense, the debate is about who should be allowed access to property listings. But the bigger issue is about the very way real estate will be listed and sold in the United States in the 21st century.

Volume 18 ● Issue 4

July/August 2011 19

The issue — called “Franchise IDX” — is chock full of technical jargon and legalese. But at its heart it’s simple: Who should have access to the data in an MLS? You might be tempted to say, “As many people as possible! I want my listings everywhere!” You wouldn’t be alone. As we’ll see in a moment, opening listing data to the world can bring millions of eyeballs to your clients’ properties.

Or you might be tempted to say, “You want access to the MLS? Then you need to contribute to it. It’s a twoway street.” You wouldn’t be alone.

That’s where we are today; a solid and established marketplace among peers.

But is it a 19th century system in a st 21 century world?

First, a quick step back to MLS 101.

All for one… mostly Real estate is a rare beast, in that competitors need to cooperate to get a deal done. The precursor to today’s Multiple Listing Services emerged in the 1800s as real estate brokers began formalizing the way they worked

together. A central, official place where property was sold and commissions were spelled out was an obvious first step for these nascent associations.

That’s the critical issue: The MLS is a business cooperative. Whether in its old paper form or as an online database, it’s a place where brokers share listings as equals. Everyone contributes to the market, and everyone benefits from the centralized listing and the clear legal environment that comes with it.

So when you create a listing and your broker adds it to your local MLS, you’re essentially asking other members to help you sell your client’s home. Members pay MLS fees and contribute to the MLS community by adding their listings and helping sell other brokers’.

It’s a potluck dinner where everyone brings a dish — in this case, the “dishes” are listings you’re all working together to sell. Having access to the MLS is how you keep from going hungry; it’s a privilege you pay for with your dues and your listings.

Or is it?

The sides Rescind the Franchise IDX rule (only allow MLS members access to data)

Keep the Franchise IDX rule (allow MLS members’ franchisors access to data)

• Realty Alliance • Leading Real Estate Companies of the World • HomeServices of America

• Keller Williams • Realogy • Other large franchises

The MLS is about working with customers; it’s not a tool for attracting them. The data belong to brokers as part of an agreement between peers.

The purpose of the MLS has expanded, and now includes helping its participant members reach consumers.

20 July/August 2011

www.VARealtor.com

Brokers and their firms have guarded the data in the MLSs carefully. Non-members don’t get access, period.

Sort of.

Share — and share alike?

Enter the Internet and the data explosion that began in the late 1990s.

Suddenly, not only was information easier for everyone to share, we all learned to expect to do just that — either legally (Wikipedia) or illegally (music piracy). There was nothing we couldn’t access, from county records to Hubble Space Telescope images.

And then there were the MLSs, with their siloed, locked-away data — valuable business data that were only available on a closed system.

That was becoming unusual in an age where every business (and, heck, every middle-school student) had a website.

Not surprisingly, brokers wanted to be able to display their listings on their websites, and maybe let other brokers also display those listings — that’s the ‘cooperative competitors’ concept that sets real estate apart. But could John Doe Realty take Jane Smith Realty’s listings out of the MLS and show them on johndoerealty.com? After all, that would help Jane Smith (by selling her listings) and John Doe (by making it easier for his clients to see properties for sale).

The MLS guidelines weren’t clear, so in 2002 NAR, which sets the rules that most MLSs follow, amended its policy governing the use of listing data.

Called IDX (Internet Data Exchange) it spelled out how and when one broker’s listing may be displayed on another broker’s website, and under what limitations and requirements.

Now John and Jane (both MLS Volume 18 ● Issue 4

participants) knew what they could extract from the MLS and put on their websites.

But then came the search engines, which automatically “crawled” those sites and made them searchable.

Suddenly Jane Smith’s listings went from johndoerealty.com to AltaVista, Yahoo, and Google. The search engines were reaping the benefit of MLS data without contributing to it or even being participants.

So in 2005, NAR began requiring brokers to “protect” the data on their websites from those crawling search engines. It was for MLS members’ use only, you see.

And then the government entered the fray.

Warning shot In 2005, the Justice Department looked at the MLS model and alleged that it was stifling competition — it didn’t seem right that the only way for a consumer to get access to the vast majority of properties for sale was through (for the most part) a Realtor® who had MLS access. The MLS system, it said, was effectively a monopoly. The federal government sued NAR. NAR rebutted that the MLS had nothing to do with consumers (who had a lot of competing Realtors® to choose from); it was strictly a businessto-business network — “a cooperative that … is created and operated, and its inventory provided by, the very members it serves,” as then-NAR president Pat Combs put it in her testimony to Congress.

She went on to say: Real estate reform advocates maintain that the MLS is a necessary utility, and as such, should be available to the public for use. As indicated July/August 2011 21

above, the MLS is a cooperative that not only operates for the use and benefit of its members in serving their clients and customers, but it is created and operated, and its inventory provided by, the very members it serves. That distinguishes it from public utilities like water, gas or electricity, which are not created and operated by their customers, members of the public.

MLS users are participants, not members. The difference is critical.

Geoffrey Lewis of RE/MAX also testified in 2006, saying in part, “The idea [of the MLS] was that cooperating brokers and agents would work to earn their own customers using their own assets and then share listings via the MLS.” NAR settled the suit. It allowed

A Brief History: How Franchise IDX Came to Be

some MLS data to be used on websites outside the MLS system. But at its core, the MLS remained a membercontrolled, member-only, business-tobusiness tool.

Meanwhile, though, consumers were turning to AOL and Google and Yahoo to look for real estate. Brokers began to want their listings to be indexed.

Maybe Google wasn’t contributing listings to the MLSs, but it made up for that in millions of eyeballs.

So in November 2009, NAR loosened its IDX policy a little more, allowing brokers to open their websites — and the listings they contained — to “recognized search engines.”

But what was a “recognized search engine”? Although NAR had said it was referring to general search sites, vague definitions like that invite, shall we say, differing interpretations.

2000:

2002:

2005:

the concept of “data

(Internet Data Exchange)

requiring that IDX par-

exchange” amongst

Policy, which governs how

ticipants “protect” the IDX

Realtors, as the Internet

and when a broker’s listing

listing data.

grows in importance as

data may be displayed on

a consumer advertising

another broker’s website,

medium.

and under what limitations

NAR begins to develop

NAR adopts the IDX

NAR adds a provision

and requirements.

22 July/August 2011

www.VARealtor.com

Large national franchises argued that they, too, should be allowed to index brokers’ sites — and the IDX data they contained — just like “recognized search engines.”

At NAR’s 2010 midyear conference, Realogy and other large franchises formally proposed just that. They wanted the IDX policy — the rules governing who is allowed access to MLS data — to be changed so they could have access, just like Ask, Bing, Google, Yahoo, and their kin.

The fuse was lit.

Let’s try this At its annual meeting in November 2010, after several months of meetings and debate, NAR adopted a version of the large franchises’ proposal, dubbed “Franchise IDX.” It got around the issue of MLS membership in a neat

way: Essentially, it said that if any individual franchisee (e.g., KellerWilliams Anytown) is a member of an MLS, the national franchise has the right to use the listings from that MLS, with the proviso that clicking a link would send consumers to the local brokerage’s website.

So if Keller-Williams Anytown is a member of the Anytown MLS, the Keller-Williams national website could display all the listings from the Anytown MLS, as long as clicking a listing sent consumers to the local Keller-Williams Anytown website.

The practical effect is that the national franchise websites, such as Century21.com, ColdwellBanker. com, KellerWilliams.com, etc., would become portals for real estate listings, much like Realtor.com, Zillow, and others.

2006:

2009:

2010:

2011:

Department of Justice anti-

Engine IDX” policy, allow-

Meetings, Realogy and

Real Estate Companies of

trust lawsuit against NAR,

ing “recognized search

other large franchises

the World (“LeadingRE”),

NAR President Pat Combs

engines” to index IDX

propose at that they too

and HomeServices of

testifies before Congress

listings, even though this

be allowed to index IDX

America all send letters ask-

that the MLS is not a public

essentially allows MLSs to

listings under certain limita-

ing for the Franchise IDX

utility because it is a private

ignore the 2005 policy to

tions. The issue is debated,

rule to be rescinded. After

network limited only to

protect IDX data.

sent to a working group,

long debate and discussion,

discussed for months. At

NAR amends the policy to

the November Annual

require that brokers opt in

Conference the

to having their data shared

“Franchise IDX”

with franchises.

At the height of the

participants.

NAR adopts the “Search

At NAR’s Midyear

Realty Alliance, Leading

policy is adopted.

Volume 18 ● Issue 4

July/August 2011 23

After a week of politics, meetings, discussion, and arguments, the NAR Board of Directors decided to keep the Franchise IDX rule alive, but it agreed to a significant change.

That didn’t sit well with independent brokerages and marketing companies.

At NAR’s 2011 Midyear Meetings this past May, Realty Alliance, Leading Real Estate Companies of the World (“LeadingRE”), and HomeServices of America — three major consortia of independent brokerages — asked NAR to reverse its decision and rescind the Franchise IDX rule. They made three main arguments for repeal: 1. T he wide reach of those franchises would mean they would get an unfair advantage over smaller companies — why would consumers go to YourLocalRealty.com when Century21.com loomed so much larger?.

2. M any states have laws that Franchise IDX might violate — laws involving copyright, or that confer certain liabilities on brokers for their data. Would brokers be caught between state law and NAR policy?

3. The Franchise IDX policy reverses more than 100 years of precedent by making MLS data available to non-participants — organizations that are not “operators” (a term that includes appraisers, mortgage brokers, and others who might use MLS data to “operate” their real-estate related business).

After a week of politics, meetings, discussion, and arguments, the NAR Board of Directors decided to keep the Franchise IDX rule alive, but it agreed

24 July/August 2011

to a significant change: National franchises could still get the MLS data from anywhere they had an office, but brokers at other firms would have to opt into the agreement to have their data shared with those national franchises.

That might seem to be a workable compromise. It wasn’t. Many of the independent, non-franchise marketing networks are still not satisfied because the real issue isn’t about creating giant real estate portals. It’s much bigger.

It’s not what you think On the surface, the dispute may look to be about competition — a fight between major franchises (and their brokers), and non-franchise marketing networks (and their independent brokers). It’s not.

Why not? Because, when NAR was forging the IDX policy, the independent marketing networks were given the opportunity to be treated like national franchises, thus erasing the idea of ‘competitive advantage.’ But they declined because that isn’t the underlying issue.

So, are state laws the issue? That’s a stretch. If any NAR policy conflicted with law, a court challenge would force a change. A judge could simply rule that no broker is bound by Franchise IDX because it conflicts with state law.

So that isn’t the real issue. What is?

The arguments over Franchise IDX are actually about something much more important: the nature and purpose of the MLS. The independent brokerages’ position is that opening the MLS first to search engines and now to franchises undermines the very core of the MLS. It’s not a simple business decision. It’s one that can www.VARealtor.com

MASS CONFUSION If you think the Franchise IDX debate is confusing for end users — Realtors® in the trenches — it’s even worse for MLS administrators who now have to figure out what the heck this new opt-in Franchise IDX means.

Opt-in seems straightforward. It is not.

First, the policy allows brokers to opt-in on a franchise-by-franchise basis — so a broker can choose to allow Keller Williams to see his data, but deny it to Century 21. (Although NAR clarified that MLSs can assume blanket consent “unless the participant expressly limits their consent to a specific franchisor(s).”)

That means it’s up to the MLSs to keep track, which brings up the second issue: How would such an optin mechanism work? NAR says that “No particular method is required for such consents; e-mail or letter simply indicating that a participant is consenting to display of their listings on franchisor site is adequate,”

lead to a complete overhaul of the real estate business. And it’s an overhaul that — keeping the Justice Department in mind — might be out of NAR’s control.

Leave well enough alone Independent brokerages, led by HomeServices, LeadingRE, Realty Alliance, and other networks, see opening the MLS to franchises as the first crack in the dam — and one that could lead to a radical shakeup of the MLS model. After NAR successfully convinced the Justice Department that that the MLS was a B2B tool, why make a U-turn and open it to non-participants?

Joe Horning, a real estate broker and chairman of Realty Alliance Volume 18 ● Issue 4

but how will a quick e-mail hold up in court? Further, it’s still not clear whether agents have the right to opt-in (or refuse to do so), or if only brokers have that authority, or if brokers can grant the option to their agents to opt-in or not.

NAR leaders seemed to think it was a simple matter of delivering opted-in brokers’ data to the franchises.

But what if the franchise, like a search engine, “crawls” the data, much the way Google indexes websites? Is the franchise supposed to police itself and somehow figure out which of the IDX listings it just collected belongs to brokers who have opted in?

And what of MLSs that hitherto have done nothing and provided nothing? Do they now have a duty to provide both an opt-in mechanism for member and data feeds to the franchisors? And who will police the franchisors to be sure they’re only displaying opted-in listings?

Confusion and uncertainty are the bottom line.

— which represents real estate brokerages in the U.S. and Canada — said he was shocked that the policy was adopted. Every broker he’s spoken to, he said, including franchisees, wants the policy rescinded.

“This data is curated by us, it has value, and it brings us liabilities. This policy gives away our data without our consent,” he said. “In no way, shape, or form is a franchisor a participant or a listing broker. There is no offer of cooperation and compensation.

Franchisors bring nothing to the table.

I have yet to hear what [a franchise’s] right to the data is.”

And, explaining the decision to decline being treated like a franchisor with similar access to MLS data, Horning was clear: “Expanding the July/August 2011 25

“It’s a distinction without a difference.”

— Alex Perriello, CEO of Realogy Franchise Group

26 July/August 2011

policy is not the solution; repeal is the only solution.”

He went on. “I see this as a watershed moment. Rescind the policy.

Protect the brokers, the agents, the MLS, and the association.”

In fact, this issue was so important that Bob Moline, president and COO of HomeServices of America — the second largest brokerage group in the country — dropped an absolute bombshell at NAR’s Midyear conference. Moline suggested that if the Franchise IDX policy is not rescinded, HomeServices of America would consider withdrawing from the MLS entirely and creating its own private nationwide MLS. But what of NAR’s split-the-baby solution — keep Franchise IDX but make it opt-in? It makes no difference.

For Horning, Moline, and others of their perspective, it still cracks the dam. It just gives brokers the choice of whether to swing their hammers.

argument: The Internet has not changed the purpose of the MLS, but rather expanded it to include helping members reach consumers. Trying to keep a tight grip on listing data runs contrary to the dynamic of the Internet age.

And the anti-trust issue? From Perriello’s perspective, the government is more likely to see repealing Franchise IDX — which would limit consumer access to data — as anticompetitive. His assumption is that the MLS has at least some duty to provide consumers access to data.

In contrast to those who worry that Franchise IDX will break the existing MLS model, those who favor it see it as a next step in the evolution of the industry. Listings are already everywhere. Putting them on national franchise websites not only benefits listing brokers no matter what the size of their firms, it’s where the industry needs to move.

A different point of view

Possible futures

From the other side of the fence, the goal isn’t protecting the MLS business model so much as bringing it into the 21st century.

Alex Perriello, CEO of Realogy Franchise Group, argued that it was past the time for narrow definitions of MLS “participants.”

“It’s a distinction without a difference,” he said. Google, for example, is no more a participant in the MLS than Coldwell Banker is, yet it and other search engines are allowed access to the data, in part because NAR recognized the increasing value of search.

And that’s at the heart of the pro-Franchise IDX side’s

The two sides of the Franchise IDX debate have core philosophical differences about a fundamental of the industry: What the MLS is and why it exists. How this dispute is resolved will have real and significant consequences and implications for every single broker and agent in the country.

Come November, should NAR decide to keep the Franchise IDX rules as they are, it will mean the MLS is no longer strictly a B2B vehicle created and operated solely for the benefit of its participants. That will make it something closer to a public utility; how the Justice Department will react is anyone’s guess, but the implications for future anti-trust investigations are, to say the least, significant. www.VARealtor.com

Because if anyone can participate — companies like Zillow, national franchises, or individual brokers — many of the IDX rules currently in place (such as prohibition against commingling FSBO listings) may become illegal. It’s hard to argue that someone should be excluded from access if so many others have it.

Furthermore, if Bob Moline’s words are more than an empty threat, solidifying the Franchise IDX policy could bring about the creation of a private MLS (or several) unaffiliated with NAR. And that could mean the exodus of hundreds of thousands of agents from existing MLSs, from NAR, and from state and local associations.

That may not be hyperbole. The companies involved in Realty Alliance and Leading RE are some of the largest and most sophisticated in the industry — Long & Foster, Weichert, and William E. Wood in Virginia, for example.

The impact of their pulling out of the association/MLS structure would be catastrophic just in terms of subscription revenue. And the loss of the MLS as a single source for market listings would, of course, wreak havoc on the industry.

Should Franchise IDX fall in November, however, that wouldn’t change the fact that the desire for broader data sharing hasn’t subsided.

The changes in consumer behavior, and the importance of online marketing of homes for sale, remain.

There’s another issue with repealing Franchise IDX: It might imperil the precedent that allows search engines to index listings. It’s hard to justify barring Century21.com from MLS data while allowing Google, especially under such vague definitions as Volume 18 ● Issue 4

“recognized search engine.” But the importance of search tools such as Google or Bing or Yahoo is obvious.

This is why the current NAR position won’t stand as it is. It doesn’t resolve the underlying issue. Either the MLS is an open, public utility, whose principal beneficiary is the consumer, or the MLS is a business-to-business network for real estate operators. It cannot be both.

So something new will likely emerge — something that is not the MLS, and with its roots in quid pro quo sharing.

Perhaps it’s a “data sharing cooperative” of some sort that intends to become a public utility for consumer access to property data. Perhaps it is a far more robust peer-to-peer syndication platform that sits outside of the B2B limitations of the MLS. The world has changed — the world of real estate and the world of information sharing. It’s a good bet that the MLS will be changing with it.

Changing to what, though, is anyone’s guess. l

July/August 2011 27

CARVING THEIR

TERRITORIES

By Jay DeBoer

The General Assembly has redrawn the state’s districts for the next 10 years.

28 JULY/AUGUST 2011

Every 10 years, following the U.S. Census, the Virginia General Assembly must draw new legislative districts both for itself and for the Commonwealth’s members of Congress. Redistricting for the General Assembly has been completed. Redistricting for Congressional seats began in early June, and is still under discussion. Virginia’s localities must also redistrict their boards of supervisors and town and city council districts and wards.

WWW.VAREALTOR.COM

Redistricting is also customarily a time of great change in the General Assembly, even more so because Virginia is one of the few states that must accomplish redistricting in a year in which General Assembly elections are held. This leaves extremely tight deadlines for action, and compressed nomination processes and campaigns will present challenges for Virginia’s Realtors® as experienced incumbents who have been supportive of Realtor and property-owner issues will retire, or may find themselves running for seats based in new districts.

At press time, the following members have announced their retirements: • Senator Patsy Ticer (D-Alexandria) • Senator Mary Margaret Whipple (D-Arlington) • Senator William Wampler (R-Bristol) • Delegate Watkins Abbitt (I-Appomattox) • Delegate Clay Athey (R-Warren) • Delegate Bill Cleaveland (R-Roanoke) • Delegate Harvey Morgan (R-Gloucester) • Delegate Bud Phillips (D-Dickinson) • Delegate Albert Pollard (D-Lancaster) • Delegate Jim Shuler (D-Montgomery) • Senators Ralph Smith (R-Roanoke Co.) and Fred Quayle (R-Suffolk) have been “redistricted out” of their districts, with new Senate districts created in other parts of the Commonwealth. (Sen. Quayle has announced his retirement.)

• Delegates Paula Miller (D-Norfolk) and Ward Armstrong (D-Henry) have been “redistricted out” of their districts. Delegate Armstrong will move and run in a different district against Delegate Charles Poindexter (R-Franklin).

VOLUME 18 ● ISSUE 4

Based on experience, it’s expected that other members will announce their retirements throughout the coming months, perhaps into August.

To fill the vacancies, nomination fights are ongoing in several places, and primary elections will be held August 23 in up to 10 Senate districts and in eight House districts.

The final slates of candidates for General Assembly elections in 2011 will not be known until that date, leaving a brief campaign season for the general election on November 8, 2011.

For Congress, the plan presented

by House of Delegates Republicans generally protects the 11 incumbent members of Congress, leaving each with a district similar in makeup to the one they currently represent.

The plan presented by Democrats in the State Senate, however, creates a new African-American majority district in the 4th Congressional District, and reduces the African-American population of the 3rd Congressional District to transform that to a minority “influence district.”

While Congressional redistricting is more fraught with the possibility for stalemate between the House and State Senate, those elections won’t be held until 2013, leaving time for compromise and exchange of plan elements.

Historically, when incumbents seek Realtor® support, the results for Realtors® are excellent.

With input from local associations, the RPAC of Virginia Trustees conduct a review of a member’s voting history, campaign statements made on topics of interest to Realtors®, committee and subcommittee membership and leadership, sponsorship of bills Realtors® support, and opposition to bills Realtors® oppose. In the end, we’re

Local options Local associations can always conduct candidate interviews — in fact, VAR encourages this whenever possible.

However, in a year such as this one, it is essential that local associations engage in elections that affect their regions. VAR encourages local associations to begin now and to invite candidates to attend appropriate Realtor® events such as broker meetings, and to schedule interviews with local political-affairs committees.

VAR will help arrange or provide materials or scripts for such events and meetings for local associations on request.

JULY/AUGUST 2011 29

confident that our endorsements reflect what’s best for the real estate industry.

Campaign funding from state RPAC funds will then be available for those candidates who seem to be most supportive of Realtor® positions and goals.

Local associations may also request that funding be provided for candidates in legislative races. In a year with a quick and intense campaign, this could be especially helpful for candidates — and has the effect of multiplying Realtor effectiveness and visibility.

Smith

(See the sidebar “Local options.”)

It’s a busy but exciting time in politics, but there’s a lot at stake, too.

However, with RPAC behind our issues and backing the candidates who support your profession, Realtors are poised to make a profound difference in the makeup of a changing House of Delegates and Senate membership. ● Jay DeBoer is VAR’s vice president for law and policy, and a former member of the Virginia House of Delegates.

Armstrong

Senator Ralph Smith (R-Roanoke Co.) and Del. Ward Armstrong (D-Henry) have been “redistricted out” of their districts.

Miller

30 JULY/AUGUST 2011

Quayle

Delegate Paula Miller (D-Norfolk) and Sen. Fred Quayle (R-Suffolk) have been “redistricted out” of their districts; Sen. Quayle has announced his retirement.

WWW.VAREALTOR.COM

accessibletech Brian Copeland

The technology gap Worried you’re being left behind when it comes to technology? Don’t be.

We’ve got some pretty major misconceptions in the technology world of real estate. In a class I recently taught for NAR, I asked a room of well over 200 to fill in this blank: If you do not have a tech strategy in your business, your business will ___________.

Answers ranged from “die,” “suffer,” and “dwindle” to “crash,” “falter,” and “go down.”

The right answer, in my opinion, is “be just fine.”

Technology is not the end-all/be-all to survival in real estate. While technology makes treading this market’s deep water a lot easier, it cannot rescue your business from sinking into the poor-market abyss. Your business can only be saved by strong and smart pricing, customer service, and referral building.

Technology is a vehicle for processing things more efficiently and quickly. Among other things, it allows connections beyond face-to-face and voice-to-voice.

But some see it as more, and the misconception that technology is the savior of real estate kind has caused a gap to appear between agents. We have a wall that divides the two camps.

One camp says, if you don’t have technology on your side, your business will die. The other camp says it doesn’t have time for all these toys like smartphones, social media, and tablets.

Slowly over the past few years that gap has started to fill in with the people I call the Hugh Jackmans of real estate: Not only can they act, they can sing, dance, speak, and look good while doing it. These triple-threat agents are growing stronger by the year. They understand 1) you must be involved in the Realtor® organization, RPAC, and leadership; 2) you must sell real estate on a profitable level within your market; and, 3) you must embrace the technology tools that streamline those worlds.

Daily, I see more and more Realtors® who are serving their organizations in a whole new way because they understand the gap must close. These are the agents who live and breathe their technology.

This doesn’t mean that technology surrounds everything they do and they shove it down people’s throats.

Volume 18 ● Issue 4

For those who have yet to find enlightenment and become one with their gadgets, the question lingers: What do I do to bridge the gap?

It means they have become so “at one” with their tools, systems, and tech arsenal that it’s now as natural, seamless, and smooth as breathing.

But for those who have yet to find enlightenment and become one with their gadgets, the question lingers: What do I do to bridge the gap? I’d like to share with you the five actions/ideas I think you need to implement/keep in mind as you go through your next few years of real estate.

1. The television remote is no longer new technology. This is one of my most common rebuttals to agents who say they don’t understand technology.

Do you pick up your TV’s remote control and say, July/August 2011 31

accessibletech “Wow, this is an amazing technology. How do I use it?” Absolutely not.

This once-daunting technology is widely adopted and used in almost every household. But I’m certain that in 1960 it was amazing and foreign to some. Some of us act the same way with social media. Social media has moved into many people’s minds as just another way to communicate. So many agents complain, “I don’t have time to do that.” That’s like saying you don’t have time to go to church and meet people or to the park to let your dogs play. Social media — to those who are actualized with it — is just an additional way of life. If you’re not on it now, chances are you shouldn’t be on it. It’s simply not for you.

2. Hunger to learn. In 1996, I took my first Photoshop course. It was only eight hours, far too short to really grasp that software. Now, 15 years later, I still find myself — on a scale of 1 to 10 on Photoshop knowledge — a six. After searching through numerous courses, I could find nothing that gave me what I wanted and needed to know about this cumbersome software. I had to enter the classroom of myself — a classroom that was lonely, filled with errors, and required many late nights. I had the hunger to learn it.

Many of us today expect to walk into a three-hour course, especially in technology, and learn it all. But the reality is more like a weight-loss program. You can spend three hours with the personal trainer and dietitian, but the hours, days, and months you spend alone in the gym and at the refrigerator door is the time that really matters. Find something in the tech world that feeds your passion, then go chase it.

3. Remember tradition. Just as we have learned in Real Estate 101, you must 1) list homes, 2) sell homes, 3) garner referrals, and 4) have top market knowledge.

The same holds true for the tech world. Each of these four basics can be fortified via technology.

If you want to list more homes, learn how a blog can function as free farming. If you want to sell homes and attract more buyers, learn how to create robust neighborhood videos to syndicate everywhere a buyer may be looking. If you need more client or agent-to-agent referrals, dive into Facebook and get in the flow of life with your friends. Finally, if you 32 July/August 2011

Find something in the tech world that feeds your passion, then go chase it. want top market knowledge, a ton of resources exist in Altos Research, Trulia, and even RETechSouth’s website.

Remember, technology doesn’t trump tradition. It only provides an additional framework to continue to do the things you’ve always done.

4. Beware of the next greatest thing. If you’re anything like me, you get at least two sales calls a day.

“I can make you number one on Google!”

“We have a new listing program that’s guaranteed to bring you scores of relos!”

“We have buyers in your market place that need agents. For only $x/month you can get these leads!”

The list goes on and on of the great things people want to sell us. Each year, I look at tradeshow floors where I see 10% amazing opportunities and 90% waste.

If you are going to understand more applications for technology, you must learn that less is indeed best. In my opinion, the arsenal of necessities are 1) a good laptop, 2) an cellular card for access away from hotspots, 3) a smartphone — Android or iPhone — which might very well provide #2, 4) an easy database, 5) an organized transaction management program, and 6) a scanner or fax machine.

In addition to those foundational items, adding in a few other applications can make life a lot easier. Those include Facebook, Twitter, a compass app (or an actual compass), a good camera, basic design software, cloud storage (so you can get your data anywhere), and video editing software.

While I’m sure I’ve left out several must-haves, these are the things I’ve brought together over the past five years to create a top 1% producing team.

5. You can’t do it all at once. If technology overwhelms you, add one simple thing a year. In 2006, my addition was video cameras and software. In 2007, Facebook and blogging were my concentrations. In www.VARealtor.com

2008, I added IDX and IVR to my website and listings. In 2009, Twitter became my new challenge. In 2010, dominating WordPress knowledge came top of mind. Now, as I look into 2011, I am expanding my Facebook fan page and working on filter and funnel systems with a new lead generation system.

Had I had walked into the fictional Real Estate Super Electronic and Application Store and bought all these things, I would have been overwhelmed and let everything sit in a drawer somewhere. You must start somewhere, and you must know where you are in your evolution. Yes, I had my core database and transaction management in place immediately, but that was the only exception.

Remember, you control your technology gap. You can fill it in as fast or as slowly as you like. But keep in mind that if you find you can’t shake the “I-just-don’tget-it” attitude, technology may simply not be for you. No one’s going to dismiss you. Your business can

survive in this market place without technology, but it can certainly thrive and help you get your life back when you have the right technology in your business arsenal. Now, go fill in that gap! ●

Brian Copeland might be the country’s most televised realtor® — you may have seen him on the learning Channel’s “Flip that House” or on HgtV’s “goodbuy/Badbuy” for starters.

He’s won awards for his real estate marketing innovations, and as a realtor® he’s in the top 1% of his market. see Brian at the real show, where he’ll be teaching “owning your online Brand: digital reputation management” and “taking your Business Completely mobile.” www.REalShow2011.com

No Charge Business Plans?

From the Desk of

Wes Foster People ask me all the time what makes Long & Foster different.

How do we continue to excel in all market conditions? How have we obtained #1 market share in most of our markets? Stay on the cutting-edge of technology? Consistently attract top producers? Continue as the #1 independently-owned real estate Company in the nation?

My answer across the board has always been — “It’s our people! For 40+ years we’ve put our people first — they’re who make Long & Foster who we are.”

When you’re ready to partner with a team that puts you first, give us a call.

You’ll be glad you did.

Volume 18 ● Issue 4

YES! ✔ Automated Business Plan Program ✔ Ongoing Business Planning Sessions ✔ Multiple Business Planning Options ✔ Written Business Plans Result in More Income Ready to move to the next level?

Join the company that puts their agents first.

Call 703-653-8581.

®

LongandFoster.com

EOE

July/August 2011 33

at y a d o t r e t Regis er t s i g e r / m o 2011.c w o h S l a E R

Speakers from across America!

Laurie Janik is NAR’s

Juliet Funt — yes, she’s

G. William James is a

general counsel — the top lawyer in the nation’s largest association. Her job: protect NAR from legal trouble, and — if trouble strikes — to clean up the mess.

Janik is the expert in real estate law, from agency and advertising to property management and websites. And if you’ve heard her speak you know why we grabbed her for a keynote.

Allen’s daughter — has made her own reputation as a fantastic speaker.

Thanks to her show-biz background, she’ll grab your attention and hold on. (Talk about tough: She’s even trained the LAPD in human relations.)

She’ll have you thinking, planning, and laughing about your ever-more-hectic life and your ever-more-complex business.

high-powered, speaker and sales trainer who’s devoted to handheld computing — he’s built his career on the technology.

His company conducts specialized training seminars for companies and real estate organizations throughout the U.S., Canada, and the Caribbean. His session at the 2010 REal Show was standing room only, so of course we have him back!

Jackie Leavenworth

Steve Harney is the

Todd Clarke has deep

hails from the Cleveland area, where she started her real estate career in 1984, and quickly became her company’s top producer. How do you do it? they asked. She answered with the “Jackie Leavenworth Seminars,” where she coaches agents around the country.

You won’t want to miss “Coach Jackie” and her fun and engaging style — create a great life, not just a living!

guy to turn to when you want to learn how to be the best real estate leader and negotiator you can be. He’s got the cred: 20 years of real estate success, owner of his own 500 agent real estate firm, and creator of Steve Harney, Inc., his own brand of training and negotiation seminars.

Today he shares his success, traveling the country as an industry speaker and trainer.

roots in commercial real estate. A fourth generation Realtor® and a second generation CCIM designee (including being named Commercial Broker of the year in 1996), Todd’s a popular lecturer and keynoter with courses on presentation skills, getting the most from all those gadgets and gizmos, and using your website the smart (read: profitable) way.

ViSit our expo

to meet these and more great exhibitors.

2-10 Home Buyers Warranty Access National Bank

NAR Resort Navy Federal Credit Union

American Home Shield

Old Republic Home Protection

Atlantic Bay Mortgage

Outstaffing, Inc.

Avectra

Pearl Insurance

Bath Fitter & Kitchen Saver

Pillar to Post Professional Home Inspection

BB&T Mortgate

PNC Mortgage

Blu Skyy Realty

PrimeLending

Braun Agency Nationwide, The

Prosperity Mortgage RealBiz 360

Centralized Showing Service

The Real Estate Book

Century 21

Real Estate Information Network

Cox Communication eShield of VA eshowings, Inc. EXIT Realty Virginia First American Home Buyers Protection Graphic Dimensions LLC HMS Home Warranty HomeFinder.com Homes.com Immobel Services Group, Inc. JES Kathy’s Accessories Liberty Mutual Long & Foster Real Estate Inc Lowe’s Companies, Inc. Magnets USA

tHANK You, SpoNSorS

Platinum Sponsor:

Platinum Sponsor:

Hampton Roads Realtors Association®

www.alphacollegeofrealestate.com

Alpha College of Real Estate

www.centerforrealestate.com

Platinum Sponsor:

Platinum Sponsor:

Century 21

MRIS

www.century21.com

www.mris.com

RealFocus Realty Executives Samuel I. White, PC Scentsy Wickless Candles SentriLock, LLC

Gold Sponsor:

VHDA www.vhda.com

Shaheen & Shaheen MLSRealEstateVideos.com Supra Systems Engineering Tennessee Valley Signs Tidewater Home Funding, LLC

MOR T GAGE

HOM E MORTGAG

Silver Sponsor: BB&T Mortgate

Silver Sponsor: NAR Resort

www.bbt.com

www.realtor.org/resort

Cox Communication

Liberty Mutual

www.cox.com

www.libertymutual.com

Samuel I. White, PC

RealFocus

www.siwpc.net

www.realfocus.com

UPS VHDA Wise Agent zipLogix

MRIS

(as 7/26/2011)

rpacreport As of June 17, 2011, the following REALTORS® and local associations have joined RPAC of Virginia as Major Investors. For more information on the value of RPAC and how your investment works to protect your business, contact Meredith Cox at mcox@VARealtor.com or (804) 264-5033.

Or, if you want to get invested today, please visit rpacofva.com.

Golden R Investors ($5,000)

Linda BelcherBrown Coldwell Banker Residential, Manassas

Charles Burnette

Billy Chorey, Sr.

Dennis Cronk

John Dickinson

Burnette Real Estate Sales, Blacksburg

Chorey & Associates Realty, Suffolk

Poe & Cronk Real Estate Group, Roanoke

Hall Associates, Inc. Union Hall

Re/Max Allegiance Tom Stevens

Steve Hoover

Thomas Jefferson, III John McEnearney

John Powell

MKB, Realtors® Roanoke

Joyner Fine Properties, Richmond

Long & Foster Real Estate, Alexandria Inc., Colonial Heights

McEnearney Associates, Inc., Alexandria

Dorcas HelfantBrowning Coldwell Banker Professional, Virginia Beach

Coldwell Banker Residential, Vienna

Golden R Associations ($5,000) Fredericksburg Area Association of Realtors®, Fredericksburg Northern Virginia Association of Realtors®, Fairfax Richmond Association of Realtors®, Richmond Roanoke Valley Association of Realtors®, Roanoke Williamsburg Area Association of Realtors®, Williamsburg Melanie Thompson Century 21 AdVenture Realty, Fredericksburg

Jack Torza Long & Foster Realtors® Mechanicsville Hall of Famers have contributed a cumulative amount of at least $25,000 to RPAC.

36 July/August 2011

www.VARealtor.com

Crystal R Investors ($2,500)

2011 fair share goal

$579,600 Mike Minnery

James Nellis

Jane Quill

RE/MAX Allegiance Woodbridge

Nellis Properties Fairfax Station

Re/Max Presidential Fairfax

Trish Szego

Connie Vanderpool

ERA-Elite Group, RealtorsÂŽ, Fairfax

RE/MAX Gateway Chantilly

76%

Sterling R Investors ($1,000)

Bob Adamson

Guy Allen

McEnearney Associates, Inc., McLean

One Stop Realty Woodbridge

Katy Allenbaugh -Richards First American Home Buyers Protection, Midlothian

Betsy Atkinson ERA Atkinson Realty Virginia Beach

$440,000 Julia Avent

Tammy Bagnato

Sherry Bailey

Deborah Baisden

Re/Max Allegiance Arlington

Coldwell Banker Residential, Springfield

Century 21 New Millennium, Stafford

Prudential Towne Realty, Virginia Beach

Volume 18 â—? Issue 4

investment Figures through June 30, 2011.

Campaign year ends September 30, 2011.

July/August 2011 37

rpacreport Sterling R Investors ($1,000)

CC Bartholomew

Mary Bayat

Lee Beaver

Long & Foster Real Estate, Inc., Manassas

Bayat Realty, Inc. Alexandria

Keller Williams Realty Manassas

Brad Boland

Candice Bower

Jobin Realty Reston

McEnearney Associates, Inc., Leesburg

David Charron

Vic Coffey

MRIS Rockville, MD

Re/Max All Stars Realty, Daleville

Mary Dykstra

Ekko Title

Sandee Ferebee

MKB, Realtors Roanoke

Reston

Prudential Towne Realty Virginia Beach

38 July/August 2011

Mary Ann Bendinelli

Laura Benjamin

Karen Bohlke Enriquez

Weichert REALTORS速 Manassas

Roanoke Valley Association of Realtors速, Roanoke

R. Scott Brunner

Robyn Burdett

Joe Carney

Dale Chandler

Virginia Association of Realtors速, Glen Allen

Re/Max Allegiance Reston

William E. Wood & Associates Virginia Beach

Greg Garrett Realty Newport News

Commission Express

Billy Coons

John Daly

Benton Downer

Old Virginia Realty Suffolk

Rose & Womble Realty Newport News

Downer & Associates Charlottesville

Claire ForcierRowe

Virgil Frizzell

Bev Frowen

Long & Foster Real Estate, Herndon

Long & Foster Real Estate, Manassas

Fairfax

Coldwell Banker Elite Fredericksburg

Re/Max Select Hampton

www.VARealtor.com

Sterling R Investors ($1,000)

Karen Gaskins

Bill Gearhart

Art Grace

Lynn Grimsley

Thomas Groves

George Grundy

Rose & Womble Realty Chesapeake

Coldwell Banker Townside, Roanoke

Hunzeker & Lyon, PC Manassas

RE/MAX Peninsula Newport News

ERA Real Estate Professionals Virginia Beach

George Grundy & Associates Realty Petersburg

Kit Hale

Margaret Handley

Lizzie Hernandez

Jeanne Hockaday

Nathan Hughes

Tom Innes

MKB, Realtors® Roanoke

M.C. Handley, Ltd. McLean

Re/Max Regency Manassas

Virginia Country Real Estate, Ordinary

Bandazian & Holden Richmond

Re/Max Commonwealth Richmond

Donn Irby

Jo Anne Johnson

Randy Jones

Sita Kapur

Kathleen Kennedy

Betty Kingery

Rose & Womble Realty Chesapeake

Westgate Realty Group, Inc., Falls Church

Monarch Mortgage Manassas

Arlington Premier Realty Arlington

Re/Max Regency Manassas

Mountain to Lake Realty Rocky Mount

Pat Kline

Jody Korman

Vonda Lacey

Richard Limroth

George Lyons

Scott MacDonald

Avery Hess Realtors® Springfield

Re/Max Commonwealth, Richmond

Lacey Real Estate Group Fishersville

Re/Max Valley Realtors® Roanoke

Long & Foster Real Estate Woodbridge

Re/Max Gateway Chantilly

Volume 18 ● Issue 4

July/August 2011 39

rpacreport Sterling R Investors ($1,000)

Andy Mason

Shane McCullar

Susan Mekenney

Tina Merritt

Tom Meyer

Jay Mitchell

Weichert REALTORS® Mason-Davis, Onancock

Keller Williams Realty Alexandria

Re/Max Allegiance Alexandria

Nest Realty Group Blacksburg

Condo 1, Inc. Arlington

Prudential Towne Realty Virginia Beach

Percy Montague

Vinh Nguyen

Lee Odems

Forrest Odend’hal

Susan Oh

Gwen Pangle

Montague, Miller & Co., Charlottesville

Westgate Realty Group, Inc., Falls Church

Buyer’s Advantage Real Estate, Woodbridge

Long & Foster Real Estate, Gainesville

New Star Realty & Investment, Fairfax

Carter Braxton Preferred Properties, Leesburg

Gail Penman

Tracy Pless

Anne Rector

Peter Rickert

Thomas Rickert

William E. Wood & Associates, Virginia Beach

Long & Foster Real Estate Reston

Long & Foster Real Estate, Alexandria

Coldwell Banker Residential, Alexandria

Coldwell Banker Residential, Alexandria

Zinta RodgersRickert

Mario Rubio

Fetneh Schacht

Henry Scholz

Trudy Severa

Karen Smith

Kimber Smith

Rubio Real Estate Annandale

Long & Foster Real Estate, Vienna

Hall Associates, Inc. Roanoke

Long & Foster Real Estate, Reston

Re/Max Commonwealth Richmond

Prudential Towne Realty Williamsburg

40 July/August 2011

Re/Max Allegiance Fairfax

www.VARealtor.com

Sterling R Investors ($1,000)

Susan Spellman

Cindy Stackhouse

Wes Stearns

Suzy Stone

Long & Foster Realtors®, Williamsburg

Century 21 Stackhouse & Associates, Dumfries

MO Wilson Properties, Inc., Woodbridge

Century 21 AdVenture Realty, Fredericksburg

Thomas “Mack” Strickland, Jr.

Lawanda Swope

Christine Todd

Karen Trainor

William A. White

Shanna Wiseman

Jon Wolford

Weichert Realtors®, Arlington

Northern Virginia Association of Realtors®, Fairfax

Weichert REALTORS® Fairfax

Joyner Fine Properties Richmond

Parr & Abernathy Hopewell

Long & Foster Real Estate, Springfield

Strickland Realty Chester

Pat Sury Montague, Miller & Co., Charlottesville

Sterling R Associations ($1,000) Greater Augusta Association of Realtors®, Staunton Harrisonburg-Rockingham Association of Realtors®, Harrisonburg Lynchburg Association of Realtors®, Lynchburg Virginia Peninsula Association of Realtors®, Hampton Contributions are not deductible for income tax purposes. Contributions to RPAC are voluntary and are used for political purposes. The amount suggested is merely a guideline and you may contribute more or less than the suggested amount. You may refuse to contribute without reprisal and the National Association of Realtors® or any of its state associations or local boards will not favor or disfavor any member because of the amount contributed. 70% of each contribution is used by your state PAC to support state and local political candidates. Until your state PAC reaches its RPAC goal 30% is sent to National RPAC to support federal candidates and is charged against your limits.

IS YOUR REAL ESTATE BUSINESS WORTH A NICKEL? Seriously. A nickel a day – that’s all it takes to do your fair share for your business.

That money is critical in protecting you – at the General Assembly and in your town. It helps elect candidates who support you and your goals.

Candidates who support your real estate business.

www.VARealtor.com/RPAC

Get what’s coming to you

You pay for your VAR membership, so make it pay you back. Take advantage of our long list of member benefits — low-cost life, health, and E&O insurance; discounts on shipping and wireless services; free sales tools and forms, and a lot more. A lot.

How much?

Visit VARealtor.com/discounts and see for yourself.

42 JULY/AUGUST 2011

VAR: Take us for all we’re worth

WWW.VAREALTOR.COM

contactvar

WE’D LOVE TO HEAR FROM YOU

We’re online at www.VARealtor.com Our official blog is VARbuzz, at www.VARbuzz.com If you have questions, we’re ready to help. During normal business days, our receptionist is available from 9:30 a.m. to 3:45 p.m.

Our phone number is

(804) 264 -5033 For membership and dues questions Ask for Amy Hafer Membership Records Manager amy@VARealtor.com

For questions about professional standards and the Code of Ethics Ask for Blake Hegeman Legal Counsel blake@VARealtor.com

If you’re interested in marketing or advertising opportunities Ask for Steve Daley Director of Sales & Marketing steve@VARealtor.com

To reach our Legal Hotline Call (804) 622-7955* *You must register first at VARealtor.com/LegalHotline

If you’d like to have someone speak at your association or brokerage

To find out about conferences, seminars, and professional education

Ask for Lynne Wherry Director of Member Outreach lynne@VARealtor.com

Ask for Glenda Puryear Conferences Specialist or Lili Paulk, Director of Education glenda or lili @VARealtor.com

If you need to know about professional designations Ask for Kim Martin, Specialties and Chapter Manager kim@VARealtor.com

If you have comments or questions about Commonwealth magazine or our Web sites Ask for Andrew Kantor, Editor & Information Manager andrew@VARealtor.com

See your member discounts at www.VARealtor.com/ discounts Liberty Mutual, home, auto, and renters insurance Outstaffing, staffing and payroll Pearl Insurance, E&O, medical, life, and dental insurance Phone Tag, voice to e-mail transcription Realtors Federal Credit Union

UPS, shipping and more

(804) 249-5712 scott@VARealtor.com

VOLUME 18 ● ISSUE 4

Ask for Meredith Cox Director of Political Communications meredith@VARealtor.com VAR 2011 Leadership Team

John Dickinson, CCIM, GRI President Hall Associates, Inc., Union Hall (540) 982-0011 jrdickinson@cs.com

VAR Member Service Partners

T-Mobile, wireless service

Our CEO is Scott Brunner

For information about RPAC

Zipform, electronic forms solutions

Trish Szego, CRB, CRS President-Elect ERA-Elite Group, Haymarket (703) 359-7800; trishelite@aol.com Mary Victoria Dykstra, ABR, CRS Vice President MKB REALTORS®, Roanoke (540) 989-4555 mvdrltr@aol.com John Daly, SFR Treasurer Rose & Womble, Virginia Beach (757) 486-8800 jdaly@roseandwomble.com Cindy Stackhouse, GRI Immediate Past President Century 21 Stackhouse and Associates Prince William (703) 580-0880; c21cindys@aol.com R. Scott Brunner, CAE Chief Executive Officer (804) 264-5033; scott@VARealtor.com

JULY/AUGUST 2011 43

lastword SCOTT BRUNNER

Of McMuffins, MLSs, and meaningful value Let’s say you like Egg McMuffins.

Not just like them, but love them, crave them, need them. Let’s say your ability to have essential breakfast-time nourishment is dependent on your access to Egg McMuffins. I mean we’re pretending, right?

So every morning you’re compelled to traipse into the Golden Arches to satisfy your heartfelt hankering. And that really burns you up, because (as long as we’re pretending) you have no use for McDonalds. It’s the product you want, not the brand or ambiance or the other stuff on the menu. In fact, you see those inimitable Egg McMuffins as a commodity, a sort of public good, access to which is essential for your well-being. But the McDonalds part? Meh. McMuffins without McDonald’s: That’s the ticket. And, you think, no one should be forced to endure the latter just to have access to the former. That’s exactly what you feel: forced.

As parables go, it’s far-fetched, right? Who’d seriously suggest

44 July/August 2011

separating a product from its producer? Because, in fact, there’d be no Egg McMuffin without the ingenuity of McDonalds.

And yet if some recent VAR member input is to be taken seriously, that seems to reflect (in an admittedly strange way) how some members feel about their Realtor® association membership: We’re the McDonalds you must endure to access your local Egg McMLS. From our recent member survey: • “I cannot be a member of MLS without having a Realtor® membership. It’s all tied in, which is wrong...”

• “I think it’s an added expense and I don’t like being forced to belong….”

• “Membership is mandatory. No membership, no business.”

And although such responses were few in number (maybe 20 out of more than 3,000), they’re nevertheless troubling to me, because they reflect: • a misunderstanding about why you’re Realtors® in the first place (as opposed to mere licensees): You’re Realtors® — and pay dues to the local, state, and national associations accordingly — because you chose to affiliate with a broker who chose to be a Realtor (presumably because he or she saw value in the association’s services, a substantial one of which may have been MLS); • a misunderstanding of what an MLS is (and who created it). It’s not a consumer-facing

“utility” to which any licensee may have access (i.e., a McMuffin). Rather, it’s a broker-to-broker cooperative that operates for the benefit of the brokers who own the listings and who set requirements for participation. In most association-affiliated MLSs, one such requirement is membership in the three-level Realtor organization (i.e., McDonalds); and • most distressingly, the failing of the Realtor® organization to demonstrate to members a clear and compelling value proposition beyond the MLS. It’s undeniable that we have a positive impact on your business, that our legislative and political advocacy efforts (for example) save you (and your customers and clients) thousands of dollars annually. But if you don’t know (or care) about it, is it really value? Sort of like missing everything else on the McDonalds menu, no?

Clearly it’s on that third point that we must work harder — not to change what we do in serving and protecting your interests, but to demonstrate how the Realtor organization impacts your business success just as much as MLS does.

It’s a compelling story, as tasty as, oh, a Big Mac. We’re looking forward to sharing one with you in the days ahead. l Scott Brunner is VAR’s CEO and guru of awkward metaphors.

Contact him at scott@varealtor.com www.VARealtor.com

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