2011_1-2_Commonwealth

Battles on the Square (p. 26) • Identity theft made simple (p. 29) January/February 2011

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

The

numbers issue 2010 in review, graphically

10231 Telegraph Road, Glen Allen, VA 23059-4578

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 Rainsford Director of Sales & Marketing 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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Two sides of the statistical coin There’s a little-known law that requires anyone writing about statistics to at some point quote Charles Dilke about “lies, damn lies, and statistics.” So there, I’ve done it.

The point, of course, is that it’s easy to manipulate numbers to make your point — whatever that point is. That’s why economists can justify opposing points of view; they can prove that suchand-such a policy is the best way to help the economy. And so can their opposition. (Economists can prove, for example, that Reagan’s 1981 tax cuts boosted the economy. They can also prove that it was the increase in government spending. Pick your poison.)

If you’re a cynic — and you should be — you’ll take any claims of numeric proof with a grain of salt, at least until there’s a broad consensus. With economics, that will rarely happen.

But there’s another perspective.

If you look at the right statistics, you might discover some unexpected correlations. Maybe there’s a connection between rainfall and home sales, or between the number of flowers sold and the median home price.

Of course, don’t assume that correlation means causation.

Violence at the local high school may have dropped because of school uniforms — or maybe it was the new principal. Or because

the last of the McBully kids finally graduated.

Even if there isn’t a direct correlation — if A didn’t cause B — there may still be some connection, like a common cause. It’s worth investigating, or at least thinking about.

All this chatter is by way of introduction to our first fullfledged numbers issue. Real estate is full of data — sale price, units sold, days on market, square footage …. Often those data are important, and sometimes they’re just interesting. This is the time of year we compile the previous year’s information (thanks to your local Realtor® association); it seemed a good spot for an annual piece on numbers.

So peruse the charts on pages 18 through 25, and hopefully get some useful information out of them. But remember that the numbers you see tell the story — but they aren’t the story itself. l

Andrew Kantor, Editor andrew@VARealtor.com January/february 2011

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January/february 2011 Volume 18 ● Issue 1

contents

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

8 legallines Questions and answers about Virginia real estate law

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

16 formfactor Our Forms Center makes it simple to get the documents you need

29 accessibletech A new tool makes it easy to steal someone’s

feature

18

identity

in every issue

By the Numbers

Charthounds, data geeks, and everyone who’s wondering what really went down in 2010: Our new numbers issue gives you all the detail on sales, prices, mortgages, foreclosures, and more. Lots more.

1 firstword

32 rpacreport

plus

35 varbuzzcontest

26 Legislative Agenda: 2011 From reducing your liability to cutting taxes and ending fees, we’re fighting for you again on Capitol Square. Check out VAR’s most important battles this year.

37 contactvar 38 lastword APEX Award of Excellence winner 2

January/february 2011

www.VARealtor.com

FOR FRANCHISE INFO Contact Nancy & Tom Shaver

EXIT Realty Virginia Office: 800-906-3948 info@exitvirginia.com Brokerage, Independently Owned and Operated. Not intended to solicit individuals or property already under contract.

quickhits

ANDREW KANTOR

ON CAPITOL SQUARE

MARKETING

Convincing clients they (may) qualify

Realtors® fight re-taxing The General Assembly is considering a bill — one written by VAR — that could help thousands of Virginia property owners by eliminating an unfair tax.

People pay a recordation tax when they buy a property. There’s nothing wrong with that. But in Virginia property owners may also have to pay a recordation tax when they refinance, which can add hundreds or thousands of dollars to the cost. And with so many property owners in danger of losing their properties or going ‘upside down’ on their mortgages, it’s unfair that they are taxed again when they’re trying to refinance to keep their properties or reduce their costs.

Which leads to House Bill 1908 and Senate Bill 780. They would put an end to the recordation tax on property refinances, thereby 4

January/february 2011

allowing Virginia property owners to refinance at a lower cost, saving them in these hard economic times hundreds of much-need dollars.

Through the Virginia Homeowners Alliance, VAR is getting the word out to property owners across the state. (We even have a site, norefitax.com, that will show them how much they’d be taxed on a refi, and that lets them e-mail their legislators.)

As a Realtor® and protector of property owners, we hope you’ll go to the Realtor Action Center (VARbuzz.com/go/norefitax), fill out the short form, and ask your legislators to vote YES to House Bill 1908 and Senate Bill 780, which will eliminate this recordation tax on property refinances.

It certainly makes sense to educate potential first-time home buyers about the buying process, but that requires actually having buyers. In a piece for the National Association of Mortgage Underwriters, Gail Foster (a Realtor® and licensed mortgage officer in Maryland) argues that educating people about the mortgage process is more important.

The problem is a loan officer can only reach someone who walks through the door, picks up the phone or clicks a link on the internet to inquire about financing. We need to go out and find, lure, and encourage people who may be thinking about home ownership to make the leap and see if they qualify.

Quick, interesting reading — read the piece at VARbuzz. com/go/namu.

www.VARealtor.com

PROPERTY MANAGEMENT

Taxes down, reporting up for rental owners If you’re a small-business owner, there’s a lot to like in the Small Business Lending Funds Act that passed last year: Eight separate tax cuts totaling about $12 billion for one thing, plus $30 billion being made available for small banks to lend to small businesses.

The law is “revenue-neutral,” meaning that whatever the law costs is made up for by the savings or income it creates.

In the case of the Small Business Lending Funds Act, one way the government is offsetting the cost is by making sure that contractors — plumbers, landscapers, accountants, etc. — don’t hide income. Caesar wants what’s coming to him, in other words.

Yeah, it’s more paperwork. And one way the IRS is doing that is by requiring just about anyone who makes money by renting property to document (via the good ol’ 1099MISC form) when they pay $600 or more to a contractor during a year.

Starting now.

Someone who owns dozens of

properties with dozens of contractors doing hundreds of jobs over the year — well, he’s going to have a bit more paperwork than the landlord who owns one or two rentals. (Of course, the landlord with lots of property probably has accounting software that can handle the reporting without batting a virtual eyelash.)

There are some exceptions to the requirements, but check with the IRS if you think any apply to you.

(In other words, don’t get your tax advice from a blog.)

Individuals renting their principal residences — think active members of the military and intelligence community — are exempt.

So, too, are individuals who can show that the extra paperwork will be a hardship. (How you can do that isn’t clear yet.) And ditto for anyone who receives a “minimal amount” of rental income — e.g., charging that 24-year-old slacker son of yours rent.

Is it a big deal? Not really — at least, assuming you (Mr. Landlord)

Caesar wants what’s coming to him, in other words. keep accurate records. There are some mighty hefty fines if you don’t report your payments.

Still, the money raised (expected to be about $2.5 billion over 10 years) will help offset the cost of helping small businesses, many of which can use all the help they can get.

TAXES

A tax deduction you don’t want to miss In case you’re one of those people who likes to save money on your taxes, there’s a deduction lurking in your 2010 paperwork that Realtors® and other independent contractors ought to know about.

If you pay for health insurance, you (should) already know that you can take the cost of your premiums as a deduction from your income tax — that’s on line 29 Volume 18 ● Issue 1

of the 1040. But it can also be subtracted from the net income you report for Social Security and Medicare self-employment tax.

The place to take this deduction is on line 3 of Schedule SE (self-employment). Be sure to read the IRS instructions, though, and talk to your tax advisor to be sure you qualify.

January/february 2011

5

quickhits FORECLOSURES

Mass. court rules for homeowners; banks can’t foreclose In a ruling likely to have nationwide impact, the Supreme Judicial Court of Massachusetts ruled against Wells Fargo and US Bancorp, saying that they could not prove they held the mortgages to two homes they were attempting to foreclose on.

The bank lacked authority to foreclose after having “failed to make the required showing that they were the holders of the mortgages at the time of foreclosure,” Justice Ralph Gants wrote for the Massachusetts court.

In a concurring opinion, Justice Robert Cordy lambasted “the utter carelessness” that the banks demonstrated in documenting their right to own the properties.

The decision applies retroactively, so others in Massachusetts may be able to recoup money from banks that foreclosed without proper documentation.

The problem seems to be that the loans had been securitized, and the paperwork was either lost or not handled properly. Your best bet is to read the full story — go to VARbuzz.com/go/ foreclosureruling.

PROPERTY MANAGEMENT

Rents on the rise, listing prices down According to a report by property search site HotPads.com, rent prices nationwide rose 11.6 percent in 2010, from an average of $1,181 in January to $1,319 in December.

“With the U.S. unemployment rate over 9 percent throughout 2010 (up from 4 percent in 2006), low-risk housing options became more desirable, a trend that may continue in the coming months,” the report said.

At the same time, HotPads expects to see “foreclosed and longstanding for-sale properties re-enter the market as rentals, which should expand the rental supply, thereby helping ease rent prices. This represents an interesting contrast to the peak of the housing market in 2006, when rental units were being converted into for-sale condos.”

FUTURE REALTORS®

VAR, VHDA, VREEF announce scholarship winners Each year, VAR, the Virginia Housing Development Authority, and the Virginia Real Estate Educational Foundation partner to provide scholarships to real estate students attending George Mason, Virginia Commonwealth, or Virginia Tech universities.

There’s $2,000 allocated to each school. Two of this years three winners come from Virginia Tech; the third is attending GMU. They all deserve congratulations — and don’t be surprised if you hear their names again.

Ellen Zapata of Fairfax; George Mason University Major: Regional development in public policy

6

January/february 2011

Virginia Owen of Crewe; Virginia Tech Major: Building Construction

Mark Letenzi of Bloomsbury, N.J.; Virginia Tech Major: Finance

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®

legallines BLAKE HEGEMAN

Guilt by Association The Property Owner’s Association Act (POA) has generated numerous questions and concerns since its enactment. It is constantly being changed to make it more user-friendly; this year will be no exception. Below are frequently asked questions and answers concerning the Act.

Q.

How long does a buyer have to terminate the purchase contract after receiving the POA packet by hand delivery or electronically (receipt obtained)? Three days or 72 hours?

A. The buyer has three days — and the difference is important.

Q.

The seller requested that my buyer client waive his right to receive a POA packet. Is that legal? Also, can the POA termination period be extended?

A. The POA Act makes clear

that buyers may not waive their rights under the Act, even by written agreement. Therefore, the termination period may not be extended in the contract.

The POA Act in Section 55-509.4 sets forth the buyer’s rights under the law (disclosure of the fact the property is in a development governed by the Act, termination rights upon receipt of the packet, the effect of settlement on the exercise of buyer’s rights, etc.) and subsection F provides as follows: “Except as expressly provided in this chapter, the provisions of this section and § 55-509.5 may not be varied by agreement, and the rights conferred by this section and § 55-509.5 may not be waived.”

Example: Assume delivery to buyer at noon on Monday. If the deadline is 72 hours, the buyer must act by noon on Thursday (72 hours later). If the deadline is three days, the buyer must act by 11:59 p.m. on Thursday (which is the end of the third day).

Q.

The buyer is terminating the contract based on the POA packet but she really just wants out because she got cold feet. Can she do that?

A. Her reasoning does not matter; she will have an absolute right to

terminate at any time during the termination period.

8

January/february 2011

www.VARealtor.com

Does Your Client Need Real Answers About Homeownership?

Here’s The Starting Line.

Looking for a way to help new clients take that first step with confidence? Tell them about VHDA’s free First-Time Homebuyer Class. It’s a great way to learn the entire homebuying process from start to finish, and how to stay on track as a responsible homeowner. The class is offered in English or Spanish, in person or online. And it’s free, with no obligation. For information, visit vhda.com or call 877-VHDA-123.

Virginia Housing Development Authority | 877-VHDA-123 | vhda.com

legallines I have written about the question below in a previous Commonwealth. However, I want to reinforce it here as we continue to receive questions on the topic.

Do property owners’ association (POA) packets, condominium resale certificates, lead-based paint disclosures, and Residential Property Disclosure Statements have to be provided for both foreclosures and REO properties?

A. If a property is sold at fore-

Q.

Q.

I have a client purchasing an REO property; it was foreclosed on under the first deed of trust six months ago. The POA dues are about $100/month but the POA documents reflect a balance of more than $4,000 — obviously unpaid dues from the previous owners.

Can the POA demand all of the unpaid dues at closing, or just for the period in which the bank owned the properties (which is about $600)?

A. I have never seen this play out in court, but I’ll give you my take. It

looks to me like the previous owner owes the POA $4,000. Good luck.

The association’s lien almost always gets wiped out by the foreclosure, so it can pursue the personal obligation of the previous owners (they owed the dues), but their lien is — POOF! — gone.* As for the bank, it owes dues for the time it owned the property, and that’s $600. The association has a lien (post-foreclosure) in that amount.

At closing between your client and the bank, the bank should be required to get the back dues paid so it can deliver good title. So the buyer should demand payment of that $600.

Bottom line: The $4,000 lien is gone. The POA can go after the longgone previous owners. But the house is free of the lien.

closure, none of these disclosures is required.

If the property is REO (where the bank has taken the property back in foreclosure or by deed in lieu and intends to sell it), the following disclosures are required: • POA packet/condominium resale certificate • Lead-based paint disclosure for properties built prior to 1978 In either case, the Residential Property Disclosure Statement is not required.

* Caution: Some POAs are filing post-foreclosure liens to collect the past due amount from the new buyer. Their theory is that the POA Act permits the filing of a lien up to 12 months after the accrual of a past due amount. More trustee deeds or memorandums of sale make property owner association dues the responsibility of the buyer.

Thus, you could have the following situation: The dues could be delinquent, there is a foreclosure. New buyer buys the property at foreclosure, and the POA lien is filed weeks or months later — so the new buyer has to deal with the lien.

VAR is working to address this and other important POA issues in legislation this year.

10 January/february 2011

www.VARealtor.com

NEW NUMBER!

Q.

A common scenario we see: my buyer client received the Property Owner’s Association (POA) packet and wants out. Therefore, we sent the seller a signed release of contract requesting a release within three days of receiving the packet. Now the seller says he won’t sign the release and is proceeding to settlement. What gives?

A. Your buyer may still be obligated under the contract. The POA Act

provides a termination right within a specified number of days, but you didn’t terminate - you asked for a release. A termination and release are very different things.

Termination is generally the unilateral act of one party declaring the contract at an end. For example, the buyer terminates upon being refused a loan or because the seller refuses to make agreed-upon repairs. A termination of this sort does not rely upon the agreement of the other party but is a unilateral act.

“

A termination and release are very different things.

A release is a mutual act of the parties by which one or more of the parties are released from obligations under the contract pursuant to whatever agreements the parties have reached. For example, Firm A can release sellers from a listing and sellers agree to pay Firm A’s advertising expenses, or sellers can release buyers if buyers forfeit the deposit. A release often, but not necessarily, results in a termination of the contract. For example, Tom and Dick release Harry from obligations under a contract, but the contract continues between Tom and Dick.

So the rule should always be, if your client wants you to deliver a termination, do so, and be explicit. You might also deliver a release in the hopes of getting your client’s affairs tied up neatly, but you shouldn’t leave it to the other side to characterize what you’ve done in the way most advantageous to them.

Q.

The property I’m listing has more than one community association.

What are the fees in that case?

A. The Code of Virginia specifically mentions this scenario. Each

association may charge the fees allowed under the law, with the provision that no CIC managed association shall charge inspection fees unless it has architectural control over the lot. If the association does not have architectural control, it may only charge those fees related to the preparation and delivery of the packet or certificate.

Volume 18 ● Issue 1

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?

• 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 estate or real estate brokerage, nor can we help with pending arbitrations.

January/february 2011 11

legallines

Q.

If the buyer receives an incomplete or insufficient POA packet, does the termination period start?

A. If what was given was called the packet or if it was clear that was all that was going to be given, the termination period started then. There have been several circuit court decisions stating (I think this is the correct reading of the statute) that the packet does not need to be complete to start the clock. Otherwise, we might never have resolution.

Furthermore, the statute makes clear that just telling the buyer that no packet will be available starts the clock as well. So an incomplete packet does the same.

I think it’s worth asking, when you get the incomplete packet, whether what is given is intended to be the packet. If it is, the clock starts running. Of course, the buyer can pull the plug if what is given is unsatisfactory. l

12 January/february 2011

Legal Lines is written by VAR Legal Counsel Blake Hegeman. Please note that answers to Legal Lines questions are informational only.

Consult your own legal counsel for legal advice.

You can find more Q&A from the archives of our Legal Hotline in our Legal Resources Center at VARealtor.com/ legalresources.

www.VARealtor.com

saysyou “Where were you?”

In our last issue, the cover you received depended on how much you had invested in RPAC in 2010. If you didn’t contribute at all, it read “Where were you?” If you gave at all, your cover read “Thanks for everything,” and if your contribution was $99 or more it had a gold border.

Not surprisingly, a few folks who received that “Where were you” cover were not happy; they felt they were being preached to. Some were kind enough to take the time to explain their concerns in detail.

Realtor® Steve Dougherty of Springfield suggested that our tactic might not be appropriate. He asked us to ponder a few questions: Does the Realtor lobby take on issues that primarily benefit other interest groups, such as builders, and have only a secondary benefit to Realtors?

Does the Realtor lobby often get involved in a wide range of issues that, at best, have a peripheral or secondary benefit to Realtors?

Does the Realtor lobby universally endorse and financially support all incumbents?

Finally, do you think the rank and file members have noticed?

If you are losing the hearts and minds (and checkbooks) of the members, there must be a good reason.

It may be time for some healthy introspection and reevaluation.

Others took issue with some of the bills we support.

Depending on the writer, the policies we favor are either too progressive or not progressive enough.

For example, Realtor® Vicky Chrisner of Leesburg wrote: I have to say this: “Higher recordation and grantors taxes” — not my idea of great, but we do need new roads here in NoVa and need to pay for them somehow. “Required energy ratings” — Hmm... a new way to see how energy conscious we really are. I bet people in our area will trade fancy trim for energy conservation. “A requirement for agents to discover property defects” — At least some agents won’t deliberately turn their heads, which I have seen them doing for a quick buck sometimes.

Volume 18 ● Issue 1

My point here is that we have super big problems in this nation and if I don’t court the same people that “support my business” because they happen not to support my family in the way that I need, well, don’t take it personally.

While Realtor® Jeff Secrest of Amherst was concerned that An elected official may support our position on Realtor®-specific issues, while at the same time voting to heap massive new regulations on the American people, and continuing the out-of-control spending policies which are crippling our economy.

“

Our intent was to communicate the very real consequences that of a loss of our clout — thanks to a loss of RPAC funding — would have for Realtors®’ businesses.

Betting on perceived winners is a dangerous thing to do, and Virginia RPAC money does seem to favor incumbents (if they have supported the Realtor®specific issues). This does not provide much hope for challengers (such as from the Tea Party) who stand for a smaller, and less intrusive government.

VAR CEO Scott Brunner replied that yes, RPAC often supports incumbents. “But to a degree that too is the nature of the beast, as I point out in my Last Word column: How do we turn our backs on an incumbent who’s supported us? Doesn’t that send a message to other incumbents that regardless of what they do for us, we may not be there for them come reelection time?”

And as for those who somehow felt insulted by the cover, he explained that “Obviously that wasn’t our intent. What was our intent was to communicate the very real consequences that a loss of our clout — thanks to a loss of RPAC funding – would have for Realtors®’ businesses.” l

January/february 2011 13

lifelessons Andrew Kantor

Permission denied Realtors who run afoul of Virginia law can find themselves in the crosshairs of the Virginia Real Estate Board, facing punishment ranging from a small fine to loss of their license. They can be cited for small things or large, including the all-too-common “Unworthiness & Incompetence.”

Here are a few real-world examples taken from the recent actions of VREB. These narratives are based on the Board’s official findings; participants may disagree with VREB’s conclusions and version of events. They are provided solely as examples of Board actions.

All of the names have been changed.

You’re not one of ours Alfonso was the principal broker for A1 Real Estate. He worked with his son, Brad, a licensed real estate salesperson. Although Brad worked for his father at A1, his license was active with B2 Real Estate — but he never did any work there. Brad described his job as “sales manager and office assistant” for his father’s A1 Real Estate.

One of A1’s clients, Rachel, wanted to sell a property, and Brad worked with her — they wrote up a listing agreement (which Brad signed on the line for “Broker/Sales Manager”), and soon had a buyer for the property.

The sale went through, but Rachel was surprised to see Alfonso’s name on the ratified contract; she had never met or talked to him — only to Brad. She complained to the Board.

Because he allowed Brad to negotiate a listing agreement and contract when he (Brad) was not officially affiliated with A1 Real Estate, Alfonso paid $150 in Board costs and had his license revoked.

14 January/february 2011

License to flip Although his real estate salesperson’s license had become inactive a month before, Chuck went into business “flipping” unimproved land.

He would locate landowners who he believed would be interested in selling their land, and explain that he was looking to flip it. His contracts with the owners indicated that his license was inactive, and they allowed Chuck to back out of the contract without penalty (if, for example, he couldn’t sell the land by a certain date, or if the property didn’t perk for a three-bedroom house).

Chuck would market the property on signs, online, in newspapers, and so on, and he would hopefully sell it. Potential buyers were aware that Chuck was flipping the land, and that, while he was not the owner, he did have a contract with the owner. In other words, everything was above board. Chuck would then have simultaneous closings in which he purchased the property and immediately sold it.

Despite the fact that all parties were informed of the inactive status of Chuck’s license, and there was no deception on his part regarding the nature of the transactions, because he profited by offering property for sale while his license was inactive, Chuck had that license revoked for “failing to act as a real estate salesperson in such a manner as to safeguard the interests of the public.” www.VARealtor.com

What’s mine is yours… sort of Kathleen, a licensed real estate broker and owner of K&K Enterprises, contacted Phil, a colleague she had worked with in the past. Kathleen explained that she had a property in a particular subdivision that she thought one of Phil’s clients (Obsidian Construction) might be interested in.

Indeed, Obsidian was, and Kathleen sent Phil the information he would need to write up the contact. Among other things, Kathleen indicated K&K as the property owner.

The contract was signed with K&K’s subsidiary, Home4You, as the listing firm. It included a typical provision giving Obsidian 30 days to do soil and other studies on the property. So far so good.

Soon after the contract was Volume 18 ● Issue 1

signed, Obsidian asked for an extension of the study period.

Kathleen didn’t have a problem with that. In fact, she told Phil, she needed the extra time in order to complete her purchase of the property.

“

So, seven weeks after the contract was signed, Kathleen told Phil that there would be no closing because she did not actually own the property she sold his client.

For intentionally deceiving Phil and his client about the owner-

The out-of-state owners had no idea that she had already sold it to someone else.

You see, K&K did not, in fact, own the property Kathleen sold.

It was listed as a tax auction; the owners lived out of state. Kathleen was trying to buy it from them, but they had already refused two of her offers, and they had no idea she had already “sold” it to someone else.

ship of the property, for offering real property for sale without the knowledge and consent of the owner, and for, it turns out, not informing her principal broker at Home4You about the transaction, Kathleen was fined $3,500 and had her license revoked. l January/february 2011 15

formfactor Blake Hegeman

This issue:

Forms — they’re the

The easiest way to get the standard forms you need is through our

bread and butter of a deal. They’re full of fine

Forms Center at VARrealtor.com/forms. It’s for members only, so log

print and legalese, and

in with your e-mail address and NRDS number. And if you join the

not everyone “gets” the

Forms “group,” you’ll be notified of any changes, too.

details. And that often Be sure you’ve selected the Resources tab

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

Each item is listed by name and number (e.g., 600E)

the Hotline gets the most questions about and illuminate it for us.

They’re all available, free for download, at www.VARealtor.com/ standardforms.

Clicking the gear icon on the right lets you choose how to get the form (your options may vary)

16 January/february 2011

Forms are sorted alphabetically at first, but it’s easy to re-order them

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

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

By the

numbers Andrew Kantor

18 January/february 2011

www.VARealtor.com

Real estate is about numbers. Prices, rates, area, bedrooms,

and of course, sales. There’s nothing wrong with a good anecdote — or 10 — but our business is one like, say, baseball: Stories are fun, but you learn more by looking at the numbers than by listening to the tales.

That’s why we compile them and ponder them, massage them and fret over them, and seek out the trends that will tell us that things are looking up.

Virginia Home Sales

Second Thing

Nov 2010

Sept 2010

Jul 2010

May 2010

Mar 2010

Jan 2010

Nov 2009

Sept 2009

Jul 2009

May 2009

Mar 2009

Jan 2009

Nov 2008

Sept 2008

Jul 2008

May 2008

Mar 2008

Jan 2008

Remember, though, to be careful about statistics. “Correlation does not imply causation,” the saying goes — in other words, statistics that seem related may not be. Take a look at this chart:

Third Thing

The blue line shows Virginia home sales from 2008 through 2010. With the exception of the green line’s dip in July 2009, the other two are clearly related, right?

Or not. One of those lines shows changes in the price of orange juice. The other tracks Virginia’s average temperature. In other words, maybe there’s a connection, maybe there isn’t. Don’t jump to conclusions.

The most obvious stat when it comes to the real estate market is simply the number of units sold in a given month. (To keep the data manageable, unless otherwise noted the numbers represent single-family homes and condos.)

Going back five years (see the next page) shows the typical cyclic nature of the market — sales peaking in early summer and dropping through the winter.

Of course, the overall trend was down since 2005, but a careful look — and, perhaps, some wishful thinking — shows that the downward slide appears to come to an end in October 2010.

Volume 18 ● Issue 1

January/february 2011 19

Units Sold Statewide 2009 and 2010, by Month

4,000

6,548

6,259

5,915

7,873

8,365 5,957

8,536 7,152

8,004

10,418

7,084

8,096

8,314

7,212

9,592

6,355

5,390 4,554

4,756

6,000

4,880

6,739

8,000

7,057

10,000

8,864

9,848

12,000

2,000 Jan

Feb

2009 2010

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

2009 Total: 90,959 2010 Total: 82,809

You might also notice how much higher sales were at the end of 2009 (compared to 2010). Credit the firsttimer home buyers’ tax credit, which helped push demand. And blame the tax credit — rather, it’s expiration — for the sudden drop in July 2010.

Don’t discount the weather, though.

Blizzards in January and February

2010 hurt demand, while warmer temperatures in March caused a bump — at least, so goes the theory.

Economists predict that, absent artificial stimulation, Virginia’s market will begin to stabilize this year, although sales may continue to lag behind 2010 levels during the first half of the year.

Units Sold Statewide 2005-2010, by Quarter 40,000 35,000 30,000 25,000 20,000 15,000 10,000

20 January/february 2011

Q4-10

Q3-10

Q2-10

Q1-10

Q4-09

Q3-09

Q2-09

Q1-09

Q4-08

Q3-08

Q2-08

Q1-08

Q4-07

Q3-07

Q2-07

Q1-07

Q4-06

Q3-06

Q2-06

Q1-06

Q4-05

Q3-05

Q2-05

Q1-05

5,000

www.VARealtor.com

Looking at the data going back to 2005 (lower chart) gives a clearer long-term picture, including an almost textbook bubble in 2005 when the median price statewide was almost 50% higher than today.

The median price of a Virginia home is, generally, on the rise. In the fourth quarter, for example, it was about 4% above the same period in 2009.

In general, sale price tracks sales — up in the summer, down in the winter.

$234,300

$235,000

$237,400 $225,000

$230,000

$223,500

$230,000

$239,000

$250,000

$249,000

$235,000

$235,000

$231,000 $221,000

$227,500 $218,000

$220,000

$215,000

$220,000

$215,900

$230,000

$225,000

$240,000

$235,000

$250,000

$240,000

$260,000

$239,700

$257,000

Statewide Median Sale Price 2009 and 2010, by Month

$210,000 $200,000 $190,000 Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

2009 2010

Statewide Median Sale Price 2005-2010, by Quarter $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000

Volume 18 â—? Issue 1

Q4-10

Q3-10

Q2-10

Q1-10

Q4-09

Q3-09

Q2-09

Q1-09

Q4-08

Q3-08

Q2-08

Q1-08

Q4-07

Q3-07

Q2-07

Q1-07

Q4-06

Q3-06

Q2-06

Q1-06

Q4-05

Q3-05

Q2-05

Q1-05

$0

January/february 2011 21

5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500

Northern Va

Roanoke/Lynchburg/Blacksburg

Hampton Roads/Chesapeake Bay

Greater Richmond

Other

Central Valley

Dec 10

Nov 10

Oct 10

Sep 10

Aug 10

Jul 10

Jun 10

May 10

Apr 10

Mar 10

Feb 10

Jan 10

Dec 09

Nov 09

Oct 09

Sep 09

Aug 09

Jul 09

Jun 09

May 09

Apr 09

Mar 09

Jan 09

Feb 09

0

Southwest/Southside

Median Sale Price 2009-2010, by Region The up-and-down real estate economy was felt throughout the state, although it affected some regions more than others. The Central Valley region saw the lowest sales drop from 2009, while the Roanoke/Lynchburg/Blacksburg area saw the biggest decline in sales.

And while more homes were sold overall in the Virginia Beach-NorfolkNewport News area, there was much more volatility as well.

$600,000 $500,000 $400,000 $300,000 $200,000 $100,000

Northern Va

Roanoke/Lynchburg/Blacksburg

Other

Central Valley

22 January/february 2011

Southwest

Hampton Roads/Chesapeake Bay

Dec 10

Nov 10

Oct 10

Sep 10

Aug 10

Jul 10

Jun 10

May 10

Apr 10

Mar 10

Feb 10

Jan 10

Dec 09

Nov 09

Oct 09

Sep 09

$0 Aug 09

Jul 09

Units Sold 2009-2010, by Region

Greater Richmond

Southside

www.VARealtor.com

regions, for example) see deeper discounts being given. And — while Charlottesville, Winchester, and Washington areas have seen the final sale price move closer to what’s been asked, most of the rest of the state has seen the opposite as homeowners are willing to accept less. (Unfortunately, there’s no way to know exactly what effect short sales and REOs have on these numbers.)

Realtors® are pretty good at knowing the right asking price for a home, so it’s no surprise that the sale price is usually close to the asking price in terms of percentage. But a small percentage difference can still mean hundreds or thousands of dollars difference, so any trends are worth noting.

The ask/sold difference statewide tends to hover around 98%. But some areas (the Danville and Kingsport

96.64

96.36 96.98

98.89 97.73

97.53

97.07 96.58

95.86

95.05

97.02

96.37 95.95

95.18

96.28 95.50

90.88 91.23

92

94.34

94

93.73

94.36 94.00

95.5

96.55 96.19

95.95 96.17

95.65

94.88

96.26

96

96.00

98.14

98

97.99 98.23

100

98.66

Sale Price vs. Asking Price 2008-2010, by Region

89.31

90 88 86

Winchester

Washington

Va Beach

Roanoke

Richmond

Lynchburg

Kingsport

Harrisonburg

Danville

Charlottesville

BlacksburgChristianburgRadford

State Average Ask/Sell Ratio

84

2008 2009 2010

Foreclosures Foreclosures across the state remained almost unchanged from 2009 to 2010, but that figure is misleading. Only the Northern Virginia region saw a decline in foreclosures, and the area’s large stock of housing skewed the overall results. Most areas, in fact, saw an increase in foreclosures.

For example, while NoVA saw a Volume 18 ● Issue 1

28.2% decline in Q4 foreclosures (compared to 2009), every other region saw an increase — 32.4% in the Central Valley, 45% in Southwest Virginia, and 71% in Southside.

However, quarter to quarter (i.e., Q3 to Q4 2010), every region saw declines in foreclosures, from a 4% decrease in Hampton Roads-Chesapeake Bay to a 29% decrease in the Central Valley.

January/february 2011 23

fortune didn’t extend to home sales, which continued to be buffeted by other forces, from economic forecasts to the often-unseasonable weather.

In 2009, the U.S. stock market began to recover from the previous year’s declines. (It’s risen about 10% since January 2009.) But the stock market’s

Dec 10

Nov 10

Oct 10

Sep 10

Aug 10

Jul 10

Jun 10

May 10

Apr 10

Mar 10

Feb 10

Jan 10

Dec 09

Nov 09

Oct 09

Sep 09

Aug 09

Jul 09

Jun 09

May 09

Apr 09

Mar 09

Feb 09

Jan 09

Virginia Home Sales and the U.S. Economy (scales mixed for comparison)

Units Sold US Unemployment S&P 500

30-Year-Fixed Mortgage Rate 2010 6.00 5.50 5.00 4.50 4.00 3.50

Dec 10

Nov 10

Oct 10

Sep 10

Aug 10

Jul 10

Jun 10

May 10

Apr 10

Mar 10

Feb 10

Jan 10

Dec 09

Nov 09

Oct 09

Sep 09

3.00

* Taking into account people receiving unemployment and those who have exhausted their benefits but still seek full-time work.

24 January/february 2011

Meanwhile, the U.S. unemployment rate began to decline from its high in January 2010, but remained above 13 percent almost all year,* while consumer confidence dipped in February, peaked in May, but otherwise remained fairly stable. Inflation, which started the year at about 2.7%, dropped sharply in July and didn’t reach 1.5% until December.

Nationwide home sales showed a recovery toward the last half of the year, according to Lawrence Yun, NAR chief economist, but still remained below the 2009 pace. (For 2011, Yun predicted that “The recovery will likely continue as job growth gains momentum and rising rents encourage more renters into ownership while exceptional affordability conditions remain.”)

Existing-home prices were slightly www.VARealtor.com

below 2009 levels, perhaps because of a more distressed homes being on the market — 36% in December 2010 vs. 32% the year before. (Distressed homes typically sell for 10 to 15 percent below traditional homes.)

And real bargains continued to be had in the mortgage market. Despite a jump in December, rates for 30-year fixed loans remained among the lowest in history: 4.7% in December, part of trend that began in mid 2009.

Finally, a quick look at property pricing.

Not surprisingly, homes costing between $100,000 and $300,000

make up the majority of sales, although plenty also sell in the tiers just below ($50,000 to $100,000) and just above ($300,000 to $400,000). l

Market Share in 2010, by Price 600,000-700,000 500,000-600,000

1-50,000

00 -35

0-1

00

,00

0,0

0,0

50

30

,00

0

0

00,00

000

00-5

00,

0-4

400,0

,00

350

700,000-800,000 800,000-900,000 900,000-1,000,000 1M-2M+

00

100,000-1

250,000-300,000

50,000

150,000-2

00,000

-

00

,0 00

0

,00

0 25

2

Additional data for this story comes from the U.S. Bureau of Labor Statistics, Freddie Mac, Standard & Poor’s, and the Conference Board.

Volume 18 â—? Issue 1

January/february 2011 25

Legislative Agenda:

By Jay DeBoer, Vice President of Law and Policy

26 January/february 2011

The Virginia General Assembly’s 2011 session began on January 11 and will last 46 days. Although a “short session” year, this is also an election year for all 140 members of the General Assembly.

Adjustments to Virginia’s biennial budget will be proposed and adopted. Later in the year, new House of Delegates, Senate of Virginia, and congressional districts will be created in a special redistricting session.

VAR has an aggressive but common-sense agenda of legislation we’ll advocate for this year. Our package includes measures that will benefit the public as well as Realtors®.

2011 Eliminating the Refinance Tax House Bill 1908 — Del. Jackson H. Miller; Senate Bill 780 — Sen. W. Roscoe Reynolds

Virginia offers a favorable tax exemption for recordation taxes on refinancing of mortgage loans — those taxes assessed for recording deeds of trust and modifications. If you refinance your loan with the same lender, you don’t pay recordation taxes on the amount refinanced. However, if you refinance with a different lender, the tax is due.

These days, it’s nearly impossible to determine who owns a mortgage loan, because the lending industry has www.VARealtor.com

changed and evolved so much since this exemption was created. As a result, problems have cropped up due to varying interpretations by court clerks across the state. Some charge everyone, some exempt everyone.

VAR is backing legislation that will extend the tax exemption to ALL refinancing, regardless whether with the same lender. This will provide a true benefit to Virginia’s homeowners, and relieve the confusion and risk to the court clerks as well. A separate component of this legislation will make clear that recordation taxes are to be based on sales price.

Setting Realistic Standards for Assessment Appeals Senate Bill 1350 — Sen. Thomas K. Norment

If the owner believes that the value on his reassessed property has been set too high, he must challenge that determination before the local Board of Equalization. The current standard to reverse the assessment is high — one must present overwhelming proof that the property is worth less than the assessed value.

This legislation will set a fairer burden for challenging an assessed value.

To use a football analogy, instead of carrying the ball down to your opponent’s 20-yard line, you would need only to cross the 50-yard line. This standard will apply, however, only in an appeal of the Board of Equalization decision to the local circuit court. If the owner wins his case, the bill will also freeze the reduced value for two years.

Volume 18 ● Issue 1

Barring Hidden Private Transfer Fees Senate Bill 931 — Sen. Ryan McDougle

Some real estate developers have created a method of receiving a mandatory fee payable to them each time a piece of property is sold. These fees are an added burden to those buying and selling real estate, and are often buried deep in legal documents. VAR is backing a bill to ban these hidden private transfer fees. Fees charged by and payable to an association, such as a condominium or homeowner’s association, will continue to be permitted.

No man’s life, liberty, or property are safe while the legislature is in session.

— Judge Gideon J. Tucker, Final Accounting in the Estate of A. B. (1866)

Clarifying Details of Real Estate Agency Relationships House Bill 1907 — Del. Jackson H. Miller

We call it “the agency bill.” It’s a large legislative initiative this year, generally dealing with agency relationships — and stating clearly that a brokerage relationship with a client begins when a written agreement is signed .

It allows “dual agency” to occur after a fuller disclosure of what the agent can and cannot do for the clients. It sets out clearly what minimum terms must be included in agreements – such as payment, duration, and a statement of services to be furnished. Finally, it permits you to keep most of your records in electronic form.

This legislation does much more, however. It also eliminates the “practice tracks” for post-license education; it moves the content of the Residential Property Disclosure Act form to a website, which will be updated every year (instead of your forms); and it grants you immunity from liability for using or relying on inaccurate data that you receive from a public

January/february 2011 27

record, an appraiser, or even from your client. A three-hour CE course will be required on the many changes anticipated from this one major piece of legislation.

Responding to Defective “Chinese” Drywall House Bill 1610 — Del. Glenn Oder; Senate Bill 942— Senator John Miller

There are at least 400 (and possibly more) properties in Virginia, built during the middle of the last decade, that contain drywall imported from China that produces or emits a corrosive gas that can damage electrical and mechanical equipment, and has been claimed to make many persons ill. In response to the problems this building material has caused, VAR is supporting legislation that will help to prevent more people from becoming “victims” of this drywall.

The bill will require any agent (whether for a buyer, seller, landlord, or tenant) to disclose any known defective drywall to a potential purchaser or tenant. When the drywall is identified to local government, a reduction in the property’s assessed value must be made.

Managing Common Interest Communities (Property Owner’s Associations and Condominiums)

Unauthorized fees and charges by associations are prohibited. Coverage of association managers and employees by protective bonds is clarified, and self-managed associations are brought within the purview of the law.

Correcting the Use of Cluster Ordinances Senate Bill 783 — Sen. John Watkins; House Bill 1931 — Del. Danny Marshall

Fast-growing localities are required to permit “clustering”, which consists of a more densely developed residential area surrounded or accompanied by larger unbroken “green” or undeveloped portions of a property. Some localities have imposed so many restrictions and conditions on this type of development that it is impossible to use as intended. This bill will prohibit localities from frustrating the intent of the legislature as to this smart growth tool.

It’s important to understand that these bills will change and evolve throughout the session. VAR will monitor those changes and report back to you at the adjournment of the session. Look for Capitol Connections in your in-box every Monday for the latest developments on these bills. l

House Bill 1674 — Del. Brenda Pogge

While this legislation is primarily a continuing “tweak” of the law as it deals with these familiar associations and their managers, there is an extension of the provisional managers license for an additional year, and a provision permitting VAR-sponsored education to be used to qualify someone to be an association manager.

28 January/february 2011

www.VARealtor.com

accessibletech ANDREW KANTOR

Look behind you Using a wireless hotspot? A new tool makes it incredibly easy for someone to hack into your accounts.

Security people love to scare you. (My theory: Americans have it so good that we look for things to worry about.) So, in the spirit of flu scares, terrorism scares, shark scares, flesh-eating bacteria scares, et al., here’s another to add to your list. Firesheep.

Firesheep is a simple, free add-on for the Firefox Web browser. When you’re on any wireless network, it lets you see when anyone else on that network logs into Amazon, Facebook, Flickr, Google, LinkedIn, Twitter, YouTube, and a bunch of other sites.

And then it lets you log in as any of those people.

Yes, you read all that correctly. If I have Firesheep and we’re on the same wireless network (at work, Panera, whatever), when you log into your Facebook account, with a single click I can log in as you. Then I can post as you. Send messages as you. And so on.

Isn’t technology grand? A simple, free tool lets anyone on a wireless network assume the identity of anyone else on that network who logs into any of a long list of sites.

Let’s just say that I speak from experience when I say it works almost flawlessly. That’s because, except for banks and other financial services’ sites — which are protected against the security hole Firesheep uses — most sites do not secure the connection from you to them.

Here’s a crude analogy: When you log into a site like Facebook, you enter your password. Facebook checks it, and assuming you’re legit, it sends you back a piece of data that acts like a wristband at a concert — it tells Facebook “this computer is allowed to access the account.”

The trouble is, Facebook (and so many other sites) don’t encrypt that data “wristband” when they send it to you. So Firesheep can read it and make a copy.

Presto! Instant access to your stuff.

There are some caveats. Financial institutions use a Volume 18 ● Issue 1

If you connect while on a wireless network, someone using Firesheep can log in as you. connection that’s secure from end to end. You can tell it’s in use when the address starts with https:// instead of just http://. So chances are no one can hack into your bank account.

And Firesheep doesn’t give a hacker your password, it just gives access. So, because most sites require your existing password to create a new password, someone January/february 2011 29

accessibletech using Firesheep won’t be able to change yours.

In terms of silver linings, though, that’s it. Slim pickings.

Bottom line: If you connect to any of those sites while on a wireless network — no matter what kind of encryption it uses, how long your password is, what browser you’re using — someone using Firesheep can log in as you. Sitting in your favorite café, browsing at the airport, paid and logged in at your hotel, even in your home or office, someone on the same network can become you.

At home you should be safe, of course, because only family members are using your network. (Unless you’ve left it unencrypted. In that case, your neighbors could not only steal your bandwidth, they could check out your life story.)

Let me try to anticipate some questions.

I’m not using Firefox. I use Internet Explorer (or Chrome, or Opera, or Safari). Can they still get into my account?

Yes. It doesn’t matter what browser you use.

Does Firesheep only work on public networks, like at Starbucks?

Nope. It works on any wireless network — private or public, password-protected (e.g., in your office or hotel room) or not.

What about the 4G wireless card I got from my cell provider? Is that also a wide-open door?

Good news: Firesheep only works on Wi-Fi connections, so you should be safe connecting through your mobile network. If your computer can switch between connection types silently, though, you’ll want to keep an eye on which connection you’re actually using.

You’re kidding.

Nope.

But I’m in a hotel and had to pay for access and use a password.

If the hacker is also using the hotel’s network (i.e., she’s paid for access as well), she can get in.

But our office network is secure — it has 128-bit AES encryption through WPA-2, plus an angry dog and a snake pit!

It doesn’t make a difference. If someone is on the same wireless network, that means you’re both on the same side of the fence, as it were. You do trust everyone in your office, right?

It can’t be legal!

Firesheep is (probably, but I’m not a lawyer), but what a user does with it may or may not be. (It’s a variation on the old adage: Firesheep doesn’t break into your account. Hackers break into your account.)

All right, what can I do?

Very little, unfortunately.

Limited options Let’s say someone is using Firesheep to get access to your Facebook account? How would you know? It depends on how subtle he is. If he’s just nosing around, you’d probably never be the wiser.

But if odd things started to appear in your name — maybe your Facebook status is changed to “Camping out for Justin Bieber tix!!!” or a friend asks you “Why did you post all those pictures of garden gnomes to Flickr?” — then you might start to wonder.

Once again, if a Firesheep user doesn’t do something 30 January/february 2011 www.VARealtor.com

overt, you’ll never know — but he’d be able to browse through your account with impunity.

What’s more, until you click “Logout,” that person can continue to log in as you even when you go your separate ways — i.e., even when you’re no longer on the same network. You go home from Panera, he goes home from Panera… and he can still log in as you because that digital “wristband” is still good.

All right, you ask, what’s to be done? Answer: Not much.

If you use Firefox to browse the Web, there’s an addon available called HTTPS Everywhere (find it at www.eff.org/https-everywhere). It forces Firefox to log into most sites using the same encryption that banks use. Yes, the subtext is that Facebook, Twitter, et al., offer secure connections, they just don’t publicize the fact.

If you use Internet Explorer, Opera, Safari, or any other browser, though, you’re out of luck. Your only option is to use a virtual private network, which is not something you can (easily) set up yourself — typically it’s done by your office’s IT department; programs like LogMeIn Hamachi² (logmeinhamachi.com) purport to make it simple.

If you use a VPN, you don’t log directly into, say, Twitter. Instead, you first connect to your office (securely) from your hotspot at the airport, hotel, Starbucks, etc. From there you go out to the wider Web. Because your connection to the VPN is secure, all

Could be worse. The folks running the DEF CON 18 hacker conference could use the same security hole and post your name on the “Wall of Sheep.”

Volume 18 ● Issue 1

your other connections are also safe.

If your office doesn’t have a VPN available — and precious few do — you can use a VPN service such as PublicVPN.com or HotSpotVPN. They charge seven or ten bucks a month for access, but you know you can browse safely. (PublicVPN is less expensive, while HotSpotVPN offers some extra features like day-at-atime rates. Both have annual discounts.)

And that’s it for options: A) Use Firefox with the HTTPS Everywhere extension, B) use your office’s VPN (if it exists), or C) pay for VPN access. Otherwise, every time you use a wireless connection, you’ll have to wonder if you’re alone. l

There oughta be a … rule?

So why, you might ask, do big-name sites like Facebook and Twitter not use the fairly-simpleto-implement security that would protect users from Firesheep attacks? Granted, privacy has never been high on Facebook’s list of priorities; it makes its money by selling your personal information to advertisers and marketers. But wouldn’t compromised users be bad for business?

The fact is, most of these sites do implement the security. (If they didn’t, the HTTPS Everywhere plugin couldn’t work.) What they don’t do is advertise the fact. At one point it may have been about the cost if a large number of users began demanding security (imagine that!), but today that cost is negligible.

So back to the original question: Why? Most likely because there hasn’t been much of an outcry from users. Firesheep got attention, but mostly in the tech community. And, while it may not cost much to implement proper security, it does cost something, and it does take effort.

So until the outcry from users is large or loud enough, it may be a while before there’s change.

Too bad. As Firesheep’s author said, “Going forward the metric of Firesheep’s success will quickly change from amount of attention it gains, to the number of sites that adopt proper security. True success will be when Firesheep no longer works at all.”

January/february 2011 31

rpacreport As of January 11, 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)

John Dickinson Hall Associates, Inc. Union Hall

John McEnearney McEnearney Associates, Inc. Alexandria

STERLING R INVESTORS ($1,000–$2,499)

Katy AllenbaughRichards First American Home Buyers Protection Midlothian

Bob Adamson McEnearney Associates, Inc. McLean

Sherry Bailey Century 21 New Millennium Stafford

Mary Ann Bendinelli Weichert REALTORS® Manassas

Brad Boland Jobin Realty Reston

R. Scott Brunner Virginia Association of Realtors® Glen Allen

Vic Coffey Re/Max All Stars Realty Daleville

Mary Dykstra RE/MAX Valley Realtors® Roanoke

Nathan Hughes Bandazian & Holden Richmond

Pat Kline Avery Hess Realtors® Springfield

Vonda Lacey Lacey Real Estate Group Fishersville

Susan Mekenney Re/Max Allegiance Alexandria

GOLDEN R ASSOCIATION ($5,000) Williamsburg Area Association of Realtors®, Williamsburg

Virgil Frizzell Long & Foster Real Estate Herndon

Margaret Handley M.C. Handley, Ltd. McLean

32 January/february 2011 www.VARealtor.com

STERLING R INVESTORS ($1,000–$2,499)

Vinh Nguyen Westgate Realty Group, Inc. Falls Church

Susan Oh New Star Realty & Investment Fairfax

Jane Quill Re/Max Presidential Fairfax

Anne Rector Long & Foster Real Estate Alexandria

Zinta Rodgers-Rickert Re/Max Allegiance Fairfax

Fetneh Schacht Long & Foster Real Estate Vienna

Trudy Severa Long & Foster Real Estate Reston

Cindy Stackhouse Century 21 Stackhouse & Associates Dumfries

Thomas “Mack” Strickland, Jr. Strickland Realty Chester

Trish Szego ERA-Elite Group, Realtors® Fairfax

Karen Trainor Weichert REALTORS® Fairfax

Shanna Wiseman Parr & Abernathy Hopewell

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.

Volume 18 ● Issue 1

www.VARealtor.com/RPAC January/february 2011 33

Dear Virginia Beach, Are you ready?

The Realtors are coming back.

In October 2010, Virginia’s Realtors® descended on the Virginia Beach Convention Center for the REal Show — the state’s largest gathering of real estate professionals.

Now we’re gearing up for 2011.

. 7-8.

Mark your calendars: Oct

varbuzzcontest Here’s your chance to win a cool ViewSonic 9-inch Digital Photo Frame just for reading this magazine and VARbuzz, our official blog and ‘water cooler.’

It works like this: Solve the puzzle below. On April 4, go to www.VARbuzz.com. There you’ll see simple instructions telling you what to do next. Follow them to the final answer and instructions for sending it in.

There will be a deadline. We’ll take all the correct entries we receive by that deadline and draw one randomly. That winner gets the photo frame. Simple, huh?

Notes: This contest is only open to current members of the Virginia Association of Realtors®. Contest winners must skip two issues before they’re eligible to win again. All decisions about correct answers rest with VAR staff, and are final.

Bribes are accepted but not acted upon.

This issue’s puzzle: 1. What was the nation’s average rental price in December 2010? (Quick Hits) 2. How many days is the 2011 General Assembly session supposed to last? (Legislative Agenda) 3. What house bill number does “the agency bill” have? (“Legislative Agenda: 2011”) 4. How many housing units were sold statewide in June, 2010? (“By the Numbers”) 5. Finally, a tough one: In “Last Word,” Scott Brunner mentions a biblical passage from Galatians. Forget the chapter — what is the verse number?

Now that you’ve got your five answers, hang onto this form until April 4, when you’ll get your final instructions at VARbuzz.com.

Two great speakers. One great show.

The REal Show is Virginia’s largest event for real estate professionals.

When you’re there, be sure not to miss two incredible keynotes.

Laurie Janik is NAR’s 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.

And she’s very good at her job.

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.

Volume 18 ● Issue 1

Juliet Funt — yes, she’s Allen’s daughter — has made her own reputation as a fantastic speaker. Thanks to her show-biz background, from improv comedy to classical theatre, she’ll grab your attention and hold on. (She’s trained the LAPD in human relations, and she’s served as a liaison between Israelis and Palestinians — so yeah, she can deal with a tough audience.)

And thanks to her experience helping people cope with ever-more-hectic lifestyles, she’ll have you thinking, planning, and laughing about your life and your business.

January/february 2011 35

Visit our expo to meet these and more great exhibitors.

2-10 Home Buyers Warranty

JES

Realty Executives

www.2-10.com

www.jeswork.com

realtyexecutivesva.com

Access National Bank

Kathy’s Accessories

Samuel I. White, PC

www.accessnationalbank.com

www.siwpc.net

Liberty Mutual American Home Shield

www.libertymutual.com

Scentsy Wickless Candles

Magnets USA

www.inascentfun.scentsy.us

www.ahswarranty.com

Atlantic Bay Mortgage

www.magnetsusa.com

SentriLock, LLC

www.atlanticbay.com

My Marketing Matters

www.sentrilock.com

Bath Fitter & Kitchen Saver

www.mymarketingmatters.com

www.bathfittermidatlantic.com

Old Republic Home Protection

www.vavideotours.com

Blu Skyy Realty

www.orhp.com

Supra

Skymie Video Tours, LLC

www.bluskyyrealty.com

www.supraekey.com

Outstaffing, Inc. Centralized Showing Service

www.outstaffing.com

www.showings.com

Pearl Insurance

Systems Engineering www.seisystems.com

www.pearlinsurance.com

Cox Communication

UPS www.ups.com

Re/Max EXIT Realty Virginia

www.remax.net

www.exitviriginia.com

First American Home Buyers Protection

www.vhda.com

Real Estate Information Network

zipLogix

www.reinmls.com

www.ziplogix.com

www.firstam.com/warranty

RealFocus HMS Home Warranty www.thinkhms.com

VHDA

www.realfocus.com

And thank you, sponsors!

Gold Sponsor:

VHDA

Cox Communication

Liberty Mutual

www.vhda.com

www.cox.com

www.libertymutual.com

Samuel I. White, PC

RealFocus

www.siwpc.net

www.realfocus.com

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.

VAR: Take us for all we’re worth

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

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

To find out about conferences, seminars, and professional education

Ask for Lisa Noon, Vice President of Member Outreach lisa@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

Call (804) 622-7955* * You must register first at www.VARealtor.com/LegalHotline

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 TASC/BizPlan, Medical expense tax benefits T-Mobile, Wireless service

Our CEO is Scott Brunner (804) 249-5712 scott@varealtor.com

Volume 18 ● Issue 1

Ask for Meredith Cox, Director of Political Communications meredith@varealtor.com VAR 2010 Leadership Team

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

VAR Member Service Partners

DNCSolution, Do-not-call solutions Security code SC1795VR

To reach our Legal Hotline

For information about RPAC

UPS, Shipping and more VAR Wireless Center Wireless plans and hardware 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

January/february 2011 39

lastword SCOTT BRUNNER

You see these big letters?

In college, as an English minor, I took a really wonderful course called Literature of the Bible. It was taught by the dean of the college, an erudite don who, despite his dry-as-dust demeanor, managed to impress on us how funny the Bible could be — if inadvertently.

One of his examples was from Paul’s letter to the Galatians, in which Paul is incensed that believers there had so quickly forgotten what he’d taught them on his previous visit. “You see these big letters I’m writing to you?” he asks in exasperation, as if to say, “I’m gonna write this really big here so this time you’ll get it.” (Okay, it’s not belly laughs, but still....)

Which leads me (in a roundabout way) to my point: Sometimes your VAR leaders and staff feel exasperated ourselves, compelled by principle to write in “big letters” in hopes that our members will hear us. It was in that vein that we produced our December Commonwealth: to write large our concerns about maintaining Realtor® political clout through RPAC. We knew, of course, that not everyone would be won by our arguments, but we also knew that many members avoided RPAC based on misunderstandings.

Predictably, that cover story rubbed some of you the wrong way. From our 30,000 members we received fewer than 30 negative responses to the magazine, but those 30 were fairly upset with us.

Frustratingly, some respondents 40 January/february 2011

defended their decision not to invest in RPAC by citing the very misperceptions that we thought we’d debunked in the magazine article.

(And a couple called us communists, but that’s another story.)

affiliation at the door and put support for their real estate business ahead of a candidate’s political party.

• We give to Republicans, we give to Democrats, and we’re

We knew, of course, that not everyone would be won by our arguments, but we also knew that many members avoided RPAC based on misunderstandings.

I believe responsibility for a failure to communicate almost always rests with the communicator, not the communicatee (is that a word?).

With that in mind, the gist of some of the responses we received compels me to reiterate a few points: •R PAC contributions are voluntary. You don’t have to invest.

However, if you make your living in real estate, we think it’s in your interest to at least consider the reasons RPAC supports certain candidates over others.

•R PAC endorses candidates based on their stance on real estate issues only. We recognize that our towns, state and nation are confronting challenges that go beyond real estate, and that you may vote for a candidate for reasons unrelated to your business. It would be improper for us to endorse candidates for their stanace on any issues other than real estate.

• RPAC endorsements are made not by staff, but by RPAC Trustees who are Realtors® like you. They must check party

fairly balanced between the two parties. We interview candidates before determining whom to support. RPAC’s endorsements are based solely on those interviews and, when the candidate is an incumbent and has cast votes for or against us, on the candidate’s voting record on our issues. So, for instance, our endorsement of Bob McDonnell over Creigh Deeds for governor last go-’round was a result of the candidates’ record and their interviews.

Likewise our endorsement of the Democrat Steve Shannon over the Republican Ken Cuccinelli for attorney general. And ditto in every local, state, and congressional race in which we’re involved.

Back in college, the Apostle Paul’s large print became a running gag in my Bible Lit class — shorthand for: This is important. Pay attention.

Which is all to say … you see these big letters? l Scott Brunner, CAE is VAR’s chief executive officer. Contact him at scott@varealtor.com www.VARealtor.com

Scan and find out how An independently owned and operated member of The Prudential Real Estate Affiliates, Inc.

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