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Source: Information included in this report is based on data supplied by MRIS and its member Association(s) of REALTORS, who are not responsible for its accuracy. Does not reflect all activity in the marketplace. January 1, 2010 – December 31, 2010. Information contained in this report is deemed reliable but not guaranteed, should be independently verified, and does not constitute an opinion of MRIS or Long & Foster Real Estate, Inc. ©2011 All Rights Reserved. Exclusive affiliate of Christie’s International Real Estate in select areas.
EOE
firstword ANDREW KANTOR
PUBLISHED BY THE VIRGINIA ASSOCIATION OF REALTORS® The Business Advocate for Virginia Real Estate Professionals Trish Szego, CRB, CRS President Mary Victoria Dykstra, ABR, CRS President-Elect Bradley J. Boland Vice President John Daly, SFR Treasurer John Dickinson, CCIM, 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. Virginia Association of REALTORS® members pay annual dues with a one-year subscription included within their dues. Periodicals postage paid at the Glen Allen, VA post office and additional mailing offices. USPS Per. # 9604. Postmaster: Send address changes to: Commonwealth magazine, 10231 Telegraph Rd., Glen Allen, VA 23059-4578. Custom Publishing Services provided by Network Media Partners, Inc.
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Follow and friend us! VARealtor.com/twitter VARealtor.com/facebook VARealtor.com/linkedin VOLUME 19 ● ISSUE 1
Truth in numbers I HATE HEARING about a quarterback’s passer rating. Hearing that Joe Schlabotnik’s is 96.3 means absolutely nothing to me because there’s no context for it. Contrast baseball’s “batting average” which makes sense: It goes from zero to 1.000. Meanwhile, a perfect NFL passer rating is 158.3 (in college it’s 1261.6). Huh? Sure, there’s a detailed formula for calculating it — five of them, actually — and I’m sure the math is solid, but the final result doesn’t have a connection to reality. There’s no context. At least in baseball you can say that a guy who bats .500 gets a hit 50 percent of the time — twice as often as a guy who bats only .250. Without context, even the most accurate numbers are, as far as I’m concerned, meaningless. (Just think about the kid who brags, “I got 100 on the SAT!”) But baseball isn’t off the hook. Sure, batting average makes sense, but even sensible numbers aren’t useful if they aren’t the right numbers. Batting average, it turns out — as anyone who read Moneyball can tell you — isn’t very useful. It doesn’t take into account how often a player walks, or whether he gets extra bases. A guy who hits 25 triples in 100 at-bats will have the same average as a guy who hit 25 singles. Finally, numbers have to be complete. If I told you I save 25 cents a gallon on gas by using
a different station, that sounds good… until I mention that I have to drive 30 miles out of the way to do it. “Save 25 cents a gallon” is accurate and useful, but it’s not complete. (Think about that next time a politician claims to have created a gazillion jobs. What kind of jobs?) So numbers have to have context, have to be useful, and have to be complete. Otherwise they’re just fancy squiggles. That’s why we work like gangbusters when we put together our Home Sales Reports. Tossing a lot of figures around is easy — but that doesn’t help you much. We want to be sure that not only are the numbers we give (and get) accurate, but that you can actually use them. In real estate more than just about anything, numbers aren’t just numbers — they’re people’s homes and your livelihoods. So we’ve taken the extra steps to put these particular squiggles in context, and to talk to people about what they mean. You’ll see the fruits of our labor starting on page 22. Enjoy. ●
Andrew Kantor, Editor andrew@VARealtor.com FEBRUARY/MARCH 2012
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February/March 2012 Volume 19 ● Issue 1
contents
departments 4 quickhits The latest news and announcements for Virginia’s Realtors®
12 statswatch The numbers that shape your world
14 legallines Cover Photo by Corbis
Questions and answers about Virginia real estate law
18 lifelessons When real estate pros break the rules ... and get caught
20 formfactor You asked, we responded: Meet VAR’s four new basic commercial forms
29 accessibletech All your data, all your devices — make them play well together
in every issue 1 firstword 32 rpacreport 35 contactvar 36 lastword
features
16
Settle smoothly
22
A battle over vested rights
24
The numbers issue
One of Virginia’s top settlement attorneys offers some simple tips for making the process a whole lot easier.
VAR weighs in with the Virginia Supreme Court on a question of property rights when a citizens group demands that a brand-new development be torn down, vested rights or no.
By most accounts, 2011 was the year things began to turn around. See for yourself with a graphical look at the statewide and regional numbers from across Virginia.
APEX Award of Excellence winner 2
February/march 2012
www.VARealtor.com
Nancy & Thomas Shaver, Regional Owners PRIME FRANCHISE TERRITORIES SELLING QUICKLY! 800-906-EXIT www. exitvirginia.com Brokerage, Independently Owned and Operated. Not intended to solicit individuals or property already under contract.
quickhits
ANDREW KANTOR
MERS
Trouble brews
MERS, title, and real estate How is MERS affecting home buyers and sellers? It could be clouding titles — something that affects homeowners, but also sellers and buyers. And as those clouds are continue to hang over the market, homeowners are beginning to use them to fight back. MERS (Mortgage Electronic Registration Systems) exists so track the sale of mortgages between lenders. That way banks can buy and sell loans (or pieces of them) without the pesky problem of local paperwork. The loans are placed under MERS’s name, and when one is sold, it’s just a matter of updating a record. All that is well and good... to a point. But in that process a problem arises: The deed for the house gets separated from the mortgage for the house. And that can lead to questions of ownership lasting decades. Picture it this way: You loan me $25,000 to buy a car. I sign a paper that says “I promise to pay you back or you can take the car” — a promissory note — and I staple the car’s title to it. We put it in a file. 4
February/march 2012
When I pay off the loan, you give me back that title and throw away the note; we’re square. But if I stop paying, you use the title to repossess the car; it’s proof of ownership, just in case a cop stops you. But MERS makes that much more complex. Imagine that instead of just filing the car’s title and my promissory note, you give them to your friend, Joe Mers for safekeeping. “You are now officially the owner of this car,” you tell Joe. In fact, because Joe claims to be great at recordkeeping, other car dealers do the same. You collect the payment, although (for record-keeping purposes) Joe officially owns the car. But no one ever files any paperwork with DMV. Joe then files the title away, but he takes the promissory note and sells it to whatever financial institution wants it (or a piece of it). Thus Joe ends up holding a lot of titles for a lot of people, but he’s essentially sold ownership of the cars to investors. And he never once tells DMV about the arrangement.
Then one day I fall on hard times. I stop making payments to you. You call Joe and tell him, “Andrew stopped making payments. Go get the car.” Joe puts on his Repo Man outfit and tries to take the car out of my driveway. A cop stops him as he’s trying to hotwire it. Joe shows the title as proof of ownership. But then the cop checks with DMV. And it says, “Joe Mers? Never heard of him. He’s not the owner.” “Sure I am,” says Joe, waving the title. “I have the title. I don’t have to tell DMV.” “In this state,” says the cop, “you do.” And then we’re headed to court. You gave the title to Joe Mers, sure, but did you do it legally? If you didn’t file the paperwork with DMV (and pay the fee), doesn’t that cloud the title? And didn’t Joe sell the ownership to those investors? Seeing the commotion, I come running out. “I don’t care if he has that piece of paper,” I say. “He doesn’t own the car. He’s a thief.” “The owner of the car gave me this title,” insists Joe. “That means I can take the car.” “I don’t think so,” replies the cop. “You can’t just give someone a car without telling DMV about it.” And so, to MERS
That’s a rough look at the issue with MERS, but instead of car titles and loans, we’re talking about homes and mortgages. Does MERS have the right to foreclose www.VARealtor.com
Social media
if the local paperwork wasn’t filed? Different courts have ruled differently. And seeing that the question is far from resolved, more and more homeowners are fighting MERS’s right to foreclose based on (among other things) that lack of paperwork. You might think that challenging MERS is simply a way of stalling things — after all, if someone didn’t pay his mortgage he really can’t expect to stay in the home, right? But it’s actually a bigger issue, even (especially) for homeowners who stay current. See, the MERS paperwork shuffle can also cloud the title for someone who does pay off his mortgage. Without proper record keeping — and that includes filing city or county paperwork — the true owner of the home (and recipient of 30 years’ of mortgage payments) isn’t always obvious. So When the loan is paid off, the bank may not be able to issue the homeowner a clear title. So even after 30 years, another lender could come and say, “You’ve been paying the wrong people. We own the house.” Of course, then it would be a simple matter of contacting the mortgage servicer you’ve paid for the past few decades and getting everything straightened out. How much trouble could that be?
Volume 19 ● Issue 1
Lenders look to Facebook, Twitter to see the company you keep Good news! If your friends have strong credit and are solid, upstanding citizens, it might be easier for you to get a loan. That’s because banks and other lenders are increasingly turning to Facebook to get a handle on potential borrowers. No, they’re not just looking at what you post or share; they’re looking at who your friends are. If you’re hanging around with the right people (read: those with a high credit score), it looks good for you. The opposite is true, of course. If the company you keep isn’t good company, well, that doesn’t reflect well on you, FICO score or no FICO score. And the reverse is also true: If a bank knows that you’re a good customer, your “friends” might be as well. Call it the “birds of a feather flock together” marketing plan, and lenders are beginning to use it, identifying your friends online and marketing to them. So you know how everyone is telling teenagers and 20-somethings to watch what they post to Facebook because it could cost them a job? Well, now that applies to seasoned pros as well: Watch what you post to Facebook — and who your friends are — because it could cost you a loan (or get your friends’ mailboxes full of marketing).
New commercial forms VAR is now making basic commercial forms available to all members — that includes purchase agreements, listing agreements, letters of intent for purchase, and letters of intent for lease. Turn to Form Factor on page 20 for the details. February/march 2012
5
quickhits NAR
Rebenchmarking: What’s the deal? Existing Home Sales, Pre and Post Revisions (SAAR)
Units (000)
7,000 6,000 5,000
Post Revision Pre Revision
4,000 3,000 Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Here’s everything you need to know about the revised — “rebenchmarked” — figures NAR released for existing-home sales . The quick recap: In early 2011, it came to light that NAR’s national home sales data was inaccurate — it overestimated the number of existing homes sold from 2007 through 2010 by as much as 20 percent. Despite what conspiracy theorists would have you believe, there’s a simple and straightforward reason for the error. Exact national data is impossible to get thanks to MLS overlap, lack of data in some places, and a lot more, especially FSBOs, which are much harder to track. Thus, NAR’s figures have always been based on estimates. But when the housing bubble burst, it threw those estimates out of whack as FSBO numbers plummeted… but NAR’s estimates of FSBO sales didn’t. Hence, the rebenchmarking. Of course, national data is only meant to give a general feel for the housing economy. It’s great for economists and planners, but for Realtors in the trenches, local data is where it’s at. There isn’t much of a surprise with the revised NAR data; we’ve known for most of a year that there was going to be a significant drop. And remember: These are only national figures. Local numbers haven’t changed, as those are based on MLS figures and aren’t estimates. Less talking! More numbers! The actual revised numbers show that existing-home sales were 14.6 percent lower in 2010 than originally
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February/march 2012
Jan-09
Jan-10
Jan-11
Jan-12
reported. Looking at all of 2007 through 2010, the new figures show sales were 14.3 percent lower than originally estimated. (Obviously, national inventory estimates over the same period are affected equally.) What isn’t affected: • Changes reported during the last five years (“up XYZ percent in April,” “down PDQ percent in 2010,” etc.) • Pricing data • Local sales and pricing figures (because, as noted above, they’re not estimates) • “Months supply” figures • And… that’s it. So for all the talk on various economics blogs about what a big deal NAR’s new numbers were going to be, the end result is rather anticlimactic. Of course there are plenty of those conspiracy theorists claiming that it was all a plot by NAR to make the housing market sound better than it was so that… um, well, there isn’t any good explanation. They’re missing the point, of course. NAR’s numbers are only meant as a guideline — a barometer for the overall housing economy. And because the month-tomonth and year-to-year changes weren’t affected, the guideline still works. We can still say that sales in Month A were 12 percent higher than in Month B, and so on. And no one is making buying decisions based on national estimates.
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.
quickhits Paperwork
FHA buyers blocked from many condos
8
Many condo communities in the state have lost their FHA certification, something buyers and sellers don’t realize until a contract is blocked. So if you have clients that are in any way connected with condo or townhouse communities — owners, managers, potential buyers — they need to be aware of this: FHA revoked its certification of every condo earlier this year. If the management hasn’t reapplied, units can’t be purchased with an FHA loan.
FHA certified. It’s incredibly easy to do. Just go to VARealtor.com/ condocheck. Enter a ZIP Code or just the city and state and you’ll get a listing of every condo association there. If the rightmost column says “expired,” it’s not FHA certified. Then it’s time to get in touch with any affected clients, as well as the condo board or association. There’s a good chance they’re not even aware of the issue.
It used to be relatively easy for a condo complex (or “project” in FHA parlance) to get certified by the FHA, meaning the agency would loan money to qualified buyers of units there. But with the burst of the housing bubble, FHA realized that a lot of delinquent and foreclosed properties were condos. So it tightened its rules. Essentially, in May 2011 it ‘de-certified’ every condo and townhome in the country, and it required them to re-apply for certification. Some condo associations and management were on the ball and immediately got their paperwork in order. But many — for whatever reason — did not. Some may have not realized they had to get recertified. Others may have had officers concerned about liability issues if they signed certification documents. And of course some condos simply don’t meet the FHA’s requirements. Whatever the reason, the end result is that buyers who want a unit in these uncertified condos are ineligible for FHA financing — something many sellers don’t discover until late in the process when they learn that their pool of prospective buyers has shrunk considerably. And because the certification process can take months, deals fall through — or never get off the ground in the first place. Fewer buyers means prices will have to go down Bottom line: We need to get the word out to condo owners, condo associations, property managers, and anyone who is involved in buying or selling a condo or townhome: Find out whether your condo community is
Requirements for FHA certification For a condo complex (or “project”) to have its units qualify for FHA loans, it must meet the following requirements: • Insurance Coverage: Projects must be covered by hazard and liability insurance and, when applicable, flood and fidelity insurance. • Commercial Space: No more than 25 percent of the property’s total floor area in a project can be used for commercial purposes. • Investor Ownership: No more than 10 percent of the units may be owned by one investor. This limitation also applies to developers/builders that subsequently rent vacant and unsold units. • Delinquent Home Owners Association (HOA) Dues: No more than 15 percent of the total units can be in arrears (more than 30 days past due) of their condominium association fee payments. • Pre-sales: At least 50 percent of the total units must be sold prior to endorsement of a mortgage on any unit. • Owner-occupancy Ratios: At least 50 percent of the units of a project must be owner-occupied or sold to owners who intend to occupy the units. • FHA Concentration: No more than 30 percent of the total units can be encumbered with FHA insurance. • Budget Review: The homeowners’ association budget must include sufficient funds to “maintain and preserve all amenities and features unique to the condominium project” as well as insurance coverage.
February/march 2012
www.VARealtor.com
Client tip
Remind your clients: Their credit will be re-pulled just before closing
Economy
Home prices stabilizing? If you ignore distressed sales, says the Wall Street Journal, the latest numbers from CoreLogic say that housing prices are actually stable. Of course in the real world you can’t ignore those short sales and REOs, but from a long-term economic view at least, it’s good news. While total home prices were down by 3.9% from one year ago, prices were down by just 0.5% from one year ago when excluding distressed sales. In September, total prices were down by 3.8% from one year ago, but non-distressed prices were down by 2.1%. “That’s nice,” I hear you say, “But out on the front lines we’re looking at the big picture. And falling prices are falling prices.” Ah, but maybe that’s not exactly the case. Quoth the Journal: If it’s true that prices of nondistressed homes are stabilizing, even as distressed homes continue to fall in price, it would mean that a distressed home is “increasingly being seen as a poor substitute for a non-distressed home,” writes Stephen Kim, the Barclays housing analyst.
VOLUME 19 ● ISSUE 1
The headline says it all, but it’s worth noting. As part of their Loan Quality Initiative, Fannie and Freddie are having lenders re-pull applicants’ credit reports just before closing, in case something has changed since the loan was first approved. So… tell your buyer clients not to open any new credit accounts (e.g., “Get a JC Penney credit card and save 10%!”), buy any cards, or even spend a lot of money before they get their loans.
Mortgages
Delinquent mortgages flat — that’s good and bad Good news/bad news for mortgage delinquencies, according to Lender Processing Services. In the second half of 2011, the number of seriously delinquent homeowners (those 90 or more days behind) was essentially flat. Good news: Serious delinquencies were 25 percent lower than at their peak in January 2010. Bad news: The downward trend for delinquencies seems to have stopped. As LPS put it in a statement, “[W]hile the situation is not getting markedly worse, it is not improving either,” and cautioned that there are still a lot of delinquencies coming down the pike. Also worth a note: Of those 90-days-or-more-past-dues loans, Fannie and Freddie started far fewer foreclosures in November. That could indicate lenders getting their paperwork in order (and thus there will be a lot of foreclosures starting soon), or it could mean that borrowers are working out payment plans or modifications with their lenders.
FEBRUARY/MARCH 2012
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quickhits Trends
Outer is out, inner is in
Paperwork
New Freddie Mac requirement looks to combat short-sale fraud In an effort to cut down on the amount of fraud it’s finding in short sales, Freddie Mac has issued a new set of guidelines. The problem: Working with an unethical agent, someone makes a low bid on a short sale and the agent doesn’t disclose any competing (higher) bids. When the sale goes through, the new owner turns around and sells the property to one of those higher bidders, pocketing the difference. The process is called “flopping.” The solution: Making it clear on an affidavit to be signed by all parties that they are liable for any “negligent or intentional misrepresentations, but not those of other signatories to the affidavit.” The new rule takes effect January 1, 2012, but, Freddie Mac said in its guidance, “Servicers are encouraged to incorporate these changes immediately.” Read more at Housing Wire. Read the details from the Freddie Mac bulletin. 10 FEBRUARY/MARCH 2012
Once upon a time, people left the cities for the suburbs — and then the further suburbs (or “exurbs”). There they could buy their McMansions and impress their neighbors with their huge tracts of land. Then the housing bubble burst, and suddenly — between mortgages (and second mortgages), car payments, and the cost of commuting — those exurbs weren’t terribly appealing. Result: The most expensive and desirable housing in metro areas went from being the outer ring to (nowadays) the inner — well, innerer — city. Quoth Christopher Leinberger, senior fellow at the Brookings Institution and professor of practice in urban and regional planning at the University of Michigan, “Today, the most expensive housing is in the high-density, pedestrian-friendly neighborhoods of the center city and inner suburbs. […] Simply put, there has been a profound structural shift — a reversal of what took place in the 1950s.” More interesting for Realtors is the future. The move inward is here for the long haul. An NAR survey found that aging boomers want to live “in a walkable urban downtown,” or near a small-town center. And those millennials (born in the early ’90s) who can afford to live on their own prefer the vibrance of downtown. (As Petula Clark put it, “The lights are much brighter there; you can forget all your troubles, forget all your cares.”) In fact, NAR found that only 12 percent of future homebuyers want to have to drive from the suburbs. Add the fact that cities are a lot more environmentally friendly, and you have a what may be a solid, longterm trend.
And more trends
Builders making granny more welcome Home builders know a good market when they see it, and what they see are “multigenerational” homes — houses designed for families with an extra body or two, e.g., a grandparent. What makes them a bit different. Could be any number of amenities: A separate entrance, two kitchens, two master bedrooms, a “mother-inlaw apartment,” and so on. Says Bloomberg: Those features may help lure buyers at a time when new homes are selling at a record slow pace and more Americans are living with extended families, said Megan McGrath, a homebuilding-industry analyst with MKM Partners LP. ●
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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
statswatch With so many stats and charts in this issue (starting on page 24), we thought we’d use this space for a quick trip in the Way-Back Machine™. Let’s set the dial for 50 years ago — 1962.
1962
That 1962 household was in the 20% tax bracket, (with a top bracket of 91%); today the average household pays 15% in income tax (with a top bracket of 35%).
A typical new home would cost about $12,500, and renting would run an average of $110.00 per month.
And that car you drive to and fro? In ’62 the average car would have run you about $3,125. You could get something nicer, of course — say, a Chrysler New Yorker with your choice of engines: a V8… or a larger V8. Live where the roads aren’t as good? How about a hot SUV: The International
Gas ran about 28 cents a gallon — that’s $2.09 in today’s dollars. (In case you’re interested, adjusted for inflation, gasoline prices peaked in July 2008.)
The average American family had an annual income of $6,000; today it’s closer to $50,000.
Harvester Scout — $2,150.
Coverage and protection. Some things you shouldn’t take chances with — and your real estate license is one of them. VAR helps protect you from being blindsided by a lawsuit with our Legal Resources Center. Search legal columns from our extensive library, read articles, and watch videos that can help you know what’s a safe move — and what’s likely to hurt. Visit us at VARealtor.com/LegalResources
Another great member service brought to you by the Virginia Association of REALTORS®
12 February/march 2012
www.VARealtor.com
1972
1982 More an import person? A zippy little Renault would run you about $1,395.
1992
2002
2012 And today you can hold in the palm of your hand more computing power than the entire world had in 1962. Welcome to the future.
Finally, a quick grab bag: Thanksgiving turkey was about 35 cents a pound. Campbell’s soup ran 10 cents a can. And on February 14, 1962, the Dow Jones Industrial Average closed at $713.67, and it included the prices of such companies as American Can, Eastman Kodak, International Harvester, Bethlehem Steel, and Woolworth.
A three-minute long-distance phone call would have run about $2.50+tax — $18.70 in today’s dollars. (The Trans-Atlantic Cable and the first telecommunications satellite both came online in 1961, but you probably couldn’t have called Europe on a middle-class income.)
INVEST IN RPAC, INVEST IN YOUR BUSINESS NEIGHBORHOODS SCHOOLS COMMUNITY FRIENDS CLIENTS FELLOW REALTORS AMERICAN DREAM CHILDREN FAMILY FUTURE VISIT REALTORSCHOOSE.COM FOR MORE INFORMATION. Contributions are not deductible for federal or state income tax purposes. Contributions to RPAC are voluntary and are used for political purposes. 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. Up to 100% of your contribution is sent to National RPAC and is charged against your limits under federal law (2 U.S.C. 441a); National RPAC returns up to 70% of your contribution to Virginia RPAC for use in connection with the election of state and local candidates in Virginia.
VOLUME 19 ● ISSUE 1
FEBRUARY/MARCH 2012 13
legallines BLAKE HEGEMAN
Proper property management I have not crunched the numbers, but my guess is that at least 25 percent of VAR’s Legal Hotline inquiries are property management related. Four years ago, it would have been less than half that. More people are engaging in this complex area of real estate now, in part, due to market considerations. Unfortunately, some of these agents are practicing property management without the proper training. Below are answers to a few commonly asked questions, but please also take away from this article the complexity of property management and the need to become competent before practicing it.
Q:
Do I have to be licensed to practice property management? A: Property management per se is not a licensed activity and no license
is required. But realize that the statement only applies if property management is limited to duties like taking the rents, handling the calls from tenants, coordinating repairs, etc. Leasing, on the other hand, is a licensed activity and must be done through a licensed firm. So while no real estate license is required if someone is just doing property management without leasing, brokers should have policies and procedures in place concerning agent activity outside the firm and a prohibition against commingling outside business with firm business.
Q:
Can a landlord refuse to rent to five college students without worrying about discrimination?
A: Ordinarily, yes. College kids are not a protected class.
However, be careful that the refusal to rent does not disproportionately affect a protected class. An example would be an ad refusing to rent to college kids in an area adjacent to a Historically Black College and University. The landlord’s intent may not be racist but his action could have a disproportionate affect on a protected class. Everything else being innocent, it’s not a problem to refuse to rent to college kids. Please note that some localities have enhanced protections for minors so you should check with your locality before running this type of ad. 14 February/march 2012
Q:
Do employees have to be licensed to manage an employer’s property? A: Consider the following
example: An agent’s father owns income-producing properties that he wants his son to lease and manage. May the son manage the property and be paid directly by his father, or must he be paid through his principal broker? It depends. If the son is employed by his father’s company and is paid as an employee of the company, he need not be paid through his broker, unless there’s an agreement with his broker to the contrary. This is for two reasons: First, a company may handle its own affairs — even acts for which a real estate license would otherwise be required — whether its employees are licensed or not. Second, independent contractor agents may hold other jobs. The son may not, however, be hired as the company’s agent except through his firm, in which case all compensation must come through his broker.
www.VARealtor.com
Q:
If an owner is otherwise exempt from the provisions of the Virginia Residential Landlord Tenant Act because the number of units owned is below the statutory minimum, does he nonetheless come under the Act by simply listing the property with a Realtor®? A: No. Unlike the fair housing laws, to which otherwise exempt indi-
viduals become subject by the simple act of listing with a real estate agent, VRLTA does not say that listing with an agent brings the owner under the Act. However, landlords may opt into the VRLTA regardless of the number of units they own.
Q:
If a landlord receives notice of a foreclosure, does he have to notify the tenant?
A: Yes, the statute is clear:
§ 55-225.10. Notice to tenant in event of foreclosure. A. The landlord shall give written notice to the tenant of a mortgage default, notice of mortgage acceleration, or notice of foreclosure sale relative to the loan on the dwelling unit within five business days after written notice from the lender is received by the landlord. However, it also provides an exemption for managing agents that do not receive written notice from the lender: This requirement shall not apply (i) to any managing agent who does not receive a copy of such written notice from the lender or (ii) if the tenant provides a copy of the written notice from the lender to the landlord or the managing agent. You should also note that if you are offering a unit for rent, the law requires that the landlord “disclose in writing to any prospective tenant, at the time of offering such dwelling unit for rent, whether he has received any notice of mortgage default, notice of mortgage acceleration, or notice of foreclosure sale relative to the loan on the dwelling unit.” As above, this requirement “shall not apply to any managing agent who does not receive a copy of such written notice from the lender.”
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. VOLUME 19 ● ISSUE 1
Q:
An experienced property manager wants to join my firm and head a new property management division. I am the broker and do not have any experience with property management — is it safe to allow this new practice? A: I would be very cautious in
moving forward. The supervising broker is responsible for ensuring that brokerage services are carried out competently and in accordance with the law. If the broker is unfamiliar with the area of practice, it will be very difficult for her to ensure compliance with the law. I recommend that the broker educate herself about property management through training and closely monitor all activities of the property manager. Also, please remember this part of Article 11 of the Code of Ethics: Realtors® shall not undertake to provide specialized professional services concerning a type of property or service that is outside their field of competence unless they engage the assistance of one who is competent on such types of property or service, or unless the facts are fully disclosed to the client. ● FEBRUARY/MARCH 2012 15
legallines
Bonus Art Grace
Tips to a smoother settlement At the end of 1997, I had somehow survived law school and was just beginning to grind out a living as a general practice attorney in Stafford. That’s when the older brother of a good friend of mine from high school called. He was an attorney and had heard that somehow, against all odds, I had passed the Virginia Bar exam. So fourteen years later, you’re hearing from a fairly seasoned settlement attorney. I’m fairly certain that in the eyes of the public, being a settlement attorney ranks up there with many other prestigious jobs. I frequently am asked if you need a high school diploma to do my job, and was once asked by a plumber at a barbecue if I wanted to go “halfsies” with him on a title company he was considering opening. All kidding aside, I do frequently refer to myself as a trained monkey. The key however, is that I wear that title as a badge of honor. I may have a fairly repetitive job, and tend to do one thing over and over, but there are very few people in Virginia that know residential real estate transactions like this monkey right here. Because I believe no monkey should walk around refusing to share hardearned lessons, my goal is to offer a few things every real estate agent might want to do to enjoy smoother settlements. This information shouldn’t be all that novel, so grab a banana, soak it up — and I hope it helps.
Tip#1 Always remind your purchaser and seller that any funds they need to bring to settlement should be certified funds. If I had a dollar for every time someone tried to write me a personal check for more than $50,000, and then proceeded to yell at me for not taking it because of the inconvenience they would suffer traveling to their bank to get said funds, I’d have… well, more than a few dollars.
The goal at settlement is to keep your client’s blood pressure down. You should know that the contract calls for certified funds, and while lenders should communicate this to their borrowers, and the settlement company usually does as well, the buck stops with the agent. Protect your future stream of referrals and tell your client to bring certified funds to settlement, payable to the settlement company. Most settlement companies will accept personal checks for small amounts of funds. However, because that amount can vary, don’t assume what that amount will be. 16 February/march 2012
Tip#2 Listing agents should
always call their sellers about a week before settlement and ask how their move is going. This will give the agent the perfect opportunity to remind the seller about the condition the contract requires the seller to leave the property; “broom clean with all trash and debris removed,” is typical.
This phone call is important because human nature is for sellers to underestimate the time it will take them to move. By picking up the phone the week before settlement and reminding your sellers that, “the food in the fridge, the boxes in the attic, the tools in the shed, the old lawn mower under the deck, and the car up on blocks in the back yard all need to go,” you are not guaranteeing that the seller will get all that cleaning done, but you are guaranteeing that when they don’t get it all done and show up to settlement (in their pajamas after having not slept for two days, only to find an unhappy purchaser refusing to proceed with settlement without a $1,500.00 cleaning credit), they won’t blame you for not telling them earlier what their cleaning obligations were. I stress that the call should not be made any closer to settlement than a week, because heaven forbid that you call when they are starting to panic. They might actually ask you to come over and help clean. www.VARealtor.com
The goal at settlement is to keep your client’s blood pressure down. Make sure your contract is clear and unambiguously worded to do that — and keep clients happy.
Tip#3 Make sure the provi-
sions in your client’s contract stating when possession is to be given from the seller to the purchaser is clear and unambiguous.
For purposes of this tip, possession means the giving of keys to the purchaser. The time for your purchaser to discover that they have a difference in opinion over when they can have the keys should never be at settlement. A Friday evening settlement with a moving truck in the parking lot, five kids and two dogs in the back seat (one of which just threw up), and no keys is no way to start a weekend. Remember, there are no laws related to when the keys can be given to a purchaser. It is an issue that is negotiated in the contract between the seller and purchaser. Make sure your contract is clear and unambiguously worded to keep blood pressure down and clients happy.
Volume 19 ● Issue 1
Tip#4 Make sure the party responsible for having the utilities turned on
for the walk-through inspection actually has them turned on. It’s such a simple conversation to have prior to walk-through. Because on the day of walkthrough, if they are turned off, they typically cannot be turned back on.
This can lead to big headaches — headaches resulting in one of the parties being in default under the contract. Don’t let this oversight wreck the happy annuity your client should become — the annuity of future referrals. Always discuss utilities prior to walk-through!
Tip#5 When trying to calm an upset purchaser at walk-through because
the property is not in the condition called for by the contract, don’t immediately declare that you’ll demand that the settlement company hold an escrow from the seller’s proceeds until the repairs can be done.
While an escrow may be desirable, and your purchaser would probably prefer this remedy, mortgage lenders typically will not allow an escrow to be held for work that needs to be done. The worst thing that you can do is make yourself look like you don’t know what you’re talking about. Demanding a solution to a problem that is not even an option to your own purchaser’s lender might undercut your client’s confidence in you. While an escrow may be considered as one potential solution to a walk-through problem, you want to avoid creating the opinion in your purchaser that it’s the only acceptable solution. There are plenty of other potential walk-through remedies to escrows — remedies like closing-cost credits or third-party payments. Even the seller’s re-acknowledgment of their liability on a walk-through inspection form can be the basis for a legal cause of action against the seller in the future. In other words, while an escrow may be one potential solution to resolving a walk-through problem, don’t let your purchaser become so excited about that remedy that they won’t consider others. l Arthur Grace is a settlement attorney with Grace Stuart and counsel to MBH Settlement Group in Gainesville.
February/march 2012 17
lifelessons Kathleen Toler
You won’t get away with it Licensees who run afoul of Virginia real estate regulations can find themselves in the crosshairs of the Virginia Real Estate Board, facing punishment ranging from a small fine to loss of their license. Here are a few real-world examples taken from the
Excuses, excuses As an agent for Landover Valley Real Estate, Linda St. James had managed Brian and Randi Szuleski’s Virginia Beach property for several years. Unfortunately, it took one bad tenant to expose her poor record keeping. That tenant was three months behind on his rent, and moved out in the middle of the night. More than a year later, when auditing the account, Landover Valley discovered that St. James had failed to remit the tenants’ security deposit to the Szuleskis’ account. To make matters worse, because of St. James’s poor record keeping, even though Landover Valley eventually collected the money from the ex-tenant, the Szuleskis didn’t get a dime. The following March, the Szuleskis sent a written complaint to the Department of Professional and Occupational Regulation regarding St. James. In April, an investigator asked St. James to respond. On the day that response was due, St. James began to claim a variety of reasons for postponements. First, she asked the investigator to grant her an extension because she had been out of the office due to a death in the family. She was given another week to respond. 18 February/march 2012
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.
Then St. James asked for another extension because she said she had to go off-site to pull archived files — and her son was recovering from a serious fall. A few days later, she called the investigators and requested an extension because of the death of a close family friend. They denied her requests. The same day, the investigators e-mailed St. James requesting a meeting on June 2. On June 1, St. James e-mailed the investigators that she was out of town and her uncle’s surgery caused a delay in her return. She also said that her stenosis was giving her too much pain to drive alone. She rescheduled the meeting for June 11. At the meeting, St. James still did not have all of the requested documentation. The investigators gave her another 10 days, but she was still only able to provide some of the paper work; she sent a few more documents by e-mail the next day. But after all of the extensions and postponements, she still failed to produce seven of the requested items. Not willing to cut her yet another break, the Board fined St. James $850 and revoked her license.
Fraught with fraud While working for Foundation Empire Realty, Francie Alpon served as the listing agent for her clients, the Hardins. They entered into a contract with a buyer in January, although Alpon left Foundation in April and began working for R. Daneel Properties Realty. On June 3, back at Foundation, the Hardins and their buyer voided the contract, and the Hardins withdrew their listing agreement with Foundation. A day later, the Hardins and the same buyer entered into an almost identical contract — the only difference being the names of the listing and selling firms. This www.VARealtor.com
time, Alpon was the sole agent on the contract under a company named Seldon Realty (not, oddly, Alpon’s current firm: R. Daneel). When the same property was flipped a month later, Alpon represented the new sellers. On the contract, she listed herself again under Seldon Realty, although she was still working for R. Daneel, and the address, phone, and fax numbers on the contract belonged to R. Daneel. The title company, which handled the settlements for the property, issued a commission check for $5,600 to Seldon Realty, but Alpon had it reissued in her own name. Alpon was anonymously reported to the Virginia Real Estate Board for performing services outside her brokerage. R. Daneel turned her license in, and Alpon didn’t respond to the Board’s allegation letter; she never appeared for her interview. The Board’s investigation revealed that Seldon Realty was a fictitious and unlicensed firm, and that Alpon was trying to receive her commission directly and deceitfully. (The name of her phony firm wasn’t very creative; Alpon once worked for Seldon Realty Executive Group, which hadn’t been licensed for several years.) Further investigation by the Board revealed that Alpon had been charged with credit card fraud, a felony, in 1999. Her conviction was reduced to petit larceny, a misdemeanor, a few months before receiving her real estate license in 2001. Although she had many opportunities to report her conviction to the Board while filling out forms that specifically asked if she had any convictions, she repeatedly lied. For this long list of illegal and unethical behavior, Alpon was fined $9,500 and her license was revoked.
Volume 19 ● Issue 1
A bad start In mid-June, Karl Agathon told Tom Foster, his principal broker at Five Corners Realty, that he was thinking about starting his own property management firm. Little did Foster know, Agathon wasn’t just thinking about it — he had already done it. In fact, from the beginning of April through the end of June, Agathon had entered into a dozen property management agreements and negotiated 15 residential lease agreements under his company name, Boomtown Properties. On June 22, Agathon finally broke the news to Foster that — guess what? — he was already in business. Foster was not happy to hear it; he specifically hadn’t agreed to allow Agathon to start his own property management firm because of the conflict of interest with Five Corners property management division. So Foster returned Agathon’s license to the Board and removed his name from his company’s website. Unfortunately, it seems that starting his own business wasn’t in Agathon’s best interest, either. He neglected to get a real estate license for Boomtown Realty until several months after he began doing business. He mishandled tenants’ rent payments, placing them in a regular, non-escrow checking account. When the Board investigated, Agathon said he wasn’t sure whether or not to place prepaid rent payments in an escrow account, so he tried Googling the topic. He said he didn’t look into the Board’s regulations because he didn’t know where to find them. Agathon was fined $3,500 and required to complete 40 hours of continuing education. l
February/march 2012 19
formfactor BLAKE HEGEMAN
The Virginia Association of Realtors is pleased to announce the addition of commercial forms to its Forms Center! Through a licensing agreement with Central Virginia Regional MLS, VAR now offers these forms:
form 700
Commercial Purchase Agreement
form 710
Commercial Listing Agreement
form 720
Commercial Letter of Intent for Purchase
form 730
Commercial Letter of Intent for Lease
These forms are meant to help you improve basic commercial deals, but they are no substitute for commercial real estate expertise. Talk to your broker, and remember that the Code of Ethics requires that you’re competent in any real estate discipline you’re practicing — and that includes commercial real estate. You could subject yourself and your firm to discipline if you’re unprepared. We strongly encourage agents who lack commercial experience to obtain training before engaging in these often-complicated transactions. If you’re interested in entering the commercial real estate market, training is available throughout Virginia. (You can get training specifically for these forms by contacting the Richmond Association of Realtors at (804) 422-5000 and asking for the education department.)
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
Interested in getting into commercial real estate? VAR’s Commercial Council is the place to start. In addition to a variety of educational opportunities, membership provides access to the Virginia Commercial Information Exchange — a database of commercial property listings, recent sale and lease comps, plus tools for research, marketing, and networking. For more information about the Virginia Realtors® Commercial Alliance and its Virginia Commercial Information Exchange (CIE), visit VARealtor. com/commercial. 20 FEBRUARY/MARCH 2012
that often ends up as a call to our Legal Hotline. (Shameless plug: (804) 6227955.) 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. WWW.VAREALTOR.COM
Don’t guess.
Lots of people try to predict the market, and it seems like everyone has an opinion about what’s happening. Stick with the facts: the monthly Virginia Home Sales Report. It’s got clear charts, insightful analysis — and it’s all in the numbers, not in a crystal ball. Visit us at VARealtor.com/HomeSales
Another great member service brought to you by the Virginia Association of REALTORS®
A Battle Over Vested Rights Much of the work VAR does for Virginia’s Realtors® and property owners is done behind the scenes. Here’s one example of how we’re working on your behalf. VAR has filed an amicus brief with the Virginia Supreme Court in a case that goes to the heart of property rights in the state — and one that could (all hyperbole aside) have disastrous implications for Realtors®, developers, and homeowners across Virginia.
22 July/August 2011
www.VARealtor.com
The story is this: A Hampton developer called “POH 2010,” working with the city, began construction on a mixed-use development in the Buckroe area. The city issued a press release promising that it would be “an exciting kickoff to the City’s plans for redevelopment in the Buckroe community,” and — at POH’s request — Hampton’s zoning administrator issued a written determination of vested rights. Those vested rights are what the case is all about. The concept is straightforward: Having “vested rights” means the developer had spent enough time and money (“proceeded sufficiently far down the path of development of the land”) that the local government can’t change its mind and rezone the property to prohibit the development. It’s a critical public policy, and it protects private property rights. Without it, a developer could build a giant mall on commercial property only to have a new local government rezone it “residential” a decade later and demand the mall be demolished. Because vested rights can depend on a subjective determination — did the developer really invest enough in the property? — developers will often ask the local government to issue a written decision granting those rights, so there’s no argument. That’s what happened in the Hampton case. (Just in case, though, the law allows anyone 30 days to contest that determination. In Hampton, no one did.) Construction was well on its way to a September, 2011 opening when a local “citizens’ committee” suddenly asked the City Council to repeal the rezoning. Surprisingly, the Council agreed, raising a legal question: Would Volume 18 ● Issue 4
POH be required to demolish the entire development? Naturally POH appealed, pointing out that it not only had vested rights (the development was all but complete), but that it had those rights in writing — and the citizens’ committee had had 30 days to contest that. The Hampton Circuit Court agreed with POH; its rights were vested and it didn’t have to tear the development down. The citizens’ committee had ample opportunity to argue against the rezoning and didn’t. Now the citizen’s committee has appealed to the Virginia Supreme Court. (Where they are getting the money to do this is an interesting — and unanswered — question.) The City of Hampton and the Virginia Peninsula Association of Realtors® have asked VAR to support the position that POH has vested rights. VAR is doing just that by filing an amicus brief in the court. That’s essentially an explanation to the court of how a particular case might have broader effects. We are, in effect, representing Virginians’ property rights by saying, as the Virginia Peninsula Association of Realtors® put it, “[T]here will be uncertainty for property owners, preventing development from being financed or sold. How would a homebuyer ever be able to buy a property if the entire development is subject to collateral attack by an independent lawsuit after the house is already built?” The legal work on the case is being paid for by VAR’s Legal Action Fund, which exists for just this kind of situation — when a local Realtor® association needs help with a case that is likely to have statewide consequences. l July/August 2011 23
Virginia in 2011: Sales, Prices, Trends
By the
Numbers Could 2011 have marked the bottom of Virginia’s housing market? After more than five years of bad news, it looks like the freefall may have stopped. Saying “At least things didn’t get any worse” may sound like faint praise, but in this case it’s good news. Sales were, in large part, on par with 2010 — a year with artificially high numbers thanks to the FirstTime Homebuyer Tax Credit. Prices were down somewhat, which isn’t unexpected; that was a mighty big bubble that burst, and we still have a little ways to go to get back to historically normal levels. Of course, different regions of the state saw different economies in 2011— a jump in sales in the Central Valley, while Greater Richmond remained relatively flat. Foreclosures down statewide... except for the Roanoke/Lynchburg/Blacksburg area. In short (and as always), it was a year of ups and downs. But for the first time in a while, the ups seem to be holding their own.
FAST FACT
+0.2% Change in units sold statewide, 2010 to 2011
-5.1%
Change in Virginia median sales price, 2010 to 2011
Statewide
Looking at sales, the yearly cycle is apparent, as is the boost from the FirstTime Homebuyer Tax credit starting around September 2009 — and ending abruptly in July 2010. 2011’s sales lagged 2010’s for the first half of the year because of that
artifical boost, but moved ahead for the second half. The beginnings of a recovery? Time will tell. Meanwhile, prices remained relatively stable — declining only about four percent over the past three years.
UNITS SOLD MONTHLY, 2009-2011 12,000 Post tax-credit decline
2008 2009
10,000
Tax credit boost begins
2010 2011
8,000
6,000
DEC
NOV
OCT
SEP
AUG
JUL
JUN
MAY
APR
MAR
FEB
JAN
4,000
$220,000
$235,000
$234,900
$233,000
$239,900
$225,000
$229,900
$229,900
$225,839
$210,000
$225,000
$216,000
$250,000
$229,000
$270,000
$249,900
MEDIAN SALES PRICE MONTH TO MONTH, 2009-2011
$200,000 2008-Q4 2009-Q1 2009-Q2 2009-Q3 2009-Q4 2010-Q1 2010-Q2 2010-Q3 2010-Q4 2011-Q1 2011-Q2 2011-Q3 2011-Q4
VOLUME 19 ● ISSUE 1
FEBRUARY/MARCH 2012 25
By Region UNITS SOLD, 2010 VS. 2011
Northern Virginia -8.4%
Central Valley 27.8%
Central Virginia 5.3%
Roanoke/Lynchburg/Blacksburg 5.1% Southwest Virginia 16.8%
Hampton Roads/ Chesapeake Bay 6.3%
Southside Virginia 8.0%
Most regions of the state saw gains from 2010 to 2011 — the exception being Northern Virginia (above). On the other hand, NoVA was the only region to see its median sales price increase from year to year (below).
MEDIAN SALES PRICE CHANGE, 2010-2011
Northern Virginia 1.6%
Central Valley -1.9%
Roanoke/Lynchburg/Blacksburg -3.9% Southwest Virginia -7.7%
26 FEBRUARY/MARCH 2012
Southside Virginia -5.8%
Central Virginia -6.6%
Hampton Roads/ Chesapeake Bay -8.8%
WWW.VAREALTOR.COM
Trends
37619
41083
45370
43474
REGIONAL CHANGES HOME SALES 2008-2011
12712
12077
Central Valley
12704
13394
5532
4327
4431
Northern Virginia
4856
This chart illustrates why 2011 may have been the beginning of the end of the housing-market collapse. With the exception of Northern Virginia, the trend throughout the state was similar: Sales dropping ... until 2011, when the numbers started to pick up, if slowly. Even more notable was that 2010 was the year of the First-Time Homebuyer Tax Credit, which saw sales jump during the first half of the year. Despite that, for most regions 2011 was even better.
6223
5923
6700
7404
Central Virginia
VOLUME 19 â—? ISSUE 1
1595
1477
1541
1690
2008 2009 2010 2011
18905
17790
18644
Southwest Virginia
19189
1113
953
1034
1071
Roanoke / Lynchburg / Blacksburg
Hampton Roads / Chesapeake Bay
Southside Virginia FEBRUARY/MARCH 2012 27
27.2%
1.8%
-26.7%
-6.1%
Central Valley
13.9%
-35.6%
28.6%
Northern Virginia
11.8%
19.4%
-14.6%
264.1%
13.7%
2011 QUARTERLY CHANGES IN FORECLOSURE RATE
14.9%
Foreclosures
Central Virginia
Q2
Q3
Q4
MEDIAN SINGLE-FAMILY HOME PRICE IN 2011 US
$164,773 VIRGINIA
$224,716 28 FEBRUARY/MARCH 2012
Southside Virginia
-26.7%
-4.3%
5.6%
-24.9%
-4.8%
Southwest Virginia
21.7%
-45.7%
-43.0%
Roanoke / Lynchburg / Blacksburg
Hampton Roads / Chesapeake Bay
COMING SOON When it comes to housing numbers, we can’t forget that they’re not just percentages and bar charts. They represent real people and real lives. In our first annual report on Virginia’s housing market — coming mid-February to a mailbox or Web page near you — we’ll look not only at the ways the housing economy has changed, but at what those changes mean to both Realtors® and homeowners. We’ll also see what those numbers might mean for the future. The recovery is coming, of course, but how fast? And what are the signs? Keep an eye on your mailbox or visit VARbuzz.com. WWW.VAREALTOR.COM
accessibletech ANDREW KANTOR
Data and devices: Making connections I just moved into a new house. The kitchen has more storage space, which is great — except that it means a lot more places to look for that spatula (no-not-thatone-I-mean-the-red-one-with-the-curved-handle). When you have a lot of places to store data, you can run into the same problem. Is that file on your work PC or your phone? You saved that phone number… but was it on your phone or the tablet you just got? Time to lay back with your Kindle to read… oh, wait, was the book on your iPad? You have a computer, possibly two (work and personal), at least one of which is a probably a laptop. You probably have a smartphone, too. And like it or not, chances are you’ll be getting a tablet of some sort in the next couple of years. Spread out among all these gadgets is your stuff — your data. Documents and mail and contacts and pictures and the address of that funny cat video, and who knows what else. Take the time to be smart about getting them to work together, lest you end up using a modern version of the “it’s in my other pants” excuse: “Oh, I have that on my other computer.” The goal is simple: Wherever you are (home, office, car, friend’s house) and whatever gadget you’re using, you should have access to the same files and information. Let’s talk about some easy ways to get there. Storing vs. syncing If you use an online storage service for your files, be aware of an important difference between storing your files and syncing them. All the cloud-storage services mentioned here — Dropbox, Box.net, Skydrive, etc. — let you store files. They’re essentially hard drives that don’t happen to be inside your computer. You can then use any device to add files to this drive, delete them, edit them, etc. But — and this is the crucial part — those files are stored on the company’s servers. Think of it as a storage unit you rent that you can visit any time.
Volume 19 ● Issue 1
In the clouds The simplest way to have all your stuff at hand is to store it on the Web, rather than on your computers/ phone/tablet. As long as you have an Internet connection, you can get to your files. (In fact, some services don’t necessarily require you to be connected; see “Store vs. sync”.) Thus is born the idea of Web-based (sorry, cloud) storage — services that let you put your files online for easy retrieval. Even better, most offer a lot of free space, certainly enough for hundreds of documents and photos. So you can start writing a document on your home PC, save it to your storage service, and grab it the next day when you’re at your office, or when you’re using your phone at a showing. Take a picture with your phone camera and save it to the cloud so you can grab it at home. Ditto if someone sends you a file (picture, PDF, whatever): You may get it on your phone, but a quick click or two and you can open it anywhere. Forget about e-mailing it to yourself or carrying a flash drive. There’s a long list of these cloud-storage services that offer lots of space and that have apps for every device you’re likely to have: desktop, laptop, phone, or tablet (not to mention access through any Web browser). Microsoft’s SkyDrive (technically “Windows Live SkyDrive”), for example, offers 25 GB of storage free (!), and it can be integrated into Windows so it looks
Storing:
February/march 2012 29
accessibletech like a second hard drive. (It’s even integrated into Office 2010.) There are more: Amazon Cloud Drive, Box.net, Dropbox, Google Docs, and SugarSync are some big names, but there are many, many others. No matter which you use (heck, use several!), you essentially have a hard drive that’s shared by all your devices.
Clips and snips These services are great for giving you access to all your files from all your gadgets, but you don’t always want to share files. Often you just want to save information. For example, imagine someone tells you “You gotta check out whatever.com/coolthing!” Or that you’re reading an article and there’s a chunk of text you want to save. Or something in a book piques your interest and you want to read more later. You could copy the bit of text, open a text editor, paste it in, and save it as “checkthisout.txt” or whatever, then upload it to your Dropbox or SkyDrive. Clunky. There’s a better way. Several. Call them “notetaking services” or “clipping tools,” the idea is that there’s software to let you quickly and easily grab (or create) a short snippet of information — an address, a quote, a fact, whatever — and save it online for access from anywhere. They’re integrated with your devices (for example, via Android’s “Share” menu, or simply as a folder) and designed to be very, very easy to use. Let’s say you’re reading an article in Time (on
On the other hand, sync services go a step further. Rather than simply storing your files, they make sure that every one of your devices has an identical copy. So if you have a file called “whatever.doc” on your iPad, when you edit that document, the sync service will automatically change the copies on all your other devices. Every device has a copy of the file; the sync service makes sure they’re identical.
30 February/march 2012
Evernote on tablet
Evernote on smartphone
Evernote on desktop
Syncing:
www.VARealtor.com
your PC, phone, or tablet) and see a great quote. You can select it and save it with your clipping tool, knowing that you’ll be able to read it any time from anywhere. Find a useful Web site? Save the address. Think of something you need to remember? Write a quick note. There’s a long and growing list of companies offering this kind of note taking. Evernote gets the lion’s share of attention (it’s available free for your PC and just about every kind of smartphone and tablet), but it’s far from the only one. Also quite nice (and free) are SpringPad and Read it Later, both of which are available for just about any device you can think of. Which one to use is a matter of taste. SpringPad has more features for organizing than Evernote, but with that comes a steeper learning curve. Read it Later is geared toward noting Web pages and text selections, but it’s dead simple to use. And, of course, there’s no reason not to try more than one.
Volume 19 ● Issue 1
None of these is a perfect, total solution obviously. Different devices are bound to contain different data. But with a few minutes — and zero cash — you can make sure that whatever gadget you have on hand has everything you need. l
We can remember it for you wholesale When it comes to media you buy online — music, movies, books, etc. — the company that sells it is usually happy to store it for you. Anything you buy from Amazon or Apple (to drop the big names) will sit on the company’s computers so you can get it any time. My wife, for example, owns a Kindle, but if she doesn’t have it with her, Amazon’s Android app will let her read her books on her phone.
February/march 2012 31
rpacreport As of January 10, 2012, 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 www.realtorschoose.com/contribute.
Golden R Investors and Associations ($5,000)
Crystal R Investors ($2,500)
• R oanoke Valley Association of Realtors®, Roanoke • W illiamsburg Area Association of Realtors®, Williamsburg
John Dickinson Hall Associates Inc., Union Hall
John McEnearney McEnearney Associates, Inc., Alexandria
Forrest Odend’hal Long & Foster Real Estate, Gainesville
Trish Szego ERA-Elite Group, Realtors®, Fairfax
Bill White Joyner Fine Properties Richmond
Sterling R Investors ($1,000)
Deborah Baisden Prudential Towne Realty Virginia Beach
CC Bartholomew Long & Foster Real Estate, Inc., Manassas
Mary Ann Bendinelli Weichert Realtors® Manassas
Brad Boland Jobin Realty Reston
Dale Chandler Greg Garrett Realty Newport News
Flo Chittenden Long & Foster Real Estate Inc., Manassas
Vic Coffey Re/Max All Stars Realty, LLC., Daleville
Billy Coons Olde Virginia Realty Suffolk
Tracy Comstock Comstock Realty and Investment, Alexandria
John Daly Rose & Womble Realty Company Newport News
Mary Dykstra MKB, Realtors® Roanoke
Virgil Frizzell Long & Foster Real Estate, Reston
Margaret Handley M.C. Handley, Ltd. Falls Church
Rusty Hulett Keller Williams Realty Chesapeake
32 February/march 2012
www.VARealtor.com
WHY I INVEST
Sterling R Investors ($1,000) -Continued
Jeanne Hockaday Virginia Country Real Estate, Ordinary
Karen Kidwell Long & Foster Real Estate, Reston
Vonda Lacey Lacey Real Estate Group, Fishersville
Jay Mitchell William E. Wood & Associates Chesapeake
Fred Morgan 1st Choice Real Estate Staunton
Roger Nakazawa Olympic Realty, Inc. Vienna
Jane Quill RE/MAX Presidential Fairfax
Anne Rector Long & Foster Real Estate, Alexandria
I invest in RPAC
Fetneh Schacht Long & Foster Real Estate, Vienna
Henry Scholz Hall Associates, Inc. Roanoke
Suzy Stone Century 21 AdVenture Realty, Fredericksburg
John Wilson Coldwell Banker Traditions, Williamsburg
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.
Volume 19 ● Issue 1
because even when I can’t be at the table, RPAC makes sure I’m not on the menu.” — Dick Thurmond,
President, William E. Wood & Associates, Longtime Sterling R VAR’s lobbying can only be as effective as the REALTOR® support behind it. RPAC and VAR work everyday to ensure that your business, and your clients, are protected from laws that threaten the American dream of homeownership.
Visit RealtorsChoose.com/ RPAC-101 to watch a video of Dick tell you why he is a longtime february/march 2012 33 RPAC investor
Don’t let your membership go to waste. Your VAR membership comes with lots of perks, including some great discounts from our Member Service Partners — savings on cell plans, insurance, shipping, and more. Missing out on them is like, well, throwing money down the drain. Find them all at VARealtor.com/Discounts
Another great member service brought to you by the Virginia Association of REALTORS®
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 8:30 a.m. to 5:00 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 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) 249-5702 scott@varealtor.com
Volume 19 ● Issue 1
Ask for Meredith Cox Director of Political Communications meredith@varealtor.com VAR 2012 Leadership Team
Trish Szego, CRB, CRS President ERA-Elite Group, Haymarket (703) 359-7800; trishelite@aol.com
VAR Member Service Partners
T-Mobile, wireless service
Our CEO is Scott Brunner
For information about RPAC
Zipform, electronic forms solutions Roost, social media management platform
Mary Victoria Dykstra, ABR, CRS President-Elect MKB REALTORS®, Roanoke (540) 989-4555 mvdrltr@aol.com Bradley Boland Vice President Jobin Realty, Reston (703) 437-1717 bradleyboland@gmail.com John Daly, SFR Treasurer Rose & Womble, Virginia Beach (757) 486-8800 jdaly@roseandwomble.com John Dickinson, CCIM, GRI Immediate Past President Hall Associates, Inc., Union Hall (540) 982-0011; jrdickinson@cs.com R. Scott Brunner, CAE Chief Executive Officer (804) 264-5033; scott@varealtor.com
February/march 2012 35
lastword SCOTT BRUNNER
Want staying power? Read this.
New research shows that Realtors® who make it have a few uncommon things in common It is traditional that the amateur columnist (c’est moi…), in his first posting of a new year, must litter the piece with certain hackneyed expressions, suitable for the occasion. To wit: New beginning. Clean slate. Fresh start. Now, having littered thusly, I’d like to talk about something else: How is it that some folks make it in this business — real estate sales, I mean, not column-writing — and some do not? Conventional wisdom abounds: Personality and temperament surely play a role. Self-discipline and a service orientation are important. Proper training and effective broker supervision give an essential leg-up. And the economic environment at the time of entry into the business is a factor, too — as in much of life, timing can be everything. But some recent research out of Pennsylvania provides some surprising (to me) new clues about the potential staying power of Realtors® — clues that go beyond conventional wisdom.
36 February/march 2012
To determine what factors put a Realtor at a higher risk of dropping out, the researchers looked at those who had dropped their Realtor association membership between June 2009 and July 2011. They found that over 40 percent of dropout association members had been in the business two years or less. No surprise there — nor in the fact that most respondents attributed their leaving the business to financial difficulty and the economy. More surprising, however, were these two findings: • Members who did not earn an education designation were twice as likely to quit. In other words, having at least one designation cut a member’s chance of leaving in half. The attrition rate for those with no designations was 27%, compared to only 11% for those with two designations. Clearly, ongoing education — beyond state-mandated post-license and CE requirements — is key to staying power. • Members not investing in RPAC were at a greater risk to dropout. The attrition rate for those who had not invested in RPAC was 28%, compared to 16% for those who had invested in RPAC for both of the previous two years. Now, granted, RPAC could be a chicken-and-egg sort of proposition: Does financial success lead to greater engagement in the profession and thus investment in RPAC, or is investment in RPAC a stimulus
for Realtors to become more engaged in the profession, and that engagement provides stability? Either way, the data suggest that RPAC investment may be a factor when it comes to a Realtor’s staying power. All of which is to say, here at the beginning of a new year (New beginning. Clean slate. Fresh start.), don’t overlook that value of extraordinary engagement in your profession: 1. Continue your education now. Don’t wait. Designation courses abound, from GRI to ABR, RLI, CRS and CCIM. Check with your local association of Realtors or visit varealtor.com for info. 2. Take time to learn the big-picture public policy issues impacting real estate — which almost always have implications for your ability to close a transaction. And, yes give to RPAC, that talisman of success. 3. Invest time in your local association. Those who engage and volunteer in association activities locally get the inside scoop on… well, practically everything impacting real estate in your area. Staying power in this business means continually sharpening your skills. We’re glad to have you as members. And we hope to keep you. l Scott Brunner, CAE, is VAR’s chief executive officer. Contact him at scott@varealtor.com.
www.VARealtor.com
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