I know what you did last night (p. 28) June/July 2012
A journal for real estate professionals published by the Virginia Association of REALTORS® • www.VARealtor.com
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PUBLISHED BY THE VIRGINIA ASSOCIATION OF REALTORS® The Business Advocate for Virginia Real Estate Professionals Trish Szego, CRB, CRS President Fairfax Mary Victoria Dykstra, ABR, CRS President-Elect Roanoke Bradley J. Boland Vice President Reston John Daly, SFR Treasurer Virginia Beach John Dickinson, CCIM, GRI Immediate Past President Union Hall 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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VARealtor.com/commonwealth VOLUME 19 ● ISSUE 3
Insert title here Having worked in academia, I can tell you without hesitation that professors — especially scientists — are the most petty people of all when it comes to titles. I remember being scolded by a chemist for calling him an “assistant professor” instead of an “associate professor” (and not in a friendly tone, either). And if you know your mythology, you’re aware that you can have power over someone if you know his ‘true name’ — Rumpelstiltskin being a perfect example. Parents use that today when they want their children to pay attention: “Samuel Wallace Ireland Kantor, you come here right now!” Names matter. Which is why we say that Realtors® are real estate agents, not “real estate sales people” or “real estate listers” or anything else. The word agent is important. It’s not a matter of ego or pay scale, either. It’s a matter of law. Under the law, as an agent you have certain responsibilities that the grocery-store cashier doesn’t. For one, you’re required to always, always act in your clients’ best interests. The guy at Electronics-R-Us trying to sell you $30 gold-plated cables has no such obligation; he can’t outright lie, but he doesn’t have to help you make the best choice. (Hint: With digital equipment there’s no difference.) But civilians don’t always understand your role. A potential buyer looking at a $300K listing of yours might say to his wife,
“Heck, I’d be willing to go to $350K for this,” not realizing that it’s your duty to pass that information along to your client. Or you might take on the role of a dual agent, then end up with angry clients who expect you to do more, not realizing that the law severely restricts you. That won’t help Realtors’ reputations: “What do you mean you can’t tell me whether I should drop the price?” That’s why VAR worked to change Virginia’s agency law this year. It’s about transparency, and about making sure that you’re protected from miscommunication or misunderstanding. In a sense it’s codifying best practices. You should already be explaining your role clearly to everyone in a transaction: “Please understand, Mr. Smith, that I work for the Joneses and my job is to act in their best interests” or “As a dual agent, I’ll be unable to offer you advice on the contract.” But not everyone does. So yes, there are some new rules to follow and some new forms to use. (Don’t worry. They’re simple.) But the minor inconvenience is far outweighed by the clarity and transparency they’ll add to relationships — and the trouble they’ll save Realtors in the long run. ● Andrew Kantor, Editor andrew@VARealtor.com JUNE/JULY 2012
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JUNE/JULY 2012 VOLUME 19 ● ISSUE 3
contents
departments 4 quickhits The latest news and announcements for Virginia’s Realtors®
12 statswatch The numbers that shape your world
13 legallines Questions and answers about Virginia real estate law
16 lifelessons When real estate pros break the rules ... and get caught
19 formfactor New agency law, new agency forms — check ’em out.
28 accessibletech Always feel like somebody’s watching you? You’re right.
features
20
Agency change
26
New real estate laws for 2012
in every issue
Virginia’s agency law is changing for 2012, and the differences will affect your business every day. Here’s our guide to what’s new.
Agency isn’t the only law that’s changing this year. Check out our overview of Virginia’s other new and updated real estate legislation.
1 firstword 32 rpacreport 39 contactvar 40 lastword APEX Award of Excellence winner 2
JUNE/JULY 2012
Corrections Our April/May issue contained two errors: In the cover story, “In this together,” we misidentified Karen Smith as coming from Centreville. In fact, there are three Realtors® in Virginia named Karen Smith. The one mentioned in our story is Karen Tilson Smith of RE/Max Commonwealth in Richmond. • In “Accessible Tech,” we wrote that the American Pacific gas water heater timer requires a plumber to install. In fact, the company told us, it can be installed by a homeowner; no technician (or plumber) required. We regret the errors.
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quickhits
ANDREW KANTOR
AGENCY
Agency law changes July 1: Get ready with VAR’s Agency Center
www.VARealtor.com/agency
Got questions about Virginia’s new agency law — ones that aren’t answered by the article on page 20? Fear not. VAR has launched a Web clearinghouse for everything you need to know about agency, from Q&As to statewide course listings. VAR’s Agency Center covers a lot of ground, including: • Agency law basics • An overview of the upcoming 2012 changes to the law • Information on the required disclosures and new VAR standard forms and contracts • Training and education information • A statewide agency CE course calendar • Training videos and other resources Visit today: VARealtor.com/agency.
MORTGAGES
Realtors have mucho influence over lender choice A third of homebuyers turn to their real estate agent for help choosing a mortgage lender — that’s what a new study from Inside Mortgage Finance found after surveying 1,800 agents in January. The new study suggests that real estate agents play a particularly important referral role in a housing market where financing contingencies have become a way of life. A few facts: • When they represented a buyer, agents recommended one or more mortgage providers nearly 60 percent of the time. • More than three-quarters of those agents recommended more than one firm. • Homebuyers accepted the agent’s recommendation
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JUNE/JULY 2012
58 percent of the time. (The math means that “real estate agents control or influence 34 percent of mortgage-financed home purchases.”) • The top reason a buyer wouldn’t take a Realtor’s recommendation: “existing banker relationship” (which might be as simple as a pre-approval letter). • Although most firms had “lender partners,” only 16 percent of buyers got a mortgage from one.
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POTENTIAL CLIENTS
What does Generation Y want, anyway? Generation Y — aka “20-somethings” — have a different view of the world than their parents. (Granted this is true of every generation.) That means their views on housing are also different — rent vs. buy, city vs. suburb, and so on. Considering these are the people who are now entering the housing market, it’s a good idea to know what they’re looking for. The folks at John Burns Real Estate Consulting did some number crunching and found a ton of interesting information about what kind of housing choices 20-somethings are likely to make. They aren’t rushing to buy. At one point, firsttime buyers made up half the market. These days it’s less than a third. Quoth Burns: “While purchasing a home is simply out of the question for most young adults, many are still capable of renting on their own, and millions of others have reverted to shacking up with mom and dad.” Burns projects renting to rise over the next several years (“[more than] 8 million renter households will be added from 2010 to 2015”) for several reasons. For 20-somethings, the big one will be debt and spending — from student loans to gadget purchases, they simply won’t have the income to qualify for a mortgage. Living at home isn’t a no-no. The Pew Research Center found that 41% of 25 to 29 year olds currently live with their parents, along with 17% of 30 to 34 year olds. But get this: According to a rather large Burns survey, more than 70% of people are considering buying a larger home at some point to accommodate extended
family, and another 19% are certain they will. The kicker? In most cases, “extended family” means adult children. Meanwhile, in its study about Generation Y’s housing preferences, The Urban Land Institute uncovered its own interesting trends. A few sample findings: • For the first time in decades, America’s average household size is inching up as Gen-Yers (and even some Gen-Xers) take longer to leave home—or return to their parents after losing a job. • More than half of those in their 20s expect to be homeowners… eventually. (Of those saying they do not expect to own by 2015, seven of ten claim they will own at some future time.) • Over half those currently living with their parents believe they will have acquired their own homes by 2015. • Hispanics are ahead of whites in their ownership expectations. Blacks have slightly more modest home buying goals, but the difference is not statistically significant. • They might not get the whole down-payment thing: 21% expect to put down less than 10% as down payment; 39% expect it to be between 10% and 20%. And 40% expect to come up with a down payment of more than 20%. (“That such a high percentage of future homeowners expects to put down less than 20 percent on a home purchase suggests that Gen Y may not be fully apprised of today’s tighter mortgage underwriting standards.”) There’s lots more food for thought in the study, which you can find at ULI.org.
STATS
10 percent of Americans plan to move this year American Express’s annual Spending & Saving Tracker survey found that about 10% of Americans (23 million people) are planning to move in 2012. And about 44% of those (10 million) plan to buy a home. Meanwhile, most homeowners (70%) are planning some sort of home-improvement project. No word on how many of those are realistic, and how many are “teach myself woodworking to build a new deck by myself.”
VOLUME 19 ● ISSUE 3
JUNE/JULY 2012
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quickhits SURVEY SAYS...
Fannie Mae: Americans still want to own homes The latest National Housing Survey from Fannie Mae shows that “Americans of all backgrounds continue to have strong aspirations to own a home” and that most people think that yes, it’s a good time to buy… and a bad time to sell. About 68% of the people surveyed said it was a “very good time” or “somewhat good time” to buy (evenly split between the two, in case you’re interested). The most enthusiastic? Gen-Xers (76% think it’s a good time to buy) and Gen-Yers (71%). And the more educated you are, the more likely you are to agree as well. But just because it’s a good time to buy doesn’t mean they’re going to — see “What does Generation Y want, anyway?” When owners were asked whether homeownership has “been very positive for you and your family,” 94% said it has, including 72% who rated homeownership as “very positive.” And renters? Only 81% rated it positive (and most of those said it was only “somewhat positive”). More good news: 64% said that, if they were going to move, they’d be more likely to buy than rent. Why own? Check out the chart on the right.
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“It means having a good place to raise children and provide them with a good education”
80%
“You have a physical structure where you and your family feel safe”
79%
“It allows you to have more space for your family”
74%
“It gives you control over what you do with your living space”
70% 61%
“Paying rent is not a good investment”
said it was a major reason
Important, but not nearly as important: “Build[ing] up wealth that can be passed along to my family” “It is a good retirement investment” “It allows you to select a community where people share your values”
56% 53% 53%
Finally, some things that were not a major a reason to own: tax benefits, the ability to borrow against it, and “It motivates you to become a better citizen.”
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HOW ARE CENTURY 21 AGENTS LIKE THE U.S. NATIONAL SOCCER TEAMS? THEY’VE GOT THE STREET SMARTS OF A BEEN-THERE-WON-THAT VETERAN, THE UNBRIDLED ENTHUSIASM OF A YOUNGSTER, AND THE GAME-CHANGING SPEED OF A SECOND-HALF HALF SU SSUB. UB. ®
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C21.COM ©2012 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. ©2012 United States Soccer Federation Inc. All rights reserved.
quickhits LEGISLATIVE EFFORTS
Field rep program launches A new VAR program is helping connect state and local Realtor® associations on the ground level of their political activities, and build and maintain momentum behind our efforts from city halls and town councils through Capitol Square. VAR has hired two political field representatives as part of a pilot program. They’re staff members whose job it is to work on the local level organizing and implementing grassroots political efforts. In other words, they’re liaisons of a sort, helping local organizations with their local public policy efforts — efforts that supplement VAR’s statewide programs. The two ‘test pilots’ are Kathy Diradour (former much-honored Realtor® with Long and Foster in
Richmond), who will work in the central region of the state; and Bob Hill (former executive vice president at the Vermont Association of Realtors®), who will cover the southwest. The program will not only help us inform and mobilize members quickly, it will also let us build stronger relationships with the General Assembly, and with local governments across Virginia.
RESIDENTIAL PRICES
Trulia: Home prices are actually going up (mostly) Rather than wait for home-sales prices (which are delayed by months), Trulia has a new system: the Trulia Price Monitor, which tracks the asking prices of homes and is available mere days after the end of a month. The idea, the company says, is to get a quicker read on pricing trends by following the asking prices of homes, which are obviously available immediately, rather than wait six to 12 weeks for sales prices to be reported. “By focusing on asking prices and releasing each month’s Monitors just days after each month ends, we can detect price movements at least three months before the major sales-price indexes do,” said Jed Kolko, the company’s chief economist. He acknowledges that asking prices are sales prices are different beasts, and that there are weaknesses: “Asking prices… are NOT a perfect predictor of sales prices: the final sales price for a home can be above or below asking, and some listed homes might not sell.” 8
JUNE/JULY 2012
However… [They] each have their advantages for understanding the housing market: asking prices have the advantage of showing current market conditions and trends, but sales prices are the best guide to historical and long-term trends in the housing market. Trulia isn’t just taking all the asking prices and coming up with a median. Instead, it compares similar homes in similar neighborhoods to get a more accurate read. It also accounts for seasonal fluctuations in the markets. The result is that, starting in September 2011, most months have seen an increase in prices over the month before. In contrast, from November 2010 to August 2011, prices were down month to month every time but one. In other words, prices are — and have been — rising steadily in most of the nation. Slowly, true. But steadily. In Virginia, there’s a mixed bag. Northern Virginia (green in the image below) is seeing rising prices, while the central part of the state (orange) is seeing them fall, as is the Hampton Roads area (yellow), although not as much. WWW.VAREALTOR.COM
VALUATIONS
FHA FUNDING
Zestimate change causes wailing, hand-wringing
FHA delays “$1,000 in collections” rule... for now
A lot of people are not happy with some recent changes at Zillow, which recently updated its method for assigning values to homes. In a story about the change, the Wall Street Journal wrote about one Bill Trumbo, a retired financial analyst in Phoenix, who found that, thanks to the new Zestimate, “his house in Phoenix had lost nearly $100,000 in value overnight.” Of course his house didn’t really lose “nearly $100,000 in value.” The “Zestimate” for his house did, which really doesn’t mean much of anything. So what happened? Zillow changed its formula for creating those “Zestimates.” Good: Now it gives more weight to recent sales. Bad: It still relies on user-submitted data about improvements. Silly: People still think those figures represent reality. Bill Trumbo (from the Journal story) saw one of his homes’ Zestimates drop $92,100, while another rose by $67,600. As a result, Trumbo believed his personal net worth dropped, and “[h]e dashed off letters to Zillow’s CEO, as well as to the CEO of his bank, Wells Fargo, explaining that Zillow’s change had caused him to lose $40,000 in paper net worth.” How would someone respond to such a letter? (“This vague estimating tool says I’m not worth as much!”) Perhaps by explaining that no serious financial institution would rely on a “Zestimate” for anything other than… well, not at all, actually. Reality kicks in around paragraph 10 of the story, which quotes Appraisal Institute spokesman Bill Garber, who explains that Zestimates are just a kind of automated value model: AVMs have limitations, the biggest being the lack of inspection and oversight of any improvements. Complex markets render them nearly useless. They’re basically an aggregation of public records data, and public records are riddled with errors.” And my favorite line of his, which sums it all up: “Garbage in, garbage out.”
The Federal Housing Administration is holding off on its new rule that would prevent anyone with more than $1,000 in collections to qualify for federal backing. It seems FHA got an earful from, well, everyone. In this economy, saying that anyone with more than $1,000 in dispute with a creditor disqualifies you … well, that eliminates a lot of people. First-time buyers were going to be hardest hit. When the hue and cry first got loud enough, the agency agreed that borrowers could explain away some of that debt in the case of major life events — job loss, divorce, medical bills, etc. But that wasn’t enough, so it’s postponed the rule until after a public comment period gives everyone a chance to weigh in.
VOLUME 19 ● ISSUE 3
SHORT SALES
MRIS: March distressed sales down significantly MRIS’s distressed-sale numbers for March actually look pretty good compared to a year ago. (Calculated Risk, a great economics blog, happens to get MRIS numbers, which is why we only mention them.) Short sales remained about the same (a bit more than 13 percent of all sales), but foreclosures dropped by almost half from March 2011. In total, distressed sales made up almost 40 percent of sales in March 2011, but only 28 percent in March 2012. We don’t know what if any effect the removal of the foreclosure bottleneck will have (Virginia wasn’t among the top foreclosure states anyway), but it certainly looks like yet another sign of things improving.
JUNE/JULY 2012
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quickhits FORECASTS
Good news for commercial, residential sectors
UNCONVENTIONAL LIVING
Buy your next house at Ikea? Ikea and Ideabox are going to begin selling modular, pre-fab, fully furnished homes. Price: Under $100K. Buying a home from a catalog isn’t a new idea — Sears used to sell “Sears Modern Homes” that way, and (according to Wikipedia, anyway) more than 70,000 were sold. And prefab isn’t unusual… well, not always. Thomas Edison tried to market pour-in-place concrete homes. Oddly enough the idea never took off. But Ikea has a bit more panache than Sears, and the “Activ” home looks to be something worth bragging about. Heck, they come with Ikea furniture including Pax wardrobes, Abstrakt cabinets, and even Ikea’s Tundra maple flooring. They’re also green — Energy Star appliances, water-saving toilets, modern materials, etc. Size: About 745 square feet, so it’s more “bachelor pad” (or granny house) than homestead for the entire family.
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The Urban Land Institute released its semi-annual Real Estate Consensus Forecast, in which it surveyed 38 leading real estate economists and analysts from “major real estate investment, advisory, and research firms and organizations” about their views on the upcoming real estate market. And it looks like good news. Or, rather, it looks like the consensus is that we’ll be getting good news. Over the next three years, those real estate experts expect “broad improvements for the U.S. economy, real estate capital markets, real estate fundamentals, and housing,” and “believe that most facets of the U.S. real estate economy will strengthen considerably or remain healthy through 2014.” Check out some highlights: In the commercial sector • Commercial property transaction volume is expected to increase by nearly 50%. • Institutional real estate assets and REITs are expected to provide returns ranging from 8.5% to 11% annually. • Vacancy rates are expected to drop between 1.2 and 3.7 percentage points for office, retail, and industrial properties and remain stable at low levels for apartments. • Rents are expected to increase for all property types • Housing starts should nearly double by 2014 • Home prices should begin to rise in 2013, with prices increasing by 3.5% in 2014. • Commercial real estate transaction volume will rise about 18% in 2012, 16% in 2013, and 8% in 2014. • Issuance of commercial mortgage-backed securities is expected to increase “briskly.” In the residential sector • Single-family housing starts are expected to rise 16% in 2012, 32% in 2013, and 21% in 2014. • The average home price should stabilize in 2012, then increase 2.0% in 2013 and 3.5% in 2014. You can find the entire report at VARbuzz.com/go/ULIforecast ●
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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 Virginia Realtors’® message to the Fed The Federal Reserve Bank asked VAR to help it get a clearer picture of what’s happening in our markets — and what we think the near future holds. So we put the word out to Realtors®, and the response was incredible: More than 1,400 of you took the time to answer questions about how you’re seeing the economy.
We’ll have a full and detailed report about all the answers, but here are a couple of interesting tidbits. Some of your responses were what we expected — most people saw their business get at least slightly better in the first quarter (although 6.5% said business was significantly worse). And appraisals being a problem — coming in too low — was a common issue. More interesting was the fact that more than half of you (55.7%) said that first-time buyers accounted for most of your customer traffic. Homeowners who wanted to upsize ranked second, and downsizers were third. (It’s interesting because you would think this is a great market to get that larger home you may not have been able to afford.) When it came to inventory, the signals were mixed (probably based on what part of the state you’re in). Almost the same number of Realtors said inventory was “somewhat low” as said it was “somewhat high.” Ditto for “very low” and “very high.” And distressed homes are clearly affecting the market. Almost 92% of you said they’re having an effect — 51% called it “somewhat of a factor” and 40.7% said it was a “big factor.” Only 8.3% said their markets aren’t really affected by distressed homes. Keep an eye out for the full report. After all, when 1,400 Realtors have something to say, it’s worth a listen.
Read the full Q1 Virginia Home Sales Report — the numbers are good! VARealtor.com/homesales
12 JUNE/JULY 2012
Most of your customer traffic is…
55.7% 55.7%
First-time buyers First-time buyers Homeowners Homeowners moving up moving up
21.1% 21.1%
Homeowners Homeowners downsizing downsizing
14.6% 14.6% 8.7% 8.7%
Second-home Second-home buyers buyers
Distressed homes are a negative factor… Not at all Not at all
8.3% 8.3%
Somewhat Somewhat In a big way In a big way
51.0% 51.0% 40.7% 40.7%
Inventory in your area is… Very low Very low
13.9% 13.9%
28.1% 28.1% About right 16.2% About right 16.2% Somewhat high 30.2% Somewhat high 30.2% Very high 11.7% Very high 11.7% Somewhat low Somewhat low
WWW.VAREALTOR.COM
legallines New agency law: FAQs on file Significant changes to Virginia’s agency law take effect July 1, 2012. (See the full article starting on page TK.) In the coming months we’ll provide a variety of resources to help you adapt to the revisions including, videos, webcasts, articles, new forms, and classes. For now, here are some basic Qs and As.
Q:
What do I do if the buyer wants to be represented by an agent but refuses to sign a buyer broker agreement?
A: You should point out that you — and any other real estate licensee the buyer wants to represent him — are required by law to have the agreement in writing. A consumer education form is being developed to help you in this situation. Remember, the new requirement that all buyer brokerage agreements be in writing does not specify the duration of the agreements. For example, let’s say I’m a buyer looking for a house and I know I want representation but I am not sure from whom. Do I want to sign a buyer brokerage agreement which ties me to a specific agent for 180 days? Absolutely not! However, I may be very willing to sign an agreement for a few days, or for a specific property while we get to know each other. If after a trial period both the agent and the buyer decide that the relationship will be a good one, then propose a long term buyer broker agreement.
Q:
When do I have to take the mandatory three-hour class to learn about these changes?
A: Agents must take a three-hour course on the provisions of the agency statute and the changes made in the legislation. If your license expires June 30, 2012 or earlier, you should wait to take the course until you have renewed your license. (You may take the course now, but you will need to take it again, for credit, in your next license cycle.) If your current license expires on or after July 31, 2012, you can take the course for credit any time — and you must take it before your license renewal. (In other words, if your license expires in July 2012, you will need the course very quickly.)
Keep up to date on the new agency law. Make sure to visit our new Agency Center — it has course information, video guides, articles, and more: VARealtor.com/agency. VOLUME 19 ● ISSUE 3
Q:
I heard that I will have to have a written buyer broker agreement for every transaction in which I represent the buyer. Is that true? A: Yes. All licensees will have
to have written agency and brokerage agreements with clients they represent. These agreements must, at a minimum: • provide a list of services that the agent will deliver; • provide a schedule of fees that will be associated with service, and when payable; and • provide a definite termination date.
Q:
I heard that the law dramatically changes the way dual agency works in Virginia. Is that true? A: No. The disclosure require-
ments for dual agency have not changed. What has changed is the dual-agency disclosure form. Dual agents will now provide — and have signed by the clients — a new form expressly describing the limitations on what dual agents can do for parties to a transaction. Please note that the new disclosure requirements apply only to residential transactions and that enhanced disclosure only applies when an existing client and new client of the firm are represented by the firm in a dual agency relationship.
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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 unforseen legal headaches 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®
legallines
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.
Q:
What if I represent a seller, and an interested buyer wants me to write the offer but does not want representation? Will I have to have a buyer broker agreement with him? A: No. The new law does not force buyers to be represented by an
agent. In this scenario, if you limit assistance to the buyer to ministerial tasks (such as filling in the blanks on a contract) no agreement is required. However, if the buyer does want to be represented by an agent, then that agreement must be in writing. ● Legal lines contributors include:
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.
Blake Hegeman, VAR Legal Counsel
Mike Lafayette, RAR General Counsel
Sarah Louppe Petcher, NVAR General Counsel
(* 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 you can find more legal and risk management information in VAR’s Legal Resources Center at www.VARealtor.com/legalresources. You’ll 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 VOLUME 19 ●arbitrations. ISSUE 3
JUNE/JULY 2012 15
lifelessons KATHLEEN TOLER
Dim bulbs 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 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.
Kept in the dark An agent for Citadel Realty, Kenneth Alenko agreed to help Donnell Benezia, a Seattle resident, purchase four rental properties in Southwest Virginia for investment purposes. However, Alenko decided it wasn’t necessary to mention his affiliation with Citadel in any of the contracts, nor did he tell his principal broker about them. Instead, he operated under the name of his own (unlicensed) company, Sovereign Homes. Alenko negotiated the sales price with the sellers of the properties. But the contracts he gave to Benezia to sign were for a larger amount; Alenko pocketed the difference. Once Benezia owned the property, Alenko verbally agreed to manage them. He had tenants sign lease agreements with his own Sovereign Homes; he left out Benezia’s contact information. Because he never saw or signed these lease agreements, Benezia was unaware that the renters believed that Alenko owned the properties. For whatever reason, Alenko intentionally kept the property owner’s and tenants’ information hidden from one another. 16 JUNE/JULY 2012
When Benezia began to realize something was amiss, he contacted the Real Estate Board, which investigated. Benezia told the Board that Alenko “had total control over overseeing everything … because I trusted him.” When questioned, Alenko claimed that his purchase method (negotiate one price but have Benezia sign a contract for a larger amount) was simply akin to flipping the properties. He said he purchased the properties at what he felt was “under fair market value” and then turned around and sold them at “fair market value” to Benezia. For two of the contracts, Alenko received more than $80,000 from the difference between the two values — without Benezia’s knowledge. When asked if he understood the Board’s regulatory requirements, Alenko repeatedly responded, “I do now” … even though he had been licensed for more than 20 years. When Alenko’s broker became aware of the shenanigans — Alenko had managed to keep him in the dark about his outside activities for two years — he returned Alenko’s license to the Board immediately. The Board, in turn, revoked it. WWW.VAREALTOR.COM
Soggy Service An agent and principal broker, Miranda Lawson represented her clients, the Samaras, who were under contract to purchase a home from the Hardys. Everything was going smoothly until a technician tested the water filtration system at the Hardy’s property. It overflowed, flooding the basement. The finished areas on either side of the unfinished utility area were completely soaked. Fortunately, an electrician performing work at the house cleared the basement drain so the water could flow out. The electrician notified Lawson of the flood. Lawson thanked him, but never mentioned the flooding to her clients or the sellers’ agent. But the HUD-1 statement contained a line referring to “water damage to basement,” and the Samaras e-mailed Lawson twice over a weekend asking about it. She never responded. On the following Monday, the
VOLUME 19 ● ISSUE 3
Samaras questioned Lawson on the phone about it. She simply said there had been an overflow. That same afternoon, the Samaras and Lawson attended the final walkthrough with the home inspector. He tested the water filtration system… which promptly flooded the basement again. The inspector advised the Samaras that perhaps this was an issue they would want to deal with. So at the Samaras’ request, Lawson contacted the seller’s agent, Mordin Solus, and asked for money to be put in escrow to remedy the situation, or for the sellers to at least give credit to the Samaras so that they could close on the property. The sellers refused. Lawson never bothered to follow up, nor did she advise the Samaras of their right to obtain legal advice regarding their settlement options as a result of the flood — including the fact that the contract allowed for
JUNE/JULY 2012 17
lifelessons two days during settlement to obtain legal counsel or investigate the cause or remedies of the flooding. After the Board investigated at the Samaras request, Lawson was fined $450 and required to complete three hours of continuing education.
Disorganized crime The Shepherds purchased their home through Vakarian Associates, which seemed like an established, familyowned firm. After all, Alice and Jack Vakarian, mother and son, had been in business together since 1984. Jack took over as principal broker in 1995, and his mother became the bookkeeper. When the Shepherds paid their EMD of $7,500, Alice Vakarian told them to make their check payable to her, and she deposited it into her personal checking account. To make matters worse, although they gave her the check in June, Alice didn’t deposit it into an actual escrow account until November. The Shepherds filed a complaint with the Board, which uncovered the Vakarians unusual paperwork policy. Alice’s handwritten policy and procedure manual consisted of one sheet of paper with five sentences, none of which addressed the proper handling of contracts or EMDs. For his part, Jack admitted that the firm didn’t have a record keeping system for escrow accounts. And Alice Vakarian had no record of dates for EMDs. Jack said he didn’t use computers and is “not capable” of handling record keeping. The firm’s bank statements were still in unopened envelopes, Jack said, and he couldn’t produce them because he’d “have to dig for them. I just throw them in a big pile.” Their policy was to shred all documents once a transaction had gone to settlement. Although he was responsible for overseeing the firm as principal broker, Jack Vakarian complained, “I have too much going on. All I really pay attention to is the operations account and paying the employees.” When asked how many employees were with the firm, he said, “Let’s see. I’m going to guess and say maybe four.” The investigation discovered that Jack Vakarian 18 JUNE/JULY 2012
was more than disorganized — he never reported his criminal record to the Board, as required. Vakarian had been convicted earlier that year of Speeding to Elude (a felony) and Driving While Intoxicated* (a misdemeanor), had an earlier conviction for cocaine possession, and had been arrested for indecent exposure for urinating in public. When all this was tallied, Vakarian was fined $5,750 and his license was revoked. *His story? A police officer pulled a gun on him while he was getting into his car, saying that ‘you’re the suspect we’ve been looking for.’ Frightened, Vakarian said he drove to a nearby shopping center where other people were present. Not surprisingly, his blood alcohol level indicated he had been drinking. ●
WWW.VAREALTOR.COM
formfactor BLAKE HEGEMAN
New agency law, new agency forms The Virginia Association of REALTORS®, in collaboration with forms providers from around the state, has created new concise and user-friendly disclosure forms to help you comply with changes to agency law; you’re likely to see similar disclosure forms from other providers throughout the state. The forms will be available on VARealtor.com/standardforms beginning in June, but please do not use them until July 1, 2012 — the date the agency law becomes effective.
form 102 Disclosure of Dual Agency or Dual Representation in a COMMERCIAL Real Estate Transaction
form 100 Disclosure of Brokerage Relationship for Unrepresented Party(ies)
Be on the lookout for shortened buyer-broker agreements, an independent contractor form, and consumer information pieces, too.
form 101 Disclosure of Dual Agency or Dual Representation in a RESIDENTIAL Real Estate Transaction
form 103 Disclosure of Designated Agency or Representation
Forms — they’re the bread and butter of a deal. They’re full of fine print and legalese, and not everyone “gets” the details. And that often ends up as a call to our Legal Hotline. (Shameless plug: (804) 622-7955.) So we asked our intrepid legal counsel (read: lawyer), Blake Hegeman, to take one of the forms the Hotline gets the most questions about and illuminate it for us. They’re all available, free for download, at www.VARealtor.com/standardforms.
VOLUME 19 ● ISSUE 3
JUNE/JULY 2012 19
Change By Blake Hegeman and Andrew Kantor
On July 1, Virginia’s real estate agency law changes — this is the law that governs how Realtors® and their clients do business together. The changes are far from monumental, but they are going to impact some of your more common client interactions.
There are three notable changes to the law:
Many Realtors® are already meeting these requirements; most of these changes simply put longstanding best practices into law. But VAR had specific reasons for advocating for the new law. • It informs the consumer. The law helps keep consumers fully informed about the real estate services they’ll receive and the nature of their relationship with the licensee. It removes ambiguity, and puts everyone on the same page. • It mitigates Realtor® liability. The new law protects licensees by ensuring they provide full disclosure to the people they work with — and that the nature of the brokerage relationship is clear, unambiguous, and in writing. This can reduce a lot of consumer confusion — and the potential for lawsuits. • It discourages opportunistic dual agency. The law is intended to make sure that licensees who practice dual agency are fully informing consumers about the risky nature of that relationship. 1 Brokerage agreements must now be in writing. 2 Disclosures when acting as a dual agent (in certain situations) must be clearer and more comprehensive. 3 All residential real estate licensees must take a three-hour course on these changes. (Those who certify that they engaged only in commercial transactions are exempt.)
20 JUNE/JULY 2012
WWW.VAREALTOR.COM
Brokerage agreements So if you’re used to working with buyer clients on a handshake basis, and providing the brokerage agreement later in the game (e.g., when an offer is made, or when you submit a contract), you’ll have to treat the process more formally. Specifically, starting July 1, before you do any real estate-related licensed activity, you’ll have to have your client sign VAR form 450/460 — Exclusive/NonExclusive Right to Represent Buyer Agreement — or whatever equivalent form your company adopts. (A brokerage agreement is required for seller representatives as well, but this is typically fulfilled by the listing agreement.) So what do we mean by “licensed activity” that requires a brokerage agreement? The law requires that once an agent and a buyer have agreed to work together to purchase real estate, they must put their agreement in writing before the agent can begin to actually perform any licensed activity. Licensed activity means doing anything for a consumer you represent that only someone holding a real estate license is permitted to do. Some examples (and this is obviously not a comprehensive list): • Showing a property to a prospective client. • Giving any opinions or advice about a property’s condition or what repairs to make or ask for. • Negotiating rent, security deposit, or other lease provisions. Before you engage in any of these (or other, similar activities with the intended outcome of bringing together a buyer and a seller), you must have your client sign a brokerage agreement.
The most significant change is fairly simple and straightforward: Brokerage agreements must now be in writing. Further, they must be signed as soon as you engage in any kind of “licensed activity” on your clients’ behalf. In other words, anything that requires you to have a real estate license.
Where there’s flexibility • Duration. A signed agreement doesn’t have to be a long-term contract — it can be for a month, a week, a day, or even to show a single property. • Duties. The agreement can stipulate that you are acting as a standard agent, a limited-services agent, or an independent contractor. (See the glossary for details.) • Exclusivity. Brokerage agreements do not have to be exclusive. What must be included in a brokerage agreement Your brokerage agreement must contain, at an absolute minimum, the following: • A schedule of services you will provide. (Your brokerage may already have standard language for this section.) • A list of fees, if any — and how and when they will be paid. • The duration of the agreement; if this is omitted, the law assumes it’s for 90 days. Traditionally, some agents have waited until later in the client relationship to ask for a signed agreement, even to the point of including it with documents at closing. But best practices have always suggested you provide this sooner and in writing. And as of July 1, the law requires it as well. VOLUME 19 ● ISSUE 3
Brokers: Be on the lookout for new, shortened versions of buyer-broker agreements, too!
JUNE/JULY 2012 21
Enhanced disclosure of dual agency When an unrepresented person is interested in a property you have listed, you might be tempted to keep the entire transaction in the firm and represent both sides.
There are two common ways of doing this: designated agency and disclosed dual agency. Both relationships require a written agreement signed by all parties. For designated agency, that’s VAR form 103; for dual agency use VAR form 101 (for residential) or 102 (for commercial) — or your company’s equivalent. Of the two, designated agency —when a principal or supervising broker assigns different licensees within the firm to represent exclusively the seller and buyer, respectively — has far fewer pitfalls. Dual agency is a much more controversial — and difficult — relationship, and it comes with significant limitations to the services you are legally allowed to provide either client. Because of that, starting July 1 the agency law will require you to provide those clients with new, specific language that more clearly explains those limitations. These are called “enhanced disclosures.” • Dual agents, for example, are prohibited from advising either party as to the merits of specific terms, offers, or counteroffers. • Dual agents can’t advise a buyer client about the suitability of the property or its condition (except the disclosures required by law for seller representatives). • Dual agents can’t advise either party in any dispute that might later arise relating to the transaction. Get a better understanding of dual agency in Virginia from Roanoke broker (and agency guru) Steve Hoover: VARealtor.com/agencyhistory
In short, both clients receive a reduced service level, but usually with no reduction in fee. (The only exceptions to these rules are commercial transactions, and certain situations in which existing clients come together.) These limitations are not new. Further, it’s long been the law in Virginia that licensees were required to explained to clients who contemplating a dual-agency relationship that the services and representation they’d receive would be diminished. However, industry leaders, educators and regulators have been concerned for some time that in practice, many agents were not disclosing these caveats as clearly and thoroughly as they should. The enhanced disclosure requirements that take effect July 1 are intended to assure full and accurate disclosure. There will be one major exception to the requirement to give the “new” disclosure of the consequences of dual agency to your clients. You may continue to use the more limited form of agency disclosure (the one found in current VAR Form 100) when a current seller client and a current buyer client — with whom you already have pre-existing brokerage agreements — come together in a transaction.
Words and phrases and clauses With the new agency law, there are some terms you might hear every now and again, and some others where it’s crucial to understand the difference.
Ministerial duties: The new agency law still allows you to represent your client and treat the other unrepresented party as a customer; the Virginia Real Estate Board Regulations allow you to perform ministerial duties for a customer (even for a fee, if you negotiate one). VREB regulations define ministerial acts as “those routine acts which a licensee can perform for a person which do not involve discretion or the exercise of the licensee’s own judgment.” Some examples of ministerial acts you can do for a customer include: • Filling in the blanks of a contract while strictly following the customer’s instructions; (Note that advising about the terms of the contract is reserved for your client and goes beyond the definition of a ministerial act.) • Delivering offers and counters; and • Holding the escrow deposit in your firm account. Independent contractor v. limited-services agent: A standard agent has a list of mandatory duties outlined in the Virginia Code; an example is “[r]receiving a and presenting in a timely manner written offers and counteroffers to and from the seller and purchasers, even when the property is already subject to a contract of sale.” When a client does not want a Realtor® to perform all these duties, you have the option of being either a limited-services agent or an independent contractor. The differences are small but critical. A limited-service agent performs, not surprisingly, limited services — only those services requested by the client. In effect, it’s taking the list of everything a fullservice agent does and subtracting duties that the client isn’t interested in. It requires a written brokerage agreement that meets the following criteria: 1. It discloses that the licensee is acting as a limitedservices representative. 2. It provides a list of the specific services that the licensee will provide to the client. 3. It provides a list of the specific statutory duties of a
standard agent that the limited-services representative will not provide the client. 4. It includes this language (or its equivalent): By entering into this brokerage agreement, the undersigned do hereby acknowledge their informed consent to the limited service representation by the licensee and do further acknowledge that neither the other party to the transaction nor any real estate licensee representing the other party is under any legal obligation to assist the undersigned with the performance of any duties and responsibilities of the undersigned not performed by the limited service representative. Another form of representation is that of an independent contractor or non-agent. This is created by a written brokerage agreement that specifically states that the real estate licensee is acting as an independent contractor and not as an agent. (This has nothing to do with your tax status or relationship with your broker, even though the terms are the same.) The agreement must also state the obligations an independent contractor has, and which have been agreed to by the parties. (VAR is developing a form specifically for use when a Realtor wants to act as an independent contractor, tentatively titled “Independent Contractor Agreement,” which will also be available in VAR’s Standard Forms Center before July 1, 2012.)
Client v. customer: You have a client when you have formed a brokerage relationship with someone — that means you’ve agreed to perform licensed activity for that consumer (licensed activity is performing services that only someone holding a real estate is permitted to do). Once you’ve agreed to perform the licensed activity, you must sign a brokerage agreement designating you as the person’s agent or representative. A customer is someone who is not represented by his or her own agent. You cannot give advice to a customer about the property or the transaction. If you already represent a client in the transaction, you have a legal obligation to represent the interests of your existing client only. For example, you may present an offer or perform other ministerial duties (see above) for the buyer customer, but your legal obligation remains with the seller.
Working with unrepresented parties If you already represent a client in the transaction — say, you’re hosting your seller’s open house, or you get a call based on your yard sign — you need to disclose this in writing as soon as you begin any substantive discussion about the property with someone who isn’t your client. VAR has created a new form, the Disclosure of Brokerage Agreement for Unrepresented Parties, for this very purpose. The idea is to inform the interested party that you’re there as the seller’s representative, and thus speaking with you is like speaking with the seller. (It’s a good idea to bring completed copies of this form to any open house you’re hosting.) Note that if the potential buyer already has an agent you don’t need to provide the form, but you’ll want to get in touch with that agent as soon as practicable. Therefore, one of the first questions you should always ask is whether a potential buyer client is represented by another licensee. If not, you must disclose any brokerage relationship you have with a party to the transaction before you begin a substantive discussion about a specific property.
That can be with a prospective buyer, seller, landlord, tenant — anyone who isn’t your client and who is not represented by another licensee. But what is a “substantive discussion”? Two common categories of substantive discussions include conversations about: • Pricing: If a prospective purchaser at an open house asks you if the seller is willing to reduce the sale price — that is a substantive discussion; and • Repairs: If a prospective purchaser asks you if the seller is willing to agree to paint the house as part of the contract — that is substantive. Ultimately, it is up to the licensee to determine when a conversation turns substantive. “Is that a sugar maple?” Not substantive. “Will the seller remove that maple tree?” Substantive. At the same time, before you begin to solicit otherwise confidential information from a prospective buyer — “Where do you work?” or “How much were you looking to spend?” for instance — you must present the disclosure form.
Mandatory three-hour class Starting July 1, in order to renew their licenses real estate agents in Virginia must take a three-hour course on the provisions of the agency statute and the changes made in the legislation.
Check with your local association or real estate school to find where you can take this course, or browse through the large database of classes compiled at VARealtor.com/agency to find one near you. Just be sure it’s listed as “Approved 3 hours CE/PL RSA.” When should you take the course? If your current license expires July 31, 2012 or later, you can take the agency course any time between now and your renewal date. (In fact, if your license expires in July 2012, you’ll need the course quickly.) However, if your license expires June 30, 2012 or earlier, you should wait to take the course until after you have renewed your license and your next licensing cycle begins. (You may also take the course now to be sure you’re familiar with the law’s requirements, but you’ll need to take it again, for credit, in your next license cycle.)
Bottom line
With all the publicity being given to these changes to the agency law, it’s easy to lose sight of a simple fact: Not that much is changing. In fact, for many Realtors®, the only difference will be switching to using the new forms. (See Forms Factor, page 19.) The “new” agency law simply codifies longstanding best practices — what should have been standard operating procedure all along. It protects Realtors® by ensuring they inform their clients quickly and clearly about the nature of what can be a complex relationship. And it protects consumers by giving them the confidence to know up front what to expect from their Realtor®. ●
What can you do right now?
V A R’s Agency Center Visit VAR’s new, growing, and comprehensive site for all things related to the changes to the agency law:
VARealtor.com/agency. You’ll find a frequently updated list of agency courses throughout the Commonwealth, Q&As on the law, help for navigating transactions, video presentations, a new version of the consumer-oriented A Realtor®’s Role (included in this issue!) and more.
Webinar
Don’t miss our free webinar on the new agency law: Tuesday, June 12, 10 a.m., featuring attorneys and educators from NVAR, RAR, and VAR. See the new forms, get real-world examples of disclosure conversations and brokerage agreements, and learn about the resources available. Register today at VARealtor.com/agency.
BY JAY DEBOER, VAR VICE PRESIDENT OF LAW AND POLICY
2 1 0 2
New real estate laws for HB 1111 Limits to fire safety inspection fees This bill establishes procedures for fees charged for fire safety inspections by local governments. Specifically, the bill states that local governments may not charge overtime rates for inspections conducted during normal business hours. The bill also permits fire safety inspections to be conducted by private contractors with appropriate training and certification.
The 2012 Session of the General Assembly was the type of session that one can expect once per decade. With legislative redistricting and elections in new districts having ushered in a host of new members in both the House of Delegates and the State Senate, and with multiple retirements of more senior members, the General Assembly had to find a new working balance and flow — and this was complicated by a 20-20 tie in the State Senate between Republicans and Democrats. Social and “hot button” issues were in the forefront more frequently than typical — partly the result of national organizations and interests working in each state legislature rather than at the federal level, where gridlock has continued for several years. Against that preface, VAR proposed a conservative agenda this year. We achieved favorable results, some of which will affect the way you will do business. We sincerely hope that these changes will benefit the public and help you in the practice of real estate — and each year we look for ways to make your job easier, more secure, and less complicated.
HB 567
HB 572/SB 76 Owner-financers aren’t regulated as lenders Current exemptions in definitions of the Nationwide Mortgage Licensing System and Registry did not expressly exempt owner financing from new licensure requirements placed on mortgage lenders. This legislation specifically exempts sellers who finance their own real estate sales from having to be regulated as mortgage lenders Introduced by Del.D. Marshall/Sen. J. Watkins
Reducing tenant utility liens
VAR has worked for several years to address issues with tenants leaving unpaid utility bills on owner property, resulting in liens being filed by the local government or utility. Under this compromise, worked into a consensus position by most of the affected parties, tenants will only be able order water and sewer service in their own names with the advance written consent of owners. The utility providers may only allow these bills to remain unpaid for three months, and must notify the owner before placing a lien on the property. The utility provider must also give advance notice to the owner or landlord before placing a lien, and must offer a meaningful opportunity to pay off these amounts. The utility provider must collect a deposit from tenants in most cases. We believe this will end nearly all of the abuses of property owners that have been observed and reported by our members. Introduced by Del. D. Marshall.
HB 377
Limits to condo resale document demands
Under the Virginia Condominium Act, when a unit is sold by auction and the resale packet has been included in the auction materials prior to the sale, a purchaser will not be able to demand a second set of documents, and will not receive a second cancellation period. This brings this provision into conformity with the Property Owners Association Act. Introduced by Del. B. Pogge. WWW.VAREALTOR.COM
Changes to agency and professionalism
HB 206
This year’s major bill is drawn to Title 54.1 — our licensure statutes —and includes technical and “clean up” amendments from our large agency bill introduced in the 2011 session. (The new agency laws are discussed elsewhere.) The bill also implements many more recommendations from VAR’s Professionalism Work Group. For example, the Real Estate Board will develop a framework permitting surplus elective continuing education hours to be carried forward to the next license term. The Real Estate Board will be granted authority to issue guidance on scope of work questions regarding unlicensed assistants. The Board may also speak to team practice for the first time. The bill fixes a “quirk” in the law that prevented Brokers from conducting business as business entities in some circumstances. The new law brings broker supervision requirements into the Code of Virginia, where they will receive the prominence they deserve. Finally, the bill establishes a Broker Self-Audit, which will be conducted by principal and supervising brokers once per license term. The requirement for a self-audit will begin on January 1 of 2013. Introduced by Del. J. Miller.
HB 1110
Landlord and Tenant law changes
This is the major annual update of landlord-tenant law that will affect property managers for residential properties. First, the bill allows paper copies of leases to be used in suits for possession rather than requiring that the original lease be filed in court. The bill permits owners to remediate mold on their own properties. The bill conforms Virginia law to Federal law in permitting tenants in good standing to remain in dwelling units for up to 90 days following foreclosure provided they remain current in rent and in compliance with the lease. The bill permits landlords to charge tenants for insurance coverage of their premises as well as an administrative fee to administer tenant insurance programs. (There are other technical changes to the Residential Landlord and Tenant Act included.) Introduced by Del. T. Greason. VOLUME 19 ● ISSUE 3
HB 210 New supervision for appraisal management companies The Federal Dodd-Frank Act requires states to bring appraisal management companies under the supervision and authority of their regulatory boards for appraisers. In Virginia, that is the Real Estate Appraiser Board. Understanding that creating a new regulatory program in Virginia is a slow process, we began this year. This bill will require a Virginia license for appraisal management companies not otherwise subject to regulation by a state or federal regulator. It adds an AMC member to the Real Estate Appraiser Board. And it clarifies obligations and duties of AMCs, and provides remedies for breach of those duties. Introduced by Del. J. Miller.
Overview and summary We were generally successfully in achieving our main objectives for our 2012 legislative agenda. Again, we hope that the changes that have been made in our laws will assist you in your day-to-day practices and make your jobs easier. We always are happy to entertain suggestions for changes to legislation that you believe we need the General Assembly to make. Please contact us or your local associations with your problems and suggestions.
And keep up with VAR during election season at www.RealtorsChoose.com
Get the full report on how the new legislation affects your business at:
www.VARealtor.com/Legal Article
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accessibletech ANDREW KANTOR
The tracks of your tears FUNNY STORY ABOUT Foursquare, a smartphone app that lets you “check in” to various locations — coffee shops, offices, wherever. It’s cute, and people compete to see who can be the most frequent visitor to a place. So anyway, it was all fun and games till another app came out: “Girls Around Me.” Using Foursquare information, it would allow anyone to see a map of his area with markers (and photos) showing all the women nearby. Pick one, and with a click you can connect to her through her Facebook account. Good times! Well, maybe not. Cue the hubbub. Girls Around Me is with us no more. But it illustrates something quite nicely: While we all (hopefully) realize how easy it is to share information about ourselves, it’s easy to forget just how that information might actually be used — and who will use it. FACEBOOK APPS
To make matters worse, even if you’re incredibly careful about what apps you use and what sites you register with, it won’t help much. Turns out just being online can mean sharing a lot about yourself with a lot of people. When you visit your favorite news site, that visit is instantly logged by potentially a dozen marketing and advertising companies. And if they figure out who you are (via your computer’s IP address, or if you register at the site), those companies can put together a heck of a lot of information about you. How did you think all those sites, from CNN and ESPN to Facebook and Wikipedia and Reddit are able to give you so much free? It used to be that they’d just sell your eyeballs. (Figuratively, one hopes.) Today that’s not enough — advertisers want to target their wares as narrowly as possible. So if you express even a vague interest in wallpaper, the Home Depots and Lowes of the world will want to know about it.
If you use anything on Facebook beyond the basics —
Blood on the tracks
if you play any games, puzzles, quizzes, or the like —
When you go to one Web site, oftentimes the content you see — especially ads — come from other sites. So while you think you’re just visiting prettyflowers.com, you’re actually also visiting all its advertisers’ sites at the same time: buythis.com, trythat.com, and so on. And every one of those sites can track you to one extent or another. Let’s say you leave prettyflowers.com and go to cutekittens.com, which also happens to use the BuyThis ad service. Now the folks at buythis.com have tracked you from a site about flowers to a site about kittens. They can start to build a profile. And heaven forefend you’re logged into Facebook. Now you have a name. And friends. In fact, depending on your privacy settings, those marketers might have access to all your Facebook data. You know, religion, political views, job history, education…. Getting the picture? Have you ever been on a site and seen your Facebook profile picture already there, next to a “Like” button? Guess what: Seeing your Facebook profile pic on another site tells you that everything you do
there’s a good chance you’re sharing a lot more information than you expect. Facebook apps are supposed to abide by certain privacy restrictions, but they don’t always. So assume that your religious and political views, your education, your music and movie tastes, and more are all being shared with every game/quiz/app maker on Facebook. Oh, and your friends’ info, too. See, if someone sets their privacy settings so only friends can see things, a loophole is that their friends’ apps can also see that information. So if you and I are Facebook friends and I install BigOilCo’s FuelPerx app, unless you dig through Facebook’s privacy settings and turn it off, all your information is available to BigOilCo. And no, you won’t be notified. So, what apps are your friends using? And what are you sharing with them? Think about that.
28 JUNE/JULY 2012
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is already being tracked by Facebook, Twitter, Google, or wherever else you’re logged in. So if you’ve just updated your status and then headed over to cutekittens.com, Facebook knows about it. Everything you do, every page you visit, every click you make is not only tracked, but connected to you, personally. And to your friends.
How big a deal is it? If you log into MSN.com, that information is sent to — are you ready? — 2o7.net, Adsonar, AppNexus, Atlas Solutions, ClickBooth, DoubleClick, Facebook, Legolas Media, Newsvine, Scorecard Research.com, and Vibrant Media. Go over to CBS.com, and add CNET, IMR Worldwide, Revolutionary Science, and Yield Manager. Fan of Fox? Add FreeWheel, Quantcast, and Questionmarket. How many of those do you recognize? Me either. Yet simply by visiting a handful of major news and information sites, you’ve told each and every one a bunch about you. A writer for The Atlantic did a simple study and found that, in a day and a half on the Web, 105 companies had tracked his movements. So, in fact, can you. There’s a neat extension for the Firefox browser called Collusion. When you visit a site, it tracks and maps what other sites are (quietly, in the background) getting information from or giving it to you. Hence I know that my visits to Realtor.org are shared with 2o7.net, DoubleClick, Mediaplex, and Omniture, not to mention Google. (A lot of sites share information with Google. That’s not surprising, as so many — including VARbuzz and VARealtor.com — use Google Analytics to track usage.)
Collusion shows that one visit to MSN.com connects you to a lot of other places.
My Collusion map after less than a week of browsing the Net. Each dot represents a site or company that has tracked my visit.
What’s to be done? First, understand how all this tracking happens. It’s pretty simple: Web sites often put cookies on your computer — small bits of text that help them keep track of you and your preferences when you visit their VOLUME 19 ● ISSUE 3
sites — so you can have a better online experience. Cookies are benign; without them you couldn’t have online shopping carts, and you’d constantly be logging into sites, for starters. JUNE/JULY 2012 29
accessibletech But just as Amazon gives you a cookie so you can use its shopping cart, when you visit cutekittens.com its advertisers can also give them to you. And thus they’re able to track you and build a profile. So the trick is to block the cookies that don’t help you — the ones from those marketing and tracking sites. Luckily, this isn’t hard to do. There are several addons for major Web browsers that will identify cookies from various marketing and advertising companies and automatically block them. Two worth checking (both free) are Abine’s DoNotTrackPlus (abine.com) and Ghostery (ghostery.com). They do similar things. As you’re browsing, they block unwanted cookies quietly in the background, and they also give you the option to allow them. For example, I allow Google Analytics cookies because I know that many webmasters use it to improve their sites. But I block trackers like AdCloud and Glam Media. Unfortunately, marketing firms know about various cookie-blockers, so they came up with a new trick: Flash cookies, also known as LSOs (locally stored objects) or simply “supercookies.” These use Adobe’s Flash technology (which is often used for animation, games, and other applications) to store cookies so they aren’t removed by a traditional cookie-killer. It’s a sneaky trick, and the only reason to use it is to circumvent a user’s cookie blocker. In other words, any site using supercookies is deliberately trying to do something you don’t want done. Killing supercookies isn’t as easy as it should be. If you use Firefox as your browser, you’re in luck (as usual) — there’s an addon called BetterPrivacy (VARbuzz.com/go/betterprivacy) that blocks or cleans out supercookies. If you use another browser, though, you have to do it manually. Adobe even has a site where you can see what cookies are there and remove them; you can get to it through VARbuzz.com/go/flashcookies. You’ll find a box (“Website Storage Settings panel”) with a list of all the Flash-based cookies on your machine. Click “Delete all sites” to remove them. You’ll need to do that regularly if you don’t have Firefox. “There ain’t no such thing as a free lunch,” goes the 30 JUNE/JULY 2012
saying, and there ain’t no such thing as a free Web site, either. If you’re not shelling out cash for a membership or a product, you can bet you’re paying by selling the hottest commodity of the day: your time. ●
Adobe’s Flash Player Settings Manager Web page lets you manage the cookies on your computer.
THE CLICK ON THE LINE It’s not just various marketing companies that are keeping tabs on you. The government, with the enthusiastic help of the various telecom companies*, reads your mail and texts, listens to your calls, and tracks your location. And yes, they do this without a warrant. Where did you think you lived, Norway? Police departments routinely work with your cell company to get call logs and location information of, well, anyone they want to. They even create fake cell towers to intercept phone calls and text messages, and can get any information from your account — voice mail, pictures, video, and so on — as a matter of routine. So watch what you say. * AT&T, for example, will turn over a user’s voicemail for $150; Verizon charges $50 to provide text messages; Sprint’s fee for turning over pictures and video from a cell phone is $150, and for $30 a month it will track your location.
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rpacreport AS OF MAY 15, 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 Jay DeBoer at jay@VARealtor.com or (804) 264-5033. Or, if you want to get invested today, please visit www.realtorschoose.com/contribute.
Golden R Investors ($5,000)
Crystal R Investors ($2,500)
Charles Burnette Burnette Real Estate Sales, Blacksburg
Billy Chorey Chorey & Associates Realty, Suffolk
Dennis Cronk Poe & Cronk Real Estate Group, Roanoke
John Dickinson Hall Associates Inc., Union Hall
Joe Funkhouser Coldwell Banker Funkhouser, Harrisonburg
Forrest Odend’hal Long & Foster Real Estate, Gainesville
Jane Quill RE/MAX Presidential Fairfax
Dorcas HelfantBrowning, Coldwell Banker Professional, Virginia Beach
Steve Hoover MKB, Realtors® Roanoke
Thomas Jefferson, III Joyner Fine Properties Richmond
John McEnearney McEnearney Associates, Inc., Alexandria
John Powell Long & Foster Real Estate, Inc. Colonial Heights
Trish Szego ERA-Elite Group, Realtors®, Fairfax
Bill White Joyner Fine Properties Richmond
Golden R Associations ($5,000)
Hall of Famers have contributed a cumulative amount of at least $25,000 to RPAC.
• Northern Virginia Association of
Tom Stevens Coldwell Banker Residential, Vienna
32 JUNE/JULY 2012
Melanie Thompson Century 21 AdVenture Realty, Fredericksburg
Jack Torza Long & Foster, Realtors® Mechanicsville
Realtors®, Fairfax • Richmond Association of Realtors®, Richmond • Roanoke Valley Association of Realtors®, Roanoke • Williamsburg Area Association of Realtors®, Williamsburg
See how your RPAC investment is paying off: Visit
www.RealtorsChoose.com!
WWW.VAREALTOR.COM
WHY I INVEST
Sterling R Investors ($1,000)
Bob Adamson McEnearney Associates, Inc., Arlington
Guy Allen One Stop Realty Woodbridge
Katy AllenbaughRichards First American Home Buyers Protection, Midlothian
Betsy Atkinson ERA Atkinson Realty, Virginia Beach
Deborah Baisden Prudential Towne Realty Virginia Beach
Jim Barb Jim Barb Realty, Inc. Winchester
CC Bartholomew Long & Foster Real Estate, Inc., Manassas
Mary Bayat Bayat Realty, Inc. Alexandria
For me, it’s about giving what I can when I can– a bit of each commission goes back into my business when I Mary Ann Bendinelli Weichert, Realtors® Manassas
Laura Benjamin Roanoke Valley Association of Realtors® Roanoke
Brad Boland Keller Williams Realty Reston
David Bridges ERA Blue Diamond Woodbridge
contribute to RPAC, and it can really add up.” —Natalie Langford, Realty Negotiations, Winchester 2011 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.
R. Scott Brunner Virginia Association of Realtors® Glen Allen
Pat Buck McEnearney Associates, Inc. McLean
VOLUME 19 ● ISSUE 3
Robyn Burdett RE/MAX Allegiance Fairfax
Peggy Burke Long & Foster Real Estate, Woodbridge
Visit RealtorsChoose.com/RPAC-101 to hear about what inspired Natalie to become an RPAC investor.
JUNE/JULY 2012 33
Sterling R Investors ($1,000)
Joe Carney William E. Wood & Associates Virginia Beach
Dale Chandler Greg Garrett Realty Newport News
David Charron MRIS Rockville, MD
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
Hugh Cross Cross Management Suffolk
Beth Dalton Long & Foster Real Estate, Inc., Blacksburg
John Daly Rose & Womble Realty Company Virginia Beach
Benton Downer Downer & Associates Charlottesville
Mary Dykstra MKB, Realtors速 Roanoke
Sandee Ferebee Prudential Towne Realty, Virginia Beach
Claire ForcierRowe Coldwell Banker Elite Fredericksburg
Virgil Frizzell Long & Foster Real Estate, Reston
Bev Frowen Long & Foster Real Estate, Inc. Manassas
Libby Gatewood ERA Realtors速 Napier Colonial Heights
Bill Gearhart Coldwell Banker Townside, Roanoke
Charlee Gowin Prudential Towne Realty, Virginia Beach
Art Grace Hunzeker & Lyon, PC Manassas
Lynn Grimsley RE/MAX Peninsula Newport News
George Grundy George Grundy & Associates Realty Petersburg
Kit Hale MKB, Realtors速 Roanoke
Delk Hamaker K.D. Hamaker Properties Arlington
Margaret Handley M.C. Handley, Ltd. Falls Church
Terrylynn Harrell Exit 1st Choice Realty Woodbridge
Bill Hernandez Keller Williams Realty Manassas
Liz Hernandez Keller Williams Realty Manassas
34 JUNE/JULY 2012
WWW.VAREALTOR.COM
Sterling R Investors ($1,000)
Jeanne Hockaday Virginia Country Real Estate, Gloucester
Nathan Hughes Bandazian & Holden Richmond
Rusty Hulett Keller Williams Realty Chesapeake
Phillip Innes RE/MAX Commonwealth, Richmond
Tom Innes RE/MAX Commonwealth, Richmond
Donn Irby Rose & Womble Realty Chesapeake
Tom Jewell Carter Braxton Preferred Properties Leesburg
Jo Anne Johnson Westgate Realty Group, Inc. Falls Church
Sita Kapur Arlington Premier Realty, Arlington
Kathleen Kennedy Long & Foster Real Estate, Vienna
Karen Kidwell Long & Foster Real Estate, Reston
Betty Kingery Mountain to Lake Realty, Rocky Mount
Pat Kline Avery Hess, Realtors® Springfield
Jody Korman RE/MAX Commonwealth, Richmond
Ed Krauze, Greater
Vonda Lacey Lacey Real Estate Group, Fishersville
Natalie Langford Realty Negotiations Winchester
George Lyons Long & Foster Real Estate, Woodbridge
Nakita Mattocks Vision Real Estate Services, Woodbridge
Keith May Kline May Realty Harrisonburg
Glenda McDaniel Long & Foster Hales Ford Bridge, Moneta
Tom Meyer Condo 1, Inc. Arlington
Jay Mitchell William E. Wood & Associates Chesapeake
Percy Montague Montague Miller & Co., Charlottesville
Thomas Moore Olde Virginia Realty, Suffolk
Fred Morgan 1st Choice Real Estate Staunton
Roger Nakazawa Olympic Realty, Inc. Vienna
Washington Commercial Association of Realtors®, Silver Spring, MD
Susan Mekenney RE/MAX Allegiance Fairfax
VOLUME 19 ● ISSUE 3
JUNE/JULY 2012 35
Sterling R Investors ($1,000)
Thai Nguyen Westgate Realty Falls Church
Vin Nguyen Westgate Realty Falls Church
Gwen Pangle Pangle & Associates Leesburg
Gail Penman William E. Wood & Associates Virginia Beach
Fatima PereiraShepherd Long & Foster Real Estate, Inc., Manassas
Bobby Perkins Long & Foster Real Estate, Inc., Colonial Heights
Tracy Pless Long & Foster Real Estate, Reston
Anne Rector Long & Foster Real Estate, Alexandria
Zinta RodgersRickert, RE/MAX Allegiance, Fairfax
Mario Rubio Rubio Real Estate Annandale
Fetneh Schacht Long & Foster Real Estate, Vienna
Henry Scholz Hall Associates, Inc. Roanoke
Scott Shaheen Long & Foster Richmond
Jean Siebert Siebert Realty Virginia Beach
Karen Smith RE/MAX Commonwealth, Richmond
Katrina Smith Long & Foster/Webber & Associates Winchester
Kimber Smith Prudential Towne Realty Williamsburg
Trish Snyder Coldwell Banker Four Seasons, Mt. Jackson
Cindy Stackhouse Century 21 Stackhouse & Associates, Dumfries
Wes Stearns MO Wilson Properties, Inc., Woodbridge
John Stedman Commission Express Woodbridge
Minnie Stevenson 1st Choice Real Estate Staunton
Suzy Stone Century 21 AdVenture Realty Fredericksburg
Mack Strickland Strickland Realty Chester
Pat Sury Montague Miller & Co. Charlottesville
Richard “Dick” Thurmond William E. Wood & Associates Virginia Beach
Christine Todd Northern Virginia Association of Realtors® Fairfax
Karen Trainor Weichert Realtors® Ashburn
36 JUNE/JULY 2012
WWW.VAREALTOR.COM
Kevin Turner Century 21 All-Service Bedford
Sandra Wagner William E. Wood & Associates Poquoson
David Wilkey William E. Wood & Associates Chesapeake
Sterling R Associations ($1,000) • Greater Augusta Association of Realtors®, Staunton • Harrisonburg-Rockingham Association of Realtors®, Harrisonburg
• Lynchburg Association of Realtors®,Lynchburg
John Wilson Coldwell Banker Traditions Williamsburg
Shanna Wiseman Parr & Abernathy Hopewell
Jon Wolford Long & Foster Real Estate, Springfield
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.
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 3
JUNE/JULY 2012 37
Join the class of 2013. Are YOU up for the challenge?
Apply for the Virginia ReALtORs Leadership Academy ®
The Virginia Realtors® Leadership Academy (VLA) challenges emerging Realtors® to become better leaders. Through this program, VAR identifies and trains Realtor® leaders from all around the Commonwealth. Approximately 20 applicants are accepted each year, and each class of participants builds their leadership skills through a series of retreats and a major class project. Graduates are groomed to take on leadership positions in their local associations, at VAR, or in other organizations. Do you think you can make your local or state association better? Apply today to join the ranks of some of the most successful Realtors® from around the Commonwealth.
Application deadline: July 2, 2012 www.VARealtor.com/VLA
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 Erika Almstead Professional Standards Administrator erica@VARealtor.com
If you’re interested in marketing or advertising opportunities Ask for Christine Hodges Marketing and Communications Mgr. christine@VARealtor.com
To reach our Legal Hotline
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 and 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
*You must register first at
Phone Tag, voice to e-mail transcription Realtors Federal Credit Union T-Mobile, wireless service UPS, shipping and more
Our CEO is Scott Brunner (804) 249-5702 scott@VARealtor.com
VOLUME 19 ● ISSUE 3
Ask for Jay DeBoer Vice President of Law and Policy jay@VARealtor.com VAR 2012 Leadership Team
Trish Szego, CRB, CRS President ERA-Elite Group, Haymarket (703) 359-7800; trishszego@gmail.com
VAR Member Service Partners
Call (804) 622-7955* VARealtor.com/LegalHotline
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 mary@varealtor.com Bradley Boland Vice President Keller Williams Realty, Reston (703) 926-6189 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, Union Hall (540) 982-0011; jrdickinson@cs.com R. Scott Brunner, CAE Chief Executive Officer (804) 264-5033; scott@VARealtor.com
JUNE/JULY 2012 39
lastword SCOTT BRUNNER
There’s more to my pantyhose than meets the eye …and so it goes with most things. TO THE TRANSPORTATION SECURITY Administration agent who riffled through my bag after I checked it at the Denver airport recently and headed to my gate: Well…yes. Yes, those are my pantyhose. And how clever of you to have repositioned them so conspicuously atop my Brooks Brothers dress shirts — thankyouverymuch — so that when I later claimed and then at the hotel unzipped my bag I’d not miss the fact that you had discovered them. Nevertheless, I can explain. It’s really not what you may think. Really. Not. On business travel, I always take along pantyhose. Or rather, my wife’s pantyhose. I mean, they were my wife’s…until they got runs in them and she shared them with me. I mean, well…not “shared” like that. She passed them along to me because I use them — stick with me here — to shine my shoes. Honest. It’s a trick my dad taught me, something he learned in the Navy: Polyester … friction … heat … brings out the shine. You should try it sometime. Really. And that’s my story. Funny, right? Not what you were thinking, right? Right? ••• Truth may occasionally be stranger than fiction, I’ve learned, but that’s more often the exception than 40 JUNE/JULY 2012
the rule. And so it goes also with rumors, conspiracy theories, and first-blush judgments. There’s almost always more to a story than meets the eye. So, when some friendly TSA agent uncovers my pantyhose, I can’t help but chuckle (very nervously) at what conclusions he’s possibly drawn about me, absent any other information. (On the other hand, there’s likely not much he hasn’t seen as a bag screener, and could be that he stopped drawing conclusions ages ago. But still.) Perceptions are based on personally available information. Not timely or accurate or reliable info. Available info. And in the absence of knowledge or information, we assume. We fill in the gaps. And as a result, we occasionally put businessmen in pantyhose. That’s important for folks like me to remember — association types, who in the whirlwind of a potentially brilliant idea may fail sometimes to fully understand the audience we’re trying to reach or the need we’re trying to serve. It’s important for folks like you to remember, too — practitioners who risk becoming wed to ways of doing business that occasionally, despite your best intentions, may not always serve the best interests of your customers and clients. It’s in that vein that a select
working group of VAR members came together two years ago to recommend significant changes to Virginia’s agency relationship and disclosure law — important changes that have now been enacted into Virginia law and take effect July 1. These are not wild-hare, untested ideas, but rather are common-sense disclosures designed to bring more clarity and common understanding to real estate relationships. Yet what may look to some of you like no big deal (it’s about time we required agreements in writing, you might say) looks to others like the end of real estate practice as we know it. And so it is, but ultimately in a good way, a way that protects you and consumers. To both camps, I say: Seek to understand not only the what of the new law, but also the why. Don’t assume it’s of no consequence or that it’s just another piece of regulation designed to complicate your life. As with businessmen who travel with pantyhose, things become clearer when you get the facts. ● Scott Brunner, CAE — he of the well-traveled pantyhose — is VAR’s chief executive officer. Contact him at scott@varealtor.com.
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Prudential PenFed Realty is and independently owned and operated member of BRER Affiliates, Inc. PenFed membership is not required to conduct business with Prudential PenFed Realty.
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