ELECTION DAY: NOV. 6 — RPAC’S 2012 ENDORSEMENTS: PAGE 29 October/November 2012
A journal for real estate professionals published by the Virginia Association of REALTORS® • www.VARealtor.com
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How regulation is changing the business, and what it means for you
When Considering a Real Estate Partner...
The Choice is Obvious Credibility & Integrity...
Our Top Priority...
When you partner with Long & Foster, you have the strength of a powerful and well-recognized brand behind you. As the #1 independent real estate company in the nation, the stability and integrity of the Long & Foster name will open doors for you.
At Long & Foster, our agents are our top priority. We’ve built our reputation and success on ensuring that our agents have the training, tools and support to allow them to focus on what they do best — bringing buyers and sellers together.
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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, 2011 – December 31, 2011. 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. ©2012 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 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.
VARbuzz.com. Your virtual café for real estate news, views, and issues. Read the perspectives of your fellow Virginia REALTORS®. Join the conversation at VARbuzz.com today.
Get it? Got it? Good!
In addition to the print version of Commonwealth, VAR publishes electronic newsletters at regular intervals, including...
...the online supplement to our print magazine, published twice each month.
Follow and friend us! VARealtor.com/twitter VARealtor.com/facebook VARealtor.com/linkedin ELECTION DAY: NOV. 6 — VAR’S 2012 ENDORSEMENTS: PAGE 29 October/November 2012
A journal for real estate professionals published by the Virginia Association of REALTORS® • www.VARealtor.com
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VARealtor.com/commonwealth VOLUME 19 ● ISSUE 5 2
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Not so simple WE ALL WANT simple explanations for everything — the bad guy to blame, the cause of some war, the reason for today’s stock market performance. But life isn’t clear-cut like that. The “bad guy” didn’t act alone. The war wasn’t about land or revenge or oil — it’s a lot more complicated. And don’t get me started on the stock market. But we like our stories. We like things, if not black and white, at least with clear shades of gray. What caused the Great Recession? Deregulation of banks, obviously. No, it was our consumer culture. No, it was greedy lenders. No, it was Realtors® and their unqualified clients. It was Bush’s policies. It was Clinton’s. No, Bush’s. Reagan’s. Carter’s. Point is, you can’t blame a single person or a single event. Reality is messy. Keep that in mind when you deal with lenders. Do they seem to be taking their sweet time making a decision? Asking for more and more paperwork? Needing updates to forms? Clearly the problem is with the lender, right? As convenient as it may seem to blame banks for making it hard to buy a home, there’s a lot more to the story. Sure, there may be incompetent lenders, but the vast majority know what they’re doing and want to make that loan. So it made sense to talk to lenders to get their side of things — to
learn what’s going on backstage while you and your clients are waiting to hear about the next hoop you need to jump through. What we learned surprised us. As frustrated with lenders as many Realtors® are, those lenders are also gnashing their teeth — not at Realtors® (usually), but at the hoops they have to jump through to get a loan processed. The regulations enacted in the wake of the Great Recession had good intentions, but we all know where that road can lead. For lenders it means thumbscrew-tight restrictions not only on who qualifies, but how they qualify — minimum and inflexible requirements for everything you can think of, from credit rating to income to loan-to-value ratio. If anything isn’t up to snuff, the loan won’t be eligible for the secondary mortgage market. The banks’ lack of flexibility shows itself in what can seem like an endless stream of paperwork and minutiae. But their marching orders — and regulations — are out of their control. It might get better, it might get worse. Check out “The art science of mortgage lending” starting on page 18, and maybe you’ll cut a little extra slack. ● Andrew Kantor, Editor andrew@VARealtor.com OCTOBER/NOVEMBER 2012
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OCTOBER/NOVEMBER 2012 VOLUME 19 ● ISSUE 5
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Questions and answers about Virginia real estate law
14 lifelessons When real estate pros break the rules ... and get caught
16 formfactor Working with an unrepresented party? Be sure to disclose who you work for.
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in every issue 43 contactvar 44 lastword APEX Award of Excellence winner 2
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QM and QRM loans explained
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The numbers that shape your world
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News flash: The lending landscape has changed. But while you grumble about lenders, they’re dealing with a lot more than you probably realize. Here’s what you need to know about the new lending landscape.
The home mortgage market is about to be ruled by two kinds of loans: QM and QRM. Save your clients time and energy — and yourself some headaches — and know what they mean.
VAR’s 2012 endorsements Election Day is Tuesday, November 6. Which candidates are the best for the real estate market? Look no further.
WWW.VAREALTOR.COM
Work Smarter You were dissatisfied with your previous franchise organization. What made you start looking around for something new? Many agents in that brokerage couldn’t sustain the high desk fees and still run their real estate business. When they finally got a commission check we
had to take it away – I felt like a collection agent. It created a negative relationship between the agent and the broker. When my agents came over to EXIT Realty, they didn’t have that monthly expense – they could now use that money towards their marketing budget to help them grow their business.
By taking advantage of the EXIT Formula of single-level residuals, agents can benefit while helping to grow the company and enjoy that third stream of income – that was powerful for me and for my agents.
So why EXIT Realty?
To me, owning an EXIT Realty franchise means freedom. It’s working smarter, not necessarily harder. When I joined EXIT in 2007, my father’s health was declining rapidly (he eventually passed away in 2009). I had just opened a brokerage in Virginia and I had to spend a lot of time in Pennsylvania. Receiving sponsorship income allowed me to spend the time with my father that I needed to and still be able to pay my expenses.
EXIT has the solutions to all of the problems faced by the real estate industry – things like health insurance (through EXIT’s Approved Supplier program), retirement benefits and a third stream of income. In other real estate companies, many agents go out and become dual career agents because they need some type of steady income in order to sustain them in a tough market.
Personally, what does EXIT mean to you?
Terrylynn Harrell, Broker/Owner EXIT Choice Realty, Woodbridge VA
Does Terrylynn’s story resonate with you? Call Nancy & Tom Shaver, Regional Owners - EXIT Realty Virginia, today to find out more! 1.804.387.4758
www.exitvirginia.com
quickhits
ANDREW KANTOR
Customer service
Clients unhappier with their real estate companies: JD Power Buyers and sellers are less happy with their real estate companies than ever, according to J.D. Power and Associates. But there are a couple of notable caveats. The company’s 2012 Home Buyer/Seller Satisfaction Study (released last week) found that overall satisfaction among home buyers was rated at 78.9 percent; among sellers, satisfaction was at 76.8 percent. Both numbers are down from 2011, and both are at their lowest level in history. (Although “history” only means the past five years.) For buyers, the company measured satisfaction with the individual agent/salesperson, the office itself, and the variety of additional services. For sellers it measured
satisfaction with the individual agent/salesperson, with the marketing done, the office itself, and the variety of additional services. So what’s the deal? J.D. Powers says that “customer expectations are not being met, either in terms of sellers having to compromise on their listing price, or for buyers who are compromising on the home’s condition and size.” What’s particularly interesting is that people feel a lot more loyal to a real estate company than to a particular agent: [C]ustomer loyalty is stronger toward the real estate company than toward the agent. [Fewer] than 20 percent of customers say they “definitely will” switch real estate companies if their agent moves to another company.
Of course, perception and reality often differ. This sentence may speak volumes: “On average, sellers report receiving 89 percent of their listing price.” According to MLSs in Virginia, though, in the past year sellers here have received between 97.2% and 98.3% of their asking price. In other words, don’t trust people to do the math themselves. Unfortunately, because they believe they’re getting a lot less than they ask, they’re unsatisfied with their agents. Lesson: Manage client expectations.
Milestones
Realtor Joe Funkhouser named as JMU’s rector VAR past president and NAR Distinguished Service Award recipient Joe Funkhouser of Harrisonburg has been named rector of James Madison University’s board of visitors. He had been appointed to a second term on the board by Gov. Bob McDonnell, and was chosen by the board to serve as rector. Funkhouser, president of Coldwell Banker Funkhouser Realtors®, has served on the board of directors of the JMU Foundation, as well as on the Executive Advisory Board for the university’s College of Business. As rector, Funkhouser’s job will be to work with JMU president Jonathan Alger, conduct board meetings, and appoint board members to serve on the board’s six committees. 4
october/november 2012
www.VARealtor.com
Agency changes
VREB offers guidance on new agency law
Risk management
Offering general mortgage advice is OK, just don’t get paid If you help clients get loans, you need to be careful you don’t end up classified as a mortgage loan originator (MLO) — because you’d be unlicensed and in trouble. Under Virginia’s SAFE Act, the State Corporation Commission sets requirements for MLOs, and anyone who helps someone procure a mortgage must be licensed as one. The way the rule was worded apparently implied that a Realtor® who gave advice or recommendations to clients about loans might find herself classified as an MLO and thus need a license. But VAR worked with the SCC to make sure that Realtors® who offered occasional assistance — the kind you might offer to a customer or client — would be exempt from the SAFE Act’s regulations. Here’s the important part: There is a limitation to the exemption. If you are compensated in any way by the lender, a mortgage broker, or other mortgage loan originator — or someone who works for one of them — you are considered a mortgage loan originator (MLO) and are subject to the SAFE Act and all the other SCC rules for MLOs. That’s probably something you want to avoid. Volume 19 ● Issue 5
As you know, Virginia’s new agency law took effect July 1. In short, it requires that all brokerage relationships be expressed in writing, and that in dual-agency situations you must give both clients an enhanced disclosure of the limits of your duties. Some questions arose about exactly when in the relationship a brokerage agreement was required. In July, a Virginia Real Estate Board workgroup was appointed to investigate that issue and publish a guidance document — essentially, how VREB would interpret the law. On September 6, the board released its “Guidance Document on the Necessity of Brokerage Agreements.” Anyone who attended the mandatory Residential Standard Agency course will receive a copy from their course providers (as required by VREB), and it will be posted on both the VREB website and VAR’s online Agency Center. All VAR members are urged to read the document thoroughly, and VAR’s attorneys are working with the Richmond and Northern Virginia associations’ attorneys to develop a Q&A resource as well. Essentially, it comes down to this: Is someone’s intent to buy, sell, or rent real estate? If so, you need a brokerage agreement. Per VREB: When a customer becomes a client is based upon the party’s intent. A licensee needs to use his judgment based upon a customer’s words and actions to make a determination as to when the intent to enter into a brokerage relationship is established and therefore, requires a brokerage agreement. VREB gives some examples of the (probably rare) cases in which a brokerage agreement may not be required. For example, “showing a house may be ministerial if the licensee takes the party to see what the typical features are in homes in the market area or to gather information on the market or area.” However, once you determine that the person’s intent is to buy, sell, or rent real estate, you must get a brokerage agreement signed. If a party asks the licensee for general information about items such as tax rates, HOA dues, schools or typical features of property in the area, these acts appear to be ministerial. However, if the party asks these questions about specific property because his intent is to have the licensee procure someone who is ready, able and willing to sell, buy, option, exchange, or rent real estate ... then a brokerage relationship exists requiring a written brokerage agreement. There are other examples and more detail at the VREB website, and plenty more information (including a link) at VARealtor.com/agency.
october/november 2012
5
quickhits Cool tech
Selling seasons
A nifty Realtor gadget: Impress your clients for about $8
Sell your house in the summer?
Here’s a nifty little tool you might want to stick in your pocket or purse for when you’re checking out a property: An ultraviolet flashlight. They cost less than 10 bucks, and they can be quite an eye-opener. What do they do? They make bodily fluids glow green. If you’ve watched CSI you’ve seen them at work, although you probably won’t be looking for blood (or other) stains after a murder. You can find them at hardware stores, and Battery Junction (batteryjunction. com) is an excellent online store that has several to choose from. Most use AAA batteries and LEDs that should last virtually forever. If you shine it around your bathroom, be prepared for a shock. No one is as good at cleaning as they like to think. But UV flashlights are a great Realtor® tool because they can expose a multitude of sins if a home has had pets. Because even a thorough carpet cleaning — unless it treats specifically for pet stains — won’t get it all out. No one’s pets are as well behaved as they like to think. The UV light detects “accidents” long after they’ve dried. So what may appear to be a beautifully clean carpet can turn out to have, well, a history. There’s no way to tell these hidden stains are there without the light. There’s no smell — but at least by shining a UV light around you’ll know they’re there. Can you imagine taking one of these lights with you with a buyer? Shine it on the carpet and see how clean those carpets really are. Oh, and heavy-duty versions of these lights are used by some hotels, too, to make sure the rooms are really clean. Still, you might feel the urge to take one with you the next time you stay in one. You don’t need to spend more than about $8.00 for a light, and Battery Junction even gives bulk discounts. Brokers take note. 6
OCTOBER/NOVEMBER 2012
Here’s an interesting trend that looks at the median sold price for homes across Virginia over the past two years: Prices rise in the summer and drop till January or so before heading up again. The up-in-summer, down-in-winter trend is expected when you’re looking at the number of sales, but seeing that it also affects the sale price is worth nothing — especially because prices jump a whopping 25% in the summer. Two other trends might give some insight here. First, the asked vs. sold price also tracks the seasons. In the winter, sellers tend to get less than they asked for than in the summer. (It’s not a huge difference — they typically get about 97% of asking price in the winter and 98% in the summer, so we’re talking about $2,000 - $3,000 on average.) Second, for the past couple of years at least, houses that sell in the winter have typically been on the market 20-30 days longer than those that sold in the summer (69-71 days vs. 37-47 days). So you’ve got two things happening here. 1. The houses that go on sale in the spring tend to having higher asking prices than those that go on sale in the fall — a whopping 25% higher. (Could it be that spring sellers are more likely people who are choosing to move, rather than being forced to by circumstance?) 2. The houses that go on sale in the spring tend to sell faster and for closer to the asking price — about 30 days faster and 1% more. The question is, is that something you can control? (Should you try to convince sellers to wait till April?) Or is that simply how the market works out because not many people have a choice about when they have to sell?
WWW.VAREALTOR.COM
WHAT MAKES A CENTURY 21 AGENT? YOU KNOW THAT STORY ABOUT THE TORTOISE? WELL, KIND OF LIKE THAT. ONLY INSTEAD OF SLOW AND STEADY, IT’S MORE LIKE RELENTLESS AND DEDICATED. THAT’S WHAT WINS THE REAL ESTATE RACE. ®
CENTURY 21 AGENTS. SMARTER. BOLDER. FASTER.
SM
C21.COM U.S. SOCCER IS A TRADEMARK OF THE UNITED STATES SOCCER FEDERATION, INC. ALL RIGHTS RESERVED. ©2012 Century 21 Real Estate LLC. All rights reserved. CENTURY 21® is a registered trademark owned by Equal housing opportunity. Each office is Century 21 Real Estate LLC. An equal opportunity company. independently owned and operated.
statswatch Going mobile Each year we conduct a member survey to get a feel for what our members want and use from VAR. This year, more than 460 brokers and 2,000 agents responded to the survey, which means the results are good indicators of most members. We were curious about members’ use of technology, specifically smartphones and their bigger cousins, tablets. We found that Realtors® and brokers have taken to them quite strong, and are making use of the more advanced features. Just about every one of you has a mobile phone, and about 80 percent of you have smartphones. That is not surprising. Further, most smartphone users take advantage of the “smart” aspect — using them to browse the Web, run various apps, and so on. Broker
Agent
Broker
Which of these statements best describes your use of your mobile phone? I don’t have or hardly ever use my cell phone for business.
Which of these statements best describes your use or feelings about tablet computers (iPad, Galaxy Note, etc.)? I have no interest in using a tablet for the foreseeable future.
0%
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19% I am considering buying one, but have not decided to do so yet.
17%
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I am planning to purchase a tablet within the next few months.
1%
I have a smartphone, and I use a few of its features (e.g., voice calls, texting, photos). I have a smartphone, and I use many of the features (e.g., texting, Web browsing, apps)
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I have a standard cell phone (not smartphone) and use it almost exclusively for voice calls. I have a smartphone, and I typically use it only for voice calls.
So it’s a little surprising to find that when it comes to tablet computers — Apple iPad, Google Nexus, Samsung Galaxy, etc. — 20 percent of you “have no interest in using a tablet for the foreseeable future.” Surprising because it would seem that the larger screen size would make browsing the Web, showing photos and documents, sending messages, and so on more convenient. (Shameless plug: Stop by the VAR booth at the Real Show and test drive our Commonwealth tablet app. If you’re on the fence you might change your mind.) Still, about 40 percent of you already do own a tablet computer, and about the same amount are thinking of or planning to buy one. Considering the holiday season is almost upon us, if you want just a few months you’ll find some great deals.
OCTOBER/NOVEMBER 2012
14%
I already own a tablet but use it primarily for personal reasons.
16% 65% 66%
I already own a tablet and use it regularly in my real estate business.
30% 31% 11% 16% 15% 15% 25% 21% WWW.VAREALTOR.COM
Does Your Client Need Real Answers About Homeownership? Here’s The Starting Line.
Looking for a way to help new clients take that first step with confidence? Tell them about VHDA’s free First-Time Homebuyer Class. It’s a great way to learn the entire homebuying process from start to finish, and how to stay on track as a responsible homeowner. The class is offered in English or Spanish, in person or online. And it’s free, with no obligation. For information, visit vhda.com or call 877-VHDA-123. Virginia Housing Development Authority | 877-VHDA-123 | vhda.com
legallines BLAKE HEGEMAN
Out of harm’s way From escrow issues to procuring cause, Legal Lines shares some of the more common and interesting questions that brokers ask on our Legal Hotline. Some of them are the kinds of conundrum members will see again and again. Others are unusual circumstances that illuminate the law. And some are asked so often we clearly need to get the word out. In this edition: The legalities of taking pictures and video, raffles for referrals, meth lab disclosures, and more.
Q:
I am the listing agent and have had terrible experiences with a firm in my area. In fact, this firm has caused previous deals to fail due to incompetence and unethical behavior. Do I have to cooperate with it? A: You should discuss your concerns with your client and if they con-
sent you do not have to cooperate. Article 3 of the Code of Ethics clearly addresses this issue: Realtors® shall cooperate with other brokers except when cooperation is not in the client’s best interest. The obligation to cooperate does not include the obligation to share commissions, fees, or to otherwise compensate another broker.
Q:
Does the Code of Ethics address written agreements? A: Yes, Article 9 speaks to getting agreements in writing whenever pos-
sible. I should also point out that violations of Article 9 are some of the most common ethics violations. Realtors®, for the protection of all parties, shall assure whenever possible that all agreements related to real estate transactions including, but not limited to, listing and representation agreements, purchase contracts, and leases are in writing in clear and understandable language expressing the specific terms, conditions, obligations, and commitments of the parties. A copy of each agreement shall be furnished to each party to such agreements upon their signing or initialing. Keep up with the Code — visit VAR’s Ethics Center: VARealtor.com/EthicsCenter 10 october/november 2012
Q:
I represent the seller and he is furious because he discovered that a buyer’s agent had filmed the inside of his house. I called the buyer agent, who confirmed that he recorded the interior of the dwelling but only for use by his client. Did the buyer agent go too far? A: Sellers and listing agents
provide access to properties so that prospective purchasers can view the interior and determine interest. I do not believe this grant of access extends to recording the inside of the dwelling any more than it grants the purchaser the right to go through the jewelry drawer of the seller. Furthermore, the seller may have safety concerns about a stranger having a video recording of the inside of his house Unless specific permission is given to film the interior of the house — in the MLS listing or in writing from the seller or listing agent — it should not be filmed. This is in line with Code of Ethics Article 3, Standard of Practice 3-9 which provides that “Realtors® shall not provide access to listed property on terms other than those established by the owner or the listing broker.” www.VARealtor.com
Q:
An inspection report revealed defects that the owner would not repair, and the buyer backed out of the contract. The seller and listing agent are now giving copies of the report to prospective buyers. The first buyer wants to prevent them from doing so. May he? A: The question is whether the report is proprietary to the first buyer.
Q:
I have a listing that is beautiful both inside and out. However, a neighbor told me my seller used to manufacture methamphetamines in the property. I checked with the local police department and they verified that meth production equipment was found when the house was raided six months ago. My seller refuses to disclose the home’s history to the buyer. What do I do? A: Meth manufacturing can
Even if it is, the buyer gave it to the seller, who probably can now use it to comply with his (and the listing agent’s) disclosure obligations. But whether it’s proprietary to the buyer or not, a buyer who doesn’t want it used by the seller in the future should make that a part of the contract, or at least condition his turning the report over on the seller’s agreement not to use it in the future. Regardless of any confidentiality agreement between the buyer and seller, a listing agent would have to disclose material adverse facts pertaining to the physical condition of the property contained in the report to prospective purchasers.
destroy a home and cause severe health issues for occupants because the chemicals created through meth production seep into walls and floors. Buyers may not know meth was made in a home until family members develop rashes and respiratory issues days or months after moving in. In summary, meth production clearly creates a “material adverse fact pertaining to the physical condition of the property.” Although the seller is not legally obligated to disclose this fact (to you or to prospective buyers), if you have knowledge, you must disclose that the house was used for meth production to a prospective purchaser prior to contract ratification. Volume 19 ● Issue 5
october/november 2012 11
legallines
VAR Legal Hotline (804) 622-7955
Q:
My firm would like to offer past clients an entry into a drawing for a new car if they refer us a client. Is this legal? A: There are several problems
with this plan. The entry into a drawing is a thing of value offered for the referral of clients. Only licensees may receive fees or valuable consideration for referrals, and offering a thing of value to an unlicensed individual for referrals is illegal. Also, the drawing appears to be a raffle which is strictly governed by the state. My understanding is that most raffles are limited to charitable purposes.
Q:
What are my disclosure obligations for online advertising? A: This question is asked on the Hotline a lot.
Online ads for a firm must have: • firm name; • city and state of main office; and • all jurisdictions (usually states) in which the firm is presently licensed. Online ads for a licensee (not a firm) must have: • the licensee’s and firm’s name; • city and state of the licensee’s office (not necessarily firm’s main office); • jurisdictions (usually states) in which the licensee holds a license, active or not. You should include all of these required online disclosures in some permanent, consistent way (like a signature on an e-mail) on any public facing website, e-mail account, blog, etc., that you use to communicate. ●
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. 12 OCTOBER/NOVEMBER 2012
Monday through Friday, 10 a.m. – 4 p.m. The VAR Legal Hotline is a free, members-only benefit for brokers. You can receive answers to questions about Virginia real estate law, and timely information on legal and regulatory issues concerning the real estate industry. The Legal Hotline provides legal information, not legal services. You should consult your attorney if you need representation or advice. You must register for the Hotline before you can call. Registration is free and quick. Go to www.VARealtor.com/legalhotline; you will need your NRDS ID number.
Who can use the Hotline? • You must be a principal or supervising broker.* • You must be a VAR member. • You must have registered for the Hotline (see above). • You must have your NRDS ID number available when you call. (* Each office can have one other person designated by the principal broker for Hotline access.)
E-mailing the Hotline You can e-mail your questions to hotline@ VARealtor.com. • Responses will be by phone; we no longer provide written answers to Hotline questions. • You must include your full name, phone number, and NRDS ID. We cannot respond to messages that do not include all three. • We will try to respond within 24 hours, but response time depends on Hotline activity.
Not a broker or member? If you aren’t eligible to use the Hotline, you can browse and search our Hotline archives at www.VARealtor.com/hotlinearchive and find more legal and risk management information in VAR’s Legal Resources Center at www. VARealtor.com/legalresources. You will need your NRDS ID number to log into the site.
Questions? If you have questions about the Hotline, contact VAR at (800) 755-8271 or (804) 264-5033, or by e-mail at info@VARealtor.com The VAR Legal Hotline should not replace your own legal counsel. We will not answer questions on matters WWW.VAREALTOR.COM unrelated to real estate or real estate brokerage, nor can we help with pending arbitrations.
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lifelessons Kathleen Toler
Shoulda, coulda, woulda Master of persuasion Tom Shorter’s clients, the Trices, gave him three separate money orders totaling $1,500 as an earnest money deposit for a property they wanted to buy. Shorter claimed that when he tried to submit copies of the money orders to the listing firm, they were too blurry. So he asked his sister to write a check to cover the money orders. Later, he changed his story and told the Board that she had given him “a couple of signed blank checks so he could pay her bills.” The contract was ratified, but Shorter didn’t submit the EMD to his principal broker until 19 days later—long after the required five days. Then the Trices gave Shorter an additional $2,000. He claimed that while he was showing properties to them, he had car trouble. His clients gave him a personal loan so he could have his car repaired. But according the Trices, Shorter had requested the money to help facilitate the purchase transaction. Shorter claimed he planned to pay back the loan after settlement or when he sold his aunt’s house, whichever occurred first.
When the deal fell through because the Trices couldn’t obtain financing, Shorter notified the listing agent that the contract should be canceled. He filled out the release, specified the $1,500 EMD should be disbursed to the sellers, and sent a preliminary copy to the sellers. But when the listing agent received the signed release, the EMD had been increased to $3,500 and indicated that it should be returned to the Trices. The listing agent called foul. Even though the change had been initialed by both Shorter and his clients, Shorter claimed he wasn’t aware of the change. But he later admitted that he intentionally filled out a fraudulent release with an incorrect and inflated EMD amount. He led his clients to believe that $3,500 would be returned to them, not the seller. Oh, and it turns out he lied to the Board by saying Veronica Lewis was his sister, not his girlfriend — probably because he didn’t want his wife to know. Shorter was fined $6,000 and his license was revoked.
A leave of absence Helena Kowalski, the sole owner and principal broker of her firm, Kowalski Realty, was interested in expanding her real estate business internationally. She decided to move to Poland for six months to help her elderly parents and look for business opportunities. While she was preparing to leave, she asked her brother-in-law, Peter Engel, to be her assistant while she was away. It was a convenient choice since she was already occupying office space at her sister and brother-in-law’s financial consulting firm. There was only one problem: By the time she left, she had given Engel all of the responsibilities of a principal broker, but he didn’t even have a license! While Kowalski was in Poland, Engel supervised three salespeople and managed the operating and escrow accounts. Kowalski didn’t review the accounts or even know what accounting system Engel used. (She had trouble checking both e-mail and her online bank accounts.) When she returned, Kowalski moved in with Engel and her sister. However, 14 october/november 2012
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A good relationship gone sour Lucy Redding approached her client, Richard Worthington, with an investment opportunity. A bank was selling a property for $400,000 and she said already had a buyer lined up to purchase it for $600,000. It sounded like a great deal, so Worthington signed a contract in which Redding acted as dual agent. He gave her an EMD for $10,000, which she deposited the next day. Since Worthington had a seven-year business relationship with Redding, who was the owner and principal broker of Redding Realty, he wasn’t initially concerned when he didn’t hear from her immediately. He assumed the deal didn’t go through. But when she didn’t return calls or e-mails for several months, he became suspicious. Eight months later, Redding finally produced a contract, but Worthington smelled a rat. The contract listed an individual as the seller — not a bank as Redding had originally told him. Meanwhile, Redding was managing three of Worthington’s rental properties, and she began depositing rent checks and security deposits from
she never caught up on the activities of her business and rarely went to the office. She claimed that she was focusing on building the business. Meanwhile, Engel continued to run everything. On the home front, though, family tension was building. In fact, it reached the point that Kowalski and the Engels had a family feud so bad that the sheriff’s department showed up. Engel told Kowalski to move out. He changed the combination lock to the office and transferred all of Kowalski Realty’s escrow funds to his company’s operating account. Kowalski filed a complaint to the Real Estate Board about Engel’s moving the funds, but the Board quickly realized that it was Kowalski who wasn’t in compliance. For his part, Engel claimed that Kowalski had lied Volume 19 ● Issue 5
the properties into her company’s bank account, despite the fact that the leases clearly stated that checks were payable to Worthington. After Worthington repeatedly asked for his money — totaling $11,000 at this point — Redding finally gave him an undated check for a fraction of the amount. The check bounced. Worthington filed a complaint with the Real Estate Board. When Redding didn’t respond to the Board’s inquiries, an agent visited Redding’s home. Redding claimed she was just returning home from being out of town and had never received the phone messages. She agreed to a meeting and said she would call to confirm a time. She never did. The agent followed up, this time setting a specific date and time. The day of the meeting, a person claiming to be Redding’s sister called the Board’s agent to say Redding was in the emergency room and could not make the meeting. Not feeling particularly trusting, the Board agent called the hospital. Redding wasn’t there. The Board approved Worthington’s claim for the full amount (now $17,000); Redding’s license was revoked.
to the police about what happened in the family feud, and that she was angry about having to move out and was planning to make a run on the bank accounts of Kowalski Realty. Citing Kowalski’s history of not playing a meaningful role in the company, Engel feared for the funds and moved them for safekeeping. The irony is that Kowalski taught classes for her local Realtor® Association. She was clearly aware of the rules, regulations, and responsibilities of a principal broker — she just didn’t bother to follow them. Kowalski was fined $2,500 and her license was revoked. l
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formfactor BLAKE HEGEMAN
Disclosure of Brokerage Relationship for Unrepresented Party(ies) — Form 100 Earlier this year, VAR changed the title of this form to add the words “Unrepresented Party(ies).” Why? The new title clarifies the purpose of the form. If both sides of the transaction are represented, then the Disclosure of Brokerage Relationship does not have to be given. For example, if a listing agent conducts an open house and a prospective buyer asks a substantive question but is represented, that agent doesn’t need to give a brokerage disclosure. The purpose of the disclosure is to put an unrepresented party on notice that the listing agent doesn’t represent him. If he is already represented he knows who works for him.
When should it be given? The law states that a licensee must disclose any brokerage relationship that she has with a party to the transaction as soon as she has a substantive discussion about a specific property or properties with an actual or prospective buyer, seller, landlord, or tenant who is not her client and who is not represented by another licensee. 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.
There’s more to Virginia’s new agency law than new forms. Be sure you’re giving the right disclosures and at the right time — keep out of trouble by visiting VAR’s Agency Center, where you’ll find videos, helpful documents, quizzes, and more to make sure you’re up to
NSHIP E RELATIO OKERAG UMERS RE OF BR brokerage DISCLOSU ANATION TO CONS re of any PL n disclosu written disclosures EX mpt writte ke
e pro st also ma to make ships. Th ensees mu brokerage relation ed by law ture of the are requir unrepresented. Lic er and the na in Virginia ing into oth fore enter to help you underst licensees of the public who are e be tat nts es and Real ers their clie uirements ip to memb n consents from relationsh itte y these req u to satisf n timely wr and obtai m is provided to yo nsee. for DUTIES of the lice his client attached ip E’S sh SE on ee owes relati THE LICEN u other d a licens brokerage a client an theless provide yo nsee represent lice none reement to a transaction can whom the ag nd e mi rag low. itten broke resenting you in ld always keep in be wr d a ibe ve must ha u shou is not rep duties descr wever, yo A licensee s. A licensee who owes the tance. Ho t licensee tie certain du ormation and assis d thus to whom tha inf ENT? tion, an valuable E REPRES ur transac SE yo EN in ts certain LIC represen ES THE or, under the buyer, WHOM DO the seller, t en res ee may rep lled a listing ns lice a reement ca s to the seller. nsaction, kerage ag ibilitie l estate tra ller and buyer. h an a written bro primary respons In any rea se dealing wit yer seller via his ces, both whenever resents a the licensee owes ller rep ted bu se circumstan ee the ns se A lice unrepresen ip with in which ca relationsh to assist an t and holding the agreement, must disclose his o allowed The Seller ac als ntr is co a ee ee The licens ng in the blanks of The licens ted buyer. filli ee unrepresen ial duties – such as the licens ter buyer and with minis sit. ee, then the licensee agrees to po by a licens the ip with escrow de represented agreement by which close his relationsh nsee be to es dis lice e desir nsee must n brokerag ermore, the If a buyer into a writte the buyer. The lice ented seller. Furth as delivering offers r must enter res ch sts of The Buye the intere seller – su h an unrep represent dealing wit an unrepresented whenever for r s ye tie bu du ial the particular rm minister seller in a may perfo offers. r and the and the ter th the buye t of both the buyer is and coun resent bo en rep city ns y pa co ma ca n al itte and his firm ormed wr ller in a du ller fully and A licensee but only with the inf th the buyer and se r or se ye bu d n, bo ation an the g tio r r entin t eithe transac any inform less The Buye nsee repres ntiality of to represen un seller. A lice limited in his ability feguard the confide rage relationship, The Seller st not ke sa licensee mu l the of the bro necessarily The licensee must the st , tru d ally tel . y an . Specific price, nor law ing exclusively hin the confidentialit by list ed is requir wit er than the d. on low ati ce orm obtained pri ce offere of such inf ller will accept a pri re su the n clo se tha dis r different yer that the l pay a price highe designate tell the bu wil broker to the buyer in the same pervising seller that ncipal or su ent different clients ed written consent pri a its res raph, also perm es inform ker to rep vious parag , and ion requir Virginia law iliated with the bro d in the pre representat aff clients licensees Designated agency/ relationship discusse of their respective o Designated al broker wh st n. transactio rties. Unlike the du ent only the intere ipal or supervising Licensees buyer. d an pa nc res seller nsees rep erests fully. The pri from both ker of both ancial nated lice int red dual bro ker, personal or fin other these desig represent those ide ns co l be ir bro ore d any may theref g the transaction wil close, except to the onship an to be rage relati dis sin ed by law the broke is supervi licensees may not less requir nts during m the clie dential, un Designated received fro sts to be kept confi re in writing. on ati ue su inform a client req to its disclo ding with information the client consents in good stan by members ASSOCIATION OF or be used only disclosed GINIA . may "VIR . This form the name REALTORS® ts reserved part, or the use of IATION OF RS®. All righ IA ASSOC le or in the VIRGIN OF REALTO of this form, in who sent from n OCIATION reproductio out prior written con GINIA ASS with by the VIR REALTORS®. The d 012 ibite T©2 proh COPYRIGH ASSOCIATION OF any other form, is IA the VIRGIN ", in connection with REALTORS®
snuff. VARealtor.com/agency
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.
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Jackie Amato, president of TowneBank Mortgage in Virginia Beach: “Everything good has come with somebody paying a bad price.”
Nathan Burch, president of McLean Mortgage in Fairfax: “On top of more stringent underwriting guidelines, the mortgage business now requires more time and staff to complete the same loans. This increases the cost to process, underwrite, close, and sell mortgage loans.”
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Steve Farbstein, senior executive vice president for StellarOne Bank in Richmond: “We continue to promote opportunities for home ownership as it continues to be a stellar time to purchase a home, despite the challenges in the lending world.”
Chip Glover, senior vice president for First Bank and Trust in Bristol: “The real estate industry is experiencing a level of government intensity unlike anything seen before … and unfortunately there is no end in sight.”
Richard Owen, executive director of the Virginia Mortgage Lenders Association: “The type of thing that needs to be addressed is financial literacy, not more regulation, All of us need to focus on educating the consumer.”
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Andrew Kantor
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How regulation is changing the business, and what it means for you Talk to Realtors® about what’s bugging them, and you can bet that mortgage lenders are near the top of the list. There have been plenty of complaints: They’re slow to respond, they ask for more and more (and more) paperwork, they bog us down in minutiae, and so on. And those lenders wouldn’t necessarily disagree. There’s background, however, they’d like more Realtors to be aware of. VAR CEO Scott Brunner sat down with four mortgage lenders and the director of the Virginia Mortgage Lenders Association — people who know firsthand what’s going on in the residential mortgage market. The question to them: What should Realtors know about your end of the mortgage-approval process? So we asked them what we ought to know — Jackie Amato, president of TowneBank Mortgage in Virginia Beach; Nathan Burch, president of McLean Mortgage Corp. in Fairfax; Steve Farbstein, senior executive vice president for StellarOne Bank in Richmond; Chip Glover, senior vice president for First Bank and Trust in Bristol; and Richard Owen, executive director of the Virginia Mortgage Lenders Association.
The impact of Dodd-Frank In the aftermath of the housing collapse of 2007, Congress passed a variety of laws meant to rein in financial institutions and prevent another collapse. The most notable law is the Dodd–Frank Wall Street Reform and Consumer Protection Act. It’s a large and wide-ranging law, and one of its many goals is keeping lenders from offering loans to people who can’t afford them… and eventually sticking taxpayers with the bill. When borrowers complain to lenders about delays and paperwork, one of the first culprits those lenders point to is the stack of new regulations that came out of the Dodd-Frank Act. Sticking to the new rules can take time, making them feel like the messenger being blamed for the government’s message. Today’s guidelines are so strict, from the lenders’ perspective, that processes that once were handled quickly now take much longer. While you’re wondering what in tarnation is taking so long, the lenders say they’re struggling to make Volume 19 ● Issue 5
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sure all the I’s are dotted and T’s crossed on every piece of paper … or risk not being able to sell the loan on the secondary market. That means more delays, something no one wants. It’s not as if banks are entirely anti-regulation. “No one is disputing that lending institutions need to be regulated,” said Owen, but “we don’t [need] more rules — just consistent enforcement of the ones already in place.” Because, he explained, “With Dodd-Frank, effective regulation is not the scenario that is unfolding, [and] the overall negative impact of the rules overwhelmingly outweighs potential benefits.” In this case, the rules aren’t just to protect consumers, but taxpayers in general. Today, most mortgages are sold to Fannie Mae and Freddie Mac, the government-sponsored entities (aka GSEs) that now control the vast majority of the secondary mortgage market since private companies pulled out in the wake of the housing collapse. Lenders want to sell their loans because they’re required to keep a certain amount of reserves on hand, and every loan is effectively a bit of red ink on the balance sheet. By selling mortgages on the secondary market, they free capital to make more loans. But the buyers — these days almost always Fannie or Freddie — want to make sure what they buy is kosher. So lenders focus on having their loans meet Fannie and Freddie’s standards. Otherwise they’ll either be unable to sell the loan, or, in the event of a borrower default, they’ll be forced to buy it back. Neither is appealing.
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Some of the delays that drive Realtors up the wall are actually put there intentionally, according to Dan Green, who runs The Mortgage Reports, a website covering the mortgage and related financial markets. “Federal law prohibits mortgage lenders from processing payment from an applicant until three days have passed from the point of application,” he wrote. Further, “In order to go to underwriting, a file must be ‘complete.’ That is, it must include the original signed application, the completed home appraisal, and the applicant’s complete set of supporting documentation. This may include W-2s, tax returns, pay stubs and bank statements, among other items.” While a complete and “clean” file might be underwritten in a couple of days, Green explained, every new piece of paper required can add at least another two days to the process. Waiting two weeks for the entire process to complete isn’t unusual, and there’s little a lender can do to speed things up. Once upon a time, a lender would look at a potential borrower’s entire financial picture not as individual line items, but as a whole. For the right borrowers, a lower income might be offset by a large savings account, for example. Today, they say, every item on an application has to meet minimum standards, period. “We’re no longer able to help in little ways by chipping in,” said Farbstein, www.VARealtor.com
meaning lenders can’t, for example, allow for a high loan-to-value ratio for a long-time customer with a perfect history. So while there is still money to be lent, Farbstein explained that “it has to be packaged a certain way” for Fannie and Freddie to buy it, and it has to be checked thoroughly. Very thoroughly. Because if having these regulations causes lenders to feel as if they’re walking on thin ice, seeing them enforced is like watching someone else fall into the freezing water. It has a, um, chilling effect. Lenders call it “pushback risk.” “When you hear of a big bank having to buy back a loan [from Fannie or Freddie], the reaction of everyone is to clamp down,” Burch said, because that buyback may have been triggered by the smallest of errors. The result is an abundance of caution. Every item on every piece of paperwork needs to be scrutinized. What it all translates to are delays in processing applications (and paperwork in general), clients being turned down despite what appear to be excellent financials, and requests for documentation that border on the minutiae. In Amato’s view, “You cannot [just] use common sense any more.” “We look at every document to make sure that we’re covering everything,” she said. “You could have a perfect loan for five years. It goes into foreclosure, and they find one little tiny T that wasn’t crossed. Guess what? You’re buying back the loan.” So while you and your clients might be frustrated at how long it takes a lender to process an application, lenders say they’re feeling your pain — and experiencing their own. “What we spend 80 percent of our time on now is making sure all our disclosures are exactly right, all our dates are exactly right,” Amato said. “We don’t process a loan for credit anymore — we process the loan for Dodd-Frank compliance.” That means having a larger and larger portion of their staff hours dedicated to paperwork — two-thirds, according to Farbstein, including training, software, and equipment. Those are the kinds of costs that can and will have to be passed on to the consumer. Which leads to another lender frustration: People who shop for mortgages strictly by the rate. That figure is only one part of the equation, they insist, and the downside to a slightly lower rate might only become apparent at the worst possible time: closing. “[Our] rates might be slightly higher because we’ve hired extra staff so the loan closes on time,” Farbstein said. Consumers, he explained, need to be educated to choose their lenders based on track records of customer service, not just the interest rate that day. “We need,” he said, “to change the mindset.” After all, they say, every lender has to comply with the same rules, so you aren’t likely to get a speedier response — or a ‘yes’ instead of a ‘no’ — simply by switching banks. “If someone says the bank down the street won’t give him a loan, chances are I can’t either,” said Burch. Glover put it more succinctly: “Cheaper isn’t better.”
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“We don’t process a loan for credit — we process it for Dodd-Frank compliance.”
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What loans will qualify? In a perfect world, a lender would be able to meet a potential borrower, size up his financial situation, and determine what kind of loan to offer; think “It’s a Wonderful Life.” But it’s not a perfect world. If nothing else, banks aren’t holding onto most of the loans they make — they sell them on the secondary market, transferring the risk onto whoever buys them. These days, that’s usually Fannie and Freddie — you and me. So early next year, the Consumer Financial Protection Bureau is expected to release its guidelines for qualified mortgages, or QMs. These guidelines will set the minimum standard for mortgages that Fannie Mae or Freddie Mac will be willing to buy on the secondary mortgage market. In other words, if a lender makes a non-QM loan, it has to keep it on its own books — and that’s something most lenders would rather avoid. So QM standards are effectively going to be the standard for most mortgages.
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As the CFPB prepares to release its standards for qualified mortgages, lenders are keeping a close eye on the process. What those QM standards will be is something that will affect their businesses in a major way, and for years to come. One of their biggest concerns: What little flexibility they have now will virtually disappear when those standards come out. QM, they say, will define the American mortgage for most of the population. QM, in effect, forces lenders to choose: They can take more risk (but not expect Fannie and Freddie to back them up), or they can play by the GSEs’ rules (and know that Uncle Sam’s got their collective back). But in Glover’s perspective, the CFPB is trying to make the art of loans into a science. “You can’t do that,” he said, because you’ll end up locking some wellqualified people out of the market. “The group of buyers that are going to be hurt the most are first-time home buyers,” he said. “People won’t move up because they won’t find anyone to buy their house.” Of course, the lenders who didn’t make those sub-prime loans — who screened their applicants and didn’t get caught up in the bubble — say that the new regs make them feel like collateral damage. Smaller lenders have always felt they had an advantage by being local. They know many of their customers, and they can use that local knowledge to help make smart lending decisions. But they see the QM standard (and QRM as well — see the feature story, “QM and QRM explained”) as taking away that home-field advantage. “We need to be [able to be] aggressive about our lending opportunities without looking over our shoulders,” Farbstein said. But in the upcoming post-QM world, “All the guidelines are the same. The wiggle room isn’t there any more.” Or as Burch put it, “An entire industry is paying for the sins of a few.”
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Will they have protection? Strict government rules are coming; that much seems certain. Banks, large and small, will adhere to them. But if the government is going to make up hard and fast rules for mortgages, lenders want to know that following those rules will protect them from lawsuits by unhappy borrowers. It’s called “safe harbor.” If a lender follows the QM guidelines and a borrower still defaults, lenders want complete immunity from any lawsuit that implies it didn’t do its due diligence. Today, it’s possible for someone who loses her home to foreclosure to do just that: sue the lender by claiming that it should have known the loan was out of her financial reach — “You gave me that loan even though you knew I couldn’t afford it.” Lenders want that option off the table completely. Consumer groups, meanwhile, don’t like the idea of 100 percent immunity. They agree that lenders should be shielded if they follow the rules, but they want a crack in the door, just in case. It’s called “rebuttable presumption of compliance.” Lenders would be presumed to have complied with the law unless someone can prove otherwise. The burden of proof would be firmly with the borrower. Right now, Owen said he’s concerned that Dodd-Frank invites more extensive litigation than necessary. If a borrower wants to sue a lender and say, ‘I never had the ability to pay,’ Dodd-Frank doesn’t require him to demonstrate harm or even be in default. The deck, from Owen’s perspective, is stacked against the lender.
AN INDUSTRY CLEANSED There’s nothing wrong with looking for a silver lining in even the worst of circumstances. Even the collapse and resurgence of the housing market had its upside, although, as TowneBank’s Jackie Amato put it, “Everything good has come with somebody paying a bad price.” For one thing, many of the bad actors have been forced out of the market. “Our industry has been somewhat cleansed,” Amato said, and the rest are paying much closer attention to the quality of their loans. (Although Amato pointed out that “those of us who survived probably already did.”) “There were people in the
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business who were [taking advantage of] the buyer,” admitted StellarOne’s Steve Farbstein, but now they’re out. “We’ve seen better quality of loan officers” too, said Nathan Burch of McLean Mortgage, and First Bank and Trust’s Chip Glover agreed — and it goes beyond lenders; we’re seeing better Realtors, better appraisers, and more conscientious people all around. There is also a better understanding of how everyone fits into the pictures, Farbstein said. “The definitions of roles [of lenders, bankers, Realtors] ... have been clarified.” Burch agreed. “It’s much better than it used to be, because we
understand that we need each other.” Consumers, too, have become more aware of the market and the processes. “If there’s anything positive to come out of the [housing crisis], it might be that consumers have become more aware,” Burch said. That’s a trend that should, hopefully, continue — beginning in the fall of 2011, high school students in Virginia are required to take a course in “Economics and Personal Finance” to graduate. But the bottom line is that, as Farbstein put it, “We came from a quantity environment, and now it’s about quality.”
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The future of Fannie and Freddie Until they were bailed out and taken over by the Federal government — “put into receivership” as governmentsponsored enterprises — Fannie Mae and Freddie Mac were private companies. But now, through them, Uncle Sam effectively controls the secondary mortgage market, which may not be a good thing. But what’s to be done? The answers range from “keep the government in charge” to “dissolve the GSEs and let the private market handle it.” “Fannie and Freddie going away would kill the market,” said TowneBank’s Jackie Amato. “Who’s going to take their place?” That’s Owen’s question, too: “Who has the money?” “It takes about $100 billion a month to satisfy the mortgage appetite of this country,” said Chip Glover of First Bank and Trust. If you think there’s going to be a way to fund that without Fannie and Freddie, he said, “We all need to go to Fantasyland and enjoy the day.” Products will shrink, rates will go up, and consumers will pay more. “Resources that would have gone into housing will make their way into other investments,” he explained. Despite the talk about phasing out government involvement in the mortgage market, Amato isn’t all that concerned: “It’s not going anywhere,” she said. “It can’t.”
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“Rebuttable presumption” would instead put the onus on the borrower to make a case. Lenders would have a presumption of compliance, but borrowers who felt they were the victim of unforeseen circumstances or truly egregious lender errors could still have their day in court. But even that small hole in the wall of protection concerns Burch. “I worry about lawyers setting up a cottage industry,” he said, and suing over every foreclosure even if it’s an uphill fight. There’s too much room for interpretation. “CFPB needs to put together a bright-line test to demonstrate underwriting standards have been met,” Owen said. “If the guidelines were followed … immunity should be total.” Farbstein agreed. “Safe harbor is incredibly important,” he said. “If [we don’t have it], I have to manage my business very tightly.” A lot of people will be denied a mortgage “unless they fit this perfect loan.” So there should be no risk at all for a bank if its loans conform to QM? Not at all, say lenders. There’s an obvious penalty, Amato said: “We’re buying the loan back if it doesn’t perform” and the process wasn’t followed.
“How do you eat an elephant?” There aren’t many fans of Dodd-Frank among lenders, although Owen grudgingly admitted it did some good: “Maybe one of the positive impacts is that it may help to minimize the number of lenders in the subprime area who abuse the process,” he said. Glover acknowledges that the bill had good intentions, but, he said, “There were unintended consequences we don’t even know yet.” Amato agreed: “A lot of them.” One of the most troubling is what Farbstein described as a tremendous cost “to manage, to educate, to update, to change forms” all to comply with new regulations. It doesn’t exactly make lenders excited about the mortgage lending business. “At some point,” said Farbstein, “we have to look at it from a profitability standpoint.” Spending so much of their time reviewing and re-reviewing applications is a major headache, but it’s far from the only one keeping lenders up at night. Take delinquencies. They hurt now, and they might hurt in the future, whether in the form of short sales (and the second lien holders that often slow the process to a crawl) or the foreclosure pipeline — the “shadow inventory” lurking behind the scenes that might start pushing prices down if it floods the market. “We know that there’s a shadow inventory,” said Amato, “but no one knows what it is ... because it hasn’t been released yet” by the larger banks. All they know is that there’s a significant volume of inventory that has to work its way through the system. Slowly. And while homeowners might love the idea of refinancing to today’s crazylow rates, all that refinancing activity is stretching lender resources, and it has the potential to clog the pipeline. Glover, for example, said that refis make up about 70 percent of his business these days. (The others reported much smaller
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numbers, however — about 40 percent for Burch and 27 percent for Amato.) The point is that the market is optimized for the good times, or at least the not-too-bad times. “The system was never designed to deal with the kind of delinquency that existed,” Glover said. But it’s pushing through. “How do you eat an elephant? One bite at a time.” And, of course, there’s the unknown — and a lot of it. Whether it’s a question about what’s coming out of Washington (or Richmond) or what new slings and arrows the economy will throw at us, the new normal, said Owen, is an environment of continuous change. “We don’t like it, but that’s what it is.”l
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october/november 2012 25
QM R
M Andrew Kantor
LOANS EXPLAINED One of the provisions of the Dodd-Frank Act defines two categories of mortgage loans that you have heard — and will hear — a lot about: QM and QRM. It directs different Federal agencies to come up with the details of each. As a Realtor , you’ll need to know about them because your clients are going to ask, and because starting sometime next year most of your clients’ loans will fall into one of those two categories. The idea of both QM and QRM is to set a nationwide standard for mortgage loans that makes sure qualified people can get mortgages, but that lenders don’t offer (and borrowers don’t borrow) more than they can realistically pay back. It stems from the fact that, without such standards, lenders were offering loans to people without taking reasonable care to be sure they could afford them. The standards have to be tight enough to protect consumers and taxpayers, but loose or flexible enough to ensure that just about everyone who should qualify for a loan does qualify. (The fear in both the real estate and mortgage lending industries is that these restrictions will be too tight, and qualified consumers would have trouble getting a loan.) In other words, QM and QRM are going to have a profound effect on Realtors . So here’s what you need to know about QM and QRM loans. (Obviously this is a broad-brush treatment. There are lots of details about the requirements of each — e.g., limits on points and fees, balloon payments, and so on — that are simply beyond the scope of this piece.) Keep in mind that lenders are certainly free to offer loans that do not meet these standards, but those loans (and any securities they’re packaged into) will not be backed by the government, nor will the lenders be safe from borrower suits if they can’t pay their mortgages. ®
®
26 october/november 2012
www.VARealtor.com
QM The standards for a qualified mortgage — QM — are being set by the Consumer Financial Protection Bureau (with input from other agencies and industry groups). The idea of a QM is centered around “ability to pay” — what standards a borrower must meet in order to qualify for a QM loan. Those standards include all the things you would expect: current and expected income, debt-to-income ratio, employment status, credit history, other equity, and so on. Like most bank loans, a QM loan will require the lender to retain at least a five percent interest in the loan — so called “skin in the game.” (You’ll see why that’s important in the QRM section, below.)
What are the issues with QM? The main issue mortgage lenders have with QM is how protected they are from borrower lawsuits if they follow the rules. There are two possibilities for the final rule. A) “Safe harbor” — borrowers who meet the QM standards will not be able to sue lenders if it turns out they didn’t actually have the ability to pay. Following the rule essentially grants lenders 100% protection. B) “Rebuttable presumption of compliance” — If a lender follows the QM guidelines and a borrower sues, the lender has the benefit of the doubt (“presumption of compliance”) but the borrower still has the ability to sue (that’s the “rebuttable” part) in the case of unforeseen circumstances. It leaves the door open a crack. Mortgage lenders are concerned about option B), because they feel that Volume 19 ● Issue 5
defending against lawsuits — even if they prevail — will be prohibitively expensive (especially for smaller lenders). The government should make the standards high enough and clear enough that meeting them provides “safe harbor.” Further, without 100% protection they say, many lenders will shy away from making loans to anyone without top-tier credit. Consumer groups, however, argue that it’s not right to close the door completely on borrowers, because loopholes and unforeseen circumstances might arise. As Eric Stein, senior vice president for the Center for Responsible Lending told a House subcommittee, rebuttable presumption “gives lenders a considerable litigation advantage but allows a borrower to bring a case when there is a rare, starkly unaffordable QM loan and strong evidence available at the outset… a safe harbor standard would prevent borrowers from bringing any claim concerning an unaffordable QM loan even in situations where the lender has acted in bad faith.” A second issue is exactly what the QM standard will be. For example, the CFPB is considering additional requirements if a borrower’s debtto-income (DTI) ratio is above 43 percent. (About a quarter of Fannie/ Freddie loans fit that description.) But the National Association of Mortgage Brokers doesn’t like the idea of too many specific standards. Chairman John Hudson told a House subcommittee that “the entire mortgage industry is already adhering to the general ability to repay standards,” and “It will be unfortunate to both consumers and industry alike should the CFPB create a one-size-fits-all october/november 2012 27
TOO LONG? DON’T WANT TO READ? QM and QRM are meant to set reasonable nationwide loan standards that protect consumers and taxpayers. QM (all about ability to pay): Set by CFPB, sets basic loan standards, and (as with most loans) requires lenders keep five percent “skin in the game.” Main issue is whether lenders are completely protected if they comply or only mostly protected. QRM (all about “skin in the game”): Set by SEC, FDIC, FHFA, HUD, OCC, and the Fed, stricter than QM, but removes fivepercent requirement. Main issue is how strict these standards will be, and whether too few borrowers will be able to meet them.
28 october/november 2012
underwriting standard with relation to DTI ratios, assets, employment, etc.” On the other hand, having vague or incomplete standards would not only defeat the point of the law, it would likely mean no “safe harbor” for mortgage lenders. (It’s hard to say you’re adhering to standards if those standards aren’t crystal clear.) The bottom line is striking a balance between standards that are tight enough to protect lenders and consumers, but loose enough not to shut out too many qualified people.
QRM A Qualified Residential Mortgage — QRM — is a loan that meets stricter standards than QM loans. For meeting those stricter requirements, lenders won’t have to maintain the five-percent stake that most other loans require. The QRM standards are being set by a list of Federal agencies, including the FDIC, Federal Reserve Board, FHFA, HUD, OCC, and SEC. Those standards are still up in the air, and probably won’t be finalized until 2013. One requirement that had been considered at one point was a 20 percent down payment, but that was taken off the table because of industry pressure that it was too strict.
What are the issues with QRM? Simply put, what exactly the standards will be. Lenders will want most of their loans to be qualified as QRM, because they don’t want to have to hold that five percent stake. So they’re concerned that the requirements (which will by definition be stricter than for QM loans) will be too strict. Then they’ll have to choose between keeping skin in the game, or losing a large portion of their market. There’s also the possibility that overly strict QRM standards will drive up interest rates and stall the housing recovery. But loose lending standards were a major cause of the housing bubble and the Great Recession. It’s clear that, left to their own devices, lenders will take extreme risks with lending knowing that taxpayers will (and did) bail them out. To protect taxpayers from another multi-billion-dollar bailout, QRM standards must be reasonably high… the key word being “reasonably.” Various government agencies are still discussing and debating the details of the QM and QRM standards, so you’ll be hearing a lot more about them, pro and con. The QM standards will probably take effect around the end of the year, with QRM following soon after, but even that isn’t certain. We’ll keep you updated. l
www.VARealtor.com
Election Day: Tuesday, November 6 The reason Realtors® have a political action committee is to exercise influence in local,
state, and federal elections. Through RPAC, we financially support candidates whose stances and voting records on real estate issues are good for Virginia Realtors® and property owners. We understand that you choose to vote for a candidate for a variety of reasons, some unrelated to your real estate business, but if your business is a consideration in your voting decision, you owe it to your business to at least consider RPAC-endorsed candidates. Here in Virginia, candidate endorsement decisions in state elections and recommendations in Congressional elections are made by Virginia’s 22 RPAC Trustees active Virginia Realtors®, just like you. In determining an endorsement recommendation in Virginia’s U.S. Senate races, Trustees sent extensive questionnaires to the two candidates, Governor George Allen and Governor Tim Kaine, asking their positions on several issues important to Realtors®. For example: • What is your position on tax reform proposals that would reduce or eliminate the mortgage interest deduction? • Do you support some level of government participation in the secondary mortgage market to ensure liquidity? • Do you supporting continuing government programs like FHA, which do not cost the taxpayers anything to assist American families with obtaining safe, affordable mortgage financing? Both candidates Allen and Kaine then met in person with Virginia RPAC Trustees on August 3 for separate 75-minute interviews. After the interviews, Trustees discussed at length Gov. Allen’s and Gov. Kaine’s positions on the issues, as well as their records working with Realtors®, before making the endorsement recommendation you’ll find on page 30. (The Trustees’ endorsement recommendations in Virginia’s 11 congressional districts were based almost exclusively on the candidates’ voting records on Realtor® legislation, as well as on input from local associations of Realtors® and Realtor® constituents.) VAR’s membership is diverse, with 28,000 Realtors® of every political stripe, and so we don’t expect that every single endorsement decision will please everyone. Our aim, however, is not to support Democratic Party or the Republican Party, but to create a Realtor® Party of elected officials who understand the issues important to your business. One last thing: For a brief look at how your Realtor® associations’ political advocacy efforts are saving you money and liability on a wide range of issues, watch “The Power of 28,000,” a short video at RealtorsChoose.com/rpac-101. I think you’ll be impressed.
A message from RPAC of Virginia chairman Tom Innes
Thomas N. Innes, Richmond, Chairman, RPAC of Virginia
VOLUME 19 l ISSUE 5
OCTOBER/NOVEMBER 2012 29
For the U.S. Senate: George F. Allen By Jay DeBoer
Gov. George Allen
This fall, Virginians will elect a United States Senator to fill the seat of retiring Senator Jim Webb. Former Virginia Governor and U.S. Senator George F. Allen and former Virginia Governor Timothy M. Kaine are competing in what has been described as one of the nation’s “hottest” elections. Following a careful assessment of the candidates, we recommend a vote for George Allen. Virginia’s Realtors have a long and favorable history with Governor Allen, stretching back to his entry into the Virginia House of Delegates in 1983. He has been a good and reliable pro-business vote, and particularly has been sensitive to issues of taxation and regulation that might have the effect of burdening home ownership and transfer.
❑ Governor Allen supports the deductibility for income tax
Gov. Tim Kaine Your Virginia RPAC Trustees: Tom Innes, Chairman, Richmond Jay Mitchell, Vice Chairman, Norfolk Zinta Rodgers-Rickert, Treasurer, Fairfax Bob Adamson, McLean
purposes of interest paid on mortgages — aka, the mortgage interest deduction (MID) — and is not in favor of a restriction of the deduction to one principal residence, or smaller limits on the value of the deduction.
❑ Governor Allen supports reform of the government-sponsored enterprises, such as Fannie Mae and Freddie Mac, in order to protect the public and to provide oversight, but is in favor of retaining a government role in the secondary mortgage market.
Louise Baker, Blacksburg James “Jim” Barb, Winchester Bradley Boland, Reston Patricia Buck, Springfield John Dickinson, Union Hall
❑ Governor Allen favors the adoption of a definition of Qualified Residential Mortgage that includes a traditional mortgage product with a low down payment.
Sandee Ferebee, Virginia Beach Virgil Frizzell, Reston George Grundy, Petersburg
❑ Governor Allen supports the continued existence of government
Delk Hamaker, Arlington
programs, such as the FHA mortgage insurance program, that grant access to affordable financing for housing purchases by American families.
Pat Kline, Springfield Jean Longest, Richmond Percy Montague, Charlottesville Forrest Odend’hal, Manassas Chandra Patterson, Newport News Cathy Saunders, Richmond Suzy Stone, Fredericksburg Thomas Sullivan, Williamsburg Christine Todd, Fairfax Kevin H. Turner, Bedford
30 OCTOBER/NOVEMBER 2012
❑ Governor Allen supports the National Flood Insurance Program, and wants it bolstered to remain on a sound fiscal footing. Governor George Allen has been a friend to Realtors in his roles as governor of Virginia, and as a United States Senator. We can be assured that he will seek and will listen to our positions on issues that affect our industry, and those with whom we deal as clients and as customers. We are happy to endorse him, and urge his election on November 6. WWW.VAREALTOR.COM
Congressional candidates Virginia 1 Rep. Robert Wittman (R) • 3rd term Wittman has one of the best voting records in the Republican delegation. He voted to protect landlords from onerous reporting requirements, he voted to extend the Homebuyer Tax Credit, he signed on to the letter stating the idea of a 20% down payment was not the intention of DoddFrank, he co-sponsored a bill to protect the Mortgage Interest Deduction, and he voted for the five-year extension of the National Flood Insurance Program.
Virginia 5 Rep. Robert Hurt (R) • 1st term Hurt has been a great addition to the Financial Services Committee and a real friend to Realtors® as a leader amongst freshmen on housing. He opposed the proposed 20% down payment requirement for qualified mortgages, and he supported the extension of the National Flood Insurance Program.
Virginia 8 Rep. James Moran (D) • 11th term Moran continues to have a solid relationship with Northern Virginia Realtors, as well as with NAR. He has always had an aboveaverage voting record on Realtor issues. In the past, he cosponsored the ban on banks in real estate. More recently he has opposed the proposed 20% down payment requirement for qualified mortgages, supported FHA loan limits, signed onto a letter asking regulators to consider unintended consequences of proposed lease accounting rules, supported us in working for smarter FHA approval standards for condos, and cosponsored the bill stating that the selling of home warranties is not prohibited by RESPA.
Volume 19 ● Issue 5
Virginia 2
Virginia 4
Rep. Scott Rigell (R) • 1st term
Rep. Randy Forbes (R) 6th term
Rigell introduced legislation to ban Chinese drywall, he voted to protect landlords from onerous reporting requirements, and to extend the National Flood Insurance Program.
Virginia 3
Forbes has been a solid supporter of Realtors®; he voted to protect landlords from onerous reporting requirements, and to extend the National Flood Insurance Program.
Rep. Bobby Scott (D) • 10th term Scott has consistently voted in support of NAR positions, such as the extension of the National Flood Insurance Program.
Virginia 6 Rep. Bob Goodlatte (R) • 10th term Goodlatte has been a regular supporter of NAR’s positions, including opposing the proposed 20% down payment requirement for qualified mortgages, voting to protect landlords from onerous reporting requirements, and voting to extend the National Flood Insurance Program.
Virginia 9 Rep. Morgan Griffith (R) • 1st term Griffith was a friend when he was in the Virginia General Assembly, and he’s voted to protect landlords from onerous reporting requirements, and to extend the National Flood Insurance Program.
Virginia 10 Rep. Frank Wolf (R) • 16th term Wolf has always had an above average voting record on Realtor issues — he cosponsored the ban on banks in real estate, for example. This year, he opposed the proposed 20% down payment requirement, worked to extend FHA loan limits, supported us in working for smarter FHA approval standards for condos, voted to protect landlords from onerous reporting requirements, and voted to extend the National Flood Insurance Program.
Virginia 7 Rep. Eric Cantor (R) 6th term Majority Leader Cantor has maintained a solid working relationship with NAR as well as with the Richmond Association of Realtors®, and he has been a good voice for real estate in his position.
Virginia 11 Rep. Gerry Connolly (D) 2nd term Group Legislative Actions: Connolly continues to go out of his way to engage on Realtor issues and has a great relationship with the Northern Virginia Association of Realtors®. In previous Congresses he’s maintained a 100% voting record on NAR issues. More recently, he’s opposed the proposed 20% down payment requirement for QRMs, co-sponsored a bill opposing changes to the MID, opposed reducing FHA loan limits, supported us in working for smarter FHA approval standards for condos, voted to protect landlords from onerous reporting requirements, and voted to extend the National Flood Insurance Program.
october/november 2012 31
Eminent domain: Give it more thought In November, Virginians will vote on the Eminent Domain
Property owners need to know that their property cannot
Amendment (Question 1) — a constitutional amendment that
be taken away by a government entity without very good
many believe will return the issue of property rights back to the
reason — a reason that focuses on the public good, as eminent
courts for interpretation, and out of the General Assembly.
domain was originally intended.
In 2005, the Supreme Court ruled (in Kelo v. New London)
But there is need and value to giving government entities
that the city of New London, Conn., could use its power of emi-
reasonable eminent domain powers (while still protecting
nent domain to take Susette Kelo’s house and transfer it to a pri-
property owners with reforms).
vate developer. The development of her property was considered a “public use” because it would generate jobs and tax revenues. VAR and many other state Realtor® associations immediately
VAR prefers to work through the legislative process, which we find inclusive and more predictable, as opposed to leaving important issues to the court system. We feel we have more
began working with their respective state legislatures to enact
influence and positive opportunities working through the
provisions to protect property rights and limit government or
General Assembly.
private enterprise from taking property for “public use.” Thanks in large part to VAR’s leadership, in 2007 the Virginia
The amendment is moving quickly and will most likely pass this November, and VAR will not formally oppose it. We believe
General Assembly adopted eminent domain reforms to protect
it will be supported by an overwhelming majority of voters,
property owners.
and while we do take principled stands, we prefer to pick
Despite the reforms, up for vote this November is an amendment to the Virginia constitution that would serve a similar purpose. It would permit the use of eminent domain only in cases
our fights and expend political capital — and our members’ resources — on debates we have a chance of winning. Still, we believe the constitutional amendment is not neces-
involving “a public service company, public service corporation,
sary for the Commonwealth, where the existing system and
or railroad … when such exercise is for the authorized provision
laws are sufficient to protect the rights of property owners
of utility, common carrier, or railroad services.”
from the government.
It also says that “private gain, private benefit, private enterprise, increasing jobs, increasing tax revenue, or economic development,” does not qualify as “public use.”
Here’s the full text of the proposed amendment: “That the General Assembly shall pass no law whereby private
Our stand
property, the right to which is fundamental, shall be dam-
By putting eminent domain restraints in the constitution
aged or taken except for public use. No private property shall
rather than the Code of Virginia, the restrictions passed in
be damaged or taken for public use without just compensa-
2007 would be superseded, and any issues involving eminent
tion to the owner thereof. No more private property may be
domain would be handled by a court, not in the General
taken than necessary to achieve the stated public use. Just
Assembly. The proposed amendment won’t protect property
compensation shall be no less than the value of the property
owners any more than the current law, and it could make it
taken, lost profits and lost access, and damages to the residue
more difficult for legitimate public-use projects.
caused by the taking. The term ‘lost profits’ and ‘lost access’
Imagine that a town wants to widen a road to allow better
are to be defined by the General Assembly. A public service
traffic flow to an area being developed for a shopping center. It
company, public service corporation, or railroad exercises the
needs to use eminent domain to secure the land for the road.
power of eminent domain for public use when such exercise
A constitutional amendment could prevent that from happen-
is for the authorized provision of utility, common carrier, or
ing, or tie the process up in the courts, even though the town’s
railroad services. In all other cases, a taking or damaging of
council held hearings and voted to allow the project — it’s
private property is not for public use if the primary use is for
clearly for the public good.
private gain, private benefit, private enterprise, increasing jobs,
And courts are notoriously unpredictable.
increasing tax revenue, or economic development, except for
Cluttering of the Constitution with non-essentials also
the elimination of a public nuisance existing on the property.
becomes an invitation to lawyers and a reservoir of legal fees
The condemnor bears the burden of proving that the use is
charged to taxpayers.
public, without a presumption that it is.” l
32 october/november 2012
www.VARealtor.com
accessibletech ANDREW KANTOR
Seek and ye shall be found If I can’t find you in 30 seconds, something’s wrong. I went looking for a Realtor® the other day — I needed some information about him for a project. I knew his name, that he was a Realtor, and that he was in Virginia. That should have been more than enough for me to find him with a simple Google/Bing search — or at least find his firm and hometown (which is all I really needed). No joy. In contrast, when on a whim I searched for my friendly GEICO agent, I had her phone number and home address (!) in seconds. And she wasn’t trying to be found. That ain’t right. The reality is that most potential clients are going to look for you online — you specifically or a Realtor® in your area (or with your expertise). Shouldn’t you be at least near the top of the results? Yes. And the way to do that is through what’s called search engine optimization or SEO. It’s a fancy way of saying “making yourself more visible and important to search engines.” While the overall goal is to make yourself findable, it breaks down a bit. 1. At an absolute minimum, searching on your name should find you. Think about informal referrals, where someone is only given your name. 2. Someone searching for real estate-related information in your area should find you. I.e., you want to be associated with real estate in your town or city. 3. Finding “you” means finding a Web page with useful information about you: notably what you do and how to reach you. There’s no point having your name appear if there’s no way (or reason) to follow up. You accomplish these things by controlling the kinds of information you put out on the Web — in other words, you control where and when your name appears.
Make yourself a home The most important thing — the thing you absolutely must do (if you haven’t already) — is create at least one Volume 19 ● Issue 5
page that’s your “home” on the Web. This is what people will find when they find “you.” It doesn’t have to be anything more than a single “business card” page on your brokerage’s site. At a minimum this home page — even if it’s just that business-card page — needs to contain up-to-date contact information for you (at least your phone number and e-mail address) and a brief description of your business (e.g., your specialties). Of course, if it was a more complex page with frequently updated information, all the better.
When social isn’t helpful Why doesn’t Facebook (or Google+ or LinkedIn) make a suitable home on the Web? Several reasons. Most important, things you post there don’t show up in search results. So you can post to Facebook till you’re blue in the face and no one who isn’t your “friend” will see them. Social media stuff also tends to disappear over time. Even your friends and followers won’t see what you post or tweet (that’s a Twitter post) if a dozen other people they know also post. Yours will just get pushed off. Finally, you don’t want your central Internet presence to be on someone else’s site (other than your broker’s). Even beside the enormous privacy issues, remember that fads come and go; the Internet is here to stay. Imagine if you took someone’s advice a few years ago and built your site on AOL or MySpace — both once considered to be solid for the long haul. Control your space.
october/november 2012 33
accessibletech No site? No problem Let’s say you have no interest in maintaining a website. You still need that Web “home,” even if you hardly ever update it. Because even if you don’t want to use the Internet for searching, most people do. They should be able to find you to call (or fax, or telegraph). Assuming you use the Internet, even if just e-mail, take a moment to create a simple signature block that you use wherever you can — at the bottom of all your e-mail, anytime you post something on the Web (even if it’s a message to a knitting forum or a muscle-car page). In that block, besides the required real estate disclosures, include a brief mention of what you do and a link to your Web home page. It’s not much, but it does mean that every time you post a message you’re adding a little cred to your name and home page For example:
-Zoe Washburne I’m a Realtor® in Springfield specializing in first-time buyers. Call me! www.smithjones.com/washburne (804) 958-3331 Smith & Jones Realty, Springfield Licensed in the Commonwealth of Virginia.
A quick resource www.seomoz.org/ beginners-guide-to-seo
34 october/november 2012
This is important: This home page cannot be on Facebook, Google+, LinkedIn, Twitter, or any other social network. It has to be a standalone page. It’s best to have it on a domain you or your company owns, such as webehomes.com, schlobotnikrealty.com, or whatever, but it can also be on a site host such as Blogger, Tumblr, or Wordpress.com. (Why? See the box, “When social isn’t helpful.”) Let me make that clear, because too many people don’t get it: You must create a Web page for you and your business, even if it’s small and simple. The next step is to make sure that page can be found.
Stand up, stand out Getting your name and site to pop up high on a search engine’s results can be a detailed, complex, and technical process. But this is a trade magazine, so we’ll stick to some broad basics. We know the goal: Get found. The biggest step to doing this is to have a website that’s updated regularly, because sites that remain static too long tend to disappear from search results. That doesn’t mean you have to become a full-fledged, full-time blogger; simply updating your site a few times a week is enough. Yes, it’s work. But that’s why they call it a job. If you have a technical person at your disposal (hint: try your local middle school), have her set up your site so it’s easy for you to add a new listing or comment, or to link to an interesting article. If you post something new fairly regularly, you’ll make a tremendous difference. No, you won’t attract legions of followers, but that’s not the goal. The goal is to look more useful to the Bings, Googles, and Yahoos of the world. Whether you only plan to add to your site on occasion or update it every day, there are a few small but important steps to take. Make sure the titles of your pages — the text that shows up in your Web browser’s tab — are meaningful. They should include your name and reflect the specific content of the page, for example, “Joe Schlobotnik – New Homes for Sale in Newton.” You want to avoid having every page with the same name (e.g., “Joe Schlobotnik, Realtor”). If you have a blog, each entry should have your name and the title of the entry, e.g., “Joe Schlobotnik, Realtor – New www.VARealtor.com
refinance tool is easy to use.” How to do this depends on how your Web site is built, so ask your resident Web or tech guy/gal to set you up and (hopefully) automate the process. On a related note, if you have a blog or other regularly-updated content, give entries meaningful titles rather than funny or pithy ones. That will help search engines find them. So as catchy as “How Low Can They Go?” is, you’re better off with “Lower mortgage rates mean more power for home buyers” instead. Better still, use local and real estate terms in your titles — remember that the goal is to look good to search engines, even if your human readers might find your titles dry: “Springfield home shoppers find low mortgage rates mean more buying power.” Also be sure that your name appears on anything you author — articles, blog posts, pointers to other information, and so on. If your publishing system defaults to a byline of “Editor” or the name of your
Volume 19 ● Issue 5
site, change it. Put your name everywhere you can. Again, it’s about what the search engines’ robots see, not how it looks to human visitors. Finally, if you include images, use their names to your advantage. Most digital cameras spit out files with names like IMG_1734.jpg or P516885.jpg; images you get from others could have any name imaginable, including “image.jpg.” So before you include one in your site, give it a more useful name that describes what it is: “chart_of_mortgage_rates.jpg” or “joe_ schlobotnik_headshot.jpg.” Ditto for any videos. The point is to get your name, your town, and your real estate connection onto your site as many times as possible. It will help convince search engines that you’re important enough to show up high in the results, and thus help clients and potential clients find you. And that, bottom line, is what it’s all about. Otherwise why be online in the first place? l
october/november 2012 35
rpacreport As of September 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
Cindy Hawks Keller Williams Realty Virginia Beach
Forrest Odend’hal Long & Foster Real Estate, Gainesville
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
Jane Quill RE/MAX Presidential Fairfax
Trish Szego ERA-Elite Group, Realtors®, Fairfax
Golden R Associations ($5,000) •N orthern Virginia Association of
Tom Stevens Coldwell Banker Residential, Vienna
Melanie Thompson Century 21 AdVenture Realty, Fredericksburg
Jack Torza Long & Foster, Realtors® Mechanicsville
Realtors®, Fairfax • R ichmond Association of Realtors®, Richmond • R oanoke Valley Association of Realtors®, Roanoke • W illiamsburg Area Association of Realtors®, Williamsburg • V irginia Association of Realtors®
Bill White Joyner Fine Properties Richmond
Hall of Famers have contributed a cumulative amount of at least $25,000 to RPAC.
36 october/november 2012
www.VARealtor.com
WHY I INVEST
Sterling R Investors ($1,000)
Bob Adamson McEnearney Associates, Inc., Arlington
Nancy Alert Re/Max Allegiance
Guy Allen One Stop Realty Woodbridge
Katy AllenbaughRichards First American Home Buyers Protection, Midlothian
Betsy Atkinson ERA Atkinson Realty, Virginia Beach
Julia Avent Re/Max Allegiance
Deborah Baisden Prudential Towne Realty Virginia Beach
Jim Barb Jim Barb Realty, Inc. Winchester
It’s one of the most important
things you can do as a REALTOR® to protect homeowners and your business. Contribute every year I do, and you should, too.” CC Bartholomew Long & Foster Real Estate, Inc., Manassas
Mary Bayat Bayat Realty, Inc. Alexandria
Eleanor Beaver Keller Williams Realty Manassas
Mary Ann Bendinelli Weichert, Realtors® Manassas
— Deborah Baisden, Prudential Towne Realty, Virginia Beach 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.
Laura Benjamin Roanoke Valley Association of Realtors® Roanoke
Brad Boland Keller Williams Realty Reston
Volume 19 ● Issue 5
Candice Bower McEnearney Associates/Leesburg Purcellville
David Bridges ERA Blue Diamond Woodbridge
Visit RealtorsChoose.com/RPAC-101 to hear about what inspired Henry to become an RPAC investor.
See how your RPAC investment is paying october/november 2012 37 off: Visit www.RealtorsChoose.com!
Sterling R Investors ($1,000)
R. Scott Brunner Virginia Association of Realtors速 Glen Allen
Pat Buck McEnearney Associates, Inc. McLean
Curtis Burchett MKB, Realtor Roanoke
Robyn Burdett RE/MAX Allegiance Fairfax
Peggy Burke Long & Foster Real Estate, Woodbridge
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
Moon Choi RE/MAX Presidential Fairfax
Vic Coffey Re/Max All Stars Realty, LLC., Daleville
Tracy Comstock Comstock Realty and Investment, Alexandria
Billy Coons Olde Virginia Realty Suffolk
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
Lisa Dubois Headley Re/Max Allegiance
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
38 october/november 2012
www.VARealtor.com
Sterling R Investors ($1,000)
George Grundy George Grundy & Associates Realty Petersburg
Kit Hale MKB, Realtors® 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
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
Patricia Jensen BHG Real Estate III North
Tom Jewell Carter Braxton Preferred Properties Leesburg
Jo Anne Johnson Westgate Realty Group, Inc. Falls Church
Sita Kapur Arlington Premier Realty, Arlington
Kathleen Kennedy Coldwell Banker Previews International, Alexandria
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
Barbara Jean LeFon Rivah Realty
George Lyons Long & Foster Real Estate, Woodbridge
Scott MacDonald Re/Max Gateway Centreville
Washington Commercial Association of Realtors®, Silver Spring, MD
Volume 19 ● Issue 5
october/november 2012 39
Sterling R Investors ($1,000)
Nakita Mattocks Vision Real Estate Services, Woodbridge
Keith May Kline May Realty Harrisonburg
Shane McCullar Keller Williams Realty
Glenda McDaniel Long & Foster Hales Ford Bridge, Moneta
Susan Mekenney RE/MAX Allegiance Fairfax
Tom Meyer Condo 1, Inc. Arlington
Brooke Miller Long and Foster Fredericksburg
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
Thai Nguyen Westgate Realty Falls Church
Vinh 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
Matthew Rathbun Coldwell Banker Elite Fredericksburg
Anne Rector Long & Foster Real Estate, Alexandria
Peter Rickert Coldwell Banker Residential Alexandria
Zinta RodgersRickert, RE/MAX Allegiance, Fairfax
Mario Rubio Rubio Real Estate Annandale
Fetneh Schacht Long & Foster Real Estate, Vienna
Henry Scholz MKB, REALTORS速 Roanoke
Scott Shaheen Long & Foster Richmond
Jean Siebert Siebert Realty Virginia Beach
40 october/november 2012
www.VARealtor.com
Sterling R Investors ($1,000)
Christine Singhass Realty World Select Fredericksburg
Karen Smith RE/MAX Commonwealth, Richmond
Katrina Smith Long & Foster/Webber & Associates Winchester
Kimber Smith Prudential Towne Realty
Vickie Stamper Keller Williams Realty Marion
Wes Stearns MO Wilson Properties, Inc., Woodbridge
John Stedman Commission Express Woodbridge
Pat Sury Montague Miller & Co. Charlottesville
Richard “Dick” Thurmond, William E. Wood & Associates Virginia Beach
Christine Todd Northern Virginia Association of Realtors® Fairfax
Trish Snyder Coldwell Banker Four Seasons, Mt. Jackson
E. James Souvagis Long & Foster Real Estate Fairfax
Cindy Stackhouse Century 21 Stackhouse & Associates, Dumfries
Minnie Stevenson 1st Choice Real Estate Staunton
Suzy Stone Century 21 AdVenture Realty Fredericksburg
Mack Strickland Strickland Realty Chester
Cindy Stuart Mountain Sky Properties Bland
Karen Trainor Weichert Realtors® Ashburn
Kevin Turner Century 21 All-Service Bedford
Sandra Wagner William E. Wood & Associates Poquoson
David Wilkey William E. Wood & Associates Chesapeake
Williamsburg
See how your RPAC investment is paying off: Visit www.RealtorsChoose.com!
John Wilson Coldwell Banker Traditions Williamsburg
Shanna Wiseman Parr & Abernathy Hopewell
Volume 19 ● Issue 5
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.
october/november 2012 41
Upgrade to an ocean view room, buy your monthly commuting pass, donate to your favorite charity…whatever moves you most. As a VAR member, you could save up to $343.90* on your auto insurance with Liberty Mutual. You could also enjoy valuable discounts tailored to the way you live today and save even more by insuring your home as well. Responsibility. What’s your policy?
&217$&7 0,.( %5$1' 72'$< 72 67$57 6$9,1* &$//
804-527-3902 ext. 51591 Client # 4624
&/,&.
www.libertymutual.com/var
&20( ,1
301 Concourse Boulevard - Suite 200 Glen Allen, VA 23059
This organization receives financial support for allowing Liberty Mutual to offer this auto and home insurance program. *Discounts are available where state laws and regulations allow, and may vary by state. To the extent permitted by law, applicants are individually underwritten; not all applicants may qualify. Savings figure based on a February 2011 sample of auto policyholder savings when comparing their former premium with those of Liberty Mutual’s group auto and home program. Individual premiums and savings will vary. Coverage provided and underwritten by Liberty Mutual Insurance and its affiliates, 175 Berkeley Street, Boston, MA. © 2012 Liberty Mutual Insurance.
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 erika@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 Analyst 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 5
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 Vertical Response, 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
october/november 2012 43
lastword SCOTT BRUNNER
The graying of Greenwood THE COMMUNITY WHERE I grew up is going to seed. I see it each time I go home to visit. I hear it from my parents, who’ve lived there in the same ranch-style house since 1964. “People don’t seem to care like they used to,” my mother sighs. “Where’s the pride?” The place is called Greenwood, an unincorporated rural enclave of modest single-family bungalows, ramblers, and split levels constructed in the 1940s, ’50s and ’60s, every one of them middle-class in the vintage, thoroughly blue-collar, 30-year-fixed-rate-mortgage sense of that term. There’s no real plan to Greenwood — just quaint homes that through the years sprouted up along a warren of narrow country lanes. No covenants, no HOAs, no sidewalks, no sewers; even the landscaping is haphazard. When I grew up there in the 1970s, it was out in the sticks, bedroom community to Bessemer, a rusting iron-and-steel town on the brink of decline as the iron-smelting and rail-car construction operations that were its industrial base were beginning to downsize or shut down. Later, as Bessemer crumbled amid failures of leadership and give-a-damn, construction of I-459 and a McDonalds at Exit 6 would come near, offering easier access to nearby Birmingham, where the thriving medical center was quickly supplanting down-on-its-luck US Steel as the area’s major employer. In the gauzy half-light of memory, I see Greenwood as ever tidy, 44 OCTOBER/NOVEMBER 2012
lovely in its unpretentiousness, a purlieus of well-tended yards alive with colorful perennials and flowering trees and shrubs that seemed as if they’d volunteered in just the right spots, like the fastidiously mown crabgrass that passed for turf in those parts. And children: running, bicycling, skating, playing ball, swinging from trees — children, everywhere. In the glare of the present, though, I see that Greenwood has grayed. Many of the homes populated in my youth by young families are now inhabited by empty nesters, grandparents awaiting the next visit from the children of the children I knew — if those grandparents stayed in Greenwood at all. Many did not, lured away by new developments or retirement communities in nearby Hoover or Shelby County — the new boom areas. Others lived out their lives in those houses, and when they died, the home place was left to be snatched up by investors, eager to turn increasingly threadbare dwellings into incomeproducing rentals for UAB medical students and seasonal workers and other transitory types. Rentals of the single-familydetached variety abound now in Greenwood. And with rentals has come, it appears to me, a different civic sensibility, in both landlord and tenant. It may be portrayed in peeling paint and derelict lawns. It can be depicted in drooping gutters and neglected crepe myrtles. And it is enunciated in the plaintive sighs
of long-time residents: “People don’t seem to care like they used to. Where’s the pride?” There are exceptions, of course. Not all renters or landlords are without pride in their homes. But in the graying of Greenwood, I see that the concept of “home” is as much about a feeling as it is about ownership. Access to decent housing is a right I would never disparage. Renters are people, too, and worthy of all the respect due any human being. But there is an exponential, qualitative difference of perspective that almost always comes with ownership, a civic sensibility that says, “This is mine. It may not be much, but I worked hard for it, and I’m going to take care of it.” It’s a feeling of belonging to a community, of being rooted, connected and linked to something larger than just a patch of ground and some sticks and bricks. It’s that linkage that nurtures pride: the understanding that the attention and care you give to your home is a reflection of who you are and what you believe about your community. In Greenwood, I fear some of that feeling is slipping away, and when I visit home there, I miss it. ● Scott Brunner is VAR’s chief executive officer. Contact him at scott@varealtor.com. WWW.VAREALTOR.COM
What if... your company helped you to master the mystery of maximizing social media? “I joined Prudential PenFed Realty because I saw the potential for a lot of personal growth with the support of my branch manager and the strength of affiliating with Prudential PenFed Realty. I have been very impressed with everyone I have met since joining and am especially impressed with the social media and e-business platform which will help me to take my business to the next level!” If you have other questions for Read, feel free to contact him directly: Read Knox Towson Office (443) 847-9534 Read.Knox@PenFedRealty.com
Prudential PenFed Realty’s full time social media/e-real estate staff maximizes what the company is doing and also assists agents through regular webinars and individual assistance. Contact us to find out how many more closings to expect if your company was Prudential PenFed Realty! For details and to arrange a confidential tour please contact any of our offices listed below or visit PenFedRealty.com.
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Prudential PenFed Realty is Growing! We added two new Tennessee offices giving our agents more potential leads in the future! Grow your business! Join the Revolution Today! M A RY L A N D Annapolis Bethesda Canton Crofton Elkton Federal Hill Ft. Meade Gaithersburg Harford County Howard County Ocean City
OFFICES 410-266-0600 301-961-6000 443-769-1700 410-721-3711 410-398-2401 410-547-5700 410-519-4221 301-948-4811 410-515-5300 443-325-7890 410-524-7000
Ocean City West Ocean Pines Olney Pikesville Potomac Village Roland Park Salisbury Severna Park Silver Spring Towson Waldorf
410-520-2600 410-208-3500 301-260-7700 410-484-8322 301-765-7653 410-464-5500 410-912-4700 410-647-8000 301-879-2600 410-828-4700 301-870-7653
NORTH CAROLINA OFFICES Fayetteville-Ft. Bragg 910-868-7196 Fayetteville-Ravenhill 910-401-3330 TENNESSEE OFFICES Ft. Campell 931-647-8342 St. Bethleham 931-503-8000 T E X A S O F F I C E S San Antonio-Huebner 210-493-1733 San Antonio-Waterford 210-545-7653 VIRGINIA O F F ICES Alexandria 703-836-1464 Fairfax/Oakton 703-691-7653 Hamilton 540-338-4171
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Kingstowne 703-550-7653 Lake Ridge 703-497-7788 Leesburg 703-777-1250 Manassas/Gainesville 703-396-6000 Mark Center 703-379-0548 Reston 703-716-2900 Vienna 703-281-8500 Winchester 540-722-9300 Woodbridge 703-897-4663 WASHINGTON D.C. OFFICES Capitol Hill 202-393-1111 Uptown 202-243-4200
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.
DOM I N AT E S the 2012
500
1
Holding the #1 spot in the Real Trends 500 for both transaction sides and units this year, Keller Williams offices represented 23 percent of the top 500 brokerages ranked by closed transactions and 24 percent of the top 500 brokerages ranked by closed volume – more than any other real estate franchise.
KW Brokerages appeared in the Top 50 more than any other brand, making KW Highest Percentage Increase in Sides
Sales Volume per Office
34
Transaction Sides per Office
Largest Increase in Closed Transactions
(2010-2011)
(2010-2011)
28
27
Number of Brokerages
Highest Increase in Sales Volume
N o.
28
8
7
kw Re/Max
kw Re/Max
Largest Percentage Increase in Closed Transactions
31
(2010-2011)
19
15
12
in:
7
kw Re/Max
kw Re/Max
kw Re/Max
4
4
kw Re/Max Sotheby’s
Number of Brokerages
Top 50 Brokerages with Highest Increases During the Real Estate Market Downturn (2007-2011) By Percentage Rise in Transaction Count
31
By Transaction Count
By Sales Volume
26
By Percentage Rise in Sales Volume
31
16 4
4
kw Re/Max Sotheby’s
7
7
kw Re/Max Prudential
4
4
kw Re/Max
kw Re/Max
REAL Trends 500 is an annual industry ranking published by REAL Trends, Inc., a leading source of analysis and information on the residential brokerage and housing industry, and ranks the top 500 brokerages in the United States by sides and volume.
We invite you to join us. Find out if Keller Williams is right for you as an agent or as an owner. Call or email your confidential inquiry today!
Virginia and West Virginia Region 703-335-8000 • va@kw.com
Alexandria/Kingstowne, Alexandria/Old Town, Arlington, Chantilly, Charlottesville, Chesapeake/Greenbrier, Chesapeake/Western Branch, Fairfax, Fairfax Gateway, Fredericksburg, Great Falls, Lakeridge, Leesburg, Loudoun Gateway, Lynchburg, Manassas, Martinsburg, McLean, Midlothian, Newport News, Reston/Herndon, Richmond North/Hanover, Richmond West, Stafford, Tysons/Vienna, Virginia Beach/Hilltop, Virginia Beach/Town Center, Winchester Each Keller Williams® Realty office is independently owned and operated. | If you are currently a franchise owner, please disregard as this is not intended as a solicitation.