2013-08 Commonwealth

Bubble, bubble? (p. 8) • New property management forms (p. 20) August/September 2013

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

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firstword ANDREW KANTOR

Published by The Virginia Association of Realtors® The Business Advocate for Virginia Real Estate Professionals Mary Dykstra, ABR, CRS President Roanoke Bradley Boland President-Elect Reston Deborah Baisden, GRI Vice President Virginia Beach Bill White Treasurer Richmond Trish Szego, CRB, CRS Immediate Past President Haymarket Amanda Arwood Vice President of Marketing & Communications amanda@varealtor.com Andrew Kantor Editor & Information Analyst andrew@varealtor.com For advertising information, Katie Lindner 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.

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VARealtor.com/twitter VARealtor.com/facebook VARealtor.com/linkedin BUBBLE, BUBBLE? (P. 8) • NEW PROPERTY MANAGEMENT FORMS (P. 20) August/September 2013

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

Watch your

STEP Scams, cons, frauds, and flim-flam target real estate

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Volume 20 Issue 4 VARealtor.com/Commonwealth

Have I got a deal for you The office water cooler promises to add “activated oxygen” to my cup. The e-mail I got informs me that “President lowers mortgage rates!” Those Fruity Pebbles must be good for you — they’re ‘part of a complete breakfast.’

As a dyed-in-the-wool cynic, my first reaction to all of these is that they’re probably nonsense.

(How do you “activate” an element?) But there are plenty of people out there who are more trusting than I, and plenty of other people quick to take advantage of that. “Activated oxygen” sounds all scientificalish, and it’s easy to forget the rest of that “complete breakfast”: milk, toast, orange juice, fruit, etc.

You could call all these things “scams,” and I suppose they are to one extent or another. Some are a bit of harmless marketing fluff or at least mostly harmless — keep that in mind when Junior is waddling back from school after a few years of ‘nutritious breakfasts.’

But there are plenty of serious scams out there, run by people looking to bilk you and your clients out of a hefty chunk of change. (Hint: Don’t give your financial information to the company advertising via spam. You know who I mean.)

Of course, I like to think I’m smart enough to recognize a scam when I see it, but that’s just my ego talking. In reality, we all assume we’re smart enough to

dodge the con artist’s bullet — and yet thousands of people fall for what are, in hindsight, some pretty shady deals. So I could be an idiot; to paraphrase Donald Rumsfeld, I don’t always know what I don’t know.

If a couple of guys in a nondescript pickup truck offer to pave my driveway with some VDOT leftovers… well, I deserve what I get if I say, “Sure, sounds legit.” But — as you’ll see starting on page 22 — there are plenty of con artists running much more sophisticated rackets. In the age of OfficeMax, Photoshop, Craigslist, and disposable phones, it’s easy to create the trappings of legitimacy — and fool even some pretty smart people.

In fact, as we learned and you’ll see, there are some scams making the rounds that are targeting Realtors and their clients (and potential clients) specifically.

It used to be enough to heed the age-old advice “If it sounds too good to be true, it probably is.”

These days, though, you need to be a bit more on your toes.

Let’s be careful out there. l

Andrew Kantor, Editor andrew@VARealtor.com August/september 2013

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August/september 2013 Volume 20 ● Issue 4

contents

departments 4 quickhits The latest new and announcements for Virginia Realtors

10 statswatch A look at the numbers that shape your world

12 legallines Your questions — and Blake’s answers — about Virginia real estate law

16 lifelessons Remember the mortgage rules before you give advice to your clients

20 formfactor Three new property management forms to make renting easier

28 accessibletech The dos and don’ts of your e-mail signature

in every issue 1 firstword 30 rpacreport 35 contactvar 36 VARworks

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August/september 2013

feature

22

PHOTO: Don Farrall

Watch your step The messy real estate market is prime breeding ground for scammers and swindlers looking to take advantage of Realtors and their clients. Be careful out there.

Clarification In describing some of the new laws that will be affecting Realtors in 2013, we incorrectly explained the effect of HB 1807, which changes some of the disclosure requirements of condo associations.

We said that those associations must disclose the number of owner-occupied vs. rental units in a complex, in order to help potential buyers know whether FHA funding might be available.

As passed, though, the law is more straightforward. The packet must disclose whether any secondary mortgage market agencies (e.g., the FHA) have approved the complex for funding.

In other words (and in practical terms) associations must disclose whether FHA has said that the complex meets its requirements so buyers can use FHA loans to purchase units there. We apologize for any confusion.

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 EXIT Choice Realty, Manassas, VA EXIT Potomac Shores Realty, Arlington, VA

w w w. E X I TC h o i c e Re a l t y. c o m

quickhits

ANDREW KANTOR

Member services

“Your Realtor’s Role,” now easier to print “Your Realtor’s Role” is one of our most popular handouts, because it’s a great piece to give to clients.

It explains what a Realtor does (and doesn’t do), what sets you apart from mere “real estate agents,” and what to expect when contracting with one.

Basically, you should have a pile of these on the front desk in your office.

Now we’ve made it even easier. (Well, cheaper.) The original version was a lovely green and blue, but as you know (and as we mentioned in the December 2012 Accessible Tech column), printing in color is a lot more expensive than printing in black and white.

So guess what? We’ve made another version of “Your Realtor’s Role” that’s done in shades YOUR REALTOR S ROLE of gray — perfect for printing on a black-andwhite printer on the cheap. (The green one could come out mottled in B&W.) You can grab a hi-res, printable PDF from VARealtor.com/tools. Then head over to your local print shop and run these bad boys off by the hundreds. ’

®

understanding your options

Buying or selling a house is the largest financial investment most people make, and it’s one of the most complex. You need to think about financing, appraisals, zoning regulations, short sales, repairs, and more. Realtors® are here to help.

REALTORS® AND REAL ESTATE AGENTS

A real estate agent’s job is to help guide you through the complexities of buying or selling a property. But not everyone with a real estate license is a Realtor®. A Realtor® is not just a real estate licensee, but is also a member of the National Association of REALTORS®.

What’s the difference? Realtors® must meet stricter education requirements than the law requires, and they’re bound not only by that law, but by the higher standard of the REALTOR® Code of Ethics.

That’s why only Realtors are allowed to use the famous Realtor® “R”. ®

Your Realtor® is committed to protecting your interests throughout the entire transaction with the integrity, honor, professionalism, and expertise that meets the high standards set by the “Realtor®” name.

And Realtors® have access to more and more sophisticated tools to help sellers market their properties to the right audience, help buyers find just the right home, and make the entire process run smoothly.

You’ll find your Realtor® isn’t just an expert on your local real estate market, but also a trusted advisor who can help you navigate a complex transaction.

WHAT WILL A REALTOR® DO FOR ME?

Realtors® can be invaluable to buyers and sellers in a number of ways:

If you’re buying, your Realtor® can…

If you’re selling, your Realtor® can…

+ help you determine how much home you can afford

+ go over the market conditions to help you set the right price for your home based on everything from size and condition to recent sales in your neighborhood

+ explain financing options and help you find the right loan

+ assist in your home search through the local Multiple Listing Service, or with houses you find through Realtor.com and other Web sites

+ provide objective data about each property — including helping find information you might not realize is available

+ find the best places to market your property — including the local Multiple Listing Service and other channels that may not be available to the general public

+ provide negotiating expertise, and help resolve any issues that arise with the seller that could delay closing or void the contract

+ help prepare or “stage” your home for sale by suggesting small improvements that can make a big difference — everything from arranging furniture to choosing the right paint color

+ help you get and understand any homeowner association documents

+ take professional photos and video, and make sure they’re included in your home’s advertising

+ coordinate appraisals and other issues your lender may require

+ help you determine what inspections are necessary, such as for dry rot, asbestos, and mold, and the condition of the roof and septic tank — just to name a few

+ coordinate inspections, appraisals, and other issues to ensure a smooth closing

+ explain earnest money deposits, escrow accounts, and closing costs

+ provide negotiating expertise, and help resolve any issues that arise with the buyer that could delay closing or void the contract

+ go on a final walkthough to make sure everything is in order and any repairs have been made properly

+ work with you and the buyer’s agent to reach a smooth and problem-free closing

+ work with you and the seller’s agent to reach a smooth and problem-free closing

Forward looking

May marks turning point for home builder sentiment For the first time since 2006, a survey of the nation’s homebuilders found them with a positive outlook about the market. It’s not scientific, but it’s still nice to see.

The National Association of Home Builders’ Housing Market Index asks about 250 home builders their opinions on sales expectations and buyer traffic. The result indicates, in essence, the percentage that think the market is good

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August/september 2013

— i.e., anything over 50 means more than half are positive about the market.

The May reading was 44. The June reading was 52. That’s not only the biggest jump since 2002, it put the index over that magic ‘50’ mark for the first time since April 2006.

“Builders are experiencing some relief in the headwinds that are holding back a more robust recovery,”

said NAHB Chief Economist David Crowe. “Today’s report is consistent with our forecast for a 29 percent increase in total housing starts this year, which would mark the first time since 2007 that starts have topped the 1 million mark.”

www.VARealtor.com

Virginia business

Client connections

Virginia slips to #5 on “Top States for Business” list CNBC’s annual list of “America’s Top States for Business” is out, and Virginia has slipped further — now we’re down to number five (tied with Utah). After finishing first for three years (2007, 2009, and 2011), we dropped to third place last year, and dropped further in 2013.

Here are the top five states for business in 2013:

1. South Dakota 2. Texas 3. North Dakota 4. Nebraska 5. Utah, Virginia Why? CNBC ranked the states by a number of criteria, essentially boiling down to “where is it cheapest and easiest to have a business.” So “cost of doing business” — taxes, utilities, wages, and real estate — is high on the list, and that was our first big stumbling block.

Infrastructure and transportation, which pushed Virginia to third place in 2012, also hurt this time.

We measured the vitality of each state’s transportation system by the quantity of goods shipped by air, waterways, roads and rail. We looked at the availability of air travel in each state, the quality of the roads, bridges and the water supply, as well as the time it takes to commute to work.

Gov. McDonnell’s transportation initiative should be a big help, but the effects are years away.

There’s plenty of silver lining, though. Being “great for business” isn’t the be-all and end-all of rankings, and doesn’t equate to “a great place to live.” In fact, states that are good for business and states with the highest quality of life don’t line up.

Hawai’i, for example, is tops for quality of life, but bottom of the business list. Vermont’s quality of life is up at number two, but it’s number 32 for business.

(There’s certainly overlap. Nebraska ranks high for both, as do North and South Dakota.)

Clearly we have work to do if we want to keep attracting businesses, but we shouldn’t lose sight of the fact that a lot of other things matter, too.

Volume 20 ● Issue 4

Connect to clients with…hang gliding?

Instead of sending yet another refrigerator magnet, why not take your clients hang gliding?

That’s exactly the kind of thing some Realtors are doing as a way to bond with their clients in a way that’s memorable. Extremely memorable, according to a story in The New York Times.

[F]or those who make a living in this frantic field, one of the greatest challenges is distinguishing themselves from a large and aggressive pack. Some agents and brokers say the most effective way to do this is by skipping the usual client lunches and meetings over drinks, and instead finding unusual ways of spending time together.

Besides extreme sports, there are some other “unusual ways of spending time together”: One Realtor attends exercise classes with her clients.

Another goes kayaking in the Hudson River. Another tried turkey hunting. And one arranges giant scavenger hunts.

So next time you’re about to send someone a tin of peanuts or a calendar, why not consider something … different?

August/september 2013

5

quickhits Social media

How important are Facebook and Twitter for attracting customers? Maybe not very Facebook and Twitter — they’re critical to your business, right?

Well… maybe not. In fact, the three biggest drivers of business online are Web searches, cost-per-click ads (think Google), and e-mail.

That’s the finding from e-commerce analytics firm Custora, which looked at four years’ worth of online retail data to see what drove customers. It discovered that, when it comes to sales, Facebook and Twitter are all but useless. Specifically, 15.8 percent of the people who found a company via “organic search” — that is, using a general search engine like Bing or Google — became customers. About 10 percent of people who clicked on an ad also did, and about 7.5 percent of people who clicked through an e-mail from the company.

Meanwhile, not even one percent of those who found a company through Facebook or Twitter ever did business with it.

Now this research was looking at retail sales marketing, which is obviously different thing than what you do. (That’s why pay-per-click ads are so powerful — someone who clicks an ad is probably in the market to buy something.)

But the underlying lesson about what people respond to remains unchanged.

From a practical point of view, that means two things.

First, make sure you’re findable on the Web — if someone looks for your name or simply “Realtor in [insert city name here],” you should show up.

Second, if you have

clients’ e-mail addresses, use them.

(Smartly, that is. Don’t spam.)

That isn’t to say that having a Facebook presence and a Twitter feed is useless, but according to the number, those might be better for maintaining relationships, rather than creating them.

Green building

Buy a greener home, qualify for a better mortgage?

There are a handful of tax breaks for homeowners who improve the energy efficiency of their homes — essentially, the government reduces your taxes if you make your house greener.

Now a bill introduced in the Senate by senators Michael Bennet (D-Colo.) and Johnny Isakson (R-Ga.) would give a different kind of incentive — it would require lenders to take into account the energy-efficient features of a home when calculating a borrower’s income/expense ratio.

Essentially, it would allow buyers to qualify for a larger loan or a better rate if a home is energy efficient.

The idea is simple: When figuring what borrowers 6

August/september 2013

can afford to repay, banks assume they’ll have to spend a certain amount for heating, cooling, and other utility usage, based on what’s typical for the area and the type and size of home. The Bennet/Isakson bill would require them to assume that someone in a more energyefficient home would spend less… and thus be able to afford to borrow more.

A home-energy report would have to be prepared by an approved inspector (much like a radon or termite report), and lenders would explain the benefits of investing in green upgrades.

Oh, and — unlike a similar bill that was introduced a few years ago — this one would not penalize less-efficient homes; it would only reward those with greener features. www.VARealtor.com

Volume 20 â—? Issue 4

August/september 2013

7

quickhits Housing economics

Is there a new housing bubble forming?

Once upon a time there were two shaman in a tribe.

They both tried to predict how bad the upcoming winter would be. One threw rabbit bones and predicted a harsh winter. The other threw squirrel bones and predicted a mild winter.

The winter was mild, thus proving that throwing squirrel bones was a more accurate way of predicting the weather.

In an unrelated note, there is some speculation that we might be starting to inflate a new housing bubble, as prices are rising more quickly than is typical.

So, are we? Is there a bubble growing?

There are people who insist either yes or no, and have the bones, er, data to prove it.

Nope, don’t worry Rises and falls aren’t the same as bubbles and crashes.

What we’re seeing now are prices rising naturally.

We just came off a huge bubble bursting (in case you missed that bit of news). We hit bottom and now we’re recovering — that means prices are going to go up.

Government incentives are speeding that recovery, making it seem like a bubble.

Remember, prices will rise and fall based on supply and demand and a lot of other factors (unemployment, consumer sentiment, etc.) — that’s economics for ya. So this could just be a normal rise… and it may be followed by a normal fall. That doesn’t make it a “bubble” any more than the ensuing price drops will be a “crash.” Ups and downs are normal.

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August/september 2013

Yes, worry Prices are rising too fast. In a normal, “organic” market, they would gently swing back and forth — buyers’ market, sellers’ market, and so forth. What we’re seeing now is the next bubble inflating.

Now homebuilders aren’t worried at all — they practically scoff at the idea of a bubble. Why? Affordability, they say. NAR’s Housing Affordability Index (HAI) shows that the typical family can comfortably afford the typical home. In fact, Ara Hovnanian, CEO of homebuilding giant K. Hovnanian Enterprises told the Wall Street Journal that affordability was “the ultimate reality check.”

But there’s a tremendous — and obvious — hole in that logic. When the housing bubble burst and the economy crashed, the HAI shot up. According to the HAI, homes were incredibly affordable when the market crashed.

So why weren’t millions of people rushing to buy homes then? Because the HAI has a very narrow field of view. It ignored the fact that unemployment had skyrocketed, consumer confidence was in the dumps, and people couldn’t get a mortgage. But technically housing was affordable!

So when someone points to affordability as an indicator that we shouldn’t worry… well, it’s more complicated than that.

Maybe worry There’s another issue to consider: What drove the recovery. In many markets, it wasn’t individuals scooping up great deals with low rates. It was investors

www.VARealtor.com

taking advantage of low-priced foreclosures and bankowned inventory. The deals were great, and many single-family homes thus became rental properties.

Nothing wrong with that, of course. (Probably.) The issue is the long-term plans of these new landlords.

Two major possibilities: A. They’re going to stick to the business of rentals, and derive a nice income from tenants for the foreseeable future.

B. They’re going to be landlords until prices rise enough that they’ll do better to sell the properties at a solid profit.

That doesn’t mean that these are Bad Things that Must Be Stopped. It means we should at least be aware of the potential consequences of so many homes having become rentals.

If most investors choose option A, that’s going to keep those homes off the market for the long term.

Is that kind of long-term inventory reduction a good thing? Maybe, maybe not.

If most choose option B, the opposite will be true when rising prices mean a lot of homes will be put on the market. At the moment that might be good, especially in places where lack of inventory is a problem, but it will also push prices lower.

The reality is, we may be in another bubble, and that’s worth keeping an eye on. (Not that we can do all that much to stop it.) But the key word is “may.”

The huge influx of investors into the market is going to affect us — we just can’t say for sure how.

®

Volume 20 ● Issue 4

August/september 2013

9

statswatch

ANDREW KANTOR

Realtors’ voices heard by the Fed Working with the Federal Reserve Bank of Richmond, VAR surveyed members to get a front-line perspective of Virginia’s residential housing market, and how those conditions changed during the first quarter of 2013.

What makes this survey particularly important is that the results will be used by the Fed to help shape monetary policy nationwide.

Market conditions are better than the previous year

So what did we learn?

To quote Richmond Fed regional economist Andy Bauer, “These survey responses indicate that the housing market conditions have improved notably compared to last year.”

Check out the charts.

Foot traffic is better than last year

Tighter underwriting has frequently prevented a sale

39+21 35+43 57+71 2012

2012

57%

35%

4216+ 42+ 6916+ 15+

2013

71%

2013

43%

2012

2013

39%

21%

Inventory

69%

10 August/september 2013

16%

15%

High

Low

High

About Right

Low

16%

About Right

42%

2013

2012

42%

Check out all the results from the 2013 VAR/ Federal Reserve survey at VARealtor.com/FedSurvey.

Keep up (and impress your clients) with the Virginia Home Sales Report from VAR. Find the latest monthly and quarterly report data in a colorful, printable format, at VARealtor.com/ homesales.

www.VARealtor.com

legallines BLAKE HEGEMAN

Do this, not that In the course of thousands of Hotline calls over the years, I have heard of many situations where folks may have been well-intentioned, but have crossed the line into risky behavior. There are always better ways to achieve the outcome you want, as these — true — stories will illustrate.

Q:

Q:

In the agent remarks section of the MLS, a listing agent wrote, “Buyer can choose his own settlement company but if buyer doesn’t use the seller’s preferred company, buyer will be charged X amount at closing.”

A: The law is explicit: No seller may require the use of any particular settlement service provider as a condition of purchase.

This does not prohibit a seller from offering incentives to use the seller’s preferred settlement service provider, and the seller can offer discounts, upgrades, closing cost concessions, etc., as incentives.

I would like to believe that the listing agent here was attempting to convey an offered incentive if the buyer used the seller’s preferred settlement company. However, the remarks had the effect of suggesting an unenforceable penalty if the buyer chooses his own settlement company. That puts the agent in very risky territory.

A better way to do what the listing agent was attempting to do would be to put “Buyer can choose his own settlement company, but if Buyer will use the seller’s preferred settlement company the Seller shall pay _____ towards the Purchaser’s closing costs.”

12 August/september 2013

A landlord directs a leasing agent to include the following restriction in a rental property advertisement: “Landlord will not accept any tenant who intends to cook with curry in the property.” The landlord told the agent he wants this limitation simply because he doesn’t like the smell of curry.

A: Advertising this limitation is highly unadvisable. Even if the agent believes that the landlord’s only reason for the limitation is his aversion to the smell of curry, what do you think viewers of the advertisement will think? In my opinion, most will believe the restriction has a discriminatory intent. Also, even if the agent believes it wasn’t intentionally discriminatory, isn’t there a justifiable argument that the restriction creates a disparate impact on protected classes of individuals under the Fair Housing law?

Bottom line, the leasing agent should not participate in promoting such a restriction.

www.VARealtor.com

Q:

Q:

A buyer agent calls the listing agent and says his client would like to offer $200,000 for a property. The listing agent replies, “Put the offer in writing and then I’ll convey it to my client. I am not going to waste his time with an unenforceable verbal offer.”

A: The listing agent’s intent may have been to avoid wasting his client’s time — but his actions violated the Code of Ethics.

Article 1, Standard of Practice 1-6 Realtors shall submit offers and counter-offers objectively and as quickly as possible.

Article 1, Standard of Practice 1-7 When acting as listing brokers, Realtors shall continue to submit to the seller/landlord all offers and counter-offers until closing or execution of a lease unless the seller/landlord has waived this obligation in writing. Realtors shall not be obligated to continue to market the property after an offer has been accepted by the seller/ landlord. Realtors shall recommend that sellers/landlords obtain the advice of legal counsel prior to acceptance of a subsequent offer except where the acceptance is contingent on the termination of the pre-existing purchase contract or lease.

Note that Article 1-7 requires the listing agent to submit all offers, not just written ones. The listing agent may be concerned that verbal agreements for the sale of real property are not enforceable under the Statute of Frauds, which provides that, until there’s a fully executed contract on the property in writing, there’s no enforceable agreement. That may be true, but that does not relieve the agent of his Code of Ethics obligation to present all offers to the seller.

Volume 20 ● Issue 4

A seller knows about some problems with his house that could hurt his efforts to sell.

The listing agent tells the seller not to tell him, because he knows he must disclose some of them to potential buyers. Is this wrong?

A: Yes, the listing agent has greater disclosure obligations than the seller, and it could be an advantage for the seller to use an agent who “knows nothing.”

But listing agents should never counsel sellers to keep property condition issues to themselves lest they be passed on to the buyer.

When the buyer ultimately discovers the problem, he’ll never believe the listing agent didn’t know. Imagine the agent on the witness stand trying to convince the judge he was ignorant after he confesses to urging the seller not to tell him anything so he could keep the buyer in the dark.

The course that makes the most sense for both seller and listing firm is either to A) fix the problem up front, or B) disclose it and adjust the buyer’s expectations accordingly. Anything else invites complaints, suits, and very unhappy consumers.

By the way, because the listing agent’s disclosure obligation is independent of the seller’s, the listing agent doesn’t take his instructions from the seller on property condition disclosures. If the seller insists the agent not do what the law requires, the agent must say good-bye to him.

August/september 2013 13

legallines

Q:

A buyer client received the Property Owner’s Association packet and wants out. Therefore, the buyer agent sent the seller a signed release of contract (within three days of receiving the packet) requesting a release. Now the seller says he won’t sign the release and is proceeding to settlement.

Why? A: The buyer’s agent in this situation promptly complied with his client’s request and intended to end the contract based on a lawful contingency. However, the buyer may still be obligated under the contract. The POA Act provides a termination right within a specified number of days, but the buyer agent didn’t terminate — he asked for a release. A termination and release are very different things.

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

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

So the rule should always be: If your client wants you to deliver a termination, do so — and be explicit. You might also deliver a release in the hopes of getting your client’s affairs tied up neatly, but you shouldn’t leave it to the other side to characterize what you’ve done in the way most advantageous to them. Also, remember that even if your client has a termination right, you still need the mutual consent of the parties in writing or a court order to release the earnest money deposit. l

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.

14 August/september 2013

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

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

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

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

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

Who can use the Hotline?

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

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

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

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

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

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

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

Not a broker or member?

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

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

Questions?

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

THIS IS NOT A SHARK DIVER.

IT’S ACTUALLY A CENTURY 21 AGENT taking the plunge to guarantee you get the thrill of being a first-time home buyer. With an unmatched combo of experience and moxie, CENTURY 21 agents can make even the most dangerous home-buying waters seem as tame as a home aquarium. After all, danger is not our middle name. Success is. ®

C21.COM ©2013 Century 21 Real Estate LLC, A Realogy Company. CENTURY 21® and SMARTER. BOLDER. FASTER.® are Registered Trademarks Owned By Century 21 Real Estate LLC. An Equal Opportunity Company. Equal Housing Opportunity. Each CENTURY 21 Office is Independently Owned and Operated.

lifelessons Roseann Farrow

“You can always get the mortgage later” We all know (or do we?) that there are things we should say and things we shouldn’t when speaking with customers and clients.

So here’s a little story that may interest you. Pun intended.

In Westchester County, N.Y. an agent was about to present an offer on behalf of her buyer clients. (In this area of N.Y. agents write ‘offers’ or ‘binders’ that are superseded by a formal contract prepared by the seller’s attorney.)

The offer, close to listing price, was well over $1 million, and while she knew that the buyers were wealthy enough to buy the home with cash, their offer did include a mortgage contingency.

When the agent contacted the listing broker about making her offer, she learned there were already multiple offers on the property. She then called her buyers and recommended they remove the mortgage contingency and become cash buyers to have a more competitive advantage in the bidding war that might ensue. She told her buyers that “they could always get the mortgage later.” Subsequently she admitted these were her exact words.

The buyers relied on her advice and agreed to remove the mortgage contingency. The idea was simple: After they got the house, they could take out a mortgage at their leisure (at these low rates, why not?) and thus get back their cash on hand. The end result would be the same, but the seller wouldn’t be put off by the mortgage contingency.

Guess what? They got the house. All seemed golden until about five months later, when the buyers finally 16 August/september 2013

got around to actually applying for their mortgage. The mortgage originator told them the application looked fine; no problem there. But then he made them aware of an IRS provision: There is a 90-day time limit on home acquisition debt when purchasing property and securing a mortgage against the principal for a first or second home.

In other words, in order for the mortgage interest to be treated as deductible interest on home acquisition debt, the mortgage must be obtained within 90 days of the home purchase. Because they were applying well past that 90-day limit, the buyers’ mortgage would be considered a home equity loan for IRS tax purposes.

The key difference: Interest on home equity loans is only deductible on loans up to $100,000, while the interest on a purchase mortgage (home acquisition debt) is deductible on loans up to $1 million.

Now the happy homeowners were angry and upset — they would have applied sooner if only they had known. When they called to ask their agent why she didn’t warn them of the 90-day time limit, she admitted she “just didn’t know about this rule.” www.VARealtor.com

No surprise what happened next. The buyers called an attorney and sued the agent for misrepresentation.

Slam-dunk case that quickly settled with the agent paying the buyers an undisclosed amount of money. (My guess is that it exceeded the commission she received.

Note I didn’t say “earned.”)

Whenever I cite this story in real estate classes, I invariably get so many ‘woulda, coulda, shoulda’ responses.

Quick tax tip If you sell second or vacation homes, remember the IRS’s 90-day limit on home acquisition debt. Current federal law permits deductions of the interest paid on combined ‘purchase mortgage’ debt of up to $1 million on a primary residence and one additional residence.

For many second home buyers, it might seem like a good strategy to start out with a home equity loan on their primary to obtain cash for the second home purchase with a plan to refinance the second home at a later date with a regular mortgage. If you are aware that your buyers have this strategy in mind, make them aware of that 90-day limit on home acquisition debt when purchasing property and securing a mortgage against the principal for the first or second home. And remind them to check with their financial advisor.

Yes, the agent could have protected herself by shifting risk. She ‘shoulda’ — but didn’t — ask the buyers to consult with their own financial advisor or attorney before removing the mortgage contingency. She ‘coulda’ — but didn’t — know enough to tell the buyers that they had a window of 90 days for tax purposes. She ‘woulda’ — but didn’t — have told them about the IRS rules, but by her own admission she didn’t know about them.

So what are the lessons here? You and your broker more than likely will be in a jam if: • you say something you shouldn’t (or don’t say something you should), and • somebody relies upon it, and • they take action based on that reliance, and • they have damages.

According to Victor O. Schinnerer & Company, one of the world’s largest and most experienced underwriting managers of specialty insurance programs (like our E&O), misrepresentation is the most frequent reason Realtors continue to be sued.

Remember that the consumers we service, while they may like and respect us when we work with them, and while they gladly will keep in touch with us and even invite us to their future parties, they will turn on us at the drop of a hat if we mess up. They hold us accountable. We are, after all, licensed to practice. So let’s pay attention to detail. Let’s know what to say and what not to say. Let’s know how to keep a paper trail in order. And let’s do the right thing. l

With more than 30 years in real estate sales, training, management and consulting, Roseann is a New York broker and owner of Roseann Farrow Seminars.

Meet Roseann on October 4 when she presents three programs at the Real Show — VAR’s annual convention and expo in Virginia Beach.

Visit RealShowVA.com for more!

Volume 20 ● Issue 4

August/september 2013 17

FREE

Continuing Education Post License Education

Moseley and these participating firms have teamed up to offer UNLIMITED FREE online continuing education and post license education for their agents.

To take advantage of this offer, visit your firm’s website and look for this badge:

Firms with FREE CE/PLE and in-house licensing classes Participating Firms & Instructors Atkinson Realty ERA Clay Atkinson Avery-Hess Chris Brown Tina DuBrule Mary Misleh Manna Zelalem Baldwin & Associates Realty Nikki Dodson Blue Heron Realty, Cambra & Assoc Matthew Cambra Casals – Springfield Jenny Fowler Maria Solano Chantel Ray Real Estate Rob Wirth Coldwell Banker Carriage House Realty Sabrina Anderson Coldwell Banker Elite – King George Latana Locke Coldwell Banker Elite – Locust Grove Matthew Rathbun Coldwell Banker Elite – Massaponax Matthew Rathbun Coldwell Banker Elite – Spotsylvania Debbie Irwin Greg McCracken Coldwell Banker Elite – Stafford Matthew Rathbun Arleen Roberts Coldwell Banker Residential Brokerage – Alexandria Eileen Casamo Kathleen Kennedy Cornerstone Business Group Mike Cooper CTI Real Estate Michelle Thompson

Dawson, Ford, Garbee, and Co. Josh Ballengee Robert Dawson ERA Blue Diamond David Bridges, Sr EXIT Advantage Realty Brad Johnson EXIT Cornerstone Ellen Butters EXIT Elite Realty Mitchell Appelrouth Jane Renger EXIT First Realty – Glen Allen Sherrie Mawyer Maureen Schmidt EXIT Heritage Realty Melissa Vahdati EXIT Professional Real Estate Mark Forror EXIT Real Estate Solutions Sandra Hood Valarie Miller Marion Sparks EXIT Realty Associates – Lorton Gloria Jackson EXIT Realty Expertise Judy Laxague EXIT Realty Talbot and Company Ned Stock Experience Realty Group Nancy Shafer Fairfax Realty Guillermo Gomez Fejovic Realty – Springfield Paul Delkaso Ann Mead Gallery of Homes Carol Bultman Laura Hallman Mark Urbanski Goldizen, Riley, and Company Branden Goldizen Golston Real Estate Christal Golston Greg Garrett Realty Richard Hyde

Homestead Realty Mike Crosby Ikon Realty – Annandale Puneet Bhagi Keller Williams – Vienna Susan Cook Keller Williams Capital Properties Victoria Rader Mike Reed Keller Williams Fairfax Gateway Ann Beck Harry Gordon Keller Williams Kingstowne Rene Giesberts Dan Rochon Keller Williams Realty – Arlington Mitch Curtis Pam O’Bryant Ann Wilson Keller Williams Realty – Charlottesville Cynthia Avery Keller Williams Realty – Fredericksburg Mark Geslock Keller Williams Realty – Greenbrier Catherine Edwards Keller Williams Realty – Leesburg Jowilla Beck Rick Cockrill Barry Harlowe Keller Williams Realty – Sterling Bruce Lipson Keller Williams - Glen Allen Wendy Moyer Keller Williams Realty – Winchester Jowilla Beck Rick Cockrill Barry Harlowe Keystone Realty Jerry White

Lichtenstein Rowan Alan Nolan Lighthouse Properties Ann Powers-Koch Long and Foster – Vienna Meg Edwards MacDoc Realty – Fredericksburg Barbra Jenkins MacDoc Realty – Ruther Glen Sarah Gordon Move4Free Realty Sarah Santa Ana New Home Partners Dell Claiborne Jeremy Gaudreau Partners Real Estate Mumtaz Bhatti Paton Real Estate Donna Paton Prince William Realty Nouman Mirza Prudential PenFed Realty – Fairfax Sharon Nilsen Scott Thomason Prudential PenFed Realty – Reston Chuck Rifae RE/MAX North Star Alan Kroll RE/MAX Regency – Warrenton Chuck Cornwell Realty World Select – Fredericksburg Christine Singhass Realty World Select - Woodbridge Jennifer Dorn Shaffer Realty Jarett Shaffer Velasquez Real Estate Hector Velasquez Weichert - Brockwell & Portwood Donnie Milton Weichert - Mason Davis Andy Mason

We’ll take care of your education so you can take care of business.

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Gus Anthony Team Harris & Associates Heatherman Homes Highlands Realty Hunter Realty Ikon Realty – Ashburn Ingram & Associates Jennifer V-E Johnson Jobin Realty John Stewart Walker Jones and Associates Judy Boone Realty Kazo Properties Keffer Realty Keller Williams Elite – Chesapeake Keller Williams Realty - Lynchburg Keller Williams Realty – Newport News Keller Williams Realty – Loudoun Keller Williams Realty – Manassas Keller Williams Realty – McLean Keller Williams Realty – Stafford Keller Williams Realty – Reston Keller Williams Richmond West Keller Williams Realty – Woodbridge Key Real Estate Kline Realty Co KV Realty Lady With The Hat Real Estate Center Linton Hall - Bristow Marketplace Realty Mason Realty McCraw Real Estate Metropol Realty Mo Wilson Properties Nancy Chandler & Associates National Realty – Reston NBI Realty Neumann & Dunn Nextage Capitol Realty Oakstone Properties

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Free online CE/PLE is only guaranteed to those firms with an accessible badge.

formfactor andrew kantor

New forms for property managers In recent years, VAR has drastically expanded its property management forms library. We’re excited to introduce three new forms that are frequently requested by property managers.

1

2

3

VAR Resident Selection Criteria (3 pp.)

VAR Roommate Addendum (2 pp.)

VAR Reinstatement of Lease Agreement (1 p.)

This form provides guidelines property managers can use when screening prospective tenants for their landlord clients. It’s divided into sections that describe landlord selection criteria, including tenant income, credit, employment verification, rental history, information verification, occupancy requirements, co-signers, and categories of disapproval.

Keep in mind that consistent use of this form is a tool to comply with Fair Housing law. Also, note that VAR’s resident selection criteria is a suggested model and not mandatory.

Property managers and landlords may agree to different selection criteria.

Issues related to roommates are common in property management.

This form outlines procedures to address these issues and clarify each party’s role in the lease. For example, in roommate situations confusion often occurs when one roommate wants to move out. This addendum clearly explains the process and the security deposit implications.

Occasionally, a lease will be terminated by court order due to a default by the tenant. This form allows the parties to efficiently reinstate the original lease when the tenant has paid in full all outstanding amounts due under the lease and is otherwise in compliance with the terms of the lease.

IMPORTANT NOTICE: VAR currently licenses its standard forms content to two electronic forms vendors: Instanet and zipLogix. Each platform offers a variety of features and options.

You can find more about each product, including pricing and product information, by visiting the vendors' websites. Please note that all sales and support are handled directly by the vendors, not by VAR staff.

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.

20 August/september 2013

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

Watch your

step

22 August/september 2013

www.VARealtor.com

PHOTO: Don Farrall

The messy real estate market means there are scammers and scoundrels, rogues and rascals targeting Realtors and their clients. And they’ve got plenty of cons and rip-offs at their fingertips.

ANDREW KANTOR

It’s not surprising: In times of trouble, you can count on the rats coming out of the woodwork — and the more chaotic the trouble, the more brazen the rats.

That’s why, in the confusion of today’s housing market, you can bet there are some pretty big rats indeed.

Fear, of course, is their prime breeding ground, and — whether it’s disease, terrorism, shark attacks, accidents, or simply missing a house payment — we’re always scared of something ... and there is always someone willing to take advantage of that with a pill, a program, a device, a deal, or a threat.

There are home and real estate scams of all stripes out there, running the gamut from simple “We’ll fix your driveway with this leftover concrete” to complex schemes to hijack Realtors’ listings.

Watch your back.

The “Craigslist” scam You might think that all the advice you need is, “If it sounds too good to be true, it probably is.” The reality is a bit harsher. Real estate con artists are smarter and better equipped — they know who to target, and they know how to ride the line between “too good to be true” and “good enough to take a chance.”

Perhaps the best-known real estate con is quite simple: Offering a home for rent when it doesn’t actually belong to you, then collecting deposits from interested tenants. It’s sometimes called the “Craigslist scam” because that’s where scammers will often ply their trade, but it has popped up on other classifieds and real estate sites, including big names like Zillow.

Clearly that’s a problem for potential renters, but it’s also a problem for Realtors and property managers. These scammers will often target homes that are listed for sale or for rent because A) that means the house is empty, just in case someone drives by, and B) it’s easy to copy the listing information from a legitimate real estate website.

It’s easy to pull off. When a Realtor posts a listing of a home for sale or rent (as she normally would), a scammer sees it, copies it — data, pictures, descriptions — and lists the same property for rent on Craigslist (or Zillow, or another such site) at a good price. Then he waits for potential renters — preferably from out of town — to contact him about the property via a disposable e-mail address (think Gmail, Outlook.com, or Yahoo Mail).

Because there is a legitimate listing (althoug unbeknownst to potential renters), the scammer can send pictures and even suggest that the potential renter drive by.

He explains that the rent is low because the owner needs to leave the area soon, and, by the way, there are other interested parties — so putting a deposit down is Volume 20 ● Issue 4

August/september 2013 23

Bank walk-aways This isn’t a scam, per se, because it’s not illegal yet — but it’s still something homeowners need to be aware of.

It works like this: A lender sends a homeowner a notice of foreclosure. The homeowner, knowing he won’t be able to refinance, says his good-byes, empties the home, and turns the keys over to the bank. (He’ll take a significant credit hit, for sure, and may owe the lender money depending on what the house eventually sells for.)

But then, unbeknownst to the owner, the bank quietly changes its mind and doesn’t go through with the foreclosure process. It “walks away” from the property without informing the homeowner.

Months later, the homeowner begins to get legal notices and bills from the municipality for things like an overgrown yard or an unshoveled walk… or worse.

He tries to explain that he no longer owns the property because of the foreclosure — and that’s when he first learns that the bank walked away. By then he’s likely to have incurred huge debts to the county or city as the home deteriorates.

The best advice: Don’t give up your home until you’re sure all the paperwork is filed and complete, and a court — not a lender — makes it clear that the house is no longer yours.

24 August/september 2013

a good idea. Cash or money order only, please. He might even send a fake rental contract, courtesy of the local officesupply store.

Either way, when the renter arrives with a U-Haul, instead of finding his new home, he’s confronted with a locked door and — soon — the realization that he won’t be getting back that deposit.

Some scammers take the con further by not only hijacking a Realtor’s listing, but by using her name as well. Who would know whether “janesmith68@ gmail.com” goes to the legitimate agent or to a scammer using her name?

None of this bodes well for the real Jane Smith, who’s looking at a confrontation with an angry victim demanding the house keys and insisting he’s been corresponding with her for weeks. (He may have even spoken with her — well, someone pretending to be her. Between disposable mobile phones and Google’s free Voice service, getting a throwaway local phone number isn’t hard.)

There are variations on this theme.

For example, homes that are vacant because of moving or foreclosure are an easy target. It’s not terribly hard to break in and change the locks, then offer the place for rent. In fact, it could be months or longer before the scam is discovered — say, by a Realtor hired by the owner (bank or individual) to sell the home.

More brazen con artists might even offer to rent a “furnished” home if the owner is on an extended vacation.

So what’s to be done? Vigilance is important — odd phone calls about listings, for example: “I just want to check if that house at 123 Main Street is actually for sale” or “I’m wondering why 456 Elm Court is priced so low.”

Those might tip you off that someone has hijacked a listing.

A simpler way is to create a Google Alert for each of your listings (google. com/alerts). Essentially, you create a search using the property address; Google will notify you if it appears in anything new on the Web. So if someone creates a Craigslist post for “1734 Mylisting Drive” (or whatever), you’ll hopefully be notified.

If you see your listing appear somewhere it doesn’t belong, notify the site immediately. Craigslist, Zillow, and most other legitimate listing sites have a mechanism in place to have scams removed quickly.

And, of course, help spread the word — forewarned is forearmed.

Patent trolls Not every racket targeting Realtors is even related to property. One other thing the real estate business is known for is forms — lots and lots of them.

That makes Realtors a good target of a modern-era shakedown known as a patent troll.

Here, a company claims to have a patent — in this case, on the process of e-mailing documents from a multifunction copier (something many of these machines can do). It demands a “licensing fee” — $900 to $1,200 per employee, according to NAR, which has received a number of complaints about this — or it will take you to court.

The patent troll — a company called MPHJ Technology Investments, but which NAR says operates under names like “AllLed,” “AdzPro,” “GanPan,” and “HeaPle” — apparently does have some kind of patent, but whether or not it’s valid is, shall we say, up for discussion. Still, that doesn’t stop MPHJ and its attorney, Texas-based Farney Daniels, from www.VARealtor.com

threatening businesses — particularly small ones that might see it easier to pay a fee than to hire a lawyer.

NAR is wary of offering any specific advice for a firm receiving a troll letter, although it points out that the threats seem to be sent out haphazardly: “There is no evidence that MPHJ knows of any infringement before sending these letters.”

NAR’s advice ranges from suggesting that you respond by demanding more information (“Ask why your equipment or software infringes the patents”) or to deny that there is any infringement. You can also join other companies in challenging the patent’s validity, or, as a last resort, pay the license fee (known as “feeding the troll”). In any of these cases, you should consult an attorney.

Mortgage scams Realtors aren’t mortgage brokers, but the mortgage process is obviously key to the whole house-buying thing. Your clients’

backs may bear a little watching, too.

There are plenty of bad hats out there waiting to take advantage of them from the moment they begin a house hunt. In fact, the Federal Trade Commission ranks real estate and mortgage scams in its top 15 issues for the past three years running.

When mortgage shopping, many people will turn to trusted institutions such as their banks or credit unions.

But others will shop in the more, shall we say, seedy parts of the virtual mortgage mall, where they’ll meet people who will try to take advantage of them.

Breaking from the price sheet. Every day, lenders give a price sheet to their brokers with the day’s posted mortgage rates — the various combinations of interest rates and points available, e.g., “4.125% at 0 points.” In companies where brokers earn commission, they typically earn more if they can get borrowers to pay a higher rate.

One easy way is for an unscrupulous lender to simply not show the

Google Alerts are a simple and effective way of monitoring your listings on the Web.

Ranks and ratings Online review sites give the power to the people — and, as we all know, power corrupts. Result: People are using the promise or threat of online reviews to get what they want.

One company has already tried to use online ratings to extort Realtors. It created a site — Realtorcomplaints.com — and began contacting Realtors claiming that a complaint or bad review had been posted. For a small fee it would remove that review.

The good news is that NAR was able to have the site closed because of trademark infringement. The bad news is that that’s the only reason it was able to have it shuttered. There’s nothing necessarily illegal about posting bad reviews about someone. (True, you could get into issues of libel, but that’s a bit of a stretch.) Restaurant owners across the country are

Volume 20 ● Issue 4

suffering from what’s been dubbed “Yelp extortion,” where customers demand extra service (from quicker seating to free food) in exchange for avoiding a negative review on Yelp.

Is there anything you can do? The same way you keep an eye on your listings using Google Alerts (see page 24 of the main story), you might want to create one for your own name, although — with the exception of Angie’s List — there aren’t many Realtorreview sites around... at least not legitimate ones. As far as Angie’s List goes, the company will contact you if a specific complaint is filed (to give you a chance to clear things up), but you might want to create an account so you can keep an eye out for any negative reviews that get posted so you can respond.

August/september 2013 25

Some scams are more obvious than others. (And isn’t everything on the Internet “Seen on Google, Yahoo, and AOL”?)

26 August/september 2013

day’s prices to a prospective borrower — to quote a higher rate and hope the borrower hasn’t done his homework. (“Hmm… 4.5 percent? Sounds good.”)

Another scam, according to Jack M. Guttentag, author of The Mortgage Encyclopedia, is to offer a borrower a rate that includes a rebate… but not mention the rebate. Some higher-rate loans will offer one- or two-point rebates — cash in hand, essentially. A borrower could choose between, say, 3.75 percent and zero points, or 4.25 percent with a two-point rebate. A sneaky mortgage broker would offer the 4.25 percent rate, and, if that’s accepted, hide the rebate information in the fine print and pocket the cash.

Suggests Guttentag: “This abuse can be avoided by asking first about ‘the lowest rate possible’ and how many points it would require.” He also suggests asking to see the lender’s schedule of rates and points — the original fax or computer screen. “If the loan officer insists on transcribing them to a separate piece of paper,” he writes, “ask point-blank if she is adding an overage.”

Using sneaky terminology. The FTC cautions borrowers about buzzwords like “very low rates” that could refer to a low interest rate or simply a low payment rate; the latter can lead to a devastating balloon payment or a loan that goes into “negative amortization” and is never paid off.

Another example from the FTC: lenders offering great “fixed” mortgages, where unsuspecting borrowers don’t realize that the fixed part isn’t the interest rate, but the payment rate.

The interest rate in fact adjusts with the market, and borrowers can end up upside down when the rates adjust up and their payments don’t.

Even ads touting a “fixed rate”

mortgage can be sneaky … if it’s only fixed for 30 or 60 days. (Now you see why the Consumer Financial Protection Bureau is insisting on clear and standardized forms and disclosures.) Borrowers who don’t understand the fine print are surprised when their monthly bill skyrockets.

“Float abuse.” In this trick, a lender takes advantage of the fact that it can wait days or even weeks to lock in a borrower’s rate after she’s applied for a loan. For example, Jane applies for a mortgage and is quoted a rate of 4.00 percent. But the rate isn’t locked in for a week, after which the lender quotes 4.25 percent, saying that rates have gone up. Jane now has the option of accepting the higher rate, or starting the mortgage process all over. Solution: Lock in the rate immediately.

Watch your back Listing hijackers, patent trolls, and mortgage sneaks may be the most noteworthy kinds of scams you’re likely to encounter, but they’re far from the only ones. There’s plenty more to be on the lookout for.

Like a kitchen sponge, your inbox is a seemingly benign place … but one that can harbor some nasty critters.

You may have noticed — especially if you’ve only been in the business for a few years — that once you started doing a lot of real estate work you began to get a lot of real estate spam.

Most true junk mail is obvious, and most will (or should) be snagged by your spam filter. But the ones you have to worry about — for yourself and for your clients — are the ones that sneak past the radar.

Reasonable-sounding deals from legitimate-sounding companies might look like something you’d want to save www.VARealtor.com

or pass along. But beware — listen to your Realtor-Sense, keep in mind the “if it sounds too good” mantra, and consider one simple thing: How much trust do you put in a company that sends you unsolicited mail? (Of course, searching on the company name can’t hurt, either.)

Scams aren’t limited to your inbox.

With all the news about real estate investors making killings, a lot of people want to get in on that pot.

Many — most — of those investments are legit, but if you don’t know the warning signs of a Ponzi scheme or even a simple money grab, you could lose a lot. (In 2010, a former Henrico County police officer was sentenced to 10 years in prison for bilking friends and neighbors out of millions with a real estate investment fraud scheme.)

There are some obvious signs of potential fraud in the works: promises of unusually high returns or of specific numbers (“10% per year, guaranteed”), an unclear or undisclosed investment strategy, an aggressive salesman, or a request to “spread the word.” But even smart people can be bilked. If you’re investing with someone while sitting in his living room, maybe think twice.

In fact, “think twice” is good overall advice. Yes, there will always be those who are out to separate good folks from their money, and you don’t have to be a fool to fall for the schemes. A little caution, a little cynicism, and a little trust in your own inner alarm bells will go a long way to keeping you out of harm’s way. l

Volume 20 ● Issue 4

Mortgage-relief and foreclosure scams A particularly insidious type of scam targets people who are having serious trouble paying their mortgages. You can find them on latenight TV commercials, and via e-mail with subjects like “Stop foreclosure now!” or “Obama Cuts Refi Requirements” The scams are similar: The company offers to reduce the homeowner’s payment, save his credit, keep him in his home, and so on.

But that ain’t what happens. Instead, homeowners end up deeper in debt… at best.

In the mildest cases, the company will charge a fee for credit counseling. But government-approved agencies offer foreclosure prevention counseling free.

In other instances, the company promises to reduce the homeowner’s monthly payment by working with his lender — for a small fee, naturally. But here’s the rub: It’s illegal for a company to collect any fees from a homeowner until he has received and accepted an offer of relief from his lender.

Other companies offer a “mortgage audit” or “forensic audit” in which they say they’ll have attorneys review the loan to look for some kind of loophole… again, for a small fee. Up front. Not surprisingly, you don’t typically find any such loopholes these days. Banks are pretty good about that sort of thing.

Then you get into the really bad apples — the companies that trick homeowners into opening a second mortgage, or refinancing with the scammer, or transferring the deed, all in the name of stopping foreclosure proceedings.

If you’re using TV commercials or e-mail spam to make financial decisions, you’re already in trouble, but there are some warning signs to look for.

• Claiming to have an amazingly high success rate (“90% of our customers get lower rates!!!”)

• Guaranteeing results no matter what your circumstances • Asking for payment up front • Telling you not to contact your lender, lawyer, or credit counselor • Asking for the mortgage payment to be sent to them, rather than the lender • Asking for the deed to the home for any reason, including ‘rent to buy’ schemes How can someone avoid being taken in? There’s a single, major step that can make all the difference: Find a legitimate, HUDapproved foreclosure counselor. The service is free, and it will help you avoid the bad apples. It’s easy to find one, too — just go to makinghomeaffordable.gov where you can find a list for every state.

That simple.

August/september 2013 27

accessibletech John D. Mayfield

Signature lessons I am often astonished at the number of real estate agents who have either no e-mail signature or simply a poorly crafted one.

Think about this: Every time you send a piece of correspondence via e-mail, you are in essence sending out a résumé to other potential customers, clients, and folks who could refer business to you. Each one is a marketing piece.

That in mind, I see some common and easily correctable mistakes when it comes to those signatures, so here are my top five suggestions.

1

Be brief. E-mail is designed to be a quick and easy method of communication, and lengthy e-mails are discouraged by most e-mail experts. The same is true of your signature. Don’t list your every accomplishment over the last 20 years; don’t name every committee assignment or group you’ve chaired since the inception of your real estate career.

Some may snicker, but recently I received an e-mail from a woman in one of my classes who had a signature a full page long. It was great to see all of her accomplishments, but it made the e-mail look cluttered and almost intimidating.

Your e-mail signature should be short, appealing, and reflect a positive image — three to four lines with important information, and we’ll discuss what that is in a moment. And be sure it includes your required disclosures: Your name, firm name, and the state(s) you’re licensed to do business in.

2

Have some kind of e-mail signature. The flip side of lengthy e-mail signatures is also a missed opportunity, and that’s having no signature. I see this often in the courses I teach, when students’ e-mail sign-offs basically read, “Thanks, Tim.” To make matters worse, too often, “Tim” has a strange e-mail address like tim043221@AOL.com.

Needless to say my first order of business during this GRI course was to help the students learn the importance of a good e-mail signature as well as having a branded e-mail address.

28 August/september 2013

Don’t forget the law Remember that the Realtor Code of Ethics requires that your e-mail signature include your name, your firm name, and the state(s) you’re licensed in.

3

Use hyperlinks effectively. One of the features of modern e-mail systems is the ability to add hyperlinks to Web pages to your messages and your signature. But you need to understand when and how to use them.

Take our first example about being brief. The student who listed every committee she had served on could instead have set up a page on her website with that list of accomplishments and simply added a hyperlink in her signature.

That would serve two fold. First, it cleans up her signature so it becomes brief, non-cluttered, and more eye appealing. Second, with the right caption, e.g., “Check Out Jane’s Real Estate Résumé,” she can help drive traffic to her website.

Other examples for using hyperlinks include promoting videos or photo galleries of properties you have for sale; your Facebook, Google+, LinkedIn, or Twitter page; or a page with a ‘call to action,’ such as a chance to sign up for your mailing list, get a free property report, etc. Hyperlinking can pay big dividends through your e-mail signature … if crafted correctly.

4

Promote your brand or logo. Another mistake real estate agents make is neglecting to promote their company brand with their e-mail signature. Letting this one issue slide could mean losing out on thousands of eyeballs seeing a consistent and positive message about the company.

If at all possible, brokerages should develop a consistent e-mail signature to help promote the company’s identity; it might include a (small) logo and slogan, for example. There is power in synergy, and when everyone in the firm is promoting the logo and brand in the same fashion, in every message, the whole firm benefits. www.VARealtor.com

5

Have multiple signatures. Finally, many real estate agents rely only on a single e-mail signature, despite the fact that most e-mail programs, such as Microsoft Outlook, allow you to create several.

My advice: Consider having one standard e-mail signature, but others tailored for specific types of recipients such as buyers, out-of-town referrals, and other agents in your area. (The latter could include a link to a particular listing you’re promoting.) Keep the corporate identity as mentioned above, but add flexibility to get the most out of your signatures.

Think about the types of e-mails you handle daily, who you often write or reply to, and which tasks you repeat regularly. Take those common tasks and or ideas and create signatures that can help save time and promote your services.

The next time you get ready to send an e-mail, take a moment to consider your signature — you’ll see there is a wealth of potential sitting at the bottom of your message. l

For more great ideas on technology and how to save more time, be profitable, and have fun, catch John Mayfield — broker, bestselling author, and international speaker — for two fun and informative sessions at the Real Show on October 4. Visit RealShowVA.com for more!

25 Day Loan Closing or you get $500 closing Cost Credit.* Carrington Mortgage Services pledges to close your loan in 25 Days or give you a $500 Closing Cost Credit.* We understand how stressful the home financing process can be, which is why we are committed to providing the best service possible.

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Carrington Mortgage’s 25 Day Pledge • Available for Purchase or Refinance Loans, restrictions apply* • Loans closed in 25 Days from complete submission to funding • 25 Calendar Days – not business days!

*Carrington will process any qualifying loan from the time a complete loan file is submitted to underwriting to the time it funds within 25 calendar days, or the company will apply a closing cost credit of $500 to the loan once the loan closes. In order to receive the closing cost credit, any delay that causes the loan to close more than 25 days after submission to underwriting must be due to Carrington’s independent processes. If the delay is due to the borrower’s action or inaction, the closing cost credit offer will be void. This offer excludes some loan programs such as brokered loans, Jumbo loans, 203k loans, USDA loans, any product with non-delegated underwriting and condo projects requiring approval. Exclusive to loans in VA. Please check with your Loan Officer for details and qualifying loan programs. Offer is subject to revision or cancellation at any time. © Copyright 2007-2013 Carrington Mortgage Services, LLC. headquartered at 1610 E. Saint Andrew Place, Suite B-150, Santa Ana, CA 92705. Toll Free # (800) 561-4567. NMLS Unique Identifier # 2600. Nationwide Mortgage Licensing System (NMLS) Consumer Access Web Site: www.nmlsconsumeraccess.org. VA: Licensed by the Virginia State Corporation Commission #MC-5382. NOTICE: All loans are subject to credit, underwriting, and property approval guidelines. Offered loan products may vary by state. There is no guarantee that all borrowers will qualify. Restrictions may apply. This is not a commitment to lend. Terms, conditions, and programs are subject to change without notice. Carrington Mortgage Services is not acting on behalf of or at the direction of HUD/FHA or the federal government. All rights reserved.

Volume 20 ● Issue 4

August/september 2013 29

rpacreport As of July 10, 2013, 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 Heidi Schlicher at heidi@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 Union Hall

Joe Funkhouser Funkhouser Real Estate Group, Harrisonburg

Deborah Baisden Prudential Towne Realty Virginia Beach

Mary Dykstra MKB, REALTORS Roanoke

Dorcas HelfantBrowning, Coldwell Banker Professional, Virginia Beach

Steve Hoover MKB, Realtors® Roanoke

Thomas Jefferson, III Joyner Fine Properties Richmond

REIN Virginia Beach

John McEnearney McEnearney Associates Alexandria

Cindy Hawks Keller Williams Realty Virginia Beach

Shane McCullar Keller Williams Realty Alexandria

John Powell Long & Foster Real Estate Colonial Heights

Tom Stevens Coldwell Banker Residential, Vienna

Melanie Thompson Jack Torza Century 21 AdVenture Long & Foster, Realtors® Redwood, Fredericksburg Mechanicsville

Muraji Nakazawa Re/Max Allegiance Herndon

Forrest Odend’hal Long & Foster Real Estate, Gainesville

Golden R Associations ($5,000) • Northern VA Association of Realtors, Fairfax

• Richmond Association of Realtors®, Richmond

• Virgina Association of Realtors

• Charlottesville Area Association of Realtors®, Charlottesville

• Roanoke Valley Association of Realtors®, Roanoke

• W illiamsburg Area Association of Realtors®, Williamsburg

Hall of Famers have contributed a cumulative amount of at least $25,000 to RPAC.

30 August/september 2013

www.VARealtor.com

Crystal R Investors ($2,500)

Jason Outten The Buyer Brokerage LLC Ashburn

Karen Smith

RE/MAX Commonwealth Richmond

Trish Szego ERA-Elite Group, Realtors®, Fairfax

Bill White Joyner Fine Properties Richmond

Sterling R Investors ($1,000) Sterling R — Hall of Fame Sandee Ferebee Prudential Towne Realty, Virginia Beach Tom Innes RE/MAX Commonwealth, Richmond Robert Adamson McEnearney Associates, Inc., Arlington Edward Atiyeh Joyner Fine Properties, Richmond Elizabeth Atkinson ERA Atkinson Realty, Virginia Beach Julia Avent Re/Max Allegiance Arlington Dennis Bane Century 21 Valley Real Estate, Dublin James Barb Jim Barb Realty, Inc., Winchester C.C. Bartholomew Long & Foster Real Estate, Inc, Manassas Mary Bayat Bayat Realty Inc, Alexandria Mary Ann Bendinelli Weichert Realtors, Manassas Laura Benjamin Roanoke Valley Association Of REALTORS®, Roanoke Brian Block RE/MAX Allegiance, Alexandria Bradley Boland Keller Williams Realty, Reston Beckwith Bolle Carter Braxton Preferred Properties, Leesburg, VA Candice Bower McEnearney Associates/Leesburg, Purcellville Suzanne Brady Century 21 Adventure Redwood, Fredericksburg Patricia Buck McEnearney Associates, Inc., Potomac Falls Robyn Burdett Re/Max Allegiance, Chantilly Peggy Burke Long & Foster Real Estate, Woodbridge Bill Burke Long & Foster Real Estate, Woodbridge Keith Canty greg garrett realty.com, Newport News Amy Carder RE/MAX First Virginia Beach Dale Chandler greg garrett realty.com, Newport News David Charron Rockville Flo Chittenden Long & Foster Real Estate, Manassas Moon Choi Re/Max Presidential, Fairfax Vic Coffey RE/MAX All Stars Realty, LLC, Daleville Tae Comstock Comstock Realty & Investment, McLean Hugh Cross Cross Management, Suffolk Elizabeth Dalton NRVAR, Radford John Daly Rose & Womble Realty, Virginia Beach Sheila Dann Abbitt Realty Co, LLC, Newport News Mary Duarte Century 21 Colonial Realty Colonial Heights Gary Duda RE/MAX Action Real Estate, Glen Allen Claire Forcier-Rowe Coldwell Banker Elite, Fredericksburg Virgil Frizzell Long & Foster Real Estate, Reston Beverly Frowen Long & Foster Real Estate, Inc, Manassas Anne Gardner Charlottesville Area Association of Realtors, Charlottesville Elizabeth Gatewood Napier REALTORS® ERA Colonial Heights Philip Gee Virginia Realty & Relocation, Richmond Gail Gowin Prudential Towne Realty, Virginia Beach Art Grace Hunzeker & Lyon, PC, Manassas Suzanne Granoski Keller Williams Realty Alexandria

Volume 20 ● Issue 4

Lynn Grimsley RE/MAX Peninsula, Newport News George Grundy George Grundy & Assoc Realty, Petersburg Delk Hamaker K.D. Hamaker Properties, Inc. Arlington Margaret Handley M.C. Handley, Ltd., McLean Joy Harris-Cob Harris & Associates, Inc., Chester Todd Hetherington Century 21 New Millennium, Lorton Jeanne Hockaday Virginia Country Real Estate, Ordinary Michael Hogan RE/MAX Commonwealth Mechanicsville Amy Hudson RE/MAX 8 - Blackburg, Blacksburg Nathan Hughes Bandazian & Holden, Richmond Charles Hulett Keller Williams Realty, Chesapeake Anne Innes RE/MAX Commonwealth Richmond Philip Innes RE/MAX Commonwealth Richmond Donn Irby Rose & Womble Realty, Chesapeake Patricia Jensen BHG Real Estate III - North, Charlottesville Jo Anne Johnson Westgate Realty Group, Inc, Falls Church Sita Kapur Arlington Premier Realty Arlington Karen Kidwell Long & Foster Real Estate, Falls Church Betty Kingery Mountain to Lake Realty, Rocky Mount Patricia Kline Avery Hess Realtors, Locust Grove Jody Korman RE/MAX Commonwealth, Richmond Vonda Lacey Lacey Real Estate Group, Fishersville Nicholas Lagos Century 21 Gawen Realty, Inc., McLean Kevin Lee Fairfax Realty Inc, Fairfax Barbara LeFon Rivah Realty LLC, Montross Pamela Lewis Realty Executives, Peninsula, Portsmouth George Lyons Long & Foster Real Estate, Woodbridge K Michael Maloney Keller Williams Realty Richmond Keith May Cottonwood Commerical, Harrisonburg Susan Mekenney RE/MAX Allegiance, Fairfax Jim Mellen RE/MAX Peninsula at New Town, New Town, VA Thomas Meyer Condo 1, Inc., Falls Church Brooke Miller Long & Foster Real Estate, Inc, Fredericksburg Percy Montague Montague Miller & Co Westfied , Charlottesville Fred Morgan 1st Choice Real Estate, Staunton Vinh Nguyen Westgate Realty Group, Falls Church Susan Oh New Star Realty & Investment, Mc Lean Gwen Pangle Pangle and Associates, Leesburg, VA Gail Penman William E. Wood & Associates, Virginia Beach Fatima Pereira-Shephard Long & Foster Real Estate, Manassas Robert Perkins Long & Foster Real Estate, Inc, Colonial Heights Tracy Pless Long & Foster Real Estate, Reston Kimberly Plourde Exit Realty Central , Norfolk Denise Ramey Roy Wheeler Realty Co., Charlottesville Anne Rector Rector-Best Property Management Alexandria Brenda Rich Century 21 New Millennium, Gainsville

August/september 2013 31

rpacreport Sterling R Investors ($1,000) Katy Richards Joyner Fine Properties, Midlothian Christine Richardson Weichert Realtors Vienna Peter Rickert Coldwell Banker Residential Bk Alexandria Zinta Rodgers-Rickert Re/Max Allegiance Fairfax Fetneh Schacht Long & Foster Real Estate, Herndon Henry Scholz MKB, Realtors, Roanoke R. Scott Shaheen Long & Foster REALTORS, Richmond Veronica Seva-Gonzalez, Arlington Boyd Smith RE/MAX Commonwealth Chesterfield Katrina Smith Long & Foster/Webber & Assoc., Winchester Kimber Smith Prudential Towne Realty, Williamsburg Patricia C. Snyder Coldwell Banker Four Seasons, Mt. Jackson Susan Spellman Long & Foster, Realtors, Williamsburg Cindy Stackhouse Century 21 Redwood Realty, Dumfries Vickie Stamper Appalachian Realty Co., Inc. Marion Patricia Steele Coldwell Banker Professional, Virginia Beach Wes Streans MO Wilson Properties, Woodbridge Patricia Steele Coldwell Banker Professional, Virginia Beach Minnie Stevenson 1st Choice Real Estate, Staunton Suzy Stone Century 21 AdVenture Redwood, Fredericksburg Mack Strickland Strickland Realty, Chester

WHY I INVEST I started investing in RPAC at the suggestion of a few Realtor friends. Now I’ve been a Sterling R for five years, and I continue to invest because RPAC keeps Realtors involved in the issues that are important to us all...

— Richard Limroth, RE/MAX Valley Realty, Roanoke, VA Visit RealtorsChoose.com/RPAC-101 to hear about what inspired Richard to become an RPAC investor.

Patricia Sury Montague Miller & Co. Downtown, Charlottesville Derrick Swaak Tutt Taylor & Rankin R.E, Mc Lean Richard Thurmond William E. Wood & Associates, Virginia Beach Christine Todd Northern Virginia Association of Realtors, Fairfax Loretta Trayer Mountain Sotheby’s Intl Realty, Banner Elk Kevin Turner Century 21 ALL-SERVICE-B, Bedford Todd Wampler Wampler Realty, Inc., Daleville Mary Ann White RE/MAX Commonwealth, Mechanicsville Shanna Wiseman Parr & Abernathy, Hopewell Jon Wolford Long & Foster Real Estate, Springfield

Sterling R Associations ($1,000) • Blue Ridge Association of Realtors • Fredericksburg Area Association of Realtors • Greater Augusta Association of Realtors • Harrisonburg-Rockingham Association of Realtors • Lynchburg Association of Realtors • New River Valley Association of Realtors

Tax Reform...and how Realtors can affect it There’s a big deal going on in the Senate regarding tax reform.

The Senate Finance Committee has decided that the easiest way to change the tax code is to start with a blank slate — that is, start with no deductions at all, then add in the ones that are most important, then figure out what the tax rates will need to be. (The assumption is that with fewer deductions, the tax rate itself can be lower — and that makes for good press.)

Unfortunately, different people have different ideas of what constitute “important” deductions.

Here at VAR, the ones we care most about are those that affect Realtors, real estate, and homeowners. Topping the list, of course, is the mortgage interest deduction, but there are others (e.g., those affecting property taxes and capital gains).

The good news is that, thanks to RPAC dollars — your investments — we know our voice is being heard. Not only did more than 1,600 Virginia Realtors respond to NAR’s call for action, but more importantly, there was no doubt that our lobbyists would get face time with our legislators in Washington.

That foot in the door is possible because of RPAC. Plain and simple. Those dollars were used to help elect these legislators,

See how your RPAC investment is paying off: Visit www.RealtorsChoose.com!

and that in turn means that — if nothing else — our voice will be heard. And when an issue as important as the future of the tax code comes up, we count on it.

www.RealtorActionCenter.com 32 August/september 2013

www.VARealtor.com

CHILDREN FAMILY FUTURE INVEST IN RPAC, INVEST IN YOUR BUSINESS NEIGHBORHOOD SCHOOLS COMMUNITY FRIENDS CLIENTS FELLOW REALTORS AMERICAN DREAM

VISIT REALTORSCHOOSE.COM FOR MORE INFORMATION.

Contributions are not deductible for federal or state income tax purposes. Contributions to RPAC are voluntary and are used for political purposes. You may contribute more or less than the suggested amount. You may refuse to contribute without reprisal and the National Association of REALTORS速 or any of its state associations or local boards will not favor or disfavor any member because of the amount contributed. Up to 100% of your contribution is sent to National RPAC and is charged against your limits under federal law (2 U.S.C. 441a); National RPAC returns up to 70% of your contribution to Virginia RPAC for use in connection with the election of state and local candidates in Virginia.

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 VAR Member Service Partners

See your member discounts at www.VARealtor.com/ discounts

Liberty Mutual, home, auto, and renters insurance

Call (804) 622-7955*

Pearl Insurance, E&O, medical, life, and dental insurance

* You must register first at

Phone Tag, voice to e-mail transcription

VARealtor.com/LegalHotline

Realtors Federal Credit Union T-Mobile, wireless service UPS, shipping and more

Not sure who can help?

Write to members@varealtor.com and we’ll help you.

Volume 20 ● Issue 4

Zipform, electronic forms solutions Vertical Response, social media management platform

For information about RPAC Ask for Heidi Schlicher Director of Political Operations heidi@varealtor.com VAR 2013 Leadership Team

Mary Dykstra, ABR, CRS President MKB, REALTORS® Roanoke (540) 989-4555 mary@varealtor.com Bradley Boland President-Elect Keller Williams Realty Reston (703) 437-1717; bradleyboland@gmail.com Deborah Baisden, GRI Vice-President Prudential Towne Realty, Virginia Beach (757) 486-4500 deborah@deborahbaisden.com Bill White Treasurer Joyner Fine Properties Richmond (804) 967-2740 bill.white@hoynerfineproperties.com Trish Szego, CRB, CRS Immediate Past President ERA Elite Group Haymarket (703) 359-7800; trishszego@gmail.com Rick Lugg Vice President of Finance & Administration (804) 249-5703; rick@varealtor.com

August/september 2013 35

VARworks Getting to know you VAR President Mary Dykstra, Roanoke It’s easy for our members to get to know VAR, but it’s not quite as simple for the association to know who you are. There are more than 28,000 of you, with different specialties, strengths, experience, and goals.

Some of you have been in the business for decades, while others are just dipping your toes in. Some are technical whizzes, others are masters of the art of the handshake.

The more we know about you, the better we can work on your behalf. That’s why each year we send out a survey to try to better understand our members. The primary goal is to know whether we’re

doing right by you — are we providing the right kinds of services and information and in the right way?

What should we focus on? Are our messages being sent the best way?

The survey serves as a report card for both association staff and leadership, and it also gives us a feel for the tools and technology you use out in the field. And that helps us plan for the future.

It’s an important tool, so if you didn’t take the survey this year, I hope you’ll look for it in 2014 so your voice can be heard. If you did — thank you! You helped us help all Virginia’s Realtors.

Some things we noticed

51%

A whopping 93% of BROKERS said they found our Legal Hotline (see page 14) to be a valuable service.

BUBBLE, BUBBLE? (P. 8) • NEW PROPERTY MANAGEMENT FORMS (P. 20)

of Virginia Realtors now own a tablet computer August/September 2013

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

Watch your

STEP

93

We were glad to see that 64% of members found VAR’s services to be a good value for their dues dollars — up from 46% last year.

Scams, cons, frauds, and flim-flam target real estate

compared to 36% last year.

(For brokers the number went from 40% to 57%)

36 August/september 2013

Only 45% of Realtors said real estate was their only source of income.

Last year 65% said so. (Unchanged: Only about 30% of Realtors say they provide most or all of their household income.)

compared to 36% last year.

(For brokers the number went from 40% to 57%)

www.VARealtor.com

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In line with my checkbook exercise, I have: Bought my new ring, Bought an investment property, Paid off my Tahoe, Bought my husband his tractor, Bought my new washer and dryer, Planned trips to Mexico (September) and Greece (October), and Given to many of my favorite charities.

The money is great, yet the biggest benefit I have received is my total change of mind set. I can’t tell you how many private facebook messages I get thanking me for being so positive. You literally changed my life. I am so grateful that I was encouraged to take the class and that you were my coach. I am currently the number ‘1’ individual agent in my office, and I INTEND to stay there!

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