2009_5-6_Commonwealth

brokers Predict and react (P. 5) • save your rePutation (P. 18) May/June 2009

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

IN OUT or

How far can you take that MLS data?

Also inside: The new laws you need to know (p. 26) is it time to move past print ads? (p. 30)

10231 Telegraph Road, Glen Allen, VA 23059-4578

ANDREW KANTOR PUBLISHED BY THE VIRGINIA ASSOCIATION OF REALTORS® The Business Advocate for Virginia Real Estate Professionals John Powell, ABR, CRB, CRS, GRI President Cindy Stackhouse, GRI President-Elect John Dickinson, CCIM, GRI Vice President Pat Jensen, ABR, CRB, CRS, GRI Immediate Past President John Daly Treasurer R. Scott Brunner, CAE Chief Executive Officer scott@VARealtor.com Ben Martin, CAE Vice President, Marketing & Communications ben@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#10681388) 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.

Better living through technology I AM A keyboard snob. And a mouse snob. And a pen snob, although that’s another story. I use these so often that I’ve learned the value of getting something good. (I am not, however, a headphone snob.

Cheap is fine by me as long as it’s comfortable.)

Take my keyboard. I realize that the good folks at Dell spent at least two or three dollars on the one that came with my computer (and a buck or two on the mouse), but I just can’t use it. I write all day, and a cheap, mushy keyboard will drive me bonkers. I need good “key feel” — a solid thump with each key press. The keys need to travel well, too — they actually have to move a decent amount when you press them, which is why I hate laptop keyboards.

Postmaster: Send address changes to: Commonwealth magazine, 10231 Telegraph Rd., Glen Allen, VA 23059-4578.

Custom Publishing Services provided by Network Media Partners, Inc. Executive Plaza 1, Suite 900, 11350 McCormick Road Hunt Valley, MD 21031

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 version of our print magazine, published every month.

If you’re not receiving newsletters via e-mail from time to time, it may be that we don’t have your correct email address. Contact your local association of REALTORS® to enter your address in the database.

Also, check the spam filter on your computer and authorize any email from VARealtor.com.

firstword

In case you’re interested: The best keyboard a writer can get is either the Key Tronic Designer-P2 Lifetime (about $35) or the Unicomp Customizer (about $70).

The Customizer is just like the old IBM “clicky” keyboards — tough, loud, and with keys that need to be told where to go. The Key Tronic (my personal fave) is quieter but with a similar feel. And different keys require different amounts of force — less for those you hit with your pinkies, more for the F, G, H, and J. Slick.

And the best mouse? That’d be the cordless Logitech MX Revolution (about $75). You have to try it to understand, from its best-in-class scroll wheel to the perfectly placed thumb buttons.

Then there’s my mouse. While not as important as the keyboard, I still prefer to dump whatever came with a new computer and replace it with something that fits my hand better. If you’re “interfacing” with something all day, it’s worth it to get it right.

Who wants the PC equivalent of a cheap and lumpy mattress?

I say all this because this issue marks the debut of our new “Accessible Tech” section. Every issue we’ll write about some aspect of technology, and we’ll write it for people who aren’t at the leading edge of the curve. Today, for example, you’ll see a feature on establishing and protecting your online reputation. Next issue will focus on dumping your Rolodex and managing your clients electronically.

Whatever the subject, the goal is to avoid the geek speak that can infest any discussions about technology, and to appeal to the folks who know they should use it more, but may be a bit wary. So while we won’t try to teach you how to program your own word processor, we might teach you about Microsoft Word macros and how they can make your life easier. After all, that’s what technology is supposed to do, right? ● Andrew Kantor, Editor andrew @VARealtor.com

MAY/JUNE 2009

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May/june 2009 VoluMe 16 ● Issue 3

contents

departments 4 quickhits The latest news and tidbits from around Virginia.

8 legallines Lem Marshall answers readers’ questions about the law.

16 formfactor Inspections: What’s the buyer entitled to, anyway?

27 accessibletech How good is your online reputation? You’d better know.

30 realtycheck Newspaper ads are yesterday’s news. What’s happening today?

36 blogspotting What’s the buzz in the Realtor® blogosphere?

in every issue features 1 firstword 32 rpacreport

20

40 varbuzzcontest 42 contactvar 44 lastword

2

May/june 2009

24

In or Out: How far can you take that MLS data?

Data are valuable stuff. And real estate sales are all about that data — which is why there are so many rules about what you can do with MLS listings (your own or others’). Once upon a time it wasn’t a big deal. But in this age of Web sites, blogs, Facebook, and other such tools, knowing the rules is critical.

Legislative Recap

What has the General Assembly cooked up this year that Realtors® need to know? Our own John Broadway gives the skinny on the new laws taking effect later this year. www.VaRealtoR.coM

quickhits

anDRew KantoR

[the Realtor® Family]

VAR mourns the passing of Luis Lama Luis A. Lama, a member of the VAR board of directors and recipient of the 2008 VHDA Service to Virginia Award passed away Sunday, May 3 at the age of 75.

Lama became a Realtor® in 1988, working for Long & Foster Realtors in Falls Church, where his jovial, charismatic personality, and impeccable professionalism impressed colleagues, customers, and business associates. In 2007, he was named chairman of the board of the Northern Virginia Association of REALTORS® and was elected to VAR’s board of directors in 2008.

“Luis was a prince of a man,” said

Christine Todd,, chief executive officer of NVAR. “His kindness, gentle manner, and love of life and country was always present when he would dance with his bride of 42 years — Maria Isabel — at Realtor® functions. I will miss him terribly as will all Realtors® who had the privilege to know and love him as I did.”

Born in Sullana, Peru, Lama served in the Peruvian Navy for 10 years before relocating to Virginia and becoming a U.S. citizen. It was there he met Maria Isabel.

Together they raised five children, 11 grandchildren, and two great-grandchildren.

[Housing economy]

Fannie Mae makes some changes

[leadership academy]

Got a rising star in your office? each year, the Virginia Realtors® leadership academy selects about 20 Realtors® from around the commonwealth to participate in an intensive program designed to build their leadership skills and prepare them for roles in their local association, at VaR, or in other organizations. ask any graduate: you’ll find that the academy is one of the high points of her real estate career. applications for the class of 2010 are now being accepted, and they’re due by july 1. the Virginia Realtors® leadership academy site also has the names of graduates — ask them about the academy, and chances are you’ll be signing up.

Class project. each year’s Vla class has a single, major project that’s unveiled, with much fanfare, at the annual convention & expo.

4

May/june 2009

Fannie Mae has announced some changes to its rules, which affect properties at both the high and low ends of the spectrum.

First, for appraisers, it has adopted the “Market Conditions Addendum” to its appraisal report — otherwise known as Fannie Mae Form 1004MC. Essentially it specifies what constitutes a “declining market” and what needs to be reported in the “Neighborhood” section of the appraisal report.

So, appraisers (and those who hire them): You need to bone up on “Appraisal Reporting Requirements for Properties located in Declining Markets.” Lucky for you, Fannie Mae’s got you covered with a PDF that explains the policy. You can grab it at www.VARealtor.com/ fannieguide.

Meanwhile, on the other end of the bell curve, Fannie Mae announced its “Guidelines for Loan Limits in High Cost Areas” — that is, “high-balance loans above $417,000.” It detailed its requirements for anyone interested in one of dem big ol’ loans — e.g., the loan must be conventional, only for one- to four-unit properties, etc. You can read the details at www.VARealtor.com/ highcostareas.

www.VaRealtoR.coM

[legislative affairs]

[Realtor® benefits]

New stormwater disclosure requirement

NAR offers basic medical coverage

Get ready to sure to update your disclosure paperwork.

The General Assembly instructed the Virginia Real Estate Board to require information on stormwater detention facilities in the Residential Property Disclosure Statement.

VREB naturally complied.

That’s why a new, slightly tweaked version of the Disclosure Statement will be finished and on the VREB Web site by June 1, and it will take effect July 1.

according naR studies, almost 350,000 naR members don’t have health insurance — a scary proposition.

VaR offers our members basic medical coverage though our VaRedge program (www.VARealtor.com/edge), and now naR has launched a similar one: a limited medical plan called Realtors® core Health Insurance.

RcHI is available to naR members or association staff between 18 and 65 and who live in the u.S. It’s guaranteed issue, and the price only depends on which plan you choose. (they start at about $71 per month with no contract.) while Major Medical coverage is designed for, well, major illnesses and accidents, RcHI provides coverage for everyday illnesses and accidents. Get the details at RealtorsCoreHealthInsurance.com.

[Governance]

Small dues increase approved The VAR Board of Directors approved a Budget Committee proposal to hold the 2010 dues increase to only $10, for a total of $110 per person. That’s in response to declining membership and increasing business costs, and is expected to maintain your current high level of service.

Looking at major changes

[Housing economy]

Brokers tell us what’s on their minds If your broker is stressed, don’t be surprised. And if you’re a broker, don’t feel alone. The economy might be picking up (to paraphrase Winston Churchill, this may not be the beginning of the end, but perhaps it’s the end of the beginning), but it’s still tough out there.

At the end of April we did a short survey of managing brokers in Virginia to take their collective pulse, so to speak. How the economy is affecting them?

What changes have they made? How do they see the future?

Here are some highlights:

• 23% “seriously considered leaving real estate as a profession” • 21% “seriously considered selling or merging” their firm.

Positive outlook 0%

• Think the worst of the economic downturn in housing (in Virginia, at least) is over.

20.5% 34.7% 44.8%

10%

15%

20%

25%

Changed the number of licensed Realtors® working for them

• “Think it will take longer” • Think the market will turn before the end of 2009, and we’ll start 2010 in much better shape than we are now.

These charts aren’t the whole story. The survey breaks down the responses by how long the respondents have been in the business. You can download the three-page PDF at VARbuzz.com/files/BrokerSurvey.pdf.

VoluMe 16 l ISSue 3

5%

34%

Made no change

43%

Reduced

23%

Increased

May/june 2009

5

quickhits [Realtor tools]

Who are you?

As part of NAR’s “Right Tools, Right Now” campaign, the 84-page 2009 NAR Member Profile is available to all NAR members as a free PDF download from the Realtor.org store. Visit www.VARealtor.com/2009Profile.

[VHDa]

Tax credit and VHDA loans: Yes we can

[VReB]

We’ve heard of some confusion about whether or not consumers can use the $8,000 first time homebuyers tax credit in conjunction with VHDA loan products.

The answer is yes they can. Read the details at VARbuzz.com/link-roundup and get the VHDA flyer (PDF) at www.VARealtor.com/VHDA8000.

the Virginia Real estate Board’s Spring 2009 newsletter is now available as a PDF. (there isn’t a printed version anymore.) Head over to www.VARealtor.com/VREBSpring09 to read or download your copy.

Spring newsletter out

[Virginia Homeowners alliance]

Winner! Winner! Winner! (and more) We keep on giving out prizes for Realtors® who sign up their clients (and friends and family) for the Virginia Homeowners Alliance. And we’re not talking Bic pens with the VAR logo, either.

Taking home $500 ExxonMobil gas cards (seriously!): Buck Heffernan, Hampton Roads Keith Wagner, Southside Virginia Susan Bailey, Roanoke Valley Trina Wallace, Prince William Vicki Marsh, Hampton Roads Winning $250 ExxonMobil gas cards (nice!)

Carl Manasco, Dan River Carol Ball, Williamsburg Dianne Griffin, Hampton Roads Dottie Figg, Richmond Area Jason Meeks, South Central Tina Merritt, Hampton Roads

Snagging $25 Starbucks gift cards (mmm… Starbucks) Barbara Estep, Virginia Peninsula Debra Griggs, Hampton Roads Diana Hayes, Northern Virginia Gary Dogan, Roanoke Valley Greg Slater, Charlottesville Lynne Creasy, Lynchburg Nancy Evans, Hampton Roads Sha Williams-Hinnant, Fredericksburg Tina Merritt, Hampton Roads Yanji Lama, Northern Virginia Scoring 8-GB iPod Touches (slick!)

Lee Haley, Virginia Peninsula Barbara Howell, Richmond

What’s that you say? You see some people won more than once? Why yes, yes they did.

Remember how it works: For every five homeowners any Realtor® gets to sign up, she earns one entry into a drawing for a prize from the pool. One member got more than 300 homeowners to sign up — she had 60 entries in the drawing.

No wonder she won big. And you can, too, just for getting people you know (or should know) to fill out a simple form.

Go to www.VARealtor.com/VHA to get what you need, so next time we can print your name here. l

And walking away with Nintendo Wiis (cool!)

Alice Zimak, Williamsburg Sha Williams-Hinnant, Fredericksburg

Grabbing $100 ExxonMobil gas cards (also nice!)

Bill May, Charlottesville Gary Dogan, Roanoke Valley Lynne Creasy, Lynchburg Sabrina Thompson, Charlottesville Susan Baily, Roanoke Valley Suzanne Brady, Fredericksburg 6

May/june 2009

www.VaRealtoR.coM

legallines

leM MaRsHall, VaR sPecIal counsel

POAs, out-of-state buyers, failed deals, and more The proTagonisT in Isaac Asimov’s Foundation reminds his colleagues that they should never let their sense of morality interfere with doing what is right. Twain played around with that idea brilliantly in Huck Finn, and Melville gave us the unfor gettable Ahab. T oday, I give you...the conflicted Realtor®.

Conflicts of interest?

Q.

an unrepresented buyer comes to a builder and wants to buy one of the builder’s new homes. the buyer needs to sell his home but has no agent, so the builder refers the buyer to a listing agent.

Here’s the deal: the buyer will pay that listing firm 600 chickens to market the home, but if the buyer closes on the purchase of the new home, the listing firm will refund/rebate 200 chickens to the buyer in connection with closing on the sale of the existing home, but will pay it at closing on the new home, which will often occur later. the builder will then pay the listing firm a fee in the amount of the same 200 chickens.

Is this arrangement legal? Does it matter if we refer to the fee as a bonus, or marketing fee, or a referral fee (albeit an odd one, given it’s paid by the party making the referral)?

A. There are two distinct issues here. The first is the issue of loyalties and potential conflicts. The listing firm should be sure to have a clear understanding that when the agent accepts the listing of the buyer’s house, she will be working for the buyer (as seller), with her loyalties undivided on behalf of the client. She should disclose in writing where the referral came from (the buyer should know – after all, the builder will have made the referral to the buyer, who will realize there’s no listing-agent fairy) and must inform the buyer about the fee paid to the agent by the builder. The listing agent must play it straight from this point on, even if it means that at times she must advise her client to do something that might jeopardize a deal, and that could potentially hurt the builder. Of course, all parties have an incentive to work toward the mutually advantageous dual closings, but the terms under which the closings might occur will matter. The listing agent must put her client’s interests ahead of the builder’s if it comes to it, and the builder must understand that no pressure can be brought because of the unique business arrangement. Can this work? In a perfect world, yes, and in this one if all parties are scrupulous and lucky.

The second issue is how the 200-chicken fee paid by the builder and the equivalent rebate are accounted for.

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May/june 2009

Whatever you call this fee, in reality it is a pass-through event by which the builder reduces the cost of the new house to the buyer by the amount of 200 chickens, using the listing agent as conduit. For this reason, the payments must be shown on the settlement statement when the buyer closes on the new house. Why? Because it might well affect the buyer’s loan, by pushing all concessions to the buyer above the permitted limits of the buyer’s loan program. The problem is that the listing agent is a stranger to that deal, and the rebate comes from a fee paid in connection with the previous deal to which the builder was a stranger. So I’m not sure how to account for the rebate on the settlement statement, but failure to do so might be a species of fraud on the lender, and the listing agent should inform buyer and seller of the importance of accounting properly for the payment. Again, I’m not sure how the listing agent, as a stranger to that deal, will assure it happens. But if the builder is not willing to do so, the agent should re-evaluate participation in the deals.

We have to remember that when it comes to conflicts and loan fraud, we usually get what’s coming to us, unless it was put in the mail.

I would love one cycle with no vexatious questions about POAs, but then hell has not yet frozen over. I would love a bit of sweater weather down there, though.

Owning up

Q.

a listing agent ordered a Poa information packet and requested that it be paid for at closing. the packet was sent out and delivered to buyers, but when the settlement agent asked the amount of the costs to be collected for the Poa at closing, the management company gave an incorrect amount that was less than what was actually owed. that amount was collected and disbursed to the Poa, whose management company, upon learning of the mistake, began dunning the buyers and threatening to lien the property. Is the buyer’s property at risk here?

A. It’s hard for me to believe it is. It’s not totally clear from the question who owed the shortage (did any of it come from the buyer getting an update?), but if it was owed by the seller, I believe the management company and POA must go after the seller for the difference, and may not subject the buyer’s property to a lien over the unpaid amount, which, after all, resulted from the management company’s mistake. I just can’t see a judge www.VaRealtoR.coM

legallines letting the POA goof and then tag the innocent party for the goof, just because they have a handy, reachable asset.

But this question suggests that settlement agents — and the buyer and listing agents as well — should double check amongst themselves the amounts shown on these POA statements against the chargeable services requested by the various parties. Most of us are pleased that in many cases the costs of packets can be paid at settlement rather than at the time they are ordered, but increased vigilance is the price. Ah, well, you can’t have everything.

Where would you put it?

Isn’t that your job?

Q.

speaking of Poas, a buyer has a ratified contract to close in the next few weeks on a property in a development governed by the Poa act. the packet has been delivered and the rescission period has elapsed. the buyers have now been alerted to the fact that the association has just given all owners notice that they will be required to replace all the windows in their unit at considerable expense, at some time after the closing has occurred. who should bear the responsibility for this payment?

A. I want parka weather.

This is complicated. On the one hand, the buyer’s rights as against the seller rest in the contract, and if the seller has fully complied with the seller’s obligations under the Act, the buyer may be out of luck. However, the Act was amended last year to provide that the association must include in the packet the minutes of member and board meetings for the last six months, and it’s worth checking the packet to see if such minutes were included.

The reason for the change was to address just this kind of issue, because it’s unlikely the board would suddenly issue such a notice of special assessment or other financial obligations without having discussed such action within the last six months, and the minutes should show that.

If the issue was discussed, and the minutes were either not complete or missing, it’s possible the association would find it difficult to enforce the obligation against the new buyer. But not having to bear the expense of new windows will be cold – or wet – comfort to the buyer, whose unit apparently needs the new windows.

So, whose obligation is it to check to see that the packet contains minutes of the previous six months’ of meetings? Seller? Fugidaboudit. POA/management company? Getting warmer, but these packets are notoriously incomplete at times, and besides the statute imposes limited damages against the association for failure to comply. Buyer agent? Now we’re getting hot. You should put on your checklist an entry for packet review to 10 May/june 2009

VAR Legal Hotline: (800) 755-8271 Is it risky? Quick! To the Hotline…

The VAR Legal Hotline is a free, members-only risk management tool that is among the top-rated services offered by the Virginia Association of REALTORS®. Through the Legal Hotline, you can receive timely legal information on the issues you confront day-in and day-out in your real estate practice. The VAR Legal Hotline has one major objective: to increase Realtor® professionalism and decrease professional liability.

Before you call: Please note that many of the routine questions the Hotline receives — and we receive a lot of routine ones — have previously been answered in Commonwealth articles; check the indexed Hotline archives at VARealtor.com before calling.

Guidelines for legal Hotline calls: All principal or supervising brokers are eligible to use the Hotline. In addition, one other designated person from each office (for example, an associate broker or office manager) may register as designees of the principal broker.

How to sign up: Registration is easy. Complete the form found under the Member Services tab at VARealtor.com. You must register before you call the Hotline.

Hours of operation: Monday through Friday (except holidays) from 10 a.m. to 4 p.m.

How to contact the Hotline:

By phone: (800) 755-8271 or (804) 264-5033.

By e-mail: hotline@VARealtor.com

call handling process: When you call, please have your NRDS number ready, and include it with any e-mailed questions.

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.

No questions will be answered on matters that are unrelated to real estate, real estate brokerage, or pending arbitrations. www.VaRealtoR.coM

legallines check for minutes. Don’t forget that if the packet is being sent directly to the buyer (by e-mail, for instance, of if you’ve taken yourself out of the loop by directing the packet go directly to the buyer now matter what its format), you must alert your buyer to the need to check this item. Also don’t forget to practice your mea culpas if you are a dual agent, catch this problem, and warn your buyer off the deal.

And if the buyer is unrepresented? Well, we begged them to use a Realtor®. An informed Realtor®.

Hard and soft options

Q.

a listing agent orders hard copy of the Poa packet upon taking a listing, not waiting for a contract (good!). But the new statutory changes permit buyers to have the packet delivered by e-mail. May the listing firm (who is sitting on hard copy) require the seller, by contract, to obligate the buyer to accept hard copy of the packet, avoiding the need to reorder (and repay for) the packet?

A. On the surface, this seems very reasonable. The problem? The statute says that the law’s provisions as to delivery of the packet and cancellation rights (including the buyer’s options as to how to receive it) cannot be varied, even by written agreement of the parties.

You could just do so anyway, relying on the ignorance of the typical buyer as to this point, and the acquiescence of the buyer’s agent. But here’s another thought: Why not order the package electronically, and order a $25 hard copy at the same time, against the possibility that the buyer will want it that way? The total cost will be the same ($150), and you’ll be good to do either way. Or you might just order by e-mail and wait to see if hard copy is preferred, and just print it out for the cost of the paper and toner, saving any delay. This allows the listing agent to (i) get the packet early (always a good idea), and (ii) deliver it in the form the buyer wants (a requirement of the Act). Sounds like a winner.

Deposit insurance

Q.

a listing firm carefully negotiates a complicated transaction between a local seller and a new york buyer customer, and the seller has local counsel review the contract before anything is ratified. the buyer has a home to sell in new york, and the closing here is delayed to accommodate this sale, with a 12-month sunset provision on the buyer’s sale of home contingency. the deal contains a large earnest money deposit (held by listing firm), in part because of the delayed closing. the buyer must keep the seller informed of dealings on the new york property, and close promptly in Virginia after closing occurs in new york.

12 May/june 2009

Failure to do so will result in loss of the deposit to the seller. the buyer moves in under an early possession agreement, and begins marketing the new york property. one year later, the new york property closes, but buyer fails to alert seller or close in Virginia. Buyer has now moved out of the property and has become a ghost. seller wants the deposit. May listing agent give it over to the seller as required by the contract?

A. The contract will ultimately govern the outcome of the dispute between buyer and seller, but the listing firm cannot be the arbiter of that dispute. REB regulations permit disbursement of the deposit only with written consent of both parties, a court order, or after a 30-day letter, to which we expect the buyer will object, just to maintain leverage.

“

With a large deposit that can go nonrefundable: let the seller hold the deposit. there’s really no reason for you to hold it in this kind of deal, because you want the seller to be able to keep it with a minimum of hassle, maximizing the seller’s leverage.”

Here’s my suggestion in cases like this, with a large deposit that can go non-refundable: Let the seller hold it.

There’s really no reason for you to hold it in this kind of deal, because you want the seller to be able to keep it with a minimum of hassle, maximizing the seller’s leverage.

For now, I’d send the buyer a regular, friendly letter, letting him know that unless he authorizes release of the deposit promptly, the seller will be required to bring suit, and if he does, and wins, the buyer will have the pleasure of paying his legal fees. That will usually get results. And in the future, let the seller hold the deposit. Nothing says you’ve got to.

Does 30 days rule?

Q.

a deal failed a year ago, and the buyer agent sent the listing agent (not the seller) a 30-day letter letting him know that, unless a protest was received within 30 days, the buyer agent intended to disburse the deposit to the buyer. seller is now threatening suit against the buyer for breach, although no protest was sent within the designated thirty days. May the buyer agent disburse?

A. I would not do so, for two reasons. First, the letter www.VaRealtoR.coM

might have been faulty, as the regulations state that the letter must go to the “principal to the transaction” whom the escrow agent has determined is not entitled to it. No such letter was sent here. Second, and more importantly, the escrow agent is aware that the seller disputes buyer’s entitlement to the money.

We should always remember that as escrow agent in a purchase and sale transaction, we are obligated to hold the deposit unless and until we have mutual consent or a court order, with the 30-day letter serving as a species of mutual consent. If you know there’s no consent, don’t try to get it from a party by “gotchas” — the recipient didn’t get the letter, or didn’t understand it, or just forgot to respond. If you know a party objects, don’t use a 30-day letter to ascertain that he doesn’t object.

Ethics and law are two different things

Q.

a limited service listing agent makes a $3,000 flat-fee offer to cooperating brokers in the Mls and instructs the selling agents to deal directly with the seller. a buyer agent writes an offer that includes a provision that the selling firm is to receive a fee of 3%. seller accepts the offer, and later tells the

VoluMe 16 ● Issue 3

listing agent that the buyer agent threatened to “take his buyer somewhere else” unless the seller agreed to the 3% commission. the listing agent submits a statement to the settlement agent at closing instructing the settlement agent to disburse only $3,000 to the selling firm, but the settlement agents prepares, and seller signs, a settlement statement with a 3% commission. Is there any remedy here for the listing firm, or for the seller, who argues he was coerced into signing the settlement statement and accepting the contract provision of 3%?

A. The listing agent’s offer of $3,000 in the MLS was not disturbed, as far as I can tell, at least as to the listing agent, who never agreed to change the offer made in the MLS. Seller and buyer were powerless to obligate the listing firm to pay more than it owed to the selling firm.

As to the seller’s obligations, the answer here is not 100% clear to me. On the one hand, the seller’s deal was with the buyer, and a promise in the contract with the buyer to pay a third party who is not a party to the contract might not be binding on the seller. On the other hand, a court might see the selling firm as the third-party beneficiary of the deal between buyer and seller, or it might see the buyer himself as the beneficiary, if the

May/june 2009 13

legallines

“

and in this case we might just have the interesting result that the seller owes the buyer or selling firm an additional fee, while the buyer agent gets nailed for an ethics violation. That’s right: an ethics violation does not necessarily negate a contract claim by the guilty party.” buyer had a legal duty to pay the selling firm the difference between $3,000 and 3%. We don’t know if this is the case or not.

We do know that a promise by the seller to credit the buyer an amount toward buyer’s brokerage fees will generally be enforceable. Whereas the Code of Ethics prohibits a buyer agent from using the contract (as was apparently done here) to bring about a change in the compensation offered by the listing firm in the MLS, it does not prohibit

the buyer from obtaining the seller’s agreement to pay the buyer some amount toward brokerage fees.

My feeling is that limited service listing brokers should stay in touch with their sellers, and should counsel them that if they renegotiate the offered fee, they do so at their own peril. And in this case we might just have the interesting result that the seller owes the buyer or selling firm an additional fee, while the buyer agent gets nailed for an ethics violation. That’s right: an ethics violation does not necessarily negate a contract claim by the guilty party.

License at risk

Q.

a commercial broker has been hired by a client to secure for his owner client investors in the owner’s properties, or, more accurately, in the companies that own the properties. May the broker do so without any further licensure?

A. There’s a real risk here. Depending on how the broker’s compensation is structured, the broker might be deemed an unregistered broker dealer, offering securities without a license. This can cost the client’s companies their valuable exemption from costly and burdensome securities registration requirements. This is not likely to be a problem if the broker is not receiving a transaction-based fee.

The problem here is that while the Securities and Exchange Commission might be tolerant of an isolated event, it becomes much stricter as the behavior recurs.

If the broker brings a buyer who purchases securities (stock, partnership or REIT interests, LLC membership interests) and there is a transaction-based fee (paid only upon completion of a successful deal and often pegged to the amount of the deal), there’s a significant risk that the broker will be deemed an unlicensed broker dealer, the registration exemptions lost, and the deals jeopardized.

If the broker makes an introduction, gets a flat fee, and doesn’t participate in the deal terms, no licensure or registration is likely going to be required. So hand over the contact and walk away – or get a securities license. ● Legal Lines is written by VAR Special Counsel Lem Marshall. Please note that answers to Legal Hotline questions are informational only. Consult your own legal counsel for legal advice. More Legal Hotline questions and answers are in the Legal Resources Center on VARealtor.com.

14 May/june 2009

www.VaRealtoR.coM

formfactor

BLAKE HEGEMAN

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 Resources Center.

(Shameless plug: (800) 755-8271.)

So we asked our intrepid associate counsel (read: lawyer), Blake Hegeman, to take one of the forms the LRC gets the most questions about and illuminate it for us.

Remember, you can download this and all VAR’s standard forms free at www.VARealtor.com/standardforms, where you can also access our ZipForm electronic-form service.

This issue: Form SUM1 and 600A VIRGINIA ASSOCIATION OF REALTORS® RELEASE OF CONTRACT OF PURCHASE (This is a legally binding contract; if not understood, seek competent advice before signing.)

This RELEASE OF CONTRACT OF PURCHASE made as of ____________________________________, 20__________ among __________________ _______________________________________________________________ (the “ Seller”), and ________________________________________________________________________________ ( the “Pur chaser”), and _________________________________________________________________________________ ( the “Listin g Firm”) and ___________________________________________________________________________(the “Selling Firm”) provides: (a)

By a Con tract of Purchase dated _____________________, 20 _____, (the “Contract”), Purchaser agreed to purchase and Seller a greed t o sel l to P urchaser certai n r eal estate and all im provements thereon locate d at ____________________________________________________ in th e City o r Co unty o f ___________________________________________ and described as _ _____________________________________; and

(b) Seller, Purchaser, Listing Firm and Selling Firm wish to terminate entirely all o f their respective rights and obligations arising600A: under theRelease Contract. of Contract of Purchase VAR Form A release is a mutual act of the parties by which one or A common scenario we see with this form: My buyer client more of the parties are released from obligations under received the property owner’s association (POA) packet and wants Now, therefore, in considera tion of the premises and of the m utual promises of the parties, Seller, Purchaser, Listing Firm the contract pursuant to whatever agreements the parties out. Therefore, we sent the seller a signed copy of Form 600A and Selling Firm agree as follows: have reached. requesting a release within three days of receiving the packet.

For example, A can the sellers a listing, Now seller says he won’tListing sign the release is proceeding to 1. theSeller, Purchaser, Firm and and Selling Firm mutually terminate entirelyFirm all of theirrelease respective rights from and obligations arising and the sellers agree to pay Firm A’s advertising expenses. settlement.

Whatunder gives?the Contract.

Or the sellers can release the buyers if the buyers forfeit the Your buyer may still obligated under the contract. The 2.

Seller, Purc haser, Listing Fi rm and Se lling Firm mutually releaseA and fullyoften, discharge ot her from any deposit. release but noteach necessarily, results in and a ter-all POA Act provides a termination right within a specified claims, d emands, d amages, actio ns, or liab ility o f an y k ind and n ature wh atsoever fo r, o n acco unt of, b ased on , or mination of the contract. For example, Tom and Dick release number of days, but you didn’t terminate — you asked growing out of negotiation, execution, performance, termination and release of the Contract, both as t o all matters and Harry fromwhich obligations under abe contract, but the contract for a release.

A termination and release are very different things now known or unknown, and also as to all matters and things may hereafter discovered. continues between Tom and Dick. things.

So the rule should always be: If your clientinwants you to Termination is generally the unilateral act ofand oneheld partyby__________________________________________ 3.

The entire deposit made

by Purchaser escrow under Contract beend. disbursed as follows: ______________________________ Purchaser; deliver a termination, dotoso, and be explicit. You might also declaringthe the contractshall at an For example, the $buyer $ _________________________________ toseller Seller; $ ______________________ to Selling Firm; your client’s affairs deliver a release in the hopes of getting terminates upon being refused a loan or because the $ ___________________________________ Listing interest onshouldn’t the deposit, if any, be disbursed tied Accrued up neatly, but you leave it toshall the other side to refuses to make agreed-upon repairs. A termination of to this sort Firm. to _______________________________________. characterize what you’ve done in the way most advantageous does not rely upon the agreement of the other party but is a to them. and applied according to the law of Virginia, and it unilateral act.

4. This Release of Contract of Purchase shall be construed, interpreted,

shall be binding upon and shall inure to the benefit of the heirs, personal representatives, successors, and assigns of the

16 MAY/JUNE 2009 parties.

5.

WWW.VAREALTOR.COM

This Release of Contract of Purchase constitutes the entire understanding among the parties and may not be modified or changed except by written instrument executed by all parties, and all parties understand its contents and execute it solely

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SUMMARY OF RIGHTS AND OBLIGATIONS OF SELLERS AND PURCHASERS UNDER THE VIRGINIA RESIDENTIAL PROPERTY DISCLOSURE ACT Virginia’s Residential Property Disclosure Act (the “Act) (Virginia Code §55-517 et seq.) requires real estate licensees to inform the parties to a transaction with whom they deal of their rights and obligations under the Act. The licensee providing this information to you is prepared to answer any questions you may have about what the Act means to you, and to furnish you with a copy of the Act at your request.

The Act applies to sales, exchanges, installment sales, or leases with option to purchase of residential real property improved with one to four dwelling units. The Act does not apply to: transfers pursuant to court order (in estate administration, pursuant to writ execution, foreclosure, bankruptcy, condemnation, or by decree for specific performance); transfers among co-owners; transfers among spouses; transfers among parents or grandparents and their children or grandchildren; tax sales; transfers involving a government or housing authority; or (subject to certain exceptions discussed below) sales of new homes.

The Act requires sellers to furnish purchasers with a disclosure statement developed by the Virginia Real Estate Board. The statement must be furnished to the purchaser before final ratification of the purchase contract or the purchaser may terminate the contract or sue later for damages.

A seller, in furnishing a disclosure statement, makes no representations or warranties as to the condition of the property or any improvements located thereon. Purchaser is advised to exercise whatever due diligence purchaser deems VAR Form SUM1:with the terms and condition of necessary including a certified home inspection, as defined in §54.1-500, in accordance Summary of Rights and Obligations the purchase contract, but in any event prior to settlement.

The Virginia Residential Property Disclosure Act obligates

A builder of a new home must disclose to a purchaser in writinglicensees all knowntomaterial defects which a they inform their clients — would and theconstitute customers violation of any applicable building code. In addition, for property located wholly or partially in any locality comprising deal with — of their rights and obligations under the Act. The Planning District 15 (the City of Richmond, the Town of Ashland, and the counties Charles statute does not sayofhow this isCity, to beChesterfield, done.

Goochland, Hanover, Henrico, New Kent and Powhatan), the builder (or seller, if the owner is not the builder) shall disclose VAR and several local associations have put together this in writing whether mining operations have previously been conducted on the property or the presence of any abandoned form to permit agents to comply with this statutory duty. mines, shafts or pits. This disclosure does not abrogate any warranty or other obligations the builder may have to the don’t have to use may inform your verbally, purchaser, and must be made (i) when selling a completed home,You before acceptance of itthe(you purchase contract, orclient (ii) when which is not recommended, or you may use some other selling a home before or during construction, after issuance of a certificate of occupancy. No disclosure or statement of any communication), butneed we strongly encourageinits use kind is required if there is no such information to disclose. Any method requiredofdisclosure may be, but not be, contained the disclosure statement described in this Summary. because it has been carefully prepared to permit Realtors® to meet their obligation.

A purchaser must be furnished with a disclosure statement signed by theit seller prior to final ratification the purchase Get signed if you can, to prove youofpresented it. Of contract. If such statement is not received by final ratification, the purchaser’s sole remedy shall be to terminate the course, it doesn’t have to be signed (the law doesn’t require purchase contract by sending written notice to the seller either by hand delivery or U. S. Mail, postage prepaid, at or prior the use of this or any other specific form or method), but it’s a to the earliest of (i) 3 days after receiving the statement (if delivered in person); (ii) 5 days after postmark (if sent by U. S. good(v) idea. ● Mail, postage prepaid); (iii) settlement; (iv) occupancy by purchaser; purchaser’s making written application for a mortgage loan if such application discloses that the termination right ends upon application; (vi) purchaser’s execution of a written waiver of the right to terminate (such waiver may not be in the purchaser contract).

If the seller fails to provide the required disclosure statement, the contract may be terminated as set forth above. If the seller fails to provide the required disclosure statement, or the seller misrepresents, willfully or otherwise, the information required in such disclosure, except as a result of information provided by the locality in which the property is located, the purchaser may bring an action to recover actual damages suffered as a result of such violation. No purchaser of property located in a noise zone designated on the official zoning map of the locality as having a day-night average sound level of less than 65 decibels shall have a right to maintain an action for such damages. Any such action must be brought within one year of the date the purchaser received the disclosure statement. If no disclosure statement was provided to the purchaser, the action must be brought within one year of the date of settlement, or purchaser’s occupancy of the property by lease with option to purchase.2009 18 MAY/JUNE WWW.VAREALTOR.COM Purchasers should be aware that neither a seller nor a real estate licensee is obligated to disclose facts or occurrences which have no effect on the physical structure of the property, its physical environment, or the improvements located thereon, or the

IN

or How far can you take that MLS data?

By Rachel Bailey and Andrew Kantor

20 May/june 2009

www.VaRealtoR.coM

OUT The Internet is where most people start looking to buy, and it’s becoming the focus for more and more Realtors® and brokers.

E-mail newsletters, blogs, online ads, and more are commonplace. And many include information from properties’ MLS listings.

But how much can you publish? Can you post a listing to your blog? Can you run a picture of a house in your newsletter? Can you tell a friend about another broker’s listing?

In this age of copyright fights, easy data sharing, and information being as valuable as it is, it’s not quite as simple as you might think. In fact, Michael Hayes, director of enterprise services at eNeighborhoods, says the complexity goes back a long way — to the 17th century when the Virginia colony was first creating its real estate laws. Evolution over 400 years has created a system based not only on those laws, but on industry agreements, private contracts, and common sense.

VoluMe 16 ● Issue 3

First, the easy stuff If we’re talking about your own listing, you have a lot of leeway. Brian Larson, an attorney in Minneapolis with 20 years of real estate experience, says it’s widely understood that, if it’s your own listing, you do what you want (unless the particular MLS you’re working with has unusual prohibitions).

Charlottesville Realtor® and MLS authority Jim Duncan agrees. “You can put stuff anywhere, but the confidential stuff has to stay confidential,” he says.

“Ultimately, a lot of it comes down to common sense.”

Does that mean you can publish your own listings to your blog, put up a sign on a telephone pole, and tell your friend about them, in all the gory detail? Not quite.

As Laura Benjamin, chief executive officer at the Roanoke Valley Association of REALTORS®, points out that, even if it’s your listing, it’s really the seller’s listing.

And the seller has certain rights, including (for whatever reason) not having the listing on the Internet.

For example, “the seller also has the right to say — assuming they want it on the Internet — ‘I don’t want any automated value assessments,’ or ‘I don’t want any comments’,” she said.

And then, there’s that confidential stuff you need to avoid: Owner or occupant contact numbers, lockbox information, showing instructions, compensation, and the type of listing agreement (e.g., exclusive agency) for starters. And don’t forget that there are a couple of May/june 2009 21

things you should disclose: the fact that you’re a Realtor® (or real estate agent) and who your broker is.

But what about someone else’s listing? After all, you want to show potential customers all the propertiese available in your area. That’s when things get more complicated. Now you’re dealing with NAR, possibly multiple MLSs, the Department of Justice, and even copyright law.

Mother, may I? Copyright law is the most basic. That picture you took?

That description you wrote? You own the copyright. No one else can publish your stuff — and you can’t publish someone else’s — without permission.

As an agent, you give your broker the right to publish it, of course. For that reason, if you want to publish the information from another agent in your firm, you only need your broker’s permission. (Although, as a lawyer, Brian Larson advises you to get that permission in writing.)

The rights continue to be passed on. When your broker adds that information to the MLS, he’s giving that MLS certain permissions. As Victor Lund, founding partner of the WAV Group, a consulting firm specializing in technology for MLSs, put it, “When the broker enters that information in the MLS, that info is given by grant of license to the MLS.” When you (or your broker) give rights to the MLS, you also accept its rules, and you accept what it will do with that information — namely, share it with other brokers and agents. (That’s the point of the MLS, after all.)

So now that information is in an MLS where any broker can see it. And because sharing data over the Internet has gotten easier, it’s easy to republish.

But easily doesn’t mean legally. Where’s the line?

Obviously, when you sit down with clients in your office you may show them other brokers’ listings. But what else can you do with those listings? Can you publish a photo of one on your blog? Can you include a description

Disclose, disclose, disclose whether IDX or Vow, there are certain things you should always disclose.

• that you’re an agent and a Realtor® (assuming you are).

• the name of the brokerage you work for.

• For listing that aren’t yours, clearly display the listing firm “in a readily visible color, in a reasonably prominent location, and in typeface not smaller than the median typeface used in the display of listing data,” per naR. For Vow sites, you also need to display the listing agent.

• Indicate what state(s) you’re licensed in.

22 May/june 2009

of one in a Web site for your clients? Can you tell someone on the phone about “the great Colonial at 1734 Maiden Lane”?

Yes. And no. And maybe. And sometimes.

As Michael Hayes put it, “There’s a reason why it seems so complicated. That’s because it is.”

Essentially, it comes down to this: There are rules about what you can share with a client, and rules about what you can share with the public.

Because so much business and advertising is done on the Web these days — whether an agent’s site, a blog, a Facebook page, or even Twitter — that’s an important distinction. That’s why NAR and most MLSs recognize two kinds of Web sites that are allowed to publish MLS data: IDX sites and VOWs.

IDX and VOW: A primer IDX stands for Internet Data Exchange. VOW stands for Virtual Office Website. The names aren’t important, though; what matters is this: If you’re going to publish MLS data on the Web — to your company site, a blog, a Twitter feed, and so on — you will need to either follow the rules for IDX sites or the rules for VOWs, depending on who can see the site.

“

Just because you can technologically grab some listings from an MLS doesn’t make it right.”

Those rules were developed by NAR for the MLSs run

by Realtor® associations, based on its agreement with the Department of Justice. They work like this: Sites anyone can browse (e.g., your Web site, Twitter feed, or Facebook page) must comply with the rules for IDX sites. In these cases, users don’t have to sign in; they’re anonymous. Because of that, IDX site owners can only publish certain information that’s in the MLS. What information, exactly? Only what’s allowed by A) the MLS and B) the listing broker. In other words, a listing broker can, if she wants, specify, “I don’t want my listings showing up on the IDX sites of Brokerage A, Brokerage B, or Brokerage C, and I only want the following information displayed on other IDX sites….”

It’s the MLS’s job to make sure those restrictions are followed by its users.

Says Laura Benjamin, “Just because you can www.VaRealtoR.coM

IDX vs. VOW

IDX site

VOW

Typical use

Public part of a broker’s or agent’s web page that lets users browse listings

a broker’s or Realtor’s client-only site, requiring a user name and password

What’s shown in a listing?

whatever the Mls, the listing broker, and the showing broker all agree to show

the complete Mls listing (aside from confidential data)

Who can use it?

anyone

only clients of the brokerage who have signed up and been provided with a user name and password

Can a listing broker prohibit certain information from his listings from being displayed?

yes

no

technologically grab some listings from an MLS doesn’t make it right.” As she points out, “In Roanoke, 98 percent of brokers give blanket permission to share IDX data. Not 100 percent.” That two percent difference is crucial.

It’s Code of Ethics 101: You must have the permission of a broker before publishing his listings. So no cutting and pasting from someone else’s site. (That’s why the Metropolitan Indianapolis Board of REALTORS® ordered one of its members to prevent Google from indexing her site. The search engine made everything available to the public, whether or not the listing broker gave permission.)

But, because Realtors and brokers will want to tell clients more than the basics about a property, there are VOWs. The key word is clients. In order to be able to tell someone all the details about a property, that person has to be a client, not an anonymous Web-site visitor.

VOWs are meant to function as, essentially, an online version of a Realtor®’s or broker’s office, and thus provide the same information that would be available to a customer who walked into a brick and mortar building.

A VOW user can’t be anonymous; he has to have a business relationship with a broker. (You wouldn’t let anyone walk in off the street and start browsing the listings on one of your office computers, would you?) So to be considered a VOW, a Web site must require users to register with a brokerage, usually through their Realtor®, and set up a user name and password.

That’s the crucial difference. VOW users must have accounts with brokers and give up some information to get those accounts. There’s a reward for doing that: A VOW must show all the available MLS listings, and all the information in those listings. If it’s in the MLS, it must be in the VOW, and thus it must be accessible to any VOW user.

The listing broker has no say in what can be shown or who can see it. Only the MLS’s rules apply. (And those rules apply not only the VOWs, but across the board. As VoluMe 16 ● Issue 3

NAR puts it, if an MLS imposes a rule on VOWs, “it must also impose them on all other disclosures of listing information by brokers to consumers, even oral disclosure.”)

For example, if your MLS has augmented its listings by licensing data such as public records or mortgage information from a third party, it must make that same additional information available to a VOW. So using a VOW is like talking to a broker. If it’s in the MLS, it’s in the VOW. There are other differences between VOWs and IDX sites, in part because the goal of a VOW is to get consumers to establish relationships with Realtors® and brokers, and not try to go it alone via Craigslist and Zillow.

For example, you can add information to a listing on a VOW site. You can’t change the data that comes from the MLS, but you can supplement it — comment on the neighborhood, mention something that’s not in the ad, or even have your own advertising running near it (provided it’s not “deceptive or misleading,” of course, and obviously you want to act within Fair Housing laws).

VOW sites typically offer more options than their IDX counterparts, but at a cost. The sites are more expensive to create, consumers may balk at providing personal information, and — for Realtors® with brick-and-mortar offices — the benefits are limited. (For virtual brokerages, of course, they make more sense.)

But the fact that they exist is likely to change the market. As Benjamin put it, “Consumers are really driving the train, and now there are more ways for brokers and agents to provide them information.” For that reason, for some MLSs at least the data available for IDX and VOW sites are almost identical.

And that’s the bottom line: The rules for what you can and cannot share are evolving with the industry and the technology. You need to keep up with them not only to stay on the right side of the law, but to take best advantage of what the technology has to offer. ● May/june 2009 23

Legislative Recap On July 1, most of Virginia’s new laws take effect.

Here are the ones Realtors® need to know about.

EACH YEAR, ON the first of July, the various laws passed by the General Assembly and signed by the governor take effect. VAR has had a hand in a number of important pieces of legislation that affect our members — and there are several other laws that, while we didn’t have a hand in them, are the kinds of things Realtors® and brokers are likely to encounter.

So we asked our vice president for law & policy, John Broadway, for a breakdown on what to expect on July 1 (and in one case a little later).

Without further ado, here are the important new real estate laws taking effect this summer.

Out-of-state commercial licensees granted limited license exemption. Effective July 1, commercial agents licensed in good standing in other states will be able to bring their out-of-state clients into Virginia to take advantage of Virginia opportunities without being licensed in Virginia.

This change reflects the realities of the commercial world where clients are typically more sophisticated, the laws and principals at work generally more universal, and legal counsel more frequently involved than is the case in the residential world.

Perhaps most importantly, because of the national and international nature of commercial markets, where agents are required to work across state borders more frequently, licensure in multiple states is a real burden, and commercial agents often ignore state license laws that in reality are often more about turf protection than consumer protection.

The new law will still require commercial agents to have a Virginia license to list property in Virginia and to represent Virginia clients here, but will permit tenant and buyer representatives licensed elsewhere to bring their clients into Virginia to see and consider our clients’ properties. In reality, this is done regularly anyway, in violation of our license laws, putting Virginia brokers at risk with every commission they pay to an out-of-state www.VaRealtoR.com

broker assisting a client with a Virginia deal if that broker is not licensed here.

These changes were enacted unanimously by both houses of the General Assembly that believes as we do that dropping barriers to commercial agents from other states to doing business here will work to the advantage of our clients and our commercial companies, which broadly supported this legislation. Virginia becomes the first state to enact such a broad reform.

Real estate license applicants will now undergo a background checks. This new law (requested by VAR) requires the Department of Professional and Occupation Regulation to conduct mandatory criminal history background checks on new applicants for real estate licensure.

(Which will probably mean an additional fee to cover the cost.) And if you’re already licensed? When you go to renew your real estate sales or brokerage license, you’ll have to “affirmatively state” that you have no criminal convictions that you haven’t already disclosed.

Misstating the sales price is a crime. Don’t try to get out of rendering unto Caesar the things that are Caesar’s — or at least the Commonwealth’s. Under this new provision, intentionally misstating the sales price in the stated consideration provided to a circuit court clerk is a Class 1 misdemeanor (maximum $2,500 fine and a year in lockup). And if the court decides you were trying to evade paying taxes? Not only will you have to pay the difference, the bill also allows a penalty of an additional 100 percent of that tax due on the understatement of the consideration.

Vested rights expanded to include fire damage. If a natural disaster or other act of God damages a building, property owners could repair, rebuild, or replace it. At VAR’s request, the new legislation makes it clear that in the event of an accidental fire (such as a tenant fire), the owner still has protections under the vested rights statute.

Parts of the POA Act don’t apply to auctioned properties. At VAR’s request, the Virginia Property Owners’ Association Act was amended to exempt properties that are sold at auction from certain requirements — as long as a property owners’ association disclosure packet is made available to prospective purchasers before the auction.

Property managers don’t need to be woken for the tow truck.

Existing law allows a local government to include in its vehicle towing ordinance a requirement for a secondary signature Volume 16 ● Issue 3

prior to towing. That signature often had to come from the property manager. Seeing that the towing is often done in the wee hours, that meant he could be woken at 2 a.m.

At VAR’s request, the law will now permit a towing operator to receive verbal approval to tow from an agent designated by local ordinance — one who is available at all times. Because the owner of the towed vehicle is likely to call the police when he sees his car is missing, the locality now has the authority to require towing operators notify the police department before the tow. (If the towing occurs during normal business hours, the legislation allows the locality to require that the owner of the property or his agent provide written authorization prior to the tow.)

Attorney’s don’t (necessarily) get paid for referrals. If an attorney refers clients to a real estate licensee, he is not entitled to receive any compensation from a listing firm — or any offered by a common-source information company to cooperating brokers — unless he is also licensed as a real estate broker or salesperson.

You now must disclose stormwater detention facilities. A new law requires that the Residential Property Disclosure Statement be amended to add stormwater detention facilities as one of the laundry list of items that should be included. The Virginia Real Estate Board approved the new disclosure statement, and released the new form on June 1. Realtors® will need to start using it on July 1. (And of course VAR will make it easy to get — stay tuned.)

Water and sewage company lien rules were tweaked.

Under existing law, local water and waste authorities can place a lien on real estate (pursuant to certain conditions) if a tenant is delinquent in making payments. The new law provides that a lien may apply for delinquent rates or charges applicable to “three or fewer months” rather than “three or fewer delinquent billing periods not exceeding thirty days each” in order to accommodate authorities that bill on a quarterly basis.

You can’t sign away CRESPA rights. Residential purchase contracts for four or fewer dwelling units must include a Consumer Real Estate Settlement Protection Act (CRESPA) Disclosure. (CRESPA guards Virginia’s consumers by regulating settlement services, protecting escrow funds, and limiting settlement fees.)

This year, the General Assembly added language to the disclosure to make clear that the provisions of CRESPA may not be changed by agreement, and that the rights it conveys may not be waived. The new language also states specifically that a seller may not require the use of a particular settlement agent as condition of a property sale.

Transfer of development rights will be more accessible.

VAR supported extensive changes to the law concerning may/june 2009 25

transfer of development rights (TDRs) to help make the process more useable for property owners and localities.

The main goal of the changes was to establish a series of incentives for property owners to utilize TDRs, but key provisions include authority for a local ordinance to provide that: • The owner of development rights may make application to the locality for a real estate tax abatement for a period up to 25 years, to compensate the owner for the fair market value of all or part of the development rights; • The owner of a property may request designation by the locality of the property as a “sending property” or a “receiving property”; and • The receiving areas are to include urban development areas in the locality.

Property owners need to clean graffiti. A new law allows localities, after giving notice, to charge an owner of unoccupied property for the costs to remove graffiti. Unpaid charges can create a lien on the property.

POA members must have access to POA records. This bill provides that salary information of the six highest paid employees of a property owners’ association making more than $75,000 per year shall be available for examination and copying by association members. The provision also specifies that all books and records of the association, including individual salary information for all employees and payments to independent contractors, are available for examination by members of the board of directors.

Local governments must allow alternative septic systems. VAR requested — and the General Assembly passed — legislation to clarify that local governments do not have the authority to ban alternative septic systems.

The governor proposed amending the effective date so that once regulations directing the maintenance of these systems have been adopted by the State Board of Health, localities will no longer have the authority to regulate qualified alternative septic systems. The effective date of this legislation is not July 1, 2009, but upon adoption of the regulations by the State Board of Health, which most likely will be by the end of 2009, or early in 2010.

Finally, a number of significant changes were made to landlord and tenant laws this year. Below are key 26 may/june 2009

revisions contained in the bill: Landlords must give tenants the same notice for the application of insecticides as they do for pesticides. Tenants are required to prepare their units for pesticide and insecticide applications in accordance with the written instructions of their landlords, and if insects or pests are found, tenants must follow written instructions from their landlords to eliminate the insects or pests following application of pesticides or insecticides.

The repair process is streamlined. The law now clarifies that if a tenant requests routine maintenance, the landlord does not have to give notice to that tenant that the landlord is going to perform the requested maintenance.

Tenants need to know about defaults and foreclosures.

Landlords must now provide tenants written notice of a mortgage default, notice of mortgage acceleration, or notice of foreclosure sale relative to the loan on the unit within five business day after the landlord receives written notice from the lender. (This does not apply to a managing agent who does not receive a written copy of the notice from the lender or in the event that a tenant provides a copy of the written notice to the landlord or managing agent.)

No interest for security deposits. The bill establishes the interest rate on security deposits for 2009 as 0%.

Landlords don’t have to clean a tenant’s mold. Landlords are no longer obligated to pay all costs for mold remediation when the mold is a result of the tenant’s failure to maintain the dwelling unit.

Localities must divvy the rental inspections. Existing law states that a locality cannot have a jurisdiction-wide rental inspection district. This legislation clarifies that a locality cannot have one or more rental inspection districts that comprise the entire locality, either.

Tenants who don’t leave will pay big. For each day a tenant remains after the termination date of his lease, the landlord has the right to charge a liquidated damage fee against the holdover tenant equal to 150 percent per day of the monthly rent. (This provision does not apply to Section 8/low income tenants.)

Court jurisdiction clarified. The law clarifies that all people obligated on a lease can have their unlawfuldetainer cases heard in general district court, rather than part of the case being heard in general district court and part in circuit court.

Want more about the laws and how they affect you? watch a video with VaR’s special counsel lem marshall for more information about these changes at www.VARealtor. com/2009laws. ● www.VaRealtoR.com

anDReW KanToR

accessibletech

Your good name is under attack.

Here’s how to protect it.

You’ve heard the stories: The just-out-of-college job applicant who forgot to take that video down from his YouTube account.

The sales guy from a potential vendor who posts a note to Twitter, “Boy, do I hate working with these people.”

The teenage girl who finds the photos she sent to her boyfriend (now ex-boyfriend) on the cell phones of half her class.

Foolish people, you think? Everyone knows that once something’s online it’s part of your permanent record. In the age of Google, everyone should know that what you say now come back to bite you — at that interview, for example.

Probably true. But there’s more to protecting your online identity than “Only post things you’d let your mother see.” Your identity is more than just what you say. It’s what others say about you.

“

Everyone knows that once something’s online it’s part of your permanent record. In the age of Google, everyone should know that what you say now you might need to own up to later — at that interview, for example.”

Google and other search engines don’t know the difference between them; all they know is how often your name appears on a Web page, and how popular that page is.

In other words, being silent online means letting others speak for you. I have written about people on my personal blog and discovered that my site is at the top of the list of Google searches on their names. That’s a dangerous power to let someone have.

I am who you say I am True story: I was writing about a Realtor® and needed to verify her hometown, so I Googled her name.

Know what was at the top of the search results? A 2004 complaint filed at the Rip-off Report Web site, accusing her of being “dishonest,” “deceitful,” and a long list of similar words.

Volume 16 ● Issue 3

Ouch.

How did that happen? Google looked at all the Web sites that mentioned her name, and ranked those sites based on how often her name was mentioned and how popular the sites were. So while her name also appeared on various real estate sites — including her company’s — none of them were as popular as Rip-off Report.

It’s called “not managing your online identity.” And it’s something you can’t afford to skip. How many potential clients also Googled this Realtor® and chose to go with a competitor because of what they saw? She’ll never know.

It gets worse. On the site, below the complaint, was a link reading, “Click here to read other Rip Off Reports on [name of her brokerage].” I clicked it, and I got a long list of complaints about other people in her firm. Those complaints could be old, unfounded, resolved — but the list is there, and that means that the other people in her firm are also being hurt.

The lesson for those other people: You can have a firm grip on your online identity, but all the good karma you’ve accumulated only works when someone searches on your name. If, instead, they find you via another site (like Rip-off Reports), all the planning in the world can’t help. In other words, you are also judged by the company you keep.

What’s a nice Realtor® to do?

First and foremost, think like a potential client. See what’s already out there.

Google your name. Now. And in quotes. And with “Realtor®.” And with “Virginia.” And with your city or town. And misspelled. Then do the same thing with your firm. You get the idea.

In some cases, if you find something negative or inaccurate, you may be able to rebut it. Be careful, though; an online argument rarely has winners. Be polite and professional, if you reply at all.

A much better long-term plan is to get your name online regularly in a positive way. If you have a Web site where you can post messages or other content, use it and do it. The more Web pages that include your name on them somewhere, the better. may/june 2009 27

accessibletech Master of your domain another good way to establish and protect your good name is to buy your own domain name. Buying a domain name, e.g., janedoerealty.com, only costs $10-15 per year. That’s just to own the name. If you want to put up a Web site or use the domain for e-mail you’ll need to pay for Web hosting, which runs about $5 to $10 per month.

For that small outlay of cash, though, you get a permanent home on the Web, and a permanent e-mail address.

The former is good for establishing your online identity, even if you only put up a basic “business card” site; the latter is an easy way of getting a permanent e-mail address (e.g., jane@janedoerealty.com).

If you have an uncommon name, see about getting yourname.com. But if you’re a john johnson or mary smith, try some variations that emphasize your business: joesmithrealtor.com or janedoeroanoke.com. notes: avoid hyphens. Go for a .com domain, with .org and .net as second choices; forget .us, .tv, or anything along those lines. and be aware of naR’s rules about using the word “realtor” in a domain name: you can use it with your name or your firm’s name, but not with a location or description — so roanokerealtor.com is out, as is best-realtor-ever.org.

How to use the domain you buy? at least put up a simple “business card” page with your name and contact information. most hosting services (see below) have simple tools to do this for you, or you can ask the neighbor’s kid for help. and, of course, you now have an e-mail address for life — or at least as long as you pay the annual fee. no more updating all your contacts if you move or change firms. ●

Domain-name details you’ll find the complete rules for using “Realtor” in a domain name at www.realtor.org/letterlw.nsf/pages/ internetuse.

There are thousands of companies that will let you register a domain name, and then “host” that domain for you — i.e., let you put up a Web site. Here are four you can trust: asmallorange.com hostgator.com justhost.com register.com

28 may/june 2009

That’s one reason having a blog is a good idea. Don’t be put off — scrap the word “blog” and think of it as a Web site that you update regularly. Every time you write about anything from the economy to the weather, that makes the site just a bit more important in Google’s eyes, and gets your name out there the way you want it to be.

Think beyond your own site as well, especially if you don’t want to maintain a blog. Use your real name (and maybe even city, firm name, or “Realtor®”) and post comments to popular sites that allow them — especially if they’re real estate related.

For example, USAToday.com allows comments to most of its stories. Chime in. Ditto for NAR’s blogs, such as “Speaking of Real Estate” (speakingofrealestate.blogs. realtor.org) and the leadership team’s “Voices of Real Estate” (narblog1.realtors.org/mvtype/president). And don’t forget VARbuzz, our own blog at VARbuzz.com.

(Plug: We’re always hungry for comments.)

Be knowledgeable, be professional, be positive. The point is, get your name out there.

“

If you want to completely separate personal and professional, you need to create a new you — an online persona complete with a nickname and e-mail address that’s not connected to your real life.“

Never heard of him Not everyone is a professional 24/7, and sometimes you want to say something on a Web site that you don’t want your clients to know about. Choosing the wrong politics or even the wrong football team could mean the difference between getting new business and not.

If you want to completely separate personal and professional, you need to create a new you — an online persona complete with a nickname and e-mail address that’s not connected to your real life.

So pick a nickname; one word is best. Make it one you like, because you could end up using it a lot. (Lazy?

Visit dotomator.com/web20.html to generate suggestions.

Welcome to the world, “Quander”!)

That’s the name you’ll use wherever you might express an opinion. And because so many sites require you to give e-mail address, you’ll need to create that, too. Sign WWW.VaRealToR.com

up for a free account on a Web-based e-mail service such as Google’s Gmail, Microsoft’s Windows Live Mail, or Yahoo Mail. Then you can talk out of both sides of your mouth, so to speak.

(If you’re paranoid and want to be even more anonymous, you need to hide your IP address — the individual number of your computer that any Web site you visit can see, record, and possibly trace back to you. You can either use a computer at a library, find a public Wi-Fi hotspot, or install the free IP-address-hiding Tor software available at www.torproject.org on your computer.)

There is, of course, no fail-safe way of securing a pristine online reputation — aside, perhaps, from being a saint (although even then you’ll run into issues). The best you can do is make sure that the positive message about you overwhelms anything negative that’s out there. ●

It’s more than just your name I used to work for the american chemical society, where I was part of a team that interviewed potential editors. as a matter of course, I Googled every applicant’s name. one in particular had an unusual e-mail address, along the lines of “blueravenmom@yahoo.com.” so I searched not only on her name, but on “blueravenmom” (or whatever it was). many people, after all, won’t put their real name on a comment they make.

It was the right move. It turned up a bunch of, well, let’s just call them “non-scientific messages” posted to a bunch of way-out-of-the-mainstream sites. I passed her posts along; the woman was quickly added to the no Thanks pile.

Lesson: Being anonymous is more than just not using your name. It’s being as unidentifiable as possible. ●

RealToR®-to-RealToR®

Volume 16 ● Issue 3

may/june 2009 29

realtycheck

GaRy DuDa

The question: How do you market your properties beyond the MLS and newspaper classifieds?

Andy Hubba, Realtor ®

once upon a time, people actually used the newspaper to search

Exit Realty Professionals, Virginia Beach

for a home. now, you could argue, any money you spend advertising properties in the local paper could be better spent elsewhere. (although advertising yourself is a different issue.) as brokers and Realtors follow ®

consumers away from newspapers, where are they ending up? we sent Gary Duda, broker and owner at Re/MaX action Real estate in Glen allen, to find out some of the ways they’re reaching out without killing any trees in the process.

Andy Hubba uses the world of social networking to promote his listings and his own services. Hubbard says that by use of a service called listingDomains. com® he creates unique web sites for each of his listings and publishes that information on Facebook and on other social networking sites.

“It’s taking online marketing in its natural form and blending it into social networking to help promote the property and myself,” says Hubba. when Hubba creates a web site for a listing — a cost as low as $50 for the year — that listing ends up on the pages of all 573 of his Facebook friends — 125 of whom are Realtors®. the more he builds his social network, the more his listings are promoted.

David Harbour, Realtor® RE/MAX Premier, Dulles One of David Harbour’s tactics is to market his homes and be environmentally responsible at the same time.

Harbour uses two services — ConnectTel and VoicePad — that allow buyers to get detailed information about his listings by phone.

ConnectTel costs $25 a month for unlimited listings.

It not only gives potential buyers the data they want, but Harbour gets information on when they called, what property they inquired about, and even where they saw the number be it a sign, magazine, or flyer.

“It allows you to proactively follow up with your

30 May/june 2009

He can also use the service to solicit direct feedback on his listings to share with his sellers.

In a tough selling market, Hubba says the extra effort is really appreciated by his clients.

“

It’s taking online marketing in its natural form and blending it into social networking to help promote the property and myself.”

“Do I sell everything? no,” says Hubba. “But do I put in the energy to expose each listing above and beyond the simple MlS listing and give my sellers the best opportunity to procure a qualified buyer in the shortest amount of time? yes!”

prospect versus aimlessly hoping someone is interested,” Harbour says.

“

I’ve kind of switched my focus to being green,” he says. “I’m trying to get away from using paper products.”

VoicePad, which Harbour gets free from his broker, is similar. It allows buyers to call a number, enter a home’s address, and receive more information about that listing.

Harbor can also capture a caller’s contact information for immediate follow up.

“I’ve kind of switched my focus to being green,” he says. “I’m trying to get away from using paper products.”

www.VaRealtoR.coM

Susan Frank, Realtor® Long and Foster Realtors , Richmond Susan Frank is turning to new technologies to get the word out about her listings.

She’s signed up for a service that allows buyers to send a text message for more information about the homes she’s selling; her for-sale signs include the code for buyers to use.

“I feel like this is going to appeal to the younger market that is already into texting,” Frank says. “It’s not threatening and it’s the kind of communication they like.”

That makes it not only a great way to get out information about her listings, but also a great way to get new clients. She includes the code on all her flyers and in her ads.

The cost: $15 per listing per month — much more reasonable, she says, than running a print ad.

“People just aren’t reading the paper as much and I want to take advantage of technologies that appeal to the younger, first time homebuyers,” she says. “I’m excited about this — I think it’s going to be great.” ®

David Lydiard, Realtor® RE/MAX Action Real Estate Glen Allen David Lydiard specializes in the Northside of Richmond, and he believes in grass-roots marketing for his listings — he focuses on very local advertising by featuring his homes in neighborhood newsletters and local community newspapers.

“In addition to advertising the client’s home, it garners the goodwill of the neighbors, helps fund the local civic association’s initiatives, and shows you recognize their area’s value,” he says.

Running ads locally also helps to get the word out through existing homeowners. And, he says, “There is nothing better than an existing homeowner telling a prospective buyer to check out a new listing.

That type of word of mouth marketing is priceless.”

VoluMe 16 ● ISSue 3

Jennifer Rathbun, Realtor® Coldwell Banker Elite, Massaponax Jennifer Rathbun gets her listings online, but in a very specific way. She spends about twelve hours on each listing, she says, posting it to a wide variety of sites. However, where she posts isn’t nearly as important as what she posts.

“I post virtual tours, pictures, information about the community, maps, whether the house has high-speed Internet, among other things,” she says. “I’m going to share all the information I can about my client’s home. I’m working as if I’m trying to tell a close personal friend everything I can about a home and its community.”

“It’s my job as the agent to get information about my listings out to the public in any way possible,” she says. “I’ve found that the print media is not effective today. I need to get the information out there so I can get my clients homes sold.”

Harmony Morris, Realtor® Abbitt Realty Company, Hampton Roads Harmony Morris has found that good, old fashioned word of mouth can be an extremely effective marketing tool. She canvases the neighbors around her listings and sends out handwritten cards promoting her sellers’ home.

“It’s reaching out and touching the people who live in the neighborhood that works,” she says. “you end up generating potential leads for the home that is for sale and also some leads [from neighbors] who may want to list their home.”

“

You just have to keep plugging along and realize nothing is a crazy idea.”

Morris also uses the Internet to promote her listings. She uses craigslist and Zillow, she creates virtual tours of her listings, and she puts flyers outside her listings with mortgage information on the back side. However, it is her personal one-on-one marketing that provides the most bang for her buck.

“Most everyone has dealt with a Realtor® sometime in their life,” says Morris. “when [neighbors] see that you do this stuff, they say ‘wow, my Realtor® never did stuff like that’.” with a background in new home sales, Morris says she is accustomed to working hard to promote the listings of her corporate employer. In her former career, “you could never do enough for the corporation.” now it’s that type of motivation that keeps her going. “you just have to keep plugging along and realize nothing is a crazy idea,” says Morris. ● May/june 2009 31

rpacreport

GOLDEN R INVESTORS ($5,000)

As of May 4, 2009, the following REALTORS® and local associations have joined RPAC of Virginia as Major Investors. For more information on the value of RPAC and how your investment works to protect your business, contact Meredith Cox at mcox@VARealtor.com or (804) 264-5033. Or, if you want to get invested today, please visit rpacofva.com.

GOLDEN R ASSOCIATION ($5,000) Fredericksburg Area Association of REALTORS®, Fredericksburg Northern Virginia Association of REALTORS®, Fairfax Richmond Association of REALTORS®, Richmond Roanoke Valley Association of REALTORS®, Roanoke Williamsburg Area Association of REALTORS®, Williamsburg * Hall of Famers have contributed a cumulative amount of at least $25,000 to RPAC.

CRYSTAL R INVESTORS ($2,500-$4,999)

Angela Dougherty William E. Wood & Associates Williamsburg

32 May/june 2009

Mike Minnery RE/MAX Allegiance Woodbridge

William Chorey Linda Belcher-Brown Coldwell Banker Chorey & Associates Realty Suffolk Residential Dedicated in the memory Manassas of Peggy B. Byrd

Dennis Cronk Poe & Cronk Real Estate Group Roanoke

John Dickinson Hall Associates Inc. Union Hall

Dorcas Helfant-Browning Coldwell Banker Professional Virginia Beach

Steve Hoover MKB, REALTORS® Roanoke

Thomas Jefferson, III* Joyner Fine Properties Richmond

John McEnearney McEnearney Associates, Inc. Alexandria

Stanley Palivoda Century 21 Battlefield – Tappahannock Dahlgren

Tom Stevens* Coldwell Banker Residential Vienna

Melanie Thompson Century 21 AdVenture Realty Fredericksburg

Jack Torza Long & Foster REALTORS® Mechanicsville

Jerry Bartlett Jobin Realty Alexandria

Bob Barton Barton Real Estate Services Richmond

STERLING R INVESTORS ($1,000–$2,499)

Julia Avent Re/Max Allegiance Arlington

Wayne Babb Re/Max Allegiance Alexandria

www.VARealtor.com

STERLING R INVESTORS ($1,000–$2,499)

Mary Ann Bendinelli Weichert Realtors® Manassas

Laura Benjamin Bob Blount Roanoke Valley Association Re/Max Allegiance of REALTORS® Virginia Beach Roanoke

Karen Bohlke Enriquez Re/Max Select Hampton

Michael Bosley Re/Max Allegiance Alexandria

R. Scott Brunner Virginia Association of REALTORS® Glen Allen

David Charron MRIS Rockville, MD

Benton Downer Callie Dalton Callie Dalton & Associates Downer & Associates Charlottesville Roanoke

Mary Dykstra RE/MAX Valley Realtors® Roanoke

Angela Eliopoulos Long & Foster Real Estate, Inc. Washington, DC

Sandee Ferebee Prudential Towne Realty Virginia Beach

Claire Forcier-Rowe Coldwell Banker Elite Fredericksburg

Libby Gatewood Legacy Properties Colonial Heights

Bill Gearhart Coldwell Banker Townside Roanoke

Charlee Gowin Prudential Towne Realty Virginia Beach

Kit Hale MKB, Realtors® Roanoke

Margaret Handley M.C. Handley, Ltd. McLean

Tom Innes RE/MAX Commonwealth Richmond

Pat Jensen Real Estate III - North Charlottesville

Jo Anne Johnson Westgate Realty Group, Inc. Falls Church

Betty Kingery Lake Realty Rocky Mount

Patricia Kline Avery Hess Realtors® Springfield

Luis Lama Long & Foster Real Estate Falls Church

Barbara Jean LeFon Rivah Realty Montross

Andy Mason Weichert Mason-Davis Company, Inc. Onancock

Kayvan Mehrbaksh Sperry Van Ness Vienna

Susan Mekenney Re/Max Allegiance Fairfax

Tom Meyer Condo 1, Inc. Falls Church

Gwen Pangle Long & Foster Real Estate, Inc. Sterling

Volume 16 ● Issue 3

May/june 2009 33

rpacreport STERLING R INVESTORS ($1,000–$2,499)

Tracy Pless Long & Foster Real Estate Reston

John Powell Long & Foster Real Estate, Inc. Colonial Heights

Jane Quill RE/MAx Presidential Fairfax

Anne Rector Long & Foster Real Estate Alexandria

Peter Rickert Coldwell Banker Residential Brokerage Alexandria

Zinta Rodgers-Rickert Re/Max Allegiance Fairfax

Henry Scholz Hall Associates Inc. Roanoke

Dee Spraker Keller Williams Realty Manassas

Cindy Stackhouse Century 21 Stackhouse & Associates Dumfries

Mack Strickland Strickland Realty Chester

Trish Szego ERA - Elite Group Realtors® Haymarket

Christine Todd Northern Virginia Association of Realtors® Fairfax

STERLING R ASSOCIATION ($1,000–$2,499) Greater Augusta Association of REALTORS®, Staunton Virginia Peninsula Association of REALTORS®, Hampton

Todd Wampler Wampler Realty, Inc. Daleville

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.

When you’re good to RPAC...

RPAC’s good to you Get invested today at www.RPACofVirginia.com 34 MAY/juNE 2009

www.VAREALTOR.COM

blogspotting

anDRew KantoR

Keeping our finger on the ever-quickening pulse of Virginia’s real estate blogging community Frank’s fleeting fame Frank Borges Llosa of Frankly Realty is back (we told you about his “Wheel Estate” video blog back in November), this time talking about the foreclosure moratorium.

Borges Llosa “Was the bank moratorium the reason for the steep decline in bank properties?” he muses while driving. Not knowing the answer, he calls an “expert” — CNBC’s Jim Cramer. (Fans of The Daily Show will remember Cramer being dragged over the coals by Jon Stewart in March.)

Cramer’s answer: No. Well, there’s a bit more — Frank has the video on his site, including a screenshot of Cramer with “Frank in Virginia” at the bottom of the screen.

Judging by the comments, Frank has plenty of fans — Jim Cramer, not so much.

“Cramer doesn’t understand housing, so I’ll take his bogus bottom-calling with the tiniest grain of salt,” wrote one person.

“I like how Cramer barely listens to your entire question before spouting off an answer,” points out another, adding, “I think his natural reaction is to just disagree.”

And one advises, “Congrats on getting through, but I wouldn’t consider Cramer anything more than entertainment.”

There’s an unexpected upside for Frank’s brief bit of CNBC fame: “I saw that last night, Googled you and found you,” wrote one visitor. “Nice blog.”

Shortcut: www.VARealtor.com/09051

Get the bank to pay? Really?

The upside to buying a foreclosed property (conventional wisdom says) is the great price you get. The downside (conventional wisdom also says) is that the property is sold as-is, meaning a buyer McGrath expects to pay for repairs — perhaps more than in a typical sale.

Not so fast, says Kevin McGrath on the RE/MAX Bravo Real Estate Blog.

36 May/june 2009

So let’s assume that … you are out there on a Saturday morning, and your home inspector gives you the report which lists some roof repairs and a couple of plumbing issues. now you are standing there thinking “oh man, this place is sold as-is, and now I have to pay for all of these repairs.” Maybe, but maybe not. Never hurts to ask, but how you ask

can be the key.

The bottom line, he says, is to get estimates and whatever other paperwork you need, and make it simple for the bank when you ask it for money: “If you go in with a reasonable request, well documented and uncomplicated, you never know what might happen, and you just might save a buck.”

Shortcut: www.VARealtor.com/09052

A bit of client perspective, Zebra style “when I say no I mean maybe, or maybe I mean yes.” —Holly Dunn, Maybe I Mean Yes. Rothamel

Or, as “Real Estate Zebra” Daniel Rothamel, put it, “‘I don’t want to be sold’ doesn’t mean ‘don’t sell me anything’.”

Instead, he writes, “I don’t want to be sold” usually means: I don’t want to be misled I don’t want to be lied to I don’t want to be steered

I don’t want you to care more about your commission than my needs.

What it definitely doesn’t mean is, “don’t sell me anything.”

In fact, he points out: we are always selling something to someone, and the fact of the matter is that folks expect and want us to sell to them. Sometimes we sell our service, sometimes

we sell our expertise, and sometimes we sell a home.

Shortcut: www.VARealtor.com/09053 www.VaRealtoR.coM

blogspotting How the other half works Heather Elias of LoCo Musings offers a peek inside her technology-enhanced, work-from-home space — “Where the magic happens,” as she put it.

If I’m not out on appointments, I’m here. My broker is only an e-mail or phone call away if I need him.

My processing manager and my graphic designer respond to my e-mails right away. I have a fax machine. and a coffee maker. (caffeine plays a big role in my productivity. just sayin’.) I even have a webcam so that I can video conference with clients as needed.

How is that working? Pretty well.

Since I’ve made the switch to working from here, I’m much more productive — [fewer] distractions means it’s easy for my clients to reach me and get a fast response.

It’s easier for me to focus on the properties I’m marketing, or the needs of the buyers I’m working with.

The bottom line “Have a closing on Friday,” she said.

“W00t! Having my best first half of year evah evah!”

Shortcut: www.VARealtor.com/09053 ●

38 May/june 2009

www.VaRealtoR.coM

varbuzzcontest HERE’S YOUR CHANCE to win a cool HD video camera just for reading this magazine and VARbuzz, our official blog and ‘water cooler.’

It works like this: Answer the questions below by reading this issue of Commonwealth. On June 30, go to www.

VARbuzz.com. There you’ll read simple instructions (e.g., “Take the first letter of each word to spell out the answer” or “What’s the opposite of answer #3?”). That will give you the final answer and instructions for sending it in.

We’ll take the first 20 entries with all the answers correct and draw one randomly. That winner gets a Flip Mino HD video camera.

Simple, huh?

Notes: This contest is only open to current members of the Virginia Association of REALTORS®.

Contest winners must skip two issues before they’re eligible to win again. All decisions about correct answers rest with VAR staff, and are final. Bribes are accepted but not acted upon.

This issue’s questions: 1. What is the four-letter acronym for NAR’s new health insurance program? (Quick Hits) 2. What man won a $100 ExxonMobil gas card and a $25 Starbucks gift card in our prize drawing? (Quick Hits) 3. What’s the name of the NAR leadership team’s blog?

(Accessible Tech) 4. What fictional musical did Scott Brunner suggest NPR’s fundraising was like? (Last Word) 5. What group is Victor Lund founding partner of?

(Cover story)

1.

2.

3.

of Real Estate

4.

: The Musical

5. The

Group

Remember: Hang onto this form until June 30, when you’ll get final instructions at www.VARbuzz.com and can fill in the…

FINAL ANSWER:

Last issue’s winner: Debbie Shickel of Bishop Realty in Staunton Last issue’s answers:

1. “Referee a Virginia State High School Basketball Tournament game” was goal number 5 for Daniel Rothamel.

2. Danita Jackson’s real estate career has been about 20 years long.

3. The electronic version of NAR’s 2008 Profile of Home Buyers and Sellers costs Realtors® 0 dollars.

4. Section 9 of RESPA prohibits a seller from forcing a buyer to use a particular settlement service provider.

5. Page number 25 was printed upside-down.

40 MAY/JUNE 2009

The instructions given on VARbuzz were to add the numbers (59), subtract 1 (58), take half of that (29), and turn to that page in the magazine. There you’ll see an ad for RE/MAX Allegiance. At the top are the words, “When you’re down and troubled; and you need a helping hand….”

You had to e-mail a picture of yourself holding up the answer to the question “What song does the phrase on top of the page come from?”

The final answer: “You’ve Got a Friend.” ●

WWW.VAREALTOR.COM

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, we’re available from 9:30 a.m. to 3:45 p.m. our phone number is (804)

our phone number is

(804) 264 -5033 For membership and dues questions ask for Kim Martin, Membership Records Manager kim@varealtor.com

For questions about professional standards and the Code of Ethics ask for Blake Hegeman, associate counsel blake@varealtor.com

If you’re a consumer or member of the media ask for lisa noon, Vice President of Member outreach lisa@varealtor.com

If you need to know about professional designations ask for lynne wherry, Specialties and chapter Manager lynne@varealtor.com

If you have comments or questions about Commonwealth or our Web sites ask for andrew Kantor, editor & Information Manager andrew@varealtor.com

If you’re interested in marketing or advertising opportunities

VAR Member Service Partners

ask for amanda Rainsford, Marketing Manager amanda@varealtor.com

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Advanced Access Internet Marketing & website Development DNCSolution, Do-not-call Solutions Security code Sc1795VR FBR Direct, Financial Planning Services

To reach our Legal Resources Center (formerly the Legal Hotline) call (800) 755-8271* *you must register first at www.varealtor.com — click Member Services

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Our CEO is Scott Brunner (804) 249-5712 scott@varealtor.com 42 May/june 2009

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To find out about conferences, seminars, and professional education ask for Glenda Puryear, conferences Specialist or lili Paulk, Director of education, glenda or lili @varealtor.com

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VAR 2009 Leadership Team

John Powell, GRI, ABR, CRB, CRS President long and Foster Real estate, colonial Heights (804) 520-5600 john.powell@longand foster.com Cindy Stackhouse, GRI President-elect century 21 Stackhouse and associates Prince william (703) 580-0880 c21cindys@aol.com John Dickinson, CCIM, GRI Vice President Hall associates, Inc., Roanoke (540) 982-0011 jrdickinson@cs.com John Daly treasurer GSH Real estate (757) 481-8461 jdaly@gsh.com Pat Jensen, ABR, CBR, CRS, GRI Immediate Past President Real estate III – north charlottesville (434) 817-9200 re3@esinet.net R. Scott Brunner, CAE chief executive officer (804) 264-5033 scott@varealtor.com

www.VaRealtoR.coM

lastword

Scott BRunneR

Driving Forces

Why a value proposition un-utilized isn’t much of a value proposition Here in ricHmond we recently wrapped up our three weeks of semiannual audio torture: the Public Radio fund drive, or “Drive Time,” as they call it, since it overlays the hours each day when most listeners like me are driving to or from work.

Driving me away is more like it — never mind that I’m actually one of my local station’s members (which is Public Radio’s name for that special category of folks who voluntarily send them money). Heck, I’d send them more money if only they’d find an alternative to Drive Time.

What a monumental waste of good radio waves, I say — having to listen to otherwise respectable (and respected) hosts reduced to shilling and shaming in order to pay the NPR light bill. For those three weeks, two times a year (that’s a total of six weeks annually, for you math savants), Public Radio is almost as worthless as commercial radio, and just as annoying.

This year they spent those three weeks begging, cajoling, pleading — repetitiously, monotonously, mindnumbingly — to raise $270,000. Like some kid wanting candy. Like an interminable, guilt-trip of a sermon.

Like Root Canal: the Musical. Like being stuck in an elevator with nothing but Theme from Ice Castles playing over and over on the Muzak.

Like…well, you get the idea.

And yet I love Public Radio.

Value it. Listen regularly. Devotee of Morning Edition and All Things Considered. Once, a few years ago, in a sublime moment of rapturous sensory overload, got to sit-in on the morning editorial meeting of the ATC staff at the NPR offices in D.C. Even 44 May/june 2009

met Linda Wertheimer and Robert Siegel. (Granted, they weren’t the Car Talk brothers, but still, sublime.)

Which is all to say: big fan here.

And of course I know our local network needs the money (“to continue bringing me the valuable news and information I’ve come to expect from NPR”). The “public” in Public Radio means they’re supported by folks like me, after all.

“

VaR calls you “member” for the very same reason Public Radio does: you send us money in return for something of value — services, information, protection, community.”

So why my annoyance?

Because with me they’re preaching to the choir. Because they’re so much better than that to which Drive Time reduces them. Because for three straight weeks they’re going on about how worthwhile they are while at the same time depriving me of much of the very service — great news and information — that makes them worthwhile (and that made me a fan) in the first place.

The trouble, of course, is not their value proposition; it’s their support and engagement model.

And on that point, it occurs to me that I may not have any right to cast stones. After all, VAR calls you “member” for the very same reason Public Radio does: You send us money in return for something

of value — services, information, protection, community.

The difference is that with Public Radio, many get the service whether or not they pay. With VAR, it seems many pay, whether or not they use (or are even aware of) our services.

It’s like 33,000 Realtors® walk into to Kroger, pay for a years’ worth of groceries, then a good two-thirds of them walk out empty-handed, not particularly concerned that they don’t know what they just bought and don’t plan to use it anyway.

And that is our challenge: how to get more of you to utilize even a fraction of all the worthwhile VAR stuff for which you pay dues.

How to communicate our value in a compelling way. Because there’s a lot to choose from: tools for brokers, stuff for agents, services for niche practitioners and rookies and specialists, tips for enduring down markets or dealing with short sales or (even) developing your exit strategy or … I’m starting to sound like one of those Public Radio Drive Time pitches, aren’t I? The point is, it’s all yours — an arsenal of great stuff to be incorporated into your real estate practice.

Use it, and sharpen your competitive advantage.

After all, a value proposition un-utilized isn’t much of a value proposition, is it? l Scott Brunner, CAE is VAR’s chief executive officer.

Contact him at scott@VARealtor.com.

www.VaRealtoR.coM