Smile! RealtoR® Day on the hill photo galleRy (p. 17) March/April 2009
A journal for real estate professionals published by the Virginia Association of REALTORS® • www.VARealtor.com
for a remade
Realtor
®
alSo inSiDe: Help Google find your Web site (p. 32) Realtors® evolve (p. 34) Win another HD camcorder (p. 40)
10231 Telegraph Road, Glen Allen, VA 23059-4578
ANDREW KANTOR
firstword
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. 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. Among them:
The online version of our print mag, 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.
SO I WAS at this meeting, see, and a guy comes up to me. He notices my badge, sees I work with Realtors®, and he says, “Tough business to be in, huh?” First of all, if one more person says that to me, all the Prozac® in the world isn’t going to stop me from smacking someone upside the head. Do these people really think they’re being clever? Or original? Is this the same guy who sidles up to a woman at a bar and uses the word “babe” somewhere in his first sentence? When his neighbor washes his car, does this guy yell, “Gonna do mine next? Ha ha!”? Neither would surprise me. Anyway, these thoughts flashed through my head as I kept what our sales manager Amanda calls a “conference face”: Smile, smile, smile. And then I saw his name tag. “I’d rather be me,” I replied, indicating his badge. He was from the National Automobile Dealers Association. Then, just because no one was there to stomp on my foot and shut me up, I said, “So, how’re those SUV sales doin’?” And I smiled. With teeth. The conversation didn’t last long. Changing the subject: You can bet our FSBO friends are all over this bit of data: According to NAR figures (reported in its 2008 Profile of Home Buyers and Sellers) people who sell their own homes sell them more quickly and are more likely to get their asking price — or better. Looking only at FSBO cases where the seller and buyer did not know each other, NAR found that the median sale price of a FSBO home was 97 percent of the asking price, compared to 96 percent when
a real estate agent was involved. On a $150,000 home, having an agent looks like it actually costs owners $1,000, not to mention that $9,000 (six percent) commission. Then there’s time on market: With FSBOs it’s a median of six weeks; with an agent, it’s 10 weeks. Maybe that’s because FSBO sellers don’t set the price high enough. Still, the point is the same: You need to show your clients that you’re doing $9,000 or $10,000 worth of work for them. And that means bringing more to the table than an MLS listing and a lockbox key.
“
If you want to survive, you have to be more than a salesperson.” Face the music, folks: With all the tools the Internet makes available, FSBO can begin to look like a viable option. And that’s why we’ve been pounding home the message: If you want to survive, you have to be more than a salesperson. That’s why our cover story is about making yourself better — about what you need to know and what you have to bring to the party. Your competition is growing, and if you don’t keep a step ahead — well, think about these two words: travel agents. ●
Andrew Kantor, Editor andrew @VARealtor.com
MARCH/APRIL 2009
1
MARCH/APRIL 2009 VoLuMe 16 ● Issue 2
contents
departments 4 quickhits The latest news and tidbits from around Virginia.
8 legallines Lem Marshall answers reader’s questions about the law.
12 stickysituations A member of VREB answers some frequently asked questions.
14 formfactor Inspections: What’s the buyer entitled to, anyway?
34 realtycheck See how some Realtors® are evolving with the times.
38 blogspotting What’s the buzz in the Realtor® blogosphere?
in every issue features 1 firstword 36 rpacreport 40 varbuzzcontest 42 contactvar 44 lastword
2
MARCH/APRIL 2009
22
Recipe for a remade Realtor®
17
Legislative Conference Recap
32
Finders Keepers
Forget all the generic advice about changing with the times, or “get to know the neighborhood better.” Here are the concrete things you need to do if you want to keep your job.
The Legislative & Education Conference was a big hit — especially Realtors® Day on the Hill. Check out this photo spread.
A Web site that no one can find isn’t much use. And crafting it so Google takes notice isn’t rocket science. Here’s how. www.VAReALtoR.CoM
quickhits
ANDRew KANtoR
[Virginia Homeowners Alliance]
She’s got gas! (And a Wii) we told you there were prizes. we told you there were cool prizes. Some of you listened. Brenda Fisher of Hampton Roads had 61 entries in the Virginia Homeowners Alliance prize drawing — that means she signed up more than 300 homeowners for the Alliance (remember, five signups gets you one entry). She took home three prizes: a $500 gas card, an iPod, and a Nintendo wii. Carl Manasco also took home a wii, and Deborah Lesyshyn scored an iPod; the following folks also got either
$500 or $250 gas cards: Nick Calvert, Gary Dogan, Kathy Edwards, Karen Halpin, Ladawn Knicely, Keith Kreuer, Jason Meeks, Jennifer Sowers, Mike Vest, and Mary Ann White. (Gary Dogan told us he sent out more than 200 cards to his clients on one day. Clearly some of them registered.) Your name not on the list? Sheesh, all you have to do is get your clients to fill out their contact info on a card.
Get cracking! Order a free set of cards at www.varealtor.com/vHa.
[Legislative Affairs]
Meet your connection to Congress Some folks have the ear of their federal representative or senator, and NAR has a special job for them: Federal Political Coordinator. FPCs’ job is to stay in touch with a member of Congress and act as informal lobbyists for NAR, while also reporting back to the mother ship via “field reports” on what’s going on in the minds of Congressmen and –women.
Virginia of course has its share. And here they are: Rep. Rob wittman (R-VA-1): Barbara LeFon: Rep. Glenn Nye (D-VA-2): Jay Mitchell Rep. Bobby Scott (D-VA-3): Chandra Patterson Rep. Randy Forbes (R-VA-4): Karen Gaskins Rep. tom Perriello (D-VA-5): Michael Guthrie Rep. Bob Goodlatte (R-VA-6): Dennis Cronk Rep. eric Cantor (R-VA-7): Dewey Reynolds Rep. Jim Moran (D-VA-8): tracy Pless Rep. Rick Boucher (D-VA-9): Dana Spraker Rep. Frank wolf (R-VA-10): Gwen Pangle Rep. Gerry Connolly (D-VA-11): Jane Quill Sen. Mark warner (D): tracy Pless (temp.)
[NAR Programs]
Free goodies from NAR
NAR is working to make as many things available to as many Realtors® as possible — it’s a tough time for a lot of people. One of the newest initiatives: Right Tools, Right Now, where publications, resources, and services are being made available free (or at a much lower cost), including hundreds of products related to events, technology, research, education, and more. Check out www.rEaLTOr.org/righttools to see what’s up for grabs. [Regulation]
VREB newsletter quietly appears the Virginia Real estate Board has stopped distributing its newsletter by mail — electronic or otherwise. So you may not have seen the winter edition, although it’s on VReB’s web site as a PDF file. You could learn “How to Upgrade from a Salesperson to a Broker License by exam” and received the “Virginia Residential Landlord tenant Act Annual Interest Rate Schedule” — and of course check out the latest list of disciplinary actions to see who showed "Failure to exercise ordinary Care" and who’s guilty of “Unworthiness & Incompetence.” Get it via the VARbuzz Go Word: www.varbuzz.com/go/vrEB. www.VAReALtoR.CoM
[Commercial Real estate]
Glum outlook for commercial Realtors® [Housing economy]
FannieMae: You don’t need to lower your commission Short-sale lenders have been known to refuse to approve a contract unless the listing agent lowers her commission — a practice that, naturally, we’ve not fond of. (VAR’s Lem Marshall counsels to refuse to agree, because the lender will most likely yield when pressed.) FannieMae was one of the offenders. The key word is “was.” Effective March 1, Fannie changed its guidelines: So long as the total
commission doesn’t exceed six percent, closings “may not be conditioned upon a reduction of the total commission to be paid to real estate agents to a level below what was negotiated by the listing agent with the borrower.” At press time there had been no similar announcement from FreddieMac, but we’re hopeful. Check varbuzz.com for updates.
Commercial Realtors® shouldn’t plan any expensive vacations in 2009. According to the usually upbeat Lawrence Yun, NAR’s chief economist,
“
The credit crunch has especially hammered down some components of NAR’s commercial leading indicator.”
[education]
GRI: Better, stronger, faster It’s the Graduate Realtor Institute, and it’s new and improved for 2009. And we’re not just talking cosmetics. We've rebuilt the entire GRI curriculum from the ground up, with the latest information, rewritten and revamped courses, and a whole new attitude. The statistics don't lie: Having a designation can literally double your income as a real estate professional. And the new GRI — at www.VARealtor.com/GRI — is a perfect step.
[Member outreach]
VAR speakers at your disposal
Looking for a speaker for your brokerage, local association, or conference? Have we got a deal for you: The VAR Member Outreach Program. Basically, VAR staff experts on a number of subjects are available, free of charge, to give presentations on a list of subjects dear (or at least near) to Realtors®’ hearts, from professional standards and NRDS training to using social media to increase client contact.
VoLUMe 16 l ISSUe 2
We can participate in a retreat with a whole crowd, or give a conference-call presentation to a small group. Whatever works for you. (We also give annual orientation for new association executives.) Give a shout to Lisa Noon, our vice president for Member Outreach (lisa@VAR ealtor.com or (804) 2495717); or Carole Umbel, director of Member Services (carole@VAR ealtor.com or (804) 249-5716).
MARCH/APRIL 2009
5
quickhits [ JustSell.com Sales tip]
Money hours when you consider the complete value of a customer to you and your team — the lifetime value — the importance of having a sense of "selling urgency" should skyrocket. every money hour* not invested in sales activities can delay (or eliminate) potential revenue. And it can go far beyond the dollars made with the initial sale. Depending upon what you sell, you may also have... • Upgrade revenue — revenue derived from future upgrades. • Renewal revenue — revenue derived from future renewals. • Cross-selling revenue — dollars generated from selling additional products/ services to a customer. • Expansion revenue — dollars generated from potential organization or group growth and/or implementation of your product/service across an entire organization from one department. • Advocate revenue — revenue derived from sales influenced by word-of-mouth advertising.
• Lock-out revenue—dollars generated from a customer over time because of the perceived hassles associated with switching to your competition. Remember, the first to acquire the customer tends to retain the customer — and with retention comes lifetime value. Continually remind yourself and your team of the importance of having a constant “selling urgency.” Commit to it and make sure the next 10 customers (or more) in your industry become your lifetime customers. *Money hours: the hours in a sales day where you can talk with prospects and customers — the most valuable hours of the day
[Housing economy]
NAR: We like what Obama is doing NAR expressed its support of President Barack Obama's broad focus on the nation's economic recovery, especially for its emphasis on housing stability, including “restarting lending” and preventing foreclosures. “We fully agree with President Obama's emphasis that housing is the backbone of our national economy," said NAR president Charles McMillan. "When a family buys a home, workers are hired to build it. Those workers spend money and open businesses. As a result, investors return. In short, housing is the key to revitalizing America and we pledge to work with him to help jump start our economy." [Housing economy]
NAR: We don’t like what Obama wants to do Inside the budget President obama sent to Congress is a change to one of NAR’s sacred cows: the mortgage-interest deduction, or MID. Not surprisingly, the organization isn’t happy — and is fighting against it. the Administration’s plan calls for a much smaller MID for couples earning more than $250,000 or individuals earning more than $200,000. According to NAR, reducing the MID “will set of a new round of price depreciation, will cause greater distress on the balance sheets of banks as the collateral value of mortgage backed securities declines.” warned NAR, “A second credit crisis could emerge before the first one is resolved.” Although the next tax bill probably won’t be written until the fall, NAR is continuing its campaign to preserve the full mortgage interest deduction for everyone.
6
MARCH/APRIL 2009
[Virginia Homeowners Alliance]
VHA Ads debut we’re pulling out all the stops to spread the word about the Virginia Homeowners Alliance — in this case, with a set of eight videos that you might not think actually came out of VAR. But they have – they’re the eight new ads we’ve created for the Virginia Homeowners Alliance to, um, demonstrate the importance of having a good reason to get in touch with your clients. Check them out
at www.varealtor.com/vha. We think you’ll be surprised. l
www.VAReALtoR.CoM
legallines
LeM MARSHALL, VAR SPeCIAL CounSeL
Just say NO to stupid contracts I don’t know about you, but I find it hard to contemplate the trillions of dollars we hear about these days, and most of us still have had trouble imaging billions. But there’s still a place where a million is meaningful, and that’s when I tote up the number of hotline inquiries I’ve received regarding foreclosures, short sales, bankruptcies, and related matters.
Fannie blinks
Q.
Isn’t it about time?
A. Absolutely. Fannie Mae, the nation’s largest mortgage holder, announced recently that effective March 1, 2009, the approval and closing of short sales will not be conditioned on the listing firm being willing to alter its fee arrangement with the borrower, as long as the total commission does not exceed six percent. Since September of 2007, I have been urging Realtors simply to refuse to agree to reduce their commissions when “demanded” by lenders, on the grounds that (i) it is inequitable to take advantage of the listing agent and seller’s precarious position in this way, (ii) that the lender has no legal right to require that the Realtor make changes to the listing agreement with the seller, and especially (iii) that the lender will yield if the listing firm simply refuses to alter its agreement with the seller. It now appears Fannie Mae has heard the plea of Realtors and their counsel in adopting this new guideline. We will await the decision of Freddie Mac and other mortgage holders as to whether they will join Fannie in ending this counterproductive practice, but until all have joined in, my advice is the same: when the “demand” comes, just say no, and insist on the fee you have earned.
Three. No, two and half. No, three.
Q.
In a short sale, the listing firm made an offer in the MLS of three percent to the selling firm. the lender later would permit only five percent total commission, and the selling firm changed the MLS offer to 2.5 percent. Before the change was made, buyer agent brought an offer that was in counter when the change in the MLS was made. the offer resulted shortly thereafter in a ratified contract contingent on lender approval. How much is owed?
A. The best thing about the new Fannie Mae guideline is that I won’t have to undergo the kind of brain damage this question promises. But just for kicks, here goes. 8
MARCH/APRIL 2009
Assuming the buyer’s agent is going to insist on what his contract with the listing firm entitles him to — and the listing firm and lender be hanged — I believe the selling firm is entitled to the amount offered when it accepted the offer, in this case three percent. The fact the purchase agreement had not yet been ratified was not critical, because the essential service leading to the sale had been performed. I fully support the buyer agent’s actions in insisting on his due here, and wish more listing agents would stiffen up the old lumbar region. The cynic says the wages of sin are unreported, but the wages of this kind of sin are nonetheless high. When fees are cut this way, listing and selling agents alike become demoralized in dealing with these sales, multiple listing services find themselves perverted (permitting listing agents to offer co-broke fees of “one half of the amount paid by the lender,” for example), and this beneficial alternative to the foreclosure is too often avoided. But until all lenders are as enlightened as Fannie Mae, let’s all just say no when we are asked to give our services away to the lender. By the way, this is the only time I will ever use the words “Fannie Mae” and “enlightened” in the same hemisphere. Many calls deal with basics of contract formation. The next two are typical.
That’s just the way it is
Q.
Listing agent for the owner of Reo receives an offer, transmits it (typically electronically) to the bank, and receives the word that the bank will accept the offer. this message is transmitted to the selling agent. Shortly thereafter, the selling agent is presented with a lengthy addendum from the bank, which has now stopped accepting new offers, although the property is not shown as “pending” in the MLS. Is this proper behavior by bank and listing agent?
A. I’m not sure if it’s proper in every way, but it is utterly typical of many lenders. Such routines are generally for the administrative ease of the lender, who might have many thousands of foreclosures on the market. Freddie Mac, for instance, will not look at new, even better, offers once it is in counter with a buyer. For the lender’s staff, it would be unmanageable to learn and apply the different laws of the fifty states to determine www.VAReALtoR.CoM
whether in any given situation an offer in negotiation has been accepted, or even to try to track and coordinate the actions of the listing agent in dealing simultaneously with multiple offers. The rule of “one at a time” might seem hidebound, but it makes life manageable. Of course, the listing agent will not show the property as pending until a contract is fully ratified, and that will often require execution of the bank’s addendum.
“
A buyer agent should not lead a buyer to think that just because the outline of the economic deal is approved by the lender that the day is won. Keep expectations in line with reality, and move aggressively to full ratification.” Once we understand this, we can adapt. A buyer agent should not lead a buyer to think that just because the outline of the economic deal is approved by the lender that the day is won. Keep expectations in line with reality, and move aggressively to full ratification. For those making “better” offers, understand that better is a relative term, and be aware of the administrative limits on the listing agent and loan servicer in these circumstances. Stay focused, and stay realistic.
By any other name
Q.
An Reo listing identifies the seller as “owner of Record.” Buyer adds a provision to the offer by which seller promises to identify the legal owner at the time of ratification and to provide all appropriate corporate authority and signatory capacity at that time. Seller refuses to agree to this provision. How should the buyer proceed when the owner is unidentified?
A. Believe it or not, many listing agents — indeed, many loan servicers and loss mitigation personnel — do not know the identity of the owner of the property, even after foreclosure has occurred. One reason for this is that lenders might have more than one affiliated real estate holding company into which they might have dropped this asset. It is often only when a deal is imminent that the lender’s agents find out what entity owns the property. VoLuMe 16 ● ISSue 2
At any rate, by preparing an offer without the owner’s name, the buyer has merely shifted the ordinary sequence from one in which the buyer makes the initial offer to one in which the seller makes the first offer that can be accepted. Seller’s counter — the offer coming back that contains the seller’s name — can then be accepted or form the basis for further negotiation, and this should not alarm or discommode us terribly. The preceding discussion shows that often we have much more to do after the economic outlines of a deal have been agreed on, so some delay in identifying the owner should not be of critical importance. We are all finding the need to adapt to the many new things we are learning in these most stressful times, so we do well to limit our angst to those things we can do something about. By the way, one of the most interesting things I have learned lately is that in 2008 Toyota lost money for the first time since its founding in the 1930s. This means that Toyota made money in 1945. We dropped two atomic bombs on them that summer! All I can say is they must have had a great first quarter.
Stupid is as stupid does
Q.
Listing broker lists Reo. Her husband is buying the property through another brokerage firm with which the listing broker has a concurrent broker’s license. How should the couple go about this transaction?
A. Scarcely a soul reading this article can be unaware of my belief that Realtors® engage in far too many conflicts of interest. In fact, urging restraint and caution where conflicts are concerned is one of my most common themes. When I hear of behavior like this, in spite of my frequent pleas to avoid such conflicts, I become increasingly convinced that many Realtors® are afflicted with the attention deficit disorder known as A.D.L.A.S. (Attention deficit — look, a squirrel!). Here is our listing agent, representing the seller, about to engage in dealings with her husband through a firm at which she is an associate broker, thus making her the legal agent of her husband. The only thing that could make this set of conflicts more perfect would be if the seller were a divorcing couple. She needs to get the selling firm out of the deal; I can’t see how it can work otherwise. Then she needs either to MARCH/APRIL 2009
9
legallines appoint a new listing agent or give written notice of the conflict to the bank and obtain the bank’s written consent. On the bright side, this bank probably owns this property because it made a loan to borrowers with no money down, lousy credit, inadequate income and assets they didn’t have to document, and at an adjustable interest rate they could not afford when it reset. By comparison, having your listing agent married to and the agent of the buyer, with allegiances split not just between clients but between firms, is a step toward sanity, so the bank probably won’t mind. But we should avoid it just for the sake of fiduciary hygiene.
Don’t let the door hit you on the way out
Q.
A bank is foreclosing on a property occupied by tenants. (heartless creeps) what rights do the tenants have in the foreclosure proceedings? (none) will the bank or other purchaser at the auction be obligated to honor the lease? (no) If the owner is a real estate licensee and Realtor, will this action by the owner constitute regulatory or ethics violations? (doubtful)
A. The (subliminal) message here is that Tenant’s rights in the case of foreclosure depend entirely on whether the lease is subordinated to the lien of the foreclosed deed of trust or other interest. This will usually be a function of when the lease went into effect in relation to when the deed of trust was recorded. (Stop calling and emailing me.) If the lease went into effect after the deed of trust or was subordinated to it, the foreclosure of the deed of trust will extinguish the leasehold estate, and the lender will take title free and clear of the lease. If the lease was in place at the time of the deed of trust, or if the deed of trust was subordinated to the lease (both unlikely in the residential context), foreclosure will not disturb the lease, and the tenant will look to the new owner as its landlord. On the bright side, having financial problems is not a regulatory or ethical violation, although that case might be made if the owner knew at the time the lease was entered into that it could not be performed. (Send me all your money.)
More and more agents are resorting to property management outside the firm to supplement their income in these difficult times. The next two questions explore this theme and some related issues.
As the escrow flies
Q.
Agent Susie, a salesperson, forms Susie Q Inc., licenses it with her firm as a business entity salesperson, and receives commission payments through the entity. Recently, Susie has begun to do property management. Susie 10 MARCH/APRIL 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 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
does all her leasing through the firm and Susie Q Inc. However, she does the actual management (collecting rents, supervising maintenance and repairs, handling move-in and move-out questions and tenant complaints, etc.) outside the firm in Susie Q Property Management, an unlicensed entity. All security deposits and rental escrows are handled by SQPM, whose sole owner and manager is Susie. Broker is wary of this arrangement, calls DPoR in the exercise of his due diligence, and is told that the firm must hold all escrows in the firm’s escrow accounts. Is this correct? Are Susie’s actions legal?
companies. This will inevitably drag the firm into complaints and suits over the management company’s dealings and shortcomings. My recommendation is that firms permit this type of arrangement only after careful evaluation and consultation with counsel if necessary. In all events, it must be clear that no leasing is to be done in the unlicensed entity. Be very careful with this one, brokers.
A. Decide how you would answer this before reading on. No, I really mean it. Here’s how I see it. First, leasing is a licensed activity, and must be done through a licensed firm (including a broker sole proprietorship). Management, however, is not a licensed activity. In the residential world these two activities are commonly joined in what we call “property management,” while in the commercial world leasing and management are routinely performed separately by entities that do one but not the other. Management companies that do no leasing or other brokerage are generally not licensed. So Susie can do the management in SQPM. But what about the escrows? Well, many folks don’t realize it, but Virginia law does not require escrows to be held by licensed brokerage firms just because a brokerage firm might be involved directly or indirectly in the deal. The security deposit can be held by the landlord, an escrow company, a bank, an attorney, a brokerage firm, or any number of other entities, or just about any person the parties agree on. Now, if a brokerage firm holds money in escrow, it must hold it and disbursed it in accordance with the REB’s regulations and other relevant law (VRLTA, for example), just as an attorney must abide by bar rules governing attorney escrow accounts. So SQPM can hold the security deposits in escrow, as I read the law, if landlord and tenant so agree. Because Susie is a licensee, and because all licensees must abide by REB regs even in dealings outside their brokerage firms, I suggest SQPM meet the REB’s regs regarding escrow. But if it does, I see no legal impediment to the arrangement. There is, however, a large practical impediment, and this impediment afflicts property management generally when done by an agent outside the brokerage firm. If anything goes wrong, and the agent has not been scrupulous in her dealings, the brokerage firm will be tarred by the client’s inevitable coupling of the two
It seems that many lenders are requiring the use of affiliated service providers (especially title companies or settlement agents) as a condition of entertaining an offer for Reo. Is this legal?
VoLuMe 16 ● ISSue 2
Unsettling settlements
Q.
A. Absolutely not. Section 9 of RESPA makes clear that a seller may not condition the sale of a property on the buyer’s agreement to use seller’s affiliated settlement service provider. The seller may give an incentive to the use of the service provider, but may not require it. I am hearing reports that HUD and others in fact do require such use, if only through the sotto voce method of having the listing agent let the selling agent know that the offer will go to the bottom of the pile if it does not contain such a promise. The American Land Title Association has accused HUD, in a letter to the Federal Housing Commissioner, of violating RESPA by directing title and closing services involving HUD-owned properties. You should remember that neither HUD nor any other seller may require such use. We’ll watch to see what effect these complaints ultimately have. Teddy Roosevelt asked Attorney General Philander Chase Knox for a defense of his unsavory seizure of the Panama Canal zone. “Oh, Mr. President,” he replied, “do not let so great an achievement suffer from any taint of legality.” I wish sometimes the folks at HUD and other lenders would at least have the courage to speak as honestly as Knox did. ● 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.
MARCH/APRIL 2009 11
stickysituations
SCHAefeR ogLeSby
How not to get bitten by VREB As A speAker on the Uniform Statewide Building Maintenance Code (who’s also serving on the Virginia Building Code Review Board and the Virginia Real Estate Board), I come across a lot of the same issues time and again, despite my and others’ best efforts to spread the word. Until more Realtors® and other professionals get the law, these things will continue to crop up. So let’s look at a few. Again.
Building code issues The Department of Housing and Community Development comes up with suggestions for changes to the Uniform Statewide Building Code (USBC), then tries to convince legislators to put those changes in the next revision of the code. For the most part, it has worked very well. But not always.
It also says that “…the owner of any unit which is rented or leased, at the beginning of each tenancy and at least annually thereafter, shall furnish the tenant with a certificate that all required smoke detectors are present, have been inspected, and are in good working order.” So let’s be clear: The Code of Virginia says you must inspect smoke detectors at the initial lease signing and then annually, and give the tenant a certificate (which you leave in the rental unit). If you put a fresh battery in the detector at occupancy, and then annually, I think you meet the intent of the code and are covered. The tenant is responsible for the detectors between inspections, but if the tenant notifies you of a defective detector, you have five days to correct it. (On the other hand, if the battery has been stolen to be used in Junior’s radio-controlled car, we go back against the tenant — it’s a $2500 building code violation for tampering with a smoke detector.) Fresh batteries and a certificate every year — it’s simple and easy, and it protects you from liability.
Retrofit
“
The Code of Virginia says you must inspect smoke detectors at the initial lease signing and then annually, and give the tenant a certificate (which you leave in the rental unit).”
An important aspect of Virginia’s building code is that it has no retrofit requirement — even if a lot of code officials don’t like to hear that. If you’re installing a new water heater or a new 200amp electrical service — or even changing from fuses to breakers — there is no requirement to meet the current code. The building needs to be maintained only according to the code under which it was built. In fact, if you’re replacing an electric water heater, you don’t even have to get a permit. To avoid that kind of misinformation, arm yourself with a copy of the Virginia USBC Maintenance Code, and a companion copy of the International Property Maintenance Code (which has certain provisions incorporated by reference into the USBC). VAR’s Career Development folks can help you get these.
Security deposits For example, smoke detector requirements are found in the Code of Virginia (§15.2-922, if you’re keeping track), not the USBC. And to keep it confusing, the Code says that smoke detectors need to be installed “in conformance with the provisions of the Uniform Statewide Building Code.” 12 MARCH/APRIL 2009
You, as a landlord or managing agent, cannot enter into an agreement in which you and the tenant agree that you won’t pay interest to the tenant on his security deposit. On the other hand, it’s moot. The Code of Virginia says the security deposit must “Accrue interest at an annual rate equal to four percentage points below the www.VAReALtoR.CoM
Federal Reserve Board discount rate as of January 1 of each year.” The discount rate on January 1, 2009 was half a percent, so the interest rate you have to pay, for the time being, is zero.
Agents, brokers, rentals One of new issues we are seeing at VREB are sales licensees acting outside of their relationship with their principal broker; they’re renting and managing houses on their own. This usually seems to happen when the seller is not living in the house, and when the house has been on the market for a while. If you find yourself in that situation, it must run through your broker. And be sure to review your management agreements annually. There’s a provision that sets a limit on expenditures without prior approval, and it can become outdated. (Hint: If the amount is something like “50 pieces of eight,” it’s old.) You need to be sure that the limit is high enough to cover most routine situations. While the VREB regs don’t specifically address this issue, we have had complaints that have gotten the licensee in trouble.
Escrow account balances The VREB requires that you must maintain sufficient funds in your account so that no single account is ever in the red. This usually occurs when a rent check bounces after a disbursement has been made to the owner. I personally solved that problem in my company by having a provision in my management agreement which allows me to retain one months rent in escrow. If you are audited by the VREB and you happen to have it occur, you could, and probably would, face an escrow violation on this. ● Schaefer Oglesby is a property manager in Lynchburg and a member of the Virginia Real Estate Board.
Got questions about VREB or the Uniform Statewide Building Maintenance Code? Visit dpor.virginia.gov or call (804) 367-8526.
VoLUMe 16 ● ISSUe 2
MARCH/APRIL 2009 13
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. 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 600: Residential Contract of Purchase
Form 600 Section 14: Equipment Condition and Inspection The purpose of this provision is not to ensure that any particular items are working, but to assure the buyer that he is getting what the contract entitles him to get. The VAR provision sets out the following formula: A buyer accepts the property as it is at the time of contract (subject to what other provisions are contained in that contract). He’s also entitled to get the property at closing no worse than at the time of contract, except for ordinary wear and tear. If the contract contained a home inspection contingency, the walkthrough is to assure the buyer that things are as they should be according to the home inspection and resulting negotiations. (This might mean that buyer has accepted some defects in systems and appliances in return for more important repairs, or simply because the buyer agreed to waive any objection to the defects.) 14 MARCH/APRIL 2009
The property is to be no worse than it was at the time of the parties’ agreement resulting from the inspection — that is, there can be no damage or defects not present at the time of inspection, and (if applicable) all the agreed repairs must have been made in a satisfactory manner. And if the buyer did not object to an existing condition during the inspection, he cannot raise it at walkthrough. If there was no home inspection contingency, the seller must deliver the property in no worse condition than at contract, and with basic systems and appliances in working order. And in every case remember that all utilities must be on during all inspections, and the property must be in broomclean condition at settlement.
WWW.VAREALTOR.COM
Form 600 Section 17: Residential Contract of Purchase and Form 600D (Home Inspection Addendum) If a buyer negotiates an inspection contingency, there are four steps to the process: 1. He has to inspect the property with a qualified inspector within a set time, report the results to the seller or agent, and request repairs. (All buyer rights are limited to material problems — the kinds of things that might affect the decision of reasonable purchaser to purchase the home.) 2. The seller has a certain time to respond. 3. If the seller will not agree to remedy all the material problems, the parties have a certain time to negotiate an acceptable solution. 4. If they can’t reach a solution, the buyer has a short
VOLUME 16 ● ISSUE 2
period to decide whether he is willing to accept the property with whatever repairs the seller offers. If not, he can terminate the contract. The contingency provides standard language requiring repairs to be done by licensed contractors (unless the buyer agrees otherwise), and it provides for a credit in lieu of repairs. The buyer can’t terminate the contract unless he and the seller are unable to come to an agreement about those material-defect repairs. Further, the contract doesn’t put a cap on the seller’s obligations, although it does contain a negotiable cap on how much the seller has to spend on fixing title, well, septic, and walkthrough items. ●
MARCH/APRIL 2009 15
Live the Code. Lead the Industry.
“If you question the value of a good reputation, try building a business without one.” Suzy Stone REALTOR ®, Fredericksburg, Virginia
Your reputation is your most valuable asset. Without a good reputation, you cannot hope to advance your career. Of course, you build your reputation by your actions, so understanding and living the REALTOR® Code of Ethics is the surest way to be successful in this business. Open the Code and you really will close more deals. To see how the Code can improve your business, visit www.codeisgoodbusiness.com Earn more business and CE credits to boot. Find out how at www.codeisgoodbusiness.com/va/lessons
Legislative & Education ConfEREnCE
The 2009 Legislative & Education Conference was a huge success, thanks to great weather, more than 600 attendees, and some of the best speakers and classes we’ve had in years. Led by Chip Dicks (our legislative counsel) and Martin Johnson (our legislative consultant), Realtors® had their day on the hill, pouring into the offices on Capitol Square to let our elected official know what’s important to us. The perfect weather made it easy to move between education sessions and the Capitol.
Planning the attack
Chip Dicks prepares a group for their visits
Tom Duckett was one team leader helping to herd Realtors速
Del. David Toscano (VA-57) briefs a group of Realtors速 during Day on the Hill
Day on the Hill
[legislators ] Meeting with
Del. Kirk Cox (VA-66) looks over a list of legislative priorities, watched over by Bobby fisher of Colonial Heights.
Mack Strickland of Southside talks with Del. Rosalyn Dance (VA-63)
Suzy Stone and Melanie Thompson of fredericksburg confer outside Speaker Howell’s office
Working and networking
Speaker of the House William Howell speaks to a group of fredricksburg RealtorsÂŽ Kit Hale takes a moment to chat with members
Local association presidents had a chance to meet, too
Conference Speakers Mary Dykstra, Roanoke
Angela Dougherty, Williamsburg Mary Dykstra, Angela Dougherty, and nan Piland (Willamsburg; bottom) explained the power of RPAC
Ralph Cantrell, just-retired CEo of the Richmond Association of REALToRS®
We have a winner — lots, in fact Clary
Jasmund
one of the most fun parts of the Legislative & Education Conference is the giving of awards to a list of folks who have gone above and beyond. This year there are a-plenty. Inducted into the Virginia Realtor® Hall of Fame: Jean Clary, CRB, GRI, Century 21 Clary and Associates, Colonial Heights; Betty Jasmund, CRB, GRI, Coldwell Banker Elite, fredericksburg; Dick nelms, GRI, Long and foster, Richmond
nelms
Lama
Dogan
Winner of the VHDA Service to Virginia Award: Luis Lama, Long and foster, falls Church Winner of the Code of Ethics Leadership Award: Gary Dogan, H.B. Hodges, Jr., Roanoke The Ann Swearingen Property Manager of the Year: Gladys fain, Prudential Towne Realty, Virginia Beach
fain
Wilson
Trainor
Winner of the CRS of the Year Award: Beth Wilson, RE/MAX Valley Realtors®, Roanoke And the Virginia Manager of the Year: Karen Trainor, Weichert Realtors®, fairfax
Congrats to all! 20 MARCH/APRIL 2009
for a remade
Realtor
®
by Andrew Kantor
IF YOU WANT to
keep your Realtor® job, you may have to change how you do things. Some of your fellow agents already have. They’ll probably still be in business in five years. How about you? Being a successful Realtor® is not what it used to be. No longer are you a gatekeeper of the holy MLS. No longer are you the person any buyer or seller must turn to. Thanks to the likes of Trulia, Zillow, Craigslist, and a host of other online tools, they don’t need you anymore. Or they don’t think they do. You need to show them otherwise. You need to change your image from being a salesperson to being — and get used to this phrase — trusted advisors.
22 MARCH/APRIL 2009
23
It’s important, unless, that is, you want to go the way of travel agents. Remember them? (For you kids, that’s what people used to use before Expedia, Travelocity, and their kin. You actually called or sat down with a human being to plan a trip. It was free, too.) There are still travel agents around, but not many — and you can bet the ones still in business are the good ones. Keep that in mind. No one is saying that FSBOs are going to take over the market, or that some legal decision will open MLSs to the teeming millions, or that Craigslist will do to real estate what it did to newspaper classifieds. The future, by definition, is unpredictable — but chances are you’ve thought about FSBOs and the MLS and Craigslist at some point. You should. Trusted advisor. That means a few things. It means being the person that your clients turn to with questions about real estate, neighborhoods, even the housing economy (and their friends and neighbors too: your future clients). People have lawyers and accountants, and they turn to those people with legal or financial questions. They build a relationship, and the professionals build a client base because of it. So when we talk about becoming a trusted advisor, we mean that your clients should start think of you as “My Realtor,” even if they aren’t thinking of buying or selling property. A Realtor® isn’t just a salesperson. A Realtor® is a licensed, accredited community expert. Got it? Because if you want to survive the coming changes, you need to drill that idea into your head. You need to be that professional. You need to be thought of as a trusted advisor. You need the right knowledge under your belt.
Ingredients First, let’s cover the basic of what you need to know. Here’s your shopping list: • Product knowledge • Process knowledge • Market knowledge • Finance knowledge Yes, there’s more (see the sidebar “Know your client”), but these are the foundation for establishing your street cred as a knowledgeable source, assuming that we don’t need to tell you about the absolute basic of providing common courtesies — returning phone calls, showing up on time, being friendly and professional. So what do we mean by those things? 24 MARCH/APRIL 2009
Product knowledge. When you step into a home or onto a property, you need to know exactly what you’re looking at. How long will those roof shingles last? Will that water heater be enough for a family of four? Is there an advantage to slate floors or cedar shingles? What’s LEED? Does EnergyStar matter? How will those type of trees affect drainage? Potential buyers are going to have these questions, and the more you can answer (especially off the top of your head), the better. Anyone can say, “I’ll Google that for you.” A professional already knows. Process knowledge. You need to know how a person goes about buying or selling a property. What paperwork needs to be filed, when an inspector should be called in (and what kinds are necessary), how to deal with issues that crop up. Are there new disclosure rules a client needs to know? You need to know them first. (California, for example, requires sellers to disclose whether a death occurred on the property within the past three years.) Neighborhood knowledge. Location, location, location, right? Well, you need to know all about it. Is there a home- or property owners association? What kinds of rules does it have? How are the schools? What’s the crime rate? Is it a dog-friendly block? What’s within walking distance? What’s in the 5or 20-year development plan? Where is the closest grocery store? (And you need to know what not to say, lest you bump into the business end of a fair housing violation.) Finance knowledge. Hoo, boy, is this important these days. You need to be up to date — and we mean really up to date — not only on mortgage rates, but on what kinds of new programs are available, what financing options can save your clients money, and what rules might impact them. This stuff seems to change daily. Ups and downs of FHA loans, federal and state services, the impact of credit history, maybe even the right mortgage lender — knowing these things is an easy way to put your clients at ease and make the sale simpler. Sound like a pretty big list? It’s work, for sure; that’s why you get paid to do it. And remember that this isn’t 2005. Selling property isn’t as easy these days, and being an effective Realtor® requires more work than it used to — but it needn’t be overwhelming. A journey of a thousand miles begins with a single step, right? So does becoming the real estate know-it-all. WWW.VAREALTOR.COM
We obviously can’t tell you about every resource that’s out there — the list is huge and constantly changing. But we can give you some solid starting points (and be as specific as possible).
Product knowledge. Get ready to hit the books. Literally. But don’t just run to the publications rack at Lowe’s — let’s take a more methodical approach. Start by selecting a handful of property listings, whether they’re yours or some you pull from the MLS or other Web sites. As you read them, make note of the things that pique your interest, and the things that other Realtors® call out — anything from countertop material, to appliance brands, to an unusual garage door opener. You’re using the knowledge of your peers; if someone else thought the water re-circulator was worth mentioning, you should know why. You should end up with a list of items both specific (e.g., “linoleum”) and general (e.g., “insulation”) to learn about — a starting point of specific, real-world items. It’s much more practical to go through a list rather than overwhelming yourself trying to learn everything about everything. List in hand, build your knowledge one bit at a time. Pick an item, rev up your favorite Internet search engine, and give yourself an overview of why it’s important. Entering the words roofing shingle comparison for example, will yield a wonderful list from professional sources that will explain the pros and cons of metal, slate, and fiberglass. Print or save the must useful stuff. You can organize your information by room (carpet info under “Living room,” for example), or with categories like “Materials,” “Appliances,” “Structure,” “Outside,” etc. If you’re über-organized, make a three-ring binder with dividers echoing your organization strategy. Then you can add the notes you find to the appropriate section, building a personalized reference book by hitting Print whenever you come across something worth saving. Get organized: Prefer holding a print Separate things by room or function magazine in your hands? VOLUME 16 ● ISSUE 2
There are at least three worth checking out: Builder magazine (at www.builderonline.com), Consumer Reports (www.consumerreports.org), and Remodeling (www. remodeling.hw.net). Subscriptions will keep you up to date, and back issues — either from the library or the Net — are great for research. Prefer the more personal kind of interaction? Head on down to your local hardware store. Whether it’s a big box place or the small local shop, you’ll find knowledgeable people. Ask about shingle types or water heaters or driveway material. Those folks know a lot, and especially in the smaller stores they’ll be happy to share it with you. You’ll also find a pretty good selection of books and magazines worth perusing. No matter how you prefer to gather your information, the important thing is to be systematic about it. That narrows your focus and gives you clear steps (as opposed to “Step 1: Learn everything”). After that initial self-schooling — which could take days or even a couple of weeks — you’ll want to keep your knowledge up to date as new technology emerges. Does it matter if a home is wired for Ethernet? What do you know about synthetic-lumber decks? Or artificial lawns? After all, you don’t want to be the one saying, “Here’s a cutting-edge feature: a second phone line for your modem!”
Process knowledge. You already know the basics of real estate transactions. Now you need to fill the gaps for those times things don’t quite go by the book (and brush up on the things that may not come up a lot). Some things, like the Code of Ethics, you should know off the top of your head. But for other topics it’s OK to have resources at your fingertips instead. That way if a client asks a question or considers a course of action, you’re able to advise him, encourage him, or warn him. It may seem obvious, but let’s say it anyway: Going to school is a good idea. Really. You could simply pick some interesting classes at your local association, VAR, or a real estate school. The good folks at the Virginia Real Estate Board maintain lists of approved schools, CE classes, post-license courses and more at VARbuzz.com/go/schoollist. You might also look at any group representing your specialty — commercial Realtors® can turn to CCIM (www.ccim.com), for example. (The good thing is that it’s 2009, so you’ve got a long list of online classes to choose from, too. Just be wary, MARCH/APRIL 2009
25
Making it happen
Knowing your clients Product and process is one thing, but knowing who’s buying and selling it is another altogether. “Client knowledge” doesn’t simply mean having a profile of a particular buyer or seller. It means knowing the trends that are affecting the clients you may be getting. Are boomers becoming interested in ranches because there are no stairs? Is Generation X moving to more urban environments? Who might be most interested in a home’s green features, or its proximity to bike trails? In other words: Who’s buying, who’s selling, and what do they want? Of course, if you knew those answers definitively you’d be sipping a drink on a beach somewhere. Knowing how clients think can be an art, but there’s a lot of science, too. Well, math — as in statistics. You can get a feel for what buyers like by looking at what their neighbors and peers prefer. But don’t just go by gut (“I think people want smaller homes because of the whole mortgage mess”) or anecdote (“I know a few Realtors® who said that everyone wants a ranch”). Get the facts, too. NAR’s 2008 Profile of Home Buyers and Sellers is probably the best resource around. The electronic version is free to VAR members at VARbuzz.com/go/2008profile — you just need your NRDS ID. If you prefer to have it in print it’s $25 for members.
What might you glean from it? Here are some samples: • The median income was $60,600 among first-time buyers and $88,200 among repeat buyers. • Eighty-seven percent of all home buyers used the Internet to search for homes. In fact, for a third them, going online is the first step in the process. • Fewer first-time buyers are financing the entire purchase price of a home — only about a third in 2008, down from 45 percent in 2007. • Single women make up about a quarter of first-time home buyers; single men about half that. • Simply “desire to own a home” was the primary reason for a purchase in more than a third of sales, beating out every other reason by a large margin. That includes “Jobrelated relocation or move,” “Desire for larger home,” and “Change in family situation.” • But… for those buyers 65 and older, the primary reason by far was “Desire to be closer to family/friends/relatives.” • And… forget touting the financial angle. “Financial security” or “tax benefits” were given as a reason only one percent of the time.
26 MARCH/APRIL 2009
and make sure they’re coming from reputable organizations. Anyone, after all, can slap up a Web site.) Besides keeping up with CE, consider working towards a certification or designation. There are a couple of reasons. First, it gives you a clear course of study (as opposed to just “learn a lot”). Even better, if you go all the way and get those letters after your name, it pays off: Realtors® with certifications make double the money than those who don’t have them. Really. Don’t feel like taking a formal class? Well, as Matt Damon said in Good Will Hunting, you can teach yourself a lot “for a dollar fifty in late charges at the public library.” In this case, without even the buck-fifty. Both NAR and VAR have online libraries with a lot of good reading in bite-sized pieces. One of the best places to start is VAR’s Legal Resources Center (www.VARealtor.com/legalresources). Click on “Hotline Answers Archive” to read our legal team’s Q&As on a long list of subjects, from Advertising to Contracts to Fraud to Tax Issues. And the questions come from VAR members, so they’re as real and relevant as you can get. (Sample: A week before closing, a buyer’s agent discovers that the tank is leased from the gas company and that the sellers are in arrears on their gas payments. The company is threatening to dig up the tank. What advice should the agent give?) Over at NAR there’s also a tremendous library of good reading called “Field Guides” covering every topic you can imagine, and then some: VARbuzz.com/go/fieldguides. And, of course, you should simply keep up with the news: reading Commonwealth and Realtor® magazines for starters, your daily news e-mail, and also the trade press. You should know them — Inman News (www. inman.com), Real Trends (www.realtrends.com), and Realty Times (www.realtytimes.com), for starters. Finally, don’t skip your broker’s sales meetings. Really.
Neighborhood knowledge. You could learn about your neighborhood from the comfort of your den or office, but that pales in comparison to being there. Devote an evening to putting together your neighborhood knowledge — a cheat sheet about schools, shopping, driving, subdivisions, and everything else your clients might ask about a home’s location, location, location. Here’s how. Start by picking a few of your listings in the areas you focus on. Grab a camera (even the one on your phone will do), a pen and paper, then hop in your WWW.VAREALTOR.COM
car and take a drive. Starting at or near each listing you pulled, drive the neighborhood, especially the routes to parks and commercial areas. The moment you see something interesting — something that a potential buyer might have a question about (school, restaurant, construction, mall, etc.) — take a picture of it. Yes, take a picture. Don’t rely on your memory or a hastily scribbled note. A photo is the easiest way to remember all these “landmarks,” not to mention that you might see things in the photos that you missed in person. And take some notes to go with those images, too. You want to drive a lot. You might stumble upon hidden gems — playgrounds or parks, ice cream shops, a shortcut to the highway. Then head home with a memory card full of images. Now stop. Before you go much further, you need to create an organization system. It doesn’t matter if it’s paper or electronic, ultra-neat or just scraps of paper tossed into file folders. Whatever works, but something. Using that system, divide your working area into convenient geographic regions, then create a folder/section/bag for each. Now that you have a place to sort your info, it’s time to gather some of the more specific, quantifiable data about those neighborhoods to combine with what you found on your ad hoc tour. Start with the two things that top most people’s lists: crime rates and school quality. Write down the name of every school in the area you cover — and don’t forget the private schools and preschools. Now it’s time to hit the Web again. There are two Web sites worth bookmarking for school information: GreatSchools (www.greatschools.net) and Private School Review (www.privateschoolreview.com). Between them, you’ll get everything you need to know about any school in the country. You don’t need to memorize everything, but it’s good to know at least the gist of each one — test scores, teacherstudent ratio, and, in the case of private schools, what kind it is: Montessori, Waldorf, Reggio Amelia, one aimed at status seekers, etc. That way you can help steer clients to a convenient neighborhood that suits their needs. File the school info in the appropriate place in your system. That way, when you’re dealing with a property in North Central (or whatever) you can quickly pull up (or pull out) everything you need. Crime rate is the other Big Thing on many homebuyers’ minds, but here you have to be careful of fair-housing law. Your best bet is to be “the source of the source.” That is, don’t tell your clients that “This area has the VOLUME 16 ● ISSUE 2
“
Save your notes in whatever system you’ve created. (Suggestion: Marking up a map works really well, too.) Congratulations. With a bit of driving and some online legwork, you’re well on your way to becoming a neighborhood expert.
second-lowest property-crime rate in the state,” even if it’s true. Instead, point them to HomeFair.com’s City Profile Reports (VARbuzz.com/go/cityprofiles) where they can enter a ZIP Code and get a pile of demographic info including personal- and property-crime risk compared to the state and the country. With schools and crime out of the way, it’s time to get back to those pictures you took. You don’t need to print them out if you want to save the ink — their purpose is to tickle your memory, not adorn a photo album. You want to look at them, check any notes you made, and create a list of Things to Investigate — stores, restaurants, parks, whatever — divided by region. List in hand, it’s back to the Net or your local map — or even your friends and neighbors — to remove the mystery. Check out restaurant reviews, look for news stories, or just ask around. Fill in those knowledge gaps. Is that a great-but-unknown Italian place? Is there an annual neighborhood party in that park? Is that a quick shortcut to the main shopping drag? Save your notes in whatever system you’ve created. (Suggestion: Marking up a map works really well, too.) Congratulations. With a bit of driving and some online legwork, you’re well on your way to becoming a neighborhood expert. You should also keep an ear out about public policy changes that affect neighborhoods or cities. Knowing where there’s a Wal-Mart being considered, or a change to the zoning regulations, or transportation plans in MARCH/APRIL 2009 27
the works could be helpful information for a client. That’s one reason we’ve been pushing the Virginia Homeowners Alliance (www.VARealtor.com/VHA) — it’s a great place to keep up with that kind of information. (Take it one step further. NAR has about a dozen Field Guides focusing on property values: VARbuzz.com/ go/propertyvalues. They’ll help you put your information into perspective — e.g., how that new golf course will affect home prices.)
Finance knowledge. Money talks, and you need to talk that talk. That means not offering a client last month’s information about rates or programs. You’ll want to keep up with things like the parts of the American Recovery and Reinvestment Tax Act of 2009 that affect homeowners. ($8,000 tax credit, anyone?) And you need to know the details of President Obama’s mortgage relief plan — the “Making Home Affordable” program — and whatever else comes down the pike. Your clients will want you to, and pretty soon they’ll expect you to. Start by creating an account (it’s free) at Mortgage News Daily (www.mortgagenewsdaily.com). The site strikes a balance between professionally-created content and information from users who, among other things, vote on the newsworthiness of each story — an easy way to zero in on the important stuff. You can even sign up for free daily e-mail alerts. Absolutely don’t miss bookmarking the Virginia Housing Development Authority’s page (www.vhda.com). It’s a onestop shop for what’s available for buyers, sellers, and renters. Another great site for keeping up with what’s happening is, surprisingly enough, Quicken Loans (www.quickenloans.com/ mortgage-news). It should be a daily stop for the latest info not just about mortgage rates, but about what Congress and the administration are planning, what banks are doing, and what might affect the lending marketplace. The bottom line is this: It’s powerful stuff to be able to tell a client, “There’s a new program starting next month that I think you can qualify for.” That makes you an expert, and that’s what will help ensure your future. Finally, for general reading on the real estate economy, three sites worth bookmarking are CNN’s and the Wall Street Journal’s real estate sections (money.cnn.com/realestate and www.wsj.com/realestate) along with HousingWire (www.housingwire.com). A few hours a week is all it really takes to build up your expertise. And don’t forget to talk to the person who probably has some expertise of his own: your broker. Ask questions, take advice, and learn from experience. 28 MARCH/APRIL 2009
Quick Internet tip If you find yourself visiting a lot of sites at once — say, first thing in the morning, you can save yourself some clicks. Make sure you’re using an up-to-date (and free!) Web browser like Firefox (getfirefox.com) or Internet Explorer version 7 or later (microsoft.com/ie). They offer “tabbed browsing,” where multiple pages can be open at once. Not only that, you can tell your browser to open them all at once when you start up: First open each of your must-read pages in tabs. Then: • In Firefox: Click Tools, Options, and the Main button, then “Use Current Pages.” • In Internet Explorer: Click Tools, Internet Options, and the General tab, then “Use Current.” Now every time you start, all your most important pages will be waiting. Even better, many of these sites offer “feeds” — continually updated lists of their newest content — using a technology called Real Simple Syndication (RSS). You can subscribe to your favorite sites, then use a “feed reader” to get a list of their latest articles. You can then pick and choose which to read. The Firefox browser has a built-in feed reader. You can also use the popular Google Reader (reader.google. com), and there are tons more — Web sites, standalone programs, add-ons for Microsoft Outlook or your Web browser, and more. There’s a handy list of them at varbuzz.com/go/rss, or you can use your favorite search engine to look for “RSS feed readers.”
Technology changes things — it always has. And it’s changing the real estate business in a big way. So you need to change with it. You need to go from making buggy whips to making fan belts. You need to abandon the idea that your job is “to help people buy and sell property” and move on to a career that’s about “serving my clients’ real estate needs.” Go forth and conquer. ●
Don't just sit there — comment Join the discussion about this article on VARbuzz: VARbuzz.com/Recipe WWW.VAREALTOR.COM
LEGISLATIVE REPORT CARD
WORKING TO PROTECT Realtor® rights in the legislature is one of VAR’s most important jobs. Each year we have a specific and detailed legislative agenda. We work with lawmakers to introduce bills, and we fight in support of (or in opposition to) proposed laws. And, of course, we keep track of our successes. This year, working with legislators, we introduced bills on eight issues on behalf of Virginia’s Realtors®. Seven of them passed and were signed into law by the governor; the eighth passed but in a very different form than we wanted — we’ll reintroduce it next session in a form that will benefit Realtors®. All these new laws will take effect July 1 unless otherwise indicated.
SENATE BILL 1031: Commercial real estate referrals Allows Virginia real estate agents to pay commissions to other states’ licensees who bring buyers or tenants into Virginia for commercial transactions. The goal is to encourage and facilitate cross-border transactions in the commercial field. Passed both houses unanimously; signed into law.
HOUSE BILL 2541: Mandatory background checks for real estate license applicants Requires mandatory criminal background checks for real estate license applicants. Passed both houses unanimously; signed into law. 30 MARCH/APRIL 2009
HOUSE BILL 1680: Vested rights Some local governments have interpreted the vested rights law passed last year so as to exempt fire damage. This legislation specifically includes fire damage in the vested rights statutes. Passed the House 97-1 and the Senate unanimously; signed into law.
HOUSE BILL 1785: Virginia Property Owners’ Association Act amendments In 2008, VAR spearheaded major reforms of the POA Act. The only issue VAR sought to amend in 2009 deals specifically with properties that are sold at auction. Such properties would be exempt from the provisions regarding POA disclosure packets. Passed both houses unanimously; signed into law.
SENATE BILL 997/HOUSE BILL 1724: Secondary signatures when towing cars State law allows a local government to require a secondary signature prior to any towing. That often means the property manager, who must be contacted whenever the towing company is working — such as at 2 a.m. — to authorize a tow. This bill allows localities to designate their police officers (or other agents) as secondary signatories for towings, making life a little easier for those property managers. Both bills passed both houses nearly unanimously and were signed into law. WWW.VAREALTOR.COM
AM E T E V I T A L S I OUR LEG John “Chip” Dicks Legislative Counsel
SENATE BILL 1276 / HOUSE BILL 1788: Alternative septic systems Several local Realtor® associations contacted VAR over the past year regarding actions by local governments to ban alternative septic systems. These (identical) bills clarify that local governments cannot ban alternative septic systems without express authorization by the General Assembly. Passed both houses and signed by the governor after approval of his amendments. Effective March 1, 2010.
Martin Johnson Legislative Consultant
HOUSE BILL 2040: Compensation of attorneys for real estate referrals This bill clarifies that an attorney is not entitled to receive compensation merely for referring clients to real estate firms, unless that attorney is also licensed by the Virginia Real Estate Board as a real estate broker or salesperson. Passed both houses almost unanimously; signed into law.
John Broadway Vice President for Law and Policy
SENATE BILL 1157 / HOUSE BILL 2135: Changing the way recordation and grantor taxes are calculated The grantor-tax fight is ongoing — we’re fighting to keep it from going up. Higher taxes can hurt home sales, but localities like the idea of taking in more money. Both bills passed, but the final versions were only a shadow of the original ones we introduced. No harm was done, but we’ll reintroduce our legislation next year. (Both bills passed the House and Senate and were signed by into law.) ●
Meredith Cox Director of Political Communications
When you’re good to RPAC...
RPAC’s good to you Get invested today at www.RPACofVirginia.com VOLUME 16 ● ISSUE 2
MARCH/APRIL 2009 31
by Andrew Kantor
Finders Keepers Want your clients — and potential clients — to find your Web site? Optimize the thing.
If you have a Web presence — a company site, a blog, even just a page — chances are you want it to be found. You want people who are searching for a particular kind of content (say, “homes in Richmond”) to come to you. In other words, you want your site to show up high in a search engine’s list of results: the higher the better. Getting your site (or even a page) found by Google, Yahoo, and their ilk requires search engine optimization, or SEO. It’s about making your Web pages look good to readers, and convincing search engines that it’s important. It’s part science, it’s part art, but it’s not all that hard.
The content itself The text on a Web page, obviously, tells search engines what it’s about. Once upon a time, site owners would try to trick search engines by putting huge blocks of keywords and phrases on a page (“realtor realtor realtor…”). It didn’t take long for search-engine makers to catch on, and doing “keyword stuffing” today is more likely to hurt your rating than help it. In fact, if it sees too much hidden content on a page “Google considers those links and pages deceptive and may ignore your site.” That’s straight from the company’s guidelines for webmasters. So what does work? Key phrases. Pick a couple of important terms — the terms you’re hoping people will look for. Then sprinkle them in the text of the page, but don’t go crazy. In a longer article try to include them every two or three paragraphs, tops. In shorter pieces maybe once or twice, total. Google-friendly headlines. Every Web page has a title (it’s what shows up in the top of your browser), and many begin with a headline as well. Make both of these clear, meaningful, and related to the content. 32 MARCH/APRIL 2009
Got an article on mortgage rates? Don’t call it “Down They Go.” That’s cute, but useless out of context. Instead, use “Mortgage Rates: Going Down.” That not only includes an important key word (mortgage), but a human being instantly knows what it’s about. Avoid fluff. Search engines read text. If your pages have Flash animations, JavaScript, and other fancy things, that not only reduces what search engines can see, it may even prevent them from reading the page properly. That’s not to say eliminate those things, but take it easy. these people are doing someUse smart image thing right — their sites are at names. Your camera the top of a Google search on spits out files with names Virginia real estate. like “IMG_0246.jpg” or “DSC_1734.jpg.” Useless. Change them to something understandable — better yet, use those keywords again: “John_Doe_Mortgage_Banker.jpg”
Links, in and out The basic fact: The number of links to a Web page is the most important way a search engine determines its importance. More links, more value. But there are caveats. The more important the site linking to yours is, the more important your site appears. A link from an authoritative source — e.g., CNN, Wikipedia, Yahoo — is worth a lot more than one from your cousin Jimmy’s blog. www.VAReALtoR.CoM
Knowing this, some folks have tried to game the system by, for example, creating thousands of dummy Web pages called “link farms” whose sole purpose is to link to their clients’ sites. Or more simply, they pay bloggers to post links. Problem: Once a search engine determines that those incoming links are from link farms or desperate bloggers, it discounts them or holds them against you. The better tactic is to get good pages to link to yours, including your own. So do some (smart) linking. First of all, make sure you have internal links — connections between pages of your site. That way, as your site grows in importance (and it will, right?) it starts an upward spiral as your own links become more valuable. With outgoing links, their quality reflects on you. Point readers to a bad online neighborhood and you’re considered part of it. Point them to a popular and high-ranking site and you increase your street, er, Web cred. That doesn’t mean slapping up links to every major news source and Fortune 500 company. Context counts. If you have a link to a USA Today story about the mortgage economy but your page is about horseback riding, Google will notice this (really) and lower the value of that link … and of your page. Get inbound links. This isn’t always easy, but it’s a surefire way to improve your ranking. Get other Web sites — good ones! — to link to you. Have a blog or know someone who does? There’s a link. Know someone at a university who teaches real estate courses? There’s another. Buddies with the webmaster at WalMart? You get the idea. Remember that quality counts. One link from CNN is worth 20 from a Z-list blogger. And if you can get links from .edu and .gov domains, rejoice; those are pure gold; they’re not likely to be spam sites or link farms. Finally, be realistic. Your site is one among billions. You’re competing for visitors with hundreds of Virginia real estate pros and thousands of financial experts. You probably won’t be making Google’s top-10 list. But with a bit of work and re-work, you can easily and significantly make it easier for people to find you. And that should mean a lot. ●
Further reading General seo tips from seo Chat: www.seochat.com sitemap information: www.sitemaps.org
VoLuMe 16 ● Issue 2
Talk to your webmaster Besides the content of your pages, there are some important things to do on the back end. these fall into the realm of the geek, so if you’re not your own webmaster just hand over this page and tell her “do this stuff.” Use meta tags. You can’t write about seo without mentioning it these. every web page can contain what are called “meta tags” — hidden code that describes the page. Meta tags can give a page its title, they can give a short description, and they can provide a list of keywords for search engines. Make sure to take advantage of them. Those keywords are crucial. Besides the obvious — the topic of the page — make sure to include synonyms. Financing, money, cash, investment, mortgage, lien, debt… you get the picture. And toss in common misspellings, too, e.g., “morgage.” Give your links titles. A link from your web site to another page only needs to include the address of that other page. But you can also give your links titles that describes what it’s linking to. to risk too much geekiness, here’s an example: <a href=”http://www.whatever.com” title=”Detailed info about the bailout”> that links to whatever.com, and it tells search engines what the link is about. It’s yet another way to tell the search engines what your page is about. Make friendly URLs. some web addresses (uRLs, or uniform resource locators) are simple and human readable; others are complex. simple is better. Good content management systems (the software that runs your web site) allows you to choose the format of your web pages’ uRLs or “permalinks.” For example, a page on VAR’s VARbuzz blog might have the uRL varbuzz.com/housing-starts-up. that’s a lot better than what you find on some sites: whatever.com/?p=174 or, worse, whatever.com/Home/tabid/36/ctl/Details/mid/487/ ItemID/455/Default.aspx. (those are both real examples; the actual sites have been changed to avoid embarrassment.) shorter, simpler uRLs are easier for your visitors to remember, and search engines will understand the words in them. And “housing” beats “/ctl/Details/mid/487.” Use Sitemap. Your webmaster can include a file on your site — and send it in to all the major search engines — that essentially lists all its pages along with some information about them. Called a sitemap, it’s supported by all the major search engines, and it makes the process of “crawling” your site (going through each page to see what’s on it) easier for them. It’s especially important if you site has a lot of graphics and animations — things a search engine can’t understand.
MARCH/APRIL 2009 33
realtycheck
GARY DUDA
The question: How are you adapting your real estate business in this market to be more valuable for your clients? As the economy changes,
Craig Via, Broker
so do Realtors® and brokers
Craig Via Realty & Relocation Midlothian
— the smart ones, anyway. they find new tools and new angles, they come up with new ideas, and they change. they adapt. they have to. easy to say, harder to do. we sent Gary Duda, broker and owner at Re/MAX Action Real estate in Glen Allen, to find out some of the things those adaptive professionals are doing to evolve in the latest New economy. Here’s what he found out.
extra vigilance. that’s the extra value Craig Via sells his clients — something even more important in a tough market. Via says he is doing many things to ensure his transactions close and that his sellers are positioned well in the market. Via says he actually sets himself up as a prospect in his MLS so that he is notified of all new listings that compete against his listings. “I literally go out and preview the home whether have a buyer or not because I want to know how it competes with my sellers listing,” he says. “It’s all about being able to compete and stay on top of my competition.” Via also does updated market analysis
Tom Donegan, Broker RE/MAX Premier, Fairfax Tom Donegan isn’t waiting for the market to turn around. He’s already retooling his whole company. “We’re not sitting back and waiting to see what happens,” he says. “We actually have some things of value that we can bring to the community. It’s going to help us weather the storm and who knows — maybe make some money.” Connecting with the community is also high on his list. That’s why he held an evening wine and cheese event where he invited some local potential real estate investors to learn about what his company can offer. Donegan is also requiring all his agents get their accreditation to deal with distressed and foreclosed properties, and he’s working to get his agents up to speed on using
34 MARCH/APRIL 2009
on his listings every two weeks, which he says lets him suggest price changes to his clients that will help their homes sell. “even in today’s market, it’s still the first 30-45 days that are important to a seller’s chances of succeeding,” he explains. “If we miss that opportunity to price the house correctly, we might have missed the opportunity to sell the house.” Via also investigates lenders who are involved in his transactions to make sure his contracts are sound and have the best chance of closing on time. He uses a web site called the Mortgage Lender Implode-o-Meter (ml-implode.com) to see if a particular lender is going out of business or is at risk of failing. (Via does this for lenders involved with his listings, and for the underlying transactions as well.) “It doesn’t matter if we get a buyer for your house that is well qualified if they can’t get a loan,” says Via.
the Internet to make connections with the right people. “We will be learning the latest tips on LinkedIn, Twitter, Facebook, and Plaxo, and how these networks tie into today’s prospecting systems,” he says. “Real estate has always been a local business, but today, thanks to the Internet, it’s a local business with a global reach.”
“
Hey, you can despair if you want, but there are others things we can do.” Donegan says having a plan on how to make things better in a down market will not only help his agents survive the current market, but thrive when the market recovers. “Hey, you can despair if you want, but there are others things we can do,” Donegan says.
www.VAReALtoR.CoM
Navona Hart, Broker Real Living Cornerstone, Farmville “My biggest concern is the missed opportunities,” says Navona Hart. “I’ve never worked so hard and so long at any point in my life.”
“
I’ve never worked so hard and so long at any point in my life.” So she’s focused on training. She requires her agents to attend training seminars each week to go over things like contracts, sales, handling objections, and especially finance — knowing what loan products are available,
and who can provide the best loans for buyers. She also spends at least an hour a week on finance training herself, not to mention talking to lenders to stay on top of changes in lending. It’s paying off, she says. “We are actually helping buyers find better loan products. And all of our sellers know that we are on top of things.” More to the point, half of Hart’s agents actually have better sales than last year. So while things might be slow, Hart believes focusing on increasing the professionalism and knowledge of her group is ultimately good for everyone. “When the market is hot, we all tend to get sloppy in our practices,” says Hart. “When you have an opportunity in a slower market to get educated it will ultimately benefit the consumer.”
Joyce Strother Dirting, Realtor® Prudential Carruthers Realtors, Winchester In the real estate world of Joyce Strother Dirting, staying the course is the secret to good client service. Dirting says she is taking advantage of the slower market to add to her résumé (even looking to get her ABR), but what makes her valuable to her clients is the work ethic that has served her through her entire real estate career — one that’s spanned many years and four states. “Sometimes you can have all the credentials in the world but it doesn’t mean a lot to clients if it doesn’t help them,” she says. “When you’re actually working one-on-one with a client, you have to know their needs and follow their leads and follow up on what they are asking.” The most important thing she does to help her clients? Being responsive. “I’m very quick to return phone calls and to follow up on what my clients ask,” she says. “I’m also quick to follow up with e-mails because many clients view that as the same as a phone call.” Dirting also stays on top of what’s happening in her community, in part by routinely attending board meetings. She also attends her local Realtor® association’s monthly meetings covering commercial real estate. The goal is knowledge of both the area she serves and her clients’ interests.
Danita Jackson Associate Broker Long and Foster, Richmond After a 20-year successful real estate career, Danita Jackson says she keeps herself valuable by maintaining a watchful eye on changes in the market and staying true to the basics of the business. “You always move with the market,” says Jackson. “If you don’t, you’re not an asset to your client. And in this real estate business the market is going to change every day.” But not only does Jackson stay on top of changes, she also makes sure to pass that knowledge on to her clients — educating her sellers weekly. “If you have a seller who doesn’t understand the market, you have a seller who won’t sell their house,” she says. And despite the ups and downs of real estate, Jackson stays focused on the basic skills she was taught many years ago: good communication, being able to discuss mortgages and qualify clients, and pricing homes properly. That doesn’t means she’s resting on her laurels. Jackson reads industry news, and she attends training sessions whenever possible to keep her skills sharp and learn new things. One recent session taught her how to teach first-time home buyers. And while that’s a skill she has always had, Jackson admits that a little education for the agent is always good. “It’s the basic stuff,” she says, “that helps people achieve their goals.” l
Volume 16 ● Issue 2 MARCH/APRIL 2009 35
rpacreport
GOLDEN R INVESTORS ($5,000)
As of februAry 26, 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.
William Chorey Linda Belcher-Brown Coldwell Banker Chorey & Associates Realty Suffolk Residential Dedicated in the memory Manassas
Dennis Cronk Poe & Cronk Real Estate Group Roanoke
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
Mary Ann Bendinelli Weichert Realtors® Manassas
Bob Blount RE/MAx Allegiance Virginia Beach
Karen Bohlke Enriquez RE/MAx Select Hampton
of Peggy B. Byrd
GOLDEN R ASSOCIATION ($5,000) Fredericksburg Area Association of REALTORS®, Fredericksburg Roanoke Valley Association of REALTORS®, Roanoke
*Hall of Famers have contributed a cumulative amount of at least $25,000 to RPAC. STERLING R INVESTORS ($1,000–$2,499)
Julia Avent RE/MAx Allegiance Arlington
36 MARCH/APRIL 2009
Wayne Babb RE/MAx Allegiance Alexandria
Michael Bosley RE/MAx Allegiance Alexandria
www.VAREALTOR.COM
STERLING R INVESTORS ($1,000–$2,499)
David Charron MRIS Rockville, MD
John Dickinson Hall Associates Inc. Union Hall
Mary Dykstra RE/MAX Valley Realtors® Roanoke
Angela Eliopoulos Long & Foster Real Estate, Inc. Washington, DC
Libby Gatewood Legacy Properties Colonial Heights
Kit Hale MKB, Realtors® Roanoke
Margaret Handley M.C. Handley, Ltd. McLean
Pat Jensen Real Estate III - North Charlottesville
Jo Anne Johnson Westgate Realty Group, Inc. Falls Church
Patricia Kline Avery Hess Realtors® Springfield
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
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
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
R. Scott Brunner Virginia Association of REALTORS® Glen Allen
STERLING R ASSOCIATION ($1,000–$2,499) Greater Augusta Association of REALTORS®, Staunton Contributions are not deductible for income tax purposes. Contributions to RPAC are voluntary and are used for political purposes. The amount suggested is merely a guideline and you may contribute more or less than the suggested amount. You may refuse to contribute without reprisal and the National Association of Realtors® or any of its state associations or local boards will not favor or disfavor any member because of the amount contributed. 70% of each contribution is used by your state PAC to support state and local political candidates. Until your state PAC reaches its RPAC goal 30% is sent to National RPAC to support federal candidates and is charged against your limits.
Volume 16 ● Issue 2 MARCH/APRIL 2009 37
blogspotting
ANDRew KANtoR
Keeping our finger on the ever-quickening pulse of Virginia’s real estate blogging community “Blatant refusal to present an offer” In a post titled “What part of ‘present all offers’ eludes you?,” Matthew Rathbun set the record — and the law — straight on VARbuzz: “Too many agents try too hard to be ‘in charge’ of the transaction and Rathbun fail to do the most basic of services that they are hired to do. In the past week I have been approached by agents on seven different occasions regarding a listing agent’s blatant refusal to present an offer to the seller. each of those occasions, the listing agent was not a member of our local association, but had listings in the region. In one case the agent (using cursing to stress his point) declined to present an offer because the listing said as-is, and the buyer wished to make it contingent on a home inspection. Another declined to present because the offer price was $10,000 less than asking. Unbelievable. Unless you’re a universal agent or general agent with express direction to decline offers on behalf of your client, you are not able to use your discretion as to what will and will not be delivered.”
“I would like to draw your attention to goal #5” “In order for you to reach your goals,” wrote Daniel Rothamel on The Real Estate Zebra, “it is important that you believe in the ability to reach them. One way that belief manifests itself is in your willingness to share your goals out loud with others. The bottom line is — if you can’t say it out loud, then you probably don’t believe it.” Daniel walked the walk, publishing a list of life goals. Most were relatively traditional — start a family, travel overseas — but Daniel had this to say about one:
Shortcut: www.VARealtor.com/09031
“You are the one who should take credit for our new baby” Jeremy Hart at NRVLiving.com reported hearing from a former client — one who had apparently kept busy in the home Jeremy sold him. “I’ll have you to know” (the client wrote) “that you are the one Hart who should take credit for our new baby. You sold us on a five-bedroom house, so we had to start filling them. therefore Natasha and I have decided we will take the tax deduction for the next 18 years and in the 19th year we will start to send you the college tuition bills.”
“I would like to draw your attention to goal #5 on my list: “Referee a Virginia State High School Basketball tournament game.” And he attached a photo of himself. “that is a picture of me, officiating a game during the quarter-finals of the VHSL State Basketball tournament,” he wrote. “I put myself out there, and wrote down my goal for all the world to see — and I reached my goal. Imagine that.” Shortcut: www.VARealtor.com/09033
Shortcut: www.VARealtor.com/09032 38 MARCH/APRIL 2009
www.VAReALtoR.CoM
Why blog?
Is there any value to keeping an online journal — to tossing out your ideas, observations, and other thoughts about your job (and your life)? It seems like everyone, and in many cases his mother, has an online journal (er, blog) of some sort. And lots of Realtors® have jumped on the bandwagon. But why? Here’s why: Through CREST (The Center for Real Estate & Social Technologies), we surveyed hundreds of real estate bloggers. Get this: 70 percent of them reported getting leads through their blogs. How many leads? In one month, the average blogger received 15, and was able to convert four of them to clients.
“
Blogging can be about shooting off your mouth. But smart bloggers don’t do that. they use the platform to develop a following, build a community, and establish
ReALtoR®-to-ReALtoR®
themselves as the local expert.” And for those who stayed the course, maintaining a blog for more than two years? They scored an average of more than 30 leads in a month, a third of which they converted into clients. All this for regularly writing about a market and a business they know and enjoy. Blogging can be about shooting off your mouth. But smart bloggers don’t do that. They use the platform to develop a following, build a community, and establish themselves as the local expert. And it pays off. ●
VARbuzz, VAR’s official blog and unofficial watercooler, is the place to find not only comments from VAR staff, but from Virginia’s best-read real estate bloggers. Join the conversation! www.VARbuzz.com
VoLUMe 16 ● ISSUe 2
MARCH/APRIL 2009 39
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 April 28, 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 number goal was “Referee a Virginia State High School Basketball Tournament game” for Daniel Rothamel? (See “Blogspotting”) 2. About how long has Danita Jackson’s real estate career been? (See “Realty Check”) 3. How much does the electronic version of NAR’s 2008 Profile of Home Buyers and Sellers cost Realtors®? (See the cover story) 4. What section of RESPA prohibits a seller from forcing a buyer to use a particular settlement service provider? (See “Legal Lines”) 5. What page number is printed upside-down?
1. 2.
years
3.
dollars
4. Section 5. Page
Name: Company:
Phone number:
Remember: Hang onto this form until April 28, when you’ll get final instructions at www.VARbuzz.com and can fill in the…
Comments?
FINAL ANSWER:
E-mail address:
Last issue’s winner: Charles W. “Billy” Shirley, associate broker at William E. Wood & Associates in Virginia Beach. Last issue’s answers: 1. Courts have typically allowed between 30 and 60 days as a “reasonable” extension for a settlement.
27 + 30 + 60 =
2. Vicky Lawson was the broker/owner at Wythe County Real Estate we quoted.
Reading the appropriate post on VARbuzz instructed you to add the numbers in answer 1 to the number of letters in answers 2 through 5 (there were 27).
3. Andrew Kantor suggested you might be thinking of throwing eggs at “the idiots on Wall Street.” 4. REALTOR® of the Year Carol Clarke was runner-up in her high school’s Miss Flame contest. 5. Lem Marshall said a fool and his money wouldn’t get a bailout. 40 MARCH/APRIL 2009
117
Adding 30 + 60 + 27 gave the final answer: 117. We also gave credit for people who counted the letters we provided, e.g., “Miss,” and accepted 122. ●
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 4 p.m. our phone number is (804) 264-5033.
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
Bank of America, worldPoints Credit Card
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
Liberty Mutual Home, Auto & Renters Insurance LLE Language Services telephone Interpretation & Document translation Promotion Code VARM08 Office Depot, office Supplies & Copying Outstaffing, Staffing & Payroll Pearl Insurance e&o, Medical, Life, Dental Insurance TASC/BizPlan Medical expense tax Benefits
Our CEO is Scott Brunner (804) 249-5712 scott@varealtor.com 42 MARCH/APRIL 2009
T-Mobile, wireless Service VAR Wireless Center (Coming soon) wireless Plans & Hardware Zipform, electronic Forms Solutions
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
For information about RPAC Ask for Meredith Cox, Director of Political Communications meredith@varealtor.com
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
Vive la différence
In defense of floppy bowties and thinking different It happens all the time. Some wellintentioned soul will comment on my bowtie, then with motherly affection, reach out and fix it — flatten and tug at the thing until it’s standing at attention, a gravity-defying flourish on an otherwise pedestrian package. (This is not unlike how I suspect pregnant women feel when strangers can’t resist the urge to reach out and rub mommy’s bulging belly, like she’s the Buddha or something… but I digress.) What I’m saying is, a bowtie should droop a bit — or rather, mine should. It just seems more natural that way, less calculated and pretentious (and more in sync with the laws of gravity). It’s how I like it. Now, I don’t particularly mind that you wouldn’t be caught dead wearing it that way if you were me. (I’ll set aside for now discussion of the requisite confidence one must have to wear a bowtie in the first place.) But you’re not me. What is it in us that desires conformity, seeks to correct others — to fix them — when they don’t fit our rendition of how things should be? I’m not just talking bowties. I mean business, too. I have a brilliant friend who was once in line to lead a large organization. He’s highly
knowledgeable, shrewd in business, personable and clever — everything you’d want in a leader. His one supposed tragic flaw: an antebellum southern drawl (water = “waw-dah”). “If you’re going to make it in this organization, you’ll have to lose that accent,” he was told by the venerable elites. He walked away, preferring authenticity to advancement, I guess, and made millions doing his own thing. That large organization later fell on hard times, some say due to its inability to embrace changing times. Ironic, isn’t it, that a society built on the foresight of political and theological and industrial and technological nonconformists isn’t always particularly tolerant of nonconformists? But in so doing, we manage to forget that it’s always the eccentrics who break the mold; that progress and innovation come only when we deviate from the norm, think differently, change. And the casualties of conformity? • The visionaries we ostracize because they’re impractical. • The innovators we reject because they’re unorthodox. • The changes we fight because they’re uncomfortable.
• The chances we miss because they’re risky. • The mental muscle that atrophies because thinking critically is time consuming. • And worst of all, the would-begreats who look at the confederacy of dunces arrayed against them, and decide it’s not worth it. In real estate these days I see some folks so busy trying to straighten all the drooping Realtor® bowties around them that they’re not only missing potential opportunities afforded them by a challenging market, from social media to customer service rating systems to innovative (and RESPAcompliant) settlement services; instead, they’re griping about the others who are seizing those opportunities. But this business has always been about innovation, about recreating oneself, about staying apace of consumer expectations. It’s worth remembering that what’s commonplace today was novel — and controversial — 15 years ago. To paraphrase (or downright pervert) Jonathan Swift: “He was a bold man that first represented a buyer.” So get over yourself, stop your carping about the competition, and go do something innovative. And leave my bowties alone, would ya? l
Scott Brunner is VAR’s chief executive officer. E-mail him at scott@VARealtor.com.
44 MARCH/APRIL 2009
www.VAReALtoR.CoM