W45yw4realtor march april 2015 by voolodedasd

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R E A LT O R M A G . R E A LT O R . O R G

REAL ESTATE AND THE

HOW WILL SUPER CONNECTIVITY CHANGE REAL ESTATE?

Page 26

Housing the Car-free Generation Page 18 Are You Violating the Code? 5 Ethical Dilemmas Page 22 NATIONAL ASSOCIATION of REALTORS速

Your Online Persona: Consumers Weigh In Page 30

2015

ENTRY

DEADLINE

MAY 15

REALTOR® Rosemary Tran Lauer funds childcare so lowincome parents can work.

R E A LT O R ® M A G A Z I N E ’ S

2O14 G O OD N EIGH BOR

Rosemary is a Good Neighbor. Are you? Tell us your story. We’re looking for REALTORS® who are making an exceptional impact on their community through volunteer work. Winners of REALTOR® Magazine’s Good Neighbor Award receive a $10,000 grant for their charity. For more information, go to www.REALTOR.org/gna or call 800-874-6500.

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Find out what’s hot at REALTOR® Magazine online.

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voices P R E S I D E N T PA G E 5 G U E S T E D I T O R PA G E 6 R E A D E R S PA G E 7

top of mind T E C H U P YO U R B U S I N E S S

The Consumer Electronics Show unveiled a host of devices that can help you work smarter and faster. PA G E 8 ECONOMY

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features

A tough winter sales season may give way to a strong spring, thanks to job growth and a strengthening economy. PA G E 1 0 C O M M E N TA RY

Ignoring Internet leads hurts your business— and the industry. PA G E 1 2 COMMERCIAL Q& A

ETHICS

Land specialist Peter Linneman says land values are rising faster than home values, but builders remain cautious about snapping up new lots.

The Code Is Your Business Ethical dilemmas arise every day in the real estate business. Here’s how to determine when difficult behavior you encounter breaches the REALTORS® Code of Ethics—and how you can respond. PAG E 2 2 T E C H N O L O GY ’ S N E X T L E A P

PA G E 1 7

Real Estate and the Internet of Things

COMMERCIAL

It started with a game-changing thermostat. But the era of automatic data sharing between devices is expected to reshape home buying and the real estate industry. Here’s a glimpse of what’s coming. PAG E 2 6 PAG E 1 7

ONLINE PERSONAS

What Your “About Me” Says About You Is your Facebook profile photo too casual? Do you say too much—or not enough—about yourself on your website? Our consumer panel weighs in on the messages you’re sending. PA G E 3 0 PAG E 3 0

Digital versions are available at realtormagdigital.com and through our free app. To update your subscription preferences: Sign in to REALTOR.org, go to “My Account,” and select REALTOR® Magazine. There, you can choose between digital and print.

Developers are receiving more community support for transit-oriented properties. PAG E 1 8

how to . . . CONVERT LEADS

Technology generates contacts, but fostering client relationships is up to you. PAG E 3 4 H E L P OW N E R S E L I M I N AT E O D O R S

Sellers may deny the stench in their home. Here are tips for addressing this sensitive, deal-killing issue. PA G E 3 6

power of R YO U R M E M B E RS H I P YO U R I M PAC T

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PA G E 4 0

Vol. 48, No. 2 REALTOR® Magazine (ISSN 1522-0842) is published bimonthly by the NATIONAL ASSOCIATION OF REALTORS®, 430 N. Michigan Ave., Chicago, IL 60611–4087. Periodicals postage paid at Chicago, IL, and at a dditional mailing offices. Annual subscription rates: $6 to members, included in dues; $56 to nonmembers. Postmaster: Send change of address to REALTOR® Magazine, NATIONAL ASSOCIATION OF REALTORS®, 430 N. Michigan Ave., Chicago, IL 60611–4087. Copyright 2015 by the NATIONAL ASSOCIATION OF REALTORS®. All rights reserved. Printed in the USA and distributed to members of the NATIONAL ASSOCIATION OF REALTORS® and its affiliated institutes, societies, and councils.

REALTOR® MARCH/APRIL 2015

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Your health, wellness, and safety matter to us. Check out our latest online offerings devoted to your well-being.

Nix the Negativity Remember that New Year’s resolution? If the gym didn’t deliver the six-pack abs you were hoping for, it won’t help to beat yourself up, says real estate coach Jared James. Take a different approach. Instead of focusing on new activities to achieve success, remove these seven negative practices from your to-do list. V I S I T : realtorm.ag/negativity

Understand How Criminals Think Personal safety speaker and trainer Keith James says the key to avoiding a violent attack is to better understand the mind of the attacker. He outlines five actions that assailants commonly use to single out victims. V I S I T : realtorm.ag/criminals

Supercharge Your Brain Feeling fuzzy lately? We took expert advice from the Center for Brain Health’s Strategic Memory Advanced Reasoning Training (SMART) program and fit it into the lives of busy real estate professionals. Try these eight tips to improve your memory, focus, and workflow.

V I S I T : realtorm.ag/brain

PRODUCT GUIDE

Spend Your Photo Budget Wisely Check out the latest camera trends and get the 411 on how to shop for a lens. Working with a professional photographer? Know the right questions to ask before hiring someone to shoot your listing. V I S I T : realtorm.ag/2015cameras

REALTOR® MARCH/APRIL 2015

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voices from the president

The Risk of Complacency b

Chris Polychron, cips, crs, gri, is 2015 NAR president.

Coldwell Banker agents around Des

The agent was stunned.

Moines, Iowa, have had safety training

What struck me most about this story

led by their company’s managing bro-

was the agent telling it—a man who stood

ker, who is a retired Air Force major.

6-foot-3. Nothing about him looked vulnerable or sets him apart as a potential

Many more of you are taking action.

target. But in hindsight, he saw that he

After the murder of Arkansas agent Bev-

One story really caught my attention. In

was. The lesson here is that safety is not a

erly Carter last fall, safety immediately

January, at the California Association of

gender, age, or even experience issue. It’s

became a top issue for all of us. Beverly’s

REALTORS®’ Winter Meeting, I watched

a REALTOR® issue.

death was devastating for me. Arkansas

a video featuring an agent simply telling

is a small state and it’s not a stretch to

his story.

Every September, we recognize REALTOR® Safety Month. But the times

The agent described getting a call

now call for a “year in safety.” We need to

other, even when we haven’t formally

from a prospective buyer who wanted to

go back to basics and understand how we

met. We lost someone from our Arkansas

see a high-end property. Upon meeting

can pursue our business activities each

family, as well as our REALTOR® family,

the buyer at the house, the agent said,

day as REALTORS® without putting our-

just as Beverly’s loved ones did.

something didn’t seem right. So when the

selves in harm’s way. On page 37, you can

say that we Arkansans all “know” each

buyer asked the agent to be led down into

read more about new and updated re-

families pull together. It heartens me that

the basement, the agent declined. After

sources from the association to improve

REALTORS® have stepped up to protect

checking out the basement on his own,

safety practices for all REALTORS®.

themselves and their colleagues:

the buyer left the home abruptly. The

Crye-Leike Real Estate Services in

agent later followed up by phone but got

at times. But the biggest risk we take is

North Little Rock, Ark., now has the Bev-

no response.

complacency. Recognizing the dangers

In the wake of tragedy, supportive

erly Carter Safety Course for agents. b

Soon after, the same man made the

Our calling leads us to the unknown

that lurk in our business, we must forge

In St. Charles, Mo., a mixed martial

news. He had been apprehended by

ahead with our eyes open and our spirits

arts champion is teaching agents to

authorities and was eventually charged

strong. Be courageous and smart. The

notice danger signs in their midst.

with beating two elderly men to death.

REALTOR® family is with you.

President Chris Polychron, cips, crs, gri President-elect Thomas Salomone First Vice President Bill Brown Treasurer Michael McGrew, crb, crs Vice Presidents Michael Ford, gri, Charlie Oppler 430 N. Michigan Ave., Chicago, IL 60611–4087 500 New Jersey Ave., N.W., Washington, DC 20001–2020 800-874-6500 infocentral@realtors.org REALTOR.org Views and advertising expressed in REALTOR ® Magazine are not necessarily endorsed by the NATIONAL ASSOCIATION OF REALTORS ®. The information contained within should not be construed as a recommendation for any course of action regarding financial, legal, or accounting matters by the NATIONAL ASSOCIATION OF REALTORS ®, REALTOR ® Magazine, or its authors.

REALTORMAG.REALTOR.ORG

Member Communications Committee Chair Christine E. Hansen, cips, crb, gri Vice Chair Nancy A. Farkas, abr, ahwd, crs, e-pro, gri, pmn, sres CEO Dale A. Stinton, cae, cma, cpa, rce SVP, Commercial & Global Services Janet Branton, cae, cips SVP, Communications Stephanie Singer SVP, Community & Political Affairs Walt Witek SVP, Finance John Pierpoint SVP, Government Affairs Jerry Giovaniello SVP, Human Resources, AE & Leadership Doug Hinderer SVP, Information Technology Mark Lesswing SVP, Legal Affairs Katherine R. Johnson SVP, Marketing & Business Development Bob Goldberg SVP, Research Lawrence Yun

Specialties Appraisal REALTOR.org/appraisal Auction REALTOR.org/auction Buyer Representation (Real Estate Buyer’s Agent Council, abr, abrm) www.rebac.net Commercial (Realtors ® Commercial Alliance) REALTOR.org/commercial Distressed Sales (sfr) www.realtorsfr.org Green Real Estate (Green Resource Council, green) www.greenresourcecouncil.org Global (Certified Int’l Property Specialist Network, cips) REALTOR.org/global Land (Realtors ® Land Institute, alc) www.rliland.com Property Management www.irem.org Resort/Second Home REALTOR.org/resorts Seniors Real Estate (sres) www.sres.org

Affiliated Organizations CCIM Institute (ccim) www.ccim.com Council of Real Estate Brokerage Managers (crb) www.crb.com Council of Residential Specialists (crs) www.crs.com Counselors of Real Estate (cre) www.cre.org Institute of Real Estate Management (arm, cpm) www.irem.org International Real Property Foundation www.irpf.org Realtors® Land Institute (alc) www.rliland.com Society of Industrial and Office Realtors® (sior) www.sior.com Women’s Council of Realtors® (pmn) www.wcr.org

The NATIONAL ASSOCIATION OF REALTORS® supports the federal Fair Housing Act, which prohibits discrimination in housing because of race or color, national origin, religion, sex, familial status (including children under the age of 18 living with parents or legal custodians, pregnant women, and people securing custody of children under 18), and handicap or disability.

REALTOR® MARCH/APRIL 2015

voices guest editor

She’s Got Street Cred I’ve had a competitive streak for as long

I was even more delighted to learn the

most strongly for me teases out every-

as I can remember. I won a school spelling

editors had selected me for the top prize:

day ethical dilemmas we face and offers

bee in third grade, and since then I’ve

a trip to Chicago in February (between

insights for steering clear of REALTORS®

been on the lookout for ways to relive that

snowstorms—no snickering, please).

Code of Ethics violations. “The Code Is

glory. When I spotted the announcement

My 4-minute video, which took me

Your Business” (page 22) turned an ab-

for REALTOR® Magazine’s Project Street

less than a week to make thanks to

stract topic into something real that I can

Cred video competition last fall, I had to

shooting and editing assistance from my

discuss with agents in my office.

give it a shot. The winner would get to

sister, is still paying dividends. I use it at

serve as guest editor for an upcoming

open houses and listing presentations,

industry after having accrued significant

issue of this magazine. As an assistant

and it has helped me get business. A local

experience in an earlier career—or two in

manager with Weichert, REALTORS®, in

business organization is also using it to

my case. First, I was an IT manager in the

Morristown, N.J., I couldn’t wait to create

promote civic awareness. View my entry

utilities industry followed by 16 years run-

a video to show my long-standing knowl-

and others at realtorm.ag/sc-video.

ning a TV production company with my

edge of and pride in the community I love.

The article in this issue that resonated

Like many REALTORS®, I came to this

sister. (We won 4 Emmys.) Today, I handle management duties in the brokerage

Guest Editor Lisa Molinari shares business insights with REALTOR® Magazine Editor Wendy Cole, left, and Publisher Stacey Moncrieff, right.

and represent buyers and sellers, as part of an apprenticeship program Weichert offers to newcomers with management potential. The days are long and hectic in my fiercely competitive market where listings sometimes receive 10 or more solid offers. As a rookie, I treasure all the professional wisdom I can find. There are many reasons I feel incredibly optimistic about my future in real estate. My time with the REALTOR® Magazine staff reminded me of perhaps the most powerful one of all: I’ve got street cred and it’s working for me. How about you? By Lisa Molinari

Publisher Stacey Moncrieff Editor Wendy Cole Creative Director Julie Fournier Director, Multimedia Communications Robert Freedman Managing Editor Meg White Senior Editor Graham Wood Writer-Producer Sam Silverstein Writer-Content Strategist Meghan Brozanic Copy Editor Bob Soron Designer Isabella Mathews Online Visual Designer Elizabeth Siuta Contributors Erica Christoffer, Carolyn Schwaar, Melissa Dittmann Tracey

430 N. Michigan Ave., Chicago, IL 60611–4087 500 New Jersey Ave. N.W., Washington, DC 20001–2020 Phone: 800-874-6500; Fax: 312-329-5978 Editorial e-mail & writer’s guidelines: narpubs@realtors.org Advertising e-mail: jpowers@realtors.org Website: realtormag.realtor.org Subscriptions: Phone: 800-874-6500; Fax: 312-329-5960 | E-mail: infocentral@realtors.org Reprints (100 or more): The YGS Group Phone: 717-399-1900, ext. 162; Fax: 717-399-8900 Address changes: At realtor.org click My Account (top right), then Change your information in the National REALTOR® Database System (login required). No Internet access? Contact your local board.

General Manager Kathleen Marusarz Advertising Sales Associate Jill Powers Advertising Sales Administrator Alvin Pulley Publications Assistant Wilma Gonzalez

ADVERTISING

Director, Communications Networks Robert Reuter Good Neighbor Awards Sara Pullan Geimer

REALTOR® MARCH/APRIL 2015

REALTOR® MAGAZINE, print and online, is REALTORS®’ best source of information on how to achieve business success. The magazine and Web site advance real estate industry best practices, bring expert insights to significant trends, and provide REALTORS® with timely decision-making tools on business purchases and strategies.

Business Development/Strategic Investments Bob Goldberg | 312-329-8269 | bgoldberg@realtors.org Midwest & Northeast Zack Buchanan | 717-505-9701 | zack.buchanan@theYGSgroup.com South Bob Jameson | 972-669-1663 | bob@jwwinc.com West Jim Führer | 503-227-1381 | jim.fuhrer@theYGSgroup.com Classified Sales Natalie DeSoto | 717-580-8184 | natalie.desoto@theYGSgroup.com

REALTORMAG.REALTOR.ORG

voices readers

Technology has evolved.

Buyer’s Letters Remorse

your file and the original in the office file,

Helping buyers detach from the emo-

and you have a real chance of warding

tional plea is always a challenge (“Don’t

off a lawsuit for damages on the matter if

Write Me a Love Song,” January/February

things don’t turn out well for the buyers.

2015, page 14). Thank you for helping

This will also help you if the buyers file a

explain how it can negatively impact the

complaint charging violations of Articles

business side. Great perspective from

1 and 2 of the REALTORS® Code of Ethics.

Christine Smith!

You can’t be too careful. As Rossi says,

Adrea Nairne, Realty Club Las Vegas, Las Vegas

Property Defects: You Can’t Be Too Careful

suits happen! Larry Lowenthal, Century 21 Rose Realty West, Cooper City, Fla.

Attorney Ronald Rossi provided some

Drone Prohibition Explained

good tips about how agents can avoid

Editor’s Note: The Federal Aviation

disclosure problems related to property

Administration’s proposed rules for the

defects (“Property

commercial use of unmanned aircraft ve-

Defects and You,”

hicles, or drones, announced in February

January/February

has generated much discussion among

2015, page 10).

members about the legality of their use in

However, he did not

the real estate industry. Many real estate

go far enough. He

pros are enthusiastic about the prospect

correctly states that

of using drones to capture aerial photos

it is important to tell

and videos of properties for sale, but

buyers about known

without an exemption, their commercial

defect issues and to document in writing

use remains prohibited, explains National

that you did so. However, his suggestion

Association of REALTORS® Associate

that you can rely on e-mail to accomplish

Counsel Lesley Walker. “A recent decision

this, “so you both have a record of it,” falls

by the National Transportation Safety

short of the standard of care expected of

Board supports the FAA’s longstanding

professionals.

position that UAVs are ‘aircraft’ under

How do you respond when the buyer

federal law and therefore subject to FAA

says, “I never got that e-mail” or “I found

regulation. While the FAA’s proposed

it a month later in my spam folder”?

rules would allow for future commercial

The best practice is to do what brokers

use of UAVs, until final rules are issued

constantly tell their agents: Write up a

and without an exemption, any current

disclosure about your concern and get

commercial use of a UAV could result

the buyers to sign it. Leave a copy with

in an FAA enforcement action.” NAR

the buyers and make sure that the home

will submit comments to the FAA as it

inspector gets one and acknowledges

finalizes details for the commercial use of

receipt. Put a copy of the disclosure in

these systems.

Send a letter to narpubs@realtors.org or join a conversation at one of the blogs. Note: Letters and blog posts are edited for space and clarity. Publication of a letter doesn’t constitute an endorsement of the writer’s views by the National Association of REALTORS® or R EALTOR® Magazine. Submission of a letter constitutes permission to publish it in any form or medium.

REALTORMAG.REALTOR.ORG

So has the Internet. 1985 5 TLDs (.com, .net, .org, .edu, .gov) 1994 Yahoo is born 2,738 websites on the Internet 1998 Google is born 2.5 million websites on the Internet

2014 .REALTOR and hundreds of new TLDs introduced 673 million websites on the Internet

2005 13 more TLDs added 65 million websites on the Internet

Join the evolution with REALTOR! REALTORS® have always embraced new, cutting-edge technologies. Now it’s time to embrace the changing Internet landscape. As a REALTOR®, your .REALTOR web address instantly communicates to consumers what the REALTOR® brand stands for: ethics, professionalism and trust. More than 90,000 .REALTOR domains have already been claimed. Claim your FREE .REALTOR web address at www.claim.REALTOR

REALTOR® MARCH/APRIL 2015

top of mind

Intriguing Business Solutions At the Consumer Electronics Show, companies introduced an array of products to keep you at the top of your game. Super-sized TVs, self-driving cars, and

For those who travel beyond the reach of cellular coverage—where even

imaging technology to pinpoint potential

the attention during January’s Interna-

weBoost’s equipment doesn’t work—a

trouble spots in homes, such as water

tional Consumer Electronic Show. But a

startup called goTenna (gotenna.com)

leaks in walls and drafty windows, that

host of less flashy devices at the annual

has developed a device ($150 per pair)

might otherwise go unnoticed.

Las Vegas technology showcase stand to

that allows mobile phones to commu-

have a far bigger impact on the business

nicate using long-range radio links that

You’ve Got Mail

practices of real estate pros. Here are a

can traverse several miles or more. The

The U.S. Postal Service was at CES to

few breakthroughs worth noting.

Brooklyn, N.Y.–based company’s app

promote a new era of digitally enhanced

connects a smartphone to the lightweight

mail. The possibilities include adding

transmission gear via Bluetooth.

multimedia presentations to printed

Clients Never Out of Reach

marketing materials using augmented

Take mobile communications. Problems arise quickly when you’re in an area where

Scanning for Home and Business

reality technology. Such mailings have

cellular coverage is poor or even nonexis-

Demand for 3-D home tours is escalating.

been commercially available for a year

tent. Utah-based weBoost LLC (weboost.

French firm Snapkin (snapkin.fr/en/) is

and include a scannable code that users

com) showed off a line of devices that

developing a specialized room scanner

access on smartphones and tablets.

boost cell signals belonging to any cell-

that can generate floor plans and de-

phone network, allowing you to use your

tailed, three-dimensional tours of rooms,

Doing More for Less

phone in places where you might other-

although it is not designed to offer precise

Some CES exhibitors highlighted cost-

wise find no service. Real estate agents

square footage measurements. The

effectiveness. Plustek Inc. of Taiwan

may especially appreciate weBoost’s

company hopes to make the scanners

(plustek.com) unveiled a document

car-based products, which strengthen

available for rent at retail outlets, just as

scanner priced below $1,000 that rapidly

weak cellular signals for either a single

carpet-cleaning machines are today, says

sends pages to a computer or smart-

phone or every mobile device in a vehicle.

cofounder and CEO Jérémy Guillaume.

phone and includes a touch screen for

The company also sells equipment that

camera, the FLIR One, uses thermal

Web-based home appliances got most of

FLIR Systems (flir.com), meanwhile,

editing. The unit features a 50-page

can be installed in a fixed location, such

showed off a different kind of scanner

feeder and doesn’t need to be connected

as a home or office. Signal boosters start

that may appeal to buyers. The com

to a computer.

at $130 for 3G and $200 for 4G signals.

pany’s $249 smartphone-based infrared

REALTOR® MARCH/APRIL 2015

By Sam Silverstein

REALTORMAG.REALTOR.ORG

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SUPPLY

CONFIDENCE

TRANSACTIONS

200

PENDING HOME SALES INDEX

72 104.2

thousand

PRICE

National median.

Measures housing contract activity. An index of 100 is equal to the level of activity during 2001, the benchmark year. 4.8

million

1.9

million

INVENTORY

Number of existing homes on the market at the end of the month.

EXISTINGHOME SALES Seasonally adjusted annual rate, which is the actual rate of sales for the month, multiplied by 12 and adjusted for seasonal sales differences. 2014 data reflects final seasonal adjustments.

Practitioners are seeing more activity from buyers as interest rates re-

CURRENT CONDITIONS 6-MONTH EXPECTATIONS BUYER TRAFFIC

SELLER TRAFFIC

Derived from monthly REALTOR® Confidence Index. Results for August are based on 3,360 responses to 6,000 surveys sent to large and small real estate offices. The survey asks practitioners to indicate whether conditions are strong (100 points), moderate (50), or weak (0). Some data may be revised from previous issues.

main low and financing becomes easier to obtain, at least in some markets. But inventory remains low in many areas, and income growth lags behind home appreciation.

A First-Time Buyer Comeback? ECONOMY

Lawrence Yun is NAR chief economist.

nomic realities. After all, the number of

the market needs. Larger inventories not

millennials—those in their 20s and early

only help to motivate buyers, they also

30s—living with their parents is at sky-

keep prices from rising too quickly.

high levels, and it’s doubtful that staying

But the news is not all grim. Demand

with mom and dad is their idea of free-

2015 got off to a snowy and sluggish start

for new construction is rising, and with

dom. More likely, they’ve felt hampered

for residential markets. While running

it the need for workers. Homebuilders,

trying to find stable, good-paying jobs,

at a faster clip than at the same time 12

who have been scrambling to find skilled

let alone obtain mortgage financing in

months earlier, January’s closing activity

laborers, may find a larger available pool

today’s overly strict environment.

clocked in markedly lower compared to

as hard-hat workers leave the slowing oil

But there are hopeful signs here as

the final months of 2014. Sure, the severe

drilling industry in favor of construction,

well. Jobs and wages are steadily improv-

weather experienced by much of the

which is experiencing wage hikes. As a re-

ing. The mortgage credit box is opening

country had a hand in the tepid perfor-

sult, we could see a 30 percent increase

up a bit. When you look at these trends

mance—an annual pace of just 4.8 million

in new-home sales this year.

along with the improving prospects for

sales. But other factors, apart from the season, could be restricting home sales.

Second, there could be a change in

home construction amid a strengthening

lifestyle as young adult households—

economy and continuing low interest

millennials—settle in as renters. Does this

rates, first-time buyers could be poised

choices. Inventories are low and falling.

generation prefer not to be tied down?

for a comeback in 2015. Overall, we could

The supply of homes fell in January for

It’s too early to tell. The home owner-

see a good year ahead. The formation of

the second straight month on a year-

ship rate—now at 64 percent —is at its

more new households is something par-

over-year basis, after having risen for 16

lowest level in more than 20 years. This

ents, as well as their young adult children,

straight months, and are far below what

phenomenon may have little to do with

can smile about.

First, buyers are not excited by their

lifestyle choices and more to do with eco-

REALTOR® MARCH/APRIL 2015

REALTORMAG.REALTOR.ORG

A strong brand has power behind it. The National Association of REALTORS® is working to make sure consumers recognize this and understand the value REALTORS® bring to the real estate transaction. So, proudly wear your REALTOR® pin and display the REALTOR® logo on all of your marketing materials.

top of mind

The Silent Treatment There’s no excuse for ignoring online leads. If you don’t have time to follow up, you don’t have time to be in real estate. “It took a year, but we got there in the end.” That’s what one agent told me re-

C O M M E N TA RY

get there. Perhaps the best payoff from a

cently when she and I were talking about

agree how important that is. (Read more

follow-up call is the opportunity it gives

her clients who had just bought their first

about effective lead conversion on pages

agents to demonstrate that, unlike third-

home after house hunting for 12 months.

34–35.) It’s also about maintaining our

party aggregate sites, they are the only

Not only was the agent ecstatic that her

credibility as professionals who provide a

reliable source for up-to-date information

clients had finally found a home, but, as

worthwhile service.

about the properties. A lot of information

she said to me, she now had clients for

When agents rightfully point out that

on third-party sites is outdated. Even if

life. After sticking with them through the

some of the e-mails they receive via

the consumer has sent an e-mail about

entire process, she knew she had won

online contact pages are not from serious

a home that has already gone under

their loyalty for any future home pur-

buyers, that fact brings to mind the Inter-

contract, it’s well worth an agent’s time

chases they may make—and they would

net concept of the “long tail.” Not every

to respond with a list of other homes

also be a great pipeline for referrals for

article or Web page is going to receive

that fit the same criteria. That shows the

years to come.

heavy traffic all the time, but that doesn’t

consumer the value of working with a real

How did she tap into such a strong

mean the steady flow of visitors over an

person who is in the know about what is

reservoir of income potential? The clients

extended period of time doesn’t matter.

available.

came to her as an online lead through a real estate search website. They were the exact kind of lead too many agents ignore. It’s not just agents in my MLS footprint that let this potential go to waste. In a recent study by the WAV Group, re-

The agents who take the time to respond to an e-mail query are the ones whose names get passed around. The same principle applies to follow-

Landing clients in real estate has

searchers posed as buyers on several

ing up on e-mail queries. Many of those

always been a numbers game; that hasn’t

major real estate portals and tracked the

phone calls won’t directly translate to

changed. The only difference is what

response rate for all their e-mail queries.

a large payoff, but cumulatively, they

the playing field looks like. A five-minute

The results were staggering: For 384

garner an agent a deep well of goodwill

phone call allows you to show your

brokers across 11 states, the researchers

that will inevitably generate a return on

knowledge of what is on the market right

found that 48 percent of buyer leads did

investment over the course of their ca-

now, and it demonstrates that you are a

not receive a response. This projects out

reer. Furthermore, whenever people are

responsive professional who cares about

to thousands of buyers who are trying to

looking for an agent, they almost always

the client. That is, and will always be,

interact with our industry and receiving

ask their friends and family for referrals.

what real estate is about.

the silent treatment.

The agents who take the time to respond

We need to do better than this. It

to an e-mail query are the ones whose

isn’t simply a question of following up

names get passed around. Following up

on leads so that they can be converted

with leads makes a difference more often

into a sale—though I will be the first to

than it doesn’t, even if it takes a while to

Andrew Strauch is the vice president of product innovation and marketing for MRIS, a leading mid-Atlantic MLS.

Note: Opinions expressed in “Commentary” do not necessarily reflect the position of the National Association of REALTORS® or R EALTOR® Magazine. Submit Commentary ideas to wcole@realtors.org.

REALTOR® MARCH/APRIL 2015

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top of mind

Navigating Bumpy Terrain It’s easy to overpay for land these days. Land acquisition guru Peter Linneman emphasizes the need to be discerning. Talk about foresight. In 2005, Pete Linneman launched American Land Fund, a Philadelphia-based private real estate equity firm poised to take advantage of the downturn he believed was ahead in the housing market by purchasing raw, undeveloped, unentitled land in the path of development. The fund’s profits would come from buying raw land and working with homegrown partners to convince local officials to grant the properties development rights, transforming them from unentitled to entitled land with permits to build thousands of homes. The value of land rises and falls based on entitlements because builders most often buy lots rather than raw land. A lot approved for a 10-story condominium or office building is much more valuable than the same p roperty zoned for farm or even a few single-family homes. ALF’s portfolio now spans 9,500 acres and 17,400 residential lots across seven states. “We are still, on a very selective basis, looking for additional properties. But since we have a couple hundred million dollars’ worth of land, we don’t feel the need to keep doing it,” Linneman says. Linneman, a longtime University of Pennsylvania real estate professor, is circumspect about the significance of his real estate predictions a decade ago. “We were too early in the execution of at least a third of it,” he says. Linneman discusses the uneven terrain beneath land sales. How is the model for bulk land sales changing as markets stabilize? Homebuilders are being very cautious. This downturn has lasted so much longer than expected and [still] has everybody’s attention. They’re very sensitive about small things—a data release that people read way too much into. How does that play out in the new home sales market? In the past, the norm was not only that builders would have model homes, they’d have a number of homes in various states of completion, speculatively. When you went to see the models on a Saturday, the builder would say: “We can build you this one and have it done in eight months or show you one that’ll be done in a month.” Now, they’re not willing to carry any speculative [homes] beyond models. That means the velocity is much slower for land takedowns.

Where is the value of land headed in 2015? I’m a big believer that home values are going to go up faster than inflation and land values will go up faster than home values because they’re the residual [the value of land after a builder subtracts costs from revenue]. We’re still underproducing homes. Is financing loosening up at all? It’s slowly loosening up, but in the near term, the real key is homebuilders and how aggressive they decide to be. They have strong balance sheets, so the state of the credit markets is not a near-term constraint.

REALTORMAG.REALTOR.ORG

By Dona DeZube

REALTOR® MARCH/APRIL 2015

top of mind

No Parking, No Problem Transit-oriented developments are reflecting the preferences of today’s younger professionals. Learn what leading-edge developers are thinking. Millennials are driving today’s transformation of major urban centers, accord-

are starting to grasp as well. Since the late 1990s, TOD has been

ing to a fall 2014 Cushman & Wakefield

including reductions in driving rates, road

a force in the development world, says

report. Many are opting to ditch cars

congestion, and greenhouse gas emis-

David Dixon, an urban planner at Stantec

as long as they can live within walking

sions. Perhaps the most radical depar-

in Boston. The Great Recession, however,

distance of amenity-rich areas and easily

ture of all from conventional development

changed TOD’s trajectory.

catch transit when they’re looking to ven-

priorities, onsite parking is typically a

ture beyond their neighborhood hub. In

minimal or nonexistent part of the plan.

“Transit’s ability to really incent development—and a different kind of

However, like the millennials them-

development, of walkable communities—

up more than half of the global workforce.

selves, TODs have matured since they

first became recognized in the late 1990s

This expanding cohort of workers born

first emerged. In some cases, neigh-

and early 2000s,” he explains. “But

since 1982 is likely to turbocharge an-

borhood activists are pushing for TODs.

coming out of the recession there’s been

other phenomenon with important ram-

And where they’re not on consumers’

so much more awareness of the power

ifications for commercial practitioners:

radar, developers are fine-tuning their

of cities to attract people, the interest in

the demand for so-called transit-oriented

strategies to seek meaningful commu-

walkable environments, and the desire to

development.

nity involvement. Smart developers

not have a car. ”

just six years, C&W reports, they’ll make

These mixed-use areas in cities and

COMMERCIAL

understand they need to offer more than

Data has begun emerging showing

suburbs are located a half-mile or less

just proximity to transit. Their projects

that TOD improves property values. A

from public transportation and typically

need to reflect the changing lifestyles of

2009 study by CEOs for Cities found

occur in higher-density communities.

younger consumers who are more likely

that in 13 of the 15 markets analyzed,

Along with improving access to jobs,

to be tethered to their electronic gadgets

increased walkability in a neighborhood

such developments spur other benefits,

than to a vehicle—a reality that lenders

was directly linked to higher home values.

REALTOR® MARCH/APRIL 2015

REALTORMAG.REALTOR.ORG

before this project was created. [It]

ing overall. “It’s partly because there’s

director of the Charlotte, N.C., office of

wanted moderate to high density [and]

been a paradigm shift in urban planning

Integra Realty Resources, a real estate

low parking, and the idea was to promote

and lifestyles. Young professionals don’t

valuation company, studied the effect of

pedestrian-friendly, walkable neighbor-

necessarily want or need a car and all the

a light rail line that opened in his area in

hoods.”

expenses that go along with it,” he says.

Fitzhugh Stout, senior managing

2007. He found properties had increased

There’s no on-site or even authorized

in value from 5 percent to 73 percent

street parking for residents. Leases

Hotel? What a Great Idea!

since then, and the most dramatic

even prohibit residents from getting

Community input has also been critical

increases came from changes in zoning

street-parking passes from the city. That

to a $100 million TOD in Huntington, N.Y.,

that permitted increased density. “Every-

hasn’t been a deterrent in leasing. Units

on Long Island, currently in the permit-

where in the country, people talk about

were fully leased when the property

ting and environmental review stage, by

reducing parking and getting higher den-

opened in October 2013.

Renaissance Downtowns, a developer

sity in development,” he says. “Transit

They range from 507-square-foot stu-

based in nearby Plainview, N.Y. In the

dios to 1,146-square-foot two-bedroom

works is a 170-room hotel set to open in

two-bath apartments with rents ranging

spring 2017. It’ll be supplemented with a

is Americans’ ever-increasing focus on

from $1,495 to $3,450 per month. The

100,000-square-foot office building; two

health. About 15 years ago, recalls Dixon,

property includes a free second-floor bike

mixed-use buildings, one with retail on

Dr. Richard Jackson, then director of the

garage and a “train tracker” screen in the

the ground level plus two stories above it

Centers for Disease Control’s National

lobby so residents can see where transit

featuring 70 residential units; and a 48-

Center for Environmental Health, started

vehicles are in real time. Across the street

unit artists’ live-work building.

talking about a link between auto depen-

is a station for Divvy, the city’s bike-

dence and obesity. Today people con-

sharing program launched in June 2013.

has allowed that to happen.” Another factor critical to TOD’s growth

sider a walkable environment a healthier

The property has 5,000 square feet

All those buildings will sit within a halfmile of the Huntington Station rail stop, which lands riders in Manhattan in about

environment. That’s a sea change, says

of commercial space and about 7,050

an hour, taking the place of commuter

Dixon, from when people saw the lawns of

square feet of ground-floor retail space.

parking lots that currently exist. “Our

the suburbs and thought they translated

McNally says despite its growing popular-

whole model is going to municipalities

to a healthier life.

ity, TOD doesn’t automatically translate

near train stations with a lot of surface

to a higher return for developers. “It

parking that’s underutilized and replac-

Community Pushes for TOD

depends on the individual project,” says

ing the parking with new buildings that

It was local residents who clamored for

McNally. “There are so many factors in

include parking within the structures,”

a high-density development at 1611 W.

new construction.” While some lend-

says Sean McLean, the company’s vice

Division in Chicago. The city passed an

ers have reservations about financing

president of planning and development.

ordinance in September 2013 permitting

projects without parking, it wasn’t the

higher density and less parking for devel-

case with this project, and that’s chang-

The project is being financed privately through RXR Realty, says McLean. RXR,

opments near transit hubs. The 99-unit

which operates in New York, New Jersey,

apartment building sits atop the city’s

and Connecticut, launched an “emerging

Blue Line “el” train stop at Division, an

markets fund” to focus on rebuilding

intersection six bus lines traverse daily.

downtowns in the area using input solicited from community members.

The project’s specs were heavily

To recruit local involvement, Renais-

shaped by a local community group. “It wasn’t the developer saying, ‘We want

sance Downtowns relies on “crowd-

to build a TOD project,’ ” says Jamie Mc-

sourced placemaking.” The company

Nally, an architect and project manager

opens an office in the development zone

for the project’s developer, Rob Buono.

and staffs it with local residents, ex-

“A community group had a master plan REALTORMAG.REALTOR.ORG

plains McLean. Those staffers hold daily REALTOR® MARCH/APRIL 2015

top of mind community meetings and office hours.

It’s relying on funding from institutional

The company also launched a website,

investors for the townhomes and condos,

Source the Station, to provide informa-

in addition to loans from commercial

tion to residents.

banks. “When it comes to developments

In fact, the hotel at Huntington Station

with units for sale, rather than leasing, de-

wasn’t even on Renaissance’s radar. But

mand and values have remained strong

the community spoke and Renaissance’s market analysis confirmed the area was ripe for a hotel. “The challenge for us is always gaining the trust of the community and gaining their activity,” says McLean. “We concen-

aggressive in seeking our business, Jack-

130,000 square feet of commercial space

son says. “On the other hand, financing

all within steps of the station.

for multifamily rental has been tighter

What took so long? EYA purchased

because there’s a lot of supply.” Because infill projects are generally

trate on activating the silent majority to

land a dozen years ago near—but not next

make sure they’re at the table rather than

to—the Metro station. It then decided

riskier and more time consuming than

just the 10 squeaky wheels. Then we get

its project would be more successful

other projects, Jackson says, developers

the majority what they’re looking for in

for both it and the community if it were

tend to focus on projects with an ROI that

their community.”

located adjacent to the station on prop-

justifies the extra effort. “There’s a lot of

erty then owned by the county. It took

up-front risk in these projects, and those

turn on investment on TOD in the North-

all that time for EYA to convince county

cost are typically funded from equity.”

east, McLean says it’s directly related to

officials to buy EYA’s land and sell EYA

the distance from the development to the

the land next to the Metro station. That

planning for parking can be tricky. At

nearest major metro area. The closer the

required relocating all the operations

Shady Grove, townhomes have attached

TOD project to Manhattan, for example,

that existed on the county’s property,

parking for one or two cars while rentals

the better the return.

which included a transit bus depot and

have fewer allotted parking spaces. “One

a massive kitchen where public school

consideration is who’s moving into the

remains a challenge when it comes to

lunches were prepared. In exchange,

units. You may be doing larger units

financing TOD projects, as some lenders

EYA agreed to shepherd both properties

targeted for empty nesters. They may be

remain skeptical about the viability of

through the required zoning and approval

less willing to give up their cars,” he says.

projects that deemphasize parking.

processes so it and the county ended up

You also have to think about what ame-

“Lenders are still looking for one to one-

with d evelopment-ready land.

nities are within walking distance. The

When it comes to calculating the re-

Like McNally, McLean says parking

and-one-third spaces per unit.”

Fifteen percent of the project will include moderate-income housing (for

for infill in general, so lenders have been

homes, 15,000 square feet of retail, and

Jackson agrees with colleagues that

higher the Walk Score, the less parking you need.

Long-Range Planning Pays

those who earn 60 percent or below of

It’s taken 10 years, but sales will begin

the area’s median income) and another

a development near a subway station

this April for the TOD at the Washing-

10 percent will be workforce housing (for

and call it a day. Transportation (and not

ton, D.C., Metro’s Shady Grove stop in

those who earn 80 to 115 percent of the

necessarily rail; good bus service also

Montgomery County, Md., reports A.J.

area’s median income), says Jackson.

qualifies), walkability, and neighborhood

Jackson, managing partner at EYA,

Rentals are expected to draw from $1,100

amenities are all factors in successful

a TOD-focused developer based in

to $2,600 per month. Townhomes will

TOD, he says. “It’s a dynamic analysis.”

Bethesda, Md. Residents are expected to

likely range from $185,000 to $400,000

start moving in by year’s end. The project,

for the moderate-income and workforce

which is also adjacent to the Shady Grove

housing, while market-rate units will range

station for MARC, Maryland’s commuter

from $650,000 to $800,000.

Bottom line: You can’t just throw up

By G.M. Filisko

REALTOR® University visiting lecturer Christopher Leinberger talks about the

rail system, will include 1,100 one- and

EYA is financing the $550 million

economics of walkable communities:

two-bedroom apartments, 400 town-

project with traditional debt and equity.

Learn more at realtorm.ag/walkable.

REALTOR® MARCH/APRIL 2015

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The Code Is Your Business Ethical dilemmas crop up daily. Here’s how to avoid running afoul of five of the most common REALTORS® Code of Ethics complaints. By Graham Wood and Bruce Aydt Working in real estate comes with its fair share of

but is it time to call your association’s grievance com-

irritations. Agents who don’t return calls in a timely

mittee? Not necessarily.

manner or clients who make inappropriate demands

Karen, an agent in West Palm Beach, Fla., blamed

can be frustrating, to say the least. But discerning when

the loss of a deal last year on a listing agent who didn’t

difficult behavior crosses the ethical line can sometimes

disclose competing offers until the eleventh hour.

be tricky—whether it pertains to your dealings with

Karen, who asked not to be fully identified because of

other REALTORS®, clients, or the general public. To help

the sensitivity of the matter, submitted her buyer’s offer

you distinguish actual infractions from misunderstand-

and received a preliminary acceptance from the seller.

ings or simply poor manners, we look at five real-life

(Such an acceptance is not binding in the way a signed

business dilemmas and describe how the REALTORS®

purchase contract is.) The buyer even had a home

Code of Ethics applies.

inspection done. But when pressed to move forward on the deal, the listing agent said the seller was considering

Disclosing Multiple Offers It’s heartbreaking to tell buyer clients they’ve been out-

other offers. “The listing agent had previously told me she was

bid when you didn’t even know there were other offers

just waiting for the seller to sign the official paperwork

on the table. You may feel as if you’ve been wronged—

[for the buyer’s offer],” Karen says. “At no point did she

REALTOR® MARCH/APRIL 2015

REALTORMAG.REALTOR.ORG

say that we didn’t have an executed offer. She never said anything about other offers.” Karen says she believes the listing agent’s lack of

Many agents assume that displaying a picture of their brokerage on the backdrop of their Facebook business page takes care of Code compliance, Brooker

candor cost her the deal because her client missed out

adds. But that alone is not sufficient to meet the

on the opportunity to increase the offer. However, failure

standard: Backdrop images don’t show up in Facebook

to disclose other offers isn’t automatically a violation of

newsfeeds, so individual postings must include the

the Code.

brokerage name. This wasn’t the first time Brooker had seen this type

What the Code Says (Article 1, Standard of Practice

of Code violation, but he chose not to get involved. “I

1-15 and SOP 1-13(5)): Two conditions must be met

didn’t say anything [to the agent] because the last time

before a listing agent has any duty to disclose multiple

I said something to someone, they asked me sarcas-

offers: The seller must grant permission to disclose

tically if I was the ‘real estate police,’ ” he says. “And I

such information, and the buyer or cooperating agent

thought, you know what, I’m not.”

must ask for the disclosure. The same applies to revealing who obtained the offers—whether they were ob-

What the Code Says (Article 12): REALTORS® must

tained by the listing agent, another agent with the listing

present a “true picture” in their advertising. No matter

agent’s firm, or a cooperating broker. So if Karen didn’t

the medium, they must properly identify themselves as

pose the question to the listing agent, or if the seller

REALTORS®, licensees, and real estate professionals

didn’t grant the listing agent permission to disclose, the

and identify their company name. Common posts such

listing agent did nothing wrong.

as “just listed, 123 Sunrise Drive” with a description of

The lesson is this: Cooperating agents should always ask the listing agent if other offers exist and, if so, who procured them. They should also inform buyers that

the listing do not alone make it clear that the person posting is a real estate professional. SOP 12-5 requires that any advertisement of real

their offer and its terms are not confidential and can be

estate services or of listed property must disclose the

disclosed by a seller to other parties. The exception: A

name of the REALTOR®’s firm “in a reasonable and

confidentiality agreement between a buyer and seller—

readily apparent manner.” Exceptions exist for media

entered into before presenting the buyer’s offer—would

with “abbreviated” formats, such as thumbnails, text

obligate a seller not to disclose the buyer’s offer. While

messages, and tweets. In these cases, the REALTOR® is

rare in residential real estate, such agreements are

not required to include the company name in the actual

common in commercial transactions.

abbreviated format, as long as there is a link back to a display of the REALTOR®’s full information, including

Transparency in Advertising

company name.

Social media tools may appear to provide a more informal way of presenting listing data, but ads posted to

Disclosure of Property Defects

Facebook are subject to the same advertising standards

Sometimes, sellers would rather not disclose significant

as those that appear in print. When putting listings on

problems with a property, and it may seem that the re-

social platforms, REALTORS® have a responsibility to

sponsibility to act in a client’s best interest gives listing

identify themselves as real estate professionals and to show their company affiliation. Brian Brooker, broker-associate at Carrington Real

What’s the penalty for a Code violation?

Estate Services in Boca Raton, Fla., spotted some

The maximum fine for an ethics violation is $15,000, but it’s up to each

listing ads on Facebook that gave him pause. They were

association’s hearing panel to decide what an appropriate sanction is for each

posted by an agent he had long known from another

case. In general, if the violation is considered to be relatively minor, such as an

state. What troubled him wasn’t the content but rather

advertising mistake that did not cause significant harm and was mainly due to

her failure to identify her brokerage. “I had just finished

a lack of knowledge of the Code, a fine of $500 or less may be imposed. But if

broker classes and passed my broker exam, so the ad-

the violation is very serious, such as an escrow account problem that caused

vertisement without the company name stuck out like a

substantial harm and was knowingly committed, then a fine at the top end of

sore thumb,” Brooker says.

the $15,000 maximum may be recommended by the panel.

REALTORMAG.REALTOR.ORG

REALTOR® MARCH/APRIL 2015

Giving It Teeth It’s up to state and local boards to make sure members adhere to the Code. By Graham Wood The REALTORS® Code of Ethics sets clear professional standards for the real estate industry, but how are its principles enforced? Local and state REALTOR® associations are primarily responsible for making sure members adhere to the Code, and some have developed distinctive methods for addressing infractions. Here are three approaches to Code enforcement.

Making Education a Priority The Northeast Florida Association of REALTORS® monitors ethics training closely. Members who haven’t completed Code of Ethics course requirements within a designated period receive notifications from the association six months before the deadline. Two months from the deadline, brokers are sent lists of licensees at their firm who haven’t completed COE requirements. Once the deadline passes, members who haven’t met requirements are immediately suspended from the association, and all their member services are terminated. They’re given one more chance to complete COE requirements, and if they do, they are reinstated, says NEFAR communications director Melanie Green.

agents a reason to go along with the pretense. However, the Code prohibits REALTORS® from misleading buyers on the material facts about a home. If an agent knows about a property defect, disclosure is necessary regardless of the seller’s wishes. Sherry Hutchens, a sales associate with Dudum Real Estate Group in Walnut Creek, Calif., recognized this when one of her sellers tried to hide a termite problem with her home. Despite the termite rods—filled with chemicals—running from the foundation and along the stucco exterior of the house, the seller wanted to make it appear as though there was never a problem. “[The seller] called me one day and asked me to come to the house with my digital camera,” Hutchens recalls. “When I arrived, I found her on the side of the house wearing rubber gloves and scrubbing the termite rods with Brillo pads.” The seller requested that Hutchens take photos of the cleaned rods to “prove that the termite inspector was wrong” about the home’s current condition. Hutchens rightfully refused—and the seller fired her. The loss of the client was a small price to pay com-

Streamlining Complaints Several associations, including the Illinois

pared to the sanctions Hutchens could have faced had

Association of REALTORS®, have introduced an Ethics Citation Program,

she done what the seller asked. That breach of the Code

which gives members an easier, faster way to file ethics complaints. On IAR’s

of Ethics would likely have violated the license law, too,

website, complainants can fill out a form, upload documented evidence

and it could have put her real estate license in jeopardy

of a violation, and submit their complaint online. The program is meant to

and triggered legal action by a duped buyer.

encourage more members to file complaints and to resolve them more quickly, explains Matt Difanis, IAR’s 2014 chairman of Government Affairs

What the Code Says (Article 2): “Avoid exaggeration,

and Public Policy Member Involvement Group. The citation initiative is limited

misrepresentation, and concealment” of “pertinent”

to certain Articles in the Code that lend themselves to prima facie evidence—

facts about the property or the transaction, this Article

evidence that alone would prove a violation. An ethics citation panel reviews

says. Typical scenarios that come up under Article 2

each complaint, and if a violation is substantiated by the evidence, the

involve a seller who does not want to disclose a matter

respondent receives a copy of the complaint and a fine. The respondent

of significance about the home. To avoid the risk of a

maintains the option to request a full hearing on the complaint’s merits.

Code violation and possible legal action that may result

No Running From Sanctions Ethics violators will have a much harder time dodging complaints in California. REALTORS® in the Golden State often

from a seller’s failure to disclose, REALTORS® should err on the side of disclosure. Similarly concerning is when a seller refuses to dis-

belong to two or more local associations, but the boards haven’t necessarily

close an issue because it has been “fixed.” The problem

communicated with one another when a member has been sanctioned or

here is that there are many ways to define how some-

suspended. That has allowed a member suspended by one board to continue

thing was fixed. The best thing to do is to ask the seller

receiving benefits from others. Under a California Association of REALTORS®

for documentation of the fix, including a paid receipt,

pilot program, launched in March 2012, a member’s suspension by one local

and then discuss disclosing and providing evidence of

association for failure to comply with sanctions takes effect statewide after a

the fix to a new buyer.

CAR review. That means that a REALTOR® loses membership status with all

A seller’s refusal to disclose a significant fix to a

associations in the state and cannot reapply to any of them until the matter

property can result in serious liability issues for an

is resolved, says CAR General Counsel June Barlow. To date, no member has

agent if the agent knows about it and the fix fails or was

received a statewide suspension.

inadequate.

REALTOR® MARCH/APRIL 2015

REALTORMAG.REALTOR.ORG

Client Confidentiality Certain client information is subject to confidentiality,

Soliciting Another Agent’s Listing or Buyer Agreement

even after the relationship ends between the client and

The only time an agent may not solicit another agent’s

agent. Most notably, a client’s price position, negoti-

client is when that client is subject to an exclusive agree-

ating position, and motivation to buy or sell cannot be

ment with his or her agent. However, when a client has a

shared with anyone else. Here’s an example: Sellers tell

nonexclusive agreement with an agent, the client is fair

the agent that they would lower their asking price from

game to any other agent.

$245,000 to $210,000 if they had to. The agent is not free to disclose this, even if a deal falls through. Linda Hobkirk has seen a number of agents break

Exclusive agreements are in the best interest of the client, which is why the Code offers them protection. With nonexclusive agreements, sellers, for example,

this rule. Her home state of Arkansas allows for dual

may work with several listing agents to list a property,

agency, where an agent or brokerage can represent

but the agent who procures the buyer is the only one

both the buyer and seller in a transaction. The agent or

who gets paid. That offers little incentive for the listing

brokerage must keep the buyer’s and seller’s informa-

agents to work hard for the seller when they know they

tion confidential at all times.

may not receive compensation. In exclusive agree-

But in cases where a deal goes bad and the house falls out of contract, many agents have “loose lips” and start carelessly revealing information about buyers

ments, the client works with one agent, and that incentivizes the agent to do his or her best for the client. Tammy O’Neill, an agent with RE/MAX Fine Homes

and sellers to third parties, assuming their duty to keep

in Newport Beach, Calif., had another agent go after her

quiet ends when the client relationship does, says Hob-

client despite their exclusive buyer agreement.

kirk, an associate with Coldwell Banker Harris McHaney & Faucette Real Estate in Rogers, Ark. “We are very similar to doctors and lawyers in that

“I had an agent go to my client’s house right after I showed that agent’s listing and solicit my client to work with her in finding a home,” O’Neill says. “Yes, she went

we must protect confidential information unless or-

right to the door and tried to steal my client. Needless

dered by a sitting judge to release it,” she says.

to say, it didn’t work, and my client and I closed on a

Some information, however, is not subject to con-

beautiful house.”

fidentiality. For example, since a seller cannot expect

The offending agent’s actions constituted a Code

an agent to conceal significant property defects from

violation because she initiated contact with a client who

a buyer, the seller likewise cannot demand that the

was already subject to an exclusive buyer agreement.

agent keep that information confidential after their busi-

However, there are conditions where certain interac-

ness relationship has ended. Therefore, an agent can

tions between a client bound by exclusivity and another

disclose the existence of property defects to anyone,

agent are fair.

including another agent the seller decides to work with. What the Code Says (Article 16): On the seller side, What the Code Says (Article 1, SOP 1-9): A client can-

sending mass mailings to groups that may incidentally

not require an agent to keep confidential any informa-

include an owner who is exclusively listed with another

tion that would be required to be disclosed to a buyer.

agent doesn’t violate Article 16. However, REALTORS®

Any other information defined as confidential may not

are prohibited from discussing listing a property with

be disclosed. But the question remains concerning

such an owner—unless the owner initiates the contact.

how long the duty of confidentiality lasts. SOP 1-9 says

On the buyer side, SOP 16-9 requires that before a

the duty of confidentiality exists during and after the

REALTOR® enters into an exclusive buyer agreement,

termination of the agency relationship. However, if there

he or she must use reasonable efforts to determine

is a conflicting standard under state law as to how long

whether the buyer is already subject to one. Should the

confidentiality lasts, state law will rule.

REALTOR® find that the buyer is already subject to an

Many states follow the SOP 1-9 standard of confi-

exclusive buyer agreement, the REALTOR® must direct

dentiality, but one state that differs is North Carolina,

the buyer back to his or her exclusive broker unless the

where state law says the duty of confidentiality ends at

buyer directs them otherwise.

the termination of the agency relationship.

REALTORMAG.REALTOR.ORG

Bruce Aydt, abr, crb, writes REALTOR® Magazine’s Ethics column.

REALTOR® MARCH/APRIL 2015

REAL ESTATE AND THE

A growing web of connectivity among people, devices, and homes will upend the way we interact with the world. Here’s a glimpse into how the changes may affect your business and your life. By Meg White

REALTOR® MARCH/APRIL 2015

REALTORMAG.REALTOR.ORG

The buzz is escalating about the “Internet of Things.” The

are small devices, usually powered by Bluetooth, that can be

catchphrase refers to the next wave of technology but also to a

mounted virtually anywhere. They transmit information to nearby

mindset, one that’s already evident in the moment a four-year-old

receptors (often a mobile device that is set up to receive Bluetooth

tries to operate a paperbound book by tapping on an illustration.

data). Beacons can be used to track the movements of people in

The concept behind the Internet of Things, or “IoT” (also

a home—perhaps to automatically turn lights to a specific preset

known as the “Cloud of Things” or “real world web”), is that we’ll

when a particular person enters the room or to transmit informa-

rely on actual computers less and less over the next decade as

tion about the activities of an older adult to a caregiver outside the

technological interfaces are woven directly into products.

home.

“The next generation is not going to understand computers as separate things,” says technology consultant and author Christina Kerley. “When a lightbulb burns out in their house, they’re going to wonder why it didn’t give them a heads-up.” Tech watchers say 2015 is the year IoT will start to go main-

MAKING HOME BUYING SMARTER With the help of beacon technology, house hunting could require a

stream. Indeed, many products already whir constantly in the

lot less effort in the near future. Buyers looking at real-time listings

background of our lives, gathering information on us and the

broadcast on a brokerage’s Internet-enabled window display could

environment. Increasingly, devices will make connections with

be asked if they want to have a video of a certain property sent to

each other, transferring data and coming to conclusions about

them, for example. An early version of this technology exists in

how they should operate based on that data. “We are looking at

an app from Realty Beacon LLC. The Jeffersonville, Ind.–based

re-instrumenting the physical world, [and] 2015 through 2020 are

company pairs Apple’s iBeacon devices with For Sale signs. Daniel

going to be transformative,” Kerley says.

Island Real Estate in Charleston, S.C., partnered with Realty Bea-

IoT tools—at a rudimentary stage today—have yet to

con to produce a branded version of the app for its high-end de-

gain a significant foothold in real estate, but the potential for

velopment. Because the community doesn’t allow For Sale signs,

game-changing progress, along with disruption, is huge. Think of

the beacons are usually mounted on a home’s front porch. The

IoT in 2015 as analogous to the Internet in 1995. Over time, tech-

lack of For Sale signs can present a challenge to buyers, says Julie

nology advances have taught us that we could part with certain

Dombrowski, Daniel Island Real Estate communications director,

aspects of our privacy and autonomy. But concerns are mounting

but the beacons present “an interesting opportunity to circumvent

that the coming decade may see security breaches and leaks of

that. It gives buyers a way to explore the island on their own.”

private information on a scale that was never before possible.

Today, these beacons aren’t much different from QR codes on For Sale signs; buyers near beacon-enabled homes must launch

HOW IoT WORKS

the Realty Beacon app to learn more about the listing. In the future,

Smart home devices that record and transmit data are already

to be open to notifications pushed to their phone via Bluetooth or

creating a buzz in the marketplace. Perhaps the most familiar

similar technology. But tech observers believe consumers will be

such product is the Nest thermostat (made by a company recently

happy to engage if the information is truly useful. “The real inno-

purchased by Google), which can be controlled from a smartphone

vation happens when we use [IoT] to solve problems,” says Kerley.

but over time learns a household’s schedule. Nest settings can be

“The best place to start is by asking, ‘How can I infuse intelligence,

operated by individual users (who can set baselines for water or

connectivity, and data into this customer journey to save myself

electricity use) and integrated with data from institutional hubs

and my prospects time?’ ”

like the National Weather Service or a city’s electrical grid. Such

beacons may not need apps but will likely still require consumers

Though modern beacon technology was developed only a few

devices can serve as a helpful go-between for consumers and

years ago, it’s already being used to augment home tours. Avid

municipal smart grids, moderating energy use at peak times to

Ratings, a customer loyalty management firm for homebuilders

minimize service disruptions. For example, Nest marries its un-

based in Madison, Wis., launched an updated version of its home

derstanding of a household’s habits with data about energy use to

tour software at the International Builders’ Show in Las Vegas

make decisions about the best time to run a load of laundry.

in January. Called GoTour Onsite, the new version uses beacon

Beacon technology is another facet of the IoT world. Beacons REALTORMAG.REALTOR.ORG

technology to enable house hunters to tour a model home on their REALTOR® MARCH/APRIL 2015

mobile device. As they enter each room, customers can immedi-

that could become really effective is being able to say ‘My house is

ately access floor plans, customization options, and videos that

more energy efficient, and I can prove it.’ ”

explain hidden aspects of the home, such as building materials and HVAC systems.

Of course, having all that data available raises red flags concerning consumer privacy. But as the collection of data becomes

“Looking at home options is kind of like drinking from a fire

more widespread, home owners are going to become more com-

hose, so categorizing [options] by room makes the process more

fortable sharing it, Carpenter says. “Think about the world before

manageable,” says Avid Ratings founder and CEO Paul Cardis. And

Facebook. Fifty years ago, people would not talk about themselves

it’s more in line with the way the next generation of consumers

that much,” he says. “If that [data] can help sell the home, people

want to shop. “Millennials don’t want to be sold to,” he says. “This

are going to want to start publishing it.”

kind of ‘museum tour’ option is really self-driven.” House hunters aren’t the only ones who see value in smart

Bill McCaughey, IoT consultant and CEO of Home Energy and Maintenance LLC, a home data management company based in

home tours. Dombrowski says tech-savvy sellers on Daniel Island

Houston, agrees with the cost-benefit assessment, noting that

appreciate the edge. “They see [the Realty Beacon app] as an

eventually the data itself could affect pricing: “If you’ve got five, ten

added service,” she says.

years of operating data, your home will be a little more valuable.” “It’s hard to know exactly how this technology will develop,”

SKY’S THE LIMIT FOR MARKETING

Dombrowski says, “but people seem enthusiastic about it, so you

External sources, such as municipal data, can augment the house

showing schedules and provide information to sellers and listing

hunting experience. In Chicago, researchers from the Urban

agents about the duration of home tours. Beacons could even

Center for Computation and Data, Argonne National Laboratory,

record how much time buyers spent in any given room and note

and the University of Chicago have partnered with local officials to

whether or not they watched a supplementary video, perhaps

launch the Array of Things (arrayofthings.github.io). It’s a net-

hinting at which spots need more attention in terms of staging or

work of interactive sensors collecting both passive data, such as

upgrades, or demonstrating the true selling points that deserve

weather and air quality, and data about how people are using the

extra emphasis in marketing campaigns.

know there will be applications out there.” For example, Internet-enabled lockboxes could help manage

area, by measuring ambient noise and counting nearby Wi-Fi– and Bluetooth-enabled devices (without identifying users). Researchdevelopers can then use the data to create helpful tools. Imagine

TARGETING RETAIL SHOPPERS

an app that combines air quality data with traffic patterns, telling

Beacon technology has some clear applications for commercial

allergy sufferers the best time for a bike ride. Such tools could

property as well, particularly in the retail environment. Because

someday be the difference between extreme buyer’s remorse and

beacons have a long battery life, are portable, and don’t rely

happily ever after, says Chad Curry, managing director of NAR’s

on GPS to pinpoint one’s location, they may be able to replace

Center for REALTOR® Technology.

the more expensive and intrusive “geofencing” technology that

ers plan to make the data freely available as a “public utility.” Tech

Eventually, Internet-connected devices may help you stay connected with buyers after the sale. Home monitoring systems on the

smartphones. Macy’s, Walmart, American Eagle, Walgreens, and

market today, for example, can contact both owners and a list of

Hudson’s Bay Co. were among the first retailers to use beacons in

professionals in case of a flood or other household problems. Con-

stores to offer shoppers special incentives via their phones. The

ceivably, “the real estate professional could be notified and reach

technology has also been applied by companies in the hotel and

out with recommended contractors or information,” Curry says.

airline sectors. In late January, Facebook announced it would begin

While it’s one thing to market a home that’s augmented with

testing its new “Place Tips” service in New York, where its bea-

smart technologies, it’s another to be able to use data from those

cons—installed in eight iconic shops—will notify nearby users via

devices to craft more intelligent marketing. “As you have more

their Facebook mobile app when they’re near these retail options.

connected devices, you build a diary for the home,” says Todd Carpenter, NAR’s managing director of data analytics. “One thing 28

many stores are using to reach out to nearby customers via their

REALTOR® MARCH/APRIL 2015

It’s only a matter of time before malls and retail centers consider offering beacon technology to their tenants. Westfield Group, REALTORMAG.REALTOR.ORG

an Australian firm that owns, develops, and manages shopping

settled charges against TRENDnet Inc., which makes security cam-

centers in the United States and around the world, has a subsidiary

eras that can be monitored via the Internet. The company had not

(Westfield Labs) that is currently testing beacon technology for

secured passwords or online feeds of security videos—exposing

possible use in its locations across the world.

the private lives of customers—though it had made statements in

“You’re going to have retail properties going gaga for this,” says Kerley. “You’ll be able to demonstrate what the foot traffic is like

its marketing that implied the feeds were safe. “The type of consumer harm we saw in the TRENDnet case . . .

at certain times of day, and what parking is available, and just flow

feeds concerns about the Internet of Things overall,” Federal

that information to them on their smart devices.”

Trade Commissioner Maureen Ohlhausen told the U.S. Chamber of Commerce shortly before the final settlement. But the FTC’s

SMART ISN’T ALWAYS SAFE

“unique set of policy and enforcement tools” can help ensure new technologies safely achieve their promise, she said.

In a Ray Bradbury short story, published by Colliers in 1950, a fully automated house burns to the ground, despite all the technology designed to keep it safe. Bradbury’s story was a comment on

THE INEVITABLE LET-DOWN

nuclear proliferation rather than the perils of home automation,

Beyond security, smart devices have other kinks that need working

but the idea that technology requires human oversight is more

out. In the short term, IoT is destined to disappoint, according to

resonant than ever. If a smart home energy system decides that

Chad Davis, senior director of digital media at the National Associa-

the best time to wash your clothes is when you’re away from home

tion of Home Builders. “Right now the Internet of Things is hyped,”

or asleep, does it put you at risk?

Davis told attendees at the International Builders’ Show. As these

Alex Filip is deputy communications director for the Consumer

new products fail to live up to their promise of freeing consumers,

Product Safety Commission, which is closely monitoring smart

there’s bound to be a feeling of disillusionment, he says. Still, IoT is

product designs. Filip says a potentially unsafe product is just as

here to stay. “This is a fundamental shift in what is going to happen

risky when consumers push the start button as it is when trig-

with our industry,” he said. Builders attending the show were cau-

gered by automation. “Whether you start your car, slow cooker, or

tioned by other speakers to watch the development of smart home

furnace remotely is not an issue unless [it] behaves in an unsafe

technology carefully, using the auto industry as a bellwether, and to

manner,” Filip said in an e-mail to REALTOR® Magazine. The agency

be cautious about where they hitch their proverbial wagons.

already cautions against operating certain household appliances,

The hype will likely lead to oversaturation in the market, with

including clothes dryers and dishwashers, when no one is home

countless companies rolling out smart home offerings. There’s

or awake. That warning will continue to apply as smart versions of

little agreement about which platforms to use and how—or even

those products are rolled out.

whether—devices should communicate with each other. “Not

“In the Internet of Things, the expectation is that your smoke alarm and kitchen camera would signal your phone if there were an issue. We are not all in that future yet. Hopefully the hazard will stay in science fiction,” he says. One common fear for consumers is that their house could be

everyone will survive,” says McCaughey. “You don’t want to pick the Betamax provider for your home.” Kerley agrees that there are limitations due to the many competing systems but predicts that will begin to change soon. “2015 will be the year where we have to make the call that there has to

hacked into the same way e-mail and credit card accounts are

be an open system,” she says. “Much like the web uses the same

today. Not only could thieves gain physical access to the home, but

scripting language, that’s going to have to happen.”

they could also be privy to a large volume of information about the

Regardless of bumps in the road ahead, early observers of IoT

owners that might be stored on devices or in the cloud. McCaughey

are optimistic. “Our digital and physical worlds are converging,”

says individual homes would be less appealing to hackers than the

Kerley says. She predicts that 75 years from now, historians will

prospect of a wider invasion involving “a back door that is known to

look back at 2010–2025 as a time of exponential change. “We’re

all hackers,” putting all consumers who own a vulnerable product

going through a renaissance,” she says.

at greater risk. At least one example of a breach has prompted action by the Federal Trade Commission. In February 2014, the commission REALTORMAG.REALTOR.ORG

Learn about the opportunities for associations and MLSs in the Internet of Things. [realtorm.ag/iot-orgs] REALTOR® MARCH/APRIL 2015

What Your Online

[About Me] Says About You By Graham Wood

Should you include details about your personal life in your website bio? If you pose with your dog for a Facebook profile photo, do you look less professional to prospects?

How We Did It REALTOR® Magazine asked practitioners to submit links to their online “about me” bios, social media profiles, and LinkedIn résumés for a chance to have them critiqued

Do you say too much—or too little—about

by a panel of six Chicago-area

yourself on your social media pages?

selected five submissions, from

consumers. In January, we practitioners with from nine to

REALTOR® Magazine invited a panel of consumers—both owners and renters— to view bios and social media profiles from real estate professionals around the country. The panelists said the way you portray yourself online can have a big impact when they’re deciding whether to work with you. Are you sending the right message?

20 years of experience, from the 141 we received. The panelists represented a wide range of ages—from 21 to 67—and backgrounds: Maya Bird-Murphy and Ariella Chavarria, recent college grads expecting to each own a home in the future; Matt and Carrie Bell, a married couple planning to buy a home this summer; Joshua Rolock, a home owner of 15 years; and

The Takeaway If our consumer panel made one thing clear, it’s this: Take care with

June Wood, a renter who sold

your online persona. Craft accurate, error-free online bios and social media profiles,

her condo last year. A big thank

and write them with consumers’ interests in mind. Keep your photos up-to-date and

you to those practitioners

consistent. And use your social postings as a way to bring your personality and your

who agreed to be subjected

value as a real estate professional to life. These steps communicate the essence

to public scrutiny. To see how

of you and your business, so don’t think of them as tiresome chores. You don’t get

they responded to some of the

a second chance to make a first impression. and in the Internet-connected world,

feedback, visit realtorm.ag/

you’re projecting your image 24/7. What will be consumers’ first impression of you?

aboutme-responses.

REALTOR® MARCH/APRIL 2015

REALTORMAG.REALTOR.ORG

Do Your Photos Show You in the Right Light?

Does Your Bio Have a Point?

It’s standard to have a professional head shot on your company

“About me” bios serve as your informal introduction to consumers.

websites, but is that the photo prospects are seeing when they

Here’s where you can get creative, communicating your personal

search for you online? Often, it’s your social profiles that pop up

connections to your neighborhoods or highlighting hobbies that add

first in a Google search. So what kind of a first impression do those

value to your real estate knowledge. Make sure that what you’re saying

profile photos make? Are pictures with pets and friends acceptable?

will have meaning to potential clients and the message you intend to

What about images taken at social events or in a public setting?

send is clear.

Although there’s no right answer, panelists unanimously favored

Avoid vague statements. A professional bio isn’t the place for

agents who used professional photos across online platforms and

stream-of-consciousness musings. Instead, talk about yourself and

cautioned against using any image that appears too casual.

your experience. Panelists said Lubin’s note on his realtor.com® profile

They noted one exception: when a more relaxed picture speaks

that “God isn’t making any more real estate! Therefore, I’ve learned

to your specialty or business acumen. Gregory Burrus Green, an

that buyers buy and sellers sell at any time,” while true, didn’t give offer

associate broker at Village Realty in Nags Head, N.C., sells mostly

them a reason to work with him. Panelist Matt Bell, 30, said general

vacation homes in the oceanside community. So it was perfectly ap-

statements provide little value. “It sounds like he’s having a beer with

propriate for him to use a Facebook profile shot of him and his dog

his buddy—not talking to a client,” Bell added.

on the beach, said panelist Carrie Bell, 30. “He’s showing that he’s

Get personal—then get to business. You can share personal de-

part of the lifestyle he’s selling,” Bell said. “If I were buying a beach

tails—it humanizes you—but don’t belabor the point. Remember that

house, I would see him as someone who gets what I’m looking for.”

clients are seeking a pro with business skills first. The panel liked know-

Panelists generally agreed that photos should have a con-

ing that Green’s family had a 200-year history in his community but

sistency across platforms—especially when it comes to age.

called the details in his bio “overkill.” He should have more succinctly

Seattle-based broker Wayne Lubin with John L. Scott Real Estate,

stated how his family history improves his ability to sell real estate in

for example, used what appeared to be a recent photo on his realtor.

the community, noted panelist Carrie Bell. “I like agents that have a

com® profile, while photos on his company website, Facebook pro-

little bit of personal info in their bios, but mostly business,” she said.

file, and LinkedIn pages seemed more dated. The panelists’ advice:

List hobbies that reflect your expertise. It’s fine to point out

Use photos that depict how you look today—with a similar hair style

activities that tie to your business, but hobbies that don’t seem to add

and color. “It’s about being honest about who you are,” said June

value for the consumer are seen as irrelevant. Diane Werner-Pettinari,

Wood, 67. Photo discrepancies can make you seem disconnected

sres, a sales associate with Grace Realty in Bethlehem, Pa., included

from the up-to-the-minute nature of online information today, she

“watching my flowers bloom” among her personal interests. “It’s not

added.

good or bad that she says that,” said panelist Ariella Chavarria, 21, “but

Worse yet is not bothering to upload a profile photo and allowing the ubiquitous gray silhouette to stand next to your name. That

it doesn’t help me decide whether to use her.” Proofread your copy. The panelists were quick to spot misspell-

sends the message you’re too lazy or time-crunched, or don’t have

ings and missing punctuation in a few of the agents’ bios. The errors in

the technical know-how, to upload an image.

this case weren’t deal breakers, but they were a distraction.

REALTORMAG.REALTOR.ORG

REALTOR® MARCH/APRIL 2015

Can You Back Up Your Story With Data?

Are You Being Social?

It’s popular in professional bios to talk about your ability to nav-

Do you promote your social media profiles in your business

igate tough negotiations, close transactions quickly, and get the

communications? If so, “set it and forget it” is not a good strat-

best price for your clients. Prove it.

egy. That’s because your social media presence can tell potential

Support your claims with stats that illustrate results. The panelists said they wanted to see more profiles that included

tive updates about your community and the real estate market,

information such as how many properties you’ve sold, how close

you send the message that you have the insights buyers and

your sales are to list price, the typical price range of your listings,

sellers need. Long gaps between updates say the opposite.

and how long you’ve been working in real estate. Panelists liked the way realtor.com® profiles provided fields

Even if you’re regularly posting on your personal page, are you keeping up that business page? When the panel convened in Jan-

for agents to fill in such information. Yet only two of the agents

uary, Werner-Pettinari had not updated the status of her Facebook

reviewed had completed the fields. And Nicole Smith, crs,

business page for two months, while Lubin’s had been silent since

sres, broker-associate at RE/MAX Masters in Southlake, Texas,

November 2013. Big gaps like that make you look inactive, said

was the panel’s clear favorite in this regard. On her realtor.com®

panelist Maya Bird-Murphy, 22. “I want someone who’s constantly

profile, Smith noted her 20 years of experience, typical price

working and knows what’s going on right now,” she said.

range of $389,000 to $799,000, seven listings sold in the last six months, and eight active listings. “To be honest, I don’t read bios; this is the only information I

Certainly, the need for a social presence has been drilled into the real estate industry’s consciousness, but the panelists said they’d be more forgiving of an agent with no Facebook business

care about,” said panelist Joshua Rolock, 57. “I want to see some-

page than one with a page that is irregularly updated. “If you’re not

body who is moving property and selling homes for the asking

doing anything with it, take it down,” Rolock said.

price. Show me what you’re doing.” Client testimonials can support your bio, but they must con-

It’s not just the frequency of postings that matter. The content of your updates is also important. Sharing articles, photos, and

tain hard information and not just bloviate. The panelists were

links to listings is a tried and true way to engage followers, but add

strongly critical of agents who posted testimonials that appeared

your own spin to them. Include comments and voice your opinion

overly self-serving.

on the articles you share instead of just silently sharing them.

Thomas Cady, an associate broker with Coldwell Banker

clients as much as—or more than—your bio. With regular substan-

Panelists pointed to Nicole Smith’s Facebook business page as

Vanguard Realty in Jacksonville, Fla., included a testimonial in his

the best example of this. When Smith shared a Jan. 27 infographic

bio in which the client said Cady’s smart marketing efforts led to

from the National Association of REALTORS® highlighting the most

the home being sold for the asking price in 19 days. The time-on-

popular listing and closing dates of the year, she added: “In case you

market figure lent the testimonial particular credibility, consid-

were wondering … in my opinion, EVERY day is a popular closing &

ering many online agent reviews are less detailed and sound

listing day.” Panelists said it was an excellent way to add personality

automated, Rolock said.

to her post and show the human behind the Facebook page.

REALTOR® MARCH/APRIL 2015

REALTORMAG.REALTOR.ORG

RealtoR ® Magazine Q&a with Budge huskey,

President & CeO Of COldwell Banker real estate llC By Melissa Dittmann Tracey, REALTOR® Magazine contributor

How does a 108-year-old real estate brand in tHe country stay fresH and relevant in today’s rapidly evolving market? the Coldwell Banker® brand was started from the ashes of the great san francisco earthquake that leveled the city in 1906. like many of today’s great entrepreneurs, a young colbert coldwell -and later benjamin banker- saw opportunity where others couldn’t and founded a real estate company based on the principles of honesty, integrity, and service. when people think about innovation and disruptive technology today, the technology startups of Silicon Valley are often the first thing that come to mind. in many ways, coldwell banker is the original silicon valley startup. innovation has been part of the coldwell banker dna for more than 100 years. we were the first real estate brand to launch a website, the first to introduce online property search, and the first to embrace video and mobile technology. we’ve learned that the best way to stay on top of our evolving industry is to stay true to who we are as a brand. wHat are some of tHe brand’s more recent innovations? we want to put coldwell banker agents in the best position to win their “unfair” share of listings with a heavy emphasis on the consumer experience. at the end of last year, we launched a new digital platform, which allows sellers to actively participate in the marketing of their home by allowing them to share personal stories, photos, and videos. And in another industry first, we launched cbx, an ipad storytelling

app for our sales associates that uses big data to better engage sellers and allow for a confident discussion about the marketing of their home. cbx provides dynamic information about a home’s potential buyers, such as where they are moving, the types of media they view, market dynamics, and an optional rpr automated valuation model tool. and as we move closer to our goal of delivering a truly integrated technology solution, our associates will benefit from our upcoming rollout of the Zap platform which provides state of the art websites, mobile applications, and a sophisticated crm with predictive analytics to track and score consumer interest. our goal is to arm our people with the best tools possible to win business.

wHat role do sales associates play as tHeir clients sHare comments on tHe new digital platform? coldwell banker sales associates are at the center of the new platform. their clients want to participate in the process of selling their home, and who better to tell a home’s story than its seller? through the new digital platform, coldwell banker sales associates work directly with sellers

to share their stories with potential buyers, putting sales associates in the middle of a more dynamic conversation between buyers, sellers, and sales associates than has been possible in the past. buyers also benefit from this content and they can set up groups of friends and family within the platform to share in the experience of finding the perfect home. wHat are some of tHe benefits tHese innovations give sales associates? the new digital platform and cbx give Coldwell Banker affiliated sales associates unique tools to attract potential home sellers. both tools amplify the work real estate professionals do every day in learning about homes and telling their stories. cbx aids in creating listing presentations that stand out as listing experiences – full of tangible, data-driven information to help plan how a home will be sold. wHat is coldwell banker doing to promote tHe value of Home ownersHip? as a real estate brand, promoting home ownership is at the core of everything we do. as i said before, we are consumercentric. that is our focus. our marketing campaigns drive home the fact that there’s more to a home’s value than the dollars and cents that make up its price. the true value of home ownership includes creating a safe and secure place to host your life. As a brand, we find ways to connect with consumers that are unique in the industry by bringing to life the feeling everyone experiences when they open the front door and can finally say that they are home.

c ol d we l l b an ke r.com/c areers

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N E G O T I AT E E F F E C T I V E LY M A I N TA I N R E L AT I O N S H I P S

Make It Personal Technology captures leads, but the human touch turns them into clients. When it comes to lead conversion, the

at Keller Williams Performance Realty

don’t respond to a phone call, Wagner

Internet could be viewed as a mixed

in Colorado Springs, Colo., Mariana

reaches out to them with text messages.

blessing. Ninety-two percent of home

Wagner assigns the qualification process

“We have a remarkably high response

buyers go online to look at houses for

to administrative staff or does it herself.

rate when we text people,” she says.

sale, according to the National Associa-

“Most people get into real estate because

tion of REALTORS®’ 2014 Profile of Home

they’re really good at negotiating or

handwritten cards that include informa-

Buyers and Sellers. That translates to

they’re really good with people,” Wagner

tion provided by leads during registration.

a potential boatload of Internet leads—

says, “not because they are really good

“We have gotten numerous phone calls

but also to the time-consuming task of

at converting leads.”

thanking us for taking the time to handwrite a note,” she says.

separating the casual browsers from the serious inquiries.

The Human Touch

Wagner’s team puts those who don’t

Wagner, who works primarily with listings,

respond to calls, texts, or cards on a call

Estate in Boulder, Colo., with 104 agents,

has a strong referral base, but she also

and e-mail drip campaign. “The more per-

assign a customer service team to qualify

gets leads from tools such as zBuyer and

sonal you can make these touches, the

prospects by all available means—phone,

AgentMachine and from Facebook ads.

easier it is to convert,” she says. “When

text, or live chat—and match them with

She’s a firm believer in contacting a lead,

you eventually do get a hold of them, they

an agent. Lane Hornung, CEO of 8z, says

usually by phone, within five minutes.

feel like they know you because you’ve

the customer service reps help ease

After that, qualification can take any-

reached out to them on a personal level

prospective clients into the homebuying

where from 10 minutes to two hours. But

on so many occasions.”

process. “The consumer feels less pres-

it’s vital to make contact when the lead is

sure because many Internet consumers

still thinking about real estate, she says.

your fallible, human side. Wagner once

want to stand back a bit,” he says.

“If you wait too long, they are on to other

got a prospect’s attention by mistake:

things, like Facebook,” she says. If leads

She intended to e-mail a report com-

Large brokerages such as 8z Real

As co-owner of a four-person team 34

She also gets a great response to

REALTOR® MARCH/APRIL 2015

The personal touch can also reveal

REALTORMAG.REALTOR.ORG

paring her company’s sales statistics to

on customer service reps to sift through

from 8z’s website is patience combined

national data but forgot to attach the re-

leads. Once an agent connects with a

with quick response and empathy. “You

port. “This started a conversation, which

prospect, having data at the ready is par-

have to put yourself in the other person’s

got us appointments,” she says. “It was

amount. “We use Cloud CMA to immedi-

shoes,” he says.

completely unintentional, but it did work.”

ately provide consumers with granular,

A big part of that is letting clients tell

detailed information about their homes

you how they prefer to be contacted

Combination Approach

and neighborhood,” Chamberlain says.

and adapting to accommodate them.

Mobile technology now plays a big role

(Want to bring more data to your client

Hornung has seen improved conversion

in lead conversion. NAR reports that

interactions? Get the new REALTORS

rates with texting and online chat.

50 percent of buyers used mobile devices

Property Resource® app. There’s no cost,

in their home search. And in 2014, mobile

and it’s exclusively for NAR members.

mode, maintain contact and be able to

Web search exceeded PC Internet search,

See page 37.)

move quickly when the client is ready.

according to comScore. That’s why

Still, never underestimate the impor-

Whatever the communication

“You’ve got to be able to move slow if

Partners Trust Real Estate in Los Angeles

tance of the personal touch, Chamberlain

the consumer wants to move slow,” says

is developing a mobile app that will inte-

says. “Regular, personal contact in-

Hornung. “But if they want to move fast,

grate with its website and CRM system,

creases your chances big time.”

believe me, they expect you to move fast. And if you can’t move fast, they’ll find

says Audie Chamberlain, vice president of marketing. As at 8z, agents at Partners Trust rely

Walk a Mile in Their Shoes

somebody else who does.”

For Hornung, the key to converting leads

By Lynn Olson

Create – Collaborate – Close zipForm® Plus, the industry leading forms software includes collaboration with zipLogix Community. In one place You Create transactions, You Collaborate with clients or peers, then You Close faster. For more information visit www.ziplogix.com

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REALTORMAG.REALTOR.ORG

REALTOR® MARCH/APRIL 2015

how to . . .

Week after week, buyers turned up their noses during showings of the tidy single-story home in the hot San Jose, Calif., market. Their resistance was easy to pinpoint, but harder to address: the aroma from years of heavy cooking with curry was turning off buyers, and the sellers didn’t care. Kathleen Daniels, broker-owner with KD Realty, tried delicately to explain to the sellers that buyers found the scent—which permeated the walls, floors, and furnishings— overwhelming. Still, the sellers refused to undertake a deep cleaning or change their cooking habits. Their resistance cost the sellers time and money at the bargaining table. In an area where time on market was typically just 10 days and bidding wars were the

gest of our senses,” Toth says. “It can

of smells, Toth will sometimes advise

make you form an instant impression.”

clients to introduce subtle, simple scents.

Here are ideas for countering offensive smells in your listings.

norm, the $629,000 home sat on the mar-

sheets between clothes stacked on closet shelves, placing lemon peels in the

ket for 35 days. The sellers dropped their

Don’t Mask. Treat

kitchen garbage disposal, or adding plug-

listing price several times until it eventually

Odor is caused by bacteria that attaches

ins near bathroom doors.

sold for $575,000 in a short sale.

to ceilings, walls, carpets, and draperies. Common household offenders include

Tell Sellers: Live Meticulously

ers off. A 2013 study of Canadian home

pets, food, dirty laundry, mold, smoking

Let clients know of steps they can take to

owners sponsored by Pfizer Canada

residue, and air vents. Identify the source

keep smells at bay. Toth recommends:

found that smoking in a home could re-

of the smell and eliminate it. The remedy

Take out the trash after every meal.

duce the resale value by up to 29 percent.

is likely a professional deep cleaning

Clean refrigerators often.

Daniels views it as a fiduciary duty to talk

or do-it-yourself nontoxic fogger like

Change air filters regularly.

with sellers about the effect odors can

DynoFresh that neutralizes odors. “If you

Do laundry regularly to avoid dirty

have on a home sale. In many cases, sell-

temporarily treat the air with sprays or

ers simply don’t realize the impact, and

plug-ins, the odor will resurface by your

most will be open to your suggestions

next showing,” Toth says.

It’s not just food odors that turn buy-

about how to address the stench. Stager

This may include laying fabric softener

clothing pileups. b

Use the fan over the stove when cooking.

Avoid cooking strong-smelling foods

Tori Toth, owner of Stylish Stagers Inc. in

Add New Smells Sparingly

like fish, broccoli, and garlic before

New York, offers ideas about how to dis-

While air fresheners in large doses may

showings.

cuss this sensitive subject with clients as

send a red flag that the seller is trying to

part of the overall strategy for prepping

mask something, they may be useful in

a home for sale. “Scent can be the stron-

moderation. After eliminating the source

REALTOR® MARCH/APRIL 2015

Bathe pets regularly and clean bedding, toys, and litter boxes often. By Melissa Dittmann Tracey

REALTORMAG.REALTOR.ORG

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PERSONAL INSURANCE Liberty Mutual • Auto, Home, Renter’s REALTORS® Insurance Marketplace • Members Health Insurance Exchange (Major Med) • SMART Short Term Medical • Supplemental plans (Including REALTORS® Core Health) • REALTORS® Dental • Drug Card America MARKETING RESOURCES FedEx Office Ifbyphone® Lowe’s® Multi Merchant Prepaid Card REALTOR Team Store® Xceligent, Inc.

BRINGING YOU DISCOUNTS & SPECIAL OFFERS ON PRODUCTS AND SERVICES JUST FOR REALTORS®

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power of R your membership

Power of R showcases the value of the REALTOR® organization and the impact of REALTORS® in action.

RPR Mobile Expands On-The-Go Property Data Want access on the go to detailed data on more than 166 million

RPR Mobile quickly generates and

parcels of U.S. property? That’s what REALTORS Property Re-

sends custom, branded reports

source® now offers via a mobile app for smartphones. It’s free,

that you can use to respond to leads

it’s easy to use, and it’s only for REALTORS®.

when you’re away from the office.

The app combines all the search features of the desktop

RPR Mobile also syncs to your

RPR with smartphone tools—GPS, camera, text messaging,

search history and library of saved

and voice recording, says RPR Vice President of Marketing and

reports—even those generated from

Social Media Reggie Nicolay.

the desktop version—so there’s

Different from consumer-focused property data apps, RPR

no need to log in from a computer

Mobile is a robust back-end tool for accessing not only current

to send property reports, listing

and historical MLS data but also valuation, assessment, deed,

presentations, comp analyses, or

foreclosure, school, and market trend information, as well as

market activity reports.

photos and maps. When you log into RPR Mobile on your smart-

Since it launched last Sep-

phone, the app can find your location via GPS, so data on nearby

tember, the app has gained new

properties is queued up and ready to view without having to

features, including the ability to draw custom search areas,

search.

access local school information, run searches based on school

You can snap photos at showings, record your spoken observations using your phone’s microphone, or type a text memo and then add these files to the personal notes section of any

attendance zones, and customize the cover page photo of property and seller’s reports. RPR Mobile, like the desktop version, is available only to

property in RPR. Your notes sync with the desktop version and

members of the National Association of REALTORS®. iPad and

are available only to you.

Android tablet versions of the app are expected out this sum-

Besides accessing property and market trend information,

mer. For more information and to download, visit m.narrpr.com.

Safety in Focus NAR launches new training and resources

“Always tell the truth even if it’s not what the client wants to hear.”

NAR President Chris Polychron is making

of safety apps for smartphones, office

safety on the job a paramount focus of

safety forms , a list of experts available

the association with a variety of new

for safety training, and a free, download-

resources for members. “REALTORS®

able REALTOR® Safety Tips wallet card.

are public figures in a sense and that

In the works for 2015 are safety webinars,

The Little Blue Book: Rules to Live by

means our profession involves risk. It’s

new videos, weekly safety tips shared

for REALTORS® is a collection of business

up to each and every one of us to work

via NAR’s social media accounts, and a

tips and insights from NAR members pre-

together to eliminate that risk and stay

tip-filled safety booklet. A safety course

sented in a light-hearted way. Its practical

safe. NAR is committed to helping with

will be offered during the REALTORS®

advice is targeted to both new agents

new classes and tools,” says Polychron.

Legislative Meetings & Trade Expo in

and seasoned professionals. The guide is

NAR has expanded its resources on

Washington in May. Visit realtor.org/

available for download as an e-book and in

realtor.org/safety, including a rundown

safety to learn more.

print at realtor.org/store/LBB.

REALTORMAG.REALTOR.ORG

— The Little Blue Book: Rules to Live by for REALTORS®

REALTOR® MARCH/APRIL 2015

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power of R your impact

Power of R showcases the value of the REALTOR® organization and the impact of REALTORS® in action.

Working Through the Distress When clients experience financial or emotional hardship, agents can help them get back on track. Moving Toward a Brighter Future

A Second Chance at the Dream

When Sarah and her husband divorced in 2011, she was left with

Christine and Matt Rockwell feared their days as home owners

the mortgage and the rest of the expenses on the home they had

were over when they lost their Battle Creek, Mich., home to

built in Dallas, Ga., five years earlier. Sarah, an educator, received

foreclosure in 2011. But last year, they nervously approached

child support for their two sons, which helped with the bills, but

Paul McIntyre, an agent with Jaqua, REALTORS®, in Battle

when her ex lost his job in 2013, his contributions dropped by

Creek whom they had consulted during their foreclosure, in

more than half. Sarah could no longer afford her home.

the hope that they could get a second shot at the dream. Since

“I wasn’t sure what to do or what options I had,” says Sarah, who, for privacy, didn’t want her last name used. Stress, uncer-

Their finances had stabilized, but they had no clue whether

tainty, and fear defined her world. That’s when she reached out

they’d be considered eligible.

to Krystine Torella, broker-owner of Team

Krystine Torella

“Paul’s willingness to work with us convinced me that it

Torella Realty in Marietta, Ga. It turned

could become a reality” to own a home again, Christine Rock-

out Torella’s empathy and sensitivity

well says. “Instead of running screaming in the other direction,

matched her sales expertise. Though

Paul rolled up his sleeves and said, ‘Let’s do this thing.’ ”

Sarah’s home was $100,000 underwater,

With McIntyre’s help, the couple found a house they loved.

Torella helped her navigate the short sale

The financing looked like it was a go, but then the lender

step by step. “I had so many emotions,

reconsidered the past foreclosure and pulled back. “We were

ranging from hurt and anger to elation

crushed and thought our dream would end there,” Rockwell

that I wouldn’t have to worry anymore. No matter how I felt,

says. “But Paul jumped into action, put us in touch with a

Krystine was always there with a smile and a cheerful word.”

lender who could work with us, and put a rush on everything.”

Sarah’s ex-husband’s name was still on the mortgage, so

McIntyre counseled the Rockwells to apply for an FHA

Torella kept in contact with him separately about the process.

mortgage, which generally has more lenient requirements

“She talked with him by phone and e-mail, which put him at ease,”

after foreclosure than a conventional loan. He worked with

Sarah says. “Looking back, I’m not sure the sale would have hap-

the seller’s agent to get the seller’s bank to agree to a longer

pened without her intervention.”

timeline for the closing. The transaction closed at the end of

Torella says it was a balancing act getting Sarah and her ex on the same page about the sale, but her main goal was to help

2011, the family of six had been renting a cramped apartment.

February. “This has been

Sarah weather a difficult situation. “I wasn’t there because I

a challenge for ev-

needed a quick sale,” Torella says. “I was there to give her hope

eryone involved,”

about what comes next.”

Christine Rockwell

Sarah’s home went under contract within a week of coming

says. “But Paul

on the market. She and her children now live in a two-bedroom

worked hard to

condo in Marietta. Sarah and her ex-husband “now have clo-

bring everything

sure,” Torella says.

together for us.”

REALTOR® MARCH/APRIL 2015

Paul McIntyre, left, with Matt and Christine Rockwell and their four children after they closed on their new home in February.

REALTORMAG.REALTOR.ORG

“Reputation and integrity of the brand has taken our company to new heights in both the Las Vegas and Phoenix/Scottsdale markets. We are incredibly honored and proud to carry the Berkshire Hathaway HomeServices name.” Mark Stark CEO Berkshire Hathaway HomeServices Nevada Properties and Arizona Properties TOGETHER WE’RE RAISING THE BAR.

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©2015 BHH Affiliates, LLC. Real Estate Brokerage Services are offered through the network member franchisees of BHH Affiliates, LLC. Most franchisees are independently owned and operated. Berkshire Hathaway HomeServices and the Berkshire Hathaway HomeServices symbol are registered service marks of HomeServices of America, Inc.® Information not verified or guaranteed. If your property is currently listed with a broker, this is not intended as a solicitation. Equal Housing Opportunity. BHH Affiliates, LLC, 18500 Von Karman, Suite 400, Irvine, California 92612 (949) 794-7900 For New York Residents: This advertisement is not an offering. An offering can only be made by a prospectus filed first with the Department of Law of the State of New York. Such filing does not constitute approval by the Department of Law. For Minnesota Residents: BHH Affiliates, LLC is registered in the State of Minnesota, Registration number F-7072.

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