Page 1

p 12

"Fair Housing Means a Place to Call Home�

in 2012 Poster Contest

Rethinking Our Rethink of Homeownership

p 17

Grow With Diversity

p 10

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President’s Perspective Cathy A. Werner


Fair Housing Month REALTORS® across the nation commemorate the passing of the Fair Housing Act legislation each April by celebrating Fair Housing Month. The landmark legislation was enacted in 1968.

In This Issue A feature article, Grow with Diversity—A Winning Business Strategy, submitted by The MAR Equal Opportunity/Cultural Diversity

Maryland REALTORS® especially honor fair housing through its

Committee, provides tips and other information about working with

nationally recognized annual Fair Housing Poster Contest. This year,

culturally diverse buyers and sellers. (See page 17.) Maryland Department

Local Boards reached out to schools and children’s organizations in

of Housing and Community Development Secretary Ray Skinner writes

communities across the state to submit beautiful posters depicting the

about his perspective on why ‘homeownership matters’ on page 10.

theme, “Fair Housing Means a Place to Call Home.” Thirteen posters have been selected to appear in a colorful calendar (see page 12). The winning students will be honored during a recognition ceremony at the Statehouse in Annapolis.

Volunteer—it’s not a good time— it’s a great time Reactivate your business contacts—join an MAR committee. Just complete the simple auto fill Committee Volunteer form at Scroll on the left sidebar to Association Info and then to Committee Volunteer Form. Log on and complete the form.


Value of MAR Membership From time to time our members asked “what do I get for my dues dollars?” I always respond that the benefits of membership are invaluable. We now have equated a ‘dollar value’ which will amaze you. Check out page 8. And then visit for “detailed benefits of membership.”

September12-14, 2011 Go to for complete registration details M A R Y L A N D R E A L T O R ® April/May 2011


April / May 2011



8 MAR Membership benefits

10 Rethinking our rethink of homeownership 12 Fair housing means a place to call home 2012 Poster Contest 14 10 Facts Real Estate’s Role in the Maryland Economy


17 Grow with diversity A Winning Business Strategy 22 Call for Entries MAR Prestigious Awards

table of contents Departments


3 PRESIDENT’S Perspective


24 Regulation News Regulatory Initiatives in the 2011 Maryland General Assembly 26  MARYLAND REAL ESTATE COMMISSION NEWS 2011 Legislative Agenda Includes Sunset Bill 27 Special Legal Q & A (Commercial Connection is on hiatus this month) 28 MRIS UPDATE MRIS Rules and Regulations 30 snippets & Industry tips 32 FROM THE HOTLINE FHA Condo Certification 34 RESIDENTIAL SALES Life after Tax Credits


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2011 Maryland Association of REALTORS® Leadership Team

Maryland Association of REALTORS® 200 Harry S Truman Parkway | Suite 200 Annapolis, MD 21401-7348 800.638.6425 |

Cathy A. Werner President RE/MAX American Dream 9414 Belair Road Baltimore, MD 21236-1504 410.529.7900 Fax 410.529.7906

Patricia A. Terrill President - Elect Prudential Carruthers REALTORS® 7500 Coastal Highway Ocean City, MD 21842-2937 410.524.7000 Fax 410.524.5695

Executive Leadership Team Cathy A. Werner | President Patricia A. Terrill | President-Elect Carlton J. Boujai Jr. | Secretary Carole A. Maclure | Treasurer Steve Meszaros | Immediate Past President Mary C. Antoun | Chief Executive Officer

Editor Deborah L. Hager |

Advisory Committee Ken Montville | Chair Ron Howard | Vice Chair

Advertising & Publication Design

Carlton J. Boujai Jr.

Carole A. Maclure

Secretary Exit Realty Prosperity Group 5300 Westview Drive Suite 105 Frederick, MD 21703-8339 301.698.8700

Treasurer Long and Foster Real Estate, Inc. 4650 East West Highway Bethesda, MD 20814-5330 301.907.7600 Fax 301.907.6610

Art Comp & Design Alison Cooper | Senior Designer 1921 York Road, Timonium, MD 21093 410.252.4027 |

Mission Statement The Maryland Association of REALTORS® exists to support all segments of its membership and their specialties. The Maryland Association of REALTORS®, through collective efforts with local boards/associations and the National Association of REALTORS®: ■ Develops and delivers programs, services and related products that

maintain and elevate the high standards of the real estate business and the professional conduct of its practitioners; ■ Assists members in ethically and professionally serving the public; ■ Promotes and preserves the right to own, transfer and use real

property; and ■ Protects the right of members to conduct business within a framework

of fair and reasonable laws and government regulations. In principle and in practice, the Maryland Association of REALTORS® values and seeks diversity and inclusive participation within the field of real estate and recognizes each member as a unique individual.

Steve Meszaros Immediate Past President Yerman, Witman, Gaines & Conklin Realty 1500 Whetstone Way Suite 100 Baltimore, MD 21230 410-401-3600


M A R Y L A N D R E A L T O R ® April/May 2011

Mary C. Antoun Chief Executive Officer Maryland Association of REALTORS® 200 Harry S Truman Parkway, Suite 200 Annapolis, MD 21401-7348 800.638.6425

Maryland REALTOR® (USPS 0016-017) is published bimonthly by the Maryland Association of REALTORS®, 200 Harry S Truman Parkway, Annapolis, MD 21401-7348. Periodical postage paid at Annapolis and additional mailing offices. Postmaster send address changes to: Maryland REALTOR ®, 200 Harry S Truman Parkway, Annapolis, MD 21401-7348. Member subscriptions of $3.81 are paid with annual dues. This publication is designed to provide accurate and authoritative information regarding the subject matter covered. It is offered with the understanding that the publisher is not engaged in rendering professional advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. Articles that appear in Maryland REALTOR® are an informational service to members. Their contents are the opinions of the authors alone and do not necessarily represent those of the Maryland Association of REALTORS®. Permission to reprint articles appearing in Maryland REALTOR® magazine must be requested in writing. Also include purpose for request. While this magazine makes a reasonable effort to establish the integrity of its advertisers, it does not endorse advertised products or services unless specifically stated. ©2010 Maryland Association of REALTORS®, Inc.



President’s Perspective

Continued from page X



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M A R Y L A N D R E A L T O R ® April/May 2011

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Raymond A. Skinner, Secretary

Maryland Department of Housing and Community Development

Rethinking Our Rethink of Homeownership Last September, a Time Magazine cover carried the thought-provoking headline: “Rethinking Homeownership: Why Owning a Home May No Longer Make Economic Sense.” Quoting economists and other academics, the story asserts, “Homeownership has let us down,” and questions the wisdom of decades of public policy, from programs designed to open opportunities for low to moderate income families, to the mortgage interest and property tax deductions that benefit even the wealthiest families.


M A R Y L A N D R E A L T O R ® April/May 2011

I guess it’s not surprising we’re having second thoughts. We are only slowly emerging from one of the deepest economic downturns since the Great Depression, a downturn sparked by the epic collapse of the housing market. And even as other sectors of the economy show signs of revival, the housing market remains fragile, very much like a patient recovering from acute pneumonia – shaken and pale and weak, liable to be carried off by the slightest breeze. One could argue that it wasn’t homeownership that let us down, but certain unsavory Wall Street characters who abandoned traditional market safeguards and embraced exotic, get-rich-quick financial products that were patently unsafe and in some cases predatory. But one probably would be arguing in vain. A national narrative has emerged that focuses the blame on predatory borrowers, rather than on predatory lenders.

The danger is that this perception, however false, may begin to drive national policy. Even as you read this, Congress is considering Draconian cuts in affordable housing programs, and the Obama administration is eyeing proposals that either would eliminate or drastically alter Fannie Mae and Freddie Mac, the two government-sponsored enterprises that helped open opportunities for low, moderate and middle class families in postDepression America. To state this as forcibly as I can: Homeownership is still a good idea. It remains an American Dream worth pursuing. Every family with the financial wherewithal and the desire to own a home should have the opportunity to do so. Homeownership is a laudable long-term goal even for those families that do not yet have the financial capacity to achieve it. In January, the Federal Reserve Bank of Philadelphia published an interesting discussion paper on this very issue. In “Building Sustainable Ownership: Rethinking Public Policy toward Lower-Income Homeownership,” author Alan Mallach concludes that the preponderance of research supports the view that homeownership carries significant social and economic benefits for most middle class families. Homeowners experience heightened self-esteem, are more likely to contribute to the civic life of their communities, and their children do better in school. Homes remain the principal means whereby families accumulate wealth and leverage credit. Many of these benefits diminish when low income families are pushed into homes they cannot afford, Mallach found, or when those families purchase substandard homes in undesirable neighborhoods, where they are burdened by high maintenance costs and their homes do not appreciate in value.

Many of those families would be better off living in affordable rental housing, the author concludes. I am proud to say Maryland policy mirrors many of Mallach’s recommendations and findings. Working with lender partners and our partners in the Maryland Association of Realtors®, the Maryland Mortgage Program helps thousands of qualified homeowners obtain safe, 30-year fixed mortgages at an affordable interest rate. Downpayment and closing cost assistance, if needed by the borrower, is also available through our program. Just as importantly, each Maryland Mortgage Program family receives in-depth counseling so that they better understand the terms of their loan and the rights, responsibilities and expectations that accompany homeownership. At the same time, Maryland makes use of federal and state resources to increase the availability of quality, affordable rental housing throughout the state. Rethinking homeownership at this time is perhaps inevitable. But I agree with U.S. Department of Housing and Urban Development Secretary Shaun Donovan, who told Congress that the goal must be to fashion a balanced national housing policy that ensures all Americans have rental options near good schools and good jobs; access to credit for those in a position for sustainable homeownership; assistance for those who are feeling the strain of high housing costs; and above all, “choices in housing that makes sense for them and their families.” For further information about housing issues in Maryland, visit

M A R Y L A N D R E A L T O R ® April/May 2011


"Fair Housing Means a Place

to Call Home”

in 2012 Poster Contest

Each year, members of the Maryland Association of REALTORS® (MAR) Equal Opportunity/ Cultural Diversity Committee partner with local schools and organizations to encourage and promote understanding of equal opportunity in housing through a Poster Contest. The theme for the poster drawings is “Fair Housing Means a Place to Call Home.” Winners are chosen from three entries submitted by the MAR local boards and associations. Thirteen winners were chosen, including one to appear on the cover of a colorful calendar. Students from around the state in grades K-8 are eligible to participate. They are asked to illustrate the theme and what it means to them. Winners are awarded with certificates and a gift card co-sponsored by BB&T Bank. Winners, their family members, faculty, REALTORS® and dignitaries will be invited to attend a recognition ceremony at the Maryland Statehouse. Governor Martin O’Malley is invited to present the students with their certificates. This April marks the 43rd anniversary of the enactment of the federal Fair Housing Law, Title VII of the Civil Rights Act of 1968, prohibiting discrimination on the basis of race, color, creed, national origin, sex, familial status and handicap and encourages fair housing opportunities for all. The Calendar Poster Contest is a visible way for Maryland REALTORS® to express their professional commitment to Fair Housing. It has


M A R Y L A N D R E A L T O R ® April/May 2011

become popular with schools and communities as well as the real estate profession as a highly effective way to raise public awareness of the laws prohibiting housing discrimination. And it celebrates our commitment to making housing available to all. The more than 12,000 free calendars are distributed statewide and nationally to promote the principles of Fair Housing.

Calendar Contributions: Join your colleagues by giving a contribution to help defray the 2012 calendar production costs. Your name and company will appear on the “contributor” recognition page of the calendar. 12,000 calendars will be distributed. Find the Contribution form: publications/toolkits/ and then “fair housing calendar contribution.”

Kasey Chan • Prince George’s County Kenmoor Middle School • 8th Grade

Zoe Maliszewskyj • Frederick County Middletown Middle School • 7th Grade

Sierra McKinnon • Anne Arundel County Centerpoint Church • 1st Grade

Keonte Wilson-Robinson Baltimore County • Mars Estate Police Athletic League • 5th Grade

Logan Lamb • Montgomery County Olney Elementary • 5th Grade

Tori O’Neill • Carroll County East Middle School • 6th Grade

Shannon Poole • Cecil County Boys & Girls Club of Cecil County 4th Grade

Ryan Hungerford • Somerset County Princess Anne Elementary • 4th Grade

Spencer Metz • Harford County Churchville Elementary • 3rd Grade

Olivia Sload • Howard County Glenelg Country School • 8th Grade

Christiana Anderson • Washington County Homeschool • 6th Grade

Emily Nevala • St. Mary’s County The Kings Christian Academy LLC 6th Grade

Katya Yewell • Frederick County The Visitation Academy • 8th Grade

M A R Y L A N D R E A L T O R ® April/May 2011



FACTS Real Estate’s Role in the Maryland Economy Full report (April 2011) can be found at Real estate services


contributed $43.9 billion of value to Maryland’s gross state product in 2008, an increase of 12.5% from 2006.


Maryland’s median real estate tax burden increased 22% in 2009 to $2,774, compared to the national median of $1,917.

Maryland’s real estate industry, including real estate, finance and insurance services and construction activities,

supported 370,000 jobs in 2009, approximately 15% of the state’s job total.



M A R Y L A N D R E A L T O R ® April/May 2011

$19 billion in associated wage/ salary income— more than $50,000 per job.

Real estate operations supported nearly

$55 billion in business sales activity. Real estate was responsible for more than one-fifth of the state’s total sales of goods and services.


Maryland ranks 10th among all states for its reliance on property taxes as a major revenue source.


Maryland ranked 11th nationwide in terms of total real estate tax burden, compared to 13th in 2005.


Between April 1, 2008 and April 30, 2010, approximately

105,000 homes were sold in Maryland. More than half of those home-

buyers took advantage of the federal tax credit. An estimated 20% of sales would not have taken place without the credit.

Real estate related revenues accounted for 49% of total county revenues in FY 2010, or over $6.7 billion.



Real estate related jobs were associated with almost



For every 100 lost real estate jobs, there are an additional 64 jobs lost. Those 164 jobs mean a decline of $8.4 million in income and $26.6 million in decreased business sales.

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By MAR Equal Opportunity/ Cultural Diversity Committee

There is an emerging critical factor in developing a successful real estate business in today’s market: planning a diversity-oriented practice. M A R Y L A N D R E A L T O R ® April/May 2011


Grow With Diversity

Continued from page 17

Changing demographics in Maryland indicate that there are many potential clients moving rapidly into the homeownership market—a promising opportunity to grow your business. Consider the following:


 he Hispanic community is the fastest T growing demographic group in the state (and in the country).

i  All of the state’s population growth in the

past 10 years flows from African Americans, Asians and Hispanics moving to Maryland.


 he Asian and Pacific Islander population T (including Hawaii and the Philippines) is expected to grow 175% by 2025, from 260,000 in 2005 to 406,000.


 y 2025, Maryland will be among a host of B states and the District of Columbia in which racial and ethnic minorities will outnumber whites. Nationally, one out of four people will be either Hispanic or Asian in ethnic makeup.

i  The Joint Center for Housing Studies has

concluded that the “echo-boom” generation (dominated by second-generation Americans)—those born between 1986 and 2005—will have a significant impact on demand for starter homes, while baby boomers will strengthen demand for senior housing.

How can you use these developments in extending your business to this growing segment of the homebuying population? The same way you would in designing any business


M A R Y L A N D R E A L T O R ® April/May 2011

plan based upon a changing market—focus on how to adapt to those changes. In this case, there are three keys to keep in mind:

i  Build or expand your understanding of cultural differences.

i  Offer appropriate services to these populations.

i  Understand and enjoy other cultures to build relationships and to open lines of communication.

It is important to develop thoughtful guidelines for working with different cultures. When incorporating diversity into your marketing and selling practices, be sensitive to experiences and each culture’s heritage. Use practices that make clients feel comfortable, informed, and valued. Remember that with all these ethnic groups, it is important to your business success to build long-term relationships.

TIPS: 1. To show that you embrace others’ differences, practice attitudinal skills: Extend respect to whomever the customer cares about (especially elder household members); obtain the correct names and connections; show good intentions and follow up on promises. 2. To show sensitivity to needs and feelings of others, practice communications skills: Learn at least a few phrases of the other’s language; talk less, listen more; take the blame for language difficulties.

3. To show positive regard for others, practice skills in manners: Be punctual, even if it may be an uncommon cultural norm; be polite and do not initiate informal physical contact; avoid standing with hands in pockets, crossing legs or showing soles of feet. 4. Beware of non-verbal


i  Re-adjusting physical distance i  Averting eye contact i  Scowling, frowning i  Laughing at the wrong time i  Covering face

i  Remaining silent/Not asking questions to clarify or show interest

i  Displaying impatience

5. Develop cross-cultural listening skills:

i Pay attention to the person as well as the message

i Don’t assume wants or needs - Learn as much as you can about the traditions and beliefs of your targeted potential clients.

i Create rapport and adjust to the other person’s style and formality

M A R Y L A N D R E A L T O R ÂŽ April/May 2011


Grow With Diversity

Continued from page 19

i  Share meaning - Take care to translate

English words and phrases appropriately. Not everything translates word for word.

i  Request information in a way that does not bias or inhibit the other person’s response

6. Reassess how you manage the client relationship:

i Maintain confidence in transaction value and fairness.

i  Emphasize shared values. i  Be discreet and respectful. i  Overcome prejudices and stereotypical thinking.

i  Follow the client’s timetable. i  Do not exceed your expected role.

7. Build your expertise about sensitivity to diversity and diverse cultures:

i Celebrate Fair Housing-Diversity Month in April at your real estate office

i Take the NAR class At Home with Diversity (formerly One America)

i Read Kiss, Bow and Shake Hands, by

Terri Morrison and Wayne A. Conaway

i Attend a local meeting of the Asian Real Estate Association of America (AREAA), Maryland Hispanic Real Estate Industry Association (MHREIA) or National Association of Real Estate Brokers (NAREB)

i Come to Diversity Day at MAR on May 5, 2011


M A R Y L A N D R E A L T O R ® April/May 2011

Sources: “AT HOME WITH DIVERSITY,” National Association of REALTORS® Projected State Populations, by Sex, Race, and Hispanic Origin: 19952025 (Numbers rounded to nearest thousand. Resident population:

Series A projections. For more details, see PPL #47, “Population Projections for States, by Age, Sex, Race, and Hispanic Origin: 1995 to



The State of the Nation’s Housing 2010, Center for Housing Studies htm

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Call For Entries MAR PRESTIGIOUS AWARDS ALL ONLINE FORMS CAN BE PRINTED, COMPLETED, AND SUBMITTED ONLINE MAR takes great pride in awarding industry honors to outstanding practitioners in the real estate field. The awards are presented during the Annual Conference in Ocean City. We encourage Maryland REALTORS to apply. To learn more about each award, go to the MAR Homepage and look for 2011 Annual Conference under “EVENTS” and view “Awards.” The Rookie REALTOR® of the Year Award recognizes a REALTOR® in the business four years or fewer, who has demonstrated excellence in knowledge, work production, civic activity, and service to their local, state, and/or national Associations. Nominations can be made through local Associations or directly to MAR. DEADLINE - June 17, 2011

Associations that have demonstrated an extraordinary record through direct local Association community service involvement. The recipient Boards/Associations will receive the following cash contribution to the charity(ies) of their choice: First Place – $10,000; 1st Honorable Mention – $5,000; Special Project – $1,000. DEADLINE June 24, 2011

NEW IN 2011

The MAR Community Service Award honors individual REALTOR® members who give unselfishly of their time to assist the communities in which they live. DEADLINE June 24, 2011

The REALTOR of the Year (ROTY) Award criteria requires that nominees must sign the application to verify that it is accurate and complete. One ROTY application is required to be submitted by each local Association to be entered in the MAR competition. The recipient of the State Award will represent Maryland at a recognition ceremony during the NATIONAL ASSOCIATION OF REALTORS® (NAR) Annual Convention. DEADLINE - JUNE 24, 2011

The Community Service and REALTOR® Excellence (CARE) Award - is given to Local Associations for community service and charitable actions. The award is designed to raise the profile of REALTORS® and the REALTOR® organization by focusing on


For a complete list of award, criteria, and deadlines visit If you have comments or questions, please contact the MAR Communications Department at 800-638-6425.


M A R Y L A N D R E A L T O R ® April/May 2011

The MAR CARE Committee is introducing a “Special Project” award, which will be considered as the 2nd Honorable Mention with the prize of $1,000. See complete details at the MAR Annual Conference website Events/2011AnnualConference.aspx This award will not be given to an individual. Nominations are accepted from local Associations. DEADLINE - June 24, 2011

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Regulation News Mark Feinroth

Regulatory Initiatives

in the 2011 Maryland General Assembly

At the midway point in the 90 day annual Session of the Maryland General Assembly, there are several bills under consideration that could greatly expand regulatory authority in the real estate market.

community association, such as a condominium council, homeowners association or cooperative housing authority. The registry would be compiled by the Department of Labor, Licensing and Regulation. A willful violation of the requirement to register is defined in the legislation as a misdemeanor punishable by a fine not exceeding $1000. A more comprehensive regulatory framework for those who manage common interest communities is sponsored by Delegates Davis (D-District Heights) and Vaughn (D-Landover). HB 592 would require licensing for

Three proposals would begin to regulate managers of common interest

community managers along with a requirement for completion of a

communities, such as homeowner and condominium associations.

training program. Applicants for a community manager license would be required to pass an examination and maintain at least $2 million in either


House Bill 537, sponsored by Del. Braveboy (D-Mitchellville) would

an employee dishonesty insurance policy or a fidelity bond. The legislation

establish a registry of businesses that provide management services for

also provides for an eleven member “State Board of Common Interest

common interest communities. An annual registration fee of $250 would

Managers� empowered to establish licensing fees and discipline licensees

apply to any entity or individual who provides management services to a

for gross negligence or other violations.

M A R Y L A N D R E A L T O R ÂŽ April/May 2011

HB 942, offered by Del. Beidel (D-Linthicum), is similar to the Davis/

Other bills that could result in new regulatory programs for aspects of the

Vaughn bill, in that it also proposes an eleven member board of common

real estate industry include:

interest community managers with authority to set and collect licensing fees and also power to discipline licensees for violations of law or

HB 1181 and SB 658, requiring the registration and regulation of appraisal

regulation. Del. Beidel’s legislation requires that all funds held by a

management companies; and

licensed manager on behalf of a common interest community must be covered by a fidelity bond. To be eligible for a license, an applicant must

HB 717, prohibiting in state law the practice of requiring the purchase of

complete a training program, have twelve months’ experience in providing

title insurance from a particular title insurance provider as a condition of

management services for common interest communities and hold an

the sale of residential real estate.

active designation from the Institute of Real Estate Management. Please feel free to contact Mark Feinroth, Director of Regulatory Affairs, As of this writing, in March 2011, it appears that these bills will be

at if you have questions about these or any

considered for “summer study” and reconsidered during the 2012

other bills pending before the General Assembly.

legislative session. Mark Feinroth, Esquire, Director of Legal and Regulatory Affairs Maryland Association of REALTORS®

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Maryland Real Estate Commission News Katherine Connelly

2011 Legislative Agenda

Includes Sunset Bill

There are several legislative proposals under consideration by the General

recommended that the Commission develop an online tracking system for

Assembly that will directly impact real estate agents and brokers. One

licensee continuing education credits. We have already begun work on an

such proposal winding through the process will determine whether the

online CE credit tracking system, a service enhancement the REALTORS®

Real Estate Commission continues its work on behalf of consumers and

have also requested, which will be linked to the online license renewals. We

licensees for the next decade.

hope that the new CE credit tracking will be ready for testing next year.

Every ten years, the Maryland Program Evaluation Act requires the

The sunset review staff examined the Commission’s handling of consumer

Department of Legislative Services to review nearly every facet of State

complaints against licensees and found that a few guaranty fund claims

government and prepare a comprehensive report for the legislature as to

every year are not fully covered because the statute contains a $25,000

whether there is a continued need for each program. These decennial

reimbursement limit. The Guaranty Fund cap has only been raised once

program reviews are known as “sunset reports” because if the General

in the last 40 years, and the staff recommended increasing the cap to

Assembly does not take action to continue the program, it is discontinued.

$50,000. That recommendation is included in the Real Estate Commission Sunset Extension Bill (HB 357/SB 234).

The Real Estate Commission sunset review was completed this past October and forwarded to the General Assembly, with the recommendation

Currently this legislation is pending in both the Maryland House of

that the Commission continue its operations for another ten years. There

Delegates and Senate. We are working cooperatively with the Maryland

were also five staff recommendations to improve the Commission.

REALTORS® to ensure that the legislation becomes law this year.

Recognizing that the Commission has experienced difficulty in retaining

For additional information on the sunset report and legislation or any

consumer members who were surprised by the significant time

other legislative proposals concerning the Real Estate Commission, please

commitment associated with serving on the Real Estate Commission, the

feel free to contact me at

staff recommended pre-appointment outreach to potential consumer members of the Commission and post appointment training. They also


M A R Y L A N D R E A L T O R ® April/May 2011

Katherine Connelly is the Executive Director of the Maryland Real Estate Commission For more information, visit

Special Legal Q & A Colette Massengale , Esquire

Correct Use of

Mutual Release Addenda Question:

My question relates to appropriate use of the MAR Mutual Release of Obligation Under Contract of Sale/Mutual Release of Deposit Agreement and the Unilateral Notice of Termination Under Contract of Sale/Mutual Release of Deposit Agreement. What is the difference between one party terminating the agreement and both parties executing a contractual release agreement?


Essentially, the difference lies in whether the Contract permits one party to terminate the agreement under certain conditions (unilateral termination), or whether both parties agree to terminate the Contract and release each other from their respective obligations to perform under the Contract (contractual or mutual release). Certain provisions of the MAR Contract permit a Buyer or Seller to terminate the Contract without obtaining consent from the other party (unilateral termination). One such provision is the “Time is of the Essence” paragraph, which permits either party to terminate the Contract unilaterally when the other party fails to perform within the agreed upon time frame. Where unilateral termination is permitted in the Contract, a Buyer or Seller may use the Unilateral Notice of Termination Under Contract of Sale. Once the Buyer or Seller delivers the Unilateral Notice of Termination Under Contract of Sale to the other party, the agreement is cancelled, and neither party has any further obligation to perform. Note, the bottom section of the Unilateral Notice of Termination Under Contract of Sale, the Mutual Release of Deposit Agreement, is a separate agreement. The Buyer and Seller may execute the Mutual Release of Deposit Agreement where the Buyer and Seller agree on how the Deposit should be disbursed. A party may deliver the Unilateral Notice of Termination Under Contract of Sale to the other party without executing the Mutual Release of Deposit Agreement.

In contrast, a contractual or mutual release requires that both parties agree to release one another from their obligations under the Contract. The mutual release must be in writing and signed by both parties. Where both parties agree to terminate the Contract and to release each other from the obligation to perform under the Contract, the parties may use the Mutual Release of Obligation Under Contract of Sale. Note, the bottom section of the Mutual Release of Obligation Under Contract of Sale, the Mutual Release of Deposit Agreement, is a separate agreement which may be executed where the Buyer and the Seller agree on how the Deposit should be disbursed. The parties may execute the Mutual Release of Obligation Under Contract of Sale without executing the Mutual Release of Deposit Agreement. Keep in mind that a contractual release is different from a release of deposit agreement. (There is often confusion about this because many of the release forms currently in use address both the deposit and the contract in the same form.) In the MAR Contract, there is no reference to a contractual release, only to a release of deposit agreement. Thus, although a party may terminate the Contract if the Contract permits, that party must exercise the right in strict accordance with the Contract language. Additionally, the termination notice should refer to the specific provision that the party believes entitles him to end the agreement. On the other hand, if both parties agree to release one another from their obligations under the Contract, they must both sign a contractual release.

Colette Massengale, Esquire, Staff Attorney of Legal Affairs Maryland Association of REALTORS®

M A R Y L A N D R E A L T O R ® April/May 2011


Metropolitan Regional Information Systems, Inc.

MRIS Rules and Regulations The MRIS Compliance Department is here to help you preserve the MRIS Rules and Regulations, as we work to address the ever-changing practice of real estate by updating our policies to keep current. We know that real estate professionals make their living from the database we provide and, as a result, we take this process very seriously for YOUR benefit. The most valuable benefit we can offer our customers, and the consumers they serve, is the timeliness and accuracy of data. This high standard can only be obtained with responsible and meticulous attention to detail with each property listing. As a result, we have presented a few helpful DOs and DON’Ts to assist you in the proper data input of a listing:

SHORT SALES Compensation n D  O enter Compensation as a percentage of the gross or net sales amount or enter a dollar amount n D  O make an unconditional offer of cooperation and compensation n D  ON’T enter a compensation amount or indicate in the remarks that compensation depends or is contingent upon third party approval n D  ON’T indicate that the third party will determine compensation for cooperating brokers based on negotiated terms of the contract Status n D  O update listing status to Contingent upon acceptance/ratification of an offer n D  O update the status of a listing pending third party approval to Contingent Contract n D  ON’T keep a property in ACTIVE status after accepting/ratifying an offer because the seller or any third party requests that the status remain active

LISTINGS n D  O enter all property information accurately n D  O make all status changes and other updates within 48 hours, weekends and holidays excluded n D  O update Contingency Expiration Dates or Settlement dates when the dates change or have passed n D  O use the Tax ID Auto fill feature when entering listings n D  ON’T try to manipulate Days on Market, using tax and address information n D  ON’T enter two or more active listings for the same property unless the property is both for rent and for sale

REMARKS Internet (Public): n D  O include information about the property only n D  ON’T include any of the following information: commissions, showing contacts, agent or broker names, phone or fax numbers, web site or email addresses, virtual tours, alarm codes, lockbox codes or other security measures n D  ON’T include any links, active or animated content, or other comments containing HTML or programming code General: n D  O enter information intended for cooperating brokers, such as special showing instructions, contacts or phone numbers, special contract information, special compensation information, properly excluded prospects, virtual tours, broker or agent web sites and email addresses. Foreclosure or Auction listings may reference a third party web site (such as HUD, VA) where contracts must be registered. n D  ON’T include any Lockbox codes or other security system information without Seller’s permission MRIS Rules and Regulations can be found online by visiting the Compliance section of the MRIS website,

For more information, go to


M A R Y L A N D R E A L T O R ® April/May 2011

Oilheat. Know more, sell more. Straight talk about heating costs and oil prices Ease a buyer’s worries about high heating bills and close more sales! Equip yourself with solutions in advance.

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Should I be worried about the cost of heating my home with oil?


Local oil dealers can help diffuse these concerns. They have programs specifically designed to help control costs and even out fuel payments. And since prices are cyclical and fuel prices track one another, system efficiency is where the savings add up.

Q: What can I do to conserve?

A: Schedule a professional tune-up with your oilheat dealer once a year. This ensures your heating system operates at peak efficiency, which can save you about 5% on annual fuel bills. If you spend $3,000 on fuel, for example, a tune-up can save you $150.

Free advice from local oilheat experts Local oilheat specialists, who volunteer for PRO$, are always willing to lend their expertise to help REALTORS® overcome objections and obstacles in the sale and marketing of oil-heated homes.

The solution to saving the sale Every real estate agent has faced challenges on their path to a closing. And when it comes to selling an oil-heated listing, having a relationship with your local oil dealer could turn out to be your solution to saving the sale. Oil dealers have always been a great resource for reAltOrs®. they can provide information ranging from heating

Get to know your greatest resource in the sale and marketing of oil-heated properties: your local oil dealer! equipment and local regulations to tank replacement options and more. And if an issue appears midtransaction, having that relationship could be the glue to keep your deal together. so reach out to your local oilheat dealer today and have a “go-to” person you can count on to ensure a timely closing.

They’ll join you at your sales meetings, answer questions and show you how to maximize your PRO$ free marketing materials, including the “Homeowner’s Guide to Heating with Oil,” to close more sales. To schedule a PRO$ presentation for your next sales meeting, visit or call 1-866-807-PROS (7767).


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fficiency How improving e age 5) raises value. (p

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Fantastic Finds Visit the NAR Technology tab on their site technology and navigate to ‘fantastic’- tech tips, help, articles and downloadable apps.

QR Code Field Guide Find out how to generate a QR Code, download the QR Code on your Smartphone and then read the information. In this NEW Field Guide, learn about QR (Quick Response) codes, why they are a new form of mobile advertising, and how they can be used to market and sell real estate and the best downloadable “Code reader.”

Avoid having to talk to irritating clients

Cool Tools Don’t miss the MAR Conference and Tradeshow, September 12-14, 2011, and find out about the latest technology tools, closing gifts, and products that can help you succeed in real estate.

MAR Annual Conference and Tradeshow Designation Day Wednesday, September 14, 2011

e-PRO®— Latest Technology & Social Media Tools Amy Cherow

The new e-PRO® session was developed through a partnership with The National Association of REALTORS® Do you miss calls from clients or friends and wish you could (NAR) and the Social Media Marketing Institute (SMMI) to just call them back and have your call go immediately to their familiarize today’s agents with the latest technology and voicemail? If so, check out Slydial can be a real social media tools to enhance their business and help time-saver, especially when you need to leave a them engage with customers and other real estate message for a client and a text won’t do. professionals. You will be given a roadmap to build It’s also a great way to avoid talking your business and serve the hyper-connected to a windbag when you have other consumers of today and tomorrow. Learn things to do. Simply dial your about the changing market and how to Slydial number, enter the connect with consumers, manage your number you want to call, and online reputation, generate leads and leave your message. The free gain referrals by signing up for Day 1 of service is supported by ads. the certification course. Upon completion The pay service is either 10 Monday-Friday • 9AM- 6PM of Day 1, students must complete Day 2 cents a call or $2.95 per online to earn the e-PRO® certification. month. Register Now: Events/2011AnnualConference.aspx


M A R Y L A N D R E A L T O R ® April/May 2011

“MAR Volunteers: We Want You!” Building on the Strength of our Members Committee Year: 2011 - 2012 E A S Y O N - L I N E F O R M – N O W AVA I L A B L E GO TO: MAR’s website, and click on “MAR Volunteers We Want You!” SIGN UP: Please be sure to give us 2, but no more then 3 committees that you are interested in serving on; every attempt will be made to accommodate your request for at least one committee assignment (some committees may have specific member qualifications). COMPLETE AND SUBMIT: It’s that easy! You will be emailed an “Instant Confirmation” when your form is successfully submitted.

DEADLINE: Wednesday, May 11, 2011 REMINDER: ALL CURRENT COMMITTEE MEMBERS MUST COMPLETE A FORM Committee selections are prioritized by qualifications and date received You will receive a letter confirming your committee appointment by August 26, 2011

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M A R Y L A N D R E A L T O R ® April/May 2011


From the Hotline Charles A. Kasky, Esquire

FHA Condo Certification Q.

I have recently heard of condominium sales falling through because the buyer applied for FHA financing and the condo was not “certified.” Now there seems to be a mad scramble regarding something called “recertification.” Can you explain this?


In December 2010, a number of articles in the press noted that Federal Housing Administration (FHA) condominium project certifications were going to expire, which left many in the industry wondering what the impact would be on the communities that did not meet the deadline. That deadline was to be Dec. 7, 2010. But when the date rolled around, FHA decided to extend the various recertification deadlines on a rolling basis through the end of 2010, most of 2011 and even into 2012. Those who understood what was going on breathed a sigh of relief. There were 26,000 condominium developments that would have had to have been recertified by Dec. 7, 2010 and were going to lose their approval if that did not get done. Most of these condominiums didn’t even know about the recertification process. This is an important bit of knowledge for condominium managers and HOA (homeowners association) boards because it could affect individual condo sales going forward. In February 2010, FHA instituted a process under which every condominium development had to have project approval by HUD. Also, before 2010, FHA approval was functionally permanent, but it was discovered that projects approved years ago were probably not up-to-date in regard to compliance and needed to be recertified. What HUD effectively declared was the projects it approved 10 or 15 years ago were no longer compliant so it was going to strip away the approvals from projects approved before 2008 and force the developments to go through a recertification process. All of the condo projects that received FHA approval were going to have to have those certifications expire as of Dec. 7, 2010, but there were so many projects seeking recertification that it created a crush on FHA’s resources. As a result, FHA extended the

FREE Legal Hotline 32

deadline based on when the projects originally received approval. The earliest projects were circa 1972 and had to be recertified by Dec. 31, 2010; the other projects (using five-year increments) had longer deadlines. Here’s the catch. Formerly, once the project was approved it was permanent. FHA has since said it wants to keep a closer tab on these associations. It wants to look at developments initially and again every two years through the recertification process. It is an ongoing obligation that the development must be willing to commit to. There are some developments where it would cost too much money to be approved just because of the due diligence that would have to be performed in order to be compliant. For example, condo developments are now required to have a reserve in the budget for maintenance and repairs equal to 10 percent of the budget. Also, new or established projects with more than 20 units are required to carry fidelity bonds/insurance for all officers, directors and employees of the association and all other persons handling funds. FHA-insured loans were not a huge factor in the condo market until relatively recently, and then they became the major factor. Associations were not used to thinking about the FHA as being the only game in town. If you aren’t FHA-certified, it’s now something that makes a condo less attractive in terms of individual owners trying to sell a unit. If a buyer is looking in two condo developments next door to each other and one is FHA-approved and the other isn’t, the latter is at a severe disadvantage as far as marketing and, by extension, value. A REALTOR® representing the buyer or seller of a condo will want to inquire, as early in the transaction as possible, whether the development is compliant. Charles A. Kasky, Esquire, Vice President of Legal Affairs Maryland Association of REALTORS®

1-800-888-1272 • Monday, Wednesday and Friday • 10am – Noon and 2 pm – 4 pm • Complete an Online Form available in the Legal Hotline tab

M A R Y L A N D R E A L T O R ® April/May 2011

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Residential Sales Anirban Basu

Life After

Tax Credits With federal tax credits now far in the rearview mirror, year-over-year sales and price comparisons have become somewhat simpler to analyze. The most recent data reflect the proposition that the housing market continues to grind through a sea of active inventory, an inventory that remains large enough to suppress price appreciation.

1.0 percent to total jobs. Mysteriously, housing market performance seemed inconsistent with this level of labor market improvement, which while not earth-shattering was at least cause for optimism regarding broader economic prospects.

In early March, the BLS dramatically ratcheted down estimates of job growth in Maryland. According to the revised data, Maryland added just 11,300 jobs in 2010, or 0.5 percent. In fact, if one views the revised data as credible, the implication is that Maryland added jobs less rapidly than the balance of the nation last year. Given the ongoing expansion of federal spending, the notion that Maryland added jobs less rapidly than the balance of the nation is counterintuitive, but the new data are

For several months, economists and other analysts have wondered why Maryland’s housing market has remained so resistant to material

arguably more consistent with what has been observed in the state’s housing market.

improvement when other aspects of economic life have been associated with a more aggressive return to normalcy. For instance, until recently, the U.S. Department of Labor’s Bureau of Labor Statistics (BLS) data indicated that Maryland’s economy added 26,000 jobs in 2010, or

Stakeholders in Maryland’s economy should be aware that the data may be revised again, and that BLS data have become highly erratic and suspect. Unfortunately, there are very few credible alternative sources to the BLS employment data at the state level.


M A R Y L A N D R E A L T O R ® April/May 2011

Residential Sales

Continued from page 17

That said, between January 2010 and January 2011, home sales in Maryland

percent) and Cecil County (-2 percent). In other words, sales activity on

rose 4.1 percent, consistent with the slow pace of recovery. Thirteen of

much of the Eastern Shore remains relatively weak, perhaps because

Maryland’s twenty-four jurisdictions experienced sales increases in

much of Maryland’s employment growth remains concentrated on the

January on a year-over-year basis. In February, unit sales were up 5.0

Western Shore. Among the jurisdictions experiencing sales growth in

percent in Maryland, with fourteen jurisdictions experiencing sales

February were Anne Arundel County (+20 percent) and Harford County

increases. Leading the way in percentage growth terms were jurisdictions

(+8 percent), both of which are closely associated with ongoing military

with relatively low levels of sales activity: Somerset County (up 125

base realignment impacts.

percent; 9 sales in February 2011 compared to 4 sales in 2010); Caroline County (up 60 percent, 16 sales versus 10); and Garrett County (up 50

Median sales price was down 4.5 percent statewide in January on a year-

percent; 9 sales in 2010 versus 6 in 2011).

over-year basis. In February, this figure swelled to -11.7 percent, with nineteen Maryland jurisdictions experiencing median sales price declines

Among the jurisdictions experiencing year-over-year unit sales declines in

that month. In percentage terms, the most profound declines were in

February were Talbot County (-26 percent), Wicomico County (-15

Baltimore City (-52 percent), Caroline County (-45 percent), Wicomico

percent), Queen Anne’s County (-13 percent), Worcester County (-13

County (-28 percent) and Dorchester County (-27 percent). One suspects that distressed sales played a significant role in shaping these statistics.

For instance, in

Baltimore City, median sales price declined from $109,890 in February 2010 to $53,000 in February 2011, an indication that sales are now largely being driven by a combination of plentiful distressed real estate and a growing number of opportunistic investors.

Average sales price in Maryland declined

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year price declines in February is perhaps an indication that distressed properties are now being more aggressively transacted upon, which in the short-term produces unattractive price


performance, but ultimately accelerates the arrival of stable market equilibrium. However,

M A R Y L A N D R E A L T O R ® April/May 2011


Residential Sales

Continued from page 35

January 2011 vs. 2010 there are alternative explanations for the observed data, including

Units Average Price

surges in sales activity as buyers responding to mortgage rate

County 2011

fluctuations and seasonal/weather-related factors.

Allegany 31

Pending sales were up on a year-over-year basis in both January (24 percent) and February (34 percent). In February, all but two jurisdictions experienced year-over-year sales gains. These were Cecil

2010 Change


2010 Change

15 106.7% $90,618 $65,851 37.6%

Anne Arundel 299

225 32.9% 376,390 370,188 1.7%

Baltimore City 368

316 16.5% 111,104 117,692 -5.6%

Baltimore County 345

312 10.6% 242,228 277,043 -12.6%

Calvert 47

37 27.0% 293,501 328,424 -10.6%

(13 versus 15). In Baltimore City, pending unit sales were up

Caroline 15

14 7.1% 94,801 175,179 -45.9%

37 percent. In Prince George’s County, the corresponding statistic was

Carroll 58

67 -13.4% 272,665 283,539 -3.8%

up 55 percent. These data also appear to suggest that distressed

Cecil 46

51 -9.8% 206,680 223,093 -7.4%

Charles 87

75 16.0% 231,627 259,901 -10.9%

Dorchester 21

18 16.7% 121,144 179,440 -32.5%

Frederick 134

160 -16.3% 248,553 255,025 -2.5%

County (65 pending sales versus 66 a year prior) and Somerset County

properties are being transacted upon more aggressively and that the transition toward equilibrium has been accelerating. This is consistent with the unit sales data, which have also reflected growing sales volume in conjunction with falling prices.

Garrett 17

9 88.9% 382,531 378,111 1.2%

The active inventory of unsold homes is presently higher than it was

Harford 150

97 54.6% 250,835 250,654 0.1%

a year ago. In February of 2010, the active inventory of unsold homes

Howard 139

145 -4.1% 381,597 403,128 -5.3%

in Maryland for sale through real estate professionals stood at 34,611. One year later, that tally has risen nearly 3 percent, to 35,516. Based on February unit sales, this represents more than 11 months of supply. Of course, in recent months, tax credits have not been available to accelerate sales activity and help drive the active inventory lower.

Kent 9

8 12.5% 182,067 252,319 -27.8%

Montgomery 544

581 -6.4% 440,671 404,067 9.1%

Prince George’s 520

568 -8.5% 185,317 196,679 -5.8%

Queen Anne’s 23

29 -20.7% 275,104 388,627 -29.2%

Somerset 7 12 -41.7% 177,357 123,083 44.1%

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M A R Y L A N D R E A L T O R ® April/May 2011

St. Mary’s 66

48 37.5% 264,546 285,705 -7.4%

Talbot 16

20 -20.0% 393,411 451,383 -12.8%

Washington 73

77 -5.2% 139,695 181,411 -23.0%

Wicomico 38

47 -19.1% 127,815 177,465 -28.0%

Worcester 66

64 3.1% 290,086 258,217 12.3%

Total 3,119 2,995

4.1% $268,281 $275,594 -2.7%

Figures reflect resales and new properties. Residential resales are reported by MRIS ® and local boards MLS systems.

February 2011 vs. 2010 Consequently, sellers have as a group been more likely to respond to market realities by lowering “asking” and ultimately “sales” prices.

Units Average Price County 2011

2010 Change

Allegany 24

Looking Ahead The broader economy gained momentum during the latter stages of 2010. This momentum translated into surprisingly strong holiday


2010 Change

18 33.3% $82,754 $91,351 -9.4%

Anne Arundel 318

265 20.0% 345,392 341,918 1.0%

Baltimore City 407

313 30.0% 111,551 133,426 -16.4%

Baltimore County 319

346 -7.8% 257,762 261,169 -1.3%

Calvert 49

43 14.0% 283,008 267,533 5.8%

Caroline 16

10 60.0% 152,777 301,978 -49.4%

power appears to be returning in various segments of the economy.

Carroll 53

59 -10.2% 262,380 296,681 -11.6%

The consumer is now expressing both in word and deed a growing

Cecil 43

44 -2.3% 197,009 249,122 -20.9%

sales and vehicle purchases. Luxury department stores are now reporting rapid increases in year-over-year sales growth and pricing

sense of optimism despite recent increases in gas prices. Unemployment in Maryland remains stable.

Moreover, with a growing number of buyers expressing concern regarding the trajectory of mortgage rates, the key spring selling

Charles 117

90 30.0% 213,133 275,438 -22.6%

Dorchester 18 Frederick 155

15 20.0% 192,482 143,193 34.4% 148 4.7% 230,855 244,529

Garrett 9


6 50.0% 309,667 310,000 -0.1%

season may be better than many people expect as increasingly

Harford 124

115 7.8% 248,351 256,978 -3.4%

confident consumers step off the sidelines in advance of potential

Howard 133

169 -21.3% 411,965 377,440 9.1%

mortgage rate increases. That would help lower the active inventory and perhaps create stable market prices by some time later this year. Unfortunately, the pipeline of distressed properties remains large, with the implication being that even solid spring and summer sales seasons may not be enough to establish stable housing market equilibrium in 2011. Anirban Basu, Sage Policy Group, Inc.

Kent 9

8 12.5% 401,101 96,175 317.1%

Montgomery 525

550 -4.5% 390,022 398,680 -2.2%

Prince George’s 550

508 8.3% 181,496 197,605 -8.2%

Queen Anne’s 20 Somerset 9

23 -13.0% 261,576 285,797 -8.5% 4 125.0% 104,878 130,689 -19.7%

St. Mary’s 63

76 -17.1% 231,088 292,357 -21.0%

Talbot 17

23 -26.1% 520,159 607,051 -14.3%

Washington 85

61 39.3% 143,583 159,543 -10.0%

Wicomico 33

39 -15.4% 129,444 153,662 -15.8%

Worcester 77

88 -12.5% 301,888 341,585 -11.6%

Total 3,173 3,021

5.0% $254,708 $276,460 -7.9%

Figures reflect resales and new properties. Residential resales are reported by MRIS ® and local boards MLS systems.

M A R Y L A N D R E A L T O R ® April/May 2011



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SELL IN A CHANGING MARKET The SHIFT, How Top Real Estate Agents Tackle Tough Times

Implement the right strategies to make properties stand out.

Staging to Sell: The Secret to Selling Homes in a Down Market Find out how to set your property apart in this market.

Getting it Sold

Get the conversation going with your seller and help them help you.



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At Weichert®, our Internet leads are screened immediately, so good customers can fall into your lap. To say that more house-hunters are relying on the Internet nowadays is an understatement. Our job is to satisfy their need for information and quickly turn them into qualified leads. That’s why we’ve updated and streamlined our website, and it’s why our unique contact center system can connect qualified leads directly to your cell phone in a heartbeat. If you’d like to hear more about our award-winning online strategy that sends thousands of qualified leads each month directly to Sales Associates like you, please call our office for a confidential interview. You’ll be surprised at all the great support we can offer you here at Weichert. For more information call a local Weichert affiliate office.


Columbia WEICHERT, REALTORS® New Colony • 410-381-3331

Ellicott City WEICHERT, REALTORS® Caton Properties • 410-465-8300

Eldersburg WEICHERT, REALTORS® Property Concepts • 410-970-5050

Glen Burnie WEICHERT, REALTORS® Platinum Service • 240-554-0220

Independently owned and operated.

Princess Anne WEICHERT, REALTORS® On The Eastern Shore • 410-968-3300

Home of Unlimited Opportunity.

April 2011/May 2011  
April 2011/May 2011  

Maryland Realtor® Magazine April 2011/May 2011