A publication of the Kentucky Association of REALTORS 速
Volume 6, Number 2, FALL 2013
IN THIS ISSUE
NAR’s 2013 Legal Scan 8
10 The Art of Prospecting A publication of the
Disclosure of the Accepted Offer 13
Kentucky Association of REALTORS® President John T. May Jr., SRA Greater Louisville Association President-Elect Ronald E. Hughes Paducah Board
17 Kentucky Homes Matter REALTOR® Code of Ethics Protecting Consumers for 100 Years 20
Treasurer Larry R. Gillette, GRI Hopkinsville Christian & Todd County Association Treasurer-Elect Gale Fulton Lexington Bluegrass Association Chief Executive Officer Joe McClary email@example.com Communications/Education Director Hunt Cooper firstname.lastname@example.org
KAR News 4
CEO Message 5
Tools You Can Use 6
Address letters and inquiries to: Kentucky REALTOR® 161 Prosperous Place, Suite 100 Lexington, KY 40509 TF 800.264.2185 T 859.263.7377 F 859.263.7565 www.kar.com email: email@example.com
KAR members should always send address changes to their local board/association first. Subscription rates: $10 per year (included in dues) for members, $25 per year for nonmembers.
All articles represent the opinions of the authors and do not necessarily represent the opinions of Kentucky REALTOR® or KAR and should not be construed as a recommendation for any course of action regarding financial, legal or accounting matters by KAR or Kentucky REALTOR® and its authors.
By the Numbers
Local Association News
A Day in the Life of...
Back to Basics
Reproduction prohibited without permission. Copyright © 2013. Kentucky Association of REALTORS®, Inc. All rights reserved.
FALL 2013 KENTUCKY REALTOR® 3
KAR News KAR Member Survey Results
Our Affiliate Partners
KAR recently launched a comprehensive member survey to gain a better understanding of the membership demographics as well as to receive feedback to gauge the effectiveness of the association. Although all the results are not yet compiled, here are a few interesting facts: • Over 73 percent of the membership define their role as a sales agent while over 18 percent are brokers or broker owners. The third largest category is appraiser with around 3 percent of members. • More than 87 percent of members practice residential with only around 3 percent saying they deal in commercial.
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• The largest percentage of members, at around 29 percent, say they have been in real estate 20 or more years with just over 13 percent saying they have been practicing 2 years or less. • Around 92 percent of members say they will be practicing real estate in the next 3-5 years while over 71 percent say they work in real estate full time. • The majority of the membership, at over 58 percent, are women and the majority, at over 30 percent, are 55-64 years old. Among all members, a 41-50 hour work week is the standard. • Members overwhelming prefer email communications from KAR at over 93 percent and the majority of members, at over 81 percent, say they receive just the right amount of information with legal issues topping the list. • On a scale of 1 to 10, members say they rate the value of membership with KAR to what they pay in a range from 5 to 9 most often, however, interactions with KAR staff rated most often as a 10.
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• Over 55 percent of members say they contribute to RPAC, over 45 percent say they have taken a course with KAR/KREEF, and around 41 percent saying they have attended a KAR event, meeting or training in the past two years. • More than 87 percent of members use Facebook with around 61 percent using LinkedIn, 32 percent watching YouTube and 30 percent on Twitter.
Kentucky REALTOR® license plate Show your Kentucky REALTOR® pride and have a captive audience with a Kentucky Association of REALTORS® license plate. License plates can be purchased for all your vehicles as long as they are registered in Kentucky. For the plate to go to production, KAR needs to have 900 plates reserved. A portion of the registration funds will be used to provide disaster relief assistance throughout Kentucky when the need arises with additional funds being used to create and offer career development classes for Kentucky real estate professionals and to support a legal hotline if one is created by KAR. To apply for a plate, visit www. kar.com > Members > License Plate.
Follow KAR on Twitter @kyrealtors KAR has posted its Twitter feed on the home page of its website so members and consumers can follow all the things going on with the association.
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Fighting to Support Home Ownership in Kentucky By Joe McClary, KAR Chief Executive Officer
The Kentucky Small Business Caucus recently hosted an event for business leaders with Senator Mitch McConnell. During our conversation with the Senator, I asked him with a debt ceiling fight looming in Congress and a government that is looking for new sources of revenue, how he viewed the federal mortgage interest deduction faring through potential tax reform. The Senator responded, “I think the only way the homeowner’s interest deduction would even come up would be in connection with a debate on comprehensive tax reform and there isn’t going to be comprehensive tax reform as long as the President says this isn’t about tax reform but raising taxes…I wouldn’t lose sleep about it.” Check out the video of the response on the Kentucky REALTOR® YouTube channel. From that perspective, the federal mortgage interest may remain unchanged for the time being but what about the future? Closer to home in Frankfort, our state government is struggling with a deficit the legislature is charged with addressing early next year. Tax reform, including tax on services, is being discussed and no one knows what will happen. The future is uncertain. The question many ask is “who is looking out for me as a REALTOR® in Frankfort to ensure the hand of government does not go destructively into my pocket?” Through all of the uncertainty in Frankfort and real estate markets in general, one thing is for certain, the Kentucky Association of REALTORS®’ team is looking out for you by monitoring legislative activity and proactively lobbying for policy that will protect our housing markets and economy. The new Twitter feed on the KAR website home page is one way we have begun tracking and communicating the daily progress the association makes on behalf of Kentucky REALTORS®. You can follow us on Twitter @kyrealtors to stay informed of daily progress. In addition, KAR recently launched our Kentucky Homes Matter campaign and it is rapidly gaining traction across the state thanks to the leadership of our president, John May, of Louisville. The grassroots campaign is designed to educate the public and legislators on the importance of maintaining a healthy housing market. Consider these facts on why Kentucky Homes Matter:
71% of Kentuckians own homes.1 Children of homeowners do 23% better in school.2 For every two homes sold, one job is created, and each purchase generates as much as $60,000 in economic activity. 70% of Kentucky voters support state income tax deductions for interest paid on home mortgages. 65% of voters oppose the expansion of a sales tax to include select real estate and other professional services. 62% of say that eliminating the state mortgage interest deduction would have a negative impact on the housing market in Kentucky.3 If tax reform detrimental to home ownership is enacted, the average home owner will pay $5,000 more in taxes.4
The public and our legislators need to know how important home ownership is to Kentucky and how to protect it. KentuckyHomesMatter.com features vital information, a PowerPoint presentation that you can use in your presentations to local business groups and a petition you can sign to show your commitment to good policy that is friendly to REALTORS® and our economies. With more than 8,700 voices that are part of the Kentucky Association of REALTORS®, we have a strong future together. Footnotes: 1 According to the 2000 U.S. Census 2 According to a 2001 study by Harvard’s’ Joint Center for Housing Studies. 3 Results are taken from a survey conducted by American Strategies on behalf of the Kentucky Association of REALTORS® January 14-16, 2013. The survey polled 600 registered voters in Kentucky. 4 Based upon a $150,000 home according to a 2012 study by the UK Center for Business and Economic Research.
Left to Right: Joe McClary and Senator Mitch McConnell
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Tools You Can Use Marketing Minute
Trulia found that 52 percent of Americans who participated in buying their current home have at least one regret about their current home or the process of choosing it.
Sitegeist is an app designed to “uncover the data around you.” It pulls information from publicly available data to create instant infographics about any U.S. location (basically in the location where you are standing currently or anywhere else you choose). Everything from age distributions to political contributions and median home values to record temperatures can be seen in easy to view infographics. It makes complex localized data easy to understand. Current sources for the information includes the U.S. Census Bureau, InfluenceExplorer.com, the Dark Sky weather API and even Yelp and Foursquare. The app developers say they will continue to add and improve on the app as more rich data becomes public. It’s free and available for both the iPhone and Android platforms. Think of the uses with buyers if you suggest this app to them prior to starting the home search.
Among homeowners who purchased a home, the top five regrets and the percentage of homeowners experiencing each regret were:
• Failure to buy a larger home, 34 percent.
• Failure to do more remodeling after buying, 27 percent.
• Failure to obtain more information before buying, 22 percent. • Failure to provide more money for the down payment, 18 percent.
• Failure to be more financially secure before buying, 16 percent.
Among renters who rented a home, the top five regrets and the percentage of renters experiencing each regret were:
5 social media faux pas According to Katie Lance of Inman News, as a real estate professional, here are 5 things you should not do on social media.
• Don’t outsource your social media.
• Failure to buy instead of rent, 42 percent.
• Don’t automate it.
• Failure to choose a larger rental, 39 percent.
• Don’t sync your Facebook to your Twitter and vice versa.
• Don’t just promote your listings.
• Don’t be a broken record.
• Failure to be more financially secure before leaving the nest, 27 percent. • Failure to get more information about the rental before moving in, 21 percent. • Failure to choose a neighborhood with a shorter commute to work, 18 percent.
Stop Talking A study by Samsung and O2 compiled data on how we use our smart phones nowadays, and it turns out they’re not so much phones as Internet and social networking devices. The study ranks phone features based on how much time we spend using them every day. Here is the breakdown:
• Internet use (nearly 25 minutes a day)
• Social media (17 minutes)
• Music (15 minutes)
• Games (14 minutes)
• Phone calls (12 minutes)
• Emails (11 minutes)
• Texts (10 minutes)
• Watching TV shows and films ( 9 minutes)
• Reading books (9 minutes)
• Taking pictures or videos (3 minutes)
Interestingly, while the camera doesn’t take up much of our time, it is the most used feature, with 74 percent of respondents saying they’d used their handsets to take photos.
Realtor.com to provide commercial listings under new agreement Realtor.com has partnered with Xceligent Inc. to launch search capabilities for commercial listings on the popular home search site. The agreement will allow realtor.com to provide users with access to thousands of commercial listings. Xceligent owns CommercialSearch. com, which is one of the largest sources of commercial real estate listings. It provides aggregated commercial listings from sources such as MLSs, Commercial Information Exchanges, and the top 50 companies who provide commercial listings.
Smart911: a free safety service for you smart911.com New to many parts of the country is a program called Smart911, which gives first responders important information that will help them address your emergency. It’s free to sign up and register (it’s supported by existing 9-1-1 fees) and is 100% private and secure. After registering, Smart911 allows you to create a Safety Profile for your household that includes any information—including current location, medical issues, demographic data and photos—the Police, Fire and EMS want to have in the event of an emergency. Then, when anyone in your household dials 9-1-1 from a phone associated with your Safety Profile, the information is immediately displayed to the 9-1-1 call taker providing additional information that can be used to facilitate the proper response to the proper location. Note that in certain areas, this service may not be available.
Don’t lose business with leads U.S. businesses spend billions of dollars generating sales leads only to lose more than 70 percent of them simply because they don’t make contact quickly enough, according to a study by Dr. James Oldroyd of MIT. The study found that the odds of a lead entering the sales process were 21 times greater if the business made contact within 5 minutes of generating the lead versus contact in 30 minutes. Another study by the Harvard Business Review found that the average response time by businesses to a generated lead is 42 hours—and that’s just for responses that occurred within 30 days.
Maponics provides ‘walkability’ ratings Mapping data firm Maponics LLC is now offering a tool that rates the walkability of neighborhoods, and gives boundary zones for a number of options including neighborhood, subdivisions, schools, shopping and ZIP codes among others. Maponics suite of data already included detailed demographics info, crime info and school rankings—and they now have over 150,000 neighborhoods they generate the walkability rating for. It does this by using a five-point scale using a complex algorithm that takes into account information like the concentration of homes in an area, number of local amenities and the numbers and types of streets and intersections. Currently, companies like realtor.com, Zillow, Trulia, and Century 21 license Maponics boundary data. Another company, Walk Score also provides transportion-related ratings, including “walk scores,” bikeability heat maps, and contextual information about neighborhoods and cities.
Buyers don’t have much remorse The 2013 Home Features Survey, put out by NAR, showed that 97% of all buyers were somewhat to very satisfied with their purchase. However, the following is a breakdown of what buyers, who purchased homes without certain features, say they would have paid more for:
• central air (69%) • new appliances (69%) • walk-in closets (60%) • more storage (55%) • granite countertops (55%) • hardwood floors (54%)
TellKentucky.org gives Kentucky school results Find out how Kentucky teachers rate the schools in which they work through the Teaching, Empowering, Leading and Learning survey, available online. Certified staff in public schools throughout the state completed an anonymous survey with the results of the TELL survey being available at Tellkentucky.org. Teachers were asked about a variety of topics, such as whether class sizes were reasonable, whether the school was a safe place to work, whether they felt comfortable raising concerns with leadership and what kinds of professional development would be helpful. Results are available for 1,296 Kentucky schools.
Bits and Bytes Pinnum: the new safety tool for agents The pinnum app is the new geo-social app to safely engage and map friends, family and groups. Users are assigned a permanent pin number, a “pinnum” where users can then share their pinnum with another individual or a group of individuals in order to communicate and exchange information. Users may remain completely anonymous unless he or she chooses to disclose their data. Delivered with built-in location based GPS technology, pinnum users, at their discretion, may disclose their actual location. A practical use of this technology will enable parents to monitor the movement of their phone-equipped children, friends or relatives at any time or place. Other practical uses would be for businesses to monitor the movement of their personnel or equipment. On the real estate front, it can also be used for individual introductions to a network, business or a client. Brokers or agents could also use it for a built in safety monitoring device by keeping track of agents on showings or at open houses. Another great feature is the “Group” function which allows for public or private group notification, messaging and mapping. Having pinnum is similar to handing out your personal phone number, but with complete control over whom you communicate with, including the distribution of any and all contact information beyond your pinnum. Pinnum has built in two-party communications that may be established via text conversation, with the only identifier being the user’s pinnum. You can text using just your pinnum and you can control the next level of communication (via text), where you can “Un-Pin” or release other contact information, including your “Name”, ”Photograph”, “Looking for”, “Status”, “About Me”, “Career” and “Interests”. Pinnum does not display contact information including email or phone numbers. Bonus feature: All pinnum users can also enjoy offer-based business integration. Blue PINs on the map show current nearby deals offered by businesses that have created their offer exclusively for Pinnum users. In contrast to other apps, only businesses that are a member of pinnum for business will show their offerings. Simply put, if there is a blue PIN, there is a deal!
Quick Tip for iPhones To send text messages to an email address, launch your Messages app and tap into the conversation you want to send. Next, tap edit and highlight the texts you want to send. Then, tap forward and instead of entering a phone number into the “to” box, enter an email address. If you phone plan allows MMS, then it should send those to you in an email.
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NAR’s 2013 Legal Scan of Real Estate Issues By Doug Martin
Every two years, the National Association of REALTORS® (NAR) undertakes a study of the current legal issues and legal concerns facing real estate professionals. This comprehensive research project is intended to analyze current legal liability issues and identify emerging risk management issues. NAR’s 2013 Legal Scan is based on statutes and cases affecting real estate professionals, and on survey responses from key players in the real estate industry. Breach of fiduciary duty was the most common legal issue facing real estate professionals during this review period. The most important emerging issue was social networking, a form of internet advertising, and disclosure of short sales was also top area of concern. Finally, several technology issues were identified as important areas in need of additional training, including state internet advertising rules and social networking.
Agency Issues Agency remained one of most important overall topics in NAR’s 2013 Legal Scan. More respondents ranked various agency issues among their top three current issues than any other group of issues. In addition to statutory and regulatory developments, agency related issues also generated a large number of court decisions during the survey period. The main agency issues identified were breach of fiduciary duty, dual agency, and buyer representation.
Breach of Fiduciary Duty Almost 20 percent of survey respondents indicated that breach of fiduciary duty was the basis for a significant number of current disputes, and more than 55 percent ranked the issue among their top three current issues. Breach of fiduciary duty was also named among the topranked potential future issues, with nearly 80 percent of the respondents ranking it among their top three future issues. Legal Scan respondents made three general comments about fiduciary duty. First, licensees simply do not know what their duties are—whether fiduciary or statutory. Agents generally do not understand that the fiduciary duties extend past the transaction into the future, and carry around misconceptions about what their fiduciary duties are to clients. Second, respondents noted that some agents put their own interests— such as closing the deal and getting a commission—before their clients’ interests. Finally, respondents said that fiduciary duties tend to be “catch all” claims and are the most frequently cited claims in lawsuits. More than one respondent suggested that breaches of fiduciary duties were asserted in order to trigger E&O coverage.
Dual Agency Dual agency also came up as an important area of concern in the Legal Scan. More than 37 percent of respondents stated that dual agency was the basis for a moderate or higher number of current disputes, and 74 percent placed the issue among their top three current issues. Most
of the respondents (73 percent) believed that the level of disputes over dual agency will stay the same during the next two years, and about 17 percent believed the number of dual agency disputes will increase in importance over the next two years. More than 71 percent of respondents ranked dual agency among their top three potential future issues, and 63 percent believed there is a moderate or higher need for training on dual agency. The Legal Scan comments addressed several problems with dual agency. First, some respondents simply objected to dual agency on principle. Others believed that licensees simply don’t understand the nature of dual agency, and others engage in dual agency unintentionally.
Buyer Representation Buyer representation was not identified as a major source of current disputes, but it was nevertheless named as an important issue by the survey respondents. Only 13 percent of the survey respondents said that buyer representation was the source of a significant number of current disputes, and about 37 percent stated the issue had moderate or higher current significance. Nevertheless, all of the respondents who included buyer representation ranked the issue either first or second as a source for current disputes. Similarly, only 23 percent of respondents believe buyer representation will increase in importance over the next two years, but nearly 89 percent of those who ranked it placed the issue in their top three future issues. Thirty-one percent of the respondents indicated that there is a significant need for training on the issue.
The comments from survey respondents emphasized two principal points about buyer representation. First, many licensees do not understand their responsibilities when representing buyers, and some even work without a representation agreement in place. Second, a number of the respondents believed buyer representatives simply do not do a good job for their clients.
Disclosures in Short Sales Disclosure in short sales was the top single area of concern identified in NAR’s 2013 Legal Scan. The comments of respondents focused primarily on the mechanics of arranging a short sale, rather than property conditions identified in the disclosures. Respondents noted that lenders take a long time to decide whether to accept an offer and do not state in the listing what portion of the proceeds will be applied to the debt. Buyers’ representatives, in turn, do not explain the process adequately to their clients. Other respondents believed that some licensees get over-involved and “beyond their scope” when working on a short sale. Finally, respondents felt there were just no clear-cut directions or rules for short sales, and that too many agents are just doing what they want.
More Technology Training Needed While technology issues were not a significant source of current disputes, over 51 percent of the Legal Scan survey respondents believed these issues will increase over the next two years, and over half believed there is a significant need for training about technology issues. Principal areas of concern are social networking and state internet advertising rules. Many respondents commented that social networking is evolving quickly and state licensing agencies need to catch up. Also, agents and licensees almost blindly accept technology tools in areas like social media without recognizing the legal risks of their behavior. Some respondents also noted that state licensing commissions do not have the manpower to police internet advertising. Others pointed out that “the market is global” and there are too many differences among various states’ rules.
Legal Scan Available on NAR Website It is worth a few minutes of your time to glance through the 2013 Legal Scan (you can find it at bit.ly/2013LegalScan or by scanning the QR code to the right). These are the legal issues that agents and brokers are likely to see in the years ahead. And as they say, “Forewarned is forearmed.”
Doug Martin practices with the Lexington law firm of Sturgill, Turner, Barker & Moloney, PLLC, and serves as KAR’s legal counsel. For more information about Sturgill, Turner, Barker & Moloney, PLLC, please visit SturgillTurner.com. This discussion should not be viewed as legal advice. Please consult your attorney.
Realtor.com Changes Explained The NAR Board of Directors recently approved recommendations that will help realtor.com compete head-to-head with third-party listing aggregators on building a comprehensive site, including more unlisted new homes and rentals. As a result of the vote, the RIN board approved amending the operating agreement with RealSelect in three fundamental ways: • Amending the restriction that says Move may display only listings that have been sourced from REALTOR®-owned and controlled MLSs or from REALTORS®. Under the revised agreement, Move will be able to obtain listings from entities that are not REALTOR®- owned and controlled and from brokers who are not REALTORS®. • Amending the restriction on unlisted properties. The revised agreement will allow the display of unlisted new homes and new home communities and will allow the display of unlisted properties that are for rent. Individual consumer FSBOs remain precluded from the site. • Amending the requirement for listing broker’s consent for the foreclosure status of a listing to be displayed. Under the revised agreement, unless the listing broker objects, Move/ RealSelect will have the ability to identify: • Properties where notice of default has been recorded • Auctions of distressed properties • Short sales • Foreclosures • Bank-owned properties Of note, 1999 NAR President Sharon Millett, who was “there at the creation” of realtor.com®, spoke persuasively in favor of all the requested changes. “There was a time when restricting the site to only REALTOR® listings was appropriate,” she said, “but that time has passed.” Now, it’s time to compete head-to-head and give consumers what they clearly want: an accurate, comprehensive site, she said. Errol Samuelson, president of realtor.com and chief strategy officer for Move Inc., said the changes would happen “at Internet speed.” To learn more, visit www.karblog.org/?p=4856.
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The Art of Prospecting By Darryl Davis
PowerFact: It doesn’t matter whether you’re a top producer or a first-month salesperson … when your prospecting efforts dwindle, so does your income. No matter how busy you are, you must constantly prospect in order to remain successful in real estate. However, for a lot of agents, picking up that telephone is a very difficult thing to do. Here’s the nasty little secret to prospecting—the toughest point is when you first start. It’s no different than when you take on any new activity that requires a change in behavior. Overcoming your old habits requires significant commitment and effort before you can feel comfortable. That’s why I want to challenge you. Make the commitment now that for the next 30 days, without fail, you will make x number of calls each day, or block out x number of days each week to totally devote to prospecting. If you do that on a regular basis for a month, I promise you that picking up that telephone and prospecting won’t be such a daunting task. You will overcome something. You’ll move beyond this vague fear, or whatever it is that might be holding you back. And, believe me, once you overcome it, then it’s easy. It really is a piece of cake.
Now that you’ve accepted my challenge, it’s my turn to give you the tools you need to succeed and master the art of prospecting.
15 Powerful Ways to Find Prospects Some of this may be a bit basic … and some may seem real daring to a few of you. In any case, here are several highly-effective methods for locating prospects.
1. Work a high-turnover area. Work a high turnover area ... and document the strengths and weaknesses of your competition. If you are trying to build your inventory, don’t go to a neighborhood that has a low turnover. How do you find high turnover areas? Very simple. Tell the MLS to printout everything that sold in the past six months and it will show you. Then, look and see who the major listing broker is in that neighborhood, and do a little research on the strengths and weaknesses of that office. This way, when you decide to break into that neighborhood and you are sitting face to face with a seller—and you know that you might be up against that broker—you will have some ammunition. Be prepared to show them that your office has strengths to replace those weaknesses. That is how you blow out the competition.
2. Call-to-action seminar. A call-to-action seminar is basically a sellers’ seminar or buyers’ seminar. Here are some topics you can do for sellers. How to advertise a house. How to hold an open house. How to use today’s low interest rates to get your house sold. For buyers, you might try: How to conduct a home search in half the time ... or Financing strategies in today’s real estate market. There is one drawback to this approach, however: it takes time.
But, there are some really good benefits. The major benefits are that it is a way for you to market yourself and your office. But more importantly, it creates a perception in the marketplace that you are an expert in real estate, and that you are confident in your abilities because you hold frequent workshops. If you choose to do this, don’t forget the power of synergy. A couple of agents from the same office can combine efforts to do a workshop. Share the money, do promotions, do mailings and as a great cold call technique, call to personally invite sellers to your seminar. (It’s an especially effective technique with FSBOs … not to call to look for appointments but rather to invite them to a free educational seminar.) There are so many things you can do with it.
3. Work orphans. No, I am not saying that you should cold call kids without parents. This is a term I came up with. In your office, you have orphans. Here is a definition of real estate orphan. These are people that have been sold a house through your office by some agent that is no longer in your office. These are people who bought a house through you two, three, four, five years ago and are ready to sell now. Here’s how a call would sound. “Mr. and Mrs. Seller? This is Darryl from Power Realty, how are you? The reason why I am calling is I want to apologize. Why? Well, according to our records you sold a house through our office umpteen years ago and the agent you worked with is no longer with our company. The reason I am apologizing is because no one has been taking care of you from our office for quite some time. I just wanted to call and personally introduce myself and let you know that if there is anything you ever need, we are here for you. By the way, do you love the
house?” “It’s great.” “Have you done anything to it? Oh, good. By the way, have you folks ever thought of moving?” If you take those people and if you do what I said and stay in touch with your past clients once a month, you now “adopt” these orphans and they become part of your monthly follow-up of past clients.
4. Take the long way home. This is a little thing, but you will be surprised at what a difference it will make. Try driving to your office on a different route. I know what you folks do. You go to your office the same way every day. You’ll be amazed that just by taking a different route, you’ll see things you never noticed before … like a few FSBO signs.
5. Listen to your buyers. I can’t tell you how many listings I got because a buyer told me, “You know we just saw a house that we liked, but it wasn’t our style.” “Oh,” I’d ask, “what did you see? It was off an ad, huh? So it was being sold privately? Tell me, where was it?” If you have a good rapport with your buyer, ask for the address and phone number. They will tell you. Now you call up the seller. “FSBO this is Darryl Davis from Power Realty. I heard that your house was selling. I heard this from one of my buyers. They said I should maybe give you a call. Can I help you?”
6. Double team approach. Here’s an interesting technique. My pal Lynn and I team up. I call a For Sale By Owner, or I see a FSBO and they don’t list with me. Now, Lynn goes over there and knocks on their door. She is also from Power Realty, so they say, “No, we already spoke to Darryl.” And she says, “Oh, man,
SPRING 2013 KENTUCKY REALTOR® 11
Feature Article cont. if you’re talking to Darryl, you’re in good hands. He’s the best agent in the market.” Now, I do the same for you. You go in, you can’t close, so we send in the other agent. One hand washes the other. You like that?
7. The investor ad. You put an ad in the paper and you have prospects call you. Here’s what it would say: Homeowner / investor looking for three / four bedrooms in (whatever market you work). Isn’t that great? I mean talk about passive prospecting. Put the ad in and let them call you. Now, somebody who is a FSBO or maybe just thinking about selling, might see your ad and call.
8. Get 15 devoted people. Get 15 devoted people. Devoted people might be plumbers, electricians, gardeners, contractors, divorce attorneys, etc. These are devoted people because they are devoted to you and you have to be devoted to them. You have to have your own master list—people that you will always recommend like this plumber, or this electrician. You call them and say, “Here’s the thing. I am very active in real estate. I want to be able to create a relationship beyond what you and I currently have. What I want to do is if anyone needs an electrician, I want to refer you … but here is the fair trade. If you hear of anyone who is thinking about selling, you call me. Now, I plan on doing a big prospecting promotion campaign in the beginning of the year. We are going to put ads out on me with my photo and if you want to share in the promotion of it, I will give you a little title in the ad.”
9. Rental owners. This refers to owners of vacation homes; investors like that. You want to prospect these types of people because they may own several homes, collecting rent—an aggravation they might be willing to unload. I have plenty of agents throughout the country who get a good part of their listings by focusing on just that.
10. Relo companies and the Employee Relocation Council (Worldwide ERC). Of the 360,000 corporate moves last year, this organization was involved in 40-60,000 of them. How this works is that, let’s say IBM wants to move an employee from here to there. IBM hires a relocation company that manages the move and if the seller’s home does not sell within umpteen days, the relocation company buys the house so the move can happen promptly for IBM. It is then up to the relocation company to sell it; otherwise they own a home and lose money. If you build a relationship with a relo company, you can get several listings.
11. Builder accounts. If you can hook up with a builder, you’ve got tons of listings. Here are three ways for you to break into a builder. • If they build subdivisions, ask for just a section. For instance, say they have 50 houses, ask the builder to give you a try in just a section of their lot—say, 10 houses—to market it for them. • Ask them for their old dogs. Old dogs are the ones they couldn’t move. (Don’t call them “old dogs” to the builder!) They have been trying to sell them for a while and they just haven’t moved. Say, “just give me a chance and let me prove myself to you.” They really have nothing to lose. • Offer to do an open house. There is no commitment here. Just do an open house.
12. Do public open houses. This you already know, but it remains a great way to generate prospects and listings.
13. Conduct a farming and self-promotion campaign. These involve work, but are well worth it.
14. Do a mailing. Create a letter or postcard and send it out to your prospects. Now, when you do that, make sure you follow up. Don’t just do the mailing and stop there. Mail to 50 people and a week later cold call those 50 people and ask, “Did you get my mailing?”
15. Have a spotter for FSBOs. You tell a bunch of people—kids are great for this one—“if you find a FSBO for me I will give you $15.00. Just give me the name and number and I will give you $15.00.” Turn the page. Tell the mailman, the garbage man, the gardener/landscaper, bottled water guy, newspaper boy. Find the bird dog, the nosey neighbor. These are your spotters. You should do this right away. Well, I hope you got a tremendous amount of ideas on how to be more effective with your prospecting efforts. If you improve just 10% in prospecting, you will become a stronger agent, a stronger person and you will feel more in control of your career.
So accept the challenge and get to work!
Darryl Davis is the keynote speaker and instructor at the 2013 KAR Convention & Expo in Louisville on September 24-26. Don’t miss these sessions—register now. For over 20 years, Darryl Davis has traveled around the country coaching agents and brokers on how to achieve their Next Level® of success. He is the creator of the nationally acclaimed POWER Program®, the yearlong coaching and training course where Power Agents®, on average, double their production over their previous year. Darryl is a best-selling author, one of the highest rated speakers at the NAR Convention each year, and has a career-curriculum that brings agents from “Rookies to Retirement”. To find out about his training programs and/or speaking availability, please visit DarrylSpeaks.com.
Disclosure of the Accepted Offer By: Jason C. Vaughn, Esq.
The scenario is this. You are a listing agent, and list your seller’s property for sale. An offer is made for the property, which the seller accepts. The transaction progresses as scheduled, but at closing, the buyer does not perform. The buyer further indicates that he will not perform, and he disappears. Four months later, a new buyer makes a new offer for the same property. The seller states that, because the first buyer indicated he would not perform, he feels comfortable accepting the new offer. The listing agent is the same as the first transaction, and does not make any disclosures regarding the previous accepted offer. The seller signs the new offer, and the parties close on the transaction. The question is whether the listing agent has committed an ethics violation for failing to disclose the existence of a prior accepted offer to the buyer’s agent. The answer is yes. Standard of Practice 3-6 of the Code of Ethics and Standards of Practice of the National Association of REALTORS® provides: REALTORS® shall disclose the existence of accepted offers, including offers with unresolved contingencies, to any broker seeking cooperation. Standard of Practice 3-6 is straightforward, and there is essentially no room for varying interpretations of its language. It requires the listing agent to disclose the existence of any prior accepted offers, regardless of the circumstances and regardless of the nature of the accepted offer. The language (“shall”) makes this disclosure mandatory, not permissible. Standard of Practice 3-6 does not, however, require disclosure of anything other than the “existence” of accepted offers to the broker/ agent seeking cooperation. The listing agent is not required to disclose the details of the prior accepted offer or the previous buyer, or why the previous transaction did not close. The listing agent need only disclose the fact that there was a prior accepted offer. The purpose of such disclosure is to provide the new buyer, through their broker/agent, notice of the existence of a previous accepted offer, so that the new buyer may perform their own due diligence regarding the previous transaction. It essentially shifts the burden from the seller to the new buyer, and helps to ensure that the buyer is well informed. Furthermore, the listing agent should distinguish this ethical rule from the local MLS rules. It is possible that the MLS rules would not require disclosure of an accepted offer, while, at the same time, Standard of Practice 3-6 would require disclosure of the same. Moreover, Standard of Practice 1-7 provides, in part, that:
REALTORS® shall recommend that sellers/landlords obtain the advice of legal counsel prior to acceptance of a subsequent offer except where the acceptance is contingent on the termination of the pre-existing purchase contract or lease. Standard of Practice 1-7 imposes a duty on the listing broker to recommend to his or her seller to seek legal advice under certain circumstances. In the above scenario, the seller and previous buyer had a contract to purchase the property. The second offer was not contingent upon the termination of the pre-existing contract. As such, the listing broker should have recommended to the seller that he or she seek the advice of legal counsel prior to accepting the new offer. The listing broker failed to do so, and therefore, also committed an ethics violation under Standard of Practice 1-7. This section does not require the listing agent to communicate to the seller anything more than the fact that he recommends that legal advice be sought. It is, however, recommended that the listing agent make such recommendation in writing, (through email or otherwise), so that there is evidence such disclosure was made.
Jason is a lawyer with Vaughn & Smith, PLLC in Louisville who recently served as the instructor for KAR’s professional standards training. His reviews came back overwhelmingly positive with attendees saying he worked through and clarified common issues they didn’t realize were ethics violations but also violations of the law. He will be presenting many of these issues in a session at the 2013 KAR Convention & Expo on September 24 – 26.
FALL 2012 KENTUCKY REALTOR® 13
completed second lien terminations, 436 short sales and 296 completed refinances.
Upcoming Legislative Session
“This settlement provided real relief to hundreds of Kentucky families, who otherwise may have lost their homes.” General Conway said. “I am proud that the total settlement relief provided to Kentuckians has exceeded our original estimate. The Office of the Attorney General has received some complaints from consumers that servicers are not meeting their obligations under the settlement. There are currently ongoing discussions with other Attorneys General about the best way to resolve these complaints to ensure that consumers receive assistance and that banks are upholding the servicing terms outlined in the settlement.”
The 2014 Kentucky General Assembly will begin its session in Frankfort, Kentucky, convening on January 7th. Since this is an evennumbered year, this will be the long session, however, it may not last more than 60 legislative days, and cannot extend beyond April 15th. Kentucky lawmakers will have to examine the most pressing and important topics that face the Commonwealth. Top issues will include the state’s budget, tax reform, education, and Medicaid. The KAR Governmental Affairs Committee will meet during KAR’s Annual Convention to prepare the legislative priorities for the session. Details about the priorities, including talking points, whether or not KAR supports a particular piece of legislation, resources and more, will be circulated to the membership and local boards once set. This will occur in the last quarter of 2013. Be on the lookout so you can be prepared on the issues. While the Kentucky General Assembly is in session, the Kentucky Association of REALTORS® will host its annual Legislative & Business Meetings from February 11-13. This is an opportunity to meet your state leaders, share your REALTOR® concerns directly with legislators, support legislation & issues important to real estate in Kentucky, and ensure policymakers hear your REALTOR® voice. It’s a free meeting and open to all KAR members. In addition to pending legislation, you may have noticed the 2014 Election Cycle has already kicked into high gear. Many races have been highly visible with several others waiting to receive the same treatment. Offices on the ballot in Kentucky are: U.S. Senate Seat (6 year term. Senator Mitch McConnell’s seat) U.S. House (2 year term. All U.S. House seats are on the ballot) State Senate (4 year term. Even number districts are on the ballot in 2014) State House (2 year term. All House seats) County Officers (Judge/Executive, PVA, Constable, Sheriff, County Clerk, Jailer, etc.) Visit the Secretary of State website at www.sos.ky.gov, then Elections and Overview and click the schedule link in the center of the page for Kentucky’s election schedule. The filing deadline for candidates running in the Kentucky Primary is January 28, 2014. The Primary Election day is May 20, 2014.
National Mortgage Settlement Provides Relief for KY Homeowners Kentucky Attorney General Jack Conway released the most recent numbers on the National Mortgage Settlement. Through June 30, 2013, 1,833 Kentucky homeowners received more than $63.7 million in settlement-related relief from Ally/GMAC, Bank of America, Citi, Chase and Wells Fargo. Borrowers each received an average of $34,771 in assistance. The various forms of relief provided to Kentucky borrowers included 178 completed first lien modifications, 576
In addition to participating in the national mortgage settlement, General Conway filed suit in January 2013 against the Mortgage Electronic Registration Systems, Inc. (MERS) for violating Kentucky’s recording statutes by not recording mortgage assignments with county clerks when mortgages were sold or transferred from one bank to another.H.R. 8, the “fiscal cliff ” bill contains real estate provisions
Kentucky Homes Matter kentuckyhomesmatter.com As Kentucky continues to contest budget issues, KAR has taken a proactive approach to educating members, consumers and legislators on why home ownership is important to Kentucky. Unfortunately, some in Frankfort are talking about increasing taxes on our homes, new taxes on home sales and putting home ownership out of reach by eliminating the mortgage interest and property tax deductions. The entire real estate industry in Kentucky, including licensees, your vendors, your clients, and the local business community of which you are a part, must help share the importance of protecting home ownership. Unifying behind the campaign of “Kentucky Homes Matter” is critical to our success. This campaign will form the basis of all internal and external communications about our industry’s legislative goals.
Governor Beshear Signs Redistricting Bill into Law Legislative redistricting is done every ten years based upon the U.S. Census. At the special called legislative session in August, new legislative boundaries for 138 members of the General Assembly were approved and now are signed into law by Kentucky’s governor. Visit www.kar.com > Government Affairs > Legislative Toolkit to view the new maps.
KAR has made available a training video, a toolkit that includes a handout, sample letters to legislators and editors as well as a PowerPoint which you can access by visiting www.kar.com > members > KentuckyHomesMatter. As you become familiar with this message, the support materials and the new website–kentuckyhomesmatter.com, we encourage you to use them in your discussions with legislators, local community leaders and the media in your area. See page 17 for more info on the campaign.
RPAC Fundraisers Target:RPAC is being held once again during Convention— darts are available for purchase for $50 each with the chance to win over $2,500 in cash and prizes by stepping in the “Money Machine.” The event will be held Wednesday, September 25 and you do not have to be present to win. You could win a KAR Regional Gift Basket when you visit the RPAC Booth at the KAR Convention by playing “Guess What’s in the Jar!”
Broker Involvement Program Get involved in a program that will boost Kentucky’s Call-for-Action response rates and you have a chance to win an iPad. Any broker currently enrolled or brokers who sign up prior to KAR’s Convention will be entered in a drawing for a free iPad. If you are a real estate broker in Kentucky, enroll today—it’s free and easy— and if you are an agent, please encourage your broker to join. Visit www.realtoractioncenter. com or contact firstname.lastname@example.org to join.
year period. It would create a new utility to promote the securitization of mortgages. However, the draft does not provide for a federal guarantee for the utility. The draft also contains significant changes to the FHA program that include income targeting, downpayment increases and loan limit decreases. NAR cannot support this draft without a federal guarantee and a removal of the FHA Title. The bill does include some positive changes including language to fix the definition of fees and points in the ability to repay/qualified mortgage (QM) regulation so that consumers have more options when choosing a lender, and language related to mortgages seized under eminent domain. NAR submitted a written statement for the hearing, opposing the discussion draft. The bill is not expected to come to the House floor until the fall. NAR will continue to work with Congress and explain their opposition to the legislation.
Qualified Residential Mortgage Rule Regulators re-proposed the Qualified Residential Mortgage (QRM) rule that will give creditworthy buyers access to safe and affordable loan products without burdensome down payment requirements. Thanks to REALTORS® around the country that remained vocally opposed to the original proposal, changes were made that will give many more Americans access to homeownership. To learn more about the QRM rule, visit bit.ly/qrmrule.
Health Insurance Reform: Health Insurance Exchange and SHOP
Protecting Americans Taxpayers and Homeowners (PATH) Act
The health reform legislation (HR 3590, Patient Protection and Affordable Care Act (ACA) and subsequently HR 4872, Reconciliation Act of 2010) that was approved and signed into law in 2010 has made major changes to many aspects of our health care system.
Recently, the House Financial Services Committee held a hearing on the Protecting American Taxpayers and Homeowners (PATH) Act discussion draft, introduced by Chairman Hensarling (R-TX). The comprehensive discussion draft includes reforms to FHA, the GSEs, and the financial regulatory law known as the Dodd-Frank Act. NAR opposes this legislation based on two major concerns: 1) They strongly oppose the end of federal guarantee for a secondary mortgage market; and 2) they strongly oppose the dramatic restructuring and targeting of FHA. The draft would wind down Freddie Mac and Fannie Mae over a five-
As many know or finding out lately, America’s health care system is incredibly complicated and complex. Thus, so are many of the changes in the bill that is now in place. NAR did not support or oppose the legislation that was passed but instead chose to work with members of Congress from both sides of the aisle to address as many concerns of our members as possible while also guarding against real estate tax provisions being used as a major way to pay for some of these changes. So what do all these changes mean to you as a real estate professional? Well, they mean a lot – more than space in the magazine will allow.
FALL 2013 KENTUCKY REALTOR® 15
Legislative Update cont. A few of the questions and answers have been explained below, however, it is strongly encouraged that you do your own research to learn as much as you can about the upcoming changes and how they may affect you. A good place to start is at the link listed at the end of the Q & A. What’s an “individual mandate?”
Smart Growth Grants Each year, the Smart Growth Action Grant Program makes available $150,000 to state and local REALTOR® associations to support such activities.
A. The mandate can be satisfied with health insurance obtained via the Exchanges/SHOPs, through an employer plan, through a spouse’s employer-provided plan and an existing insurance policy. Coverage obtained through retiree plans, veteran’s programs, Medicare, Medicaid, SCHIP (Children’s Health Insurance Program), and available to active duty military will also satisfy the mandate as will other designated types of government-sponsored health plans.
NAR’s Smart Growth Action Grants support a wide range of land-use related activities. To be considered, activities should support the core purpose of NAR’s Smart Growth Program: to support REALTOR® engagement in land-use related issues with the primary goals of affecting public policies that support a more sustainable development paradigm while raising the profile of REALTORS® as community leaders and enhancing REALTOR® relationships with elected officials.
How would people get health insurance in this reformed health insurance system?
Contact Anetha Sanford at 859-263-7377 or email@example.com for more information.
A: The Acts impose an “individual mandate” or directive that all individuals have health insurance coverage of some sort. An individual is also responsible for providing insurance both for himself/herself and any dependent family members. How does one satisfy the mandate?
A: Individuals and Very Small Businesses: Individuals, the selfemployed and small businesses will buy policies from private insurance companies underwritten and rated using the new set of consumerprotective federal rules. These new policies will be available through state-based “Exchanges” and a “Small Business Health Option Programs” (SHOP) exchange. Individuals and small businesses can also choose to continue any insurance coverage that they already have. In the terms of the Act, those existing plans would be “grandfathered” and considered coverage that meets the terms of the Acts. Kentucky Health Benefit Exchange…What is an “Exchange”? A: The Health Benefit Exchange will operate as an online marketplace where individual Kentuckians and employees of small businesses can comparison shop for health insurance based on cost, benefits and quality. It will also allow individuals and businesses to apply for premium subsidies and tax credits. Through the Exchange, an individual can also apply and have eligibility determined for Medicaid and the Kentucky Children’s Health Insurance Program (KCHIP). For more information, visit healthbenefitexchange.ky.gov. What types of individuals and small employers would be eligible to participate in an Exchange or SHOP? A: The Exchange will be open to those who currently purchase insurance in the individual market. This group will include, for example, early retirees (pre-Medicare eligible retirees), the self-employed, individuals whose employers do not provide insurance, or those who cannot afford their employer’s insurance. The SHOP will be open to the self-employed individual and the employees of firms with 100 or fewer employees. The bill grants the Administrator (or states) the authority to allow larger firms to participate in the Exchange or SHOP in the future and/or to merge the Exchange and SHOP into one larger pool. For more information, visit www.realtor.org/healthreform and look under the heading “What It Means to You” for a list of FAQs and other resources.
OKH Receives Smart Growth Grant The Old Kentucky Home Board of REALTORS® was able to submit a winning grant proposal to NAR for a “Smart Growth Grant” to help in funding a feasibility study for a YMCA/ Community Activity Center to be located in Bardstown. We were invited to the Fiscal Court meeting to present the check and were thanked by all the fiscal court members for our commitment to the continuous pursuit of improving our communities making it a better place to live. Presenting the $4,000 check is Joey Hayden, president, and Molly Mattingly, president-elect of the Old Kentucky Home Board of REALTORS® to Judge Dean Watts at the Fiscal Court meeting in June. As a result of securing the grant, the board has been invited to send a member to serve on an ad-hoc committee appointed by the County Judge to follow up and make recommendations on the study for a plan going forward.
By the Numbers
8 in 10
Number of Americans who believe buying a home is a good financial decision, up 8 points since 2011 according to the 2013 NAR Housing Pulse Survey. More than two thirds (68 percent) say now is a good time to buy a home.
The percent drop in PC sales in the first three months of 2013, according to Reuters. Americans bought fewer personal computers at a sharper decline than any three-month period since 1994, when record-keeping began.
The percent of Millennials (GenY) who decided to buy in 2012 did so in order to invest and build equity according to a Pulte Homes study. In addition, this demographic appreciates an efficient use of space, an open layout for entertaining, ample storage space, and outdoor space that extends their living areas. A Better Homes and Gardens survey showed the age group wants unique spaces, not traditional floor plans complete with a home theatre instead of a living room, a home office instead of a dining room, extra space in the kitchen for a TV instead of a second oven and nearly two-thirds said they wouldn’t purchase a home without up-to-date tech capabilities.
In 2012, the percent of salespeople who used social media for selling that outperformed those who weren’t using social media, according to new research conducted by Jim Keenan, a social sales specialist. He found that social media users were 23 percent more likely to exceed sales quotas than their non-social peers. More than 40 percent of those surveyed say they’ve closed between two and five deals as a result of social media. Another 10 percent of respondents attributed their social media efforts directly to closing transactions.
78%, 78% and 65%
Each of the three ethnic groups surveyed by Better Homes and Gardens viewed homeownership as an overarching lifelong goal. In fact, homeownership is considered to be the biggest indicator of status by all groups: African Americans (78 percent), Hispanics (78 percent) and Caucasians (65 percent). In addition more than half of the Hispanics (52 percent) surveyed, who do not currently own their own home, say they are focused on saving for a down payment as compared to 46 percent of African Americans and 44 percent of Caucasians who do not own their own home.
one in three
The number of Millennials who are prepared for home maintenance (nearly 1 in 3) and would actually prefer a “fixer-upper” to a house that needs minimal repairs, according to a recent survey. Nearly half (47 percent) of Gen Yers also would be more likely to tackle a home maintenance problem themselves, rather than calling a professional to handle the job. More than 70 percent of Millennials consider themselves just as handy—if not more so—than their parents.
The population, in numbers, of largest demographic in the country’s history— the Millennials—ages 18-34.
The home ownership rate dropped to this percent in the first quarter of 2013, down slightly from 65.4 percent a year earlier, the lowest since 1995, according to the Census Bureau. The home ownership rate peaked in June 2004 when it stood at 69.2 percent.
2,306 square feet
The median U.S. home expanded to 2,306 square feet, increasing by 8 percent from 2009 and hitting an all-time record, reported CNNMoney. During the tough economic times, homes shrank by 6 percent, supposedly ending the McMansion trend and leaving the average home sized at about 2,100 square feet. So the shrinkage might not have been an indicator that homebuyers really want a smaller home. Instead, according to the NAR, people prefer a home that’s about 2,200 square feet.
The percent of homebuyers under the age of 44 who used the internet in their home search according to the 2012 NAR Profile of Home Buyers and Sellers.
A Zillow analysis of all active real estate listings reveals that agents write lengthier descriptions for more upscale properties: homes under $100,000 used a median of 250 characters, compared to a median of 487 characters for houses priced higher than $1 million.
Education CORE Course Online
www.kreef.org > CORE Course Online Licensees need to complete this course, which also provides six (6) hours of law continuing education credit, once every four (4) years. Don’t wait until the last minute and don’t get tied up in the classroom—have the flexibility to fit education into your schedule.
The Kentucky Real Estate Education Foundation awards scholarships annually to members who want to pursue the GRI designation as well as residents of Kentucky who wish to pursue a career in real estate or related field at a Kentucky institution. The following were selected for awards in 2013:
Appraisal courses now being offered online www.kreef.org > Appraisal Courses KREEF is now offering online appraisal courses through McKissock Online Education. These courses include the USPAP course as well as a selection of over 20 elective courses needed to complete the annual training requirements. The classes are approved by the Appraisal Qualifying Board (AQB) and also approved for Continuing Education by the Kentucky Real Estate Appraisers Board.
Online NAR designation/certification courses now count for KY CE www.kreefonline.org is the portal to the online courses under NAR’s official family of designations and certifications including ABR®, AHWD, BPOR, e-PRO®, CIPS, GREEN, RSPS, SFR and SRES®. REALTOR® University offers over 400 hours of online real estate and professional continuing education to help members build skills and earn designations and certifications. These courses not only count toward a designation and certification, but also as a GRI elective. Six of these courses, found under the “Kentucky Continuing Education” tab, also count for CE credit in Kentucky so earn your credits while starting down the path to a certification or designation.
Online CE: easy and convenient
Kim Smith GRI Scholarship Recipient
James Brown GRI Scholarship Recipient
Amy Smith College Scholarship Recipient
Mallory West College Scholarship Recipient
www.kreef.org > Online Education Courses are available to you 24/7—all you need is a computer and internet access. It’s that simple. These courses can be taken at your pace. Finish the entire course in one sitting or you can pick up where you left off. Know the Code: Real Estate Ethics 6 hours (3 hours law credit & 3 hours elective credit) Foreclosures, Short Sales, REOs & Auctions 6 hours (3 hours law credit & 3 hours elective credit) Environmental Issues in Real Estate 6 hours (3 hours law credit & 3 hours elective credit) Fair Housing 6 hours (3 hours law credit& 3 hours elective credit ) Real Estate Finance Today 3 hours (3 hours elective credit)
GRI/CRS Elective Course Ninja Selling Monday, September 23 (one-day course) Galt House Hotel Louisville, Kentucky 10am - 6:30pm EST Instructor: Michael Selvaggio, CCIM, CRS, GRI Approved for CRS elective credit, GRI elective credit and 3 hours elective CE credit. Group pricing: 1 person - $150; 2 – 4 people – $125 each; 5 or more – $100 each; Current CRS and/or GRI designees – $75
Coming soon: Property Management & Managing Risk (6 hours)
Sponsored by KREEF and the KY CRS Chapter.
Risk Management (6 hours)
November 14 & 15 – Louisville, KY Instructor: Heidi Fore – 3 hours elective CE Take the newly redesigned course to learn more about business and technology processes that will increase work productivity and help you serve your clients more effectively and efficiently.
GRI 5: Systems for Success
SPRING 2013 KENTUCKY REALTOR® 19
Code of Ethics
REALTOR® Code of Ethics: Protecting Consumers for 100 Years By Hunt Cooper, KAR Director of Communications/Education
This year marks the 100th anniversary of the REALTOR® Code of Ethics. Sure, it’s been around for a while, but what does it all mean for real estate professionals and how has it changed over the years? Real estate license laws did not exist in the early 1900s, and very few regulations governed the industry. So in 1908, real estate professionals took it upon themselves to begin formulating a plan for ethical conduct for their business. The Code of Ethics, presented in 1913 as first written had no preamble, no grand statement of purpose and no reference to the Golden Rule, was created for what was then called the National Association of Real Estate Exchanges. Although it was developed with the idea it would be periodically revised to reflect the times, it was not the first of its kind in the real estate profession. The Greater Baltimore Board of REALTORS®, which included rules of ethical behavior in its founding bylaws in 1858, holds that distinction. And the Kansas City Association created the rules on which the NAR Code is based. The first attempt at the national Code divided responsibilities into two sections: the broker’s duty to his clients and the broker’s duty to his fellow brokers. Later, a third section, duties to the public, was added. Many of the concepts from the original code are still the basis for
Frank Craven of Philadelphia, presenting his report of the Ethics Committee at the 2012 annual convention in Louisville, Ky., said: “We cannot suggest a better starting point than the Golden Rule, ‘Do unto others as ye would that others should do unto you.’”
today’s version. Interestingly, the term REALTOR® was introduced in 1916, after two revisions of the Code had already occurred.
On July 29, 1913, at the annual convention in Winnipeg, Manitoba, NAR’s board of directors got their first look at the much-anticipated Code and adopted it for use by the association’s members. So why Winnipeg? To get to the answer, visit bit.ly/narcoe100 or scan the QR Code. For several years, the adoption of the Code by real estate boards was voluntary and many created their own versions. In 1923, it became mandatory that local boards of REALTORS® adopt and enforce the code and shortly after, the preamble was added. NAR first issued ethics enforcement guidelines in 1925 and by 1928, the Code was declared “complete” and not touched again for more than 20 years. Not until 1950 did REALTORS® once again change the document, removing the article that required REALTORS® to charge a commission and fees set by their board. This came about when the Justice Department brought an antitrust action against NAR, sending the case all the way to the U.S. Supreme Court. In the case, Article 9 was
The original Code of Ethics contained no language concerning standards of practice. In 1975, NAR adopted 21 standards of practice. Today, the Code includes 88 standards with Article 16 having the most standards at 20.
and even explains accountability in advertising, communications and, most added most recently, online practices (Standard of Practice 12-10) In short, working with a REALTOR® gives buyers, sellers and investors many advantages they need to succeed in today’s real estate market. One of those advantages is the assurance that REALTORS® subscribe to a strict Code of Ethics which provides their clients with the highest degree of professionalism, ethics and service.
declared anticompetitive and the Code was amended to reflect the ruling. Since this case, the code has been modified 36 times, including every year since 1989.
REALTORS® and consumers alike can read more about the Code of Ethics and can find a summary of the Code that explains how it benefits them at www.REALTOR.org/code-of-ethics.
In 1974, the Code of Ethics was completely revised for the first time since 1955 in that several articles were rearranged, reworded or combined. In this revision, Article 10 was added that addressed fair housing issues, stating that REALTORS® shall provide equal professional services to all persons regardless of race, creed, sex or country of national origin. Changes to Article 10 were again made in 1989 and 2010, the latest to include all persons regardless of sexual orientation.
52 percent. That’s the percent of female
In 1994, another major overhaul occurred which brought the Code back to its roots and returned it closer to its original format. At this time the number of articles was reduced from 23 to 17 and the first six articles of the Code were taken out of the main body of the document and added to the existing text of the introduction. The four year cycle of ethics training, which still exists today and started a new cycle this year, was instituted in 1999 following the recommendation of the Presidential Advisory Group on Code of Ethics Enforcement the year prior. Today, the Code serves as a comprehensive document spelling out professional responsibilities that must be followed by all REALTORS®. It consists of 17 articles organized into duties to clients and customers, the public and toward other REALTORS®. The Code is renowned for its progressive attitude toward equal opportunity and fair housing and outlines the obligations of REALTORS® throughout the transaction to all parties, the property
REALTORS® in the United States in 1989—the same year the Code of Ethics got a rewrite to replace pronouns like “he” and “him” with gender neutral terms. But even the version of the Code before the 1989 revision didn’t seem as male-centric as the 1913 version, which outlined “the duty of real estate men toward their clients” and “the duty of a real estate man to other real estate men.” That’s not all that was changed in favor of inclusivity that year. Article 10 was also revised to include that REALTORS® cannot deny equal professional services to protected classes—religion, handicap and familial status—bringing the Code in line with fair housing and employment laws. It’s a good thing the Code of Ethics dropped masculine pronouns in 1989. Now, the majority of all REALTORS® are women. COE Quiz 1) Which two concepts in the original 1913 Code of Ethics remain in the Code today? a) avoid the unauthorized practice of law; provide competent service b) cooperate with other REALTORS®; arbitrate disputes c) compensate cooperating brokers; submit offers and counter-offers objectively and as quickly as possible d) all of the above 2) Which association still in existence created the oldest code of ethics before the REALTOR® Code existed? a) Kansas City b) Greater Baltimore c) New York State d) Chicago To find these answers and to take the full COE quiz, visit bit.ly/coequiz
SPRING 2013 KENTUCKY REALTOR® 21
Local Association News Pioneer Trace Board
Greater Louisville Association
The Pioneer Trace Board entered the “REALTORS®: Turning Houses into Homes” float in the Tollesboro Lions Club Fair parade, which took place in Lewis County in July. Members on the float gave out candy to the people lined up along the parade route which help promote REALTORS® throughout the county. The float worked overtime as the Board also put it to work as a booth at the “Old Reliable” Germantown Fair in Mason County later that month. The booth gave members the chance to hand out pamphlets promoting REALTORS® and the importance of having them part of the real estate transaction while also giving out candy, business cards and signing up attendees for a chance to win one of three prepaid credit cards.
The GLAR recently unveiled a new workspace for members in the form of an Internet Café. The new space, inside the association office, includes Wi-Fi, two computer terminals, a small conference room, conversation areas to meet with clients or other REALTORS®, as well as complimentary coffee service. The Café is open from 8am to 9pm daily. In addition, GLAR’s third annual Charity Golf Outing, held in July, was a huge success raising $20,000 for three local charities. Members of our Community Relations Committee worked tirelessly on this event. A big thank you to everyone who participated and was involved in making it happen.
Murray Calloway County Board The MCC Board recently honored Joel Ferguson as the recipient of their first annual Community Service Award. The award is given to a local graduating senior in Calloway County who willingly gave of their time and talents toward various community services. Joel was presented with a Certificate of Achievement and a $100 check for his many hours of service with many non-profit organizations.
Lexington on list as a “hot” city According to Real Capital Analytics, Lexington ranked 5th for cities that saw the greatest year-over-year increases in deal volume during 2012. This was attributed in an article that talked about the creation of good jobs through innovation—sectors like high-tech, biotech, pharmaceuticals or digital entertainment. It listed many factors that lead to becoming a “hot” city through innovation—a well-educated labor force, good universities, a business-friendly climate, financial incentives, low taxes, and a vibrant social scene.
Paducah makes a comeback Paducah was listed by CNN as one of “America’s best small town comebacks” in their travel section and piece on the best of USA travel. The posting listed Paducah as the small town with big art. Here is what the article revealed about the western Kentucky town: Those present for the presentation were (left to right) Community Service committee members Brenda Rowland and Judy Denton, Joel Ferguson, award recipient, Debbie and Anne Ferguson, mother and sister of Joel and Adam Pittman, Joel’s English teacher.)
Northern Kentucky Association NKAR presented a check in the amount of $5,315.04 to Rob’s Kids, Inc. from the proceeds of their golf outing in May. Rob’s Kids is passionately committed to making a difference in the lives of children who struggle with depression and post-traumatic stress disorder. They provide funding and sponsorships to psychiatric professionals, while providing resources and education to families, with a goal of providing a safe place, where kids can find a home away from home.
Then: In the 1980s, historic Lower Town was 20 square blocks of oncebeautiful homes blighted by crime and neglect. Its commercial center sat 70 percent vacant. Now: More than $100 million in investment later, those same blocks are home to a vibrant arts and small business community that’s now listed on the National Register of Historic Places. With brick- and treelined sidewalks that attract more than $200 million in annual tourist income, the town underwrites an Artist Relocation Program that’s drawing resident artists and international visitors, and is considered a national model for utilizing the arts for municipal resurrection. Wow: Held each May, the Lower Town Arts & Music Festival was recently tapped among the state’s top spring festivals, featuring Western Kentucky’s best art, music, theater and food.
Kentucky knows job growth In a report from Economic Modeling Specialists, Inc. (EMSI), Kentucky was found to be gaining one of the largest shares of job growth creation in all 50 states plus Washington, D.C., ranking sixth on the list (it was 20th in the previous ranking). To determine this list, EMSI compared projected 2012 job growth in each industry per state to actual 2012 job growth while looking back to 2009. Total actual
jobs were 2,023,805 versus expected jobs of 1,999,654 for an overage of 24,151 jobs, or 1.2%. The report says Kentucky has seen a huge boom in temporary help as well as in the federal and local government sectors.
Kentucky ranked 4th for retirement Kentucky made the list of one of the “best states for retirement.” Based on a number of factors from several sources, Bankrate compiled their list of the top ten and Kentucky ranked 4th overall. Here is what was reported: One of the strongest benefits that Kentucky offers retirees is an extremely low cost of living. The Council for Community and Economic Research, or CCER, which collects data on the relative costs of groceries, housing, utilities, transportation and health care in communities across the U.S., found that retirees in Kentucky are paying less than many of their counterparts across the country. Bankrate, which analyzed CCER’s data, found that Kentucky boasts the fifth-lowest cost of living in the nation. The Bluegrass State also has warmer-than-average temperatures and a crime rate that’s slightly lower than average.
Two cities added as Kentucky Cultural Districts Bardstown and Maysville joined the list of official Kentucky Cultural Districts, bringing the total number of state-certified communities to six. Kentucky Cultural Districts are proven cultural destinations for visitors and provide a high quality of life for residents. Arts and culture in these communities play a vital role in creative and economic development, not only for the cities but for the entire Commonwealth. The Kentucky Cultural District Certification Program is an initiative of the Kentucky Arts Council. A cultural district is a well-recognized, labeled, mixed-use area of a community featuring a high concentration of cultural amenities that attract local residents and visitors alike. Cultural districts can be found in any type of community, from small and rural to large and urban.
Kentucky recognized for job creation Area Development magazine, a trade publication for those in the economic development profession, has given its Silver Shovel award to the state of Kentucky, recognizing the state as being one of the most successful in creating jobs and securing investments in 2012. The awards were determined based on a state’s top 10 job-creation and investment projects that began to materialize in 2012. Kentucky’s top 10 resulted in more than 4,000 jobs and nearly $1.3 billion in investments, the release said.
Louisville a “hot pick” for Southern hospitality The editors of ConventionSouth magazine have recognized Louisville among 15 “Southern Hospitality Cities.” The national publication for event and convention planners named Louisville among its Hot Picks for 2013. The magazine selected one city from each state in the South, considering factors such as historical/quintessential tourism areas, service standards and politeness, visitor-friendly traditions, and community pride. ConventionSouth editor said “From its quintessential ambiance to its genuinely cordial people, Louisville especially stands out as a destination with Southern hospitality.”
The Greater Owensboro Realtor® Association (GORA) is excited that Owensboro was selected for the 2015 KAR Convention & Expo. The photo shows the progress of the Hampton Inn (L) and the Convention Center, which is slated to open in January 2014. GORA members look forward to seeing fellow REALTORS® in Owensboro in 2015!
Lexington ranks as top college town Lexington ranked fifth on the list of “Top College Towns in 2013.” To create the fourth annual list of the best college towns in America for Livability.com, they started by identifying cities with a high quality of life based on a range of factors from cost of living and walkability to cultural amenities and pollution levels. Then, they focused on places where a university is a top employer and key economic driver. To rank these cities, they looked at student-to-resident ratios, educational attainment, college-led community outreach programs and the percentage of 21- to 34-year-olds (to show that people stick around or move in after graduation). Finally, they considered other lists such as the American Institute for Economic Research College Destination Index.
Kentucky is one of America’s cheapest cost of living states The cost of living is a key factor when businesses decide where to set up shop. That’s why Cost of Living is one of the categories CNBC measured as they ranked America’s Top States for Business. Kentucky ranked as third (tie) as one of America’s least expensive states to live in as ranked by CNBC, as well as a sampling of the prices you’ll pay for some basics in the most expensive area of the state. Here’s how Kentucky stacked up: 3. KENTUCKY (*TIE) Average Home Price (Louisville Metro): $232,139 Half Gallon of Milk: $1.96 T-Bone Steak: $8.99 Monthly Energy Bill: $123.43 Doctor Visit: $86.10 2013 Cost of Living Rank: 3rd Cheapest 2013 Cost of Living Score: 48 (out of 50) 2012 Cost of Living Rank: 4th Cheapest Like the New KAR Facebook Page Keep up with all things KAR at the new Facebook page. This page is open to everyone and easy to “like” – it’s the newest social media hub to communicate real estate related topics. www.facebook.com/kentuckyrealtors
SPRING 2013 KENTUCKY REALTOR® 23
Two years of increasing home sales For the first half of 2013, total sales in the state were up 16 percent over the first half of 2012. Each of the three largest local associations (Lexington, Louisville, NKY) saw double digit home sale gains with region six posting a 22 percent increase. In that same region, with the water levels returning
The summer was good to Kentucky home sales and home prices followed suit through the first half of the year. In fact, total home sales over the past 24 months have increased every month, compared to the same month the previous year, with 19 of those months showing double digit gains.
1st Half 2013 vs 1st Half 2012 Housing Statistics BOARD/ASSOCIATION
# SOLD 2nd QTR 2013
# SOLD 2nd QTR 2012
SOLD MEDIAN % PRICE 2013
MEDIAN PRICE 2012
MEDIAN PRICE %
REGION ONE Henderson-Audubon Board
Kentucky-Barkley Lakes Board
Murray Calloway County Board
Greater Owensboro Board
REGION TWO Central Kentucky Association
Heart of Kentucky Association
Old Kentucky Home Board
REALTOR® Assoc. of Southern Ky. 824
South Central Kentucky Assoc.
REGION THREE Greater Louisville Association
REGION FOUR Lexington Bluegrass Association 4559
REGION FIVE Northern Kentucky Association 2682
REGION SIX Ashland Area Board
Cave Run Association
Cumberland Valley Board
Eastern Kentucky Association
Madison County Board
Somerset-Lake Cumberland Board 417
Pioneer Trace Board
to normal and activity for lake front homes picking up, Somerset-Lake Cumberland had a 51 percent increase in home sold for the first six months of 2013. Median prices in Kentucky have fluctuated from positive to negative each month in 2013 but landed up three percent over the first six months of the year. Again, the three largest association posted increases for the period while regions one and two saw gains of four and five percent respectively. For the month of June, Kentucky saw an increase of 13 percent in home sold year over year while median prices dropped 4 percent. On the national level for the same month, home sales increased at a similar pace for the same period however the median price experienced its seventh straight month of double digit year over year increases. The housing recovery across the country seems to be shaping up by taking into account the national figures. Over the past several years, prices took a steep dive in many parts of the country so having price increases nationally isn’t surprising. The striking difference between Kentucky’s current home price situation, showing a slight decline, compared to the national picture, is the state never saw the extreme highs and lows that were experienced by so many other states. Kentucky’s median home price, sitting at $110,700 for June 2013, remained relatively steady through the depression while the rest of the country saw declines as high as 50 percent in some areas. Nationally, the median home price for June 2013 rose to $214,200 giving Kentucky some of the lowest housing costs, comparatively, in the nation. “It remains a fact that our state offers affordable housing prices when looking at most places across the U.S.,” said John May, president of the Kentucky Association of REALTORS®. “Market activity within our borders has seen an extended period of sustained growth as evidenced by the numbers. This was helped along by low interest rates and pent-up demand.” According to the National Association of REALTORS®, affordability conditions still remain favorable in most parts of the country, however, higher mortgage interest rates and
lower housing inventory may slow sales in the coming months. But despite these possible hurdles, Lawrence Yun, NAR chief economist, identified compensating factors that can sustain a continued recovery.
Percent change Jan–July 2013 vs. 2012
“Although housing affordability conditions will become less attractive, jobs are being added to the economy, and mortgage underwriting standards should normalize over time from current stringent conditions as default rates fall.” Continuing the promising sign of a recovering market was the decline in distressed home sales. Nationally in June and July, foreclosures and short sales accounted for 15 percent of sales, matching the lowest share since monthly tracking began in October 2008.
Median Price of KY Homes YEAR
JAN FEB MAR APR MAY JUN JULY AUG SEPT OCT NOV DEC YTD
102750 106000 111000 106000 113250 112975 118700 113497 112000 97750 94913 97950 103375
106000 101500 105000 113725 109975 114700 113125 113925 108250 109100 110663 112839 104300
101750 101750 99950 110000 113500 116500 108950 109250 110000 104000 108960 113200 109825
109750 100000 96250 103250 108777 114125 114500 99250 113200 117775 108250 95868 106750
88925 109250 105000 110375 107750 115000 101000 101000 117750 114875 98250 102375 108750
2013 103475 93000 109500 108500 109975 110700 - - - - - - 109000
Number of Homes Sold in KY YEAR
JAN FEB MAR APR MAY JUN JULY AUG SEPT OCT NOV DEC YTD
2426 2771 3225 3223 3686 3793 3529 3448 3207 2956 2230 2407 36901
1645 2071 2605 2685 3032 3656 3908 3465 3488 3613 3211 2837 36216
1947 2150 3067 3582 4181 4231 2843 2894 2652 2449 2280 2631 34907
1871 1952 2809 2964 3069 3370 3201 3437 2985 2807 2739 2808 34012
2091 2321 3020 3134 3723 3764 3747 4186 3199 3357 3156 2968 38666
2013 2555 2577 3391 3726 4401 4272 - - - - - - 20922
SPRING 2013 KENTUCKY REALTOR® 25
Covington: Kentucky river town meets urban vitality Covington, located where the Ohio and Licking rivers meet, is the largest city in northern Kentucky and with a population of just over 40,000, it is also the 5th most populous city in Kentucky. So how did Covington become the thriving river town it is today? Covington was established in 1814 when John Gano, Richard Gano, and Thomas Carneal purchased an area known as “the Point,” 150 acres of land on the west side of the Licking River, from Thomas Kennedy for $50,000. The men named their new riverfront enterprise the “Covington Company,” in honor of their friend, General Leonard Covington, an American officer who once trained troops in the area and was killed in the War of 1812. The new city was planned in a small space of 150 acres, approximately five blocks wide by five blocks deep, with the design originally lining up the streets to match with the existing streets of Cincinnati across the Ohio River. The first five streets were named for Kentucky’s first five governors: Shelby, Garrard, Greenup, Scott and Madison. (The city of Covington now has a total area of 13.7 square miles and is part of the PMSA that encompasses nine counties and 2,700 square miles in Kentucky, Ohio and Indiana). A year after being established, the Kentucky General Assembly incorporated the land as a town and a short time later, the investors began selling lots for the new city. At $385 per lot, the land proved to be too pricey for most, and sales were slow and disappointing. Over the next 15 years, the city’s population had grown to only 715 and, by that time, the lot prices were selling for half their original value. In 1830, a transformation took hold in Covington that still leaves its influences behind today. A large influx of German immigrants settled in the area and the population skyrocketed causing the Kentucky legislature to incorporate the town as a city in 1834 and around the same time, the boundaries were stretched and Covington underwent its first annexation. The city lines gave way to neighborhoods known now as Mutter Gottes and the ever popular “MainStrasse,” where, in 1861, the city tried to establish a public market in the center of Sixth Street, which was laid out wider photo courtesy than most to accommodate such an effort. Studio Daniel Libeskind
To add to the strong growth of Covington during this period, Stewart Iron Works was established in 1862 and quickly became the largest iron fence maker in the world. The city continued expanding during most of the 19th century, only declining during the Great Depression and the middle 20th century. It has, in the last few decades, seen redevelopment take hold in and around its center core. Beginning in 1980, Covington began its comeback, with its population increasing for the first time in more than 70 years. This injection of life came as a new industrial park was built on the south end of town and later, the RiverCenter Complex, a riverfront development project, added over a dozen new businesses. This came about in the late 1980’s when the city, using state and local funds, began acquiring properties along the Ohio River for redevelopment. The revitalization effort brought in hotels, parking garages, office space and multi-million dollar condominiums and apartments. At the same time, a housing boom was taking place in the southern part of the city. Among new subdivisions built in South Covington in the 1990s were Ridgeport, Clover Meadow and Heathermoor. In the last decade, residential redevelopment moved toward the downtown area and elsewhere in the city. Multi-million dollar construction projects in new residential housing and housing development are completed in the downtown area. The Ascent at Roebling’s photo courtesy MamaGeek Bridge, a project that offers views of the 140 year old suspension bride and the Cincinnati skyline has units that have sold up to $5 million, and The Views, a residential townhouse development on the hillside off of Pike Street in the Lewisburg neighborhood, are a few prime examples of the growth taking place. Even with all the growth from previous decades and the efforts going on today, Covington still maintains its roots to the past. In fact, it has the largest number of National Register Historic Districts (21) for a city its size, in the State of Kentucky. The city is second only to Louisville, which is decidedly larger, in the number of buildings and sites listed on
Covington is within 600 miles of 60% of the United States population, 58% of the country’s manufacturing firms, and 59% of the nation’s purchasing power.
So what is Goetta?
photo courtesy Greg5030
the National Register of Historic Places in the state. Covington remains well known for its many historic neighborhoods and the downtown area is home to a large concentration of historic buildings. To honor its history and take pride in its achievements through the years, Covington is the proud host for many local festivals and special events. These events, as much as they are enjoyable, are also an integral part of celebrating Covington’s diversity. With the support of the local communities, and guests from far reaching places, the festivals have served the people of the area for a long time. A few of these include Riverfest, Maifest, Oktoberfest, Mardi Gras, First Friday Gallery Hop, Fresh Art and the “Original” Goettafest, chosen as one of the Summer’s Top Ten Festivals and Events by the Kentucky Tourism Council and the Southeast Tourism photo courtesy Rick Dikeman Society as one of the Top 20 Events.
Traditionally a breakfast food, Goetta is a sausage of likely German-American origin that is popular in the greater Cincinnati area. It is primarily composed of ground meat, usually pork or pork and beef, steel-cut oats and spices and is often served with apple butter, ketchup, mustard, syrup, grape jelly, honey or eaten by itself. Pronounced gétt-aa, ged-da or get-uh, this dish probably originated with German settlers from the northwestern regions of Oldenburg, Hannover, and Westphalia who emigrated to the Cincinnati area in the 19th century. The word “Goetta” comes from the Low German word götte. Goetta was originally a peasant dish, meant to stretch out servings of meat over several meals to conserve money. More recently, goetta has become an allpurpose food eaten with any meal. New goetta products in the Cincinnati area include goetta burgers, goetta dogs and goetta pizza, often found throughout Goettafest.
In addition, this vibrant urban community is home to many of Kentucky’s premier attractions including the Carroll Chimes Bell Tower, the Garden of Hope, John A. Roebling Suspension Bridge, Mother of God Church, St. Mary’s Cathedral Basilica of the Assumption, Behringer-Crawford Museum of Northern Kentucky, the Carnegie Visual & Performing Arts Center, the Railway Museum, the Madison Theater, Devou Park Bandshell & the Kentucky Symphony Orchestra and the Spaceship House (look it up). Another interesting attraction located in Covington is the Roebling Murals, paintings located on the floodwalls near the riverfront. Led by artist Robert Dafford, a team of artists created a magnificent illustration of the history of Covington. Depicting a variety of scenes from the meeting of General George Rogers Clark, Simon Kenton, and Daniel Boone on the mouth of the Licking River to Jacob Price, a local African American leader of the late 1800s, and lots of buffalo, the murals span hundreds of feet along the floodwall and create a spectacular visual effect. This has spurred additional ongoing mural projects, led by a team from Artworks, at locations including the Licking River Greenway Trails and on the Kerry Toyota building at the corner of Scott Boulevard and 5th Street.
photo courtesy Chris Glass
Glier’s Goetta, the largest commercial producer of goetta, produces more than 1,000,000 lbs. (450 metric tons) annually, around 99% of which is consumed locally in greater Cincinnati.
SPRING 2013 KENTUCKY REALTOR® 27
A Day in the Life of...
A Day in the Life of… a REALTOR® Magazine 30 Under 30 Recipient Meredith Lane, REALTOR® Lexington, KY How many years have you been in real estate?
a publication geared towards young professionals in the Central Kentucky area. Has your media experience had an impact on your real estate career?
Every past experience—professionally and personally—has helped shape my business and work ethic today. In TV and in print journalism, you get used to working under pressure and deadlines, not to mention, stressful situations. Oftentimes, you’ll encounter the same high pressure or stress in a real estate transaction. The most important thing is to always remain calm and take care of your clients’ best interest, so that in the end, it is a win-win situation for all parties involved. Also, many of my former colleagues have become real estate clients and friends, so that has been beneficial as well.
You were recently named to REALTOR® Magazine’s 2013 class of 30 Under 30. How did you feel when you found out that you were chosen? When they called me and gave me the news, it didn’t register at first. The woman on the phone told me I’d been chosen as one of the recipients of this prestigious honor, but also that they wanted to fly me to Chicago for the cover photo shoot. I sat there silent for a minute with the phone to my ear before it actually registered what she was saying to me. I was the first Realtor affiliated with the Lexington-Bluegrass Association of Realtors to receive the award and I still feel incredibly humbled to be included in that elite class—it is such an honor to be chosen out of a tremendous group of applicants—not only to be in the class, but to be on the cover as well. I feel very blessed that my real estate business has been successful in a down economy and never take it for granted. You were also selected to be on the cover of the magazine? What was that process like? It was very exciting, flattering and humbling to be included on the cover with six other 2013 30 Under 30 classmates from around the country. REALTOR® Magazine flew us to Chicago, took us out for a celebratory dinner the night we arrived and coordinated an all-day photoshoot at a private residence. During the day, they shot video of us, conducted video interviews and took photos of us in all different arrangements for the publication. The entire experience was very professionally done and a lot of fun to bounce ideas off top agents my age from other markets. Being included in that group has also provided some fantastic opportunities after the magazine was published as well, such as being invited to speak at a YPN event out of state and as a panelist for a national real estate radio show. For many years prior to getting into real estate, you were in the TV business, working on-air and behind the scenes for Lexington television media including WKYT27 and WLEX18, in addition to an internship at Fox News Channel’s headquarters in New York. You were also the co-founder and editor of BG Magazine,
What did a journalism background teach you about the importance of building relationships and how did that transition over to real estate? It’s really important to reach out to your sphere of influence and continue to grow it. I don’t believe in “networking”, but in building solid, genuine relationships. Most of my business is referrals from past clients, former colleagues or friends. That is very important to my business model. My best advice to people genuinely wanting to grow their sphere of influence is to get involved in something they are interested in outside of work—be it a charitable organization, church, extracurricular activity, etc. Not only are you having fun and perhaps giving back to the community, but you are building genuine relationships with people along the way. You never know when they may want to buy or sell a home, and at the very least, you made a new friend out of the deal. It may sound cheesy, but it has worked for me.
You host a radio show on WLKT (104.5 The Cat), do on-air infomercial hosting for the cable company, write real estate columns for various publications across the state and have hosted a web series called “Cool Places” where you feature fun and interesting places, businesses and homes across Lexington. Do these activities have any residual effect on your real estate business? Oftentimes, you don’t really know which of your branding efforts or advertising dollars you spend affect your business. But for me, it’s the mentality of “throwing a bunch of stuff at the wall and hoping some of it sticks.” Be it with paid advertising, writing about real estate for various publications, throwing client events, doing the television work I do or my radio show (which isn’t about real estate), it’s all about personal branding. Even at the end of my radio show everyday, I sign off by saying, “I’m off to sell a house!” Every time you can put your name or face out there in a positive way that’s connected to your real estate business, it is a positive. Name recognition and a good reputation in your business help build your credibility, and with such an important purchase as buying a home, it’s important to be trusted and credible. Has the use of social media helped increase your business and how? Anything you can do to set yourself apart is going to help resonate with people. A free an easy way to do it is in using social media to brand your business and promote your listings. A lot of people say they don’t have time to use social media, but I use it a lot and am very busy! You can post photos and status updates from your cell phone anywhere you are; it only takes a few seconds. I use a personal page and real estate page on Facebook. I post stories about my personal life, real estate tidbits and of course, pictures of my Labrador, Brady! In addition, I have a Twitter page as well. Please like my pages and follow me! You recently joined your mother’s real estate team. Describe what it’s like working alongside an extremely close relative, who has been successful in the business, and what have you learned from her? When I first got into the business, I worked with and trained under my mother, Kitty Lane at Keller Williams Bluegrass Realty, before going to Milestone Realty Consultants for several years to gain more experience about new construction. This spring, I rejoined by mother at KW and we expanded The Lane Team by hiring a buyers’ agent in addition to our full-time administrative assistant. Learning from and working with my mother has been invaluable. She is an incredible agent and person, so to have her as my partner, mentor, mother and friend is truly a blessing. She is knowledgeable, professional and always has time to answer questions. The first thing she said to me when I got my real estate license was, “Don’t worry about the money. Take care of your clients, and the money will come.” That is so important. I do not think of myself as a sales person. I believe good real estate agents are problem solvers, because each transaction has its own set of challenges. So with each challenge, we have to work to come up with a solution that is favorable for the buyers, sellers and agents involved. What is the craziest experience you have encountered while showing a property? This job has little surprises everyday and when you’re showing property, you never know what you may encounter. I have walked in on people in the shower who forgot we had an appointment to show their home.
I have seen some of the oddest home décor you can imagine, some unique pets (a baby pig in the backyard was my favorite), interesting private “adult” rooms—you name it. Thankfully though, I’ve never had anything too crazy or scary happen. I stay very aware when showing property—especially to strangers—to keep myself safe at all times. Outside of your career, what is your favorite pastime? My business keeps me pretty busy seven days a week, so I don’t get a lot of free time, but when I do, I like to spend time with my loved ones, exercise, take my dog to the lake, do anything outside, travel and cook for my friends and family. What is the best advice you have ever received? And what is your best advice for other REALTORS®? There is a big difference between be a licensed real estate agent and being a great REALTOR®. Strive to be great. If you’re new in the business or struggling to find your stride, find top producing agents in your area and apply to work for them or ask to shadow them. Be positive, confident and always honest. Set expectations with your clients. Grow a thick skin—this business isn’t easy—but it can be very rewarding. A seasoned agent told me when I first started in real estate that to be successful all you had to do was work a half day. Of course, everyone thought that meant 8am-12pm… or 12pm-5pm… but then he added, “Just pick which 12 hours you want to work, and you should be fine.” That was a joke of course, but I definitely work a lot of hours in a week. This job is fabulous—it is incredibly gratifying to me to help my clients achieve the “American Dream” of home ownership. I have made so many great friends through this business and have been blessed to be successful at it along the way. There are always stresses and tough situations to get through, but if you take care of your clients and figure out solutions that are win-win for everyone involved, the outcome is extremely rewarding.
SPRING 2013 KENTUCKY REALTOR® 29
Up to Code
Back to Basics—The REALTOR® Code of Ethics At this time of year, the kids are back to school and adults are back to work after what was hopefully a restful and relaxing summer break, despite all the summer rain showers. This seems like the perfect time to get “Back to Basics” and review some of the most frequently asked questions by REALTORS® and consumers about filing an ethics complaint with the Kentucky Association of REALTORS®. KAR ensures the ethical behavior of its REALTOR® members through the professional standards process. A complaint can be filed against any REALTOR® member and may be filed by anyone who believes a REALTOR® has violated the national REALTOR® Code of Ethics. An average of 32 ethics complaints are received each year in Kentucky. “What happens when an ethics complaint is filed against a REALTOR®?” The complaint must site one or more articles of the 17 articles of the Code of Ethics, and include a statement as to why the party feels that the article has been violated. It is then reviewed by a Grievance Committee to determine if a possible violation of the Code may have occurred. NAR policies require that an ethics complaint be filed within one hundred eighty (180) days of the time that the alleged offense and facts relating to it could have been known by the complainant. If the Committee dismisses the complaint, the reason is stated on the Grievance Committee Report Form. The complainant has the right to appeal the dismissal. If the complaint merits further consideration, it is forwarded to the Professional Standards Committee for an ethics hearing. Since 2003, the number of ethics hearings held in Kentucky has averaged 12 hearings per year. The ultimate burden of proving that the Code of Ethics has been violated rests with the complainant. The hearing provides an opportunity for the complainant and the respondent to explain “his or her side of the story” by presenting testimony and witnesses. Either party may be represented by legal counsel or REALTOR® counsel. Once all of the facts have been presented, the parties are dismissed and the hearing panel determines whether or not a violation has taken place. “Clear, strong, and convincing” is the standard of proof by which violations of the Code of Ethics are determined. In Kentucky, the articles most frequently cited include Articles 1, 2, 3, 9, 11 and 12. If there is a violation found, discipline is imposed by the hearing panel. While parties may appeal the decision, appeals are limited to procedural deficiencies or other or failure of due process that may have prevented a full and fair hearing of the relevant facts. “What does an ethics violation look like?” Interpretations of the Code of Ethics have been developed by NAR’s Professional Standards Committee to help readers understand what does, and does not, constitute an ethics violation and the rationale for the peer judgment rendered in each case. There are 147 different
case interpretations which describe factual situations involving charges of alleged unethical conduct by REALTORS®. Case interpretations serve as a reference for Grievance Committees, ethics and arbitration hearing panels, and Appeals Panel members and are similar to judgments rendered in judicial proceedings. The discipline imposed is not identified in the case interpretation because the sanction must be appropriate given the specific circumstances. To view or print case interpretations, go to www.realtor.org, search for “case interpretations” and follow the links. “How do hearing panels determine the discipline for an ethics violation?” Hearing panelists consider many factors such as the level of experience of the respondent and any record of earlier violations (or, conversely, the fact that they have not violated the Code in the past.) Unintentional or inadvertent violations should result in penalties designed to educate respondents, while a flagrant disregard for the Code’s obligations would merit more severe discipline. The fact that a respondent recognized or acknowledged inappropriate or unethical conduct, or took steps to remediate or minimize harm or injury that may have resulted from the respondent’s conduct, should be considered in determining appropriate discipline. “What type of disciplines, or sanctions, can be handed down by the panels?” A wide range of sanctions are available from which hearing panels may choose: a letter of warning, a letter of reprimand, requirement that the member attend a specific course(s), a fine not to exceed $5,000, membership probation for a stated period of time not to exceed one year, membership suspension for not less than 30 days and no more than one year, expulsion from membership with no reinstatement privilege for a specified period of one to three years (may include denial of MLS participatory or access privileges), suspension or termination of MLS rights and privileges for no less than thirty days nor more than one year or termination of MLS services for a stated period of one (1) to three (3) years. More serious forms of discipline (including fines of up to $5,000, suspension from membership, or termination of membership) may be appropriate in cases of very serious violations or in cases of repeated violations. For more information, please contact Julie Johnson, Director of Professional Standards, at firstname.lastname@example.org or 800-264-2185.
For violations that take place after January 1, 2014, the maximum fees for violations of the Code have been increased to $15,000 from $5,000 which is the same maximum fine that MLSs may impose.
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A publication of Kentucky REALTORS