Insight | May 2020

Page 1

VOL 99 NO 2 | MAY 2020


Plus The Importance of Fair Housing Family Bonds in Real Estate Relationships with Appraisers

There’s no place like home. And no one like you.

Let our experienced lenders provide you with tailored guidance to help make the process simpler, easier and as a result – less stressful.

 Construction-to-Permanent Program  Fixed & Adjustable Rate Mortgages  Government Programs

Truist Bank, Member FDIC and Equal Housing Lender . Loans, lines of credit and credit cards are subject to approval.

 Jumbo & Wealth Programs  Low Down Payment &

First-time Homebuyer Programs

May 2020


features 12 Fair Housing: More Than a Law

Fair Housing goes to the core of what we stand for as REALTORS®

14 Women in Commercial Real Estate

Learn about the journey of a few NC REALTORS® women in field of commercial real estate


17 Family Matters

Strengthening family bonds through real estate

Women 14

in Commercial Real Estate

22 Your Role in Communication with Appraisers The do's, the don'ts and everything else you need to know about the appraisal process

26 Betting on Resilience

Mobilizing private investment to finance disaster resistance

32 Start with Why

How REALTORS® can gain authenticity through a focus on their purpose and value proposition






Reasons to update your web browser, Andrea Bushnell celebrates 10 years as CEO of NC REALTORS®



WHY 26


Have something to talk about? Sure you do—and we want to hear it! Send us your comments, ideas or success stories to and you could be featured in the next Insight. • INSIGHT  3

Insight, Volume 99, Issue 2 President Maren Brisson-Kuester

Treasurer Laurie Knudsen, GRI

President-Elect Kelly Marks, ABR, CRS, GRI

Immediate Past President Asa Fleming, SFR, AHWD

Regional Vice Presidents Region 1: Kim Endre, Kitty Hawk Region 2: Tony Harrington, Wilmington Region 3: Connie Corey, Greenville Region 4: Julia Tucker, Chapel Hill Region 5: Kathy Haines, Greensboro Region 6: Penny Boyles, King Region 7: Dennis Bailey, Shelby Region 8: John Ogburn, Charlotte Region 8: Jennifer Frontera, Indian Trail Region 9: Renee Cooney, Franklin Region 10: Teresa Pitt, Fuquay Varina Region 10: Mark Parker, Raleigh At Large Representative: Brooke Rudd-Gaglie, Oak Island Chief Executive Officer Andrea Bushnell, Esq., CIPS, RCE Vice President of Communications & Marketing Mckenzie Allen Graphic Design Coordinator Raquel Stubblefield Content Marketing Coordinator Aliyah Ross Contributors Nicole Arnold, Porter Graham, Lee Nelson, Mark Zimmerman Cover Photography Doug Klesch For advertising information, visit or contact Keri Epps-Rashad at (336) 217-1049. INSIGHT (ISSN 24714127) (USPS 17170) is published four times a year in February, May, August and November by NC REALTORS®, 4511 Weybridge Lane, Greensboro, NC 27407. Periodicals Postage Prices paid at Greensboro, N.C. and additional mailing offices. POSTMASTER: Send address changes to INSIGHT, 4511 Weybridge Lane, Greensboro, NC 27407-7877. This publication is designed to provide accurate and authoritative information regarding the subject matter covered. Articles which appear in Insight are an informational service to members and consumers. Their contents are the opinions of the authors alone and do not necessarily represent those of NC REALTORS®. Advertising of a product or service does not imply endorsement, unless specifically stated. To opt-out of paper copy mailings, email with a subject line of “Insight opt-out.”

4511 Weybridge Lane, Greensboro, NC 27407 Phone: (336) 294-1415

Our industry has faced many challenges already this year with the effects of COVID-19 on our businesses, but we will maintain resilience and continue to thrive. We will continue as REALTORS® to help build lives and communities. We will fight to serve our clients even stronger than before because it is in our DNA as REALTORS®, That’s Who We R. As your president, along with the NC REALTORS® leadership team and staff, we will support you throughout this year as we rebuild together. We work hard to stay connected to our members and keep you informed through Insight—our quarterly NC REALTORS® magazine. We strive to highlight industry trends, news and association updates with content that matters to you. In this issue, we have even featured some of you! Get ready to be inspired and empowered by women in our association who are making waves in the commercial real estate industry and family real estate teams that are creating a legacy and impacting their communities. Along with being educated on the issues that face our state’s coastal areas, you can read about how you can be an advocate for fair housing. You know what they say, April showers, bring May flowers. Despite the challenges we have faced over the past few months, let's continue to bloom in our businesses and unite at the same table with one vision, one community and one voice.

Maren Brisson-Kuester, 2020 President

Browser technology has improved vastly over the last five years, and it’s getting better all the time. What good is paying for high-speed Internet if the browser you are using is not loading each Web page as fast as the newest version? And if an older browser is freezing or crashing, how much time are you wasting rebooting your system just to surf the web? Updating a browser can be the solution for a faster online experience.

4 Reasons You Need to Update Your Web Browser Today How old is your browser? If you are using Firefox or Chrome on your Desktop or Laptop PC, are you sure you have the latest version? Tech Helpline found that one-inthree callers were using a version of Firefox that was at least seven years old! Why should you need to be concerned about searching the Web using an outdated version of any of the popular browsers? Let’s look at 4 reasons that should motivate you to make certain your Web browser is updated today: 1. Safety risk Old browsers use outdated encryption—and that’s what protects you and your computer from harm. By not having the most updated version of a web browser, you are exponentially increasing the risk of being exposed to viruses, adware, malware and even ransomware by simply ending up on the wrong website. Older browsers also are prone to have glitches­—also called “bugs.” Software bugs in your browser can cause your web browser and even your computer to freeze or crash. You can fix these bugs quickly with a simple browser update. 2. Faster loading webpages You may not realize it, but an older browser will slow you down. If you find yourself frequently waiting for a webpage to load, your browser may be a candidate for an update.

3. Everything works Web pages are becoming more sophisticated and that means different types of media files are being embedded inside these pages. Videos, PDFs and new types of graphic images often are only fully compatible with an updated browser. If you are seeing blank spaces where an image or video should be, it’s likely your older browser is causing the problem. By using the newest browser version, you are more likely to have an online experience where everything works. Older browsers are not compatible with a lot of new technology. The result is a very frustrating online experience because you are missing out and not getting all the information available. An update can fix the compatibility problem. 4. Never-ending updates The best thing about a new browser is it is supported, meaning when a new virus or bug is discovered, an update is issued. If your browser is out of date, that’s not the case. In fact, many browsers no longer are supported. For example, if you are still using Windows XP or Vista, and you are using Internet Explorer versions 8-11, or Firefox, none of these older browsers are supported. And when you update to the newest version of your favorite browser, remember to choose Automatic Updates to make certain that your browser will protect you from new nefarious online threats and fix any software bugs quickly. Contact the Tech Helpline for Help If you have been putting off updating your browser because you fear you will lose all your bookmarks or you are just used to what you have, you are not alone. The good news is the technology for browsers are so advanced that things like bookmarks are automatically imported to the newest version. But fear not: Tech Helpline and its seasoned analysts are experts at walking you through the process and getting you comfortable with your decision to upgrade. Contact the Tech Helpline for help by calling 877-573-5612, emailing or starting an online chat at Help is always just a call or click away, so feel free to reach out and upgrade your web browser today! SM • INSIGHT  5

6  INSIGHT • May 2020

Celebrating 10 Years This year marks a milestone worth mentioning: Andrea Bushnell has served as the NC REALTORS® president and Chief Executive Officer (CEO) for a decade and has led the company through some of its most transformative years. To recognize Bushnell’s 10-year work anniversary, we’re highlighting some of the most noteworthy moments of her time in leadership:


Disaster Relief

Senate Bill 86 was a big win for NC REALTORS® in August 2019. Under this legislation, affordable group health insurance options can be offered by Association Health Plans. This win is thus far the most important piece of legislation to pass for NC REALTORS® members and all small businesses in North Carolina.

Multiple natural disasters have impacted areas throughout our state over the last decade. Through our housing opportunity foundation, the NC REALTORS® Housing Foundation, the association has awarded relief assistance to individuals and families in need. In 2018, over $800,000 was allocated for disaster relief in response to the devastating impacts of Hurricane Florence on North Carolina.

Global Impact In 2018, the association launched the NC REALTORS® Global Network. This group allows NC REALTORS® to have an impact not just in our state, but across the world. Bushnell and other association leaders attend MIPIM—the world’s leading real estate event in Cannes, France—to bring business back to North Carolina.

Awards & Accolades

Cultural Transformation

With Bushnell as CEO for the past 10 years, there has been transition and transformation in the association. As we leap into the next decade, these changes should be recognized and celebrated by all who have been involved—the NC REALTORS® leaders, employees and growing membership. As a result of hard work, NC REALTORS® is a recognized leader in the real estate industry. Although there is more work ahead on our transformation journey, NC REALTORS® will continue to positively change the real estate industry in our state with the guidance of Bushnell, a leader with a clarity of vision and an eye on continued innovation.

In October 2019, NC REALTORS® held its first diversity conference, MOSAIC: Discussions on Diversity, in Charlotte. Hundreds of NC REALTORS® came together to have a candid conversation on diversity—what it means, why it’s vital to the state economy and how it applies to the way REALTORS® do business. NC REALTORS® is committed to diversity in all facets of the association. Piece by piece, we’re working together to create a beautiful and more complete picture of what diversity and inclusion can do for the real estate industry, our communities in North Carolina and across the globe.

Over the past decade, Bushnell has been recognized for her vision and leadership, including being named Chair of the Association Executives Committee Recommendations and Recognition Advisory Board.

About Andrea Bushnell Andrea Bushnell is the Chief Executive Officer of NC REALTORS®. She has more than 20 years of experience as an association executive and as general counsel for state REALTOR® associations. Bushnell is a Montana native who earned a bachelor’s degree in English from Montana State University and graduated with honors from Lewis and Clark College School of Law in Portland, Oregon. Before launching her law career, Bushnell spent 6 years as a full-time REALTOR® in San Diego. It was the love and respect for what REALTORS® do that was a deciding factor in her re-entry into the REALTOR® world in 1995. Since 1995, Bushnell has served on numerous committees, PAGs and work groups at the National Association of REALTORS®. Bushnell travels the country assisting associations with leadership development, team building, challenging the status quo and in creating and implementing association strategic plans—all with the blessing of the wonderful leadership of NC REALTORS®. • INSIGHT  7

FINALLY say yes to success. Positive culture. Better career. You deserve a supportive and collaborative office culture. From weekly communication, with up-to-date information, to business planning activities, annual awards and plenty of recognition for your achievements, you’ll be plugged into a team that will help your career thrive. Plus up your game with weekly webinars, in-person workshops, and Weichert University e-learning courses to help you stand out from the competition.

Get the support you need from your brokerage. And the career you deserve. Give your local Weichert office a call today or visit

Each Weichert ® franchised office is independently owned and operated. ©2020 Weichert Real Estate Affiliates, Inc. Weichert is a federally registered trademark owned by Weichert Co. All other trademarks are the property of their respective owners.

legal QUIZ Putting Your Legal Knowledge to the Test Take our latest quiz on our most popular, weekly Q&As. BY WILL MARTIN, GENERAL COUNSEL


Paragraph 8(d) of Standard Form 2-T states: “Seller shall remove, by the date possession is made available to Buyer, all personal property which is not a part of the purchase and all garbage and debris from the Property.” If a seller fails to comply with the obligation to remove all non-sold personal property, any personal property that is left behind automatically becomes the property of the buyer. True or False?


If someone inherits property, it’s necessary for them to get a deed for the property before it can be listed. True or False?


It is legal for a firm to pay a cooperating commission to a sole proprietor who doesn’t have a firm license and who is not a BIC. True or False?


An out-of-state power of attorney cannot be used to sell real estate in North Carolina. True or False?


The correct way to make a contract contingent on the buyer obtaining a loan is to strike through the “NOTE” at the end of paragraph 5(a) of the Offer to Purchase and Contract where it says that the buyer’s obligations under the Contract are not conditioned upon obtaining or closing any loan. True or False?


Under the NC REALTORS® Referral Agreement (Form 730), if the receiving firm represents the referred prospect in a transaction where the firm is acting as a dual agent, the referral fee is based on the total commission paid to the receiving firm. True or False?





There is at long last a form in the NC REALTORS® forms library that is designed to list a residential property for rent where no management services will be provided after the property is leased. True or False? A modular home becomes part of the property at the time it is installed, but a manufactured home becomes part of the property only when a “declaration of intent to affix the manufactured home” or an “Affidavit for Removal” has been filed with the Register of Deeds. True or False?

If buyers terminate a contract before the end of the Due Diligence Period because they have been unable to reach an agreement on repairs with the seller, that contract can be reinstated if the parties are later able to reach an agreement regarding repairs. True or False? A REALTOR® can make an offer in the name of his or her real estate company on a client’s behalf to protect the client’s identity. True or False?

HOW DID YOU DO? Turn the page to discover the answers. • INSIGHT  9

who is not a BIC? January 22, 2020, Category: Real Estate License Law/Rules)


True. Standard Form 405-T (“Exclusive Right to Advertise Agreement”) was released in July 2019 for just this purpose. (What form should I use to list a property for rent? January 9, 2020, Category: Forms/Miscellaneous)


True. (Selling property that includes a manufactured home. October 3, 2019, Category: Forms/Addenda to Offer to Purchase and Contract)


If you’re not doing so already, be sure to read the Q&As that appear in the REALTOR® Rundown every Monday. It’ll help you on the next quiz!

Answers: 1.

False. The buyer has no automatic right to ownership. While the seller’s failure to remove personal property is clearly a breach of contract, that breach does not automatically transfer ownership of any personal property left behind, and does not guarantee that buyer will ever become the owner of that property. The answer likely depends on whether the evidence tends to show that the property was intentionally abandoned by the seller or was mistakenly left behind. (Who owns personal property that seller fails to remove? December 5, 2019, Category: Miscellaneous/Other Laws and Rules)

False. N.C. law provides that a power of attorney executed in a state other than North Carolina is valid in North Carolina, provided that when it was signed, its execution complied with the law of the other state. However, practically speaking, it may be simpler and more cost effective for an N.C. attorney to prepare a North Carolina POA for the out-of-state owner to sign that is specific to the transaction rather than relying on the out-of-state POA to sell the property (Can an out-of-state power of attorney be used to sell real estate in North Carolina? October 17, 2019, Category: Miscellaneous/Other Laws and Rules)


False. Crossing out the “Note” at the end of paragraph 5(a) does not create a contingency that would allow the buyer to terminate a contract after the end of the Due Diligence Period if the buyer is unable to get a loan. (Can a strikethrough in Form 2-T make the contract contingent on the buyer’s obtaining a loan? October 10, 2019, Category: Forms/Offer to Purchase and Contract/Miscellaneous)


False, unless the Referral Agreement indicates that the two firms have agreed on a referral fee other than that described in the two pre-printed check boxes. (Is a referral fee based on the total commission if the receiving firm is a dual agent? November 27, 2019, Category: Forms/Miscellaneous)





False. The title to property passing from a deceased person to a “devisee” (a person named in a will) or an “heir” (a person who inherits by law where there is no will) vests in her or him by operation of law at the moment of the decedent’s death, so there is no need or purpose for a deed. (Can I list property if the owner doesn’t have a deed? January 16, 2020, Category: Miscellaneous/Other Laws and Rules) True. A broker can operate as a sole proprietor without having to obtain a firm license and, under certain circumstances, it is perfectly legal for a broker to operate as a sole proprietor without designating himself or herself as a BIC. (Can I pay a cooperating commission to a sole proprietor

10  INSIGHT • May 2020

True, but only through a writing, signed and dated by all parties, clearly confirming their agreement to reinstate the terminated contract. There are several ways to get such a writing in place. Regardless of which method is used, agents should be careful not to be involved in the drafting process. (Can parties reinstate a terminated contract? November 14, 2019, Category: Contract Law) True, but ethical and legal issues may make it practically difficult to do so. (How can I keep the identity of my client a secret? December 19, 2019, Category: Code of Ethics)

Get to Know Your 2020 NC REALTORS® PAC Trustees The mission of the NC REALTORS® Political Action Committee (NC REALTORS® PAC) is to raise and disburse funds to promote homeownership, protect private property rights and increase political awareness for the real estate industry. The NC REALTORS® PAC Trustees are dedicated volunteers from the association membership that recognize the importance of NC REALTORS® PAC and are fully invested in its mission. Collectively, trustees make funding decisions based on recommendations/input from local associations, voting records for incumbents and a candidate’s support and/or knowledge of issues of concern

Bruce Gates

to the real estate profession. Meet your 2020 NC REALTORS® PAC Trustees:

Neal Johnson Treasurer

Wendy Harris

Region 3 Trustee

Bill Aceto

Region 6 Trustee

Randall Blankenship Past Chair

Connie Corey

Michael Davenport Region 1 Trustee

Trevor Foote

Region 3 Trustee

Region 4 Trustee

Paul McGill

Bonzie Everson

Region 6 Trustee

Region 7 Trustee


Rosemarie Doshier Region 1 Trustee

Kim Dawson

Region 4 Trustee

Bob Bates

Dennis Bailey

Region 2 Trustee

Marcus Larose

Sandra O'Connor

Jason Gentry

Region 8 Trustee

NOT PICTURED: Maren Brisson-Kuester NC REALTORS® President Kelly Marks NC REALTORS® President Elect

Scott Barfield

Region 9 Trustee

Kirk Booth

Region 9 Trustee

Mark Parker

Leigh Brown NC REALTORS® Legislative Chair Darlene Spivey AE Advisor Tim McBrayer Region 10 Trustee

Region 10 Trustee

HOW CAN YOU GET INVOLVED? The NC REALTORS® PAC Trustee Credentials Committee is taking applications for candidates for Regions 1, 2, 5, 6, 7 and 8 for three-year terms. Elections will be held at the NC REALTORS® Board of Directors meeting in September. The deadline for applications is July 31. For more information and an application, please email Kristin Nash at

Jim Goodman

Region 2 Trustee

Region 5 Trustee

Region 7 Trustee

Lisa York

Vice Chair

Region 5 Trustee

Tony Smith

Region 8 Trustee

Contributions to RPAC are not deductible for federal or state income tax purposes. Contributions are voluntary and are used for political purposes. Suggested amounts are merely guidelines and you may contribute more or less than the suggested amounts. The National Association of REALTORS® and its state and local associations will not favor or disadvantage any member because of the amount contributed or a decision not to contribute. You may refuse to contribute without reprisal. Your contribution is split between National RPAC and the State PAC in your state. NC RPAC supports the efforts of National RPAC and contributes a portion of its contributions to National RPAC. Contact your State Association or PAC for information about the percentages of your contribution provided to National RPAC and to the State PAC. The National RPAC portion is used to support federal candidates and is charged against your limits under 52 U.S.C. 30116. In-kind contributions/donations are not included for the purposes of the National RPAC State PAC split. NC law requires political committees to report the name, mailing address, job title or profession and name of employer or employee's specific field for each individual whose contributions aggregate is in excess of $50 in an election cycle. Contributions can only be accepted from individuals in the form of personal checks or credit cards. Contributions from corporations or business entities cannot be accepted. This solicitation was paid for by NC RPAC.

12  INSIGHT • May 2020


MORE THAN A LAW BY MARK ZIMMERMAN SENIOR VICE PRESIDENT OF EXTERNAL AFFAIRS What if you woke up one day to see your name on the front page of your newspaper? Then, later that day a television reporter calls to talk to you. A few weeks later, the state senate requests that you testify at a hearing. Next, you learn that your license may be at risk. Then, your broker advises that you should probably contact an attorney because you may be liable for tens of thousands of dollars in fines and could spend some time in jail. All of this happened because you never thought twice when working with a nice couple who didn’t want to see homes in certain neighborhoods and you agreed not to show them. Sound far-fetched? Well, last fall, all of this happened to a couple dozen REALTORS® in Long Island who were targeted with a Fair Housing investigation by the media. And before you say, “Well, they must have been bad agents,” they were actually some of the most prominent agents in the market—leaders in their firms and the association. Many of them were real estate instructors. At the time, none

necessarily thought they were doing anything wrong. When was the last time you thought about Fair Housing? It was probably covered during your licensing class or maybe touched on in a continuing education course over the years. Article 10 of our Code of Ethics addresses it. Can you remember the specifics of what our Fair Housing laws require us to do or, conversely, what they say we cannot do? Is Fair Housing something you keep top of mind as you enter into every transaction? All those REALTORS® in Long Island wish they had been more conscious of Fair Housing. Here’s a reminder. The Fair Housing Act prohibits housing discrimination against seven classes. Can you name them all? (Don’t peak. The answer is at the end of the article.) Housing discrimination covers everything: the sale, the lease or rental of housing or making housing otherwise unavailable. The law covers everyone: sellers, landlords, lenders and REALTORS®. All buyers and renters looking for a home or apartment must be offered to see every property that fits their budget. They must also be shown the same service anyone else gets. Following the request of a client doesn’t get you off the hook. Everyone is held up to the same high standard. Fair Housing isn’t just a law, of course. It goes to the core of what we stand for as REALTORS®. Everyone who can and wants to buy a home should be able to. More to the point,

they should be free to buy the home of their choice. Period. The National Association of REALTORS® (NAR) is taking the Long Island story as a wakeup call. They have issued the ACT plan—standing for Accountability, Culture Change and Training—which will transform NAR’s marketing and education to both our members and the public. NC REALTORS® is joining that effort. You’ll be hearing a lot about this in the upcoming months. Please pay attention and brush up on your knowledge of Fair Housing and how it impacts the way you do business. After all, sometimes even REALTORS® who are good people can unintentionally act in a way that violates Fair Housing. There were a handful of agents and firms that passed the Long Island testing with flying colors. They didn’t waver when it came to the Fair Housing principles. They didn’t acquiesce in the face of customer and client requests. Be those agents. It’s the law, it’s the right thing to do, and it will let you sleep soundly knowing you won’t find yourself and your career in jeopardy. Mark Zimmerman is Senior Vice President of External Affairs and was recently named to the new NAR Fair Housing Policy Committee. Answer: The Fair Housing Act prohibits housing discrimination against seven classes: race, color, religion, sex, handicap, familial status or national origin. • INSIGHT  13

Women In Commercial Real Estate



More than 63 percent of real estate agents are women; however, the number of women in the commercial real estate industry is exceedingly lower (less than 40 percent). Insight magazine caught up with a few NC REALTORS® to learn about their journey in commercial real estate—what got them started, where they found challenges as a woman in the field, where they received support and what motivates them now. Cindy Chandler – The Shero Cindy Chandler spent her early years in real estate brokering in Florida and South Carolina. She is now a commercial real estate superwoman in Charlotte, where she is CEO of her brokerage, The Chandler Group. Her story in the commercial real estate industry began over 30 years ago. Chandler spent part of her career with a company that did apartment development and was looking to expand and add a commercial division. She had been working as a property manager at the time, but knew with some training she could launch into the commercial sector. The rest is history. She has now worked for numerous organizations in the areas of investment real estate, strategic planning, management and marketing. Her career was not short of challenges. Chandler recalls missing out on many social and networking activities due to being the only woman among the guys and not wanting to “ruin it for everyone.” As a woman in commercial, it was not easy being a part of the social scene. However, despite many challenges, Chandler did have men that were advocates for her. “I had men behind me who made sure I had a seat at the table and made a point to make sure everyone knew that I was their representative and person, not their gal,” she says. This support was crucial to her moving up throughout her career and helped her open many closed doors. Chandler now serves as an inspiration to many in the field, offering her wisdom to the up-andcoming generation of women in the commercial industry.

Kelley Ireland – Jill of All Trades Kelley Ireland of Morrisville does it all. She is not only killing it in commercial real estate, but she also does business in residential real estate and property management. Ireland began her career as an investor doing residential and commercial planning. After 14 years as an investor, she decided to get her broker’s license in 2006 so she could share her knowledge of planning, buying and building properties with others. Early on in her commercial career, Ireland experienced resistance from men thinking women didn’t have a place in the industry, but that only motivated her even more to succeed. While there were naysayers, Ireland notes that she also had many supportive cheerleaders to help her get past those barriers. This has impacted her to inspire other women who are looking to find their place in the commercial real estate industry. 14  INSIGHT • May 2020

Debbie Gallimore – The Go-Getter Debbie Gallimore of Raleigh started her career as an investor, leasing properties in Georgia and North Carolina. Then, the 2008 recession hit, causing her to sell most of her investment properties. It was time for a change. Encouraged by a colleague, Gallimore then pursued her real estate license. She spent some of her time doing residential real estate, but the world of commercial real estate intrigued her. She began attending different commercial real estate networking events to find out what was going on and how she could get involved. This led her to pursue training at the CCIM Institute. Gallimore faced many challenges and discouragement throughout her career. She recalls being told, “you will never be able to get into that field; it’s the good ol’ boys club.” Thankfully, this only served as fuel to her desire to transition into the commercial sector. After years of research, training and mentorship, in 2018, Gallimore began her own commercial real estate firm, Gallimore Associates, which is based in Raleigh. While her firm is still in its early stages, she expects to establish her footprint in the commercial real estate industry.

Kelly Stuart – The Fireball Kelly Stuart, a Raleigh native, now practices real estate in Sunset Beach. She started her career in economic development and has worked in many different organizations in North Carolina, South Carolina, Ohio and Virginia. However, having to relocate as she advanced in her career became tiring. She longed for something different, which spiraled her transition into commercial real estate. Stuart started her commercial real estate career doing administrative work for her dad’s commercial firm that he operated out of the second floor of his home. While she was a rookie to the commercial industry at the time, all her skills acquired during her economic development tenure came in great use when getting things done in her new role. Stuart was then hired by one of her father’s clients and continued to excel from there. She has more than 20 years of experience specializing in the marketing and promotion of commercial, industrial and residential real estate.

Cindy Christopher – The Hometown Girl Cindy Christopher has been making waves in the commercial real estate industry for over 30 years. She is the owner of Christopher Commercial, a small boutique commercial real estate firm in downtown Winston-Salem. Christopher got her start in commercial real estate in the mid-1980s when her brother-in-law—who was a practicing broker in the commercial sector—told her she would be good at it. Christopher took him up on it and began working for a commercial firm in Greensboro. After many years in Greensboro, she then transitioned to a company in Winston-Salem, where she worked 20 years before opening her own firm in 2018. Christopher recalls there not being many women at all when she began her commercial real estate career in the 1980s, but she is excited to see more women entering the field today.

What’s Ahead for Women in Commercial Real Estate? These women have broken barriers and made a successful career for themselves in the commercial real estate industry. This is only the beginning! For extended interviews from these women and more, visit • INSIGHT  15

Enjoy the great outdoors.

Dianne Kingsland REALTOR®

Your success is our focus. Our team of dedicated Quicken Loans Agent Relationship Managers provides updates every step of the way on your clients’ mortgages, giving you more time to do what you love.

Quicken Loans, LLC; NMLS #3030; Equal Housing Lender. Licensed in 50 states. AL License No. MC 20979, Control No. 100152352. AR, TX: 1050 Woodward Ave., Detroit, MI 48226-1906, (888) 474-0404; AZ: 1 N. Central Ave., Ste. 2000, Phoenix, AZ 85004, Mortgage Banker License #BK-0902939; CA: Licensed by Dept. of Business Oversight, under the CA Residential Mortgage Lending Act and Finance Lenders Law; CO: Regulated by the Division of Real Estate; GA: Residential Mortgage Licensee #11704; IL: Residential Mortgage Licensee #4127 – Dept. of Financial and Professional Regulation; KS: Licensed Mortgage Company MC.0025309; MA: Mortgage Lender License #ML 3030; ME: Supervised Lender License; MN: Not an offer for a rate lock agreement; MS: Licensed by the MS Dept. of Banking and Consumer Finance; NH: Licensed by the NH Banking Dept., #6743MB; NV: License #626; NJ: New Jersey – Quicken Loans, LLC, 1050 Woodward Ave., Detroit, MI 48226, (888) 474-0404, Licensed by the N.J. Department of Banking and Insurance.; NY: Licensed Mortgage Banker – NYS Banking Dept.; OH: MB 850076; OR: License #ML-1387; PA: Licensed by the Dept. of Banking – License #21430; RI: Licensed Lender; WA: Consumer Loan Company License CL-3030. Conditions may apply. Quicken Loans, 1050 Woodward Ave., Detroit, MI 48226-1906 ©2000 – 2020 Quicken Loans, LLC. All rights reserved. Lending services provided by Quicken Loans, LLC, a subsidiary of Rock Holdings Inc. “Quicken Loans” is a registered service mark of Intuit Inc., used under license.

Family Matters Strengthening Family Bonds Through Real Estate BY LEE NELSON As a parent, you want your children to find a career that becomes their passion. For some REALTORS® in North Carolina, their sons and daughters followed in their footsteps. They saw their moms and dads having fun, helping people and making a good life. In honor of Mother’s Day in May and Father’s Day in June, we highlight three REALTOR® families who share their stories—what the challenges and pluses are while working with relatives in the real estate world and what they have learned from one another. Take a look at what they have to say. • INSIGHT  17

Tom Bost, father, & Lindsay Riggs, daughter B & R Realty, Salisbury, N.C. Lindsay Riggs feels she has learned more from her dad over the past two years in the business than many agents ever learn. “He has taught me about every process of a real estate transaction. He has even had me crawl into multiple crawl spaces to fully understand the results of a home inspection,” Riggs says. She spent nine years as a first-grade teacher, then stayed at home raising her two sons, before diving into real estate. “I started my career because my dad said ‘go for it,’” she adds. “He thought I would love real estate, just like he does, and he was right. I will have to say, I never saw myself heading in this direction, but I feel like this profession is exactly where I’m supposed to be.” Bost, who co-owns the agency, gets emotional when he thinks about his daughter’s decision to join the firm. “It turns out she was a perfect fit for B & R Realty. Being the youngest member of the firm, she has brought new energy and new ideas to the table,” he states. “The fears were that she would not like the business or working with me.” They have always clicked in their personal lives, but they have a real bond when it comes to real estate. “I never realized that she would be a natural business leader and so talented in working with others,” he says. The best advice he gave her was that if she didn’t like the real estate business, it would not hurt his feelings. “I did not want her to work with me just to please me if she did not like it. She loves it. I also told her there is life besides real estate. This career can be all-consuming if you let it,” Bost shares.

18  INSIGHT • May 2020

Riggs admits she has sometimes missed events with her family on the weekends, but they understand. “I also have the flexibility to rearrange my schedule if my family needs me,” she says. “Spending time with my dad is a big plus. Now, I see him every week and talk with him on the phone every day.” At family get-togethers and celebrations, she admits the two of them talk a little too much about real estate.

“But our family loves to see us interacting in a way we never have before and working as a team in real estate,” Riggs explains. Bost wishes for peace of mind for his daughter. “Real estate can be very stressful, and it’s not an easy job. She seems to have the fortitude it takes to be successful, and of course, take over the business one day.” But for now, her dad is doing quite well and recently was named REALTOR® of the Year for the Salisbury Rowan REALTOR® Association. He says his daughter brings excellent photography and staging skills to the table. “She blows me away when it comes to technology, and she does all of our social media advertising,” he says. “What she does most for me personally is keeping me excited to work every day in the real estate business with her.”

Janet & Butch Tuck with daughters, Janelle Lenhart & Melissa Murphy The Tuck Team at Cottingham Chalk, Charlotte, N.C. It’s all in the family for Janet Tuck and her husband, Butch. Not only do their two daughters work with them on the Tuck Team at Cottingham Chalk in Charlotte, but one daughter and her family live behind them, and the other one and her family live across the street. “We have so much in common that working together has been easy,” says Janet. “We go together for our weekly tours, REALTOR® luncheons and events, and even share an office.” Clifford “Butch” Tuck, Jr. began the family real estate path when he received his real estate license in Georgia in 1966 as a junior in college. In 1972, he got licensed in North Carolina. He believes the biggest pluses to all four of them working together remains the flexibility of time and ease of communicating on business topics. But, as the token male in the group, “being able to choose my communication opportunities wisely is important,” he says. Watching his daughters through the years, he has seen their skills exceed his when it comes to patience with clients, persistence and organization in transactions. Melissa Murphy began as an agent in 2005 but worked in her mother’s real estate office during high school. “A lot has changed technology-wise. I remember handwriting appointments on cards and flipping through huge MLS books to see new listings,” she says. The 24-7 life of a REALTOR® can be challenging for a young mother, but with her parents and sister living so close, she has “so many babysitters” when she needs to leave to be with clients. Janelle Lenhart is the latest to join the team in 2014. Her

background in interior design brings a special and unique perspective to the team. “Over the decades, my parents have witnessed Charlotte and the surrounding areas develop and grow, and they know the history behind many of the neighborhoods,” she says. Janet says that the family works together sometimes and works separately in other situations. “We work with clients downsizing and upsizing and moving to Charlotte. My husband is the broker-in-charge in our company, so he is here to keep us straight,” she says. “Janelle, Melissa and I are the ones working with clients buying or selling their homes.”

“Having a team for our clients is an added bonus. They receive more personalized attention and greater access to knowledge,” Murphy adds. The family did talk about the ups and downs when their daughters were thinking about getting their licenses. The parents stressed the importance of being professional, knowledgeable, a good listener, having empathy, being organized, building relationships, being a problem solver, and following The Golden Rule. • INSIGHT  19

Annette Holt, team leader, & Davis Holt, broker Keller Williams, Apex, N.C. After her son graduated from college, Annette Holt asked him to come work with her. “My business was growing, and I needed a partner I could trust to treat my clients the way I would treat them and take care of them,” she says. “I knew I could trust Davis, and I knew people would like and trust him.” She did worry about him since real estate is commissionedbased. But he grew so successful and involved in the real estate industry that he was named in the REALTOR® Magazine’s 30 Under 30 Class of 2019. “People often think she is my wife—which is great for her,” Davis says. “Other than that, we do not have many challenges. I have worked hard to become involved in the industry, to make a name for myself and not just ride the coattails of my mom.” They do an even balance of working together and separately. They share everything about transactions but work independently. “We are also able to build trust very quickly with people when they first meet us because we work well with one another,” he adds. Annette did advise Davis to be a problem-solver for his clients. “Davis is rock solid in his ability to do exactly that­—to assist a client in solving their real estate needs,” she says. She admits that he is much better at technology, finding new opportunities and time management.

“He is so caring with his clients, and they absolutely love him. For me, it has been a wonderful experience having Davis work with me. We laugh a lot, and we strategize together and share ideas. As a mother and son team, we have benefited, and the business has benefited from a mutual respect for one another.” When the family gathers, real estate can dictate conversations. Davis’ father worked in banking and his father-in-law is in commercial real estate. “It is truly a family business, so we often talk about it at these gatherings,” he says. “However, our family is also good about saying, ‘move on,’ and we can talk about something else. My wife and I just welcomed two sons to our family, so lately, they have been the topic of conservations.”

THE AUTHOR: Lee Nelson is a freelance journalist from the Chicago area. She has written for Yahoo! Homes,, and REALTOR® Magazine. She also writes a bi-monthly blog on 20  INSIGHT • May 2020


from Kentucky, North Carolina, South Carolina and Tennessee.

NEW TOOLS Meet with hundreds of your

favorite vendors and discover new and exciting services.

INDUSTRY EXPERTS Learn about the latest and greatest in real estate from the nation’s top speakers.

SOCIAL EVENTS Experience the Savannah, GA

scene and network with your peers at exciting social events.



22  INSIGHT • May 2020


Forget the rumors that you have to keep silent. But that doesn’t mean your communications still can’t get you in trouble. Here’s everything you need to know about the appraisal process. Dave Massey loves nothing more than to walk into a property to do an appraisal, and the REALTOR® hands him an “appraiser packet,” complete with upgrades, updates and renovations, any pertinent neighborhood data and any factors that may impact the value of the house. It’s even better if they have already sent the information before he even gets there. “All of this is welcome information,” says Massey, owner of Massey Real Estate and Appraisals in Burlington. So, why isn’t this the norm? Unfortunately, there are a lot of misconceptions and myths surrounding the preferred relationship between appraisers and REALTORS®. Some brokers don’t interact with appraisers because they feel it is against the rules. “The main rule is ‘please do not attempt to influence or pressure the appraiser to hit a certain value,’” he says. Massey is the chairperson for the NC REALTORS® Appraisal Section, a specialized division helping to advance professional appraisal careers. His advice to brokers is to take an appraisal continuing education class to learn more about the process. Classes on developing an appraisal, adjusting sales and the sales comparison approach will create not only a more knowledgeable broker, but one that can better price their listings and understand how to communicate with the appraiser during the process. • INSIGHT  23

Understanding the Appraiser’s Process “Few realize the amount of work that goes into the process before I even leave the office to do my fieldwork,” says Massey. The first step in the process is entering data. Massey’s daughter, who is his assistant, takes the appraisal order and enters it into the appraisal software on their computer network. She then gathers the tax data, GIS data, along with deed and plat information. Then, it’s off to the property to look at its overall condition, quality, materials used and special features. Massey gathers information for his sketch or floor plan of the house and takes numerous photos. The information given to him by an agent can assist him in this part of the process. The fact that the homeowners replaced the water heater two months ago, painted the entire outside of the house last summer or put in new landscaping recently, all matter during the appraisal process. What doesn’t help is last-minute requests. Because of the desire to promote more efficient mortgage and real estate systems, many times lenders are not ordering appraisals until the last minute after the loan has closed. “They are trying to save the consumer money,” says Vic Knight, president of Chapel Hill Appraisals & Consultants. “I truly buy into that, and it’s a fair way to do things. However, the outcome is that I’m getting a very significant amount of appraisal requests for what we call emergency inspections.” For instance, he got an appraisal assignment that needed to be done very quickly. He called the agent, and the agent didn’t answer the phone, but sent a text that the door was open. “I get to the house after driving 20 miles, go up to the front door, and there is no lockbox, and no way to get into the house,” he says. “Luckily, I found someone who knew a way to get in with a hidden key. That’s not always the case.” Knight has had to make second trips to other properties just to get in the house for an appraisal. All of it can delay an appraisal and, ultimately, a closing. Knight began appraising in 1979 and also served as former chair of the National Association of REALTORS® (NAR) Appraisal Committee. As someone who has been in the business for a while, he continually observes how newer brokers sometimes undervalue the appraisal process. There is a need for more communication between the two professionals. “Their brokers-in-charge tell them not to go to all that trouble [putting together an appraiser’s package]. But, when the appraisal comes in low, brokers on all sides get upset,” Knight adds. “They don’t understand the value of having a constructive conversation with an appraiser early in the process.” What REALTORS® Can Do to Help So, how can REALTORS® better communicate and assist the appraiser through their process? Here is a list of tips from Knight: • Don’t put restrictions on when the appraiser can make an appointment to inspect the property. • When the appraiser calls, respond with as much 24  INSIGHT • May 2020

NC REALTORS® Appraisal Section The Appraisal Section of NC REALTORS® was founded in 1996 as a state affiliate of the NAR Appraisal Section. This professional organization draws members from more than 1,600 North Carolina REALTORS® who are also licensed appraisers. Membership will assist you in advancing your professional appraisal career and help you distinguish yourself in your community and across the state as a knowledgeable, professional appraiser. For more information and to join, please contact Denise Daly at

• •

information as needed. Return the call quickly, even if the listing has closed. Do the proper due diligence on your listing, which gives you a good reputation among your peers and local appraisers. Provide an appraiser’s package in advance, have it available at the property during the inspection by the appraiser or meet them at the property to answer questions and inform them of unique features. Talk to your seller or buyer about the role of the appraiser. They are not there to confirm the sales price but to give the lender an independent opinion of the property’s value. You and your clients can be present during the appraisal, but make sure you allow the appraiser space and time to do the inspection.

Objective Appraisals Don Rodgers, executive director of the North Carolina Appraisal Board, says they often hear an agent or broker comment that an appraiser is setting the market. “It is the appraiser’s job to interpret the market,” he says. “Appraisers do not set value. They attempt to understand and anticipate the actions of a typical buyer.” The aim of the appraisal is not to validate the contract price but rather to estimate value under the intended use of the appraisal and applicable assignment conditions. REALTORS® should explain to their clients that the appraisal performed is an opinion. An analysis supported by data and research, but an opinion, nonetheless, he adds. “Appraisers, however, are required to remain impartial and objective irrespective of the purpose of their client,”

Rodgers adds. “The impartiality that appraisers bring is key to those that rely upon the appraisal for a financial decision. Attempting to influence the appraiser could jeopardize the process and promote financial choices that may be reckless or possibly dangerous. Trying to influence an appraiser by intimidation or open threat is inappropriate and unethical.” Appraisal Threshold Amended Since the mortgage crash in the late 2000s, the appraisal process got complicated. Many regulatory changes happened. The Dodd-Frank Wall Street Reform and Consumer Protection Act became law in 2010. “It did not restrict the ability for a regular brokerage world to have a conversation with appraisers. But, you had to have that conversation early,” Knight says. “Once I finish my appraisal report and send it, the window of opportunity has closed.” Just last fall, for the first time in 25 years, federal regulators raised the limit on most home sales requiring an appraisal from $250,000 to $400,000. According to the press release, the change came about “to provide burden relief without posing a threat to the safety and soundness of financial institutions.” Agents should know that this new limit does not apply to homes backed by government loans such as FHA, VA, Fannie Mae, Freddie Mac and more. Massey comments that his appraisal business has not seen a drop in appraisal orders since the number changed to $400,000. He still remembers a quarter of a century ago when the threshold increased to $250,000. He’s hearing the same questions now as in then: Will this spell the end of appraisals? Will real estate appraisers still be relevant,

and will the business still be viable? “Fortunately, for the appraiser industry and the public, these fears never become reality,” he adds. “Investors in mortgage products still want appraisals. The public still wants an unbiased third party to produce credible appraisal reports.” Legally Speaking "Appraisals seem to be among the most misunderstood legal issues for REALTORS®," says Mel Black, an attorney with Everett Gaston Hancock in Raleigh. He also is owner, founder and educator at BrightPath Education Services, a statewide appraisal and real estate school and remains a licensed appraiser and real estate broker. “Make sure you know that ‘the client’ that ordered the appraisal is the lender, not your client,” he says. "A lot of agents understand that, but some don’t. It’s a basic issue.” Also, when the appraisal report is complete, it goes to the lender—not the home owner or home buyer. According to Black, before the mortgage crisis, many people were trying to influence appraisers, trying to sway them, coerce them or promise additional work. “When I’m in a room full of appraisers, and I ask them if they have ever been misled during an appraisal, the hands fly up,” he says. “The myth has grown through the years that appraisers cannot be communicated with at all. The truth is that the broker can provide solid, factual data. And the appraiser can ask for it, too.” At the most basic level, real estate brokers need to recognize that it’s the duty of competent and qualified appraisers to provide credible opinions of value for homes. Any information that assists an appraiser in that objective is not only allowed, it is welcomed. • INSIGHT  25

Betting on Resilience: Mobilizing Private Investment to Finance Disaster Resistance


26  INSIGHT • May 2020

The Problem: Resilient Infrastructure Costs a Lot In June 2019, the Institute for Sustainable Government’s Center for Climate Integrity released the first comprehensive, community-level cost estimate for armoring America’s coastal public infrastructure where threatened by projected sea-level rise. Employing conservative projections assuming aggressive carbon emissions reduction scenarios to capture a low-range forecast of sea-level rise, the study developed cost projections for the construction of coastal seawalls to protect transportation infrastructure, public utilities, port facilities, drinking water supply and storm water systems from projected 2040 flood hazard conditions. North Carolina came in third in estimated total cost in the contiguous United States, facing an about $34.8 billion obligation. Equating to about 70 percent of North Carolina’s total government spending for Fiscal Year 2018, this figure reflects the staggering disproportion at which public capital resources across the United States compare to the cost of constructing climate-resilient infrastructure. Researchers at the University of Massachusetts investigating potential financing mechanisms for resilience initiatives within the City of Boston’s Imagine Boston 2030 comprehensive plan concluded in 2018 that maximum conceivable contributions from federal and state sources would

offset at most 60 percent of “near to mid-term” projects’ $2.4 billion costs. Their findings contribute to a series of studies undertaken by various coastal cities that document the inadequacy of state and federal subsidies and conventional tax and fee financing to climate adaptation plans at the municipal level. With coastal cities across the U.S. increasingly attentive to the reality of resilience-related additional capital demands estimated in the hundreds of billions by the Federal Reserve Bank of San Francisco, regional discussions among community stakeholders as to the mechanics of mobilizing supplemental private investment signal a new cutting edge in managing climate change. Consensus is emerging as to the major variables inherent in financing a resilient America, with properly valuing climate risk and incentivizing private investment in delayed, diffuse returns among the primary obstacles and financial innovations like resilience bonds among the primary opportunities. Financial Risk Spurs Innovation With about $268 billion in damage from hurricanes Harvey, Maria, and Irma alone, 2017 is the costliest U.S. hurricane season on record. As the increasing concentration

of infrastructure in coastal regions magnifies the potential for even greater future costs, the importance of developing metrics to adequately anticipate the financial scale of storm events is clear. But systemic defects in the insurance industry’s capacity for accurate risk-pricing fundamentally limit the present power of insurance costs to project climate vulnerability and promote its mitigation. The National Flood Insurance Program (NFIP), which currently underwrites over five million policies, intentionally underrepresents flood risk to contain premium costs by broadly aggregating covered properties into approximate risk categories and employing inadequately detailed Flood Insurance Rate Maps informed by obsolete data. This induces massive insurance market distortions political obstacles to the correction of which Congress has proven repeatedly unable to overcome. While private insurers employ more nuanced mapping and have developed very sophisticated modeling capabilities, market disincentives resulting from the preponderance of artificially inexpensive, actuarially unsound NFIP options limit their issuance of properly risk-adjusted policies, sometimes precipitating their withdrawal from the market altogether. But demand for prudent approaches to valuing climate-related risks has spurred responses elsewhere in the financial sector. Credit rating agencies have recently begun to refine their ability to incorporate climate vulnerabilities into the pricing of financial assets like municipal bonds. Moody’s July 2019 acquisition of a majority stake in Four Twenty Seven—a provider of market intelligence on the economics of climate change—was widely interpreted as an indication that large financial services firms are preparing to assume their anticipated role as principal arbiters of climate-related financial risks. Bloomberg recently published the results of its analysis of a series of due diligence questionnaires prepared by municipal bond underwriters to disclose risks associated with debt issuances by various municipalities in coastal Florida, reporting that a majority featured new language on “storm-related risks or climate change.” A marked intensification in the rigor and specificity of such disclosure requirements would present a problem for municipalities whose ability to satisfy bond obligations derives from revenue susceptible to storm events, such as from seasonal tourism. Standard & Poor’s reported in July 2019 that “credit ratings analysts are increasingly exploring [these] questions in meetings with local officials,” quoting Honolulu Mayor Kirk Caldwell’s testimony before the U.S. Senate Democrats’ Special Committee on Climate Risks that “the analysts say, ‘we’re rating your bonds, and are you going to be able to pay them back given what’s occurring in your city?’” Finding a Solution: Resilience Bonds The deterioration and obsolescence of America’s critical infrastructure and the scant availability of federal funding to offset the cost of improvements are old news to local governments, whose ease in dedicating large up-front investments in public infrastructure projects’ delayed returns often barely exceeds that of the private sector. But the hazard posed by increased borrowing costs due to heightened sensitivity to climate-related exposure among bond investors • INSIGHT  27

and rating agencies represents a new, imminent, nonregulatory incentive to begin practical resilience planning. Addressing widespread indication that investor demand for more accurate risk-pricing may precipitate credit rating downgrades and exacerbate capital shortfalls in infrastructure financing, the White House Office of Management and Budget emphasized the importance of developing “diverse financial tools” to “achieve long-term resilience with less dependence on Federal funds.” One financial tool essential to this endeavor’s progress involves the restructuring of an existing high-yield insurance-linked security already familiar to North Carolina, the catastrophe (CAT) bond. In January 2019, the North Carolina Insurance Underwriting Association (NCIUA) sponsored a CAT bond to finance $450 million in reinsurance protection for North Carolina’s Coastal Property Insurance Pool—a taxexempt association of insurers who compose the market of last resort for homeowner, dwelling and commercial fire protection policies in eighteen coastal counties. CAT bonds allow insurance companies to transfer to investors the risks of significant natural catastrophes and thereby potentially indemnify damages exceeding the revenue they derive from premiums. CAT bonds differ structurally from conventional municipal bonds in their incorporation of a predetermined loss threshold, operating for a predetermined period of time called the bond term, at which the sponsor of the bond retains the principal invested. If the loss threshold is not met by the maturity date of the bond term, the sponsor must repay the investors’ principal. Throughout the bond term, the investors collect coupon payments including their share of premiums paid by the sponsor at a rate proportional to the catastrophe risk and also of the interest generated by investment of the collateral in very low risk securities like U.S. Treasuries. These transactions are facilitated by one or more investment banks referred to as the bond issuers. In other words, CAT bonds allow insurance companies to pay investors to offer collateral guaranteeing their ability to issue policies despite the potential for a catastrophic loss of a particular magnitude and investors to bet that a loss of this magnitude will not take place. If the catastrophe occurs, the insurance company can use the collateral to pay its policyholders; if it does not, the investors get the collateral back with a handsome interest and premium dividend. CAT bonds are a high-risk asset class, but remain attractive to institutional investors like hedge funds due to consistent five to seven percent yields generally insulated from wider market performance. The global CAT bond market reached $36.6 billion in 2018. CAT bonds importantly differ from flood insurance in that the accuracy of their pricing does not come at the expense of their marketability. The viability of CAT bonds consists in catastrophe risk modeling firms’ employment of sophisticated simulations constructed from large sets of diverse and mutually-informative quantitative variables, not historical data profiling a specific peril in isolation. By providing a mechanism to monetize for capital market consumption the absence of catastrophic damages due to natural happenstance, CAT bonds can be innovatively 28  INSIGHT • May 2020

restructured to similarly monetize the intentional avoidance of catastrophic damages via resilience projects. The First Resilience Bond In September 2019, the European Bank for Reconstruction and Development (EBRD) sponsored the world’s first resilience bond—a $700 million issuance underwritten jointly by BNP Paribas, Goldman Sachs, and Skandinaviska Enskilda Banken AB to help finance EBRD’s €7 billion portfolio of climate resilience projects. Resilience bonds operate relative to CAT bonds somewhat like progressive health insurance operates relative to life insurance. Whereas traditional CAT bonds retrogressively indemnify losses incurred from a catastrophic event, resilience bonds progressively mitigate losses before the catastrophe occurs via a rebate structure which monetizes the insurance value that resilience projects create. The issuance of a resilience bond requires comparison of the relative risk of losses satisfying predetermined parameters with and without the sponsor’s completion of a planned resilience project. The resilience bond is initially issued with coupon payments reflecting the original, pre-project risk. Upon completion of the project or of project stages during the bond term, the premium rates and coupon payments are adjusted to reflect the reduction of risk to the collateral, creating an insurance savings that can be withdrawn by the sponsor and applied to project costs that have been securitized via municipal bonds and other

conventional instruments to provide immediate capital for financing the project. These new instruments deliver a mechanism whereby national, state and potentially even local governmental entities can secure significant private sector financing for infrastructure improvements otherwise financially infeasible. Resilience bonds can be designed with multiple cosponsors to capture the diffuse risk-reduction benefits accruing from a resilience project to a variety of stakeholders with vulnerable insurable assets, each of whom could not alone afford premiums adequate to a bond of the scale sufficient to finance effective mitigation projects. For example, the seawalls the Institute for Sustainable Government’s Center for Climate Integrity forecast as necessary to protect North Carolina’s coastal infrastructure would result in rigorously quantifiable risk reductions to a variety of physical assets owned by governmental and quasipublic entities like counties, municipalities, utilities and port and transit authorities. Each entity could participate in resilience bond sponsorship to finance a seawall construction project by committing a share of premium costs proportional to the exposure of their particular assets. Investment banks would engage catastrophe modeling experts to develop baseline and post-project risk profiles and design CAT-type bond paradigms appropriate to the generation of investments on a scale necessary for insurance savings rebates commensurate with project costs. The risk reductions achievable at progressive stages of seawall construction

would be captured in predetermined adjustments of coupon payments to investors. Upfront capital for project costs would be financed via multiple issuances of additional sets of traditional securities like revenue bonds guaranteed by the rebates the sponsors will receive. As the seawalls are constructed, the rebates accrue and the revenue bond obligations are satisfied. The global fanfare accompanying EBRD’s offering illustrates the considerable enthusiasm surrounding resilience bonds in public and private quarters despite their technical complexity. Using capital markets to create value from the hazards posed by natural catastrophes, and then leveraging that value to avoid the same hazards, is certainly an exciting and encouraging proposition. As the broader success of resilience bonds depends on investor confidence in the integrity of the underlying risk modeling, additional research into scenarios more complex than coastal flooding is needed. Future resilience bond initiatives’ successes and failures demand attention from experts in academic, governmental, and finance settings to secure a viable path to their wider market acceptance. If we are to continue enjoying the many benefits of life in coastal communities, we must ensure that advances in resilient construction technologies and materials prove possible on scales larger than public financing alone can support. Thought of the sort behind resilience bonds is crucial to this endeavor. • INSIGHT  29

Thank you Annual Sponsors Platinum




Property Management Division WHY YOU SHOULD JOIN


The Key to Opening New Doors The business opportunities in property management are expanding constantly, but the demands on your time are increasing just as fast. The objective of the NC REALTORS® PMD is to provide legislative, educational and networking opportunities to North Carolina’s professional property managers so they can you stay up-todate on trends and developments.

+ PMD Legal Handbook + Educational Meetings + Legislative Participation + Statewide Professional Networking

30  INSIGHT • May 2020

How to Join Any member of NC REALTORS® may join PMD. Visit or contact Amy Kemp at for more information on PMD.

MURDER MYSTERY DINNER CRUISE Tuesday, October 13, 2020 | 7:00 – 9:00 pm Register at

Gives Back Make a difference in your community and participate in NC REALTORS® Gives Back Day on Wednesday, June 24, 2020. GET INVOLVED • Reach out your local association • Visit • Contact Michael McKinney NC REALTORS® Housing Foundation Director 336.550.4420 | • INSIGHT  31


WHY Communicating Your Value Proposition

On a recent RE-defined podcast, Government Affairs Director Nick Scarci and Nicole Arnold sat down to discuss the self-help book "Start with Why" by sought-after TED-x speaker Simon Sinek. The book describes how business leaders can gain authenticity through a focus on their purpose. Sinek encourages businesses to put aside short-term motivators because they do not inspire loyalty. Rather true market leaders build long-term client loyalty by BY NICOLE ARNOLD forming strategies that advance their purpose or the DIRECTOR OF LOCAL “why.” According to the book, business owners should GOVERNMENT AFFAIRS examine their entire operation and find metrics that measure how the company advances its why. These strategies aptly describe the practice of real estate brokerage our members engage in every day. To bring real-world context to Sinek’s advice, Nicole interviewed several REALTORS® who demonstrate market leadership in individual ways. To hear Nicole and Nick discuss this topic, subscribe to RE-defined—the NC REALTORS® podcast on iTunes, Spotify, Google Play or SoundCloud.

32  INSIGHT • May 2020

What’s the “why” of your real estate practice, or in more common terms, what’s your value proposition? To make a difference in people’s lives, by being relevant, passionate and delivering the best service possible. What is one unique way you communicate your value proposition to clients? This is part of our “Why Walls” in each branch. We remind our brokers of our value proposition constantly, and we practice what we preach.

Lolita Malave

How do you build loyalty into your customer base? Through providing professional service before, during and after a transaction. We mind what we say in public—keep our personal opinions private and play well with others.

Near the beginning of a relationship or potential transaction, how do you know whether your client understands and appreciates your authentic brand of service? I believe that our client can see that our confidence is the result of success and that our success is a result of knowing where to get answers and how to solve problems—I believe in GRIT! How do you and your company keep this “why” before your clients and customer base? Regular social media posts, a monthly online newsletter, vlogs to our sphere and billboards. How do you communicate the values of your real estate practice to clients? Examples, testimonials or anecdotes. We find our clients can relate more easily and begin to understand what we can bring to the table if they are in a format they can understand. We also rely heavily on referrals who are typically the best communicators of what we bring to the table.

Brooke Cashion

How do you delegate some implementation of your company’s why (or vision) to others? How do you train your team to catch your vision? Our office manager and real estate assistant keeps the portion of our vision that relates to efficiencies and systems. Our CEO takes the messaging portion to the client through social media and business development. Our REALTORS® and myself implement our vision through our interaction in the community, interaction with REALTOR® colleagues and how we conduct and present ourselves.

How does your mission influence your value proposition? Our company values and mission statement follow the word TEACH which stands for Teamwork, Education, Accountability, Community and Hope. That is the framework for everything we do. How do you explain quickly and effectively to potential customers that you deliver quality? We let our past clients tell potential customers about us. Eighty-two percent of consumers read online reviews for a local business. My firm currently has 64 five-star reviews on Google and over 60 five-star reviews on Zillow. We now have a 100 percent five-star ranking. We use those reviews in all kinds of marketing. Social proof is compelling. (February 2020)

Mark Saunders

How has the role of REALTOR® changed while you have been in the profession? How do you shape your “why” and “how” around this role? Five to ten years ago we were the gatekeepers to properties, but now we are the knowledge brokers for our clients. We bring a depth of knowledge and technology to a transaction. [This makes] it as streamlined and smooth for our client as possible. I tell new clients all the time, “I want you to feel like you could get your real estate license because you have been so informed and truly understand all the forms you signed and actions you took through the process.” • INSIGHT  33




Providing discounts & savings at the point-of-purchase on the products and services you use most BUSINESS SERVICES






CONTACT Maurice Brown 336.808.4231

The moment you get the

Clear to Close

Helping you create moments like these for 20 years and counting.

Issuu converts static files into: digital portfolios, online yearbooks, online catalogs, digital photo albums and more. Sign up and create your flipbook.