THE VOICE OF REAL ESTATE IN NORTH CAROLINA
VOL 97 NO 3 | AUGUST 2018
Vernice “Flygirl” Armour XCHANGE '18 KEYNOTE
Vivian Howard STATE OF REAL ESTATE KEYNOTE
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A self-supporting public agency.
features 14 What Companies Want
Community improvements in the face of economic opportunities.
16 XCHANGE '18 Preview
NC REALTORS® are ready to shine. Plus, a look at the first annual State of Real Estate event.
20 Maintain Your Way to a Great Lawn With the right execution, lawns can add value to the property they surround.
22 Should You Be Feeling Good or Bad About the New Tax Act? The Tax Cut and Jobs Act of 2017 could affect your current tax liability and your future retirement.
24 Stuck in the Middle?
A song, a TV show, but no way to deal with NPPI.
27 The Forgotten: Earned Media
A different approach is needed to gain maximum return on earned media efforts.
PRESIDENT'S LETTER Take an active role in the future of our association and our industry.
5 INSIDE NC REALTORS® NC REALTORS® Elections & Candidate Information 6 LEGAL TALK Handling Multiple Offers
TALK TO US
8 REALTORS® IN ACTION When disaster strikes, NC REALTORS® mobilize to aid those in need. 10
THE VALUE OF EDUCATION IN REAL ESTATE At NC REALTORS®, every member has immense educational opportunities available.
Have something to talk about? Sure you do — and we want to hear it! Send us your comments, ideas or success stories to email@example.com and you could be featured in the next Insight. ncrealtors.org • INSIGHT 3
Insight, Volume 97, Issue 3 President Amy Hedgecock, CPM, GRI President-Elect Asa Fleming, SFR, AHWD Treasurer Kelly Marks, ABR, CRS, GRI Immediate Past President Treasure A. Faircloth, GRI, E-PRO, CRS REGIONAL VICE PRESIDENTS Region 1: Sandy Hurst, Jacksonville; Region 2: Jim Goodman, Oak Island; Region 3: Lisa York, Sanford; Region 4: Wade Corbett, Raleigh; Region 5: Laurie Edwards, High Point; Region 6: Stephen Long, Winston-Salem; Region 7: Marsha Jordan, Lincolnton; Region 8: Maren Brisson-Kuester, Steven Bryant, Charlotte; Region 9: Randall Blankenship, Asheville; Region 10: Harriette Doggett, Mollie Owen, Raleigh. Chief Executive Officer Andrea Bushnell, Esq., CIPS, RCE Vice President of Communications & Marketing Tracey Gould, M.S. IMC, CPSM Editor/Director of Creative Development Mckenzie Allen Graphic Design Coordinator Raquel Stubblefield For advertising information, visit ncrealtors.org/advertising 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 firstname.lastname@example.org with a subject line of “Insight opt-out.”
Welcome to the August issue of Insight magazine—your exclusive member benefit sent directly to your mailbox with sharable content you can use. One thing’s for certain, NC REALTORS® are busier now than they’ve ever been. I’m experiencing it personally, and I know it’s hard to break away from a strong real estate market, demanding clients and appealing transactions. While the nation is still struggling with an inventory shortage and frustrated buyers, rising housing prices and the lack of affordable housing in some places, the market remains strong and viable for our members. Despite your day-to-day schedules, I encourage you to lean in—don’t become complacent with continual learning, community engagement, leading by example, your commitment to the industry’s future and your involvement in NC REALTORS®. The world around us is changing—at a rapid pace. Disrupters are at every corner. As REALTORS®, we don’t need to just be responsive—we need to be proactive. Game changers. Change agents. We don’t need to just tell our story, we need to own it and rewrite it or others will write it for us. I challenge us all—you, and you, and you—to act. Let’s collaborate and take an active role in the future of our association and our industry. Why not start in Wilmington, North Carolina next month during XCHANGE ’18? It’s the perfect opportunity to tackle issues that matter to you and your clients, solve community issues that will change lives for the better and learn the latest trends, tools and strategies to buy and sell real estate—both residential and commercial. XCHANGE ’18 is the spotlight in this month’s issue, as we expose all of the speakers, content and events you won’t want to miss—namely the installation of your 2019 president, Asa Fleming, and the state’s only statewide real estate summit, State of Real Estate. In this month’s Insight issue, we dive into some of the real estate-related issues that we will problem-solve during XCHANGE ’18, including economic development and the value of education in real estate. We also reveal who’s running for leadership positions in the 2019 NC REALTORS® elections, which take place later this month, and how you can vote for the leaders you trust to positively shape the association. If you’ve been waiting the right time to get involved in NC REALTORS®, your wait is over. The. Time. Is. Now. Together we rise.
Amy Hedgecock 2018 President 4511 Weybridge Lane, Greensboro, NC 27407 Phone: (336) 294-1415, Toll Free: (800) 443-9956
2019 CANDIDATES & ELECTION INFORMATION
REGIONAL VICE PRESIDENTS
(Vote for one candidate)
(Vote for one candidate per region)
Maren Brisson-Kuester Charlotte Regional REALTOR® Association
REGION 3 Connie Corey, GRI, SLS Greenville-Pitt Association of REALTORS®
ISSUES MOBILIZATION COMMITTEE (Vote for one candidate)
Tracy Swanson, ABR, GRI, RSPS, SFR, SPS, SRES
Julia Tucker, ABR, CSP, Eco Broker, GRI
Brunswick County Association of REALTORS®
FINANCE & BUDGET COMMITTEE
Durham Regional Association of REALTORS®
REGION 6 Penny Boyles, CRS, GRI
(Vote for three candidates)
Winston-Salem Regional Association of REALTORS®
Bill Aceto, GREEN High Country Association of REALTORS®
REGION 8 Jennifer Frontera, BPOR, SFR, AHWD Charlotte Regional REALTOR® Association
Donna Atherton, ABR, GRI, RSPS, SPS, SRES
AUGUST 13-16, 2018 ncrealtors.org/elections
The NC REALTORS® elections will be held August 13-16, 2018 and voting will take place online. The candidates listed on this page have been certified by the NC REALTORS® Certifying/Recruiting Committee. Visit ncrealtors.org/elections for detailed candidate bios, voting rules and to vote in August.
Brunswick County Association of REALTORS®
REGION 9 Renee Cooney, ABR, SRES Carolina Smokies Association of REALTORS®
Laurie Knudsen, GRI Charlotte Regional REALTOR® Association
REGION 10 John Wood, GRI Raleigh Regional Association of REALTORS®
Mark Parker Raleigh Regional Association of REALTORS®
NAR DIRECTOR (Number of Directors to be elected will be determined after July 31)
Lou Baldwin, GRI Winston-Salem Regional Association of REALTORS®
Sandra O’Connor, ABR, CIPS, CRB, GRI Greensboro Regional REALTORS® Association
Stephanie Walker, ABR, CRS, GRI, RSPS, SFR, SRES Outer Banks Association of REALTORS®
Bruce Williams, AHWD, CRS, GRI Brunswick County Association of REALTORS®
Patrice Willetts, ABR, AHWD, GRI, SRES, SRS Cape Fear REALTORS®
ncrealtors.org • INSIGHT 5
Handling Multiple Offers Some of the issues addressed in this article are not unique to multiple offer situations, but oftentimes arise in such situations. BY: WILL MARTIN, GENERAL COUNSEL QUESTION: The existence of multiple offers is a material fact that a listing agent must always disclose. True or false? ANSWER: False. Material facts include facts about the property, facts affecting the property and facts affecting the ability of a broker's principal to complete a transaction. The existence of another offer does not fall into any of those categories. However, in order to maintain a so-called "level playing field" between competing buyers, if one of the competing buyers is aware of the existence of the multiple offer situation, the Real Estate Commission would expect the listing agent to disclose that fact to the other competing buyer(s). QUESTION: If asked by a buyer agent if there are other offers, the listing agent is ethically obligated to always disclose the existence of other offers. True or false? ANSWER: False. According to the REALTOR® Code of Ethics, the listing agent must have the seller's approval to disclose the existence of offers on the property. If the seller doesn't approve, such disclosure would be unethical. On the other hand, if the seller does 6 INSIGHT • August 2018
approve of disclosing the existence of other offers, the listing agent would be ethically required to do so if asked by a buyer agent. See Standard of Practice 1-15 of the Code. QUESTION: If a listing agent discloses to a buyer agent that there are other offers on the property and the buyer agent asks if the listing agent or another agent in the listing agent's firm represents any of the other buyers, the listing agent must answer the question. True or false? ANSWER: True. See Standard of Practice 1-15. QUESTION: It is permissible for a listing agent to disclose a term or terms of a buyer’s offer to a competing buyer so long as the seller directs the listing agent to do so. True or false? ANSWER: False. Disclosing the price or other material terms in a party's offer to a competing party without the express authority of the offering party is a violation of Real Estate Commission Rule 58A.0115. QUESTION: A buyer agent has the right to present an offer directly to the seller unless the seller objects in
writing, in which case the buyer agent has a right to a copy of the seller's written instructions. True or false? ANSWER: True, assuming the property has been listed in MLS. See NAR Model MLS Rule 2.3. A listing agent has an analogous right to present a counteroffer directly to the buyer. See NAR Model MLS Rule 2.4. QUESTION: In a hot real estate market where there is increased competition for fewer homes, it is a good idea for a buyer to include a letter with his or her offer to distinguish the offer from other offers. True or false? ANSWER: False. Although a buyer letter, or "love letter" as they are sometimes called, can be legal, we think buyers should be discouraged from submitting letters with their offers because they raise concerns with potential violations of fair housing laws. For example, assume a multiple offer situation involving two buyers who submitted offers containing similar terms. Buyer #1, whose offer was rejected, is of a different national origin than the seller, while successful Buyer #2 shares the same national origin with the seller. Buyer #2 submitted a letter with her offer that revealed her
NC REALTORS® FORMS UPDATE: national origin. If Buyer #1 discovers these facts, he may point to the letter as some evidence that the seller took Buyer #2's national origin into account in deciding to accept her offer, which would be a violation of state and federal Fair Housing laws. However, as mentioned above, it is not per se illegal for a buyer to submit a letter with an offer. If a buyer insists on including a letter, care should be taken to focus on features and benefits of the home itself and avoid specific needs of the buyer or other information that may be related directly or indirectly to a characteristic that is protected under the Fair Housing laws. And although a carefully-drafted buyer letter may be legal, a seller may consider not accepting it in any event to avoid even the appearance that the seller's decision-making may have been influenced by the contents of such a letter for an illegal reason. QUESTION: Assume three buyers have submitted offers on the same property. Offer #1 is a low-ball offer, but offer #s 2 and 3 are within the realm of what the seller might consider accepting. Since it's the seller's prerogative to accept, reject or ignore any offers, it is permissible for the listing agent in this situation to contact the agents representing buyer #s 2 and 3 to request that their clients submit their best offers and not to respond to the agent for buyer #1. True or false? ANSWER: False. Although the listing agent doesn't have to invite buyer #1 to submit another offer, fairness dictates that the listing agent must at least contact buyer #1's agent to let him or her know that buyer #1's offer has been rejected by the seller. Of course, if buyer #1 submits another offer, the listing agent must present it to the seller. In addition, if the listing agent discloses the existence of multiple offers to the agents for buyer #s 2 and 3, the listing agent would be obliged to disclose that fact to the agent for buyer #1.
A number of residential forms in the NC REALTORS® forms library have been revised or created effective July 1. The revised forms are updated on ncrealtors.org. They have also been provided to NC REALTORS®’ approved forms software vendor.
QUESTION: An offer to purchase becomes binding only after the party to whom the offer is made signs it without any changes and a signed copy is delivered to the offering party. True or false? ANSWER: False, assuming the offer itself does not require that a signed copy be delivered as a condition of the offer becoming a binding contract. According to the Offer to Purchase and Contract, the offer becomes binding on the Effective Date, which is defined in paragraph 1(g) as the date that the party to whom the offer or counteroffer is made signs or initials it, and such signing or initialing has been communicated to the offering party. Although delivering a signed copy of an accepted offer certainly constitutes communication of acceptance, it's not required by law, which permits communication of acceptance by any usual means of communication, oral or written. For example, a phone call from the listing agent to the buyer agent confirming that the seller has signed the buyer's offer would constitute acceptance. QUESTION: Buyer agent A submits an offer to listing agent B. After presenting the offer to her client, listing agent B emails buyer agent A to say that the seller will accept the buyer’s offer if the buyer is willing to increase the purchase price by $10,000. After contacting the buyer, buyer agent A replies to listing agent B’s email stating that the buyer accepts the seller’s counteroffer. The property is under contract. True or false? ANSWER: False, assuming that buyer agent A does not have actual or apparent authority to bind the buyer to a contract. The standard buyer agency agreement does not confer authority on the agent to bind the client to a real estate contract, and absent any other agreement, such as a power of attorney, granting the agent that authority, buyer agent A does not have actual authority to do so. Absent evidence that the buyer held buyer agent A out as possessing authority to
bind them to a contract or permitted buyer agent A to represent himself as having such authority, buyer agent A does not have any apparent authority to bind the buyer to a contract either. See the 2012 Court of Appeals case of Manecke v. Kurtz, available on the NC Courts website at ncourts.org under Court Opinions/NC Court of Appeals opinions/2012/August 21. Note that even if buyer agent A did have actual or apparent authority to bind the buyer to a contract, the facts presented do not indicate that the seller had changed the offer to reflect the increased purchase price and initialed the change, or that listing agent B had actual or apparent authority to negotiate a contract for the seller. Thus, listing agent B's email likely did not constitute a counter offer that could have been accepted by buyer agent A on the buyer's account anyway. QUESTION: If a listing agent in a multiple offer situation advises the buyer agents for the competing buyers in writing that it is a multiple offer situation, and advises them to submit their highest and best offers, it would be okay for the seller to accept an offer that does not have the highest price. True or false? ANSWER: True. A seller is free to accept any offer they may choose to accept based on the consideration of matters other than price. However, it is recommended that a listing agent who invites a buyer to submit another offer should simply ask for the buyer's "best" offer rather than the buyer's "highest and best" offer. A rejected buyer who later discovers that the seller sold the property to another buyer for less money than was offered by the rejected buyer may claim, to borrow a famous phrase, that something "is rotten in the state of Denmark," and that he should have gotten the property since his offer was the highest. The rejected buyer may well be angry in any event, but the listing agent's use of the phrase "highest and best" may not help matters. ncrealtors.org • INSIGHT 7
Founded in 2004, the NC REALTORS® Housing Foundation provides affordable housing opportunities through education and community-based initiatives including disaster relief. The directors of this charitable organization believe that REALTORS® are the leading voice for strong communities and housing affordability for all. This means that when disaster strikes, NC REALTORS® mobilize to aid those in need. BY: NICOLE ARNOLD GREENSBORO TORNADO DAMAGE ESTIMATES
More than 1,000 homes, businesses, and churches damaged
$27,342,425 Single-family home damage estimate
$1,000,000+ Apartment damage estimate
AT LEAST 1 DEATH
of the damage affected East Greensboro, the poorest area of Guilford County 8 INSIGHT • August 2018
On the evening of Sunday, April 15, an EF-2 tornado struck Guilford and Rockingham counties. NC REALTORS® and its Housing Foundation immediately deployed a plan to meet the need of those victims who lost their housing from these storms.
STEP 1: Meet the immediate need
By Monday, April 16, we began receiving early estimates of storm damage. NC REALTORS® immediately began asking for donations, including water, food, and other basic necessities for storm survivors. After gathering supplies at our Greensboro headquarters, staffers delivered the goods to temporary first responder shelters for victims. At the same time, board members and staffers met to discuss the need for later stage mortgage and rental assistance for those displaced by the storm. NC REALTORS® Housing Foundation began accepting donations earmarked for tornado relief in preparation for this.
STEP 2: Recovery and clean up
In May, Greensboro Regional REALTORS® Association (GRRA) and Housing Foundation officials collaborated with Community Housing Solutions to clean up neighborhoods affected by the storm. The Matching Grant program from the NC REALTORS® Housing Foundation matched $4,000 donated by GRRA for a combined $8,000 investment in this clean-up effort.
From top: Around 1,000 families were impacted by the tornadoes. The hardest hit area was East Greensboro, which is also one of the poorest areas in Guilford County. NC REALTORS® volunteers helped victims fill out applications for mortgage or rental assistance at the Housing Hub.
IN ACTION A SPECIAL THANKS TO OUR TEAM OF VOLUNTEERS Kathy Haines Kathy Carpenter Brittany Lance Jason Scott Diana Davis Alicia Stevens Nick Scarci Ruby Smith Terri Johnson Julie LeMond Laurie Carney Vicki Crowdus Caitlin Thompson Keri Epps-Rashad
Sofia Crisp Nicole Arnold Bertha Brown Denise Daly Doug Klesch Aliyah Ross Welko-Tech LLC The City of Greensboro
When REALTORS® come together, housing victims can regain their hope and their home.
STEP 3: Financial Planning and Volunteer Management
By May 14, all temporary housing shelters in Greensboro closed. The dire need for housing began in earnest. The Housing Foundation organized volunteer members for intake at the Housing Hub on Summit Avenue. This collaborative office space provides services for residents who need the aid of the Greensboro Housing Coalition, Housing Consultants Group or Community Housing Solutions. In addition, the specialists there work closely with FEMA, the Department of Social Services and the Greensboro Community Foundation. These cross-organizational methods proved vital for displaced residents who needed multiple resources during their time of crisis. From May 15-31, NC REALTORS® volunteers helped victims fill out applications for mortgage or rental assistance at the Housing Hub. There, applicants received not only resource aids but also emotional comfort and support in a calm and caring environment. During this time, the NC REALTORS® Housing Foundation fundraising was also underway.
STEP 4: Direct Aid to Housing Victims
As of June 19, the Housing Foundation has approved over $61,000 in direct assistance to victims and helped 78 families. The future and the past of Disaster Management This is not the first time the Housing Foundation has undertaken a major assistance effort after a natural disaster. After the landfall of Hurricane Matthew in October 2016, NC REALTORS® staff and Foundation volunteers implemented the same project management steps for a much larger storm. Over seven months, we aided more than 300 families with direct mortgage and rental assistance of over $315,000. We do not anticipate that the 2018 tornadoes will be our last disaster. But our efforts have proven the generosity of REALTORS®, and our project management capabilities have demonstrated our ability to meet the impacted in their communities at their hour of need. Going forward, the vision of the Housing Foundation remains true and essential: REALTORS® are the voice of community strength. When REALTORS® come together, housing victims can regain their hope and their home. NC REALTORS® should take pride in their public example of endurance and compassion in the face of nature’s wrath.
From NAR’s REALTOR® Relief Fund
+ + + =$69,000 $2,000
From the Greensboro Regional REALTORS® Association
From the Winston-Salem Regional Association of REALTORS®
Earmarked by The Housing Foundation
With other personal donations, the Foundation accrued a total of $69,000 in a restricted fund of direct aid for victims’ mortgage or rental assistance.
NC REALTORS® Housing Foundation, a charitable foundation, provides housing opportunities through education and community-based initiatives including disaster relief. Visit ncrealtorshf.org to learn more. ncrealtors.org • INSIGHT 9
Learn more about NC REEF, GRI and all NC REALTORS® education opportunities at ncrealtors.org/grow.
10 INSIGHT • August 2018
THE VALUE OF EDUCATION IN REAL ESTATE It’s August, and we’re celebrating education—in real estate and beyond. BY: TRACEY GOULD
ugust generally means back-to-school for most K-12 and college students, and what better time to explore the value of education in the industry we know and love. For many, the attainment of education—be it a diploma, higher education degree, continuing education or a certain credential—is a goal with a defined end. It’s the end goal on the path to increased earnings, a promotion or a new career path. For others, education is an endless pursuit—“a process of living and not a preparation for future living,” as John Dewey, American philosopher, psychologist and education reformer proclaimed. NC REEF – A FOUNDER OF REAL ESTATE EDUCATION At NC REALTORS®, every member has immense educational opportunities available—from single day to multi-day courses, from online to offline classrooms and from general education to highly specialized content. In fact, NC REALTORS® is a leader in real estate education in North Carolina, taking the initiative to start the North Carolina Real Estate Education Foundation (NC REEF) over 50 years ago because a gap was identified in educational opportunities in the industry. It was then that NC REEF committed funds to sponsor the UNC Kenan-Flagler Business School years ago, which hosts an annual UNC Real Estate Conference that attracts hundreds of real estate executives from across the state. GRI William Butler Yeats, Irish poet and playwright, once said, “Education is not the filling of a pail, but the lighting of a fire.” This approach reinforces the idea of education as a continual learning process—not an object you obtain or a project you complete. This was the foundation for the (now nationwide) Graduate, REALTOR® Institute (GRI), which offers continuing education and classes covering business skills in real
AT A GLANCE Did you know? NC REEF is the oldest, continually operating organization in the country solely dedicated to real estate education and professionalism. New Website Through original video tutorials, scholarships and other content, NC REEF elevates the real estate profession through education. Find all of this and more at ncreef.ncrealtors.org
Upcoming classes AUG. 20-21 ABR®, Raleigh AUG. 22 GRI - Balancing Business Risks and Ethics Hendersonville AUG. 23 GRI - Technology Tools & Resources Waynesville Visit ncrealtors.org/grow for our full calendar of education opportunities.
ncrealtors.org • INSIGHT 11
Real Estate Education
“I don’t know anything else that will be a better investment in yourself, your future and your career. Education is the most precious gift you can give yourself.” —Cindy Chandler
estate. Founded by NC REEF, the organization now resides under the NC REALTORS® umbrella. Royce Bennett Royce Bennett, 2018 president of NC REEF, recently stated that NC REEF still— after more than 50 years in existence— has aspirational goals “to be the place for REALTORS® to go find educational offerings.” He admits, however, that there are so many different places for members to go for educational content, that it’s been hard for NC REEF to find its niche. This isn’t to say the demand for educational content is non-existent. THE NEED As Bennett states, “in the real estate business, you never experience the same thing twice. Every transaction is different.” For this reason alone, and not even accounting for the rapid pace of changing technology or onset of industry disruptors, continuing education needs to be at the forefront of every REALTOR®’s mind and built into their annual strategic plan. From a consumer’s perspective, REALTORS® are expected to know everything there is to know about a transaction, the process, real estate laws, property conditions and even the unknown. “Things change so fast in this industry,” said Cindy Chandler, NC REALTOR® and pastpresident. “Consumers Cindy Chandler need an advocate who
12 INSIGHT • August 2018
knows what has changed. If a REALTOR® doesn’t keep up with the latest trends and best practices, then the only role left for the REALTOR® is advisor based on what they know. There will come a time when that isn’t enough.” In today’s mass digital information age, almost all of the information pertaining to real estate properties and transactions are now at the consumer’s fingertips. “The more REALTORS® know about the industry and the processes, the better they can serve their clients, identify issues and solve challenges related to the transaction,” stated Chandler. Without needed continual education, errors or omissions can be detrimental to clients or the REALTOR®’s business and reputation. The only way to prevent such a catastrophe and reinforce the professionalism of REALTORS® is through education. Unlike high school when some students may have copied off of their neighbor’s tests or papers, there aren’t shortcuts in REALTOR® education. A REALTOR® either knows “it” or they don’t. DESIGNATIONS & CERTIFICATIONS While designations and certifications are an important part of most REALTORS®' continuing education and positioning strategy in their market, most consumers aren’t aware of them or their meaning and purpose. The National Association of REALTORS® offers 26 different designations and certifications, however, not all are offered by NC REALTORS® each year, which may make attainment challenging. Visit nar.realtor to learn more. Most consumers will hire REALTORS® based on personal recommendations not credentials, but this doesn’t negate the need for REALTORS® to seek specialization to make them better at their jobs. “Although there’s nothing negative about obtaining more education and designations, I don’t think it motivates consumers to select a broker,” commented Chandler. “It makes brokers better at their job. It’s not an instant value with additional income to your bottom line, but it may get you to the shortlist with a client or another broker.”
EDUCATION GAPS The fundamentals of buying and selling a house haven’t changed over the years. According to Chandler, what has changed is the “speed and depth of which we can do things that we haven’t done before.” Chandler explained that years ago when you obtained a salesman license, you went to work for a company with a structured training program. It was routine and standard— day in and day out, broker to broker. Brokers were in the office every day, all day. Today, technology has changed the way we work and allowed brokers to work remote. Brokers are able to work smarter and faster and do more with less. “The downside to this industry enhancement is that remote workers don’t get the value of knowledge share,” Chandler stated. While large firms have sophisticated training programs, smaller ones do not, and the consumer is the one that pays the price with a different experience being delivered from consumer to consumer. “The biggest gap today is that the continual learning from each other, which only happens from working closely with other REALTORS®, is lost in the new telework environment. Newer brokers can’t pick up on casual tips and ask for advice.” LOOKING AHEAD Brokers and Brokers-in-Charge need to keep an open mind to educational opportunities and be active participants in continual learning. There’s momentum at the state level and nationally to increase the minimum standards to obtain a real estate license “to better prepare licensees for what they will encounter and to understand they have a business,” Chandler said. While there are only a handful of dedicated real estate higher education programs in the country, there are opportunities everywhere to learn— from conferences to webinars to books to classes. “I treat education as a gift,” said Chandler. “I don’t know anything else that will be a better investment in yourself, your future and your career. Education is the most precious gift you can give yourself.” #
WHAT COMPANIES WANT BY: SETH PALMER
COMMUNITY IMPROVEMENTS IN THE FACE OF ECONOMIC OPPORTUNITIES
s North Carolina pushes closer to the 10 million population mark, communities across the state are dealing with the challenges and opportunities of growth. From former mill towns adapting to new industries to the state’s urban centers vieing to house the next headquarters of a multinational corporation, the horizon faces more opportunities than challenges. That is, of course, if we think proactively about the type of cities and towns we want to see in our state in the future. In many instances, economic development activities at the local and state level are seen as zero-sum games. Only one community or area can win a particular project. But, given the strong connections between communities, does that mean that only that community 14 INSIGHT • August 2018
will benefit? For projects of all sizes, it can be like a pebble thrown into a still pond that ripples outward, eventually covering the entire surface. But how can communities plan for these types of projects and ensure that they are designed to meet today’s needs? How can it do this without making it incongruent with the future characteristics of the area? And what role can REALTORS® play in ensuring that communities are ready for these investments?
TRANSPORTATION First among the qualities that anyone interested in a community, whether they are a business or individual, looks for is access. None of the other factors which make an area attractive matter if you can’t get there. In the modern world, that includes more than just roads and rails, but
also access to international flights and innovative peoplemoving technologies. Here is a real-world example: as companies like Apple or Amazon target the Research Triangle area, the need for additional transcontinental and international flights at Raleigh-Durham International Airport rises. With these companies’ operations based on the West Coast, as well as internationally, it’s necessary (or at least good) to have direct flights to locations like Los Angeles, San Francisco, Seattle, Brussels, and Beijing just to name a few. Many of these flights already exist, but others would require significant time and effort by local economic developers. While getting people from across the country and world, but how are they going to get around town once they are here. At the same time that innovations are being made on the airline front, there are also significant opportunities to improve technologies and move people within and between cities. Areas like Charlotte have brought light rail platforms to their cities, moving citizens and visitors alike along intra-city rail lines. This nuanced transportation platform is offered in many urban areas across the country and world but is not without its own challenges. Other communities have considered different options like bus rapid transit (BRT) systems and other express buses, all focused on moving people from point A to point B in a more expedient and efficient way. A great example of this was the 2016 Wake Transit Project, a ballot initiative focused on providing additional sales tax revenue to support future transit improvements. The Raleigh Regional Association
of REALTORS® advocated this proposal and received financial support from both the NC REALTORS® and NAR Issues Mobilization Committees. While the mode of transportation may change in the future (#flyingcars?), the challenges posed by population growth on infrastructure still remain. Economic development activities will only add to the burden and companies will have to discuss how the existing system will work (or not) before breaking ground on a project.
HOUSING Throughout the state, the need for housing is on the rise across the majority of price points. The lack of available inventory is under the most pressure below the median sales price, further limiting the access to housing for workforce participants like blue collar and service industry staff who support the very industries who are being recruited. Inventory issues, compounded with affordability challenges, place a significant burden on these areas especially as economic recruitment efforts move forward. It is important that a potential company knows how much housing is or could be available so that they can effectively structure their workforce projections. Too little housing may mean a reduction in projections for employment or another area rising higher on the consideration list. Communities across North Carolina are each dealing with this in different ways. Former mill towns, still recovering from the economic downturn, have housing stock, but not enough to meet the needs of current buyers. For example,
communities in Burke County have new economic opportunities from projects like the western campus of the North Carolina School of Science and Math and future utilization of the former Broughton Hospital, but face challenges from the available housing stock. To combat these challenges, county and municipal leaders joined with the business community and the Burke County Association of REALTORS® to develop a study understanding the area’s housing needs and opportunities. Supported by a Housing Opportunity grant from the National Association of REALTORS®, this study looks to provide actionable insight for community leaders as they work to combat access issues. While we all know that the biggest cure-all for housing challenges is more housing, it is important that communities think strategically about the types of housing options and if they will meet the needs of their current and future workforce. This is a key area for REALTORS® to be involved in, as you are the experts on which properties are best suited for the marketplace and how to best attract buyers.
LAND USE PLANNING Regulations addressing how land can be used to both support residential and commercial use of properties are a regular topic of discussion at the municipal and county level. Some areas have modified their Unified Development Ordinances to create new allowances for new types of business and other uses. In many cases, these allowances are made for positive reasons, but other times actions are taken which hinder growth or limit certain types of businesses or types of residential property. These types of restrictions are too numerous to list in this one article, but they are important areas to monitor as they can have damaging effects on the opportunity for economic development.
NC REALTORS® AND ECONOMIC DEVELOPMENT For years before any formal structure was put in place, NC REALTORS® have been engaged in economic development activities across the state. From representing companies looking to acquire land or commercial space for projects to representing the
new workforce as they make their new homes in the state, NC REALTORS® have been an important part of the process. In 2016, thanks to a recognition from leadership, NC REALTORS® created its first economic development committee. Tasked with assisting in the growth of the association’s involvement in activities across the state, the committee deepens engagement with domestic and international partners and develops resources for REALTORS® and local associations. One of those resources is the NC REALTORS® Economic Development and Real Estate Resource Guide which was unveiled last fall during NC REALTORS® annual convention in Asheville. The guide provides a listing of statewide resources and success stories, gleaned from relationships with statewide partners. You can find this in the Action Center on ncrealtors. org under the “Economic Development” section.
WHERE DO WE GO FROM HERE? For good and bad reasons, it is unclear exactly what our next step should be. Economic development opportunities are put on the table each and every day that have variable timelines. From a familyowned business looking to add five more employees to a multi-national corporation looking to build their next headquarters to house thousands of employees, North Carolina remains an attractive choice for business. Because of this, NC REALTORS® are in a unique position to provide valuable insight and support to the economic development activities by both government bodies and private entities. We will continue to develop resources to provide you up-to-date information on how you can be engaged. We will also share success stories of how others have played an important role in this process. Do you have a story of how you have supported an economic development project? Email Seth Palmer at email@example.com. #
ncrealtors.org • INSIGHT 15
September 15 – 18, 2018 | Wilmington Convention Center
SCHEDULE AT-A-GLANCE Saturday, Sept. 15 State of REal estate* 8am-4pm
sunday, Sept. 16 Committee Meetings 8am-4:30pm General Membership Meeting 11am-12pm Association Awards & keynote 4:30-6:30pm After party 6:30-9pm NC REALTORS® PAC Trivia & Live Auction 9-11pm
monday, Sept. 17 Education Sessions 8am-5pm Expo 12-5pm EXPO lunch 12-2pm INAUGURAL INSTALLATION* 6:30-8:45pm club x dance party 9pm-12am
tuesday, Sept. 18 Treasurer's forum 8:30-9:30am REgional caucus meetings 9:30-10:15am Board of directors meeting 10:30am-12:30pm *Ticketed Event
16 INSIGHT • August 2018
The most highly anticipated real estate event of the year premiers in Wilmington, North Carolina next month with red carpet events, Oscar-style award programs, VIP experiences, TEDx and XPLODE-style content and first and only statewide State of Real Estate event. Forget everything you thought you knew about NC REALTORS®’ signature, annual event. We’ve flipped the script and rewritten all the lines. It’s your new, unconventional convention where you take center stage. It’s no longer about selling. It’s about solving. Never before has your influence been so great, your reach so immense, your voice so powerful, your impact so pronounced. XCHANGE ’18 is the only event where you will receive (and create) real-time value with instant gratification. Brace yourself for the role of your life. At XCHANGE ’18, you’re the leading actor of your own story.
“NC REALTORS® is thrilled to bring the annual Convention & Expo to Wilmington in 2018,” stated Andrea Bushnell, Esq., CEO. “We have thousands of REALTORS® in the coastal areas of North Carolina, and it will be great to bring the event closer to them, while attracting hundreds of other members from around the state to the beautiful eastern North Carolina coast. We aspire to reach and serve members where they are based, and the Convention is just one of many tools NC REALTORS® uses to do so.”
REGISTER ONLINE | XCHANGE18.COM
ONE MISSION. ONE GOAL. ONE TEAM. Hold onto your seats as Vernice Armour, aka Flygirl and America’s first African American female combat fighter pilot, delivers a powerful address you won’t want to miss. As her “wingmen” for the day, learn how her bird’s eye view of the world provided her with clarity and the power to engage life head-on, blazing trails in the process and how you can apply these strategies in your own life and business.
Vernice “Flygirl” Armour
EDUCATION LINEUP XCHANGE ’18 brings together a featured cast of 16 industry experts ready to deliver thought-provoking, inspirational and actionable sessions in a variety of styles. You won’t sit and stare at a talking head for hours. Instead, work side-by-side with session leaders to address your business needs and challenges, interact with your peers to solve industry and social problems and perfect your professional skills. There’s a mix of quick how-to sessions, more in-depth workshops and specialty areas of interest for commercial brokers, property managers, BICs and AEs. There’s definitely something for everyone, and you will find great value in this new education format.
• Commercial Education • Property Management • Brokers-In-Charge • Association Executives
• Marketing • Business Planning
• Run Your Business • Manage Technology • Avoid the Brown Envelope
expert consultations • Legal • Technology • Marketing
WIN VIP PASSES Get treated like Hollywood royalty at XCHANGE '18, and be entered to win the Grand Prize trip to Hollywood, California. There are two more chances to win between now and show time. xchange18.com/vip-passes.
CELEBRATE ASA FLEMING
New presidential inaugurations are great moments in a company’s history. Join us to celebrate our 2019 president Asa Fleming and incoming leadership. monday, Sept. 17, 6:30pm*
PLUS Club X Dance Party champagne & Popcorn Parties NC REALTORS® PAC TriviA, Live and Silent AUctions 70+ EXHIBITORS REd-Carpet Receptions Oscar-Style Awards
Mark Saunders ncrealtors.org • INSIGHT 17
Make Your mark On real estate in NC stateofre.xchange18.com Saturday, September 15, 2018 Wilmington Convention Center Sponsored by
Vivian Howard Discover her recipe of success for community, economic and personal vitality.
LAWRENCE YUN NAR
TED ABERNATHY Economic Leadership
NAPOLEON WALLACE Department of Commerce
North Carolina’s only statewide State of Real Estate forum premiers September 15, 2018, in Wilmington NC, at the Wilmington Convention Center. The day-long event is comprised of an influencer panel, hands-on workshops, lunch and tours and is hosted by NC REALTORS® during XCHANGE ’18. Bringing together public and private sectors, REALTORS® and consumers, influencers and regulators, and visionaries and implementers, the forum is designed to solve current statewide issues and challenges that impact different areas of real estate and economic development, such as smart growth, affordable housing, disaster planning, and more.
PANELS State of The Market State of Housing State of Communities
TOURS PATRICK WOODIE NC Rural Center
SCOTT FARMER North Carolina Housing Finance Agency
STEVE YOST North Carolina Economic Development Association
Register at stateofRE.xchange.com STATE OF REAL ESTATE ONLY – $59 ADD TO XCHANGE '18– $39 18 INSIGHT • August 2018
Port of Wilmington Hollywood Location Walk South Front District Walkable Communities
WORKSHOPS State of Economic Development Community Resilience State of Housing
With the right execution, lawns can do what they’re designed to do—add value to the property they surround. BY: TRACEY GOULD
MAINTAIN YOUR WAY TO A
Great Lawn 20 INSIGHT • August 2018
Some lawns are earned—not made. And they’re hard work, but they don’t have to be. There’s something to be said about immaculately maintained yards. There’s a lot to be said, in fact. The most talked about landscapes aren’t always the ones masterfully designed by landscape architects with dozens of different plants, trees and flowers. They aren’t necessarily the ones with water features, benches and built-in gardens. Sometimes the most celebrated landscapes are simple and simply maintained. Neal Beasley, PLA, Landscape Architect and Horticultural Specialist with Timmons Group with Timmons Group, suggests that anyone can have a great lawn by simply maintaining what they have—especially before investing in something new. Regular maintenance is a lot easier and more economical than starting anew. With the right execution, lawns can do what they’re designed to do—add value to the property they surround, while elevating the site experience for owners, occupants, and visitors. Many owners believe that landscaping is installed and self-sufficient, with the exception of some watering, and because of this, they don't touch it for years. Then, they’re surprised at how much it costs to overhaul it to be presentable when they want to sell it, for instance. Here are some short term strategies that will not only make landscaping plush, beautiful and healthy, but will demonstrate to everyone that the property is well-cared for, which potential buyers want to know if ever owners want to sell. Even better, a wellmaintained landscape will provide immense joy for the occupants for years. ASSESSMENT Evaluate your current maintenance regimen, landscape assets and physical property assets to identify opportunities to dress up your property, especially the entrance. Often, a property’s entrance is the first impression, as people arrive to the office building, campus, neighborhood, retail center or home. Are there driveways? Trees? Grassy curb areas? Grand entry features? All of these physical features built into the property and landscape naturally have opportunities for landscape design and maintenance needs. What does your entry say about you? Your organization? Your brand? DISEASE Regular maintenance can help deter disease from taking over plantings. Incorporating native plants can also help ward off these issues. Beasley and Timmons Group is seeing a lot of pest and disease hitting commercial landscape areas in recent years. By infilling with native plants and cultivars,
maintenance needs and costs long-term are diminished. They are more adaptive to our climate. FILLER For new developments, especially large-scale commercial developments with immense open spaces and plantings around the foundations, seasonal color can fill voids. Simple seasonal filler plantings also add color, interest and texture. It’s a one-time planting that, as they grow and fill in, enable the voids to become less noticeable. They are planted one time to get through a season and then, going forward, you decide to plant them again based on the fullness. During this time, all the plants are growing, eventually reaching maturity and filling in to the desired level. This makes landscaping look fuller, while permanent plants are rooting in and sizing and growing. IRRIGATION Water is the most important nutrient for plants— just like people. Properties that are irrigated look healthier because they are. Beasley discourages all property owners from neglecting irrigation. At the same time, be cautious not to waste money. If needed, hire someone to maintain the irrigation system for efficiency and performance. Spring time is the time to be looking at the irrigation systems. MULCHING Adding fresh mulching several times a year—around trees, flower beds and bushes—gives lawns a fresh look with minimal investment, while protecting the plant’s roots. Mulch has many benefits, including preventing loss of water, reducing weed growth, keeping soil cooler in the summer and warmer in the winter, preventing soil splashing, and protecting plants from soil-borne diseases. Mulched plants will even produce more roots than non-mulched plants. PRUNING A lot of owners don’t realize that trees, for example, require maintenance after planting; yet, trees are our biggest investment. This is where most of the expenses occur during landscaping installation. Often, localities require trees to be planted with new developments. Developers oblige, but then new owners or property managers assume mother nature takes over from there. Years two through 10 of a tree’s life is the prime time for structural tree pruning. Trees need training to teach them how to grow. Arborists can make strategic pruning decisions to help the tree live 10 years longer. Without this, trees cannot grow to their full potential, and the planet doesn’t reap from all of the inherent benefits, “We need to promote the fact that we need trees to survive. They need to be a priority,” said Beasley. # ncrealtors.org • INSIGHT 21
The Tax Cut and Jobs Act of 2017 could affect your current tax liability and your future retirement. Here's how. BY: JIM HIZA AND MARY READ
SHOULD YOU BE FEELING GOOD OR BAD ABOUT THE NEW TAX ACT? Everyone is trying to figure out how the new Tax Act affects them. As a real estate professional, you experience the benefits and burdens of being an independent contractor. It’s up to you to not only earn money to support your lifestyle but to set aside money from your commissions to pay for expenses, taxes and to fund your future retirement. Have you determined whether your tax bill will go up or down? Your current tax liability and your future retirement are two costs you need to plan for. THE TAX CUT AND JOBS ACT OF 2017 Section 199A pf The Tax Cut and Jobs Act of 2017 provides a brand new 20 percent deduction of qualified business income for certain pass-through businesses. Pass-through entities include: • Sole proprietorships (no entity, Schedule C) • Real estate investors (no entity, Schedule E • Disregarded entities (single member LLCs • Multi-member LLCs • Any entity taxed as an S corporation • Trusts and estates, REITs and qualified cooperatives 22 INSIGHT • August 2018
However, personal service businesses lose this deduction when their taxable income exceeds the following thresholds: • $157,500; phased out by $207,500 for single tax payers • $315,000; phased out by $415,000 for married filing joint payers. Section 199A service businesses include the following: • Real Estate Professionals • CPAs • Attorneys • Athletes • Financial Advisors • Doctors and Dentists • Consultants • Performing Arts When income exceeds the phase-out threshold the deduction provided by a large qualified plan contribution can bring taxable income below the phase-out threshold regaining the 20 percent deduction in addition to the deduction for the qualified plan contribution.
ABOUT THE AUTHORS
Mark and Cindy, a married REALTOR® team, are both 60 years old and making $600,000 in combined net commission income. They file their tax return as married, joint.
Mark & Cindy Both Age 60, Married Joint Federal Tax Bracket Mark & Cindy Taxable Income
Jim Hiza, CPA educates real estate professionals, CPAs, small business owners and estate planning attorneys on how to utilize the Tax Code to meaningfully reduce current tax liability and accumulate wealth. He has more than 20 years of financial planning and investment management experience working with families and business owners.
Fully Insured 412(e)(3) Plan Deduction Net Mark & Cindy Income
199A 20% Deduction
Net Taxable Realtor Income
Tax Savings to Age 65 (5 Years)
Guaranteed* Annual Pension Income
Guaranteed* Pension Lump Sum
$2,068,140 Mary Read CPC, QPA, CPFA is National Director of Pension and Protection Planning at Pentegra Retirement Services and partner of M&R Business Development Group. A leading authority in qualified retirement plans with more than 30 years experience, she has an extensive background in plan design and development.
• Mark and his wife can contribute $405,000 to a Fully Insured 412(e)(3) Plan • Mark and Cindy get a full deduction for the $405,000 Fully Insured 412(e)(3) Plan contribution and will also qualify for an additional Section 199A deduction of $39,000. • Contributing to the Fully Insured 412(e)(3) Plan contribution reduces their current tax liability by $175,680 • Tax savings add up to $878,400 by the time Mark & Cindy turn 65 • Mark and Cindy will be able to retire at age 65 with a combined pension income of $170,908 per year and will have lump sum balances totaling $2,068,240.
412(e)(3) Plan vs. No Plan
No 412(e)(3) Plan With 412(e)(3) Plan
Lost Income Taxes to Age 65 (5 years) Guaranteed* 412(e)(3) Plan Balance at Age 65 * Guarantees dependent upon the claims-paying ability of the issuing company. This example is for illustration purposes only. Please consult with your CPA to calculate your tax savings.
For Mark and Cindy, the decision to implement a Fully THINK ABOUT YOUR SITUATION: Insured 412(e)(3) Plan or not is a $2,946,540 decision! They • Will you keep your 20 percent deduction? can either pay $878,400 in taxes over the next 5 years, or they • Do you want to meaningfully reduce your current tax could save $2,068,140 in their Fully Insured 412(e)(3) Plan. liability? The adoption of a Fully Insured 412(e)(3) Plan meaningfully • Do you want the IRS to help you accumulate assets for your reduces the estimated current tax liability and brings their taxable retirement? income below the new 199A deduction threshold limits regaining • Would you like a secure pension income with peace of mind? the 20 percent deduction. The Fully Insured 412(e)(3) Plan also created significant pension income without market risk. Contact firstname.lastname@example.org for more info. ncrealtors.org • INSIGHT 23
STUCK IN THE MIDDLE? A song, a TV show, but no way to deal with NPPI. BY ROGER BERNHOLZ
24 INSIGHT • August 2018
y now we should all be aware that aggressive criminals around the world are using the internet to steal money and identities through a variety of nefarious schemes. Brokers in North Carolina have seen their buyer and seller clients lose hundreds of thousands of dollars—fraudulently stolen and never recovered! Imagine if you were implicated in such a disaster. Because our business has become so tied to digital communication, be it email, social media, CRM, online marketing, data mining, etc., we have become easy targets for these criminals. Phishing, spoofing, cracking, man-inthe-middle, spear phishing, sniffing and a host of other social engineering techniques with funny names and too numerous to describe are often aimed at REALTORS® who are easily spotted online. Our business almost always involves transactions where very large and very attractive sums of money are changing hands, often through digital funds transfers, because that has been viewed as faster and more reliable for assured receipt of “good funds.” On top of that, as we guide our clients through the contract and closing process, a good deal of their personal and confidential information is collected. Indeed, buyer and seller information sheets, like Standard Form 9-T from NC REALTORS® or similar forms from attorneys, are replete with what has come to be called NPPI,
non-public personal information. And REALTORS® have traditionally been the conduit through which that information has flowed between the parties to the transaction and the closing attorney. This combination is obviously a very dangerous one, ripe for the criminals to steal our clients NPPI and, more importantly, their money. Attorneys already have been pushed into adopting a long list of expensive “Best Practices” to satisfy mortgage lender requirements in order to protect NPPI and the confidentiality of these transactions. This, by necessity, must be a coordinated effort among REALTORS®, closing attorneys, mortgage lenders and other important players in our transactions. We must work hard and make changes to stop this attack on our clients and us. Here are some of the steps REALTORS® can take to address this huge problem.
Roger Bernholz is Vice President and General Counsel at Coldwell Banker Howard Perry and Walston in the Triangle. He assists the company’s brokers and agents when thorny issues arise and keeps them informed about important industry and regulatory changes. He has volunteered on the NC REALTORS® Forms Committee and the Joint Forms Task Force for more than 20 years.
USE MULTI-FACTOR AUTHENTICATION Set up and only use an email system that provides “multi-factor authentication.” This makes it much harder for a criminal to obtain access to your email account by phishing for your credentials and logging into your email account, monitoring the progress of your transaction, obtaining the contacts for all the other players in the transaction and sending messages that look for all intents and purposes like they are from you. Also, be very cautious about any email you receive that asks you to provide any form of login credentials in order to see an “important document”, particularly when unexpected. These are very often fraudulent.
ONLY USE RELIABLE CONTACT INFORMATION Provide your client with your card and the business card of the closing attorney when possible so they have reliable contact information. Avoid using email to transmit such information that could be easily intercepted and modified.
GET OUT OF THE MIDDLE. When sensitive information is being exchanged, REALTORS® need to stay out of the way, when possible. The process of transmitting the information sheet, instructions for digital funds transfer or other documents containing NPPI, should remain between the client and the attorney only. This will ensure that an encrypted email service or secure online portal is being used and provided by the lawyers. Although much less likely, this also helps keep the finger of blame and liability from being pointed at REALTORS® should a problem arise.
WRITTEN WARNING. Review with your clients the “Wire Fraud Warning,” added to the Offer to Purchase and Contract, and the listing and buyer agency agreements that instruct them on the best way to protect their money. Encourage them to follow the various recommendations contained in those documents because they do work in protecting parties and agents involved. We’ve received numerous notes of appreciation for the “warning” received in situations where schemes were discovered and crooks were thwarted.
FACE-TO FACE INTERACTIONS ARE BEST Encourage and support the direct, face-to-face interaction between each party to the transaction and the closing attorney’s staff, where identities can be verified and written and signed directions about transfer of money can be exchanged. Notarized written instructions can also work.
STRONG PASSWORDS Use strong passwords for online activities and change them regularly. A key element of wire scams is the hacker’s ability to research and monitor email accounts for lengthy periods of time. Changing passwords regularly may deny access to hackers before the opportunity to strike appears. # ncrealtors.org • INSIGHT 25
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For more information, scan the QR code, visit ncrealtors.org/save or contact Maurice Brown at email@example.com
A different approach is needed to gain maximum return on earned media efforts. BY: TRACEY GOULD AND SHANE JOHNSON
ore newspapers have folded in the past decade than pleats in MC Hammer’s pants. Traditional aka “earned” media has taken a nosedive with the emergence of social aka “self” media. Its importance, however, remains strong, as traditional media continues to be a more trusted source for the public compared to social media, despite the “fake news” issue that abounds. This makes it a helpful, yet often forgotten, tool for association brand building. “In the past decade, we paid less and less attention to securing earned media because the ‘shiny new penny’ that caught the cooperative eye of associations, specifically social media, was on the rise,” said Patrick LaJeunesse, director of marketing & communications for Cape Fear REALTORS®. “Both print and broadcast went out of vogue, as their audiences dried up.” Cape Fear REALTORS® (CFR) reversed this approach in 2014 with the advent of Core Standards and the need to broaden branding efforts with homeowners. “No one was paying attention to traditional media,” said LaJeunesse. “This increased the opportunity to land stories when we reengaged with reporters and editors. They were starving for good articles, quotes and leads.” While circulation for U.S. daily newspapers declined from 62.5 million in 1986 to 34.7 million in 2016, on-staff writers have jumped ship to other writing jobs, and the few remaining are eager to find solid contacts that can provide well-written stories and information to build outlet relevance.
Given the new playing field, a different approach is needed to gain maximum return on earned media efforts. Poorly written press releases emailed to general inboxes will gain little traction. Remember, traditional media staff have been cut to the quick. Here are combined strategies that several REALTOR® associations have used to successfully increase earned media placement:
Assignment editors, field reporters and camera operators respond to personal connections. A favorable impression of you or your organization is the threshold requirement leading to earned stories. NC REALTORS® staff meets with key media outlet contacts annually for coffee or lunch to build rapport. This is enhanced with periodic phone calls ahead of a planned event or activity to provide a heads-up, so they are aware of future story possibilities. When a media contact attends an event or engages NC REALTORS®, staff makes personal contact, asking if they need anything and making them feel welcome. Both communications and advocacy staff maintain a contact list of media that is updated often and subscribe to a major media database platform. This ensures the appropriate parties receive NC REALTORS® press releases and are notified of activities. "We also work hard to be seen as a resource," said Kim McMillan, vice president of marketing & communications for the Charlotte Regional REALTOR® Association (CRRA), who makes an effort to provide reporters names of trusted resources outside of her association. "Even though the coverage may not include us, we like being able to provide other trusted sources, like the director of the apartment association or the spokesperson for the homebuilders. This shows the reporter you’re not only knowledgeable about other aspects of 28 INSIGHT • August 2018
housing and willing to educate, but you’re supportive. Plus, reporters will then be more apt to listen and respond to pitches for other stories."
The news cycle today is almost instantaneous. Delays result in one thing: no coverage. CFR has taken two steps to being nimbler in response to the media. First, the association’s spokesperson policy allows either the president, CEO or their designees to act as spokesperson. This provides flexibility in responding faster to several options available. Second, “quick quotes” are used, often with breaking stories, successfully allowing the organization to be quoted in a story on the presses. “Often, we will hear about a story being written, and rather than becoming bogged down with the formality of a full press release, we will send a one or two sentence quote in response to the issue, directly to a reporter’s email account,” said LaJeunesse. Last spring, a well-known expert announced his retirement, and
anticipating the daily newspaper would be writing a story, CFR sent a quick quote immediately to the reporter on the story. “Our quote from the CEO was included in the final story verbatim because it was appropriate, submitted while the writer was at her keyboard and because we have a good connection with the paper,” said LaJeunesse. “If we’d waited for the president, who is a busy guy, to respond directly or approve a quote, we’d have missed the opportunity.” There’s absolutely no reason to wait for a reporter to reach out to you for comment or for you to hear about a story on the street before you craft a media response, either. Pitching story ideas to the media carries a lot of weight with impact; yet, pitching to the media is an art form. Be sure to target the right story to the right publication and to the correct reporter. Also, in your verbal or written pitch, clearly state why the content (story) matters to their audience (readers). Include as much high-level information with a compelling point, statistic or quote to get the reporter’s attention, as well as a multimedia
There’s absolutely no reason to wait for a reporter to reach out to you for comment or for you to hear about a story on the street before you craft a media response.
DON'T FORGET THE PHOTO OP When it comes to earned media, all opportunities should be well thought-out, even down to the photo op. When CRRA pitched a Q&A with 2018 Association/CarolinaMLS President Jason Gentry to the Charlotte Business Journal back in January, they worked to have the interview at a location that prominently featured their new headquarters in the background. Photos of the construction helped create additional buzz and future story ideas. element. If you have a photo, infographic or video, your email has a higher likelihood of being opened, and likewise, your story has a higher likelihood of being covered.
Press releases continue to be a useful vehicle for communicating with the media, but they need to be well-written. The remaining staff at traditional media outlets are overworked and the less editing required results in a higher chance of being published. As issues form locally, write a release at the head of the curve, so you can submit quickly at the right time. “With the Governmental Affairs and Marketing Communications departments
collaborating so closely, we proactively respond to issues and send releases at the cusp of a developing story,” said Seth Palmer, political communications and regulatory affairs director for NC REALTORS®. Local associations can also weigh in on state or national issues, if they are in line with the state or national association, and include information on the issue with local perspective to make it relevant to area readers. It's also important to be consistent. CRRA averages 25 interviews per year by sticking with a consistent approach to the way they release housing activity each month. "One of the ways we show our consistency is by releasing housing activity each month and incorporating a meaningful quote." said McMillan.
"This quote perhaps leaves a positive impression, but it also acknowledges any challenges that could be occurring." With a proactive media relations strategy in place, the reach and results can be invaluable to the REALTOR® brand and association as a whole. In 2013, CFR had 19 earned media stories or broadcast mentions, not counting leadership changes or MLS stats. In 2017, it grew 400 percent to 81 media mentions. If you have a plan, are committed and stick with it, you’ll undoubtedly see similar results within your own association or business. # Shane Johnson, JD, CAE, is president and CEO of the San Antonio Board of REALTORS®. Tracey Gould, M.S. IMC, CPSM , is vice president of marketing and communications for NC REALTORS®.
ncrealtors.org • INSIGHT 29
THURSDAY, NOVEMBER 8, 2018 8:00 am – 3:00 pm
SHERATON CHARLOTTE HOTEL 555 South McDowell Street, Charlotte, NC 28204 Find your spark at NC REALTORS®’ first women’s conference.
2018 NAR President Lunch Speaker
This day-long event will inspire, encourage, and empower you
MORE SPEAKERS COMING SOON!
through high-level content delivered by high-caliber speakers
and successful female role models from all walks of life.
for more information.
30 INSIGHT • August 2018
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A beautiful mobile-responsive website and blog Lead-generating IDX search built into the site Automated SEO for better search engine rankings E-mail marketing to nurture all your contacts Landing pages with pre-written eBooks to capture leads Social media tools with provided content Analytics to see how your marketing is performing For brokers - Auto lead management, routing, & accountability $55/month for NCAR agents, or $159/month for brokers
PipelineROI.com/ncar718 866-300-1550 info@PipelineROI.com
Plus one-time setup fee. Pipeline ROI and its products are trademarks or registered trademarks of Pipeline ROI. Other brand and product names are trademarks or registered trademarks of their respective owners. All prices, terms, policies, and other items are subject to change without notice. Copyright ©2018 Pipeline ROI.
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Insightful and practical content for NC REALTORS® including epic business tactics, informed legal and legislative analysis, relevant industr...
Published on Aug 1, 2018
Insightful and practical content for NC REALTORS® including epic business tactics, informed legal and legislative analysis, relevant industr...