Insight | August 2023

VOTE! NC REALTORS® Elections: Contested Races and Exciting Choices

THE VOICE OF REAL ESTATE IN NORTH CAROLINA

VOL 102 NO 3 | AUGUST 2023

2023 FORMS CHANGES Top 10 Residential Forms Changes Revealed

Plus:

+ A Day in the Life of Mortgage Lenders + Mastering the Art of Listening

OCTOBER 16 – 19 SAVANNAH, GA

r4rconference.com

Yes, our culture does make a difference.

You’ll never feel alone when you are with Weichert®. We believe a

positive, encouraging environment is key to success. You’ll be plugged into a skilled team who wants to see you succeed and motivate you to be your best. You’ll be recognized for your achievements with annual awards. You’ll get up-to-date information, weekly webinars, in-person workshops, and Weichert University support to help you grow. Don’t settle for good enough. Go for great. Give your local Weichert office a call today or visit jobs.Weichert.com Each Weichert® franchised office is independently owned and operated. ©2021 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.

August 2023 Features 5 NC REALTORS® Gives Back

Members had boundless opportunities to make a tangible difference in the lives of their communities.

12 2023 Forms Changes

Top 10 Residential Forms Changes Revealed.

17 Decoding the Top AI Cybersecurity Risks

Five of the most crucial cyber threats impacting real estate professionals today.

20 Mastering the Art of Listening

5

Effective listening enables real estate agents to boost business and minimizing miscommunication with clients.

24 A Day in the Life of Mortgage Lenders

Two experienced loan officers share insights into the lending world and their experiences within it.

12

17

4 President's Letter 5 NC REALTORS® Elections: August 21-24 10 Region 4 REALTORS® Conference Power Up Your Real Estate Journey

TALK TO US

24

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

Insight, Volume 102, Issue 3 President Leigh Brown, ABR®, AHWD, C2EX, CIPS, CLHMS, CRS, e-PRO®, SFR®, SRES®

Treasurer Laurie Knudsen, C2EX, GRI

President-Elect Tony Harrington, ABR®, ALHS, AHWD, C2EX, CIPS, CLHMS, CRS, GREEN, PSA

Immediate Past President Wendy Harris, ABR®, AHWD, C2EX, CIPS, CRS, e-PRO®, GRI, PSA, SRES®, MRP, WHS

Regional Vice Presidents Region 1: Adam Upchurch, Topsail Island Region 2: Brooke Rudd-Gaglie, Oak Island Region 3: Laurie Linder, Fayetteville Region 4: Wallace Peiffer, Creedmoor Region 5: Ray Alexander, Greensboro Region 6: Paul McGill, Winston-Salem Region 7: Carol Bradley, Monroe Region 8: Edward Baesel, Charlotte Region 8: Aric Beals, Charlotte Region 9: David Noyes, Arden Region 10: Lewis Grubbs, Raleigh Region 10: Leslie Williams, Youngsville At Large Representative: Dennis Bailey, Shelby Chief Executive Officer Andrea Bushnell, Esq., AHWD, CIPS, RCE Vice President of Communications & Marketing Mckenzie Allen, AHWD, C2EX Content Marketing Coordinator Lia Ross, C2EX Multimedia Coordinator/Staff Photographer Doug Klesch Contributors Tracey Hawkins, Lee Nelson, John Wait For advertising information, visit ncrealtors.org/advertise 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 hello@ncrealtors.org with a subject line of “Insight opt-out.”

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

Hello, NC REALTORS®!

I’m thrilled to introduce the August issue of Insight magazine, and let me tell you, it’s an absolute goldmine of valuable information for our REALTOR® community.

In this edition, we’ve got the inside scoop on the upcoming election to select the future leaders of NC REALTORS®. Plus, we’ve got some contested races this year. So, dust off your voting hats and get ready to choose some truly outstanding individuals to lead us in the years to come.

But that’s not all! We’re also diving deep into the world of AI and its potential impact on our beloved real estate industry. Don’t fret, though, because we’ve got your back with some savvy tips and tricks to keep you one step ahead of the game.

Don’t forget to mark your calendars for the Region 4 REALTORS® Conference in Savannah this October! It’s shaping up to be an absolute blast, and I can’t wait to see each and every one of y’all there.

As we gear up for the next quarter, I couldn’t be more thrilled to continue leading alongside you through this wild ride of a real estate market. Together, we have the power to open doors of homeownership for North Carolinians like nobody’s business.

Leigh Brown, 2023 NC REALTORS® President

NC REALTORS® Give Back unites local associations and their members for impactful housing-related service projects in their regions. Born in June 2019 under the NC REALTORS® William C. Bass Leadership Academy, this annual endeavor now thrives under the management of the NC REALTORS® Housing Foundation—a testament to our commitment to housing opportunities.

In 2023, our dedicated REALTORS® from across the state took action and embraced NAR’s REALTOR® Volunteer Days from June 3 – 12. With an entire week devoted to volunteering, our members had boundless opportunities to make a tangible difference in the lives of their neighbors and strengthen the communities they love.

Burke County Board of REALTORS®

Salisbury/Rowan Association of REALTORS®

Gaston Association of REALTORS®

Jacksonville Board of REALTORS®

ncrealtors.org • INSIGHT 5

Greensboro Regional REALTORS® Association

High Point Regional Association of REALTORS®

Land of the Sky Association of REALTORS®

Mountain Lakes Board of REALTORS®

Raleigh Regional Association of REALTORS®

Neuse River Regional Association of REALTORS®

6 INSIGHT • August 2023

For more information on NC REALTORS® Gives Back scan the QR code or visit ncrealtorshf.org/GivesBack.

Golf & Give

2023 NC REALTORS® Housing Foundation Golf Tournament September 18, 2023 Longleaf Golf & Family Club ncrealtorshf.org/golf

The NC REALTORS® Housing Foundation, a charitable foundation, invites you to join us for a golf tournament.

Proceeds from this tournament will benefit the Housing Foundation’s 100 Homes for 100 Counties initiative.

Reception: Sunday, September 17, 2023, 5:30 PM – 8:00 PM Pinehurst Resort (Outlook Ballroom and Veranda Room) 80 Carolina Vista Dr, Pinehurst, NC 28374 Golf Tournament: Monday, September 18, 2023 Longleaf Golf & Family Club 10 N. Knoll Road, Southern Pines, NC 28387 Rates: Team of Four – $600, Individual – $150 Driving Range Open: 7:30 AM Registration Open: 8:30 AM Shotgun Start: 10:00 AM Lunch: 11:30 AM – 4:00 PM (Box Lunch pick up or drop off) Awards Ceremony: Immediately following the tournament. Cash prizes awarded for: • 1st, 2nd and 3rd place teams • Longest Drive • Closest to the Pin CONTACT Kentia Smith | Housing Foundation Director

ksmith@ncrealtors.org

336.217.1043

2023 ELECTION INFORMATION PRESIDENT-ELECT

AT-LARGE NAR DIRECTOR

REGIONAL VICE PRESIDENT

(Vote for one candidate)

(Number to be elected determined after July 31)

(Vote for one candidate in each region)

Laurie Knudsen GRI

Kim Dawson ABR, C2EX, CIPS, CRS, GRI

Canopy REALTOR® Association

Durham Regional Association of REALTORS®

John McPherson ABR, AHWD, C2EX, CRS, ePRO, GREEN, GRI Winston-Salem Regional Association of REALTORS®

Leslie Williams ABR, AHWD, C2EX, CIPS, CRS, PSA, SFR, MBA, WHS Raleigh Regional Association of REALTORS®

Treasure Faircloth C2EX, CRS, ePRO, GRI Winston-Salem Regional Association of REALTORS®

Asa Fleming AHWD, C2EX, MRE, SFR Raleigh Regional Association of REALTORS®

Tony Smith ABR, ABRM, CRS, GRI

TREASURER (Vote for one candidate)

Renee Cooney ABR, AHWD, C2EX, GRI, RENE, SRES, WHS Carolina Smokies Association of REALTORS®

Canopy REALTOR® Association

Myra Zollinger AHWD, CRS, C2EX, GRI Raleigh Regional Association of REALTORS®

David Zeitz AHWD, GRI

SMALL ASSOCIATION NAR DIRECTOR (Vote for one candidate)

Adam Upchurch AHWD, C2EX, CIPS, SPS Topsail Island Association of REALTORS®

Longleaf Pine REALTORS®

MEDIUM ASSOCIATION NAR DIRECTOR (Vote for one candidate)

ISSUES MOBILIZATION COMMITTEE (Vote for one candidate)

Brett Bushnell AHWD Raleigh Regional Association of REALTORS®

Christina Asbury ALC, ABR, C2EX, CRS, GRI, MRP, SFR Jacksonville Board of REALTORS®

Jonathan Fletcher Durham Regional Association of REALTORS®

8 INSIGHT • August 2023

REGION 2 Amanda Parmer ABR, CDPE, C2EX, Green, SFR Cape Fear REALTORS®

REGION 4 Cindie Burns Durham Regional Association of REALTORS®

REGION 5 Pamela Webb AHWD, C2EX, GRI

REGION 7 Dennis Bailey C2EX, CRS, CCIM, ePRO, GRI, PSA Cleveland County Association of REALTORS®

FINANCE COMMITTEE

Canopy REALTOR® Association

Jacksonville Board of REALTORS®

High Point Regional Association of REALTORS®

(Vote for two candidates)

Michael Wong MRP, SPS

REGION 1 Kimberly Perkins AHWD, C2EX, ePRO

REGION 8 Josh Tucker Canopy REALTOR® Association

REGION 7 Tim McBrayer AHWD, ABR, CAPS, CGP, CIPS, CLHMS, CMP, CRS, EcoBroker, ePRO, GREEN, GRI, MIRM, MRP, SFR, SRES; Home Builders – CAPS, CGP, CMP, MIRM Raleigh Regional Association of REALTORS®

The NC REALTORS® elections voting will take place online August 21 – August 24, 2023. These candidates have been certified by the NC REALTORS® Certifying/Recruiting Committee. Visit ncrealtors.org/elections for detailed candidate bios, voting rules and to vote.

JOHN MCPHERSON FOR NC REALTORS® President-Elect 2024

ELEVATE ADVOCATE AUGUST 21-24 COMMUNICATE I would appreciate your support. Voting is

Want to know more?

PROUDLY ENDORSED BY:

Laurie Knudsen for 2024 NCREALTORS® President-elect

Vote for Laurie.

the Leader the Contributor the Mentor the Educator

Fiercely committed to the future.

laurieleads.com Endorsed by Canopy Realtor® Association

ncrealtors.org • INSIGHT 9

OCT. 16-19 // Savannah, GA r4rconference.com

Power Up Your Real Estate Journey Unleashing New Horizons at the Region 4 REALTORS® Conference Discover the Ultimate REALTOR® Experience

Embrace Innovation and The Future of Real Estate

Calling all real estate professionals seeking to elevate their careers and embrace the spirit of growth and empowerment!

The highly anticipated Region 4 REALTORS® Conference is ready to ignite your passion and propel you to new heights.

Together with REALTORS® from Kentucky, North Carolina, South Carolina and Tennessee, this dynamic event promises unforgettable moments, cutting-edge insights and boundless networking opportunities. Mark your calendars for powerpacked days of learning, collaborating and celebrating your journey as a real estate professional. Join us as we delve into the theme of “Power Up” and unlock the keys to success in the ever-evolving world of real estate.

As the real estate landscape continues to evolve, embracing innovation is key to staying ahead of the game. At the Region 4 REALTORS® Conference, we dive into the latest technological advancements that are reshaping the industry.

Discover how artificial intelligence is streamlining transactions and enhancing customer experiences. With a focus on forward-thinking solutions, this conference empowers you to embrace innovation and leverage it for your success.

Experience Empowerment through Knowledge Our carefully curated lineup of speakers and industry experts will inspire you with their wisdom and expertise.

Dive into engaging sessions that cover a wide range of topics, from mastering the art of negotiation and harnessing digital marketing strategies to tapping into the latest trends in real estate technology. Discover how to leverage AI to make informed decisions and uncover insights that will give you a competitive edge. Whether you’re a seasoned veteran or a rising star in the industry, there’s something for everyone at this conference.

Plug Into Your Potential Get ready for an electrifying experience at the Region 4 REALTORS® Conference as keynote speaker J.R. Martinez takes the stage to ignite your passion for success. As an acclaimed actor, motivational speaker, and military veteran, Martinez knows how to connect with audiences and inspire them to unleash their potential. In his captivating session, “Plugging into Your Potential,” he will share his personal journey of resilience and growth, leaving you empowered to harness your own potential and reach new heights in your real estate career.

Enjoy Savannah’s Southern Charm Beyond the enriching conference experience, Savannah, with its historic charm and coastal allure, provides the perfect backdrop for an unforgettable journey. Explore the cobbled streets lined with oak trees draped in Spanish moss, and indulge in delicious Southern cuisine that will leave your taste buds tingling. Take a stroll along the Savannah Riverfront, relishing the beauty of the sunset over the water. Immerse yourself in the city’s rich history by visiting the iconic Forsyth Park or touring its historic squares. Savannah’s enchanting ambiance will add a touch of magic to your conference adventure.

Join Us at the Region 4 REALTORS® Conference Are you ready to power up your real estate journey? Join us at the Region 4 REALTORS® Conference in Savannah, Georgia, and unlock the potential within you. This event is designed to inspire, educate and connect real estate professionals from across the region, creating an atmosphere of growth and empowerment. Don’t miss out on this extraordinary opportunity to gain fresh insights, build meaningful relationships and experience unforgettable moments in the heart of the South. Register now, and let’s power up together!

Forge Connections that Propel Your Career The power of networking is undeniable, and the Region 4 REALTORS® Conference provides the ideal platform to connect with like-minded professionals across the Southeast. Expand your circle of influence, exchange ideas and build valuable relationships that can open doors to new opportunities.

From interactive panels and breakout sessions to informal meet-and-greet events, every moment is an opportunity to forge connections that can lead to lasting partnerships and collaborations. Don’t miss the chance to exchange business cards, share success stories and power up your network.

REGISTER NOW!

r4rconference.com

legal Top 10 Residential Forms Changes in 2023

BY LEGAL JOHN (JOHN WAIT), GENERAL COUNSEL I spent months workshopping what my pen name might be for this Insight article. There were focus groups, teams of writers, and too many consultants to count. The Forms Guy has been a staple in this publication for years, and the pressure to get the branding just right to fill those shoes seemed impossible.

That was until, with no known premeditation, Brooke Rudd-Gaglie began calling me “Legal John” at the Winter Leadership Meetings in January.

The simplicity of the name was perfect, and I immediately fired my entire branding team. So no, I am not the Forms Guy. I am Legal John, and it is my privilege to take a minute and highlight ten big forms changes that just came out on July 1.

For those of you that may not know, these forms changes represent eight months of hard work by our Forms Committee members and NC REALTORS® staff. The chairs of the Forms Committee, Laurie Linder and Patrice Willetts, did an excellent job and worked very well with Bob Ramseur, chair of the Joint Forms Task Force. Leigh Morgan somehow kept me organized and made sure the train stayed on the track at the staff level.

I’d like to thank every REALTOR®, staff member, and NC Bar Association attorney who worked on these forms changes for their dedication and thoughtful contribution. I have always believed that the forms speak to REALTOR® values and should be a source of pride. As someone who works regularly with forms from other states, I have a deep appreciation for the years 12 INSIGHT • August 2023

of work that have made our forms what they are today, and I believe these most recent changes will continue to make our forms some of the best in the country.

So, without further ado, here are ten big forms changes for 2023.

1. New Governmental Compliance Paragraph in the Offer to Purchase and Contract (Form 2-T).

The parties may discover that the property does not comply with governmental regulations during a transaction. Sometimes these issues are small, and sometimes they are big.

This new paragraph has been carefully drafted to address those scenarios where the property is in material violation of a law, ordinance, or other governmental regulation.

It is important to note that this new paragraph is a brand-new condition in the contract, much like paragraph 11 and the condition that the property be in substantially the same or better condition at closing. Conditions, if they are not met, do not ordinarily result in a breach of the contract, which is true in this case.

Under this new condition, if the seller discloses a violation, then the buyer will have no right to terminate for that disclosed violation. If a governmental violation is discovered after the Effective Date, the seller can either remedy the violation or decline to fix it.

Depending on the seller’s decision, the buyer can either proceed and close or terminate and receive a refund of their earnest money and due diligence fee as their sole remedy.

Who are you?!

You’re not the Forms Guy!

2. New Default Language for Who is Named in the Deed in Form 2-T. Previous versions of the Offer to Purchase and Contract offered a blank for agents to identify who was to be named on the deed at the time of contract. According to closing attorneys, the blank was often filled out incorrectly, which created issues later in the transaction if the name needed to be changed.

The pre-printed language has now been adjusted to allow the deed to be made out to: (1) the buyer; (2) a corporation, limited liability company, or other business entity of which the buyer is the sole owner or shareholder; (3) a trust for which the buyer is the beneficiary; or (4) any relative of the buyer. These four options are automatic and do not require the agent’s input.

There is still a blank in the revised paragraph, but it should now rarely be used, and if it is, a specific name must be inserted rather than “TBD.” 3. New Options to Identify OffSite or Separate Septic Lots, Boat Slips, Garages, Parking Spaces, and Storage Units in Form 2-T. Checkboxes have been added to the first page of the contract to indicate whether the sale will include a separate or off-site septic lot, boat slip, garage,

Have questions about these changes?

Call the NC REALTORS® Legal Hotline at 336-294-1415 or email legalhotline@ncrealtors.org.

parking space, or storage unit. A note has also been added advising the parties to attach the Additional Provisions Addendum (Form 2A11-T) if the property includes any of these off-site features. These new checkboxes, and corresponding additions to Form 2A11-T, should prompt earlier discussions about ancillary property features, help agents and clients better identify what is (or is not) part of the contract, and avoid last minute closing snags.

New language added to Form 2A13-T addresses this problem directly. The form now states that if the buyer does not sign an agency agreement with the seller’s property manager

prior to Settlement, then the buyer agrees to pay the seller a fee. There is a blank provided so that the parties can negotiate this fee, or waive it by putting $0 dollars.

4. New Guidelines for Buyer and Seller Possession Forms.

New guidelines for Forms 2A7-T and 2A8-T do a lot more than just explain the pre-printed language of the buyer and seller possession addenda. In addition to providing important insight and background on how to fill out the blanks in their counterparts, these new guidelines explain important nuts and bolts of the landlord-tenant relationship, such as lease terms, the landlord’s right of access (or lack thereof), property maintenance, and, if necessary, eviction.

5. Property Manager Selection, Vacation Property Sales, and the Vacation Rental Addendum (Form 2A13-T).

It is common for the services of a vacation rental property manager to be negotiated by the parties in the sale of a vacation property. Previously, most of these agreements were verbal or informal, and the buyer agreed to use the seller’s property manager so that the seller could avoid early termination fees.

If the buyer later withdrew from one of these informal agreements, the seller had a difficult path to seek a remedy. ncrealtors.org • INSIGHT 13

legal 6. New Seller Representations in the Exclusive Right to Sell Listing Agreement (Form 101).

Two new paragraphs have been added to the seller representations in Form 101. The first asks the seller to identify potential disputes and violations that may affect the seller, their HOA, or the property itself. The second requires the seller to indicate whether or not they are a foreign person to ensure FIRPTA compliance. It is hoped that both of these additions will help listing agents identify and disclose material facts about these issues.

7. New Form: Agreement and Sale of Personal Property (Form 320-T).

As the name indicates, this new form permits agents to deal effectively with personal property that may, or may not, be associated with a real property transaction. Currently, agents use an ad hoc approach or use a closing attorney to facilitate the transfer of personal property. This form will standardize this process and provide significant risk management benefit to REALTOR® members who encounter personal property as part of their real property transactions.

8. Significant Changes to Contract Termination Forms (Form 350-T, Form 351-T, Form 352-T, and Form 353-T).

By checking a new box in the standard termination forms, both the buyer and seller can now terminate an NC REALTORS® standard form purchase contract without providing a reason. The buyer and seller can also check a box that terminates the contract and alleges that the other party has breached the contract.

As the termination forms clearly state, neither the buyer nor the seller should send such a termination without first consulting legal counsel. However, if after being advised to do so the parties still wish to terminate, agents now have the tools available to facilitate a clean termination without using the 14 INSIGHT • August 2023

termination forms that require the signatures of both the buyer and seller.

The termination forms for the buyer, Forms 350-T and 351-T, have an additional checkbox for the buyer to terminate if the governmental compliance condition is not satisfied.

9. Clarification on Previous Amendments to Agency Agreements (Form 710).

The previous language in Form 710 did not make clear whether any previous amendments to an agency agreement remain binding following the execution of a later amendment. The new language makes clear that prior amendments to

an agency agreement, unless specifically amended, remain binding even if new amendments are made.

10. New Default Rules for Referral Fees (Form 730).

Older versions of Form 730 were not clear on what referral fee was due, if any, when the prospect closed on more than one property during the referral term. New default language has now been added to make clear that if a party closes on more than one qualifying property before the end date of the referral agreement, then the referring firm will be paid on each transaction unless otherwise agreed.

2023 Forms Changes Overview Video now available John Wait provided a comprehensive overview of the 2023 Forms Changes in our Mobile Mondays Facebook Group.

Scan the code to watch now!

THE LEGAL HOTLINE NC REALTORS® have free, unlimited access to the NC REALTORS® Legal Hotline. Did you know one call to a real estate lawyer costs an average of $250 per hour? With just one call to the Legal Hotline, you’ve paid for one year of NC REALTORS® dues in full.

Don’t waste your time stressing over forms, disclosure or landlord/ tenant law. Call the NC REALTORS® Legal Hotline to get quick resolution, so you can return to your clients and your business.

NC REALTORS® Lawyers

John Wait

Bill Gifford

OVER 35 years collective experience representing REALTORS® on a daily basis

Adam Stallings

Unlimited calls every weekday Call to discuss... + Agency real estate licensing law + Commission disputes + Contracts + Disclosure + Fair housing + Forms + Landlord/tenant law + REALTOR® Code of Ethics

Dial

QA +

NC REALTORS® lawyers have created articles and Q&As on a wide variety of legal topics that are very relevant to your real estate practice. These appear in Insight magazine, the REALTOR® Rundown, and are archived and organized on ncrealtors.org/Q&A.

Email

336.294.1415

legalHotline@ncrealtors.org

and ask for the Legal Hotline

with your legal questions

NC REALTORS®

Appraisal Section WHY YOU SHOULD JOIN

BENEFITS

Are you passionate about shaping appraisal policies and making a real difference in the industry? Join the NC REALTORS® Appraisal Section and take your professional career to new heights. Your membership grants you a pivotal role in crucial policy decisions, ensuring your voice is heard and your expertise is valued. Become a part of the conversation and elevate your professional journey with NC REALTORS® Appraisal Section.

+ Participation in Advocacy Efforts + Discounts on Continuing Education + Exclusive Communications & Updates + Statewide Professional Networking & Referrals

+ No Appraisal License Required!

How to Join Visit ncrealtors.org/appraisal-section or contact Angela Burgess at aburgess@ncrealtors.org.

#iBackthePAC Thursday, October 5, 2023

16 INSIGHT • August 2023

AI & CYBERSECURITY

Decoding the Top AI Cybersecurity Risks Facing Real Estate Practitioners Today

BY “TRACEY, THE SAFETY LADY” HAWKINS Owner of Safety and Security Source

Since the end of 2022, artificial intelligence (AI) has become widely accessible, offering productive and “magical” tools. However, cybercriminals are exploiting these very tools to deceive and defraud unsuspecting individuals.

Real estate professionals are learning to use ChatGPT to write listing descriptions, blog posts, social media updates and develop marketing strategies. However, they need to be aware of the cybersecurity risks involved.

Let’s dive into the realm of AIrelated cybercrimes impacting the real estate industry, and uncover the good, the bad and the solutions to five of the most crucial cyber threats.

including social security numbers, bank account details, financial information, and personal addresses.

A compromised device belonging to a real estate agent also puts their clients’ details at risk, making them vulnerable to cybercriminals.

When real estate agents input client information into AI tools such as ChatGPT to create reports or marketing materials, it inadvertently exposes this information to potential cyber threats.

Although agents can direct ChatGPT to generate personalized documents, they must exercise caution and avoid entering specific client data directly, as doing so could lead to the unintentional public disclosure of sensitive information.

THE CRIME: DATA BREACH

THE SOLUTION: 1. Agents should regularly update their password hygiene, using strong passphrases or pass sentences instead of easily guessable passwords.

2. Enable two-factor authentication on all devices to add an extra layer of security, requiring a secondary code for logins, thwarting cybercriminals’ attempts.

3. Vigilantly exercise caution when clicking on links or downloading information from unknown sources, as they may harbor malware or viruses that can compromise data security.

THE GOOD: Real estate agents often serve as the primary point of contact when gathering consumer information, acting as trusted custodians or intermediaries to ensure this information reaches the appropriate real estate professionals.

THE BAD: In the unfortunate event of a real estate agent’s database getting hacked, it exposes sensitive client data,

ncrealtors.org • INSIGHT 17

AI & CYBERSECURITY

THE CRIME: PHISHING SCAMS THE GOOD: Real estate agents can utilize ChatGPT to generate HTML code for developing websites, landing pages, and other web assets. Many website builders offer a simple process of copying and pasting HTML code, enabling agents to swiftly create fully functional websites and landing pages to drive leads and expand market reach.

THE BAD: AI empowers cybercriminals to craft more persuasive phishing scams, including the creation of lifelike fake websites that deceive real estate agents and consumers into revealing sensitive information. Professional-looking websites and landing pages entice users to click on links and download content, unknowingly exposing them to viruses and malware that put their data at risk.

THE SOLUTION: To counter potential threats, always verify the authenticity of website sources. “Hover” over website addresses to confirm their legitimacy and conduct a Google search on the company, crossreferencing the website address before clicking any links. It is essential to caution consumers when encountering websites shared during real estate transactions and to proceed with care.

THE CRIME: RANSOMWARE ATTACKS THE GOOD: AI tools offer companies a means to safeguard against cybercrime. By partnering with IT cybersecurity companies, real estate firms can establish proactive practices and procedures, fortifying their defenses against ransomware threats to protect agents and consumers alike.

THE BAD: Ransomware attacks pose severe 18 INSIGHT • August 2023

risks to real estate companies, rendering their digital systems inaccessible until a ransom is paid.

AI empowers cybercriminals to exploit vulnerabilities with greater sophistication and precision. When agents’ social media or email accounts are compromised, sensitive consumer information becomes vulnerable.

Cybercriminals demand payment to restore access, but law enforcement discourages compliance. The repercussions of non-payment could be dire for agents and their businesses.

THE SOLUTION: Implementing robust password practices serves as an essential preventive measure against these cybercrimes. By prioritizing strong, unique passwords and regularly updating them, real estate professionals can mitigate potential threats to their digital infrastructure.

THE CRIME: DEEPFAKE FRAUDS THE GOOD: Real estate agents have access to AI tools such as Synthesia, enabling them to create “faceless” videos by representing themselves through AI-generated images while delivering the intended message with scripted content.

AI technologies like Midjourney, Dall-e, and Lexica provide text-toimage capabilities, allowing users to generate images, pictures, and videos featuring non-existent entities, locations, and individuals. When used responsibly, these tools can enhance marketing efforts, subject to ethical considerations, fair housing regulations, and other legal limitations.

THE BAD: Cybercriminals exploit AI to produce deepfakes, deceptive video or audio content that closely resembles authentic recordings, making it challenging to discern their falsity. In the real estate industry, deepfakes could be employed to fabricate fraudulent endorsements or testimonials, deceiving potential buyers

or sellers into engaging with nonexistent or misrepresented properties.

In addition, cybercriminals can fabricate properties to attract short-term rental clients or buyers, inducing them to pay deposits for non-existent real estate. Additionally, they can create fake images and videos of individuals posing as agents, disseminating false information or making deceptive statements.

THE SOLUTION: To counter the threat of deepfakes and safeguard the integrity of real estate transactions, the utilization of AI detector tools like GPT Zero is recommended. Although these technologies are relatively new and not entirely infallible, they serve as essential tools to identify and mitigate the impact of deceptive AI-generated content.

AI can be a powerful tool for the real estate industry, but it must be used responsibly and securely. Real estate companies should implement plans to address potential cybersecurity incidents with prompt and effective responses. These plans must encompass routine cybersecurity training and drills, aimed at updating and honing the necessary skills to safeguard agents, brokerages and consumers.

REALTOR® SAFETY Since 2003, September has been designated as REALTOR® Safety Month by the National Association of REALTORS®. Whether engaging in property showings, meeting new clients or communicating online, it is crucial to have a well-established personal safety protocol. NAR provides its members with a wide range of safety resources to help promote safety awareness and education among REALTORS® throughout the year.

Scan the code or visit nar.realtor/safety

ncrealtors.org • INSIGHT 18

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ncrealtors.org • INSIGHT 19

20 INSIGHT • August 2023

MASTERING THE ART OF LISTENING HOW LISTENING SKILLS PROPEL YOUR BUSINESS FORWARD

BY LEE NELSON Lee Nelson is a freelance journalist from Illinois. She writes for REALTOR® Magazine, several state REALTOR® Magazines and websites, and loanDepot.com.

According to Kristie Ferguson, not truly listening to someone when they’ve decided to engage in a conversation or open up is one of the fastest ways to lose trust. “Effective listening is the most efficient way to connect with other people,” remarks Ferguson, broker/owner of Ferguson Realty, Gastonia, and instructor/owner of Agent Academics. “Both of my businesses’ success is contingent on the human connection and the relationships that I’m able to build with clients and real estate professionals who either take my courses or sit across from me in a transaction.

Being a good listener not only improves relationships but can save time and effort, help solve problems and improve accuracy. “One of the most overlooked communication skills is listening,” says Brenda Bailey-Hughes, a teaching professor at the Kelley School of Business at Indiana University in Bloomington, Indiana. “Listening, like any skill, is something that can be learned.”

BUILDING UP YOUR LISTENING PROFICIENCY Bailey-Hughes and her fellow faculty member, Tatiana Kolovou, have offered the online course “Effective Listening” on LinkedIn since 2015, with many real estate professionals enrolling in the program. The course has reached nearly 1.5 ncrealtors.org • INSIGHT 21

million listeners in English and has attracted another nearly 300,000 learners in various other languages, including Portuguese, Spanish, French, German, Chinese, and Japanese.

When an agent listens to a new client discussing their preferences for acreage, proximity to school districts and the importance of community, it’s essential to not only summarize their words but also understand the underlying emotions, if possible. “Instead of saying that you have three properties for them, really grasp what you are hearing. Try to capture the top-level essence of what they said,” Bailey-Hughes advises.

Additionally, agents should try to discern the emotions expressed by their clients. By acknowledging these feelings, such as saying, “It sounds like it’s really important to be in your new home before the holidays,” agents can better connect with their clients and cater to their needs.

Teresa Pitt believes effective listening involves using your ears, eyes and heart. “Be present, responsive, and maintain eye contact,” says Pitt, the 2023 President of the Raleigh Regional Association of REALTORS® and an agent with Coldwell Banker Howard Perry & Walston in Raleigh.

“Heed key words, ideas and facts to help with focusing,” she adds. “Be conscious of posture and display traits such as alertness and empathy, if or when the conversation deems. Attentiveness will aid in watching for verbal and non-verbal signs.”

UNDERSTANDING THE DIFFERENT TYPES OF LISTENING Bailey-Hughes suggests that there are several types of listening that can significantly benefit people’s personal and work-related relationships. Here are a few examples: • Active listening: This type of listening demonstrates to the speaker that you are genuinely interested and care about what they are saying. Bailey-Hughes recommends paraphrasing back to the person what they said to show your understanding. Nonverbal cues such as eye contact and nodding are used to further convey your engagement.

• Empathetic or relationship listening: “Everyone wants to talk about themselves,” she says. This form of listening is about being attentive, compassionate, and kind, making the speaker feel heard and valued.

• Detail listening: This involves paying close attention to all the information provided and carefully evaluating what is said. In a real estate professional’s situation, for example, you are absorbing all the details shared by your client and analyzing potential challenges or concerns. Doing so lets you better understand what type of home will best suit their needs and financial situation.

GETTING PERKS FOR LISTENING WELL “If you aren’t listening, you can waste a ton of time,” says Bailey-Hughes. “You will be chasing down what your potential buyer wants when you really haven’t heard what they said. On the flip side, if you are listening well and saving time, you have a much better chance of getting a lot of good word-of-mouth marketing.”

Sometimes people don’t listen well even if they think they are because the subject is boring, or they can believe the information being delivered is repetitive, states Pitt.

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Kristie Ferguson, broker/owner of Ferguson Realty, Gastonia, and instructor/owner of Agent Academics

“Monopolizing conversations, impatience and distractions can also hamper listening,” she comments. “But active listening is still the most effective way to help REALTORS® decipher the true needs and the motivation of their clients.”

She admits that occasionally, while explaining a viewpoint to her husband, she gets distracted and, for a brief moment, loses her train of thought.

“When I ask him to refresh my memory of what I was talking about, he often can’t remember the subject matter.

On those occasions, I determine he was hearing me but not listening,” Pitt says.

Truly listening can build and maintain good relationships no matter who you are with.

Ferguson understands that real estate agents are professional problem solvers.

“If we don’t succeed in setting proper expectations with clients and have a hard time getting them to be honest with themselves and honest with us about their goals, we can misspend precious time because of inefficient communication,” she says.

She started training other agents in 2014 and opened Agent Academics years later to help agents build their businesses.

“In all courses, there is an opportunity to talk about listening skills,” she states. “At the beginning of the course, I encourage people to take notes, ask questions, and get clarifying information if something doesn’t resonate with them.”

She also talks about effective communication and how one of our primary ways to help people is to have comprehensive conversations at the outset of the relationships.

“If we know how to listen effectively, we can spend time helping our clients accomplish their goals in an efficient matter with few opportunities for miscommunication,” remarks Ferguson.

Brenda Bailey-Hughes, professor at the Kelley School of Business at Indiana University in Bloomington, Indiana

LEARNING OTHER TIPS TO BUILD LISTENING SKILLS Here are a few more ideas from the professionals on things you can do to make others know you are listening to their wants and needs: • “I’m particularly interested in personalities as they relate to what we value when we need to make decisions and how we like to process information,” Ferguson says.

“Our clients have different personality types, and the sooner we learn to recognize what their communication preferences are, the more effective we become in our role as a REALTOR®.”

• “Being aware of gestures and facial expressions in response to conversations are effective practices to adopt,” states Pitt. “Mimicking the person in front of you and controlling the tone of your voice can also be helpful tools in the listening process.”

• Instead of actively interrupting the conversation, write down key words so you’ll remember the point you wanted to make or the question you wanted to ask at an appropriate time in the conversation,” Ferguson adds.

• Don’t cross your arms, drum your fingers on the table or rock or sway in an agitated manner while someone else is talking, adds Bailey-Hughes. “You should have a thoughtful response. The first words that come out of your mouth will tell them a lot about how you were listening.

That’s where paraphrasing can be so powerful.”

• Train yourself how to listen to people even if they aren’t talking, says Bailey-Hughes. “If you are in a meeting or conversation with several people, see if you can identify how different people are feeling about what was being talked about. Read the room.” Beneath the words and the nonverbal actions, you can decipher a lot about someone.

Teresa Pitt, agent with Coldwell Banker Howard Perry & Walston in Raleigh and the 2023 President of the Raleigh Regional Association of REALTORS®

“If we know how to listen effectively, we can spend time helping our clients accomplish their goals in an efficient matter with few opportunities for miscommunication,”

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A Day in the Life of mortgage lenders

Chrystal Searcy

Mortgage Loan Advisor and Branch Manager, Homestar Financial Corporation, Shelby

BY LEE NELSON The pandemic has not only caused a frenzy among real estate professionals, but it has also significantly impacted mortgage lenders. Despite rising interest rates and a limited inventory, mortgage lenders find themselves immersed in a fast-paced environment, with constant calls and emails all day (and night) long.

Understanding what they continue to deal with can be eye-opening. What has changed in their work load, their home lives and their clients? We asked two experienced loan officers questions to see what the lending world and those in it are experiencing nowadays since their industry is so tied to agents. Here are their stories:

Chrystal Searcy, a mortgage loan advisor and branch manager at Homestar Financial Corporation in Shelby, previously worked as an agent for six years in Rutherfordton before the housing market crash in 2008. When real estate took a downturn, she found a job in the mortgage department of a local bank.

“I learned how to process a loan and how to prepare closing packages for attorney offices,” she states. “I never realized there were so many moving parts to getting a mortgage.”

Despite her career shift, Searcy maintains an agent-like schedule to ensure she is available for her real estate partners during evenings and weekends when they are busiest. Her guiding principle remains “Mortgages are people, not paper,” acknowledging the emotional aspect of purchasing a home for both agents and lenders.

As a mortgage loan advisor, she learns things about a borrower that perhaps they haven’t shared with their real estate agent. So, when she tells the agent their client can’t go with conventional financing, they need to trust her that there is a reason – such as low credit score, too much debt, prior bankruptcy, etc.

Searcy’s day begins at 6:30 a.m., allowing her quiet time with ncrealtors.org • INSIGHT 25

a cup of coffee and a devotional. She creates a daily to-do list, prioritizing tasks based on their importance. Upon arriving at the office, she addresses the numerous emails, texts and voicemails that require her attention. Like real estate professionals, Searcy has been significantly affected by the shortage of housing inventory, which poses a major challenge to her business. Many clients are preapproved for home purchases, but the limited availability of listings complicates the process.

When Searcy needs to convey disappointing news regarding mortgage qualification, she provides clients with suggestions for future purchases, such as paying down debt, increasing their down payment or resolving outstanding collections.

“I don’t want them to think that a no today is a no for tomorrow,” she emphasizes.

To alleviate stress from her busy days at the office, Searcy finds solace in conversations with her group of female friends, who provide a supportive outlet. She also relies on her family.

“Every weekend, I spend an evening with the whole family – husband, daughters, sons-in-law, and grandkids. Our house goes from a meal for two to a meal for 10. My family keeps me grounded and helps me focus on what’s important,” she states.

Nina Karras Loan Officer, Advantage Lending, Raleigh

Nina Karras, a loan officer at Advantage Lending in Raleigh, handles a minimum of 200 emails, texts and phone calls on most days. These inquiries range from loan applications to general questions about mortgages. In addition to client scheduling, consultations and closings, Karras often finds herself providing support to REALTORS® and addressing clients’ anxieties and concerns.

Through all of this, she strives to remember her own excitement and worries when she purchased her first home, a time when she had little understanding of the mortgage industry. Reflecting on her initial home buying experience, Karras recalls the mix of excitement and anxiety that accompanies the process.

“I was so stressed and worried back then because you want so much to own that home,” she remembers. “But you’re also excited at the same time.”

Karras typically wakes up around 7 a.m. and promptly checks her emails, responding as necessary. Depending on her schedule, she either works from home for the entire day or heads to the office by mid-morning. Her office is situated within a Coldwell Banker real estate office. She attends weekly real estate meetings, where she engages with agents and discusses topics such as market trends and loan-related changes relevant to their business.

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“I end up sitting in the office, and people come in all day asking questions that they are working through with clients and their loans,” she adds. “Some days, I drink a lot of coffee.”

Being located within a real estate brokerage does not guarantee referrals or clients from the agents. Karras emphasizes the need to network, maintain relationships and keep in touch to generate referrals. While she does receive referrals from past clients, the majority of her business comes from the REALTOR® relationships she has built over the years.

“To get clients means meeting people for lunch, calling people and keeping in touch. That’s the only way to get referrals.

I do get referrals from past clients, but most come from the REALTOR® relationships I have built through the years. It’s a lot of pressure.”

Karras generally works at the office until 3 p.m., takes a lunch break, and then continues working from home for a few more hours. If there are no specific prequalification calls, she dedicates an hour to practicing yoga, a stress-relieving activity she discovered four years ago.

“It’s fantastic. You have to do it in this business because it’s constantly changing, and you are constantly on,” she admits.

Karras often receives urgent calls from desperate REALTORS® who have been house hunting with clients for days. With low housing inventory, homebuyers need to make swift decisions when submitting offers.

“I have to figure out if they will qualify for the loan quickly.

It’s all about knowing the guidelines for all of the types of loans and making those decisions by 8 p.m. that night,” she adds.

As a loan officer, Karras continues to grapple with helping clients navigate higher interest rates, increased home prices and limited inventory. Despite close monitoring, housing prices have yet to decrease. Karras believes the pandemic has permanently altered the real estate and lending industries.

While the market was incredibly busy before, with everyone eager to purchase or refinance, she considers the current situation more stressful due to the scarcity of available properties.

“I end up working with them for months and months without them finding a home. Some give up until the next year. Buyers are unwilling to pay way over the asking price like they were before and not willing to waive contingencies. It’s a tougher time.”

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