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INITIATIVES TO KEEP OC RESIDENTS SAFE

IS ANYONE WILLING TO BUY A HAUNTED HOUSE?

FIGHT BACK AGAINST THE HACK

IT’S SCARY SEASON AGAIN

on page 22

on page 42

on page 44

on page 26

SEPTEMBER | OCTOBER 2019

Conquer your worst fears with real solutions to some of the frightening things that keep you awake at night.

We have provided some tools you can use and some tips you can follow to recognize today’s threats, avoid taking unnecessary risks, and become better prepared to protect yourself, your clients, and your business. on pages 26-39


CONTENTS p. 26 SEPTEMBER | OCTOBER 2019

President’s Message 10 Before Ghosts and Goblins Arrive Matt Clements says proper preparation can take the scare out of an otherwise frightful season.

State Update 12 C.A.R. Launches Its “Let’s Get

Serious” Legislative Campaign, and WomanUP!® Goes National

Real Nightmares Whether you worry about personal safety, earthquakes, cyber attacks, data breaches, mail fraud, or telephone scams, articles in this issue can help you rest a little easier!

Cover Story  cott Reid lists the steps you can take to protect against a cyber S attack or data breach.

30 Watch Out for Your Mailbox!

Sabrina Blair warns new homeowners to be on the lookout for “official” notices telling them to respond promptly, send money, and supply personal information.

34 Many of Today’s Most Successful Thieves Are Armed with Telephones and Are Making Robocalls

Sherri Butterfield describes several lucrative phone scams in which callers have claimed to be from the Internal Revenue Service, the Social Security Administration, and Microsoft.

36 Some Common Earthquake Myths Debunked

Michelle McCann says the biggest myth of all is that, because you don’t know when the next earthquake will occur, you shouldn’t bother to prepare.

38 Gadgetry: Katana Safety

Albert Ornelas introduces readers to the first personal safety device that attaches to a smartphone and creates three layers of defense. p. 12

p. 20

Features 20 T here’s a Housing Recovery Going on

26 Fight Back Against the Hack

p. 10

Jared Martin describes some of the housingrelated bills that the Association is supporting and opposing.

p. 22

—Whether You Know It or Not

According to James Doti, a decrease in the time it takes to sell a home and an increase in the number of homes sold are signaling a housing market turnaround.

22 OC REALTORS® Committees:

Initiatives to Keep OC Residents Safe

At the July 8 meeting, Sheriff Don Barnes described five department initiatives to keep Orange County residents safe.

40 T he Orange County Housing Update Demand remains sluggish, writes Steven Thomas, despite lower interest rates.

42 H  alloween: Is Anyone Willing to Buy a Haunted House?

If the price is right, some survey respondents say yes—even when there’s a ghost in residence!

44 It’s Scary Season Again Jon Coupal describes the charges on a typical secured property tax bill and tells readers what to do if they need to appeal the assessed value of their property.

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CONTENTS

ORANGE COUNTY

® REALTOR MAGAZINE

p. 40

25552 La Paz Road Laguna Hills, CA 92653

10540 Talbert Avenue, Ste. 225 West Fountain Valley, CA 92708

949.586.6800

714.375.9313

www.ocar.org 2019 OFFICERS Matt Clements President Danielle Corliss President-Elect Lisa Schulz Treasurer Tammy Newland-Shishido Immediate Past President Dave Stefanides Chief Executive Officer

2019 BOARD OF DIRECTORS Jost Atwood Joyce Endo Dorinda Francois Michele Harrington Bob Hartman Tim Hayden Julie Hile Spencer Hoo Jeffrey Jackson Debra Krumboltz

p. 44

Departments 14

Names in the News

17 Mentions 19

Affiliates in Action: New REALTOR® Orientations

24

Education Central: Upcoming Classes by Track

Liz Lewis Gary Ludwig Charleen Nagata-Newhouse Randy Rector Lacy Robertson Adam Rodell Aaron Rosen Scott White Bob Wolff Eric Wu

MAGAZINE STAFF Sabrina Blair

Breanna Reed

Director of Communications sabrina@ocar.org

Accounting Assistant breanna@ocar.org

Sherri Butterfield

Albert Ornelas

Communications Specialist sherri@ocar.org

Multimedia Specialist albert@ocar.org

Online Magazine

Love the Orange County REALTOR®? Did you know that you can read it online, anytime? Read past issues at www.ocar.org/magazine.

Mission Statement

The mission of the Orange County REALTORS® is to promote the REALTOR® Code of Ethics; to provide education, services, and resources to our members; and to advocate the protection of real property rights.

Notice to All Members

p. 42

On the Cover What keeps you awake in this scary season? If you have nightmares about preventing cyber attacks, being prepared for an earthquake, recognizing fraud, avoiding telephone scams, and ensuring your personal safety, you’ll find lots of helpful information on the pages of this issue of OC REALTOR ®.

Follow us on social media facebook.com/theocrealtors twitter.com/the_ocrealtors

instagram.com/theocrealtors snapchat.com/add/ocrealtors

It is the long-established policy of this Association, the California Association of REALTORS®, and the National Association of REALTORS® to adhere to both the letter and spirit of the federal and state antitrust laws. For their own protection, members should be aware of the antitrust laws as they affect their specific business activities. Any illegal activity under the state and federal antitrust laws is not in compliance with Association policy, nor is it in the interests of the Association or its members. Participation in Association activities must occur only in harmony with these very important laws. Federal law prohibits discrimination based on race, color, sex, religion, or national origin in connection with the sale or rental of residential real estate, in advertising the sale or rental of housing, in the financing of housing, and the provision of real estate brokerage services. The Orange County REALTOR® editor reserves the right to review and edit all submissions. Orange County REALTORS® makes no warranties and assumes no responsibility for the accuracy of the information contained herein. The opinions expressed in articles are not necessarily the opinions of the Orange County REALTORS®. Orange County REALTORS® does not necessarily endorse the companies, products, or services advertised in this magazine unless specifically stated. The Orange County REALTOR® (USPS 025-445, ISSN 1945-2179) Volume 11, Issue 5, is published by the Orange County REALTORS®, 25552 La Paz Road, Laguna Hills, CA 92653. Periodicals postage paid at Laguna Beach, CA, and additional mailing offices. POSTMASTER: Send address changes to Orange County REALTORS®, 25552 La Paz Road, Laguna Hills, CA 92653-5127. Annual membership dues include $3.13 for a one-year (6 issues) subscription to the Orange County REALTOR® magazine. The Orange County REALTOR® magazine cannot be responsible for unsolicited materials. Publisher: Orange County REALTORS® Printer: The Monaco Group

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PRESIDENT’S MESSAGE

Before Ghosts and Goblins Arrive Proper preparation can take the scare out of an otherwise frightful season.

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assistance through OCAR Cares—both of which help our valued members when they need it most.

y son is about to experience Halloween. He will love the candy, guaranteed!

And because September is REALTOR® Safety Month, articles in this issue of OC REALTOR ® are about earthquake preparedness, cyber security, newhomeowner scams, and the presentation Orange County Sheriff Don Barnes gave recently titled “New Initiatives to Keep You Safe.”

For a child, Halloween can be very scary—the costumes, the loud noises, the dark of the night. But it can also be a fun experience, depending on how you’ve prepared. Parents and REALTORS® alike, now is the time to prepare.

In addition to ghosts and goblins, By Matt Clements 2019 PRESIDENT, ORANGE another thing that can make Fall a If you’ve done enough preparation COUNTY REALTORS scary season is property taxes. Secured for your business in terms of lead property tax bills are mailed out and generation, you should be in position can be found online at ocgov.com/octaxbill during to travel and have fun with your loved ones. If not, September and October, and the first installment is the Fall season, the season of harvest, could be due and payable on November 1. challenging, and safety becomes the focus: Keeping your family safe. Not so scary, we would like congratulate Lori Namazi and Bob Wolff on their election Orange County REALTORS® works to keep its as Orange County REALTORS® president-elect members safe by offering emotional support through The RAW Group and by providing financial and treasurer, respectively. n

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Photo: www.envato.com/Rawpixel

®


STATE UPDATE

C.A.R. Launches Its “Let’s Get Serious” Legislative Campaign, and WomanUP!® Goes National The “Let’s Get Serious” campaign urges lawmakers to support policies that increase the supply of housing. A Tale of Two Rental Housing Bills

For the past couple of months, the California Association of REALTORS® (C.A.R.) has been negotiating amendments to two rental housing bills, AB 1482 (Chiu) and AB 1481 (Grayson and Bonta), that would have removed C.A.R.’s opposition. Unfortunately, the bills, as amended, do not satisfy the Association’s concerns, so C.A.R. will continue to oppose both bills. AB 1482, which also contains the language from AB 1481, passed the Senate Judiciary Committee last week and now moves to the Appropriations Committee. C.A.R. will continue to negotiate for amendments that preserve the rights of rental property owners while allowing for the protection of at-risk tenants.

“Let’s Get Serious” Legislative Campaign

California’s housing crisis has made it difficult for young people and middleclass families to find homes to buy or rent. Teachers, nurses, police officers, and firefighters should be able to live in the communities they serve. Meanwhile, local government continues to consider short-sighted and ineffective policies, like rent control. That’s why C.A.R.’s Government Affairs team this week launched its “Let’s Get Serious” legislative campaign to urge lawmakers to support policies that increase the supply of housing. Among the legislation that would increase housing supply which C.A.R. is sponsoring

By Jared Martin C.A.R. PRESIDENT

or supporting are SB 50, which encourages the development of mid-rise, multifamily housing construction around major transit hubs; SB 330, which creates certainty for developers constructing new housing units and streamlines the local permitting process for five years; and SB 592, which holds local governments financially accountable for approving the construction of accessory dwelling units.

REimagine! Conference and Expo If you haven’t already done so, make plans now for C.A.R.’s REimagine! Conference and Expo. You don’t want to miss out on this incredible experience. Join us at the Los Angeles Convention Center for three days of nonstop networking and skill-building to take your business to the next level. The conference kicks

off on Tuesday, September 24, with Masterclasses, a paid day of targeted content with different tracks to choose from, including Social Media 4.0, Broker Conference, YPN Ignite, RPA Training, and Transaction Coordination. All C.A.R. members can take advantage of an amazing member benefit on Wednesday, September 25, and Thursday, September 26—two full days of actionable ideas from more than thirty sessions, networking opportunities with thousands of industry professionals, and meeting with hundreds of vendors with new products in the exhibit hall—all for free.

WomanUP!® Conference

Building on its success over the past two years, C.A.R.’s WomanUP!® Conference is going national this year. That’s right, we’re inviting women and men from across the country to enhance the WomanUP!® movement at the Loews Coronado Bay Resort in San Diego, October 23–25. At this event, you’ll identify tools and strategies to apply to your own business; develop skills to take your career to the next level; and connect with other amazing leaders in the national brokerage community. And thanks to the generosity of last year’s attendees, the C.A.R. Education Foundation is offering scholarships to REALTOR® members who might not otherwise be able to afford to attend. n

This column is based on and has been excerpted from the Monthly Message by C.A.R. President Jared Martin that was distributed via email on July 19, 2019. It is being reprinted here with permission.

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NAMES IN THE NEWS

Photo by Marion Butterfield

A Double Thank You to Cottie Petrie-Norris

Assemblywoman Cottie Petrie-Norris (second from right) is pictured at an April 26 OCTax luncheon with (from left to right) Orange County REALTORS® CEO Dave Stefanides, Assemblywoman Sharon Quirk-Silva, and Assemblyman Tom Daly.

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ssemblywoman Cottie Petrie-Norris (D-Laguna Beach) was instrumental in securing as a part of the 2019 state budget (AB 74) the $4.5 million appropriation needed to implement a new aerial firefighting tool. Termed the First Responder Intelligence, Surveillance, and Reconnaissance System, it includes a fixed-wing aircraft equipped with live high-definition video, infrared, and radar sensors. It combines the ability to see through smoke and perform real-time predictive modeling with fire perimeter mapping and GPS capabilities. “This new tool will immediately tell us the direction of the fire so we can safely and rapidly evacuate residents, as well as position fire crews in precise locations to better protect life, property, and infrastructure during a wildfire,” said Orange County Fire Authority Fire Chief Brian Fennessy. We are thankful to Assemblywoman Petrie-Norris for securing these funds.” Assemblywoman Petrie-Norris also was instrumental in obtaining $2.9 million from this year’s general fund for restoration of seventeen historical cottages on the north end of Crystal Cove State Park. Crystal Cove Conservancy, the nonprofit that has spearheaded the cottage restoration project, worked with Assemblywoman Petrie-Norris to secure the funding. The cottages, which lie along the coast between Laguna Beach and Newport Beach, are among the most sought-after camping spots in the State Parks system.

Congratulations to Wayne Woodyard Berkshire Hathaway Homeservices California Properties recently announced that Wayne Woodyard will take the reins of its Corona del Mar and Newport Beach offices. Woodyard, who was president of Orange County REALTORS® in 2016, continues to serve as Orange County vice president and regional manager for Berkshire Hathaway after leading its Monarch Beach and San Clemente offices as branch manager during the past several years.

NAR Wins Sustainability Award The National Association of REALTORS® (NAR) has received a 2019 Sustainability Award from the Business Intelligence Group for work implementing an Association-wide sustainability program beginning in 2017. The Business 14

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Intelligence Group was founded to recognize organizations, products, and individuals for superior performance. Specifically, the Sustainability Awards honor those who have made sustainability an integral part of their business practice.

Purplebricks Leaves the U.S. In a letter dated July 12, Purplebricks, a British-based online real estate service, informed the California Employment Development Department that it will close its office on Spectrum Center Drive in Irvine by September 13. Purplebricks, which was founded in the United Kingdom in 2014, said when it began its American operations in September 2017 that Southern California would be its prime target. The company charged its clients a flat fee of $3,200 to represent them whether the sale went through or not. Continued on Page 16


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NAMES IN THE NEWS

Continued from Page 14

YPN Members Walk for CHOC During the Young Professionals Network (YPN) Month of Giving, Orange County REALTORS® YPN members joined YPN members from across the county to participate in the CHOC Walk in the Park presented by Disneyland Resort. This August 11 event provided an opportunity for families to express thanks to the doctors and nurses who had cared for their youngsters at Children’s Hospital of Orange County and to share their memories with other families. It was also an effort to raise funds to support the care, services, education, and research at CHOC Children’s Hospital. Participating in the walk were (from left to right) Melissa Chelius, David Lee, Lisa Dukellis-Mitchener, Debbie Sinclair, Thalia Rodriguez, Jessica Siguenza, Cindy Wu, Gabe Smith, and Stephanie Santana.

Donna Dewitt and Marie Edwards Are the June and July Monthly C2EX Summer Challenge Winners Donna DeWitt was our June winner and Marie Edwards was our July winner of the C2EX Summer Challenge, and they were awarded $50 Amazon Gift Cards. The National Association of REALTORS® (NAR) created Commitment to Excellence (C2EX), an online program, to empower its members not only to grow but also to thrive in real estate. To date, more than 26,000 REALTORS® have participated in this program nationwide. To learn more, visit www.ocar.org/c2ex. Donna DeWitt June Winner

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Marie Edwards July Winner

OC REALTOR®


NAMES IN THE NEWS

On July 18, the Lake Forest Chamber of Commerce hosted a Legislative Luncheon featuring California State Senator John Moorlach (37th District) and Orange County Board of Supervisors Chair Lisa Bartlett (5th District). Moorlach and Bartlett answered questions about the “biggest issues” in both Orange County and Sacramento. Among other items, Moorlach mentioned wildfires, utilities, the fact that two-thirds of California’s school districts are in the red, high-speed rail, pension costs, and homelessness. Bartlett said that homelessness was the number one issue in fifty-seven of California’s fifty-eight counties. She added “We are not just sitting back: we are taking the lead. We are working on all fronts, day and night, to solve this problem.”

the District Attorney’s website and asked that, in reporting suspected fraud, REALTORS® provide a narrative and as many supporting documents as possible. In closing, Spitzer said, “The REALTORS® have been phenomenal. After twenty-seven years in elective office, I am personally ecstatic about the privilege you’ve given me to be your District Attorney. I hope I can earn the right to be here every single day.”

Photo by Marion Butterfield

Lake Forest Chamber of Commerce Hosts Legislative Luncheon

Photo by Marion Butterfield

Orange County District Attorney Todd Spitzer (on the right) listens as Deputy District Attorney George McFetridge talks about real estate fraud.

MENTIONS

You’ve Created the Perfect Article!

During the Legislative Luncheon, the Lake Forest Chamber of Commerce recognized its Champions, Friends, Partners, and Volunteers of the Year. Orange County REALTORS® was named a Champion of Commerce, and OC REALTORS® Government Affairs Director Dirissy Doan was recognized as a Friend of Housing. Shown with Dirissy (center) are Lake Forest Chamber of Commerce President-Elect Brian Cawley, Orange County Board of Supervisors Chair Lisa Bartlett, Lake Forest Chamber of Commerce President Jeremy Olson, and state Senator John Moorlach.

OC District Attorney Todd Spitzer Visits Orange County REALTORS®

On August 1, the Orange County REALTORS® Local Government Relations –South Committee and LGR-S Committee Chair Lacy Robertson and Vice Chair Kevin Smith hosted a Meet and Greet with Orange County District Attorney Todd Spitzer. Spitzer declared, “My number one priority is public safety.” First, he briefly described the homelessness challenge and what Orange County is doing about it and then pointed out that Los Angeles has 60,000 homeless while Orange County as 7,000. Next, Spitzer introduced Deputy District Attorney George McFetridge. McFetridge, described the efforts of the Orange County District Attorney’s Real Estate Fraud Unit. He reported that real estate fraud often takes the form of loan modifications, upfront fees for work that never gets done, rent skimming, and mortgage fraud. He said a form for reporting real estate fraud is available on

Dave and Sherri — I cannot thank both of you enough for the amazing article about The RAW Group. There is not a single word I would have changed. It brings the objective forward in a clear and concise manner. Sherri, thank you for all the work you put into this, and for putting up with my feedback along the way. You’ve created the perfect article! Adam Rodell DIRECTOR, ORANGE COUNTY REALTORS® AND CALIFORNIA ASSOCIATION OF REALTORS® Editor’s Note: Adam Rodell is writing about an article describing The RAW Group, which appeared on pages 30–31 in the July/August 2019 issue of OC REALTOR ®. Rodell was instrumental in founding this group because he wanted to create a safe place where both REALTOR® and Affiliate members could share personal stories of struggle and hope with one another. Continued on Page 18

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NAMES IN THE NEWS

Continued from Page 17

In Memoriam Eric Woolery

Will Killens

Orange County Auditor-Controller Eric Woolery died at his home in Kansas on August 7, 2019, at the age of 53. Woolery was serving his second term as auditor-controller, having been first elected to that post in June 2014 and reelected in June 2018. Woolery believed that the voters of Orange County had elected him to be their fiscal watchdog. While in office, he championed the right of taxpayers to know how their dollars were being spent. Each year, his office published a Citizens’ Report to provide the public with the highlights of the County’s Comprehensive Annual Financial Report (CAFR) for that fiscal year. Earlier this year, when the AuditorController’s Office published the inaugural edition of the Annual Orange County Guide to Property Taxes, Orange County REALTORS® had the privilege of being its sponsor.

Will Killens, the educational director for the Veterans Association of Real Estate Professionals (VAREP) Orange County, lost his thirteen-year battle with cancer on August 3. VAREP President Steve Kaustinen remembers Killens as an enthusiastic member of the VAREP Board of Directors. He says that Killens’s motto was, “Where there’s a Will, there’s a Way,” and that it was true. “Will was always willing to jump in and do whatever was needed to accomplish the mission,” explains Kaustinen. “He was an exceptional man, soldier, coach, veteran, brother, and friend! . . . He will always hold a special place in our hearts, and we will continue the mission in his honor!”

(1966–2019)

(1956–2019)

This Names in the News column is intended to be primarily a place where Orange County REALTORS® and Affiliate members can share both personal and professional news—about births (of children or grandchildren), graduations, weddings, anniversaries, accomplishments, awards, and other milestones—with one another. If you have news to share, email it to OC REALTOR ® Writer and Editor Sherri Butterfield at Sherri@ocar.org.

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AFFILIATES IN ACTION

Affiliates Assist at New REALTOR® Orientations in July and August Orange County REALTORS® thanks the Affiliates who assisted at the New REALTOR® Orientations on July 16, August 5, and August 21, and congratulates the new REALTOR® members who joined Orange County REALTORS® on those occasions.

July 16 w

Laguna Hills

Affiliates who helped Orange County REALTORS® welcome new REALTOR® members on July 16 in Laguna Hills were (from left to right) Jenny Porter, Mazzo Group; Gary Bridge, First American Title; Diana Osborn, Home Warranty of America; Vanessa Perry, Mariners Escrow; Don West, BPG Inspections; Kendra Johnson, All Signs; and 2019 Affiliate South Chair Joe Pierce, Iron Key Escrow.

August 5 w Fountain Valley Affiliates who helped Orange County REALTORS® welcome new REALTOR® members on August 5 in Fountain Valley were (from left to right) Van Gordon, Farmers Insurance; Michael Johnson, Elite Group Inspection Professionals; Elric Navatel, Monaco Video Production; Brandi Zamora, Fidelity National Home Warranty; and Nelson Otero, First Allied Financial Services.

August 21 w

Laguna Hills

Affiliates who helped Orange County REALTORS® welcome new REALTOR® members on August 21 in Laguna Hills were (from left to right) Hamid Parsa, Carpet Depot; Kylie Ruhlen, Orange Coast Title Company; Kristine Holliday, 7c Escrow; 2019 Affiliate South Chair Joe Pierce, Iron Key Escrow; Reem Misto, National Pacific Lending; Jennifer Rich, Jennifer Rich Agency–Farmers Insurance; and Eric Enriquez, Rescue Roofer.

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GUEST COLUMN

There’s a

Housing Recovery

Going on —

By James L. Doti PRESIDENT EMERITUS AND PROFESSOR OF ECONOMICS, CHAPMAN UNIVERSITY

Whether You Know It or Not

Solid data point to a housing recovery at the national, state, and local level. The Orange County market has been in recovery mode since early this year, and this recovery will continue as long as mortgage rates remain at or below 4 percent.

At

our recent economic forecast, I presented data that point to a housing recovery at the national, state, and local level. This confounded many real estate professionals who told me after the forecast that they see no apparent signs of a recovery. In fact, they exuded gloom and doom as they told me of sharply declining home sales when compared to last year. Almost all media accounts reflect a similar pessimistic view of the housing scene. Year-over-year changes, however, do not define economic recoveries. When, for example, the current national economic recovery began in the third quarter of 2009, real gross domestic product (GDP) was still declining 3.0 percent when compared to the prior year. But since real GDP increased 1.5 percent from the prior quarter—the first such quarterly increase since the Great Recession began— a recovery had officially begun. Similarly, a housing recovery is currently under way in Orange County. Although this recovery may be hard to see, the fundamental economic factors bringing it about are certainly in place. Chief among them is the sharp drop in mortgage rates. Since peaking at a rate of 4.9 percent last November, it dropped sharply (100 basis points) to 3.8 percent in June. This dramatic drop in mortgage rates translates to real savings for homebuyers. Purchasing a median-priced home in Orange County at a 4.9 percent rate in November resulted in monthly principal-and-interest payments of about $3,400. By June, with the mortgage rate at 3.8 percent, those P & I payments dropped to 20

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$3,000. That’s a monthly savings of $400. Even more important, the minimum qualifying annual income for approval of that mortgage decreased from $164,000 to $142,000. Another factor undergirding a housing recovery is a strong wealth effect. Fueled largely by hefty stock market gains since December, the net worth of families has increased sharply. Although data on wealth are not available at the local level, the 14 percent annualized increase in net worth in the United States likely mirrors that of Orange County. With fundamentals like these, why all the gloom and doom about the housing sector? No question, year-to-year comparisons on home sales are still negative. In the most recent “O.C. Housing Report,” for example, it was reported that it took, on average, 89 days to sell a home compared to a lower 73 days one year earlier. But that increase in the market time to sell a home in the county gives a false signal of economic weakness. In fact, the market has strengthened and has been in a recovery mode since early this year when the market was still reeling from the impact of high mortgage rates. In January, it took, on average, 152 days to sell a home as compared to 77 days the prior year. That means it took 75 more days to sell a home. It’s that difference of 75 days that points to a very weak, perhaps even recessionary, housing market. That was the sorry status of the housing sector at the beginning of this year. Now, only half a year later, the average number of days to sell a home in the country is 89 days. While that is still higher than last year’s 73 days,


GUEST COLUMN

The decrease from 75 additional days to sell a home at the beginning of the year to 16 additional days to sell a home in June points to a much stronger housing market, at least when compared to the very weak market that existed six months ago.

the difference is only 16 days. That decrease from 75 additional days to sell a home at the beginning of the year to 16 additional days in June points to a much stronger housing market, at least when compared to the very weak market that existed six months ago. Although the market is still weaker than last year, it’s stronger than it was in January. That fact points to a solid economic recovery. This recovery can also be seen in the number of home sales. This critically important market indicator for residential realtors, brokers, title agents, and mortgage bankers is still about 19.9 percent lower than the sales rate in March 2019. But that’s an improvement over the year-over-year drop of 23.4 percent experienced last December. The recovery in home sales is even more clearly

seen in California, where home sales data are available through May. In January, home sales in California were 12.5 percent lower than the prior year. Only four months later, in May 2019, home sales were roughly the same as that registered in May 2018. The fact that sales matched last year’s level might strike some as nothing to crow about. To an economist, whose M.O. is all about focusing on the rate of change, that’s the stuff of a real economic recovery. As long as mortgage rates remain at or below 4 percent, I am confident that the housing recovery will continue and grow in strength during the second half of the year. By then, year-over-year increases in home sales will finally turn attitudes from pessimism to optimism. But I’m already there. n

James L. Doti is president emeritus and professor of economics at Chapman University. Dr. Doti received his Ph.D. from the University of Chicago. He is the author of Econometric Analysis with EViews and of Statistical Analysis with Excel. His articles have appeared in the Wall Street Journal and many other business publications. His Annual Chapman Economic Forecast is widely known for its statistical accuracy. OC REALTOR®

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OC REALTORS® COMMITTEES

Sheriff Don Barnes Describes Department Initiatives to Keep Orange County Residents Safe The Sheriff’s Department is working with public agencies, elected officials, community groups, and houses of worship to help individuals, families, and neighborhoods become co-producers of their own safety.

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lifelong resident of Orange County, Schools Act,” redefined property and drug crimes, Don Barnes is a graduate of the FBI National downgrading 80 percent of what had been felonies Academy. He has more than three decades to misdemeanors. Once this proposition had been of experience with the Orange County Sheriff’s approved by the voters (on November 4, 2014), it Department in areas that include administration, began to function as the “keep people out of jail act.” investigations, custody, and patrol. From We are keeping fewer criminals in jail, 2016 to 2018, Barnes served as undersheriff, putting more of them back on the streets, and on November 6, 2018, he was elected and seeing an increase in the categories to succeed retiring Sheriff Sandra of crimes they commit. For example, in Hutchens and become Orange County’s the three years between December 2014 thirteenth sheriff. and December 2017, the Orange County On July 8, the Orange County Sheriff’s Department has seen a 25 percent ® REALTORS Local Government Relations– increase in robbery, an 18 percent increase South Committee and LGR-S Committee By Sherri Butterfield in assaults, a 19.8 percent increase in vehicle WRITER AND EDITOR Chair Lacy Robertson and Vice Chair theft, a 21 percent increase in burglary, a Kevin Smith hosted a meeting at which 5 percent increase in larceny, a 28 percent Sheriff Barnes described Sheriff’s Department increase in possession of narcotics, and a 31 percent initiatives to keep Orange County residents safe. increase in under the influence of narcotics. What follows are some of the ideas he offered during that presentation. Reduce Property Crime. During 2018, there were 924 burglaries, 3,971 larceny thefts, and 470 vehicle thefts in South Orange County. To reduce these Initiatives numbers, we encourage people not to leave things The five initiatives of the Orange County Sheriff’s of value where they are clearly visible, to lock their car Departments are: when they leave it, to close and lock the garage door, n Vigilance in protecting our community, and to limit access to the back of the house by closing n Reduce the prevalence of drugs, and locking the gate to the backyard. n Operate the nation’s best jail system, n Enrich partnerships, and Enhance School Safety Efforts. Ninety-eight n Maintain a culture of integrity, service, percent of school shootings are done by former professionalism, and vigilance. students who know how to enter and how to blend in. In an effort to make teachers and students more Vigilance in Protecting Our Community aware of the threat and better prepared to cope with We want to reduce property crime, maintain our an emergency of this kind, state Senator Pat Bates current low violent crime rates, enhance school safety, (R–36th District) has introduced SB 541, which would and mitigate the impact of homelessness. require that schools conduct lockdown or multiTwo of the largest categories of crime are drug option response drills at least once a year. crimes and property crimes. For this reason, one of In addition to signing on as a sponsor of SB 541, the the greatest challenges we face is a direct result of Orange County Sheriff’s Department has established Proposition 47. This proposition, which was given the a School Mobile Assessment and Resource Team misleading ballot title “The Safe Neighborhoods and (SMART), and we are working in the areas of juvenile 22

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OC REALTORS® COMMITTEES

diversion and early intervention. We tell parents that the Fourth Amendment—the one prohibiting unreasonable searches and seizures—does not apply to their children’s rooms. We strongly recommend that they look in their children’s rooms and know what their children have, what they do, and what they are interested in.

Photo by Marion Butterfield

Mitigate the Impact of Homelessness. Most of the homeless come from elsewhere; but once they are here, they are ours. We are proud of the way in which we have addressed the homelessness issue on the Santa Ana Riverbed. Our clean-up of the riverbed yielded 404 tons of debris, 13,950 needles, and 5,279 pounds of hazardous waste. We created Homeless Outreach Teams in North and South Operations; and we partnered with the Orange County Health Care Agency to coordinate effective response, outreach, and rehabilitative services. We have successfully gotten veterans off the riverbed and into services. And we are working to keep the riverbed from becoming repopulated. Because of the decision in Martin v. City of Boise, which is known as the “camping lawsuit,” you cannot enforce anti-camping laws against homeless persons unless you are able to provide a bed for each one. In other words, we can arrest for status violation only if there is shelter capacity. (The Idaho lawsuit known as Martin v. City of Boise stemmed from a Boise, Idaho, city ordinance that banned sleeping in public places. In this case, the court found that punishing people for camping or sleeping in public without providing them with any other place to go was illegal. Cities could no longer punish the homeless for sleeping outdoors on public property unless adequate indoor shelter space was available. According to an article that appeared in the Idaho Statesman on June 3, Marsha Berzon, one of three Ninth Circuit judges who heard Boise’s appeal of this ruling, observed that the high cost of housing, the lack of affordable care for people with mental illness, and the failure to provide adequate treatment for drug addiction had contributed to the worsening homelessness crisis. She added that jailing homeless people is both unconstitutional and, “in all likelihood, pointless.”)

Reduce the Prevalence of Drugs

An after-event analysis in traffic accidents shows that four of ten drivers who are involved in a fatal collision are drug impaired. To reduce the prevalence of drugs, we engage in collaborative drug enforcement, we have increased resources for crime lab drug analysis, and we

Orange County REALTORS® Local Government Relations–South Committee Vice Chair Kevin Smith (on the left) and Chair Lacy Robertson greet Orange County Sheriff Don Barnes following his presentation in Laguna Hills on July 8.

are educating young people and their parents about drug risks and trends. One of the challenges we face is an increase in the availability and use of illicit drugs. During 2018, the Orange County Sheriff’s Department seized 44 pounds of fentanyl, 72 pounds of heroin, 452 pounds of cocaine, and 1,420 pounds of methamphetamine. Fentanyl, a synthetic opioid that is thirty to fifty times more powerful than morphine, is being produced just south of our borders. The amount of fentanyl seized has skyrocketed from less than one pound in 2016 to 44 pounds in 2018, an amount that represents more than 10 million fatal doses and is enough to overdose the entire population of Orange County four or five times.

Enrich Partnerships

The Orange County Sheriff’s Department is working to enrich partnerships with federal, state, and local law enforcement and with public agencies, elected officials, community groups, and houses of worship. We need these groups to be co-producers of their own safety. What makes and keeps Orange County safe is not having pockets of people who commit crimes.

Maintain a Culture of Integrity, Service, Professionalism, and Vigilance

The Orange County Sheriff’s Department works to attract new recruits, to retain talented employees, and to ensure continued professional training for all employees. Simply put, our goal is for the cities we patrol to have the lowest crime rate per capita at the lowest cost to serve. n OC REALTOR®

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COVER STORY

Whether you worry about personal safety, earthquakes, cyber attacks, data breaches, mail fraud, or telephone scams, articles in this issue can help you rest a little easier!

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COVER STORY

Federal and state laws require that real estate agents and brokers protect confidential information and be prepared to respond quickly to data breaches. By Scott Reid

Photo: www.istockphoto.com/Choreograph

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DIRECTOR OF CYBER INSURANCE PROGRAMS, 360° COVERAGE PROS

o business or industry is immune to a cyber attack or data breach. Ninety-five percent of the Fortune 500 companies in America—as well as numerous government agencies such as the Internal Revenue Service, the Central Intelligence Agency, the Defense Department, and even the White House—have been hacked or had data compromised. Businesses of all sizes have fallen prey to cyber criminals, and the real estate industry is no exception. Real estate professionals are required to comply with state and federal data security laws, regulations, and standards that describe the ways in which data must be protected and define what constitutes a “data breach.” For example, in California, a data breach encompasses any way that information is lost, stolen, or inadvertently disclosed, including laptop theft, lost USB memory sticks or portable drives, a lost mobile phone containing confidential client data, and an email containing confidential information that is inadvertently sent to the wrong person—as well as the theft or improper disposal of paper documents.

provided by clients both during and after the termination of a business relationship. Information security risks should be addressed in the same way that you address other business risks. Your business property is insured against damage, fire, and theft. Your confidential information should be similarly protected.

Take the First Step

Although a Risk Assessment and Compliance Audit may bring to light several areas that need improvement, addressing some cyber and data security basics can increase security immediately.

Given the many ways in which business data can be compromised, protecting it can be a challenge. The first step is to acknowledge that your real estate business is at risk. Your clients and business partners—and state and federal regulators—all expect you to be able to safeguard confidential and private information. Also, the Code of Ethics and Standards of Practice of the National Association of REALTORS® explicitly acknowledges the obligation of a REALTOR® to preserve the confidentiality of personal information

Have a Risk Assessment and Compliance Audit

Having an independent, third-party risk assessment can help you identify potential threats; see where you are out of compliance with federal, state, and industry requirements for information security; and identify areas where you are most vulnerable. In addition, a third-party report can enable you to demonstrate to clients that you are taking steps to protect their data and defend your business against potential litigation or possible future regulatory fines and penalties.

Establish a Solid Cyber Security Foundation

n Avoid wire transfer fraud. Never move money based on a simple email. Always voice-verify banking and wire instructions in transactions. n Encrypt emails. At a minimum, emails containing sensitive or confidential information should be encrypted using your email provider’s encryption service. Continued on Page 28

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n Never use public wi-fi. Use a virtual private network (VPN) app on both your phone and your laptop when using wi-fi to prevent criminals and hackers from watching what you are doing and stealing your data or passwords. n Don’t click on suspicious emails. Email is the number-one way that spyware and malware are deployed. Never click on the links in or the attachments to emails. nB  ack up your data. In case your systems become infected or are held hostage, back up your files to the cloud. n Change your passwords. Stolen or weak passwords allow cyber criminals direct access to your computer and online accounts. Having complex, unique passwords for each application improves online security.

Evaluate Cyber and Data Breach Liability Insurance

Cyber insurance will not protect you against a cyber attack or data breach, but a good policy will enable you to survive one. Look for insurance that provides coverage for both cyber breaches and data breaches as well as broad coverage for first-party expenses, such as breach response, credit notifications, forensic analysis, public relations consultants, cyber extortion payments, business-interruption costs for loss of income, and restoration costs. In addition, the policy should also cover third-party expenses for violation of privacy laws, multimedia liability, regulatory fines, compensatory payments, and legal defense costs, as well as the costs of potential future lawsuits and settlements. Also be sure to find an insurance carrier that provides access to a Breach Response Call Center, or other telephone support, that is staffed twentyfour hours a day, seven days a week, throughout the entire year and is available even if a breach is only suspected. This call center should provide you with access to breach response team(s) and legal counsel, as well as to other resources to develop a response plan and help you begin response and recovery activities. Insurance cannot eliminate a data breach or be a replacement for data security; but it can provide a backstop of financial relief and access to support

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tools like the breach response call center. Having a separate insurance plan in place, specific to this exposure, is a critical component of your overall data breach preparedness. The response costs associated with minimizing the damage of a data breach or cyber attack can be extensive and can even put a company out of business. Cyber and data breach liability insurance is affordable and helps mitigate the financial hardship of a cyber attack and data breach by offering coverage to help you pay for the costs of an event. n Scott Reid is the National Director of Cyber Insurance Programs for Gallagher Affinity/360° Coverage Pros and is an early leader in the emerging field of cyber and data breach preparedness and prevention. Reid works with many leading trade groups and business coalitions—as well as with federal agencies such as the Department of Homeland Security, the Federal Bureau of Investigation, the Federal Trade Commission, and the Small Business Administration—to address cyber security as a national security issue.

Orange County REALTORS® is here to help! As if being a real estate agent or running a brokerage is not challenging enough, the threat of experiencing a cyber attack or some other form of data loss raises the stakes. Orange County REALTORS® offers exclusive, members-only access to an Info Safe Cybersecurity Compliance and Certification Program and a separate Cyber and Data Breach Liability Insurance Plan. Members need answer only a few short questions about their business to see their actual rates. Each program is implemented online and becomes effective within minutes. Premiums start at less than $20 a month. For additional information, visit www.360CoveragePros.com/OCRealtors Every real estate professional is at risk; but a cyber attack or data breach doesn’t have to be lethal. Planning, preparation, and insurance coverage can make it survivable.


COVER STORY

Even in this electronic age, some scammers choose to do business the old-fashioned way—through the mail. By Sabrina Blair DIRECTOR OF COMMUNICATIONS

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ost people go into a real estate transaction with the best of intentions: “I’m going to read everything before signing!” “I’m going to double-check all the figures and information to make sure they’re accurate.” That thinking probably lasts a few days into escrow, until you realize the enormous amount of paperwork that’s coming your way and, ultimately, just sign, sign, sign! After all the i’s have been dotted and the t’s have been crossed, you’re finally settled in your new home and grateful to be done with it all—that is, until you start receiving mail that reads: RESPOND PROMPTLY.

FINAL NOTICE. NOTICE OF PACKAGE ON HOLD. The stress comes screaming back! You thought everything was paid for and settled, but now you’re receiving multiple official-looking notices in the mail. Beware! An alarming number of businesses are targeting new homeowners with fake bills and notices designed either to collect money or to gather marketing leads. These companies are counting on your being so overwhelmed and preoccupied with your new home that you will haphazardly respond without question. New homeowners should be on the lookout for these or similar scams.

Notice of Package on Hold Quick Tip: If the notice does not identify a delivery company by name, it’s a fake. Have you ever come home to find one of those SORRY WE MISSED YOU tags on your front door? It’s frustrating when you are expecting a package but can’t get it because it’s still out on the truck or stored overnight in a warehouse somewhere. Many new homeowners are eagerly awaiting the delivery of furniture, an appliance, or something they ordered from Amazon. And in this day and age, it can be easy to forget what you ordered or when it is supposed to arrive. So when you get a notice in the mail of a “second attempt” to deliver, your first instinct is to call the telephone number on the notice and ask how to get your package. Well, hold on! Before you pick up the phone to call, take a good look at the notice you received. Does it state who the carrier is? If it doesn’t say FedEx, UPS, DHL, USPS, or some other reputable carrier, then it’s probably a scam. If you call that number, you are likely to regret it. These scammers are hoping you will call so that they can offer you a “free gift” or sic one of their salespeople on you. If you call them once, expect to be inundated with spam calls. I know it’s human nature to be curious; but trust me, you really don’t want to call that number! 30

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Recorded Deed Notice and Property Profile Quick Tip: Y  ou don’t need to purchase a copy of your deed. You will automatically receive one free from the county. All real estate transactions are a matter of public scam consists of a bill sent through regular mail. record, and the record is available from the The envelope is often marked FINAL NOTICE County Clerk. Because these records are public, or RESPOND PROMPTLY to get your attention. it is easy for would-be scammers to access them, Inside you will find a bill for $80+ along with a making new homeowners an easy target. Big data laundry list of information about you and your companies collect information of this type and will property. It will include your name, your property sell it to anyone for a nominal fee. address, the year your house was built, the square The Recorded Deed Notice and Property Profile footage, the purchase price, the transfer date, the Continued from Page 32

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property description, and the like. This information is included to give you a false sense that the paperwork is some sort of official document tied to your home purchase. What’s more, the senders will use confusing language in the letter, such as “for a copy of the only document that identifies you as the property owner,” you must complete and return with payment within thirty days. I don’t know about you;

Disclaimer

but as a homeowner, I want to make sure that I have a copy of the only document that can prove my ownership! And that is exactly what the scammers bet on. Fortunately, the homeowner has easy access to that document. In fact, a copy is usually mailed to the homeowner following the purchase of the property and can be requested directly from the Orange County Clerk-Recorder, if needed. n

The documents pictured on these pages are genuine and were received in the mail; however, the names and addresses on them have been changed to protect the privacy of the recipient. Our purpose in publishing these documents is to enable readers to recognize them readily and, thus, to avoid being misled by either their “official” appearance or the false sense of urgency they seek to convey. 32

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COVER STORY

One well-known telephone scam resulted in 896,000 reported contacts and cost 5,000 victims more than $26.5 million. By Sherri Butterfield

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hen Willie Sutton was asked why he robbed banks, he reportedly replied, “Because that’s where the money is.” But many of today’s most successful thieves no longer enter banks to rob people at gunpoint. Instead, they set up shop offshore, record a threatening robocall script or two, and use telephones to extort money and personal information from the people they contact and frighten. Phone scamming is a serious and lucrative business. From October 2013 through March 2016, perpetrators of one Internal Revenue Service (IRS) scam used the scripts shown here to make some 34

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896,000 reported contacts and cost 5,000 victims more than $26.5 million in an operation that was termed “the largest of its kind we have ever seen” by J. Russell George, inspector general for tax administration in the U.S. Department of the Treasury. Be wary of unsolicited and unexpected telephone calls from individuals claiming to represent the IRS, the Treasury Department, the Social Security Administration, or Microsoft Corporation. In each of these instances, your best defense is to avoid the call. Install caller ID on your phone and activate the

Photo: www.istock.com/Tero Vesalainen

WRITER AND EDITOR


COVER STORY

message-taking and voice-mail features. If a call comes from a person or telephone number you do not recognize, let it roll over to voice mail. When you review your messages, if you discover one from someone you need to speak with, you can return that call at your convenience. Otherwise, of course, you can simply erase the message or delete the call. If you do answer the phone and find yourself listening to a message of this type, hang up. Do not press any buttons other than the one to end the call. And do not return the call, answer any questions, or provide any personal information. Both the Internal Revenue Service and the Social Security Administration conduct official business by letter rather than by telephone. If someone unexpectedly calls claiming to be from one of these government agencies and threatens you, that is your cue to hang up immediately. If you are curious about the real source of a call, write down the telephone number and look it up on the Internet. Chances are you will discover that it is associated with a known telephone scam.

If you have genuine concerns about your tax status with the Internal Revenue Service, some aspect of your Social Security payment record or account, or your license with Microsoft, look up the authentic business telephone number for that government agency or corporation, initiate a telephone call, and ask to speak with a customer service representative. Taxpayers who receive calls from someone pretending to be an employee of the IRS should report the incident either by filling out an IRS Impersonation Scam Report on the Treasury Inspector General website at tigta.gov or by calling Treasury officials toll free at 1-800-366-4484. Persons who supply information and become the victims of identity theft or suffer monetary loss as a result may also wish to report the crime to local law enforcement. In Orange County, they can do so by contacting either their city police department or the Orange County Sheriff’s Department or by filing a report with the Orange County District Attorney. n

Sample Robocall Scripts n

I RS/U.S. Treasury Department, Call No. 1

n

I RS/U.S. Treasury Department, Call No. 2

n

S ocial Security Administration Enforcement

n

M  icrosoft Corporation Licensing

“This message is intended to contact you. My name is Dennis Gray, and I’m calling regarding an enforcement action executed by the U.S. Treasury intending your serious attention. Ignoring this will be an intentional second attempt to avoid initial appearance before a magistrate judge or a grand jury for a federal criminal offense. My number is 567-203-4082. I repeat, 567-203-4082. I advise you to cooperate with us and help us to help you.” “The issue at hand is extremely time sensitive. The number for you to call the IRS back is 352639-4460. Now, if you don’t return the call or we don’t hear from your criminal attorney either, the only thing we can do is wish you good luck as your situation totally unfolds on you as there is a legal notice filed against you by the IRS for tax fraud and tax evasion. Before the notice gets registered in the courthouse and before you get arrested, if you need any information or if you do have any questions, kindly call the IRS back at 352-639-4460. Thank you.”

“. . . lawsuit against you. An arrest warrant has been released on your name due to legal enforcement actions filed on your social security number for fraudulent activity. To get more information about this case file and arrest warrant from federal data base, call immediately at this headquarters number 323-530-1567. I repeat, 323-530-1567. Deputy social security officer is waiting for your call back.” “This is a very important call to notify you that your Microsoft Windows license has been expired on your computer so Microsoft Corporation has stopped the Windows services in your computer. To renew the Microsoft Windows license, will you please call 877-410-9611. I repeat, 877-410-9611. Thank you.”

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COVER STORY

Although there are a lot of misconceptions about earthquake preparedness, the biggest misconception of all is that it is pointless to prepare. By Michelle McCann

MYTH #1:

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arthquakes can happen at any time and without warning. For this reason, it is crucial to be ready before an earthquake occurs. When it comes to earthquake preparedness, there are a lot of misconceptions. Here are four common earthquakepreparedness–related myths debunked!

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The safest place to be in an earthquake is under a doorway. In modern homes in California, doorways are no stronger than any other place in the house, and standing in a doorway will not protect you from flying objects or falling debris. It is safer for you to crawl under a table or desk and hang on to it. The California Earthquake Authority (CEA), a nonprofit earthquake insurance provider established by the state, recommends practicing drop, cover, and hold on. n Drop: Wherever you are, drop onto your hands and knees. nC  over: With one arm and hand, cover your head and neck. If there is a nearby desk or table, crawl under it. If there’s no shelter, crawl next to an interior wall, away from windows. n Hold On: If you’re under shelter, hold on to it with one hand. If there’s no shelter, hold on to your head and neck with both arms and hands.

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Photo: www.istock.com/ asbe

COMMUNICATIONS SPECIALIST


COVER STORY

MYTH #2: It’s a hassle to prepare an earthquake kit. Earthquake preparedness doesn’t have to be complicated or overly expensive. Start by storing several gallons of water, some canned goods, and a manual can opener in an easily accessible place. In case of evacuation, individual family members should have kits they can easily grab and carry that contain essential items like water, first aid supplies, medications that are taken regularly, copies of important documents, a flashlight with spare batteries, and shoes.

MYTH #3: Earthquake insurance is too expensive. In California, there is always a risk of earthquakes. Traditional homeowner’s insurance policies do not cover earthquake damage. The common perception is that separate earthquake insurance is expensive, limiting, and complicated; however, the CEA recommends that you give earthquake insurance another look. Recent efforts have been made to offer more customizable deductible and coverage options. On the CEA’s website, www.earthquakeauthority.com, California residents can use the free calculator to obtain immediate insurance premium estimates. Visitors can input their own premiums, deductibles, and coverage of personal property to fit their budget.

MYTH #4: Because earthquakes are unpredictable, I shouldn’t bother to prepare for one. Although you may not know when the next big earthquake will occur, you will thank yourself for preparing should you find yourself in its aftermath. When a substantial earthquake hits, damage will be widespread and potentially more than first responders can handle quickly. For this reason, it is in your best interest to be safe, not sorry, and to be prepared. It is recommended that, following an earthquake, you avoid making phone calls, especially to 911, unless someone is seriously injured. Phone lines will likely be congested so it will be better for you to text rather than call friends or family members, but conserve your phone battery because you may not be able to recharge it. You should know how to turn off your gas if you suspect a leak and how to look for damage to electrical or water lines. And you should have a plan for cleaning up spilled chemicals or flammable liquids. For more information about how to prepare yourself and your home for an earthquake, visit the California Earthquake Authority’s website at www.earthquakeauthority.com. OC REALTOR®

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Photos: © 2019 KATANA Safety. All rights reserved.

COVER STORY

This personal security system provides three layers of defense, including the Katana Safety Arc, the Katana Safety App, and the recently introduced in-app feature Walk with Me. By Albert Ornelas DIGITAL MEDIA SPECIALIST

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eal estate is not generally thought of as a dangerous occupation; however, according to the National Association of REALTORS® (NAR) 2017 Member Safety Survey, 44 percent of female REALTORS® and 25 percent of male REALTORS® had experienced a situation in the past year which made them fear for their personal safety or for the safety of their personal information. Because September is REALTOR® Safety Month, each year, OC REALTOR® devotes a portion of its September/October issue to making REALTORS® aware of practices and products that will help them feel and stay safe. This year, the product spotlight 38

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is on Katana Safety, a device that attaches to a smartphone and provides three layers of defense, including the Katana Safety Arc, the Katana Safety App, and the recently introduced in-app feature Walk with Me.

Katana Safety Arc

Experts estimate one American woman is sexually assaulted every 98 seconds. Alarmed by this and other similar statistics, Katana Safety co-founder and CEO Todd Baldree began researching the personal safety market. Aware that a personal safety solution is effective only if you have it with you when you


The Katana Safety in-app alert button gives you 24/7 access to trained responders who will stay on the phone with you until you reach your destination. Although dialing 911 is only for life-threatening emergencies, you can use Walk with Me any time your surroundings make you feel uneasy or unsafe.

The Katana Safety Arc includes a silent alert button for discreet use, a quick-trigger tab that emits a loud alarm when pulled, and a quickrelease wristband that triggers a loud alarm if detached.

need it, he decided that what was missing—and needed—was an alarm and relay device that attached directly to the user’s smartphone, the one thing almost everyone carries almost all the time. Working with company co-founder Ben Holbrook, Baldree developed the Katana Safety Arc, the first of three layers of defense in the Katana Safety system. The Arc is both an audible alarm and a relay panic button in one ultra-slim device, and it is designed to attach to any smartphone (whether Android or iOS) or case. With it, you can sound a loud alarm or press a silent panic button with just the flick of a finger or by using a hidden wristband. Both alarms bypass your locked home screen to call the Katana 24/7 Safety Response Center. The Katana Safety Arc is available in a variety of colors. The suggested retail price is $149, with the service subscription being sold separately.

It offers 24/7 GPS tracking by professional operators when you are in a vulnerable situation and want others to know where you are and eases your anxiety by providing someone on the other end of the phone line who is prepared to dispatch law enforcement if necessary. As a Katana Safety subscriber, you can alert the Response Center when you sense that you are in an unsafe situation. Instead of calling a loved one, who might not know how to respond if the situation escalates, or immediately dialing Katana Safety App 911, which is generally reserved Downloading the Katana Safety App from either the App Store or the Google Play Store, will allow you to access the Katana Safety 24/7 for life-threatening emergencies, you can call trained responders Response Center. This Center provides subscribers with unlimited who will track your location until access to trained operators ready to respond in situations ranging you arrive safely at your intended from uncomfortable to critical. These operators track your location destination and end the alert. You during an alert, notify members of your Katana Safety Circle (which can end the Walk with Me alert at includes family and friends) regarding your whereabouts, and call emergency responders on your behalf. And they will stay on the phone any time by selecting “I’m OK” in with you until the crisis has been resolved or you feel safe once again. the app. Because this feature is intended to be used as often as Subscriptions to the Katana Safety App can be purchased for $9.99 a you need it, there is no penalty for month or for $99 a year. frequent use. To learn more about Katana Walk with Me Safety products and services, visit The new in-app feature Walk with Me was launched in April 2019 www.katanasafety.com. during Sexual Assault Awareness Month. OC REALTOR®

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THE ORANGE COUNTY HOUSING UPDATE

Demand Remains Sluggish

With fewer pending sales, the housing market is not as hot as it once was. By Steven Thomas REPORTSONHOUSING.COM

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ome mountain roads are extremely steep. When you try to ascend one of these roads behind the wheel of a car, you push the gas pedal all the way to the floorboard, the car’s engine revs loudly, and the car climbs sluggishly. You want the car to zoom up the mountain, but the speed of the vehicle is not entirely within your control. Making your way to the top takes time. Similarly, the housing market has been moving along sluggishly since the spring of 2018. In April 2018, demand (the last thirty days of pending sales) was off 11 percent compared to April 2017. By July 2018, it was off 13 percent. As the year continued to unfold, muted demand became the new normal. After hearing how slow the market had become in 2018, many homeowners eagerly waited for the Spring Market in 2019. Yet, muted demand was not just a blip on the 2018 housing radar screen. Instead, sluggish demand has continued to this day. Many experts have been talking about a robust second half to 2019. They point to the tremendous drop in interest rates as a catalyst to sharply increase buyer demand. Their thinking is that rates have dropped more than a full percentage point since last November, which has improved affordability dramatically. They are correct: affordability has improved considerably. The payment for a $650,000 mortgage has dropped from $3,489 per month at 5 percent back in November to $3,103 per month at 4 percent today. That’s a savings of $386 per month or $4,632 per year.

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The underlying issue is that, after dropping considerably in March, mortgage rates have been much lower than last year; but lower mortgage rates have not changed the number of pending deals at all. Demand has been lockstep with last year’s muted demand curve. Although lower interest rates have improved overall affordability, there are not as many buyers in the marketplace. For years now, everyone has heard that there are not enough homes on the market. Many have stated that, if there were more homes with FOR SALE signs in their yards, there would be even more pending sales and, ultimately, many more closed sales. That was pure speculation. Since May 2018, there have been more homes for sale compared to the previous year, yet demand has remained muted for fourteen months. For the second half of this year, there will be plenty of news stories about the numbers being better compared to last year. These stories need to be taken with a grain of salt. They will be comparing this year’s numbers to the second half of 2018, which were considerably muted, and interest rates climbed all the way to 5 percent by November. In that month, yearover-year demand was down by 23 percent.


THE ORANGE COUNTY HOUSING UPDATE

Figure 1. Demand at the end of July 2019 was up by 4 percent compared to July 2018, yet it was down 12 percent compared to what it was two years ago.

Figure 2. The active listing inventory in July 2019 was 12 percent higher than it was in July 2018 and 27 percent higher than it was two years ago.

Instead, it is better to compare this year’s active listing inventory, demand, and closed sales numbers to two years ago, when the market was much hotter. The 2017 market is the one that today’s sellers long for. Demand at the end of July 2019 was up by 4 percent compared to July 2018, yet it was down 12 percent compared to two years ago (see Figure 1). The active listing inventory was 12 percent higher than July 2018, and 27 percent higher than it was two years ago (see Figure 2). The expected market time was 91 days in July, compared to 85 days last year and 63 days in July 2017. In June 2019, closed sales were down 16 percent compared to June 2017, and down 6 percent from what they were during the same month in 2018. The moral to the real estate trend story is that, despite the incredible improvement in affordability because of low mortgage rates, buyer demand remains muted. Lower rates are not igniting a run-up in demand. Instead, there is an underlying theme that nobody is talking about. Homes appreciated handsomely from 2012 through the first couple of months of 2018, rising more than 70 percent. That rise has brought housing prices to a point where many can no longer afford to purchase and are sitting on the sidelines. With sluggish demand, for the remainder of 2019, sellers should expect fewer closed sales and a market where sensible pricing is crucial to finding success. n

Steven Thomas has a degree in quantitative economics and decision sciences from the University of California, San Diego, and more than twenty years of experience in real estate. His bimonthly Orange County Housing Report is available by subscription and provides housing market analysis that is easy to understand and useful in setting the expectations of both buyers and sellers. His website is www.ReportsOnHousing.com. OC REALTOR®

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Photo: www.istock.com/Winyuu

HALLOWEEN

Would a house with ghostly inhabitants be the answer to a home buyer’s dreams or the cause for a home buyer’s screams? By Sherri Butterfield WRITER AND EDITOR

REALTORS® know that prospective home buyers

have definite ideas about what they want and do not want in a home, even when they are unable to articulate their ideas clearly, and that some of these ideas may appear contradictory. For example, they may want a home with “a country feel” that has all the conveniences of an intown location. They may want a home with a large yard that requires little or no maintenance. And they may want an older home in a settled community that features all the very latest bells and whistles. The challenge, of course, is to narrow the field, to determine which ones of these ideas are the most important and will become the criteria on which the ultimate decision is based.

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To do so, a wise REALTOR® carefully discusses with the prospective buyer the family’s housing needs and budget; the geographic factors, such as convenient access to the freeway or to public transportation and proximity to a workplace; the desire for good schools (if the family has children of school age); the approximate amount that property taxes will add to the total monthly mortgage payment or annual cost; and whether there are other costs to be considered, such as those associated with a homeowners’ association or Mello-


HALLOWEEN

Roos taxes. And then the REALTOR® may select some typical examples for a virtual or an actual tour. During the tour, the REALTOR® takes careful note of the buyer’s comments and questions: “We need a larger kitchen.” “This house sits too near a noisy street.” “I would prefer something without so many stairs.” “I’ve heard good things about this school district.” “Is this backyard large enough for a swimming pool?” “Is this house haunted?” To be sure, that last question is a bit unusual; but several years ago, realtor.com® put online a survey asking home buyers how they felt about purchasing a haunted house. Somewhat surprisingly, of the nearly 1,400 people who took the survey, 35 percent said they had firsthand experience with the paranormal in that they had lived, at one time or another, in house they suspected was haunted. Mentioned among the certain signs that a house had ghostly inhabitants were levitating objects, actual ghost sightings, supernatural sensations, flickering lights, strange noises (such as creaking floors, slamming doors, or clanking chains), and unexplained warm or cold spots. According to the survey, 26 percent of respondents indicated that they would consider purchasing a haunted house, while 38 percent would not. Whether a buyer is interested in purchasing or avoiding a haunted house, how is a REALTOR® supposed to know where to go, what to show—and what to avoid? Among survey respondents, 61 percent thought a cemetery on the property might indicate ghostly inhabitants, 50 percent said that homes more than one hundred years old were definitely suspect, 45 percent believed that a series of quick transitions in owners signaled trouble, 45 percent perceived an otherwise unexplainable low price as an alarming sign, and 43 percent felt that close proximity to a battlefield might have made the property easy pickins for a restless old soldier or two. Of course, in haunted house hunting—as in all real estate transactions—there is the aspect of expectation. According to an old adage, “Seeing is believing”; but when it comes to ghosts, the reverse is sometimes true: believing is seeing. Recall, for example, Washington Irving’s tale titled “The Legend of Sleepy Hollow.” In this short story, the pedagogical protagonist, Ichabod Crane, is excessively superstitious, to the extent that he believes every tall tale and legend, including that of a decapitated Hessian soldier who rides forth in the hollow at night in search of his head.

“Mentioned among the certain signs that a house had ghostly inhabitants were levitating objects, actual ghost sightings, supernatural sensations, flickering lights, strange noises (such as creaking floors, slamming doors, or clanking chains), and unexplained warm or cold spots.” As a result, Ichabod is particularly vulnerable to seeing Brom van Brunt as the ghost of that soldier when Brom appears dark and “headless” in the hollow with his head—or is it a pumpkin?— resting in front of him on Daredevil, his horse. Because Ichabod believes in ghosts and expects to see one, he does—and is so frightened by this terrifying apparition that he rides rapidly away and is never seen in either Sleepy Hollow or the New York village of Tarry Town again. Among home buyers who believe in ghosts, 75 percent would be scared away from a home purchase by levitating objects, 63 percent would be deterred by objects that move unaided from where they were placed, 63 percent would be definitely dissuaded by ghost sightings, 61 percent want nothing to do with supernatural sensations, 61 percent would feel the same way about flickering lights or appliances that seem to come on or turn off without cause, 60 percent would pass on a home with persistent strange noises, and 34 percent would find unexplained warm or cold spots beyond their tolerance. But 26 percent of the survey respondents were a bit more skeptical and indicated that they could be persuaded to purchase a haunted house if the price was right. Of this group, 12 percent reported that they would pay full market price or more for one, 34 percent would be willing to make such a purchase at a discount of 1 to 30 percent, 22 percent would have the necessary courage at a deeper discount of 31 to 50 percent, and 19 percent would purchase a haunted house if it was discounted 51 percent or more. Among the survey respondents who were willing to buy a haunted house, the sentiment seemed to be, “There’s no place like home if the price is right—even if there’s a ghost in residence,” which begs the question: Does Orange County REALTORS® list Ghostbusters among its Affiliates? n

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PROPERTY TAXES

Understanding the parts of your property tax bill may make it less frightening. Before paying your bill, be certain that the charges shown on it are correct. By Jon Coupal

PRESIDENT OF THE HOWARD JARVIS TAXPAYERS ASSOCIATION

F

or many, the real scare this time of year is not the monsters at our doors on Halloween but the property tax bill in the mailbox.

Fortunately, as a direct result of Proposition 13, which limits increases in a property’s assessed value to 2 percent annually, most property owners have a good idea what their tax bill is before opening the envelope. However, like we do every year about this time, the Howard Jarvis Taxpayers Association (HJTA) reminds taxpayers to carefully examine their latest property tax bill. Although not common, assessors do make mistakes. Taxpayers should understand the various charges and make certain that they are not being assessed for more than they are legally obligated to pay. The best way to check a tax bill is to have your previous year’s bill handy for reference.

Typically, the property tax bill will show three categories of charges. They are the general tax levy, voted indebtedness, and direct assessments.

General Tax Levy The general tax levy is what most people think of when they talk about property taxes. It is based on the assessed value of land, improvements, and fixtures. This charge usually makes up the largest part of the tax bill, and it is the amount that is limited by Proposition 13. Proposition 13, passed overwhelmingly by voters in 1978, established a statewide uniform tax rate of one percent of assessed value at the time of purchase and limited annual increases in assessed value to no more than 2 percent. From a practical standpoint, this means that once the base year value of your property is established, the general tax levy cannot be increased

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Photo: www.istock.com/ Damir Khabirov

Checking the bill is especially important for those who bought their homes a few years ago, at the height of the market. If your home value is actually lower than the assessed value shown on the tax bill, you should consider applying for a reduction in taxes.

more than 2 percent each year. This allows all property owners to predict their property tax bills into the future and budget accordingly. The best way to check to make sure that your current general tax levy is correct is to compare it with the previous year’s bill. The increase should be no more 2 percent unless there


have been improvements to the property like adding a room to a house or if you previously received a Proposition 8 “reduction in value.” This bears repeating. Because the real estate market in many parts of California is recovering, many homeowners who previously received a temporary “reduction in taxable value” from their assessment

may now see an increase in their tax bill of more than 2 percent from last year. But in no case will the taxable value be more than the initial Proposition 13 base year plus 2 percent annually from the date of purchase. Although that may seem unfair, keep in mind that, while the reduction was only temporary, the savings you received when your property was worth less are permanent. Continued on Page 46

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PROPERTY TAXES

Continued from Page 45

If in doubt about the current value of your property, check sales of comparable homes in your neighborhood. If homes like yours are selling for less than the valuation on your latest bill, contact your county assessor and ask that the value and resulting tax be adjusted to reflect true current value.

Voted Indebtedness Voted indebtedness charges reflect the repayment cost of bonds approved by the voters. Local general obligation bonds for libraries, parks, police and fire facilities, and other capital improvements are repaid exclusively by property owners. Because a minority of the population is required to pay the entire amount, the California Constitution of 1879 established the twothirds vote for approval of these bonds. This assures a strong community consensus before obligating property owners to repay debt for twenty or thirty years. Until the year 2000, local school bonds also required a two-thirds vote, but Proposition 39 lowered the vote to 55 percent. (Of course, this did very little to improve schools, as had been promised.) Because the 55 percent requirement makes it easier to pass school bonds, many homeowners are seeing a significant increase in the voted indebtedness column on their tax bills. In some counties, parcel taxes may appear under the second category of property exactions even though parcel taxes are rarely used to repay debt. Parcel taxes are taxes on property ownership but are not imposed as a percentage of taxable value. Although there is no upper limit to the amount of parcel taxes you have to pay, the good news is that under Proposition 13, they still require a two-thirds vote.

Direct Assessments Ironically, property taxes go into the general fund and are used for local services unrelated to property. For services to property, such as sidewalks and sewers, we pay extra. These charges are known as direct assessments. Because of Proposition 218, the Right to Vote on Taxes Act, property owners must be given a meaningful say in approving new assessments. Before an assessment can be imposed or increased, property owners must be informed in writing and be given the opportunity to cast a protest vote on the new assessment or assessment increase.

For More Information For more information regarding property tax assessments, go to HJTA.org and click on Frequently Asked Questions. Then scroll down to “About Property Tax Assessments.” If you have a question about your property tax bill, you can contact your county assessor, county tax collector, or—in many instances—the phone number of the levying agency for each levy that is reflected on your bill. It’s your money, and you have a right to be certain that your bill is correct. n Jon Coupal is president of the Howard Jarvis Taxpayers Association (HJTA), California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights. Coupal’s column was initially posted online on October 25, 2015, and is reprinted here with his permission. He can be reached at www.hjta.org.

Monday, December 2, is the Deadline for Appealing Assessed Property Values

O

range County homeowners have the right to appeal the assessed values of their property taxes from Tuesday, July 2, to Monday, December 2, 2019.

Clerk of the Board Department 333 W. Santa Ana Boulevard, Suite 100 Santa Ana, California 92701

The instructions for filing an appeal in Orange County and all the forms needed to do so are available on the website maintained by the Clerk of the Board of Supervisors at www.ocgov.com/gov/cob.forms.

or mailed to

Persons filing an appeal in Orange County must use the state-mandated form SBE Form AH 305/OC. No other form will be accepted. This form does require an original signature. Completed and signed forms may be filed in person at:

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Orange County Assessment Appeals Board P.O. Box 22023 Santa Ana, California 92702-2023 At this time, no fee is charged for filing an appeal; however, property owners choosing to file an appeal must pay their property taxes by the date on which they are due to avoid being assessed a late penalty.


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