Speaking of Real Estate
It’s common today for real estate brokerages to have systems in place for sending email alerts whenever there’s new or updated listings that customers might be interested in. it’s not new technology, and in fact the technology is arguably ubiquitous in the industry. Now imagine you get hit with a letter demanding you pay a fee for your use of that technology,
Although patent abuse seems like a straight-forward issue, getting Congress to agree on a solution isn’t easy because lawmakers are concerned about inadvertently hurting companies that hold valid patents and are entitled to patent protection within the law.
It’s against this backdrop that NAR took matters into its own hands and filed a claim with the U.S. Patent and Trade Office and in federal court challenging the validity of the email alert patent held by Data Distribution Technologies, LLC. NAR argued the patent is for ordinary, garden-variety technology and isn’t owed patent protection. The company, in response, reached out to NAR and proposed a settlement in which it agreed to stop suing, and threatening to sue, companies for using the technology.
It’s one small victory in a much larger problem with patent trolls, but, as NAR Associate General Counsel Ralph Holmen has said, it sends a message to other patent trolls that the real estate industry is prepared to fight back and has the means to win. Because of that, the chances of your business getting distracted with an expensive, stressful, and time-consuming patent battle for using basic technology is far less likely than it was a few weeks ago.
The patent win is a lead story in the latest Voice for Real Estate news video. Another top story is a look at what’s going to happen in Washington in 2017, when there’s a new president and Congress in town. What will be the top issues? NAR Chief Lobbyist Jerry Giovaniello says the issues for housing will be tax reform, secondary mortgage market reform, and reauthorization of flood insurance. All of these issues have been put on the back burner for the last few years, but now that the government is getting a new start in 2017, expect them to be taken up with new vigor. REALTORS® have a lot at stake in how these matters get addressed. Secondary mortgage market reform is crucial to the amount of money lenders have to make mortgages with, and tax reform always puts the mortgage interest deduction and other residential and commercial real estate tax incentives under a spotlight.
The video also looks at home buyer and seller trends over the last 35 years. It was in 1981 that NAR launched its annual buyer and seller survey, and it’s informative to see how buyer and seller characteristics have changed over the years. For one thing, FSBOs have been in retreat. They account for only 8 percent of transactions today, down from 15 percent, and repeat buyers are much older today on average, 53 compared to 36.
Also in the video is a look at how big the housing gap is in metro areas across the country. The gap is measured against the number of jobs created, so in places where a lot of jobs have been created, like San Francisco and Denver, the gap can be huge, because housing permits just aren’t keeping up. Historically, for every 1.6 jobs created nationally, there’s been a new house or condo permitted. Now some areas are seeing more like one housing unit permitted for every 6.5 jobs created, and in some markets its even much bigger. In San Francisco, for instance, the gap is 18.5 to one.
The video also gives a head’s up on a live webcast in late October on new FHA condo financing rules that are coming out. The rules will implement NAR-backed changes that are supposed to make FHA insurance easier to get for buyers. The webcast will walk you through the rule and answer your questions.
Watch The Voice for Real Estate.
I attended a safety seminar at the National Association of REALTORS® building in Chicago on Monday, expecting to hear the same old thing: pay attention to your surroundings, keep your head out of your phone, watch people’s microexpressions, yadda yadda yadda. But self-defense instructor Joe Rosner actually made some interesting points that aren’t necessarily groundbreaking but are worth repeating.
In honor of REALTOR® Safety Month, we invited Rosner to take part in a Facebook Live demonstration of simple safety moves that can save your life. (Watch the video above.) But on the nonphysical side, he gave some good mental pointers about what to do in a dangerous situation. Here are a few of my favorites:
- When calling 911, many people are flustered and don’t make a lot of sense. Remember to tell the emergency operator just two things: your location and that there is an “assault in progress.” It’s a purposefully vague statement in case you haven’t been attacked yet but fear for your safety. It also gets a fast police response, Rosner says.
- The “bystander effect” is real, which means people justify in their heads why they don’t have to take responsibility for helping someone. That’s why using a whistle or some other noise-making gadget to signify danger can be highly ineffective; people can say it might have been the whistle from a nearby soccer game. If you can, direct your call for help to a specific person nearby so they know they are responsible for helping you: “Hey you in the blue shirt! I’m being attacked! Call 911!”
- Stun guns aren’t good weapons. Why? Because they require you to get up close to the assailant to be effective — and what you need to do is run away. You’re better off trying to flee than fight at close range.
- Deception works. Point to anywhere on a building and say, “That’s a police camera.” Hail down the next car that passes by and say, “That’s my spouse.” Hold up your phone and say you have an app that sends photos directly to your local police department. Your attacker won’t know whether you’re telling the truth, and he might not want to stick around to find out.
- Ask yourself: Who is that person and why are they here? If you can’t come up with a logical explanation that makes sense, consider that a warning and get out of there as quickly as possible.
John DeSouza, president of Cressy & Everett Real Estate, a brokerage with more than 190 sales associates in 10 offices in Indiana and Michigan, will talk about how his company combines traditional and digital marketing methods to win listings and be a regional leader in a webinar his company is sponsoring on Tuesday, Oct. 4, at 11 a.m. Pacific time.
DeSouza will be joined by Mark Tepper of Matterport, a Silicon Valley 3D and virtual reality company. They’ll talk about how the brokerage combines traditional marketing with new digital tools in its marketing to stay ahead of the competition. Among the topics covered:
- Strategies for selling homes faster
- Digital vs. traditional marketing
- New tools to help your agents win listings
- How to attract and retain top agents
- Emerging trends in real estate
- The future of 3D and virtual reality
REALTOR® Magazine is promoting the webinar but has not participated in the development of the content.
- Date: Tuesday, Oct. 4
- Time: 11 a.m., Pacific time
- Cost: Free
When you’re trying to pay your bills each month, it’s hard to think about retirement. But there are two things that can help you retire when the time comes. The first is owning your own home. It can be good advice for your clients and it can be good advice for you, because your home is an asset that can provide a foundation for when you no longer have a steady income from work. And yet one of every five members of NAR does not own his or her own home. The second thing that will help is owning investment property. And here, about a third of NAR members don’t have this asset working for them.
Looking ahead to 2017, NAR will be launching a program to help you fill in the gaps about what you know about investment real estate so you can help yourself as well as your clients.
NAR President-elect Bill Brown said at the Leadership Summit he hosted a few weeks ago that we wants retirement to be a priority during his term in office, and his goal is to give NAR members this education resource to help them turn their real estate career into a successful retirement. You can expect to hear more about the program when it comes out.
Brown’s remarks are excerpted in the latest Voice for Real Estate news video from NAR. The video also looks at two public policy issues that are starting to have an impact on how you do business. The first has to do with small drones, which are now something you can use commercially as long as you meet federal requirements that took effect at the end of August 29. In the video, you’ll meet a real estate agent who hired a company to take drone video for a listing she’s trying to sell. She talks about how she thinks the video will help her. The second policy issue has to do with smart homes and the Internet of Things. The Internet of Things refers to the online collection of data from home appliances and personal devices, and smart homes refers to homes that have these Internet-connected appliances in them. The two go together.
NAR has launched a lab to look at smart-home technology and help companies design the products and the data they generate so they help owners, sellers, and buyers make smart decisions based on energy use and other performance measures. NAR’s focus on the issue comes at a good time, because the federal government is getting ready to launch a process in which it will determine whether rules are needed to govern the Internet of Things and, if so, what the rules should look like. NAR has commented on the Internet of Things before and it plans to comment as this process goes forward.
The video also looks at the latest home sales numbers, which NAR Chief Economist Lawrence Yun says are down because of the shortage of homes available for sale in many parts of the country. It also looks at the effort REALTORS® are making in the wake of Louisiana flooding. The video also looks at efforts by NAR staff to help kids go back to school with helpful supplies by working with the Boys & Girls Clubs of America.
Michael Cuevas, a sales associate with Fulton Grace Realty in Chicago, says that asking the right questions of a real estate agent is an important part of lessening anxiety for consumers concerned about the home buying or home selling process. After all, the real estate websites where most shoppers start their home search can’t give them all the specific advice they need. So hiring the right agent involves properly vetting them.
But there’s one question most consumers think they should ask, Cuevas says, that has no bearing on how effective an agent will be for their client: What company do you work for? From a recent blog post Cuevas wrote:
“Prior to the evolution of the MLS and most of the online real estate search sites, the company [an agent] worked for used to matter. In today’s market, nothing could be further from the truth. Real estate companies today, more or less, offer the same product as their competitors. It’s no different than shopping for a mortgage. Most banks will offer you the same rates, it just comes down to who provides a better level of service.
It’s the agent who will make the difference in a making a wise financial decision, not the company on their business card.
Just because an agent is associated with the biggest company in town does not make them any more qualified than the agent at a very small office. Some of the best [practitioners] work for the smallest companies. If your agent constantly talks about how big their office is and how many sales their office had, they most likely lack their own personal experience and have to justify it with leveraging their company’s statistics.”
Do you agree with Cuevas’ point of view? Let us know in the comments below.
One of the big challenges of real estate markets today is moving renters that want to buy into the homeownership column. Renters wanting to buy is the first step, but they have to come up with a downpayment and that’s where many are stymied. The job market is key, because everything starts with the availability of good paying jobs. Of course, a good paying job in Columbus, Ohio, is not the same as one in New York City.
NAR Research looked at renters’ ability to buy and identified the top 10 metro areas in the United States where a high percentage of renters earns more than they need to buy a home at the area median sales price. Not surprisingly, almost all of the metro area were in the Midwest and South, because in those areas, the gap between what people earn and what homes cost is narrower than it is in the Northeast and West.
Among the top 10, three are in Ohio: Columbis, Dayton, and Toledo. In these markets, almost 40 percent of renters earn more than enough to buy a median-priced home.
NAR looked at other criteria, too, and found that these markets were dynamic enough that jobs were being created.
Other top ten markets include Little Rock, Ark., St. Louis, and Atlanta. A couple were in Florida. Only one market, Ogden, Utah, was in a region other than the South and Midwest.
NAR’s research on these top 10 markets is one of the stories in The Voice for Real Estate news video for the week of August 15. Another story looks at tightening lending standards for commercial real estate by banks. For developers and investors, bank tightening will be felt especially in smaller markets, because it’s in these markets that bank lending is most important; in big cities, the lending options are more varied.
The video also looks at the rise of women in commercial real estate, among other statistical shifts the industry is seeing. The percentage of women among the newest practitioners in the field has almost doubled, which means the share of women could be quite a bit higher down the road, as those getting into the business now start gaining more experience, taking on bigger deals, and attracting more women to the profession.
Another story looks at NAR’s involvement in a recent White House conference on drones. NAR talks a lot about drones, something whose commercial use might seem remote to many real estate practitioners right now. But there’s a reason for NAR’s intense interest in the topic. It’s a new technology and it’s been important for NAR to work with the Federal Aviation Administration now, while it’s writing rules on the commercial use of the devices, to ensure the point of view of REALTORS® is represented. Given how important drones are likely to be for real estate marketing in the future (and also for appraisals, home inspections, and insurance adjustment, among other things), it’s crucial the rules be written in such a way that REALTORS® can use them, or work with companies that operate them, within a reasonable regulatory environment. As it is, the government’s commercial drone rule comes out in just a few weeks, so the issue is moving into the here-and-now.
Another issue NAR has been into quite a bit lately is wire fraud, because it’s a growing problem in real estate (downpayment are a tempting target), and the video points you to a notice you can include in your email signature line to remind consumers about precautions to take before sending sensitive information by email. The notice was written by NAR Legal Affairs and it’s an easy way for you to play a part in the broader effort to combat fraud. If one person is protected from sending money to a criminal in the mistaken belief it’s a title agent, a lot of good has been accomplished.
Access and share The Voice for Real Estate.
Ginni Field was aghast at the tragedy that befell a family friend in the last year and a half. The man, a veteran who fought alongside Field’s father in World War II, died with nothing — no money, no home — after he was taken advantage of by his son. The son had convinced his war-hero father, who was in his 80s, to transfer the deed on his home to the son, who then neglected to pay a single bill on the property. The home went into foreclosure, and the father lost everything. “This poor man, who fought in the Battle of the Bulge, had to move to Florida and live with his daughter because he had no money,” says Field, GRI, SRES, a real estate professional with Mike Chiesl Group in Carlsbad, Calif. She contends the emotional toll of the experience led to the death of her family friend. “He died a pauper.”
This type of abuse in real estate, where family members seize on their aging, sick, or incapacitated elders to take control of their property, is happening more and more, says Field, an SRES instructor who works almost exclusively with elderly clients. In the last 18 months, she’s seen about five examples in her community similar to what happened to her family friend. “It’s the most I’ve ever seen or heard of in this kind of time period,” she says, adding that victims of elder abuse in real estate are almost always 80 years old or older.
One in five seniors falls victim to financial abuse, whether that’s by family members or outside sources, and only a fraction of those cases are reported, according to a 2015 Consumer Reports article. Real estate fraud is a part of that abuse. So as a practitioner, what’s your role and what should you do if you sense your elderly client’s family is trying rip them off in a real estate transaction?First, Get Educated About Elder Abuse
In most cases, real estate professionals are the only ones who see abuse happening in real estate transactions, Field says. Because many elderly people are too embarrassed to report incidents in which family members attempt to take advantage of them to friends or authorities, you’re probably the only witness. So you need to know what to look for.
Field suggests consulting with the elder abuse division of your local police department — before you become involved in an incident with a client — and asking them what signs of abuse to be aware of as it pertains to the elderly in real estate fraud. One thing you’ll learn, Field says, is that if you’re the only witness, filing a complaint anonymously isn’t always the best course of action. You may need to be willing to go on the record if no one else can.
Barbara Fairfield, ABR, SRES, a practitioner at NextHome Gulf to Bay in St. Petersburg, Fla., who also teaches SRES courses, advises contacting other organizations to learn about elder abuse resources:
- ElderCare.gov, run by the U.S. Administration on Aging, will help you find state and local resources for elderly people who need help.
- Elder-AbuseCA.com can help you contact ombudsmen in your community who can give you advice on reporting incidents of elder abuse.
- PreventElderAbuse.org, the website of the National Committee for the Prevention of Elder Abuse, can offer you tips and resources for what to do if you suspect elder abuse.
“We can see if there are issues,” Fairfield says. An elderly person living with clutter, or if they’re unkempt, wearing wrinkled clothes, always have the shades pulled down, or have rodents in the house — those are all red flags that they are in hiding from someone, Fairfield suggests. When she sees someone living in these conditions, she knows it’s time to have a conversation about whether their family is involved in their lives and their real estate decisions — a conversation you should have with any elderly client anyway, she says.
“At this phase of their life, they can’t afford to make a bad financial decision,” Fairfield says. “So I’m going to ask them why they are selling, and I want to make sure isn’t anyone in the background pushing them to sell.”
A surefire sign that intrusive family members may be trying to take advantage of your client is if the client says they don’t want anyone knowing about their decision to sell, Field adds. “My alarms go off when someone says, ‘This is completely my decision.’ That tells me that they don’t trust family members. I don’t pursue that line of questioning any further, but I’m going to ask, ‘If there’s any kind of issue, how do you want me to handle it?’ And then I’m going to confirm that in writing.”Deal With Suspicious Family Members
You have to remember who your client is. If they have children who are attempting to mettle in the transaction — maybe they request to be present at every showing or by their parent’s side at every meeting with you — and your client has expressed that they don’t want them involved, you have to learn how to politely yet forcefully get them to back off. That’s why it’s helpful to have your client’s wishes in writing.
“I’ve seen agents being accused of interference by the kids, who want to control their parents,” Field says. “You have to be brave enough to be really blunt and tell the family members that they are not the owners of the house. ‘I need you to understand that my job is to protect my client.’”
You also should be prepared to suggest alternative options if your client seems to be being pushed into a sale by family members, Fairfield says. It may be the case that they could stay in their home with a reverse mortgage, which could supply the funds for retrofitting their property with safety features, making repairs they can’t perform on their own, or bring in home healthcare providers. You want to help them remain as independent as possible and reduce their risk of having to depend on a family member who seeks to control them, Fairfield says. “We’re all about options for these individuals, not just about listing their property.”Know If You’re Right for the Job
Not all agents have the right temperament and personality to work with the elderly, Field says. Many older clients require extra time to make decisions or extra explanation to understand their options. If they’re facing a tough situation with family, they need someone who won’t try to rush them through the process but who will be a guide for them. “Working in the senior market takes someone patience, empathy, and kindness,” Field says. “If you’re not the right person, find another niche.”
Fairfield says that for many older sellers, it could be their last real estate transaction. So that requires that you give it more importance and be willing to help them through difficult personal challenges with family if need be. “If you’re always focusing on your wallet, you’re focusing on the wrong thing,” she says.
Stop and ask whether anyone besides the seller has an emotional or financial stake in the sale of their property. That will speak volumes about whether you should be wary of intrusions on the transaction and if you’re prepared to handle them. “There are some people who haven’t spoken to their children in years and aren’t going to start now,” Fairfield says. “You want to know something like that so you can decide both whether you’re willing to deal with that kind of baggage and whether that could pose a problem down the line with the sale.”
Above all else, be prepared to step in on your client’s behalf if their family starts threatening the transaction and their best interests. “If you don’t do anything, you watch someone get everything taken away from them,” Field says.