2010 Board President Anne Meczywor, 2010 MLS President Mark McIlquham and I were fortunate enough to attend the National Association of REALTORS Midyear meetings in May in Washington DC. While the weather was lovely, more important were the many, many new issues and emerging trends that we were exposed to during our stay. Here is my report on the highlights of this trip:
NAR remains in strong financial shape although it's been a difficult two years. In 2010 membership stands at 1,079,000, nearly 2 percent above budget. Against this backdrop, the Board voted to maintain NAR dues at $80 and keep the Public Awareness Campaign special assessment at $35 for the three-year budget cycle, 2011-13.
MLS Issues and Policy Changes
Photo Submission Policy
There emerged a debate at the National MLS Meetings about a NAR interpretation that banned local MLSs from requiring photos for listing submission. NAR’s legal department said they made a mistake approving MLS governing documents that required photos or mandated certain levels of listing information. In response from local MLS leadership at the meetings during the week, NAR changed their policy to establish the authority of MLSs to be able to require, as a matter of local discretion, submission of photographs, drawings, or renderings of listed property as a condition of inclusion in MLS.
Seller Disclosure Policy
NAR also established authority of MLSs to require, as a matter of local discretion, submission of legally required seller disclosure forms as a condition of inclusion in the MLS.
DOM and Price Change History
The MLS Committee also clarified that if DOM (days on the market) and price change information is collected by the MLS, those fields cannot be treated as confidential and may be provided to clients and customers in-person or via VOWS or MLS Portals (where clients sign-in); however, MLSs may prohibit inclusion of DOM and price changes in advertising, including IDX, by other participants. There was a request from the floor that DOM periods be standardized from one MLS to another.
Green Home Features:
GreentheMLS.org is a new website to help MLS's add green features to home listings, so that Realtors can promote these property features, and appraisers can start to adjust values based on sales data of other green featured homes. The commission reported that trends are showing green properties (newly built) sell at a 21% faster rate.
Down Payment Function in Listing Display Online
There is a new down payment resource company that researches all federal, state and local financing assistance available and adds the data into the MLS listing on IDX, so consumers can see what they might qualify for. There are billions of dollars available in funding, but no one knows how to access it. Money for different programs also runs out fast, so this company monitors and updates the data frequently and provides leads and info back to the broker for them to handle. Will have to look into the costs associated with such a service for consideration by the MLS Board of Directors.
Social Media Integration
Nationwide, MLSs are integrating social media into their service, so members can quickly and easily add and share their own listing info on Facebook, twitter and broker blogs. We addressed to FlexMLS reps.
.mls / .blc Domain Name Extension Project
There is a new alliance of several large MLS’s in a not-for-profit endeavor to create a .mls domain extension. The information about this project was released, and we discovered that it would be extremely costly for us to secure 2 domain names. We would need to join the MLS Domain Association for $500/yr, then pay a one-time fee of $800 per domain to secure it, and another $800 per domain per year to register it. $3,700 for 2 domain names the first year, $2100 each year after. If we don’t participate, competing MLSs can buy our region name. So, other MLS’s could buy Berkshirecounty.mls and westernma.mls. I also learned that NAR is currently working on rebranding the “MLS” term to because that cannot be trademarked, to “BLC” Broker Listing Cooperative. This would be trademarked, a .blc domain extension bought with restrictions allowing only REALTORS and REALTOR MLS’s to purchase the name. NAR would then launch a multi-year PR campaign to rebrand MLS in the minds of the consumer. The MLS Board will look into this, to see if that is a good use of funds or not. Consider that we already own:
BerkshireMARealEstate.com
BerkshireMLS.com
BerkshireMLS.org
BerkshireRealEstate.org
BerkshireRealtor.com
BerkshireRealtor.org
BerkshireRealtors.org
BerkshireRealtors.com
RSS (Real Simple Syndication) Feeds and IDX Data
NAR is poised to consider if agents using IDX feeds as RSS streams that consumers can subscribe to are consistent with MLS policy. There are objections to allowing IDX as an RSS feed because the forum is unsecure and doesn't have the requisite listing broker info displayed (users can determine how much info they see in the initial stream of data). New policy to be debated and released in November.
Indexing of IDX Listings on Main Franchise Websites
Realogy, parent company of Century 21, ERA, Coldwell Banker, and Sotheby's International Realty, is asking NAR to allow them to index IDX listings from multiple MLS's (every MLS where a franchisor is a member, basically all of US.) on their websites. This would result in the search and initial results appearing on the national franchisor’s site, and would link the full listing view back to the broker site that is actually a member of the local MLS. They are asking for a set of standard "first view" search results to be standardized and then used on national aggregator websites owned by C21, Coldwell Banker, etc. Arguments for allowing this practice say that this is how Google, AOL, and yahoo searches work.
Professional Standards Changes
NAR Directors Pass Sexual-Orientation Protections
The Board of Directors passed a change to Article 10 of the NAR Code of Ethics barring REALTORS® from denying equal professional services on the basis of sexual orientation or from discriminating against any person on the basis of sexual orientation. Standard of Practice 10-3 was amended as well to prohibit discrimination on the basis of sexual orientation in any advertisements for selling or renting property. The Code of Ethics change must still go before the NAR Delegate Body for approval at NAR's annual conference in November.
Refund of Filing Fees for Successful Mediation
NAR amended the Code of Ethics and Arbitration Manual to give associations discretionary authority to refund portions of parties' filing fees if the dispute is successfully resolved through mediation.
Communicating Commission Changes in Short Sales
NAR also amended MLS policy statement 7.23 that permits listing agents to communicate to other participants how reductions in gross commissions will be apportioned between listing and cooperating participants in a short sale. MLSs will now have additional discretionary authority to require listing participants to give cooperating participants written notice of the total reduction in gross commissions, and the resulting reduction in cooperative compensation.
REALTOR Associations held to same standards as REALTORS
In a separate measure, the Board took action to apply the same ethical standards to REALTOR® association that apply to their members. Under the change, associations are prohibited from making false or misleading statements about other associations. The board also approved procedures for addressing accusations of violations.
NAR Initiatives
REALTORS® Property Resource
Upon completion, the REALTORS® Property Resource will contain deep information on every property and parcel of land in the country. About 1,000 NAR members are testing the RPR software in 12 markets. Members are also testing the applications that will deploy the data on handheld devices. Once testing is completed, the 12 beta markets will be the first in which the database is rolled out. NAR continues to buy and license the public record data that will comprise the core of the database. The goal is to overlay all that data with data from MLSs. RPR’s contract now states that it will not license or syndicate MLS data. The information will be used solely for creating deep analytical reports - the hallmark of the product - for use by REALTORS®. Full roll-out is expected to take five to six years. There is much debate on the local MLS level about this project.
Legal Action Funding
Funding of $178,983 was approved for four cases involving a commission dispute, whether administrative fees charged by a brokerage violates RESPA, the legality of a brokerage's mortgage lending and title operations, and defense of a patent-infringement case.
REALTOR® University
REALTOR® University is the association's initiative for raising the bar in the profession by undertaking an accredited, degree-granting university. A blue-ribbon panel started work earlier this year on the initiative, which will result in a master's degree program with majors in real estate sales and marketing, real estate brokerage, and appraisal, among others. It's expected to take two to three years for the institution to become accredited. Students will access the REALTOR® University curriculum online. In addition to master's degrees, the university will eventually feature internship and job-placement programs, as well as an applied research center.
REALTORS® Federal Credit Union
The REALTORS® Federal Credit Union, launched last year, has $60 million in deposits, making it bigger than almost 80 percent of all credit unions after just one year, reported Tom Glatt, CEO. Other stats: 133 local associations, 24 state associations, and 18 MLS have their funds on deposit with the credit union, accounting for about $30 million.
REALTOR.com
The official property listing site remains far above its competition in site traffic, recording 12 million unique users in April. That was a record in the 14-year site history, according to NAR's Move Inc. board representative Cathy Whatley. (Move Inc. operates REALTOR.com on behalf of NAR.) The site enjoyed 24 percent growth over last year. With 17.5 million visits and 400 million page views each month, the site is seeing serious engagement. REALTOR.com's iPhone app, the fastest growing app in the real estate space with more than 700,000 downloads, gives mobile users access to all listings at the site. Consumers can add their own notes on each property, share, and post listings to Twitter and Facebook.
Houselogic.com has a new widget for local associations and REALTORS® to add free housing content on their websites and emails.
New buzz about online resources and competitors to research
Lots of talk about move.com, ePropertydata, commericalsource.com, imap, corelogic and homes.com.
AE Strategic Issues Report
There is a new report for local Association Executives that features the latest trend report and tools for local association staff and leadership to use in presentations. This research should assist real estate associations, brokers, sales associates, multiple listing services (MLS) and affiliated professionals in their strategic planning. This report focuses on 12 structural trends that are impacting all aspects of the real estate industry. They include changes in technology, personal behavior and broad generational shifts.
#1: Mobile: “Everything is going more mobile and we’re just at the start. In fact, we’re considering taking land lines out of our offices and having our agents use smartphones.”
#2: Social: “We have reached a tipping point with social media. To be successful in the future, you have to understand how to manage this new form of communication.”
#3: Local: Having extensive knowledge of a local market is inherently valuable. So much data is now available to the consumer, the challenges they face are now finding experts to qualify and interpret that information.
#4: Data: “The Internet and powerful search engines will challenge the future role of the MLS.”
#5. The ‘Splinternet’: “When posting information online, distribution trumps destination: It’s easier to put your data in front of the eyeballs than to bring those eyeballs to your data.”
#6. The Cloud: “It’s the end of the desktop as we know it.”
#7. Consumer Motivation: “Many consumers are rethinking the purchase of real estate. Their reasons for buying may be quite different than they were a few years ago.”
#8: Public Trust: “The biggest challenge our profession faces is maintaining public trust.”
#9. Agent Ratings: “Consumers now rate doctors and attorneys, and kids rate their teachers — can real estate agents be far behind?”
#10. Company Presence: “Every company is looking at reducing costs and real estate is a sizeable chunk of their budget”
#11. Collaboration: “Consumers are far more willing to share their private information than in the past. That indicates we may see more collaboration in the future.”
#12. A New Generation: “Putting our young people in charge of organizing their own meetings has been hugely successful.”
The full report can be made into a member presentation, added in video form to our online tools, or printed for reference. For more information www.AEStrategicIssues.com,
RAMCO, the new membership database system
A new National cooperative is being formed to create a responsive, online, local association membership database. This project will allow local associations to buy into a cooperative to purchase the software rights to the database. The Committee working on this formation states that the system will be "competitively priced", which might mean too expensive for us. This program is expected to launch 1st quarter of 2011 for beta sites. No prices yet. Our association is in desperate need for a new database solution to track membership, education and events, and social networking and member record information. We would hope that this system would allow a transition away from paper files requiring extensive procedures to comply with WISP regulations (data security).
Going Viral
There is a new group package for conferencing services for local associations that want to participate, http://info.conferenceplus.com/NARae. This might be a good option as it is an economy of scale pricing model and would enable local associations to host online meetings and conferences.
WAVE Technology Study for REALTORS
There was released a new product from WAVE group, whereby MLS's can join for free and then provide a WAVE annual report on technology to members as a benefit. Staff will look into www.ReTechnology.com to determine if this is a valuable member benefit for us to take part.
Legislative Issues:
NEW Call for Action
There is a new NAR Call for Action on two issues of concern mainly to practitioners working with investors. NAR will be asking members to urge their members of Congress not to penalize real estate partnerships in proposed tax changes to the carried interest of general partners in investment partnerships, and to vote against changes to Form 1099 filing requirements that could impose a substantial administrative burden on rental property owners. President Vicki Cox Golder exhorted members to participate in the CFA even if the issue doesn't concern them directly. "Just because an issue doesn't impact you," she said, "it's still important you respond because the next issue that comes up could impact you." Please goto www.RealtorActionCenter.com to respond.
REALTORS® Political Action (RPAC Donations)
RPAC donations are more than halfway toward the association's goal for 2010 and stand at 9 percent over where donations were at this time last year, said Chris Polychron, NAR's political fundraising liaison. The number of major donors is up 3 percent and they are aiming for 1 percent of members to become achieve donor status by 2015. Our Berkshire Board President, Anne Meczywor was hosted at the National Museum of Women in the Arts, as a new major “National Crystal R” donor for contributing such a significant amount to RPAC this year.
Broker Involvement Program
Membership in the program enables real estate agents to learn about legislative Calls for Action directly through their broker. This has increased participating in calls to action to more than 4,000, with 400 applications for brokers pending, said Bob McMillan, Member Mobilization liaison. The goal is to sign up 6,000 brokers by the end of the year.
Affordable Property Insurance Addressed in Hill Visits
Affordable Property Insurance Is Not Widely Available. Insurers have responded to recent natural disasters by raising premiums or declining to write policies in many parts of the United States. Because the standard homeowner’s policy does not cover flooding, windstorms or earthquakes, most Americans rely on the NFIP or a state program for coverage for natural disasters. Without a federal role, affordable property insurance would not be consistently available.
Short Extensions to the NFIP Do Not Provide Market Certainty. Since September 2008, Congress has approved six short-term extensions and allowed the NFIP to expire twice. Homebuyers and small business owners require certainty to make the long-term real estate investments that are critical to our nation’s economic recovery.
Taxpayers Are Now Subsidizing Underinsured Properties. Today, the federal government mostly reacts to natural disasters by providing financial assistance to victims. For example, following Hurricane Katrina, $26 billion went directly to underinsured property owners, according to the GAO. Those are taxpayer expenditures that would not have been necessary if affordable property insurance for these events was more widely available.
Forward-Looking U.S. Policies Will Reduce Taxpayer Burden. By becoming more proactive, i.e., ensuring that property owners have insurance as well as incentives to mitigate property against the full range of natural disasters, the federal government could reduce the amount of disaster relief taxpayers would have to provide.
CONGRESSIONAL ACTION SOUGHT: Adopt legislation that encourages the availability and affordability of property insurance, including a long-term reauthorization of the National Flood Insurance Program (NFIP) and natural disaster coverage.
Commercial Mortgage Markey Liquidity Addressed in Hill Visits
Commercial Markets Have a Strong Impact on our Economy But Face Liquidity Challenges. Despite providing more than 9 million jobs and generating billions of dollars in tax revenue, commercial real estate is still in the midst of a serious financial crisis. Many property owners are underwater and will face serious trouble refinancing the $1.4 trillion in commercial real estate loans that will mature by 2014.
Increase Credit Union Lending Caps. Credit unions are hampered by a business lending cap of 12.25% of total assets.
Term Extensions Could Save Performing Properties Facing an Equity Gap. Instead of requiring a refinance at the end of a loan term (and having to deal with a troublesome equity gap), lenders should be encouraged to extend the term of the current loan for commercial properties that can support their current debt service. Currently, lenders do not offer term extensions because they are wary of regulatory oversight concerns.
CONGRESSIONAL ACTION SOUGHT: Take action to enhance liquidity in the commercial real estate market to avoid driving down economic recovery.
Protecting Affordable, Safe Financing for American Families Addressed in Hill Visits
Without FHA, our economy could not be on the verge of recovery. FHA is not a subprime lender, has strong underwriting criteria to protect American taxpayers and has never required a federal bailout. FHA borrowers are not subsidized, and they pay both upfront and annual premiums. In 2009, more than 50 percent of first-time buyers used FHA, and nearly 80 percent of FHA’s purchase loans were to first-time homebuyers. FHA also serves those who need to refinance out of risky adjustable rate mortgages (ARMs) or subprime loans with high interest rates. In 2009, approximately 835,000 borrowers refinanced into lower interest rate FHA insured loans, saving them an estimated $1.3 billion.
Higher loan limits need to be permanent and available in all markets. Many argue that the FHA loan limit increases help only higher cost areas, but this is not the case. Currently, only 3 percent of FHA loans are above $362,750, and less than 2 percent are above $417,000. However, decreasing the current loan limits would reduce the availability of mortgages in 612 counties in 40 states, plus the District of Columbia. The resulting average limit reduction of more than $50,000 would have a dramatic impact on liquidity and could halt the housing recovery.
CONGRESSIONAL ACTION SOUGHT: Strengthen the FHA mortgage insurance program, make permanent the higher FHA loan limits and exercise caution before considering additional proposals that may have a profound adverse impact on FHA programs that serve such a critical role for our nation’s families.
GSE Reform and Loan Limits Addressed in Hill Visits
The GSEs remain critical to ensuring mortgage market liquidity. On September 7, 2008, the Federal Housing Finance Agency (FHFA) placed Fannie Mae and Freddie Mac into conservatorship. At that point, it was expected that the debate on the future structure of Fannie Mae and Freddie Mac would begin in earnest. However, with Congress’s attention focused elsewhere, legislation is not expected to be enacted until 2011 at the earliest. Higher loan limits need to be permanent and available in all markets. Despite the higher limits being extended through year-end 2010, their temporary nature continues to make lenders and investors wary of supporting them. Making the limits permanent at levels appropriate in all parts of the country will provide homeowners and homebuyers with safe, affordable financing and help stabilize local housing markets. Currently, the higher GSE limits are set to expire on December 31, 2010.
CONGRESSIONAL ACTION SOUGHT: Enact legislation to restructure Fannie Mae and Freddie Mac (the GSEs) in a manner that provides the federal government with a continued role in the secondary market in order to ensure mortgage liquidity in all markets. Enact legislation that makes permanent the higher GSE loan limit formula and caps in order to provide affordable financing for all borrowers in all markets.
Berkshire County Board of Realtors® -
99 West Street, Suite 200 Pittsfield, MA 01201-5845 413-442-8049 Sandra
J. Carroll, Chief Executive Officer - Sue
O'Brien, Member Services Administrator- Stacy Buhl, Office Clerk
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