Thank you to all the Berkshire and Massachusetts Realtors who welcomed a nation of Realtors to Boston this past week. The NAR convention and tradeshow was a hub of activity, from association and MLS meetings to great real estate training sessions. On a rainy, cold day, Realtors also participated in the big 5K race along some of the Boston marathon route and raised $100,000 for the Realtor Relief Foundation. Thanks to all who participated. If you missed the session and would like to learn more about industry issues, technology or just gain inspiration about your career in real estate, I encourage you to access session recordings (for a fee) at https://www.playbacknar.com/. Below is my report of action items on the governance side of the meetings:
NAR Strategic Plan
The NAR Board of Directors—led by 2018 President Elizabeth Mendenhall, adopted a five-year strategic framework to address NAR’s expanding role in technology and other arenas critical to real estate. The ideals of this plan:
- People have a right to safe, decent, and affordable housing.
- Thriving commercial and residential markets are critical economic engines of the country and key to healthy communities.
- Private property rights are foundational to the country.
- The opportunity for homeownership should be as broadly shared as possible.
- Entrepreneurs should have the freedom to pursue their business goals and succeed in creating the quality of life they desire.
- All REALTORS® ascribe to the highest standards of ethics and professionalism.
MLS Policy change approved: Enforcing cooperation through written certification of offer
The Board amended MLS Policy Statement 7.73 regarding the rights of cooperating brokers in the presentation of offers. This brings MLS policy in line with the Code of Ethics. Under the rule, listing brokers are required to provide written affirmation or notification to cooperating brokers on the disposition of their offer. The requirement gives associations the ability to impose disciplinary action against a listing broker who fails to present either written confirmation that the offer was presented or evidence that the seller waived the obligation to have the offer presented.
MLS Policy Under Discussion: Fair IDX Display
The MLS Advisory Board’s recommendation for “Fair attribution practices in IDX, VOW and third party aggregation,” which would require identification of the listing broker on all online displays of property information with a “searchable” link back to the listing broker’s website, is referred back to the Advisory Board for further consideration at its next meeting. NAR is currently in discussion with Google representatives to address concerns with online property searches and listing broker attribution. Any resulting information/resolutions will be shared with the MLS Advisory Board as part of its discussion.
MLS Policy Change Approved: Section 1 Waivers of MLS Fees, Dues, and Charges
The NAR Leadership Team used constitutional authority to adopt changes to MLS Policy immediately, rather than wait to have those changes consider by the Committee. Effective as of August 28, 2018, MLS’s ability to require a signature of the MLS participant on behalf of any affiliated licensee(s) requesting a waiver of MLS subscription fees is limited. Prior to this change, some MLSs were requiring individual waiver forms signed by all licensees monthly, which was creating an administrative headache and worked against the initial intent and spirit behind the changes to the MLS of Choice policy. The new language is as follows:
There was a detailed presentation by RESO, the Real Estate Standards Organization (the Berkshire MLS is a member) and we are compliance with the latest certifications. They presented a very detailed report about the ongoing and future importance of this project for brokers.
Patent infringement liability policy
The Board approved purchase of insurance for 2019 to protect the association, state and local associations, and association-owned MLSs from patent infringement actions, typically brought by so-called patent trolls that use overly generalized patents to extract fees from businesses.
America’s MLSs are Making the Market Work
There was an update on the Federal Trade Commission (FTC) and Department of Justice (DOJ) workshop held earlier this year to explore competition issues in residential real estate. The Council of Multiple Listing Services (CMLS) provided a whitepaper as input to the FTC, DOJ about the critical pro-competitive role of Multiple Listing Services (MLSs) in the American residential real estate industry. https://tinyurl.com/mlswhitepaper
New policy supporting remote notarization
NAR Directors went on record in support of online notarization, regardless of the technology used, and support the adoption of remote notarization across all U.S. states and territories, while protecting consumers’ personal information. They urged federal agencies to adopt remote notary services across the mortgage system.
Proceeding with ethics complaints when criminal litigation is also involved
Associations are allowed to continue to process ethics complaints when there is criminal litigation pending that involves the same facts and circumstances.
New policy supporting indexing of tax bases of capital assets
The new policy puts NAR on record in support of indexing the tax bases of capital assets, including real estate, for inflation. Doing so could lower capital gains taxes due on sale of the asset.
New policy supporting Opportunity Zones
NAR went on record in support of the Opportunity Zones tax incentive that was included in the 2017 tax reform act. Opportunity Zones have the potential to have a large impact on economically depressed areas by using capital gain tax reductions to attract long-term investment capital. The zones are designated by states and approved the U.S. Treasury Department.
Legal case funded to defend allegations of copyright infringement
Approved $60,000 to help defray legal expenses incurred by several brokerages and listing agents to defend themselves against a lawsuit filed by a firm that owns copyright registrations for architectural home designs and related technical drawings. The defendants created or hired a third party to create floor plans for the properties and submitted those drawings to the MLS and realtor.com®, and the plaintiff alleges that those floor plans violate its copyrights.
Issues Mobilization reforms: The Issues Mobilization Program helps local associations address smart growth, infrastructure and governmental policy changes. NAR has changed how they will give money to the local / state mobilization projects, requested. The policy was amended to:
- Increase from $50,000 to $100,000 the limit on grant requests that are eligible for consideration through the consent agenda process. The change will enable associations to move more quickly on fast-advancing local government policy actions.
- Increase the association contribution requirements to ensure associations have “skin in the game” when using mobilization funds.
- Limit grants for coalition campaigns to no more than 50 percent of the total campaign budget unless the applicant association is active in the coalition campaign, and set expectations that associations will take an active role in coalition campaigns, regardless of the level of funding.
- Require grant applicants to provide more detailed guidance to help the Issues Mobilization Committee determine whether the requested funds will serve REALTORS®’ interests. To date in 2018, NAR has awarded 36 grants of $50,000 or less and 10 grants between $50,000 and $100,000.
Financial education in schools
State and local associations are encouraged to support financial education for school-age children and young adults. The plan is an opportunity for NAR to show its commitment to ensuring greater access to the tools needed for financial stability and, ultimately, sustainable homeownership.
Broad Review of NAR Governance
A new presidential advisory group (PAG) will look at what changes, if any, should be made to the structure of NAR’s governance system. The PAG’s work covers only governance at the national level and will not delve into state and local association governance. The goal is to ensure NAR’s structure supports the efficient, nimble, and transparent operation of the association; fully engages the experience, expertise, and talent of its members; and positions the association to act effectively in the years ahead.
Top-level Internet domains:
Ken Burlington, chief operating officer of REALTORS® Information Network, reported that NAR and Second Generation Ltd. have registered more than 13,000 .realestate addresses during the member pre-sale for the new top-level internet domain, which launched Sept. 18. Members of the general public will be able to purchase .realestate addresses beginning Nov. 26 through more than 30 registrars. Burlington also reported that more than 150,000 .realtor™ addresses have been registered since that top-level domain was launched.
Suzanne Mueller of Move, Inc., reported on consumers’ growing use of realtor.com, the only consumer-facing listing site that partners with NAR. She said monthly unique user traffic has doubled since 2014, to 63 million people each month visiting and viewing two billion pages. The site also has industry-high engagement, with consumers visiting 1.5 times more pages and spending 1.3 times more time on the site than other sites.
Beginning Nov. 7, agents across the country can raise their visibility among consumers in targeted markets with Local Expert℠, a new turnkey digital marketing solution from realtor.com®.
Realtor Party Update: Strengthened credentials and campaign rules
NAR Directors strengthened the requirements for candidates for elected NAR office. Going forward, candidates must now have a credit score of at least 650. In addition, candidates may not display campaign materials on television channels distributed to hotel rooms or on video screens in public areas of hotels during NAR events. The Credentials and Campaign Rules Committee will provide all responses to campaign-related questions regarding rules—but not campaign strategy—to all candidates. In our public campaign reports, here is a tally by numbers:
Fundraising: Look at what PAF and RPAC funds have done this year. Invest Today!
- 2018 RPAC Fundraising: $33,211,078 = 96% of the 2018 goal, 33% participation
- President’s Circle Membership: 1,251, raised $2.5 M, 19 Candidates & 4 Committees
- Major Investors: 8,229 = 95% of the 2018 goal
State & Local RPAC Mobilization
- 408 State & Local Independent Expenditures Campaigns for $10,347,958 expended
- 56 State & Local Issues Mobilization Program for $14,041,843 expended
- 36 Local Calls for Action, 48 State Calls for Action, 3 Federal Calls for Action:
- REALTOR® Party Mobile Alerts: 188,403 Subscribers
Funds Given to State and Local Association Outreach, Issues Mobilization / Advocacy
- 110 Diversity Grants for $289,550
- 72 Housing Opportunity Grants for $200,270
- 52 Placemaking Grants for $131,900
- 98 Smart Growth Grants for $246,975
- 40 Land Use Initiative Projects for $761,484
862 Associations Received NAR funding YTD; Having 3,548 programs completed
- 25% to assist with raising RPAC funds
- 33% on Campaign Services
- 27% on Community Outreach
- 15% on Member Involvement
John Smaby, a second-generation Realtor® from Edina, Minnesota, was installed today as 2019 president of the National Association of Realtors® during the 2018 REALTORS® Conference & Expo. NAR also installed its 2019 president-elect, Vince Malta. First vice-president, Charlie Oppler. Treasurer, John Flor. Vice-president (association affairs) Brian Copeland. Vice president (Advocacy), Tracy Kasper, and Elizabeth Mendenhall, immediate Past President.
Hot Topics: Appraisal
A panel discussion clarified the misconception that real estate professionals are prohibited from speaking to appraisers. Real estate professionals are encouraged to communicate with appraisers in a professional and productive manner, as relevant information from real estate professionals may help an appraiser independently arrive at an opinion of value.
Hot Topics: Mobility
Industry experts and researchers discussed the future of mobility and its impact on real estate during the Emerging Business & Technology Forum. Automobiles have shaped the way we build cities, roads and houses. The rise of the automobile led to the rise of suburbs and a commuting population. However, by the year 2030 it is predicted 70 percent of the world’s population will live in urban environments (you can check this out and the other estimate statistics), ridesharing services abound, automated cars emerge, could drunk or distracted driving become a thing of the past? What does that mean for how build cities and move people going forward? Consider this: In the 1990’s, 95 percent of 16 year-olds had a driver’s license. Today, that number is just 76 percent.
Top Ten Issues Affecting Real Estate
Based on a session at the Conference, this list identifies the most pressing trends and challenges that will impact the housing and commercial real estate market now and in the years to come. The list is divided into two groups: issues the organization believes the industry needs to be thinking about in the coming year and issues that will be important over the next 10 years. Here are the two lists:
Current Issues: “When it comes to politics, CRE tries to illuminate rather than advocate,” said Kelly. “However, we think it is obvious that the dysfunctional state of our political discourse and our unwillingness to compromise on issues stand in the way of problem-solving – problems like the ones on this list.”
- Interest Rates & the Economy
- Politics & Political Uncertainty
- Housing Affordability
- Generational Change/Demographics
- E-commerce & Logistics
Longer-term Issues: “It is widely known and documented that as infrastructure deteriorates, so do the local neighborhoods and communities,” said panelist Julie Melander, Vice President-Portfolio Management at Carter Validus. “The reverse is also true; in regions where infrastructure is invested in we see a growth in population, an increase in business investment and a rise in property values.”
- Disruptive Technology
- Natural Disasters & Climate Change
- Energy & Water
Homeownership: As discussed at our Housing Summit, wedding ring not required: Single people and unmarried couples are driving today’s homebuying market.
- Nationwide, first-time buyers made up 33 percent of all home buyers, a decrease from last year’s 34 percent.
- Sixty-three percent of recent buyers were married couples, 18 percent were single females, nine percent were single males, and eight percent were unmarried couples.
- Twelve percent of home buyers purchased a multigenerational home, to take care of aging parents, because of children over the age of 18 moving back home, and for cost-saving.
- Eighty-seven percent of buyers recently purchased their home through a real estate agent or broker.
- Ninety percent of buyers would use their agent again or recommend their agent to others.
Nearly 10 percent of Realtors® reported an increase in property values located near marijuana dispensaries, according to a new report discussing the impact of marijuana legalization on residential and commercial real estate released during a session titled “High Times in Real Estate”. Great session, we hope to replicate here. This is from NAR’s new, free report, Marijuana: A Budding Issue. (too many puns!)https://www.nar.realtor/reports/marijuana-and-real-estate-a-budding-issue
- Currently, only one to two percent of residential respondents where marijuana is legal were aware of their MLS containing a specific marijuana field.
- One percent of members were marijuana specialists in residential real estate.
- About one-third of members had seen addendums added to leases which restrict growing or smoking on properties.
- More than three-quarters of members have not seen a change in residential property values near dispensaries.
Economic Outlook / Home Sales:
While challenges face many of America’s commercial real estate markets, according to NAR’s Chief Economist Lawrence Yun and Dr. Sean Snaith, Director of the University of Central Florida’s Institute for Economic Competitiveness, there is a bright year ahead.
In the residential world, consumers should expect home sales to flatten and home prices to continue to increase, though at a slower pace, according to a residential housing and economic forecast session. Housing affordability was also discussed by both panelists. While the U.S. is experiencing historically normal levels of affordability, potential buyers may be staying out of the market because of perceived problems with affordability. Looking to next year, Yun said very stable.
With both population growth and job growth, it is clear that we are not producing enough houses. Since this is a local issue NAR announced a new website where Realtors® can go for information on how to advocate for increased supply in their communities. https://realtorparty.realtor/state-local-issues/issues/housing-supply-shortage
National Disaster Agreement with FEMA:
In the Regulatory forum, NAR President Elizabeth Mendenhall and FEMA Administrator Brock Long signed a Memorandum of Agreement on Natural Disaster Preparedness. This represents a partnership effort between FEMA and NAR to educate and help the nation better prepare for disasters and allows Realtors® to continue supporting and building the Realtor Disaster Relief Fund. It’s a pivotal part of our efforts to promote long term solution to flood insurance.
Realtor Relief Run Raised $100,000
Congratulations to the volunteers, walkers and runners who’ve raised $100,000 this week for the Realtors Relief Foundation Run. The foundation has donated $29,000,000 in help to Realtors and their families who have suffered from disasters in recent years.
Don’t forget to use your Realtor benefits – I was wowed to learn that more than 800,000 REALTORS® saved $60 million in one year alone by taking advantage of at least one offer through NAR’s REALTOR Benefits® Program. You can save time and money with savings and special offers from industry-leading companies including FedEx, FCA US LLC (including Jeep®), DocuSign, Intuit® (QuickBooks® Self-Employed and TurboTax®), and Dell. https://www.nar.realtor/realtor-benefits-program
Free, Professional Agent Website from NAR Partnership with Placester
NAR has partnered with Placester to give all REALTORS® a beautiful and professional real estate website for free. The NAR version is updated with cutting-edge design, professional content, and more. https://placester.com/websites-for-realtor-benefits-program/
Commitment to Excellence
NAR introduced the “Commitment to Excellence” program that allows REALTORS® to evaluate their own skills get additional training and obtain the highest levels of professionalism. Members will get started by logging-in to www.C2EX.realtor and taking the self-assessment that measures their proficiency in each of the elements of professionalism and based on their results, the platform will generate customized learning paths, recommend experiences, and provide tools and resources to increase their knowledge and enhance their skillsets.
The Commitment to Excellence Program will develop and enhance eleven competencies that indicate a REALTOR®’s commitment to ethics, advocacy, technology, data privacy, and outstanding customer service. These REALTOR® C2EX Competencies will include the following:
- Being current and knowledgeable about the laws, regulations and legislation affecting the real estate disciplines the REALTOR® engages in, and about real estate in their community generally.
- Understanding the Code of Ethics is a living document, and keeping themselves informed about its duties and obligations on an ongoing basis.
- Providing equal professional services to all consistent with Article 10 of the Code of Ethics.
- Advocating for property ownership rights in their community, state and nation.
- Acknowledging and valuing that honesty and integrity are fundamental and essential to REALTORS® being known as consumers’ trusted advisors.
- Becoming and remaining proficient in the use of technology tools to provide the highest levels of service to clients, customers and the public, and facilitating cooperation by sharing accurate, current information with consumers and with other real estate professionals.
- Keeping up-to-date on laws and regulations governing data privacy and data security, and taking necessary and appropriate steps to safeguard the privacy and integrity of information entrusted to them.
- Committing themselves to enhancing their knowledge and skills in the real estate areas of practice they engage in on an ongoing basis.
- Providing superior customer service.
- Appreciating that courtesy, timely communication and cooperation are fundamental to facilitating successful real estate transactions, and to building and maintaining an impeccable professional reputation.
- (Additional Module For Brokers) Creating and maintaining an environment that promotes excellent customer service consistent with these standards.