Posts belonging to Category Business Practices



The Changing Face(Time) of Real Estate

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Gone are the days of MLS books and driving around neighborhoods to find the perfect home to buy. Through technology, home buyers are able to search for a home and have financing completed all before talking to a REALTOR®. According to NAR, 100% of homes purchased have been viewed online.

For several weeks, I was working with clients who were relocating to Tallahassee from Fort Worth, Texas. According to the buyer, “It’s very stressful trying to find a house when we live in another state. Traveling back and forth for house hunting gets very expensive very quickly.”

Not only would travel become expensive, but the houses that met their criteria were going quickly. They would find a potential home and before they could book at flightto come see it in person, there would be a contract or multiple offers in place. After seeing Rebecca’s disappointment and feeling her frustration, I knew that we had to take a different approach to this fast-moving, tech-heavy, real estate market. We implemented a new plan. We were determined to get a contract in on the perfect house. 

And so it began! A house would come on the market, I would go to the property and FaceTime the buyers. FaceTime, for those who aren’t familiar, is a video conferencing feature on Apple devices. This new strategy was working. Houses that they thought they liked from pictures were soon eliminated through our “real time” tour. Let’s hear from the buyers again: 

FaceTime allowed my REALTOR® to show me houses in Tallahassee while I was still in Fort Worth. It’s different than a virtual tour. It’s a live tour and she was able to answer questions, give me a closer look at things, and look at things that aren’t normally shown in pictures. FaceTime allowed us to do that. It’s really an invaluable service. 

It wasn’t long, thanks to our new approach, that we found the perfect house and a contract was accepted! Embracing FaceTime in my business has opened up more options for my buyers who can’t be on the property personally. 

Jamie B. Bellamy
Roberts & Co Real Estate Services, LLC

Legal Update: Emails Can Get You Into Trouble

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It is a crime to tape record a conversation in Florida without the permission of the other person involved. It is not a crime to share an email that is sent with no expectation of privacy. But when the contents of the email may constitute a crime, that communication may put you in jail and get a million dollar judgment against you. 

This is the case with antitrust. Some people, even after decades of education and reformed practices in real estate, think there is a minimum commission for REALTORS® to charge. Some think that there is a “standard” split. Some think that the Board of REALTORS® or the MLS corporation suggests commission amounts or commission splits. Some think it is okay to call for a boycott of other real estate professionals. None of that is true. Any REALTOR® who promotes that picture is facing civil and criminal penalties. 

If you do not like the offer of compensation related to a listing, do not work it. Spend your efforts on tasks that will award you better, if that is your choice. 

But it is illegal for you to call for a boycott of that brokerage that offers you less than that which you somehow think is “standard.” There is no standard. 

There was a time when lawyers had a minimum fee schedule, for certain tasks. It was generally put out by the local Bar associations. That was illegal price fixing and stopped. 

Now there is news that some currency traders conspired to set the value of certain currency or matters related to that. If proven true and that it violated the antitrust laws, those individuals may be jailed and fined, and their companies may be fined and subject to a large judgment, which is automatically tripled. 

And when a REALTOR® emails or speaks antitrust comments, he or she puts at risk every other REALTOR®. The actions of one REALTOR®, when viewed as in concert with other REALTORS®, may get all of them sued, and the Board put in harm’s way. 

It is undisputed that the Tallahassee Board of REALTORS®, CATRS, Florida REALTORS® and NAR are intolerant of any hint at price fixing, split fixing, boycotting, or other conduct that might be anti-competitive and may be illegal under antitrust laws. 

So, repeat after me:

  • There is no standard commission.
  • There is no minimum commission.
  • There is no standard split of commission.
  • There is no boycotting because of compensation issues.
  • And every REALTOR® is free to work or not work on any listing, for the compensation offered. 

If you have any questions, visit NAR’s website for more details.

Joe R. Boyd
TBR Legal Counsel
Board Certified Real Estate Attorney
Boyd & DuRant, P.L.

REALTOR® to REALTOR®: Back to Basics

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Have you ever noticed how successful you are when you focus on the basics in any undertaking? 

Think about when you bake a cake. If you leave out just one ingredient or over-mix the batter, the project is usually a flop. Or in T-ball, where coaches preach three rudiments: hit the ball, catch the ball, throw the ball—the team that practices these fundamentals consistently is very likely a winning team.

We have essentials to follow in good tooth care. Remember the childhood song, “Brush your teeth, round and round, circle small, gums and all?” As adults, we often neglect flossing, brushing longer than 20 seconds, or cleaning our teeth at bedtime. 

Fundamentals are especially important in relationships. Taking time to really listen, apologizing when we’re wrong (even when we’re not wrong), showing appreciation, providing moral support during challenging times, and remembering special occasions like birthdays and anniversaries.

In learning a new skill or trade, we pay close attention because we want to master the fundamentals. We practice until the process becomes mechanical. Unfortunately, after a time we perform many tasks, such as driving five-thousand-pound vehicles, changing baby diapers (especially boys’!), chopping with sharp knives, or performing our REALTOR® duties on auto-pilot. Our lack of attention and focus can lead to disaster!

Do you recall the fundamentals that you learned when you first became a REALTOR®?

  • Set goals in writing for the day, week, month, year, two years, three years, five years, and ten years. Yes, even if you’ve been in the business for 30 years! Set goals and refer to them daily.
  • Network. Network. Network. Get out of the office and meet people!  Put your business card into the hands of everyone you encounter. You’ll be surprised how willing people are to engage with you when you’re warm, funny, and cheerful—when you make them feel special.
  • Attend monthly Chamber meetings, economic development and planning events, and weekly TBR breakfasts; volunteer for community outreach programs.  You’ll have fun while planting seeds for your business.
  • Ask for an appointment! This is HUGE. Don’t just send out information if you can possibly set up a face-to-face meeting. Experts have found that meeting a potential client in person is much more likely to result in a contract.
  • Have a plan when you make a presentation, whether in person or by electronic means. Don’t just wing it! Make your clients feel that you went to great lengths to prepare for your meeting with them. 
  • Stay in touch with existing and potential clients on a regular and frequent basis. Use a program like Top Producer to assist in managing your customer base. Send out postcards or letters to remind your clients and potential clients that you’re ready, willing, and able to serve them and their family and friends. Ask them to refer everyone they know to you. Do some “farming.”
  • Attend continuing education classes to keep up with the constant changes in our profession, and to network with other professionals. Court builders, lenders, and other REALTORS®—they are your best customers.
  • Make sure that YOU are a team player and that you’re working with a supportive team. This is imperative if you want to be a successful REALTOR®.

Now get out there and turn over every rock! 2015 is your year!

Constance Hardwick
BlueWater Realty Group

Don’t “Short Sale” Yourself

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Who wants to become a REALTOR®? You want to show houses? You want to write contract offers? You want to place your sign in the yard? Well, not to bust your bubble, but so do all the other agents in town. So the question is, what do you do to set yourself apart?  

As a new REALTOR® myself, my biggest challenge has been getting new customers and keeping the existing ones engaged. However, in less than one year of practicing, I have found out that with creativity, commitment, and consistency, I can overcome that challenge. Here are three ideas to help you overcome your challenge(s):

#1. Find or create your own niche. Think outside the box, because everything doesn’t work for everybody. So find something that you love doing and that you’re efficient in doing and JUST DO IT! For me, I started doing homebuyer education seminars for first-time homebuyers. It’s a great way to educate potential buyers on the market and the home-buying process, as well as position myself as an expert in the field for first-time homebuyers.

#2. Build your database. After days of calling your sphere, many of us have exhausted our contacts. Well, that’s no excuse! Call expired listings, FSBOs, or just start calling out of the phone book (don’t forget to check the Do Not Call Registry). But be committed to make calls every day at the same time of the day—consistency matters. I have committed to making calls for two hours on weekdays. While the task seems daunting now, my pipeline is filling up with leads which will convert to clients and referrals.

#3. Follow up. After you have made the commitment to do both #1 and #2, you must follow up. Repeat steps #1 and #2. Follow up with your leads and your clients and…repeat steps #1 and #2! I know it sounds redundant and it is.  Don’t reinvent the wheel—if it works, work it! If you are consistently doing steps #1 and #2, you will always have follow up to do. Commit to a time of day that you only do follow-up, via call, email, or personal visits. I have a special tray that I place all my follow-up in, and I work on it twice a week. I had one lead that I followed for two weeks, and it got me a listing.

So, new agents, for every action you don’t do to build your business, another agent will. Don’t “short sale” yourself.  Find your niche, build your database, and follow up! 

Robyn Yant
Keller Williams Town & Country Realty

Threatened and Endangered Species

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Do Your Due Diligence: Environmental Assessments of Commercial Properties 

Bordered by water, but attached to the continent—almost an island, but not quite—Florida offers us a diversity of climates and temperatures, which results in a wonderful variety of plants and animals. As a result of our great climate, thousands of people move here every year and this puts pressure on native plant and animal species as their habitats disappear. The state and federal government are charged with protecting these imperiled species and they have a variety of laws and rules at their disposal. However, sometimes these laws come into direct conflict with the goals of a development project. Ideally, before land is purchased for a project, you should have an idea as to whether or not you have threatened or endangered species living there. 

“Threatened and endangered species” is a term used to describe a plant or animal that is at risk of becoming extinct. “Threatened” usually means that the organism is likely to become extinct in the future. “Endangered” means that the species is at the brink of extinction now.

There are many laws, both at the state and federal government level, that deal with endangered species. Starting at the top, the federal government protects many species under the Endangered Species Act of 1973. The U.S. Fish and Wildlife Service maintains the list of endangered, threatened, and imperiled species, and writes the rules that govern how we interact with them. 

Migratory birds come under the Migratory Bird Treaty Act of 1918. Some 800 birds are protected under this law. This also includes bird parts, such as feathers, and bird eggs and nests. Common protected birds that you may be familiar with include eagles, owls, hawks, ospreys, vultures, kites, and falcons. 

The State of Florida also has a list of protected species, managed under the Florida Fish and Wildlife Conservation Commission (FWC). The FWC list shows both the federal and state species. 

The most common species that you may find on a parcel of land are described below: 

Gopher tortoises (Gopherus polyphemus) are large, long-lived, terrestrial reptiles that are commonly found in sandy soils in uplands. They prefer an open canopy (not a lot of big shade trees) as they need sunlight to maintain body temperature. They also prefer a diversity of groundcover plants for food, and an open understory so that they can move around with ease. Gophers are considered a keystone species; over 300+ other species depend on the gopher tortoise for survival, as they live in their distinct, deep burrows. Gophers are listed as Threatened by FWC and, as such, you are not allowed to disturb them or their burrows. You must obtain a permit from the FWC if you need to relocate a tortoise. 

Permitting and relocating tortoises can be an expensive undertaking. As part of your due-diligence period, it would be wise to assess the property to see if it contains the proper habitat for tortoises and, if so, to hire an experienced, authorized gopher tortoise agent to conduct a survey to see if there are any burrows. A list of agents is found at the FWC online locater map

If gopher tortoise burrows are found, your best option is to modify your proposed development plan to avoid them. If you can’t do that, you may want to begin the permitting process to relocate them. If the abundance of burrows is high, or the cost to relocate is prohibitive, then maybe that property isn’t right for your project at this time. 

The other threatened and endangered species that you may have on your property are raptors (nests), which mostly include ospreys (Pandion haliaetus). Ospreys are protected both by the FWC in Florida and by the U.S. Fish and Wildlife Service under the Migratory Bird Treaty Act of 1918. Permits are required to remove inactive nests, and active nests can be removed only if they are providing a safety or health hazard, such as nesting on a power pole; here are nest removal guidelines. Osprey nests are typically found in wetlands or near waterbodies, so it is likely that your project will avoid them anyway. 

While the bald eagle is no longer on the official endangered species list due to its continued recovery, it still has protection under the Bald and Golden Eagle Protection Act of 1940, and the Migratory Bird Act. So you still need a permit to disturb a nest. 

Endangered plants also have protection status, and while you don’t have removal and relocation permitting issues typically, you might find that their presence can impact the overall assessment that a government agency makes on your parcel. A local government, for example, may require you to avoid a certain area with protected plants, or provide mitigation for their potential destruction.

As always, finding out about potential problems on your site before you enter into your final contract phase are well worth a little upfront time and cost to fully understand what you are getting into. 

You’ll be glad to know, by the way, that fire ants and yellow flies aren’t protected under any laws. 

Valerie Weeks
The Phoenix Environmental Group, Inc.

Preparing and Conducting a Real Estate Transaction

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With the real estate, title, and mortgage industry changing on an almost daily basis, it is imperative that every real estate agent is armed with the necessary knowledge to successfully close a real estate transaction.  Ask yourself about these three scenarios:

Jimmy Smith – Living in New York with property in Florida
Jimmy Smith was a mail-away listing, mail-away contract, and mail-away closing. When the title agent received the Warranty Deed from Jimmy along with his driver’s license, she was unable to close the transaction. Why was the closing cancelled?

The CFPB
Who is the CFPB and how do they affect the closing of a residential sales transaction when the buyer is obtaining a mortgage? Will there be more changes on the way and how will they affect the buyer, seller and real estate agents?

Evidence of Title and Survey
Pursuant to the Tallahassee Board of REALTORS® Contract for Sale and Purchase, the buyer is advised to have a survey on all transactions as well as owner’s title insurance. Why are these documents so important to anyone purchasing a property?

The answer to these questions as well a title company’s reliance on the Contract for sale and Purchase, a review of the title commitment, survey and tips for every real estate agent for a successful closing will be discussed during this three hour FREC credit course. Please join your host, Richard Santurri of Mang and Santurri and your presenter, Susan Dutcher of First American Title at TBR on July 9—earn three hours of CE credit and gain valuable knowledge.

“Preparing and Conducting a Real Estate Transaction: What Every Real Estate Agent Should Know,” provides 3 hours CE – register to attend this class, which will be held at TBR on Wednesday, July 9, from 9 a.m. – noon.

Susan Dutcher
First American Title

Professionalism

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“In this corner, weighing 175 lbs. (don’t judge), from Coldwell Banker Hartung and Noblin… Jimmmmmmm Butlerrrrrrrrrr!” 

This is how I feel sometimes during a transaction. It may be difficult at times dealing with the agent on the other side of the transaction, but I know I must. While we’re all here to make a living, and do the best work we possibly can, we’re also here assisting people with a life-changing event. Sometimes it takes that one customer to remind us what an enormous responsibility we have as REALTORS®, and we really need to be mindful of that. We need to be respectful not only to our customers, but to one another. 

     Etiquette: the code of ethical behavior regarding professional practice or action among the members of a profession in their dealings with each other.
     Respect: proper acceptance or courtesy; acknowledgement.  

These concepts seem to be forgotten at times. The other agent isn’t out to get you, or to steal your customer, or purposely ignore your calls, or any number of other negative scenarios that can run through your head. If you’re working diligently to get a transaction to close, most likely the agent on the other side is working just as hard – remember that! I recently had a transaction where the listing agent told me, “You know, working with you is so easy.” Granted, there weren’t any inspection issues, and just some small WDO repairs, but still, the lines of communication were always left open throughout the transaction.

Communication and respect are key – just put yourself in the other agent’s scenario. Would you want calls returned? Would you want answers quickly? Would you want documents emailed to you in a timely fashion? These simple tasks help you gain the respect of your peers, which is invaluable in this profession. 

The National Association of REALTORS®’ Pathways to Professionalism begins with the Golden Rule: to do unto others as you would have them do unto you. The importance of respect for the public, property, and peers is enumerated, and it concludes with the reminder that “[r]eal estate is a reputation business.” We live in a small community, and our actions are remembered, good or bad. So, let’s lose the gloves and treat one another with respect. 

Jim Butler
Coldwell Banker Hartung & Noblin

So You Want To Be a Broker?

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Have you ever dreamed of being your own boss and opening your very own real estate office? If so, then you will want to attend So You Want to Be a Broker at TBR on April 24. The course is designed to help you decide if opening your own real estate firm is right for you. Do you have what it takes to succeed in a very competitive business? What valuable business experience do you bring to the table? The pros and cons of venturing out on your own will be discussed. Timing is critical in the opening of any new business. What is the current business climate and is now the right time to begin? The course will help you answer these important questions.  

One of the first decisions an entrepreneur must make after deciding to open a new company is developing a business model. After carefully checking out the competition in your area, you will want to decide on the type of services you will offer. Will you open a small office with just yourself, or will you decide to open a firm that relies on recruiting agents to your new company? Will you be a full-service company, a service center, or operate a VOW? Your business plan will be dictated by the choice of company you chose to operate. The course will compare the benefits and expenses of operating a franchise company with that of a non- franchise company. The course is also designed to show the cost/benefit of remaining a sales associate in various business models vs. the cost/benefit if you own the company. The course will take you step-by-step from inception to profitability by helping you figure out how much commissioned income you need in order to generate a profit. Various types of business models will be compared to show you how to figure your break-even point in each.  

A section on FREC rules and regulations is also covered to help brokers understand their responsibility to supervise the activities of their agents. Agency relationships, escrow deposits, advertising, business records, and anti-discrimination policies are some of the topics discussed.

 So You Want to Be a Broker is offered at TBR as part of the Cinema CE series, and provides three hours of continuing education.

Jane Fairall
Florida REALTORS® Instructor
Certified Success Coach
Watson Realty Corp.

At Home with Diversity

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How do you treat people who “ain’t from around here?”  How does it feel to be the odd man out?  How does it feel to know you are not being understood?  How do each of us lean toward our clients and move to meet their needs—not ours?  How do you make sure everyone feels honored and taken care of?  How do you put these good feelings and intentions into a business plan?

On a personal level: is 2014 the year you want to notch up your professional business model? Is it past time to make head way on earning your CRS? Your PMN? Your CIPS designation? 

Want a fast paced class with like-minded REALTORS®?  Join us Thursday, May 1st for At Home With Diversity.

This course has two major goals:

1.  To heighten awareness of and sensitivity to the social and cultural constituencies of local real estate markets. Participants will learn about the people who make up the local market, along with their values, customs, real estate needs, and expectations of real estate professionals.

2.  To provide practical skills and tools to increase the professional’s effectiveness in servicing all social groups. Specifically, the course builds skills in cross-cultural communication and strategic business planning.

Cultural diversity is found on both a global level and just down the street, or across the state lines. How are real estate transactions viewed differently in South Florida, Georgia, Dixie County?

Let’s talk about people—and how to present ourselves as welcoming and professional, no matter what our background.

Watch a brief video about the class, and register for At Home With Diversity, May 1, 9 a.m. – 5 p.m.

Patti Ketcham
Florida REALTORS® Instructor
Ketcham Realty Group

Legal Update: RESPA

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Sometimes even the Big Boys don’t get the word.

Every REALTOR® and every Board Affiliate knows that it is illegal to refer real estate closing business and get compensation back. It is an improper practice under RESPA and other laws. If you know anyone doing it, tell them to stop.

In a recent federal court case in Maryland, the judge has turned a regular lawsuit into a huge, class-action suit, giving buyers since January 2008  the possible right to sue a huge realty company and the title company with which they did many closings.

The federal suit will involve treble damages; the actual damages being sought are over $11 million. And now it looks like the Consumer Financial Protection Bureau is probing marketing agreements and affiliated business arrangements between the real estate industry and the title insurance industry.

Here is what is alleged to have happened in Maryland:

In the case of Patrick Baer, et al, v. The Creig Northrop Team PC, et al, it is alleged that the Northrop group received more than $600,000 in compensation from Lakeview Title Company. RESPA prohibits gifts, payments, compensation—anything of value—in return for the referral of business. You cannot refer RESPA deals in return for free services, discounts to you, gifts to or for you.

Northrop is no little, uninformed entitity. Creig Northrop Team, PC, is  affiliated with Long & Foster Real Estate, Inc. Northrop was ranked No. 2 in the U.S. last year and No.1 the year before in transaction volume by The Wall Street Journal.

According to the suit, Patrick and Christian Baeher purchased a home through Northrop in 2009. They were referred to Lakeview Title for title insurance and settlement services. The suit alleges that a sham employment agreement existed between the title agency and Carla Northrop, wife of Creig Northrop, and that was for the purpose of funneling funds back to Northrop in return for title closing referrals.

Mrs. Northrop, it is alleged, was shown as an employee of the title company but did not actually perform any work there, did not have an office, an email address there, nor a telephone there. Her actual employment was generally kept a secret.

Northrop and Lakeview also created a marketing agreement under which Northrop would designate Lakeview as its “exclusive provider of title and settlement services.” Lakeview then paid $6,000 to $12,000 a month for mostly unspecified marketing services. The Federal Court has already ruled that there is no record of real, joint marketing services reasonably related to the actual amounts paid by Lakeview.

So what may be a fake employment to funnel back money to a realty company, or a meritless marketing agreement to funnel back money to a realty company, all in return for referring RESPA related closing business, now has one of the largest realty firms looking at a huge class action suit.

And it is not like no one saw this coming. Ten years ago Florida attorneys for Boards of REALTORS® began preaching that the “I will rent a desk in your office” scheme was illegal. The same with “I will provide you cell phones but I get to advertise on your voicemail or website or email”; i.e., all where the RESPA service provider gives the REALTOR® something of value, in return, implied or expressed, for the return of referral of title business.

It has to be arms-length, or the REALTOR® has to cut out the practice of referring any buyer in a RESPA related matter. The latter is just unprofessional. Buyers want and need help. But if it looks, smells, and tastes like it might be an illegal referring arrangement, it should be avoided.

Joe R. Boyd
TBR Legal Counsel
Board Certified Real Estate Attorney
Boyd & DuRant, P.L.