MD Realtor Magazine - Maryland Association of Realtors

Transcription

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Young
Professionals
How they succeed in a
challenging market
p 122010-2011
Seminar & Webinar Schedule
p 16Maryland
Rookie REALTOR®
Association of REALTORS®
Meet the Staff
* REAL ESTATE
MAIN SPONSORS:
September 13-15, 2010
President’s Perspective
Steve Meszaros
MARYLAND HOME MAKEOVER™
Begins Its Next Renovation
In July, Maryland REALTORS® and the Partnership for Housing (PFH)
Foundation announced its second home renovation project through the
Foundation’s Maryland Home Makeover™ program.
Danny Barry suffered a traumatic brain injury at 9 after a diabetic stroke
and subsequent coma. Now 22, his everyday life is challenging and the
Barry’s split foyer home required changes to adapt to Danny’s needs.
Danny’s father is a career military retiree, now a civilian, serving with
the military in Iraq.
Maryland Home Makeover™ Program funded the renovation of the lower
level footprint of the Barry home, with a new handicapped entrance in
place of the garage door, expanded living and sleeping space for Danny,
closets and a family gathering area. The project was made possible
through the efforts of Harkins Builders Inc., and support from the Anne
Arundel Association of REALTORS® and its local Women’s Council of
REALTORS®. Through this program, we are making an impact on
Maryland families and communities. For additional information about
the Barry family and MARYLAND HOME MAKEOVER™, visit
www.partnershipforhousing.org.
IN THIS ISSUE
Read the profile of eight Maryland Young Professionals, selected as NAR’s 30
under 30 finalists over the last ten years. We asked them how they succeed
and what they would do differently if they were just starting out.
Look for our new feature, “Commercial Connections,” written by MAR
attorney Celeste Filoia. Although the column is focused on issues of
importance to commercial practitioners, it will also provide relevancy to
the residential practitioner.
September marks REALTOR® Safety Awareness month. NAR will host a
series of Webinars on Open Houses, Social Media, Identity Theft, and
Distressed Properties. Visit www.realtor.org/safety to learn more details.
HANDSFREE CELL PHONE DEVICE REQUIRED
Effective October 1, 2010, Maryland joins states that prohibit the use of
handheld phones by drivers while operating a motor vehicle. The law
prohibits a driver over the age of 18 from using a handheld telephone
while driving a motor vehicle in motion.
THE STRENGTH OF VOLUNTEERS
It has been an honor to serve Maryland REALTORS® and our Association.
Special thanks to the 2010 Leadership Team Cathy Werner, Pat Terrill,
Carlton Boujai, Iona Harrison, CEO Mary Antoun, and the Executive
Committee for their support.
Consider making a commitment to volunteer at your local association.
You will be rewarded in countless areas of your personal and professional
life.
Danny Barry proudly wears a “REALTOR® pin” given to him by
Steve Meszaros
M A R Y L A N D R E A L T O R ® August/September 2010
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August/September 2010
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ing it on th e R o
ad
8 M
aryland association of realtors®
A Conversation with 2011 President Cathy Werner
10Realtor® safety Tips: Clients need safety too!
12 2010 - 2011 rookie realtor® seminar &
webinar schedule
Rookie REALTOR®
Seminars
Ta k
Features
12
table of contents
16 Maryland association of realtors®
Meet the Staff
20CELL PHONES AND DISTRACTED DRIVING
22 WHERE THE STARS ARE
Young Professionals – How They Succeed in a
Challenging Market
38UNCLAIMED MONEY MAY BE YOURS
Departments
22
3 PRESIDENT’S LETTER
6 MAR 2010 LEADERSHIP TEAM
28 COMMISSIONER’S CORNER
Commission Considers Licensing for Property Managers
30MARYLAND REAL ESTATE COMMISSION NEWS
Condo Buyers May Request Refund of Earnest Money
31RESIDENTIAL SALES
After the Tax Credits
34FROM THE HOTLINE
First-Time Homebuyer Addendum: Who Pays Transfer Taxes?
38
4
36MRIS UPDATE
Real Estate in Real Time
37COMMERCIAL CONNECTION NEW COLUMN!
Business Owners Find Value in Cost Segregation Studies
2010 Maryland Association
of REALTORS® Leadership Team
Maryland Association of REALTORS®
200 Harry S Truman Parkway | Suite 200
Annapolis, MD 21401-7348
800.638.6425 | www.mdrealtor.org
Steve Meszaros
Cathy A. Werner
President
Long and Foster Real Estate, Inc.
802 Landmark Drive, Suite 111
Glen Burnie, MD 21061-9121
410.969.1005
Fax 301.694.4929
[email protected]
President-Elect
RE/MAX American Dream
9414 Belair Road
Baltimore, MD 21236-1504
410.529.7900
Fax 410.529.7906
[email protected]
Executive Leadership Team
Steve Meszaros | President
Cathy A. Werner | President-Elect
Patricia A. Terrill | Secretary
Carlton J. Boujai Jr. | Treasurer
Iona C. Harrison | Immediate Past President
Mary C. Antoun | Chief Executive Officer
Editor
Deborah L. Hager | [email protected]
Advisory Committee
Lee Hatfield | Chair
Ken Montville | Vice Chair
Advertising & Publication Design
Patricia A. Terrill
Carlton J. Boujai Jr.
Secretary
Prudential Carruthers REALTORS®
7500 Coastal Highway
Ocean City, MD 21842-2937
410.524.7000
Fax 410.524.5695
[email protected]
Treasurer
Exit Realty Prosperity Group
5300 Westview Drive
Suite 105
Frederick, MD 21703-8339
301.698.8700
[email protected]
Art Comp & Design
Alison Cooper | Senior Designer
1921 York Road, Timonium, MD 21092
410.252.4027 | www.acd1.com
Mission Statement
The Maryland Association of REALTORS® exists to support all segments
of its membership and their specialties. The Maryland Association of
REALTORS®, through collective efforts with local boards/associations
and the National Association of REALTORS®:
■ Develops and delivers programs, services and related products that
maintain and elevate the high standards of the real estate business
and the professional conduct of its practitioners;
■ Assists members in ethically and professionally serving the public;
■ Promotes and preserves the right to own, transfer and use real
property; and
■ Protects the right of members to conduct business within a framework
of fair and reasonable laws and government regulations.
In principle and in practice, the Maryland Association of REALTORS®
values and seeks diversity and inclusive participation within the field of
real estate and recognizes each member as a unique individual.
6
Iona C. Harrison
Mary C. Antoun
Immediate Past President
Pioneer Realty Inc.
7917 Declaration Lane
Potomac, MD 20854
[email protected]
Chief Executive Officer
200 Harry S Truman Parkway, Suite 200
Annapolis, MD 21401-7348
800.638.6425
[email protected]
Maryland REALTOR® (USPS 0016-017) is published bimonthly by the Maryland Association of REALTORS®,
200 Harry S Truman Parkway, Annapolis, MD 21401-7348. Periodical postage paid at Annapolis and
additional mailing offices. Postmaster send address changes to: Maryland REALTOR ®, 200 Harry S
Truman Parkway, Annapolis, MD 21401-7348.
Member subscriptions of $3.81 are paid with annual dues.
This publication is designed to provide accurate and authoritative information regarding the subject
matter covered. It is offered with the understanding that the publisher is not engaged in rendering
professional advice. If legal advice or other expert assistance is required, the services of a competent
professional should be sought. Articles that appear in Maryland REALTOR® are an informational service
to members. Their contents are the opinions of the authors alone and do not necessarily represent those
of the Maryland Association of REALTORS®.
Permission to reprint articles appearing in Maryland REALTOR® magazine must be requested in writing.
Also include purpose for request.
While this magazine makes a reasonable effort to establish the integrity of
its advertisers, it does not endorse advertised products or services unless specifically stated. ©2010 Maryland Association of REALTORS®, Inc.
A Conversation with 2011 President
Cathy Werner
MAR 2011 President
Cathy Werner shares her
thoughts on the past
and the future of
the real estate industry.
Q:
When were you licensed?
A:I received notice that I had passed the real estate exam on Christmas
Eve in 1984. My daughter, Nicole, was 9 years old at the time and
I was a stay-at-home mom. Pursuing a career in real estate seemed
attractive to me because it was something I could do part-time and
contribute financially to the household. The idea was that my
husband could watch Nikki on evenings and weekends while I sold
real estate.
Q:
How hard was it for you to get started?
A:Very hard. I was late for my first listing appointment because my
car had a flat tire - I did get the listing though. It was 9 months
before I had a sale and 11 months before I received my first
commission check. With almost a year’s investment of time and
money without any income, I almost quit. The “flat tire” clients
were happy with the service I gave them and did refer me to others
– that’s when things finally started to “kick in” for me.
Q:
lives. I earned my GRI first, then CRS and then my associate
How did your real estate career progress from there?
A:It was “slow going” for some time. I had plenty of time so I decided
8
customers on what may be the largest financial investment of their
broker license. Later I received my ABR designation and most
recently my CDPE. It took a while, but eventually I increased my
production to the point that I was among the top producers in the
to focus on education. I wanted to learn as much as I could about
office. I feel strongly that the amount of education I received
buying and selling real estate since we advise our clients and
contributed greatly to my success.
Q:
Why did you decide to start your own brokerage?
to get to know them – they will be impressed. I invite all MAR
A:What I love about the real estate profession is that one’s potential
all be amazed at the number of services that are available to them
members to visit the MAR office in Annapolis. I think they will
and the level of effort that is directed on their behalf.
is unlimited. Having my own brokerage was the next logical step
for me. I wanted to help others accomplish their dreams, just as I
had through my career in real estate. I purchased a RE/MAX®
franchise and named the company “American Dream” because I
feel that, to many people, homeownership is the foundation of the
Q:
A:Balance is also important to me. I encourage everyone to support
a charity of choice. I love spending time with my family every
“American Dream.”
Q:
chance I get. I have several hobbies – vacationing in the Caribbean,
reading, cooking, golf, gardening. I am a licensed Coast Guard
hat changes have you seen in the real estate industry
W
in the past 26 years?
A:Everything and nothing. When I started, there were no computers.
In fact, when fax machines came out, the agents in the office voted
against having one! We received listings daily by mail. Technology
has changed the way we work—information is readily available to
What do you like to do in your spare time?
Captain. But I stopped riding my Harley when I became a
grandmother.
Q:
What would you like to say to the members of MAR?
A:
Get involved – you can make a difference.
everyone. What hasn’t changed is that real estate is still a “contact
sport.” Relationships are the key to success.
Q:
How did you become involved in the association?
A:As I became more successful in my business, I wanted to give back
to the industry that had given me the opportunity to become
successful. I started volunteering on committees at the local and
the state levels. Over time I served at the officer level and became
the 150th president of the Greater Baltimore Board of REALTORS®,
the oldest real estate board in the country. As president of GBBR I
was selected to serve on MAR’s Executive Committee. I met
wonderful REALTORS® from across the state and my interest in
serving at the state level grew.
Q:
s incoming MAR President, what do you think are the
A
challenges Maryland REALTORS® face?
A:We are all facing financial, political and other issues. MAR is active in
monitoring and lobbying on issues such as proposals to tax real estate
commissions, property tax increases, property values, financing,
appraisals and other issues affecting the ability of Marylanders to buy
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and sell homes. The strength of our 24,000 members gives us a powerful
voice in Annapolis on housing issues.
I am honored to be representing this wonderful organization. The
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MAR staff is incredible – I would like for all of our MAR members
9
Clients Need
Safety Tips, Too!
MAR and the NATIONAL ASSOCIATION OF REALTORS® have worked hard to keep REALTOR® Safety
foremost in everyone’s minds. But what about your clients? They, too, face some dangers in
allowing strangers into their homes or visiting other people’s properties.
Share this valuable advice with everyone, and you’ll help them
learn to protect themselves against crime:
strangers will be walking
through their home during showings or
open houses. Tell them to hide any valuables in a safe
m Warn your clients that not all agents, buyers and
place, including prescription medications and alcohol, as well
appointment with the listing agent. Stress that your clients
as personal information such as bank statements that could
should never show a home without an agent present.
mRemind
sellers that
be used for identity theft.
10
sellers are who they say they are. Strangers who
stop by a listing unannounced should be asked to make an
m
Inform your clients that they
are responsible for
their pets. If possible, animals should be removed during
mWhen you leave a property, whether after an open house or a
showings. Make clients aware that buyers and agents are
make sure that all doors and
windows are locked. Thieves commonly use open
sometimes attacked, and the owner will be held liable.
houses to scout for valuables and possible points of entry,
showing,
then return after the agent leaves.
m
be alert to the pattern of
visitors’ arrivals, especially near the end
of showing hours. In some areas, a group of thieves
At an open house,
will show up together near the end of the open house and,
while a string of supposed buyers distracts the agent, the rest
of the group walks through the house, stealing valuables.
m
Let your clients know that you will take all of the above
they
should immediately verify that all doors
are locked and all valuables ARE accounted
for.
safety precautions, but that when they return home,
Visit NAR’s REALTOR® Safety Web site at www.REALTOR.org/Safety. This article
is part of the NATIONAL ASSOCIATION OF REALTORS®’ 2009-2010 REALTOR® Safety
Resources Kit. (Sources: Nevada County Association of REALTORS® (CA); Realty Times)
GRI – The Next Level
Here’s what you can expect
from attending GRI –
■ networking and referral opportunities
■ increased knowledge on a wide array of topics and skill enhancements
■ confidence building through in-depth knowledge, skills training and better
understanding of industry practices
■ earn a national designation which has proven greater income potential
■ receive continuing education credits, and
■ earn credits toward your broker/associates brokers’ license.
Why wait?
For class schedules and program details, visit www.mdrealtor.org.
Click the Education tab and scroll to REALTOR® Institute (GRI), GRI Overview.
11
The 2010/2011 Rookie REALTOR® seminar series is “going on the road;” traveling to four areas around
the state and we hope you’ll join us! Rookie REALTORS® are encouraged to register and attend seminars
at any location. During the winter months, we will conduct four Webinars, open to ALL MEMBERS!
Online registration www.mdrealtor.org/rookierealtors will open September 1. Registrants will receive
attendance confirmation and detailed directions to the onsite seminar locations.
2010-2011
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MARYLAND OFFICES
Annapolis
410-266-0600
Bethesda
301-961-6000
Canton
443-769-1700
Crofton
410-721-3711
Elkton
410-398-2401
Federal Hill
410-547-5700
Gaithersburg
301-948-4811
Harford County
410-515-5300
Howard County
443-325-7890
Ocean City
410-524-7000
Ocean City West 410-520-2600
Ocean Pines
410-208-3500
Pikesville
410-484-8322
Roland Park
410-464-5500
Salisbury
410-912-4700
Severna Park
410-647-8000
Silver Spring
301-879-2600
Towson
410-828-4700
VIRGINIA OFFICES
Alexandria
703-836-1464
Fairfax/Oakton
703-691-7653
Hamilton
540-338-4171
Lake Ridge
703-497-7788
Leesburg
703-777-1250
Manassas/Gainesville 703-396-6000
Vienna
703-720-5560
Winchester
540-722-9300
D.C. OFFICES
Capitol Hill
202-393-1111
Uptown
202-362-3400
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10th Anniversary Leadership Academy Honoring
Academy Graduates from 2001–2010
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10
CELEBRATING
YEARS
www.mdrealtor.org
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•
Office (410) 255-3690
NEW OFFICE: 2608 Mountain Rd. Suite #7 Pasadena MD 21122
Meet the Staff
Administration
Chief Executive Officer Mary Antoun has been the MAR top staffer
since 1993. In addition to overseeing the Association’s operations, she
works closely with volunteer leadership to develop and implement
policies and initiatives to promote the real estate industry and private
property rights. An attorney and economist, Mary believes the
Association’s primary responsibilities are representing member
interests before the legislature and advocating REALTOR®
professionalism with members and the public.
Director Arlene Robertson and Executive Assistant Sommer Jackson
are responsible for the administrative functions of the Association.
They keep the organization operating smoothly, from building
operations to the Association’s management functions.
un
nto
Mary A
Arlene and Sommer staff the “governance” committees—
Executive, Bylaws, Nominating, and Strategic Planning. They
also support the Board of Directors and General Membership
meetings as well as the Presidential Council, made up of local Board
Presidents who meet to exchange information, develop ideas and share
experiences. They organize the MAR Former Presidents meetings, the
MAR Reception at the National Association annual convention, and
other events during the year. They also oversee the prestigious Life
Achievement Award.
Arlene and Sommer assist members at Registration during the MAR
Annual Conference.
Receptionist Rebecca Baker greets and talks to more members as the first
point of contact at the Association offices than any other staffer. She
answers hundreds of questions every week from members and the public,
referring them to the appropriate staff person or other resource. Rebecca
assists with meeting logistics, mailings, and other tasks
requested by other departments.
16
ted) &
ker (sea
ecca Ba
eft), Reb
ckson (l ht)
Ja
r
e
m
Som
n (rig
obertso
Arlene R
Government Affairs
Vice President Bill Castelli, MAR’s Chief Lobbyist,
heads a team that includes Director of Regulatory
Affairs Mark Feinroth, Director of Government Affairs
Susan Mitchell, and Assistant Sheryl Bergman. Bill,
an attorney and former aide to Rep. Steny Hoyer,
develops and directs the Association’s legislative
strategy in representing Maryland REALTORS® in the
statehouse. Mark, also an attorney and lobbyist,
represents MAR’s interests on regulatory matters that
come before various agencies with responsibilities that
affect the real estate profession and private property
rights. Prior to joining MAR, Mark was Assistant
Secretary with the Maryland Department of Labor,
Licensing and Regulation, supervising the operation of
all licensing commissions, including the Real Estate
Commission. Left to
right: (s
tanding
Celeste
): Kimb
Barton
erly Cav
Filoia, S
(sitting)
allaro,
hannon
Colette
Re
Massen
gale &D ed, Chuck Kask
on Mart
y,
in
Legal Affairs
In addition to her lobbying responsibilities, Susan also
directs MAR’s grassroots advocacy efforts, including
our calls to action, and oversees MAR’s Local Government Affairs Director (GAD) Program. MAR provides
all local boards/associations that do not have full-time
local GADs with contract government affairs assistance to help strengthen REALTOR® voices
in local jurisdictions. Currently, the GAD Program
provides lobbying assistance to 12 local boards. Prior
to joining MAR, Susan was the Government
Affairs Manager/Washington Representative for
Bristol-Myers Squibb pharmaceutical company in
their Washington DC office, responsible for both the
federal and state grassroots lobbying program & PAC,
and served as their Washington representative to the
industry trade association.
Chuck Kasky, Vice President of Legal Affairs, oversees the Department’s
operations, assisted by Staff Attorneys Colette Massengale and Celeste Barton Filoia.
Shannon Reed is the Legal Affairs and Professional Standards Assistant. Prior
to joining the Maryland Association of REALTORS®, Chuck was engaged in the
private practice of law, served as Legislative Counsel to several Committees of
the Maryland General Assembly, and was Deputy Chief Administrative Officer
for Howard County, Maryland.
The Legal Department staffs the MAR Legal Hotline, the service REALTORS®
routinely identify as one of their most valuable MAR membership benefits.
Members call or submit questions via an online form, which is available at the
Legal Services tab of the MAR website. The Department also provides support
for Maryland RPAC, the Statewide Forms Committee, the Commercial
Alliance, and the Real Property Operations Committee. Department attorneys
also provide in-house legal and compliance assistance to the other departments
within MAR.
Sheryl provides administrative support for the entire
department, including helping to organize Legislative
Day and other political events as well as
coordinating and e-publishing Political Buzz (the
RPAC E-Newsletter). Sheryl also serves as MAR’s staff
photographer.
As a service to member boards, associations and firms, the Legal Department
offers continuing education classes on risk reduction, agency law, real estate
contracts, Code of Ethics, fair housing, legislative and legal updates and broker
supervision. To assist in compliance with the NAR Professional Standards
program, we offer annual training to local Grievance and Professional Standards
Committees.
The team also includes contract lobbyists Joel Rozner
and Frank Boston.
Legal Affairs also has responsibility for member services. Don Martin, Director
of Board and Member Services, is MAR’s principal outreach to firms and local
boards. A 20 year MAR veteran and a former practicing REALTOR®, Don
spends most of his time on the road speaking at sales meetings and teaching
continuing education classes. Don is your primary resource on Professional
Standards issues, and staffs that MAR committee.
Government Affairs committees include Public Policy,
Legislative, Grassroots and Political Affairs, and Legal
Action.
Kimberly Cavallaro, Manager of Board Professional Standards Services, oversees
outreach services for dispute resolution and Professional Standards. She
administers the Professional Standards Services program for many local boards/
associations, offering MAR resources to provide seamless assistance to their
members and the public regarding ethics cases and arbitration procedures.
Kimberly also staffs the Professional Standards Instructors committee that
delivers risk-reduction training to local boards, to ensure member understanding
of the ethics and arbitration procedures. She manages the Dispute Resolution
area of the MAR website, which addresses dispute resolution issues and
alternatives.
ark
right: M
Left to
ll
e
h
itc
Susan M
an &
l Bergm
lli, Shery
l Caste
roth, Bil
Fein
17
Meet the Maryland Association of REALTORS®
2010 Staff
Education
Lisa Kinsman, Department Director, has been a MAR staff member since 1981. She supervises
activities and staffing for GRI, Leadership Academy and Mediation Oversight. The department
coordinates the education programs for the Annual Conference, and oversees the dissemination
of all continuing education certificates for all CE programs provided by MAR and contracted
providers.
Education Assistant Lisa Haynes provides all Department administrative support, and is the
“point person” responsible for issuing certificates, handling replacement certificate requests for
programs submitted for continuing education through MAR and any other general education
question callers may have.
Lisa Ha
MAR maintains an extensive educational database whereby attendee records (member and nonmember) are updated for every CE or non-CE program MAR offers. This system verifies attendance
and confirms classes taken to track designation courses, mandatory state licensing renewal courses
and any association training required sessions.
ynes (to
p) and L
isa Kinsm
an
Finance and Technology
Patti Schmitt, MAR Controller, has primary responsibility for
developing and tracking MAR’s annual budget, managing MAR and
affiliate organizations financial operations and working with its
auditors and financial advisors. She provides economic and financial
information to the CEO, Board of Directors and officers, Finance
Committee and staff. Patti also oversees the operations and staff of
the Technology Department.
am, Kim
unningh ellers
ichael C
yS
M
d
)
in
g
C
in
d
ht: (stan ) Halle Papai &
g
ri
to
Left
itting
hmitt, (s
Patti Sc
r,
Danske
Prior to joining MAR, Patti was Assistant Controller for HRi, ASO & PEO Outsourcing, serving more than 150 employers with over 1,700
employees across 17 states. Patti also successfully started and operated a contracting business for fourteen years before selling her interest
to her partner.
As Assistant Controller, Kim Dansker administers MAR’s accounts payable and assists with daily financial transactions. Kim also maintains
financial records for RPAC. Accounting Specialist Halle Papai administers MAR’s accounts receivable and assists with daily financial
transactions. Halle also maintains financial records for several affiliated organizations.
Technology Coordinator Michael Cunningham worked with MAR for almost ten years as a consultant before joining the staff in 2005.
Michael provides IT support and management, custom software development and programming, and website design and management for the
Association, staff, and affiliate organizations. Membership Manager Cindy Sellers maintains databases for MAR and some affiliated
organizations, and assists in helping staff with computer hardware and software systems.
18
Communications & Public Affairs
The Communications and Public Affairs Department is the public voice of MAR,
charged with overseeing our communication with members and the public. The
Department staffs the Annual Conference, Communications/PR, Rookie
REALTOR®, Community Action and REALTOR® Excellence (CARE), and
REALTOR® of the Year committees, and manages and coordinates all aspects
of the Fair Housing Poster Contest. It produces the bi-monthly Maryland
REALTOR® magazine, publishes the Hotsheet, and develops brochures and
pamphlets, as well as the popular Fair Housing Calendar. Communications
Left to
right: Je
cultivates and finalizes non-dues affinity partnerships as membership
rmaine
Hawkin
benefits. The Department oversees much of the content and enhancements
s, Meliss
a Lutz &
Debbie
to the MAR website: www.mdrealtor.org and is managing aspects of the
Hager
MAR presence in the social media arena.
Department Director Debbie Hager spearheads the MAR public and media relations efforts, which includes promoting
Maryland REALTORS® and the real estate profession. Prior to joining MAR, Debbie was a vice president of marketing for an
investment banking firm, and a public relations manager for four school districts and other trade associations.
Event Manager Melissa Lutz (pronounced Loots) is the key contact for the Annual Conference held in Ocean City each September.
She manages a large tradeshow and oversees all of the onsite logistics. Melissa also assists other departments with event
planning.
Jermaine Hawkins is the Communications Assistant, supporting all department activities for its committees and events. He is
also the first point of contact for Rookies who have questions or want to register for the monthly seminars, which he organizes
and supports onsite.
Housing Programs
The Housing Programs Department, headed by Director Fern Dannis, researches and identifies available
programs through housing counseling agencies and other community-based, nonprofit
housing organizations, as well as state and local government housing agencies. The
Department oversees data collection to identify financial assistance programs for
homebuyers, featured on the MAR consumer websites www.mdhousingprograms.com
and www.marylandhomeownership.com. The site has localized, useful information for
both REALTORS® and consumers. The Department also manages the process and
renewal for REALTORS® to obtain the MAR Workforce Housing Certification (WHC).
Fern is the Association’s liaison with NAR on its various housing programs, with Freddie
Mac’s CreditSmart™ program and with statewide and national housing coalitions. Fern
staffs the Housing Affordability Committee and the Equal Opportunity/Cultural Diversity
and has primary responsibility for MAR housing programs and housing policy development
efforts. As part of these programs, Fern develops and supervises efforts to encourage
Maryland REALTORS® to learn about credit literacy, housing finance programs and
involvement with creative housing programs, activities and policy initiatives in their
communities. Fern has worked in the housing field for 30 years and has collected experience
in property management, multi-family housing development, affordable housing policy, loan
packaging/underwriting, nonprofit administration and also as a real estate salesperson.
Left to
annis
t: Fern D
righ
& Kara
Ardison
Housing Programs Assistant Kara Ardison assists with the staffing of the Housing Affordability Committee and Equal Opportunity/Cultural
Diversity Committee. Kara provides administrative support for all the department’s work, and is the first point of contact for REALTORS®
regarding the Workforce Housing Certification (WHC) program, which she administers, along with the Education Department onsite.
Fern and Kara both staff the Partnership for Housing Foundation (PHF), including the Maryland Home Makeover™.
19
&
Cell
Phones
Distracted
Driving
The advent of wireless communication allows real estate agents to
conduct business anywhere at anytime. The cell phone has become a
standard tool for the modern real estate practitioner. However, there is
a dangerous downside to cell phone usage: distracted driving. Research
has found that a driver's reaction time is slowed by an average of 30
percent while talking on a cell phone, similar to that of a drunk driver.
20
Recently, courts have awarded substantial damages in lawsuits involving
distracted driving. Employers may be held vicariously liable for the car
accidents caused by their employees who were talking on their cell phones
when the accident occurred. A real estate broker could face liability if an
employee or real estate salesperson is involved in a car accident while
dealing with some aspect of a real estate transaction on his or her cell
phone. In a recent case, an attorney killed a pedestrian while allegedly
making business calls from her cell phone. The court has ruled that the
jury can consider whether the law firm should be vicariously liable for the
attorney's negligence.
Effective October 1, 2010, Maryland joins the list
Every broker should establish a policy that cell phones should not be used
in settings where that use is illegal. Also, the broker should make it known
to all salespeople who are not employees that the broker does not permit
the conducting of brokerage business on cell phones while driving.
a driver for another violation of the Maryland Vehicle
of states that prohibit the use of handheld phones by
drivers while operating a motor vehicle. A driver
over the age of 18, while driving, a motor vehicle that
is in motion, is prohibited from using a handheld
telephone. The offense is enforceable as a secondary
action only. Accordingly, a police officer must detain
Law before issuing a citation for using a handheld
cell phone.
re
A
s
r
a
t
S
e
h
T
e
r
e
h
W
Young
Professionals
How they succeed in a
challenging market
Many come to real estate after
spending years in other careers,
but some know what they want
far sooner – and go on to prove
that youth and inexperience are
not impediments to achievement.
Over the past decade, some of the
most successful young Realtors®
have been recognized by the
National Association of REALTORS®
with its “30 Under 30” award.
22
Several local Realtors® and Maryland Association of REALTORS® members
have been among the honored. These young professionals demonstrate
their dedication and success through more than volume of business. They
also exemplify the best in superior customer service, commitment to their
industry and the integral role they can play in their communities.
Recently, MAR spoke to several local award-winners to find out how they’ve
fared since winning recognition from NAR, what they’ve learned along the
way, and the advice they’d give others entering real estate today.
Volunteer service and the Ability to Connect
Despite a disheartening start in the business, Koki Adasi-Efuya believed
things would turn around for him. Koki sold only two houses his first
year, earning just $7,000. “That’s how I knew I picked the right career,
because I loved the work even though the money wasn’t coming,” he says.
“What helped me turn the corner was really just having faith, and knowing
that if you do the proper things, providing great service and being a
constant student of real estate, eventually you
will be successful.”
And succeed he did. In 2007, his second year, he
sold every listing he had, achieving $6.3 million in
sales and landing on the “30 Under 30” list in
2008. For Adasi-Efuya, now 28 and an associate
broker with Long & Foster Real Estate in Silver
Spring, sticking to the fundamentals of the real
estate business has continued to fuel his
achievement.
became interested in “going around
and looking at houses”—he was
unsure of success.
“I was never a good student, and I
guess I was selling myself short
and wasn’t sure I’d take to the
business as I did,” says Muren, 27,
who heads the Mike Muren Team
at Macintosh Inc., in Frederick.
Muren was a “30 Under 30”
winner in 2008.
Michael Muren
Muren attributes his success to a strong work ethic that meant spending
6 to 7 days a week in the office during his first three years and simply
delivering on what he promised clients. “There are so many people in so
many businesses that don’t deliver on their promises. They overpromise
and under deliver. I’ve always tried to do the opposite. I at least deliver
what I’ve said or more,” he says.
Muren, who sold almost double the properties he aimed
for in the business plans he drew up when he started, says
a big mistake new Realtors® make is not being organized
– or getting out enough. “Get a Web site, get a blog, try
and get articles in your local newspapers or magazines,
anything you can do to get your name out. I found that the
more people who have heard your name, the more they
will trust you and the more they’re willing to work with
you. Seventy percent of your job is finding the way to get
the work, not to handle the work,” he says.
“In real estate, the basic rules are prospecting, so
Koki Adasi-Efuya
you need to figure out what your prospecting
When Muren began, he focused on real estate magazines,
tools are going to be, whether it’s cold-calling, going to networking events, newspapers and mailers. Since then, he has used more personal approaches,
sending mailers, social media—whatever it is, if you consistently apply like thank-you happy hours for clients and collecting and publishing his
that basic fundamental over a long period of time, without fail, you will be clients’ home-buying experiences.
successful,” says Adasi-Efuya, whose sales volume has continued to rise,
“I ask them to keep a journal of what happens. I offer them a one-year home
to $8.6 million in 2009.
warranty if they do. First-time homebuyers in particular read other people’s
For Koki, meeting people and forming positive relationships through his stories and can relate. They say, ‘let’s call this Realtor®,” says Muren.
volunteer work with the YMCA and social activities – including playing
Muren advises new Realtors® to “stay humble and continue working.”
in three basketball leagues – is what works for him.
One strategy he wishes he had taken sooner, however, is focusing on
listings. “Starting out, a lot of agents want to focus on buyers. They think
buyers are easier to work with,” he explains. “But if you focus on sellers
and getting listings, the buyers will be generated because they’ll be seeing
your signs and calling. Knowing what I know now, I would have focused
on listings earlier.”
“Some people reach a point and think they’re at the top of their game and
start getting lazy and forget what it is they did to get where they are. I
don’t think that is something that should ever be forgotten,” he says.
Joining the family business – and excelling
A success story despite initial self-doubt
Brian Pakulla, an associate broker with RE/MAX Advantage Realty in
Columbia, went into real estate when he was just 21. But if he had had his
way, he would have done so even earlier.
Even though Michael Muren had considered real estate as a career when he
was just 11 years old — after his family moved from St. Louis to Frederick, he
“I wanted to get into real estate at 18, but my father encouraged me to go
to college to get more well-rounded experience, says Pakulla, who earned
23
a marketing degree from the
University of Maryland before
joining his family’s profession.
His parents have been Realtors®
since 1972 and he, his brother
and sister have followed suit. In
fact, Pakulla works with his
father and siblings as part of
Pakulla Professionals, the top
performing RE/MAX group in
Maryland with annual sales at
Brian Pakulla
around $100 million. Pakulla, one
of the “30 Under 30” in 2004, says his own sales account for about $30 to
$40 million of that figure.
“I joined my family and they were very helpful about teaching me the
ropes of the business so I was very lucky,” says Pakulla, adding that if he
were entering the business cold, he’d seek out a good team with leadership
willing to spend time sharing their wisdom – and leads – with new
talent.
The 33-year-old continues to attribute his success to the Nordstrom level
of service he provides to clients, which still includes sending a cake to
buyers on the anniversary of their purchase.
“Put the client first. There’s really no gimmick here. Be honest and do a
good job and if you do that and stay in touch with your clients, your
business will grow itself,” he says.
Pakulla found early success in part by focusing on listings for condos and
townhouses that would draw potential homeowners around his age. “Be
smart about where your niche market is, pick somewhere where someone
is going to identify with you, do it consistently and it can grow
exponentially. But it does take time. You have to be patient,” he counsels,
adding that new Realtors® should also learn as much as they can about the
business of real estate.
“You can be easily dissuaded because if you’re not persistent, you’re not
going anywhere,” she says.
Another key to her success is her willingness to join a group and work
from the bottom up.
“I had more experience in two or three years than most real estate agents
have in their entire career. You don’t have the option of making as much
money right away, but in the long term you have a lot more to offer your
clients,” she says.
Pearlman stresses what she
believes is crucial: following up
with clients, and maintaining and
managing your Web presence,
because “people are going to go to
Facebook or Google and look you
up. If nothing comes up, they’re
going to move on.”
One thing she would have done
differently in the beginning is to
Cara Pearlman
have systems in place to collect
client information and aid in that all-important follow-up. “It’s a lot
harder to touch base with someone after a couple of years rather than a
couple of months,” she says.
High-minded principles and Focus on the
Middle-market
Bo Menkiti, a 2006 “30 Under 30” award winner, was drawn to the transformative power real estate can have on individuals and their communities.
“Part of my hesitation was growing up and seeing how hard my dad
worked. He was connected to his briefcase. He was just always on the
phone,” says Pearlman.
“I’ve always seen real estate as a great opportunity to make a difference in
people’s lives, in the fabric of the community where we’re working,” says
Menkiti, CEO of the Menkiti Group and founder and operating partner of
Keller Williams Capital Properties in Washington, DC. “If you look at real
estate from a broader perspective,
it’s a basic human need. It’s the
largest financial transaction that
people make in their lives. And
it’s also really important if you
think of land use and everything
associated with societies and
democracies and ownership.”
But after graduating from the University of Miami with a marketing degree
and an unchallenging first job, Pearlman decided to give it a try. She hasn’t
looked back since. Honored by NAR this year, the now 30-year-old
member of the top-performing Rozansky Realty Group had a 2009 sales
Menkiti, who originally went
into management consulting
and helped lead a nonprofit after
graduating from Harvard, found
“We’re in sales, so it’s very simply: know your contract, know your
inventory, know your market,” he says.
Unlike Brian Pakulla, Cara Pearlman, a sales consultant with Long &
Foster Real Estate in Bethesda, initially resisted going into a family
business that went all the way back to her grandmother. (Her father, aunt,
uncle and brother are all in real estate as well.)
24
volume of $7.5 million. She attributes her success to her passion for the
profession and good old-fashioned perseverance.
Bo Menkiti
success in real estate by focusing on the oft-neglected middle market. He
formed the Menkiti Group in 2004 as a consulting group at Coldwell
Banker on Capitol Hill, and, with over $307,000 in gross commission
income, was named rookie of the year for the mid-Atlantic region. He
moved to Keller Williams in late 2005 and his sales
continued to climb. Last year, his group closed $26.3
million in sales, with 86 closed transaction units.
“Most of the more successful Realtors® overlook the
first-time homebuyer and overlook the working
family. If you look at the price points in Washington,
pretty significant sales can be built around that
consumer,” he says. “Part of what we’ve done as a
sales team is to bring a high level of service to that
middle-market client and that’s really set us apart.”
If he were to do it all over again, Menkiti says he would have
focused on his niche and sought out high-achieving Realtors® for
counsel earlier. “A big part of my success is concentrating on
a specific consumer market and a few neighborhoods and that’s
something people sometimes forget when they’re
starting out and looking for a deal. They don’t really
lay the foundation for a longer-term opportunity,” he
says. “Develop a laser focus and seek out people
who’ve had success.”
A Suggestion Leads to Careers
After graduating from Binghamton University and
spending two years with the Peace Corps in West Africa,
Jim Roy came to Washington, DC with the intention of
finding government work. His interest in real estate was
piqued by a broker he had enlisted to find a rental.
Perhaps unsurprisingly, given his belief in the critical
Jim Roy
role real estate plays in people’s lives, Menkiti says
“She said, ‘you’d be a good real estate agent.’ I have no idea what made
those who wish to succeed need to be committed to helping others.
her say that. But you know what? I like housing. I like contracts. I like
“You’ve got to be passionate about serving people. That sort of servant/
dealing with people. I like being in control of what I earn. I like hard
leadership mentality is what it takes to really excel in a service-based
work. Everything about real estate is what I loved about it,” says Roy, an
profession,” he says.
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25
associate broker and head of The Jim Roy Team at Long & Foster Real
Estate in Bethesda.
The rest is sales history.
As an associate broker with Prudential Carruthers in Washington, Green
rose quickly through his ability to form genuine relationships with clients.
He would select two customers or prospects to take to lunch each week
and host bimonthly dinners at his home. He was named rookie of the year
at Prudential. Just two years after entering the profession, Green was
named one of the “30 Under 30” awardees in 2003. That year, he had $20
million in sales volume and 48 transactions.
Roy, who has been a Realtor® with Long & Foster since 1998, has combined
sales of over $200 million and over 500 transactions. He was recognized
by NAR as a top agent under 30 in 2003.
Now a principal broker with Keller Williams Capital Properties and head
of Brandon Green Companies, Green’s focus has shifted from client
interaction to leading and mentoring his real estate and support staff.
Roy started taking classes and working as an assistant to a real estate
agent. Two weeks later, he was working as a buyer’s agent, and two years
later he struck out on his own. He still sticks to the tactics he shared back then, such
as asking clients to recommend him to others if he does
a good job. But Roy has gone on to become a one of the
top foreclosure agents in the region, specializing in
distressed properties as well as traditional resales.
The now-36-year-old attributes his success to extensive
training and work hours. “I put in about 80 hours a week
between going to the job, classes and studying,” he says,
estimating he still works 60 hours a week. “Also, I make
sure I surround myself with good people. My teammates
are wonderful. They’ve been with me forever.”
He attributes his rapid and continued success in the
profession to having a clear sense of his mission
regardless of the current housing climate. “I learned
early on I could succeed at a higher level by being
true to why I’m in real estate—which never changes.
The ‘who,’ ‘what’ and ‘how’ may change, and if you
focus on that, you can get derailed pretty quickly. I
focus on the ‘why’—it’s a fantastic compass for
moving through rocky or stormy times,” he says.
Green’s “why” is challenging the traditional way
real estate is done. He says he’s been most
Brandon Green
successful by altering the way a real estate
He advises new agents to keep their expectations realistic and their
transaction is typically handled. “The traditional way, the client
overhead low. “They’ll see agents driving around in their Mercedes and
works with the Realtor ®. The Realtor ® does everything, maybe
they’ll think, ‘oh wow, look at all these millionaires here,’ but that’s
delegates a little to an assistant. The problem is nobody is good at
generally not the case. A lot of agents are basically spending as much as
everything,” Green explains. Instead, he puts his staff in transaction
what they’re taking in. It really is not just about what you make, but what
roles that complement their individual strengths.
you wind up with at the end of the day,” says Roy. “A lot of agents get in
When asked what advice he would give to rookie Realtors®, Green says
over their heads in that regard.”
first and foremost, ”Focus on generating leads. You have to have enough
Roy also counsels keeping an open mind and focusing on the end goal – no
leads to sustain business. If you don’t, chances are you’re not spending
matter what side of a transaction you’re on. “The end goal is to have a
enough time generating leads. As simple as it sounds, that’s usually the
successful transaction, where the happy buyer finds a home and the seller
problem for 9 out of 10 agents,” he says.
is pleased with the outcome too. Ideally it’s going to be a win-win
situation, but so many times I see agents focused on [getting] their little If you have enough leads but still not enough business, then the problem
nit-picky way every step of the way and it becomes an adverse relationship. is not being able to convert them into business. “You’re not demonstrating
enough value for them to work with you,” he says.
It doesn’t have to be that way. It becomes counterproductive.”
Like Roy, Brandon Green dreamt about fixing up rundown farmhouses he
saw during childhood car rides in Iowa, but he didn’t consider real estate
as a career until a broker he hired to sell his townhouse urged him to give
it a try.
Even though he was unsatisfied with his job in an unrelated field, Green
earned his real estate license in 1999 intending to use it for his own
investments. But six months later, after helping a few friends buy
homes, he had more clients than he could handle. What had been simply
an investment tool led to a fulfilling new career. He quit his job and
started practicing real estate full time.
26
If you’re able to generate and convert leads, Green says, its time to focus
on leveraging your business by hiring more people or an assistant so your
business can grow.
Most of all, he says, don’t let a challenging housing market discourage
you.
“If real estate is what you want to do, get into it, regardless of market
conditions, and realize the market will not determine your success,” says
Green. “The only person who is going to determine your success is you,
and what you get up to do every day consistently over a long period of
time.”
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Commissioner’s Corner
Mark Feinroth, Esquire
Commission Considers Licensing
for Property Managers
The Maryland Real Estate Commission, already planning for the 2011
other transactions with respect to any form of realty or interest therein is
legislative season, recently asked Counsel for a briefing on whether
not carrying on the business of a real estate broker” and therefore the
property managers must be licensed real estate agents to perform functions
licensing requirement did not apply to the plaintiff in Weil v. Lambert,
such as showing rental properties, collecting rents and negotiating leases.
183 Md. 233 (1944).
Counsel advised that there are two provisions of the Maryland Real Estate
Brokerage Act (the Act) that appear to answer the question differently, and
the Commission appears interested in addressing the ambiguity.
In 1978, the State’s Attorney for Montgomery County took the position
that a resident manager of apartment buildings who signed leases as an
agent of the property owner would be subject to criminal prosecution if
The Act defines real estate brokerage services to include someone who is
the manager was not a licensed real estate salesperson or broker. The
paid to provide “any of the following services for another person: (i)
General Assembly responded the following year with legislation exempting
selling, buying, exchanging or leasing any real estate; or (ii) collecting rent
property managers from a license requirement. The bill exempted
for the use of any real estate.” Maryland Annotated Code, Business
designated agents of owners or licensed real estate brokers in the
Occupations and Professions Article, Section 17-101(k) (1). However, the
management of property, “unless the designated agent’s principal and
Act also provides that no license is required for “an agent of a licensed real
regular business is that of purchasing, selling, exchanging, or trading in
estate broker or of an owner of real estate while managing or leasing that
real estate and real estate options.” The Maryland Attorney General’s
real estate for the real estate broker or owner.” Maryland Annotated
interpretation of the exemption language concluded that management of
Code, Business Occupations and Professions Article, Section 17-301(b) (4).
property “covered traditional management functions such as negotiating
(In this section of the statute, the word “agent” means a person authorized
leases and collecting rent.” Therefore, a real estate license was not a
by another person to act on his or her behalf. It does not refer to a “real
requirement for property managers.
estate agent.”)
The concern that these two provisions raise for the Commission is that a
consumer might have weaker rights when conducting business with a
property manager who is not a real estate licensee, and a licensee would
be subject to administrative penalties issued by the Commission, while
an unlicensed property manager is not subject to the Commission’s
authority.
The Attorney General was asked to revisit the issue in 1994, and declined
to overrule the previous opinion.
The Commission will consider the matter further in the coming months,
and could recommend legislation to require a real estate license for
activities performed by a property manager that are traditionally within
the scope of real estate brokerage. We will monitor these discussions
carefully and keep Maryland REALTORS® informed of developments.
Over the last sixty years, Maryland courts and law enforcement officials
For additional information, please contact Mark Feinroth at
have played a part in the development of this part of the Act. In 1944, the
[email protected].
Court of Appeals held that a real estate license was not required for
someone acting as a caretaker and looking after the upkeep and repair of
a building. Simply collecting rents “without any intent to engage in any
28
Mark Feinroth, Esquire is the Director of Legal and Regulatory Affairs for the
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Maryland Real Estate Commission News
Katherine Connelly
Condo Buyers May Request
Refund of Earnest Money
At recent monthly meetings, the Maryland
Real Estate Commission provided guidance
to real estate brokers holding earnest money
deposits for buyers who are entitled to cancel
a residential contract of sale, either because
condominium or homeowners association
documents are not provided by the seller, or
the buyer exercises the right to rescind the
contract after receiving the documents.
Buyers who enter into contracts to purchase residential real estate in a
condominium or homeowners association development are entitled to
several disclosures from the seller, including notice of fees payable to the
council of condominium owners or HOA; restrictive covenants that result
from the property being subject to an HOA or Condo regime; and insurance
coverage on common areas of the development where the property is
located.
A buyer who enters into a contract but who has not received the required
HOA documents and disclosures may cancel the contract any time before
closing, and is entitled to “immediate return of deposits made on account
of the contract.” Real Property Article 11B-108(a). A buyer who does not
receive the HOA documents and disclosures at least five days prior to
account of the contract, except that the vendor shall be entitled to retain
the cost of reproducing” the documents and information disclosed to the
buyer. Real Property Article 11B-108(b).
A purchaser who enters into a contract of sale to purchase a condominium is
entitled to cancel the contract within 7 days of receipt of the required
documents and disclosures and is thereafter entitled to “return of any deposit
made on account of the contract.” Real Property Article 11-135 (f).
The Real Estate Commission takes the position that the HOA and
Condominium Acts allow a broker to refund the buyer’s earnest money
deposit when the buyer has canceled the contract exercising the right to
cancel after receipt of the HOA or Condo documents and disclosures,
without first obtaining a signed release from the seller. Brokers know that
the Business Occupations Article requires that they maintain deposit
monies in an approved account until a transaction is consummated or
terminated, written instructions from the parties are received, an
interpleader is filed in court or neither party objects to the broker’s proposed
disposition of the deposit. Business Occupations Article 17-505 (a).
Following this new policy statement by the Real Estate Commission, a
broker may return the buyer’s deposit once written notice to cancel the
contract is given.
If you have any questions concerning this guidance you can review the
minutes of the Real Estate Commission meetings of May and June 2010
by visiting the Commission’s website at http://www.dllr.state.md.us/
license/mrec/ or [email protected].
entering into the sales contract is entitled to cancel the contract within
five days of receiving the documents and disclosures. The buyer need not
Katherine Connelly is the Executive Director of the Maryland Real Estate Commission.
state any reason for canceling the contract, as long as the cancelation is in
For more information, visit http://www.dllr.state.md.us/license/mrec.
writing. The buyer is entitled to the “return of any deposits made on
30
Residential Sales
Anirban Basu
After the Tax Credits
Pending Sales Momentum Stalls
in May, June
corresponding statistic for March was an increase of 45 percent from the
Every few months, a new version of this article appears and provides a
But in May, pending unit sales were down 23 percent from the same period
summary and analysis of data characterizing Maryland’s housing market
a year ago statewide. While pessimists and double-dip recession forecasters
for the most recent-two month period. Coverage tends to focus a bit more
would likely view this figure as a reflection of ongoing weak demand for
intensely upon the more recent of the two months since it seems sensible
housing in the face of still tight credit, there is room for a different
to hone in more aggressively upon the latest data. But this time is
interpretation. Even in a strong housing market, one could expect sales
different; the May-June period, normally interesting for seasonal reasons,
momentum in a post-stimulus month to fall short of the prior month as
is even more so in 2010 because of the expiration of housing tax credits.
demand is artificially induced into the earlier month. Therefore, the
As every REALTOR® knows, to qualify for the $8,000 first-time buyer tax
credit or the $6,500 tax credit for move-up buyers, one needed to be under
contract to purchase a home by April 30th. So the May data are particularly
previous year.
decline in pending unit sales in May, the month immediately after the
cessation of the tax credit, says little about whether the market remains
in recovery.
interesting in terms of providing insight into the overall direction of the
However, if pending unit sales continue to be sluggish in the post-tax
marketplace.
credit period for a number of months, we could conclude that sales
The logic of the tax credit program was that it would provide an incentive
to engage buyers, thus ramping up the demand for housing units on the
market and making it easier to sell existing housing stock. Each sale
would in turn produce another sale, which would produce yet another and
so on. In other words, the policy objective of the tax credits was not
simply to generate short term sales acceleration. Rather, the goal was to
momentum is in fact waning. This is the context in which one may view
June—a month during which pending unit sales were down 13 percent
compared to the same month one year prior. Many analysts have concluded
based upon May and June data that the nation’s housing market is caught
in the clutches of another downturn, given that the tax credit impacts
have begun to falter.
create a self-sustaining momentum that could survive the cessation of tax
But as with the May data, there is room for yet another interpretation with
credit availability.
respect to June pending sales. For instance, it is worth noting that the
So we’re going to start this analysis with a look at pending sales, which
we usually discuss towards the end. Pending sales data will be useful in
determining whether the tax credit did indeed stimulate some sustainable
level of housing market activity, or, like the Cash for Clunkers program,
merely a temporary surge in home sales.
The May and June data indicate plenty of evidence that the tax credit
year-over-year decline in pending unit sales was less in June than in May.
What’s more, pending unit sales in Maryland were higher in June than they
were in May by 15 percent; an increase that is only partially explained by
seasonal factors.
Other Indicators are Generally Positive
program failed to produce sustained buying momentum. Importantly, in
A host of other indicators suggest that the market remains firmly in the
April, the final month of the tax credit from a pending sales perspective,
midst of recovery. For example, average sales price statewide in June was
pending sales were up 53 percent on a year-over-year basis. The
down just 2 percent on a year-over-year basis. In twelve jurisdictions,
Continued on page 32
31
Residential Sales
Continued from page 31
average sales price was either higher on a year-over-year basis in June or
unit sales more than doubled in June 2010 compared with June 2009
the decline in sales price was less than 1 percent. A number of large
(Caroline and Dorchester counties).
Maryland counties experienced rising home prices in June, including
Howard (+5.9%), Harford (+6.2%), Anne Arundel (+6.2%) and Baltimore
(+8.2%). In May, average sales price was down 5.0 percent on a year-ago
basis, with ten jurisdictions recording year-over-year price increases.
Looking Ahead
Though some analysts have already concluded that the housing market’s
recovery is nearing an end, the picture the data paint is far more complex.
Trends characterizing median sales prices are similar. In June, median
Unfortunately, there are indicators beyond the housing market that
price statewide was down 3 percent on a year-over-year basis, with nine
suggest that market momentum may not continue, including recently
jurisdictions reporting an increase in median sales price, fourteen reporting
released and disappointing data regarding both job creation and retail
a decrease and one essentially unchanged (Baltimore County). As of July,
sales. On the other hand, the active inventory of unsold homes continues
median sales price in Maryland stood at $265,268 ($273,447 one year ago).
to decline. As of June, there were 46,153 homes for sale through
In May, median sales price statewide was down 6 percent, with 18
realtors® in Maryland. One year ago, that figure stood at 52,256 units.
jurisdictions recording price decreases.
The ongoing decline in unsold inventory is consistent with the notion
Predictably, unit sales momentum continued through June, a reflection of
the pending sales momentum that remained in place through April.
Settled sales were up 30 percent in May on a year-over-year basis and 18
percent on that basis in June. All 24 Maryland jurisdictions generated a
year-over-year increase in sales in June, a reflection of the efficacy of the
that the market continues to approach equilibrium. Indeed, in certain
jurisdictions like Howard and Montgomery counties, supply-demand
equilibrium has already been achieved.
Anirban Basu, Sage Policy Group, Inc.
tax credits in terms of producing buying activity. In two jurisdictions,
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June 2010 vs. 2009
May 2010 vs. 2009
UnitsAverage Price
UnitsAverage Price
County 2010
2009 Change 2010
2009 Change
County 2010
2009 Change 2010
2009 Change
Allegany 48
30 60.0% $117,034 $113,033
3.5%
Allegany
51
46 10.9% $113,658 $125,137
-9.2%
Anne Arundel 493
410 20.2% 344,866 353,985
-2.6%
Anne Arundel
556
483 15.1% 375,129 353,284
6.2%
Baltimore City 529
419 26.3% 167,351 158,734
5.4%
Baltimore City
579
521 11.1% 171,574 175,812
-2.4%
Baltimore County 699
560 24.8% 252,166 265,407
-5.0%
Baltimore County
681
675
Calvert 91
73 24.7% 340,742 316,470
7.7%
Calvert
101
79 27.8% 300,480 346,413 -13.3%
Caroline 18
28 -35.7% 188,378 180,221
4.5%
Caroline
33
13 153.8% 184,349 166,815
Carroll 139
122 13.9% 274,916 290,832
-5.5%
Carroll
153
62 43.5% 209,057 247,323 -15.5%
Cecil
Cecil 89
142
0.9% 302,043 279,032
8.2%
10.5%
7.7% 304,562 315,625
-3.5%
87
76 14.5% 247,971 224,940
10.2%
Charles 145
119 21.8% 260,125 281,235
-7.5%
Charles
148
121 22.3% 265,945 274,963
-3.3%
Dorchester 31
21 47.6% 291,434 261,333
11.5%
Dorchester
26
13 100.0% 232,909 152,346
52.9%
Frederick 270
221 22.2% 266,132 287,312
-7.4%
Frederick
241
Garrett 17
25 -32.0% 410,351 257,118
59.6%
Garrett
Harford 268
186 44.1% 264,908 299,362 -11.5%
Howard 299
233 28.3% 391,697 381,946
1.7% 277,538 278,244
-0.3%
29
26 11.5% 440,500 322,066
36.8%
Harford
274
249 10.0% 301,727 284,148
6.2%
2.6%
Howard
336
305 10.2% 422,234 398,637
5.9%
8.3% 295,462 204,550
44.4%
Kent
14
874 22.9% 424,119 425,163
-0.2%
Montgomery
494 61.7% 210,341 241,997 -13.1%
Prince George’s
867
536 61.8% 204,126 242,917 -16.0%
-8.0%
Queen Anne’s
58
43 34.9% 358,604 402,484 -10.9%
5 260.0% 154,400 210,960 -26.8%
Somerset
16
9 77.8% 105,750 126,444 -16.4%
1.8%
St. Mary’s
106
84 26.2% 291,496 293,033
25 36.0% 381,288 603,696 -36.8%
Talbot
58
38 52.6% 449,953 592,316 -24.0%
5.3%
Washington
142
104 36.5% 178,204 200,877 -11.3%
Wicomico 88
55 60.0% 160,548 183,228 -12.4%
Wicomico
88
76 15.8% 158,463 190,712 -16.9%
Worcester 136
113 20.4% 282,190 315,735 -10.6%
Worcester
147
121 21.5% 292,666 325,950 -10.2%
Total 5,572 4,287 30.0% $289,080 $304,237 -5.0%
Total
Kent 13
Montgomery 1,074
Prince George’s 799
Queen Anne’s 39
Somerset 18
St. Mary’s 106
Talbot 34
Washington 129
12
36
8.3% 320,810 348,841
85 24.7% 308,177 302,869
79 63.3% 190,498 180,838
Figures reflect resales and new properties. Residential resales
are reported by MRIS ® and local boards MLS systems.
237
13
7.7% 360,214 288,312
24.9%
1,232 1,099 12.1% 470,564 471,758
-0.3%
6,023 5,109 17.9% $314,982 $321,491
-0.5%
-2.0%
Figures reflect resales and new properties. Residential resales
are reported by MRIS ® and local boards MLS systems.
4,330 3,350 29.30% $274,142 $298,843 -8.30%
33
From the Hotline
Charles A. Kasky, Esquire
First-Time Homebuyer Addendum:
Who Pays Transfer Taxes?
Q.
I know this is not new, but I receive contract offers all the time that
Now, however, under the second part of Paragraph 24B of the Contract,
include the First-Time Homebuyer Addendum and the parties simply want
even if the buyer is a first-time Maryland homebuyer, the parties expressly
to split transfer and recordation taxes. I thought Paragraph 24 of the MAR
agree that the local transfer and recordation taxes will be split evenly
Residential Contract of Sale already addressed that. Please explain
between the buyer and the seller. Again, the contract itself contains this
Paragraph 24B. The first part of the section seems to say that the Seller
agreement, which means that if the buyer is a first-time Maryland
will pay all of the state and local transfer taxes. The second paragraph
homebuyer, and the parties want to evenly split the local transfer and
seems to say that the Buyer and Seller will share the costs. How can that
recordation taxes between the buyer and the seller, the parties do not have
be? If the parties agree to split these costs, even if the buyer is a first-time
to attach the First-Time Maryland Homebuyer Transfer and Recordation
buyer, I don’t need to attach the First Time Buyer Addendum, correct?
Tax Addendum. The contract already contains that agreement. However,
A. You are correct, but many agents still attach the addendum to
if the parties want to agree to a different arrangement, such as the seller
contract offers. To fully grasp how Paragraph 24 of the MAR Contract
works, you must first understand Maryland law. The law creates two
paying all the recordation and transfer taxes, they should attach the
addendum.
presumptions. First, for most sales of real property, the law presumes the
In other words, the language in Paragraph 24B under the heading
parties will share equally the costs of state transfer tax and local transfer
RECORDATION AND LOCAL TRANSFER TAX is the “express
and recordation taxes. This is contained in Paragraph 24A. Second, the
agreement” of the parties that the recordation and transfer taxes will be
law turns that presumption around if the buyer is a first-time Maryland
split (and not paid entirely by the seller). But remember, if the Seller is
homebuyer. In that case, the law presumes the seller will pay the entire
going to pay all of the taxes, the parties need to attach the First-Time
amount of local transfer and recordation taxes and the seller’s portion of
Maryland Homebuyer Transfer and Recordation Tax Addendum and check
the state transfer tax. This is the first part of Paragraph 24B. Remember
that box.
that the buyer’s half of the state transfer tax is waived. This presumption
may be changed if the parties expressly agree to a different allocation of
the costs and that’s exactly what the contract does!
Finally, the First-Time Buyer check box on the signature page of the
Contract is simply there to alert the settlement agent that the buyer’s
portion of the state transfer tax is to be waived. In those cases, as you
As you know, in the vast majority of cases, even if the buyer was a first-
know, the buyer must sign the affidavit attesting that the buyer has never
time buyer, the parties agreed to split transfer and recordation taxes. In
owned a primary residence in Maryland.
other words, buyers did not take advantage of the legal presumption that
the seller would pay the entire amount. For that to happen the parties
Charles A. Kasky, Esquire, Vice President of Legal Affairs for the
would agree to split those items (reverse the presumption). In the past,
that was done by using the First-Time Buyer Addendum.
FREE Legal
Hotline
34
1-800-888-1272 • Monday, Wednesday and Friday • 10am – Noon and 2 pm – 4 pm
www.mdrealtor.org • Complete an Online Form available in the Legal Hotline tab
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• Baltimore Metro • Bel Air • Canton
• Federal Hill • Phoenix • Timonium • Westminster
Metropolitan Regional Information Systems, Inc.
Real Estate in Real Time
Increase your value as the real estate expert with help from MRIS, the local authority
Uncertainty and unreliable are two words that don’t bode well in the real
estate world. Home buyers and sellers look to their real estate professional
to provide an accurate and comprehensive ‘bird’s eye view’ of the market.
You are their partner in helping them through one of the biggest (and at
times the biggest) financial decisions they’ll ever make. Kelly McBrien, a
recent homebuyer in the Washington, DC metro area, is a great example
of today’s buyer. She is getting married in September and she and her
fiancé wanted to increase their living space in order to accommodate their
growing family. “Understanding and sorting through the numerous
resources can be overwhelming and confusing. I’m also planning a
wedding, and I want to make the right decision!” Kelly looked to her real
estate professional to give her the facts delivered in a way that she could
understand and help her family make the best decision. “My real estate
agent gave us the information we needed and wanted. We decided to rent
out our townhouse and found our dream house in the area that was perfect
for us, we couldn’t be happier,” added Kelly. MRIS knows how important
it is for you to be your client’s champion, which is why we have launched
RealEstate Business Intelligence (RBI) to give you access to the most
accurate market information for our area, directly from the MLS.
RBI’s website, rbintel.com, makes accessing statistics, reports and analytics
fast and easy. It is the place where
agents, brokers, appraisers and
other real estate professionals can
search, access and use the most
reliable market data in the midAtlantic region. Think about
getting your hands on reports about
real estate activity at the regional,
county, and ZIP code levels for
every jurisdiction within the MRIS
service area. “With RBI, we think
we are offering an unmatched level
of expertise in the marketplace,”
says Jonathan Hill, president of
RBI. “Our goal for this new
company is to offer deeper, more
granular regional information
about real estate that is more
current, of better quality, and at a
more reasonable price point than
what other companies in the
marketplace currently offer.”
RBI’s website was launched in
June, offering a basic level of real
estate statistics—on almost 70
36
counties and more than 1,300 ZIP codes in our region. The company is
presently rolling out advanced, interactive tools, and will respond to
demands for customized reports through RBI Custom Solutions. These
services will be available through tiered subscription agreements.
Tap into five terabytes of housing market data in the mid-Atlantic region
and become your client’s hero. A few examples:
n Let’s say you’re selling in an area where starter townhomes are mixed
in with “McMansions.” While the Average Sold Price for all units over
the past 12 months may be interesting, consider segmenting that
statistic for townhomes only where applicable. The more relevant the
statistics you provide is to your customer’s situation, the more
indispensable you become as their agent.
n W
hen deliberating over where to price the home, agents generally
should take into account the seller’s urgency. When seller relocation
is a high priority, provide them with data comparing Days on Market
for homes within their stretch price range compared to their safe price
range. This type of data point will often turn a complex decision into
a relatively simple one.
n W
hen consulting with buyers who are
new to the area, the most compelling
presentation might be reviewing a map of
the area with various stats plotted against
counties within MRIS. Once a preliminary
decision has been made on a county to
explore, zoom into that county’s map with
statistics plotted against Zip Codes it
encompasses. These “Stat Maps” are
another differentiating tool in positioning
yourself as the local “Stats Master.”
For your clients who like to do a little bit of
checking around on their own, turn them on
to HomesDatabase.com. Like RBI, the
information in HomesDatabase comes directly
from MRIS — it’s accurate, it’s updated in realtime, and it connects consumers to real estate
professionals.
Follow our Tweets: @MRIS_REal_News | Like
us on Facebook: facebook.com/MRISonFB |
MRISblog.com
Want more information? Contact MRIS at
[email protected].
Commercial Connection
New
column
Celeste B. Filoia, Esquire
Business Owners Find Value
in Cost Segregation Studies
Welcome to the inaugural column of the Commercial Connection.
electrical systems, and landscaping, are §1245 property--tangible personal
This new feature will be a regular addition to the Maryland REALTOR
®
property with a shorter recovery period and accelerated depreciation.
Magazine, discussing issues of particular interest to commercial
Reclassifying assets allows a business to maximize tax savings by adjusting
practitioners. Many of the topics we will examine arise out of
the timing of deductions.
discussions among the members of the MAR Commercial Alliance, a
forum of Realtors® who advise MAR and discuss commercial real
estate issues. We welcome your comments and suggestions.
Real property eligible for cost segregation includes buildings that have
been purchased, constructed, expanded or remodeled since 1987. Typically,
a study is cost-effective for buildings purchased or remodeled at a cost
Recently, Alliance members discussed the value of Cost Segregation
greater than $200,000. While a cost segregation study is most efficient for
Studies for business owners. Cost segregation, the process of identifying
new buildings recently constructed, it can also uncover retroactive tax
and separating personal property assets grouped with real property assets,
deductions for older buildings.
may be conducted for a variety of reasons, including tax (income and
property), financial accounting, and insurance purposes.
Currently, there are no standards for cost segregation studies or prescribed
qualifications for cost segregation preparers. The IRS recommends,
There are a variety of methodologies and procedures. According to the
however, that cost segregation studies should be prepared by individuals
IRS, a “quality” cost segregation study is both accurate and well-
with expertise and experience in the construction process and the tax law
documented. It should always:
involving property classifications for depreciation purposes.
•
For more information on cost segregation, see the following resources:
Classify assets into property classes (e.g., land, land improvements,
building, equipment, furniture and fixtures);
•
Explain the rationale (including legal citations) for classifying assets
as either §1245 or §1250 property; and
•
Substantiate the cost basis of each asset and reconcile total allocated
costs to total actual costs.
For income tax purposes, a common approach is to allocate or reallocate
building costs to tangible personal property, to calculate depreciation for
Federal Income Tax purposes. A building, or §1250 property, is generally
a 39-year property eligible for straight line depreciation. Equipment,
furniture, and fixtures, including non-structural elements such as wall
•
The Internal Revenue Service at www.IRS.gov
•
American Society of Cost Segregation Professionals at
www.ascsp.org
•
American Association of Cost Segregation Services at
www.cost-seg.org
For more information on the activity of the Commercial Alliance, contact
MAR staff liaison [email protected] or 800-638-6425.
Celeste B. Filoia, Esquire, Staff Attorney of Legal Affairs, Maryland Association of REALTORS®
covering, carpet, accent lighting, portions of the plumbing systems,
37
Unclaimed Money
May Be Yours
WHAT IS UNCLAIMED PROPERTY?
SEARCH FOR UNCLAIMED MONEY
There's almost $33 billion in unclaimed money sitting in state treasuries
There are active outreach programs in every state designed to reunite
waiting for a claim from the rightful owners. These funds may be
unclaimed property owners with their lost or forgotten assets. At least
unclaimed payroll checks, utility refunds, trust distributions, stocks,
two sites – www.unclaimed.org and www.MissingMoney.com – are
banking or checking accounts, certificates of deposit or the contents of
established by law to help owners conduct a comprehensive search for lost
safe deposit boxes.
assets. These sites allow you to connect to any state and enter an
Every state has a website allowing the public to search for property by
name of the owner. The process of claiming the property, as well as the
level of detail available online, varies from state to state.
inquiry.
REGISTER A CLAIM
Search every state where you’ve lived, checking maiden names and even
IS THERE A TIME LIMIT TO CLAIM
PROPERTY?
Property is considered abandoned if there has been no activity on it for
more than three years. After that, it is turned over to the state of the
owner’s last known address, and which holds it until the owner or heirs
claim it. There is no time limit to claim most abandoned property.
deceased family members. Claim forms are available from each state’s
treasury website and usually require proof of state residency and a
notarized signature. Beware of private services and websites that want to
assist you in implementing claims; they sometimes require large up front
fees or a percentage of your unclaimed property.
Let us know if you have any luck. Send your “happy stories” to
[email protected].
38
Welcome home to the country.
Buying a home in the country is even easier than you think when you work with Farm Credit. With
our Country Mortgages programs, we have the products you need.
Homeownership isn’t just a dream for customers that work with Farm Credit—it’s a reality. Give us
a call to learn more.
Win Big with Farm Credit
888.339.3334
Lending support to rural America™
Stop by booth #151 at the MD Association of
Realtor Tradeshow in Ocean City to learn more.
farmcreditmortgage.com
Dream made possible by MRIS
We help real estate professionals turn dreams into homes.
Visit us at MRIS.com | Real Estate in Real Time
TM

MD Realtor Magazine - Maryland Association of Realtors

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