Chad Kumpe

Lest We Forget!

My Momma told me, "It is never good to talk about religion or politics in class or in public." I hope Momma will forgive me for breaking her rule. We are now in the count down to the runoff for our elected officials: especially regarding who will be the Republican Congressman from Northwest Arkansas and the western part of the River Valley. The winner will most likely be the Congressman for the next two years. We Realtors put a whole lot of effort in staying in touch with our elected officials in Washington.

When business was really tough in the last year, the local Boards of Realtors and the NWA Home Builders Association put a lot of time and money in an advertising campaign named, "It's a good time to buy a home in Northwest Arkansas." We all should remember the person who stepped forward to be the spokesperson for that campaign. Mayor Steve Womack proved to be a great friend of our industry then and will continue to be.

All of us that make a living in the Real Estate Industry need a friend in Washington D.C. to help and protect us. Mayor Womack proved his friendship last year, and we need to return the favor on June the 8^th. Let's continue that friendship and keep it going into the future.

On another note: Have you seen the discussion on the Credit Consequences of Short Sales? It seems that a Short Sale, unless done very carefully, can affect that person's credit report for up to Seven years. A Foreclosure will affect the credit report for only Five years. It all depends upon how the financial instruction reports the occurrence. There have also been discussions about distressed homeowners being hit with Default Judgments after Foreclosures. The idea that we Realtors can give advice or council distressed homeowners should be strongly reconsidered.

I will be attending the Real Estate Educators Convention in San Antonia the middle of this month so I will be up to date on the newest things happening in the Real Estate Industry.

Look what can be obtain from the Internet!!

By now a great many of us in the Real Estate industry are fully aware of the power of Social Networks. They are a large part of many Realtors' marketing efforts. The regular standbys of "Facebook", "Plaxo" and "Linkedin," I hear from daily. (I don't "Twitter", yet.)

There are some other sites that can be very valuable to one's professional growth, and dedicated Realtors need to be aware and use them too. From a national and daily prospective there are some good list servers. "Real Talk" can help one stay abreast of general business conversations across a wide spectrum. It is monitored by some long time pros of Real Estate and the internet. "Active Rain" is a group of enlightened and productive Real Estate agents from around the country that blog about situations and thoughts from their perspectives. Sometimes funny, sometimes serious, and always thought provoking. Once a week there is Information from NAR sent out by Realtor.org. This has valuable information about legal situations Realtors encounter. The CRS website has great information about helpful and educational Webinars. If you are not a CRS, try "Real Estate Brainchain" that has a weekly video and other offerings in the practice of Real Estate. Another is John Mayfield a well known Tech guy who puts out a weekly webinar about using Technology effectively. The "Swanepoel Reports" are tuned to point out trends in the Industry so we can have an idea where it's going. A Canadian friend, Gord Garrie, puts out marketing tips on a daily basis on how to manage your business base. Closer to home the "Arkansas Realtor Blog" will give reports on the market in our state. For local Northwest Arkansas market insight, it's hard to beat Paul Bynum's "Mount Data" with his monthly snapshot of the MLS activity.

For helpful non-Real Estate info, a look at the national economy report coming from "Marcus and Millichap" and a good site for personal care is "Every Day Health." The internet has become an extremely helpful source for so many of us in the Real Estate profession. How quickly that has happened!

A survey is completed every year by NAR of Home Buyers and Sellers. They interview 120,000 buyers and sellers between July of the previous year and June of the current year. (This survey is now available for download at www.Realtor.org.) Fifty-six percent of the buyers last year were between 25 and 44 years of age with Forty-seven percent of all home buyers being first time buyers. By far the largest group of these first time buyers was in the 25 to 34 age range. I think this is significant, because when I look at my Board of Realtors, I do not see many Realtors representing this age group (only a very few.)

Forty-four percent of buyers found the Realtor they worked with by referral from friends or relatives. It was the "Sphere of Influence" we all talk about. How deep is your "Sphere of Influence" in the age group that makes up the buyers of today and tomorrow?

The survey also pointed out that buyers want most from their agent: first Honesty and then Representation. This seems to add up to "Trust."

So let's see what some other surveys say. A Gallup Poll, just released, rated the public's perception of the honesty and ethics of various professions. Nurses rated highest followed by Druggists and MDs. the lowest being Stock Brokers at 21^st and HMO Managers at 22^nd. Although Real Estate Agents were not ranked in November of 2009, using our 2008 ranking, we would have come in at 14 behind Bankers but ahead of Lawyers. (It might have been beneficial not to be ranked after the bad market of 2009.) The Harris Poll organization did a poll on professions in late 2009 also. This was a ranking of the public's perception of Prestigious Occupations. Again the most prestigious were Firefighters (62%), Scientist (57%) and Doctors (56%.) The bottom three were somewhat of a surprise to me: Stock Broker (13%), Accountant (11%) and Real Estate agent/broker (5%).

I am not sure how to put this all together. It looks like 17 % of the population trusts in us but not a lot of respect for us at 5%. This might give a clue to a final statistic that came from the NAR poll. About two-thirds of the buyers and sellers were satisfied with the service they received in their transaction (not great) but only 17% used the same agent for their next transaction.

Perception is reality!

Déjà Vu all over again

In the old days (before home inspectors) we Realtors carried a tool bag in our car. There was a wooden mallet for driving in those horrible wooden driver stakes that were supposed to hold up yard signs. There was a flash light for checking under the house for leaks and in the attic for insulation. There was a screwdriver and pliers for fixing minor things we found in the house before showings. There was also a 25 foot tape and a 100 foot tape for measuring rooms, as well as lot sizes. Some offices even had metal detectors to mark lot corners without the aid of surveyors. Most city lots had to be surveyed (cost $150) before closing any way. You see we Realtors were thought to be the experts regarding "a good, safe house."

Here is what is quickly coming at us. Buyers will receive a copy of the Appraisal Report any time between 10 days and 3 days PRIOR to closing. If a house is quoted in the MLS or in a Realtor ad as being for sale at, let's say, $92 per square foot and the appraisal report says the house is 50 or 100 feet smaller than advertised; that could cause a problem just before closing (if the buyer wants the quoted per square foot price.)

I do not think the county is particularly accurate in their measurements. Many home owners have little idea of square footage, only what they have been told. This is where the old 100 foot tape gets back in the Realtor tool bag. You must learn to measure a house accurately, or pay someone to do it for you. It would be wise to stop quoting a home for sale as priced at so much a foot. Remember, not all square feet are created equal anyway.

Some of the sharper Buyer Agents are making offers with a price on page one of the real estate contract, then going to page nine in paragraph 27 "other" and qualifying that offer based on a price per square foot. How do you advise your seller now? Some appraisers offer home measuring services to Realtors and/or sellers for $100 to $150.

In times past, we Realtors were the arbiters of house sizes. Sometimes changes bring back old ways.

2010 Contracts may not be out till after Christmas!

Although the 2010 Contracts may arrive just in time for the New Year, that should not present much of a problem as there were not many changes.

Four of the changes had to do with the "Broker Service Fee." It was simply removed from that paragraph in the Agency contracts. It will be negotiated with the Commission. Companies that collect that additional fee will need a new script to explain the charge.

There will be no choices for a buyer or seller to make on a "Closing Protection Letter." It will simply be mentioned in the boiler plate that it may be required by a Lender.

The "Enhanced Title Policy" will be handled in much the same way. If a 50/50 split is chosen for a combination policy both buyer and seller will split the cost of the Enhanced Policy due to new HUD-1.

There will be a new paragraph in all listing agreements where by a seller can instruct their agent as to the use of the information on the Internet. If a seller wishes their listing to be shared with other Real Estate sites on the net, other than MLS, there will be four questions to do with Blogging, Address, and Automatic Valuations to be addressed.

In addition to a few other minor changes, there will be two new forms. There is now a "Sellers Property Disclosure (Commercial)" and a "Real Estate Contract (New Construction)." The New Construction Contract is 13 pages including the FTC Insulation Requirements. It is to be used when a house has never been lived in, with the exception of a builder's own house that has only been occupied a relatively short time. The discussion about a "Punch List" is much better than the paragraph 15, b.

There will be a CE, Salesperson, and Broker course on January 5, 6, &7 using the New Forms at the AIRE classroom in Lowell/Cave Springs (Ark Hwy 264). Register and pay by credit card on our web site www.aire.us or show up and bring a check.