Can You Say Convenience?
June 10th, 2009 categories: Real Estate News, Relocating
As an old friend used to remind us, “We all going to make a little bit money, but none of us is going to get any more time.” Wasting time is something none of us can afford to do (well, at least I can’t). But, it seems that no matter how hard we try, it’s “built into the system”. In other words, it’s just part of life. Many of the processes we’re involved in are controlled by others. We don’t control all the moving parts, the timing, the content, or, the logistics of getting to the finished product. But, what if we could find a way to make things “better, faster, cheaper”, would we?
Callaborative platforms or software allows us to do just that. Collaborative management tools like videoconferencing, online chats, instant messaging, application sharing, Wikis, and many others, allow us to leverage technology to, in essence, make it easier to accomplish a task. Among other things, it provides users with access to the same material or event at the same time. In other words, simultaneous task accomplishment.
In yesterday’s real estate Google Alerts I ran across the article, New Business Eliminates Real Estate Paperwork, highlighting an effort by a couple of agents in Cincinnati, Ohio, to develop software that provides those involved in reale estate transactions the capability to track negotiations and complete transactions online, and yes, that includes using electronic signatures. The software is called MLS Contracts and is currently being Beta tested by their brokerage firm.
This looks like another tool to improve our business process. It’ll make the process more convenient and productive for agents and their clients. Let’s hope the Beta test is without too many hiccups, and before we know it, we’ll all be using MLS Contracts, or something similar.
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Mentoring Real Estate Professionals
June 1st, 2009 categories: Real Estate News, Relocating
“In every art beginners must start with models of those who have practiced the same art before them.”
Ruth Whitman
Mentoring programs designed to develop younger workers have long been a foundation of corporate training for Fortune 500 companies. These programs establish a relationship between the mentor and ”student” or “protege/mentee” that encourages individual as well as corporate development. The protoge relies on the mentor for, not only instuction on how to do the job, but also for professional guidance, and problem solving advice, through the establishment of a working relationship that benefits all participants; the mentor, the student, and the company.
According to Terri A. Scandura, a management professor and dean of the graduate school at the University of Miami, most Fortune 500 companies see mentoring as an important employee development tool, with 71% of them having mentoring programs.
If mentoring is a valuable teaching or developmental tool, why isn’t the real estate industry using it? While there may be isolated cases of individual brokerage firms using mentoring as a teaching tool, why doesn’t the industry encourage it more or adopt it as a necessary business practice? Perhaps, as the second stage of mandatory training necessary before a real estate licensee is certified to operate on their own?
I recently participated in a leadership development program hosted by three of the area real estate Associations. One of the tasks assigned was to examine the idea of a mentoring program for new agents, and to develop an outline of requirements for those licensed in the Commonwealth of Virginia. Our group put together the following outline:
MENTOR PROGRAM
VISION
To raise the standards of performance of Realtors by improving their education and career development through a mentor/internship program.
MISSION
To provide a comprehensive mentorship training program whereby all Realtors are provided with the educational tools, hands on instruction, and career counseling necessary to execute the responsibilities of a real estate professional.
PARTICIPANTS
Virginia Real Estate Board (VREB) – Establishes mentoring standards.
Virginia Association of Realtors – liaison between VREB and local Associations, overseeing standardization and coordination of Mentor Program.
Local Association – Advise and coordinate program with local Brokers, to include identifying mentors.
Brokers – In coordination with the local Association, responsible for establishing company Mentor Program. This includes:
1. Procuring curriculum. Ideally, a standardized curriculum, developed by the VREB, VAR and local Association will be used, and can be tailored by broker. However, minimum standards/ requirements must be adhered to.
2. Identifying mentors. This includes not only identifying mentor candidates, but ensuring they’ve been properly trained. Minimal standardized training requirements set by local Association in coordination with state agencies, resulting in Mentor Certification.
3. Identifying Students. While all new agents are required to complete program, those returning to an active role as a Realtor may also need the program.
4. Establish procedures and verify student’s progress.
Mentor– Responsible for instructing, encouraging and monitoring Protégé/Student progress in accordance with program standards.
Student – Realtor enrolled in Mentor program. Required to complete program in accordance with standard program criteria, and to the satisfaction of Broker.
MENTOR REQUIREMENTS
Individuals selected as Mentors should meet minimum standards to include:
· Minimum of 5 years Realtor experience
· Broker shall be qualified through a “mentor certification program” at the local board level
· Mentor will be qualified through a “mentor certification program” at the local board level
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Selected and endorsed by broker as an appropriate mentor. Clarification – Some agents are unwilling and others not qualified to mentor
· Brokerage shall compensate mentor at a minimum of 25% per mentor assisted transaction
· Mentors shall, at a minimum, provide agent with Mentorship Program Handbook that includes:
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NAR’s Professionalism in Real Estate Practice
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Contract documents
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Overview of mentor program
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Local Board’s Education Calendar
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Local Board’s suggested Tools of the Trade
STUDENT REQUIREMENTS
· Mentorship program minimum duration of 6 months, or as long it takes to accomplish minimum of 6 closed transactions, to include 3 listings and 3 sales
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To include listing presentation
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CMA
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Marketing plan per listing
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Buyer counseling session
· Competent understanding of Code of Ethics and Agency as well as having completed the post licensing continuing education requirements for each
· Build Business Plan to include Plan of Action
· Must demonstrate understanding of all contract documents
· Must demonstrate understanding of their market and product
· Must be acquainted with rental transaction
· Marketing & Technology orientation – the necessity to succeed
· Vendor Orientation – 30 min to 1 Hour per vendor
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Objective – understand role and responsibilities of industry partners, to include, but not limited to:
1. Home Inspector
2. Settlement Agent
3. Lender
4. Pest Inspector
5. County clerk/representative
6. Appraiser
PROGRAM EVALUATION
Identification of goals, standards of measurement and methods of feedback are necessary for the effectiveness of any developmental program. The following must be established, examined and reviewed throughout the course of the program:
During the course of the program
· Goals – established weekly, monthly, and transactional objectives.
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While some goals can be achieved by simply finishing a document or transaction, others can only be achieved with the subjective approval of the mentor/broker. It is important to discriminate between the two.
· Standards of measure – established by state agencies in coordination with the local Association and Broker to measure success of student and/or mentor.
· Feedback – establishment of a functional feedback mechanism for both student questions and inputs.
Post Program Review
· Establish feedback loop to evaluate program six months after program completion.
· Inputs from student, mentor, and Broker
While our outline is is not a perfect blueprint for an effective mentoring program, it is a starting point. Developing better competency and professionalism in the real estate industry is an ongoing process that all of us as individuals, and as a profession, should be encouraging. By establishing stricter pre-licensing requirements and developing a mandatory mentoring program for agents, each of us will be better equipped to practice our profession.
While these added requirements might improve our practice, how effectively are we using the current standards we, as agents, are obligated to follow? Is the Realtor Code of Ethics, established in 1913, outdated? If not, why it so poorly understood by agents, and rarely used to hold agents accountable for their actions?
| Discussion: 4 Comments »
A Modest Proposal (On Improving the Practice of Real Estate)
May 18th, 2009 categories: Military Installations, Relocating
Previously, I focused on the #1 complaint voiced by Realtors about their profession of Real Estate, that being, other Realtors. After discussing the most prevalent complaints voiced by them, the article concluded by asking, “How do we improve the way we do business”? Since licensing requirements and/or standards vary by state, I’ll focus, specifically, on improving the standards of practice in Virginia.
If agents aren’t performing up to the standards our profession requires, how do we ensure they do? Is it a matter of better preparation? Better oversight? And, more importantly, how do we fundamentally change the way we do business? If the current standards used to conduct business aren’t getting the job done, if it isn’t compelling the type of professional behavior we want from our practitioners, what changes are needed?
Believe it or not, the National Association of Realtors(NAR) established professional standards for real estate practice nearly 100 years ago, outlined in their Realtor Code of Ethics. But, the Code is not law. For Realtors, the Code defines duties and obligations required in the public interest, which are beyond the capacity and power of the law to mandate, and supplements the law by requiring a higher sensitivity to the duties and obligations which it imposes. The Code’s “bottom line” rests upon putting the client’s interest first in the transaction.
While the Code of Ethics provides an excellent set of rules or guidelines, what are they worth if they aren’t followed, or Code violations not reported? Or, in some cases, for various reasons, not punished?
While few doubt the Code’s intent, many of my peers have voiced concerns over how well or closely those in our profession practice the Code. And, remember, adhering to to the Code is not optional. But, the Code is supposed to be a starting point. And, if the Code is a simply a beginning, what other preparation or training is needed to develop the standards we need to more effectively professionalize our business. Let me propose three steps:
1. Dramatically increase required Pre-licensing course work, to 60 college semester credit hours of only real estate coursework.
2. Mandatory, Standardized Mentoring Program for New Agents.
3. More Effective Use of Grievance and Professional Standards Processes.
Each of these recommendations will be examined in articles to follow. While these proposals aren’t new, the need for each hasn’t disappeared. Instead, according to anecdotal data, they’re needed now, more than ever.
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Fredericksburg’s Tax Man
May 4th, 2009 categories: Real Estate News
Balancing a budget is one task that most public officials seldom look forward to. It requires making choices. Often, tough choices.
As reported in the weekend’s Free Lance Star, Fredericksburg’s recent budget proposal by the City Council indicates the real estate tax rate for the city will increase from 56 cents to 70.5 cents per $100 of value next year. If the proposal is successful, that would mean the tax on property valued at $100,000 would be $705 dollars instead of the previous rate’s tax yield of $560. While that appears to be a sharp increase in what property owners will pay in real estate taxes, that’s not the entire story.
Real estate tax rates normally fluctuate depending upon the variance or change in the assessed value of real estate in the county/city. What is assessed value? Simply put, it is a dollar value assigned to a property for the specific purpose of assessing or calculating taxes. In Fredericksburg’s case, there was an overall decrease of 24 percent of single family residential property values. To compensate for the decrease in real estate property values and, as a result, lost revenue, the tax rate had to be increased to gain needed revenue to meet budget expenditures. In addition to meeting the budget costs, the City Council decided to ”plus up” the tax rate to bring in additional revenues as well. That to the tune of $1.6 million.
That additional money may be where the Council runs into a bit of trouble. Many citizens understand the balancing act between assessed value and the real estate tax rate. However, the tax rate increase to generate new revenue seldom passes without opposition. Fortunately, citizens can voice their concerns, pro or con, at a public hearing, scheduled at City Hall, on June 9, at 7:30 PM. For those who enjoy a bit of back and forth with elected officials, you might want to mark your calendar.
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Custom Made For Vets
April 22nd, 2009 categories: Finance, Real Estate News, Relocating
Locating pertinent information on loans, and specifically, home loans, is an exercise every home buyer attempts in preparing to buy a home. For military personnel and veterans, a Veterans Administration (VA) loan is often the vehicle of choice. But, is it the best choice for Vets?
The folks at VAMortgageCenter.com do an excellent job of providing veterans with the information they need to make an informed decision about VA loans and their value. As a matter of fact, they’ve provided me with a brief article outlining the benefits of the loans. Using accurate, factual data is vital to making an informed decision. And, that’s what the article below provides:
Whether you’re getting back from deployment and you’re ready to make that move from the barracks to homeownership, a little one has arrived and your family needs more space, or you’re a seasoned homeowner and you’re looking for the best loan product to fit your needs, the VA Mortgage Center. Com will help you secure affordable financing with a VA loan.
The VA loan is the best product available for active duty members and veterans purchasing a home because of its No-Money down requirement, one of the last mortgage products available to offer such financing. In addition to No-Money down, the VA Loan offers:
è Relaxed Credit Requirements
è Minimal out-of-pocket expenses
è No Private Mortgage Insurance
è No Pre-Payment Penalties
è VA Loans are Assumable
You can also use the VA Loan to refinance your current home, regardless if you’ve used the VA Loan before. Examples of using the VA Loan to refinance:
è Streamline a current VA loan to lower interest rate
è Consolidate a conventional mortgage or second mortgage into a VA Loan
è Take out cash from home equity to eliminate other debt
è Take out cash from home equity to make home improvements
è Transition from an Adjustable-Rate Mortgage into a Fixed-Rate VA Mortgage
While the VA Loan is designed for Active Duty Service Members and Veterans, there are eligibility requirements:
è 24 Months Active Duty
è 90 days of service (wartime) 181 days of service (peacetime) for veterans who served after Sept. 15 1940
è National Guard members completed six years of service
è All members must have been discharged under conditions other than dishonorable
VAMC, one of the nation’s leading VA Lenders and an A-Rated company by the Better Business Bureau for its overall dedication to customer service and ethical lending practices, has a skilled team of VA Specialists who will take you through the VA loan process.
“I could not have asked for a better experience then the one you and VA Mortgage center has given me. I do believe your service is the reason I got into my home and without it I could not have bought a house… Thank you for serving the American Veteran.”
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Dropping Into Your Lap
April 4th, 2009 categories: Market Trends, Real Estate News, Relocating
“Doubtless one man’s loss is another man’s gain.”
Walter Scott, 1821
Yesterday’s New York Times featured an article on the influx of first time homebuyer’s who’ve taken advantage of the current real estate market, which is flush with foreclosured homes for sale. Of course, “foreclosure property” normally means a home priced at a bargain.
The article highlighted a few bright spots in the evolving housing market:
1) Many families, who previously rented, are now finding bargain prices coupled with rock bottom interest rates, resulting in increased purchases.
2) The addition of the first time homebuyers tax credit of $8000.00, coupled with bank incentives (like closing cost assistance for buyers) on listed foreclosed homes has encouraged many to purchase a home for the first time.
3) Additionally, many buyers ar taking advantage of current Federal Housing Authority loan requirements which allow for lower credit scores and a down payment of 3.5 percent of the purchase price of the home.
For many of us in the real estate industry, the Times article is anything but surprising. The price depression is something you’d have to be blind to miss. Coupled with low interest rates, and now, prime buying season, those interested in purchasing a home, who may have been on the sidelines waiting for the dust to settle, have decided it’s time to get in the game. Perhaps they’ve heard the old adage; “Never look a gift horse in the mouth.”
If you’re one of those on the sidelines, don’t you think its time to get moving? Believe it or not, the great deals won’t be there forever.
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