Bayou, Bowl, and Brees

In an effort of full disclosure, New Orleans has always been a special place for me.  My Grandmother’s youngest sister, Jean Bertrand still lives there. It has been one of my favorite destinations since my first visit as a child in 1967. 

 This past weekend,  my wife, Susan, my sons, Matthew and Ian, (all Realtors^®), traveled to Miami to watch the New Orleans Saints play the Indianapolis Colts in the Super Bowl.  As a New England Patriots fan, one is predisposed to root against the Colts, but in this case, I really wanted to Saints to win.  The first half was frustrating, but it felt like a Saints home game in the Super Dome.  The fans were so supportive of the Saints.

The second half was amazing.  From the onside kick to the interception, you knew the Saints ‘had’ to win.  And win they did.

 It was a victory on so many levels.  The Saints beat the Colts. Drew Brees beat Peyton Manning, and New Orleans beat its recent past. It marked the renewal of confidence in the future.  Not just for New Orleans, but for this country.  It was one of those rare events in which heart, hard work, and perseverance overcame despair and defeat.  It was a Rocky story and embodied the same kind of story of the American Revolution about a small group of colonial farmers who took on the world’s greatest military power and won.  The Saints embodied the hope of a City and a people.  They delivered in a grand and honorable way.

 When Katrina struck New Orleans, it provided REALTORS^® with an opportunity of sharing our heart in several ways.  First, we didn’t abandon the city by taking our convention to another city that year.  We stood by New Orleans during their hour of need.  We also showed our heart by funding and building not just one symbolic home, but 52 Habitat for Homes.  We helped rebuild the city and built homes in the devastated Ninth Ward.  It remains one of my proudest moments as a Realtor^®.  This fall, God willing, New Orleans will be the setting for my installation as 2011 NAR President. In many ways it feels like the circle completing itself.

 My Facebook friends have heard me say, that this was a great example for us in real estate.  The housing downturn has been very challenging, not in the deadly way that Katrina was, but it a very destructive way.  But it is in the response to both challenges, where the similarity lies:  You overcome defeat and despair with heart, hard work and perseverance.  That is exactly what we are doing as individual Realtors^® and as an Association.  It is an honourable and necessary pursuit.

One additional thought: Drew Brees is a talented quarterback but is a more exceptional human being.  He shares success and victory while assuming failure and blame.  He is gracious and respectful.  He went to New Orleans in 2005 with bleak professional prospects and a serious shoulder injury. But like New Orleans, he overcame his challenges to become the best quarterback in the world.  He is a great example of a real hero, not just a successful athlete.  (He would make a great Realtor®, too.)  More people watched the Super Bowl than any other single television event in history.  It was great that the largest audience ever was able to view an historic event.  A city shakes off its challenging past, and steps over the threshold to a bright future.   Let the good times roll.—Ron Phipps, 2010 NAR President-Elect

Life, Liberty and the Pursuit of Leadership

Being a leader at the National Association is a true privilege, an awesome experience, and a genuine challenge.  

At this point, my term as President-Elect is almost one quarter over.  While time accelerates when you get older, it leaps into supersonic speed when in leadership.  It is noteworthy that my term as President (2011) will be over in 21 months, November 2011. Every second, even the exasperating ones, of this experience is worth it.  In every sense of the word this is a privilege.  Our organization is special with a high purpose, professional members, talented staff, and a mission beyond our self interest.  It is one of those rare places where the people around you, not only encourage but also ‘make’ you into a better person and leader. 

 

One of the reasons this is true is that ‘the leadership team’ really is a team.  We work together.  We discuss, disagree, deliberate, and decide.  I am truly fortunate as the team I work with is very collaborative: Vicki Cox Golder, President; Moe Veissi, First Vice President; Jim Helsel, Treasurer; Dale Stinton, CEO; Charles McMillan, Immediate Past President; Brook Hunt, Vice President of Committees and Vince Malta, Vice President of Government Affairs.  This group listens, analyzing and then reacts.  Decision making is cautious and reflective.  Yet decisions are made.

 

It is a demanding and challenging route to become an NAR officer.  My experience is typical as I began campaigning in my home region in 2003, to become President in 2011.

The campaign process to become a Congressman, United States Senator, or even President, is shorter.  It causes me to pause when I hear talented future NAR leaders talk about running to be President or Treasurer in 2021 or later.  What is good about our process is that it ‘vets’ candidates.  With the political process, the nominating process, and the Board of Directors review, one has been thoroughly researched and qualified.  It is in many ways an endurance process.  It is in the end worth it.

 

Each member of the leadership team has to balance NAR work, professional work, family, home, exercise, and prayer/reflection.  Most of us still work in our core business.

I am typical in that I still work with sellers and buyers.  This week, I listed two properties and am getting ready for two closings next week.  (Thank God).  Obviously, in our family business I have backup and support.  My wife Susan Martins-Phipps and my sons Ian and Matt cover what I cannot.  One advantage of being involved in the business is that you really know what is happening in the field.  That helps when speaking for Realtors®, particularly in Congress. It would be fair to say that balancing this is very difficult.

 

One of the reasons it is challenging is you must exercise personal triage. You cannot do everything, so you are forced to choose.  How do I balance my work load with my NAR responsibilities, and still have time for family, exercise, religion, etc?  I will share that it is a daily deliberation.

 

In the end, the pursuit of leadership is nothing short of great: a great experience, a great opportunity, a great challenge, and a great journey.  Thank you for letting me travel this path. – Ron Phipps, President-Elect 2010

My Holiday Wish for NAR in 2010, Posted by Ron

We celebrated Thanksgiving a month ago and are about to step over the threshold into 2010. As I get older, it seems like the holidays are closer and closer together and the years get shorter. This one is no exception. It is simply unbelievable that we are already here at 2010.

In truth, this topic was suggested. It is a great topic, but as a Realtor®, we both know how hard it is to ‘stay in the lines.’

This topic is particularly thought provoking, because 2009 was a year with accomplishments and brutal challenges. As an association, that is together, we logged an amazing number of successes: a permanent ban on banks in real estate, extension and expansion of the homebuyer’s tax credit, launching our consumer website HouseLogic.com, the establishment of the Realtors Property Resource (RPR), delivery of the Right Tools, Right Now initiative, extension of the higher conforming loan limits and the selection of the Game Changers winners. By any measure this is a bold and impressive list of accomplishments.

On the other hand, it has been an extremely challenging year for us as individual Realtors®. Yes, sales statistics show improvement in most markets, specifically more sales, but prices continue to correct.

What has changed is the work required between the sales agreement and closing. It has increased exponentially. 30 years ago when my real estate career began, the signing of sales agreement would lead to closing 99 percent of the time. Now, that percentage is closer to 80 percent, especially this past year. In every instance, the challenge has been financing. 30 years ago 90 percent of the work and time required in a transaction was prior to sales agreement. Once it was signed the details were clerical. Today, 60 percent of my transaction time is spent on pre-qualification, search, and negotiation. 40 percent of my time is now spent on inspections, FINANCING, APPRAISALS, conflict resolution, title search issues, closing logistics, and last minute lender requirements. In the digital age, how has the process become so ‘inefficient?’

So, my wish for the association is that our members engage the tools and the information that are in front of us. And that we look forward, patiently, to the future of our association and our industry, particularly with things like RPR on the horizon.
We have been through the worst of the economic storm. We thought this was going to be a 10k endurance event; it has become an economic marathon. We know there is finish line, but we still cannot see it. We are really ‘digging down deep’ to get there.

This business challenge has evidenced itself in the mindset and the health of Realtors®.
We are told that” what does not kill us, makes us stronger.’ We are now strong enough.
We as people and as professionals are ‘can do’ individuals and team members. We are positive and confident, but mature. We are also pragmatic and goal oriented. (We are also tired and the stress has evidenced itself in the overall health of many of our members).
There is a life lesson, not just an economic lesson, for us: Marathons are completed one step at a time. They are about endurance and persistence. Results driven Realtors® are not very patient. We want it yesterday. It is coming tomorrow; or rather we will get there tomorrow.

This market is changing and improving. 2010 will be the year of improved sales activity, but also an improvement in average price. It will be a true turning point.
All the best, brother and sister Realtors®. Our best days are before us. – Ron Phipps, 2010 NAR President-Elect

Beginning Anew, Posted by Ron

It has been two weeks since we left San Diego and the 2009 National Association of REALTORS® Conference & Expo. Even with the ‘interruption’ of Thanksgiving, the wow of the Conference has not worn off. The meeting was a culmination and a celebration of a great year: the Right Tools, Right Now initiative, banks permanently out of real estate, expansion and extension of the tax credit, another year of higher conforming loan limits, the Game Changer competition, roll out of the consumer Web site HouseLogic.com and the introduction of the Realtor Property Resource. Any one of these achievements would have been an accomplishment, but SEVEN is remarkable!

We have actually created a case study for business schools: How does a 100 year old trade association re-create itself to be more valuable and strategic to its members? How does a large organization move quickly, quietly and efficiency? How does a large ship move a like jet ski? How does an organization with traditions and mass become inventive and entrepreneurial? How does the organization become, to use Moe Veissi’s word, nimble?

NAR has done it all.

There are lots of books written about effectiveness in the information age: Good to Great, Blink, Seven Habits of Highly Effective People, and so many more. The new National Association of REALTORS® has embraced all of the elements articulated in these books: common sense, strategic planning, and applied business principles. There is a fresh and direct partnership between volunteer leadership and our talented professional staff. It is a balanced partnership that recognizes the strengths and competencies that each brings to the table.

We in leadership talked about a new beginning in San Diego. We suggested it was a commencement. The description is appropriate. Both the association and the world we live in are new and different. There is an old adage that if you do not learn from history, you are bound to repeat it. We have studied the history, and while we will make some mistakes (as even measured risk produces), we are committed to real progress rather than motion.

Most people, including our own members, focus on what has been accomplished. But, the real ‘revolutionary change’ is the way in which these milestones have been delivered. The association as adopted the eyes of the REALTOR® as its eyes, and now its world vision is from the perspective of the REALTOR® on the street. The eye sight is crisp and sharp. We have rediscovered our purpose in our second century. The Leadership Team, led by Vicki and Charles, and our professional staff led by Dale Stinton have reason to be proud. It’s not your Grandfather’s association any more.

It’s OUR association. Members have never had as much equity in the association as they do today. The association is more relevant for its members that it has ever been: political advocacy; research, public awareness, global business, commercial real estate, and so much more including all of our 2009 accomplishments.

You can tell from the tone of this blog that we have reason be proud and excited. But what really moves me is the innovativeness, creativity, risk taking, and determination of our membership. The best ‘applications’ of technology are often never contemplated nor intended by their inventors. Can you imagine what our membership is going to do with these new tools? Our customers and clients should get ready to be ‘wowed.” It is simply: AWESOME. – Ron Phipps, 2010 President-Elect

Getting Passionate about HouseLogic, Posted by Ron

I just finished a panel on one of NAR’s newest member benefits that has the ability to transform the way REALTORS® interact with consumers in fundamental ways. I am talking about NAR’s new consumer-oriented Web site HouseLogic that is launching for members here at the REALTORS® Conference and Expo in San Diego, and will launch to a broad-based audience in February 2010.

I am one of the most enthusiastic believers on the Leadership Team of the impact this site will have on our members and how we interact with our clients and consumers. The real benefit of the site is that it isn’t about selling, instead its about providing value to homebuyers and homeowners beyond the sale. REALTORS can sometime be knocked for just being involved with consumers during the sale, but with this site, it will involve us well into the long-term period of homeownership for the consumer. This site will help move REALTORS from just being at the center of the transaction and firmly placing us at the center of the homeownership conversation.

Just as the $8,000 dollar tax credit was an immediate benefit for consumers, so now the HouseLogic consumer Web site is an immediate benefit for members in that it provides countless dollars worth of real estate content that REALTORS® can use in their day-to-day businesses.

The most awesome aspect of this site is that it belongs to you – the members. It is yours to integrate in to every aspect of your business, and the price point for members if free! It just doesn’t get better than that!

And the area of the site that REALTORS® will want to bookmark www.houselogic.com/members is the REALTOR content resource that will allow you to access to the free ready-to-use content.

I hope everyone is as excited about this new tool as I am because we now have the resource in our hands that keeps us at the center of the homeownership dream. – Ron Phipps, 2009 NAR First Vice President

Cycles of Life, Posted by Ron

This past week was one of the best of my entire life. My son Matthew and his wife, Christina gave birth to healthy twin daughters: Nazare and Maria. They were born five weeks early and are still in the Hospital Nursery, but both are breathing and eating on their own. They are so beautiful. Nazare was born first, and she reminds me of her father: high energy, intense, and head strong. (I remember my father’s enjoyment when he meant Matt as an infant. He thought it was good that I get a challenge like Matt…I understand now). Maria is, at this moment, more reserved. They are going to keep their parents busy. Along with their birth, what was also so important about this event was it brought our family together in celebration.

For my family, the gift of the girls is truly AWESOME. Their birth is the renewal of the cycle of life. And, of course, this reminded me of the cyclical nature of the economy and the housing market in particular. This downturn is part of the normal cycle of business. Our goal is the get through it to enjoy the next real estate renaissance.

It is fitting that this birth is happening at the gloaming of the autumn seasons. Leaves have fallen and are blowing as nature prepares for winter. Time is marked by the seasons. This is a time of harvest, which may be one reason why the REALTORS® Conference and Expo is always held in November. As we gather in San Diego in a few weeks, we will harvest the relationships we have built over the seasons by meeting up, and learning what is working in the market place.

As REALTORS®, we are all professionals at various stages of life’s cycle. Some of us are just starting out in the profession; others have been in the industry for several years, even decades. No matter where we are in the cycle, gathering together is essential to revitalizing ourselves.

We have been through a difficult market, and, more than likely, things will still be bumpy ahead. But, going through this challenging cycle without the support of fellow REALTORS® would make it even more difficult. In the truest sense of the word, we are a family, which means we gather together when times are good and bad.

Last year, the REALTOR® family helped my personal family through a very difficult time. This year, my family is celebrating this blessing of birth. The cycle of life changes, and so will our fortunes as REALTORS®.

Soon, spring will arrive, just as tomorrow the sun will rise. The market will get better. It may not be immediately, but that is why gathering our REALTOR family together is so important during the ebbs and flows of life’s many cycles.

I look forward to seeing everyone in San Diego. – Ron Phipps, NAR 2009 First Vice President

The Picture of Health (Reform), Posted by Ron

It is the 13th of October and I am writing from the 13th State. Yesterday, the Senate Finance Committee voted to forward a health care plan. The vote was 14 to 9 with Olympia Snow, Republican from Maine, voting with the Democratic majority.

The self-employed and small employers, such as REALTORS® and realty firms, would benefit from the significant changes that the amended Finance bill makes to traditional insurance underwriting and rating practices, including bans on the use of pre-existing conditions, health status and a number of other rating factors that have made coverage costly or unavailable. Self-employed individuals would be given an added advantage in that they could choose to purchase private health insurance as an individual or as a small business through the new health insurance exchanges.

Before the Finance measure goes to the Senate floor, it will be melded with the Senate Heath, Education, Labor and Pensions Committee bill, which passed earlier this year. The melding will be done by the Senate and committee leadership. Once melded, the combined bill will go to the Senate for a vote. Then, the House has three committee versions of its bill, HR 3200, that are also going through the melding process so that a single House bill will emerge for approval by the entire House.

In short, the legislation is moving forward, but has many steep hurdles to clear before it becomes law. It is important to remember that we are still in the early innings of health reform, which means the actual language that will be in any final bill is very fluid right now. Because of this, your National Association has not taken a position on the bill.

What your Leadership Team and staff have done is to work through the entire process, without a respite, to make sure that any legislative proposal includes provisions that take into account the unique challenges of the self-employed and independent contractors. Moreover, NAR has also been both visible and vocal about its opposition to any proposal that would limit the mortgage interest deduction (MID) as a means of “paying for” health reforms. You can be sure that we continue to be vigilant in that commitment.

We understand how important this issue is to the members. Last week, I traveled to the Maine Annual Convention in Rockport. Much of the conversation focused on health care. What was striking is the calmness of the conversation and the desire to understand and be understood. Over 20,000 people in Maine have lost their jobs over the past year. Its economy is a mirror of much of the country. Generally, the perspective was one of value. If we are going to have a national health insurance program it should have cost controls, be portable, be available to people with pre-existing conditions, and provide quality care. It should have ‘common sense.’ Does this sound familiar? It should. These are the National Association of REALTORS® priorities on health care reform.

All of this was in contrast to my personal experience in Rhode Island. Our small office obtains health insurance through Blue Cross/Blue Shield of Rhode Island. This month’s premium is $3,600. Over the past two years we have cut our overhead by 50 percent, but our costs of health care have increased by 25 percent. This has been necessary and I am confident you have been engaged in the same process. It is frustrating to see my premiums increase in part to fund a beautiful new glass skyscraper in Providence.

Nevertheless, please know that NAR is actively engaged in bringing common sense to the conversation. As Brokers, agents, support staff and Americans, this is a critical debate. — Ron Phipps, 2009 NAR First Vice President

It’s A Small World, Posted by Ron

We have spent the past week here in Greece attending the CEREAN (Central European Real Estate Association Network) annual conference, held is Thessaloniki. It has been a most educational and productive trip.

First, people are people. Regardless of language, race, color, heritage, baseball teaming branding, people are people. We were warmly received by our Eastern European hosts. It seems that a smile needs no translation. It was surprising to hear many of the attendees tell us that they were impressed that we were so human, open, and engaged. (We are REALTORS®…that is what we are.) Dale Stinton and I both did formal presentations. As we talked translators simultaneously spoke in Greek and Russian. At first it was distracting, as you wondered how precisely your words were communicated. After listening to English translations of other presenters’ Greek and Russian presentations, it becomes ‘normal.’

Secondly, the importance of engaging international partners became so obvious. The earth may not be getting smaller, but the globe is. The Ukrainians were expressing frustration about buyer’s agents being able to collect a fee. The Romanians were complaining about government interference in real estate transactions. The Bulgarians were frustrated about the lack of mortgage money and credit. Does it sound familiar? One of the best parts of the conversation is it reminds one of how great our ‘system’ of real estate works.

In many parts of the world, there is no MLS system. There is no system of ‘cooperation and compensation.’ The lack of licensing, training, code of ethics, are challenging in the ‘emerging profession.’ It is to our advantage to share our systems and experience to benefit our members. It would be great to know that a referral to Greece would result in a referral fee. It would great to know that the investment our buyers are making in other markets would be with reliable professional advice. The international market is a huge market with exceptional opportunities for our members.

Finally, the international interchange of our organization leads to trust and understanding beyond real estate. It leads to understanding among different people. Its advantage goes way beyond real estate. – Ron Phipps, 2009 NAR First Vice President

The Grand Canyon between Buyers and Sellers, Posted by Ron

As a student of real estate markets and trends, one cannot help but see a growing delta between buyers and sellers in their perspectives on the market. The average buyer has become a critical shopper. He, she, or they spend much time looking at sold comparables, websites like Zillow and Trulia, BEFORE they actually start to look at specific properties. It maybe simply a characteristic of the latest generation of homebuyers… Yet as a group they are extremely analytical. Furthermore, they are surgical in their approach to home acquisition. They learn, and know value. They purchase based on value. The best measure of value is price, or more precisely initially ‘list price,’ but ultimately ‘sale price.’ The current home buyer is looking for great value. The list price must be compelling not competing. Many of the buyers I am working with now spread sheet their search. It is empirical. It is not emotional. It is also based on closed sales, not based on the list prices of competing properties. Buyers know and understand absorption rates… (The number of months, it will take to sell all of the listings on the market, at the current rate of sales.) Also, the ‘average buyer’ is in his. her, or their mid thirties. (The average seller is significantly older). The National Association of REALTORS® released a new statistic that 94% of buyers between 25 and 40 use the web as their first and primary source in the home finding/acquiring process. This is amazing. ‘Pretty pictures’ in magazines or newspapers are not as effective as online photos, floor plans, videos, etc. The typical buyer speaks a different language and engages the process in a totally different way than the typical seller. The generation difference is amplifying the void between sellers and buyers. For buyers, this is a ‘strategy’ to find a great value. Sellers are trying to sell their ‘home.’ Most buyers are simply more objective.

The sellers are as a group, well intentioned but somewhat misinformed. The sellers are in most cases genuinely committed to selling. They firmly believe that their house or their neighborhood is better than the recent comparables and competing properties. In many instances they never view any of the competing properties. How do you make an informed decision without ever looking at the competition, (at least online)? Often sellers have only one or two REALTORS® give them a marketing presentation. The single largest mistake that they make is that they hire the REALTOR®with the highest recommended list price. What about record of sales, experience, and understanding of the market. I recommend that my potential sellers look at their home’s assessment, Zestimate, and Trulia value before we meet and discuss price. Many sellers are unwilling to discuss the absorption rate. As an example: In East Greenwich, there are 14 houses on the market over 1,000,000. One is pending above a million and two have sold in the first half of the year. 3 total in six months is an absorption rate of one house every two months. With 14 listed it will take 28 months to sell the existing inventory. North Kingstown is more challenged. 1 sale, nothing pending and 20 properties above $1,000,000. A normal market would be 6 to 7 months of supply. The buyers know this: many sellers simply ignore this. The pattern and trend is the same in the lower price points, but fortunately not as severe. One of the contributing factors is that competition among listing agents to get the properties listed overwhelms the need for realistic price setting.

I have been speaking of buyers and sellers as universally the same. In fairness, they are not. The effective buyers are buying value and quality, not necessarily luxury. The effective sellers are learning the language of the buyer: it’s called value. With a significant oversupply price will come down. In Rhode Island, there is a herd mentality among sellers. One bases price on the other competing listings that are NOT selling. The price needs to be based on closed sales. This is a very difficult market. Prices continue to adjust downward. If you do not need to sell and want premium value, take your house off the market, and try again in a few years. If you need to sell, price it to be competitive. You should be one of the best two or three ‘values’ in the price point. Do not follow the sellers’ herd blindly over the cliff.

If you do this well as a seller, you will be able to be a BUYER. — Ron Phipps, 2009 NAR First Vice President

Orginally Posted on Phipps Realty Rhode Island blog

Too Loud to be Heard, Posted by Ron

On Wednesday night, my Congressman Jim Langevin, held a constituents’ meeting on health care reform at the Warwick City Hall. The City Council chambers hold 475 people. Every spot was filled and more than 100 people assembled outside. In an effort to educate the public, Congressman Langevin presented a power point presentation. To his credit, he remained civil, patient and attentive. It is not easy to stay on message when people are yelling and screaming at you. It is also not easy to engage in real discussion when people come with an agenda of disruption and distraction.

Obviously, health insurance reform is a major issue for this country. It requires serious, open discussion. For REALTORS®, health insurance reform is about having access to affordable health insurance policies. Our status as independent contractors or self employed limits many agents to purchasing individual policies with high out of pocket costs, or simply to have no health insurance at all. Our membership survey found more than 300,000 REALTORS® have no health insurance at all, countless more have less than comprehensive policies and are at risk of losing coverage due to increased costs. It is a real challenge, in fact, a hardship for many of our members.

As a result, the National Association of REALTORS® is actively engaged in the conversation. We are working toward prudent, effective health care reform that recognizes our unique income situation as independent contractors or being self-employed. Also, we have been arguing for insurance reform and cost control. As Americans, we are involved in the conversation. As an Association, we seek a dialogue that addresses the needs of our members and staff. Know that we are doing that. I should also mention that NAR hasn’t endorsed ANY of the health care proposals floating around on Capitol Hill. And we won’t until a clearer picture of the final package emerges. That is why we are listening, learning and discussing. The issue and our membership require it.

You should expect that there will be more loud public forums. That is the way of public discourse now. It is a way for people to share the intensity of their position, but it would be very helpful to listen and learn before reacting. The majority of sound bites shared by the media demonstrated a total lack of understanding of the proposals. Ideology is important, but it should be argued with accurate information, not innuendo and propaganda. This applies to all sides of the issue. While it would be naïve to expect a change in process, it would be encouraging to work toward resolution of the issue with information and common sense. It is too important an issue to ignore or minimize. – Ron Phipps, 2009 NAR First Vice President

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