Make It So

Among the lines that developed in later Star Trek episodes, was the line from Captain Jean Luc Picard: “Make it so.”  It is such a direct phrase that carried so much weight.  It is a simple, clear command.

As of this Star Date, I am almost half way through the thirty-six month leadership cycle.  Specifically, this is month seventeen.  It is actually helpful that you have two years of internship, to prepare to be president of the association, because the National Association of REALTORS® is a large, multi-faceted, complicated organization.   There is much to learn and understand.  To be honest, it is overwhelming at times. 

What is clear for me today is the mission of the organization: Serve the member. 

For many organizations the customer is the focus.  What truly distinguishes NAR is that the REALTOR® is not simply a customer, rather he or she is the ‘purpose’ of the organization.  As decisions are made, the leadership team, and our professional staff, led by CEO Dale Stinton, consistently ask one question: “What is in it for the member?” 

The Second Century Initiatives are a bold direct answer to that question: It is all about the member.  From Right Tools Right Now to REALTORS® Property Resource, from Game Changers to House Logic, from the REALTOR® Federal Credit Union to the next series of programs to be introduced, one universal truth is present: it is for the member.  Think about the fact that 800,000 of our members used ‘tools’ from the Right Tools Right Now initiative.  Think about the fact that RPR is going to have 147 million records and analysis for REALTORS® to better serve customers and clients, at NO cost.  Being about the member actually is more than just member focused.  It is about providing the members with resources and tools to make more money.  It is about business.

When Dale Stinton talks about competencies of NAR, he identifies a pyramid of skills: scale, leadership, and brand. NAR is ‘large’ enough to be effective, which is the scale side of the pyramid.  NAR is courageous, industrious, disciplined, creative, forward thinking, outcome driven and bold. This answers the leadership side.  The third side of the triangle is the REALTOR® brand.  It is recognized, understood, and respected.    Our association has mastered these competencies. 

Now it’s our turn to do so in our own businesses. 

What NAR does is make it possible for us to reach to the stars.  It makes it possible for us to dream, think and realize BIG things.  It makes it possible for us to say “Make it so,” and know that we will. – Posted by Ron Phipps, 2010 NAR President-Elect

When doctors take the Hippocratic Oath, they pledge to first “do no harm.”  It’s important that we take the same approach to addressing issues in the market.

It’s no secret that the Federal Housing Administration has taken on some additional risk filling the gap left by the private market.  But, that is the role it was designed to fill, and without it, our current recovery in the real estate markets would not be possible.  While it’s important to manage those risks, we must be careful not to go overboard and disenfranchise those that FHA was created to help.

Just yesterday, I told members of the House Financial Services Subcommittee that we believe FHA has made necessary changes to manage current risks.   More importantly, I told them that REALTORS^® do not support legislation that would raise the downpayment or measures that would otherwise increase costs for potential buyers.

I encourage you to read my testimony and share your thoughts on the important role that FHA plays in your market.

Of course, simply NOT doing harm is just the first step.  Like good doctors, we must also be able to diagnose problems and fix them – before they become major ailments.

That’s exactly what we are trying to do on the issues of affordable property insurance.  The fact is, there are many areas of our country who do not have access to affordable property insurance.  While this may not seem like a national problem, it most certainly is.  Every area of our nation is prone to natural disasters, and when catastrophe occurs, we all foot the bill for the clean-up.   

On Wednesday, I was part of a panel that shared views with Congress on how we can implement a more proactive approach to property insurance for natural disasters.  Again, I urge you to read my testimony and help us educate REALTORS^® in your state about the risks and costs that we all face on this issue.

There is a good reason why our reputation as REALTORS^® is right up there with America’s doctors – we care as much about the people we serve as they do.  That’s a credit to you – our members.  I am grateful to President Vicki Cox Golder for assigning me to this important task, and am so proud to represent her, and you, on the Hill or wherever I go. – Charles McMillan, 2010 Immediate Past President

This conference also demonstrates that we can and do see ourselves as one family in the real estate business.  The strength of our organizations is not in achieving our individual goals, but rather our strength is that we seek to help the entire real estate family thrive.   So when one of us makes headway in helping more people gain the American dream of homeownership, we all succeed. And so do our clients. 

At NAR, these organizations have loyal brothers and sisters in the real estate family.  One of our six objectives in our strategic plan for this year is promoting and supporting housing opportunities.   NAR will pursue this goal with a vibrant tenacity because we know homeownership gives homeowners a greater chance at affluence, better employment and educational opportunities, and provides for safer neighborhoods and stronger communities.

NAR congratulates NAREB, NAHREP, and AREAA for working together at this conference for sustainable homeownership, which in turn transforms communities and creates enormous economic opportunities for everyone.

Working together, our real estate family can overcome the great challenges facing our industry.  I look forward to collaborating more in the future.  Success will surely follow us.  –  Vince Malta, 2010 NAR Vice President and Liaison to Government Affairs

It was a quick trip with only three days on the ground, but the time was well spent as I was able to compare our market with Central America’s.  One comes away with a deeper understanding of the United States real estate market and how efficient and pro-consumer it truly is.

First, many of FeCePAC markets rely heavily upon United State citizens purchasing.  As the North American market cooled so did those in Central America and the Caribbean.  At a time when we worry about global warming, it has become an economic winter for most of these markets.  It is amazing how intertwined we are.  It is also amazing how all of us are dealing with real financial challenges, some inconvenient, some serious, and others critical. 

Second, we enjoy a market that is organized in the United States.  Tools such as MLS that offer cooperation and compensation, all market driven, are not as available.  The simple convenience of a single source to find property is not always available.  One of the challenges for professionals in these areas is to understand what their customers want and expect.  We were there in part to share our experience. 

Third, real estate sales people are fixers and doers regardless of nationality or language.

We share a common hunger to work, to do business, and to make money.  The appetite for better tools, approaches, techniques and business opportunities is pre-programmed into our professional personas.  In my presentation and the others, one thing was highly valued: information to generate more business.  It is appropriate to call this outreach global business versus ‘international’ because no matter where transactions are occurring, whether in the United States or in Nicaragua, it is about business, and global business at that. 

Fourth, the people were so gracious and appreciative. Lucia Solorzano Sacasa, a REALTOR^® from Miami and Nicaragua, was a fabulous host for us at the event.  Carlos Fuentes, a REALTOR^® from Tampa, who also serves as Regional Coordinator to North America, Central America & the Caribbean for NAR, provided us with deep knowledge of the region that helped make the trip such a success.

As my children speak Spanish and studied in Latin America, they joined my wife and me as our translators.  Language influences how one sees the world.  Our hosts were impressed that my wife and children could see their world through the lens of Spanish.  Our NAR staff Jeff Hornberger and Jennifer Wiziarde, who are also fluent in Spanish, made invaluable contributions that went beyond the call of duty.  In global business, translators are readily available, but speaking your hosts’ language has huge embracing impact.  It is one of the reasons that the REALTORS^® Association of Miami and the Beaches are making such a strong strategic partnership.

There is such great diversity around the globe. It is vey fascinating.  What remains true is that we are all people.  We have similar needs and desires.  We have more in common than we do in difference. It is great to be a REALTOR^®.  It is great to be a citizen of the world. – Ron Phipps, 2010 NAR President-Elect

Private transfer fees are a bit complicated, but they’re important to know about.  They are covenants that claim to run with the title to a property.  Every time the property changes hands, a fee is paid to the original property owner or developer who created the covenant.  The fees have been as much as one percent of the purchase price of the property.  In some cases the fees are being paid for up to 99 years!

We’ve recently been made aware that companies dealing with private transfer fees are marketing their products to developers across the country.  They are bundling these fees so they can be securitized and resold on the open market.  If they succeed in developing a “stream” of these fees to make a credible securitization market, then the use of private transfer fees will increase exponentially because the profit incentive will increase. 

Bottom line is this…affordable housing is sacrificed to give financial benefit to someone completely disassociated with the real estate transaction.

In 2008, the NAR Board of Directors voted on a policy against the use of private transfer fees.  But ultimately, we know this is a state matter.  That’s why NAR is offering services to state associations to investigate this issue in their states and evaluate whether they would like to pursue legislation against the fees.

NAR has engaged the services of Robinson & Cole, the firm that serves as our consultant in NAR’s Land Use Initiative.  Robinson & Cole will help state associations write legislation concerning the use of private transfer fees, and NAR will pick up the bill.

To receive this assistance, or to get more information about it, please contact Gerry Allen at NAR at (202)393-1109 or gallen@realtors.org.

In many cases, private transfer fees have created one more hoop for consumers to jump through in order to close a deal.  In the name of making the real estate business run as smoothly and above-board as possible, I hope you’ll ask your state association leaders to consider NAR’s offer of help in this matter.  – Brooke Hunt, 2010 NAR Vice President and Liaison to Government Affairs

 To get our launch going with a bang, we’re hosting a webinar to roll it out for the media.  Why all the hub hub?  Well, we’re excited.

 HouseLogic is a free, comprehensive source of information to help homeowners make smart decisions and take responsible actions to protect, maintain and enhance the value of their homes.

 The REALTOR^® Content Resource is also a free, ready to use companion tool to HouseLogic.  It allows members to leverage HouseLogic content for their own marketing efforts.  That means you can use its content on your Web sites and newsletters.  It will help maintain and grow your client relationships.  Just go to HouseLogic.com/Members and login to the REALTOR^® Content Resource to use it.

 The whole site is rich in content on home improvement, maintenance, community engagement, taxes, incentives, finances, and insurance.  It’s a virtual one-stop resource for homeowners, helping them to “own smarter.”

 It’s exciting to launch a new product that benefits members so much.  I know our friends on the East Coast and the South have been pounded with snow recently.  I know they can’t wait for spring.  And although I live in California, I can’t wait for it, either.  Spring always brings with it the excitement of new opportunities.  (And it means getting back to one of my favorite pastimes—baseball!)

With HouseLogic, we face the excitement of a new season in business.  Check the site out today and tell your clients about it.  It’s never too soon to get hooked.  –  Vince Malta, 2010 NAR Vice President and Liaison to Government

 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

I know that sometimes change doesn’t go over well.  But in this instance, the changes are much better than expected and will keep FHA strong for the future of our business.

You can read about all of the modifications here, but let me highlight a few:

–NAR urged HUD to keep the down payment minimum to 3.5 percent.  We’re thrilled they listened to us!

–Borrowers with FICO scores lower than 580 will now have to make a ten percent down payment. But most lenders are adhering to credit scores around 620 anyway.

–The upfront mortgage insurance premium will increase to 2.25 percent from 1.75 percent.  In addition, FHA will still permit financing of these premiums.  This is another Realtor® victory!

–Borrowers will only be able to accept seller concessions up to three percent, instead of the previous six percent.

As far as seller concessions go, my experience is that the average concession is rarely higher than 4.5 to 5 percent without decreasing the required 3.5% downpayment for the borrower based upon normal closing costs.  But this change will be open for public comment, and NAR will be urging for an increase.

Yes, these changes will prevent some would-be buyers from owning a home right now. But they will keep borrowers safer in the long-run by weeding out those who may not be ready to purchase a home yet.  In addition, FHA was facing strong pressure from the Administration and Congress to make even stricter modifications.  NAR policy leaders met with FHA in December and helped influence less dramatic changes.

FHA has been a mortgage savior for the housing market in recent years.  Homebuyers have been seeking help from the program in record numbers.  I hope you’ll read about the changes and educate your clients on them.

I also hope you’ll let your clients know they have exactly 83 days from today to put a contract on a house and be eligible for the homebuyer tax credit.

By supporting programs like FHA and the homebuyer tax credit in the last year, Realtors® are jumpstarting the housing market and the nation’s economy in unprecedented ways.

Stay positive and keep up your stamina.  I expect we will be sprinting to the finish come April.  –  Brooke Hunt, 2010 NAR Vice President and Liaison to Committees

It is estimated that the commercial broker, in today’s market, is suffering from as much as a 90 percent loss in business over 2007’s figures.  That number is staggering to me and also confirmable by many of our fellow members.

Chief lobbyist Jerry Giovaniello and his staff are great and spend countless hours working on commercial legislative and regulatory issues for our members.  Carried interest, the TALF extension, protection of our capital gains tax levels, leasehold improvement tax law, and a myriad of other matters have always been on their radar screen.  We’ve been well protected through the Government Affairs division and their efforts.   Many thanks go to them for their continuing efforts!

There are two projects the Government Affairs staff are working on that I want to bring to your attention.  First, they have been working with Congressmen Paul Kanjorski (D-PA) and Kenneth Calvert (R-CA) to gain 79 signatures from members of Congress on a letter that will go this week to Treasury Secretary Tim Geithner and Fed Chairman Ben Bernanke. 

This bi-partisan endeavor implores these agencies to place more effort into assuring that there won’t be a collapse of the commercial real estate industry – not just for those that toil in brokerage of commercial real estate but for our clients including buyers, sellers and everyone with mortgages coming due in the next 18 to 24 months.  It is estimated that the mortgages could go into default equal $1.3 trillion dollars!!  Another staggering number.

Secondly, as I mentioned in my podcast in December, we’re still planning a Call for Action for when the Senate takes up the tax extenders bill that might make changes to how carried interested is taxed.  This will be an important CFA for commercial practitioners to respond to.  Remember, whether you are a pure commercial practitioner,  a residential REALTOR® or a “resi-mercial” REALTOR® as many of our members are…please take a moment to respond to NAR’s CFA.  Commercial real estate’s life may just depend upon it.

Like most, I’m looking forward to spring.  By my calculation we have 52 days until spring “officially” arrives.  Green grass, baseball, boating, golf and warmer days to sell that property you listed isn’t so far away.  

Keep working hard – it always pays off.   My best to all of you.   – Jim Helsel, 2010 NAR Treasurer

If you take a look at NAR’s the last call for action (on the tax credit), the impact of the BIP is pretty compelling.  Of all the members who responded, nearly one quarter came through the Broker Involvement Program.  And, several of those brokers have response rates over 50 percent. 

Now, we realize that agents won’t respond on every issue.  But, in most cases, we have found that members are more likely to respond when they are asked directly by the broker.  That’s why getting more brokers enrolled in the program so vitally important.

To help achieve our goal in 2010, we have announced friendly contest called the REALTOR Party BIG Competition.  Here’s how it works…

We are setting up BIG teams of REALTORS in every state.  Teams will be asked to identify brokers who can participate in the program and will submit that information online at RealtorActionCenter.com.  NAR will follow-up with state teams to schedule one of our BIP speakers to meet with that state’s brokers.

Each month, the BIG team will receive a report summarizing where they stand relative to their goal, which related to the overall number of agents and brokers in that state.  At the Annual Conference, I will announce the winners.

I’m really excited about this contest, and I ask that you help your state teams meet their goals.  If you are an agent, talk to your broker about participating in the program.  And, if you are a broker, please join.  For more information, visit RealtorActionCenter.com.

This contest is just one of many ideas that came to us from members – just like you.  I want to give a special “thank you” to Bill Arnold, a fellow REALTOR in Arizona, who brought this idea to me.  If you have an idea that can make NAR more effective, please let us know.  We want to hear from you!   Vicki Cox Golder, 2010 NAR President