MAR Article Page 37 - The Positive Side of Vacancies
1. VOLUME XLVIII NUMBER 6 / NOVEMBER 2014
mdrealtor.org / marylandhomeownership.com
THE MARYLAND ASSOCIATION OF REALTORS® The Voice For Real Estate® In Maryland
7 2014AnnualConference&Awards
12 RevisedFormsfor2014
22 2014 Life Achievement Award
MAR Member
Benefits 17
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3. President’s Perspective J A N I C E R . K I R K N E R
Don’t Sit on the Sidelines—
Get Involved!
T
here is never a more important
time to be involved in the
issues that shape our ability
to practice real estate than in
challenging times. And 2015
promises to be one of the most
challenging.
Some of our most important
issues will come to the front next
year. From the future of mortgage
financing and preserving critical
real estate related deductions, on
the federal level, to introducing
ourselves and our issues to a General
Assembly with many new faces, it
will certainly be an interesting year.
That’s why I’m urging our members:
“Don’t Sit on the Sidelines—Get
Involved!”No one can represent
our interests better than we can—
and I mean each and every one
of us. That’s why we have always
been proud to be“member driven,”
at every level of the REALTOR®
organization. I hope that if you are
already involved in our Association
either locally or at the state or
nationally, you will reach
out to someone who is
not and recruit a new
potential leader.
And if you’ve never
been involved, you
couldn’t pick a better time to start.
This is your opportunity to have a
say in the decisions that affect our
profession and the public we serve.
Start small: respond to a Call for
Action. Join a committee at your
local board or association. Go to
mdrealtor.org and to realtor.org to
keep abreast of the latest issues. An
informed REALTOR® is powerful; an
involved REALTOR® can affect our
professional environment for good.
REALTOR® Member Benefits
I’m often asked what your dues
dollars provide. This month we
highlight many of the benefits of
your membership with MAR. Check
out page 17, which includes a
wide array of affinity partners from
national companies to help you
work smarter, not harder.
But here’s a simple answer:
Industry Awards and Annual
Conference
Please take the time to read
about Ilene Kessler, our 2014 Life
Achievement Award recipient.
Ilene’s extraordinary dedication to
our industry for more than 25 years
is an inspiration and a testimonial
to the power of commitment. And
take note of all our industry award
individual and local association/
board recipients, who are featured in
the photo spread starting on page
10, which also shows highlights of
our Annual Conference.
Don’t forget to save the dates for our
2015 Annual Conference and EXPO,
October 4–7. The 2015 Conference
& EXPO will be later in the year than
when we’ve historically held it.
I am always available to answer
your questions or hear your
concerns. Please contact me at
president@mdrealtor.org.
Janice R. Kirkner
President, Maryland Association
of REALTORS®
www.mdrealtor.org MARYLAND REALTOR®
NOVEMBER 2014 1
Your MAR dues
bring you…$1,200
Lobbying/
Advocacy Average
Annual Savings
$250
Legal Hotline Based
on 4 calls annually
@ $125 hour
$1,500
Up-to-Date Forms
Based on 5 hours
@$300 hour
$600
Webinars
8 a year @
$75 each
• Insurance Discounts
• Discounted Airport Parking
• Landlord ScreeningTools Discount
• UPS Savings
• Exclusive REALTOR® License Plates
• Office Products Discount
• Prescription Drug Card
• Discounted Local Energy Costs
• Newsletter Magazines
• Mediation Services
• Professional Education
Plus:
4. T A B L E O F C O N T E N T S
STATEWIDE FORMS REVIEW
FEATURES
2014 ANNUAL CONFERENCE
AWARDS 7
2014 REALTOR® OF THE
YEAR NOMINEES 9
THANK YOU TO
CONFERENCE SPONSORS 10
STATEWIDE FORMS REVIEW 12
MEMBER BENEFITS 17
2014 LIFE ACHIEVEMENT AWARD 22
VALUE AND BENEFITS OF OUR
CREDIT UNION 27
DEPARTMENTS
PRESIDENT’S PERSPECTIVE 1
MRIS 21
COMMISSION NEWS 24
REGULATION NEWS 26
FROM THE HOTLINE 29
RESIDENTIAL SALES 32
COMMERCIAL CONNECTION 35
MARYLAND REAL ESTATE X ?
2014 LIFE
ACHIEVEMENT
AWARD
MEMBER BENEFITS
17 222014 ANNUAL
CONFERENCE
AWARDS
7
12
2 MARYLAND REALTOR®
NOVEMBER 2014 www.mdrealtor.org
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www.md-de.oilheatpros.com
Oilheat.Oilheat. Know more,
sell more.
PRO$ Corner
How to overcome a buyer’s
uncertainty about oilheat.
Buyers often have misconceptions
about today’s oilheat. In fact, some
buyers aren’t even aware that oil is
used for home heating! When faced
with uneducated buyers, the best thing
you can do is help them to understand
the facts about homes heated with oil.
For instance, let them know that homes
heated with oil are typically warmer
because the flame in an oilheat system
burns hotter. Or that today’s oilheat
systems are so clean and efficient
they aren’t regulated under the Federal
Clean Air Act. You can also give them
a copy of the “Homeowner’s Guide to
Heating with Oil,” which will help them
answer many of the most common
questions that home buyers have.
To order your FREE copies, simply visit
md-de.oilheatpros.com or join the PRO$
Facebook page to order. The more your
clients know about heating with oil,
the better they’ll feel about it!
PRO$ is back —
and we’re better than ever!
If you’ve been looking for
an edge on listing and
selling more oil-heated
homes, look no further. The
Maryland Partnership for
Realty and Oilheat Success
(PRO$) is back, and we’ve
got more tools to help you
than ever before!
PRO$ Presentations –
schedule a 15-minute PRO$
Presentation with one of
our local experts. They’ll
get you up to speed on what to do and what to know for your next oilheat listing!
Sales Materials – order our FREE materials that you can give directly to your
clients, to help them understand the facts about oil-heated homes.
Online Tips and Info – visit md-de.oilheatpros.com for the latest tips and
insights into closing more sales of oil-heated homes.
Regular Updates – start following PRO$ on Facebook today for regular updates
and information you can use to market your oilheat listings.
To get started, visit md-de.oilheatpros.com or email Susan Janett directly at
sjanett@oilheatpros.com. You’ll be ready to boost your business in no time.
Turn to an oil dealer for expert advice
Local heating oil dealers are energy experts and
they can help you – and your client – stay on track
with the listing or sale of a property that is heated
with oil. Whether you’re representing the buyer
or the seller, a local heating oil dealer can be the
difference between a closed sale or a lost sale.
They can:
➜ Inspect a home’s heating system before you take
the home to market
➜ Provide advice, insight and recommendations about underground tank questions
➜ Document the amount of oil in the tank so the seller gets credit for it at the closing
For a list of energy experts in your area, visit the PRO$ website at
md-de.oilheatpros.com.
Paid for by the
National Oilheat Research Alliance.
9. XX
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XMaryland Association of REALTORS® Annual Conference Expo
Over 1,000 MAR Members and attendees gathered in Ocean City in mid-September for the Annual
Conference and EXPO. The Annual Conference featured extensive, cutting-edge continuing
education, numerous networking opportunities and a full array of products and services expressly
geared for the members in a packed EXPO Hall.
MARYLAND ASSOCIATION OF REALTORS®
AWARDS
2014 ANNUAL
www.mdrealtor.org MARYLAND REALTOR®
NOVEMBER 2014 7
COMMUNITY ACTION AND REALTOR®
EXCELLENCE (CARE) AWARDS
This award recognizes outstanding achievements in Community
Service by Local Association/Board Members.
The six local nominees are: Bay Area, Greater Capital Area,
Cecil County, Frederick County, Mid-Shore Board, and
Southern Maryland.
Mid-Shore Board of REALTOR® members Russ Boyce (left), Gwen
Eskridge (middle), and Shelby Roney (right), accept the CARE
Award for Small Board/Associations for their work with the
American Cancer Society, Relay for Life and the Salvation
Army among others in their community. The Board
will receive $8,000 to be given to a charity of
their choice.
Southern Maryland Association
president, Bud Humbert (right)
accepts the CARE Award for Large
Association/Board from CARE
Committee Chair, Linda Simpson
(middle) and 2014 MAR President,
Russ Boyce (left). The $8,000 award
will be donated to the charities of their
choosing.
Southern Maryland
Association
Mid-Shore Board
10. 8 MARYLAND REALTOR®
NOVEMBER 2014 www.mdrealtor.org
XX
XXX
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XCOMMUNITY SERVICE AWARD
Wesley Cox was presented with the 2014 Community Service award by 2013 recipient, Linda McKinnon.
Alicyn DelZoppo
Demetria Scott
Skipper Marquess
Wesley Cox
8 MARYLAND REALTOR®
NOVEMBER 2014 www.mdrealtor.org
OMEGA TAU RHO
2013 President, Carlton Boujai, 2013 REALTOR® of the Year, Janice Kirkner and Joan Ostenso, Executive Officer for
the Prince George’s County Association all received the medal from 2013 NAR Treasurer, Bill Armstrong.
Carlton Boujai Janice Kirkner Joan Ostenso
SHINING STAR AWARDS
Demetria Scott accepts the MAR Shining Star Award from President,
Russ Boyce. The award was presented to Demetria for her work
as a new volunteer with the Equal Opportunity and Housing
Affordability Committee.
Alicyn DelZoppo was presented this award for her work as
an RPAC Trustee.
President Russ Boyce gave the President’s Award to
Skipper Marquess for his outstanding efforts on the
Annual Conference Committee this year.
2014 REALTOR OF THE YEAR
2014 REALTOR Of the Year Recipient, Cathy Werner receives the award from
REALTOR of the Year Committee Chair 2011 recipient, Anita Davis.
11. XX
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X
www.mdrealtor.org MARYLAND REALTOR®
NOVEMBER 2014 9
DeeDee Miller
Anne Arundel County
Association
Pamela Stone
Carroll County Association
Doug McClive
Garrett County Board
Traci Jordan
Mid-Shore Board
Cathy Werner
Greater Baltimore Board
Carolyn Kappra
Cecil County Board
Simon Nwaigwe Sr.
Harford County Association
John Lesniewski
Prince George’s County
Association
Michelle Abplanalp
Bay Area Association
Brandon Brittingham
Coastal Association
William Logsdon
Historic Highlands
Association
Bud Humbert
Southern MD Association
Michael McGreevy
Greater Capital Area
Association
Bill Armstrong
Frederick County Association
Brian Lipsky
Howard County Association
2014
REALTOR OF THEYEAR
N O M I N E E S
12. XX
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XMARYLAND ASSOCIATION OF REALTORS®
EXPO SPONSORS
2014 ANNUAL
Main Conference Sponsors
MRIS
Pentagon Federal Credit Union
Platinum Sponsor
Century 21 Real Estate, Inc.
2014 MAR President, Russ
Boyce (right) thanked
the Annual Conference
EXPO Main Sponsors
with framed logos. Left:
Terri Bracciale, Regional
Vice President, Prudential
PenFed Realty accepts on
behalf of Pentagon Federal
Credit Union. Middle:
Brian Donellan, Senior Vice
President and Chief Financial
Officer, MRIS
10 MARYLAND REALTOR®
NOVEMBER 2014 www.mdrealtor.org
13. XX
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X
www.mdrealtor.org MARYLAND REALTOR®
NOVEMBER 2014 11
OVERALL CONFERENCE
SPONSORS
Bay Area Association of REALTORS®
Cecil County Board of REALTORS®
Embrace Home Loans
Garrett County Board of REALTORS®
Greater Capital Area Association of
REALTORS®
Harford County Association of
REALTORS®
Janice Kirkner, 2014 MAR
President-elect
Maryland Dept. of Housing
Community Development (DHCD)
Maryland Hispanic Real Estate
Industry Association (MHREIA)
Pen-Mar Association of REALTORS®
RE/MAX Central Atlantic
Sage Title Group
REALTOR BUSINESS CENTER
Coldwell Banker Residential
Brokerage
NAR DIRECTORS
BREAKFAST
Anne Arundel County Association of
REALTORS®
Frederick County Association of
REALTORS®
REFRESHMENT BREAKS
Coastal Association of REALTORS®
WEDNESDAY’S BEVERAGE
BREAK
Howard County Association of
REALTORS®
INSTALLATION BANQUET
Long Foster Real Estate
Carroll County Association of
REALTORS®
Lakeside Title Company
Denise Merson, Sage Title Group,
Westminster
Al Ingraham, 2006 MAR President
Billie Landbeck, 1978 MAR President
Carlton Boujai, 2013 MAR President
Carole Maclure, 2013 MAR Treasurer,
2008 MAR President
Dale Ross, 1989 MAR President
Harold Huggins, 1999 MAR President
Ilene Kessler, 2007 MAR President
Jack Steffey, 1956 MAR President
Jim Matthews, 1998 MAR President
Michael Yerman, 1991 MAR
President
GOLF TOURNAMENT
Direct Mortgage Loans—
MAIN SPONSOR
Sharon McKenna, One in Hole in
Memory of Christopher McKenna
TEES
Caliber Home Loans
CarrollCountyAssociationofREALTORS®
Cathy Werner, REALTOR®,
2011 MAR President
Martha Lessner, REALTOR®
Prudential PenFed Realty
14. 12 MARYLAND REALTOR®
NOVEMBER 2014 www.mdrealtor.org
MAR Contracts
MAR Residential Contract of Sale:
■ Paragraph 9—Removed conventional financing terms.
There is a new separate Conventional Financing
Addendum.
■ Paragraph 16—Added notice regarding changes to
Maryland lead-based paint laws.
■ Paragraph 17—Removed Lead-Based Paint Hazard
Inspection Disclosure of Information from list (it’s not
an EPA/HUD form).
■ Paragraph 17—Removed Lead-Based Paint Inspection
Addendum from list. The MAR Property Inspections
Addendum was modified to include a lead-based
paint inspection provision.
Revised Forms for
2014 Summary of Changes and Practice Tips
ALL CHANGES ARE REFLECTED IN THE FORMS ON OCTOBER 1, 2014.
■ Paragraph 17—Added Cash Appraisal Contingency
Addendum to list.
■ Paragraph 21—Removed language requiring that
Seller convey property with specified systems in
working condition.
■ Paragraph 39—Added Flood Disclosure notice.
Practice Tips:
A. Paragraph 9—Buyer must check the appropriate
box to indicate the type of financing. Assuming
the transaction is contingent upon financing, the
financing terms are material and must be specified
in the appropriate addendum. Examples of material
terms in a contract include: (i) the identity of the
parties; (ii) the subject matter; (iii) the financing terms;
(iv) the time of payment delivery or performance; (v)
and the nature of the work to be performed.
15. www.mdrealtor.org MARYLAND REALTOR®
NOVEMBER 2014 13
B. Paragraph 16—Effective January 1, 2015, all
residential rental properties constructed prior to 1978
must be registered with the Maryland Department of
the Environment (“MDE”). For additional information
regarding changes to the rules, visit: http://www.
mde.state.md.us/programs/Land/Documents/
LeadFactSheets/LeadfsStandardOfCare.pdf.
C. Paragraph 17—Buyer may elect to make the contract
contingent upon a lead-based paint inspection by
initialing the lead-based paint inspection provision
in the revised MAR Property Inspections Addendum
which eliminates the need to include a separate lead-
based paint inspection contingency addendum.
D. Paragraph 21—To determine property condition,
Buyer should have the property inspected. If the
contract is contingent upon a home inspection, and
Seller elects not to make requested repairs, Buyer may
terminate the contract. If the property is being sold“as
is,”Buyer may elect to initial Paragraph B of the MAR As
Is Addendum which allows Buyer to obtain whatever
inspections Buyer deems necessary and Buyer may
cancel the contract if Buyer is dissatisfied with the
results of any inspections.
E. Paragraph 39—Buyer is advised to consult with a
flood insurance agent to inquire about increased
flood insurance premiums. Buyer may contact MDE
to determine whether the property is affected by
updated flood rate maps.
MAR Unimproved Land Contract:
■ Paragraph 9—Removed conventional financing terms.
There is a new separate Conventional Financing
Addendum.
■ Paragraph 17—Added Cash Appraisal Contingency to
list.
■ Paragraph 39—Added Flood Disclosure notice.
MAR Contract Addenda
Property Inspections Addendum:
■ Added letter G to indicate new inspection.
■ Removed Paragraph 2 in light of change to Paragraph
21 of the MAR Residential Contract of Sale.
■ Removed note regarding separate lead-based paint
inspection addendum on page 2.
■ Added lead-based paint inspection provision to list of
inspections Buyer may obtain.
Practice Tip: Time is of the essence. If Buyer or Seller
fails to perform within the time frames specified in
the Addendum, the Addendum specifies certain
consequences.
16. 14 MARYLAND REALTOR®
NOVEMBER 2014 www.mdrealtor.org
Property Inspections Notice:
■ Changed Title of Notice.
■ Removed Section I which referred to Paragraph 21.
■ Removed language from Section II referencing
Paragraph 21.
Practice Tip: The Property Inspections Notice (“Notice”)
is not intended to become a renegotiation of the terms of
the MAR Property Inspections Addendum. The Notice is
intended to facilitate the inspection process as specified
in the MAR Property Inspections Addendum. Also, certain
repairs may need to be done by a person licensed by the
appropriate authority.
Notice to Buyer and Seller of Buyer’s Rights
and Seller’s Obligations under Maryland’s
Single Family Residential Property Condition
Disclosure:
■ Added language regarding permits. If Seller discloses,
Seller must state whether Seller obtained the proper
permits for any improvements made to the property.
New Form—Conventional Financing
Addendum
Practice Tip: See Practice Tip regarding Paragraph 9
(page 12) of the MAR Residential Contract of Sale. The
financing terms must be specified in the Addendum.
FHA Addendum:
■ Added private mortgage insurance to Paragraph 2.
■ Modified language in Paragraph 7 so that the
language of all of the financing addenda mirror one
another.
VA Addendum:
■ Added private mortgage insurance to Paragraph 2.
■ Modified language in Paragraph 6 so that the
language of all of the financing addenda mirror one
another.
Seller Contribution Addendum—Capitalized
and bolded the word“OR”in the 4th line.
Practice Tip: Buyer/Seller must insert a dollar amount OR
a percentage of the purchase price.
Resale of Condominium Acknowledgement—
Technical correction made.
Maryland Lead Poisoning Prevention Program
Disclosure – Inserted language regarding new
lead-based paint requirements.
Practice Tips: For additional information regarding
changes to the rules, visit: http://www.mde.state.
md.us/programs/Land/Documents/LeadFactSheets/
LeadfsStandardOfCare.pdf.
Maryland Homeowners Association Act Notice
to Buyer (applies to initial sale containing more
than 12 lots):
■ The Homeowners Association Act requires that the
Notice be underlined.
Maryland Homeowners Association Act Notice
to Buyer (applies to a resale or an initial sale
containing 12 or fewer lots):
■ The Homeowners Association Act requires that the
Notice be underlined.
■ Cash Appraisal Contingency Addendum—Reworded
title.
MAR Brokerage Agreements
Exclusive Right to Sell Residential Brokerage
Agreement:
■ Paragraph 7—Added provision regarding off MLS
listings.
■ Paragraph 15—Deleted line regarding EPA and HUD
brochure (brochure does not exist).
■ Paragraph 23—Added flood disclosure.
17. www.mdrealtor.org MARYLAND REALTOR®
NOVEMBER 2014 15
Practice Tip: Paragraph 7—The objective of this
provision is to ensure that Seller understands the
potential consequence of not marketing the property
through the MLS at all. Licensees are obligated to act in
the client’s best interest.
Exclusive Right to Sell Unimproved Land
Brokerage Agreement:
■ Paragraph 7—Added provision regarding off MLS
listings.
■ Paragraph 24—Added flood disclosure.
Exclusive Right to Lease Residential Brokerage
Agreement:
■ Paragraph 7—Added provision regarding off MLS
listings.
■ Paragraph 15—Deleted line regarding EPA and HUD
brochure (brochure does not exists).
■ Paragraph 15—Added notice regarding changes to
Maryland lead-based paint laws.
■ Paragraph 21—Removed pit bull provision.
Practice Tip: Paragraph 21—A new law reversed the MD
Court of Appeals decision on pit bulls so that landlords
do not have“strict liability”for dog bites caused by
their tenants. Instead, landlords will have the same
legal liability (negligence) that they had before the
Court of Appeals decision. Owners of dogs, however,
are presumed liable unless they can show the victim
triggered the dog’s attack. Unlike the court opinion
which targeted pit bulls, this legislation applies to all
breeds.
Exclusive Buyer/Tenant Representation
Agreement:
■ Paragraph 11—Added flood disclosure provision.
Dwelling Lease Template
General Residential Dwelling Lease Template:
■ Paragraph 5—Deleted reference to money order
receipt.
■ Paragraph 14A—Clarified that owner may revoke
permission to allow pets for reasonable cause.
■ Paragraph 14A—Removed pit bull language because
of change in law.
■ Paragraph 33B—Added notice regarding changes to
Maryland lead-based paint laws and included link to
additional information about changes.
■ Paragraph 36—Added notice regarding increased
flood insurance premiums.
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NOVEMBER 2014 17
Maryland REALTOR® Rx Program
This program is being provided to you and your family
friends to help lower your prescription drug
costs. Simply create and print your FREE
Prescription Drug Card below and receive
savings of up to 75% (discounts average
roughly 30%) at more than 54,000 national
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insurance plan.
Annual Conference Expo
Registration Opens Spring 2015
Stay up-to-date with your license requirements and
have fun! We offer a fast online registration that features
an instant confirmation to your email address. Visit the
EXPO tradeshow—one of the largest anywhere! The
Conference, one of our most popular member services,
will be held on October 4–7, 2015.
MAR Legal Hotline–1-800-888-1272
Free, authoritative legal advice is available by calling
the MAR Legal Hotline or by submitting a WebQuestion
Form. Questions on all aspects of real estate law are
answered. A written response is sent to all callers and
their brokers.
MAR MEMBER BENEFITS
20. 18 MARYLAND REALTOR®
NOVEMBER 2014 www.mdrealtor.org
REALTOR® License Plates
Show everyone that you’re a REALTOR®.
This special plate will set you apart from
everyone else as a Maryland REALTOR®. For
information or an application, contact Cindy
Sellers at 800-638-6425 or cindy.sellers@mdrealtor.
org. (Vanity plates are not available with this offer.)
Together, we help each other do more.
Nationwide® is proud to partner with the
Maryland Association of REALTORS® (MAR).
You wouldn’t be involved with MAR if you weren’t
passionate about your profession, but that’s not the
only reason you’re proud of being a MAR member. MAR
members believe in the importance of philanthropy and
in playing an active role in your community. Nationwide
shares these values, too, and that’s why our partnership
works.
To learn more about what our partnership can do for you,
Call 1-866-238-1426 or visit nationwide.com/MAR.
Fast Park Discount Parking at BWI
Join the FREE Relax for Rewards Program.
Visit http://www.thefastpark.com/marketing/
baltimore/sh26corp.html to complete the application.
Once enrolled using your company code (0326207),
MD REALTOR and email address, a Fast Park card will be
issued. Then simply park with us and begin earning points
towards FREE parking. (8 pts. one free day) (40 pts. one
free week) You will automatically be issued an Airport Fast
Park card. Note: If you currently have an Airport Fast Park
card, you do not have to re-enroll.
You will receive:
• A FREE newspaper in the AM
• FREE water bottle on your return
• Express checkout lanes make payment easier
and faster.
• Easy computer access to receipts when needed.
• Please include a note stating Fast Park is your preferred
airport parking vendor
• We now have FASTCHARGE, electric car stations.
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pride ourselves on having the best service oriented staff,
the newest vans and absolutely the most convenient way
to park your car safely to get to the airport.
Benefits by Choice
Benefits By Choice, Inc. is pleased to
offer Maryland Realtors Association
Members a new way to shop for
the insurance benefits they need. With our service, you
will get comparison quotes from multiple insurance
providers. Feel free to shop and find the most affordable
Health, Dental, Vision and Life Insurance coverages
available, our goal is to enable you to make an informed
decision when choosing between several top carriers.
If you wish, MAR Members can reach our BBC
Representative, Stuart Jackson directly by calling
888-424-4842 ext. 101. All after hour calls will be
returned the next business day. Just go to: http://
benefitsbychoicemarketplaceexchange.com/.
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Energy Plus
Enroll Today To Receive Your Electricity And Natural
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21. www.mdrealtor.org MARYLAND REALTOR®
NOVEMBER 2014 19
Office Depot
Office Depot provides our members access to new and more
products and services. With the partnership, MAR members will
quality for an instant savings on office supplies, copy and printing
services, and promotional products. Additional promotions will be
run throughout the year to provide additional savings. For Assistance
or questions Contact Jill A. Johnson at jill.johnson@officedepot.
com or at 443-643-6832. Office Depot Business Solutions Division,
http://business.officedepot.com—contact Jill for online ordering
setup under the account.
Sam’s Club
Join or renew as a Sam’s Club member and receive up
to a $25 gift card. http://mdrealtor.org/Portals/0/docs/
Benefits/Sams%20Club%20PDF.pdf
UPS
Looking for bottom line savings? Maryland Association
of Realtors ® members can now save up to 30%
percent on their express air international shipping
through UPS (NYSE: UPS). In addition, the enhanced
MAR program now offers member’s savings on UPS
ground services! Members wanting to enroll for the
UPS Savings Program can log on to www.savewithups.com/mar or
by calling (800) 325-7000. When calling, simply let the UPS Associate
know you are a member of Maryland Association of Realtors.
Members enrolled in the original UPS program (enrolled prior to
August 2010) must re-enroll to take advantage of this new exclusive
offer, so re-enroll today and start saving now!! Re-enroll by logging
onto www.savewithups.com/mar or by calling (800) 325-7000.
TransUnion SmartMove
TransUnion SmartMove gives MAR’s
independent landlords all the screening
tools they need, with none of the hassle.
Visit http://mar.mysmartmove.com to get
started and create an account in minutes.
Receive credit criminal reports, and a
leasing recommendation. No approval process. No minimums.
22. 20 MARYLAND REALTOR®
NOVEMBER 2014 www.mdrealtor.org
Errors Omissions
Insurance
As a leader in the insurance industry for nearly 60 years
and a long time partner of the Maryland Association of
REALTORS®, Pearl Insurance is proud to share with you
our quality Errors Omissions Insurance, which offers
valuable coverage that’s better and more affordable than
ever before.
Find out how Maryland REALTORS® EO Insurance by
MAR Sponsored Pearl Insurance can benefit you.
Get a Premium Estimate
Not ready for a quote? No problem. Simply take a couple
of minutes to complete our premium estimate form for
Maryland Real Estate EO Insurance Estimate. Our sales
representatives will use this information to get a quote
for you, and will contact you within 24 hours.
Get a Quote Now
Receive a Maryland Real Estate EO Insurance Quote and
choose to bind coverage or renew your policy. As a Pearl
Insurance insured, you›ll gain access to our quality Real
Estate Errors Omissions Insurance as well as:
• Extensive risk management tools and services
• Superior customer service
• Proactive claims handling and assistance by the
experienced XL claims staff
• Expert defense against a claim from your state’s
dedicated panel counsel
Benefits of NAR
Membership
Real Strength. Real Advantages
Participating in a membership of over 900,000 members
gives you Real Strength. Real Advantages. NAR serves
the diverse interests of all our members who specialize
in residential or commercial real estate, including
established and new agents, brokers/owners, association
executives or board presidents.
REALTORS® of all specialties:
• Enjoy greater earning potential
• Have access to valuable education and information
resources
• Gain political power
• Adhere to a strict Code of Ethics
Every year, members receive a Membership Reference
Guide from NAR outlining the member benefits,
educational courses, programs and services available.
This Guide also contains an eye-catching membership
identification card with the member’s unique NRDS
number. Members use this number to take advantage of
special offerings from REALTOR VIP® Alliance Partners.
REALTORS® Insurance
Marketplace
What is Realtors®Insurance
Marketplace?
REALTORS® Insurance Marketplace is an easy to use
comparative shopping site designed to help NAR
members obtain insurance by offering a wide roster
of insurance plans and products. Offered under the
REALTOR Benefits® Program, the Marketplace Health
Insurance Exchange, featuring insurance plans from top-
rated carriers nationwide that meet the mandates of the
Affordable Care Act.
The Marketplace is powered by SASid, a trusted NAR
Partner who specializes in helping NAR members find the
best insurance plans and products for themselves and
their families. SASid ’s team of licensed benefit specialists
offer complementary consultive services, providing
information on all insurance options, including money-
saving options and access to additional benefits.
How does it work?
• It’s easy! Simply insert your geographic and
demographic information in the the Marketplace
quoting engine.
• Based on the information you’ve provided, you will
then be shown the options available to you. You can
quote, shop, and enroll directly online.
If you would like assistance you can call us at any time.
We’re available to you both during the enrollment
process and afterwards as well, if you need help
later on 1-877-267-3752 or
www. REALTORSInsuranceMarketplace.com.
23. www.mdrealtor.org MARYLAND REALTOR®
NOVEMBER 2014 21
Sometimes the things that can make our work easier are right in front of us but because we are so busy, they are never
noticed. Below is a list of a few hidden gems that are available in Matrix that aim to improve your workflow!
Documents—Listing agents who have added important
documents to their listings make it easy for Buyer agents
to download the documents when needed. Example:
Lead Based Paint Disclosure, Property Disclosure,
Special Instructions, or Rental Application. Listings
with Documents will have a highlighted Documents
link on the right side of a Full Listing in Matrix. Click the
“Documents”link to see which documents have been
uploaded. Click the document title to view it or select the
document and choose to print or email.
Listings without documents will not include a link, so
you won’t waste time clicking only to find there are no
documents attached!
Next time you’re using Matrix, please take time to
discover these Hidden Gems for yourself and make
them part of your business! Learn more about these
and other timesavers in the Matrix 201 Class at
MRIS.com/Training.
MRIS Timesaving Gems in Matrix
Matrix Carts—A Cart is a collection of listings. Every
Contact added into Matrix has an available Cart. To place
a listing in a Cart, select the listing, Click the Carts Action
Button and use the dropdown menu to find the Contact,
click Add To. The listing will stay in the Cart until you
remove it.
Contact Category—To categorize your existing contacts,
click the contacts name and use the Edit Contact button.
Above the field“Last Name”notice the Category Field.
Use the drop down menu and choose a Category, click
Save. This makes it possible to filter or Export Contacts by
Category.
Property History—Each listing has a Property History
link on the right side of the screen when viewing a Full
Listing in Matrix. To view the Property History for more
than one listing at a time select the listings, click the
Refine button, find Search Selected for, use the drop
down menu and select Property History. The results will
include all of the property history information for the
chosen listings. Click the Address column heading to sort
by address. Change the Display to Update Summary to
see additional information about the Property Histories.
To get back to your original results, follow the bread
crumb trail (top left).
24. 22 MARYLAND REALTOR®
NOVEMBER 2014 www.mdrealtor.org
by Amy E. Carr
Ilene Kessler has accumulated a long list of accolades and
accomplishments, served terms as president of local and
state REALTOR associations, and helped many families find
the home of their dreams. She discusses her profession
with intelligence, humor and confidence.
She was inducted to RE/MAX Hall of Fame for her business
success, and both the Maryland and National Associations
RPAC halls of fame.
Despite all she has done, Kessler was genuinely surprised to hear
her service would be recognized with the Maryland Association
of REALTORS® Life Achievement Award.
Thirty years ago, Kessler was a public school teacher, at a
crossroads to either start working towards a doctoral degree or
a real estate license. She wanted to be a college professor, but
decided to take a real estate course for fun.
“It was the best decision,”she says.
A problem-solver with a love of mysteries and crossword puzzles,
Kessler was drawn to teaching by the challenge of finding the
right instructional strategy to reach a diverse groups of students.
Real estate offered her a different puzzle: finding the right
property for her clients.
Both professions played to another component of Kessler’s
character: serving others. She learned early and consistently,
from her parents’lifetime of examples, the importance of
community and service. Her mother volunteered with a local
homeless shelter and her father was very active in his Masonic
lodge and both of her parents were active with local politics.
2014
Life Achievement
Award
I l e n e K e s s l e r
Ilene Kessle
25. www.mdrealtor.org MARYLAND REALTOR®
NOVEMBER 2014 23
“Never lose the capacity to care
about people,”Kessler advises.
“Good real estate is creating a win-
win situation for the both buyer
and seller. We have a fiduciary
responsibility to both our buyers
and sellers.”
Even after nearly three decades
in the profession, Kessler is eager
and animated when talking about
her profession. She is quick to
credit her team for maintaining her
motivation. Founded in 1996 with
another former teacher, Kessler’s
team was one of the first. She
describes working on a team as a
nurturing experience, mainly due to
her team members’shared
client-centered philosophy.
“We all ask what we can do for them
[the client] and not us.”
Kessler also credits her family for her
success. She and her husband have
been married 44 years. Both have
busy, successful careers, but worked
hard to balance priorities. This focus
she also learned from her parents:
maintain family first. The couple has
two children and five grandchildren.
When asked what advice she might
give a new REALTOR®, Kessler
reiterates her team’s philosophy.
“It isn’t about you. It’s about your
client.”
She also advises REALTORS® of all
experience levels to be active in
their industry associations.
“If you really want to understand
your business, get involved!
Volunteering with your association
gives you a deeper understanding
and keeps you going with
enthusiasm.”
These are strategies that have
obviously worked for Ilene Kessler.
MAR’s Life Achievement Award is
given to an individual with 25 years of
active, full-time real estate service.The
individual must currently be active in
real estate and have demonstrated
outstanding leadership and
contributions to the profession,
specifically to state and local
associations. Awardees are nominated
by members of the association and
selected by an ad hoc committee of
industry leaders.
❝Good
real estate
is creating
a win-win
situation
for the both
buyer and
seller.❞
26. 24 MARYLAND REALTOR®
NOVEMBER 2014 www.mdrealtor.org
Katherine Connelly
2015 President of ARELLO®
Katherine (Kathie) Connelly loves her job.
She started in real estate twenty-eight years ago as the
assistant to Jim O’Conor, then chair of O’Conor, Piper
and Flynn. Connelly, a paralegal, handled the company’s
licensing and legal issues for seventeen years. When
O’Conor, Piper and Flynn became part of Coldwell
Banker in 2002, Connelly became a founding
partner of a new brokerage. But after two
years of being on call 16 hours a day, with an
aging mother and terminally ill sister, she
sold her interests to gain the flexibility of a
full-time REALTOR®.
Two years later, she became Executive
Director of the Maryland Real Estate
Commission. The majority of her
responsibilities were tasks she learned
at O’Conor, Piper Flynn—licensing,
complaints and aiding consumers—but from
a different perspective.
“It was a perfect fit,”she says,“because I already
knew what needed to be done to help make
things better.”
But to do it, she needed funds.
by Amy E. Carr
Connelly credits the Maryland Association of REALTORS®
(MAR) for its support in making the Maryland Real
Estate Commission (MREC) a self-funded board. The
change meant that MREC’s revenue is now generated
by licensing fees instead of allocations by the legislature
from the general fund.
The changed funding status went into effect
July 1, 2006, just two months after Connelly
started at the Commission, allowing her
to hire staff and update equipment. The
additional funding allowed Connelly and
the Commission staff to eliminate a
longstanding complaint backlog, and
to focus on service enhancements that
benefit both consumers and licensees.
One such initiative is online continuing
education record-keeping, which allows
MREC to discontinue random CE audits.
Instead, the Commission will move to a
fully automated license renewal system that
checks CE compliance before issuing a renewal. CE
providers already upload their class rosters to MREC; full
automation will begin when four full years of CE data
are collected.
I love what I do and I feel like I make a
difference. And with ARELLO®, I believe
I can make a difference too.
27. www.mdrealtor.org MARYLAND REALTOR®
NOVEMBER 2014 25
At the Commission, Connelly answers her own
phone and makes herself available to listen and offer
suggestions. She has a strong sense of responsibility to
Maryland’s consumers, but also has an open door for
licensees.
“If you have a problem, we’re not going to file a
complaint against you if you call to tell us something
went wrong. We’re going to try and help you fix it, so it
doesn’t happen again. Even if we have to do regulatory
action, we work with people to be fair—especially for
those who come forward,”she says.
Connelly promotes education—not just through formal
continuing education requirements, but through
ongoing communication. She particularly notes MAR’s
support of the Commission, its goals and objectives.
As a specific example, Connelly appreciates the space
MAR provides in each magazine for the Commission to
disseminate information. MAR members make up more
than half the Commission’s 48,000 licensees.
Connelly was introduced to ARELLO®, the Association of
Real Estate License Law Officials, the trade association for
real estate commissioners and staff, early in her tenure at
the Commission. Founded in 1930, ARELLO’s® objective
is to promote excellence in real estate regulation. Its
members are regulators from around the world: U.S.,
Canadian territories, and countries from Bermuda to
Nambia.
Connelly immediately saw the organization’s value as a
place she could ask questions and do initial research on
issues the Commission was addressing.
“Has anyone done paperless licensing?”she asked. Five
or six ARELLO® members had. They talked about pros and
cons, potential pitfalls and strategies for implementation.
“It saved me hours, days, years of work,”she says.
Another time, Connelly shared Maryland’s legislation for
industry teams and groups. Maryland was the first state
in the country to have such legislation and others were
considering it.
“When you write a law, you hope you’re writing it the way
it should be written, but as it goes into practice, you see
what you could have done better.”
Just as Connelly had benefited from ARELLO® member
knowledge before, they now benefited from hers.
Going forward, the organization will benefit even further.
In September 2014, Kathie Connelly was inducted as
ARELLO’s® President.
“In 8 ½ years [at the Commission] there hasn’t been a day
when I didn’t want to go to work. I love what I do and I
feel like I make a difference. And with ARELLO®, I believe I
can make a difference too,”Connelly says.
Amy E. Carr is a freelance writer based in Davidsonville, Maryland.
28. 26 MARYLAND REALTOR®
NOVEMBER 2014 www.mdrealtor.org
Regulation News M A R K F E I N R O T H , E S Q U I R E
Commission Proposes New
Offer Presentment Regulation
The seller directed the listing agent to accept one of the
offers and reject the other. The transaction failed to close
and the agent lost the listing, but learned sometime
afterwards that the house was sold to the buyer whose
offer the seller initially rejected in the same telephone
conversation in which the seller directed the agent to
accept the offer that did not close.
The former listing agent filed suit, claiming he was owed
a commission. The seller complained to the Real Estate
Commission that the agent failed to perform his duty to
properly present the offers.
The Commission members concluded after reviewing the
facts of this dispute that the existing regulation should
be clarified to require that entire offer must be presented
to a seller by his or her agent. Given the litigation and
consumer complaint that resulted from this minor lapse
in judgment by the listing agent, it appears that a
clarifying amendment to the regulation could provide
licensees with an added measure of protection and
adopt the existing industry practice which is taught by
most, if not all, real estate schools. Listing agents should
present the entire offer to the seller or sellers and obtain
a written acceptance, rejection or counteroffer.
Please let me know your thoughts so that they can
be incorporated into the MAR written comments
on the proposed regulatory action. I can be
reached at mark.feinroth@mdrealtor.org.
Mark Feinroth, Esquire, MAR Director of Regulatory Affairs.
A
t its July meeting, the Real Estate Commission
gave preliminary approval to a proposal to clarify
the Code of Ethics regulation on presentation
of offers. MAR staff has already informally commented
on the proposal and the Commission has indicated a
willingness to improve the new language.
The Commission’s regulatory“Notice of Proposed
Action”states that public comments will be accepted
through October 31, 2014 and that final action on
the regulation will be considered at the Commission’s
meeting on November 19, 2014. The process of
amending an existing regulation requires the
Commission to publish its proposal in the Maryland
Register and provide for public input. The Notice
of Proposed Action and the proposal appeared on
September 19, 2014. The Real Estate Commission’s
notice is on page 1085 and can be accessed at
http://www.dsd.state.md.us/MDRegister/4119.pdf
The proposed regulation would require that all“formal
offers”must be presented to the seller“in full”either“in
hard copy or electronic format.”As with many actions
taken by the Commission, a particular transaction and
consumer complaint prompted the proposed regulatory
action. Unfortunately, neither the Commission’s
disciplinary action nor the related law suit are available
for public review. During the July 16 Commission
meeting and at earlier meetings, Commissioners spoke
about the facts of the dispute that prompted them to
review the existing regulation on presentation of offers.
From the discussion among Commissioners, we
understand that a listing agent received multiple offers
on behalf of a seller who was traveling out of state. The
agent conveyed details of two offers to the seller in a
telephone call, but the complete written offers were not
faxed, emailed or otherwise given to the seller.
29. www.mdrealtor.org MARYLAND REALTOR®
NOVEMBER 2014 27
Why choose REALTORS® Federal Credit Union?
Being the only financial institution designed specifically
for REALTORS® means more than just lower loan rates and
higher returns on savings. The REALTORS® Federal Credit
Union, a Division of Northwest Federal Credit Union,
strives to create resources that will help REALTORS® build
their business while serving their personal finance needs
as well.
The average national bank rate on non-jumbo deposit
savings accounts is currently 0.06. (FDIC, 2014). At
REALTORS® Federal Credit Union, the average on a
standard savings account is 0.25, over four times higher.
The Credit Union offers commercial real estate loans with
competitive interest rates, 5-, 7-,10- year terms, 25-year
amortization and no prepayment penalties. We are an
SBA 7(a) and 504 lender, allowing us to offer a broad
array of commercial loans at attractive terms and rates.
Whether you are looking to purchase, refinance or just
do some improvements, the Credit Union can help you
secure the funds to invest in your business.
REALTORS® Federal Credit Union, a Division of
Northwest Federal Credit Union, Let us help put
the pieces together for your financial future.
But we are more than just a credit union that provides
financial services; our purpose is to help you build your
business and career as a REALTOR®.
In addition to a product line designed specifically for
REALTOR® needs, our Credit Union offers value added
benefits that far surpass industry standards. Providing
REALTORS® with resources on topics that matter and are
relevant to understanding their finances is a top priority.
For example: Credit Union members are currently taking
advantage of 60 days of FREE virtual coaching services
from world renowned motivational business coach,
Jared James. Through December 31, 2014, Jared James
Enterprise is offering all members of the Credit Union
60 calendar days of free motivational coaching to help
REALTORS® increase their market share.
And now we are proud to announce our newest benefit
for REALTOR® members: Available in partnership with
NAR’s REALTOR Benefits® Program, the REALTOR® Credit
Card is here! The card offers many features, including
exclusive REALTOR®-branding, customized real estate
designs, as a real estate practitioner or an advocate for
Value and Benefits of our
Credit Union
30. 28 MARYLAND REALTOR®
NOVEMBER 2014 www.mdrealtor.org
COMING SOON... BE AMONG
THE FIRST TO APPLY FOR THE
REALTOR® CREDIT CARD!
The REALTOR® Credit Card Features
• Customized real estate-themed designs
• No annual fees
• No balance transfer or cash advance fees
• A comprehensive rewards program
• Competitive variable interest rates as low as
8.00% APR** that you have come to expect
from your Credit Union
• Options for business credit or personal credit
Be among the first to Apply*
Go to www.REALTORSFCU.org/
REALTORcreditcard to request an application or
more information.
*Membership eligibility, qualifications, and primary savings
account with $1 minimum balance required to apply for credit.
To apply and request your card, visit www.REALTORSFCU.org/
REALTORcreditcard.
**Your initial Annual Percentage Rate (APR) will range from
8.00% to 18.00% based on your creditworthiness. After this,
your APR is subject to change monthly based on the Prime Rate
published in the Wall Street Journal on the last business day
of the prior month. Credit card rates apply to cash advances,
balance transfers, and outstanding balances on purchases. There
is no annual fee, no balance transfer fee and no cash advance
fee. Foreign transactions are subject to a fee of up to 1% of the
transaction amount. EMVTM
Chip will be available on credit card
beginning in 2015.
Federally insured by NCUA
homeownership, and the ability to select an imprinted
tagline such as“REALTOR®,”“Commercial Real Estate”or
“Association Management.”
The REALTOR® Credit Card Features
• Customized real estate-themed designs
• No annual fees
• No balance transfer or cash advance fees*
• A comprehensive rewards program
• Competitive interest rates as low as 8.00% APR** that
you have come to expect from your Credit Union
• Options for business credit or personal credit
Be among the first to apply*
Go to www.REALTORSFCU.org/REALTORcreditcard to
request an application or more information.
Visit www.REALTORSFCU.org today to see all of the
perks that come with being a member of the only
financial institution designed exclusively for
REALTORS®.
References
Federal Deposit Insurance Corporation (FDIC), (2014),
Weekly National Rates and Rate Caps. Retrieved
September 16, 2014, from https://www.fdic.gov/
regulations/resources/rates/.
Jewel Codosea, M.A., Business Development Administrator, REALTORS®
Federal Credit Union, a Division of Northwest Federal Credit Union and
Victoria Gillespie, M.B.A, Licensed MD REALTOR®, VP National Director
Business Development, REALTORS® Federal Credit Union, a Division of
Northwest Federal Credit Union.
*Membership eligibility, qualifications, and primary savings
account with $1 minimum balance required to apply for credit.
To apply and request your card, visit www.REALTORSFCU.org/
REALTORcreditcard.
**Your initial Annual Percentage Rate (APR) will range from
8.00% to 18.00% based on your creditworthiness. After this,
your APR is subject to change monthly based on the Prime Rate
published in the Wall Street Journal on the last business day of
the prior month.
Credit card rates apply to cash advances, balance transfers, and
outstanding balances on purchases.There is no annual fee, no
balance transfer fee and no cash advance fee. Foreign transactions
are subject to a fee of up to 1% of the transaction amount. EMVTM
Chip will be available on credit card beginning in 2015.
Federally insured by NCUA.
31. www.mdrealtor.org MARYLAND REALTOR®
NOVEMBER 2014 29
From the Hotline C H A R L E S A K A S K Y , E S Q U I R E
Consumer Financial Protection Bureau RESPA
What You Need to Know
The CFPB also claimed that, over a period of more
than two years, the lender advertised in its display
ads on independent websites rates that were based
on a consumer profile that assumed an 800 credit
score, although most of the lender’s borrowers had
scores below 800. This practice resulted in payment by
consumers of high discount points without adequate
disclosure of the bases for the rates. The CFPB asserted
the company’s practices violated the Mortgage
Advertising and Practices (MAP) Rule by misleading
consumers.
The CFPB also alleged that the lender violated RESPA
and TILA (Truth in Lending Act) by overcharging for
credit reports. In addition, the CFPB claimed that the
lender violated RESPA by failing to properly disclose its
affiliate relationship with the AMC and making numerous
deceptive statements that led consumers to believe that
the lender had no relationship with the AMC.
The consent order required the lender to pay nearly
$14.9 million to the CFPB, which will distribute the funds
to consumers. The order also:
• requires the lender to pay a $4.5 million penalty;
• regulates the way the lender is permitted to advertise
interest rates;
• mandates numerous other corrective actions related
to the alleged activity; and
• requires the lender to hire an independent consultant
to assess the lender’s advertising and disclosure
practices and report to the CFPB’s Enforcement
Director.
With the ever-changing regulatory landscape, and new
changes coming to the real estate settlement process,
careful attention to compliance matters is more
important than ever.
Charles A Kasky, Esquire, Senior Vice President, Maryland Association of
REALTORS®.
W
e are taking a break from our normal format
this issue, in order to bring you news and a
cautionary tale concerning the Consumer
Financial Protection Bureau (CFPB).
On August 12, the CFPB announced a consent order
with Amerisave Mortgage Corp., a nonbank mortgage
lender, Novo Appraisal Management Corp., its affiliated
appraisal management company (AMC), and Patrick
Markert, the individual owner of both companies, to
resolve allegations that the lender deceptively advertised
mortgage rates to consumers, improperly charged fees
before providing consumers with Good Faith Estimates
(GFE), and failed to disclose its affiliation with the AMC
while allowing the AMC to charge inflated fees.
While not directly related to a real estate licensee’s
practice, this case illustrates perfectly the aggressiveness
of the CFPB and its new role in the real estate industry.
The Bureau also now enforces RESPA (Real Estate
Settlement Procedures Act), which has a more direct
impact on the profession, especially if you do business
with affiliated service providers or operate under a
marketing service agreement. The CFPB is almost
certainly looking for RESPA enforcement cases to send a
message to the real estate industry that they are serious
in fulfilling their mission of protecting consumers.
As explained in the consent order, Amerisave primarily
conducts business online through its own website, and
also advertises its mortgages through display ads on
independent websites and the website of an unaffiliated
third-party rate publisher. The CFPB asserted that, over
a roughly two-year period, a“systemic problem”caused
the lender to list on the rate publisher’s website lower
rates for certain mortgages than the lender was willing
to honor, and that the lender supplied other rates to the
rate publisher that were unlikely to be locked for the
majority of the lender’s borrowers. The CFPB claimed that
the lender failed to perform systematic due diligence or
quality control to ensure the accuracy of listed rates, even
though the lender was made aware through consumer
complaints that certain rates were inaccurate.
32.
33.
34. 32 MARYLAND REALTOR®
NOVEMBER 2014 www.mdrealtor.org
Maryland Housing Market has
Lost Some Momentum
Will Lower Mortgage Rates Reinvigorate Housing Market?
Residential Sales A N I R B A N B A S U
A
ccording to the National Association of
REALTORS® (NAR), existing home sales slid in
August after four consecutive months of gains
on a seasonally adjusted basis. NAR indicated,“Investors
paying in cash retreated from the market.”Despite the
August dip, sales were at their second highest pace for
2014, but remain 5.3 percent below the 5.33 million-unit
level achieved last August
There are of course a myriad of reasons for the lack of
progress in producing home sales growth over the past
year. The market continues to be affected by factors
ranging from stiffer down-payment requirements
and student debt and the mortgage rate surge that
occurred during the summer of 2013. Recent information
regarding the initial failure of a former Federal Reserve
Chairman to qualify for a refinance reminds us all that the
mortgage application process remains difficult.
Perhaps the most obvious factor at work is often the
least discussed—resistance to higher prices. This seems
like a strange thing to contend with given that in many
metropolitan areas, home prices remain well below their
cyclical peak. According to Case-Shiller data, home prices
are still 33 percent below the peak achieved in December
of 2006 in Miami. In Washington, D.C., the corresponding
figure is 16 percent (peak reached in May 2006) and in
New York it is 18 percent (peak achieved in June 2006).
Nationally, home prices are still off by more than 9
percent from their peak.
But prices have been rising more recently. The price
increases of the prior decade were driven by a number of
factors, including an investment motivation founded on
the notion that home prices would continue to rise and
were unlikely to fall. That motivation no longer exists for
many families, at least not to the same extent. With the
exception of a now dwindling number of cash buyers,
most people are simply purchasing a place in which to
live rather than a blockbuster investment. Prices have
been rising since 2009 and were up 5.6 percent nationally
according to the SP/Case-Shiller U.S. National Home
Price Index.
As a result, it is the apartment market that is racing
ahead in much of the nation, including in the Baltimore
metropolitan area, which is now in the midst of an
apartment development boom. Eventually, too many
apartments will be in place, but for now, leasing remains
strong and new projects continue to search for and
receive approval, including several high profile projects
in Baltimore City.
…sales were at their second
highest pace for 2014…
35. www.mdrealtor.org MARYLAND REALTOR®
NOVEMBER 2014 33
July 2014 vs. 2013
UNITS AVERAGE PRICE
County 2014 2013 % Change 2014 2013 % Change
Allegany 50 31 61.3% $91,251 $91,251 3.9%
Anne Arundel 675 711 -5.1% $381,960 $381,960 -0.4%
Baltimore City 598 612 -2.3% $188,470 $188,470 -9.3%
Baltimore County 836 786 6.4% $287,015 $287,015 -4.7%
Calvert 120 124 -3.2% $332,591 $332,591 9.6%
Caroline 42 27 55.6% $136,869 $136,869 10.1%
Carroll 183 182 0.5% $318,230 $318,230 0.7%
Cecil 74 75 -1.3% $222,961 $222,961 8.3%
Charles 185 173 6.9% $253,049 $253,049 -0.8%
Dorchester 30 20 50.0% $144,460 $144,460 32.5%
Frederick 303 340 -10.9% $308,996 $308,996 -1.8%
Garrett 32 31 3.2% $254,216 $254,216 1.6%
Harford 298 319 -6.6% $257,934 $257,934 1.7%
Howard 355 396 -10.4% $452,364 $452,364 2.7%
Kent 26 23 13.0% $268,300 $268,300 5.7%
Montgomery 1059 1280 -17.3% $529,265 $529,265 -0.3%
Prince George’s 769 748 2.8% $223,870 $223,870 7.9%
Queen Anne’s 80 58 37.9% $392,124 $392,124 -0.7%
Somerset 14 18 -22.2% $102,586 $102,586 21.8%
St. Mary’s 126 108 16.7% $304,420 $304,420 -3.0%
Talbot 44 53 -17.0% $554,870 $554,870 0.5%
Washington 142 132 7.6% $208,864 $208,864 -14.3%
Wicomico 87 80 8.7% $145,673 $145,673 11.0%
Worcester 133 154 -13.6% $274,379 $274,379 -11.8%
TOTAL 6,261 6,481 -3.4% $335,655 $335,655 -3.3%
Figures reflect resales and new properties. Residential resales are reported by MRIS® and local associations
MLS systems.
That is not to suggest that Maryland’s owner-occupied
housing market has stalled. While August was not a
good month, September was better. In August, home
sales were up 0.5 percent, average sales price was
down 1.1 percent, and median sales price was down
0.4 percent compared to the same month one-year
prior. In September, home sales were up 5.2 percent;
average sales price was up by nearly a percentage point
while median sales prices was essentially unchanged.
By September, average sales price stood at $307,825
statewide while median sales price was just shy of
$259,900.
According to data supplied by MRIS and the Coastal
Association of REALTORS®, 13 of Maryland’s 24
jurisdictions experienced increases in average sales
price in September. These included Kent County (77.3%),
Talbot County (22.0%), Cecil County (19.2%) and Prince
George’s County (9.6%). Nineteen jurisdictions posted
year-over-year advances in unit sales, led by Caroline
County (153.8%) and including Allegany County (96.8%),
Dorchester County (82.4%), and Kent County (38.5%).
Among the counties sustaining unit sales declines were
Garrett County (-7.0%), St. Mary’s County (-5.8%), and
Anne Arundel County (-5.2%).
Looking Ahead
It is not that the market is in deep decline. It is merely flat.
Much of this can be explained by economic dynamics in
Maryland, which have deteriorated recently.
August data indicate that Maryland ranked 44th in
the nation in terms of job growth over the past year
among the 50 U.S. states, 45th if one includes the
District of Columbia in the ranking. Also in August,
Maryland’s unemployment rate surpassed the U.S. rate of
unemployment for the first time in 16 years (April 1998).
What’s more, lower-wage segments continue to be at the
vanguard of statewide job creation while several higher
wage segments have actually shed employment over the
36. 34 MARYLAND REALTOR®
NOVEMBER 2014 www.mdrealtor.org
past year. On a year-over-year basis in August, leisure and
hospitality added 7,700 net new jobs (mostly low-wage),
or 3.0%, over the past 12-months, while construction
added 5,500 jobs (+3.7%; largely middle-wage). New
jobs were created in several skill intensive segments,
including education and health services (+7,300 jobs;
+1.7%) and financial services (+4,900 jobs; +3.4%).
Meanwhile, jobs were lost in manufacturing (4,300 jobs;
down 4.0%), information (3,400 jobs; down 8.7%), and
distribution (otherwise known as trade, transportation
and utilities; 4,200 jobs; -0.9%). The government sector
lost 4,600 jobs (-0.9%).
The expansion in stock prices since May 2009 has helped,
particularly in Maryland, which is relatively wealthy with
a disproportionate share of households participating in
equity markets. However, while this may help support
activity at the higher end of the market, for the meat of
the market to perform, Maryland needs to add greater
numbers of high quality jobs. Given federal spending
dynamics—namely a secular trend toward austerity—
that may not happen anytime soon.
Thankfully, Maryland’s business climate has emerged at
the forefront of current gubernatorial campaign
discussions on both sides. The goal is to better position
the state to attract more private investment to offset the
impact of expected federal government“rightsizing.”The
State’s legislature already took steps during the most
recent legislative session to create a more favorable
estate tax regime. More positive steps are likely
forthcoming during future legislative sessions.
Anirban Basu, Chairman CEO, Sage Policy Group, Inc.
August 2014 vs. 2013
UNITS AVERAGE PRICE
County 2014 2013 % Change 2014 2013 % Change
Allegany 45 50 -10.0% $103,994 $115,643 -10.1%
Anne Arundel 664 683 -2.8% $371,251 $367,111 1.1%
Baltimore City 619 593 4.4% $155,332 $181,313 -14.3%
Baltimore County 800 763 4.8% $260,799 $264,557 -1.4%
Calvert 110 120 -8.3% $318,464 $325,923 -2.3%
Caroline 37 22 68.2% $154,659 $136,295 13.5%
Carroll 182 182 0.0% $311,492 $310,973 0.2%
Cecil 83 88 -5.7% $235,821 $218,519 7.9%
Charles 183 185 -1.1% $265,858 $273,477 -2.8%
Dorchester 30 32 -6.3% $129,583 $149,634 -13.4%
Frederick 348 312 11.5% $302,381 $289,838 4.3%
Garrett 42 42 0.0% $319,735 $321,702 -0.6%
Harford 243 268 -9.3% $273,621 $259,655 5.4%
Howard 328 316 3.8% $439,928 $435,757 1.0%
Kent 25 21 19.0% $217,994 $319,107 -31.7%
Montgomery 1027 1108 -7.3% $523,813 $516,678 1.4%
Prince George’s 692 709 -2.4% $245,403 $222,359 10.4%
Queen Anne’s 68 56 21.4% $332,055 $399,464 -16.9%
Somerset 22 13 69.2% $117,198 $106,772 9.8%
St. Mary’s 116 92 26.1% $282,753 $280,620 0.8%
Talbot 57 41 39.0% $525,117 $487,142 7.8%
Washington 132 136 -2.9% $175,112 $203,390 -13.9%
Wicomico 89 82 8.5% $159,609 $168,430 -5.2%
Worcester 164 160 2.5% $238,709 $281,012 -15.1%
TOTAL 6106 6074 0.5% $316,502 $319,930 -1.1%
Figures reflect resales and new properties. Residential resales are reported by MRIS® and local associations
MLS systems.
37. www.mdrealtor.org MARYLAND REALTOR®
NOVEMBER 2014 35
The Positive Side of Vacancies
Commercial Connection D E N I S E D O U G L A S
I, for one, am very happy when I have vacancies. It gives me an opportunity to make improvements that will
keep my property up to date and in line with the market changes taking place in the area. In addition, it allows
me the opportunity to increase my rental income.
how much empty space is natural for a market depends
on how responsive (elastic) demand and supply are to
economic shocks.”
Let’s look at the history of the actual vacancy rates in the
Washington, DC metropolitan area and what it may infer,
in light of recent economic shocks. (See chart on page xx)
The chart suggests that the history of the actual vacancy
rates for this metropolitan area infers a natural vacancy
rate of 4% for the apartment sector, 7-8% for the office
sector, 5–6% for the retail sector and 8-9% for the
industrial sector.
Certainly we can see that this area is not very responsive
(i.e., it is inelastic) to periods of economic shock. This
despite geographical limitations, stringent building
permit requirements, a long building permit process, and
lengthy construction time.
Most likely, this inelasticity is rooted in a the area’s
stable commercial market, due in large part to
the attractiveness of the location to national and
international investors, and the large influx of new
residents.
A bit more analysis of our sample metropolitan area
data shows that the apartment and retail sectors are less
responsive (more inelastic) than the office and industrial
sectors. Discussions with my colleagues concluded
that this may be because of the duration of the leases.
Apartment renters generally sign one year leases, while
office and industrial tenants generally sign 5–10 years
leases, and retail tenants simply go out of business when
W
ithout vacancies, there would be no growth.
Look at DC, for example, a city like many
densely populated urban areas where there
is little land available for development. Developers have
created vacant space by purchasing and demolishing
existing buildings and building brand new mixed-use
commercial property from the ground up. By doing this,
they have created tremendous growth.
I have also found that some landlords are holding vacant
space in hopes of finding tenants to occupy a large space
before dividing it into a smaller space and/or in hopes
of filling it with the employees of a major employer that
is expected to relocate to the area. They might heed
advice from John F. McDonald, Professor Emeritus at the
University of Illinois, well known for his research in urban
economics and real estate, who says that“Vacant space is
like an inventory of goods held by a merchant.”He then
cautions:“Landlords must balance the cost of holding
vacant space against the benefits.”
The question is, however, how much vacant space is
natural.
Natural Vacancy
Vacancies occur naturally due to the constant changes
in peoples’wants and desires and businesses’goals
and objectives. The measurement of this activity is
expressed as a vacancy rate. According to John Krainer,
an Economist with the Federal Reserve Bank of San
Francisco,“the natural vacancy rate is a level to which
vacancies revert to after a shock”and is“inferred from
the history of actual vacancy rates.”He adds that“Exactly
38. 36 MARYLAND REALTOR®
NOVEMBER 2014 www.mdrealtor.org
the market no longer supports them, regardless of their
lease term.
According to John McCartney author of“Predicting
Turning Points in the Rent Cycle Using the Natural
Vacancy Rate an Applied Study of the Dublin Office
Market,”
“When the actual vacancy rate exceeds this [natural
vacancy rate] level the market is“overbuilt”and the
rents will fall. Conversely, when vacancies are below
their natural level, theory suggests that rental
growth will occur.”
Does this mean that the Washington DC metropolitan
area office and industrial sectors are over built? No, not
necessarily. Yongping Liang, Director of Model Validation
at Fannie Mae, says that“the same rate may tell different
stories and different rates may tell the same story”for a
sector or location. In other words, every sector or location
is unique, and we can’t infer much from too broad a
measure of vacancy rates.
What We Can Conclude
Vacancies are a natural part of the cycle. They can provide
valuable information when deciding rents, determining
the amount of rent to charge, identifying which markets
and sectors are best for investment and development,
and the timing of construction projects.
The amount of space that is vacant is the amount of
space that is available for lease or purchase. This is just
what our clients are looking for: vacant space. When
you talk with a landlord with a lease terminating in 3
months, or a developer who will complete construction
in 6 months, and they are willing to list it for sale or lease
right now, these are opportunities for growth. The more
vacant and/or available properties that meet our clients’
specifications, the more deals we can make!
This is the positive side of vacancies…
Denise Douglas, BML Properties Realty LLC in association with
Commercial Real Estate Advocates, Inc., Member of MAR’s Commercial
Alliance Committee
Source:Vacancy rates obtained from IRRViewpoint Reports, with much appreciation to Michael S Miller, GeorgeWard andTamar Charles. Economic Information obtained from
the Bureau of Economic Research.
Metropolitan Vacancy Rates
39. Not intended to solicit broker owners already under contract. This is not an offer to sell
or solicitation of an offer to buy a franchise. An offer is made by prospectus only.
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