NAR requires that local associations facilitate arbitration requests and Code of Ethics enforcement through a Professional Standards program. Each local can run its own Professional Standards program or the NAR rules allow locals to work with another local or with the state Realtor® association to provide these services. 

At least a dozen states operate Professional Standards programs on behalf of their local associations.  A PAR task force reviewed many of these statewide programs during 2010 and 2011 and in 2011 the PAR Board of Directors voted to create a Statewide Professional Standards Cooperative to offer these services to local associations in Pennsylvania.

The statewide cooperative officially launched on January 1, 2012, with 18 participating locals.  Basically, this means that as of the beginning of the year, all administrative responsibilities related to ethics and arbitration cases in those associations will be handled by PAR staff rather than local staff.  Locals that have not joined the cooperative will still operate their local programs as they have in the past.

The primary difference ‘on the street’ will be that Realtors® or members of the public will contact PAR instead of local staff to pursue a possible ethics complaint or a request for arbitration against a Realtor® who belongs to one of the participating locals.  The grievance, hearing and appeal process will then be handled by the appropriate state committee(s), which will be have members from every participating local, as well as from those locals who continue to run their own programs. 

The statewide program will have other benefits as well.  For example, the PAR program will emphasize mediation and ombudsman services to try to solve issues before they progress to a full-blown hearing.  Also, the statewide cooperative is introducing a new Ethics Citation System, based on procedures adopted in only a few other associations across the country, which for the first time will authorize the issuance of “tickets” for certain breaches of the Code, rather than requiring every complaint to proceed through the full hearing process.

The statewide cooperative is a voluntary program offered to all local associations.  Locals may join or leave the program on a yearly basis, though for the first year we will facilitate the process for locals who wish to join the cooperative throughout the year.  If you have any questions about the statewide cooperative, or if you have a potential ethics or arbitration case, please contact me at 1-800-555-3390 or laaron@parealtor.org.

Brett Woodburn, Esq.

Calendar year 2010 was a year for change for residential real estate closings.  The Department of Housing and Urban Development (“HUD”) implemented new changes in RESPA, the Federal Reserve introduced a new Truth-in-Lending disclosure form and a new HUD-1 Settlement Sheet and Good Faith Estimate made its way into our transactions. Throughout most of 2010 and 2011, the real estate industry adjusted to these new changes, forms and rules; for the most part, the adjustment went smoothly. 

However, as 2011 drew to a close and the implications of the Dodd-Frank Act started to come to the fore, a new wave of change arrived. HUD is no longer charged with implementing and overseeing RESPA; that duty was transferred to the newly-created Consumer Finance Protection Bureau (CFPB). One of the charges that the CFPB is required to accomplish is to combine the HUD-1 Settlement Sheet with the Truth-in-Lending (“TIL”) Disclosure. This is no small task. Those of you familiar with residential real estate settlements understand that the TIL is one of the least-understood forms reviewed at settlement. 

The two forms — the HUD-1 and the TIL — provide essential information to consumers. The TIL discloses the true costs of the loan, whether there are pre-payment penalties or balloon payments and whether the note contains a demand feature. (Experience suggests that the only information most consumers understand is the pre-payment and balloon payment disclosures). The HUD-1 identifies the source and destination of the loan proceeds. It acts as a balance sheet so that lenders, regulators and consumers can identify the source of the money (federally related mortgage money or consumer paid money), who got paid what amounts and whether payments were made at closing or outside of closing.

Combining these two separate disclosures into one form that an average consumer can comprehend is no small task. Currently, the CFPB is working with two prototypes, one the closely resembles the current HUD-1 and one that is a completely original form. While this (current) round of comments has closed, all real estate practitioners (or at least settlement service providers) are encouraged to monitor these forms as they evolve. The forms can be viewed at the CFPB website.

Secretary Carol Aichele

As the New Year begins, the PA Department of State is looking to the real estate industry as an important part of helping the commonwealth’s economy recover.

Secretary of the Commonwealth Carol Aichele said, “These tough economic times have hit no industry harder than real estate. Selling homes is an economic generator, providing income for Realtors® and their firms, while creating and preserving other jobs.”

Aichele notes, a home purchased often sparks increased business for home furnishing stores, home improvements businesses and landscapers, as families tailor properties to fit their personalities.

The secretary also sees Realtors® as job generators. “When you open a realty office, you not only employ Realtors® but also support personnel.  And you support other local businesses, by purchasing goods, such as paper, computers, office furniture, and vehicles and by hiring other firms, from cleaning services to legal representation.”

Aichele, who oversees the State Real Estate Commission, has implemented policies to more efficiently and effectively investigate complaints and when needed, the department will take action against licensed professionals who violate their standards of practice and harm the public.

“I believe this is important for you as license holders, because when anyone holding a license harms the public, it damages the reputations of everyone holding that license,” she said. “For the Department of State, it damages the public trust in us if we don’t act firmly, fairly and in a timely manner; that won’t happen on my watch.

“At the Department of State, we believe setting and enforcing the highest standards enhances your ability to do your job, by really making that license mean something,” Aichele added. “We want the best Realtors® to locate and stay in Pennsylvania because the standards are high. We want the Pennsylvania real estate industry to have the best reputation.”

Aichele believes Gov. Tom Corbett is making Pennsylvania a place where the real estate industry can flourish by changing the culture in Harrisburg.  While the state had a $4.2 billion deficit, the governor demanded state government to live within its means, while still providing high quality core services people need and deserve.  That is why he worked with the legislature to produce an on-time, no tax increase budget.

As part of the budget, the governor signed a law to help stabilize school property taxes. The new law removes most exceptions for school districts to raise property taxes above an index pegged to inflation, without voter approval.

“As Realtors®, you recognize how important good schools are to families buying homes but property taxes play a role in whether families can afford homes,” she said. “This new law will help insure families won’t face large annual property tax increases.

“The governor and I also believe homeowners should have the most freedom of choice possible in deciding what features are in their new homes,” Aichele said. “That’s why he signed the law removing the requirement for sprinklers in all new construction, leaving that decision up to the homeowner and giving you more options to offer your clients.”

Aichele added, “As the person who signs real estate agents’ licenses, I stand behind what those licenses mean; that you are a top professional. I’ll do all I can by setting and enforcing the highest standards to support the real estate profession in Pennsylvania, to enhance the public’s confidence in you and spur our economy.”

Realtors® should consider GLBT consumers an important part of the changing, diverse marketplace, according to Realtor® David Dean with Howard Hanna Real Estate in Pittsburgh. Dean, who chairs the International Committee of the Realtors® Association of Metropolitan Pittsburgh and serves on PAR’s Diversity Committee, recently spoke during a PAR Diversity Event in Harrisburg.

“It’s important to treat a GLBT client the same as any other client,” Dean said. “You don’t have to be a gay or lesbian Realtor® to work with someone from that community. However, I have found that many GLBT clients are extremely knowledgeable about real estate and they expect their Realtor® to be equally well informed as they look to him for advice.”

Dean said many Realtors® think GLBT clients aren’t concerned with school districts when purchasing a property because a majority of them don’t have children. However, that’s often not the case. “Many GLBT consumers don’t usually stay in their homes as long, so they are especially concerned about the value of their property and the return on their investment. That means they will want to know about the school district associated with the house,” he added.

A portion of the GLBT community are pioneers or trend-setters, according to Dean. “GLBT clients like to buy properties in up-and-coming areas. They like to put sweat and tears into a property to create a more valuable house,” he said. That means the GLBT client may be interested in special, local programs that give tax relief to those who refurbish distressed properties.

Dean said it’s important for Realtors® to be aware that the PA Human Relations Commission does not include sexual orientation as a protected class. “Some local municipalities do have local ordinances which cover sexual orientation and would prevent discriminate against gay/lesbian couples,” he said. “It’s important to be aware of that and make sure your clients have mortgage insurance and/or contact an attorney to insure that partners are protected in the event of a death.”

The PA Human Relations Commission said local municipalities have increasingly been adopting ordinances protecting sexual orientation. A list of municipalities which have adopted sexual orientation ordinance (current as of November 2011) is available, however the PHRC recommends contacting local municipalities to make sure the information is still current.

While the state may not protect sexual orientation, NAR’s Board of Directors approved an amendment to NAR’s Code of Ethics to include sexual orientation as a protected class so Realtors® can’t discriminate with customers or in their hiring practices.

Realtors® may find additional information on NAR’s website or the NAGLREP website.

Bill Rancic

Bill Rancic, winner of the first season of The Apprentice and co-star of the Giuliana and Bill reality show, was the keynote speaker Wednesday at the Triple Play REALTOR® Convention and Trade Show in Atlantic City.

He presented to the grand assembly on “The Future of Real Estate in America as We Know It” discussing the key to surviving in a difficult real estate market.

“Brokers and agents need to think like entrepreneurs today more than ever,” said Rancic.

He used examples from his own life to teach business lessons and ignite inspiration to hundreds of Realtors® in attendance from Pennsylvania, New York and New Jersey.

“One of the things I have done in my life is people watch,” he said. “You can learn so much, good and bad, from people watching.”

He has watched successful entrepreneurs, who all share similar traits.

“Successful entrepreneurs are creative, can pursue different opportunities, are good decision makers, never quit and never make excuses,” he said. “Anyone can have an entrepreneurial mindset.”

Among the highlights of Rancic’s speech included the story of his rise to entrepreneurial success. Before becoming Donald Trump’s original “apprentice,” he founded Cigars Around the World at 23 years old from a 400-square-foot studio apartment in Chicago.

“The fundamentals of business don’t change,” said Rancic. “Business at Donald Trump’s level is the same at your level.”

Rancic says the key to success in real estate is to have the ability to recognize opportunities and grab ahold of them.

“Most people have a difficult time making decision’s and let opportunities pass them by,” he said. “Don’t be afraid to try. Tough times don’t last, tough people do.”

After his presentation, Rancic signed autographs and posed for pictures with attendees.

He’s currently developing real estate in Chicago, producing and appearing in several television programs and speaking to businesses and organizations around the country.

A published author, he wrote The New York Times best-selling book You’re Hired: How to Succeed in Business and Life from the Winner of The Apprentice.

During the National Association of Realtors^® (NAR) Annual Convention several changes to the code were adopted that will be reflected in the NAR Code of Ethics effective January 1, 2012.

A sneak preview of the 2012 Code of Ethics changes are:

• Language was adopted to implement discretionary authority for boards and associations to require their members mediate disputes that would be otherwise arbitrated.
  • Rationale: The amendment allows local associations to create a policy that mandates mediation before arbitration.
• A new Standard of Practice under Article 1 has been adopted similar to existing Standard of Practice 3-9 to prohibit Realtors® from accessing or using, or permitting or enabling others to access or use, listed or managed property on terms or conditions other than those authorized by the owner or seller.
  • Rationale: Adding this under Article 1 now makes it clear that the rule applies to in-house deals as well as cooperative deals and clarifies that it applies to both listed and managed properties.
• In Article 15 of the Code the word “competitors” was changed to “other real estate professionals” that prohibits the making of false of misleading statements about others.  
  • Rationale: For instance a Realtor^® engaging in appraisal might not be the competitor of a Realtor^® engaging in property management but one would still be barred from knowingly or recklessly making false or misleading statements about the other.

Be sure to keep your eye out for the release of the 2012 Code of Ethics and Standards of Practice of the National Association of Realtors^®.  The Realtor^® Code of Ethics is always changing to reflect evolving real estate industry practices.

To make sure you are aware of the changes that affect your business and ensure that you are in compliance with the code, contact your local Professional Standards Administrator regarding educational and training opportunities in your area.

As a reminder, all Realtors^® are required to complete the NAR Realtor^® Code of Ethics Training by December 31, 2012.

Shannon King

Like many Realtors®, Shannon W. King is constantly traveling and is forced to keep her business virtual.  A practicing Realtor® since 2000, she has owned and operated two brokerages in two different states simply using virtual office technologies.

An educator and author, King leads speaking engagements across the country on how real estate professionals can take their office mobile by embracing technology and new marketing tools.

On Tuesday December 6, she will be offering a class titled ‘Real Estate Road Warrior’ at the Triple Play REALTOR® Convention and Expo in Atlantic City. In her class she will teach attendees how to run a business from the road utilizing 25 free mobile office tools to assist with smooth transactions. 

“Agents will walk away with a clear idea on how to structure their business from using virtual assistants as well as learning mobile applications that will help them save time and money in their business,” said King.

King says it’s important for agents not to be afraid of technology and to embrace it. She says this class will teach the agent to respond faster and better serve clients.

“It’s a hands-on class and attendees are encouraged to bring their laptops and cell phones to the class for live training on the spot,” she added.

She will be presenting a second class titled ‘Marketing Mojo’ and will teach real estate professionals how to reinvent themselves in a new market with an old twist. She will teach attendees how to attract new clients by combining what they already know with the “new rules” of marketing.

“There is a different mentality today than there was 20 years ago,” she said. “Today’s real estate world is about the consumer and the community. I will teach agents how to reinvent themselves in this new market.”

With over 10 years in the real estate industry, King has overseen more than 1,000 transactions with offices in numerous cities and two states and has helped over 500 families find homes. Her book 101 Technology Tools for Business on the Go was recently published and she was featured in Realtor® Magazine’s “30 under 30” which recognizes the top producing real estate professionals in the country under 30. She is also listed under the Inman 100 list of Most Influential Real Estate Leaders.

“Clients will benefit from their agent being more connected and using the latest applications available,” she added. “These classes will give agents the best tools to implement immediately in their business to be more profitable, efficient and productive.”

Tony Brown, a Philadelphia Realtor® and past chair of PAR’s Diversity Committee, said, “African-American consumers are similar to other ethnic groups in their approaches to marriage, family formation, gender roles, parenting styles, tightly extended family units and matrilineal organization of the family.”

In 2010, it was estimated that 40 million African-American consumers would have $1 trillion in buying power, according to market research publisher Packaged Facts, a division of MarketResearch.com.

This is yet another untapped market of homebuyers, Brown said. “In order to expand our markets, we need to consider doing business with diverse consumers and understanding their needs,” he said. “They might not be receptive to existing sales techniques and traditional marketing approaches.

“African Americans believe that someone who understands them culturally would not judge them through a filter of negative stereotypes,” Brown added. “Successful agents will let go of their own biases and understand that they will need to learn more about the multicultural consumer and their culture.”

Brown said real estate professionals interested in broadening their understanding of diversity and expanding their market share need to:

• Build and expand their understanding of cultural differences to serve clients better and fairly
• Learn how to offer unique and appropriate services to these growing groups
• Understand and enjoy other cultures as they build relationships; a prerequisite for working with most international or immigrant clients
• Understand and appreciate other cultures through open lines of communication.

“We must be conscious of the fact that the multicultural consumer has been taken advantage of during the financial crisis and the well being of the multicultural consumer is seldom a factor how businesses make a profit,” Brown said. “With so much distrust, a lot of work in the areas of education, counseling and foreclosure prevention will be necessary and help protect the multicultural consumer while building a working relationship based on trust.”

Melynn Sight

Creating a strong brand can make a person or an association authentic and valuable, according to leadership marketing expert and Triple Play presenter Melynn Sight.

Sight will be presenting a one-hour session titled ‘Creating Career Karma’ at the Triple Play REALTOR® Convention and Trade Expo, December 6-8 in Atlantic City. She will offer attendees her six steps to creating a strong brand and how to live that brand in every interaction.

“There are 1,000 people doing exactly what you do so you need to set yourself apart so potential customers see a unique person,” said Sight. “I want to help push you to discover new ideas to present yourself and help you reach your professional goals. If you could put yourself in a position where your potential customers believe that you are the only person they would ever consider then you have projected a strong brand.”

Sight says to truly be successful at creating a brand, real estate professionals need to show potential customers they are authentic. This will make the customer remember and refer back to them.

“The key to your business success is relationships and making connections,” she added. “Buyers, sellers, patients, donors and customers want to work with people they know and trust. Throughout the years I’ve come up with what’s considered a strong authentic brand. I will teach Realtors® how to set themselves apart and create their career karma.”

With over 20 years of marketing leadership experience, Sight’s expertise spans both product and services-related ventures for associations and private enterprise. Her clients range from large national associations to small associations in a variety of industries. She founded nSight Marketing to help her clients create solid marketing and communications plans.