REALTOR® Magazine: Jan/Feb 2012

THE BUSI NESS TOOL FOR REAL ESTATE PROFESSI ONALS Real torMag. REALTOR.
org
JANUARY/FEBRUARY 201 2
THE BUSI NESS TOOL FOR REAL ESTATE PROFESSI ONALS Real torMag. REALTOR.org
J ANUARY/ F EBRUARY 2 01 2
NATIONAL
ASSOCIATION of
REALTORS
2012 NAR President Maurice Moe Veissi Page 28

The
Connector
The Larger Meaning of
Louisianas Transfer Tax Ban
Page 10
Real Estates Strongest
Sectors for 2012
Page 24
S P E CI A L R E P OR T :
Clearing the Decks of
Distressed Properties
Page 32
I N A RUT? HARVEST SOLUTI ONS HERE Page 2
2 REALTOR
JANUARY/FEBRUARY 2012 RealtorMag.REALTOR.org

Be groundbreaking. Were here to help.
Your work week is a series of challenges. Explore REALTOR Magazine online for the solutions.
It's all at RealtorMag.REALTOR.org.
MON DAY
Signs of Wear
My new listing looks lived in.
Where do I begin?
1. Start with the basics.
Add your branding to Simple Tips for Better
Showings, and review the list with your clients.
2. Explore how others did it.
For ideas on particular staging challenges,
review before-and-after photos from real
estate pros.
3. Oer sellers a visual aid.
Embed videos from Stage This Room on your
Web site or blog, and e-mail a link to the sellers.
Dig Deeper
Simple Tips for Better Showings is
part of a collection of Handouts for
Customers. You can edit the handouts
and add your own branding. At our
home page, click on Handouts.
T U E S DAY
Time Crunch
Im spending way too
much time watching
the hourglass on my
computer. There must
be a better way.
Get your head
in the clouds.
Our cloud computing Buyer's
Guide looks at a variety of
services that enable you
to free up your hard drive,
access and share documents
online, and save time.
Search for cloud
computing for a variety
of articles and ideas on
how your peers are using
the cloud (and see this
issue's story on Apple
iCloud, page 13).
SEARCH
Stage This Room
SEARCH
Makeovers That Wow
SEARCH
In the Clouds
SEARCH
Simple Showing Tips
WE DN E S DAY
Dull Property Ads
I want to take my advertising
copy up a notch. How do I
get beyond 3 bdrm/2 bth
charmer?
Bring the
architecture to life.
Visit the Guide to Residential Styles
and nd descriptions for more than
30 styles of residential architecture.
SEARCH
Residential Styles
While youre exploring
the Guide, click on the
Structural Elements link
and bone up on your
knowledge of features
such as arches, windows,
and roofs.
Be groundbreaking. Were here to help.
Your work week is a series of challenges. Explore REALTOR Magazine online for the solutions.
It's all at RealtorMag.REALTOR.org.
Dig Deeper
T H U R S DAY
Writers Block
Blogging was fun and
rewarding at rst, but
lately I nd myself staring
at a blank screen. I need
ideas.
Subscribe to
daily inspiration.
REALTORMag's free Daily News
E-mail (also available via RSS)
brings you summaries of news
articles from around the country
with links to the original source
(visit RealtorMag.REALTOR.org/
info/services).
Another great source is the
NAR Weekly Report. You
can customize this e-mail
with topics you choose (at
REALTOR.org, click on My
Account and then on View/
update your e-mail address
and subscriptions).
F R I DAY
Burnout
Its 2012, but Im feeling so
2010. Where can I get some
spark for my plugs?
Find a YPN near you.
REALTOR Magazine started the
Young Professionals Network in
2006. Today, there are more than
200 YPNs around the country.
Get involved and start meeting
the dynamic pros who are rewriting
the rules of real estate (visit
REALTOR.org/ypn).
T H E WE E K E N D
Open House Blues
It hardly feels worth the
trouble to host this open house,
but here I am.
Think outside the box.
You can turn open houses into an
amazing prospecting tool. Its where
the buyers are, after all, or the
people who know buyers.
For more open house
ideas, search for "open
house." For prospecting
and marketing tips, read
our "Sales Coach" and
"Mr. Internet" columns.
SEARCH
Open Houses That Work
RealtorMag.REALTOR.org JANUARY/FEBRUARY 2012 REALTOR
3
Check out the magazines
other programs, too: the
Good Neighbor Awards for
extraordinary community
service, and 30 Under 30,
recognizing young business
leaders.
4 REALTOR
January/February 2012 RealtorMag.REALTOR.org

Real Life
Marketi ng 101:
Bi rd i n the hand 8
Dont miss out on business
opportunities right in front
of your nose.
Your nar 9
2011 Realtors
Conference Highlights

Poli ti cal
advocacY 10
Louisiana bans transfer
taxes in a victory fueled
by the My Realtor Party
initiative.
ethi cs 12
Know what to disclose amid
multiple ofers.
i n court 12
An incomplete property
description means a
reduced commission.
technologY 13
Reach for the iCloud.
hoMe 14
Spotlight the features
that help sell a home.
Voices
Presi dent 5 PuBli sher 6 readers 7
This Issue J A N U A R Y / F E B R U A R Y 2 0 1 2
vol. 45, no. 1 REALTOR
Magazine (ISSN 1522-0842) is published bimonthly by the NATIONAL ASSOCIATION OF REALTORS
, 430 N. Michigan Ave., Chicago, IL 606114087. Periodicals postage paid at Chicago, IL, and at additional mailing ofces.
Annual subscription rates: $6 to members, included in dues; $56 to nonmembers. Postmaster: Send change of address to REALTOR
Magazine, NATIONAL ASSOCIATION OF REALTORS
, 430 N. Michigan Ave., Chicago, IL 606114087.

Copyright 2012 by the NATIONAL ASSOCIATION OF REALTORS
. All rights reserved. Printed in the USA and distributed to members of the NATIONAL ASSOCIATION OF REALTORS
and its afliated institutes, societies, and councils.

Page 48
Page 14
Page 32
Columns
coMMentarY 46
Realtor
is a two-syllable
word. Why do some make
it three?
laW 47
Look out for fraud with
distressed property sales:
Basic due diligence may not
be enough.
last Word 48
A memory champion re-
veals a creative approach to
never forgetting anything.
Features
COMMERCIAL
Retailing at the Crossroads
The continuing growth of online sales is afecting the shape and size of
brick-and-mortar spaces. Find out whats thriving in retail. Page 16
ThE yEAR AhEAd
Real Estates Best Bets in 2012
Residential and commercial investors are expected to play a big part
in the markets continued improvement this year. What are the most
attractive opportunities? Page 24
PRESIdENTS PROFILE
Man of the People
Naturally gifted as a communicator, NAR 2012 President
Moe Veissi relishes the opportunity to have an impact
on lawmakers and connect with members challenged
by difcult market conditions. Page 28
SPECIAL REPORT
A Clean Slate
Clearing the nations inventory of short sales and foreclosures will
require fortitude and business savvy . Take an in-depth look at how
practitioners are making distressed sales workand get strategies for
coping with the mental strain of personal distress. Page 32
5
SPECI ALTI ES
Appraisal REALTOR.org/appraisal
Auction REALTOR.org/auction
Buyer Representation (Real Estate Buyers Agent Council, abr, abrm) www.rebac.net
Commercial (Realtors
Commercial Alliance) REALTOR.org/commercial

Distressed Sales (sfr) www.realtorsfr.org
Green Real Estate (Green Resource Council, green) www.greenresourcecouncil.org
International (Certied Intl Property Specialist Network, cips) REALTOR.org/global
Land (Realtors
Land Institute, alc) www.rliland.com

Property Management www.irem.org
Resort/Second Home REALTOR.org/resorts
Seniors Real Estate (sres) www.sres.org
President Maurice Moe Veissi
President-elect Gary Thomas
First Vice President Steve Brown
Treasurer William J. Armstrong III, gri
Vice President & Liaison to Committees Dairell D.J. Snapp
Vice President & Liaison to Government Aairs Scott Louser
Communications Committee Chair Mary V. Dykstra, abr, crs
Communications Committee Vice Chair D. Gary Rogers, crs
CEO Dale A. Stinton, cae, cma, cpa, rce
EQUAL HOUSING OPPORTUNITY THE
NATIONALASSOCIATION OFREALTORS

supports the federal Fair Housing Act, which
prohibits discrimination in housing because
of race or color, national origin, religion, sex,
familial status (including children under
the age of 18 living with parents or legal
custodians, pregnant women, and people
securing custody of children
under 18), and handicap or
disability.
Senior Vice Presidents:
Communications Pamela Geurds Kabati
Consumer Relations Frank J. Sibley
Community & Political Aairs Walt Witek
Government Aairs Jerry Giovaniello
Human Resources, AE & Leadership Doug Hinderer
Information Technology Mark Lesswing
Global Business & Alliances Group Janet Branton, cae, cips
Legal Aairs Laurie Janik
Marketing & Business Development Bob Goldberg
Research Lawrence Yun
AFFI LI ATED ORGANI ZATI ONS
CCIM Institute (ccim) www.ccim.com
Council of Real Estate Brokerage Managers (crb) www.crb.com
Council of Residential Specialists (crs) www.crs.com
Counselors of Real Estate (cre) www.cre.org
Institute of Real Estate Management (arm, cpm) www.irem.org
International Consortium of Real Estate Associations www.WorldProperties.com
International Real Property Foundation www.irpf.org
Realtors
Land Institute (alc) www.rliland.com

Society of Industrial and O ce Realtors
(sior) www.sior.com
Womens Council of Realtors
(pmn) www.wcr.org
President
Views andadvertisingexpressedin
REALTOR
Magazinearenot necessarily
endorsedby theNATIONALASSOCIATION
OFREALTORS
. Theinformationcontained
withinshouldnot beconstruedas a
recommendationfor any courseof action
regardingnancial, legal, or accounting
matters by theNATIONALASSOCIATION
OFREALTORS
, REALTOR
Magazine, or
its authors.
430 N. Michigan Ave.,
Chicago, IL 606114087
500 New Jersey Ave., N.W.,
Washington, DC 200012020
800-874-6500; infocentral@realtors.org
REALTOR.org
MORE ONLI NE
uLearn about the
Home Ownership Matters
campaign at REALTOR.org
/homeownership.
uFor Realtor

Party updates, visit
realtoractioncenter.com.
My Pledge: to Stand by You
Im a guarueu optimist, but it uoesnt take an opti-
mist to see positive signs Ior housing in America.
Several inuepenuent surveys last year showeu that,
uespite ve uim cult years in which many owners lost
value, Americans still want to own a home. In Le-
cember, there were reporteu increases in penuing
home sales, existing-home sales, anu housing starts.
My guarueu optimism tells me the beginning oI a
bona ue recovery is unuerway.
1o some extent, the nal answer uepenus on how
well we absorb the uistresseu housing thats on the
market or waiting to be solu over the next z to 6
months. Although Im an optimist, Im also a realist
who sells real estate in one oI the haruest-hit mar-
kets in the country, Miami. But I can tell you this: In
zoo;, most punuits were saying Miami woulu take
a uecaue or more to right itselI. 1ouay, AR is pre-
uicting uouble-uigit appreciation Ior Miami in zoz.
How about that!
Look, I know one thing about real estate: It has
never been a quick answer to wealth. Patience anu
perseverance make real estate a long-term, but enor-
mously able, wealth builuer anu portIolio staple.
\ith regaru to uistresseu sales, its challenging to
make an impact on a national level. But iI you reau
this months special package on short sales anu Iore-
closures (A Clean Slate, page 32), youll see that the
a1oar Assota1o ov Rvar1ovs
has ably rep-

resenteu your interests on a number oI issuesIrom
ueIenuing your right to receive your Iull commission
to changing a lenuer am uavit that might have leu in-
nocent practitioners to be helu liable Ior others uis-
honest uealings. For these eBorts, Im grateIul to my
preuecessors in AR leauership, touays volunteer
leauers, anu our staB. 1hey have relentlessly pursueu
solutions anu, in recent years, helpeu to reuuce Iore-
closures anu make short sales move more smoothly
As your zoz presiuent, I pleuge to continue that
work, anu to conIront the many other challenges we
Iace touay, incluuing threats to home ownership. Al-
though we concluueu our Home Ownership Matters
bus tour, aIter hitting z cities in zo, were keeping
this valuable campaign alive. Rvar1ovs
, as well as
economic historians, have long helu that our nations
health uepenus on strong real estate markets anu
wiuespreau ownership oI real estate by those who
choose to own anu are nancially able. \e cant al-
low this economic uownturn, severe as it has been,
to take us oB course Irom those principles. \atch
Ior campaign upuates in the AR \eekly Report
e-mail, anu join me in this eBort by participating in
Rvar1ov
Party Calls Ior Action. Engage your cus-

tomers, too, through HouseLogic.com.
Im happy to see zoz starting out on an up-
beat note. But I assure you that, whatever the year
brings, AR will be stanuing besiue you all the way.
1hank you Ior your involvement, anu remember that
Rvar1ovs
are the heart oI the ueal. W

Moe Veissi is
2012 NAR president.
6 REALTOR

Publisher
HOW ARE WE DOI NG?
uThe magazine has
a refreshed Web site!
RealtorMag.REALTOR.org.
uWrite to us at
narpubs@realtors.org.
uWrite to NAR at
infocentral@realtors.org.
Frank J. Sibley
Publisher
CONTACT THE MAGAZI NE
430 N. Michigan Ave., Chicago, IL 606114087
500 New Jersey Ave. N.W., Washington, DC 200012020
Phone: 800-874-6500; Fax: 312-329-5978
Editorial e-mail & writers guidelines: narpubs@realtors.org
Advertising e-mail: jpowers@realtors.org
Web site: RealtorMag.REALTOR.org
SUBSCRI PTI ONS
Phone: 800-874-6500; Fax: 312-329-5960
E-mail: infocentral@realtors.org
REPRI NTS (100 or more)
The YGS Group
Phone: 717-399-1900, ext. 162; Fax: 717-399-8900
ADDRESS CHANGES
At REALTOR.org click My Account (top right), then Change your
information in the National REALTOR
Database System (login

required). No Internet access? Please contact your local board.
Senior Vice President Pamela Geurds Kabati
EDI TORI AL/DESI GN/PRODUCTI ON
Managing Director, Editor in Chief Stacey Moncrie
Manager, Creative & Design Julie Fournier
Managing Editor Wendy Cole
Senior Editors Robert Freedman, Katherine Tarbox
Designer Isabella Mathews
Copy Editor Bob Soron
Online Editor Brian Summereld
Multimedia Web Producer Erica Christoer
Online Visual Designer Elizabeth Siuta
NATI ONAL ADVERTI SI NG SALES
MIDWEST James G. Elliott Co.; Steve Coughlin, Account Manager; 312-236-4900, ext. 1105; s.coughlin@jamesgelliott.com
NEW YORK James G. Elliott Co.; Diane Sacken, Account Manager; 212-588-9200, ext. 1324; d.sacken@jamesgelliott.com
SOUTHEAST & TEXAS Jameson Weinbrenner Company Inc.; Bob Jameson, Account Manager; 972-669-1663; bob@jwwinc.com
WEST James G. Elliott Co.; Joe Rafael, Account Manager; 213-624-0900 Ext. 1205; j.rafael@jamesgelliott.com
CLASSIFIED SALES James G. Elliott Co.; Steve Coughlin, Account Manager; 800-542-4835; s.coughlin@jamesgelliott.com
CI RCULATI ON/ADVERTI SI NG
General Manager Kathleen Marusarz
Advertising Sales Associate Jill Powers
Advertising Sales Administrator Alvin Pulley
ADMI NI STRATI VE
Executive Assistant Cora Webb
Publications Assistant Wilma Gonzalez
GOOD NEI GHBOR AWARDS
Manager Sara Pullan Geimer
YOUNG PROFESSI ONALS NETWORK
Manager Robert Reuter
REALTOR
MAGAZINE, print and online, is REALTORS
best source of information on how to achieve business success. The magazine and Web site advance
real estate industry best practices, bring expert insights to signicant trends, and provide REALTORS
with timely decision-making tools on business purchases and strategies.

Houston, We Have an Opportunity
Since jj8, weve been to the moon anu back.
Back then, MicrosoIt anu others were pouring
millions into Internet plays that they saiu woulu
reinvent the way real estate is bought anu solu. 1he
a1oar Assota1oov Rvar1ovs
maue a com-
mitment to keeping Rvar1ovs
central to the trans-

action. II MicrosoIt was ARs Sputnik, REAL1OR
.comjust a year olu in jj8was its rst ASA
mission. Over the years, MicrosoIts HomeAuvi-
sor has become a Iootnote anu REAL1OR.com has
maintaineu a steauy o. position among buyers anu
sellers. But it was in those early, anxiety-lleu uays
that I lanueu at REAL1OR
Magazine with three

uecaues oI business publishing experience. I hau two
goals: to make the magazine an inuispensable busi-
ness tool Ior you anu to make it revenue neutral.
By zooo, weu achieveu the goal oI revenue neu-
trality. \hen ueclines in print auvertising anu the
economic uownturn took their toll, we responueu
by cutting expenses anu staB anu by reuucing our
Irequency (well prouuce six issues this year). But
we havent compromiseu in our eBort to bring you
practical, how-to inIormation on core topics such
as marketing, law, anu technology. Luring the past
years, weve receiveu more than oo awarus Irom
publishing organizations. Anu while I enjoy the rec-
ognition, an awaru we Iounueu is Iar more meaning-
Iul to me. 1he Coou eighbor Awarus, launcheu in
zooo to celebrate extraoruinary community service
by Rvar1ovs
, has Iunneleu nearly S million to

Rvar1ov
-supporteu causes. 1he magazine has also

been the catalyst Ior a youth movement within the
organization. In zoo6, we starteu the Young ProIes-
sionals etwork as an oBshoot oI our o \nuer o
Ieature. 1ouay, there are more than zoo YPs, anu
AR has YP members on most oI its committees.
ow, AR has embarkeu on a new mission,
again tieu to keeping Rvar1ovs
central to the
transaction. It starteu ve years ago, as CEO
Lale Stinton anu I talkeu about ARs seconu
century as the 1he Voice Ior Real Estate
. \e
thought, why not be the voice Ior consumers, too:
Imagine a marriage oI common interest between
Rvar1ovs
anu 8o million property owners to pro-

mote home ownership anu private property rights.
1hat uream now lives in HouseLogic.com, Real
Estate 1ouay rauio, anu our Public Auvocacy Cam-
paign, anu thats where Ill Iocus my energy going
Iorwaru. My role with the magazine moves into the
capable hanus oI Pamela Ceurus Kabati. Magazines
are my roots, anu Ill miss this one. Yet, Im exciteu
about the new Irontiers well cross together. W
Readers
7
Note: Letters and blog posts are
edited for space and clarity. Publication
of a letter doesnt constitute an
en dorsement of the writers views by the
NATIONALASSOCIATION OF REALTORS
or REALTOR
Magazine. Submission
of a letter constitutes permission to
publish it in any form or medium.
Powerful Tool
This is a thank you to all of you. I love the Web
site, REALTOR
Magazine Online. You have just

given my business a very powerful tool! I just had to
say thank you. Sasan Sbort, ]obn L. Scott Rca/ Estatc,
Orting, Wasb.
Dont Risk Your Life on a Chore
I appreciated the article on hazards at home(Homc
Succt Hazards, Noz./Dcc. :oII, . 8i. But I must
add my own: Never, never, climb a ladder without
having someone on the ground watching you. My
brother died when his foot slipped and he fell back-
ward and cracked his skull. He was kept on life sup-
port until his organs could be harvested. So he does
live on in other peoples bodies and in my heart. I
have preached this safety issue ever since, but just
last week a friend decided to clean out her gutters
herself and slipped on the wet ladder. She survived,
but she suered severe bruising and a damaged
rotator cu. The best rule, as far as Im concerned,
is to hire a professional to do the work, and remem-
ber that no chore is worthrisking your life. Nancy
Batt/cs, cv, Prcstigc Rca/ty, Pbocnix
Help for Relocating Seniors
Your editors column (Morc Tban ]ast a Hoasc,
Noz./Dcc. :oII, . 8i was very timely. Many of us
gathered with our senior relatives over the holi-
days. This oered us the perfect time for a dialogue
concerning independent living and whether those
relatives should leave their long-time home. In addi-
tion to the Senior Real Estate Specialist designation,
there is a wonderful organization called the National
Association of Senior Move Managers. A senior
move manager in Florida can help pack up a client
and assist a real estate agent and moving company.
I can coordinate the unpacking and resettling in
Massachusetts. We are bonded and insured and
adhere to the strictest standard ofethics.We can act
as mediators and alleviate much of the stress of both
sides of the move. To have parents walk into their
new residence and have it completely move-in ready
is a wonderful scenario for all involved. Candacc B.
Baacr, cv, svrs, Rca/tyo/ogy Inc. o McDona/d Rca/ Estatc,
Lcominstcr, Mass.
Representing Everyone
In response to the letter written by Mike Ramos
with Coldwell Banker Select Real Estate of Reno,
Nev. (H/scncc of Minoritics, Oct. :oII, . 8i, I wonder
whether one need be a person of color to embrace
minority communities and help them achieve the
American dream of home ownership? In his letter,
Ramos poses the question that a number of minor-
ity groups may echo: Who in this group [of NAR
leaders] is representative of me? My answer must
be, All of these board members represent you.
I think I can safely say that it is the moral, legal,
and ethical responsibility of every member of that
board, as well as the rest of us, to represent every
client or customer who comes through the door,
regardless of minority status. As a broker-agent, I
represent anyone that comes through the door to
the best of my ability, regardless of their minority
or protected status. I dont see African Americans,
Hispanic Americans, or Native Americans. I see
only Americans! Micbac/ L. Gi//i/and Sr., +nv, cv,
Cryc-Lci/c Inc., Rr+r1ovs
, Dic/son, Tcnn.
Less Government, Not More
I was very upset to learn that Congress recently
approved new higher loan limits for federally
backed loans with the enthusiastic support of NAR.
Our industry is increasingly reliant on the largesse
of government that long ago ceased to be able to
aord its proigate ways. It is almost impossible
to get a mortgage without the involvement of the
federal government. Why should our government
be insuring mortgages at all, let alone those at the
$700,000plus level? At what point do we stand on
our own as an industry? Were loaded with smart
people; we could be boldly promoting simplied
tax codes that eliminate the need for the mortgage
interest deduction instead of ghting like rabid dogs
to preserve it. ]obn G. Haac/, Cannon Coantry Rca/
Estatc LLC, B/airstoun, N.].
Editors Notc Rcstoring tbc /oan /imits is critica//y imor-
tant to sta/i/izing boasing and ui// /cnct /otb tbc FHH
insarancc fand and tbc taxaycr, NHR o/icy ana/ysts said
in a mytbs o facts docamcnt rc/cascd in Nozcm/cr. Want to
/carn morc Hcccss tbc docamcnt at REALTOR.org. W
WE WANT YOUR FEEDBACK Send letters to narpubs@realtors.org or join a conversation at one of our blogs:
Speaking of Real Estate; Styled, Staged & Sold; The Weekly Book Scan; and YPN Lounge.
Marketing 101: Bird in the Hand
If youre caught up in gimmicks, you may be missing out on
business opportunities right in front of you. By Scott Newman
Ive heard plenty of complaints lately from other
real estate professionals about the dearth of busi-
ness opportunities and the expense of marketing to
fnd clients. Ive also seen many practitioners who
dont put in the time to properly build a database of
contacts and farm their sphere but will spend thou-
sands of dollars a year on a gimmicky marketing
tactic that yields few results.
What a waste. My marketing philosophy is to do
more with what you have. My company, Newman
Realty, maintains a database of people we know,
many of whom weve worked with in the past. We
send mailings to the people on this list at particular
times of year. This puts us in the minds of people
who already know us and may be considering a real
estate transaction or can refer us to someone who
is. The result? Were constantly bringing in new
business, without spending a lot of time and money
doing so.
What were doing isnt hard. Ill bet you have
tens of thousands of commission dollars a year
waiting for you in your sphere of infuence right
now. Heres how to tap those dollars.
First, make a simple spreadsheet with headings
for name, contact information, addresses, occupa-
tions, family information, pet information, and any
other characteristics that you could sort electroni-
cally. (Tip: Nothing is more powerful than sending
someone a card on their dogs birthday.
They will love you forever.)
Start your list with family and
close friends, but then move into
past and current clients, neighbors,
business contacts, and anyone else
with whom you have a positive,
solid relationship. Make sure all
the information is accurate and up to date.
Next, come up with a plan to farm your data-
base. Your goal should be to touch everyone in
your database in various ways eight times a year.
For starters, I recommend setting up automated
quarterly mailings centered around major holidays,
so theres a reason for the mailing beyond just say-
ing, I want your business. (For us, nonreligious
yet important holidays such as the Fourth of July,
Halloween, and New Years Day work best, as re-
cipients are unlikely to get cards from many other
people on those days.)
Then, come up with an approach for the rest of
the years touches. We schedule two phone calls
at equally spaced intervals during the year for each
person, setting reminders to make sure each call is
completed. These phone calls consist of a simple
hello and some small talk and conclude with asking
if that person knows anyone we can call who may be
interested in our services now or in the future.
The remaining two touches are a matter of per-
sonal preference, but examples would be stopping
by peoples homes to say hello when youre in the
neighborhood, sending them a $5 Starbucks card
with a handwritten note on their birthday, or invit-
ing them out for a lunch or cofee.
Theres no wrong way to do this. Its all about
connecting with the people who support you and
reminding them that you are in the business, you
are doing well, and they should continue to refer
new people to you.
Once you start properly farming your sphere of
infuence, youll be amazed at how much business
has been slipping through the cracks. With a sys-
tematic, organized approach, you can continue to
grow your volume, despite the challenging market. W
Scott Newman is broker-owner of Newman Realty, a family-run
brokerage in Chicago focusing on short sales, foreclosures,
and buyer representation. He has been a top-producing
real estate agent in Chicago since 2008 and is an original
member of the YPN Chicago Board. For more information, visit
www.newmanknowschicago.com or follow him on Twitter at
@newmanrealty and @newmanknowschi.
Real Life N e ws | T r e N d s | T o o l s
8 REALTOR

9
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SURFIN THE HIGHLIGHTS FROM ANAHEIM The Realtors
Conference & Expo kicked o on 11/11/11 in Anaheim,

Calif. The event attracted 20,000 attendees from around the country who found inspiration and knowledge to boost their
business. 1. Making Connections. 2012 NAR President Moe Veissi (far right) mingles with well-wishers at his inaugural
party in Anaheim. 2. A Cut Above. Getting the Expo started were (from left) 2011 Meetings and Conference Committee
Co-chairs Pat Ziggy Zicarelli and Michael DiMella, NAR CEO Dale Stinton, 2011 NAR President Ron Phipps, and Bob Patton
and Mike Conway of Systems Engineering Inc. 3. Raising the Roof. In cooperation with Habitat for Humanity International,
volunteers gathered at the convention centers arena to frame homes for disadvantaged families in the Anaheim area. More
than 100 Realtors
participated in the build. 4. Bursting With Talent. Realtors
Got Talent winner Eric Alexander of

Daytona Beach, Fla., brought down the house with his soulful rendition of Piano Man. 5. Taking a Spin. NAR Treasurer Bill
Armstrong took a few minutes out of his busy conference schedule to test drive the Chrysler Town & Country minivan. At the
Expo, the National Association of Realtors
introduced Chrysler as the newest Realtor Benets Program partner.

6. Hot Times in the O.C. The mood was positively electric at the Young Professionals Network reception. More than 500 real
estate agents and brokers networked the night away at Heat Ultra Lounge.
2013 Slate
The 2013 NAR o cers will be
elected by the Board of Direc-
tors at the 2012 Midyear Leg-
islative Meetings in May and
installed at the REALTORS
Conference in November.
The Nominating Committee
presents the following slate
of o cers for 2013:
PRESIDENT
Gary Thomas
Aliso Viejo, Calif.
PRESIDENTELECT
Steve Brown
Dayton, Ohio
FIRST VICE PRESIDENT
Chris Polychron
Hot Springs, Ark.
TREASURER
Bill Armstrong
Damascus, Md.
REGIONAL VICE PRESIDENT
(NUMBER INDICATES REGION)
Linda Fercodini
Wolcott, Conn. (1)
Dominic Cardone
Media, Pa. (2)
John J. Harrison
Upper Mariboro, Md. (3)
Frank E. Kowalski
Miami, Fla. (5)
Robert E. Taylor Jr.
Birmingham, Mich. (6)
John R. Flor
Chetek, Wis. (7)
Daryl Lee Braham
Fargo, N.D. (8)
Sharla M. Lau
Fort Smith, Ark. (9)
Brooke Hunt
Flower Mound, Texas (10)
Patricia A. Pipkin
Santa Fe, N.M. (11)
Jeremy A. Starr
Eugene, Ore. (12)
Vince Malta
San Francisco, Calif. (13)
Region 4 has submitted the name of
Rebecca Murphy, Lexington, Ky., for
consideration by the 2012 Nominating
Committee. The candidate will go
through the auditing process and be
elected at the 2012 Midyear Meetings.
2012 NAR
Leadership
PRESIDENT
Maurice Moe Veissi
South Miami, Fla.
PRESIDENT-ELECT
Gary Thomas
Aliso Viejo, Calif.
FIRST VICE PRESIDENT
Steve Brown
Dayton, Ohio
TREASURER
Bill Armstrong
Damascus, Md.
Y O U R N A R
Real Life
10 REALTOR

Chrysler Group Named O cial Auto Manufacturer of NAR
If youll be in the market for a new car in the next two years, do yourself a favor and check out
the deals available from Chrysler Group. As of Nov. 1, 2011, Chrysler Group is the O cial Auto-
mobile Manufacturer of the National Association of Realtors
and the newest partner

in the associations popular Realtor Benets
Program.
As part of the program, you receive a $500 cash allowance on the purchase or
lease of select new 2012 Chrysler, Dodge, Jeep, and Ram models. The allowance is
applied over and above the deal you negotiate with the dealer and is in addition to
any other Chrysler Group incentive or special programs available.
As an NAR member or Realtor
association sta member, you may partici-

pate multiple times, as long as youre the buyer of the vehicle. Immediate family
members living in the same household may also take advantage of the $500
cash allowance.
Realtors
meet the requirements for Chryslers On the Job Program,

which means theyll also receive with their purchase or lease, at no charge, a
two-year service agreement that includes eight oil changes (including diesel),
lube, and lter, a value of $300.
All told, Realtors
enjoy an estimated $800 benet. Thats a sixfold return

on your annual NAR membership dues!
After you negotiate your purchase, you must present the dealer with a
copy of your current-year NAR membership card and photo identication.
Print a copy of your 2012 membership card at memberguide.REALTOR.org.
Visit REALTOR.org/Chrysler for instructions and further details.
P O L I T I C A L A D V O C A C Y
Louisiana Win About More Than Transfer Taxes
After challenging a statewide transfer
tax proposal in the mid 2000s and sev-
eral local eorts to impose a similar
tax more recently, the leadership of
the Louisiana Realtors
Association
last year acted preemptively and put
a stop to any future eorts to tax the
transfer of real estate.
We were able to beat those
earlier eorts back, but we could see
similar eorts cropping up all across
the country, says Norman Morris,
the associations government aairs
director. So, we decided to be proac-
tive and put together a constitutional
amendment that would prevent these
eorts from coming up again.
The campaign worked. In Novem-
ber, Louisiana voters approved the
amendment to ban transfer taxes in
the state permanently. The association
reached out for help through the My
Realtor
Party initiative, the political

advocacy program that the NAR Board
of Directors created in 2011 to help
state and local associations ght
exactly the kind of battle Louisiana
was taking on.
To tap the nancial and techni-
cal help thats made available, the
Louisiana association completed an
application in which it was asked to
detail what was needed in the state
and what it wanted to do about it. The
application was submitted to NARs
Issue Mobilization Committee for its
input and within a short time the as-
sociation was working with NAR on its
campaign.
Under the plan, the Louisiana asso-
ciation poured its resources into what
it does bestworking with its state
legislaturewhile NAR came in later,
mainly on the ballot initiative.
In Louisiana, an initiative cant
go on the ballot until it rst passes
both chambers of the legislature by
a two-thirds vote, so thats where we
concentrated our eorts, Morris
says. Every single lawmaker ended up
voting yes. The legislative language
was drafted with the help of law rm
Robinson & Cole, whose services NAR
11
makes available through the initiative
at a discount.
With the legislative win, the amend-
ment was put before the voters as a
ballot question in the states Nov. 19
general election. Passage requires a
simple majority51 percentbut it
ended up winning by a whopping 81
percent vote. This is where NARs
help really made a dierence, says
Louisiana Realtors
Association chief
Malcolm Young.
Behind the big win was a consumer
campaign. The state association took
the lead on TV and radio spots, online
outreach, and other facets of a broad-
based media strategy, while NAR and
its consultants focused principally
on grassroots activism, working with
the association on polling and voter
outreach through highly targeted
direct mail.
Polling showed that consumers
supported what the Realtors
were
doing, but there was also the potential
for misunderstanding about the issue.
The campaign focused on the explain-
ing the language of the ballot measure.
People were ready to vote no on
taxes, but on the ballot question they
would be asked to vote yes on the con-
stitutional amendment against future
real estate transfer taxes, so we had to
make sure they understood that.
More than a great victory, the
eort put in place an infrastructure
that the association can tap again and
again as issues arise in the future,
says Young. The association now has a
permanent consumer-facing Web site,
the Louisiana Homeowner Resource
Center, which provides a range of issue
advocacy tools.
An added benet, Young believes,
is the goodwill accrued to Realtors
as a result of the campaign. Its given

[consumers] condence about what
we can deliver, he says. Everybody
we talked to really applauded the
Realtors
for becoming consumer

champions. And the impact on the
associations members was just as
important. In my 17 years in the
industry, Ive never seen our members
so engaged, says Morris. They made
calls, put up signs, gave talksthey
could see how important this was to
their customers and clients.
More Time for
Flood Insurance
Congress at the end of 2011 extended
the National Flood Insurance Program
until May 31 to give lawmakers time to
hammer out a ve-year reauthoriza-
tion. The program is critical to home
buyers in hundreds of markets in
states throughout the country who
need the insurance to get nancing
for their home purchase. NAR has
estimated that 1,300 transactions a
day would be aected if the program
is allowed to expire, which it has ve
times since 2008. A long-term exten-
sion, which passed the House twice
last year but still hasnt gotten out of
the Senate, is essential if the housing
market is to stabilize, NAR says. Look
for more on this as the May 31 deadline
nears. NAR supports The Flood Insur-
ance Reform Act, H.R. 1309, by Rep.
Judy Biggert (R-Ill.), which includes a
ve-year reauthorization. W
NAR Backs Isakson Bill to Replace Fannie, Freddie
The Mortgage Finance Act of 2011, introduced in late 2011 by Sen. Johnny
Isakson (R-Ga.) and expected to be part of the mix as Congress considers
reforming Fannie Mae and Freddie Mac this year, would create a limited-term,
government-chartered secondary mortgage market mechanism called the
Mortgage Finance Agency to replace the two secondary mortgage market
companies. The new agency would focus on the securitization of qualied
residential mortgage loans, but those loans wouldnt be determined based on
the amount of the down payment the borrower puts up, as banking regulators
have proposed and which NAR opposes. Instead, the loans would be based on
sound underwriting principles, which Sen. Isakson and others have said was the
original intent of the QRM when it was made part of the Wall Street reform law
enacted two years ago. Learn more about upcoming eorts to reform Fannie
and Freddie and NARs position in a REALTOR
Magazine video, NAR Gears up

on GSE Reform. Go to REALTOR.org and search for the title of the video.
Voters Concerned about Jobs and Housing
Jobs and housing will be the top two issues in this years national elections, a
poll by NARs consumer-facing Web site HouseLogic nds. Respondents were
asked, What issue area will have the greatest impact on your vote in 2012?
Their answers: Jobs and unemployment, 54 percent; housing, 27 percent; na-
tional security, 8 percent; health care, 4 percent. Read a summary by searching
for poll jobs, housing on REALTOR.org.
Norman Morris, right, government aairs director of the Louisiana
REALTORS Association, worked hard to get the word out about
the need for a constitutional amendment banning real estate
transfer taxes. Support from the My REALTOR Party initiative led
to a landslide victory at the polls.
Real Life
I N C O U R T
Commission Cut Due to Property Description
A brokerage lost out on a part of its commission after failing to
include non-real estaterelated assets in its description of a
Vermont berry farm in its listing agreement with the seller.
The brokerage listed the property at $1.2 million and mar-
keted it in brochures as a country estate. In addition to having a
two-family residential unit, the property included a farm-stand
store and other farm-related assets. But in the listing agree-
ments property description, the brokerage included only the
property address; it included no information on the non-real
estate assets. The listing agreement also contained a clause
awarding attorneys fees to the prevailing party in the event of
any litigation.
The property sold for $900,000, but the brokerage miscal-
culated its commission and later sought the balance$9,000.
The sellers refused, claiming the brokerage was owed only for
the real estate portion of the transaction.
The brokerage sued, arguing that it had sold the entire berry
farm, including the farming equipment, so it should receive
the full commission. The sellers led a countersuit, alleging
the brokerage had breached the listing agreement by failing to
follow the states license laws. The countersuit included fraud
allegations. The trial court ruled in favor of the brokerage and
awarded it the full commission and attorneys fees. But on the
sellers appeal to the Supreme Court of Vermont, the trial court
decision was partially reversed. The higher court agreed with
the sellers that the brokerage was owed commission only on the
real estate portion of the deal because there was nothing in the
listing agreement that awarded the brokerage a commission on
the other assets. But the court rejected the fraud claim.
The sellers argued that the brokerage oered a too-low
cooperative commission in the MLS, which constituted con-
sumer fraud because it discouraged other practitioners from
showing the property to potential buyers. But the court rejected
this argument. On the attorneys fees, the court ruled that
neither side had prevailed, so neither was owed the fees. W
HAVE A DI LEMMA?
Send your ethics questions
to ethics@realtors.org.
Bruce Aydt, abr, crb,
is senior vice president
and general counsel of
Prudential Alliance,
Realtors
, in St. Louis
and a former chair of
NARs Professional
Standards Committee.
E T H I C S
What to Disclose Amid Multiple Oers?
Question: Wbcn a /isting agcnt bas rcccizcd ma/ti/c oqcrs, ubat can or cant /c disc/oscd to a /aycrs agcnt
Docs tbc Rr+r1ovs
Codc of Etbics say /isting agcnts cant disc/osc tbc dctai/s of tbc otbcr oqcrs an/css a//
artics inzo/zcd arc gizcn tbc samc information
Answer: Article 1 and its Standards of Practice
provide guidance on multiple oers. Article 1 has
two primary obligations. First is the requirement
that R
protect and promote the interests

of their client. Second is the obligation to treat all
parties honestly.
Standard of Practice 1-15 addresses R

obligation in multiple-oer situations: R
,
in response to inquiries from buyers or cooperating
brokers shall, with the sellers approval, disclose the
existence of oers on the property. This Standard
of Practice clearly requires disclosure of the exis-
tence of multiple oers, with the sellers permission,
if a buyer or cooperating broker asks about the ex-
istence of multiple oers. Standard of Practice 1-13
is directed to the issue of disclosure of terms of of-
fers. When entering into buyer/tenant agreements,
R
must advise potential clients of: ... 5)the

possibility that sellers or sellers representatives may
not treat the existence, terms, or conditions of oers
as condential unless condentiality is required by
law, regulation, or by any condentiality agreement
between the parties.
In other words, terms of oers can be disclosed to
competing buyers or their agents by sellers or sellers
representatives unless there are laws or condenti-
ality agreements that specically prohibit that dis-
closure. Condentiality agreements between buyers
and sellers are more common in commercial trans-
actions than in residential transactions. Where state
license laws prohibit the disclosure of terms of com-
peting oers by real estate licensees, parties specify
what permissions their agents have to disclose either
the existence or terms of oers. W
12 REALTOR

Lang McLaughry Spera Real Estate LLC. v. Hinsdale
Supreme Court of Vermont
[ ]
13
Buyers Guide Buyers Guide Buyers Guide
T E C H N O L O G Y
A Filing System Thats Up in the Air
For years, technology experts have talkeu about
how clouu computing will transIorm our abil-
ity to access les on our computers, tablets, anu
smartphones. For real estate practitioners on the go,
the ability to retrieve uocuments anywhere seems
like a proIessional game-changer. But where is this
clouu anu how can you access it: 1he clouu is com-
plex because its true implications Ior business have
not been presenteu, says Mark Lesswing, chieI
technology om cer anu senior vice presiuent Ior the
a1oar Assota1o ov Rvar1ovs
.
Apples iClouu system uebuteu in the Iall oI zo.
Observers say it can bring the same ease oI use to
uocument storage that iPous brought to the music
worlu. Anu its Ieatures expanu on other existing
clouu services like Lropbox that can host uocuments
anu images. Here we explain the key Ieatures oI the
clouu anu its auvantages Ior real estate practitioners.
What is the Cloud?
Essentially the clouu is an online storage system
where, insteau oI saving your uocuments, pictures,
anu even your music les to your uesktop or iPau,
you store them online. Clouu applications are also
available on social networking sites such as Face-
book, which allows you to uploau your photos anu
save them on \eb-baseu servers that make them ac-
cessible to Irienus anu other users. i1unes now comes
with a clouu component that automatically saves
your purchases online, which means you uont have
to back up your music les on a haru urive.
Coogle Locs is another example oI a clouu ser-
vice that enables you to save material on a \eb-
baseu server anu proviues an eBective way Ior
people to share anu euit uocuments.
How iCloud Can Boost
Your Real Estate Game
Apples iClouu system has several practical applica-
tions Ior real estate proIessionals:
b Share the work on marketing materials.
AIter you take listing photos anu uploau them to
iClouu, someone else in the om ce can uownloau
them immeuiately to incluue in a brochure.
b Keep your documents current. You can get
into trouble iI youre not working on the latest
version oI a sales contract or other uocument.
iClouus Locument Sync Iunction allows you to
access the right uocuments Irom your laptop,
iPau, or smartphone. In auuition, you can set user
permissions to allow other users to access these
uocuments.
b Upload listing presentations. \sing the Air-
Play application, you can save your listing pre-
sentations anu show them on an iPau or on any
television connecteu to an Apple 1V.
Another iClouu service protects you in case you
lose your iPhone or iPau. Install the Iree app calleu
Finu My iPhone on either your tablet or smart-
phone. 1hen, iI your uevice is missing, log into
your iClouu service Irom your uesktop or laptop,
anu it proviues the location oI the lost item. 1o use
iClouu, Mac users must have the latest operating
systems, iOS anu Mac OS X Lion, on their iPhone,
iPau, anu computers. 1he company proviues CB
oI storage Iree oI charge. Larger storage packages
start at Szo a year Ior CB. Lont have a Mac:
1he iClouu service is also compatible with \in-
uows Vista anu \inuows ; PCs. W
THREE QUESTIONS TO ASK
WHILE PRINTER SHOPPING
1. How much am I willing to spend? You can nd inexpensive (i.e., less
than $100) printers fairly easily. But to get better print quality and more features,
be prepared to spend at least $150. For an o ce with high print volume, products
can run from $500 to $1,500.
2. How will I be using it? If the primary purpose of your printer is admin-
istrative in naturefor example, for forms and other documentsthen you wont
have to worry too much about print quality. However, if youre planning to produce
marketing materials, then youll want to pay more attention to concerns like color
resolution and ink. Also, consider whether you want the scanning and copying
capabilities that a multifunction printer oers.
3. Will I use it with multiple devices or in the eld? If you plan to
print from a tablet or laptop without a USB cable or if youll need to print documents
away from the o ce, a portable printer might make the most sense.
For more information about the products in this category, be sure to read our online
Buyers Guide. Go to RealtorMag.REALTOR.org and search for 2012 printers.
MORE ONLI NE
Learn about other
cloud services. Search
for In the Clouds at
RealtorMag.REALTOR.org.
Real Life
14 REALTOR

MORE ONLI NE
Learn more staging tips
at REALTOR Magazines
Styled, Staged & Sold blog.
http://styledstagedsold
.blogs.realtor.org
H O M E
Put Your Best Features Forward
Your sellers may be covering up some of their homes best featuresliterally. In your listings, dont let clutter
or poor design choices lessen the appeal of subtle selling points such as upgraded kitchen countertops, re-
places, and built-in shelving units. Staging can put these features in the spotlight during showings.
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Roomy Kitchen Countertops
Stage a kitchen so that it shows o counter space.
Stager Anthea Click of Fresh Perspectives in
Nashville oers three tips for countertops.
b Put extras away. Have no more than three ap-
pliances on the countertopseven fewer if the
counter space is small. Remove extra items such
as knife blocks, phones, and baskets, which will
make the countertops look smaller than they
really are.
b Highlight. If the home has a center island, make
it a focal point with greenery, such as an orchid,
or a bowl of fresh fruit. If the island is big enough,
have place settings on display with up to three bar
stools. If the kitchen doesnt have an island but
theres space for one, bring in a portable one to
add counter space.
b Add color. Try placing kitchen canisters on the
counter for color, interest, and balance.
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Hot-Selling Fireplaces
Fireplaces are on many buyers wish lists. But dated and dingy replaces can be a
turno. These tips for staging replaces are om real estate pro Tori Lynn Wallitsch
of Alliance Real Estate and Ross Designs Home Staging in Omaha, Neb.
b Accessorize. Try colorful artwork or a mirror hanging over the replace.
Use accessories sparingly on the mantel. For example, try greenery arrange-
ments or a decorative plate on a stand in the center of the mantel. Or display
three candlesticks of diering heights, a vase, or smaller accessories on one
side and leave the other side clear. To attract buyers eyes to the replace,
try placing a colorful plant on the oor along the replaces corner edge.
b Modernize. Remove dated brass screens. By spending $200 or so to replace
the old screen with a new black or bronze version, you can instantly bring a
replace up-to-date. Do-it-yourselfers may opt to paint the brass screen
themselves using black grill or auto paint with a heat-resistant primer.
b Paint. A painted accent wall helps highlight a replace, bringing out the
wood color and any of its architectural details. Try earthy, creamy tones for
the accent wall, or choose a paint color two or three shades darker than that
of the other walls to create monochromatic harmony in the room.
b Position. Make the replace the focal point: Angle furniture to either side of
it, or place sofas perpendicular to it. Dont block the replace with furniture.
BEFORE
15
CHECKLIST
4 Quick Tips for
Prepping a Home for Sale
Real estate pro and stager Barb Schwarz, founder
of the International Association of Home Staging
Professionals, recommends some of the following
general staging tips in prepping homes for sale.
1. Super clean. Make the house shine from top to bottom. Dont forget
about cleaning the carpet, draperies, and windows, too.
2. Clear the clutter and unload some furniture. Remove unneces-
sary items from countertops, bathtubs, and shower stallsareas that
often attract the most clutter. Keep only the necessities. A decluttered
home helps buyers mentally move in with their own things. You may
need to rearrange or remove some furniture. Pieces that crowd a space
can make it look smaller than it really is.
3. Prep your landscaping. Check gutters and roof for dry rot and moss,
and ensure they are clean. Examine all plants: Prune bushes and trees,
make sure no plants are blocking windows, remove any dead plants, and
keep the lawn freshly mowed.
4. Add nice touches. Coordinate towels in the bathroom in one or two
colors only. Keep accessories restricted to groups of one, three, or ve
items. Make sure all lights and lamps are on for showings, and set an
inviting mood: Have soft background music turned on (such as light
FM music).
Spacious Built-ins
Built-in bookshelves help feed another common buyer
craving: the desire for extra storage. Dont let sellers clutter shelves.
Stagers Heather Cook and Alana Merritt of Rooms in Bloom
oer tips for staging bookshelves and wall units.
b Accent key colors. When selecting knickknacks to display, look to the
rooms color palette for inspiration. Select items that bring out colors in the
pillows or wall art.
b Balance. To create a cohesive feel, all items should have similar visual
weight, as either a group or a stand-alone piece. For example, hardcover books
of similar sizes can provide the necessary structure and height needed to ll
out the shelves and balance out small artwork or mirrors on the other shelves.
While the bulkiness of the accessories should align, their height can vary to
create an appealing, natural look within the shelves. Other good picks for
staging shelves: Small-scale framed art, mirrors, candles, and small pots of
greenery or owers.
b Prioritize. Focus on the shelves at eye level rst. The shelves above and
below eye level shouldnt be empty, but they dont have to be lled to the
same degree.
By Melissa Dittmann Tracey W P
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Dont Cover up Unique
Home Features!
A wood-burning stove tucked away in the corner of
a 100-year-old home became a selling asset with the
help of stagers Heather Cook and Alana Merritt,
co-owners of Rooms in Bloom Home Staging & Design
Inc. in Kitchener, Ontario. Cook and Merritt cleared
away the clutter and changed the original distracting
orange hue to a so neutral with green undertones,
which brought out the stoves wood casings, the oors,
and architectural elements of the space. The room
was then staged around the stove to make it a feature
instead of an obscured object in the space, Cook says.
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16 REALTOR

Retailing at
the Crossroads
The continued growth of online sales is changing the look
and size of retail spaces and tenant mixes. By Mariwyn Evans
Understanding the impact of online sales is an im-
perative for retail business owners. While overall
retail sales grew 7.2 percent in the year ending Oc-
tober 2011, according to the U.S. Census Bureau,
e-commerce retailing has made double-digit leaps
every month during that period, says Abigail Rosen-
baum, economist with CBRE Econometrics in Cam-
bridge, Mass. E-retailing sales are also rebounding
from the downturn faster than bricks and mortar, she
says, with sales gaining 13.7 percent between the third
quarters of 2010 and 2011. Much of that gain has come
in what Rosenbaum terms discretionary categor ies
such as books, clothing, music, and sporting goods.
Yet, there are still categories in which bricks
and mortar prevail. One secure niche: luxury prod-
ucts. Luxury is still all about the experience, says
Naveen Jaggi, senior managing director for CBRE
Retailer Representation in Houston. When you buy
a luxury item, the service, the stores appearance, the
lovely packaging, and the refreshments served are all
part of the purchase, he says.
Your decision to shop online or o ine is based
to some degree on how convenient o ine shop-
ping is for you, says Barbara Kahn, director of the
Jay H. Baker Center for Retailing at the University
of Pennsylvanias Wharton School. She points to
a study by her Wharton colleagues David Bell and
Len Lodish that found shoppers physical environ-
ment and proximity to aordable retailers aects
their online purchasing habits.
Consumers need for quick and frequent access
has protected grocery stores from signicant online
competition. To be protable, online grocers need
high population density to make the delivery pro-
cess more e cient. But this is the case in relatively
few U.S. markets today. One model gaining atten-
tion involves the grocery kiosks set up by British gro-
cer Tesco in subway stations in Seoul, Korea. Shop-
pers waiting for trains use smart phones to scan and
buy grocery products, which are delivered to pick-up
points the same day.
From Big Box to Mini
Online competition has been a factor in retail down-
sizing. The biggest trend in retailing today is the
shrinking of store footprints to lower retailers oc-
cupancy costs, says Mez Birdie, , , direc-
tor of retail & investment services at NAI Realvest
in Orlando, Fla. He points to new concepts like the
10,000 to 15,000-square-foot Walmart Express, as
well as the scaling down of the Walmart Supercenter
concept from an average of 180,000 square feet to
the new 105,000-square-foot prototype, as well as
Staples decision to drop the average size of a store
from 25,000 to 16,000 square feet.
Smaller size makes smaller markets more fea-
sible and protable for national retailers, says Marla
Chali, , senior vice president of The Trilogy
Group in Atlanta. If a retailer cant nd the deal it
wants in a major city, it can opt instead for a prime
location in a secondary market, she says. For exam-
ple, Sears is rolling out an 8,000-square-foot Home
Town Store in markets with populations of around
25,000, says Samuel Fung, , principal of Oregon
Commercial in Medford, Ore.
Retailers have gured out that stores can serve
more as showrooms for online sales and be eective
CommNews Roundup on page 17
Conversation With Douglas M. Bibby on page 18 Commercial
Melding Online with Bricks & Mortar
At Best Buy, 40 percent of online purchases are picked up by
customers at the store. The advantage for retailers is that
customers may well buy additional merchandise there.
C O M M N E W S R O U N D U P
Why Invest in Commercial Real Estate?
Need a smart resource
to educate potential
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more about the com-
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begins by spelling out the
principal benets of buy-
ing commercial property:
cash ow, appreciation,
tax deductions, and ina-
tion hedge. Under each
section, author Nicholas
Dunlap, cpm, vice presi-
dent of Dunlap Property
Group, AMO, in Fullerton,
Calif., explains such basic
real estate terms as
gross and net income and
depreciation. The second
section focuses on help-
ing investors determine
whether their investment
goals are best suited
for investing for current
cash ow or future ap-
preciation. As I met with
investors, I was amazed
at how many didnt
understand the benets
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investment compared
with other types of invest-
ments. Thats why I wrote
the book, Dunlap says.
The book is available
for $10.99 from
the Institute of Real
Estate Management
(www.irem.org).
Six Keys to a Great Retail Site
On-the-job training is still the primary way real estate professionals develop site se-
lection skills, says Frank Raeon, principal of Location Decision Advisors in Cincinnati.
Thats why Raeon, whos spent 25 years helping retailersfrom McDonalds and
Pier 1 Imports to mom-and-pop storesnd the perfect spot to do business, decided
to write The ABCs of Site Selection ( Xlibris Publishing, 2010). In the book, Raeon
synthesizes the art and science of site selection into a six-step analysis of key criteria
he calls PASTA V.
P is for parking. Little or inconveniently located parking can be the kiss of death
for a retailer. Most retailers want four or ve spaces for every 1,000 square feet of
oor area. As many spaces as possible within 100 feet of the door is desirable.
A is for access. Todays customer demands convenience, so having more than one
way to enter or leave a store is preferable. Avoid sites that require turns across
medians, which prevent cross lane turning.
S is for signing. Signs play a critical role in business identity and in helping cus-
tomers nd a business. A retailers facade sign should be visible from at least 200
feet away.
T is for tra c. Whether vehicular or pedestrian, every site needs tra c to prosper.
Prime areas are located near intersecting streets with tra c lights. Streets with
slower speed limits make it easier for drivers to see signage.
A is for activity. Unless a retail business is strictly destination-oriented, a site
must have a good amount of diverse, nearby activity to draw shoppers to an area.
Grocery stores, gas stations, post o ces, and schools all bring people to an area
frequently.
V is for visibility. No site selection factor is more important. Watch for bar riers
such as trees or downward slopes that block long-distance views of a site.
Applying these basic site selection principles will enable commercial practitioners to
establish their reputations as site selection experts and help their clients succeed. W
at half their size, says Peter Colvin, broker with
Sperry Van Ness Silveri Co. in Grand Rapids, Mich.
Many retailers have found that increasing square
footage didnt increase sales. That makes the small-
size trend likely to continue even amid an improv-
ing economy. Retailers who broke up brandslike
Gap and Gap Baby and Gap Kidsare also reduc-
ing space use by reconsolidating, notes Je Green,
CEO of Je Green Partners, a retail consulting rm
in Phoenix. Stores are also shaving space by leasing
kiosks within their existing retail space, says Chal-
i. She points to Starbucks units in Kroger grocery
stores as an example. Its a win-win, she says, because
the partnership lowers the risk for the kiosk retailer
and provides income for the principal lessee.
A Need for the New
Retail experts say fresh concepts would be welcome
these days as theres a lack of newness in the retail
space today, says Jaggi. Most retailers are sticking to
the tried and true. Theyre improving, not reinvent-
ing, he says.
What new concepts there are often center on
value, led by such rapidly expanding retailers as
Family Dollar, Dollar Tree, and Dollar General.
Value-chic retailers like Forever 21 and H&M are
also making gains, as are thrift and resale stores like
Goodwill and Savers, says Jim Rosen, , vice
president, brokerage for Pace Properties in St. Louis.
Another notable trend propelling retail expan-
sion is the desire for healthier food, says Green.
Smaller produce-heavy and organic groceries like
Sunower are snapping up 20,000 to 25,000-square-
foot boxes vacated by former retail giants like Cir-
cuit City and Borders.
Finding Ofine-Online Balance
Perhaps the biggest change in online versus o ine
purchasing today is that the two are no longer ad-
versaries. Says Kahn: Shopping is becoming more
omni-channel, with each person deciding what com-
bination of online and o ine works best.
Retail properties are also nding that online buy-
ers are their best customers, says Jane Lisy, senior
vice president of marketing for Cleveland-based For-
est City Enterprises, a national real estate company
focused on the development and management of re-
tail properties. A company survey of shoppers in the
companys malls found that those who shopped both
online and o made more frequent visits to the shop-
ping center and spent more per visit than shoppers
who bought exclusively online or in a store.
Social media, especially accessed through mobile
phones, has also assumed an increasingly important
role in marketing in-store sales. A summer 2011
17
>>>
18 REALTOR

C O N V E R S A T I O N W I T H D O U G L A S M . B I B B Y
Expect Gradual Changes at Fannie & Freddie
Despite much legislative attention to government-sponsored enterprise reform, as evidenced by the three dozen Congres-
sional bills dealing with Fannie Mae and Freddie Mac introduced in 2011, none had made it out of full committee by early
December. Furthermore, action on GSE reform is unlikely before the 2012 elections, says Douglas M. Bibby, president of
the National Multi Housing Council in Washington, D.C., an advocacy organization for the apartment industry. Bibby, who
also spent 16 years as a senior o cer at Fannie Mae, says the Federal Housing Finance Agency, now the conservator for the
GSEs, may level the playing eld in the mortgage market by administrative actions.
What kind of action do you think
the FHFA will take before the
2012 elections? What weve heard
is that the conservator may adjust
the pricing for Fannie Mae and Fred-
die Mac. If these agencies are pric-
ing themselves under their private
competitors, they can adjust their
prices to be competitive or even
higher than their competitors. Also,
the regulator can raise Fannie Mae
and Freddie Macs capital require-
ments, making it more costly for
them to do business; stie product
innovation, which is to say put
limits on the kinds of loans they can
nance; and put Fannie and Freddie
employees on the government pay
scale, which would drive people
out of these agencies, or require
Treasury Department approval for
any new debt issuances.
Among the possible scenarios
suggested in the Obama admin-
istrations February report to
Congress on GSE reform was
complete privatization of the
mortgage market. Do you think
this will happen? It would be an
enormous task, as the two entities
have over $5 trillion in assets on
and o balance sheets. Ironically,
though, theres been some talk
among policy makers of spinning
o the multifamily operations
of Fannie Mae and Freddie Mac,
and I know that some Wall Street
rms have been asked to opine
on whether or not this would be
feasible and sensible. Although
privatizing Fannie and Freddie
could take as long as ten years,
privatizing the multifamily business
alonewhich is worth billions of
dollars, not trillions like the single-
family businesswould be quicker.
At this point, it is too di cult to
predict whether or not privatiza-
tion, even of the multifamily side,
will happen. The private market
must demonstrate that it has the
willingness, capacity, and staying
power to serve the full breadth of
nancing needs across all markets
and in all economic climates.
The private sector would have to
replace the $30 billion to $40 bil-
lion that Fannie and Freddie provide
annually in multifamily nancing.
Whats the potential impact
on aordable housing? Should
Fannie and Freddie be privatized,
there is a strong sentiment among
policy makers that the GSEs af-
fordable housing goals got them
into trouble, so any changes to their
charters would likely not incorpo-
rate aordable housing mandates.
Advocates for aordable housing
are nervous that they would lose
a valuable resource for getting
aordable deals done in any recast-
ing of the GSEs.
If Fannie and Freddie are priva-
tized, what do you think will hap-
pen to interest rates? First of all,
we believe that the resolution of the
debt crisis, despite the Feds cur-
rent focus on keeping rates down
to speed the recovery, eventually
will send interest rates higher.
Secondly, whatever changes are
made at Fannie and Freddie, debt
nancing through these agencies
will cost more.
Could the FHA pick up some of
the slack for Fannie and Freddie
either now or in the future? The
FHA is already handling ve times
the normal volume for construction
nancing for the multifamily mar-
ket. The agency cant increase its
sta. They have to wait until some-
one retires or leaves, so they cant
change their regional o ces in any
meaningful way. The FHA was the
lender of last resort for borrowers
who couldnt nd other nancing.
But when banks left the market in
2008, many high-quality [multi-
family] borrowers ooded the FHA
with loan requests, and even today,
the agency is drowning under the
volume. By Hortense Leon W
>>> survey published by Chain Store Age found that
53 percent of retailers planned to use opt-in propri-
etary databases and social media to reach out to cus-
tomers over the next 12 months. Specialty retailers,
such as apparel stores, were most likely to use data-
bases; home improvement retailers opted for contact
on Facebook.
Mobile phones that let retailers pinpoint your lo-
cation [using an opt-in feature] and provide product
information instantly through QR codes are chang-
ing the nature of shopping, says Kahn. Shoppers may
also be able to see who else is in the store and con-
nect immediately. Its shopping and entertainment
melded together, she says.
The next challenge in mobile marketing: nd-
ing ways to connect and cross pollinate between
the shopping centers and the retailers social media
eorts, says Lisy. Forest City Enterprises recently
launched a new version of its Shoptopia network,
which integrates a centers and retailers social media
feeds. Customers can view store information on a
local and national level through the Internet.
Retail landlords are the natural aggregators of
lifestyle and brand, Lisy says, and social media pro-
vides a way to enhance value for both retailers and
retail owners by linking the two. W
24 REALTOR

The Year Ahead
Whatever your specialty, you can fnd opportunities for business growth.
Slowly, a recovery seems to be taking hold. More jobs,
rising rents, a rising stock market, and continuing high
afordability conditions are combining to get more
people into the market, says NAR Chief Economist
Lawrence Yun. On the commercial side, all the major
sectors are seeing improving fundamentals, and more
positive trends are expected in 2012. Against that back-
drop, we asked some of you to tell us what you expected
to be your best source of business this year.
Residential
With prices expected to rise slightly in both existing-
and new-home sales in 2012, buyers may not get quite
the same bargain they got last year. Still, conditions
remain favorable for buyers, and NAR is forecasting a
5 percent increase in existing-home sales over 2011.
Here are three pockets of opportunity.
1. International investment. With U.S. real estate
values down, a favorable currency exchange rate, and
the promise of a stable place to invest while Europe
deals with debt crises in Greece, Spain, Italy, and other
countries, foreign buyers continue to stream steadily to
the United States.
People [are trying] to move their cash some-
where safer, says Brian Block, broker-associate with
RE/MAX Allegiance in Arlington and McLean, Va.
Elaine Murphy Carlson, a broker-associate with
RE/MAX Palos Verdes Realty in Palos Verdes Pen-
insula, Calif., says foreign investors who stayed away
during the darkest days of the fnancial crisis are com-
ing back. Indeed, NARs 2011 Profle of International
Home Buying Activity shows foreign households
bought $82 billion worth of residential real estate last
year, up from $66 billion in 2010.
Block says the investors he works with are profes-
sionally successful individuals with cash available.
They will buy when they see a good deal, he says.
He has gained investor business by demonstrating a
solid knowledge of the market and fnding networking
opportunities, from local Chamber of Commerce
meetings to regular real estate industry functions.
2. Distressed inventory in centrally located neigh-
borhoods. Afordable housing in inner-ring suburbs or
center city areas may be real estates sweet spot in 2012,
Block says, because buyers today arent looking just for
bargains, theyre looking for convenience and lifestyle
amenities. A 2011 survey of U.S. adults conducted for
NAR by research frm Belden Russonello & Stewart
seems to support Blocks assertion. Nearly six in ten
adults (58 percent) said theyd prefer to live in a neigh-
borhood with a mix of houses and stores and other busi-
nesses within an easy walk.
Block says he has seen frst-hand the shift among
both frst-timers and retirees toward smaller, close-to-
the-city homes in walkable neighborhoods. He reaches
out to potential clients by using social media and blog-
ging to talk about issues like lengthy commutes.
3. Rentals. Rising rental rates in many markets are
making home ownership a more appealing option, es-
pecially for those seeking to buy distressed property.
But many households arent fnancially ready to buy,
either because of credit dings or the continuing overly
tight credit restrictions of lenders. Others are waiting
to make sure home prices have bottomed out. Thats
why many real estate companies have shifted their busi-
ness model to include rental and property management.
Bill Bloomberg, broker-owner of Distinctive Rental
Homes in Eden Prairie, Minn., opened his business in
2011 with high-end rentals as his central focus, provid-
ing assistance to both renters and owners who choose
to rent rather than sell their property.
Bloomberg, who has nine years of experience work-
ing in conventionalreal estate sales, says helping own-
ers fnd tenants is a great way to retain clients who
might otherwise have turned to another real estate
professional.
If a listing isnt selling, its usually because of price.
However, most owners are going to try to switch to an-
other agent frst to see if that will make a diference,
Bloomberg says. Presenting an option such as renting
can prevent that from happening.
And when owners opt to rent their property rather
By Robert Freedman and Nichole Odijk DeMario
RealtorMag.REALTOR.org January/February 2012 REALTOR
25
The Year Ahead
Whatever your specialty, you can fnd opportunities for business growth.
than sell it, they may be providing a unique opportu-
nity, helping renters get one foot into a neighborhood
thats currently beyond their buying power, says Gina
Chirico, sales associate with Lattimer Realty in Fair-
feld, N.J.
To attract rentals and tenants, Bloomberg says, he
keeps up with sites that renters frequent such as Craigs-
list and syndication sites such as ListHub, Postlets, and
vFlyer. He also relies on referrals, listings bringing oth-
er listings, and basic cold calling.
As long as wages go down, traditional homes sales
will sufer, Bloomberg says. People say Im pessimis-
tic, but understanding how the economy works has
helped me make the adjustments I needed to make it
in my business. Another plus, he says: Rentals are less
stressful than sales.
Meanwhile, Bloomberg recognizes that todays
renters could well become buyers of the future. The ma-
jority of renters (63 percent) say they are at least some-
what likely to purchase a home in the future. Among
them, young adults (age 18 to 24) have the strongest
aspirations for home ownership, according to an NAR
survey of 3,793 adults conducted by Harris Interactive
and released in January 2011.
Commercial
All of commercial real estates main sectorsofce, in-
dustrial, retail, and multifamilybegan improving last
year, but a solid turnaround is still another year away at
least, according to Yuns research. Heres a look at what
to expect in each sector.
Ofce. The ofce sector is seeing improving funda-
mentals, particularly in larger metro areas, with ab-
sorptions this year expected to be twice that of com-
pletions. Yun is forecasting vacancies in 2012 to drop
from 17.3 percent this year to 16.3 percent next year and
15.9 percent in 2013, with the 2011 median rental rate of
just under $28 per square foot, increasing 1.7 percent in
2012 and 2.4 percent in 2013.
Greg Schenk, sior, of The Schenk Co. Inc., in Co-
lumbus, Ohio, says hes capturing business in todays
climate by encouraging clients to think about renew-
ing their leases well before they come due so that they
can take advantage of todays attractive interest rates.
Its also a good time to negotiate on behalf of tenants
with building owners who need to refnance the debt
on their building, because theyre looking for long-term
leases that will put them in a stronger position with
lenders. Under such conditions, owners who arent will-
ing to ofer a favorable renewal deal risk losing tenants.
I just helped a small retailer by showing the owner
there were 10 other places within a mile that would ft
the tenant, says Schenk. The landlord said, Look,
you already have this renewal option for x amount, so I
showed him the other properties that would pay for the
tenant to move and reduce the rent 30 percent. We got
the landlord to reduce the lease by 15 percent, my client
didnt have to move, and they extended for fve years.
Industrial. Warehouses, distribution centers, and
manufacturing plants on a national basis are also see-
ing strong absorption. Its now three times as high as
completions. Even so, Yun expects vacancy rates to rise
for another year, from about 11.1 percent to 11.9 percent
next year. Thats because there remains slack in the
market. Vacancies should drop back down to 11.1 per-
cent in 2013. The rental rate, at a median of $4.60
2010 2011* 2012**

Economic Indicators
U.S. gross domestic product 3.0% 1.7% 2.5%
U.S. Consumer Price Index 1.6% 3.1% 2.2%
U.S. unemployment rate 9.6% 9.0% 8.6%
Interest Rates
Federal funds rate 0.2% 0.1% 0.1%
30-year fxed mortgage rate 4.7% 4.5% 4.5%
One-year adjustable mortgage rate 3.8% 3.0% 2.9%
Housing
Existing-home sales
Total sales (in millions) 4.90 4.97 5.22
Median price $172,900 $165,200 $168,200
Change in price 0.2% 4.4% 1.8%
New-home sales
Total sales (in thousands) 322 303 352
Median price $221,000 $224,300 $230,100
Change in price 2.0% 1.5% 2.6%
Afordability index 174 192 183
Inventory
Housing starts (in thousands) 585 595 665
Existing homes (in millions) 3.22 2.98 2.62
Source: NAR Research *Estimated **Projected
>>>
26 REALTOR

per square foot, will rise 1.8 percent in 2012 and
2.34 percent in 2013.
David Murphy, ccim, sior, of CB Richard Ellis in
Orlando, says hes reaching out more to e-commerce
companies looking to expand their warehousing and
distribution capabilities and to m-commerce compa-
nies, e-commerce companies that focus on consumers
who make purchases on mobile devices.
Tenants today are more comfortable signing
longer-term leases, he says. Two or three years ago,
they only wanted to sign leases for 18 months, but
theyre more comfortable today with where their busi-
ness is going. So were seeing more three-, fve-, and
even 10-year leases, and they can get really attractive
rental terms. Whenever we close a deal with one of
these companies, he adds, we pull that companys SIC
code [a federal standard industrial classifcation code
for categorizing business types], and well reach out to
companies in the same feld and say, Hey, we just rep-
resented a company that had a requirement similar to
what you might have and were available to assist you in
your real estate needs.
Confdence in the business climate is creeping back
into his central Florida market, among both building
owners and tenants. That means negotiations are be-
coming more tactical, with neither side having a mar-
ket advantage, particularly for deals involving larger
properties. We have very little inventory in properties
of 100,000 square feet or above, he says.
As with the ofce market, because properties with
long-term leases are more bankable, says Stuart King-
ma, sior, of NAI Wisinski of West Michigan in Grand
Rapids, he can help both tenants and owners get what
they want by negotiating favorable rates for the tenants
in exchange for a strong long-term lease. We see how
lenders are solving issues on a broad front, and the in-
formation gathered from that experience allows us to
assist clients with an individual issue, says Kingma.
Retail. Although sales picked up during the 2011
holiday season, retail continues to struggle the most
as consumers continue to retrench on their spending.
Yun is forecasting vacancies to rise from 11.1 percent to
12.2 percent next year before dropping to 11 percent
in 2013. The rental rate, at just under a median of $19
a square foot, is projected to rise 0.7 percent next year
and 1.4 percent in 2013. Absorption could pick up if
theres improvement in the dollar volume of retail sales,
which remains below its pre-recession peak.
Palmer Bayless, ccim, of Emerge Real Estate Ser-
vices, in Roswell, Ga., outside of Atlanta, leverages so-
cial media to help communicate his expertise in locat-
ing and negotiating retail deals and build his brand as
a specialist with his two high-profle clients, Starbucks
and Pet Supermarket. The frst thing every potential
client does before working with you is to Google your
name, he says. So he maintains a high-profle presence
on LinkedIn and writes about retail real estate strategy
on his blog. By covering topics such as signage, demo-
graphics, and trafc patterns, hes able to demonstrate
his grasp of market and showcase his transactions. It
ultimately comes down to the relationships, not social
media, but this gets my name out there, he says. (For a
more in-depth look at retail trends, see page 16.)

Multifamily. Apartment rentals are once again ex-
pected to be the best-performing commercial sector.
For the second year in a row, absorption of existing
units is far outpacing completions of new units: Almost
170,000 units were absorbed in 2011, against comple-
tions of about 38,000 units. In 2010 the spread was even
wider. As a result, vacancies continue to dropand rental
rates continue to rise.
Yun is forecasting multifamily vacancies to drop
to 4.6 percent in 2012 from 5.3 percent this year, and to
drop to 4.5 percent in 2013. The rental rate, at a median
of $1,066 per unit, is expected to increase 3.5 percent
next year and 3.8 percent in 2013. W
2011* 2012** 2013**

Commercial Markets
Ofce
Vacancy rate 16.6% 16.3% 15.9%
Rental rate change 1.4% 1.7% 2.4%
Net absorption (sq. ft. in millions) 20.2 31.8 53.0
Industrial
Vacancy rate 12.4% 11.9% 11.1%
Retail
Vacancy rate 12.9% 12.2% 11.0%
Multifamily
Vacancy rate 5.4% 4.6% 4.5%
Net absorption (units) 238,398 126,621 102,687
Source: NAR Research * Estimated ** Projected
Best Year Ever!
Real Estate Today, the
radio show about all
things real estate, is
opening the year with
a series of shows
devoted to helping
sellers, buyers,
property owners, and
investors make 2012
the best year ever.
The weekly two-hour
show is broadcast in
165 markets and in all
50 states. To embed
the free audio player on
your Web site, visit
www.retradio.com.
>>>
man
of the people
28 REALTOR

29
This is my Miami, Moe Veissi
cheerfully banters, surveying the citys vertical con-
tours from across Key Biscayne Bay. I built these
[buildings] in my spare time on the weekends.
While no one is quicker with a quip than Veissi,
his underlying pride in the city is easy to understand.
A Miami resident since his family descended on the
sleepy enclave from Cicero, Ill., in 1948 when he was
2, Veissi has seen the city blossom from a culturally
isolated backwater to a major international megalopo-
lis. Theres no better place in the world. I love being
here, says Veissi, looking out at the glistening skyline
from one of his favorite local restaurants, the landmark
Rusty Pelican.
Its a rare treat these days for Veissi, the 2012 presi-
dent of the National Association of Realtors
, to
linger for more than a long weekend at home thanks
to a grueling schedule that keeps him on the road two
to three weeks per month, conferring face to face with
Realtors
across the country.

And while Veissi, who turns 66 on Jan. 30,
is perfectly at ease texting, e-mailing, or video
chatting on Skype, he much prefers meeting
people face to face. Whether its in a ballroom
with thousands of attendees or in a conference
room with just a handful of folks, he is, at the
core, an emotional connector. People will
forget what you said, people will forget what
you did, but theyll never forget how you made
them feel, he says, citing poet Maya Ange-
lous wisdom as central to his values system.
The exuberance that defnes his leadership style
helps explain Veissis success in business as well as his
steady trajectory through the local and national real
estate association ranks. He became president of his
local boardthen known as the Coral Gables Associa-
tion of Realtors
in 1981, six years after he opened

his own brokerage, Veissi & Associates, which handles
everything from land acquisition to residential sales.
As he became increasingly known and respected at the
local and state level, Veissi was elected president of the
Florida Association of Realtors
in 2002 and named

the states Realtor
of the Year in 2003.

More than 40 years since he opened the business,
Veissi and his wife Matey (pronounced mate-ee),
of the people
Using his communication gifts
to connect with members,
2012 NAR President Moe Veissi
offers guidance through
tumultuous markets.
By Wendy Cole
>>>
30 REALTOR

a former college political science instructor who is now
co-owner of the brokerage, have weathered the areas
signifcant downturn and are thriving by juggling a
mixture of distressed and conventional sales. There
are a lot of opportunities here now. Theres been a lot of
international investor interest here over the past year,
especially from Latin America and Europe, Veissi says.
Veissi has been an afable but ferce competitor since
his high school football days, when he became known
as Moe. My coach said he didnt want a defensive tack-
le named Maurice, Veissi says. So he started calling
me Moe and it stuck, though my parents never liked it
and refused to use it. Always big and loud as a kid,
Veissi says he was never the sort who merely blended
into the pack on the defensive lineor anywhere else:
I called the plays on behalf of the linebacker because
people could hear me better.
No challenge ever seemed too daunting to Veissi.
When 2008 NAR President Dick Gaylord asked Veissi
to be his RPAC fund-raising chairman, Gaylord had a
very specifc mandate: Raise $10 million. Never mind
that real estate markets were tanking in many parts of
the country and that no RPAC chair had ever raised
more than $7.3 million in any year. Veissi, who says hes
much less motivated by the idea of winning than by
not losing, took on the job and raised $10.3 million.
How'd he do it? We went out and touched people,
he says. You can be a guru of electronic communica-
tions and send out as many postcards and e-mails as you
like, but in the end success is about emotionally con-
necting with people in the room, whether its 150 people
or 1,500.
Taking on Your Issues
Veissis gift for connecting will be critical in the year
following approval of a $40 national dues increase,
dedicated to strengthening NARs advocacy muscle.
For him, the need was right and true: If you dont have
a strong advocate, someone who cares about you and
your business, youll wither and die. And hes not re-
ferring merely to his own role as president. I work as
a team with my upcoming presidents, vice presidents,
CEO, and 15 liaisons to NAR committees, as well as
others who are active in committees. Its the leadership
team structure that enables us to be efective on the
members behalf, he says. When members question
the approach, I remind them they pay for insurance for
their car, boat, or home. This is inexpensive insurance
on their business.
Veissi is intent on ensuring that members get the
greatest possible beneft from their investment with the
association. His video podcast Mondays With Moe
lets members stay up-to-date not only on NAR politi-
cal initiatives but on other programs, products, and ser-
vices the association provides. I dont want people to
view us as a group of elitists looking to promote our own
agenda. Our agenda is the members' agenda, as well as
that of future and current property owners.
Lucky to Have Him
Veissis close friend R.J. Collins, a former Florida Asso-
ciation of Realtors
president who worked with Moe

to help overturn a proposed sales tax on services in the
state, says the new presidents strong communications
skills will serve NAR members extremely well. Hes
one of the best communicators Ive ever met. That,
along with his legislative strengths, will surely make a
diference for members, Collins says. Another friend,
Tom Salomone of Coral Springs, Fla., who will serve as
vice president and director of Realtor
Party Activi-
ties in 2012, agrees that Veissis member-driven focus is
a hallmark trait. His core values are honesty, integrity,
passion, and commitment. Were lucky to have him in
this position.
The presidents theme for 2012, Realtors
are the
heart of the deal, should resonate strongly with mem-
bers, as it applies on several levels. I want to make sure
Realtors
stay in the center of any transaction. I also

know that Realtors
have a heart. They are going to

hold peoples hand. They have almost a familial role
with their clients, he says.
Veissi possesses a strong belief that NAR needs to
Veissis biggest
coup, he says, was
getting wife Matey
to join him in the
business in 1981.
>>>
31
Reserve. Although he reunited with his own parents
as an adult, Miguel will always be part of our family,
Veissi says.
Veissi, the younger of Ella and Jack Veissis two
children, says his parents were extremely tolerant and
open-minded people, well ahead of their time, enroll-
ing Veissi in one of Miamis few racially integrated
public high schools in 1960. His father Jack had moved
to the United States from the Tuscan region of Italy as
a child. When Veissi was 2, the family left Illinois for
Miami because my dad hated the winter. Jack, who
had worked in factories, managed tourist shops when
he got to Florida. My family valued loyalty. We were
very emotional. There was a lot of yelling and hugging.
We were the kind of people who cried over a great
meal, he says. Though he jokingly credits his elder sis-
ter Jacqueline with inheriting the bulk of the genes for
intelligence in his family, Veissi proudly graduated with
a business degree from Florida Atlantic University,
where he met Matey during a political science class.
Veissis entrance to real estate was precipitated by his
parents passing. My mother died when I was 18 and my
father died when I was 20, and there were a lot unpaid
medical bills, he says. I felt obligated to take care of
the debt, so I got my real estate license when I was 21.
He worked for the next four years for two Florida land
development companies. I learned a lot about the busi-
ness, including what not to do. I became good at read-
ing contracts, he notes. In 1972 he joined a Red Carpet
Real Estate franchise as a salesperson and later became a
manager. He helped grow the edgling business to three
o ces with more than 100 salespeople, but after a few
years Veissi was ready to strike out on his own. Veissi &
Associates frst o ce was a 77-square-foot closet-like
room. His frst client thought the petite space ofered a
distinct advantage. He told me that buyers would have
to go outside to change their mind, Veissi chuckles. His
company eventually grew to three o ces, though he has
scaled back to one in recent years. His biggest coup, he
says, was getting Matey to join him in the business in 1981.
He needed me initially to handle the fnancial end
of the business. Its worked out really well, she says.
Veissis strengths, she says, are bringing people to-
gether and fnding ways to make even the most di cult
transactions work out. He is very intuitive about put-
ting deals together.
And even as he tends to the vicissitudes of his own
business, the business afecting all NAR members is
his greater priority this year. If more people appreci-
ate what the association is doing for them, I will have
done my job. We are here to promote the free exchange
of real estate in this country and around the world. W
be an advocate for not
just Realtors
, but con-
sumers as well. With the
American dream of home
ownership in peril for so
many, he says it is NARs
duty to send a strong
message to lawmakers in
Washington to support
the interests of the vast
majority of taxpayers who
are either home owners
or aspiring home owners. If the [qualifed residential
mortgage] proposal passes, it will take most people
from nine to 14 years to save enough for a down pay-
ment, he says. Thats not okay. The public needs an
advocate.
Despite triple bypass surgery last May, Veissi feels
ready to tackle the challenges ahead. Ive lost 25
pounds and feel much better, he says. I am a food-
aholic, but Ive made changes. No more fast food or
sausages. Veissi wasnt too fazed by the procedure. Its
nothing compared to the fact that he was once, briey,
declared dead, he says. He was 25 years old, and his car
was struck by a drunk driver. I probably wouldnt have
made it, except the driver stopped and agged down
help, he says. Today, Veissi keeps things in perspec-
tive with the help of meditation. Once or twice a day I
make a point to tune everything out for a few minutes,
no matter where I am. Its like self-hypnosis. It helps
with stress reduction, focus, and even sleeping, he says.
Its great for decompressing the mind and body.
Family Matters
What also keeps him centered is having family involved
in his business. Veissi focuses on commercial and land
sales, while Matey gives her full-time attention to the
residential side of the brokerage. Their sons Mallory,
34, and Maurice Jr., 32, have real estate licenses as well
and are involved part-time with sales. Both sons have
outside business ventures as well. Mallory has an infor-
mation technology business and Maurice Jr. is involved
with setting up medical diagnostic centers. They both
have vision and like being entrepreneurial, he says,
avoiding the obvious reference to the apples falling
close to the (family) tree.
When he was 16, Maurice Jr. asked a big favor of his
parents: Could his friend Miguel, neglected by his par-
ents, join the familyindefnitely? The Veissis said yes.
Now 33, Miguel is a special response team member with
the Metro-Dade County police and a veteran of several
tours of duty in Iraq and Afghanistan with the Army
Sons Maurice Jr. and
Mallory, far right,
look on proudly as
Miguel, their adopted
brother, speaks at Veissis
inauguration.
E. Jameson Blvd. 407 N.
Davis St. 188254 Route
\ntil the amount oI uistresseu inventory returns to a
normal level, unuer percent, real estate pros Iace the
unenviable task oI clearing these sales as em ciently as
possible.
ListresseulistingstypicallysellIortozopercent
below market value, which can cause a urag on home
prices overall, accoruing to uata assembleu by the a-
1oarAssota1oovRvar1ovs.
1hesharppriceuiscountontouaysuistresseusales
isasymptomoIanimbalanceuhousingmarket.Inbet-
tertimes,auistresseupropertymightbesnappeuupat
marketvalue.Consequently,themarketneeusstronger
homesalesvolumestoreuucethenumberoIhomeson
themarketanutostabilizeprices.Asrisingpricesallow
troubleu anu unuerwater home owners, who account
Ior roughly zz percent oI mortgageu home owners, to
renance,theirhopesareraiseu.Robusthomesalesanu
homepricegrowthalsobreeuconuenceinthemarket
Iorwoulu-bebuyers.
By Iar the best remeuy Ior the ailing housing mar-
ket is a stronger economy. Job growth anu stock mar-
ketgainsarecloselytieutoconsumerconuence,with
consumerscommonlycitingconcernsaboutjobsasthe
mainreasonIornotpurchasingahome.
Behind the Drag
Ongoing concerns that Europes uebt crisis coulu
spreauanureuuceuomesticeconomicgrowth,alackoI
consensusinCongressovertheuecitreuuctionplan,
anu a major revision to economic growth in the rst
halIoIzocombineutosenustocksonarollercoaster
Expect two to
three years, at least,
before markets are
back into balance.
BY KEN FEARS
32 REALTOR

33
riue in the seconu halI oI zo. In August, consumer
conuenceIelltoitslowestlevelsincetherecessionbe-
ganinzoo;,anuneitherbusinessesnorconsumersap-
pearwillingtourivetheeconomy.Inueeu,jobcreation
hasaverageulessthano,ooojobspermonthoverthe
last year, below the amount neeueu to absorb college
anuhighschoolgrauuatesenteringtheworkIorce.
1he economy isnt the only Iactor restraining the
uemanu Ior housing. Creuit stanuarus anu uown pay-
ment requirements have been ratcheteu up in recent
years at the FHA anu government-sponsoreu enter-
prises,butbankshaveraiseutheirstanuarusevenIur-
ther in an attempt to limit potential lawsuits. As a re-
sult,FICOscoresonloansbackeubyFannieMaerose
IromanaverageoI;jinzootoapeakaverageoI;6
intheseconuquarteroIzo.Likewise,FICOscoreson
loansoriginateuthroughtheFHAaverageu6zinthe
seconu quarter oI zoo; but reacheu ;oo in the seconu
quarter oI zo. Anu anecuotal eviuence suggests that
uown payments greater than zo percent are the norm
outsiue oI the FHA. Although trauitional creuit stan-
uarusareagoouthing,thepenuulumhasswungtooIar
in this uirection. Punishing quality borrowers Ior the
mistakes oI the past is not goou Ior the health oI the
marketsortheeconomy.
AnotherIactorkeepingtheleveloIuistresseuprop-
ertieshighistheso-calleushauowinventory,thecache
oIhomesnotyetonthemarketbutalreauyorlikelyto
enuuponthebalancesheetsoIbanks,theFHA,Fan-
nieMae,orFreuuieMacanuthusIorsale.
Rain Delay
On the bright siue, both MLS inventories anu shauow
inventory showeu signs oI easing in zo. In Septem-
ber zo, an estimateu . million homes appeareu on
MLSs across the country, percent Iewer than a year
earlier. Meanwhile, Irom February zoo to July zo,
the shauow inventory uroppeu Irom .j million to .6
million, accoruing to calculations by AR researcher
SelmaHepp.1hereuuceuinventorywaspartlyaresult
oI rming home prices anu employment growth that
carrieuintozo.1akentogether,theseIactorslowereu
Beating
the Odds
on Short Sales
To succeed in short
sales, you have to know
your subject cold and
be willing to go out on a
limb for your clients. p. 34
How to Make
REOs Work
for You
Wonder what it's
like to work as a
foreclosure specialist?
Leo Pareja of Northern
Virginia shares his
strategy for REO
success. p. 38
Selling
Themselves
Short
Depression can
haunt real estate pros
who've experienced
the pain of a short sale
or foreclosure. We oer
tips for coping. p. 42
thenationaljo-uayuelinquencyrateIrompercentoI
all mortgages inthe rstquarter oIzoo to .percent
in the thiru quarter oI zo. However, the Ioreclosure
rateremainshistoricallyhigh.otonlythat,thetem-
porary moratorium on Ioreclosure sales by many large
banksinthelatterhalIoIzooanuearlyzotocorrect
processingproblemsheluupthesaleoIalargenumber
oIpropertiesthatwilleventuallybesolu.
Inall,shortsalesrosebyz6,ooolastyearwhileIore-
closuresIellbyz,ooo,accoruingtoHopeow,amort-
gageinuustryalliance.Septemberzomarkeu thezth
straight month in which Ioreclosure activity uecreaseu
on a year-over-year basis, accoruing to Realty1rac. In
October, however, lings spikeu ; percent Irom the
previous month, anu the month-over-month activity
wasmuchhigherinthehousingmarketsoICaliIornia,
evaua,Arizona,anuFloriua,wheretheuownturnwas
sharpest, as well as in markets where the juuicial pro-
cessheluupIoreclosuresales.Inaov.opressrelease,
Realty1rac CEO James Saccacio saiu, 1he October
Ioreclosurenumberscontinuetoshowstrongsignsthat
IoreclosureactivityiscomingoutoItherainuelayweve
beeninIorthepastyear."
Covernmentprogramsaimeuathelpingstruggling
homeownershaven'thautheeBectmanyhopeuIor,but
someretoolingisunuerway.Inovember,theHome
ABoruable Renance Program program was reviseu
with relaxeu criteria that observers hope will uouble
thenumberoIhomeownerswholleventuallybenet.
Meanwhile, private loan mouiers have shiIteu their
strategy to Iocus on reuucing monthly payments, the
share oI loans that are six or more months in ueIault
zmonthsaItermouicationhasimproveu,Irom8.
percentinzoo8toz6.6percentinzoo.
Its not too late to make uistresseu sales part oI
yourrepertoire.1hisspecialreportlooksathowthese
saleshavechangeusincethewilu,woolyuaysoIzoo8
anuproviuesinsightsonhowtorunasuccessIulshort
saleorIoreclosureoperation.
Kcn Fcars is managcr of rcgiona/ cconomics for tbc
N+1o+r Hssoc+1o or Rr+r1ovs
.
Beating the
Odds on
Short Sales
Take a hardship sale, apply knowledge
and chutzpah, and get ready for some
of the most rewarding closings ever.
By Stacey Moncrieff and Kristin Kloberdanz
the process is evolving so that you can beat the high fail-
ure rate that continues to plague short-sale ofers.
Lenders have hired more staf, developed more
structured escalation policies, and in a few notable cases
adopted technology platforms, all intended to improve
the quality of their work on short-sale fles, says default-
industry consultant Scott Thompson of Sacramento,
Calif. Nevertheless, approval timelines are sometimes
so long that its dif cult to hold a transaction together.
To the sellers and buyers you serve, being able to mas-
terfully close short sales will make you a hero, a genius,
and a saint all rolled into onea hero for the fearless per-
sistence you show when you hear no (or nothing) from
the lender; a genius for being able to understand and ex-
plain the changing short-sale guidelines; and a saint for
being willing to proceed against the odds, knowing that
you wont be paid unless the transaction closes.
San Francisco resident Michael Colo found himself
on the brink of foreclosure a few years ago after the value
of his luxury condo plummeted. He talked with four
salespeople before fnding Dennis Serrao, broker-owner
of Serrao Realty in Livermore, Calif. Dennis took the
time to explain the whole process, says Colo. He was
the only one who said the sale might not go through. He
was very up-front about expectations.
Three months later, Colo had sold his condo in a
short sale. I avoided foreclosure, and my credit looks
great, he says. He has since bought another home.
Thomas Lamosse of Edina, Minn., was on the other
side of a short sale. Lamosse lives in the United States
just six months of each year. For several years, he rented
from a friend. I wanted to get out of my friends base-
ment, he says. Another salesperson ofered nothing but
discouragement. She kept saying, Dont buy a short
sale. You have to negotiate with the bank, its a long wait,
and you wont get it because 30 percent of them dont go
through, recalls Lamosse. When he found a short sale
listed by Willette, he discharged the other salesperson.
The prospect of dual agency didnt alarm him: Im a
shrewd businessman, and it was a cash ofer.
Three times, Lamosse threatened to pull the plug
rather than bring more money to the transaction. As a
result, I found out the bottom-of-the-barrel price the
bank would take, Lamosse says.
But that price was still higher than he was willing to
pay, so Willette convinced the seller to put $3,000 into
the deal. It was an emotional roller coaster, but Chris
was pretty amazing because he got the seller to kick
money into the pot, he got the bank to drop its price, and
he got me to raise my maximum amount, he says. The
other salesperson couldnt have come close to this.
Lamosse moved into his condo in September.
One Destination, Many Roads
When you embark on a short sale, the biggest obstacle
youll face is the lack of a clear, consistent, dependable
Theres nothing better than being able to give a seller
a new chapter in life, says Chris Willette, a salesperson
with Edina Realty in Edina, Minn., talking about the
three years he has spent honing his short-sales expertise.
The recommendation letters I have from people . . . you
cant explain the gratitude people feel.
Whether short sales are a small segment of your busi-
ness or critical to your survival, you need to know how
Counter back to the banks, advises
Edina Realtys Chris Willette. If youre
weak, theyll run right over you.
34 REALTOR

P
h
o
t
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b
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v
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W
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2
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path. In Forrest Gump vernacular, short sales are like
a box of chocolates, says Thompson. Apart from the
basicssubmitting a hardship package and waiting for
the banks answeryou have to approach each sale indi-
vidually and, at the same time, stay on top of a constantly
changing landscape, he says.
That starts with an understanding of the federal
guidelines that have been created for loan servicers, the
entities that collect mortgage payments from home own-
ers and attempt to work out distressed loans through
modifcations, short sales, deeds-in-lieu of foreclosure,
or, if all else fails, foreclosure.
Borrowers who fall within federal guidelines may be
able to accomplish a short sale using the Home Aford-
able Foreclosure Alternatives program (see How HAFA
Has Helped). But the HAFA guidelines vary depending
on whether the loan is held by Fannie Mae, Freddie Mac,
or a private entity, so its important to know who owns
the loan. Even if they dont qualify for HAFA, borrowers
may still be able to do a short salebut factors such as the
documents required in the hardship package, qualifying
criteria, and speed at which a negotiator is assigned will
vary. Learning the variations takes time.
After a sale, I always ask the processor or negotia-
tor, Is there anything I could have done diferently?
Willette says. In this way, he gets to know each banks
particular hang-ups, such as wanting every page of the
short-sale package numbered.
Willette brings empathy to his work. A 16-year vet-
eran of the business, he got his start in short sales three
years ago when he needed to sell his own home at a loss.
The runaround and lost paperwork were considerable,
he says, but he got the bank to accept a $200,000 loss.
The process has gotten only slightly easier, he says.
There are still too many lost faxes and inexplicable
valuation problems, Thompson agrees. Theres also
too much ad hoc policymaking by inexperienced lender
representativesand too much waiting on hold.
Willette avoids faxing altogether. I use certifed
mail, he says. If a document is lost, I can say, You re-
ceived it at 10:38 a.m., and then its mysteriously found.
Even if it costs me $20, my time is important.
To curb problems, many servicers are turning to tech-
nology platforms that allow you and the servicer to col-
laborate throughout the short-sale process. The biggest,
Equator, was frst released as REOTrans in 2003 by the
companys Chairman Mark McKinley and CEO Chris
Saitta; the platform was expanded about two years ago
to handle short sales. Its used by several major servicers,
including Bank of America and Wells Fargo. In general,
platforms such as Equator have been lauded for bringing
more accountability to the process. But for some practi-
tioners, particularly those with established systems, the
change can be daunting. Picking up the phone to com-
municate an update and making a note in your fle wont
sufce. All updates must be recorded in the system.
Youll have problems if you dont use the system prop-
When working with buyer
clients, Dennis Serrao of
Serrao Realty interviews
listing agents to determine
whether the short sale is
likely to succeed.
35
1. Take a course to help
you understand the basics.
NARs Short Sales & Foreclo-
sures Resource certifcation
(realtorsfr.org) is one option.
To become certifed, you
listen to three recorded webinars (free), take a one-day course either live (the cost varies by
provider) or online ($115), and pay a $175 application fee. Dont expect the course to make you
an expert, though; that comes from experience. The short-sale landscape, with all the new and
changing programs, guidelines, and regulations, requires a real efort from practitioners who
are committed to staying current, says default-industry consultant Scott Thompson.
2. Network with peers. Talk regularly with agents and brokers in your areas and from around
the country to share issues and ideas and gain a well-rounded perspective on the broader
short-sale market.
3. Review pertinent federal and state guidelines. Its important to know not just the federal
rules but whats going on in your state, Thompson says, because a variety of state statutes
have been enacted to address foreclosure processing improprieties, taxation of mortgage
debt forgiveness, and liability for defciency balances after a short sale or foreclosure. Just
remember: Dont give legal advice unless youre also an attorney. Always recommend that short
sellers retain an attorneypreferably one with knowledge of tax and bankruptcy lawto help
them navigate the sale.
4. Identify a strategic partner. That could be another salesperson in your area with the
expertise and willingness to work with you or a third-party company. One such company is
Dallas-based Wingspan Portfolio Advisors, says Thompson, who is working with the com-
pany to refne its short-sale process. Wingspan was founded in 2008 to serve the interests
of mortgage insurance companies and subordinate lien holders. Leveraging its servicer and
mortgage insurance relationships, Wingspan will be rolling out a Certifed Short Sale pro-
gram in late January that will provide pre-negotiated MI and junior liens, along with lender-
approved price targets, all designed to smooth short sales. Wed already been working on
the toughest parts of the short-sale process with MI and the seconds, says Chris Plummer,
managing director of Wingspan Real Estate Network. We feel we can be that partner that
could make a real diference for agents.
5. Seek your brokers guidance. As you work on short sales, meet regularly with your
broker to discuss fle documentation, disclosure, and ofce policy issues.
5 Ways to
Gain Confdence
in Short Sales
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36 REALTOR

NAR: Watching Your Back
The national association of realtors played a role in the creation of the HaFa
program, bringing u.S. Treasury of cials to the table as early as 2007 to talk about
problems with the short-sale process, says Iona Harrison, 2012 chair of the associations
business Issues Committee. We understood early on, for example, the issues surrounding
second and third liens, she says. Our insights into the reality of the process were key to
putting guidelines in place.
The biggest issue at the outset was getting servicers to decide whether an ofer was fair,
says Jef Lischer, managing director of regulatory policy for nar before his retirement in
January. HaFa xes this by requiring servicers to determine the minimum acceptable net
proceeds up front so the seller and broker can assess whether a short sale makes sense.
Or they can negotiate for a lower number up front before wasting time on marketing at an
unreasonable level.
beyond HaFa, nar has been active on a number of fronts in the past ve years.
2007
nar-supported federal provi-
sions went into efect that
relieved taxpayers of federal
tax liability on mortgage debt
forgiveness. That provision is
scheduled to expire Dec. 31,
2012. but given the continued
high volume of short sales, there
will almost certainly be talk of
extending it, Lischer says.
2009
at nars urging,
Fannie Mae and
Freddie Mac reaf-
rmed their policies
to accept the
commission in the
listing agreement,
up to 6 percent, and
made an appeals
process public.
201011
In meetings with national
lenders, nar discussed the
problems created by long short-
sale timelines and encouraged
policies that emphasized short
sales over foreclosures where
possible. The meetings were
part of our ongoing efort to get
them to work. better, smarter,
and faster, Lischer says.
2011
nar obtained assurance
from the Federal Trade
Commission that its Mort-
gage assistance relief Ser-
vices rules, designed to curb
Internet scams aimed at dis-
tressed owners, wouldnt be
enforced against real estate
salespeople helping owners
complete short sales.
2011
nar worked
with the ameri-
can Land Title
association to
eliminate oner-
ous provisions in
a Freddie Mac
required af davit
developed to
prevent fraud.
L E A R N M O R E A T R E A L T O R . O R G / S H O R T S A L E S
erly, Serrao says. If youre going to use it, you should
strive to be platinum certifed, he says, referring to
training certifcations Equator ofers.
Also, beware of a subtle shift some lenders are mak-
ing from a document-driven to a data-driven process in
which youre expected to do data entry, Thompson says.
Its one thing to upload a fnancial statement form that
has been completed by the seller and quite a diferent
thing to enter the data on an online form. Theres a risk
of introducing an error that could cause a problem in an
otherwise approvable short sale.
Setting Expectations
If technology is gaining importance, it still plays sec-
ond fddle to experience. Its a mistake to assume that
the lender will place the short sale in the right program,
properly apply program guidelines, or understand state-
specifc regulations, says Thompson. If you want to
achieve the best possible outcome for the ownera sale
with no defciency judgmentfair or unfair, you need to
be the smartest one in the room, he says.
Set clients expectations at the outset. I tell the seller
and the buyers agent up front that Im going to come
down hard on them because we need those documents
signed and back the same day, Willette says.
If youre working with buyers, you need to assess
their readiness. Not all buyers have the temperament
for a short sale, Thompson says. Those who require a
dependable closing schedule or lack exibility probably
arent the best candidates. You also need to learn as
much as you can about the listing and listing agent. Ask:
How many short sales have you done? Have you had any
hardships? Has an appraisal been done yet? Which lend-
ers are involved?
Serrao fnds about 10 properties in his buyers range,
then does a phone interview with each agent. But just
asking the questions isnt useful unless you know why
youre asking, he says. Experience with diferent lenders
will tell you, for example, whether the process will ex-
tend beyond your buyers time frame or the holder of a
second lien will stand in the way of the sale.
Banks Are People, Too
Knowledge gives you bargaining power. Agents will
come in with a $300,000 ofer. Theyll be dealing with
the lowest-level bank employee, and the BPO will come
in at $320,000, says Serrao. They have worked on this
for months, but theyll walk away and say, We tried our
Realtors brought a real-world view to
government short-sale guidelines, says
2012 Business Issues Chair Iona Harrison.
37
How HAFA Has Helped
In 2009, the u.S. Treasury Department unleashed a torrent of new acronyms
for servicers, all under the umbrella of Making Home afordable. MHa provides
guidelines and incentives to lenders to encourage mortgage modications
and to facilitate short sales or deeds-in-lieu of foreclosure in the event a
modication isnt possible or doesnt work.
Lenders start by qualifying borrowers through the Home afordable
Mortgage Program. Those who are eligible for HaMP (based on the size of their
mortgage and their nancial situation) but dont qualify for a modication may
be considered for the governments Home afordable Foreclosure alternatives
program. HaFa ofers:
b Guidelines for completing short sales and deeds-in-lieu of foreclosure
b Incentives for servicers and investors
b Moving expenses for sellers
HaFa has been roundly criticized for falling short of its goals. but for all the
talk of HaFa not delivering the results that were expected, its a government
program that has made a diference, says default industry consultant Scott
Thompson of Sacramento, Calif. The discussions that led to the adoption
of HaFa and extensive follow-up dialogue have brought focus to many of the
critical issues that need to be resolved for the short-sale process to work
better.
Travis Hamel Olsen is COO of Loan resolution Corp., in Scottsdale, ariz.,
a component servicer that takes on short-sale les for many of the countrys
largest lenders. His company handles thousands of HaFa short-sale les every
month. The rules and guidelines in the HaFa program are noticeably improving
the overall short-sale process, Olsen says. It has urged servicers to move in a
proactive direction and adopt a more standard set of short-sale guidelines.
hardest. They dont know theres another way to go.
That other way is to escalate. Willette has estab-
lished relationships up the chain of command, enabling
him to cut 30 days of the typical four to seven months it
takes to close a short sale, he says.
Theres an art and science to escalationwhen to do
it, how to do it, says Serrao, whowith his wife, Stella
has closed more than 80 short sales since 2007. We do
it when the price is right. We have upper-level contacts
with almost every bank.
Many practitioners dont want to do short sales be-
cause they dont think they can get it done, Willette
says. Counter back to the banks! You can always pro-
vide comparables to support your value. If youre weak,
theyll run right over you. And ask the seller to contrib-
ute. These second mortgages take huge hits; they cant
give you a dime. You have to have a backbone.
Its time-intensive work. At any given time, Im ne-
gotiating 20 short sales, Willette says. There are many
nights Im in the of ce until 4:30 a.m. going through
every fle, so Im ready if theres a request. You have to
be organized and know where each fle is in the process.
Deals can turn suddenly. In one case, we had a cash
buyer and bank approval, Willette says. Two days be-
fore closing, the bank said it was countering the ofer by
$15,000. Willette jumped in his car and captured pho-
tos of comparables to show why the lower ofer should
stand. Finally we got it done, he says. The negotia-
tors said, You physically took the transaction in hand.
Ninety percent of agents wouldnt do that.
Serrao recently worked with a transferee whose house
was $150,000 underwater. His parents had cosigned the
loan, and he didnt want to hurt their credit. Because
he was current, the bank denied him, says Serrao, who
reached out to a senior vice president and succeeded in
changing the decision.
But while experience and perseverance can reduce
the failure rate on short sales, youll still have disappoint-
ments. Serrao worked with one couple who had fallen
behind on a property after both lost hours in their jobs.
Things just soured over eight months. We escalated,
but we couldnt get through [to the bank] that this was a
true hardship. The home went into foreclosure.
The point to remember in such a situation is that
the bank is not the enemy, Serrao says. [Bank employ-
ees] can be inept, but so can agents. Theyre human and
theyre overwhelmed. Youll send them paper. Theyll
lose it. Youll send it again. Thats just the way it goes. W
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Who Are Component Servicers?
Traditionally, mortgage loans have been serviced by
lending institutions. But more and more, servicing
is splitting of as a distinct function that may or may
not be administered by a lenderparticularly for
loans in distress.
Lenders both big and small are looking at the
option of moving delinquent mortgage volume
to component, or specialty, servicers. In nearly
all cases, the component servicer takes on only
the default servicing functions on the mortgages.
These specialty servicers are paid for achieving
pre-foreclosure resolution. Meaning: Your sellers
interests and those of the component servicer are
aligned. On short sales that have been assigned to a
component servicer, you have the beneft of working
with someone whose sole focus is on resolving the
delinquent mortgageas quickly as possible.
Once we confrm the transaction is consistent
with program guidelines and serves the interests of
the mortgage investor, we want to get the transac-
tion completed as quickly as possible, says Leo
Esposito, frst vice president of Loss Mitigation &
Asset Disposition at Pittsburgh-based ServiceLink,
one of the largest component servicers in the mar-
ket. Transaction velocity is important.
38 REALTOR

Accepting the Assignment
Typically, once you enter into an agreement with a
client, REO assignments arrive electronically, by either
e-mail or the clients Internet portal.
This is the case whether the agreement is with the
clients themselves or with a third-party outsourcer
through which a large percentage of institutional
foreclosure business is channeled. Third-party
outsourcers enter into agreements with banks and
other owners of foreclosed properties and, much like
appraisal management companies in the appraisal
industry, act as intermediaries between the clients and
the brokers who manage the sale.
Among the key issues you must consider before
accepting assignments is how any repair or upgrade
work will be handled. Not all properties that are put
up for sale as REOs will have work done; depending
on the market and the goals of the client, properties
might be sold as is. But when upgrades make fnancial
sensesuch as in neighborhoods likely to attract
owner-occupant buyersthe way REO clients handle
cost issues varies considerably. Its not uncommon for
large banks to pay for maintenance, repair, and upgrade
costs and to use their own network of contractors for
the work. Others, including third-party outsourcers
and owners that dont have the resources of the
larger banks, expect you to pay for utilities, repairs,
and upgrades up front and submit your expenses for
reimbursement after the property has sold. That can be
a large burden to shoulder.
Its very resource-intensive, Pareja says. As an
agent, youre spending money to secure, maintain,
and repair the property. Theres a billing cycle that
these properties go through, so you have to carry those
receivables. You may wait 90 days or even 120 days
before you're reimbursed.
How to Make
REOs Work
for You
A foreclosure specialist shares
his business strategy for making a go in
this part of the distressed property market.
When one of the lenders Leo Pareja worked with in 2007 asked him to conduct
a broker price opinion for a foreclosed property he wanted to sell, the Keller
Williams sales associate couldnt have realized he was being ofered a career-
changing opportunity. That request soon led to dozens more BPO ofers as
housing markets began to shift and distressed property listings became more
visible parts of the landscape. Parejas burgeoning career as an REO specialist
essentially found him.
I literally stumbled upon this market, says Pareja, who entered the business
in 2002 and today holds broker licenses in Virginia, Maryland, and Washington,
D.C. That BPO turned into about 100 others, and then 100 BPOs later I had
eight REO listings.
He now oversees an 18-person REO team at his Reston, Va., of ce, which
handles between 200 and 300 listings at any given time on behalf of lenders,
investors, hedge funds, credit unions, and other institutional owners of foreclosed
real estate. His team includes administrative assistants to handle accounting and
to track receivables, feld inspectors
to conduct spot checks of properties,
asset managers to work with sellers and
vendors working on property repairs,
and licensees to work with buyers.
REOs are a volume business that
require practitioners to be even more
task- and technology-oriented than
whats needed in conventional home
sales, Pareja says. Thats because
properties have to be inspected weekly
to keep tabs on their condition and make
sure any work being done is progressing
as planned. Virtually all interaction with
clientsmeaning the banks, hedge funds, and other investorsis done digitally,
mainly on clients proprietary intranet platforms. That makes it impractical to
succeed in this sector if youre operating alone and have limited technology.
Its just a very work-intensive business, and its easy to appreciate why clients
are so technology driven, he says. In order to manage the amount of data and
inventory they have, technology has to be a big piece of how they operate.
A Foreclosure
System That Works
Leo Parejas of Keller Williams Realty,
Reston, Va., and Jonathan Spinetto of
Champion Homes Realty, Chantilly, Va.,
talk about best practices and potential
pitfalls of running an REO operation.
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39
Relocating the Occupant
Once you accept an assignment, the frst step is to take control
of the asset. Thats a straightforward task when the property is
vacant, but when its occupied and the client wants the property
to be vacated, your priority is to relocate the occupant. In most
cases, theres little pushback from occupants; coming up with the
money to relocate is often their biggest hurdle, says Pareja. To that
end, clients often make assistance available through programs
referred to as cash for keys or "relocation assistance." In Parejas
experience, REO clients typically step up with between $500 and
$5,000, depending on the neighborhood, the condition and price
point of the property, and how long the occupant has been there.
Any [agent] getting into this business needs to approach
relocation with empathy, he says. People are never in this
situation because they want to be. Some people feel cheated
by the bank, whether it was because a loan modifcation didnt
go through or something else. Theres always a back story. And
although our client is typically the fnancial institution, the
occupants live in your community. They could be buyers in three
or four years, and they need to be treated with dignity. We try
to help them with their needs, whether that means giving them
another three weeks to stay in the property or getting them the
amount they need to get into their next house. When it does go to
eviction, its usually because they dont have the money to move.
Local laws difer, but Pareja says tenants can remain in the
property for a reasonable period of time, typically 90 days, while
notice is served and other requirements are met. The entire process
can take monthssometimes as much as a year when the tenant
forces a legal eviction. Today, people are more educated about
the process and know what their rights are, he says, especially if
theyve had a family member or friend already go through this.
Preparing the Property for Market
Once the unit has been vacated, you or your feld staf conduct a site
assessment and get back to the client with recommendations. Pareja
says this is where your market knowledge is critical. For most clients,
the property is less a bricks-and-mortar asset than a fle on someones
desk. Your sellers never see this asset, he says.
The propertys condition and that of the surrounding neighborhood,
whether investors or owner-occupants are buying nearby properties,
and whether other properties in the area are converting to rentals are
the kinds of considerations you have to bring to the client.
Pareja says hes seen an increase over the past two years in
clients willingness to invest money in properties before putting
them on the market. Its an efort to stabilize neighborhoods, he
says. Theyre more willing to put in curb appeal, like mulch and fowers.
For a lot of these clients its a mantra that they want their properties to
be indistinguishable from others on the block. That means they want
a fresh coat of paint and new carpeting, and they want the utilities on.
Have big-ticket items like HVAC systems and the roof checked out
to minimize the chance of a sale falling through before closing because
of an undiscovered problem. It makes sense to spend $100 or $150 on an
HVAC inspection and roof certifcation and to make sure the plumbing
and electrical are working. What you dont want to do is spend $15,000
of a clients money to renovate the bathroom and kitchen, accept an
ofer, and then fnd out that the HVAC is on its last leg or the roof is
shot, he says.
Properties that have been positioned for owner-occupant buyers
typically move quickly, often within a month, Pareja says.
In low-price-point neighborhoods, however, properties often wont
command enough in the market to recoup fx-up costs. In these
cases, the properties are typically sold as is. From the neighborhood
perspective, thats not all bad; giving investors an attractive entry point
is better than leaving a property vacant. Even for properties that sell
as is, if buyers are using federally backed fnancing through the FHA
or VA, there needs to be enough of an investment to make sure they
pass the agencies minimum appraisal requirements. That means the
utilities must be turned on, and big components such as heating and air
conditioning need to be in working order.
If you know its not going to pass the FHA, its your job to advise
your client of that, Pareja says. Otherwise, you need to negotiate
whats expected up front, because if these repairs come up and your
clients not going to pay for them, the buyers going to have to pay for
them. You need to have that fduciary view of the transaction.
40 REALTOR

Structuring Compensation
The compensation arrangement for Parejas team has evolved over
the years. When he frst started, most of the team members were on a
salary plus bonus structure, but as REO inventories started dropping
in 2010, largely because of the moratoriums banks imposed after
widespread robo-signing and other problems disclosed during
the process, he changed his teams compensation to a percentage
commission basis. This was preferable to continuing to pay salaries
amid greatly reduced volume.
Paying salary with some performance bonuses is a great business
model when theres a plethora of inventory, but the last couple of
years have taught us that inventories can fuctuate tremendously,
he says, so Ive gone to very few salaried support staf while
everyone else is on a percentage of revenue, just as if they were
buyers agents.
Accounting staf continue to receive a salary. For others, Pareja
wouldnt disclose the split, but he said its common in this niche for
splits to be lower than on the conventional side for two reasons: Its
a volume business, so team members accept a smaller percentage in
exchange for higher volume, and brokers often have to carry the utility
and repair costs. Thats a big diference with the retail space, he says.
For that reason, 7030 commission splits are not uncommon in the
sector, he says.
The commission rates he negotiates with his clients vary widely.
We typically get a percentage-based compensation, usually
with a minimum, built into the listing agreement, like minimum
commissions of $1,000 or $2,000, he says, because in REOs you
end up selling houses for $10,000, $20,000, $30,000, or $40,000,
depending on where theyre located. Some clients pay 6 percent; some
pay 5.5 percent and expect you to keep 2.5 percent and pay out 3 percent
to the selling agent. Some pay 5 percent and ask you to split it.
Making the Move into REOs
For practitioners looking to get into REOs, look frst at whether you
or your broker has the fnancial wherewithal to carry the utilities
and repair costs for clients on an ongoing basis. Then evaluate your
technology and stafng structures. Since most of your interaction
with clients is via technology, you need to have dependable mobile
computing capabilities and up-to-date hardware, including
scanners, to digitize documents. Regarding stafng, an accounting
specialist is indispensable, Pareja says, and you need at a minimum
a licensee who can work with buyers, conduct valuations, and make
recommendations on property needs.
To get into the feld, Pareja recommends you start with
education: The Five Star Institute, REOMAC, REO Expo,
and Vendor Resource Management University are industry
programs that recognize program graduates with certifcations
and provide networking opportunities with institutional
investors and third-party outsourcers. Its no diferent than in
the retail space, where you develop a reputation and get referrals, he
says. Pareja now teaches classes for VRM University.
Pareja says its not too late to get into REOs, even though the
market is maturing, because institutional investors and third-
party outsourcers are always looking for sales partners who can
demonstrate capacity and market knowledge.
Theres also a change in business practices among clients
thats working in agents favor, and thats a move toward requiring
practitioners to work in smaller geographic areas. Theyre putting
proximity requirements into their agreements, and that really
shrinks down the radius that an agent can work in, he says. With
tight geographic restrictions, even well-established REO brokers
cant work outside certain areas, opening the door for brokers new to
REOs in those areas to fll the void.
REOs will be a major part of home sales for the foreseeable
future, so it may make sense for you to learn more about the niche
and position yourself as an REO broker. But, as Parejas experience
shows, you have to be prepared to hire team members and set up
systems that enable you to achieve the sales volume necessary to
make REOs a proftable move for you. n
42 REALTOR

Selling Themselves Short
When practitioners are caught up in market woes, anguish and
depression can damage their judgment. BY BEATY REYNOLDS AND PAUL A HESS
People facing a short sale or foreclosure may be experi-
encing symptoms that mimic or closely resemble post-
traumatic stress syndrome. Anger. Depression. Fear.
You dont need to have been deployed to a war zone
to be suering from trauma, says Laurel Mulholland,
a psychotherapist based in Boulder, Colo. Mulholland
says. Trauma is relative.
Mulholland notes that when her clients discuss a job
loss or foreclosure, their feelings resonate strongly with
the term trauma. There is a ripple eect. It may start
with money problems, but it spreads to every aspect of
the persons life. The ripple becomes a tsunami. They
are paralyzed; they see the collapse coming, but they
feel powerless.
Savvy practitioners have learned how to work with
such feelings. Amy Coleman, owner of Golden State
Realty Group Inc. in Sacramento, Calif., recalls that
short sales began to ramp up slowly but steadily four
to ve years ago in her area. Today, more than half of
the sales in her market are distressed sales. So Cole-
man incorporates a comprehensive initial consultation
with clients. I explain up front the emotions theyll go
through. If you can preempt the negativity, distress,
and anger, it helps keep them calmer, whether its a six-
month process or two-year process.
Facing Up to Your Own Distress
But what if youre the one facing foreclosure?
Real estate practitioners who are being traumatized
by market realities often attempt to conceal their mis-
fortune due to a combination of shame and the fear of
causing further damage to their business.
Kathy McGraw knows how quickly ones life and
fortunes can change. Until early 2008, she was an in-
dependent broker with two o ces in the Greater Los
Angeles area and 10 agents under her license. As the
market slid, she became depressed, and by January
2010, McGraw, then 59, had lost her home to foreclo-
sure. Today, the Army and National Guard veteran and
former Peace Corps volunteer, who was briey home-
less and then in transitional housing, is about to move
into permanent housing. Her inability to aord dental
care contributed to her downfall, she says. People judge
you on looks. It aected me greatly. Sometimes I would
shut the phone o for days. Its so easy to do the wrong
things. A lot of decision-making skills were o. Id lose
papers. I gave my listings away because I couldnt handle
it. I had to let the two o ces go. I knew I was slipping
into a major depression.
McGraw is now undergoing therapy and awaiting
her permanent teeth. I am working on getting my life
back together, she says. Its unclear whether shell re-
turn to the real estate business, but for now she earns
money as a notary.
A Nightmarish Situation
Seven years ago, Frances Flynn Thorsen was known as
a go-to salesperson for HUD properties in Pennsylva-
nias Lehigh Valley. That began to fall apart when she
tangled with a predatory lender and wound up in fore-
closure. Thorsen says she sought out the lender in the
hopes of obtaining a quick x on an IRS debt, a deci-
sion she freely admits showed poor judgment. I should
have hired an attorney to resolve the issue, but instead
I went against my own instincts and procured the loan.
Then my mother became ill with cancer, and I had less
time to concentrate on my real estate business. Before I
knew it, I had this nightmarish situation on my hands.
Like McGraw, Thorsen found herself too paralyzed
by anxiety to work. Her house began appearing on In-
ternet foreclosure portals before it was actually fore-
closed on, she says. Buyers were tromping through un-
announced. I was in a state of terror. My sister, who is a
nurse, believed I was going into life-threatening trauma.
Thorsen persevered and eventually regained her
equilibrium. Now a real estate educator, writer, and
public speaker based in Tucson, Ariz., Thorsen says her
story is far from unique. Agents often contact me who
are struggling to keep their businesses aoat. They are
literally shaking with shame. I encourage those who are
threatened with foreclosure to consult a bankruptcy at-
torney. They need a fresh start. W
GETTING
THROUGH
A ROUGH
PATCH:
6 WAYS
TO COPE
1 Seek professional
help from a clergy
member or licensed
mental health
practitioner.
2 Join a peer or
support group.
3 Learn to see
life as a process of
reection and continual
development.
4 Learn to
experience and
appreciate life
beyond work. Focus
on self-care.
5 Let go of
preconceived notions
of yourself, and live
in the moment.
6 Dont become
straitjacketed by
someone elses notions
of success and
accomplishment.
46 REALTOR

Commentary
Glad io Lc a Rcalaior
How did wc cnd up wiih ihc word Ri\i+ov
`
?
And why do so many pcoplc mispronouncc ii?
Im so happy youre my Real-a-tor. Many oI us have
hearu these worus oI praise Irom sellers or buyers
aIter a successIul transaction. 1he accolaues conrm
the reason we are part oI this sometimes challenging
proIession: to proviue excellent service to our cus-
tomers. \e also know that satiseu clients are likely
to spreau the woru among Irienus anu generate those
reIerrals that are the beurock oI our businesses.
But Ior some oI us, the Ieeling oI satisIaction
has to be tempereu by the ngernails-on-the-
blackboaru sensation at hearing our proIessional
title pronounceu with three syllables rather than
two. As a retireu English proIessor Irom the \niver-
sity oI MissouriKansas City whose seconu career is
in real estate, I nu it next to impossible to reIrain
Irom correcting errors like this. But Ive noticeu that
my pronunciation help is not always wanteu. Ive
also come to realize that its probably not in my best
proIessional interest to uampen clients enthusiasm
by correcting them at that special moment we call
closing.
Over time, my instructional gene has over-
taken my language-police gene, anu Ive trieu
to be more oI a resource than a reu-pencil
wieluing Ianatic. I ueciueu to research the origin oI
the woru in oruer to unuerstanu why so many other-
wise euucateu, intelligent people mispronounce
Rvar1ov
.
1he rst question that intrigueu me was how the
woru real became linkeu to estate. Its reassur-
ing to know that what we ueal in on a uaily basis is
real, as opposeu to ctional or imaginary. But how
uiu real come to uescribe houses, Iarms, commer-
cial builuings, or other property people buy anu sell:
\hat I Iounu is that real in Miuule English meant
the quality oI property or things. \hen you think
oI it, we automatically call real that which we can
touch, smell, or taste because these are properties.
1he ultimate Latin root, res, translates as thing. In
law, xeu or stationary propertyreal builuings or
lanuqualies as something to be bought anu solu.
Estate is ueneu as the extent oI an owners rights
with respect to his or her real property.
\ith this history in minu, theres goou reason Ior
simply reIerring to us as real estate agents or bro-
kers as the license uictates. But our proIessional
organization ueciueu that those titles lackeu a cer-
tain authoritative cast. So Rvar1ov
was createu,
capitalizeu, anu copyrighteu to elevate agents anu
brokers who are members oI the a1oar Assot-
a1o ov Rvar1ovs
. \hile the title aims to conIer

proIessionalism, its something oI a challenge to pro-
nounce. \hen we hear the woru real, Ior example,
native English speakers tenu to link it to similar-
sounuing worus like really, relateu, rely, anu
relay. AIter the long e sounu in re, we expect to
hear a consonant, not a vowel. (Complications arise
as well because the ea uiphthong in real is some-
times pronounceu as two syllables, as in reality.) So
some speakers simply interject the l sounujust
Ior the l oI it:aIter re. Consequently, Real-
a-tor is what comes out oI their mouths. (Many
Rvar1ovs
are unuoubteuly eBective relators to

people, but thats not our name.)
Another linguistic rule thats probably in play here
is metathesis. 1his term uescribes the habit oI trans-
posing letters in certain worus as Presiuent Ceorge
\. Bush anu many others uo in reIerring to nuclear
weapons as nuculer ones. Similarly, when people say
Rvar1ov
, some reexively transpose the l anu

a. \hat results is awkwaru-sounuing, but iI so
many 1V anchors, politicians, anu, yes, even Iellow
Rvar1ovs
make the same mistake, we say to our-

selves, how can they all be wrong:
I hope youll pass what youve learneu along to
colleagues. I also urge you to share this inIormation
with clients, with the Iollowing caveat: Stie the
urge to correct their mispronunciations. Even when
they call us Real-a-tors, whats really important is
that theyre still calling us. W
Even when they call us Real-a-tors, whats really
important is that theyre still calling us.
Robert Willson is a
salesperson with
RE/MAX Premier Realty in
Prairie Village, Kan.
WHAT S ON
YOUR MI ND?
Submit your commentary
ideas to wcole@realtors.org.
Note: Opinions expressed in
Commentarydo not necessarily
reect the position of the
National Association of Realtors
or REALTOR
Magazine.
47
Law
Watching Out for Fraud
Be sure youre doing the proper due diligence on behalf of
your clients in a distressed-property sale.
No doubt, youve read reports about intricate fraud
schemes designed to bilk distressed property owners
out of equity and steal homes. To help your clients
avoid scams, pay close attention to your fduciary du-
tiesand think beyond basic due diligence.
In an example weve seen repeatedly, unsus-
pecting sellers are told that a limited-liability com-
panyactually a shell corporation created by the
fraudstersis the buyer of their property. Short-sale
approval letters are fabricated using a template from
a prior bank short-sale approval and forwarded to
the sellers in order to induce them to execute a grant
deed in favor of the buyer. Meanwhile, innocent
buyers bidding on the property are told the short sale
is approved, and those buyers transfer their purchase
monies into escrow. The escrow ofcer, in on the
fraud, then transfers the money to his or her cocon-
spirators and provides a false HUD-1 showing that
the funds were used to pay of the lender as part of
the short sale. The sellers, assuming their loans are
paid of, stop making payments, causing the lender
to begin foreclosure proceedings. Before long, the
innocent buyers learn theyve been defrauded.
What if you are the lone unknowing practitioner
in a crooked deal like this? Say, for example, youre
representing the innocent buyers. With a little extra
care, its possible that you can expose the fraud and
prevent it from occurring. Freddie Mac is encour-
aging practitioners to help prevent fraud by blow-
ing the whistle on questionable transactions; the
agency requires all parties to the transaction to sign
an afdavit afrming a truly arms-length deal. If you
werent aware of wrongdoing, you wont be held re-
sponsible for others actions. But if your gut tells you
that something is of, then do some research. Follow
up with escrow or title ofcers to ensure theyve veri-
fed the validity of the short-sale agreement. Dont
hesitate to ask for copies of communications with
the lender regarding the short sale, and make sure
youre satisfed that the lender has authorized the
short sale to proceed along the lines that it is, in fact,
proceeding. Asking tough questions will protect
both your clients and you. We know of one case in
which a buyers agent is being sued for failing to con-
duct due diligence that would have prevented fraud.
Sometimes it can be intimidating to ask extra ques-
tions for fear of losing a deal and thus the commis-
sion, but is that $10,000 commission really worth
becoming embroiled in a lawsuit or blemishing your
reputation?
Here are some things to look out for:
b When working with another real estate practitio-
ner for the frst time, check the persons license
status with your states department of real estate.
Never deal with unlicensed agents or unlicensed
brokerage companies, and be wary if you encoun-
ter agents who are unwilling to meet in person.
b Be sure to pay extra attention if one of the real es-
tate practitioners is a party to the deal, is using a
shell company, or mentions on the side, outside
of escrow or after closing.
b Make sure early in the real estate transaction that
all the required state and federal disclosures have
been made, and be suspicious if other parties claim
to represent federal or state agencies or programs.
Also, beware of the forensic loan audit. Accord-
ing to the Federal Trade Commission, these can be
used to exploit fnancially strapped home owners.
In exchange for an upfront fee, so-called forensic
loan auditors, mortgage loan auditors, or foreclosure
prevention auditors ofer to review a home owners
mortgage loan documents to determine whether
the lender complied with state and federal mortgage
lending laws. The auditors explain, in many in-
stances without any reasonable basis, that the owner
can use the audit report to avoid foreclosure or ac-
celerate the loan modifcation process.
For your part, if you plan to undertake a short sale
on behalf of a buyer or seller, be sure you fully under-
stand how a legitimate transaction should play out.
Check with colleagues, industry Web sites, and your
state regulatory agency. Remember, if it seems too
good to be true, it probably is. W
Eric P. Early is managing
partner of Los Angeles
based law frm Early Sullivan
Wright Gizer and McRae
LLP, focusing on business,
entertainment, real estate,
title, and escrowrelated
litigation. You can contact
him at eearly@early
sullivan.com.
Scott E. Gizer is operations
partner of Early Sullivan
Wright Gizer and McRae
LLP, with a focus on real
estate, construction, and
entertainment law. You
can contact him at sgizer@
earlysullivan.com.
Last Word
P
h
o
t
o

c
o
u
r
t
e
s
y

o
f

L
i
s
a

G
r
o
s
s

2
0
1
2
Total Recall
Moonwalking with Einstein author Joshua Foer shares a few of the tricks
he learned while training to become the 2006 U.S. Memory Champion.
According to your books
title, Moonwalking with
Einstein: The Art and
Science of Remember-
ing Everything (Penguin,
2011), memory is both an
art and a science. What
was the most memorable
thing you discovered
about our capacity to im-
prove our memory?
I was most
surprised to
learn while
training
for the
memory
champion-
ships that
its more
about cre-
ativity than
memory.
Its the art of making
things memorable: how
to transform the forget-
table into information
that your mind is unable
to forget. Make [new
data] funny, strange,
bizarre, ugly, weird
whatever will appeal to
your imagination.
Mnemonics (a learning
tool that triggers memory,
such as poems, rhymes,
or images) arent just use-
ful for winning memory
championships. How can
people use them in ev-
eryday life? Mnemonics
are enormously useful
when giving speeches.
These memory tech-
niques were invented
for orators 2,000 years
ago. I create an image
for each of the topics,
one for each of the
paragraphs. Then I
make those images as
bizarre and memorable
as possible and put them
into a memory palace.
Then I walk through
the palace rooms in my
minds eye and see [the
images] in order. This is
very useful when giving
a talk without notes.
Say youre in real estate,
and you want to use these
techniques to remember
details about property
listings or transactions.
Where do you start?
Create an association
so that you can see in
your minds eye what
it is youre trying to
remember. Try to
remember numbers by
turning those numbers
into words. That doesnt
take a lot of work to
learn, and thats really
handy. I use that trick to
remember bank account
numbers and credit card
numbers. It would be
great for remembering
asking prices and other
numerical things related
to real estate.
Heres another real estate
challenge: keeping track
of the names of a clients
family members. Say
youre trying to remem-
ber that my name is
Joshua Foer. When you
meet me on the street,
think of someone etch-
ing with a knife a 4 on
my forehead. That is so
gory that the image will
remind you of my name.
Try to also see Albert
Einstein moonwalking
behind me. If youre
trying to remember that
Im interested in a stu-
dio apartment, maybe
you would see me paint-
ing in an art studio with
an easel.
You say attention is a
prerequisite to remember-
ing. How can we become
better at paying atten-
tion? I think multitask-
ing is a recipe for being
forgetful. If youre not
focusing, youre going
to forget. The ability to
concentrate has deterio-
rated in our society. The
feat of concentration,
the idea of remember-
ing a lot of information,
now seems exemplary.
In the past, it didnt
seem so unusual.
In an age when you can
access so much informa-
tion on a smartphone, why
is having a good mem-
ory still important? Its
truewere better o
having phone numbers
in BlackBerrys than
in our memories. But
some will argue, Well,
I dont need to know
anything because I can
look it up on Google. I
think thats a dangerous
sensibility. The Internet
never had a new idea, it
never created anything,
and it never gured
out a link between two
ideas. The human mind
needs raw material.
To the extent that we
impoverish our minds,
that has hidden costs.
By Kristin Kloberdanz W
MORE ONLI NE
Learn more
about the book
and author at
joshuafoer.com.
48 REALTOR

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THE BUSI NESS TOOL FOR REAL ESTATE PROFESSI ONALS Real torMag. REALTOR.

2012 NAR President Maurice Moe Veissi Page 28

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January/February 2012 RealtorMag.REALTOR.org

Magazine (ISSN 1522-0842) is published bimonthly by the NATIONAL ASSOCIATION OF REALTORS

Magazine, NATIONAL ASSOCIATION OF REALTORS

, 430 N. Michigan Ave., Chicago, IL 606114087.

and its afliated institutes, societies, and councils.

Commercial Alliance) REALTOR.org/commercial

Land Institute, alc) www.rliland.com

Land Institute (alc) www.rliland.com

has ably rep-

Party Calls Ior Action. Engage your cus-

are the heart oI the ueal. W

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Database System (login

MAGAZINE, print and online, is REALTORS

with timely decision-making tools on business purchases and strategies.

central to the trans-

Magazine with three

, has Iunneleu nearly S million to

-supporteu causes. 1he magazine has also

anu 8o million property owners to pro-

Magazine Online. You have just

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Conference & Expo kicked o on 11/11/11 in Anaheim,

participated in the build. 4. Bursting With Talent. Realtors

Got Talent winner Eric Alexander of

introduced Chrysler as the newest Realtor Benets Program partner.

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and the newest partner

association sta member, you may partici-

meet the requirements for Chryslers On the Job Program,

enjoy an estimated $800 benet. Thats a sixfold return

Party initiative, the political

as a result of the campaign. Its given

for becoming consumer

Magazine video, NAR Gears up

protect and promote the interests

must advise potential clients of: ... 5)the

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across the country.

in 1981, six years after he opened

in 2002 and named

of the Year in 2003.

January/February 2012 RealtorMag.REALTOR.org

president who worked with Moe

stay in the center of any transaction. I also

have a heart. They are going to

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. \hile the title aims to conIer

are unuoubteuly eBective relators to

, some reexively transpose the l anu

make the same mistake, we say to our-

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