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2017 NAR Legislative Conference

NAR Legislative Conference
Washington, DC, May 15 – 20, 2017

by  Modene Gaulke, Association Executive

Philosopher-writer turned photographer-keynote speaker, Mike Ferrera, ignited a crowd at the NAR Legislative Conference this week with his game-changing, creative ideas. Ferrera posed the question: “How do we get people to look up and pay attention to us?” It isn’t just about systems and products any more, he offered. “Our job is to become part of their (millenials’) story. How high can we take our business if we look up? ‘Selfie’ marketing is so over.”

Ferrera said he realized several years ago that he is vulnerable just like everyone else. He tries to help people see things differently, which he learned from his long-time mentor. He asked the REALTORS® to think about what it is they really do. Those are the reasons you are trusted. “If you believe what you do is noble, then you will have no trouble standing out,” he said.

Offering several suggestions, he said to do something others won’t; become vital not viral; sell with a story. While some people wait for leads, leaders play a sales game. He believes that it is not technology that makes things happen – it is people. If you believe what you do is important, then you need to be involved in processing.

Don’t be afraid to call FSBOs and offer your services. We do have to market ourselves. Figure out what your people you work with all the time want to hear from you. Not a big fan of social media, Ferrera asked if anyone ever noticed that “Social Media” has “SOI” in it? That means sphere of influence.
We than watched a three-minute video of a REALTOR® who got up early, took a walk, ate healthy, showered, got dressed, bought flowers for an open house he was conducting, wrote “Sold” across a contract. Not a word was spoken in the video. It was creative storytelling which helps even when you have to sell something “boring.”

Dr. Ben Carson,  the 17th appointed Secretary of HUD, was the keynote speaker during the next session. Carson formerly worked 30 years as Director at the Children’s Johns Hopkins Hospital. The meeting moderator mentioned that Carson is the recipient of the Presidential Medal of Freedom, which is the highest award that can be given.

Carson started out by saying that homeownership serves as the foundation of wealth. HUD wants to make sure everyone has the opportunity to achieve it. FHA is often the entry point for homeownership, he stated. Sharing some statistics, he said the United States currently has the lowest infancy death rate since the housing crisis started. In large part, that’s due to more parents who have been able to obtain decent housing.

Carson mentioned that “this Administration” is looking at the problems of society in totality to see what needs to be improved and strengthened. He said he has been traveling all over the country talking to stakeholders, and analyzing what works and what does not. “Assistance is most successful when you address the whole person,” he said. They are looking at things in a holistic manner which will make it much more possible for people to participate in the American Dream.

“We are very fortunate to live in a free country. America is great because Americans are great,” Carson said.
He went on to say that FHA had just announced a new program the day before, and that they will now be working on a condo rule that will allow condos to be financed.

In a very brief question and answer period, Carson was asked where HUD stands on PMI. In his response, he explained that when FHA was established, it was ruled that PMI must be for the length of the loan in the case of a financial crisis such as we have had in the past few years. Any change in this rule is something Congress would have to change, according to Carson.

He concluded by stating that we have 3 out of 4 people in need of affordable housing – more than what we are able to provide. “If Americans will work together, our ingenuity will solve that problem,” he said.

Roy Wright, Deputy Administrator of FEMA for Insurance and Mitigation, spoke. NFIP is also a flood management/mitigation program within FEMA. Wright said, “We share the same mission. We want Americans to have a home. That is the goal today.” The role of FEMA is to manage flood programs, in part.
In a further explanation, he said that the National Flood Insurance Program was developed in 1968. Congress wanted not just to provide flood insurance but to make sure we don’t replicate a problem. 22,000 communities are part of the NFIP today. 73 companies are writing flood insurance policies using FEMA policies.

“Knowing where to build the next development and where the high hazard areas are located is important. We want to make insurance available to all,” he commented.

The disaster relief fund is mostly for public infrastructure. Very little is available for housing. He said that insurance for housing is only for the value of the brick and mortar and is NOT tied to the real estate transaction amount. Many people have the mistaken idea that it is for a different amount. He quoted an amount of $140,000 as being the common amount awarded to qualified homeowners.

Anyone who is interested needs to register with FEMA to find out if insurance is available to them or if they can get a loan. “If they have a flood insurance policy, we rebuild the home,” he said.

Wright said there have been previous problems with the way claims and appeals were handled. “We transformed the customer experience so it is fair and predictable.”

FEMA’s products have not changed. They have been selling the same product since 1986. The flood map is reviewed every 5 years. Some areas are added, some are deleted. “As a REALTOR®, you should make 100% sure your buyers know what is going on,” he said. Wright said FEMA has no legal relationship with any lender. His priority is in delivering a better customer experience. When questioned about reauthorization, he said his view is to ask how it can be used to deliver a better experience.

“We need more people with flood insurance in this nation and we need to have more competition in the market.” There is going to be a move toward more risk-based properties because of the 5 million policy owners–only about 1/3 are in a high risk area.

Data Connection
REALTOR.com presented charts and graphs to show where they stand now. Their representative said that REALTORS® need to be better at managing their leads, according to the information from the scientific numbers. The last set of numbers showed 77.5 million leads with only 5.4 million sales. Their 50 data scientists are using data to drive personalization and relevance.

“Getting it right and making it relevant is an ongoing effort,” the spokesperson stated.
In the past 3 years, they have experienced 81% growth. In the last 2 years, it is at 114%.
Consumers have ranked realtor.com as number 1, ahead of Zillow and Trulia, as to how they found their home, how they found their agent, and in helping sell their home.

Another group of presenters spoke about “The HUB” which is a workspace for NAR committees. It is higher logic technology. At this time, it is not available to local or state associations, but may be in the future.

We then experienced a demonstration of how Upstream integrates with RPR. A separate report on that is in REALTOR® Magazine. Of importance to note, a broker may choose where the original point of entry is for MLS data – whether it is Upstream or the MLS.

Dave Conroy, lab engineer for Center for Real Estate Technology (CRES) spoke about block chain. He said NAR is interested in it because it has the potential to greatly reduce risk of fraud. Some of its possible-use features are data sharing from one association to another. Data transport is the question. Their next step is to engage association executives and committee members to determine strategy. Recommendations will be forthcoming at the meetings.

One of the technology committee members said that MLSs should be pushing data to our websites and brokers every nanosecond. A response to that was every MLS has its own rules. But the committee member said he doesn’t care about the MLS vendors. “It’s way past time when we as an industry should do this,” he stated.

Conroy suggested those interested can google commoncraft for an explanation of block chain. It was cautioned that the potential inadvertent incident of the viewing of data by the wrong people could violate the Fair Housing Act.

Mike Wallace, host of Fox News Sunday, spoke on ‘America under President Trump.’
Beth Pierce, NAR VP, introduced Mr. Wallace. “He has won every possible award in broadcasting journalism,” she said.

Wallace’s presentation was full of levity. He started out by saying that Trump is the first President to move into the White House and hang his own portrait.
He said after this election, no one knows what a president will say or do. Despite all the controversy, Wallace remarked that Trump has done some good things. He said Rush Limbaugh told him that if Trump focuses on domestic issues, nothing else will matter.

In the last 10 days, we have seen a departure from the economy – the firing of Comey, giving secrets to the Russians. “The bright side is that no one is talking about Comey right now,” Wallace stated.

“The splits inside the Republican Party seemed to have killed ‘repeal and replace the Obamacare.’ Congress is still far from the finish line,” he remarked. “The Senate Republicans made it clear they are going to write their own bill since the House bill failed.”

Tax reform is being planned by the White House. They put out a white paper with bullet points a few weeks ago. One big issue is to preserve the MID. Every deduction will be under attack in Congress. Trump has accomplished some important things in his first 30 days in office – child care, equal pay in the workplace. Wallace said he thinks Trump is facing the same thing as Obama – bitterness between the parties.

Wallace talked about moderating the final presidential debate while 72 million Americans watched. He said he was told to let them interrupt each other and talk over him. “It was his job to keep order,” he said.

During a question and answer period, Wallace was asked if he does anything to verify newsworthy information that comes to him. His reply was that at Fox, they believe everything should be examined before release. “How has Trump done as a dealmaker?” was asked by another party. Wallace replied “It’s a mixed package,” noting the Republican Party is very badly dysfunctional. They won’t make deals. It has to be on their terms or nothing at all. It’s a constant balancing act. A difference between Trump and Obama, though, is that Trump is willing to bring people in and talk to them, but Obama thought he was too good for that.
The next question posed was whether Wallace thinks it possible to bring back cooperation and bipartisanship to Washington. His reply was that it just gets worse and he doesn’t hold out much hope. He was also asked whether he sees the media as being more ethical. His reply to that was a “No.”

What would you say to Trump that would bring this sinking ship back? Wallace said he has focused on the economy and health care. He will be the President for the next 4 years. He just has to put people around him who he will listen to.

Housing/Economic Trends by Lawrence Yun, NAR Chief Economist and Mark Calabria, Asst. to the Chief Economist
Both men emphasized that NAR is working with our partners in Congress to keep them aware of our principals. NAR is working now for tax cuts for small business across-the-board. Regulatory reform is an important focus – particularly Dodd Frank. Trying to get the right people in place in Congress is paramount. This is why it is so important to participate in RPAC. In order to have a strong economy, we need a strong housing market. That is NAR’s primary goal.
Neither man sees a forthcoming recession.
Jonathan Spader, Joint Center for Housing Studies.  According to their studies, homeownership is continuing to decline, especially in the last two to three years. Statistics show we have been at 63.6% for the past two years. The question is whether homeownership is leveling out or whether this is a false statistic and just an anomaly.

There are a series of different projections – all legitimate.

Demographic factors – Aging baby boomers will reshape the age distribution of US households. The number of people 80 years of age and older is going to double in the next 20 years. 65 and older will be 66%, and then there are the millennials.

There are fewer households of married with children and that is offset by single persons and other family types.

Non-demographic factors –
Foreclosures
Slowed home purchase activity
Tighter credit
Stagnant household income
Rising rental cost
Student loan debt

When the Center asks the survey question – “Do you expect to own a home some day?” – millennials don’t look any different than anyone else.

Foreclosure explains almost all of the decline among older adults. For 35- year-olds, it does not.

According to a NAR survey, existing home sales have been rising since the election. Interest rates went up as well. People are saying it is a good time to buy.

Home prices continue to grow – by 41%, 4 times faster than income growth. Days on market are less. Housing starts have been unable to ramp up because of lack of lots, labor, lending and lumber which are keeping builders from building.

FHA reserve fund is above its legal limit, therefore, their insurance premium can be reduced. Obama said reduce, then Trump rescinded. HUD Secretary Ben Carson is going on a listening tour and will look at the figures afterward. Then Trump team will look at the figures to make a determination.

REALTORS® are saying their optimism is higher than a year ago. Mortgage applications are more than a year ago. Job opening levels are sky high. Under Trump, economic growth is expected to be 3 – 4% by year’s end.

In Colorado, 1 – 2% job creation, REALTOR® gross income is $42,500. Nearly ¼ of NAR members make less than $10,000 per year, and more than ¼ make over $100,000.

Yun forecasts a 2.2% GDP growth. The Federal Reserve will probably have two more hikes in 2017.

Low Down Payment Options for Today’s Buyer

Fannie Mae will go as low as 620 credit score, DTI 45%.

New HomeReady Mortgage. You do not have to be a first-time homebuyer. Low down payment is offered – up to 97% LTV financing with expanded DTI.

Can cancel PMI when loan gets to 80%. The program is for one unit single family or 2 to 4 units principal residence. Must be owner-occupied. They can loan up to 95% on manufactured housing that is on a foundation, no wheels. Condos have to have Fannie Mae approval. They allow co-borrowers who don’t occupy the home. (NEW) Boarder income is included as qualifying income. Rental from an accessory unit which must have a kitchen and bathroom is included. “Mattress money” can be used for a down payment. Mortgage Insurance – 25% for LTV 909 – 97%. Homeownership education is required. They have a four-hour online program at: homeready.frameworkownership.org

More than 850 lenders offer this program.

Student loan can be paid off as part of the transaction.

Professional Standards Committee Meeting and Forum

This meeting discussed photography agreements and copyright. NAR has a sample photography agreement at http://www.copyright.gov/dmea/directory

Pertaining to arbitration settlement agreements, parties may settle at any time prior to a hearing panel going into executive session to make a decision.

Association Executive Forum

RPR made a presentation about their products and how to get training at their blog site. Economic area reports can be obtained by agents, brokers, association executives. The reports can be pulled by zip code. We can set up the parameters ourselves. If we want to train others, they have a train-the-trainer video. RPR will send out a trainer to do a one-hour session with associations. They suggested we add their blog address to our website.

Non-dues revenue ideas that came up: using building as an event center; get annual sponsorships at a higher level from affiliates and give them premium seating at all events. They can also speak at New Member Orientations and CE classes about their products and services.

Rebecca Grossman of Scottsdale, AZ, said NAR allows bylaw changes without a vote of the membership on everything except membership categories.

Suggested we make sure we have a quorum for special meetings included in our bylaws.

One association purchased a sign printing company and prints signs now for all of its members. They do make money on the venture and the members gain by paying less for their signs as well as getting them faster.

Another does new member orientation two ways – live or online. Live is free, but online costs $20.

Incentivizing brokers if they bring their entire office into the association was discussed.

There was no talk of mergers or consolidations in any of the groups where I participated.

Regional Caucuses
New Mexico

300 bills were monitored at the legislature. They have 6,000 members. A new program called REALTORS® Back Children – They provide backpacks to school kids.

They just completed a three-year strat plan under which they plan to sell their old building and purchase a newer-larger one where they can have tenants and earn non-dues revenue.

Nevada
150 bills in the legislature – they are tracking 70. Use of nicknames in advertising is a big issue. They found that hosting a leadership academy has been very successful in returning benefits to the association.

Utah
15,000 members, 15% increase over last year. They have a massive statewide ad campaign on using REALTORS®. Working on affordable housing initiatives.

Colorado
Membership up 5% – now 24,500. Low inventory of houses continues to be an issue. 1.9 months’ inventory statewide. But members are still getting it done. A good legislative session – construction defect bill got passed as well as a bill that would have required broker disclosure on commissions was killed.

Passed sunset review of the real estate commission. Now able to define what a standard form is in Colorado.
Realtor.com is number 1. Up 81% over 3 years ago. Continuing to innovate and make sure we are coming up with new ways to communicate with consumers.

“The CAR’s State legislative committee set up visits on the Hill with our CO Congressmen & Senators for those attendees that wanted to participate.  See coming CAR new letters for specifics”.