Luxury Real Estate News Los Angeles

Latest Realty News from NAR

Pezzini Real Estate Agent 

Can an EU Rule Impact Your Real Estate Business? It Might

What authority does the European Union have over your real estate business? That’s a tricky question, but an E.U. rule that takes effect next month could end up affecting your business in some manner. That’s because any European that comes to your web site to browse listings will be covered by what’s called the GDPR. That stands for General Data Protection Regulation and it won’t let your web site drop a cookie on a European’s computer unless you get affirmative consent. That means a box that says something like, “We use cookies. OK if we put one on your computer?,” has to pop up when someone from the European Economic Area comes to your web site. What’s more, if you process data on a European you have to be ready to delete that data if you’re requested to. That means you have to have a way to identify  that data so you can take the action requested.

As you can imagine, how the EU would enforce this is a big, unanswered question. There will probably be litigation, too. So, it’s possible it will be a while before anything actually happens that affects U.S. businesses. But there are other things to keep in mind. First, the United States might align its rules with the E.U. Second, regardless of that, many U.S. businesses might align their online privacy and security  practices with the E.U. model, regardless of enforcement. That means you’ll probably see more U.S. companies asking for affirmative consent when anyone comes to their web sites. Third, there could be alignment with European rules on data processing, too.

This is all speculation. The rule is real but it’s actual impact here can’t be fully known yet. But you can see where things are heading and it’s not a bad idea to take steps to be prepared for however things shake out.

NAR will be hosting a Facebook Live webcast next week, on Tuesday, April 24, at 1 p.m., Central time (2 p.m., Eastern time) to walk you through what’s happening and what you might do to be ready. The presenters will be Finley Maxson, NAR senior counsel, and Liz Sturrock, NAR vice president of information technology. They’ll be talking with Meg White, managing editor of REALTOR® Magazine.

You’re encouraged to ask questions. Here’s more information on the event: EU Privacy Rule: Are You Impacted?

How Suburbanization Impacts Rural Home Loans

Federally backed home loans from the Rural Housing Service have been called one of the the government’s best kept secrets because buyers can get safe, affordable mortgage financing in areas where few other loan options are available. The underwriting requirements are considered both strong and reasonable, and, maybe most important, homes that wouldn’t be eligible for loans by conventional lenders are often eligible under the federal program. That’s because RHS recognizes that in rural areas, houses are not always built to meet the needs of suburban or urban buyers. The agency’s old name—Farmers Home Administration (FmHA)—says a lot about where the agency is coming from.

That’s why it’s significant that the U.S. Department of Agriculture, which oversees RHS, undertook a reassessment of what constitutes a rural area. That assessment was just completed and in about two months—June 4—a new map of rural areas takes affect. When it does, some areas that used to be considered rural are no longer considered that. One example is Ashburn, Va. Like so many areas in Northern Virginia, it’s being swallowed up by the D.C. metropolitan area. It’s now another suburb.

That means households who might struggle to get financing to buy a home can no longer count on direct or guaranteed loans from RHS. They’ll have to find conventional financing or maybe try FHA.

The good news for buyers in many of these new suburbs is their choice in lenders has probably increased along with the area’s population. In other words, maybe RHS is less needed now, because conventional lenders have moved in to take advantage of the area’s growth. But every area is different. There are probably a number of areas where the choice in lenders hasn’t kept up with growth, so the RHS loans will be missed.

In any case, it makes sense to learn if your area has been affected. The latest Voice for Real Estate news video from NAR talks about this and walks you through how you can see the status of your area.

The video also looks at some things FEMA is doing to encourage growth in private flood insurance options. Thanks in large part to a new consumer advocate in the Federal Emergency Management Agency, the agency said it will allow homeowners to drop their federal coverage and get private coverage instead without incurring any penalty. Prior to this change, you couldn’t do that. You had to keep your federal coverage even if you found cheaper or better private coverage. That consumer advocate, by the way, is there in large part thanks to NAR, which made sure it was part of flood insurance reform legislation that passed a few years ago. We’re now seeing the benefits of that.

In another change, insurance companies that offer the federal coverage can now also offer a private alternative. Again, that wasn’t allowed before. There are a few more improvements like that. The video walks you through them.

Also in the video is an update on competition in the real estate industry. You might recall that it was 10 years ago that NAR and the U.S. Department of Justice entered into an agreement to make sure virtual office websites (VOWs) are treated the same as brick and mortar brokerages in obtaining MLS data to share with people. That agreement expires later this year and the first of two workshops was held in Washington looking at the state of competition today. NAR Associate General Counsel Ralph Holmen (retired) participated in that workshop and made the point that the VOW business model wasn’t a big part of the market 10 years ago and is even smaller today, in part because it involves creating a client relationship with people who want to look at listings on your site. For many brokerages, it’s easier just to offer up listings without having to set up that client relationship first. NAR has said it doesn’t plan to change its VOW policy when that DOJ agreement expires.

The video also excerpts from the NAR Broker Summit that was held in Nashville earlier this month and also introduces a monthly video series NAR is launching for the year, Fair Housing Focus. The video is part of NAR’s recognition of the 50-year anniversary of the Fair Housing Act.

Access and share video.

 

 

 

Infrastructure Improvement Means Real Estate Activity

When the Trump administration released its $1.5 trillion infrastructure plan last month, it set in motion a multi-year process that could eventually lead to considerable investment in communities. Of course, Congress must pass legislation to make much of it happen. Although there are some parts that the administration can do on its own, a lot of the plan will require both authorizing and funding legislation, so how close we get to that $1.5 trillion goal is dependent on what lawmakers can agree on in the next year or two.

Regardless, with the country’s roads, bridges, waterways, dams, and other public projects aging, some projects will be getting funds in the years ahead whether or not the plan is all or partly enacted. The question for you is, how will you get involved? Will you get involved upfront, when projects are in the planning stages, or will you get involved after projects get going? Often, bridge replacement means land transactions, because it’s not unusual for a replacement bridge to be built alongside the existing bridge. That means government might have to acquire or condemn nearby property. Or if a road is widened—will that involve acquisition or condemnation of land?

Property values tend to go up after infrastructure improvements are made. In northern Virginia, expansion of the metropolitan subway system had a tremendous impact on property values along the new tracks. Huge condo, apartment, retail, office, and mixed-use projects followed. It triggered a real estate boom.

The administration’s infrastructure plan is featured in the latest Voice for Real Estate news video from NAR. Access that segment now.

The video also looks at why NAR supports the banking reform bill that passed the Senate a couple of weeks ago, why passage of long-term reform of federal flood insurance is just as much about improving communities as it is about continuation of insurance policies, and why Congress needs to make mortgage debt forgiveness relief a permanent part of the tax code. Cyber crime and association health plans are covered, too.

Access and share video.

Audio: Dealing with Cyberthreats

Steve Spano, president and chief operating officer of the Center for Internet Security, recently visited NAR’s Washington offices to discuss techniques real estate professionals can employ to stay safe online. Listen to his comments below.

Yes, Interest on Home Equity Loans is Still Deductible

There’s been confusion since the big tax law was enacted over the deductibility of interest on home equity loans. NAR has been saying that the interest is still deductible for the part of the loan that’s used for home repairs, renovations, and additions. And that’s the correct interpretation, according to the IRS. The agency confirmed that in a memo about a week and a half ago.

VRE 82 image

The part of the loan that’s used on the house to fix something or improve it remains deductible under the new tax law. Loan proceeds that are used for personal living expenses or anything not related to improving the home are not deductible.

The clarification is looked at in the latest Voice for Real Estate news video from NAR.

The video also looks at an important vote in the House on so-called drive-by lawsuits. These are lawsuits filed by people who are using accessibility requirements under the Americans with Disabilities Act to extract fees from small property owners. People are sending letters to property owners alleging they have an ADA violation and threatening a lawsuit unless the owner reaches a settlement with them. The person sending the letter typically doesn’t even say what the alleged violation is. The only way the owner can find out is by going to court. Most owners end up settling as the cheaper alternative and if there was ever any violation the owner never finds out what it is.

The House passed a bill requiring people who send these letters to identify what the alleged violation is and to give owners a chance to correct the problem before taking them to court. It’s a solution that addresses a clear abuse of an important law and NAR supported its passage. The bill still has to be taken up in the Senate.

Other topics in the video include NAR’s Commitment to Excellence initiative, which will roll out later this year, to give NAR members a chance to voluntarily assess how well they perform on key aspects of their business, including technology, the Code of Ethics, and the forms and contracts they use.

The video also gives an update on home sales—they’re off to a slow start this year, mainly because of inventory shortages in many markets, especially among lower-cost starter homes—and what’s happening in commercial real estate. Briefly, transaction volume on small cap properties is doing okay but volume on large cap properties is slowing down.

Watch and share video.

What’s the Right Way to Structure a Marketing Service Agreement?

Real estate practitioners entering into marketing service agreements with lenders, title companies, and other settlement service providers is a well-established practice, but a recent court decision shows why you have to structure these agreements the right way.

VRE 81 image

An appellate court just ruled that it’s okay for a mortgage lender to refer business to mortgage insurers who are buying reinsurance from an affiliate of the lender, because the reinsurance is a bona fide service and the insurers are paying fair market rates for it. In other words, the arrangement doesn’t amount to a kickback.

Although the case involves a lender, insurance companies, and a reinsurer, the structure of the agreement is something that applies to the kind of marketing service agreements you might be involved in as an agent or broker. Any agreement you enter into with a lender or title company must be for actual services rendered and priced at fair market rates and not simply an arrangement for referrals.

How do you ensure a marketing agreement is appropriate under federal anti-kickback rules? The most important thing is to have it looked at by an attorney who’s familiar with the Real Estate Settlement Procedures Act, or RESPA. For a general idea, though, there are two tests you can apply:

1.Is the marketing fee you receive based on the number of referrals you make to the company, whether it’s a title company, a lender, or another service provider? If the fee corresponds to the number of referrals, you could be inviting a close look by the Consumer Financial Protection Bureau (CFPB), which is the federal agency that enforces RESPA.

2. If you have an arrangement to split costs on a joint project, like a newspaper ad, is the split reflective of what each of you get in return? For example, if you and the title company are splitting the cost of the ad down the middle, then half the ad should go to the title company and half should go to you. If the title company is covering 75 percent of the cost of the ad but only taking up 25 percent of the space, that split makes it look like the company is subsidizing 50 percent of the ad cost. Again, you could be inviting a close look by the CFPB.

Learn more about the recent court decision in the latest Voice for Real Estate news video from NAR. The video also looks at what was in the budget agreement enacted into law about two weeks ago. Among other things, the new law extends the tax deduction for mortgage insurance premiums and retains the prohibition on taxing forgiven mortgage debt as income. It also looks at why a recent Supreme Court decision on the regulation of bodies of water is important to your inbdustry.

Watch video now.

Robots are Starting to Do Showings

vre 80 stillA company called Zenplace in San Francisco is using robots to help its agents conduct showings. When people arrive at the unit, they’re greeted by what amounts to an iPad on a mobile stand that leads them around, but it’s personalized; it’s the agent’s image and voice that people see and hear. Other companies are coming out with their own versions of this.

It’s a good question whether this type of automation will take off. As people get used to buying goods at automated stores in which everything is done with your phone or credit card and no employees are around, it’s feasible mobile iPads will do the trick at showings.

aa

Screen grab from Zenplace video

Whether you like the idea or not, it’s a trend that’s poised to hit your industry. There are other tech trends you’ll be faced with whether you like them or not. One is a kind of virtual tour that’s more immersive than what you get by just wearing goggles. You get an additional tactile component, because you’re wearing gloves with sensors. Now you feel the door handle when you open the refrigerator as well as see it in multiple dimensions.

Will this be the norm six years from now? Who knows, but now that the genie’s out of the bottle, it’s not likely to get put back in.

REALTOR® Magazine spent a few days at CES in Las Vegas two weeks ago and brought back coverage of all types of tech innovations coming to real estate. CES stands for Consumer Electronics Show and it’s the big showcase each year at which companies try to wow people with what the’re cooking up for us.

You can learn more about CES and also about real estate robots in the latest Voice for Real Estate video. The video also looks at something the U.S. Department of Labor did a few weeks ago that could eventually be important to you because it promises to get the real estate industry one step closer to setting up association health plans (AHPs) for independent contractors.

The agency proposed adding “working owner” to the definition of employer for purposes of setting up AHPs, which would enable sole proprietors and small business owners to ban together for insurance under the large group market, which could make coverage available more cheaply than under the small group market. There remain a lot of hurdles, but this was a crucial step in the right direction.

The video also looks at the three-day federal government shutdown and what could happen to your pipeline of homes sales if there’s another one in a few weeks, which could happen since the short-term budget law expires in early February. If your buyers are applying for FHA-backed financing, they would probably be okay, although processing might take a bit longer. But if they[re buying a new house in a flood area, they might not be able to get flood insurance, and that would mean a delay in  closing.

Watch the video now.

Do Personality Assessments Work? Sometimes.

@maialisa, 2016. pixabay.com

@maialisa, 2016. pixabay.com

I’ve always been skeptical of personality assessments. After taking the DISC twice—once getting a D/C and more recently getting a high, nearly even I/D—I found that both results matched my personality on some levels and conflicted on others. This is where my skepticism come in. There’s truth in assessments to varying degrees.

Whether or not you’re looking into assessments for personal insight or to use as a tool for hiring, it’s important to find the right one for you. Recently, I wrote a piece for REALTOR® Magazine on EQ vs. IQ, which examines the concept of emotional intelligence and how it relates to working with clients. I interviewed experts in the field who offered actionable tips for getting in touch with your EQ and applying it to your job in real estate. The article is divided into three parts, and in the last section—which is targeted at broker-owners or hiring managers—I dive into how to recruit high-EQ candidates.

As part of my research, I took Keller Williams Realty’s Keller Personality Assessment (KPA), which I found to be the most accurate and enlightening assessment I’ve experienced to date. It encapsulated so many idiosyncrasies of my personality that it was astonishing. But I shouldn’t be surprised since their business model is all about building teams that work well together. What better way to get a window into a person’s true self than by asking them to take an assessment to learn how they’ll fit in with your group? The key word in that question is “window.”

Whether you’re using DISC, a brokerage tool like KW’s KPA, or another test, such as the Caliper Profile, look at it as one piece of the puzzle (e.g. don’t put all your eggs in one basket). You still need to make sure you’re recruiting the right person or making a good hire. Here are some takeaways after taking the KPA:

Know what you’re assessing. Hiring someone just because you like them or you “click” isn’t always a good idea. Really consider the skillset the job requires before administering the assessment. Know what you’re looking for and have a checklist. Make sure you’re judging candidates not only on their strengths but how those strengths might serve as either pros or cons in a specific position.

@Clker-Free-Vector-Images, 2014. pixabay.com

@Clker-Free-Vector-Images, 2014. pixabay.com

Understand that an assessment might not tell the whole story. Some candidates can overthink their responses when taking an assessment, which may affect accuracy. That’s why it’s imperative to ask follow-up questions pertaining to the results of any tests you administer. Ask the candidate how they feel about the results and how accurate they think they are. Ask for examples pertaining to candidates’ assessed strengths as they’ve played out in real-life or on-the-job.

Don’t put people in a box. I hate using that box cliché, but it’s true. Many assessments cement a person as one way or another, failing to consider how one trait might inform other characteristics. For instance, my high responsiveness, spontaneity, and logical problem-solving skills, coupled with my desire for independence, means I work best in environments that are busy, active, and give me a range of responsibilities to manage. But looking at each of those traits independently, you might not draw that conclusion.

In-person interviews are best. It’s much easier to read someone’s comfort level when you see their body language. You can also give them insight into your company culture. And according to Karina Loken, president of The Loken Group with Keller Williams Luxury International in Houston, if a candidate feels your office is a good fit for them, it’s always good for your organization.

 Read More: Is EQ More Powerful Than IQ?


 

DON'T MISS A NEW LISTING AGAIN!
Register Now
Already registered? Login

FREE AUTOMATED EMAIL UPDATES
Sign in to take advantage of all this site has to offer. Save your favorite listings and searches – also receive email updates when listings you like come on the market for free!
*Contact Information is NOT Shared*

Contact Me







* fields are required

Luis Pezzini | Fair Housing OpportunityPezzini Luxury Homes | 310-275-2076 | Email Us

Hollywood Blvd, Los Angeles, CA 90069, United States