Credit: Daniel Moyle

“Clearly they’re not ‘off the market,’ nor are they in your pocket. They’re not on the MLS,” clarified Robert Bailey, 2013 chair of MLSlistings Inc. in California. Bailey presented attendees with research on the growing number of homes for sale in his local area that never make it to the MLS at the REALTORS® Midyear Legislative Meetings & Trade Expo.

In a study comparing public records with MLS listings in the California communities of Monterey, San Benito, San Mateo, Santa Clara, and Santa Cruz, Bailey found that off-MLS listings increased from 12 percent in 2011 to 15 percent in 2012 to 26 percent of the market in the first quarter of 2013.

Supporters of pocket listing practices often cite situations where sellers are seeking privacy or are concerned about having strangers view their homes. Bailey said such desires are valid, but the numbers indicate a growing trend.

“Clearly they’re more concerned about privacy and security now that the market has gotten better,” Bailey said, drawing a collective chuckle from the crowd.

When asked what is driving agents to consent to the increase of this practice by sellers, Bailey said it’s largely comes down to market changes.

“I have agents who have had a very long, very hard six years,” Bailey said. He posited that some agents are using pocket listings to increase “the ability to capture leads” in a competitive, low-inventory market.

But Bailey cautioned that sellers and agents who resort to this tactic in order to avoid “doing business with the unwashed masses” could run into fair housing issues.

Because of local rules, Bailey noted that disagreement over pocket listings will vary from state to state. But he expressed concern that they could have catastrophic effects on the industry nationwide.

“Could it lead to the collapse of our MLS model as we know it today? Could it lead to the erosion of an agent’s value?” Bailey asked. “There’s not a market that’s exempt from this issue.”

NAR has not defined pocket listings, nor do they have an official policy on the practice. But Bailey urged those present at the joint meeting to avoid them.

“We’ve built our businesses on the basis of if we collaborate together… then we can operate in the best interests of the consumer,” Bailey said. “[We must] maintain our position at the center of the transaction.”

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What is a Pocket Listing?

HUD Secretary Donovan

HUD Secretary Shaun Donovan made an appearance at the National Association of REALTORS® Midyear Legislative Meetings on Wednesday to laud the work of his agency in promoting housing policies and programs that acknowledge the equal rights of gay and lesbian Americans. The agency makes clear that sexual orientation is no barrier to accessing any HUD programs, he said.

“We have a broad requirement that housing opportunities should be available to all persons regardless of sexual orientation,” said Donovan, who spoke to members gathered for a reception of the National Association of Gay & Lesbian Real Estate Professionals (NAGLREP).

But Donovan noted that there is still a long way to go on the civil rights issue that has rapidly been gaining ground in recent months and years. Noting President Obama’s strong support of marriage equality and recent same-sex marriage cases brought to the U.S. Supreme Court, Donovan added, “There is still an urgent need for legal protections based on sexual orientation.” The 45-year Fair Housing Act does not include sexual orientation as a protected class.

NAGLREP Founder and CEO Jeff Berger said he was delighted by Donovan’s appearance at the meeting and his commitment to ending discrimination in housing faced by the LGBT community. The movement clearly has momentum, he said.

Berger cited the group’s drive, working with Wisconsin REALTORS®, to get sexual orientation included as protected classes in the NAR Code of Ethics. That change was approved by NAR’s board of directors at the Midyear Meetings in 2010. Now, an effort is underway to add Code of Ethics protection based on gender orientation. The proposal will be voted on by the NAR Delegate Body at its meeting in November. Berger also hopes to get NAR to include LGBT data in future versions of its Profile of Home Buyers and Sellers and Member Profile. “It will give REALTORS® a truer picture of who is in their markets if lesbians and gays and same-sex couples were acknowledged,” Berger said.

“We have an unprecedented situation today, because so many members of Congress are new and really don’t always know how important home ownership incentives are to the economy and to the country, NAR Chief Lobbyist Jerry Giovaniello told thousands of REALTORS® packed into a 7 a.m. session today as a kick-off to their visits to Capitol Hill.

Each year thousands of REALTORS® come to Washington for the NAR Midyear Legislative Meetings & Trade Expo, which includes two days of Hill visits to champion real estate issues to their members of Congress.

This year is different, Giovaniello said, because as Congress discusses ways to reduce the federal deficit and whether to change the Tax Code, some of the government’s longstanding incentives for home ownership, including the mortgage interest deduction and other tax provisions, will come under debate. The roles of FHA and the secondary mortgage market are also shaping up to be part of the discussion.

“Our main job is really just to educate members on why these incentives have been such priorities for the federal government for so long,” said Giovaniello.

Some 43 percent of the Senate had turned over in the last six years, and in the House, more than 80 members have been in Congress for fewer than three years, many of whom have never served in public office before. “There are many members of Congress who think FHA is a lending program rather than an insurance program, so a lot of what we have to do is just educate these members about these basic things, said Giovaniello.

REALTORS® have three simple talking points they’ll be taking with them to Capitol Hill this week:

1. Preserve MID and other housing tax incentives, including the capital gains exclusion on the sale of a principal residence and the property tax deduction.
2. Protect FHA’s ability to meet its mission of helping responsible households who needs its mortgage insurance to buy a home.
3. And pave the way for the return of private capital to the secondary mortgage market while preserving an explicit, not-for-profit, government-chartered federal presence in the market.

NAR’s tax counsel, Evan Liddiard, said the conditions are the best in almost two decades for Congress to tackle sweeping tax reform, so MID and other tax incentives will be part of the discussion. Liddiard said that even if the two houses of Congress can’t craft legislation that can pass both houses, if any paring back of home ownership incentives are included in bills that at least make it through one house or another, that sets a precedent that will make it easier in later years for harmful changes to pass. “We have to head this off now,” he said.

One argument members of Congress might make in favor of paring back MID is that they need that tax cut in exchange for lowering tax rates, which would help households across the board. But because there’s no guarantee that Congress won’t turn around in a few years and raise the tax rates again, that’s not an argument that makes sense, said Giovaniello. “Once we give up something on MID, we won’t get it back,” he said.

On FHA, which has seen its reserves take a hit in recent years, REALTORS® will be carrying the message that the agency has been the unsung hero of the country’s economic recovery. It stepped up to the plate during the housing downturn and made lending possible at a time when there were few other options. Had it not done that, the country would be in a tougher place right now. And in any case, the agency’s finances are quickly improving and could soon be in positive territory once again.

“FHA is a counter-cyclical program,” said NAR Policy Analyst Megan Booth. “It’s role is to step up when other sources of funding won’t, so it did its job.”

Legislation could be coming down the pike that might seek to require borrowers to come with a higher downpayment or to pay higher insurance premiums or to meet certain income qualifications, said Booth. each of these provisions would be devastating to the agency’s mission and needs to be resisted, she said.

The main message on reform of the secondary mortgage market is that a continued federal presence, explicit and on a nonprofit basis, is essential for the preservation of the widespread availability of 30-year, fixed-rate mortgages. Private lenders without that federal backstop simply won’t make safe, long-term financing available on a widespread basis.

“We’re going to hold members accountable for how they vote on these issues,” Giovaniello said. “That’s one of the messages we need to take to Capitol Hill. We’re watching what they do.”
To reinforce the message, REALTORS® will be wearing badges on lanyards that carry a simple message: “Home ownership is not a loophole.”

Over the next two days, that message will be out in force on Capitol Hill.

Thanks to volunteer coordinator and presenter Jason Pantana for sharing his photo of the overflowing audience at Tuesday's event

Released at the Midyear Legislative Meetings & Trade Expo in Washington, D.C., the report was compiled from 16 workshops across the country in an effort to answer the question over the future of NAR in uncertain times.

“I’m glad to see that we had a small enough room for this crowd,” joked NAR 2013 President Gary Thomas. He said he was thankful for the enthusiasm, adding that broad engagement is what makes the REThink report special. “It’s coming from the members rather than a small, insular group.”

The event was so widely attended that the committee added a second session Wednesday, May 15, at 1:30 p.m. Eastern at the Omni Shoreham hotel.

The report distilled responses from 4,500 individuals who used these workshops to come up with actions that individual real estate professionals, industry players, and NAR can undertake to stay relevant in the changing world of real estate. But this was not just an exercise of pulling the curtain back on data.

“We’re here to ask your feedback,” said Strategic Planning Committee Chair Shannon W. King. “We want you to agree that these are the right issues.”

Some of the many items discussed at Tuesday’s event were “big data” issues, industry collaboration, the opening up of association leadership positions, and more. Two suggestions that garnered widespread applause among attendees were increasing professional standards for members and “taking back realtor.com,” as one facilitator quoted from the report.

Both at the local workshops and at the event at Midyear, members expressed skepticism about the engagement of NAR leadership. One of the volunteer coordinators recalled the initial backlash she experienced when organizing a local REThink seminar.

“Many of the participants just thought we were from NAR,” said Summer Greene, a volunteer coordinator and Fort Lauderdale, Fla.-based REALTOR®. “After we got past that, it was all about, ‘Is the leadership at NAR really going to listen?’”

The difference between those local information-gathering sessions and Tuesday’s presentation was that NAR leadership was present at the Washington D.C. event and made it clear that they were not only listening, but were also ready to act.

“I didn’t want to just have another plan that would sit on the shelf and gather dust,” said Thomas, “which is basically what happens with strategic plans … when it’s done, it’s done — meaning nothing happens with it typically.”

Another hot topic was the issue of who the national association should serve first and foremost: consumers or members? Many in Tuesday’s session said the association should strive to be a resource for both groups.

“We serve the consumers through the REALTORS®,” said Bob Hart, a real estate professional from Santa Barbara, Calif. “We have to empower REALTORS® to do a better job serving the consumers.”

NAR CEO Dale Stinton agreed with this sentiment, but only to a point.

“I want to serve the consumer, but only if it helps you,” he said. “Let’s deal with realtor.com, and then let’s deal with the three-way agreement. Let’s figure out what it means to serve the member.”

One theme common among facilitators, session attendees, and association leaders alike was the idea that upsetting the status quo can be a dangerous proposition.

“You can’t ever talk about a national MLS without getting into trouble. You can’t talk about the number of associations without getting in to trouble. You cant ever talk about professional standards without getting in to trouble,” Stinton warned. “What I’m here to say on behalf of leadership is we’re ready to get in trouble.”

With that, the organization’s next leader ended the lively session with a call to action.

“Your leadership team is here, and they’ve been listening,” said 2013 NAR President-elect Steve Brown. “Are you ready to stand behind your leadership team when they get in trouble?”

Vince Malta pictured with one of his prized bats

It may seem out of left field, but when NAR regional vice president Vince Malta isn’t selling homes in San Francisco, he’s collecting baseball bats hit by legendary players like Babe Ruth and Mickey Mantle. The unlikely combination is a result of deep-rooted family traditions; Malta is a third generation REALTOR® who has been in the business for 35 years, and joins his father and grandfather before him as a passionate fan of the game.

“I’ve always loved baseball since I was a child,” said Malta, CEO at Malta & Co., Inc. in San Francisco. “I got into bat collecting because I thought it was very interesting to collect a piece of history.”

And that’s where this hobby could have ended, with a few prized bats and the satisfaction of holding baseball history in his hands, if not for Malta’s real estate mind working overtime to analyze the way the bats were being sold.

“I started doing some research and it seemed like there were a couple of experts who knew about baseball bats but were also selling them,” he said. “So they wound up authenticating the very bats they were selling. In real estate, we call that a ‘conflict of interest.’”

Worse still, some of the bats for sale weren’t exactly priceless memorabilia worthy of glass display. But it would take years of conducting research and scouring decades-old factory records before Malta could decipher the legitimate from the lies.

“I bought a game-used Jackie Robinson-autographed bat and thought, ‘wow that’s really cool,’” Malta recalls. This cool factor quickly thawed when he returned to the bat years later, armed with extensive knowledge about its production and make. He analyzed the model, concluding the bat was rendered in 1973; a fine year for the Oakland Atheltics to defeat the New York Mets in a seven-game World Series thriller, but for Jackie Robinson—who stopped playing baseball in 1956 and passed away in 1972—using that bat would have been, well, impossible.

“People were telling you things and giving you stories about the bats that just weren’t accurate,” Malta said. “I think the bat needs to speak for itself.”

It’s a dictum that can resonate in real estate as well as baseball—an agent can stage a house with all the shiny bells and whistles, even provide anecdotes about how much fun the home owner’s children had playing in the spacious backyard, but in the end, the property must speak to the buyer.

However, it still helps to have those words interpreted by someone in the know.

“There will always be a person out there who will sell you something,” Malta said. “You need a facilitator with knowledge guiding you through the process.”

To Malta, this is why authenticating bats can’t be an act of whimsy; it must be a serious practice—as complex as a real estate transaction—determined by things like labeling, wood type, and the hitting characteristics of the player who purportedly used the bat at that time.

Even the National Baseball Hall of Fame staff keeps extra copies of Malta’s book, “A Complete Reference Guide Louisville Slugger Professional Player Bats,” on hand. The publication is widely acknowledged as the most comprehensive manual for collectors of Hall of Fame players’ bats. The Guide was a labor of love for Malta, who worked in conjunction with Jack Hillerich, grandson of John A. “Bud” Hillerich—maker of the first player-customized baseball bat—to gain access to Louisville Slugger factory records.

Since its release in 2007, the book has established Malta as one of the foremost authorities on bat collecting. More than just a baseball textbook, it weaves the history of the sport throughout its pages, in a narrative enriched by Malta’s own experiences meeting the greats of the game. “Many of the players are so warm and personable,” Malta said, listing Ernie Banks and Brooks Robinson among those he enjoyed speaking with.

But some of his most frame-worthy baseball encounters occurred on the job. At an NAR meeting in 2005, while sitting with his wife, 13-year-old son, and 1984 Hall of Fame inductee Harmon Killebrew, (an invited guest at the event), Malta’s wife casually mentioned to the right-hander that her son was having a tough time at the plate. Immediately, Killebrew stood the struggling young player up and began to give him a batting lesson. “It’s all in the hips,” he instructed, as REALTORS®—and the Maltas—watched in awe.

“We still have the picture of Harmon Killebrew giving my son tips,” Malta said. “I love that players are so open and such great ambassadors of the game.”

As an ambassador of homes, it’s easy for Malta to see the connection between his favorite sport and the real estate profession. “We provide a valuable service,” he said. “People can consider what we do like baseball bat authenticating: We make sure they get what they expect.”

It’s not that no tax is due when something is purchased in a different state over the Internet. A tax is in fact due, but states have no way of systematically collecting it. And a Supreme Court case from 1992 prohibits them from requiring out-of-state retailers to collect the tax on their behalf.

As a result, it’s largely been up to buyers to pay the tax, in the form of a “use tax,” but they rarely do. Correcting this disparity is the rationale behind the Marketplace Fairness Act, S. 366, which the Senate is set to pass any day now. Lawmakers and analysts generally agree that the bill will in fact pass, and then it needs to be taken up in the House, where the outcome is less clear.

NAR supports the bill, mainly for two reasons. First, it will help the commercial real estate sector, which finds the playing field tilted against it as buyers go online to buy things from vendors in another state that, if bought in a store, would require them to pay state tax. Second, it’s a good bill for states, because it will bring in tax revenue that’s owed to them, helping those with a budget gap improve their bottom line. By some estimates, states are losing out on more than $20 billion a year.

Critics say the bill equates to a new tax, but in fact the tax is already in place. The bill is intended to make it practical and simple for states to collect what they’re owed.

There are plenty of arguments on both sides of the issue, but for the real estate industry, it’s simply about creating an even playing field between them and Internet retailers. In the 4-minute video above, NAR Government Affairs analysts talk about the bill and why NAR supports it.

Access NAR’s letter in support of the bill.

• First-time home buyers are more willing to compromise on the house, but not on the neighborhood.
• Most first-time home buyers cut out on luxury items (42 percent) and entertainment (35 percent) to save for a home.
• The average age of the first-time home buyer is 31.

Click on the image below for the full-sized infographic.

1984 NAR President Donald Treadwell

The REALTOR® family lost one of its most well-known and distinguished leaders when NAR’s 1984 president, Donald H. Treadwell, passed away March 30. As president of NAR, Treadwell helped the association become more politically active, launching a voter registration campaign as part of the REALTORS® Active in Politics program and lobbying to prevent major cuts to HUD’s budget and to preserve the mortgage-interest deduction (MID).

Treadwell also started the “On Your Mark” campaign to promote awareness of the REALTOR® trademark among members and consumers.

Treadwell’s real estate career started in 1935 when he began working summers at his father’s real estate office in Detroit. After earning both a bachelor’s and a law degree from the University of Michigan, he served in the U.S. Coast Guard, participating in the Battle of Okinawa in World War II. He became a REALTOR® in 1946.

Treadwell served as president of the Michigan Association of REALTORS® in 1959 and was named the state’s first REALTOR® of the Year in 1965. He also served on the NAR Board of Directors, was a regional vice president for Michigan and Ohio, and was on numerous NAR committees — most recently the Research Committee in 2004.

In both his business and association roles, he was interested in the role that technology played in real estate. His son, Donald Treadwell Jr., said he got a computer for his business back in the mid-1970s — still a rarity in the industry — for bookkeeping and database services.

“He constantly wanted to learn things,” said Treadwell Jr., a real estate practitioner himself and past president of the Down River Association of REALTORS®, based in Trenton, Mich., near Detroit. “One of the last conversations he had with me was a discussion of the huge impact the digital age was having on society and real estate in particular.”

Treadwell Jr. added that his father understood how to get greatness out of the people, whether they were part of his staff, across the closing table, or association volunteers and employees.

“There’s always a fine line between trying to get them to do their best and putting too much of a burden on them,” he explained. “He was very supportive and fair.”

The former NAR president is survived by his wife, Marjorie; five of his six children, and numerous grandchildren. To learn more about his service to NAR, you can read his official biography at REALTOR.org.

It’s with the aim of tapping into promising early-stage companies like this that NAR’s strategic investment arm, Second Century Ventures, last year conceived its REach Technology Accelerator program, which just recently announced the first seven companies it’s partnering with.

The goal is to connect the executives of these early-stage companies with mentors in the real estate industry so they can aim to do two things: offer products that fit the needs of real estate, and become a financial success, because a useful product can only be as strong as the company behind it.

This “mentorship” process under REach lasts nine months, and already the executives in this first class of REach partners have begun their immersion into the real estate industry. They’ll meet with NAR staff, brokers, association and MLS executives, among others, on a regular basis, ultimately to the benefit of real estate brokers and associates and others in the industry to the extent their products add value to the industry.

In addition to Updater, there’s  BombBomb, an e-mail video marketing platform, Lumentus, a social media communications center, Planwise, a consumer financial planning tool that brokers and associates can host, Reach150, an online reputation management tool, Treater, a gifting service on a mobile social media platform, and Workface, a live text, audio and video communications system.

Reach’s goal is to bring on more companies in the years to come. It’s pretty exciting.

You can meet the executives of this first group of REach partners and hear how NAR’s mentoring is helping them as they try to bring their products to real estate in the 6-minute video above. Also, you can help shape their products by signing up to beta test them.

Photo by Katie Beth Clark taken moments before the blasts

In an empty real estate office on Boylston Street, dozens of homemade calzones sit uneaten, and slices of pizza — now spoiled — lay near half-empty juice boxes and soda cans scattered across the floor. This may not be the most iconic image to come out of the Boston Marathon bombings, but it’s a still-life snapshot of the chaos that erupted from a celebration so profoundly American, it has its roots in the Revolutionary War.

Every year on Patriot’s Day, the Charlesgate Realty Group holds an “open house” party for friends, family, and clients to commemorate the holiday and watch the marathon runners as they charge toward the finish line. Every year they gather to observe the triumphant athletes; every year they await those famous calzones.

But this was not every year.

“In the blink of an eye, we had to clear the whole party out,” says P.T. Vineburgh, founding partner of Charlesgate. Vineburgh felt a first then second explosion — the second less than half a block away — and saw a panicked crowd fleeing the street.

Immediately, he knew something wasn’t right. “With two explosions, I thought it was way too coincidental for it to be gas lines,” Vineburgh says. “I told everyone to leave through the back door.”

When the group was outside, all accounted for and safe, Vineburgh noted how brightly the sun was shining, a strange moment of darkness meeting light. “It was pushing 60 degrees and really our first taste of spring,” he says. “And that’s exactly how it should have been; this was supposed to be the quintessential Boston family day.”

Though he’s not even sure when he’ll regain access to his office — located inside the restricted crime scene — Vineburgh is certain the city will revive itself with full vigor, and soon.

“The year the Bruins won the Stanley Cup, there were a million people at the parade,” he says. “You’ll see that times 10 because this isn’t sports; this is real life.”

Other local REALTORS® agree, and association leadership is sending a message of support and strength to the down —but by no means out — community. “We Bostonians, we’re resilient, and I have no doubt we’ll get back out there and do our thing,” says Joe Schutt, YPN chair of the Massachusetts Association of REALTORS®, adding that the concern and help pouring in from across the country has been overwhelming. In an instant, hundred-year-old baseball rivalries vanished, much like a well-hit ball sailing over the Green Monster’s 37-foot wall at Fenway Park.

“When something happens on American soil, our country pulls together,” says Schutt, also broker/owner of Unit Realty Group in Back Bay, Mass. “We may have these rivalries, but in the end, we’re really one America.”

The solidarity is good news for the REALTORS® of Massachusetts, especially with at least one member of MAR seriously wounded, and others still shaken up from the events of the day.

“I thought something was falling from the sky,” says Katie Beth Clark, a REALTOR® in Brookline, Mass., who was standing near the finish line when the bombs went off. “I heard the noise and saw people hitting the ground; I just started bawling.”

And to all those affected in the real estate community, they should know they aren’t alone.

“We’re here to stand behind anyone and everyone,” Schutt says. “We’re prepared to do everything we can.”

But this benevolence and loyalty is nothing new, in fact, it’s symptomatic of the job. “The REALTOR® family is strong,” says Marilyn Jarvis, President of the Certified Residential Specialists’ Massachusetts Chapter. “We may be fierce competitors when sitting across the table from one another, but if something comes up, we rally together like nothing else.”

Jarvis, whose partner of 15 years is an amputee due to health-related reasons, has already set up a fund for those wishing to donate to the bombing victims. It’s a deeply personal effort coming from someone who understands the dire consequences of losing a limb.

“I truly know what some of these people have ahead of them,” Jarvis says. “From the smallest to the biggest of details, their lives will be different, but we’re going to be there to give them our help.”

With calls coming in from around the nation, Jarvis is confident the fledgling program will become a success; and a much needed monetary source for those unaware of the challenges ahead. “You can’t go out to dinner the same way again,” she says. “How do you drive a car? Who will walk your dog? It’s the little, everyday things that will affect them most.”

For these victims — and a city — in need of mending, it seems the restoration has already begun. “Boston is full of strong, prideful people,” Vineburgh says, recalling how “eerily quiet” the town was the night of the bombings. Now as routine, rejuvenation, and the revelry characteristic of Boston returns, residents like Vineburgh look to brighter days ahead. His office may be inaccessible and full of cold calzones, but he’s already planning on another marathon-watching party next year, “without a doubt!”