Growing up to Meet the Times

WWW.MIREALTORS.COM 13 SEPTEMBER 20 SEPTEMBER

Growing up To meeT the times

PLUS: The Myth of Multi-tasking Working To Get Listings Green Renovations The EMD Hot Potato Protection from Scams Volume 12 | Number 5 Volume Who Says You Can’t Have It All?

Free yourself, and discover an innovative, smart and portable way to increase productivity and efficiency in your real estate business with EXIT Realty’s Total Office Resource Center. Your business. Your life. All in one place.

ConneCt with me to learn more

Craig Witt, President - North Central Division 1-877-669-3948, [email protected] www.exitrealty.com/michigan

Forget game-changer, let’s talk about life-changer! EXITRealtyMichigan_September2013.indd 2 7/4/2013 1:11:07 PM 09.13 Who Says You Can’t Have It All? TABLE OF CONTENTS Features 07 Keeping Scammers at Bay Here are a lot of ways to protect yourself by Robert Siciliano 10 How Green is Your Renovation Project? Smart makeovers can save you money in the long run by Brent Wayne COVER STORY 14 Michigan’s MLSs Coming of Age Changing with the times helps everybody 18 It is Time to Forsake Multi-tasking Often the more you do, the less you accomplish by Jeff Davidson 21 Earning the Business! Give customers good reasons to hire you by Marcus Wally 24 Appraisers Must Understand Michigan’s Appraisal License Laws There’s more to them than meets the eye by Micheal R. Lohmeier

Departments 02 President’s Report Keys to a commercial lease by Bill Milliken 04 Capitol Report Seeing the trees for the forest Free yourself, and discover an innovative, smart and by Brad Ward 26 Legal Lines portable way to increase productivity and efficiency in your real estate EMDs: It never stops by Gregory L. McLelland, Esq. business with EXIT Realty’s Total Office Resource Center.

Your business. Your life. All in one place. 01

ConneCt with me to learn more

Craig Witt, President - North Central Division

1-877-669-3948, [email protected] www.exitrealty.com/michigan { September | Two Thousand & Thirteen | Volume Twelve | Number Five }

Forget game-changer, let’s talk about life-changer! WWW.MIREALTORS.COM MAR EXITRealtyMichigan_September2013.indd 2 7/4/2013 1:11:07 PM 09.13 Keys to a Commercial Lease RT O Last month the owner of a large residential Comparison Shopping brokerage firm that was experiencing considerable Look at enough properties to make a useful growth commiserated with me about the chal- comparison of them. Include your current space REP lenges she was facing finding new office space. We in this analysis. Compare price, amenities, con- discussed the pros and cons of the marketplace, struction quality, neighbors and parking. Also, and found a solution to the seemingly insoluble check out the landlord. Who owns the building? problem with which she had been wrestling. What is their reputation in the market? If you are It occurred to me that setting forth the basics a tenant, whom will you call when the property of a search for commercial space might help guide needs maintenance? Try talking with neighboring others through this thicket. Obviously, this primer tenants about their experience in the building. applies to a range of commercial property searches: Homing In On The Right Address To Lease or Not to Lease One or two of the prospective properties will There are many reasons businesses lease rise to the top. If the tenants are required to pay real estate. Not the least of these is the fact the cost of utilities in suites, check to see if it is that someone else may own the prime loca- separately metered (i.e., gas, electricity, maybe wa- tion a business has to have. Other reasons to ter), and that the respective meters serve that space

PRESIDENT’S lease are: the “flexible financing” it provides, the alone. Scaled, “as-built” architectural drawings of relatively short-term commitment it requires, the space can enable you to verify the landlord’s or the ease with which a lease can meet the square footage calculations. “Rentable” and “usable” space needs of a rapidly growing company. square footage are terms you should understand; Know anyone who has relocated their busi- they can have substantial economic consequences. ness recently? It does not always go well. Some people would rather have major surgery than This Is The Dirty Part move again. Of these, some tenants are just If suite construction is necessary to remodel the plain unlucky. Others could have managed the “number one” space to suit your needs, take the process better and saved themselves and their time to understand the process. There are enor- companies lots of lost workdays and stress. mous pitfalls in time, money and frustration which Planning, Planning, Planning people you might know have fallen into, so check with acquaintances who have undertaken similar Regretfully, there are no rules etched in stone moves. You can avoid the pitfalls if you are working about when to begin planning a company’s move. with competent professionals. Depending on the The rule that may as well be etched in stone, how- terms of the prospective landlord/tenant relation- ever, is that your current lease has an expiration ship, get a “comfort level” with the owner’s ability date; and your landlord may rent your space to to deliver the specified improvements on time. Ask someone else after that date. In other words, you to meet with the architect, maybe the contrac- could be out on the street, unless you plan ahead. tor, too. Be certain everyone agrees your projected A Year Ahead? move-in date is realistic. Ask for a construction “time line” against which you can measure progress The actual timing is driven by many variables; when the work begins. Be wary of “change orders.” 02 space availability on the market, company size, nec- That’s where the budget begins to fall apart. essary specialized improvements, etc. But, try start- ing as much as a year ahead. Doing so will give the Attorneys Have A Place company a sense of the market; a chance to learn Real estate, whether it is owned or rented, what the supply of available space is and how much continues to get more sophisticated. A real estate it costs. If you use a real estate brokerage firm, it broker’s market savvy will save you time and per- will also give you a chance to see how you and your haps money. Also, find a good attorney with real

| SEPTEMBER 2013 broker work together. The bad news is that nei- ® estate experience in your market. The attorney’s job ther landlords nor brokers are going to brim with is to solidify all the good intentions you and your excitement when they hear from you at this early broker and your colleagues brought to the table

REALTOR stage. The interests of the company are at stake, MAR

N in a legally binding document; the Lease. aren’t they? Think of this period as the insurance GA I

CH premium you pay toward your successful move. I M

by Bill Milliken, CCIM, CIPS Commercial Board of REALTORS® COMING EVENTS Michigan Association of REALTORS®

September 26, 2013 PRESIDENT 2014 MAR Director Elections Bill Milliken CCIM, CIPS Online Voting Polls Close CBOR: 734.821.4321 [email protected] September 25-27, 2013 PRESIDENT-ELECT MAR Convention & Expo Carol Griffith Soaring Eagle Casino & Resort GRI Mt. Pleasant LV: 810.227.1016 [email protected] November 8-11, 2013 TREASURER NAR REALTOR® Conference & Expo Gene Szpeinski Moscone Center CRS, GRI San Francisco, CA GRAR/CAR/CBOR: 616.235.0900 [email protected] CHIEF EXECUTIVE OFFICER Bill Martin RCE [email protected] EDITOR & ADVERTISING Joe Kras MBA, SAG-AFTRA [email protected]

Find MAR on your favorite social networking sites: 2013 MAR Board of Directors: District 1 Jason Copeman, (Upper Peninsula Association of REALTORS®); District 2 Matthew Case, (Traverse Area Association of REALTORS®); District 3 Lola Audu, (Grand Rapids Association of REALTORS®); District 4 Rick Loose, (Midland Board of REALTORS®); District 5 Art Yeotis, (Flint Area Association of REALTORS®); District 6 Carl Kaminski, (Southwestern Michigan Association of REALTORS®); District 7 Matt Davis, (Battle Creek Area Association of REALTORS®); District 9 Allan Daniels, (North Oakland County Board of REALTORS®); District 10 Tom Kotzian, (Greater Metropolitan Association of REALTORS®); District 11 Gary Reggish, (Greater Metropolitan Association of REALTORS®); District 12 Gerald Miller, (Greater Metropolitan Association of REALTORS®); District 13 George Smale, (Grosse Pointe Board of REALTORS®); District 14 David Botsford, (North Oakland County Board of REALTORS®); Past President Bob Taylor (Greater Metropolitan Association of REALTORS®); Large Office Kelly Sweeney, (Greater Metropolitan Association of REALTORS®); Large Office Tom Paarlberg, (Grand Rapids Association of REALTORS®); Rod Alderink (CAR) (MiCAR Representative); Randy Thomas (CBOR) (MiCAR Representative); MRAEC Rep. Bob Adamowski (Bay County REALTOR® Association)

Michigan REALTOR® provides information about the real estate profession and news of MAR and its members. Opinions expressed in signed feature articles are those of the author and do not necessarily reflect the viewpoint of the Michigan Association of REALTORS®. Advertising of property, services or products herein does not imply 03 endorsement by MAR.

Michigan REALTOR® (ISSN 1053-4598, USPS 942-280) is published six times per year (January, March, May, August, September, November) by the Michigan Association of REALTORS®, 720 N. Washington Ave., Lansing, MI 48906.

Address letters, address changes and inquiries to: Michigan REALTOR®, 720 N. Washington Ave., Lansing, MI 48906: 800.454.7842 : Fax 517.334.5568. www.mirealtors. com: e-mail [email protected]. Subscription rates: $8 per year (included in dues) for NAR REALTOR® Action Center App members, $25/year nonmembers. Periodicals postage-paid in Lansing, Michigan 48924 and additional mailing offices. POSTMASTER: Send address changes to the Get the latest political news and headlines on issues affecting Michigan REALTOR®, 720 N. Washington Ave., Lansing, MI 48906 REALTORS® and take action on a Call for Action right from your phone. Go to www.realtoractioncenter.com/realtor-party for details, or scan the QR Code.

WWW.MIREALTORS.COM MAR Seeing the Trees for the Forest

Reporting on government affairs activities is Improving the Michigan State Housing often tricky because our association is involved in Development Authority so many pieces of legislation and policy discus- REPORT The MAR is working with the Michigan State sions throughout the year. Any of your fellow Housing Development Authority (MSHDA) on REALTOR® members serving on the MAR a package of bills to provide additional efficien- Public Policy Committee can attest to that fact. cies and improvements to their current slate of As larger issues make their way to the forefront, programs. The legislation builds upon the as- like our recent victory to preserve the foreclo- sociation’s proud partnership with MSHDA sure redemption period, smaller issues are often and creates additional opportunities in the given little fanfare in this Capitol Report. market for low and moderate income families. The MAR E-News, On The MARk newsletter, The package consists of Senate Bills 345, 346, and the MAR video casts have become the forum and 347, sponsored by Senators Mike Kowall CAPITOL for the most cutting-edge information on ALL of (R- White Lake), Virgil Smith (D- Detroit), and our legislative efforts. I say it is time that we give Mark Jansen (R- Gaines Twp.), respectively. these “other” issues their due acknowledgement in Senate Bill 346 is an important piece of this this month’s report. Hopefully, this month’s column legislation that will clearly define MSHDA as provides insight to the breadth of issues that the Michigan’s “sole state public housing agency.” Public Policy Committee and MAR Government This clarification will allow the authority to work Affairs staff are working on throughout the year. more efficiently with federal entities such as the Michigan Wetlands Program Department of Housing and Urban Development (HUD) to assist Michigan homebuyers. Under Over the years, MAR has worked with other the proposed bills, MSHDA will be given the interest groups to preserve the unique status of authority to create a mezzanine investment fund Michigan to control its own wetlands program for investing in multi-family housing projects. The outside of the Environmental Protection Agency. goal is to provide gap financing for multi-family This program has benefited our State and REAL- housing projects that is lacking in the current TORS® by providing clear and consistent regula- market. The fund will be made up of seed money tion, faster permitting decisions and a fair appeals from MSHDA and will be supported by ad- process. This year, Senator Mike Green (R- May- ditional in-state and out-of-state investment. ville) introduced Senate Bill 163, which represents All of the bills passed the Senate with large many years of work by the Michigan Department bipartisan support. The three-bill package awaits of Environmental Quality, the MAR and other passage by the Michigan House of Representa- stakeholder groups to find continued efficiencies tives. The MAR Public Policy Committee sup- for this regulatory program. The bill further ad- ports this legislation to further the mission of dressed needed issues to maintain our program; MSHDA in providing housing assistance. one that stands apart from the federal government. MAR members and staff have taken part in a Principal Residence Exemption for number of Senator Green’s work groups to ensure Real Estate Owned Properties that private property rights would be protected under the wetlands legislation. The product of Earlier this year we reported extensively on these work group meetings is a bill that improves legislation to streamline the process for allow- 04 upon current definitions within the act, expedites ing homes in a lenders inventory to retain their permitting for certain activities, and improves the Principal Residence Exemption (PRE). This flexibility of mitigation requirements. I am happy legislation allows for prospective REO home to report that the Senate and the House passed the buyers to qualify for financing based on lower bill and that Governor Snyder signed it into law property taxes and begin paying the PRE rate on July 2nd. As a result, applicants for wetland per- upon moving into the home. As many of our mits can expect more certainty and timeliness from members know, higher taxes for escrow pur- | SEPTEMBER 2013 ® the department. The new law strikes an important poses can often result in homebuyers missing balance between protecting Michigan’s water re- out on an opportunity to purchase a new home. sources and promoting economic development. Despite opposition from the Department of REALTOR

N Treasury, House Bill 4135, sponsored by Rep- GA

I resentative Frank Foster (R- Petoskey) received CH I M

by Brad Ward Vice President of Public Policy and Legal Affairs “… as larger issues make their way to the forefront … smaller issues are often given little fanfare in this Capitol Report ... I say it is time that we give these “other” issues their due acknowledgement in this month’s report.”

bi-partisan support when it was reported out of the House ing weeks, the legislature will be rolling out bills based Tax Policy Committee. The bill still remains very much in on our front-loaded efforts with legislation benefiting play this year as it awaits action on the House floor. The REALTORS®, their clients, and the environment. MAR policy staff continues to work with Representative MAR worked with the Department of Licensing and Foster’s office and the Department of Treasury to exam- Regulatory Affairs (LARA) to reach an agreement on ex- ine the full fiscal impact of this legislation. It is important panding the opportunities for continuing education as well that legislators understand the long term effects this policy as streamlining the approval of courses and license renewals. could have in stabilizing property values and eliminat- The association also has strong support for efforts to create ing REO inventory to fuel our current market recovery. a statewide septic code that reduces duplicative regulation and allows for further approval of alternative systems. Ad- Issues on the Horizon ditionally, the MAR is responding to concerns from our local In addition to these bills already in the process, the associations over the access to local property tax records. MAR Public Policy Committee remains involved in Rest assured, we will keep you up to date and informed on drafting a few pieces of critical legislation that have not these issues through all of our MAR communications. Please received formal legislative introduction. In the com- follow further developments through MAR E-news, On the MARk, and our Government Affairs Videocasts. MAR

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WWW.MIREALTORS.COM MAR 08 MICHIGANREALTOR® | SEPTEMBER 2013 8 W 5 M it, you reduce associatedwithcontractor fraud. therisks happentoyouthat thiscan anddoyour besttoprevent that nobodycan. Butifyou enough to know are smart them,looking toscam are thinkthey andthey sosmart People are thatsomeone naïve may andhave be noclue set ofpros andcons; useeachresource. andscammers whoknow someone.family Each resource provides itsown search, and orby tofriends Craigslist makingsome calls paper, section ofthelocal ing viatheclassified an online search outreputable contractorsfairpric- whooffer you’ll way orfurnace?At some point, you will. And whenyou do, inoldmovies).spies carried And, there because are more eras, microphones, (justlikethe andpositioning devices personal data, are cam- andthey equipped withsmall even connected, are some smartphones always carry usually they you.ties tofool And withmobiledevices, thisisnodifferent. tohidetheiractivi- useoftechnology makefull he orshewill copiesandpastesthead and scammer ing peoplewhoare looking torent.” are thieves attack- thatidentity surprise theft market,tity iswhy which it’s no now.right Turns out, soistheonline iden- harder tobuyahome—the rental market ishot requirements ismakingit getting for amortgage—which thelistingIpostedhad expired.ing wasactive after andeven on mydoorwhilethelist- andknock intomydriveway pull ended uprelisting athird of for myaskingprice. People would C Need roof, home system, anew security kitchen, drive- our The threatisalsohighbecause toourmobiledevices A cybercriminal’s timejobiscreatingcrimes, full new and Here’s works. often how thescam The reports,Business Insider lendershave tightenedtheir “Since rent for onthatscammers Craigslist I once listedaproperty R lassifie educe ore ays

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obile built-in devices options (likecamerasand built-in devices options r A can takeadvantageofanysecurityholes. complex, increasingthewaythatcybercriminals makes theoperatingsystemsandappsmore microphones) comparedwithcomputers,it d i s voi k. s R P eople don’t dotheirhomework. ipe d C S ecur F ontra or ity R en ctor T tal ips F F rau rau d d intelligent tothecontractor by questions. askingtheright minutes reading save you can moneyandmakeyou sound teachyou.that can two minutessearching and20 Spending ” websites there of are plenty (or “do-it-yourself “DIY”) alarm may notbesomething you how wanttolearn do, needed todothejobathand. roof a new or home While 20 timesduringtheperiodIwasrentingoutapartment. scammer wasequallydiligent,however:Ihadtodothisalmost Craigslist wasveryresponsiveandtookthepostsdown.The post,fraudulent [email protected] withthelink. if itwasbeingpostedby ascammer. Idiscovered a When keywords for Craigslist related scan tomyad tosee tinually ing in, andthat’s themtosendthemoney. enoughfor by wanttodrive will go- toget alook withoutactually first month’s rent viaamoneywireoverseas. Some people himthe renthave they todoisforward can itout—all they peoplerespond tothead,When them tells thescammer liststheadmuch for lessthanisbeingasked.scammer ing on businessoverseas. Inorder togeneratetraffic, the poses asthehomeowner, whoisconveniently away travel- information embeddedintothemwhenyouinformation share them. or tabletsoyour photos don’t’ have latitudeandlongitude onabling theGPS(globalpositioningyour system) smartphone if you’re home. away from You may alsowanttoconsider dis- oflettingpeopleknow wherebe cautious you are –especially some dealsfor “checking in” atlocations, butyou alsowantto geo-location programs are funandsometimes you score can sites: Facebook, FourSquare andother keep you andyour safe. information devices. here are So five tipstohelp more secure whenusingyour mobile some helpyou thingsthatwill be The way I thwarted this crime under my watch wastocon- under mywatch thiscrime The way Ithwarted Don’t remember it-forgetit: Don’t setusernameandpass- Be carefulwhen “checking in” on social You can, however, on focus doing Do y o Hi ur and trust. Use well-known that vetand trust. Use brands contrac- tive contractors handle themselves,tive contractors handle of theirlevel Business Bureau whenlookingforreputablecompanies. a contractor andhire that contractor. Use the Better source who doesknow orothertrusted Find afriend shoddywork. policiesfor tors andhave zero-tolerance re

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Read upon whattheprocesses are i ds . Be cognizant ofho Be cognizant w prospec- ou know, like How can you protect yourself from scams like this, or money to a stranger in response to money he or she other scams that take advantage of online classified ads? has sent you. This is known as an advance fee scam. Use common sense, be smart and pay attention. If Be smart. Don’t disclose your financial information, including you do that, you won’t fall for these types of cons. account or Social Security number, for any reason. Look out! Be very careful who you contact and who con- Scammers will say anything in order to get this information. tacts you. You never know who the person is or Many classified sites stop fraudulent ads from being pub- what his or her motivation may be. lished in the first place by incorporating device-based Whenever possible, deal locally. People intelligence that helps them assess risk upfront. Fraud who cannot meet you in your town are more prevention technology offered by iovation Inc. not likely to be scammers. And even when you only helps these sites identify repeat offenders coming do meet in person, you still should be wary. in under multiple fake identities, but also detects Never engage in online transactions when scammers are attempting to place multiple involving credit cards, cashier’s checks, fraudulent ads using a variety of computers, tablets money orders, personal checks, Western Union, and smartphones to do so. This greatly helps rid these MoneyGram, cash or anything that requires you to send sites of undesirables and protects their valued members.

words to be remembered in your mobile browser or in apps app or use your mobile’s other function (the basic phone part). and make sure you always log out of accounts when you access Emails and texts can be intercepted and then your information them. And, like on your computer, make sure you use strong can fall into the wrong hands. Also, remember that legitimate passwords and different passwords for each of your accounts. organizations like banks will not ask you to text those personal Be careful what you share: Yes it’s fine to stay in touch details, so if you see requests like that, it’s most likely scam. with our friends and family via social networks, but be care- Turn off your Bluetooth: If you’re not using this connection, ful what you share. Even if your privacy settings are set to it’s best to turn it off. Not only will this help save your battery only let your friends see the information, it’s best to take life, but it will prevent hackers from accessing the approach that once something is online, it lives for- your device through this technology. Many ever. Think about whether or not you’re really ok with your devices are preset to use default settings that grandmother or boss seeing that update, picture or video. allow other users to connect to your device, Don’t text or email personal information: While this might sometimes without your knowledge. In some seem pretty basic, too many people do it far too often. We may cases, hackers can access a phone’s con- find we need to share credit card numbers or personal details tacts, calendar, text messages, and more. with another person. But this should be done via a secure site or

understanding of the work at hand, and up with the tools and stock to do the job. I recommend you go whether or not they voluntarily offer up with them to whatever supplier they get their stock from and references. Don’t just automatically trust pay for it directly. If they charge a markup on the stock (it’s 09 the guy with the whitest teeth and low- usually 15 percent), tell them you’ll gladly give that to them. est price. Pay attention to your gut. Pay in thirds. You’ve already paid for the stock, so now Check references. If it makes sense for all you have to do is pay for labor: one third upon show- the job at hand, drive by a house that the ing up to do the work, one third halfway through contractor referenced and actually look to see the quality of the job and one third when they are done. MAR the work that was done. Often, construction jobs costs thou- sands—and taking the time to check work is worth your time. Get everything in writing. Make sure the con- tract clearly spells it all out. Robert Siciliano, CEO of www.IDTheftSecurity.com is fiercely committed Buy the stock yourself. Many contractors will request money to informing, educating, and empowering Americans so they can be up front to do the job. Often they need that money as a “com- protected from violence and crime in the physical and virtual worlds. Contact mitment” to do the job and motivate them to fill their trucks Robert and read his blog by visiting www.robertsiciliano.com.

WWW.MIREALTORS.COM MAR 10 MICHIGANREALTOR® | SEPTEMBER 2013 undertake, on even alimitedbudget. renovations thathomeowners can many financing options andgreen bequitecostly.can Luckily, there are Traditional home renovation projects and environmentally friendly. efficient their homes more energy homeowners for tomake important continue todevelop, itisincreasingly Meeting LEEDSpecifications Tankless Hot Water Heater HeatingSolar Radiant Barrier usgbc.org/leed/developing-leed) isaninitia- and Environmental Design (http://www. aslonglast twice astraditional units. inhalf, nearly bill energy also butthey tanklesshotwaterheaterscutyourcan ficient fix tothisproblem. Not only hot waterheatersare aneasyandef- a handfuloftimeseachday. Tankless though you usehotwater may only increases your bill, gasorelectric even times,of waterhotatall severely which inorder tokeeplargestantly amounts son’s worst nightmare. con- These run a40-gallontankare agreenutilize per- betteronment andeven your wallet. bill, makesitgreat which theenviron- for reduce your significantly ect can heating home. This simplegreen renovation proj- sun andusethissolarpower toheatthe the from storeing systems theenergy be adefinite consideration. heat- Solar going green withasolarheatershould thewintermonths,heater during then useofa tion thatrequires thefrequent bills. lower electric monthly efit from tocool your home andben- less energy in theatticofyour home, you use will friendly. aradiantbarrier Byinstalling renovation isbothsimpleandbudget- it.sorbing green This often-overlooked thehome,away from thanab- rather has areflective that-sunlight backing The modern Leadership in Energy inEnergy Leadership The modern Traditional hot waterheatersthat If you happentolive inacoldloca- that afoil issimply A radiantbarrier to rise andgreen to rise technologies spreads, costscontinue energy s environmental awareness Get the Best Home Get theBest options homeowners for are: tions. ofthemostpopular Some efficient renova- fund your energy helpyoutions availablethatcan your aswell. homeimprove will nicely yourfor green efforts, theresale valueof In addition toreceiving valuablesavings home improvement loansintheindustry. are online sources thebest thatoffer home may costmore upfront, butthere requirements. HavinganLEED certified heatingenergy ing aspace tominimize heatpump,thermal design- orsimply production, energy for ageo- installing materials,cycled implementingsolarcells LEED requirementsusingre- include considering. worth is definitely Some order LEED toattainacertified rating asgreen structure aspossiblein the new ing anaddition toyour home, making green requirements. Ifyou planon build- meetingcertain for and rebates simply tive thatallowsyou taxincentives toearn Home • Unsecured • Home • There are many financing op- available for you to usewhenever you like. linesofcreditequity amount make acertain loan that pays you alumpsumamount, home lower interest rate. Instead ofahomeequity similar to credit cards. They justhave amuch factor, linesofcredit buthomeequity are more have builtupinyour homeasadetermining you loans. oftheseusetheequity equity Both linesofcreditconfuse homeequity withhome tion ofacquiring suchfundingifyou needit. but itisnice knowing that you have theop you accomplish can onamuchsmallerbudget, a numberofenergy efficient renovations that loan upto $50,000.Obviously,equity there are builtup,of equity you may qualifyfor ahome tions. For example, ifyou have $50,000worth up even more through energy efficient renova- loanthat willallowa homeequity you to build inyouramount ofequity home, you take can out unsecured loansdueto theaddedriskinvolved. institutions docharge higherinterest rates for use your homeascollateral. However, financial loans andlinesofcredit, unsecured loansdonot funds for homerenovations. Unlike home equity unsecured loansare anexcellent optionto gain in your home, like many thesedays, then

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themselves andfor theirfamilies. andbetter decision for financial smart The site aimsto empower consumers create andfinancial-relatedmortgage matters. information, tools about andup-to-date news Directories andInformation LLC. The site provides is establishedyear 1995andowned by Mortgageloan Brent Wayne writes for MortgageLoan.com, which paydefinitely offinthelong run. MAR efficientyour will home more energy renovations. ofmaking effort The extra helpfundtheseworthwhile that will best home improvement loansavailable ment, you search online can tofind the invest-projects may require anupfront efficient taking some oftheseenergy efficient.more energy Althoughunder- tions makeyour thatwill home much There are anumberofgreen renova- how is your renovation project?

By Brent Wayne

WWW.MIREALTORS.COM MAR MICHIGANREALTOR® | SEPTEMBER 2013

C oming Michigan’s

A ge ike all industries, the real estate for the future. According to Com- of REALTORS® (GRAR) has used industry is continually changing mittee Chairman Kelly Sweeney, SWMRIC for three years and Chief L and evolving to incorporate the chief executive officer of Troy-based Executive Officer Julie Rietberg says exponential growth of technology. Coldwell Banker Weir Manuel, the the consolidation of data into a single In particular, the ubiquitous multiple question of whether or not to pursue database is not only a great asset but listing service (MLS) is in a constant a statewide MLS was met with “a also serves to bring member groups state of evolution, in a quest to de- resounding no from association ex- together. “(SWMRIC) creates a velop a system that works well for ecutives (AEs).” However, he added, much more pleasant and cooperative REALTORS® and consumers alike. what they did say they wanted was environment between the associa- Since its inception more than a “a single statewide database into tions which encourages cooperation century ago, the MLS has evolved which each MLS could submit their in other areas (educational offerings, from information shared at local listing data and then an aggregated legislative issues, etc.) that enhances meeting halls to index card librar- database that included all listings effectiveness and efficiency.” ies, then books, simple proprietary would be fed back to each MLS. On the downside, Rietberg adds databases, and finally a range of Under such a format, agents could that SWMRIC requires that everyone complex online databases, reposi- choose to subscribe to the MLS that use the same MLS vendor, whether tories, and MLSs providing listings best met his or her needs since each or not it is a good fit, since that’s the on a local, regional, state or national MLSs would have all of the data.” only model the industry has known. scale to anyone, anytime, anywhere. To date, Michigan’s real estate “We look forward to the day when Many REALTORS® are skepti- industry does not have one state- we are able to allow the customer cal of the advantages and quality wide database in place, but instead (member) to select any MLS vendor presented by these listing venues. As is served by a combination of small they choose rather than requiring millions of homebuyers and sellers MLSs, listing data repositories all associations within the reposi- alike rely upon Realtor.com® or other and large MLSs formed by coop- tory to use the same, i.e. all vendors data aggregation web sites, there is erating associations and boards could receive a feed of the data and a greater urgency to ensure accuracy to create one regional MLS. offer services to our members, and and professional involvement. Re- the members select whichever ven- cently, the National Association of The Repository MLS Model dor offers them the best solutions REALTORS®’ (NAR) announced The “repository” MLS model is to fit their needs/business model.” upcoming changes to Realtor.com®, now in place in both east and south- its official web site for consumers, west Michigan. In the east, the Great The Regional MLS Model which, they say, will “simplify our Lakes Repository (GLR) was created Also well entrenched is the MLS site and make it easier to use.” at about the same time as the MAR that is owned by multiple associations committee revealed its findings. Ac- and operated as a regional company. The MLS Landscape cording to the GLR web site, the Farmington Hills-based Realcomp II In Michigan, MLS consolida- “single shared database” saves money Ltd. is owned by eight local boards tion has been discussed in various by allowing users to access one MLS of REALTORS® in the southeast committees, boards and association of their choosing with access to stan- and thumb areas of Michigan and meetings for years. As communities dardized, secure and up-to date list- is approaching its 20th year of op- grew and REALTORS® expanded ings. Each member MLS has a sepa- erations. Realcomp’s web site boasts their service areas, the need to sub- rate data-sharing agreement with the almost 2 million listings, more than scribe to multiple MLSs and the GLR. To date, the GLR has agree- 10 million online photos, and more time spent searching them quickly ments with 10 MLSs from Southeast than 172,000 linked virtual tours. became a burden to all but the most Michigan to Saginaw (including Flint The company’s public listing site, localized agencies. Add to that the and Lenawee County) and as far west MoveinMichigan.com, offers a va- different MLS formats and training as Hillsdale and Jackson counties in riety of features for consumers and 15 requirements and it is easy to see the south. According to Sweeney, the Realcomp syndicates listings auto- why the MLS consolidation GLR “provides the exact solution” matically to more than 30 web sites, movement was inevitable. for the MLSs surveyed in 2008 who including their public listing site. In 2008, the Michigan wanted one aggregated database feed Chief Executive Officer Karen Association of REAL- to the MLS vendor of their choice. Kage, says she has been in real estate TORS® (MAR) Similarly, the Southwestern Michi- since index cards were the MLS and convened an ad- gan Regional Information Center there is no doubt that technology is hoc committee (SWMRIC) provides a repository for now the key to success. “Consum- that surveyed every member boards and associations in ers are demanding technology. The MLS in the state 22 counties in south and west Michi- changes in the past year alone are to determine a path gan. The Grand Rapids Association greater than the past 15 years put

WWW.MIREALTORS.COM MAR Congratulations 2013 GRI Graduates together. Both agents and con- ers are driven by price and we think handle on data accuracy and security.” GRI, the most recognizable sumers want it all, right now!” that ‘the rising tide floats all boats,’ However, he adds, “I have never been Ann Arbor Area Board of REALTORS® Realcomp II Ltd. currently so (the NGRMLS) will help drive on a board when they were willing to Young Choi GRI serves more than 11,000 agents, the market more equitably across say it is in the best interest of our us- REALTOR® Designation Patricia Edwards GRI brokers and appraisers and also has all of northern lower Michigan.” ers that we close (our MLS) down.” Jodie Franklin GRI data-sharing agreements with Flint, TAAR’s Pontius says northern Ann Arbor and Greater Lansing. Service Still #1 Michigan’s new NGLRMLS also Christine George GRI Mary Gilbert Anglin GRI According to Kage these agree- No matter the MLS format, one provides agents a greater opportunity in the industry today! ments mean, “access to data for all, thing is sure, as technology continues to be the “subject matter experts” they Kristyn Huige GRI while maintaining data security.” to improve, everyone must embrace it really are. “We still need feet-on- Kirk Keebler GRI Up north, the Northern Great while keeping the consumer front and the-ground local REALTORS®. It Snow Liao GRI Lakes REALTORS® MLS (NGL- center. Jim Fase, a REALTOR® with is their job to take the listing infor- Sara Maddock GRI RMLS), was recently formed by Prudential Preferred REALTORS® mation, apply their local knowledge Valarie Moore GRI consolidating three northern lower in Rockford agrees. “Today’s consum- and synthesize the market-specific Martha Smith GRI Michigan associations and boards: ers are already on board the technol- data so it is interpreted correctly by Greg Uihlein GRI the Traverse Area Association ogy train. If we don’t get on board, we the consumer,” something he says Roger White GRI of REALTORS® (TAAR), the will miss it. Ignoring technological the data aggregators cannot do. Scott Wynne GRI Central Michigan Association of change is the first step toward the The bottom line, according to REALTORS® (CMAR) and the end of your business. As we move Fase, is that REALTORS®, associa- Down River Association of REALTORS® Northeastern Michigan Board forward, everything we do has to be tions and boards have to work better James Irey GRI of REALTORS® (NMBR). central to servicing the consumer.” together to manage and leverage Carolena Reed GRI Kimberly Pontius, executive vice In reality, continuing to provide technology, strengthen the industry Invest In Your Future president of TAAR, who participated top-notch service may mean that and present a united front. “The way in the consolidation that went online small MLSs must honestly evaluate we protected data and local customs Flint Area Association of REALTORS® March 18, 2013, says, “We had 12 their ability to keep up and remain in 1965 no longer works today. We Kathleen Talt-Simmons GRI MLSs in northern Michigan, so we viable. Dan Elsea, president of Bro- need to start trusting each other had consumers searching 12 different kerage Services for Real Estate One, and we need our leadership to be a The Time To Act is Now Grand Rapids Association of REALTORS® MLSs for northern Michigan proper- Michigan’s largest real estate broker- strong voice for all agents.” MAR Alix Criswell GRI ties. We asked ourselves, ‘what does age, says consolidation may be painful, the consumer want?’ And, the answer but necessary. “It probably does cost Greater Kalamazoo Association of REALTORS® was ‘everything that is available in jobs, but the most important thing Sandra Newman GRI northern Michigan, all in one place.’” is to serve the consumer. I Suzanne Sloan GRI As someone who is not a life-long think repositories are a FACT: Michigan REALTORS® with a GRI Debbie Stuck GRI real estate industry member, Pontius great idea as is (data) says his earlier careers in manufac- standardization, designation earn substantially more than Greater Metropolitan Association of REALTORS® turing and economic development and larger Julie Hall GRI helped him think outside the box and REALTORS® with no designation. MLSs prob- Mariette Herrick GRI see that things had to change if the ably have industry was to prosper. The goal he a bet- To date, said was to become “friendly competi- ter FACT: Michigan REALTORS® with a GRI Grosse Pointe Board of REALTORS® tors, share advertising and show our- Michigan’s designation are perceived as having Roseanna Biondo GRI selves as a team with everyone pulling Donna Caumartin GRI for the team. Our MLS strength- real estate industry made a commitment to provide a higher Cosmin Hosu GRI ens our industry ‘coopetition.’” level of professional service. Moving forward, Pon- Lenawee County Association of REALTORS® 16 tius says they hope to does not have one statewide Patricia Glotfelty GRI continue to grow as GRI courses are available online or in a traditional more small MLSs database in place, but instead is classroom setting through partnerships with local Livingston County Association of REALTORS® join and he sees associations across the state. Start earning your GRI Cathy Blight GRI the regional con- Ron Zupko GRI cept as a big help served by a combination of small MLSs, listing data designation today or check for a course near you by to introducing visiting www.mirealtors.com/GRI.htm. consumers to all North Oakland County Board of REALTORS® | SEPTEMBER 2013 ® areas of northern repositories and large MLSs formed by cooperating Linda Hammond GRI Michigan. “We are Kathleen Persha GRI driven by consum- REALTOR associations and boards to create one regional MLS. N ers and consum- Upper Peninsula Association of REALTORS® GA I Richard O’Neill GRI CH I M Graduates list as of June 17, 2013 18 MICHIGANREALTOR® | SEPTEMBER 2013 It isTime to Forsake By Je ff Davi ds on, MB A , CMC ere in the dead of September, may found that the effects of multitasking ceed through it one customer at a time. I share a truism with you? REAL- could actually be counterproductive. Suppose the phone continually inter- HTORS® and real estate agents The primary cost of multi-tasking is, rupts you whenever you try to work at find themselves perpetually attempting ironically, the very thing that sales pro- your PC. You cannot do your best work to do many things at once. As the In- fessionals are desperate to save – time. because when the phone rings you lose ternet, mobile devices, and a myriad of Multi-tasking is not only ineffective; it’s your concentration and focus. How can other technological wonders become in- also potentially dangerous. Concentrat- you handle that situation so that both creasingly integrated into our lives, it gets ing on a distant phone call inevitably jobs get the best of your attention? The harder and harder to concentrate on any detracts from a driver’s ability to focus key is a process called mental completion. single item. Everywhere you look, you on the road, putting them at dire risk of When the phone rings while you are besieged by competing demands for injury. Several recent studies have found are working on your computer, silently your time and attention, commanding that cell phone use while driving leads to recognize yourself by thinking, “I ac- you to practice multitasking. “Answer the an increased risk of automobile accidents. knowledge myself for coming this far phone.” “Click here.” “Push here.” “Open on this project.” Then save the work on me.” “Switch me on.” “Do it all at once!” Give Attention to the Task at Hand your screen and turn to the phone. Give Equally unfortunate, multi-tasking So how are you supposed to fit in all the caller your complete and undivided is often promoted to as a way for real of your daily tasks without getting so attention; take notes, even smile into estate professionals to meet the complex stressed out or frustrated that you cannot the phone. Do whatever you need to demands of our modern society and finish any? The answer is: less is more. do in order to be successful on that accomplish more in the same amount Science has shown that your brain phone call. Then, at the conclusion of of time. Have you ever attempted to works best when it gives sharp atten- the call, put the phone down, acknowl- work on a presentation, while cruis- tion in one direction. Therefore, the key edge yourself for handling it, and finally ing the Internet, or talking on the is to focus on the task at hand and be turn back to your PC and begin again. phone? You don’t accomplish much, present in the moment. Sounds pretty The process of giving yourself a and time mysteriously disappears. simple, doesn’t it? If you doubt that this mental completion on all tasks, or even thoughts, sets up a mental partition. Multi-tasking Largely is sound advice, then you can set up an easy test right in your own office! You gain more energy, more focus and Doesn’t Pay Off Think of three easy tasks, such as more direction for your next task. Attempting to do many drawing twenty stars on a piece of paper, Concentrate and Prosper things simultaneously can linking twenty paper clips, and stacking actually have the opposite twenty pennies. Then, set up a race with If you can continually hone and refine effect; it makes your work a friend or family member. One person your powers of concentration you’ll do a less efficient and contributes must proceed through the tasks sequen- better job and have more time at the end to stress. No matter what analogies or tially, taking each assignment to comple- of the day. Both your commissions and MAR metaphors you may have heard, a hu- tion before moving on. The other person your peace of mind will improve. man being is not a computer. Computers has to rotate among the three tasks, do- can multitask with ease; the Windows ing three or four stars, two or three pa- Jeff Davidson, on the web at www.BreathingSpace.com, operating system, for example, is capable perclips, and then three or four pennies. holds the registered trademark as “The Work-Life Balance of running any number of programs All other things being equal, who is Expert®.” Jeff is the leading personal brand in speaking, without sacrificing accuracy or peace going to win every time? The person writing, and reflecting on work-life balance issues and he of mind. While there are some low who doesn’t switch tasks frequently has a passion for speaking to organizations that want to level tasks in which you can multi-task, will be the winner. There is no greater help their employees make rapid progress in this arena. such as eating and watching television, efficiency than focusing on the task at Jeff is the author of “Simpler Living,” “Breathing Space,” for sales pros, multi-tasking is an idea hand and giving it your full concentra- “The 60 Second Self-Starter,” “The 60 Second Organizer,” whose time should never have come. tion. As a friend of mine succinctly “The 10 Minute Guide to Managing Your Time,” and “The Alas it’s all too easy to fall into a sums it up: focus beats brilliance. 10 Minute Guide to Managing Stress,” as well as 24 iPhone 19 familiar trap: “So much is expected of You Can Work Smarter apps in his “Work-Life Guide” series on iTunes. Jeff’s me, I have to double and triple my ac- books have been published in 18 languages including tivities.” Nevertheless, if you attempt to When an airline flight is canceled and Arabic, Chinese, Japanese, Malay, Turkish, and Russian. multitask at home or on the job, you’re people rush to the reservation desk and Jeff has been interviewed 19 times by the Washington likely mess up something in your day or scramble to catch the next plane or some Post, Los Angeles Times, Chicago Tribune, Christian week. Research shows that multi-tasking other connection, does the gate agent Science Monitor, New York Times, and USA Today. seldom enables people to accomplish attempt to take on five or ten people at He currently is a columnist for 12 publications, more, if you take the long-term view. a time? No. He or she looks at the com- among them Accounting Web, Association News, A study published by the American puter and handles a particular customer’s Human Resources IQ, Inside Business, and Real Psychological Association’s Journal rerouting, looking up only sparingly. The Estate Professional. Jeff also is an Advisory Board of Experimental Psychology, Hu- attendant is not fazed by a 20-person member for The Organized Executive, a monthly man Perception and Performance, line because it is clearly practical to pro- publication of the Columbia Books, Washington DC.

WWW.MIREALTORS.COM MAR THE MAR EDGE

What is the MAR Edge? It’s an array of competitively priced business products, services and resources designed to provide Michigan’s REALTORS® with a competitive edge and discounted pricing for services used everyday in your profession.

REALTORS® are encouraged to use Mirealtors.com as a guide to the programs that add value to your business and to the providers who support Michigan’s REALTORS®. • Art Van Home Rewards Program • Comcast Business Class • Home and Auto-Owners Insurance - Frankenmuth Insurance • Errors & Omissions Insurance - Pearl Insurance earning the 21 • Health/Life Insurance - Waymark Insurance Services • REALTOR.org - Store Member Discount • Real Estate Forms - Zip Logix Business! • UPS Discounted Shipping By Marcus Wally

WWW.MIREALTORS.COM MAR For complete program information, visit www.mirealtors.com/content/MemberBenefits.htm 22 MICHIGANREALTOR® | SEPTEMBER 2013 J job, then, findoutwhoandwhat we have incom- toquickly friend.Itisour anacquaintance and/oratrusted buy from asalesman. dopeople buyfrom Rarely only mostoften They asalesmantoanacquaintance. inhermindfrom changing intheyear. alittleearlier adeck install At thatpointIwas saidyesimmediately andmentioned howhad Ray helped her mightknow herneighbors!She I washopingthatthiscaller Avepurchase ahome on lessthantwo Marilyn years ago, and andcustomers thatIhelped friends and Rose? These are Avenue,”“Marilyn Ray askedherifsheknew Iimmediately asked herwhataddress was, andthemoment shesaid home. Oncewe introduced over thetelephone, ourselves I awoman whowantedtolisther from creating thisarticle know incommon. Ijustreceived whileIwas aphone call their assistance. Abigsmilehere themin. draws of the “team” andare tohelpifyou willing justaskfor cess. People mostinterested are inbeingpart usually suc- tomyoverall contribute ness andhowcan they metoexplaintheirrolefor inhelpingtogrow mybusi- gave themtwo businesscards,tally itopensthedoor ourselves,for beaware we must ofourbottom line. always nials islow, somyprofit marginishigh. Beinginbusiness have.the bestmarketing Ican The costofpersonal testimo- promote meandtootmyhorn. all, After word ofmouthis hold on toitasaway tocontact me. Ineedtheirhelp to business card, give never thatcardaway, will asthey they’ll justgive andfriends.Inever them toshareone withfamily share two,always onethecustomer for tokeepandone for gate. thestarting the topofmygamefrom andsetsthestagemetobeat with theseller for ing presentation itjustthat: Ajobinterview. sume tothe interview,”“job andgoing on alist- agents theirre- have thoughttobring few very given you acopy theircredentials?”you of have interviewed them howIam. professional andorganized thistothemasonefer ofmybesttoolstoshow seated, bio/resume outmypersonalized andof- Ipull Actually, thepack. Iusethisasaway mefrom toseparate front.most currentrightup resume totheseller tooffer whenmycompetitors don’tsurprised acopy bring oftheir withoutthisdocument,on ajobinterview soIamalways up-to-date bioand/orresume. You would thinktogo never prepared, firststepishavingasharp, andthemostimportant ofprofessional job.type thatwe are super- Itismostcritical term! becomethat will dueandpayable intheshort ofdeposit(CD)inthebank...ing acertificate money Another solid point is to find out quickly whom we may Another solidpointistofindoutquickly lookmethatIacciden- they atmeandtell When cards.few ofmybusiness a Then Ibegin by also offering I front putsmeoutin This action immediately Of course, thisisamostleading question, as And thenIaskthequestion: ”Have agents theother that myintroduction totheseller,Right after andwe are any for alistingisthesameasinterviewing Going after all,After listingsiskintohav- havingwell priced bread topproducing andbutterofall REALTORS®! ever... asolid, andearning listingisthemain well priced ob huntingtoday ismore competitive andfierce than Going after a listing is the same as for any typeinterviewing of professional job. It is most critical that we are … super-prepared

mon... get off the sales pitch and get I usually then follow up my answer Here are a few additional tips into developing a relationship based with the query ”any other questions?” to follow when “job hunting:” on commonalities. Once someone This allows the customer to accept my 1 Study the local market and analyze trusts us in other areas, the ability to answer and move on without deliber- your competition in advance. team up on a job to sell something ating for any length of time. I am here of theirs comes more naturally. to earn the job, so I must answer the 2 Drive by the property, take a few pictures At this point, I asked a direct questions, but I want to get the cus- and use them in your live presentation. question and that was... ”Were you tomer to move forward in their deci- 3 Always arrive on time to the presentation referred to me by Ray and Rose?” sion-making process without flounder- and make sure the customer knows that you She said that she could not remem- ing and not making a decision to hire were on time; this shows that you respect ber where she most recently heard my me. I must get them on board NOW! their time as much as you respect yours. name, but had seen a sign down the One of the last elements of a suc- 4 Dress for success, as you never get a second street with my name on it, had heard cessful interview for any position is chance to make a good, first impression. of me over the years and was quite fa- to make sure you ask for the business. 5 miliar with my name and our company. Being a top producer, showing up on Determine ASAP who the decision maker I began to ask her what her tal- time, have a nice car and all the toys is… could be absentee owners in addition ent was and she responded “hair (iPhone, laptop, etc.) is just part of to the ones you with whom you are meet- dresser”.... so I said, “Then why am the package. Looking the customer in ing. Make sure you get to speak directly to I not getting my hair cut by you?” the eyes and allowing them to know these owners as well. They cannot approve That allowed me to chat about and feel your interest and desire to of you without your reaching out to them LOYALTY and how much I appreci- have their business is just as, and often 6 Determine the reason/desire to sell and ated her remembering and calling more, important. In my 23+ year career, gear your presentation to these factors. me and reassured her that, working I have watched new agents take busi- 7 Adapt your presentation to the together, I could get her top dollar in ness away from a seasoned vet by being owner’s reaction (slower or faster). a relatively quick time frame. Notice hungrier, more anxious to get the work, 8 Actively listen to owners and respond here that my lines are all scripted, letting the customer know they were directly to all their questions. and this is a critical element to any interested and asking for the listing. interview. Whether in-person or Sometimes us veterans do an awesome 9 Demonstrate your value so that there is over the telephone, I have the same job preparing (homework), then during no question about your professional fee. script memorized and it is a criti- the listing presentation, forget the hu- 10 Ask for the listing (business) MAR cal element to earning the listing! man element of looking the customer 23 Just like an actor has their lines in the eye, reaching out our hand to memorized, we too must have all of them and asking to shake to seal the Marcus A. Wally, MBA is an active Florida our lines memorized and be able to deal, and saying the following: ”I would REALTOR® in St. Augustine, Florida - “Our Nations speak them without hesitation. Mis- really like to earn your business and mar- Oldest City.” Marcus is the founder and broker of takes happen when we are not prac- ket this property...and I know working New World Realty, which also manages coaching ticed and questions are tossed at us together, I can get your top dollar quickly.” and facilitation of education classes around the for which our responses are not quick Notice that my focus is on earn- world. MARcus earned his MBA from the University and concise. One of best sales tips I ing them top dollar and doing it of North Florida in Jacksonville. MARcus can can offer to all my friends, is to always quickly. These are the two most be reached at +1-904-669-1081 or by email practice your lines... your responses to important elements that a seller at [email protected]. For more questions... and be able to recite posi- wants to hear/know about. information, visit www.newworldrealty.com. tive, solid answers without hesitation.

WWW.MIREALTORS.COM MAR Appraisers Must Understand Michigan’s Appraisal License Laws By Micheal R. Lohmeier, FASA, MAI, SRA, MMAO(4)

Every Michigan real estate appraiser webpage are two links, both of which • Requirement of the Uniform Standards of licensee is presumed to understand all ap- all Michigan real estate appraisers Professional Appraisal Practice (USPAP) plicable state laws relative to Michigan’s should maintain copies; Articles 1-6 • Prohibited representations and autho- appraisal license responsibilities. The state and Article 26 of the Occupation Code. rizations for performing appraisals even requires appraisers to attend regular • Appraisal requirements Michigan appraisal license law seminars Articles 1-6 as part of its continuing education efforts. These articles provide the • Licensure for the four categories of Michi- The following articles address a few • Introduction to Michigan’s Occupational Code gan real estate appraisal licenses of those areas about which Michigan • Terms and definitions that apply to all • Requirements for regulating educational appraisers should be knowledge. Michigan licensed professionals courses, courses and compliance with Ap- praiser Qualifications Board (AQB) criteria Website for Real Estate Appraisers • Rules, activities, and responsibili- • AQB endorsed uniform real property appraiser Real estate appraisal licensure is ties of the department of licensing and examination, equivalent and validity of scores administered by the Department of general license requirements Licensing and Regulatory Affairs • General rules, responsibilities and compensa- • Licensing without examination. (LARA). This is one of the agencies tion of boards that oversee license activities • Nonresident licensing, service of pro- created to “protect the health, safety cess, and temporary permit and welfare of the public and support • Requirements relating to fees in con- business growth.”1 Within LARA there nection to licensing professionals • Continuing education requirements is a division titled Corporations, Securi- • Complaint process • Duties of licensees ties & Commercial Licensing (formerly • Prohibitions of conduct in practicing a regu- 24 • Prohibited conduct and penalties Bureau of Commercial Services). lated profession without proper licensure On its Licensing Division site, you • Sanctions taken by another state can find a link for Regulated/Licensed • List of licensees, remittance of fee Professions which lists all the profes- Article 26 – Real Estate Appraisers sions, including Appraisers, Real Estate. Article 26 provides the responsi- Like the USPAP, or any other treatise This link will take you to the Real Es- bilities of Michigan real estate ap- upon which appraisers rely, the Michi- tate Appraiser licensing division and praisers within various sections and gan appraiser needs to maintain copies provides valuable resources of which includes, but is not limited to: of these laws for the life of any workfile | SEPTEMBER 2013 ® Michigan real estate appraisers need to • Relevant definitions for occupation that it references. Because, like USPAP, be aware. This can be found at http:// these laws may change over time. www.michigan.gov/lara/0,4601,7-154- • Board of real estate appraisers, creation, The following are areas that tend REALTOR

N 35299_61343_35414_60647_35474- and qualifications of members to stimulate greatest discussion. GA I --,00.html. On the right side of the CH I M Definitions • Be independently and impartially pre- This story is brought pared and conform to USPAP and any to you by MiCREA The following definitions are ex- other standards adopted by the director cerpts, not an all-inclusive listing of The Michigan Council of Real Estate • Include an opinion of defined value of ade- the definitions found in Article 26. Appraisers was created in 2004 with one quately described real property as of a spe- • Appraisal means an opinion, conclusion, or purpose: to serve Michigan’s REALTOR®- cific date and be supported by the presen- analysis relating to the value of real property, appraisers through advocacy, benefits, tation and analysis of relevant market data but does not include any of the following: data resources, and educational offerings. I. A market analysis performed by a person • Indicate on every appraisal re- The Council, steered by a committee of licensed under article 25 solely for the pur- port the license number and level fifteen appraisers representing more pose of assisting a customer or potential of licensure of the appraiser than 2800 members, is Michigan’s customer in determining the potential sale, strongest voice for the rights and purchase, or listing price of real property or Continuing Education needs of appraisers in the state. The the rental rate of real property as long as Minimum continuing education services and value MiCREA provides to a fee or any other valuable consideration requirements are dictated by the its members complement in numerous is not charged for that analysis. Appraiser Qualifications Board ways the services provided to members by their local associations and appraisal II. A market analysis of real property for a fee (AQB) and require 28 hours of organizations. For more information performed by a broker or associate broker continuing education hours per on MiCREA, visit www.mirealtors.com/ licensed under article 25 which does not cycle. Each recertification cycle content/AppraiserResources.htm. involve a federally related transaction if the requires the AQB’s 7-hour US- market analysis is put in writing and states in PAP Update seminar. Michigan boldface print “This is a market analysis, also requires its licensees to take a not an appraisal and was prepared by minimum two hours of continuing shall indicate on every appraisal report the a licensed real estate broker or associ- education relating to its license laws. license number and level of licensure. ate broker, not a licensed appraiser.”. Duties of Licensee Some other information that Michi- Failure to do so results in the individual being gan appraisers will find useful on the subject to the penalties set forth in article 6. The appraiser shall do all of the Real Estate Appraiser website include: following, per Section 339.2633: III. An assessment of the value of real property • Board meeting members by name performed on behalf of a local unit of govern- • Include, in any appraisal or report provided to a client, the following statement: • Board meeting information, dates, ment authorized to impose property taxes and minutes of prior meetings when performed by an assessor certified under “Appraisers are required to be licensed and section 10d of the general property tax act, are regulated by the Michigan Department • Appraiser exam information and li- 1893 PA 206, MCL 211.10d, or an individual of Licensing and Regulatory Affairs, P.O. censing requirements and fees Box 30018, Lansing, Michigan 48909” employed in an assessing capacity. • Information pertaining to Appraisal Management Maintain an actual place of business • Appraiser means an individual engaged • Companies licensing, effective April 1, 2014 whose address shall be used as the li- in or offering to engage in the develop- • Disciplinary action reports ment and communication of an appraisal. censee address and in all advertising Real estate appraiser continuing educa- • Maintain a system of books and records open • There are four license cat- to the department upon request during normal tion (CE) requirements, and a list of egories in Michigan: business hours. The books and records shall be those completed by each appraiser • Limited real estate appraiser maintained in accordance with the uniform stan- Take a few minutes and review the • State licensed real estate appraiser dards of professional appraisal practice, the re- laws that affect Michigan real estate quirements of this article, and any requirements • Certified residential real estate appraiser appraisers as well as the resource of in- imposed by rules promulgated under this article. formation available on Michigan’s Real • Certified general real estate appraiser The books and records shall show all appraisals Estate Appraiser licensing website. MAR undertaken by name of client and the address or 25 Prohibited Representations description of the property appraised. In addition, applicants for licensure as a state licensed Micheal R. Lohmeier, MMAO(4), FASA, MAI, A person shall not act or of- real estate appraiser, a certified residential real SRA, is an Appraiser Qualifications Board certified fer to act as an appraiser unless li- estate appraiser, or a certified general real estate USPAP Instructor and currently serves as the City censed under Article 26 or exempt appraiser must also provide an appraisal log that Assessor for the City of Auburn Hills. He can be from licensure under Article 26. includes, at a minimum, the documentation or reached for further comment at 248.370.9436, Appraisal Requirements data required to be kept under the AQB criteria. by email at [email protected], or through LinkedIn at www.linkedin.com. Appraisals shall be in writing and • Advertise only the services authorized to be rendered according to the type of license is- • Disclose any limitations on the type of analysis, 1 Website, Department of Licensing valuation or opinion. sued and only in the name and address under and Regulatory Affairs. which the individual is licensed. The licensee

WWW.MIREALTORS.COM MAR EMDs: It Never Stops

For many years, approximately 25% of the wrong by holding an EMD when a seller and LINES calls made to the MAR Legal Hotline (“Ho- buyer were in a dispute over who was entitled tline”) involved some dispute or issue about to the EMD. This resulted in an amendment to earnest money deposits (“EMDs”). While Rule 313(6), which now provides as follows: the percentage of calls to the Hotline regard- . . . any deposit in the trust account of the broker for which ing EMDs dropped during the height of the the buyer and seller have made claim shall remain in the foreclosure and short sale frenzy, the percent- broker’s trust account until a civil action has determined age of calls regarding EMDs is again on the to whom the deposit must be paid, or until the buyer and LEGAL rise. Thus, a short refresher on handling EMDs seller have agreed in writing, to the disposition of the when a transaction craters seems to be in order. deposit. The broker may also commence a civil action to In order to understand where we are today on interplead the deposit with the proper court (the “Rule”). EMDs, it helps to understand how we got here. During the 1990s, both MAR and the then De- Insofar as we know, since the adoption of the partment of Commerce (“Department”) advised Rule, there have been no further lawsuits against REALTORS® in the case of dispute over an REALTORS® who have held EMDs when EMD in a failed transaction, the REALTOR® both the seller and buyer claimed the EMD. holding the EMD should not make the deci- Presumably, there have been no lawsuits because sion as to which party was entitled to the EMD, the Rule does not permit a REALTOR® to re- but instead should either hold the EMD until lease an EMD when there is such a dispute. the dispute was resolved or interplead the EMD The language in the Rule that permits a RE- into a court. The theory was that a REALTOR® ALTOR® to release an EMD when “ . . . the holds an EMD in trust for both the buyer and buyer and seller have agreed, in writing, to the seller and cannot make the decision to deliver it disposition of the deposit” has resulted in a to one party over the claims of the other party. misunderstanding of the Rule by some REAL- Unfortunately, years ago a REALTOR® who TORS®. It has been recommended by me on followed this advice was sued by a buyer under many occasions that as a best practice and risk the provisions of the Michigan Consumer Pro- reduction strategy, a REALTOR® should obtain tection Act (“MCPA”) for allegedly wrongfully a written release from both the seller and buyer withholding the EMD. A judge determined that every time a transaction fails and the EMD is neither the Department’s position nor MAR’s to be returned to the buyer or, alternatively, de- advice to hold the EMD in case of a dispute had livered to the seller. Obtaining a written release any legal consequence. The jury then found the from the seller and the buyer, even in friendly REALTOR® guilty of violating the MCPA. situations, eliminates potential future claim from The buyer was awarded only a few hundred dol- the buyer or seller who has forgotten that they lars damages but attorney’s fees in excess of made no claim to the EMD. However, REAL- $20,000. This case led to an avalanche of lawsuits TORS® must distinguish between what is a good against REALTORS® under the MCPA for risk reduction practice, i.e., obtaining a written the alleged wrongful withholding of an EMD release, and what is required under the Rule. during a dispute between a seller and a buyer. As quoted above, the Rule requires a REAL- In response, MAR undertook two courses TOR® to hold an EMD only when both the seller of action to eliminate what was then a very and buyer both claim the EMD. In other words, 26 real threat against REALTORS®. First, the Rule only prohibits the REALTOR® from MAR, through its Legal Action Commit- releasing the deposit when there is a dispute over tee and its Board of Directors, committed who is entitled to receive the EMD. Based on the significant resources to obtain a decision from calls received over the Hotline, there appears to the Michigan Supreme Court that REAL- be a fairly common scenario involving undisputed TORS® were exempt from the MCPA. Ulti- EMDs. In this scenario, the transaction has mately, such a decision was obtained from the failed based on the inability of the buyer to satisfy | SEPTEMBER 2013 ® Michigan Supreme Court and REALTORS® a contingency in the purchase agreement. The remain exempt from the MCPA to this day. seller makes no claim to the EMD. However, for Second, MAR sought to have the rules gov- whatever reason, the seller wants nothing more REALTOR

N erning EMDs modified so that no judge could to do with the buyer and refuses to sign a written GA I find that a REALTOR® had done anything release. Alternatively, the buyer simply demands CH I M

by Gregory L. McClelland, Esq. MAR Legal Counsel, McClelland & Anderson, LLP EMDs: It Never Stops

the EMD and refuses to sign the written release. of the parties is unwilling to sign a release. In this situation, the REALTOR® holding the Finally, many REALTORS® have asked how EMD is not protected by the Rule. The seller has long they must hold an EMD after both the made no claim to the EMD, i.e., there is no dis- seller and buyer have claimed it. The answer is pute. The Rule does not authorize a REALTOR® that there is no statute of limitations or speci- to withhold delivery of the EMD because one fied period after which REALTORS® are free to or more of the parties refuses to sign the written release an EMD. Many REALTORS® end up Michigan release. If a seller refuses to sign a written release, holding EMDs in their trust accounts in which it is generally recommended that the REAL- both the seller and buyer appear to have lost any REALTORS® can TOR® holding the EMD send a communication interest. Frequently, the REALTOR® has not stay informed of to the listing agent or to the seller indicating that heard from either party for a number of years. legal issues with it is the REALTOR®’s understanding that the The question then becomes what can the RE- updates through seller does not claim the EMD, and that if no ALTOR® do with these apparently abandoned claim is made writing within a specified period EMDs. What is clear is that REALTORS® our Legal Lines. of time, e.g., seven (7) days, the REALTOR® cannot claim these abandoned EMDs for them- will release the EMD to the buyer. This practice selves. If no claim has been made against the is not as foolproof as obtaining a written release EMD for three years, and if other criteria are from the seller and buyer, but a REALTOR® met, the EMD escheats to the State of Michi- simply cannot continue to hold an EMD indefi- gan, i.e., the government gets the money. nitely if only one party is claiming the EMD. Hopefully, REALTORS® who read this article As an aside, the fact that there is a dispute will share its contents with their colleagues to over the EMDs does not prevent sellers from help spread the word. Anything that can be done re-listing their home or buyers from looking to reduce the volume of calls to the Hotline so for another house. If either party has termi- that all REALTORS® can get through in a time- nated the transaction, even wrongfully, the ly manner will be appreciated. Thank you. MAR transaction is terminated even if one or more

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