KYREALTORFall09

REALTORKentucky

REALTORA publication of the Kentucky Association of REALTORS® F A L L 2 0 0 9

®

Managing Online Risk

REALTORS® Safety

HVCC Update

www.kar.com

THE 11th ANNUAL EXIT REALTY INTERNATIONAL CONVENTION OVERLAPS THE TIMINGOF THE KAR ANNUAL CONVENTION AND EXPO THIS YEAR. REGRETTABLY EXIT MIDSOUTH WILL NOT BE IN ATTENDANCE THIS YEAR FOR THE KAR EXPO.HAVE A GREAT EXPO! WE LOOK FORWARD TO SEEING YOU NEXT YEAR!

IF YOU WOULD LIKE TO KNOW MORE ABOUT EXIT REALTY AS AN AGENT OR OWNER, PLEASE CONTACT REGIONAL OFFICE AT 615.523.3133 OR [email protected].

This powerful guest speaker lineup awaits EXIT Realty agents at the Gaylord NationalConvention Center in Washington, DC. Plus a cash draw of $100,000 or more.

Contents

A publication of the Kentucky Association of REALTORS®

PresidentJeffrey L. SmithNorthern Kentucky Association of REALTORS®

President-ElectJohn W. Smither, GRILexington-Bluegrass Association of REALTORS®

TreasurerKevin FarrisHeart of Kentucky Association of REALTORS®

Treasurer-ElectRonald E. Hughes, ABR, CRS, GRIPaducah Board of REALTORS®

Executive Vice PresidentSusan W. Helm, [email protected]

Communications/Education DirectorHunt [email protected]

Address letters and inquiries to:Kentucky REALTOR®161 Prosperous Place, Suite 100Lexington, KY 40509

TF 800.264.2185T 859.263.7377F 859.263.7565www.kar.comemail: [email protected]

KAR members should always send addresschanges to their local board/association first.SSuubbssccrriippttiioonn rraatteess:: $10 per year (included in dues) for members, $25 per year for nonmembers.

Kentucky REALTOR® (USPS 024-933) is publishedquarterly (Fall, Winter, Spring, Summer) by theKentucky Association of REALTORS®, 161Prosperous Place, Lexington, KY 40509.

Periodicals postage paid at Lexington, KY.PPOOSSTTMMAASSTTEERR:: Send address changes toKentucky REALTOR®, 161 Prosperous Place,Suite 100, Lexington, KY 40509.

All articles represent the opinions of the authorsand do not necessarily represent the opinions ofKentucky REALTOR® or KAR and should not beconstrued as a recommendation for any courseof action regarding financial, legal or accountingmatters by KAR or Kentucky REALTOR® and itsauthors.

Reproduction prohibited without permission.Copyright © 2009Kentucky Association of REALTORS®, Inc.All rights reserved.

Volume 2, Number 5, Fall 2009

President’s Message 5

Tools You Can Use 6

From the Helm 8

REALTOR® Safety 13

KREC Information 18

Local Association News 22

Housing Stats 25

Community Profile 26

Legal Update 28

Up to Code 29

A Day in the Life of... 30

IN THIS ISSUE

Bylaws Changes 4

Managing Online Risk 10

2010 Legislative Session 14

Leadership KAR 17

Convention Education 19

HVCC 20

REGULAR FEATURES

FALL 2009 KENTUCKY REALTOR® 3

THE 11th ANNUAL EXIT REALTY INTERNATIONAL CONVENTION OVERLAPS THE TIMINGOF THE KAR ANNUAL CONVENTION AND EXPO THIS YEAR. REGRETTABLY EXIT MIDSOUTH WILL NOT BE IN ATTENDANCE THIS YEAR FOR THE KAR EXPO. HAVE A GREAT EXPO! WE LOOK FORWARD TO SEEING YOU NEXT YEAR!

IF YOU WOULD LIKE TO KNOW MORE ABOUT EXIT REALTY AS AN AGENT OR OWNER, PLEASE CONTACT REGIONAL OFFICE AT 615.523.3133 OR [email protected].

This powerful guest speaker lineup awaits EXIT Realty agents at the Gaylord NationalConvention Center in Washington, DC. Plus a cash draw of $100,000 or more.

4 www.kar.com

KAR News

Kentucky REALTOR® Wins AwardThis past May, at the 2009

Thoroughbred Chapter Public RelationsSociety of America (PRSA) annualbanquet, the Kentucky REALTOR®

magazine took home the top honor in thecategory for “magazine for internalaudiences.” The “Win” award was the first

entry and first such recognition for the magazine duringits illustrious 2 year time frame.

“It is an accomplishment for this publication to berecognized so quickly,” stated Susie Helm, KAR’s EVP.“The goal was create a benefit for our members acrossthe state and this award confirms that we are makingstrides in the right direction. We already receive greatcomments from members but this is icing on the cake.”

About the Thoroughbred Chapter PRSA Awards: The Thoroughbred Chapter began an annual awardsprogram in 2002 to honor the outstanding efforts of itsmembers. The awards recognize exceptional work in thecategories of media relations, newsletters, magazines,annual reports, brochures, special purpose publications,interactive communications, direct mail/direct response,video programs, PSAs, speeches, feature stories,editorials/OP-ED columns, advertorials,research/evaluation, creative tactics and completecampaigns.

KAR Bylaws AmendmentsThis serves as official notice of proposed Bylaws amendments to bevoted on by the general membership of the Kentucky Associationof REALTORS® at the membership meeting to be held in Louisville,Kentucky on October 1, 2009 immediately following the DelegateBody meeting (see www.kar.com for meeting details.) Thefollowing are the substantive changes to the Bylaws for the generalmembership’s consideration:

(Strikethrough indicates item to be deleted. Underline indicatesitem to be added.)

Change #1 to the BylawsRevise items as indicated below and add a new item A. Items havebeen re-lettered as appropriate.

Article VI: Board of DirectorsSection 9. Qualifications for Director are as follows:A. Being a member in good standing of the Kentucky Association of

REALTORS® andB. Having been a delegate, either at-large or local association/board

appointed, at least two (2) of the preceding five (5) years; orC. Having served on no less than two (2) KAR committees, work

groups, task forces or service areas or other KAR affiliated organizations within the previous five (5) years; or

D. Being a member in good standing in their local association/board for not less than two years, and having served

on no less than two (2) committees, work groups, task forces, service areas or board of directors of their local association/board, and having been selected by their respective region to serve as region director to KAR.a. (Section Added 9/23/04)(Section Revised 11-28-07 to take

effect 8-1-03)

Change #2 to the Bylaws Revise items as indicated below, and add a new item D and E. Itemshave been re-lettered as appropriate.

Article VII: OfficersSection 2. Qualifications for officer (other than Executive VicePresident) are as follows: A. Having a principal office in Kentucky; B. Having been a member of KAR for a minimum of seven (7) five

(5) years immediately preceding election;C. Having been a director for two (2) or more of the previous five (5)

calendar years; (Revised 9/23/04)D. Having served as a member of no less than two of the

following committees: Bylaws, Audit, Strategic Plan, Government Affairs, Legal Action/Risk Reduction, or KREEF Trustee within the previous seven (7) years;

E. Having served as a member for at least one (1) year on the Finance Committee within the previous seven (7) years; and

F. Not concurrently holding the office of president in any Member Board or Association.

Sign Up OnlineThe Kentucky Association of REALTORS®

recently revamped the format and delivery method ofits monthly newsletter, the Real Estate Report. Thismonthly update is sent to all Kentucky REALTOR®

members who have a valid email address in the systemwith their local board/association. If you do not receivethe newsletter, please check with your localboard/association to see if they have your correct emailaddress on file. If you do not receive the newsletter orwould like the newsletter to be delivered to anotheremail address, you can sign up online at www.kar.com> Media Center.

Saving Trees by Going GreenIf you would like to receive this magazine, the

Kentucky REALTOR®, by email (as a link to a pdf)instead of through the mail in hardcopy format, you canunsubscribe by sending an email to [email protected] addition, past issues of the magazine (in pdf form)are located online at www.kar.com > Media Center >Kentucky REALTOR® Magazine for you to access pastarticles and information or for distribution to clientsand friends.


www.kar.com > Members > Committees). Theappointment process will begin soon after theconclusion of the Convention.

The past several weeks have also had me serve onthe janitorial staff at KAR (don’t ask), be present for thebill signing of the $5,000 new home tax credit (see page14) and another visit to the Capitol for the “Homes forEveryone” calendar project.

I also attended the retirement luncheon of NormanBrown Executive Director of the Kentucky Real EstateCommission in Louisville. Norman is retiring aftereleven wonderful years of service. Norman, we thankyou for your integrity, commitment, dedication andunderstanding of the real estate business in theCommonwealth. I speak for over 10,000 REALTORS®

of this Association and the wonderful staff you builtover the years to say you will be truly missed and wewish you the very best.

Now let’s all go out and list and/or sell a house thisweek and help this Kentucky market continue toimprove.

See you at the Convention!!!!

President’s Message

Gearing Up for a Great Event

Lewis came to meet Clark. Will you come and meetme in Louisville?The convention committee, under the guidance of

Linda Gibson Cecil and Karen Bhatt, has done atremendous job without any direction from yours truly.Tuesday we will start off with our business meetings at10am. Come and kick off your shoes as we take five atFourth Street Live that evening as we will be hangingout with our REALTOR® family at this wonderfuldowntown attraction full of great restaurants andentertainment venues for all shapes and sizes.

The Convention will be hosting a trade show grandopening on Wednesday evening with tons of greatentertainment at the Field of Bling RPAC fundraiserincluding food, drink and music by The Rumors. Thenjoin us Thursday when we will install your 89thPresident John Smither from Lexington along with therest of your officers and directors.

Or you can come only for the speakers andeducation – that alone is well worth the price ofadmission. We have two days worth of courses and howabout this list of instructors – David Knox, Pat Zaby,Doug Devitre, Charles Cease, Charles Hinckley andJoyce Sterling. We will also have other short educationalsessions on topics like HVCC, financing option throughKHC and optimizing your website. In addition, if youare looking for a designation course, try out Pat Zabyand his Marketing with Microsoft course. It’s approvedfor 3 hours of CE along with CRS and GRI electivecredit and group discounts are available. Check out theConvention page for all the details – you will beimpressed.

Want to attend a KREC Meeting and find out hownew regulations may affect the industry (i.e. you)?Come and meet your Real Estate Commissioners onWednesday afternoon.

On another note, I have enjoyed being your 2009president but these past weeks have been quite achallenge with spending two days with LeadershipKARin Lexington, two days in Frankfort at the MortgageBankers Association of Kentucky and back toLexington for the 2010 budget meeting with thecommittee. Gotta make sure we keep the finances incheck. Which brings me to another point. If you areinterested in serving on a committee for KAR in 2010,fill out a committee selection form (online at

Jeff Smith2009 KAR President

6 www.kar.com

Tools You Can Use

Marketing Minute Google Real Estatemaps.google.com/realestate

Google does it again. The most current move in realestate by the “king of the online world” is real estatesearch. By visiting maps.google.com/realestate, you willfind it easier to locate the real estate information you arelooking for and have it returned in a useful way.Enhancements include the addition of markers that willshow not only the ten most relevant listings with pins onthe map, but also show a small circle on every otherlisting in that area using the search results layer, so youcan get a really good idea of the distribution of propertiesfor sale. You can click on each marker and each smallcircle to get more detailed information about theproperty. Google also added the address of a property tothe headline of a listing rather than the number of bedsand bathrooms as was previously the case.

If you enter a query on Google Maps, you'll see thatit’s easy for you to see all your results on a map with aone-box that will take you to real estate listings.Previously, you had to specify "real estate" from thesearch options menu, but now Google is making it easierto find available listings

Flickrwww.flickr.com

Flickr, by definition according to Wikipedia, is animage and video hosting website, web services suite, andonline community platform. In addition to being apopular website for users to share personal photographs,Flickr is widely used by bloggers as a photo repository.As of June 2009, the site claims to host more than 3.6billion images.

With so many features and images, the site is a greatway to promote yourself and your business if youincorporate it into your marketing mix the right way.How, you might ask? Flickr helps increase your SearchEngine Optimization (SEO). It does this by allowingsearch engines, especially Google, to find your titled andtagged photos and videos quickly. The words used withyour content become searchable by consumers andpotential clients.

To get started, visit Flickr and set up an account.Customize your account as much as possible so peoplecan search and find you. Make sure you include keywords in your bio, like the towns you service, the type ofreal estate you specialize in and what you have a passionabout. Once you set up your account, you can uploadyour content and explore other ways to use the service.

360° Panoramic Viewshttp://www.giroptic.com

http://www.0-360.com

In today’s real estate

environment, consumers

want photos. Not just any

photo, but high quality,

“show me the goods”

snapshots. With virtual tours

and 360 degree photos and

videos, you can give potential

buyers what they want. There

are several do-it-yourself

equipment options on the

market including 360 degree

cameras and lenses. Each tout features that require

little or no experience and ease of use with just one

click. And, you won’t have to “stitch” photos

together ever again, giving you more time to focus

on other aspects of your business. Check out these

two options:

Giroptic claims to be the world's first one-shot

360° panoramic digital camera and it looks

impressive. The system helps real estate

professionals by allowing the creation of full-motion

interactive virtual tours of properties with just one

click – using either photos or video. The Giroptic is

simple, fast and uses a high definition 360° digital

camera to capture the image of an entire room in a

single shot. You then simply upload the image to

their website and your interactive visual tour is

automatically extracted from the initial shot and

posted. You can share it with anybody on the web

or download it on your laptop to share offline.

With the 0-360, you can capture an entire

panorama (115 x 360 degree field of view) with one

photo. The 0-360 Panoramic Optic says it has the

highest field of view of any one-shot virtual tour

lens system on the market. And the free software

makes it easy to publish your image as a virtual tour

on your website.


Google Voicewww.google.com/voice

There is a plethora of ways to reach someonenowadays. Through email, websites, blogs, socialnetworks, fax, phone (land line, cell and VoIP) andeven old reliable, the post office.

How about having one number that worksanywhere, anytime and can be configured so thatsome people go to voicemail, others to your mobilephone and a select few to all of your telephonenumbers? And it will be your number forever. And it’sfrom Google so it won’t cost you a dime. IntroducingGoogle Voice, an application that helps you bettermanage your voice communications. Currently, thefeature is available by invite only but the features aretruly impressive:

• Call screening – Announce and screen callers • Listen in – Listen before taking a call • Block calls – Keep unwanted callers at bay • SMS – Send, receive, and store SMS • Place calls – Call US numbers for free • Taking calls – Answer on any of your phones • Phone routing – Phones ring based on who calls • Forwarding phones – Add phones and decide

which ring • Voicemail transcripts – Read what your voicemail

says • Listen to voicemail – Check online or from your

phone • Notifications – Receive voicemails via email or SMS • Personalize greeting – Vary greetings by caller • Share voicemail – Forward or download voicemails • Conference calling – Join people into a single call • Call record – Record calls and store them online • Call switch – Switch phones during a call • Mobile site – View your inbox from your mobile • GOOG-411 – Check directory assistance

Check out more at www.google.com/voice or searchfor Google Voice on Wikipedia.

Bits and BytesNAR Offers Free Webinarshttp://www.realtor.org/rmohome/webinars

REALTOR® magazine is hosting sessionsthroughout the year to help you succeed in real estate.Topics vary but are extremely timely to current industryissues. These “quick hit” webinars, offered about once amonth, average about one hour in length and are easy toaccess. Sign up for upcoming webinars or download pastrecordings by visiting the website.

Past webinars include:• Use Social Media to Get Results• Out-of-the-Box Loans: Who's Buying Today?• Getting Started in Social Media• Mortgage Finance: What's Really Available Today• Short Sales: Finding Income in a Tough Market - Part 2• Build Your Business Using the Improved Home Buyer

Tax Credit• Short Sales: Finding Income in a Tough Market

Upcoming webinars will be:• Managing in Turbulent Times• Get the Facts About Lease-to-Own Deals

AptureApture is a service that allows you to link and

incorporate multimedia features into a layer above yourblog or website pages. The program provides acommunication platform that allows people to intuitivelyexperience the web by quickly and easily turning flatpages of text into a compelling multimedia experience,basically creating a thumbnail web page, or pop-up, overa regular web page. It does this with just one line of codeembedded into the page.

Visitors can then access these items without everleaving the original page, providing them with what hasbeen described as “a deeper and more meaningful webexperience.” It works like this - whenever a reader moveshis/her mouse over an Apture-linked term, a box isdisplayed on the page showing the related media youchose. Whenever a reader clicks on an item in the box, anew window opens, displaying the source of that media.It's a great way to add more value to your blog posts andweb experience.

8 www.kar.com

Five Traits of Great Leaders

From the Helm

by Susan W. Helm

What are the traits of a great leader? The questionhas been asked for centuries. Whether they were

leaders in government, combat, business, education orsociety in general, what were the traits that madeGeorge Washington, Abraham Lincoln, FranklinRoosevelt and Ronald Reagan great Presidents? Whatmade Robert E. Lee and Dwight Eisenhower greatmilitary leaders? What made people like Henry Fordand Bill Gates great business leaders? And, what madeMartin Luther King, Jr. and Mahatma Gandhi greatleaders in championing societal change?

The one common thread is their ability to inspirepeople to work for the greater good and benefit of theirorganization or cause. To reach higher than theythought they could to reach their goals. Inspirationalleadership can take many forms but I want to discussfive traits of successful inspirational leadership discussedin a recent REALTOR® magazine article.

The first trait of a successful inspirational leader isselfless leadership.

A selfless leader is one who gives ofhimself to benefit the larger portionof their organization’s membership.As the first leader in the Americancivil rights movement, Martin LutherKing Jr. would be at the front ofmarches selflessly guiding his

membership’s cause for nonviolent participation inpromoting civil rights. He would also give himself as thecivil rights movement’s spokesperson and speakpositively and forcefully of the need for change in thiscountry to promote equal rights for all Americans. Inour industry, there are many examples of selflessleadership. They are the ones who put the membersfirst. They find ways to remove impediments to successand implement change for the benefit of all members.They also give of themselves to work tirelessly asspokesperson for the real estate industry. A selflessleader also is one not afraid to tap the collective wisdomof volunteers whose input can be invaluable to thesuccess of the organization. A selfless leader is also onewho is not afraid to learn to gain even greater

knowledge to benefit theorganization. President John F.Kennedy once said “Leadership andlearning are indispensable to eachother.” Realizing the need for moreknowledge benefits the entireorganization.

The second trait of a successful inspirational leaderis courage and optimism.

In challenging times every groupneeds a “cheerleader” and advocate tostress the strengths of their industryeven in tough times. During thedepths of the Great DepressionPresident Franklin Roosevelt tried toinspire optimism in all Americans

when he said “the only thing we have to fear is fearitself.” He said that if we remain optimistic andcourageous we can weather tough times. During thetough economic times we experience today a greatleader should demonstrate optimism and stress thepositives going on in the industry. But while beingoptimistic a great leader should also remain realistic ofthe current economic times and to always tell theirmembers the truth. If you remain optimistic about thestrengths of the industry while telling the truth and notdeny economic realities you can inspire people to besuccessful in difficult times. A leader should also havethe courage to inspire people by continually giving themall the tools and services they need to be successful intheir business.

The third trait of a great inspirational leader is tobe action-oriented.

There is an old saying that if you aregoing to “talk the talk you shouldwalk the walk.” A great leader shouldnot be afraid to back up their talkwith action even when it means takinga risk that could benefit the entireorganization. One of the great

military leaders in American History, Robert E. Lee


was not afraid to take a risk if success meant victory. Atthe battle of Chancellorsville Lee’s Army of NorthernVirginia was badly outmanned by superior Union forces.So Lee knew his best chance for victory was to take arisk. He implemented the unprecedented tactic ofsplitting his army in the face of a superior force. Hedelegated Stonewall Jackson’s Corps to do a nighttimeflank march around the Union Army and surprise theUnion Army with an attack at dawn the next morning.The risk worked perfectly as Jackson’s forces pulled thesurprise attack and helped Lee’s army win the battle. Thisfurther endeared Lee to his men as they knew he was notafraid to take a risk if it meant a good chance of victory ifit succeeded. Successful leaders in the real estate industrytoday need to take appropriate action when necessary andnot be afraid to take risks if it means success for theorganization as a whole. Taking action in outreach toother organizations, community groups and governmentagencies can have a positive impact on furthering themission and goals of their organization. Also, greatleaders should not be afraid to “think outside the box”and take risks when appropriate for the betterment oftheir organization. Among those risks is delegating topeople and allowing them to have a voice and control inthe success of the organization.

The fourth trait of a great inspirational leader is apassion for people.

Or more so, the passion for helpingpeople in need. Mother Theresa was agreat example of a leader who inspiredpeople through her work for thedisadvantaged all over the world.Successful leaders should have what istermed a “sense of altruistic urgency.”When they see something that needs to

be done they should be instrumental in leading andrecruiting others to get involved. During these differenteconomic times, leading the way to help other membersin financial need is very important. It is also important tolisten to members with their problems and attempt tohelp. General Colin Powell once said “The day soldiersstop bringing you their problems is the day you havestopped leading them. They have either lost confidencethat you can help them or concluded that you do notcare. Either case is a failure of leadership.” Great leadersalso know people are their greatest resource and to treatthem courteously and empower them with the knowledgeand tools to be successful will endear you as a leader.

The fifth trait of a great leader is to inspire byexample.

Taking the lead and setting theexample for others to follow is a keycomponent of a great leader. Thequarterback of a football team is theleader of his team. He wants histeammates to follow him. But he leadsby example by staying in the pocket

against a withering pass rush and throwing the pass thatcould win the game. Colts Quarterback PeytonManning inspires his team mates to work for the winby plugging away, like he does, every time: "We stuckto our plan and it worked. We just had to keep pluggingand plugging …" The great leaders in our industry arenot facing onrushing lineman with the intent of dishingout physical pain but they can lead by example all thesame. Being at community events, RPAC fundraisersand legislative meetings shows your interest in being aleader by getting and staying involved anddemonstrating your passion for the organization toothers to set a good example for others to follow.

A great leader needs to be able to inspire people intheir organization to attain their mission and goalsthrough selfless leadership, courage and optimism, beingaction oriented and not afraid to take risks, a passion forpeople and inspiring by example.

I leave you with one last quote ongreat leadership by Lao Tzu, aChinese Taoist Philosopher. He said“A leader is best when people barelyknow he exists, when his work isdone, his aim fulfilled, they will saywe did it ourselves.” What a

testament to great leadership through the inspirationand empowerment of others to achieve their goals.

Susan W. Helm is the ExecutiveVice President of the KentuckyAssociation of REALTORS®

Susan W. Helm, RCE

Wikimedia-CommonsUser Túrelio

10 www.kar.com

Managing Online Risk:Your Reputation is at Stake

It’s 10 o’clock Monday morning – do you know whereyour company’s reputation is?

As sites like LinkedIn, Twitter and Facebookbecome intertwined with business uses, real estatecompanies need to establish guidelines and best practicesto manage their online risk.

Whether we want to admit it or not, companies arelearning that social networking, when used properly,can be an effective business tool. We know byexperience that having your sales associates involved inthe community can enhance your company’s reputationand bring in more business. We are now embracing theconcept that our sales associates who blog, tweet andparticipate in forums and social sites can also increasebusiness – so long as it’s done right.

First, let’s define what we are talking about. Thedefinition of Web 2.0, according to Wikipedia, is this:

"Web 2.0" refers to the second generation of webdevelopment and web design that facilitates informationsharing and collaboration on the World Wide Web. Theadvent of Web 2.0 led to the development and evolutionof web-based communities, hosted services, and webapplications. Examples include social-networking sites,video-sharing sites, wikis, blogs, mashups andfolksonomies.

Although the term suggests a new version of theWorld Wide Web, it does not refer to an update to anytechnical specifications, but rather to cumulative changesin the ways software developers and end-users utilize theWeb.

It is not software or hardware, but the ability foranyone to create content on the web to communicatewith their niche. You can become a friend whorecommends products and services that solve problems.Some of the tools that can help you provide thisinformation depends on your adaptability to technologyand your willingness to use them. Web 1.0 websites arestatic where changes are only made occasionally andwhere the consumer has little opportunity to engage, askquestions or interact. Web 2.0 websites are blogs andsites like Facebook and Trulia. Consumers can set up

their own account on these sites and within minutesstart communicating with their sphere. The consumerdemands more interaction with companies from whichthey purchase products. They want to comment, askquestions and have a conversation online. Don’t you?

But how do you monitor the conversation? Youneed a social media policy that explicitly lays out whatis and isn’t permissible, both within the company’snetwork and externally if sales associates are presentingthemselves as representatives of the company.

If you do decide to take the “easy” way out andjust block social networking sites with the companyfirewall, remember that what people post from homecan still affect your company’s reputation.

How to get startedConsider creating a task force with people in yourcompany who understand policy and procedures andothers who are responsibly using social media. Togetherthey can create a company platform. As always, beforeyou can develop a policy, you need to define thecompany’s overall attitude toward social networking. Awell executed social media strategy helps consumers andlicensees follow an online dialogue protocol that showspromise of a successful outcome for consumers in realestate transactions. Create a statement that reflects thecompany’s mission statement and commitment to theconsumer.

Feature Story

By Amy Chorew

The social media policy has a lot of areas to cover.Social media covers all of the following topics:

• Blogs• Podcasts• Video• Social Networks• Mapping• Real Estate Search Engines and Aggregators • Real Estate Communities • Instant Communication • Syndication • Reviews

Do you know what your agents are doing on theweb?

Review data and information delivery in propertylistings (real estate search engines), blogs (real estatecommunities) and question-and-answer platforms(reviews). Set up a task force to monitor specific sites.You will want to create a form that all sales associatesfill out with a list of sites that they are participating onalong with the web address. In turn, you should preparea list to share with your sales associates so they canmarket to the consumer all the sites where they can findyour company. Make sure to run in house trainingsessions on the dos and don’ts of posting on these sites.Remember to cite good examples and examples that canget someone in trouble.

Do you know where your agents are placing theirlistings and what other listings they are claiming?

Outline property listing syndication methods andsystems for updating listings and keeping them currenton all platforms. The best practice is to implement acompany wise distribution making it easy for everyoneto maintain consistency. Some MLS systems will do thisfor you as well. Again, create a list of all the sites thatyou as a company submit listings to so your agents caninclude in their marketing plans.

Copyright dos and dont’sCopyright law applies to articles written by other

authors, photographs and images, videos, and music.Avoid severe financial consequences that followunauthorized use of another person's intellectualproperty. Review copyright and creative commons lawsand host in house training. Visit www.copyright.govand www.creativecommons.org for more information. (Continued on page 12)

Logos and company names – who has theauthority to start an online group using a registeredtrade name?

There are numerous groups appearing on socialnetworks using registered trademarks to name groups.Who is allowed to start a group? If there is a group withyour company name, make sure the principal broker isaware, approves, has administrative rights and authorityto manage the group online. Who makes the decision tolimit a group's membership or open it to the public?Make sure you create a company policy dealing withlogos and company names.

Q & A platforms – are they generating leads in thediscussion thread, or are you putting your realestate license at risk?

Sites like Trulia Voices are a great way to answerquestions and generate leads. Last time counted, therewere over 85,000 questions asked by consumers onTrulia. Make it very clear to your sales associates whatcan and cannot be answered on these sites, even if theyare authentic consumer questions. Make it a practice toreview answers that other agents have posted on thesesites and point out correct and incorrect use. We see alot of fair housing and advertising law violations andagents answering questions from consumers in otherstates. On sites like Trulia, you can set up a search forevery town your represent and have them delivered byemail. You can then watch when questions are askedand follow the answers.

Some sites to visit:http://www.trulia.com/voices/http://answers.yahoo.com/http://www.zillow.com/advice/http://www.realtown.com

Social media tools to monitor and maintainreputation management controls

Educate agents in the correct use of tools to avoidproblems and pitfalls and ways to engage consumers in afashion that will BUILD and ENHANCE a company'sreputation online. Remember to always rewardresponsible interaction on line. If you can showexamples of online fires doused as well as positiveexamples of building reputation online, your salesassociates will be better informed.


Amy Chorew is a nationalreal estate trainer highlyexperienced at helpingmanagers and agentsmaximize the infiniteopportunities that technologyoffers them. Her knowledgeof the industry and the latesttechnologies available alongwith her unique ability totranslate it all into easy tounderstand language allowsstudents to learn in a stress free and enjoyableenvironment.Visit her blog at www.amychorew.comand sign up for her free e-newsletter and check out herwebsite at www.techbyte.com

12 www.kar.com

Feature Story

Brokers and agents need to learn how to usetools to MONITOR their online presence

Google or Yahoo Alerts are a good way to start. Setup alerts based on your companies name, principal’snames, etc. These alerts will send you an email everytime one of your search words is found by searchengines.

http://www.google.com/alertshttp://alerts.yahoo.com/

Twitter Searchhttp://search.twitter.comhttp://www.twilert.com

StepRephttp://myfrontsteps.com

Yelphttp://www.yelp.com

Here are some other reputation management toolsto look at. They charge a fee but will do the timeconsuming work for you.

Privacy Gurushttp://www.privacygurus.com/firm.php

Quality Service Certifiedhttp://www.qualityservice.org

Incredible Agentshttp://www.incredibleagents.com

Real Estate Ratingzhttp://www.realestateratingz.com

Consider hiring a social media director for yourassociation or your company

As we know, reputation is a key factor in choosinga REALTOR®. The two reasons cited for choosing aREALTOR® in the 2008 NAR Home Buyers and SellersSurvey center around reputation. The first is the agent’shonesty and trustworthiness followed by overallreputation. It makes sense for REALTORS® to figureout a way to share these important elements withconsumers any way they can. Over time, social mediasites will only continue to grow. Consumers are lookingfor better ways to choose their REALTOR® other thanjust referrals. They are looking online for objectivefeedback to verify the level of quality service they willreceive when they buy or sell a home. We want to keepour reputations outstanding online.

Field Guides available through NAR:

Social Networkinghttp://www.realtor.org/library/library/fg125

Blogginghttp://www.realtor.org/library/library/fg910

Online Marketinghttp://www.realtor.org/library/library/fg203

Test your social networking IQ with a quiz:http://www.realtor.org/RMOQuiz2.nsf/SocialNetworking?OpenForm

REALTOR® Safety

When it comes to cell phone safety, the best tip ofall is: Don’t make or accept cell phone calls while you’redriving. This has been proven to be a distraction and, infact, many states and cities have laws prohibiting using acell phone while driving.

But if you must, and are legally permitted to, useyour phone while driving, follow this advice for bestsafety practices:

1. Keep your hands on the wheel, not on your phone.

2. Keep your eyes on the road. Learn how to operate your phone without looking at it. Memorize the location of all the controls, so you can press the buttons you need without ever taking your eyes off the road.

3. Practice off-road. If your phone is new, practice using it – including the voice mail system – before you use it while driving.

4. Use a hands-free unit. A hands-free unit lets you keep both hands on the wheel while you talk on the phone. Attach the microphone to the visor just above your line of vision, so you can keep your eyes on the road.

5. Stay in your lane. Don't get so wrapped up in a conversation that you drift into the other lane. Pull into the right-hand lane while talking, so you only have to worry about traffic to the left.

6. Use speed dialing. Program frequently called numbers and your local emergency number into the speed dial feature of your phone for easy, one-touch dialing. When available, use auto answer or voice-activated dialing.

7. Never dial while driving. If you must dial manually, do so only when stopped. Pull off the road, or have apassenger dial for you.

8. Take a message. Let your voice mail pick up your calls in tricky driving situations. It's easy to retrieve your messages later on.

9. Know when to stop talking. Keep phone conversations brief so you can concentrate on your driving. If a long discussion is required, if the topic isstressful or emotional, or if driving becomes hazardous, end your call and continue when you're not in traffic.

10. Know when to pull over. If you need to make a call or answer an incoming call that requires your attention, stop driving. Pull over in a safe and convenient location before taking your eyes off the road.

11. Keep the phone in its holder. Make sure your phone is securely in its holder when you’re not using it.

12. Don't take notes while driving. If you need to jot something down, pull off the road.

(Sources: Canada Safety Council; the Washington Post;

Spybusters.com)

Calling All Cars: How to Safely Usea Cell Phone Behind the Wheel

For more safety advice and related informationfrom NAR, visit www.realtor.org/safety or checkout the REALTOR® Safety Field Guide atwww.realtor.org/library/library/fg201.


Government Affairs

Sneak Peak: Issues for the Upcoming 2010Legislative Session

As you might imagine, keeping abreast of theimportant and relevant political developments inKentucky is a significant and continuous task. Here area few matters currently being discussed for the 2010legislative session:

This is a Budget Year!The unparalleled state of fiscal

problems has been brought on bythe worst decline in tax receipts indecades and there is no sign ofthis letting up. Kentucky is tryingto close the shortfall they facewith a combination of federalstimulus dollars, revenue increasesand funds from reserves.

The Kentucky GeneralAssembly did hear legislation on

alcohol and cigarette tax as well as legalizing slots athorse tracks. The alcohol and cigarette tax passed thegeneral assembly but slots at the horse tracks did notalthough it’s probably not going away. Kentucky, aswell as other states, will continue to struggle to find therevenue needed for the next few years.

Tax on ServicesA tax on services bill was introduced during the

2009 legislative session and there is a possibility this billmay be reintroduced with added services to be taxed.Members of KAR’s Quick Response Team & LBAR’sGovernmental Affairs Committee met withRepresentative Bill Farmer to gather informationregarding this proposed legislation. The intent is torepeal the state income tax and levy service taxesincluding real estate transactions and commercial rents(there are a few exemptions). Fortunately, the bill didnot gain any traction during the June 2009 specialsession. Farmer suggested that in order for the bill tomove, there would need to be another special session nolater than November 2009 in order for the legislature toact on tax reform prior to the 2010 budget session,adding that you can’t logistically do both in the samesession. This subject is very high on KAR’s watch list.

Appraisal Management Company (AMC)Legislation

The Kentucky Real Estate Appraisers Board will beintroducing legislation that would regulate AMC’s.NAR’s Board of Directors adopted policy that supportsthe regulation of AMC’s, primarily through FIRREAand the existing regulatory infrastructure. NARPresident Charles McMillan hinted at such a policy inMarch when he testified before the House FinancialServices Subcommittee on appraiser independence.NAR’s rationale is AMC’s are not currently regulated atthe federal level and regulation at the state level varies.Regulation would ensure AMC’s operate within thesame basic guidelines and standards as independentappraisers. This allows AMC’s to be regulated withinthe existing appraisal regulatory structure, which avoidsthe need to create additional levels of governmentbureaucracy. KAR’s Governmental Affairs Committeewill be reviewing the proposed legislation closely to besure you, the REALTOR®, will be protected in thisprocess.

Kentucky’s $5,000 New Home Tax Credit

The Kentucky General Assembly passed legislationthat gives first-time home buyers up to a $5000 taxcredit for new homes purchased as a primary residence.The tax credit is provided July 26, 2009 through July 25,2010. See the how-to’s below:

This past July, Representative Tommy Thompson, Glen Perkins, president of the Home BuildersAssociation of Kentucky, Kentucky Governor Steve Beshear and Jeff Smith, president of theKentucky Association of REALTORS® sign into law Kentucky’s $5,000 New Home Tax Credit.

14 www.kar.com

by Anetha Dunn Sanford,Governmental Affairs Director

Does Your Buyer Qualify?A Buyer Can Claim the Credit if All of the

Following Apply:• Your qualified principal residence is a single family

dwelling; • Your qualified residence is purchased to be the

principal residence of the qualified buyer(s) for a minimum of two (2) years;

• You purchase a new home after July 25, 2009 and before July 26, 2010; and,

• You meet qualifications and receive approval from the Department of Revenue.

A Buyer Cannot Claim the Credit if:• Your application is not received via FAX within

seven (7) calendar days from the purchase date. Anyapplication submitted via mail will be denied.

• Your new residence has been previously occupied. • Your application is received after the New Home

Tax Credit cap has been reached. • You are eligible for first time homebuyer credit

under Section 36 of Internal Revenue Code.

How to ApplyTo Apply For the Credit:

• Submit a Kentucky Form 40A103 Application for New Home Tax Credit application via fax within seven (7) calendar days of the escrow closing between the buyer and the seller.

• Kentucky Form 40A103 may be accessed by visitingthe Department of Revenue via http://revenue.ky.gov

• FAX to the Department of Revenue at (502) 564-3706

The Department of Revenue will notify taxpayers inwriting if their application has been approved or denied.

Using the CreditApproved Buyers

• Qualified buyer(s) approved for the credit will receive a credit allocation letter with a four (4) digit approval code from the Department of Revenue. This letter must be attached to the income tax return filed for the taxable year during which the qualified principal residence was purchased.

• Electronic filers: Information from the credit

allocation letter and the New Home Tax Credit Worksheet D (for electronic filers only) must be included with any electronic return submitted. Make sure the software used to submit the return can meet these requirements.

Use of Credit Against Tax Liability• Credit is claimed on page 1 of your Kentucky tax

return. • Approved credit, up to $5000, applies to Kentucky

tax liability, after applying any allowable credit for Family Size Tax Credit, Education Tuition Tax Credit, and Child and Dependent Care Credit. For example, if your Kentucky tax liability, after allowable credits, is $7000, then you would be allowed the full $5000 credit and only owe the remaining $2000.

New Home Tax Credit is Nonrefundable• A nonrefundable credit means that any unused

portion will not be refunded and may not be carriedback or forward to another tax year. For example, ifyour Kentucky tax liability, after allowable credits, is $2000, then your credit would be limited to the $2000 liability and the remaining amount lost.

For more information, visit revenue.ky.gov.

Revised Truth in Lending DisclosureRequirements

Lenders will be subject to new disclosurerequirements for mortgage loans under the FederalReserve Board Truth in Lending Regulation (Reg Z).The new requirements apply to loan applications filedon or after July 30, 2009.

The new rules are complex and compliance will be achallenge for lenders. REALTORS® will want to learnthe basics so they can advise clients of potential delaysand the new procedures.

Here are key highlights of the changes: • The new requirements apply to all mortgages

secured by a borrower's home, including primary and second homes and refinancings. Investor loans continue to be exempt.

• Lenders must give good faith estimates of mortgage loan costs within 3 business days after the consumer


16 www.kar.com

Government Affairs

applies for a loan (early disclosure). The lender may not collect any fees before the disclosure is provided, except for a reasonable fee for obtaining a credit report.

• The closing may not take place until expiration of a 7 day waiting period after the consumer receives theearly disclosure.

• If the annual percentage rate (APR) increases by more than 0.125 percent, the lender must provide a corrected disclosure to the borrower and wait an additional 3 business days before closing the loan. The APR includes not only the interest rate on the loan but certain other costs related to settlement, so it will be important for any fees that affect the APR to be as accurate as possible, as early as possible, to minimize the need for a corrected TILA disclosure.

• The consumer may modify or waive both waiting periods for a documented personal financial emergency, but must receive the disclosures no laterthan the time of the modification or waiver.

Mortgage Credit Certificate (MCC)This 25 percent credit means additional take-home

pay, making your buyer’s mortgage more affordable!

What is a Mortgage Credit Certificate?A Mortgage Credit Certificate (MCC) from

Kentucky Housing Corporation (KHC) reduces theamount of federal income tax a buyer pays, giving thebuyer more available income to qualify for a mortgageloan. MCCs are NOT mortgages. They are tax creditsthat put extra cash in the buyer’s pocket each month, sothey can more easily afford a house payment. Thatmeans fewer tax dollars will be withheld from theirregular paycheck, increasing their take-home pay. Thefederal government allows every homeowner an incometax deduction for all the interest paid each year on amortgage loan. But an MCC gives a tax credit of 25percent (not to exceed $2,000). A buyer can still deductthe remaining 75 percent interest on your income taxes.A tax credit is not the same as a tax deduction. A taxdeduction reduces the portion of your income that istaxed, so you pay less. A tax credit is a direct, dollar fordollar reduction in the total tax you owe. The MCC iseffective for the life of the loan as long as the buyer livesin the home. If the home is sold in the first nine yearsof ownership, the owner may be subject to FederalRecapture Tax.

Who Can Apply?A buyer may qualify for the program if:

• They are purchasing their first home. • They have not owned a home in the last three years. • The home is located in an area of the state which is

exempt from the first-time home buyer rule. (Your local lender can determine those “targeted areas.”)

• Maximum home sales price is $258,000.• Maximum income limits:

o 1-2 person household: $52,800-$83,040o 3-4 person household: $60,720-$96,880

KHC, FHA, VA, RHS, Fannie Mae, and/or FreddieMac standards for creditworthiness must be met and thebuyer must occupy the property. It cannot be used forbusiness, commercial, or rental purposes. Applicants needa sales contract with a legal description of the property, a$500 MCC fee, and copies of federal income tax returnsfor the past three years.

How to Apply?Applications are accepted on a first-come, first-served

basis by a statewide network of local lenders. MCCs areavailable with FHA, VA, RHS, Fannie Mae, and FreddieMac Conventional 30-year mortgages at a fixed-rate.MCCs cannot be used with KHC’s Mortgage RevenueBond program, but may be used with KHC’s Fannie MaeCash Window program. A local lender will submit theloan application and notify you as to whether theapplication has been accepted.

For MCC approved lenders and for moreinformation, visit KHC’s website at www.kyhousing.orgor call toll-free in Kentucky at (800) 633-8896 or (502)564-7630, extension 291.

RPAC has raised $90,972 as of July 31. Our goal for 2009 is$159,270. This is 57 percent of goal with a deadline ofOctober 30.

Upcoming fundraisers across the state:• September 30, 2009: Field of Bling at Convention – take

a chance at winning a 1 carat loose diamond. $50 per jar and you don’t have to be present to win.

• October 9, 2009: RPAC Statewide Coordinated Phone-a-thon – from 10:00am to 2:00pm EST, this event will helpraise as much money for RPAC as possible in the time allotted. All offices and boards with the KAR Regions will compete to see which Region can raise the most contributions for RPAC!


Leadership KAR

Would you like to join the ranks of some of themost successful REALTORS® from around the state?You can by becoming part of the LeadershipKARprogram, offered by the Kentucky Association ofREALTORS® since 2002.

The program allows participants to work togetherin a training course which combines individual study,group sessions and actual project experience in usingleadership skills. Training sessions include identificationof leadership skills, team-building exercises, goal setting,personal profile analysis, network building andimproving communication skills. In total, there are six(6) sessions – three (3) KAR business meetings and three(3) retreats.

LeadershipKAR is open to all REALTOR®

members of KAR, however, a maximum of 15individuals will be appointed to participate in theprogram. Participants will be chosen from a cross-section of the profession and will reflect the diversity ofthe organization. Tuition for the program is $600,however, several of the local boards/associations willcover most, if not all, of this cost. Check with your localboard/association for details. KAR also offers ascholarship to cover the cost for one participant.

Please note: attendance at all sessions (retreats and KARmeetings) is mandatory. The dates for all sessions arelisted on the application.

LeadershipKAR: Growing the Leaders of Tomorrow

Objectives of the LeadershipKAR Program are:• To identify Kentucky REALTORS® who have

demonstrated leadership potential through job-related and community activities.

• To train participants by developing leadership skills.• To motivate participants by:

- Increasing awareness of real estate and association management issues and challenges.

- Involvement in problem-solving activities on issues of current interest; and

- Providing a network of leaders across the state who is actively involved in improving our profession and their local and state Associations.

Apply now for the 2010 LeadershipKAR programwww.kar.com > Education > LeadershipKar

KREC Information

Mortgage Fraud Issues

By Lee B. Harris

Lee B. HarrisGeneral CounselKentucky Real Estate Commission

In recent years, issuesinvolving mortgage

fraud have becomerampant in the real estateindustry throughout thenation. These schemeshave played a huge role inthe current foreclosureand mortgage crisis in ournation. Real estateprofessionals shouldprotect themselves andtheir clients from fallinginto a fraudulent lendingscheme by becomingaware of the laws andknowing where to turn ifa problem arises.

Mortgage fraud cantake many forms. There are, among others, dualcontracting, phantom second mortgages, false appraisals,incorrect closing statement and deeds. The key toeliminating this problem is educating both consumersand licensees about these types of scams. If a licensee isrepresenting a client, for instance, and that licenseebelieves that the transaction involves a mortgage fraudsituation, there are numerous agencies the licensees andthe clients can turn to for advice.

First of all, the Mortgage Broker Licensing Divisionof the Department of Financial Institutions regularlymonitors banks and other financial institutions to ensurecompliance with state laws. In addition, the Departmentof Housing and Urban Development (“HUD”) hasnumerous programs to educate consumers about homepurchases and financial issues. The Attorney General’sOffice has a Consumer Protection Division thatregulates consumer fraud in this state. Finally, manycities and counties have local complaint processes toadvise buyers and sellers about financial decisions andeven investigate complaints.

If a real estate licensee is in a situation that is eitherunlawful or predatory in any way, he or she should seek

NAR has a field guide to mortgage fraud on its website.Check it out at www.realtor.org/library/library/fg330.

advice from the Kentucky Real Estate Commission orone of the above-named agencies. If indeed thecompany is defrauding a consumer or the government,or both, the real estate licensee should refuse toparticipate. In addition, the licensee should report thewrongdoer to the appropriate law enforcement agency.The only way to stamp out these practices, once and forall, is to take action and report them.

The number of Suspicious Activity Reports (SARs)for mortgage fraud tracked by the Federal Bureauof Investigation could skyrocket by nearly 300percent this year.

Compared to 2007, mortgage fraud SARs in 2008had already increased by more than 36 percent toover 63,000. In just the first two months of 2009,the FBI had already documented nearly 29,000mortgage fraud SARs. At that rate, some 174,000SARs, a 276 percent increase, could be filed by theend of the year.

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Education

Convention Education ScheduleIf you need a great reason to attend the KARConvention in Louisville this year, check out theseoutstanding, and truly beneficial, education programs.All sessions are open to members with paidregistration.

Wednesday, September 30Negotiating Skills for Tough Situations – David Knox– 3 hours CE

Thursday, October 1Blogging Effectively – Doug Devitre – 3 hrs CEShort Sales – Charles Cease – 3 hrs CEPower Prospecting w/ Social Media – Doug Devitre – 3hours CEThe Savvy Agent – Joyce Sterling – 3 hours CE (lawapproved)

One hour education sessions on Thursday, October 1include:MCC and Financing – Kentucky Housing CorporationDetoxing Toxic People – Charles HinckleyHVCC – The Good, Bad & Ugly – Panel DiscussionWebsite Optimization – Mission Data

Also available for 3 hours CE, CRS and GRI electivecredit:Marketing w/ Microsoft Office – Pat Zaby – Thursday,October 1Separate registration is required and group discountsare available – as low as $75.

Still Need a Core Course?KAR is holding a last chance Core Course onDecember 30, 2009 at the Crowne Plaza in Lexington.The cost is $75. This course not only meets KREC’sCore Course requirement but also provides 6 hourslaw CE credit. You don’t have to wait until the next tolast day of the year – KAR has other courses scheduledand they are only $50. Check www.kar.com for timesand dates.

Join KAR on Facebook, LinkedIn, ActiveRain andTwitterJoin now and become a member of the KAR groups! Ifyou are not currently on these sites, getting started iseasy. Just log on to www.facebook.com,www.twitter.com, www.linkedin.com orwww.activerain.com and set up a profile. Joining is freeand once you become a member, you can request to beadded to the KAR groups. That’s all there is to it.

To locate the KAR groups, use the site’s search featureor go directly to the group:

Facebookwww.facebook.com/group.php?gid=9244727021Twittertwitter.com/kyrealtorsLinkedInwww.linkedin.com/groups?gid=1323837ActiveRainactiverain.com/groups/kar

2009 GRI ScehduleSept. 16Elective: Sales ContractsBowling Green, KYOct 29-30GRI 5: Systems for SuccessElizabethtown, KYNov 5-6GRI 5: Systems for SuccessAshland, KYNov 11-12GRI 1: Professionalism in Real EstateIvel, KYDec 3Elective: Understanding RE InvestmentsBowling Green, KY

GRI courses 1 -5 are $149 ($99 early bird whenregistered at least two weeks in advance). GRI electivecourses are $75 ($50 early bird when registered at leasttwo weeks in advance). To find out more about the GRIprogram and to register for these courses, go towww.kar.com > Education > GRI. Additional GRIcourses may be added to the schedule. Check thewebsite for more details.

For a copy of all CE courses scheduled for 2009,please visit www.kar.com.

20 www.kar.com

Appraisal Issues

The Home Valuation Code of Conduct (HVCC)establishes standards for solicitation, selection,

compensation, conflicts of interest and appraiserindependence. It became effective May 1, 2009, for anymortgage that will be sold to Fannie Mae or FreddieMac. Federal Housing Administration (FHA) andFederal Home Loan Bank (FHLB) mortgages are notcovered in the agreement.

Mortgage brokers and real estate agents areprohibited from selecting appraisers. Lenders arepermitted to use “in house” staff appraisers to conductappraisals. However, the loan production staff isprohibited from (1) selecting, retaining, recommending,or influencing the selection of an appraiser for anappraisal assignment or for inclusion on an appraisalroster and (2) having any substantive conversation withan appraiser or appraisal management companyregarding valuation, including ordering or managing anappraisal assignment.

The requirements are having a significant impact onappraisal practices as lenders must now comply with thenew requirements of the Code in order to sell theirmortgages to the government-sponsored enterprises(GSPs).

Below are some frequently asked questions fromNAR to help our members navigate this new appraisallandscape.

Does this agreement concern only mortgages in NewYork State? No, this agreement applies to mortgages across thecountry. Starting May 1, 2009, the GSEs will notpurchase single-family loans from mortgage originatorsin any state that do not agree to adopt the Code.

Does this agreement apply to all lenders?Lenders not selling their loans to Fannie Mae or FreddieMac are not obligated to adhere to the HVCC. GSEsmay exclude lenders that meet the definition of “smallbank” according to 12 USC§ 2908 and which the GSEdetermines would suffer hardships from provisions ofthe HVCC. However, excluded lenders must otherwisecomply with the other provisions of the Code and meetappropriate standards of appraiser independence.

Who is responsible for applying the HVCC? The GSEs apply the new code to lenders sellingmortgages on the secondary mortgage market.

What does this agreement mean for the independentappraiser? Independent appraisers, appraisal companies, andappraisers managed by lenders or settlement companiesmust continue to meet appropriate standards ofappraiser independence, including following UniformStandards of Professional Appraisal Practice (USPAP)and maintaining relevant state licenses or certifications.

What does this agreement mean for REALTORS®? Individual REALTORS® and licensed real estate agentscannot serve as a third party between a lender andappraiser. This includes selection, retention, andcompensation of an appraiser.

Broker REALTORS® that offer services as a lender oraffiliated lender and appraiser services must complyfully with the HVCC if there is an expectation that theirloans will be purchased by Fannie Mae or Freddie Macafter May 1, 2009.

Home Valuation Code of Conduct (HVCC):Navigating the New Landscape

Is this agreement federal law? No. This is an agreement signed by two government-sponsored corporations, Fannie Mae and Freddie Mac,and the New York State Attorney General, AndrewCuomo. The federal regulator of Fannie Mae andFreddie Mac, the Federal Housing Finance Agency(FHFA) also signed the agreement. No legislation waspassed or signed into law with respect to this agreement.

Are real estate agents prohibited from communicatingwith appraisers?No. A third party, including REALTORS® and realestate agents, can still ask appraisers for additionalinformation, provide additional information to anappraiser, or ask for corrections of factual errors.

Are lenders required to work only through appraisalmanagement companies? No, lenders may order appraisals directly from anindividual appraiser. Lenders that utilize in-houseappraisers can still order appraisals as long as they areindependent of the loan production staff and do notultimately report to an officer who manages loanproduction.

Can appraisals be adjusted by in-house appraisal staffduring an appraisal review or quality control process? Yes, the HVCC does not prohibit in-house appraisersfrom adjusting an appraisal during the review process.In fact, the Code does not prohibit a lender’s duediligence in originating a loan.

Does the Code apply to all mortgages? No, the code applies only to 1-4 unit single-family loanssold to Fannie Mae and Freddie Mac by mortgageoriginators.

Does the HVCC apply to FHA loans? No. Only Fannie Mae and Freddie Mac have agreed toadopt the code. The HVCC does not apply to FHAloans and the Federal Home Loan Banks are notparticipating.

Are lenders prohibited from requesting a secondappraisal? No, lenders are only prohibited from ordering a secondappraisal if attempting to influence the outcome of thefirst appraisal. Section I.B.(9) of the HVCC addressesthe issue of second appraisals.

Does the HVCC prohibit borrowers from providingpayment directly to appraisers? Yes, only the lender or a third party authorized to selectand retain the appraiser can provide compensation tothe appraiser.

Are settlement service firms permitted to orderappraisals? Yes, settlement service firms may order appraisalsassuming they comply with the HVCC.

Does the borrower get a free copy of the appraisal? Yes, the Code requires the lender to provide theborrower a free copy of the appraisal report. The lendermust provide the copy of the appraisal no less than threebusiness days prior to closing.

Are lenders required to use a pre-approved appraiser listor panel? No. Lenders may choose to use a pre-approved list orpanel but are not required to do so by the Code.Lenders choosing to use a pre-approved list or panelmust ensure that (1) employees of the lender tasked withselecting appraisers are independent of the loanproduction staff and (2) loan production staff is notinvolved with selecting appraisers from the list forparticular assignments.

Appraiser misconduct action will be conducted by statelicensing agencies. What is new? The code is primarily directed at regulating banks andother mortgage lenders and promoting appraisalindependence.

New Resources on HVCC that can be found atwww.realtor.org/hvccFHFA New Guidance NoticeFannie Mae and Freddie Mac FAQ NAR Research: The Impact of HVCC HVCC Myth and Fact FlyerComplete Language of the HVCC


More than 70% of NAR Appraisermembers reported that consumerswere paying higher fees since theHVCC rules went into effect.

Local Association News

Local boards/associations are encouraged to submit information for this section.Pictures must be at least 300dpi. Send all association news to [email protected].

NKY REALTORS® Present Check to Holly HillChildren’s Services

NKY REALTORS® and their Affiliate membersrecently presented a donation of $6500 to Holly HillChildren’s Services. Connie Wong, Executive Directorof Holly Hill Children’s Services accepted the donationfrom John Hodge, president of the Northern KentuckyAssociation of REALTORS®, along with members ofthe Association’s Public Relations committee whoparticipated in golf outings and other fundraising eventsto benefit the charity. Holly Hill Children’s Services,an all-girls facility, is a social service agency.

After the check presentation, committee memberstraveled to Holly Hill’s California, KY campus to meetthe girls in residence there and distribute gift bags toeveryone. In a recent statement, Hodge said, “Themembers and Affiliates of the Association are proud tohelp out the wonderful Holly Hill organization. Theircontribution to “at risk” children is a valuable service toour community.”

Paducah Board ofREALTORS® HonorsSeveral at Dedication

The past presidents of thePaducah Board of REALTORS®

purchased a flag pole for theboard office, something theyhave never had before, and itwas dedicated in their honor byBoard President Leslie Heath.The American flag, donated by

Jesus’ Menendez, was flown over the U.S. Capitol in1991 and was presented by Past Congressman Carol

Hubbard. The Board held a dedication service to honorall their past presidents and the flag was raised in honorof all active and inactive military and Veterans.

“The flag will be flown daily in honor of our activemilitary and the Veterans living and deceased who arefighting and have fought to protect the USA and tocontinue the freedoms we cherish to this day,” saidHeath. “The Board would like to demonstrate to thepublic, as they pass our office, our pride in the men andwomen of the military service, who help us further theAmerican Dream.”

The Board also has a REALTOR® flag, donated bya close REALTOR® friend, which will be flown underthe American flag.

Lexington Named Ambassador City for 2009

Lexington was named a 2009 Ambassador City byNAR and the U.S. Conference of Mayors for thesuccess of two homeownership programs, Repair Affairand the Remodeling for Access and Mobility Program(RAMP). The programs help low-income homeownersmake much needed repairs and modifications.

RAMP and Repair Affair are initiatives of theREALTOR®-Community Housing Foundation of theLexington-Bluegrass Association of REALTORS®. Thefoundation helps individuals achieve their dreams ofhomeownership

“REALTORS® build communities and care as muchabout keeping families in their homes as they do aboutgetting them into homes,” said NAR President CharlesMcMillan, a broker with Coldwell Banker ResidentialBrokerage in Dallas-Fort Worth. “The home repairs andmodifications done by the RAMP and Repair Affairprograms are crucial to helping area homeowners live

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Northern Kentucky REALTORS®

independently and remain in their homes. These twoprograms have been incredibly successful and could beeasily replicated in cities and towns across the country.”

Somerset-Lake Cumberland AssociationContributes to Gary Schroeder MemorialScholarship

REALTOR® members lost a goodfriend and colleague when GarySchroeder, then president of theSomerset-Lake CumberlandAssociation of REALTORS®, diedsuddenly on October 9, 2007. Now,Somerset-Lake Cumberland is proud

to be a part of the Gary Schroeder MemorialScholarship program, which his family created as acontinuing legacy. A donation was presented to theSchroeder family in Gary’s memory.

Gary had a love of all sports but both of his sonsplayed soccer, therefore, the scholarship was establishedto honor a Somerset-Pulaski County area soccer playerbased on academics, achievements on the soccer field,and community involvement. In July, Gary's son, Brianannounced the 2009 scholarship recipient, BrandonSchleter, a Southwestern High School graduate, whowill begin his college career at the University ofKentucky this fall.

Donations can be made to "Gary SchroederMemorial Scholarship" and mailed to Craig Schroeder,603 Lane Allen Road, Lexington, KY 40504.

Heart of Kentucky Association Gives BackThe Heart of Kentucky Association has been busy

this year as the community service committee assistedwith several charities in the area. They participated inthe American Cancer Society Relay for Life, bought 10startup kits for persons in the local domestic violenceshelter “Spring Haven,” sponsored the annualChildren’s Fair, volunteered at the local soup kitchen“Warm Blessings and donated to North Hardin Hopeand Helping Hands.

In addition, HKAR made a donation and membersparticipated in the county wide Repair Affair in Juneand the New Horizon’s group participated in the“Hooray for Heroes” honoring the military and familiesliving in the area.

GLAR Hosts Carnival Day for Camp Quality In July, members of the Greater Louisville

Association of Realtors® Community RelationsCommittee headed to Camp Lukon to host the annualCarnival Day that GLAR hosts for the kids of CampQuality. Carnival Day, one of the campers’ favoriteexperiences during their week, is an entire day devotedto fun for the Camp Quality Kids. Campers participatein an array of games, relays and sports as well as play oninflatable slides, bounces and obstacle courses. Goodiebags stuffed full of prizes were given to each camper,and the committee also hosted a giant cookout that fedover 200 people.

“Our goal is to help these children experience truehappiness in an environment where they can ignore theiroverwhelming troubles,” said Dennis Miller, projectchair. “This is the third year we have done this event forCamp Quality, and every year it just gets bigger andbetter!”

Camp Quality is a non-profit organization thatprovides a week long camping experience and yearround support to children with cancer and their families.


Kudos

Steve Lewis, with the Cave Run Association ofREALTORS®, was inducted into the NationalAuctioneers Association’s (NAA) prestigious Hall ofFame at the 60th annual conference in Overland Park,Kansas in July. Steve, a REALTOR® member since 1973,has served as president for the Kentucky Auctioneer’sAssociation and has served on the Kentucky Board ofAuctioneers Licensing Board since 1985.

Sharon Stubblefield, with the Madison County Boardof REALTORS®, was the winner of a Prudential CaresVolunteer Grant to Habitat for Humanity for $250, theonly such award given in Kentucky. The grant wasreceived for Home Meals Delivery, a non-profit hotmeal work day service to the disabled. Sharon, aREALTOR® member for 28 years, serves on theMadison County Habitat for Humanity Board ofDirectors and received the 2008 REALTOR® of the Yearaward from the Madison County Board ofREALTORS®, an honor she also received in 1997.

By The Numbers

5,0003 out of 4According to Kelton Research in 2005, this manyAmericans (72 percent) stated that when looking atavailable property, the neighborhood was moreimportant than the house itself. The survey also revealedthat on average, homebuyers spend 11.5 hours per weekonline researching potential homes to buy, a numberthat is even higher for women.

According to a study by JDPower and Associates, theproportion of first-time homebuyers has increased to 56% in2009 from 44% in 2008.

According to an article inRISMedia, homes with 20 ormore photos received almost10 times the number of leadsand more than 15 times the number of showings ashomes with only one online photo. And Zillow.comfound that over a seven-day period, listings with at leastone photo were likely to be viewed 41 percent moretimes than listings with no photos.

The median price of a vacation home fellby this percent in 2008 from 2007,according to the National Association ofREALTORS®, and sales have droppednearly 31% from 2007.

According to Trulia as of June 2009, the percent ofcurrent homes on the market in the United States thathave experienced at least one price cut, totaling $27.4billion in reductions. The average price-reduced homehas seen a listing price reduction of 10.6%.

It is estimated that each American is exposed to wellover this many advertising messages per day, and thatchildren see over 50,000 TV commercials a year.

The percent of the onlinecommunity who usessocial networking sites,including Facebook,MySpace and LinkedIn.This is up from 27% ayear ago according to

The Conference Board and TNS. More than half ofsocial networkers log on at least once a day, and themajority log on several times a day.

The percent of NAR memberswere involved in a foreclosuretransaction between July 2007and June 28, 2008, according toresults from the NAR 2009Member Profile.

According to theCensus HousingVacancies Survey,homeownership rateshave fallen this muchin Kentucky from 2000 (73.4%) to 2008 (72.8%).Kentucky, is however, above the national average in2008, which was 67.8%

-0.6%

56%

10x

23

40

23.6

77.2million

24 www.kar.com

It seems as though positive news has been allaround us the past few weeks. Nationally,

even though prices aren’t shooting through theroof just yet, the number of homes sold, bothnew and existing, is seeing some positivemovement and breaking industry expectations.

Sales of previously occupied homes in theU.S rose for the third month in a row back inJune.

NAR reported that home sales rose 3.6percent to a seasonally adjusted annual rate of4.89 million in June, from a downwardlyrevised pace of 4.72 million in May. Incomparison, home sales haven’t risen for threestraight months since early 2004, during thenational housing boom. Prices, however, areexpected to keep falling well into next yearbecause of a backlog of foreclosures that haveyet to come on to the market. The mediansales price on the national level was $181,800in June, down 15 percent from year-ago levelsbut up slightly from $174,700 in May.

New U.S. home sales jumped 11% inJune, the largest amount in more than eightyears, as buyers took advantage of bargainprices, low interest rates and a federal taxcredit for first-time homeowners. The last timesales rose so dramatically was in December2000. New home sales have risen for fivestraight months. The median sales price of$206,200, however, was down 12 percent from$234,300 a year earlier and down nearly 6percent from $219,000 in May.

“It’s a good sign when you start seeingheadlines that indicate the bottom has endedand the market is heading north,” says JeffSmith, KAR president. “Hopefully, wecontinue to see improvement nationally andstate-wide through the remainder of the year.”

Around Kentucky, the real estate industryhas also taken a turn for the better. Medianhome prices for the second quarter saw anincrease of just over a percent compared to thesecond quarter of 2008. In contrast, priceswere down over 2.5 percent in the first quarterof 2009 versus 2008. As for homes sold, thesecond quarter of 2009 saw a decline of 11

Board/Association # Sold # Sold # Sold % Median Price Median Price Median

2Q 2009 2Q 2008 2Q 2009 2Q 2008 Price %

Region One

Henderson-Audubon BOR 73 80 -8.75% 74250 78500 -5.41%

Hopkinsville-Christian BOR 104 107 -2.80% 114920 111500 3.07%

Kentucky-Barkley Lakes BOR 84 72 16.67% 98000 116000 -15.52%

Madisonville-Hopkins BOR 121 112 8.04% 96500 97500 -1.03%

Mayfield-Graves BOR 54 77 -29.87% 67500 72834 -7.32%

Murray Calloway County BOR 94 67 40.30% 112500 98000 14.80%

Owensboro BOR 265 274 -3.28% 111450 113000 -1.37%

Paducah BOR 166 170 -2.35% 119900 119000 0.76%

Pennyrile BOR 86 99 -13.13% 89300 104000 -14.13%

Region Two

Central Kentucky AOR 130 149 -12.75% 90250 110000 -17.95%

Heart of Kentucky AOR 405 441 -8.16% 128750 135000 -4.63%

Old Kentucky Home BOR 114 118 -3.39% 144150 113500 27.00%

REALTOR® Assn of SKY 355 520 -31.73% 125750 128000 -1.76%

Russellville-Logan BOR 17 45 -62.22% 86500 107200 -19.31%

Shelbyville BOR 100 114 -12.28% 136500 144000 -5.21%

South Central Kentucky AOR 61 74 -17.57% 87500 102750 -14.84%

Region Three

Greater Louisville AOR 2882 3347 -13.89% 129000 135500 -4.80%

Region Four

Lexington Bluegrass AOR 2067 2379 -13.11% 138000 145000 -4.83%

Region Five

Northern Kentucky AOR 1280 1432 -10.61% 125000 133000 -6.02%

Region Six

Ashland Area BOR 169 218 -22.48% 94500 93950 0.59%

Cave Run AOR 42 29 44.83% 115000 77000 49.35%

Cumberland Valley BOR 123 150 -18.00% 106250 90500 17.40%

Eastern Kentucky AOR 121 122 -0.82% 117500 96750 21.45%

Madison County BOR 595 594 0.17% 124200 135000 -8.00%

Pioneer Trace BOR 42 60 -30.00% 70000 74625 -6.20%

Somerset-Lake Cumberland BOR 169 162 4.32% 100000 117000 -14.53%

Totals 9719 11012 -11.74% 111975 110750 1.11%

Kentucky Has Optimistic Second QuarterU.S. records positive numbers as well

* Based on information from local REALTOR® associations/MLSs for the periods of April 1 –June 30, 2008 and 2009.

Second Quarter 2009 vs. 2008

Housing Stats


percent when compared to the same time last year. This, however,is a dramatic change from the first quarter of this year, whennumbers were down over 25 percent versus 2008. In June, homessold in the state were down only 2.5 percent compared to 2008.

Community Profile

A Spotlight on ... Haunted Landmarks in Louisville

Louisville, Kentucky is rich in tradition and history.The Kentucky Derby, the Louisville Slugger,

bourbon, and the iconic Muhammad Ali are some of theimages brought to mind visiting this city. But behind thewalls and within the corridors of some of the city’s mostattractive and well known landmarks, a darker past ishidden. In the early 1800s Louisville’s nickname was“the graveyard of the west” due to the countless deathscaused by Indian wars, malaria, bacteria and especiallythe flooding from the Ohio River. Even early nativeAmericans recognized the region as haunted and unsafeas the word “Kentucky” means “dark and bloodyground” in the Iroquois language. These are but a fewreasons that researchers around the world recognizeLouisville as one of the country’s most haunted cities.

One of Louisville’s best known ghost stories can bediscovered at the spectacular Seelbach Hotel. Sinceopening its doors in 1905, this four-diamond hotel hashosted countless guests of fame and infamy. Ninepresidents, the Rolling Stones, Mikhail Gorbachev andAl Capone are but a few of the notable guests at thehotel. F. Scott Fitzgerald was a frequent guest of thehotel, and was so impressed with the building he usedthe Seelbach as his inspiration for the wedding scenebetween Tom and Daisy in his book The Great Gatsby.With the hotel’s fascinating past and preservedarchitecture it is no wonder a few of the Seelbach’sguests have decided to remain forever.

The most well known spirit is known as the Lady inBlue. For decades her identity was a mystery. Repeatedlystaff members and hotel guests would report sightings ofa distraught looking woman wandering the upper floorsand the mezzanine of the hotel, sometimes walking right

through the elevator doors as if they aren’t even there.Always described as having dark hair, wearing a bluedress and seeming to be in a state of misery, thehundreds of eye-witness accounts became impossible toignore. Who was this mysterious woman, and why hadshe chosen to haunt the Seelbach for so many years?No one knew for sure.

In 1987, a couple of employees took it uponthemselves to discover the origin of this ghost story andspent a few hours at the public library. They made aremarkable discovery in an old newspaper article from1936. The article described the tragic death of a womannamed Patricia Wilson. According to the article, Patriciahad moved to Louisville a year earlier. At the age of 24,she had separated from her husband. Days before herdeath, she had been in touch with her estrangedhusband hopeful to repair their marriage. Full of hopefor the future, they had arranged to meet at the SeelbachHotel. Patricia waited anxiously for him to arrive.Hours passed, but he never made it. Finally, a hotelemployee told her of the horrible news that the man shewas expecting had died in a car accident en route to theSeelbach Hotel. Devastated, Patricia ran from the manand was missing for days. Friends and family wereconcerned about her, but there were few clues about herwhereabouts.

A few days after her husband had died in the caraccident, Patricia’s body was discovered in one of thehotel’s elevator shafts. It could have been an accident,but most believed she threw herself down the shaft in adesperate state of grief. According to the newspapers,the woman was wearing a blue dress when her bodywas found.

The Lady in Blue is apparently still activelyhaunting the hotel today.

“We have had several guests capture her image onfilm on the mezzanine level,” said Frankie Harris ofLouisville Ghost Tours, “Sometimes people willcomment on catching a scent in the air around theelevators like the aroma of a woman’s perfume.”

This ghost has been the topic of discussion inseveral magazines, books and newspapers. The Lady inBlue was even on Jeopardy once. She was one of theanswers to a question on an episode aired on Halloweenof 2003.

by Frankie Harris

The Seelbach Hotel

26 www.kar.com

Although this is the best known ghost in downtownLouisville, she is hardly the only one. The Old City Jailwas once famous for being one of the worst facilities inthe country, not for its design or architecture, but forthe brutal treatment of the prisoners there. Today, thecriminals once housed there appear to still be torturedsouls due to the way their ghosts wail and screamthroughout the building.

Other stories like therocking cradle in the BrennanHouse, the mysterious namesdrawn in sawdust at thePalace Theatre, the image of acigar smoking man at theBrown Hotel, and the pale,thin figures witnessed in thewindows of the oldest homein the downtown area areparts of a tapestry that makeLouisville a truly hauntedcity.

Other Kentucky Hauntings

One of the most well-known haunted places inKentucky is the Waverly Hills Sanatorium locatedin Louisville. Literally thousands of people diedhere during the tuberculoses epidemic, as well as asuicide or two, and some untimely deaths at thehands of doctors who practiced experiments ontheir patients.

Liberty Hall, a historic mansion in Kentucky’scapital and formerly owned by the family of JohnBrown, one of Kentucky’s first senators, is said tobe haunted by at least three different ghosts.Supposedly, the prim and proper apparition of “TheGray Lady” has been reported dozens of times, butshe is not alone. There have also been reports of ayoung unknown soldier peering in from outside thewindows, as well as the image of an Opera singerwho wondered into the garden while attending aparty at Liberty Hall, and never returned.

The Clay Estates (Ashland and White Hall), locatedin Lexington and Richmond, are said to be visitedby their previous owners. Henry’s white-hairedghost is often seen leaning against the fireplacemantel in the parlor of the Ashland estate. As forWhite Hall, the entire family seemingly decided tostay on, including some of the family’s servants.

Bardstown has its fair share of haunted hotels. TheJailers Inn, which was formerly a jail house and isnow a bed and breakfast, has had numerous reportsof disembodied footsteps and sounds of crying. TheOld Talbott Inn supposedly has guests who neverchecked out.

The Brown Hotel

Louisville Ghost Tours is a subsidiary of TimelineGhost Tours. Timeline has been conducting tours forover six seasons and has successfully developed areputation for providing entertaining, historicallyaccurate tours. Our tours, tour guides and stories havebeen featured on the Travel Channel, TLC, NBC, CBS,FOX, PBS and more. If you would like to takeLouisville Ghost Tour, call (502) 339-5445 or visitwww.louisvilleghosttours.com. Mention the KARConvention and receive $3 off each adult admission.

The Palace Theatre


The Brennan House

Say What? A Guide to LegalesePart I - Ownership Rights

Legal Update

by Doug Martin

Hardly a day goes by that I am not asked to translatelegalisms for clients. You know what I mean –

legalese, jargon, mumbo jumbo, gibberish, gobble-de-goop, double speak, babble! As REALTORS®, you alsodecipher these terms for clients nearly every day. Thissection of Kentucky REALTOR® presents Part I of AGuide to Legalese to help you navigate these terms. Part 2and beyond will come in future issues of the magazine.

General Warranty & Special Warranty DeedsA general warranty deed is an instrument conveying

legal title to real estate, in which the seller binds herselfand her heirs to warrant and forever defend title to theland conveyed against the claims of “all other persons.”By contrast, in a special warranty deed, the seller onlybinds herself and her heirs to warrant and forever defendtitle to the land conveyed against the claims of the sellerand persons claiming by or through the seller. Thus, aspecial warranty is much more limited than a generalwarranty, and does not warrant against defects arisingearlier in the seller’s chain of title.

Quitclaim DeedA quitclaim deed is an instrument conveying an

interest in real property by way of release. A quitclaimdeed transfers all right, title or interest that the grantormay have in real property, if any, but the grantor does notwarrant that his claim in the property is valid or that he infact actually owns the property at all. In contrast to ageneral warranty or special warranty deed, a quitclaimdeed contains no warranty or covenant of title at all.

Dower & CurtesyDower is the common law right of a widow to certain

lands or tenements upon the death of her husband, for hersupport and the nurture of her children. Curtesy is asimilar common law right to certain lands or tenements towhich a husband is entitled upon the death of his wife.

Joint TenantsJoint tenancy is an estate in land that arises by a

purchase or grant to two or more persons. Joint tenantshave one and the same interests, accruing by one and thesame conveyance (such as a deed), commencing at one and

the same time, and held by one and the same undividedpossession. (These are known as the four unities of jointtenancy.) The most notable feature of joint tenancy issurvivorship, whereby the entire interest of a deceasedjoint tenant passes equally at the time of death to thesurviving joint tenants, and ultimately passing to the lastsurviving joint tenant. For this reason, joint tenants arefrequently referred to as “joint tenants with right ofsurvivorship.”

Tenancy by the EntiretyTenancy by the entirety is a form of joint tenancy

that is created solely between a husband and wife. Tenantsby the entirety together hold title to real property withright of survivorship, so that upon the death of either, titleto real property passes to the spouse, even to theexclusion of heirs listed in the decedent’s will. The maindifference between tenancy by the entirety and jointtenancy is that joint tenants may deal with the property asthey wish. In tenancy by the entirety, each tenanteffectively owns the entire property, and neither can dealwith the property without the other. One effect is toprevent the judgment creditors of one spouse fromenforcing liens against the subject property during thelifetime of the other spouse.

Tenancy in CommonTenancy in common is a relationship between owners

where each owner holds an undivided interest in and anequal right to use and possess the subject property. Unlikejoint tenancy or tenancy by the entirety, the interest of atenant in common does not terminate upon his or herdeath, and there is no right of survivorship. Thus, uponthe death of a tenant in common, their rights in thesubject property pass to their estate or heirs, but not tothe other tenants in common.

The previous discussion should not be viewed as legaladvice. Please consult your attorney.28 www.kar.com

Doug Martin is Legal Counsel for theKentucky Association of REALTORS®and maintains his private law practice in Lexington, KY.

Up to Code

To Mediate, or Not to Mediate, That is the Question By Y. Denise Payne Wade

Y. Denise Payne Wade, StaffAttorney, Kentucky Real EstateCommission

The door to the Commission’s informal resolutionprocess is opened whenever the Commission orders a

case to proceed to an administrative hearing. Onceopened, the parties are free to enter and explore thesettlement possibilities that lie within, which may or maynot involve mediation. This article will describe theCommission’s informal resolution process and the rolethat mediation plays in it.

After reviewing and considering all availableinformation pertaining to its pending complaints, theCommission determines, by majority vote, which oneswill proceed to a formal evidentiary hearing, identified aseither a non-recovery fund case or a recovery fund case. Anon-recovery fund complaint case involves allegations ofone or more license law violations for which disciplinecould be imposed. In these cases, the parties are the realestate agent(s) complained against and the Commission,represented by one of its staff attorneys. In a recoveryfund complaint case, the parties are the real estate agent(s),the Commission, and one or more consumers, allegingthat they have suffered monetary losses as a result of theagent violating one or more license law provisions whileengaged in fraud.

To initiate the hearing process, the Commission issuesa Notice of Hearing and Charges, in accordance with therequirements of KRS Chapter 13B, which governs theprocess. Thereafter, Commission staff contacts theAttorney General’s office to schedule a telephonicprehearing conference with the parties and the assignedhearing officer, who is employed by that office. Thepurpose of the conference is to explore settlement andmediation possibilities, as well as other matters that willpromote the orderly and prompt conduct of the hearing.

The Attorney General’s office provides hearingofficer and/or mediation services for the Commission, andother administrative agencies in Kentucky, upon request.During mediations in the Commission’s non-recoveryfund cases, it is my responsibility to ensure that I haveaccess to all the available information I need to reach a fairand equitable settlement agreement. This could mean thatan individual with firsthand knowledge about the facts ina mediated case involving a swearing match, for example,might be invited to attend and participate in themediation, to help clarify the facts only. Under thosecircumstances, the individual will not have party status.

During mediations in the Commission’s recoveryfund cases, I have the additional responsibility of ensuringthat the consumer parties understand that I represent theCommission only and that it is their personalresponsibility to decide whether they need private legaladvice. In these cases, my role is also to protect theCommission’s recovery fund against improper claims byhaving the facts clarified, to the fullest extent possible.

Finally, the role that mediation plays in theCommission’s informal resolution process has changedover the years. Specifically, the Commission’s former staffattorneys, exercising their Commission-granteddiscretion, routinely requested mediation for each casethat the Commission ordered to hearing. Exercising thatsame discretion, I have deviated from that practice becauseit is my belief that mediation should not be the “first step”in settlement discussions. For me, the first step should beoffering the parties a proposed settlement agreement.

While a right to a hearing exists, a right to mediationdoes not. Consequently, none of the parties, including theCommission’s representative/staff attorney, is “ordered”to participate in mediation. Nonetheless, I agree toparticipate in it if an impasse has been reached during theparties’ initial “good-faith” settlement discussions. Iemphasize “good-faith” because it takes more than a “wehave it and we reject it” response to a settlement offer (orworse: mere silence) for me to agree to participate inmediation, which is strictly a voluntary process.

To conclude, mediation is more beneficial when it istimely and properly used. Moreover, if mediation is trulywarranted in a particular case, it will likely be moreproductive and efficient if the parties have engaged ingood-faith settlement discussions beforehand. By doingso, the parties increase the odds that they will be able toidentify and address the issue or issues that caused themto deadlock and seek mediation.


The NATIONAL ASSOCIATION OF REALTORS® has carefully considered how we can best supportyou, our members, in these uncertain times. NAR is here to assist you and your business withthe RIGHT TOOLS, RIGHT NOW. Effective immediately, NAR is offering members over 300 NARproducts, publications and services for FREE or AT COST so you can easily take advantage of thetimely tools, tips and strategies you and your business need.

Get these valuable products and resources RIGHT NOW at www.REALTOR.org/RightTools

SPECIAL ANNOUNCEMENT FROM NAR:FOR OUR MEMBERS

RIGHT TOOLS, RIGHT NOW offers hundreds of business building NAR products and resources FREE or AT COST, including information

on The Homebuyer’s Tax Credit, Webinars, Downloadable eProducts,and much more—all aimed at your success.

www.REALTOR.org/RightTools

NAR IS HERE TO SUPPORTOUR MEMBERS— NOW.

30 www.kar.com

Earleene WoodsMurray, KYHeld GRI designation for almost 2 years

A GRI Designee

A Day in the Life of...

When did you receive real estate license and when did youbegin working toward your GRI designation?I received my real estate license in June of 1988. I took myfirst GRI class years ago and completed the program inJanuary 2008.

What influenced you to get the GRI designation?There was a 3 day class offered close to me back when it wasvery rare that a GRI class was offered in the area. When thetime limit (there is a 5 year limit on start to finish on theGRI designation) was placed on completing the designation,I decided to go on and finish because I didn't want to losemy credit. I am so glad I did now because not only did itteach me a lot, it spurred me on to further my education.

How has holding the GRI designation helped yourbusiness?I think more than anything, it has increased my confidenceand given me better tools to do my job.

What is the most important aspect of education that allREALTORS® and licensees should keep in mind?As a residential agent, I think we can lose sight of the factthat the home is the largest single investment most clientsmake. Most of the time, we are helping them make a verylife changing decision. There is a fine line that has to bewalked - it needs to be a professional and insightful process,but it needs to be fun too.

What kind of clientele do you most often work with?Average income. I do not get many high end buyers orsellers.

What other designations do you hold?I have my CRS (Certified Residential Specialist). I also havethe ASP (Accredited Staging Professional) designation andam a graduate of the LeadershipKAR class of 2008.

From the perspective of a GRI designee, what advicewould you give your fellow real estate agents?Don't pace yourself by everyone else. Just strive to be abetter agent with each and every transaction.

Above all else, what is your favorite thing about being inthe real estate business?Definitely the people. I have made so many friends in thisindustry. The REALTORS® I work with everyday, theagents I have met going to meetings across the state andclients and customers I have been able to assist.

What is the funniest or most embarrassing situation youhave been in as a REALTOR®?Probably one of the more "interesting" moments was whenI showed a house several years ago. There was no door onthe front of the house and the house had been added on tonumerous times. We went in thru the carport and"meandered" all the way through to the far bedroom. Wewere discussing how far it was to get to an outside doorfrom that bedroom when I opened the closet door and inthe floor laid a 6' long snake skin. I informed my customersto be prepared because the house was going to have a frontdoor soon if the owner of that skin came in looking for it.

Do you have any future plans in furthering youreducation?Definitely. I am planning to start on another designation thefirst of next year. Not sure which one yet, but I think it willbe ABR.

Outside of business, what is your favorite past-time?I enjoy cooking. My favorite is baking cakes and cookies. Ialso like to read and I love to travel. Taking pictures is also abig hobby (and necessary for business) – I love my camera.

What is the best advice you have ever received?It came from Mike Gooch, an instructor of the GRI 2. Hetold us he just didn’t understand the mentality ofREALTORS® in the industry. Seventy-five percent of ourbusiness comes from other REALTORS® and yet most ofus try to make everything one-upmanship and try to provehow smart we are. He said we need to use the golden ruleand treat other REALTORS® with respect. I think if we alldid that, not only would we be winners, our buyers andsellers would be too.

The NATIONAL ASSOCIATION OF REALTORS® has carefully considered how we can best supportyou, our members, in these uncertain times. NAR is here to assist you and your business withthe RIGHT TOOLS, RIGHT NOW. Effective immediately, NAR is offering members over 300 NARproducts, publications and services for FREE or AT COST so you can easily take advantage of thetimely tools, tips and strategies you and your business need.

Get these valuable products and resources RIGHT NOW at www.REALTOR.org/RightTools

SPECIAL ANNOUNCEMENT FROM NAR:FOR OUR MEMBERS

RIGHT TOOLS, RIGHT NOW offers hundreds of business building NAR products and resources FREE or AT COST, including information

on The Homebuyer’s Tax Credit, Webinars, Downloadable eProducts,and much more—all aimed at your success.

www.REALTOR.org/RightTools

NAR IS HERE TO SUPPORTOUR MEMBERS— NOW.

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