THE LONGER VIEW CONCERNING LEAD

Residents in Flint, Michigan recently learned that they have been drinking water highly contaminated with lead and the problem has persisted now for some time. This is due, in part, to a failure to act, but also because lead is a persistent element… it doesn’t break down. Those who pay attention to issues of public concern also know that Flint is not all that unusual. Many places have inadequate protections against lead. Lead is in paint, water and soil but there are ways to prevent and reduce exposures, some of which cost very little or nothing at all. Proper disclosure raises awareness. It can start with the EPA pamphlet Protect Your Family from Lead in Your Home. This brochure is a mandatory requirement before a buyer or lessee is obligated.

Experts who work with lead know that the benefits of preventing lead exposure far outweigh the costs of taking action and that there is an overwhelming case for paying attention and investing in lead hazard reduction.

The current Administration is proposing many changes in federal enforcement, policy, and regulations, and it may be tempting at this point to think that it is no longer necessary to really pay much attention to the issue of lead, or consider investing in exposure reduction, because the risk of getting into trouble is reduced. This is a mistake.

A certain kind of risk may be reduced in the short-term, but other types of risks persist. Lead persists. The risks are severe and probable enough that no professional should feel intelligent in veering from the path of responsibility due to a perceived drop in potential liability. Not only has the potential for private civil liability increased (not least because of the advances in our understanding of how lead harm occurs and how it can be prevented) but also because plaintiffs are more likely to go to court out of conviction. They want to right a wrong and are compelled to seek justice. Once lead enters the body, it can cause long-term harm and prevention is critically important to the health and wealth of a community. Failure to exercise proper care risks various liabilities. Failure to responsibly manage the problem of lead is a business, legal and moral issue. In addition, administrations change and a new administration can look back and enforce violations quite easily. The lead laws work by placing the requirement to document compliance on the regulated party.

Real estate agents are well advised to know and be faithful to the full requirements of the lead disclosure law. All real estate professionals should either observe or insist on full compliance with the Renovation Rule, even though this rule has been targeted by the Administration. These rules represent only one facet of the law, not the whole law, and compliance is just the beginning of awareness. By fully appreciating the purpose of these laws, and understanding the value in investments in lead hazard reduction, real estate professionals can attract business, improve their reputation, preserve the value of their properties and reduce the possibility of lawsuits.

In addition, investments in lead hazard reduction can be combined with improvements in energy efficiency and aesthetics. Properly planned, they minimize budget constraints.

 

 

Rick Reibstein has taught lead compliance to real estate professionals since 2004, after serving as an enforcement attorney at the U.S. Environmental Protection Agency. He currently teaches environmental law and policy at Boston University and the Harvard Extension School and is a frequent Instructor for the Arthur Gary School of Real Estate.

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§1031 EXCHANGES KEEP REAL ESTATE MOVING

Have you been feeling it?  We sure have!  Real estate transactions have been up considerably in the last few years and a large percentage of those have been 1031 Exchanges.  When speaking with our clients, the high volume of exchanges can be attributed to a number of reasons.  

Real estate remains strong and investors are starting to look for ways to change or build upon their portfolios.  Properties that held as stable investments through the downturn are now showing significant appreciation and equity.  Since multiple properties can be acquired through a single Tax Deferred Exchange, investors can diversify their real estate portfolio, thereby hedging the investment risk inherent in a single property.  These replacement properties can offer greater income and long-term appreciation potential.

For some, it’s all about the taxes: In 2013 the Affordable Healthcare Act began imposing a 3.8% tax on certain investment income, including capital gains, for those with an Adjusted Gross Income exceeding $200,000 for single filers and $250,000 for married couples filing jointly. Additionally, the American Taxpayer Relief Act raised the top long-term capital gains rate from 15% to 20% for those with a taxable income of $400,000 for single individuals and $450,000 for married couples filing jointly.  Both of these taxes, combined with the 25% Depreciation Recapture Tax and the state capital gains tax, cause a substantially greater amount of equity to be due to the Federal Government at tax time.  With upwards of 1/3 the gain due in taxes, Investors utilize 1031 Exchanges to preserve their equity and grow their portfolio!

For others, Exchanging is an estate planning tool:  Investors want the income and benefits of ownership while they are alive, but want the property and hard-earned equity to pass on to their heirs upon death.  When a taxpayer dies, the estate receives a stepped up basis in the inherited property.  As a result, all of the built in gain disappears upon the taxpayer’s death.  This taxpayer could have exchanged multiple times during their lifetime, leaving their heirs with a sizable benefit that would have otherwise been greatly reduced if the taxpayer had sold the property outright, paid the taxes and just given the remaining cash to the future heirs.   

These strategies are excellent tax saving opportunities for a 1031 Exchange, and for all those involved in the real estate transaction.  We pride ourselves on not only being the industry leader in service and security, but we also strive to help our clients and their advisors keep current on tax issues pertaining to §1031 exchanges and applications for them. IPX1031® is your complete information resource. For more information about us, IRC Section 1031, or our complimentary monthly webinars, visit our website at http://www.ipx1031.com.

Patricia A. Flowers is Vice President with Investment Property Exchange Services, Inc.(IPX1031), the largest and most secure Qualified Intermediary in the country.  In 2004, Patricia received one of the first industry-awarded Certified Exchange Specialist® (CES®) Designations. In her role she strategically guides investors and advisors through the process, structuring transactions to help investors preserve equity and save thousands in taxes.

Patricia’s involvement spans the legal, financial, brokerage, tax and real estate industries, where she has participated in thousands of Exchanges. She is a member of various associations, including CREW-Boston (Women in Commercial Real Estate) and the Federation of Exchange Accommodators (FEA). Patricia is a frequent lecturer on IRC §1031 Exchanges, an instructor for CLE, CPE and CE credit, and author of numerous articles including an ongoing column the New England Real Estate Journal.

She can be contacted at 617-423-1031 or patricia.flowers@ipx1031.com

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Should I Renovate…?

Written by Walter Boomsma, instructor. See his blog.

A question we often hear from potential sellers is whether or not they should renovate or otherwise improve the property before selling. While there’s no one correct answer (except “it depends”), most licensees will recommend some degree of “freshening” — cosmetic improvements that might fall under the headings of staging or curb appeal.

paintBut what about the “bigger” stuff? Should we remodel the bathroom?

Every year Remodeling Magazine reports the results of research designed to determine which projects have the greatest dollar return. The results of the most recent survey are reported on REALTOR.COM and might surprise you. While sexy renovations may help with the sale, it doesn’t necessarily mean a great increase in value. The top return was attic insulation–statistically it returns more than the cost.

We ought to bear in mind (and explain to prospective sellers) that the value of the improvement shouldn’t simply be measured in dollars, but having some data beats pulling our opinions out of the air. If you look at the chart, note also there are regional differences. Also, pay attention to what people are saying. I know when I talk with folks who are buying and selling two things that come up consistently are “energy efficiency” and “aging friendly.” It shouldn’t be a surprise to hear that in Maine where we have an aging population and some mighty cold weather.

One of the funnier questions I had a few years ago came from a young couple who wondered, “Should we remodel and add a bedroom if we’re planning to sell in ten years–will we get back the money we spend?” That’s some strategic thinking! In this case, they ultimately decided ten years living in a home with the additional bedroom would be worth spending the money–even if the long-term payback wasn’t guaranteed. There are too many “it depends” to answer the dollar question with any degree of certainty.

Seth Godin recently wrote a piece (Economics Is Messy) about the difference between value and profit. When considering the “Should I renovate…?” question, it’s an important distinction. The average dollar “return” on improvements is about 64%, making most improvements a loss if we only measure in dollars. When we look at the value we include factors like how much more salable the property becomes and how much pleasure the current owner will reap from the improvement. Those factors add value and may well offset the lack of dollar profit.

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Could Facebook Ads Violate the Fair Housing Act?

Written by Walter Boomsma, instructor. See his blog.

Walter notes: I’ve occasionally observed that Facebook ads are a great place to find ads that do not meet the requirements of Maine License Law and Rules. Well, here’s another article (reposted courtesy of Tuesday Tactics) that raises a slightly different concern!


fair-housing-logoFacebook ads are a powerful way to generate leads, find prospective buyers and sellers, and optimize your marketing spend. There are lots of tips out there on how to maximize your ROI and craft ads.

But recently Pro Publica reported that Facebook’s ad targeting system may violate the Fair Housing Act of 1968. From the piece “Facebook Lets Advertisers Exclude Users by Race“:

“The ubiquitous social network not only allows advertisers to target users by their interests or background, it also gives advertisers the ability to exclude specific groups it calls “Ethnic Affinities.” Ads that exclude people based on race, gender and other sensitive factors are prohibited by federal law in housing and employment.”

Facebook disagrees. According to an article in Engadget:

“Facebook defended the practice, telling USA Today that “multicultural marketing is a common practice in the ad industry and helps brands reach audiences with more relevant advertising.” However, it added that “we’ve heard from groups and policy makers who are concerned about some of the ways our targeting tools could be used by advertisers. We are listening and working to better understand these concerns.”

If you use (or are considering) Facebook’s sophisticated ad targeting, you may want to keep this issue front and center in your mind. Be prudent how you use the targeting, and be aware that there’s a debate going on right now about the legality of the platform’s features.


Tuesday Tactics was developed in the Fall of 2008 and began publishing in the Summer of 2009 by Scott Levitt, owner of Oakley Signs & Graphics, to help real estate agents survive and thrive in an increasingly challenging market. In addition to Oakley Signs & Graphics, Scott is also the founder of My Real Helper, a real estate marketing content service designed to help agents market themselves and build rapport with clients. His newest company is Oakley Canvas Prints, a one-stop source for turning your photos into art you can hang on your wall.
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REALTOR SAFETY ALERT

Written by Walter Boomsma, instructor. See his blog.

caution

PLEASE TAKE NOTE! A female Bangor agent was contacted today by a buyer named “Doug”. The call sounded suspicious, as he refused to give his last name and said he could not receive emails because his server was down. He said he is a hairdresser and looking for a $400-$500K property in the Greater Bangor area because he has a grand opening for a salon next week. She Googled the number and found it was from Massachusetts, and there is a REALTOR Safety Alert regarding his activity, which is copied below.

IF YOU GET A CALL FROM HIM, PLEASE CALL THE POLICE. DO NOT AGREE TO MEET OR SHOW THIS MAN ANY PROPERTIES.


REALTOR SAFETY ALERT: SUSPICIOUS CALLS IN MEDFIELD MASSACHUSETTS:

September, 2014: In February of 2013, we learned that a suspicious individual, identifying himself as “Doug” and calling from phone number 508-816-1064, had been contacting female agents indicating an interest in looking at vacant properties for a hair salon, calling it both “House of Doug” and “Hair by Doug”. Last week, he contacted several female agents of an office in Medfield, with the same story and phone number, interested in properties on the Natick/Framingham line. When asked for an e-mail address by agents he says it is still being set up, which was what he also said in February 2013. The police have been contacted and have reached out to him, and we urge all members, male and female, to exercise vigilance if contacted by anyone who may appear to fit the description above, and always take extreme precautions in performing your duties as a REALTOR®. Please contact your local police if you receive a call so that there is a record.

‘Massive’ Shortage in Appraisers Causing Home Sales Delays

CNBC reports on the nation-wide shortage of appraisers and some reasons behind it in this interesting article.

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SLRadcliffe | Getty Images

 

http://www.cnbc.com/2016/09/27/massive-shortage-in-appraisers-causing-home-sales-delays.html

 

For those thinking about a career in the appraisal business, the Arthur Gary School of Real Estate offers live and online courses to cover the education you need to start as a trainee.

Please call the office at 207-856-1712 for more information.

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Arthur Gary – REEA Spotlight Member!

Congratulations to Arthur Gary, today’s Spotlight Member on the REEA homepage!

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