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.

Confused About the Core Course?

Written by Walter Boomsma, instructor. See his blog.

door_decision_pc_400_clr_2583-300x218The Maine Real Estate Commission recently introduced a new core course. Well, more accurately, TWO new core courses. This means a lot more options for licensees but it also means a lot more potential confusion.

Let’s start with the basics. Most know that 21 hours of continuing education are required to renew a real estate license and those 21 hours must include a core course.  The confusion often comes about when there is more than one core course being offered. This newest release means that for a few months, there will actually be three core courses available. Which one do you take?

The answer lies in knowing when your license expires and what type of license you will be renewing. If your license expires on or after April 1, 2015:

  • If you are renewing an Associate Broker or Broker License, you’ll need to take the Core Course for Brokers and Associate Brokers – I.”
  • If you are renewing a Designated Broker License, you’ll need to take the “Core Course for Designated Brokers – I.”

It’s really that simple–on or after April 1. Just understand, the course required is based on the license you hold. Designated Brokers must take the Designated Broker Course. If you are a Designated Broker, taking the course for Brokers and Associate Brokers will not satisfy renewal requirements. Likewise, Brokers and Associate Brokers must take the Broker and Associated Broker Course. Taking the course for Designated Brokers will not satisfy renewal requirements.

It may well be that the best approach is to take both courses! You’ll still get three hours of credit for the course that isn’t required. For example, a Designated Broker must take the “Core Course for Designated Brokers – I” and would earn three credit hours.  That Designated Broker could then take the “Core Course for Brokers and Associate Brokers – I” and earn three credit hours for a total of six towards the requirement of 21.

What if your license expires before April 1, 2015? In an attempt to keep it simple, all that happens is you have one more option and this third option is the same for all licenses.

The two courses already mentioned work the same–you would take one of those two courses based on what license you are renewing. All licenses have a third option of taking theWorking With Buyers – What Have We Agreed To? Core Course”

In other words, if your current license expires before April 1, 2015, here’s how you could meet the core course requirement:

If you are an Associate Broker or Broker:

  • Take either the Working With Buyers – What Have We Agreed To? Core Course” or Core Course for Brokers and Associate Brokers – I”

If you are a Designated Broker:

  • Take either  Working With Buyers – What Have We Agreed To? Core Course”  or Core Course for Designated Brokers – I”

On or after April 1, 2015 the “Working with Buyers” course will NOT satisfy the core course renewal requirement.

This really sounds harder than it is, but you do need to be certain you “get it right.”

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Am I A Criminal?

Written by Walter Boomsma, instructor. See his blog.

 

For real estate licensees, this question arises at least several times. The application for a license is the same for sales agents, associate brokers, and brokers. Very close to the top you must decide:


CRIMINAL BACKGROUND DISCLOSURE
NOTE: Failure to disclose criminal convictions may result in denial, fines, suspension and/or revocation of a license.

1. Have you ever been convicted by any court of any crime?


And there are only two possible answers: “Yes” or “No.” There is no option “I’m not sure.” Given the warning that “Failure to disclose criminal convictions may result in denial, fines, suspension and/or revocation of a license,” you probably would like to get this right. (A similar question applies when renewing a license or applying for an agency license.)

The second time this arises is not a fixed event, but falls under Title 32 §13195 (that would be page 13 in the Maine Real Estate Law and Rule Handbook published by Abbot Village Press): “…criminal convictions… must be reported to the director no later than 10 days after…” In what will at first seem plain language, if you are convicted of (not arrested for) a crime, you have ten (10) days to so inform the Maine Real Estate Commission. As with most legal questions, the answer is not always a s straight-forward as one might think.

law_book_and_gavelThere are some not so obvious cases that most people wouldn’t consider a crime. In a recent consent agreement a licensee agreed to a fine for failing to disclose a criminal conviction within ten days. His crime was “operating an unregistered motor vehicle.”

If you are surprised by this, raise your hand. I thought so. Since I was also I did a little research and found that there really isn’t a clear definition of which motor vehicle violations are considered criminal. The two answers I received that made some sense are:

  1. Consult an attorney.
  2. It should indicate whether or not it’s considered criminal on the actual ticket.

Bear in mind this also is not limited to traffic violations–there are fish and wildlife violations that may also be considered criminal offenses.

But there’s good news. We can make this complicated topic very easy. If you run afoul of any law and are found guilty (convicted), you don’t have to figure out whether or not it’s a criminal case, you can just report it. I suppose parking tickets might be an exception… but what I found in my research is that almost any violation can rise to the level of a criminal offense.

Understand I’m not providing legal advice, just being practical. Every so often I will cover Title 32 §13195 in a licensing class and see a deer in the headlights look accompanied by an “uh oh.” We have to remember that our licenses are privileges and that privilege is easily endangered when there is a “change in the conditions or qualifications set forth in the original application” that we fail to report. Remember, we’re not just talking about “bad” things–a change of address qualifies.

Some of the basic changes can be completed online at the Maine Real Estate Commission website. Some require the completion of a form and payment of a fee. Others (such as criminal convictions) can be accomplished by sending an email, letter or fax – if available, the notification should include the judgment and commitment document or decision/consent agreement for professional discipline. Be sure to keep a copy in your file–probably with your Continuing Education Credits!

Much like the wisdom we apply to property disclosures, “when in doubt, disclose.” Getting convicted for operating an unregistered motor vehicle doesn’t mean you’ll be disciplined by the Maine Real Estate Commission. Failing to tell them it happened could.

REEA Spotlight Member

The December 26, 2013 Spotlight Member of the Real Estate Educator’s Association (REEA) website is Arthur R. Gary! See their front page announcement here, where Arthur’s photo and profile will be featured for the day.

Beware Of Zombie Property Titles

Article from Your Realty Insider.

 

HHouseWith the economic downturn, anyone dealing in real estate quickly became familiar with previously little-known terms such as foreclosure and short sale. Now that the housing market is picking back up and people are moving on, a new term is coming to light – zombie titles.

The Zombie Title
This is when a home has been vacated because the owners defaulted on their loan and their bank started the foreclosure process. However, for some reason or another the bank never completed the foreclosure and sold the home. So, when the city starts fining someone for the overgrown grass and dilapidated structure, the homeowner who thought they were finished with the property gets the bill.

A Home That Keeps Haunting
Homeowners think they don’t own the property any longer and therefore try to move on by rebuilding their credit score and finding a new place to live. It can be a rude awakening to find out that not only do they still own a home they could have been living in, but also its long vacancy has caused it to fall into disrepair.

It’s Spooking The Neighborhood
These vacant homes can decrease the value of a neighborhood. If the bank or the unsuspecting homeowner are neither one taking care of the property, then it can become overgrown and an eyesore on the block. It becomes a problem with no solution because the owner won’t want to invest any money in fixing up the property when the bank could come back with the foreclosure at any time.

Nail Shut The Foreclosure Coffin
Homeowners who have foreclosed on a home should double check that their bank actually followed through to closing on a sale. They could contact their lender or check public property records just to make sure. Otherwise, they could be haunted by their housing nightmare all over again. Don’t let the zombie title of a past property haunt your future! Check with your bank to make sure you’re free and clear of your foreclosure. If you’d like more information on zombie titles or have other questions about local real estate, please contact your trusted real estate professional.

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