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.

Advertisements
Posted in Walter Boomsma. Tags: , , , , , . Comments Off on Should I Renovate…?

“New” Core Courses — but let’s not call ’em that

Written by Walter Boomsma, instructor. See his blog.

When my oldest daughter was a toddler we were at the beach. In a parental desire to show her things and develop her understanding and vocabulary, I pointed out sea gulls. (She liked animals and birds–still does.) In short order, she began pointing and saying, “Daddy! Birds!” Somewhat absent-mindedly I would reply, “Those are seagulls, Bethanie.”

After several of those exchanges, she said pointedly, “Daddy, you can call them seagulls. I’m going to call them birds.” I have always admired her independence. On this occasion, I opted to accept her refusal to adopt my vocabulary.

But names can be important. So after announcing that “new core courses” are being released, we will not be referring to them as “new” and “old.” We need some fairly precise language here, so I will refer to them by their proper names. Effective October 1, 2016, there be a Core Course for Designated Brokers 2 and a Core Course for Brokers and Associate Brokers 2. These courses effectively replace the Core Course for Designated Brokers 1 and the Core Course for Brokers and Associate Brokers 1. When I say “replace,” understand that the courses numbered 2 are different than the courses numbered 1–both in content and application.

So what should you take (or have taken) before you renew your license?

What hasn’t changed:

Designated Brokers must take the “Core Course for Designated Brokers.” Brokers and Associate Brokers must take the Core Course for Brokers and Associate Brokers. That’s actually pretty straight-forward.

Where it potentially gets confusing:

Whenever there’s a change in core courses, the question always raised is “which core course do I need to have completed when I renew my license?” The answer is, “It depends!” While figuring out the answer initially sounds a bit daunting, this too is fairly straight forward. It depends on the expiration of the license you are renewing. It might help if you have that information before reading further.

Brokers and Associate Brokers with a license expiration date prior to April 1, 2017 (and who renew before that date) may fulfill the core course requirement with either the Core Course for Brokers and Associate Brokers 1 OR the Core Course for Brokers and Associate Brokers 2.

Designated Brokers with a license expiration date prior to April 1, 2017 (and who renew before that date) may fulfill the core course requirement with either the Core Course for Designated Brokers 1 OR the Core Course for Designated Brokers 2.

Brokers and Associate Brokers with a license expiration date on or after April 1, 2017 (and who renew after that date) must fulfill the core course requirement with the Core Course for Brokers and Associate Brokers 2.

Designated Brokers with a license expiration date prior to April 1, 2017 (and who renew before after date) must fulfill the core course requirement with  the Core Course for Designated Brokers 2.

The same explanation would apply to activating a currently inactive license. If you activate before April 1, 2016, either course is acceptable. On or after April 1, 2017, you must have the appropriate Course 2.

If you are at all confused, don’t guess! If you call or email me, the first question I’m going to ask you is “When does your license expire and when to you plan to renew it?” That one bit of information will allow us to determine the correct answer 99% of the time. You can, of course, also ask your DB or call the Maine Real Estate Commission if you need some help determining the answer.

As a reminder, continuing education is only required to renew a license. Sales Agents, for example, are not required to have continuing education hours–a Sales Agent License is not renewable. A Sales Agent’s “continuing education” is the Associate Broker Course. Associate Brokers who plan to take the required course and apply for a Broker License would also not need “continuing education.” Personally, I still think continuing education is a great idea in both of those scenarios even though it’s not required. I remember one sales agent who came to the Associate Broker Course with a lot of “under contracts” during a very depressed market. His classmates were in awe and wonder. He explained, “I’ve taken over 40 hours of continuing education. There might be a correlation!”

I will be teaching both the Core Course for Brokers and Associate Brokers 2 and the Core Course for Designated Brokers 2 on Friday, October 7, 2016 at the Ramada Inn in Bangor. For more information and to register, you can call the Arthur Gary School of Real Estate at 856-1712 or visit the Arthur Gary School of Real Estate Website.

Posted in Industry News, Walter Boomsma. Tags: , , , , . Comments Off on “New” Core Courses — but let’s not call ’em that

When Should I Take the Associate Broker Course? –the answer might surprise you!

Written by Walter Boomsma, instructor. See his blog.

take_a_walk_150_clr_8169At first, this seems like an easy question. But there are a number of factors contributing to the answer. Let’s review some basic facts.

A sales agent license is non-renewable and is valid for two years. In other words, you must be prepared to apply for and receive your associate broker license upon expiration of your sales agent license. (There are some circumstances which allow for a one year exemption, but they are exceptions. You should plan on becoming licensed as as associate broker at the end of your two year license term.)

An associate broker license includes two important qualifications. First, you must have been licensed as a real estate sales agent for two of the past five years. Second, you must complete the Associate Broker Course. (MRS Title 32, Chapter 114, Section 13199) In other words, you must successfully complete the Associate Broker Course before your sales agent license expires. But you still can’t become an associate broker until you’ve completed two years as a sales agent.

So an “easy” answer is “You should take the Associate Broker Course while you are licensed as a sales agent.” It would also be an accurate answer, but it doesn’t tell the whole story. A good follow up question is “Should I take the Associate Broker Course soon after I get licensed as a sales agent, or wait a while?”

The answer to that question depends on several important factors:

  1. How much practical experience are you gaining as a sales agent? The Associate Broker Course is designed to be more about experience and application than the Sales Agent Course. In fact, the Associate Broker Course is based largely on case studies and scenarios. Until you’ve been involved in an actual transaction, the course simply won’t have full value. In addition, completion of the Associate Broker Course includes a requirement you submit a completed Documented Field Experience Form. This form is completed in partnership with your designated broker or mentor and is designed to insure you’ve had some “hands on” experience.
  2. How available is the Associate Broker Course in your area?  The course is 60 hours long and is not something you can complete at the last minute in a few days. In the Bangor area I tend to teach it twice a year–spring and fall for the Arthur Gary School of Real Estate. That means there are three opportunities to chose from during your two year term as a sales agent. Note, however, that we alternate between weekday and weekend courses. If your schedule limits when (day of the week) you can take the course, that limits your choices.
  3. How certain are you that you are going to remain licensed? There are many different reasons that someone might decide not to pursue a career in real estate. Since taking the Associate Broker Course is an investment, it might make sense to wait until your second year as a sales agent.

There simply is no one answer to the question–you have to consider the factors. I have had students get licensed as a sales agent and come back to take the Associate Broker Course within a few months. Their explanation is “I want as much education as I can get as quickly as I can get it.” How can you argue with that?! (Again, understanding you’ll gain the best education if you’ve had at least some hands on experience.) I’ve also had students procrastinate taking the course for various reasons. Unfortunately that sometimes means I get a frantic email or phone call when they realize they are facing expiration of their licenses next month. It really is easier to plan ahead.

Let’s take a hypothetical student named Suzie who gets licensed on March 15, 2015. Her license is set to expire on March 15, 2017.  Using the “Spring/Fall” schedule I teach, that means Suzie can plan to take the Associate Broker Course in in fall 2015 at the earliest. She’ll have a spring and fall opportunity in 2016. She might have an opportunity to take the course in spring 2017 but will need to have completed it by March 15th.

Remember that the Bangor course I teach with the Arthur Gary School of Real Estate alternates as a weekday or weekend course. The spring course is typically a weekday course and the fall course is a weekend course. If Suzie is working full time and can only take the course on the weekends, she’ll need to take it either in the fall of 2015 or the fall of 2016. There are, of course, other courses available from other providers and instructors. I just happen to like having students return! I wish I’d kept track, because I know there are a number of students who have completed all of their licensing courses with me from sales agent through broker.

If you find this confusing or are uncertain what will work best for you, don’t hesitate to give me a call or email. We can talk through your options and figure out what works best!

–Walter Boomsma

Posted in Instructor Topics, Walter Boomsma. Tags: , , , , , , . Comments Off on When Should I Take the Associate Broker Course? –the answer might surprise you!

Getting Ready To Get Ready…

Written by Walter Boomsma, instructor. See his blog.

“Necessity never makes a good bargain.” –attributed to Ben Franklin

Ben was a rather practical fellow and in this case I think he wanted to remind us that necessity can reduce our leverage and make us too impulsive. During the sales agent licensing course, I often describe “pop-tart” agents–usually newly licensed, they sit at the “up desk” waiting for the phone to ring or someone to walk in with at least a remote interest in real estate. They then “pop” out of the chair thrilled with the opportunity to demonstrate their new skills. “Let’s go look at some houses!”

But are they demonstrating their skills and value, really?

I recall some years ago watching this happen. In less time than it takes to tell, a newly licensed agent took a highly motivated buyer on a showing, wrote an offer and got it accepted. You can well imagine her excitement. But she only had twenty-four hours to celebrate her luck and skill before the designated broker found himself negotiating cancellation of the agreement after it turned out the buyer was afflicted with oniomania or CBD (Compulsive Buying Disorder). CBD is characterized by an obsession with shopping and buying and is believed to affect nearly 6% of the population. Fortunately, the seller was sympathetic and understanding.

We can certainly dissect Ms. Poptart’s performance and come up with a number of places where she probably went wrong. It would make for an interesting case study or group discussion and I suspect the answers would include comments about qualifying the buyer, asking for proof of funds, etc. All good points.

But note that those types of answers are actually defensive in nature–geared to avoiding something (such as a failed contract). While preventing problems can be an important part of the role of the agent in a transaction, it’s actually a very narrow focus. A comparison: do we use a GPS to keep from getting lost?

Many agents come to understand this difference after a few transactions. They learn to love calls from buyers or sellers that come way in advance. That’s when they can do their best work for their clients. That best work is to devise a pre-buying or pre-selling action plan. These agents start their client relationship with questions like

  • “Have you bought and sold real estate before?”
  • “What did you like best about the experience/transaction?”
  • “What did you find least enjoyable about the experience?”

These are data-gathering questions that allow the agent to work with the client in a relatively unhurried and relaxed environment and build an approach everyone can work with. One of my personal favorite questions is “Have you considered how you are going to go about this?” More often than not, the client doesn’t understand the question which suggests the answer is “no,” and this points to the need for a plan. You may be good at preventing and solving problems, but you should be even better at planning!

Everyone benefits from good planning. I recall an agent telling me she had shown a potential buyer sixty properties. I’m guessing the buyer had a plan that didn’t really include buying. Clearly the agent did not have a plan–other than to go with the buyer on showings.

There’s a difference between a motivated client and an impulsive client. Impulsive clients can sound very appealing, but they can also be a nightmare to work with… and are often prone to the dreaded “buyer’s (or seller’s) remorse.” Another observation you’ll hear in my classes is “You never want to get a call from a client that starts with ‘You never told me…‘”

Unhappy clients rarely blame themselves for what happened. Since you are the likely target of blame, why not accept the responsibility for what happens by creating a plan? Just remember, it’s not your plan. It’s a shared plan, developed with your client. You may slow down those impulsive clients. You may speed up those unmotivated or fearful clients, but it’s all part of the plan. Necessity never makes a good bargain, but intelligent planning often does.

Posted in Walter Boomsma. Tags: , , . Comments Off on Getting Ready To Get Ready…

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.”

Posted in Industry News, Instructor Topics, Walter Boomsma. Tags: , , , , , . Comments Off on Confused About the Core Course?

Mr. Boomsma, Walter, or Professor Boomsma?

Written by Walter Boomsma, instructor. See his blog.

Husson UniversityWhen I sub at school, the kids are required to call me Mr. Boomsma. Most comply, although it’s not at all unusual for the kindergarteners to call me “Mrs. Boomsma.” The idea of a man teaching kindergarten is still a bit alien to most five-year olds.

You won’t have to call me “Professor Boomsma” but thanks to a collaboration between the Arthur Gary School of Real Estate and Husson University’s Center for Family Business, I’ll soon be teaching a Sales Agent Course at Husson that makes it possible for students to receive 3 hours of credit for a Business elective, PL 201 Real Estate Law, Paralegal elective or Open elective through Portfolio Assessment.

The course begins on May 27th, so you’ll need to act fast! You’ll find more information available on the Arthur Gary School of Real Estate website or by calling the school at 856-1712. To inquire about Portfolio Assessment to obtain credit for the course, please contact Marie Hansen, Dean of the College of Business, hansenm@husson.edu.

The course begins on Tuesday evening, May 27th from 6 PM until 9:30 PM, then meets for three weekends–Saturday and Sunday from 8 AM until 5 PM. The final exam takes place on Tuesday, June 17 from 6 PM until 9:30 PM. Students are required to attend at least 90% of the scheduled class hours and achieve a passing course grade of at least 75%  in order to qualify to take the required state exam prior to licensing.

The Sales Agent Course starting on May 27th is the regular/normal/usual course and should be taken by anyone interested in becoming licensed. It is not just for those seeking college credit. This is the usual course with an added option for college credit from Husson.

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.