Eric Blumberg

Mobile technology is the next new frontier for real estate, according to Eric Blumberg, president of Smarter Agent, a mobile applications design company.

Blumberg believes now is the time for REALTORS® to embrace mobile technology while it’s still evolving. “Just a little over 10 years ago, real estate agents were so into keeping their MLS book a secret and resisting the Internet that third party portals jumped in, aggregated listings and became the first stop for many consumers.

“Now NAR is reporting that six out of 10 buyers last year were GenX (ages 30-40) and their point of entry for looking at homes is through their phone,” Blumberg said. “You don’t have to understand how the mobile apps work but you do need to understand that probably 50 percent of your clients will start their home search on their phone within the next three years. It’s easier to be ahead of the curve.”

Reaching this mobile generation is only becoming more important, Blumberg said. And while many see the iPhone as the “Mercedes” of the smart phone industry, Blumberg notes that Blackberry still holds the greatest market share at 35 percent.  Apple follows with 28 percent of market share and the Android follows with 9 percent.                                             

“Mobile apps are just a piece to your marketing puzzle,” he added. “You need to understand all of the pieces, the web, texting, e-mail and they all need to be mobile friendly. By adopting mobile technology early, you can make sure consumers always have a REALTOR® in their pocket and you can win in this growing market.”

Blumberg is the guest speaker at the upcoming Certified Residential Specialist (CRS) luncheon on Tuesday, Sept. 28 at the Harrisburg Hilton. Reserve your seat for $17. Blumberg is also speaking at the Triple Play REALTORS® Convention in Atlantic City.

In a widely cited interview, Paul Dales of Capital Economics noted, “Home sales were eye-wateringly weak in July.” (CNNMoney.com, August 24, 2010).  The fear that housing is hampering the general economic recovery is now widespread.  More observers worry not only about a double-dip recession but increasingly, a move toward the “D” word … (Depression).

What’s been going on in Pennsylvania? 

While we don’t have July sales data yet, we can show results for the previous several months.  At the beginning of 2010, for a majority of the reporting regions, sales activities were down, however, sales uniformly picked up in the second, third and fourth months.

For all Pennsylvania regions, there were almost 65 percent more transactions in February than during the previous month and activity continued throughout the quarter and beyond.  The monthly results in the second quarter were very strong statewide. By June, all regions had significantly higher sales (except Adams, where sales had increased earlier). 

While there is seasonality in the data coming out of winter, it is clear that Pennsylvania buyers were responding to the home-buyer tax credit during the first and second quarters of 2010. Table 2 shows the same phenomena.

What can we conclude?

Both the monthly and quarterly transaction data showed robust responses to the tax credits.  In the monthly series, all regions had very large percentage increases in February and these continued (although at a declining rate) into May. Data for June picked up in many regions, most likely stemming from seasonality and the expiring credits. The tax credit impact significantly elevated the 2009 annual results.

Most commentators predict slower third and fourth quarters in 2010 without the tax credits in place. In fact, the very recent evidence surprised most analysts by its magnitude (i.e., the sales declines were about twice what was expected).  Buyers were motivated to accelerate their purchases to qualify for the federal money and the fear was that there would be a significant decline when the tax credit sales expired. These fears have now been realized.

The next few months are being watched closely. Markets are expected to be weak (i.e., sales and prices may decline further).  Housing demand is largely absent — or at best, dormant — and inventories are large (12 months or more) and likely to grow in the months ahead.

We are in for a rough several months nationally as well as in Pennsylvania.

David Phillips

PAR’s new Executive Vice President, David Phillips, CAE, RCE, begins today.

Prior to joining PAR Phillips was chief executive officer of the Charlottesville Area Association of REALTORS® in Virginia. He has been actively involved in REALTOR® organizations at the local, state and national levels for more than 19 years. Phillips is active at NAR and is the chair of the Association Executives Committee.

A PAR Task Force chaired by past PAR president Bob Hay and facilitated by Donna Garcia of NAR selected Phillips from a pool of more than 120 candidates.

Phillips replaces Patrice Merzanis, CAE, RCE who is stepping down after seven years as EVP.

Cafe office in Bucks County

Changing to a “virtual office” seems like a dramatic change but it basically takes advantage of new technology.

Coldwell Banker Hearthside, REALTORS® started a “virtual office” for agents in its Malvern location several weeks ago. The goal of this pilot project is to reduce the office’s overhead costs and eliminate the need for agents to be in the office.

Agents are no longer married to an office. Nearly everything they need to do business is available to them online and the phone system routes calls directly to them. If an agent needs to go to a physical office, they can use any of Hearthside’s 19 locations.

REALTOR® Lori Vanderbilt had her first settlement since the office changed. She finds people are actually more accessible.  “It feels like we’re ‘virtually’ surrounded by people because we’re able to get a hold of someone 24/7,” she added.

Communications between agents has increased despite the reduced hours in the office, according to Chris Beadling, Coldwell Banker Hearthside vice president. “Our agents used to talk when they were in the office for a meeting but now that they have Skype available to them and they’re talking to each other more.”

Floor or opportunity time where agents need to be in the office has gone down nearly 100 percent because calls are forwarded to them, Beadling said. “We followed NAR’s research about what buyers are doing and where they’re coming from. They’re using the Internet more and they don’t know whether an agent is in an office or at Starbucks when they answer a call.”

Chuck Barbera, a REALTOR® for about a year, sees the virtual office as a win-win solution for everyone involved. He said, “For agents, things are faster with the new technology. The broker/owner is reducing his overhead costs and our buyers and sellers are gaining more attention, efficient results and hopefully they having a better experience with us.”

Beadling said the transition to the virtual office has been smooth because as a company, the office decided two years ago that it would train its agents to work with emerging technology. “We have someone within the company who provides in-house training for our agents and has brought them to a different level,” Beadling said. “Our agents have embraced the change our technology expert Stefanie Hahn has brought and they’re excited to leverage the technology to improve their business.”

Pam Sheehan, associate broker/manager, said the agents like the change. “We’re thrilled with how well everyone has adapted to the change. In a recent meeting everyone agreed that the change was seamless, especially to our clients.”

The company also launched a café office in Bucks County three months ago. The office offers free wireless Internet service and coffee to anyone who stops by and the office is gaining popularity within the community. Coldwell Banker downsized the office from 4,500 square feet at its previous location to open a new location with 1,400 square feet.

“The agents feel the office is more inviting to clients,” Beadling said. “It does have its challenges since the audience is always mixed and you have to be very aware of privacy issues. We’ve worked to develop open and closed wireless connections so we don’t have security issues.”

Within the Coldwell Banker brand, West Coast offices have transitioned to similar virtual offices and café locations.

Andrew Wooten

Click to listen to the podcast

REALTOR® safety week is September 12-18 but according to Andrew Wooten, the National Association of REALTORS® (NAR) safety instructor, REALTORS® should discipline themselves to incorporate a safety routine into their daily lives.

“A REALTOR’s® comfort level is very important when meeting a client and showing a property,” Wooten said.

He added if a REALTOR® feels uncomfortable with a client he should make an excuse and leave.

“Unfortunately, as we work with folks who have been victimized in our industry they’ve all said that right before the attack happened  they felt uncomfortable and something didn’t feel right,” Wooten said.

“Listen to yourself, trust yourself. You are your best weapon,” added Wooten.

Local and national news organizations including National Public Radio’s (NPR) All Things Considered, CBS’s Moneywatch, Associated Press (AP) and Bloomberg Business Week ran stories on the study results.  The story ran in more than 60 local newspapers, radio and television stations, industry blogs and online news sites.

The study was picked up by so many news organizations because the topic is so timely and important, said Thea Hocker, PAR director of marketing and communications. “It’s a testament to PAR that our research is being covered by national media,” she said, adding, “The findings were important enough to warrant telling the story across the country.”

The research showed that job loss and unexpected medical bills topped the reasons contributing to home foreclosures in Pennsylvania. In the past, many blamed subprime lending as the primary culprit in foreclosures.

“This study is significant because it gives voice to those most affected by the foreclosure crisis. It represents a significant number of Pennsylvanians who have personally experienced foreclosure in some way,” said Joel Searby, SGS pollster.  SGS interviewed 500 people across the state who encountered home foreclosure in the past 12 months and another 500 people who live in neighborhoods where home losses were steep.

Jim Goldsmith, Esq.

Do you need to report a request for mediation to your errors and omissions (E&O) insurer? 

Consider the case of the Pennsylvania broker who received a request for mediation which claimed that the seller and listing broker had misrepresented the condition of an on-site sewage disposal system. The broker was little concerned because he had no knowledge of any defects of the system. He didn’t understand that he was being named as a respondent and not merely a witness to the mediation process. He didn’t notify his E&O insurer of the request for mediation.

The buyer submitted convincing evidence that the septic system could not be replaced with anything but a holding tank that would require monthly pumping and that, according to the buyers, diminished the market value of the property. Further, they introduced evidence in the form of written materials provided by the listing broker that tended to suggest his prior knowledge of system defects.

While mediation resolves about 85 percent of all claims, this mediation conference was a disaster!  Within days suit was filed.  The broker immediately notified his E&O insurer. The insurer took note of an allegation in the complaint that the buyers exhausted their obligation to mediate. It was because of this allegation that the insurer learned that a request for mediation had been filed months earlier. The insurer claimed lack of timely notice and has refused to defend and indemnify the broker. The broker has now spent well over $10,000 in his defense and remains potentially liable for damages. The broker has sued his E&O insurer, claiming that the lack of notice did not prejudice the insurer. This essentially means that despite the lack of notice, no defense was lost and no harm was committed. 

The outcome of this suit is months away.  If the broker wins this, he will have insurance coverage and will recover fees expended in his claim against the insurer. If the broker loses, he is out in both suits and still faces a potential jury award.

The message is obvious. All E&O policies have a notice of claims provision. Brokers know that when served with a court-filed complaint, notice to the insurer must quickly follow, however, all claims received in writing or threatened should be reported to the E&O insurer if one wishes to preserve coverage. “Claims” should be construed broadly to include requests for mediation and, in my opinion, claims of ethics violations which not infrequently turn into lawsuits on the related facts.

I represent both insured and uninsured brokers and make these very simple observations: Brokers who are insured for the claims they are defending sleep at night.  Those who do not lose sleep, suffer great anxiety and spend many times the amount of their deductible.  The increase in an insurance premium caused by reporting a small, frivolous suit that is quickly disposed of pales in comparison to the great sums that you may face by not reporting a claim.  Further, what seems to be a small claim at first blush will frequently turn into complex litigation.

If you are a salesperson who is threatened with a claim, by all means implore your broker to notify the E&O insurer. If the broker refuses, seek counsel who can advise you of the manner by which you may preserve the insurance coverage you have paid for.  You and your broker will be grateful in the long run.

National Association of REALTORS® (NAR) Associate Counsel Katie Raynolds said a social media policy provides a guideline for employees and agents so they know how the company expects them to represent themselves and the firm online. “A social media policy should remind everyone that state license laws should be followed — even online — and NAR’s Code of Ethics applied as well,” she added.

The policy can be as simple or as detailed as the broker wants. NAR’s Risk Management Committee recently drafted a model policy for brokers to use as an example in their own offices.

“It’s totally up to the brokerage what guidelines they want and how they decide to manage their image and reputation online,” Raynolds said. “Most social media policies are general, reminding agents not to discriminate, not to make disparaging remarks, not to reveal clients’ personal information and what the consequences are in the event you don’t abide by the policy,” she said.

As the popularity of social media continues to grow among consumers, real estate agents increasingly use various social media venues. Todd Carpenter, NAR manager of Social Media, said, “REALTORS® recognize the potential to increase their sphere of influence through social media and are adapting to these networks unlike any other profession. Social media is popular because it’s affordable marketing.”

Carpenter agrees that a social media policy helps alleviate potential mistakes. “Social media policies are good to have in place so people don’t make mistakes. They know what they’re doing ahead of time,” he added.

Jim Crawford, a REALTOR® and an online real estate tech/web coach in Georgia, thinks many brokers are ignoring potential problems by not creating a social media policy.

“Many agents don’t understand that if their online presence mentions real estate, they should watch what they’re saying and they must follow their state real estate commission’s advertising guidelines,” Crawford said.

Crawford believes many brokers are unaware of what agents may be posting online. “Brokers are supposed to review their agents’ advertising but many don’t know what their agents are saying online. If an agent is bad-mouthing a client or asking what he should do because he’s in trouble, there’s a permanent record online. The agent is liable for what he wrote and the broker may be liable as well,” he added.

 “The connection between the broker, what his agents do online and his liability will eventually be determined by the court,” Raynolds said. “But having a clear policy, informing everyone in the office you have a policy and educating them about the policy will go a long way in risk management for the broker.”

Joeann Fossland

Testimonials build credibility in the real estate market; the difference is how to use them in today’s market.

“It’s a well-known fact that third-party endorsements raise your credibility,” said Joeann Fossland, a national speaker and coach based in Arizona.

“Stop thinking of testimonials as pull-out quotes. Consumers are shopping for homes online, so you need to think of new ways to make those testimonials work on websites and in social media,” Fossland said. “People using social media are asking their friends to recommend everything from restaurants, recipes and other information.”

Take a Flip video camera to closings is one way to record recommendations. “Clients are never happier than they are at closing,” she said. “Record your clients’ answers to: ‘How did the closing go?’ ‘How did I make the process easier?’ ‘Would you recommend me in the future?’ Then post different clips on LinkedIn, Facebook and your website.”

Only 14 percent of consumers trust advertising, while 86 percent trust recommendations from friends, Fossland noted from a recent survey.

To improve business, Fossland suggested six tips:

• Listen for the testimonial. When a client says something great about you, don’t hesitate to ask if you can use it in your marketing.

• Post video testimonials on YouTube.

• Create a page on your website with the videos or comments from clients. Include a photo of the client with a quote.

• Post testimonials throughout your website. Use a testimonial at the top of each page.

• Provide a recommendation for someone on LinkedIn. Then ask them to do the same for you. Eighty-five percent of Fortune 500 companies research other companies on LinkedIn.

• Touch base with past clients. Contact your past clients and ask them for a testimonial. Make it a goal to collect five testimonials a week from previous clients.

Relationships account for 54 percent of a seller’s choice of an agent and 64 percent of a buyer’s choice, according to 2009 NAR Profile of Home Buyers and Sellers.

“It’s tough out there today,” Fossland added. “You have past clients who love and respect you. Their testimonials provide the personal recommendation new clients are looking for.”

Editor’s note: The Federal Trade Commission (FTC) issued new regulations regarding testimonials last year. It’s a good idea to review these regulations prior to publishing testimonials.