In the school’s two most recent testimonials, Mary Martinez-Garcia and Kate Stockert, both of whom are concentrating in real estate association management as NAR employees, share their thoughts on the program.

Mary Martinez-Garcia

Mary is halfway through the program and she says the program is rigorous and has taken her out of her comfort zone in many ways, but she’s gotten a much deeper and broader understanding of real estate than she had before, and has learned some skills that she’s already been able to put to use in her work.

Kate Stockert

Kate is in her eighth class and is finding that the courses, although grounded in theory, have practical applications that she uses in her work. She talks about the skills she’s learned that have helped her implement an association program of a type that she hadn’t implemented before, illustrating the practical applications of what she’s learning.

Previous REALTOR® University coverage.

Photo: James Thompson (Creative Commons)

Two weeks ago the Key West Association of REALTORS® scored a major victory when a U.S. district court judge in Florida levied a $2.7 million fine against a businessman named Robert Allen, whose KeyWestMLS.com and other websites were found to be using the association’s listing data in violation of copyright laws. The large fine is attention-getting, and that was the point, according to the judge, Justice Lawrence King, in his May 22 decision.

“Awarding a lesser amount of damages would not serve the purpose of the Copyright Act in deterrence of further wrongful conduct by Defendant,” the judge wrote. “Absent the maximum statutory award of damages, future potential infringers of Plaintiff’s MLS copyrights will only see the potential benefit of high commissions from ill-gotten leads. As such, the maximum statutory damage amount is necessitated to deter the future conduct of Defendant Allen and others.”

Similar cases are pending in U.S. District Court for the District of Maryland and in U.S. District Court for the District of Minnesota. It’s not clear when the judges will issue rulings on them but in a positive development last week, a judge has dealt a setback to the defendant that’s the subject of both cases.

The company is American Home Realty Network (AHRN) and it was sued last year by Metropolitan Regional Information Systems Inc. (MRIS) for using its MLS listing data without authorization on its website, NeighborCity.com, and then by the St. Paul, Minnesota-based Regional Multiple Listing Service of Minnesota Inc. (NorthstarMLS) on similar grounds.

After the cases were filed, AHRN tried to turn the tables on the two MLSs by filing a counterclaim in each case alleging that the MLSs violated antitrust and other laws in an effort to drive the company out of business. In the Maryland case AHRN also named NAR as a defendant in its counterclaim, asserting that NAR participated in the alleged conspiracy to discourage participation with AHRN.

There were seven counts in AHRN’s counterclaim, and last week in the Maryland case the Court dismissed all of them, although it left the door open for the company to amend three of its those counts and resubmit them for further consideration. The company has until the end of next week to do so, but even if it does it faces a steep hurdle based on some of the language the judge used in his June 10 order. “In light of the deficiencies identified herein,” Justice Alexander Williams, Jr., said, “ the Court has serious reservations about AHRN’s ability to set forth a cognizable [unfair competition] claim against” the MLSs.

It remains to be seen what will ultimately happen with the MLSs’ cases against the company for copyright infringement, but the positive outcomes of this ruling is an encouraging development for MLSs as they try to maintain control of where their listing data is displayed on the Internet.

The Michigan Association of REALTORS® has an extremely innovative program that has to do with “placemaking,” a term that refers to ways to make communities more fun to be out and about in. At the moment, the Michigan program is limited to a pilot effort in Lansing, but it’s bursting with ideas that can be applied anywhere. Among other things, the program uses $20,000 in NAR funds to help pay for a farmer’s market, live music performances in an underused urban park, and the refurbishing of a once-downtrodden neighborhood to attract private investment as part of an effort to turn the area into a mixed-use destination.

The Greater Nashville Association of REALTORS® is using $10,000 to help fund a citizens’ transit council, which is intended to make residents more knowledgeable about land-use issues and get them to think more broadly about how land use relates to quality of life.

And in Memphis, the association is using an NAR grant on a “Complete Streets” initiative, which is a strategy for retrofitting streets so they’re safe and attractive to all users, not just drivers.

All of these projects in some way relate to smart growth, a term that means different things to different people. What smart growth really boils down to is simply making communities nice places to live even as population densities increase. These and other grant projects are as varied as can be, and yet they’re aiming for the same thing: creating a pleasant place for people as they’re out and about in their community.

As we know, community quality of life is one of the underwriters of property markets and home values, so there’s a concrete return on investment as commercial and residential real estate markets respond to improved conditions. Of course, it’s hardly the only answer to improved markets. Nothing is that simple. But it’s one of the pieces to the economic puzzle, and it could be a starting point for maintaining the livability of your community as population densities increase.

To help you become more familiar with the smart growth grants, we produced a 4-minute video, which is posted above . It looks at some success stories and then invites you to learn more on the smart growth section of REALTOR.org.

“The younger you are, the more freaked out you are likely to be by the housing market crash,” says Micael Derby in an October 2011 Wall Street Journal blog post called “Next Generation Less Confident About Home Ownership.”

“You can . . . conclude that young peoples’ aversion to home owning is an overreaction to a unique recession,” says Derek Thompson in “The End of Ownership: Why Aren’t More Young People Buying More Houses?” in the February 2012 issue of The Atlantic.

This line of thinking has a compelling logic to it but a researcher at Washington State University says it doesn’t hold up to scrutiny. He conducted an analysis of U.S. Census population figures and also of data from the America Community Survey, which is an affiliated Census research project, and found young households actually have higher homeownership rates than baby boomers and Gen Xers when they were at a comparable stage in their lives.

He also conducted a survey of young people in real estate classes at his university, a group that’s predisposed to be interested in real estate, and says this group’s intention to buy property grew over the course of a semester even though the downturn was examined during the period.

Glenn Crellin is the author of the study and he’s no newcomer to real estate. He’s the associate director of the Runstad Center for Real Estate Studies at Washington State University and a former economist at NAR. He published his paper in the inaugural issue of the Journal of the Center for Real Estate Studies, published by REALTOR® University’s Center for Real Estate Studies.

In the 3-minute video above, Crellin talks about his findings to REALTOR Magazine.

Under these changes, Fannie is asking you to submit your short sale offer to it at the same time that you submit it to the company that’s servicing the mortgage. By submitting your offer to the two companies simultaneously, you enable Fannie, if it’s the investor on the mortgage, to start taking some of the steps needed to get the application processed. These steps include ordering an appraisal and broker price opinion and reaching out to the servicer to help keep the processing on track. Also, if the servicer needs Fannie to review the application as the investor, Fannie can start doing that without delay.

Beyond these process changes, the company has added pages of information on its website for the listing agent to help remove much of the guesswork from the process. What are acceptable closing costs? What sellers are eligible for a short sale? What steps are needed to get a recommended list price? And so on.

These steps come on top of changes the company rolled out a few months ago that were centered on the company’s online submission and escalation processes. That escalation process was intended to give you a direct line to the company if you weren’t getting answers from the mortgage servicer.

The changes apply to Fannie Mae loans, and that’s a pretty big part of the market, so if they result in quicker processing, they could have a material impact on the short sale market as whole.

To help you learn more about these and Fannie’s previous short-sale changes, Heather Elias, NAR’s director of social business practice, sat down with Jane Severn of Fannie Mae for a 4-minute video interview. You can access that above. Severn is with Fannie Mae’s credit loss management division.

You’ve got options if a licensing agent demands a fee for scanning and e-mailing documents.

If your brokerage has been contacted by a company to pay a license for the right to scan a document to e-mail, you’re not alone. Real estate offices around the country have received letters from companies called AllLed, AdzPro, GanPan, and HeaPle, among others, claiming to have the exclusive right to send documents via e-mail from a multifunction copier machine, and demanding that you pay a licensing fee of $900 to $1,200 per employee before you can send a document.

Katie Johnson

Behind these demands is a company called MPHJ Technology Investments Inc., which owns several patents on the process of scanning or copying a document and sending it via e-mail from the same machine.

MPHJ is known as a nonpracticing entity, or patent troll, because it doesn’t produce anything; it merely asserts its rights to exclude others from using its patents. MPHJ has created about forty shell companies, usually with six-letter LLC names, to assert its patent rights.

Escalating Threats

It’s been widely reported that this patent troll has been targeting small and mid-sized businesses in a variety of industries in its effort to generate license fees by sending three standard demand letters through its shell companies. The initial letter is on company letterhead and requests a license fee. If that goes unanswered, a second letter is sent from a Texas law firm called Farney Daniels P.C. seeking a response and threatening legal action. If the second letter is ignored, a third letter is sent from the same firm and it contains a draft complaint that the firm threatens to file if a license agreement is not reached.

There is no evidence that MPHJ knows of any infringement before sending these letters. If you receive a letter, you should discuss your options with your legal counsel. Among the options to consider is:

• Ignore the letter. We’re not aware of any case that has actually been filed against an alleged infringer.
• Respond with a request for specifics. Ask why your equipment or software infringes the patents.
• Deny in writing that there is any infringement.
• Pay the license fee.
• Challenge the patent’s validity. After all, the patented process of scanning a document and sending it via e-mail from the same machine is a common, widely accepted practice. To submit a challenge, you can file a declaratory judgment action against the patent troll in which you seek a ruling by a judge on the patents’ validity. One company in Louisiana is trying to do this right now with a lawsuit it filed in federal court in April.

However, a more effective approach might be to file what’s known as an inter partes review with the U.S. Patent and Trademark Office, asking it to invalidate the patents. The manufacturers of the machines that make this patented process possible have taken a great interest in MPHJ’s efforts because it is their customers who are being asked to pay the fee. So, Xerox, Ricoh, and Hewlett Packard have recently filed inter partes reviews.

In addition to these attempts to invalidate the patents, Vermont’s attorney general has recently filed a consumer fraud lawsuit against MPHJ, alleging the patent owner’s aggressive licensing campaign amounts to unfair and deceptive acts. Unfortunately, it could be a long time before there is an outcome to any of these legal proceedings. In the meantime, you’re encouraged to consult with your legal counsel and consider your options if this patent troll finds you.

Learn more in a 6-minute audio podcast presented by NAR Legal Affairs.

Katie Johnson is NAR associate counsel. She can be reached at kjohnson@realtors.org.

Congress finally enacted long-term reauthorization last year and as part of that included long-sought reforms to help improve the actuarial soundness of the program.

What these long-sought changes mean, though, is a gradual phase-out of insurance subsidies that go to a small percentage of property owners.

The phase-out of subsidies is part of the package of reforms that are intended to make the flood insurance program more financially sound. For years, a small portion of property owners have been paying far below the actuarial cost of their policies because of previous legislation. In some cases, the premium subsidies were for properties that were in areas in which outdated flood maps had been grandfathered in. In other cases, the subsidies were for properties that pre-date the drawing of their area flood maps. These are referred to as pre-FIRM properties ( with “FIRM” standing for “flood insurance rate map”).

In all, there are several classes of property that have had their flood insurance premiums subsidized over the years, and now, starting this year, their subsidies will start to phase out gradually. That means that some owners will face rising insurance premiums over the next few years.

No one can be expected to like seeing their subsidies phased out, but for supporters of reform, it was either that or not having any flood insurance available at all.

You can learn more about the phase-out in the 4-miniute video above.

Get more information about flood insurance at REALTOR.org. The site aslo includes a page on last year’s long-term reauthorization law that includes the program reforms.

The analyst, who signs his e-mails “Jem,” is offering an incentive for information and is seeking to learn the likelihood of changes that would restrict the ability of third parties to aggregate MLS data. NAR General Counsel Laurie Janik says directors should avoid speculating on any future actions of the board. “We don’t know what the board will decide,” Janik says, “so I would strongly caution against speculation.”

Credit: Daniel Moyle

“Clearly they’re not ‘off the market,’ nor are they in your pocket. They’re not on the MLS,” clarified Robert Bailey, 2013 chair of MLSlistings Inc. in California. Bailey presented attendees with research on the growing number of homes for sale in his local area that never make it to the MLS at the REALTORS® Midyear Legislative Meetings & Trade Expo.

In a study comparing public records with MLS listings in the California communities of Monterey, San Benito, San Mateo, Santa Clara, and Santa Cruz, Bailey found that off-MLS listings increased from 12 percent in 2011 to 15 percent in 2012 to 26 percent of the market in the first quarter of 2013.

Supporters of pocket listing practices often cite situations where sellers are seeking privacy or are concerned about having strangers view their homes. Bailey said such desires are valid, but the numbers indicate a growing trend.

“Clearly they’re more concerned about privacy and security now that the market has gotten better,” Bailey said, drawing a collective chuckle from the crowd.

When asked what is driving agents to consent to the increase of this practice by sellers, Bailey said it’s largely comes down to market changes.

“I have agents who have had a very long, very hard six years,” Bailey said. He posited that some agents are using pocket listings to increase “the ability to capture leads” in a competitive, low-inventory market.

But Bailey cautioned that sellers and agents who resort to this tactic in order to avoid “doing business with the unwashed masses” could run into fair housing issues.

Because of local rules, Bailey noted that disagreement over pocket listings will vary from state to state. But he expressed concern that they could have catastrophic effects on the industry nationwide.

“Could it lead to the collapse of our MLS model as we know it today? Could it lead to the erosion of an agent’s value?” Bailey asked. “There’s not a market that’s exempt from this issue.”

NAR has not defined pocket listings, nor do they have an official policy on the practice. But Bailey urged those present at the joint meeting to avoid them.

“We’ve built our businesses on the basis of if we collaborate together… then we can operate in the best interests of the consumer,” Bailey said. “[We must] maintain our position at the center of the transaction.”

Read more

What is a Pocket Listing?

HUD Secretary Donovan

HUD Secretary Shaun Donovan made an appearance at the National Association of REALTORS® Midyear Legislative Meetings on Wednesday to laud the work of his agency in promoting housing policies and programs that acknowledge the equal rights of gay and lesbian Americans. The agency makes clear that sexual orientation is no barrier to accessing any HUD programs, he said.

“We have a broad requirement that housing opportunities should be available to all persons regardless of sexual orientation,” said Donovan, who spoke to members gathered for a reception of the National Association of Gay & Lesbian Real Estate Professionals (NAGLREP).

But Donovan noted that there is still a long way to go on the civil rights issue that has rapidly been gaining ground in recent months and years. Noting President Obama’s strong support of marriage equality and recent same-sex marriage cases brought to the U.S. Supreme Court, Donovan added, “There is still an urgent need for legal protections based on sexual orientation.” The 45-year Fair Housing Act does not include sexual orientation as a protected class.

NAGLREP Founder and CEO Jeff Berger said he was delighted by Donovan’s appearance at the meeting and his commitment to ending discrimination in housing faced by the LGBT community. The movement clearly has momentum, he said.

Berger cited the group’s drive, working with Wisconsin REALTORS®, to get sexual orientation included as protected classes in the NAR Code of Ethics. That change was approved by NAR’s board of directors at the Midyear Meetings in 2010. Now, an effort is underway to add Code of Ethics protection based on gender orientation. The proposal will be voted on by the NAR Delegate Body at its meeting in November. Berger also hopes to get NAR to include LGBT data in future versions of its Profile of Home Buyers and Sellers and Member Profile. “It will give REALTORS® a truer picture of who is in their markets if lesbians and gays and same-sex couples were acknowledged,” Berger said.