Covering real estate issues for REALTOR® Magazine is fun, rewarding, and challenging. I love talking to members and capturing their story. So when I was offered the opportunity to shadow the Reuter Team real estate office in Geneva, Ill., I jumped at the chance. Coming from a journalism background, I thought it would be a great educational benefit for me to experience the day-to-day business of a REALTOR®. It’s one thing to hear someone talk about their job, it’s another to actually watch them do it.

In full disclosure, the Reuter Team consists of my co-worker YPN manager Rob Reuter’s family members, including his dad Wayne, mom Teresa, and sister Mary. Rob asked his family to host me last Wednesday and they graciously accepted me as their tag-along.

If I had to sum up my take-aways from the day in five keywords, it would be…

1. Pricing
2. Honesty
3. Communication
4. Organization
5. Transparency

After I arrived at their RE/MAX Professionals office, Wayne Reuter walked me through his daily tasks, checklists, and appointments planned for the day. I quickly learned that one of the keys to success in real estate is organization. Track everything. What do you need to get done today? Who are you going to call? What research do you need to accomplish for your clients? Pricing presentation? Walk through? Marketing a new listing? Get it organized. Everything is written down, everything is recorded. When you have 50-some listings, it can get a little overwhelming.

Once I met the entire team, we headed out on REALTOR® caravan to preview other listings in their market. It’s a great way to check out the competition, to verify that your listings are priced well, and to network with other practitioners. In your market, you want to be all-seeing and all-knowing. You want to be the go-to expert who knows first-hand what the competition is selling. To do that, you have to do the leg-work.

In the afternoon, I shadowed Wayne on an initial walkthrough of a potential client’s home. Selling a home, especially one that’s been lived in for several years, is a very personal (even sensitive) matter. Watching the dynamic between REALTOR® and client, it’s apparent how important honest and sensitive communication really is. There’s no room for disingenuity in this business – especially if you’re looking to set a realistic price and complete necessary home improvements. As Theresa Reuter says, she sees her job as a service provider rather than a sales person. It’s evident in how their whole team does business and how they’ve garnered success. It’s how clients are kept in the long-term.

I appreciate the opportunity the Reuter Team gave me to check out the daily grind of our members. Visits like this allow us to create a magazine and Web site that reflects who our members are, and provide resources to meet their business needs.

Karl Case of Wellesley hit the nail on the head yesterday in his balanced look at today’s housing market when he says the American Dream is alive and well because homewnership is first and foremost about the place we call home. As he puts it in A Dream House After All, “For some people, [the American Dream] means having a solid and fairly safe long-term investment that is coupled with the satisfaction of owning the house they live in. That dream is still alive.”

Case characterizes today’s housing market as taking a well-deserved rest. Consumers’ expectations had gotten out of hand during the boom and now the market needs time to get realigned. And, as he says, it seemed to be doing that nicely, with steady gains, until recently, when the turnaround seemed to start fizzling.

But Case says a good part of the recent fizzle has a lot to do with the negative coverage in the media. “The steady drip of bad news about the economy has sapped the confidence of buyers, sellers and lenders,” he says. “And there is no understating the importance of expectations and confidence in this industry.”

Although financial considerations of homeownership should always be considered a secondary matter, Case does build a strong argument that today is a good time to buy when today’s favorable financial climate is coupled with the intrinsic benefits of homeownership. He says the drop in housing prices, continuing low interest rates, and existing tax benefits are very much working in buyers’ favor today—if buyers can get past the negativity in the media.

What’s more, the desirability of homeownership isn’t going to expire like the shelf life of a trendy financial product. “Real estate sales are unlike other financial transactions. You can place a rough inherent value on a stock or bond by looking at fundamentals: a company’s profits, price-to-earnings ratios, quality of its products and management, and so forth. But a house is worth what someone is willing to pay for it. That’s a very personal, emotional decision.”

Case, who partnered with Robert Shiller to produce the widely reported Standard & Poor’s Case-Shiller housing index, has no trouble commanding the attention of the media. His insight into the long-term desirability of homeownership—and the public policies that recognize its importance—provides just the right counter-balance to the negativity we hear so much of today.

Is the traditional model of homeownership in need of an overhaul? Is it even worth defending? Five years ago, these questions might have seemed absurd, but today, several commentators are posing them — and often coming down in favor of extensive and expansive changes to the system.

For instance, the latest issue of Time magazine has a cover story controversially titled, “The Case Against Homeownership.” (An abbreviated version of the article is available online.) Author Barbara Kiviat begins the piece with the statement, “Homeownership has let us down,” and subsequently describes what she considers to be the “dark side” of this institution.

I’ve seen similar arguments come out in recent weeks, but I’ll pick on Kiviat’s because it’s timely, it’s high-profile, and it condenses most of the criticisms that opponents of the status quo of homeownership have made recently into a single body of work. Here are the broad strokes of her case:

1. Perhaps the government shouldn’t incentivize homeownership so much. Kiviat argues that incentives such as the mortgage interest deduction make owning a home seem more desirable than it really is.
2. Homeownership encourages sprawl. Because most home owners live in single-family detached dwellings, development tends to expand out to places far from city centers, which creates more of a strain on resources.
3. The social benefits of homeownership are negligible. Although some benefits — such as higher academic performance of children — appear to be related to homeownership, one can find a similar correlation with, say, car ownership. And neither of these matter that much.
4. A home isn’t necessarily a safe investment. Kiviat says a loose lending environment caused housing prices to shoot up, and many ordinary consumers were left holding the bag when credit tightened up and values plummeted.

One major issue with Kiviat’s overall argument is that she seems to be conflating a few other problems with homeownership. For instance, the institution of homeownership in and of itself did not cause the housing boom and bust. This was due more to special circumstances in the financial sector than it was to people wanting to own a home. The hazardous mortgage lending environment was largely a product of Wall Street’s efforts to bring in vast amounts of capital for investment without properly assessing risk. Without that, the housing bubble could never have been inflated to begin with.

Also, the rise of suburban and exurban sprawl cannot be explained solely by Americans’ penchant for single-family houses, which exist in major cities too. (Plus, there’s no shortage of apartment complexes and townhomes in many suburbs.) Infrastructure investments, inexpensive land, and lower cost of living also played a role in development of the outer rings of metropolitan areas.

Additionally, Kiviat’s claim that homeownership (and ownership in general) plays a nominal role in creating social benefits such as better education and greater civic engagement doesn’t hold up. She asks if we should “realize that both home and car ownership are probably markers of something else, like a stable family life or living in a nice neighborhood?” She means this question to be rhetorical, but it really isn’t. One could easily turn it around: Shouldn’t we realize that a stable family life or living in a nice neighborhood are probably markers of home and car ownership? Can Kiviat or any other person making a “case against homeownership” provide a common, clear-cut example of a stable family life and a nice neighborhood not being accompanied by large rates of homeownership?

Perhaps her most compelling argument is that the government distorts demand for homeownership through incentives. To be sure, there is room for honest disagreement about what and how much the government should do in the housing sector. But even here, Kiviat comes up short. First, she says “Washington lavishes homeowners with special treatment.” But compared to whom, exactly? Senior citizens? Manufacturers? The big investment banks that played a central role in the housing bubble? Why target home owners over any of these other groups? Near the end of the article, she vaguely advocates using “the levers of government to help create high-quality jobs.” Would that be “lavishing special treatment” on American workers, the majority of whom are presumably home owners?

Finally, Kiviat doesn’t really offer an alternative to Washington’s current role in housing. Instead, she points out — and complains about — the fact that the mortgage interest deduction exists and that home owners typically don’t pay taxes on profits from the sale of a house. Is she advocating getting rid of the MID and taxing home-sale earnings? It would seem that way, but she doesn’t provide much detail on what might be done differently.

The good news is that most Americans still see homeownership as a good thing, and even after the downturn, the reasons for opting to own a home over renting remain pretty much the same. But as these stories continue to come out, and they will, it will be critical for REALTORS® to continue to make the case for homeownership.

One of my favorite stories from last year was about Fran Hoover, ABR, GRI, with RE/MAX Masters in South Lake, Texas. For the past 15 years, Hoover has selected one client in dire financial need to work pro bono for every year.

When the market is as tough as it is now, it’s hard to imagine that anyone can afford to forgo a commission check and give up much of their valuable time. But since that article came out, I heard from many practitioners about how they also have done this or were hoping they could help in the future.

Last Friday, I received an e-mail from Debra Allen, e-PRO®, GRI, with Prudential Arizona Properties in Gilbert, Ariz., telling me that she had a client two weeks away from foreclosure. Allen got involved and was able to lower his payment from $1,500 to $576 a month, so that he could stay in the house instead of selling. “My client called me his guardian angel for saving his home and keeping a roof over his family. It made me smile and I’m thankful that I can help,” Allen wrote.

While Allen has no commission for the weeks she spent helping this family, she says it feels good knowing that she helped them out when they had nowhere else to turn.

The spirit of helping others achieve and maintain their dream of homeownership is alive and well in real estate. If you have any pro bono stories, I’d love to hear them.

If a customer is unhappy with your service, don’t be surprised if he takes to the Internet to voice his frustrations about you. If you venture to review sites — such as the popular rating site Yelp.com — you may find a venting client giving you low marks for customer service.

You can’t please everyone, and sometimes clients may consider your work not up to par, even if you did do everything you could.

So what do you do when you find yourself on the receiving end of negative online reviews?

Monitor your online presence so you can be aware of any negative comments posted about you online, and respond to them, Stacey Harmon, founder of AgentApplause.com, told a crowd of real estate professionals at the Inman News Agent Reboot in San Diego on Wednesday. Agent Reboot is a series of one-day conferences nationwide that highlight the latest marketing and technology trends.

Harmon recommended handling criticism in the following way:

1. Find the negative comment. First, you have to know what people are saying about you. One way to do this: Set an alert at Google.com/alerts (it’s free!). When the keywords you set — such as your name and company — surface on the Internet, you’ll be notified via e-mail with a link to where it appears.

2. Respond immediately. Acknowledge that you’ve seen it. But take your emotion out of it — even if that person’s gripes seem unfair, Harmon says. Don’t apologize. Instead, she recommends writing something along the lines: “I hear you are unhappy with the service I provided.” Then provide your e-mail and phone number to invite that person to talk with you more about it. You’re showing other people that you’re professional and welcome feedback.

3. Get other people to talk positively about you in the same place. Don’t let the negative comment override positives about you. You want positive comments to appear in the same place so that it will outweigh any negative comment posted on that site, Harmon says.

Get more tips: Managing Your Online Reputation

One of the remarkable things about home sales today is the strength we’re seeing in the national median price. For July it was $182,600, up almost a percentage point from a year ago. That’s about what inflation is right now, according to the Consumer Price Index. When you consider the slowdown in sales volume now that the home buyer tax credit is ended, the resiliency in pricing is a bright spot.

NAR Chief Economist Lawrence Yun at his monthly press conference in Washington yesterday attributed that resiliency to the equilibrium of prices to household income (including mortgage-payment to income) and the drop in new-home construction.

In his analysis, homes are priced at a level that matches closely with households’ ability to pay. Thats’ a reasonable place for prices to be right now, all things considered, and he thinks any big swings up or down are unlikely in the next few months, even if home sales continue to struggle and inventories stay high.

Of course, if inventories stay high well into the fourth quarter, then home prices could once again come under pressure.

So, prices are aligned with the economy and interest rates remain historically low (4.42 percent on average). What’s missing is consumer confidence, and that appears to be dependant in part on evidence that jobs are growing.

Watch Yun’s press conference in the player above.

Help home owners save money and protect their most important investment with tips on conducting an annual insurance checkup from the August “Audit Your Insurance” article package now at the REALTOR^® Content Resource. Start with these two:

1. Understand replacement cost coverage. The most effective type of coverage is known as “replacement cost,” which covers, up to your policy limits, what it would take today to rebuild your house and restore your belongings, says Jerry Oshinsky, a partner at Jenner & Block in Los Angeles who has represented home owners in litigation against insurers.

2. Decipher “extended” replacement cost coverage. This coverage provides protection to your policy limit, say $500,000, and then perhaps another 20 percent of the cost after that. Percentages vary, but in this example you could recoup up to $600,000 on a $500,000 policy, assuming your losses reach that high. Now harder to find due to the industry shift toward extended replacement coverage, “full” or “guaranteed” replacement coverage covers an entire claim regardless of policy limits.

Also covered in the August “Audit Your Insurance” article package now at the REALTOR^® Content Resource are tips on determining whether you’re over- or under-insured, why your CLUE insurance report matters, improving your insurance score, and how to correct your CLUE insurance report.

By Stacey Moncrieff, editor in chief, REALTOR® Magazine

It’s not too late to help Good Neighbor Award winner Greg Adamson and his Utah-based Heart 2 Home Foundation win $30,000 in the APX Gives Back Facebook contest. The contestants are charities from around the country; anyone can register with APX Gives Back and vote for their favorite contestant/cause once a day. The contest has been going on for weeks, but there’s still time to cast four votes between now and midnight Saturday. One grand prize winner will get $100,000, and five regional runners-up, those receiving the most votes from each region after the overall winner, will be awarded $30,000 each.

I spoke with Greg yesterday, and although Heart 2 Home is several thousand votes behind the first-place organization, it’s in contention for a runner-up prize with more than 17,000 votes. But the voting is close, and if Heart 2 Home loses that spot, it gets no money. Why not help Greg win the $30,000? Heart 2 Home was founded to remodel and rebuild houses for very needy households, but it’s currently trying to fund an even bigger project—rebuilding a community center in inner-city Salt Lake City. The center serves refugees from Sudan, Nepal, and many other troubled areas. Greg says there are 117 languages spoken there.

You can learn more about APX Gives Back by reading my last blog post on this topic. Or just visit the APX Gives Facebook page. The charities in contention are divided by region; you’ll find Heart 2 Home in the Mountain region. Voting is literally done with the click of a button. Consider making this quick Internet stop for the next four days on behalf of a great cause. Cast today’s vote. Thank you!

As I write this, U.S. Treasury Secretary Timothy Geithner is in Washington at the Treasury building discussing with a group of academics and business leaders what the home mortgage finance system should look like after the federal government decides what to do with Fannie Mae and Freddie Mac. The discussion is a first step in the federal government’s congressionally mandated release of a GSE overhaul plan by January 2011.

After about an hour’s discussion, the dominant thread is about retaining FHA to ensure finance availability for lower- and moderate-income households and re-shaping Fannie and Freddie into something that backstops losses after private insurers take their lumps.

At least for the near term, most of the participants seem to agree, some form of government backstopping of the mortgage market is necessary, but it won’t be under the terms that we’ve grown familiar with. Rather, the guarantee would be absolutely explicit, not implicit like we saw with Fannie and Freddie, and, in the view of some, would take the form of a limited, maybe even catastrophic-type, backstopping in which the private sector takes first-risk position.

The government-backed secondary market companies would adjust underwriting and terms to provide counter-cyclical restraints (tightening standards as appreciation rises too far from historical norms) and ensure without question that they would have the reserves to meet their commitments to investors should loans go bad. In a pure market, that would mean costs would rise far too high for most borrowers to afford financing, but with the government’s support, costs would be brought down to a level appropriate for the great middle of the market. FHA would be retained to play its role making safe, affordable financing available to lower- and moderate-income borrowers.

Would the secondary mortgage market companies be pure government entities like FHA or pure private companies? Not clear, except that Geithner said in his opening remarks that the days of private gains subsidized by public losses—the Fannie and Freddie models—are over. Perhaps, as Alex Pollack of the American Enterprise Institute said, the GSEs should be divided into three entities: purely private companies for packaging mortgage-backed securities for Wall Street investors, pure government agencies for meeting public policy goals of homeownership, and third entities for liquidating the existing GSEs’ bad debt.

All agree that lack of transparency was one of the great culprits of the mortgage crisis. Borrowers didn’t know what they were borrowing, investors didn’t know what they were investing in, and no one knew whether the federal government would actually step in should a crisis occur. To correct these shortcomings, transparency would have to be a hallmark of any reform. “We need transparency, standardization, and disclosure,” said Susan Wachter of the University of Pennsylvania’s Wharton School.

Ingrid Gould Ellen of New York University said the federal role in the new GSEs would be strictly limited to covering their mortgage securities, not their corporate bonds, and that the GSEs would guarantee only securities with well-defined loans, like plain-vanilla 30-year, fixed-rate loans, and would charge fees sufficient for them to build up adequate reserves to cover their liabilities.

National Urban League Chief Marc Morial pressed the need for financial institutions to weigh in on any draft plan to make clear how the plan would affect their decision making. His concern is that the new shape of the system not be made based purely on philosophical grounds but with the understanding of how changes would impact the business practices of lenders. He also said it’s crucial that the country’s overall goal of making homeownership achievable for as broad a representation of the population as possible be maintained, because it’s through homeownership that low- and moderate-income households build up the financial security to attend college, save for retirement, and improve their lives. “We don’t want to create a new class of renters,” he said.

Bill Gross of pension-fund investment giant PIMCO said people must adjust their thinking to accept that the private mortgage market we had for the last 20 years will not return any time soon. Given the drop in home prices, the market will not function without some kind of government guarantee (with that guarantee protecting taxpayers through adequate reserves, sufficient downpayments, and solid underwriting and terms).

It’s impossible to know what the administration will actually come out with in January, and it’s plan might not reflect anything said at this opening meeting. But today’s discussion, hosted jointly by Treasury and HUD, provides a guide to the kinds of input it’s getting from at least some of the organizations it’s reaching out to. The agencies have heard from NAR already, and will continue to hear from NAR, which is advocating the retention of some form of government guarantee to help ensure the continued availability of affordable mortgage loans in both good markets and bad. Read NAR’s position statement on GSE reform.

More about the conference.

At the end there’s a piece called “5 questions to ask your agent.” Although there’s nothing new there, it’s a great reminder to have your answers ready before you head off to a listing appointment.

Thanks for sharing, Diane!