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January, 2016 Volume 16, Number 3

White-Breasted Nuthatch ©2016

Supporting YOUR success.

January, 2016 MINNESOTA’S ECONOMY AT-A-GLANCE .....................................................3

by Christine Berger

“THE FED RAISED SHORT TERM INTERESTS” & OTHER TALKING POINTS FOR YOUR CLIENTS ...................................... 32

PROFESSIONAL STANDARDS & ETHICS Q & A ......................................................4

by Jonathan Kopecky

TEAM DYNAMICS© ..........................................6

by Pam Ermen

UPCOMING EDUCATION ............................ 10

by Mary Gleason Best

CONGRATULATIONS, NEW GRI DESIGNEES ...................................................... 16 LEGAL HOTLINE Q & A................................. 18

by Anne Kealing

by Christine Berger

MODERATE EXPANSION, EASING PRICES EXPECTED FOR COMMERCIAL REAL ESTATE MARKETS ......................................... 34 by National Association of REALTORS®

SOPHISTICATED EMAIL SCAMS TARGETING THE REAL ESTATE INDUSTRY ......................................................... 36 by National Association of REALTORS®

MEMBER PROFILE: PAUL SIGURDSON ......................................... 40

A NOVEMBER TO REMEMBER FOR HOME SALES IN MINNESOTA ................... 20

REALTOR® RING DAY RECAP! .................... 44



CAN I TRUST YOU? ........................................ 46

by Carrie Andersen



NEW MN REALTORS® HOME INSPECTIONS TASK FORCE ...................... 22

by Paul Eger & Ryan Hamilton

THANK YOU MINNESOTA REALTORS® — ADVOCACY UPDATE ..................................... 24

by Christine Berger & Kevin Zabel

RPAC MAJOR INVESTORS .......................... 26

by Jim Luger

MN REALTORS® COMMITTEE REPORTS................................ 48 MN REALTORS® COMMITTEE ROSTERS................................ 52 BUILDING HOMES NEAR EAGLES’ NESTS .............................................. 54

by U.S. Fish & Wildlife Service

JANUARY EVENTS.......................................... 58

MINNESOTA ASSOCIATION OF REALTORS® 5750 Lincoln Drive, Edina, Minnesota 55436-1697 Phone: 952.935.8313 | Toll Free: 800.862.6097 | Fax: 952.935.3815 Web site: www.mnrealtor.com

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Minnesota REALTORS® Newsletter is published twelve (12) times per year Editor: Erica Forman 952.912.2668 | [email protected]

Minnesota REALTORS® — Supporting YOUR Success

MINNESOTA’S ECONOMY AT-A-GLANCE

Christine Berger Vice President, Political Affairs [email protected]

The Minnesota unemployment rate in November 2014 was 3.7% (seasonally adjusted). The U.S. unemployment rate in November 2015 equaled 5.0% (seasonally adjusted). This is down from 5.8% in November 2014. Source: Department of Employment and Economic Development (“DEED”) — 12/21/15.

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Job growth over the year is up 1.1%. The national job growth rate was 1.9%. Source: DEED — 12/21/15.

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The Minnesota Labor Force Participation rate one year ago in November 2014 was 69.7%. Source: DEED — 12/21/15.

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In November 2014, the median closed sales price in the seven-county Twin Cities area was $210,000. The November 2015, median closed sales price is up 6.2%. Based on information from 10K Research & Marketing.

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In November 2014, the median closed sales price Statewide was $177,555. The November 2015, median closed sales price is up 7%. Based on information from 10K Research & Marketing.

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PROFESSIONAL STANDARDS & ETHICS Q & A

Q

I had a person come into my open house who wants to write an offer on my client’s home. I asked if they were working with anyone and they said no. I went over the agency disclosure with them, but they did not feel comfortable working in dual agency, they just wanted me to write the offer, how should I handle this?

A

This is a challenging situation as you have a primary duty (Article 1) to protect and promote your client’s (the sellers) best interest — which would include not letting good buyers get away. However, Minnesota law (Minn. Stat. § 82.67) prohibits being a facilitator in a transaction in which you already represent one side of the transaction. The best thing to do is to draft an offer from your clients (the sellers) and present it to the potential buyers directly. In this way, you would be promoting the terms of your client to a potential buyer rather than helping a buyer determine the terms most beneficial to their position. If the buyers want to counter your client’s offer, simply present the counter to your clients. It may be wise to suggest that the buyers consider seeking counsel from an attorney if things get complicated.

Jonathan C. Kopecky, JD Associate Legal Counsel [email protected]

Q

Is it permissible for a REALTOR® to make comments through his/ her own personal Facebook (or other social media) account that would ordinarily be considered in violation of the Code of Ethics?

A

The First Amendment to the Constitution generally protects free speech — even that which may be offensive. When REALTORS® become members of our Organization, they agree to be bound by the Code of Ethics, which holds them to higher standards to promote professionalism in the field. If a REALTOR® is making comments, even through his/her own personal social media account, that REALTOR® could be found in violation of the Code of Ethics if the comments are in any way related to real estate in general or the REALTOR®’s business.

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Minnesota REALTORS® — Supporting YOUR Success

MN REALTORS®

Broker Breakfast Series Supporting YOUR Success There are 3 Broker Breakfast Club programs left! The MN REALTORS® is offering programs designed specifically for brokers, focusing on industry topics to keep you and your agents up to speed! While these programs are geared toward brokers — all REALTORS® are welcome to attend.

The second program is January 20th, 2016 — get your CE classes booked for the New Year! The programs: Cost per program: $39 Program times: 8am registration | 9am-noon program January 20th, 2016 — Prom Center: 484 Inwood Avenue North, Oakdale • Scary Things Agents Do & How to Avoid Them* — Learn from David McGee, a Minnesota professional liability attorney, who will share the funny things agents do resulting in liability and common mistakes. • Manage to Get Paid* — Come hear Jon Kopecky, the MN REALTORS® Director of Professional Standards, on the commission arbitration process and what steps you and your agents need to take to ensure your commission will be paid. (*Each course has been approved by the Minnesota Commission of Commerce for 1.5 hours of real estate continuing education.)

March 16th, 2016 — Grand Casino Hinckley: 777 Lady Luck Drive, Hinckley • Recruit, Train, Retain with Pam Ermen — Whether they like it or not, today’s REALTORS® are finding themselves in the middle of a “real estate industry” revolution, and are willing to leave what has been comfortable to seek out new leadership that understands this challenging landscape. Come learn how to be that leader! May 18th, 2016 — Brackett’s Crossing Country Club: 17976 Judicial Road, Lakeville • Realtor.com • RPR • D.A.N.G.E.R. Report — Brokers

FOR MORE DETAILS AND REGISTRATION click HERE OR Contact Katie Kuhn @ 952.912.2673 REsource: January, 2016

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Read what national speaker Pam Erman says about real estate teams. Then come see Pam March 16th at Grand Casino Hinckley, and learn to Recruit/Train/Retain. Information HERE.

TEAM DYNAMICS©

The “Top 5” Growth Traits of a Successful Real Estate Team

Pam Ermen

Aaaah Teams… Creating one can be the best thing that’s ever happened to your business, or the worst! So what factors determine which side of that equation you’ll experience?

Growth Factor #1: First Things First The “Top 5” Growth Traits of a Successful Real Estate Team

Hiring people before acquiring systems is the surefire path to failure. Think of it this way — if you hire a team member and can’t plug them into systems, procedures, and lead generation programs, what do you think they’ll plug into? (I just can’t shake this mental picture of a dog with a new litter of hungry puppies!) It’s no wonder that many Top Producers equate Teams with pain, NOT growth. If you think you’re spread thin now, just wait until you have an Administrative Assistant and/or a Team Associate literally standing at the door, waiting impatiently for you to walk in, and ready to be told what to do next. To make matters worse, their

conversation with anyone who will listen rings of a “this is not what I was expecting” message, and of course, the fact that it’s your fault is also part of their ongoing dialogue. The painful truth is that what they’re saying has validity…you are the one responsible for creating focus, purpose, and cohesiveness within your team, and a “we/they” mentality that develops will surely undermine any chances of that happening. You must develop a legitimate business plan, policies, procedures, systems, documents, and programs necessary to grow a successful team, in addition to an identity and brand that is legitimate enough to attract business, not just capture it. Successful completion of…or at least healthy progress towards completing these goals must occur before your life as a Team Leader actually gets easier. If not, don’t expect it to get harder!

Growth Factor #2: Discover Who You Are The “Top 5” Growth Traits of a Successful Real Estate Team

Remember when your Mother used to tell you there’s no one else in the world that’s just like you? It was her maternal attempt to somehow make freckles, braces, and baby fat a wonderful part of what makes you unique. Perhaps it’s a bit of a stretch, but tapping into that “conversation with Mom” before you develop a team could prove invaluable! Creating your Team by continued on next page

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duplicating the structure and nature of another team eliminates the buying or selling experience that is unique to you and that contributed to your success in the first place. In addition, why would you want to foster a “commodity” mentality between you and your competition in the minds of the Consumer? What’s more, long term retention of your team members will have much more to do with being part of a unique and inspiring environment than it will ever have to do with the amount of the commission dollars they earn. Don’t get me wrong, every Team Associate wants to keep the most money possible, but as successful managers and companies understand, there is ALWAYS a better deal somewhere else. Agents stay where they are for reasons than are much great than just money. Can you clearly define who you are, what you stand for, and why another individual would be excited to be a part of your vision? Do your core values truly drive the course of your business and the overall goals you have for yourself and anyone who associates with you? Is the public aware of the unique and valuable experience they will have when they work with you or one of your team members? Just remember, no team member is attracted to a “secret identity” and neither is the public.

Growth Factor #3: Hire “Right” From the Start The “Top 5” Growth Traits of a Successful Real Estate Team

I once asked one of the most successful Team Leaders in the country what he would define as THE most important

factor in a successful team. “Hire the right people”, he responded, without hesitation. Seemed simple enough, but as we all know, simple and easy are rarely the same thing. Asked for further insight, he shared how important it was to first clearly define what the traits of a successful Team Member literally looks, feels, and acts liked based on your expectations and your type of team. Let’s assume you’ve cleared the first hurdle by hiring Team Associates with common core values that line up with your vision and business model. Next, there are personality and learning behaviors to consider. Are you a “Thinker” or a “Feeler” when it comes to communicating, and even more importantly, when it comes to handling conflict? Are you “direct” or more “laid back” when interacting with both your Team Associates and your Clients and Customers? “Opposites attract” is rarely a recipe for success when creating a team. Yes it’s possible, and can even be beneficial to have a variety of personalities on a team, but only if the Leader understands personality and behavioral differences and knows how to manage them. In addition, what kind of Team Associate is best for your particular business model? Perhaps you’re looking for Team Associates who will basically show the property, allowing you, as the Team Manager, to “close” the sale. That Team Associate’s strengths may differ from those in a different business model where all Associates are expected to take responsibility — for the transaction from start to finish. Another type may hire for specific responsibilities, for example, a Listing Specialist who will concentrate continued on next page

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all of his or her efforts on the listing side of the transaction only. Whatever your desires, knowing DISC personality profiles and understanding adult based learning types can save a Team Manager loads of frustration by initially hiring the right person for the right seat on the bus.

Growth Factor #4: Hire an “Eye” Team Instead of an “I” Team The “Top 5” Growth Traits of a Successful Real Estate Team

Ask yourself this question “What is my motivation for developing a team?” If you’ve use the pronoun “I” more than 5 times in the first 60 seconds, save yourself some frustration and forget about the prospects of creating one. A team can be your ticket to a more balanced life, more quality time with the family, and ultimately more income with less labor on your part. But, you can’t get there without first understanding the importance of “We”. If you have clearly defined who you are and what you stand for, and have hired team members that are excited to be a part of what you’ve created, you’re on your way to creating an “EYE” Team. What is your FOCUS? If you focus on common well defined goals…inspired by the same core values…an “EYE” team possesses the “All for One and One for All” mentality. Each team member recognizes and respects the role of the Team Leader, while the Leader makes decisions and policies that are motivated by what benefits the whole. This is a winning formula for trust and respect between a team’s management and labor force, so to speak, and serves as the firm foundation of any “EYE” Team. Ultimately, this kind of environment leads to a sense of “ownership” on everyone’s part and an

intangible sense of group purpose that is greater than each individual and equally as important as a paycheck.

Growth Factor #5: Bring Meat to the Table The “Top 5” Growth Traits of a Successful Real Estate Team

Many agents believe that growing a team in the midst of today’s market conditions is for the foolhardy. The opposite is true! The challenges of the real estate marketplace over the last couple of years actually caused highly trained, experienced agents to consider team opportunities who may never have done so when their business and income was more predictable. If you’re thinking like a business owner and entrepreneur, you know that the best of opportunities often present themselves in the toughest of conditions. By nature, most individuals will play it safe in challenging times. But consider the words of one of the most successful businessmen in the world, Warren Buffet, who defined his investment philosophy as “being fearful when others are greedy and greedy when others are fearful.” For a Team Leader, some of the best opportunities in this market may come in the form of high quality, well trained producers who rode the storm of our recent economic challenges and are ready to settle into a more predictable and less stressful experience for the remainder of their career. Keep in mind, though, these Agents are not only looking for confidence and leadership, but business! Many are still recovering financially after years of inconsistent business due to spheres of influence that didn’t buy or refer as they always had in the past. continued on next page

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A savvy Team Manager who targets a variety of business sources, capitalizing on opportunities driven by current market conditions such as foreclosures, short sales, or investors in recent years, positions themselves to “feed the masses,” which is what business planning for a team is all about. Developing a team business plan is a specialized and necessary process that should address exactly what sources you will target, the amount of business you can expect from each source, the portion of business to be shared with each Team Associate, and a master budget that ensures the income goals of ALL team members can be met.

Conclusion Creating an environment of interdependence among a team of independent salespeople sounds like an impossible feat. If you have already made an effort at growing a team without applying the traits and principles discussed, I’m sure you feel like it is one! Hiring Agents to share the workload does not make a team. A team is really a microcosm of a real estate office, requiring an intentional daily focus on systems, relationships, and quality leadership in order to become healthy and productive. If these are lacking, you may as well install a revolving door at

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the entrance of your office or allot plenty of time for renegotiating splits with your Team Associates in order to keep them. If you’re willing to put that same time into understanding the Top 5 Growth Traits of a Successful Team, new levels of success and profitability can be just a few new team members away! Permission to reprint is granted with inclusion of the following byline, crediting Pam Ermen. We ask that you notify us of your use and please email a copy or link to [email protected].

Pamela Ermen has spent her entire business career in real estate, earning her license at age 18 and entering full-time management at age 24. For more than 30 years, Ermen, a national trainer and coach with Real Estate Guidance Inc. in Virginia, has coached agents and teams to their highest levels of productivity. Pam Ermen can be reached at [email protected].

Come see Pam March 16th at the Broker Breakfast Club, Grand Casino Hinckley, and learn to Recruit/Train/Retain. Information HERE.

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UPCOMING EDUCATION

Mary Gleason Best Director, Professional Development [email protected]

Upcoming Educational Programs 3.0 hours MN CE each AND qualifies towards GRI Designation. January 11th, St. Paul Area Association of REALTORS® Office, St. Paul Get More Info & Register @ www.mnrealtor.com Code of Ethics Case Studies II Course has been approved by the Minnesota Commissioner of Commerce for 3.0 hours of real estate continuing education. Meets NAR’s Code of Ethics Requirement.

Contracts Course has been approved by the Minnesota Commissioner of Commerce for 3.0 hours of real estate continuing education.

Hear case studies from the Director of Professional Standards for Minnesota REALTORS®. Meets the NAR Code of Ethics Requirement.

Special emphasis on contract issues arising in day-to-day business to better equip you to serve buyers and sellers on contractual requirements.

Instructor: Jon Kopecky

Student Testimony: Fun, funny, and insightful! Very energetic and positive.

Instructor: Anne Kealing

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January 14th, REALTOR® Association of Southern Minnesota Office, North Mankato Get More Info & Register @ www.mnrealtor.com Professional Standards and Best Practices Course has been approved by the Minnesota Commissioner of Commerce for 3.0 hours of real estate continuing education.

Negotiate with Confidence and Power: Advanced Course has been approved by the Minnesota Commissioner of Commerce for 3.0 hours of real estate continuing education.

Learn to manage expectations, negotiate, and preserve the transaction! Delve into legal and ethical principles, rules, and etiquette of communication, even in the face of difficult situations Skill builder for working through difficult transactions. Help buyers and sellers resolve differences and achieve resolution!

Instructor: Deb Greene

Student Testimony: “...well worth the drive to the Cities. Deb Greene did an excellent job presenting” - Corey Stittsworth

January 25th, Minnesota REALTORS® Office, Edina Get More Info & Register @ www.mnrealtor.com

Risk Management Course has been approved by the Minnesota Commissioner of Commerce for 3.0 hours of real estate continuing education.

FAQs about risk management and best practices. Includes compensation, disclosure, agency, contractual issues, and more.

Instructor: Susan Dioury

Come learn from MN REALTORS’® Sr. VP of Risk Management

Instructor: John Anderson Counseling Sellers: From Listing to Closing Course has been approved by the Minnesota Commissioner of Commerce for 3.0 hours of real estate continuing education.

Counsel your seller clients about effective marketing, objective pricing, and pre-sale and post-sale responsibilities.

Student Testimony: Outstanding. Learned many new things to take home and apply to my business.

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February 8th, Minnesota REALTORS® Office, Edina Get More Info & Register @ www.mnrealtor.com Code of Ethics Case Studies II Course has been approved by the Minnesota Commissioner of Commerce for 3.0 hours of real estate continuing education. Meets NAR’s Code of Ethics Requirement.

Guide to Navigating Transactions Course has been approved by the Minnesota Commissioner of Commerce for 3.0 hours of real estate continuing education.

Hear case studies from the Director of Professional Standards for Minnesota REALTORS®. Meets the NAR Code of Ethics Requirement.

Instructor: Jon Kopecky

Student Testimony: Fun, funny, and insightful! Very energetic and positive.

Manage different types of issues and learn prevention techniques. Counsel buyers and sellers to preserve transactions through conflict and negotiations.

Instructor: Lynn Leegard

Student Testimony: Exceptional knowledge of content. Excellent presentation.

February 22nd, Minnesota REALTORS® Office, Edina Get More Info & Register @ www.mnrealtor.com

Resolving Transaction Disputes Course has been approved by the Minnesota Commissioner of Commerce for 3.0 hours of real estate continuing education.

Professional Standards and Best Practices Course has been approved by the Minnesota Commissioner of Commerce for 3.0 hours of real estate continuing education.

Common scenarios and conflicts with practical and ethical solutions taught by the State Association’s Director of Professional Standards.

Learn to manage expectations, negotiate, and preserve the transaction! Delve into legal and ethical principles, rules, and etiquette of communication, even in the face of difficult situations

Instructor: Jon Kopecky

Student Testimony: Very informative...excellent job!

Instructor: Deb Greene

Student Testimony: “...well worth the drive to the Cities. Deb Greene did an excellent job presenting” - Corey Stittsworth continued on next page

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February 24th, Grand Casino Hinckley Get More Info & Register @ www.mnrealtor.com

Business and Communication Technology Course has been approved by the Minnesota Commissioner of Commerce for 3.0 hours of real estate continuing education.

Professional Standards and Best Practices Course has been approved by the Minnesota Commissioner of Commerce for 3.0 hours of real estate continuing education.

Instructor: Rob Mehta Technology usage in today’s real estate business — hardware, software, apps, tech tools, tips, and more! Student Testimony: Great suggestions for solutions in lots of areas!

Learn to manage expectations, negotiate, and preserve the transaction! Delve into legal and ethical principles, rules, and etiquette of communication, even in the face of difficult situations

Instructor: Deb Greene

Student Testimony: “...well worth the drive to the Cities. Deb Greene did an excellent job presenting” - Corey Stittsworth continued on next page

CONNECT WITH MINNESOTA REALTORS®

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Other Upcoming GRI Courses Also Earning MN CE Edina: March 21 Essential Real Estate Marketing Guide* Negotiate with Confidence and Power: Fundamentals* April 4 Risk Management* Proper Pricing & Secrets of the CMA* May 11 Business and Communication Technology* Contracts* May 23 Negotiate with Confidence and Power: Advanced* Resolving Transaction Disputes*

St. Paul: March 7 Risk Management* Counseling Sellers: From Listing to Closing* April 14 Buyer Counseling: A Planned Approach* Negotiate with Confidence and Power: Fundamentals*

Rochester: April 18 New Home Construction 101* Guide to Navigating Transactions*

Moorhead: May 16 New Home Construction 101* Resolving Transaction Disputes* * Each course has been approved by the Minnesota Commissioner of Commerce for 3.0 hours of real estate continuing education. Check for up-to-date details and registration information at https://portal.mnrealtor.com/eventcalendar.aspx. continued on next page

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Imagine how you’d feel if your agent’s transaction closed and then you didn’t get paid …… Don’t miss: “Manage to Get Paid”*, with attorney Jon Kopecky. Jon handles arbitration complaints for the MN REALTORS®. He can tell you how to avoid agent mistakes that could cost you money! And: “Scary Things Agents Do & How to Avoid Them”*, with attorney David McGee. David has seen it all handling professional liability claims for numerous insurers in arbitrations, administrative proceedings, licensing agencies and in court.

Risk Management 102 & Breakfast January 20th, 9-noon Prom Center 484 Inwood Avenue N Oakdale, MN 55128 Information and registration HERE. Hurry and reserve a seat! (Yes, you can bring your agents, too!) *Each class is approved by the Commissioner of Commerce for 1.5 hours of real estate continuing education totaling 3 hours of CE for the morning. REsource: January, 2016

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Graduate to a new level of real estate as a GRI.

Congratulations, New GRI Designees

GRI: advanced education for growing your business

“GRI is the best series of classes that an agent can take. The skills and principles reviewed will enhance an agent’s business and help increase their service and commissions. This program Earn the most comprehensive real estate designation. is the foundation for a long and prosperous career.” Whether you’ve been inABR, the business a while orGRI, are PMN; just starting out,MO you can expand —Elizabeth Mendenhall, ABRM, CIPS, CRB, Columbia,

your knowledge with the Graduate, REALTOR® Institute (GRI) designation.

It’s more than just a designation. DID YOU KNOW? Youeducational may have already earned GRI: GRI is an elevated experience, socredits you’re towards learning YOUR and improving your business. • The 2011-12 DOC-required module, Residential Leasing, fulfills one elective; • The 2012-13 module, Contracts portion, fulfills one required course; the GRImodule, designation andProperties become portion, an industry with: • Earn The 2012-13 Distressed fulfills leader one elective; • •The 2013-14 module, Management, one required course; In-depth state andRisk national marketfulfills knowledge • •This year’s 2015-16 required module, Fair Housing, Agency, and Legal Update, also meets a Progressive business skills requirement.

• State-of-the-art systems and tools • Expert risk evaluation

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Congratulations to these new GRI Designees:

Joel Anderson RE/MAX Results

Jeff Cameron Counselor Realty

Jennifer Lundquist Edina Realty NOT PICTURED: Diane Kelm Keller Williams Classic Realty North

Dana Van Hout Edina Realty

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Kristine Dawn Wallenfelsz Princeton Realty

Roberta Simpson Keller Williams Classic Realty

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LEGAL HOTLINE Q & A

Anne V. Kealimg, JD Associate Legal Counsel [email protected]

Q

How can a seller transfer personal property to a buyer as part of a real estate transaction?

A

Minnesota REALTORS® does not have a separate personal property transfer agreement form. Instead, the Purchase Agreement addresses fixtures and personal property that will be transferred as part of the purchase on lines 17-34. All improvements, fixtures, and appurtenances, including but not limited to those listed in that paragraph, are considered part of the real property and transfer with it automatically. This would include built-in appliances that are so much a part of the real property that removing them would not be feasible. However, not all appliances are built-ins — the average refrigerator or washer and dryer set would not be considered

built-ins. Additionally, parties might want to transfer larger personal property items that would not be considered permanently affixed to or part of the real property, such as boat docks, televisions, and the like. Thus, Minnesota REALTORS® provides lines 28-30 in the Purchase Agreement to write in additional items that the parties intend to be transferred with the property at closing. Minnesota REALTORS® encourages parties to use the Purchase Agreement, rather than a separate agreement, to transfer additional personal property. Lenders need to be aware that such personal property is included in the transfer as part of the purchase price when determining the loanto-value ratio of the property and whether a loan should be made. If a lender requests that the personal property transfer be removed from continued on next page

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the Purchase Agreement, then salespersons should consult with their broker or legal counsel for advice on how to assist their clients in transferring the personal property through a separate Bill of Sale with appropriate consideration. Keep in mind that the amount paid for the personal property needs to reflect its market value.

Q

Is it permissible to rebate a portion of a buyer’s agent’s commission to the buyer at closing?

A

Maybe. Minn. Stat. § 82.70, Subd. 2, specifically allows a licensee to rebate or split a commission with a party to the transaction, if desired. However, while this might be allowed by statute and presumably allowed for purchases in which no loan is required, it may be prohibited by a lender or other law, if there is a loan required to purchase the property. It is possible that the lender will require the rebate to be addressed on the closing documents, so it is necessary to make the lender aware.

Q

Does a team or group need to file an assumed name with the Minnesota Secretary of State’s office before conducting business as a team?

A

While it is necessary to file certain business information with the Minnesota Secretary of State, the structure of the team will determine whether an Assumed Name filing would be the appropriate filing. Many teams have formed limited liability or other corporations. If your team has filed necessary corporate documentation with the Secretary of State and uses the corporate name filed, this is sufficient. If your team has not organized a corporation, and you are operating as general partnership, then an Assumed Name would be an appropriate filing. Minn. Stat. § 333.01 states that “no person shall hereafter carry on or conduct or transact a commercial business in this state under any designation, name, or style, which does not set forth the true name of every person interested in such business unless such person shall file in the Office of the Secretary of State, a certificate setting forth the name and business address under which the business is conducted or transacted, or is to be conducted or transacted, and the true name of each person conducting or transacting the same, with the address of such person.”

NOTICE: Real Estate Brokers and Salespersons are invited to submit questions to the Minnesota REALTORS® that they would like answered in the Legal Hotline Column. You can email requests to Heather Zebott at hzebott@ mnrealtor.com. Please indicate that your question is for the Legal Hotline Column. Questions submitted will NOT be directly answered. REsource: January, 2016

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A NOVEMBER TO REMEMBER FOR HOME SALES IN MINNESOTA

Carrie Andersen Vice President, Member Services [email protected]

El Nino isn’t just affecting the weather in Minnesota; it’s having an effect on the housing market as well. New listings in the month of November were at 5,503 units, up 15.9% over the same time last year. Additionally, pending sales are up 15% over November 2014. Sellers are able to sell their homes in about 72 days, which is a 7.7% decrease over the same time last year. In addition to selling their homes faster, they are also receiving 94.6% of the original price. The median sales price jumped 7.0% to $190,000, while the average sales price rose 7.2% to $233,314. The median sales price is the midpoint, indicating as many transactions above as below the stated price. “The inventory increase will be beneficial for those looking to buy a home before the interest rates go up.” said Chris Galler, CEO of the Minnesota REALTORS®.

Download the November 2015 Minnesota Housing Report HERE.

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NEW MN REALTORS® HOME INSPECTIONS TASK FORCE Over the past several months, the MN REALTORS’® Governmental Affairs Committee has dedicated time to discussing issues raised by members regarding home inspections.

Paul Eger Vice President, Governmental Affairs [email protected] @paul_eger

Ryan E. Hamilton, JD Associate Legal Counsel [email protected]

Although these discussions were initiated in the Governmental Affairs Committee, it became clear that the issues and concerns raised with respect to home inspections were broader than the jurisdiction of the Committee. In order to dedicate the time, energy, and resources required to examine all of the relevant issues, the MN REALTORS’® Leadership Team approved the creation of a “Home Inspections Task Force.” MN REALTORS® President-Elect Patty Zuzek will be chairing the Task Force of twelve MN REALTORS® members from across the state, including the Chair and Vice Chair of the Governmental Affairs Committee.

The Task Force will have its first meeting in January and will meet regularly throughout 2016. At the conclusion of its work, the Task Force will report back to the Leadership Team. The Task Force will be discussing, among other topics related to home inspections: • A membership survey that will help identify issues and shape the scope of the Task Force’s work over the next year; • Forms-related matters; • Education and best practices and; • The regulatory framework. The Task Force will also be engaging home inspectors in a dialogue about issues of common interest. If you’re interested in learning about the work of the Task Force throughout the year, look for updates in the MN REALTORS® eResource newsletter and in this publication. 22

Minnesota REALTORS® — Supporting YOUR Success

Your education should be as stunning as the land you sell.

January LANDU Online Courses: Land Investment Analysis Mineral, Oil & Property Rights REALTORS® Land Institute 430 North Michigan Ave. | Chicago, IL 60611 P: 1.800.441.5263 | E: [email protected] Register at: www.rliland.com REsource: January, 2016

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THANK YOU MINNESOTA REALTORS® — ADVOCACY UPDATE

Christine Berger Vice President, Political Affairs [email protected]

Kevin Zabel Director, Political Affairs [email protected]

2015 marked an incredible year for MNRPAC and REALTOR® advocacy efforts across the state. Record participation in RPAC and REALTOR® advocacy campaigns put the REALTOR® Party at the center of political conversations and allowed REALTORS® to:

•

Beat back legislative threats to the Minnesota Mortgage Interest Deduction and the seizure of housing fees to pay for transportation spending in Congress

•

Emerge victorious when the Minnesota Court of Appeals dismantled the Sprinkler Mandate on new construction

•

Interact with members of Congress, state legislators, and local officials during the 7-stop, regional ‘Advocacy @ Home’ professional development workshop series.

With the 2016 elections rapidly approaching, the opportunities for REALTORS® to get involved and impact the political direction of real estate policy continues to grow. In order to remain upto-date on all opportunities for REALTOR® advocacy, please visit www.mnrpac.org or sign up for our mobile action alerts by texting ‘REALTOR’ to 30644. continued on next page

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Minnesota REALTORS® — Supporting YOUR Success

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2015 RPAC and REALTOR® Advocacy: By the Numbers RPAC Participation: 3,830 investors Participation Rate: 22.06%* Major Investors: 89 investors* Total Money Raised: $369,310.80* Supported 10 local officials with election efforts

Advocacy Efforts Calls-for-Action Patent Troll Call-for-Action: 3,151 signers (19.9%)** G-Fee Call-for-Action: 4,985 signers (31.71%)** Minnesota Homes Matter Mortgage Interest Deduction Campaign Petition to Legislators: 11,246 signers Campaign visits and events: 37 Published REALTOR® Editorials Statewide: 25 Digital Advertisement Clicks: 69,000+ Facebook ‘Likes’: 1,500+ *As reported on December 21, 2015 **All-time record

Contributions are not deductible for income tax purposes. Corporate contributions are not acceptable by MN-RPAC and 100% will be allocated to the NAR Political Advocacy Fund. Contributions to RPAC are voluntary and are used for political purposes. You may contribute more or less than the suggested amount. You may refuse to contribute without reprisal, and the National Association of REALTORS® or any of its state associations or local associations will not favor or disfavor any member because of the amount contributed. Contributions under $1,000 will be provided 100% to MN-RPAC for use in state and local elections. For contributions totaling $1,000 or more, 70% is used by MN-PAC to support state and local political candidates and 30% is sent to National RPAC to support federal candidates and is charged against your limits under 52 U.S.C. 30116. For further information concerning RPAC contributions, please contact Chris Galler, RPAC Treasurer at [email protected].

REsource: January, 2016

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Realtor Party

RPAC MAJOR INVESTORS

®

MN-RPAC thanks the Major Investors for their generous contributions. The following members have contributed over $1,000 during FY 2015.

= NAR President’s Circle |

= NAR Hall of Fame |

= MN REALTORS® Hall of Fame

Click here for more information on the investment levels.

Platinum “R”

Michelle Lyons

James Stanton

Port Cities Realty Duluth

Riverdale Realty Coon Rapids

Minneapolis Area Association of REALTORS®

Minnesota REALTORS®

St. Paul Area Association of REALTORS®

Jim Cormier

Fran Davis

John Fridlington

Chris Galler

Rod Helm

Building Sites Coon Rapids

Coldwell Banker Burnet Minneapolis

St. Paul Area Assn of REALTORS® St. Paul

MN REALTORS® Edina

Coldwell Banker Burnet Minneapolis

Golden “R”

Mark Allen

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Minnesota REALTORS® — Supporting YOUR Success

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Golden “R”

Susan Juneau

Lynn Leegard

John Smaby

Jerry Teeson

Dan Wagner

Keller Williams Classic Realty Coon Rapids

Lynn Leegard, Broker Coon Rapids

Edina Realty Edina

Riverdale Realty Coon Rapids

Coldwell Banker Burnet Rochester

Crystal “R”

Sterling “R”

Kevin Knudsen

John Anderson

Tina Angell

Coldwell Banker Burnet Minneapolis

Twin Oaks Realty Crystal

Coldwell Banker Burnet St. Paul

Matt Baker

Rick Bandimere

Coldwell Banker Burnet Minneapolis

Keller Williams Classic Realty Coon Rapids

Kate Beckman Christine Berger Jim Christensen Coldwell Banker Burnet St. Paul

MN REALTORS® Edina

Gregory Anselmo Edge of the Wilderness Realty Marcell

Bob Clark

Kurilla Real Estate Lynskey Real Estate Nisswa Stillwater

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Sterling “R”

Susan Dioury

Tracey Douglas

Nick Dreher

Paul Eger

Jay Ettinger

Bob Fairchild

MN REALTORS® Edina

St. Paul Area Assn of REALTORS® St. Paul

Liberty Title St. Paul

MN REALTORS® Edina

Keller Williams Integrity Minneapolis

Providence Real Estate Services Chaska

Lynn Foulke

Chris Fritch

Wayne Gilbert

Deb Greene

Results Support Services Eden Prairie

Keller Williams Classic Realty Coon Rapids

Coldwell Banker Burnet Apple Valley

Coldwell Banker Burnet Wayzata

Andy Fazendin Tracie Fogelson Roger Fazendin, REALTORS Wayzata

Coldwell Banker At Your Service Realty Rochester

Casey Hatch

Steve Havig

Integrity Real Estate Lakes Area Realty Austin Minneapolis

Mike Hoffman Michael Hunstad Paula Jackson Coldwell Banker Burnet Edina

Claire Killen

Counselor Realty RE/MAX Lakes Area Emerald Real Estate Coon Rapids Realty Minneapolis Alexandria

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Minnesota REALTORS® — Supporting YOUR Success

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Sterling “R”

Peggy Kman

Maria Letsos

Mary Lindgren

Matt Loskota

Cotty Lowry

Greg Mason

Coldwell Banker East West Iron River

RE/MAX 1 Superior

Fuhrman Real Estate Austin

Eduna Realty Minneapolis

Keller Williams Integrity Minneapolis

Edina Realty Edina

Tony Maurer

Deborah Newell

Mike Olsen

Julia Parenteau

Ron Peltier

Coldwell Banker Burnet Apple Valley

Real-Time Leasing Eagan

Keller Williams Premiere Realty Woodbury

Russ Portele

Colleen Ratzlaff

Nene Matey Keke RNR Realty St. Louis Park

Robin Peterson

David Pope

Coldwell Banker Burnet Edina

Coldwell Banker Burnet Apple Valley

Minneapolis Area Home Services of Assn of REALTORS® America Edina Minneapolis

Joe Reis, Jr.

Coldwell Banker Coldwell Banker LaBeau Burnet Burnet RE/MAX Advantage St. Cloud Edina Plus Lakeville

Judd Sampson Edina Realty Edina

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Sterling “R” ($1,000-$2,499)

Len Sarvela

Terry Schmitz

Real Estate Masters Edge of the Duluth Wilderness Realty Marcell

Steve Sherwood Todd Shipman Edina Realty Rochester

Lakes Sotheby’s International Edina

Paul Sigurdson

TJ Simon

Counselor Realty Wolff & Simon Real Arden Hills Estate Park Rapids

Kisti Skaar

Linda Smaby

Gary Smith

Linda Stoeckicht Richard Tucker

Wendy Uzelac

RE/MAX Properties Albert Lea

Edina Realty Minneapolis

Keller Williams Classic Realty Coon Rapids

Minneapolis Area Coldwell Banker Assn of REALTORS® Burnet Edina Lakeville

RE/MAX Thousand Lakes Grand Rapids

Deanna Wiener

Tom Wiener

Brooke Wolford

Wendy Woods

Kevin Zabel

Trent Zimmer

RE/MAX Results Eden Prairie

Counselor Realty Coon Rapids

MN REALTORS® Edina

Coldwell Banker Burnet Apple Valley

Cardinal Realty Co. Cardinal Realty Co. Oakdale Oakdale

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Minnesota REALTORS® — Supporting YOUR Success

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Sterling “R” ($1,000-$2,499)

Patty Zuzek

Counselor Realty

Coldwell Banker Burnet Apple Valley

Duluth Area Fargo-Moorhead Greater Lakes Association of Area Association Association of REALTORS® of REALTORS® REALTORS®

Southeast Minnesota Association of REALTORS®

Corporate Ally Program Partner

SEMAR MLS

St. Cloud Area Association of REALTORS®

West Central Association of REALTORS®

NorthstarMLS

BE PART OF THE NETWORK. Tens of thousands of REALTORS® now receive REALTOR® Party Mobile Alerts. Do you?

These REALTOR® members get exclusive opportunities to take action on important real estate issues. Don’t miss out. Click here to sign up or text the word “network” to 30644 SIGN UP

REsource: January, 2016

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“THE FED RAISED SHORT TERM INTEREST RATES” & OTHER TALKING POINTS FOR YOUR CLIENTS balances to other depository institutions overnight. After seven years of the federal funds rate being near zero, to support the recovery of the economy, the range was increased. Christine Berger Vice President, Political Affairs [email protected]

What happened?

The Federal Open Market Committee raised the target range for the federal funds rate to .25% to .5%.

Who did what?

The Federal Open Market Committee (“FOMC”) is an important part of our central bank, the Federal Reserve (AKA ‘The Fed’). They use ‘Monetary Policy’ to influence the availability and cost of money and credit to help promote national economic goals. The FOMC reviews the current economic and financial picture, determines the appropriate monetary policy tools, and examines the risks to its long-term goals of managing inflation and sustainable economic growth. The Committee, after reviewing the latest data, unanimously voted in December to increase the federal funds rate, the interest rate at which depository institutions (banks) lend reserve

Why?

It is a vote of confidence in the American economy. The Committee saw enough positive news in the jobs market, higher incomes, and a path of steady economic expansion to support a small increase in the rate. However, the increase is focused on balancing between two types of risk: To defend against future high inflation (albeit, the FOMC is ‘reasonably confident’ that inflation will rise over the medium-term to its 2% target) Instituting an increase that is sure to not undermine the ongoing economic recovery.

1 2

Janet Yellen, the Fed’s Chair, addressed the inflation issue up front — currently inflation is still low, so why increase the rate? She pointed out that inflation is being ‘suppressed temporarily by factors like lower oil prices’ but would rise as job growth continued.

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Minnesota REALTORS® — Supporting YOUR Success

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What is the Impact?

Experts are predicting the rate increase will have only a modest impact on the economy. So far, many large banks have been increasing the rates on many loans (but not increasing the rate it pays on deposits). As one would expect, mortgage rates are likely to rise, but the relationship between short-term rates and long-term borrowing cost are not one-to one. Central banks do not control long-term interest rates. Market forces (supply and demand) determine equilibrium pricing for long-term bonds, which set long-term interest rates. None the less, it is predicted that mortgage rates may rise slightly but will stay near their historic low rates, despite the federal funds rate increase.

What else?

Yellen stated that this was the tentative (or slow) start to a ‘gradual’ tightening cycle — and that they will be closely watching inflation levels, which will help them determine their next move. Historically, the Fed drove up borrowing costs by draining the money from the financial system. But for now, to move the range from near-zero to the new range, the Fed said it would set the interest it pays banks on excessive reserves at 0.5% and would offer a maximum of $2 trillion in reverse repurchase agreements. Basically, this means the Fed will pay banks not to lend below its new benchmark rate.

Through Jan. 29, 2016, Dell offers Double the Discounts to NAR members when purchasing through Dell.com/NAR. An extra 20% on Dell Precision workstations An extra 20% on select PowerEdge servers $1,299 and above An extra 10% off list price on select OptiPlex desktops, Latitude laptops, and XPS PCs An extra 5% on select Dell electronics and accessories An extra 4% on select Inspiron PCs Visit Dell.com/NAR to shop. Note: you must include the relevant coupon code (found on Dell.com/NAR) in order to receive your discount. See website for all terms, conditions, and exclusions. REsource: January, 2016

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MODERATE EXPANSION, EASING PRICES EXPECTED FOR COMMERCIAL REAL ESTATE MARKETS

www.realtor.org

Sustained job growth throughout the country and improving credit conditions are forecast to help keep commercial real estate activity expanding into next year, but property prices are likely to slightly cool off after reaching their peak in some major markets, according to the National Association of REALTOR’S® (“NAR”) quarterly commercial real estate forecast. National office vacancy rates are forecast by REALTORS® to decrease 0.8% to 14.8% over the coming year as continued job creation drives demand. The vacancy rate for industrial space is expected to decline 1.4% to 9.7%, and retail availability to decrease 1.3% to 11.3%. With new apartment construction projects coming through the pipeline in several markets, only multifamily vacancies are forecast to increase over the next year, from 6.1% to 7.3%.

Lawrence Yun, NAR Chief Economist, says the outlook for the commercial real estate sector continues to look bright despite the multiple headwinds that have held back the economy in recent months. “Temporary turbulence in the financial markets, a stronger U.S. dollar hurting exports, and economic weakness overseas chipped away at third quarter growth and led to some deceleration in the pace of commercial investments,” he said. “The good news is that these deterrents are slowly residing, which should ultimately reawaken the growing appetite for commercial space heading into next year.” According to Yun, increases in lending and investment activity will be driven by steady job creation and slightly easier access to credit. While healthier local labor markets are expected to slowly pull down vacancy rates while pushing rents higher, continued on next page

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Minnesota REALTORS® — Supporting YOUR Success

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the modest opening of the credit box is an especially important development for REALTORS®, who are mostly engaged in deals of $1 million or less and have clients that rely heavily on financing from local community banks and credit unions. Although most REALTORS® who practice commercial are still reporting tight lending conditions, an increasing share are saying that credit is becoming slightly easier to obtain.

growth. However, investments are still expected to continue on an upward trend.

Regionally, several states in the South and West have outperformed the rest of the country in job growth over the past year. Led by strong demand for apartments from faster household formation and rent growth, metro areas in those states are expected to see elevated levels of new construction, which will lead to a slight uptick in vacancy rates.

The latest REALTORS® Commercial Real Estate Market Survey, which measures quarterly activity from NAR’s commercial members, found that similar to residential real estate, the shortage of available inventory remains a concern and is pushing price growth upward. During the third quarter, REALTORS®’ sales volume rose 7.2% year-over-year and prices increased 3.8%.

“The best days for multifamily housing could be winding down as new construction has already surpassed historical averages,” adds Yun. “This sector has been the industry’s top performer over the past several years as a result of younger households struggling to become homeowners and the demand for apartments far exceeding supply in many markets.” Even though rising occupancy and rents will continue, property prices are forecast to decline slightly in 2016 as the Federal Reserve starts to raise interest rates. With cap rates already compressed to very low levels, Yun anticipates short-term rate increases in December, and then again in March, which could slightly temper market

REsource: January, 2016

“Rising sales and investor optimism in recent years has pushed prices past their peak in many of the larger commercial markets,” says Yun. “Investors — especially those abroad — looking for better yields will likely seek to invest their larger sums of cash in smaller markets and into lower-end properties.”

NAR’s latest Commercial Real Estate Outlook1 offers overall projections for four major commercial sectors and analyzes quarterly data in the office, industrial, retail, and multifamily markets. Additional analysis will be posted under Economists’ Outlook in the Research blog section of Realtor.org at: economistsoutlook.blogs.realtor.org.

1

The next commercial real estate forecast and quarterly market report will be released February 25 at 10:00 a.m. ET. Reprinted with permission by the National Association of REALTORS® from REALTOR.org. © 2015. All rights reserved.

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SOPHISTICATED EMAIL SCAMS TARGETING THE REAL ESTATE INDUSTRY

www.realtor.org

Criminals are hacking into the email accounts of real estate agents or other persons involved in a real estate transaction and using information gained from the hack to dupe a party into a fraudulent wire transfer. The hackers often send an email that appears to be from an individual legitimately involved in the transaction informing the recipient, often the buyer, that there has been a last minute change to the wiring instructions. Following the new instructions, the recipient will wire funds directly to the hacker’s account, which will be cleared out in a matter of minutes. The money is almost always lost forever. The National Association of REALTORS® urges its members and state and local REALTOR® associations to be on high alert for email and online fraud. In May 2015, NAR issued an alert regarding a sophisticated email wire fraud hitting the real estate industry. Since then, the incidents of online scams targeting practitioners have continued to rise, but the advice is the same.

Bottom line: Do not let your guard down. Start from the assumption that any email in your inbox could be a targeted attack from a criminal.

PREVENTION

Follow this guidance to avoid becoming a victim:

•

Immediately contact all parties to all of your upcoming transactions and inform them of the possibility of this fraud. Attorneys, escrow agents, buyers, sellers, real estate agents, and title agents have all been targeted in these scams. You can also download and distribute NAR’s online fraud prevention handout, accessible here.

•

If possible, do not send sensitive information via email. If you must use email to send sensitive information, use encrypted email.

•

Immediately prior to wiring any money, the person sending the money must call the intended continued on next page

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Minnesota REALTORS® — Supporting YOUR Success

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recipient to verify the wiring instructions. Only use a verified telephone number to make this call.

•

Do not trust contact information in unverified emails. The hackers will recreate legitimate-looking signature blocks with their own telephone number. In addition, fraudsters will include links to fake websites to further convince victims of their legitimacy.

•

Never click on any links in an unverified email. In addition to leading you to fake websites, these links can contain viruses and other malicious spyware that can make your computer — and your transactions — vulnerable to attack.

• •

Never conduct business over unsecured wi-fi. Trust your instincts. Tell clients that if an e-mail or a telephone call ever seems suspicious or “off,” that they should refrain from taking any action until the communication has been independently verified as legitimate.

•

Clean out your e-mail account on a regular basis. Your e-mails may establish patterns in your business practice over time that hackers can use against you. In addition, a longstanding backlog of e-mails may contain sensitive information from months or years past. You can always save important e-mails in a secure location on your internal system or hard drive.

•

Change your usernames and passwords on a regular basis, and make sure your employees and licensees do the same.

•

Never use usernames or passwords that are easy to guess. Never, ever use the password “password.”

•

Make sure to implement the most up-to-date firewall and anti-virus technologies in your business.

DAMAGE CONTROL

If you believe your e-mail or any other account has been hacked, or that you or a client has otherwise been a victim of online fraud, you should take the following steps:

•

If money has been wired via false wiring instructions, immediately call all banks and financial institutions that could possibly put a stop to the wire.

• •

Contact your local police. Contact any clients or other parties who may have been exposed during the attack so that they take appropriate action. Remind them not to comply with any requests from an unverified source.

•

Change all usernames and passwords associated with any account that you believe may have been compromised or otherwise made vulnerable by the attack.

•

Report any fraudulent activity to the Federal Bureau of Investigations via their Internet Crime Complaint continued on next page

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Center. More information can be found by clicking here.

•

Brokers should report any fraudulent activity to their state or local REALTOR® association so that the associations can send out alerts or take other appropriate action, including contacting NAR.

This advice is not all-inclusive, and real estate practitioners should work with Information Technology and cybersecurity professionals to ensure that their e-mail

accounts, online systems, and business practices are as secure and up-to-date as possible. Be aware that these emails are extremely convincing. Many sophisticated parties have been duped. No one should assume that they are “too savvy” to recognize the fraud. In addition, no one should assume that they are “too small a target” to be on these criminals’ radars. This fraud is pervasive, convincing, and constantly evolving.

For more information on this and other cyberscams, as well as further information on cybersecurity best practices, visit these resources: • speakingofrealestate.blogs.realtor.org/2015/05/19/alert-wire-fraudsters-targeting-realestate-transactions/ • www.realtor.org/law-and-ethics/protecting-your-business-and-your-clients-fromcyberfraud • www.realtor.org/articles/request-to-redirect-funds-should-trigger-caution • www.realtor.org/topics/data-privacy-and-security • www.realtor.org/topics/risk-management • www.realtor.org/articles/internet-security-best-practices • www.realtor.org/topics/realtor-safety/articles Reprinted with permission by the National Association of REALTORS® from REALTOR.org. © 2015. All rights reserved.

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Minnesota REALTORS® — Supporting YOUR Success

Each May/June, REALTOR® Magazine features 30 rising young stars in the real estate industry. In determining who makes the 30 Under 30 list, REALTOR® Magazine staff looks for candidates who are successful in the real estate business and have demonstrated skill, success, creativity, and leadership in their careers. How can I submit an application? The application period is now open. You can access the online form here. Please note that you will first need to sign in with your REALTOR.org password. Who’s eligible to enter? For the 2016 feature, any REALTOR® member of the National Association of REALTORS® who is 29 years old or younger on May 31st, 2016, and who has not been profiled as a previous 30 Under 30 honoree, is eligible. (Previous finalists who didn’t make it into the group of 30 honorees are allowed to reapply.) What’s the deadline? Applications are due by January 15th, 2016. Click here for additional information and full contest rules.

REsource: January, 2016

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Member Profile:

Paul Sigurdson,

Counselor Realty, Arden Hills

Paul is the current Chair of the MN REALTORS’® Governmental Affairs Committee. He also serves on the MN REALTORS’® Risk Management Committee, Diversity Committee, Professional Standards Committee, and the Board of Directors. He is also an RPAC Trustee. How long have you been a REALTOR®? Licensed since 1979, REALTOR® member since 1981. What communities do you serve? Mainly Minneapolis, St. Paul, and first ring suburbs. What area of real estate do you specialize in? For the past 21 years, I have represented non-profit developers that provide housing opportunities for low-to-moderate income households. For me, it is especially rewarding to reach out to prospects that, in the past, have heard “no” in their attempt to purchase and be able to find the successful path to “yes” — and hand over a set of keys to their piece of the American Dream.

What value do you receive from the REALTOR® Organization? For me, the REALTOR® Organization is a conduit to education, professional networking, and, most importantly, a chance to give back. In the early 1980’s, my broker encouraged me to get involved in the local REALTOR® association by serving on a committee. At that time, the Minneapolis Area Association of REALTORS® (“MAAR”) had an Equal Opportunity Committee in which I appointed to serve. As a life-long (except for high school and college) Minneapolis resident, I saw a need for the REALTOR® community to advocate for fair housing, and recognize solutions to decrease the disparity in the ownership percentage between caucasians and persons of color. I personally chose a path to work with first-time buyers, and found ways to use government-sponsored assistance programs that many times made the difference in qualifying for the purchase. I have been involved in various REALTOR® committees on the local, state, and national level ever since.

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Minnesota REALTORS® — Supporting YOUR Success

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As a volunteer, how has being involved with the REALTOR® Organization helped your business? As a volunteer, I was able to build relationships with REALTORS® from other brokerages and realized that even though we were competitors, we had a common interest to ensure our clients and customers were treated with the highest level of ethical business practice. I also learned how to express my opinions in a committee setting in a respectful manner, rather than trying to force others to agree to specific points-of-view I may hold. For me, the most rewarding committee work has been on the Professional Standards Committee, for which I have been privileged to serve since the mid 1990’s. As long as REALTORS® keep in mind that the clients’ interests come before all others, their business will grow exponentially and become immeasurably more rewarding. A personal zenith in my volunteer work was when I was honored by MAAR in 2013 with their REALTOR® Of The Year award. That award made me realize how blessed I am to be a REALTOR® — the real estate business has no equal in allowing for individuals to reach their own pinnacle of success! What is the biggest challenge facing real estate agents today? I see technology being both the biggest challenge but also the biggest opportunity for today’s REALTOR®. Over the years, there has been a huge shift in how information regarding the real estate transaction is shared/ distributed. Listing/sales data has gone from 100% proprietary to almost 100% just the opposite. The dizzying amount of information available to the public is a huge benefit to the REALTOR®, in my opinion. The key to the future success of the REALTOR® will be focusing on being in the center of the transaction. REALTOR®

expertise in analyzing the vast amount of data related to a given transaction and presenting to clients the results in a cogent and professional package that will provide the value proposition to keep the REALTOR® relevant. As it relates to real estate, what is the importance of monitoring political activity at the local, state, and federal level? Government agencies tend to grow and take on agendas that, many times, hinder the free-market transactional environment REALTORS® enjoy working in. The REALTOR® Political Action Committee (“RPAC”) ensures that legislators who enact laws and policy that affect that freemarket environment are aware how the REALTOR® Party stands on those issues. As an Organization, the REALTOR® Party is unique in that it supports both Republican and Democratic legislators with financial contributions that are almost 50%/50% to each of the parties. No other major political action committee comes close in the bi-partisan support the REALTOR® Party provides. RPAC carefully monitors legislative initiatives on all government levels so our members may have all of the tools needed to transact their business with the least amount of red tape. If you have not already done so, please make an investment in RPAC today! If you did not have to join the REALTOR® Organization in order to obtain MLS services, would you still be a REALTOR® member? Yes! The largest privilege of REALTOR® membership is the obligation to subscribe to the REALTOR® Code of Ethics. Since 1913, the REALTOR® Code of Ethics has guided REALTORS® in dealing with their peers and their clients to create an continued on next page

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environment of honesty and good-will that I think is unparalleled in other industries. The REALTOR® Code of Ethics is what sets us apart from non-member licensees.

If you could meet any historical figure, who would it be? Henry Ford. I would love to talk shop with one of the original “car guys.”

What makes a good REALTOR®? A good REALTOR® remembers that one does not need the sale for oneself, but instead wants the sale for another. A good REALTOR® also makes a game out of it and has some fun along the way!

Which words or phrases do you most overuse? I should have…

What is something you wish your clients knew? For my sellers, price cures EVERYTHING! Are there any interesting or memorable properties or clients you have dealt with? I had a transaction where the client took out seven subordinate mortgages (eight including the first mortgage) in order to qualify for the purchase. The seller, loan officer, and myself collaborated extremely well to make it all come together. The title company who closed the sale had offices in all fifty states, and an email was sent out by the headquarters to all offices stating eight mortgages was a record-setting closing.

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What’s your ideal vacation? Attend the F1 race in Monte Carlo (on bucket list!) If you could start a nonprofit, what would be your cause? Provide transitional housing to single heads-of-households. A safe domicile fosters stability for the family. What are you most proud of in your life? My wife, Sue, and our 21-old son, Jared, who is also a REALTOR®. What career, besides real estate, would you have chosen? I always thought I would have made a pretty good psychotherapist. Oh, wait… that’s what I’ve been doing for the past 36 years. Guess I found my calling!

Minnesota REALTORS® — Supporting YOUR Success

Learn More $ Earn More

REALTOR® Series Supporting YOUR Success

Professional Development and Education play a large role in your career as a REALTOR®. Continuing to learn and evolve is part of your role in serving your clients and customers. If they can’t get the information from you, they’ll get it somewhere else. Don’t let that happen — be a part of our Learn More Earn More Series!

Each program is only $29! The programs: (All program times: 8:00am registration; program is 9:00am-Noon)

February 17th, 2016 — Expand Your Marketshare @ Maple Grove Community Center 8:00am 9:00am 10:00am 11:00am

Registration & Breakfast Keynote Session: Emerging Markets Breakout #1: Green Designation with Rebecca Olson; OR New Construction with Rob Phyle Breakout #2: TBD; OR Multi-Unit Housing/Rental Property Management

April 20th, 2016 — Show Me the Money @ Holiday Inn & Suites, Lake Elmo

Jim Marx, President of Virtual Results, is an enthusiastic and engaging speaker. He has spent his career studying the habits and expectations of the Internet Consumer. Jim teaches businesses how to WIN by using effective web design, efficient social media, SEO “magic”, and data management to drive traffic AND convert it to business.

May 25th, 2016 — Tech Talk @ Braemar Golf Course, Edina Speaker: TBD

Click HERE to register!

REsource: January, 2016

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REALTOR® Ring Day Recap! This year’s Minnesota REALTOR® Ring Day was a GREAT success! The weather was unbelievably beautiful for December in Minnesota! Thank you to all of the REALTORS®, families, and friends who donated their time and gave back to their communities on Minnesota REALTOR® Ring Day on Friday, December 4th! Congratulations to Kisti Skaar Winner, of the REALTOR® Ring Holiday Ugly Sweater Contest! (72 Facebook Likes)

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Thank you again for all your support and making it a GREAT REALTOR® Ring Day! We look forward to next year’s bell ringing! REsource: January, 2016

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CAN I TRUST YOU?

Jim Luger, CDEI Certified Distance Education Instructor, ContinuingEdExpress

You don’t have to convince me, but you do have to convince your prospective clients. According to a National Association of REALTORS® (“NAR”) study, both first-time and repeat buyers listed “honesty and integrity” as the number one quality they look for in an agent. People have learned to not take honesty and integrity for granted. Politicians lie to us, investment managers steal clients’ money, and CEOs get rich while running their corporations (and stock values) into the ground. Who can we trust anymore? The answer should be: YOU. And here are some easy ways to prove it…

Be on Time And do what you say you will do. Being dependable and reliable in small matters reassures clients that they can depend and rely on you in large matters.

Prove that You Care Focus on your clients instead of yourself. Ask about their needs, wants, and concerns, and concentrate on what they tell you. Prove that you understand by summarizing what they just said—and acknowledge their feelings. Remember the axiom: “They will care about what you know when they know you care about them.”

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Minnesota REALTORS® — Supporting YOUR Success

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Stay in Close Touch

Dress for Respect

Exceed your clients’ expectations by contacting them a little more frequently than necessary, to prove you are thinking about them. They will appreciate your attention, and they won’t have to wonder if you are concerned about them.

We all react positively to someone who is well-groomed and dresses professionally. I’ve heard agents theorize that wearing casual attire makes their clients feel more comfortable. Your greater challenge is to win your client’s respect.

Respond Quickly

Offer Testimonials

NAR studies have shown the most frequent consumer complaint about real estate professionals is for “poor communications.” That usually means their agent was slow to respond to phone calls, texts, or emails; or, worse, didn’t respond at all. When you respond to a client’s contact ASAP, you make your client feel important. Making your clients feel important tightens their loyalty to you.

Ask past clients for testimonials, and ask permission to use their name. In this new world of mistrust, consumers increasingly rely on identified peer reviews before making decisions. Post testimonials on your website or social media pages, and include them on your personal promotion materials.

20% off for MN REALTORS® members: 7/1/15-6/30/16 Salesperson & Broker Required Module: Agency, Fair Housing & Legal Update. You can enroll by going to mnrealtor.com, clicking on the “Education” tab, and selecting “Online Education.” During the checkout process, enter promo code MNARJan16 for a 20% discount. (Promo code expires January 31st, 2016.)

REsource: January, 2016

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MN REALTORS® COMMITTEE REPORTS

Strategic Thinking The Strategic Thinking Committee met on Wednesday, December 9th at the Westin in Edina. This Committee is working on coordination with three Task Forces within the Committee: Association Modeling & Trends, Shared Services, and Education/ REALTOR® Locker. With the Association looking at updating the Strategic Plan this year, this group will be working on bringing forward ideas from these three Task Forces, which also form some overlap with the Member Involvement and Professional Development Committees. Moving forward, there will be some coordination among these Committees in order to bring recommendations forward to the Finance Committee and Board of Directors this Spring. The Strategic Thinking Committee is scheduled to meet again in early February. Commercial Forms Sub-Committee The Sub-Committee discussed the Purchase Agreement: Land (NonResidential) via email in early December, and has forwarded their recommended revisions onto the full Forms Committee to discuss at its next meeting.

Executive Committee The Committee met on Wednesday, December 16th at the Minneapolis Marriott Southwest in Minnetonka. President Len Sarvela led the Meeting. The Executive Committee elected five new members to serve on the 2016 Finance Committee: Kelly Hudick, Nene MateyKeke, Patrick Paulson, David Pope, and Tom Wiener. The following reports were provided to the Executive Committee: • Financial Report • Standing Committee Report • Risk Management/ Amicus Curiae Briefs • NAR/ZipLogix Agreement The Committee approved motions to: • Recommend that the Board of Directors amend the Bylaws to establish the Professional Standards Work Group as a formal committee of the Minnesota REALTORS®; • Adopt a CEO Transition Plan as presented. The next Executive Committee meeting will be held on May 18th, 2016.

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Minnesota REALTORS® — Supporting YOUR Success

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Professional Development Committee The Committee met on Wednesday, December 16th. The Committee formed 3 subgroups:

Member Involvement Committee The Member Involvement Committee met on Monday, December 14th at the Minneapolis Marriott West in Brooklyn Park.

The Mission, Vision, and Values Subgroup drafted the following and are working to refine and tighten up the values listed: • Mission: We are committed to promoting professionalism beyond ethics to better serve our clients and fellow REALTORS®. • Vision: To have every REALTOR® exceed expectation in all areas of business. • Values: Listening to clients; communication and meeting expectations; respectfulness (punctual, timely, polite, intentional appearance of professionalism); cooperation; trustworthiness (agency); integrity (doing the right thing); honesty; competence; excellence; accountability; honor; and leadership.

1

In 2016, the MN REALTORS® are looking to update their Strategic Plan and are interested in addressing a concern that involves all REALTOR® Associations, which is Member Involvement. To address the issue on a broad scale and consider activities, programs, and messaging that serves the best interest of all members, MN REALTORS® invited the larger local association Presidents, President-Elects, and Association Executives to participate as members of the Member Involvement Committee, along with those members who applied to be on the Committee. This is not meant to exclude any association; however, in order for the group to be more nimble and productive, we’ve kept it to the larger regional centers, with the expectation that the smaller local boards have similar issues. Future meetings will include other local leaders.

2

This Committee will be a tactical Committee and will provide deliverables to the Board of Directors. The group will meet again in mid-January.

The Guidance System Review subgroup members are participating in a pre-launch beta testing of the ContinuingEdExpress’ Guidance System to offer their feedback to the developer and report back to the Committee with a review. The timeline is approximately midJanuary.

3

The Mentorship Model subgroup met to discuss various aspects of a potential model — including definition of professionalism, target market, role of the association, and goals. The next step is to get feedback from ContinuingEdExpress’ Guidance System beta testers, then discuss how to proceed.

REsource: January, 2016

Diversity Committee The MN REALTORS® Diversity Committee met on December 17th at the Minneapolis Urban League. Chairman Johnny Lee and staff provided updates on the Committee’s work with MLS accessibility fields — NorthstarMLS, WCAR MLS, and RASM MLS have all adopted the suggested features, and the SEMAR MLS and DAAR MLS have received the request memo. Current and past Committee leadership and staff also participated in two CE classes on continued on next page

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accessibly features in housing in 2015. An update was provided on the upcoming AREAA inaugural event on January 28th. Staff described and members voted to support a NAR grant request to help finance the event. The Committee also heard from Susan Dioury, MN REALTORS’® Sr. VP of Risk Management, on a recent US Supreme Court Case stemming from Texas on Desperate Impact and Fair Housing. She compared the case to a historic fair housing case that came from St. Paul in the 1990s. Staff and members also provided an update on the Homeownership Opportunity Alliance’s activities to close the gap on homeownership rates between whites and household of color.

The Committee also decided that their 2016 theme shall be Statewide Community Outreach and agreed to work with the Boys and Girls Club of America over the year on a statewide basis. This outreach will also help local associations with their Core Standards requirements. Staff and Chairman Lee highlighted a few upcoming events, such as the MLK, Jr. celebration on January 18th in St. Paul, and the Demographics CE program on February 17th via MN REALTORS®. The Committee also reviewed a few articles on the possibility of a special session to address racial disparities. The next Committee meeting is March 17th, 2016.

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REsource: January, 2016

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MN REALTORS® COMMITTEE ROSTERS Below are the rosters for the Finance and Member Involvement Committees.

FY 2016 Finance Committee

Chair: Tracie Fogelson — Coldwell Banker At Your Service Realty, Rochester Kath Hammerseng — Edina Realty, Plymouth Sheila Holley — Edina Realty, Baxter Kelly Hudick — Marathon Realty, Minneapolis Michelle Lyons —Port Cities Realty, Duluth Nene Matey-Keke — RNR Realty, St. Louis Park Patrick Paulson — EXIT Realty Metro, Minneapolis David Pope — Coldwell Banker Burnet, Apple Valley Tom Rehman — Coldwell Banker Burnet, Edina Len Sarvela — Real Estate Masters, Duluth John Smaby —Edina Realty, Edina Tom Wiener —Cardinal Realty, Oakdale Patty Zuzek — Coldwell Banker Burnet, Apple Valley

FY 2016 Member Involvement Committee: Chair: Michelle Lyons — Port Cities Realty, Duluth ice-Chair: Rod Helm — Coldwell Banker Burnet, Minneapolis V

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Ann Anderson — Century 21 Kandi Realty, Willmar Karen Becker — Southeast Minnesota Association of REALTORS®, Rochester Sue Blumhoefer — West Central Association of REALTORS®, Willmar Bob Clark — Lynskey Real Estate, Stillwater Maranda DeSanto — Duluth Area Association of REALTORS®, Duluth Rich Draheim — Weichert Community Group, Mankato John Fridlington — St. Paul Area Association of REALTORS®, St. Paul Tami Gunn — RE/MAX Results, Rochester Deb Hansen — REALTOR® Association of Southern Minnesota, North Mankato Linda Harris — Century 21 Kandi Realty, Willmar Brandon Johnson — Coldwell Banker Crown Realtors, Alexandra Carrie Lee — Keller Williams Professionals, Baxter Kyle Litwin — Edina Realty, Minneapolis Cotty Lowry — Keller Williams Integrity, Minneapolis Judy Shields — Coldwell Banker Burnet, Minneapolis TJ Simon — Wolff & Simon Real Estate, Park Rapids Kelly Travis — St. Cloud Area Association of REALTORS®, St. Cloud Bill Wald — Minneapolis Area Association of REALTORS®, Edina Janie Weston — Greater Lakes Association of REALTORS®, Baxter Kanada Yazbek — Better Homes and Gardens Real Estate, Chanhassen

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BUILDING HOMES NEAR EAGLES’ NESTS

www.fws.gov

Q A

Are bald and golden eagles and their nest sites still protected by any federal laws? Yes, both bald and golden eagles (and their nests) are protected under the Migratory Bird Treaty Act and the Bald and Golden Eagle Protection Act (“Eagle Act”). Both laws prohibit “take” and possession of eagles, their parts, nests, and eggs. Under the Eagle Act, “take” includes disturbance.

Q A

Is there a legal definition of what actions may ‘disturb’ an eagle? “Disturb” is defined by regulation 50 CFR§ 22.3 as “to agitate or bother a bald or golden eagle to a degree that causes, or is likely to cause, based on the best scientific information available: • Injury to an eagle; • Decrease in its productivity by substantially interfering with normal breeding, feeding, or sheltering behavior; or

• Nest abandonment by substantially interfering with normal breeding, feeding, or sheltering behavior

Q

What are the National Bald Eagle Management Guidelines, and how do they apply to me building a cabin near an eagle nest? The National Bald Eagle Management Guidelines (2007) are intended to help landowners, land managers, and others who share public and private lands with bald eagles identify and minimize disturbance to bald eagles, thereby benefiting bald eagles while protecting landowners. The U.S. Fish & Wildlife Service (“Service”) strongly encourages adherence to these guidelines around active nests for bald eagles. The guidelines can be found at www.fws.gov/southdakotafieldoffice/ NationalBaldEagleManagementGuidelines. pdf.

A

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Minnesota REALTORS® — Supporting YOUR Success

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Q A

When is the eagle breeding season in Minnesota/Wisconsin? While eagle nesting dates can vary based on location, the eagle breeding season is February 1–July 15. These are the earliest and latest estimates — eagles may return later in the year or young may fledge earlier. The eagle breeding season begins when eagles begin tending their nest, even if no eggs are laid yet.

transactions, and recommends buyers and sellers consult their real estate agents and/or real estate lawyers. (NOTE from MN REALTORS®: As a real estate licensee, you must disclose all material facts of the property.)

Q

I am interested in buying a piece of property, but it is near a bald eagle nest. Will I be able to build a home there? Will there be restrictions on my everyday activities? The Service does not dictate whether a landowner can build a home near an eagle nest. Rather, the Service makes recommendations on ways to avoid impact to bald eagles based on distance of the proposed activity to the nest and the time of year eagles are active.

Q

Do I need a permit to buy or sell land with an eagle nest on it? Does a seller have to disclose the presence of an eagle nest on land they are selling? Because landownership does not impact eagles (or lessen their protection), eagle disturbance permits are not needed to buy or sell land containing an eagle nest. Permits are recommended if an activity is planned that may disturb eagles. The Eagle Act makes no specific mention of whether a seller should disclose the presence of an eagle nest on their property to potential buyers. The Service does not provide advice on real estate

A

A

Q A

How do I avoid disturbing eagles at their nest? To avoid disturbing eagles at their nest, please use the following guidance based on your activity, distance to the nest, and time of year.

Distance

Time of Year

Activity

Recommendation

>600 feet

Any time

All

No permit needed

330-600 feet (similar activity has occurred within 330 feet)

Breeding season

All

Permit may not be recommended if eagles have a demonstrated tolerance to disturbance

330-600 feet (no similar activity with 330 feet)

Breeding season

All

Permit recommended