+Õ iÌ ÞÊ,i Ûi`ÊvÀ Ê/ iÊÀ` >ÀÞmyrasm.com/files/magazine/SRMagDec0607051820015.pdf · SALES EFFORTS EARN $20,000 BONUS FOR LOCAL REALTORS Orchid Beach Club Applauds Two

SALES EFFORTS EARN $20,000 BONUS FOR LOCAL REALTORS

Orchid Beach Club Applauds Two Top Performing Realtors

Owner’s Club Dominica Gulf Terrace features an Al Fresco Kitchen

A limited number of beachfront residences remain from the high $2 millions.

Experience the enchantment for yourself. Contact us today to schedule your private tour.Toll-Free: 877-388-2050 • 941-388-2050 • www.orchidbeachclub.com

Broker cooperation welcomed

Michael Saunders & CompanyLicensed Real Estate Broker

Prices & features subject to change without notice. Offer void where prohibited by law.ORAL REPRESENTATIONS CANNOT BE RELIED UPON AS CORRECTLY STATING REPRESENTATIONS OF THE DEVELOPER. FOR CORRECT REPRESENTATIONS, MAKE REFERENCE TO THIS ADVERTISEMENT AND TO THE DOCUMENTS REQUIRED BY SECTION 718.503, FLORIDA STATUTES, TO BE FURNISHED BY A DEVELOPER TO A BUYER OR LESSEE.

Lisa and Kelly of SKY Sotheby’s International Realty successfully brokered a sale on the Dominica residence within the exquisite Orchid Beach Club located on Sarasota’s Lido Key prior to the Oct. 31, 2006 deadline. Offering dramatic views of Gulf waters, white sand beaches, the sparkling bay and surrounding preserves, Orchid Beach Club provides residents with exclusive membership privileges in its Owner’s Club, concierge services and floor plans that embrace spacious master and guest suites, terraces and gourmet kitchens. Don’t let your clients miss the chance to live in this private island enclave.

“Orchid Beach Club is the ideal place for people to enjoy exquisite Gulf views, a luxury lifestyle and a beachfront home that has every comfort, convenience, upgrade and amenity imaginable.”

– Kelly Quigley of SKY Sotheby’s International Realty

“Our clients were immediately drawn to the lovely setting, natural beauty of Lido Key, great dog walking area and the elegant interiors of Orchid Beach Club. The happiness and excitement experienced by our clients is very rewarding for Kelly and me.”

– Lisa Marx of SKY Sotheby’s International Realty

ANOTHER EXCEPTIONAL COMMUNITY BY U.S. ASSETS GROUP

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Sarasota Realtor®

Volume 3, Issue 12 December 2006

Sarasota Association of Realtors®, Inc.3590 South Tuttle Avenue Sarasota, Florida 34239 Phone: 941/923-2315 FAX: 941/923-0191

www.sarasotarealtors.com

2006 OfficersPresident

Felix Power Coldwell Banker Residential R.E.

President-Elect Joe Hembree

Hembree and Associates Inc.Secretary

Kris Niehaus Century 21 Advantage

Treasurer Helen V. Sosso

Prudential Palms RealtyImmediate Past President

Judy Schomaker RE/MAX Properties

Chief Executive Officer Kathy Roberts

Mission StatementThe Sarasota Association of Realtors®, Inc., is a professional trade association committed to providing quality programs and services for its members; enhancing the image of its members in the community; upholding the Realtor® Code of Ethics; planning for the future needs of the organization; and to protecting private property rights.Sarasota Realtor® is published monthly by the Sarasota Association of Realtors® Inc.

Editorial StaffDirector of Communications

Ray PorterDirector of Member Services

Dan AndrewsDirector of MLS Information Systems

Jesse SundayDirector of Professional Development

Catherine McCaskillProduction

Serbin Printing, Inc.Sarasota Realtor® Advertising:For information on advertising rates and deadlines, contact Ray Porter at 941/328-1168 or [email protected]. Subscriptions: The annual dues of every member of the Sarasota Association of Realtors®, Inc., includes a one-year subscription to Sarasota Realtor® magazine. A yearly subscription for Sarasota Realtor® magazine is available to non-members for $25, plus Florida sales tax.Editorial ideas and manuscripts are welcomed. Byline articles and columns express the opinions of the writers and do not necessarily reflect the policies or sentiments of the Sarasota Association of Realtors®, Inc. All submitted copy is subject to editing.2006 Copyright© by the Sarasota Association of Realtors®, Inc. All rights reserved. Reproduction in whole or in part without written permission is prohibited.

6 2006InReviewOutgoing SAR President Felix Power reviews the year’s many accomplishments and challenges as we move into 2007.

10 SARMembersDoCareThis year nearly half of SAR’s membership contributed to the Realtors Political Action Committee (RPAC). Our participation rate surpassed 45 percent this year. Lee Brown explains why our membership’s participation is so vital.

16 ForecastsandTrendsThe CID and the International Council hosted presentations by Dr. Lawrence Yun, noted national economist from the NAR, and his outlook for 2007 and beyond could invigorate the local market.

26 GenerationalMarketingAre you looking at all the opportunities to market to Generation X, Generation Y, and all the generations available? Each market segment has unique differences and knowing these differences can directly impact your business.

30 SouthoftheBorderMexico has joined the international family of Realtors® following an historic agreement with the NAR. The accord should make doing business with our southern neighbors easier, and less cumbersome.

Ineveryissue10- Governmental Affairs Update

14- Property Appraiser

16- CID Update

18- Sales & Listing Statistics

22- Education Programs

27- Rookie Corner

31- WCR News

32- Membership News

33- Ethics in Action

37- International Real Estate

40- Calendar of Events

DID YOU KNOW? The National Association of Realtors® began keeping statistics on housing and property values as early as 1909. Its first statistical department was formed in 1917, and the first research department in 1920.

SarasotaR E A LTOR ®M a g a z i n e

“The official monthly magazine of the Sarasota Association of Realtors®”

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4 December 2006 Sarasota Realtor Magazine www.sarasotarealtors.com

IMPORTANT SAR DUES INFORMATION – PLEASE READ CAREFULLY

December 2006 Dues Billing For the Who, What, When, Where, Why’s regarding electronic online dues payments, please visit the SAR website at www.sarasotarealtors.com and click on the DUES INSTRUCTIONS link on the right-hand side of the page, located under the “Dues and Account” link.

Due Dates, Late Fees, and MLS Suspension:Due: Dec. 15, 2006; Past Due: Jan. 15, 2007, 5:01 p.m. $50 late fee assessment on open balances as of Jan. 15, 2007, 5:01 p.m. (No Exceptions). Suspension of MLS services on accounts with unpaid MLS fees as of Jan. 15, 2007, 5:01 p.m.

Payment Methods: ELECTRONIC PAYMENTS ONLY!Two payment options:

1. Deduct directly from your checking account via:a. Debit card (MC,V) – the easiest way to have the payment deducted from your

checking account. b. Electronic check – use same information as on your check.

2. Credit card (MasterCard, Visa, or American Express).

Instructions for all payments Pay online through our safe, always-available internet site

go to www.sarasotarealtors.comclick on Dues and Account link sign in with MLS ID/Login or SAR Member Number (from invoice) or FL. R.E. License Number (dropping preceding letters) at the bottom of Member Account Inquiry screen, click on “To View and/or Pay Invoices”online charges will appear on your bank and credit card statements as “Realtor Association/ML”

or

Come to the SAR offices and use our computer in the library which is programmed to open directly into the log-in screen and has easy instructions located at the workstation for your use.

Once payments are made online, they are updated to your account within 72 hours. We encourage you to go online to check the status of your account.

When and Where are dues invoices sent?

The Dec. 15, 2006 Dues Statements should have arrived in brokers’ offices by November 10th, for distribution to individual agents. Individual dues invoices are now available at www.sarasotarealtors.com , where they can be viewed, printed, and/or paid. On our main page, click the “Dues and Account” button. In order to access, each member will need either his/her MLS ID/Login or SAR Member Number (from invoice) or FL. R.E. License Number (dropping preceding letters).

What will be included on this dues billing?

Annual dues: State, National, IDX Data Feed (if applicable), and CID (if applicable).Semi-annual dues: Local, MLS, voluntary RPAC, and Suncoast CIX (if applicable).

www.sarasotarealtors.com Sarasota Realtor Magazine December 2006 5

tRealtor Professionalism … Raising the Bar

Coming into the new year, we thought this would be a good time to review our progress on the many goals we set for 2006:

In Member Services, we worked hard to expand the benefits offered. We made great progress expanding our quality education opportunities to help our members strengthen and broaden their professional skills and abilities. I believe we were more pro-active at learning how to adjust to the changing market, offering specific courses and seminars designed to help Realtors® in the transition from a sellers market to a buyers market. Soon we will be able to view the SAR Marketing Campaign encouraging our customers that this is the time to buy. Working in concert with the NAR national campaign recently launched, our members’ customers will hopefully get the message that this is the time to buy.

The Technical Services team made tremendous strides with the launch of the new MLXchange MLS system. Many training courses have been conducted, and the vast majority of comments received were highly positive and complimentary of the new technology. We will launch the regional data-sharing system FGCA (Florida Gulf Coast Alliance) in early 2007, and the discussions moving us toward MLS regionalization will continue during the coming year We aimed to exceed our goal to provide you with systems and programs that will make it even easier for you to do business within and outside of our traditional service boundary, and I believe we hit our mark!

Our continuing and unwavering aim is to build friendly business alliances with our neighboring associations to achieve unencumbered MLS services.

Our International Education institutes focused on doing international business at home. Along with the coveted CIPS institute courses, your IRC (International Real Estate Council) presented seminars on the Ukraine & Eastern Europe, Chinese & Asian cultures, “the British are Coming”

and South Africa. We culminated this effort with the Nov. 21 presentation by NAR economist and research specialist, Dr. Lawrence Yun, who provided a highly informative and well-received program on how international buyers greatly enhance our market opportunity. SAR’s IRC continues to strengthen its market development ties with FNAIM, the Paris Association of Real Estate Professionals and AEGI, the Spanish Association of real estate professionals. Business networking and direct customer opportunities are available to participating SAR members. SAR also enjoys its support of the Sister Cities Program and the new IBC (International Business Council) initiative of the Greater Sarasota Chamber of Commerce. Through the work of SAR members, GSCC has come to understand the extraordinary opportunities that are afforded in the international markets. Can you still afford to miss adding this diverse business option to your business plan?

The needs assessment of the SAR building will continue in 2007. In 2006, in response to market conditions we decided to find alternate, temporary solutions to the association’s space needs. No perfect solution was found, and your Leadership Team will continue to review the best possible options.

The Commercial Investment Division (CID) is growing by leaps and bounds, and the diverse geographic origin of members is meeting the CID/Suncoast CIX objectives. The Suncoast CIX commercial information exchange, provides our commercial Realtor® members with an incredible tool for marketing property listings across non-traditional geographic markets. CID leaders are now taking an active role in the SAR Board of Directors. Joe Hembree will take office as president for 2007, and 2006 CID President Steve Ross will serve as a Director on the SAR board.

In Service To Our Community, your Association will continue to take pro-active positions on initiatives and issues that particularly concern us as Realtors®.

2006 was a year of challenges, and opportunities

Continued on page 38

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Editor’s Note: 2006 SAR President Felix Power hands over the reigns to 2007 SAR President Joe Hembree on Dec. 7. Power led the Association during a time of market transition, technological services innovation and expansion, challenging public policy initiatives, development of public information systems and expansion of SAR member benefits and member communications. The visions Power had for 2006 were largely accomplished, with the hard work and diligence of the all volunteer SAR Board of Directors, Executive Committee, the Committee Leadership Team, Committee members and an incredible professional staff:

This year has given us a unique perspective on the many diverse facets of the Sarasota

Association of Realtors®, and how the organization assists and serves the needs of the largest

professional trade group in our community.



Construction on the memorial kicked off this week and is expected to be completed in 2008. As a $1 million-level donor, NAR will have its name engraved on the memorial and will hold a seat on its executive leadership cabinet. The Realtor® logo will be featured on the memorial’s web site, and the association will be recognized in ads and in a book about the memorial. The contribution reinforces NAR’s commitment to fair housing and diversity.

The Board of Directors meeting capped off a historic Realtors® Conference & Expo, held in New Orleans just 15 months after Hurricane Katrina left much of the city underwater. Roy Bernardi, deputy secretary of the U.S. Department of Housing and Urban Development, attended the meeting to thank NAR for keeping its promise to stay in New Orleans and for making such a major dent in local rebuilding efforts.

More than 1,500 Realtors® participated in rebuilding activities during their stay in New Orleans, donating nearly 8,500 hours of their time.

At the NAR Board meeting, in addition to approving the King memorial donation, directors took wide-ranging actions to keep the association well-positioned for changes in the marketplace and in step with the new political environment in Washington.

Exclusive-AgencyListingsontheWebTo address concerns raised by the U.S. Department of

Justice and the Federal Trade Commission over the policies of some MLSs on the HYPERLINK “http://www.realtor.org/RMODaily.nsf/pages/News2006101301?OpenDocument” \t “new” display of exclusive-agency listings HYPERLINK “http://www.realtor.org/RMODaily.nsf/pages/News2006101301?OpenDocument” on public web sites, the board amended NAR’s Internet Display (IDX) Policy.

The amendment requires MLSs to include all listings authorized for distribution in IDX feeds. Participants may then select which listings they wish to display on their web sites.

Additionally, MLSs that operate a publicly accessible web site or that transmit participants’ listings to third-party aggregators must include all listings in the data feed. The only listings that may be excluded are those that give the property’s address or provide a graphic display of where the property is located and display a For Sale By Owner sign or other notice that indicates the seller is soliciting direct contact from buyers.

However, the policy makes it clear that MLSs are not required to operate a public web site or to give their data to third-party real estate web sites.

ProfessionalStandardsBolsteredA number of new professional standards were approved at

the meeting, including one that requires members to give customers advance notice if customer data may be shared with or sold to third parties. Another new rule says that members must present a “true picture” of where they’re directing customers on the web and must not use Internet tools to deceptively direct consumers from their intended online destination. Other new standards involve the handling of arbitration proceedings.

On the association front, a new rule says that local and state Realtor® associations may do business under an alternative name, known as a “DBA” identity. However, the associations must gain NAR’s approval for the DBA. After some debate, the board voted that the rule would be retroactive.

rRealtors® will have a prominent,

permanent place at the new Martin

Luther King Jr. memorial on the

National Mall in Washington, D.C.,

thanks to a $1 million contribution

to the project approved in early

November by the National Association

of Realtors® Board of Directors.

Donation for MLK memorial, MLS policies top NAR actionsBy Kelly Quigley and Robert Freedman, REALTOR® Magazine Online

Continued on next page


ExpandingOnlineReachThe board approved spending $2.25 million in cash and

$2.25 million in in-kind contributions for a promotion to help maintain Realtor.com as the No. 1 home search site on the Internet. Funds won’t be spent without the Leadership Team’s approval of the final campaign.

Another $200,000 was approved to develop a prototype of a consumer outreach initiative to position NAR as the major source of online information for home buying and selling.

Mike Long, CEO of Move Inc., spoke about how Realtor.com is evolving to incorporate the principles of Web 2.0 – an umbrella term for the next generation of online tools and services. Realtor.com will be revamped with 3-D and bird’s-eye-view mapping technology, new editorial content, and added flexibility for real estate practitioners to post information about each listing.

Long stressed that all listings will continue to provide complete attribution to the listing broker or real estate practitioner, and that Realtor.com will not commingle real estate practitioners’ listings with FSBO listings. That’s not the case with some other popular web sites, such as Yahoo! Real Estate and Google Base, he said.

FederalpolicychangesThe board approved a number of federal policy positions:

• Employer-Assisted Housing: NAR will support income tax–based incentives for employer-assisted housing programs as part of its housing affordability strategy.

• Disaster Insurance: The board decided that the goal of any federal natural disaster program should be to promote availability and affordability of insurance for residential as well as commercial properties. A bus tour of the New Orleans area during the Realtors® Conference & Expo “brought to light the importance of the availability and affordability of insurance in disaster-prone areas,” John Rinehart, chair of the Land Use, Property Rights, and Environment Committee, told board members.

• Business Issues: NAR will push for exclusion for businesses in any federal data privacy legislation and will oppose federal preemption of state data privacy laws. It also will advocate for creating a non-working retirement residency card for foreign nationals who are at least 55 years old and own U.S. property.

SwiftResponsetoDisastersThe board approved the Disaster Planning and Mitigation

Task Force’s plan to create a disaster response “strike team” that would be mobilized after a disaster to determine if and how NAR should provide recovery support. The plan also calls for NAR to identify off-site data storage facilities and negotiate discounted rates for members.

StrongFinancialFootingNAR Treasurer Bruce Wolf said the association is in top

financial condition, with $87.5 million in dues income for 2006 and a fully leased D.C. headquarters building, among other strong indicators. “The bottom line of NAR is in better shape than it ever has been,” said Wolfe.

For 2007, the Board approved a budgeted membership of 1,230,000, a decrease of 10 percent from the current level of 1,366,000, which reflects the slowdown in markets across the country.

MoreEducationonTICsThe Realtors® Commercial Alliance recommended that

NAR provide education and support to state associations as they work with state real estate regulators to assure that the interest of real estate licensees, buyers, and sellers, are protected in the emerging tenant-in-common marketplace.

PoliticalFundraisingExceedsGoalsRPAC Fund-raising Chair Adorna Carroll of Newington,

Conn., reported that as of Oct. 31, RPAC had raised a new record of $7.04 million, easily topping this year’s goal of $6.25 million. All 54 state and territory associations exceeded their goal. Collectively, more than $23 million was raised for national, state, and local RPAC efforts.

The funds were put to good use, as 92 percent of all political candidates that NAR supported were victorious, said RPAC Committee Chair John Harrison. “We’re the most bipartisan PAC in the country, and we’re proud of that.”

TaskForcesDriveChangesThe Real Estate Services Task Force provided the Leadership

Team with a report that recommends turning the Large Broker Advisory Council into a formal real estate services advisory board that will address issues important to large brokers, including non-brokerage services such as mortgage lending, settlement services, and insurance.

The board postponed consideration of recommendations by the Election Reform Task Force until a public forum can be held at the 2007 Board of Directors meeting; the task force is looking at ways to make the nominating process more objective and encourage more people to run by reducing obstacles to candidacy like financial and time commitments.

REALTOR®LeadersHonoredThe 2007 Distinguished Service Award was presented to

Joseph K. Funkhouser II, from Harrisonburg, Va., and Robert J. Arkley from Waterbury, Vt. The 2006 William R. Magel Award was presented to Malcolm Young, chief executive officer of the Louisiana Association of Realtors®.

The Nominating Committee recommended the following slate of NAR officers for year 2008: president, Richard Gaylord, CRB, CRS®, Long Beach, Calif.; first vice president, Vicki Cox Golder, CRB, Tucson, Ariz.; treasurer, James Helsel Jr., CCIM, CPM, Lemoyne, Pa. The committee is inviting candidates for the post of president-elect.


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s SAR members strongly demonstrate the capacity to care

Decades ago – and I won’t say how many – in the summer between my junior and

senior year of high school, I was fortunate enough to be selected to attend the

American Legion sponsored Boy’s State camp in my native state of South Dakota.

It is a week long educational camp that employs the learning tool of a mock election

for various fictional offices. There was a Girl’s State week as well, but they met separately

and at a different location as I don’t think the word co-ed had been invented way back then.

By Lee Brown, Governmental Affairs Director

The week is primarily spent role-playing the electoral and legislative processes in a fictional state – hence the name. It is meant to expose and hopefully inspire the high school aged representatives to appreciate and later participate in their community’s public service activities. A noble event sponsored by some of the very people that fought for the freedoms we studied.

Gaining and holding the attention of hundreds of teenagers with the subject of politics and government is no small feat for the volunteer members of various American Legions who organize and chaperone the week’s events. I will admit that enough years have now passed that I have forgotten a lot of what occurred that week. But there is one moment that is still branded in my memory.

The climaxing event for the week is the election of a Governor for the fictional Boy’s State. Tradition holds that the previous year’s winner gives a keynote address to the current year’s attendees prior to the election. During his speech, the previous year’s Governor hit on a simple but powerful theme.

Pushing aside and thus into perspective all the debates, street corner shouting, sign waving, speech giving, money contributing, advertising and the multitude of other seemingly endless activities that accompany our nation’s election process, he said it was all really about just one thing – giving a damn. If we took nothing else away from that week’s events he asked that we just go home and start giving a damn about things.

All these years later, I still remember the moment when he uttered those words to this otherwise

restless kid. For some reason it caught me cold, as if everything my parents had faithfully taught through their examples and lessons suddenly made sense. Unfortunately, throughout my adult years I can’t count the number of people that I have encountered who clearly don’t give a damn about anything. Mistakenly, they have somehow convinced themselves that this makes them cool, as if they will fit into the masses easier.

Fortunately, the SAR membership is filled with people who DO give a damn. This year nearly half of SAR’s membership contributed to the Realtors Political Action Committee (RPAC). Our participation rate surpassed 45 percent this year. Those contributors in turn collectively raised more than $96,000 – that’s 152 percent of our goal!

In Florida, nearly 90 percent of the candidates supported by RPAC won their general election campaign. In the Sarasota County area alone, RPAC dollars were contributed to help Realtor®-friendly candidates running for various offices on the School Board, County Commission, County Charter Review Board, and area Legislative and Congressional seats.

To those that cared enough about their profession to contribute to RPAC, a hearty thank you. Whether or not your particular choice won in the recent election, as a Realtor® you were definitely a winner this year!

To those who have chosen not to contribute to RPAC, I hope that you reconsider. And the next time you are asked, please contribute.

For more information, contact Lee Brown at 941.328.1159 or by e-mail at [email protected]



Property insurance solutions needed now

ExistingBuildingsLast year’s legislative initiative to create

My Safe Florida Home was an important commitment to reduce damage to structures. While the program is still in the beginning of its implementation, it shows great promise. However, the progress of the program should be closely monitored and improved based on program success.

Specific recommendations are as follows: 1. Continued funding of the My Safe Florida

Home program; 2. Oversight by construction and insurance

industry to facilitate streamlining;

and 3. Concentrate program activities on Citizens’ policyholders. Insurance incentives will continue to play an important role for homeowner mitigation activities.These mitigation activities can be enhanced through the

home rating system currently under development. The home rating system should contain the following attributes:

1. Have quality control mechanisms to assure accuracy of the assessment;

2. Have a rating scale that provides flexibility such as 1-to-100;

3. Provide the homeowner with effective mitigation options;

4. Provide a holistic analysis of mitigation solutions, i.e. the whole mitigation fix is greater than the sum of its parts;

and 5. The rating system should ultimately replace the current credits system.

Specific recommendations are as follows:1. Continue development and refinement;2. Continue oversight by existing groups;

and 3. Analysis of the rating system as a viable replacement for current insurance credit system.

BuildingBackBetterA great opportunity exists following the destructive aftermath

of a natural disaster—the ability to build Florida’s communities back better. However, the information and education of those industries involved in this effort must be in place prior to the event.

The key will be the dissemination of mitigation opportunities to contractors and home owners to educate them of these opportunities. The not-for-profit Disaster Contractor Network (DCN) was established four years ago as a tool to facilitate rebuilding efforts after a natural disaster. Four trade groups, the Associated Builders & Contractors of Florida, Inc.; the Associated General Contractors; the Florida Home Builders Association; and the Florida Roofing & Sheet Metal and Air Conditioning Contractors Association, in partnership with Florida State University, established www.dcnonline.org. This web site acts as a clearinghouse for contractors who are able to perform repairs, suppliers who have needed building materials, and consumers who need construction repairs after a hurricane.

While the DCN has been in existence for four years, it was only first activated during the 2005 hurricane season. FEMA activated DCN and space was provided in the Emergency Operations Center for a network liaison.

The DCN received:

1. Over 140,000 hits during the 2005 hurricane season;

2. More than 10,000 contractors and suppliers posted availability;

and 3. Forty percent of the consumers who visited the site were able to locate contractors to perform repairs.

FEMA was extremely pleased with the performance of DCN. President Bush praised the DCN during a 2005 speech and

PART 2

Editor’s Note: Several groups have banded together to form the Property Insurance Reform Coalition in order to seek meaningful property insurance reform in Florida, including the Florida Association of Realtors®, the Florida Home Builders Association, the Florida Association of Insurance Agents, the Florida Bankers Association, the Mortgage Bankers Association of Florida, and Florida Apartment Association. The Florida Legislature could tackle this issue which is so vital to the real estate industry in a special session this month. This is the final part of a 2-part series on the PIRC report and recommendations (the full report is now posted on www.sarasotarealtors.com).

Continued on next page


called it a model that other states should implement. FEMA has recognized the value of DCN and has expanded it to several other states.

While the DCN’s performance exceeded expectations, the concept needs to be expanded and improved. Regular funding needs to be provided to stabilize the service DCN provides. The goal will be to expand its applicability to all involved in post-disaster design and construction and strengthen the usefulness of this network for consumers and government (see: http://www.dcnonline.org).

Specific recommendations include:

1. Further develop and improve the construction industries through the BASF, Inc., and the DCN in the emergency management system;

2. Develop relationships between the above groups and the insurance companies to distribute mitigation information;

and 3. Assure that lenders retain appropriate control of insurance proceeds for mortgage properties as an essential component of the rebuilding effort.

RegulatoryReform:Eliminatingbureaucraticandregulatorybarrierstonewinsurancecapital

Members of PIRC recognize that capacity is part of Florida’s problem. Capacity can be addressed partially by attracting existing capital, which is now being allocated elsewhere. To some extent this means helping insurance companies to become certified here, rather than discouraging them from doing so.

Florida has a bad reputation as far as its insurance regulatory climate, which should be remedied in three prime ways:

1. Change both the laws and the regulations that impose undue burdens on insurers in favor of a more competition-friendly version of regulation. In all matters, and wherever possible, defer to competition as the best regulator and eliminate the provisions that may be most subject to political “winds” or electioneering.

2. Since many carriers not currently certified to do business in Florida offer other lines of business, profit potential in those other lines is material to decisions regarding capacity allocation to Florida. Outmoded concepts such as excess profits laws and unfriendly tort concepts should be purged from our system as a means of attracting more insurers who offer “property” coverage as part of a broader portfolio.

3. Have as part of the overall goal of the Department of Financial Services the public relations mission to seek out investment capital and to publicize the willingness of Florida to assist with certification.

Specific Recommendations:

1. Rate and Form Approval Process – The OIR should review and approve rate filings on a more expedited basis. The rate and form approval process should allow insurers more flexibility in making rate changes and revisions to

policy language. In addition, the rate approval process should place the burden on the regulator, in all cases, to show beyond a reasonable doubt that a proposed rate is excessive, inadequate, or unfairly discriminatory. Finally, insurers should have the freedom to charge rates, without OIR approval, as long as those rates are lower than the residual market rate for the same risk. As a general matter, the ratemaking process should move toward deregulation and should simply allow competition to stabilize rates.

2. Rate Hearings – Repeal the requirement for mandatory public hearings for rate increases in excess of 15 percent. The OIR already has the authority to hold such public hearings any time it deems appropriate. This will save state resources since, typically, these hearings are not well attended. At the minimum, the threshold at which mandatory hearings should be conducted should be increased to 25 percent (the threshold prior to the 2005 session).

3. Cost of Reinsurance Reflected in Rates – The cost of reinsurance to carriers, whether purchased from a parent company or from an outside source, should be able to be reflected in the rates charged by those carriers without prior approval by the OIR. This will eliminate the lag time for carriers in recouping those expenses.

4. Assessment Recoupment – Carriers typically are required to pay various assessments and then such assessments are passed along to the insureds for recoupment. With the CAT Fund assessment, carriers remit such assessment to the CAT Fund as it is collected from the insureds. We strongly recommend that this payment and recoupment method be applied to all other applicable assessments. In the alternative, if an assessment must be paid up front, carriers should at least be able to pass along the cost of capital necessary to pay such assessment in advance of recoupment.

5. Policy Disclosure Requirements – Many policyholder disclosure requirements and notices are overly burdensome to the carriers and they confuse consumers. We recommend that future changes to policy disclosure requirements be limited so as to eliminate the excessive burden (including significant IT costs) on new and existing carriers.

6. Excess Profits – The redundant layer of regulation created by having both a prior approval rating law and an excess profits law in automobile and workers’ compensation lines is deterring new capital from coming into the State of Florida. We recommend that excess profits laws be repealed since they also act as a deterrent to cost cutting and innovation by carriers.

7. Bad Faith – Provisions in Florida law allowing lawsuits alleging carrier bad faith should be repealed.

8. Holdback Provision – Repeal the provision in Florida law that requires carriers to pay full replacement cost on contents even though those contents are not replaced.

9. Claims Reporting Requirements – We recommend that burdensome claims reporting requirements imposed on carriers be eliminated.


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Here are some end of the year property tax issues to consider

This time of year is filled with celebrations leading up to New Year’s Day. As you reminisce

about the year you might want to take some time to remind your customers and clients about

their property tax status for next year - especially those who purchased homes in 2006.

By Jim Todora, MAI, CAE Sarasota County Property Appraiser

The first of the year is a very important time affecting property taxes. In order to be eligible for an exemption the property must be owned by the applicant and used for qualifying purposes as of Jan. 1, 2007. This is also the effective appraisal date and therefore property is valued as it appears on the beginning of the year. Here are a few items to consider as plans for properties are being made:

HomesteadExemptionTo receive the Homestead Exemption, new

home buyers must use the property as their permanent residence as of Jan. 1, 2007. If the owner moves into the home after the first of the year, they may not qualify for the exemption benefits.

On the other hand, if the owners establish the property as their permanent residence and move out later in the year, the exemption could remain with the property through Dec. 31, 2007. If the property was purchased in 2006 from sellers that had been receiving the Homestead Exemption, the new owner must be alert to possibly seeing a significant increase in the Assessed Value.

Once a Homestead Exempt property is sold the Assessed Value Cap, resulting from Save Our Homes, will be removed the following year. In essence, homestead property sold in 2006 will be assessed at its Market Value for 2007 even though the new buyer might qualify for the $25,000 Homestead Exemption.

AgriculturalClassificationProperty used for bona fide commercial

agricultural purposes on the first of the year, can qualify for the 2007 classified use valuation. A

qualifying property is assessed based on its actual agricultural use rather than its market value. Needless to say, this can result in a significant tax savings. However, if the agricultural use is discontinued before Jan. 1 or begins after the first of the year, the property will not qualify.

NewConstructionNew construction completed in 2006 will be

added to the 2007 tax roll. Improvements not substantially completed on Jan. 1 are not placed on the tax roll. If property is demolished or destroyed after Jan. 1 it cannot be removed from the tax roll for that year. If a calamity, such as a fire, occurs after Jan. 1, as bad as this may sound, taxes will be levied for the entire year.

InConclusionThe importance of acting timely with matters

of property tax can have significant impacts. The Homestead Exemption brings considerable benefits and in view of the momentum to change Florida’s property tax structure, especially regarding homestead property, the incentive to establish the exemption has never been greater.

Those pursuing an exemption will have until March 1, 2007 to file their application with the Property Appraiser’s Office. If they fail to meet this deadline, they could forgo considerable tax savings. If we can be of any help, please do not hesitate to contact my office.

From all of us at the Sarasota County Property Appraiser’s Office, we wish you the best of the Holiday Season and a Happy New Year!

For more information, contact the Property Appraiser’s office at 941.861.8200 or visit www.sarasotaproperty.net


cCommercial real estate sectors strong and improving: NAR Commercial real estate sectors are on solid ground with generally tightening vacancy

rates and sound fundamentals, according to a commercial market update and forecast.

Lawrence Yun, NAR senior economist, who spoke at the Nov. 21 meeting of the Commercial Investment Division of SAR, said the expanding economy is pulling up commercial sectors. “Commercial real estate is fundamentally sound, with growing jobs and expanding businesses,” he said. “We’re seeing record levels of mergers and acquisitions, and institutional investors have returned in a big way.”

Commercial lending volume is up, and delinquencies are down. High construction costs are holding speculative activity in check, but the value of newly finished construction is running nearly 10 percent above a year ago. Imports and exports remain at high levels, sustaining demand in warehouse and distribution facilities. Corporate profits are strong, providing the wherewithal for businesses to expand. Hotel occupancies have been rising this year and are the highest since 9/11.

“Nearly 4 million new jobs have been created in the past two years, which in turn is creating need for additional commercial space, notably in the office sector,” Yun said. “Wage growth is picking up, household net worth has reached a new high and oil prices have been falling - all providing a nice backdrop for continued expansion in the commercial sector.”

The commercial property rate of return has averaged in the range of 3.5 to 4.0 percent this year, according to the National Council of Real Estate Investment Fiduciaries, with a weaker performance in the retail sector.

While the present forecast is positive, potential risk factors for the future include oil prices, interest rates and higher construction

costs resulting from global economic expansion; all are being closely monitored for any market impact.

OfficeMarketWith healthy job growth, office

market vacancy rates continue to fall in most major markets and are expected to average 13.0 to 12.0 percent in 2007 - a steady downtrend since exceeding 16.0 percent in 2004. After falling in the first part of the decade, average office rents are projected to grow 7.5 to 8.5 percent next year, while new office completions are forecast in the range of 35 to 40 million square feet.

IndustrialMarketTrade and distribution continue to drive the industrial real

estate market, with a lack of suitable inventory in traditional and inland ports fueling build-to-suit facilities. A low inventory-to-sales ratio, and a low wholesale inventory-to-sales ratio, means there is a need to restock, creating the demand for more space. In addition, orders for durable goods are rising. Some urban industrial properties are being redeveloped for mixed-use and residential purposes.

RetailMarketRegional shopping centers have been impacted by

vacancies resulting from the merger of Federated and May department stores, and consumer confidence - which has been fairly steady but iffy - is dampening retail leasing. On the upside, personal income is rising and retail sales have been healthy to date.

Dr. Lawerence Yun


Florida’s Commercial Outlook• Short-term Housing Slump• Improving and Expanding Commercial

Real Estate Activity• DO NOT BET AGAINST FLORIDA

Florida’s International Outlook• 2006 corrections different from previous real

estate corrections

• Very healthy local job growth• Remove artificial demand and artificial supply brought

by short-term investors• Confidence factor – difficult to assess• Insurance problem – hopefully gets mitigated• Long-term fundamentals solid• Huge help from international buyers• Prices perk up from summer 2007• Price growth outpace national growth from 2008

Dr.Yun’sForecasts(from Nov. 21 presentations at SAR)

Download Dr. Yun’s Power Point presentations at www.sarasotarealtors.com


UPCOMINGCIDPROGRAMSTuesday, Dec. 5, 8 a.m. – Annual CID Holiday Breakfast, at The University Club. The program will be a presentation by Florida Green Consultants, a local group that has strong experience on building concepts and energy efficiency issues, including natural resource management. Speakers will include Shannon Staub, Michael Carlson and Dr. Charles Kibert, the 2006 recipient of the University of Florida’s oldest faculty award, the Teacher Scholar of the Year Award. Dr. Kibert is the Holland Professor and immediate past Director of the M.E. Rinker Sr. School of Building Construction where he organized and teaches the world’s first and the nation’s only graduate track in Sustainable Construction.

Thursday, Dec. 7, 6 p.m. – SAR/CID Annual Installation Banquet, at Michael’s On East. The board members and officers of the SAR and CID will be officially installed, followed by an evening of dining and dancing.

Com

mercia

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stmentD

ivision

Commercial Investment Division celebrates historic 2006tThe Commercial Investment Division of the Sarasota Association of Realtors®, under

the leadership of 2006 President Steve Ross, enjoyed an historic year in 2006, growing

to an all-time high of more than 360 members, launching the first commercial information

exchange (Suncoast CIX) in the area, and staging the most successful golf tournament

fundraiser in CID’s history.

“The Commercial Investment Division of the Sarasota Association of Realtors operates on the principle that a rising tide raises all ships,” noted Ross when he took over as president in January 2006. “This organization and the programs it offers are the most effective way to stay informed, updated and aware of the current business environment and how to work our specialty within it.”

The group also set the stage for an equally successful 2007 at their November general membership meeting by electing the new slate of board officers and directors for the coming year.

The new CID officers, approved unanimously, include:

OfficersDiane Lawson-President

Dan McLeroy Jr.-President Elect

Cynthia Frank-Vice President

Ken Hoskinson-Treasurer

Ken Hughes-Secretary

Steve Ross-Past President

Directors were approved by ballot process at the Nov. 21 meeting and include:

DirectorsMichael Blaikie-3 years

Jag Grewal-3 years

Janet K. Robinson- 2 years

Carl Wise- 2 years

Terry Purdy-1 year

Brian Kennelly will also continue as a director for the final year of his term

Next year’s president, Diane Lawson, has already formed a program committee to begin putting together a comprehensive list of monthly educational forums, designed to educate, inform and enlighten commercial real estate practitioners. And plans are under way to market and grow the Suncoast CIX commercial information exchange, which now boasts more than 150 members since its launch on Aug. 1.

Steve RossKen HughesKen HoskinsonCynthia FrankDan McLeroyDiane Lawson


Sales DataOctober 2006

Class Sales Average Sale Price Median Sale Price Sold Volume

Residential 268 $458,716 $302,500 $123,204,025Condo 91 $366,054 $250,000 $33,310,930

October 2005Class Sales Average Sale Price Median Sale Price Sold Volume


Listings DataOctober 2006

Class New Average List Price Median List Price Volume Listed

Residential 1609 $629,577 $399,900 $1,012,990,219Condo 682 $523,434 $334,900 $356,982,411

October 2005Class New Average List Price Median List Price Volume Listed


Note: Statistics are for the entire SAR MLS system. Figures include some listings in Manatee, Englewood, Venice and other areas.

Residential Sales Summary

2 – 3 4+ CONDO TOTAL PRICE BDRMS BDRMS BDRMS CO-OP UNITS

$99,999 & UNDER 5 1 0 3 9

$100,000-199,999 11 12 1 28 52

$200,000-299,999 24 60 11 23 118

$300,000-399,999 6 34 9 11 60

$400,000-499,999 2 19 14 7 42

$500,000-749,999 0 15 18 9 42

$750,000-999,999 0 6 3 6 15

$1,000,000-1,499,999 2 5 2 1 10

$1,500,000-1,999,999 0 0 0 2 2

$2,000,000-2,499,999 0 0 2 0 2

$2,500,000-2,999,999 0 0 1 0 1

$3,000,000-3,999,999 0 0 1 1 2

$4,000,000-4,999,999 0 1 1 0 2

$5,000,000-9,999,999 0 0 2 0 2

$10,000,000 & UP 0 0 0 0 0

**TOTALS 50 153 65 91 359

TOTAL DOLLAR VOLUME TOTAL DOLLAR VOLUME TOTAL HOME SALES SINGLE FAMILY CONDOMINIUM DOLLAR VALUE $123,204,025 $33,310,930 $156,514,955


October 1 to October 31, 2006SALES

SALES as ofOct. 31 2006

Residential Sales Summary Year to Date

2 – 3 4+ CONDO TOTAL PRICE BDRMS BDRMS BDRMS CO-OP UNITS

$99,999 & UNDER 25 4 0 12 41

$100,000-199,999 159 152 17 342 670

$200,000-299,999 271 698 91 477 1537

$300,000-399,999 170 484 130 218 1002

$400,000-499,999 90 292 146 104 632

$500,000-749,999 44 297 219 260 820

$750,000-999,999 13 104 114 164 395

$1,000,000-1,499,999 8 57 58 68 191

$1,500,000-1,999,999 6 17 22 44 89

$2,000,000-2,499,999 1 13 16 21 51

$2,500,000-2,999,999 1 5 15 16 37

$3,000,000-3,999,999 2 5 8 10 25

$4,000,000-4,999,999 0 3 9 4 16

$5,000,000-9,999,999 0 3 13 0 16

$10,000,000 & UP 0 0 3 0 3

**TOTALS 790 2134 861 1740 5525

TOTAL DOLLAR VOLUME TOTAL DOLLAR VOLUME TOTAL HOME SALES SINGLE FAMILY CONDOMINIUM DOLLAR VALUE $1,871,994,800 $869,743,298 $2,741,738,098


January 1 to October 31, 2006SALES

SALES as ofOct. 31 2006

These statistics were gathered from Sarasota Association of Realtors MLS on November 10, 2006.

SalesandListingsforOctober2006

September 2006Average Sale Price/Units Sold /Days On Market

RESIDENTIAL DAYS ON MARKET

CONDOMINIUM

850-

800-

750-

700-

650-

600-

550-

500-

450-

400-

350-

300-

250-

200-

150-

100-

50-

0-Oct. ‘04 Oct. ‘05 Oct. ‘06 Oct. ‘04 Oct. ‘05 Oct. ‘06

AVE. SALE PRICE UNITS SOLD

$549,900

$366,054

539

$385,748

$459,717

242

107

268

138

$307,230

230

93


$499,476

468

98

164

9198


Sale Price vs.

List Price RatesPercentage of list price units sold

for…

SingleFamily 2005 2006January 96.9% 95.90%

February 97.5% 95.65%

March 97.9% 94.22%

April 97.8% 95.01%

May 97.5% 94.21%

June 97.6% 94.72%

July 97.4% 93.62%

August 97.6% 93.33%

September 97.2% 93.45%

October 97.0% 92.79%

November 97.04%

December 96.77%

Condominium 2005 2006January 97.6% 96.02%

February 97.7% 96.54%March 97.5% 95.94%April 97.5% 94.66%

May 97.8% 94.82%

June 97.3% 93.40%July 97.7% 93.29%August 97.3% 93.11%

September 97.0% 92.53%October 96.3% 89.79%

November 96.15% December 97.54%

eOctober sales figures continue to indicate orderly decline

Existing-home sales in the Sarasota market, and across the state and nation, are continuing to show that the once red-hot housing market is stabilizing.

Year-to-date through Oct. 31, 2006, the Sarasota MLS statistics show 5,623 single-family homes and condominiums have sold. This figure is closer to the sales figures through the end of October in 2002 and 2001, when 6,913 and 6,368 homes and condos, respectively, we sold in the local market. The boom year of 2003, 2004 and 2005 saw sales figures skyrocket to almost 10,000 per year, which tends to skew the numbers when comparing 2006, month to month, to the previous three years.

Prices have also stabilized after three years of record appreciation. The median price for a single-family home stands at $345,000 for year-to-date through Oct. 31 – a drop of only 1.4 percent. The median condominium sale price year-to-date was at $300,000 – an increase of almost 2 percent from the 2005 median price year-to-date of $295,000.

David Lereah, NAR’s chief economist, said stabilizing sales should build confidence in the housing market. “Considering that existing-home sales are based on closed transactions, this is a lagging indicator and the worst is behind us as far as a market correction – this is likely the trough for sales,” he said, mirroring comments by former Federal Reserve Chairman Alan Greenspan. “When consumers recognize that home sales are stabilizing, we’ll see the buyers who’ve been on the sidelines get back into the market, and sales will be at more normal levels in the wake of the unsustainable boom that we saw last year,” according to Lereah. He noted sales already are improving in some areas.

NAR President Thomas M. Stevens from Vienna, VA, said the industry is encouraged that the number of homes on the market is starting to decline. “It appears we have passed a cyclical peak in terms of the number of homes on the

market,” said Stevens, senior vice president of NRT Inc. “The good news is that fewer new listings are coming online. A stable sales pace is expected to draw down the number of listings to a supply balance that will support positive price growth within a few months. Taking the long view is always the best way to approach housing decisions, and right now, buyers are in a very favorable market.”

In two Nov. 21 presentations to the Commercial Investment Division of SAR, and to the International Council, Dr. Lawrence Yun, noted economist with NAR, predicted the current housing market slowdown in Sarasota and across Florida would end by summer 2007, and would be “business as usual” by 2008.

Dr. Yun, who authors many of the statistical studies conducted by NAR, said the combination of eight major hurricanes hitting Florida in 2004 and 2005, and the resulting exorbitant home insurance rate increases, put the biggest damper on the housing market. He noted federal and state legislators are working hard to fix the insurance crisis, and in the meantime a very quiet storm season in 2006 might lessen insurance company fears.

In addition, Dr. Yun noted the local economy is strong – even stronger than the state’s excellent showing – and the influx of new residents over the next few years will continue to bolster the housing market. Warm weather states will benefit the most from the population shift, with Florida at the top of the chart. When you add retiring baby boomers to the mix, and a growing international market, the next two decades and beyond will see a tremendous era of growth, he noted.

“The recent storm season, and the housing market slowdown, is simply a fluke,” said Dr. Yun. “I see things turning around by summer of 2007, and back to normal in 2008. Don’t ever bet against Florida!”

Go to www.sarasotarealtors.com to view and download the two Power Point presentations.


ANOTHER EXCEPTIONAL COMMUNITY BY U.S. ASSETS GROUPBroker participation welcomed. Prices, plans, dimensions and specificationssubject to change without notice. Void where prohibited by law.

ADD YOUR STORYTO A STORIED GAME.

Walk our breathtaking Robert Trent Jones, Jr. golf course at your leisure with a caddie. Then

retreat to the many pleasures of our magnificent clubhouse, Golf Hall, where signature

dining, a cozy outdoor fireplace, massage treatment room, and a state-of-the-art fitness

facility are at your service. Moments from the culture and arts of Sarasota, an exclusive golf

club community is taking the private club lifestyle to a new level of play.

941.378.0900 | TheFoundersClub.com New homes from the low $1 millions to over $5 million

262 Families | 275 Memberships | 1 Very Exclusive Club

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Please ask about our generous Realtor incentives.

FOU657-SarasotaRealtor.indd 1 11/14/06 9:41:47 AMProcess CyanProcess MagentaProcess YellowProcess Black

ANOTHER EXCEPTIONAL COMMUNITY BY U.S. ASSETS GROUPBroker participation welcomed. Prices, plans, dimensions and specificationssubject to change without notice. Void where prohibited by law.

ADD YOUR STORYTO A STORIED GAME.

Walk our breathtaking Robert Trent Jones, Jr. golf course at your leisure with a caddie. Then

retreat to the many pleasures of our magnificent clubhouse, Golf Hall, where signature

dining, a cozy outdoor fireplace, massage treatment room, and a state-of-the-art fitness

facility are at your service. Moments from the culture and arts of Sarasota, an exclusive golf

club community is taking the private club lifestyle to a new level of play.

941.378.0900 | TheFoundersClub.com New homes from the low $1 millions to over $5 million

262 Families | 275 Memberships | 1 Very Exclusive Club

THEFOUNDERSCLUB AND

SALESGALLERY

Please ask about our generous Realtor incentives.

FOU657-SarasotaRealtor.indd 1 11/14/06 9:41:47 AMProcess CyanProcess MagentaProcess YellowProcess Black

Educa

tionP

rogra

ms ContinuingEducationcourse

slatedinJanuary• 14-Hours Continuing Education for

License Renewal• Jan. 30 & 31, 2007• Cost: SAR Members $79; Non-members, $99

The Institute of Florida Real Estate Careers, headquartered in Orlando, Florida, will be the provider this year of the 14-hour license renewal course for SAR. Founded in 1983, the Institute of Florida Real Estate Careers, Inc. (IFREC) is recognized as the leader in Florida real estate education.

To service ever increasing enrollments and geographic expansion, IFREC has, in addition to its Orlando corporate campus, registration offices and classrooms in Tampa and Stuart and classrooms in East Orlando, South Orlando, Kissimmee and Lake Mary. Other regularly scheduled classes are held at REALTOR Associations and educational facilities throughout Florida. Many Sarasota Realtors will have attended GRI, Core Law and ABR classes with Richard T. Fryer, the founder of IFREC.

Yes, you can still do “the book”—14-hours correspondence course. Boring! Exam required! No networking! No way to ask questions! Okay, admittedly, you can do it quickly that way. Purchase the “book” from SAR. Call Jackie at 923-2315. But, first please consider the alternatives above that may help your bottom line and keep you out of court.

SAR members, please go to www.sarasotarealtors.com to register for the live course. Non-members, go to the education tab at the top of the home page (www.sarasotarealtors.com) to download a registration form that can be completed and faxed to SAR.

GRICourse1:“StandardsofPractice”

• Feb. 19-21, 26-28, 2007• SAR Members: $325• SAR Non-Members: $ 350

Registration is now open for the GRI Course one to be offered at SAR Feb. 19-21, 26-28, 2007. If you are a new salesperson, this course will offer the 45 hours of Post-License education you need during the first salesperson license renewal cycle. By taking this course, you can get a leg up on earning your GRI designation while taking care of your 45-hour state licensure requirement. For brokers and salespeople not in their first renewal cycle, the course offers 14 hours of continuing education (includes Core Law). Another bonus: Counts towards the Code of Ethics training required by NAR by Dec. 31, 2008.

This GRI course is the most popular course ever offered by FAR through its Florida Realtor Institute.

The course covers transaction making, legal aspects of contracts, financing alternatives, tax implications, fair housing, ethics and more. All the instructors have been carefully screened for their knowledge of the subjects as well as for their teaching techniques—they’re the best real estate instructors in the country.

In a hurry? Don’t wait in line, go online! GRI Course I is now available online through a special Florida Association of Realtors website: www.fargri.com. Online convenience places the course at your fingertips, whenever you want it, and offers the same license renewal menu of credits that the live version does.

Plan on registering for the live course immediately, as recent GRI courses in Sarasota have filled up quickly and left with long waiting lists. SAR members, please go to www.sarasotarealtors.com to register for the LIVE course. Non-members, go to the education tab at the top of the home page (www.sarasotarealtors.com) to download a registration form that can be completed and faxed to SAR.

SAR’s 2007 Education Calendar is now available online on the homepage of www.sarasotarealtors.com. Look for it on the left hand side of the page and click on “Education Calendar.”

TechnologyTrainingThe following courses will teach you how to use and

benefit from technology programs you already have available to you through your Realtor membership with SAR, SAR MLS, and the Florida Association of REALTORS

Work smarter in 2007 with these powerful and improved technology tools. Of the courses listed below, only the TransactionDesk courses have an instruction fee.

MLSAdvantageLearn how to use the powerful, multi-MLS listing

search tool brought to you by Real Estate Industry Solutions, a wholly owned subsidiary of the Florida Association of Realtors. Topics include text-based and map-based searches, saved searches, hot sheets, creating CMS, and emailing listings and CMAs to customers.

• January 22, March 19, June 25• No charge for SAR members; online

registration required.

iMapp—ThirdMondays• 9:30 to 11 a.m.• Jan. 15, Feb. 19 - Frank Coffey, Instructor• MLS Member benefit—no extra charge• Registration requested• www.sarasotarealtors.com

Congratulations!22 December 2006 Sarasota Realtor Magazine www.sarasotarealtors.com

BasicMLXchange–Wednesdays(Hands-On)

• 9 a.m. Noon and 1 to 4 p.m.• Jan. 10 & 24• MLS Member benefit—no extra charge• Keith Thatcher, Instructor• Registration required via “Education Registration”• www.sarasotarealtors.com

AdvancedMLXchange–Thursdays(Hands-On)

• 9 a.m. Noon and 1 to 4 p.m.• Jan. 11 & 25• Keith Thatcher, Instructor• Registration required via “Education Registration”• www.sarasotarealtors.com

TransactionDesk–(LectureinAuditorium)

Learn how to create and manage transactions, share transactions with others, and follow a Digital signing.

• Jan. 23, 9 a.m. to Noon• Members: $25 Non-Members: $35

TransactionDesk–(Hands-On,limit20perclass)

Power your success with the only online transaction manager which includes embedded, interactive forms! Students learn how to customize settings, create work flows, create a transaction, learn the powerful online collaboration tools, work with Forms Online Gold, follow a Digital Signing, and much more.

• Jan. 23, 1:30 to 4:30 p.m.• Members: $85 Non-Members: $100

Congratulations!CONGRATULATIONS!“We congratulate all our members who have achieved various designations, and

passed often difficult and time-consuming courses during 2006! Your hardwork and dedication to the profession are inspiring, and we wish you great

success in the coming years!”

2007EducationCalendarSubject to Change—For General Planning Purposes Only!

January 8 New Member Orientation/Code of Ethics*January 17-21 FAR Mid-Winter Business Meetings, OrlandoJanuary 23 TransactionDeskJanuary 30-31 14 Hours Continuing Education

February 7 CE Program with Ed Oneto: Working with Investors CE Program with Ed Oneto: Scams & FraudFebruary 12 New Member Orientation/Code of Ethics*February 19-20 26-28 GRI Course 1 (45 hours Salesman’s Post-License, 14 Hours CE)

March 7 CE Program with Kim DickeyMarch 12 New Member Orientation/Code of Ethics*March 13-14 CIPS: International Real Estate for Local Markets (Marcus Wally)

April 4 Contracts ComparisonApril 9 New Member Orientation/Code of Ethics*April 16-18 CIPS: Asia, Americas, EuropeApril 25 Harnessing the Power: Skills Based Performance Management

May 2 Real Estate Law Summit (7 hours CE)May 14 New Member Orientation/Code of Ethics*May 21-23 29-30 GRI 2 (11 hours CE, 30 hours Broker Post-License)

June 5 & 6 Seniors Real Estate Specialist (SRES)June 11 New Member Orientation/Code of Ethics*June 12-13 CIPS: Investment and Financial Analysis for International RE

July 9 New Member Orientation/Code of Ethics*July 16-18 23-25 GRI Course 1 (45 hours Salesman’s Post-License, 14 Hours CE)July 30-August 3 CI 102 (Commercial Investment Real Estate)

August 13 New Member Orientation/Code of Ethics*August 15 CE Program with Kim DickeyAugust 22-26 FAR Annual Convention and Trade Show, OrlandoAugust 29-30 14 Hours Continuing Education


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Broker participation welcomed. Oral representations cannot be relied upon as correct-ly stating the representations of the developer. For correct representations referenceshould be made to the documents required by section 718.503, Florida Statutes, to befurnished by a developer to a buyer or lessee. Not an offering where prohibited by statelaw. Prices subject to change without notice. Photography in this ad may be stock pho-tography used to depict the lifestyle to be achieved rather any that may exist. From the partnership of &

VISIT OUR SALES CENTER2950 West Marion Avenue, Punta Gorda, FL 33950Tel: (941) 833-8999 • Toll Free: 1-800-901-0106www.vivante-fl.comI-75 to Exit 164, West 6 miles to Punta Gorda Isles

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In the Jacksonville market, Generation Y buyers, who are in their 20s, typically buy inexpensive condos or town homes close to the beaches, shopping and clubs, according to Jan Shields, a 21-year sales associate with Watson Realty’s Atlantic Beach office. For Generation X buyers, who are in their 30s and 40s and usually raising families, finding the right suburban home with a good school system tends to be a top priority. High-income baby boomers, who are in their 50s and early 60s, are likely to snap up country club or waterfront homes, while seniors, who are age 65 and up may prefer secure condominiums or age-restricted communities.

Like many Florida sales associates, Shields serves customers and clients from all four generations and adjusts her approach accordingly. “We always sell a lifestyle,” she says. “That seems to be as important as the home for different age groups.”

Just 10 to 15 years ago, Florida’s real estate market was dominated by the postwar baby boom generation (born between 1946 and 1964). Today, these buyers share the stage with the Generation Xers (born between 1965 and 1978), the fast-growing “echo boomers” (Generation Y, born between 1979 and 1994) and the senior generation (born before 1946).

“In Florida, you can sell real estate to buyers from their 20s to their 80s, and we have them all,” says Mike Pappas, president of The Keyes Co./Realtors® in Miami.

To market yourself effectively, you need to adapt your communication style to the age of the client, Pappas adds. “In talking with older clients, (sales associates) generally need to be more personal, more patient and more supportive. With younger

clients, it’s all about quickness and speed. You have to be available and respond immediately when they want you.”

Younger buyers often move quickly to buy a home because they anticipate moving again in a few years. “They’re not looking for the perfect place,” says Beth Butler, chief operating officer of Esslinger Wooten Maxwell (EWM) in Coral Gables. “On the other hand, older buyers may be making a last-home purchase, and they want to feel secure with their decision—it definitely won’t be an impulse buy.”

CoverAllYourBasesIn preparing their marketing plans, Florida sales professionals

need to consider the age of their target audience, adds Butler. In general, older buyers prefer traditional media, such as newspapers and home magazines, while younger buyers primarily use the Internet. “Your marketing plan needs to include the right mix of media,” Butler says. “You need to cover all the bases, if you want to reach all four generations.”

Another key to successful marketing - especially in today’s stabilizing market - is knowing the most appropriate financing

options for customers at different stages of their lives. A Gen Y buyer might need a low-rate mortgage to complete the transaction, while a downsizing senior buyer might need advice about estate planning or the tax consequences of selling an expensive home.

“Younger buyers typically need a lot more information on financing,” says Shields. “Retirees often pay cash, and the baby boomers usually have accumulated enough assets so they don’t worry about a loan.”

But Pappas says it’s important to remember that to be successful, sales professionals need to understand that real estate remains an individual business, despite similarities among clients and customers in different age bands. “Our profession is all about understanding each client and meeting those specific needs,” he says. “That’s what Real Estate 101 is all about.”

Here’s a closer look at the four generations now active in the Florida marketplace:

GenerationYVeronica Pratile, a sales associate with Total Realty in DeLand,

says Gen Y buyers are her favorite customers. “They’re starting from scratch and need a lot of attention,” she says. “It’s very satisfying to help them buy that first home.” For instance, Pratile enjoyed finding a lender who provided a 100 percent loan to one couple in their early 20s.

Throughout the state, a growing number of these “echo boomers” are becoming first-time buyers. In April, Century 21® released the results of a multigenerational national online survey that found Gen Y buyers are buying their first homes when they

Marketing to the Generations: Are you reaching all potential buyers?

aAre you adapting your marketing to reach

everyone from seniors to Generation Y?

You should. Here’s why and how.

By Richard Westlund, Florida Realtor® Magazine



Rookie

Corn

er

Here, veteran real estate practitioners think back to their early days and share their bumps in the road that taught them valuable lessons about how to—and how not to—work in real estate.

AListingHeatsUpJane Beattie Shepherd, ABR®, CRS®, a broker for

Beattie-Firth Inc. in Charleston, W.Va., has been in the business for 28 years and will never forget the open house she once held for a vacant property that had a lovely stone fireplace.

“I decided to take a Duraflame log and light it in the fireplace,” remembers Shepherd. “The idea was to create an atmosphere on a snowy day that would sell the house. Well, there was a problem with the chimney, which didn’t draw right, so the house filled up with smoke. Instead of drawing people in, it ran everyone out.”

Shepherd laughs, adding, “The little old lady who owned it had probably never used the fireplace in 30 years.”

The lesson: Always ask the owner before lighting a fire or cranking up a furnace in a cold house, just in case servicing is needed first.

Don’tMakeAssumptionsShepherd shares another valuable lesson from her

rookie years, this one involving a tiresome dog chase.

“I was showing a house, and had just unlocked the door when a dog ran out,” says Shepherd. “I told my client to look around while I ran after the dog. Forty minutes later, I got the dog back into the house, and called the listing agent to say I got the dog back in. He tells me the seller didn’t own a dog.”

Apparently, the real estate professional who had shown the place before Shepherd had seen the dog scratching at the door of the house, and thought it lived there, so he let it in. Luckily, no damage was done.

The lesson: Never make assumptions about who lives in the house.

MoneyOvercomesLoyaltyThe most painful lessons, of course, are the ones that

cost you money.

David Mansfield, a salesperson for Covington & Co. Inc. in Huntsville, Ala., was brand new in the business when he listed his next-door neighbors’ house, and proceeded to help them find a new home.

It’s Not Easy Being GreenVeTeRAn PRAcTiTioneRs RecAll The gAffes And hARd knocks As A Rookie

tThe quickest way to learn is to make mistakes—and every real estate professional

has made at least one on the road to career success. The important thing, everyone

agrees, is to do it better next time, and to have a sense of humor about it.

By Dinah Eng, Realtor® Magazine Online


CID Continued from page 17

MultifamilyMarketThe apartment rental market -

multifamily housing - is strengthening as potential home buyers remain in rental housing. New supply is matching absorption, keeping vacancy rates fairly flat - next year they are projected to average 5.2 to 5.3 percent. Average rent should rise 4.5 to 5.0 percent in 2007. Between 220,000 and 225,000 new units are likely to come on the market next year.

ForeignInvestmentThe Association of Foreign Investors

in Real Estate recently conducted a survey that evaluated foreign investment in U.S. commercial real estate examined - who’s buying and areas of greater interest to foreign investors.

The survey showed that the mean investment by respondents in the U.S. commercial market was $3.7 billion. In 2005, $494 million was invested by survey respondents in the United States out of a global total of $801

million; this year the same investors planned to invest $444 million in the United States out of a global share of $943 million.

The most popular commercial property types for foreign investors are office, hotel, retail, industrial and multifamily. In looking at overall portfolio holdings, 52 percent are in office, 26 percent retail, 12 percent multifamily, 5 percent industrial and 3 percent hotel - the rest are other types.

The United States was ranked the most stable and secure real estate investment by 74 percent of respondents, followed by the United Kingdom, 9 percent. The United States also was ranked as the best opportunity for capital appreciation, by 39 percent, followed by China, 12 percent.

The most active foreign buyers in the United States are from Germany, followed by Australia and the Middle East, with the latter two rising in market share and Germany declining.

are younger (average age 26) than were their counterparts in Gen X (average age 29) and the baby boom (average age 29). However, since the youngest Gen Y’s were born in 1994 and are now only 11 or 12, it’s tough to say what the whole generation will do.

And Gen Y buyers will become an increasingly important part of the market in the next five to 10 years, according to another recent study, “State of the Nation’s Housing Market 2006,” by the Joint Center for Housing Studies, Harvard University. That study notes that the rising number of younger, childless couples will strengthen the market for smaller homes.

Pappas says that Gen Y buyers tend to be hard workers who have been “multitasking” since childhood. “They’re very attuned to the balance of life,” he says, “and many young buyers are getting financial help from their parents and grandparents.”

Gen Y buyers include unmarried couples living together or friends who want to

pool their financial resources to make an investment. “These are not just traditional married couples thinking about having a child,” says Pappas, “so you need to understand their motivations [if you are] to come up with the right solution.”

To reach Gen Y customers, real estate professionals need to use all the technology tools at their disposal. “You need a Web presence and you need to be accessible,” says Butler. “Along with e-mails, you’re likely to get a text message about wanting to see a property tomorrow morning. These buyers are used to instant gratification.”

GenerationXKathy Lollis says Gen X buyers tend

to be self-reliant and resourceful when looking for a home. “They’ve done a lot of research on the Internet and often know exactly what they want,” says Lollis, a sales associate with Century 21 First Realty in Tallahassee. “As a result, they require a lot less handholding.”

In Tallahassee, as in other metropolitan areas, the working-age Gen X buyer is an important component of the relocation and move-up markets. “We’ve seen younger buyers who are able to purchase larger, more expensive homes than was the case five years ago,” Lollis says.

A typical Gen X buyer might be a mid-range executive couple with young children that wants a home close to work and to good schools, adds Shields. “The layout of the home in terms of bedrooms and baths is also very important,” she says. “And they love media rooms.”

But not all Gen X buyers fit into a “traditional” suburban lifestyle. In Florida, the group of 30-somethings is highly diverse, including a large number of Hispanics and recent immigrants, who may be making their first home purchases at an older age.

The Harvard University study notes that foreign-born residents constituted 37

Marketing to the Generations: Continued from page 26



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Marketing to the Generations: Continued from page 28

percent of the net growth in U.S. households from 1995 to 2005, bolstering the market for entry-level housing. “As the share of immigrant households in their 20s and 30s climbs, their presence in these housing markets will continue to grow,” the report said.

In serving Gen X clients, Florida sales professionals typically need to downplay the emotional side of the buying process, says Pappas. “Generally speaking, they’re the least likely generation to get swept up in the excitement of buying a home,” he says. “You need to take a very factual approach with them. Gen Xers tend to be skeptical people, and you need to be well prepared in advance.”

Gen Xers are likely to have spent a great deal of time researching neighborhoods and homes on the Internet before contacting a real estate professional. And they prefer communicating through online technology, Butler says.

“Any technology you use for reaching clients in their 20s, you can present to those in their 30s as well,” she says. “But the Gen Xers are a little more affluent, so you might want to supplement your online marketing by using upscale, trendy magazines.”

BabyBoomersIn marketing beachfront second homes, prestigious country

club communities and luxurious urban condominiums, there’s one primary target: the baby boom generation. Buyers in their 40s and 50s tend to be affluent—in fact, one in four boomers owns more than one property, according to a recent study by the National Association of Realtors® (NAR).

“As a group, boomers are in their peak earning years and continue to wield great influence in the U.S. economy,” says David Lereah, NAR’s chief economist. “But they’re not homogeneous - there are significant variances in needs, behavior, attitudes and resources - and many have not adequately planned for retirement.”

Despite their numbers, the baby boomers, in some ways, are the most difficult clients and customers to reach effectively, says Butler. “You have to try everything with these clients,” she says. “There are still some boomers who don’t use computers, so you need to do direct mail and newspaper ads—but others are more comfortable with Web sites and e-mail. They’re all different.”

Christine Marriott, a sales associate with Century 21 Sunshine Realty in Clearwater Beach, says boomers - who make up the largest share of second-home buyers in her market - are increasingly comfortable with online technology. “I will set

them up with a ‘flash’ application that keeps them updated on new listings,” she says. “Today, I get most of my leads from the Internet.”

For sales professionals, it’s essential to understand a baby boomer’s reasons for making a home purchase - upsizing, downsizing or investment. “Some buyers are doing well and want to move up to their dream home,” Pappas says. “Others have sent their kids off to college and don’t want to cut the lawn anymore. Still others are looking ahead to the next stage in life and thinking about retirement.” Thanks to their numbers and affluence, the baby boom generation will continue to dominate the state’s high-end and preretirement markets for another decade. As Shields says, “Baby boomers are my most expensive clients. They want it all, and they can afford it. It’s a fun market to serve right now.”

SeniorsSince the 1950s, seniors have been a vital part of Florida’s

real estate market. The Harvard University study notes that households age 70 and over are growing in number, thanks to longer life expectancy. That will intensify demand for second homes and active-adult communities, as well as for assisted-living housing.

Senior buyers enter the state’s market for a number of reasons: retiring to Florida, purchasing a second home or downsizing from a “high-maintenance” single-family house. Whatever the reason, they tend to move more slowly than younger generations— and they may not be tied to any specific local market.

“These buyers require more reassurance and want to know that you understand their needs,” says Lollis. “They often want to see more homes, so you can expect to do more driving around.”

Jassamine B. Redington, a sales associate with Condos & Castles Real Estate Inc. in Fort Lauderdale, says pricing may be more important to seniors than to baby boomers - although “sticker shock” can affect buyers of any age. “You need to take your time with older buyers,” she says. “You also need to do more advertising in magazines; while many of them are Internet savvy, others don’t have that expertise.”

In some cases, sales professionals will be working with a senior’s children or caretaker to identify an appropriate home near family members or a local hospital, says Pappas. “Don’t neglect those relationships with younger relatives.”

No matter how you slice it, serving each generation boils down to one thing -service.


Eth

ics

inA

ctio

n Utilizing confidential MLS information causes problems

rRealtor® A filed a listing with the Board MLS which bulletined the information to all

Participants. In the “Remarks” portion of the property data form, it was noted that the

seller was moving out of state. Shortly thereafter, Realtor® A received a call from

Realtor® B, requesting permission to show the property to a prospective purchaser.

Realtor® B’s request was granted and the property was shown to the prospect.

During the showing, Realtor® B started a conversation with Seller X regarding his proposed move to another state. Realtor® B told the seller that he was acquainted with a number of real estate brokers in the city to which Seller X was relocating and suggested that he be allowed to refer Seller X to one of these brokers. Seller X responded that Realtor® A, the listing broker, had previously mentioned the possibility of a referral and that Seller X felt obligated to be referred by Realtor® A, if by anyone.

Several days later, Seller X received a phone call from Realtor® B who again asked permission to refer the seller to a broker in the city to which the seller was moving. The seller indicated that he was not interested in Realtor® B’s offer and that if he wished to be referred to another broker, he would do so through Realtor® A.

The seller then called Realtor® A and asked if there was anything Realtor® A could do to stop Realtor® B from requesting that he be allowed to refer the seller to another broker. Upon learning of Realtor® B’s attempts to create a referral prospect, Realtor® A filed a complaint with the Grievance Committee of the Board alleging a violation of Article 16 of the Code of Ethics and cited Standard of Practice 16-18 in support of the allegations.

In accordance with the Board’s established procedures, the Grievance Committee reviewed the complaint and referred it to a panel of the Professional Standards Committee for hearing. The appropriate notices were sent to all parties and a hearing was scheduled.

At the hearing, Realtor® A produced a written statement from Seller X in support of his testimony and concluded that Realtor® B had violated Article

16 of the Code of Ethics in attempting to use confidential information received through the Board’s MLS to attempt to create a referral prospect to a third broker.

Realtor® B responded that, as a subagent of the listing broker, he was attempting to promote the seller’s best interest by referring the seller to a reputable broker whom he knew personally in the city to which the seller was going to relocate. Realtor® B indicated that the seller had not accepted his offer of referral and, based on such refusal, Realtor® B had not, in fact, made any referral and, therefore, had not acted in a manner inconsistent with his obligations as expressed in Standard of Practice 16-18.

After giving careful consideration to all the evidence, the Hearing Panel determined Realtor® B to be in violation of Article 16 by his attempt to utilize confidential MLS information to create a referral prospect to a third broker, contrary to the intent of Standard of Practice 16-18, even though his effort to obtain the seller’s permission to do so had been unsuccessful.

The Hearing Panel also commented that MLS information is confidential and to be utilized only in connection with the Realtor®’s role as cooperating broker. The panel further commented that information received from a listing broker through the MLS should not be used to create a referral prospect to a third broker or to create a buyer prospect unless such use is authorized by the listing broker.

- Case #16-8: Unauthorized Use of Information Received from Listing Broker for the Purpose of Creating a Referral Prospect to a Third Broker or for Creating a Buyer Prospect (Reaffirmed Case #21-14 May, 1988. Transferred to Article 16 November, 1994.)


After working with them for several months, their house sold, and Mansfield intensified the search for a new home that they could move into before closing on the current one. He told the couple about a house that had come off the market six weeks earlier, and drove them by it.

“They went straight to the occupants of the house and worked out a deal without me,” Mansfield says. “I had no clue that they’d cut me out the way they did. I had a buyer’s agency agreement with them that had expired, and I let it lapse without making them sign a new one because I thought we were friends.”

While Mansfield collected a small commission for being the listing agent on the sale of the old house, he calls the experience an expensive lesson. “When it comes to money, you never know how people are going to act,” says Mansfield.

The lesson: Be aware that money’s a strong motivator for some people. You could be best friends or family, but money may be more important to others than loyalty to you.

StayFocusedontheDealKeeping track of where you are in the

process of a sale is important, says David Phillips, e-PRO®, a salesperson with Weichert, REALTORS®, in Arlington, Va.

Last spring, Phillips proudly wrote his first contract, two days after receiving his real estate license. The client was his former spouse, who was buying a condo.

“Right after I had a ratified contract, I faxed the paperwork to the settlement firm, but their office and I lost track of the transaction,” says Phillips. “I’d forgotten to make an appointment to sign the settlement papers, and they’d been working on the papers without asking me about the appointment. So I had to scramble to find a branch of their office that could accommodate us that day. I did it, but we ended up going to an office 20 miles out of our way.”

Phillips now keeps multiple calendars, recording important transaction dates

in a paper file, on his PDA, and on his laptop.

“I make certain I don’t have a single point of failure,” says Phillips. “If you lose one program, there goes your entire business. I’ve learned to double-check every aspect of a contract with customers and vendors, even if some might perceive it as overly cautious, to make sure things come off in terms of time, place, and cost.

The lesson: Don’t lose track of where you stand in the transaction and double check every detail to ensure the deal goes through as planned.

ExpectSurpriseHitchesOne of the greatest mistakes anyone

can make is counting on a commission before the money’s in the bank, says Peggy Barnes, broker/owner of Pryme Realty in Muncie, Ind. In 1985, Barnes was a brand new salesperson for Century 21 in Upland, Calif., when she was working the desk.

A call came in from a couple who had just accepted an offer on their home, and wanted to look at Upland properties to be closer to their daughter and family. Barnes showed them a house that they loved, and the couple made a full-price, cash offer with one contingency—the successful closing of their current property.

Seven days before the Upland house closed, Barnes says she “proceeded to spend most of that commission on clothes, a down payment on a new car, and household items.” Then, the unexpected happened.

“Two days before closing, the seller died of a heart attack,” Barnes says.

The transaction was thrown into probate, and the house did not close for eight months. The buyer still wanted the house, but Barnes was out the $12,000 commission, which she had already spent by running up her credit cards.

“At the time, I was a single parent, and wasn’t getting any child support,” Barnes says. “I spent the money and was

very foolish. After that, I always knew how much money would be coming in, and would write down what I was going to spend it on, but never spent it till the money came in.”

The lesson: Don’t count your chickens before they hatch.

EmotionsCanTakeOverNo matter what details must be worked

out in contracts and closings, Devin Wood, an 11-year real estate veteran and an associate broker with RE/MAX Champions in Lynnwood, Wash., urges rookies to remember that a real estate professional’s job isn’t just dealing with information and homes.

The second client Woods took on in his real estate career had been widowed about 15 years. The woman had reared a family on her own in the home she was selling, but with her children now grown, she was ready to downsize.

After a home inspection, the buyer’s representative called Wood to ask if he could drop off the inspection report in the seller’s mailbox. Wood said yes, thinking it would be an efficient thing to do.

“Later that night, I answer the phone to a sobbing woman who proceeds to go on for the next 30 minutes about how she has done the best she could to maintain this house since her husband’s death,” he recalls.

The deal fell apart because the seller interpreted the minor flaws detailed in the report as a personal rejection—even though the house was in great shape overall. Fortunately, the place sold a month later, so all ended well.

“Sometimes our job is to soften the blow of bad information,” Wood says. “Since that experience, I make sure that any communication with a seller or buyer always comes to me first.

The lesson: A home sale is an emotional thing. Sometimes you have to be a referee and a peacemaker, as well as real estate practitioner.

Rookie Corner Continued from page 27


tNAR signs Mexican joint real estate agreement

The National Association of Realtors® has formally signed its first joint reciprocal membership agreement

with a foreign real estate organization. NAR President-elect Pat Vredevoogd Combs

executed the agreement with the Mexican real estate association, Asociation Mexicana de

Professionales Inmobiliarios, at AMPI’s 50th anniversary meeting in October.

Because of this historic partnership, all of Mexico’s AMPI members will become Realtors® in January 2007. “This is an important initiative. Not only will it create a wealth of new business opportunities for NAR’s members in the United States and AMPI members here in Mexico, but also it will help promote standardization of international real estate practice,” Vredevoogd Combs said.

The agreement between the two organizations confirms the importance of branding in real estate marketing. As official dues-paying members of NAR, AMPI members, who will join NAR in the international membership category, will be able to use the Realtor® logo and registration mark.

According to a recent study by a leading international brand valuation firm, the Realtor® brand is worth about $32,000 to every Realtor®, and the average member with six to ten years experience realizes $4,500 a year in incremental income due to the marketplace advantages the brand brings to a member’s business. The value of the brand is based on the trust NAR members have established with consumers, the study shows.

“NAR chose AMPI for this groundbreaking partnership, in large part, because its members adhere to a strict Code of Ethics like that of NAR. AMPI’s high standards of practice will help increase the positive perceptions of Realtors® worldwide,” Vredevoogd Combs said.

The new relationship highlights the increasing level of business cooperation in real estate markets in both countries, as a growing number of United States citizens opt to acquire second and retirement homes in Mexico and residents of Mexico are buying property in the United States more frequently.

Mexico is attractive to second home buyers from the United States, thanks to the availability of properties near the ocean and mountains, reasonable costs of resort properties, and lifestyle considerations. Thanks to a

favorable legal and financial infrastructure, the No. 1 foreign destination for retirees from the United States is Mexico, with more tha a million Americans living there.

To help Realtors® in the United States increase business opportunities with AMPI members, NAR is launching a four-hour course titled “Doing Business in Mexico,” which will begin soon in Mexico and at the NAR annual conference in New Orleans in November. The course will later be made available in an online version in 2007. It will help teach Realtors® in the United States about business opportunities in Mexico and help them connect with their AMPI counterparts.

Mexican President Vicente Fox keynoted the AMPI meeting. Expansion of the housing sector and homeownership opportunities has been a major focus during the Fox administration. Government policy has promoted programs that have expanded mortgage lending, assistance to low-income families and development of a secondary mortgage market similar to that in the United States. As a result, more than 2.4 million families have become new home owners during the six years of Fox’s term, which will end in December.

“This joint venture reflects AMPI’s desire to be more closely linked to international business standards and practices, and opens up opportunities for members on both sides of the border to do more business together,” said Galo Blanco, AMPI’s 2006 president.

AMPI, the Mexican national professional organization of real estate brokers and agents in both commercial and residential real estate, was established in 1956, and presently has 2,500 members, who represent companies located in all regions of Mexico. Further information about AMPI is available at http://www.ampi.org. AMPI is also a founding member of the International Consortium of Real Estate Associations. Information about ICREA is available at http://www.worldproperties.com.- NAR


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International Real estate

Pre-immigration tax planning can generate substantial tax savings

The thought of obtaining a temporary or permanent visa to move to the United States often

looks attractive for whatever the reason - and it is. We have seen numerous individuals get

caught up in the excitement of the move.

However, we often find that individuals in this situation fail to properly consider the tax consequences and planning opportunities that may be available. This article will address some of these issues.

The U.S. with its 35 percent maximum income tax rate (which, by the way, is normally not attained until one is well into a six figure income) is a tax haven compared to many countries. For example, Canada has a maximum tax rate of about 46 percent, the United Kingdom 40 percent, Germany in excess of 50 percent, and most western European countries at around or in excess of a 50 percent marginal tax rate. Also, Florida does not assess state income taxes against individuals.

Once an individual becomes a “U.S. income tax resident”, he or she is taxed on their worldwide income, even if the income is not brought into the U.S. However, the U.S. provides a system of relief to avoid this income from being taxed twice. This is referred to as the “foreign tax credit”. The way it works is that the U.S. income tax on non-U.S. income (for example, interest, dividends or retirement income from one’s former home country) is reduced by the U.S. dollar equivalent of income tax charged by the former home country. This avoids the income from being taxed twice.

An individual becomes a U.S. income tax resident in one of two ways; either as a lawfully permanent resident (commonly referred to as a “green card”) or if they meet the “substantial presence test”. An individual is only taxed on their income from inside the United States until the point in time that he or she becomes a U.S. income tax resident. Once this point is passed the U.S. assesses tax on worldwide income.

However, it is the period of time before one becomes a U.S. income tax resident that can provide numerous tax saving possibilities in the U.S. and in one’s home country. What strategies one employs during this transition can provide temporary and permanent tax savings.

Often, the year one terminates tax residency in their country of origin can be one for creative tax planning. Frequently, there can be a period of time between the time one moves from their home country until they achieve tax residency status in the U.S. We commonly refer to this as a “window of opportunity” when one is not a tax resident of any country. In other words, they are a citizen of the world.

In this situation, and with proper facts and planning, it frequently is legally possible to have certain types of non-U.S. source income generated during this period and not be taxed in the U.S. or the country of origin. Or, if the income is taxed in the country of origin, it may be possible to have it taxed at a lower rate since the individual is no longer a resident there.

As an example, there are certain European countries that do not tax gains from real estate sales if the property is owned for a number of years immediately prior to the sale. If the property in European Country X is sold after one establishes tax residency in the U.S., then the U.S. tax authorities will tax the profit. However, if it is sold before becoming a U.S. tax resident, then the U.S. cannot tax the profit. With proper planning it may be possible to create a period of nonresidence between the country one is emigrating from and the U.S. while these sales are being consummated.

As another example, a few years ago a European physician was planning a move to the United States. As part of the planning he negotiated and concluded the sale of his medical practice for a very substantial amount before he left his home country. Part of the terms of the sale were that the transaction price would be paid for over several years by the young physician who purchased the practice. In effect, these payments would be made after our client left European Country X and after he became a U.S. tax resident.

Through proper planning none of the principal payments from the sale of the medical practice were taxed by Country X. Furthermore, none of the principal

By Thomas C. Roberge, CPA, Sarasota and St. Petersburg



Pre-immigration tax Continued from page 37

payments were taxed in the U.S. because of certain strategies that were employed in the drafting, timing and manner in which the contract was executed. In other words, none of the profit from the sale of the medical practice was taxed in the physician’s home country, and none of the profit was taxed in the U.S. even though the payments were received after he became a U.S. tax resident. And - it all was legal!

Frequently, one moves to the U.S. owning substantially appreciated real estate in their home country. If they sell the non-U.S. real estate after becoming a U.S. tax resident, then the U.S. will tax the profit on the sale. The profit is generally calculated by taking the difference between what the property is sold for less its tax basis (cost, plus improvements and expenses of sale, less depreciation). The U.S. tax system does not allow one to index the tax basis for inflation from the original purchase price. There are planning techniques available whereby one can utilize certain contracts using the appreciated property prior to becoming a U.S. tax resident, realize the profits from the eventual sale of the properties, and

not have to pay tax on the appreciation that occurs prior to becoming a U.S. resident.

The creation and utilization of non-U.S. trusts prior to becoming a U.S. resident is an area of great complexity, especially if the settlor creates them within five years of becoming a U.S. resident. Also, if the person creating the trust retains control over the trust, he or she is generally treated as the owner for U.S. tax purposes. One should seek competent professional advice before creating these entities.

In summary, the time before one moves to the U.S. and becomes a tax resident can be a tremendous opportunity for minimizing one’s taxes in the country he or she is moving from and the U.S. The tax planning strategies normally should be structured prior to establishing tax residency in the U.S. It is usually too late to put these strategies in place after becoming a U.S. resident. Our firm specializes in international tax matters and has significant experience in pre-residency tax planning.

- Copyright, 2006, Thomas C. Roberge & Company, All Rights Reserved

Through COBA (Coalition of Business Associations) and the WFHC (Work Force Housing Coalition) we work to initiate or respond to public policy proposals and community service programs that will enhance the protection of private property rights and the quality of life in our community. At stake this year and next is the proposed implementation of development policies and new development fee structures that could lead to a “perfect economic storm”. Please be vigilant with us as we wage this extraordinary debate in the commission chambers and public forums.

In concert with FAR (Florida Association of Realtors®) and NAR (National Association of Realtors®), we will work to find public policy solutions to the Florida insurance crisis that affects our residential and commercial customers.

Look for details to help us win federal legislation implementing a federal catastrophe fund. Also, small business insurance is still on the table. You and your fellow entrepreneurs and small business owners should not be denied the right to low cost group insurance programs. Following the extraordinary mid-term elections, we feel that there is no better time to push this forward for final approval in both houses of Congress.

The new year will see another big “plate” of proposed actions and challenges for your 2007 Leadership Team. As Immediate Past President, I look forward to helping Joe Hembree and his 2007 Leadership Team achieve even greater successes.

On behalf of the 2006 SAR leadership, we thank you for the opportunity to serve you this year . It has been a highly rewarding experience, and one which we will cherish.

Cover Story Continued from page 6

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Home of COLORLINE,World Class Post Cards,

Business Cards and Brochuresfor the Real Estate Industry


SAR/CID Installation Banquet

Thursday, Dec. 7th at 6 p.m. at Michael’s On East

Reserve Your Tables Now at www.sarasotarealtors.com

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51

MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY4 5 6 7 8

8:00 a.m. – 4:00 p.m. GRI 39:00 a.m. & 2:30 p.m. New Members

8:00 a.m. CID Annual Holiday Breakfast9:00 a.m. – 5:00 p.m. GRI 3

8:00 a.m. – 3:00 p.m. GRI 3 9:00 a.m. & 2:30 p.m. New Members

8:00 a.m. MLS Zone 39:00 a.m. MLXchange General Training6:00 p.m. SAR/CID Installation Banquet (Michael’s On East)

9:00 a.m. New Members9:00 a.m. Executive Committee9:00 a.m. & 1:00 p.m. MLXchange General Training 11:30 a.m. – 1:00 p.m. WCR Holiday Party (Michael’s On East)

11 12 13 14 159:00 a.m. – 4:00 p.m. New Member Orientation9:00 a.m. & 2:00 p.m. Suncoast CIX General Training 9:00 a.m. & 2:30 p.m. New Members

8:30 a.m. CID Board of Directors9:00 a.m. & 2:00 p.m. Suncoast CIX General Training

9:00 a.m. & 2:30 p.m. New Members 9:00 a.m. & 1:00 p.m. Basic MLXchange Class

8:00 a.m. MLS Zone 19:00 a.m. & 1:00 p.m. Basic MLXchange Class9:00 a.m. & 2:00 p.m. Suncoast CIX General Training

9:00 a.m. New Members

18 19 20 21 229:00 a.m. & 2:30 p.m. New Members

9:00 a.m. & 2:30 p.m. New Members

MLS Power Marketing CANCELLED

SAR Offices Closed at Noon

25 26 27 28 29SAR Offices Closed 9:00 a.m. & 2:30 p.m.

New Members8:30 a.m. Board of DirectorsMLS Power Marketing CANCELLED

9:00 a.m. New MembersSAR Offices Closed at Noon

For more information on Educational Programs, please see pages 24 - 26

January 1 2 3 4 5SAR Offices Closed 8:30 a.m.

CID Board of Directors9:00 a.m. & 2:30 p.m. New Members

8:00 a.m. MLS Zone 2

9:00 a.m. New Members9:00 a.m. Executive Committee

8 9 10 11 129:00 a.m. – 4:00 p.m. New Member Orientation9:00 a.m. & 2:30 p.m. New Members

9:00 a.m. & 2:30 p.m. New Members

8:00 a.m. MLS Zone 1

9:00 a.m. New Members

Monday,Dec.4,throughFriday,Jan.12,2007

Documents

+Õ iÌ ÞÊ,i Ûi`ÊvÀ Ê/ iÊÀ` >ÀÞmyrasm.com/files/magazine/SRMagDec0607051820015.pdf · SALES EFFORTS EARN $20,000 BONUS FOR LOCAL REALTORS Orchid Beach Club Applauds Two