Three new Commissioners appoint-ed by Governor Siegelman andconfirmed by the Senate now con-

stitute the nine-member Alabama RealEstate Commission. Roy Bragg, SheliaHodges and Lyman Lovejoy all beganworking with the Commission on October1, 2001; each term will be effectivethrough September 30, 2006.

Roy Bragg returns to the Commissionafter serving two past terms from October1, 1976 through September 30, 1986. Henow serves from the Sixth CongressionalDistrict. Bragg graduated from GeorgiaSouthern University and obtained hismasters degree from the University ofAlabama. He joined J.H. Berry Realty in1958 and became president of the compa-ny in 1964. He currently serves as chair-man of J.H. Berry & Gilbert, Inc. Braggled the company through the 60’s, 70’sand 80’s, specializing in multifamily realestate and investment brokerage. His oth-er professional accomplishments includethe Society of Real Estate Appraisers andthe Counselors of Real Estate designa-

tions; Birmingham Association of REAL-TORS — past president; and AlabamaAssociation of REALTORS — past presi-dent.

Sheila Hodges is serving from the FirstCongressional District. In 1978 Hodgesbecame licensed as a real estate salesper-son and received the designation of“Graduate of Realtor Institute” (GRI) in1979. In 1980 Hodges was licensed as areal estate broker and in 1984 received theDesignation of “Certified ResidentialBroker” (CRB), from the National Asso-ciation of REALTORS. She is the presi-dent of Meyer Real Estate in Gulf Shores,Alabama, which has been selected asQuality Award winner for Alabama in thesmall business division. Under Hodges’leadership, Meyer Real Estate has grownfrom a half dozen sales agents to over 130employees and 40 sales associates.

Hodges’ other professional accomplish-ments include serving as president on theBaldwin County Association of REAL-TORS, State Director and numerous othercommittees for the Alabama Association

of REALTORS from 1985-1995; andSouthern Region vice-president in 1997.Her civic interests have included past

In This IssueCommission Awards Contractfor Group Errors and Omissions Insurance . . . . . . . . . . . . . . . . . . . . . 2

AREC Staff Changes . . . . . . . . . . . . . .2

Random Office Inspections,Audits and Other Stuff . . . . . . . . . . . 3

Education Corner: CE — What’s Up? . . . . . . . . . . . . . . 4

2002 Real Estate ExamDates and Fees . . . . . . . . . . . . . . . . 5

Briefly Legal: CommissionersAmend RECAD Form . . . . . . . . . . . . .7

Internet Use and the Residential Real Estate Brokerage Market . . . . . . 8

Holiday Closings for 2002 . . . . . . . . 9

Disciplinary Actions Taken . . . . . . . 10

Change of Addresses . . . . . . . . . . . 12

Three New Commission Members

Spring/Summer 2002

Roy Bragg Sheila Hodges Lyman Lovejoy

(Continued on page 2)

The Code of Alabama 34-27-35.1 mandates errors and omis-sions insurance coverage as a condition for holding an activeAlabama real estate license. Be advised that the Real EstateCommission has completed its statutory responsibility withregard to contracting for an errors and omissions insuranceprovider.

There was one respondent to the competitively solicitedRequest for Proposal (RFP). Rice Insurance Services Companymet all the requirements of the RFP. Commissioners voted toaward the contract to Rice Insurance in Tuscaloosa on February21, 2002. The contract has been fully executed. Licensees canexpect to hear and receive more details from Rice Insuranceregarding participation in the group program. In the meantime,inquiries may be directed to 1-800-637-7319. ■

2

Commission Awards Contract for Group Errorsand Omissions Insurance

By D. Philip Lasater, Executive Director

SALESPERSON & COMPANY FEES$135 ($65 per year plus $5 Education fee)$285 (includes $150 penalty) if paid

September 1, 2002 to September 30, 2003

BROKER FEES$155 ($75 per year plus $5 Education fee)$305 (includes $150 penalty) if paid

September 1, 2002 to September 30, 2003

• • • IMPORTANT • • •New License Renewal Fees for 2002

AREC Staff ChangesWe are pleased to announce and wel-

come Anthony Brown and LeslieFearn to the Commission. Anthonyjoined the Investigative and Legaldepartment recently as an auditor. He isnow randomly examining Alabama realestate companies for accuracy in theirtrust accounts, monitoring broker com-pliance with RECAD (Real Estate Con-sumer’s Agency and Disclosure Act)and compliance with other real estatelaw requirements.

Leslie is the new Assistant to theExecutive Director, D. Philip Lasater.She came to the Commission from theDepartment of Public Health and, pre-viously, was the Secretary to the Chiefof Staff of a large hospital in Portland,Oregon.

Best wishes to Betty Anderson,Licensing Assistant, and Kike Ger-manos, Education Assistant, who bothretired from the Commission on

December 31, 2001. Their dedicated service to licensees andthe public, over the many years, will be missed by all.

Brown

Fearn

president of Alabama Gulf Coast Chamber of Commerce, SouthBaldwin Chamber of Commerce, Baldwin County United Way,and the Alabama Gulf Coast Convention and Visitors Bureau.

Lyman Lovejoy is serving from the Third Congressional Dis-trict. Lovejoy has been owner and broker of Lovejoy Realty forthirty years. He has offices located in Odenville and Moody,Alabama. He was honored as St. Clair REALTOR of the year in1998. His professional accomplishments include charter mem-ber, president (two separate terms), and Board of Directors forthe past fifteen years of the St. Clair Association of REALTORS.

Lovejoy’s affiliations include being a member of the AlabamaAssociation of REALTORS Board of Directors in 1997 and1998; ARPAC Trustee for the Alabama Association of REAL-TORS; vice-president of the Moody Business Association;member of St. Clair County Economic Development Board;board member of Colonial Bank (formerly Ashville SavingsBanks for 20 years); and member of Colonial Bank CentralAlabama Board of Directors. ■

RENEWAL DEADLINEIS AUGUST 31,2002

3

As a qualifying broker for a realestate company in Alabama,(and for that matter most of the

fifty states) your company is subject to bevisited for an office inspection and a trustaccount audit. The Code of Alabama1975, as amended, Section 34-27-36(a)(31) requires that the qualifying brokerkeep in his/her files copies of all con-tracts, leases, listings, and other recordspertinent to real estate transactions for aperiod of three years. Section 34-27-36(a)(8) has to do with accounting for fundsbelonging to or being held for others inseparate federally insured accounts locat-ed in Alabama. Section 34-27-36 (a)(28)says it is a violation of the real estatelicense law to fail to or refuse to produce,for inspection by the Commission or itsauthorized personnel or representative, adocument, book or record in your posses-sion concerning a real estate transaction.Finally, Section 34-27-36 (a)(29) indi-cates you have violated the real estatelicense law if you fail, within a reason-able time, to provide information request-ed by the Commission during an investi-gation or after a formal complaint is filed.

It is basically those portions of theAlabama Real Estate License Law, asamended, that random and routine officeinspections and audits of trust accountsare based. Most of the time, all is well andthe Commission’s representative is able toanswer some questions for the licensee.Most of the time, the visit is cordial andall are happy campers at the conclusion ofthe audit. A critique sheet is left with thequalifying broker to give any commentsthey might have on the process, whetherthose comments are positive ones or neg-ative ones.

On rare occasions, the audit and inspec-

tion is not random, but directed becausethere has been a complaint from someone.Perhaps the licensee gave the Commis-sion a check for their license fees on thecompany trust account or their trustaccount check bounced. The followingthings actually happened on random androutine office visits in the past. The nameshave been omitted purposefully.

Case in point: The auditor identifiedherself, was given a desk to work fromduring the audit and she began checkinglicenses, securing checkbooks, ledgers,etc. One of the company personnel (notthe qualifying broker) was someone whohad access to and was able to sign checkson the trust account. While the auditorwas working, this person came to her andtold her that she would find out anyway,so he was going to tell her in advance hisproblem. He was a homebuilder and was“borrowing” funds from the trust account

to build the homes. When one was fin-ished, he would close and take thosefunds and replace them into the trustaccount until he needed to “borrow” somemore funds. The auditor had come at oneof those times before his house closed andthe funds were not there.

Case in point: Two auditors were con-ducting the office visit and observed thatthe office was very new construction andvery nicely furnished. The brokerremarked how nice it was that he did nothave to pay any interest on a constructionloan because he had been able to use thetrust account funds and pay as he went,then replaced the funds. This was proba-bly the wrong thing to tell Commissionpersonnel!

If you have a random office visit, pleaseknow you are not being unduly picked onand that the Commission wants to causeyou as little inconvenience as possible. ■

Random Office Inspections, Audits And Other Stuff

By David Erfman, Chief Investigator

4

Q. When must CE be completed?A. No later than August 31, 2002 in

order to avoid paying a $150 penaltyfee.

Q. How many hours are required forlicense renewal this year?

A. 15 hours

Q. What courses will meet the 15-hourrequirement?

A. 3 hours in Risk Management3 hours in one of the following manda-tory courses: License Law, RECAD,Fair Housing9 hours in approved electives

Q. Can I take more than 3 hours of themandatory courses and still receive CEcredit?

A. Yes. After the mandatory requirementis satisfied, other mandatory coursesyou complete will go toward fulfillingyour 9-hour elective requirement.

Q. Does the Commission require Code ofEthics?

A. No. If taken, it counts as an electivecourse.

Q. What happens if I take a course morethan once in the same license period?Do I still get credit for the course?

A. Yes, there was a rule change to allowlicensees to receive credit each time anapproved course is taken even though itmay be a repeat of a course previously

completed in the same license period.So, if you want to take License Law (orany other course) two or more times,go for it.

Q. Can I take a course in another stateand have it count for continuing edu-cation credit for renewal of mylicense? For example, I live on theGeorgia state line and a school there isoffering a course I am interested in tak-ing. If I take it, will it count for CEcredit here?

A. Yes, provided the course is approvedfor continuing education credit byanother state AND provided you obtaina letter either from the school or theReal Estate Commission, which hasapproved the course, that the course isapproved for CE credit. You canreceive ONLY elective CE credit inthis manner and the course will countas the same number of hours as shownon the documentation you obtainedfrom the school or Real Estate Com-mission.

Q. Suppose I take a course at a conventionout of state and the course is approvedby another state’s Real Estate Com-mission. I know I can receive credit butwhat if they don’t have the official“Alabama CE Certificate” to give me.Can I still get credit?

A. Yes, provided the certificate you are

given at minimum contains name ofthe course and course sponsor, loca-tion, date of course completion, num-ber of hours attended, and instructor’ssignature. You will also need to obtainthe proper documentation as describedabove from the course sponsor or aState Real Estate Commission that it isapproved for CE credit.

Q. Why did I get a Continuing EducationCertificate from the Real Estate Com-mission in January? NOTE: If you holdan active license and did not receive aCE Certificate from the Real EstateCommission, check with your broker.In January, the certificates were sent toqualifying brokers for distribution toall licensees in that company.

A. The Commission sent each licensee acertificate to verify the continuing edu-cation credit earned between October1, 2000 and October 31, 2001.

Q. Why did the Commission do that?A. Rule 790-X-1-.12 in the License Law

changed effective November 1, 2001,regarding the verification of continuingeducation credit. Through October 31,2001, the Commission tracked eachlicensee’s CE credit through an elec-tronic reporting system called CePc.Due to technological problems withthis process, the Commission has sus-pended this program for now. In the

EDUCATION CORNER

CE-WHAT’S UP?By Pat Anderson, Education Director

Several things have changed regarding continuing education this license period. Please read this article carefully! You will need to know these requirements in order to renew your license on a timely basis.

meantime, licensees will be responsi-ble for keeping their own CE certifi-cates including the certificate mailed tothem by the Commission.

Q. How do I get another certificate fromthe Real Estate Commission if I lostmine or cannot locate it?

A. Send a written request for a dupli-cate CE certificate and a $10.00 checkmade payable to the Alabama RealEstate Commission. Include your nameand either your license number orsocial security number and another cer-tificate will be mailed to you.

Q. For Active Licensees: Where should Ikeep my certificates?

A. Active licensees should keep their CEcertificates in a file in the office wheretheir license is registered. Do not sendthem to the Real Estate Commissionunless the Commission audits yourrecords and asks you to send them.

Q. For Inactive Licensees: Where should Ikeep any CE certificates that I mayhave?

A. Inactive licensees should keep theirCE certificates at home. If you havetaken any courses, do not send eitherthe Commission issued certificate orschool issued certificates to the Com-mission unless asked by the Commis-sion to do so.

Q. Did all inactive licensees receive a CECertificate from the Real Estate Com-mission?

A. No. Only inactive licensees who haveobtained some CE credit received acertificate of completion. That wasonly about 450 of the 8,000 inactivelicensees.

Q. Do inactive licensees have to renewtheir license in order to keep it?

A. Yes, inactive licensees must renewtheir license no later than August 31,2002, in order to avoid penalty andkeep the license current.

Q. Do inactive licensees have to completethe 15 hours of continuing education

by August 31, 2002?A. No, not if you do not want an active

license on October 1, 2002. You mustcomplete the 15 hours of continuingeducation prior to license activation.

Q. I work at a branch office. Can my cer-tificates be kept on file at the mainoffice?

A. No. The certificates must be kept at thebranch office location for all licenseeswho are licensed at the branch. If the

main office wants copies, that is fine.That would be determined by companypolicy.

Q. Is the qualifying broker responsible forkeeping up with the certificates for alllicensees in the company?

A. No. Each licensee is responsible forkeeping up with his/her own certificates.

(Continued on page 6)

Q. Can a qualifying broker require agentsto turn in their certificates to him/her?

5

EXAMINATION LATE APPLICATION APPLICATION DATE DEADLINE DEADLINE

Received Date Postmarked Date

April 20, 2002 April 8, 2002 March 30, 2002

May 18, 2002 May 6, 2002 April 27, 2002

June 15, 2002 June 3, 2002 May 25, 2002

July 20, 2002 July 8, 2002 June 29, 2002

August 17, 2002 August 5, 2002 July 27, 2002

Sept. 21, 2002 Sept. 9, 2002 August 31, 2002

New Real Estate Examination Fees$28.00 - Exam fee postmarked by the application deadline

$48.00 - Late registration fee received by the “late application deadline”

$58.00 - Walk-in candidates fee

DAILY COMPUTER TESTING PROPOSAL REQUESTEDBeginning in October, the Commission will contract for computer administered daily testing. The

Commission has sent out a Request for Proposal (RFP). Exam companies had until April 1,

2002, to respond. More information will be available after the Commission awards a contract.

2002 REAL ESTATE EXAMDATES & FEES

6

A. If by office policy the qualifying bro-ker wants to keep up with licensee’scertificates, that is fine. But remem-ber, the Commission will hold thelicensee, not the qualifying broker,responsible for the certificates.Licensees should keep themselves acopy of their certificates before theyturn over the originals to someone else.

Q. How long must I keep CE certificates?A. Certificates must be kept on file for

Commission audit for two yearsfrom the time the credit is used torenew the license. Here is an example:John D. Licensee takes 6 hours of CEon October 10, 2000, 6 hours on April23, 2001 and his remaining 3 hours onJuly 6, 2002. John renews his licenseon August 21, 2002. A new license isissued on October 1, 2002. John mustkeep the certificates on file in his officeuntil October 1, 2004, which is twoyears from the time he used the creditto have the new license issued.

Q. How will the Commission know if Itook my continuing education?

A. The Commission may conduct onsite audits of licensee records or mayat any time conduct a random audit bymail. In other words, the computer willrandomly select a certain percentage oflicensees and the Commission willthen send a notice to those licensees.The notice will request that thelicensees mail in certificates to bechecked by Commission staff.

Q. What if I am audited and have not com-pleted the 15 hours?

A. If there is probable cause that a vio-lation of the License Law hasoccurred, the Commission investiga-tors will file a formal complaint and setthe case for hearing. The licensee maypresent his/her case and will have thechoice to be represented by Counsel.At the conclusion of the hearing, theCommissioners will decide if theLicense Law has been violated. If so,under Section 34-27-36 you could bereprimanded or fined or your licensecould be suspended or revoked or anycombination of these sanctions.

Q. I hold a reciprocal license. What am Isupposed to do in light of this new ruleabout keeping certificates in my files?

A. Reciprocal licensees may either meetcontinuing education requirements bytaking the 15 hours of continuing edu-cation as already mentioned in this arti-cle OR have on file proof that they heldan active license in another state at thetime the Alabama license was renewed.If you choose the latter, the copy of theactive license from the other state mustshow an expiration date of October 1,2002 or later.

Q. Who is exempt from taking continuingeducation?

A. Only the following people areexempt as described in Section 34-27-35(j)(1) of the License Law:

1) Those who were at least 65 years old asof October 1, 2000 and who had beencontinuously licensed for the 10 yearsprior to October 1, 2000. Those peoplewere grandfathered when a new lawwas enacted to no longer exempt thoseover 65 years of age.

2) The other group that does not have totake continuing education is salesper-sons who become licensed during thesecond year of the license period. Forthe upcoming license period, thatwould mean that those who received

their original (permanent) license onOctober 1, 2001 or after, are exemptfrom taking CE for the first renewal oftheir license. However, these licenseeswould have completed the post licensecourse during the first year of thelicense period so the exemption israther meaningless.

Q. Does taking the 30-hour post licensecourse fulfill the 15-hour continuingeducation requirement?

A. Yes, the 30-hour course is primarilycompleted by new salespersons whohold temporary licenses. Completionof the course will satisfy CE require-ments for new licensees or for anylicensees who wish to take it.

Q. I am taking the 15-hour broker’s preli-cense course. Does that course fulfillthe 15-hour continuing educationrequirement?

A. Yes, the 15 hour broker’s prelicensecourse fulfills the CE requirement forany licensee who takes it even if thelicensee is already a broker. It willcount as CE credit for all licenseesbecause it consists of Risk Manage-ment, RECAD, License Law, FairHousing and Contract Writing.

Q. Can I take a continuing educationcourse via distance education? Forexample, can I take an Internet courseor a computer based course?

A. Yes you can, provided the course iscertified by ARELLO (Association ofReal Estate License Law Officials). Ifyou are interested in taking a distanceeducation course, check out approvedcourses at www.arello.net and click on“Search for Certified Courses”. Thereis also a link to this search feature onthe Commission’s Web site atwww.arec.state.al.us. Or, you may callyour local real estate school and ask ifthey have qualified distance educationcourses available. ■

ANNUAL INSTRUCTORSEMINAR

October 18, 2002Auburn Hotel and Conference CenterAuburn, Alabama

ATTENTION: INSTRUCTORS

7

The Commissioners have madea small change to the form titled“Real Estate Brokerage ServicesDisclosure.” That form is at theend of Alabama Real Estate Com-mission Rule 790-X-3-.13. Theamendment is actually effectiveon April 3, 2002, but you may useyour current supply of forms ifchanging will cause an unreason-able amount of trouble for yourcompany. We expect that you willbegin using the new form as soonas reasonably possible.

There are only two smallchanges. The very first line of theform now says: “THIS IS FORINFORMATION PURPOSES”and the second line says “THIS ISNOT A CONTRACT” and thesetwo lines make up the heading ofthe form. In the old version of therule there was no heading abovethe title of the form. The only oth-er change is at the end of the formbelow the consumer signatureline. In that spot these words nowappear: “(Acknowledgment forReceipt Purposes, Only)” andthere was only a space on this spoton the old form. The commission-ers felt it was important to reas-sure consumers that the form isnot a binding contract. They hopeconsumers will feel more free tosign the form.

Here is the text of the rule withthese amendments. As always,this form is not distributed by theCommission office. Please haveyour form format changed to con-form with these changes.

BRIEFLY LEGALCommissioners Amend RECAD Form

By Charles R. Sowell, General Counsel

THIS IS FOR INFORMATION PURPOSESTHIS IS NOT A CONTRACT

REAL ESTATE BROKERAGE SERVICES DISCLOSURE• Alabama law requires you, the consumer, to be informed about the types of services

which real estate licensees may perform. The purpose of this disclosure is to give youa summary of these services.

A SINGLE AGENT is a licensee who represents only one party in a sale. That is, asingle agent represents his or her client. The client may be either the seller or thebuyer. A single agent must be completely loyal and faithful to the client.

A SUBAGENT is another agent/licensee who also represents only one party in a sale.A subagent helps the agent represent the same client. The client may be either theseller or the buyer. A subagent must also be completely loyal and faithful to the client.

A LIMITED CONSENSUAL DUAL AGENT is a licensee for both the buyer and the sell-er. This may only be done with the written, informed consent of all parties. This typeof agent must also be loyal and faithful to the client, except where the duties owed tothe clients conflict with one another.

A TRANSACTION BROKER assists one or more parties, who are customers, in a sale.A transaction broker is not an agent and does not perform the same services as anagent.

• Alabama law imposes the following obligations on all real estate licensees to all parties,no matter their relationship:

1. To provide services honestly and in good faith;2. To exercise reasonable care and skill;3. To keep confidential any information gained in confidence, unless disclosure is

required by law or duty to a client, the information becomes public knowledge ordisclosure is authorized in writing;

4. Present all offers promptly to the seller;5. Answer your questions completely and accurately.

Further, even if you are working with a licensee who is not your agent, there are manythings the licensee may do to assist you. Some examples are:

1. Provide information about properties;2. Show properties;3. Assist in making a written offer;4. Provide information on financing.

You should choose which type of service you want from a licensee, and sign a brokerageservice agreement. If you do not sign an agreement, by law the licensee working with youis a transaction broker.The licensee’s broker is required by law to have on file an office policy describing the com-pany’s brokerage services. You should feel free to ask any questions you have.The Alabama Real Estate Commission requires the real estate licensee to sign, date, andprovide you a copy of this form. Your signature is not required by law or rule, but wouldbe appreciated.

Name of licensee __________________________________________________________

Signature ________________________________________________________________

Date ____________________________________________________________________

Consumer Name __________________________________________________________

Signature ____________________________________________ Date ______________(Acknowledgment for Receipt Purposes Only)

8

While there has been a greatdeal of hype about the Inter-net, it is true that the Internet

has been and will continue to be anextremely important force for change inthe way people live their lives and con-duct business. No other technology hasbeen incorporated, as quickly, into thestructure of our economy and thelifestyles of American households. TheDepartment of Commerce estimated thatradio took almost 40 years to reach 50million consumers, TV almost 13 years,and the personal computer approximately16 years. It has taken less than five yearsfor the Internet to reach this many andmore consumers.

As with many other industries, residen-tial real estate firms have been imple-menting this technology into their day today business operations. The NationalAssociation of REALTORS® (NAR)Online Technology survey, conducted in1999, indicates that nearly two thirds ofNAR members access the Internet for realestate business purposes. In addition, thesurvey also revealed that 23 percent of allpotential home buyers searched, to someextent, for a home online. Such Internetuse will only continue to grow in thefuture.

Recent technological innovations haveresulted in new online applications thatallow home buyers to take virtual tours of

listed properties, obtain neighborhoodand quality of life data, determine afford-able price ranges, and comparison shopfor loans. The recent approval of the useof electronic signatures will also make itmore likely that much of the work associ-ated with a home purchase will be paper-less and completed online in the nearfuture.

Just what are the implications of thesechanges for the operation of the residen-tial real estate market? Will the availabili-ty of online listing information speed thesearch process and result in homes sellingsooner, or will selling time increasebecause potential buyers have access to alarger universe of available homes? Willthe use of the Internet to market residen-tial properties reduce transaction andinformation costs associated with a homepurchase? Is it possible that the advent ofthe Internet will restructure the demandfor residential brokerage services in sucha manner so as to alter commission rates?To what degree could online listings workto replace real estate brokers and sales-people? Although this brief article willtouch on some of these issues, and cer-tainly all of them are worthy of in-depthinvestigation, our primary concerns hereare twofold. First, determine the effect, ifany, of Internet use by buyers on theirsearch time. Second, what has been theimpact of the Internet on the residential

real estate brokerage industry.Part of our analysis relies on a review of

earlier research along with new, empiricalresearch that is based upon data from alarge nationwide survey of recent homebuyers and sellers that was conducted bythe National Association of REALTORS®

in 2000.

The Changing Nature of the Real Estate Industry

Although there has been some theoriz-ing about how the Internet will effect theresidential real estate market and the bro-kerage industry, there is little in the way ofempirical research documenting or sup-porting hypothesized outcomes. Baen andGuttery (1997) and Tuccillo (1997) arguethat the growing use of Internet real estateapplications and online sites will reduceinformation and transactions costs, speedtransactions, and ultimately lower commis-sions by reducing the demand for broker-age services. However, little in the way ofsupporting evidence is provided by theseauthors. Examples of other recent worksconcerning the Internet and real estate,include but are not limited to, Bond, et. al.(2000) and Bardhan, Jaffee, and Kroll(2000).

Bond, et. al. provides evidence on thediffusion of online technology in the realestate industry. Bardhan, Jaffee, and Krollreport that firms can incorporate Web use

Internet Use andthe ResidentialReal Estate Brokerage MarketBy Leonard V. ZumpanoAAR Chair of Real Estate and

Executive Director of Research, AREREC

9

into their business operations in many dif-ferent ways. In many cases firms gothrough stages of Web use as they becomemore familiar with the technology and arebetter able to assess the benefits and risksof e-commerce. In the initial stage, busi-nesses establish basic Internet connec-tions, allowing them to communicate viae-mail and tap into information on theWorld Wide Web. This includes creatingWeb sites, which disseminate informationabout their companies, in what Bardham,Jaffee, and Kroll call the signaling stage.In phase two, businesses expand theirpresence on the Web by undertaking moreextensive marketing and other promotion-al activities. In stage three, firms provideservices and products through the Web,becoming virtual stores or office sites.The authors argue that we are now enter-ing a fourth stage where firms build on thenetworking capabilities of the Web toestablish new supply, service, or sales net-works that the authors claim may ulti-mately change the very structure of thefirm. REALTOR.COM is a perfect exam-ple of fourth stage activity. The authorsfurther state there will be a final stagewhere products and services are devel-oped through the cooperation and partici-pation of a network of firms.

The Internet and Buyer Search Time

What then are the implications ofincreased Internet use for consumers andreal estate professionals? To make thisdetermination we examined data culledfrom the National Association of REAL-TORS® 2000 Home Buying and SellingSurvey. The survey was mailed to 20,000consumers who either purchased or sold ahome during 1999. NAR received 1778completed surveys. Elimination of incom-plete, inaccurate, and/or misleading surveyresponses left a total of 1239 completedquestionnaires, which serve as the founda-tion for this work. Various statistical tech-niques were then employed to measure dif-ferences in search time among buyers who

used the Internet as part of their search fora home.

The results of the study indicate thatbuyers who first learn of their eventual pur-chase via the Internet, whether throughREALTOR.COM or some other online ser-vice, witness a significant reduction insearch time. On average, Internet savvybuyers found their home almost 5 1/2weeks sooner than buyers who do not usethe Internet. Even casual use of the Inter-net, by buyers who use the Internet as onlyone part of their search, appears to reducesearch time.

The survey data also reveals that mostconsumers who use the Internet as part ofthe home buying process, are searching forhome listings not real estate agents. Onlythree percent of Internet users explicitlysearched for a real estate professional.While this latter statistic might seem scaryto most licensees, the fact is that 87% ofthese Internet shoppers purchased theirhomes through real estate brokers. Thiscompares to 76% for other home buyers.These findings lend support to the idea thatthe Internet, at least so far, is primarily apre-screening and information system;once a subset of acceptable homes havebeen identified, most consumers contact areal estate professional. Rather than replac-ing real estate salespeople the Internet isreducing buyer search and informationcosts, while making real estate salespeoplemore productive; exactly what technologyis supposed to do.

It is also instructive to note other charac-teristics about Internet home buyers. Com-pared to other home buyers they tend to beyounger, better educated, better informed(sought out more information and frommore sources), and more affluent than theirnon-Internet counterparts.

Implications for Real Estate Professionals

What this says is that the Internet is notto be feared, but rather used as a tool toincrease agent productivity and improvethe quality of services to consumers. These

results also carry a warning. The use of theInternet as part of the home search processwill only grow and consumers are becom-ing more knowledgeable about their alter-native marketing arrangements. Not onlywill licensees need to stay abreast of thisfast changing online technology, but theywill have to continually upgrade the quali-ty of the services they offer if they are toremain a competitive force in the residen-tial real estate market.

ReferencesBaen, J. S. and R. S. Guttery, “The ComingDownsizing of Real Estate: Implication ofTechnology”, Journal of Real Estate Port-folio Management, 1997, 3: 1-18.

Bardhan, A., D. Jaffee, and C. Kroll, AResearch Report: The Internet, E-Com-merce, and the Real Estate Industry, FisherCenter for Real Estate and Urban Econom-ics, 2000.

Bond, M. T., M. J. Sieler, V. L. Sieler, andB. Blake, “Uses of Web Sites for EffectiveReal Estate Marketing”, Journal of RealEstate Portfolio Management, 2000 6:203-210.

The National Association of REAL-TORS®, The 2000 Home Buying and Sell-ing Survey.

Tuccillo, J. A., “Technology and the Hous-ing Markets”, Business Economics, 1997,32: 17-20.

HOLIDAY DATE

Confederate Memorial Day . . . . . .April 22

National Memorial Day . . . . . . . . .May 27

Jefferson Davis . . . . . . . . . . . . . . .June 3

Independence Day . . . . . . . . . . . . .July 4

Labor Day . . . . . . . . . . . . . . September 2

Columbus Day/American Indian Heritage Day . . . . . . . . .October 14

Veterans Day . . . . . . . . . . . .November 11

Thanksgiving . . . . . . . . . . . .November 28

Christmas Day . . . . . . . . . . .December 25

HOLIDAY CLOSINGS FOR 2002

10

Disposition: The below were foundguilty for violation of Section 34-27-36(a)(16) by presenting to the AlabamaReal Estate Commission, as payment fora fee or fine, a check which was returnedunpaid by the bank upon which it wasdrawn.

Name: Keisha J. Glasscock, Salesperson,Montgomery, AlabamaDate of Hearing: December 1, 2000,Fined $250

Name: Sharon H. Haynes, Salesperson,Adamsville, AlabamaDate of Hearing: December 1, 2000,Fined $100

Name: Mavis S. Harris, Salesperson,Opelika, AlabamaDate of Hearing: December 1, 2000,Fined $250

Name: Tahira S. Atcha, Salesperson,Birmingham, AlabamaDate of Hearing: December 1, 2000,Fined $200

Name: Samuel E. Conyers IV, AssociateBroker, Tuscaloosa, AlabamaDate of Hearing: December 1, 2000,Fined $250

Name: Yvonne Dannyelle Thompson,Salesperson, Birmingham, AlabamaDate of Hearing: January 17, 2001,Fined $250

Name: Wilson Whitaker, Salesperson,Columbus, GeorgiaDate of Hearing: January 17, 2001,Fined $250

Name: Patricia Ann Beecham, Salesper-son, Mobile, AlabamaDate of Hearing: January 17, 2001,Fined $250

Name: Connie R. Olsen, Salesperson,Orange Beach, AlabamaDate of Hearing: February 15, 2001,Reprimanded

Name: Kimberly J. Salter, Associate Bro-ker, Birmingham, Alabama

Date of Hearing: February 15, 2001,Fined $250

Name: Tammy W. Norris, Salesperson,Birmingham, AlabamaDate of Hearing: March 9, 2001, Fined$250

Name: Julia A. Warmate, Broker,Tuscaloosa, AlabamaDate of Hearing: March 9, 2001, Fined$250

Name: Fred H. Hawkins, Broker, Mont-gomery, AlabamaDate of Hearing: March 9, 2001, Fined$250

Name: Ronald Whetstone, Broker,Eutaw, AlabamaDate of Hearing: May 11, 2001, Fined$250

Name: Joe A. Winkeler, Salesperson,Gulf Shores, AlabamaDate of Hearing: May 11, 2001, Fined$250

Name: Anne E. Patterson, Salesperson,Robertsdale, AlabamaDate of Hearing: May 11, 2001, Fined$250

Name: Pamela D. Walter, Salesperson,Gulf Shores, AlabamaDate of Hearing: May 11, 2001, Fined$250

Name: James A. Burns, Qualifying Bro-ker, Harpersville, AlabamaDate of Hearing: September 14, 2001,Fined $500

Name: Kim H. McConnon, Salesperson,Jacksonville, AlabamaDate of Hearing: October 26, 2001,Fined $250

Name: Catherine R. Rushing, Salesper-son, Daphne, AlabamaDate of Hearing: January 24, 2002,Fined $250

Name: Valerie Moorer, Salesperson,Birmingham, AlabamaDate of Hearing: January 24, 2002,Fined $250

Name: Jerold F. Turner, Salesperson,Birmingham, AlabamaDate of Hearing: January 24, 2002,Fined $250

Disposition: The below was found guiltyand fined $100 for violation of Section34-27-36(a)(23)a. via Section 34-27-36(a)(19), for a real estate licensee toenter a plea of guilty to a crime involvingmoral turpitude and violation of Section34-27-31(k) via Section 34-27-36(a)(19),for failing to notify the commission with-in 10 days of a criminal verdict.

Name: April Michelle Morgan, Salesper-son, Northport, AlabamaDate of Hearing: December 1, 2000

Disposition: The below was found guiltyand reprimanded for violation of Section34-27-31(j) via Section 34-27-36(a)(19)for failing to notify the commission with-in 10 days of the institution of a criminalprosecution against him and Section 34-27-31(k) via Section 34-27-36(a)(19) fora real estate licensee to fail to notify thecommission within 10 days of a criminalverdict against him.

Disciplinary Actions TakenDecember 2000 through January 2002

11

Name: Roy A. Rafos, Qualifying Broker,Trussville, AlabamaDate of Hearing: December 1, 2000

Disposition: The below were foundguilty for violation of Rule 790-X-3-.01via Section 34-27-36(a)(19) for changinghis or her place of business as set out onhis or her numbered license certificate,and failing to notify the commission inwriting within 30 days after the change.

Name: Kenneth George Emerson, Bro-ker, Mobile, AlabamaDate of Hearing: January 17, 2001,Fined $100

Name: James W. Brewer, Qualifying Bro-ker, Decatur, GeorgiaDate of Hearing: January 17, 2001,Fined $250

Disposition: The below was found guiltyand reprimanded for violation of Section34-27-36(a)(8)a. and 34-27-36(a)(8)b. forfailing to deposit and account for at alltimes all funds to be held in trust for oth-er parties.

Name: Debbie M. Cole, Broker, Mont-gomery, AlabamaDate of Hearing: March 9, 2001

Disposition: Ballard Realty Company,Inc., d/b/a The Prudential Ballard Realtyand Mr. Weimorts were found guilty forviolation of Section 34-27-36(a)(23)b. forhaving a final money judgment renderedagainst them which resulted from an actoccurring in the pursuit of their real estatebusiness. With regard to the qualifyingbroker, Ms. Campbell, Section 34-27-34(a)(2) makes her responsible for theacts of the salesperson, Mr. Weimorts, andthe company, Prudential Ballard RealtyCompany, Inc. Ms. Campbell and thecompany were reprimanded. Mr.Weimorts’ license was suspended for sixmonths by the order dated March 19,2001. On May 11, 2001, the suspensionof his license was reduced to the amountof time he had been suspended pursuantto the Commission order. His license wasreinstated.

Name: Ballard Realty Company, Inc.,d/b/a The Prudential Ballard Realty, Jim-

mie Ann Campbell, Qualifying Broker,and Hugh Weimorts SalespersonDate of Hearing: March 9, 2001

Disposition: The below were foundguilty for violation of Section 34-27-36(a)(23)a. via Section 34-27-36(a)(19)for entering a plea of guilty to a felonyand violation of Section 34-27-31(j) and(k) via Section 34-27-36(a)(19) for failingto notify the commission within 10 daysof the institution of any criminal prosecu-tion and failing to notify the commissionwithin 10 days of a criminal verdict.

Name: Robert L. McWilliams III, Quali-fying Broker, American Homebuyers, Inc.and American Discount Broker Realty,Madison, AlabamaDate of Hearing: July 20, 2001, Repri-mandedName: Jimmy Frank Richardson, Quali-fying Broker, Haleyville, AlabamaDate of Hearing: September 14, 2001,License suspended until January 15,2002.

Disposition: The below was found guiltyfor violation of Section 34-27-36(a)(1) forprocuring a license by making a materialmisstatement of fact. He was reprimandedand his broker’s license issued.

Name: Nathaniel Harris III, Salesperson,Birmingham, AlabamaDate of Hearing: July 20, 2001

Disposition: The below was found guiltyand fined $1000 for violation of Section34-27-36(a)(19) and Rule 790-X-3-.03(1)as a real estate associate broker failing topay over to her qualifying broker all fundscoming into her possession in trust forother parties immediately upon receipt ofsame and Section 34-27-36(a)(8)a. failingwithin a reasonable time, to properlyaccount for or remit money coming intoher possession which belongs to others, orto commingle money belonging to otherswith her own funds.

Name: Gladys Brown Davis, Broker,Huntsville, AlabamaDate of Hearing: July 20, 2001

Disposition: The below was found guilty

and fined $250 for violation of Section34-27-2(a)(11)b. for failing to operatefrom a separate office, meeting all otherregulations of the real estate commission,and to be properly identified as a realestate office and Rule 790-X-2-.17 thatrequires the public display of all realestate licenses at the place of business.

Name: Fred H. Hawkins, Broker,Huntsville, AlabamaDate of Hearing: August 17, 2001

Disposition: The below was found guiltyand fined $500 for violation of Rule 790-X-3-.01 via Section 34-27-36(a)(19) forchanging the address of his place of busi-ness as set out on his numbered licensecertificate and failing to notify the Com-mission in writing within 30 days aftersuch change has been made.

Name: James A. Burns, Qualifying Bro-ker, Harpersville, AlabamaDate of Hearing: September 14, 2001

Disposition: The below was found guiltyand fined $1000 for violation of Section34-27-36(a)(14) for accepting a commis-sion or other valuable consideration forperforming an act for which a license isrequired from any person except his qual-ifying broker.

Name: Steven H. Gay, Salesperson, Clan-ton, AlabamaDate of Hearing: September 14, 2001

OTHER ADMINISTRATIVEACTIONSDetermination for LicensureApproved. . . . . . . . . . . . . . . . . . . . . . . 9

Denied. . . . . . . . . . . . . . . . . . . . . . . . . 1

Determination of EligibilityApproved. . . . . . . . . . . . . . . . . . . . . . . 6

Denied. . . . . . . . . . . . . . . . . . . . . . . . . 5

COMPLAINTS AND INQUIRIES

From Licensees . . . . . . . . . . . . . . . 3235

From Public . . . . . . . . . . . . . . . . . . 1901

Anonymous . . . . . . . . . . . . . . . . . . . 99

Bulk RateU.S. Postage

PAIDMontgomery, AL

Permit 2861201 Carmichael Way

Montgomery, Alabama 36106

COMMISSIONERSBill E. Poole

Chairman, Huntsville

Roy F. Bragg, Birmingham

Gordon Henderson, Albertville

Robert S. Hewes, Dothan

Sheila S. Hodges, Gulf Shores

Lyman A. Lovejoy, Odenville

Chester Mallory, Montgomery

Crawford Welch, Montgomery

Ruth T. Whitley, Tuscaloosa

D. Philip Lasater, Executive Director

Vernita Oliver-Lane, Editor

The Alabama Real Estate CommissionUPDATE is published for the benefit of the

Alabama Real Estate Industry by theAlabama Real Estate Commission.

Phone: (334)242-5544Fax: (334)270-9118www.arec.state.al.usarec@arec.state.al.us

State of Alabama

REAL ESTATE Commission

CHANGE OF BUSINESS ADDRESSQualifying Brokers - The Commission has experienced the return of numer-ous correspondence to companies, especially after a mass mailing, that hasbeen marked by the U S Postal Service as “Non Deliverable as Addressed,” or“Moved - No Forwarding Address.” Rule 790-X-3-.01 of the Alabama RealEstate License Law states: “It shall be a violation for any licensee to changethe address of his place of business as set out on his numbered license cer-tificate and fail to notify the Commission in writing within thirty (30) days aftersuch change has been made. To effect a change of business address, the qual-

ifying broker must return to the commission the company license, if the company is a corporation, partnership or branch office,plus all broker and salesperson licenses. A $25 transfer fee must be included for each license issued to that company.”

CHANGE OF RESIDENCE ADDRESSSection 34-27-35(h) of Real Estate License Law states that each licensee shall notify the commission in writing of any change inhis or her business or residence address within 30 days of the change. There is no fee to change a licensee’s residence address.

Inactive Licensees - Once your license is placed on inactive status, all correspondence from the Commission will be mailed to yourhome address. Remember, this is a license renewal year. If your license status is inactive at the time renewal notices are mailed in July,the notice will be mailed to your home address. So, it is important that your home address be kept current with the commission.

CHANGE OF E-MAIL ADDRESSThe Commission is searching for e-mail addresses to provide timely and important information faster. Please send your e-mailaddress to the Commission and remember to notify us of any changes.