Oregon REALTOR Magazine

A PublicAtion of

Summer 2009

Issues that Affect Your Business• Legal Updates• Technology Tips• 2009 Legislation• Commercial Real Estate• Events

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mike rowley salem (marion & polk counties) 503-856-8775 ccb# 153877

Summer 2009 | oreGon reAltor® | 3

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Volume 44 number 2

ASSOCIATION OFFICERS

PRESIDENT Dannie Walker, CRB, CRS, ABR, GRIPRESIDENT-ELECT Alan Mehrwein, CRB, GRIIMMEDIATE PAST PRESIDENT Warren Lee DunnEDITOR/CHIEF EXECUTIVE OFFICER Andrea L. Bushnell, CIPS, RCEMANAGING EDITOR Joyce H. Beach, CMP, e-PRO

KEY OBJECTIVE GROUP CHAIRS

Business Issues John Hoops, CRSGovernment Affairs Lori Tydeman, CIPS, GRIPolitical Affairs Lisa Higbee, GRIProfessional Development Barbara Brown, CRB

Any information provided is intended for the general guidance and

information of OAR members. OAR should not be considered the

single authoritative source of information. The user is responsible for

verifying all important information for accuracy and completeness

before taking any action on the basis of the information.

The OREGON REALTOR® (ISSN 1059-2628, USPS 600-080) is pub-

lished quarterly by the Oregon Association of Realtors®, PO BOX

351, Salem, OR 97308-0351. Subscriptions cost $4 annually as part

of membership dues; $15 annually for nonmembers. Second class

postage paid at Salem, OR. Postmaster: Send address changes to

the OREGON REALTOR®, PO BOX 351, Salem, OR 97308-0351.

Advertising carried in the OREGON REALTOR® does not constitute an

endorsement of the products by the Oregon Association of Realtors®.

Exceptions to this rule are seminars sponsored by the Oregon

Association of Realtors®.

Printed on recycled paper.

StAtement of oWnerSHiP AnD mAnAGement. the oreGon reAltor® (iSSn 1059-2628, uSPS 600-080) is published four times a year in Spring, Summer, Autumn and Winter by the oregon Association of reAltorS®, P. o. box 351, Salem, or 97308-0351. the editor is Andrea l. bushnell, P.o. box 351, Salem, or 97308-0351. the owner is the oregon Association of reAltorS®, P. o. box 351, Salem, or 97308-0351. there are no bondholders, mortgages or other security holders.

eXtent AnD nAture of circulAtion: Average number of copies of each issue published during the preceding twelve months: (A) total number of copies printed, 18,500; (b.1) mailed outside-county paid subscriptions, 18,306; (c) total paid distribution, 18,306; (D) sample, free or nominal distribution, 0; (f) total distribution, 18,306; (G) copies not distributed, 194; (H) total, 18,500; (i) percent paid, 100%. Actual number of copies of single issue published nearest to filing date: (A) total number of copies printed, 20,000; (b.1) mailed outside-county paid subscriptions, 18,015; (b.2) paid mailed subscriptions, 963; (c) total paid distribution, 19,978; (f) total distribution, 19,978; (G) copies not distributed, 22; (H) total, 20,000, (i) percent paid, 100%.

O R E G O NREALTOR®

Joyce beachManaging Editor

front cover photo: Gazebo on a lavender farm in Hood river, oregon

Editor’s PodiumPreparing for the turnaround

Waiting is always so hard! Whether we’re waiting in traffic, waiting for a loved one to arrive home or waiting for the long-planned sky dive, waiting brings with it a sense of anticipation and anxiety. That anxiety clearly is present in us all during these turbulent times especially as we wait, not so patiently, for the market recovery that we know eventually will come.

That’s why your association continues to be your real estate business advocate by giving you the tools that will help you in your real estate practice. We try diligently to communicate with you about those tools through this magazine, our electronic newsletters, our website and our board/association visits. On the cover of the OREGON REALTOR®, we draw your attention to the ongoing tools and information that we offer you to help make your business easier and more productive while minimizing your risk.

In this issue of the magazine there is an article with tips to “green” your marketing; green meaning both echo-friendly and cost effective. Information on legislation working its way through the 2009 Oregon Legislature will give you a glimpse toward the future use of your tax dollars, and our legal updates will help you save money through sound risk management practices.

We may have to wait a bit for the market turnaround but we don’t want you to have to wait for the business tools to help you succeed in it. ■

4 | oreGon reAltor® | Summer 2009

editor’s Podium 3President’s forum Market Have you Down? 4oregon reAltorS® Home foundation 5counselor’s corner Distressed Properties 6Salem reAltor® Honored 8Spring Gri Designees 9technology Tips to Green Your Marketing 10commercial Development 12

Inspectors: Make Your Decisions Now

Insurance Benefits That Pay Off 13Government Affairs 14

Entering the Session’s Final Stretch

Hotline Highlights 16Who Will Be Entitled to Compensation

reAltor® PAc: making Strides 18A taste of Portland 19events calendar 20

O R E G O NREALTOR

P R E S I D E N T ’ S F O R U M

Market Have you Down?focus on the best of your current situation

by Dannie Walker2009 President, Oregon Association of REALTORS® Dannie Walker

Issues that Affect Your Business• Legal Updates• Technology Tips• 2009 Legislation• Commercial Real Estate• Events

When i was told this publication was about “issues that affect your business” i started to get a little depressed. it seems like all we do is deal with issues these days.

If you’re a principal broker you’re dealing with production issues. How do you make ends meet and keep up the moral? Where do you cut and where do you spend?

Agents are dealing with sellers who wish to avoid reality or buyers who don’t have everything it takes to come to the table.

On another level we are working with issues regarding tax credits, interest rates, short sales and REOs. Forms and internet services seem to be hot topics this year.

How about governance restructure?At home we may be dealing with how

to make ends meet or how keep the kids in college. Some are looking for that second job to help us through the slump in the market.

Some of us have our own issues… yes I have a ton of them. What do I do when I grow up? Is real estate all there is for me? Wouldn’t it be nice to have a REAL job, one with bennies…. whatever that is.

Then I remind myself I have a REAL job and I love it. I am blessed with the opportunity to meet and help such a variety of people. I get to set my own schedule and run to the gym in the middle of the day. I get to meet clients and customers for lunch, coffee, or a glass of wine.

I can attend education events and call it networking and meet others who will send me more leads. Everywhere I go there is an opportunity waiting for me. I spent the weekend at “Balloons over Bend” and picked up two great buyer leads after riding in a hot air balloon and having mimosas for breakfast. This job rocks!

So I realize that everything is about my attitude towards it. I can choose to find what is not working for me and call those issues problems or life lessons. Then I can focus on what is working for me and continue to find the opportunities in the people and events that come my way.

The best way to accomplish an improved environment is to focus upon the best things about where you currently are. ■


the oregon reAltorS® Home (Home ownership made easier) foundation marks the five year anniversary of its founding this year. As a reminder, the foundation is a 501(c)3 charitable corporation established in 2004 to collect funds and provide financial resources to groups or organizations providing home ownership opportunities for oregonians at or below local median income. the foundation is administered by a board of Directors consisting of reAltor® members and three members-at-large. Since its inception a total of $148,609 has been distributed through local reAltor® associations throughout the state, in grants to 501(c)3 organizations providing affordable homeownership.

As a result of legislation passed in the 2003 session, real estate brokers and escrow companies with client trust

OAR HOME Foundation – Celebrating Five Years of Making a Difference by cynthia balzola, PresidentHOME Foundation Board of Directors

accounts may contribute interest earned on the accounts to the Foundation. In Colorado and Utah banks have established accounts which, with broker instructions, “sweep” the interest on a regular basis and remit it to the home foundations. It was anticipated that this would be the primary source of funds for the Association’s HOME Foundation. However, an ongoing challenge has been securing bank cooperation in facilitating the process of creating client trust accounts to accommodate the sweep of interest. We thank the banks currently participating in the program - Sterling Savings Bank, Siuslaw Bank, Northwest Bank, Pacific Continental Bank and People Bank of Commerce. The effort continues to enlist the support of all banks. Brokers are instrumental in encouraging their banking institutions to get on board or choosing a bank that provides the sweep account.

Monies, to this point, have been primarily raised through various fundraising events. Auctions held by the Women’s Council of REALTORS® in conjunction with Oregon REALTOR® meetings, a Casino Night and the very successful Taste of Portland event which was held at the Oregon Golf Club in 2008. The “Taste” will be repeated on September 17, 2009 featuring 24 sponsored booths showcasing both businesses and caterer/restaurant partners providing “bites” of their wares, music, a silent auction, live auction and raffle.

A template is now in place to duplicate the event on any scale in partnership with local boards statewide. The HOME

Foundation Board of Directors is available to assist local associations with fundraisers. Seventy percent of the monies generated are returned as grants to 501(C)3 organizations providing affordable homeownership opportunities in the local area where the funds are raised.

How can you help?Local Associations - Create an

entertaining community event to feature local businesses and support the HOME Foundation and affordable home ownership. Why not host an Ice Cream Social (Tillamook), Wine Tasting (Yamhill), Watermelon Contest (Hermiston) or Rodeo Booth (Pendleton)? Surely there are even more creative ideas than these!

Broker/Owners – Encourage/expect the institution holding your client trust account to create the client trust account interest sweep or consider choosing a bank with that option.

Individuals – Direct contributions are welcome and are tax deductible.

Attend/Support the Taste of Portland at the Oregon Golf Club, September, 17, 2009, 6:00 – 9:00 pm. Tickets are $30 each or two for $50. You also can either sponsor a booth or provide an auction item. Contact Jenny Pakula 800.252.9115, [email protected], for tickets, to answer questions or to make contributions.

While the Oregon REALTORS® HOME Foundation has a good footing, growth and the establishment of an endowment are the goals for the future. Together we can make it happen! ■


C O U N S E L O R ’ S C O R N E R

Continued on page 7.

Distressed Property Market Stresses Agentsby matt farmerOf Counsel

it is getting a little crazy out there these days. it sometimes seems like the banks’ metaphoric “toxic assets” are creating an all too real toxic real estate market. toxic for the agents involved, that is. there are real estate markets in oregon where the majority of sales involve a distressed property of one kind or another. Distressed properties all too often means third party “loss mitigators,” “investors,” “straw-buyers,” “equity purchasers,” and “foreclosure consultants” of every stripe.

It is getting hard to tell the third parties from the principals. Real estate agents talk about short sales all the time in terms of lenders “accepting” sale agreements as if the lender had somehow become a principal in the transaction instead of a third party. It’s an easy mistake to make given the control the lender has in a short sale. But it misses the true nature of a short sale and missing the true nature of a short sale can cause all sorts of problems.

There are two different kinds of agreements going on in a short sale. On one side are the real property agreements. That side can be as simple as a standard form buyer/seller agreement with an off-the-shelf short sale contingency, or it can be an ugly mess of investor-

drafted documents, options, straw-buyer agreements and the like. Whatever the real estate side looks like, on the other side of a short sale are one or more agreements between the secured creditor(s) and the seller. This side of short sales, the seller/lender side, is about mortgages and notes, not real property. It is about liens and foreclosure. It is about unpaid balances, deficiencies, tax consequences and credit problems.

To do short sales you have to understand that the lender is not a party to the real estate transaction, but is a party to the separate agreement between seller and lender upon which the real estate transaction is contingent. If you are representing sellers in negotiating with banks (not something licensees ought to do lightly and certainly not without training) you need to know something about liens and foreclosure and unpaid balances, deficiencies, tax consequences and credit problems. That doesn’t mean you should become a lawyer. It doesn’t mean you have to give legal advice. It does mean knowing and dealing with the business consequences of short sales.

Like any complicated undertaking, representing sellers in short sales means getting some training and developing


Distressed Property Market Stresses Agents . . . continued from page 6.

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A C C E S S

good business practices and procedures. NAR has a new course in short sales and foreclosures. There are training opportunities available through your state and local REALTOR® associations. A great deal of information is available online by visiting the Oregon Association of REALTORS® website at www.oregonrealtors.org and logging onto the Association’s Risk Management Toolkit. New sections on “Dealing with Foreclosure Consultants” and “Multiple Offers in Short Sales” and Dealing with REOs have been added to the Toolkit.

You can use information gained from training to develop the business tools and practices you need to reduce the risk of being involved in short sales. That includes an addendum to a listing agreement for short sale listings that explains exactly what the agent will and won’t do. It ought to mean focused

buyer service agreements on the selling side. There are short sale “disclosures” out there that were developed to warn buyers and sellers when they enter into a short sale. They cover some of the listing issues, but are focused on the real property transaction side. They don’t cover things like whether the agent will negotiate with the lenders or the seller will hire a third party consultant.

What is needed is something that defines from the get-go the scope of the agent’s duties under a short sale listing, not just a list of horrible things that may or may not happened in a particular transaction. A real estate licensee negotiating with a lender for satisfaction or modification of a note or mortgage so they can close a pending sale is doing the same work as a foreclosure consultant even if they are exempt from foreclosure consultant regulations. If the agent is

going to take on that responsibility, they need to define it up front in writing with their client - not wait for some lawyer to define it for them after the fact.

If, as is so often the case these days, there are third party consultants and investors involved in a deal, serious disclosures and disclaimers are in order. Samples of such deal specific disclosures and disclaimers are available in the “Dealing with Foreclosure Consultants” section of the OAR Toolkit. Oh, and watch out for commission sharing problems with unlicensed consultants. If you are going to be the one advising the use of specific short sale forms and practices, and you are the one who is going to be talking to the lender on the seller’s behalf, it would be a very good idea for you to take all your forms and procedures to your company attorney for review and consultation. ■


When Salem reAltor® John baker was honored with the 2008 Distinguished Service Award (DSA) at the Association’s spring meetings last April, his acceptance was an opportunity for him to talk not about his success in real estate, but about his passion – operation: love boxes for our troops.

Salem REALTOR® Honored with Distinguished Service Awardreal estate is his business, “love boxes” is his Passion

by Joyce beach, Managing Editor

Baker is the principal broker for Ned Baker Real Estate in Salem, a family owned and operated corporation that was founded in 1973. John is a past president of the Oregon Association of REALTORS® and also has been honored as the Association’s REALTOR® of the Year. He received the DSA Award in recognition of his outstanding service and contributions to the Association over a period of more than 10 years.

Although real estate is John’s business, Love Boxes for our Troops has quickly become his passion. Operation: Love Boxes for our Troops was “officially” launched on December 4, 2005 two months after Baker had sent just one flat rate postal box filled with granola, snacks, canned goods and books to a soldier he knew who was on his second deployment to Iraq. On that day in December members of John’s Salem church filled over 500 boxes that then were shipped to troops serving in the Middle East.

The sole mission of the love boxes is to encourage American citizens to fill a box and mail it themselves to a soldier far from home. The two purposes the love boxes serve is to thank soldiers and their families for their sacrifice on our behalf and to raise the awareness of those of us at home to the debt of gratitude that we owe the men and women of America who wear the uniform. Today, thousands of boxes later and with other box efforts starting up all over the area the Love Box website,

these soldiers have just received a love box shipment.

American soldiers in iraq with boxes in hand.



A small but dedicated class of 27 course 300 students received the Gri (Graduate reAltor® institute) designation at the completion of the 2009 spring Gri program in bend in April. the spring offering was the smallest in many years but the graduates represented 11 boards/associations.the next oregon Gri offering will be held november 30-December 3, 2009 at the Sheraton Hotel Portland Airport. We offer our congratulations to the spring graduates and are pleased to recognize them by their board/association affiliation.

Central Oregon Associationrhonda Garrisonbarb Hartnettlynn JohnsKatey KelleyKelsey KelleySue marxJohn Snippenmarilyn Stoner

Clatsop AssociationSally Allegaert

Coos County BoardAlice Stanfill

Douglas County Boardlisa GillPatrice Glasscock

Eugene AssociationDavid DuncanJames HaleShane Persinger

Grants Pass AssociationStefan HarrisKristina Stader

Klamath County AssociationDebra Gisriel

Spring Grads Earn GRI DesignationPortland Metropolitan AssociationJoleen brannStefanie ottersonrobert Zaikoski

Springfield Boardmarlo nixonronda Prewitt

Umatilla County BoardSue bynumJessica minkler

Willamette Associationmelinda Abreschleanna langley

www.loveboxesforourtroops.com, has become a rallying point for programs all across the country.

Baker has chosen to use the Military Flat Rate boxes that are free from the post office because it is the cheapest way to send the goods overseas. They are addressed to specific soldiers, not generically, for the security and safety of military personnel. Military APO addresses can be found on the Love Box website.

On Thursday, May 21 a Love Box packing party was held at the Capitol in Salem, organized by Salem Rep. Kevin Cameron. Legislators, staff members and the public gathered at the Capitol that afternoon and filled over 450 boxes with beef jerky trail mix, granola bars, CDs, books and more.

In his presidential column in the June 1999 issue of this magazine, President John Baker wrote about heroes. He talked of Harry Berhkeimer, a veteran of World War II who, with his son, was saving for a trip to France to visit a beach he had not seen since D-Day, 55 years before. John noted that, “The Berkheimers and the millions of others like them have, throughout our

Salem REALTOR® Honored with Distinguished Service Award . . . continued from page 8.

history, sacrificed for the creation and protection of, among other things, private property rights.”

We congratulate John with his selection as the 2008 DSA recipient and especially

for his work with Operation: Love Boxes. A quote from Benjamin Franklin that John referenced in that same article in 1999 says it best - “Well done is better than well said.” ■

Packed and ready to go back to base.


T E C H N O L O G Y


clients and consumers who live by a green philosophy search for real estate professionals who are prepared, knowledgeable and walk the talk in their green practices. Going Green must become a lifestyle, a standard of practice, a way of means for a real estate professional to engage socially responsible behaviors in their marketing which limit their impact on the environment. Agents who adapt and implement green practices as a habit build trust, loyalty, and more referrals within the green community than those who have only a factual knowledge base.

In marketing alone, non-renewable resources such as ink, paper, cardstock, production time, and extra energy to replicate can be eliminated by incorporating free technologies to serve your clientele. Here are seven ways to GREEN your real estate marketing:1. Begin blogging. Inventory levels

change regularly, new legislation passes frequently and local economic factors evolve on a regular basis. Instead of printing out letters, affixing postage, and mailing out press releases start a blog. Think of your blog as your online real estate newspaper that rotates articles as often as you write to it. Blogs contain pictures, audio, video,

Seven Ways to Green Your Real Estate Marketingby Doug Devitre

multimedia and are stored forever whereas the half life of a mailing is 10 seconds at best. Each entry is its own website. Conserve energy retyping long answers to questions that you have already posted to your blog. Copy and paste the hyperlink of the blog entry into an email piece. This will save time, the most important non-renewable resource.

2. Email newsletters. Printed post cards consume non-renewable energy by designing, printing cutting, affixing postage, sorting, labeling and mailing out each batch. Instead of gathering mail addresses, collect email addresses. Use blog articles, new listings, and client services in an email marketing piece. My favorite email marketing software is www.iContact.com which tracks conversion from the most opened, most clicked link, click by dates and by recipients. There is no need to print out reports when lists can be exported, imported and results optimized to increase email conversion rates.

3. PDF presentation packets. Take every piece of your listing presentation or buyer presentation and convert it to a PDF document. Use free software from http://sourceforge.net/projects/pdfcreator/ to create PDF documents at no cost. The software is installed as a printer on your computer and can print

Doug Devitre

email newsletters

PDf presentation packets

Shared PowerPoint presentations

Video tours

Virtual flyers

Virtual home buyer seminars

begin blogging


PDF documents from any program. The Adobe version is $299 but has more editing and publishing options and can merge multiple PDFs into one. Create an online profile at www.Box.net to store all of your PDF documents online. Box.net will give you a hyperlink for each PDF document and a widget to insert onto your website to store all of your documents within a small section of the screen.

4. Shared PowerPoint presentations. Sales presentations to position yourself or company as expert can easily be shared online using www.SlideShare.net. This website will host your PowerPoint presentations online and share via email, Facebook, Twitter, or embedded into a website or blog. This will save printing costs on the document and travel time meeting the client face-to-face in order to deliver your value proposition. Also, voice over PowerPoint (Slidecast) presentations are available for maximum effect.

5. Video tours. Save time, gas money and printing costs by giving video tours. Invest in the new Flip Video Mino (www.FlipVideo.com) to record video tours of listing inventory, neighborhoods or your office. Now potential prospects can not only see what you have to offer but they can listen to your expertise while you explain the features and benefits of a property, the history of a neighborhood or why your company is the best to work with in town. Upload them to YouTube for free and then share them by email or embed into your website or blog. This way they can get to know you better rather than just looking at a static photo or reading a resume online.

6. Virtual flyers. www.vFlyer.com and www.Postlets.com are great websites to create virtual flyers for pennies on the dollar. These are far more effective than paper copies since multiple pictures are displayed, unlimited descriptions highlight key features, and they can be distributed to multiple listing sites using RSS (real simple syndication) with one click of the button. Three dimensional flyers are much more visual and environmentally friendly than a piece of paper. Companies like www.Obeo.com allow customers to view room sizes, material changes and what upgrades would look like before even stepping foot into the home.

7. Virtual home buyer seminars. Live seminars take extensive planning, require printing of multiple documents along with a physical location where everyone must drive to attend. Room rentals and logistics alone will suck the life out of a presentation. Instead, host the entire event online using a free service at www.StickAm.com. Hook up a webcam (www.Logitech.com) to your laptop and stream your entire presentation live where they can see, hear, and watch you present how to get financing, steps to buying a home, and how to get your keys on the day of closing. Send out an email announcement of the date, time, and website URL of your streaming session and prospective home buyers can ask you questions by instant messaging. ■

Doug Devitre is a recognized national speaker on using FREE, cost-effective and easy to understand language to engage clients through online marketing, communication and advertising. Please visit his website at http://dougdevitredelivers.com/ to receive free tips, how-to videos and ideas to increase profits while saving time.

Seven Ways to Green Your Real Estate Marketing . . . continued from page 10.


C O M M E R C I A L D E V E L O P M E N T

Investors: Make Your Most Profitable Decisions Now! by brian bjornson, Managing Director, Norris & Stevens

real estate investors throughout the U.S. and the Pacific Northwest have been faced with so many changing conditions it is a wonder anyone can stay focused. let’s see . . . does anyone listen to the nightly news or the daily business report? So much negative news about the economy, unavailability of lending due to the banking problems, subprime mortgages, derivatives, AiG, the government stimulus plan, the lack of consumer demand, job layoffs, downsizing of many companies and whole industries (Gm, chrysler and the auto industry as a whole), china wondering if our bonds are safe, and finally, the potential future burden of debt this generation is leaving our children and grandchildren.

Where does it all end? We all know the stock market is 50 percent off its high of about a year ago. But remember gas prices are down 50 percent from a year ago and airline travel is a bargain! It’s all about supply and demand. What to do? It seems

it would be a great time to buy, if there were only financing available at good rates and 75 percent LTV. No one can make effective decisions in isolation. We are bombarded by exterior ideas and forces. One of those forces could be that you want to restructure your investment property portfolio. But fear of paying too much, or not getting what you want, stops you in a gridlock of indecision.

In spite of all the economic conditions, apartment investment remains the least risky, best performing real estate investment. Oregon and southwest Washington prices are not at “rock bottom” as investors may find in other markets such as Las Vegas, Phoenix or areas of southern California. Those markets present a much different dynamic, one in which existing condominium and single family home rents have been pressed downward so severely that they have begun to effect apartment occupancies and rental levels in a negative way.

Our region is different, partly due to our land use regulations and urban growth boundaries, as well as lower price structures which didn’t provide feasibility to any and all new developments. Thus, although we are not in perfect economic shape (with about 11 percent unemployment according

to the Oregon Labor Trends), most properties with good management are still able to provide adequate returns to meet operating expenses and regular cash flow. Rental incentives exist, but not to the same degree they did during the rush to buy homes a few years ago.

If you are waiting for that “deal of deals,” the one you talk about with your friends, you may have already missed it. There is a better selection of properties available now than we have seen in many years. Though some of our traditional sources of leveraged lending have changed, financing is still available. Serious buyers or sellers must arm themselves with an experienced apartment investment broker, no matter what they do. That way, they will receive a fair market price for their property. If they plan on a §1031 trade, they will be able to upgrade their portfolio with a property that may be in a much better location with better long term potential. A total win.

When it comes to pricing, I know it is hard to forget the highest price you ever heard for your property but you need to forget it. GET REAL! Then you will move ahead and be positioned well for whatever the future economy throws at us. ■

brian bjornson


“Our goal is to reach out to ALL members and All Associates with the Right Tools. Right Now.”

—The National Association of REALTORS®

The current state of the economy and housing market presents members with significant challenges — and many have turned to their association for help in addressing them.Members need help increasing business to ease the financial strain they are experiencing.Members need valuable tools that can help them in their daily efforts—today.How? NAR has developed an initiative that will provide a variety of publications, education, services, resources and tools for FREE, at cost, or at significantly reduced pricing, such as:• RSPS, Appraised, and International webinars – FREE• Risk Reduction online course – at cost• “It’s a Great Time to Buy” brochure – FREE• “It Pays to Work with a REALTOR®” brochure –FREE• RESPA Pocket Guide – FREE• Fair Housing Handbook – FREE• REBAC Homebuyer Toolkit – buy one, get one free• 2008 Profile of Home Buyers and Sellers – FREE• Real estate sales and marketing tips books – at costNAR is also rolling out a new program available to help educate REALTORS® on the foreclosure process: “Unlocking the American Eonomy: A Foreclosure Prevention & Response Program.”Watch for monthly additions to the products and services. All the details and downloadable materials are available at www.realtor.org/RightTools.

RIGHTTOOLSRIGHTNOW.

for seven years Diane Steeves & Associates has delivered a “sponsored group” voluntary long term care (ltc) insurance benefit to members of the oregon Associations of reAltorS®. During these years it has been our pleasure to meet with Association members statewide, visiting over 100 office meetings and a variety Association sponsored events and conventions as a sponsor.

We have been warmly received from Baker City to Ashland and are proud to say that hundreds of REALTOR® members and family have responded to the message that “nothing is as preventable as the swift and total financial devastation that comes from a long term care stay” (Suze Orman). LTC insurance is the financial “firewall” that stands between your assets and the compounding cost of care. With care costs already between $4,000 and $6,000 per month and the risk of needing LTC standing at 70 percent if you reach age 65, there is no insurance product you are more likely to use than LTC insurance.

LTC is assistance or supervision given to a person who has either a physical or cognitive disability that causes them to lose their independence. This loss can be either temporary or permanent and can be caused by illness, accident or aging. Amazingly, 40 percent of the people using LTC services are working age adults under age 60. The vast majority, 85 percent, of LTC is given at home or in a community setting not a facility. What LTC insurance provides is the money to pay for the care. What the money buys is the choice to have care where you want to be. LTC insurance gives your family peace of mind and allows them to do what they do best, care about you not for you.

Insurance Benefits That “Pay Off ”by Diane Steeves, Diane Steeves & Associates

Business owners receive a 100 percent tax deduction for premiums paid for LTC insurance as a “business” expense and Oregon offers a 15 percent state tax credit on the paid premium for LTC up to $500. Last year Oregon became the 18th state to participate in the “partnership” LTC program. This means that if you purchase a “qualified” LTC insurance policy and deplete the benefits you become eligible for state assistance without having to “spend down”.

The true value of LTC insurance is the “pay off ” you receive when the care is needed. This year I have three Association members on claim with LTC policies they purchased through the Oregon REALTORS® sponsored LTC program. Each of these members has already recovered everything they paid

in LTC premiums, even the gentlemen who purchased the plan at age 72 and paid premiums for over seven years before he made a claim. Today his cost of care is $4,000/month and has been fully paid by his LTC insurance since last July.

The simple math of this example tells the true story of the pay-off value of LTC insurance: regardless of your age at the time of purchase, regardless of the premium you pay for LTC insurance, you will never pay more for the insurance than you would for one year of care, and the average length of care is over four years. Most clients recover all premiums paid within the first six to 12 months. LTC is not a matter of “if ”, it is a matter of “when”. Your only decision is how you decide to pay for it. What is your LTC plan? ■


G O V E R N M E N T A F FA I R S

Legislators Enter the Final Stretch of the 2009 Sessionby Jana JarvisV.P. Public Policy


the tenor in the capitol at the end of May indicated we are entering the final stretch of the 2009 legislative session. many policy discussions have morphed into political battles and the budget looms as the primary battlefield in this year’s war zone. When the may forecast was released you undoubtedly read that revenue projections were nearly four billion dollars short of maintaining current service levels in state programs. Shortly after the state economist announced this shortfall the Ways and means co-chairs announced their proposed solution - a combination of a $2 billion cut in projected spending; $900 million in revenue through new taxes; the allocation of over $900 million in federal stimulus funds and the use of over $350 million in reserve funds.

This announcement sparked a Republican response and this battle has taken on a largely partisan tone. Republicans offered their “Main Street Proposal” that reduces state spending by targeting the 2007-2009 spending levels and includes no new taxes or fees. Since the Democrats hold a super majority in both chambers, this proposal is not likely to be discussed and the battle has moved to where the additional 5.3 percent tax revenue will come from. Potential solutions range from increasing the corporate excise and minimum tax, increasing the income tax rate to 11 percent for individuals earning over $125,000, changing Oregon’s tax policy to include a gross receipts tax on business to ‘means testing’ the mortgage interest deduction. Where this will all end up is anyone’s guess at this point, but

oregon reAltorS® meet with key congressional staff at the may nAr meetings in Washington, D.c.

whatever is proposed will need to fill this nearly $1 billion gap in the proposed 2009-2011 budget.

One of the most serious discussions to date has been the $300 million transportation package that recently moved out of the House. Funding for this package will come from a combination of vehicle registration fees and gas tax increases phased in by 2011. While we had initially taken a position in opposition to this, amendments were adopted that removed the Vehicles Mile Traveled (VMT) tax from the original bill and the proposal that passed was something we could support. This bill will undoubtedly result in new jobs in all parts of Oregon and will begin to address many of the transportation needs that have been part of policy discussions for a number of years.

Land use policy discussions have been difficult and complicated this legislative session. Policies allowing some additional local control in land use decisions such as those proposed in the Big Look Task Force recommendations have moved forward. At the same time proposals transferring future siting decisions for destination resorts from the legislature to LCDC are also moving forward. Some of these proposals likely will become highly politicized in the waning days of legislative negotiations.

REALTOR® proposals, however, are moving forward and nearing the finish line. Our education bill, SB 640-B, has passed unanimously out of committee and is headed to the House floor for a final vote.


Legislators Enter the Final Stretch of the 2009 Session . . . continued from page 14.

HB 2910-A, our technical fix to the sole practitioner licensing category, has passed out of the Senate Consumer Protection Committee unanimously and is on its way to the Senate floor for a vote. Finally, HB 2481-B, our bill to prohibit the practice of private transfer taxes has also moved out of committee and is headed to the Senate floor for a vote within the next few days.

Some of our policy discussions also have included ideas concerning maximizing the federal $8000 tax credit for first time home purchasers to stimulate the housing market in Oregon. In meetings with Oregon Housing and Community Services (OHCS) we determined that some state dollars could be directed to programs that would ‘monetize’ this tax credit for a number of potential first time home buyers without any legislative ‘fix’. A number of states are working on similar proposals and there seem to be a variety of potential solutions. This was also a topic of discussion at NAR’s conference in Washington, DC this past May. One full day of programming was devoted to a real estate summit that included speakers representing all perspectives of the housing and lending crisis. HUD Secretary Donovan addressed the conference and indicated they were in the process of drafting provisions to allow states to develop loan programs for down payment assistance that would utilize this tax credit as security.

Other federal issues discussed in Washington DC included proposals to stabilize and provide liquidity to the commercial real estate market. With over $1 trillion of commercial real estate loans expected to mature in the next few years, having sufficient credit capacity to refinance these loans is vital to our national economy. Extending the Troubled Asset Relief

Program (TARP) to commercial lending was one of our key talking points and the Oregon delegation was keenly interested in our solution to this issue. Point of Sale mandatory energy audits, preserving the mortgage interest deduction and health care coverage for the self-employed and small business were also on our agenda to discuss with Congress. Interestingly enough, all of these are also state issues that we have been working on in Oregon this legislative session.

I understand the great value that YOU as an individual member of the Oregon Association of REALTORS® have to contribute to our legislative success. Without the 600 of you who attended REALTOR® Day at the Capitol last March, a number of our policy items would not even have had a hearing. This is only the beginning of what we could accomplish as an organization on your behalf! To do that we must take the next step as an organization by increasing our

Senator ron Wyden listens to his reAltor® constituents.

reAltor® byron Hendricks (right) makes a point to rep. Jeff merkley.

RPAC investment and energizing our Call to Action responses. We need your involvement to accomplish this. You know first-hand how policy decisions can affect your business. There is no better time or opportunity for you to become involved! ■


How does “Good Faith” Affect my Buyer’s Request for his Earnest Money?

Jenny PakulaDeputy CEO &

Asst. Gen. Counsel

H O T L I N E H I G H L I G H T S

Question: i have a client who wants to get out of a sale agreement for a newly constructed home. the seller has signed the exclusion on the Property Disclosure Statement but the inspection has not been completed. my buyer wants their earnest money returned. Will they get it?

Answer: This issue can be difficult for brokers and the applicable law in Oregon doesn’t make it much easier. The issue we are addressing here is using contingencies as “weasel” clauses. Oregon is a “good faith” contract state. This means that a duty of good faith performance is implied in every contract. Oregon also follows the “objective theory” when addressing the enforceability of contracts. The objective theory means the contract, and performance under it, is judged from the viewpoint of a hypothetical reasonable person, not from the viewpoint of the actual parties. When a buyer disapproves of a report or otherwise takes some action allowed under the agreement to cancel or terminate, the issue is whether the action was taken in good faith. Remember this is judged from the view point of a hypothetical reasonable person.

Good faith is a legal term of art. Although, contrary to logic, good faith

does not depend on subjective motivation. Instead, it depends on whether the action taken or withheld was reasonable given the

text and context of the contract as viewed by that same hypothetical reasonable person. Perhaps an example would help clarify this. A husband makes an offer on a house before his lovely wife can see it. The offer is accepted. The wife shows up a couple of weeks later and hates the house. The husband then disapproves of an inspection report pursuant to the inspection clause in the sale

agreement. The sellers sue claiming the buyer husband terminated because of the wife’s dissatisfaction with the house, not the husband’s dissatisfaction with the report. The seller likely will lose. According to the Oregon Court of Appeals, the buyer husband’s motive for disapproving of the report was irrelevant as long as the report contained sufficient grounds that a reasonable person in the same circumstances might have disapproved. In the Court of Appeals case the inspection report showed some evidence of dry rot from an undetermined source so the Court had no trouble ruling against the seller.

The lesson to take away here is that if you have something concrete enough to pass the reasonable person disapproval



How does “Good Faith” Affect my Buyer’s Request for his Earnest Money? . . . continued from page 16.

threshold, the buyer’s motive for termination under an approval contingency doesn’t matter. The problem with that, of course, is that the client is going to ask their broker whether they have reasonable person grounds sufficient to terminate. That puts the broker in a difficult situation if they know the true motive. That is the case because the broker doesn’t just have a good faith performance duty like the buyer, but an obligation of honesty to all parties. This basically means a broker response along the lines of: “I can’t advise you on this; you have to make up your own mind on the report taking into consideration whether disapproval is reasonable and, if you are in doubt, see your lawyer.”

Who Will be Entitled to Compensation?Question: one of my brokers left a real estate brokerage while in the middle of a transaction (currently in escrow) in which he was acting as a buyer’s agent. the buyer has never been contacted by the old brokerage and has contacted my broker regarding the poor customer service. the buyer made it clear they don’t want to work with the old brokerage and wants her file transferred immediately. Will the former brokerage be entitled to any compensation?

Answer: Yes, the former brokerage will be entitled to compensation and, worse yet, you will not. There are two issues here. One is representation of clients and the other is entitlement to compensation under contract. Who provided services to the buyer or seller and who may or may not continue to provide those services is irrelevant as far as the transaction itself is concerned. There is no such thing as “transferring” a transaction.

A principal can end an agency relationship at will by simply removing the broker’s authority to represent them. Such a unilateral action by the principal ends the agency relationship but it has no effect on anything else. It doesn’t change what has already happened. Here, the buyer has long since been “procured.” That triggered the right to the co-op commission from the listing brokerage under their unilateral offer of compensation. Removing authority to represent has no impact on the unilateral offer of compensation and therefore no impact on the commission.

If the buyer now wants to terminate the relationship with the old brokerage and seek representation from your agent, someone is going to have to pay for that representation (unless they want to

take on the responsibility for no compensation). The buyer can’t hire your agent directly because agents can conduct professional real estate activity only through their principal broker. As the principal broker, you can undertake representation of the buyer from here on out if you want to and assign the agent to provide the services, but that entitles you to no commission because this buyer has already be procured by the other brokerage. The old brokerage will pay your agent for what she did while she was that brokerage’s agent, but they will owe your company nothing even if you undertake representation.

Real estate transactions are between the buyer and seller and are not affected by who represents or doesn’t represent whom. Commissions are about separate compensation agreements. If you want a new client, all you need is something that explains the relationship and how your brokerage will be paid. The old brokerage is the only one entitled to anything from the seller though the listing agent. Your new agent will have a claim to part of that brokerage commission under their old agreement with that company. Your company will have no claim for representing the buyer after the deal has already been made and is sitting in escrow waiting to close. ■

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The modern era of globalization began after World War II through growing political and economic alliances. Six decades later nearly one-third of all REALTORS® have completed international real estate transactions involving a seller, buyer and/or use of foreign lending. Although real property is stationary and localized, buyers, sellers and financing elements are often transitory. In 2004 Oregon welcomed 103,835 tourists, students and work-related im-migrants. There were 3,612 immigrants to Oregon who became U.S. Citizens that year. Ethnic and cultural diversity enriched our state with people from China, India, Mexico, Philippines, South Korea, Ukraine and Vietnam. In 2006, the Oregon Association of REALTORS® International Business Council established clear goals and guide-lines that mirror NAR-International

Operations. Today the Oregon Associa-tion of REALTORS® is the NAR-ap-pointed Ambassador association to the country of Vietnam and last year won the 2007 International Ambassador Associa-tion of the Year award. Our members have the benefit of learning more about real estate and business practices overseas and across borders, along with investment opportunities for clients right here in our own front yard. Through 2010 inbound migration is estimated to result in five million new households in the United States. The OAR-IBC is gearing-up to help brokers and other professionals identify ways to expand their business practices by reaching this growing market sector. ■

For more information on getting connected with the Oregon REALTORS® International Business Council, go to www.oregonrealtors.org/international or visit our blog: www.oregonrealtors.org/IBC/IBC_BLOG/ to view the latest posts.

BuildingOn WhatWe KnowJack R. ThomasChairman, OAR-IBC Advisory BoardCertifi ed International Property Specialist

G L O B A L V I E W

Spring 2008 | OREGON REALTOR | 19


$900,000

$800,000

$700,000

$600,000

$500,000

$400,000

$300,000

$200,000

$100,000

$133,713.63

Invest in RPAC like RPAC invests in you! Invest now!

Progress as of 5-31-2009

REALTOR® PAC GOAL

$828,500it is vitally important to your business that reAltor® PAc continues to be a priority for the real estate industry. Year after year reAltorS® come to the table to speak on issues affecting them and the path is paved by reAltor® PAc. As such, it is critical that we have the support and investors necessary to put up a good fight. Without these two crucial ingredients, reAltor® PAc would not exist.

So, what is being done around the state to help boost education and investments in REALTOR® PAC? The East Metro Association of REALTORS® (EMAR) kicked off the 2009 REALTOR® PAC fundraising year with their annual EMAR Super Meeting earlier this year. The event not only provides educational opportunities for their membership but it also serves as a podium for REALTOR® PAC awareness, emphasizing the importance of participation in the political arena. In combining these two critical elements needed to keep the organization on the cutting edge of information, they’ve created a perfect storm of fundraising conditions. With hundreds of attendees, EMAR brought in $2,750 for REALTOR® PAC with just a short presentation. Kudos go out to the East Metro Association for creating such a well-attended and successful event that not only benefited their members but also brought in dollars for REALTOR® PAC.

Going forward, the Oregon Association of REALTORS® hopes to see more such events that can boast such success from all corners of the state. As of May 31, 2009, Oregon has raised $133,713.63 for the PAC, which is only 16.14 percent of the state goal. Last year at this time we were almost

REALTOR® PAC: Making Strides

$40,000 above this amount, having reached 18.39 percent of our goal. We need to kick into high gear!

There are still four prime months left in this REALTOR® PAC fundraising year to take advantage of. Begin planning your event today; it’s the perfect time to come together. Do you think your local membership would participate in RPAC Idol? What about a chili cook-off? Would your region be better served with a golf tournament or an auction? The options are endless and the opportunity to get creative and have a little bit of fun is just what your members may be looking for. Is your local REALTOR® PAC Committee stuck in a rut? Have ideas fallen through the cracks? Let the Oregon Association of REALTORS® help. REALTOR® PAC Manager Kelli Thompson is available to all local associations to provide any assistance needed.

As an additional resource, REALTOR® PAC regional training has begun for all local REALTOR® PAC chairs, committees, executive officers and association presidents interested in attending. The training serves not only as an opportunity to get answers to questions you’ve always wondered about, but also as an avenue to voice comments and concerns and participate in a brainstorming session. This is a chance to come face-to-face with the people who really make a difference—YOU!

If you have not yet made your invest-ment in REALTOR® PAC, don’t wait any longer. Call Kelli Thompson today to get your incremental monthly investments set up through our online system. You can also go online and invest today at www.InvestinREALTORPAC. com. ■


A community event to benefi t the Oregon Association of REALTORS® HOME Foundation

Enjoy the best cuisine Portland has to offer while supporting this important cause!

Join us for an evening of fun, food, networking, and entertainment.Thursday, September 17, 2009, 6:00-9:00 pm

Oregon Golf Club • 25700 SW Petes Mountain Rd., West Linn, OR 97068

Cuisine from more than 24 local restaurants & caterers, silent auction & raffl e to benefi t the Oregon Association of REALTORS® HOME Foundation, providing fi nancial resources to create, expand, and encourage home ownership opportunities for Oregonians at or below local median income.

www.oregonrealtors.org/About_OAR/Home_Foundation/

For more information about this event or other ways to become involved in our solution to affordable housingin Oregon, please call (800) 252-9115 or visit www.oregonrealtors.org

A Taste of Portland2 nd Annual

TICKETS: $30 EACH / $50 FOR TWONO-HOST BAR

Tickets are available for advance purchase from:East Metro Association of REALTORS® 1217 NE Burnside, Ste 603, Gresham, OR 97030

Portland Metro Association of REALTORS® 5331 SW Macadam Ave, #207, Portland, OR 97239Oregon Association of REALTORS® 2110 Mission Street SE, Salem, OR 97308

Tel: (800) 252-9115 • Limited Ticket Availability

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EvENTSCALENDAR2009 AT-A-GLANCE

JULY 16Summer Webinar Series: Managing Risk in the Distressed Property Market“Dealing with Foreclosure Consultants”www.oregonrealtors.org

JULY 30Summer Webinar Series: Managing Risk in the Distressed Property Market“Dealing with REO Properties”www.oregonrealtors.org

AUGUST 13Summer Webinar Series: Managing Risk in the Distressed Property Market“What is Going on with Short Sales?”www.oregonrealtors.org

AUGUST 24-25NAR Leadership Summitchicago, ilnAr 312/329-8200

SEPTEMbER 17Taste of PortlandHOME Foundation Fundraiseroregon Golf club, West linnwww.oregonrealtors.org

OCTObER 13-14Fall Education EventMarket Success SummitSalem conference center (tentative)

OCTObER 14-15Oregon REALTORS® Governance Meetings& Installation ProgramSalem conference centeroregon reAltorS® 800/252-9115

NOVEMbER 11-16NAR Annual Convention San Diego, cAnAr 321/329-8200

NOVEMbER 30-DECEMbER 4Oregon GRI (REALTOR® Institute)Sheraton Hotel/Portland Airportoregon reAltorS® 800/252-9115

Oregon REALTOR Magazine

Documents

Transcript of Oregon REALTOR Magazine