NAR Bars Sexual Orientation Discrimination

The change to Article 10 of the REALTORS® Code of Ethics passed in a roll-call vote by a greater than 9-to-1 margin. It had been previously approved by the Professional Standards Committee and the Board of Directors at the 2010 Midyear Meetings in Washington D.C. Here is the amended language of Article 10 (additions are underlined):

REALTORS® shall not deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status, or national origin, or sexual orientation.

REALTORS® shall not be parties to any plan or agreement to discriminate against a person or persons on the basis of race, color, religion, sex, handicap, familial status, or national origin, or sexual orientation.

REALTORS®, in their real estate employment practices, shall not discriminate against any person or persons on the basis of race, color, religion, sex, handicap, familial status, or national origin, or sexual orientation.

A related recommendation amending Standard of Practice 10-3 was approved as well:

REALTORS® shall not print, display or circulate any statement or advertisement with respect to selling or renting of a property that indicates any preference, limitations or discrimination based on race, color, religion, sex, handicap, familial status, or national origin, or sexual orientation.

The amendment was discussed prior to the vote. A few of the questions raised were:

1. Is “sexual orientation,” without qualifiers or any further explanation, the right phrasing?
2. Is NAR denying private property rights (ostensibly, the right of property owners to refuse to do business with people of a certain sexual orientation due to their moral beliefs)?
3. Should NAR precede the federal government in adding sexual orientation as a protected class?

In response to the third question, a delegate from Minneapolis pointed out that the purpose of the Code of Ethics was to hold REALTORS® to a higher standard. Another delegate who approved of the amendment said the Code of Ethics was a living document.

Delegates approved the Code change by voice vote, but one delegate called for a vote by ballot. In ballot voting weighted by size of local association, the amendment passed by more than 93 percent.

- Brian Summerfield, REALTOR® Magazine

Builders Diversify to Survive During Slowdown

Builders are finding that their survival in the weak new-home market depends upon creativity.

Builders increasingly are branching out into interior renovations, especially as firms consolidate numerous locations into a single building.

High-end custom builders are serving homeowners who have decided to stay put, erecting trellises, arbors, potting sheds, and other structures for them.

Additionally, some builders now serve as consultants, helping real estate agents identify and fix structural defects that impede home sales.

Source: Wilmington, N.C., Morning Star, Wayne Faulkner (09/19/10).

Fannie, Freddie in the Home-Selling Business

Fannie Mae and Freddie Mac repossessed more than 191,000 homes during the first six months of 2010, twice as many as a year earlier.

The mortgage financiers must act carefully to avoid flooding the market with foreclosures, which tend to depress neighborhood home prices in the process.

As an alternative, Fannie Mae has launched a pilot “lease-and-hold” program in which foreclosures are rented rather than sold; the move could pose challenges, however, as the firm takes on the new role of property manager.

Source: The Wall Street Journal, Nick Timiraos (09/17/10)

Tax Credit Extension Passes; Senate OKs Flood Bill

After a close brush with a deadline that could have impacted tens of thousands of home buyers, the U.S. Congress last night passed an extension of the Home buyer Tax Credit closing deadline.

The extension is included in the Home Buyer Assistance and Improvement Act (H.R. 5623) and will prevent as many as 180,000 home buyers from losing their eligibility for the tax credit through no fault of their own. These households had home purchase contracts pending as of April 30 and had until June 30 to close on their purchases to claim the federal tax credit. Under the legislation that passed last night, these households now have until September 30 to close.

The NATIONAL ASSOCIATION OF REALTORS® supported extension of that closing deadline because buyers are experiencing delays in getting their financing closed. The delays are the result of the large number of transactions that are short sales, which can take a long time to close, and the rush of transactions lenders are processing from buyers submitting contracts before the April 30 contract deadline.

The legislation, which now goes to President Obama for signature, is designed to create a seamless extension of the closing deadline; there will be no gap between June 30 and the date the President signs the bill into law.

NAR worked closely with congressional leaders on both sides of the aisle in supporting lawmakers’ passage of the legislation, which the association says will help provide additional stability to real estate markets across the nation.

Separately, the U.S. Senate also last night passed the National Flood Insurance Program Extension Act of 2010 (H.R. 5569), which extends the National Flood Insurance Program until September 30. This will allow home purchases in the 100-year floodplain to move forward. The House passed the bill last week.

When signed into law by the President, the bill, which will apply retroactively, will cover the lapse period from June 1 to the date of enactment of the extension. Without flood insurance, households buying homes in the 100-year floodplain cannot obtain mortgage financing.

More information on both pieces of legislation is at REALTOR.org.

Single Buyers Choosing Suburbia Over Cities

Some 52 percent of single home buyers in April chose suburban locations over urban and rural areas, according to a survey by Coldwell Banker of 1,000 single buyers.

· More than 53 percent of single home owners reported that they purchased a home because it was more cost effective than renting in their area, while 68 percent of single home owners purchased a home that was less expensive than they believed they could have afforded to pay.

· Some 55 percent have less than a 30-minute commute to their office or work from home.

· Singles don’t shy away from foreclosures – especially single men. Thirty-eight percent would currently consider purchasing a foreclosed/short sale home, compared to 29 percent of single women.

· Of the 13 percent of single home owners who own their home jointly with another person, 49 percent made the purchase with their parents. Forty percent live less than 30 minutes or even in the same neighborhood as their parents or extended family. An additional 12 percent live with at least one family member.

· Number of bedrooms is important to 27 percent of single women, while only 18 percent of men were concerned.

What to Do If the Oil Spill Affects Your Market

Anyone trying to rent or sell a property on the Gulf Coast should keep these issues in mind.

• Don’t panic. The next few months could be difficult, but this too shall pass.
• Be forthright. Address the issues on your Web site and on the Web site for your client’s property. Say something like, “We know you’re concerned about the oil spill; we are too.” Add links to reliable news stories and blogs.
• Take pictures. Date-stamped photos of clean water may reassure would-be buyers and renters.
• Focus on non-beach attractions. Golf courses, shopping, and theaters are important and unaffected assets.
• Be prepared to negotiate. Bad news brings out bargain hunters.
• Document losses. Help sellers by providing a broker’s price opinion to serve as a baseline should property values decline, and pursue compensation from the government or BP.

Is a Housing Shortage Coming?

Some experts are saying that the next big real estate problem could be a shortage of homes.

Only 672,000 new homes were started in April. That’s less than half the number needed to meet the country’s average population growth.

In the past, an average of more than 1.3 million households have been built each year, creating demand for 1.5 million new homes. In 2009, only 398,000 new households were formed, according to the Census Bureau.

“The decline in household formation is artificial,” says James Gaines, a real estate economist with Texas A&M. “The young are moving in with their parents. There’s even doubling up among working-class people. There’s a pent-up demand coming if and when the economy recovers.”

Some economists believe this analysis fails to take into account the changing economy or the large inventory of vacant properties. But Gaines and others say these factors are unlikely to significantly drive down demand.

Dealing With IRS Tax Credit Rejections

The IRS has been rejecting first-time home buyer claims from anyone who shows a Form 1098 Mortgage Interest Expense in their prior year files.

In many cases, the applicants are entitled to the credit because their previous mortgage interest deduction is for a timeshare, mobile home, boat, or other recreational property.

If you have a client who is in this unfortunate position, here is some advice from Enrolled Agent Eva Rosenberg, who authors the Web site TaxMama.com.

• Respond to the IRS immediately and tell them why their rejection is wrong. Be prepared to prove that the mortgage the IRS is seeing isn’t on a personal residence. First-time home buyers are entitled to own other types of real estate and still get the home buyers credit, so provide proof that the previous mortgage was on something else.

• Send a letter explaining the situation and providing proof of a previous rental or other non-ownership living situation, including copies of rental contracts for the last three years, an old driver’s license showing that address, utility bills, etc.

• Home buyers who believe the IRS may view their situation in this way should be proactive, providing proof that they are a first-time buyer when they initially file for the credit.

• Anyone who is rejected after two attempts to explain the problem to the IRS should call the Taxpayers Advocate Service toll-free, (877) 777-4778, their Congressman, and their Senator, Rosenberg advises.

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