NEW Counsel’s Roundtable: Managing Broker Risks

 JUNE 22ND

 Managing Broker Risks in Today’s Real Estate Environment

2

Exclusive to Brokers and Managers ONLY

Don’t Wait – Limited Seating Remains.

Managing Broker Risks in Today’s Real Estate Environment

  • Liability issues created by teams and assistants
  • Advertising and marketing compliance pitfalls
  • Poor use of form and contracts create bad transactions
  • “Managing” without “Controlling”

Testimonial from Previous Counsel Roundtables

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Brad BoydFEATURED INSTRUCTOR: BRAD BOYD | Brad has instructed courses for groups ranging from 7 to 700, and has taught more than 50 CE and training courses covering real estate and legal topics. He has practiced law for 15 years, with more than 10 years of experience focused specifically within the real estate brokerage industry. Brad has served as the outside general counsel to the Minnesota REALTORS® for 8 years and continue to serve in that role.

$99 | MN REALTOR® Headquarters, Edina | 9:30AM-Noon

Contact Katie Kuhn to register at 952-912-2673 or kkuhn@mnrealtor.com

The Minnesota REALTORS® is the largest professional trade association in the state with more than 17,000 members who are active in all aspects of the real estate industry.

 

 

LEGISLATIVE PERSPECTIVE ON MATERIAL FACT DISCLOSURE

The theme of the RESOURCE this month is material fact disclosure. Since this is the Governmental Affairs article, we wanted to provide some of the legislative history regarding Minnesota’s material fact disclosure laws.

The legislation which established the duty for real estate licensees to disclose material facts to prospective homebuyers was passed by the 78th Minnesota Legislature during its 1993 Regular Session. In 2010, the Legislature reorganized Chapter 82 and moved the licensee material fact disclosure requirement into its current section of law – Minn. Stat. 82.68 OTHER DISCLOSURE REQUIREMENTS.

The legislation which established the duty for sellers to disclose material facts about their property to prospective buyers was not enacted until the 2002 Regular Session of the 82nd Legislature. The 2002 legislation created an entirely new section of law. The material fact disclosure law for sellers was expanded in 2004 by striking language in the law that only required homeowners to disclose material facts, “…pertaining to adverse physical conditions in the property.”

An interesting side-note is that Senator Ann Rest-DFL, New Hope, and Senator Warren Limmer-R, Maple Grove (and a REALTOR®), two of the Senate authors of the 2002 material fact disclosure bill, are the only bill authors in either the Senate or the House who are still members of the Legislature.

Taking an issue from the initial idea stage through the legislative process, and ultimately seeing that idea enacted into law, is typically a lengthy and difficult endeavor designed to produce law that stands the test of time. An argument could be made that the system was successful with respect to material fact disclosure.

However, proposals directed at changing material fact disclosure laws – particularly to highlight a specific issue – continue to be of interest to legislators, state agencies, and other groups at the State Capitol.

Over the past several legislative sessions, various interest groups have approached the Legislature wanting to create new disclosure laws for specific issues. When faced with these proposals, Minnesota REALTORS® attempt to educate interested parties and legislators regarding Minnesota’s existing comprehensive and robust material fact disclosure laws.

Instead of making a finite list of items that would be wrought with loopholes and require constant updating, the thoughtful 1993 and 2002/2004 Legislatures gave us timeless statutes that are based on a simple but sound principle – regardless of how big or small the issue, if it could affect the prospective buyer’s use and enjoyment of the property, it needs to be disclosed.

Paul

 

Paul Eger

Vice President, Governmental Affairs

peger@mnrealtor.com

 

Ryan

 

Ryan E. Hamilton, JD

Associate Legal Counsel

rhamilton@mnrealtor.com

 

The Minnesota REALTORS® is the largest professional trade association in the state with more than 17,000 members who are active in all aspects of the real estate industry.

R.E.Sources for a Busy Broker

BBC1

RPR for Brokers with Speaker: Ray Gronowski, VP of Broker Services *

  • How your agents use RPR to search, price and valuate, to create CMA’s and a number of available reports to impress and educate clients
  • Benefit your associates with acquiring listings and servicing sellers and buyers
  • How you can run analytic reports by using Market data tool

*This course has been approved by the Minnesota Commissioner of Commerce for 1 hour of real estate continuing education.

D.A.N.G.E.R Report for Brokers with Judd Sampson & Todd Shipman **

Definitive Analysis of Negative Game changers Emerging in Real Estate

  • Identify the most significant threats, risks, and black swans that could possibly impact YOU as a Broker. (Business Models, Technology, Team v. Individual Agent, Market Share, Brokers Going Broke, MLS’s and more)

**This course has been approved by the Minnesota Commissioner of Commerce for 2 hours of real estate continuing education.

MAY 18th | Brackett’s Crossing Country Club

Registration Fee $39 | 8 AM Registration & Breakfast | 9AM-Noon Program

FULL DETAILS AND REGISTRATION HERE

The Minnesota REALTORS® is the largest professional trade association in the state with more than 17,000 members who are active in all aspects of the real estate industry.

THE PLATINUM RULE

Recruiting Secret

Treat others the way they want to be treated.

By Larry Kendall, chairman of The Group, Inc. and author of Ninja Selling

Top sales people come in all shapes, sizes, and personalities. A one size fits all recruiting strategy is doomed. For many managers, their strategy is to recruit the way they want to be recruited. In essence, they are practicing the Golden Rule: treat others they way you want to be treated. We find the most successful recruiting managers practice the Platinum Rule: treat others the way they want want to be treated.

You can discover a recruit’s personality, motivation, and decision strategy by asking questions and observing his or her behavior and body language. Notice whether he seems to be outgoing or more reserved. Is she more people (relationship) oriented or task (bottom line) oriented? These two dynamics form the four basic personality types as show below.

Real Trend

Power People are task (goal) driven. They want to know if you have a system to help them achieve their goals. They like staff support and systems. They are bottom-line, result-oriented sales people. They are focused on their future and impatient to get there. They do not like a long, drawn-out, multi-interview process. When they are ready to go, you better be ready to hire them.

Party People are all about the relationship. Do they like you? Do they have friends in your company? Their key driver is fun. Will your company be a fun place to work? They often comment that their old company is no fun anymore. Meet with them at a bar, restaurant, or golf course. Have fun with them. Perhaps bring along their friends who work in the office. Focus on your culture, people, parties and activities. Party people are not detail oriented and will appreciate your staff systems, so focus on your support for them. The love attention. They are impulsive. If it feels right, they do it.

Peace People are risk avoiders who don’t like change. As a result, they are the most difficult to recruit. In your office, they are also your most loyal team members. They want everyone to get along and are a stabilizing influence as they work to keep the peace. They want stability and a manager/owner they can trust. They are very slow decision makers and move away from their existing company rather than moving toward a new company. They leave their current company because of instability or their loss of trust. Be their choice (stability and trust) when they are ready to move.

Perfection People are seeking the perfect company. The space where you interview them needs to be neat and perfect. Any printed material needs to be perfect. Your emails with them need to be perfect. They will ask a lot of questions about your numbers and systems. They are slow decision makers and may build a spreadsheet comparing various companies. They love data and want to be the source of real estate knowledge for their clients. If you can help them do this, they will want to join you.

As you can see, one strategy does not fit all the personality types. Practice the Platinum Rule, and you will experience greater success in your recruiting and managing of your team members. ^

This article originally appeared in the May 2016 issue of the REAL Trends Newsletter and is reprinted with permission of REAL Trends Inc. Copyright 2016.

The Minnesota REALTORS® is the largest professional trade association in the state with more than 17,000 members who are active in all aspects of the real estate industry.

Encore Presentation Counsel’s Roundtable

May 20th

Independent Contractors vs. Employees

Seats are limited to 24 for Managers & Brokers ONLY.

Testimonial from previous Counsel Roundtables

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INDEPENDENT CONTRACTORS VS. EMPLOYEES:

No one is immune: Uber, FedEx, and even real estate brokerages are finding that individuals they deemed independent contractors may actually be re-classified as employees. There are ways for brokerages to mitigate the risk of a re-classification lawsuit. Are you doing it right? Brokers/managers, come find out more about the importance of independent contractor agreements, what you can and can’t do in policy and control issues, and risks created by teams, assistants, and the use of non-licensees.

Brad Boyd

 

FEATURED INSTRUCTOR: BRAD BOYD

Brad has instructed courses for groups ranging from 7 to 700, and has taught more than 50 CE and training courses covering real estate and legal topics. He has practiced law for 15 years, with more than 10 years of experience focused specially within the real estate brokerage industry. Brad has served as the outside general counsel to the Minnesota REALTORS® for 8 years and continues to serve in that role.

 

 

$99 | 9:30AM-Noon | MN REALTOR® Headquarters, 5750 Lincoln Drive, Edina, MN

Contact Katie Kuhn at kkuhn@mnrealtor.com or directly 952.912.2673 to Register.

The Minnesota REALTORS® is the largest professional trade association in the state with more than 17,000 members who are active in all aspects of the real estate industry.

Counsel Roundtable April 27th

2 Seat Remain for the Counsel Roundtable on Independent Contractors vs. Employees

BROKERS & MANAGERS ONLY

Testimonial from previous Counsel Roundtable

CRT - Testimonil 2

Independent Contractors vs. Employees

No one is immune: Uber, FedEx, and even real estate brokerages are finding that individuals they deemed independent contractors may actually be re-classified as employees. There are ways for brokerages to mitigate the risk of a re-classification lawsuit. Are you doing it right? Brokers/managers, come find out more about the importance of independent contractor agreements, what you can and can’t do in policy and control issues, and risks created by teams, assistants, and the use of non-licensees.

Brad Social post

Featured Instructor: Brad Boyd – Brad has instructed courses for groups ranging from 7 to 700, and has taught more than 50 CE training courses covering real estate and legal topics. He has practiced law for 15 years, with more than 10 years of experience focused specially within the real estate brokerage industry. Brad has served as the outside general counsel to the Minnesota REALTORS® for 8 years and continues to serve in that role.

$99 | 9:30AM – Noon at the MN REALTOR® Headquarters, Edina

Contact Katie Kuhn at kkuhn@mnrealtor.com or directly at 952.912.2673 to register.

The Minnesota REALTORS® is the largest professional trade association in the state with more than 17,000 members who are active in all aspects of the real estate industry.

STOP SELLING; START SOLVING

RECRUITING SECRET

Don’t try to answer someone’s prayers until you know what they are praying for.

By Larry Kendall, chairman of The Group, Inc. and author of Ninja Selling

Most salespeople have been taught the traditional three-step sales presentation:

  1. Make a connection (build rapport);
  2. Make a presentation of features and benefits;
  3. Close.

My observation is that most managers use this three-step approach in their recruiting, as well. After building rapport, they immediately launch into their spiel: “Let me tell you about the exciting things we are doing in our company – technology, lead generation, brand, staff system, etc.”

There’s an old rule of selling , “Don’t try to be the answer to someone’s prayers until you know what they are praying for.” The traditional three-step sales presentation violates this rule. The manager (or salesperson) who is telling and selling never discovers what the recruit (or customer) is praying for. If you don;t accidentally hit a hot bottom, your presentation starts to sound like “blah, blah, blah.”

What would happen if the manager used the Ninja Four-Step Consultation instead? This is the process we teach in our Ninja Selling classes, and it works great for managers who are recruiting. Let’s face it; a recruiting interview is a sales interview. Here’s how the four-step consultation works.

Step 1: Connection

Recruits want to work with someone they like and trust. They decide this in the first two minutes. Do they feel a connection with you? Do they like you, trust you, and want to go down this path with you? They will feel the connection if you ask questions about them. WE recommend you ask F.O.R.D. questions- Family, Occupation, Recreation, Dream (goals). Most people are very comfortable talking about these four areas of their life, and you are building rapport and connection.

Step 2: Information (Pain/Pleasure)

This is critical transition step. In the traditional three-step sales process, you would now be at the presentation stage, where you launch into your pitch of features and benefits. Most managers love this step because they get a chance to strut their stuff on stage.

There are two problems with this approach: first, the manager is trying to be the answer to their prayers without knowing what they are praying for; and second, the manager has time of possession (is doing all the talking). After a few minutes, the recruit stops paying attention, drifts off, and the connection is lost.

Instead of launching into your spiel, listen carefully to how the recruit answers your question about F.O.R.D., especially about their business (occupation). Listen for pain and pleasure. This is what they are praying for. Here are my two favorite pain and pleasure questions:

Pain: “What is your greatest challenge in your business right now?”

Pleasure: “If you could wave a magic wand and have your business just the way you want it, what would that look like?”

Step 3: Solution (Create Potential Solutions)

Now, formulate potential solutions that solve what they are praying for. How can you connect what you have to what they want? I once had a top producer tell me she was so busy, and the market was so hot, that she couldn’t make a move at this time. When I asked her about her greatest challenge, she said she was working all the time, and business was falling off her desk.

Step 4: Proposal (Propose Solutions)

I showed her how our staff systems would save her time and make her money. We could dramatically increase her income per hour so she could have a life. She had also talked about a goal of having more time with family and this solution resonated with her. She joined us right away because she wanted the solution.

Be a master recruiter. Stop selling and start selling.^

This article originally appeared in the April 2016 issue of the REAL Trends Newsletter and is reprinted with permission of REAL Trends Inc. Copyright 2016.

The Minnesota REALTORS® is the largest trade association in the state with more than 17,000 members who are active in all aspects of the real estate industry. 

 

 

 

 

 

 

 

 

 

2016 Starts with an Inventory Decline

New homes on the market in January were down 7.7% over 2015. This is about 500 fewer homes available to potential homebuyers. With the lower number of listings, we could see a slowdown in sales as we move through the remaining winter months which are typically a quieter time for our real estate market.

The pending sales were only up 1.6% to 4,284 units over last year. However, closed sales were up 16.5% over January 2015. This is reflective of all of the positive activity we saw in November and December. That number may slow down since the pending sales are running a little softer in January.

The median sales price jumped 8.2% to $188,00, while the average sales price rose 6% to $228,585. The median sales price is the midpoint, indicating as many transactions above as below the stated price.

Even in the traditionally cold, slow real estate month after the holidays, sellers were able to put a sold sign in their yard in 79 days. This is a 12.2% decrease, down from 90 days last year.

Minnesota REALTORS® are reporting strong market activity,” said Chris Galler, CEO of the Minnesota REALTORS®. “There are still buyers out there looking inventory as we state the new year.

Download the January 2016 Minnesota Housing Report HERE

Pending Sales

Closed Sales

Median Sales

Find more information on the real estate industry in the

MN REALTORS® March REsource Magazine.

Carrie
Carrie Andersen

Vice President, Member Services

The Minnesota REALTORS® is the largest professional trade association in the state with more than 17,000 members who are active in all aspects of the real estate industry.

LEAD GENERATION WEBSITES COULD LEAD REALTORS® TO RUN AFOUL OF THE CODE OF ETHICS, MINNESOTA LAW

There are several popular websites for consumers starting their home search, and many of them also offer lead services for real estate agents. While these websites can be a tool used by both listing and buyer’s agents in gaining and serving customers and clients, they are often national websites that work both REALTORS® and non-member licensees. REALTORS® using these websites need to remember that they are bound by the National Association of REALTORS® Code of Ethics and by the state law in the state they are licensed in and practice.

It has come to the attention of Minnesota REALTORS® that one or more popular lead generation websites utilized by real estate agents sends emails to listing agents when a consumer has shown interest in the listing agent’s property. Those communications, at least in some instances, contain a link that would enable the listing agent to directly contact the interested buyer, even through that buyer may be represented already. The emails may state that a buyer’s agent paying for the lead generation services was given an inquiry on the listing agent’s listing, and that the buyer’s agent will follow up with the listing agent if that “client” would like to schedule a showing of the listing. The emails may go on to state that if the listing agent needs to contact that client of the buyer’s agent directly to assist with scheduling a showing appointment, or possibly for other reasons, the listing agent can click a link to use other contact information provided in the email to contact that client directly. The lead generation website may or may not then remind the listing agent to follow the rules of his or her brokerage, MLS, association rules and regulations, and laws.

The last sentence is important. REALTORS® need to remember that Article 16 of the Code of Ethics states that they “shall not engage in any practice or take any action inconsistent with exclusive representation or exclusive brokerage relationship agreements that other REALTORS® have with their clients.” Article 16 specifically prohibits a REALTOR® from making direct contact with the client of another REALTOR®. Further, Minn. Stat & 82.81, subd. 9 specifically prohibits “negotiat[ing] the purchase, lease, or exchange of real property knowing that the buyer or lessee has executed a written contract granting exclusive representation or assistance for the same service of purchase, lease or exchange of the real property with another real estate broker. “If a lead generation website states that the inquiry is from a “client” of another agent, the listing agent should assume that there is a written representation agreement, and that client should not be contacted using the “click here” link or other contact information provided to the listing agent to gain direct access to the client. Thus, if Minnesota REALTORS® receive an email similar to that which is described above, they should not make contact with the client.

Anne Kealing
Anne V. Kealing, JD

Associate Legal Counsel

Find more real estate industry information in the

MN REALTORS® March REsource Magazine

The Minnesota REALTORS® is the largest professional trade association in the state with more than 17,000 members who are active in all aspects of the real estate industry.