Board Notes August, 2011

The Corporation remains within budget and within income for the first seven months of the year. Membership declined slightly for the period to 7,585 members from 7, 755. There was no change in the number of assistants, and they remained at 455. While we are still showing a projected net income, the Committee anticipates increased expenses beginning in October. It is as a result of this anticipated increase in expenses that the Board approved the upcoming increase in dues.

Rapattoni has offered to reimburse the Corporation 70% of the expense BAREIS MLS® incurred to obtain the patent license from CIVIX. Rapattoni will pay its contribution as a monthly credit against MLS fees for 36 months. Jim Branscombe recommended the reduction in fees be deposited to the legal reserve each month in order to reimburse the reserve, and the balance be budgeted over a two year period, bringing the entire reserve back to its target. We have initiated some other charges against vendors and we are reviewing an increase in vendor fees to place a portion of the vendor fee into the legal reserve.

The MLS Committee had extensive discussion about the “fixer” category in our MLS system. While Fannie Mae/Freddie Mac are requiring a new C-1 to C-6 rating structure for all appraisals effective 9/1/11, there is no definition for real estate agents for “fixer,” nor are real estate agents qualified to categorize the properties using the Fannie/Freddie standard. The field is not a required field, and a broker may utilize it or not. Legal counsel expressed concern about either rating a property or stating that a property is a “fixer,” if that status is subject to interpretation. The Committee was concerned that if a broker selects “no” in the fixer field, they have created a liability if repairs are required to the property. Appraisers have expressed their interest in maintaining the field. After extensive discussion, the Directors agreed to suppress the fixer field for 6 months and revisit the issue in 6 months.

The MLS Committee also recommended the Board approve renaming “public storage drain” to “storm drain” for all applicable property types. They recommended the Board approve adding the choice “See Confidential Remarks” in the field “homeowner association paid” for all applicable property types; and that the Board approve a series of changes to the listing input for the commercial property type. The Committee also recommended changing the choices for kitchen counter tops. The new kitchen counter choices will be: Concrete, Ceramic Tile, Laminate, Metal/Steel, Stone Composite, Stone Slab, Stone Tile, Wood, Other. After a discussion, the Directors approved the recommended changes.

The Communications Committee reported that the fee increase announcement and the BAREIS BUFFET seem to be well received. Jim Branscombe added that we have completed a series of presentations on Realist2. More than 152 people attended general sessions on the product this week. In addition, we have met with over 120 brokers in different forums in the past few months, and over 320 agents in tour group meetings. Approximately 110 people have participated in seminars held directly in real estate offices. The new hour-long demonstration program on Realist2 seems to be well received. Many of our three-hour hands-on classes are being cancelled due to lack of participation, so we have shifted our focus to the hour-long demos.

The Rules Committee reported that the revised Rules & Regulations are nearing completion. The final corrections to the Regulations include a change to rule number 9.16.4. It was recommended that the photo rule be revised from allowing remarks to describe the “subject photo” to describing the “subject property.” Directors discussed the proposed changes to the heading of Section 5.5 dealing with transfer of membership so that it better ties to the By Laws. Modifications proposed to the SEL Form (BAREIS MLS® Exclusion Form) were also discussed. The changes are in line with recommendations by both the Committee and the Board to make it more apparent that a seller may be limiting exposure of their property by not placing their property on the MLS. The Committee also proposed changes to the Citation Policy in which a third warning for the same violation in a 12 month period will create an automatic fine. A fifth warning in any twelve months for any type of violation will create an autofine for all future violations. The Rules Committee recommended the creation of a $50 administrative fee to appeal a citation and a $200 administrative fee to appeal a decision of the Rule Committee to the Board in an effort to recover some of the expense incurred in preparing an appeal for review by the Rules Committee. BAREIS staff spends approximately 45 minutes to one hour preparing each appeal. Two appeals were considered by the Rules Committee during their August meeting. After a brief discussion, the Directors approved the recommendations of the Rules Committee.

The Trendgraphix program is now live and working well.

Lockbox reciprocation is moving forward.

Technical challenges with Realist2 continue. Staff continues to work closely with Realist and with members to find solutions to the problems.

Directors discussed recent changes in the MARS rules (Mortgage Assistance Relief Services). The Consumer Finance Protection Bureau (CFPB) is currently in charge of administering the MARS rules and regulations originally developed by the FTC. It was recently clarified that if a real estate agent is assisting a consumer on the sale of their primary residence, no action will be taken against the agent regarding the MARS requirement. It is important to stress that the forbearance granted in the enforcement of the rules applies to the sale of the primary residence only. The FTC website states that no advance fees are allowed under any circumstances and there are 7 representations that the FTC deems to be misleading. Brokers should also be concerned about the new MAP rule which deals with mortgage products misrepresentation. For example, there may be issues for an agent who hands out a mortgage rate sheet. Delphine cautioned the Directors that the CFPB may at any point include real estate agents representing the sale of primary residence in the enforcement of the MARS regulation so it is best for short sale brokers to follow the MAP disclosure process.

We have completed our review of the auction rule and the technical issues involving auctions. The Directors approved the staff recommendation that the new auction rule field be activated at the same time we roll-out the new Rules and Regulations.