MD REALTOR Magazine - June/July 2014

VOLUME XLVIII NUMbEr 4 / JUNE 2014 / JULY 2014

mdrealtor.org / marylandhomeownership.com

The Maryland associaTion of realTors® The Voice for real estate® in Maryland

10 Legislative Wrap-Up

28 Why Global Business?

Might as Well Forecast the Weather 7

CareersCB.com

*NRT is ranked #1 in both closed residential buyer and/or seller transaction sides and sales volume (calculated by multiplying number of buyer and/or seller transaction sides by the sales price) from 1996-2013 in the U.S.Data obtained by REAL Trends Survey, 1996-2014. **Coldwell Banker Residential Brokerage is a subsidiary of NRT. Statistics include sides/sales volume for all NRT subsidiaries. Nothing in this document is intended tocreate an employment relationship. Any affiliation by you with the company is intended to be that of an independent contractor sales associate. ©2014 Coldwell Banker Real Estate LLC. Coldwell Banker is a registeredservice mark licensed to Coldwell Banker Real Estate LLC. An Equal Opportunity Company. Equal Housing Opportunity. Operated by a subsidiary of NRT LLC. 8452BAL-06/14

500COMPANY TRANSACTION SIDES SALES VOLUME

NRT LLC* 320,026 $151.07 BillionColdwell Banker Residential Brokerage**

HomeServices of America, Inc. 205,602 $63.46 BillionThe Long & Foster Companies, Inc. 73,202 $26.08 BillionHanna Holdings, Inc. 48,300 $9.11 BillionCrye-Leike Realtors 27,491 $4.72 Billion

WE’RE STILL #1*

17 YEARS STRONG

For the 17th consecutive year, REAL Trends 500 ranked us as the top U.S. residentialreal estate brokerage firm for both sales volume and number of transactions in 2013*.

What does this mean for you? You benefit from the strength, support, resources and internationalconnections of the nation's largest real estate brokerage.

Discover how Coldwell Banker® can help you take your business to the next level.

8452_Maryland RealtorMag_REALTrends_Still No1_Recruit_Ad_Layout 1 6/10/14 1:43 PM Page 1

www.mdrealtor.org MARYLAND REALTOR® JUNE / JULY 2014 1

President’s Perspective R U s s B o Y c E

Greetings and Happy summer!

I hope this finds you all enjoying the warm weather of the season and a thriving real estate market.

Based on past and current data the market continues to be promising. Find out how our consulting economist Anirban Basu expects the housing market to perform the rest of the year, locally and at the national level, by reading his semi-annual forecast beginning on page 17.

Legislation important to REALToRs® passed in the General Assembly session that ended in April. In fact, this was one of the most successful sessions we’ve ever had. Turn to page 10 to find out why the number 4 was so important to Maryland real estate this year.

see our 2013 “Leaders of the PAc” on page 5. These are the REALToRs® who invest in our industry to help us elect our REALToR® champions. These elected officials support the issues that are critical to Maryland REALToRs® and property owners. If you don’t see your name on the list, please send me an email and I can help you become an investor at whatever level you are comfortable.

Annual conference registration is now open. We have an exceptional line-up of speakers and sessions. This year there are new and important topics that will help you work smarter, not harder. Turn to page 23 to learn more, and don’t miss your opportunity to register by July 15th to take advantage of the early bird deadline.

The real estate market is now global, especially in Maryland. Turn to page 28 to find out the best way to expand your business to the global market and what your Association is doing to bring the global business locally. Learn about our new Global Business council. Find out how to obtain your cIPs Designation through NAR.

summer is always a good time to create “Balance” in your life. Be sure to take some time for yourself to help invigorate and empower yourself to stay on top of your business and be the best you can be in all areas of your life.

Make it an excellent summer.

With respect & gratitude,

Russ Boyce President, Maryland Association of REALToRs®

2 MARYLAND REALTOR® JUNE 2014 / JULY 2014 www.mdrealtor.org

T A B L E O F C O N T E N T S

LEADERS OF THE PAC

FEATUREsLeaders of the pac 2013 Edition 5

LegisLative wrap-up 10

Might as weLL forecast 17 the weather Recent Weak Data Largely Attributable to Atmospheric Conditions

MaryLand association 23 of reaLtors® conference & expo

deveLoping and 26 sustaining your centers of infLuence network

why gLobaL business? 28

DEPARTMENTscoMMerciaL connection 33 It's a Borrowers Market!

reguLation news 34 Contractor Referrals: A Real Estate Agent’s Responsibility

residentiaL saLes 36 Maryland Housing Market Has Lost Some Momentum

froM the hotLine 42 MSAs and RESPA

Mris 46 Have You Seen the New MRIS-U?

MaryLand reaL estate 48 coMMission news New Consumer Members of the Commission

WHY GLOBAL BUSiNESS?

MiGHT AS WELL FORECAST THE WEATHER

17 28LEGiSLATivE WRAP-UP

10

5

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2014 Maryland Association of REALTORS® Leadership Team

J Russell “Russ” BoycePresidentRE/MAX 10010665 stanhaven PlaceWhite Plains, MD [email protected]

Janice R KirknerPresident ElectLong & Foster Real Estate, inc.1208 Nottingham DriveWestminister, MD [email protected]

Bonnie CasperSecretaryLong & Foster Real Estate, inc.4650 East-West HighwayBethesda, MD [email protected]

Carlton J Boujai JrImmediate Past PresidentEXiT Realty Prosperity Group5300 Westview Drivesuite 105Frederick, MD [email protected]

Mary C AntounChief Executive OfficerMaryland Association of REALTORS®

200 Harry s Truman Parkway suite 200Annapolis, MD [email protected]

Maryland Association of REALTORS®200 Harry s Truman Parkway | suite 200

Annapolis, MD 21401-7348800.638.6425 | www.mdrealtor.org

Executive Leadership TeamJ Russell “Russ” Boyce | PresidentJanice R Kirkner | President Elect

carole A Maclure | TreasurerBonnie casper | secretary

carlton J Boujai Jr | Immediate Past PresidentMary c Antoun | chief Executive officer

EditorMelissa Lutz | [email protected]

Advisory CommitteeJenn Klarman | chair

AdvertisingArlene Braithwaite | 410.772.0820

Publication DesignHBP, Inc., 952 Frederick street, Hagerstown, MD 21741

800.638.3508 | www.hbp.com

Mission StatementThe Maryland Association of REALToRs® exists to support all segments of its membership and their specialties. The Maryland Association of REALToRs®, through collective efforts with local boards/associations and the National Association of REALToRs®:■ Develops and delivers programs, services and related products

that maintain and elevate the high standards of the real estate business and the professional conduct of its practitioners;

■ Assists members in ethically and professionally serving the public;■ Promotes and preserves the right to own, transfer and use real

property; and■ Protects the right of members to conduct business within a

framework of fair and reasonable laws and government regulations.

In principle and in practice, the Maryland Association of REALToRs® values and seeks diversity and inclusive participation within the field of real estate and recognizes each member as a unique individual.Maryland REALToR® (UsPs 0016-017) is published bimonthly by the Maryland Association of REALToRs®, suite 200, 200 Harry s Truman Parkway, Annapolis, MD 21401-7348. Periodical postage paid at Annapolis and additional mailing offices. Postmaster send address changes to: Maryland REALToR®, suite 200, 200 Harry s Truman Parkway, Annapolis, MD 21401-7348.Member subscriptions of $3.81 are paid with annual dues.This publication is designed to provide accurate and authoritative information regarding the subject matter covered. It is offered with the understanding that the publisher is not engaged in rendering professional advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. Articles that appear in Maryland REALToR® are an informational service to members. Their contents are the opinions of the authors alone and do not necessarily represent those of the Maryland Association of REALToRs®.Permission to reprint articles appearing in Maryland REALToR® magazine must be requested in writing. Also include purpose for request.While this magazine makes a reasonable effort to establish the integrity of its advertisers, it does not endorse advertised products or services unless specifically stated. ©2013 Maryland Association of REALToRs®, Inc.

Carole A MaclureTreasurerRE/MAX Advantage Realty17304 Evangeline Laneolney, MD [email protected]

www.mdrealtor.org MARYLAND REALTOR® JUNE 2014 / JULY 2014 5

Thank You to all our 2013 RPAC investors. Your support demonstrates your insight about the importance of our efforts to support candidates who support our industry and our profession. Special thanks to the continued, generous support of RPAC Golden R investors for their extraordinary leadership and dedication.

PRESiDENT’S CiRCLE

Those REALTORS® who are major investors AND pledge $2,000 direct-candidate contributions.■ Mary Antoun■ Bill Armstrong■ carlton Boujai■ Russ Boyce■ Bonnie casper■ David charron■ Jon coile■ Nick D’Ambrosia■ Gloria Farrar■ Iona Harrison■ John J Harrison■ Harold Huggins■ Ilene Kessler■ Janice Kirkner■ carole Maclure■ shelly Murray■ JoAnne Poole■ Dale Ross■ Anne smoley■ craig strobel■ cathy Werner

GOLDEN R iNvESTORS

Thank You Golden and Sustaining Golden R Investors!■ Tom Earnest■ Greater capital Area Association

of REALToRs®■ Maryland Association of REALToRs®■ Prince George’s county Association

of REALToRs®■ Dale Ross■ craig strobel

SUSTAiNiNG GOLDEN R

■ Mary Antoun■ Bill Armstrong■ Russ Boyce■ Tommy carruthers■ Bonnie casper■ Jon coile■ Nick D’Ambrosia■ Iona Harrison■ John J Harrison■ Al Ingraham■ Ilene Kessler■ Janice Kirkner■ carole Maclure■ JoAnne Poole■ Joan Ryder■ Jay Webster■ cathy Werner■ Wayne Wyvill

CRYSTAL R iNvESTORS

Thank You Crystal R and Sustaining Crystal R Investors!■ James M coley Jr.■ Jane Fairweather■ Frederick county Association

of REALToRs®■ Frederick county Bank■ Greater Baltimore Board of REALToRs®■ Harford county Association

of REALToRs®■ Howard county Association

of REALToRs®■ Jill Pogach Michaels■ Kevin Turner

SUSTAiNiNG CRYSTAL R

■ carlton Boujai■ Gloria Farrar■ Billy Yerman

STERLiNG R iNvESTORS

The RPAC Trustees would like to recognize first-time Sterling R Investors, for their generous contribution of $1000 to RPAC in 2013. Thank you for your support!■ Bonnie Augostino■ Briana Ayala■ coard Benson■ Dawn Bever-stewart■ Bernadette cole■ Greg Ford■ Mark Fritschle■ Ed Garano■ Bob Golden■ craig Gough

Leaders of the PAC

2013 Edition


■ Marie Grismer■ Debora Hileman■ Patty Kallmyer■ chuck Kasky■ Annick Kelley■ Jeremy Lichtenstein■ Peg Mancuso■ William Martin■ susan Megargee■ susan Mitchell■ sandy Rosberg■ Kathi Payne■ Emerick Peace■ Diana Rucci■ Anne smoley■ Ken Woodring

MULTi-YEAR STERLiNG R iNvESTORS

The RPAC Trustees would further like to recognize our MULTI-YEAR STERLING R INVESTORS for 2013, and thank them for their support!

T WO-TIME STERLING R■ Bill castelli■ Alicyn DelZoppo■ Ivy Gifford■ Tim Kagan■ Ellen Katz■ Tom Levin■ Tyna Lucke■ Paula Martino■ Michael McGreevy■ sharon McKenna■ Dee Dee Miller■ Linda Moran■ Yolanda Muckle■ Pen-Mar Regional

Association of REALToRs®■ Leigh Reed■ Tim Reinhart■ Richard Rhodes■ James stephens■ Lee Tessier■ Jenni Utz■ David Vane■ Pam Wadler■ Pat Weed■ Mark Wilson

THREE-TIME STERLING R■ cheryl Abrams■ Jean Andrews■ cheryl Bare■ Kay Deitz■ Jim Hyatt■ Leigh Lawson-Everstine■ Patricia Long■ Mary Ann o’Malley■ Joan ostenso

■ scott Reiter■ southern Maryland

Association of REALToRs®

FOUR-TIME STERLING R■ Koki Adasi■ John coller■ Roger Fairbourn■ Million Dollar club of

Howard county■ Bob Kimball■ Pat Terrill■ Meredith Weisel

FIVE-TIME STERLING R■ Timothy Blanchfield■ Desiree callender■ Tim Knobloch■ Fred Pumphrey■ Marilyn Rhodovi■ connie stommel

SIX-TIME STERLING R■ Tom Hough■ Randall Rothstein

SEVEN-TIME STERLING R■ shirley Matlock■ steve Meszaros

EIGHT-TIME STERLING R■ Mike cerrito■ Joanne Darling■ Theo Harris■ Bud Humbert■ Ken Montville

NINE-TIME STERLING R■ carroll county Association

of REALToRs®■ Michael Moran■ creig Northrop■ susan Pruden■ Ashley Richardson

TEN-TIME STERLING R■ Alease Bowles■ Melvina Brown■ Alana Lasover■ John Lesniewski■ shelly Murray■ Tom Quattlebaum■ Pat Ulrich

ELEVEN-TIME STERLING R■ Jack Bannister■ Wes Foster

T WELVE-TIME STERLING R■ cindy Ariosa■ Boyd campbell■ Alex Karavasilis

FOURTEEN-TIME STERLING R■ Mary Lou Kaestner

FIFTEEN-TIME STERLING R■ Marc Witman

EIGHTEEN-TIME STERLING R■ Real Estate Million Dollar

Association of Baltimore■ Georgiana Tyler

T WENTY-ONE TIME STERLING R■ Harold Huggins

T WENTY-THREE TIME STERLING R■ Michael Yerman■ Women’s council of

Baltimore

T WENTY-FOUR TIME STERLING R■ Nancy Hubble

T WENTY-SIX TIME STERLING R ■ Women’s council of Prince

George’s county

CAPiTAL CLUB ($200–$999)

■ Phyllis Adam■ Jeffrey P Aumiller■ Wendy I Banner■ sammy A Barbieri■ Kathleen F Beadell■ Karen W Beall■ Brenda Blaney■ James M Blaney■ Jan Brito■ Brandon c Brittingham■ Donna R Brown■ cam A Bunting■ Lauren W Bunting■ R Bruce campbell■ J Roger carp■ Anita M centofanti■ Kathy cheatham■ Gregory s coggins■ Gretchen conley■ Lori M connor■ Anne cooke■ Anita T Davis■ Joe Detrick

classic settlements■ Anthony R DeVol■ Gary H Ditto■ Katherine Dixon■ sharron Dorsey■ connie Dube■ Alyssia Essig■ Melinda L Estridge■ Paul J Fenton■ Paul J Fortier III■ Jeffrey s Ganz■ Andrea M Gaus

■ Mirline J Hayes■ Zelda Heller■ Mynor R Herrera■ Quantane L Higginbotham■ sharon K Hiner■ Daniel E Hoff■ samuel c Hoff■ chris s Jett■ Kaye L Jones■ Jenny Koontz

Associates Title services, Inc.■ Elley s Kott■ Paul c Lancaster■ cheryl R Leahy■ Martha B Lessner■ Denise M Lewis■ Joel M Maher■ santhy Mallios■ Frank A McKnew■ Amy L Menrad■ Donna Moffett■ Ann Johnston

Monarch Title, Inc.■ Vittorio Muzzatti■ stephanie Myers■ susan Myszkowski■ susan A Padgett■ Michael W Patrick■ Art Payne■ Michelle Raines■ Noni Rondeau■ Louise schultz■ Richard E sells■ P Joy siegel■ Martin M signore■ Bob simon■ Josette M skilling■ sandra J smith■ sheri E smith■ John W steffey sr.■ Pamela D stone■ David L Therrien■ Turnock Real Estate services■ Brent Whalen■ Phyllis Wiesenfelder■ Joseph B Wilson■ Philip L Wineman VII■ Noel T Wood■ Hans L Wydler

$99 CLUB ($99–$199)

■ scott Adolph■ Akinbode Akinola■ Temitope Akojie■ Lewie A Aldridge III■ Jacqueline A Alexander■ Allan P Amernick■ Leon W Andris■ Jeffrey Annis■ Diana Armacost■ Eugene Arnold


■ Robert M Arnold■ charlotte A Atencio■ steve L Atkocius■ olayinka Ayodele■ Donald E Bailey■ Jamie Baldwin■ Robert J Bassett■ Benjamin B Bell Jr.■ Jonathan Bell■ Deborah Benkert■ Dan G Betsher■ cindy Biasello■ Donald L Biedenback■ Daniel M Billig■ Anita J Blye■ Kimberly Bogris■ Nancy G Boryk■ Donald s Boucher■ carole L Bowen■ William G Bowen■ Jacqueline R Boykin■ Teresa L Bradford■ Fred c Brand■ Jonas Brodie■ Valerie P Brown■ Hubert W Brucker■ F(chip) Burnett■ suzanne Burton■ suzanah s cain■ Delaine campbell■ Robin c caparosa■ Bob caspar (steamboat

Associates, LLc)■ William F cassidy■ Gloria J castle■ James R castle■ Joan M catlin■ Joan W cerveny■ Kathryn V chamos■ Mary E charters■ Herbert E chisholm■ Judy L clark■ Kathleen M clark■ Thomas P coard■ Andre B collins■ John J collins■ comstar Federal credit■ Taylor connolly■ William J connor■ christan collins■ Raymond s contee Jr■ LouAnn conway■ Peter s copenhaver■ Lou Ramsay cotta■ Anna couffer■ Luis M couto■ Regina M crabb■ Laurie E crawford■ carol sue crimmins■ Jennifer L cropper-Rines■ John D crum■ Neil P cullen

■ Mary Judith J curren■ cristina L o’Bryhim-curtis■ suzanne cytryn■ Dianna Darney■ Kathleen M Dartez■ Ann B Davis■ Katherine A Davis■ Matthew B Davis■ Robert L Davis Jr■ Richard Davison■ Teri Deane■ Ronald P Deem■ Joseph A DeLuca■ Anand A Devadas■ Michelle DiDonato■ Jonathan P Diffley■ Judith M DiFilippo■ stanley Dill■ James F Dixon■ sheila J Dodson■ Glenn Donaldson■ Karen L Donaldson■ R L Downey■ Patricia A Dowtin■ Amanda L Dugan■ Mike Dunn■ Maureen A Earp Wood■ James K Eder■ Page Eisinger■ Andrew Eiswert■ Lawrence o Elliott Jr■ Mary Ann Elliott■ Lolita R Ellis■ Belinda A Epperson■ Norma s Epstein■ Astrida Ermanis■ Renee M Estrada■ Gary c Evans■ Frank G Ferguson■ Marianne s Ferguson■ sandra Flockhart■ John A Ford■ Karen J Forsythe■ Paul W Foster III■ Alexander D Fountain Jr■ Bill Francis (RE/MAX

solutions) ■ Ben Frederick III■ Darrin J Friedman■ steven M Friedman■ Martin Friend■ chris Gallant■ Georgeanna Garceau■ susan c Garczynski■ Joan E Gardiner■ Luciano Gargano■ cara L Garside■ carlos A Gautier■ Karen W Gaylord■ Baochun Ge■ Eleonore A Gerstenfeld■ Ann F Gifford

■ Jean Gilman III■ Dorie A Glass■ Ray Q Goddard■ scott E Goldberg■ constance Golihew■ Karrie M Gonzalez■ Judith A Gordon■ Wendy s Gordon■ Maynard B Gottlieb■ Mike Graziano■ Rebecca F Greco■ Elizabeth A Green■ Katie E Grove■ Audrie M Gue■ Rebecca L Hahn■ Alan Halle■ Thomas E Hammen■ Roscoe Handy■ Ronald E Harman■ Vicki A Harmon■ carolyn c Harris■ Helen J Hartman■ Vicki Hay■ Elizabeth M Hays■ Alexander J Heitkemper■ Dale W Heller■ Irene E Heller■ Douglas L Hervey■ Barry Hess■ Karol A Hess■ Joseph B Hill Jr.■ suzanne Hinder■ suzanne M Hitt■ Paul F Hlubb Jr■ Bill Hocker■ Peggy Hoffman■ catherine A Hogans■ Vaughn R Hogans■ Burks T Holland III■ sharon L Hooper■ Timothy N Hopkins■ clarence E Horst■ Ruth L Hosgood■ Irma D Houck■ sara L Hourihan-Taylor■ Patricia D Howard■ Kirk M Huddleston■ Paul D Hudson■ Linda c Hughes■ John W Hurt, Jr.■ Tina Hyatt■ Joanie M Hynes■ Judith E Isom■ Theresa M Jackson■ subbarayudu Jakkampudi■ Gary L James■ Ananda Jayakody■ Robert L Jebsen■ Michael c Johnson■ Robert E Johnston III■ sharon s Johnston■ R Bruce Jones

■ Traci Jordan■ Abraham Joshua■ Robert Joy■ Rose Marie Jung■ Thomas J Karras■ Kevin P Keegan■ susan P Kelley■ Michael Kennedy■ chang K Kim■ Il Y Kim■ Richard E Kinard■ Edisel D King■ Leslie I Kinkead■ Paula Kipperman■ chris D Kirkendall■ chrissy Kirkner Kanther■ Denise Kirkner-Vourlos■ Donieta Jeni Kneessi■ Elaine Kogan■ charles L Koontz Jr■ Daniel Korn■ Tammy T Kornegay■ Michael Kurtianyk■ Billie D Landbeck■ Robert L Langley sr.■ Nicole D Lapera-Holler■ Joseph Laumann■ John J Lavery■ Lewis F Laws■ Leigh Lawson■ Michael Leaf■ William D Leager■ omar A Leon■ Thomas R Leverance■ Traci Levine■ Joy B Liberti■ Reuben F Lilly Jr■ Arlene o Linn■ Herbert Lisjak■ Fredericka A Lloyd■ sandra M Lofgren-sargent■ stephen Lovellette

(Mortgage one, LLc)■ charlene c Lunsford■ Michael J Lyons■ stephen MacDonald■ sydney L Machat■ T Ross Mackesey■ Buzz c Mackintosh■ James R Mackintosh■ Kevin M Maloney■ Renee Mankoff■ Ali R Mansouri■ Joni L Martin Williamson■ cynthia A Massari■ Grace P Masten■ James E Matthews■ Barbara c Mattingly■ Danai E Mattison■ Douglas W Mcclive III■ David D Mccollough■ Vernee J McFarlin


■ Terrence B McGowan■ Joan McLernon■ christopher D McMahon■ Joseph P McMahon■ Virginia A Meeks■ Deborah A Meushaw■ Gary W Michael■ Phyllis L Minik■ Karleen M Monday■ Paul E Monger■ sandra N Monger■ H Barry Montgomery■ Beverly A Moody■ Peter D Morgan■ constance J Morrissette■ cynthia G Moses■ David A Moss■ Janis R Mullenax■ Timothy D Murnane■ Dennis c Murphy■ Jerry Murphy■ Nathan Murray■ Kerry Muse■ Arletha Myers■ Karen F Myers■ William J Neary Jr■ Gary G Nelson■ Hedy Nelson■ Joyce A Nesbitt■ Barbara Neville■ Andre E Nicholas■ Kimberly Ann Nicholson■ Mark M Novak■ Brian Nowakowski■ simon N Nwaigwe■ Deborah s o’Hara■ Nnaemeka A

obiegbu-chima■ John Michael oconnell■ Wendy T oliver■ Joseph olmedo■ sandra M Fouche■ christina B oMeara■ John c oNeill■ Rita R orcino■ carl E ortman III■ Lorence c ottley Jr

■ David D Palmer Jr■ Walter D Palmer■ Nicholas Pantoulis■ steven c Parker■ Bonnita A Parks■ Irene c Parks■ Barbara Passwater■ Anne Perrone■ Teresa c Phillips■ craig B Pittinger■ Joan Pittroff■ Leslie Pladna■ claudia F Pleasants■ Gregory s Pluemer■ carol s Plunkert■ Milena Podhrazska

Mainstreet America Realty■ Benny Poole■ Doug Poole■ stephen J Potorti■ Walt c Pratt■ Allan J Prigal■ Thomas B Quimby■ Albert A Radcliffe■ Himani Raheja■ Richard M Rall Jr.■ Robert G Ramoy■ Beverly Rasmussen■ Michael s Ray■ Margaret M Regnier■ Janet Reynolds■ Jon J Ridgeway■ Barbara E Ringrose■ carolyn I Roberson■ Gayle Roberts■ James c Robinson■ charles Rodriguez■ stuart s Rogal■ Karen Rogers■ Harry R Roop■ steven R Rosenblatt■ Maryellen Rosenblit■ Megan E Rosendale■ Faith M Rosselle■ William Rozek■ sudhir L Ruparelia■ sherri J Russell

■ Jeanne Russo■ Alexander Ruygrok■ Robert Ryan■ Elisabeth salchow■ Belinda sanders■ George R savani■ Patricia M savani■ Rick saylor

Rcs Home Inspections■ Heather A schafer Adkins■ James F schneider■ Michelle schonig■ Mary B schultz■ Winfield F scott Jr■ Kathleen A sells■ sandra serrao■ Paulette E shaduk■ Matthew shepard■ Darlene M silvestro■ charles H simons■ Nancy R simpers■ Alfred L singer■ Beverley B smith■ Hugh M smith■ Kenneth E smith■ Larry E smith■ Robert J smith Jr■ shannon T smith■ RoseAnn c spalt■ Donald N sperling■ Marian R staab■ William G standiford■ Glenn B staples■ stuart J stern■ Guy steuart■ Pamela stevens■ Joan M strang■ David H stromberg■ Timothy B sullivan■ Diane K svrjcek■ Max sweet■ Richard A swirnow■ Doannie A Tambascio■ Walter D Taraila■ Howard E Tate■ James c Tawes III■ Brigit R Taylor

■ Geoffrey M Taylor■ Ronald G Taylor■ Maria A Terry■ Narinder K Thakral■ Norman s Thomas■ Jean A Thompson■ Judy I Thompson■ Peter N Thompson■ David L Thurston■ Keely E Tolley■ Edward E Tome■ Joy A Truby■ Monique Tucker■ William J Turner■ Judy c Tyree■ Donna M Utz■ Kevin R Utz■ Lisa Van Tassel■ charles N Vance■ Luba Vidgop Barg■ Marysusan s Wanich■ Barry P Waterman■ Mareen D Waterman■ Victor D Watson■ Michael c Weisner■ Wells Fargo Home■ Barbara L Whaley■ Darron s Whitehead■ Patsy J Whiteley■ Esther Whitten■ Nancy A Wiest■ Anthony L Williams■ Kara Williams■ Blaine L Williamson■ Leonard E Wilson Jr■ Linda F Wilson■ Richard L Winebrenner■ craig Wolf■ William R Wootan■ James F Wright■ Ronald B Wrightson■ Joseph A Yost■ Darlene Zepp

congratulations to ALL REALToR® Local Associations/Boards that exceeded their 2013 RPAc Goals!■ Anne Arundel county Association

of REALToRs®■ Bay Area Association of REALToRs®■ carroll county Association

of REALToRs®■ cecil county Board of REALToRs®■ coastal Association of REALToRs®■ Frederick county Association

of REALToRs®■ Garrett county Board of REALToRs®

■ Greater Baltimore Board of REALToRs®■ Greater capital Area Association

of REALToRs®■ Greater Washington commercial

Association of REALToRs®■ Harford county Association

of REALToRs®■ Historic Highlands Association

of REALToRs®

■ Howard county Association of REALToRs®

■ Mid-shore Board of REALToRs®■ Pen-Mar Regional Association

of REALToRs®■ Prince George’s county Association

of REALToRs®■ southern Maryland Association

of REALToRs®

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Numerologists tell us that the number four is special for many reasons. There are four noble truths in Buddhism. There are four seasons, and number four was on the back of one of the greatest Orioles in history —Earl Weaver. Heck, the Beatles were called the Fab Four.

on the other hand, four is an unlucky number for the chinese, and no one is a fan of the Four Horsemen of the Apocalypse.

For the Maryland Association of REALToRs® (MAR), “four” is both good and bad. one of our top legislative priorities was the fourth to last bill passed in the senate on the last day of the 90-day session. obviously, having our bill passed is good. However, when hours of lobbying, research, testimony,

and the efforts of hundreds of REALToRs® contacting their legislators is resolved only in the last ten minutes of session, “four” is stress inducing.

As passed, sB 850 prohibits local governments from using condemnation authority to seize mortgages and deeds of trust. MAR supported this bill out of great concern that such use of condemnation will halt refinancing and home lending in jurisdictions

using it. The United states Federal Housing Finance Agency (FHFA) has stated that this use of eminent domain presents “a clear threat to the safe and sound operations of Fannie Mae, Freddie Mac, the Federal Home Loan Banks.” Working to protect underwater homeowners is a key goal of the real estate industry, but not at the expense of other homeowners.

Legislative Wrap-Up

AFFORDABLE HOUSiNG AND TAXES

HB 223 – Property Tax Credit – Urban Agricultural Property – ApplicabilitySTATUS: PASSED Effective June 1, 2014

Authorizes local governments to provide a property tax credit to properties engaged in urban agriculture. Previously, the law only allowed local governments to give credits to properties engaged “exclusively” in urban agriculture. Now, local governments may grant tax credits to properties used for other purposes in addition to urban agriculture. The local governments may determine eligibility requirements for the properties. Urban agriculture may include crop production, certain environmental mitigation activities, produce stands and even certain recreational activities.

HB 510 – Sustainable Communities Tax Credit Program – Extension and AlterationSTATUS: PASSED Effective June 1, 2014

Extends the sustainable communities Tax credit Program for another 3 years until June 30, 2017. The bill also authorizes up to $4 million of the appropriated money for commercial projects to be used for “small commercial projects.” A small commercial project would be limited to less than $500,000 in rehabilitation expenditures and can be used for structures that have both commercial and residential rental purposes. otherwise, these small commercial projects would operate much like the residential part of the tax credit program which has fewer fees

HB 524 – Income Tax – Expensing of Business Property and Bonus DepreciationSTATUS: NOT PASSED

Would unify Maryland’s tax treatment of the expensing of business property with the more generous federal tax treatment.

HB 739/SB 602 – Maryland Estate Tax – Unified CreditSTATUS: PASSED Effective January 1, 2015

Unifies the Maryland estate tax credit with the federal estate tax credit by January 1, 2019 by phasing it in over the next 5 years. The legislation sets the following schedule: 2015–$1.5 million credit; 2016–$2 million credit; 2017 — $3 million credit; 2018 — $4 million credit; and 2019 – fully unified with federal credit. currently, the Maryland credit is only $1,000,000 while the federal credit is over $5,000,000.

HB 742/SB 600 – Regional Institution Strategic Enterprise Zone ProgramsSTATUS: PASSED Effective June 1, 2014

Establishes a Regional Institution strategic Enterprise Zone Program (RIsE) which would allow higher education institutions and local government to create economic development districts around certain Maryland institutions. These districts would offer businesses a property tax credit, income tax credit, and certain income depreciation allowance to locate or expand in the district. only higher education institutions demonstrating a commitment to economic development would be able to participate in this effort. The tax credits would operate much like the Enterprise Zone Tax credits.

HB 923/SB 596 – Income Tax Subtraction Modification – Mortgage Forgiveness Debt Relief–ExtensionSTATUS: PASSED Effective July 1, 2014

Extends state tax relief for mortgage debt forgiveness for two years. Under current law, this tax benefit would have expired on June 30, 2014. It will now be extended to June 30, 2016. However, due to fiscal concerns, the legislation lowered the amount of debt forgiveness that may be tax free from $1,000,000 to $100,000 for individuals and from $2,000,000 to $200,000 for married couples. If the federal government extends the federal mortgage debt forgiveness bill, the federal limits will take precedence over the state limits in this bill.

The following provides information on sB 850 and the other important real estate bills considered by the Maryland General Assembly in 2014.



REAL ESTATE BROKER AGE AND CONTR AC TS

HB 274/SB 708 – Residential Property – Statute of Limitations for Certain Specialties and Motion for Certain Deficiency JudgmentsSTATUS: PASSED Effective July 1, 2014

Reduces the amount of time (12 years to 3 years) that a deficiency judgment related to a foreclosure may be filed. Previously, lenders could wait 12 years before enforcing a deficiency judgment against a homeowner who entered into a short sale with the lender. The law applies to new deficiency judgments. However, the new law also limits existing deficiency judgments to either the former 12-year time limit or a July 1, 2016 cutoff, whichever occurs first.

HB 595 – Real Property – Foreclosure of Residential Property – Certified Community Development Financial InstitutionsSTATUS: PASSED Emergency bill which is effective upon signature of the Governor

Allows certified community Development Financial Institutions (cDFI) to purchase foreclosure properties and sell them back to the owner-occupant. The cDFI targets underwater

homeowners and lowers their principal in order to reduce monthly payments by up to 40%. Exempts the transaction from recordation and transfer taxes.

HB 1529/SB 1095 – Real Property – Ground RentsSTATUS: NOT PASSED

Limited certain charges related to the collection and enforcement of ground rents. The legislation was introduced in response to the Maryland court of Appeals case, Maryland v. stanley Goldberg et al which invalidated the “lien remedy” passed by the Legislature in 2007. The lien remedy replaced a long standing “ejectment” remedy which allowed a ground rent owner to evict a homeowner/ground rent tenant from the homeowner’s house. As a result of Goldberg ground rent owners may once again eject tenants who have not paid a ground rent.

SB 212 – Fairness for All Marylanders Act of 2014STATUS: PASSED Effective October 1, 2014

Adds “gender identity” to the list of protected classes under Maryland housing law. The bill also

applies to employment and public accommodations. “Gender identity” is defined under state law as the “gender-related identity, appearance, expression, or behavior of a person, regardless of the person’s assigned sex at birth.” With this change, real estate agents and owners of property may not discriminate in the sale or rental of property to a person whose appearance may be different than their apparent gender. current law makes exceptions for owners of properties with less than 5 units when the owner lives on the property and rents the other units.

SB 1106 – Business Occupations – Real Estate Appraisers – Criminal History Records ChecksSTATUS: PASSED Effective January 1, 2015

Requires that an applicant for an initial real estate appraisers license and certification undergo a criminal background check through the criminal Justice Information system central Repository (cJIs). The state of Maryland was informed by the federal government that it would no longer recognize Maryland issued real estate appraiser licenses without this specific criminal background check.

COMMON OWNERSHiP COMMUNiTiES

HB 10 – Real Property – Regulation of Common Ownership Community ManagersSTATUS: NOT PASSED

Required licensing of common ownership community managers. common ownership communities are condominiums and homeowner associations. The bill also would have provided some exemptions from licensing for real estate licensees and other categories.

HB 412/SB 229 – Real Property Condominium and Homeowners Associations – Disclosures to Purchasers on Resale of Unit or Lot – Limitation on FeesSTATUS: NOT PASSED

As passed by the House, limited the cost of resale packages to $250 for condos and HoAs. The senate, however, passed legislation that would have limited the cost of resale packages to $100 but only applied that limitation to condos. Although the bill passed both the House and senate, the bodies couldn’t reach a compromise on the final day of session.

HB 602 – Real Property – Common Ownership Communities – Foreclosure of LiensSTATUS: PASSED Effective October 1, 2014

Permits condominium and homeowner associations to include interest in the calculation of a lien to be filed.

HB 1080/SB 820 – Condominium and Homeowners Associations – Sales – Disclosure and Cancellation RequirementsSTATUS: NOT PASSED

Would have implemented more uniform condo and HoA resale package disclosure requirements. Under current law, these disclosures have different triggers and time frames for consumers to cancel contracts. The bills would have created the same time frames for almost all condo and HoA sales. The bills did not pass due to opposition from the Attorney General’s office and managers of condo and HoA associations.

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L AND -USE, PROPERT Y RiGHTS, AND THE ENviRONMENT

HB 11 – Environment – Bay Restoration Fund – Authorized UsesSTATUS: PASSED Effective June 1, 2014

Permits the Bay Restoration Fund septic account to be used to pay the principal on local government bonds issued to connect homes on septic to municipal wastewater facilities that use enhanced nitrogen removal. The law already permitted the funds to be used to pay for the direct cost of the connection.

HB 553 – Housing – Energy-Efficient Homes Construction Loan ProgramSTATUS: PASSED Effective July 1, 2014

creates a loan program for low-energy or “net-zero” (homes that generate as much power as they use). The program directs the Department of Housing and community Development (DHcD) to focus the program on construction loans and allows the Department to enter into agreements with private sector partners to run and fund the program.

SB 170 – Budget Bill (Fiscal Year 2015)STATUS: PASSED Effective July 1, 2014

Among other provisions, directs the Maryland Department of Environment (MDE) to report back to the General Assembly’s budget committees regarding the amount of money spent to clean up the chesapeake Bay, the results of those actions and the projected legislative and regulatory changes needed to meet water quality standards by 2025.

SB 172 – Budget Reconciliation and Financing Act of 2014STATUS: PASSED Effective June 1, 2014

Among other provisions, establishes that carroll county and Frederick county may enter into an agreement with the Maryland Department of Environment (MDE) to pay for stormwater remediation costs through an alternative source of funding than a stormwater fee (“rain tax”).

SB 850 – Real Property – Prohibition on Acquiring Mortgages or Deeds of Trust by Condemnation and Related StudySTATUS: PASSED Effective June 1, 2014

Maryland became the first state to pass a moratorium on seizing mortgages or deeds of trust through eminent domain. A private equity company is pushing local governments to seize performing, underwater mortgages so that it can refinance them. Both the Federal Housing Finance Agency and private commercial lenders have indicated that they would potentially stop lending in communities that seized mortgages – an action that would devastate the market for the vast majority of homeowners and buyers. sB 850 was amended to provide that the moratorium last for two years while the Department of Housing and community Development (DHcD) conducts a study of this questionable use of eminent domain authority.

SB 947 – Real Property – Blighted Property – Nuisance AbatementSTATUS: DEFEATED

Required owners of blighted property to fix up the properties or face a fine equal to a tripling of the annual property taxes. An owner could avoid the fine by selling the property.

PROPERT Y MANAGEMENT

HB 73/SB 247 – Civil Actions – Personal Injury or Death Caused by Dog – Rebuttable PresumptionSTATUS: PASSED Effective April 8th, 2014

Reversed the court of Appeals decision on pit bulls so that landlords do not have “strict liability” for dog bites caused by their tenants. Instead, landlords will have the same legal liability (negligence) that they had before the court of Appeals decision. owners of dogs, however, are presumed liable unless they can show the victim triggered the dog’s attack. Unlike the court opinion which targeted pit bulls, this bill applies to all breeds.

HB 249/SB 345 — Real Property – Residential Leases – Interest on Security DepositsSTATUS: PASSED Effective January 1, 2015

Requires landlords to return security deposits with an interest rate of 1.5% or a rate equal to the U.s. Treasury Daily Yield curve Rate, whichever is higher.

HB 366 – Home Act of 2014STATUS: DEFEATED

Established “source of income” as a protected class under Maryland law.

HB 843 – Residential Leases – Just Cause EvictionsSTATUS: DEFEATED

Redefined eviction to include a landlord’s refusal to renew a lease on substantially similar terms. changing the lease duration, increasing the rent (due to increasing costs) would all be different terms that could be deemed an “eviction” under the bill and thus subject to new standards of review.


HB 888 – Environment – Reduction of Lead Risk in Housing – Applicability and Registration RequirementsSTATUS: NOT PASSED

clarified that property owners with units built between 1950 -1978 must pay the $30 registration fee under the Reduction of Lead Risk in Housing Act but are not required to participate in the program. Legislation passed in 2013 required these properties to pay the fee and meet program requirements.

HB 1280 – Landlord and Tenant – Prohibited Lease Provisions – Renter’s Insurance Naming Landlord as BeneficiarySTATUS: DEFEATED

Prohibited a landlord from requiring a tenant to carry renter’s insurance which named the landlord as beneficiary or additional insured.

SB 800 – Landlord and Tenant – Retaliatory Actions – Conditions for ReliefSTATUS: PASSED Effective October 1, 2014

Allows a tenant to file a complaint of “retaliatory action” against landlords even if the tenant has 3 judgments of possession for past due rent filed against them in the last year. Previously, the law barred a tenant from filing such a complaint regardless of whether it was related to the rent payment or not. The bill also would have allowed a tenant to file a retaliation complaint for up to 12 months. The Legislature eliminated that provision so that a retaliatory action can only be filed within 6 months of the tenant’s action.

SB 904 – Residential Leases – Rental Fees – Landlord and Tenant Relations (Maryland Rental Housing Stabilization Act)STATUS: DEFEATED

created a statewide Rental Housing Authority. once established, the Rental Housing Authority would oversee every residential lease signed in Maryland. If a landlord failed to submit a copy of a signed lease to the authority within 30 days of the lease signing, the landlord would be prohibited from enforcing the lease. The Authority would be charged with regulating any rent increases and requiring registration of all rental units. Property owners would be charged 1% of the value of their rental property to fund the Rental Housing Authority.


In conclusion, MAR enjoyed important legislative successes this past year. Those successes are due in large part to the volunteer work of our members and leadership who take seriously the saying “if real estate is your profession, politics is your business.”

“Defeated” indicates bills opposed by MAR. “Not Passed” indicates bills that either MAR did not oppose or bills that MAR opposed but which did not receive a vote.

COMMERCiAL

HB 202/SB 186 – Clean Energy Loan Programs – Private Lenders – Collection of Loan PaymentsSTATUS: PASSED Effective October 1, 2014

Authorizes local governments to allow private lenders to provide commercial properties with clean energy loans. These voluntary loans would be paid back through a surtax on the property tax bill.

HB 268 – Corporations and Associations – Limited Liability Companies – Company RepresentativesSTATUS: DEFEATED

Required Limited Liability companies (LLcs) to pay to register a “company representative” even though these companies already register a “resident agent.”

HB 1210/SB 706 – Environment – Permit Determinations – Cumulative Impact AssessmentsSTATUS: DEFEATED

Required a cumulative impact assessment for certain permit decisions issued by the Maryland Department of Environment (MDE). Before a company could certain permits (i.e. landfill, air, water) affected by the bill, MDE would be empowered to consider the effects of other permits issued in the community.

MiSCELL ANEOUS

HB 430 – Commercial Law – Patent Infringement – Assertions Made in Bad FaithSTATUS: PASSED Effective October 1, 2014

Protects business owners against “patent trolls” that send out frivolous demand letters alleging that the business has violated a patent. often times the “patent trolls” have no relation to the specific patent in question (i.e. they do not manufacture the product or provide the service derived from the patent). The legislation creates a higher legal burden for these companies to establish

a violation, and empowers business owners to seek damages for legal claims made in bad faith.

HB 1403 – Homestead Exemption – Bankruptcy – Interest in Manufactured HomeSTATUS: PASSED Effective October 1, 2014

clarifies that manufactured housing which is converted to real property will receive the homestead exemption under bankruptcy law like other residential real property.

Recent Weak Data Largely Attributable to Atmospheric Conditions

Might as Well

Forecast the Weather

The winter of 2013/14 was brutal. Construction starts were delayed. Merchandise sat idly at ports. Consumers stayed indoors and local government budgets were hammered by snow removal costs.

For about three months, forward economic momentum was stymied. According to the preliminary estimate from the Bureau of Economic Analysis, the U.s. economy

expanded at a 0.1 percent pace during the year’s initial quarter. That estimate is subject to revision and could conceivably be revised into negative territory. Fortunately, most economic indicators suggest that both spending and production have already rebounded from their sluggish first quarter pace.



For a time, economists debated whether first quarter weakness was attributable to the weather or to economic fundamentals. We can now say with some degree of confidence that atmospheric conditions are largely to blame. consumer spending began to trend higher as early as March. According to the Bureau of Labor statistic’s initial estimate, the nation added 288,000 jobs in April and almost 2.4 million jobs over a recent 12-month period. While the character of jobs being added to the economy is generally low wage, more Americans

enjoy employment opportunities and unemployment is now closer to six percent than seven.

Despite a soft start to 2014, this year is still poised to be better than last. The global economy expanded by a below-average 3 percent in 2013. The U.s. economy expanded by less than 2 percent, though the latter half of the year was much better than the first. The s&P 500 gained 29.6 percent last year, the largest annual gain since 1997. The Dow Jones was up 26.5 percent and the NAsDAQ was up by more than 38 percent. Equity markets in the U.s.

largely traded sideways during 2014’s initial five months, but at least did not give up the massive gains generated last year.

corporate profitability has been nothing short of astonishing. Profits from current production increased $47.1 billion during the final quarter of 2013. Equity prices had been expanding more rapidly than profits during much of the past year, but a recent market adjustment changed that. As of this writing, the s&P 500’s price earnings ratio stands at 17.6, down from 18.45 a year prior.

consumers and key segments of the broader economy continue to benefit from favorable interest rates and easing credit conditions. According to the Household Debt and credit Report of the Federal Reserve Bank of New York, consumers took on $241 billion in new debt during the fourth quarter of 2013, the largest quarterly increase since 2007. While consumers refuse to reveal a sense of confidence (a recent NBc survey found that 57 percent of those surveyed still believe that the U.s. is in recession), the fact of the matter is that consumers have certain things about which to feel confident, including faster job creation and lower unemployment.

commercial real estate stands out as a beneficiary of easing credit standards. The Federal Reserve’s April 2014 senior Loan office opinion survey on Bank Lending Practices indicates that on balance U.s. institutions have eased standards for most forms of commercial real estate loans. These same bankers report stronger demand for such loans. The comptroller of the currency’s

source: Bureau of Economic Analysis. *2014 Q1 Advanced (1st) Estimate

Exhibit 1: U.S. Real Gross Domestic Product Annualized Percentage Growth, Q1 1990 – Q1 2014*

source: Bureau of Labor statistics; *Population Age 16+

Exhibit 2: Civilian Labor Force Participation Rate, April 1948 – April 2014*


2013 survey of credit Underwriting Practices reports that bank examiners determined that 24 percent of banks offering non-construction commercial real estate loans eased their lending standards compared to a year prior while only 8 percent tightened standards.

Indeed, private construction spending will be one of the faster growing segments of the national and local economies this year. Associated Builders and contractors expects that nonresidential construction spending will climb 6.9 percent in 2014, though private spending will expand more briskly. Thus far during the recovery, much capital investment (perhaps too much) has flowed into various apartment markets. This will continue. But construction’s recovery is set to broaden, with more spending on hotels and shopping centers forthcoming. Pension, endowment, life insurance and other funding sources are now flush with capital. Many have increased their real estate allocations given still incredibly low interest rates (frustratingly low yields) and stock prices that appear expensive. That in turn is increasingly translating into new apartment buildings, office space, hotels/casinos, fulfillment centers, factory expansions, power plants, shopping centers and data centers. shifts in public policy are also producing additional opportunities in healthcare and mass transit.

However, rebounding commercial real estate and construction activities only serve to partially offset the recently observed slowdown in owner-occupied housing market activity. Prices continue to recover. The s&P/

case-shiller 20-city composite Index indicates a 13.1 percent increase in home prices over the past year, including 9 percent appreciation in the Washington metropolitan area (the Baltimore area is not represented in the 20-city composite Index).

Usually, higher prices signal that additional supply is warranted. But new home sales, single-family starts and permits have been slumping of late. This appears to be due to perceptions and predictions of inadequate demand.

Despite the allure of low mortgage rates and more accessible credit, the housing market refuses to maintain sustained recovery, likely due to a combination of poor quality job creation, shifting lifestyles, student debt issues, low inventories, higher prices faced by prospective buyers (nationally, median existing home sales price rose 7.9 percent in March on a year-over-year basis) and fear.

The lack of demand is not just affecting the market for new homes. The existing home sales market has also experienced a lack of vibrancy recently. In March, existing home

source: Bureau of Labor statistics

Exhibit 3: National Monthly Job Growth, April 2001 – April 2014, SA

source: census Bureau

Exhibit 4: U.S. Retail and Food Service Sales, 12-month Percentage Change, March 2001 – April 2014


sales dipped again nationally, representing the seventh time in eight months that sales had declined on a seasonally adjusted basis.

Undoubtedly, weather has played a part in shaping the data in recent months. The impact of the weather has gone beyond keeping people indoors and away from homes

offered for sale. This past winter’s unusual breadth, duration and severity induced many families to spend more on propane, heating oil, natural gas and electricity than is typical. For now, many of those families have likely turned their back on the possibility of purchasing a larger home; one that is likely to be

associated with even higher utility bills. The supply of upscale rental units in many metropolitan areas, including throughout the Baltimore and Washington metropolitan areas, may also be affecting demand for owner-occupied units.

Maryland’s Recovery Remains slower than the Nation’sTo a certain extent, the situation in Maryland reflects broader national trends. Housing market momentum has been softening here as well. Year-over-year existing home sales slipped 4 percent in April. Average sales price was up by less than 1 percent in April relative to the same month last year, while median sales price fell slightly. Most of Maryland’s largest jurisdictions have registered only small average sales price increases over the past year, including 1.4 percent in Anne Arundel county and small declines in Frederick and Harford counties and in Baltimore city.

The expectation is that the ongoing improvement in atmospheric conditions and the end of the school year will usher forth improvement. Indeed, normal seasonal factors will help accelerate housing activity, but reasons for concern linger.

First and foremost, job growth in Maryland continues to be slower than the nation’s. The state’s economy added 24,900 jobs between April 2013 and April 2014. This translates into a growth rate of 1.0 percent, well short of the corresponding national rate of 1.7 percent. sequestration is at least partially responsible, but there is also evidence indicating that


Rank State % Rank State % Rank State %

1 North Dakota 5.2 17 Indiana 1.6 33 Mississippi 0.9

2 Nevada 3.8 17 Iowa 1.6 33 New York 0.9

3 Florida 3.3 17 Oklahoma 1.6 37 Idaho 0.8

4 Texas 3.1 21 Minnesota 1.5 37 Montana 0.8

5 Colorado 3.0 22 Massachusetts 1.4 37 West Virginia 0.8

5 Oregon 3.0 22 Missouri 1.4 40 Alabama 0.7

5 Utah 3.0 22 Rhode Island 1.4 40 Louisiana 0.7

8 California 2.3 25 Kansas 1.2 42 Michigan 0.6

9 Washington 2.2 25 Nebraska 1.2 42 Pennsylvania 0.6

10 South Carolina 2.1 25 South Dakota 1.2 44 Illinois 0.5

11 Delaware 2.0 28 Ohio 1.1 45 Alaska 0.4

12 Georgia 1.9 28 Wyoming 1.1 45 Connecticut 0.4

12 Wisconsin 1.9 30 Hawaii 1.0 47 District Of Columbia 0.3

14 New Hampshire 1.8 30 Maryland 1.0 47 Kentucky 0.3

14 North Carolina 1.8 30 Vermont 1.0 49 New Jersey 0.1

14 Tennessee 1.8 33 Arkansas 0.9 50 Virginia -0.1

17 Arizona 1.6 33 Maine 0.9 51 New Mexico -0.7

Exhibit 5: State-by-state Nonfarm Employment Growth, 12-month Percentage Change, April 2014


Exhibit 6: Maryland Job Growth by Industry, Seasonally Adjusted (SA), April 2013 v. April 2014


Maryland is losing spending power as affluent citizens move to more tax advantaged communities.

Elevated numbers of distressed properties have also disproportionately affected the Free state’s economy. one in every 527 housing units in Maryland reported a foreclosure filing in March, second only to the corresponding proportion in Florida. There were 2,634 foreclosure starts in Maryland in March, up 28 percent compared to the year below according to RealtyTrac. The addition of these distressed units to the marketplace will subdue price increases and also robs the non-distressed market of some number of potential buyers.

still, with the U.s. economic recovery set to re-accelerate, Maryland’s outlook is far from miserable. Leading indicators remain generally positive. According to the Federal Reserve Bank of Richmond’s Maryland Business survey, both general business activity and sales indices registered 12 in April following the startling jump to 35 and 38 in March, respectively. The March results marked the highest level in the history of the survey. The survey also points to more rapid hiring going forward, with the employment index standing at 19, up from 12 in the prior month.

However, other sub-indices are not nearly as promising. In March, 54 percent of those surveyed indicated that they expected greater business activity in six months. The following month, that figure fell to 41 percent. Moreover, 12 percent of April’s respondents indicated that they expect business activity to decline in the near future, up from 5 percent in March.

Looking AheadDespite highs and lows in the stock market, sluggish labor market conditions in Maryland and the appearance of Russians in the Ukraine, sage’s forecast has barely budged. Leading the way will be moderate growth in consumer outlays, rising energy production, higher industrial and agricultural production and decent but unspectacular housing market performance.

Maryland’s expansion will be a bit slower than the nation’s due to a relative absence of growth in industrial and energy production categories and the ongoing effects of sequestration. sage predicts that state personal income will expand slowly in FY2014, but that income gains will accelerate in 2015.

This is largely based on evidence indicating that skills shortages are becoming more prominent. While overall unemployment remains high, much of the problem is concentrated among the long-term

unemployed. Those who have been unemployed for shorter periods are generally enjoying much better outcomes due to the growing number of employers in search of skilled workers. The Employer cost Index now reveals a pickup in wage gains among production workers, including those involved in residential construction. The current forecast based on sage’s quantitative model indicates that Maryland will experience 4.7 percent personal income growth by FY2015, but that model-generated estimate may very well turn out to be a shade high.

Exhibit 7: Maryland Unemployment Rates by County (Not Seasonally Adjusted), March 2014

Rank County Unemployment Rate Rank County Unemployment Rate

1 Howard County 4.2 13 Talbot County 6.5

1 Montgomery County 4.5 14 Caroline County 7.0

3 Frederick County 5.0 15 Kent County 7.1

4 Calvert County 5.1 16 Allegany County 7.2

5 St. Mary's County 5.2 17 Cecil County 7.2

5 Anne Arundel County 5.3 18 Garrett County 7.3

7 Carroll County 5.3 19 Washington County 7.3

8 Charles County 5.5 20 Wicomico County 7.7

9 Queen Anne's County 5.6 21 Baltimore City 8.3

10 Harford County 5.9 22 Dorchester County 9.0

11 Prince George's County 6.0 23 Somerset County 9.0

12 Baltimore County 6.1 24 Worcester County 13.5


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*Brooks Rose Supplemental Awareness Study, 2013. Nothing in this document is intended to create an employment relationship. Any affiliation by you with Coldwell Banker is intended to be that of an independent contractor sales associate. ©2014 Coldwell Banker Real Estate LLC. Coldwell Banker is a registered service mark licensed to Coldwell Banker Real Estate LLC. An Equal Opportunity Company. Equal Housing Opportunity. Operated by a subsidiary of NRT LLC. 8072BALT_3/14

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Developing a core group of diverse Centers of influence (COi) is a key factor in the degree of your potential success. Contractors, mortgage brokers, CPAs, estate attorneys and fellow REALTORS® are some of the COis that should make up your essential core system.

Methods of DevelopmentThere is no one way to develop and nurture your coI network. But there are some factors to keep in mind that will help you create the most effective group:

• Dotheyhaveregularcontactwiththetypesofindividuals who are your ideal clients?

• Aretheytrustedandwellrespectedinyourcommunityand within their industry?

An effective coI network requires you to add value to their businesses as well. Be a resource to your coIs; find creative ways to add value. If you consistently find opportunities to help them provide better service to their clients, you will make yourself stand out among your competition. This could include assisting in finding property information or referring them to credible sources for specialized information. Becoming a connector of people will yield great results over time.

often your best opportunities to find powerful coIs occur when giving of time and talent to a cause. Participation in charitable and philanthropic groups is a great way to meet

coIs. Working together for a common cause creates a bond that is real and a connection outside of business. offering your expertise as a guest speaker or hosting a business to business event with a local organization, where you can speak on trends in the local market, are good ways to establish your credibility and knowledge.

Types of coIsGenerally, the kind of interaction you have with your coIs reflects two different levels of relationships: those you have with a “core” coI and those with a “General” coI. Both types of coIs are valuable and should be treated as such.

The differences reflect the weight of three factors, which can be summarized as:

Time Exchange + Leveraging Potential + Reciprocal Benefits = Type of COI

Developing and Sustaining Your Centers of Influence Network


In other words, how much time you spend communicating, added to the leveraging potential you have with that individual, added to any reciprocal benefits each of you will experience, all combine to determine whether someone is core or General. obviously, the more of each of these factors, the more likely you are dealing with a core coI. It’s important to recognize whether you are dealing with a core or General coI, so that your expectations and efforts will reflect the likely outcome of your interactions.

sustaining Versus MaintainingYou will reap the most reward by SUSTAiNiNG your relationships with core coIs. That means a consistent cycle of contact, interaction and exchange. The communication itself does not have to be lengthy, but must be genuine. Providing referrals, follow-up calls, lunch or coffee meetings as well as more thoughtful inquiry will keep you fresh on your core coIs mind and build the trust necessary to sustain a fruitful relationship.

General coI relationships can go extended periods of time without contact, because typically they do not yield the same high level of leads. Nevertheless, these relationships should be MAiNTAiNED, meaning they require less frequent buy periodic attention. of course, you cannot hope to be

successful in reviving contact if you do so only when you need something. But you can communicate in less personal ways—email, for example, or a note or occasional phone call. Keeping touch periodically makes it easier when you need a referral without appearing self-serving.

Developing and sustaining or maintaining your coI network will be reflected in the success of your business. Using these simple methods will help you expand your network of core and General coIs, and nurture these vital relationships. This will ensure the growth and longevity of a mutually beneficial and influential network.

Join us in the next issue as we explore specific strategies for Enhancing coI Relationships.

By Victoria Gillespie, M.B.A, Licensed MD REALTOR®, National Director & VP, Business Development REALTORS® Federal Credit Union, and Jewel Codosea, M.A., Business Development Administrator, REALTORS® Federal Credit Union

Why Global Business?


Why Global Business? We live in a global marketplace. All real estate is

local, but property buyers may come from anywhere. According to the 2013 Profile of international Home Buying Activity (realtor.org/reports/profile-of-international-home-buying-activity), a significant share of home purchasers are people whose primary residence is outside of the U.S. More than $82 billion worth of residential real estate is sold to foreign and immigrant buyers annually.

Global business includes both residential and commercial transactions with foreign nationals, immigrant clients, buyers with extended family abroad, employees of foreign corporations, multilingual families, and other groups residing in communities in every state.

Foreign purchasers are interested in U.s. real estate for residential, investment and portfolio diversification purposes. since 2000, about 1 million immigrants have come annually into the United states. About 2.5 to 3 million have entered the U.s. as temporary workers on non-immigrant admissions since 2010. A majority of recent immigrants come from Asia and Latin America.

Immigrants are likely to become homeowners over time; the homeownership rate of the foreign-born who are now U.s. citizens (naturalized) is at par with native U.s. citizens. The naturalized foreign-born have sound prospects for home ownership because they are generally well-educated and earn comparably high incomes. on the other hand, the foreign-born who are not yet U.s. citizens are mostly renters.

The following tables confirm that these statistics hold true for Maryland as well, based on Business Data for International Real Estate Transactions in Maryland (NAR, october 2013) realtor.org/sites/default/files/reports/2013/international-business-reports/international-business-report-maryland-2013-10.pdf.


Table 7. Home ownership and IncomeMaryland Home Ownership Rate (in %) Median HH income ( in $)

Total 66.5 71,122

Born in the U.s. or abroad of U.s. parent(s) 68.2 71,767

Foreign Born 56.5 67,644

Naturalized 72.2 79,691

Not a U.s. citizen 34.5 55,044

U.S.

Total 63.9 51,371

Born in the U.s. or abroad of U.s. parent(s) 66.0 51,975

Foreign Born 51.0 46,983

Naturalized 65.4 56,190

Not a U.s. citizen 33.7 38,214

Source: U.S. Census Bureau, ACS2012, 1 yr. estimates, Table S0501

Table 8. Immigration (Maryland) by origination Region and country in 2012

BY REGiON

Total # 24,971

Africa 7,786

Asia 9,926

Europe 1,555

North America 4,068

south America 1,546

BY COUNTRY

Total # 24,971

India 1,611

china/People’s Republic 1,563

Nigeria 1,540

Ethiopia 1,399

El salvador 1,258

Philippines 1,257

cameroon 1,218

Source: DHS, Yearbook of Immigration Statistics, Supplemental Table 1.

Immigration by origination Region in 2012

Maryland

Africa

Asia

Europe

North America

oceania

south America

0% 10% 20% 30% 40% 50%

31%

40%

6%

16%

0%

6%


We can helpYour Business Grow

.

Federally insured by NCUAwww.RealtoRsFCU.org

* For more information on loan products, rates, and terms, visit www.REALTORSFCU.org.**Message and data rates may apply. Message frequency depends on account settings. To get help with Mobile Banking, call us toll-free at 1-866-295-6038. Mobile Deposit is a registered trademark of Mitek Services, Inc. Qualification criteria apply for Mobile Deposit. Mobile Deposit is available for iPad3, iPhone4, iPhone5 and most Android devices enabled with a camera. iPhone and iPad are registered trademarks of Apple Inc. Android is a trademark of Google Inc. App Store is a service mark of Apple Inc.***Membership eligibility and initial deposit of $5 into primary savings account required to join or obtain a loan. Accounts closed and reopened are not eligible; must be member’s first account with REALTORS® FCU. Bonus will be credited to new member’s primary savings 30 days after member’s account is opened and in good standing.

Call Victoria Gillespie, VP & National Director of the REALTOR® Division at 703-251-2190 [email protected].

Visit the Credit Union booth during the MD State Convention September 8 – 10 to meet Victoria Gillespie, VP & National Director of Business Development, and the Credit Union’s Business Development team, and ask us how we can help your business grow with:

Commercial Real estate loans*

PURChASE • REFINANCE IMPROVEMENTS

• Competitive interest rates• 5-, 7- and 10-year terms• 25-year amortization• No prepayment penalties• SBA 7(a) and 504 lender

Plus earn more with our higher savings rates, save with lower loan rates, and get 24 hour access to your accounts with:

Free Mobile Banking with Mobile Deposit and Mobile Bill Pay**

Join during the MD State Convention, September 8 – 10, 2014, mention this ad and we will make the initial $5 deposit in your new account.***

As a bonus, if you attend Victoria Gillespie’s session on Wednesday, September 10, 2014, from 9:30-11:00 am and join the Credit Union, you can receive a $25 coupon, for a deposit of $25 into your newly opened and funded Credit Union account.

Home ownership Rates By citizenship status in 2012

Born in the U.s. or abroad of U.s. parent(s)

Naturalized Not a U.s. citizen

Maryland

U.s.

Top countries of origin in 2012 Number of Immigrants

Maryland

India

china, People's Republic

Nigeria

Ethiopia

El salvador

1 500 1,000 1,500 2,000

1,611

1,563

1,540

1,399

1,258


commercial real estate in Maryland is increasingly affected by global markets. According to MD BIZ News (March 3, 2014), Maryland has taken significant steps to ramp up the state’s international outreach. In 2011, the Governor led two historic economic development missions —one to china, south Korea and Vietnam and one to India—that netted a combined $145 million in trade and investment deals for the state and the companies that were part of the delegation. In 2013, the Governor led a trade mission to Brazil, resulting in EMs s/A, Brazil’s largest domestic pharmaceutical company, announcing its new U.s. headquarters in Montgomery county and plans to invest $200 million into the new operation.

Maryland has foreign trade offices in targeted countries, including china (shanghai), Israel (Tel Aviv), France (Paris), Africa (Nigeria); India, Russia, south Korea (seoul), Taiwan (Taipei), Vietnam (Hanoi and Ho chi Minh city), Brazil, and United Arab Emirates (Dubai). With the exception of the offices in china and Israel, all the state’s foreign offices operate on a contingency basis with no up-front cost to taxpayers.

Maryland’s office of International Investment and Trade works to stimulate foreign direct investment in the state, offering export assistance for small and mid-sized Maryland companies and coordinating international trade and investment missions and trade show opportunities for Maryland companies. For more information on resources available to business that want to market their products or services globally, visit choosemaryland.org/International/Pages/default.aspx.

MAR Gets With the ProgramThe Maryland Association of REALToRs® is launching a Taskforce to establish a Global Business council for Maryland in 2015, which will be dedicated to globally-themed education, programming, and networking for our members. The council, to be comprised of volunteers and staff liaisons, will take the lead in planning global programs, hosting cIPs* courses, and collaborating with neighboring associations to build awareness among members of the global business opportunities that surround them.

*Certified international Real Estate Specialist (CiPS) designation program and business network—provides introductory and advanced training for real estate professionals and administrators, along with business development/networking tools, resources and events. Access course descriptions, schedule, benefits and other information on cIPs from the NAR Global home page, www.realtor.org/global.

The council will help Maryland REALToRs® build partnerships with globally-minded businesses, mortgage brokers, attorneys, and other relevant local entities, based on a model developed by the National Association of REALToRs®.

over 100 Global Business councils currently exist at state and local associations across the country, operating on annual budgets ranging from $0 to five-figures. Global Business councils communicate the importance of the business opportunities and underscore REALToRs® international and multicultural real estate transaction potential. realtor.org/global/global-business-councils/about

For more information about the new Task Force and global business networking, contact [email protected] or [email protected].

commercial connection c H R I s G A L L A N T

It's a Borrower's Market!

www.mdrealtor.org MARYLAND REALTOR® JUNE / JULY 2014 33

While this stage of the real estate cycle has been difficult, it presents excellent opportunities for the entrepreneurial-minded. Market

conditions have kept price tags on commercial real estate low and for years it’s been a buyer’s market.

Now it’s a borrower’s market, too. With property values stabilizing and the government’s investment in the economy, bankers are becoming more comfortable making real estate loans, especially for owner-occupied commercial real estate. These loans present less risk for lenders, and coupled with historically low rates and government backed programs, such as the sBA (small Business Administration) 7A and sBA 504 Loan Programs, are very attractive for small business owners seeking to expand.

The sBA Loan Programs allow small businesses (net worth under $7 million and net profits after taxes $2.5 million) to secure financing at low down payments and longer financing terms to purchase fixed assets such as: land and improvements, including owner-occupied buildings, construction of new facilities and modernization of existing facilities. soft costs such as fees and environmental studies can be rolled into the loan along with most closing costs.

one of the biggest draws is a down payment as low as 10 percent (sometimes even lower). Another is the ability to get financing for “special use” properties that banks typically avoid financing: gas stations, restaurants, nursing homes, hotels, franchises and carwashes, for example. The low down payment and financing of soft costs allow some small business owners to realize substantial cash savings upfront.

sBA 7A is the larger and more popular program. It is a loan from an approved sBA lender and guaranteed by the sBA. Proceeds may be used for a variety of purposes: the purchase of a business and/or owner-occupied

commercial real estate, the refinance of a business and/or owner-occupied commercial real estate, renovation or construction of commercial real estate, expansion of an existing business to a new location, purchase of machinery and equipment, lease-hold improvements, working capital, soft costs and loan closing costs.

The 7A loan has a 25 year term with a 25 year amortization and no balloon payment when the loan involves financing commercial real estate. The interest rate is typically prime plus a margin, adjusted quarterly. In some cases, an approved sBA lender will provide a fixed rate on the sBA 7A loan. The maximum loan amount for any borrower is $5 million.

sBA 504 involves a bank that provides a 50% first position loan and an sBA approved certified Development company (cDc) that provides a 40% 2nd position loan. The remaining 10% (up to 20% in some cases) is the down payment required from the borrower. The sBA 504 loan program can be used for the purchase of long-term fixed assets to include real estate, machinery and equipment. The 40% cDc 2nd position loan has a 20 year fully amortizing fixed rate loan when it involves the purchase of commercial real estate. The rate for the 50% bank first position loan can be either fixed or adjustable and may have a shorter term than the cDc 2nd position loan. The cDc loan is fully guaranteed, while the bank loan is not.

The maximum loan amount under the 504 is $5 million, although, when combined with the 50% 1st position bank loan it can be as much as $9 or $10 million. [Note: If you borrow $350,000 or less, your loan automatically falls under the small Loan Advantage Program.]

For more information on the SBA 504 and SBA 7A Loan Programs, contact Chris Gallant of Fidelity Bank at 410-531-6897.

Regulation news M A R K F E I N R o T H , E s Q .


contractor Referrals: A Real Estate Agent’s Responsibility

An article in the Fall 2012 edition of the Real Estate commission Newsletter advised real estate licensees of their duty to check a contractor’s

license status before recommending the contractor to a client or homeowner. The commission’s article http://archive.constantcontact.com/fs181/1107521351603/archive/1111617739507.html#LETTER.BLocK55 recounted the severe weather and resulting property damage from Hurricane sandy and noted that real estate licensees have a “professional duty” to check a “home related contractor’s Maryland license before you endorse his or her services.” According to the commission’s article, real estate licensees who fail to check a contractor’s license before making a recommendation could be subject to disciplinary action resulting in a suspension or revocation of the agent or broker’s license as well as a fine of up to $5,000 for each violation.

There were a great many questions about the commission’s article: To which types of contractors does the policy apply? How often must the contractor’s license status be checked? And perhaps of greatest consequence: what law or regulation does the Real Estate commission rely upon to support the view that a real estate agent has a duty to check a contractor’s license prior to recommending the contractor to a consumer?

on behalf of our members, the Maryland Association of REALToRs® asked these and other questions regarding the contractor referrals policy. The commission’s original article referred to the Maryland Real Estate Brokers Act, section 17-532, which outlines the basic duties of a licensee to a client and other parties to a transaction. Nothing in section 17-532 specifically requires a

licensee to check a contractor’s license status before making a referral.

In conversations with members of the commission, we learned that they are concerned that clients and other homeowners may assume that a real estate agent’s contractor referral is licensed in good standing. Therefore, if an agent engages in the practice of making such referrals, the agent must “exercise reasonable care and diligence” as required under 17-532 when making contractor referrals.

The Maryland Association of REALToRs® strongly urged the commission to adopt a clear regulation on this subject so that real estate licensees will know exactly what is required when making contractor referrals and consumers need not assume that a recommended contractor is appropriately licensed. At the March 2014 Real Estate commission meeting, commissioners voted to propose draft language on the subject which will appear in the Maryland Register in the near future. A public comment period will follow and MAR will submit comments if we believe the proposed language can be improved.

When the proposal appears in the Maryland Register we will post it on the MAR website. Please feel free to contact me with your comments so that we can include the best ideas in our written comments. I can be reached at [email protected] if you have any questions regarding this or other licensing and regulatory issues.

Mark Feinroth, Esquire, MAR Director of Regulatory Affairs.


NAR REALToRs conference & EXPoNovember 7–10, New orleans, LA

The NAR Conference & Expo will be held in New Orleans, LA. This year’s theme is REALTORS® in Full Swing!, and indeed, REALTORS® are back at the height of activity. This event will help you prepare your business for 2015.

17,000 members and guests are expected to attend this year’s event. It takes only one referral from attending to pay for the REALToRs® conference & Expo!

The REALToRs® conference & Expo is home to the largest trade show floor in real estate nationally, with nearly 400 exhibitors and close to 100,000 square feet expected at the 2014 event.

REGIsTER Today! http://registration3.experientevent.com/showNAR142/

MAR Members on the Go!

MAR’s NEW Members on the Go! section

our members are ALWAYs oN THE Go! MAR wants to highlight your professional accomplishments and community service. Tell us if you have earned an NAR/MAR designation recently; been appointed to an NAR committee or performed service in your community. submissions will be reviewed and published in the magazine.

Tell us what you’ve done!

send your submissions to Melissa Lutz, [email protected].

Residential Sales A N I R B A N B A s U

Maryland Housing Market Has Lost some MomentumHigher Prices and Mortgage Rates Make Their Mark


In March, total national existing home sales declined 0.2 percent for the month, the seventh time in eight

months that sales fell on a seasonally adjusted basis. National existing

home sales trended down to a seasonally adjusted

annual rate of 4.59

million units, down 7.5 percent from the same month one-year prior.

This is disappointing. We are approaching the sixth year of economic recovery. Unemployment continues to trend lower. The nation added nearly 2.4 million jobs during the recent twelve-month period. All things being equal, the housing market should be picking up momentum.

Instead, the housing market recovery has stalled a bit. There are a number of factors at work. Mortgage rates

rose last summer and never came down to previous lows. on top of that, home prices in many regions of the nation have risen significantly over the past twelve to eighteen months, further compromising affordability. National median existing home sales price rose 7.9 percent in March on a year-over-year basis. Investors have also scooped up many lower priced homes in recent years, further reducing affordability for those seeking to own a property.

Though job growth has accelerated, the quality of net new jobs being added is poor from the perspective of annual income, and therefore the labor market is not driving the housing market as it otherwise would. During

a recent twelve-month period, four particularly low wage segments of the U.s. economy—home health,

temporary staffing, leisure and retail—added 43.6 percent of all net

new jobs.


March 2014 vs. 2013UnitS AveRAge PRiCe

County 2014 2013 % Change 2014 2013 % Change

Allegany 40 31 29.0% $95,696 $106,956 -10.5%

Anne Arundel 449 425 5.6% $341,956 $344,278 -0.7%

Baltimore City 504 444 13.5% $156,927 $156,412 0.3%

Baltimore County 561 561 0.0% $251,056 $230,997 8.7%

Calvert 61 82 -25.6% $301,543 $310,607 -2.9%

Caroline 25 23 8.7% $149,932 $148,231 1.1%

Carroll 133 115 15.7% $277,518 $283,718 -2.2%

Cecil 54 64 -15.6% $206,819 $215,773 -4.1%

Charles 132 155 -14.8% $238,875 $239,119 -0.1%

Dorchester 21 29 -27.6% $170,105 $180,342 -5.7%

Frederick 222 221 0.5% $282,855 $277,818 1.8%

Garrett 24 23 4.3% $357,354 $236,804 50.9%

Harford 184 189 -2.6% $240,903 $258,532 -6.8%

Howard 217 223 -2.7% $437,635 $390,952 11.9%

Kent 15 15 0.0% $301,901 $324,100 -6.8%

Montgomery 709 826 -14.2% $494,896 $484,775 2.1%

Prince George’s 544 665 -18.2% $221,733 $192,375 15.3%

Queen Anne’s 32 43 -25.6% $276,276 $375,337 -26.4%

Somerset 17 15 13.3% $143,159 $79,980 79.0%

St. Mary’s 72 82 -12.2% $283,297 $260,233 8.9%

Talbot 39 33 18.2% $337,513 $537,758 -37.2%

Washington 95 104 -8.7% $180,185 $147,631 22.1%

Wicomico 64 65 -1.5% $123,322 $139,585 -11.7%

Worcester 138 138 0.0% $230,611 $244,002 -5.5%

totaL 4,352 4,571 -4.8% $292,047 $288,100 1.4%

Figures reflect resales and new properties. Residential resales are reported by MRIs® and local associations MLs systems.

The weather has also played a part. Many households spent considerable sums on heating oil, natural gas, propane and/or electricity during the winter months, reducing spending power and negatively impacting the larger home/move-up market, which is often associated with larger utility bills. The profusion of new apartment buildings being built in communities across the nation represents yet another factor, as young people, in particular, seem content to remain in their shiny new rental units.

circumstances in Maryland appear no better. In March, existing home sales dipped 4.8 percent on a year-over-year basis. Both average and median sales prices were up less than 2 percent. A similar pattern persisted in April, with unit sales down 4 percent, average price up 0.5 percent, and median sales price down 0.6 percent.

According to data supplied by MRIs and the coastal Association of REALToRs®, only half of Maryland’s 24 jurisdictions experienced sales increases in March. These included Allegany county (29.0%); Talbot county (18.2%); carroll county (15.7%); Baltimore city (13.5%); somerset county (13.3%) and caroline county (8.7%). The same number of jurisdictions experienced year-over-year advances in unit sales in April. This group was led by caroline county (65.0%); somerset county (41.7%); Washington county (23.1%); Dorchester county (20.8%); Baltimore city (11.9%); calvert county (11.4%); Garrett county (9.1%); Frederick county (6.6%); Worcester (5.9%); and Wicomico (5.1%). Among the counties sustaining unit sales declines were Kent (-30.8%), st. Mary’s (-21.5%) and charles (-20.9%).

In March, 11 jurisdictions reported higher average sales prices compared to a year ago, while 15 reported higher median sales prices. Jurisdictions experiencing significant year-over-year increases in sales prices included somerset county, where the average price increased 79.0 percent and median price rose 7.2 percent; Garrett county, where the average price rose 50.9 percent and median price increased 62.5 percent; and Washington county, where the average price increased 22.1 percent and the median price rose 13.5 percent. Ten jurisdictions reported higher average sales prices in April, with the


April 2014 vs. 2013UnitS AveRAge PRiCe

County 2014 2013 % Change 2014 2013 % Change

Allegany 35 37 -5.4% $79,751 $117,525 -32.1%

Anne Arundel 530 545 -2.8% $374,775 $369,588 1.4%

Baltimore City 574 513 11.9% $159,370 $165,596 -3.8%

Baltimore County 596 641 -7.0% $252,430 $251,393 0.4%

Calvert 88 79 11.4% $306,194 $320,607 -4.5%

Caroline 33 20 65.0% $153,682 $206,626 -25.6%

Carroll 130 126 3.2% $273,593 $298,072 -8.2%

Cecil 62 68 -8.8% $204,024 $202,337 0.8%

Charles 102 129 -20.9% $254,823 $230,359 10.6%

Dorchester 29 24 20.8% $137,773 $183,996 -25.1%

Frederick 260 244 6.6% $286,080 $301,440 -5.1%

Garrett 24 22 9.1% $423,225 $365,886 15.7%

Harford 174 200 -13.0% $254,176 $255,913 -0.7%

Howard 272 274 -0.7% $434,447 $396,761 9.5%

Kent 9 13 -30.8% $280,267 $341,500 -17.9%

Montgomery 871 985 -11.6% $516,433 $493,004 4.8%

Prince George’s 633 725 -12.7% $222,107 $202,077 9.9%

Queen Anne’s 51 50 2.0% $351,233 $418,007 -16.0%

Somerset 17 12 41.7% $121,582 $130,825 -7.1%

St. Mary’s 73 93 -21.5% $281,018 $264,073 6.4%

Talbot 45 52 -13.5% $347,304 $375,675 -7.6%

Washington 133 108 23.1% $178,987 $191,536 -6.6%

Wicomico 83 79 5.1% $146,156 $153,638 -4.9%

Worcester 162 153 5.9% $258,135 $251,378 2.7%

totaL 4,986 5,192 -4.0% $306,320 $304,830 0.5%

Figures reflect resales and new properties. Residential resales are reported by MRIs® and local associations MLs systems.

largest average price increase registered in Garrett county (15.7%).

The pace of price appreciation appears to have flattened significantly in the state’s largest jurisdictions. For instance, in April, year-over-year average sales price was only 1.4 percent in Anne Arundel county, 4.8 percent in Montgomery county, 0.4 percent in Baltimore county and down in both Frederick and Harford counties as well as in Baltimore city. As of April, average sales price in Maryland stood at $306,320, barely different from the $304,830 statistic recorded a year earlier. Median price stood at $256,608 in April, down from $258,093.

The expectation is that with the weather warning, housing market activity will heat up. That’s absolutely likely, but the question is whether the pace of seasonal improvement will be above or below average. For now, the answer remains elusive. Leading indicators are not particularly positive. Pending sales declined in April on a year-over-year basis, suggested that completed sales in May and June may very well fall below year-ago levels.

Weaker sales volumes have also helped translate into higher inventory. For instance, in April 2013, the inventory of unsold homes stood at 2,356 in Anne Arundel county. one year later, inventory had climbed to 2,800, an increase approaching 19 percent. Inventory is also up in Montgomery and Prince George’s counties.

Looking AheadIt is not that the market is in deep decline. It is merely flat. Job growth has picked up recently and interest rates have actually been falling, both of which suggest that housing market momentum could reemerge later this year. For now, REALToRs® must continue to manage seller expectations. The preponderance of buyers remains very sensitive to price. Buyers also have a bit more selection than they did a year ago in a number of Maryland communities.


sNiPPEts from the Housing affordability committee

FHA “BAck tO WORk” PROgRAmBorrower credit has been negatively affected by the recent recession-related period of financial difficulty. FHA recognizes that credit histories may not fully reflect the true ability to repay a mortgage. Borrowers who may have been ineligible for an FHA-insured mortgage due to FHA’s waiting period for bankruptcies, foreclosures, deeds-in-lieu, and short sales, as well as delinquencies and/or indications of derogatory credit, including collections and judgments, may be eligible for an FHA-insured mortgage if the Borrower:

❱ Documents that the delinquencies and/or indications of derogatory credit are the result of an Economic Event (Loss of household income of 20% or more for a period of at least 6 months);

❱ completes satisfactory Housing counseling from a HUD-approved agency; and,

❱ Maintains satisfactory credit for a minimum of 12 months.

This program is currently available until september 30, 2016.

mARylAND DEPARtmENt OF HOUsiNg AND cOmmUNity DEVElOPmENt (DHcD) cONVENtiONAl lOAN PROgRAmcDA offers conventional loans insured by approved private mortgage insurance companies featuring reduced mortgage insurance premiums. Insurers are: Essent Guaranty, Inc., Genworth Financial, Inc. (GE), Mortgage Guaranty Insurance corporation (MGIc), Radian Guaranty, Inc. and United Guaranty Residential Insurance company (UGRIc).

The loans are underwritten to Fannie Mae’s Preferred Guidelines. For those underwritten using the automated program, the loan amount (plus single premium mortgage insurance) may not exceed 97% of the lesser of appraised value or purchase price, and may not exceed $417,000. The minimum credit score is 640 and maximum debt-to-income ratio (DTI) is 45%.

cDA also offers conventional uninsured loans for purchases where the loan to value ratio is 80% or less.

Borrower must meet all of the qualifications of the Maryland Mortgage Program (MMP) and can receive up to $5,000 down payment assistance from DHcD, as well as funds from any of the applicable Partner Match programs. Note: the Borrower does not need to be a first time homebuyer to purchase in Targeted Areas.

To check eligible locations, go to: http://mmp.maryland.gov/Pages/Targeted-Areas.aspx.


HOUsE kEys 4 EmPlOyEEsDo you have a client who needs help with closing costs? Don’t forget to check the list of employers enrolled in the Partner Match Program with the Maryland Mortgage Program: http://mmp.maryland.gov/Pages/ Partner-Employers.aspx.

Your client may qualify for down payment and closing cost assistance from participating employers in the form of a loan or grant, which can then be matched by the Maryland Mortgage Program up to $3,500 (as a zero-interest deferred loan).

Juried Art Show & Silent AuctionBenefitting the Partnership for Housing Foundation (PHF)

Announcing PHF’s first online art auction to benefit MARYLAND HOME MAKEOVER™ and our Endowment Fund.

The theme of “Maryland, My Maryland” has been selected and all artwork must portray something about Maryland, featuring any of the following concepts: Urban, Rural, Bay or Shoreline Scenes; Architectural Landmarks/Prominent Buildings; Portraits of a Community; and “Home."

VISIT THE ONLINE AucTION: 12:00 PM June 25th until 9:00 PM July 10, 2014 For a preview of the artwork and to register to bid go to: www.biddingforgood.com/phfmaryland

For further information and artist qualifications, contact: [email protected]

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From the Hotline c H A R L E s A K A s K Y , E s Q U I R E

MsAs & REsPA


Q. I have seen a recent trend in what appears to be joint advertising between real estate

companies/agents and title and mortgage companies. I assume these are legal, but can you provide some guidance about this practice in light of the restrictions in RESPA?

A. The specific practice to which you refer is called a marketing service agreement (MsA). MsAs are

not illegal as long as they comply with the Real Estate settlement Procedures Act REsPA. As you correctly note, REsPA strictly prohibits kickbacks between real estate agents and settlement service providers in exchange for referrals. There are, however, areas where cooperative activity can occur.

Properly structured MsAs are not illegal kickbacks under REsPA as long as they meet the standards. one of the main elements of compliance is full disclosure. Also, normal promotional and educational activities that are not conditioned on the referral of business and that do not involve the defraying of expenses that otherwise would be incurred by a real estate licensee are not considered kickbacks.

REsPA does not prevent joint advertising between two settlement service providers, such as a mortgage banker and a real estate broker advertising their services on the same brochure or newspaper ad. However, each advertising party must pay for his share on a proportionate basis. so if a real estate broker equally shares ad space with a title company, each party must pay 50 percent of the ad cost. Paying more than the pro-rata share can be considered as “accepting a thing of value” for the referral of business, which is a violation of REsPA’s anti-kickback provision.

on the other hand, a title company can provide a real estate agent with note pads and pens with the title company’s name as long as it is a normal promotional item. However, it is a REsPA violation if the title company provides a real estate agent with note pads and pens

with the real estate agent’s name on the products for marketing realty services to clients. This is because the promotional items with the agent’s name on them can be considered a thing of value for the referral of business as it offsets marketing expenses the agent would otherwise incur.

since its enactment, REsPA was enforced by the Department of Housing and Urban Development (HUD), but is now within the portfolio of the consumer Financial Protection Bureau (cFPB). MsAs between mortgage companies and brokers and between title companies and brokers are coming under increasing scrutiny from the cFPB, so it’s extremely important to ensure that it’s done right.

MsAs do not have a specific statutory basis, but we know the red flags to avoid. The areas of concern include direct consumer solicitation, a transactional fee paid on a per-loan basis, direct receipt and transmission of consumer information, and exclusivity between the parties.

When using marketing services agreements, you should ensure the agreement clearly spells out:

• whatthepartiesaregoingtodo;

• Thatitis structuredonafixed-fee(asopposedtoaper-transaction) basis related to the value provided; and

• Howtherelationshipistobedisclosedtotheconsumer.

Real Estate companies should provide written policies and procedures about establishing and conducting business with referral partners, including periodic evaluation. But with adequate care to ensure compliance, MsAs can play a positive role in your business. Anyone using these should be careful, and have an attorney review the agreement.

Charles A Kasky, Esquire, Senior Vice President, Maryland Association of REALTORS®.

www.mdrealtor.org MARYLAND REALTOR® APRIL 2014 / MAY 2014 43www.mdrealtor.org MARYLAND REALTOR® APRIL 2014 / MAY 2014 43

MAR LEADERSHIP ACADEMY Preparing Tomorrows Leaders TodayPA R T I C I PA N T A P P L I C AT I O N — 2 0 1 4 – 2 0 1 5

iNSTRUCTiONSApplicant must have been licensed since February 1, 2013. Type or print information clearly and complete each section fully. Application must be signed and returned no later than August 1, 2014.

i. PERSONAL DATA

Date: ____________________________________________________________________________________________

Full Name: _______________________________ Nickname Preferred: _______________________________________

Home Address: ____________________________________________________________________________________

Business Address: __________________________________________________________________________________

Home Phone: ________________________________ Business Phone: _______________________________________

E-mail Address: _________________________________________ Fax: _______________________________________

Year Licensed: ________________________ Years in REALToR® Assn. : _______________________________________

How did you hear about the Academy? ________________________________________________________________

Real Estate specialty (check all that apply):

Appraisal commercial International Property Mgmt. Residential Auction counseling Land Relocationother: ___________________________________________________________________________________________

Real Estate Designations Earned (check all that apply):

ABR ccIM cPM cRs GAA GRI RcE sIoR sRs ALc cIPs cRB cRE GREEN PMN RAA sREsother certifications: _______________________________________________________________________________

ii. EDUCATiON Please specify highest level attained. GED Associates Degree Masters Degree Trade school High school Bachelors Degree Doctorate Degreeother: ___________________________________________________________________________________________

B. Leadership positions held, special honors and awards received:

_________________________________________________________________________________________________

_________________________________________________________________________________________________

iii. WORK EXPERiENCE

Present Firm Name: ________________________________________________________________________________

Position: _________________________________________________________________________________________

A. Briefly describe your responsibilities in your job:

_________________________________________________________________________________________________

_________________________________________________________________________________________________

B. What do you consider your highest career achievement to date?

_________________________________________________________________________________________________

_________________________________________________________________________________________________

c. Business/Professional Affiliations (if any) (Please include local Board of REALTORS®, MAR and NAR involvement as well as business affiliations.)

Name of Group positioNs Held or assiGNmeNts period of affiliatioN

iv. COMMUNiTY iNvOLvEMENTA. Include community, civic, religious, political, governmental, social, athletic or other activities. Do not include business/professional activities.

orGaNizatioN assiGNmeNt/positioN describe respoNsibilities

B. If you have additional significant community, civic, religious, political, social, athletic and/or other areas of active involvement, please attach statement.

v. COMMiTMENT (To graduate from the MAR Leadership Academy, a participant is required to attend all sessions.)

Session 1—orientation & organizational Leadership—styles & Visioning—October 2, 2014

Session 2—organizational Long Range Planning—Leading the organization—November 13, 2014

Session 3—Professional conduct and Governance—December 4, 2014

Session 4—The Role of the Association in Legislation/Government Affairs—January 15, 2015

Session 5—Effective communications—Media Relations—February 5, 2015

Session 6—Diversity in Business—March 5, 2015

Session 7—Business Trends & Goal Re-Visitation—April 2, 2015

Session 8—closing Leadership Academy Recognition ceremony—April 14, 2015

Mail application to: MAR Leadership Academy, 200 Harry S. Truman Pkwy, Ste. #200, Annapolis, MD 21401 Interview Locations: Please select priority order with “1”. Time Range: 9 a.m.–3 p.m. (Later if necessary)

_____ ANNAPOLiS 8/12 _____ANNAPOLiS 8/21 DEADLiNE FOR APPLiCATiON SUBMiTTAL iS AUGUST 1, 2014. All applicants will be interviewed.

After interview applicants will be notified of acceptance by September.

i understand the purposes of the MAR Leadership Academy program; and, if i am selected i will devote the time and resources necessary to complete the program. sessions 1 through 7 are mandatory for completion. If a participant misses one (1) session, he/she will be allowed to continue with the class but will not graduate until the missed session is made up, as approved by the Committee, not later than the next year’s program. If a participant misses more than one session, he/she will be asked to withdraw, reapply and repay when he/she is able to make the commitment. No refund will be given. I understand the above commitments and agree to be bound by them in signing this application.

Applicant Signature ___________________________________ Date _______________________________________

Print Name: ______________________________________________

Tuition: If accepted into the MAR Leadership Academy program, you will be personally billed for the $700 tuition fee with payment due prior to program start for course admittance.


3 SERIES 100

Greater Baltimore Board410-337-7200October 1, 8, 15, 22 & 29

SERIES 200

MAR, Annapolis800-638-6425September 30October 7, 14, 21 & 28

Increase Income PotentialREALTORS® with designations are high earn more income than those without designations. The GRI is a way to set you apart from the competition. Broker’s License RequirementThe full GRI classroom series (100, 200, 300, and 400) fulfills the educational requirements needed to take the Maryland broker’s exam (MAR coursework is specific for Maryland). The Name Says it AllAs a GRI (Graduate, REALTOR® Institute), you have accomplished a high level of achievement which indicates to your clients and colleagues an increased skill level, industry knowledge and dedication to your profession.

321

Earn the GRI:

3GREAT THINGS come in

SPlease visit MAR’s website, mdrealtor.org for the most current course schedules.

GUARANTEED TO HOLD!Classes will not be cancelled due to low enrollment!

GRI 2014 Schedule


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Maryland Real Estate commission news K A T H E R I N E c o N N E L L Y

New consumer Members of the commission


Not intended to solicit broker owners already under contract. This is not an offer to sell or solicitation of an offer to buy a franchise. An offer is made by prospectus only. Equal Housing Opportunity

Only EXIT Realty Corp. International is changing the lives of its associates

across North America, to the tune of over a quarter of a billion dollars in single-level

residuals. That’s countless vacations, college educations,

dream cars, cottages, retirements, wedding celebrations, and so much more.

The industry didn’t need another real estate company, it needed a better one.

For all that you aspire to, you deserve a real estate company that

will help you get there.

Anne Arundel EXIT First Realty (Crofton) EXIT Results Realty (Linthicum)Baltimore EXIT Preferred Realty (Perry Hall)Calvert EXIT 1 Stop Realty (Dunkirk) EXIT By the Bay (Prince Frederick)Caroline EXIT Gold Realty (Denton)Cecil EXIT Preferred Realty

(Chesapeake City)

Charles EXIT Landmark Realty (White Plains) EXIT Realty Capitol Properties (Waldorf)Dorchester EXIT Gold Realty(Cambridge)Frederick EXIT Realty Prosperity GroupHarford EXIT Preferred Realty (Bel Air)Howard EXIT Results Realty (Columbia) EXIT Spivey Realty (Ellicott City)

Montgomery EXIT Realty Enterprises (Silver Spring) EXIT Realty Plus (Gaithersburg)Prince George’s EXIT Bennett Realty (Greenbelt) EXIT Elite Realty (Fort Washington) EXIT Elite Realty (Lanham) EXIT Landmark Realty (Clinton) EXIT Right Realty (Laurel)Queen Anne’s EXIT Gold Realty (Stevensville)Talbot EXIT Latham Realty (Easton)

Wicomico EXIT Shore Realty (Salisbury)District of Columbia EXIT Elite Realty (Logan Circle)Territories Available! Allegany, Anne Arundel, Baltimore,

Baltimore City, Carroll, District of Columbia, Garrett, Howard, Kent, Montgomery, Somerset, St. Mary’s, Washington, Worcester

• Offices in ALL 50 States• Regionally: 27 offices, 1,000+ agents• Sponsoring $$ Paid: $1,500,000 last

12 months

Game-changer? Let’s talk life-changer!

EXIT Mid-Atlantic Region (DE/DC/MD/WV) 60 Algonquin Road, North East, MD 21901 410-287-9000 • [email protected]

At the April Real Estate commission meeting, we introduced two new

commission members: Karen Baker, a retired registered nurse from Urbana, and Liliana Robeson, a Hagerstown area community activist.

The Real Estate Brokerage Act established the commission and requires that consumers fill four of the nine seats on the commission. The law defines a consumer member as someone who is not a real estate licensee and does not have a financial interest in or receive compensation from any person regulated by the commission.

Karen Baker is originally from Baltimore and studied nursing at both George Mason and Marymount Universities. she worked for sixteen years at the Bethesda Naval Hospital and fifteen years for the U.s. Food and Drug Administration. Her work for FDA was as a scientific reviewer and nurse consultant in the center for Medical Devices. Ms. Baker expects to bring the same focus on consumer protection that she had at FDA to her work on the Real Estate commission.

Liliana Robeson, a native of colombia, has lived in Hagerstown for the last nine years. she is bi-lingual and has a background in communications, marketing and graphics. Ms. Robeson is the founder of a multicultural arts non-profit community organization serving the Hispanic community in Washington, Frederick and Montgomery counties.

Ms. Robeson has employment experience working in the mortgage industry and believes that background will provide her with a helpful perspective as she settles into her new position on the Real Estate commission. Ms. Robeson also serves on Maryland Hispanic Affairs commission

Ms. Baker and Ms. Robeson’s appointments come at a critical time for the commission. For over a year we have operated with only three of our four consumer members. outgoing commissioners colette Youngblood from Prince Georges county and Jeff Thaler from ocean city had announced their intention to end their service on the commission. Each of the commission’s complaint panels must have at least one consumer member. We would have had great difficulty adjudicating complaints and disciplinary actions with two or three consumer vacancies.

We at the commission look forward to working with Ms. Baker and Ms.

Robeson. If you have any questions regarding your real estate license or the operation the Real Estate commission, please feel free to contact me at [email protected].

Katherine Connelly is the Executive Director of the Maryland Real Estate Commission. If you have other questions regarding the digital CE record system or any other matter concerning your Maryland real estate license at contact her at [email protected] or visit http://www.dllr.state.md.us/license/mrec.

Liliana Robeson

Karen Baker

Not intended to solicit broker owners already under contract. This is not an offer to sell or solicitation of an offer to buy a franchise. An offer is made by prospectus only. Equal Housing Opportunity

Only EXIT Realty Corp. International is changing the lives of its associates

across North America, to the tune of over a quarter of a billion dollars in single-level

residuals. That’s countless vacations, college educations,

dream cars, cottages, retirements, wedding celebrations, and so much more.

The industry didn’t need another real estate company, it needed a better one.

For all that you aspire to, you deserve a real estate company that

will help you get there.

Anne Arundel EXIT First Realty (Crofton) EXIT Results Realty (Linthicum)Baltimore EXIT Preferred Realty (Perry Hall)Calvert EXIT 1 Stop Realty (Dunkirk) EXIT By the Bay (Prince Frederick)Caroline EXIT Gold Realty (Denton)Cecil EXIT Preferred Realty

(Chesapeake City)

Charles EXIT Landmark Realty (White Plains) EXIT Realty Capitol Properties (Waldorf)Dorchester EXIT Gold Realty(Cambridge)Frederick EXIT Realty Prosperity GroupHarford EXIT Preferred Realty (Bel Air)Howard EXIT Results Realty (Columbia) EXIT Spivey Realty (Ellicott City)

Montgomery EXIT Realty Enterprises (Silver Spring) EXIT Realty Plus (Gaithersburg)Prince George’s EXIT Bennett Realty (Greenbelt) EXIT Elite Realty (Fort Washington) EXIT Elite Realty (Lanham) EXIT Landmark Realty (Clinton) EXIT Right Realty (Laurel)Queen Anne’s EXIT Gold Realty (Stevensville)Talbot EXIT Latham Realty (Easton)

Wicomico EXIT Shore Realty (Salisbury)District of Columbia EXIT Elite Realty (Logan Circle)Territories Available! Allegany, Anne Arundel, Baltimore,

Baltimore City, Carroll, District of Columbia, Garrett, Howard, Kent, Montgomery, Somerset, St. Mary’s, Washington, Worcester

• Offices in ALL 50 States• Regionally: 27 offices, 1,000+ agents• Sponsoring $$ Paid: $1,500,000 last

12 months

Game-changer? Let’s talk life-changer!

EXIT Mid-Atlantic Region (DE/DC/MD/WV) 60 Algonquin Road, North East, MD 21901 410-287-9000 • [email protected]

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MD REALTOR Magazine - June/July 2014

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Transcript of MD REALTOR Magazine - June/July 2014