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UNDERSTANDING THE BROKER’S RIGHTS UNDER THE EXCLUSIVE RIGHT TO SELL AGREEMENT
NEW YORK STATE
REALTOR
®
THE OFFICIAL PUBLIC ATION OF THE NEW YOR K STATE ASSOCIATION OF R E ALTORS ® MAY/JUNE 2016
NYSAR represents
REALTORS®
in Washington
and Albany
IN OWWS R
N E O
N IB
E
L
D
SI
Be in business
for yourself, not
by yourself.
With Solutions.
The technology you need
The leads you want
The support to succeed
Looking for a change? Ready to take your career
to new heights? Join our team.
Call your local Weichert® office today or 800-301-3000,
or visit jobs.weichert.com.
© 2016 Weichert Real Estate Affiliates, Inc. Weichert® is a federally registered trademark of Weichert Co. All other trademarks are the property of their respective owners.
REALTORS® is a federally registered collective membership mark which identifies a real estate professional who is a Member of the NATIONAL ASSOCICATION OF
REALTORS® and subscribes to its strict Code of Ethics. Each WEICHERT® franchised office is independently owned and operated.
Volume 13, Issue 3
NEw YOrk STaTE
rEalTOr
®
NEW YORK STATE ASSOCIATION OF REALTORS®, INC.
9 CONTENTS
4 President’s message
5 From the CEO’s desk
6 New York news briefs
9 Legal Line: Understanding the broker’s rights
under the Exclusive Right to Sell Agreement
12
is important for all licensees
12 NYSAR leadership team tackles federal issues
15 NYSAR’s government affairs team keeps
REALTOR® bills moving forward
18 Succeeding in a limited inventory market
21 Local board RPAC events
keep the ‘fun’ in fundraising
23 NYSREEF unveils new website
24 RPAC of New York thanks its 2016 major investors
28 2016 Summer/Fall
National Designation course schedule
30
18
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View current and past issues of
New York State REALTOR® at NYSAR.com.
NEW YORK STATE REALTOR ® (ISSN 1555-8343) is published bimonthly by the New York State Association of REALTORS ®, Inc., 130 Washington Ave., Albany, NY 12210, 518.463.0300. Subscription rate for members is $2,
which is included in the dues. ©2016 by the New York State Association of REALTORS ®. Permission to reprint material may be granted upon request to Editor, NEW YORK STATE REALTOR ®, at the above address.
Published for: New York State Association of ReAltoRS®, Inc., 130 Washington Ave., Albany, N.Y. 12210-2220, Telephone: 518.463.0300, Fax: 518.462.5474, E-mail: commun@nysar.com, www.nysar.com
NYSAR officers: Linda Lugo, President; Dawn Carpenter, President-elect; CJ DelVecchio, Secretary/Treasurer; Duncan R. MacKenzie, CEO NYSAR Staff: Salvatore I. Prividera Jr, Director of Communications,
Editor of New York State REALTOR®; S. Anthony Gatto, Director of Legal Services; Michael J. Kelly, Director of Government Affairs; Ali Mann, Director of Divisions; J. Austin Moran, Director of Information Technology; Kristen Pooler, Director of
Marketing; Patrick Reilly, Vice President of Board and Member Services; Libby Rentz, Vice President of Finance; Priscilla Toth, Director of Education Published by: Naylor, llC, 5950 NW First Place, Gainesville, FL 32607, Telephone: 800.369.6220,
Fax: 352.332.3331, www.naylor.com. Publisher, Heidi Boe editor, Ruth Ellen Rasche Research, Catherine Rios Project Manager, Douglas Swindler Advertising Sales, Brawley Adams, Tracy Jones, Haley Sivils
layout & Design, Gordon Klassen GKDS
While this publication makes a reasonable effort to establish the integrity of advertisers, it does not endorse advertised products or services unless specifically stated.
NYSR online - You can read New York State REALTOR® online at www.nysar.com, PUBLISHED MAY 2016/NYR-S0316/3014
New York State realtor® 3
President’s message
Our commercial colleagues know that if damage across New York State caused by
our government decides to revoke the IRS Hurricane Irene and Superstorm Sandy is
1031 Like-Kind exchange, it would have a still fresh in our minds. We also need for
negative effect on commercial real estate FEMA to provide more accurate flood maps,
sales. And on the residential side, we all and wider options for affordable insurance.
know that if our government decides that While you may not think about threats
homeowners can no longer deduct their to our business on a regular basis, please
mortgage interest and property taxes on be aware that they do exist and your state
income tax returns, it would create barriers association is hard at work to protect our
Linda Lugo to homeownership. interests and those of homeowners. But, we
2016 NYSAR President Each March your NYSAR Leadership can’t do it alone. Here’s how you can help
Team travels to Washington, DC to speak protect your livelihood and homeownership:
to our United States Senators and members 1. Reach out to your member of Congress
of the House about important issues such as and let them know that these issues are
these and the preservation of private prop- important.
erty rights. During our two-day trip this 2. Respond to Calls for Action. With only
year we met with 14 Congressional leaders a few clicks of a mouse you can tell your
from New York to discuss the importance member of Congress about the importance
of keeping the 1031 Like-Kind Exchange, of these and similar issues.
mortgage interest deduction and property 3. Get involved with the New York State
tax deduction. These are vital components Association of REALTORS® to make your
to real estate ownership. voice heard.
While meeting with our legislators we 4. Invest in RPAC. The REALTORS®
pointed out the need to extend tax relief Political Action Committee helps us to stay
for mortgage debt forgiveness beyond the in the forefront with our legislators. It is
December 2016 expiration date. This pro- an investment that will help preserve your
tects underwater homeowners from incur- future.
ring a large tax bill on phantom income in I encourage you to read the state and
connection with a workout or a short-sale. federal issue updates in this issue, starting
Unfortunately, New York still has a large on page 12. Becoming educated about the
number of properties in foreclosure across issues is the first step to being an effective
the state, making an extension vital to advocate for your industry.
distressed homeowners who are trying to In closing, I want to offer a constant
responsibly address their situation. reminder that we want you to stay safe in
Next year, we need to get the reautho- your business. Keep your eyes open and be
rization of the National Flood Insurance aware of your surroundings while out in the
Program. The extension of the NFIP field. Safety first! ●
brought stability to housing markets where
flood insurance is required for a mortgage.
Without this program, home sales in flood
zones would grind to a halt. The horrific
“If it’s your dream and your life
and your business, you need to be
responsible for protecting it.” - Sonja Foust
4 MAY/juNe 2016
From the CEO’s desk
Illegal discrimination in housing has no has proposed a change to current state and
place in a free and open society like we enjoy New York City laws requiring co-op boards
in New York and across the United States. to respond to applications under a reasonable
In April we celebrated the 48th anniversary schedule, which would reduce the potential
of the federal Fair Housing Act. Yet, nearly five for discrimination to occur.
decades since the act’s inception we are still NYSAR is also vigilant in ensuring
making strides to ensure fair access to housing that state enforcement efforts are fair and
for all who are financially qualified. grounded in law. Recently, NYSAR alerted
The evolution of protecting individuals our membership that an erroneous report
Duncan MacKenzie from discrimination for non-financial rea- from the New York State Department of
NYSAR Chief sons advanced recently when the New York State (DOS), which listed “Arrest Record,”
Executive Officer State Board of Real Estate approved a request “Conviction Record” and “Predisposing
from Gov. Andrew Cuomo to expand state Genetic Characteristics” as protected classes
fair housing protections on the basis of gen- with respect to housing discrimination. There
der identity. As professionals who help bring are no current laws, rules or regulations mak-
buyers and sellers together, REALTORS® see ing “Arrest Record,” “Conviction Record”
on a daily basis the fulfilment that comes and “Predisposing Genetic Characteristics”
with homeownership. In fact REALTORS® protected classes. NYSAR contacted the DOS
incorporated gender identity as a protected immediately to resolve the matter, which they
class in our Code of Ethics in 2014. did in a clarifying email.
Despite great improvement over the last New York State’s REALTORS® vigor-
half century, the sad truth remains that hous- ously support the ideal that no one should
ing discrimination still exists. REALTOR® be discriminated against based on race, color,
anti-discrimination efforts include advocat- national origin, disability or familial status
ing for greater transparency in the process of as well as the additional protected classes
approving cooperative housing purchases. under New York State Law including sexual
Today, co-op boards can deny the sale of orientation, military status, age or being a
a co-op that has been agreed to by the seller victim of domestic violence.
and the purchaser and may do so without As advocates for fair housing, REALTORS®
giving a reason for denial. Even more trou- believe in building strong, diverse communi-
bling is the fact that a co-op board has no ties where all are welcome. ●
obligation to act within a specific timeframe.
The board’s inaction over time can cause a
purchaser to lose their financing. NYSAR
“New York State’s REALTORS® vigorously support the
ideal that no one should be discriminated against based
on race, color, national origin, disability or familial status
as well as the additional protected classes under New
York State Law including sexual orientation, military
status, age or being a victim of domestic violence.”
New York State realtor® 5
New York news briefs Look to NYSAR Member Perks
for your dental insurance
NYSAR is pleased to announce
Graduates of the NYS REALTOR® Institute Recognized that enrollment for dental and vision
insurance is now available year-round.
Through NYSAR Member Perks part-
ner USI Affinity, you can access com-
petitive, flexible coverage from MetLife.
As one of the largest dental insurance
providers in the country, MetLife is well
positioned to offer NYSAR members
a range of dental options, affordable
rates and a large network of participat-
ing dentists. Key benefits of the NYSAR
Dental Plan include:
Newly minted GRI designees Lisa Lilley of Horseheads (Signature Properties) left, Alexandra • Three plan choices to suit your
Tsiatis of Little Neck (Douglas Elliman), Susan Kelley of Glens Falls (Coldwell Banker Prime needs and budget.
Properties), Melania Darling of Philmont (Berkshire Hathaway Home Services, Blake), Jill Sackler
• Competitively priced coverage with
of Merrick (Charles Rutenberg Realty) and Laura Copersino of Whitestone (Douglas Elliman)
group rates.
celebrate achieving the designation.
• Comprehensive, nationwide net-
New York State REALTORS® who recently earned their Graduate, REALTOR® work of dentists.
Institute (GRI) designations were recognized at the Desmond Hotel and Conference • Freedom to choose your dentist.
Center, in Albany, NY. Jim Pugliese, chair of NYSAR’s Faculty Development • Coverage for orthodontia.
Sub-Committee, emceed the graduation ceremony. To earn the GRI designa- Plus, you can also purchase vision
tion, REALTORS® must successfully complete a rigorous 90-hour program, which coverage as a rider to your dental policy
includes national core curricula as well as the study of state-specific and local-interest or as a standalone policy.
continuing education syllabuses. For full plan details and rates, visit
MyREALTORinsurance.com/NYSAR
or call 888.834.3713 to speak with a
NYSAR prepares local board/ Apply for a NYSREEF benefits’ counselor.
association leaders to work scholarship by July 31
with the media Any individual, who has at least one year Participate in NYSAR’s Housing
During April, NYSAR pro- of experience in real estate sales, is licensed Opportunities Month this June
vided spokesperson training to and practicing in New York State, and holds The NYSAR Housing Opportunities
more than 40 current and future primary REALTOR® membership in New Foundation will be conducting its sev-
local board/association leaders York State is eligible for one of the National enth annual housing opportunities
who by virtue of their office will Association of REALTORS® designation month fundraiser this June to raise
serve as spokespersons. program scholarships offered by the New awareness about affordable hous-
This training, provided as York State Real Estate Education Foundation ing needs in New York State and the
a free service to local boards/ (NYSREEF). Scholarship awards are not foundation’s mission of assisting
associations, covered the basics based on need. Applicants should show posi- first-time homebuyers in achieving
of radio, television and print tive motivation toward real estate education the American dream of homeown-
interviews, REALTOR® pub- and proven interest in furthering their real ership. Keep an eye out for commu-
lic relations case studies, and estate career. nications from NYSAR on how you
an overview of online reputa- Scholarships are awarded twice a year; can participate.
tion management. This year’s in February and in October. Applications The foundation is a 501(c) (3) chari-
program provided attendees for October awards are due by July 31. table organization with the goal of assist-
the opportunity to participate Individuals are eligible to receive only ing moderate-to-low income individuals
in mock television interviews, one scholarship per year. Each applica- and families in becoming homeowners
which were recorded and cri- tion must be supported by two letters of utilizing a variety of means including
tiqued to assist each member in recommendation and must include a letter public-private partnerships, education,
improving their skills. from the applicant describing their need, counseling and financial assistance to
NYSAR thanks the following how the scholarship will benefit them and both individuals and organizations whose
boards/associations for hosting their future goals relating to the use of the activities facilitate homeownership. Visit
Spokesperson Training sessions scholarship. N YSAR HousingFoundation.com
this year: Greater Binghamton, For more information, visit for information on our programs
Greater Capital, Hudson Gateway, www.nysreef.org. and services.
and Jefferson-Lewis.
6 MAY/juNe 2016
Sign up for NYSAR NYSCAR to sponsor 15th annual REALTORS®
committee service in 2017 Commercial Real Estate Conference
If real estate is your livelihood and you’re The 15th Annual New York State Commercial Real Estate Conference will be
passionate about your business, NYSAR held Monday, June 13, through Wednesday, June 15, 2016, at the University Sheraton
encourages you to get involved and help in Syracuse, NY.
guide the future of your state association. The event will kick-off with a full day pre-conference CCIM session on Monday,
Give your time, talent and expertise by June 13, with “High Tech Marketing,” followed by an open house reception where you
assisting the association as it strives to meet can meet the NYSCAR officers and staff and ask questions about your membership.
the needs of its more than 50,000 members. The following days include: updates from commercial institutes – NYS CCIM and
Don’t sit back and leave it up to someone SEC; a legislative update from NYSAR Director of Government Affairs Mike Kelly;
else. This is your association; make your a keynote reception with commercial real estate tech blogger Duke Long; a full-day
voice heard! marketing session; and several continuing education credit courses.
Committee service gives you the oppor- This event is sponsored by the members of the REALTORS® Commercial Alliance,
tunity to network with your peers from which includes: the New York State Commercial Association of REALTORS®
across the state as you work together to (NYSCAR); the New York State Certified Commercial Investment Member (CCIM)
accomplish the association’s goals. It will Chapter; and the Society of Exchange Counselors.
also give you a much deeper understanding For more information or a registration form for this premier event, please visit
of our industry’s issues, the value of being a www.nyscar.org.
REALTOR® and can prepare you for a role
in leadership.
You may select up to six of the more REALTOR® of the Year and Community Service Award nominations
than 25 NYSAR committees available due by June 15
in 2017 – three termed/closed commit- NYSAR is seeking nominations for the 2016 REALTOR® of the Year Award.
tees and three open committees/forums/ The award, which recognizes the outstanding personal leadership skills, and the
working groups. With everything ranging industry and civic commitment of one NYSAR member, will be presented during
from Communications and Marketing the NYSAR Fall Business Meetings.
to Legislative Policy and Professional In addition, NYSAR will recognize up to three REALTORS® for their activities
Standards, you will be able to select a com- supporting their community with the Community Service Award. The deadline
mittee that suits your interests. for nominations is June 15. Visit NYSAR.com for details.
All members are invited to be active
committee members; there are no restric-
tions based on age, industry experience or Apply now for the 2017 NYSAR Leadership Academy
any other qualifier you might believe applies. Polish your leadership skills, raise your profile and gain valuable experience by
Volunteers are asked to be sure they will being a part of the 2017 NYSAR Leadership Academy! This advanced leadership
be able to attend the association’s 2017 busi- program provides member participants
ness meetings, which are Feb. 4-9 in Albany with a unique opportunity to develop
and Sept. 22-27 in Verona before commit- their leadership skills and prepare to
ting to serve. Please note that committee provide meaningful contributions to the
sign up will be available online only between three-tiered REALTOR® organization,
July 1 and July 31. their business and community, while
For information and to sign up, visit also enriching their personal and pro-
www.nysar.com. fessional lives. Any full-time NYSAR
REALTOR® member in good standing,
who has been in the business for at least
Warren County three years as of Jan. 1, 2016, should
Association of REALTORS® consider applying. Visit NYSAR.com for
changes name to Southern full details and to download an applica-
Adirondack REALTORS® tion. Applications must be submitted by
The Warren County Association of 5 p.m. Monday, Aug. 1, 2016.
REALTORS® has changed its name to
Southern Adirondack REALTORS®. The
change better reflects their growing mem- Two NYSAR members voted into NAR’s ‘30 Under 30’ Class of 2016
bership geography and MLS service areas, Congratulations to Judith Gabler, RealtyUSA in Delmar, and Mandy Friend
which includes all of Warren County and Gigliotti, Keller Williams Realty in Rochester, for being voted into the National
portions of Washington, Saratoga and Association of REALTORS®’ 30 Under 30 Class of 2016. According to the award
Essex counties. For more information, criteria, they exemplify the ingenuity, dedication and prowess that are raising the
visit www.southernadirondackrealtors.org. bar in real estate today. ●
New York State realtor® 7
Inside the numbers
63 The percentage of baby boomers that would like to buy
1 The number, out of four homebuyers, that say they want
a single-family detached home, according to a recent study to buy a home because their rent is too high, according to a
of the housing preferences of the boomer generation by the recent survey by the brokerage Redfin. This number is rising,
National Association of Home Builders. up from one in eight last August.
88 The percentage of growth in homeownership rates
75 The percentage of renters that want to buy a single-family
that will be attributed to minorities from 2020 to 2030, home, according to the Housing Opportunities and Market
according to the Urban Institute. Hispanics are expected Experience (HOME) survey from the National Association
to drive most of that growth. of REALTORS®.
46 The percentage of homeowners with a mortgage that
$30 trillion
The amount of money expected to be passed from baby
believe they will see their equity increase in 2016, according boomers to millennials over the next decades, fueling a housing
to a study by the lender loanDepot. The majority expect boom, according to a report from National Mortgage News. ●
to see a gain by as much as 10 percent.
Upcoming NYSAR
radio show schedule
NYSAR Radio is a free, Internet-based live call-in show hosted by
NYSAR’s Director of Legal Services Anthony Gatto, Esq. You can call him
at 518-436-9727 with your real estate-related legal questions and have them
answered live on the air. Even if you don’t have a question, you’ll benefit
from listening to the answers to your colleagues’ questions. Visit NYSAR.
com for the link to the Internet broadcast.
June 21
Mythbusters
July 19
Disclosures Other Than Agency
August 16
Environmental Issues
September 20
Commission Issues
All shows start at 10 a.m. All dates and topics subject to change.
Missed a show? You can download the podcast from NYSAR.com. ●
8 MAY/juNe 2016
Legal Line
Understanding the broker’s rights under
the Exclusive Right to Sell Agreement
is important for all licensees
By S. Anthony Gatto, Esq.
NYSAR General Counsel
and Liz Celeone, Esq.
NYSAR Associate Counsel
T
he Exclusive Right to Sell Understanding the ERTS and the rights,
Agreement (ERTS) is a liabilities and obligations associated
document used by brokers with it is important for all licensees.
throughout New York State. According to the Real Property Law
Brokers and their associated licensees §443(1)(e): “Listing agreement means
utilize the ERTS in securing the exclu- a contract between an owner or own-
sive listing and marketing of a prop- ers of residential real property and
erty for an agreed upon period of time an agent, by which the agent has been
with the owner(s) of said property. continued on page 10
New York State realtor® 9
continued from page 9
authorized to sell or lease the residential
“Agency is consensual in nature and real property or to find or obtain a buyer
or lessee therefor.” Also according to RPL
may be unilaterally terminated by §443(1)(d): “Listing agent means a person
who has entered into a listing agreement
the consumer. At any time during the to act as an agent of the seller or landlord
for compensation.”
term of the listing, the owner(s) can There are also regulations that are
applicable to brokers taking a list-
terminate the agency relationship.” ing. One such regulation appears in
19 NYCRR §175.24 titled “Exclusive
listings—residential property.” Under
175.24(b), all ERTS must be in writing
and contain a required disclosure, “In
all commission agreements obtained by
a broker which provide for an exclusive
listing of residential property, the bro-
ker shall have attached to the listing or
Access NYSAR.com 24/7 printed on the listing and signed or ini-
tialed by the homeowner or the home-
owner’s agent the following explanation
in type size of not less than six point:
NYSAR.com is your ultimate industry resource EXPLANATION:
offering 24/7 access (from any device) to: An “exclusive right to sell” listing
means that if you, the owner of the
property, find a buyer for your house,
or if another broker finds a buyer, you
must pay the agreed commission to the
The latest present broker. An “exclusive agency”
real estate and Market data listing means that if you, the owner of
industry news and insights the property, find a buyer, you will not
have to pay a commission to the broker.
However, if another broker finds a buyer,
you will owe a commission to both the
selling broker and your present broker.
175.24(c) also requires that “if an
exclusive listing of residential property
Videos,
podcasts, Legal resources is obtained by a broker who is a member
webinars and and legislative of a multiple listing service, the listing
infographics updates agreement shall provide that the home-
owner shall have the option of having all
negotiated offers to purchase the listed
residential property submitted either
Professional through the listing broker or submitted
Member Perk
development through the selling broker.”
discounts and
opportunities There are also regulations prohibit-
special offers
ing certain activities related to a listing
agreement. The use of an automatic
renewal is prohibited by 19 NYCRR
Login to NYSAR.com today! §175.15: “No real estate broker shall be
a party to an exclusive listing contract
which shall contain an automatic con-
Connect with us:: tinuation of the period of such listing
beyond the fixed termination date set
forth therein.” Net listing agreements
10 MAY/juNe 2016
805933_Editorial.indd 1 4/7/16 2:25 AMare prohibited by 19 NYCRR §175.19(b) terminate the agency relationship. The the type condemned, or was it received
which states, “No real estate broker shall owner(s) may terminate the seller agency in payment of some legitimate service?”
make or enter into a ‘net listing’ contract at any time and without reason. This, In this case, the owners wanted to
for the sale of real property or any inter- however, does not negate the owner(s) cancel the listing agreement, but Dickson
est therein.” (A net listing is where the obligation for commissions, fees, etc. made it clear that he would not release
listing agreement calls for the property called for in the listing agreement in the the owners unless they paid him $3,000.
to be sold at a certain price and any event the owner(s) choose to cancel the The DOS found that the owner’s actions
monies received in excess of that price broker’s marketing of the property. Unlike were not done in bad faith or as a device
would go to the broker as a commission.) agency relationships, listing agreements to escape paying a broker’s commission.
Understanding the underlying legal can only be terminated bilaterally. The There were allegations against the bro-
basis for a listing agreement is also impor- only manner in which the seller can be kerage for not providing brokerage ser-
tant. When a broker enters into an ERTS, relieved of their contractual obligations vices under the name appearing on the
there are actually two separate agreements under the listing agreement is through an listing agreement. The DOS found that
between the broker and the owner(s). First, unconditional release. The unconditional Dickson breached his fiduciary duties of
there is the listing agreement. The listing release must be signed by both the broker good faith, obedience, reasonable care
agreement is a contract between the par- and the owner(s). and skill to the owners and demonstrated
ties setting forth the rights and obligations Unlike an unconditional release, untrustworthiness. In the decision, the
of both parties. Simultaneous with the a conditional release may require the DOS stated that Dickson attempted to
listing agreement, there is also an agency owner(s) to pay some fee or extend the extort money from the owners by refus-
relationship between the broker and time under which a commission will be ing to release them from their listing
owner(s). This means that for an active paid if the property is sold. This can also agreement unless they paid him $3,000,
ERTS, the broker has two agreements be done in the listing agreement. Some which amounted to an unearned com-
with the owner(s) and each agreement is listing agreements contain paragraphs mission. Since Dickson demanded an
governed by different laws. requiring the owner(s) to pay a market- unearned commission from the own-
RPL §443(3)(a) requires that: “A listing ing fee in the event they terminate the ers, under color of a “termination fee,”
agent shall provide the disclosure form set broker’s agency relationship or authority Dickson was required to release the
forth in subdivision four of this section to to market the property. In such cases, the owners from paying a commission or
a seller or landlord prior to entering into a owner(s) would have to pay a fee for all termination fee arising from the subject
listing agreement with the seller or land- marketing the broker has done for the transaction. As was cited in the deci-
lord and shall obtain a signed acknowledg- listing. The broker should be sure to only sion, “One can hardly fathom a more
ment from the seller or landlord, except as charge for services rendered. Brokers effective means of removing the incen-
provided in paragraph e of this subdivi- should not include a flat fee in the list- tive for engaging in devious conduct...
sion.” When a broker places a property on ing agreement as a penalty. In the case than a penalty which insures that the
the MLS, the authority to market the prop- of New York State Department of State malefactor is denied the fruits of his mis-
erty is created by the agency relationship (DOS) v Russell Dickson (1416 DOS 07) deed.” Kostika v. Cuomo, 41 NY2d 673,
and the scope of marketing the property this matter was addressed to the detri- 394 NYS2d 863, 865 (1977). Dickson was
by the listing agreement. According to ment of the broker. fined $3,000 for his actions.
19 NYCRR §175.10: “A real estate bro- Dickson was a broker and had an A broker is under no obligation to
ker shall never offer a property for sale owner sign a listing agreement with release an owner from an ERTS merely
or lease without the authorization of the Dickson Realty and a “termination of because the owner(s) requests it. The
owner.” The authorization is given by the listing agreement” where the owner(s) broker and owner(s) have unilaterally
owner(s) to the listing broker by way of agreed to pay Dickson a $3,000 flat fee if entered into a contractual agreement
agency. Without the owner(s) agreeing they terminated the services of the bro- obligating both parties to fulfill the
to the broker acting as the seller’s agent, ker and/or withdrew the property from requirements set forth in the agreement.
the broker would otherwise be prohibited the market during the term of the listing As the broker’s fiduciary duties to the
from advertising the property. agreement. The decision pointed out that owner(s) do not apply to the broker’s
Agency is consensual in nature and it is well known in New York law that, rights under the listing agreement, an
may be unilaterally terminated by the with respect to brokerage agreements, owner is unable to direct the broker to
consumer. At any time during the term “...the right of the principal to terminate release them from the listing agreement
of the listing, the owner(s) can terminate [the broker’s] authority is absolute and because of the agency relationship.
the agency relationship. The seller can do unrestricted, except only that he may not Licensees who understand how the
this verbally or in writing (writing would do it in bad faith, and as a mere device ERTS functions are better able to clearly
be preferred so the broker has proof) and to escape the payment of the broker’s explain the ERTS to potential clients
the broker must immediately cease in all commissions.” Furthermore, “Brokers’ while protecting the broker’s rights.
marketing of the property and withdraw fees must represent charges for actual Furthermore, an advanced understand-
the listing from the MLS. No exceptions! services...the issue is, was the payment ing of the ERTS will help to minimize the
Brokers are prohibited from refusing to in fact exacted as a special premium of risk of potential liability to the broker. ●
New York State realtor® 11NYSAR leadership team
tackles federal issues
By Michael Kelly
NYSAR Director of Government Affairs
E
ach year NYSAR’s leader- that we have faced in the past have been quickly as Congress began its work in
ship team makes its way to extended until 2017 or beyond and are January and gridlock set in. But this
our nation’s capital to lobby not immediately pressing for Congress might not necessarily be a bad thing
New York’s Congressional to take action on. from the REALTORS® perspective and
delegation on key real estate matters. In March, NYSAR President I’ll explain why.
Some years we march on Capitol Hill Linda Lugo, Secretary-Treasurer C.J. Pressure to do an overhaul of our tax
with one or two action items that we DelVecchio and Legislative Steering code has been building for years with
push to get done such as flood insur- Committee Chair Moses Seuram were support from both parties and in both
ance reform. Other years we’re trying to in our nation’s capital to meet with our houses of Congress. But while political
prevent certain things from coming to Congressional delegation. Over a two- pundits and many in the public decry
fruition such as banks entering the real day period the NYSAR leadership team Congressional inaction, I am often more
estate marketplace. This year was a little met with the offices of 14 members of scared of what Congress could do to the
bit different as our main priority was to the U.S. House of Representatives to tax code and the negative impact it could
lay the groundwork for future battles discuss our key legislative priorities at have on real estate. When Congress has
and educate Congress on the impor- the federal level. considered overall tax reform in the past,
tance of our key legislative priorities. In late 2015, Congress passed and some lawmakers have expressed support
Political dynamics always play a role the president signed into law a bill for a “clean slate” approach where all
in the proceedings of government and that extended or made permanent a government programs are on the table
this year was no different. Currently large number of temporary tax provi- for consideration to be reduced or elimi-
Congress is closely watching the presi- sions, several of which had real estate nated. This includes several hallmark
dential race and is reluctant to take up implications. Some political pundits real estate tax provisions including the
major legislation as it awaits the outcome thought this feeling of bi-partisanship mortgage interest deduction and the
of November’s elections. Additionally, would roll into 2016 and lead to seri- deductibility of local property taxes.
the entire House of Representatives is ous discussion of comprehensive indi- There is broad support for the mort-
up for re-election this year with many vidual and corporate tax reform. Well, gage interest deduction in Congress, yet,
House members involved in primary in typical Washington, D.C. fashion, some federal lawmakers have sought to
races as well. Lastly, several of the issues that type of positive thinking faded trim the deduction by eliminating the
NYSAR Secretary/Treasurer CJ Del Vecchio, left, President Linda Lugo and Representative Tom Reed (NY-23), second from right, visits
NYSAR Legislative Steering Committee Chair Moses Seuram discuss key issues with NYSAR Legislative Steering Committee Chair Moses
with Congresswoman Elise Stefanik, who represents New York’s 21st District, Seuram, left, President Linda Lugo and Secretary/Treasurer
during leadership team’s visit to Washington, D.C. CJ Del Vecchio.
12 MAY/juNe 2016deduction of second homes or narrow reinvests sale proceeds into another
the scope of eligible Americans. investment vehicle. REALTORS® across
Early tax reform discussions have the country work with clients look-
also led some to begin discussing the ing to sell one real estate investment
elimination of deductions of property for another investment of “like-kind”
taxes. For high-tax states like New value or greater, and they are often
York, New Jersey, Connecticut, New modest in their price and scope. This
Hampshire and Illinois this would be tax provision is a critical component in
devastating. But some lawmakers in the commercial real estate marketplace
Washington make the argument that the that encourages economic re-invest-
nation should not be paying to reduce ment in our communities and must be
the pain felt by residents in high-cost protected.
states. Rather these states should reduce Any reduction to these tax provi-
their spending and taxing. While I sions would have a dramatic negative
understand this logic, there are many impact on New York’s housing market.
tax provisions that benefit one state, Homeownership rates in New York have
region, or segment of our economy over traditionally lagged national figures
others. For example, I can assure you the and if either of these deductions were
lawmaker from Nebraska has an affinity compromised, that trend would only
for farming-related tax provisions, much get worse. We need to continue to ask
like how their counterpart from New our lawmakers to implement measures
York feels about real estate deductions. that encourage homeownership and all
I know you will find this shocking: of the ancillary benefits it brings, not
Sometimes in politics, facts are inter- increase the cost to own a home.
changed with mistruths and mischar- Since the national housing market
acterizations. While many in Congress decline in 2007-08, many states have
don’t truly understand what a 1031 been working through a backlog of short
exchange is, nor the benefits it brings, sale properties. This process has taken
some are proponents of its elimination. longer in New York than most states as
Opponents of this tax provision have foreclosures are required to go through a
characterized it as corporate welfare, as judicial proceeding. As such, New York
a tax benefit or a loophole only available still has thousands of properties that
to the extremely wealthy. This couldn’t are still in foreclosure or are working
be further from the truth. IRS provi- through the short sale process, which
sion 1031 doesn’t allow anyone to avoid is cumbersome and time consuming.
paying taxes, rather, it simply delays First enacted in 2007, the Mortgage Debt
the payment of those taxes as long as Forgiveness Act ensures that distressed
the seller of the investment property homeowners who receive a modification
continued on page 30
NYSAR Legislative Steering Committee Chair Moses Seuram,
left, President Linda Lugo and Secretary/Treasurer CJ Del
Vecchio deliver information about key REALTOR® issues to
Congressman Chris Gibson (NY-19).
New York State realtor® 13You have a voice.
NYSAR boldly champions your interests at
the state Capitol – so that you can focus
on your clients and career.
Get involved to advance REALTOR® interests by:
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Visit NYSAR.com for full details about NYSAR’s
legislative advocacy efforts and more.
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Affairs team keeps
REALTOR® bills
moving forward
By Jared Burns
NYSAR Government Affairs Associate
J
ust like our REALTOR® mem- measures on behalf of REALTORS®. And Under NYSAR’s proposal, the pro-
bers constantly stay on top of as we head further into the legislative ses- gram would help potential first-time
the housing market conditions, sion, progress is being made on key issues. buyers in New York save money in an
NYSAR’s Government Affairs One of NYSAR’s top issues this year account while allowing those individu-
staff members have their eyes and ears is advocating for a statewide First-Time als and couples to take a state income
on many legislative and regulatory pro- Homebuyer Savings Account program tax deduction each year on the amount
posals simultaneously to ensure that (A.4427), which has been sponsored saved. Individuals could save up to $5,000
the best interests of the industry and and introduced in the state Assembly by every year, while a couple could put up
homeowners are served. Assemblymember Phil Ramos (Suffolk). to $10,000 into the account. This would
NYSAR prioritizes our legislative The bill continues to gain momentum assist a large segment of New Yorkers,
agenda and responds to issues affecting and support from REALTORS®, legislators who want to purchase their first home,
our industry. NYSAR provides every state and the public. As we seek a sponsor in but cannot afford that initial hurdle of
legislator with a list of our priorities at the the state Senate, interest in the Assembly a down payment and closing costs. The
beginning of each year, giving clear rea- continues to grow with new bill sponsors First-Time Home Buyer Savings Account
sons for why we support or oppose certain being added. program would help those future home
continued on page 16
New York State realtor® 15continued from page 15
owners save more money to buy their
first home more quickly.
A day in the life
NYSAR is also progressing in its
fight for greater transparency in the
of NYSAR’s Government
purchase process of cooperative hous-
ing units. Our state co-op bill, which Affairs Department
would require a reasonable time period
for the approval or denial of a co-op By Michael Kelly
application with a reason stated for NYSAR Director of Government Affairs
O
that denial, has been introduced in
the state Senate by Senators Kemp ne of the best things about constituent issue or solve a problem when
Hannon (Nassau) and James Sanders my job is getting the oppor- they introduce a bill. But very often,
(Queens). We are also teaming up tunity to speak with mem- they are unaware of the consequences
with New York City Council mem- bers at local board events, or impact this legislation may have in real
ber Jumaane Williams, chair of the whether it’s at an RPAC event or a meet- world scenarios. Specifically, legislators
Committee on Housing and Buildings, ing of their board of directors. At these are frequently surprised to hear how we
to introduce co-op transparency legis- events sometimes I’m asked: “What’s it believe the bill will impact the housing
lation in the New York City Council, like to be a lobbyist?” or “What are the market, our members and the clients they
while continuing our fight at the day-to-day activities of the Government represent.
state level. Affairs Department like?” I’ll respond Over the years we’ve also built strong
After a series of meetings in the state here by clarifying it’s not as glamourous relationships with legislative staff in
Assembly, NYSAR’s bill requiring two as the media and some television shows both houses. Because of this, we often
hours of agency-related coursework like Netflix’s “House of Cards” portrays. receive requests for opinions on legisla-
in a licensee’s initial two-year term Don’t get me wrong, I love my job and tion that is moving through the commit-
(A.9474) gained a key sponsor and has it’s always exciting, especially with New tee process and/or may be headed for a
been introduced by Assemblymember York politics. But our day-to-day activi- vote. This is a great opportunity to once
Helene Weinstein, chair of the Judiciary ties aren’t full of glitz and glamour, and again explain our position in support or
Committee. We are currently in the pro- our lobbying efforts don’t take place in opposition, or simply relay that we don’t
cess of seeking a sponsor for the bill in a smoke-filled, shady backroom. have a position on that proposal.
the state Senate. Tracking the activities of the Much of what we do, with the assis-
Additionally, NYSAR serves as the Legislature, state agencies and the exec- tance of NYSAR’s Legal Department,
conduit between the National Association utive branch is a fulltime job that is part is related to adhering to state and fed-
of REALTORS® and local boards and of each and every day in our depart- eral lobbying, campaign finance and
associations, keeping you informed ment. Every morning our staff reviews election laws. Did you know NYSAR
about legislation being discussed in legislation introduced in the Assembly currently oversees the activities of
Washington, D.C., such as flood insur- and Senate to determine whether or not three separate political committees
ance, federal tax deductions, property it has a direct or tangential impact on that are registered with the New York
rights around federal and private bodies our members or the real estate market. State Board of Elections? By far the
of water, and easing of condominium In total, we review more than 10,000 most widely known is the REALTORS®
financing regulations. pieces of legislation each year. We don’t Political Action Committee, which is
REALTORS® have a strong voice have a vested interest in most of these funded by REALTOR® member, local
in our state and federal government. bills, but we closely watch approximately board and corporate investments and
Through the support and investment 1,500 of them and from that group about used to support lawmakers that are sup-
of our members, NYSAR continues to 20 to 30 make our annual legislative portive of our industry at the federal,
have a significant impact on policies that priority list. state and local levels of government.
impact the housing industry by provid- A typical day when the Legislature is The REALTORS® Advocacy Committee
ing expertise and feedback on poten- in town will include attending a com- is our political committee that we use
tially harmful or helpful legislation and mittee meeting in either house. We to conduct “issue-based” campaigns
regulations. NYSAR will continue to will also often have direct, one-on-one in support or opposition to a legisla-
keep you informed on its progress and meetings with lawmakers and/or staff tive proposal or ballot initiative. This
any new initiatives in its goal to pro- regarding a bill they are sponsoring or committee is financially supported by
tect property rights and advocate for opposing. This is our opportunity to NYSAR’s and NAR’s Issues Mobilization
home buyers and sellers in New York educate lawmakers about an issue or raise Funds. Its efforts have included cam-
State. The latest updates can be found an unforeseen problem with a bill they paigns in support of New York’s Tax Cap
in the Government Affairs section of may be carrying. Lawmakers are try- law, the Adirondack Works campaign in
NYSAR.com. ● ing to “do the right” thing to address a continued on page 29
16 MAY/juNe 2016Succeeding in a li
inventory market
By Ciara Hassenpflug
NYSAR Communications Coordinator
M
any areas of the country listing, I find my true passion for helping
are currently experienc- them comes through when I actually get
ing a declining inventory face-to-face with the prospect.”
of homes available for Getting that face-to-face time is
sale, and New York State is no different. something Tony D’Anzica, broker-
In a market such as this, it’s important owner at DynaMax Realty NYC, Inc.,
for REALTORS® to understand the chal- agrees with. While posting flyers and
lenges that their hopeful buyers are fac- sending mass mailings, both by snail
ing, and also how to handle their seller mail and email blasts, are still popular
clients who might be overwhelmed with methods of attracting attention from
offers. However, in order for your clients potential clients, they might not be
to be a part of the home buying and sell- the most effective in today’s market.
ing process, you need to first find and “Probably the best way is to work on
cultivate those clients. developing personal relationships and
Kyle Kelly, licensed salesperson at also to speak about your business/indus-
Coldwell Banker M&D Good Life in try at real estate-related events. I would
Moriches, utilizes his social media say this is what helps me the most.”
accounts to help show potential buyers Dana David, licensed salesperson at
and sellers the amount of activity going RealtyUSA in Williamsville, admits that
on. “It’s a powerful message when you acquiring new listings in this market is
show how quickly homes are selling due not easy. She said a large percentage of
to high demand and low inventory.” He her business still comes from personal
said in recent months, two out of every referrals. “I’ve found that if I focus my
three posts he creates yields either a time and energy on my current clients,
buyer or seller, if not multiple leads. “It’s their referrals will follow.”
not usually a post about a specific home Preparing the would-be buyer in
that gets the best response,” he said. “It advance of stepping into a limited inven-
is posts about the market and activity tory market is crucial. “Explaining our
in general that starts a conversation.” market is not easy,” said David. “It is
Kelly also targets short sale candi- very dynamic, and sometimes hard to
dates and expired listings with his mail- understand that everything you see on
ings, specifically focusing on the ones television is not as it seems!” She said
he knows he can help, going back as far it’s incredibly important for buyers to
as two years. “The market has changed be sure they are making offers based
so much in the past two years that the on the comparable sales, not necessarily
listing conversation has become much the list price. “Many times, the two are
more positive.” He chooses not to spend very different.”
money on “farming” or “every door” For Kelly, the conversation always
mailing systems, instead doing the work begins with helping them find the right
himself, sifting through listings one by mortgage professional and to get them a
one searching for opportunities. “When pre-approval in-hand. “I explain that the
I take the time to really investigate the reason we need that pre-approval now
18 MAY/juNe 2016imited
is because there is a lot of competition
for the homes that are on the market.
Although it may look like there are a
lot of homes available, inventory is very
much lacking.” He also makes sure to
Success in acquiring new listings and have a serious talk with his buyers about
why homes may actually be listed just
finding appropriate buyers is substantially below market value to help promote a
multiple offer situation and drive the
increased by referrals from previous price well above asking.
D’Anzica prepares a comprehensive
satisfied clients, no matter how market analysis report for his buyer
clients, showing them clearly what the
limited the market may be. market is like right now. “I also ask them
to be patient and to focus not so much
on buying a property now, but on wait-
ing for the right moment when the right
property becomes available.” He said
by not rushing his clients, he is able to
build trust because they know he isn’t
just interested in making a sale to col-
lect a commission. “They can see I’m
also willing to be patient and to work
long and hard to make the right deal
happen for them.”
This patience is something that
certain segments of the buyer popu-
lation can struggle with, many being
too patient for their own good. Kelly
said the majority of his clients are mil-
lennial, first-time homebuyers whose
biggest disadvantage in this market is
waiting too long to pull the trigger. He
said a buyer who is downsizing or has
owned a home already has been through
the process and knows the urgency this
market requires. Giving them as much
information and education as possible
will help ease their nerves and show
them that you aren’t being a “pushy
salesman” when expressing the need to
act quickly when they do find a home
they like.
Whether they are experienced or
not, inevitably in a low-inventory mar-
ket buyer clients will become frustrated
with the process or struggle with the
fact they aren’t finding a home that
fits every item on their wish list. Kelly
takes this opportunity to remind them
that although a home is much more
than an investment, it still is just that,
an investment. By showing them what
home values have done in the past,
he is able to help them anticipate the
direction of the values over the next
continued on page 20
New York State realtor® 19continued from page 19
few years. Once they realize the return One avenue that some buyers turn to higher than what the market dictates,
on their investment and the financial in a low inventory market, when they with hopes of being able to have room
benefits of owning over renting, he said just aren’t finding anything existing to negotiate down. “In this market, it
they are usually able to understand that that suits their needs, is new construc- is more beneficial to price the home
the home doesn’t need to be perfect. “The tion. David said that depending on the either at, or just below market value,
dream home can come later, as long as desires of the purchaser and where they to attract the most amount of buyers.”
they start to build equity now.” want to be, she’s found building new to Homes that are in good shape and prop-
Testing the waters and feeling out the be a great alternative for certain price erly priced are selling in days, if not
market can also help a buyer who is feel- ranges. “It allows my clients the ability hours, said Kelly, and most of the time
ing discouraged with the process. “I like to know where they are going prior to for a higher price because of multiple
to make sure my clients are in the game,” selling.” She explained that if they were offer situations.
said D’Anzica. Maybe they have found a to buy an existing home in this market, “If your home is getting traffic but
property that won’t work because of an many times they would be forced to not selling, it’s time to revisit your
out-of-reach price point, but has features sell their home first, then go find their pricing strategy, and quickly before it
the client needs or wants. He encourages new property. “The transition from one becomes stale bread,” said Kelly.
them to make an offer and see what hap- home to another is complicated in this His advice for his seller clients? “If
pens. “There may be circumstances where market,” she said. “This is why hav- you are in a multiple offer situation,
a seller could surprise you.” For instance, ing an experienced REALTOR® is so don’t get greedy!” Kelly suggests look-
he said, there might be a need for a quick important.” ing at each offer through a microscope,
sale due to divorce or death, or maybe it Buyers in a low inventory market will as sometimes the highest price offer
is real estate owned or a short sale where face their fair share of hardships, but it’s isn’t always the best one. For instance,
the bank wants to unload. not an entirely easy road for sellers either. financing can be a big deal-breaker. Is
D’Anzica said there’s no harm in mak- While they will surely receive a great deal there something that could cause a snag
ing an offer and in the meantime his cli- of attention for their listings, they will if the buyer uses FHA financing, but
ents gain experience, gain confidence, need to deal with the sometimes tricky wouldn’t be an issue with a conventional
and become more comfortable with the world of multiple offers and bidding wars. or all-cash offer? Is the buyer asking for
process by learning what the market limi- When it comes to pricing, Kelly finds help with closing costs? Are there any
tations are. that it is best not to price the home contingencies? All of these things need
serious consideration, he said.
D’Anzica’s first piece of advice is to
ask sellers to understand what their
motivations are. Is the motivation to
make as much money as possible? Do
they need a quick sale due to personal
reasons or are there any time con-
straints? “Once a seller understands
what matters most to them, their deci-
sions are easier to make.” In the case of
a bidding war, D’Anzica advises sellers
to know when to stop. “Set deadlines,
ask for the highest and best offers, and
take back-up offers,” he said.
David said it can be hard for sell-
ers to accept offers because they are
always wondering, “what if?” Could
they get more money if they waited?
Her advice mirrors D’Anzica’s: Accept
serious, qualified offers over waiting
for a potential offer that may or may
not be better.
At the end of the day, David said the
best thing you can do is to stay on top of
all of your client’s needs, and that she’s a
firm believer that if it is meant to be, it
will be. “I always strive to find the best
house for my clients, and I won’t stop
until they are satisfied.” ●
20 MAY/juNe 2016
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