This week’s sweep at a glance > the “pope” (aka, Alan Pope) shared his appraisal market trends + more on paragraph “w” + “drones” – aka Unmanned Aerial Systems (UAS’s) + Symposium next week (live + podcast)!
This week we (over) filled Broadmoor Golf Club with 170 brokers strong, crisp bacon and an presentation by Alan Pope, one of the most respected real estate appraisers in the marketplace. He has been appraising through four market cycles – he has my ear every time he speaks.
First and foremost a tool – Alan’s market trend charts – click here! (Jan 2012 – Aug 2017)
A few sound bites from Alan Pope, worth digesting…
He agrees, the market isn’t in a bubble.
This is the most difficult market he has been involved with. Why? Today, historical data isn’t necessarily showing what the market is doing – aka, the closed sales data.
Much to the contrary of our understanding (at least mine), pending sales can be used in an appraisal. Alan’s strong opinion is that this narrative is important in the conclusion of value – especially in a market where historical data may not be available – aka, now.
Yes, appraiser must work to meet the “guidelines” however once met this is where pending sales indeed help tell an even story. Pending sales measure what the competition is doing today. The narrative would include # of offers, rate of escalation, etc…
Absolutely, some appraisers believe brokers are biased and our narratives shouldn’t’ be included (the data we routinely give them). Alan has a different approach to this mindset and shared with us that he is also beginning to see more flexibly within the industry in meet + greet at the home with the broker.
“Shaking hands makes it more of a relationship” and helps us all tell the story. – Alan Pope
May a Buyer deliver notice and terminate a PSA based on paragraph “w”?
Lars Neste, Demco Law Firm chimes in…
“Paragraph w contingency, following is why I do not believe paragraph w is much of an out. Unlike nearly all other contingencies, a buyer needs to prove two things in order to exercise the paragraph w contingency.
First, a buyer must prove that the seller or broker representation is in fact false. You might think that this would be an easy thing to prove but in practice there are often real questions about the truth of a matter. For instance, a buyer might try to get out because they believe the square footage stated in the listing is false. However, as you know, there are various ways to measure square footage and the figures from reliable sources often vary, sometimes significantly. This can lead to debate about whether the representation is in fact false.
Second, the buyer was prove that the false representation is material. Black’s Law Dictionary defines material as: “Of such a nature that knowledge of the item would affect a person’s decision-making; significant; essential . . .” There is always some room to argue on the question of materiality. On the margins we can all agree what is or is not material but in most cases there is a lot of room to debate whether something is in fact material. For instance, using square footage again, let’s say the listed figure was off by 500 sf on a 3,500 sf home. Can we state without question that the 500 difference materially reduces the value of the property?
Because paragraph w requires a buyer to prove a materially inaccurate representation was made, it is far from an easy out. I have seen people utilize it to get out of a contract but those occasions have been few and far between. One of the issues I had with the Realtor’s video on paragraph w recently was they made it sound as though you simply send a notice and you are out. That is not the case at all. If a seller wants to contest the out they can and unless the buyer can prove the two elements required, they would not have the right to terminate the contract.”
Clear as mud? If not, chat with your manager or ping me – happy to chat.
Last week I promised the release of a Legal Bulletin educating us on hiring photographers utilizing “drones” – aka Unmanned Aerial Systems (UAS’s) – for aerial photos of listing properties. Ok, it’s not 100% complete (for good reason, I promise!) – yet I do have a general talking point to digest and get this UAS party started…
More and more brokers are hiring photographers that utilize Unmanned Aerial Systems (UAS’s), commonly known as “drones”, to take aerial photos of listed properties. Most brokers using this new marketing tool are not considering the legal ramifications. Many drone operators hired by brokers are not in compliance with the current regulations. Last year, the FAA adopted regulations making it easier for persons without a pilot’s license to operate drones commercially. But restrictions remain. A UAS certification is required, and operational regulations apply unless waived by the FAA. Regulations of note include the following:
Drones must stay within the line of sight of the operator; may not fly over a person unaffiliated with the operator; can only be operated during daylight or twilight; must stay within 400 feet of the ground or a structure; cannot fly inside a structure; and can only fly if there is 3 miles of visibility.
Feel free to begin this conversation with your photographers as you prep listings. Are they aware of local ordinances? I have a handful of more regulations to share with you soon (restricted airspaces, FAA fines per occurrence etc…) – once the Legal Bulletin is complete and best practices are inked. I’d like to keep everyone out of hot water and have a general awareness in the immediate that regulations do exist!
Wowza, that’s plenty to digest this week! Always learning. #growthmindset. For those of you at Symposium next week – can’t wait see you there! Many of you are in my clock hour Buyer-Savvy Strategies class – please do me a favor, participate with me. This class will be successful if we have a conversation. I have 15 tools ready to deliver along with 3 clock hours = win/win.
Ps, at the end of next week I have a podcast to share that embodies a few of these Buyer-Savvy tools as I interviewed both Kristin Munger (Eastlake) and Greg Lewis (Ballard) in their Buyer-Savvy Strategies. Tune in live in class next week or via podcast! I love sharing this stuff as I continue to #doubledown on our people…
Laura Smith, General Manager | Windermere Real Estate Co.