Inside the WRA
Inside the WRA with Bill Malkasian, President
 In April the WRA conducted focus groups in preparation for the WRA strategic planning process for the upcoming fiscal year. More than 50 real estate professionals from six different market areas (Rice Lake, Stevens Point, Eau Claire, Appleton, Madison and Milwaukee) participated in the discussion about challenges and trends in real estate today. We thought you would be interested in knowing what your peers in various parts of Wisconsin had to say.
Life is Pretty Good!
Focus group participants were asked about the most common issues facing Wisconsin real estate professionals. The results, interestingly enough, did not identify a single issue as a top priority. Generally speaking, business is good. Housing sales in Wisconsin continue to be healthy with every region reporting sales at or near record levels in 2001. However, there were mixed reviews concerning profitability, with a significant portion of brokerage firms reporting that profits in 2001 were either no higher than 2000 or lower.
While no issue was identified as premier or as needing immediate action, the following issues were consistently raised
1. Quality of sales associate performance, education and standards
Participants reported concern about the overall quality of sales associates in terms of their knowledge about the practice of providing housing services and the process of assisting consumers in the purchase and sale of housing. Discussions focused on:
- the applicability of training programs to the real life practice of brokerage;
- the lack of initial and ongoing broker supervision for both new and experienced sales associates; and
- the application and enforcement of standards of conduct of sales associates.
2. Use of Technology
There was a general consensus that the Web has become a very important part of every broker's business, that activity on the Web and consumer use has increased significantly, and that increased investment in computer hardware and software is likely required in the years to come. However, there was a recurring theme that technologies have failed in their promise to make
REALTORSŪ lives easier. Technology in general is still far too complex, difficult to maintain, and prone to system failure. Additionally, brokers said that their investments in technology are too often under-utilized by their sales associates.
Nationally, brokers and agents have invested more than $10 billion in technology, yet productivity has been flat to down in that time. Outside of Web investments, many of the programs haven't increased profitability.
3.Consumer Requirements
Brokers consistently reported that they recognized a change in housing consumers. Consumers are utilizing the Web much more frequently, becoming more independent and demanding of information from sales associates and desiring higher levels of service than in the past. However, there seemed to be little indication that consumers were demanding or pressuring sales associates to adjust their commissions based on their greater access to information.
4. Regulatory and Environmental Issues
While only two regions reported significant challenges with indoor environmental issues such as lead-based paint, radon, mold and asbestos, virtually every region reported that interaction with local zoning bodies has become more complex and is beginning to impact housing inventories and delaying completion of transactions. A shortage of qualified inspectors has had further implications in northern areas of the state.
In regard to outdoor environmental issues such as zoning, land use and wetlands issues, the increased complexity of regulation and the layers of jurisdictions involved in the process has caused confusion among brokers and agents. The lack of a single source of contact makes it difficult for associates to provide information requested by consumers on these issues.
5. Statewide Politics and Budget Deficit
While participants were briefed on emerging political and legislative challenges relating to the November elections and the threat of potential tax increases to close the current and projected future budget deficits, there was little concern for these outcomes over the next eight months.
The Strategic Planning Committee met on April 19 and hashed over the implications of each issue brought forth from these focus groups. The goal of this process is to guide the association in the development of products and services for our members in the coming year. Based on the recommendations of the committee, the WRA will now develop a budget for our 2002-2003 fiscal year. The budget will be reviewed by the Executive Committee on July 10th and presented to the Board of Directors for approval at the August 3rd meeting.
The focus groups were conducted by Steve Murray of Murray Consulting and realtrends.com. Murray provides consulting services to real estate associations and brokerage firms across the country and offers insight into national issues and trends.
If you have any questions or comments, please contact Strategic Planning Chairman Bob Weber at
weberb@firstweber.com or you can contact me at
wem@wra.org or 608-241-2047 or 800-279-1972.
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New Fees and Penalties Proposed In Senate Budget
While news reports regarding the state budget conference committee proceedings have focused on mega-issues, it's important to note there are hundreds of policy matters not reported, some of which will have a direct and negative impact on the real estate business. Here are just a few highlights:
- School impact fees: This provision added to the budget by Senate Democrats, will authorize school districts to levy an impact fee on all new residential development within a school district. The WRA believes this provision is not only unconstitutional, but also violates Wisconsin's impact fee law which requires a rational nexus between a specific new development and increased government infrastructure costs.
- Telemarketing penalties: Wisconsin's new telemarketing restrictions includes penalties of up to $100 for even innocent violations of the law. Senate Democrats increased this penalty to up to $10,000 for a single misplaced call.
- Use value penalties: The Senate Democrats inserted a provision in the budget that would increase the penalties for property owners that change the use of their farmland.
- Wage liens: The Senate budget contains language that requires banks to give a priority lien on property for wages owed to employees by companies that go out of business. This type of superior lien would result in fewer mortgages and restricted lending practices that would hurt homeownership in Wisconsin.
- Campaign finance "reform": The Senate budget calls for taxpayers' funded state elections and unconstitutional restrictions on free speech for organizations like the
REALTORSŪ and other interest groups. In addition, it's ironic that this provision, with its almost unlimited financial commitment by taxpayers to fund legislators' campaigns, is in a bill to address a budget shortfall.
- Smart Growth cuts/delay: Siding with the wishes of many town officials, the Assembly Republicans inserted in the budget a 4-year delay for the state Smart Growth law, moving the date by which local units of government must have a comprehensive land-use plan in place from 2010 to 2014. Also, the Assembly voted to cut the amount of state grants to local governments to help fund comprehensive land-use plans. The Senate Democrats voted to restore the original date and actually increased funding for planning grants.
The WRA is working to remove these new fees, expenditures and penalties from the budget. For more information, contact Michael Theo, Joe Murray or Tom Larson.
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Chairman's Corner
 Spring is here! Like most people, I look forward to the extra bounce in my step that greets the change of seasons. But as a
REALTORŪ, there are many more reasons to look forward to spring. You have to love the bloom of new customers ... the growing listing inventory ... the blossoming sales ... the greening up of the bank book.
Gardners know that if they do not plant and tend the seeds early in the season, they will not achieve vibrant growth later. In real estate, this translates into tending to ones skills, maintaining good customer relations and ethical dealings, and simply working hard.
That metaphor of changing seasons sums up the current activity in our daily practice as well as the events at WRA.
The staff of the WRA has been working harder than ever in anticipation of a blossoming market for all of us. This is true in all areas. As an example, I hope you love this new look of the Wisconsin
REALTORŪ. Congratulate Sonja Penner, vice president of communications, and her staff for a great job as always.
Let me share just a few of the other spring seeds that are blossoming:
First Chairman-Elect Bob Weber just completed his strategic plan update for the coming year. The plan utilized a great process that focuses on our issues as agents and brokers in Wisconsin, with the talents of Steve Murray from RealTrends as a facilitator for focus groups around the state. We will be reporting the outcome at our upcoming Board of Directors meeting in May.
I also want to acknowledge the work our public affairs staff has been doing. Over the course of my years of involvement at the WRA, I have never seen this group work harder on behalf of the membership. And the political impact to our daily business, livelihoods and futures has never been at a more critical level. Please involve yourselves in this process for the sake of your business, your industry and your pocket book. These are the plantings of spring that will really make a difference.
Finally, you may not have heard that our illustrious president, Bill Malkasian, has been on the road again as usual. This time, however, he has traveled to some interesting places outside of our state. At NAR's request, Bill has been assisting the former Soviet states of Georgia and Armenia in establishing organized real estate. Our professional staff skills are reaching beyond our borders again.
As you plant your seeds and watch the blossom of success, ask what you are doing for your industry and the future of your practice. The WRA does that everyday on your behalf. If there is an area you would like to contribute, just let them know.
Have a great spring!
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Wisconsin Veterans Can Get 6.5% Home Mortgage Loans with No Requirement for Mortgage Insurance
The Wisconsin Department of Veterans Affairs (WDVA) now has $15 million available for home mortgage loans with an interest rate of 6.5 percent, WDVA Secretary Raymond Boland
announced.
In addition to the low interest rate, WDVA home mortgage loans offer several advantages to Wisconsin veterans such as no requirement for private mortgage insurance, no discount points, no funding fee, and a fixed rate of interest for the 30-year term.
"The monthly payments on a WDVA home loan may be substantially lower than a conventional loan. Beside the low interest rate, there is no requirement for mortgage insurance, which is a significant savings." Boland said.
The loan must be used to buy or build the veteran's principal residence. It may not be used to refinance an existing mortgage. The WDVA requires at least a 5 percent down payment. WDVA home mortgage loans do not have maximum income limits, so higher income veterans may qualify. However, the amount of the WDVA home mortgage loan may not exceed $278,500.
To fund its home mortgage loans, the WDVA recently sold $15 million of bonds to the Wisconsin Board of Commissioners of Public Lands, which administers trust funds that provide investment income to Wisconsin's public school libraries. The trust funds currently total about $470 million and are invested mainly in loans to local government and school districts ($300 million), state veterans affairs' bonds ($35 million) and Lambeau Field renovation bonds ($100 million). Members of the Board of Commissioners of Public Lands are Attorney General James Doyle, Secretary of State Douglas La Follette and State Treasurer Jack
Voight.
This cooperation between the WDVA and the Wisconsin Board of Commissioners of Public Lands saved $150,000 in bond underwriting fees, and this $150,000 now may be used for more home loans to veterans.
The WDVA also offers home improvements loans with a 7.45 percent interest rate. Veterans may borrow up to $25,000 with 15 years to repay for a variety of alterations, construction and repairs of their principal residence, including garage construction. Veterans now may have more than one WDVA home improvement loan if they have sufficient equity and can repay multiple loans.
To obtain WDVA home loans, veterans must meet military service and state residency requirements set by the Wisconsin Legislature.
For more information about WDVA home mortgage and home improvement loans, contact the nearest county veterans service office [listed in the phone book under county government]. More information is also available on the WDVA Web site at
http://dva.state.wi.us
or by calling the WDVA toll-free at 1-800-947-8387 [1-800-WIS-VETS].
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2002 REALTOR Scholarship Winners
On April 18, 2002 the Scholarship Committee of the Wisconsin Realtors Foundation awarded its annual
REALTORŪ Children Scholarships. The scholarships are awarded on the basis of the individual's scholastic achievement, leadership ability and service to his or her school and community. Eligible applicants must be children of
REALTORŪ members in active standing with the Wisconsin REALTORSŪ Association for at least three years prior to the scholarship application.
The seven recipients and their REALTORŪ parents are: Luke Allison (Kathy Allison), Watertown; Timothy Gilbertson (Gil Gilbertson), Wausau; Johanne Marie Lepeska Grinde (Jon Grinde), Madison; Taryn Sauer (Barbara Sauer), Slinger; David Wolfe (Jill Wolfe), Racine; Jacqueline DeFoe (Sheila DeFoe), Waupun; and Stacy Kouba (JoAnne Kouba), Two Rivers.
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