Welcome to ECBOR - CHIPS March 2002

Listings not mapping properly?

It may be that the zip code, or some other important piece of information, is missing. This will cause the property to be mapped incorrectly. For guidelines on entering addresses for better accuracy in mapping, go to the US Postal Service Site -http://www.usps.com. The standards set by the USPS are also the standards that are used by Fidelity for the MLS.

New Case Interpretation for Article 12 Adopted by NAR
Use of Deceptive Domain Name/URL

NAR's Professional Standards Committee adopted the following case interpretation related to Article 12 and the use of deceptive domain names on the Internet. This case interpretation will appear in the 2002 Code of Ethics and Arbitration Manual.

Article 12 Case Interpretation: Use of Deceptive Domain Name/URL (Uniform Resource Locator)

REALTOR® X, a principal broker in the firm XYZ, was technologically savvy and constantly looking for ways to use the Internet to promote his firm and drive additional traffic to his website.

Being an early adapter to the Internet, he had registered, but not used, domain names that incorporated or played on the names of his competitors and their firms, including ABC REALTORS®.

REALTOR® X and his information technology staff concluded that one way to drive traffic to the firm's website would be to take advantage of the search engines commonly used by potential buyers and sellers. They realized that when potential buyers or sellers searched on key words like "real estate" or "REALTORS®" or on similar words, lists of domain names would appear, and that when consumers searched the Internet for ABC REALTORS®, one of the domain names that might appear would be REALTOR® X's domain name abcrealtors.com.

REALTOR® X decided to take advantage of the domain names that he had previously registered, and pointed several that used, in various ways, the names of his competitors, including "abcrealtors.com", to his site.

In a matter of days, REALTOR® X learned that he had been charged with a violation of Article 12 of the Code of Ethics by REALTOR® A, the owner of ABC REALTORS®, alleging that his (REALTOR® X's) use of the domain name "abcrealtors.com" presented a false picture to potential buyers and sellers and others on the Internet.

At the hearing, REALTOR® X defended himself indicating that, in his opinion, use of a domain name was not advertising or a "representation" to the public but simply a convenient way for Internet users to find relevant websites. Moreover, "When websurfers reach my home page, there is no question that it is my site since I clearly show XYZ's name-and our status as REALTORS®," he continued. "These complaints are just a lot of sour grapes from dinosaurs who aren't keeping up and who don't realize that on the Internet it's 'every man for himself'".

The hearing panel disagreed with REALTOR® X's justification, indicating that while his use of a domain name that employed another firm's name might not be precluded by law or regulation, it did not comply with the Code's higher duty to present a "true picture".

REALTOR® X was found in violation of Article 12 presenting an untrue picture in his representation to the public.

Indiana Association of REALTORS® Briefing Paper - January 10, 2002

ISSUE

The state faces two major fiscal issues. The first is the court ordered reassessment of property that is currently underway. The impact of the reassessment is to shift large portions of the tax burden from business property to residential property. Estimates of the tax shift are a 13% average statewide increase in residential taxes with the shelter allowance, or a 30% average increase if the shelter allowance is found unconstitutional. However, these averages mask much larger increases that will occur in some areas, especially urban areas with older housing stock. The second issue is the budget shortfall, with estimates of a $1.3 billion deficit by the end of the current biennium.

The O'Bannon Administration has proposed two plans in response. Their deficit reduction plan is a combination of spending cuts, transfers, and suspension of tax cuts passed in 1999. Their tax restructuring plan, the 21st Century Tax Plan, is a complicated plan aimed at mitigating the effect of the reassessment. It has the following highlights.

Tax reductions:

Removes 50% of the school general fund from the property tax
Removes welfare levies from the property tax
Removes trial court levies from the property tax
Increases the homestead credit to 15%
Eliminates the inventory tax
Eliminates the corporate gross income tax

Tax increases:

Raises the sales tax from 5%-6%
Raises the income tax to 3.9% for income under $90,000, and 4.4% for income over $90,000
Creates a business franchise tax to be paid by all business, at the rate of .3% times the net worth of the business.
Eliminates the property tax replacement credit
Increases corporate income taxes for C corporations by .75%

IAR Position

IAR supports many elements of the Administration plan. In particular, the reductions in the property tax by removing school, welfare, and trial court levies mirror IAR policy. Moving from the property tax to broader-based forms of taxation (sales and income) also mirror IAR policy. Many of the economic development initiatives are also positive, such as eliminating the inventory tax and increasing the R & D credit.

The main negative in the plan is the creation of the franchise tax, which is a new tax on business. Although its exact impact is unclear at this point, we are concerned it will negatively impact some members. However, it is likely a better business tax alternative than applying the sales tax to professional services.

IAR Message

We support taking action this year, prior to the implementation of the new reassessment. Some legislators would like to delay action until after the reassessment so they can more accurately gauge its' impact.
We support removing school, welfare, and trial court funding from the property tax. Cutting property taxes across the board is the best way to fix the shift to homeowners caused by the reassessment. Removing these entire levies (beyond the 50% of schools proposed by the Administration) insures they will not grow back in the future.
We support broad based sources of replacement revenue-sales and income taxes.
As you address these problems, don't kill the housing market in the process. It is already in too much jeopardy! Some legislators have suggested real estate transfer taxes and a sales tax on services as a part of the replacement revenue package. The reassessment problem is what has led to this debate to begin with, why try and solve it by creating new taxes on housing.

Talking points on real estate transfer tax (sales tax on housing)

Housing is already in jeopardy from the reassessment, now is the worst time to create a new tax on homeowners.
It decreases affordability by requiring buyers and sellers to come up with additional cash at closing, and down payments are already the biggest impediment for most buyers.
The tax funds broad based services on the backs of a few-those buying or selling a bome.
The tax bears little relationship to ability to pay-a person with a 90% mortgage would pay the same tax as someone who owns a home free and clear.
The tax singles out one class of assets-real estate, creating an uneven playing field with other classes. Why not tax stock sales for example.
The tax would be a form of double taxation, since property owners already pay property taxes.

10 WAYS YOUR REALTOR® MEMBERSHIP CAN PAY FOR ITSELF

1. Code of Ethics

Since 1913, the Code of Ethics has stood for the honor, integrity, competency and professionalism of REALTORS® and the REALTOR® organization.

The REALTORS® Code of Ethics remains vibrant and alive; an evolving, dynamic, meaningful guide in our increasingly complex business and legal environment. The Code challenges REALTORS® and guides you in your dealings with clients, customers, the public and each other through its strict, objective but readily understandable ethical principles.

2. Real Representation in Washington

Rated the 9th most powerful and influential lobbying organization, NAR's Government Affairs representatives fight for REALTORS® interests at the federal level in Washington, D.C., and work to put money in your pockets through legislative and regulatory activities. RPAC, the REALTORS® Political Action Committee, raises funds to support the political activities of Government Affairs and disseminates contributions to federal candidates and political parties.

3. Real Value. REALTOR® VIP Program

As a true benefit of membership, you have access to the REALTOR® VIP Program and benefits that will help save you money and advance your career. With more than 760,000 members, NAR's unprecedented purchasing power enables us to give you insurance/financial, technology, office/management and automotive offerings from industry-leading corporations who provide exclusive savings. In addition, you can take advantage of industry publications created to keep you well informed about pertinent issues, policies, and trends, along with sales and marketing solutions.

4. Raising Public Awareness

Every year, NAR educates the public and policymakers about the benefits REALTORS® bring to the real estate marketplace. NAR's public affairs professionals make sure that "The Voice for Real Estate" is heard loud and clear in the news media, the halls of Congress, the White House, and in countless public forums. Since the national advertising campaign "We're REALTORS®. Real Estate is Our Life" began in July of 1998, more than 6,000 national television and radio spots have aired, delivering more than 4 billion exposures to the REALTOR® name, significantly increasing consumers' understanding of the advantages of working with a REALTOR®.

5. Generating Leads Online

Over 3 million potential homebuyers visit REALTOR®.com® each month to search the nation's largest database of homes for sale, over 1.75 million homes across the country. REALTOR.com® boasts a strong following and generates millions of leads with consumers averaging two visits a month, for an average of 13 minutes per visit - making it the #1 real estate destination. REALTOR®.com® also offers a full suite of lead generation and internet marketing products to support real estate professionals.

6. Reducing Your Business Risk

Studies reveal that nearly 70% of all claims against real estate professionals are a result of misunderstanding. To help you minimize your risk, NAR offers training materials, references, and other publications that cover a variety of legal liabilities, industry trend and REALTOR® association topics.

7. Information at Your Fingertips

Turn your computer into a powerful business resource with REALTOR®.org, where you have access to an online community of REALTORS®, virtual library of periodicals, books and research materials, daily industry news, and government and legal updates from Capitol Hill. You also have access to the REALTOR® VIPSM online catalog, the REALTOR® Product Mall and customized weekly updates emailed directly to you on topics you choose.

8. Increasing Your Knowledge and Business Success

NAR makes a continual effort to provide the very best in educational tools and programs for real estate professionals.

The all-new e-PRO was built by REALTORS® for REALTORS® and was developed and administered by one of the most respected real estate technology companies in the industry - InternetCrusade®. Increase your opportunitites for real estate business success and effective client management by enhancing your Internet skills.
REALTOR® University Online is NAR's Internet-based education delivery system where real estate professionals can take courses online for continuing education credit, professional development and designation certification.
Our At Home with Diversity Certification Course provides practical and simple ways to incorporate diversity into your business practices and increase your market share by focusing on must-know demographic trends, cultural differences and sensitivity, as well as techniques already employed by top producers.

9. Expanding Your Skills and Contacts

REALTORS® see referrals and sales increase significantly from the networking and education they gain at the REALTORS® Conference & Expo, the industry's premier event. Nearly 23,000 real estate professionals and guests from around the world attend this yearly event to learn about trends, technology, products and services to increase their productivity and competitive edge.

Stay on top of trends year round by reading REALTOR® Magazine, where you'll find tips that can enhance your productivity, keep you on the right side of the law, and help you conduct a more successful business. Visit the magazine online at www.realtormag.com, where you'll find Tool Kits and Advisors that provide key information and guidance to continue to expand your skills.

10. The Strength of an Integrated REALTOR® Organization

The benefits you get from NAR are just the beginning. When you consider the benefits you get from REALTOR® state and local associations and NAR''s affiliated Institutes, Societies and Councils, it's easy to see that membership in the REALTOR® organization is truly a valuable business asset.

For more information on any of these national programs or products, call NAR's Information Central at 1-800-874-6500 or visit online at www.REALTOR.org.