oregon realtor® magazine

A PublicAtion of

Summer 2011

The HOME Foundation isdedicated to assisting 501(c)(3) organizations committedto affordable housing.

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Includes: Green fees with cart, BBQ buffet dinner andunlimited range balls prior to play

Thursday, July 21st, 2011G O L F T O U R N A M E N TG O L F T O U R N A M E N TG O L F T O U R N A M E N T

Come play golf to help others realize the dream of home ownership!

Neil Lomax will be back as emcee for the awards dinner!

Neil LomaxFormer NFLQuarterback

Purchase your yellow team ball in advance – $20.00 per team

2nd Annual Driving it

G O L F T O U R N A M E N TG O L F T O U R N A M E N TG O L F T O U R N A M E N TG O L F T O U R N A M E N TG O L F T O U R N A M E N TG O L F T O U R N A M E N T

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Volume 46 number 2

ASSOCIATION OFFICERS

PRESIDENT Joann HansenPRESIDENT-ELECT John Hoops, CRSIMMEDIATE PAST PRESIDENT Alan Mehrwein, GRI, CRBEDITOR/CHIEF EXECUTIVE OFFICER Jonathan M. Wallace, CAEMANAGING EDITOR Joyce H. Beach, CMP, e-PRO

KEY COMMITTEE CHAIRS

Business Issues Sue O’Halloran, CRSGovernment Affairs Sue Curths, CRB, CRSPolitical Affairs George HaightProfessional Development Lori Stenshoel, GRI, ABR, CRS

Any information provided is intended for the general guidance

and information of OAR members. OAR should not be con-

sidered the single authoritative source of information. The

user is responsible for verifying all important information for

accuracy and completeness before taking any action on the

basis of the information.

The OREGON REALTOR® is published quarterly and mailed

biannually by the Oregon Association of Realtors®, PO BOX

351, Salem, OR 97308-0351. Subscriptions cost $4 annually

as part of membership dues; $15 annually for nonmembers.

Send address changes to the OREGON REALTOR®, PO BOX 351,

Salem, OR 97308-0351.

Advertising carried in the OREGON REALTOR® does not

constitute an endorsement of the products by the Oregon

Association of Realtors®. Exceptions to this rule are seminars

sponsored by the Oregon Association of Realtors®.

Printed on recycled paper.

StAtement of oWnerSHiP AnD mAnAGement. the oreGon reAltor® is

published twice a year in the Spring and Autumn by the oregon Association

of reAltorS®, P. o. box 351, Salem, or 97308-0351. the editor is Jonathan

Wallace, P.o. box 351, Salem, or 97308-0351. the owner is the oregon

Association of reAltorS®, P. o. box 351, Salem, or 97308-0351. there are

no bondholders, mortgages or other security holders.

O R E G O NREALTOR®

Joyce beachManaging Editor

Editor’s PodiumPlaying the Waiting Gamethese days it seems as though we’re continually playing the waiting game. in the Willamette Valley we’re waiting for summer to show its face; in Salem we’re waiting for the 2011 legislature to adjourn, and across oregon and the u.S. we’re waiting for the housing industry and the economy in general to improve.

Life goes on, however, whether or not the sun is out and even when the legislature is in session so please read through this issue of the OREGON REALTOR® for information on what’s happening now. There are hopeful signs. This issue’s cover story addresses the Coming Mini-Boom in Commercial Real Estate – a market sector that’s looking for some positive news. We’re also featuring a guest legal column that provides further information on navigating the terrain of short sales, foreclosures and bankruptcy.

Activities within the Association also are demonstrating positive results. The growth of the Association’s Young Professionals Network, International Business Council and HOME Foundation are additional positive indicators.

Our upcoming events include a July 19th Webinar on the important issue of MERS – Non-Judicial Foreclosures in Oregon. The Association also is working with the Oregon Real Estate Agency to co-sponsor an industry event in Portland, September 20.

So turn the pages to see what’s happening. Hopefully when you do, the legislature will have adjourned and the sun will be out. ■

Summer 2011 | oreGon reAltor® | 3

cover Story: the coming mini-boom in commercial real estate Page 10-11

Oregon REALTORS® Young Professionals Network Continues to GrowKerri Hartnett, Pmn, Gri, 2011 Oregon YPN Chair

it’s hard to believe that we’re already half way through 2011! oregon YPn has had an eventful second quarter, and we’re gaining momentum to position ourselves as a premier resource for young professionals throughout the state. Our first Tech Tip education session was held at the April Governance meetings in Salem, where we learned how to use facebook and blogging in our business. everyone who attended walked away with something that they could implement immediately to help be more effective with our social networking strategy. our next tech tip session will be held in conjunction with our fall Governance meetings . . . more information to come.

We also participated in the RMLS™ Trade Fair in Portland, where we were able to get face-to-face with REALTORS® and affiliates. We took advantage of

this incredible opportunity to increase awareness about our network, and to encourage new members to sign up and get involved. We’re very excited to bring value to our members as our network grows.

In June we had our first networking mixer after the Inman Agent Reboot in Portland, where we partnered with the Portland Chapter WCR to mingle with some of the brightest professionals in the area. We had a great turnout of current and future members, and once again had the opportunity to network and to promote the benefits of being involved with YPN.

Our next networking opportunity is at the Oregon REALTORS® HOME Foundation Golf Tournament on July 21st at Langdon Farms Golf Club. We’re hoping to get a few YPN foursomes together to show our team spirit during the event. For more information including how to register,

please contact the Oregon Association of REALTORS® at 800-252-9115, and make sure to let them know you are with YPN.

We have been very active in our first year and we look forward to a strong finish. One of our major goals this year is to assist in launching local networks throughout the state. We’ve have lots of interest and we are committed to helping to get these off the ground as soon as possible. If you or someone you know would be interested in getting involved with YPN, either on the state level, or at your local association, please contact me at [email protected]. It has been a pleasure to serve, and I’m excited about the continued growth as our Oregon network expands.

Yours in success! ■

Kerri Hartnett

O R E G O NREALTOR

editor’s Podium 3

oregon reAltorS® Young Professionals network continues to Grow 4

President’s forum 5How do you Spell Success?

back to the basics with Summer Safety 5

legal issues 6A Sign of the Times: . . .

Get involved and make a Difference 9

2nd Annual Driving it Home Golf tournament 9

oregon reAltorS® Going Global 12

Hotline Highlights 13When Does the Time Frame Start for the Seller’s

Property Disclosure Statement?

oregon Association recognizes new oregon Gri Designees 14

events calendar 16

4 | oreGon reAltor® | Summer 2011

no matter what your profession or avocation there is a strategy for success that can be summed up in the following seven bullet points.

Create a specific STRATEGY. Specific strategies will result in success. Create a plan. It’s easy to discover what you want when you know what you don’t want. This is the key to discovering your goals and dreams. You must be specific and know exactly what you want.USE IT. It doesn’t matter who you are, you have succeeded at something at sometime in your past. Use these times to remind you that you can in fact achieve your goals. If something motivates you, use it again and again. Use the timeline: Begin, get active, achieve. Stay on track and use checklists. Use your time wisely but don’t forget to enjoy each step of the plan.Be CURIOUS. Read, converse, observe, listen and discover. Constant curiosity is sure to keep you excited. Make it a team effort by engaging a partner or mentor.CHANGE can take place. Enjoy the amazing opportunities offered to us all. Become a part of the REALTOR® family. Keep apprised of new technologies and the changes in your industry to help your business. Become part of the team effort - don’t go it alone.ENJOY! Nothing makes you more successful than the enjoyment along the way. Share your successes with your partner or your mentor or your team. EDUCATE yourself to achieve your goals.STAY POSITIVE! There will be negatives and setbacks; this is reality. But knowing that you are on the right track and staying focused with the help of others around you and keeping a positive outlook will certainly contribute to your success in countless ways.SUCCESS takes time so don’t expect overnight success. If you are doing something significant for yourself and others around you, success will be inevitable. Stay true to your goals and reward yourself for your achievements. ■

P R E S I D E N T ’ S F O R U M

Joann Hansen

How do you Spell Success?by Joann Hansen, 2011 Oregon Association of REALTORS® President

The temperature is heating up which means summer is finally here. it’s this time of the year that many of us take vacations to revitalize our minds and bodies. So this is the perfect time to go back and remind everyone of the basics.

Everywhere I go people always ask me, “Andrew, why safety?” So I’d like to take this time to have a simple chat with you about why we need safety and awareness trainings.

First, I’d like to shout out a big thank you to all the associations that are proactive with safety. I’d also like to say thank you to the National Association of REALTORS® who lead by example, giving REALTORS® all over the world tons of resources to keep them safe. Click here to visit NAR’s safety resource page.

With that in mind here’s a reminder about the “Three L’s.” The Three L’s for Home Safety: Locks, Lighting and Landscape

LocksBe sure you have proper locks on all your doors and windows -

and keep them locked! Use anti-bumping deadbolt locks on all your doors. Keep the door between your house and the garage locked and

Back to the Basics with Summer Safetyby Andrew Wooten, www.Justbesafe.com

lock your garage door at night. Don’t forget to check all your locks before you go to bed each night.

LightingCriminals love landscape lighting and dusk-to-dawn lighting.

We recommend you install motion detector lighting on all your outside lights. This includes on all four sides of your home. Also install timers for the interior lights of your house. This makes your home look occupied even when you are not there.

LandscapingIn addition to keeping your lawn cut and clear of clutter,

remember the three foot/10 foot rule. All of your bushes should be cut down to no higher than three feet and thinned out. This prevents criminals from hiding behind your bushes to surprise you. All your trees should be cut to hang no lower than ten feet from the ground. ■___________Andrew Wooten is the president of Safety Awareness Firearms Education (S.A.F.E.), and has been in the safety and security industry for over 24 years. His experience consists of education and training in crime prevention and security management that has earned him many professional certifications in his field. He is also an accredited multi-black belt in Judo, Jiu-jitsu, Taekwondo and Aikido.

success


L E G A L I S S U E S

Continued on page 7

for the last several years, we have lived in a changed world – one with a weak economy and a challenging real estate market, amongst other things. unfortunately, many property owners have had personal experience with the difficult real estate market, having been forced to make tough decisions about how

best to deal with properties they could no longer afford to keep. this in turn has led many brokers to learn first-hand about options available to distressed property owners, as brokers tend to be one of the first resources property owners turn to when faced with a tough decision. this article will first address these options, then discuss how a property owner’s circumstances will impact the choices they make, and finally discuss how brokers should communicate with their clients about their options.

Options Available to Property Owners

Loan Modifications A property owner who needs temporary

relief to retain his or her property may consider seeking a loan modification. Many lenders may be willing to alter the

sale in that he or she will be able to sell the property and cut his or her losses. A short sale can, however, have a negative impact on the seller’s credit, may result in continued liability to the lender on the loan against the property and could have adverse tax consequences.

Deed in Lieu of Foreclosure A deed in lieu of foreclosure may be

used by a property owner to cut short the timeline associated with a foreclosure and to negotiate relief from the shortfall between the value of the property and the balance on the underlying loan (the “deficiency”). Because a deed in lieu of foreclosure is negotiated between the property owner and lender it may not have the same outcome as a foreclosure and may not benefit the property owner any more than would a foreclosure. However, it can be useful to a property owner who can successfully convince a lender that deeding the property back will save the lender from expending time and money in a foreclosure, in return for a release from any “deficiency” liability.

Foreclosure Foreclosure is the typical end result in a

situation in which a property owner defaults on an underlying loan against property, and is unwilling or unable to bring it current. Some property owners find themselves facing foreclosure because they have experienced a hardship and have no better option than to allow the property to go into foreclosure.

terms of a property owner’s loan, either temporarily or permanently, in order to allow the property owner to continue to own the property. The obvious advantage of a loan modification is that it allows a property owner to keep the property, rather than being forced to sell the property or allow it to go into foreclosure. Loan modifications, however, can be challenging to obtain, can take many months to go into effect, and often require the property owner to repeatedly contact the lender in order to move the process forward. Lenders also have very strict qualifications for property owners seeking loan modifications and may not be willing to consider loan modifications for properties other than principal residences.

Short Sales A short sale takes place when the

proceeds from a sale of property are not enough to cover underlying encumbrances against the property and all other costs associated with the sale. A property owner may consider entering into a short sale when he or she would like to sell a property, wants to avoid a foreclosure, and has experienced a hardship that may encourage his or her lenders to accept less than what is owed against the property. In addition, a property owner may consider a short sale simply for business purposes – he or she cannot justify throwing more money into a property that will not be worth what is owed against it in the foreseeable future. A property owner will benefit from a short

Janet Grayson

Joel Grayson

Sales,A Sign of the Times: Loan Modifications, Short Sales, Deeds in Lieu, Foreclosures and Bankruptcy by Janet and Joel Grayson, Maylie & Grayson


A Sign of the Times:. . . continued from page 6

Other property owners may be strategic in allowing foreclosure to take place, such as in a situation in which they have other properties they are trying to retain, know that a property will not be worth the balance owed on the underlying loans anytime in the near future, or wish to occupy the property through the foreclosure sale date without making payments. Foreclosure can be beneficial to those who are able to avoid any post-foreclosure liability to the lender. However, as with any other option, foreclosure will undoubtedly have a negative impact on the property owner’s credit which will impact his or her ability to obtain financing in at least the near future. In addition, the property owner may be subject to tax liability in certain situations.

Bankruptcy Bankruptcy is an option considered by

property owners who have significant debts and/or are attempting to salvage equity in a property. In bankruptcy, a property owner may be able to restructure debt or may even be successful in doing away with the debt entirely. Although bankruptcy has a negative impact on a property owner’s credit, it may be the only way that a property owner can retain his or her property, save equity through a homestead exemption, or deal with significant debt.

Which option is appropriate for a property owner?

Each of these options may work for one property owner, but not another. For

instance, dependent upon the homeowner’s circumstances, each option may result in different tax consequences, credit implications and deficiency liability. Because one size does not fit all, brokers are strongly encouraged to advise their clients to seek legal, tax and other advice in order to make an informed decision. Although transaction forms used by many brokers throughout Oregon amply describe the various options available to distressed property owners and encourage contact with their legal and tax advisors, we would suggest an additional step.

Through experience, we have learned that many property owners have not read or fully understood this important advice, due in part to the substantial documentation required in any transaction. It would be beneficial to confirm with your client by email that you have advised them to review this matter with their legal and tax advisors with a request that they acknowledge their receipt of the email. In turn, you will have established and documented your good advice without using yet another form, which may assist you in the future, should a former client have concerns regarding an unintended consequence including tax or deficiency matters.

Conclusion A distressed property owner faces a

tough decision regarding how best to address his or her situation. Because this decision involves many variables, and can have a number of outcomes, distressed

property owners should seek counsel from professionals such as attorneys, tax advisors and others regarding how best to protect themselves and their assets. Real estate brokers, as a frequent first point of contact for distressed property owners, may wish to maintain a list of professional advisors to whom they can refer their distressed clients. In addition, brokers should ensure that they document their advice to clients to seek professional guidance on their situation, in writing. Such documentation will serve as protection for the broker, but will also ensure that the broker’s clients are being pointed in the right direction. ■

___________This column contains general information only and must not be construed as legal advice. Questions may be submitted directly to Maylie & Grayson by fax at (503) 775-1765, by email at [email protected], or by mail at 7959 SE Foster Road, Portland, Oregon 97206.

Janet Grayson and Joel Grayson are recognized authorities in real estate law and litigation. They are published authors and have been frequent lecturers, continuing education instructors and mediators to the real estate industry, as well as contributors to radio and other media.

Maylie & Grayson is a full service law firm providing representation to real estate brokerages, licensees, Realtor® associations, developers, builders, lenders and investors, providing services in all aspects of real estate including transaction review, land use planning, licensing, mediation, arbitration and court matters throughout Oregon and Washington. Maylie & Grayson assists the Oregon Association of REALTORS® legal department.

© Maylie & Grayson 2011


PLEASE REGISTER ME FOR: The MERS Dilemma

Name _____________________________________________Nickname ____________________________________________________

Firm ____________________________________________ Firm Address ____________________________________________________

City ________________________________________ State ________________________________Zip___________________________

Phone ______________________________________ Email _____________________________________________________________

Enclosed check for $ _________________ Charge my credit card - Name on Card ___________________________________________________

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PLEASE REGISTER BY juLY 12, 2011

$19 Registration Fee per viewing location (rather than per person)

METhod of PAYMEnT Check (payable to Oregon REALTORS®) VISA Am. Ex. Mastercard

Register online at www.oregonrealtors.org

Send registration to [email protected]

(credit cards only)or mail to

Oregon Association of REALTORS®

PO Box 351 Salem, Oregon 97308

The MERS* Dilemma:Update on Non-Judicial Foreclosures in Oregon

Robert E. LoweRob is Vice President & Counsel for WFG National Title Insurance Company. He has been in the title insurance and escrow industry since 1992. He started as the State of Oregon Underwriting and Claims Counsel for one of the largest title insurance companies in the United States, when, among many other duties, he was involved in the closing of some of the largest Oregon commercial real estate transactions. Prior to Rob’s involvement with title and escrow, he was in the private practice of law for 18 years, specializing in real property, foreclosure, bankruptcy, wills, trusts and probate law.

Join us for a WebinarJuly 19, 2011

9:30 am - 10:30 am

This webinar will discuss the issues with MERS in

Oregon. Learn how MERS can affect your transactions,

get information on red flags to keep an eye out for, find

out what you should advise your clients to do and more,

during this one hour session with the Vice President &

Legal Counsel for WFG National Title Insurance,

Robert E. Lowe.

CONTINUING EDUCATION CREDIT

1 hour credit: Real Estate Title

The Oregon Association of REALTORS® is a certified

education provider in Oregon and our instructors meet the qualifications to

teach CE courses in the state.

*Mortgage Electronic Registration Systems


What’s better than a stress free summer day on the golf course? imagine that this day on the links doubled as an opportunity to link up with colleagues and business partners from around the state. now add in a guarantee that your time on the greens would result in an investment of more green in homeownership programs throughout oregon. this winning combination can only be found at the 2nd Annual Driving it Home Golf tournament.

Block out Thursday, July 21st on your calendar and meet us at award-winning Langdon Farms, for an encore of last year’s festivities. This pristine course, conveniently located just off I-5 in Aurora, is ranked by the Portland Business Journal as the “number one best course to hold a golf tournament or corporate event in Oregon.”

You better hurry though; just a few spots remain on the field for the 1:45 p.m. shotgun start. You are welcome to arrive at the registration table as early as 11:45 a.m. and hit some balls with your team before the scramble. If you don’t have a foursome put together, please call in your registration and we’ll round out your team for you. Our terrific sponsors will be back to greet you at each hole with giveaways, games and contests, all designed to keep you entertained and encourage friendly team building.

Don’t Miss the Oregon REALTORS® 2nd Annual Driving it HOME Golf Tournament!by celeste Schmorde

Golf’s Not Your Thing?Even if I can’t talk you into an

afternoon of golf, make sure you don’t miss out on a memorable evening. You can count on good food, entertainment, a silent auction and plenty of networking. You’re sure to enjoy former NFL quarterback, Oregon Sports Hall of Famer, and avid golfer Neil Lomax’s spirited awards presentation – definitely one of last year’s highlights. Come prepared with your fair share of entries to improve your chances of winning $20,000 in the helicopter ball drop. Your participation will enable the continued support of affordable homeownership programs through the HOME Foundation.

Thanks to our participants and contributors: the hardworking golf committee, Neil Lomax for volunteering his time, all auction and raffle item donors, our friendly hole sponsors and our corporate sponsors for standing up for our industry (including the generous folks at Stewart Title and Guild Mortgage).More Information

To check remaining availability, purchase helicopter ball drop tickets or to get further information on the dinner-only option, please call 800-252-9115. ■

celeste Schmorde

Are you a broker owner or managing broker? if you are, you should be involved with the National Association of REALTORS® (NAR) Broker Involvement Program.

It’s been an extremely challenging year politically, as we’ve personally witnessed significant attacks targeting the real estate industry, specifically an attempt to limit the Mortgage Interest Deduction. In Oregon, this deduction is helping 569,276 families and is critical to a strong housing market. If this important deduction is eliminated or reduced, home values will decline and further distress our housing market.

The Broker Involvement Program provides you, the broker-owner with a quick and effective tool to rally your brokers on critical issues affecting our industry:■ A voice on Capitol Hill. This program is an opportunity to bring

a strong and united REALTOR® voice to members of Congress.

Get Involved and Make a Differenceby Jeremy Starr, CRB, CIPS, CRS, GRI

■ An easy-to-manage solution. There is no cost for this sharable tool that gives up-to-date information on key federal issues impacting real estate.

■ Proven results. The message is from you, the broker-owner, to your brokers. In 2010, nearly 40 percent of all responses on national calls for action resulted from this program.

■ Join now! It’s more important than ever that we are united and ready to

respond to protect Oregon’s real estate market. Sign up online today or contact the Oregon Association of REALTORS® (800-252-9115) to get an enrollment form for the Broker Involvement Program.

What are you waiting for? Get involved and make a difference! ■

Jeremy Starr


Continued on page 11

C O V E R S T O R Y

The Coming Mini-Boom in Commercial Real Estatebill conerly, Ph.D., Conerly Consulting LLC

We are currently under-building commercial real estate, which will lead to a miniboom. the pipeline of new buildings is thin, so as the economy improves, there will be very little additional space coming to market. occupancy rates and rents will rise. the resulting increases in operating earnings will cause the mini-boom. However, a true boom requires easy money, which is not part of our future, at least over the course of the upcoming cycle.

As a good rule of thumb, we spend about one-and-a-quarter percent of gross domestic product on commercial and health care buildings. That figure was steady through most of the 1960s and 1970s, until the Savings and Loan industry diversified into financing commercial real estate. At the peak in 1985, two percent of GDP was devoted to commercial construction. That overbuilding as well as tighter lending rules associated with the FIRREA legislation in 1989, led to below-normal construction in the early 1990s. The 2001 recession cut development levels again.

The recent economic boom and housing boom was not a commercial construction boom. The best years of the last decade were below the long-run average. In other

words, the American economy entered the recession without an excess supply of commercial structures.

The recession certainly clobbered commercial real estate, pushing occupancy rates down, which triggered rent cuts. The long lead times of many projects kept pushing more floor space onto the market even as the recession was reducing demand. Commercial real estate is not healthy at this time, but there is a vital distinction between commercial and residential real estate. We overbuilt residential, and then the recession lowered demand. In the commercial sector, we had not overbuilt—and then the recession lowered demand.

Last year commercial construction amounted to just 0.6 percent of GDP, less than half its long-run average. One might argue about whether the long run average is drifting up or down over time. However, there’s absolutely no way that the current construction pace constitutes the new normal.

I scanned a few market reports from around the country and found the pattern remarkably similar. Washington, DC is one of the strongest economies in the country. Office vacancy rate dropped a little in the fourth quarter of 2010, but at 14.9 percent it is still too high. Grubb & Ellis reports that last year net absorption was 4.5 million

square feet, but there was only 0.7 million square feet of space under construction. That pace of new building activity is appropriate for an overbuilt market, but it will not be appropriate forever.

Phoenix has a middling unemployment rate—9.3 percent, which is about average—and its industrial market is very soft, with a high vacancy rate that is gradually dropping. CBRE reports that net absorption last year was

2.0%

1.5%

1.0%

0.5%

0.0%1960 1970 1980 1990 2000 2010

Commercial ConstructionShare of GDP

perc

ent

Commercial construction, as a share of GDP, 1960–2010


The Coming Mini-Boom in Commercial Real Estate. . . continued from page 10

over six times greater than space under construction.

One of the worst economies of the large metropolitan areas is Tampa, where the unemployment rate is 12.4 percent. The retail sector has a fairly high vacancy rate, but in the fourth quarter net absorption was 323,000 square feet, according to Cushman and Wakefield. Completed retail space: a mere 18,500.

The economy is gradually expanding. The pace of growth is disappointing, but it is definitely positive, triggering increased occupancy of all types of properties, in almost all parts of the country. Net operating income will improve, initially because of rising occupancy, and eventually from rising rents.

Improvement in the economy does not always trigger improvement in net operating income because developers often anticipate the economic growth and build new space in anticipation of greater demand. That increase in floor space can sink rents even in a growing economy.

Today, however, there is hardly any speculative new construction. Banks and other lenders have tightened credit standards. They are skeptical of new projects given today’s high vacancy, and

they are demanding very high equity positions before lending to developers. The lower loan-to-value ratios make it harder for a developer to earn the return that covers the risk. In addition, some developers who are convinced that their projects are worthy even at a low loan-to-value simply do not have access to the equity capital needed to satisfy banks. The result: no one is building today in anticipation of tomorrow’s demand.

This improvement in commercial real estate will not become a full-blown boom, however. A real boom requires easy money, and plenty of it. Credit standards will remain high throughout the next cycle, and long-term interest rates will gradually rise as the global economic expansion fuels demand for credit. Call it a mini-boom, but it would be great deal better than what we are experiencing now.

What does this coming mini-boom mean for people in the commercial real estate business? Developers will need to start planning their new projects, which may involve more development of equity sources than development of dirt. Timing is crucial and will vary from market to market; too early and developers will have a few bad years as they put property into still-

weak markets. The greater risk, however, is too late, in which case others have already filled the need.

Tenants should consider extending their leases now, while the market is still soft. In a couple of years most markets will have shifted to favor landlords.

Landlords should be cautious about lease extensions. Those who need the cash flow may sign new leases at current rates, but those who can wait a couple of years will be well rewarded for their patience.

When the real estate market turns, we will surely look back and say, “We should have seen it coming.” You can see it coming right now, even though the turn is a few years away. ■ ___________Bill Conerly, Ph.D. is a Lake Oswego economist with a national following. He is the principal of Conerly Consulting LLC, advising business leaders on strategy and economics. He holds a Ph.D. in economics from Duke University, was formerly senior vice president at First Interstate Bank, and is chairman of the board of Cascade Policy Institute. He is also the author of Businomics, a book that connects the dots between the economy and business decisions. His website is www.ConerlyConsulting.com. This article was initially published in the Portland State University’s Center for Real Estate Quarterly a joint venture of PSU and the Oregon Association of REALTORS®.


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Oregon REALTORS® Going Globalby Steve Strode

In an era of virtual offices, tweets, and QR codes, it is easy to forget that personal connections are the best way to establish solid business relationships. nowhere is that more important than when delving into the arena of international real estate. through a variety of resources, oregon reAltorS® who desire to go global are taking advantage of educational and networking opportunities to expand their businesses.

International Business Council The Oregon Association’s International

Business Council continues with its Business Across Borders series. In April, the topic was fractional ownership. Our speaker, Michelle Bowler-Failing with Realty Trust,

shared her first-hand experience with establishing fractional partnership and helped attendees understand how this arrangement may be ideal for themselves or their clients almost anywhere in the world. A special thank you to Michelle for the excellent presentation!

The next Business Across Borders meeting is on July 13th. The presenter is Paul Taylor of Taylor Global Law Office, who will lead the discussion on U.S. Immigration Law and Foreign Employees.

NAR Mid-Year MeetingsAt NAR’s Mid-Year meetings in

Washington, D.C. in May, a number of REALTORS® who hold the Certified International Property Specialist (CIPS)

Continued on page 14


When Does the Time Frame Start for the Seller’s Property Disclosure Statement?

H O T L I N E H I G H L I G H T S

Jenny PakulaStaff Counsel

Question: i have several questions regarding delivery of the Seller’s Property Disclosure Statement. When does the time frame start; is it when the buyer’s broker receives the disclosure and acknowledges receipt or when the buyer actually signs the document? it is my understanding that the time frame doesn’t start until there is an accepted, mutually agreed upon offer. Some mlSs allow brokers to attach the Seller’s Property Disclosure Statement to their listing. if a broker downloads the disclosure prior to writing an offer, when is it delivered and when would the clock start? can you clear this up?

Answer: No, it can’t be fully “cleared up” because Oregon courts have not ruled on the matter. All that can be done is to look at the applicable statute to see what it actually says, which of course, is what a court will do when finally asked. It is a matter of figuring out how best to handle the disclosures to reduce risk given the lack of specific guidance from the courts. Essentially, the statute says that a seller, unless excluded, must complete, sign and deliver the statement to a buyer “who makes a written offer.” The Disclosure statement is based on the seller’s actual knowledge “at the time of the offer.” The five-day revocation period begins upon “delivery.” Delivery means to place something within the actual or constructive possession of another. A letter sitting in your mailbox while you are on vacation in Hawaii is delivered whether you know it is there or not.

Under the common law of agency, delivery to an agent is delivery to the principal if what is delivered is within the scope of the agency. Here you are talking about a document in a transaction that is being conducted through the agents. No court is going to believe the agent has the authority to send

and receive offers, counter offers, addendums, reports and every other document associated with the transaction and doesn’t have the authority to receive the Seller’s Property Disclosure Statement. That being the case, delivery to the agent is delivery to the principal and therefore the clock would start ticking when it is delivered to the agent.

The buyer’s signature on the disclosure is for the date they receive it. Actually, it is the date they acknowledge receipt. That doesn’t have anything to do with when the disclosure was delivered by the seller. Because the disclosure statute uses the term delivery rather than receipt, any delays once the document is delivered (placed within the actual or constructive possession) come out of the buyer’s five days. It really has to be that way, otherwise buyers and their agents could extend the time line by just ignoring the disclosure and not signing the form.

Acceptance of an offer has never had anything to do with when the Seller’s Disclosure Statement is to be provided. What triggers the statute is the offer, not the contract. An offer is by definition unilateral. An accepted mutually agreed to offer is a contract. What the legislature intended was for the buyer to have a chance to learn about

the condition of the property before their offer became binding. That is why the buyer is given five days from delivery of the statement to revoke their offer. Basically, the revocation period means the buyer is not bound on the contract for five days. Acceptance can come anytime during the five days.

The introduction of MLS downloads does confuse the situation, but it doesn’t change the statute which still requires the seller to prove they delivered a complete signed statement to a buyer who made a written offer. Because the statute requires a “buyer who makes a written offer,” the clock cannot run before a written offer is made. Using the MLS may, however, create proof issues, but proof issues don’t change the law either. If agents want to make the Disclosure Statement easily available on the MLS prior to offers being written, they can resolve time line and proof issues by demanding that the buyer attach the acknowledged statement to their offer.

The industry belief that a mutually agreed to offer is required before delivery of the Disclosure Statement becomes necessary, is just an interpretation of the statute, unfortunately, one unsupported by the language, context or legislative history of the statute. As always, it is a good risk management practice to have your company attorney review the statute and provide guidance to the brokers. ■


Oregon REALTORS® Going Global. . . continued from page 12

designation were chosen to attend foreign Embassy briefings. The purpose was to learn about real estate opportunities and the investment climate in the host country as well as deliver the message that NAR is the voice for real estate worldwide. I was fortunate to be chosen to attend, and had an excellent experience at the Embassy of Peru.

Additionally, at both the Mid-Year meetings and annual convention, NAR hosts an International Night Out event. These are always entertaining, and an excellent way to network and build one’s referral base.

FIABCI (International Real Estate Federation)Founded over 60 years ago and based in Paris, FIABCI is a

non-political entity whose objective is to help its members add an international dimension to their business. Several years ago, a number of brokers in Oregon and Washington formed a Pacific Northwest Council of FIABCI. We meet routinely to network and invite guest speakers on a myriad of real estate topics. In late June, we were invited by the Real Estate Institute of Canada to be part of a delegation to Vancouver, B.C. Like NAR, FIABCI-USA conducts spring and fall business meetings domestically that offer excellent educational and networking opportunities. The organization also conducts business meetings overseas; this fall FIABCI will meet in Lisbon, Portugal and next spring in St. Petersburg, Russia. The organization also organizes Embassy visits and has held regular briefings at the United Nations.

As you can see, there are a variety of resources available and ready for your participation. Opportunities abound - at the local, state, regional, national, and international level. Are you ready to go global? ■

Central Oregon AssociationJudy bannonlori HickersonSally Knowlesbabette larsonforrest SmithPriscilla tofte

Clatsop Association bree Phillips

Columbia County BoardDan martin

Willamette AssociationHarry Atkinson

Curry County Boardcarol Davis

Oregon Association Recognizes New Oregon GRI Designeesthe oregon Association of reAltorS® is proud to recognize 21 reAltorS® in 10 local boards/Associations who earned the Gri (Graduate, reAltor® institute) designation at the conclusion of the institute’s spring offering in Salem in April.

The fall Oregon GRI will be held at the Sheraton Hotel, Portland Airport, November 28-Deccember 1, 2011. Watch the Association’s e-News and Facebook page for further information.

Congratulations to the new designees who are recognized to the right.

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Eugene AssociationSherry Peacher

Rogue Valley Associationroberta louse nelson

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The modern era of globalization began after World War II through growing political and economic alliances. Six decades later nearly one-third of all REALTORS® have completed international real estate transactions involving a seller, buyer and/or use of foreign lending. Although real property is stationary and localized, buyers, sellers and financing elements are often transitory. In 2004 Oregon welcomed 103,835 tourists, students and work-related im-migrants. There were 3,612 immigrants to Oregon who became U.S. Citizens that year. Ethnic and cultural diversity enriched our state with people from China, India, Mexico, Philippines, South Korea, Ukraine and Vietnam. In 2006, the Oregon Association of REALTORS® International Business Council established clear goals and guide-lines that mirror NAR-International

Operations. Today the Oregon Associa-tion of REALTORS® is the NAR-ap-pointed Ambassador association to the country of Vietnam and last year won the 2007 International Ambassador Associa-tion of the Year award. Our members have the benefit of learning more about real estate and business practices overseas and across borders, along with investment opportunities for clients right here in our own front yard. Through 2010 inbound migration is estimated to result in five million new households in the United States. The OAR-IBC is gearing-up to help brokers and other professionals identify ways to expand their business practices by reaching this growing market sector. ■

For more information on getting connected with the Oregon REALTORS® International Business Council, go to www.oregonrealtors.org/international or visit our blog: www.oregonrealtors.org/IBC/IBC_BLOG/ to view the latest posts.

BuildingOn WhatWe KnowJack R. ThomasChairman, OAR-IBC Advisory BoardCertifi ed International Property Specialist

G L O B A L V I E W

Spring 2008 | OREGON REALTOR | 19

___________Steve Strode, ABR CIPS e-PRO TRC, is a broker with Meadows Group Inc., REALTORS®, in Portland. He is the Advisory Board Chair of the International Business Council, and sits on the FIABCI-USA Board of Directors.

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JULY 13U.S. Immigration Law and Foreign Employeeslawyer’s title (Pearl District)Portland, orwww.oregonrealtors.org

JULY 19Webinar – The MERS Dilemma: Update on Non-Judicial Foreclosures in Oregon9:30-10:30 a.m.www.oregonrealtors.org

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