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Latest Realty News from NAR

The Rule of 3: Communicating to Grow Your Business

When you contact clients, make sure to offer something of value in the conversation so they don’t see it as a nuisance call. Content sponsor Firepoint, a real estate CRM company, has released The Rule of 3, a guidebook to help you create a communications strategy focused on increasing leads. Here’s what the company says about the guide:

The Rule of 3 is a communication strategy for new leads. It’s based on the principle of contacting new leads three times a day for three days, three times a week for three weeks, and three times a month for three months. While on the surface it feels like too much communication, it’s a proven approach that many top agents and teams use to drive their businesses. The guide lays out the details to implement this strategy effectively so that prospective clients see the communication as helpful and valuable, and not as a nuisance. This is the key to converting more leads into clients and growing a real estate business.

Get your copy of The Rule of 3.

This is a sponsored content post. REALTOR® Magazine is promoting the book but has not reviewed or endorsed its content.

Big Win for REALTORS® on IRS Guidance for 20% Income Deduction

If you were tuned to the news Aug. 8 you might have heard the IRS released proposed regulations on the new 20 percent business income deduction for pass through businesses.

IRS summary with link to FAQ.

Proposed rules.

The deduction was part of the big tax reform law Congress passed at the end of last year and it was a huge win for REALTORS®. But it was unclear who would be eligible for the deduction. Now that proposed regulations are out, it’s clear the new deduction will be available to a wide range of real estate professionals.

Under the new law, individual owners of sole proprietorships, including independent contractors, and owners of S corporations, LLCs, or partnerships can take the 20 percent deduction on their net qualified (that is, ordinary, non-investment ) business income. The calculation will depend on income thresholds, what type of business you own, and how you meet certain wage and qualified property tests. But the basic structure is very favorable to you as a small business or independent contractor.

REALTORS® were integral to the favorable interpretation in the proposed rules. Your association made a forceful case—both in a detailed letter it sent on June 19 and in a face-to-face meeting with IRS officials in early August—that certain limitations on specified service businesses were not intended by Congress to apply to real estate professionals. And that’s the interpretation the IRS has ended up taking.

As an Aug. 7 Bloomberg News article says, the National Association of REALTORS® “met with OMB (Office of Management and Budget) and Treasury Department officials to discuss proposed rules outlining computation of the new write-off for pass-throughs.”

The new deduction is available for tax years beginning after Dec. 31, 2017. You’ll be able to claim it for the first time on the 2018 federal income tax return you file next year.

Look for detailed NAR guidance by mid-September. It’s a complicated provision and how it works for you will depend on many factors unique to your business structure and your income. As always, consult with your accountant or tax attorney on how this deduction should be applied in your situation.

IRS summary with link to FAQ.

Proposed rules.

NAR tax reform resources.

Are You Competing for a Real Estate Pie That’s Not Growing?

Unemployment is low and the economy is growing—more than 4 percent in the last quarter—but  home sales are actually going down for many real estate agents. The typical agent in the last year worked on 11 transaction sides, down from 12 sides the previous year.

What’s going on? For starters, the inventory crunch is holding markets back. Particularly in the lower price points, there just aren’t many homes for sale. But there are also more agents, at least among those who are REALTORS®. NAR’s membership grew to 1.3 million last year from 1.22 million the previous year. That means more agents are competing for a pie that’s not growing. About a third of NAR members have two or fewer years of experience.

There are plenty of positives coming out of this. For one, the value of home sales is rising, so with each sale, agents stand to make a bit more. NAR estimates that price appreciation is about 5 percent a year nationally. NAR Chief Economist Lawrence Yun would like to see prices ease so they’re more in line with wage increases, maybe around 3 percent. But as long as demand exceeds supply, price pressure will be upward.

Another positive is the increase in younger people coming into the profession. Although the median age of real estate professionals is inching up, from 54 to 55 last year, the profession is nevertheless seeing more young people. And that’s good for the future of real estate.

These and other industry trends are looked at in the latest Voice for Real Estate news video from NAR.

The video looks at the opportunity agents and investors have buying small commercial properties in smaller markets across the United States. For years, the focus has been on big properties in big markets like Chicago and New York, but these markets are now seeing investors pulling back. Still untapped is the opportunity in the bulk of the country, says Hugh Kelly, a commercial real estate analyst who also teaches at Fordham University. “You’re not going to find assets worth $1.5 million or $2 million [that you can compete for in Manhattan],” says Kelly. “You’re going to find them in Fresno, Kansas City, and Louisville.”

Kelly gave a talk to NAR researchers last week on what he’s seeing in commercial markets around the country.

The video also looks at why global investors are pulling back on U.S. home purchases. Last year they invested $121 billion in residential markets here. That’s a big number but it’s 20 percent less than what they invested the previous year. Are homes becoming less attractive to them? NAR Chief Economist Lawrence Yun says there are many factors at play, including a stronger dollar, but it’s also the case that global buyers surged into U.S. residential markets two years ago, and so now were seeing a pullback from that.

Other segments in the video look at the recent extension of federal flood insurance and the upcoming Real Estate Innovation, Opportunity,  and Investment Summit in San Francisco later this month. The flood insurance extension is until the end of November. That gives lawmakers time to see if they can find agreement on much-needed program reforms to make the insurance more financially sound. The iOi summit is NAR’s first formal effort to put tech people and venture capitalists into the same room as real estate executives and brokers so everyone can work together to design products and services and business models that benefit consumers by helping real estate professionals become even more powerful agents on their clients’ behalf.

Access and share the video.






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Sharon Smith
Licensed in The State of Virginia 
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Mack Garmon

Mack Garmon
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Graduate, Realtor Institute GRI 
Accredited Buyers Representative ABR 
Accredited Staging Professional ASP 

Remax All Points
Roanoke, VA 24018

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