What’s Making the Phone Ring at the ADRE?
Part 7 of a 2017 interview between Arizona REALTORS® 2017 President Paula Mothofer, First Vice President D. Patrick Lewis and Arizona Department of Real Estate Commissioner Judy Lowe.
Paula Monthofer: Our next question comes from Jeff Tipton. Jeff wants to know if you feel that the current continuing education requirements are sufficient to protect the members of the public.
Judy Lowe: It’s more about quality of the education and planning for the education…choosing just the good courses to take. There’s a new button at AZRE.gov that the licensee can go to and see all of the classes scheduled under each of the categories that they need education.
Paula Monthofer: Making sure that you’re taking the quality classes, like GRI and all the other advanced designation classes.
Patrick Lewis: To take it to another level, this is your business. Treat it as such, be thoughtful about it, schedule those classes and make those the best opportunities for networking and for education.
Judy Lowe: That’s right.
Patrick Lewis: To make you the best at what you do.
Paula Monthofer: I just wholeheartedly agree with you. It’s not whether it’s 24 hours, or the amount of hours, it’s the amount of quality that is in the hours.
Judy Lowe: It’s all about the quality of the online, and the commitment to taking it from the perspective of being able to learn as much as possible through the three hours of seat time that you dedicate to that.
Paula Monthofer: People are wanting better quality from their online classes. All the technology and the capability is there to do what’s happening in the classroom online. I just haven’t seen it to happen at the high level yet.
Judy Lowe: Look at what AAR has done with their remote learning. That’s kind of a crossover.
Paula Monthofer: Right, it’s a hybrid.
Judy Lowe: That’s right. It probably is the next focus that real estate education should move toward — is seeing that, where there is interaction and there are bodies coming together and exchanging and networking and sharing what they’ve learned.
Part 6 of a 2017 interview between Arizona REALTORS® 2017 President Paula Mothofer, First Vice President D. Patrick Lewis and Arizona Department of Real Estate Commissioner Judy Lowe.
Paula Monthofer: Our next question comes from James Adams in Sedona. James is wondering are there any new areas of concern that you’re seeing?
Judy Lowe: We’re all exposed to changing business models as we look around and see unfamiliar actions being taken by either companies or individuals. A changing business model could be Coming Soon, the Coming Soon sign that’s put in a front yard. I like to always point out here that the seller must authorize in writing the placement of a sign that is marketing their property. So, that can be a listing agreement or it could be a standalone agreement, just authorization to place the sign.
If it’s a listing agreement, making sure that the seller understands — full disclosure about the limited marketing that that sign is going to provide them. Sometimes that listing is not put in the MLS. Sometimes that listing is only put on a national website that’s not affiliated with the MLS. Sometimes that listing is not marketed to anyone. Sometimes the listing is marketed only to very small specific groups of individuals.
Paula Monthofer: Oh, that sounds scary.
Judy Lowe: We have to be careful of antitrust there. That you’re not limiting the competitive environment that a listing that’s distributed to everyone can carry with it.
Paula Monthofer: There’s the same concern with the pre-listing groups, which I think, was what you were referring to with the national groups.
Judy Lowe: That’s right.
Patrick Lewis: What we’re talking for our REALTOR® members is to make sure that in the listing agreements that any marketing like that…prior to it going on the MLS…is fully disclosed and seller-directed in writing.
Judy Lowe: Absolutely, because that seller will be the first one that calls the Department when they think they didn’t get the price for their home that they would have gotten if it had the full plethora of marketing.
Part 5 of a 2017 interview between Arizona REALTORS® 2017 President Paula Mothofer, First Vice President D. Patrick Lewis and Arizona Department of Real Estate Commissioner Judy Lowe.
Paula Monthofer: Our next question comes from Annie Barmore. Annie wants to know what are you seeing, recently, in terms of teams and team names?
Judy Lowe: We are seeing team names that could be creating the perception that the team is the employing broker, that the team is the company. If the name of the employing broker is not in the advertising of the team, of course the public thinks that that is who they’re working with as far as the name of a company.
So, when they call our front desk and (we ask), “And who are you working with?” They give you the name of The Smith Group. Well, there are 752 Smiths. How can we help you with that? We come to find out that there is no real estate company called The Smith Group, so it must be a team that is being called The Smith Group — creating in the minds of the public the perception that that is the company.
Paula Monthofer: Are people being really creative with their team names? Are you seeing anything that you’re needing to sanction what they’re coming in with?
Judy Lowe: “Number One Agents in West Valley.”
Paula Monthofer: What?
Judy Lowe: That’s the name of the team.
Paula Monthofer: That’s not going to fly for you?
Judy Lowe: It shouldn’t and I’m hoping that the broker, the designated broker is not authorizing that because it is the designated broker who has to lay down the law.
Part 4 of a 2017 interview between Arizona REALTORS® 2017 President Paula Mothofer, First Vice President D. Patrick Lewis and Arizona Department of Real Estate Commissioner Judy Lowe.
Paula Monthofer: Judy, we’re hearing a lot in our industry about wire fraud . Are you hearing anything about this at the department level?
Judy Lowe: Yes, lots of discussions around that. I’m sure that the Realtor Association is being proactive in that.
Paula Monthofer: We’re working really hard to make sure that members are educated with how they can protect their clients, and also concerned for what the consumers are hearing, what the public is hearing about this.
Judy Lowe: Remembering that when that consumer is receiving calls from so many different individuals in a transaction they could be receiving a call from someone who really isn’t involved in the transaction.
Paula Monthofer: A baseline precautionary measure against wire fraud is making sure that your clients are very clear who is on your team, who they are working with. Not just the members of your team within your real estate office but the members of your team, your affiliates and the partners that you’re working with to get the escrow closed.
Judy Lowe: I’ve watched teams who are actually publishing who their team members are, with a photo of their team member and the name and what role they hold on the team. That’s a proactive step in all of this.
Patrick Lewis: I think it’s also an important way to tie it back also to data security…and passwords. Going back to your point of making sure that we are safeguarding that data for our clients and for ourselves. Because that’s often times how the information becomes compromised.
Judy Lowe: That’s right.
Part 3 of a 2017 interview between Arizona REALTORS® 2017 President Paula Mothofer, First Vice President D. Patrick Lewis and Arizona Department of Real Estate Commissioner Judy Lowe.
Paula Monthofer: Judy and I just left a meeting with a member of the public whose sister was killed working as a real estate agent 21 years ago.
Judy Lowe: She just came in and she wanted us to do something right now about making it a requirement that the Arizona Real Estate licensee must take some safety courses before getting a license and then as part of their continuing education requirement.
Paula Monthofer: What we were able to do is say let’s look at the current regulations. We have a plan to go forward to work together, the Department and the Association of Realtors, to show educators where within the current regulations you can include safety in pre-licensing, and within the current regulations where you can include safety.
The example we’re going forward with is in an agency class. We’re going to be working very closely with the Department to make sure we get that information out, so there’s action we’re taking on it today.
Judy Lowe: If you want to know anything more about agent safety please check out agentsafetyalert.com. You’ll find webinars where you can get tips for how to practice your business not only more professionally but more profitably and more safely for yourself.
Part 2 of a 2017 interview between Arizona REALTORS® 2017 President Paula Mothofer, First Vice President D. Patrick Lewis and Arizona Department of Real Estate Commissioner Judy Lowe.
D. Patrick Lewis: We’re always looking for international opportunities. Obviously, we border two very large countries and having good relations with them is important. I know you’re on the Arizona-Mexico Commission. What can you tell me about that, what is coming out of that commission right now?
Judy Lowe: The Arizona-Mexico Commission is a group (that) encourages and fosters cross-border collaboration between Sonora Mexico, which is our counterpart on the other side of the border, and Arizona.
I co-chair the Real Estate Committee with Mike Hammond, who is a commercial realtor in Arizona. He’s from the private sector. We work with our counterparts in what is known not as the Real Estate Department, but ICRESON [right click to translate], which is the government real estate entity in Sonora.
We work on opportunities for networking and we also interact with the business community in the economic opportunity growth of each of our states.
D. Patrick Lewis: Do you see some exciting things happening with them over the next couple of years?
Judy Lowe We do. In Sonora, up until very recently, the real estate professional didn’t have to have a real estate license. The shoe shine boy on the corner could really sell a beautiful, beach condominium to an American buyer who maybe felt that they were working with a real estate licensee.
We’re putting in place real estate license law in Sonora. The challenges around it are — how do you enforce the requirement when you don’t have a department that has a regulatory arm to it? We’ve been very, very instrumental in working with our Sonoran counterparts in putting that together.
Part 1 of a 2017 interview between Arizona REALTORS® 2017 President Paula Mothofer, First Vice President D. Patrick Lewis and Arizona Department of Real Estate Commissioner Judy Lowe.
Paula Monthofer: What’s making the phones ring?
Judy Lowe: Primarily the consumer not knowing who they’re working with.
The first question that our staff person asks is, “What’s the name of the brokerage that you worked with?” Believe it or not, the caller doesn’t know.
Then we ask, “What about the real estate licensee that you worked with?” Sometimes they say, “I received calls from so many people during that transaction, I had no idea who I was working with.”
We must make sure that all of our marketing, advertising, forms have the name of the company that we’re working with (are) clear and prominent — easily read, and that the consumer knows that whoever is calling them works for maybe this team at this brokerage.
May 17, 2016 Interview Highlights
Part 7 of an interview between Arizona REALTORS® 2016 President Paula Serven, 2016 President-Elect Paula Monthofer and Arizona Department of Real Estate Commissioner Judy Lowe.
Judy Lowe: The challenge as it’s been given legislatively to the Department is to only bring forward bills that will reduce regulation. So, in reviewing we came forward with three or four bills. We only moved one forward and that was to reduce the regulation in statute that requires the designated broker to post all real estate licensees’ licenses on the wall. (S.B. 1193)
There were a couple of HOA bills that were moved forward, and signed off on by the governor, that we had more say-so in because that particular item was going to be on our agenda and our plate to move forward. So, there were two bills, I think, regarding HOAs.
Paula Serven: Is that the bills that Senator Farnsworth…
Judy Lowe: …Farnsworth had and he’s still moving forward to bring back a couple that did not move forward this year, that he’s hoping to move forward next year.
Paula Serven: What lofty goals do you have that you’re looking to really get accomplished?
Judy Lowe: We are looking at partnering more strongly going forward with the industry as a whole.
Sometimes it’s easy for the Department of Real Estate to be perceived that we only work with the residential brokerages and that’s not the way it is. Our customer is the real estate industry – the builders, cemetery, membership campgrounds. Those are our customers.
But who is the individual that we have to bring protection to? And that’s the consumer. Well, we know as a department that we partner with the real estate industry to bring protection to the consumer. So, the more we can partner with the industry, the better we can all bring additional protection to the consumer, the taxpayer who in Arizona pays the taxes that supports all of us.
Paula Serven: So, that will be the continuation of our Industry Partners.
Judy Lowe: That’s right!
Paula Serven: Which is always a bonus because then we all see what goes on in each other’s lives and how we can intermingle and help work out the problems or the challenges that we have, that are facing us daily. That change daily.
Judy Lowe: That’s right. Haven’t you really enjoyed being, sitting in the same room with mortgage and title and all the associations coming together?
Paula Serven: It should have been that way in the beginning, really. Because we are all a team. You know, I was thinking about when you were talking about team – about your team and how it is a team most like any real estate team, or a mortgage team, or an escrow team. And you do have to all work together.
It’s important to know what everybody’s plan is from the entry-level person, all the way to the top to make and achieve the goals for all of our industry.
Part 6 of an interview between Arizona REALTORS® 2016 President-Elect Paula Monthofer and Arizona Department of Real Estate Commissioner Judy Lowe.
Paula Monthofer: I’ve had some friends who’ve had the privilege of serving on the (ADRE) Advisory Board, but I’d love for you to share with our members what that is, what the makeup is and what the purpose is of the Advisory Board.
Judy Lowe: Well, the advisory board is a group, a board of a very diverse group appointed by the governor. The diverse group are seven…10 members…it just went up. It’s 10 members who serve six-year terms in most instances – unless they’re replacing a board member who left their position. So, it’s a six-year term.
It’s a representation from the brokerage community. It’s a representation from the builder community. Representation now from the property management community. And then, the public members.
It’s a group who meet quarterly and they come together and get an overview of what the Department does, get an update on what we do and their charge in the statute is to make recommendations to the Department around issues that are facing the Department.
We have an Advisory Board meeting coming up this week and one of the recommendations that they’ll be getting educated on will be how to encourage the online companies – the Zillows of the world, the REALTOR.coms® of the world to remember that the employing broker’s name, the brokerage name, must be on all advertising.
Any place that the real estate licensing name appears, the employing broker’s name appears. And, you know, those companies are not real estate licensees, so we really don’t have any leverage over them to encourage them to abide by our Arizona State statutes.
So, the board is looking at listening, getting educated and then hopefully coming back and making recommendations.
Paula Monthofer: Nice. And how are the members selected to be on the Advisory Board?
Judy Lowe: There is a Boards & Commissions Board – it’s not an agency of the…
Paula Monthofer: There’s a board that selects the board.
Judy Lowe: That’s right, a board that selects the board…but it’s a board (that) operates either under the governor or the legislature. This particular board operates under the governor.
They post on their website the availability of positions on our advisory board, individual submit applications. They’re all reviewed by the board – the Commissions Board and those recommendations are narrowed down, they’re passed onto the governor. The governor makes the decision and makes the appointment.
Part 5 of an interview between Arizona REALTORS® 2016 President Paula Serven, President-Elect Paula Monthofer and Arizona Department of Real Estate Commissioner Judy Lowe.
Judy Lowe: We all know, especially in real estate, that there is conflict in HOAs – between the owners and their HOA, board of directors or community managers. And the other way around, community managers and elected boards who have challenges with homeowners.
In the past, they have had one avenue that they could go to the Department…we call it “Defibbles” …it’s the Department of Fire, Building and Life Safety (DFBLS)…an owner for instance, could go to that department, pull down an application, fill out the application, send in their application and their check and hopefully some documents. And DFBLS would then review it for a hefty fee.
I think it’s currently $750 for one complaint and up around $2,000 for more than one complaint.
So, when it was decided in the governor’s budget, which he put forward in January, he put forward his budget to the legislature and in his budget, he was doing away with DFBLS as an agency and farming the different pieces of DFBLS out to different agencies…the manufactured housing went to the Department of Housing, the fire marshal went to Forestry and the HOA Conflict Resolution came to the Department of Real Estate.
How’s that going to look for us? It’s not going to be a challenge. The initial formation of it may. We’ll do it just like we do our online licensing for the real estate industry. The applications will come in, there’ll be a checklist of what needs to be included in that – the HOA CC&Rs, all of the evidence that the petitioner…that’s the complainant, the petitioner…will supply to be looked at by the administrative law judge.
We’ll gather that together. We’re hoping that we will make the decision…we’ll be able to offer within the program the decision to the complainant to either go down a road of mediation, or go down a road of complaint resolution that will be binding.
And then, we will package it. We’ll either send it for mediation or send it for the (administrative law) judge, and then it will always come back to the Department (for) the decision to be ratified by the commissioner – just like the real estate licensees decisions.
Paula Serven: You’ll have a stamp of approval at the very end.
Judy Lowe: At the end.
Paula Serven: So, you gather information from both the HOA and the complainant…
Judy Lowe: That’s right.
Paula Serven: And put those together and decide if that’s something that you think can be mediated and would easily, or whether it’s so…
Judy Lowe: Contentious.
Paula Serven: That you think it’s better handled through the judge.
Judy Lowe: That’s right and it will be the complainant’s decision because they will be paying the initial fee. We hoping it’s not going to be quite so…
Paula Serven: That’s what I was just going to ask.
Judy Lowe: Strenuous.
Paula Serven: Is it still going to stay and that same price?
Judy Lowe: I’m hoping not, because one of the roadblocks to the owners…or the HOAs…feeling comfortable in moving forward with this process was the cost.
Related link: Homeowner Association Dispute Process Now With ADRE (2016 Bulletin)
Part 4 of an interview between Arizona REALTORS® 2016 President Paula Serven, President-Elect Paula Monthofer and Arizona Department of Real Estate Commissioner Judy Lowe.
Paula Serven: Talk to us a little bit about what’s going on in the past couple of months with your agency and all the things that you’ve been changing and doing.
Judy Lowe: Let’s start with our governor. Our governor is a business man. His goal is to make government run like a business, at the speed of business. And you know, in some government agencies that’s not the way it has been.
Our governor now is making that a mandate of all agencies: create a culture that runs like a business that is always looking at how can we continuously improve on what we’re doing. How can we do it more efficiently, faster and at a lesser expense…and deliver to our customer and or the consumer a finished product that got to them more rapidly, in a better format, more user friendly with more customer service involved in it.
We took our Development Services application process and looked at – statute allows us 30 days to process an application after it’s in good condition when it comes to us (as) not deficient.
So, we were doing 30 days and rolling along at 30 days, and the governor said (to) think about shortening that, when he took over a year-and-a-half ago. So, we shortened down to 15 days and when we started our Development Services process, he said well, you’ve got to cut that in half.
We are currently at three-and-a-half, I want you to know. From the time that we get it, non-deficient – it can’t be deficient. So, how’re we getting it non-deficient? We have lunch-and-learns with all of our builders.
It’s cut down on the requests for lot reservations. Because remember, they would apply for a lot reservation exemption because they had to wait so long for their public report before they could start selling lots. Now, they don’t have to ask for a lot reservation because they get their public report and they can go right into the sales process, and not have a lot reservation process. So, it’s cut down on our applications. It’s just a win-win all the way around.
Paula Serven: How many public reports have been submitted so far?
Judy Lowe: Year-to-date, we at about 550. Which is a little bit less than it was this same time a year ago.
Paula Serven: Things are moving along a little bit better.
Judy Lowe: That’s right and some of them that we received a year ago are coming out of the ground now, and are being shown and bought by buyers – hopefully, with REALTORS® accompanying those buyers.
So, we’re beginning to see our builder communities really beginning to close some escrows and that’s such a good feeling.
Paula Serven: That is, for all involved. That’s going to keep our work force moving in the right direction and hopefully we’ll gain more jobs because there’ll be more business to be had.
Judy Lowe: That’s right.
Part 3 of an interview between Arizona REALTORS® 2016 President Paula Serven, President-Elect Paula Monthofer and Arizona Department of Real Estate Commissioner Judy Lowe.
Judy Lowe: Well, you know when Michelle Lind (CEO, Arizona REALTORS®) and I put together the advertising guidelines, the biggest challenge was defining Clear & Prominent. In some states, it’s defined as a larger font. In some states, clear and prominent must be larger than the team name and, or the licensee’s name.
In Arizona, we were already so far down the road of not being able to mandate something that wasn’t already a common practice, that we didn’t put any clear cut “larger than” or “larger font.” We’re hoping that the designated brokers would step in and say how large they wanted their company’s name to be…and take a strong position and say, clear and prominent means more distinct. It means stands out, over and above or at least as strong.
I think Michelle and I did say that clear and prominent means…on a website…front-and-center at the top. I can tell you what it’s not. It’s not the logo of the company buried at the bottom right-hand corner and you need a magnifying glass to see it. It’s clear and prominent, front-and-center on the webpage, on every page of the website. So, if you direct a viewer to go into a back page, it’s still clear and prominent up on the top .
It must be the name of the company as the company is licensed at the (ADRE). So, a company logo that does not include the little…tagline, the franchise logo…when it doesn’t include the tagline, is not acceptable. It has to be the legal name as, or the d.b.a. name as they’re licensed at the Department. Clear and prominent.
Part 2 of an interview between Arizona REALTORS® 2016 President Paula Serven, President-Elect Paula Monthofer and Arizona Department of Real Estate Commissioner Judy Lowe.
Paula Serven: When you get complaints that come into the Department, what are the chief complaints?
Judy Lowe: The consumer not knowing the name of the agent that they’re working with because in a team, they interact with some many different individuals…and not to say that’s not alright…but the consumer should always know who they’re working with, who is responsible for the transaction – and of course, we always know it’s the designated broker of the company that is responsible. But sometimes those consumers think that it’s the buyer’s agent, or the escrow agent on the team. They don’t realize that there may be one team leader whose name they need to know, and they really need to know the name of the company and the designated broker. At least the name of the company because our front desk can look up the designated broker if we know the name of the company.
Paula Serven: So, really it’s an educational part on the listing agent, or the team member that is listing the property, to give them the protocol of how to get in touch with…
Judy Lowe: Really, it is. Number one, in advertising it’s making sure that the employing broker’s name is on everything you do. It’s on your purchase agreements, it’s always the name of the company clear and prominent in all marketing that the licensee is doing.
Paula Serven: So, the signage is critical…and anything they’re signing along with their documents is critical…maybe even a sheet that states that the first person in charge is this, but you would call these folks down the line.
Judy Lowe: Great idea. Great idea, Paula. And remembering that the individual that is interacting with the consumer, the team member…number one, they should be licensed if they’re interacting with the consumer. And second, they need to have an identity. If they’re filling out documents, if they’re working with the consumer in filling out either the listing agreement, or the purchase agreement or any of the other documents involved in the sale — their name as the licensed assistant, or licensed team member, must go on every document.
Paula Serven: It’s really going to be critical for teams to educate all of their members that when the phone call comes in, that it needs to go to the person that had listed the property, or the team leader, to be able to answer the questions for it.
Judy Lowe: Yes, and your thought around a checklist – a “who-does-what” in this transaction, could actually feature every one of the team members and show their contact information or the role that they play on the team.
Part 1 of an interview on May 17, 2016 between Arizona REALTORS® 2016 President Paula Serven, President-Elect Paula Monthofer and Arizona Department of Real Estate Commissioner Judy Lowe.
Paula Serven: So, what’s making your phone ring down to the Department?
Judy Lowe: If we look at it, probably property management is still number one…and we’re seeing a decline in the deficiencies in the trust accounts…so, that’s not as big of an issue. We’re still having the challenges around the basic accounting functions. Sometimes there’s deficiencies, but if we clean up the accounting, then there really isn’t a deficiency.
It’s really based around the education…the education of the property managers that AAR has been focused on with their boot camps — their property management boot camps…the education that the audits deliver, even when there are violations on the part of the DBs.
It’s an education process that says, you’ve been doing it this way, that’s a violation. Let’s think about doing it this way, which will make sure that you’re not in violation in the future. So the audit itself is an education process and our auditors are approaching it from that perspective.
Paula Serven: How many licensees do you oversee now at the state?
Judy Lowe: Total, there’s about 79,000…now that’s down from 93,000 when I took over in ’09. And of course, the high was 95,000 in ’08. So, we have seen attrition. We’re not seeing attrition at the fast rate that we were seeing it; we were seeing 750 licensees every month leaving the business. We’re seeing now about 500, 450 to 500 every month leaving the business. But we’re also seeing 450 to 500 coming into the business, brand new, activating their license.
Paula Serven: So, that’s really interesting because I was going to ask you, are these part-time? Do you think they’re fill-in jobs in between…while they’re trying to get their business going?
Judy Lowe: It appears that they’re looking at it as a career, they’re looking at it as a profession.
Paula Monthofer: Have you seen any trend in terms of the age group?
Judy Lowe: The ones that come into the Department to activate their license? Younger. Lots of them just out of college or out of school. Many of them thinking about joining a team and learning the business.
Paula Monthofer: Well, that’s an interesting trend.
Judy Lowe: The team trend is…and you can look at it from the perspective that it could be a really good training ground. We don’t have any post-licensing education requirements other than CE and this could be one way, if we can get the teams to focus in on training, one way of getting those new to the business trained when they’re not joining — maybe a company that has a good strong, licensing education program for post-licensing.