coeurdalene

This year’s statistics so far indicate a modest improvement in our overall
real estate market. Although we do not see appreciation in all areas and in
fact, some areas show decline, with only 244 sales of residential properties
reported so far, it is too soon to predict a trend.

For example, we could get really depressed when we see that sales for Coeur
d’Alene and Dalton Gardens are behind last year by 11 percent, but then we
could get excited when we see the average price for that geography is up by
20 percent. These statistics somehow lose their impact when we see that the
11 percent decline in sales only reflects a difference of nine total
residences, or four and a half per month.

Or, take for example the South Kootenai County statistic that shows a
whopping 50 percent increase in sales and a 99 percent increase in average
price! When you have two sales compared to three, it’s easy to see that
there is not a lot of cause to celebrate.

Still, when we look at overall performance in our Multiple Listing Service,
we are encouraged that market activity continues to grow.   Admittedly the
growth is moderate at best, but we are showing consistent improvement when
measured over the past several months. Regular readers will recall that
2011 was the third consecutive year of increased sales numbers since 2008.
At year’s end 2011 we showed a four percent increase from 2010.

This year – it is early yet – we are showing a 10.6% increase in the number
of sales when we include all geographical areas and all types of residential
properties compared to last year. Excluded of course are multi-family
properties. Included are mobile homes, condos, and high end waterfront
properties. When we look at this inclusive category we see that the average
price is still lagging at nine percent below last year. Our median price
however – this means half the homes sold were above and half below – shows a
one percent improvement over the same time last year.

Condominium prices appear to be inching up still with our average condo
price ten percent higher than at this time last year. This could be why the
number of sales this year to date are down from a total of 33 in 2011 to 26
in 2012.

Waterfront property sales are now 70 percent higher – 17 compared to 10 last
year – but the average price so far is 28 percent lower than last year. Not
to panic though, because these properties vary greatly in price and a few
lower priced properties can drag down the averages.

We are gradually absorbing active inventory. Last year at this time we had
a total of 6,041 properties listed in the Coeur d’Alene Multiple Listing
Service. Today we have 5,567. As we continue to absorb inventory we look
for new construction to increase and for prices to stabilize and ultimately
increase.

Interest rates for mortgages of all types are still very low and should
contribute to sustained activity in all market sectors. At least we are
seeing that prices are now making it affordable to own a home and in many
cases folks can buy cheaper than they are renting.

Stay tuned. As the years passes more sales will provide a better picture of
what we can expect from the market.

One doesn’t need to look far to find positive news about the real estate market these days. National and local sales figures continue to improve and buyer competition is increasing over a variety of price ranges. Of course this activity ultimately leads to diminishing inventory, leaving fewer options for those ready buyers.

All these factors indicate a slow, but sure recovery in the housing market, but you would have to look far to find anyone who thinks we will soon, if ever, return to the boom market of the last decade. Still, it appears that interest in home ownership is building, while many cautious buyers wait patiently on the sidelines for just the right bargain. With mortgage interest rates languishing around four percent or less for the last several months and the lack of increases in housing prices, who could blame them for taking their time?

Now there may be a compelling reason to act. Last week the Federal Housing Administration (FHA) announced it will raise the fees for its guaranteed mortgages. More prospective home buyers have been turning to FHA as other lenders tightened their requirements after the real estate market decline in 2008. The agency does not make loans, but insures mortgages that meet its guidelines: people with credit scores of 580 or more can put down as little as 3.5 percent and these insured loans often have less stringent credit requirements. As a result, the number of mortgages backed by the F.H.A. has ballooned, accounting for 40 percent of all new purchase mortgages in 2010, up from 4.5 percent in 2005 according to FHA.

A buyer of a $200,000 home, with a 3.5 percent down payment will have a mortgage of $193,000. After April, they can expect to pay an upfront mortgage premium alone of $3,377, compared to the prior $1,930. Although that can be included in the mortgage it will increase the monthly payment. Borrowers with good credit, like a credit score of 700, who can come up with a slightly larger down payment of 5 percent are likely to pay about $44 a month less with a traditional loan backed by Fannie Mae or Freddie Mac (assuming an interest rate of 3.875 percent).
People who cannot qualify for a conventional loan will still go to FHA, but for people who could qualify for both and can come up with a little more down payment, a conventional loan is going to save them money in the long haul.
Buyers who submit their application with a purchase agreement before March 31 can still get the lower cost loans, even though they won’t be funded until after the April deadline according to Ela Conner, a mortgage loan originator with local Mountain West Bank. Just another compelling reason to get moving.

As I read the obituaries this morning – something I do with greater frequency the older I get – a name jumped out at me. Although we had never formally met, I had been introduced by way of referral to the deceased when he moved out of his home and into assisted living.

At his request I agreed to visit his now vacant home to get an idea of its value. There was an estate sale that coming weekend he stated and I agreed that this was an ideal opportunity to see the home, plus the fact that I have somewhat of an addiction to those types of sales, always in pursuit of the holy grail of collectables.

I arrived at the sale early, which is unusual for me. I noticed the well manicured grounds and the extra amenities added by a prideful homeowner. Once the growing line of estate sale enthusiasts was admitted, I made my way through the home, skipping quickly past the figurines and glassware to the garage and basement areas where one is likely to discover some manly treasures.

As I toured the home I imagined its once grand state and how lovely it must have been when it was new. It had all the latest amenities for the era with Formica counter tops and white kitchen cabinets. The shiny tile finish in the guest bathroom was all the rage at the time of building. I smiled at the yellow bathroom sink and thought, “At least it’s not avocado.”

With my cell phone I captured the key components of the home so that I would remember when I sat down to analyze the current market value. The wood burning fireplace in the basement family room appeared unused, as was the one I remember in my grandmother’s house. I took in the view, imagining what it must have been like before the trees grew up and the pastures filled with homes. It must have been quite the palace in its day.

In its day. That meant everything when I began poring over the recent sales in the neighborhood. Of course, as is true in most neighborhoods, I have to consider the competition from foreclosed properties in the area. To a buyer there is no shame in purchasing a foreclosure and when money is tight, everyone is a bargain hunter.

After thorough study of recent sales I called the gentleman to arrange a meeting. Since he was reluctant to meet, what with his therapy and the activities that allowed him to assimilate so quickly into his new surroundings, he was a very busy man. Out of respect – I have always been taught to respect my elders – and although reluctantly, I told him my opinion of his home’s value. I could tell by the long pause before his response that he was taken aback. Why, just a few years ago, he was offered more than that, he commented. I explained it was a different market now. Things had changed and prices had fallen after the boom, but he disagreed. I went on to explain that, although I did not want to insult him, his home was somewhat dated in décor and there was a lot of competition in the recommended price range. Much of that competition was from newer homes and with more modern amenities than were found in his.

He insisted that he would not consider a price as low as my recommendation. I explained that it would be dishonest of me to take the listing at a higher price, only to come back to him later to reduce the price to where it needed to be to sell it. His position was that the house was just fine and someone would be lucky to have it at his desired price. “I’ll just wait for the market to come back.” he said.

President Ronald Reagan called this quote, “the nine most terrifying words in the English language.”
Last week the Obama administration agreed to a $25 billion settlement with the country’s largest banks over improper foreclosure processes. Much of the complaint results from large banks use and ownership of the MERS system – an electronic recording of liens and mortgage data. This Mortgage Electronic Registration System has dodged legal transaction recordings and accompanying fees charged by counties and has resulted in untraceable chains of title and a lack of revenue, in the millions of dollars, that would ordinarily be paid to record the changes of ownership or lien holders in County records.

One argument, successfully presented in court, is that no-one can prove who holds the mortgage because the liens were never properly recorded. That means that the lien holders have a difficult time proving their right to bring foreclosure action against the property’s owner of record. The settlement then, is an admission of poor record keeping at best, and may allow many homeowners to negotiate a reduction of the amount they owe on their property while avoiding foreclosure.

Those homeowners that borrowed through Fannie Mae and Freddie Mac, however, are not covered under the settlement. It’s unclear how many loans backed by Fannie and Freddie are active, but nearly 60 percent of mortgages nationwide are held by the two agencies. So private banks are held accountable but GSEs (Government Sponsored Enterprises) are not. That seems fair?

FHFA (Federal Housing and Finance Agency) has the authority and the tools to change current loan modification programs to allow for principal forgiveness in addition to principal forbearance. More loan modifications will be achieved if FHFA would allow principal forgiveness, which in turn would work to stabilize our housing market and the economy. Or, let the banks take a hit on the amount you agreed to pay to prevent kicking you out which, on average, will cost them another $60,000.

But wait a minute! Aren’t the same banks who were pressured to give loans to the unqualified now being asked to forgive, or reduce, those loans? Sure, we gave them a ton of money to bail them out of financial distress brought about by those bad mortgages and now we (the government) is demanding they reduce the amounts of those mortgages to give the same, unqualified people a break.

Most of the money, $17 billion, is earmarked for people who are struggling to make their payments, in part by reducing the amount of principal on their mortgages. An additional $3 billion will be spent by the banks to refinance mortgages of homeowners who are current on their payments but owe more than their homes are worth.
“This isn’t just about punishing banks for their irresponsible behavior,” said Housing and Urban Development Secretary Shaun Donovan, “It’s also about requiring them to help the people they harmed by funding efforts to help homeowners stay in their homes.”
People they harmed? Does he mean people that were not able to afford the homes that the Government forced the banks to loan on?
What about the thousands of folks who bought homes at inflated prices that are now biting the bullet, at seven or eight percent interest and still maintaining their payments? Where is their relief? Most likely their relief will come from maintaining their health and living long enough to gain appreciation of their property that has traditionally made real estate a sound investment.
I am sorry, but I resent government interference in free market trade. I believe that leaving the market alone to correct itself is the best course to recovery. Already we have seen an adjustment of real estate prices so that people are beginning to buy these now, more affordable properties, and I think that government intervention interferes with the “supply and demand” economic process. Government intervention will distort property values keeping buyers out of the market by keeping debtors in possession of their homes at the expense of the lenders, pressured into loaning them the money they are unable to repay, regardless whether the loans were properly recorded. I also seriously doubt that the estimated $2,000 reimbursement to those who were “improperly” foreclosed upon will be of much benefit to them.
I do hate to see people foreclosed upon, just like I would hate to see General Motors fail. But isn’t that a basic tenant of “free market”? Survival of the fittest where no-one is too big, or too small to fail? Frankly, I don’t get the welfare mentality of our current environment. Yes, I am compassionate and it breaks my heart to meet with a family who cannot sell their property for what they owe while they are unable to make the payments themselves. But it’s not my fault. I don’t believe that being irresponsible or losing your job gives you the right to “stick it to the man” or to the lender who trusted you to repay what you signed on for, no matter what economy the government has created for you. Like I ask my kids when they complain about how tough life is, “How do you like being a grown up?”

Sure, if the banks are involved in improperly foreclosing, which they are in many cases, then they should be held accountable. This agreement does that, although it doesn’t change much. If you are a homeowner who wishes they hadn’t committed to a mortgage you can’t pay due to your own lack of judgment, then you should be held accountable too and not look to the government (the taxpayers) to undo your error. Remember, the money the government spends is your money first. It only becomes theirs when they tax you (us).

Several weeks ago we suggested, when looking for real estate, you begin with your local Multiple Listing Service instead of the well advertised third party sites. The top reason for our recommendation was accuracy. Often the third party aggregators will have the same address listed more than once with different prices, or different status than is factual.

Now, a San Diego broker, has stopped providing information to these sites. According to the Union Tribune; “A San Diego real estate brokerage has shut off access to its listings to aggregation websites like Zillow and Trulia, igniting a debate over piracy claims, questionable data and open information to potential homebuyers.”

Jim Abbott, Managing Broker and President of Abbott Realty group stated his reasoning: “All listing syndicators have one thing in common.They act as a middleman and put our valuable listing data alongside the contact information of other agents and brokers who rent ad space on their sites … Usually they do this without our permission.”

Abbott’s main argument is that third-party websites (he calls them all syndicators) take what he calls intellectual property such as photos and home details from companies without compensating the sources, comparing Trulia and Zillow to the original file-sharing service Napster. He also takes issue with inaccurate and unreliable information displayed on the sites, from wrong square footage to incorrect pricing. Third-party sites also tend to show listings that are actually no longer active. “This is about the long-term survival for all brokers,” Abbott told the U-T San Diego on Monday. “You cannot keep giving away what amounts to be your future business.”

This move follows a similar move by Edina real estate of Maine who announced last year that they would be pulling all their listings from these sites and Realtor.com as well. These actions have sparked debate among real estate agents, many who argue that. “more exposure is good exposure, even if it’s inaccurate.”

Certainly, as your listing agent, our job is to expose your listing to as many prospective buyers as possible. No-one can argue that the third party sites mentioned have tremendous traffic nationally and may indeed reach buyers from outside the area. So too, do most local brokers have websites that reach out of market buyers, but their information is provided directly by a feed from the local MLS.

As mentioned in an earlier article, buyers can become frustrated with these national sites who rely on agents to update their data. If an agent is using three, thirty, or three hundred websites to advertise your property, it becomes quite likely that they will neglect to mark a listing as “sold” on a particular site. Sellers however are usually grateful for, in fact they expect, maximum internet exposure for their listings.

Abbott’s contention with these sites, more than inaccuracy, seems to be the lack of control. He observes that buyers responding to a listing may contact the agent paying to be featured on the site rather than the listing agent. Rather than controlling listing data then, it appears he wants to control both the buyers and the sellers of the listings at his brokerage.

Yes, there is something irritating about buying an agent listing on a site that is selling your own information. Consumers drive the market no matter what the product and real estate is no different. If consumers have chosen Zillow, Trulia and Realtor.com as their “go to” sites for real esate searches, do you really not want your property listed there?

A good strategy, it seems, if you are one using the aforementioned sites, is to double check the listing with the local MLS. This can be done through the MLS’s own website or by way of access to any local broker’s site. Although not immune to error, the data at the local MLS is more likely to be up to date so you will not waste time fantasizing about owning a property that is already sold, or dismissing a property as out of your price range, when in fact the price has recently been reduced.

We all know that there are many distressed properties available at discounts in today’s real estate market. Yet, even though these properties are usually offered at bargain prices in hopes they will move quickly, many prospective buyers have a mis-conception about their true market value.

I don’t know if it’s the late night infomercials, the headlines from other markets, or just a garage sale mentality that prompts some shoppers to expect to buy property for pennies on the dollar, but this rarely happens. If you are intersted in buying at a discount, then foreclosures and short sales are likely places to look. The perception is that these properties will sell for far less than similar properties which are not distressed. That may be the case, but because there are other likely other costs involved.

Many times, when people are unable to make their mortgage payments, they are also unable to afford common maintenance or minor repairs. Depending on how long an owner has been in financial distress, these deferred maintenance items can add up quickly, which ultimately drives up the cost of the property. Most creditors consider these repairs when adjusting the prices to put these properties on the market.

When a piece of real estate goes into foreclosure the creditor who owns the lien wants to know the true vaue of the property before going to market. These creditors understand, as do most prospective buyers, that the real estate market values are not what they were just a few years ago. In order to determine a fair market value, these creditors will usually order an appraisal. The appraiser then, will look for similar properties that have recently sold and base their appraisal on comparable sales.

Depending on the creditor, they will usually list the property with a real estate broker at something less than the appraised price to compel a faster sale. Although it is in the creditor’s interest – since they make money loaning money, not by holding real estate – to move the property quickly, most are not willing to accept forty or sixty percent of the asking price. Yet, I have seen recently offers at those levels.

I can only surmise that the people who are making these offers stay up too late watching foreclosure infomercials that tout their “Buy Foreclosures” courses. These infomercials make it sound easy – and cheap – to find your fortune in real estate. I am sure many people only watch the infomercials, never buying the books or CD programs to learn the entire process, relying instead on the sales pitch to educate them.

It is true, that in other markets, harder hit than ours, people have found tremendous bargains on distressed properties. Who hasn’t heard of someone buying a large house in Phoenix for half what it was worth five years age? The untold factors in these sales though, require some intelligent thought.
First to consider is how many other distressed properties are creditors competing with? If there are thousands of foreclosed properties sitting vacant, rather than a couple of hundred, the prices are going to have to be lower than the competition to attract a buyer. And more competition means lower starting prices. An appraiser will let them know what that price is.

In many cases in some larger, harder hit markets, those prices are forty cents on the dollar – compared to what the home cost five years ago, not forty percent of the current market value. Common sense would indicate that no lender would be foolish enough to overprice a property by pricing it at sixty percent more than its current value and hope to compete. Remember, banks particularly are expected to have cash reserves as mandated by the Feds and holding overpriced real estate is not a good way to accomplish that.

In most cases you should treat a foreclosed property much as you would any other property when making an offer. It is human nature to offer less and that is acceptable to test the waters. Just understand that the property is probably already priced below market if it’s a foreclosure and that offering too low a price is more likely to get your offer rejected than it is to get you a bargain. It’s OK to start low and then negotiate a reasonable discount on the asking price of anything, but if your offer is insulting, or even ridiculous, you are wasting your time and the time of everyone involved. To believe differently is setting yourself up for a big letdown.

After Tuesday’s State of the Union speech by President Obama, National Association of Realtors® President Moe Veissi provided some commentary:

“The National Association of Realtors® commends President Obama for his remarks in support of homeowners and the struggling housing market during tonight’s State of the Union address. As leading advocates for home ownership, Realtors® know that restoring the health of the housing market is the only way to achieve a broader economic recovery.

“Realtors® stand ready to help Congress and the administration implement Obama’s proposal to significantly reduce monthly mortgage payments by streamlining the refinancing process.

But beyond that, we must make housing a national public policy priority. Realtors® believe that more must be done to stem the rising inventory of foreclosed homes and address the lack of available and affordable mortgage financing, which is inhibiting a meaningful housing market recovery.

“Our families, communities, the housing market and economy all suffer when people lose their home to foreclosure. Realtors® are calling upon the Obama administration, Congress and lenders to help keep more people in their homes by taking more aggressive steps to modify loans and help homeowners significantly reduce their monthly mortgage payments.

“Realtors® also urge the government and lenders to streamline the often time-consuming and inefficient short sales process and to quickly approve reasonable offers when a family is absolutely unable keep their home. Keeping people in their homes and reducing foreclosures will help minimize the negative impact of distressed properties on home values and neighborhoods.

“Expanding financing opportunities could also help reduce excess inventories of distressed properties. Increased fees and higher down payments are making it harder for many creditworthy home buyers and investors to obtain financing, thwarting the sale of distressed properties and prolonging the impact those homes have on local markets.”

“While we are beginning to see early signs of stabilization in the housing market, NAR calls on Congress and the Obama administration to come together and make housing a priority issue. In this vein, we urge the White House to host a national housing summit to encourage a broad discussion among stakeholders to help formulate and advance policies that move the country toward a real housing and economic recovery.”

Signs of stabilization were reinforced by the Department of Housing and Urban Development (HUD) who determined that homes are now more affordable than at any time since 1971. Although it is true that prices and interest rates are significantly lower than during the run-up in the heart of the last decade, many are finding it difficult to meet stricter lending requirements. Veissi’s offer of the NAR’s assistance should include an examination of lender’s practices in addressing refinancing those mortgages written at much higher rates than today’s. Many homeowners whose loans were not sold to Fannie or Freddie, both Government Sponsored Enterprises, still find it difficult, if not impossible to re-finance their homes that may have declined in value. Even though many have demonstrated reliability by making regular payments at a higher rate of interest, there is an argument that relief, in the form of lower interest and a lower monthly payment, would free up some capital to stimulate the economy, albeit at the cost of narrower profits on those loans.

Even those with Freddie and Fannie loans are facing challenges with refinancing. To date, only 910,000 homeowners have received permanent loan modification through the Home Affordable Modification Program (HAMP). This number is significantly lower than the administration’s stated goal of five million. Recently, perhaps because we are nearing an election, more applicants for assistance under this program are receiving help with eighty three percent of qualified applicants receiving some form of modification since June. The average wait for approval is about three and a half months for those who qualify.

For those who do not qualify for HAMP, there may still be help, or HOPE as it is called. This program is offered by The Homeownership Preservation Foundation, a group of not for profits that works with challenged homeowners to negotiate with their lien holder, provide budget counseling, and guidance for sustainable home ownership – for free. If you need help you can reach them by calling 888-995-HOPE.

If you do not own a home and would like to, according to HUD there’s not been a better time since 1971. Even though lending requirements are stringent, people are qualifying every day.

Home Affordability Reaches 1971 Level.

A lady called last week and wondered if it might be time to move up into a larger, nicer home. Of course the answer is not one that can be shot from the hip. Rather it takes a great deal of analysis of the person’s current situation before giving an intelligent answer. If you are pondering a similar shift, moving up, moving down or moving on, here are some things for you to consider.

What do you want different about your home? The lady who called was considering a larger home. Many think that more square footage will answer their flow problems but often, a larger home may not be the right answer. When looking for the perfect abode, take some time to study your family’s lifestyle. When is the most competition for the bathroom? Will adding another bathroom be the answer, even if it is on another floor? It could be that the extra bathroom will not be used as much as you think, especially if it requires a long commute too far away from the fresh towels and the change of clothes one wants to slip into after their shower. A poor floor plan in a large house is still a poor floor plan. If it doesn’t flow to fit you, size doesn’t matter.

How about that extra room for guests? Ask yourself how often you get visitors to determine if it’s worth the extra expense – not just in the price of the home, but the additional furniture, linens and decor. Don’t forget to factor in the extra cleaning and dusting that will still need to be done, whether someone uses the room or not. Maybe, instead of an extra room, you can kick one of the kids out onto the couch for a couple of nights a few times a year.

On the other hand, if the extra room is for a more permanent guest, like a family member in need of assistance, then the extra room isn’t really extra, but a necessity as is another bathroom and maybe a kitchen.

What about your mortgage? Will moving into another house raise or lower your monthly payment? If you move down to a smaller house that is much newer and better appointed than your old house, you might increase your payment. On the other hand, if you have significant equity in your existing house that you want to use for the new house, your payment could be very affordable, even significantly lower than your current payment at today’s low interest rates.

Even if you are moving into a much larger home your payments could be less than your are paying now. Homes are more affordable now than in recent years and with interest rates at less than four percent, your payment could shrink quickly. For example, if you bought your home in 2000 and paid $200,000 for it, your payment at the going rate of eight percent with twenty percent down would be $1,174/month before taxes and insurance. That $200,000 might well buy you a newer, larger house today, but your payment would only be $745/month before taxes and insurance at the low rate of 3.8 percent on a thirty year note. At these low rates, with the same twenty percent down payment you could actually buy a $300,000 home and pay less than your $200,000 loan in 2000 by about sixty bucks a month.

The point is that, if you can pay off an eight percent mortgage by selling your house now and buy another home at half the interest rate, you could increase the cost of the home you are buying by roughly a third without raising your payment. So, in that event at least, it makes a heck of a lot of sense to move up now.

Many people are likely to benefit from changing homes in the current market. Not just because of the lowest interest rates in history, but because prices are down now too. This is not only true for homes, but for investment properties, commercial buildings and even bare land. Interest rates are lower than ever and although financing is admittedly more challenging to get, it may well be worth the time and effort to lock in a low interest rate to buy a bargain priced property. You will enjoy the low interst rate long after others have forgotten.

Once again, the Idaho Legislature is considering adding a tax to real estate transactions in the state. The bill, sponsored by Democrat Shirley Ringo of Moscow and supported by Thomas Trail a Republican from the same city will add a tax to many services, including the sales commission paid to Realtors.

The bill recommends that a sales tax be levied on services, excepting medical or healthcare as follows: “In determining what is a service, the intended use, principal objective or ultimate objective of the contracting parties shall not be controlling. The term “services” also includes the constructing, repairing, decorating or improving of new or existing buildings or other structures under, upon or above real property, including the installing or attaching of any article of tangible personal property therein or thereto, whether or not such personal property becomes a part of the realty by virtue of installation, and shall also include the clearing of land and the moving of earth.” So for builders at least, this means paying a sales tax for the lot preparation needed to start building and on everything that goes into the building process.

These new taxes are touted as a way to reduce the overall sales tax rate in Idaho to five percent. By lowering the tax on normal retail purchases the sponsor hopes to raise additional revenue, almost $400,000,000, by taxing non-traditional services. As with any tax, this will be passed along to consumers.

Imagine listing your property at a higher rate because the real estate broker has increased their cost of doing business by five percent. You may have to ask for a higher price to cover this new fee which will either price you above the market or cause you to net less at closing. Since it will affect all properties alike, it stands to reason that buyers will ultimately bear the increase.

This isn’t the first time we have seen such attempts by State legislators to seek filling the coffers with taxes on services. Historically though, the legislation has been defeated due in no small part to the Realtor members of our state. Our Realtor Action Committee collects voluntary contributions from our members just for occasions like this.

On a local level, a mere thirty dollars is requested from each Realtor member as a part of their annual dues. Those funds are then used to fight issues that infringe upon private property rights, including the right to freely exchange real property. Other services are also covered under this bill but the brunt of the language seems to address real estate. Our Idaho Association of Realtors has made the following observations about this tax as it affects our industry:

• Closing costs would increase to an average of $2,257.
• The Attorney General has issued an opinion that the proposal may require the tax to be charged on the selling price of a newly constructed home ($150,00 + 5% = $157,500)
• The real estate economy is slowly improving.
• The Idaho Legislature can help by providing incentives for job creation and avoiding pitfalls of a sales tax on services.

Our Idaho Association of Realtors has already sprung into action to protest this bill. Last year’s contributions to our PAC were less than normal, reflecting a more difficult real estate market. Those funds are needed to fight this battle and other threats to our industry and your free trade rights to your property.

Be sure to ask your Realtor if they have contributed to RPAC. If they haven’t, ask them why.