How a Septic System Works
Septic systems are designed to hold, treat and disperse household wastewater. Household wastewater contains bacteria, viruses, household chemicals and excess nutrients such as nitrates. All of these contaminants can cause health-related illnesses if not treated properly.

Septic systems have two major parts: a septic tank and a soil treatment area. Wastewater from toilets, sinks, showers and other drains flows from the household sewer drain to an underground septic tank. Waste components then separate with the heavy solids settling on the bottom, forming a sludge layer. The grease and fatty solids float to the top, forming a scum layer. Normal bacterial action in the tank will partially decompose the solids.

With normal use, solids will build up in the tank and must be removed periodically by a professional contractor. The relatively clear layer of wastewater in the middle is called effluent. Effluent flows from the septic tank outlet to the soil where most of the treatment process occurs.

The soil treatment area, also known as the drainfield or leach field, consists of gravel-filled trenches containing plastic chambers or perforated plastic pipe. This underground portion of the system accepts effluent from the septic tank outlet. Effluent moves through the pipes and seeps into surrounding soil for final treatment. Soil particles filter out small suspended solids and organic matter, while soil bacteria break down potentially harmful microorganisms and other organic components. Most viruses adhere to clay particles in the soil and eventually die. The now treated effluent continues its flow through the soil layers.

A properly designed, installed and maintained septic system should protect the environment and provide your clients many years of good service.

10 Things that Realtors® Should Know About Septic Systems

1. Do you know the difference between a conventional and alternative system in Arizona? Arizona defines a conventional septic system as one that has a septic tank followed by a trench, bed, chamber or seepage pit. An alternative system is anything else.
2. Did you know that using a cesspool as the property’s wastewater system is illegal in Arizona? Cesspools take the property’s wastewater and deliver it to a hole in the ground. These systems have been illegal since the 1970s.
3. Did you know that your septic system is supposed to treat and disperse the sewage from the property (not just make it “go away”)? A well-functioning septic system will prepare the property’s sewage so that the effluent is safe for people and the environment.
4. Did you know that your septic system works much like your body in the way it treats and disposes of wastes? If you shouldn’t put it in your body, then you probably shouldn’t send it down the drain to your septic system. You can actually make your septic system sick or kill it.
5. Did you know that a septic system is truly a system and not just a tank in the ground? The soil treatment portion of the system is critical to the life of the system. If it has been built on, covered over (including improper landscaping) or disturbed, it will not treat the sewage properly, and the system will probably not last long.
6. Did you know that septic systems have a limited life span? The usual design life of a septic system is 20 years. With careful management and care of the system, it can last much longer. But if the septic system has been overloaded or otherwise abused, then the system might not last its full design life.
7. Do you know two of the most common causes of failure for a septic system? 1) Using too much water; and 2) Not checking the septic tank for solids and scum. Using too much water can disrupt the septic tank settling and push solids into the soil treatment area, clogging the soil pores. A septic tank should be checked for the level of solids and scum in the tank. It is not necessary (and it’s expensive) to pump a tank that does not have an excessive build up of solids and scum layers, BUT it’s equally as bad to not pump out a tank that is becoming too full.
8. Did you know that a malfunctioning septic system can pollute the groundwater and adversely affect the public health and that of the environment?
9. Did you know that septic tanks are not supposed to leak? Since 2005, wastewater tanks, including septic tanks, are supposed to be watertight. Many older tanks leak untreated sewage into the environment. This can be caused by many things such as cement deterioration, cracks caused by settling, being driven over or rotting of fiberglass or steel tanks. When you look into a septic tank, it should have liquid right up to the outlet pipes. Effluent below the outlet pipe could mean that the septic tank needs to be inspected for leaks.
10. Did you know that all conventional and alternative septic systems are required to be inspected when a property is sold? The only exception is for systems that are new and have not been used yet.

REALTORS® are a primary source of information for the buyer and seller. This article is intended to help you inform your client. For more information on household septic systems, visit the Arizona Extension publications web page.

Thanks to Dave Bartholomew, Jonathan Catlin, Brian Chiordi, Jake Garrett and Randy Phillips for their contributions to this article.

RELATED AAR FORM

Onsite Wastewater Treatment Facility Addendum 
This discloses to the buyer that an onsite wastewater treatment facility exists on the property and outlines what information the buyer will receive from the seller and in what timeframe. (Last revised 10/06)

NAR’s 2012 Investment and Vacation Home Buyers Survey, covering existing- and new-home transactions in 2011, shows investment-home sales surged an extraordinary 64.5 percent to 1.23 million last year from 749,000 in 2010. Vacation-home sales rose 7.0 percent to 502,000 in 2011 from 469,000 in 2010. Owner-occupied purchases fell 15.5 percent to 2.78 million.

Vacation-home sales accounted for 11 percent of all transactions last year, up from 10 percent in 2010, while the portion of investment sales jumped to 27 percent in 2011 from 17 percent in 2010.

NAR Chief Economist Lawrence Yun said investors with cash took advantage of market conditions in 2011. “During the past year investors have been swooping into the market to take advantage of bargain home prices,” he said. “Rising rental income easily beat cash sitting in banks as an added inducement. In addition, 41 percent of investment buyers purchased more than one property.”

Yun said the shift in investment buyer patterns in 2011 shows the market, for the large part, is able to absorb foreclosures hitting the market. “Small-time investors are helping the market heal since REO (bank real estate owned) inventory is not lingering for an extended period. Any government program to sell REO inventory in bulk to large institutional companies should be limited to small geographic areas. Even where alternatives are needed, it’s best to rely on the expertise of local businesses, nonprofit organizations and government,” he said.

All-cash purchases have become fairly common in the investment- and vacation-home market during recent years: 49 percent of investment buyers paid cash in 2011, as did 42 percent of vacation-home buyers. Half of all investment home purchases in 2011 were distressed homes, as were 39 percent of vacation homes.

“Clearly we’re looking at investors with financial resources who see real estate as a good investment and who aren’t hesitant to use cash,” Yun said. Of buyers who financed their purchase with a mortgage, large downpayments were typical. The median downpayment for both investment- and vacation-home buyers in 2011 was 27 percent.

“Given the tight credit in recent years, many would-be normal home buyers for owner occupancy declined,” Yun said.

The median investment-home price was $100,000 in 2011, up 6.4 percent from $94,000 in 2010, while the median vacation-home price was $121,300, down 19.1 percent from $150,000 in 2010.

Investment-home buyers in 2011 had a median age of 50, earned $86,100 and bought a home that was relatively close to their primary residence – a median distance of 25 miles, although 30 percent were more than 100 miles away.

“The share of investment buyers who flipped property remained low in 2011, and many of those homes likely were renovated before reselling,” Yun said. Five percent of homes purchased by investment buyers last year have already been resold, up from 2 percent in 2010. The typical investment buyer plans to hold the property for a median of 5 years, down from 10 years for buyers in 2010.

The typical vacation-home buyer was 50 years old, had a median household income of $88,600 and purchased a property that was a median distance of 305 miles from the primary residence; 35 percent of vacation homes were within 100 miles and 37 percent were more than 500 miles. Buyers plan to own their recreational property for a median of 10 years.

Lifestyle factors have consistently been the primary motivation for vacation-home buyers, while the desire for rental income drives investment purchases. Vacation homes purchased last year were more likely to be in suburban or rural areas; investment homes were concentrated in suburban locations.

Eighty-two percent of vacation-home buyers said the primary reason for buying was to use the property themselves for vacations, or as a family retreat. Thirty percent plan to use the property as a primary residence in the future, and only 22 percent plan to rent to others.

Half of investment buyers said they purchased primarily to generate rental income, and 34 percent wanted to diversify their investments or saw a good investment opportunity.

Sixteen percent of vacation buyers and 14 percent of investment buyers purchased the property for a family member, friend or relative to use. In many cases the home is intended for a son or daughter to use while attending school.

Forty-two percent of vacation homes purchased last year were in the South, 30 percent in the West, 15 percent in the Northeast and 12 percent in the Midwest; 1 percent were located outside of the U.S.

Forty-four percent of investment properties were in the South, 23 percent in the West, 17 percent in the Midwest and 15 percent in the Northeast.

Eight out of 10 second-home buyers said it was a good time to buy. Nearly half of investment buyers said they were likely to purchase another property within two years, as did one-third of vacation-home buyers.

Currently, 42.1 million people in the U.S. are ages 50-59 – a group that has dominated second-home sales since the middle part of the past decade and established records. An additional 43.5 million people are 40-49 years old, while another 40.2 million are 30-39.

“Given that the number of people who are in their 40s is somewhat larger than the 50-somethings, the long-term demographic demand for purchasing vacation homes is favorable because these younger households are likely to enter the market as their desire for these kinds of properties grows, and individual circumstances allow,” Yun said.

NAR’s analysis of U.S. Census Bureau data shows there are 8.0 million vacation homes and 42.8 million investment units in the U.S., compared with 75.3 million owner-occupied homes.

NAR’s 2012 Investment and Vacation Home Buyers Survey, conducted in March 2012, includes answers from 2,241 usable responses about home purchases during 2011. The survey controlled for age and income, based on information from the larger 2011 NAR Profile of Home Buyers and Sellers, to limit any biases in the characteristics of respondents.

The 2012 Investment and Vacation Home Buyers Survey can be ordered by calling 800-874-6500 or online. The report costs $19.95 for NAR members and $149.95 for non-members.

This news release was published by the National Association of Realtors® (NAR) on March 29, 2012. “The Voice for Real Estate,” NAR is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries. Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. Statistical data, tables and surveys also may be found by clicking on Research.

*Vacation homes are recreational property purchased primarily for the buyer’s (or their family’s) personal use, while investment homes are residential property purchased primarily to rent to others, or to hold for other financial or investment purposes.

RESORT & SECOND-HOME MARKETS (RSPS) COURSES SCHEDULED IN BULLHEAD, LAKESIDE & PHOENIX

Wednesday, May 23 | Bullhead City | Class Flyer
OR
Tuesday, June 12 | Lakeside | Class Flyer
OR
Thursday, June 14 | AAR Classroom (Phoenix) | Class Flyer

$79 (includes lunch) |Register Online

Be a part of this exciting opportunity to learn about the resort area and second-home specialty. This one-day course focuses on the essentials of assisting customers in tourist-driven areas. You’ll learn to:

- Develop a second-home clientele
- Identify real estate niches in your market
- Understand 1031 exchanges and how to use them in your marketing
- Recognize how the market shift has impacted luxury & second-home buyers

This is one of the core requirements for NAR’s RSPS certification and fulfills the elective course for the ABR designation.

Trainer: Holly Mabery, ABR, GRI
C/E: 6-general

With the increased number of foreclosures experienced in Arizona over the last several years, the Arizona Court of Appeals continues to issue significant decisions addressing previously unresolved questions pertaining to the protections afforded by Arizona’s anti-deficiency statutes.  This trend continued on March 20, 2012 with the court’s published opinion in Helvetica Servicing, Inc. v. Pasquan, 1 CA-CV 10-0418.

In Pasquan, the Court of Appeals addressed three significant legal questions pertaining to Helvetica’s judicial foreclosure of the Pasquans’ Paradise Valley home, which was secured by a loan with Helvetica in the principal amount of $3,657,793.30.  Specifically at issue was Helvetica’s right to a deficiency judgment against the Pasquans in the approximate amount of $3,200,000.00 following Helvetica’s purchase of the property at a sheriff’s sale pursuant to a $400,000.00 credit bid.

In an effort to determine the Pasquans’ alleged deficiency liability, the Court of Appeals first addressed the issue of whether a purchase money loan loses its purchase money distinction and thus its deficiency protection following a refinance.  Upholding its previous decision in Bank One v. Beauvais, 188 Ariz. 245, 934 P.2d 809 (App. 1997), the court held that a refinance in and of itself does not destroy the loan’s purchase money status, stating that “A change in the lender’s identity does not, standing alone, alter the nature of the underlying purchase money debt.”  Accordingly, refinancing a purchase money loan with a new lender does not cause the borrower to forfeit their anti-deficiency protection.

The second issue addressed by the Court of Appeals is whether a construction loan qualifies as purchase money in nature, and is thereby eligible for anti-deficiency protection.  This issue is not directly addressed by Arizona’s anti-deficiency statues because the borrowed funds on a construction loan are not used simply to purchase a qualifying residential property.  Rather, construction loans are typically used in part to purchase raw land and in part to pay for the services performed by contractors.  Although property improvement loans do not constitute purchase money obligations, the Court of Appeals in Pasquanruled that “a construction loan qualifies as a purchase money obligation if: (1) the deed of trust securing the loan covers the land and the dwelling constructed thereon; and (2) the loan proceeds were in fact used to construct a residence that meets the size and use requirements set forth in A.R.S. § 33-729(A)” i.e. – a single one-family or single two-family dwelling on less than two and one-half acres.

Finally, the Court in Pasquan addressed “cash-out” refinances and examined whether a lender is entitled to a deficiency judgment following the foreclosure of a loan where only a portion of the borrowed funds constitute purchase money.  While lenders have long argued that the entire deficiency is a recourse obligation on blended loans of this nature, borrowers have asserted that the entire loan receives the protection afforded by Arizona’s anti-deficiency statutes.  In what appears to be a well-reasoned compromise, the Court of Appeals very simply held that the purchase money portion of the loan is eligible for anti-deficiency protection while the cash-out portion is not.

In explaining its rationale, the Court expressed that on the one hand, “it appears unnecessarily punitive and contrary to the consumer-protection goals of Arizona’s legislature to convert an entire obligation into a recourse loan simply because it happens to include non-purchase money sums.”  Alternatively, “it seems similarly inappropriate to shield borrowers from deficiencies for loan disbursements unrelated to the acquisition or construction of a qualifying residence.”   Following a foreclosure, the lender may therefore seek to recover a deficiency judgment only on the non-purchase money portion of the loan.  However, in order to obtain such a judgment, the lender must first trace and segregate the non-purchase money funds.

While the decision in Pasquan may be appealed to Arizona’s Supreme Court, for now the case provides further clarification of Arizona’s evolving anti-deficiency statutes and their application to construction loans and “cash-out” refinances.

Put a few real estate agents together in a room, and they’ll tell war stories that will make you alternately laugh and cry. A recurring theme tends to emerge: In the last few years, the agents say, common courtesy has gone out the window.

At the end of the day, we all want to close deals and make our clients happy. But it’s the middle of the day where things get hairy. Herewith, a few common problems and suggestions that just might help you make it to the closing table.

Communication Breakdowns | Lack of Transparency | MLS Issues | Lockbox Etiquette | Bad Behavior

WHEN & HOW TO ESCALATE AN ISSUE

You’ve done your best. You’ve been patient. You’ve given the other agent the benefit of the doubt and a few extra chances. Now it’s time to get serious.

Brokers. “Anytime there’s a situation that has escalated to more than one phone call, your broker probably needs to be aware of it,” says Bergamini. “Your broker is there to protect your license, their license and your client. The sooner they get wind of it the better.” Occassionally, a broker-to-broker call can clear up an issue quite effectively.

MLS. Some situations can be handled agent-to-agent, but egregious problems should definitely be reported. Most MLSs make it easy to report violations anonymously. For something like unauthorized lockbox access, it’s a good idea to provide as much detail as possible: lockbox number, MLS number, a statement from the seller and a police report, if appropriate.

Ethics. If you are dealing with an agent or broker who is a REALTOR® (that is, a member of a REALTOR® association), they are bound by NAR’s Code of Ethics. If you feel that an article of the code has been willfully violated, consider mediation or an ethics complaint. Thedisputes section of AAR’s website covers the processes involved. Or you can give AAR’s professional standards department a call at 602-248-7787.

Department of Real Estate.ADRE responds to consumer investigation requests about licensees who may have violated real estate law or the Commissioner’s Rules. Learn more about theInvestigations Division.

“Some practices just need to be stopped, but unless they are reported, the Department of Real Estate and AAR can’t do anything about them,” advises Judy Osmanski with Ken Meade Realty, Inc. in Sun City. “Step up to the plate and report a violation.”

Communication Breakdowns

- Listing agent’s voicemail is full.                
- Buyer agent calls incessantly.

With today’s low inventories, listing agents are bombarded with calls, texts and emails from desperate buyer agents trying to get a foot in the door for their clients. It’s easy to see why both sides end up frustrated. Everyone involved needs to remember that there are real people on the other end of the communication.

“I just ran into an old favorite: ‘Call lister to arrange showing. Do not email, must call,’” reports Dane Briggs, ABR, GRI with Firebird Realty in Phoenix. “So when you call, it goes straight to voicemail, and the mailbox is full so you can’t leave a message.”

Listing agents who are drowning in incoming messages might consider hiring an assistant or working with an answering service. “If you can’t control that portion of your business, hire staff and arm them with the right information,” suggestsBrad Bergamini, GRI with Realty Executives Northern Arizona in Prescott. If you can’t justify the expense, consider other ways to manage the influx. “I have Google Voice for my voicemail, which emails me a transcription of the voicemail, so I read all my messages and have no limit on my mailbox,” explains Briggs.

On the buyer’s side, persistent stalking of the listing agent could net you a call-back—or it could turn the agent against you. Prepare your buyers early for the realities of today’s market. No response is common, and it often just means no. Decide what you consider a reasonable amount of “touches” and stop there. And be sure to review the MLS before you reach out.

While Bergamini is generally a listing agent, he does work with the occasional buyer and is in constant contact with his buyer agents. This helps him remember to see the transaction from their side as well. “If you can put yourself into the seller’s (or buyer’s) shoes, you will see more deals closed and have happier clients,” he says.

Bottom Line: Remember the Golden Rule. Treat others as you want to be treated.

Lack of Transparency

- Listing agent doesn’t acknowledge offers.
- Buyer agent doesn’t disclose that buyer hasn’t seen the property.

If you’re listing well-priced homes in today’s market, you are likely to encounter multiple offers—and frustrated buyer agents. Knowing this, you might choose to set some ground rules right away. For example, provide specific time periods when the home will be available for showings and announce a deadline for the first review of offers. This way, the other side knows whether they still have a chance.

Draft a simple acknowledgement that you can copy and paste in reply to all offers received. “Even if it’s a simple ‘Thank you for the offer, I’ll let you know as soon as I hear from the bank’ or ‘My seller is reviewing all offers this weekend, and I’ll let you know by Sunday,’” says Leah Wolfe-Kraemer, GRI of Welcome Home Realty in Avondale. “Your clients aren’t the only ones who deserve reasonable service and common courtesy.”

If buyer agents expect listing agents to be transparent about the process, they should consider returning the favor. “If your client put offers in on ten short sales and just closed one, don’t leave us hanging out there thinking the buyer is still around while we are negotiating their offer,” suggests Briggs.

If you’re making an offer on a home your client has not yet seen, is it because you’ve counseled your buyer that they can always bow out during the inspection period? Or is it because you’re working with an investor that trusts you to preview the home for them? Let the listing agent know so that they can appropriately evaluate your offer.

Of course, an agent’s first duty is to their client, and not everything can or should be disclosed. “Don’t make assumptions,” says Cynthia Leggitt with HomeSmart in Gilbert. “There may be a back-story you know nothing about. So be courteous to your fellow agents in a spirit of cooperation.”

Bottom Line: Be as transparent about the process as possible.

MLS Issues

- Listing agent doesn’t update MLS status.
- Buyer agent ignores showing instructions.

 “‎Update the MLS religiously,” pleads Gerri Bara with West USA Realty in Mesa. “Have some pity on the people who read and rely on the information contained in your listings!” No buyer agent wants to make an offer on a home that should have been marked pending ten days ago.

Similarly, no listing agent wants to answer call after call requesting information that is clearly outlined in the agent notes. “Consult the listing before you call,” says Bergamini. “Half the time buyer agents call with questions that show they haven’t even looked at the listing.”

If you see something that doesn’t seem right, don’t jump to the conclusion that the other agent is lazy or has improper motives. It could be an honest mistake or a newly licensed agent still figuring out the rules. “When someone has a property listed as active and it shouldn’t be, email them a gentle reminder,” suggests Bergamini. C. Dale Hillard, designated broker at West USA Realty in Phoenix and the Rules Committee Chair at ARMLS, agrees. “If it’s a simple thing you spotted, call the agent and give them a chance to correct it,” he says. “For flagrant violations, I encourage you to push the button every time.”

“I have spoken to listing agents, and when I question them about it, they tell me they leave it active to try and secure back-ups,” says Steve Bachman with HomeSmart in Scottsdale. “[That’s an] immediate report.”

Bottom Line: Assume the best, but report the worst.

Lockbox Etiquette

- Listing agent uses combo lockbox, and no one bothers to scramble the code.
- Buyer agent hands plano to client with agent-only information.   

Listing agents must do all they can to protect the seller and the property. The last thing you want is to find that someone used a lockbox to enter a home and steal the appliances. This means using the best lockbox you can afford and being cautious about codes. “I’ve walked up to far too many combo boxes with the combo staring back at me,” reports Paul Slaybaugh with Realty Executives in Scottsdale. “Then there are the ubiquitous codes that are used for every listing that we all know by heart.”

“If an agent can’t afford $80 for a lockbox, perhaps they should not take the listing,” says Tonia Vickery, CRS with RE/MAX Renaissance Realty in Peoria. “Listing homes is not free, which is why we want good compensation when it closes.” She recommends that listing agents investigate used boxes. “When I picked up in listings years back, I started asking agents who were getting out of the business and got tons of used ones for at least 50% off,” she reports.

Buyer agents also have a role to play in safeguarding the home—and in avoiding liability. First, a lockbox on a home is not an invitation to enter. Even if a listing is pending or vacant, you must have the listing agent’s permission to enter. Unauthorized lockbox access could earn you a hefty fine from your MLS or local association. And if you checked the listing a week ago, check it again before you arrive, advises Mary Roberts, GRI with Keller Williams Arizona Living in Lake Havasu City. “A house may have been vacant last week and now have tenants in there.”

Be aware of who might be watching when you enter codes on a combo box and scramble it right away. Never hand clients information that is for agents’ eyes only, such as a plano with codes. Have a plan for what to do if another agent arrives while you are showing a home. “I either ask them to wait or put the black box back in, so they have to enter their code,” reports Briggs. “If the home has a combo lockbox, I ask the buyer agent to show me the MLS printout, so I can confirm they are an agent.”

While in the house, keep tabs on your buyers. Agents have had buyers do crazy things in other people’s homes, from letting their kids jump on beds to stealing medicine from the bathroom to unlocking a window for an unlawful re-entry later. Before you leave, double-check that all doors and windows are locked. (And we don’t need to tell you not to steal keys out of lockboxes to prevent other buyers from seeing it, right?)

Bottom Line: Protect the consumer.

Bad Behavior

- The cooperating agent calls you or your client names.
- You tell your client that the other agent’s incompetence is to blame for issues arising.

Article 15 of the Code of Ethics states, “REALTORS® shall not knowingly or recklessly make false or misleading statements about other real estate professionals, their businesses or their business practices.” Bergamini takes this to heart in his interactions with clients: “If my sellers ask me what I know about the other agent, I tell them that I know he/she’s a good agent and will do the best for their client. That’s all they need to know.”

When things go badly, it’s easy to blame the other side, to tell your client that the other agent is an amateur or that the seller is delusional. Sometimes agents do this to minimize their own missteps. Sometimes they may say those things because they’re true. Either way, it’s a disservice to the transaction. “It’s our responsibility not to let clients know if we have an issue with someone,” says Bergamini. “They should end the deal feeling like, ‘Wow! What an easy process.’”

“There needs to be common decency with regard to one’s chosen language about other agents/brokers and parties to a transaction,” reports Patrick Brennan with @Home Properties and Management in Peoria. “I recently had to ask that a listing agent not call my client names.” Persistent disrespectful behavior should be reported to the agent’s broker.

It’s not only unethical to bad-mouth another agent. It can also be bad for business. “You don’t know if the biggest deal in your life will be with someone you just said something nasty about on Facebook,” says Bergamini.

Candice Hudson with Sonoran Fine Properties in Scottsdale has a long memory for agents who behave badly. “I also remember all the good ones, the true professionals who know that every market turns at some point,” she notes.

Bottom Line: Stay positive.

WHEN & HOW TO ESCALATE AN ISSUE

You’ve done your best. You’ve been patient. You’ve given the other agent the benefit of the doubt and a few extra chances. Now it’s time to get serious.

Brokers. “Anytime there’s a situation that has escalated to more than one phone call, your broker probably needs to be aware of it,” says Bergamini. “Your broker is there to protect your license, their license and your client. The sooner they get wind of it the better.” Occassionally, a broker-to-broker call can clear up an issue quite effectively.

MLS. Some situations can be handled agent-to-agent, but egregious problems should definitely be reported. Most MLSs make it easy to report violations anonymously. For something like unauthorized lockbox access, it’s a good idea to provide as much detail as possible: lockbox number, MLS number, a statement from the seller and a police report, if appropriate.

Ethics. If you are dealing with an agent or broker who is a REALTOR® (that is, a member of a REALTOR® association), they are bound by NAR’s Code of Ethics. If you feel that an article of the code has been willfully violated, consider mediation or an ethics complaint. Thedisputes section of AAR’s website covers the processes involved. Or you can give AAR’s professional standards department a call at 602-248-7787.

Department of Real Estate.ADRE responds to consumer investigation requests about licensees who may have violated real estate law or the Commissioner’s Rules. Learn more about theInvestigations Division.

“Some practices just need to be stopped, but unless they are reported, the Department of Real Estate and AAR can’t do anything about them,” advises Judy Osmanski with Ken Meade Realty, Inc. in Sun City. “Step up to the plate and report a violation.”

FEATURES

You’ve likely worked with second-home buyers from time to time. Living in Arizona, we are fortunate to attract buyers with our appealing weather and resort lifestyle. But have you considered investing energy into developing that niche for your business? The timing may be right. In a real estate market bumping along at the bottom of a bust, the second-home niche is seeing growth. NAR reports that in 2009, sales of vacation homes increased by 7.9%, and the median vacation home price grew by 12.7%.

Veronica Barragan with Sueno Realty Group in Avondale began to target the second-home niche when she noticed that many buyers in her market were coming from out of state. “Arizona is a really good second-home market,” she says. “I wanted to help buyers coming out here, whether for retirement or for nice weather.”

Is the second home specialty right for you? Let’s take a look at some of the characteristics you might need to succeed in this niche.

Do you love where you live?

One of the most important factors for success in the second-home market is knowing your community well and communicating your love for it. Debbie Wyrsch-Williams with Coldwell Banker Residential Realty in Green Valley sees it as her job to sell buyers on Green Valley as opposed to other areas they may be considering. She takes clients to view not only homes but the different amenities in the area, such as a beautiful ceramics studio or a great woodworking facility. “You want it imprinted on their minds,” she says.

Sharing common interests can be a good way to connect with vacation-home buyers. “I am an avid golfer, so I can give them first-hand information about different golf courses,” says Judy Brickman with Russ Lyon/Sotheby’s in Scottsdale. “It definitely helps to create a rapport, an instant communication from one golfer to the next.” Consider subgroups within the second-home niche that match your own interests. Live in the city where you went to college? Reach out to alumni looking to retire in the area or parents who want to purchase an investment home for their child to live in while going to school. Love birding, water sports or hiking? Cater to buyers who share your passion.

As you drive clients around to show homes, reinforce the positives of the area, advises Pam Wachter with Russ Lyon/Sotheby’s in the White Mountains. Your enthusiasm for the area should be infectious. You are selling not just a home, but a lifestyle.

Resort & Second-Home Property Specialist

If you’re ready to develop the second-home niche, consider NAR’s Resort & Second-Home Property Specialist (RSPS) certification. Launched in 2006, RSPS now has over 1,000 members who focus on this particular real estate market.

The education-based certification helps you understand the specifics of the second-home transaction, from appropriate marketing to information about financing and tax implications. Barragan, who serves on NAR’s Resort and Second Home Committee, recommends the courses. “You learn to develop your target market area and how to deal with this market niche,” she says. “There are also great networking opportunities.”

Additional Resources

• NAR Resort and Second-Home Specialty
• NAR Field Guide to Vacation, Resort and Second Homes
• Resort Life — an NAR Blog

Is your website worth visiting?

The Internet is where most buyers today start their home search. Because second-home buyers are shopping from a distance, a website is especially important. Brickman, who does no print advertising at all, emphasizes the importance of developing a good website and spending the money necessary to promote it. Even if you invest marketing dollars offline—on ads in a Canadian golf magazine or a billboard near a spring training ballpark, for example—a potential client’s first step will likely be a visit to your website.

Make sure the site speaks to the interests of the second-home buyers you are targeting. “You need to understand who the buyer is and what they’re looking for in order to shape your message,” says Barragan. One of the things Barragan discovered in researching the second-home market is that buyers usually come from within a 365-mile radius. She targets her marketing appropriately.

Your website should communicate the joys of living in the area. Wyrsch-Williams’ website includes virtual tours of Green Valley and several neighborhoods, photos of golf courses and recreation centers, and links to local websites. This allows website visitors to get a sense of the community from afar.

Do you like getting to know people?

It’s important for REALTORS® in this niche to be comfortable with all types of people, reports Brickman. Second-home buyers may be affluent or of modest means. They may come from the Midwest or the Middle East. They may crave adventure or peace and quiet. Put in the time getting to know the buyers, coaxing relevant information out of them and identifying their needs.

One thing you’ll want to determine is how well they know the area. “Vacation home buyers [in the White Mountains] span a huge spectrum as far as familiarity with the area goes. Some have heard about it, some have childhood memories of vacationing here, some have stayed at a friend’s cabin,” says Wachter. “Depending on how much the buyer knows about the area, your work is either a huge education process or a validation and reinforcement of what they like.”

Next, help them spell out their goals for this home. Do they want to host large family gatherings or have a private retreat? Do they want to enjoy the view from their porch or partake in a host of recreation activities? Do they want to socialize with neighbors or not see another person for days at a time? Get beyond the basics of square footage and number of bedrooms and help them create a “wish list.” This will help you both evaluate the homes you see.

Once you’re in the showing stage, a post-showing debrief in the car or back at the office is very important with second-home buyers. “Elicit what they liked about the property, then reiterate those positives back to them,” advises Wachter. “This helps fix properties in their minds.”

Are you patient?

Developing relationships with second-home buyers takes time and patience. The buyer development phase is generally your biggest time investment. “Today much of this is done electronically via emails,” Wachter says. “It can take weeks or months to meet the buyer face-to-face.” Because this is a purchase of choice, not of necessity, the second-home buyer is in no rush. You could work with a client intensely for several days while they are in town, only to have them disappear for a year or more. Rather than giving up on that lead, cultivate the client slowly with regular but low-pressure contact. “If you’ve done a stellar job with these buyers from development to engaged and proactive showings, they’ll be back to look some more with you,” says Wachter. “And the next time around, or the time after the next time around, they’ll reward you with a contract.”

Continue to nurture past clients as well. Once one member of a friend or family group makes a move, others often follow. Beyond referrals, past second-home clients may buy again in the area. “Oftentimes a person buys a second home and initially uses it just as a winter vacation place. Then their stay becomes longer and longer, and they end up selling their home in a colder climate to purchase a larger home here,” says Wyrsch-Williams. “It’s never the last transaction.”

About the Series: Real estate agents spend more time writing than ever before, with email dominating modes of communication with clients, banks, other agents and more. Beyond email, agents need writing skills to prepare compelling website text, client handouts and other marketing material. All of this makes writing key to real estate business development in any type of market. Based on the principles of a new book, Before Hitting Send: Power Writing Skills for Real Estate Agents, this series of three articles provides practical how-to writing tips with examples and exercises from scenarios agents face daily. View Part One: Decide What You Want to Say & Choose the Right Tone and Part Two: Write to Persuade.

Giving disappointing news is no fun, but unfortunately it is part of being in real estate. Whenever possible, bad news should be delivered in person or over the phone. Because that is not always an option in our busy world, you must arm yourself with skills that allow you to deliver bad news in writing and make the best of a bad situation.

When delivering bad news, how you communicate is as important as what you communicate. If you deliver bad news ineffectively, you miss an opportunity to enhance your image as a solid, caring, effective agent.

Tips for Delivering Bad News

Tip #1: Prepare.
More than any other situation, this is a time when you must know what you want to say, and control how you say it. Lay out the facts, set out alternative courses of action if possible, offer recommendations and explain why you are making those recommendations. Treat the message as an opportunity to demonstrate that the situation calls for a collaborative effort at problem solving. You are a key partner in that effort.

Tip #2: Be prompt.
Don’t delay delivery of bad news any longer than necessary. Delay only risks compounding the problem, as the reader may filter your message through thoughts of, “Why didn’t she tell me this sooner?”

Tip #3: Stress the positive.
If you have an “I’ve got some good news and some bad news….” message to deliver, deliver the good news first. If you present the bad news first, the reader may focus on that only, and you risk losing his attention for the good news that follows.

Tip #4: Tone it down.
When delivering bad news, the goal is to give the impression that you are thinking clearly and logically –not emotionally. Use the skills for selecting an appropriate tone, outlined in part one of this series. Choose words to demonstrate that you are calm and in control of a negative situation. Diffuse anticipated negative emotional reaction through your choice of words. Avoid inflammatory words (e.g., failed, refused) and opt for neutral words instead.

Tip #5: Be brief, courteous, tactful and considerate.
Express appropriate empathy and concern, but be direct. State your purpose up front and avoid wordy preambles such as, “Oh gosh, I have some bad news…” or “I don’t know how to tell you this, but here goes…”

Tip #6: Focus on what you are doing to help.
If possible, offer solutions and offer alternatives to those solutions. Emphasize the actions you have already taken, or intend to take, to remedy the situation. Close by assuring the reader that you will continue to follow up on the situation until you are able to speak by phone to discuss the matter more thoroughly.

Tip #7: Remind them of the bigger picture.
If your readers lost the house they always dreamed of having, gently remind them that there are other houses out there and that you won’t rest until they’ve found it. No matter how bad the news may feel at the moment, there is always a bigger picture. Your job when delivering bad news is to keep your readers focused on that bigger picture.

Tip #8: If possible, warn in advance.
Sometimes, as real estate experts, we can anticipate in advance that a situation poses risks of not turning out well for our client. Delivering bad news is much easier when the client’s expectations have been set in advance.

© Kaplan Inc. All Rights Reserved.

PUT YOUR NEW SKILLS TO WORK WITH THIS EXERCISE

Revise the following message to deliver the bad news more gracefully:

Ruby,

I don’t know how to tell you this, and I’m really, really worried that you’ll get upset and who knows, maybe you should be upset. I wish there was an easy way to say this, but there isn’t, so here goes… The Buyers cancelled!!!!!! I know this is a TOTAL DISASTER for you because your cash flow situation is so dismal right now. You are within your rights to go after their deposit, but I know that is of little consolation right now. I don’t know what else to do but to put the house back on the market immediately. What you need to understand is that this isn’t really my fault. The problem is that the market is so bad right now.

With regret,
Ida Koch

EXERCISE KEY

The exercise can be written in a number of different ways. This key provides just one example.

Ruby,

Moments ago I received notice from the buyers that they are canceling our deal. I know how upsetting this news must be due to your current cash flow issues. Please understand that I am already moving forward to address this situation. I will put the house back on the market immediately. Given current market conditions, we may want to consider a slight price reduction to make the property even more enticing to potential buyers. I will brainstorm for other ideas to attract attention to the home and will have a list of suggestions to discuss when we’re able to speak by phone.

Also, pursuant to the contract terms, you are within your rights to claim the buyers’ deposit. I know that remedy is of little consolation right now, but it is something you should consider going forward.

Sincerely,
Ida Koch