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Flood Insurance Increases and Legislation – Blaine Morris’ 2014 President of Marin Association of Realtors 03/03/14 Monday Memo

Good morning MAR members,

Happy March, happy almost-spring!  In addition to our needed rain, as I had hoped, lots of new listings this past week.  One of our colleagues was quoted in the Marin IJ this past week characterizing Southern Marin as being in an “inventory crises”.  Let’s hope our sellers see this and get off the fence.

I’m hoping to see all of you at our MAR General Membership meeting next Tuesday.  It is at 11:30 at Embassy Suites in San Rafael.  It’s our MAR Annual Meeting, and our featured speaker is Gov Hutchinson, who is the Assistant General Counsel at the California Association of REALTORS.  Gov is on the front lines of the newest and timely risk management issues of selling real estate in California, and it’s always a popular meeting because he gives us this info with real world stories that we can apply to our business today.  Also presenting will be our colleague Steve Dickenson for his always-useful Marin Market Update.  Click here to register:

Thank you for all of your comments this past week about last week’s agent safety message.  Everywhere I went last week, people were sharing stories about unseemly experiences at open houses.  Many of us just stow these away, I’m glad we’re talking about it.  Be safe out there!

Last Thursday evening, I had the pleasure of attending meetings with two important REALTOR groups here in Marin, both of which are open to all.  The first was the Marin REALTORS Young Professionals Network.  This group is just getting off the ground, and they had their second monthly meeting at Wellington’s Wine Bar in Sausalito.  Our colleague CJ Nakagawa is the 2014 Chairman of the Marin REALTORS YPN group, and he and his advisory committee are doing a tremendous job launching this needed group that fosters the professional development of our newest members.  Plus, they have a lot of fun and network for the benefit of their individual businesses.

Patty Oxman was kind enough to share a presentation at YPN on how to create a repeat and referral business.  Patty is one of our busiest and most respected colleagues, and it always amazes me how giving she is to share her best practices with other agents.  I last heard this presentation nearly eleven years ago when I was just getting into the business, and the same fundamentals that Patty teaches apply today.  Service to our fellow agents is one of the most important things we have to share in our business, and I’m so thankful for top producers like Patty giving their valuable time to help others in the business get better.  Thank you Patty!

The second meeting on Thursday was with our colleagues at Womens Council of REALTORS.  This was a well-attended mixer and everyone had a great time!  WCR is hosting their monthly meeting this next Tuesday, March 4th, for a breakfast meeting.  The featured speaker will be Janice Niederhofer, who will be presenting “Top Secret Strategies of Business Success.”  Ms. Niederhofer is a “top secret” woman herself, who has taught interrogation techniques to the CIA, FBI and many other top agencies.  This sounds like super interesting material, and info that you can use in your business today since we all need to get creative on how we gather information.  Click here to register:

Now, on to this week’s topic:  flood insurance.  I must admit, most of my listings are not in a flood zone, and I’ve paid attention to this topic only when in escrow.  We all have some brushing up to do, things are changing and we should all work to learn more about this subject.

Several weeks ago, I visited with Congressman Jared Huffman along with our MAR colleagues Kay Moore and Katie Beacock.  Kay is NAR’s “key contact” with Representative Huffman, and Katie is Chair of CAR’s Region 4, of which all of Marin is part.  Leading up to the meeting, I was asking agents if there was anything that should be brought to Rep Huffman’s attention.  We have to focus on things that have national oversight:  mortgage interest deduction, flood insurance, etc.  Boy, did I get an earful from everyone about flood insurance.  What a messy, in-between stage we find ourselves at right now!

I shared some real world stories with the congressman.  One local firefighter whose flood insurance on his recently purchased home just jumped from $1800 to $6000 per year.  Another escrow that fell apart in San Rafael because the flood insurance was going to increase from under $2k to over $14k.  These stories are everywhere, and Congressman Huffman listened with great interest.

Flood insurance is being legislated at the highest level of our government right now.  On January 30th, the US Senate passed a bill that will delay many of these sharp increases for up to four years.  The bill is now in the House, and I expressed to Congressman Huffman that these gigantic increases are proving very troublesome for many of his constituents.  Forget about someone trying to buy a new home, how about people on fixed incomes who are seeing these rates triple, or quadruple or more.

We’re hoping that the House is poised to pass this bill.  And President Obama will need to sign this bill as well.

A key new component in the listing and selling of flood-zone properties is the regularly-needed “elevation certificate”.  In the past, elevation certificates came up often if homeowners wanted to try to get a reduction or removal of flood insurance.  Now it seems that it’s become standard practice to require this report as part of getting flood insurance, unless you are willing to pay the very highest rate.

Because many rates have gone up so much, the elevation certificate could possibly help to get the cost of insurance back to a manageable level.  This may well become a new negotiable closing cost.  And an elevation certificate isn’t cheap, it can cost more than $1000, sometimes up to $2000.  Nor do you get one quickly.  And sometimes the insurance company will require modifications to the house itself, such as venting, before they will issue a policy…and they want it done before close of escrow.  Plan accordingly in your escrows.

MAR is going to continue to seek clarity on this matter to get you the timely info to conduct business, stay tuned.  I’m sure your brokers can help too.  Again, I’m not an expert, and I’m working to get educated.

Finally, again, lots of feedback on the emerging auction business for real estate in Marin.  Many of you have asked about BAREIS MLS’s policy on compensation in the MLS.  They are under the same requirements as MAR, we don’t get involved in compensation issues.  I invite all of you to review item 11.1 of the BAREIS MLS Rules and Regulations, it’s linked on this page on the BAREIS website:  It’s pretty clear.  Please keep your auction stories coming!

I wish you all a safe and prosperous week!