Resort & Second-Home Markets Course

1. Welcome to NAR’s Resort & Second-Home Markets Course

2. Only members of NAR may call themselves REALTORSand use the trademark. • Help members become more profitable and successful • Collective force influencing and shaping the real estate industry • Leading advocate of the right to own, use, and transfer real property; • Leader in developing standards for efficient, effective, and ethical real estate business practices • Valued by highly skilled real estate professionals and viewed by them as crucial to their success.

3. Resort & Second-Home Specialist • A real estate practitioner who facilitates the buying, selling, or management of properties for investment, development, retirement, or as second homes in a resort, recreational, and/or vacation destination.

5. RSPS Certification Requirements • Complete core course • Complete one of two options • Option 1: Elective courses • Option 2: Hold a designation—ABR, ALC, CCIM, CIPS, CPM, CRS, CRB, GREEN • One-time application fee of $195

6. www.coursecalendar.com • Go to www.coursecalendar.com • Search by date, location, topic, designations or certifications, and affiliation.

7. Course Goals & Structure Essentials of buying, selling, or managing resort properties and second homes for recreation, investment, and development. • Skills and knowledge foundation • Clients, customers, and properties • Affluent or international buyers and sellers • Building your business • Overcoming bad publicity and disasters • Tax and investment • Regulatory matters • Quiz

8. Learning Objectives • Skills and knowledge foundation • Developing the skills required to be successful • Develop a business strategy • Impact of trends and issues • Customers, clients, and properties • Market and customer/client profile • Characteristics of properties • Financing and ownership

9. Learning Objectives • Working with affluent or international buyers and sellers • Adapt customer and client services • International referrals using the ICREA Transnational Referral System

10. Learning Objectives • Overcoming bad publicity and disasters • Strategies to overcome bad publicity • Formulate a disaster-recovery plan • Building your business • Develop and improve marketing strategies • Communication and marketing tactics for building customer and client relationships

11. Learning Objectives • Tax and investment • Investment terminology • Tax treatment of second-home • FIRPTA regulations • Tax-deferred 1031 exchanges • Analyzing the investment value of a property

12. Learning Objectives • Regulatory matters • SEC guidelines regarding investment advice • Impact of regulatory, insurance, growth, and environmental issues • Sources of information • Influencing regulatory and tourism entities to shape a favorable environment

13. Learning Objectives • Quiz • 50 question multiple choice quiz • Passing grade is 70 %

14. Definition • Let’s Review . . . a resort and second-home property specialist is a real estate practitioner who facilitates the buying, selling, or management of properties for investment, development, retirement, or as second homes in a resort, recreational, and/or vacation destination.

15. Property Types • Single family residence • Condo • Condotel • Resort • Ranch • Luxury and unique properties • Fractional ownership • Time share • Vacation cabin • Gated community • Adult and senior community • City pied-a-terre

16. Buyer Objectives • Property management • Investment • Retirement • Recreation • Enjoyment and relaxation getaway • Family gathering place • Appreciation potential • Tax strategy • Diversification

17. Discussion Question • What property types and objectives do you encounter?

18. Resort & Second-Home Markets Course CHAPTER ONE

19. In This Section • Applying core real estate skills • Using national statistics, trends, and issues • Participating in community planning

20. Adapt Skills • A distinguishing factor for resort and second-home property specialists is applying core real estate skills, combined with specialized knowledge.

21. Skill Map

22. Regulatory: Must Be A Local Expert • Be prepared to familiarize clients and customers with the laws and regulations affecting resort and investment properties.

23. Skill Builder Tip Know the local codes and regulations The specialist must be an expert in local codes, covenants, restrictions, and other laws that impact the purchase decision because buyers expect the practitioner to be a primary source of objective information. Since clients are frequently from another state or country, they typically do not have knowledge of the local laws and regulations affecting properties.

24. Product & Market Knowledge • Product knowledge: • Property • Destination • Environment

25. Financing • The specialist needs to know about: • Second-home down payment and qualifying standards • Approaches to second-home financing • Helping a client evaluate options

26. Networking • A specialist’s network includes: . . . . and others

27. Presentation Skills • Maintain an appearance and personal style appropriate to the: • Buyer • Type of property • Market area • Transaction

28. Communications • Know how to: • Read nonverbal signals without the benefit of being face to face • Adapt communication approaches

29. Investment • Know about a range of investments and how they compare to real estate in general

30. Skill Builder Tip Patience is a virtueSecond-home purchases are always discretionary. Transactions can take up to a year or more to conclude; three-year long interactions prior to closing are not uncommon.

31. Fiduciary Duties • May need to educate buyers on the state’s statutory fiduciary duties • Must be comfortable with “mail out” closings

32. Customer Service • Be prepared to provide a wide range of customer services • Handle a range of aspects of the transaction that a residential buyer or seller would ordinarily handle on their own • Spontaneity and flexibility are essential

33. Skill Builder Tip Customize market materialsThe specialist must be able to customize marketing materials to feature the lifestyle or attraction that is of foremost importance to the client. Is the client’s interest in golf, water sports, or a family-friendly get-away? Customized marketing materials that appeal to a client’s interests will have more impact.

34. Technology Tools • Must be comfortable with technology • Have a disciplined follow-up system

35. Skill Builder Tip Technology tools maintain contact The specialist’s e-mail contact and follow up can serve to remind customers of why they were interested in the first place. It can also help them recall the last conversation and reduce the anxiety that distance creates.

36. Tax Issues • Must be knowledgeable about: • Tax treatment of second homes • For investment • For rental properties.

37. Community Involvement • Should be active in community issues and local government • Develop strong ties with local visitors and tourism organizations • Serve as “ambassadors” for the destination

38. Negotiations • Professional and non-adversarial manner • Provide a neutral sounding board • Absentee buyers and sellers or “gatekeepers” can present negotiations challenges

39. Who, What, When, Where, Why • Who is the typical second-home buyer or investor? • What kind of properties do they purchase? • When are second-home and investment properties used? • Where are second-home and investment properties located? • Why and how do buyers purchase second-home and investment properties?

40. Buyer Profile • Vacation-home buyer • 59 years old • Married, no children at living at home • Investment-home buyer • 55 years old • Married, no children at living at home

41. Median Income • Vacation Home Buyers: $120,600 • Investment Home Buyers: $98,600

42. Profile of Homes • Single-family residences: 83% of vacation homes and 79% of investment homes • Smaller than the primary residence • Vacation homes -1,480 square feet • Investment homes - 1,520 square feet

43. Time Rented or Owner-Occupied • 81% of vacation homes are never rented • 20% of investment homes are never rented

44. Distance from Primary Residence • Median distances • 220 miles for vacation homes • 10 miles for investment homes

45. Is Every Second Home an Investment? • 30% of all buyers expect to convert their second homes to primary homes sometime in the future

46. Skill Builder Tip Helping investors make informed decisions While a real estate practitioner should be careful not to stray into the territory of offering investment advice (unless the salesperson is a registered securities dealer), salespersons need to be able to supply the information about properties that will help the buyers compare investment possibilities and make informed decisions about capital placement.

47. Sources of Down Payment and Financing • Source of down payment for 3 out of 4 second homes is savings or equity from the previous home • Savings as the #1 source • Higher the price of the property the more likely it is to be purchased with cash

48. The “Typical” Buyer • Vacation-Home • Investment-Home

49. Marketing to Boomers & Gen X-ers • Typical vacation-home buyer is a Baby Boomer • Typical investor may likely be a Gen Xer

50. Use of a Real Estate Agent • 2/3 of second-home buyers purchased through a real estate agent or broker • 6 out of 10 hired the first agent they interviewed • Buyers’ leading sources of information are real estate agents and yard signs