Pennsylvania’s realtors back bill that would put them back to work

The Pennsylvania Association of Realtors is throwing its support behind House Bill 2412, sponsored by Todd Polinchock, R-Chalfont, that would reopen the real estate industry as a life-sustaining business.

“Real estate is an essential business and we believe we can practice safely under CDC guidelines,” said William Festa, president of PAR.

He noted that real estate is not a high contact industry. “We meet a few people at a time,” he said.

PAR is not recommending business as usual. While it can’t control what individual firms do, it would caution against such things as open houses. Festa said the association has a task force in place that is putting together a standardized guide on how it’s best to operate once the governor lifts the order issued on March 19.

Kim Shindle, PAR’s director of communications, said most states are allowing real estate sales to continue, which causes another set of problems for Pennsylvania Realtors and those looking to move here from other states.

“There are some people who may have sold a home in another state and can’t settle on their home in Pennsylvania,” Festa said. “There are a lot of people carrying two mortgages. There’s a lot of economic distress.”

PAR also sees inconsistency in Gov. Wolf’s red-yellow-green plan to re-open the state gradually. PAR wants real estate opened uniformly.

“Otherwise we’re creating a lot of confusion,” Shindle said.

The governor’s plan creates challenges if buyers in red regions are looking to buy in green regions – or the other way around, she said.

“Allowing real estate services to be conducted in one county, while those in a bordering county are unable to do so, simply isn’t practical,” added Festa. “The phased reopening would provide housing relief to some Pennsylvanians, while prohibiting others’ ability to gain shelter.”

In the meantime, Festa said the industry is doing what it can. Sales are off between 75% and 80%, but a few have gone through. Such sales have been rare and complicated because vital components of a sale, such as home inspections and appraisals, aren’t allowed.

“A buyer would pretty much have to waive everything, but some have,” he said.

A study by the National Association of Realtors show that home sellers are holding steady and there hasn’t been any major decline in home prices during the pandemic. Prices are holding steady in Pennsylvania as well, Festa said. The properties just aren’t selling.

The Pennsylvania Association of Realtors celebrates a century of service

Harrisburg Real Estate Board members during an outing at Bellevue Park on July 30, 1925. PHOTO/SUBMITTED

Modern-day society is so regulated that it may seem strange to consider that early real estate transactions were conducted without licenses. The term “realtor” itself is a relatively new addition to the American lexicon, having been coined in 1916, eight years after the National Association of Real Estate Exchanges was founded.

That same year, the association incorporated the term into their new name and became “The National Association of Realtors.” Approximately four years later, Pennsylvania recognized the need for a similar organization and the Pennsylvania Association of Realtors (PAR) was formed. It wasn’t until 1929 that Pennsylvania Gov. John Fisher would sign the “Real Estate Brokers License Act,” defining real estate broker and real estate agent, and providing for licensing, regulation and supervision.

Much has changed since then, according to officials at PAR, but one thing remains constant and that’s the importance the organization places on the National Association of Realtors “Code of Ethics.” The code lists a host of requirements focused on doing the job to the best of one’s ability while maintaining high ethical standards.

“It was designed to keep us in line,” said Leon Brisson, who served as PAR President in 1981. William Festa, current PAR president, nods in agreement. “We live by the Code; it’s an enforceable document,” he said.

Benefits of Membership

One of the benefits of being a member of PAR is their focus on continuing education. “We advocate for that and work with the state Real Estate Commission to develop courses,” said E. Leonard Ferber, Jr, former PAR president (2006).

Jodi Diego, PAR district vice president agreed. “The courses help us be better and if you want to do the best for your clients, education is key.”

Access to a library of forms realtors use on a regular basis is another membership benefit, as is the benefit of networking. “

Our board of Directors is comprised of 220 people from across the state who work on a variety of issues and get together for work and networking three times a year. They keep each other abreast of ordinances in their local municipalities, market conditions, new ways of doing business, make referrals, etc.,” said Kim Shindle, PAR’s director of communications.

Another notable benefit is a legal hotline that is accessible to realtors. “One of our local attorneys is in the office at all times to help educate members on various issues,” said Festa.

Technological Advances

One thing that has certainly made the realtors’ job easier over the years is technological advancements. James Helsel, Jr., who served as PAR president in 1994, laughed when he reflected on the old-fashioned way things used to be done.

“We started out with single-paged forms, then went to carbon, then non-carbon, now everything is online.”

Brisson cites a big change with the introduction of the multi-listing service in the early 70s. “The way it was done before was that the staff developed a card system and the cards were given out once or twice a week. Now listings are also online.”

Another benefit of technology is the ability to send forms and obtain signatures via email, rather than ask clients to carve time out of their busy days to visit the office.

Past and present challenges

Challenges of the past, such as the 1958 debate over whether it was legal for a real estate office to be open on a Sunday, seem quaint compared to some of the issues the industry has faced in more recent years, such as the high-interest rates of the 1980s. “That was a real trying time when interest rates were at 18 and 18.5 percent. We lost members because they weren’t doing business,” said Brisson.

Other challenges have been regulatory in nature, such as a mandatory sprinkler law enacted in 2010, that, according to estimates by the Pennsylvania Builders Association (PBA), added an additional cost of approximately $15,000 per structure. The mandate was eventually overturned due to efforts of associations like PAR and PBA.

“On the local, state and federal level there are hundreds of bills that are presented for consideration and we at PAR have to evaluate each one. The staff monitors all proposed legislation that contain the words ‘real estate,’ said Don Roth, PAR President, 2010.

Part of PAR’s mission is to protect private property rights and facilitate a consistent and reliable marketplace, so the association can sometimes be at odds with local municipalities when it comes to onerous regulations. Len Ferber, who served as PAR president in 2006, said, “When a developer finds land, it could take between 3-9 years for all the approvals to develop it, not to mention the regulatory costs to build, which can add an additional 20 percent cost, on average.”

Two past Pennsylvania Realtors of the Year, Tom Leis, left , and Jim Helsel Sr., shake hands. PHOTO/SUBMITTED –

The “Great Recession” was also a difficult time for realtors. Helsel said that they lost about 340,000 members nationally during 2008-2010. “The way we dealt with that was to put together a number of programs that we used to sell and give them away for free to help members sell, list and work with buyers during a tough time. We held dues at the same rate during that time as well,” he said. After surviving that rough patch, membership once again began trending upward. Today PAR claims approximately 35,800 members.

A more recent challenge to the industry is the amount of time that people stay in their homes. According to Diego, people used to move every five to seven years. Now it’s 10 to 12.

Constantly rising property taxes are another challenge. “In the Poconos, people are paying $12,000 a year on houses that cost $100,000,” said Festa. The high taxation results in fewer first-time homebuyers, which have been reduced from 45 to 32 percent. Realtors hope to recoup that market segment with House Bill 128, sponsored by Rep. Rosemary M. Brown, R-Monroe; and Senate Bill 309, sponsored by Sen. Bob Mensch, R-Berks, which will allow first-time homebuyers to add money to a savings account, which can then be deducted from their state income tax.

“It looks like it’s going to pass,” Festa said.

Helsel said that the importance of a healthy market can’t be stressed enough.

“Real estate drives a lot of industries: banking, title companies, builders and more.”

Festa agreed and said that the association has adapted to a lot of changes in the past 100 years and by continuing to evolve with the times, they are looking forward to wherever the next century leads. “

As realtors support private property rights, we are essentially supporting all of those industries that Jim mentioned, as well as a stable real estate market,” he said. “This helps to strengthen our communities and to make the American dream a reality.