Michigan Association of REALTORS®

House, Senate Differ on Service Tax Repeal

In the last session day before a two-week break, the state Senate showed their support of the business community by voting through legislation repealing the service tax. The Senate chamber ushered the repeal without replacement revenue to the floor for a vote and the measures passed. On the other side of the Capitol, the House passed repeal legislation along with identifying a new revenue source to replace the job-killing service tax. While the repeal is a major victory for businesses in Michigan, there is still much work to be done in regard as to whether or not to replace the revenue. As passed, the House legislation will affect those businesses that will pay the new Michigan Business Tax (MBT).

Prior to floor passage of the repeal legislation, testimony was heard in the House Tax Policy committee on how to replace the projected revenue. Plans range from hiking the state sales tax, adding a surcharge to the new Michigan Business tax, as well as additional cuts and reforms. Various business groups testified in support of an immediate service tax repeal combined with an MBT surcharge, which favors large businesses. The MAR supported a timely repeal of the tax, but urged a more broad based and equitable solution should the revenue be replaced. Governor Granholm has stated that she will not allow the repeal without replacement measures.

Despite the MAR opposition, the House Tax Policy committee voted out House Bill 5408, legislation to add a surcharge to the MBT, at a rate of 32.9% through 2008, prior to tax credits. The legislation also includes a $2 million cap, limiting the amount larger corporations would pay. This drastically increases the tax burden of Michigan smaller and mid-range businesses. House Bill 5408 is now on its way over to the Senate. The Senate Republican Majority continues to look at alternative sources for revenue, and all options are on the table. There is a tentative Senate session day scheduled for Tuesday, November 13th.

The MAR Advocacy team is working diligently to meet with legislative leaders on addressing any concerns our industry has with the various plans being circulated to make sure any tax increase on business is as equally distributed as possible. While we are opposed to the current structure of House Bill 5408, we are pleased with the positive relationship MAR has forged with both House and Senate leaders, and will continue to work for a mutually acceptable position.

NAR, SGA Find Americans Prefer to Spend More on Mass Transit and Highway Maintenance, Less on New Roads

Three-fourths of Americans surveyed believe that either being smarter about development or improving public transportation are both better long-term solutions for reducing traffic congestion than building new roads, according to a survey sponsored by the National Association of Realtors® and Smart Growth America.

The 2007 Growth and Transportation Survey details what Americans think about how development affects their immediate community, and traffic congestion was a top concern. Nearly half of those surveyed think improving public transit would be the best way to reduce congestion, and 26 percent believe developing communities that reduce the need to drive would be the better alternative. Only one in five said building new roads was the answer.

In today's world, we are bombarded daily by pre-approved credit offers, quick cash loan commercials, and over-exuberant mortgage companies. Unfortunately, not all consumers are aware of the potential pitfalls and could find themselves the victims of any number of scams. One of the most prevalent traps in the real estate market is predatory lending loans that adversely affect borrowers in many different ways. But you, as a real estate professional, can help the fight against these practices.

One of the best ways to help prevent predatory lending is to inform your clients about it by providing them with resources to educate themselves and to share any case studies of which you are aware. You may also suggest your clients seek credit counseling or a financial expert for additional information. As their REALTOR®, you can directly assist clients by reviewing and scrutinizing all loan offers and documentation, including the HUD, prior to closing. Many predatory lenders change loan terms at the last minute and the borrowers, although hesitant, feel they must proceed with the closing as scheduled. You must be willing to tell them it is okay not to sign until the changes can be explained to them.

Check this off your list early and register now for Achieve. Online registration and the special MAR hotel block are now open. The event will take place January 17 – 18 at the Amway Grand Plaza in Grand Rapids.

Achieve 2008 will feature a lineup that is sure to inspire all leaders and motivate them for the year to come. The keynote speaker will be Ira Koretsky from the Chief Storyteller. Ira redefines the art and science of business relationship building. His goal is to help attendees build stronger and more profitable relationships by helping them share their message with the world through great business stories.

MAR is excited to be returning to the Amway Grand Plaza for yet another event. Chosen for its proximity to our incoming President Jeff Young, this location offers a host of amenities and activities from award-winning dining options to a vibrant nightlife. You will experience the luxury and elegance of this venue the minute you step through the doors.

Book your hotel by asking for the special MAR rate when you call the Amway at 800.253.3590 or reserve rooms online with the code MAR116.

With the help of McClelland & Anderson, we are taking the most commonly asked questions from our legal hotline and putting them in e-news. We will be featuring a different question each issue.

QUESTION: A local attorney referred his client to me to purchase one of my listings. He is not a real estate licensee but he is demanding a referral fee. He said because he is an attorney he is exempt from the rule prohibiting referral fees to non-licensees. Can I pay him?

ANSWER: NO. There is no exemption from the licensing requirement for attorneys. The only exemption from the prohibition is contained in MCL 339.2512b which deals with paying existing tenants for the referral of other tenants.

If you attended this year’s MAR Convention and Expo, you should celebrate that you were a part of history because this was MAR’s first attempt at putting together a green-friendly event. Just by reducing the amount of information MAR prints in its Convention Program Book, the following was saved.

1700 pounds of paper
14.5 trees
3485 Kilowatt hours of electricity
51 pounds of pollutant effluent (air pollution)
5950 gallons of water
2.8 cubic yards at a landfill

MAR looks forward to implementing environmentally-friendly practices into more of its events.

How do you fix a troubled housing market? Forbes.com asked that question of a broad range of housing experts, including CEOs of real estate firms, real estate practitioners, economists from lending institutions, and research directors at analytics firms. Here are five of their best suggestions.

1. Restore investor faith. "Mortgage fraud, by both borrowers and insiders, must be identified and prosecuted in order for faith to be restored in the market," says Anthony Sanders, professor of real estate finance at Arizona State University.

2. Expand Fannie Mae, Freddie Mac and the Federal Housing Administration loans. "Our local banks and community banks have done a great job providing funding. (FHA) should be there as a supplemental for people who have good credit," says Congressman Lincoln Davis (D-Tenn.)

3. Cut construction and prices. "The market will only hit bottom after builders cut construction and sellers slash prices," says Mark Zandi, chief economist at Moody's Economy.com. "The longer builders and sellers hold on, the longer the market will struggle."

4. Bring back non-agency loans. "The dramatic seizing of the mortgage-credit markets caused the elimination of almost any loan that wasn't backed by Fannie Mae or Freddie Mac," says Bob Walters, chief economist at Quicken Loans. The revival of non-agency loans "will add much-needed mortgage funding to potential home buyers and folks looking to refinance."

5. Buyers and sellers get real. Nelson Gonzalez, senior vice president of Esslinger, Wooten Maxwell, REALTORS® , believes that once buyers realize that they're not going to convince a seller to accept a rock-bottom price, fluidity and activity can return to the market. "There is much pent-up demand," he says, "and buyers have been sitting on their hands for some time now."