How Trump tax plan would alter mortgage interest deduction

Each year, taxpayers subsidize America’s homeowners by roughly $70 billion, with the benefits flowing disproportionately to coastal areas with high incomes and pricey homes, from New York and Washington to Los Angeles and San Francisco.

The subsidy for homeowners comes in the form of a deduction from their taxes for the interest they pay on their mortgages. An affluent New Yorker, for example, would have saved an average of $3,694 in 2015, according to an analysis of IRS data released Wednesday by the real estate company Apartment List. In metro Los Angeles, the deduction was worth an average of $4,568, in San Francisco still more: $5,500.

But under President Donald Trump’s tax proposal, some Americans would likely be steered away from this tax break. Here’s why: Trump’s plan would double the standard deduction, which taxpayers can take if they don’t itemize deductions. The doubled standard deduction could exceed the savings many receive now from itemizing their expenses for housing, state and local taxes and related costs.

But the Trump plan would also eliminate many existing itemized deductions, including those for state and local taxes, so that some people who now itemize might end up paying more.

US renters still not getting much price relief

Getty Images

Rents are still high despite a big increase in new construction.

Renters still can’t catch a break: Prices are still rising rapidly despite a rush by builders to finish more apartments in the past few years.

The government on Friday said rents rose by 3.8% in the 12 months ending in September. That’s just a few ticks below a nine-year high of 4% set at the end of 2016.

Rising costs have squeezed millions of renters since 2014, especially in major cities and other highly sought locations. A stronger economic and surge in hiring has allowed more people to buy or rent homes, but the available supply simply hasn’t kept up.

Builders have ramped up construction, leading to lower prices in some areas. In some cities such as New York, a glut of high-end properties has forced landlords to offer more incentives. And rents are more moderate in smaller cities and less populated areas.

Yet by some measures the housing industry is still not keeping pace with demand.

The National Multifamily Housing Council estimates builders completed an average of 225,000 apartments each year from 2011 to 2016. The problem is, the economy needs to add about 328,000 units a year to keep up, the trade group contends.

Also read: U.S. retail sales post biggest gain biggest since 2015

Builders were on track to complete more than 300,000 rental units this year, but the pace of construction has slowed recently. The number of multifamily units under construction dropped to an annual rate of 329,000 in August from 421,000 in January.

Housing industry officials say a shortage of skilled workers, a scarcity of affordable lots, red tape, and stiffer lending standards are among the headwinds.

Also read: U.S. inflation surges again after hurricane boosts gas prices

In the past rising rents would often encourage more people to buy their own homes. A recent survey by the National Association of Realtors, however, found that only 21% would consider buying a home in response to higher rents.

One reason for their reluctance: their incomes are only growing half as fast as the prices of homes. Through August incomes rose an average of 2.8%, but the cost of previously owned homes are climbing at a nearly 6% pace, according to the SP CoreLogic Case Shiller index.

The obstacles to ownership is evident in sales of new and used homes. They had been on the up and up through early 2017, but lately they’ve tapered off.

Manhattan Sand section, South Redondo lead home appreciation



 Tony Cordi

by Tony Cordi

The gap between the average home price in the beach cities and the national average has grown significantly since 2000. In 2000 you could buy a home in most parts of the country for $120,000 compared to $532,000 for the three beach cities and El Segundo. Since then, our blistering appreciation rates have resulted in a substantially higher gap. The National Association of Realtors estimates that the selling price of a home in the country is about $250,000 while here the average home price for all home types exceeds $1.4 million. This has had a huge impact on local businesses and on property tax revenues for the cities.

In 2016, the total sales volume of single family home, condo and townhome sales topped $2.4 billion from 1,601 sales. Assuming that the total cost of all transactions related to a sale is 6 percent, this sales volume represents $142 million in broker fees, escrow costs, and other expenses. An additional $71 million makes its way to the four cities in the form of property tax revenue.

The numbers were quite different here back in 2000. For starters, the total number of transactions was 34 percent higher at 2,421. Total sales volume came in around $1.3 billion, which when adjusted for inflation would be about $1.8 billion in today’s dollars.

With respect to the number of transactions, we would hit a post-2000 peak in 2002 with about 2,600 sales. Not surprisingly, the number of homes sold would plummet to just under 1,200 in 2008 when the national financial crisis had a firm grip on the economy. The number of annual sales has held steady at about 1,600 for the past five years. Affordability and a fall-off in turnover probably explain why we haven’t seen over 2,400 home sales in many years and may not for years to come.

At the city level, average annual appreciation rates have ranged from 4.5 percent to close to 7 percent for the four cities since 2000. The local Multiple Listing Service (MLS) for the South Bay further breaks down the cities into 17 total different areas in El Segundo, Manhattan Beach, Hermosa Beach and Redondo Beach. Every single area has had average annual appreciation of at least 5.6 percent to 6.9 percent with one exception, the Manhattan sand section. Median sales prices in the Manhattan sand section have increased an average of 9 percent per year every year since 2000. This can be partly explained by the fact that 26 percent of homes sold near the beach in this section during the first six months of this year were built within the past two years and sold for a median price of $4.5 million.

All 17 areas were hit hard in 2007 and 2008 during the credit crisis and median sales prices took a big hit. With the benefit of hindsight, we now know that the market would start to recover a few years later. Average annual appreciation rates become far more impressive from 2011 through the first half of this year for every area with a range of 5.6 percent up to an incredible 13.6 percent.

Of the 17 areas, six have experienced average annual appreciation rates over 10 percent. The Manhattan sand section leads the pack at 13.6 percent. South Redondo west of PCH came in at 13 percent. The others include the tree section of Manhattan, both areas in east Manhattan, and the area in south Redondo Beach north of Torrance Blvd.

In spite of a few tough years since 2000, homeowners here have enjoyed a tremendous ride with respect to home appreciation rates.

Tony Cordi is a commercial real estate consultant with The Innate Group. He can be reached at tony@theinnategroup.com.


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by Tony Cordi

Poloncarz, Higgins urge Congress to preserve "SALT" tax deduction …

A Republican federal tax reform plan would be disastrous to homeowners, and to the local economy. That’s the assessment of two local Democrats who joined with the representative of a local realtors’ group to reject a proposal eliminating a tax deduction that’s been in place for more than a century.

The State and Local Tax deduction, or SALT, has been in place since 1913. It would be removed under a tax reform plan under consideration in Washington.

Erie County Executive Mark Poloncarz speaks in his office about a federal tax reform plan that would eliminate state and local tax deductions (SALT). Listening from left to right are John Leonardi, chief executive officer of the Buffalo Niagara Association of Realtors, and Congressman Brian Higgins. Credit Michael Mroziak, WBFO

 

Congressman Brian Higgins says what the proposal amounts to is a break for the nation’s wealthiest people, but not so much for millions more Americans.

“The proposed tax reform that the Trump Administration is pushing, and that the leadership in the House and Senate are supporting, would give three million very wealthy Americans a tax cut each year of over $220,000,” Higgins said. “That same plan that they’re pushing would give 250 million Americans, the people that you I know, a tax cut of about $200.”

But Erie County Executive Mark Poloncarz says those same people would also see tax increases with no more state or local levies for which they may claim a deduction. He estimates the net result as an $815 increase for homeowners. 

“If there’s $815 more dollars that have to be paid by the average homeowner on an annual basis, that’s $815 they won’t have in their pockets to go shopping, to go to Bills games, to go to stores, to go to entertainment, which means that’s a loss of sales tax,” Poloncarz said. 

The home selling industry warns that the elimination of SALT would also deal an economic blow to the housing market. The National Association of Realtors commissioned Price Waterhouse Coopers to conduct a study on just how much losing SALT would impact real estate. The report suggests average home values would quickly drop 10 percent because the loss of SALT would take many would-be home buyers off the market.

Information provided by Erie County Executive Mark Poloncarz’s office lists the most recent numbers available showing the economic impact of state and local tax (SALT) deductions on the eight counties of Western New York. Credit Office of Erie County Executive

“According to the IRS, nearly 80 percent of the mortgage interest payments claimed on deductions are from incomes of $200,000 or less,” said John Leonardi, chief executive officer of the Buffalo Niagara Association of Realtors. “Eliminating the deduction for state and local taxes flies in the fact of fundamental tax policy principle, avoiding double taxation.”

Poloncarz added that if there’s a value decrease in the housing market, Erie County loses funds from another important revenue source. Like Higgins, the county executive considers the Trump tax reform plan one designed to benefit the rich at the expense of working class Americans.

“That is unethical. It is uncalled for and something that cannot happen,” he said.

Congressman Higgins has vowed to oppose any effort to eliminate SALT. He sits on the House Ways and Means Committee. So, too, does Republican Congressman Tom Reed. Poloncarz is urging those represented by Reed and Republican Chris Collins to urge their opposition to eliminating the state and local deduction.

2017 Realtor® Good Neighbor Award Winners Better Communities …

WASHINGTON, Oct. 4, 2017 /PRNewswire/ — For 18 years, the Good Neighbor Awards have recognized Realtors® who dedicate countless volunteer hours to help others.  The five individuals named as this year’s REALTOR® Magazine Good Neighbor Award winners serve as an example of how Realtors® reach out in service to help their communities.

The 2017 Good Neighbor Award winners are:


  • Sal Dimiceli, Lake Geneva Area Realty, Lake Geneva, Wisconsin, founder of The Time Is Now To Help;
  • Bryson Garbett, Garbett Homes, Salt Lake City, Utah, founder of Foundation Escalera;
  • Howard W. “Hoddy” Hanna, III, Howard Hanna Real Estate Services, Pittsburgh, Pennsylvania, for Howard Hanna Children’s Free Care Fund;
  • Louise McLean, RE/MAX Solutions, Merritt Island, Florida, founder of Space Coast Association of REALTORS® Charitable Foundation;
  • Kay Wilson-Bolton, Century 21 Troop Real Estate, Santa Paula, California, founder of SPIRIT of Santa Paula.

“It’s amazing how the passion of this year’s Good Neighbor Award winners spurs a ripple effect of generosity among others,” says National Association of Realtors® President William E. Brown, broker-owner of Investment Real Estate in Oakland, California, and founder of Investment Properties. “In addition to devoting thousands of personal volunteer hours and recruiting thousands of volunteer hours from others, this year’s five winners have raised and donated more than $39 million to support their communities.”

Each of the five winners will receive a $10,000 grant for their cause and will be featured in the November/December issue of REALTOR® Magazine. The recipients will be presented with crystal trophies on Saturday, November 4, during the 2017 REALTORS® Conference Expo in Chicago.

The Good Neighbor Awards have been presented annually since 2000 by NAR’s REALTOR® Magazine.  More than $1.1 million in grants have been awarded to the winners’ charities since the inaugural award. Videos about the winners are being released today at the links below.

Sal Dimiceli, Sr., Lake Geneva Area Realty, Lake Geneva, Wisconsin for The Time Is Now To Help
Dimiceli founded a nonprofit to ease the suffering of people living in poverty. He personally responds to requests for help by providing financial counseling and addressing individual needs, whether it’s paying overdue rent to prevent eviction or providing emergency food assistance, transportation or child care so a person can hold a job.

Bryson Garbett, Garbett Homes, Salt Lake City, Utah for Foundation Escalera
Garbett founded a nonprofit that provides access to education to children in the rural Chiapas region of Mexico. In 18 years, his organization—which has built 177 classrooms and provides high school scholarships—has helped nearly 100,000 students.

Howard W. “Hoddy” Hanna, III, Howard Hanna Real Estate Services, Pittsburgh, Pennsylvania for Howard Hanna Children’s Free Care Fund
Hanna leads a nonprofit that donates millions to children’s hospitals to fund treatment for children without insurance or whose treatment isn’t covered by insurance. Since 1987, Hanna and his company’s 9,000 real estate professionals in eight states have raised and donated more than $14 million

Louise McLean, RE/MAX Solutions, Merritt Island, Florida for Space Coast Association of REALTORS® Charitable Foundation  
McLean founded a nonprofit to support the more than 2,200 homeless children in Florida’s Brevard County with necessities such as food, clothing, school supplies, glasses and toiletries. They also provide nonessentials like sports equipment, band instruments and even college scholarships, allowing children to further their education. 

Kay Wilson-Bolton, Century 21 Troop Real Estate, Santa Paula, California for SPIRIT of Santa Paula
Wilson-Bolton founded Many Meals, which feeds up to 600 people a hot meal every Wednesday. She also distributes 30,000 pounds of food per month through a food bank and, as an ordained chaplain, runs a reception center behind her real estate office where she counsels people in need. 

In addition to the winners, five Realtors® have been recognized as Good Neighbor Awards honorable mentions and will each receive $2,500 grants. Deborah Berg, Berkshire Hathaway HomeServices, Birmingham, Michigan, for the United Methodist Women’s Rummage Sale; JoAnn and Joseph Callaway, Those Callaways Real Estate, Scottsdale, Arizona for Salvation Army; Lara Dolan, Keller Williams Realty Consultants, Roswell, Georgia for Cystic Fibrosis Foundation; Mony Nop, Mony Nop Real Estate, Livermore, California for Mony Nop Foundation; Donna Ting, Tri Isle Realty Development Co., Wailuku, Hawaii for La’akea.

Since the 10 finalists were announced on September 5, the public cast more than 93,000 votes to determine who would be named the Web Choice Favorites. The top three vote getters will receive bonus grant money courtesy of Good Neighbor primary sponsor realtor.com®

The Good Neighbor finalist with the most votes– JoAnn and Joseph Callaway of Those Callaways Real Estate in Scottsdale, Arizona–will receive an additional $2,500 bonus donation for The Salvation Army on top of $2,500 earned for being an honorable mention. The Callaways have raised more than $1.25 million to benefit The Salvation Army by recruiting Realtors as bell ringers and through an innovative program that increased donations of big-ticket items to thrift stores.

Two more Good Neighbors will receive $1,250 in bonus money for getting the next highest vote totals. Deborah Berg of Berkshire Hathaway HomeServices in Birmingham, Michigan, for managing more than 700 volunteers at the United Methodist Women’s Rummage Sale and raising $225,000 per year for nonprofits.

Deborah is joined by Howard W. “Hoddy” Hanna, III of Howard Hanna Real Estate Services, Pittsburgh, Pennsylvania, who cofounded and leads the Howard Hanna Children’s Free Care Fund, which pays for sick children to be treated at hospitals when insurance doesn’t pay.

REALTOR® Magazine‘s Good Neighbor Awards is supported by primary sponsor realtor.com® and Wells Fargo Home Mortgage. Nominees were judged on their personal contribution of time as well as financial and material contributions to benefit their cause. To be eligible, nominees must be NAR members in good standing. More information about the Good Neighbor Awards winners is available at nar.realtor/gna.

Realtor.com® is the trusted resource for home buyers, sellers and dreamers, offering the most comprehensive database of for-sale properties, among competing national sites, and the information, tools and professional expertise to help people move confidently through every step of their home journey. It pioneered the world of digital real estate 20 years ago, and today helps make all things home simple, efficient and enjoyable. 

Wells Fargo Home Mortgage is the nation’s leading originator and servicer of residential mortgages, offering home loans to consumers through the country’s largest network of mortgage locations and bank branches, online, and via phone. With more than 7,500 Home Mortgage Consultants across the country and robust digital capabilities, Wells Fargo is committed to meeting Realtor® expectations and homebuyer needs. Focused on a culture of caring for communities, Wells Fargo is a proud sponsor of the Good Neighbor Awards to recognize the extraordinary contributions made by Realtors® in the communities where we, together, live and serve. 

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing over 1.2 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, Blogs and Videos” tab on the website.

 

View original content with multimedia:http://www.prnewswire.com/news-releases/2017-realtor-good-neighbor-award-winners-better-communities-through-incredible-volunteer-work-300531013.html

SOURCE National Association of Realtors

Related Links

http://www.realtor.org

Clarksville Association of Realtors shows support for unified local government

CLARKSVILLE, Tenn. – (CLARKSVILLENOW) The Clarksville Association of Realtors (CAR) announced support for a unified local government at a recent Unified Government Charter Commission meeting. The endorsement came from a letter of support signed by 2017 CAR President, Debbie Reynolds.

“We, as an association of nearly 850 real estate professionals, believe strongly that a unified local government will best serve not only the homeowners of Clarksville/Montgomery County, but our entire community,” said Reynolds.

“CAR believes that a unified government will also lead to decreased property taxes, an increase in economic development, and a unified voice in our state legislature,” said Reynolds.

“The Clarksville Association of Realtors does a lot for the community, and we appreciate their support as we move forward to write a charter that will represent all of us,” said Katie Gambill, President General Manager of 5 Star Media Group and Charter Commission Committee member.

The Clarksville Association of Realtors has over 850 active REALTOR members and 70 Affiliate Partners that work together to improve the public awareness of the value of Realtors to the community and to the benefits of their services. The Clarksville Association of Realtors also serves to promote the success and future developments of its members in association with the Tennessee and National Associations of Realtors.

Why you shouldn’t fear the Fall housing market

It is the time of year when cobwebs and bones in your yard are expected. While some retailers have had Halloween costumes on display since the Fourth of July, the calendar has now caught up and the celebration of Halloween has begun. 

For potential home buyers and sellers, the Halloween season can bring a different kind of fear – FOMO, or the fear of missing out. It is common knowledge that spring and summer are the hot months for the real estate market and those who didn’t take action already may fear they have missed out on their housing opportunity. 

Fear not!

The market is still very much alive for both buyers and sellers. Allow me to share a few things to hopefully help bury any lingering fears you may have. 

Fear of no options

Being unable to find a home that matches your needs is much like digging through your child’s post-Trick-or-Treat bag to find only raisins and a toothbrush. Housing inventory may seem like a ghost town, but there are opportunities for buyers. One of the keys to securing the home you want is preparation. Your realtor can guide you how to be ready and equipped to act quickly. 

Despair of losing your dream home

Don’t let horror stories of losing out on the perfect property from other would-be buyers frighten you away from the market. Multiple offer situations are real in our market, but with a little patience and a realtor, your chances of finding and getting your dream home increase. Plus, the housing market does slow in the fall, meaning buyers have less competition for properties.

Dread of disappearing buyers 

September’s housing statistics for our region showed more than 3,000 home sales were pending heading into October. That stat alone shows homeownership is still happening in Middle Tennessee, and for home sellers, there’s no need to fear buyers may ghost away. In fact, some consider those who are searching for a home in the fall and winter to be some of the most serious buyers in the market. 

Don’t let the regret of not acting sooner in the market haunt you. Your realtor is your real estate professional who isn’t afraid of things that go bump in a listing, the dark or the market. Your realtor will go first, leading you fearlessly through your transaction.

Scott Troxel is president of Greater Nashville REALTORS®. A realtor is a member of the National Association of Realtors who subscribes to its strict code of ethics. Contact him at 615-294-2975 or scott@scotttroxel.com.

Koch Group Says Realtors Among Those ‘Jeopardizing’ Tax Overhaul

A group backed by billionaire industrialists Charles and David Koch unveiled a television and digital campaign Wednesday that claims “corporate welfare” threatens Republican efforts to dramatically alter the U.S. tax code.

The Freedom Partners Chamber of Commerce is targeting the politically powerful National Association of Realtors for opposing a proposal by the White House and Republican lawmakers to double the standard deduction, as well as several entities that represent renewable and energy efficiency interests advocating other tax incentives. The groups are “jeopardizing tax reform,” the Koch-backed group said in a statement.


Charles Koch

The effort is part of what the political network has described as a multimillion-dollar campaign to build public support for a streamlined federal tax system. In addition to paid advertising, the group has created a website it says will “spotlight efforts to promote and protect corporate welfare.”

The website says “millions of dollars are being spent to mobilize an army of lobbyists in Washington to protect industry-specific carve outs not explicitly addressed” in the tax framework presented by President Donald Trump and Republicans. “If lawmakers cave to this pressure and start picking certain preferences to keep, it could jeopardize the entire effort,” it says.

NAR is opposed to doubling the standard deduction because the group says it would reduce the value of the mortgage deduction, curbing the incentive to purchase a home and leading to a “a de facto tax increase on homeowners.”

How Trump Tax Plan Would Alter Mortgage Interest Deduction

WASHINGTON (AP) – Each year, taxpayers subsidize America’s homeowners by roughly $70 billion, with the benefits flowing disproportionately to coastal areas with high incomes and pricey homes, from New York and Washington to Los Angeles and San Francisco.

The subsidy for homeowners comes in the form of a deduction from their taxes for the interest they pay on their mortgages. An affluent New Yorker, for example, would have saved an average of $3,694 in 2015, according to an analysis of IRS data released Wednesday by the real estate company Apartment List. In metro Los Angeles, the deduction was worth an average of $4,568, in San Francisco still more: $5,500.

But under President Donald Trump’s tax proposal, some Americans would likely be steered away from this tax break. Here’s why: Trump’s plan would double the standard deduction, which taxpayers can take if they don’t itemize deductions. The doubled standard deduction could exceed the savings many receive now from itemizing their expenses for housing, state and local taxes and related costs.

But the Trump plan would also eliminate many existing itemized deductions, including those for state and local taxes, so that some people who now itemize might end up paying more.

The president’s proposal would essentially marginalize the use of the mortgage interest deduction, which is the government’s primary form of direct housing assistance: It distributes three times more money this way than it does in the form of vouchers for impoverished renters.

Trump administration officials say their tax plan is designed to benefit the middle class. Yet it’s not clear from the scant details of the framework released so far how many families would enjoy lower tax bills and how many would face higher bills.

Even though the Trump measure would preserve the mortgage interest deduction, it’s confronting resistance from the real estate industry because it would likely reduce the number of people seeking the deduction.

Estimates by the real estate firm Zillow suggest that someone buying a home worth at least $305,000 today would still qualify for the deduction. But under the Trump plan, only homes worth $801,000 or more would receive the deduction.

This has led the industry to push back against the plan.

“We don’t want to go backwards – we don’t want to lose what incentives that we have,” said Jamie Gregory, deputy chief lobbyist for the National Association of Realtors.

The National Association of Homebuilders says it might be open to eliminating the mortgage interest deduction so long as homeownership was protected elsewhere in the tax code through the use of a possibly more generous tax credit. (A credit, which is subtracted from the amount of tax someone owes, is more generous than a deduction, which reduces the amount of income to be taxed.)

The advantage of moving to a credit is that more homeowners would be eligible to claim it than the 34 million who receive the mortgage interest deduction, said Rob Dietz, the homebuilder association’s chief economist. But there are no signs that the idea of a credit has gained traction within Congress or the White House.

Trump proclaimed in June that his tax plan would accelerate economic growth to ensure that “hard-working Americans enjoy a fair chance at becoming homeowners.”

Chris Salviati, a housing economist at Apartment List, noted that the main effect of the mortgage interest deduction is to enable people to spend more on homes rather than to increase ownership, which is near a 51-year low.

Though the benefits of tax breaks for housing skew most toward people in the top 20 percent of income, they also tend to help middle class Americans. Roughly half the households in metro Washington with incomes between $74,000 and $112,000 – a group that could be considered middle class in that area – take the mortgage interest deduction and saved an average $2,530 in 2015. The average home price in the Washington area is just below $400,000.

Areas with lower home values tend to benefit less from the deduction. A similar group of middle-income households in Indianapolis – where the average home cost around $140,000 – saved only $655 on average in 2015, and just 19 percent of them took the deduction. The savings for middle-income households are just $691 in Cleveland, $666 in Little Rock, Arkansas, and $673 in Memphis, Tennessee.

Yet the Apartment List analysis also indicates that Trump’s tax plan would do little for lower-income households. A mere 11 percent of households with income below 80 percent of the national median qualify for the mortgage interest deduction or rental housing vouchers.

Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Membership Memo: Up Close and Personal


By / Oct 11, 2017
(FotografiaBasica/Getty Images)

It helps people to stop thinking about themselves and their departmental work and to start thinking about the mission of the organization and the needs of membership.

Use personas to get to know members. Here’s how the National Association of Realtors is doing it with its 1.3 million members.

How well do you know your members? Can you list their favorite sports teams, TV shows, books, or magazines? Hilary Marsh, president and chief strategist of Content Company, says getting to know your members’ habits can tell you a lot about their unmet needs.

Before she worked as a consultant, Marsh was managing director of Realtor.org, the website responsible for keeping the National Association of Realtors’ 1.3 million members informed daily. While the web team could identify readers’ news and information habits, NAR had a harder time understanding members as various audience groups. To get up close and personal with members, Marsh conducted an exercise in building “empathy-based personas.”

“We found it to be a transformative process for the association,” she says. “It helps people to stop thinking about themselves and their departmental work and to start thinking about the mission of the organization and the needs of membership.”

The challenge—to organize more than a million members into four identities—wasn’t easy. A cross-section of staff from NAR’s two offices in Washington, DC, and Chicago met to consider 14 proposed identities, eventually whittling them down into four personas. The persona approach was led by an outside partner, Esteban Gonzalez, founder and principal strategist of Brand Therapy, and NAR used member focus groups to test their work.

“You start to say, I know that person, I know their motivations, and you can think about them qualitatively,” Marsh says. “By the end of this exercise, we were friends with these people. We felt like we knew them.”

So much so that Marsh assigned names, ages, and personal preferences to the four personas. She even created life-size cutouts of each one and posted them in her office. Picturing the person helps NAR staff to think critically about members’ motivations, she says.

Anthony is the 29-year-old, up-and-coming, type-A real estate agent who lives in the New York City suburbs and watches Late Night with Conan O’Brien. Meanwhile, Susan is the 54-year-old veteran agent from St. Louis who likes to read O, The Oprah Magazine and watch HGTV.

The goal was not to pigeonhole members into a specific identity, but rather to convince NAR staff to put interests aside and serve audiences according to their information and content habits.

“Knowing what Anthony looks like didn’t help us, but knowing what matters to him did,” Marsh says. “You’re seeking to draw upon experience, so you can think about what members want and how and when they want it.”

With the personas in mind, NAR redesigned its website and member newsletters. “Coming out of this, we knew how to reach Anthony or how to write to Susan,” Marsh says. “When staff came to my office with a question, we looked at each member and asked, ‘What would they do?’”

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