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Ohio budget proposal penalizes real estate consumers

The Ohio budget proposal seeks to add a five percent tax on services rendered in the state, but Commissioner Testa’s testimony failed to address or understand the 20 times a home buyer would be taxed during the buying process.

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Ohio budget proposal includes tax on real estate services

News organizations, interest groups, and yes, individuals, have already spent countless hours analyzing Governor Kasich’s proposed Budget 2.0 which was released in early February, and the potential implications of a 5% sales tax on services provided to consumers. It would have been nice, had Tax Commissioner Joe Testa boned up even slightly on the real estate industry prior to his testimony before the Ohio House Finance and Appropriations Committee.

According to the Great Big List of Exempt/Non-Exempt Services, some things in the housing industry would remain untouched by the Ohio budget changes – construction, renovation, repairs and residential rent/leases. During his testimony, Commissioner Testa solely focused on one of the non-exempt real estate service items; and he (I feel) completely botched it. Granted, time was limited, but by only mentioning real estate commissions, not comprehending the way the majority of real estate transactions work, and by not taking into account all of the things that truly go into buying or selling a home, he really kind of blew off the industry’s concerns, and those of future buyers and sellers.

How real estate commissions actually work

Be they members of the National Association of Realtors® or not, it is licensed real estate brokers who collect commissions earned on the sale of real estate. To do otherwise would violate Ohio law, and when Commissioner Testa says all Realtors® would collect the sales tax, but this is not correct. 

The majority of real estate listings are listed as Exclusive Right to Sell, where the sellers pay the commission; they and not the buyers would be charged the sales tax on the commission, or service rendered.  Claiming that something is “not anti-competitive” because everyone will be doing so (kind of like that old line about jumping off a bridge our Mom’s used to say, right?) is about the furthest thing from the accuracy and the truth as one can get.

More services in real estate than just Realtor commissions

In many real estate transactions, as we addressed previously, there are inspections (pest, general home, well, septic, radon, & lead – and maybe meth in certain areas), appraisals, home warranties, loan broker fees, certain title fees, land surveys, attorney fees, (think deed prep) and don’t forget that 5% tax on the listing broker’s commission, all of which would probably be subject to a 5% sales tax paid by consumers. There are a great number of other things that may not be part of a “normal” deal, but are becoming increasingly more common, and when all tallied up – 5% here, 5% there, that could wind up devastating the real estate consumer.

Years before purchasing a home, one of the first things a prospective buyers does, is get a credit report and score.  If they happen to buy one, they may be charged a 5% sales tax. If that buyer has credit issues, and then seeks local debt counseling, and pays for it, boom, 5% sales tax. 

The same is true for a current owner who is seeking relief in the form of a loan modification or principal reduction, and may because of a program’s requirements, have to go into a debt counseling program in order to qualify, will then be forced to pay a 5% sales tax. 

Tax could hit consumers 20 times during a transaction

Speaking of the owner who is struggling or severely underwater, enter the short sale, which in Ohio during the first quarter of 2012 accounted for seven percent of all real estate transactions and rising steadily since 2001. Often in addition to all the other “normal” items in these transactions, there often are multiple appraisals (therefore multiple sales tax charges), sellers often seek the advice of accountants, attorneys and even investment counseling, their services would be subject to the 5% sales tax charged to the consumer. And what of the short sale negotiator or facilitator? Whoever pays their fee will be hit with that 5% sales tax as well.

The 5% sales tax has the potential to hit two consumers at least 20 times in one real estate transaction. ONE. Is it so vital to Ohio’s economy, which is driven in part by a healthy real estate market, to further hinder the ability to buy and sell homes by tacking on additional fees to consumers? Is this honestly the way to improve home ownership in this state which has been on a steady decline over the last seven years?

Katie Cosner, occasionally known as Kathleen, or KT, is a Realtor® with Cutler Real Estate and is active in her local Board of Realtors® on the Equal Opportunity & Professional Development Committee. She has been floating around online for a number of years, and is on facebook as well as twitter. While Katie has a few hardcore beliefs, three in the Real Estate World to live and die by are; education, ethics, and the law - insert random quote from “A Few Good Men” here. Katie is also an avid Cleveland Indians fan, which really explains quite a bit of her… quirks.

Opinion Editorials

3 things to do if you *really* want to be an ally to women in tech

(EDITORIAL) Diversity is known to strengthen the overall performance of a company and its teams, and there are a number of ways you can be an ally to the talented women already on your workforce.

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More and more women are leaving their positions with tech companies, citing lack of opportunity for advancement, wage gaps and even hostile working conditions as some of the reasons why.

What’s better for the tech industry and its employees than cultivating inclusive and diverse departments? Diversity is known to strengthen the overall performance of a company and its teams, and there are a number of ways you can be an ally to the talented women already on your workforce. To name a few:

1. Be open to listening to different perspectives.

It can be awkward to hear so many reports of workplace politics stacking against women, especially if you’re not a woman!

Instead of getting uncomfortable or defensive – ask open ended questions and be interested in a perspective that isn’t yours and may be unfamiliar.

Don’t seek to rationalize or explain the experiences you’re hearing about, as that can come off as condescending. It’s common for women to be interrupted or spoken over in team gatherings. If you notice this happening, bring the conversation back to where the interruption began. Offering your ear and counting yourself as responsible for making space will improve the overall quality of communication in your company.

Listening to and validating what women have to say about the quality of their employment with a company is an important step in the right direction.

Expressing something as simple as “I was interested in what you had to say – could you elaborate on your thought?” can help.

2. Develop an Employee Resource Group (ERG) program.

An ERG is a volunteer-based, employee-led group that acts as a resource for a particular group of employees. An ERG can help to foster inclusiveness through discussion, team-building activities and events. It’s common for a department to have only one or two women on the roster.

This can mean that the day to day feels disconnected from concerns commonly shared by women. disjointed it might feel to be on a high performing team, without access to relatable conversations.

3. Be responsible for your company’s culture.

Chances are, your company already has some amazing cultural values in place. That said, how often are you checking your own performance and your co-workers performances against those high standards? Strong company culture and values sound great, but whether or not they’re adhered to can make or break the mood of a work environment.

Many women say they’ve experienced extremely damaging and toxic cultural environments, which lead to hostility, frustration, and even harassment. Take action when you see the new woman uncomfortable with being hit on at team drinks.

Call out those who make unfriendly and uncouth comments about how women perform, look, or behave.

Setting a personal threshold for these kinds of microaggressions can help you lead by example, and will help build a trustworthy allyship.

(This article was first published here in November, 2016.)

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Opinion Editorials

Serial procrastinator? Your issue isn’t time management

(EDITORIAL) Need a hack for your time management? Try focusing on your energy management.

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Your author has a confession to make; as a “type B” personality who has always struggled with procrastination, I am endlessly fascinated by the topic of productivity and “hacking your time.”

I’ve tried most of the tricks you’ve read about, with varying degrees of success.

Recently, publishers like BBC have begun to approach productivity from a different perspective; rather than packing days full of to-do items as a way to maximize time, the key is to maximize your mental energy through a different brand of time management.

So, why doesn’t time management work?

For starters, not all work time is quality time by nature. According to a study published at ScienceDirect, your average worker is interrupted 87 times a day on the job. For an 8-hour day, that’s almost 11 times per hour. No wonder it’s so hard to stay focused!

Second, time management implies a need to fill time in order to maximize it.

It’s the difference between “being busy” and “being productive.”

It also doesn’t impress your boss; a Boston University study concluded that “managers could not tell the difference between employees who actually worked 80 hours a week and those who just pretended to.” By contrast, managing your energy lets you maximize your time based on how it fits with your mental state.

Now, how do you manage your energy?

First, understand and protect the time that should actually go into deep, focused work. Studies continually show that just a few hours of focused worked yield the greatest results; try to put in longer hours behind that, and you’ll see diminishing returns. There’s a couple ways you can accomplish this.

You can block off time in your day dedicated to focused work, and guard the time as if it were a meeting. You could also physically retreat to a private space in order to work on a task.

Building in flexibility is another key to managing your energy. The BBC article references a 1980s study that divided students into two groups; one group planned out monthly goals, while the other group planned out daily goals and activities. The study found the monthly planners accomplished more of their goals, because the students focusing on detailed daily plans often found them foiled by the unexpected.

Moral of the story?

Don’t lock in your schedule too tightly; leave space for the unexpected.

Finally, you should consider making time for rest, a fact reiterated often by the BBC article. You’ve probably heard the advice before that taking 17 minute breaks for every 52 minutes worked is important, and studies continue to show that it is. However, rest also includes taking the time to turn your brain off of work mode entirely.

The BBC article quotes associated professor of psychiatry Srini Pillay as saying that, “[people] need to use both the focus ad unfocus circuits in the brain,” in order to be fully productive. High achievers like Serena Williams, Warren Buffet and Bill Gates build this into their mentality and their practice.

Embracing rest and unfocused thinking may be key to “embracing the slumps,” as the BBC article puts it.

In conclusion, by leaving some flexibility in your schedule and listening to your body and mind, you can better tailor your day to your mental state and match your brainpower to the appropriate task. As someone who is tempted to keep a busy to-do list myself, I am excited to reevaluate and improve my own approach. Maybe you should revisit your own systems as well.

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Opinion Editorials

How the Bullet Journal method has been hijacked and twisted

(EDITORIAL) I’m a big fan of the Bullet Journal method, but sticker-loving tweens have hijacked the movement. Worry not, I’m still using black and white bullet points with work tasks (not “pet cat,” or “smile more”).

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It’s taken me some time to come around to the Bullet Journal method, because it took me some time to fully understand it (I have a tendency to overthink simplicity). Now that I understand the use, I find it very beneficial for my life and my appreciation for pen-to-paper.

In short, it’s a quick and simple system for organization tasks and staying focused with everything you have going on. All you need to employ this method is a journal with graph or dotted paper, and a pen. Easy.

However, there seems to be this odd truth that: we find ways to simplify complicated things, and we find ways to complicate simple things. The latter is exactly what’s happened with the Bullet Journal method, thanks to creative people who show the rest of us up.

To understand what I’m talking about, open up Instagram (or Pinterest, or even Google) and just search “bullet journal.” You’ll soon find post after post of frilly, sticker-filled, calligraphy-laden journal pages.

The simple method of writing down bullets of tasks has been hijacked to become a competitive art form.

Don’t get me wrong, I like looking at this stuff because I dig the creativity. But, do I have time to do that myself? No! For honesty’s sake, I’ve tried just for fun and it takes too much damn time.

With this is mind, this new-found method of Bullet Journaling as an art is something that: a) defeats the purpose of accomplishing tasks quickly as you’re setting yourself back with the nifty art, and b) entrepreneurs, freelancers, executives, or anyone busy would not have time for.

Most of these people posting artistic Bullet Journal pages on Instagram are younger and have more time on their hands (and if you want to spend your time doing that, do you, man).

But, it goes against the simplistic method of Bullet Journaling. The intent of the method.

And, beneath the washi tape, stickers, and different colored pens, usually lies a list of: put away laundry, feed cat, post on Insta. So, this is being done more for the sake of art than for employing the method.

Again, I’m all for art and for people following their passions and creativities, but it stands to reason that this should be something separate from the concept of Bullet Journaling, as it has become a caricature of the original method.

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