I Think Thee Protest Too Much
Lloyd Sherman, April 23, 2021
I read with interest and some frustration of my own with an article in this week’s HSV Voice titled “Village says 50 percent commission unfair to lot owners.” First, I’d like to dissect the headline. It states Village when in fact it is one individual who himself is actively involved in his own business of selling lots. It also stated “unfair to lot owners.” How so? I fail to understand how moving POA-owned lots is unfair to other lot owners. People who choose to sell their lots or houses FSBO are doing so with the full knowledge they are not paying commissions and can sell their lots or houses for whatever the market will bear.
This article also conflates the two POA/Realtor programs:
Real Estate Partner Program (REPP) – When Village Homes & Land was closed, the POA reached out to the realtor community, and collectively the REPP was established. This program is a true lead program whereby leads coming from the POA website, shows, etc. are distributed to the participating realtors on a rotational basis. Many of these leads are also part of the Discovery Package program and this program has been working very well since January 1, 2020. Realtors/Brokers do pay for these leads just as they would for any lead program they might be involved in.
Lot Program – Effective January 1, 2021 this totally separate program was put in place following an all-day meeting of the POA, Real Estate Brokers, POA Board and invited guests including Dennis Simpson who was the author of the article that stimulated this clarification. This program is targeted only on POA Owned lots. It is well known that the number of lots going into a nonproductive status has been on the rise and something needed to be done to stop the bleeding. Nonproductive lots is what is unfair to other property owners. We get zero revenue for these and have to continue to pay taxes so it becomes a double hit on our financials. Thankfully, the POA database provided enough detail that the lots which are most marketable could be identified, priced, and provided to the real estate community for sale, thus making them productive and revenue-generating. Mr. Simpson seemed to indicate that the 50% commission was what was unfair. Let’s dissect that theory by using pure numbers. Prior to January 1, 2021, it was not unusual to see a POA lot sold for $2,500 or less. In the real estate commission world, the minimum commission typically charged for a lot listed on the MLS was $1,500. Those in the real estate industry know that using that number what was likely to happen was that one broker listed the property and likely another would wind up selling it. So, the $1,500 gets split and $750 goes to each brokerage. For ease of calculations, let’s assume that the agent has a 50/50 split with the broker. That means for processing this transaction, the agent will receive $325 when the lot closes. For those attempting to make a living in the world of real estate, these kinds of results don’t rise to a level where agents are going to be pursuing the sale of lots
Under the revised lot program, the lots are now priced by a team of real estate professionals who are active in the business and the target was that lots wouldn’t be listed for anything less than $5,000. It was also agreed to stimulate interest and the sale of these lots that the commission structure must make it worth the agents’ time to pursue the sale of lots. It is now in the best interest of the real estate community to sell these lots at absolutely the highest price possible. Their commission is based directly on their ability to get premium prices where they can. And it is working. Figures show that through March of 2020 exactly zero POA-owned lots had been sold. Through March of 2021, 29 have been sold (10 of those by Realtors).
So based on what was being done previously, besides what I have pointed out above, let’s see how the finances work out:
Old – $2,500 lot sale; $1,500 commission to real estate community = $1,000 to POA
New – $5,000 lot sale; $2,500 commission to real estate community = $2,500 to POA
So, while I understand that those in the business of selling lots might see this as unfair competition to their personal efforts, the very fact that a program that places a higher value on lot sales should be one applauded instead of condemned. Additionally, if those who own lots wanted to engage the real estate community in moving their inventory, they have the option of taking similar actions to have the real estate community sell or push their inventory.
Lot sales will hopefully result in more new builds which help the Village. Also, if we have a liability lot in our inventory, shouldn’t we be doing everything we can to take it off the books as a liability?
Click here to read the Hot Springs Village Voice article written by Lewis Delevan and titled, “Village says 50 percent commission unfair to lot owners.”
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Thank you for reading. If you like, please comment below. We love to hear your opinion, but comments must be made using your first and last real name, or they will not be accepted. If you would like to submit an article for publication, please contact us through this website. Be sure to bookmark this website. Click here to visit the Hot Springs Village People Facebook Group, also known as POG (Property Owners’ Group).
Kirk Denger
04/23/2021 — 8:03 pm
County records show POA lots being sold for Zero dollars to builders. How many of the other 19 lots fit this catagory?
Melinda Alvord
04/24/2021 — 11:41 am
Typically, article headlines are not written by the reporter, but by a headline writer staff person. Not sure why the word “village” was used in this headline, instead of “villager”, which is what I think was intended. My guess is, a typographical error (since there were several other typos throughout other stories in this week’s edition).
Lloyd, I wonder if you can speak to something I’ve been wondering about during this past year that so many staff and policy changes took place. My question is: What is the status of plans to suspend sales of lots in some areas of little or no development in order to minimize the expenses of providing infrastructure for sparsely developed areas. Second part of same general question: Does the POA still offer/encourage lot swaps with folks planning to build on lots the already own in remote areas with little or no infrastructure, that we would otherwise be required to provide?
I’d appreciate your insights. Thanks.
Lloyd Sherman
04/24/2021 — 2:21 pm
The only way I can respond to the suspension strategy and lot swaps is that they were both under the guidance of Ms. Nalley. I tended to agree with a suspension strategy dependent upon how it was implemented. As you know, our declarations require the POA provide infrastructure regardless of where it is located if a lot owner wants to build. I was never able to receive a straight answer on exactly the POA was in this program. Based on conversations I have had with lot owners who wanted to sell or turn their lots in, they were engaged in conversations about swapping lots. My personal opinion on both of these issues was that it was just too large of a project for it to be managed properly.
It continues to be difficult to get answers from the POA such as the item brought up by Kirk Denger. We don’t get details on what the POA does or doesn’t do with many things but we have no way of knowing what the conditions were of the 19 lots mentioned. This whole lot is is a can of worms because approximately 50% of all POA Owned lots have a potential cloud over the title. Many transferred hands via Quit Claims or handed down and determining if there is a actual clear title can be challenging.
Lesley Nalley
04/25/2021 — 1:37 pm
Mr. Sherman, as you will recall from your affirmative vote as a board member, lot strategies were part of the Comprehensive Master Plan that was rescinded, in its entirety, a year ago, followed by various written and verbal directives to staff and volunteers. Those actions (and subsequent such commentary) contributed to significant talent/knowledge loss (both paid and volunteer) and confusion among all as to what plan/direction was to be followed. It is good to hear that you now support a suspension strategy. However, to suggest that the POA would take away individual property owner rights or its Declaration obligations only perpetuates the myth that the POA was doing something other than attempting to responsibly manage resources it owns or could own in a lot swap/purchase scenario. After all, intentional land use management is vital to any community’s long term financial stability, no matter what you call that plan. Having no plan, regardless of a community’s current developed state, is irresponsible.
The Board’s official motion language and internal communications clearly show they directed that NO staff or volunteer resources were to be used on ANY comprehensive master plan component and similar language was used to revoke ALL restrictions/zoning/code enforcement matters that were not addressed in a condensed/resurrected document. Was there some subsequent, whether public or private, official Board action altering this sweeping directive or implementing new or revised plans and rules? My apologies if I’ve missed any official, public actions. If not, then I fail to see where current or former employees and volunteers have a responsibility for any implementation of components therein. In fact, the Association is likely in the delicate situation of not being able to defend actions taken by the POA that are contrary to that prior vote.
May I again, respectfully, suggest that the POA Board officially address the liability, confusion and uncertainty created by those sweeping 2020 actions, thereby allowing the community, employees and volunteers to move forward with transparency and a clear direction.
As a side note, Susan Miller, that was the same thought I had about a possible Sherman Anti Trust violation. Hopefully the actual agreement was misstated here and there were no Realtors entering into an arrangement that could be construed as price fixing. A simple records request of the agreement and related POA board action would likely clear things up though.
May the newly elected board be firmly committed to professionally, transparently and ethically leading HSV forward. My sincere, best wishes to all in that pursuit.
Lloyd Sherman
04/25/2021 — 8:31 pm
Ms. Nalley,
Your time has past as mine has. Butt out. While your intentions might have been honorable, your execution was not. You failed to listen to the experience around you and you knew best. Not a good strategy no matter what industry you are in. You were in a prime position to make a difference but you wanted to take the Village a direction the majority did not want. Until people realize this is a property owner driven organization, and not staff driven, the divide will continue. At least I still live here; you don’t. Butt out!
Your CMP was nothing more than a pipe dream and not an actual business plan. How you got pulled into that government-driven environment is not important anymore. Our property owners deserve to determine our future and not some bureaucrat who determines what is best for them.
I hold no animosity toward your beliefs or approach other than I totally disagreed with them and I hope the best for you in the future and hope you understand you were battling against the very people you serve, can adjust how you approach the job market in the future.
I know you still own a lot, and according the Declarations that gives you equal footing with people who reside here fulltime. In my opinion lot owners should have a fractional voting right of the people who live and use our facilities on a regular basis.
I don’t expect you to understand or agree with my point of view, but I am okay with that.
Sam Taylor
04/25/2021 — 9:20 pm
Agree completely with Lloyd’s last statement. My only regret about the CMP was that it was ever introduced into the Village. It was not a fit, and anyone who resisted the will of the Village to stubbornly implement such a poor fitting plan did not deserve to keep her position here, and she needs to move on just as we have. We still not have recovered from that terrible $500,000 experiment!
Lesley Nalley
04/25/2021 — 10:11 pm
Mr. Sherman, do not expect me to “butt out” when you name me in a public post and drag me into an issue that you supposedly settled over a year ago. Frankly, it is reckless, as is your continued targeting of POA staff and volunteers and your suggestion that lot owners deserve a lesser voice.
You have my number, sir, should you wish to offer me any further advice.
Patrick T McCarthy
04/25/2021 — 7:50 am
Just a few comments – First, I have long thought, and written to the POA about it, that lot owners should be a primary target to market to. We need building (new roofs) and they already have a lot. Incentives to them or anyone who they can bring in (relatives, friends, etc.) would seem worthwhile – building fee incentives, waiver of some fees for some periods of time, wherever the money is – any incentive within reason that can get a roof. Hey, even a years golf package would be on my list – what will get a new roof?
Second, some lots need a listing and selling broker but many do not. POA lots for sure do not and others could be set up so they don’t either. Let’s put the incentive where it needs to be – whoever sells the lot gets the money (broker/sales person). But don’t get the idea I just want to rain down money on each sale – make it a fair commission and maybe bonuses for additional lot sales in a given year.
Third, and this is especially for POA lot sales but could apply to others too. Incentives last for a period of time (i.e. I want a house built within a specified period, 1 year, 18 months, or…). Any Incentives have to have a timeframe for building if they include Incentives.
Fourth, we need a bigger owner base for what we have here. Think about it, we could probably live on half our land and still not be crowded. We simply need more people here. With that in mind my emphasis would be on how we increase our population – 2 out, 2 in will not do it. We need new roofs to build our population and we have plenty of buildable lots to do it. That should be our emphasis.
In the meantime HSV has a great future – our job is to pay enough to sustain it and make good sound long-term decisions. It may not be for everybody, nothing is, but we are proof that it fits the bill for a lot of people. It’s both a place of multiple activities that can contribute to life and a place of peace and serenity. What more could one ask.
Susan Miller
04/25/2021 — 8:08 am
Basically setting a price on all lots to be $5000 instead of $1000 is called “price fixing.” There are tons of lots owned by the POA that are currently on the Garland County tax appraisers rolls with a $1000 value.
Just pick any street such as “Alicante.” You can see who owns what lots on a simple search.
Setting a minimum price on raw land, versus allowing the market to dictate the price, appears to a violation of the Sherman Antitrust Act, which applies to real estate also. NAR has this listed under their “code of ethics” guidelines which most Realtors have to follow.
Can someone please explain how this isn’t a violation?
Tom Blakeman
04/25/2021 — 1:53 pm
While some lots, POA owned or otherwise are virtually worthless, others are easily worth more than the $5,000 number mentioned. My impression is that POA is focusing on on selling the more valuable ones and not the worthless ones. Keep in mind that a lot with a cloud on title is not only not worth much but is practically unsaleable.
It is also my impression that POA is using the Realtor community to help them establish a realistic market price for the lots POA chooses to put up for sale. That is a normal practice and is done all the time. It is what Realtors do. In the end it is the owner of the property (in this case the POA) who actually sets the lot price, not any Realtor. So long is this is the case there would be no price fixing or anti trust issues.
In addition, if any seller (in this case POA) chooses to offer a large or small commission they may do so. Real estate commissions are all negotiable. POA could choose to offer a 100% commission if they wanted to. Similarly, any Realtor can choose whether or not to work for the commission offered by the seller. Again, no price fixing or anti trust issues.
BTW: Realtors or real estate license holders are permitted to give a market “price opinion” commonly called ‘CMA’ (Comparative Market Analysis). Only a licensed Appraiser can give an opinion of “value”.
Lloyd Sherman
04/26/2021 — 9:27 am
And this is how misinformation spread begins. Nobody arbitrarily set lot prices at $5,000 any more than they set prices at $1,000. Lots, just like houses, have various and fluctuating market values. Even suggesting that establishing the sales prices on lots or houses as a violation of the Sherman Antitrust Act is irresponsible and not founded on fact. The real estate community follows the “code of ethics” and takes them very seriously. Tom Blakeman explained the reality of the situation very well.
Kirk Denger
04/25/2021 — 9:58 pm
CCI cannot transfer their obligation to supply utilities to each lot owner to the POA. Transferring ACC developer rights, in no way includes transferring developer obligations. That would have to be the slickest snake oil deal in land development history. Did any vote of Property Owners concur? Providing utilities to all lots is still a developer obligation that will bankrupt the developer not the POA. As Property Owners, we have no obligation to protect the developer by suspending lots owned by thousands of decades long assessment paying Property Owners, who have been supporting CCI and our infrastructure for fifty years. Also, Thank you Property Owner Lesley Nalley for your welcome insightful input, we’ve had many recent BOD who could not complete a single truthful sentence, let alone complete their elected terms.
Lesley Nalley
04/26/2021 — 1:42 pm
Thank you, Kirk, for valuing the contributions of lot owners, especially considering that you are a long time resident, and for your board service. Though we did not always agree, we could at least talk through differences, be open to an alternative opinion and agree to disagree when needed. The world definitely needs more of that.
Lloyd Sherman
04/27/2021 — 9:39 am
Ms. Nalley – If your last comments weren’t so pathetic, they would be laughable on their very face. Thank you for valuing the input of property owners! Really? You did none of that with your “my way or the highway” management style. The two-tier assessment program set up the environment where property owner disagreements become a reality by placing the burden of future assessment increases on the backs of resident property owners. You have once again attempted to change a conversation to blame others for your and previous Board decisions. And while I am on the subject of past decisions, let me simply say that it was you who set the tone of property owners being against the POA employees. Nothing could be further from the truth. We love the dedication and efforts made daily by most POA employees. You attempted to take a comment that is in support of property owners, turn it and attempt to make those who believe the property owners should be the primary focus and condition your employees at the time to believe that meant they were against the POA employees. Shame on you. The only disagreement that group of property owners had was the management personnel; not the POA employees et al.
Lesley Nalley
04/27/2021 — 8:13 pm
Mr Sherman, you misread and misunderstood my LOT owner remark. Please read it again and consider the context, given the suggestion that lot owner opinions are fractionally valued and unwelcome.
The issue is quite simple. When current land use plans were questioned because of a post that you authored for the purpose of touting some personal dealings with the POA, you resorted to publicly naming and disparaging others. You were called out for it. Despite the private addressing of such behavior and a much more public address in a recent board meeting, you consider such exchanges with fellow property owners and/or employees to be appropriate. I do not and thus we should agree to disagree for the good of the whole.
While you are no longer directly responsible for POA resources, you are important to its future, sir. Hopefully you agree that it is time to move on to something more productive, more unifying and currently more relevant.
HSVP C
04/26/2021 — 12:25 pm
This email comment was sent to me by a friend:
“Several on your website (hotspringsvillagepeople.com) have referred to the POA lot sales program as in violation of the Sherman Anti Trust Act. I do not believe this is true.
“The price-fixing elements of the Sherman Act mostly prohibit price-fixing among competitors. For example, Wal Mart and Sears conspiring to set low lawnmower prices to run Toro out of business. It (Sherman Act) usually deals with setting prices too low. In the case of the POA lots, they are setting prices higher than the market. This does not violate this Act (at least how I remember it). Since the POA owns these lots, they are allowed to set prices and are not conspiring with competitive lots owners.
“Many people confuse the Sherman Act with the Robinson Patman Act which also deals with anti-trust issues and price-fixing. It also prevents prices from being set too low (not too high). An example of a violation would be Wal-Mart setting lawnmower prices at $1.00 to drive out competition.
“These are the basics of these two Anti-trust Acts … although good attorneys could probably argue anything.”
Edited to add: “As a disclaimer: I would advise anyone seeking clarification on this or who is contemplating an action based on these Acts to consult an attorney.”
“One last comment… just to be clear. I did not mean to infer that the Sherman Act or the Robinson Patman Act deal ONLY with setting prices too low. They both can deal with scenarios where prices are set high (both these Acts seek to prevent ANY price-fixing) but I do not believe these are relevant to the POA setting prices for lots they own.”
Posted by Cheryl Dowden
Dennis Simpson
04/28/2021 — 10:11 pm
” Village” here… and I would appreciate the opportunity to State what I specifically said in an email to the editor of the paper. ” If you are having trouble selling your property it might be the fact that the POA is competing against you and offered 5 times the commission you are” this was my opening line of the letter that I sent. The letter was highly and selectively picked through and I was not offered an opportunity to review the content.
It is easy to selectively hold me out as a injured party because I do have many lots for sale.. but the fact of the matter is each and every individual POA lot owner is being impacted by this decision.
My options were a “letter to the editor” (which many other people who have unfortunately sounded deranged have used.. example as the lady who thought that we should take all of the poa employees off of their usual jobs and spend two to three days killing all the snakes in the village) … Or to be interviewed.. I was never interviewed and my one paragraph was selectively redacted.
In a conversation with high level board officials I was specifically told that I also have the option of selling my properties with a 50% commission.. my reply was yes that’s correct but the difference is you, the poa board, are not subsidizing me.. I am subsidizing YOU … another member noted that the POA Lots were really all that good and that they had ONLY LISTED 400 OF THEM…. To which I thought oh great after they sell the first 400 maybe someone will look at my Lots.
Let’s call a spade a spade here the bottom line is the POA would literally give, and has given these lots of way simply to get that precious $39 a month. I am not saying this is right or wrong I am saying that it affects the market in a way that is not fair.
I would welcome a comment from any realtor who has shown any of my golf course Lots along with POA owned lots. I’ve reviewed the situation and pondered launching Ethics investigations as Realtors do have a responsibly to act on the best interest of the client.
Dennis (village) Simpson
Btw, I asked the editor on three separate occasions when the reporter would contact me to interview me and was told each time “he was working on it.” I was never contacted.
Tom Blakeman
04/29/2021 — 7:40 am
Real estate aside for a moment, it has been my observation my that Village Voice, is and has been little more than a political operative arm of the POA for a long time. There is almost no original, factual or investigative reporting. Most articles are slanted to put POA in a favorable light. Perhaps that’s why so many of us have cancelled our subscriptions.
Lloyd Sherman
05/02/2021 — 10:17 am
Dear “Village”,
As it relates to the what turned out to be an escalating number of POA Owned Lots being subsidized by Villagers, through the years many were calling for a solution to stop and reverse this trend. Unless you have a better way of doing that, I suggest that involving the 120+ real estate agents that represent the HSV Board of Realtors was, and is, the answer.
That was the intent of the Lot Program added onto the Real Estate Realtor Program. If you had simply paid attention to the example I provided, you would quickly have realized that every lot sold via the “Realtor” end of this program, actually lowers the subsidy that is placed on the Villagers. The POA as the “owner” of these lots has a right to pay whatever the commission rate this part of the program will bear. That amount was decided upon by the client (the POA). Pricing the lots under this program is done by the professionals who follow exactly the same process they do everyday in establishing a sales price on homes. In the end, the client has the final say-so in what that listing price will be.
Now to your lots. Have you actually listed any of these lots with the real estate community? Why would a Realtor target one of your lots over other lots that are essentially available through the MLS or this program? I know of a few Realtors out there that seem to focus on lot sales and it seems like you could seek them out and negotiate what you as an owner are willing to pay to have them market your properties.
As an aside, I consider Dennis a friend and enjoy the conversations we have had and I hope continue to have. We just have a different slant on this particular program and my interest is lowering the liability that exists on our books.
Susan Miller
04/30/2021 — 8:49 am
As a former Realtor in the Dallas, TX area, for one of the largest Brokerages, (Ebby Halliday) I say and respectfully…be careful!
In Real Estate:
“Price-fixing is the practice of setting prices for products or services, rather than letting competition in the open market establish those prices. In real estate, price-fixing occurs when competing brokers agree to set a standard price for sales commissions, fees, or management rates.”
Also:
“Illegal price fixing occurs whenever two or more competitors agree to take actions that have the effect of raising, lowering or stabilizing the price of any product or service without any legitimate justification.”
Lloyd Sherman
05/02/2021 — 10:21 am
Susan,
It is not the Realtors that set the commission rate on this program. It was the client. In this case the POA. As for placing a value on the lots, the same process is used for establish a sales price as you would have used as a Realtor.
I understand your concern but suggest that if you really have an issue with the real estate community trying to help with an ever-increasing problem, you might want to meet with the POA staff in charge of this program and then allow them to discuss with the brokers.
Sue Posner
05/02/2021 — 2:27 pm
The village was never finished being developed and was foolish for association to take over with it as unfinished. Was incompetent to sell lots with no building commitment up front, so lots got bought for owner discounts on pay for amenities that are not included in assessment charges their use is additional cost as is separate utility use. Lots with no roads no utilities with no commitment to build on sold, so when lot owner got tired of amenity paying or amenities became more than the lot is worth they forfeited or sold lots for cheap to another who only wanted discount on amenities. Never should have given amenity discounts to lots that had no building done to them. BOD who decided to take over an unfinished development thinking they could develop it and manage it was a huge mistake as growth meant to sell lots with a building commitment up front, too many were never sold with that…and that’s not developing, it’s just selling lots. Developers can contract their own builder offering models and may offer a few ready quick move in lots with homes, a few offer financing, some but bulk of lots sold with a up front building commitment usually through a outside financing firm as construction loan then converts to a mortgage at closing after house is built. The developer features such as golf or lake are always a draw for selling lots on or near them, but those are never the bulk of houses or sustainable for new roofs as they are limited amount. Change the lot prices, realtor commission, offer lot swapping, but bottom line is that commitment to build by a buyer is needed up front for their to be sustainable growth. Only developers own reserves yet to be built upon, so those are always for sale by developer, as association never should have accepted any lots not built upon. Would have been better to have worked with the developer instead of trying to be a developer. Association is a bunch of lot owners and resident home owners, not a developing company. Residential community is with a BOD and department personnel can be a non profit organization as in homeowner association located in private or municipality, but never a corporation, different tax structure and rules. Empty lot half vote(non resident) Developed lot(resident) one vote. Two tier not just in assessment but in vote!
Michelle John
11/04/2021 — 1:13 pm
I know this is not the correct place to ask this but just reaching out to see if there is anyone out there that can tell me how to sale or donate my lot at the village. I have owned it since 1981. bought with my parents.
I wish to get out from under the POA dues and and planning on moving to
Texas in the near future.
Michelle JOhn