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NAR Settlement Announced – Now What?

NAR Settlement Announced – Now What?  If you are like many, this is the breaking news and hot topic – and depending on your news source – highly debatable!  As with ANYTHING you should do your own research, ask questions and seek to understand as to HOW THIS AFFECTS YOU.  Everything is being distorted when it comes to the NAR Settlement and it does not necessarily mean that Realtors have CUT their commission, or that you don’t need to use a Realtor, or any other variety of click bait topics being trolled!

First, the settlement that was “announced” is an agreement that is YET TO BE ACCEPTED.  It is subject to still change and just as the DOJ previously had made an agreement with NAR that they then RESCINDED – nothing is set and final, until the ‘fat lady of justice process’ actually SINGS.

Second, NEVER has the commission rate been decided or directed by NAR; nor is it set in stone – it has ALWAYS BEEN NEGOTIABLE.  It has been a process that was incorporated in the sale of a home to be paid by the seller proceeds, that also allows for the compensation to the BUYER’S AGENT without having the Buyer come out of pocket directly for the payment of their Agent’s fee for services; which for 116 years was an agreeable process and standard industry.  Now What??

MY TAKE on this – which I have been in the business since 2001 and seen many changes in the process – some for the better service of our clients; ease of business for the Agents; and in general, just because of technology changes.  IF YOU KNOW ME – then you know I have had my pulpit moments for just about all of those changes! LOL

In this case, I think the NEGATIVE IMPACT of this “settlement” stands to hurt our BUYERS and SELLERS – ultimately doing EXACTLY THE OPPOSITE of what “was intended” by this lawsuit / settlement.  Why do I say that?  Well, if the BUYER is now responsible to PAY for their Realtor FEES, it is currently only able to be done OUT OF POCKET and NOT ROLLED INTO THEIR LOAN.  So someone looking to purchase a $100,000 home, not only needs to have the 3.5% (5 or 10 or whatever down-payment percentage determined by them for the loan they are seeking) PLUS the closing costs (which BTW were NOT included in this lawsuit discussion as “needing to be negotiable for the Buyer so they were fully aware of what their costs are / were”) which can be 1%-5% depending on where / what are closing costs are factored into the specific type of loan they are using.  This DOES NOT INCLUDE the Out of Pocket Expenses Buyer has for the PROCESS: Inspections and Appraisal fees (typically anywhere from $400-$1500+) again – DEPENDING on the type of property, location and type of loan.  SO MANY VARIABLES that go into determining WHAT THE BUYER is going to pay – and yet ANOTHER REASON THE BUYER NEEDS TO HAVE A REALTOR ON THEIR BEHALF THAT IS WORKING TO ENSURE THEY UNDERSTAND EVERYTHING INVOLVED WITH THEIR PURCHASE.

Don’t even get me started how this is setting the country up for massive issues with Fair Housing Violations, REDLINING, and a complete DISCRIMINATION against all those from First Time Buyers – to our MILITARY – to everyone else who may be in a “situation” that takes special care!

If you are a SELLER – you will be affected in a different way and should ask questions of any Realtor you look to HIRE, as to what this means for YOU.

If you are a BUYER – you will be affected THE MOST, and having a honest discussion with a Realtor you seek to HIRE, is critical to ensure YOU get the representation you want / need and understand HOW THEY WILL BE PAID.  Again, so many factors involved depending on the house, location, and loan you want…make sure you get the answers you need to be able to do what is BEST FOR YOU.

For the people who may have ever thought REALTOR SERVICES ARE FREE – that is WRONG.  Of course the fee for using a Realtor is being PAID (by someone) and for those who FAILED TO DISCLOSE WHO WAS PAYING FOR THE REALTOR(s) – SHAME ON YOU for getting us all into this mess!  (But YES, there is A LOT that we do that is “extra” and sometimes we do A LOT OF WORK and don’t get to the closing table – which means we are NOT GETTING PAID!)  Having our commission tied to the actual CLOSING PROCESS ensures that we are COMMITTED TO THE PROCESS FOR OUR CLIENT (otherwise it just becomes an ala cart pricing structure that you pay each time you want us to show a house, write a contract, attend an inspection, negotiate an issue, etc…)  my eyes are rolling back in my head at this point!!!

Want to know more about what I think??  I cover it here on an BONUS episode of The Real-Tea Podcast and I am ALWAYS HAPPY TO ANSWER YOUR SPECIFIC QUESTIONS FOR YOUR SPECIFIC SITUATION 😉  Watch the video episode on YouTube at https://youtu.be/aY6P6J3zTr4  or audio version on Spotify at https://podcasters.spotify.com/pod/show/real-homes-to-love/episodes/The-RealTea-on-NAR-Lawsuit-Settlement-e2h8dhi.

And YES – there is reliable details about all of the FACTS, this site is PUBLIC and available to update YOU on this subject (without the rhetoric, hype, or click bait!!)  FACTS.REALTOR

The Real-Tea Podcast is Available Now!

We hinted about a project late last year, and are happy to announce that The Real-Tea Podcast is Available Now!

This twist on a Real Estate Podcast presents from a Professional view with a Client Perspective, join Tammy Murphy and Elle Sollenberger, as they spill The Real-Tea about buying and selling Real Estate.  You will get to meet our hosts and learn what brought the Realtor and Client together for this fun and sometimes quirky podcast. The years they have shared in working together in multiple deals and different market scenarios is beneficial for anyone looking to Buy or Sell a house.

Curious about our episodes??

check it out on YouTube (video) https://www.youtube.com/@realhomestolove3939/podcasts

or Spotify (audio only) https://podcasters.spotify.com/pod/show/real-homes-to-love

Changes in Real Estate Industry

We all know that change can be good, if not sometimes painful?  What you NEED TO KNOW is that there are proposed changes to the Real Estate Industry – that COULD make a real difference to YOU – as the consumer (buyer or seller).   *** LONGER POST WARNING 😉 ***

I know you think this has already happened with the increased higher interest rates – right?  Yep, that is one change that certainly has impacted everyone.

You also may know that the low inventory and higher purchase prices have continued – and are projected to continue for years – also correct!

However, the little known discussion that has been playing out for a number of years now – with the Department of Justice (DOJ) and National Association of Realtors (NAR) – is something “I” believe will be a BIGGER IMPACT and CHANGE TO THE INDUSTRY than most anyone even realizes.

Now while this may not be decided this year, maybe not even next year – what I see is the tsunami effect of things that is building: low inventory / higher prices; higher interest rates; and THEN if we get way-laid with the change to Realtor Compensation as proposed – the CONSUMER LOOSES!  How?  You may be asking…

Let’s say that for the 115+years now that NAR and Real Estate has been established, there is a way for a SELLER to list their home for sale, having professional representation by their Realtor for their best interests AND in that same agreement compensation is agreed to and offered for a BUYER’s Relator to also be paid.  This works well, is openly noted and shared in the listing services of our MLS (which is solely structured around that compensation agreement BTW).  Yes, Sellers can decide to sell on their own and NOT USE a REALTOR; just as Buyers can decide to make an offer and NOT USE a REALTOR – BUT, if either party uses a Realtor under the current agreements – each party is PROTECTED AND REPRESENTED in a FIDUCIARY ROLE that is bound by ethics and rules. (If I am working for the Seller – then I HAVE TO PROTECT THEIR INTEREST; If I am working for the Buyer – then I HAVE TO PROTECT THEIR INTEREST) you get the point??

Why does this work??  Because the offer of compensation is addressed with the LISTING with the SELLER and both sides of the transaction are ASSURED OF REPRESENATION.  And each Realtor is getting PAID at the CLOSING of the DEAL from the Seller Proceeds.

If a Seller does a For Sale By Owner – there are NO LEVELS OF PROFESSIONAL REPRESENTATION, NO protocols of disclosures or process, and it really becomes a BUYER BEWARE (Caveat Emptor) situation.

If a Buyer decides to purchase without a Realtor Representation, well they can certainly choose to navigate the purchase, finance, inspection, appraisal and closing process ALL ON THEIR OWN – however, each of those steps COULD present an issue for those who may not be familiar with or understanding of their “rights”.

Now – back to the PROPOSED CHANGE – for whatever reason – there is a BUG up someone’s crawl that is saying this system (well proven over the 115 years) that is UNFAIR.  The change is to have Sellers Pay for their Realtor Services and the Buyers to Pay for their Realtor Services.  And I know, on the service – everyone THINKS that is an equitable resolution.

HOWEVER, what you don’t realize – while the Seller is likely MAKING MONEY ON THE TRANSACTION AND ABLE TO PAY THEIR REALTOR FEES AT CLOSING – the BUYER is BRINGING MONEY TO THE TABLE TO CLOSE: either in the form of their LOAN (which currently ONLY can cover the mortgage expenses), or their own FUNDS OUT OF POCKET.

I’m going to now give an EXAMPLE of what a Buyer Scenario looks like:  Buyer decides they want to buy house at $100,000 (good luck finding that right now! – but easy numbers help make the point)

Buyer is “pre-approved” with a lender who has indicated the type of loan they qualify for – FHA may be 3.5% down (or $3500 down), plus closing costs and loan origination fees – well, let’s just call this a Total of about $6000 that will be needed for the Buyer to Close the Loan.

The “process” should / could involve an Inspection ($500) BUYER PAYS OUT OF POCKET AT THE TIME; and an Appraisal ($400) BUYER PAYS OUT OF POCKET TO SCHEDULE.  There could be additional inspection costs (termite, well, radon, etc) all of which would ADD TO THE OUT OF POCKET COST – and ALL PAID BEFORE THE CLOSING BY THE BUYER.

To be “safe” and for Buyers to have some understanding of what they need to BUY a house, I use GENERAL NUMBERS LIKE THIS TO PREPARE THEM, and also to gauge their financial ability to make this decision to purchase.  If they have ~10% of the PRICE OF THE HOME as funds available for them to use – THEN this may be a deal for the Buyer.

BUT NOW – the Proposed Change, is stating the BUYER is to PAY FOR THEIR REALTOR SERVICES – which as indicated is NOT ABLE TO BE ROLLED INTO THE LOAN (currently) so will be OUT OF POCKET COST.  If the Buyer then has to come up with an extra $1000, $2000 or $3000 + to pay for their Realtor Services… DO YOU THINK THAT IS AN UNFAIR HARDSHIP??

I believe that this proposed Change is not only UNFAIR to BUYERS, it puts them in jeopardy to decide to NOT USE A REALTOR (saving the money) but loosing out on their RIGHTS AND REPRESENTATION.  I believe this proposed Change is a TERRIBLE SHIFT TO AN INDUSTRY whose sole business has been based on Ethics, Integrity and FIDUCIARY RESPONSIBILITIES FOR OUR CLIENTS.  It is a GAME CHANGER and NOT IN A GOOD WAY.

Why do I go to conferences, pay DUES and work hard for my clients?  Because it is something I take personally, it is a DUTY I feel, and it is an HONOR THAT I SERVE.  Having an industry change such as this come along and “knock out” all the 20+ years of experience of my service is a SLAP IN THE FACE.  DOJ should be asking the consumers if they are REALLY READY to carry the burden of not only having higher prices due to the lack of inventory (and many governmental shortages and failures), to the higher interest rates (again, due to governmental failures and oversight), to NOW – the proposed BURDEN of having to pay for their “rights” to be a protected BUYER DURING THE HOME PURCHASE PROCESS with their Realtor Services NOW BEING ON THEM DIRECTLY.

Yes, I could go on and on about this – with REAL LIFE EXAMPLES of how I not only had Sellers who made MONEY on their Real Estate transactions – but that they GLADLY PAID FOR THE REALTOR SERVICES FOR BUYER INCLUDED, and knew / know that was the way the process amicably worked for ALL.

And more importantly, I can tell you about REAL LIFE EXAMPLES of Buyers who NEVER THOUGHT THEY COULD OWN A HOME, were negotiated into deals that WORKED for them and made them HAPPY HOME OWNERS – with as LITTLE OUT OF POCKET AS POSSIBLE – to which they were FULLY AWARE OF AND ABLE TO PAY, mainly because there was NO ADDED COST OUT OF POCKET TO THEM FOR MY SERVICES.

And, to go a step further – yes, I have the HORROR STORIES as well of people who LOST OUT because of decisions they made WITHOUT THE PROFESSIONAL SERVICES OF ME (or other REALTORS) as a result of their trying to “SAVE SOME MONEY”.

On the record I will say all of this, and what I believe is that ANYTIME SOMEONE IS TRYING TO TAKE AWAY THE RIGHT OF ANOTHER (in any form: out-right change to constitution or bylaws or process rules) THEN THERE IS ALWAYS A GAIN FOR THOSE SEEKING THE CHANGE and NOT A BENEFIT FOR THOSE WHO ARE AFFECTED.

And my passion to serve is the reason MY CLIENTS continue to use me for their Real Estate needs – they KNOW I am going to STAND UP, SPEAK UP and VOTE in this Industry for the RIGHTS OF THE CONSUMERS.

Here’s a few links if you’d like to see more:

Thinking of Moving Abroad ??

Thinking of Moving Abroad?  With REMOTE WORK and the now endless opportunities to live where you want (and if you want to still work, remote is an option) then FINDING a place to call Home in another country can cause you even more anxiety / stress and OPTIONS.  What you need to know – is going to be dependent upon WHERE you are looking to move to – what country, what are the residency requirements, what are the loan options available – and so many more variables to consider that you otherwise may not begin to know – until you are in the thick of it.

Working with a Realtor who has their CIPS designation here in the US is a great way to start your process.  Why? Because, they have a foundation of understanding the international market as well as having many contacts in other countries.  Once you have an idea of the country / region / town you want to move to – then “the fun” can begin.  Being put into contact with a real estate professional who is then LOCAL to your choice, is a smart move – although the process may vary from what USA practices are, they will likely have similar association and professional standards.

Once this part is in the works – you will need to make sure that a LENDER is able to work with you on an INTERNATIONAL LEVEL – this again, is going to depend on what country you are selecting; but, as an example US Citizens cannot just get a loan in the US from their bank and then use for the purchase of a property in a foreign land.  So having the assistance of your CIPS Realtor here – will be able to assist you in this navigation process of finding the right lender for the country you are seeking to move.

Other things to consider:

  • Residency rules of the country vs Expat status vs Citizenship
  • Currency transaction requirements
  • Title and Ownership process
  • LANGUAGE Barriers (especially when dealing with contracts and laws)

Here is an International Lender with experience to help US Citizens to be able to purchase in other countries (be sure to confirm requirements for the country you are interested in): https://www.americamortgages.com/us-citizen-overseas/

Tammy’s best advice, ALWAYS travel to the potential spot and spend a longer than a week 😉 BEFORE making the life changing decision.  In the fun of a vacation it is easy to fall in love with a place / atmosphere / people – but what is the reality when you are there for the long-haul, have to work and no longer just get to casually stroll thru the streets?  THAT is when you can find the real place for you to call home – when you know that it is just the right spot in the world that makes your heart full, the senses invigorated and the future bright!!   Many happy travels in your search of finding HOME.

 

Building a Secure Future: Estate Planning and Real Estate Workshop

Our “Building a Secure Future: Estate Planning and Real Estate Workshop” is planned for Thursday, August 24, 2023 and will be held from 11 AM – 1 PM.  This FREE event will be held at the American Legion Post 598 at 5700 Kentshire Drive, Kettering OH 45440Please reserve your seat in advance so that we can adequately be prepared with Refreshments and Hand-outs!

Here are a few Helpful Tips to Assist Planning for You & Your Loved Ones:

  1. Start Early: Begin your estate planning process as soon as possible. Don’t wait until it’s too late or you’re faced with an unexpected event. Planning ahead allows you to make informed decisions and ensures that your wishes are carried out effectively.
  2. Define Your Objectives: Clearly identify your goals and objectives for estate planning. Whether it’s protecting your assets, minimizing taxes, providing for your loved ones, or supporting charitable causes, having a clear vision will guide your planning process.
  3. Create a Comprehensive Estate Plan: A well-rounded estate plan typically includes a will, power of attorney, healthcare directives, and trusts. Tailor these documents to your specific needs and circumstances, considering factors such as real estate holdings, investments, business interests, and family dynamics.
  4. Regularly Review and Update: Life circumstances change over time, so it’s crucial to review and update your estate plan periodically. Major life events like marriage, divorce, births, deaths, or significant financial changes may require adjustments to your plan.
  5. Involve Trusted Professionals: Seek the guidance of experienced professionals such as estate planning attorneys, financial advisors, and tax experts. They can help you navigate complex legal and financial matters, ensuring your plan aligns with applicable laws and maximizes your benefits.
  6. Consider Long-Term Care: Incorporate provisions in your estate plan to address potential long-term care needs. This may involve setting up healthcare proxies, living wills, or establishing trusts to safeguard assets and provide for your care in the event of incapacity.
  7. Maximize Real Estate Planning: Real estate is often a significant asset in an estate. Consider how to pass on property to heirs efficiently, minimize tax implications, and explore strategies like gifting, trusts, or establishing family limited partnerships to manage and protect your real estate assets. Working with your Trusted Realtor is a start to ensure timing in the market is maximized.
  8. Communicate with Loved Ones: Openly discuss your estate planning intentions with your family and loved ones. Clear communication can help prevent misunderstandings, disputes, and challenges in the future. It also allows you to address any concerns and provide explanations for your decisions.
  9. Continually Educate Yourself: Stay informed about changes in estate planning laws, tax regulations, and financial strategies. Attend workshops, seminars, or seek educational resources to enhance your knowledge and make informed decisions.
  10. Seek Professional Guidance: While this list provides helpful tips, it’s important to remember that every individual’s situation is unique. Therefore, consult with a qualified estate planning professional who can provide personalized guidance based on your specific circumstances and goals.
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Property Values Increase

It’s great to hear that Montgomery County has experienced a significant increase in property values! A 30% increase to a total property value of $38.1 billion is indeed a substantial growth. Rising home sales records often contribute to an overall appreciation in property values within a region. As our meeting today with Karl Keith confirmed, that is an “historic growth in values”.

Increasing property values can have several implications. Homeowners may see their investments grow and potentially gain equity in their properties. Local governments may also benefit from increased property values as they can generate higher property tax revenues, which can be allocated towards community services and infrastructure development.

 

Montgomery County Property Values Update

HOWEVER, you will be delighted to learn that at least the actual Tax Bill will NOT increase 30%!! You heard me correctly, the tax bill is likely to adjust between 4-6%, based on a value increase change of $100k.  Just as in Real Estate, Property Taxes are also based on LOCAL criteria.  Understanding what is going on with your home, street and neighborhood AFFECTS that overall Property Value as determined by the Auditors office.

AND, if you are not happy with the findings (which should be mailed to home owners at the end of the year with the final release) – You MAY be able to file a dispute if you have material information that appears to not be reflected.  Curious about this process or want help to navigate the way???  This is a service that Tammy offers to clients, so that the deadline to submit dispute application can be met, and then subsequently the review meeting later in the year can be adequately prepared for and presented on your behalf.

We are not alone, of Ohio’s 88 counties, 41 are reporting INCREASED VALUES (with Franklin County reporting the highest gain of 41%!) What this means is that our schools, communities and infrastructures will benefit from the potential increase in revenues earned 😉

Want to learn more about what Karl Keith and the Auditor’s Office do?  Checkout their link here: http://mcauditor.org/