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.
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 45440. Please 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:
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Boxabl as the Future of Housing -presents with a unique housing product that is price / quality and timing sensitive to the current needs in communities… we just need to get our Community Leaders onboard to adjust zoning and permitting to allow the use of this housing alternative.
Knowing that we are now hearing about the “housing crisis” and that there is a shortage of homes for sale across the country, and especially in our local communities – housing alternatives are NEEDED.
Want more information? Ask Tammy for details or feel free to explore with these links:
Participating in the Jobs Ohio Quarterly Update meeting and hearing wonderful news about the progress of our state is an exciting opportunity.
“Ohio is a Special Place” (nothing new to me – of course I already know and believe this!)
The diversity of our state is helping to drive the various job sectors GROWTH, the vibrancy of our communities and the future potential we can take hold of and claim. All that being said, there is a challenge, as Lt Governor Husted stated, “We need to begin to address HOUSING” – and the low inventory levels we have had now for the last four years have added to that need.
It is time for our communities to OPEN their thinking and planning requirements to fast-track the housing process, so that more construction can take place; BUT, it is also time to expand housing alternatives! We must allow alternative housing structures / zoning to include: Accessory Dwelling Units (ADUs); Tiny Homes; Pre-fab / Manufactured Housing; not to mention the ability for multi-generational living and vertical living.
Easy for me to say? YES – because I have been actively working in the industry of Real Estate since 2001. I take this business seriously and know the impact HOUSING has on everyday quality of life, the opportunities it presents to people and more importantly – the impact it has on our communities overall. I care about and want to assist in whatever way possible, so that the right path forward can be forged for all. We have to address the supply of housing to begin to address the cost of housing and the circle of real estate cycles continues!! Why are our communities making decisions about housing WITHOUT having Active Realtor participation? Our Associations and committees would gladly help to answer the questions, direct the focus that is needed and to even participate and volunteer to be included in their discussions – yet many in leadership merely serve their time and pass the buck to the next party. Without an answer to the question of housing – we cannot address the other necessary topics (affordability, homelessness, blighted redevelopment, incoming job growth) all of which should be just as important for community leaders to begin addressing as well 😉
I am not “just a Realtor” I AM YOUR ADVOCATE for property rights and opportunities. I help people to buy, sell and invest in what is typically their LARGEST SINGLE AND MOST EXPENSIVE FINANCIAL ASSETT and I do this with integrity and with the client’s best interest at heart. Seems to me – I might be that person who would be good to have a part of the planning??? At least I am willing to make myself available and help dive into the process with you!
I’ve been talking about topics that are now starting to “trend” but I was saying it LONG before – and I believe alternative housing is going to be the necessary, next thing. Soon I will get to report on a factory tour for a prefab manufacturing facility in our area, and I am planning to venture out West to tour another facility – because I know how important this next step is for people and for our communities. WATCH for updates and I’ll be sure to share my thoughts and findings with you 😉
Emergency Preparedness: Why It Matters and How to Stay Ahead of the Unexpected”
Understanding the importance of emergency preparedness is often overlooked until a crisis is looming. However, taking the time to develop an emergency plan can be invaluable. As we enter this time of year, it’s worth considering the “what if” scenarios and creating a concrete plan, hoping, of course, that it will never be needed.
While some may perceive my family’s preparedness efforts as excessive, we have found peace of mind in taking certain precautions. From having a readily accessible “go bag” in our car to maintaining emergency food storage and stocking a backpack with essential items like a flashlight, weather radio, granola bars, and water, we have made deliberate choices to ensure we are ready. We have even discussed establishing a designated check-in point during vacations to prevent separation anxiety. Despite any minor inconveniences, the sense of preparedness we have achieved far outweighs any perceived obsessions.
When our area had the massive outbreak of tornadoes during Memorial Weekend 2019, it was a flash back to the Xenia tornado in my mind. 2019 was worse – because it affected a wide range of our communities and had far more impact to our housing and roads and normal activities, for a much longer time due to then the onset of Covid.
Fires in California, massive snow storms across many states, now rain and flooding – it isn’t necessarily the apocalypse but it sure is enough to make a person a think “WHAT IF”.
Personally, I suffered a total loss of a home and know that there are some things you cannot plan for nor expect and it certainly can take time to re-build from a point zero position after such a loss. In the end, if all we loose is material “things” – then we can count ourselves among the lucky. I was blessed to have had friends and co-workers assist with their prayers and well wishes and clothing donations, with insurance to take care of other necessities. But I did take away from that experience a plan of action to at least try and be prepared or willing to plan when situations may present for action.
Here are just a few things that might help you 😉
Having a “go bag” is a great idea – I think of it as a what if I needed to make a quick run out of the home to another location – what would I need. Nothing big and bulky, but a quick change of clothes, important documents or small treasured things that might be nice to have (something that can “ground” you in an otherwise chaotic or challenging time). I have that bag packed and ready to grab – at times, I have kept this in the back of my vehicle as I maybe felt that was a step more proactive. If you have multiple family members in your care – this may mean multiple bags, so decide accordingly.
When you see pictures / video of tornado destruction – you might be struck by how “explosive” the scene looks, everything scattered and who knows if anything can actually be salvaged. I’ve thought about this and think that a good “attempt” to try and save some things may happen in a couple of ways: packing that luggage you have stashed in the garage – with actual clothes you might need, documents, keepsakes. I mean, they won’t take up any more room if they are filled with these things – so why not at least have a bag (or two or three) packed for the “what if”. Good to have your contact information inside of the bag, on the outside or with a luggage tag – in the hopes that if it is blown away (as a whole) that you stand a good chance of being able to claim / recover when found.
We all have important documents that we don’t want to carry around with us, but if we lost them – we’d have a hard time replacing them as quickly as they might be needed… If you have a water resistant pouch / bag that you can keep these documents in – placing them inside the dishwasher or refrigerator may help secure these from blowing away or burning in a fire. Now that of course means you at least are having a little heads up about a situation – but some of the household appliances seem to fair pretty well, at least by being intact – therefore some chance of these being protected. Of course, a fire safe / lock box is also well advised protocols.
Speaking of protocols – SCANNING any documents you have that can then be pulled from computer access or even your phone is a good thing to do. If you do not have the ability to “scan” documents, I am happy to provide this as a service for you, you can take them all on a zip drive and feel better prepared.
The other thing I learned (the hard way) was to have PICTURES / VIDOE of the household – of closets full of clothes, shoes and things; the drawers, the things you just won’t think about having accumulated – until potentially too late when you are trying to “make a list” after the fact. Having some record of inventory of things will help you to know what insurance claim to make, what items to look for and eventually those things that you may want to replace. (Also good to have on that zip drive with your documents)
Our hope is not to cause panic for anyone by talking about emergency preparedness – but to hopefully prompt you in advance of a potential loss to be better equipped for the situation. Really narrowing down those items that are most important to have on hand / secure in the event of gaining safety is a great first step.
Reading the Listing Agreement your agent is presenting to you – is just the beginning. But as someone who may not have recently sold a home – you have no idea what to look for or ask.
Here are a few things to HELP YOU make the right decision.
(not just about – Is it the right decision to SELL the house or WHO is the right Realtor to use) but:
What is the difference between an “Agent” and a REALTOR?
What is the Listing Agreement TERM (are you really wanting to give someone 40 years to sell the property??) Yes – I know that sounds EXTREME – but WHO WOULD HAVE THOUGHT that was an actual thing? (Until of course the news made us all aware IT HAPPENED).
Now, we can’t name names – or identify the potential “brokerage / agents” who were involved with this ridiculous listing agreement for 40 years (due to our Real Estate Law and Ethical Code) which seems ironic that we can’t call out something as crazy as this – but THEY can DO IT?!?! (Well, that is still to be decided).
Anyway, here is my go at calling out a few things you SHOULD be aware of from the start:
An agent – MAY or MAY NOT be LICENSED with the State to Sell Real Estate. Ohio REQUIRES a Real Estate License for the activities involved with buying / selling / representing others in real estate and being compensated with payment; including PROPERTY MANAGEMENT (unless it is your own property and transaction). Your first clue – ASK IF THEY ARE A REALTOR and then you can look this up online – free, at https://elicense3.com.ohio.gov/lookup/licenselookup.aspx.
Legally and Ethically – a person cannot use the term REALTOR without being a Realtor, paying those National / State and Local Dues and adhering to the Code of Conduct. Does that mean bad apples slip in or hide from the process? Sure – but at least that is a good place for you to start.
The “Term” of your listing agreement is normally considered to be the amount of time you agree to work with that Realtor / Brokerage in the efforts to sell your property. This could be ONE WEEK (although not normally this short) – to ONE MONTH, or even ONE YEAR – really, it can be ANY length of time that is agreed between the parties; but NEVER HAVE I EVER seen one for multiple years. No one wants to do paperwork needlessly, so making an agreement by the day would be just as unlikely. If the market turnover of listings is less than six months, then agreeing to a Listing Agreement of six months would seem reasonable and customary.
SECOND, you should be given or receive a COPY of anything you sign – at any time. I like to provide a copy in advance, certainly giving you plenty of time to review BEFORE SIGNING, or at any point if you lose your copy, I am happy to provide. If you want to have an attorney REVIEW the Agreements and any Documents PRIOR to the actual Listing of your property – that is certainly YOUR RIGHT.
The next thing to raise alarm – is this part about a LIEN AGAIST THE HOUSE. In no language of our board sanctioned Listing Agreement is there anything that refers to the right of the Broker to hold / take a LIEN against your house! No reason whatsoever for this to be a part of the Listing Agreement, it is not needed in order to SELL the property and YOU should BEWARE of having to give up ANY OF YOUR RIGHTS just to try and Sell the Property. It’s almost as ridiculous as saying you have to give the title to your car just to get it serviced or washed!!
Finally, in this case that has made the news circuit – it sounds like an OFFER was made in advance of the Agreement for a “Payment” to be made to the Seller for the opportunity of the company to get the Listing Agreement. I don’t know about you – but THAT would certainly raise a red flag for me! Offering to PAY someone for the ability to SELL their home maybe be considered an inducement and I would question if that was Ethical, let alone Legal – especially since that is NOT THE NORM in our Industry.
The saying, “If it seems too good to be true – it probably is” rings loud and clear!
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