North Texas Real Estate & Community News

April 1, 2024

Update on the future of Real Estate in the United States

Update on the future of Real Estate in the United States

Many consumers have read recent reports about real estate agent commissions.  Some reports have commented that they believe home price changes will follow.   There has been some misinformation on the internet, and I hope this is helpful to you as you research the way real estate works.

For over 100 years, the National Association of REALTORS (NAR) has held their members to a higher standard through our Code of Ethics. They have championed private property rights, and proactively protected their members as well as consumers. Nykia Wright, Interim CEO of NAR said “NAR has worked hard for years to resolve this litigation in a manner that benefits our members and American consumers. It has always been our goal to preserve consumer choice and protect our members to the greatest extent possible. This settlement achieves both of those goals.”

With that in mind, NAR has agreed to put in place a new MLS rule prohibiting offers of broker compensation on the MLS. This would mean that offers of broker compensation could not be communicated via the MLS, but they could continue to be an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals.

While this is a change for REALTORS on the way they communicate offers of compensation, this does not mean that there will no longer be offers of compensation.  In fact, NAR stated “Offers of compensation help make professional representation more accessible, decrease costs for home buyers to secure these services, increase fair housing opportunities, and increase the potential buyer pool for sellers. They are also consistent with the real estate laws in the many states that expressly authorize them.

Another important part of the process as we move forward is the fact that written buyer agreements will be required.  Some states, and many brokerages across the country have already required this for years; and almost every brokerage recommended them.  In the proposed settlement, NAR has agreed to enact a new rule that would require MLS participants working with buyers to enter into written agreements with their buyers. NAR continues, as it has done for years, to encourage its members to use buyer brokerage agreements that help consumers understand exactly what services and value will be provided, and for how much.

If approved by the courts, these changes will go into effect in mid-July 2024.

What has changed for the consumer or the real estate agent?  None at this time. However, if approved, this summer consumers will be required to sign representation agreements with their agents when hiring someone to help them buy a home. REALTORS will then spend time communicating with each other regarding offers of compensation on properties the buyer is interested in. Buyers will still be able to ask sellers to off-set their agent fees, and sellers will still have the opportunity (as they always have) to discuss and negotiate fees when they hire a real estate professional. 

Home sales prices will still be negotiated between buyers and sellers, and the real estate market will still work on supply and demand.  Agents will still be able to run comparable sales data and provide that information to buyers and sellers so they can make an informed decision. Prices are impacted by supply and demand – and that won’t change.

 

Posted in Blog
March 26, 2024

The Past & The Future Of Real Estate

The Past & The Future Of Real Estate

The History of Real Estate Commissions
Let’s begin over 100 years ago. In May 1908, the National Association of Real Estate Exchanges was founded in Chicago with the objective "to unite the real estate men of America for the purpose of effectively exerting a combined influence upon matters affecting real estate interests." In 1913 the original Code of Ethics was adopted with the Golden Rule in mind. The original Code of Ethics stated that “agents should always be ready and willing to divide the regular commission equally with any member of the Association that can produce a buyer for a client.”
In the Great Depression in the 1920’s commissions were around 2.5% for both agents, and commission rates rose to 5% in the 1940’s after World War I, and have remained steady between 5-6% for the past 80 years. Between 1908-1987, the sellers controlled most of the transaction, and buyer’s agents were working as subagents in the interest of the seller. This means that during most of the past Century, home buyers did not have equal representation (or protection) during the home buying process.
In 1988, the Real Estate Buyer’s Agent Council was formed to allow buyers to have SPECIFIC REPRESENTATION. This meant that agents/brokers could be working exclusively for buyers, representing the buyers best interests and ensuring a more equal representation. However, the way they were paid did not change. It continued to be structured so that the commission for both agents was paid by the seller (through a shared commission between the brokers). Of course, the seller was able to pay the real estate commission by using the money received by the buyer for the purchase of the property.
Which brings us to 2020’s. The Department of Justice reviewed the policies of the National Association of REALTORS and found that transparency was lacking regarding commissions. Changes were made to ensure that REALTORS would educate buyers about the source of their commission, and disclosure was made to ensure buyers would be informed about how much the seller and their broker would pay to a cooperating broker who brought the buyer to the transaction. Any consumer was able to view the unilateral offer of compensation from a listing broker to a cooperating broker on major real estate site such as Realtor.com and Zillow.com.
During the past 100+ years, real estate commissions were negotiable (some great examples of this are Open Door, Redfin, REX Realty, UpNest, etc). While the lawsuit alleged (and the media wants you to believe) that commissions are set… Commissions have always been negotiable, and they will remain negotiable. This is actually one of the very first documents that the State of Texas requires Realtors to disclose to clients. The majority of real estate commissions have been between 4-6% for many years…but they were never fixed.
As we head into 2023/2024, multiple class action lawsuits were filed, first against the National Association of REALTORS, and then subsequently against various state and local Associations as well as large brokerages with perceive deep-pockets (such as Keller Williams, Coldwell Banker, Remax, and many more). In an attempt to stop the legal frenzy, the National Association of REALTORS proposed a settlement that, if approved by the courts, could change the way real estate works for both real estate professionals as well as consumers. Keep reading to find out how this affects you.
 
Potential Future of Real Estate Commissions
Currently, listing brokers offer a unilateral offer of compensation through the MLS to any broker who represents the buyer in a transaction. This offer of compensation is easily found in the MLS as well as on all major home search sites such as Realtor.com and Zillow.com. The 2024 proposed settlement requires the removal of the disclosure of any broker-to-broker shared commissions from the MLS (although it does not prohibit shared commissions, just the disclosure will be removed). This means that neither brokers/agents nor the consumers will know if the seller or their broker has offered a cooperating commission, and if offered how much it will be.
Potential consequences (intended or unintended)
1. Home buyers will be obligated to pay their agent directly for representation, making home affordability even tougher for some would-be home buyers. Most likely affected groups will be first-time home buyers and Veterans choosing to purchase with their VA benefits.
2. Of those home buyers, some will write their purchase offer to include funds from the seller to help off-set the buyer's closing costs, which now include the buyer’s broker fee. The real estate commission cannot currently be financed into a home buyer's mortgage, so in order to make the home buying process more affordable buyers will negotiate with sellers to pay the fee (so in effect, the seller’s would not see any relief from the current commission payment model).
3. Brokers/Agents will need to spend more time communicating directly with each other (instead of confirming in the MLS) to see if a co-op commission is offered, or how much is offered, on each individual property. Additional time required by both buyer and seller agents could increase the cost of commissions.
4. Some home buyers will opt to buy a home without equal representation (like we had from 1900-1988). This puts the seller at a distinct advantage as the law of Agency requires the listing agent to look out for the seller’s best interest as their fiduciary.
**It may still be in the best interest of the seller to continue to pay buyer agent commissions to entice more buyers to have interest in (and be able to afford) to purchase their home.
Currently Buyer Representation Agreements are RECOMMENDED, but not required in most states. The 2024 proposed settlement states that Buyer Representation Agreements will be REQUIRED before any real estate professional in America can assist a homebuyer in showing homes for sale.
 
Potential consequences (intended or unintended)
1. Home buyers will have 2 options to be able to view homes they are interested in.
a. Home Buyers can be unrepresented. That means the buyer must search online to find homes they like, then contact each listing agent directly to see if they can schedule an appointment to view their listings. This unrepresented buyer will likely have scheduling issues attempting to view multiple properties which will slow down their home search. Buyers may also become frustrated with trying to reach various agents to schedule these appointments over random days, evenings, and weekends. (remember, listing agents will be significantly busier if they are fielding phone calls and showing requests from every buyer instead of having buyer agents assist with this) Listing agents will be requesting pre-approval letters, so buyers should keep that information handy since they will be providing it over and over again for each showing. These same buyers will not be represented by the listing agent – who is still obligated to report any information they obtain from the buyer to the seller, which can then be used against them during negotiations. This buyer will be uninformed about comparable sales data, as well as what terms to ask for in a real estate contract (not to mention not knowing where to find contract forms or fill them in to submit to a seller). These unrepresented buyers will generally be at a disadvantage throughout the entire home buying process. The law of Agency says the listing agent’s job is to look out for the best interest of the seller.
**If you were being sued, would you just rely on the other party’s attorney to look out for your best interest? No! You would hire your own attorney. This is the same concept.
b. Home Buyers can commit to one (1) REALTOR, sign the representation agreement, and then have the ease, convenience, and protection of having their own agent. The buyer’s agent will provide a list of properties that meet the buyer’s needs and schedule blocks of showings on various listings, regardless of the listing agent. They will be able to provide comparable sales data and assist in making offers that are in the best interest of the buyer. The agent will be able to prepare the contract documents and negotiate to help offset the cost to the buyer for their commission. The agent will assist the buyer with recommendations on the purchase process including additional services needed, and will be able to ensure the closing goes as smoothly as possible.
Moving You Forward
Client Representation has, and will continue to be, one of the most valuable things a Real Estate Agent can do for a client, on either side of the transaction. The law of Agency states that real estate agents become a fiduciary for their client, which means that the agent’s job is to look out for the best interest of their client throughout the transaction. Sure, we open doors….but we do SO much more!
There have always been, and will continue to be, some real estate agents that are better than others. As we move into the future of real estate, the difference between the two will become evident. Sellers will need an agent who can market their home to both home buyers and real estate agents, advise on sales price as well as commission offerings, and help negotiate to get them the most money for their home. Buyers will need someone to represent them. Someone with experience and data to help them make the best decision. This is a value that is not easy to put a price tag on. It is significantly more than showing a few properties to a buyer. It may be a service that buyers have to pay for in the future, and it may remain that sellers will still pay commission to the buyer’s agent as part of the initial contract negotiation.
Either way, at North Texas Top Team, REALTORS - we will continue to provide detailed information and data to both our home buyers and sellers. We are highly-trained and truly understand our Agency and Fiduciary duties to our clients. Our broker helps to create contracts through her volunteer leadership on the Broker-Lawyer Committee with the Texas Real Estate Commission – and she teaches our agents (as well as many other agents in Texas) about the contracts we use when working with our clients. You deserve to be represented, and represented well by an educated REALTOR. Our clients come first, and they deserve the higher-standard that we provide. For us, it is business as usual.
About the author: Melissa Hailey is a real estate broker, trainer, coach, leader, and influencer. She has served in volunteer leadership with Collin County Area REALTORS, Texas REALTORS, the National Association of REALTORS, and the Texas Real Estate Commission. She is also the CEO of Agent Advantage Coaching & Training, where she leads real estate instructors to raise the bar in real estate.
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Posted in Blog
March 21, 2024

Open House this weekend Frisco, TX

Open House In Frisco, Texas!

March 23rd & 24th from 2pm to 4pm

4223 Runway Mews, Frisco, Texas 75034

Enjoy low-maintenance living & functionality in this stunning 2020-built home. The open-concept layout connects the stylish kitchen, dining, and living areas creating an ideal setting for gatherings. On the first floor you'll also find an office, guest bedroom and full bath. Upstairs the spacious primary suite is split from another bedroom creating a private retreat. There's also a media room and gameroom to provide endless entertainment options for family & friends. Outside, the small side yard is perfect for pets or kids and has a covered patio to enjoy al fresco dining or your morning coffee. Relax on the inviting front porch which overlooks the community park and get to know your neighbors. Conveniently located off Main Street and Legacy in Frisco, you'll have access to top-rated schools and a host of shopping and dining options nearby. The Dallas North Tollway is just a few minutes away ensuring an easy commute to the rest of the metroplex.

For more information connect with Jami Mumley REALTOR®

📞214-762-3598

Posted in Open Houses
Feb. 22, 2024

Open House in Aubrey, Texas!

Open House in Aubrey, Texas

Sunday, February 25th from 1 pm to 3 pm📆
916 Bridle Path Parkway Aubrey, TX 76227📍
The main living areas have wood look tile throughout. To the left are two secondary bedrooms boasting vaulted ceilings and connect through a Jack and Jill bathroom. Third bedroom is separate, with private bath featuring an oversized shower. Mud bench off garage entry, is perfect for extra storage. Large utility room has room for a freezer and filled with shelving. MLS #20537570
For more information connect with Brittany Frost REALTOR®
📞469-525-5265

Posted in Blog
Feb. 16, 2024

Coming Soon in Aubrey, TX

Stay Tuned For More Info On This Beautiful Listing! 

Coming soon in Aubrey, TX

This beautiful home is coming to the market soon! For more information connect with Brittany Frost REALTOR®  📞469-525-5265

Posted in Listings
Feb. 9, 2024

Open House This Weekend in Frisco, TX

Open House February 10th from 3 pm to 5 pm! 

Property Description

Stunning 2020-built home offers the perfect blend of luxury and functionality. The open-concept layout connects the stylish kitchen, dining, and living room -an ideal setting for gatherings. This home features 3 bedrooms, and 3 bathrooms. For more information connect with Jami Mumley REALTO®R 214-762-3598

Posted in Blog
Feb. 2, 2024

Open House in Frisco, TX

Open House in Frisco, TX! 

 

Come check out this gorgeous home on February 4th from 2 pm to 4 pm

Property Description: 

Stunning 2020-built home offers the perfect blend of luxury and functionality. The open-concept layout connects the stylish kitchen, dining, and living room -an ideal setting for gatherings. On the first floor you'll also find an office, guest bedroom and full bath. Upstairs the spacious primary suite is split from another bedroom creating a private retreat. This home features 3 bedrooms, and 3 bathrooms. For more information connect with Jami Mumley REALTOR®! 

214-762-3598

Posted in Blog
Jan. 25, 2024

Beautiful Rental in Plano, Texas

Beautiful Home For Rent In Plano, Texas!

Plano Rental Home

West Plano home with a diving pool in highly-desirable Wells Elementary area. This home was built for entertaining with multiple outdoor living spaces and 3 sliding doors to access the pool. The large living area with wood floors, freshly painted built in cabinets, and floor to ceiling fireplace is the heart of the home along with the kitchen that features granite, stainless steel appliances, and travertine flooring. Dining nook overlooks the backyard oasis. Formal dining opens to the main living area. Second living area features shiplap style accent wall and has a view of the pool. Primary bedroom with private courtyard access and AMAZING updated bathroom. Three guest bedrooms are large. All bathrooms feature dual sinks, built in cabinetry, and updated faucets and mirrors. Pool service included. Just 1 block to Wells Elementary and Buckhorn Park featuring trails, a creek, and a playground. Convenient location between GBT and 121; 75- Central and DNT - just minutes from everything. 

For more information connect with Melissa Hailey REALTOR®

📞214-418-0180

Posted in Listings
Jan. 19, 2024

Gorgeous Listing in Garland, Texas

Home For Sale In Garland, Texas

 

This welcoming 3-bedroom, 2-bathroom home also has a bonus office space, offering a versatile and functional living environment. Large windows on the front of the house feature custom plantation shutters. The kitchen has beautiful granite countertops, stainless steel appliances and a large breakfast bar that opens up to the dining area. A dark hardwood floor flows throughout the main living areas. The living room is open to the kitchen and dining perfect for entertaining friends and family. Upgraded primary bathroom with granite counter top, travertine-style tile, and rain shower head with granite counter tops. Large Utility room with built in cabinets. The exterior boasts a modern architecture style and mature trees in the front and back. The home is close to the Oak Branch Park & Greenbelt. Plus side it's just 20 minutes from Downtown Dallas or 10 minutes from Lake Ray Hubbard. Come see it for yourself!

For more information connect with Julie Baker REALTOR®

📞972-965-2301

 

#forsale #home #northtexas #realestate #realtors #garlandtx #northtexastopteam 

Posted in Blog
Dec. 29, 2023

Happy New Year!

Wishing Everyone A Very Happy New Year! 

 

Posted in Blog