June is National Home Ownership Month

June is National Home Ownership Month. That’s right. A whole month dedicated to homeowners! 

African American family celebrates new home purchase

 

The National Association of REALTORS®, or NAR, is celebrating by promoting the education and advocacy campaign, Home Ownership Matters, which “provides an ideal platform for current and prospective homeowners to have their voice heard at the local, state and national levels of government on core tax and property issues.”

So celebrate the month! Enjoy the summertime with your neighborhood and stay up to date on any and all legislature that can affect your home ownership or taxes. Send your REALTOR® a shout out for helping you become a homeowner.

After all, it’s the one of the biggest investments you’ve ever made and the place your family calls home. 

What is the True Cost of Selling a House?

May 2017 Insight Cover
Read this and other articles in the May issue of Insight magazine.

By: Wendy Harris, NC REALTOR® and Broker

In North Carolina, the seller is responsible for paying commission per their agreement, as well as preparation of the deed and revenue stamps per the standard Offer to Purchase and Contract. REALTORS® refer to this as “CPR” because you can never have enough acronyms, and occasionally during a listing presentation, a less-informed seller may suddenly look like they are in need of CPR when their REALTOR® starts breaking these numbers down.

Seller Expenses

Let’s start with the easy stuff. Deed Preparation and Revenue Stamps will not break the bank in most cases, but there are other costs the seller may have to pay. Some of these “incidental” costs may include recording a power of attorney, wiring fees for loan payoffs, home warranty, etc.

You can also expect a buyer to ask for all or a portion of their closing expenses to be paid. This should, of course, be looked at with the whole picture of an Offer to Purchase. Some sellers feel as though they should never pay a penny of buyers’ closing expenses. However, our role as REALTORS® is to understand sellers’ beliefs and temper them with the realities of the current market. Is the end goal to not pay any of the buyers closing expenses? Or, is the end goal to sell the real estate to accomplish investment net, a particular timeline or other criteria? This is an important discussion to have with your REALTOR® during the listing presentation. There is no sense in waiting for the first offer to come in to begin to understand the negotiation process. This will only put you in catch up mode.

Commission

Because the seller is responsible for paying commission, some people assume this is also the reason sellers pay both sides of the commission in North Carolina.

It is not. There is no requirement from the state that instructs the seller to pay the buyer’s agent’s commission. Then why do we do it?

One reason is tradition. Appraisers prefer using homes in the REALTOR® Multiple Listing Service (MLS) for comparables because they are able to confirm the terms of the sale of each property. As REALTORS®, we confidentially report relevant sales information after closing. This information is vital for the present and future valuation of properties. If commissions are paid differently, then value adjustments will be needed.

Another reason sellers may find themselves responsible for commissions could be related to military markets in North Carolina. The Veterans Administration (VA), which backs the federal loans that military families primarily use to purchase homes, puts restrictions on who pays commissions. The VA will not allow a buyer to pay REALTOR® fees or commissions. Therefore, the responsibility falls on the seller. Because VA loans make up over 90 percent of owner occupied home purchases in these areas, a seller would be excluding a big chunk of potential buyers by stating they are not willing to pay the buyer side commission.

Talk with your REALTOR® about competitive commission rates that will attract buyers to your property. Please keep in mind that while commission is considered negotiable, often times the real estate company sets the commission rate, and individual agents do not have the ability to negotiate beyond the company policy. Also, in any commission negotiation, be mindful that the commission the seller pays is not usually the commission the REALTOR® representing them actually receives. Under some company policies, commission is paid to a firm, which then splits that commission or takes out fees from the REALTOR®.

Why use a REALTOR® in the sales transaction?

An interesting fact that consumers should research and confirm for themselves is that year after year studies conducted by the National Association of REALTORS® prove sellers get more money for their property when using a REALTOR® to represent their best interests in a transaction. If you are using a REALTOR®, they will be advocating for you and negotiating for you. Selling real estate is a large task that, if done correctly, should seem fairly simple. Selling real estate is a team effort, and the REALTOR® is there to protect their client’s assets and reduce their liabilities and risk. In fact, this makes for a great future discussion.

 

ABOUT WENDY
Wendy Harris is a Broker with Team Harris Real Estate in Fayetteville, N.C.

Legal Talk: Who Owns the Mineral Rights On Your Property?

May 2017 Insight Cover
Read this and other articles in the May issue of Insight magazine.

By: Will Martin | General Counsel, NC REALTORS®

Minerals in place underneath the surface of the earth, including oil and gas, can be owned separately from the surface of the property. So what does that mean to buyers and sellers?

Minerals and mining rights can be created and transferred separately from the surface rights, and those mineral rights constitute a separate and distinct property interest. Confusing? Maybe a bit. Let’s break down the situation.

Who owns what?

The owner of the mineral rights typically has the authority to use the surface of the property in such ways and to such an extent as is reasonably necessary to obtain the minerals under the ground. Therefore, unless otherwise agreed upon, the mineral and gas rights owner may enter onto the land to explore for production, construct roads to the drill site, build pipelines, storage tanks, power stations and other structures and perform other activities consistent with the owner’s right to exercise its oil and gas rights.

A buyer should understand fully what, if any, rights are severed from a property the buyer seeks to purchase. On the other hand, a landowner or seller should understand their rights and obligations before entering into any agreement transferring mineral, oil or gas rights to their property.

North Carolina’s take

North Carolina law now requires most sellers of residential property, including builders and sellers of new construction, to provide a Mineral and Oil and Gas Rights Mandatory Disclosure Statement (available on the N.C. Real Estate Commission’s website) to interested buyers before they make an offer. The seller’s representations regarding the severance of mineral, oil and/or gas rights are based upon the seller’s actual knowledge and not the representations of any real estate agent engaged by the seller or buyer.

The owners of some residential properties are not required to provide a Mineral and Oil and Gas Rights Mandatory Disclosure Statement, including, but not limited to, owners of vacant real estate (i.e., with no residential dwelling) and lenders that own property acquired after foreclosing on their loans.

The standard contract form used in many residential real estate sales in N.C. is the Offer to Purchase and Contract (form 2-T), which is jointly-approved by NC REALTORS® and the N.C. Bar Association. The contract makes it clear that a buyer’s receipt of a Mineral and Oil and Gas Rights Mandatory Disclosure Statement does not modify or limit the obligations of the seller under the contract to provide “good title” to the property except as may be assumed or specifically approved by the buyer in writing.

When to get legal advice

The severance of mineral, oil or gas rights affects the title to the property. Discovering and rendering opinions on matters affecting title to real property is outside the scope of a real estate broker’s expertise and constitutes the practice of law. In addition, a real estate agent representing a seller or buyer would not be expected to conduct an independent investigation to confirm whether the seller’s representations on the Mineral and Oil and Gas Rights Mandatory Disclosure Statement are correct. A North Carolina real estate attorney should be engaged to determine whether any such rights have been severed from the property. This determination typically is a part of the title search performed by the closing attorney. If mineral, oil and/or gas rights have been or will be severed from the property, the buyer should consult with an attorney about the potential consequences of proceeding with any purchase of the property.

The information in this article has been taken from the Buyer and Seller Advisories, which are available to NC REALTORS® online at ncrealtors.org.

Learn How Your Smartphone Can Save Your Life

Join us June 14 at 10:00 am for a webinar that will teach you how to use technology to save lives.

Agents love their tech. But, do you know how to utilize technology to protect yourself and your clients during the real estate process? In this webinar, Tracey Hawkins, a.k.a. “Tracey, the Safety Lady,” will teach you the proper way to safely share things on social media, what to look for in a safety app and how to use your smartphone as a weapon to protect yourself from danger. This knowledge can then be shared with your clients to help build loyalty. Don’t miss these key technology tips and online resources — they may save your life!

Register now to reserve your spot!

NC REALTOR® Phyllis Furr St. Clair and Edith Wilson win The Smart Move™ contest

NC REALTORS® is thrilled to announce Phyllis Furr St. Clair, NC REALTOR® and past president of Homes4NC, and her client, Edie Wilson of Charlotte, are the winners of The Smart Move™ contest. Edie’s entry was unanimously selected out of dozens of eligible entries by a neutral jury panel and was based on originality, creativity, storytelling, and demonstrating why working with an NC REALTOR® was a “smart move” for her. The prizes were awarded during a special ceremony at the NC REALTORS® 2016 Conference & Expo.

The Smart Move™ Contest Winner

Edie Wilson won $7,500 towards home remodeling, Phyllis won $2,500, and the Charlotte Regional REALTOR® Association (CRRA) won $2,000. The prizes were funded by a grant awarded by the National Association of REALTORS®. Both Edie and Phyllis’ prizes included a three-day/two-night stay at The Greenbrier during the 2016 Conference & Expo.

NC REALTORS® formally launched the consumer campaign, The Smart Move™, on July 15, 2016. Designed to encourage utilizing NC REALTORS® in the buying and selling process, the campaign highlights the added value REALTORS® bring to consumers and local communities, reinforcing the idea that NC REALTORS® are The Smart Move™. The campaign also promotes home ownership and the positive impact it has on families, communities, and the economy.

The Smart Move™ contest, which was arguably the highlight of the campaign to date, ran from July 15-August 15, 2016. Consumers who bought or purchased a home in North Carolina within the past 24 months and worked with an NC REALTOR® were encouraged to share their “smart move” story for a chance to win cash prizes. Entries were submitted online and reviewed by a neutral jury panel, consisting of corporate and non-profit leaders from across the state, representing Homes4NC, Lennar Homes, and WKZL/WKRR-FM among others.

A Big Win for REALTORS®, Future Homebuyers!

REALTOR® Action CenterOnce again the voices of REALTORS® were heard loud and clear on Capitol Hill, and we scored a big win for future homeowners!

Thanks to the more than 139,000 REALTORS®, or 15 percent of our members, across the nation, the Housing Opportunity through Modernization Act of 2016, or H.R. 3700, passed the U.S. Senate by unanimous consent, and was signed into law by President Obama on July 29, 2016.  This legislation:

  • Solves a number of concerns regarding FHA’s condo rules:
    • Reduces the FHA condo owner occupancy ratio to 35%, unless FHA takes alternative action within 90 days.
    • Directs FHA to streamline the condo re-certification process.
    • Provides more flexibility for mixed use buildings.
    • Mirrors the Federal Housing Finance Agency’s (FHFA) rules regarding private transfer fees for FHA condo lending.
  • Provides permanent authority for direct endorsement for approved lenders to approve Rural Housing Service (RHS) loans.
  • Makes reforms to federally assisted housing programs to streamline the programs.

On behalf of the NAR Leadership Team, we would like to thank you and your colleagues for this amazing grassroots effort and for all your support for this national Call for Action.  Our state and local association partners did a great job in leading the efforts to get the U.S. Senate to act on this critical legislation.

This victory was made possible by the collective efforts of the NATIONAL ASSOCIATION OF REALTORS®, and our state and local association partners. When REALTORS® speak in a single unified voice, Congress listens.

 

Learn more at realtoractioncenter.com.