Clearing up the confusion over recent changes to the real estate transaction process
Buying or selling a home here in Southwest Florida can be pretty complicated – and that was even before the National Association of Realtors (NAR) settled a class-action lawsuit over how agents’ commissions are calculated. The changes prompted by that legal settlement are significant – but also pretty straightforward. With the rollout of this new approach now underway, allow me to clear up some of the continued confusion. NAR settlement: what it means Under the previous standard, home sellers would typically pay the agent commissions of both buyers and sellers – typically a 5-6% split. With the NAR settlement agreement reached in the spring and taking effect in mid-August, sellers now have the explicit right to not offer to pay for both commissions. That means properties listed in the Multiple Listing Service (MLS) database will no longer include offers of compensation to the buyer’s agents. Offers of compensation are still an option but must be communicated off-MLS if a seller chooses to make an offer available. So, the seller of a $1 million home would only pay $25,000 or $30,000 in commissions to their agent - rather than twice as much for both sides. Practically speaking, though, commissions have always been negotiable; if you called and told me you were ready to sell your house, we would discuss a negotiation in terms of commission – both how much I'd receive and how much the buyer’s agent would get. However, most sellers were not going that route. In today’s competitive market, most sellers offer to pay for both commissions. The difference now - this is part of the negotiations, not an assumption. Here’s what I advise sellers: (1) Don't bite the hand that feeds you (the buyer’s agent) and (2) Don't make it more difficult for a buyer to purchase your property. In an already competitive housing market, it just doesn’t make sense. VIEW NEW LISTINGS NAR settlement: Impacts on Southwest Floridians In general, this change favors sellers. If I’m representing a buyer, I have to sign a buyer-broker's agreement with them – before even showing the property – stipulating that they’re required to pay me a commission if I can’t collect it from the seller. That can make it a bit awkward for the buyer, since they’re probably already nervous about fees and closing costs. Buyers are thinking about the expenses stacking up, when most of the time, the seller has still paid for every one of those deals. As for the impact on those of us in the industry, newer agents will likely see more of an adjustment period with this new change (or wind up leaving altogether) than more experienced agents. Newer agents have had less life experience with a difficult housing market; during the pandemic, selling houses was much easier. Houses were on the market for brief periods, if even, and required little advertising, marketing or open houses. With these changes, newer agents may feel a bit nervous – right now, they aren’t making money unless they sell a house, and commission negotiations coming to light may be a challenge for them to navigate. This market shift is giving agents the opportunity for the best of the best to rise to the surface. READ MORE: Hot Southwest Florida neighborhoods Right now, we’re in more of a buyer’s market. With our current political environment, world issues and high interest rates, people are a little bit nervous. We’ve also had a lot of properties come onto the market recently. But an important thing to note is that buyers are getting the most incredible deals right now. With new construction builders, you can get some incredible deals, like buy downs on your interest rates and downpayment assistance. VIEW NEW BUILDS This change will take some getting used to, but it is nothing to be afraid of. Commissions have always been negotiable – it's just that the ability to negotiate is clearer now. As NAR itself notes, “These practice changes provide consumers on both sides of a residential transaction with additional choice and transparency.” Need a trusted real estate agent? Contact Aprile Osborne, chief vision officer of Call it Closed International Realty, at 239-220-8607.
Stocks, storms and Southwest Florida: impacts on the housing market
There’s a lot of chaos in the air, especially for us Floridians. From a sudden stock market plunge in early August to Debby - a soaking tropical storm turned Category 1 hurricane - it’s been quite the recent wild ride, especially for those trying to buy or sell a home. If you’re thinking about a home sale or purchase, try to keep the chaos on the outside and not let it come inside. Doing so will guarantee that you can have a sanctuary, or a place of peace, because home is so important. With recent events raging strong around us, what’s the expected impact on the housing market? And, more importantly, what should buyers and sellers do to make the most of these tricky situations? Impact #1: Prime Time to Buy One thing about Southwest Floridians - we know the ebbs and flows of real estate like the back of our hands. Many locals have lived here for decades and have experienced the real estate market at all stages and phases. As lifelong locals, we know that there are moments in Southwest Florida when you can get incredible deals, which don’t come often. Right now, there are properties on the market that have never been there before. Why? Storms. Because of recent hurricanes and tropical storms, you can actually pick up historical, estate-style properties that you’ve never been able to touch before. Properties and homes that have remained within families for generations upon generations are now up for grabs, oftentimes due to the Florida weather and families choosing to move elsewhere. From Lee to Charlotte to Collier, we have the most incredible opportunities and inventory that we’ve ever had. It’s incredible. With so many properties on the market, the possibilities are endless. VIEW NEW LISTINGS Impact #2: What about selling? Just a few days before Debby blew through Lee County and the stock market took a dip, I had a conversation with a seller where they were trying to decide which plan of action was best: sell right now or wait a little bit longer? When trying to sell your house, remember this: what comes down will come back up – sometimes faster than it went down in the first place. Think about when you bought your home – if you purchased it in 2017 and are selling it in 2024, you're going to make money. If you bought your home last year and are trying to sell it this year, you won't earn as much money. With that in mind, as well as uncertainty caused by recent events also factoring into the equation, it may be better to sit and wait if you can. Impact #3: The Stock Market In early August, the stock market saw its biggest single day drop in over two years, shaking consumer confidence and raising fears of a recession – though by week’s end, the markets had nearly fully recovered. Naturally, we should expect that development to have an impact on Southwest Florida real estate. If anything, I think that this plunge will result in increased uncertainty among buyers and sellers, and both will become more cautious and adopt a wait-and-see approach. Also, this development could solidify Federal Reserve plans to cut interest rates at its next meeting in mid-September; analysts say that interest rates could be cut by half a point, rather than the expected quarter-point reduction. If you’re an avid stock market investor who has reservations after the recent plunge, consider moving your money into a safer investment, like real estate, instead of stocks. Use that money to buy a rental property, Airbnb or second home. VIEW SWFL RENTAL LISTINGS When it comes to real estate, external factors can certainly impact the market in numerous ways, from available housing stock to mortgage rates, to buyer and seller behavior. Enlist the help of a real estate agent as you navigate these world challenges while finding a place to call home. Need a trusted real estate agent? Contact Aprile Osborne, chief vision officer of Call it Closed International Realty, at 239-220-8607.
Good news, bad news: real estate and the 2024 presidential election
There are less than 100 days until our next presidential election — and its outcome will undoubtedly impact the Southwest Florida housing market. Historically, the stakes of a U.S. presidential election impact the housing market, both nationally and here in Southwest Florida. This year is no exception, given the already unprecedented events of recent weeks. In general, uncertainty rises among homeowners and buyers in the months leading up to this every-four-year ritual. No matter your decision at the ballot box, many voters are feeling uncertain, uneasy and unsure about the economy, inflation, crime and of course, housing. If you look over previous election years, especially this year, people tend to freeze, and the market feels the shiver of the “wait-and-see” approach. Go for the Gold, or Wait and See? My biggest advice amid the high drama of this presidential election season and its impact on the Southwest Florida housing market: stay steady and calm. Remember, buyers and sellers: no matter what is going on in the world, people still need a place to call home. The high degree of uncertainty has created a buyer’s market here in Southwest Florida, which I don’t think we’ll have for very long. A recent check of Realtor.com found 4,300 listings for Fort Myers and more than 21,000 for Lee County. In Naples, another 6,400 homes are up for grabs, with 8,000 being the grand total for Collier County. Mortgage interest rates remain high, but an anticipated Federal Reserve rate cut in September (the first of three quarter-point cuts by year’s end) is expected to bring some sorely needed relief, marking the first such interest rate reductions by the Fed in more than four years. In the meantime, some sellers (and builders) are offering their own incentives: a buydown at a lower interest rate. My advice to clients? Don’t go for the gold just yet – stay put. Wait and see how the election outcome plays out before making any new home decisions. VIEW SWFL LISTINGS A Buyer’s Market With more supply than demand in the local housing market, it’s never been easier for buyers to negotiate with builders and homeowners to get what they want in their future homes. If you're looking to buy, particularly a new construction home, you can ask that builder to pay down the home's interest rate, or even ask them to pay closing costs along with an interest rate buydown, along with a reduction in the asking price. At the end of each year, builders must show their net sheets, so they want to make deals at the end of the year. Negotiating is always an option. When buying, there are so many types of homes to consider. Older homes are a personal favorite of mine, as they often have beautiful landscaping and an awesome “Old Florida” feel that you can make your own. On the flipside, I really enjoy new construction communities and what they bring to the table in terms of amenities. There’s considerable interest right now – a lot of builders are bringing in indoor pickleball courts, basketball courts, volleyball, indoor basketball, and so many other in-house activities for residents – the community center is practically an all-inclusive resort, making it an enticing offer for new buyers. VIEW OLD FLORIDA LISTINGS The real estate market ebbs and flows during presidential election years. Think back to four years ago, when we also were dealing with the COVID outbreak amid yet another election year for the history books. But remember – people also need a place to call home. While it remains a buyer’s market, sellers who purchased their properties years ago remain in an enviable position – if you need to sell, there is still a profit to be made. The election is already playing a role in the housing market, and no matter what the outcome is, the effects will still play out. November isn’t that far away, and the market could swing more toward the seller’s favor once the election happens. Need a trusted real estate agent? Contact Aprile Osborne, chief vision officer of Call it Closed International Realty, at 239-220-8607.
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