Knowledge Base, News

How Are Real Estate Laws Impacting Realtors?

If you are a realtor, you need to be aware of the changes to real estate laws. These changes affect how you act and how you must be compensated for your services.

Untrustworthiness or Incompetency of a Real Estate Broker

Untrustworthy or incompetent conduct by a real estate broker is a serious matter. One example of this is the NAR Lawsuit. Depending on the nature of the offense, the Department of State (DOS) has the authority to revoke or suspend a license. It has the power to impose a fine or reprimand. The most obvious consequence is that the untrustworthy broker can no longer earn commissions. 

While it may seem that an incompetent broker is the worst of all possible evils, this does not necessarily mean that the broker is guilty of all misconduct. There are instances when a real estate broker is a lone ranger regarding his misdeeds. For example, a licensed real estate broker was involved in a dispute over handling a tenant’s son. This directly violated the DRS licensing law, which precluded the broker from earning commissions.

Online Listing Services

Online listing services provide consumers with greater access to homes for sale. These services also make the value of the labor inputs provided by real estate brokers less expensive. However, there have been disputes over the regulation of these businesses in recent years.

The National Association of Realtors (NAR), the largest trade association for real estate agents in the United States, has created several policies to regulate the industry. The regulations are designed to prevent the proliferation of low-cost, low-quality competition and to limit the freedom of members of the association to compete on price.

In 2005, the Justice Department filed an antitrust lawsuit against NAR. They challenged the way the association provides information to its customers. One issue at the heart of the suit was the organization’s use of computer technology to control the flow of information.

For Sale by Owner Sites

Many people need to be convinced of For Sale By Owner (FSBO) websites. FSBO is a real estate term used by property owners not interested in having an agent help them market their homes. These sellers are legally liable for all information listed on their property.

Using FSBO to sell a home can save homeowners thousands of dollars in commissions. However, a lack of professional guidance comes with its own set of challenges.

FSBO homeowners may need more real estate knowledge and may overvalue their homes. In addition, many FSBO listings are spam. With proper marketing, these homes can sell. Therefore, it’s crucial to have a well-written and attractive listing description.

Buyers prefer to avoid FSBO properties. FSBO owners are not required to follow MLS rules, which means their listing may not reach its maximum potential price.

Sales Tax

If you’re in the market for a new home, you will come across sales tax and real estate laws. You’ll also need to know which are in effect and which are in your best interest. While you’re at it, you’ll need to know whether the tax rates are progressive or flat. This is particularly pertinent if you’re a first-time buyer who wants to avoid paying a fortune in property taxes. For this, you’ll need to know the ins and outs of your state’s governing body. After all, you don’t want to get caught off guard by the IRS slamming your door with a fine print.

Will realtors become extinct? A profession in real estate is not in decline. In 2021, there will likely be more real estate agents than ever before. One of the easiest ways to get your tax money’s worth is to find a qualified and experienced Realtor to help you navigate the red tape. When you do, you’ll have the confidence to know you’re in the right hands.