Winston Salem | NAR Ruling Explained

 

Please talk to me before Listing Your Home!

The **NAR ruling** refers to a major legal settlement involving the **National Association of Realtors (NAR)** and its policies regarding real estate agent commissions. Here's a breakdown of the key points:

### **1. What Was the Lawsuit About?**

   - The lawsuit (*Burnett v. NAR et al.* and *Moehrl v. NAR et al.*) alleged that **NAR and major brokerages** conspired to keep real estate agent commissions artificially high by enforcing rules that disadvantaged home sellers.

   - The core issue was the **"cooperative compensation" rule**, which required sellers to offer compensation to buyer's agents when listing a home on a **Multiple Listing Service (MLS)**.

### **2. Key Allegations**

   - **Mandatory Buyer Agent Commissions**: Sellers were effectively forced to pay fees (typically 2.5–3%) to the buyer’s agent, inflating costs.

   - **Lack of Negotiation Transparency**: Critics argued that buyers were unaware they could negotiate agent fees, leading to higher overall costs.

   - **Anti-Competitive Practices**: The plaintiffs claimed NAR’s rules stifled competition by keeping commissions high even as technology (like online listings) reduced agents' workload.

### **3. The Settlement (March 2024)**

   - NAR agreed to a **$418 million settlement** to resolve the lawsuits.

   - Major changes include:

     - **Ending the "cooperative compensation" rule**—sellers no longer have to pre-set buyer agent commissions in MLS listings.

     - **Written buyer agreements required**—buyers must now sign agreements with their agents outlining compensation terms upfront.

     - **More negotiation flexibility**—buyers and sellers can now discuss commissions more openly.

### **4. Impact on the Real Estate Market**

   - **Lower Commissions**: Experts predict commissions may drop (possibly to 1–1.5% per side) due to increased competition.

   - **More Transparency**: Buyers will know exactly what they’re paying their agents.

   - **Potential Shakeup for Agents**: Some agents may leave the industry if fees decline significantly.

   - **Possible Lower Home Prices**: If seller costs decrease, some savings could pass to buyers.

### **5. When Does It Take Effect?**

   - The new rules are expected to go into effect in **mid-July 2024**, pending court approval.

### **6. Controversy & Pushback**

   - Some argue the changes could make it harder for **first-time buyers** (who may struggle to pay agents directly).

   - Others believe it will **modernize** the industry and reduce inflated costs.

### **Final Takeaway**

The NAR ruling is one of the biggest shifts in real estate in decades, potentially saving sellers billions but also disrupting traditional agent compensation models. If you're buying or selling soon, expect more negotiation on fees and clearer contracts.

Would you like details on how this affects your specific situation?

Winston Salem | What is going Rate for Property Management Fees?

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Winston Salem | Frequently Asked Real Estate Questions - Buyers, Sellers and Investors

 

Here are some of the **most frequently asked real estate questions**, along with concise answers to help buyers, sellers, and investors:

### **For Buyers**  

1. **How much house can I afford?**  

   - Lenders typically recommend spending no more than **28-36% of your gross income** on housing. Use a **mortgage calculator** to estimate based on income, debt, and down payment.  

2. **What’s the difference between pre-qualification and pre-approval?**  

   - **Pre-qualification**: A rough estimate based on self-reported finances.  

   - **Pre-approval**: A lender verifies your credit, income, and assets, giving you a stronger buying position.  

3. **How much should I put down on a house?**  

   - Conventional loans usually require **5-20% down**, but FHA loans allow **as low as 3.5%**. A **20% down payment** avoids private mortgage insurance (PMI).  

4. **What are closing costs, and how much are they?**  

   - Typically **2-5% of the loan amount**, covering fees like appraisal, title insurance, and taxes.  

5. **Should I buy now or wait for prices to drop?**  

   - Market timing is difficult. If you find a home you love and can afford, buying sooner may be better than waiting for uncertain price drops.  

### **For Sellers**  

6. **How do I determine my home’s value?**  

   - A **comparative market analysis (CMA)** from a realtor or an **appraisal** provides the most accurate estimate.  

7. **What repairs should I make before selling?**  

   - Focus on **curb appeal, minor fixes (paint, leaks), and kitchen/bath updates**—major renovations don’t always pay off.  

8. **How long will it take to sell my house?**  

   - Depends on the market, but the **average is 30-60 days** (faster in hot markets, slower in buyer’s markets).  

9. **Do I need a real estate agent to sell?**  

   - While **FSBO (For Sale By Owner)** is an option, agents help with pricing, marketing, and negotiations, often securing a **higher sale price**.  

10. **What’s the best time to sell?**  

   - **Spring and early summer** are peak seasons, but low inventory in winter can also attract serious buyers.  

### **For Investors & General Questions**  

11. **Is real estate a good investment?**  

   - Real estate can provide **cash flow, appreciation, and tax benefits**, but it requires research and management.  

12. **What’s the 1% rule in rental properties?**  

   - Monthly rent should be **at least 1% of the purchase price** (e.g., a $200K home should rent for $2,000/month).  

13. **What’s the difference between a buyer’s and seller’s market?**  

   - **Buyer’s market**: More homes for sale, lower prices.  

   - **Seller’s market**: High demand, low inventory, higher prices.  

14. **How do I negotiate the best deal?**  

   - For buyers: **Get pre-approved, research comps, and be flexible on closing dates**.  

   - For sellers: **Price competitively, highlight upgrades, and consider incentives**.  

15. **What are the biggest mistakes to avoid?**  

   - Buyers: **Skipping inspections, overextending budget**.  

   - Sellers: **Overpricing, neglecting repairs**.  

   - Investors: **Underestimating expenses, not screening tenants**.