Tech Corner: Maintaining a Professional Online Presence

Video link: https://youtu.be/8MDeKTIFbC0

In today’s digital world, social media has become a crucial tool for growing businesses looking to build their brand and foster relationships with clients. By effectively using social media platforms, real estate brokers can set themselves apart from others and expand their network. Whether you’re just getting started or looking to enhance your online presence, it is important to keep yourself safe while being mindful of what you say on the internet and how you say it.

1. Why social media? Social media is a powerful business tool that allows real estate brokers and firms to connect with potential clients, build new relationships, and establish a strong online brand presence. Brokers can showcase properties, advertise services, and offer tips to consumers.
2. How can I protect my personal information? It is important to take personal safety into consideration when using social media. Brokers may want to separate their personal profiles from their business profiles. Use strong, unique passwords for both personal and business social media accounts. Enabling two-factor authentication for added security helps to protect both types of accounts. Be mindful of oversharing personal details, especially if you have public-facing business accounts. Avoid sharing private moments that could potentially harm your professional reputation.
3. What can I share? Your business accounts should maintain a professional, clear, and consistent tone appropriate for your brand and audience.The Commission has received complaints about brokers posting offensive content on social media. Posts that someone may consider offensive (e.g. discriminatory, political, angry rants, etc.) may not only damage your business and reputation but may lead to complaints with consumer websites, professional groups or associations, your firm and the Commission. Brokers are entitled to express their opinions and political beliefs. Being rude is generally not enough to constitute a violation of the License Law or Commission rules. On the other hand, the Commission may reprimand, suspend or revoke the license of a broker who is unworthy to act as a broker in a manner as to endanger the public interest. This could include conduct such as threatening physical harm or violence. As brokers continue to expand their use of social media to network and promote their businesses, brokers should carefully consider the effect of their online presence, particularly on professional pages. A firm’s broker-in-charge (BIC) should also consider using written office policies to address their broker’s conduct in communicating in person and online. For more information, review the eBulletin article, Think Before You Speak…or Post.

By taking these steps, you can maintain privacy and security for both your personal and professional life, reducing the risks of data breaches, identity theft, and unwanted cross-over between your personal and business worlds. The choices you make online can leave a long-lasting digital footprint, making it more important than ever to be intentional about the digital you leave behind.

Medicaid Liens on Real Property

Recently, brokers have been requesting information on Medicaid liens for properties that are being voluntarily sold and placed on the market. This article was written to help clarify the source, nature and effect of Medicaid liens on real estate.

Medicaid is a federal program, established in 1965, that is managed individually by each state to provide healthcare coverage for individuals who do not qualify for welfare but still have incomes low enough that they cannot afford healthcare on their own. In North Carolina the Medicaid program is administered by the North Carolina Department of Health and Human Services (DHHS).

Medicaid eligibility is based on limited assets. A Medicaid recipient is entitled to retain their home as a primary residence so long as the home’s equity does not exceed a certain amount, which can change year to year.

Should the recipient require long term care, such as a nursing home, then Medicaid rules envision using the equity in the home to recover those expenses and recovering the costs from the homeowner. More information is available from the NC Department of Health and Human Services,  

As part of these recovery programs, Medicaid will place a lien on the real estate for the amounts expended for care. It is not uncommon with extended care facilities or nursing homes for those costs to be thousands of dollars per month. While Medicaid has a lien on the property, the program is precluded from foreclosure as a lien holder under certain circumstances such as when:

• A spouse still resides in the property;
• A minor child resides in the property;
• An adult child resides in the property but acts as a caretaker.

For real estate professionals, this means that there could be a Medicaid lien on the property, which is not being foreclosed upon, but which will need to be satisfied in full with the NC Department of Health & Human Services should the owners wish to engage in a voluntary sale of the property.

Many recipients and family members may believe that the home is an exempt asset. While the home is considered an exempt asset for purposes of Medicaid qualification, it may still be subject to liens by Medicaid. Determining the amount of the lien and obtaining approval for the sale from government entities may take longer than the parties anticipate. It is also possible that the existence of the lien may affect the decision or ability of the owners to transfer the property. As a result, advice from an attorney in such situations is strongly encouraged.

When a broker is aware that a Medicaid lien is attached to the property, the broker should disclose this to any prospective buyer.  Listing brokers who are aware that their seller-client is receiving Medicaid should inquire about the existence of a Medicaid lien. If one exists, listing agents  should strongly encourage sellers to speak with an attorney specializing in Medicare benefits prior to listing their home.

Reminder: Reconcile Your Trust Account Knowledge

Commission Rule 58A .0110(g)(9) requires Brokers-in-Charge to complete the Commission’s Basic Trust Account Procedures Course within 120 days of assuming responsibility for a trust account provided they have not already completed the course within the previous three years. If the BIC never opens another trust account or assumes control of another one, they are not required to complete the course again.

Even so, BICs are encouraged to complete the course on a more routine basis. For the 2020-2021 license year, the mishandling of trust account funds resulted in almost 20% of all disciplinary actions. The Commission has since revamped its Basic Trust Account Procedures Course and now offers it through distance (self-paced online) delivery on our Online Training Portal (https://learn.ncrec.gov). While trust account issues have slowed, mismanagement of the funds of others remains an ongoing issue.

While all licensees must safeguard and protect the money and property of others entrusted to them, the ultimate responsibility to oversee and safeguard the monies of others passing through the office rests with the BIC. The BIC remains responsible for the trust account, even if they hire an assistant, accountant, or bookkeeper to assist with record-keeping. Brokers should be mindful of the fact that embezzlement can happen even with trusted bookkeepers or long-time employees, and it is made easier when there is no oversight of their activity.

Since the responsibility ultimately falls on the Broker-in-Charge, it is in their best interest to maintain a working knowledge of how to properly maintain a trust account. BICs who complete the course will, at a minimum, learn what they need to know to adequately supervise their bookkeeper and what the software program needs to be able to produce in the way of reports in order to be compliant. As a bonus, it also qualifies as an elective continuing education course.

Whether a Broker-in-Charge personally maintains their brokerage’s trust account or delegates that responsibility to others, it is essential they maintain an active working knowledge of the rule requirements regarding the handling and reconciliation of funds in that trust account. Even if a BIC is in compliance with the minimum requirement to complete the Basic Trust Account Procedures Course once, it is highly recommended they regularly review and complete the course in order to ensure the safeguarding of their clients’ money and for the protection of their own business.

They Did What?! 

Prior to listing their property, the Seller completed the Residential Property and Owners’ Association and Disclosure Statement (RPOADS) and Mineral and Oil and Gas Rights Disclosure Statement (MOG). The Seller marked “No Representation” for their responses on the RPOADS.

Buyer and Seller went under contract using the NCAR/NCBA Standard 2-T Offer to Purchase and Contract. During the Due Diligence Period, Buyer discovered an issue that the Seller chose not to repair, nor did the seller offer concessions. Buyer terminated the contract and requested the return of the non-refundable Due Diligence Fee (DDF). The buyer agent (BA) threatened to file a complaint against the listing agent (LA) with the Commission if the Seller did not refund the DDF based on the seller’s lack of disclosure. The repair issue in question may or may not have been something the LA should or could have reasonably known existed.

In North Carolina, a broker should consider the following points:

• a broker is responsible for discovery and disclosure of material facts;
• while brokers have an affirmative duty to discover and disclose material facts, brokers are not expected to be experts on everything about a property;
• buyer agents should fully prepare their client prior to submitting an offer about the fact that once paid, the DDF is rarely refundable;
• disputes leading to complaints between brokers should be separate from contract negotiations;
• weaponizing the filing of complaints or lawsuits against another broker to have them strongarm their client would be a breach of fiduciary duties and possibly the REALTOR® Code of Ethics.

If you have any questions or need further clarity, you may email Regulatory Affairs at regulatoryaffairs@ncrec.gov.

Is a Federal BOI Filing Required for a NC Brokerage Entity?

The federal Corporate Transparency Act (CTA) was passed in 2021 and included significant reforms to prevent money laundering, combat terrorist funding and reduce corruption and tax fraud. Part of the CTA was the creation of an e-filing system that would require certain types of U.S. and foreign entities to report beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury.

The mandatory report is called a Beneficial Ownership Interest Report (BOIR). Most LLCs, corporations and other legal entities are required under the new law to file the BOI Report with FinCen or face potential substantial penalties.

The law is currently the subject of legal challenges. Filing deadlines have been imposed, temporarily halted, and reinstated. The North Carolina Real Estate Commission recommends that brokerage entities in North Carolina who have not already filed promptly seek out specific legal advice as to how the law applies to them and any filing deadline to which the brokerage firm may be subject.   More information is available at https://www.scotusblog.com/case-files/cases/garland-v-texas-top-cop-shop/.

Artificial Intelligence: NC Real Estate Commission

Link: https://youtu.be/Naqv7biI6JI

The North Carolina Real Estate Commission first introduced artificial intelligence in its January 2024 eBulletin. AI has become an important part of our outreach, allowing the Commission to deliver more effective and engaging content for both real estate professionals and the public.

The Education and Licensing Division has published over 50 AI videos this year for consumers, brokers, and educators. The addition of these new resources led to a redesign of our YouTube Channel, @NCREC. The YouTube channel gained more subscribers in 2024 than ever before, with a 24% increase.

The surge in subscribers shows the growing demand for accessible real estate education and reliable resources. To further expand our reach, these AI videos were also shared across NCREC’s social media channels, most notably on Facebook. The Facebook page saw an increase in engagement, with an additional 3,000 visitors compared to 2023. Not only did the page see increased visits, but its overall reach metric grew by over 7,500, meaning that more individuals viewed the Commission’s content. Another exciting milestone for NCREC in 2024 was the launch of unique, AI videos on social media. These videos had over 32,500 views.

However, NCREC’s use of AI doesn’t end with video content. At the Educator’s Conference held in March 2024, the Education and Licensing Division took a deep dive into AI, offering a detailed presentation on how artificial intelligence can be used for real estate education. Staff introduced tools like Synthesia for video creation, Adobe Firefly for graphic design, and ReadAI for conducting video meetings. They further demonstrated how these tools can simplify processes, enhance presentations, and improve overall education.

Looking ahead, NCREC remains committed to embracing new technologies as they emerge. As AI continues to evolve, so too will the Commission’s efforts to protect the public interest in real estate brokerage transactions. While AI can be a powerful tool for learning and communication, it is important to note that it still requires careful oversight, like verifying the accuracy of information. Review the article, “Generative Artificial Intelligence and Copyright Law” to familiarize yourself with AI copyright laws.

The North Carolina Real Estate Commission’s first year of utilizing AI has seen impressive growth and innovation. As we move forward into 2025, NCREC will continue to use the power of AI to provide valuable, accessible, and accurate resources for consumers, brokers, and educators.

Tech Corner: Subscribe to Rulemaking Notifications

Video Link: https://youtu.be/2c0ynxNT74U

Did you know you can opt in to receive notifications about proposed or final rule changes? It’s a quick and easy process to subscribe to “rulemaking.”

Commission Presentations

December 2024 Presentations

Bruce Rinne, Information Officer, spoke at Lifestyle International Realty on December 3^rd.

Bruce Rinne, Information Officer, spoke at BHHS Carolinas Realty on December 4^th.

Miriam Baer, Executive Director, spoke at Land of the Sky Association of REALTORS® on December 18^th.

January 2025 Presentations

*These presentations are subject to change due to the availability of Commission members and/or staff.*

Bryan Boyd, Deputy Legal Counsel, and Bruce Rinne, Information Officer, will speak at Lantern Realty and Development LLC on January 8^th.

Diversity, Equity, and Inclusion Article

Throughout the last year, the North Carolina Real Estate Commission has worked tirelessly to grow and expand our outreach programming, which was developed in part to engage with and attract diverse groups of young professionals to the real estate industry.

We accomplished a lot during the last year, none of which would have been possible without the support of our licensees and dedicated industry partners, and for this we are extremely appreciative.

Highlighted below are some of the things we accomplished in 2024: 

• Expanded our presence to eight out of ten North Carolina Historically Black Colleges and Universities (HBCUs)
• Hosted five networking lunch and learn panels
• Participated in over eight campus career fairs
• Exposed over three hundred students to real estate as a possible career
• Had participation from nearly sixty industry volunteers
• Launched a summer internship program, hiring two summer interns
• Established a presence on North Carolina community college campuses
• Established a relationship and presence with North Carolina high schools
• Developed an introduction to careers in real estate video 

We look forward to continuing to move this programming forward in 2025 and your continued participation and support.  If you would like to be a part of our programming, please contact us here and Commission staff will be in contact with you.  

Case Study: Square Footage

FACTS:  A broker is instructed by her seller-client to hire a vendor to measure her property. The vendor indicates that the property has 2,619 square feet of permitted space and 1,001 square feet of an unpermitted in-law suite. The broker represents that the property has 3,620 square feet in the MLS, which includes the unpermitted in-law suite.

The seller-client enters into a contract with a buyer and accepts a back-up contract on the property. Buyer #1 terminates the contract due to financing during the due diligence period. Buyer #2 hires a vendor to conduct a property inspection. During the inspection, Buyer #2 is informed that the in-law suite is unpermitted and terminates the contract due to misrepresentation. The broker fails to revise the MLS listing after both Buyer #1 and Buyer #2 terminate their respective contracts.

ISSUE: Is it mandatory under Commission rules for a broker to state the square footage of a property in a listing? Did the broker fulfill their duties?

ANALYSIS:  No, and no. Brokers are not required by License Law and Commission rules to report the square footage of properties offered for sale (or rent); however, when they do report square footage, the information they provide must be accurate. The Commission clarifies this position in their resource entitled, Residential Square Footage Guidelines. These guidelines also assist brokers with how to measure, calculate, and report (both orally and in writing) the living area contained in detached and attached single-family residential dwellings.

The Commission is aware that brokers who are members of a professional trade association may be required to report the square footage of a property in a listing. Therefore, the Commission recommends brokers to carefully follow the Residential Square Footage Guidelines or any other standards that are comparable to them, including those approved by the American National Standards Institute, Inc. (ANSI) which are recognized by the Commission as comparable standards. Further, brokers should be aware of the standards a vendor may use and the differences within the standards when they are hired to measure a property.

In the scenario above, the broker should include the unpermitted section within the property separately and disclose it to all parties in writing. Written disclosure ensures brokers are not misrepresenting the property and/or misleading the buyer. Buyers should be made aware of the unpermitted section’s size and location in the property as well. Essentially, brokers should clearly identify unpermitted space within a property in the listing description.

If a broker makes any willful or negligent misrepresentation or pursues a course of misrepresentation through advertising, they may be subject to disciplinary action by the Commission. For example, if the advertised square footage is wrong, the listing agent and firm may be held responsible. Further, per Rule 58A .0110, the BIC is responsible for all advertising, so they too may be subject to disciplinary action.

RESOURCES:

N.C.G.S. § 93A-6(a)(1), N.C.G.S. § 93A-6(a)(8), and 93A-6(a)(10)

License Law and Commission Rules: 58A .0110

Articles: 2022-2023 Update Course Section, “Material Facts: Speak Up”

Residential Square Footage Guidelines

Your Square Footage Measurement Must Be Right When Listing a Property