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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 3rd.

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

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

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 8th.

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: 

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

Reminder: Square Footage

Can tax records be used as a resource for square footage measurements?

No. Brokers cannot utilize tax records as a resource for square footage measurements. If a broker finds after measuring the property, that the square footage measurement differs from the information in the tax records, there may be other issues, like a permit, that need to be investigated and resolved. Blueprints are also not an acceptable resource for square footage measurements.

If you have any additional questions, please go to the Commission’s website and review the resource Residential Square Footage Guidelines.

New Year’s Resolutions for Real Estate Brokers in 2025: Focus on Education and Staying Informed

As 2025 begins, North Carolina brokers have a perfect opportunity to enhance their expertise and better serve their clients. A focus on education and staying informed about evolving rules and laws is essential in today’s changing environment. Here are resolutions to guide your professional growth this year.

1. Stay Updated on Rules and Laws

The North Carolina real estate industry is governed by regulations that can change quickly. Make it a priority to monitor updates to Commission Rules. Sign up for notifications on rule-making activities to stay ahead of any changes that impact your practice Subscribe to the Commission’s mailing list to receive notice of rulemaking (rule changes, additions, or deletions).

2. Be Proactive with Continuing Education

If you have not already completed your Continuing Education (CE) for the 2024-2025 license period, don’t wait until the June 10th deadline. Completing your CE requirements early ensures compliance and reduces the stress of last-minute planning. Use this opportunity to take courses that align with your professional goals or address emerging trends in the market. 

3. Foster Diversity and Inclusivity

Make it a priority to understand and meet the needs of clients from all backgrounds. Familiarize yourself with Fair Housing laws and adopt practices that ensure every client feels respected and welcomed. Consider diversity training or community outreach initiatives to broaden your understanding of the unique challenges some consumers may face.

4. Engage in Mentorship and Education

Share your knowledge by mentoring new agents or hosting educational sessions for clients. Teaching reinforces your expertise and strengthens your professional reputation. 

Conclusion:

In 2025, focusing on education and staying informed about regulatory changes will help you stand out as a trusted professional. By committing to continuous learning, mastering new tools, and staying engaged with the latest industry updates, you’ll provide exceptional service and build lasting success. Make this year your most knowledgeable and impactful yet!

Reminder: Preparing your 2024 Clients for the 2025 Tax Season

With 2025, comes the ponderous task of closing out files for 2024. Why not generate some good will along with what is usually an administrative chore?

Like you, your buyer and seller clients from 2024 are starting to gather their records in order to prepare and file their income tax returns. Think how appreciative they would be if you sent them a copy of the settlement statement from their real estate transaction, so they do not have to hunt for it.

Guess what? You can also include your well wishes for the New Year and your contact information for possible referrals.

Reminder: Annual Rulemaking

The Commission is initiating its annual rulemaking process by proposing rules with an effective date of July 1, 2025. Rulemaking is the procedure through which the Commission interprets laws by adopting, amending, or repealing rules. As part of the permanent rulemaking process, the Commission drafts proposed rule language and submits it to the Office of Administrative Hearings (OAH). OAH then publishes the proposed text in the North Carolina Register and notifies interested parties that the Commission has begun the process to amend, adopt, or repeal a rule.

Proposed text will be published on January 15,2025 and can be found on the Commission’s website starting at that time. Once the proposed text is published, interested parties have two opportunities to provide feedback. The first is the public comment period, which lasts 60 days and allows individuals to submit written comments to the Commission. If you would like to submit a written comment, you may submit it to the Rulemaking Coordinator at public.comment@ncrec.gov.

The Commission will accept public comments between January 15, 2025-March 16, 2025. The second opportunity occurs during a public hearing held shortly after the proposed text is published. The public hearing will be held at High Point University, Anne Kerr Ballroom, One N University Parkway, High Point, NC 27260, on Wednesday, February 19, 2025, beginning at 9:00AM. During these forums, stakeholders can voice their support for or opposition to the proposed rule.

After the public comment period and public hearing conclude, the Commission reviews all submitted comments and determines whether to amend, adopt, or reject the proposed rule text. The Commission will be reaching their final decision for rulemaking on March 19, 2025. Once the final text is approved by the Rules Review Commission, the Commission will publish the approved rules.

New Commission Member: Farah Lisa Sebti

Farah Lisa Sebti is a graduate of the UNC School of Law and is currently an attorney with Sebti Law, where she has practiced since December 2019. Previously, she was with Alston and Bird in Raleigh-Durham, NC, where she represented banks, mortgage lenders and mortgage servicers in claims arising under contracts, federal regulations, and state law. She also practiced with DLA Piper LLP in New York from 2010 – 2015 in the firm’s commercial litigation and securities practice groups. Licensed in both North Carolina and New York, Ms. Sebti was named to the 2015 New York Metro and 2017 North Carolina Super Lawyers Rising Stars lists. Before becoming an attorney, Ms. Sebti worked for several years in New York City at Cosmopolitan Magazine. 

She has attended three of North Carolina’s venerable academic institutions: UNC Chapel Hill, Duke, and East Carolina University. She was born and raised in her mother’s hometown of Greenville, North Carolina; her father is from Casablanca, Morocco.  She currently lives in Charlotte with her husband and twelve-year-old son. 

Ms. Sebti was appointed to the Commission by Governor Roy Cooper.