It’s been a busy year at the Real Estate Commission, and as we wrap up 2024 and look towards 2025, let’s review some of the major events of the year.
The NAR Settlement
First on every REALTORS®’ mind: the National Association of Realtors’ settlement. While the settlement applies only to brokers who are members of the Association, it has had a broad impact on brokerage practice. If you haven’t heard about this then your license must be expired or inactive and you need to reinstate it before December 31, 2024 (hint, hint).
In November 2024, final court approval was granted in the nationwide anti-trust class action lawsuit that alleged that NAR’s practices inflated broker commissions. NAR agreed to two rule changes that went into effect in August prior to the approval of the settlement. First, REALTORS® can no longer include the buyer agent’s compensation when listing homes on the MLS. Second, buyers can negotiate their own agent’s pay and formalize it in a signed contract.
First, let’s distinguish between brokers and REALTORS®. The Real Estate Commission licenses brokers, but REALTORS® are licensed brokers who are also voluntary members of the NAR trade association. One does not have to be a REALTOR® to be a broker, but you must be a broker to be a REALTOR®.
Second, please remember that Rule 21 NCAC 58A .0104 already requires that all agency agreements must be in writing. So, while the new NAR rule change calls for a signed contract between the buyer and their REALTOR® that addresses compensation, the Real Estate Commission has required this for some time now and it is not a new requirement in North Carolina. What is new is the timing, and that applies only to REALTORS®. They must now have an agreement signed prior to touring a home with a buyer.
Revised RPOADS
The Commission revised the Residential Property and Owners’ Association Disclosure Statement (RPOADS) effective July 1, 2024. While the new RPOADS has a slightly different format and larger font, most of the questions remained the same with the addition of more detailed questions addressing flooding and related issues.
As a reminder, the RPOADS is used for residential properties and is filled out by the seller, not the broker. As to sellers, North Carolina is an “as is/buyer beware/caveat emptor” state (however you want to say it), which means an unlicensed seller may choose not to disclose any material facts by selecting “no representation” (the “NR” circle on the RPOADS). However, if the seller is a licensed broker, they are required to comply with Commission rules, which require aevery broker to disclose any material facts about the property that they know or should reasonably know, even in personal transactions. So even if the seller chooses to not disclose, the broker still must. And while it’s not a requirement, the best practice would be to disclose it in writing!
Trending in 2024
Fraud continues to plague the real estate industry throughout the country. Seller imposters, identity theft, and wire fraud are on the rise as consumers have reported losing out on billions of dollars per year to various types of scams. Know the red flags and always verify information to ensure that you are protecting the best interests of your clients and helping to prevent fraudulent activity.
What Comes Next?
As we move into 2025, the Commission continues to move forward with proposed rulemaking. The proposed changes can be found on the Commission’s homepage under License Law and Rule Changes. The public comment period opens on January 15, 2025, and we encourage you to submit your comments in writing to Public.Comment@ncrec.gov by March 17, 2025. In addition to the comment period, the Commission encourages you to attend the February 2025 public hearing on the proposed rule changes in High Point.
And finally, Happy New Year to all of our licensees and educators from the Commission and its Staff.