A new almost $2B lawsuit against the National Association of Realtors has found that they have illegally colluded to keep commissions high.
If Realtor commissions are illegally high, what’s next for the industry?
How might this completely change the dynamics of the US real estate market? What moves should investors be making now?
Too High?
This latest ruling expands on other recent settlements by major brokerage chains, and several years of investigations by the Justice Department.
It’s likely we are just seeing the tip of this iceberg and its impact.
While it may sometimes appear that real estate agents do very little for their paychecks, it is also true that once you do the real math, the average agent may just barely make minimum wage.
Individual agents actually net just a small percentage of the gross commission paid by sellers. Often less than 25%. When you consider the time, liability, negotiation benefits, and efficiencies Realtors offer, the best can certainly be worth everything they are paid.
Disrupting The Industry & Market
While NAR is certainly still a well-funded and powerful lobbying force, it may eventually lose its place as the ‘ethics’ association of the industry. This, of course, didn’t happen after re-stating years of back data in the wake of 2008.
However, there may now be more powerful and better-funded influencers and disruptors looking to change the dynamics of this space.
The UK and Australian property markets have been pointed to as preferable models by some. These are markets where agent commissions can often be lower. What’s important to notice about markets like these is that not only is there often no license needed to be an agent, but housing prices are far more expensive as a result, and investors are often limited to investing in real estate purely for wealth preservation, and even accepting negative cash flow as the norm. These factors have long made America such a highly attractive and preferred international destination for capital flows. The alternative models also put a lot more control in the hands of those with the inventory.
Investing Amidst The Change
While it may take more time for this shift to take effect, now is the time to invest ahead of it.
In the wake of this news, publicly traded companies like Zillow, Redfin, and even Warren Buffett’s Home Services saw their stock prices take a hit, as investors perceived their value, which relies on these commissions, may be on the verge of decline.
Now is the time to align with those who have access to inventory and the best deals. And to lock into cash-flowing assets.
While the best agents may still offer a lot of value, there may also certainly be more ability to negotiate their commissions going forward as well.
Investment Opportunities
Find out more about investing in secured debt and real estate, go to NNG Capital Fund.
If you are an Accredited investor and would like to learn more about how to become a Capital Partner with NNG Capital Fund, Click here to set up a discovery call today!
Photo by Sasun Bughdaryan on Unsplash
Article Source: https://nngcapitalfund.com/new-lawsuit-finds-realtor-commissions-illegally-high/
The transition from selecting an ideal plot to claiming ownership can be a maze of legal uncertainties. In this case, plot promoters streamline the entire process from start to finish, simplifying everything for you. Here is a systematic exploration of the legal documentation process when purchasing a plot.
Step-by-Step Documentation Process
Initial Due Diligence
Before delving into legal complexities, it’s essential to conduct preliminary due diligence. This includes researching the plot’s history, checking for existing claims or charges, and ensuring clear ownership rights. Plot promoters initiate this phase by delving into the plot’s background, establishing a secure transaction foundation.
Drafting the Purchase Agreement
Following satisfactory preliminary checks, the next step involves drafting and executing a purchase agreement. This document outlines transaction terms, such as purchase price, payment schedule, and contingencies. Plot promoters ensure the agreement is comprehensive and safeguards the buyer’s interests.
Title Examination and Title Insurance
The most important stage in the legal documentation process is the title examination. This involves investigating the property’s history to confirm the seller’s ownership and uncover potential legal issues. Plot promoters conduct thorough title searches and often recommend title insurance to protect against any title defects.
Surveying and Zoning Adherence
To prevent boundary disputes and ensure compliance with local zoning regulations, a land survey is typically required. You should make sure that your plot promoters collaborate with surveyors to confirm the plot’s boundaries and assess its alignment with zoning laws. This step guarantees the buyer is fully informed about the plot’s dimensions and permissible uses.
Environmental Clearances
Environmental considerations play a vital role in real estate transactions. Ask your plot promoter to arrange for environmental assessments to identify potential issues like contamination or ecological restrictions on the plot. Clearances from relevant environmental authorities are sought to ensure a clean and legally compliant purchase.
Financing and Mortgage Documentation
For those seeking financing through a mortgage, a substantial portion of the legal documentation process involves collaboration with financial institutions. Usually plot promoters work closely with lenders to ensure all mortgage documents are in order, facilitating a secure fund transfer while protecting the buyer’s interests.
Finalizing the Deal
As the final step approaches, a plot promoter oversees the closing process. This involves reviewing and finalising all legal documents, including the deed, closing statement, and any additional agreements. They ensure both parties fulfil their obligations, secured fund transfer, and the buyer officially takes possession of the plot.
Registration and Ownership Transfer
Post-closure, plot promoters manage the registration of the property in the buyer’s name. This critical step formalises the transfer of ownership and ensures the buyer’s rights are legally recognized. It involves submitting the necessary documents to the local land registry or governing authority.
Post-Closure Compliance
The legal documentation process doesn’t conclude with ownership transfer. Plot promoters diligently monitor post-closure compliance, ensuring prompt fulfilment of any post-closing obligations, such as tax filings or property registrations. This follow-up underscores their commitment to providing comprehensive legal support.
Elephantine’s Legal Team
Plot acquisition involves more than a simple exchange of funds for a piece of land. The legal documentation process in plot acquisition is a multifaceted journey requiring meticulous attention to detail. Elephantine’s legal team serves as a guardian through those legal complexities, ensuring clients that they are shielded from unforeseen legal consequences.
Elephantine’s approach shows a commitment to excellence, with each step guided by legal expertise and a dedication to safeguarding the client’s interests. This ensures a secure and legally sound investment with Elephantine as buyers navigate the complexities of plot acquisition. From project initiation to conclusion, their expert legal team sets a high standard. With Elephantine, the legal landscape transforms into a canvas of opportunity rather than a maze of uncertainties.
Looking for residential or commercial plots for sale in Chennai ? Wondering who’s the best plot promoter in Chennai ? Worry not, we got you! To know more details, visit us Elephantine Enterprises Pvt Ltd.
