The changes were prompted by a series of antitrust lawsuits filed against the National Association of Realtors that claim it enforced practices that made it more expensive to sell a home. The industry group is also facing a $418 million settlement.

For decades, sellers have used money from the home sale to pay a commission fee that gets split between their agent and the buyer’s agent. Typically the fee is around 5-6%, though the National Association of Realtors says that number has always been negotiable.

This long-running practice could be wiped out by two new rules from the National Association of Realtors that set stricter standards for how commission is determined.

Some speculate this could lead to lower earnings for agents, sparking an exodus from the industry.

“This is really a revolutionary change,” said MaryDell Penney, a market manager for Redfin who oversees agents in Tampa and Orlando. “It’s going to require everyone to have a mindset shift.”

What will change?

Starting Aug. 17, listing agents will no longer be allowed to advertise commission when posting a home to the Multiple Listing Services, a collection of centralized databases that members of the National Association of Realtors use to find available properties.

Previously, agents were required to list compensation on the Multiple Listing Services. Plaintiffs who sued the National Association of Realtors argued that this practice drove up commission rates.

Buyers will also have to sign a written agreement with their agents outlining how much the agent will get paid. The contracts could normalize the practice of buyers paying their own agents.

What does it mean for buyers and sellers?

For some people, nothing will change. Sellers can still offer to cover the full commission fee like they always have.

But some will choose to have each party pay their own agent instead, said Lei Wedge, a professor of finance at the University of South Florida’s Muma College of Business. Now, everything is up for negotiation.
“It’s not going to be as consistent as it was before,” she said. “Now you’re dealing with everyone’s individual preferences.”

Sellers could see more cash in their pocket at closing if they opt not to cover the buyer agent’s fee.

Buyers may be burdened with a new expense. Wedge suspects that many will take more time to shop around for an agent who offers a lower commission rate or flat fee. Some may forego using an agent altogether.

Buyers will also have to reach a written agreement with their agents. Adam Grenville, a Re/Max agent and president of Greater Tampa Realtor, warned this could be especially tricky, since there’s no universal blueprint for how these contracts should look yet.

“You need to make sure you understand what you’re signing,” he said. “Ask a lot of questions.”

What does it mean for the future of the industry?

The United States has some of the highest real estate commissions in the world. Wedge said these rules could bring us closer in line with other countries if more buyers and sellers start negotiating their agents down from the traditional 6% fee.

Since the settlement was announced in March, average buyer’s agent commissions have already seen a slight decline, according to research from Redfin.

Facing a potential threat to their earnings, some agents may choose to leave the industry. One report from investment firm Keefe, Bruyette & Woods predicted that changes to the commission structure could eventually cause as many as 1 million agents to abandon the profession.

While there’s always going to be turnover after a major change in the market, Penney said there are steps agents can take to adapt.

At her brokerage, buyer’s agents are already being trained to ask for agent compensation as part of the deal when making an offer on a property.

“I think there are a lot of agents that came into the industry in crazy COVID years when it was fairly easy,” she said. “Now it’s going to be tougher. They’re going have to have super sharp negotiation skills.”

©2024 Tampa Bay Times. Visit tampabay.com. Distributed by Tribune Content Agency, LLC.

Last month Gov. Ron DeSantis signed a sweeping bill that strengthens oversight of condominium boards.

Dubbed condo 3.0, the law could give developers more control over common spaces in mixed-use condo buildings. There’s also a fast approaching deadline for new building safety standards in the wake of the deadly 2021 Surfside condo collapse.

Lawmakers and DeSantis approved the measure to restore faith in condos, said Larry Buckner, a Florida-based advisory manager for the housing research firm Zonda.

“It’s really become hard to choose a condo when you consider the recent safety concerns, negative public opinion, increased assessments and lack of transparency on condo boards,” he said.

While lawmakers hope these reforms will improve the quality of condo life in the long run, the immediate fallout could cause a slump in the real estate market as more owners sell to avoid impending assessments.

Buckner noted that condo sales in the Tampa Bay area are below the 10-year average and pre-pandemic levels. Condos are also staying on the market for longer.

What are the new rules for condo board members?

The bulk of the condo 3.0 law is aimed at cracking down on corrupt condo boards and increasing transparency for unit owners.

“Condo owners have provided evidence of real malfeasance on the part of board members and property managers who have just gone awry,” said Rep. Vicki Lopez, the Miami Republican who sponsored the legislation. “The goal is to provide proper governance.”

The law, which went into effect Monday, will:

— Set criminal penalties for condo board members who accept kickbacks; engage in voting fraud related to board elections; or fail to maintain or provide access to public records.

— Give the Florida Department of Business and Professional Regulation more power and funding to enforce existing condo laws and investigate condo boards accused of wrongdoing.

— Prohibit associations from retaliating against unit owners by suing them for defamation or increasing assessments.

— Require associations with 25 units or more to make records available to condo owners through an online webpage by Jan. 1, 2026.

— Require new board directors to undergo four hours of mandatory training on inspections, recordkeeping, financial literacy and more. All directors must undergo an hour of continuing education annually.

— Mandate that condo boards hold four meetings a year with dedicated time for unit owners to ask questions.

— Beef up disclosure requirements for condo owners looking to sell their units. Effective Oct. 1, owners must provide prospective buyers with the condo association’s annual financial statement and annual financial report.

Who is in charge of common areas in condo buildings?

In recent years Florida has seen an influx of mixed-use buildings that include both a condo and a commercial property like a resort or hotel.

Traditionally, developers have turned ownership of common areas such as pools, elevators, hallways, lobbies and green spaces over to the condo association once the units are sold.

But a growing number of developers claim that they own these spaces, not the condo owners. This has led to several high-profile lawsuits in South Florida.

A provision from a different bill that could give developers of mixed-use condos more control over common areas was tacked on to the legislation in the final stages.

The late addition has drawn criticism from condo owners who say the change will strip them of decision-making powers in their buildings and open them up to abuse from developers. Some are threatening to sue.

Stevan Pardo, a Miami attorney who successfully represented the Carillon Miami Beach condo association in a lawsuit they brought against the developer over common spaces, said the law will allow developers to raise assessments without approval from the condo board.

“Basically you’re handing off the keys to the developers and the hotels to dictate whatever property rights unit owners have,” he said.

Pardo pointed to cases where developers have been accused of overcharging condo owners.

What are the new building safety requirements for condos?

After Champlain Tower South in Surfside partially collapsed three years ago, killing 98 people, it was revealed that the condo association there had underfunded reserves and postponed major repairs to avoid raising assessments.

In May 2022, state legislators passed Senate Bill 4D to address systemic issues with how condos are maintained and financed. Several small amendments have been made since.

Under the new rules:

— Condos three stories and higher must undergo an inspection after 30 years and every 10 years thereafter. This will determine whether the building is structurally sound and if it needs repairs.

— Buildings that are already 30 years or older must have inspections completed before the end of the year.

— Condos three stories and higher must review reserve funds before the year is over and every 10 years thereafter. This will determine how much condo associations must save to properly maintain the building.

— Condos must base a budget adopted on or after Jan. 1 of next year on the findings and recommendations from the review of reserves.

— Condo associations three stories and higher will be barred from waiving or underfunding reserves.

How will this impact the real estate market?

Uncertainty about how these changes will pan out is already causing some to rethink condo ownership.

Condo and townhome listings in Tampa Bay increased nearly 99% year-over-year, according to May data from Greater Tampa Realtors. Sales fell 6%.

About 78% of condo units in Tampa Bay are 30 years or older, according to data from Zillow.

“Unfortunately in these older buildings, many people’s perspective was that you only need to fix it when it’s broken,” said Greg Main-Baillie, executive managing director for the Florida Development Services Group at Colliers who oversees construction projects for condos across the state.

He noted that certain repairs, like concrete restoration, could end up costing tens of millions of dollars. If the board hasn’t saved enough to cover the bill, the cost will fall on the shoulders of condo owners.

“It’s going to force people to decide whether they can afford to stay,” Main-Baillie said.

Disputes over common areas in certain buildings could pose another dilemma.

“What’s the value when you don’t own anything outside of your unit and you don’t have the right to control your assessments?” said Pardo.

Buckner said though some individuals may end up selling their units at a loss, he doesn’t expect to see any widespread price drops or a “fire sale.” Condos that make it through this transition will likely come out stronger and see higher values in the long term, he said.

Developers are already on the hunt for opportunities to demolish older condos and rebuild.

Though the bar for terminating a condo association is high — just 5% of unit owners can block the decision — Main-Baillie said this could be a better option for condos with serious maintenance and financial issues.

©2024 Tampa Bay Times. Visit tampabay.com. Distributed by Tribune Content Agency, LLC.

In 2022, the state added 125,000 single-family homes and 39,966 multi-family rental units, a vast improvement from the years immediately following the 2008 housing market crash. Still, it’s not enough to keep pace with the more than 450,000 people who moved to Florida in 2021 and 2022.

That lack of supply has made housing more expensive, said Anne Ray, manager of the Florida Housing Data Clearinghouse.

Last year, the statewide median price for a single-family home reached $400,000, surpassing the inflation-adjusted peak prices from 2006. A home then would have cost around $376,000 in today’s dollars.

“In some of the urban coastal counties and in really strong vacation areas, you have median home prices over $500,000,” said Ray. She pointed specifically to Broward and Miami-Dade counties.

In Pinellas, median prices ranged from $400,000 to $499,999. The median for Hillsborough was $350,000-$399,999. Pasco came in at $300,000-$349,999.

The report also measured the lack of affordable rental housing for people at different income levels.

The need was greatest among the lowest earners — people working in retail, restaurants and other low wage jobs. In 2022 there were 515,146 households across the state making up to 30% of the area median income, but only 244,121 rentals that they could reasonably afford.

Finding an affordable rental has become a challenge even among traditionally middle-class earners like construction workers, mechanics or teachers.

The report counted more than 1.5 million households making up to 80% of the area median income, but just 1.46 million rentals that this group could afford. Ray explained the gap is even more severe when you factor in the higher-income renters who are competing for the same apartments.

Of those 1.46 million affordable rentals, more than 1 million were being rented out by people who made above the 80% area median income.

“Having more vacant units to choose from gives everyone in the market room to breathe,” Ray said.

But that’s only one part of the solution. The state will also need to find ways to keep existing housing affordable, Ray said, whether that’s by renovating blighted homes, providing subsidized housing or offering rent assistance and foreclosure prevention programs.

Last month, a federal jury in Missouri found that the National Association of Realtors and several large brokerages had conspired in a price-fixing scheme that inflated the commissions agents earned from each sale.

So what does this mean for the Florida housing market?

Here’s everything you need to know.

What was the lawsuit about?

The suit centered around the group’s rules for commission sharing.

In order to list a home on the Multiple Listing Service — an online database agents use to find available properties — the national agency requires seller’s agents to offer a non-negotiable commission, usually between 5%- 6%. That commission is taken from the proceeds of the sale and split between the buyer’s agent and the seller’s agent.

“The home sellers in this lawsuit said ‘you are forcing us to pay these artificially high fees because you have all the power,’” said Lei Wedge, a professor of finance at the University of South Florida’s Muma College of Business.

Though technically a seller could choose not to list on the MLS or offer a lower commission, Wedge said this would make it almost impossible for them to compete under the current system.

“All Realtors look on the MLS for the listings,” she said. “Most of the time, Realtors will only show homes that pay that 6% commission.”

What was the outcome?

The jury sided with the plaintiffs. The group of home sellers were awarded $1.8 billion in damages, though that number could spike to $5 billion depending on the judge’s decision.

The National Association of Realtors plans to appeal.

What does this mean for buyers and sellers?

The lawsuit could bring an end to commission sharing. Instead, the buyer’s agent would be paid by the buyer, and the seller’s agent would be paid by the seller.
Some argue that this would place an undue burden on lower-income buyers since they would be forced to pay that cost upfront in addition to their down payment.

Others say this could bring costs down by giving buyers and sellers more freedom to negotiate a fair commission instead of defaulting to 6%.

“People are going to look more closely at what real estate agents do and what their value is,” said CB Williams, broker and owner of People’s Choice Realty Services LLC in Tampa.

What does this mean for real estate agents and brokerages?

Agents’ commissions could fall by as much as 30%, according to analysts at the investment bank Keefe, Bruyette & Woods. This could lead to a mass exodus from the industry, driving down the number of agents by as much as 80%.

Several of the country’s biggest brokerages could face massive losses as a result of litigation.

Along with the Realtors association, Keller Williams and HomeServices of America will also be on the hook for damages in the $1.8 billion lawsuit out of Missouri.

ReMax and Anywhere real estate were named as defendants in that case as well, but those companies chose to settle for a combined $140 million.

Similar lawsuits have been filed in Missouri, Illinois, Texas and South Carolina, and more are likely on the horizon. No suits have been filed in Florida yet.

What happens next?

Now that one of the National Association of Realtors’ rules has been deemed anti-competitive, it could lead to further scrutiny of the organization’s business practices.

“The truth is, most people don’t want to be a part of (the association) but it’s forced on them,” Williams said.

He noted that agents have to pay dues if they want access to crucial tools such as the MLS and a so-called digital master key that’s used to unlock homes before each showing.

If the group loses its power as a gatekeeper, it could lead more people to forgo using a real estate agent, said Lei.

“Buyers and sellers can now connect more easily through the help of the internet,” she said. “It’s like what happened with the old industry of travel agents. Now everyone just goes to Expedia or Travelocity.”

Florida Realtors, the statewide association, did not respond to requests for comment.

©2023 Tampa Bay Times. Visit tampabay.com. Distributed by Tribune Content Agency, LLC.

The Mirada Lagoon is a human-made body of water that spans more than 15 acres, making it the largest in the United States. Located within the Mirada community in San Antonio, the lagoon features sandy shorelines, a swim-up bar, water slide, kids play area, kayak, paddleboard and cabana rentals and a floating obstacle course.

The lagoon first opened for residents at the end of May, but outside visitors can now purchase day passes on the MetroLagoons website.

Admission differs in price depending on the date and time, but day passes generally range between $20-$45 for adults and $15-$30 for children. Activities like kayaking and the obstacle course can be purchased as add-ons.

There is also a VIP area called “Cabana Cove” for guests 21 and up.

Vaike O’Grady is the vice president of marketing and communications for Metro Development Group. Her company has opened three lagoons around the Tampa Bay area as featured amenities for their master-planned communities.

The Epperson Lagoon in Wesley Chapel was the first of its kind in the country when it opened in 2018.

“After we saw what the success was, we realized we could do this again and again because there was so much demand for it,” O’Grady said.

Building the Mirada Lagoon came with additional challenges. The COVID-19 pandemic caused supply chain issues and labor shortages that led to delays.

The massive size of the project required special care. Metro had to haul in roughly 8,600 tons of sand. It took 45 days to fill the lagoon with about 33 million gallons of water.

Ultimately though, O’Grady said the meticulous preparations were worth it to be able to give residents and visitors a uniquely Florida experience. She believes the lagoons have helped boost home sales in their communities.

“Forty percent of our buyers are from out of state,” she said. “Maybe they’re exploring living by the beach but then they realize that it’s so much more expensive. When they come here and they see they can have an inland lagoon lifestyle from prices as low as the high $200s, they’re blown away by the value.”

Distributed by Tribune Content Agency LLC.