Key reports, issues, and decisions of interest to licensees and/or the public are reported here from the most recent Commission meeting:
Commission Meeting of April 24, 2024
Pending Cases: The Commission entered into consent agreements to suspend 17 licenses, accepted the permanent voluntary surrender of 9 licenses, ordered hearings in cases involving 18 licensees, left cases pending involving 3 licensees, reprimanded 2 licensees, closed cases with a warning against 3 licensees, and closed cases without action against 1 licensee.
License Applications Involving Character Issues: License applicants who have character issues such as prior criminal convictions or disciplinary actions by another licensing board are separately considered by the Commission. Decisions are made based upon criminal background checks, information supplied by the applicant, and in-person interviews.
Total candidates considered: 19; total approved: 7; total approved with conditions: 4; continued: 7; and postponed: 1.
License Examination Results: If you are interested in reviewing the most recent statistics and pass rates regarding the North Carolina broker license examination, click here License Examination Results
Project Summaries: The Executive Director reviewed the 2023-2024 Project Summaries noting projects that have been completed or extended since the March Commission meeting. The Executive Director reported that Mr. Lindsey asked that the members discuss at the May meeting any projects they would like to be considered in the upcoming fiscal year, including whether to undertake another SWOT analysis.
Conference Reimbursement: Upon a motion from Mr. Aceto, the Commission approved sending Commission members to the upcoming national Real Estate Educators Association (REEA) conference in Memphis, Tennessee June 25-29, 2024.
Monthly Financial Report, Quarterly Investment, and Education & Recovery Fund Report: The Commission received the monthly Financial Report, Quarterly Investment Report, and Education & Recovery Fund Report presented by the Chief Financial Officer for the period ending March 31, 2024
Audit Services: Upon a motion from the Finance Committee (Mr. Lindsey and Mr. Ramseur), the Commission accepted the audit services bid of Bernard Robinson and Company for three years beginning with the audit of the upcoming year’s financial statements.
Regulatory Report: The Director of Regulatory Affairs reviewed a report showing the status of all cases pending in the Regulatory Affairs Division as of March 31, 2024. At Mr. Lindsey’s request, the Director of Regulatory Affairs will provide a report to the Commission at the May meeting regarding complaints received during the month where staff declined to open a file. She noted that this typically occurs when the Commission does not have jurisdiction, or the complaint does not allege a violation of the law or rules.
NC Office Attorney General Request: Upon a motion from Ms. Mallette, the Commission voted to have staff prepare a request to the NC Office of the Attorney General for an opinion concerning the extent of the Commission’s jurisdiction over out-of-state companies engaged in brokerage services in North Carolina, particularly property management. Mr. Bullard and Mr. Lindsey were not present for the vote.
Spring Educators Conference: The Director of Education and Licensing reported that the Spring Educators Conference was held on Tuesday, March 19, 2024, at the McKimmon Center on North Carolina State University’s campus. Approximately 350 people registered, and despite a budget request for $25,000 to cover the cost of the Conference, it netted a profit of $321.25 as a result of various budget savings. The Director of Education and Licensing noted that over the last two years, the Spring Educators Conference has become the largest gathering of educators in the country. The Director of Education and Licensing asked that the Finance Committee still consider allotting a $25,000 budget for the Educators Conference for the next year.
April Town Hall: The Assistant Director of Education and Licensing reported that the Education Town Hall was held on April 9 and attended by seventy-five educator providers and instructors on Zoom. The Town Hall is an open forum with no agenda. Former Commission Member Cindy Chandler provided a synopsis of the NAR Settlement, an issue at the forefront of the discussion. The next Town Hall is scheduled for July 23, 2024, from 3:00 – 4:30 p.m.
License Exam Statistics: The Director of Education and Licensing reported that 80.71% of first-time test takers passed the exam in March, the first month with the new exam provider. The Director of Education and Licensing noted the exam provider transition went smoothly and that it is too early to draw conclusions from the data gathered so far.
Real Estate Manual: The Assistant Director of Education and Licensing reported that the next edition of the Real Estate Manual is scheduled for development in the fall of 2024. She indicated that staff would like to pursue greater functionality in the electronic version of the Manual. Upon a motion of Mr. Black, the Commission voted to issue an RFP to solicit bids for the next edition of the Real Estate Manual. Mr. Bullard and Mr. Lindsey were not present for the vote.
Report on License Numbers: As of April 1, 2024, there are 128,768 brokers and firms licensed by the Commission, as follows:
Active Full Brokers – 85,607
Active Provisional Brokers – 5,149
Brokers-in-Charge – 18,251
BIC Eligible Brokers – 6,361
Inactive Full Brokers – 25,248
Inactive Provisional Brokers – 7,893
Firms – 17,645
Limited Nonresident Commercial Brokers – 268
Next Commission Meeting: The next Commission meeting will be held at 9:00am, May 22, 2024, in the Commission’s office in Raleigh and is open to the public. It can be viewed via Zoom online video.
Spring Educators Conference was a great success!
This year the North Carolina Real Estate Commission hosted its 2024 Spring Educators Conference at the McKimmon Center on March 19,, 2024. The theme of the conference was NCREC Education Superhero Comicon. The attendees learned how to use AI in real estate education, information regarding the exam transition, and handling disruptions in the classroom. For a sample of how to use AI to create a PowerPoint view this video. Congratulations to our 2024 Larry A. Outlaw Excellence in Education Award winner, Bill Gallagher!
Exam Provider Transition Complete
The transition from PSI to PearsonVUE has been implemented successfully. Along with the change in exam providers, there are updates to several resources, and the following new videos are available:
1 – Updated RELINC: https://www.ncrec.gov/Pdfs/Licensing/General.pdf
2 – Updated Syllabus: https://www.ncrec.gov/Forms/Education/Prelicense_Course_Syllabus.pdf
3 – Four new videos on our YouTube Channel about the licensing and examination process: https://www.youtube.com/NCREC/videos
You are invited!
The monthly Real Estate Commission meetings are always open to the public, and you are invited to attend in person or online via Zoom. The meeting this month is on April 24th at the Commission building, 1313 Navaho Drive, Raleigh, NC 27609. A Zoom link will be available at ncrec.gov on the day of the meeting.
NAR Settlement
On March 15, 2024, the National Association of Realtors® (NAR) proposed a settlement to end landmark antitrust lawsuits. In the proposal, NAR agreed to pay damages and to mandate that its members enter into written buyer-broker agreements. Additionally, the settlement would prohibit REALTORS® from making compensation offers on multiple listing services (MLS). The settlement has not been approved by the court; a decision from the court is expected later this year. Even so, the NAR rules are planned to be effective in mid-July.
As a reminder, the North Carolina Real Estate Commission (NCREC) is an independent state governmental agency and should not be confused with NAR or its local boards. The NCREC’s primary function is to license and regulate real estate brokers and its mission is to protect consumers. North Carolina has 100,000 plus real estate brokers with many, but not all, also being members of NAR. NAR is a voluntary trade organization whose members are known as REALTORS®. In North Carolina, NC REALTORS® is a state level REALTOR® association and, as part of its services, creates various standard form documents for use by its members and their clients in transactions. In cooperation with the NC Bar Association, NC REALTORS® also creates standard form Offers to Purchase and Contract and other transaction documents.
The NCREC is following developments with the settlement proposal as they occur. However, it is important to recognize that any changes in NAR rules apply specifically to NAR members and do not alter the Real Estate License Law and Commission rules. Moreover, the currently proposed NAR changes are in no way contradictory to the existing License Law and rules.
The following is a reminder of NCREC rules relating to broker transparency, agency agreements, and commissions.
Working With Real Estate Agents Disclosure:
Commission Rule 58A. 0104(c) states: In every real estate sales transaction, a broker shall, at first substantial contact with a prospective buyer or seller, provide the buyer or seller with a copy of the publication “Working With Real Estate Agents” …(WWREA).
In 2021, the NCREC revised the WWREA Disclosure to be one page, double-sided, with one side for sellers and one side for buyers. The new WWREA Disclosure was designed to be quicker and simpler for brokers to use and easier for buyers and sellers to understand. Additionally, the original brochure was updated and expanded to be available for use in conjunction with the required WWREA Disclosure. The WWREA Disclosure and brochure explain the various types of agency relationships in a clear concise manner, educating the consumer and defining expectations. The WWREA Disclosure is a broker’s opportunity to discuss and clarify what their agency role may be in the transaction and to start the conversation concerning the contemplated agency status, payment, and future options.
Buyer Agency Agreements:
Commission Rule 58A .0104(a) has long required brokers to enter into written agency agreements. Listing agreements must be in writing and signed by the broker and client at the time their agency relationship is formed. Buyer agency agreements must be in writing and signed by the broker and client no later than the time of making an offer. Note that the rule does not prohibit a broker from entering into a written buyer agency agreement earlier than the time of offer submission. Accordingly, the proposed rule change for REALTORS® does not conflict with the Commission’s rule.
Additionally, NCGS § 93A-13 prohibits a broker from filing suit for recovery of brokerage compensation unless the agreement is in writing. Therefore, brokers need to be in compliance with NCREC rules in order to avoid disciplinary action and in order to recover a commission through the civil court if the client fails to pay.
The Commission does not have jurisdiction regarding the setting or advertising of commissions. Commission Rule 58A .0109(f) specifically notes that the NCREC will not act as a board of arbitration and shall not compel parties to settle disputes concerning such matters as the rate of commissions, the division of commissions, pay of brokers, and similar matters. The NCREC reminds all of its licensees that brokerage commissions remain a negotiable term between the broker/firm and client.
Finally, it is important to remember that Commission Rule 58A .0112(b)(1) bars a broker from using a preprinted offer or sales contract form containing any provision concerning the payment of a commission or compensation to a broker or firm. While a client may consider the amount of commission when considering making or accepting an offer, the broker/firm should not be made a third party in a form purchase contract between the buyer and seller. The current standard form residential contract includes a provision allowing the seller to pay an agreed amount toward any of buyer’s expenses.
The NCREC understands that the real estate industry is always evolving, and our role is to ensure whenever possible that these changes benefit consumers and to assist NC brokers in understanding their duties. The NCREC remains dedicated to fostering a market that prioritizes consumer interests, fair competition, and transparency. We also remain available to answer questions about the application of the License Law and Commission rules to help brokers and consumers better navigate their transactions.