Tick, tick, tick

In an op-ed column in the N&O today, Ellis Hankins, who leads the North Carolina League of Municipalities, takes on the Sprawl Lobby and the Realtor Ticks with a clear and convincing argument.

RALEIGH - Don't underestimate the influence of the Realtors in the legislative debate about transfer taxes. They gave $600,000 to lawmakers last year. They've targeted advertising in home districts of legislators. "It's scaring the heck out of a lot of them," said state Sen. Eleanor Kinnaird. "The reality is the Realtors scuttled the [budget] agreement," said Rep. Paul Luebke.

The Realtors are doing all of this to keep North Carolinians from having the right to vote on a local transfer tax that has been used in some counties to lower or hold down property taxes and improve infrastructure.

Which raises this question: Did YOU vote to put Tim Kent and the Realtors in charge of North Carolina public policy? I know I didn't. In fact, I don't recall them even being on the ballot.

Local governments and the state will not be able to cope with such rapid growth with existing sources of revenues. Already 114 communities are under restrictions on growth because of inadequate wastewater treatment capacity. Many schools are overcrowded, dilapidated or both. A recent study shows North Carolina's urban and rural roads are overly congested or below standard. This year we'll lose 100,000 acres of farms, forests and natural areas to development -- nearly 50,000 since the General Assembly convened.

At the state level we need to let people vote on bond proposals for schools, clean water, transportation, land and water conservation and affordable housing for seniors and others. The General Assembly also should let the people vote on alternate ways to get these public facilities built, including a local land transfer tax.

Who would you trust for advice about keeping the cities and counties of North Carolina on a steady keel? The self-serving real estate lobby, or the North Carolina League of Municipalities?

It's time to sharpen the tweezers and get Tim Kent's Realtor Ticks out of public policy.

If you haven't contact your representative in Raleigh, do it now. I know it sounds pathetic, but we're at risk of having the General Assembly bought for a mere $600,000 in Realtor commissions. Make your calls and send your emails. One more time.

Pretty please?

A

PS Someone asked me what I have against Realtors. The answer is "nothing." Some of the nicest people I know are Realtors. Which is why I hate to see the NC Realtors Association destroying their reputation and relevance in our state. NCAR's opposition to allowing We the People to vote on our taxes was wrong-headed from the get-go. It was a strategic blunder that has given the NCAR a huge and ugly black eye. It's time for them to apologize, back out, and let us get on with our democracy.




Comments

The League of Municipalities

You can find out more about them here. They ain't perfect by any stretch, but they do a good job representing and supporting the interests of local governments.

This issue isn't going to go away in Moore County

Friday's paper had it from this angle:

Moore County's 2006-07 budget contained more than $4.2 million for its share of Medicaid costs. The budget message noted that this total represents 5.2 cents of the property tax rate.

The legislature placed a freeze on Medicaid payments last year, and this freeze is built into the new budget. Nevertheless, budget makers in Moore and other counties are keeping a keen eye on legislative action in the expectation that some form of Medicaid relief would be forthcoming for 2007-08.
(...)

TRANSFER TAX -- The Senate bill does not address the issue of county options for making up losses incurred by transfer of the half-cent sales tax to the state. Moore is among the counties asking the legislature to provide a land transfer tax as an option, if approved at the polls by the electorate.

WakeUP Wake County, a nonprofit promoting a land transfer tax as a local option, has picked up efforts to persuade the legislature to approve this option. WakeUP has been promoting the transfer tax as an option to be available in all 100 counties.

Nope - Not Me

Did YOU vote to put Tim Kent and the Realtors in charge of North Carolina public policy? I know I didn't. In fact, I don't recall them even being on the ballot.

Yepper - this is me. VVVV

Someone asked me what I have against Realtors. The answer is "nothing." Some of the nicest people I know are Realtors. Which is why I hate to see the NC Realtors Association destroying their reputation and relevance in our state. NCAR's opposition to allowing We the People to vote on our taxes was wrong-headed from the get-go. It was a strategic blunder that has given the NCAR a huge and ugly black eye. It's time for them to apologize, back out, and let us get on with our democracy.

For the Record: I am Voting 'NO' to any more bonds unless and only for Parks & Recreation. No more money (bonds) for schools from me. That's borrowed money. Get it the right way - like the rest of us have to do. That means - live within your budget!

Local governments and the state will not be able to cope with such rapid growth with existing sources of revenues. Already 114 communities are under restrictions on growth because of inadequate wastewater treatment capacity. Many schools are overcrowded, dilapidated or both. A recent study shows North Carolina's urban and rural roads are overly congested or below standard. This year we'll lose 100,000 acres of farms, forests and natural areas to development -- nearly 50,000 since the General Assembly convened.

No to 1% but yes to 6%

The same people who claim that 6% commission on real estate sales is not too much, that a reduction from the 6% will not make much difference to home buyers and sellers, are talking about the horrors of the 1% (or less) transfer tax.

It would seem that the apparent standardization of the six percent commission would be an anti-trust violation. Does anyone know if there is any exemption for the real estate industry for their standard commission?

It's been talked about a lot on earlier posts

(sorry, I'm too burned out to find them) but apparently the commissions are defensible. Doesn't seem right, but it is what it is. The "Realtors" have a lock on the MLS and can force agents to go along with their policies or lose access.

There have also been discussions about how agents have to give portions of their commissions to their offices, or split with buyers' agents, etc., etc., etc.

I've gladly paid commissions in the past, but never again. My next sale will by "by owner" all the way.

Again

this 6% is incorporated into the price of the house and so would the 1% or less transfer. The buyer and the seller negotiate this price. No biggie there. Me and you who only buy one house every 6+ years, or maybe once in our lives, this transfer tax is nothing.

No, the folks that are hurt by this is the folks who buy and sell properties for profit. When your talking about 1% of a 6 or 10 $300,000 home transactions your talking $18,000 to $30,000+/year from someone.

That would come out of the realtors pocket or the guy who is flipping these houses as a profession. And then it would be taken from this guy twice per house, once when he buys it and once when he sells it. THATS who is fighting these transfer taxes.

Screw them guys. They are willing to screw our schools roads, water, firemen out of things we need for their pocket. Next thing we will see is these guys also are feeding these lobbyists. Follow the money and you will find the jerk who is trying to screw us.

Precisely.

Follow the money and you will find the jerk who is trying to screw us.

Can't say it any plainer than that.

This is not just about houses

The transfer tax would also apply to commercial properties, which is where the revenue bonanza could come from - and already is for the realtors.

Attacking the 6%

I assume that the "standard" commission is legal through some anti-trust exemption. If not, I would like to see the standardization of the commission attacked, and true competition in place. That is, there could be no discussion among members of the MLS, Realtors, other others about an "appropriate" or standard commission.

If there is an exemption, I would like to see it removed and real estate agencies compete on commission.

They should be like other businesses-no discussion or collusion on charges.

If they want to fight the 1%, we should fight the 6%.

Lead on.

It's a fight worth fighting, even if we lose.

From what I understand

the 6% is an industry standard that you as a seller agree to. The listing agent will automatically get 3% of the price of the sold house for listing your house and it getting sold. You also agree as a seller to give the real estate agent who actually sells your house another 3%. That equates to the 6%. It is a bussness transaction you agree upon when you sell the house. The real estate agents dream of listing and selling your house as then they get the entire 6% for their pockets.

The buyer could careless about this 6%. He will fight for a price he wants to pay. If he does not get it, he will walk away. If he gets the price he wants, then he will live with the knowledge that part of the price of the house is paying this 6%.

Because the seller went to a real estate agent, the buyer cannot go behind all this and talk directly with the seller. The seller has entered into a binding agreement with the real estate agent and cannot sell directly to anyone. Usually the seller has to wait 6 months after he drops out of the contract. Not sure if there is a monitary penilty for droping out of this agreement.

To many folks do not know the rules for getting a house transfered from one person to another and are willing to pay this 6% to eliminate this hassle.

I honestly do not have a problem with this 6% thing. All that get into buying and selling a house realise this. And as soon as a seller lists his house with a real estate agent, then he also knows that he will lose 6% of the price. Thus he will add that 6% to the total price.

They Count on the PITA Factor -

What is the PITA factor? I think you know ... Pain in the ...

To many folks do not know the rules for getting a house transfered from one person to another and are willing to pay this 6% to eliminate this hassle.

What I know is that when my house was for sale - the Realtor - (broker, agent, et.al.) were going to make more profit from the sale of my house that I was. You know what I said to that, don't you?

Add the necessity of an attorney (which is the law in NC but not elsewhere ....)

Yeah. Right.

Not in this lifetime. I need some handouts to paste the neighborhood with - anyone have some?

When we were buying in SC

We had a problem with the sellers not doing a good paint job (got a brother to do it and it i was awful). Our attorney, after much hemming and hawwing between buyer and seller let it slip that where she came from, NYC, this would have been handled by taking the money out of the realtors 6%.
About ten minutes later, when our realtor returned, I stood firm and said I was walking unless that money came from somewhere. He "offered" to have it come out of his commission, that was that.
So, the 6% is not locked, you can negotiate it.

John Edwards is great!
- Sam Spencer, BlueNC, 7/3/07

Jesus Swept ticked me off. Too short. I loved the characters and then POOF it was over.
-me

OOOOO YEA

So, the 6% is not locked, you can negotiate it.

This is highly negotiable. It is not etched in stone. But in this example, yea, the real estate agent still got his 6%, he just had to spend some of it for a paint job. Most real estate agents will have a handy man employed or at the ready for just such requirements. This handyman knows he is going to be called in at the last minute to do crazy fixes, but he also knows that he will get steady work at a fair price if the agent is good. I had similar fixes that needed correcting on my last house and I did not want to spend the time to fix em. The real estate agent called in her handyman and got the problems fixed. I payed for these fixes out of my part of the sale of the house. These were problems I caused, so I figured I should pay for them. No biggie. I recieved from my share of the house $65,000, figured $800 in expences was not going to stop that deal!

The real estate folks do know there is some play. The seller goes into these agreements with an agent (who might be a realator) and agrees to this 6%. At the time the seller is negotiating, you can ask for a reduction of this 6%. The agent may or may not agree to it. If this % is to low, no agent is going to spend their time showing that property. There lies the problem.

No seller has to use an agent to sell their house. There are other requirements that might be included, like it seems a lawyer is required in NC? The seller has to figure all that out because he has become the agent. The buyer will also want a lawyer because if the seller screws up, and you dont know it, you might lose your house because it does not belong to you yet. These lawyer fees are in addition to this 6%.

The bottom line with any house is both the buyer and the seller set the price. The real estate agent wants that price to be as high as possible because that directly impacts their paycheck with this 6%.

The buyer is the key to all these house transactions because at any time, he can walk.

When I was buying my first home with my brother, we had a closing date and everything seemed on track. 4 days before closing, the real estate agent told us that my brother needed to pay-off his car (lending agent wanted this). I was furious. I looked at the contract we signed, found a loophole in it. And threatened to invoke it.

I told my agent that we complied with all the wickets asked of us and for the lending agent at this late date to make this requirement was not want we could afford. We specifically asked about the car and said we would continue making payments on this car in addition to everything else. That was fine. Then this bomb hit.

I informed them that we would just as easly continue living in our trailer and I stood up. My brother had no clue what I was doing, but he stood up. Agent went pasty face white. Next day, we did not need to pay off our car. 3 days later we bought our house. Payments where what we wanted not want the lending agency wanted.

Buyers can walk and everyone in this picture know this.

When it comes to commercial properties, no clue. But these transactions should be included in a transfer tax because these businesses will increase the demand on a county infrastructure in some way. Either with heavier trucks, higher demand for water and sewer, more polutants, higher value target for theifs requiring increased police patrols, increased chemicals stored on site causing a higher fire potential and special firefighting concerns, something will create a higher demand on the infrastructure of the county or city. Heck, if we are lucky, more jobs meaning more people move to the county meaning more critters need schoolin meaning more schools, buses and teachers. These businesses normally (?) get a tax break of some kind to set up shop. Least they could do is help pay for the infrastructure improvements of the county they are setting up shop in.

In our case...

we got a $1500 check made out to us, which we used for painting.

But, that was because we found out how bad the painting was hours before closing.

John Edwards is great!
- Sam Spencer, BlueNC, 7/3/07

Jesus Swept ticked me off. Too short. I loved the characters and then POOF it was over.
-me

True -

So, the 6% is not locked, you can negotiate it.

But it was to my benefit to say FOAD.

A lobbyist for the NC Home Builders Assoc.

said,

"Why should somebody who is selling a home pay a surcharge for something that benefits everybody?"

Ok, that's just a stupid question that means absolutely nothing. Because rapid growth does not benefit everyone. Some folks get filthy rich off of it, and some folks just get their property taxes jacked up by it.

Why does the NC Home Builders Assoc. hate not support NC communities?

"They took all the trees and put them in a tree museum Then they charged the people a dollar 'n a half just to see 'em. Don't it always seem to go that you don't know what you've got till it's gone? They paved paradise and put up a parking lot."

Rep. Basnight is a clear thinker

and usually when he says something it makes since.

I am glad I have Mr. Basnight representing my!

Along with Pasquotank, only Dare, Currituck, Chowan, Camden and Perquimans counties levy the tax. The counties gained the right to put the tax before voters through a bill offered in the 1980s by state Sen. Marc Basnight, a Dare County Democrat, which limited the transfer tax option to counties in his district.

Realtors, home builders and other opponents say the proposed 0.4 percent local transfer tax would place an unfair burden on the homeowners who would have to pay it and could depress the housing market. They say counties have other, more broad-based options to raise revenues for schools and other infrastructure needs.

My county is growing. We have been growing and this tax is not going to stop it. We just approved an 800 housing unit complex directly under the flight path of jets from Cherry Point to the potential OLF site in my county. This complex is about 8 miles away from the OLF site. With a transfer tax as well as this OLF the developer is still going forward. We just approved this so not sure if any houses have sold yet. I dont see it stoping thou. This gives us three huge development projects going in my county. Two of them are high dollar, and this last one is medium income(?). I consider houses over $1million high dollar.

The south side of my county is ripe for housing growth. We have two huge tracts selling high dollar houses. These houses continue to go up. Even with this transfer tax.

My county is booming. We have grown. We will continue to grow even with this transfer tax. We have grown from around 10,000 people to over 12,000 since 2000 (I think that was the cencus for 2000). Not bad growth. In fact almost scary growth. 20% growth in 7 years? egads. Yes we need help with infrastructure.

This transfer tax is working for us. It is not keeping folks away. We are not drying up and dying. Think the realators should come visit us in NE NC and see just how stagnated we are.

Or better yet, call the various building inspectors for these counties and ask them how many houses have been built in the last years. This information is available to the public and for my county, is a blanket FOIA item.

"It's a fundamental fairness issue," said Paul Wilms, a lobbyist for the N.C. Home Builders Association. "Why should somebody who is selling a home pay a surcharge for something that benefits everybody?"

This statement sickens me with its idiotic simplisity. While yes, arguably, the seller is paying for this because his lawyer writes a bunch of checks from this pot of money.

However, if it was not for the BUYER making this pot of money available, NOONE would get a check. This is a chicken or the egg philosophy. But in this case, without the buyer, there is no money. It is a requirement upon the seller to include this transfer tax in his asking price as this is the only way the buyers money is going to come into the county in the first place.

If this transfer tax was levied after the sell of the property and the price of this tax could not be included in the monthly payments of the house, then yes, you might slow or hault growth in a county. But this is not so.

From my house sell in Perquimans County. There was a transfer tax line item that stated transfer tax of $1,100. It came from the sellers side of the ledger.

However, before any money was spent by the seller, I had to give $112,000 to the seller. Part of that 112,000 that I gave to the seller paid for the transfer tax.

When I bought this house, I saw that $1100 but because it was on the sellers side, I did not CARE about it. From the sellers point of view, because she owned the house outright. she received a check for $101,000 and both us walked away with smiles on our faces. I did know that this transfer tax and really everything that showed up on the sellers side I was paying for, but I wanted the house, and the price was right. So I paid what she was asking to include this transfer tax.

Houses sell themselfs. You know this is the house for you and you will do what is required to get into that house. If its not the house for you, anything will make you walk from it. This can be said about commercial properties. You know if it is doable before you sign the paper.

If the realators arguement was correct, I should not have bought the house I intend to die in to save $1100. The buyer would not have received a check for $101,000 because I did not wish to pay this $1100 and two real estate companies would not have received each $3,300 because this $1100 scared me away.

Just aint gonna happen. With the amount of money in this overall transaction, $1100 was the least of my concerns and was not a factor at all in this transaction. Realators, come up with a better scare, this one wont scare a two-year old on holloween night.

I have a 30 year mortgage, that means this transfer tax INCREASED my house payments by ....................................... are you ready for this?..........................say it aint sooooooooo.......................$3.06 each month. Yea, this transfer tax was a deal breaker.

I guess realator lobbyists dont belive

that people will do the math and see their lies. $3.06 is not a deal breaker.

I hate lobbyists especially when they lie and try to scare people.

HUMMMM. lets see. 30 year loan. $100,000 would = about $3
$200,000 would be about an increase of about $6
$300,000 would be about an increase of about $9

Anyone see a trend here?

If you can afford a $300,000 home and are paying 30 years, I think you have not put yourself into a house payment where $9 will break you a month. The lending agency wont approve you for that loan in the first place.

Math is such a wonderful tool.

However, what will $3000 on the sale of a $300,000 home do for a county for infrastructure improvements? If nothing else, its not $3000 that I have to come up with in increased taxes due to infrastructure improvement requirments.

Math - It's a Beautiful Thing

I'm glad to see my math skills aren't as rusty as I thought they would be.... that's about the figure I came up with. uh huh.

I have a 30 year mortgage, that means this transfer tax INCREASED my house payments by ....................................... are you ready for this?..........................say it aint sooooooooo.......................$3.06 each month. Yea, this transfer tax was a deal breaker.

My county is booming. We have grown. We will continue to grow even with this transfer tax. We have grown from around 10,000 people to over 12,000 since 2000 (I think that was the cencus for 2000). Not bad growth. In fact almost scary growth. 20% growth in 7 years? egads. Yes we need help with infrastructure.

My county has doubled since I moved here in 1998. (....I need a road ....)

We just approved an 800 housing unit complex directly under the flight path of jets from Cherry Point to the potential OLF site in my county. This complex is about 8 miles away from the OLF site.

Shades of glory! Are you kidding me? Fentress all over again or what? Sheesh....