Legal Roundup: Amazon Entering Real Estate, Amendment to Closing Disclosure Rule, and More!
July 14, 2017 |
This week’s “Legal Roundup” involves industry updates involving Amazon’s decision to potentially enter the real estate market, the Consumer Financial Protection Bureau amending its “Know Before You Owe” mortgage disclosure rule, and Ohio’s Budget Bill eliminating property tax appeal rights. Check out the full details of each story below and stay in-the-know on what’s on in the real estate industry!
Amazon.com May Enter Real Estate
How many of you participated in Amazon’s Prime Day? Reports indicate that Amazon’s third Prime Day, which occurred on July 11, 2017, brought in a record 60 percent increase in sales. Amazon said that sales occurred across 13 countries and its highest seller was the Echo Dot. Yet, during the prime day frenzy, a lessor known story about Amazon started making headlines. Inman news reported that Amazon may be adding real estate professionals to its professional service marketplace. The article references the existence of a placeholder webpage referencing the hiring of a realtor and anonymous sources.
If true, Amazon would be the latest tech company to enter into the real estate industry in some fashion. Earlier this month, an article appeared in Realtor Magazine that Google had recently purchased residential apartment modular units in an effort to control housing costs for its employees. Last year Uber co-founder announced a residential real estate venture called Haus. Zillow also unveiled a program called “instant offers” whereby it provides sellers with an “instant offer” from one or more of its affiliated investors.
Inman’s reporting indicates that Amazon plans to compile a list of licensed real estate agents, that agree to pay Amazon a referral fee for prospective buyers or sellers. Amazon has steadily been moving into the area of home services. Through their “Home and Business Services” product, they offer installation, technology and repair services, home improvement and even assembly. In those instances Amazon refers professionals for residential services. Referring a real estate professional to buyers and sellers is the next logical step to becoming the singular source for home service needs.
Logistically, Amazon may face hurdles navigating complex license laws that vary from state to state. Questions remain whether Amazon.com will need to become a license brokerage to receive a referral fee and whether it will face other regulatory requirements. As fascinating as the success of Prime Day is, it will be equally fascinating to see whether Amazon will indeed pursue dipping its toe into the real estate profession.
CFPB Amends Closing Disclosure Rule
As most real estate professionals know, on October 3, 2015, the CFPB or Consumer Financial Protection Bureau, implemented its “Know Before You Owe” program. Among the many changes was the sun setting of the HUD-1 Settlement in favor of the new Closing Disclosure. At the time the CFPB indicated that the initiative was designed to empower consumers with the information they need to make informed mortgage choices. One area of concern for real estate professionals, is the confidentiality of the closing disclosure. Such made it difficult for professionals to scrutinize the closing disclosure in advance of closing, because a lender was prohibited from sharing the closing disclosure with third parties.
This week the CFPB issued an amended rule, which would allow lenders to share the closing disclosure with third parties .. i.e. real estate professionals. The move is undoubtedly good for both the real estate industry and its consumers. Real estate professionals will have the ability to scrutinize financials of a transaction in advance of closing, which avoids time, expense and delay from inaccurate numbers. Consumers benefit because they will receive the full and informed advice from their agents on their real estate transaction.
The CFPB press release is available here.
Ohio’s Budget Bill Eliminates Property Tax Appeal Rights
Ohio’s budget bill signed by Governor Kasich on June 30, 2017, eliminated taxpayer’s right to appeal an adverse decision from a Board of Tax Appeals directly to the Ohio Supreme Court.
Taxpayers that challenge a County Auditor’s tax value of their real estate can appeal to the Board of Tax Appeals. This happens when the Auditor’s assigned tax value (the amount upon which property taxes are assessed) exceeds what the owner thinks is the fair market value of the property. For example, if a buyer purchases a property for a good price, it is possible the Auditor’s value exceeds what the buyer paid. If the buyer wants the Auditor’s value reduced, the buyer has to file a complaint.
Formerly a taxpayer receiving an adverse decision could appeal that decision directly to the Ohio Supreme Court. Now taxpayers will have to appeal in one of Ohio’s 12 Appellate Courts. The Ohio Supreme Court now has the discretion to take an appeal, depending on whether there is a substantial constitutional question or a question of great general or public interest.
Professionals that understand and are able to update clients on information about property taxes, provide an added value to their clients. Hondros offers a 3 hour course on property tax and mortgage valuation, that may be a good start to fully understanding this part of the real estate transaction. More information can be found at our Hondros Online website.