The excitement around drones is increasing and for good reason: the technology is steadily getting to the point where commercial applications are increasingly possible, including for use in marketing real estate. Being able to hoist a camera on a drone, or unmanned aerial vehicle, has the potential to be a cost-effective way to get dramatic shots of property you have listed for sale, particularly for large, high-end homes or big expanses of land.
But while the technology is falling into place, a lot still needs to be done on the regulatory side, because drones present very real and very difficult issues, including safety and privacy issues. The safety issues are clear: people operating drones have to be trained and systems have to be built to help protect people nearby should something go wrong. On privacy, a regulatory system has to be in place to help reduce the chance of drones being used to take unauthorized photos and video.
Along with these two concerns is the bigger national security concern, since a weaponized drone is a danger of national importance.
The Federal Aviation Administration is in the process of developing rules that would address these three concerns. It’s working against a timeline by Congress to have something ready by next year, although with a matter like drones, it’s important for the FAA to get it right and not just get it in a hurry.
As it is, drone use by hobbyists is already allowed, although there are strict limits to what constitutes hobbyist use. How high a drone goes up is one of the criteria for determining whether a use is hobbyist or not. For non-hobbyist use, the FAA authorizes drones for research, public safety, and, to a more limited extent, commercial use, but all of these uses are approved on a case-by-case basis. The rules that FAA is developing are intended to give commercial and other drone uses more clear-cut guidelines for what’s okay, a different approach than today’s restricted case-by-case approval system.
To fill you in a bit more on what’s happening with drones and where they might fit in with real estate once the FAA comes out with its rules, REALTOR® Magazine sat down for a video interview with NAR Government Affairs to learn about the rules and the timeline. The video is four minutes long.
The bottom line is, the regulatory environment hasn’t yet caught up with advances in drone technology, so as of right now, drone use outside of hobbyist use is limited. But it makes sense to start familiarizing yourself with the potential for drones in your business so when wider commercial use gets the green light, you’ll know whether drones has a place in your business model.
By Melanie Wyne, NAR Government Affairs
The U.S. Court of Appeals for the District of Columbia yesterday ruled that key elements of the Federal Communications Commissions’ 2010 Open Internet Order are invalid. The order, which sets forth what are known as network neutrality rules, prohibited Internet Service Providers (ISPs) like Verizon, Comcast, and AT&T from discriminating in the network services they deliver to content providers.
By tossing out the rules, ISPs are free to charge content companies higher fees to deliver Internet traffic faster or in an otherwise more efficient way. This has potential implications for the real estate industry, since real estate companies and other industry providers act as content providers through the websites.
It remains to be seen what the response to this decision will be. The FCC may appeal the decision to the U.S. Supreme Court. If it does, this additional litigation could delay the effects of the ruling. It is also possible that the FCC could reclassify broadband service as a common carrier, thereby bringing ISPs deeper within their regulatory authority.
The business of real estate is increasingly conducted online. Streaming video, virtual tours, and voice-over-internet-protocols are just some of the technologies that are commonly used by REALTORS®. What’s more, new technologies will be adopted which are likely to require unencumbered network access. For this reason, NAR supports network neutrality and thus is looking carefully into the decision to toss out the rules. We will work with the FCC and Congress to ensure the Internet remains free and open.
As a real estate practitioner, does it matter whether you put your money into a bank or a credit union or whether you take out a loan with one but not the other? In the third of our monthly video series called Your Money Matters, Victoria Gillespie of REALTORS® Federal Credit Union, a division of Northwest Federal Credit Union, says it does matter, because credit unions are cooperatives owned by their account-holders, so profits get channeled back to account holders in the form of better terms, higher yields, and lower fees. Gillespie is REALTORS® FCU’s director of Business Development.
To be sure, the only way to know what’s best for you is to shop around. You want to see what’s available in terms of yield on your savings or other accounts, the attractiveness of the loan terms, and so forth. Gillespie thinks credit unions in general and REALTORS® FCU in particular will compare favorably in any shopping test. She points to a savings account yield at her credit union that was five times higher than at national banks when she shopped rates and terms at the end of last year.
But REALTORS® FCU has a few other advantages, she thinks, and that includes easy accessibility of your funds. Through partnerships with other financial institutions, the company offers 33,000 fee-free ATMs and a shared-branch network with more than 5,000 offices. It also tries to be user-friendly by maintaining a 24-7 customer support line, something it makes a point to do because of the unpredictable hours real estate agents work.
Again, you can only know what’s best for you by shopping around. As a start, spend a few minutes with the third in our Your Money Matters financial planning series and hear what Gillespie has to say about REALTORS® FCU. Next month we’ll be looking ideas for approaching your 2014 financial planning.
LAS VEGAS — It was all about the “Internet of Things” at the 2014 International Consumer Electronic Show, which wrapped up last week in Las Vegas. More than 3,000 exhibitors showed off the latest gadgets and offered a peek into technology’s future – everything from curved-screen technology to driverless cars, smarter light bulbs, and wearable tech.
One theme that quickly emerged from this year: Your smartphone is going to increasingly become your remote-control to managing your life and your home.
Smartphones are getting smarter, allowing you to take control over everything from your home’s lighting, cars, and even allowing you to send text messages to your refrigerator to see what groceries you need.
This year’s show offered plenty of applications for your real estate business. Here’s a rundown from CES, and some of our picks for emerging technology trends.
Favorite technology debut: Curved-screens Continue reading »
NAR has been working with federal regulators since Congress in 2010 passed massive banking reform legislation, part of which created the qualified mortgage and qualified residential mortgage rules. Today is an important day in the timeline of those rules, because today is the day the qualified mortgage (QM) rule takes effect, and NAR has told regulators it will be watching to see what impact the rules have on mortgage availability.
“I promise you that REALTORS® will be your boots on the ground,” NAR President-elect Chris Polychron told the federal government’s main QM rule-writer, Richard Cordray, earlier this week. Cordray is the director of the U.S. Consumer Financial Protection Bureau (CPB), which was created as part of the same law that created QM and the qualified residential mortgage (QRM) rules.
Under QM, lenders are required to make sure borrowers have a reasonable ability to repay before they can make what’s known as a qualified mortgage. A qualified mortgage represents what CFPB views as a safe mortgage, and thus a mortgage that is expected to cost borrowers less, because the risk is less to lenders. How CFPB defines the “ability to repay” includes a maximum debt-to-income ratio of 43 percent. Also, while Fannie Mae and Freddie Mac are in conservatorship, their conforming loans are considered qualified. Also, loans by small community banks that meet certain criteria are considered qualified, as are FHA, VA and Rural Housing Service (RHS) loans.
In short, the universe of qualified mortgages isn’t particularly large right now, because Fannie, Freddie, FHA, and other federally backed loans make up the vast majority of loans originated today. But the qualified standard is nevertheless important because it defines what a safe mortgage is and what it will be in the future.
As of today, the QM rule is in effect. Will we see much change in mortgage underwriting practices as a result? It’s too soon to say, but lenders have been aware of the rules’ standard for some time now and have been operating with them in mind since CFPB proposed them a year ago. For that reason, lenders to an extent have already built the standards into their operations, so how much practices will change starting today is hard to know.
For the most part, NAR is okay with the QM rule. It fought hard to keep a minimum down payment requirement out of the rule, and on that score, the association won, as did the dozens of other consumer and industry groups that fought alongside it in a coalition. But NAR still has concerns over a part of the rule that limits points and fees to 3 percent for loans provided by lenders with affiliated businesses, such as title businesses. NAR continues to talk with CFPB on whether such a limit makes sense from both a fairness and a business standpoint. For its part, CFPB has said it will be monitoring the impact of that limitation along with others parts of the rule.
So, QM is now in effect. It’s time to see what the impact will be. In the 3-minute video above, CFPB Director Cordray asks NAR to help it monitor the impact of the rule and NAR President-elect Chris Polychron assured Cordray the association will. Also in the video, Cordray outlines the criteria for a qualified mortgage as set forth in the rule.
You don’t think of the changing status of marijuana in many states as having a real estate impact but it does. In the states where medical marijuana is decriminalized (and in Washington and Colorado, where it’s decriminalized even for non-medical use), landlords and their rental agents have a disclosure issue on their hands. The landlord has to decide whether or not the rental property accommodates marijuana use, and if so, the rental agent has to be sure to adequately disclose the policy to prospective tenants. That’s just one of the issues stemming from the changing legality of this controlled substance.
The marijuana issue is one of several trending legal issues you’ll be hearing about more in the months ahead. Fracking, which involves extracting gas from shale rock, raises contractual issues: do the rights to the gas leases convey with the property in a sale? The answer is, it depends on what you negotiate. So, agents need to be up on the contractual issues that fracking raise and also has to be able to manage buyers’ and sellers’ expectations about who gets the rights to the gas leases.
NAR Legal Affairs identifies five trending residential real estate legal issues for 2014 and discuss them in this 9-minute video. The five issues are medical marijuana, fracking, pocket listings, IDX copyright violations, and broker liability for actions of a salesperson. Each issue has its own twist. The goal of the video is to make you aware of these twists so you can have a better idea of what to do if you find yourself dealing with one of the issues this year.