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Mississippi’s changing real estate environment

| Dec 15, 2020 | Uncategorized |

The changing business climate has not left out Mississippi real estate transactions. The new environment for brokerage, home ownership, and local regulation may pose new real estate law issues.

Brokerage

For many years, real estate associations exercised significant control over information and representation in transactions though their multiple listing services. Owners, listing brokers and selling brokers played large roles. Most brokers charged owners the same proportionate of the selling price regardless of the property’s sale price. Listing and selling brokers usually divided commission equally. Later, some real estate agents represented buyers instead of being sellers’ subagents.

There is now litigation about fees which can change this. The National Association of Realtors recently reached a settlement with the U.S. Department of Justice over allegations that it upheld anticompetition rules which blocked the ability of homeowners to know about the commissions earned by buyers’ agents.

Home ownership

Ownership rates are falling. Reflecting the national trend, Mississippi’s rate dropped each year from the high of 72.1 percent in 2004 to 68.2 percent in 2020. It has the 15th highest ownership rate in the country.

Millennials play a large role in this decline. They are not purchasing homes as much as earlier generations because of changing careers and jobs, lower marriage rates and from waiting longer to establish permanent residences.

Renting

Corporations are now buying residential real estate and renting it instead of flipping these properties. Residential neighborhoods are shifting from homeowners to renters which raises concerns about property values. One company in Mississippi even allows prospective tenants to rent a home through their smartphones.

Airbnb

The growth of Airbnb and other online rentals are also affecting neighborhoods and changing the use of residential real estate. This trend has provided an option for residential property owners to earn money by renting out their property for short periods. But there have also been problems with large gatherings and parties and the substantial occupancy of these properties.

Because of these problems, many cities have issued regulations. Airbnb emphasizes to property owners that they should review local rules and learn how to be good hosts.

Over 50 cities in this country passed ordinances or rules specifically addressing rental property, according to Airbnb’s listing. There are no Mississippi towns on that list. But, for example, the locality of Ridgeland prohibits the rental of a residence for less than 30 days.

An attorney can help developers, business owners, landlords and builders deal with these issues. Their representation may help protect their rights in real estate transactions.