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| 4 minute read

ICYMI: June 27-July 10

Let's start our bi-weekly update with a conversation about real estate. 

We previously posted on the NAR settlement and its consequences for mobility. Since then, the entire relocation industry has started bracing for changes. By August 17, realtors assisting buyers must have written agreements outlining the compensation amount, its determination process and its origin. Additionally, listings on the MLS won't include "offers of compensation," that share what the sellers are paying to the buyer's agent. The idea is that buyers should be paying their brokers. That's because when sellers pay the buyer's broker, the latter's interests aren't aligned with their clients. 

Buyers will still be able to pursue arrangements in which the seller pays both broker fees, through negotiation and consultation with real estate professionals. There are numerous ways that commissions may be paid going forward, some of which could add costs on the buyer that are not there today. For mobility, this could trigger additional gross up costs for reimbursing or paying taxes on those costs. Unfortunately, we're still waiting to see what happens. Many experts say it will be homebuyers and sellers that control what happens next. 

We'll keep sharing new information, insights and implications so you can adjust your policies and practices. Jump on our mailing list to stay in tune on this topic

Also, if you are a corporate mobility or HR professional, take a moment for this survey: SURVEY: Company practices & policies around buyer broker compensation for U.S. real estate practices. It is being conducted by WERC and Hanover Research to document how organizations are handling changes related to buyer broker compensation. 

Now on to other updates from around the world:

  1. China: Per EuroNews, China has extended visa-free travel to citizens of Austria, Belgium, France, Germany, Hungary, Ireland, Italy, Luxembourg, the Netherlands, Poland, Spain and Switzerland until the end of next year. Australia and Malaysia are also on the list as China aims to encourage more people to visit China for business and tourism, plus exchanges between Chinese citizens and foreign nationals.
     
  2. Canada: According to JD Supra, As of June 21, 2024, Immigration, Refugees, and Citizenship Canada (IRCC), as well as Canada Border Services Agency (CBSA) officers, have confirmed that applicants seeking post-graduation work permits are no longer able to make an application at a port of entry as a result of new ministerial instructions. According to these  instructions, all applications for a work permit submitted for foreign nationals who are outside Canada at the time of application must be submitted online.
     
  3. Slovakia: Fragomen reports that effective July 15, 2024, Slovakia will introduce more relaxed EU Blue Card rules. Key changes include relaxed professional experience eligibility pathways, reduced minimum salary levels, and an increased validity period, among others. These reforms are part of Slovakia adhering to the requirements of the 2021 EU Blue Card Directive.
     
  4. European Union: Lexology has information on new EU Commission rules that enable Indian, Saudi, Bahraini, and Omani nationals to obtain short-stay Schengen visas with longer validity periods. Under the new rules, Indian nationals may be eligible for two- and five-year multiple entry visas based on their travel history. Saudi, Bahraini, and Omani nationals residing in their respective home countries are now eligible for five-year multiple entry visas.
     
  5. Australia: EIG notes the Australian government has extended the time people from Association of Southeast Asian Nations (ASEAN) countries and Timor-Leste can visit to conduct business. The increase is now to up to five years, instead of three years, for applications lodged after April 1, 2024. Business visitors with a Visitor (subclass 600) visa can stay in Australia for up to three months at a time during multiple visits, for up to five years.
     
  6. Germany: Germany has introduced the Skilled Immigration Act (FEG), to be implemented in three phases. The third and last phase was  implemented on June 1, 2024. This includes the introduction of the so-called Chancenkarte (Opportunity Card) which replaces the job seeker visa. You can find more information on the Chancenkarte here
    Additionally, European visitors to Germany for the men’s soccer European Championships have been shocked by how bad the national railway system is. Deutsche Bahn has long been admired across Europe for its punctuality and value for money, but when it took journalists on a demonstration trip from Berlin to Frankfurt, the train was 45 minutes late. Last year, a third of all trains were behind schedule, while Switzerland is considering banning German trains from its network over bad timekeeping. Decades of underinvestment — Germany spends less than almost any other European country on rail — have left the system in shambles, the Financial Times reported: A huge overhaul is planned but will mean closing major lines for months.
     
  7. Greece: Per the  Morning Brew, Greece has given us some pretty good ideas in the past, like democracy and Euclidean geometry, but we’re hoping its latest innovation—namely, a six-day workweek—doesn’t catch on. New regulations that took effect in Greece this week extend the typical 40-hour workweek to 48 for private businesses providing round-the-clock services. The first-of-their-kind rules in the EU are an effort to boost the Greek economy, which has only recently begun to rebound from a decade-long slump. 
     
  8. United Kingdom: The UK Home Office issued an updated employer guidance on right to work (RTW) checks at the end of June 2024. Employers now do not need to re-check an employee’s right to work if the employee holds a physical Biometric Residence Permit expiring on December 31, 2024. However, a valid initial check must have been performed, and the visa expiry date should be tracked. Employers are also not required to conduct additional RTW checks for employees whose pre-settled status under the EU Settlement Scheme has been automatically extended from two to five years. This applies as long as the individual remains employed.
     
  9. United States: Home affordability is at its new lowest point since 2007, according to a new report from ATTOM Data Solutions. Expenses associated with owning a home—including the mortgage, homeowners insurance, and real estate taxes—now take up 35.1% of a homeowner’s take-home pay, according to the report from the property data analytics firm. In some places around the country, that number is even higher. ATTOM notes that more than a third of the country is spending 43% of their wages on their home. 
    It’s not surprising that the West and Northeast are among some of the most unaffordable regions in the country. In California’s Santa Cruz County, homeowners need 113.8% of annualized local wages to afford a home—in other words, more than what many people even earn. It’s a similar story in New York’s King County, where residents need to spend 111.8% of annualized local wages to keep a roof over their head. 
    A solution would be to build more houses. Realtor.com estimates that the U.S. lacks between 2.5 and 7.2 million homes that were needed to keep up with household formation over the last decade.
Real estate brokers are scrambling to figure out workarounds to an industry-wide legal settlement that threatens to upend their businesses starting in August. Why it matters: The settlement reached in March has the potential to revolutionize the homebuying process, and save people a lot of money — but resistance in the industry could slow down or even block that change. Homebuyers and sellers might have to be extra savvy to benefit. Catch up fast: Right now, if you're selling your home, you pay about 6% in commissions, half to the agent who helped you sell and the other half to the buyer's agent.

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icymi, global updates, china, canada, slovakia, germany, greece, united states, immigration, visas, blue card, entry, talent, skills shortage, railways, work week, housing affordability data, european union, euronews, jd supra, fragomen, lexology, deutsche bahn, morning brew, attom data solutions, offer of compensation, real estate, commissions, united kingdom, right to work