Have you heard?
I know you must have heard or read some of the outlandish headlines about the real estate industry ending because of the NAR Settlement.
I can assure you that as a real estate agent, the changes that are coming our way will do either 1 of 2 things:
Keep your business fairly moderate or at pace
Destroy your career completely
I will explain later why I believe this, but first I want to break down what’s happening right now and what it means from the buyer and seller's perspectives as well as how it will affect the businesses of some real estate agents.
Case:
There was a lawsuit filed in Missouri federal court by a group of home sellers against the National Association of REALTORs (NAR) as well as some of the most renowned real estate companies in the United States. This list includes:
Anywhere
Berkshire Hathaway
Keller Williams
HomeServices
RE/MAX
Claim:
Sellers believe that real estate commissions are too high and that buyer’s agents are being compensated too much and NAR’s Code of Ethics and MLS handbook among other practices lead to inflated commissions.
My Thoughts:
As professionals, we must take responsibility for our lack of communication when it comes to commissions AND the contracts and your role as a representing agent. Compensation should always be spelled out verbally to your clients. Clearly communicating who is compensated and how they will be compensated will eliminate all confusion on “expensive" commissions
All commissions are negotiable by law. Legally, real estate agents cannot collaboratively set commission rates. It has always been negotiable. NAR also does not set commissions.
The Sherman Antitrust law prohibits price-fixing or the practice of multiple real estate agents in an area from working together to charge the same commission rate.
It’s time to really laser focus on communicating our value as a buyers agents just as well as listing agents. Maybe clients aren’t sure what it is that we do to get the job done of selling and listing homes. Maybe it’s our value proposition that actually needs work. Whatever it may be, now is the time to incorporate more into your servicing clients.
The Settlement: The Settlement must be approved by a judge.
As it reads, at https://www.nar.realtor/magazine under paragraph titled Changing Business Practices:
“The settlement agreement also mandates two key changes to the way members and MLS participants do business.
NAR agreed to create a new MLS rule prohibiting offers of compensation on the MLS. This would mean that offers of compensation could not be communicated via an MLS, but they could continue to be an option consumers could pursue off-MLS through negotiation and consultation with real estate professionals.
NAR also agreed to create a new rule requiring MLS participants working with buyers to enter into written agreements with their buyers before the buyer tours a home. NAR has long encouraged its members to use written agreements to help consumers understand exactly what services and value they provide, and for how much.”
So, to revisit why I said the changes that are coming our way will do 1 of 2 things which are
Keep your business pretty moderate or at pace
Destroy your career completely
I believe that if you are already operating your business from a place of contribution with your client always at the top of mind and you are communicating your value, then your client will trust you and believe in you and your ability to sell or list a home.
On the other hand, since some buyers are not accustomed to signing agreements prior to going on showings and agents do not have processes in place or are afraid to ask for the agreement, well they will suffer.
So, it’s make or break time for some of us. Hopefully this is just an opportunity to sharpen up our tactics and build better businesses for our clients. If you want to stay up-to-date with the settlement and the changes that will be happening, click the link:
Information found at https://www.nar.realtor/magazine
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