Real estate professionals have weathered upheaval and change in the past, and so will we too, even if we don’t quite know how yet, writes brokerage owner Teresa Boardman .
Here at Inman, May is the month of fees and rewards. We cut through the noise and misinformation and provide you with the latest facts and strategies on how to thrive after the commission’s settlement. Also, get updates delivered straight to your inbox with Inman’s new weekly digest, “Commission Chronicles.”
National Association of Realtors (NAR) settlement proposal to that commission case The way real estate agents do business will change. The rules of the settlement have been approved in advance by Sitzer.Judge Burnett, will probably begin to take effect. August 17, 2024separating listing fees from buyer’s fees, removing commission displays from the MLS, and requiring agents to enter into contracts with buyer clients before showing them homes.
This is not new information. We have known about the proposed settlement for over a month. Unfortunately, we won’t really know how the new rules will affect salaries for companies and agents until they are implemented and have been in place for some time.
As a veteran of the real estate industry, I have been through many ups and downs, turmoil, and even a pandemic. And one thing I learned from this experience is that planning in the midst of uncertainty is a fool’s errand. Here’s why:
When the pandemic hit, there was no plan
Back in 2020, before the COVID-19 pandemic started, I didn’t have time to update my business plan. No one had a blueprint for how to survive the pandemic or how to continue business.
upon March 13, 2020, the President of the United States declared a national emergency. Subsequently, national and local government “curfew” orders were issued. In some states, real estate has been deemed an essential service and allowed to work under new safety rules.
March is a busy month for most real estate agents. I remember the homes we were selling at the time, and I remember talking to customers when we all had to figure out what to do next. Some homeowners didn’t want people in their homes, and there was a time when open houses weren’t allowed in many areas.
Some homebuyers stopped looking for a home, but for others, moving became a kind of emergency. Actually, in March 2020, The number of people who moved has increased rapidly..
As real estate companies were forced to close their offices, real estate agents worked from home. For some, it was a new experience. For many people it wasn’t.
things change quickly
One of my biggest complaints was the long lines at the bank. The lobby was closed and we could only use the drive up window. At that time, mobile deposit limits were too low and transferring money was not as easy as it is now.
The co-working space used as an office was initially closed temporarily and then permanently. Deliveries sometimes arrive at buildings that are currently vacant, and a mysterious person signs them.
Before COVID-19, there was no plan for how to deal with the issues that arose during the pandemic. There was no plan for how to handle mail, bank, and real estate closings that could not be handled in person. We learned how to meet clients via the internet and how to cope with showings in apartments that are partially closed.
We had to learn how to protect ourselves and our families from a potentially deadly virus while still making a living.
We learned how to live in a world where everything changed almost overnight. We learned how to deal with great stress and uncertainty. Has anyone made plans for March 2020?
where we are now
Four years later, we’re gearing up for some changes that will impact the way we do business.
When it comes to commission lawsuits and settlements, the changes are significant. Under the proposed settlement, we will no longer be able to provide buyer agent coverage for our listings on the MLS.
This means that the buyer’s agent needs to figure out whether the listing agent is paying the buyer’s agent a commission, whether the buyer’s agent is paid through seller concessions, or whether the buyer has another way to pay the agent. That means you need to figure out what’s going on. who knows? Perhaps buyer agencies will disappear and buyers will instead work with listing agents.
None of us have a crystal ball. We do not know if the proposed settlement will have unintended consequences. Just as we didn’t know how consumers would react to the pandemic, we can’t predict how consumers will react to changes in the way we do business.
No one expected home sales to increase during the pandemic, but It will reach its peak in 2021 and reach a 10-year low in 2023.
Many of us expected home sales to decline in 2020 and more real estate agents to quit due to the pandemic. I know several people who have decided to retire, and now we know that the total number of real estate agents has increased and probably peaked at 1.5 million. Membership has declined This is the first time since May 2021 that February has fallen below that number.
We need to discuss how buyer’s agents will be paid and work through different scenarios, including what to do if a buyer under contract refuses to pay due to lack of funds. .
By this time next year, we will all be acting differently than we are now. And all of that change won’t be part of any pre-made plans. New opportunities will arise that we have not yet imagined. There will be winners and there will be losers. Some real estate agents will quit, and others will start.
Those who will succeed after a settlement will be those who are flexible and able to make new plans – agents and real estate companies with a sense of adventure rather than entitlement. Someone with an imagination and a willingness to take risks and try new things. They can think outside of the box of, “We have to pay X amount because we are essential and we have a right.”
We had no intention of being on the losing side of the Bomb Commission lawsuit, but here we are. Of course, it’s good to have a plan, but I’m not going to rush into it.