Realtors Grappling with Seismic Shift!

Tom Brezsny
- Tom Brezsny

Realtors Grappling with Seismic Shift!

There were plenty of juicy headlines this week: Industry-shaking Lawsuit Upends Real Estate!!

and Realtors Grappling with Seismic Shift! and Historic Settlement Promises to Revolutionize the Market! And: $30 Billion Could Be Slashed From Agent Commissions! And lots more…

What’s happening? A verdict came down in a Missouri lawsuit lodged against the heretofore “sacred cow” of real estate commissions. Depending on your view, commission rates have either been maintained through widespread industry collusion or simply through common practice over time. The National Association of Realtors (N.A.R not N.R.A) and a few large brokerages lost and will have to shell out millions.

Moving forward listing agents’ and buyers agents’ commissions are going to be “decoupled”. Sellers will no longer be committed/expected to pay the fees for both sides of a transaction. And a separate agreement (Buyer-Broker Contract) and a more defined relationship between Buyers and their Agents will also be a requirement.

Which means that all the usual players (buyers, sellers, agents) are going to be scrambling in the days/weeks/months ahead as the rules are rewritten and a new norm takes shape. There’ll be plenty of chaos and misinformation as well as some bad actors trying to find angles to exploit as agents, buyers and sellers jockey for position around who pays what.

The doom and gloom-sayers are certainly out in force! Could this be the end of real estate as we know it? Will 80% of current Realtors really exit the business by year’s end? Will big brokerages start to fold? Will buyers stop using real estate agents altogether? After 35 years as a Realtor, should I be looking for a new job? Will there even be a Real Estate of Mind column next week???

Reading the headlines, you’d think the entire industry was teetering on the edge and the whole edifice was about to come crashing down around our ears. But looking a little deeper, all the sound and fury doesn’t really signify much. It’s mostly just an excuse to take potshots at Realtors and generate digital headlines.

And in some ways this is just another in a series of challenges that traditional real estate has faced since the early 2000s, when the rise of the internet first began to disrupt the status quo and force the industry to let go of its exclusive control over house listings.

Back then, old guard agents were staring at a future where they no longer enjoyed a stranglehold on the info. Many were convinced that it would be the death knell of the business. After all, once buyers could access all the homes for sale directly, what did they need Realtors for?

Continued next week…

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