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A day after a historic verdict in the Sitzer | Burnett commission trial, Inman founder Brad Inman and housing experts examined how — and when — agents will need to adapt to new regulations as a result of Tuesday’s explosive ruling.
EXp team leader Kendall Bonner and Collabra Technology CEO Russ Cofano joined Inman on stage during a live Connect panel Wednesday, with Inman voicing the frustration of millions of real estate professionals when he made reference to the National Association of Realtors’ role in commission meddling.
“They failed,” said Inman of the defendants in the trial, which also included franchisors such as Keller Williams. “A jury found them guilty of failing, and now the members are going to pay for these shenanigans. It’s shameful.”
Bonner predicted that compensation models may eventually vary from one brokerage to the next or from one agent to another, increasing the likelihood of confusion. But regardless of the model, buyer agents most likely will need to agree to a compensation plan with clients at the onset of a working relationship.
“Now more than ever, buyers agents are going to become responsible for making sure they get paid,” Bonner told an audience at Connect. “They’re going to have to be thinking about that because no one wants to work for free.”
Assuming commission sharing isn’t banned entirely, Bonner added, agents for homebuyers will still be compensated by homesellers, but conversations with homebuyer clients may become more involved.
“Imagine a world where it’s decoupled,” Bonner said. “The buyer agent has a conversation with the buyer, agrees on a compensation model, they go show homes, the buyer and buyer’s agent will probably likely agree — assuming there’s no ban on a seller paying the compensation — and make that a part of the offer.”
One question left unanswered, however, is whether the role of a buyer agent will change significantly over time, said Cofano, who was confident that buyer agency wasn’t disappearing any time soon.
“We’re not going to a single agency system like Europe,” he said. “That’s not happening.”
“There is going to be change,” Cofano added. “With change comes opportunity. This is an amazing industry of opportunistic people, hardworking people, and you will find the cream will rise to the top — which is really the exciting thing for the industry, it’s a new age.”
Wednesday’s session comes one day after a federal jury in Kansas City, Missouri, ruled in favor of homseller plaintiffs in the closely watched Sitzer | Burnett commission trial. Jurors likewise ruled against defendants in the trial, including the National Association of Realtors, Keller Williams and HomeServices of America, agreeing those parties conspired to artificially inflate real estate commissions.
In the verdict, which holds the potential to completely rewrite the way real estate transactions are handled in the United States, eight jurors awarded homesellers $1,785,310,872 in damages, which, under the law, will be automatically trebled to $5.356 billion.
The eight-person jury deliberated for about 2.5 hours Tuesday morning before issuing its unanimous verdict in a suit that represented approximately 500,000 Missouri homesellers seeking reimbursements paid to buyer brokers.
As of now, real estate industry rank and file are left with more questions than answers about how their day-to-day business dealings will be affected by the ruling.
