The verdict is in — the old way of doing business is over. Join us at Inman Connect New York Jan. 23-25, when together we’ll conquer today’s market challenges and prepare for tomorrow’s opportunities. Defy the market and bet big on your future.
The recent $1.78 billion judgment against the National Association of Realtors (NAR) for conspiring to inflate commission rates is a clarion call for real estate brokers, especially those in smaller firms, to brace for potential repercussions. This decision hints at a probable surge in similar local-level lawsuits, targeting practices that may have been standard in the industry but are now under intense legal scrutiny.
To navigate this turbulent legal landscape, brokers now must adopt robust strategies to not only protect themselves but also to elevate the transparency and ethics of their profession. It’s a worrisome time for you all, we know. Let’s dig in and work through it together as a professional community.
Here are 12 strategic actions real estate brokers can take:
- Understand the judgment: It’s crucial to understand the specifics of the judgment against NAR. What were the practices or policies that led to the lawsuit? Brokers should review the judgment details to ensure they are not engaging in similar practices. Your agents are going to be asking, so it’s important to pull together those answers.
- Compliance audit: Rigorously assess all brokerage activities to ensure they align with current antitrust laws.
- Transparent commission structures: Develop and communicate clear commission structures that agents can understand and teach them to communicate more effectively so that their clients can easily understand.
- Training and education: Implement continuous training programs about antitrust laws and regulations for all agents and staff. This is a moving target right now, so there is a lot to learn.
- Documentation and record keeping: Maintain thorough records that can substantiate the fairness of your commission structures and negotiations.
- Legal consultation: Engage with legal counsel to navigate the complexities of real estate law and preemptively address potential legal issues.
- Ethical standards: Uphold the highest ethical standards and consider joining or establishing an ethics oversight committee.
- Insurance coverage: Verify that the brokerage’s insurance policy covers legal defense costs that could stem from antitrust litigation.
- Cooperative competition: Foster a competitive environment that respects the boundaries set by antitrust laws.
- Public relations: Actively manage your public image to highlight your commitment to ethical real estate practices.
- Industry monitoring: Keep abreast of industry trends and legal changes that could affect your brokerage operations.
- Client engagement: Cultivate strong, transparent relationships with clients, underscoring the value of the services provided.
In the face of this monumental legal judgment and the shifting landscape of our industry, real estate brokers must act decisively and proactively to secure their future. It’s not just about protecting your business; it’s about preserving the integrity and trust of your profession.
Now is the time to rise above the challenges, embrace transparency and lead with unwavering ethics. Let us collectively steer the course of real estate toward a brighter, more accountable future.
Take these strategic actions today to help safeguard your brokerage and the reputation of our industry. Together, we can ensure that the legacy we leave behind is one of trust, transparency, and ethical excellence. The time for action is now; the future of real estate depends on it.
Darryl Davis is the CEO of Darryl Davis Seminars. Connect with him on Facebook or YouTube.
