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Real estate’s status quo when it comes to agent pay is toast, James Dwiggins argued Tuesday, and agents need to start planning for that future now.
“These lawsuits are going to end with a settlement,” Dwiggins, CEO of NextHome, said on stage at Inman Connect New York. “It’s going to change structures of this business.”
The comment was a reference to the numerous commission-based lawsuits currently in litigation. The most prominent of the batch is Sitzer | Burnett, which went to trial in October. A jury in that case ultimately ruled that the National Association of Realtors and major franchisors conspired to keep agent commissions high. In the wake of that case, numerous similar suits have popped up in many parts of the U.S.
But Dwiggins doesn’t think commission suits are the only thing putting pressure on the industry right now. Instead, he argued on stage, both the U.S. Department of Justice and the Federal Trade Commission are likely going to take action.
“Offers of compensation in the MLS will likely cease to exist,” Dwiggins said. “The DOJ and the FTC want to see this removed from the multiple listing service.”
At the same time, Dwiggins also said, the real estate industry has experienced a “significant absence of leadership,” and is staring down a future with far fewer agents. Consumers are additionally starting to get the message that the status quo is changing.
“There is so much bad press in our business,” Dwiggins said, adding that, “we are not talking enough about what we do.”
Dwiggins has long been one of the loudest voices in real estate arguing that commission lawsuits and regulator interest are likely to create significant changes in the industry. His comments Tuesday revealed that he still envisions widespread disruption on the horizon.
However, Dwiggins also offered advice Tuesday on what agents and brokers can do to survive the coming tsunami of change.
Among other things, he repeatedly argued that agents need to have their buyers sign buyers’ agent agreements, while brokerages need to push such agreements as a part of their company policies.
“You wouldn’t take a listing without an agreement,” Dwiggins said. “Why would you take a buyer?”
In a similar vein, Dwiggins urged industry pros to “treat your buyer the same way you treat your seller,” including by sitting down with them and having a presentation that explains an agent’s value. And he said that brokers need to teach sellers about the importance of offering compensation to buyers agents.
“Get clear on how your company will operate in the future,” he added.
Ultimately, Dwiggins predicted major changes in the real estate industry by the end of 2024. However, that doesn’t mean an apocalypse awaits real estate agents. In fact, Dwiggins argued, the people who can articulate their value in the future may actually end up making more money than they do now.
“You’re going to see buyers agents,” he said, “charge more than they charge today.”
