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The news of the National Association of Realtors (NAR) settling its commission cases and essentially agreeing to decouple commissions set off many reactions from agents on social media. With a plethora of “lemons” in the news and on the horizon, will agents be able to get out of their own way, make lemonade and find success in the coming months?
I hear you, and I feel your frustration. The news outlets with the broadest consumer audiences have been leading with the most sensational side of this, and agents don’t have a fair shot.
While rants will get you nowhere, learning about these potential changes and being prepared to answer consumer questions will help you turn this bowl of lemons into a refreshing glass of lemonade. You just have to be willing to get out of your own way.
Tantrums from the sidelines
Following the announcement of the settlement we were treated to a stunning show of frustrated TikTok reactions, unhinged rants and a surprising number of folks posturing that they would be able to negotiate even higher commissions than before. Some agents were having a Travis Kelce-level tantrum, while others seemed intent on making bizarre and unhelpful satiric observations.
Meanwhile, Inman jumped into a deep discussion immediately after with a live stream of James Dwiggins, Keith Robinson and Ed Zorn, the California Regional MLS general counsel.
Thought leaders, gurus, executives and the average agent all have passionate opinions about their frustrations. Still, while these big feelings are valid, they have nothing to do with the facts that many agents are left with: Uncertain income in a low inventory market, inflation that has pushed the cost of living even higher, and consumers who are trusting them to help accomplish their real estate goals without bias.
As Inman reporter Taylor Anderson described it, the industry has been divided into four camps of ideology: the compromisers, the reformers, the fighters, and the referees. Unlike being assigned a house at Hogwarts by a sorting hat, consumers will not award any points to these factions until all of the legal shuffle shakes out and a clear path to payment at closing emerges.
@subparlover Hogwarts Legacy Sorting Hat Ceremony! #hogwartslegacy #sortinghat #gamingontikok #hogwarts #slytherin🐍 #avadakedavra ♬ original sound – SubParLover
Over the past 20 years, the real estate market has seen so much flux and change, and with each ebb and flow it has adjusted its sails and corrected its course. You can choose to make lemonade, but you must be resourceful and ready to squeeze the lemons.
The resilience of those who choose to carve out their careers in this field has always impressed and inspired me. I do not doubt that the agents and teams that strive to work with the changes and adapt their customer service skills will not only survive but chart new territory for the next 20 years.
After five years of warnings, all the what-ifs and what-thens came to an anticlimactic end. Consumers have been given a front-row seat to the chaos unfolding in our industry. As the situation unravels, the biggest question is who will make lemonade and who will continue to feast on sour grapes.
Bet on yourself, and don’t subscribe to the hype
Many agents are right: some of the headlines that CNN, The New York Times, and other news outlets chose to lead with were explicitly designed to grab consumers’ attention and were a gross oversimplification of a very complex and still not final legal decision.
@cnn Real estate commissions are expected to drop by double digits, according to housing industry analysts, after the National Association of Realtors agreed to drop their standard 6% commission on home purchase transactions. #realtor #commission ♬ original sound – CNN
But here are some of the realities we are facing right now:
- Agents being defensive in the comment sections of major news outlets don’t impress consumers.
- Consumers have a right to know what is happening, and agents are responsible for giving them the information and the tools they need to understand it correctly.
- Brokers and team leaders need to pull their agents together immediately, offer guidance, and screen what their agents are doing online in public and private forums.
- As an industry, agents must start working immediately to repair the narrative between consumers and agents. Agents must begin working together. The survival of the fittest attitude is not a good look. This should be everyone’s top focus. Transparency is key. Ditch the rants and the tantrums.
- Remember that the only sure thing about change is that it will keep coming; this decoupling may evolve into several more forms or even revert back over the next several years. The agent who is dynamic and calm with changing market conditions (as always) will keep moving in real-time with the conditions they are presented with.
Be transparent and sweeten a sour situation
Consumers will ask for explanations, and you need to be prepared. You can take two routes with this.
Route 1: You can be transparent, work through their questions and concerns, and tell consumers that you are learning along with them and will do your best to hear them out. Be open to new ideas and create a strategy to work with less commission if the transaction or consumers call for it and are uncooperative. In other words, listen to the warning signals and prepare for the storm in advance.
Route 2: You can double down on the narrative that you must find a workaround (which is precisely how you are going to end up under a legal microscope) against this change to get your full commission still and argue with consumers that this change is unfair to you and the value that you provide.
I genuinely feel like it’s that simple. One route is that you are willing to adapt to the changing needs of consumers.
The second route is that you are going to roll the dice with the confidence of your “superior” negotiation skills to manipulate a consumer into doing what you want and hope that after the transaction closes, the client doesn’t marinate about what happened and go, “Wait a minute, my neighbor just told me they got a hot deal. How come I didn’t get a hot deal?” and come back and pursue legal action because they felt pressured by you. Be fair and transparent upfront and save yourself some future heartache.
In a perfect world, your fantastic negotiation skills impress the client, and they fall in love with your masterful business skills, praise you for your hard work, and value you as a professional — and you get your happily ever after.
However, we do not live in a perfect world; this commission system has been found to be flawed and dysfunctional for several parties, and it’s time to evolve. Every other industry has innovated and evolved over the past 100 years; why should real estate be insulated from change?
The line between negotiation and manipulation is razor-thin, so walk it cautiously. The coaches, gurus, and all the talking heads pushing you to push hard right now will not be next to you on the court if things go sideways.
Advocate for change
If you are unhappy about this, I challenge you to do something about it. If you have evidence (which I know many of you do) that these changes are hurting consumers, document it and write a letter, make a phone call and do everything you can to create a tangible ripple that might help improve the situation.
Complaints without action are useless; we are riddled with complaints and opinions when it comes to making real change in the world. Still, very few folks take the time and energy to be solution-makers and do the hard work to oppose overregulation.
@thatonedamnginger Replying to @Real Estate Consumer Lawyer ♬ original sound – VALoanLady
We are at a crisis level with real estate in our country. Between affordability, discrimination and lack of inventory, to stay on this career path you have to be an active participant in trying to help fix the problems that make this career difficult to make it better for consumers and yourself in the future. It’s easy to throw an anonymous post on Facebook and get 800 ridiculous comments; educating yourself on how to change the situation is more challenging.
Let’s ice this down ASAP
As an industry, the first focus must be rebuilding the relationship between the agent and the consumer. It’s a broken disaster, and consumers do not trust agents. I don’t care which trade association steps up to help resolve this; I’m hoping the current dynamic changes will create new leaders who are problem solvers and not folks stuck in the past.
Being romantic with tradition and nostalgia is very dangerous, especially for those in this country who are without privilege. For an exceptionally long time, individuals of extreme privilege and wealth have led and profited from the real estate industry and profited from consumers who didn’t understand they had a choice to negotiate.
The reason we are here today is not because of the many hard-working agents who advocate for fair housing and the American dream but the widespread failure of many in our industry to appropriately maintain educational relationships with consumers so that they understand how commissions work and the value of the work that agents do.
Now that the lawsuits are unleashed, there is no going back.
Enough with the tantrums. Do better and become a leader of change and an example of how to make this work for all, not just some. Don’t be sorry, mad, sad or discouraged. Start working on solutions. I will be very curious to see who steps up to make the best glass of lemonade this coming summer.
Rachael Hite is a former agent, a business development specialist, fair housing advocate, copy editor and is currently perfecting her long game selling homes in a retirement community in Northern Virginia. You can connect with her about life, marketing and business on Instagram.
