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Anne Jones and her agents were already navigating an unusually busy late summer market when, this weekend, the phones started ringing.
Anne Jones
“I definitely worked all weekend,” Jones, the designated broker and owner of Windermere Abode in Tacoma, Washington, told Inman. “I was close to my phone. I was close to my email.”
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The calls were coming in to Jones from her nearly 50 agents, who she said were fielding an upsurge in inquiries from their seller clients. And the questions had to do with something very specific: New rules from the National Association of Realtors.
The rules went into effect Saturday, Aug. 17, and are the result of an antitrust settlement NAR announced in March. They address issues such as broker compensation and buyers agency contracts, and have dominated headlines for much of the year.
Saturday’s rules deadline took place against a backdrop of significant change for the real estate industry that has included cooling mortgage rates and NAR’s decision to make interim CEO Nykia Wright the organization’s permanent chief executive. Meanwhile, Michael Ketchmark — the attorney who represented consumers in one of the high-profile cases that NAR settled — has indicated he is watching closely and is prepared to take legal action against rule-breakers.
In that context, and with mainstream news coverage reaching a fever pitch, the real estate industry on Monday faced existential questions: Are the new NAR rules about to change everything? Will the status quo give way to chaos? Is this the beginning of the end of real estate as we know it?
Inman’s editorial staff spent Monday — the first business day after the rules kicked in — reaching out to brokers, multiple listing service leaders, and other industry observers seeking answers. Many of the people who ended up speaking to Inman shared experiences resembling Jones’ busy weekend. Others described confusion in the marketplace. Several suggested that it’s simply too early to gauge the new rules’ impact.
But the biggest takeaway from these conversations was that on the first day after the rules deadline, the world did not, in fact, end. Indeed, despite extra calls or a bit more rigamarole, the general consensus among the real estate professionals who spoke with Inman was that business mostly continued as usual. It’s still early days, and many questions remain unanswered, but, so far at least, change has not been a particularly bitter pill to swallow.
A handful of hurdles
Jessica LaMar
Industry professionals who spoke to Inman did have some complaints on Monday. For example, Sacramento-based Jessica LaMar is no stranger to change — she began her career at Lululemon, then transitioned to real estate during the COVID-19 pandemic — but nevertheless expressed some frustration over the changes, which for her multiple listing service began on Aug 12.
“Everyone is on different pages with how they’re approaching what’s going on, what they’re requiring, or what they’re willing to disclose about their seller offering commission,” the House Real Estate agent said after taking a deep breath.
She later added that she has also seen the most fierce pushback from homebuyers she’s been working with for months who don’t understand why everything is changing.
“It almost feels like, ‘Wait this isn’t what my previous experience has been,'” she said of her clients. “Even if I explain [the changes] thoroughly and how these changes can work in their favor, they still aren’t quite comfortable with it.”
New York-based Bianca D’Alessio, of Nest Seekers International, described something similar, saying she has seen “pushback” from sellers in response to offering buyer broker commissions as a result of the settlement.
Bianca D’Alessio
“We get pushback, but then again, it’s just explaining to sellers we’re too new in this to change the rules all of a sudden,” D’Alessio told Inman. “And if your interest is in getting your home sold for the highest price in the shortest amount of time, the best way to do that is to always engage buyers.”
Other brokers described apparent hiccups with their documents or the digital systems they use to put listings into the MLS. Among them, Matthew Salway — a Virginia Beach agent with Iron Valley Real Estate Hampton Roads — said that “for some reason, there’s still a requirement for seller brokerage commission on the data input form, which is kind of weird.”
Meanwhile, Dex Hubbard, of RE/MAX Mountain Properties in North Carolina, said that the removal of fields in his MLS has simply created extra work for agents.
“It’s just making us have to go an extra step to make sure we can get paid,” he said. “Because now, Lord God, we don’t mind working seven days a week, but we all got families, too.”
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Meanwhile, Kendall Bonner, vice president of industry relations for eXp Realty, said that despite the Aug. 17 deadline coming and going, there is still something of an information gap in the industry.
Kendall Bonner
“For example, commission sharing is one of those things,” Bonner told Inman Monday. “NAR doesn’t have a preference on agency, commission sharing, concessions, various topics. And I think a lot of brokers and leaders are struggling with what to do in the gap with regards to some of those decisions that need to be made.”
The takeaway from these comments is that there are hiccups, hurdles and challenges emerging around the rules deadline. Agents’ lives have become more complicated, and the dust is not settled.
Likely for those reasons, among others, the NAR settlement and rules remain unpopular; a new survey of 300 buyer’s agents conducted by the real estate education firm Kaplan and obtained in advance by Inman on Monday found just 1 in 5 agents believed the changes were a positive thing. Fifty-six percent felt that the changes were negative.
Still, the overwhelming majority of respondents — 72 percent — said they were prepared.
Mostly smooth sailing for agents and brokers
Daniel de la Vega
Perhaps it’s because many agents feel prepared, but either way, most told Inman that despite any hiccups, things generally went well over the weekend and through Monday. Among them, Daniel de la Vega — president of One Sotheby’s International Realty in Miami — compared his team to a well-trained sports team heading into a big, anxiety-inducing game.
“Once the moment comes, that’s when, like I said, it’s game time,” he told Inman. “It’s time to play ball. And a lot of our agents are playing ball, and they’re showing that they’re well prepared.”
In a similar vein, David Beach — an agent with RE/MAX Community in New Jersey — described Monday as “business as usual,” adding that media reports actually blew the situation out of proportion.
“This is nothing new,” he said, adding that, “yes, there’s new forms to be signed. Other than that, that’s pretty much it. This is business as normal.”
Matthew Salway
Many industry members who spoke with Inman also indicated that their clients were taking the changes in stride. Bonner said agents in her company mentioned “not having as big of a challenge as they expected with consumers.” And Salway spoke to Inman while filling out a listing agreement, explaining that “the seller is agreeing to give a buyer’s agent commission.”
“All of my buyers that I’ve had out looking that aren’t under contract, you know, I made them all sign buyer broker agreements and explained everything to them about how a buyer broker agreement works,” he said, noting that his clients have willingly accepted his explanation of what is happening.
Nathan Stillwell has seen something similar. The Illinois-based John Greene agent told Inman he had two listing clients receive offers over the weekend and that he made offers on behalf of two buyers. In each case, the sellers were willing to pay buyer broker commissions, which Stillwell said were 2.5 percent.
A poll launched by Inman Monday suggests these experiences are not isolated: Asked if they were experiencing friction Monday, 72 percent of respondents indicated that in fact, they encountered “smooth sailing.”
Asked simply if they were ready for the changes, 76 percent of respondents responded in the affirmative.
MLSs navigate the storm
Something similar was playing out Monday in the world of multiple listing services, with many MLS executives reporting a successful first day under the new rules regime. BeachesMLS CEO Dionna Hall, for instance, told Inman she hadn’t heard of any issues at all.
Dionna Hall
“Since Aug. 17 I have been relieved to see our local Realtors are having success obtaining buyer written agreements and are confident in their abilities to make the needed changes to comply with the settlement,” she said in an email.
Bright MLS similarly had a successful Monday, according to spokesperson Christy Reap.
“We are in our fourth full business day since the changes went into effect in our system,” Reap said. “It’s been relatively smooth, and the updates to our system are performing as they should.”
Merri Jo Cowen, CEO of Stellar MLS, told Inman that her team spent more than 10,000 hours getting ready for the new rules. Stellar MLS ultimately rolled out the changes in its system on Aug. 6, and Cowen said there were some questions from agents about the earlier deadline. But as was the case at other MLSs, she said on Monday there were “no major hiccups” and “nothing that we didn’t expect.”
Emily Chenevert
Meanwhile in Texas, Emily Chenevert — CEO of Unlock MLS and the Austin Board of Realtors — said that her organization has encountered some confusion, which she attributed to “negative national news and media headlines.” Nevertheless, when asked how things were going Monday, she replied that “business is strong despite a changing market and industry, thanks largely to the proactive efforts of Unlock MLS in preparing our subscribers for the settlement-related changes in late May.”
That MLSs have navigated the Aug. 17 deadline smoothly is particularly significant. Though NAR created the new rules, it was up to MLSs to actually enforce them. For example, the rules disallow sellers’ agents from making offers of compensation to buyers’ agents within a Realtor-affiliated MLS. To enforce that rule, MLSs had to delete compensation fields in their online systems. That, in turn, raised the possibility that Aug. 17 could bring not only new rules but glitches or system failures as MLSs updated their technology.
For the most part, however, that does not appear to have happened.
Elevating the industry
As Inman has previously reported, many questions about the new NAR rules remain unanswered. These questions have to do with consumer preferences and future regulation, particularly and potentially from the U.S. Department of Justice.
Russ Cofano
Some industry experts do anticipate some change. Russ Cofano — a real estate veteran and the CEO of Collabra Technology, for instance, suggested that as time goes on, buyers may be leery about signing short-term agreements and may therefore favor open houses over individual tours.
“It’ll be very interesting to see whether open house traffic increases, which I expect it will once buyers understand they don’t have the same friction with agreements by going directly to open houses,” he told Inman Monday by phone.
Eric Stegemann, CEO of Tribus, also believes the new rules could have an impact on buyer behavior. He recalled to Inman his early days in real estate when he worked as an agent and showed 150 homes to one couple. Eventually, however, the couple ghosted him and he was never compensated for his time.
Stegemann speculated that the new rules could keep such “looky-loos” from taking advantage of agents, and create more certainty that buyers agents will be fairly compensated for their efforts.
Eric Stegemann
“I believe that agents should be excited by this because they will be protected,” Stegemann said of the new rules. “If [agents] do show homes, they’re now going to get compensated if that person does purchase a home.”
Stegemann also made the somewhat contrarian argument that commissions could now ultimately go up.
“A lot of people think I’m crazy for making the claim that buyer agent commissions will go up,” he said. “But it goes back to if something has been perceived to be free to the consumer for a long time and now they have to pay for it and you have to start defending your value, consumers will value what you’re doing maybe more so than what they had in the past.”
Stegemann’s point was that the changes could ultimately weed out less professional agents — which is an argument that other industry members also made during conversations on Monday.
Nathan Stillwell
“What’s going to happen is agents that provide value and service and guidance,” Stillwell said, “are going to come out of this OK.”
The question then is how industry members can be sure that they’re the ones actually providing value and guidance.
Evian White de Leon, chief legal counsel for the Miami Association of Realtors, offered one suggestion in an email to Inman.
“The message is make sure that you have the tools and resources and education that you need to make sure that you can continue to do what you do best, which is practicing real estate,” he said. “If you don’t know, ask.”
Meanwhile, Bonner argued that the key to success in the new, post-Aug. 17 world is industry professionals working together.
“I think that collaboration just looks different now,” she said. “It’s not about financial collaboration, but it’s about getting the deals done, and educating the consumer properly, and elevating our game as a profession — which ultimately, you know, elevates the industry.”
