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As the real estate industry reels from business practice changes wrought by the National Association of Realtors’ settlement of multiple antitrust lawsuits, agents and brokers on the ground are contending with how to keep professionalism high and wring success out of upheaval.
Romeo Manzanilla, broker and chief operating officer for @properties Christie’s International Real Estate, supervises 85 agents and has had a front row seat to how the changes have exposed the limits of the education provided by some brokerages. To be blunt, he’d like to see “proper training on how not to be an asshole in real estate,” Manzanilla told Inman in an interview Sept. 17.
BROKER SPOTLIGHT: ROMEO MANZANILLA
Inman interviewed Manzanilla, an industry veteran of nearly 20 years, before his upcoming appearance at Inman Connect Austin on Oct. 9, where he will speak in a session called, “Suiting Up For Growth: How the Next Chapter Will Unfold.”
Manzanilla is a current board member for NAR and the Texas Association of Realtors and a past president of the Austin Board of Realtors. He recently ran to be on ABoR’s board of directors again, but missed being elected by 83 votes.
Inman spoke to Manzanilla the day voting began about his plans as a leader, what a bankruptcy early in his career taught him, the biggest challenges he’s encountered after the settlement changes, and how he sees the future of real estate. This interview has been edited for length and clarity.
Inman: I was researching you before the interview, and I stumbled across your Instagram. I saw it’s election day for you.
Romeo Manzanilla: Yes, I’m running for the local Austin board of directors. I’ve served in a couple different capacities, including president, in the past, and now I feel with all the NAR changes and the fact that I’ve been serving in a couple of task forces for the local board, it just makes sense for me to be serving on the board.
Which task forces have you been serving in?
As Austin Board of Realtors was preparing for the changes, there was a task force to have Austin Board of Realtors develop their own forms, everything from disclosure of fees to competition agreements to even listing agreements. So I’ve been working with the local board on creating forms. Obviously there’s an attorney that’s providing guidance, but from a practitioner standpoint, that’s been the perspective that I’ve been providing.
If you’re elected, is there something specifically that you’re most looking forward to doing?
As we were navigating through all these changes, unfortunately, I feel like there are a lot of brokers that are not equipped to be able to provide the necessary guidance to their agents. If there’s ever been a time to raise the bar in terms of the level of professionalism within our industry, it’s now. Really my focus is on raising that level of professionalism in both dealing with consumers and how agents deal with each other.
Are there specific moves you want to make in order to do that, like specific programs or policies or requirements?
Whenever there are ethics violations, it’s a situation where one agent reports another, but then, there’s fear of the other agent basically retaliating or something like that. I want to be able to provide some further education on just the professional etiquette of being a Realtor.
I want to develop a course or have training on, again, just professional etiquette because, I think now more than ever, you have to expand not just your SOI [sphere of influence] with your consumers, but also get to know your colleagues in the industry as well. So then that way, as there are situations where maybe the buyer and seller don’t agree, the agents can keep pretty level-headed in terms of trying to work towards getting the deal done and not let ego get in the way.
So you’re thinking more education, like more ethics education?
Exactly, more education, just proper training on how not to be an asshole in real estate, basically.
Do you think that will help with the fear of retaliation?
If we’re holding people to a higher bar, then it becomes the expectation that you are going to conduct yourself in a professional manner across the board. So I think people would feel maybe a little more empowered that they’re going to have the backing of the association to back them in situations maybe when there isn’t necessarily a clear-cut ethics violation, but just agents operating in bad form.
A lot of this starts with holding the broker accountable for the actions of their agents. Education really does start with the broker. The brokers who don’t participate and get up to speed are the ones that are going to be under scrutiny because when their agents misbehave and their broker hasn’t taken the time to even get themselves educated, then we have a problem there.
I saw that you got your license in 2006. You filed for bankruptcy in 2006. Did that influence your decision to become an agent?
No. What happened was that I had a business partner with an optical disc manufacturing company and unfortunately, there was a situation of fraud, not by me, but by my partner. I was a guarantor on a lot of equipment and things like that. While he was being investigated, unfortunately, the banks were coming after me for this situation. That’s why I was really kind of compelled to file for bankruptcy in that time.
It had nothing to do with me not being able to control expenses or anything else like that. It was, unfortunately, because of a fraudulent business partner.
That sounds really tough. Do you think you came away with some lessons that influence how you do your business as an agent?
Yes. A lot of times, if you put 100 percent trust, the problem is that if you’re not working towards the same [goal] and there’s not oversight and checkpoints and audits, that’s where the problem comes about. Definitely it was a life lesson. At that time, I was [in my] early 30s, so relatively young in my career, so it definitely came with the life lesson of having audits and checks in place whenever you are dealing with financials, and you’re dealing with a partner.
Is that something you try to share with the agents at your brokerage?
I don’t ever get too personal, but definitely in terms of sharing information, if you are going to partner, let’s say, with another agent, having things clearly stipulated in the contract and also being able to see the whole operation because, unfortunately, when it comes to business, when it comes to money, sometimes things can go awry.
I saw that you were previously with Compass, and then you started your own consulting company. Did you leave Compass to start the consulting company? What was the situation there?
No, unfortunately, working at Compass when they were going through all their multiple rounds of layoffs, I was in that last round. What they did is that they just went from the top down, just to cut their expenses. Unfortunately, I was one of the more expensive leaders there, and they decided to cut my position, along with — this was back in January [2023] — with the director of luxury that they had just brought on from Sotheby’s, and the president of customer success.
When that happened, I actually went to Inman [Connect] in New York and met with with Thad Wong, CEO of @properties Christie’s, and Chris Lim, who at that time was the president of Christie’s, and just discussed a situation of me moving forward in a consulting capacity. They definitely understood the value proposition I brought. They connected me with Jerry Moody, who’s the CEO of @properties Christie’s Lone Star here in Texas, and that’s where that relationship formed.
You mentioned the NAR settlement changes. Have there been any professionalism challenges there?
For the most part, it’s more procedural right now. People are looking at when certain forms should be presented, how to best negotiate. For those agents who were not accustomed to presenting the buyer’s rep agreement, that’s where they’re having the most difficult situations, as far as articulating their value proposition, as well as trying to articulate the procedure and the process of representation in the real estate transaction.
Can you tell me more about that?
Yeah, so let’s just say, you’re a buyer’s agent, and your client wants to put in an offer on a property. Well, some buyers’ agents, what they’re doing is that they’re sending the agreement for compensation before they even present the offer for their buyers — which really goes against your fiduciary to serve your clients first — rather than sending the offer along with the compensation agreement.
They’re trying to secure their own commission before even presenting the offer. That’s not serving your client in the best capacity they can. That’s a situation that I’ve seen happen very recently with all the changes.
So instead of submitting the request for the compensation with the offer, they’re submitting it first? They’re saying, ‘I want you to agree to pay me first’?
Correct.
Have you gotten pushback from agents about not doing that?
No. Realistically now, everything’s negotiable, right? So sellers want to see the big picture and a lot of it too depends on how the commission for the buyer’s agent is really set up. Is it coming through the listing agent, is coming directly from the seller? Here in Texas, you have to use the appropriate form to seek compensation from the party that’s going to compensate the buyer’s agent. Right now, it’s very clunky how agents are seeking or requesting a verification of whether they’re going to receive compensation.
It comes back to, obviously, your buyer’s rep agreement and what the buyer has agreed to pay and what’s been articulated to the buyer. Because if the buyer’s agent is assuring the buyer that they are never gonna have to pay a commission or not gonna have to pay, obviously that’s the wrong information to give. So I think there are still some bad practices that are happening out there.
What do you think it’ll take to change that?
Education. It’s got to be some protocols of practice that have to be put in place. This starts with the broker. The broker is the one who is supervising activities and the one who is training agents and putting the expectation out there in terms of that professionalism. So I think that’s what it’s going to take.
What questions are agents asking you about the changes?
Handling unrepresented transactions. We’re starting to see that increase as well, where buyers are choosing to go to open houses rather than seeking a buyer’s agent to help them. How do you continue serving the seller, but at the same time, help facilitate and service the customer, who’s the unrepresented party. That process is still unclear to a lot of people and the correct process isn’t something that is being taught on a regular basis.
What are agents doing wrong in that situation?
In that situation, you have your fiduciary obligation to the seller. When you have an unrepresented buyer, you can’t write the contract for them. You can write the contract for the seller in terms that are going to be most favorable for your seller, but, for your buyer, you cannot provide an opinion. You can’t provide really any sort of professional guidance that goes against your fiduciary obligation to the seller.
A lot of times agents trying to either double end the deal or just get the deal done, are overlooking the fact that they can’t provide the same level of guidance to an unrepresented buyer as they are to their client.
I’m thinking about what you said about your mission to make an agent less of an asshole in transactions. What I’m getting from you is that you think agents just need a lot more education on ethics and etiquette, is that right?
Ethics, etiquette and the practical implementation of practices. Best practices. Everybody doesn’t get a kick out of going to compliance classes or ethics classes or things like that. Storytelling, learning from case studies, that’s what sticks with people. We’re in situations where there has to be very transparent, open communication, not just with your clients, but also between agents as well.
When you think about the future of real estate, what are you most concerned about?
Unless we raise the level of professionalism, agents will continue to be viewed as a commodity by consumers, where they feel that, first of all, agents aren’t going to earn their commission or their professional fee because they aren’t providing a higher level of services. There’s a possibility that we’re going to see this increase of discount brokerages or flat fee brokerages that will work with buyers for some flat fee, $1,000, but then they’re perpetuating the lack of professionalism.
All they’re doing in that situation is opening doors and maybe writing paperwork. It just creates the agent into a commodity at that point, at least in the consumer’s eyes. So I think there could be watering down of the professionalism in the industry.
When you say a commodity, as opposed to what? What is the opposite of that?
I say commodity like one agent is as good as another. Agent A who is charging me $1,000 to just open doors and write a contract, is just as good as Agent B, who wants me to sign a buyer’s rep agreement for 3 percent. They’re not seeing the additional value of experience, additional value of being connected and networked, having access to maybe private networks, to being an effective negotiator.
I asked you what you’re most concerned about the future of real estate. What are you most excited about?
This gives the industry an opportunity to reset. Everybody has to raise their game. Everybody has to provide a higher level of service so that you are very clear as to the value that you’re bringing to the transaction. In the past, agents have made the job seem too simple, too easy, because they’ve shielded their clients from just how messy a transaction can be in the background negotiation. Now what I’m teaching my agents is really to showcase the complexity, but display how simple you the agent being part of the transaction will get this done as well. Display complexity and showcase simplicity.
How do you think real estate will have changed a year from now?
Hopefully next year we’ll see common practices of how deals get done, how the offers of compensation are handled, what is explained to clients, consumers, as far as what they are paying for the services. At the same time, I think we’re going to see agents who aren’t full-time agents or aren’t agents who are properly trained or in the know that they’re going to be weeded out of this industry.
I just went to the Texas Realtors’ conference about three weeks ago. There’s an anticipated drop in membership, which of course means less dues revenue. But I don’t think a drop in membership is a bad thing. There are a lot of people who shouldn’t be selling real estate who are doing a disservice to their clients and a disservice to the industry.
