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Never let a good crisis go to waste. That seems to be the message of a new report out from real estate consulting firm T3 Sixty, which released a sequel to its influential “DANGER Report” on Wednesday, months earlier than planned.
“The Opportunity Report” lays out 20 key opportunities for the real estate industry in the wake of a historic antitrust settlement by the National Association of Realtors and its attendant changes to business practices and the U.S. commission structure.
“It will take time to determine whether recent lawsuits will truly save consumers billions or simply cause significant disruptions to the real estate industry, with attorneys reaping fees without delivering substantial consumer savings,” the 114-page report says.
“However, these lawsuits could act as a catalyst for industry-wide change — prompting a re-engineering of the business model, improving efficiency, raising standards, increasing transparency, and adopting new best practices. This is a critical moment for transformation.”
The report calls for higher licensing standards for agents and for agents and brokers to embrace the decoupling of commissions, position themselves as trusted advisors and to ethically adopt artificial intelligence to make the buying and selling process more efficient.
“This pivotal moment offers a clear opportunity for brokerages to reaffirm their value to both agents and consumers,” the report says.
“Doing so will require strategic thinking, bold vision, and decisive action. But many brokerages still rely on outdated models that struggle to compete in today’s rapidly evolving business and technology landscape. Failure to proactively disrupt their own models may result in significant external disruption between 2025 and 2030.”
The report also takes organized real estate to task. It calls for multiple listing services and Realtor associations to divorce so that MLSs are no longer subject to Realtor rules and bureaucracy and for both types of trade groups to consolidate so that there are fewer of them.
“Associations should focus on their core missions — ethics, political advocacy, and education — while MLSs should concentrate on providing extensive, data-driven value to brokers and agents,” the report says.
“To be competitive in today’s real estate landscape, MLS organizations must operate independently, free from the limitations and political influence imposed by Realtor associations,” the report adds.
“This transformation would meet current market demands and position MLSs as indispensable resources in the industry. Furthermore, as many regulators may not fully comprehend the implications of the recent settlement agreements, MLSs should focus on ensuring that consumer protection and transparency are fully recognized and understood.”
The report also advises NAR to build back the trust of its members by making political advocacy its central mission; sunsetting the three-way agreement between the national, state and local Realtor associations; and reforming its governance structure.
“Optional membership across all association levels will create a healthier, more committed, and transparent environment, where associations become more relevant and responsive to their members,” the report says.
“This marks a significant shift in association thinking, which has traditionally focused on headcount. It will require a reconfiguration of the Realtor structure, value proposition, and operational model.
“The Realtor ecosystem plays a critical role in a thriving industry, and by streamlining and focusing the responsibilities of each layer, consumers, brokers, and agents will benefit from more agile and dynamic services.”
The report mentions the current hot-button debate surrounding NAR’s Clear Cooperation Policy, which requires listing brokers to submit listings to Realtor-affiliated MLSs within one business day of publicly marketing them, but does not take a position. Rather, the report calls for NAR to make a decision on the policy and then work to unite the industry behind that decision.
“Supporters of the CCP typically focus on homebuyers, while those advocating for its removal emphasize the interests of home sellers,” the report says.
“The larger opportunity for the industry lies in uniting to ensure that consumers, brokers, and agents continue to have access to transparent real estate marketplaces, which underpins the dynamic U.S. real estate industry and is envied worldwide.”
The Opportunity Report is sponsored by Homes.com, whose parent company is real estate giant CoStar.
Andy Florance | Credit: CoStar Group
“The Opportunity Report, like the DANGER Report before it, is a valuable asset for navigating the changes coming to the real estate industry,” said CoStar founder and CEO Andy Florance, in a statement.
“Our sponsorship of this report reflects our belief that new business models can and will emerge from these crossroads. Homes.com is poised to complement these new models, and we are excited to work with our partners in the industry to deliver even more for our customers.”
Asked whether CoStar had any editorial influence on the report and whether the company had any say in its content or if it saw the report before it was finalized, T3 Sixty spokesperson Cynthia Nowak told Inman, “Homes.com sponsored the report to make it available to the industry at no cost. They did not have editorial/content influence on the report.”
In May 2015, NAR released its “DANGER Report” detailing 50 threats, risks and challenges the real estate industry was facing at the time and would face in the near future.
NAR commissioned the 164-page report from Stefan Swanepoel, T360’s executive chairman and author of both reports, who conducted extensive research to put it together, including interviews with 70 notables inside and outside the industry and a survey that garnered nearly 8,000 responses.
Among the top 10 threats listed in the report was: “Commissions spiral downward: A variety of powerful forces exert significant downward pressure on real estate commissions.” The report stressed that the U.S. real estate market may be susceptible to a “gradual downward slide or a realignment of fees as charged in other countries in the world.”
Because of this, the DANGER Report was cited in a major commission case known as Sitzer | Burnett and Swanepoel himself was called to the stand at that case’s trial in October.
The Opportunity Report offers an evaluation of the DANGER Report’s accuracy as assessed by Open AI’s ChatGPT, which found the DANGER Report’s predictions “remarkably prescient.”
Jack Miller | Credit: T3 Sixty
“It’s an AI tool, so we can debate the use of it, but it overall gave the report an 83 [percent] accuracy rating as to what we had in the DANGER report that actually came to pass,” T3 Sixty President and CEO Jack Miller said in a webinar Tuesday.
“Things like regulatory action, it gave that a 100 percent. Things like agents that were less skilled causing a negative impact on the industry, which it gave it a positive rating for that.”
“That report is a roadmap for professionals in the industry to make changes to their business,” he added.
The Opportunity Report, like its predecessor, draws on one-on-one interviews with industry leaders. The 51 leaders interviewed are named at the end of the report and include not just Florance, but also other notables such as Gino Blefari, president and CEO of HomeServices of America; James Dwiggins, co-founder and CEO of NextHome; Damian Eales, CEO of Move Inc.; real estate coach Tom Ferry; real estate consultants Rob Hahn, Greg Robertson and Brian Boero; Keller Williams co-founder Gary Keller; and Zillow exec Errol Samuelson.
“Artificial intelligence, business models, the relationship with the consumer, the structure of organized real estate, the CCP. Every major topic was covered in that report because it was on the minds of 50 of the smartest people in the industry,” Miller said.
Here are the 20 key opportunities facing the industry, according to the report:
- Decouple buyer and seller agent’s compensation
- Establish best practices for buyer services
- Enhance credibility with the consumer
- Elevate agents: A new perspective on their role
- Digitize the real estate transaction with AI
- Thrive amid commission compression
- Reinvent the brokerage model for a new era
- Harness the power of mergers
- Maximize the strength of teams
- Drive market transparency: The Clear Cooperation path forward
- Separate MLS organizations from Realtor associations
- Cultivate the future of real estate with a modern new professional
- Maximizing value through consolidated MLSs
- Rebuilding trust: A strategy to re-engage NAR members
- Evolving beyond the three-way agreement
- Realtor associations must streamline and unite
- Reimagine what Realtor association leadership means
- Prioritize advocacy as NAR’s central mission
- Enhance professionalism with strong licensing requirements
- Make homeownership an affordable dream again
