Real Estate Is Changing - And We're Here For It
Have you heard about the recent National Association of Realtors settlement agreement?
If you follow major news outlets, chances are that you’ve heard about the bombshell $418M proposed settlement to resolve litigations brought on behalf of home sellers related to broker commissions.
Characterized as “the real estate industry’s biggest shake up of the past 100 years." The proposed settlement and subsequent filings (as copycat lawsuits continue to be filed) will have massive ramifications for the housing industry.
As noted by Debra Kamin, real estate reporter for the New York Times, “What’s likely to happen is the entire structure of how we buy and sell homes is going to shift, and a new model for compensating real estate agents is probably going to emerge.”
Here at guerilla realty, we’re here for it. In fact, outdated industry practices are what drove us to go indie and launch a unique brokerage ten years ago in 2014. We are also members of the National Association of Realtors, so while we think it’s time for real estate to modernize, we don’t think the flaws stem from our trade association.
The problems stem from two places; first, the bar of entry into the real estate profession is too low. Second, there are corporate practices in-place at some of the large brokerages and real estate technology companies that don’t do enough to protect consumers.
I’ve heard thousands of agents may leave the industry, and frankly that sounds good to me. I’ve heard the average commission will be coming down, and if that makes housing more affordable, that’s also good in my book. It’s been a challenging year in real estate. Interest rates were raised 10+ times last year and desirable inventory sunk to new lows. Real estate agents were feeling the squeeze well before the announcement of the NAR settlement.
I know my work matters.
On my best days, it’s life changing work for my clients. Measured over time, the right advice has led my clients to build equity in their homes in a way that no other investment could deliver. I’ve gotten houses sold for top dollar in creative ways that others may have overlooked. I’ve resolved complicated disputes between buyers and sellers with a win-win attitude. I’ve offered emotional support to clients dealing with the loss of loved ones, financial hardships, and unexpected circumstances. I do it all with great terms for my clients, and to this day I’ve never charged any administrative fees.
I’d be the first one to tell you, a real estate agent is not always needed. Back in 2002 I listed my home for sale with two different prominent local agents who could not get the property sold. In the third round, I decided to proceed as a For-Sale-By-Owner, and with some innovative marketing, my partner and I managed to get the house sold by ourselves in one weekend. I knew then, and I know now, not all agents are worth it.
We’ll continue to update you on the industry changes as they take shape this summer. In the meanwhile, we’ll be glad to discuss the changes as they apply to your unique circumstances. Looking ahead, we anticipate rolling out more flat-rate services in addition to our traditional full-service practice.
What’s next? We recommend not listening to the industry voices saying nothing is changing or that the media has it “all wrong”. (They don’t) We will also continue to recommend hiring a qualified real estate professional, especially if you are a first-time homebuyer or moving into an unfamiliar market. Does that professional need to be a Realtor? No. It could be a real estate attorney or a title company. It will depend on the level of service you require.
Last, be careful of all the new technology and AI firms out there trying to capitalize on this settlement lawsuit. They may be coaching you in a direction that’s just meant for their profits and not your benefit. If we didn’t care about our clients so much, we’d likely show bigger profits. Hopefully there is a thinning of the herd, and we can simply get more market share. To those of you reading this who think all I do is “open doors and make big commissions” all I can say is I wish! Real estate is a 7 day a week job with no guaranteed income.
Please continue to explore your options before you make the big financial decision to buy or sell a home. The loudest voices are rarely the ones you should listen to. We’d be glad to offer our expertise for your consideration.
*and now, a disclaimer, the thoughts and opinions expressed are not necessarily the views of the National Association of Realtors, Maryland Realtors, or the Greater Baltimore Board of Realtors of which we are members.