Alright y’all, it’s time to tackle the real estate industry’s current legal battles. In this episode we are coming to you live from the news desk to give you a rundown of what is going on, what the potential fallout will be and what you can do about it now to prepare. We aren’t the ones to get overly excited and incite fear in our fellow agents, but we believe you need to know about the “bombshell” lawsuits going to trial soon and what they mean for the industry as a whole.
This chat was surprisingly educational AND fun! Katy takes Alissa through Inman’s first ever commission survey that you get to answer right along with us. We get much closer to understanding what all of the possible implications are and what it means to us. Oh, and Alissa tries to help NAR with their defense. The gentle rumbles of this coming battle have turned into more of a roar as of late and we are here to help you be prepared not scared.
Looking for ways to implement buyer systems after listening to the episode?
Katy’s course, Agent Systems 101 is available NOW through 9/15/23 and has you covered! Check out what some of the more than 1,400 students have to say about the course and get all the details at agentsystems101.com.
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The following is a rough transcript provided by Otter.ai.
No more waiting around. Yeah, this is happening. We
need to know. Okay, and
it didn’t look ya’ll, they could win the case they can lose the case, but I still think to know you, you need to know.
I don’t remember what I said that. But it was obviously the wrong thing. Because if you scroll up, you see the years of rejection. She keeps coming. keeps coming back.
It’s like we’re cutting a wire on a bomb. Yeah. I don’t know what’s gonna happen. Is it gonna go off or not?
Hi, y’all. Welcome to hustle humbly. It’s Alyssa and Katie. And we are two top producing realtors in the Baton Rouge market.
We work for two different companies where we should be competitors. But we have chosen community over competition.
The goal of our podcasts is to encourage you to find your own way in business to stop comparing
yourself and start embracing your strengths. Alyssa, are you ready?
I’m making my papers on the news desk.
We are on the news today. You
can see a list of work last. And we are talking about items in the news. Yeah, literal real estate news, literal news. This is episode number 214.
And today’s AI headline, today’s headline topic right now
buyer brokerage, preparing for changes in the real estate industry.
And we’re going to try to make this as not boring as possible.
I’m so excited about that. I have been doing research for longer than any episode I have ever researched. I have read many many articles. And I am prepared to share with all of you what you need to know.
But I have not prepared at all. I even tried to say let’s not record this today.
I forced her to record it today. With this disclaimer, there are a couple of disclaimers. One, we’re trying to tell you what is going on so that you can be prepared for coming changes. I am not here to tell you exactly the process that you will use if and when these changes occur. Right. Okay, so this is more of background. You just need to know what’s going on in the industry always. But especially this Yes. Because things are crazy. Things are heating up good and good words. Okay. My next disclaimer is we are not lawyers. No, I am not offering any legal advice. However I am about to share with you briefly what is going on and how it could change your business. Yes. Are you prepared? Any other disclaimers for me before we go? No, other than you’re wearing your glasses, and
I’m not very official. If you could just share because I’m kind of coming in. My office has started ending the sales meeting with the sky is falling, the sky is falling with a little prep of how to handle this. Okay, because we now do the podcasts on Tuesdays and Thursdays and I go to the Monday Morning meeting. The sales meeting is usually one that I
skipped because that’s Wednesday, and you’re like I’m all booked Wednesday.
Yes, by that time. I’m like, I’m sorry, I will go to the Monday meeting. But I also know that at some point, instead of just going to sales meeting for the last 20 minutes to hear about this, our office will have a whole class and that’s what I’m holding out for that which is why I’m really feeling out of the I mean I know what’s going on but you weren’t fully prepared. You are in the loop. This
is okay. We’re gonna get to what Connie is doing towards the end. Okay, I have questions for you. So just put a pin in it. Okay, okay, let’s back up. People are like what are we even talking about? heck are you even talking about KB okay. This is from my friends at Inman. You know, Inman is a real estate. Media Company publishes really great. newsletters, I guess twice a week, every day. I don’t know. They’re constantly in my inbox, but this is from Inman, they break it down for us so well. Okay. The industry is confronting a number of legal and regulatory challenges right now. But the bombshell label is usually understood as applying to a pair of class action, antitrust cases called seitzer. Burnett and Merle. I think I’m saying that right spell that Merle is M O.
EHRL. Okay, in seitzer. Burnett and Merle. Yeah,
I’m gonna get you more on this is the group of lawsuits. There’s two separate lawsuits. Okay. Both cases are known by the names of their consumer plaintiffs. Okay, so the plaintiffs are the homeowners who filed them, okay. And they are class action, which means it’s not just one homeowner. It is a whole bunch of them. Okay. Hold please. Will I get back to where my place was? The cases argue, in essence that some of Nash of the National Association of REALTORS rules, including one that requires listing brokers to offer buyer brokers a cut Mission in order to list a property in a realtor affiliated MLS Multiple Listing Service, violate the Sherman Antitrust Act by inflating seller costs.
So they are saying because we make it a requirement to offer buyer’s agent compensation from the listing side that that is a violation
Correct. However, the lawyers for NAR and the other parties are going to argue lots of things, one of which is you can offer a dialer and still get into the MLS, right in most places. So they would argue that $1 is equivalent to zero. Sure. So you really don’t in a way have to Okay, yeah, but I’m not a lawyer. And I’m not arguing the case right now. I’m just telling you what the cases are. Now, let’s go a little deeper. One of the suits known as seitzer. Burnett is scheduled to go on trial. October 16. Okay, okay. You’ll have 2023 That’s right. You’re hearing this if you’re listening to it the day it airs on September 11. So next month, next month. seitzer. Burnett goes on trial. Okay, I’m gonna tell you it covers for MLS markets in Missouri specifically. And as asking for reimbursement hold on to your hat of $1.3 billion in commissions that hundreds of 1000s of sellers paid to buyer’s agents over eight years. Plus potential treble like this is not funny, plus potential treble damages that could raise the total to around $4 billion. Whoa, I will tell you this, of what I have read and let’s just assume that this they when they win their case, this would effectively in potentially bankrupt all of the defendants who include REMAX Keller Williams a couple of other big rheology I think and nor actual NAR, yeah. Okay, so there’s a bunch of big Big Data names Okay, different out on the other suit, which is known as Merle mo, mo e h RL will likely go to trial in the first half of 2024. Okay, it covers 20 MLS markets nationwide, and potentially millions of home sellers, y’all millions of home sellers are asking for reimbursement of an estimated wait for it. He thought the other one was bad 13 point 7 billion billion with a B in damages. And if the courts award treble damages, you’ll I’m not a lawyer. I don’t even know what that means. That figure could go up to $41 billion. And this is all because they want their money back from seller. Hey, the sellers want their money back from feeling like they were forced to pay them to hire the buyer’s agent correct. Now, in a totally completely related but separate situation back in 2020. Hold on. Let’s read the DOJ so the Department of Justice for the entire United States of America has the big right on Friday of August 11. This year, attorneys for the DOJ antitrust division told the appeals court the lower District Court had misrepresented the DOJ letter to the NAR which had given the association almost three years of protection in the face of serious concerns of anti competitive conduct. I don’t know what you just I’m going to tell you I don’t know the DOJ Okay. Had a case open investigating nor the National Association of Realtors in what year 2020. Okay, it was settled. Okay. And that NAR and DOJ they settled? I think this is at the point in time. When we were they started telling you you’re no longer allowed to say buyer’s agents Commission’s are free, right. There were a couple of rules changes or some things that came out of that. But it was settled. And now the DOJ has said, man, we’re coming back to this. Oh, wow. Okay, we’re coming back to this and this is what they said. It is well past time for NARS rules to be assessed on their merits. And the division has an obligation to investigate potential antitrust violations that may cost American homebuyers billions of dollars each year. Okay. So that’s a separate thing from these other two cases. But it is basically coming back into play. All of these things are sort of going to impact each other. Okay. And this is why we’re talking about this, right. Okay. Now, I’m going to cover with you. I know this is a lot do y’all need to take a breather,
take a breather, I’m afraid Do you Any questions on what we’ve covered so far? So I’m afraid of big entities like the IRS, this,
this is your worst nightmare,
the post office,
this is the worst.
This is very scary. So being on our very public Glee, shared platform, if I need to, if we need to edit anything I say out, we can edit you, and we are but here’s why. We’re not lawyers, right? We’re not lawyers, but here’s where I’m confused as a realtor is that I feel as though please tell me we are very transparent in the listing agreement, how the fees are broken up. And if you are not pleased with that, you may not you don’t have to use you don’t have to sign it. You can go be a for sale by owner.
Great news, I’d venture to guess NARS lawyers,
okay. will assert similar arguments. Okay. Okay. So I’m on the right track.
You’re not, you’re not wrong, and they are going to have a well paid for defense because NAR is a huge entity with a lot of money to spend on on lawyers. Okay, so yes, keep up with the train of thought, Okay, I’m not asking you to defend the suits. No, I’m just telling you what they are. And you all they’re happening, they’re going to trial, which means it’s going to be talked about and look whether it goes the way of NAR or it goes the way of the of the plaintiff it’s going to be in the public’s eye to where it might turn open their eyes a little bit more to Commission’s sure right and make them like just in general, maybe it’s going to make them a little more aware. Okay, now I want to cover two things. And this is from an Inman article on August 15 of 2023. The two NAR rules that both sides are fighting over so the DOJ situation these are the actual rules are you ready? The participation rule which requires listing brokers to offer a blanket unilateral offer of compensation to a buyer brokers to buyer brokers in order to submit the listing to the MLS? So we’ve already said this. Okay, so having that goal number that’s number one have to offer something to a buyer broker to be in MLS correct. The second rule the DOJ is worried about so that’s the rule that’s really in all of this, right. Okay. Second Rule, though, is the clear cooperation policy, which requires listing brokers to submit a listing to their realtor affiliated MLS within one business day of marketing the property to the public. So this is really a pocket listing situation. Okay. So that’s another rule Correct? One day? Correct. And our MLS enforces it. Yeah. I thought it was like three days. It’s, it’s one day one, you have one business day. So if you if you if you list something on Friday, you could advertise it all weekend and put it in the MLS on Monday, according to this rule. Okay, okay. But that’s what they do. Every MLS
does have their own rules. So just be sure you’re checking your local market.
Okay. So the end of that part is both of those rules are subject to multiple antitrust lawsuits, which we’ve already talked about. So they’re saying the actual rule is a violation. Government is coming for the rule.
Okay, because they’re saying forcing you to pay to be an offering payment to be in the MLS is a is a prop
is a violation of the weird Sherman Antitrust Act. That’s what the DOJ is talking about y’all. I feel so official and fancy right now.
I actually felt like it would be good for you like one of us to know all of this, and then me to represent the listeners. So
it’s going okay, so yeah, I
think so. Because I can write I can speak on behalf of those of us who are less less educated on it. Yeah. I mean, I have followed the generic version. But this is we’re getting into the nitty we’re in the weeds, y’all why we’re here today, because it’s very important. Y’all should be
in the weeds with me. Yes. You need to know this. This is this is on a hate to know basis. And you need to know we’re going to be on Katie’s level here shortly. Second, okay. And I look, I have been reading these articles for months. So to be fair, I’ve been slowly digesting and I know this is a lot to take in right now. That’s why I tried to break it down into like the real bare bones. That’s
why That’s very helpful. The government is coming after the NAR rules that we have in place. Yeah.
Okay. All right now we’re going to keep going. In the Friday brief. The attorneys for the DOJ so the government stressed that NAR in its own appeal. So the earlier when they settled the deal, right, had not disputed that the government because right now they’re reopening the case, if you will. And I was like, hold up, hold up. You settled this. You said we were all done. And DOJ is like, yeah, you’ve had three years to be done and we’ve decided We never told you we were never coming back to this.
You’ve had three years off, coming back coming back around to reevaluate it’s sort of like a audit kind dare re auditing right? It’s basically
so basically NAR has filed an appeal look ya’ll again I told you this is very low law heavy but NAR filed an appeal if you like crime junkie or any kind of those podcasts affiliates, so we’re getting into okay like the law part of it. Okay, basically NAR has filed an appeal. And the attorneys for the DOJ are responding and they said that the government had properly okay now are saying the government had properly exercised its unqualified right to withdraw from the proposed settlement agreement before it became final and that withdrawal had released the parties from their respective rights and obligations. They are under freeing nor to resume its prior conduct. So okay, fine.
So NARS. like, Wait, you said we were said I was okay. So that was okay.
All right. Now, the agency that’s the DOJ has maintained that neither nor nor the courts should read more into its November 2020 letter than what it says and y’all you can do what you want with it. But I’ll read you the letter. It’s very brief. This was whenever the thing was settled. This letter is to inform you that the antitrust division has closed its investigation into the National Association of Realtors, clear core cooperation policy and participation rule accordingly, nor will have no obligation to respond to Cid numbers blah, blah, blah, and blah, blah, blah, issued on April 12 2019, and June 29 2020, respectively. Here’s the most important part y’all. No inference should be drawn. However, from the division’s decision to close its investigation into these rules, policies or practices not addressed by the consent decree. What does that mean? You’ll know inference means you’re not supposed to assume this means anything other than we’re not asking you to provide this stuff right now. Okay. We’re case closed for a minute.
So there we go. This is later they’re reopening it. This is not
a murder trial. It’s not like if you’ve got if you were acquitted, you’re off forever and you can never be tried for this crime. They’re basically saying, Look, we told you we were done with us at the time, but we’re back we’re back. Okay, so they’re back now what y’all if a lawyer is listening to this and I’m getting it terribly wrong, please send me a message. Because I’m doing literally my best No, I’m doing my best. Okay, so now are you ready for your survey? So before we got on y’all I told her this I was gonna give her a multiple choice test and it’s not a test at all there are no right answers. Are you ready? I don’t know it is gonna I had to give you all that back. Were
like this would be a good one to watch on YouTube. I just your like,
get ready as I get my papers on the on the table. Okay. Here’s the deal. Inman this week as I’m this is in August, as we’re recording this has an an inaugural survey on agent commissions. Okay, so they wanted to ask us our opinion on these questions. And you have the answers. I have the choices. There’s no right answers. I’m gonna give them to you. I know. I just okay. You don’t want me to give? All right. Do you want to read them? Here’s here. Let’s start with an easy one. Choose the option that best describes your occupation. Okay, Agent broker, real estate tech entrepreneur, realtor Association, executive, MLS, executive or other agent. Look, you already got the first one right. Here’s another easy one. How many agents and what is this survey for this question? It’s a survey on agent commissions. Okay. Okay. So Inman is trying to learn from its readers their thoughts on all of what I just talked to you about? Okay. Okay. But they needed a little background. Yes. So question two you can get right, I think, how many agents Does your company have? Oh, Lord, it was one to five, six to 2021 to 50. Or more than 50? Oh, good. More than 50? You got that one? Right. Two big office. Okay. Number three? How many? Y’all answer these in your head with us? Yeah. Okay. Write down your answers in men. Give me a call if you want. We need our data if you need our data. How many agents in your company would you say are aware of the various commission lawsuits? And I’m gonna give you the choices? All most? Half? Less than half? None, or almost none?
I would say half because our broker has been talking about it for a long time. How long? Since last year. Okay. So they’re really in the know. Yeah. And then this last month is when they’re they sent out an email. They’re like very soon. You need to be at sales meeting for the next six weeks. This is very important. Do you
want me to tell you why they did that? Yeah. Because they just assign this trial date at that point in time. So now that we have a date of October 16 exam order one of next year, that’s when they found out the date. We got to prepay. It’s like No more waiting around. Yeah, this is happening. We need to know. Okay, and it didn’t look ya’ll, they could win the case, they could lose the case, but I still need to know who you need to know. Okay. And honestly, I’m fascinated by all of it. It is fast because we don’t need to be afraid we need to be prepared. That’s the point of this episode. We don’t need to be afraid we need to be prepared. Are you ready for your next question? Yes. You might not like this one hunger? How do you think the lawsuits will end? Hold on, I’m gonna give you the choices. The real estate establishment, nor various large companies will win. The consumers suing the real estate establishment will win, or the parties will settle?
What, what? Number one, I believe, based on my limited non attorney knowledge that we will win, because the paperwork is very transparent, and you don’t have to sign it if you don’t want to. Okay,
I think you may be right. I think there are plenty of arguments that would be leaning that way.
Okay. Now, that’s how I feel about the listing agreement. Right. I can see where the NAR rule number one, making it a requirement requirement to offer buyer broker compensation to be in the MLS could be interpreted as like, we’re forcing your hand and so I can see how on the defense, they could say it’s in violation of the Sherman Antitrust Act. But it’s just the MLS is not the end all be all. It’s an A this I’m just speaking my opinion go. It’s just an additional marketing tool. Yeah. If you would like to pay to be a part of that marketing tool. You can it’s not a free tool. Yeah. It you don’t have to use this tool. Now. You can go mark it on your own and not you don’t have to pay it. We’re not requiring that every single person that sells their home is in the MLS, right? That would be a huge violation. Correct. But the fact that all of this is optional, is what I believe Alyssa Jenkins. Like I’m on the debate team. That’s why I believe nor will win. Okay,
next question. Okay. How optimistic are you that NAR and other establishment players in the commission cases will win the lawsuits on a scale of one to five five being the most so you just said they’re going to win? How optimistic are you one to five four? Okay, that’s I think if I
need to come speak No, I’m just kidding. Okay. How
right you’re gonna go to trial how big a deal okay, now get ready. How big a deal are the commission suits on a scale of one to five five being the most consequential like just how big of a deal is this?
I’m I don’t know. I’m gonna say three and a half. It is serious. It’s serious. It is serious. You would say five
I honestly I think I would go for five bucks somewhere in the 4.5 range. Okay, not a choice. All right next up what changes in the industry do you anticipate even before the lawsuits are decided this one I think is fascinating and I’m gonna give you the choice okay.
What changes do I think will take place because of all this going on?
Right or even decided okay, okay. Nothing will change before the lawsuits are decided. We’d like to stick our head in the sand Yeah, nothing will change nothing that’s option one already seeing change right aren’t you hold on Okay, option two more brokers will start requiring buyer agents to use buyer agency agreements. Choice number c NAR will rescind its rule requiring listing brokers to offer a buyer broker’s commission D more MLS is will eliminate the rule requiring that listing brokers offer buyer broker commission making commission sharing optional or E other. I’m just
gonna go with B. I think that before all of this comes to an agreement, we are already going to start seeing people implementing buyer agency agreements
I completely agree with you and I would like to also state for the record in our market that this is one of the weirdest things that I think is from market to market so different. Everyone in every market uses a listing agreement. Yeah, right. I have to have a contract with the seller because guess what they’re paying me right the reason why buyer brokerage agreements have been so optional and willy nilly and in our market, almost non existent is because you never really had to tie down your buyer to say I’m gonna pay you because you knew you were being you were gonna get compensated from that cooperating broker. Okay. Okay, so I can totally see where brokers are going to be like, No, let’s start doing this buyer agreement. I think
now is the great time to break for a quick story,
please. Let’s hear good news, everyone. We’re gonna take a break a break from all
this heaviness. Okay. Oh, heavy to hear about one of my flops. Let’s hear it. So Connie has my broker has always been, you know, she understands that in a perfect world. Would we all have buyer agency agreements? Yes, I agree with that. Does anybody in our market use them? No. Could that cost you a client may now. And here’s the thing when I was I was I tried to prepare a little bit for this episode. But I also didn’t want to get into the nitty gritty because I wanted you to educate me which you are, you’re welcome. But the first thing I list, I found this podcast. And it was a, like, legit person, you know, talking about the buyer broker agreement. And the first thing he said was, I only use them if it’s someone that I really don’t want to work with. Because they they will likely just say I’m not signing that and they leave. And then I don’t have to work with them. So I was like, That’s interesting, because I have always kind of felt that way. I and here’s my story. I feel
like I want you to choose your words carefully from here. And I want to hear the story. Only because do you think that would be a potential like,
like a write like a fair housing violation, right? Like, you can’t tell some people you have to do yes to do this. But it is your business, my business, you can run it however you want. Yes. But if you don’t, if you don’t make everybody sign a buyer agreement, and you only save it for the ones that you don’t want to work with I that is 100%. setting you up for a loss, I think so it’s all or nothing, I agree. Okay, but tell the rest of your story. So I had a girl that I went to grad school with. And we were friends friendly. We were in a project together. We didn’t hang out too much. But we had a lot of classes together. So we were friends on social media, everything’s good. You crossed paths. We crossed paths a lot, a lot. I liked her. Okay. So I’m a newer agent at this point out of grad school, and she messages me and she’s like, Hey, I want to buy a house. Can you help me? And I’m like, Absolutely. I would love to help you. And we get to talking. And I’m like, have you talked to anybody about budget? You know, I’m trying to see where we are in the pre approval process. And she just kind of stopped responding. And so I was like, that’s weird. So I follow up again, and I’m like, Hey, I just wanted to check in and see how I can help you blah, blah, blah, no response. So I try again. And I’m like, Hey, I just wanted to check in. Okay. Finally she’s like, oh, sorry. I ended up buying a house with my aunt. It was like a family member. And I just thought all right, that’s so strange. Yeah, like, okay, but whatever. That’s forward. Same person. Okay, messages me years later, to sell the
house that she bought with the app that she bought with the and not you?
Hey, and I was surprised because I kind of felt a little validated. Like, you know, she kind of rejected me then. But she came back because I handled it. Well. You were like I did. Nice. Yeah. So she’s like, we need to sell this house. And I don’t remember. And so I’m like, I would love to help you. Right. I don’t remember what I said next. But it was obviously the wrong thing. Because next thing you know, she’s ghosting me again, you’re like, This. Sounds familiar. sounds very familiar. And I was treading lightly because of the like, I
don’t want to get ghosted. I don’t want to get ghosted. You did anyway.
I did anyway, no matter what I said, I was trying to even be overly helpful. And then it was like, I don’t remember what happened. Like we sold it for sale by owner or something. Okay, so um, like, they sold it, but not with you. Yeah. Like, I don’t know what happened, okay. Just recently, years later, more years, more years have passed, and I’m sitting with you on a podcast state and I get this message from her. And it’s so funny, because if you scroll up, you see the years of rejection.
She keeps coming back. She
keeps coming back. So I told Katie I was like, I don’t know what to do. This is gonna be she and she’s now wants to buy like a big property with some land and data, all this stuff. So she’s telling me and I’m like, Oh my gosh, I’d be so again. I will be so excited to have help you. I’m talking to Katie about it telling her about how I’ve been ghosted and I’ve never been able to understand what’s going on here. And so I asked, I said, What’s your email address? I will send you some information. And we decided that she would be someone that before you put in a lot of effort with, you would want to make sure you were admit, yeah, I knew she needed to commit, I needed some commitment. I’m not about to drop everything I’m doing to help you if I’m gonna get a rejection Facebook message in a few days, right. And because the market
was so fast at that point, yes, it would have been like a drop everything. Show it.
Yeah. situate your percent. Okay, percent. So I’m like, I’m like, I hate this buyer’s compensation for, you know,
it feels very contracting. It is very
contracting. But I do just so I thought instead of shoving this contract in her face, why don’t we make like a cover letter for it? Yeah. And we called it a buyer agreement. Right. Okay. Sure. Before you start emailing and messaging us, showing you to have a sneak peek. We’re not sharing this right now. No, we may tweak it and share a version of it, depending on how, how all these lawsuits play out. I felt very good about this happy that YouTube can see buyer agreement that I made. Yeah, it is pretty. It’s almost like a resume for buyers. It’s a resume for buyers. And it says, you know, how does working with a realtor work? Like we’re, let’s talk it through? Yeah. Do you have any? No, I don’t think we have. But it also says, My commitment to you like, what
am I going to do? Yeah, I’m
going to do all these things. And I’m like, What are you going to do? Yeah, and then it so it starts, how does it work? My commitment to you, and then your commitment to me, right? You know, like, that’s, it has some of our buyer rules in there. If you use any of our templates, like just make sure that you always give my name. If you go to our open house. I am your realtor and you are my client. We will work together and we will stay loyal to each other. Correct. Okay.
So it’s just it’s written very
kindly. We spent a lot of time on this. We did. And when it was over, I was really proud of yeah, very proud. Yeah. So I emailed it to her. And I got blasted.
She sent you an ugly email.
She sent me an ugly email back, which I disputed. And she said, I feel like every single time I reach out to work with you, you don’t want to work with me. I have never had to sign anything when I was working with a with a realtor as a buyer. So I don’t understand why you would want me to sign something because you
ghosted me twice. I
said. I said, Sally. If you go back, I said, every time you messaged me, if you go back and read our messages, and they’re there, and I just reread them. I reread them every time you have messaged.
Yeah, every time you stabbed me in the back.
Every time you message me, I went back and read them. And if you go do the same, you will see that every time you reached out, I responded with enthusiasm. Yeah, I’m so excited to help you. I’m so excited to work with you. And then I said, What can I help you with now? Yeah. And it was always followed up with days of silence followed by a rejection message. Yeah. What did she say that I said, I take my business very serious. Yeah. And I am. I am a busy realtor. And I am very specific with my clients. And I do a lot for them. Yeah. So if you would like to work with me, this is what I need from you. Okay. But this is the third time I have been excited to work with you. And you. And you have rejected me all the times before, right? She totally changed her tune. What did she say? I don’t remember exactly work with her. I did not work with her. I feel like once you say I need you to sign this. And they say no,
there’s no going back. But she did change her tune. Yes. She did
change her tune. And she was like, well, that first time he had excuses. She had all these excuses. And I said I understand she said I never thought about how that looked on my end. No doubt. I said well, I’m just letting you know. Don’t say it was me. Right? Because I was always I was just honest. I said I always had my feelings a little bit hurt after I talked to you. Yeah. And I always felt like maybe I wasn’t good enough for you. She wasn’t good. So this time around third time’s a charm. I thought I better protect myself and stand your ground and you obviously know a lot of realtors because you have done some real estate transactions and I have never been used So I said, Listen, I’m sorry, I can’t help you. She had already told me for what she was looking out for. I said, if I happen to come across something, I will keep you in mind. But, you know, I’m just not making any promises, because I’m here to work for my clients. Yeah. And she was like, I really appreciate that. Thank you so much. I’m sorry, this didn’t work out. But I was like, That escalated very quickly.
Right, very quick. But the good news is what came out of it was this really fabulous buyer agreement cover letter? Yeah.
I mean, it was really nice. It’s really nice. I’m very pleased with how it looks. So I have a great track record of working. It’s got a 100% fail rate. Point. So
if y’all want to get your freebie, no, no, no, no, no freebie. No.
Do not email us asking for this. But in the event that this is we are ruled differently if things change, things change, and we have a wish to a 100% buyer compensation agreement.
Maybe at that time, then we’ll talk we’ll talk. Okay. Are you ready to get back into the survey back to the survey?
What is it back to our regularly scheduled programming?
That’s right. We’re very newsy since we’ve been at this desk, yes, we like this desk, we really do. Okay. Now, what do you see as the single biggest likely consequence of the lawsuits, okay, here are your choices a northern the franchisors will have to pay a lot of money but survive be northern the franchisors will go bankrupt. See commission sharing will become optional or banned outright. D consumers will no longer use buyer agents E by E Yep. buyer agent Commission’s will rise oh wait there might be there might be an F oh my god there’s an F and F buyer agent Commission’s will fall look at cog G NAR and other industry groups will allow me to have buyer agent Commission’s rolled into the mortgage What number is
that? Letter A, B, C, D. G. And that’s they will lobby for it to be rolled in?
Well, yeah, there were so many choices and then ah, more brokers will charge what I’m sorry more brokers will change from a commission based model to a flat fee or ala carte model.
Okay, read the original question and I will tell you my answers. What do
you see is the single biggest likely consequence of the lawsuits.
I think, Katie, the single biggest consequence will be a nor will have to pay a lot of money but read it again. We’ll survive, but we will survive. Okay, right. Okay. I also think that F if this all passes, I think that buyer agent Commission’s will fall i do i less I think if we lose this lawsuit, as an industry, and I have to start getting the buyer to agree and you have to start getting buyers to agree, I do think that buyer agent Commission’s will drop, okay. I also think that gee that we are going to have to find a way for it to be rolled into the mortgage right? Because buyers to pay their downpayment to pay their closing costs and to pay their Realtors is a huge chunk. Yeah. And we’re not
even going to get into what does it mean for home values? When sellers stop paying kind of both sides? What is what does it mean? Yeah, should
have values go
down by some amount, right? I mean, it’s interesting. So in theory, if home values are what they are, and then the seller is not paying that side, there should be a little bit of room but then if it’s rolled
into the mortgage, all these buyers are starting off upside down. Correct? Right. So that’s No they’re
not. No, they’re not because we’re still talking about if it happened today, and this house is worth 300,000. But now the seller is not paying that part. The buyers paying it’s really semantics at that point.
Yeah, we’re milling it over, it’s
still in the total cost of the house if it’s being rolled into the mortgage and a house is still worth that because trust me, the lender is going to make sure it appraises for that. Right, right. Okay. Question number nine. If NAR and the franchisors lose, how soon might you have to change your business practices? Here are your choices. I’m changing them now. Before it even happened right within the next three to six months after the after the lawsuit within the next one to three years and then the law As choices and four or more years, three to six months,
like I think that if the if we lose, the changes are going to go into effect immediately. Okay,
I voted the one to three years, okay? Because I think a lot of times with something as big as this, they there’s gotta be some transitional period or
they give you that I don’t have a clue or are they like, well, you’re charging so you’re going to real estate jail?
I don’t know. I don’t know. So that’s the story. Okay. Now, number 10. If you’re a broker, what is the single biggest change you’re making now to prepare for the lawsuit rulings? And this is where
and if your broker hasn’t mentioned this at all, I’m just going to leave that there. Just just you should know about some of this.
Okay. Here are your choices. You ready? A, as a broker, if you were a broker? To answer this as a broker, I’m considering requiring my buyer agents to have their buyer sign a buyer agency agreement. Okay. B. I’ve consulted with legal counsel about the possible impact of the lawsuits on my brokerage. See, I’ve reached out to my insurance company to check if expenses related to antitrust lawsuits are covered.
That’s you should write I’ve sent
my agents information detailing the lawsuits and their possible impact, ie, I’m not making any changes before I know how the cases will end. F is other four. That’s the only supposed to pick one of these. Well, g was not applicable. If you weren’t a broker you didn’t answer. But for the sake of our podcast, if you were Umbro. Hi Kathy,
if you’re a broker, you at least need to de I’ve sent my agents information detailing the lawsuits and their possible impact their minimum, they need to at least know what’s going on. If
they didn’t, and they’re listening to this show. They sure know now,
I don’t think B and C is a bad idea consulting with legal counsel about the possible impact it could have on your brokerage. Yes to kind of understand. I also see reaching out to your insurance to say if we get sued in something involving this antitrust lawsuit. What does that look like? Do I need to do something else?
Yeah, I mean, crazy look, and not every brokerage is is listed in these lawsuits. It’s specific. Weird. REMAX Keller Williams, we need the ology there’s four or five. Okay. Okay. Next question. Are the buyer agents in your company required to have clients sign buyer agency agreements? Yes, no, or not applicable.
And you know, it’s funny in my office, we don’t really have teams. So we don’t have buyer’s agents. Everybody just everyone is a buyer’s agent. But to answer the question, no, we do not use a buyer’s agency agreement. Yeah.
I’ve never been in an office that did. Okay. Okay. 12. Do I love this survey? It made me think about all the this is helpful. Okay. It’s very helpful. All right. Do you train the listing agents in your company to tell sellers that the amount of commission they offer buyer’s agents can affect whether those agents show the home? So do you say to set like, does this is a we’re asking brokers, you don’t have to answer this. You’re you’re in a you’re not a broker. But just just a little thing to think about y’all. If if the broker is training eight listing agents to say that the commission they offer the buyer’s agents can affect whether or not they show the home and the answers were? Yes, no, I don’t discuss this with them. No, I specifically trained them not to do this and not applicable. I’m not going to make you answer.
It does make you think, though, like, sometimes if the listing sits and you offer a bonus, like you’re offering more monetary compensation to try to get those showing it disturbing. When you start to dig into that thought process. It is when you really think because you’re like each that does make it sound like Yeah, even though I think not I think realtors are covered because of our listing agreement and how it’s broken out. And it’s a choice, because I believe that doesn’t mean that this hasn’t made me think about about it as a whole. Like this is a good point.
I mean, I have I have said to a seller in the past. Well, you have to be careful what you’re offering on the buyer side because there are bad agents out there that will look at that. I never looked at that. Yeah, and said I wouldn’t show a buyer.
So another interesting thing on this topic when I was doing some research on using a buyer brokerage agreement, it said that it will not work if it is delivered in fear out of a fear no sample, you can’t tell your buyer. Listen, if you don’t sign this, you know, I can’t help you at all right? If you present if you present it that way. Yeah, it won’t work because you’re you’re trying to scare them into signing it. Hmm. Same thing on the flip side. Well, Mr. Seller, if you’re not paying enough, we’re just not going to be able to sell you. That’s a fear tag. That’s a fear tactic. Well, it’s just something to think about. Okay.
Next up, if Nora and the other defendants lose, how will that affect your business income? My business will make less money, my business will make more money, my business will make about the same amount of money. I just don’t know. I don’t know, either. I said my business will make about the same amount of money. I don’t think I’ll make more money. I have a thought process where I do think it will. Yeah, if you’re a heavy listing agent? Yes.
I know. I don’t know. There may be because you Yeah. But we’re not going to get into that. But look, if you’re a buyer’s agent, I 100% Thank you. But your business could make less money. Yes, yes. 100%. But it’s kind of a Biden. Yeah, we’re both pretty. I’m definitely like 6040 60%, listing 40% buyers? I mean, it’s just something for everyone to think much more nervous. If you were buyers. Yeah, heavy, heavy chairs. Okay,
next, if the defendants lose the defendants being nor do you anticipate the number of agents in your company changing, the number of agents will rise, the number of agents will decline, the number of agents will stay about the same?
I do not think the number will rise. No, we don’t have a lot of part time agents in my office specifically. So I think we would probably stay the same for a minute unless some people decided to early retire. Like if this is going to change how real estate is done. And you have to change everything you’ve ever known. And you were close to retirement, you might just might just choose COVID got a lot of the teachers to retire. Right, right. So I think that as a whole for the real estate industry, there would be less realtors.
I agree. I’m brought you some interesting information. We’re taking a break from our opinion poll. Okay, and we’re gonna learn that the number of Realtors grew by more than 156,000 in the combined years of 2020 and 2021. Yes, according to Nar and peaked at a record high record high that most Realtors ever have 1.6 million in October of 2022. Okay, just a whole herd of y’all out there. There has been a decrease of about 74,000 members in the five months since October peak. So this they don’t, it wasn’t current to today, it’s probably gone even lower. But November, December, January through March, this is through March 74,000. Left.
it’s a big number. Now, this was the this was a stat I thought was disturbing. And we’ve all heard it maybe in fact, there were more than twice as many realtors in March 2023, y’all, and that’s after 74,000 of them left. And there were twice as many realtors in March of 2023 as active homes listed on the market, a total of 1.5 million agents compared with just 563,000 houses.
Wow, that is really interesting.
Yeah, you’ll if you want to continue in this career, you better be good. That’s yeah, that’s what’s happening here. That’s what’s happening here. Okay, so for context, so for anyone hearing, y’all I’ve been here a minute since 2005. So I’ve seen it a seen the bad market for context in 2006 alone. So 2006 week before the bubble burst. Okay, right. We’re going up, up up. Everyone can buy a house, you don’t even have to have a job. You can get yourself a house. Okay, there’ll be like you want a house. Fine. There you go. For context in 2006 alone, NAR added nearly 100,000 members and reached a peak of roughly 1.4 million by early 2012. So after the bust, after the bubble burst membership had plummeted to 964,000. Wow. Now, I mean, that’s over a six year span. So it was peaked at 1.4. And after the bust, this isn’t we’re not having a bubble bursts. So to be fair, but we are having an industry shake up if you will,
possible you know what I find interesting about the set of the number of real let’s let’s use even numbers, the number of Realtors grew by more than 150,000 during COVID. But then once COVID was over 75,000 left, so half left half of that number. So it’s like what is the stat? How many aged 85% By Year Three Right? Right. So this is accurate ferry 50% did not survive their first two years.
Yeah, and I would be curious to see the brand new agents what that fail rate is but because the market has gone in such a different direction, right? Yeah. And we’ll know in a year or two all right, you’re back we’re back to the survey and we’ll try to speed you along okay. What kind of organizations do you think will be most affected by the Commission lawsuits the real here I’ll send your data realtor Association multiple listing services brokerage and franchisor real estate technology companies or other multiple listing services would be the most effective at a commission the last wave so maybe realtor realtor Association? I don’t know I honestly it doesn’t say like the realtor owner Right. Which would be brokerage maybe because your broker’s the one?
Yeah, I guess the brokerages would be most affected. And then the multiple the MLS services, I don’t know like are if we can’t really use them, you
know, what I thought was funny about real estate, real estate tech company being an option? I mean, are we talking about like the big bed Z, like, it’s gonna be harder to sell all these sweet buyers agents leads because they gotta get have to then go out there and convince these people to pay them.
Right. It’s not just about opening a door for buyer leads you paid for little it’s going to be there’s going to be a few extra steps to meet compliance.
Okay, so just something to think about. This is all things to think about. Okay. Have you consulted with an attorney about the possible impact of the lawsuits on your business?
No. And I don’t plan to great. No, that was one of the choices. It says yes, no, but I plan to No, and I don’t plan to I don’t know, I don’t plan contacting an attorney. At this time. I’ll
say for the record, this is why I’m not a broker. It’s moments like this was a rough just a sad little thing.
I feel like if I was thinking about being a broker, this would make me sit tight take up to
take a beat. Okay, in 2023 How many hours have you spent on training coaching and are planning efforts in anticipation of the commission lawsuits triggering changes in the industry, zero hours, one to five hours, five to 20 hours 20 to 50 hours or more than 50 hours,
I would say one to five. However, my disclaimer is that my office is offering more I just have not participated just yet
with the amount of articles I’ve read I’m going to give me the five to 20 range now 100%
I very knowledgeable about this right now.
I don’t know why you would need to go above 20 hours of this but I guess if you’re trying to educate yourself on how to deal with it, then yes, that’s gonna take some time but just learning about it. Whatever. And good news if you’re here and listening you’re about to be at your one hour mark.
Oh, good. Here not in zero we’re gonna have one hour of education on this topic if you had zero prior whether
you wanted to or not. Yes. Okay. Has your local realtor association or MLS reached out to you to inform you about the lawsuits
has cheaper? I don’t think so. I don’t think I’ve really gotten emails from our so
it was a yes no or I don’t remember a list is going I don’t remember if they did I don’t remember I think no, yeah, my office I read most of them. Okay. If you’re an MLS executive, what is the most significant action or change you’re making now to prepare for the lawsuit rulings? This was interesting. I’m considering making the offer of compensation up optional in my MLS. I’m considering requiring buyer agents subscribers to have their buyers signed buyer agency agreements, so hard to say this stuff like you have to submit them Can I guess? I don’t know. Like, just like, you have to have a listing agreement to put a listing in. Oh, you have to have a buyer agreement to wow, okay. Okay. I’ve consulted with legal counsel about the possible impact of the lawsuit on my MLS.
That’s what I would be doing right. Probably all I’d be doing right now. Yeah, I’ve
reached out to my insurance company to check if their expenses related to the lawsuits. Okay. I’ve sent my subscribers information detailing the lawsuits and their possible impact. I’m not making any changes before I know how the cases will end. I guess that’s what a lot of people are doing. I’m not making any changes, but I know how this is gonna get you. I don’t have time for this and I don’t care. And I think that is wrong. Okay, number 20. How big of an impact do you think a loss by NAR and other defendants would have on the real estate technology landscape on a scale of one to five? With five being the worst? If
we lose? I think it would be a four or five.
And that’s real estate tech companies. Right. Okay. I love it. I tend to agree. How do you think the commission lawsuits might impact the amount of resources such as venture capital that are invested in developing and building real estate technology?
I don’t know. You’re like, that’s above my,
I don’t know. Okay, I’m gonna read the choices just so everyone will know them. I think the lawsuits will lead to more investment in real estate tech. I don’t believe that for a second.
It could if they’re going to come up with they’re going to try to come up with a new creative way to market your listings. Now that They’ve squashed one marketing platform, which is the MLS MLS
okay, maybe so you’re right. I think the lawsuits will lead to less investment or I don’t think the lawsuits will have an impact on investment in real estate technology. Okay, we’re moving on to my questions. Good job you succeeded and Pat. But look, I thought that that survey made me think that was that survive the angles and so that we can all understand why is this even being talked about? Right? Those are all the possible kind of impacts? Now, tell us what Connie is doing to prepare? Well, our
our brokerage is dedicating the sales meeting. It was all through the month of August to talk about it. And then I think, well, we’re always getting updates on if there was something in the news. What did they say what happened? I think they just don’t want this to be a surprise. Yeah, you don’t want this to be a surprise. And then when it gets closer, there will be classes dedicated to just this topic, agree. But it’s hard to know what they’re teaching until we know what the outcome is. I agree. But I would bet that Connie has like a blue folder and a green folder. And like, Whatever way this goes, she’s like, I’m ready. I’m ready. She’s
always ready. We
got to pull the right folder.
IE, it’s like we’re cutting. It’s like we’re cutting a wire on a ball. Yeah. Yes. I don’t know what’s gonna happen. Is it gonna go off or not? Okay, I do think that now, if you want to be prepared, whether this goes one way or the other, I think it’s time to start considering a buyer brokerage agreement, and how you would implement that into your business. And it probably like you just said, would be easier to start using it now before you had to. Because you can kind of feel out the situation and get into your groove and like learn
what you say, right? How you present it in a positive light, how you sell it, right?
Like get comfortable with it the only positive to waiting, then when everyone has to do it at least it wouldn’t be like your buyer saw it from you and said no, and went to another person. And they didn’t have to once this required, everyone’s if they want to use a realtor to buy a house. Everyone’s gonna have to sign one. Right? Right. Okay, so I think this is when we need to really talk about the importance of your buyer presentation. Like, how do you intake a buyer? What do you talk about? What happens after that? Is it a zoom? Is it an in person meet up at the coffee shop? Do you give us you know, showing to me like where are you doing your? Do you even have a buyer presentation? I mean, everyone has a listing presentation, or some like steps that they go through? Is the buyer calling you and you’re like, I’ll be at the house in five minutes. Right? And you show it off? There? Yeah, you’re gonna need something, because you’re not going to be able to show up and start shoving this buyer agreement in people’s faces if you didn’t, if you don’t have any presentation, right? Okay. So I think that it’ll end up if it goes through, it’ll be they’re going to interview you just like they interview you for listings, people are going to start interviewing you to be a buyer’s agent,
they’re gonna care a lot more now that they’re hiring someone in pain, you’re
gonna want to know what you’re doing. Okay. And I think you’re gonna have to show your value, if you’re going to be asking people to compensate you for that job. Yeah, yeah. Right, you’re
not just a door opener, and you’re getting your value.
And that right there, what you just said, is something we’re all going to have to overcome, because there are plenty of people in the public that think you’re just opening doors, and you’re gonna be why don’t I pay you to do that? And I don’t have to, because that’s what’s going to happen. They won’t, not that they have to now. But it’s interesting. So I do think your cover letter was a really good start. Thank you, we’re starting. I also would like to say that I feel like my buyer folder has me set up completely for this. If I wanted to simply add in the back of the folder, the buyer agreement, I would just go through it as normal, do my normal presentation. At the end, I’d be like, if this sounds like how you’d like to work. And if you want to live up to these things. And I’m going to do these things. Sign here. This is what you pay. And this is where we Yeah. So I think that the buyer folder is huge. I have that and everything that I do in mind and Agent systems, which luckily people can get this
week. Oh, good. Yeah, open right now, right now off right now. So
if you want to see what I do, it’s all in their resume. I think you’re gonna need a resume. That’s for buyers. So just everything you’ve ever done for a seller, you’re gonna have to start doing for a buyer. Yep. And the other problem is, if you’ve always been a buyer’s agent, and you don’t know what it looks like to be a listing agent, it’s time to learn,
right? You can’t just survive on buyers. No, you need to be a listing agent as well. Yeah,
not if this happens. Yeah. Again, being able to articulate your value. I think it would be good to go back to that episode we did on I think it’s for sale by owner. And it’s speaking to your value value, isn’t that well, we’ll put in the show notes. Okay. That one is really helpful to give you some ideas of what to say. Yep. And then I think that like on your sheet, you have a list of commitments to the buyers like, let’s it’s time to make a list. What are you providing to your buyers? You’re not just opening doors, what are you providing? And then please remember that giving advice helping people to decipher data. Facilitating contract to close are far more important than you finding someone a house. So if people start talking to you about, well, I feel my own house or I don’t need you to open the door. Advice data in facilitating contracts are close to me or where you really earn your money.
Right. Right. Yeah. Okay.
I have one last thing. Okay. I think this is a somewhat unpopular opinion. And I have always done it this way, or mostly done it this way. I give a free showing. I qualify my buyers on the phone, I make sure they’re not serial killers to the best of my ability, and I make sure they’re pre approved. But I’m not going to force them to come to my office and have a one hour presentation about why you should work with me. I do think that it is easier to get a buyer to agree to go to a house than it is to get the new rego to your office. Sure, or a coffee shop. Yeah, or, or whatever. So in the market right now, where there not as many buyers and it’s a little tougher, and we can’t afford to lose someone. I want you to know you can still do a buyer presentation once you have them in that house,
right like now that you have them in there. And you have shown it without your folder on the kitchen counter. I have gone through everything every time I build it. That’s what I do
that perfect. The nice part of that to me is they’ve also seen how you work yeah, what is this gonna look like? Did you show up on time? How did you show the house? What
do you show up on time?
I might not. But we’ll see. You know, but the point is, you’re you did it? Yeah. And then they maybe it’s a little easier to be like No, do you want to continue with me? This is how it goes. Or like, you know, if you want to continue, I’ll continue your search. But this is where you start. I think that’s great advice. sign the dotted line. Okay. Do you have any other thoughts on this topic? This has been a lot.
This is great. You enjoyed it. Okay. You want me to read our text?
I think you should read so much information today. And
that looks like a long one. This is your toes go for it. Hey, I also just wanted to feel newsy. You know, you shake the papers on the desk. Okay. This is from Kelly chemic in Pocatello, Idaho. Yeah girl, Idaho, to Jade Robinson. I would like to test my realtor friend Jade Robinson. She has been licensed for a few years and has done an amazing job building up her own solo business after leaving a team. We used to be in the same brokerage and now we’re not but I just want her to know that she is killing it and doing an amazing job. And I’m always going to be her biggest fan below that she is the type of person who is constantly improving herself and she always wants to give her clients an amazing experience. She won’t have any trouble with no trouble here. I introduced her to your podcast, and I love it and she loves it when she posts screenshots of which episode she’s listening to love it. I can really tell that she has overcome a ton of challenges. And still she persists I’m proud of you Jade Keep up the good work.
Oh man. Cheers Ajay. Thank you so much Kelly. Kelly. That was so Jade sounds awesome. She does. You guys. Just don’t be afraid. Be prepared. Yeah, my tagline. Don’t be afraid. Be prepared. And remember agent systems out there for you if you need some help. Okay, bye, guys. Bye.
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