A Wild Week in Real Estate
This last week is probably the wildest week I’ve ever seen in my 40+ years in the business. The Sitzer Burnett verdict came in at $5.36 billion against NAR and three of the industry’s top franchises who elected to go to court rather than settle like Anywhere (Realogy) and RE/MAX did.
Two days later NAR CEO Bob Goldberg stepped down and Nykia Wright, who is a crisis management specialist and took the Chicago Tribune through bankruptcy without having to lay off a single employee, was appointed as NAR’s
Interim CEO.
Because of the importance of what is happening right now, we are making all my articles on these the topics available to all RealClues subscribers. Consequently, today’s interview with James Dwiggins will be available both as a video as well as in our REC Radio format. If you’re not yet a subscriber to RealClues, click here to sign up.
Second, depending on what Inman decides to do with three additional articles I will be submitting this week, you may be getting one and possibly even two additional editions of RealClues this week. If you’re a NAR member or especially if you’re a member of the NAR Board of Directors and are going to Anaheim, please read these before you leave—it’s extremely important that you know exactly what is happening.
Sitzer-Burnett Trial Wraps Up This Week—What’s Ahead?
This week the Burnett Sitzer trial wraps up. The litigation seeks damages because sellers were forced to pay a commission to buyer’s agents, even though those agents were representing the best interests of the buyer, not the sellers. It also alleges that NAR and the major firms engaged in a conspiracy to keep commissions artificially high.
A lot of the big names in the industry have testified. It remains to be seen how the jury decides. Anywhere and RE/MAX have already settled. What does seem to be guaranteed is that the losing side will appeal, so it may be a very long time before this is finally resolved.
Nevertheless, due to Anywhere and RE/MAX settlements and the changes they will necessitate (buyer’s agents having to negotiate their own commissions with their buyer or the seller) plus NAR deciding that you can post a “zero”
percent commission to the buyer and still have your listing appear in the MLS, the number one thing you need to do over the holidays is to sign up for a course on how to become a buyer’s agent where you will negotiate your commission with your buyer. The best place to obtain this information is through your local or state realtor association.
What’s of even greater concern, however, is that the Moerhl suit that goes to trial in early 2024. Burnett Spitzer was limited to Missouri. Moerhl covers the entire country.
The bottom line is that agents who have taken the time to acquire the skills they need to be effective negotiators and understand the strategies to succeed in today’s market, will thrive in what’s ahead. I always had my very best years in down markets because they’re skills based. You can too—we’ll be here to help.
An Instagram Halloween
Halloween can be one of the most fun days of the year. It can also be one of the best opportunities to get plenty of fun posts for your social media pages, especially on Instagram. Here are some quick ideas to build traffic on your social media sites over the next week.
- Drive through your market area and photograph the properties with the most unusual Halloween decorations. Post the top 3-5 best decorated yards on your Facebook, Instagram, and Twitter pages and then ask the people to vote
on their favorites. - Visit a pumpkin patch and photograph the biggest, the strangest, and the funniest looking pumpkins you can find and post them on Instagram. You can also take short videos to post on both Instagram and YouTube.
- Hold an open house with pumpkin pie and/or pumpkin lattes.
- Conduct a pumpkin decorating event for the kids of your past clients. Supply the pumpkins, colored pens, and easy decorations to stick on the pumpkin (no carving please). Be sure to provide Halloween themed refreshments for everyone who attends.
The idea is to have fun and make people laugh—that’s what will drive plenty of likes on your timeline and it’s a great way to remind people that you’re in the real estate business.
Buyer Broker Commissions Go to Trial
On Monday, October 16, 2023, the Sitzer/Burnett lawsuit goes to trial. It’s expected to last about three weeks, with a verdict due by mid-November. The fundamental question is how buyer commissions will be paid in the future.
The plaintiffs are a group of home sellers from Missouri who are alleging that buyer agent commissions have remained artificially high because of the rules in place requiring home seller to offer compensation to the buyer’s broker.
While Anywhere and RE/MAX have settled their portion of the lawsuit, NAR, Keller Williams, and Home Services of America are going to trial.
KW and Home Services intend to show that they played no role in the activities relating to NAR’s Cooperative Compensation Rule. They also both deny that there was any conspiracy.
According to Real Estate News, “The industry is paying close attention to this case because of the wide range of outcomes if the plaintiffs prevail. The monetary damages could be zero — or mind-boggling sums that could cripple some defendants’ ability to do business.”
No matter what happens, you can probably expect the losing side to appeal. Stay tuned for more updates soon.
Zero Percent Commissions Are Now a Reality
Last week Anywhere announced the terms of their settlement agreement for the two bombshell lawsuits that sought to have buyer agents negotiate their commission directly with the seller and/or their own buyers.
Part of that settlement would allow listing brokers to post a zero percent commission for the buyer’s broker. Several days ago, NAR relented and said they would also allow agents to post listings on the MLS where there is a zero percent
commission for buyer’s agents.
What’s really surprising, however, is the seven major Anywhere brands will no longer require their company owned brokerages (franchisees will determine their own policies) to be members of NAR. This is a huge issue, and the ramifications could cause serious problems for NAR going forward.
The bottom line is that if you represent buyers, it’s time to become educated on how to obtain buyer brokerage agreements on every buyer you represent. The time to take action is now because you’re going to need these skills for the rest of your career.