Where Do We Go From Here?
As I thought about what to write about this week, the ‘breaking news’ articles about the latest NAR scandal began to pop up in my feeds. Just when we thought it couldn’t get any worse, now we are talking about an alleged blackmail situation?? The reported reason the current president is stepping down must be earth-shattering, and if we wait long enough, it will come out even though it probably isn’t any of our business. I anticipate an episode of Dateline to be devoted to the NAR scandals and the lawsuits. I can just hear Keith Morrison narrating in my head. Juicy stuff.
The damning evidence in the commission trial, including training videos and weak testimony, only threw fuel on the fire of the lawsuit courtroom debacle. If the defendant’s attorneys had done their homework, they would have shown those videos themselves to get in front of it. They could have interpreted it to say that brokers can preach this stuff all day, but agents do what they want to, and they could have put some agents who do just that on the stand. Instead, it looked like covert training that was meant to affect behavior. Sadly, it is meant for that, but it doesn’t work. It was meant to guide and motivate independent agents so the broker could try and determine a predictable level of revenue, but collusion is way too strong of a word. Brokers and agents are too competitive to collude. And many low-commission brokerages are thriving out there. Heck, anyone can sell a house FSBO if they really want to.
Face the music and change the tune.
Honestly, relocation professionals don’t have the power to make any meaningful changes or contributions surrounding what is happening with NAR, lawsuits, regulatory threats, and a horrible public image perception regarding the real estate industry on a national scale. But that doesn’t mean we can’t take action on the things we can control. Sometimes, we must lean into the chaos instead of shying away from it. We should be operating from a worst-case scenario within our own brokerages. It is an opportunity to reinvent the industry as a whole, and we can start at home.
Changes are going to come. And hopefully, it will give the industry a reset button. Lots of agents will leave the business. Not a bad thing. Some brokers will sell, retire, or be forced to shut down their operations. Also, probably not a bad thing. NAR and real estate practices will be overhauled voluntarily or by government intervention. Definitely not a bad thing. And possibly, a new organization will appear with the ethics and mission that NAR had when it was originally created, focusing on serving the consumer. That will mean separating NAR and their MLS ties. Somewhere along the way, the money and power went to their heads. I could wax on about what I think should happen, but I would rather focus on what we can do in our companies and at a local level right now.
As relocation professionals, what should we be doing?
We need to get our Relocation Agents ready to compete at a far superior level to other agents. We owe it to our local clients, transferees, RMCs, and the corporations. You and your organizations are all that is good about our industry; make sure they know it!
Have a scripted dialog ready for your agent team to discuss the NAR mess and the lawsuits. And I don’t mean to whitewash the issues. It’s time to be candid, transparent, and authentic with clients. But with that being said, everyone needs to be singing from the same song sheet so the message is clear and honest. These scandals have left the contained world of real estate rags. It’s on CNN, the Wall Street Journal, the New York Times, and many major online news outlets. As we know, many people don’t consume legitimate news, but plenty do, and it is important to have your perspective of the story as someone from inside the industry.
Start revamping your listing presentation to talk less about how great we are and more about how a transaction works, how everyone gets paid, and where the pain points might be. Agents are so eager to please, and they suck at talking about the potential landmines. It has always been a popularity contest. Well, now maybe it needs to be who is the most knowledgeable and ethical person to guide them through this difficult process. We can’t always just tell the client what they want to hear. Yes, it's about selling fast and for the most money, but that is only part of the equation. Drive home the negotiable elements with the customer and how those decisions may affect the sale.
Develop a buyer’s consultation presentation. Document the offer process, how everyone gets paid and their options, what is expected of them, and what the agent isn’t (just a chauffeur). Loyalty matters, and it is ok to discuss that. It is important to address that the process can be long and have disappointments along the way. Teach the agents to act as true consultants by advising the customers regarding the negotiable elements they can control and what their options and choices may mean.
Have a voice in what your local MLSs and Boards are doing to evaluate buyer representation and associated compensation structure. Many areas of the country are already instilling changes without being told to do that. If you are affected by it, you should have a voice in it. Continue to put pressure on NAR where you can.
We can’t make independent contractors do certain things because they aren’t employees. Agents voluntarily join a relocation team, and before they join, we must outline the specific expectations around using certain documents and presentations and adherence to outlined performance metrics. The team may not be for them if they don’t want to comply. You are providing company-generated business to them. They should all be using the same presentations and must demonstrate that they can deliver the material to your satisfaction for the benefit of the customer. You can dictate the crux of the conversation team agents have with the clients that your company delivers to them. It's not safe or wise to let your relocation team freestyle at this time. That is the beauty of the relocation team concept.
Create a dialog and presentation for your sources of business about what your company is doing to respond to the industry chaos. Don’t assume they know how to interpret what they are hearing. And btw, save the outrage. I have seen some brokers who are very vocal about what an injustice it is that this is happening to our industry. It isn’t happening to our industry, we did it to ourselves. We allowed some bad actors to give the entire industry a bad image. And we failed to communicate effectively for many years why and how agents and brokers get paid. We allowed NAR to operate unchecked. And then a shrewd attorney saw a chink in the armor. The high-paid attorneys and the companies they represented had no idea how to communicate with a layman group of jurors in the court of public opinion.
So while we wait for the dust to settle, change what you can internally. It all comes down to better education and communication. Don’t wait for others to determine the path. Do what you can now to set the pace, lead through the chaos, and establish yourself as a leader in your company and industry.
“Restoring fiduciary duty, restoring agency, is one concrete reform that the industry will make as it rebuilds the future after the flood. It will make that reform partly because it must, and partly because the men and women of conscience, principle, and vision will want to.” ~ Rob Hahn, real estate strategy and consulting firm managing partner, aka Notorious R.O.B.
