Portals ‘should not work against outcomes’ the government seeks 

In his first year as the leader of one of the nation's top home search sites, Realtor.com CEO Damian Eales has had his hands full.

He has been tasked with navigating industry changes while working to ensure that consumers are being well served. And he believes that portals can play an important role in helping drive the desired outcomes of the commissions litigation and DOJ actions: greater transparency and professionalism. 

Eales sat down with Real Estate News to discuss the rule changes and what role the home search portals will play in the changing business environment. This interview has been edited for length and clarity. 

The National Association of Realtors is moving forward with proposed changes even though court approval is still pending. What are your thoughts?

Our customers — particularly our bigger customers — see this as an opportunity to grow their business by becoming more professional. I think that's good for everybody. It's in the interests of what the government is trying to achieve in both ensuring transparency of commissions and transparency of the services that are provided in return for that commission. It's creating a catalyst for change in the industry that's for the good of the consumer. 

There will definitely be fewer Realtors in the future, but there'll be Realtors that do an even better job in serving consumers.

NAR has said agents can communicate offers of compensation outside of the MLS, while noting that the agreement doesn't address portals. What will the portals do?

Our role is really to work with the industry to try and find the solutions, not work against the outcomes that the government is trying to achieve in these reforms. We should be very bold in saying that on account of these changes, it is a more transparent, more professional industry. 

There is greater competition in fees, but — and this is very important — as an industry, we are not going to go so far as to cut commissions in half, like they are in some international markets, at the expense of buyer agency.

So we won't see offers of compensation listed on Realtor.com one day?

That's not our intention. But I also don't think we should get hung up on that. 

A lot of our top customers have already wrapped their head around the fact that they will communicate their offer of compensation individually. Equally, people will submit offers to sellers with buyer agent commission included as part of that transaction. And I think that's the type of outcome the DOJ was trying to achieve because it creates new conversations about compensation between buyers and buyer agents, and sellers and selling agents.

Sellers are going to really want buyers. And for anybody who has ever sold a house, they know the difference between one offer and five offers is substantially different in terms of the home price that you're going to achieve. We want to maximize the number of buyers you bring into that negotiation, and buyers are going to need help.

What will be the role of portals in helping agents and consumers work together and navigate the changing residential real estate sales landscape?

The home search sites have a massive role to play. We're doing our bit. We've tried to start to lead the conversation and the competition of ideas that could help us as a society determine what our community wants the most. I was really grateful that Rich Barton reposted some of the work that we have done recently and advocated for the same principles that we're advocating for, which are fundamentally consumer protection.

Now equally, I would say I have an issue with Homes.com, whose entire business model seems to be to reduce referral fees. That can be read in a different way — double commissions and half the consumer protection. I think that is not a good outcome for consumers or for real estate professionals, and I do not think that is an outcome the government is trying to achieve.

When we last spoke, Bob Goldberg was still CEO at NAR, Tracy Kasper was president and the association hadn't reached a settlement in the commissions lawsuits. Has it been challenging to remain aligned with NAR?

NAR has gone through a really traumatic period. I think that anybody in a leadership position in NAR would concur. That being said, they are doing their best to support their members, and I would congratulate them on the settlement. The fact that it was preliminarily endorsed by the judge, I think, is a really positive sign. 

NAR is a significant partner of Realtor.com. We share a name — a name that we're incredibly proud of — and we have a lot of aligned interests. One is ensuring the brand and professionalism of Realtors is enhanced, and secondly, that consumers are better served in that process.

So, we're not out of the woods yet as an industry, but our view is that we're all in it together. And let's focus on the consumer because if we serve the consumer better, then I think it solves all of our problems.