Agents ‘have to show up’ in post-settlement world
Hard truths emerged during a talk about real estate’s future: Consumers expect more, and agents will have to “work harder for less money” to prove their value.
Key points:
- Veteran brokers shared a candid assessment of their profession during the National Association of Real Estate Editors conference last month.
- In a world where buyers have to sign a contract, “they’re going to expect more from that agent than opening doors,” one panelist said.
- Another was more pointed in his remarks: “People don’t like us” — which is why, he said, the Sitzer/Burnett jury sided with home sellers in October.
- But agents who are able to show their value “aren’t going anywhere.”
It's almost inevitable that any conversation about the future of real estate would turn to agents — the humans at the heart of the complex and emotional process of homebuying and selling.
And now, in the post-NAR settlement world, the conversation turns to how those agents need to demonstrate their value — and, starting on August 17, get their clients to sign buyer agreements. At the annual conference of the National Association of Real Estate Editors last month, a panel of industry leaders were candid about their profession and how it needs to change.
"Realtors are going to have to show up," said Mike Crowley, broker and founder of Spokane Home Buyers, which focuses exclusively on buy-side representation. "They haven't had to show up lately."
Once a would-be buyer signs a contract that says they're going to pay their agent thousands of dollars, "they're going to expect more from that agent than opening doors," said Crowley, who is also past president of the National Association of Exclusive Buyer Agents. "They're going to expect you to be there, they're going to expect you to be prepared to answer the questions."
Showing value when 'people don't like us'
No matter what, the challenge of demonstrating value isn't going away.
"We're going to be fighting his battle continuously," said Ben Caballero, CEO and founder of HomesUSA.com and the Guinness World Record holder for home sales. "People don't like us. They tolerate us, they use us, but they feel for the most part that we over-take."
That feeling, Caballero said, helped drive the nearly $1.8 billion verdict against the industry last year. Referring to the jurors who sided with home sellers, he said, "This was their opportunity to reduce the cost of buying and selling a home, and they took advantage of it."
Changing that attitude will require "more of a balance of services versus fees," Caballero said, adding that he was glad to be saying that not to real estate professionals but instead to a roomful of journalists.
Agents aren't going away — if they're good at what they do
But it's not just about money. It's also about quality.
After decades of talk about raising the level of professionalism among agents, this is "where the rubber is going to hit the road," said panelist Matt Hendricks, a licensed broker in four states and senior director of industry affairs for Zillow.
"Moving forward, you're going to develop a much better bond and much better communication with the agent you're working with because they are invested in it much more than they have been before," Hendricks said. "They have to work harder for it, and they're also showing more value."
Agents won't just work harder, Crowley said. They'll "work harder for less money," and there will be fewer of them. "We're back to pre-pandemic numbers for actively practicing Realtors," he added, with less than 500,000 actually making money doing the job.
But to be clear, no one taking part in the discussion sees real estate agents disappearing.
"Agents aren't going anywhere," Hendricks said. "Whether you buy or sell or rent, the agent is your guide through that transaction, your therapist, your negotiator, your local expert, your mediator and the one that's going to help solve problems, remove roadblocks and teach you things."