As of August 17, 2024, buyers must enter a written agreement with real estate professionals before viewing properties. Differences exist in services, training, experience, and resources among agents. It’s essential for buyers to understand these differences to make informed choices.
The evolving show-for-free and show-for-fee business models in real estate prioritize profit over consumer education, leading to potential exploitation and undermining the essential advisory role of real estate agents and brokers.
Robert Refkin inaccurately criticizes the Clear Cooperation Rule as violating the National Association of REALTORS Code of Ethics and state laws. Despite his objections, the rule is pro-consumer, fostering competition and better market exposure. The arguments against it are flawed and often disregard the broader benefits to both buyers and sellers.
Critics argue real estate agents are overpaid due to generous commissions. However, agents earn through success-based fees, providing extensive unpaid services if transactions fail. Unlike other professionals, agents only earn upon successful deals. Switching to fee-based models could increase costs and risks for consumers without providing the safeguards licensed agents offer, ultimately being costlier.
The NAR settlement has sparked debate over the real estate industry’s future without affecting cooperative compensation or making commissions negotiable, as they have always been. Concerns about increased cash needed for buyers are raised, but home values remain driven by market forces, not agent fees. Nonetheless, realtors remain dedicated to serving clients ethically and professionally in achieving homeownership.
Over the years, I have been chastised for suggesting that agents who seek education from Facebook groups are lazy. – and since I’m a real believer in that statement, allow me to reiterate it. Facebook, a public arena is not the place to seek professional guidance and education – but it is an easy forum, where your supposed peers can feel free to provide you with any advice that pops into their head – well-intentioned or not. I have seen well-intentioned people offer professional advice that would make any knowledgeable professional shudder with terror.
With inventory short markets around the country, interest rates at historic lows, and incredibly high demand, agents are feeling frustrated and put upon to degrees they may never have experienced. Add to that the policy changes facing the real estate practitioner, there are a huge number of people seeking answers to questions that should most properly be addressed to their brokers. But people being who they are, many of them end up looking for validation and information anywhere they can find it. Sadly, Facebook is too easy to run to.
Even when you make a statement or ask a question in a closed or private group, that has a fancy title and was created by someone active in the real estate industry or industry adjacent publications or an industry vendor, or even a well-publicized real estate professional as a place to enlighten or educate, bring a grain of salt to the group, and apply it liberally when you get advice.
I’m not saying that anyone there is necessarily malignant, or are providing information to hurt anyone, I’m suggesting that asking for education from the other kids in the playground instead of asking the teacher for help is not the best way to go to make your career better – especially when the playground is virtual and the market, the regulations and the practices in your market may be far different from the place they work. So what’s an agent to do? Let’s take a look at a couple of possible options.
If the issue is one that impacts your actions as a real estate agent, the first step still has to be to go to your manager or broker. They are responsible for your actions, they are generally (depending on the business model) involved in your success, and should be committed to helping you do the right thing and make a good living. If they are not, I have said before and will continue to say, you may need to go somewhere that they will.
If for some reason they are unavailable, or they are part of the problem you need to solve, then go to a senior management person or a senior agent with a good reputation at your company. They are your teammates and hopefully will be able to provide you with some information that is helpful accurate and consistent with the company’s policies.
Should your broker-owner, or manager, or senior team members not be available, try the legal hotline at your association with your question. Or go to www.realtor.org and use the copious information there, or go to the company intranet site, or the intranet site from your franchise to use the education resources there as a temporary measure until you can get the right team member to help you.
I know that everyone feels safe and distanced from such conversations, and people on Facebook speak with such conviction that it seems highly unlikely that they could be wrong, but you don’t know anything about their level of expertise, or the level of accurate information they possess other than what they tell you, and horribly, that may not all be accurate.
People attending classes to obtain their real estate license often form their impressions of the real estate industry from the things they learn in class. Like newly hatched chicks, they’re imprinted with a set of beliefs that they carry with…
When I went to Chair my first committee meeting at my local association of REALTORS, I asked my Broker, what I should do. I had never served in any capacity in an organization like this, and being really young, I was a little nervous about doing well. He told me to remember that all I had to do was the best job I could and that it was my responsibility to try to leave the organization in better shape when I left than it was when I started.
Decades, and literally hundreds of appointments and elections later, it still seems a simple matter to me. When I serve as an officer or director of an organization, it is my job to consider how my votes impact the organization I serve – not my company, not any other organization where I serve, but the specific needs of the group that I am an officer or director of.
Sometimes it requires deeper thoughts than others. In the case of NAR directors, who also serve as officers or directors of other groups, a number of articles in Inman news recently seem to be confusing the issue for some people, and a recent one spoke to the issue directly.
NAR has clear guidelines for its officers and directors. The NAR Leadership Integrity Policy, states ”NAR leaders are charged with advancing the interests of the National Association of REALTORS®. As NAR leaders, they are required to act in the best interests of NAR, rather than in their own personal interests or the interests of another person or entity. Regardless of whether NAR leaders are appointed to their positions by a state or local association, or serve as a consequence of a position with some other entity, the duties are owed to NAR and NAR leaders should act based on their judgment as to what serves the best interests of NAR.”
Simply put, when you’re acting as an NAR director, you need to wear your “NAR hat” when you’re making NAR decisions”. Just as you should consider your state association’s best interest when you vote on issues as a state director, and you should consider your local associations best interest when you’re voting on local issues. You don’t vote on local issues considering what’s best for NAR, nor do you do that when you vote on state association issues.
That doesn’t mean that you live in a vacuum, or that others may not try to influence you, it just means you need to do what you think is in the best interests of the group, and not what you think another organization you belong to would want you to do.
In the Inman article, a CEO of a local association asked “State and local associations can still voice their support or nonsupport of a NAR-level issue, correct?” and, according to Inman, Katie Johnson, NAR’s chief attorney responded, that local associations “can do whatever they want to do” but “doing that puts your directors in a very difficult position.” And, not surprisingly, she’s absolutely correct – the state an local associations are independent organizations, But what she also pointed out is that puts the director in a difficult position, and that the director needs to examine, and then vote their conscience. No one “owns” a Director’s vote but the Director and no one but the Director should decide how the vote is cast.
It’s no different than if the Director’s broker wanted to influence their vote, or the Director’s spouse, or partner, football coach, or bookie wanted them to vote for or against a certain matter. None of those organizations or people should be considered by a Director when they cast their vote on an issue, except as additional information in their decision-making process. Those pressures should not influence them to vote in a manner that they do not feel is best for the group. The obligation they took when they accepted the position was to act in the best interests of the organization, and their vote should reflect the outcome they feel is best for the group. Putting such pressure on the DIrector creates a conflict of interest, and it is the Director’s job to handle the ethical and moral challenges of that conflict. If the outside influencer is asking the director to take a position that they would have taken without the request, no conflict, but in the event that the outside influence is asking the Director to do something that they know, down deep, isn’t the position they would take without that influence, in my opinion, they need to dismiss that influence.
In the final analysis, it doesn’t matter if the individual votes for or against an item at the meeting, it only matters that they do so remembering that obligation to do what’s best for the group, and not for any special interest. And by doing that, they discharge their obligation to the group and to their conscience and sleep the peaceful sleep of the innocent – simple, right?
I like Jim Harrison and consider him a friend– I’ve worked with him, shared time socially with him, and enjoy spending time with him, and yet I find myself stunned by the way this op-ed has been written, and disagreeing…
There’s something about the arbitrary end of the year that makes us both regret the past and wonder about the future. Resolutions for both our business and personal lives abound. Savants tell us how to do what we already know…
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