Recent court rulings from Kansas City have the ability to upend how real estate agents are compensated, a realization that has found agents industry-wide sitting down with brokers, taking to social media and pouring over media reports.
And this is only the beginning.
The Sitzer/Burnett class action trial found that a number of real estate brands, along with the National Association of Realtors, were collectively complicit in a conspiracy (ugly word, yes, but it was the foundation of the trial) to sustain a standard commission and minimize consumers’ right to negotiate. Additional cases have been filed, and the issue will be weighing on the real estate industry for the foreseeable future.
This is not the fault of unscrupulous attorneys, it’s not on the heads of an unaware jury, and it’s not the burden of defendants’ legal strategy—all low-hanging excuses making the rounds on social media in a wide array of agent dominated mastermind groups and news report comment threads.
What happened, and what is happening, is a moment of evolution. An industry “big bang.” Never has the residential home sales ecosystem had a better chance to communicate its collective value.
It’s not an absolute that buyer agents won’t be paid anymore, but the risk is greater than its been in recent times. There’s also substantial risk of industry-wide commission compression as buyers, already disillusioned by remarkably low inventory and relatively high interest, continue pumping the brakes until the confusion of who pays who morphs into clear and accepted industry compensation standards. No one is certain and everyone is curious.
Agent contraction is likely. Practitioners who focus on buyers and spend on buyer leads are especially susceptible. But this needs to happen for the industry to continue advancing and some say it’s overdue. Sales figures make it obvious, as market activity can’t sustain the volume of licensees. It’s likely industry emphasis will again become listing-dominant and consumer sentiment will become colored with the hue of commission compression.
These are the times when agents need to rise above market information as an argument for engagement. Selling access to available listings and average sale price data is no longer sustainable for agents, it’s now the job of proptechs, AI and consumer-facing marketing vendors.
The agent’s role is now of advisor and real estate services consultant. And Rechat’s fast-twitch messaging, expertise-boosting tools and AI-augmented marketing stack can make that pivot land where and with who it needs to.
Armed with our AI-powered feature stack, the best agents will be in front of the change, experts in what’s ahead. They’ll communicate with their databases about this wholly unique market, which is characterized by a stalemate between rates and inventory and now laced with an industry-altering evolution in the very way homes are traded. For most of us, right now has never been before. The Great Recession at least had a clear path forward. Getting through this, and creating what will ultimately be a new industry, is in the hands of brokers, teams and agents, and the technology they choose to reach their market.
Rechat is a leader in helping agents lead. Our technology empowers the pros who want to show the consumer why representation matters more now than ever. Homes will need to sell and the people between the current house and the next one remain critical to unlocking the door.
Reach out to your database today. Brokers, engage internally. Create posts that encourage conversation and well-informed discussion. This is a time of change that requires deft navigation. And we know the route.