March 2024: Focus on What You Can Control, Not What You Can’t
“The more time you spend complaining about what you deserve, the less time you have to focus on what you can create. Focus on what you can control.”
-James Clear
It’s been an interesting last week here on the real estate front. On Friday March 23rd, NAR (National Association of Realtors) settled a lawsuit for $418 Million to a group of plaintiffs in Missouri who sued their listing brokers for failing to properly disclose that buyers agent’s compensation was negotiable and not fixed in the Multiple Listing Service (MLS). Moments after a settlement was reached, a media firestorm ensued with headlines such as:
“The 6% commission on buyer or selling a home is gone,”
“Landmark Settlement Breaks Up the Real Estate Cartel”
“Could a Major Lawsuit Settlement Against Realtors Mean Lower Home Prices?”
After I read through the findings of the court settlement after the ruling, here were my two biggest take aways:
1.) Listing agents can no longer advertise whether sellers are offering compensation to buyers’ agents through the MLS, but can still provide compensation and advertise in most other ways.
2.) Before agents can show buyers homes, they need to have an executed buyer’s representation agreement in place. This has been standard practice but not required and I think will benefit both parties to have that conversation during the initial stages of the homebuying process rather than when it’s already underway. In doing so, agents can explain how they earn compensation and why its important for buyers have representation in a real estate transaction.
Commissions from both sides have ALWAYS been negotiable and NAR does not and never has claimed to set commission rates.
So how does this impact me and all the other realtors in our industry? This settlement is still pending court approval and there are plenty of questions that will hopefully be answered in the coming months. Rather than going down the rabbit hole of fear and what changes could come as a result, I would rather focus what I can control rather than the things I cannot.
Providing Value
“Your true worth is determined by how much more you give in value than you take in payment.”
-Bob Burg
One of my biggest issues with the way this settlement has been portrayed in the media is devaluing our line of work. There are so many moving parts in a real estate transaction and it can be a very emotional experience, particularly when you’re buying and selling at the same time. Most people only do this a handful of times throughout their entire lives while realtors deal with it every day and still come across new obstacles with each transaction. Just when you think you’ve seen it all, there’s always a new issue that comes up and you have to figure out on the fly. As long as people are buying and selling homes, there will always be a need for the services that realtors provide.
I Don’t Live In Fear, I Adapt
“Don’t let the fear of what could happen make nothing happen.”
-Doe Zantamata
It is not the easiest time to buy a home right now. Home values dramatically increased during 2021 (25.2% in Davidson County alone) due to the historically low interest rates, low inventory, high material costs as result of the pandemic, and hyperinflation, not because of realtors’ commissions. Homebuyers must put together a down payment, closing costs, inspection & appraisal fees, and likely higher monthly payments due to the current interest rates. I think more transparency is always a good thing and agents being required to properly explain that before they’re off to the races and showing homes is a good thing.
Change is constant and it’s always something but it’s important to set the record straight and if you have questions, reach out and let’s talk about them!