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NAR Law Suit Part: VIII Reimaging Real Estate Agents as Business Consultants

By
Mortgage and Lending with The Power Is Now Media, Inc. DRE 01143484 NMLS 461807

Rethinking Compensation in Real Estate 🔄

In the ever-evolving real estate landscape, traditional practices are being challenged. Part VII of my NAR Series, “Exploring the Implications of the NAR Settlement Towards a More Transparent and Fair Real Estate Industry,” ignited a vibrant discussion about the fundamental nature of compensation for real estate professionals. The feedback from both industry veterans and newcomers underscores a critical need for change. 🌟

Why should real estate agents continue to rely solely on commissions, which often lead to conflicts of interest and undermine trust? This blog explores the vital question of reforming compensation structures in real estate, proposing a shift from commission-based pay to a model where agents are compensated for their time and expertise, regardless of the transaction’s outcome. 🔄

This change promises to enhance transparency and fairness and aligns real estate practices with modern consumer expectations and the broader push towards a service-oriented economy. Join me as we explore a new paradigm for real estate professionals that values knowledge and service over salesmanship and seeks to restore integrity to an industry at a crossroads. ✨

The Compensation Conundrum ⚖️

In Part VII, I suggested that real estate agents should be compensated for their time, not just through commission. This shift addresses the root cause of the NAR lawsuit: compensation. The current commission-based model often incentivizes undesirable behaviors and creates conflicts of interest. By shifting to a time-based compensation model, we can align agents’ incentives with their clients’ best interests. 🕒

Sellers should not be manipulated by buyers’ agents or listing agents just to get paid. Buyers and sellers should pay for their representation in all transactions, and this payment should not depend on whether the transaction closes, thus allowing them to earn a commission. This is why NAR, MLS, and agents are embroiled in this lawsuit: everyone is trying to get paid. No one wants to work for free. 💸

Debunking Myths and Addressing Counterarguments 🚫

The argument against changing the status quo claims that it will hurt buyers if the seller pays their agent’s commission, or that sellers will not be able to incentivize buyer’s agents to find buyers and sell their property. The primary victims, they say, are not wealthy sellers but financially strapped first-time homebuyers. To me, this is just liberal hogwash straight from the bowels of socialism. This is America, where everyone pays their way, and the market dictates price and terms. Sellers should have the right to pay a buyer’s agent, and the buyer’s agent should have the right to ask. This is Market 101: the offer and the acceptance or rejection. Nothing is built-in, and there is no collusion or manipulation. We must return to the basics of buyers’ and sellers’ offers and acceptances and let the market do its thing. The more significant issue—and the reason for all this turmoil—is compensation. Working on the “com,” as they say, should no longer be an option for any agent. 🇺🇸

Visualizing the Change 🌐

Real estate agents are knowledge workers who assist, educate, advise, and/or facilitate the sale or acquisition of real estate. They are not salespeople, and it’s time we stopped viewing them as such. This is a wake-up call for agents who thought real estate was their fallback plan. They are about to lose their jobs because they bring zero value. Real estate should not be just something you do on the side until you make it big elsewhere, like many actors trying to break into Hollywood. 🎭

A Call to Action for Industry Reform ✊

The real estate profession is evolving in response to the changing landscape of information accessibility and consumer expectations. This shift reflects a broader trend across various industries towards advisory and consultancy roles, emphasizing specialized knowledge and strategic insight over traditional transactional functions. Honestly, anyone can sell a house, which is why thousands of consumers are doing it themselves, saving 5% to 10% on the price of their home in commissions and expenses. As agents and brokers, we must be compensated differently and justly for the expertise we bring to the table. 📊

Closing Thoughts: A Unified Path Forward 🛤️

In this reimagination of the 21st-century Agent model, the value proposition of real estate professionals shifts from being intermediaries in transactions to offering expert advice on market conditions, pricing strategies, and marketing. Their role becomes more about providing in-depth analysis, leveraging data to inform decisions, and guiding clients through the complexities of the real estate market. This approach minimizes their direct involvement in the transactional elements of the process, thereby reducing liability and focusing on areas where their expertise adds the most value. You don’t need a license to do this, and it significantly reduces or even eliminates liability as an advisor. 📉

Engagement and Feedback 💬

I know what you are thinking—this blog is already too long. I will address what you are feeling in Part IX of the series. “Are you ready to be part of the change? As the real estate industry stands at a crossroads, your voice and action can help shape its future. Please share your thoughts in the comments below, engage with us on social media, and don’t forget to share this blog. Together, we can redefine the role of real estate professionals for a fairer and more transparent market.” 🌍

Unlock your full potential in Real Estate or Business today! Contact Eric Lawrence Frazier, MBA, via telephone or video for a personalized consultation. Let’s shape a strategic plan that will empower your journey to success. Your Power Is Now – seize it!🚀

Eric Lawrence Frazier MBA

President | CEO | Advisor

Real Estate | Mortgage | Business | Media | Marketing

The Power Is Now Media Inc.

800-401-8994 ext. 703

Direct: 714-475-8629

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Posted by

Eric Lawrence Frazier MBA
President and CEO
The Power Is Now Media, Inc.
(800) 401-8994 ext. 703
eric.frazier@thepowerisnow.com

www.thepowerisnow.com

Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

The Reality is that no one can sell their house for FREE . A Seller would have some degree of Marketing Costs . Most important they would have to hire an Attorney (@ $300++ per hour) to draft and revise an Agreement of Sale. They would have to Negotiate repairs that Tests & Inspections uncover . Lacking these skills they could lose thousands . These a just a few services that a Realtor possesses to use on behalf of their clients.

Apr 15, 2024 03:27 AM
Sham Reddy CRS
Howard Hanna RE Services, Dayton, OH - Dayton, OH
CRS

Thanks Eric for sharing an update on NAR legal issues which in turn are our issues too!

This change promises to enhance transparency and fairness and aligns real estate practices with modern consumer expectations and the broader push towards a service-oriented economy. Join me as we explore a new paradigm for real estate professionals that values knowledge and service over salesmanship and seeks to restore integrity to an industry at a crossroads. 

Apr 15, 2024 04:03 AM