In November, a class-action lawsuit filed in 2019 on behalf of 500,000 Missouri home sellers against the National Association of Realtors (NAR) and two brokerage firms (originally four brokerage firms but two settled out of court) came in with a verdict against the defendants, saying they are liable for $1.8 billion. According to the verdict, the defendants “conspired to require home sellers to pay the broker representing the buyer of their homes in violation of federal antitrust law.”
While the verdict has been handed down, the case is far from over. “Treble” damages could still be awarded, and the case will certainly be appealed. And there’s another lawsuit on the horizon against NAR and several real estate brokerages related to agent commission rules.
This lawsuit has many in the real estate industry – and consumers across the United States – asking how this will change buyer and seller transactions and commissions as well as the relationship between real estate brokers and agents and their clients.
Moving Forward: Agent Communication, Transparency is Key
In these first days after the verdict, no one can say exactly what will happen in terms of commissions. What is clear, though, is that potential home buyers and sellers will have a lot of questions, some based on facts and others on assumptions from media coverage. How will you speak to a client if they ask about this verdict?
Being prepared and open-minded for these important conversations you’ll be having with many customers is critical. You’re bound to be asked about the industry overall and your marketplace. You may even get questioned about your practices. Being part of the solution, and not adding to the problem, will define your success with new clients going forward. Diffusing tensions paves space for transparency.
As real estate agents and brokers, we must accept and embrace that consumers’ and our clients’ concerns are very legitimate. If you don’t validate their concerns, if you try to sweep them under the rug, you’re doing a true disservice to your clients and our industry.
Open communication will be key to overcoming unintended consequences. For some real estate professionals, developing a communications plan around the lawsuit settlement may be useful. If you already know that your communications skills are an area that needs improvement, take a course or webinar on overall communications, crisis communications, or improving 1:1 interactions.
In fact, a probable outcome of this lawsuit is separation of “average” real estate professionals from the exceptional. An exceptional real estate professional is committed to lifelong learning, strengthening their skills, and creating processes and procedures they share with clients in a way that is easy to understand. Exceptional realtors ensure each of their clients is well informed so they can be successful in their transaction. Skilled agents clearly explain what they can do for clients – and what they can’t – so expectations are level, and they don’t say yes to everything asked for and fail to deliver. Ask yourself, does each of your buyers or sellers really understand what you do and the value you bring to the table?
With the verdict in the Missouri case, could it lead to a slowdown in the residential real estate industry? Perhaps, but the reality is that the “river of real estate” will continue to flow. We define this river as the fact that life events will continue. There will be marriages, divorces, families increasing in size, and people having to relocate for work. This all will continue to flow. And when a person needs a real estate professional, you need to be ready to establish your value not only with your experience but through defined processes and systems that you’re completely transparent about and a commitment to open, continuous conversation that demonstrates your customer-first mindset.
