Nexthome CEO: Make Buyers’ Agent Agreements A Priority

Key Takeaways:

– James Dwiggins argued at Inman Connect New York that commission lawsuits and pressure from the feds will bring about change in the real estate industry.
– Commission-based lawsuits, such as the Sitzer | Burnett case, are currently in litigation and are likely to result in a settlement that will change the structure of the real estate business.
– The U.S. Department of Justice and the Federal Trade Commission are also expected to take action, potentially causing offers of compensation in the MLS to cease to exist.
– The real estate industry has experienced a significant absence of leadership and is facing a future with fewer agents.
– Consumers are becoming aware of the changes in the industry and there is a need for better communication about the value of agents.
– Dwiggins advised agents to have buyers sign buyers’ agent agreements and for brokerages to make such agreements a part of their company policies.
– He also emphasized the importance of treating buyers the same way as sellers and educating sellers about the importance of offering compensation to buyers’ agents.
– Dwiggins predicted major changes in the real estate industry by the end of 2024, but also suggested that those who can articulate their value may end up making more money.
– Ultimately, the future of the real estate industry will require agents and brokerages to adapt and define how they will operate.

inman:

James Dwiggins argued at Inman Connect New York that commission lawsuits and pressure from the feds is going to bring about change in the real estate industry.

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Real estate’s status quo when it comes to agent pay is toast, James Dwiggins argued Tuesday, and agents need to start planning for that future now.

“These lawsuits are going to end with a settlement,” Dwiggins, CEO of NextHome, said on stage at Inman Connect New York. “It’s going to change structures of this business.”

The comment was a reference to the numerous commission-based lawsuits currently in litigation. The most prominent of the batch is Sitzer | Burnett, which went to trial in October. A jury in that case ultimately ruled that the National Association of Realtors and major franchisors conspired to keep agent commissions high. In the wake of that case, numerous similar suits have popped up in many parts of the U.S.

But Dwiggins doesn’t think commission suits are the only thing putting pressure on the industry right now. Instead, he argued on stage, both the U.S. Department of Justice and the Federal Trade Commission are likely going to take action.

“Offers of compensation in the MLS will likely cease to exist,” Dwiggins said. “The DOJ and the FTC want to see this removed from the multiple listing service.”

At the same time, Dwiggins also said, the real estate industry has experienced a “significant absence of leadership,” and is staring down a future with far fewer agents. Consumers are additionally starting to get the message that the status quo is changing.

“There is so much bad press in our business,” Dwiggins said, adding that, “we are not talking enough about what we do.”

Dwiggins has long been one of the loudest voices in real estate arguing that commission lawsuits and regulator interest are likely to create significant changes in the industry. His comments Tuesday revealed that he still envisions widespread disruption on the horizon.

However, Dwiggins also offered advice Tuesday on what agents and brokers can do to survive the coming tsunami of change.

Among other things, he repeatedly argued that agents need to have their buyers sign buyers’ agent agreements, while brokerages need to push such agreements as a part of their company policies.

“You wouldn’t take a listing without an agreement,” Dwiggins said. “Why would you take a buyer?”

In a similar vein, Dwiggins urged industry pros to “treat your buyer the same way you treat your seller,” including by sitting down with them and having a presentation that explains an agent’s value. And he said that brokers need to teach sellers about the importance of offering compensation to buyers agents.

“Get clear on how your company will operate in the future,” he added.

Ultimately, Dwiggins predicted major changes in the real estate industry by the end of 2024. However, that doesn’t mean an apocalypse awaits real estate agents. In fact, Dwiggins argued, the people who can articulate their value in the future may actually end up making more money than they do now.

“You’re going to see buyers agents,” he said, “charge more than they charge today.”

Email Jim Dalrymple II


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Property Chomp's Take:

James Dwiggins, CEO of NextHome, recently spoke at Inman Connect New York and argued that commission lawsuits and pressure from government regulators are going to bring significant changes to the real estate industry. Dwiggins believes that the lawsuits currently in litigation, which allege that major franchisors and the National Association of Realtors conspired to keep agent commissions high, will ultimately result in settlements that will change the structure of the business.

However, Dwiggins also pointed out that commission suits are not the only pressure the industry is facing. He believes that both the U.S. Department of Justice and the Federal Trade Commission are likely to take action, leading to the removal of offers of compensation in the multiple listing service (MLS).

In addition, Dwiggins expressed his concern about the significant absence of leadership in the industry and the possibility of a future with far fewer agents. He emphasized the need for agents and brokers to adapt and plan for these changes.

Dwiggins offered advice to agents and brokers on how to survive the coming changes. He recommended having buyers sign buyers' agent agreements and encouraging brokerages to make such agreements a part of their company policies. He also stressed the importance of treating buyers the same way as sellers and educating them about an agent's value. Brokers should also teach sellers about the importance of offering compensation to buyers' agents.

Dwiggins predicted major changes in the real estate industry by the end of 2024. However, he believes that agents who can articulate their value in the future may actually end up making more money than they do now.

Overall, it is clear that the real estate industry is on the brink of significant change. Agents and brokers need to be proactive and adapt to these changes in order to survive and thrive in the future. The future of real estate is unfolding now, and it is important for industry professionals to stay informed and prepared for what lies ahead.

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