NAR Ruling and the Importance of Being a Listing Agent
On October 31st, a jury in Kansas City, Missouri, found the National Association of Realtors (NAR) and other corporate defendants liable in the case of Burnett vs. NAR et al. The jury found that the defendants had violated antitrust laws by conspiring to fix real estate commission rates. The jury awarded the plaintiffs $1.78 billion in damages.
The Burnett ruling set off a wave of anxiety in the real estate industry because it may effect agents in several ways, including:
- Real estate commissions may become more negotiable. If Burnett is upheld under appeal, it’s possible that the NAR’s “Clear Cooperative Policy” would have to be reinterpreted so that a buyer’s agent is not necessarily entitled to be compensated on a listing.
- We could see increased competition among real estate agents if commissions become more negotiable. This increased competitive environment will force agents to articulate their value proposition to homeowners more effectively.
In the wake of the Burnett ruling, Ren Jones and Sarah Close, co-hosts of Vulcan7’s Coaches and Mentors Show, reached out to real estate coaching icon Mike Ferry for his reaction to the case and his thoughts on its implications for U.S. real estate agents.
The first thing Mike stressed in this wide-ranging discussion is for agents not to panic! “This is going to be appealed,” he says. “And it will take two to three years before an actual verdict of consequence. So, the panic today really is just for the purpose of panicking.”
But Mike did use the Burnett ruling to frame and reiterate the philosophy that’s guided his business for nearly five decades: true success in real estate starts with being a strong listing agent.
“Most importantly,” he says, “you allow yourself as a listing agent to point out the points of difference and the value you offer the seller for the commission you charge. That’s very important.”
Creating value as a salesperson is an essential theme of the Mike Ferry coaching philosophy. A strong salesperson must uncover or pre-qualify” a homeowner’s objectives. He also stresses that coaches or trainers must focus on the basics such as lead following up, showing techniques once inside the home (i.e. the importance of asking great questions), handling objections, and closing the sale.
The discussion touched on an oft-cited statistic that as many as 90% of agents focus on buyers. Because the economy was so strong in recent years, these agents didn’t have to know how to sell.
But now, the market has changed because of limited inventory, high interest rates, and rising costs. Mike points out that it’s much easier to drive a buyer around and look at homes than to confront a potential seller on pricing and commission rates. “The first issue is pricing; the second issue is commission,” he says. “And if they (agents) can’t handle those two issues, they put a buyer in a car. The reality of real estate is the major portion of agents are not salespeople. They are showing agents.”
When asked what agents can do to have a phenomenal 2024, Mike closes with the following advice:
- Understand where every 2023 transaction came from and determine if it’s a duplicatable source of business in 2024.
- Focus on how much time you’ll invest in those contacts who like you, trust you, and would be willing to give you a reference.
- Lean into the high-quality leads furnished by VULCAN7.
This is a must-watch interview with one of the most influential and highly respected figures in the history of our industry. You are sure to gain insights that can have a serious impact on the success of your business in 2024.
If you’d like to learn more about Vulcan7’s “high-quality leads” and our best-in-class CRM, dialer, and training/support process, CLICK HERE for more information.