There is a strange feeling of deja vu today among many real estate brokers who survived the drastic changes faced by our industry throughout the 1990s. Experts say the real estate industry is facing a dilemma similar to the one it successfully overcame some 10 to 15 years ago.
Let’s rewind to the 1980s: The Federal Trade Commission issued a report on real estate “agency.” The buyer brokerage “movement” was born. By the early 1990s, state real estate commissions were implementing rules that required brokers to change their established way of doing business through additional disclosure. An advisory group was formed to study “agency” and make recommendations to brokers in the state trade groups. The late 1990s were witness to a transformed real estate landscape in which established brokers legally could practice what had been opposed just a decade earlier.
Buyer’s brokers ushered in the failed revolution of “agency,” which did not catch the attention of the public or the media (except in such states as Massachusetts) to a sufficient level to oppose legislative changes. Without the public support for consumer-friendly business models, political action committees representing viewpoints of traditional realty brokers were allowed to change the atmosphere of their environment. This development allowed a great many brokers to breathe a sigh of relief.
Let’s jump back to the present: The real estate industry stands on the precipice of yet another next great transition. Interests that retain control over traditional business models have the upper hand. What has changed in this comparison of old versus new challenges? Those willing to fight for profit through efficiency may have the real estate equivalent of the atom bomb!
Enter the Internet-savvy consumer. Once the special interests attempt to curtail new threats to their own bottom line, we shall see the advent of Internet real estate advocacy. Consumers, including many who couldn’t relate to the complex idea of buyer’s brokerage, undoubtedly will be able to relate to such simple ideas as these:
1. The Internet allows home sellers who wish to do some of the work involved with a real estate transaction themselves to do so. Any legislation introduced by brokers that purports to curtail this desire must be opposed.
2. The Internet allows home sellers to market their home with or without a broker to the widest possible audience. Any company that purposefully exempts the seller’s property listing from their own or other brokers’ Web sites must disclose this fact to the seller and all consumers who visit that broker’s Web site.
3. Brokers who wish to practice a minimum level of service to allow consumers to benefit from that broker’s ability to convey information and list properties on the MLS have a lawful right to do so. Associations and corporations that oppose this right may suffer challenges to their own right to maintain a restrictive covenant under the Sherman Antitrust Act.
Now let’s look to the future: How can today’s broker adapt if more challenges are truly coming? The same question could have been asked several years ago when the Real Estate Buyers Agent Council was made up of just a small group of buyer’s brokers. Today, REBAC has tens of thousands of members practicing buyer representation all over the globe, and the organization is officially part of the National Association of Realtors.
If I were asked to help the business owners, brokers and their agents who are uncomfortable with new challenges of the future, I would recommend an in-depth exploration of the following Web sites:
1. The National Association of Real Estate Consultants. This group represents the consulting approach to real estate practice, an innovative movement that seems destined for growth.
2. Real estate news publications. Inman News and Agency Law Quarterly are among the good sources of real estate news with glimpses of different perspectives on the future of real estate.
3. E-Pro Certification. This National Association of Realtors technology certification can be very helpful when technology know-how is a prerequisite to serving your target market.
We must all recognize that the need for different business models will never disappear. No idea should be so disparaged that an entire industry would act to see its benefit to consumers curtailed, especially under the guise of consumer-protection. New ideas come and go, some may even prove themselves useful with time. There is a niche for everyone who can explain to the consumer what they do for consumers and why they should be the one to do business with.
Corey Scholtka is the broker of BuyHomes.com in Wauwatosa, Wis.
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