“Excuse me, what did you say?” When a real estate agent relocates to Atlanta and hears the term, “little r,” for the first time, they are often confused. In truth, wherever they were from, the idea of living in a two-“r” world never crossed their mind.
- The idea of broker affiliation with MLS access (and without monthly cost) is possible only in Atlanta.
- An open, for profit, National MLS would destroy the industry as you know it.
- Zealot dedication to the conventions of the past will eventually erode the industry's credibility.
“Excuse me, what did you say?” When real estate agents relocate to Atlanta and hear the term, “little r,” for the first time, they are often confused. In truth, wherever they were from, the idea of living in a two-“r” world never crossed their mind.
But here in Atlanta, we have Realtors and realtors. And, though the world could care less about our semantical usage, there are those whose job it is to monitor such things. (And, I thought the mall “engineer” on the kiddie tram had the worst job ever.)
When you tell a newbie they don’t have to join a board or pay the National Association of Realtors (NAR) dues, their next breath almost always includes the plea: “But I need access to the MLS!”
The idea of MLS access having nothing to do with a board truly surprises most people. But it’s a fact: Atlanta is, and probably will forever be, the only marketplace in the United States with “optional” board membership,
While this is wonderful for the tens of thousands of “little r’s” in Atlanta (more than 60 percent of Atlanta’s agents have rejected NAR participation), it also gives the real estate industry some insight into how an open, for-profit MLS significantly alters the dynamics of a market.
To that end, many would argue, Atlanta is moving in a direction those in the realty mainstream probably don’t want to see.
What a for-profit MLS means
Because of an extremely low cost of entry, our brokerage business models tend to move away from traditional concepts. The sheer number of brokerages in Atlanta has skyrocketed.
In turn, the average monthly cost of affiliation for an agent has plummeted. The idea of broker affiliation with MLS access without monthly cost is possible only in Atlanta.
The idea of a “commission split” is slowly becoming a thing of the past in favor of flat fee, “transaction brokers.” Agents perceive their brokers more as a service provider and less as an active participant in their sales cycle. Broker transaction fees are as low as $150.
With a more defined role, brokerage brands are starting to give way in support of the brands and strategies of their affiliated agents. Many independent brokerages in Atlanta allow their agents to self-brand in any legal way they choose.
This means Atlanta represents the largest, and only, group of independent real estate professionals in the United States. To that end, Atlanta has created its own free, non-profit, agent-driven association to function as a NAR-like replacement.
The real estate community in Atlanta
The personality of the real estate community also changes in an open MLS environment. With virtually no upfront agent costs, Atlanta’s market is littered with part-time agents.
Talk to anyone outside of Atlanta about part-time agents, and they will look at you as if you just farted on their food.
But here, part-time agents are a normal part of realty life. As a matter of fact, a real estate license is more likely to be promoted as a tool everyone can use and less as an actual full-time career.
Selling a career in real estate to someone under 35 is hard thing to do. Selling a tool, or the benefit of getting a license that can inexpensively plug into any type of lifestyle and seamlessly integrate with social platforms, is much easier.
To many younger professionals, being a “Realtor” conjures up friends of their mom and dad in a cloud of cigarette smoke and alcohol fumes. The truth is, the next generation of agents is much more apt to be vaped and vegan.
What does ‘little r’ mean nationally
Over the years, we have all read some version of a dream promoting the idea of a national MLS. Because Atlanta is the only market in the U.S. with an already functioning for-profit MLS, I asked a real estate historian if any amount of venture investment in our MLS could move the needle.
The answer was, of course, no.
The complex web of fractured legal structures creates a barrier that is simply too hard to traverse. (There are 718 NAR-affliated MLSs nationwide alone as stated by Dale Ross from RPR at the 2016 NAR annual conference.)
The business model for the real estate industry, outside of Atlanta, is designed to be maintained and held true to its original form for as long as possible.
But consider this: every time the virtual world collides against the real world — the virtual wins.
Remember, the consumer doesn’t care about inner industry politics. Did anyone ever refuse an Uber ride in support of their local taxi commission? At some point, the consumer will move on regardless of tradition.
An industry can continue to fight against technology, innovation or even change. South Carolina is just the first state to ban the use of the words, “real estate,” in regard to use in agent team names.
But the one thing no one can stop from happening is time. The warriors get old. The reasons for their cause not as easily understood. So, the very structure that has kept the real estate industry together for so many decades also prevents it from having the flexibly it needs to adapt to changing generational conditions.
Going forward, millennials, the future of the industry, will have a tough time swallowing the banning of words to maintain someone else’s idea of what should be.
The real estate industry has challenges that Atlanta, thankfully, will never know. Atlanta has agent opportunities the industry, unfortunately, will never allow.