An autumn full of court cases and bad PR is rapidly approaching.
Meanwhile the National Association of Realtors (NAR) is standing by its executive board, including CEO Bob Goldberg, in the face of industry unrest after the organization’s former president Kenny Parcell stepped down amid sexual harassment allegations.
Upcoming bombshell commission cases, including Sitzer/Burnett, will determine the future of how real estate agents and brokers will be compensated. If you are a residential real estate agent or broker, this fall may be remembered as the fall that the real estate industry got turned upside down.
A brief synopsis of the upcoming court cases is that NAR and multiple listing service (MLS) policies force sellers to offer compensation to the agent representing the buyer.
Policies that were put in place with good intentions, however, may have created an opportunity for law firms to win a settlement. No matter the reason, the residential real estate industry needs to evaluate why consumers felt they overpaid for the services received or did not find value in the service.
Real earning problems
Real estate professionals have great earning potential however the reality is that many licensed real estate professionals do not earn six figures. In 2021, the median gross income earned by Realtors was $54,330, and as of January 2023, the average income of a real estate sales agent was $44,813.
These numbers are definitely not high enough to get most working professionals to quit their jobs, get a real estate license and start hosting open houses on weekends.
A career in real estate may be intriguing because the perception of what it is like to be a real estate agent is different from the reality. The perception that working in real estate is easy may be part of the reason that consumers felt there was a disconnect between the fees paid and the services received.
Reality TV shows and social media have forever changed the way the general public views real estate agents. Everyone has a connection to home so when you can tie in the emotions of finding a place to call home with some made-for-TV drama, of course, you have a successful show.
There is a reason no one is watching reality TV shows about accountants filing tax returns; no one wants to watch accountants crunch numbers so that show was never created.
Real estate reality TV shows may be successful in driving ratings but not successful in showing the real day-to-day life of a real estate agent.
The hard work that gets put in by dedicated agents to prospect, set listing appointments, prepare for listing presentations, schedule buyer consultations, research the market and other behind-the-scenes tasks are never the highlight.
Jumping on couches screaming and wielding a bottle of champagne like a sword to celebrate an accepted offer is much better for ratings.
Many real estate agents and brokers’ approach to social media is similar to that of reality TV, glamorizing the profession. Everyone knows the agents who are posting pictures that give the impression they are always at Happy Hour, at a trendy restaurant having lunch, at the gym or working from the beach because it’s too beautiful to work from the office.
How would a client feel if their accountant posted on social media that they were working from the beach on tax returns while drinking an Aperol Spritz because it was too beautiful to stay in the office?
Would the client comment “OMG YOLO” or be incredibly angry that their accountant might be working on an important document while at the beach drinking a cocktail?
The posts of a glamorous life can easily lead to resentment when a client who earns $120,000 annually has just paid 25 percent of their annual salary in commissions to someone who appears to be hardly working.
Beyond posting daily activities that may create a negative perception some agents choose to post social media content that may be considered distasteful to the general public.
There is an overabundance of social media posts with silly voiceovers mocking conversations between agents and clients. Some videos fail to empathize with clients facing the challenges of the current housing market, rather than choosing to make fun of the lack of inventory and affordability.
Is there a video of doctors mocking patients who cannot get the required care? This may be an extreme example; however, after having good health, is there anything more important than having a place to call home?
Where’s the professionalism?
At a time when the general public does not hold real estate professionals in high regard, and the future structure of compensation is unknown, real estate agents and NAR leadership provide more reasons to support the public view.
Real estate agents need to increase their level of professionalism within the industry so that consumers can clearly understand and appreciate the importance of working with a real estate professional.
Anything less leaves the industry open to more attacks and, consequently, unwelcome changes.