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Readers may have noticed a recurring commentary in recent technology columns, and anyone who showed me their product in the past few months has heard a rant from me on why it’s time for proptechs to adjust how they derive solutions.
It’s time to switch focus away from the agent and back to the consumer.
This take has been surfacing recently in conversations about Zillow, the commission lawsuits and a few proptechs I’ve favored in 2023. In case it’s news to anyone, consumers aren’t loving real estate agents right now.
The National Association of Realtors, the one organization with the most say in how people view the real estate industry, can’t seem to make Velcro® work right now. Its leadership issues are only the beginning because the multitudes of billions of dollars in legal ramifications it’s facing are poised to suck the marrow out of its legacy lobbying power.
Inman’s Andrea Brambila spoke extensively with attorney Michael Ketchmark throughout her dogged coverage of the industry’s current legal hurricane. Ketchmark, more torchbearer than pitchfork wielder, isn’t hiding his intent. Here’s what Brambila reported, and Ketchmark said, on Nov. 7:
“The U.S. Department of Justice and the attorneys for homeseller plaintiffs in the Sitzer | Burnett antitrust case have entered into ‘very significant and ongoing’ talks with the aim of shaking up how the real estate industry operates.
“Simultaneously, the lawyers’ latest lawsuit against the National Association of Realtors, named “Gibson” for its lead plaintiff, will seek damages of more than $200 billion before rising to approximately $600 billion as a result of “trebling,” said Ketchmark, a partner at Kansas-based law firm Ketchmark and McCreight.
“We’re in alignment with what the Department of Justice wants” — to make real estate part of the “free market” and to get NAR out of “rigging the system,” Ketchmark told Inman. “We think this is a real opportunity for change.”
Turns out, Sitzer | Burnett was merely the initial rumbling, a signal for what could be a tectonic adjustment in how the industry functions.
Jason Haber, a Compass agent and critic of NAR, told The New York Times on Dec. 27 that what’s underway is “an extinction-level event.”
“You cannot dispassionately look at the facts and say that everything is OK,” Haber said.
Randy Airst, CEO of real estate data analysis firm Exceedant, told The Times that “the money is not there,” to perpetually battle the court cases.
If these cases do indeed cripple NAR, where will the industry turn for leadership?
As you sort that out, know that you’re in a fishbowl. Consumers are watching. This isn’t some high-brow business case above the heads of your customers. I’ve already had a local agent ask me how she can sell someone on paying her for representation after collecting $40,000 in commission as a buyer rep. “No one is going to pay that out of pocket,” she said.
No one can say for certain that’s where this is headed.
What I think we can say is that now more than ever, real estate agents need to be able to communicate their value well beyond merely sharing listings and the names of cute nearby coffee shops.
What they want is a smarter, easier way to buy and sell. With pace comes affordability. A lighter, shorter transaction cycle is cheaper for you and for them. This is where proptech augments the formula, because it, too, needs to be held accountable for where this all leads.
Real estate technology leaders are bound to help their primary customers with the challenge of proving why they remain essential to the buying and selling of homes. To do that in the best way possible means starting with the consumer and working backward. Solve their problems first, then sell that solution to those who can deliver it.
Trying to fix widespread industry problems from the inside out is, in part, why you’ve heard of Michael Ketchmark.
NAR continues to think the best way to serve the market is by serving itself, a proposition on which it is betting its very existence, and a lot of members’ money. All of it, in fact.
Proptech executives, brokerage innovators and MLS boards need to think like Venmo, Slack and Zoom, process shrinking solutions that not only heal pain points but cure them.
All the corner pieces of the puzzle are on the table, from consumer-grade fintech to prescient, AI-driven home search, among other pertinent solutions. Concentrate on ways to make homebuying and selling simple, and then integrate the agent.
It’s clear NAR doesn’t get the picture.
In 2024, let’s see what your proptech partners can put together. It’s certainly not going to cost you more than the current model.
