Above: RISMedia Founder & CEO John Featherston and John L. Scott Chairman & CEO Lennox Scott co-moderate the standing-room only RISMedia Power Broker Forum at the NAR Legislative Meetings on May 7, 2024.
During RISMedia’s midyear Power Broker Forum on May 7, the standing-room-only served as testament to the concern surrounding the settlement-triggered changes on deck for the industry this summer. While coming together to candidly share and strategize is the longtime goal of RISMedia’s Power Broker Forums, held semi-annually at the National Association of REALTORSⓇ (NAR) May and November conferences, the need to do so reached a fever pitch in D.C. last month as the August deadline for mandatory buyer contracts and MLS changes steadily advances.
RISMedia Founder & CEO John Featherston set the stage for the Forum, held at the Walter E. Washington Convention Center during NAR’s recent Legislative Meetings, with the important reminder that real estate professionals have long served a noble and irrefutable cause: helping people achieve the American Dream of homeownership. “And is not just about shelter,” said Featherston. “It’s about wealth building. What we have faced in the last year is a challenge to that because the way you did it, some people claim was irresponsible. How do we go about charting a new course of strategies in this changing landscape? “
Featherston was joined by a panel of savvy brokerage leaders from across the nation to help answer that question:
Co-moderator:
Lennox Scott, Chairman and CEO, John L. Scott Real Estate, Washington, Oregon, Idaho and Northern California
Panelists:
Terrie O’Connor, Broker/President Terrie O’Connor REALTORSⓇ, Northern New Jersey, Southern New York
Rod Messick, CEO, Berkshire Hathaway HomeServices HomeSale REALTORSⓇ, West Virginia, Maryland, Southern Pennsylvania
Barbara Betts, Broker/CEO, The RECollective, Southern California
Dave Legaz, Partner/Broker, Keller Williams, New York City; 2023 NAR Broker Liaison
“With my friends and colleagues that are up here today,” said Featherston, “we are going to try to give you some compelling suggestions, answers and proven strategies that they’re doing to positively impact the lives of their agents and their customers.”
Above from l to r: John Featherston, Terrie O’Connor, Barbara Betts, Dave Legaz, Rod Messick and Lennox Scott
Proactive like never before
The Forum panelists quickly reached consensus on a critical point: that brokers must take a proactive, hands-on approach to leading their people through this volatile atmosphere.
Scott explained that his firm operates under the tenets of a specific, daily success plan: positive mindset, skill mastery and personal-engagement activities. “All three of those are really coming into play in today’s market because a lot’s going on within the real estate industry,” he said.
He also painted a picture of what today’s real estate professionals are up against. “We have the buyer representation. We have the marketplace—inflation went up, the 10-year bond went up, interest rates went up. The normal supply of resale listings coming on the market—homeowners are not moving in the normal sequence. That’s the backdrop.”
Scott then turned to the panel to garner their strategies for navigating the current landscape. Messick said it all begins with education. “We are leaning in as a leadership team to help our 1,300 agents really understand what’s going on in the marketplace, not only on the legal side but also the dynamics of the market,” he said.
Messick is not deterred by the gravity of current circumstances, and like other leaders, is drawing upon pandemic times as a proof point for overcoming anything. “We are really good in crisis,” he said. “We did great in the pandemic, we grew in the Great Recession. We have really become a safe haven in the storm for a lot of people.”
On the tactical side, Messick says he is “flipping every rock.”
“We are looking at everything we do to make sure that it is creating value for our agents and consumers,” he said. “What we’ve always done is not a reason to continue to do something. So we are absolutely looking at every system, every process, everything we do and making sure it drives value for our agents and for their clients.”
Legaz stressed the importance of being vigilant about the basics of the business that have historically driven success, such as recruiting and retention. The turmoil in the market shouldn’t change this game plan—in fact, it should kick it into overdrive.
“The industry has been faced with a lot of headwinds—interest rates going up, lack of inventory, multiple-bid offers where buyers actually get discouraged and, in my marketplace, are no longer looking. And we’ve encountered these before,” he said. “I think we’re going to survive, and even go stronger and be able to gain more market share during this.”
Betts agreed with the importance of education and getting back to basics in today’s climate, adding that the most important basic of all right now is building relationships. “I truly believe that the most well-educated, well-trained agent with the best relationships is going to win in this new market,” she said.
And building relationships begins with strengthening the relationship between broker and agent, she explained. “We’ve been having a lot of small meetings with our agents and hearing their concerns, and as a result, we’re able to communicate with a little more calm than was first initiated with all of the settlements and things that were taking place,” she said. “One of the things that we keep talking about is that this is an opportunity for a flight to excellence.”
O’Connor has also taken a hands-on approach with her agents to support them during these uncertain times, turning to personally creating videos to reach agents who are not available for face-to-face interactions. “In our various forms of communication, social media, everything, we’ve tried to let them know that we’ll be fine and we’re going to be doing things a little bit differently,” she said. “New Jersey did not have a requirement that you sign a buyer brokerage agreement. So for the entire state, it’s pretty much brand new. This is a challenge that we’re working through and spending a lot of time on.”
Leading in the new era of buyer representation
The challenges of moving into a landscape where buyer-agent agreements are mandatory varies from state to state and, therefore, each broker panelist is confronting a different degree of difficulty in preparing for the new regulations.
O’Connor reported that (at press time) New Jersey did not yet have a final form in place. In the meantime, she is drilling down on education, reviewing initial drafts of the form with her leadership team and agents, and addressing questions head-on. The ongoing communication plays an important role: It fosters calm and builds confidence.
“Agents are beginning to be a little more comfortable all the communication,” she explained. “A lot of it comes from the leadership—my team managers, my EVP. You have to believe what you’re doing is good. You have to believe in yourself. And if you do, it’s contagious. I’m trying to share with my agents what a wonderful opportunity they have in this industry. Now we have to pivot and do something a little bit different, but let’s see what our opportunities are and how we’re going to do this together.”
In California, the picture is different. Betts was part of a buyer representation task force for the state, and was involved in rolling out a new buyer representation agreement about 12 months ago. At her firm, therefore, agents have already had a year to get used to the new normal.
“I told them this is the time to practice, this is the time to get uncomfortable,” she said. “This is a time to learn it before you actually need it…helping them understand that I believe it’s in the buyer’s best interest to do this. It’s better consumer protection. It’s better transparency.”
Betts also sees this as an opportunity to build agent confidence. “When they understand why they’re doing it, they are more confident in delivering it to the consumer and consumers are going to be comfortable signing that document with us when we are confident in it,” she explained. “We have to train and empower our agents—help them understand why they’re even doing it to begin with. Not just that it’s a new law or a new MLS rule, but why we are actually doing this. My agents aren’t scared at all because they knew their broker had a new standard and that they were going to start using it.”
Legaz is also a big proponent of education, even beyond his own company. He utilizes a custom feedback question available through ShowingTime to ask if an agent would be interested in attending a training class as his guest. Not surprisingly, the greatest interest of late has been in buyer consultation training. While this strategy serves Legaz’s recruiting goals, it plays a far more noble role.
“Whether they come to our company and join us or not, either way, we’re making the industry better by providing the education,” he explains. “We have to make sure that we meet the needs of our clients and our customers, and more importantly our agents, and give them empowerment and support.”
Messick had been keeping agents informed throughout the development of the commission lawsuits and launched a more hands-on effort after the Burnett verdict last October. “We said, ok, now it’s time to start making sure you’re getting ready for change now,” he said. “We started immediately with buyer representation training, improving buyer presentations, improving the way that we communicate value.”
When Messick first started the training, attendance was about 30% of his agent force. A couple of weeks ago, he said, there wasn’t a seat to be had.
“They’ve got a real need,” he said. “They’ve got to really, really focus on their skills. We’ve got some amazing buyer’s agents. They do a phenomenal job, and they’re already out signing in Pennsylvania and Maryland. Buyer agency has been pretty much standard. We’re just getting better at it.”
Scott wholeheartedly agreed with the panelists, explaining that there has never been a more important time for skill mastery. To that end his firm hosts five individual training sessions that dive deep into the specifics of seller marketing consultations, buyer consultation, buyer representation agreements, purchase agreements and dual agency. The classes are detailed and hands-on, presenting agents with an opportunity to roleplay and practice so that they can “walk in confidence,” says Scott. “Skill mastery eliminates worry; activities eliminate worry.”
Scott added that training around buyer representation is essential for agents in order to deliver a service that clients both need and want. As of the first of this year, the state of Washington requires all real estate practitioners to provide buyer representation agreements, he reported.
“Our experience is that all of our buyer clients want representation,” said Scott. “Also, I believe sellers want the buyer to have representation. Otherwise emotions get in the way. That’s the environment we’re in. People want representation. We bring true value in what we’re bringing forward.”
Above: RISMedia Founder & CEO John Featherston
Shining a spotlight on value
Featherston then shifted the conversation to the importance of value, which will likely be under the microscope as homebuyers confront paying agents commission.
“We all know money follows value, and if you’re articulating your value better than we’ve done in the past to combat misinformation, those clients will turn to you,” he said. Panelists are committed to this mission and actively working to help agents amplify and more effectively communicate their value proposition.
“Right now, we are helping our agents double down on their relationships, double down on their database, double down communication to their database,” said Betts. “I believe in communicating to our relationships that we are professionals, that we are fiduciaries—we are more than salespeople. We have to make sure our agents are out there telling the right story. We have to make sure they’re telling the consumer, ‘We are the professionals, we’ve got this. We’re not scared of the headlines, we didn’t do anything wrong.’ So as a brokerage, I’m creating marketing for them for the consumer because I believe the better educated the consumer is, the better it’s going to be for everybody.”
According to Messick, explaining agent value also involves dispelling existing misperceptions, such as that the buyer’s agent’s job is to simply find someone a home. “We’ve got to get better at demonstrating what happens not only up to the transaction being signed, but between then and closing,” he said. “And then what value do you provide as an agent even after closing and servicing that relationship going forward.”
Messick also imparted critical advice concerning referrals. “Working by referral is the most powerful thing that you can possibly do,” he said. “But working by referral does not mean waiting on a referral. ‘Working’ is the key word there. Waiting is not an action. You’ve got to take that bull by the horns and you’ve got to be omnipresent and keep yourself engaged.”
While O’Connor founded her company 33 years ago with a commitment to supporting agents and providing them with services to increase their value proposition, a new era of standards will change the playing field.
“We’re going to make every effort with all of our agents to teach them, to help them, to communicate with them,” she said. “But there are agents that are not going to be able to pivot. And one of the things that we’re discussing is raising some standards. For example, we’re going to make sure that all of our agents take the ABR course, and we’re going to create opportunities for education. If they don’t participate in these things and don’t follow through, then we really don’t want them representing Terrie O’Connor REALTORSⓇ because in this market, when we’re all talking about value and showing what our worth is to the consumer, the most important thing that we have are our agents. We have to take this opportunity to do things better.”
Scott concurred and emphasized the need to embrace the changes ahead. “Be proactive while you’re being business smart,” he said. “Being proactive moves us forward and gets things accomplished.”
Messick added that moving forward proactively and navigating change will require courage, but reminded the audience what real courage looks like. “Courage is not a lack of fear,” he said. “Courage is being scared as hell and taking action. So get out there and take action.”
More than 100 brokerage executives and industry leaders will take the stage to discuss trends and issues at RISMedia’s CEO & Leadership Exchange on Sept. 4 at the Mayflower Hotel in Washington, D.C. Learn more and watch for details here.
