The Sitzer/Burnett trial is shaking the real estate world. The lawsuit has left Realtors and agents with more questions and concerns than answers.
If you are a Realtor, it remains to be seen how this will affect you and how it will change the way homes are bought and sold.
But it is certain that things will change.
Keep reading for a summary of the case and some of the changes you may face as a Realtor in this landscape.
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Highlights of the Sitzer/Burnett Trial:
On October 31st, NAR, HomeServices of America, and Keller Williams were found guilty of conspiring to inflate commissions through the NAR’s Clear Cooperation Rule.
The Main Issue: Although this case had multiple threads, the main accusation was that cooperative compensation and the requirements for a seller’s broker to offer compensation to the buyer’s broker are anticompetitive. The jury decided that the NAR’s Clear Cooperation Rule created a conspiracy from the brokerage level to inflate commissions.
The jury in the Sitzer/Burnett case awarded nearly $1.8 billion in damages to the home sellers in the case. (Now, the class will open up to other home sellers to join.)
Within hours of the verdict on October 31st, the lead attorney for the plaintiffs in the Sitzer/Burnett case, Michael Ketchmark, filed a new suit against NAR, Compass, Redfin, Elliman, eXp, Weichert Realtors, United Real Estate, and Howard Hanna Real Estate.
Clearly, this battle is far from over. As a Realtor, you need to be prepared so you can adapt to changes in the future.
5 Possible Changes because of the Sitzer/Burnett Trial:
Here are five things that could happen as a result of the Sitzer/Burnett case:
- Cooperative compensation could be banned entirely. This would end the longstanding practice of sellers covering the commission fees for the buyer’s agent.
- Buyers negotiate and pay their own agent directly, or the sellers will pay their agent and also the buyer’s agent directly, negotiating each rather than splitting fees.
- Buyer-broker agreements (of some form) could be required in every state. A minority of states already require buyer-broker agreements.
- Access to MLSs around the nation could change as the member-controlled listing structure goes under scrutiny.
- Copycat lawsuits could crop up nationwide, inspired by the success of the plaintiffs in the Sitzer/Burnett trial.
You may feel overwhelmed. Anxious. Confused.
This is not the end of the industry. This just signals change.
Change is always a bit scary at first. But most of the time, the fear of the unknown dissipates on the other side. Your experience and skills are why your clients trust you to navigate the sale or purchase of their home.
You are prepared to take this in stride.
4 Ways Realtors Can Prepare for Industry Changes
Here are four ways you can prepare for what’s ahead:
Define Your Value
Be prepared to articulate the value and services you provide to buyers as they look for representation. You may need to create a list of all the activities that go into helping clients buy a home.
Find Your Niche
Identify your client niche so you can provide maximum value to buyers and sellers alike
Cultivate Strong Relationships
The old adage rings true: ‘your network is your net worth.’ Spend time and focus on fostering relationships with your clients and other industry professionals.
Listen to podcasts, keep an eye on future cases, and plug into the support your broker provides so you can prepare and adapt.
There will be new developments as the results of this case and future lawsuits play out. This is not the end of the real estate industry. Rather, it’s the opening of a new chapter. You may need to brush up on negotiation skills, but your relationships will carry you through. Prepare and adapt now, so you can face change with confidence!
Want to Learn More?
If you have questions and want to chat, grab a spot on my calendar!