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NAR Law Suit Part VII: Is Technology the answer to the Problem?

NAR Lawsuit Part VII

In Part VI of my NAR Series, “Exploring the Implications of the NAR Settlement Towards a More Transparent and Fair Real Estate Industry,” I received a response to the blog from Jocelyn VAS, Realtor and SVP at Final Offer, proposing a tech solution to the problem of transparency and fairness in the real estate industry. She writes, “Check out Final Offer. I have been an agent for 16 years in the DMV. Everyone is talking about the need for transparency, claiming that we will do it or have always done it, but the real question is, how? We must leverage good technology like Final Offer to make the entire experience better for agents and consumers. Agents do not trust agents. What do you think consumers think about agents if agents don’t trust agents?! There is a bigger picture here, and it’s that the entire industry is broken and was trained to do business with a lack of transparency. Who would have thought that as an agent, our superpower is hoarding information? Give me a break! We have to make a change, or we will not exist. This is our time to lean into tech that is here to ELEVATE the industry and the experience for the consumers.”

🏡💡 In Part VI of my #NARSeries, Jocelyn VAS from Final Offer sheds light on the urgent need for transparency in real estate. The time for change is NOW! #RealEstateTech #TransparencyRevolution

Jocelyn’s response highlights a critical perspective on the state of the real estate industry, particularly emphasizing the dire need for transparency and the pivotal role of technology in being the catalyst for positive change. The mention of Final Offer suggests a call to action for adopting tech solutions that enhance transparency and efficiency for both agents and consumers.

🔍📈 Don’t miss Jocelyn’s insights on transparency and tech in real estate! Let’s embrace change for a better industry future. #RealEstateRevolution #TechSolutions

The concern she raises about agents not trusting each other underlines a significant issue within the industry. If agents, who are insiders, harbor distrust amongst themselves, it’s logical to assume that consumers, who rely on these agents for one of the most significant financial decisions of their lives, might view them with skepticism or even mistrust. This sentiment is a stark illustration of the broader problem: an industry culture that has historically thrived on information asymmetry.

🤝🔒 Trust is key in real estate. Let’s address the transparency gap and rebuild trust among agents and consumers. #BuildingTrust #TransparentRealEstate

Jocelyn rightly points out that the industry has been trained to operate with a lack of transparency, where withholding information can be seen as a competitive advantage. However, this approach is increasingly at odds with contemporary expectations of openness and fairness, especially in an era where access to information is seen as a fundamental consumer right and is more accessible now than ever before. Technology is democratizing information, making it accessible to all parties involved in any transaction and thereby leveling the playing field for buyers and sellers and the agents that represent them. By integrating platforms and tools that prioritize transparency, the real estate industry can shift towards a more consumer-centric model. This shift is not only about adapting to the digital age but also about restoring trust and integrity in the real estate transaction process.

📲💡 Let’s embrace tech for a fairer real estate future! Transparency is the key to rebuilding trust. #TechForChange #FairRealEstate

Jocelyn states, the industry is at a crossroads where change is not just an option but a necessity for survival. But the survival of what, I ask? The embrace of technology that promotes transparency and efficiency will be the catalyst for a comprehensive overhaul of the industry’s practices, but are we ready for it?

🛣️🚀 The road to industry transformation is here. Let’s seize the opportunity and embrace tech for a brighter future! #IndustryRevolution #TechAdoption

I agree with Jocelyn that all parties in every real estate transaction need information and complete transparency, but that is not the core issue. This is about compensation. Technology, as the democratization of information, is in fact the linchpin to a long-standing problem within the profession of real estate: the price or value of the services of an agent to represent a seller or buyer. Real estate agents are not alone in being impacted by the availability of information to the consumer, which empowers them to take matters into their own hands. At the same time, the availability of so much information and numerous strategies can work to the advantage of real estate agents who take a consultative or advisory approach to their clients. This approach may increase the perceived value the agent brings to a client who wants to sell or buy a home. Knowledge is power. But is it in 2024, and will it be in the future?

🔑💰 Empowerment through information! Let’s redefine the value of real estate services in the digital age. #EmpowerThroughKnowledge #RealEstateValue

The democratization of information leads to the devaluation of information—and consequently, the diminishing value of knowledge as a proposition in the real estate industry, highlighting a complex challenge for those who are not prepared. This shift forces a reevaluation of how real estate agents can sustain their livelihoods in an environment where information is freely available and the traditional value they provide is being questioned. We are there now, so how can real estate agents earn money in the profession? One strategy would be to stop asking for commission and instead ask for payment for their time to facilitate the selling or purchasing of a home. In essence, to no longer work for free but to value their time and expertise. No one works for free, and even free work, which is what most agents do, costs the agent time and money. If the sale does not happen or the buyer does not buy, the agent is left holding significant losses in time and expenses serving the client. The last time I checked, all servants get paid for their time and effort. They receive a bonus when they have done a great job. Real estate agents need to be paid for their time and receive a commission if they exceed the seller’s expectations or the buy agreement exceeds the market price for the property. If the property is priced at market, the market will sell it without the aid of the listing agent. If the property is overpriced, the market nor the agent will be able to sell it. Unfortunately, the work and time to get to the market decision have many sellers believing that hope is compensation, and it is not. Hope does not pay the bills, and sellers and buyers know this.

💡💸 Time is valuable! Let’s shift to a service-oriented model and ensure fair compensation for real estate expertise. #ValueYourTime #FairCompensation

Transitioning away from commission-based compensation towards payment for time and effort in facilitating or advising on transactions is where we should be. It should have been this way from the beginning and falls in the tradition of all advisors and facilitators whose time and effort yield results. Attorneys do not guarantee results, but they are paid for their time, win or lose. It is time for a more service-oriented model, where agents are compensated for the tangible work and expertise they bring to the table, rather than the outcome of a sale. This model acknowledges the reality that agents invest significant time and resources into their clients, regardless of whether a sale occurs. It also aligns with how the majority of professionals in other fields are compensated for their services.

💼💡 Let’s shift the paradigm! Real estate agents deserve fair compensation for their expertise and time. #ServiceOverCommission #FairCompensationModel

Moving to this model would require a significant cultural and structural shift within the industry. Brokers and agents would need to clearly articulate and demonstrate the value of their services beyond just the facilitation of a sale. This could include deep market analysis, negotiation expertise, network access, and the ability to navigate complex legal and regulatory landscapes—elements that go beyond what can be easily democratized through information technology.

🏠💼 Ready for change! Let’s redefine the value of real estate services and ensure fair compensation for agents’ expertise. #RedefiningValue #FairCompensation

Moreover, the suggestion that agents receive a bonus for exceeding the market price on a property introduces an incentive for adding value that goes beyond the traditional sales commission model. It rewards agents not just for selling a property but for maximizing the financial outcome for their clients. This could incentivize a higher level of service and performance, aligning the interests of the agent more closely with those of their clients. Technology is not the enemy of the prepared agent. Technology is the advantage and can be used to streamline processes, provide richer data and insights, and enhance the client experience, all of which can justify compensation for the agent’s time and expertise.

💰📈 Incentivize excellence! Let’s reward agents for maximizing client outcomes and providing exceptional service. #RewardingExcellence #ClientFocused

Am I crazy for thinking this way? I do not think so. I will not work for a commission; my time is too valuable. So yes, Jocelyn, we are at a crossroads, and real estate professionals must adapt to the changing value perceptions of their clients. By focusing on service, expertise, and added value, agents can redefine their role in the digital age and ensure their continued relevance and success. Technology is not the solution to the problem any more than air is the problem. Technology is the air we breathe in business and is what sustains and grows all commerce on Earth. The solution is much deeper than new technology because technology will continue to evolve and make life easier for those who embrace it and harder for those who do not. The solution is that the Real Estate Industry needs to evolve into a professional industry of real estate advisors, and unfortunately, we are two generations away from that happening because too many agents lack the knowledge, education, technical expertise, and skill to become advisors. As long as they are the majority of the agents in the industry, change will be slow and arduous. They will fight it every step of the way.

🔄🏘️ Embrace change for success! Let’s shift towards a service-oriented model and redefine the real estate profession. #EmbraceChange #FutureOfRealEstate

Ultimately, the real estate industry is at a crossroads, and we who are professionals must adapt to the changing value perceptions of our clients by focusing on service, expertise, and added value. We can redefine our role in the digital age, demand compensation for our time and expertise, and ensure our continued relevance and success in the field of real estate.

🔍🚀 Redefining real estate! Let’s adapt to changing client needs and ensure our profession’s future success. #RedefiningRealEstate #FutureSuccess

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