Episode 04: Awards & the N.A.R Lawsuit

Big wins & big news! This week Adam & Koby unpack the awards at the Berkshire Hathaway national convention AND dive into the N.A.R commission lawsuit settlement. What does it mean for you? Tune in to find out!

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that's when probably shit will get a little bit dicey. I'll just say it that way. I think it's good at least understand the pros and the cons. Now it's going to be more transparent, which it always has been in our community. It's been more upfront, but it always has been. But I think at the end of the day, real estate agents need to do a great job of explaining what they all do, because sometimes clients don't understand. you look at everything rationally, not emotionally, you can normally get that deal together in a very in a way that's seller's happy buyers happy All right, Colby, Sway here. Adam Briley I'm really excited. We got episode four coming at you. We're going to talk about the Berkshire Hathaway conference that we were just at because we're a part of Berkshire Hathaway. And I was also just with John Black at the Maverick Conference in Nashville, Tennessee. If you don't know who John Chadwick is, then you're really missing out because he is the coach amongst the coaches. And then we want to talk about the NAR lawsuit a little bit today. Unless you live under a rock, you probably have heard about the lawsuit making headlines. Why Yeah. So that was myself and we had a couple of our top agents go, Aaron and Skyler. Those two went up on stage to collect our award for getting number one in units. Number one in the country. Yeah. Number one in the country. Out in the Berkshire Hathaway network. So I was really cool. And then we got number two for GCI, which was really actually impressive because we are competing against, you know, like the in California and you know, bigger markets where Yeah, where they have much average iron. Yeah. Higher average sales price. So that was really cool to get that to. So I would say the things you know, it's always good to go to those because you get to network with other agents kind of really see I really, I get more from just going like going deep with them on the sidelines, right. Is you not even getting a ton necessary at the convention? You get to hear some cool stories from the speakers, you know, get inspired, get motivated. I know Skyler and Aaron both got some really good nuggets on like tactical things that they can do that they share with the whole team. As far as marketing tactics or homes, you know, community videos, you Yeah, I know they talked about like YouTube. Stand on YouTube. Yeah how to get your name out there, and then using some of the tools we have like fellow, Yeah yeah totally. Yeah, yeah. And I think the biggest thing that I found interesting and it's funny because you got to text a little bit ago on this is probably the biggest thing that I heard from other team leaders was, Gosh, we're busy, we're busy in production, but they're not always able to keep their team members busy and like a very so it's what going into March here and we were just there a couple of weeks ago and some of the conversation I was having. Some of these agents haven't sold a home since like October of last year. So they're like, what? You know, like, yeah, So the common theme was like, what do we do? What should we do here? How do we how do we do this? And so we kind of talked a little about like what you do as far as just it's simple accountability, having standards on the teams and, and then, you know, the other cool thing too, is, again, when you start seeing, which we talked about before, having your new agents start leading the way, and then your your vet agents are like, gosh, like, man, they're out here crushing it. And they're, you know, they're following these new standards of of what we're expecting as new agents join our team. So, yeah, that was really interesting here, too, because again, sometimes as a team leader, if you don't have someone like yourself that's really running the show, you're so focused on your own business. Kind of like what I do. I'm in production and I'm busy with production right now. If you don't have someone like you in place, those things will fail. Like that's, you know, Yeah, it's hard to set these standards and have accountability and and most of the people I talk to, they don't have someone like that. So they're trying to figure out that balance too. it's hard because like you said, it's you know the team leader is good at maybe selling or in production and it's hard to move the needle on a person right. Because, I mean, even the person that we message earlier was like, I wish they just did what I did. But I you know, I get that. But if they were like you, they would be running their own team. Yeah. Yeah. Yep. The other thing too we went over is like is noticing that like, you know, the whole I buy like offering an instant offer for, for clients I think is definitely becoming a more popular thing because I mean I literally right before we started this, I had a client call me, leave a message. And you know, we always encourage folks to list their homes. They're going to put more money in their pocket. But I'm finding that more and more they they want their time back. They don't necessarily want more money in their pocket. They want the convenience. They want the easy route. They want to be able to pick the closing day. They want the done option. They don't want to have to go through showings or anything like that. And, you know, as the market has adjusted and it's become more of a normalized market, that is something. And so that was a pretty big conversation topic that we had at convention as well. And then, of course, that convention we talked about the narc. I mean, we talked about the lawsuit stuff, right? I don't think that the our lawsuit just got announced last Friday. So technically that wasn't known at convention. But the lawsuit stuff has been going on and on. But I'll say, too, like now that the NAR lawsuit came out, it definitely solidifies us. Being at Berkshire is really important, like especially in Omaha, being a part of a bigger, larger brokerage to have that protection and then making sure we're all on the same page to navigate these waters specifically, too. Well, as unknown, it's just a change, right? It's it I think the headlines are you are going to be able to afford a more expensive house now because homeownership is going down, which is not proven to be true. You're not going to have to pay an agent anymore. It's going to save money and concessions and fees. That's not necessarily true. They're alleging that all these things that they're alleging isn't necessarily true. So it's just like navigating this is a change. This is something that's adapting and it's just like I tell people all the time. But real estate agents back in the day, they used to bring a literally and your dad would do this, would bring paper copies of listings or magazine articles of the houses. Right. And then somebody came along and put them on on a website and you're like, well, this is going to be it's a change or a lockbox is now in the house where before you won't have that. So it's just because commission is being talked about. There has never been a standard commission ever. And commission necessarily isn't going up or down. It's always been fairly negotiated. Yeah, It's not like any of that is change, but it's the media is just obviously not doing it every day or just a little unknown. And I'm not saying they're doing a bad job. It's just people don't know what. They don't know. Well, it's a lot of clickbait. It's a lot of fear tactics, I would say. I definitely don't see prices going down because of this. I don't I don't even see how I guess I could see where someone would would think that. But I mean, it's driven by supply and demand, right? So I do see it changing the industry for sure. I know how it's going to fully affect it. I don't know. There's five. Years. Yeah. And there's always a downward pressure on commission, but that's nothing new. I mean, that's been I've been at this for 17 years and there's always been a downward pressure on commission because you'll always have someone come in and offer to do it for cheaper period. And so, you know, that's what we call discount brokers, right? So they there will be different people that probably come in and try to do the clickbait of getting people on this NAR, using the NAR lawsuits to their advantage to try to get people to do it for cheaper. But you know, a part of a big part of that in our lawsuit was being transparent. Now, that's one thing that I feel like us, our team, our brokerage, I mean, I would say probably about most of the people in real estate agents in Nebraska and Iowa have always operated this way. So I don't think this is really going to change how we operate. It might add another addendum or two. No big deal. But we've always been a very upfront on commission because let's say you go in and commissions in our marketplace again are 100% negotiable. There's no set standard. We certainly weren't colluding. We're probably not smart enough to collude, you know, on that stuff. But is, you know, in in our market place, I would say it probably ranges realistically, what, 5 to 7% on the high end, if you're talking in averages every once. Well, some people do it higher than that and there are some that offer a lower than that. And there is of course, the force of by owner services that say, hey, pay us $1,000 and we'll put it up on the MLS and then you choose what you pay out. But we've always been like because as a real estate agent, let's say you go in and you're let's use 7% for the sake of conversation. If you go in on that listing appointment and you say, okay, 7% and that seller, you want to tell the seller, No, I'm not getting all this. Like, yeah, it's a big number. So you want to tell him? Yeah, you know, I would love to take all this, but in reality I dol a big chunk of that goes to the buyers brokerage and then it gets split to them because if you didn't communicate that to them, they're just thinking in their head. Well, you get this whole number. Yeah. And so you want to be able to communicate that to them. And we always have because it's almost like it almost softens the blow of us, not because we really don't collect that much right. And so, you know, we, I feel like and that's most agents we've always communicated that community. Yeah. And that's on the seller side, right. So we always say yeah we do offer that. And I will say this, most sellers that I've talked to, either I've brought it up or if they beat me to the punch and they bring it up. Since the NAR lawsuit was announced last Friday, they the general conversation is the sellers are saying that's what we would want to offer a payout. We don't see why by not offering it how that would help us. was that of that advantage yeah because now less traffic is going to coming three door essentially. Yeah now we I think we do have to be careful of how that's talked about how that's presented with the way because it's like yeah it is your choice but you, you play it out of how you think that's going to affect you. So I feel like most people are talking to you. They see the advantage of offering a payout. They understand that costs more money to them, right? But they, in their mind, they're like, Well, we're paying this anyway. Let's offer a buyer's agent commission, because if we leave it on the buyer, that could eliminate some of these buyers that don't have the extra money to pay their buyer's agent. and let's think about it so today, a first time home buyer typically is struggling with the down payment because it's expensive, guys, to buy a house. Right? Even in our area, the average sales price is 350. It's expensive for closing costs. Right. So as a let's say on the buyer side, if you're not paying their commission, let's just say for the buyer side, you're going to run into first time homebuyers probably can't afford a compensation or an extra payment, so they might have to buy a less expensive house in order to be compensating the real estate agent. And then another part of it is you run into clients that don't understand or they're not educated properly. You can't finance this either. So As of right now. it can be a closing costs, but that's cash out of your pocket. Yeah, I think it's good at least understand the pros and the cons. Now it's going to be more transparent, which it always has been in our community. It's been more upfront, but it always has been. But I think at the end of the day, real estate agents need to do a great job of explaining what they all do, because sometimes clients don't understand. You're taking calls at 1030 at night,

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00 at night. You're talking to contractors, you're talking to title companies, mortgage companies, you're at the house inspecting certain things. You're pointing things out that they don't notice. You actually provide a ton of value as a realtor that clients don't actually see. Now, this gives you the chance to explain all that you do. Yeah. And so I see what happening maybe for a little bit as it might go through where like it it's going to be a performance slash, value driven world, right. Where you really have to make sure you're showing your value and and providing that value, which is as we should. And so, yeah, I feel like everyone that I'm talking to is in agreement. Yeah, more transparency is totally cool. Like we're totally cool with that because, you know, if you really look back at the last like ten years of transactions, it probably wasn't like buyer's agents weren't always like, Yeah, this is exactly how I'm getting paid because you just knew, okay, here's what the MLS payout is. I know what I'm getting paid. No big deal of agents said, you know, you don't have to worry about it's covered or it's Yeah, yeah. That definitely wouldn't be the right. Yeah. You know, And so, you know, and I do feel like we definitely that as a team. I'm just saying I feel like the industry has always kind of said that, just use an agent. It's doesn't cost you Yeah. No it does kinda because it's kind of baked into that price. I still don't see how that's going to reduce the price of the house, but I do see where it might be a six month, two year process where they go with a like tax driven type world and then or they go with the lowest agent. The possibility or option, and that's when probably shit will get a little bit dicey. I'll just say it that way. Like things just won't happen the way they should, and then they start realizing, okay, I probably really, you know, what's that? What's the say in like, I'm going to I'm going to butcher it. But like, expenses is cheap or cheap is expensive. Cheap is expensive. Basically you got the cheapest rule and it generally is going to cost you the most in the long run. Now, because I would tell an agent, let's say. So the average pay on our marketplace is 2.4 average. Okay? If you look at everything right now, if that gets driven down to 1%, let's say, or a flat fee, I would probably tell a real estate agent I wouldn't even do it. I there is no way I would do this job as a buyer's agent and take 1%. It's not worth it. I would rather go work at McDonald's and flip burgers than. Be a little more. Yeah. You know, because the stress, like you said, it's a it's a stop. Not only do you have to constantly react to your clients, right? That's why we do it. It's so you got to do that. And then you've got to always make sure you're building your pipeline. And so you being on toe for some of your clients and the stress of building like work it worst. You mean you wake up every day jobless, worrying about your next deal, doing all that for 1%? I don't think I would tell anyone to do it. I wouldn't encourage them to do it. I really want it. So it will be nice, see what happens. They're of like really quick. Just think of this right an attorney today will work on a will in an estate plan or they will offer you to set up an LLC. It was an ad just yesterday, 199 to self estate planning 199 for this website. But what's the level of service? And they could do that just like we're going to see on this market. You can do this for at a lower lower fee like a tech play but what's the service you're losing or what are you missing, for example? I don't know the company. I'm not going to say it, but if I went and did estate planning for $200 versus a professional attorney, I met face to face. Where they're going to charge you thousands of dollars, thousands and thousands of dollars. Yes, Yeah, Yeah. Yeah, Yeah. yeah. I definitely see it bring in a lot of, like, good things because not the agents weren't already doing the things it's going to. It's just going to force the other agents to do the things that the top ones were already doing. Like so because like if I think of, like when I represent a buyer, it's like it always gets brought up, Well, how much you get paid, you, you literally here's the most payout it's highlighted. I highly you know you highlight it so this one I'm getting paid right here 2.2. 4%. For example. So that's and I would say if I think of the other top agents in our marketplace, I know they're doing that same thing and they have for a long time. So there's there's no like hidden nest. But yeah, so yeah, it'll definitely level people up and that's probably the exciting thing, you know, And a lot of us too, if I think back over the last ten years, Mark Brace, he's in Grand Rapids, I think Michigan runs he runs an excellent team, excellent team. He's always said to where like I there needs to be there needs to be a another level of an agent meaning like it, it's harder to get your license. There's like basically there's this next tier of an agent and and those are the ones that stand out. So kind of like this, what's going on is in line with what Mark has been trying to like, push in his mind of what needs to happen. So a lot of your top agents want this anyway to. think about it they watch HGTV are Yeah, I. Yeah. Yeah. are aspiring actresses or actors. yeah, and they're flashing these massive numbers on there. And that probably has hurt real estate agents because these massive fees. Right. Like I think if I think if if if those kinds of shows didn't glamorize what the profession is and they showed what it was, if they showed what a realtor did on TV, I would be surprised that people actually did the job. Well, because what's the average agent make is in it like 37,000.$38,000 last time I looked. Yeah. That's across the U.S. And I would say for Omaha, Nebraska, for our marketplace, our price point, that would be a very true statement. And it might be. Less it probably is closer if it's our broker says we just got this stat a few weeks ago 70% of real estate agents sell two or less houses And that's scary as a client because now you have someone that's not an expert, not a professional, not doing it every day, doing it part time, guessing, making things up, not saying they're all in, do that. But what you're going to find is they're not a professional and you need to hire a professional for the largest purchase of your lives. Yeah, Yeah. Yeah. Yeah. You Yeah. The yeah, you'll it'll be very interesting what happens here. I still think we're six months out to a year before we really see the effects on a national level about it really affects us But the changes that will start as of July of this year is every year. And that's one thing that you said. So one of the goals for our team is so starting July, every single buyer will have to sign an exclusive buyer contract and that will tie that buyer to that agent. It spells out the fee that they're required to pay. The length of the. And they'll yeah, and the length of the contract. And that's a pretty new thing. Not a lot of buyer's agents do that in our marketplace right now. So but now it's going to be forced upon us to do it and that's fine. That's great. You know, so one thing I know a priority for you is going to be making sure that we really lock in our buyer presentation consultation. And because to go over, here's the value we provide, and then here is the contract and making sure that contract is being explained properly as well. So that will be a big focus for our team as well to making sure that all agents on our team have that presentation locked in because you don't want to just pay sign this contract, right. You want to make. Yeah, you want to make sure that's presented properly and you and they know like a seller signs a listing contract. That's a legal binding contract, right? They know by signing that contract what they are on the hook for. As far as commission goes, a buyer's agent or a buyer with that buyer's agent now will be a similar type contract. They will then know what they're going to be on the hook for, for that fee, whatever is negotiated. See And we see today, 95 90% of the time a listing client sees a benefit to pay the buyer's Well, let's talk about that too, because we were talking we were talking about do agency sales meeting. And so right now, do agency is a legal thing in our state and want that. And but in most a lot of states, it's not correct. So the other because what I said or joked about was the next round of lawsuits will be well buyer's agent says, well, I don't want to have to pay my buyer's agent this commission if especially if the seller's not willing to pay it, well, then I'm just going to contact the listing agent directly. Okay, cool. What do you think the next round of lawsuits is going to be? Well, who did you represent? Me or the buyer? Or me or the seller? And now literally be the next round of lawsuits. Well, that morning it was the buyer that you Yeah. Yeah. And so I used to do deal agencies, get them out and a lot of agents like actually do agencies because you have one less. I'll just say this way you have one less ego in the in the mix. And you can, if you look at everything rationally, not emotionally, you can normally get that deal together in a very in a way that's seller's happy buyers happy boom. Everyone's happy, right? But I can definitely see them changing it to where in our marketplace. I know it's even been talked about. Are we going to are we going to let two agencies be legal moving forward? Nothing's changed yet. So as of right now, they are legal. But that will be interesting, too, because that could that would change it, too, of a next round of lawsuits. Well, who did you represent to so. And you think the real estate agents just going to pay themselves less? Absolutely not. And think of this this is also that can get dicey is if three offers come in and one of them is with your buyer and you represent the seller dual agency and then two others come in with real estate agents that are going to be a commission paid towards them. So therefore you're getting paid less, right? So if I took the dual agency, let's say 6%, I'm going to collect 6% more money or these other two real estate agents bring an offer in and now I'm only collecting, say, 3% and I'm paying them 3%. Am I going to and this is this is where you get in trouble. Where is that? Where is that going Ethical line drawn that. Yeah, that's. Yeah. And I think a lot of what we're talking, what we what I've heard talked about as far as like as this all started happening as a but maybe two issues was okay we're probably all going to go the path of not doing dual agencies and it would just be if the buyer contacts us directly, we explained to them, Hey, we're representing the seller period and so we're not going to treat you as a client. You're going to be treat as a customer, which is a different representation. You still have to do everything ethically, morally sound for that person, that buyer, but you represent the seller, period. I always joke with people I, Adam Brailey would not be good at representing buyers and I don't represent a ton of buyers because I'm always geared to sell the house for the most amount of money, best price, best terms and all that, you know. So that's but again, that's going to be a lot of like listing agents that's going to be in their head. Well, I want to sell this because if you sell that for a good price and really good clean terms, what do you think you're going to get down the road? You're going to get referrals from that seller for other potential listings and that's what you want. That's how you last in this business. You list to last. Yeah, I'll be fine. It'll be I like it challenged you. It shifts, it pushes change. And I think the thing with you and I as we've always been like, I mean, look how much we've changed over the last like four years. It's been insane. Which is. It's awesome. let's just adapt so Yeah. The and there's a lot of clickbait crap out there, a lot a lot of clickbait, a lot of negative vibes around it. I don't I don't necessarily see it being a bad thing. It's just it'll change, period. Yeah. And those who aren't willing to adapt, but that goes probably with any business you will fall behind period. So it's either you want to be you want to be with the party or the party is going to leave you. And we're at a point in the next few months, in the next year, if you're not staying ahead of that party, they're going to be they're going to be gone Yeah, Me Monster. look at all my trophies. Yeah, Yo, you know, You know. Yeah, now What do you think about that? I, Well, I mean I even you that Yeah. Just mean. Yeah yeah. And I'm I'm, I'm guilty of that at times too. I it's funny because like when I'm on an appointment I literally will stop check them, you know? Are you is this making sense. Am I talking too much Because I don't like when I go on an appointment. I don't bring up I don't being a presentation with me anymore. I used to bring the PowerPoint, right? Or like big fancy brochure or pamphlet or whatever. And now it's like, I don't do any of that because it was all about is the me monster. And and they would get the glass, you know, I'd have this shell into them and they'd get this like, glossed over look on their eyes. So yeah, you try to I tell them to like, Hey, I'm going to have like a seven minute pitch on me, and the rest of that time is going to be spent on accomplishing your goals, formulating a plan and then and going for that, too. Yeah. I mean, the reality is t is like you got to show your value, right? They want to know that you're going to work your ass off for them. I'll say it that way. And you should. I mean, you're there to make it simple and easy. So I actually was getting I was at the dentist's office last week right after the NAR lawsuit came out. And the the the dentists in there and the person assisting in which they both asked the same question like, hey, is this going to affect your business? You know, I know you work in real estate and before I could even say anything, they said, Hey, my realtor, they both said this. My realtor went above and beyond. I was like, just astonished by how much they do. They made it simple. They made it easy. I didn't have to stress anything. It was the easiest process moving into my house because they set up contractors and they did this and they said it was prior ten, 15 years ago. The dentist did about ten or 15 years earlier or years earlier, excuse me. He had a terrible experience. So he felt like we evolved and we've gotten better, at least from the experience. So I think people will pay a premium for a quality product Yeah. Like you're saying, is when you show up and you talk about yourself, they don't care about that. They care about what you can do for them. Yeah, I feel like you're a mix now of a therapist and and a GC general contractor because this whole week I have a, I have a long pipeline of listings that are about to hit the market. And I have some that are on the market right where I've gotten calls, like I'm out of town. There's the. Lights on. While lights are on. I went to a house and I was turning on lights very commonly at this house because I wanted to make sure it presented itself very well and they just weren't there to do it. Or the figure for a sense light bulbs. Right. One of those went out and, you know, kind of looks goofy when it's out. So, you know, getting that stuff switched out or a lot of times it's like, okay, we need to line up carpet and paint because by doing that, it's going to maximize your value they have to agree to pay for. But we're the GC, we're the ones winding it up. The cost of as you're finding. Yeah. And generally what that's like was Stacie doing her flips. We have all access, all those people, so it's easier for us. It takes away from them and their current jobs. But it's a, it's a, it's a value add, right? Because they're like, my gosh, I don't have to mess with this. All I have to do is approve the bid. That's great. And so that's a lot of that sort of stuff, too, to make sure like it's and a lot of agents do that, too. Like they want to make sure because plus it helps them sell the house to for more money and so, you know, slightly affects their paycheck. It's not as much as, you know, 7% of an extra $10,000 isn't really that much money. Right. But like or whatever that number is. time. Is Yeah. Yeah. It's there Yeah. Yeah, Yeah. But Yeah, I Yeah, Yeah, yeah, yeah. Well in it's and the nice thing is is like the our job is to stay non-emotional, stay rational during all of it. Sometimes agents get a little emotional, you know. But yeah, the whole idea is to say not emotional and it to which, you know, I bring up Amanda Amanda's like, really good at like, staying. I don't want to say she's cold, but she's she looks at it very matter of fact, it's black and white like this is. Here's what I know now from what you told me, Here's your course of action of what you need to do, period. This is this is it. She. Yeah. So. All right, well, anything else? Like anything to end us out? I think that. What we've learned is at the Berkshire conference and with this in our lawsuit, we need to make sure that we do a great job of explaining what are all the amazing things that real estate agents actually do for clients and how we can help them serve to the next. Level. Yeah. Yeah. So sweet. Awesome it guys, if you guys have any questions too, especially on this NAR lawsuit stuff, obviously send us a message. Let us know. There's a lot of stuff we're learning too. So we're that's kind of all evolving. The biggest thing is, like Kobe said, is we will definitely start being more and more transparent of, of course, on the documentation, which I feel like we've done a good job of that, but more so like here's everything we do to really show our value. So thanks for listening and we'll see you guys next time.