by Jim the Realtor | Mar 17, 2025 | Realtor, Realtor Post-Frenzy Playbook, Why You Should List With Jim |
One year after the National Association of Realtors agreed, as part of a legal settlement, to change a key rule on real estate commissions — a rule that had long upheld a tradition of commissions between 5 and 6 percent, little has changed.
What was hailed as a watershed has so far produced a mere drizzle.
Some economists predicted the rule change would upend the business model and bring competition to a long-stilted marketplace, breaking the standard 6 percent rate — one of the highest rates in the world — and forcing down home prices as a result.
Though average commissions appear to be slipping, industry watchdogs say that Realtors and their brokerages have used workarounds and pressure on sellers like Mr. Chambers to subvert the settlement. So far, they’re finding success.
“The industry understood the threat to 5 or 6 percent rates right away, so looked for opportunities to discourage negotiation,” said Stephen Brobeck, a senior fellow at the Washington, D.C.-based Consumer Policy Center, who has been vocal about the need for greater consumer awareness in the real estate industry.
Read full article here:
Link to article
by Jim the Realtor | Feb 21, 2025 | 2025, Commission Lawsuit, Compass, Jim's Take on the Market, Realtor, Realtors Talking Shop, The Future, Why You Should List With Jim |
The Compass CEO, Robert Reffkin, is a vocal opponent of the Clear Cooperation Policy. Those in the business call him names and say his only motivation for opposing the CCP is to promote in-house sales.
The point that gets trampled over is that consumers and agents should be free to choose how they want to market the properties for sale.
The CCP insists that listings go onto the MLS right away, and be subject to this nonsense:
They don’t name Zillow but obviously that’s the target.
As we saw yesterday, Zillow is not truthful. They don’t care about doing what’s best for sellers or agents. They only care about making money, and dominating the space.
Unfortunately, the NAR and others turned over the control of the marketing of our listings to Zillow, Homes.com, and Murdoch’s Realtor.com – which is the real disappointment! Realtors don’t own, and we don’t control realtor.com? What a travesty!
Compass is determined to take control of the marketing of our listings.
It starts with getting our listings onto the internet before the search portals. Having the consumers see our listings on our website, and thereby contacting the listing agents who know the most about the properties, is better for the consumer than being funneled to outside agents who are paying for leads:
I’ve been saying for a while that everything happening in residential real estate is heading towards single agency, and eliminating the buyer-agents. Homes.com is directing consumers to the listing agent, and spending millions on advertising to make a point of it.
We’re in the transition phase, and I’ll predict the future.
Compass will quit NAR and the MLS, and go it alone.
If you ask me, we’re already big enough to do it now. I have encouraged Robert to do it, but it’s too early.
But it’s coming.
We will still be happy to cooperate with outside agents – they will just have to find our listings on our website, instead of elsewhere. We’re just doing what Redfin did – make our website more popular with consumers.
What about the Private Exclusives, the title of this post?
They are allowed now, and because you only sell a house once, sellers and agents should have the choice to sell a home off-market. Here are good reasons to do so:
- The allure of an insider deal can cause a buyer to pay more – they are sexy deals.
- Buyers don’t have the benefit of open-market exposure to test the price.
- It keeps the bozo agents from screwing up deals.
We have it happening right now. Our sellers are in escrow with buyers who got squeamish this week. Their agent was NO help. He had no experience or ability to try to help them through their foibles which had little, or nothing, to do with buying the house. Donna and I both had to step in to save the day (another reason to hire us to sell your house!).
It is detrimental for escrows to blow out. Trying to ignite the same urgency as when a listing is fresh on the market is impossible. Every buyer thinks something is wrong, and rarely do a home sell for the same price or more the second time around.
Those are three good reasons for our sellers to go Private Exclusive. I still believe in open-market exposure being the best route but it’s because I’m old-school. The current market conditions are tough and inviting every joker to bid on my listings has consequences, and they’re not all good.
Reffkin and Compass will undoubtedly taking more heat for questioning the CCP in the coming months, but it’s a sideshow. There will be bigger changes down the road – promise.
by Jim the Realtor | Feb 3, 2025 | Compass, Realtor, Realtors Talking Shop, The Future
The Future of Real Estate Belongs to Compass
With a strong foundation built on agent expertise, innovative technology, and a customer-first approach, Compass is well-positioned to overtake Zillow as the most influential real estate platform. As Zillow continues to struggle with profitability and data limitations, Compass is thriving by embracing the reality that real estate is not just about listings—it’s about relationships and local market knowledge.
As Zillow continues to struggle with profitability—marking its twelfth straight year without earning a profit—Compass is poised for continued growth. Real estate is inherently a local business, and Reffkin’s strategy of leveraging a strong network of agents gives Compass a significant edge over data-driven platforms that lack a personal touch.
With Robert Reffkin at the helm, Compass is not just competing with Zillow; it is redefining the real estate experience and paving the way for a more efficient, agent-focused industry future.
As the industry continues to evolve, buyers and sellers will increasingly seek platforms that offer not just data, but also real, tangible support from experienced professionals. With its unique model, Compass is set to lead the future of real estate, leaving Zillow struggling to keep up.
Read the full article here:
https://www.openhausrealty.com/blog/why-compass-will-overtake-zillow-as-the-most-popular-real-estate-platform/
by Jim the Realtor | Jan 16, 2025 | Realtor, Realtor Training |
Every year, there are new laws/rules plus other changes that realtors need to know. Yesterday was the annual review by Gov Hutchinson, the assistant general counsel for the California Association of Realtors.
Gov has been with C.A.R. since 1985 and manages C.A.R.’s Member Legal Services Program in Los Angeles. Gov advises REALTORS® through the “Hotline” on all aspects of real estate law and he trains and supervises other “Hotline” attorneys. Gov received his Bachelor’s Degree in History from Princeton University and his Juris Doctorate from the University of Pennsylvania.
Because he runs the Hotline, he hears all the feedback about the current forms and issues and he is the best equipped to deal with them!
He is a fantastic speaker and we enjoy going every year to learn and laugh with Gov! One agent stomped out when Gov wouldn’t agree with him about listing agents offering a specific compensation to the buyer-agents on the phone. I agree with Gov – a verbal offer over the phone isn’t binding, so why bother?
The highlights:
On Tuesday, Gavin Newsom signed an executive order mandating that homes in the fire zone could not be sold for less than they were worth on January 6th. The idea sounds preposterous, but the scammers are already out making lowball offers so I guess something has to be done:
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As of August 17, 2024, the NAR Settlement required realtors to complete a buyer-broker agreement with their buyer clients prior to viewing residential properties in person. The State of California supplemented the practice with their own law that began on January 1st, and the Department of Real Estate will issue their own mandate shortly. Between the two, they will require that every licensee (realtor or not) has a written buyer-broker agreement before showing any type of property, not just residential.
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The initial exclusive buyer-broker agreement could be cancelled with 30 days notice. The latest version allows for 30 days or less, as negotiated in paragraph 2F. Buyers may feel more comfortable signing an agreement that can be cancelled on short notice, and if you are going to cancel, you might as well get it over with. Choosing 1, 3, 5, or 10 days may now be more appropriate here:
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This new form change is welcome. Whenever a buyer or seller wanted to agree to a deal but the offer or counter-offer had expired, we would have to author another addendum to extend – leaving the door open for possible shenanigans.
Now the verbiage is included – as long as the other party signs the paragraph 6, then we have a deal. The delay is still possible, but at least we don’t have to agree on who will be writing the addendum and exactly what it needs to say to make everyone happy:
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Tenant rights are already long and lengthy but every year the rentals category gets at least twice as many changes as sales side:
A. There is a new form for landlords to report the tenant’s payment history to the credit bureaus. But it’s only required if the landlord owns two or more rental properties. They are able to charge the tenant $10 per month for this service.
B. If a landlord is going to keep more than $125 of the tenant’s deposit, they need before and after photos.
C. Any clause that states the tenants are responsible for professional carpet cleaning at move-out is unenforceable. Carpet cleaning is only required if it is ‘reasonably necessary’.
D. The seller is responsible for maintenance when renting back after the close of escrow.
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Rent Gouging is illegal in areas that have been declared to be in a state of emergency. Rents can’t be jacked more than 10% of what are currently or what they were over the last 12 months. If the property is new to the rental market, the rent can’t be more than 160% of the HUD standard in the area. Even when there are multiple tenants bidding up the rent, it can’t go higher than +10%.
What areas are in a state of emergency? ALL of California has been in a state of emergency……due to the Bird Flu. The notice expires on Friday so wait until Saturday to gouge tenants around here.
The Tenant Protection Act of 2019 limits the annual maximum increase in rents to 10% or CPI + 5%. This year in San Diego County, the CPI + 5% = 8.8%.
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That’s about all for now!
BTW, I ran into another long-time agent in the parking lot. When I told him that I’m getting a call a day from potential sellers, he said he’s taken TEN listings in the last seven days.
We agreed – in our decades of being in this business, we’ve never seen it like this! The fires may be providing a bit of a respite, but a flood of listings is coming.
by Jim the Realtor | Dec 1, 2024 | Jim's Take on the Market, Realtor, Realtors Talking Shop
As of August 17th, home sellers are not required to pay the buyer-agent’s commission. Listing agents are forbidden from mentioning any compensation being offered to the buyer-agents in the active listings, but the CRMLS requires that the amount that was paid is posted in the listing at closing.
CRMLS runs the MLS for north county. Agents can also belong to the San Diego Association of Realtors which does not require posting of the buyer-agent commission paid.
I’m adjusting the timing to show these reports on a monthly basis so today’s data is for the 201 sales between October 16th and November 30th. There were 83 of the 201 who posted the commission paid to the buyer-agents by the seller. We can’t assume that the other 118 sellers (201-83) didn’t pay a commission because reporting isn’t required.
I haven’t heard of any buyers yet who got stuck having to pay their buyer-agent because the seller refused to pay. Undoubtably, there are buyer-agents who were paid a partial fee by the seller and then the buyer made up the difference – that’s the intent of the buyer-broker agreement being required now.
These are the reported commissions paid to the buyer-agents between La Jolla and Carlsbad:
Erosion is underway. It’s because some agents are weak and desperate, as I mentioned in April, and the buzz in the realtor community is that agents are quiting en masse. I’ll be nice and call it ‘retiring’. So those buyers who want an agent who charges less can certainly find them – and they will get the quality of service that they deserve.
But virtually all of the sellers are paying some commission to the buyer-agent, and about half are paying more than 2%.
This isn’t the world we wanted. This isn’t the world we asked for. This is what 12 jurors in Missouri thought you deserved (as did the attorneys who charged $100,000,000+ for prep work and a week in court).
by Jim the Realtor | Nov 19, 2024 | Realtor |
This guy fleeced realtors for years, then quit right when the trouble started:
When he became the chief executive of the National Association of Realtors seven years ago, Bob Goldberg negotiated a package of gold-plated perks.
N.A.R., the largest trade organization in the country, agreed to cover Mr. Goldberg’s membership dues for private clubs in both Chicago and Washington and a country club of his choice, including an initiation fee of up to $75,000. He would use all three clubs “primarily for business purposes,” according to the contract he negotiated with the organization.
The group would also pay for first-class airline tickets when he traveled for business and, once a month, for a round-trip first-class ticket for his wife. He was given a $1,500 monthly car allowance and $2,250 a month to cover utilities and insurance at his pied-à-terre in Chicago, where N.A.R. has its headquarters. N.A.R. even agreed to pay for a pet sitter to watch his dogs when Mr. Goldberg was away from his home outside Washington on business.
The extras came on top of his $1.2 million salary that would, according to N.A.R.’s tax returns, grow to $2.6 million in five years.
Link to free article
by Jim the Realtor | Nov 11, 2024 | About the author, Realtor, Realtor Training, Realtors Talking Shop
A reader asked about my thoughts on becoming a realtor today – my response:
I’ll start with the basics to see what you think.
Being a real estate licensee is one thing. Being a successful salesperson is something different, and what I’ll address here.
Sales has its own skill set. There are things to learn and practice to be successful at it. People tend to wander into real estate sales because it is so easy to get a license. Nobody tells them to get sales training, and as a result, most leave the business within 1-2 years.
To know if you can be a successful salesperson, consider the following:
A. Are you comfortable talking to family and friends about their housing needs?
B. Are you comfortable talking to strangers about their housing needs?
Everyone likes talking about real estate. But people are more guarded and private than ever, so approaching them and getting them to talk about THEIR real estate needs can be uncomfortable for many agents. If you are a good-looking charismatic type, then you have an advantage but it still takes guts to continuously talk to people every day about their needs, and how you can help them.
Everyone knows at least three realtors already, so you can expect rejection. Can you live with that? Do you want to be successful bad enough to power through and not let rejection bug you?
Still feeling excited about being a successful salesperson? Then consider the downfalls:
Paydays are inconsistent, and you can go months without earning a check. Having financial stability besides your real estate pay is helpful.
It is a 24/7 market, so most of the time you will be on duty seven days a week.
Failure is part of the learning curve. Being warm and cuddly with failure and rejection is a real plus.
Other agents will screw you over, and many times it’s their own blundering incompetence that causes it. Accept that tensions are elevated and quick decisions are being made by principals and agents without thinking through all the variables.
Being motivated by the money helps. If you want/need to earn a big income every year, then it’s available and you can let it drive you.
Still interested? Ok, great – I suggest that all agents do the following:
1. Get Sales Training.
I did the Dale Carnegie sales training early on, and it was the best thing I ever did. They teach you the basic skill set for sales, and also have you go practice the techniques as part of the course.
2. Work with a Mentor.
All of the big brokerages offer a mentorship program where you work with an experienced agent. Most of the mentors have given up selling themselves, so they tend to be in the background to answer questions, not to give hard-core training. If you can find one that does, then your learning curve will be expedited.
3. Identify How and Where to Get The Business.
It isn’t going to come to you – at least not until you have a lot of experience. This is an active, not passive, job and being a smart go-getter is required for maximum results.
4. Work Effectively with a CRM.
Client Relationship Management supported by a robust software system is vital. Compass is spending $100 million per year on our platform, and I think we can say that we have the best in the business.
I think the home-selling business will shrink steadily from here on out. There are at least twice as many agents as needed and many will just age out over the next 5-10 years. Those who are left will be smart to utilize all of the internet tools as our society continues to put more faith in their hand-held device than the experts in the field. Being tech-savvy will be a requirement for all agents!
As part of our succession plan, we are going to add more agents to our group. If everything above sounds fantastic, contact me today and we can discuss you joining our team!
by Jim the Realtor | Nov 5, 2024 | Realtor
The NAR Settlement has not been approved yet, but according to the DRE Commissioner, the State of California isn’t waiting around – they have already passed a new law!
They also noted that 20% of the salespersons did not renew their license last year, so we hopefully we can probably expect a similar number this year, and maybe more?
by Jim the Realtor | Nov 1, 2024 | Jim's Take on the Market, Realtor |
The Clear Cooperation Policy isn’t going anywhere, at least not for now:
The MLS Technology and Emerging Issues Advisory Board opted not to make a recommendation about CCP or take any other action. But they did turn over the feedback they received to the NAR leadership team, who said they will consider it.
Any of the brokerages who dislike the policy are probably at least thinking about leaving NAR. Compass has been the most vocal opponent of the CCP, and our management has to be considering all the options right about now. New York City agents are not members of NAR, and there isn’t any law or regulation that insists on membership. It is a trade organization.
Are we willing to leave the MLS too?
It would be a gutsy move.
It is the only way to completely control our own destiny, because the class-action lawsuits will keep coming and NAR will keep making settlements on our behalf. It would be too big of a disruption to happen in the near term, but it seems like brokerages leaving the NAR and the MLS is inevitable.
The biggest change? I’d have to be Jim the Broker-Associate!
by Jim the Realtor | Oct 18, 2024 | Commission Lawsuit, Realtor, Thinking of Selling? |
Reader Jim G. made a couple of friendly comments on how Compass is handling our objection to the Clear Cooperation Policy. It followed what a big-mouth in L.A. said this week when he called the Compass explanation, ‘disingenuous’.
We’re all struggling to describe the new world of home sales.
It’s mostly because we liked the old way and it sure seemed to work just fine – at least until an attorney in Missouri made our life miserable. It’s a new world now because attorneys will keep suing us until we run out of money.
The main reason that the Clear Cooperation Policy needs to end is because it’s a mandatory requirement. The government is the only entity who can make things mandatory. If we force sellers and agents to put their home on the MLS, then it is inevitable that one of them won’t like it and they will file another class-action lawsuit.
Let’s replace the CCP with a simple description of the choices, and have the seller pick one:
The Three Ways To Sell Your Home
Open-Market Sales – This is how to reach the maximum number of buyers. If a home has the ideal combination of selling features (good condition, preferred location, attractive list price, and sold by a competent salesperson), then it should sell quickly – probably in the first ten days on the market. The tradeoff is if the home doesn’t sell right away, then buyers assume something is wrong with the price, and they expect the home to sell for less.
Will waiting longer will improve the chances of selling? Yes, but only when prices/values are appreciating, and they eventually reach and exceed your price – making the home the best deal in the marketplace. In a flat or depreciating market, time is the enemy. The longer it takes, the bigger the discount expected. This buyer sentiment happens in all markets and price points. The pricing trend in your market, and the current market conditions, should play a vital role in your decision here.
Off-Market Sales – The seller’s advantage here is that a buyer is pressured to pay your price, otherwise the home goes on the open market. There isn’t the full exposure to all buyers, but you only need one. Sellers with no time constraints and a preference for privacy can empower their listing agent to explore their off-market resources, and if a buyer isn’t found and/or the anxiety mounts, then the home can always be put on the open market later.
Auction – Homeowners willing to sell their home for what the market will bear on a specific date may want to consider an auction of their home. There is full market exposure, and the animal spirits can take over and drive the price above market value. In many cases, the commissions and closing costs get paid by the buyer too.
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The key advantage of selling on the open market or by auction? It instills urgency in the buyers. They know that if they love the home, they need to step up now and buy it before they lose another one!
This urgency isn’t required to sell a home, and it is regularly wasted when sellers and their listing agent don’t use it wisely.
But it is invaluable to the listing agents who know how to exploit it.
Before making your choice, know that the hassle factor is real – especially if you are living in the home. Getting the home ready to sell costs time and money, and then having strangers roaming through your home with little or no notice is inconvenient, to say the least. Going on vacation for a month, or moving out altogether, is worth considering.
End of sellers-choices form
Until, and unless, the industry is willing to educate the masses on the fine details about selling homes, we will keep having results all over the map. Have you noticed how some homes sell right away for retail or retail-plus, and others don’t sell at all? It’s because we allow the marketplace to be a perfect mess with little or no education, guidance or understanding. There are no rules or standards about selling a home and making a bad/wrong choice can be costly.
Let’s start with a basic description of the choices available to sellers.
