Change Is Coming... Let's Work Together

Anthony Lamacchia: This is it, folks. The change is upon us. In a matter of weeks, the largest changes in the real estate brokerage business are going to officially kick off on August the 17th when the National Association of Realtors nationwide settlement new rules kick into place. Many places around the country have already started, and that’s why I want to talk to all of you about what you need to do to make sure that your business continues to be successful, and the way that you conduct business is still best for your clients.

Folks, working together, working with other realtors, working with other companies, understanding the interests of the opposing buyer, the opposing seller, the opposing realtor, all while keeping your fiduciary duty as the principal at the highest level can be done, should be done. In fact, I’ve talked a lot about fiduciary duties and the need to do what’s in the best interest of your clients, your buyers, your sellers, the need to disclose certain things, the need to warn them about certain expenses, and all of those kinds of things that I’ve talked about for months.

Now it’s going to be a little bit different. Doing what’s in the best interest of your client is also working nicely with others for the greater good of the transaction on behalf of your client. See, folks, in my 20 years of doing this, I remember two other times that I consider to be very historic times in our history, that realtors and buyers and sellers somewhat came together, recognized one another’s problems, one another’s challenges, and communicated properly for the greater good of the buyer and the seller.

Let me tell you two stories. Late summer 2008, August, September 2008, there were banks going bankrupt every single day, so many that there was a certain website that had a radar. Every time the FDIC took over another institution, they would pop up on that website’s radar, and we would cross reference to see if one of those banks happened to be one that was providing a mortgage for one of our buyers, or if it happened to be one that was providing a mortgage for one of the buyers on one of our listings.

There were multiple cases at that time, multiple cases of buyers having mortgage contingency dates that had lapsed. When it first started happening, there were some sellers and there were some listing agents that put their foot down and said, “No, you have to pay me. Give me your deposit.” Imagine being one of these buyers. Maybe they were 28 years old, first-time buyer. Who knows, hypothetically, right? You’re past your mortgage contingency date. You’re supposed to close later in the week, and the mortgage company that you’re getting the mortgage from goes bankrupt.

You say, “This is outside of my control. There’s nothing I could have done.” Folks, within a matter of a couple of weeks, everyone across the industry started realizing this was going on. Listing agents started saying, “Okay, I’m sorry to hear this. I understand. Let me talk to my seller.” They would talk to sellers. Sellers would say, “I know. I feel bad for them. I put the news on this morning and I saw that that company is going under. I saw that that bank is. I feel bad for these buyers. That could have been me.”

All of a sudden, mortgage contingencies got extended. Buyers were allowed more time to close. Guess what? The vast, vast majority of the transactions closed, and no one was harmed. Maybe there was some delays, maybe there was some frustration or potential friction, but people understood and they took a minute to think about what it was like to be in the other person’s shoes.

Fast forward 12 years later, April, late March 2020, COVID hits. When COVID hits, there were multiple sellers that had to sell, but said, “I don’t want extra people in my home. I don’t want anyone extra in my home. I want the bare minimum of who could be here.” All of a sudden you saw listing brokers and buyer’s agents procuring cause arguments and these other things aside, just communicating, “Hey, Mr. Buyer’s agent, Mrs. Buyer’s agent, my seller doesn’t want you in the home. My seller doesn’t even want me there. I know we have a home inspection coming up on Wednesday. Why don’t we just let your buyer and the home inspector go in on their own?”

That’s only one hypothetical example. I’m certainly not condoning that exact example. My point is, there were multiple situations, showings, group showings, letting people in a controlled environment, letting buyers come through every five minutes for one hour. There were multiple things that occurred in that spring. Because of that, the real estate brokerage business, the real estate industry, the sales business, buyers buying, sellers selling never, ever stopped.

Take a little state like right here in Massachusetts, seven and a half million people. There was never a single week that less than 1,000 homes were listed during that time. There was never a single week that less than 1,000 homes went pending, offers accepted, contracts accepted. Why did that happen? Clearly, it was still good for the clients because the clients did it and the clients wanted it.

It happened because of realtors doing their jobs, adhering to their fiduciary duties, keeping their clients as their principal, as the priority, but also communicating with the other side, making sure that they were working together, getting an understanding of what the other client needed, getting an understanding of the concern of the other client, of the concern of the other broker, communicating it back to their client, giving in a little bit, working together, allowing showings, allowing open houses. Just like back in 2008 when listing brokers and many sellers gave people more time to obtain their mortgage despite them being past their mortgage contingency.

Folks, that type of time is upon us. Now we are going to deal with competing MLSs, realtor associations with different forms, some forms worded one way, some forms worded another way. Various brokerages writing up contracts in one manner, and another brokerage writing them up in another manner. One brokerage training their brokers to do things a certain way, while another one teaches them to do another way or doesn’t teach them at all. Here at our company, we’re going with a pretty by-the-book way of doing it.

Contracts are going to be written. Language about compensation will be in the contract regardless of whether a buyer is paying or a seller is being asked to. In addition to being written in the contract, we’re going to have an accompanying form. If the seller is paying it through the transaction, that accompanying form, we will be requesting the seller sign that.

There’s a lot of other details to that, and I’ll talk about it in other videos. The point I’m getting at is, we need everyone in the industry, regardless of brokerage, regardless of geography, regardless of stature. Meaning, if you’re a top agent, don’t be looking down at newer agents. You were new once too. If you’re someone who lists a tremendous amount of homes, don’t take an attitude if I don’t care what happens with the settlement. I have the listings.

Hang on, you have the listings, but you need the buyers. Don’t forget what it was like in 2008, 2009, 2010, 2011 when you were dying for a buyer, when you were dying for a buyer to just come look at your listing. Those times could come back. In some areas of the country, particularly down south, those times are already upon us in various places. Be grateful you’ve got a buyer interested in your listing. Be grateful that you have a seller client.

Think about not only, obviously, priority your client, but the interest of the person buying or selling with your client has an impact on your client. Folks, let’s be the leaders that we are. Let’s be realtors and live by our motto, our code of ethics. The work that we do across America, across Canada, across the world is extremely, extremely important, and none of us should take that for granted. We are involved in what is usually the largest financial transactions of people’s lives.

When you are involved in that kind of thing, you can’t take it lightly. It’s easy, too, if you’re doing it every day and you’re very busy, but now there’s going to be change. There’s going to be differences. There’s going to be a some difference in the way that business is conducted. Is it better for buyers and sellers? I frankly don’t think it is. In fact, I think it’s worse, but it is what it is. We don’t make the rules most of us, right? Most of us just have to play by the playbook that’s out there. Let’s work together. Let’s be kind to one another. Let’s have an understanding that each side is going through a little bit of a change period, and let’s do what’s best for our clients. Thank you, all. Good luck.

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