From left, Kevin Sears, Jessica Edgerton and Bess Freedman
An impressive group of real estate industry leaders touched on a variety of important issues during Lamacchia Realty’s Crush It In Real Estate/2024 Kick Off event Feb. 1 in Boston. New National Association of REALTORS® (NAR) President Kevin Sears talked about what’s happening at the association as it relates to lawsuits and other matters, while Jessica Edgerton, chief legal officer and executive vice president of industry and learning for Leading Real Estate Companies of the World®, took a deeper dive into the differing lawsuits and how agents must approach their business practices while the judicial matters play out. Bess Freedman, CEO of Brown Harris Stevens explained why she thinks REALTORS® must get back to the face-to-face interpersonal relationships that were so ingrained in the industry before Covid.
Lamacchia Realty Broker/Owner and CEO Anthony Lamacchia introduced each guest, then encouraged them to provide their opinions in front of nearly 900 real estate professionals in attendance.
In a strong voice, Sears reinforced NAR’s value and how the organization will continue to grow going forward, making it clear that he does not pay heed to national media criticism because only local media truly matters as it can impact local agents and their businesses.
“A couple of the previous speakers talked about the bad press that we’ve seen, but the press that matters to me is what your local media says,” he explained. “They’re the ones that see you at the PTO meetings and working in the community, because you’re part of the community. And that’s the story that we need to tell. And that’s not been told at the national level. Instead, we’ve got critics taking aim at us.
“But at the end of the day, I’m very proud of what we do, the way that we represent buyers and sellers. There is no National Association of Homebuyers, no National Association of Homesellers. It’s the National Association of REALTORS®. And we are there to help people in the United States of America buy, sell, lease and transfer real property.”
Sears also addressed a topic on most everyone’s mind—the legal issues facing NAR. He was candid in his remarks, admitting NAR was up against it but would counter with an appeal.
“Unfortunately, we were on the wrong side of the (Burnett) verdict, on Halloween of all days (Oct. 31, 2023),” he began. “The jury found that we were guilty. At the end of the day, even though our policy and what we do is right, all you have to do is look at the scoreboard. We lost. We’re doing our appeals. We have about another six weeks of filing post-trial motions. We’re doing all the things that are allowed to us by the law.
“But the bigger problem is the Department of Justice. We’ve been in their crosshairs for as long as I’ve been involved with the National Association of REALTORS®. We had a settlement with them in 2020. In 2021, they reneged on the deal. We sued them, and we won in court. So they’re angry at us.
“The way that we operate our business is going to change. It is going to change whether we embrace it and adapt, or it’s going to be forced down our throats.”
As far as the market in 2024, Sears was hopeful that mortgage rates would make buyers and sellers more inclined to do business.
“We’re continuing to stay in touch with the Fed about doing everything they can to lower interest rates,” he said. “Our chief economist, Dr. Lawrence Yun, thinks that when (interest rates) finally do settle, the new normal will be 5%. That’s his prediction. I don’t know if we’re going to get there this year, but hopefully we will. Because as interest rates come down, people start thinking that well, maybe I can sell the house now and get into something else. And the interest rate makes it a little more affordable.”
Sears preached that as president of NAR, and a REALTOR® himself, he is doing the same thing agents should be doing when times get tough.
“Get back to basics,” he asserted. “It’s just like what I told the NAR staff when we have challenging times, and we do. One of my goals with the National Association of REALTORS® is to add some stability at this time when we’re in some choppy waters. Something about me…I do my best not to panic. I’m analytical. I gather as much information as I can. Once you have the information, what do you do with it? Process it. And then you develop a plan, a solution. Once you have it, implement that plan. It is just getting back to basics.”
Trials and legal positions
Edgerton spoke about the ongoing antitrust cases in the real estate industry, which have been increasing over the past five years. She argued that the current system is pro-competitive and beneficial for buyers, while acknowledging the Burnett loss. She further suggested that the industry should prepare for more lawsuits and changes, but sees it as an opportunity for growth and adaptation, advising real estate professionals to improve their negotiation skills, stay updated on market changes and ensure transparency with their clients.
She laid out what she sees as happening regarding the post-Burnett trial proceedings, as well as other potential legal trappings.
“Right now in the Burnett case, we have a post-verdict motion,” she said. “That’s going to go on for a couple months. If there is an appeal, there will need to be some sort of stay of any rule changes. If there’s a settlement, there would be protections from further damages, further suits. I want to be clear. I think there are a lot of folks who have started putting themselves into either pro-settlement or pro-appeal categories. Both of these options are viable.
“There are some really strong arguments for the defendants on appeal. One of the most powerful is that the judge applied the wrong standard to the trial. In the Burnett case, he applied a standard that did not allow the jury to hear a lot of the pro-competitive elements of our current system, a ‘per se’ rather than a ‘rule of reason’ standard. So there is a good chance that an appeal could end up in our favor.”
While suggesting that keeping track of all the legal maneuvering was important, it was crucial, she implored, that agents make changes, if necessary, as buyer agents.
“Get those buyer agency agreements signed from the start, not at the closing table,” she said. “This offers a huge opportunity for transparency, for talking through with your clients about how the process works, about what they can expect, about how this commission process works. You are going to be having lots of buyers walk into your offices, and they may very well need to reach into their pockets at some point to pay you. Get comfortable expressing your value prop. Get comfortable with the seller’s listing representatives. Be clear. Again, it comes down to transparency. Make sure they understand their choices. Make sure they understand what concessions mean. Make sure they understand they’re in the driver’s seat.”
The personal touch
In a change of pace, Bess Freedman, CEO of Brown Harris Stevens, shared her journey from being a lawyer to becoming a real estate agent and eventually the CEO of a company. She emphasized the importance of emotional intelligence, trust and hard work in the real estate business. She also discussed the challenges faced by the industry, such as interest rates and market uncertainties. She advises agents to create a business plan, be professional and show up to work regularly. She also stresses the importance of maintaining a positive mindset and avoiding negativity. Freedman predicts that 2024 will be a better year for the industry, but also warns of potential challenges.
Freedman noted that even during stressful times, it remains for agents and brokers to take hopeful homeowners and sellers through the buying and selling processes successfully.
“We have two wars going on, but what you do every day is you help people buy and help them sell,” she said. “It’s a cycle of life that continues, and will keep going throughout this year. And I think it will get better with (lower) mortgage rates.
“Real estate agents have an image problem. We’ve been poorly portrayed in the media. What we do is so hard, takes so much time, and if anyone taped what we did, no one would want to watch it because you’re behind the computer, you’re making phone calls, you’re getting photos of a listing, you’re hustling all the time, and you only get paid for results. You can work a year with someone and get nothing. People underestimate how hard it is to be a real estate professional in today’s world. So we really have to show them and tell them and explain to them by being professional, putting our clients’ interests first. Agents should make a business plan and be focused on what they’re trying to achieve for the year.”
Freedman has in the past and continues to say that it is crucial for agents to go into their offices and not work as remotely as they may have post-Covid. She feels that personal interactions trump Zoom calls, texts and all the other ways to communicate that are not face to face.
“I cannot underscore enough how important it is to go into the office to talk to other agents, to see what’s going on, talk to the executives, hang out,” she said. “Sitting at home is a detriment to what we do. We are in the relationship business. You have to go to open houses. To get to know people you have to show up. I would encourage agents to make a plan, show up, get involved, do everything you can. Even if it’s slow, maybe create a new marketing piece, talk to colleagues, see what’s going on, help them with an open house.
“There’s always stuff to do. Unfortunately, Covid created this sort of hiding or escape where people are in their pajamas at home on Zooms, eating candy bars and all that other stuff.”