According to the Times article, Haber and Umansky are expected to formally launch AREA on Wednesday at the Inman Connect real estate conference in New York City.

Haber and Umansky had planned to launch their new trade group at a later date, but ultimately decided to push ahead due to the mounting pile of commission lawsuits facing NAR, as well as Tracy Kasper’s unexpected resignation as NAR president earlier this month.

“We felt it was time to put this out in the public forum and to start building a community around it because we were hearing from agents that they wanted something different, but you can’t replace something like NAR with nothing — you have to have something to replace it with, otherwise it is just talk,” Haber said. “We don’t believe this is time for talk, this is time for action.”

As part of their AREA membership, agents will gain access to the National Listing Service, a nationwide database of home listings built off the technology that powers Umansky’s own private listing service. The website for the NLS (theNLS.com) is currently live with limited listings.

“Over a decade ago, when I founded The Agency, I had a clear vision to create a brokerage built by agents, and for agents. To this day, my founding mission has never wavered and I am always looking for opportunities to advance and empower agents all over the country and around the world,” Umansky wrote in an email. “Through this incredible journey, I believe it is important to give back and do better, especially for an industry that has given so much to me. As we forge ahead, I am committed to positive advancement not just for The Agency but for our entire industry.”

AREA will not be charging membership dues for at least another six months, but Haber and Umansky estimate annual dues will be between $400 and $500. The new trade group will allow agents to set their own commission rates and will not require cooperation between buyer and seller agents. The group will not have a president or vice president, and Haber and Umansky said they are still exploring where they will headquarter the trade group. So far, sites in Florida and Texas are under consideration.

“It is important for any association to demonstrate very tangibly, its value proposition,” Haber told HousingWire earlier this month “I think it is important that you join an organization not just because you have to, but because you want to. So, what that means is, that the goal isn’t to run up and have a million members, but to have members who want to be in the association and who want to help make a difference.”

In addition to the location of the firm’s headquarters, Haber and Umansky are still ironing out funding for the group. They are currently funding the organization with their own money, but they hope to raise between $50 million and $100 million from investors.

“We are underway, and the reaction has been really positive,” Haber said. “People are really excited and they are embracing the idea of something new.”

NAR did not return a request for comment.

I am not an attorney, but I have served as an industry expert witness in three other Sherman Act federal-level cases, at least one state level restraint of trade case and over 60 other cases. So, while I make no claim as to the specific deep legal issues, I have some familiarity of antitrust actions and more in the conduct of legal actions in a courtroom.

So, with my modest experience in such matters let me comment on what I read in these motions.

No evidence of collusion

First, according to the filings, the plaintiffs in the case presented no evidence at trial as to any collusion or conspiracy among the defendants. There were no meeting notes, no emails, no joint or concerted actions by or between the defendants in the implementation of the Cooperative Compensation Rule. The defendants say there was no evidence presented at the trial that excludes the possibility of independent action by any of the defendants.

No evidence that plaintiffs suffered harm

According to the filings, there was no evidence that any of the plaintiffs suffered harm from the actions of the defendants. They entered into listing agreements with seller agents and agreed to the terms of those agreements without being under any duress to do so.

RealTrends research establishes that the use of real estate agents, using access to the Cooperative Compensation Rule, has become more attractive over time, not less, as evidenced by the increased use of agents in selling and buying property.

Second, previous courts had found that the rule of reason should apply to MLS-focused cases, and not under the per-se standard. The per-se standard establishes that the defendants did operate a system that itself was collusive or whose outcome was to restrain trade. This court ignored all those precedents.

Issues with the damage award

The damage award was calculated by imputing that the entire “3%” was awarded to buyer agents by listing agents for the MLS regions in Missouri for the seven years of the class period. That is how they got to $1.8 billion. Even though evidence at trial showed that the actual cooperative commission paid was lower than this amount, the jury awarded all of it.

According to the filings, the jury and the court assigned no value to the services provided by buyer agents to any of the sellers in any of the tens of thousands of transactions contemplated in the award for damages. The argument was made that the court did not require the plaintiffs’ experts to run any actual calculations of damages, just chose a number based on a fictional commission rate that has not existed in the market for years.

Missouri law permits sellers and their agents to compensate buyer agents

One last item—Missouri state law it is permitted for sellers and their agents to compensate buyer agents. This evidence was not allowed to be presented to the jury.

I want to express what readers should know. At least at the Federal level, the U.S. Department of Justice and the Federal Trade Commission have had the Realtor organization and the industry in their sights for an exceedingly long time, and, in my opinion, not in a favorable way. 

For those who want to fault defense counsel for not running an adequate case, you might want to reconsider that line of thinking.

Steve Murray is founder of RTC Consulting, a company that specializes in real estate brokerage and team valuations, mergers and acquisitions.

This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.

To contact the author of this story:
Steve Murray at smurray@realtrends.com

To contact the editor responsible for this story:
Tracey Velt at tracey@hwmedia.com

“We can definitely call a bottom to the decline in agent movement,” said Rob Keefe, Relitix founder and president.  “Agents will begin moving more between brokerages in 2024 as the market begins to normalize. However, the drop in active agent count from a peak in late 2022 will mean that the total number of experienced agent recruits will remain lower than what we were seeing in recent years.”

The monthly AMI value finished at 70.4 for December with a seasonally adjusted value of 92.2. The November values were revised upward to 81.2 and 91.6 respectively.

Trends in the relative movement of experienced real estate agents between brokerages are an important strategic consideration for brokerage and franchise leaders. The relative amount of movement fluctuates over time on a seasonal and long-term basis.

Methodology:  The Agent Movement Index is published monthly and features monthly and seasonally adjusted, and 12-trailing-month values. The index is calculated using national-level data from a large sample of the nation’s most prominent MLS systems. The agent movement reflects the relative mobility of experienced agents between brokerages. The score is computed by estimating the number of agents who changed brokerages in a given month. To be counted the agent must be a member of one of the analyzed MLS’s and change to a substantially different office name at a different address. M&A-driven activity and reflags are excluded as are new agents and agents who leave real estate. Efforts are made to exclude out of market agents and those which are MLS system artifacts. The number of agents changing offices is divided by the number of agents active in the past 12 months in the analyzed market areas. This percentage is normalized to reflect a value of 100 at the level of movement in January 2016 (0.7313%). The seasonally adjusted value divides the monthly result by the average of the same month in prior years.

Analyzed MLS’s represent over 800,000 members and include: ACTRIS, ARMLS, BAREIS, BeachesMLS, BrightMLS, Canopy, Charleston Trident, CRMLS, GAMLS, GlobalMLS, HAR, LVAR, Metrolist, MLSListings, MLSNow, MLSPIN, MRED, Northstar, NTREIS, NWMLS, OneKey, RealComp, REColorado, SEF, Stellar, Triad, Triangle, and UtahRealEstate.

Rob Keefe is founder of Relitix Data Science.

The study, CFA’s third of three on this topic, suggests that a significant portion of agents in the U.S. sell at most five homes in a year. It relies on examinations of agents’ sales for five major real estate firms in each of four geographic areas; out of a sample of 2,000 agents, 100 were selected randomly from each firm in each area.

On average for all areas studied, 70% of agents sold five or fewer homes in the past year, and 49% sold only one or no homes.

The study’s findings are far below the 12 sales per year for the median agent suggested by the National Association of Realtors’ annual member survey, which the study attributes to sample bias for the survey – successful and full-time agents are more likely to respond to the survey than unsuccessful or part-time agents.

The median agent in the study’s result, by contrast, had two sales per year, leading the study’s author, CFA senior fellow Stephen Brobeck, to conclude, “the residential real estate industry is clearly a part-time industry.”

Many of the individual agents in the study had other full-time jobs as “teachers, government workers, restaurant servers, commercial employees, and a large number in associated industries – mortgage lending, real estate appraisal, commercial and residential investment, and the practice of real estate law.”

Other analysts have similarly concluded that the top 20% of agents are responsible for 80-90% of transactions.

To Brobeck, the fact that so many agents rely on residential sales for occasional, marginal or supplemental income is a problem. These “sporadic sales… drain income from those struggling agents, most of whom are women, who work full-time or nearly full-time but sell only a half-dozen to a dozen properties each year.”

Barriers to entry (or lack thereof)

In the second part of his three-part study, published last October, Brobeck argues it is too easy to become a licensed agent.

On this, NAR has previously reached the same conclusion. A 2015 NAR study noted that becoming a licensed agent takes on average 70 hours, which is 302 hours less than it takes to become a cosmetologist.

“The knowledge and competency gap from the most to the least is very large, due to the low barriers to entry, low continuing education requirements, and the lure of quickly making big dollars,” the NAR study reads. “… The delta between great real estate service and poor real estate service has simply become too large, due to the unacceptably low entry requirements to become a real estate agent.”

To become an agent, most states require an applicant be at least 18 years old, have no criminal conviction that affects ability to practice as an agent, pass an educational course, pass a state licensing exam, receive sponsorship from a broker and receive a state license, according to Brobeck’s CFA study.

He notes there is significant variance in requirements from state to state. Required course hours range from 40 in several states to 180 in Texas, while expenses range from $338 in Michigan to $1,225 in South Dakota.

Recruiting agents

Despite the abundance of agents, many companies still actively recruit new ones, according to the CFA study. Companies do this due to high turnover rates and to bring in new clients who come with new agents, the study argues.

Additionally, new agents generate fee revenue, the study notes.

Given these factors, companies often have low hiring standards and underinvest time and resources into the continuing education or professionalization of their existing workforce, Brobeck contends.

“Yet despite this agent glut, many large companies keep recruiting new agents, often regardless of agent qualifications,” he wrote. “They do so largely because of four factors – high agent turnover rate, new agent sales to friends and family members, fees paid by these agents, and limited liability for these agents since they are independent contractors.

“For these same reasons, many companies continue an association with agents even when the agents routinely sell only one or no properties a year. The surfeit of agents ensures that many will not be able to receive adequate personal training and mentorship.”

What to do about the glut of agents

Brobeck offers a few potential solutions:

• State legislatures could mandate broker supervision of inexperienced agents (Colorado, Illinois and Montana already do)
• State legislatures could mandate post-licensing education
• Regulators could act on complaints of inadequate training and supervision
• NAR could raise the standards required to earn Realtor status (although not all agents are NAR members and several brokerages no longer mandate their agents become members)
• Companies could prioritize hiring full-time agents and brokers more than part-time ones

Although unmentioned in the CFA study, the outcomes of various lawsuits over commission structures could also dampen the appeal of entering the residential real estate space, depending on how compensation changes.

“I would literally go to the coffee shop and see moms with their kids and say, ‘I just moved here. Would you be interested in coming to our holiday party?” Dillard said. “I had parents with kids, owners of the local businesses, whoever I could get to come to our party, and it ended up being such an amazing gathering.”

That first party led Dillard to meeting some of her first friends in the area, and some of her first real estate clients, too.

“From there, I realized that all I had to do to make friends and grow my business was pour into the community and just be myself,” she said. 

Dillard’s first holiday party had about 15 people in attendance. Now it’s become a staple of her business, with people looking forward to it and between 75 to 100 people attending each year. 

Here are Dillard’s 5 tips for hosting events in your community to help build your business.

1. Extend a personal invite

Just as Dillard did for her first holiday party, it doesn’t hurt to invite anyone and everyone, depending on how many people you want to attend your event. And there are a variety of ways to extend an invitation, from email to social media to a personal phone call. 

“Picking up the phone and calling and inviting people is really great. If they’re your personal clients and you want them to be there, pick up the phone and call them,” she said. “Sending an email out to your database is fantastic, posting about it on social media is a great way to reach [a lot of] people.”

If you want your event to be small and intimate, it’s best to avoid advertising it on social media — but if you want it to be bigger, that’s a great option. 

2. Build your database

These events can serve as a direct way to build your database of contacts. Dillard said that guests have to provide their contact information as their “ticket” to get into her events.

“We’re not going to spam people and be obnoxious with it, it’s just so we can keep them top of mind,” she said. “We get their email address, phone number and name, and they are entered into our CRM.” 

3. Don’t ask for business

At these events, the main goal is not to do business on the spot — it’s to build relationships within your community.

“It’s just like any other lead source, but this one’s more personal, friendly and engaging,” Dillard said. “You’re actually with people in your community and they’re seeing your face, remembering that you’re in real estate and then when they think about real estate, they think about you.”

She doesn’t brand anything that she gives out at these events — like candy at Fourth of July parades, for example — but she does hand out cards with contact information. 

“There’s no pressure or obligation,” she said. 

Getting business from hosting events can take time, but getting your face in front of community members is a good first step.

“Sometimes you’re at an event and people will say, ‘Hey, I’ve been thinking about selling my home.’ And then that happens quickly,” she said. 

4. Send thank-yous

After each event, Dillard and her team use the contact information they gather from guests to send a follow-up to thank them.

“They took the time out of their day to come to our event, so we want to thank them for their time,” she said. 

As part of these notes, there’s a blurb at the bottom asking for a review. 

“Along with all the real estate reviews on what a great Realtor you are, it’s great to also have that you are a member of the community, that you give back to the community, that you care about the community,” she said. “Those are really important characteristics, as well.” 

5. Post about the event afterward 

Posting about an event afterward — for example, sharing a highlight reel on social media — can stir up the “fear of missing out” and drive people to attend the next one.

“I get so many messages afterward like, ‘Darn it, I’m so mad I missed it…Put me on your email blast, let me know when the next one is,’” Dillard said. 

And those new attendees mean more contacts for your database, new potential clients and the possibility of word-of-mouth widening your sphere of influence.

“They’re telling people that they had so much fun at your event — ‘What’s the event for?’ ‘Oh, well, she’s a Realtor, but she does these great events for the community,’” Dillard said. “It is the gift that keeps on giving.”

Today we’ll show you how to deploy 6 creative ways to get more from your searches so you can get those buyers in contract faster. 

The longer you take to deliver what your buyers want, the less faith they’ll have in you. If you’ve ever been “ghosted” by clients you showed homes to, this may have been the reason. Are your buyers being more proactive than you are? Are they out there knocking on doors, sending letters and going to new builds, FSBOs and open houses? Yikes! You’d better get in front of that. 

Finding the right house for your buyers in today’s market is a bit like a safari. You’re looking for something that’s scarce but could be hiding in plain sight. You’ll need more tools and more skills to have a successful hunt.

6 strategies to actively and creatively mine your MLS

1. Re-examine your buyer’s wants and needs. What’s a deal killer, what’s a deal-maker and why? If they’re adamant about a specific neighborhood, why is that? Is it because they love the walking trail and the clubhouse? There are probably 10 more neighborhoods within their geographic search that also have that profile. Expand their search to capture more options.

Spend more time drilling down, getting to know exactly what they’re dreaming of. Why did they choose their current home? Assuming they love it or used to love it before they outgrew it, what caused them to choose it? That probably hasn’t changed. Ask good questions, get the answers and deliver.

2. If your buyers can’t or won’t compete for scarce inventory, change your strategy. Search for homes that have 30-plus days on the market, even 60- or 90-plus days as well. You’re less likely to have to compete for those, and the sellers are likely to be more motivated to make a deal. Maybe there’s a builder spec home that doesn’t have 3 offers on it, something that’s back on the market or a for-sale-by-owner home that isn’t getting showings. Change your strategy if they can’t or won’t compete.

3. Look for new construction, even if your buyers don’t think they will like it. Add one well-selected new home at the end of a search for resale homes just to take their temperature. They may be surprised by how much they like it. And considering it’s all-new, they get to choose some options and they won’t have to deal with repairs.

4. If you can’t find something in the right school district, find out if that district allows out-of-district families to pay tuition. This is becoming more prevalent and the cost ranges from $1,000 per year on up. Call the district enrollment advisor and find out. Often the tuition can be made up by the fact that buying out of the district costs less and has lower property taxes. 

5. Look at your own past client and sphere of influence list as your private MLS. Who do you already know who owns a home that meets the criteria of your buyers? Does that homeowner know what the current value of their home is? If they did, how might that affect their plans? Who in your database just relocated, got divorced or needs to upsize or downsize? Who just had a third kid and needs to buy a four-bedroom home? 

6. Doorknock the neighborhoods where your buyers are focusing. Leave behind a simple “Wanted” flier describing your buyers and their needs. “Wanted! Your home for my pre-approved, highly motivated buyer clients who are looking only in 12 Trees and need at least 3 bedrooms. Flexible closing date!”

Homework: Take a close look at your buyer clients. Utilize all 6 strategies with each of them, every week until you’ve found success. Let them know what you’re doing to be proactive! 

Tim and Julie Harris host a podcast for real estate professionals. Tim and Julie have been real estate coaches for more than two decades, coaching the top agents in the country through different types of markets.

The Poughkeepsie-based Mid-Hudson MLS is a broker-owned MLS serving over 1,400 agents in Dutchess County and the Mid-Hudson Valley area.

Founded in 2018 and owned by Long Island Board of Realtors and the Hudson Gateway Association of Realtors, OneKey MLS already serves agents in New York (Manhattan), Suffolk, Nassau, Queens, Kings (Brooklyn), Westchester, Bronx, Putnam, Orange, Rockland and Sullivan counties.

OneKey MLS’s board of managers chairperson Frank DellAccio said the merger is a logical step for OneKey MLS as it continues to expand its area of coverage.

“This consolidation is a win-win all around,” DellAccio said in a statement. “It is our vision to continuously provide broader and better access to accurate data for our agents, brokers and consumers, for the betterment of the entire industry.”

According to the release, by merging these two MLSs, agents and brokers will have access to a broader pool of comprehensive listing data, saving them time and money by removing duplicate MLS memberships and fees, and eliminating the need to enter and maintain listings in multiple systems.

“This consolidation makes perfect sense because it expands the reach of listing data to a contiguous geography and benefits our members and consumers who will now have access to a greater pool of information,” Richard Haggerty, the CEO of OneKey MLS, said in a statement. “It should result in time savings for our members as well as consumers.”

For his part, Brian Engles, an executive officer at Mid-Hudson MLS, said the timing of the acquisition worked well for his firm, given the challenges currently facing the industry.

The financial terms of the deal were not disclosed, but OneKey MLS said it expects the sale to close in January.

Well, those are the types of conversations many agents are looking for right now, underscoring why your words post-commission lawsuit are more important than ever. Crafting a content and communication strategy that genuinely acknowledges their insecurities can pave the way for substantial agent recruitment and business growth.

As the founder of Happy Grasshopper, I’ve learned that effective content isn’t merely about putting a “call to action” in your messaging; it’s about crafting an engaging call to conversation. See the difference? It’s about initiating open dialogue, providing reassurance and sparking curiosity through your content. Post-Sitzer/Burnett case, you need to not only adapt but also engage in candid conversations that drive your brokerage forward. 

Transparency is the new industry standard

If the recent real estate litigation has taught us anything, it’s that being transparent isn’t just a choice; it’s now imperative. Transparency builds trust, and in times of uncertainty, it becomes the cornerstone for fostering lasting relationships. 

Addressing agents’ concerns is pivotal. Keep the focus on them and ask smart questions about their needs. What are their pain points? What concerns them most about their business and changing brokerages in the new year? 

Here are a few conversation starters to keep in mind: 

• Income security reassurance: Agents fear reductions in income. Reassure them that your strategies shield and potentially enhance their earnings amidst any commission shakeups.
• Empower them: Agents may fear losing control. Showcase how your leadership empowers autonomy while guiding them through change.
• Support them: Highlight the resources available to ease agents’ transition to new technologies and practices.
• Advise on navigating market volatility: Share insights and personal anecdotes to help agents not just survive but thrive amidst unpredictable market shifts.
• Competitive edge reassurance: Agents feel the pressure of rising competition. Explain how your strategies equip them with a competitive edge.

The power of words

Any recent litigation isn’t a roadblock for your brand or brokerage; it’s an opportunity for growth. Leveraging the potency of meaningful conversations and having honest discussions about real estate headlines in the news can position your brokerage as a trusted leader in the industry. 

Agents are seeking more than just information; they’re seeking understanding and guidance. Your communication strategy can bridge that gap, offering reassurance and fostering change. And you don’t need to overthink any of this. Just be real and human and offer them the chance to have their voice heard. 

So, here’s the real question you need to be asking before the end of the year: How can we start better conversations with agents in 2024? That’s the secret to growing headcount and production.

Dan Stewart is the founder and CEO of Happy Grasshopper.

The two new directors elected to the board are Justin Haag, the general counsel and incoming president and CEO from Northwest MLS, and Chris Haran, the managing director and chief technology officer from MRED in Illinois. Both Haag and Haran were elected to serve three-year terms on the board of directors.

Matthew Consalvo, the CEO of Arizona MLS (ARMLS), was re-elected to a second three-year term.

“We are very fortunate to welcome these leaders to the CMLS Board,” Denee Evans, the CEO of CMLS, said in a statement. “Our leadership is committed to guiding MLSs to evolve and innovate while providing efficient, transparent, and pro-consumer marketplaces. There has never been a more important time for MLSs to share our value, and I am encouraged by the contributions these new leaders have already made to our industry and will add to the strength and vision of the CMLS Board.”

Other directors on the CMLS board include executives from UtahRealEstate.com, Bright MLS, MIBOR Realtor Association, and Hawaii Information Services, among others.

CMLS announced its new executive committed in October. Nicole Jensen, the CEO of realMLS in Florida, was elected to serve as secretary and treasurer; Dionna Hall, the CEO of Florida-based BeachesMLS, will serve as chair; John DiMichele, the CEO of the Toronto Regional Real Estate Board was named chair-elect; and Jim Yockel, the CEO of Upstate NY Real Estate Information Service, Inc will serve as past chair. All four executives will serve one-year terms.

CMLS’s new board members and executives join the trade group’s leadership during a challenging time for the industry, which is currently facing multiple lawsuits regarding real estate agent commissions and the policies in place governing what a listing agent must do in order to list a property on an MLS.

In late November, the firm announced that Elizabeth Ruehrwein, a top agent in the Rehoboth, Massachusetts area joined RE/MAX Integrity, leaving Lamacchia Realty, previously known as Keystone Property Group.

Ruehrwein, who became a licensed agent in 2017 after working in the new construction industry for 28 years, serves clients in Rehoboth and surrounding Massachusetts towns, as well as East Providence and the Narraganset area of Rhode Island.

“My mom was a single parent who taught by example what a strong work ethic is, but we always rented. It wasn’t until I started at Frito Lay that homeownership became an option for us,” Ruehrwein said in a statement. “I moved mountains to get my mom and me into a home – that desire to help make homeownership a reality is what continues to drive me for my clients today.”

Ruehrwein’s move was not the only major addition for RE/MAX in Massachusetts. In early December, Newburyport-based Bentley’s Real Estate announced that it would be rebranding to RE/MAX Bentley’s as part of RE/MAX Collection, the brand’s luxury division.

Co-owners Robert Bentley and Alissa Christie, as well as over 60 of their agents are making the move. The firm currently serves buyers and sellers in Essex County, the Merrimack River Valley and Southern New Hampshire.

Bentley and Christie are no strangers to RE/MAX, as both are former RE/MAX agents. In 2014, Bentley started his team at RE/MAX with Christie and four other agents, by 2016 the team had expanded to 10 agents and in 2018 they transitioned from a team to an independent brokerage, Bentley’s Real Estate.

According to the release, the firm closed more than $350 million in volume in 2022.

“We started as a team in a collaborative environment and that theme will carry through to REMAX Bentley’s. We will continue to surround ourselves with like-minded professionals who want to succeed and help others do well,” Christie said in a statement. “I’m most excited to bring something new to the table. What REMAX offers in marketing and advertising will further support our agents and expose our clients’ properties to a bigger audience.”

On the other side of the country, changes are also taking place, with RE/MAX announcing last Friday that San Diego-based Tidal Realty was rebranding to RE/MAX Tidal.

The independent brokerage, which now has over 50 agents was founded in 2010 by Claude Blackman. In 2022, the firm closed nearly $95 million in sales volume according to the release, serving clients in San Diego and South Riverside Counties.

“With RE/MAX I am in business for myself, but not by myself,” Blackman said in a statement. “My agents and I are most excited to be backed by a proven business model and national marketing campaign. And the number of resources that will be at our disposal will allow us to focus more on our clients – and me, my agents.”