Beware the Ides of March

Et tu ReMax?

March 15, 2024, was the day NAR finally cried “uncle”.   (Old-timey expression for I give up!) For generations the national real estate franchises held NAR in the highest esteem.  They were the beacon of light fighting every day for the homeowner rights of average Americans.   Without NAR, the industry would devolve into a hellscape the likes of which no one has ever seen before.   Blah, blah, blah.  Hail Ceasar! 

Turns out it was a money scam all along.   For over 50 years NAR packaged a fake story wrapped in the American flag that said, “you need me” and “you can’t function without me”.   Turns out we can, we will, and we’ll all be so much better for it! 

NAR had a membership of 1.2 million real estate agents.  Do we need 1.2M realtors—hell NO.  But NAR needed the money.  As far as they were concerned 4-5 million agents sounded pretty good.  That’s why they lowered the entrance requirements for getting a real estate license to, “state your name”.  As in, state your name; congratulations you’re now a Realtor.  (OK slight exaggeration, you also had to know what “DUST” meant?)

It’s a new dawn.  Welcome to the NON-NAR world.  Wynd Realty has lived here since we began in 2008 so it’s nice to see so many new faces.   One of the first things agents notice is: NOTHING.  NAR had zero impact on an agent’s everyday life.   Some agents will be surprised to learn things move along just fine without NAR.  Almost as if they were never really here. 

Commission percentages are less than 6%.  The percentages were moving that way long before NAR settled their $400 million dollar lawsuit with the Department of Justice.   It was the complaints of millions of average American homeowners, the ones NAR was supposedly protecting, that drove the DOJ into actually doing their job.   So the 6% percent commission model has been in free-fall for the last several years.  March 15th simply nailed the coffin.

Do you know what else the 6% commission model brought? It brought a lot of idiots to the table.  The illusion of big easy money is the reason we have more than 1.2 million real estate agents in the first place.   The Department of Labor estimates we need about 250K real estate agents nationally.  Again, NAR needed the unnecessary fluff in their system.  (Google, “NAR Board Member Salaries”.  It will blow your mind!)

 Long time coming.

The 6% commission model was founded at a time when buyers could find single family homes for under $100K.  The odd part is when agents were selling $100K homes they had to work twice as hard as today.  The MLS was a Listing Book.  Agents had to go into an office.  Clients expected you to drive them around everywhere.  And not everyone had a fax machine!  Yes, through the wonders of technology, real estate in many measures is easier.    

So when single family homes rise 4 times in value, it’s pretty hard to justify why an agent commission over that same amount of time should rise 4 times as well.   

Another oddity is when homes were selling under $100K their Days on Market (DOM) were always over 30 days.   It took about that many days for the Listing data to be input, printed in the Big book and copied back out to agents so they can get them in the mail to their clients as fast as possible.   Today you can sell an Inman Park home off a tweet!   

Value Propositions, like everything else in life, have shelf-lives.  They age with time and at some point, no longer offer their value to subsequent generations.  Today—NO ONE is buying into the 6% pitch.  Agents can no longer psychobabble their way into justifying a 6 percent Listing commission.

But there is good news!  Agents save money in the new world!

Sure, agents aren’t forced to pay for NAR anymore.  But the biggest advantage of the NON-NAR world is its “flat fee”.    Commission splits got flushed with the 6% Listing.  At Wynd Realty agents pay $350 per transaction.  A $100K sale or a 10M sale pays the same $350 dollar flat fee.    Remember when agents had to share their income from rentals and referrals?  Not in the NON-NAR world.   Those are free “pass-through” transactions at Wynd Realty.   

Sidebar: I can’t help but to acknowledge NAR for all they have done for me personally.  Wynd Realty would NOT exist if it weren’t for NAR and their business practices.  I am certain our first blog 17 years ago was as anti-NAR as every blog thereafter.   Wynd Realty has been waiting for the day NAR died for a long time!    

Now, one of the most critical industries in the United States is going to have a make-over.   Who/what replaces NAR?  Who/what replaces the national franchise?  Who/what will be the new trends and players? 

Looks like we’re all going to find out together.   


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