I used to think Banks had the best chance of changing our industry’s status quo. With branches in every neighborhood, most likely staffed with people who live in those neighborhoods, along with access to a client’s financial data, Banks certainly seemed like a natural fit to offer real estate services. Besides, who else had the kind of money needed to take on NAR? Turns out, not the Banks. NAR wins in a landslide.
Years before any of us had heard the term “fake news”, NAR was spewing out a steady stream of lies all artfully displayed in puffery and self-importance. Repeat something often enough and it becomes fact. Go back years and read the consistent messaging of NAR. Banks entering the real estate market would be “anti-competitive” and “anti-consumer”. Every article, every presentation, and every White paper for years has beaten the same drum. While “anti-consumer” is never actually defined, it sounds terrible. “Anti-competitive” doesn’t make a lot of sense either, as Banks entering the market would represent the actual definition of “competition”. It just goes to show what one can do when they own Politicians.
One of the downsides of always promoting how successful you are is you become a target. KW and our industry’s, “giving company”, Compass, are both again reporting record revenue. “Look at us, we are swimming in money”.
Several months ago, Rocket Mortgage made a move to expand their search portal capability. Can you guess what happens next? The company becomes licensed in 50 States and joins the local MLSs. And then?
Rocket Homes enters the real estate Brokerage business. (https://www.rockethomes.com/) Nothing subtle about it, go after the franchise money. The headline, “KW Records Records Revenue”, can be restated as, “KW Takes a Record Amount of Homeowner Equity”. The franchise system is paid with homeowner equity. Rocket Homes doesn’t require Sellers pay the commission of the agent they’re negotiating against. So, in the messaging war for the hearts and minds of the consumer, how does Rocket NOT win? Their English majors are just as good as NAR’s.
But if Rocket Homes is new to you, it isn’t to NAR. They’re already at war. And it sounds awfully familiar to anyone in Georgia. NAR has launched an investigation into the sales practices of Rocket Mortgage. It doesn’t “seem” right to them, and NAR “feels” Rocket must be doing something wrong. An investigation looking for a crime. NAR is doing the “Trump” move all Georgians know too well. Throw a cog in the works and sell fear and doubt.
Mortgage lenders have huge advantage over Banks in the war against NAR. Banks hold consumer assets. NAR’s main debate point was you don’t want Banks making risky real estate investments that could negatively impact the consumer. How the “trade” of real estate sales was turned into a “risky investment” is one for the ages. But Lenders don’t have that same asset conflict.
Don’t think for a second Rocket Homes is an outlier here. LoanDepot offers mellowhome (https://www.mellohome.com/) Who else is in the position to offer bundled rebates on agent services to those who utilize their financial products? Soon buyers will have to start paying for their own real estate agents. Lender solutions can accommodate that cost into the mortgage. Do you see the franchises offering anything like that?
Better Mortgage now has Better Real Estate. If you are a fan of “to-the-point” honesty, (https://better.com/realestate) be sure to check out, as their name implies, Better Real Estate.
Pick your cliché, but unlike Banks, “the horse has left the barn”. Through regulation, NAR was able to fend off the Banking industry. There is no way, NAR can stop this. They will spend millions trying to convince people this is terrible situation, but at some point, they will simply have to ignore it.
It’s truly wonderful to see how liquid our industry has become. But what does this mean for the average sales agent?
In the olden days, as far back as 2012, things were clearer. Realtors, for the most part, were un-paid Independent Contractors affiliated with any a number of national franchises. Adorably quaint in 2021. Today, realtors can be salaries professionals working in corporate environments. The point being today’s agent has choices.
But, what of the old-fashion, one-on-one “trade” of real estate sales? Is it dead? I don’t think so. As a matter of fact, I think parts of the agent community will flourish in this new environment. To that point, over out next two blogs we will be discussing new directions for, the “Realty Tradesmen”.