For many real estate agents and brokers, life as an independent contractor holds great appeal. It affords one the opportunity to set your own work schedule, take control of future earning potential and choose who to work with in business. It also comes with challenges and risks. With today’s low inventory and a near-record number of real estate licensees, the industry is as competitive as ever. Furthermore, with home prices at record highs, homebuyers and sellers can be quick to sue if they feel as though they have been misled or their interests have not been properly represented.
This harsh reality has become painfully clear over the past six months as homesellers nationwide have filed roughly 20 class action lawsuits against the National Association of Realtors® (NAR) and many of its member brokerages, alleging they paid inflated broker commissions when selling their homes.
The focus of the litigation is an MLS participation rule that requires cooperative compensation be offered when listing a property on Realtor® association-owned multiple listing services. The same rule also has been adopted by the MLS Property Information Network in Massachusetts, which is also the subject of litigation (Nosalek v. MLS PIN).
Proposed settlements announced by NAR and several of the largest real estate brokerages in these lawsuits now have the potential to bring about significant change in real estate practice, if the terms as drafted are approved. Most notably, NAR has agreed to adopt a new rule prohibiting offers of compensation on the MLS and a requirement that MLS participants working with buyers enter into written buyer representation agreements. Both policies could be implemented later this summer.
Without question, the industry is going to have to adapt, but what is still unclear is what impact this will have on the proposed settlement in the MLS PIN case, and how or when any new rules or procedures would be implemented. That’s why membership in a professional trade association, like the Realtor® association and Greater Boston Real Estate Board (GBREB), can be beneficial in supporting your success.
It’s times like these when business practices are set to change and new rules or laws come into play that associations provide their greatest value. They offer the programs and resources to become educated and informed on the best business practices and tools needed to effectively serve consumers, as well as a forum to network and learn from colleagues and industry affiliates.
Currently, in response to the class action litigation, our programing at the Greater Boston Association of Realtors® (GBAR) includes several courses and member forums on how to effectively present written buyer representation agreements; handle offers and negotiations; create a buyer consultation presentation that communicates an agent’s value and services provided; and educate sellers on the benefits of working with represented buyers. This includes the opportunity to earn the Accredited Buyer Representative and Sellers Representative Specialist professional designations and the Real Estate Negotiation Expert certification, as well as learn about buyer financing programs and fair housing law.
We also offer specialized training on how to work with international buyers (Global Council and Certified International Property Specialist designation classes), adults aged 55 and older (Seniors Real Estate Specialist designation course), the rental market (Rentals the Right Way class), and marketing of high-performance homes and those with energy-saving features (GREEN designation and sustainability courses). Most recently, we launched the AgentEDU training library in February in partnership with Agent Publishing to provide video instruction on over 60 topics fundamental to building a successful real estate practice.
Notably, each year we present Realtor® safety classes and Legal Live webinars to help members reduce their exposure to risk and legal liability in the field. GBAR members also enjoy complimentary access to the SafeShowings Safety App and free, unlimited use of the GBREB Forms Library on the zipForm Plus platform, or they can choose to contract with dotloop and other popular forms providers. And, as part of enforcement of the Realtor® Code of Ethics, agents and brokers benefit from our dispute resolution services, such as free mediation and ombudsman services and low-cost arbitration, which help to limit court costs and legal fees.
Finally, GBAR and GBREB are leading voices for the real estate industry, where we work to shape legislation and regulation, often in concert with the state and national Realtor® associations. We focus on protecting property rights, promoting measures that keep home ownership accessible and affordable to all and ensuring a favorable business climate for real estate professionals.
Our policy positions and advocacy efforts reflect the input and initiatives taken by members. In other words, if you want to have a voice in shaping laws and policies governing your business and livelihood, then I encourage you to join and become involved with the Realtor® association. It’s a place to learn and develop new skills — especially when business practices are changing — as well as make connections to grow your business and give back to the industry by being part of something bigger than yourself.
John Dulczewski is the executive vice president Greater Boston Association of Realtors®.