What’s the latest with the NAR antitrust lawsuit that threatens to compress agents’ commissions? What’s happening in the local market? What’s happening in our industry and what ABOR’s been doing? I sat down with Emily Chenevert, one of my good friends and the CEO of the Austin Board of Realtors. We’re going to go through all these questions right now.
PropTech’s Impact on Realtors
With the market shifting, everybody’s reevaluating their business strategies, not just agents and brokerages. Associations and MLSs have to think about how we serve our agents differently. It’s going to be an interesting time for PropTech.
Different types of technologies are needed in a market like this versus the one that we’ve been in. Less about efficiency and more about lead generation, converting leads, and intelligence around your buyers and sellers. We’re gonna see a shift across the board and all the tools that are important and we have to think about how we provide that differently.
PropTech Trends
Although many of these have been in progress for the last few years are more social media, automation, marketing, digital ads, and video content. Video is such an important part of marketing and listing. Those things become more important in a market where you have to work harder to get the deal done.
There’s going to be a lot of technology around lead generation and warming that lead and having it be informed. Not just this call this person uses big data and intelligence around buyers and sellers, specifically in the position that they’re in, within their property, or within their financial situation.
Emily sees that we’re gonna see lots of marketing and also wonders what’s gonna happen with geo-targeting now that people are working from home so much more. Their place can be more fluid than it was before.
Do you widen the net in terms of who you’re targeting, expecting that that buyer or seller could come from far outside of your geographic territory? Or does the neighborhood still matter? It would be interesting to see how this stuff flushes out too.
State of the Austin Real Estate Market
At the end of last year, things were feeling pretty gritty and people were not super thrilled with the conditions. Part of that is just your reaction to like how quickly it changed from the high that we were on.
Our numbers looked stronger than even in 2019, which was an incredibly hot market. If I’d asked you in 19, if you were in a good market, you would say yes. But as compared to 21, and 22, at the top of 22, which were just like crazy high, insane appreciation, that context, just jaded the way that people thought about the shift. You just have to forget about those two years. They’re not a real 30% appreciation in one year, which is what happened in Austin, Texas in 2021.
From a buyer’s perspective, while obviously, the interest rates are higher, which squeezes your buying power, what you should see is a more competitive landscape to find something that you actually like and not be completely house poor.
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Shifting Business Models in Real Estate
Emily thinks that we’re going to see some fallout as the market shifts, as business models will shift. There’s room for every model in the marketplace. There’s a consumer for every one of those models. What agents and brokers have to do is continue to refine what value proposition they’re bringing to the table for their clients and then target the right people for that kind of transaction.
You bring a level of service that is specific to you. You need to be sure that you’re finding the buyers and sellers that expect that and that you’re delivering on that when you retain them.
What is Remine?
Remine is the only MLS platform that’s actually owned and operated by investors who are MLSs, are industry-friendly, and are in the industry. There were four MLS partners, it was Austin, Kansas City, Atlanta, and Miami, that all came together to acquire the company outright, with a rollover represented by the previous investors as well at the table.
It’s exciting when thinking about who owns and operates the other technology that you rely on. It’s companies like CoStar or Stone Point, who have a different financial mindset, perhaps a different mindset as it relates to the industry.
You understand that when we are the owners of technology that you rely on every day for your livelihood, Emily’s perspective is, how can I best empower you versus how can I work around you? That’s really important for agents to understand in terms of why the investment was made so that we could rely more consistently on the tech and build out a technology future that meets your needs.
We could secure a future, a more robust and modern infrastructure that meets your needs and secure it away from investors that potentially don’t have the same interest as we have.
Commission Compression
The moral class action lawsuit is driving interest in the way that buyer’s representation works in America and has the potential to squeeze commission.
Having a buyer’s rep agreement in place is always a good idea. It secures the client’s understanding of the service that you’re offering and their understanding of the commission that you receive. The other thing is that being really, really transparent and talking to a client through how it works, and why it works this way, is going to be beneficial to you long term, regardless of how the lawsuit shakes out.
Having a buyer’s rep agreement in place is your most secure method of securing your client to you, and making sure that they understand the service that they’re getting.
The thing to do is to be transparent. Be transparent with your client to be transparent with consumers and to allow consumers to help participate in their own best interest in negotiating commission and negotiating the outcome of a transaction.
MLS Mergers
We’re still seeing consolidation, but here’s the thing about that agents don’t always understand. We can go merge the business and have MLSs combine, but unless you’re working with technology that integrates, you still have a really disparate experience.
It’s one thing to say I want to merge the MLSs, I want all the data in one place. It’s another thing to say, I want a seamless transaction end-to-end, and I want all the technology to work. Those are two different things. Agents don’t always understand that mergers are not the only way to get to that kind of seamless technology and that seamless transaction.
We’re seeing some MLS mergers, they’ve definitely slowed down over the last couple of years. Part of that just being the chaos of the market and our need to represent and manage our growth.
Realtor Fallout
Emily thinks we’re oversaturated, but she hasn’t seen a change yet and the dynamics that lead to membership growth haven’t shifted. Last fall, lots of rumors and gossip around ABOR losing tons of members that just hasn’t happened yet. We’re prepared for it.
If it does, from a financial standpoint, we feel very comfortable and confident that will make the shift that we need to make that happen. But to be clear, we’re not seeing it.
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