Nykia Wright, the CEO of the National Association of Realtors, said this week that she expects a $32 million drop in revenue next year.
The NAR agent fee is $156 per year, so she must expect 205,128 realtors to retire/quit by 2026 – which would be about 15% of the agent population.
A couple more years like this and it’s going to get serious!
Compass agent Ben Faber started a discussion:
JtR: If you find a halfway-decent home, it will probably be in the first seven days it’s been on the market. It’s when the listing agent goes into full defensive mode and all communication turns vague because they are so afraid of saying the wrong thing. There are no rules of engagement. Just make an offer and send it into the black hole and maybe you’ll hear something.
Ben: If we represent the seller, then what information is in the seller’s best interest to share with buyers and brokers? Option 1 is the seller does not share any information because one of the fundamentals of negotiation is information and the seller is in possession of information. The information is confidential unless the seller authorizes us to share the information. Option 2 is the seller shares information, such as: specified number of showings, disclosure viewers, offers, etc. When advising the seller, what do you think is in their best interest and why?
JtR: We must acknowledge the change in market conditions, and be willing to consider all the options. Listing agents need to be doing their job better than ever before, and exploring what information to share and how to share it makes sense.
In a conservative market where buyers are adverse to risk, it pays for sellers and listing agents to be warm and inviting – it immediately sets you apart from the normal agent (who typically doesn’t want to talk in person or on the phone because they so worried about saying the wrong thing).
My suggestions:
Disclosing the details about the offers received? The other offers are your best friends when properly presented. Because most buyers want to steer away from bidding wars these days, how the listing agent presents the other offers is critical. Properly presented, the other offers outline the path and formula to which the buyer can say yes or no to buying the house. If the listing agent doesn’t have the skill to sell the evidence they have, then they can go wait in their bunker and hope a deal finds them.
I always want to have a good explanation if I don’t have offers too. It’s been two months since the tariff tantrum so if you’re still using that for an excuse for why the house isn’t selling, it means the seller and agent haven’t adjusted yet either. Sellers and listing agents want to demonstrate how they are dealing with the constant chaos, because it is standard fare now – and will continue for 3+ years minimum. The tariffs will stick, Trump isn’t going to change, and Maga is here for good – deal with it. Lowering the list price in any increments is telling buyers that you’re realistic about the new difficulties.
I also want to politely weave into the discussion any bad news earlier than before. During the frenzy, the buyers wanted the house/rate so badly that they shrugged off defects – but not today. Buyer’s remorse is real and you want the buyers to hear at the perfect time that the 37-year old roof is original but not leaking and sold as-is.
I’m going to provide a home inspection and comparable sales too. I want to do everything I can to help make the buyers feel more comfortable with their purchase. We email their buyer-agent a full package with explanations and attachments – knowing that they will just forward it directly to their buyer. Their friends and family will be trying to talk them out of buying, and you have to pray that they don’t read twitter. Be the one positive that keeps them in the game.
Know the financing options. Buyers in our last three closings utilized alternative financing to purchase (qualifying with bank statements instead of tax returns). Agents who aren’t aware of the options might pass on a legit buyer.
Have solid answers for the obvious questions, like these:
If the sellers and listing agents are dependent upon effective open houses, then they better be good at handling questions face-to-face. Anticipate the questions in advance, and have good answers ready.
I used artificial intelligence for one property description and I’m done. You can tell that most listing agents are brainlessly using AI when home descriptions are overloaded with superlatives but never say anything. They don’t stand out – they all sound the same. A buyer is only giving you 5-10 seconds to make a great impression before they swipe. Get your money’s worth!
To answer Ben’s question:
Option 2 is my favorite and I think transparency is a sales tool – and using it wisely can make the difference between selling and not selling!
More on the topic here:
It’s obvious this year that the market is tough and sellers aren’t able to demand everything they want like before.
It will probably cause more sellers to cancel sooner, and others to not try at all. The inventory count may hover around 500-ish for a couple of more weeks but the inventory should taper off earlier than usual this year.
The problem hasn’t been an overwhelming surge in inventory. The problem is that there aren’t enough coming out the other end. NSDCC sales are 5% higher than last year for the Jan 1 to May 31 period. But, combined with the hangover of the 2024 unsold listings, the excess unsolds this year have been piling up.
Sellers will quit, rather than suffer the indignation of having to adjust on price.
I think we’ve seen peak inventory this year.
The doomers might get excited about the cost-per-sf dropping by 3.1% and 2.6%, respectively, but because sales are holding up well, there isn’t any panic.
It’s a healthy exercise of how pure/unsupported markets should work!
Buyers and agents are noting that the market has changed.
Specifically, fewer people are looking at homes for sale, especially during the week when there is little to no activity. It feels more like October than May/June!
There has to be reluctance among buyers about signing a buyer-broker contract just to look at homes. The new law is not helping, that’s for sure.
But it means that the open-house activity is the real gauge of market conditions. There are times when nobody attends an open house, which is unsettling for agents and sellers alike.
We’re not there yet.
We can probably apply my list-price accuracy gauge to open houses.
Everyone thought my listing would be the first to sell because it has the most traditional floor plan and largest yard. We’ll see!
This is the first time that I ever put the address on an open house sign!
It would be a good time to move to Florida….or anywhere in the Southeast!
Thanks Lance for the map!
Our new listing in San Marcos!
This beauty is better than a new home and features the preferred NextGen – a home within a home! Mom/grandma gets her own primary suite downstairs and then the main primary suite is upstairs with the other two bedrooms plus loft (could be 5th br). Plus a separate office downstairs too! Extra-large backyard with premium turf, 3-car tandem garage, central A/C, PAID SOLAR, new carpet, and conveniently located where you can easily hike the nearby hills or get to the beach in about 15-20 minutes – wow!
941 Lindbergh Dr. San Marcos
4 br plus den and loft/4.5 ba, 3,274sf
YB: 2023
LP = $1,699,000
Open 12-2 this Saturday and Sunday!
https://www.compass.com/listing/941-lindbergh-drive-san-marcos-ca-92069/1851946694564174441/
The NextGen granny flat downstairs
The competition is stiff among newer homes nearby – this is all in one square mile:
I wrote a purchase contract for a buyer this week.
There were 41 pages.
Let’s add that to the list of hurdles for buyers in 2025.
It pathetic, and buyers deserve better.
Can you imagine it getting worse?
A law professor has filed an appeal to the NAR Settlement. She brings up a technical point and there is a chance the settlement will unravel:
We’re going to go back to the drawing board with the NAR Settlement?
At least the brokerages should have their armies of lawyers involved this time. Maybe NAR and the brokerages win this round? But the State of California has already codified the buyer-broker agreement needing to be signed before the buyers can be shown houses!
What a mess.
Let’s skip to the end of this horror flick.
Once the DOJ chimes in, the likely outcome is for it to be illegal for sellers to pay the buyer-agent commission. One more time, buyers will feel screwed because now they have to pay for representation, but at least they will be more diligent about who they hire (if anyone).
We will be advancing further down the path towards single agency. Hopefully, an auction house steps in to relieve us from this misery!
