Younger voices like you are the future of the industry. You’re the ones who will drive these changes forward.
That’s especially true when it comes to the most recent changes in the industry, starting with the aftermath of the NAR settlement and the fate of NAR’s Clear Cooperation Policy and the MLS.
At the BAM Mania main event last Friday, October 18, BAM co-founder Byron Lazine sat down with Rob Hahn, aka Notorious ROB, for a fireside chat on these topics.
I’m sitting with Rob Hahn, and for those of you that don’t know Rob, he’s well-known for his Substack and the great podcast Industry Relations. He’s somebody that I read religiously to be more articulate about what’s going on and all the changes happening.
Before the conversation kicked off, Hahn made an observation about the BAM Mania audience, saying, “This might literally be the youngest audience I’ve ever spoken in front of.” He then asked how many were Gen X, Millennials, or Zoomers—and it was clear that Millennials filled the bulk of the room.
It’s an important detail. And that becomes clearer as the two discuss the future of the real estate industry, with each sharing insights on what it means to be an agent of change in today’s market. And while that moniker is certainly not limited to generations Y and Z, those are the generations whose decisions will shape the industry over the coming decades.
Read on to enjoy the highlights of the fireside chat. There’s a reason Hahn has been invited to join Byron and his co-host Nicole White on The Real Word multiple times.
NAR’s Clear Cooperation Policy (CCP)
As younger agents continue to join the industry, their ideas will exert more influence on policy decisions, including the direction NAR ultimately takes with its Clear Cooperation Policy. Lazine asked Hahn to share his opinion on that policy and on how the industry should move forward.
I think the Clear Cooperation Policy is dead one way or the other. It will either die because they are willing to make changes or because large corporations will simply stop caring…And the issue is the brokerages, the large brokerages, quite frankly, they’re not doing that well…They have a humongous incentive to improve their margins. It turns out the MLS flattens those margins.
The only way Clear Cooperation Policy survives is if it becomes a federal regulation or legislation. In other words, as Hahn puts it, NAR will no longer have the power to enforce it or to decide its fate.
One could argue that NAR’s ability to enforce it is already weakening. Hahn mentioned the Park City Board of Realtors and the recent announcement of their decision not to enforce the CCP. That’s a local association deciding not to follow NAR’s lead.
In Hahn’s view, that decision is a flashing neon sign that Clear Cooperation is done. The question now is what real estate agents can expect in its wake.
The Future of the MLS
So, if Clear Cooperation is on its way out, what does that mean for the future of the MLS?
In Hahn’s view, the MLS is going to change—but not right away. The next two or three years won’t likely see any major changes, but in ten years, the MLS as we know it will be different.
For one, the number of MLSs in the U.S. will probably be far less than today’s 525.
Hahn’s personal opinion is that we’ll end up with somewhere between three and 30 MLSs. Alluding to the three major telecom companies, he suggested MLSs will consolidate in much the same way.
The real issue here is compensation. If it no longer flows through the MLS, that begs the question, “What do agents really need the MLS for?”
That question is the subject of a recent WAV Group survey, with 55% saying their MLS will be “much less” or “somewhat less” valuable with the offer of compensation removed.
Lazine referenced Hahn’s 13 years of consulting for MLSs and asked, “If you were advising them now, would you tell them to sell at what might be peak valuation, or to try to innovate?”
I don’t think profitability is really the issue for MLSs. If I were advising an MLS, I’d tell them to consider selling, especially if they’re small. The big ones might be okay, but the small ones have to ask themselves if they want to ride out the storm. The industry is changing, and while nothing will change in the next two or three years, they need to start planning for the long term.
Another question worth asking is “If you’re an agent, what do you lose by leaving the MLS today?”
Before August, buyer agents had guaranteed compensation. Today, agents still rely on MLSs as a central database of property listings for a specific market (or groups of markets). The question is whether MLSs will continue to be the one complete source of available listings—or whether they’re already losing that distinction to platforms like Zillow and Realtor.com.
If they lose that, agents who are only paying for NAR membership to retain MLS access may decide it’s no longer worth the annual fee—especially when posting on the MLS bears the risk of hefty fines (without warning) if they post so much as a hint about compensation.
Hahn can easily see brokerages, vendors and franchises stepping in to fill the gap left by the MLS. But for that to work, a significant percentage of real estate agents would need to be comfortable with the idea of leaving the MLS behind. And that won’t happen overnight, if it ever does. As Hahn reiterated, a substantial shift in MLS usage would probably take 2-3 years.
As if to confirm this, Byron asked the audience to raise their hands if, over the past year or two, they’ve considered leaving the National Association of Realtors® (NAR). Several hands went up, though not a majority of the audience. Fewer hands went up for those considering leaving the MLS as well.
The Future of the MLS
Lazine asked Hahn how he would reshape NAR if he were CEO.
I’ve been saying this for 15 years. The way I would reshape NAR is roughly only about 10% of licensed agents should be allowed to have a Realtor tag. NAR is powerful if a small minority of licenses have it. This is something you should aspire to, not just something you get by passing an exam… That’s what NAR used to be. It needs to get back to all of that. It really needs to get back to advocacy; it needs to get back to the vision of the Code of Ethics.
If you read the preamble to the Code of Ethics, it tells you the whole point of being a Realtor is that this is not just a business; this is a calling. It talks about patriotic duty, it talks about civic responsibility.
Hahn called BS on the fact that NAR has essentially no position on housing affordability, which might be the biggest crisis this country is facing right now. Just saying “We need to build more houses” or “We need cheaper mortgage rates” does nothing to help Millennials and Zoomers who cannot afford to buy housing.
If the NAR can’t do more than that—and is either unwilling or unable to get back to its roots in advocacy and ethics enforcement—agents will find it more difficult to justify the cost of membership, especially if we somehow manage to decouple NAR membership from MLS access.
The NAR Settlement & New MLS Rules
Lazine’s next question centered on the NAR settlement, specifically asking Hahn to share his position on offering buyer broker compensation off the MLS.
There are a lot of very strong voices in the industry—one being a great friend of mine for years, Sharran, who says, ‘Anyone who’s doing that needs to stop immediately. That is going to die. That will die. So, even though it’s [protected] in the settlement, stop doing it.’ What’s your position?
Hahn responded by pointing out that, competitively speaking, he didn’t know how that could work to an agent’s advantage. That said, he admitted it’s still early days and probably too soon to tell exactly where the majority of agents will land on this issue.
Let’s give it 2-3 months. By the end of Q1 next year, I think we’ll see only about 10% of agents still doing this compensation offer…The rest will have moved on to other models, because the industry is evolving.
The main thing for agents is to do what’s in the best interests of their clients. So, no matter what either side is saying at the outset with regard to commission rates, those terms are always going to be subject to negotiations further along in the process.
Everything in this industry is marketing your position. The listing price is irrelevant. The as-is language is irrelevant. Basically, we’ve now come to figure out everything means nothing. So, just negotiate everything.
Hahn agreed saying, “Just work through your client’s best interests. That’s it.”
How Agents of Change Can Reshape the Industry
For his final question to Hahn, Lazine asked what one thing he would suggest the agents of change (in the room and across the continent) can do to reshape the industry for good.
Hahn doesn’t see organizations like NAR taking the help and steering the industry to a better place; he sees younger agents, the newer generations of real estate professionals, talking to their brokerage leaders and letting them know, “This is what I’m seeing in the industry right now, this is my take on it, and this is what I’d like to see” before outlining the type of leadership they need or are willing to provide in today’s industry.
Today’s top agents tend to be older, with decades of experience and hard-earned wisdom, but they’re getting younger with each passing year. Younger agents have a fresher perspective on the industry and what is needed right now to be the guides and advocates consumers need.
Both are essential to moving the industry forward in a healthy direction, with the overall mission front and center. Agents of change need to know where we’ve been to gain a clear understanding of where to go next.
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