In this week’s BAM interview, Byron Lazine spoke with Latter & Blum CEO Lacey Conway on questions circulating among real estate professionals—including the NAR settlement. 

And the conversation gave us plenty to think about. 

Two of our favorite takeaways from the interview: 

  • Conway’s take on the settlement agreed to by the National Association of Realtors, specifically the part where they leave some of their oldest supporters out in the cold
  • What the CEO club in real estate needs more of—and the unintended consequences of tight-lipped leadership

Read on for a detailed breakdown of those two takeaways. And block out some time to enjoy the full conversation

Disappointment among leaders of large brokerages

Agents and brokerage leaders across the U.S. are talking about the settlement agreed to by the National Association of Realtors® (NAR). And among leaders of larger brokerages, in particular, the predominant feeling is disappointment. 

For some, it goes even further—to betrayal. After all, for years these larger brokerages have supported NAR and defended its existence. Some even defended the tie-in agreement that, in many states, makes NAR membership a requirement for access to the MLS. 

Something shifted when word got out about a particular condition of the NAR settlement. 

Per that condition, 94 brokerages—those with transaction volumes exceeding $2 billion—were left out of the settlement. Compass, the very brokerage that recently purchased Latter & Blum, is among those 94. And rather than embrace the exorbitant cost of opting in, the company reached a settlement of its own for far less.

Conway has had many conversations with other leaders in the industry about the NAR settlement and its terms. 

Here’s some of what she had to say: 

I’m irritated right now with the NAR settlement absolutely throwing the brokerages that are $2 billion and above under the bus. I want to reiterate that. I don’t think NAR has felt the real rage of those companies that are livid…They’ve said, ‘Here’s your out,’ but it’s a horrible out. And why can you say, ‘We’re going to draw this line and protect these people but not these,’ when I would argue that these large brokers have been basically supporting the existence of NAR from the beginning? And what kind of thank you is that?

Lacey Conway

Latter & Blum CEO

With that as the general sentiment, it’s fair to ask whether more leaders of independent brokerages will decide a partnership is in the best interest of their agents. Will more independent real estate companies choose a path similar to the one taken by Latter & Blum?

I do feel like all these brokerages that have been around for all these years, certainly they’ve weathered storms. This one just feels different. This one has brought a lot of pain to brokerages that were already under pressure… I just think it’s going to force a lot of medium-large brokers to consider, ‘What are my options? What is the best path forward?’ …basically, ‘What’s the best thing for my agents?

Lacey Conway

Latter & Blum CEO

As Zillow CEO Rich Barton said on stage at the T3 Summit, the industry will weather this storm. That said, leaders most affected by commission lawsuits are understandably less sanguine about the coming changes—especially since NAR membership is still required in most states for MLS access. 

I think there is going to be radical change, even touching on this utter disappointment… Agents are asking themselves, ‘Why is it that, even throughout all the lawsuit stuff, why is it that we are still essentially hostage to NAR to access the MLS?’ That’s a big boulder that I feel has not been addressed in this whole situation…I feel like we haven’t even felt the seismic change shifts that are coming. They might take a little more time but…there will be major changes within NAR. There’s a lack of trust, a lack of faith in leadership. These are big topics.

Lacey Conway

Latter & Blum CEO

Lazine brought up an alternative solution for NAR, which the trade association was determined to avoid, even when it meant leaving 94 large brokerages out of the settlement: 

The only reason NAR has given for drawing that line is to avoid bankruptcy for the association, while bankruptcy has been an option for other businesses to survive and even come back.

Byron Lazine

He asked Conway if she thought the consensus of the brokerage community would prefer that NAR had gone through the bankruptcy or continued down the legal path or—option three—included everybody in a settlement. 

I just feel like, as a trade association that’s gotten the reputation [based on] what NAR is supposed to stand for, it just feels like a colossal disappointment for every broker that it wasn’t somewhat all-inclusive to say, ‘We’re going to protect everybody up to this point.’ By drawing that line, it just feels really disappointing for the ones that were excluded.

Lacey Conway

Latter & Blum CEO

What does the CEO club in real estate need more of?

On the heels of discussing Compass CEO Robert Reffkin’s approachable and hands-on leadership style, Lazine asked Conway what the CEO club in real estate needs more of moving forward. 

That’s at least in regard to openness to different perspectives. It’s not about checking a box for diversity but about adding quality people with challenging perspectives who are invested in making the real estate industry better. 

Conway shared her fascination with the Compass team, made up of “incredible, smart people that have been in the industry for a while.” 

So, what does the industry need more of to keep growing in the right direction? 

Real leaders make it a priority to know what their agents and team leaders are really dealing with—on a regular basis or out of left field—and how they can help. 

Standouts from the trend in tight-lipped leadership

During the interview, Lazine didn’t hesitate to thank Conway for her willingness to sit down with him and answer some questions: 

  • About the sale of her company Latter & Blum to Compass
  • About CEO Robert Reffkin’s leadership style 
  • About her thoughts on the NAR settlement
  • About what the industry needs to adapt and evolve in a post-settlement world

There are leaders downstairs in that room that wouldn’t even do this and sit down with me—or sit down with anybody, for that matter. They’ll get on the stage and give very vanilla answers. Not that you have to have a social media presence but…if you don’t give straightforward answers on stage and you say, ‘Well, you know, we can’t say certain things,’ well, Andy Florance is worth more than anybody in that room and he says whatever he wants any moment that he wants to say it. So, people could take a page out of his book.

Byron Lazine

True enough. Florance has a well-earned reputation for speaking his mind and sharing his perspective with clear and forceful language. 

So, what does that mean for leaders who feel constrained to keep a tight lid on what they’re doing for the industry and, even more importantly, for the agents affiliated with their brands? 

At some point, the agents are going to say, “I can’t see anything that the leader’s doing. So, what are they doing for me?” And that’s where you see some agent counts potentially going the opposite direction that they would hope.

Byron Lazine

So, it was refreshing when the recently-appointed president of the National Association of Realtors (NAR), Kevin Sears, agreed to an unfiltered BAM interview with Byron. 

He knew Byron wouldn’t stick to softball questions. He also knew, thanks to his conversation with Jared James, that he would be treated with respect and consideration. There would be no grilling on questions Sears was unable to answer. 

The fact that he showed up for the interview speaks volumes. 

Trying to have these open discussions can be difficult…and that’s where I was going with some of the leaders not willing to say things… They’re not communicating. That’s what I think is concerning. So, then working on the problem can be seen as complaining or, I would say, holding accountable. You can view it that way but it’s a one-sided discussion right now. There’s a lot of teleprompter reading that goes on, especially from the association, as opposed to a town hall experience… At some point, that doesn’t work anymore.

Byron Lazine