Last week’s Sitzer|Burnett verdict is more than a legal milestone; it is a resounding message from the public that reverberates through the foundation of our industry. The colossal $5.8 billion Sitzer|Burnett settlement, along with the $4 trillion tide of class action suits surging through our courts in its wake, doesn’t just signal change – it demands it. This moment transcends the figures; it’s about charting a bold new direction for Real Estate in the US. It’s time for us to rise, champion innovation, and realign our business ethos with the very heartbeat of our mission – the consumer.
Change is not just knocking; it’s banging down the door. We can either resist and be left behind, or we can welcome it and steer the ship; we at Newfound choose to lead the way.
I’m proud to introduce a 5-Part Blueprint that requires us – the trailblazers of Real Estate – to join forces with policymakers in a mission to elevate consumers’ interests above all. This is more than a strategic outline; it’s our pledge to a future where each choice we make is deeply rooted in the prosperity of the families and communities we serve. United, we will reshape the landscape of homeownership, establishing standards that will not only revolutionize our industry but will also light the way for consumer empowerment.
3 Ways The Industry Can Reform Real Estate:
Champion Consumer Savings
The class action suits have shone a harsh light on the industry’s tenacious defense of hefty commission fees, out of step with consumer expectations. The system has safeguarded agent profits, not consumer equity. It’s time to shift from defending our fees to actively finding ways to lower them. Selling a home shouldn’t cost 5-6%. That’s why Newfound has introduced a lean 1% listing fee and empowered sellers to choose if and what they’ll pay a buyer’s agent. By leveraging technology and optimizing our processes, we’re focusing on savings and efficiency to restore consumers’ trust in the value of our services.
Embrace the Benefits of Salaried Agents
The traditional 1099 independent contractor model has too often placed brokerage profits above client satisfaction, fostering a transient agent culture where licensees hop from brokerage to brokerage, creating a lack of accountability and forcing brokerages to focus on recruiting and creating ever sweeter deals for their real clients, the agents. By shifting to a W2 employee framework, brokerages can synchronize their objectives with consumer welfare, driving a consistent, elevated standard of service. Such a structure fortifies accountability, cultivates extensive training, and fosters professional growth, delivering unparalleled service quality that the present system rarely guarantees.
Customize Services and Pricing
The outdated, uniform commission model overlooks the diverse needs of our clientele. From first-time buyers to investors and everyone in between, each customer’s journey is unique, demanding bespoke service and fair pricing. Newfound is pioneering this change, offering everything from 1% full-service listings to a flat-fee, DIY listing platform, ensuring that our clients’ individual needs are met with precision and care.
2 Ways The Government Can Aid Our Evolution:
Establish a National Standardized MLS with Free Listing Access
A centralized, national MLS would level the playing field, providing equal and transparent access to real estate data for all. By offering free basic listing access, it would empower consumers and innovative startups alike, nurturing a more dynamic, competitive, and fair market. Many have tried to build this solution and have been met with opposition and structural roadblocks. It’s time we revisit this.
Eliminate Seller-Paid Buyer Agent Commissions
By shifting to a system where buyers directly pay their agents, akin to models in the UK and Australia, we can create a market that thrives on transparency and aligns with the buyer’s best interests. Such a system would encourage agents to excel in service, fostering a market dynamic where excellence is the currency of choice.
At Newfound, we are ready to be the vanguards of these reforms, but the journey ahead requires a collective stride. We invite you to stand with us, for in unity lies the power to enact the significant, lasting, and transformative change that will not only redefine our industry but also restore the trust of those we are here to serve.
Let’s march forward together with a shared vision to refine our practices and establish new benchmarks of integrity and equity that every consumer deserves.
In solidarity and anticipation,