The Scoop: Realtors must prove their worth in new era of home selling

The rocky real estate market endured another seismic shift Friday when the National Association of Realtors agreed to settle a massive lawsuit brought by homeowners. As part of that settlement, a century-old rule requiring home sellers to foot a 5-6% commission to be split between buyers and sellers agents in order to be included in the Multiple Listing Service will end, the Washington Post reported. The NAR also agreed to pay $480 million in order to settle multiple class action lawsuits.

While a federal judge must still approve the settlement, there is already widespread speculation about what impact the settlement will have on the housing market. NAR critics are celebrating the settlement, claiming it will reduce housing prices. Research and advocacy organization Consumer Federation of America estimates it could save Americans a collective $30 billion a year.

But naturally, this presents huge challenges for real estate professionals, who suddenly must prove their worth in ways they’ve never had to before.

So far, the NAR has released a dry, detail-oriented statement describing the settlement and denying wrongdoing.

“This will be a time of adjustment, but the fundamentals will remain: buyers and sellers will continue to have many choices when deciding to buy or sell a home, and NAR members will continue to use their skill, care, and diligence to protect the interests of their clients,” said NAR President Kevin Sears in the statement.

Why it matters: This represents a unique challenge for an entire industry. After a century of having an intense degree of control over the Multiple Listing Network (MLS), a critical tool for buying and selling homes, to protect realtor compensation and allow buyers to use an agent at no cost to them, everything seems set to change.

NAR will have a difficult battle ahead. Not only must they educate consumers on why a realtor is worth their money, they must convince members of the profession to stay when their compensation is suddenly uncertain. Some estimates suggest that as many as two-thirds of the country’s 1.5 million realtors could leave the profession. It’s certain that compensation models will change drastically, with the Post suggesting that a-la-carte pricing, flat-fee pricing and reduced services will likely all be on the table.

This is certainly a frightening moment for realtors. But a strong, fast PR campaign can help them convince a cash-strapped public of the need for their services. By focusing on positioning real estate agents as trusted guides in a complex and expensive process, they might be able to usher in a new — albeit different — era for the industry.

Editor’s Top Reads:

• Boeing’s woes continue to compound by the day. No, this isn’t a repeat of a Scoop item from last week. A Boeing 737-800 flying for United safely landed — missing an exterior panel. Unlike the infamous Alaska Airlines flight that lost a door in flight in January, no one noticed the panel was missing until the flight was parked at a gate in Medford, Ore.. It was also discovered that a known faulty switch cover was the cause of a frightening incident on a Latam Airlines 787 Dreamliner that injured 50 people. A flight attendant bumped the seat switch (which should have been covered), causing the pilot to lurch into the controls and cause a sudden change in altitude. Every mounting incident chips away more at trust from both airlines and the public, not to mention the government. Boeing must move quickly to explain these incidents and how it will fix things. At the moment, the company is still bleeding, badly. It must staunch the flow before it can begin to heal.
• If a TikTok ban does become law, that’s unlikely to be the end of the story. The Wall Street Journal notes that a free speech battle would likely ensue if Chinese-owned ByteDance is faced with a choice between selling the company or ending distribution in the U.S. How successful that suit would be remains an open question, with many of the free speech matters involved still untested in American courts. In November, however, a judge ruled that the state of Montana could not ban TikTok, since Tiktok “provided a unique form of communication for some users, and Montana hadn’t justified its move to cut off the platform entirely.” According to the Wall Street Journal. First we’ll see if the bill passes the Senate; then we’ll see how courts respond. Have you brushed up on your Reels strategy lately? No reason, just asking.
• In vitro fertilization is presenting a messaging quandary for Republicans who have long argued that life begins at conception, NPR reported. The popular treatment helps couples conceive by implanting fertilized eggs — but often leaves some of those eggs unused when children are successfully conceived. Republicans’ messaging that life is made the moment a sperm cell meets an egg cell has worked within the party, leading to a brief ban of IVF in Alabama, though that was quickly walked back via legislation. Still, the party is now left attempting to reconcile its messaging with the popularity of the treatment among many families struggling to conceive. Watch for how this continues to play out in the upcoming election.

Allison Carter is editor-in-chief of PR Daily. Follow her on Twitter or LinkedIn.