NAR lawsuit Archives - Demetree School of Real Estate

Yes, It Is Still A Great Time to Get Your Real Estate License

In the spring of this year, newspapers across the country ran articles with headlines like:

“Powerful Realtor Group Agrees to Slash Commissions to Settle Lawsuits”
“The 6% Commission on Buying or Selling is Gone After Realtor Association Agrees to Seismic Agreement”
“Realtor Lawsuit Settlement Unburdens Home Sellers from Heavy Commissions”

The inaccurate narrative of these stories is that commissions are going down and real estate agents are not going to get paid as much. What is actually happening is that buyers and sellers will now both be paying commissions.

For as long as I have been alive, sellers paid commissions. Sometimes buyers paid commissions, but it was pretty rare. Also, for as long as I’ve been alive, listing agents (represent seller) made more money the selling agents (represent buyer).

The changes that this lawsuit initiated were both minor and major. The change is pretty minor – Realtors can no longer advertise compensation in Realtor-owned MLSs. But the effects it will have on the industry are massive. That is exactly the reason that it is a great time to get into real estate.

Imagine you’ve been in the industry for several years, maybe even several decades, and something comes along that changes the entire industry. If you are toward the end of your career, you might retire. If you are mid-career or earlier, you won’t retire, but you will have a massive learning curve. You will feel like a beginner again. This is great news for actual beginners – everyone is in the same boat as you are.

You are trying to figure out the best way to explain the buyer broker agreement to a potential buyer, but the 40-year veteran is also trying to figure it out. You are trying to figure whether your seller should offer any buyer compensation, but the top agent at your company is trying to figure it out as well. Everyone is in the same boat.

The last time we saw a change that was so significant that everyone was a beginner was when the internet was invented. The new agents were trying to learn to use the MLS, but the veterans were trying to learn it as well.

If you’ve ever wanted to enter the real estate industry at a time where the playing field was level, now is the time. The first step to getting your real estate license is to take the sales associate prelicensing class at Demetree School of Real Estate.

Please note that Karen Climer has no affiliation with Climer School of Real Estate. Her father, Ron Climer, sold Climer School of Real Estate in 2014. It has since been involved in several mergers and acquisitions and is owned by a large investment company. Karen owns Demetree School of Real Estate in Orlando, Florida.

Is This A Good Time To Get Into Real Estate?

It’s an exciting time to be working in the real estate industry. Due to a recent class action lawsuit against the National Association of Realtors, many things are changing in the industry. Times of transition are times of opportunity.

Some old timers are scoffing saying, “It worked better the old way. Why do we have to do it differently now?” They are blaming the consumers. Consumers should have dealt with the old way rather than filed a lawsuit. Consumers aren’t going to like the new way. Many of them who are toward the end of their career will probably throw in the towel rather than figure out how to get paid under the new rules of business. That’s great for newcomers.

I also think people might try creative business models. Some things I would like to see…

Real estate agents who charge an hourly rate for work they do regardless of whether or not the house sells. This would be similar to what some attorneys do.
Real estate agents who charge a flat fee. For example, for a flat fee of $___, I will show you five houses. If you decide to buy one of those house, the fee goes toward the full commission you would owe.
Real estate agents who offer several packages. For example, for this price, I will put the house on the MLS, advertise it in fancy magazine, and help with the contract. For a higher price, I will do all of the above plus use a professional staging company and drone photography. For an even higher price, I will do even more.
Some agents will stick to the traditional model of pay a commission only if you buy or sell.

There are a few agents who have different offerings, but I would like it to be the norm. In the legal field, there are attorneys who charge by the hour, some who charge a flat fee, and some who charge a commission on the settlement. All of those are normal ways of doing business. I would like to see that happen in real estate. Why?

Real estate is the only industry I know of where good agents get paid the same as bad agents. Most agents charge the same percentage or very similar. This makes it difficult for newcomers to get into the field. Why should I as a consumer hire a new agent when I can hire an experienced agent for the same amount?

I even know brokers who forbid new agents from working for less than their predetermined rate. They would rather you not get the listing than get it for lower rate.

In most industries, new people work for less than experienced people. A brand new web designer is going to charge less than someone with ten years of experience. This is good for the web designer because he can enter the market. It is also good for the consumer because there are various price points depending on what you are looking for. To be clear, I’m not saying that new agents should always charge a lower rate. I’m saying that it is one way to get your business going. Plenty of agents got their business going using other methods as well.

Going forward, I hope that agents are more creative in how they get compensated. I believe that the changes resulting from this lawsuit will be good for consumers, but also good for new agents. The people who are grumbling the most are the old-timer agents who don’t want to figure out a new way to do things.

If you want to get into real estate in Orlando, Florida, there has never been a better time to get your Florida real estate license than right now. Check out Demetree School of Real Estate to get your Florida real estate license. We offer in-person classes or online classes.

Please note that neither Karen Climer nor Ron Climer teach at Climer School of Real Estate or Gold Coast Schools. Climer School of Real Estate was sold by Ron Climer in 2014. It has since been sold a few times and is now owned by Colibri. We are both teaching for Demetree School of Real Estate in Orlando, Florida.