The rules of the residential real estate game may soon change—big time. A mid-March announcement from the National Association of Realtors sparked an ever-growing swirl of media coverage that tried to capture the magnitude of an industry-altering moment.
Some reports provided factual breakdowns. Others tried to predict the future. And some, according to the NAR, were downright misleading.
“Attention-seeking headlines gets people talking, and it has worked,” says Keith Conlon, president and CEO of Dallas-based Allie Beth Allman & Associates. “A lot of people are talking about it. I listen to The Ticket regularly in the morning, and Sports Day 1310 The Ticket’s talking about it.”
And there was much to talk about. The NAR announced on a Friday that it had reached an agreement that would end litigation of claims brought on behalf of home sellers. As part of the agreement—which has yet to be approved by the courts—the NAR agreed to prohibit offers of broker compensation on the Multiple Listing Service (MLS).
The association also agreed to require MLS participants working with buyers to enter written agreements with clients. The changes are expected to go into effect in mid-July. In addition, the NAR, which denies wrongdoing, would pay $418 million over about four years.
What could this settlement mean for the future of residential real estate in Dallas? We talked to three industry experts to find out.
Rogers Healy
TITLE: Owner and CEO, Rogers Healy and Associates Real Estate
BY THE NUMBERS: Sales volume for 2022 was approximately $1 billion
THE BRIEF: Established in 2006, Rogers Healy and Associates is the largest independent brokerage in Dallas. Services include residential and commercial brokerage, including buyer, seller and apartment locating. The company is the official real estate partner of the Dallas Mavericks.
“In short, it’s going to make residential real estate a more professional environment. I’ve hoped for this for a long time. And the barrier to entry is going to be a little bit more than a pulse and a social media account.
“It’s going to take some unique navigating, but we’re still waiting on people who are a part of the real estate transaction to take a stance and let us know their thoughts—most notably, mortgage companies. But yeah, it’s something that I don’t think anybody could have anticipated, ever. And now that it’s a thing, we’re all quickly learning how to adjust.”
Business Model Ramifications
“I’ve have a hard time thinking it’s going to completely turn the industry upside down. I think that we’ll see a lot of realtors leave the industry, people who are just either stubborn or not interested in learning something new.
“When opportunities like this arise, at the end of the day, it’s a big opportunity to take market share. The hardest thing for a successful person to do is to take a step back from what’s working, but right now, people are going to have to really go and take a big look at their business and see where the holes are, and, you know, build a monster. To some people, that’s exciting. To some, it’s not.”
Impact on DFW Market
“I honestly don’t think we’re going to see a difference. I think that we continue to have historically low inventory, we continue to have historically high amounts of people moving here, and that’s not going to shut down just because there’s some modifications behind the scenes of real estate. I think if anything, it’s going to speed it up.”
Russ Anderson
TITLE: President, Briggs Freeman
BY THE NUMBERS: Sales volume was $2.3 billion for 2022 and $2.4 billion for 2023
THE BRIEF: Founded in 1960, Briggs Freeman Sotheby’s International Realty specializes in luxury brokerage in North Texas. Anderson, who took the helm in 2021, oversees the firm’s long-term strategies and manages day-to-day functions.
“I think it will differentiate professional agents from hobby agents. I think it will create conversations and transparency that’s good for the industry. I think it will create positive movement in the industry.
“There will be some new solutions that people come up with. I don’t for a second believe that there won’t be some change in some communications to share if a seller voluntarily wants to provide a commission to the buyer’s agent. That’s clearly going to happen somehow. I don’t know how, but I think it will happen somehow.”
Impact on Competition
“This market is incredibly competitive. And I don’t really see a whole lot of difference. Now, if a meaningful number of agents leave the market, does that make the competition change? I actually don’t believe so. Because I don’t necessarily think that the group that’s thinking about leaving is making that much of a competitive impact in it.
“I think the real professionals stay, and the real professionals figure out how to work with it. And I think they’re the ones that create the competition, from broker to broker.”
Being Proactive
“Ultimately, what we want to do is get in front of it. We want to be thoughtful and try to be proactive and foresighted to give our agents and clients good advice and good feedback so that they don’t feel like they’re just flapping in the wind.”
Keith Conlon
TITLE: President, Allie Beth Allman & Associates
BY THE NUMBERS: Sales volume has topped $3 billion for two consecutive years
THE BRIEF: Formed in 2003, Allie Beth Allman & Associates is a Berkshire Hathaway affiliate that specializes in luxury homes. Under Conlon, the brokerage surpassed the $2 billion sales mark in 2018, launched offices in Southlake and Lakewood and has grown to include nearly 400 agents.
“Commissions have always been negotiable, for as long as I’ve been in the business, or for a long time. Six percent is not a set number by any stretch of the imagination, with NAR or anywhere else. That was just kind of a number that it landed on, but it’s not binding by any means. There’s this public perception of, ‘The 6 percent’s going out the window.’ Well, 6 percent was never a set industry number anywhere.
“From our perspective, and our clientele, it’s always been, ‘We’re a full-service brokerage, we know what our value is, and here’s what we do. And here’s what you get for paying this commission.’ I think there will definitely be change in the industry, but I don’t think it’s going to be as drastic as 80 percent of realtors are going to be out the window and fees are going to be cut 50 percent. Because buyer agents do bring value.”
Impact on DFW Market
“We’re in such a great area that people want to be here, and there is low inventory, so much happens off market that the value of the realtor is there. … So much in these communities happens off the MLS, agents are needed to facilitate those deals and connect buyers with sellers and everything else.
“The agents, especially the really good ones, know what their value is. So, I think people can find common ground and say this is what they think this transaction is worth.”
Business Model Ramifications
“We’ve proven for 40-plus years that we’re a high-quality brokerage and do things the right way. You can go get a piece of beef at McDonald’s or Al Biernat’s—it’s just, what do you want to pay for? You can pay all kinds of prices. That’s kind of where the brokerages are—there’s one size fits all for everybody, and then there’s high-quality shops, and there’s, you know, pay a flat fee.
“So, there’s everything out there. We’ve seen it for a long time. So I don’t think it changes the business model, so to speak, because there’s always been different kinds of models out there for everybody.”
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