Massive verdict in historic real estate case
Plus, latest stunning twist in NAR saga
Hanging in the balance
Without a doubt, this was an unbelievably eventful week in real estate. It’s not hyperbole to say the future of our industry hangs in the balance as we await the final ruling in the Sitzer/Bennett case.
We’ll recap the latest details below, but as we await further developments, we’ll remind you to focus on what you can control. We work in an industry where there are always changes happening week to week, and that’s very true right now. We can’t change that. What matters is how we react.
As always, we will keep you posted with our take on all the latest in this case, and this massive issue facing our industry.
- James and David
Jury renders its verdict in Sitzer/Burnett
St. Louis, MO: https://bit.ly/3u5Fohn
On Tuesday, the jury in the Sitzer/Burnett case concluded that the National Association of Realtors, along with other major real estate brokerage firms, conspired to inflate and fix home prices by enforcing the cooperative compensation rule. Here’s what else the jury decided, and where the case currently stands.
The jury awarded $1.785 billion to the plaintiffs in damages.
The damages amount could change because the judge has the discretion to lower the amount awarded by the jury. Following the verdict, NAR filed a motion requesting this.
In the next few days, the judge is expected to issue a ruling that could mandate immediate changes to the real estate compensation system as it currently exists. Since Sitzer/Burnett is a federal case, the ruling could have nationwide implications.
NAR, Keller Williams, and the other defendants have vowed to appeal the verdict
The amount of damages awarded by the jury was massive, but so far, nothing has changed in how agents should currently operate in their active deals. We will have to wait for the judge's final ruling on the case. He could upend the entire system or take a modest approach. Various outlets have gamed out the possible options he could take, but it’s conjecture at this point. Until the ruling is handed down, we’re in a waiting game right now. What is absolutely clear, though, is that this case, and this issue, is not over by a long shot. The trial lawyer in this case has already filed another class action lawsuit, the defendants are set to appeal, and the Department of Justice has yet to decide whether it wishes to file suit against the industry as well.
Where home prices are going for the rest of the year
Source: Keeping Current Matters
Housing forecasters expect home prices to grow by 3.9% on average by the end of 2023. That’s according to the latest analysis by KCM. Here are the key points:
In 2022, home prices dipped in Q3 (-0.46%) and Q4 (-1.24%)
Home prices have increased in every quarter of 2023
All the major housing forecasters expect home prices to keep rising, at an average prediction of 3.9% by the end of 2023.
There’s been a lot of misleading information about home prices over the past year. And that’s still having an impact on how people are feeling about the housing market today. It’s our job as agents not only to stay on top of market trends but also to communicate them to our clients and the public at large. Whenever you talk about the housing market, set yourself apart by being a well-informed broker who can give precise and clear guidance with the backup to support it. Trust us, you’ll leave a lasting impression.
NAR CEO Bob Goldberg resigns
La Jolla, CA: https://bit.ly/49iGgzv
Bob Goldberg, the CEO of the National Association of Realtors (NAR), quit earlier than expected after the loss in the Sitzer/Burnett case. According to CNN, Goldberg will step down at the end of the month after previously saying he would retire at the end of 2024. The announcement comes on the heels of a federal jury finding NAR liable for artificially inflating home sales commissions.
Even before the jury’s verdict, NAR’s leadership was already under fire, when its president, Kenny Parcell, resigned two days after The New York Times published a story detailing sexual harassment claims against him.
Starting Nov. 30, Goldberg will be replaced by Nykia Wright, who is serving as interim CEO while the association searches for a permanent replacement.
As we’ve said before, NAR’s name and prestige have taken a hit this year given how it handled the allegations against Parcell and now the Sitzer/Burnett trial. So, although this bit of news is stunning, it isn’t surprising. It’s too soon to say what direction NAR is headed as so much is in flux now, but regardless, count on us to keep an eye on this and keep you apprised of what’s important.
The news that just missed the cut
Advice from James and David to win the day
As we reported last week, real estate cancellations are occurring at the highest rate in more than a year. This is already having real-world consequences for some agents in the field. To stay ahead of this troubling trend, and help your clients navigate this situation, here are some tips on how to handle cancellations.
Lose the deal, not the client – For various reasons, clients might sometimes want to kill the deal. They might get cold feet before they have to sign the dotted line. It happens. But while losing a deal is an unfortunate part of our business, losing a client doesn’t have to be. That’s why it’s key to have a reset meeting where you go over any concerns your client may have. Talk through why the deal went sideways and reset expectations. Use this helpful guide to walk through those conversations.
Provide clarity for your clients – Typically, cancellations are the result of uncertainty and confusion. That means, as agents, we’ve got to provide clarity, guidance, and assurance to our clients. Make sure you have answers to any questions that might arise. What’s going on in the market? What’s happening with rates? What does Fed policy mean for home buyers and home sellers? Be specific and support your answers. Remember: they’ve come to you for advice because they need it.
Never let your pipeline go dry – To ensure that cancellations don’t negatively impact you and your business, make sure you never let your pipeline go dry. The number one job of any agent is to find potential buyers. Over the next six months, try to add one to two people to your pipeline every day.
For more excellent tips on how to beat cancellations, start here.
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Just in Case
Keep the latest industry data in your back pocket with today’s mortgage rates:
Source: Mortgage News Daily
That’s a wrap on this edition of The Blueprint!
Remember: each day is a gift and a new opportunity to lead the life you want and to become the person you want to be. The mistakes and missteps you’ve made in the past don’t define you. Live as intentionally as you can and be ruthlessly focused on the goals you’ve set out to achieve. You can do it!
Thanks for reading, and we’ll see you back here on Tuesday!
- James and David