If The DOJ Gets Their Way... Here Is What Will Happen To The Real Estate Industry with Joshua Smith

Summary

In this informative podcast, Joshua Smith discusses the potential impact of the Department of Justice's (DOJ) intervention on the real estate industry, particularly concerning the National Association of Realtors (NAR) settlement proposal. Smith outlines the current commission structure and the DOJ's push for true commission decoupling, which could significantly disrupt buyer agency. He emphasizes the importance of preparation and adaptability for real estate professionals, suggesting strategies to maintain business success amidst these changes. Smith advises real estate agents to continue successful practices while also developing new listing niches and improving buyer consultation skills. He also offers a free Zoom coaching call for agents, team leaders, and brokerage owners to discuss strategies for business growth and preparation for industry changes.

Takeaways

• 📚 **Preparation is Key**: The speaker emphasizes the importance of being prepared for changes in the real estate industry, suggesting that history favors those who are most prepared.
• 🚨 **DOJ Influence**: There is a discussion about the Department of Justice's (DOJ) potential impact on the real estate industry, highlighting the power and influence the DOJ has, as demonstrated by recent events with FISA.
• 💰 **Commission Decoupling**: The script talks about the DOJ's stance on true commission decoupling, where the seller pays the listing agent and the buyer pays the buyer's agent, with no compensation between them.
• 🏡 **Impact on Buyer's Agents**: If the DOJ's desired changes are implemented, there could be a significant disruption in the buyer agency, as agents may no longer receive compensation through concessions.
• 🌐 **Global Comparison**: The speaker references real estate practices in other countries, where buyer agency exists in theory but is not commonly practiced, with buyers often going directly to listing agents.
• 🤝 **Buyer Broker Agreements**: The National Association of Realtors (NAR) settlement proposal requires buyer broker agreements to be signed upfront before showing physical homes, which agents should prepare for.
• 📈 **Continue Successful Strategies**: The advice is to keep doing what is working currently in terms of generating business, while also preparing for potential changes.
• 📊 **Listing Niche Focus**: It's recommended to add at least one effective listing niche to the business strategy, targeting those who need to buy or sell, not just those who want to.
• 🛠️ **Skill Set Diversification**: Real estate professionals are encouraged to become adept at both buyer and listing specialization to avoid becoming obsolete in the face of industry changes.
• 📈 **Market Adaptability**: The speaker stresses the need for real estate professionals to identify which segments of the market are favorable and adjust strategies accordingly.
• 📞 **Free Coaching Offer**: The speaker offers a free, no-pressure Zoom coaching call to help real estate agents, team leaders, and brokerage owners map out strategies for business growth and preparation for industry changes.

Q & A

What is the main concern discussed in the podcast regarding the real estate industry?

The main concern is the potential impact of the Department of Justice (DOJ) cracking down on the National Association of Realtors (NAR) lawsuit settlement, which could lead to significant changes in how real estate professionals operate, particularly in the area of commission structures.

What is the current best-case scenario for the real estate industry as mentioned in the podcast?

The best-case scenario is that the NAR settlement proposal, which has preliminary approval, goes through without significant changes, allowing the industry to continue with modified commission structures but without full commission decoupling.

What does the DOJ want in terms of changes to the real estate commission structure?

The DOJ wants true commission decoupling, where the seller pays the listing agent and the buyer pays the buyer's agent, with no compensation or concessions flowing between the two parties.

How does the current NAR proposal differ from the DOJ's desired outcome?

The NAR proposal allows for some form of commission coupling through seller concessions, which can be applied to the buyer agent representation fee. This is not full decoupling, which the DOJ is advocating for.

What is the potential disruption if the DOJ gets its desired changes?

There could be a massive disruption in the real estate industry, particularly affecting buyer agency, as buyers may not be able to afford separate representation fees, potentially leading to a decrease in buyer agency services.

How does the speaker suggest real estate professionals prepare for potential changes?

The speaker suggests having world-class buyer consultations, improving negotiation skills, understanding how to articulate value, and preparing for the possibility of no concessions being offered by sellers.

What is the importance of continuing current successful strategies while preparing for changes?

Continuing successful strategies ensures stability and growth in the business while allowing for a smoother transition and adaptation to any new requirements or market conditions that may arise from the potential changes.

Why is adding an effective listing niche recommended for real estate professionals?

Adding a listing niche helps real estate professionals diversify their services and client base, making them less vulnerable to changes in buyer agency and better prepared for a market that favors sellers.

What are some of the listing niches that are currently getting the best results?

The best-performing listing niches mentioned are expired listings, for sale by owners (FSBOs), absentee owners, divorces, and pre-foreclosures.

How does the speaker propose real estate professionals should approach changes in the market?

The speaker proposes a proactive approach where professionals take full responsibility for their success, identify which segments of the market are favorable, and adjust their strategies accordingly without fear.

What is the offer made by the speaker to real estate professionals who are unsure about their strategies or business direction?

The speaker offers a free, no-pressure Zoom coaching call to help professionals assess their current business status, goals, obstacles, and to map out a personalized strategy for growth and success.