With over 40 years of industry experience and a deep understanding of major industry changes, Wayne explores the possible effects of recent lawsuits, like the Sitzer Burnett and Toronto class action lawsuit, on the real estate world. Let’s dive into the valuable insights he has to share on how brokers can get ready for what’s coming next.
Impact on Verdict Brokers vs. Settlement Brokers
In real estate, there are two main groups: verdict brokers, impacted by legal judgments, and settlement brokers, who settle before a verdict. Settlement brokers have clearer liabilities and are more secure, while verdict brokers face financial risks, especially in antitrust cases where judgments can triple. Lack of industry liquidity for large verdicts poses a threat to major players.
Despite challenges, the impact on the real estate industry may be limited. Historical market dynamics driven by buyer and seller needs shape industry practices. Buyers want representation without heavy financial burdens and sellers seek exposure to a broad market. The industry is expected to adapt, ensuring commissions are paid, and both parties’ needs are met.
While financial challenges exist for verdict brokers, the resilient nature of the real estate market, driven by buyer and seller desires, is expected to guide the industry through challenges, fostering adaptation and continued functionality.
Variable Commission Model and Lack of Excess Profit
Let’s bust the myth that real estate makes huge profits. The commission model, based on market changes, stops excessive earnings. While real estate pros earn well, it’s crucial to know private jets and mega yachts aren’t common. The industry follows market needs, making sure pay matches the economy and client needs. This shows it’s fair and practical, debunking the idea of unexpectedly striking it rich.
Copycat Lawsuits and Future Liability
A big worry right now is that other lawsuits might follow the recent one. Brokers who didn’t settle are in a tough spot, as lawsuits are popping up against smaller brokerages, teams, and MLSs in the industry. This trend is concerning because it could have a wide impact on many people in real estate.
Non-settlement brokers really need to understand what happened in the first lawsuit. It’s crucial to know the legal situation well, expect possible challenges, and get ready for any legal problems that might come up. Being proactive is important for dealing with the changing legal landscape and protecting the interests of brokers who didn’t settle, especially with the increasing risk of legal actions in the real estate industry.
Preparing Agents for the Future
We must get agents ready for the future of the industry, and that’s exactly what we’re coaching all our members at Inner Circle Broker Coaching.
- One key thing is being open and honest with clients about how commissions work and the benefits. This not only builds trust but also ensures that clients have a comprehensive understanding of the value they receive from our services. By being forthright, we aim to establish strong, honest relationships with our clients, fostering a sense of transparency that is foundational to any business.
- In this rapidly evolving market, it’s crucial for agents to undergo coaching and training to navigate changes seamlessly. Indeed, many of our ICBC Members have organized coaching events where they invited competitors, resulting in a great turnout from agents of competing firms. If you’re a broker watching this, make sure to coach and train your agents before your competitors do. It’s the most important step we can take to protect against potential issues in the future.
- Additionally, highlighting positive client experiences is a powerful way to demonstrate the value agents bring to the table. By sharing success stories and testimonials, we not only highlight the expertise and dedication of our agents but also showcase the tangible benefits they can expect when working with our team.
Given the legal scrutiny and market fluctuations, being transparent, receiving coaching, and promoting positive client experiences are even more critical than ever before for the future success of agents and brokers. Grasping the current situation and preparing for upcoming developments enables real estate professionals not only to navigate uncertainties but also to consistently provide excellent services to their clients.
At Inner Circle Broker Coaching, we have a special coaching program to help broker owners achieve real results like more time, more money, better relationships, and guaranteed outcomes. Start your journey today with a free consultation call with our team of experts!
Click here to watch Wayne delve into these crucial issues in the full video.