As the commission landscape changes, Side’s Hilary Saunders writes, it’s time for agents, teams and brokerages to look at the ways this will improve the industry’s reputation.

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In the wake of the National Association of Realtors settlement, which has received preliminary approval by the courts, agents and brokers alike anticipate changes to how agents are compensated. There are also other factors at play, including which agents and brokerages are included in the settlement and how those who are left out will need to move forward. Almost every agent has a different viewpoint as to how to move forward with their business.

One thing has been made crystal clear, though: The general public does not understand how real estate works. In fact, some consumers may benefit from bad agents leaving the industry when and if the new changes take place.  


The consensus, based on recent headlines and conversations with clients, seems to be that the “6 percent commission structure concept is going away,” and that “buyer’s agents aren’t free anymore.”

Commissions have been negotiable, and buyer agents’ fees have never been “free.” If most Americans think the 6 percent commission is mandatory, it’s because the agents they’ve worked with haven’t communicated well.

Communication problems

If most Americans think they’re paying too much in commissions, that’s because the agents they’ve worked with haven’t been providing outstanding service. Too many simply offer the “3 Ps”: post a sign, take pictures and pray. 

That isn’t surprising given that only 49 percent of all licensed agents sold just one home — or none at all — last year, according to the Consumer Federation of America. If you were having surgery, would you trust a surgeon who only does one surgery per year? Why do we expect consumers to take that same risk with their greatest financial asset?

It’s time for the real estate industry to admit that we are where we are because many traditional real estate brokerages and associations have prioritized profit over service.

Consumers will benefit from agents leaving

The more licensed agents there are, the more the associations make in dues. The more low-producing agents there are at a brokerage, the more that brokerage makes in splits. So why raise standards? Supporting fewer, better agents is in direct contrast to how the industry was set up to operate.

It’s not a good look to raise standards because you are forced to — but that’s exactly what’s happening to our industry. The public conversation around the settlement has made it more apparent than ever that we absolutely must make changes. 

The real estate industry has always been plagued reputationally by the agents who got into this to chase a quick buck. We need to weed out those agents — and by increasing the complexity of the transaction, this settlement will do just that.

Many will drop out of the industry altogether if they’re required to get buyer’s agency agreements signed, simply because they’re not skilled enough to justify why someone should work with them. Rather than push back against this trend, we should lean into it. If sub-par, part-time agents drop out of the industry, that’s a good thing.

At the same time, we need to make it easier for extraordinary agents to not only serve more consumers but also to actively train and mentor the next generation.

Brokers will need to get selective

We see that already being set in motion via the continued ascendance of the top-tier, best-in-class agent, whose reputation carries them through all market cycles and via the communities these top agents participate in.

Increasing adoption of the team model has also helped a great deal on this front, allowing team leaders to delegate and scale beyond what they would have been capable of as solo agents while also taking on a player-coach role for newer agents who get to learn via experience. 

But there’s great room for improvement here, too. Most brokerages were simply not built to serve highly productive teams that consistently work on multiple transactions involving multiple team members (in fact, most brokerages fought against the expansion of the team model for years).

Processes and software that work fine for the 49 percent of agents doing one or fewer deals a year can become extremely burdensome and clunky for teams managing dozens of transactions at once. There are a few companies (including Sisu, Follow Up Boss, and Side) that have specifically invested in streamlining workflows for teams, but this will need to continue to be an area of focus for the industry moving forward.

Final thoughts

Lastly, we need to accept that changing the way we operate will impact some companies’ bottom lines. Fewer agents in the industry will mean fewer desk fees paid and fewer subscriptions purchased. But if that means more Americans get to work with excellent agents when buying or selling a house, agents who take the responsibility seriously, that’s what matters most.

This is a critical opportunity for us to regain the public’s trust by proactively raising the bar because we choose to, not because our backs are against the wall. In action, this looks like increased transparency from industry organizations, brokerages and individual agents.

Let’s be honest about how we got here and actually do the work to elevate our industry moving forward — even if that means some agents and companies won’t be able to keep up.

Hilary Saunders is co-founder and chief broker officer at Side. Connect with Hilary on Instagram and Linkedin.

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