Business Innovators Radio - Kristen Conti: Decoding the NAR Settlement and Its Implications for Real Estate Buyers and Sellers Nationwide

Episode Date: August 19, 2024

Kristen Conti Reveals the Inside Scoop on the NAR Lawsuit and How It Will Impact Real EstateIn this episode, Dr. Tamara “Tami” Patzer talks with Kristen Conti, a seasoned real estate broker and owner of Peacock Premier Properties in Englewood, Florida. Kristen has over 31 years of experience navigating the ever-evolving real estate landscape, and she’s here to provide essential insights on the recent National Association of Realtors (NAR) settlement and how it will reshape the industry.Kristen’s wealth of knowledge and deep understanding of the market make her uniquely qualified to guide us through these significant changes. As a broker-owner, she has witnessed the industry adapt to countless shifts, but the recent developments surrounding the NAR lawsuit and the new regulations that took effect on August 17, 2024, are among the most profound the industry has seen in decades.During the interview, Kristen addresses some of the most pressing questions and common myths related to these changes. She delves into the details of the Sitzer/Burnett lawsuit, which led to the $418 million settlement, and discusses the far-reaching ramifications for real estate professionals, buyers, and sellers alike.From the new buyer agency agreements to the removal of commission information from the Multiple Listing Service (MLS), Kristen provides a comprehensive overview of what to expect in this new era of real estate.Whether you’re a real estate professional concerned about the impact on your business or a buyer or seller navigating the evolving landscape, this episode offers the expert guidance you need to approach the future with confidence. Kristen’s insights into the importance of value articulation, the role of the buyer’s agent, and the potential for a 20% attrition in the industry provide a fascinating glimpse into the industry’s future.Listeners who are interested in understanding the real estate market, the implications of the NAR settlement, and strategies for success in this new era will find this episode invaluable.Kristen’s passion for the industry, her commitment to her community, and her ability to translate complex topics into actionable insights make her a must-listen for anyone invested in the future of real estate.To learn more about Kristen Conti and her expertise, visit her website at KristenConti.com or connect with her on social media. You can also reach out to her directly at the Peacock Premier Properties office by calling 941-286-8486 or emailing [e-mail]: https://businessinnovatorsradio.com/kristen-conti-decoding-the-nar-settlement-and-its-implications-for-real-estate-buyers-and-sellers-nationwide

Welcome to Business Innovators Radio, featuring industry influencers and trendsetters, sharing proven strategies to help you build a better life right now. Hi, everyone. This is Dr. Tammy Katzer. And today, we are going to take a deep dive into the world of real estate with Kristen Konki. and she's a broker-owner at Peacock Premier Properties in Englewood, Florida. And she has, let's just say, a wealth of information. And let me just do a little intro before we get started. And then I'm going to really have, I would say, breaking news for all of you listening about the National Association. of realtors lawsuit and its ramifications. So let me just go ahead and do my introduction of Kristen Conti. It's a time of unprecedented change within the real estate industries,

and there's few professionals who are as well equipped to guide us through the evolving landscape as Kristen Conti is, with a wealth of experience and a deep understanding, of the market, Kristen has been at the forefront of real estate for years, helping clients navigate the complexities of buying and selling homes. As a seasoned expert, she's seen the industry adapt to countless shifts, but the recent development surrounding the National Association's Association of Realtors, known as the NAR, and the new regulations set to take effect on August 7th, 2014, they are among some of the most significant that the industry is seen in decades. In this interview, Kristen's going to address some of the most pressing questions and common myths related to these changes.

And our hope is to offer clarity and actionable insights for real estate professionals and buyers and sellers alike. So whether you're concerned about what happens with commissions, the role of a buyer's agent, or how any of these shifts might affect your business. Kristen is here to provide the expert guidance you're going to need to navigate this new era with confidence. So, Kristen, first off, welcome. Thank you, Tammy. It's always good to see you and converse about what's happening in the wild. woolly world of real estate. This is a wild,

woolly world of real estate. And I'm really excited because we've talked a little bit in the past about this NAR settlement, but for our listeners, can you give me an overview of what

the National Association of Realtor settlement is really all about? Yes. I'll try to give you the bullet points because we could spend hours on the lawsuit and I really want to get to the ramifications and how it impacts the business and how we're going to change the way we do business. So there was a lawsuit that began in the state of Missouri. It was called the Sitzer Burnett lawsuit and basically it was a group of lawyers that began a class action suit stating that sellers were feeling like they didn't have the choice of what to pay a buyer's agent.

So this was during the time that the market was increasing at a rapid rate. So perhaps you bought a house in 2019 for $300,000. And in 2021, that same house was now worth $600,000, just giving some round numbers. So obviously the traditional commission rates or the record, commissions have always been negotiable. But for purposes of today, we're going to call them professional fees. But it's always been based on a percentage. So none of us get together in a big boiler room and decide what that's going to be. Each person can choose, each brokerage can choose for themselves based on the services they provide what those fees are going to be.

typically when we go on a listing appointment, we come up with a figure and for purposes of illustration and stay out of trouble with the Department of Justice and others will use bananas for an example rather than using commission rates. So I came to you and you wanted to list your house and we agreed upon you giving me 10 bananas for selling your house. I would suggest to you because of the competitive nature of the business and the fact that me utilizing a multiple listing service and exposing your property to 5,000 agents in my area as opposed to just the buyers I may know. Tammy, if someone else besides me brings a buyer to your home, would you be willing to compensate them five bananas? So the actual agreement was between you and I on the 10 bananas,

but the agreement between myself and the co-broker was five bananas. So in totality, you never paid more than you would have paid me individually. So if I brought the buyer individually, you pay 10%. If some, there I go with the percent, 10 bananas. If the buyer's agent is involved, you also pay 10 bananas. And that pretty much worked for over 100 years and extremely effectively. And if you contrast that with the market, say, for example, like Europe.

And it was interesting because I went to Europe in 2019 and toured in England and Ireland meeting with some realtor friends of mine there. And it was very interesting because they don't have an MLS. They don't have a system where they share commissions. You choose a realtor and that realtor sells your property and that's basically how it goes. There's not, you know, you don't know what everybody has. It's people all have individual listings. And I've also seen that in other markets, like, for example, South America.

And I would say it was probably about 20, more than 20 years ago now, I went with a group of realtors out of Palm Beach, and we taught the South Americans about how to use a multiple listing system and the benefits of using a multiple listing system. And they embraced that, and they were amazed at how much more they could sell. and the better prices that they could achieve for the sellers because it created a much more competitive market. So fast forward to this lawsuit. Now, you know, the sellers are making $300,000 in two years. But in their minds, they're paying higher fees because the property has appreciated.

Well, yeah, if you're going to make $300,000, why do you have a problem with the realtors getting paid? but ultimately they did have a problem stating that they were not given the choice, which I'm really not sure how anyone could claim that because it's right in the listing agreement. So if you sign the listing agreement, you're agreeing. And every time I go on a listing appointment, I have a conversation with the seller and say, this is how the commission is going to be split up. But for whatever reason, they were able to convince a jury. And interestingly enough, from what I've heard about this, jury. The majority of the jury were not homeowners and had not even had a home buying experience. So I'm not sure how they were the best choice of jurors, but that's the way it went. And the judge supposedly was very plaintiff-oriented, you know, however, that went as well. So ultimately, the lawsuit was against the National Association of Realtors and several big brokerages, like Reelage, who's the parent

company to Cobble Banker, century 21, better homes and gardens. That's the parent to all of those. Then there was Calla Williams. There was Remax. So several of the big boys got sued as well. And suddenly this little case in Missouri that nobody was paying much attention to became a nationwide phenomenon. And it started to create havoc around the country. So they were went to court and ultimately the large brokerages decided that settlement was better for them than continuing on in this fight that was going to be difficult to win, even though they didn't believe they had done anything wrong. It's one of those things like all of us feel if we get called into court. Sometimes the best decision is to just end it, you know, settle it even if you

haven't done anything wrong because you lose so much money getting tied up in the legalities of things and ultimately spend a lot more on attorneys and time out of work and kind of work that way for the large brokerages. They didn't want it to affect their agents. So they went ahead and settled. Well, NAR first said, we are absolutely not going to settle. We're going to fight this to the end of the earth because we totally disagree with the fact that there's been any kind of price fixing going on, which was basically the claim that we were

violating the Sherman Antitrust Act, which basically precludes us from getting together as a group and deciding that we're going to set prices. You know, you're not allowed to do that, which we weren't doing, but that's what we were accused of doing. So ultimately, very shortly thereafter, which was kind of shocking to all of us in the business, because we've been paying dues, you know, for years and years to our association. Our association controls the MLS. That's a part, an arm of our dues is. MLS fees. And it's how we've practiced. I've been 31 years.

It's all I've ever known is this organization. So long story short, they came out and said we've decided to settle, which was shocking to everyone because we thought we were going to be in this long fight. And frankly, I thought I was going to get past retirement age before I'm to worry about it. So I was like, okay, they'll be tied up until I'm long gone. but that didn't happen. It happened very rapidly, and they settled for $418 million. That's to be paid over four years. And we just happened to be at the crosshairs of the Department of Justice. They've been kind of looking at the real estate business for a long time and trying to figure out how to make changes in it that they think will be better for the buying and selling public.

I've yet to see if I believe that's what's going to happen out of all this, but that's been the goal. So we have now been forced to completely change the way we do business, and it happened rapid fire. It was earlier in the year that the lawsuit they settled and now starting tomorrow, everything that we've always known is going to change, especially here in Florida. There have been some states, there are 17 states in the country that have used buyer agency agreements with regularity. They just happen to practice that way, and it has worked for them. But Florida in general has not been a state where we have done that. We try to build a rapport with the buyer first, make sure they're comfortable with us, and then, you know, enter into some kind of an agreement.

But we like to kind of let them decide if we're a good fit and also for us to decide if it's good fit for us before we embark on a contractual arrangement. So that's the easiest way I can explain it, but that's what leads us into tomorrow and the changes that are going to take place. So big lawsuit, it got settled, somebody gets $418 million, and all of the realtors in the country and buyers and sellers are now affected. What I noticed in the paperwork that you sent me prior to our interview today was it looks to me like what this accomplished is it turns it into a lot more paperwork. And it also means that buyers and sellers will probably need to be educated a lot more than they were in the past because they can't just call up any real estate

person and say, hey, show me this property. There actually is more paperwork involved. So can you, I wanted to ask you more about being a member of the NAR and what are the specific changes that are going to be happening for you in the way that you do business. You explained about the structure of the professional fees are different now. So I guess let's start with the buyer side of it and then we can go to the seller side. but let's start with our buyers because a lot of times, like you mentioned, that the jurors in that case, most of them had never been home owners or home buyers. So they might have a totally different perspective on all of this than someone who's actually gone through the process.

So tell me more about how have things changed for buyers? What will happen? Okay. And actually what I will say is I think some of these changes are going to be very positive. I think it's going to feel very different because it's kind of upended the way we've done things. And as human beings, most people are adverse to change. So the idea of doing it differently or the idea that a buyer has in their minds that, oh, now I'm paying the commission, I'm going to have to pay much more than I would have had to pay before is really, not how it's going to work. And how I can exemplify this, say for example in 2021, which was, you know, as COVID was ending,

and we were experiencing here in Florida what's called a V-shaped recovery. So in other words, it just shot up, you know, from being very, very bottomed out to all of a sudden Florida was where everyone wanted to be

because we were considered to be an open state. So, The other states were closing down for business. A lot of everything was closed down that they wanted to go and do and see. People came to Florida. It was the land of sun and fun. Restaurants are open. Businesses are open.

Life is going on as normal. So as these home-based businesses or people that were allowed to work remotely came here, our market went crazy. Sellers got greedy. That's just the fact of the matter. You know, everybody's going to grab what they can when the grabin's good. So people sold their homes up north, you know, Connecticut, New York, Chicago, California, all across the country in these higher markets, they sold their properties.

They came here to Florida with bootles of cash and basically said, we don't want an appraisal. We don't want an inspection. We'll give you 100,000 more than you're asking for your house. we just want the house. So it became this frenzy of buyers buying. So what happened was now the sellers whose homes once again were elevated were now feeling like they were paying the commission to the buyer's agents. When the buyer's agents were really represented, they were trying to negotiate against them.

Why are we paying the buyers agents when in fact they're represented by someone else who was trying to get us to take terms other than the terms we're looking for. So it became this whole idea of, wow, we're paying all the commission. But ultimately, without a buyer bringing money to the table, there's no commission to pay. So basically, the fee is paid out of the transaction. With no buyer, there's no money. They're bringing the pile of money to the table that allows the fees to be paid to the professionals in the deal. So it got, you know, that's where the complexity of all this becomes.

So one of the other things that buyers started doing besides waiving appraisals and waiving inspections was paying title insurance. But typically for all the years that I've worked in the business, most of the time sellers paid title insurance. But this became another bargaining chip, you know, for buyers to say, I'll pay the title too to reduce the cost to the seller and make their offer more attractive. So basically now what it's coming to is, and this is where I think it's positive, there'll be a lot more transparency in terms of fees, there'll be a lot less real tours practicing who don't know what they're doing. So I will say as a person in the industry that believes wholeheartedly in education and experience and all of those credentials that we go after

those of us that are very serious about the business, there's a reason we have the alphabet behind our name. It's because we're constantly educating ourselves on negotiation, on navigating repairs, environmental issues, insurance issues, tax issues, you name it, we're studying to learn more about it. Well, a lot of people jumped into the business to make a quick buck when things were fast-paced, they grabbed a license, jumped in. Many of them had no idea what they were doing. And for probably those two years, I felt like I did two sides of the transaction most of the time and got paid for one.

That was just the way it worked. So now, in order for people to survive, they're really going to have to be able to articulate their value. So when a buyer comes in to meet with me, it's going to look like a buyer consultation. So it used to look like the buyer called, I'm out in front of this house at 1, 2, 3, ABC Street. How soon can you get here to show it to me? Now, as a professional myself, I never was one that was going to run out to show someone a home that they were parked in front of.

First of all, for safety issues. Second of all, because I need to know what you're qualified for before I bring you through someone's house. So my philosophy was always, I'll show one. but after that we're going to go back to the office or we're going to go to Starbucks and have a cup of coffee and we're going to talk about your wants and needs. And I have learned over the years that if people can't spend an hour with me to articulate those things,

then they're probably going to call every realtor in town and see houses one by one, or they're just going to see a few houses because the weather's not good for the beach today, and I'm never going to hear from them again. But there are people, realtors out there that will go do it in the hopes that a blind squirrel is going to find a nut. Now they're going to have to sign an agreement that says,

you're showing me, now there's various varying degrees of agreements, as I don't know if you had time to read through them all, because I know I sent you a lot of stuff last night. But the first one that the buyer will get is what's called a property pre-toring agreement. And basically, there's no compensation due at that time. However, we are letting you know that if in fact we go into contract, that this is what I work for. So, for example, I'm going to, I will charge three bananas to work for you, Tammy, if you buy a house.

A lot of sellers are still going to offer those three bananas just like they always did to buyers' agents. Because they realize without buyer agents, they're going to reduce the number of showings on their homes. tremendously because a lot of people want to work with someone that's representing their interests. So we're going to go under contract, but what it's going to say is if I can't get the three bananas from the seller or through some negotiating powers that I have, then you are prepared to pay me my three bananas are closing. That's ultimately what it's going to look like. Now, there's a lot of ways, especially people that are good negotiators, can structure this. So, So to save you money in other areas, you know, maybe getting the seller to pay the title insurance,

maybe getting the seller to pay some closing cost credits. You know, there are some loans where I can get the seller to pay 6% of FHA, for example, allows 6% of closing costs to be paid by the seller. So if I get the seller to pay your 6% in closing costs and you pay me free bananas, you're still up by, you know, three bananas. You know what I'm saying? So a skilled person is going to be able to figure out how this is going to work. And we are still going to be able to do seller concessions of varying kinds.

And the mortgage industry is also scurrying to find ways that these fees could be wrapped into the mortgage. So when you look at a professional service fee being able to wrap into a 30-year mortgage at 6%, you know, interest, you're looking at a very tiny number, you know, to have someone represent you. So there's going to be lots of, lots of ways it can be done. But technically speaking, we have to disclose to you that you're responsible for it. And that's going to have to be okay. So the bottom line in what you just said is fires basically are signing that no matter what, they're going, they know, they know, that if you're not compensated in another way and it all comes down to it, they're responsible for paying you that 3% or three bananas.

Because it's negotiable. And I think that is important to remind people that real estate has always been a negotiable thing between the parties involved because some companies have. do a totally different professional fee structure than other real estate professional. So it's always been a negotiable thing. And like I said, from what I could tell, it's a lot more paperwork and signatures involved than there were before. So you've talked about it, but I've been listening.

So the, when you're working with a buyer, I'm still talking about buyers now, how many hours would you say that you spend in number one negotiations making sure that, you know, for example condos, there's a lot of issues that you have to, know now about what's going on in the neighborhood. You know, what about was there, did the people pull permits? I mean, all of those things that need to be known. How many hours would you say that a buyer's agent works on behalf of a buyer? and what is the difference between if you were to go directly to the listing agent, would they so protect you as the buyer? That is such an awesome question because it's one I've been answering a lot over the course of the past couple of weeks,

not only for my own agents in terms of helping them to articulate value, but just to lots of consumers that have had a lot of questions. and it's an awesome question. So the first thing I'm going to say is the amount of hours that an agent is going to spend per customer is directly tied to the amount of experience they have. So I'm definitely going to be touting that people choose real estate agents with a lot of experience. And that's not to dissuade people from using a younger agent that's new and trying to find their way. you know, if you have the patience for that and you want to help support that person, that's great. But ultimately, when you're newer, you're going to spend a lot more time because you haven't

accumulated any intellectual property yet. You know, like over 31 years, there's not a whole lot I haven't studied or done. So therefore, I know about it. I know about the neighborhoods. I know about future construction coming into an area. I know about rezoning. I know about environmental issues or spills. I know about coastal construction line and what's on either side of that. I know flood zones. I know, you know, how to take title what the best way to do that is based on your situation, based on how much money you have or don't have. There's just so many, so many things that you accumulate through experience over time. There's probably not a business I can think more that needs experience more than ours. It just makes such a huge

difference. But a funny thing is I was on a webinar yesterday with a group nationwide group of realtors and the conversation came up. They had done a buyer survey and the buyers were asked, how many hours do you think your real estate agent spends on, you know, taking you through the home buying process. And the perception of the buyers and sellers was 10 to 15 hours. That's what they believed was put into the process of them buying a home. When the reality was it was 80 to 100 hours that an agent actually spends because there's so much behind the scenes activity that's going on that the buyers don't see. And for years as agents, we thought the less they need to know, the better because now they can go to work, they can raise their families, and we're behind the scenes,

kind of like the Wizard of Oz. We're behind the screen and we're going as fast as we can, but we're making it look like everything is easy because we want the buyers to have a nice experience. Well, now what's going to have to happen is we're going to have to over communicate to the point that they understand really how much we are doing in the background and understand that some people feel the need if they're going to be paying you three bananas. They want to see that you're earning that, and maybe they didn't understand that until now. They don't understand all the,

they didn't know what they didn't know. So we're going to have to get much better at value articulation and explaining why they will be better off with an agent than going on their own. And I have had several people ask me that question, because I'm a strong listing agent, so I'm not really worried that I'm not going to have business, but I like to work with buyers. It's very satisfying to work with buyers and find them their dream and help them negotiate a great deal. Because the buyers end up staying here in the community,

a lot of times when I work with sellers, they're leaving and going somewhere else. The buyers are the ones that are going to refer me year after year. So I like to work with buyers and keep kind of an equal number of both types of transactions. So as a listing agent, and I am a listing agent and I do a lot of two-sided deals. But at the point that that happens, I have to tell both parties, at this point, I'm basically just a conduit of information because I can't really represent both of you at the same time. It doesn't make sense. And I don't care how honest, integris, all those things you are, you're going to probably like one a little bit more than the other or think one is a little bit more reasonable than the other or whatever it might be,

we're human beings. So I have to take that hat off completely and look straight at the facts and say, this is what the seller said, this is what the buyer said. It can't be with my, my interpretation, well, I think this or I think that it's a strictly transaction brokerage role, which basically Florida is considered a transaction broker state. But when you have two parties, years ago, we would have to disclose that and call it disclosure to dual agency. And I'm not saying there are not cases where it's good to go directly to the listing agent. It could be. But I would say in 90% of the cases, the buyer's agent is going to be working to meet your best interest,

the terms and conditions that are most favorable to you as a buyer. And the seller's agent, their role or listing agent, is to get the highest and best price in the shortest period of time with as few conditions as possible. So they're kind of diametrically opposed. The two things you try to accomplish are different. So yes, you could go to the listing agent, but then if you're looking at homes, the average homebuyer looks at 40 to 50 homes before they buy. I mean, you're going to have to have 40 to 50 different conversations with different agents,

you know, which to me, that would be enough to have me call an agent. you're going to have to call them and get them to let you into each home. And then you're going to have to negotiate through them who are representing the seller. How is that a benefit to you as the buyer? Where if you hire a buyer's agent, they're going to weed out all that stuff for you. They're going to find out all the answers to the questions. And then they're going to take you to the properties that most best meet your needs. And at that point, negotiate on your behalf.

The problem is buyers look at realtors as a giant, like I have a giant key ring I'm walking around with, and I'm just waiting for you to call so I can go open a door. You know, that's absolutely a tiny, tiny part of what I do is opening the door and letting you in. But from a buyer's perspective, that's one of the most important, in the survey to buyers, that's one of the most important things that they want. somebody to go open the door and show it to me ASAP, you know. And a lot of times I'm working with buyers and they say, I want a four-bedroom, three-bath pool home on a double lot.

I don't want to see my, you know, they tell me all the things they want. And then they call me and they want to see a two-bedroom, two-bath, you know, condo. And I'm like, but wait a minute, we're looking at four-bedroom, three-bath pool homes. what I've learned is people don't really know what they're looking for until they're out there looking for it. So my philosophy is, let me take you to five properties based on what I've heard you say. And at the end of those five properties, I'm going to have a real good idea of what you want because I've been doing this for 31 years. And typically, I don't have to show more than 10 houses to put somebody under contract. So the amount of time I spend on each deal is going to be less because my experience level is higher.

but overall, you know, it's a lot of time. It's a lot of sleepless nights. It's a lot of, you know, talking to people at nine or ten at night because they're on the ledge and they're frustrated about their mortgage process. And they're like, I don't even want to do this anymore because they're asking me for so much paper or I'm afraid the seller's not going to do this or I'm afraid. You know, and we become therapists. We become marriage counselors. We become, you know, advisors. you know, we refer to different fields, repairs, hairdresser repairs, doctor repairs.

I mean, we're kind of a one-stop shop for our customers, and we want to be. You know, that's what we want to deliver in our office as concierge service. We want those relationships. But there is a lot to it, and now we're going to have to put our money where our mouth is and make sure we deliver the value. I can honestly say I don't have any buyers that I've worked with that I think would say I didn't earn every penny. But until they know what the process looks like, there's like 197 steps to a transaction. But a buyer doesn't see, maybe a buyer sees 10 of those, you know, so they have no idea what it took to get from point A to point B.

So the other question to kind of the other part of my answer to your question is someone asked me and a very good question on a Facebook post yesterday, which they were being very respectful. They just said, I understand completely what you're saying, but why wouldn't I just go to the listing agent and then have my attorney review the paperwork? And I said, you absolutely can do that. But the attorney is not going to look at the house with you. the attorney is not going to attend your inspection. The attorney is not going to negotiate with the seller for repairs

that may be required to meet your lender guidelines. They're not going to tell you anything about the neighborhood because nine times out of ten, they haven't been there. You know what I mean? So yes, your attorney can do that, but all your attorney is going to do is write the contract in accordance with or either review it. It's already written.

They're going to review it and say, yes, it's written correctly. But they have no idea, are you paying too much? they're not going to do a comparative market analysis for you and say, hey, I think you're overpaying a little bit here, or I think your offer should be a little higher because you're under, you know, you're undershooting it. You're probably going to shoot yourself in the foot and not get it. None of that happens with an attorney and they're going to charge you 250 to 300 an hour. So, you know, do you want to pay it that way or do you want to pay it within the confines of the transaction where a good negotiator can probably negotiate their fees so you don't even feel it because you're paying it somewhere else? So that's an awesome question. Well, that makes a lot of sense. And a lot of times people, they think an attorney is a miracle worker. But I think you just really explained it that really all the attorney is doing is looking at it from a legal perspective and making sure that it complies with whatever the laws are in that state or wherever. So, I mean, you talk to, I mean, open my eyes.

I think it is interesting because nobody ever knows, no matter what your business is, they never understand what it really takes behind the scenes to make anything happen because, you know, it just happens. And so you, and then they're like, oh, that's great. But I'm glad that you explained about that because, I mean, even though I've been in real estate and have a license, I didn't pursue it because of all the work. I'd rather be doing something else. I did rentals.

And there was a lot of work involved in it. And sometimes it was not enjoyable, you know, like repairs, like in people not paying the rent and things like that. But back to this. So you talked a lot about real estate professionals. having experience. And do you think that there will be any type of mass exodus of real real estate professionals, or is that just a big myth?

I don't think that will be a mass exodus, but I do think we could see a 20% attrition. That's kind of what my thoughts are and what the thoughts of a lot of the groups that I attend, which are a lot of nationwide groups that I've been a part of for many, many years. I think it'll be 20, perhaps even 30. And I think that's based on a number of reasons. I think this change will be one of them because you're going to have to be a different level of agent to articulate your value and to get what you deserve to be paid.

You're going to have to be confident. You're going to have to be qualified. You're going to have to be competent. you're going to have to have a lot of skills that a lot of agents never had to acquire because, again, it was like shooting fish in a barrel. You just had to be in the right place at the right time, and you could kind of fumble your way through because the buyer wanted the property so bad, it didn't really matter.

But once you get back to more of a balanced market, where we are right now, by the way, we are more in a buyer's market than we are at a seller's market. If you look around, a lot of things are on the market. We have about a six-month supply, which is a balanced market. Everywhere we look, we see price reductions, the days on market that it's taking to sell are a lot longer. So we're kind of in this, what I call a perfect storm. I haven't seen a perfect storm since the downturn of 2008. That was another perfect storm.

But this is a perfect storm because we have a very contentious election coming up. We have interest rates that have been high. We've had insurance taxes, all of these things. have been high because I'm speaking about Florida because of Hurricane Ian. Now we just had a smaller, you know, tropical storm Debbie, but did substantial damage in Sarasota, you know, tremendous flooding in areas that weren't even flood zones. So there's 25 to 30 percent of the homeowners in Florida right now that do not have insurance at all because they can't afford it after what happened. That's a huge number.

and my husband and I do a lot of work for banks. And right now we've been doing lots of what they call market reports and condition reports. So we'll get assignments in the morning and he runs everywhere from Punta Gorda to Sarasota, taking pictures, exterior pictures and giving an analysis of what's happening in the neighborhood. And as we look through the county records, we're noticing that a lot of these are reverse mortgage products. So it was an older couple that took a reverse mortgage, maybe lost the spouse. Now they don't have the spousal income and suddenly all the expenses have gone up dramatically. And without the spouse, they can't pay for it anymore.

So they're looking at potentially having to foreclose on these people that did reverse mortgages. So there's a lot of stuff brewing behind the scenes. COVID also put a stay on foreclosures. So if people were behind, they were given a lot of grace. They were given a lot of chance to do loan modifications or forbearance agreements. All of those are coming due. So there's lots of things bubbling under the surface that have caused the market to be kind of weird this year. It's been eerily quiet in many places.

But we're expecting that after the election, whichever way that goes, people just kind of simmer down and say, okay, here we go for four more years, whatever it is, it's out of their minds again. And the market will pick back up because interest rates now are dropping a little, which is also very common in an election because the current administration wants to start lowering them to stay in. That's just how it works. Doesn't matter what side of the aisle you're on. So it should be very interesting to see how it all pans out.

but I think you will see quite a bit of attrition in our business. I would say at least 20%. I hope it isn't more than that. But in some ways, I'm glad it's time to eliminate people that are just in it for the money and a quick buck and not in it to make a business and to care of people and do the right thing and build communities. Well, that is one thing about you. you're definitely someone who's very community oriented and I know you've done a lot and especially

after Hurricane Ian, I mean, you were out there checking on people and delivering food and just everything under the sun. I remembered all of the work that you did just to help the community just to move forward. Thank you for that. So thank you for your service. Thank you. My pleasure. So I wanted to ask, I'll switch gears a little bit since you mentioned listing. Obviously, when you're listing a home, that means you're working with the seller. So will these new rules change the way that you list the house? That's another excellent question.

So yes, I would say to some degree, I've always tried to keep my fees extremely. extremely standardized because I never wanted someone to so many people are in my sphere of influence that know one another. I never wanted someone to be sitting down at a lock and key and saying, oh yeah, she charged me six bananas, but she only charged me five bananas or four bananas or whatever it might have been. I always kept my fees straight across the board. I didn't care who the person was because my integrity, you know, I never had to worry. Is somebody going to feel like they got a better deal or somebody else feel like they got taken advantage of?

So I have always been extremely strict about my fee structure. Now I'm still going to have standards, but the standard for me, I'm going to get paid what I normally would have gotten paid always. So my three bananas are going to be my three bananas. But the question is going to be what the seller is, willing to compensate a buyer's agent because they still have the right to do so. They still have the right, if they choose to, and many are choosing to because they get it,

that without it, they're going to have a longer wait time to sell their house. But maybe the seller is going to say, I only want to pay, like my banks, for example, I'm going to use my banks for an example. They only pay one and a half bananas. that's what the banks are comfortable paying on like auction properties or foreclosure properties. And a lot of buyers' agents accept that as a payment because they say the buyer's getting a good deal. That's all the bank is willing to pay. So this is it.

If I want to represent this buyer, this is what I have to do. Now they could go in and say, okay, the bank is only paying one and a half bananas. so you have to give me another one and a half bananas. That could be something that is done because it's a hard deal when you're working with foreclosures. So you may need to get that payment in a different way. But anyway, in terms of sellers. So so far, I've had three listing conversations since this all started.

So far, all of my sellers are choosing to pay a buyer's agent fee. The big thing that's changed, which we haven't gotten to yet, but I'm going to get to it now because it's critical, is all of the commissions have been removed from the multiple listing. That's one of the biggest things. And that's the part that's giving us all a lot of angst because we knew exactly what we were going to get paid. It was in black and white. And the agreement was between the listing agent and the buyer's broker. So the listing broker and the buyer's broker because ultimately the broker, because ultimately the broker, gets paid. Not the agent. It's broker to broker. And then the agent gets their piece. So the broker is

the hand and the agent are the fingers. You know, and that's what a lot of people don't understand either. They think, oh, you know, they're getting a check for $10,000. Okay, the check for $10,000 came into the brokerage. But maybe now they're at a 50-50 split and they get $5,000 go straight to the brokerage house. Then they have to pay their 33% income taxes. Their MLS dues. their NAR dues, their errors in emissions insurance. So by the time you start pulling all those dollars out, the net may be 2,000 out of 10,000 is what actually goes to their pockets. You know, there's a lot of misconception about what we actually get paid.

But anyway, all of those fields have been totally removed from our multiple listing system, which is called Stellar here in this area. But there is a new field for seller concession. So that field can be used to do a lot of different things, but it cannot say a percentage. It has to be something different than a percentage. It has to just say the seller's open to concessions. So my husband and I right now is the business owners are trying to determine the best policies for our office. So for example, on the showing agreement I sent you and on the buyer brokerage agreements,

the buyers have the right to check off. They don't want to see any properties that the seller is not paying our fee. So on the surface, that might sound great, you know, that the sellers are saying, no, the buyers are saying, no, I can't afford to pay you. So don't even show me that house. Well, the first thing that came into my mind about that was, is that really fair? They don't get to see the house because I'm not going to get paid? Is that the broker I want to be? Not necessarily.

I would like to show every home because even though a seller says they don't want to pay, if I write it into the contract or I say the buyer's paying my commission, but you're going to pay closing costs, isn't that taking care of it? Isn't there a way I can be creative and get them what they want instead of having them have to eliminate homes that are important to them? And I think that's a problem with these documents is like, why do we want to do that? Isn't that like steering people away from certain homes? And steering is something we cannot do. So it's like, you know, so I'm trying to figure out if I want to just list my

properties and say, seller will consider any and all offers. Bring them to us, you know, inclusive of your buyer agent fee, and let us work it out. And then if the, if the seller comes back and he's just one of those people that doesn't want to pay a fee because they're just hard-nosed for some reason. They don't want realtors to get paid. I don't know what the reason for that would be, but there are people like that. No, I'm just not paying you. Okay, well, here's the offer. It's what she said you wanted.

It's inclusive of, you know, this, this, and this. So do you really not want to take it just because you don't want to pay me? I'll tell you, nine out of ten sellers are going to take the deal. It's just a matter of they don't want to be committed to it. just like nine out of ten sellers now, not two years ago, would make a repair. They're going to say I'm going to sell my house as is. You can say anything you want. But the terms, you know, our fee is just another term.

You know, it's how many, you know, when do you want to close? What are you willing to fix? You know, they're all just terms. We're just negotiating another term in the contract. So I think so far, my husband and I have to talk about a little bit more and share it with the agents, but I think we're leaning toward, yes, we will, if the seller says right off the bat, I'm willing to pay a fee, you know, great. But we're going to encourage everyone to show our properties and bring us any and all offers and let the seller decide. If the seller pushes back and

say, I won't bend and I won't pay, then at that point, the buyer can say, I'm either going to pay you or I'm out onto the next one. But it becomes, it's a lot more about the buyers and sellers having the, making the decisions. We're not making decisions based on our fees. You know, we're making decisions based on what our customers want to do. And that's what we're supposed to be doing. Does that make sense? Yeah. Well, the more that you explain it, the more, I guess I can see some of the logic behind the idea. Because if the lawsuit was about we didn't feel like we had choices. Now everything is negotiated.

So it's like, well, here are your choices. Yes, no, yes, no. So it just sounds like there's a lot more room for negotiation. And it sounds like the answer, like the fact that they took away the ability for you to know about how would you get paid in the MLS listings, it makes it, if you say, will accept any or all,

or look at, not accept, look at any in all offers, that just leaves that open door to that negotiation. And again, it sounds like buyers and sellers have to be educated. And in my mind, I'm seeing these webinars and, live events of get educated about, you know,

or if you're going to sell your house, you need to come to this education event. Or if you're going to buy a house, you need to come to this education event because it just, there's just so much involved. So I agree with you when you say that there are positives about this. And I can see where they would see it as being much more transparent but the paperwork, a lot more paperwork.

So it's like, I guess those are your tradeoffs for, you know, like they say, be careful what you wish for. So, yes, you are going to, it appears that you'll have more negotiating choices, but it just means you're going to have more paperwork involved. And I think a lot more people, maybe they will. will appreciate, you know, this is Tammy Dreamy, maybe they will appreciate all of the hard work that a realtor and real estate professional does do behind the scenes. Because I think that, again, I go back to any profession, people do not know what they don't know. You said that.

And they don't. They don't have any idea. They just know, hey, I want, I want, I want, want to buy a house and I want it to be like this. And then like you said, then all of a sudden they're telling you, I want to live out in the country, but then they're showing you a condo. Oh, it's a totally different lifestyle. Right. Right. So we've covered a lot of area.

Is there anything that you'd like to expand on or anything I missed that is really important that you'd like to share? I think the one thing that comes to mind, and this is something that I spend a lot of time training my agents about. And we are not mortgage brokers or tax accountants, CPAs or attorneys, but we have resources to provide. I know exactly what a buyer needs based on my first meeting with them. So if there's one thing I want to say to people, it's don't be afraid to spend. an hour or two with your real tour, sit down, see if there's a good fit, see if you feel like your needs are going to be served, and see the value that they can bring to the table.

You know, there are some people that are just do it yourselfers, and that's fine. You know what I mean? Like, you want to do it yourself, go for it. But I have seen so many people do that and then come back to me and say, oh my God, you know, I didn't know the questions to ask. And now I have to replumb the whole house and the pipes underneath the ground and the septic system and it's going to cost me $40,000. These are examples that happen all the time. So we know what to look for and more importantly, we're very knowledgeable about finance in our office. So I don't have to what I call abdicate my responsibility to the buyer over to the mortgage broker.

Lots of realtors hand their deals over to the mortgage broker to pre-approve the buyer, but also what a lot of people don't understand is not only does the buyer have to be pre-approved, but the property has to be pre-approved. So one of the things I get an awful lot of is a first-time home buyer or someone with very low down payment money or a police officer or a firefighter or a teacher that have these 100% programs. And they come to me and say, you know, I have this 100% financing product and they want to buy a closure and the property is falling apart. And they say, but it's okay because I know how to do all the work. Well, unfortunately, the work has to be done before you can close. And the bank or the person is not

going to let you go in the house and fix it, nor would I want you to go fix it before you own it? So it's like you have to know how to gear people to the right properties that are going to meet their needs and there's all kinds of qualifications when you're borrowing at 100% you have to remember that the bank is taking 100% risk you have zero skin in the game so if you bring zero skin to the game they have to know that that property is in pretty good shape and that you as a borrower have a very solid career which is why it works for police and teachers you know those even doctors a lot of my doctors use 100% products because they're not very good at managing their money, but they're great at making it.

And so the banks will take a risk with a doctor because they're like, if this guy's a doctor, he has the capacity to earn money. So we're not worried that he can't make his monthly payment. But maybe he doesn't have a lot of money to put down because he just bought an office building or he just, you know, whatever. So it's so important for your realtor to understand who you are, what's important to you what you can do versus what you want to do because sometimes they're very

different and a lot of times realtors don't want to be honest with people because they want to give them what they want to give them but then they get into the deal and all of a sudden the bank starts throwing up all these red flags and they're disappointed you know i would rather turn you down than let you down so i'm going to be 100% straightforward with you and say okay this is where you are I'm not going to try to upsell you something you can't afford. I'm not going to put you in a property and tell you to waive the appraisal and waive the inspection, because I don't think that's a good idea. And even in the height when that was happening,

I actually had a form in my office that was what's called a notice of adverse consequences. And I basically had them sign it if they waived their inspection and waive their appraisal, it's on you because I'm not telling you to do that. I understand why you want to do it, Mr. Buyer, because you want to win the bid. I understand that. But I'm telling you, this is a short period of time. And in two years, you're going to be holding the bag on a house that you overpaid for. And I don't want you to come back and say, why didn't you tell me?

Because I am telling it. And I'm seeing it play out already. I'm getting not my buyers, but a lot of people are calling me that bought in 21 and 22. Now they want to sell and they can't get back their money. And that's why we've had this funny market. of just kind of sitting because the sellers haven't been willing to come down and the buyers are not willing to pay the prices anymore. So it's just super important that, you know, you understand this and I think it's going to create a lot more loyalty. I think there's going to be a lot less

wasted time for agents that they're running around hoping somebody's going to stick with them and make a deal. And you as a buyer are going to be able to choose, who is the best of, best person to represent me in the most important transaction of my life, which is what a home is for almost everyone that lives in the United States, it's the biggest transaction you're ever going to do. So is it worth it to pay a professional to be a part of it? Or do you want to go do it on your own to say you did it on your own and end up potentially losing thousands and thousands of dollars? You know, that's your call. Some people are qualified to do it themselves. I was telling a buyer, Yesterday, when I go to another state to look for property for my husband and I, if we want to

invest somewhere different, I use a real tour. Not because I don't know a lot about real estate, but I don't know a lot about it over there. I want them to tell me the things I want to know, the things that I may not know about the area, what's happening, you know, what's coming, where do I go on a Friday night and have a good time with my husband? You know, where's the place to walk my dogs? You know, this is the kind of stuff. if realtors do that nobody else can do, but realtors, you know. So that would be my ending statement is just look at it as a positive and, you know, interview people, get comfortable and know that there's lots of creative ways to work with these bananas that don't mean, and it doesn't mean

you're going to pay more. It just means we have to be more creative about our approach. Well, thank you, Kristen. And I think you're absolutely right. it opens the door to more transparency and more negotiations on both sides so that in the end, everybody, you should be able to create that win, win, win situation that everybody's always looking for when they're doing these. That's what I love, the win, win, win. transactions. So Kristen, give us, again, the name of your company, a good telephone number, and where can people write to get more information or where can they find more information? Sure. It's Kristen Conti. My husband is Dave Conti. It's Peacock Premier Properties. We have an office

at the corner of Dearborn and 776, but we're not always in it. We're out and about a lot. So if people want to meet in person, just call us at 941-286-846-8486. The best email is Kristen at Kristenconti.com. But I'll tell you, if you put me in a Google search, I'm going to see hundreds of things because I'm active and I'm out there in the news. And I have great people I work with that help me with my promotions and my marketing. And, you know, so I'm easy to find. Just type in Kristen Conti.

I'll be super easy to find. Well, great. So Kristen Kunti, thank you so much, everyone. We have just been talking about the National Association of Realtors' settlement and how it affects buyers and sellers. And as I said, Kristen Konti, with her 31 years of experience, is the person to go to to get answers about it and especially if you are looking for property in southwest Florida. So contact Kristen.

Again, thank you so much. Thank you, Tammy. It's always a pleasure and I always enjoy talking to you about real estate because I know you have a background too and it makes it easy. Well, it's fun because it's always so interesting to me at how everything is really evolved been changed with real estate across the United States. So everyone, this is Dr. Tammy Patser. Go make it a beautiful day.

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