Latest / Dishin' Dirt with Gary Pickren / NextHome CEO James Dwiggins: Broker-to-Broker Comp Has to Die — Here's What Comes Next (Part 2)

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NextHome CEO James Dwiggins: Broker-to-Broker Comp Has to Die — Here's What Comes Next (Part 2) · Dishin' Dirt with Gary Pickren

• 0:01
  SPEAKER_00: This is Dish and Dirt with Gary Pickering, South Carolina's only podcast dedicated to the real estate agent craft.
• 0:09
  SPEAKER_00: And now the host of Dish and Dirt, Gary Pickering.
• 0:13
  SPEAKER_01: And Greens, and welcome back, everyone, to another episode of Dish and Dirt.
• 0:17
  SPEAKER_01: I'm your often opinionated but rarely wrong host, Gary Pickering, coming to you from the friendly confines of Blair Keddo Pickering Castellan in downtown Columbia, South Carolina, this, the second week of February 2025.
• 0:29
  SPEAKER_01: Last week was one of my favorite shows of all time.
• 0:31
  SPEAKER_01: We had James Dwiggins from Next Home Realty.
• 0:35
  SPEAKER_01: He is the CEO of the company, and he spent an hour with me talking about some of the biggest topics and biggest issues in real estate at this moment.
• 0:45
  SPEAKER_01: Last week we spent a lot of time talking about clear cooperation.
• 0:49
  SPEAKER_01: This week we're going to get into NAR.
• 0:50
  SPEAKER_01: What's the status of NAR?
• 0:52
  SPEAKER_01: Why do we need it?
• 0:53
  SPEAKER_01: Why do we not need it?
• 0:54
  SPEAKER_01: I think we do need it.
• 0:55
  SPEAKER_01: He does too.
• 0:55
  SPEAKER_01: We're going to talk about broker-to-broker compensation, all different types of threats that are going to impact you and how you do your business in 2025.
• 1:04
  SPEAKER_01: If you have not had a chance to go listen to the first half of this podcast, I'll put a link here in the show notes below.
• 1:09
  SPEAKER_01: So go click on that and listen to James last week and then come back and listen to the second half this week.
• 1:15
  SPEAKER_01: Now, next week, I'm very excited we already have recorded and have the next week already lined up for you.
• 1:20
  SPEAKER_01: It's Leo Perea.
• 1:21
  SPEAKER_01: He is the CEO of EXP, and he's going to basically talk on the same exact issues that we did with James.
• 1:28
  SPEAKER_01: So we're going to have basically about a three or four-week period here where we have two of the largest companies represented by their CEOs talking about the issues that directly impact you in the business, talking clear cooperation, broker to broker, NAR, and so forth.
• 1:42
  SPEAKER_01: So it is going to be a very important four-week period here.
• 1:45
  SPEAKER_01: And we're now just into week number two.
• 1:48
  SPEAKER_01: So I'm going to go ahead and start back where we left off with James last week.
• 1:52
  SPEAKER_01: So y'all go ahead, listen to last week's show if you haven't, and then come on back here and listen to this week.
• 1:56
  SPEAKER_01: If you already listened last week, just start right here.
• 2:17
  SPEAKER_02: It's like slow down, slow down there, Braveheart.
• 2:19
  SPEAKER_02: I get it.
• 2:20
  SPEAKER_02: And I'm not against it, but that's just not a logical argument.
• 2:24
  SPEAKER_02: Because if you to me, this is really simple.
• 2:26
  SPEAKER_02: It's all a matter of how you talk to the seller.
• 2:28
  SPEAKER_02: If I told the seller, look, we're going to do this off market because I don't want to have people stealing stuff in your house and I don't want to get your carpets dirty.
• 2:35
  SPEAKER_02: And like I can probably find a buyer in my network and we don't have to deal with all this exposure and we can double end the deal and I'll bring my commission rate down.
• 2:42
  SPEAKER_02: But the seller's going to go, that sounds great.
• 2:44
  SPEAKER_02: Yeah.
• 2:44
  SPEAKER_02: Now let me reverse it.
• 2:47
  SPEAKER_02: We're going to put it on the open market because it's likely your home's going to sell for five to 15% more, depending upon where we are in the market conditions.
• 2:54
  SPEAKER_02: So you're going to get more money.
• 2:55
  SPEAKER_02: I'm going to make sure that we don't have people coming through the property that can't afford to buy the home, but it's going to give you maximum exposure on the largest websites in the world, which also syndicate the international websites so we can bring foreign buyers in.
• 3:06
  SPEAKER_02: Not putting it on the MLS is going to affect both the price of what you're going to sell it for and the exposure that we have.
• 3:12
  SPEAKER_02: Oh shit, I don't want to, no, I want that.
• 3:14
  SPEAKER_02: Like I want to get it sold.
• 3:15
  SPEAKER_02: Look, rich people have money because they don't spend all of it.
• 3:18
  SPEAKER_02: Now, they also don't care in some scenarios on what the cost is to sell the house.
• 3:23
  SPEAKER_02: I get that.
• 3:24
  SPEAKER_02: For some people, it's their fifth, sixth, seventh house.
• 3:26
  SPEAKER_02: Again, we're using this tiny, tiny little scenario to broadcast this net across the rest of the world, which doesn't apply.
• 3:34
  SPEAKER_01: So I don't even believe that because I watch million-dollar listing and I watch them yell at those guys.
• 3:38
  SPEAKER_01: I know it's all fake, but you still watch them yell at Altman, don't bring me an offer unless it's got a 10 in front of it.
• 3:44
  SPEAKER_01: Those guys aren't giving away their houses because they want money because they keep it.
• 3:48
  SPEAKER_01: That's right.
• 3:48
  SPEAKER_01: They want more money than the average person does because they think their stuff is worth more when it's not.
• 3:53
  SPEAKER_01: So this is the whole thing is just crap.
• 3:56
  SPEAKER_01: It irritates me.
• 3:57
  SPEAKER_01: You know, like another thing they like to do, Hickman did this with you, I saw on one of them, is they like to talk about the one hard hard uh sap story.
• 4:05
  SPEAKER_01: You know, the, oh, I had an agent who got fined$2,500 because of this, and this is crazy.
• 4:09
  SPEAKER_01: And it's like saying, okay, well, somebody died wearing a seatbelt one time, so we should never wear seatbelts again.
• 4:14
  SPEAKER_01: I mean, it's like, let's just throw out the baby with the water here.
• 4:17
  SPEAKER_01: It's it makes no sense because one time out of how many transactions in the country every year, they didn't like the result.
• 4:25
  SPEAKER_01: I mean, it almost sounds like politics.
• 4:28
  SPEAKER_02: Does it not?
• 4:29
  SPEAKER_02: We use these extreme use cases for everything, but if you to your point, if you get into the the specifics, it is a very good policy for buyers and sellers.
• 4:39
  SPEAKER_02: And if we're gonna do our jobs correctly, we need to be putting them first.
• 4:43
  SPEAKER_02: It's just it just has to be done that way.
• 4:45
  SPEAKER_02: So I don't have a problem with seatbelt laws.
• 4:48
  SPEAKER_01: Right.
• 4:48
  SPEAKER_01: And I would love to hear you say that to Yamansky or to Revkin, I know you probably have is tell me how this complies with your fiduciary duty to your seller.
• 4:58
  SPEAKER_02: Their answer is gonna be the seller's their answer is gonna be the seller doesn't want it on the MLS, and so I'm following what they tell me to do.
• 5:05
  SPEAKER_02: And I'm gonna be like, okay, how was the conversation that led up to that?
• 5:08
  SPEAKER_02: So as part of your fiduciary is to explain to them the pros of these policies.
• 5:12
  SPEAKER_02: Now, again, I'm I'm getting back to my comment.
• 5:14
  SPEAKER_02: If somebody wants to not do it and they are properly educated and have not been steered, et cetera, I personally don't have a problem with that.
• 5:24
  SPEAKER_02: But to be clear, I know for a fact 0.1% of people are going to want to keep it off MLS if they're educated correctly.
• 5:33
  SPEAKER_01: So yeah.
• 5:33
  SPEAKER_01: And that's the thing that's interesting.
• 5:35
  SPEAKER_01: And I think a lot of it has to do with the proliferation of these TV shows, is that buyers and sellers, consumers all over the place think that pocket listings, these secret listings are such a great deal for them.
• 5:45
  SPEAKER_01: And they are like, if it's a pocket listing and you're in an office of five or six agents and they're shopping it to five or six agents, what, two, three people are going to decide what it's worth?
• 5:55
  SPEAKER_01: I mean, wouldn't you rather have 500?
• 5:57
  SPEAKER_01: I mean, all you have to do is watch Miko or Barrett Jackson, one of these high-end car auction companies, and you watch when there's three people bidding on that car, the price goes.
• 6:06
  SPEAKER_01: When there's one person, they sit there, and it's one person bids, and then the price never goes anywhere.
• 6:11
  SPEAKER_01: You need multiple people with interest in your house to drive the price to the maximum you can get.
• 6:16
  SPEAKER_02: That's literally why we use marketplaces.
• 6:18
  SPEAKER_02: That's why you put something on Facebook, because you're going to get a massive audience.
• 6:22
  SPEAKER_02: You're going to get as many offers as possible for the highest price possible.
• 6:24
  SPEAKER_02: This is based, this is just logical.
• 6:27
  SPEAKER_01: So we've talked about fair housing, fiduciary duty to the client, definitely the consolidation of brokers.
• 6:33
  SPEAKER_01: This is one of the things that's really pissed me off about this.
• 6:36
  SPEAKER_01: In South Carolina, particularly, we have a lot of small independent brokers.
• 6:40
  SPEAKER_01: Somebody who worked for one of the big ones who said, you know, I want to go out on my own.
• 6:43
  SPEAKER_01: Maybe they had a team and they just want to do it their way.
• 6:45
  SPEAKER_01: And I totally believe, just like you said, that once if clear cooperation goes away, then your anywhere's your Keller Williams, the XP, that's all you're going to have.
• 6:54
  SPEAKER_01: You will not have the Gary Pickering real estate company because I would not be able to get the listings and be able to compete with the big brokers.
• 7:01
  SPEAKER_01: It just won't happen.
• 7:01
  SPEAKER_01: And I think that's bad.
• 7:02
  SPEAKER_02: Trevor Burrus, Jr.: I I believe that you are correct.
• 7:04
  SPEAKER_02: I think you'll see 20 to 40 companies that will dominate.
• 7:08
  SPEAKER_01: So how does the DOJ square that with not being antitrust?
• 7:12
  SPEAKER_01: I mean, they don't want a consolidation of telecommunications companies.
• 7:15
  SPEAKER_01: They don't want consolidations of anything.
• 7:17
  SPEAKER_01: But yet that's what if they continue to push this idea of getting rid of clear cooperation, that's what's going to happen.
• 7:23
  SPEAKER_01: You're going to have a consolidation of big businesses.
• 7:27
  SPEAKER_02: I think the DOJ has this backwards.
• 7:30
  SPEAKER_02: I have been vocal about that.
• 7:31
  SPEAKER_02: I don't think they understand what they're doing in this particular regard.
• 7:35
  SPEAKER_02: And if they want to create, if they want to take us back 30 years and create an absolutely horrible marketplace, then they should keep pursuing getting rid of CCP.
• 7:46
  SPEAKER_02: If they want to make the marketplace better and keep what we've built, which literally is the envy of every other country in the world.
• 7:55
  SPEAKER_02: And I say that because we have international MLS forums.
• 7:57
  SPEAKER_02: It was in Milan last year and it was in Paris before that, where they're trying to figure out how to build a marketplace.
• 8:02
  SPEAKER_02: Like this is a this is the thing that like I just don't understand.
• 8:05
  SPEAKER_02: If you go to a website in Spain and you look for properties for sale, you'll see the same property listed eight times by different sources at different prices, at different information, because there's no truth of source.
• 8:20
  SPEAKER_02: There's not one place everybody uses for truth of source in data.
• 8:24
  SPEAKER_02: We have the greatest marketplace called the MLS.
• 8:28
  SPEAKER_02: It's not perfect.
• 8:30
  SPEAKER_02: It has issues.
• 8:31
  SPEAKER_02: It's had issues.
• 8:32
  SPEAKER_02: It gets better every year because of policy and things that we're doing to make it better.
• 8:37
  SPEAKER_02: Agents have no idea what their world would look like if that MLS was gone.
• 8:43
  SPEAKER_02: Because 99% of them worked here 30 years ago.
• 8:46
  SPEAKER_02: And they will put themselves out of business and create this god-awful marketplace.
• 8:51
  SPEAKER_02: Imagine going to Zillow, which by the way wasn't that long ago when it was like this, where you had seven versions of the listing, which agents all complained about.
• 8:58
  SPEAKER_02: Well, this is my listing.
• 8:59
  SPEAKER_02: Where did it come from?
• 9:00
  SPEAKER_02: Because Zillow's getting it from seven different sources.
• 9:02
  SPEAKER_02: And then like, well, this is the accurate source.
• 9:04
  SPEAKER_02: Why is this information wrong?
• 9:05
  SPEAKER_02: That's how the rest of the world is today.
• 9:07
  SPEAKER_02: And we got rid of that because Zillow only gets its data from the MLS, which you use on a daily basis and keep your information up to date.
• 9:15
  SPEAKER_02: And there are fines because you need to keep your information up to date.
• 9:18
  SPEAKER_02: That's why that exists to do your damn job.
• 9:20
  SPEAKER_02: So, like, we've built this incredible thing.
• 9:23
  SPEAKER_02: This will tear it down.
• 9:24
  SPEAKER_01: 100%.
• 9:25
  SPEAKER_01: No doubt.
• 9:25
  SPEAKER_01: Well, let's move on to the next topic because I think we're 100% in agreement with Clear Cooperation.
• 9:30
  SPEAKER_01: And I'd like to go for two hours with you, but I know we're limited on time.
• 9:33
  SPEAKER_01: So let's talk about the other big issue, broker-to-broker comp.
• 9:36
  SPEAKER_01: And I am very happy to hear that next home is leading the charge along with EXP and some others in the industry and saying enough with the broker-to-broker compensation.
• 9:46
  SPEAKER_01: I think it's a huge threat to the industry.
• 9:48
  SPEAKER_01: What was it that made you decide to say we're done with broker-to-broker comp?
• 9:53
  SPEAKER_02: All right.
• 9:53
  SPEAKER_02: Well, this is where I'm going to get canceled.
• 9:54
  SPEAKER_02: So uh look, it is a we stopped it because I don't want to get sued anymore.
• 10:03
  SPEAKER_02: So I'm a named defendant in one of the class actions, actually two of them.
• 10:07
  SPEAKER_02: And so we settled.
• 10:09
  SPEAKER_02: And you can't so you can't go from a world where sharing of compensation on the MLS, which is what is no longer allowed.
• 10:17
  SPEAKER_02: So we don't we don't share those numbers on MLS, to going and sharing compensation in forms, which so many different states are doing, which is so stupid.
• 10:26
  SPEAKER_02: I don't get it.
• 10:27
  SPEAKER_02: Um like here's an idea.
• 10:29
  SPEAKER_02: We have a MLS where a group of competitors get together on a board to create the rules, and then we get sued for propping up compensation because they believe that sharing of compensation does that, which I'm gonna state it actually does.
• 10:42
  SPEAKER_02: I shall talk about that.
• 10:44
  SPEAKER_02: Um and let's put it in the forms now, created by a group of competitors to share compensation and think that we're not gonna get sued again.
• 10:51
  SPEAKER_02: What in the hell planet are people living on?
• 10:54
  SPEAKER_02: Uh it's just the same to me.
• 10:56
  SPEAKER_02: Right?
• 10:56
  SPEAKER_02: So a lot of states have moved away from allowing cooperative compensation in the forums, which every single state should do uh immediately to this idea that if your fiduciary responsibility to the seller, you're hiring me as a listing agent and you're saying I want you to sell my house for the highest price possible, the last thing I'm gonna do logically is charge you my fee and a fee that I'm going to share with a competitor in advance of an offer.
• 11:29
  SPEAKER_02: Now I'm gonna break this down logically because people are not gonna understand this until I do this.
• 11:32
  SPEAKER_02: Okay.
• 11:33
  SPEAKER_02: So if your fiduciary is to help the seller, why the hell would you ever advertise what your seller is willing to pay in compensation prior to receiving an offer from the buyer post-August 10th?
• 11:50
  SPEAKER_02: This is really important how I'm explaining this.
• 11:53
  SPEAKER_01: Can you please say that again?
• 11:54
  SPEAKER_01: What more you have nailed it.
• 11:56
  SPEAKER_01: That is the most important statement you said all day.
• 11:59
  SPEAKER_02: Post August 17th, every single buyer and agent across the U.S., as long as you're part of an NAR-governed MLS, is required.
• 12:10
  SPEAKER_02: You've opted into the settlement, is required to have a buyer sign a buyer rep agreement with you prior to showing any houses.
• 12:17
  SPEAKER_02: That is a requirement of the settlement.
• 12:20
  SPEAKER_02: The reason for that, and this is going to irritate some people, is to avoid steering.
• 12:25
  SPEAKER_02: The reason for it is that you agree to your rate of compensation with the buyer prior to knowing what anything is being offered by the seller.
• 12:33
  SPEAKER_02: Your buyer agrees to pay you that fee, and if they can't afford to pay it, the conversation is really simple.
• 12:38
  SPEAKER_02: Mr.
• 12:38
  SPEAKER_02: and Mrs.
• 12:39
  SPEAKER_02: Buyer, can you afford to pay this fee that I charge?
• 12:41
  SPEAKER_02: No.
• 12:41
  SPEAKER_02: Okay.
• 12:42
  SPEAKER_02: Then what we're gonna do is we're gonna make it part of the offer process and ask the seller to pay this part of the compensation.
• 12:47
  SPEAKER_02: And they can choose to do it or not.
• 12:49
  SPEAKER_02: We'll deal with it when we get there, but let's clarify that.
• 12:51
  SPEAKER_02: Buyer says, yes, here's the fee you charge.
• 12:54
  SPEAKER_02: That's designed to stop steering because the buyer has agreed to pay you the fee that you charge.
• 12:59
  SPEAKER_02: Now, your job as a buyer's agent is to show every damn house that's for sale and let the buyer choose which one they want, and then you figure out what the deal together.
• 13:06
  SPEAKER_02: Now, why all that's important?
• 13:08
  SPEAKER_02: Knowing that, and knowing as a listing agent that every buyer's agent is charging something different and likely is not the same, why would I ever tell the buyer's agent what my seller is willing to actually pay?
• 13:23
  SPEAKER_02: Especially if your fee might be lower than what my seller was willing to pay.
• 13:28
  SPEAKER_02: You are screwing your seller by telling them what your seller is willing to do.
• 13:34
  SPEAKER_02: What you should be doing, which is what me and EXP and Baron Warner and tons of other brokerages do, is we don't do cooperative compensation anymore.
• 13:41
  SPEAKER_02: We simply explain to the seller, Mr.
• 13:44
  SPEAKER_02: and Mrs.
• 13:44
  SPEAKER_02: Seller, it is very likely that almost every offer that's gonna come in is gonna request some type of help to pay the buyer's agent's compensation because the buyer is likely not gonna be able to afford it.
• 13:55
  SPEAKER_02: You can choose to pay it, you can choose not to pay it, we can go down that rabbit hole of whatever you want to do.
• 14:01
  SPEAKER_02: My job is to look out for your interest.
• 14:03
  SPEAKER_02: However, my recommendation, Mr.
• 14:06
  SPEAKER_02: and Mrs.
• 14:06
  SPEAKER_02: Seller, is this we want to advertise that the seller is willing to entertain any and all requests.
• 14:13
  SPEAKER_02: Just put them in your offer.
• 14:16
  SPEAKER_02: Could be the pool, your airplane, the refrigerator, whatever the hell the buyer, just tell them to put whatever they want in the offer and then we'll respond.
• 14:24
  SPEAKER_02: My job as a listing agent is to get as many offers in the door as possible.
• 14:27
  SPEAKER_02: We're gonna put net sheets down on all of them.
• 14:30
  SPEAKER_02: We're gonna look at which offer is best based upon the circumstances that are best for you, and we will respond either to all of them, one of them, whatever we want to do.
• 14:38
  SPEAKER_02: But I don't want to tell them anything, and here's why.
• 14:41
  SPEAKER_02: If I advertise a number that is higher than what the buyer agent compensation was agreed to, the buyer's agent, if they're smart, is gonna ask for the redifference as a concession as part of the offer, thereby getting their buyer better terms and screwing your seller.
• 14:58
  SPEAKER_02: They could do it anyway, but if I don't tell them what I'm willing to do, likely the buyer's agent is only gonna request what they need to get the deal done to be competitive.
• 15:08
  SPEAKER_02: And so therefore I'm saving the seller money by not doing that.
• 15:12
  SPEAKER_02: That's the reason why cooperative compensation is a problem.
• 15:15
  SPEAKER_02: And I'll finish it with this the next class action lawsuit will be this.
• 15:19
  SPEAKER_01: Yes.
• 15:20
  SPEAKER_01: You are nailing it right there.
• 15:22
  SPEAKER_01: I have said for a long time, if you look back at what Michael Ketchmark, who is an asshole, I always like to throw that Michael Ketchmark assholes is that on my show.
• 15:31
  SPEAKER_01: But if you look at Michael Ketchmark, the whole argument was why is a listing agent involved at all in what a buyer's agent compensation is?
• 15:40
  SPEAKER_01: There is no valid reason, and you've said this many times, I've heard you and I've read it and you come from you.
• 15:45
  SPEAKER_01: Give us one valid reason why a listing agent should be determining or be involved up front before the deal as to what compensation is.
• 15:54
  SPEAKER_01: There is no good argument.
• 15:56
  SPEAKER_01: It just creates liability.
• 15:58
  SPEAKER_01: Right.
• 15:58
  SPEAKER_01: And if we don't get our head out of our ass on this in two to three years after the counter again, we're going to get sued worse, much worse, than we ever did in the first place.
• 16:07
  SPEAKER_02: And the reason for this, everybody understands this, I want to make one comment here.
• 16:11
  SPEAKER_02: I am a named defendant.
• 16:13
  SPEAKER_02: I had to settle and spend hundreds of thousands of dollars a month in legal fees to settle this out, even though as a whatever.
• 16:20
  SPEAKER_02: The point is this the class will look like this.
• 16:24
  SPEAKER_02: They're gonna they're gonna sue every company and agent this time because brokers are broke, and they're gonna go, everybody doing cooperative compensation, they're gonna get a copy of your listing agreement, they're gonna see what you offered in compensation, they're gonna get a copy of the buyer rep agreement on the other side.
• 16:41
  SPEAKER_02: They're gonna look for the differences between what the buyer's agent should have been paid, concessions that were requested, what you publicly advertised.
• 16:48
  SPEAKER_02: They're gonna make the difference between those two numbers, the damages.
• 16:51
  SPEAKER_02: They're gonna get actual damages this time.
• 16:54
  SPEAKER_02: So they'll have an actual calculation to work from.
• 16:56
  SPEAKER_02: And then remember, antitrust is treble.
• 16:59
  SPEAKER_02: So it's that times three.
• 17:02
  SPEAKER_02: And the difference is the industry will bankrupt itself.
• 17:06
  SPEAKER_02: There is no reason to do it.
• 17:08
  SPEAKER_02: Now I want to give the alternative because it's super important.
• 17:10
  SPEAKER_02: I'm not saying your seller can't advertise compensation.
• 17:15
  SPEAKER_02: To be clear, I'm not saying that.
• 17:17
  SPEAKER_02: I don't think it's smart.
• 17:18
  SPEAKER_02: I think it's a stupid process to do, but if your seller wants to advertise compensation, you need to do it differently.
• 17:25
  SPEAKER_02: It's seller direct payment to buyer brokerage.
• 17:29
  SPEAKER_02: You are not collecting and remitting to a competitor.
• 17:32
  SPEAKER_02: You are only charging your fee in the listing agreement.
• 17:35
  SPEAKER_02: And if your seller wants to advertise, I'm willing to pay X to the buyer brokerage to help cover fees.
• 17:41
  SPEAKER_02: Make sure that they agree to that.
• 17:43
  SPEAKER_02: That was their decision to do.
• 17:45
  SPEAKER_02: So you got a CYA form in place.
• 17:47
  SPEAKER_02: And it's always the seller paying the buyer brokerage through the closing process.
• 17:51
  SPEAKER_02: You're not collecting that money.
• 17:53
  SPEAKER_02: In my opinion, it's dumb.
• 17:54
  SPEAKER_02: And there's only maybe two circumstances where it makes any sense.
• 17:58
  SPEAKER_02: And by the way, I think it should be to the buyer, not to the buyer brokerage.
• 18:01
  SPEAKER_02: I think it should be a concession to the buyer.
• 18:03
  SPEAKER_02: And to me, it's in a buyer's market where you're really, it's really competitive and you're trying to get a buyer to buy your house.
• 18:10
  SPEAKER_02: Really important words here, Gary.
• 18:11
  SPEAKER_02: You're trying to get the buyer to buy their house.
• 18:14
  SPEAKER_02: You're not trying to get the agent to steer them to buy that house.
• 18:18
  SPEAKER_02: You're making it go directly to the buyer to incentivize them to buy the house.
• 18:22
  SPEAKER_02: Super important.
• 18:24
  SPEAKER_02: So in divorce, maybe a buyer's market, like you've got very minimal circumstances where, in my opinion, it makes sense to try and influence the buyer to buy the house.
• 18:33
  SPEAKER_02: Other than that, everything that we've taught, same thing that EXP and all these other companies that get it, it's really simple, which by the way is fully MLS compliant.
• 18:41
  SPEAKER_02: Seller is willing to entertain any and all requests put in your offer.
• 18:46
  SPEAKER_02: That is completely legal to put in the MLS remarks because I didn't talk about compensation and I didn't advertise the rate.
• 18:52
  SPEAKER_02: I just simply said we're willing to entertain any and all requests, put in your offer.
• 18:56
  SPEAKER_01: That's it.
• 18:56
  SPEAKER_01: And that's the way, and see, I tell I tell agents all the time let's suppose that James was the only agent in his market grandfathered into the MLS and that you could advertise all you wanted, what percentage you were going to pay.
• 19:09
  SPEAKER_01: It doesn't matter because there's no co-op agreement in the MLS anymore that says I have to pay you anything.
• 19:16
  SPEAKER_01: So I can go out and advertise and I'm willing to pay you a million dollars if you bring me an offer.
• 19:21
  SPEAKER_01: Until we put it in a contract and it's signed by the buyer and the seller or some type of comp agreement, it doesn't matter.
• 19:28
  SPEAKER_01: So there's no advantage in advertising.
• 19:30
  SPEAKER_01: I can go 3X, 4X, 10X, a million X until we have an offer that's signed by the parties, it's irrelevant.
• 19:36
  SPEAKER_01: Nothing binds me to pay you anything anymore.
• 19:38
  SPEAKER_02: Agreed.
• 19:39
  SPEAKER_02: Why would you on Facebook Marketplace, you're selling something, be like, oh yeah, by the way, I'm willing to pay X?
• 19:44
  SPEAKER_02: What the fuck?
• 19:45
  SPEAKER_02: Right?
• 19:45
  SPEAKER_02: No.
• 19:46
  SPEAKER_02: No, it's not.
• 19:46
  SPEAKER_02: You put the thing up for sale and you let them make an offer and then you respond accordingly.
• 19:51
  SPEAKER_02: This it doesn't make any logical sense to do it.
• 19:53
  SPEAKER_02: Is it actually cooperative compensation?
• 19:56
  SPEAKER_02: It is going to be harming sellers.
• 19:58
  SPEAKER_02: And I hate to say it that way, and I'm sure it's Going to get used at exhibit A, but I have been tracking this.
• 20:02
  SPEAKER_02: When you do it the other way, the buyer's agent and buyer are always going to try to put their best offer forward.
• 20:09
  SPEAKER_02: And it's usually going to be at what they need, not requesting more.
• 20:13
  SPEAKER_02: And you're going to find a lot of the time it will save the seller money by not doing it.
• 20:19
  SPEAKER_01: My best agents are going to their hand and saying, it doesn't matter how much they offer.
• 20:25
  SPEAKER_01: It doesn't matter how much they ask for you to pay in compensation.
• 20:28
  SPEAKER_01: What matters is what you net.
• 20:30
  SPEAKER_01: Let's look at it and see what you net.
• 20:32
  SPEAKER_01: And I talk to agents all the time$300,000 offer might be a better offer than a$310,000 offer.
• 20:38
  SPEAKER_01: Agreed.
• 20:39
  SPEAKER_01: Worrying about what the sales price is and seller saying, I am not paying the buyer agent anything.
• 20:45
  SPEAKER_01: Well, I bet you will be.
• 20:47
  SPEAKER_01: Right.
• 20:47
  SPEAKER_01: If you offer me$25,000 over ask price, I'm pretty sure I'll be willing to pay some of your commission.
• 20:54
  SPEAKER_01: You come in half of what I'm asking for the house, I'm probably not willing to even counteroffer you.
• 20:58
  SPEAKER_01: You know, it all depends on what they're net.
• 21:00
  SPEAKER_02: Let's the other thing is the other thing is the buyer's agents are like, well, I need to know whether the seller is offering anything my buyer wants to know.
• 21:07
  SPEAKER_02: No, you don't.
• 21:08
  SPEAKER_02: I don't even care what the seller's offering.
• 21:10
  SPEAKER_02: We taught literally 6,000 people, don't even call the listing agent and ask.
• 21:14
  SPEAKER_02: And they're like, really?
• 21:14
  SPEAKER_02: Yeah, I don't give a shit what the seller is asked offering or not.
• 21:17
  SPEAKER_02: I'm going to submit an offer for what my buyer can do to buy this house.
• 21:24
  SPEAKER_02: And I don't care what the seller's doing or not.
• 21:26
  SPEAKER_02: They can choose to pay it or not.
• 21:28
  SPEAKER_02: And if they don't, guess what?
• 21:29
  SPEAKER_02: They don't sell their house.
• 21:30
  SPEAKER_02: By the way, what do you think a seller wants to do when they put their house up for sale?
• 21:33
  SPEAKER_02: Sell it.
• 21:33
  SPEAKER_02: Sell the house.
• 21:34
  SPEAKER_01: So what's the reluctancy of these agents?
• 21:38
  SPEAKER_01: And why is NAR not just stepping up and saying, in light of the lawsuit, in light of the settlement, in order to protect all of our members, we are directing our MLSs to no longer, or we're directing everybody, if you're a member of the realtor, don't do broker broker compensation.
• 21:53
  SPEAKER_01: I want to see somebody leave, whether it's the state association at realtors or somebody should stand up and say, we're not doing this.
• 21:59
  SPEAKER_01: I know you're doing that.
• 22:00
  SPEAKER_01: I know uh EXP Leo are doing that, but damn it, somebody needs to get their head out their ass here and say, we're done with this, because this is the next lawsuit.
• 22:08
  SPEAKER_02: I think if I was if the honest answer is if I was in their shoes, I think what they're most concerned about is it's such a drastic shift, and they're already dealing with a massive PR problem that it would like cause everybody to just freak out and revolt.
• 22:26
  SPEAKER_02: And so my gut says, and I'm just thinking if I was the CEO of NAR, um, baby step it.
• 22:32
  SPEAKER_02: You know, you and I both know that there's not going to be another class action right now because you have to create a class.
• 22:36
  SPEAKER_02: So you need enough time and space in there.
• 22:40
  SPEAKER_02: I think they want to give everybody options, but I would be surprised if NAR doesn't back away from it more over time as more and more states move it out of forms and people get used to it.
• 22:52
  SPEAKER_02: And like a knee-jerk reaction like that for a protocol that's been in place for so long, I think would be pretty significant.
• 22:58
  SPEAKER_02: That's my honest answer, is they're trying to just think about how to baby step this and get the industry to move.
• 23:03
  SPEAKER_02: I agree with you that there just could have been much better communication on it.
• 23:06
  SPEAKER_02: And I agree with you 100% that this is a massive legal risk.
• 23:09
  SPEAKER_02: I only simply tell people you choose what you want to do, you do you, boo.
• 23:13
  SPEAKER_02: But like at the end of the day, big companies are not doing it because we understand that we don't want to get sued.
• 23:19
  SPEAKER_01: All right, I know we're uh out of time, but I do have to ask you because I heard you speak on this, NAR.
• 23:24
  SPEAKER_01: I know a lot of people are pissed off at NAR, the way they handled the settlement.
• 23:27
  SPEAKER_01: I thought it could have been a lot better.
• 23:29
  SPEAKER_01: I think some of the some of the guidance they came out with was not very good.
• 23:32
  SPEAKER_01: The sexual harassment suits were terrible.
• 23:35
  SPEAKER_01: Of course.
• 23:36
  SPEAKER_01: But I had predicted on my podcast, I get the 10 things that are most important in 2025.
• 23:41
  SPEAKER_01: And one of them is NAR is going to be more important today than ever before.
• 23:45
  SPEAKER_01: And that we need to be supporting it.
• 23:46
  SPEAKER_01: And I think there's a lot of people out there with their knee jerk reaction.
• 23:49
  SPEAKER_01: Screw NAR.
• 23:50
  SPEAKER_01: I don't have anything to do with them.
• 23:52
  SPEAKER_01: You've spoken on that.
• 23:53
  SPEAKER_01: Give us a couple of minutes on that before we get into day about why this will be.
• 23:56
  SPEAKER_02: So here's the here's the two things.
• 23:58
  SPEAKER_02: Number one, I don't mean to plug this, but I have a pod that I did on my podcast that you all should listen to.
• 24:03
  SPEAKER_02: It's with general counsel at NER.
• 24:05
  SPEAKER_02: It's a two-part podcast where she explains what you can and cannot do in the settlement in finite detail.
• 24:10
  SPEAKER_02: I.e., you can't modify your buyer rep agreement to receive more compensation because the seller's offering it.
• 24:14
  SPEAKER_02: Everyone's gonna freak out right now.
• 24:16
  SPEAKER_02: Go listen to Leslie talk about it.
• 24:17
  SPEAKER_02: All right.
• 24:18
  SPEAKER_02: NER has done some pretty dumb shit over the course of the past while, and I think that's been a leadership problem.
• 24:24
  SPEAKER_02: And I have nothing to state other than they've lost their way.
• 24:27
  SPEAKER_02: But I do believe, and I know Nakia personally, like I've spent quite a bit of time with her.
• 24:32
  SPEAKER_02: He is wicked smart.
• 24:34
  SPEAKER_02: She is very, very in tune with what's going on.
• 24:36
  SPEAKER_02: She is making significant changes over there.
• 24:39
  SPEAKER_02: Hiring Sherry Chris to be on her personal team to create an olive branch to large brokerages.
• 24:45
  SPEAKER_02: Sherry is a legend in the industry, knows everybody in the brokerage space.
• 24:49
  SPEAKER_02: I think the NER is on a different track.
• 24:51
  SPEAKER_02: And I think you're gonna see more and more of that happen.
• 24:53
  SPEAKER_02: She's not a status quo type of person.
• 24:55
  SPEAKER_02: She's a turnaround CEO.
• 24:57
  SPEAKER_02: Um I literally had dinner with her last week in New York, and she's very, very smart.
• 25:02
  SPEAKER_02: She's very tactful.
• 25:03
  SPEAKER_02: Uh, she doesn't speak unless she has something important to say.
• 25:06
  SPEAKER_02: I admire that about her.
• 25:08
  SPEAKER_02: Um if we lose NAR, 60% of the realtors are gone in 12 months, 24 months, somewhere in that timeframe.
• 25:17
  SPEAKER_02: Because here's what happened.
• 25:18
  SPEAKER_02: So, what people don't understand is your dues, which you pay nothing in dues, and I'll make that statement.
• 25:23
  SPEAKER_02: Your dues are nothing for what you get in return.
• 25:26
  SPEAKER_02: The$78 that NAR gets from all of its members.
• 25:30
  SPEAKER_02: Shannon McGahn and that advocacy team of 65 people she has at work for her, it's it's it's all the things you don't see that NER needs to do a such better job of explaining, but it's all the bills they crush that don't get to the floor, that don't get voted on, that would destroy private property rights in the U.S.
• 25:47
  SPEAKER_02: I'll give you two examples that would be super important for everyone to think about.
• 25:51
  SPEAKER_02: I'll start with your 1099 status that all of you so much enjoy.
• 25:54
  SPEAKER_02: Every year that's on the chopping block by every administration, Republican or Democrat, does not matter because they need tax revenue and the government's broke, as we all know.
• 26:04
  SPEAKER_02: So if the 1099 status went away, which the only reason we have a carve out specifically for residential real estate is because of NER, 60% of you, for agents that are listening would be fired instantly because there's not a broker on the planet who's going to employ all of you via W 2 and pay a minimum wage.
• 26:20
  SPEAKER_02: Ain't ever going to happen.
• 26:22
  SPEAKER_02: So you would see 60% of the industry gone.
• 26:25
  SPEAKER_02: That may even be conservative, um, would be gone almost right away.
• 26:29
  SPEAKER_02: So you wouldn't have a career to even do this.
• 26:31
  SPEAKER_02: For all of you that you know enjoy being able to sell two, three, or four houses a year, uh, you wouldn't have a job.
• 26:37
  SPEAKER_02: So that would be gone.
• 26:39
  SPEAKER_02: Yeah, no one's gonna hire you.
• 26:40
  SPEAKER_02: So there's that.
• 26:41
  SPEAKER_02: Uh flood insurance, a massive problem, fire insurance, all of these issues that are being debated on a national scale.
• 26:50
  SPEAKER_02: We have one of the best advocacy teams in the world.
• 26:54
  SPEAKER_02: Um, and our ability to influence policymakers in DC is the only reason this great industry is what it is today.
• 27:02
  SPEAKER_02: You lose NAR, you lose a seat at the table.
• 27:06
  SPEAKER_02: If you're not, you know, if you're not cooking, you're getting eaten, right?
• 27:09
  SPEAKER_02: I mean, it is done.
• 27:10
  SPEAKER_02: So I don't know what to tell you other than NAR has got some problems.
• 27:14
  SPEAKER_02: I think Nakia is going to absolutely turn the ship around.
• 27:16
  SPEAKER_02: I think Kevin Sears is a great is a great president.
• 27:19
  SPEAKER_02: He's got a two-year term, he cares, he's different.
• 27:22
  SPEAKER_02: And NAR is making those changes, and the industry should be supportive, if not for any other reason that your job depends on it.
• 27:28
  SPEAKER_01: Hey man, you know, I tell people all the time, it's fine to be pissed off at him.
• 27:31
  SPEAKER_01: I've been pissed off.
• 27:32
  SPEAKER_01: Do it.
• 27:33
  SPEAKER_01: Hold him accountable.
• 27:34
  SPEAKER_01: Yeah.
• 27:34
  SPEAKER_01: I mean, I did a show called 10 Ways NAR could suck less.
• 27:37
  SPEAKER_01: One of my ways is get out of Chicago.
• 27:39
  SPEAKER_01: You're in the most expensive real estate and employment.
• 27:42
  SPEAKER_01: Yeah.
• 27:42
  SPEAKER_01: Move to Greenville, South Carolina, move to Nashville, move to Austin, Texas, and save a ton of money.
• 27:47
  SPEAKER_01: But there's a lot of ways it could suck less.
• 27:49
  SPEAKER_01: But the bottom line is without it, we're screwed.
• 27:52
  SPEAKER_01: No if, ands, or buts about it.
• 27:53
  SPEAKER_01: 100%.
• 27:54
  SPEAKER_01: James, I've taken a lot of your time today.
• 27:56
  SPEAKER_01: I knew when I got you to come on here, this was going to be fun.
• 27:58
  SPEAKER_01: And I knew you're going to be one of my absolute favorites in the real estate space.
• 28:02
  SPEAKER_01: And in the hour we've spoken, you've absolutely become one of my absolute favorites.
• 28:06
  SPEAKER_01: Oh, thank you.
• 28:06
  SPEAKER_01: Coming love to have you back on.
• 28:08
  SPEAKER_01: We'd love to.
• 28:09
  SPEAKER_01: Let me know when you want it.
• 28:10
  SPEAKER_01: So well, guys, thank you so much for watching another episode of Edition Dirt.
• 28:15
  SPEAKER_01: Please like us, subscribe to us, and come back again next week for another episode.
• 28:19
  SPEAKER_01: Y'all have a great weekend.