The Core Value of Real Estate: Upholding Service and Integrity Amidst Change

The essence of the real estate business lies in service. As realtors, we have a fiduciary duty to our clients, meaning we are legally and ethically obligated to act in their best interests. In return, we expect loyalty from our clients. However, loyalty can be fleeting, especially when clients see an opportunity to save money. This reality can be disheartening and presents significant challenges for maintaining professional integrity and trust.

The Loyalty Challenge

Consider a recent experience I had with a client from another country who did not speak English. I spent countless hours helping her understand the U.S. real estate market, showing her numerous homes, and even missing my daughter’s friends birthday party to accommodate her schedule. She expressed interest in a particular house, but when I asked if she wanted to make an offer, she declined. The next day, the house went under contract. Suspecting something was amiss, I called her and she seemed unbothered by the news. Soon after, she vanished. A month later, I discovered she had bought the house through the listing agent’s colleague, bypassing me entirely.

Despite having an exclusive buyer’s representation agreement with her, which legally entitled me to compensation, I faced a dilemma: should I sue her and risk being known as the realtor who sues clients, or should I walk away and accept the loss?

Either way, I stood to lose—financially, professionally, or both.

The Reality of Competition

This isn’t an isolated incident. Prospective clients often reach out, boasting about how they’ve shopped around for the best deal, asking if I can offer a rebate on my commission because other realtors have promised them savings. When I refuse, they move on, only to return when their chosen realtor fails them. These situations are frustrating and highlight the cutthroat nature of the industry.

Navigating the New Landscape

Real estate offices emphasize the importance of strong negotiation skills and suggest that these skills will secure client loyalty. However, they often overlook the fact that clients may balk at signing representation agreements that require them to pay substantial commissions. There’s always someone willing to undercut your service fee, which undermines the value of expertise and dedication.

In light of recent changes, such as the settlement between the National Association of Realtors (NAR) and sellers, where sellers are no longer obligated to pay buyer’s agent commissions, the landscape is shifting. Previously, buyer’s agents earned a fixed commission of 2.5-3% of the sale price from sellers. Now, everything is negotiable, and this change is expected to drive many buyer’s agents out of business. The unpredictability of compensation is untenable for many, especially considering the extensive hours and effort involved in real estate transactions.

Embracing a New Approach

Given these challenges, it’s clear that a new approach to buying homes is in high demand. The traditional model of dual representation—where separate agents represent the buyer and the seller—may no longer be the most effective or efficient method. Direct communication between buyers and sellers, facilitated by secure, transparent technology platforms, could revolutionize the industry. Such systems would ensure all parties are well-informed and reduce the need for multiple intermediaries, ultimately lowering costs and increasing trust.

Moving Forward

The future of real estate depends on adapting to these changes while maintaining the core value of service. Realtors must focus on providing exceptional service, building genuine relationships, and leveraging technology to create more transparent and efficient transactions. By doing so, we can foster a real estate environment where trust and integrity are paramount, and clients are confident in the value of professional representation.

As the industry evolves, stay tuned for innovative solutions that promise to transform how we buy and sell homes. Together, we can navigate this new landscape and continue to serve our clients with the dedication and professionalism they deserve.