Now What?

BY CHUCK KASKY

We survived August 14. The sun rose, and as I write this, we are in the middle of some glorious fall weather. Of course, all these beautiful days have left us in a drought, but we always take the bad with the good, right? We still have lots of questions, and Maryland REALTORS® will continue to modify the forms as we hear from you about how it’s going and what we can do to help.

Operating at a high level, we are now asking ourselves “Now what?” As you may know, I’m averse to making bold predictions in this uncertain environment, but to be prepared for the future, we must at least gather information, make some educated guesses, and put contingency plans in place to address the most probable outcomes.

I’ve put these into three categories: 1) how it’s going right here in Maryland; 2) what the future of NAR and “organized real estate” looks like; and 3) what can we expect in the market for residential real estate in the near term.

I’m taking the last issue first, because the short answer is “Nobody knows.” There are just too many variables, not the least of which is the outcome of the 2024 elections. The potential policy implications on things like inflation and interest rates are just too enormous to discuss in this format, but we will have more to say about the housing market later.

I can, however, report on what we’re hearing from members about implementing the practice changes brought about by the NAR settlement. Maryland REALTORS® supported our members by creating new forms to facilitate the new landscape around buyer broker compensation and provided hundreds of hours of educational opportunities to prepare for the new reality. Maryland REALTORS® communications, legal, and professional development teams worked tirelessly and collaboratively to develop the new forms (and a huge shout out to the Statewide Forms Committee).

We always understood that this would be an iterative process and changes to the forms and our programming will adjust as we get feedback from our members. Please contact us, as many of you already have, to let us know what’s happening in your market and what the pain points are. For example, we need to better understand and distinguish between cooperative compensation, where the listing broker directly compensates the buyer’s broker and seller concessions, which can also be used to compensate the buyer’s broker.

Let me pause to specifically address cooperative compensation. NAR has stated unequivocally that this practice, which has served us well for decades, is allowed under the settlement agreement. Maryland REALTORS® has made the policy decision to continue to facilitate use of it with the understanding that the market may ultimately decide its future. We believe it would have been premature to eliminate cooperative compensation as an option for our members and consumers at this early stage of our adjustment to the new reality. That said, and as you may know, some states and local associations did eliminate cooperative compensation from their brokerage agreements. If you operate in those markets and in markets that still facilitate it, please contact our Legal Hotline for guidance on how to navigate those transactions.

And what about the future of organized real estate? We know that members here and across the country are questioning the need for and value in REALTOR® associations at the local, state, and national levels. With the removal of compensation from the MLS, many are also questioning the future of that service.

Although headlines about changes in data and compensation rules may bring some uncertainty about the MLS’s place in the industry, the plethora and importance of services that it brings to the market ensures its continuity. Being able to express the stability these services will continue to provide to markets should be a priority for every professional involved in communicating the value of an organized real estate industry.

Just as the services, policies, and definitions of our associations and MLSs have shifted over the past century, they will continue to change. The real estate industry is moving through some dynamic phases of technology, law, and practice. The way brokers advertise homes, interact with clients, get paid for their work and develop new business will continue to change over time.

Industry leaders can and should face inevitable changes head-on. Communicating the many strengths and the value we deliver to members that have endured through an ever-changing industry adds clarity and confidence for all participants in the real estate ecosystem. It strengthens the industry’s professionals and the services they provide to members and consumers.

Our members know that trust is a critical element. With something as large and complex as the selling and buying of real estate, the professional guidance, representation and cooperation provided through REALTORS® and MLSs are essential. We promise that Maryland REALTORS® will continue to be here when you need us.

Chuck Kasky is CEO of Maryland REALTORS®.