Texas homes don’t come in a one-size-fits-all package. The materials you’ll see in Houston can look very different from what’s common in the Hill Country or West Texas—and those differences aren’t just cosmetic. In Texas, heat, humidity, hail, shifting soils, termites, wildfire risk, and even local design traditions all influence what are houses built off and why.
This guide breaks down the most common construction materials used across Texas, the practical benefits (and tradeoffs) of each, where those materials typically come from, and what architects and builders consider when choosing them. We’ll also look at today’s material-driven building trends—including house materials in Austin and construction materials in Austin—so buyers and homeowners can make more confident decisions.
Quick overview: The most common house materials in Texas
Most Texas single-family homes are built with a combination of:
Foundation: concrete slab-on-grade (most common), pier-and-beam in some areas
Structure (framing): wood framing (dominant), sometimes light-gauge steel
Exterior cladding: brick veneer, fiber-cement siding, stucco, stone veneer, or combinations
Roofing: asphalt shingles (dominant), metal roofing (growing), tile in some regions
Windows/doors: vinyl or aluminum windows, increasingly energy-efficient low-E glass; fiberglass or steel entry doors
Insulation & air sealing: fiberglass batts/blown-in, spray foam (common in higher-efficiency builds)
In other words, a “brick house” in Texas is often brick veneer over a wood-framed wall system. That’s a key point for first-time buyers trying to understand what are houses built off in practical terms.
Why material choice matters in Texas (weather, soil, and upkeep)
Texas is big enough to be multiple building climates. Materials are chosen not only for looks and budget, but also for how they perform against:
Heat and sun: long cooling seasons, high UV exposure, and hot roof decks
Humidity and heavy rain: especially along the Gulf Coast and in parts of East Texas
Hail and wind: common in North Texas and the Panhandle
Expansive clay soils: prevalent in many metros (Dallas–Fort Worth, Austin area, San Antonio), impacting foundations
Termites and pests: a statewide concern, higher in warm/humid areas
Wildfire risk: Hill Country and West Texas zones, influencing exterior and roofing choices
From a resale standpoint, material choices also affect insurance costs, maintenance schedules, and how a home “shows” to local buyers. That’s why it’s helpful to understand the regional logic behind construction materials, not just the design style.
Foundations: Concrete slabs and pier-and-beam (and why soils drive the decision)
Concrete slab-on-grade (most common)
In much of Texas, the standard foundation is a concrete slab. It’s fast to build, cost-effective at scale, and works well with typical production home methods.
Benefits:
Cost and speed: generally less expensive than raised foundations
Termite resistance (relative): fewer exposed wood components at ground level
Energy efficiency potential: fewer air leaks from a crawl space
Tradeoffs and watch-outs:
Soil movement sensitivity: expansive clays can contribute to cracking or differential movement
Plumbing access: repairs under a slab can be more disruptive
Drainage matters: gutters, grading, and downspout extensions are critical to keep water away
Pier-and-beam (raised foundation)
You’ll see pier-and-beam in older neighborhoods, flood-prone areas, and in some custom builds where access to plumbing and wiring is valued.
Benefits:
Easier access: plumbing and mechanical repairs can be simpler
Adaptable: can perform well in certain soil conditions when engineered correctly
Flood considerations: raising the structure can help in some areas (site-specific)
Tradeoffs and watch-outs:
Moisture control: crawl space ventilation and vapor barriers are important in humid regions
Pest risk: more exposed framing can increase vulnerability if maintenance slips
Floor feel: may have more “bounce” than a slab
Where foundation materials come from
Texas has a strong concrete supply chain tied to regional aggregate (crushed stone, sand) and cement distribution. Aggregates are commonly sourced from Texas quarries and river basins, with additional regional supply supporting major metros during peak building cycles. Ready-mix plants tend to be local to each market because concrete is time-sensitive once mixed.
Framing: Why wood dominates—and where steel fits in
Wood framing (the Texas default)
Most Texas homes are framed with dimensional lumber (2×4/2×6 studs, trusses, sheathing). Wood remains popular because it’s familiar to crews, relatively cost-effective, and easy to modify for changes in the field.
Benefits:
Availability: strong distribution network across the state
Speed: efficient for production building schedules
Flexibility: easier remodels and additions in many cases
Tradeoffs and watch-outs:
Moisture management: leaks must be handled quickly to prevent rot and mold
Termite protection: requires treatment and ongoing vigilance
Fire performance: managed through code requirements and assembly design
Steel framing shows up in select custom homes and some infill projects, especially where straightness and durability are prioritized.
Benefits:
Dimensional stability: less warping and shrinking than wood
Pest resistance: not a food source for termites
Consistency: engineered components can be very precise
Tradeoffs and watch-outs:
Cost and labor familiarity: may require specialized crews
Thermal bridging: steel conducts heat, so details must address energy performance
Noise and vibration: can require additional design consideration
Where framing materials come from
Texas lumber supply often comes through regional mills across the South and Pacific Northwest distribution channels, with strong logistics into major markets like DFW, Houston, San Antonio, and Austin. Steel studs and connectors typically move through national manufacturers and Texas-based distributors, with pricing more tied to broader commodity swings.
Exterior cladding: Brick, fiber cement, stucco, and stone across Texas styles
Exterior materials do a lot of heavy lifting in Texas. They’re your first line of defense against sun, wind-driven rain, and hail—plus they define curb appeal. In many neighborhoods, the exterior finish also needs to match HOA guidelines and local architectural expectations.
Brick veneer (a Texas classic)
Brick is one of the most recognizable Texas exteriors, particularly in suburban developments and many established neighborhoods. Most modern builds use brick veneer, meaning a single layer of brick attached to the exterior wall system, not a solid structural brick wall.
Benefits:
Durability: strong resistance to UV, pests, and everyday wear
Low maintenance: doesn’t need repainting like many sidings
Resale appeal: “brick home” perception remains positive in many Texas markets
Tradeoffs and watch-outs:
Weep holes and flashing: critical for drainage behind the brick
Mortar upkeep: older homes may need tuckpointing over time
Foundation movement: can show as cracks if soils shift
Where it’s sourced: Texas has its own brick and clay product manufacturing, with additional supply from neighboring states. Color palettes often reflect regional clay sources and popular builder selections.
Fiber-cement siding (especially common in Central Texas)
Fiber-cement has become a go-to choice in many master-planned communities and urban infill projects. It’s widely seen in house materials in Austin because it fits modern farmhouse and contemporary looks while handling sun exposure well when installed and painted properly.
Benefits:
Fire and pest resistance: more resilient than wood siding
Design flexibility: works for lap siding, board-and-batten, and modern panel styles
Predictable performance: stable material when detailed correctly
Tradeoffs and watch-outs:
Paint cycle: will need repainting over time, especially under intense Texas sun
Installation matters: flashing, caulking, and clearances are non-negotiable
Moisture detailing: requires good water management around windows and penetrations
Where it’s sourced: commonly distributed through Texas building supply networks; availability is typically strong in fast-growing metros.
Stucco (common in San Antonio, South Texas, and some Austin builds)
Stucco supports Spanish, Mediterranean, and modern designs. In the right assembly, it can be durable and attractive—but it’s not “set it and forget it.”
Benefits:
Seamless look: clean lines and strong architectural character
Good longevity: when drainage planes and control joints are correct
Pairs well with masonry accents: popular for Texas regional styles
Tradeoffs and watch-outs:
Crack management: hairline cracks are common; monitoring and sealing is important
Water intrusion risk: poor detailing around windows/doors can cause hidden damage
Repair matching: patching can be visible if textures vary
Stone veneer and limestone (the Hill Country signature)
Central Texas is known for limestone aesthetics—especially around Austin, the Hill Country, and parts of San Antonio. Many homes use manufactured stone veneer or thin-cut natural stone to get the look without full-depth masonry cost.
Benefits:
High curb appeal: timeless, “Texas Hill Country” identity
Durable surface: resists sun and impact well
Architectural depth: adds texture and shadow lines that flatter facades
Tradeoffs and watch-outs:
Installation quality: lath, scratch coat, and moisture management are crucial
Cost: often higher than siding alternatives
Weight and detailing: requires correct support and flashing transitions
Where it’s sourced: natural limestone and other building stone can be quarried in Texas (notably in Central Texas), while manufactured products come through statewide distributors. Regional sourcing is a selling point for some custom projects aiming for a local material story.
Roofing: Shingles, metal, and tile (with hail and heat in mind)
Asphalt shingles (still #1 across Texas)
Asphalt composition shingles remain the most common roof covering due to affordability and broad installer availability.
Benefits:
Cost-effective: generally the lowest upfront cost
Style variety: architectural shingles provide a higher-end look
Repairability: individual sections can often be repaired
Tradeoffs and watch-outs:
Heat aging: intense sun can shorten lifespan
Hail vulnerability: impact resistance varies; ask about ratings and insurance implications
Ventilation: attic ventilation is key for performance and comfort
Metal roofing (growing in popularity)
Metal roofing is increasingly common in Central and West Texas and is showing up more in urban neighborhoods, including construction materials in Austin conversations where modern design and long-term durability are priorities.
Benefits:
Longevity: can outlast standard shingles when properly installed
Heat performance: reflective coatings can reduce heat gain
Fire resistance: helpful in higher-risk zones
Tradeoffs and watch-outs:
Upfront cost: typically higher than shingles
Hail denting: performance depends on panel type and gauge
Installation quality: flashing and fastener details matter
Tile and specialty roofs
Concrete or clay tile roofs appear in parts of South Texas and higher-end communities statewide. They offer strong style and durability but require a structure designed for the weight and careful detailing at underlayment and flashing.
Insulation and energy materials: What helps most in Texas heat
In Texas, comfort and operating costs are heavily influenced by insulation, air sealing, and window performance. Many buyers focus on countertops and flooring, but energy details often determine how a home lives day to day.
Fiberglass batts and blown-in insulation
Benefits:
Affordability: common in entry-level to mid-range homes
Availability: easy to source and install
Tradeoffs and watch-outs:
Air leaks: insulation alone doesn’t stop hot air infiltration
Installation quality: gaps and compression reduce effectiveness
Spray foam (common in higher-efficiency builds)
Spray foam is popular in many new builds and remodels—particularly in Central Texas—because it can improve air sealing when installed correctly.
Benefits:
Air sealing: helps reduce drafts and humidity intrusion
Comfort gains: can stabilize indoor temperatures
Tradeoffs and watch-outs:
Cost: higher upfront price
Mechanical ventilation needs: tighter homes may require planned fresh air strategies
Windows and glazing
Low-E coated, double-pane windows are standard in many Texas markets. In hot climates, solar heat gain ratings matter, and shading (overhangs, porches, trees) can be just as important as the glass itself—an architectural point that comes up often in Austin-area designs.
Interior materials: Drywall, flooring, and moisture considerations
Interior finishes vary by price point, but a few Texas patterns show up consistently:
Drywall (gypsum board): standard wall material; moisture-resistant board is commonly used in bathrooms and utility spaces
Flooring: tile and luxury vinyl plank (LVP) are popular for heat, durability, and easy cleaning; hardwood appears more in higher-end homes but requires humidity control
Cabinetry: ranges from MDF/thermofoil to plywood boxes and solid-wood fronts, depending on budget
Texas-specific note: In humid areas (Houston, Gulf Coast), moisture management inside the home matters—especially with wood flooring and cabinetry. A well-sized HVAC system and good attic ventilation can help prevent cupping, swelling, and persistent musty odors.
Architectural perspective: How Texas design influences material choice
Architects and designers typically balance four big goals when selecting materials in Texas:
1) Climate-responsive design
Texas architecture often uses deep porches, overhangs, breezeways, and strategic window placement to reduce direct sun exposure. Materials that hold up to UV and temperature swings—like masonry, metal roofing, and high-quality coatings—support this approach.
2) Regional identity and neighborhood context
Materials help a home “belong” in its setting. Limestone and stone accents read as Hill Country. Brick fits many North Texas neighborhoods. Stucco aligns with San Antonio and South Texas influences. In many house materials in Austin conversations, you’ll see a blend: fiber-cement for modern lines, with stone or brick accents to anchor the facade.
3) Maintenance planning (not just aesthetics)
Architects may prefer assemblies that manage bulk water well: proper flashing, drainage planes, and venting behind claddings. In plain terms: the best-looking exterior is only as good as its water control details.
4) Material transitions and detailing
Many Texas homes combine two or three exterior finishes (for example, brick plus siding plus stone). Transitions are where problems can start if flashing and clearances aren’t correct. From a real estate standpoint, clean transitions are a “green flag” during showings and inspections.
Where Texas builders source materials (and why availability changes)
Material sourcing in Texas is shaped by both local resources and fast-growth logistics:
Local and regional extraction: aggregates for concrete and many stone products are often regionally sourced
Statewide distribution hubs: major metros support large networks for lumber, roofing, windows, and manufactured products
Seasonality: spring and summer building peaks can tighten labor and material availability, especially after storm seasons
Storm events: hurricanes and hail outbreaks can spike demand for roofing, siding, and drywall, influencing timelines and pricing
This matters for homeowners planning renovations: a “simple” material swap may have lead times depending on the season and regional demand.
Material-driven construction trends in Texas (2026 outlook scenarios)
Texas construction trends tend to follow a mix of energy costs, insurance pressures, code updates, and buyer preferences. While local conditions vary, here are trends that are widely visible across the state and especially in fast-growing markets like Austin:
Trend 1: More durable roofs and impact-resistant options
In hail-prone parts of Texas, buyers and insurers are paying closer attention to roof performance. Expect continued interest in:
Impact-resistant asphalt shingles
Metal roofing on higher-end and custom builds
Better roof ventilation and underlayment systems
Trend 2: Efficiency upgrades as a standard expectation
Higher-efficiency windows, tighter building envelopes, and upgraded insulation are increasingly used as selling points. In construction materials in Austin, you’ll often see builders emphasizing low-E glass, improved air sealing, and sometimes spray foam to meet buyer expectations for comfort.
Trend 3: Mixed-material exteriors for curb appeal
Many new builds blend brick or stone with fiber-cement panels and modern trim packages. The goal is a higher-end look without full masonry costs.
Trend 4: Design simplification to control costs
Even when material prices stabilize, labor and timelines can drive builders toward simpler rooflines and more standardized window packages. That doesn’t necessarily mean lower quality, but it can mean fewer complex architectural features.
Trend 5: More attention to moisture management details
As buyers become more inspection-savvy, builders are highlighting practices like proper flashing, sealed penetrations, and better site drainage. These details rarely show up on a brochure, but they have an outsized impact on long-term performance.
How to evaluate materials when buying a Texas home (step-by-step)
If you’re comparing homes and trying to judge whether the material choices are a good fit, use this practical checklist.
Step 1: Identify the true structure vs. the exterior look
Ask: Is this solid masonry or veneer?
Why it matters: it affects maintenance expectations and how moisture is managed behind the facade.
Step 2: Match materials to your region’s risks
Gulf Coast: prioritize moisture-resistant assemblies, good drainage, and durable exterior coatings
North Texas: pay close attention to roof age/type due to hail history
Central Texas: understand foundation type and drainage due to expansive soils
Hill Country: consider wildfire-aware choices (roofing, vents, defensible space) where applicable
Step 3: Look for “green flags” during a showing
Clean, consistent caulking and trim work around windows and doors
Visible weep holes on brick veneer (not clogged or painted over)
Downspouts that direct water away from the foundation
No staining on ceilings near exterior walls (a common leak indicator)
Step 4: Watch for common “red flags”
Cracks that stair-step through brick (can be movement-related; not always structural, but worth evaluating)
Stucco bubbling, staining, or heavy cracking around windows
Soft or swollen siding near the ground (possible moisture issues)
Roof showing widespread granule loss or obvious hail impact
Step 5: Use inspections strategically
A general home inspection is a baseline, but in Texas it can be smart to add specialists depending on the home:
Foundation evaluation: if there are notable cracks or doors sticking throughout the house
Roof inspection: especially after hail seasons or if the roof is near end-of-life
Pest/termite inspection: important statewide, especially for wood-framed homes
How materials affect negotiations and long-term costs
In Texas transactions, materials often come into play during option period negotiations (where applicable) and repair requests. A few practical examples:
Roof material and age: frequently impacts insurance quotes and can become a negotiation point
Exterior maintenance: repainting fiber-cement or repairing stucco can be budget items buyers request credits for
Foundation drainage setup: adding gutters, extending downspouts, or improving grading may be negotiated when inspectors flag water management concerns
For sellers, keeping receipts for roof replacements, exterior paint, and foundation drainage work helps support pricing and reduces friction during buyer inspections.
Texas takeaways: Choosing the “right” materials is about fit
So, what are houses built off in Texas? Most are a practical mix: concrete slabs, wood framing, and region-appropriate exterior finishes like brick, fiber cement, stucco, or stone—topped with shingles or, increasingly, metal. The best material choice depends on your region, your maintenance tolerance, and the home’s detailing quality more than any single product label.
If you’re house hunting in Central Texas, pay special attention to the blend of aesthetics and performance that defines house materials in Austin. And no matter where you buy in the state, remember: great materials perform best when the installation details—flashing, drainage, ventilation, and sealing—are done right.
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Ben Franklin is credited with saying, “In this world, nothing can be said to be certain, except death and taxes.” Depending on your income bracket and what happens with Trump’s “Big Beautiful Bill,” taxes might no longer be a certainty. Death, on the other hand …
With apologies to Mr. Franklin, I’d like to add one other certainty to the list: Uncertainty.
As I write this, Iran, Israel and (in a limited capacity) the United States are in a shooting war, which adds to potential uncertainties with oil shocks, a higher 10-year Treasury Bond, wavering consumer confidence, a lull in building starts and continued uncivil “civil” discourse. Our clients may be, understandably, on edge.
Yet, to quote from the National Association of Realtors’ Code of Ethics, “Under all is the land.” Sellers got to sell, buyers got to buy (fish got to swim, birds got to fly) and, based on history, real estate is still the safest investment out there.
So, how does an agent go about advising and guiding clients in these turbulent times? The same way we do it on a day-to-day basis. We constantly deal with turbulence. We walked our clients through the catastrophe of the 2008 economic meltdown.
On an ongoing basis, we deal with life-altering events: California agents help clients deal with the effects of wildfires, floods and earthquakes. In the Midwest and plains states, there are tornadoes, rain storms and freezing temperatures. Florida and the East Coast face hurricanes, and in New York City alone, there are the perennial disasters of the Knicks, Mets and Jets (wait till next year!).
Our clients already come to us for advice on the real estate market because they trust us. We’ve already helped them with one of the biggest (if not the biggest) investments of their lives, we guided them through the mortgage process, the vagaries of the insurance market, and they continue to come to us for advice on vendors, restaurants, and whether to remodel, refinance or sell.
But how can we advise clients on real estate when there are so many uncertainties flying around? By swatting them down, one small swipe at a time. Here are five tips to help.
Start big, go small
You don’t have to be an expert economist to sound like one. Break down economic information into digestible bites for your clients, starting with the national housing statistics from NAR, then move down to your state and county figures (available from your state Association) and finally narrow down to your local market (MLS).
Whether you are working with buyers or sellers, the conversation can go something like this: “Nationally, we’re looking at an average increase of X percent for days on market. On the state level, it’s actually lower at Y percent, but for our area, we’ve seen an even smaller shift of Z percent over the past three months, which means [insert your take here].”
If you’re already framing things this way, bravo. But if you’re reading this thinking “My clients don’t care about the national averages,” remember that a lot of agenting is perception. By going from national to local, you’re showing your clients that you consider a broad range of statistics to shape your view of the local market — something your competitors might not do, which bumps up your credibility.
Understand what’s affecting the numbers
If you normally check your email during the economic forecast of your local or state meetings, it’s time to pay attention. National and local forecasts are not always correct; however, their broad overview not only helps you frame economic factors for your clients, but it also gives you a basis to compare figures.
Not a numbers person? You don’t need to bench 250 pounds of economics; you can get results from doing 10-pound curls through entertaining and informative podcasts like Marketplace or watching the UCLA Anderson School forecast, which are incredibly digestible.
You don’t need to do it alone (and you shouldn’t)
If you are a residential agent, talk to residential income agents, or (shudder) commercial agents (I promise, they may be gruff, but offer to buy them a coffee and they soften up). Get their perspectives on the market, and find out what their clients are saying. Don’t stop there; talk to agents from different parts of the state, other states and even other parts of the country. Learn how they’re having these conversations with their clients and adapt what you like to make it effective for your clients.
And don’t just listen to groups — individuals are often influenced by groupthink and are more apt to share what they are really feeling in a one-on-one conversation, as evinced by this short and interesting video.
Don’t be afraid to say ‘I don’t know’
For whatever reason, so many agents hate saying “I don’t know,” and I have to admit I don’t know why. Quick question: I just said “I don’t know.” Do you have a lower opinion of me?
Ask your eye doctor what that weird mole on your back is, and they’ll probably say, “I don’t know.” (They may also say, “Please don’t do this in public.”) That said, they’ll probably follow up with, “Here’s the name of a specialist who will know.”
We say “I don’t know” all the time when it comes to a question about plumbing, electric and HVAC systems, but for some reason, when it comes to questions about the market, the reflex is to give an (often uninformed) answer. Maybe we’re afraid they’ll talk to another agent … who can also give them an uninformed answer. Whatever the reason, stop!
Learn to channel your inner doctor and say, “I don’t know, but let’s call X and see what they’re hearing.” Develop a broad range of experts: lenders, attorneys, CPAs, heck, even other agents. Swap information, learn from their expertise and demonstrate your expertise, and soon enough, you’ll be viewed as an expert. (Oh, and by the way, get that mole looked at.)
You don’t need to have all the answers, but you need to be present
Our clients trust us. There’s a lot of uncertainty these days from seismic shifts in how our government works, to civil unrest, to natural disasters, to international conflicts. We don’t have any say, sway or impact over these things, but “under all is the land.” And your clients are looking to you to help them make sense of what’s happening, not just with the market, but with their home.
Your clients don’t need you to have all the answers; they just need to know that you’re there for them and that you’re willing (and able) to help them navigate these rough seas. Your clients need to feel like you’re all in on this journey with them, and you need to be ready for the task.
Spencer Krull is a managing broker with Side, and also works as a real estate expert witness and consultant for attorneys.
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There’s the story, and then there’s the story behind the story.
The headlines read “National Association of Realtors overturns ‘no-commingling’ rule.” That sounds like a big story — an influential national organization just changed a policy that could affect millions of agents and consumers. But looking at it more closely, the headline might as well have read “NAR changes policy in attempt to show relevance.”
The story behind this story is actually the “portal war” playing out between Zillow, Compass and Redfin, along with NAR’s attempt to be a relevant player in that fight. Think of it like a monster movie where Godzilla, King Kong and Mothra (Zillow, Compass and Redfin) are going at it, knocking down buildings, setting things on fire … meanwhile, NAR is the reporter in the foreground saying, “Tokyo is burning.”
Sure, the reporter is an important character to explain what’s going on, but that reporter isn’t making it onto the movie poster.
NAR’s optional “No-Commingling Rule” (NCR) prohibited MLS listings from being displayed alongside non-MLS listings. Now, forgive me if I’m being cynical, but it’s pretty clear the purpose of this “segregation policy” was to keep MLSs and listing platforms from cannibalizing and chipping away at the dominance of the Realtor-controlled listings.
Keep in mind, the policy was never “mandatory,” it was “optional,” which hints at the behind-the-scenes power struggles back in 2005 when the policy was implemented, which set the stage for today’s portal wars some 20 years later.
Back in the early 2000s, the internet was still a shiny new object. Most people were connecting to the “World Wide Web” using dial-up modems, pages loaded slowly, graphics were low resolution, most brokerage websites were pretty barebones, and fax machines were still an office mainstay.
(For those of you not old enough to remember uncurling thermal fax paper to make photocopies, so you could drive to a client’s home to get wet signatures with an actual pen … you have no idea of the fun you missed.)
As connections got faster, the MLS provided public access through a client account set up by their agent. Access to listings was still in the control of brokerages and the MLS.
Enter IDX
The Internet Data Exchange protocol was a true game changer, allowing brokerages to set up Virtual Office Websites (VOWs) and eventually allowing individual agents to have MLS search access and listings on their own individual websites … and in some cases, in addition to the IDX fed listings on their websites, brokerages and agents were showcasing off-market/non-MLS listings.
In 2005 the industry was facing an existential dilemma — technology was moving fast, the MLSs faced losing control over their data as brokerages (even small brokerages) posed a threat to their hegemony — and NAR stepped up to level the playing field by limiting consumer choice, if only as an option: “If you want to include non-MLS listings, well, we prefer you didn’t, but if you have to, we’ll be disappointed.”
Enter Zillow
The No-Commingling Rule was implemented just in time for Zillow’s entrance in 2006, which eventually created yet another existential dilemma for brokerages, prompting some brokerages to establish policies regarding syndication and withholding listings. And then Redfin became a bigger player in the industry, and then Zillow became a brokerage, and then the iPhone and apps, and then private listing networks, and then Compass, and then REX and lawsuits, and the DOJ, and then Clear Cooperation Policy and then …
Sorry, I had to sit down because the room started spinning.
Every item on the above list was considered “industry rattling,” “game-changing” and a reason to decry the end of “the brokerage business” as we know it. That’s why news of NAR rescinding the optional “No-Commingling Rule” barely woke me from my afternoon nap.
For the record, NAR had another “major” announcement in March with their head-scratching “Multiple Listing Options for Sellers Policy,” which is yet another optional policy an MLS can choose to adopt or ignore. I hate to admit it, but I don’t fully understand why they announced this policy and what it even does, but a broker friend of mine put it this way: “It allows NAR to stay out of the fray and allows Zillow and Compass to both say they won.” I guess I’m not the only cynic in town.
In 2023, California decriminalized jaywalking. I’m glad it’s now off the books, but I didn’t really notice because, as a born and bred New Yorker, I was jaywalking anyway. And I don’t think I’d notice that NAR repealed the optional NCR if no one told me because it didn’t change how I did my job.
Whether siding with Compass and its three phase listing strategy, or rooting for Zillow and the hard line it’s taking against the three phase listing strategy, at the end of the day, the agents I work with have their shoulders to the wheel helping their clients buy and sell homes, regardless of what is thrown their way.
NAR exists to protect the industry, and that industry has changed — and so is what NAR is protecting. In light of the “settlement,” possible Department of Justice intervention, and the portal wars happening all around us, NAR needs to do more than announce (what I think are) meaningless policy changes.
Instead of manning (and womanning) the walls of the castle to fend off the [insert existential threat du jour here], it’s time for the industry to truly examine the role of the MLS in the decoupled commission universe, and how we, as an industry, can truly better serve the public. To that end, I applaud NAR’s exploration of refreshing the Code of Ethics, but don’t get me started on SOP 10-5!
To repeal a rule that was only optional to begin with is not a repeal of anything, and based on its timing, it comes off as a desperate play for attention. So, Godzilla, King Kong and Mothra might be battling it out. And Tokyo might be burning … but agents have houses to sell.
Spencer Krull is a managing broker with Side, and also works as a real estate expert witness and consultant for attorneys.
Since the NAR commission suit settlement, buyer agents have faced new rules, new documents and a new normal. This month, Inman drills down on Today’s Buyers Agent with the fresh marketing strategies, skills and tools buyer agents are using to prosper in changing times.
Imagine if we licensed drivers the same way we license real estate agents; our roads would look like a bumper car track.
I remember my first day as a real estate agent, wearing my jacket and tie, sitting at my desk, ready to get to work and thinking, “I have no idea what I am doing.”
To clarify, I had learned the basics of prospecting; I had worked on my scripts for hitting the phones or knocking on doors, and even sitting open houses if another agent would give me the chance. I knew the basics of getting clients. What I didn’t know anything about, however, was what I was supposed to do in case someone answered a door that I knocked on and said, “I’d like to write an offer on the house across the street.”
Practical training is a must
Though I’m a licensed broker in six states, with over 20 years of experience, I still had that same lost feeling each and every time I received a new license. I place the blame for agents’ lack of readiness squarely on most states’ licensing courses and educational requirements.
As an illustration, let’s compare the steps necessary to get a real estate license with getting a driver’s license (something with which I have white-knuckled familiarity thanks to my 16-year-old).
Driver’s license training is “skills-focused.” The coursework focuses on the useful, practical knowledge that a driver will use every day — things like what to do at a stop sign, how and when to signal, and whether or not one can cross a double yellow line to pull into a driveway or parking lot (something that sparks an argument almost every time I go to Costco).
Real estate license training is much more scattered. For instance, instead of simply teaching that discrimination is illegal and providing a list of protected classes and people, real estate training and testing is equally focused on things like when different civil and housing rights acts were passed.
When a HUD tester shows up asking if the owner will rent to a person of color, I think it’s more important that an agent knows to say, “Of course,” and not “The first civil rights act was passed in 1866, but was undermined by the 1896 Supreme Court decision in Plessy v. Ferguson … ”
History is great, I love history, but when approaching a stop sign, I thank the DMV that my son knows to apply the brakes instead of looking at me and saying, “In 1954, the Federal Manual on Uniform Traffic Control Devices required that all stop signs must be red and octagonal.” (I would hazard a guess my insurance company is thankful, as well.)
We need traditional blackbelts
A karate instructor once told me that traditionally, students didn’t go out and buy darker and darker belt colors as their skills grew; rather, they wore the same belt, which started off white and darkened over time with experience. When it comes to real estate, it seems many agents “buy” a black belt as soon as they get their license, without having or seeking any practical experience.
On the other hand, the aspiring driver gets their white belt when they pass the written test and starts to “darken their belt” with practical experience behind the wheel (with an experienced driver ready to grab the wheel one seat over).
It’s not until the novice driver has attained a degree of road competency that they are allowed to take a practical driving test, and upon passing, get to give their parents mini heart attacks any time they hear anything that vaguely sounds like metal hitting metal.
Which licensee is better prepared?
Who’s picking up the slack on training?
That lack of actual skills-based education in real estate puts the burden of training on brokerages, and not all brokerages are created equal or up to the task. A friend from my licensing class went to a brokerage that provided her a mentor who drilled her on paperwork and procedures through practice listings, offers, counteroffers and repair requests.
My first brokerage paired me with a mentor who hadn’t done a deal in quite a few years and was more concerned with whether the coffee was fresh or from that morning, instead of whether contingencies were removed actively or passively. (Oh, and she got that one wrong on my first deal, and I was nearly sued.)
Inexperienced karate students and drivers can cause serious physical damage; inexperienced agents can cause serious financial and even civil damages that affect their clients, themselves and their brokerages.
Before getting a license, plumbers and electricians are required to undergo vocational training and years of apprenticeship; I am grateful for this system whenever I flush a toilet or turn on a light switch (especially if the light switch is in my bathroom).
With so much at stake for a client buying or selling a home — something which is, more often than not, the largest and most significant financial transaction of their lives — I think the public deserves better than “off-the-shelf blackbelts.”
If departments of real estate across the country were serious about their mission to protect the public, they would align licensing education and certification with actual practice in the industry. There would be tests on skills or mandated apprenticeships, and continuing education for renewal would reinforce these skills.
But for now, I guess we’ll settle for tests that require an agent to know how many square feet are in an acre (43,560), or what year the Americans with Disabilities Act was passed (1990), instead of knowing how to write a counteroffer properly.
Writer’s note: The opinions in this article represent the author’s opinions and do not reflect those of Side.
Spencer Krull is a managing broker with Side, and also works as a real estate expert witness and consultant for attorneys.
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My love-hate relationship with dual agency began about 10 years ago on a flight from New York to LA. The conversation with the guy in the seat next to me turned to what we each did for a living.
When he said he was a real estate attorney, I thought maybe I’d found a good source of leads and asked him if he represented investors or sellers. “I represent clients to sue brokerages when they mess up,” he said. “What do you do?”
I squirmed in my seat. “I’m the Broker of Record for a brokerage.”
“Do you allow dual agency?”
“Yes.”
He laughed. “Keep doing dual agency; it’s how I’m putting my kids through college.” This was going to be a long flight.
Before going any further, let’s define the “dual agency” he was talking about: It’s the one in which the buyer and seller are represented by the same individual agent, or even members on the same team.
Dual agency and fiduciary duty
I have no problem with the basic form of dual agency in which agents from the same brokerage represent the buyer and seller in a transaction; in this age of monolithic brokerages, it would be unrealistic and impractical even to suggest ending this form of dual agency.
But when a single agent or even a single team represents both sides, it strains the ability of an agent to provide even the barest level of fiduciary duty owed to each client.
In the aftermath of the National Association of Realtors commission lawsuit settlement, there was a lot of talk about dual agency. At that time, Jim Dalrymple II broke down the legal landscape surrounding the practice:
The U.S. is a patchwork of differing laws when it comes to dual agency. According to ARELLO [the Association of Real Estate License Law Officials], most states do allow dual agency, albeit while requiring the parties involved to sign a written agreement. A handful of states allow dual agency with no agreement.
A total of nine states prohibit dual agency. The first to do so was Texas, in 1993, and the most recent was Maryland, in 2016, according to ARELLO.
In practical terms, if you’ve ever double-ended a deal, you know how difficult it is to maintain confidentiality when you know what the seller would take and what the buyer can spend. It’s even harder to maintain neutrality when a deal gets contentious and you need to strategize opposing goals, advising each client as if you didn’t know what the other side truly wants.
It’s like playing chess against yourself; one can’t forget what the other side plans by simply moving to the other side of the board. (In a cartoon world, this selective amnesia could be induced with a well-placed anvil to the head, but in real life, the resulting CAT scans and MRIs would be cost-prohibitive.)
Just as parents are not supposed to favor one child over another, dual agents are not supposed to favor one client over another. And if at times a parent finds it hard to maintain impartiality, how much more so for an agent and their client?
Some brokerages solve this conundrum by allowing different team members to represent each side. This is certainly better than having only one agent, but even when agents are from different companies, things can get a bit fuzzy with confidentiality to “grease the wheels” to move a deal along.
Yes, I’ve seen some teams handle this version of dual agency exceptionally well, with written policies of a “Chinese Wall” and guidelines on when to bring in the broker or manager. However, more often than not, I’ve witnessed teams do a pretty terrible job by breaching confidentiality, and even worse, I’ve seen both sides team up against the buyer or seller. So much for our duty to always act in our clients’ best interests.
Agents like dual agency because it leads to higher commissions. Brokerages like dual agency because it leads to higher company dollars. Win-win, right?
I’m sure that the companies pushing the value of private networks are doing so because they sincerely believe it serves the best interests of the client. That it also increases the likelihood that those agents will double-end a deal is a very fortunate, unintentional side effect. (Did I mention that these networks serve the best interest of the client?)
In all honesty
Let’s get real — private networks are not going away anytime soon; the companies pushing them have too much influence. But, what if the National Association of Realtors (NAR) instituted a policy banning “single agent” and “same team” dual agency?
Sure, it would be unpopular with many brokerages, but NAR didn’t mind being unpopular when they sprung the Clear Cooperation Policy (CCP) on us. At least in this case, NAR can make the very credible argument that such a ban would truly be in the best interests of the general public.
Plus, if states were to take a long, hard look at dual agency and were honest about whether or not it served the public good, I think you’d see the dual agency reins being pulled in pretty tight.
Tightly restricting dual agency won’t harm business. Of the states that restrict some forms of dual agency, Texas does an exemplary job by having the broker assign an agent to each side, with the broker serving as an intermediary or referee.
The result is dual agency in which both the buyer and seller are fully and equally represented, and an agent’s self-interest (at least in terms of dual agency) is not a part of the mix.
As for the private networks and portals, restricting dual agency might take away the incentive to keep listings off the multiple listing service (MLS) in the hopes of double-ending a deal. The CCP-MLS-private network debate could possibly fade into the background, freeing the industry to tackle other important issues, such as getting a carve-out from independent contractor laws to allow mandatory agent training. (A broker can dream, can’t he?)
To be perfectly transparent, it’s in my own self-interest to allow and even encourage agents to double-end deals. Huh?
See, I exchanged contact information with that attorney on the flight, and a few months later, he called to get my opinion on a file. And so began my career as an expert witness and consultant (mostly in brokerage defense).
Every time I get a new case file, the first thing I check for is dual agency. And I’ve found that a lot of the dual agency files have some serious issues.
That’s when I lean back in my chair, look at the photo of my two children and remember what that attorney said: “Keep doing dual agency; it’s how I’m putting my kids through college.”
Writer’s note:The opinions in this article represent the author’s opinions and do not reflect those of Side.
Spencer Krull is a Managing Broker with Side, and also works as a real estate Expert Witness and Consultant for attorneys.
