by Matt Carter | Jul 31, 2024 | Industry, News Feed
A new draft seller contract that eXp Realty is distributing to its brokers and agents is largely consistent with a newly issued set of criteria from the Consumer Federation of America, the watchdog group said this week.
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With just over two weeks to go until a key deadline, a consumer advocacy group has unveiled a new set of guidelines for seller contracts intended to help protect consumers and ensure full compliance with the NAR settlement requirements.
The Consumer Federation of America (CFA) on Wednesday released its proposed criteria for seller contracts, which are largely consistent with guidance the group issued on buyer contracts earlier this month.
The organization also provided to Inman a copy of an eXp Realty seller contract that is currently being distributed to eXp brokers and agents. This contract is an example of a document that the CFA says is largely consistent with its criteria.
“These criteria will assist regulators, consumer groups, and the industry itself in evaluating the fairness of new seller contracts,” CFA senior fellow Stephen Brobeck said in a statement. “Recent CFA research has shown that these contracts have the potential to harm or help home sellers depending on their clarity and content.”
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Among other provisions, the eXp seller contract includes language that spells out explicitly that the buyer may request a seller concession that would cover a variety of costs, including the “buyer’s broker fee.” It also states that all seller concessions are negotiable, and are not required or fixed by law.
CFA described the eXp contract as “understandable and fair to consumers.” However, the eXp document did appear to depart from some of the CFA standards in a few meaningful ways.
While CFA proposes the seller’s commission “should always be stated as a dollar figure or hourly rate,” the eXp contract provides options to define the seller’s commission in terms of a dollar value, a percentage of the sale price, or an empty “other” field that can be filled in by the broker or client.
Read the CFA’s full list of criteria for evaluating brokerage homeseller contract forms below.
Form: Is the contract readable and understandable?
- Length: The contract should not include marginal provisions designed solely to protect the interest of the broker, and the agency agreement should be in a separate document.
- Type size: Most courts recommend 12-point. Any size smaller will be difficult for some people to read.
- Organization: The most important information, including compensation arrangements, should be at the beginning of the document and clearly labeled.
- Plain language: The contract should be written so that it can be understood by homesellers. It should not contain words and language that can be understood only by lawyers.
Content: Is the content of the contract fair to home sellers?
- Length of contract: The contract should clearly state when it will end.
- Termination of contract: Brokers have the right to terminate contracts at any time; sellers should have the same right with no fees charged.
- Compensation, continuing obligation: A seller can be obligated to compensate a broker who showed a home that was purchased after termination of the contract. But this obligation should last for a reasonable period of time, no more than 60 days.
- Compensation, disclosure: The contract should state prominently that the broker fee is not set by law and is fully negotiable.
- Compensation, commission: The listing agent’s commission should be completely separate from any concession to a buyer that may include funds used to compensate the buyer’s agent. This commission should always be stated as a dollar figure or hourly rate.
- Compensation, fees: In a home sale, any additional fees should be deducted from the commission.
- Compensation, when owed: Only upon successful closing of the sale.
- Seller concessions: Concessions should never include a dollar figure representing buyer agent compensation. Instead, the contract should simply indicate whether the seller is prepared to consider negotiating concessions.
- Unrepresented buyers: Unrepresented buyers must be shown the property. The contract can include a provision for a modest administrative fee (expressed in dollars) if a buyer is unrepresented and does not cover this cost. This provision should be initialed by the seller.
- Buyer offers: The contract should state that all written offers from buyers will be shown to and decided on by the seller.
- Dual agency: Dual agency should not be pre-approved by the contract. If a dual agency situation arises—e.g., a buyer wants to purchase a listing of the seller’s broker—written seller approval should be secured at this point.
- Seller remedies: There should be no limits on seller remedies. Sellers should not be required to submit first to mediation or arbitration to pursue a grievance.
Read the full eXp seller contract language at this link.
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by Brad Inman | Jul 31, 2024 | Industry, News Feed
Delian Asparouhov, a partner at Founders Fund, talked on Wednesday about his plans to manufacture drugs in space and urged real estate agents to lean into tech.
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When Delian Asparouhov was just a boy, his parents moved from Bulgaria to the U.S. in the wake of the Soviet Union’s collapse. The experience, Asparouhov said Wednesday on stage at Inman Connect Las Vegas, made him a believer in capitalism and the importance of commercial enterprise.
Growing up in the U.S., Asparouhov — who today is a partner at venture capital firm Founders Fund — also became a fan of science fiction and aerospace — so much so that, when he reached adulthood, he began looking for ways to work in the industry. Asparouhov specifically wanted to find ways to make money in space, but, he recalled to the packed Connect ballroom, the technology just didn’t exist to make commerce viable miles above the earth’s surface.
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Then something changed. Asparouhov said that in 2018 and 2019, Elon Musk’s Space X began deploying reusable rockets. He compared the development to the advent of the railroad, which once enabled industrialists like the Rockefellers to ship oil with new efficiency.
“Today, in 2024, these types of rockets launch and land every 36 hours,” Asparouhov said of Space X’s technology. “Somebody clearly built the railroads to space; somebody just had to figure out what the oil was going to be.”
Delian Asparouhov on stage at Inman Connect Wednesday. Credit: AJ Canaria Creative Services
Over the ensuing years, Asparouhov focused on ways to harness that new technology and identify the “oil” to be won by working in space. He eventually hit upon pharmaceutical manufacturing. The idea, he explained, is that without gravity, drug companies can do much more precise chemistry, to the point that at least one popular drug could be converted from an IV drip to an at-home syringe system.
The idea could be revolutionary, but it also sounds ludicrous. Manufacturing drugs in space?
But, it turns out, Asparouhov has apparently already done it. While on stage, he showed the audience pictures of an object that looked like a Starlink satellite. However, he added, it was in fact a capsule that created drugs while in orbit and returned this last February.
“The worst environment they saw,” he joked about the drugs’ incredible journey, “was the UPS truck in Houston.”
Though Asparouhov’s efforts to create an orbital drug manufacturing business are unrelated to real estate, he has invested in real estate startups and said that similar principles apply across industries. The point of his presentation, in other words, was that new technologies have the ability to revolutionize industries.
In space, that new technology was reusable rockets. A century ago, it was the railroads. And today, Asparouhov argued, it could be artificial intelligence.
“It’s as fundamental as the steam engine,” Asparouhov argued.
He consequently urged real estate professionals to lean into and understand new technology, and to be prepared for the changes it might bring.
“There will be fewer agents in 10 years than there are today,” he said, “but almost certainly those agents will be able to handle more client volume.”
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by Michael Zaransky | Jul 31, 2024 | Industry, News Feed
In his first Inman Connect appearance since 2021, Zillow CEO Rich Barton discussed accelerating tech innovation and the next evolution of the residential portal experience.
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When Zillow launched in 2006, the site looked nothing like it does today.
There were no listings, no interactive videos and floor plans, or photos that homebuyers and daydreamers could scroll through for hours on end. All the site offered was a comprehensive list of transaction histories that, with some algorithmic magic, turned into the Zestimate — the industry’s first automated valuation model (AVM).
“[It was an] unbelievably provocative, interesting feature that had not existed before,” Zillow CEO Rich Barton recalled Wednesday at Inman Connect Las Vegas. “That Zestimate fueled all kinds of voyeurism and fantasies. It was incredibly entertaining, which is one of the reasons we were mobbed.”
“But it turns out that it is also a critical piece of marketplace information for anyone in the process of moving,” he added. It was this kind of intermingling, this kind of yin and yang of entertainment and practicality that helped create what the Zillow brand is today: this big trusted consumer brand that stands for consumer empowerment and customer advocacy.”
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Barton said the focus on consumer empowerment and advocacy is the key to success for Zillow and the entire industry as it strives to make the dream of a quick, frictionless homebuying experience a reality.
Although the atmospheric rise of artificial intelligence has stoked fear, Barton said focusing on consumer empowerment will ensure that agents will be able to accelerate through change rather than be consumed by it.
“We are accelerating, and that queasiness we’re all feeling is natural,” he said, recalling a recent experience he had racing at 140 mph on a closed BMW track. “As a species, we haven’t really had time to catch our breath and process the last lap around the track, which was the smartphone lap. And now we’re being told to accelerate on the next lap. Here comes AI, [and] around we go again.”
Barton said it’s time to accelerate past the “Portal 1.0 experience” and begin bringing order to a complicated “multi-party, multi-partner, multistage” transaction process by investing in technology, partnering with competitors, and staying in tune with what consumers and agents need to have a positive — even joyful — experience.
“You all may not know this, but less than half of our company’s revenue now comes from buyers agents, lead generation or original business model,” he said. “Our growth and opportunity as a company now comes from investing in this array of digital workflow, tools and technologies for the industry as a whole.”
“Showingtime has been a big success for us. Follow-up Boss, Listing Showcase dotloop, Aryeo … we’ve been putting together these products, building and putting together these products for quite some time,” he added. “We did not build, invest in and integrate these products to keep them inside the walled garden. We did it to make them broadly available and to power your businesses.”
Barton said the next iteration of residential portals will focus on coordination, integration and digitization — the three steps to making buying a home as easy as buying a latte.
“It’s not unlike Brad Inman’s latte transaction [keynote] from 2013. Who remembers that?” he said. “His vision was organizing this mess and saying moving should be as easy as buying a latte. Well, we’re getting there. We’re getting there. It’s taking a while, but we’re getting there.”
Although tech is a key component of bringing Inman’s latte vision to life, Zillow said the plan doesn’t work without people — tech developers and researchers, C-Suite leaders and agent partners.
“This would not be possible if we didn’t have great agent partners,” he said. “It would not be possible if we didn’t prioritize them, and it would not be possible if we weren’t helping drive real business for them.”
“As we accelerate faster to the future, I am really pleased that we are pitching a really big tent and inviting everyone underneath,” he added. “We do not believe this is a zero-sum game. We digitize the industry, and we all win. You grow, we grow, and our customers get what they want.”
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by Inman Content Studio | Jul 31, 2024 | Industry, News Feed
CHICAGO (August 1, 2024) – The National Association of Realtors® today announced the roster of its 2025 Leadership Academy class. Twenty Realtors® from across the country have been chosen to participate in the 10-month program, which will prepare emerging state and local volunteers for future leadership positions at NAR.
“The Leadership Academy develops and prepares upcoming leaders to help shape the real estate landscape at the local, state and national levels,” said 2024 NAR President Kevin Sears, broker-associate of Sears Real Estate/Lamacchia Realty in Springfield, Massachusetts. “The diverse backgrounds and qualifications of this class are evidence of NAR’s commitment to inclusive growth, representation and professional development.”
The 20 Realtors® selected will participate in a diverse range of educational experiences as they join a nationwide community of volunteer leaders. During the 10-month journey, participants will learn the history, structure and inner workings of NAR while gaining key insights designed to prepare them to serve in prominent leadership positions at all levels of the association.
The 2025 NAR Leadership Academy roster is as follows:
- James Britto, California
- Nakia Brooks, Georgia
- Donna Cade, Georgia
- Omar Capellan, Florida
- William Curtis, Texas
- Esteban Flores, Texas
- Jennifer Flynn, New York
- Danielle Fontes, California
- Jennifer Higgins, California
- Jessica Kish, Indiana
- Betsy Laughlin, Colorado
- Caron Ling, Hawaii
- Tyson Lynch, Massachusetts
- Heather Mull, Virginia
- Lee Porter, Minnesota
- Jennifer Swendiman, Kentucky
- Jenni Viger, Georgia
- Tiea Vincent, Florida
- Kara Wisely, Florida
- Soo Yu, New Jersey
The program will begin in January 2025 and culminate in November 2025 at NAR NXT, The REALTOR® Experience in Houston, Texas. For more information about NAR’s Leadership Academy, including individual session summaries and resources for prospective 2026 applicants, visit nar.realtor/leadershipacademy. The application period for the 2026 class runs from November 4, 2024, through February 13, 2025.
About the National Association of Realtors®
The National Association of Realtors® is America’s largest trade association, representing 1.5 million members involved in all aspects of the residential and commercial real estate industries. The term Realtor® is a registered collective membership mark that identifies a real estate professional who is a member of the National Association of Realtors® and subscribes to its strict Code of Ethics.
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by Stephen Brobeck | Jul 31, 2024 | Industry, News Feed
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Brad Inman revealed that he’s embraced longevity in the past year, even enlisting the assistance of a Chinese healer.
One of Inman’s new morning routines includes eating more fruits and vegetables — and cockadoodledoo-ing at the sun, like a rooster.
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As he demonstrated, to the audience at Inman Connect Las Vegas on Wednesday, he encouraged others to try it — but without much success, based on the quiet response.
Regardless of that sleepy reaction, Inman was excited to translate that same kind of morning energy to navigating the industry’s biggest hurdles today — and hoped the audience would join him for the ride.
“I’m going to try to be honest about what I see happening, but I also want to give you the hope, excitement and energy that I have when we get through this perfect storm,” Inman said.
Inman noted that, even though many of the factors plaguing the industry right now — high mortgage rates, low inventory, commission lawsuits, NAR leadership disruptions — are largely out of agents’ control, many may still have the tendency right now to be hard on themselves about navigating this “perfect storm.”
Inman guided the audience to pat themselves on the back for surviving the recent industry difficulties. This time, many took him up on the opportunity.
“You deserve it!” Inman declared.
“Life isn’t always perfect, even for those of us who are perpetually optimistic.”
Inman detailed how he went through his own perfect storm recently, facing a trifecta of setbacks, including some bad business news, the deaths of some close friends and dealing with a new health issue.
“At a moment when I thought everything was perfect, nothing would go wrong, I had foolishly persuaded myself, ‘this is so great,’” Inman told the audience.
One of Inman’s friends who had passed away was Jennifer Berman, a name well-known within the industry for her leadership, particularly in the luxury space, and her participation at Inman Connect events over the years.
“She was a force. She was a positive force, no matter the circumstances,” Inman said. “So let’s give a round of applause for all the generous contributions Jennifer Berman gave to the real estate industry.”
The three setbacks, though unpleasant, helped Inman learn how to tackle such unexpected challenges in the future. And he encouraged agents in the audience to bring these tactics to the challenges they’re facing in the industry now.
With his business setback, Inman was decisive. When he faced an unexpected health problem, he embraced self-care. And when his friends passed away suddenly, he took the time to be present — something he had neglected as a younger man.
“With my friends dying, I did something I didn’t do when I was younger,” Inman said. “I wasn’t present … This time, I leaned into my grief, and I really tried hard to be present.”
But perfect storms have touched down in other parts of the world today too, Inman noted, pointing to the recent volatility in U.S. politics.
“In three-and-a-half weeks, we’ve had three historic events happen in the political world,” Inman said.
Those events included the epic debate fail between President Biden and former President Trump, the assassination attempt on former President Trump and the decision by President Biden to pull out of the presidential race.
“So we are stricken with anxiety and it’s very, very difficult,” Inman said. “Someone was saying last night at dinner that it’s affecting homebuyers’ confidence to even buy a house.”
In real estate, the perfect storm that’s been brewing for months is comprised of a frozen market, driven by high rates, low supply and a lack of affordability; the class action commission lawsuits; and a lack of leadership.
“We had the commission lawsuits, and we also had, at a time when most needed, a lack of leadership,” Inman said. “The leaders that we may have depended on to guide us through were all being sued. And the lawyers put duct tape on all our CEOs. And then the mothership, the National Association of Realtors, had a series of scandals, and all kinds of changes in leadership.”
But Inman also noted that all of these challenges seem to be moving in the right direction. Rates show signs of dropping in the next few years, inventory is finally starting to grow with the construction of more homes and new zoning laws in select cities that allow for ADUs are opening up more affordable housing.
But Inman encouraged those in the audience and the industry at large to put their thinking caps on to come up with even more solutions.
“We have so many underutilized structures,” Inman said. “What if we devised a system to get all that land, all those buildings and just gave it to the public, and said ‘all you have to do is fix this house, clean it up, and go to town.’ What we need now is a huge initiative.”
“We have thought big in the past when it comes to affordable housing; we can do it again,” he added. “Let’s get NAR straightened out so that we can [use] their force to get this done.”
Inman also expressed admiration for Kevin Sears, NAR’s new president, who spoke at ICLV on Tuesday.
“Let’s talk about leadership,” Inman said. “I don’t know about you, but that Kevin Sears was impressive. He was here. He was present. I’ve gotten up here too many times and trashed NAR. I am rooting for the new CEO (who came from the newspaper business, which I think is great) and I am rooting for Kevin.”
On Thursday, Inman noted, Independent presidential candidate Robert F. Kennedy Jr. will speak at ICLV about real estate policy and more. Inman teased that Kennedy will lay out his own housing plan and that everyone in the audience should be thinking about their own ideas for creating housing solutions.
“Think big [and] act big,” Inman encouraged. “Because the goddamn problem is very big.”
Inman went on to share how he believes the class action lawsuits are going to result in the commission pie being less per agent. But, because the costs for consumers are going to be less as well, Inman surmised that that will translate into more transactions — and less experienced or eager agents will also likely drop out of the industry.
“For the eager, the opportunistic, the hardworking, the clever, there’s going to be a way to make even more money as a real estate agent,” he said.
The innovation to come out of all these challenges will be the “biggest win” for the industry, Inman added. And even though he now calls the portal wars the “potty wars,” he believes the competition between big players like Zillow and Homes.com will just make the process of looking for a home better for the consumer at the end of the day.
When it comes to AI, Inman also said that he expects that it will improve humankind “in ways that we cannot imagine,” and it will ultimately make buying and selling a house easier on consumers and seem like a more positive experience — something that will be good for agents, too.
In closing, Inman expressed his gratitude to the ICLV audience.
“I am just grateful for seeing people like you here, wanting to learn, connecting, and I know you’re going to come through the perfect storm,” he said.
“Lastly, remember, stop beating yourself up.”
“Thank you; I love you.”
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