The real estate industry is undergoing a seismic shift, according to expert Michael Bordenaro. The National Association of Realtors has introduced new rules requiring all clients to sign agreements with their real estate agents before engaging in any transactions. Bordenaro predicts that this change will lead to a massive exodus of agents from the business, particularly those who work part-time or are less committed to the profession. “This new requirement is going to weed out the nonprofessionals and make more room for the real pros,” Bordenaro explains.
The Pressure on Part-Time Agents
One of the most significant impacts of this new rule will be on part-time real estate agents, who may not have the time or resources to adjust to these changes. Bordenaro believes that many of these agents, who often juggle real estate with other jobs, will find it difficult to convince clients to sign agreements. “These part-timers won’t want to deal with the hassle of signing agreements and convincing clients they’re worth the money,” he says. The result will likely be a dramatic reduction in the number of agents in the industry.
A Boost for Professionalism
While the new rules may seem burdensome, Bordenaro sees a silver lining for clients. With part-time and less experienced agents likely to exit the industry, those remaining will be full-time professionals who are deeply committed to their work. “Clients will be more inclined to work with professionals they trust, rather than someone who just dabbles in real estate on the side,” Bordenaro notes. This shift could lead to higher standards and better outcomes for clients across the board.
Challenges for High-Commission Agents
The new agreement rules also present a challenge for agents who rely on large commissions to sustain their business. With the shift in how commissions are offered, particularly for buyer’s agents, many may struggle to maintain their income levels. Bordenaro explains, “Agents who need those big paydays to survive are going to have a hard time adapting to these changes, and many will likely leave the business.”
The Decline of Double Commissions
A significant change is the anticipated decline in double commission deals, where agents represent both the buyer and seller in a transaction. Bordenaro predicts that this change will make it harder for listing agents to double dip, as commissions are expected to be lower across the board. “This change will likely lead to lower commissions for listing agents, which could further reduce the number of agents in the industry,” he suggests.
Proving Your Worth
With mandatory agreements now in place, real estate agents will need to prove their worth to clients more than ever before. Bordenaro emphasizes the importance of agents being able to justify their fees and demonstrate their expertise. “This change is going to weed out the losers and make the survivors even better at their jobs,” he asserts. Agents who can clearly explain their value will thrive, while those who can’t will likely struggle.
The Importance of Client Trust
As the new rules take effect, trust between agents and clients will become even more critical. Bordenaro advises clients to be vigilant in choosing an agent who is knowledgeable about these changes and can articulate why they deserve to be paid. “If your agent doesn’t even know about these changes or can’t justify why you should pay them, they shouldn’t be your agent,” he warns. This heightened scrutiny will likely lead to a more discerning client base and, consequently, a more competitive market.
The Impact on New Agents
For new agents entering the market, the changes could present both challenges and opportunities. While the requirement to sign agreements may make it harder for newcomers to attract clients, it also offers a chance to differentiate themselves through professionalism and expertise. Bordenaro believes that new agents who are serious about their careers will need to quickly adapt to these changes and prove their value to potential clients. “New agents will have to hit the ground running and show that they’re worth the investment,” he says.
“We Can’t Afford a House”
People in the comments shared their thoughts: “Just bought a vacation home and let me tell you, the real estate agent did zero… we found the house, set up the viewing and told her what to do during negotiations for the best price. She also was trying to rush us during closing because she had to be sormwhere. Seller had to pay them 7k or 8k for closing. She wasn’t worth $8.”
Another person added: “Who can afford real estate agencies when we can’t afford a house.”
One commenter concluded: “What a mess just makes buying and selling real estate harder.”
The Future of Real Estate
Looking ahead, Bordenaro predicts that the new agreement requirement will lead to a more professional and competitive real estate industry. As weaker agents exit the business, those who remain will need to be at the top of their game to attract and retain clients. “The days of coasting by in this industry are over,” he concludes, adding that the future will favor those who are fully committed to their profession.
A More Professional Real Estate Industry
What do you think? Will the new agreement requirements lead to a more professional real estate industry, or will it simply make it more difficult for newcomers to enter the field? How will the shift in commission structures impact the way real estate transactions are conducted, particularly for first-time homebuyers? As the industry becomes more competitive, what new skills or strategies will real estate agents need to develop to stay ahead?
Explore the full insights by viewing the video on Michael Bordenaro’s YouTube channel here.
