The recent legal settlements involving the National Association of Realtors (NAR) and several major real estate brokerages have sent ripples through the industry, prompting many real estate professionals to reevaluate their practices. Central to these legal challenges is the issue of transparency, particularly in how commissions and other transaction details are disclosed to buyers and sellers.
A poll of consumers in April, one month after the announcement of the NAR settlement, indicated that an enormous number of consumers had heard about the settlement and were aware of the changes coming, especially the fact that Realtors will have to negotiate commissions transparently. By June, 70% of agents surveyed said that they’d had clients ask them about it.
Consumers also want transparency in the offer process. It’s self-evident to them that making all aspects of a real estate sale transparent will benefit both the buyer and the seller, and that the traditional blind bidding process needs to go.
In every other aspect of a consumer’s life—whether buying a car, travel, financial services, telemedicine or taking an Uber—they can leverage the efficiencies of digital platforms to buy products and services with total transparency. It’s essential to recognize that consumers expect to have access to all the information they need to make informed decisions, and they are more likely to work with professionals who provide that information willingly. Transparency isn’t just a regulatory requirement — it’s a critical component of a successful and ethical real estate practice.
For the buyer, blind bidding is not only extremely frustrating, but it also often precludes the most qualified and motivated buyer from winning. The buyer is even more frustrated when, still in the market for a home, they see that the property they lost settled for a price that they were ready, willing and able to substantially exceed. When they see that it sold for only a couple of thousand dollars above their blind offer, a common refrain to their agent is “Why didn’t the listing agent come back to us and ask us to beat the winning offer? We would have gone thousands higher if we only knew what we needed to do.”
But while it’s frustrating for buyers, it’s even worse for sellers. If buyers are guessing, how can sellers know that they got the best price and terms? Buyers eventually find another home to purchase, but sellers only have one opportunity to maximize the return on the sale of their home. Transparency benefits buyers, sellers, and agents on both sides of the transaction: Transparency means total trust and fairness — the more transparent we are the better the perception of our industry.
In addition, transparency makes for more efficient transactions. As the industry continues to evolve, tools and platforms that facilitate transparent transactions will become increasingly valuable. For real estate professionals looking to thrive in this new environment, adopting these tools is not just advisable—it’s essential. By leveraging platforms that make every aspect of the transaction visible to all parties, agents can ensure they remain compliant with the new regulations while also providing the level of service and transparency that today’s consumers demand.
In this context, innovative solutions that enhance transparency, like those that allow all participants to see every detail of every offer, including contingencies and commissions, will be particularly important. These platforms represent the future of real estate transactions, offering a model that aligns perfectly with the industry’s shift toward greater openness and accountability.
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