Real estate agents largely felt prepared to address the changes in business practices that occurred in the National Association of Real Estate Agents (NAR) committee lawsuit settlement agreement, according to the recently published Stephen Summer real estate agent survey 2024.
This is the seventh edition of the private investment bank’s quarterly survey. Responses for the latest edition of the survey were collected from August 9 to 23. The changes to NAR settlement business practices went into effect nationwide on August 17. The report was written and prepared by John Campbell and Jonathan Bass.
Overall, 85% of officers surveyed reported feeling “fully prepared” or “somewhat prepared” for these changes. And 90% of agents at what Stephens calls “traditional” brokerages, including companies like RE/MAX, Everywhere, Keller Williams, Compass And Douglas Elliman – reported that they were fully or somewhat prepared. This compares to 78% of agents at so-called “disruptor” brokers such as eXp Real Estate, The real real estate agency, Understanding Real Estate And HomeSmart.
Overall, less than 4% of officers reported feeling unprepared or completely unfamiliar with the practice changes.
A majority of brokers (82%) reported that their brokers had fully or mostly prepared them for the changes. But again, agents at more traditional firms (86%) reported that their brokers prepared them well, a higher percentage than those at disruptive firms (76%). Only 6% of all agents surveyed reported that their company provided little to no preparation.
The survey results also showed that more and more real estate agents are optimistic about the direction the housing market is heading, which the report’s authors attribute to the cooling of mortgage rates and expectations that the Federal Reserve will cut the benchmark interest rate later this month.
Overall, 9% of agents surveyed said they expect the housing market to “improve significantly” over the next twelve months, an increase of 5 percentage points from the previous quarter. Another 42% of agents expect the market to “improve modestly,” another quarterly improvement of 5 points.
Despite this increased optimism, about 20% of real estate agents say they expect the market to “deteriorate modestly” in the coming year.
In response to the question: “What do you think is the biggest threat to the sector?” 39% of agents at disruptor brokers responded that “more consumers were willing to buy/sell a home without an agent,” while the most common response among agents at traditional firms was an economic recession (25%).
Another popular choice among all brokers was interest rates, but the two cohorts also differed on their views on interest rates Ministry of Justice (DOJ). About 18% of agents at traditional brokerages cited the DOJ’s ability to ban cooperative compensation as the biggest threat, compared to 0% of agents at disruptors.
Furthermore, despite recent headlines, only 5% of all agents surveyed said commission compression was the biggest threat to the industry. Still, around 86% of brokers believe there will be some degree of compression over the next twelve months.
Compared to previous surveys, Stephens reported that commission negotiations appear to be happening more often, with 16% of agents reporting a notable change, an increase of 9 percentage points from the Fall 2023 survey.
“We expected greater consumer engagement on commissions given the widespread and prominent legal battles in the industry to date, but we were surprised to see that it is already above half,” the report said.
In light of the removal of buyer agent compensation offers from the MLSs – and agents’ frustrations with NAR – more than half of those surveyed said they see less value in the MLS system and about 60% said they see less see value in being a NAR member.
When it comes to offering portals, approximately 30% of agents report using at least one site listing or sales agent advertising product, including CoStar‘s Homes.com membership, Zillow‘s List Showcase or Realtor.com‘s List Toolkit. Additionally, 25% of agents who don’t use any of these products say they would be open to using one.
“We believe this response rate could translate into an encouraging potential pipeline for the portals,” the report said. “Each portal has laid out some pretty compelling return on investment math that supports the idea that these products could one day become table stakes (especially if/if competition for listings triggers post-industrial shifts).”
The report notes that while about 25% of agents are “just a sliver of the market,” this translates into a $2 billion annual opportunity. This is based on 25% of NAR’s 1.5 million members (375,000 agents) for $500 per month.
Among agents surveyed, Realtor.com remains the portal of choice among agents, with just over half reporting they recommend Realtor.com to clients. But this is down from about 66% in Stephens’ first quarter survey.
In contrast, Homes.com is gaining popularity among agents, with about 20% of respondents reporting this is the site they recommend to clients, compared to about 2% in the Winter 2023 survey. Despite having the most web traffic, only reported 26% of agents say they recommend customers use Zillow.
