Despite multiple class-action antitrust commission lawsuits, increased uncertainty over mortgage rates and low housing inventory, Compass CEO and founder Robert Reffkin says “there has never been a better time to be in real estate than right now.”
Reffkin’s remarks were made on Wednesday on an outdoor stage in San Diego in front of thousands of agents during his firm’s annual Compass RETREAT.
“It’s not an easy market, but I also know this market is your greatest opportunity disguised as a challenge. Good times, like 2021, create bad habits. Bad times create good habits,” Reffkin said.
According to Reffkin, the onset of the COVID-19 pandemic, as well as the frenetic pace of the 2020, 2021, and even early 2022 housing markets, led to a reliance on technologies like Zoom, texting, email and social media for communication, leading transactions. They don’t necessarily strengthen relationships.
“High touch is the unique opportunity of this moment. In an increasingly disconnected world, you need to build trusting, meaningful relationships with your clients. In down markets, the best agents gain market share and there will be thousands of agents this year that have their best year ever,” Reffkin said. “They are all going the sale single thing to grow their business: spending more time with people.”
Reffkin also reminded agents and brokers that the real estate industry is built on trust and that “you can’t build trust virtually.” Looking forward to the challenges facing the real estate industry in the year ahead, Reffkin told agents to focus on connectivity and not productivity.
“The greatest competitive advantage you have at this point in showing your clients that you care more than the competition,” he said.
Reffkin added that this approach will also help agents navigate what many anticipate is further questioning of their value in the wake of the Sitzer/Burnett verdict and the pile up of copycat lawsuits.
“Courts are trying to challenge the commission, the value that you provide,” Reffkin said. “This is nothing new. For decades people have tried to eliminate the agent commission, starting with the internet.”
Despite these daunting challenges, Reffkin sees this time as an opportunity for agents to find ways to better articulate their value to buyers and improve the level of service their provide their homebuyers. Reffkin said one way to do this is to work with buyers who sign exclusive buyer agreements with you as their agent.
“Agents that don’t know how to communicate their value won’t be able to do this and they will leave the business,” Reffkin said. “That great feeling you have when you have five exclusive listings, you are not going to have that great feeling when you have five exclusive buyers. By doing this, you will be forced to sell your value to buyers as much as you do to sellers, which will result in elevating the role of the real estate advisor and empowering you to gain market share.”
Reffkin closed his opening remarks by reminding agents that the housing market is cyclical and the current down market will not last forever.
“I know that it can be scary, that you can feel like you are working twice as hard for half of the pay, but I assure you that after moments of adversity, there are moments of prosperity,” he said.