By Holly Henbest, Realtor
Real estate news has been front and center lately for a variety of topics, so this month I’m going to share my opinions on a few hot topics.
To start, the NAR lawsuit settlement headlines are giving a lot of pause and panic to many about what is going to change about the real estate process going forward. There’s a lot of speculation about how it could impact pricing and how the process will be different if sellers are no longer required to pay for a buyer’s Realtor fees. If the courts approve the settlement, the proposed changes will take place in July. The biggest change is that it won’t be required for sellers to pay the buyer’s Realtor for representation and a co-broke fee will not be advertised in MLS. So, here are my predictions.
First, if I were a gambler, I would bet it all that the settlement will have zero impact on pricing. Is there a potential for sellers to save money on real estate commissions? Yes, but not enough to impact the price of homes. That potential savings would be so slight it will just get absorbed and, in most cases, they will likely still be paying for the commission. The commission just won’t be advertised.
Second, I don’t really think all that much is going to change, but it might be initially messy. This is going to become more cumbersome for Realtors and could potentially result in heightened legal involvement as buyers may opt to navigate purchases without representation, risking inadvertent legal missteps.
My biggest concern is for the protection of first-time buyers and budget-conscious home buyers. If a buyer were to be required to shoulder Realtor fees, a buyer may have induced anxiety, leading one to forgo representation to save money and inadvertently being exposed to financial risks due to inadequate guidance. This isn’t a matter of political stance but rather a personal observation that, in addition, such a trend could widen the wealth gap. This, to me, really seems to be favoring the affluent while further marginalizing those with limited resources. Moreover, institutional/corporate entities, who are already posing a threat to home ownership, could now have another advantage over inexperienced individuals. However, it’s crucial to note that if a buyer does select representation by a Realtor, their Realtor will be tasked to take on the route to solutions.
Thirdly, I foresee a shift towards greater discernment in the hiring and partnering processes within our industry—a development that promises significant benefits. There are over 60,000 Realtors in Arizona, yet a substantial portion of them engage in minimal to negligible transactional activity, often hovering around zero to just one deal per year. The accessibility of entry in our field remains notably low. You can take some classes, take some tests, pay some fees and you’re licensed. The NAR lawsuit settlement may present an opportune moment for a paradigm shift, one where we can raise the bar on professionalism within our ranks. Those Realtors with substantial experience in adeptly representing clients and navigating complex challenges will undoubtedly thrive. Conversely, individuals who entered the profession with aspirations fueled by televised glamour, akin to the allure of shows like “Selling Sunset” and “Million Dollar Listing,” may confront the sobering reality that real estate is a business demanding serious commitment rather than a mere pastime.
There is still a lot to unfold with regard to how changes will be implemented, so stay tuned and if you have any questions, please reach out to me with any questions.
Next, let’s talk new home sales. This remains a hot topic because in February, new home sales were up 11% from February 2023 and up 23% from January 2024. New home sales contributed to 23% of the market share of residential home sales in February. Three years ago, new home sales were less than 16% of the market share. We’re seeing a big increase in new home sales market share over the last few years.
We shouldn’t talk real estate without talking about interest rates. For a long time, we had heard that by March 2024, we’d see rates more consistently in the low to mid 6’s or maybe even dipping into the 5’s, but alas we have not. Rates have remained a bit unpredictable, but we’ve all become accustomed to creating solutions with rate buy downs and other means.
I’ve been a Realtor for 18 years now and one thing has remained the same –– nothing stays the same. We’ve dealt with a crashing market, recession, booming market, and everything in between. As the industry evolves so do we, and we keep working harder to develop the best solutions for our clients. If you’re looking to buy or sell, we’d love to talk with you, but more importantly we hope you’ll do your homework and interview the Realtor you’re looking to hire.
We suggest asking the following questions.
1. What is a challenge you’ve faced with a seller and how did you solve it?
2. What is a challenge you’ve faced with a buyer and how did you solve it?
3. What are examples of some of your most difficult sales. Why were they difficult and how did you overcome?
4. When I need to talk to you, will I call your cell phone or your office? Hint: The right answer is cell phone.
5. Roughly how many transactions do you handle per year?
This last question is a tricky one to evaluate. You want someone who does enough consistent business to know they are experienced and savvy, but someone who handles a huge amount of business may have too much on their plate to devote personalized attention to you.
Real estate is an interesting business. It’s no wonder there are so many real estate reality television shows. I’d love to know what topics you’d like to have me discuss here. If you have any suggestions, please email me at [email protected].
Holly has been a Desert Ridge resident since 2000 and has been a Realtor since 2006. She is the leader of The Henbest Team with Realty One Group. Holly is ranked in the top ½ of 1 percent of Realtors in Arizona and is a certified luxury marketing expert. She has been ranked #24 in the Top 50 Realtors by the “Phoenix Business Journal” for the past several years and recognized by “So Scottsdale!” magazine as a Real Estate Superstar for 2019, 2020 and 2021. She’s also been the #1 ranked realtor at Realty One Group/North Scottsdale for the past several years. Learn more at henbest.com.
