The NAR Lawsuit and How It Will Affect You: Patti Ketcham

[00:00:00] Patti Ketcham: we are going to have to stay flexible, but we've always been flexible. Those of us that have lasted through the years have adapted our services to the needs of our buyers and sellers as the market has changed. And that's going to stay the same.  

[00:00:13] Tracy Hayes: Hey, welcome back to the real estate excellence podcast. I got a special show today. I've got miss Florida real estate, at least in my eyes. I think she is in many miss Patti Ketcham. she's in her office at the Ketcham group out in Tallahassee. She's also obviously on the Florida real estate commission.

[00:01:02] So I reached out to her with. All of this, scuttlebutt about the NAR and the multiple, obviously, lawsuits that are going on. One of them was settled, this week. And we want to talk about how is that going to affect you as a real estate agent, maybe just some tweaks in your business and some of the things that came out of it and, hopefully give you something at the end of this, 

[00:01:21] maybe if you're going to change your business, maybe you're doing your business totally correct and all the recommendations that they're willing to do, but how is it actually going to affect you, as, as time goes on, because NAR claims, and I just was watching a, a video, NAR says they are not going to settle, they're going to take this all the way, as far as they can do, which I, I have a feeling it might end up in the Supreme Court, here.

[00:01:41] so I want to welcome, the one and only Ms. Patti Ketcham to the show. Patti, thanks for coming on. Thank you. 

[00:01:45] Patti Ketcham: Hey Tracy, I'm delighted to hear from you yesterday and got a little bit of sweaty palms on this path We're all walking right now, but it's also kind of exciting. So I'm ready to dive in 

[00:01:58] Tracy Hayes: We're joking before we came on, you know, I said like this is like the the stickers we see, you know Don't drop your hair dryer in the bathtub.

[00:02:06] Don't put your hand under the lawnmower when it's running type of stuff where Some of the, you know, hearing what the actual plaintiffs were claiming, like they didn't know it was negotiable, the, the commission. And, and then obviously they talk about steering, which is a bad word in the lending business.

[00:02:23] we know some, you know, banks have gotten thing, but real estate agents, steering people away because of the commissions they're going to be paid and so forth. tap a little bit on what you know about some of these claims they're making. Cause. And we also know there's also some lawyer, lawyering, I'm going to use that word like strategery, lawyering involved here where they're going to throw a bunch of mud against the wall just to make it look like they got all these, all these things where a lot of it was just like, are you, are you serious?

[00:02:51] You know, type of, claims. 

[00:02:53] Patti Ketcham: Okay. So let me, address something you talked about earlier and then I'll. Go a little bit more to Patti Ketcham's, view on how we got here. All right. So first to address something that, and part of this, I'm like, y'all, I'm. learning this stuff as it goes along. And, I mean, I have a brokerage firm in Tallahassee.

[00:03:13] So, my business model, you know, what am I going to need to do different to, in order to serve my clients? what are I going to need to, what tools am I going to need to get my associates in order for them to serve their clients? But one of the things that some sometimes Tracy, you know, there's like this.

[00:03:35] moment. So I've been teaching a lot. The, NAR course, ABR accredited buyer representative. And so that is deeply entrenched in this buyer brokerage agreement. I'm just been out there forever, but they're really doing good. NAR is about keeping it updated. So, I'm on the. level of what was agreed to in some of these lawsuits.

[00:03:59] So when they had the class action lawsuit, the two ones are several, weeks ago, the two class action lawsuits, there was money paid out, but there was also some agreements from the real estate community as to here's how we're going to behave going forward. So this goes directly to the steering thing.

[00:04:17] So I wanted to make sure I mentioned that 

[00:04:19] Tracy Hayes: just to clarify. because Remax was in the one that's been, I guess we want to call settled. what's Gnar, was Gnar involved in that as well, or they were just after Remax at, at, in this particular one. And is Gnar changing or is just Remax saying, Hey, you know.

[00:04:36] Here, we'll pay you some money, and this is what we'll do. 

[00:04:39] Patti Ketcham: Good point. My understanding, NAR was not named in the class action lawsuit, and there were two of them. There was one against Anywhere Realty, which is a huge blanket that covers a lot of companies, like Corcoran, Colwell Banker, I mean, some of the major 

[00:04:55] Tracy Hayes: players.

[00:04:56] And Kelly Williams is involved in that group as well. I'm sorry, who? Keller Williams. 

[00:05:02] Patti Ketcham: I think that was the second lawsuit. It's how sad that in our world we can't keep our lawsuits straight. but from there were two class action lawsuits and they settled for quite a large amount of money and an agreement with the named defendants in those lawsuits.

[00:05:18] Which my understanding was not in AR, but the reality is that's going to bleed over to us. I mean, these are some major players and this was to me, some good news. And I want to speak to that steering thing. One of the agreements made in the class action lawsuit is that, you did not have to be a member of NAR.

[00:05:40] Well, as a licensee, that was always a choice. to join in AR or not. So that was an easy. Okay. the other thing was you could not search when we search an MLS as a realtor and a member of an MLS, you could not. search anymore based on compensation. So searching for a buyer, you couldn't go in and search based on compensation.

[00:06:10] Well, I never knew you could in the first place. Okay. Not a problem. But one of the other things that this is one we're gonna, we've already seen starting to shift out and spread out is that people can now put, listings into their MLS system and offer zero compensation. Now that's a paradigm shift.

[00:06:34] And N. A. R. has already said that's fine. So and some of the larger M. L. S. S. have already started doing that. So that's coming. I mean, I can't imagine that isn't going to be where we see ourselves, particularly a First quarter 2024. My prediction. so there, there used to be an NAR rule that you had to offer some compensation.

[00:06:58] It could be as low as a dollar or penny. That rule has been removed. So in response to these class action lawsuits, we're going to see zero compensation. All right. Also agreed on in those class action lawsuits is if you had the capability, which I didn't even know we could, you can no longer just Only show people properties that have compensation to the buyer's realtor through the listing office.

[00:07:31] Alright, slow that one down for me. Okay. I'll, I'll, I'll do that one again. Dify it. Okay. Yeah. Alright. In our, in our normal real estate world, for a number of years, the listing office received compensation from the seller and that compensation was then shared. And this is negotiated with the seller on What does that sharing look like?

[00:07:59] What is that percentage that what and that's always been shared and it's always been negotiable. but in order to attract people to that listing, let's as a seller, let's have the compensation that let there be an agreement of compensation to whoever brings the buyer to the table. So that's what you saw when you looked at a, Multiple listing.

[00:08:28] That's something in a house listed in multiple listing. Typically at the bottom of the page, you would see here's the promise compensation. If you bring a buyer. Well, if that's going to start saying zero, I can tell you that that ship has sales. We're going to start seeing where normally we would see a private conversation.

[00:08:49] Tracy Hayes: But is it really zero or they're putting zero just so they're getting around saying that the, the steering thing, cause we kind of started with that. 

[00:08:58] Patti Ketcham: Oh, I think it'd be a little bit, but here's what to me was a aha moment. When I read through the, the class action lawsuits and here's the agreement. The agreement was.

[00:09:11] As a realtor, we can no longer search. So you could not go in and just eliminate everything that has zero compensation. We've agreed. We will not do that. And I think that's kind of along your steering thing. Cause that's like steering somebody in a direction, that perhaps is not best for them so we can no longer, we are not allowed to do that, but.

[00:09:35] But part of that was unless you're directed by the buyer to do so. So let's look at future conversations we'll be having with our buyers. first of all, we've got to tell them how we're paid and we got to tell them what our value is and you'll hear that you're going to hear that a lot. What's your value?

[00:09:55] What's your worth? I mean, that's somebody needs to go on and make t shirts. All right. what's your value? What's your worth? This is what I do for you. And the compensation can come in a variety of ways. It can come through when you pay for the house. The seller has built into the cost of the house, which you're paying compensations for the realtors involved the listing agent and me, the person that's representing in the buyer, but that has always been negotiable and you will have sellers that are saying I'll pay the listing agent.

[00:10:34] but I am not paying the buying agent. I'm not paying the person that's bringing the buyer to the table. So in that case, I will need to look to you as. The buyers for my compensation and that's where people are going to go into the buyer brokers agreement, that written agreement. If I'm not compensated through the listing office, through the multiple listing service, then I need to be compensated by you. 

[00:11:00] Tracy Hayes: Remax was agreeing to, and. Probably the larger group as well. I think, they can no longer claim the buyer services are free. I guess that was something. 

[00:11:10] Patti Ketcham: Yes. Yes, and that's a critical, critical point because that's part of why we're sitting here today is because, and I've said it, I'm guilty, said, look, you know, when I'm working with a buyer, I'm paid by the seller.

[00:11:25] So the services to you are free. Well, now, when you really think about this, that's built into the price of the home, which the buyer's paying. So no, Yeah. No. now if you truly wanna run a nonprofit, there's no prohibition to that. Any of us are allowed to work for free. And I have absolutely had situations, and I'm sure there's other realtors where we have done this with zero compensation.

[00:11:53] But here's the, here's the thing I wanna point out. 'cause I think this could be this, this could put us where we wanna be, where we're able to help our buyers. When you're dealing with a first time homebuyer, when you're dealing with a first generation homebuyer, when you're dealing with a VA borrower, when you're dealing with someone that doesn't have the means to just reach in their hip pocket and pull out a wad of cash and start paying us for helping them find a home, if they give you a person written instructions.

[00:12:28] Please only show me homes where you're going to be compensated through the listing office. That's going to help a lot. Okay, so I don't think. I didn't, that didn't click till I had read it two or three times. So we'll need to have very upfront, which we should be doing anyway, very upfront conversations with our buyers is here's this form.

[00:12:57] And I think you're going to see various forms of buyer representation, you know, come out and get tweaked and stuff are these next several months. And. You know, if you have the means to pay me, and we can find you something where I'm not being compensated through the listing office, let's rock and roll.

[00:13:16] And here's what that compensation is going to look like. but if you're not in a position where that is an option to you, then you need to in writing instruct me. To only show you homes for my compensation is coming through the listing office and my understanding from reading that, and this is in response to the class action lawsuits, that was one of the agreements.

[00:13:40] So, I think we're going to need to have what we're going to need to have those up front conversations anyway, but I think that may be the route that keeps the door open to help many buyers. If you tell me to only show you houses, it's coming from you, the buyer, I don't have the money to pay you, Patti. So only show me houses and I will put this in writing before you are compensated through the listing office.

[00:14:10] That, I think, helps solve some of the problem. Does that make sense, 

[00:14:16] Tracy Hayes: Tracy? Yeah, yeah, 100%. And from the lending side... The first initial thing I thought is okay. You know, obviously a lot of these programs, whether it's FHA or even the conventional products, you know, they're, you're limited on seller concessions that do they, now they come out and say, well, you can get so much seller concessions and you also can be written in there that they're going to get the agent is going, they can build in.

[00:14:41] you know, a certain percentage, the seller can give the buyer's agent a certain percentage there. So, and, and that angle too, as far as from the lending side, you know? Yeah. I don't see that happening. because when they, the appraisers go out there and look at it, they see the contract and see the seller concerns already, and now you're going to build another two or 3 percent on top of that too.

[00:15:04] So now they got to compensate for the value too. to cover all that. Now, now you start stretching people. 

[00:15:11] Patti Ketcham: Well, I totally agree. And, I was in lending for a number of years and I'm married to an appraiser. So I always say I'm a groupie. I'm with the band. Okay. so I get the behind the scenes and, my husband Clay doesn't do residential in Hatton for a number of years, but he did.

[00:15:27] He did FHAs. He did, you know, appraisals for mortgage lending purposes for years and years and years. And what this boils down to guys, if you're willing to pay 400, 000 for a house. It's an MLS listed at 400, 000. It doesn't make sense for a buyer to say, no, no, no, let me pay you for 10. Let me pay. I know I can buy it all day long for 400, 000, but I want to pay you more than what you're willing to sell it for.

[00:16:01] So that's that dog ain't going hunt, um, because they're doing market value, not. Appraisals based on taking care of the real estate community. That's not of an appraisal. So when people go, Oh, you just build it in, you just add it into the contract. Y'all that ain't gonna work. Not for an appraiser that knows what they're doing.

[00:16:23] Tracy Hayes: the, one of the big, again, I was, I was really combing through, YouTube and so forth and watching the different videos of some of these guys have been following this all along. one of the, one of the words that they were, concentrating on, this one gentleman was transparency.

[00:16:36] I guess they, that's where they felt that, You know, we've kind of been going through, or the real estate community has been kind of going through their motions and assuming the consumer knows. The things that we, you know, that we do when really they, obviously these people are claiming they didn't, although the one plaintiff in the one lawsuit, mother was a real estate agent for over 30 years.

[00:16:57] she herself had bought and sold four or five homes, you know, through her life and her mother was a real estate agent and didn't understand that she could negotiate the commission. I call it, yeah, on that. 

[00:17:09] Patti Ketcham: I love to tell stories. So, and all of mine are true. but I, I was in real estate many, many years ago in the resale market, then went into mortgage lending as a loan officer for a number of years and then went back into real estate.

[00:17:24] So when I became a mortgage loan officer, I understood the real estate part of this. I knew how realtors were paid and I will never forget. It was an epiphany moment in my life. And this is back, this is how long ago it was, Tracy. We had these things called typewriters. I don't know if you've ever seen one, but it was a typewriter.

[00:17:42] And I was going out, I was, I was completing the loan application, the Tito three, on a typewriter. And the sweet little precious couple had just bought new construction. They're sitting across from me, they're chatting, I'm typing. And I hear them say, and the house, and you can't make this up. This is really a true story.

[00:18:01] The house they were buying was a hundred thousand dollars. And they said, you know, this, you know, the realtor always gives you a really good present at, you know, at the closing and I'm thinking, eh, well, sometimes, you know, I'm thinking this to myself, just eavesdropping and they said, you know, there's, right, there's no refrigerator with this house and Susie, the realtor, who they loved, I mean, they liked Susie.

[00:18:27] Susie was doing a good job for him. She's going to get 6, 000. So let's, you know, Tell her that we'd really like a refrigerator and I went, whoa, whoa, whoa. I said, let me tell you how realtors are paid. And I literally pulled a sheet of eight by 10 sheet of paper out and I wrote a hundred thousand dollars times 6 percent because that was the transaction they were involved in.

[00:18:54] And I said, three thousands going to the listing office, three thousands going to the. Whoever brings the buyer to the table and I said and then it's going to be split internally Within that firm and and at that point in time It was a business model where and I had been in real estate where it was not uncommon for the Realtor to get half of what came into the office.

[00:19:21] So I said Susie's not getting 6, 000 Susie's probably getting 1, 500. I said, so I don't know what kind of refrigerator you want, but you know, and they, they were astonished and they said, oh my gosh, I had no idea. She's done all this work for 1, 500. And I said, yeah, and that's gross. So, and then I want to make this point even deeper, and this is where it was like one of those God epiphany things.

[00:19:50] So we had a loan officer meeting that same day, later that afternoon, and we were waiting, we were in the boardroom, and we were waiting for whoever would, to come talk to us. And I asked my fellow loan officers, who were very intelligent people, and have been doing this a long time, I said, y'all on a hundred thousand dollar transaction, how much do you think the realtor that brings you the buyer is making?

[00:20:11] And guess what they said, Tracy? Six thousand dollars. 6, 000. Because guys, what is our arrogance that we think people are worrying about how we're paid? They're worrying about home inspections. They got monkey chatter for days going on of people giving them advice. How we're compensated doesn't even matter.

[00:20:37] Make the radar screen. So that day from that day forward in everything I've given out to any once I went back into real estate I have how we're paid and I have a Sesame Street example of how we're paid. I still do it based on that hundred thousand dollars, right? because it's easy to understand Yeah, yes, and I've and one of the things if we had had that transparency All along, because part of that discussion then becomes if I'm not your girl, kick me to the curb quick, because unless I'm sitting at the closing table with you, I'm not paid.

[00:21:19] So I think part of this is, and I'm going to be very blunt, arrogance on our part that we think that we're that important. They're worried about our compensation. They're not, they got way more things to worry about. So you gotta have, and to me, it's an easy conversation. It's not a tough conversation, particularly on the buying side.

[00:21:42] You know, I'm paid if I'm sitting at the closing table with you. So if I'm not, if I, if I'm not going to be the one. You choose to help you on this journey. You need to let me know immediately and I don't care how you'd let me know. You can do the old Seinfeld, you know, it's not you, it's me routine. And I'll, I'll, I'll honor it.

[00:22:02] so buyers always have the right to break up with us, but if they're not going to use this. Shame on us that we didn't let them know we're not going to be compensated. 

[00:22:11] Tracy Hayes: Shame on us. I, I, well, I, I think, you know, in one of the comments that, you know, one of the videos I was watching guys is, you know, every time there's a challenge, like in any industry, there's a challenge out, out there.

[00:22:23] you know, whether it was, you know, COVID or the other, we're going to come out better here after listening to this. I think the money is gross. I think the amount of money that. being, but I'm sure that'll, you know, I just, I don't know, calculating what the lawyers are going to cost them and so forth. But, you know, some of these things are, I didn't see them really going, really putting the, the, the real estate industry realtors in general.

[00:22:47] on on their heels. I mean, some of it was just was transparency. The brokerage cannot mandate that there's a minimum commission that you can represent someone, you know, for it said no office minimum commission mandated by the brokerage, right? You know, You know, we're, it's, we're, we're, we've got to feed ourselves.

[00:23:08] I don't believe, well, although I think people think we should do it for a lot less, but when they actually, you sit down with them and explain your 100, 000 transaction and how many transactions do you have time in the month to do? And, you know, the good, the bad, the indifferent, you know, yeah, it was great.

[00:23:24] Everybody was making a lot of money last year. It's slowed down a little bit and people are falling out and, and you're through it, the thick and thin and, type of thing. And, I think a lot of people don't understand, especially commission based. There's a lot of people fear. I think you and I know we've, we've lived in a commission based, industry for a long time where other people go, Oh my God, you're commission based.

[00:23:45] You're not guaranteed to check next week. No, not actually. So we got, we got to get work and the amount of time we actually put more time in probably than the nine to five person, to earn, earn the equal amount, you know, when it, when it actually breaks down to the hourly wage. 

[00:23:58] Patti Ketcham: Well, and, and I think to your point, Tracy, but I also think guys, we got ourselves into this position.

[00:24:06] We got to own it. And now it has slapped us in the face. You think about all the realtors that were, are encouraged to announce that they are million dollar producers. I'm a million dollar producer. Well, the public then thinks you made 1, 000, 000. Now, if you do the math on you've closed 1, 000, 000 in real estate, which is truly what that means, you've maybe made 14, 000.

[00:24:36] Yep. So come on. And I also think, and I'm just being bluntly honest here. because quite frankly, I ain't got nothing to lose. All right. we have been training these brand new baby realtors that we've been training them on maneuvering. We've been trained, training them on how to out strategize somebody.

[00:25:02] We've been training them on scripts. We've been training them on overcoming objections and we, and it has come home to roost because we also have these precious little sweet realtors that are doing these bougie Tik Toks where they, you know, are addressed to the nines. And, you know, there's somebody that, 

[00:25:25] Was convicted down in Miami for taking, and she's a realtor and for, using, she took her, that PPP money that was available during COVID and she leased a Bentley. And so she's, so all of this is fake. All of this whole stuff is not real. And so why don't we, I mean, it's, it's going to hurt, but it's time for us to be a serious adjustment.

[00:25:58] And those of us that find ourselves in the privileged role of training people, people coming into this. They need to know their contract. They need to understand local neighborhoods. They need to provide true value, not shiny things. And so, I'm thinking, I'm sick to death of scripts. Never liked them, never have.

[00:26:23] Cold calling works, but I ain't gonna do it. I promise y'all I will go to my grave never making one. So, no wonder people are seeing us. through this unrealistic filter because we built it. 

[00:26:40] Tracy Hayes: Well, that kind of actually was one thought that went through my mind is the technology and the social media now. because I mean, what's been going on as far as, you know, 6 percent being kind of the, the, the number, give or take for as far as I can remember.

[00:26:57] And I'm sure you, I, you can tell me different. It was different at some other time. But now that social media is out there and everyone has a different way to advertise their home, they're going, well, why are we, we being forced into this, this MLS is kind of what I, what I was reading into this lawsuit because a lot of it had, had to do with the background.

[00:27:18] Oh, if you're putting it in the MLS, you've got to put, you know, that commission for the buyer's agent, or at least it was perceived that you had to do it, in that sort of thing. And now has technology moved it to where these people, you know, yeah, These people think they can do it on their own. I mean, you and I know everyone should have a real estate professional because it's too many, you know, the guide to transaction, smoothly and efficiently and, and to get in the show your house the best for sure.

[00:27:42] But, the perceived from the public, again, it's perception of the public is that again, because of the social media, these driving the Bentley or they're watching, you know, The shows on Bravo and so forth where these agents are, you know, type of thing and they're selling these 15 million, you know, 20 million homes when in reality that's not reality.

[00:28:02] Patti Ketcham: No, it's not. And I think I go back to life works. And one of the things I've, I've realized as I've made this journey is it's a pendulum. And let's talk about, Emotional support animals and service animals for years. It was a German shepherd were allowed in restaurants because they were seeing adults and that worked, but it didn't meet the needs.

[00:28:31] It truly didn't. It was too restrictive. So in order to, to correct that, we have to overcorrect. I just think that's the patterns in life. So we way overcorrected, way 

[00:28:42] Tracy Hayes: overcorrected.

[00:28:44] Patti Ketcham: I mean, you had, you know, I was teaching in the Orlando area and one of my realtor students in a class had worked at Disney and they had support chickens and a support snake and I was like, did they come the same day? I would have loved to see that play out. but it went wackadoo, went totally wackadoo.

[00:29:06] Well, now, now we're okay. Now, now we seem to have hit what is a reasonable balance. Guys, yeah. This is what's going on right now in our industry, and it's going to overcorrect, it's going to, and you're going to have buyers because they do have tools they didn't have in the past, where the need to have the realtor find you the home is not as, as nearly like it used to be when people come to me now, they've already got their list of houses, you know, They've been on the Internet, and I found the list of houses.

[00:29:41] So the skill set that we've had to hone and should have had all along is understanding the contract, negotiating skills, watching the deadlines, you know, understanding the promises that are made. You always say a real estate sales contract is nothing but a set of promises between adults with deadlines.

[00:30:03] And so we've got to help them get to that reasonable place. And they're going to not need us for a while. If you're on the buying side, I mean, that's coming. Y'all can take that to the bank. So, and we're going to overcorrect and then people are going to be harmed and then people are going to be harmed.

[00:30:21] Because they didn't have anybody, so to speak, in their corner. And what makes me sad is it's going to be those who have the least options available financially. And so then that's going to create an outcry because that's not appropriate either. And then we're going to settle back down. Now what that looks like settled down, I don't know, but Hattie's prediction is we're going to overcorrect.

[00:30:53] We're going to overcorrect. So if I were in your shoes, as any of you that are new to this real estate, that are listening to this, if the phrase, um, You have to list to last you can go ahead and monogram that on everything you own because that's going to come true. I mean, that's because people aren't going after that.

[00:31:21] They're going after the buyer side of this. Now, I think we're going to end up. Okay. We made it through having to have home inspections. That was going to be the end of the real estate industry. We made it through, discovering that there's a clause 17 on a mortgage that says, no, you can't do a wraparound.

[00:31:41] We'll call it due. We made it through those. That was going to be the end of the real estate industry. Oh my gosh. When they discovered radon. That was the end of the realist. So this is life's pattern. And in order, when you have something like this, it has to overcorrect to get to. Okay. And I think the challenge for many of us that truly loves this is.

[00:32:09] Staying flexible. I keep thinking, and I shared it with Tracy, shared, shared it with you, Tracy, last night, I sent it to you. That clip from friends where they're trying to move the couch up the staircase, pivot, pivot, pivot, whatever you're doing now, don't order a whole lot of those publications cause you getting ready to pivot.

[00:32:30] So. We are going to have to stay flexible, but we've always been flexible. Those of us that have lasted through the years have adapted our services to the needs of our buyers and sellers as the market has changed. And that's going to stay the same. You 

[00:32:45] Tracy Hayes: tapped a little bit on some of the, again, two things, you know, who's going to benefit and who's going to fall out.

[00:32:50] And you mentioned it's going to be a challenge for some of the buyers agents, but I mean from from my side And i'm not a real estate agent. I'm on the lending side. I'm looking in my wife's an agent, but you know, look As a listing agent you're going to that listing appointment Are you not? Hey, yeah, you know, we need to get 6 percent because we want it.

[00:33:11] We, there's still, that incentive is still out there, even though you don't have to advertise you're getting incentive, but that the buyer's agent is going to get something in as all the things that you do as a listing agent, you know, stage a home, you know, address the curb appeal, do those things to a home.

[00:33:27] To get more people to walk in, do an open house to get more people to walk in, hopefully to show the listing agent, you're doing something. You also have to be common sense and say, Hey, mrs. Seller, we need to, we need to be offering an incentive for that buyer's agent to bring by their best buyers as well.

[00:33:44] I mean, it's capitalism. 

[00:33:46] Patti Ketcham: Oh, I totally agree, Tracy. And what I predict is coming is you're going to see sellers not want to offer conversation, which is. Always been the right, but it's now going to be exercised more frequently. And then I think what you'll see is they're going to stand just as we always do.

[00:34:05] This is reacted to the market. They're going to be real firm that this is the Howard. We're doing it. You know, by gosh, this price, these terms. And if you get a buyer, you're great. But what if it's six months from now and the buyers are going, I don't like your price. And I don't like your terms, then you're going to see sellers go, okay, we need to revisit this.

[00:34:31] So I think you're going to see a lot more of that type of thing where you're going to see a seller go, okay, you know, we don't have to offer compensation anymore. We never did, but we're not going to argue that I'm not going to offer compensation. My house is going to sell top dollar without any help from a buyer's agent who's been looking at the market.

[00:34:54] and I'm not going to need it. And there's going to be houses that sell for that. It's absolutely going to happen. But the majority of us regular folks. are going to find ourselves having to adjust 

[00:35:05] Tracy Hayes: the just because I was thinking how I wanted to phrase this particular question or topic is just what are what are they just saying?

[00:35:15] Agents listening to this? They should, in my opinion, you should not be panicking. You should just be updating yourself and maybe tweaking your presentation. we talked about it here. It's been talked about if you go on on YouTube and pull up, you know, the different people talking about the lawsuit is agents have got to get better at, you know, explaining what their value is, as we talked about that and right the beginning, you know what their value is.

[00:35:39] So, you know, the fallout. Yeah, there's going to be some people are just going to throw up their arms and walk away from this because that's, they were going to quit anyway, the others that are going to say, well, we just got to adjust. you know, to the market marketplace, like how to negotiate after a home inspection.

[00:35:55] I didn't realize home inspection was a big thing that set the real estate market back, but 

[00:35:59] Patti Ketcham: oh my gosh, we may as well all turn our licenses in. If people do an inspection on a home, they're never going to buy it. I mean, I can remember that panic in my heartbeat and fast, you know, like, Oh my gosh, this is a major industry crisis.

[00:36:14] And, and I want to quote my beloved husband, and this is paraphrasing something he tells me, he goes, Patti, you need to always remember people really want to sleep indoors.

[00:36:32] Tracy Hayes: Well, that was my next statement was next year. This isn't going to change the amount of homes that are bought and sold. 

[00:36:40] Patti Ketcham: No, no, no, no, it's not people and even with the interest rates going up and and y'all When I was in and Tracy and I've talked about this one. I went from real estate to mortgage lending Which was commission based also I went into a market where the best fixed rate you could get was Barnett Bank and it was 14% And y'all people still slept indoors.

[00:37:08] So, so I always believe if you, if you are blessed enough to serve in a market where it's cheaper to buy than to rent, if you just look at that monthly payment, block out that interest rate, it's too painful to look at. Just don't look at, if it's still. Everybody's making somebody's mortgage payment.

[00:37:29] You're either making your landlord's or you're making yours. So as long as that great truth holds out, we're going to be okay. And the lending market, which you're involved in Tracy, we're going to have arms. Adjustable rates are going to come out. They're not the evil spawn of Satan. that everybody thinks they are.

[00:37:50] They can work very well. So the good realtors that are going to last are going to learn how to do adjustable rate mortgages. They're going to learn how incredibly important it is when you go list a property to ask the seller, is your home assumable? Is your mortgage assumable? And if it's FHA and VA, it is.

[00:38:12] It's an assumable mortgage. they're going to make real good friends with a seedy guy in a strip mall that add, that offer smoke cigarettes and offer second mortgages. They're going to become our new best friends. I mean, we're going to have to adapt to this world that I've already lived in in the past.

[00:38:28] And I, unfortunately my seedy guy has died. So I'm going to have to meet a new seedy mortgage. Second mortgage guy. so do you see what I'm saying? We're going to have to expand what we know. and quite frankly, I mean, 

[00:38:42] Tracy Hayes: I would use it for a good lunch and learn. That's what it does.

[00:38:48] Patti Ketcham: If I was in lending, I'd be all over realtors talking about assumability and arms. Because that's coming and you as a buyer's agent, if this is the power you bring to the table and anybody that's taken any of my classes know I say this all the time. You ain't got to know this much more. You just got to know that much more than everybody else.

[00:39:09] And so the buy, the tools that the buyer's agents brings to the table is not going to be out strategizing somebody. assumable mortgage.

[00:39:20] It's going to be an understanding of adjustable rates if I think that if those come into the market, which I predict they are it's going to be having a Relationship with the listing agent where you can pick up the phone and call them and say look I noticed that y'all are not offering no compensation But I've also noticed this property has now been on the market three months Is there some flexibility if I bring an offer where your seller would be willing to compensate me for the work I'm doing for the buyers?

[00:39:57] And that's going to be based a lot on the relationships we've built with our fellow realtors. 

[00:40:04] Tracy Hayes: It goes back to a story when I had John originally telling, you know, tell, like talking about your story and how, you know, like you said for the first whatever amount of years, you never walked into the board of realtors and how you missed out on relationships that you could have made during that time.

[00:40:19] which I think you've caught up and surpassed everybody else by now. 

[00:40:24] Patti Ketcham: Thank you. Yeah, I had to work overtime. but, and I also think we also need to realize that I want this point to really sink home to our Florida rollsters here. A lot of the information we're getting and that we're going to get in the coming months is going to deal with agency.

[00:40:41] There's going to be a lot of strong emphasis on agency and a lot of the stuff coming from NAR because I teach for them also. So I see, see the material. It goes really deep dive on agency. All right, I had a conversation with the person that's in charge of this education stuff coming out of NAR just last Friday, as a matter of fact.

[00:41:06] And I said, I don't know if Florida's 25 years ahead of the country, or we've been under a rock. I think we're 25 years ahead. So you're going to see a lot of this education coming from outside Florida that has not been Florida ized, okay? So, many of the education loud voices, who are wise people, this is not a slam on them, these are very wise people, but they're coming from states where disclosure, Of your relationship as a dual agent, transaction broker, single agent, no brokerage relationship, buyer broker.

[00:41:46] This is a big deal to them. I believe we've gotten past that. I could be wrong. Well, time will tell. So when you hear that, take a deep breath, be thankful. You're in the state of Florida. That it's okay. We dealt with agency, the wiser people ahead of me in the eighties and the nineties on the real estate commission dealt with agency.

[00:42:15] Most of the people in the state of Florida are transaction brokers. Take a deep breath. It's okay. So let's don't plow fields. We don't need to plow. 

[00:42:27] Tracy Hayes: I 30 here and we're, we're closing now. one of the questions like, is what's going on in circling back to the lawsuit? Is there who really is, is ultimately, I mean, are there, are there buyers and sellers of real estate really benefiting from this, this lawsuit?

[00:42:47] Patti Ketcham: I'm going to answer is Patti Ketcher. Yeah, I think they will when it's all said and done, when it all shakes out, because I think this is going to get rid of people that are in this business for the wrong reason. 

[00:43:00] Tracy Hayes: If you don't have a strong reason, meaning like quick cash or, you know, or these, these guys that are doing these, you know, they're listing the house, pay me, they don't actually ever show it or anything, but they put it up on the MLS for you, that kind of thing.

[00:43:14] Yep. 

[00:43:15] Patti Ketcham: Yep. If you don't have a servant's heart, now I'm talking residential, not, and, and, and let me point something out. You know, commercial real estate has been this way forever. They're looking at the residential people going, what's your problem? I know I've sold commercial real estate. And the thing is, you find three properties you want to show to your buyer, and you call the three listing agents and say, when you listed this, was there compensation put in if I bring you a binder?

[00:43:45] And if they say no, then you have to have a discussion with your buyer. So this is. They've been doing this for years, so this is no big deal to them, but I do think when you have people that are drawn into real estate for shiny things, when they're drawn into real estate because they could do cute social media TikToks, when they are drawn into real estate to see how many followers they can get in social media, when they never bothered to go to a contracts class, when they couldn't spell code of ethics if you held a gun to their head.

[00:44:19] And they, and when I talk about the preamble and under all is the land, they don't get it.

[00:44:27] I think that's going to be okay when they go on down the road. I think the survivors in this or the people that are in there that understand the contract, that understand the level of service that's needed, not only on the listing side, but on the buying side and can look somebody dead in the eye and say, here's the value I bring to the table.

[00:44:51] Tracy Hayes: Excellent. I'm going to close out with that. I appreciate your time, Patti. Any last thoughts that you want to throw out there? I think you, 

[00:45:00] Patti Ketcham: maybe, maybe guys, maybe instead of maneuver, strategize, and I don't smart people. We go to kindness, respect. And grace. 

[00:45:18] Tracy Hayes: There you go. I appreciate your time today, Patti, doing this in the last minute show, and I hope the everyone listening gets a little bit out of it. It's not a panic. It's just, it's time, white, slow, right?

[00:45:29] Time is why slow to tweak your business, get a little polish your, you know, presentations up and, and how are, how are you going to. Present to the buyer, and seller because I think it's important the listing agent is not giving up on this You want to have commission for that buyer's agent because you want them to bring people over so You know to go online I learned a lot here just in the last 24 hours.

[00:45:51] I just saw the lawsuit come out There's a ton of stuff online Where people are really breaking the lawsuit down for you in a real simple format, as we hopefully did today and get, you know, get every, because everyone has a different opinion, but it's, it's, you know, it's all real estate people explaining to you, you know, that have really been staying on top of this from the beginning.

[00:46:09] I think it was 2019 when the original lawsuit was filed. So, these come up. So I hope you have a great, yes. Yes. I, like I said, the, Okay. It's only going to improve as, as all these things have come up in our lives. We're just going to get better. This is just a checkup from the neck up. So, yeah, 

[00:46:30] Patti Ketcham: I agree. So y'all grab hold of that pendulum and ride it till it hits the new normal.

[00:46:38] Thank you, Tracy, for your 

[00:46:39] Tracy Hayes: time. Thank you. You have a super afternoon, fatty. All right. Thank you. 

[00:46:43] Patti Ketcham: Thanks for caring about what we do. 

[00:46:45] Tracy Hayes: Excellent. Thank you.