Lesson Plan For The Future

“When a Paradigm Shifts, everyone goes back to zero.

Your past success guarantees nothing, when a paradigm shifts.”

Appropriate once again, I believe this is the right conversation for all of the “Stakeholders,” for the time and circumstances in which we find the real estate industry — however each of us may define it…Broker, Agent, Association, MLS, Consumer, Vendor, Advertiser, etc.

How does an individual or organization prepare itself for a future that promises “Fundamental Change,” a “Paradigm Shift” (As described by Joel Barker in his video “The Business of Paradigms”)?

You ask yourself the “Paradigm Shift Question,” and then ask it in reverse.

Start with the question: “What is currently possible in your business today, and if it were impossible, would FUNDAMENTALLY change the way you do business?”

“What is currently impossible in your business today, and if it were possible, it would FUNDAMENTALLY change the way you do business?”

Coming up with the answers to the following ‘What If’ questions will keep you at the edge of your paradigm, and closer to your future, or that of your organization.

So, in the world of real estate and everything that phrase entails, try these questions:

• WHAT IF all licensees were mandated to become employees of their broker, and the independent contractor model is scrapped by the DOJ?
• WHAT IF agents did not have to join a REALTOR Association just because their broker belonged?
• WHAT IF there were no NAR Three Way Agreement?
• WHAT IF there was no Broker Dues Formula and State and National Associations had to collect their own dues, and a world where membership in one organization did not mandate membership in another?
• WHAT IF any real estate licensee could become a member of MLS?
• WHAT IF there was no more MLS?

Expectations for the Real Estate Industry over the next few years (just a few off the top of my head):

• Antitrust at the MLS and Association Level – After over 40 years of battle, expect broad movement against real estate associations and MLSs, unless they cooperate.
• Possible removal of the Offer of Compensation from MLS, as a result of current, potentially Class Action efforts by major law firms, requiring MLSs to create a new MLS Value Proposition
• Forcing the elimination of the practice of “dual agency.”
• Paradigm (Fundamental) Shift in national to local Land Use Policy…Under all is the land…Highest and best use. Data. Walkability
• Policy and funding will turn government inaction on key goals over decades into enforceable realities. Look for both the “carrot and the stick.” Hopefully “Social and Economic Engineering” at it requiring the best of public and private sector efforts. Look for the opportunity and avoid the dissent. Taxing mass quantities of data, computing power, and data science to turn intuition to insight.

Roles of the DOJ and FTC…The Enforcers. Both the FTC and the U.S. Department of Justice (DOJ)

Antitrust Division enforce the federal antitrust laws. In some respects their authorities overlap. And don’t forget the IRS, the last piece of the biggest guns the US government can bring to bear against individuals and entities. It was powerful enough to take down AT&T, and others and it has a long history pursuing the real estate space.

Over the years, the agencies have developed expertise in particular industries or markets. For example, the FTC devotes most of its resources to certain segments of the economy, including those where consumer spending is high: health care, pharmaceuticals, professional services, food, energy, and certain high-tech industries like computer technology and Internet services.

Before opening an investigation, the agencies consult with one another to avoid duplicating efforts.

On the sidelines is the IRS, favoring an “Employee” model

Direction from the White House:

To address persistent and recurrent practices that inhibit competition, the Chair of the FTC, in the Chair’s discretion, is also encouraged to consider

• unfair occupational licensing restrictions.
• unfair tying practices or exclusionary practices in the brokerage or listing of real estate; and
• any other unfair industry-specific practices that substantially inhibit competition.
• unfair data collection and surveillance practices that may damage competition, consumer autonomy, and consumer privacy.
• Not having to belong to the REALTOR organizations to access the MLS
• A world with no MLS