Pasadena-Foothills Association of Realtors President Breaks Down Latest Developments in Real Estate Market

In an exclusive interview with Pasadena Now’s Real Estate Section Editor David Cross, Pasadena-Foothills Association of Realtors (PFAR) President Laura Kinkade-Wong, GRI, PSA offers an insightful analysis of the latest changes reshaping the real estate landscape.

As a seasoned Realtor and leader within the local real estate community, Kinkade-Wong provides a unique perspective on how the recent National Association of Realtors (NAR) settlement is influencing both agents and clients alike.

1. What immediate changes have you observed since the NAR (National Association of Realtors) settlement took effect?

PFAR President Laura Kinkade-Wong: Since the NAR settlement took effect, buyers will now be required to sign a Representation or Showing Agreement with an agent prior to touring any homes. In addition, MLS’s (Multiple Listing Service) have removed the offer of compensation from listings. This does not, however, mean that sellers cannot continue to offer compensation to buyer’s agents – it just cannot be communicated via the MLS. This is where agents can get creative and communicate compensation via other mediums, including email blasts.
As a result of these changes, there have been numerous educational offerings from real estate brokerages, including my brokerage, Douglas Elliman, which has provided extensive materials, the National Association of REALTORS®, the California Association of REALTORS®, and locally at the Pasadena Foothills REALTORS® to help agents get acclimated to the new procedures for doing business in this new environment.

2. How have homebuyers and sellers responded to the new rules regarding agent representation and commission structures in the short time since the changes were implemented?

PFAR President Laura Kinkade-Wong: While it is still too early to take a true survey of seller behavior, as changes were just put into place on August, 17, Sellers have a number of options, including the ability to negotiate commission and pay only what they are willing to agree to.

For buyers, some are able to take on this cost of paying their agent directly and alleviate it from the seller to make their offer more competitive. However, for buyers that have limited down payments, this new situation makes them more reliant on asking the seller to compensate the agent, which may or may not affect the competitiveness of their offer.

3. Based on your experience so far, what do you foresee as the biggest long-term impacts of the settlement on the real estate market? Positive or negative?

PFAR President Laura Kinkade-Wong: No two agents are alike – each represents their own value proposition to a client. The settlement allows those agents to negotiate their value up front with a buyer and to secure the relationship prior to showing any properties. Previously, many agents would show properties without ever signing a representation agreement with their clients, which sometimes meant that buyers ended up writing an offer with another agent even after months of showings with the original agent. By securing the relationship up front, this should alleviate those issues from happening. (On a side note, CA Assembly Bill 2992 (AB2992) will also make it a law requiring Buyer Broker Representation Agreements in California after January 1, 2025).

From a client perspective, buyers now can determine just how much they are willing to have their agent compensated for the work they provide. Having that clarity is a huge benefit to buyers.

4. How do you believe these changes will influence the way REALTORS® market their services to attract clients moving forward?

PFAR President Laura Kinkade-Wong: As stated previously, no two agents are alike, and it will be more important than ever for agents to discern what sets them apart from another buyer’s agent, explain their value proposition, and determine with the client what the compensation should be. Agents will be required to do more than just show properties and write offers if they want to command a higher commission rate, and ultimately the expansion of services will positively impact buyers as well. An agent who can find properties that are not listed on the MLS will prove significantly more valuable than agents who rely solely upon the MLS for listings.

5. What advice would you give to homebuyers and sellers navigating the new real estate landscape?

PFAR President Laura Kinkade-Wong: As with any service-related industry, be sure you know exactly what your agent is going to do for the commission they are presenting you. Meet with multiple agents and ensure that you ask all the necessary questions to make an informed decision on which agent you want to move forward with, and that you are comfortable asking them questions and communicating with them as that is key to a successful partnership.

Be up front with your agent about your plans for commissions – if you are a seller, do you plan to compensate the buyer’s agent? If you are a buyer – are you able to compensate the agent if the seller is not willing? Be sure to discuss what would happen in those situations if you cannot afford to pay the agent and the seller does not agree to pay your agent either.

6. What strategies are agents using to differentiate themselves in a more competitive market?

PFAR President Laura Kinkade-Wong: When an agent is meeting with a potential seller to pitch their services, they meet with the client and do what’s called a “Listing Presentation”, which includes information on the agent, their brokerage, the services they provide (both strictly related to the transaction and additional services that may set them apart from other agents), how they will market the property, and more.

Now, buyers agents will need to do a similar presentation to potential buyers to detail the agent’s experience, what services they provide, what their brokerage provides, and what additional services they may provide to the buyer. Will the agent work to find them a property beyond what’s listed in the MLS? Will they have access to off-market properties? What additional services beyond finding and showing properties will that agent provide to the client? The presentation will be the chance for them to show why they deserve the commission they are requesting, and it will be the opportunity for buyers to determine if that agent fits their needs – both in service and price.

7. What is PFAR advising its membership based on the changes that have taken place?

PFAR President Laura Kinkade-Wong: PFAR has advised our membership to educate themselves on the new procedures via many class offerings. We’ve been discussing the need to verbalize their value propositions to clients and to hone their skills at doing buyer presentations. We have resources available for our members to help answer any questions they may have.

8. What else would you like the public to know?

PFAR President Laura Kinkade-Wong: Unfortunately, the news has inaccurately portrayed and overstated concerns about the real estate market as a result of these changes. It’s important to keep the focus on the benefits these changes will allow for sellers and buyers alike. Despite what has changed, the one thing that hasn’t is your agent will need to work harder for you than ever before, which is always a benefit to you as the client!