James Dwiggins examines conflicts over changes in NAR settlements
In a new episode of the Power House podcast, host Diego Sanchez talks with James Dwiggins, CEO and co-founder of NextHome and co-host of the “Real estate insiders unfiltered“podcast.
During this conversation, the duo explores NextHome’s “people over homes” philosophy and referral-driven growth efforts. They also explore the National Association of Real Estate Agents‘ (NAR) settlement of commission cases, deficiencies in agent training and more.
This interview has been edited for length and clarity. To start the conversation, Dwiggins explains what sets NextHome apart from other real estate franchises.
Sanchez: James, how do you differentiate NextHome from other national franchises?
Dwiggins: Since we started the company in 2014, we always wanted to try to be a little different from the rest of the industry, in the sense that it wasn’t about having a ton of agents. It was about the quality of the people who shared roughly the same vision of the industry. We have this saying in our business called “people over houses.” That’s our kind of guideline.
Sanchez: Let’s talk about that growth trajectory. Franchising organizations are usually all about the sales process and acquiring more franchises.
Dwiggins: Probably 40% of NextHome’s growth comes from referrals. Someone comes in who loves the culture, the company and the way we work. They then name other people who would be a good fit for the organization. We also do not focus on large real estate offices. NextHome is one of the first to offer virtual offices, where people do not need a physical location. Generally, there are no franchise requirements, which allows us to tap into a different market than our competitors.
Sanchez: Can you give our audience a kind of “state of the art” on real estate commissions and their impact on the settlement?
Dwiggins: We’re in the first inning. I think this is the most important thing that people understand. Since August 17, we’ve only had a few months to see how things have developed. There have been several studies showing that compensation is starting to decline, especially on the buyer agent side. We don’t know if agents sign buyer representation agreements before showing properties.
The lack of training and guidance from real estate agents is appalling. They don’t teach their people what the process is. As a result, if a seller does not offer compensation, the buyer and agent simply move on.
Dwiggins also delves into industry issues surrounding the use of cooperative compensation in some forms.
Dwiggins: Those forms were created by a committee of competing brokers, and that’s literally how we got into the lawsuit to begin with. Lawyers have even come out in two separate interviews threatening to file another lawsuit. Many companies have banned that. But there are still conflicts with companies that do.
To conclude the conversation, Dwiggins explains his case for maintaining NAR’s Clear Cooperation Policy, with one minor modification.
Dwiggins: I am a free market man. But if you’re a member of an MLS, you have to follow the same rules as everyone else. You can’t pick and choose. If you need to list a property on the MLS within 24 to 48 hours, you play by the same rules.
