For independent broker-owners Michele Harrington of First Team Real Estate and Jonathan Lickstein of LoKation Real Estate, the lack of parent company oversight provides them with the opportunity to take different strategies on issues depending on what they feel is best for their agents and consumers. 

“That’s one of the good things about how we operate,” Lickstein told attendees of HousingWire’s The Gathering on Tuesday morning. “We don’t really have to answer up. If we hear feedback and we want to make a pivot and make a move to serve the agents and the consumers, then let’s go!” 

This independent spirit and mentality is reflected in Lickstein and Harrington’s differing stances on a variety of issues currently facing the real estate brokerage industry. 

Buyer agency agreements: enforce or not?

While Harrington’s feelings about the commission lawsuits, which she refers to as “the dumbest lawsuit ever to hit the real estate industry,” she has come to find a silver lining with the business practice changes that emerged due to the National Association of Realtors (NAR) commission lawsuit settlement agreement. 

“We came up with a really good buyer broker agreement that is a marketing pitch that we tell our buyers all the things we are going to do for you and that they are going to pay us to do,” Harrington said. “If we are going to have suffered through this stupid lawsuit, then let’s use it for our competitive advantage and use it for marketing.” 

Instead of using the form promulgated by the California Association of Realtors’ (CAR) Harrington and her team at First Team created their own, easy to read, buyer agency agreement, which she feels gives her firm an advantage over other local companies who rely on the CAR forms. 

“When you are competing with other agents that are trying to get agreements signed, is the consumer going to sign that one that is [five pages long] or are you going to sign the one that says ,‘This is all I do to represent you’? It is just easier to get the second one signed,” Harrington said. 

Although Lickstein is also a proponent of buyer agency agreements, his team has made the choice to enforce these agreements, while Harrington and FirstTeam do not. 

Lickstein has successfully enforced these contracts when they are breached. “Historically, we’ve had listing agreements, which are contractual obligations between a seller and the brokerage. If the seller went around you and sold to somebody behind your back, you would enforce that agreement. Now the shoe is on the other foot and we have the ability to tie the buyer in,” Lickstein said, “I know that sounds negative, but you are setting the same expectation as you are on the listing side.” 

While Lickstein has made the choice to enforce these agreements in court, he said they are not doing it across the board.

“A first time homebuyer who’s bringing together money to do an FHA loan, we’re not going to go after that person. But, if we have an exclusive agreement with somebody, and they turn around and they go with their cousin, sister, uncle or nephew, then we’re going to enforce that agreement because they took advantage,” he said. 

Lickstein is very aware of the optics presented to the consumer in choosing to enforce these agreements in court, but he noted that as long as your company is large enough, people are always going to complain about something you do.

“You’ll get negative complaints about how somebody showed a house or the way they advertised a rental, but as far as filing a suit about enforcing an agreement, we have yet to receive one negative complaint,” Lickstein said.

Pre-marketing and private listings 

When it comes to pre-marketing and private listing, this is another area Harrington and Lickstein have decided to take differing approaches.

According to Harrington, FirstTeam has had a form of private listings within her firm for nearly two decades.

“We have ‘Sneak peak,’ which are listings that go to our agents first, then they go to coming soon and then they go to the general market,” she said. “It is a way to get momentum going on a property so that when it hits the market, it goes quickly, and we have done that forever.” 

She added that this process also helps her agents and their sellers gain feedback on price as well as the listing itself and that she doesn’t believe private listing networks should be used to double -nd deals or to keep a listing from a subset of buyers or agents.

Recently, Harrington and FirstTeam signed on to Zillow Preview, which she said they are injecting into the current pre-marketing workflow FirstTeam already has in place. 

“We are launching the listing again and again to a bigger and bigger crowd every time,” Harrington said. “When deciding to do a deal with Zillow, it was around the same time other companies were doing deal with Redfin or Homes.com, but when our agents are going into a listing presentation, and we can pre-market on Zillow compared to Redfin, that is a huge competitive advantage, so of course I was going to do a deal with Zillow.” 

Although Lickstein agrees that private listings shouldn’t be used to double-end deals and that building momentum around a listing is important, he and his firm have not signed on to any pre-marketing programs. 

“I don’t think you can truly test the market until you are on the public market,” Lickstein said. “It does come down to the seller’s choice and it should be their decision if they want to hold the listing or go right to the public market.” 

In his view, there are three things that go into selling a property: price, exposure and access.

“If you take one of those away, then the property won’t sell for the best price or the fastest amount of time,” Lickstein said. “I believe private listings are only beneficial for certain discretionary issues, such as if the seller is in the FBI or witness protection, but you are leaving money on the table if your listing is private.” 

The wave of consolidation

Although these leaders have differing opinions on these issues, one thing they agree on is how the recent wave of massive industry consolidation is a good thing for independent brokers. 

“I’m so excited for all of the consolidation,” Harrington said. 

While she currently heads an independent brokerage, Harrington previously owned a franchise firm, which she said due to the technology the franchise offered.

“Back then, to build that back end system was really expensive, but it is not expensive anymore,” she said. “Why would I spend all that money to buy a franchise when I could build that platform myself for so much less?”

The cost of creating back-end systems, according to Harrington, will only decrease further due to the rapid advancement of AI. 

“It is leveling the playing field,” she said. “If you think you are a tech company and agents are going to stay with you because of your technology, you are sorely mistaken because technology is getting cheaper and easier. If you want to be a company for the future, you have to focus on agent growth and things that can’t be replaced by AI.” 

Lickstein shares a similar view, but sees things with technology a bit differently. 

“I do think technology can be the reason people stay, but it depends on how you layer it on top of your relationship with the agent and the feedback they give you,” he said.

This, in his view, is an area where independents can thrive, as they are able to quickly take that agent feedback and leverage technology to fix their pain points. 

However, due to the ease of creating technology, he feels a major advantage independents are gaining through the industry consolidation is the ability to recruit and hire staff members who are let go from major brands due to cost synergies. 

“They are going to start economies of scale, trimming down and letting go of people,” he said. 

He added that the consolidation could also lead to brands that previously had different identities becoming homogenized if all of the agents and brokers are using the same platform and technology. 

“They are all going to start looking the same. So, who is going to be different? Who is going to have that competitive advantage? The independents and the ones that are small enough to rise up and be different in the market and that’s an intangible benefit that w e are not really thinking of,” Lickstein said.