RE/MAX's new president defines the new commissions landscape

April 16, 2024 4:00 AM

Amy Lessinger is taking the reins of real estate giant RE/MAX at a critical time for both the business and its industry at-large.

The Nevada native joined the ubiquitous brand 26 years ago out of college and has since worn about every hat with the brand. After leading a massive team for 15 years, she joined the corporate ranks, becoming president of RE/MAX in February following former leader Nick Bailey's departure.

Amy Lessinger.png — Amy Lessinger. Courtesy of RE/MAX

Lessinger will now guide the brand, which counts over 144,000 agents globally, into the new home buying landscape following commissions settlements, including RE/MAX's own $55 million agreement last year. National Mortgage News recently spoke to her about her journey, her thoughts on today's housing market, and how commission changes will impact buyers, sellers, agents and lender relationships.

RE/MAX also operates Motto Mortgage, a mortgage brokerage franchise brand. Lessinger, in response to questions about the business which today has 246 offices, said it will remain a key part of the RE/MAX's operations. She also declined to comment on real estate agents seeking dual agency roles, citing challenges with regulatory compliance.

This interview has been edited for clarity and length.

What was your journey into this role?

I joined RE/MAX 26 years ago when I was 26. I started right out of college as an agent and I was only in the business 18 months before I joined RE/MAX. Then I became a team leader and in 2005 we opened a RE/MAX brokerage, and grew that over the next 15 years to 135 agents and three offices.

I feel like I've worn every hat. I sold that brokerage four years ago, and had the great opportunity to come over to the headquarter side and use all of that experience to influence how we serve our brokers, our agents and consumers.

Tell us about your role as president at RE/MAX.

I lead all aspects of our network, driving growth worldwide and oversee the development delivery of RE/MAX services to franchisees and agents, and ultimately set the vision and leadership for the brand.

I feel like I have a unique lens given my history. I really do understand what agents go through every single day and what brokers go through every single day, what it takes them to get started, what it takes them to grow, what it takes them to come back after the business knocks them down a little bit.

And of course I understand how to lead through change given we started in 2005, and the market did nothing but crash for the next five years after that. I believe that with change always comes opportunity. Right now we're in a very transitional time in the industry, and I feel very well equipped to lead during this time.

How has this spring home buying season compared to last year, given home prices and interest rates remain elevated?

Affordability and interest rates are certainly always two factors that we watch and depending on the local market, home buyers or sellers might see those prices remaining flat. But a lot of brokers that I've been talking to are seeing an uptick in their activity from the same time last year.

Foundationally, lots of sellers have delayed their need to make a move. But life marches on. And many have finally decided that they can't wait anymore. Their family has grown, or maybe they want to downsize, or maybe they want to retire or they're getting a new job. The fact that they've been in love with their interest rate has allowed them to hold on for a time. But we're seeing an uptick in a lot of our markets. That'll free up some additional inventory. We still see home prices increasing a little bit, just slightly month-over-month, as well as year-over-year.

RE/MAX last year reached a settlement in commissions litigation. Could you tell us more about the business conditions that RE/MAX will implement if the settlement is approved?

Our settlement was announced in September. That was shortly before the Sitzer/Burnett trial began in Missouri. For us it's proven to be a great decision. Had we not settled prior to NAR's proposed settlement, our affiliates would be facing the same liability now confronting Home Services of America and its affiliated companies.

Also, without our settlement in place, the very top RE/MAX brokerages that are over that $2 billion mark in 2022 sales volume would be unprotected. I really feel that the industry has survived so many changes over the years, double-digit interest rates, the Great Recession, where we had such a mass of short sales and REO (real estate owned) properties, the industry adapts.

I believe that any level of commission that was possible before the settlement is and will be possible after it. Commissions have always been negotiable, and ultimately as it always has been the case, it's up to individual brokerages, teams, individual agents to determine what they want to charge, and of course to develop that attractive value proposition to help secure it. We will be able to navigate those changes, and of course, comply.

What’s the biggest change for home buyers and sellers?

These discussions regarding the importance of being represented either as a seller or a buyer are an everyday routine for the lion's share of our agents. We feel a little more prepared. We certainly have created education and resources to bolster our agents' abilities in this area. But certainly I think representation for buyers and sellers is incredibly important, and I think they need to understand what it means.

I recently moved to Colorado two years ago. Even though I've been in the business for 30 years, I hired a professional in the market to represent me because there's so many nuances that happen at the local level. That truly is the essence of what real estate agents provide.

I think this presents an opportunity to deepen the discussion, help buyers and sellers really understand what it means for an agent to have fiduciary responsibilities that they need to uphold so that they make an informed decision about what they want to do.

How will commissions changes affect buyer agents?

It's always been optional for a buyer or seller to have representation. There is nothing requiring that they hire a professional. However, according to NAR, 90% of home buyers and sellers made that choice last year, so I recognize that with the changes comes adaptation. But I still wholeheartedly believe that skilled professionals are prepared to take these changes on through what I believe is one of the most complex transactions possible.

It's important to note that offers of compensation from the seller are still allowed. They just simply can't be communicated via the MLS. The industry will adapt, it will change. But it doesn't mean that a seller can no longer offer that. If they choose not to, their agent can talk to them about those pros and cons.

Then the same thing for the buyer. It's a transparent conversation about how we will navigate this in the event that a seller chooses not to offer compensation, and they can come to terms and decide on the strategy for how they best navigate that situation. But I believe there is massive value in being represented. You do your own taxes, lots of people can, but they choose not to. There's a reason for that.

Industry trade groups have suggested there needs to be some changes regarding Federal Housing Administration and Department of Veterans Affairs loans, given their commissions rules. Are you concerned about those transactions?

I think there is definite opportunity for those organizations to revisit that policy. It's critically important that those segments are not damaged, just given the requirement. But I will say this: certainly agents have navigated this over the years, because there are instances where compensation is not offered, perhaps with a new builder, perhaps with certain MLSes that have had a requirement where they've had the ability to offer zero compensation.

So certainly, this issue has come up before, it does not preclude the ability for them to negotiate. and state their case as to why given the requirement that commission cannot be paid by a buyer for those populations.

First, [regulators] need to revisit these policies and there's opportunity there to make sure that those populations are not disadvantaged. But also, professionals can help navigate that situation on behalf of those buyers, as they have for many years.

The Department of Justice could weigh in on the National Association of Realtors settlement. Are you concerned about federal intervention in the commissions settlements?

I can't speak to that because that is literally between NAR and the DOJ. This was in motion well prior to the settlement. NAR needs to speak to that.

How will real estate agent relationships with lenders evolve with these changes?

When agents and lenders work together, they become an invaluable team to their customer, and it really adds to the customer experience.

The majority of consumers trust referrals from people that they know. (They estimated at the time a 30% higher conversion rate.) Our loan originators will work with real estate offices so that agents can help homebuyers obtain the right program and the right mortgage that fits their individual needs.

That relationship stands to be strengthened particularly in the climate that we're in. There's a lot of opportunity there for lenders to work closely with agents and make things happen on behalf of buyers and sellers that without that teamwork could be compromised.

What are your thoughts on the housing market for the rest of the year?

Folks can only hang on for so long before it's time to make that move they've been wanting to make. That brings the mortgage relationship even closer into the fold because there's lots of different types of mortgages that you can make work depending on your situation.

When I was selling real estate years ago, interest rates were at 8.5%. We used a lot of adjustable rate mortgage products and it became more the go-to, more common than not. With all of the change in the market and interest rates rising, there's been a resurgence of different types of loan products to bridge the gap between the fixed rate versus the rate they have today.

What advice would you share with real estate professionals?

Amidst the noise in the industry, one thing that drives results is focus on serving buyers and sellers out there. Focus on building your business. For lenders, focus on building your pipeline of people who do need to move or refinance. The industry will evolve. That is natural. It has done it since its inception. For professionals out there, elevate your skill set. Keep your focus on serving buyers and sellers.