James Dwiggins examines the controversy surrounding the NAR’s residency reforms

In a new episode of the Power House podcast, host Diego Sanchez talks with James Dwiggins, CEO and founder of NextHome and host of the “Real Estate Insider Unfiltered” podcast.

During this conversation, the two explore NextHome’s “people over homes” philosophy and its referral-focused growth efforts. They also check the National Association of Realtors‘ (NAR) elimination of commission cases, agent training deficiencies and more.

This interview is edited for length and clarity. To start the conversation, Dwiggins explains what makes NextHome different from other real estate franchises.

Sanchez: James, how do you differentiate NextHome from other national franchises?

Dwiggins: Since we started the company back in 2014, we were always looking to try to be a little different from the rest of the industry, in the sense that it wasn’t to have tons of agents. It was about the quality of people who shared the same vision of the industry. We have this saying in our company called “people over houses.” That’s our kind of guiding principle.

Sanchez: Let’s talk about that growth path. Often, with franchise organizations, it’s all about the process of selling and bringing in more franchisees.

Dwiggins: About 40% of NextHome’s growth comes from referrals. Someone comes who likes the culture, the company and the way we work. Then they mention other people who would be a good fit for the organization. We also do not understand large estate offices. NextHome is one of the first to create virtual offices, which do not require people to have a brick and mortar location. In general, there are no franchise requirements, which allows us to enter a different market than our competitors.

Sanchez: Can you give our audience a “state of the playing field” for real estate commissions and their impact on payouts?

Dwiggins: We are in the first inning. I think that’s the most important thing for people to understand. As of Aug. 17, we only had a few months to see how things went. There have been many studies showing that compensation is starting to decline – especially on the buyer’s agent side. We don’t know if agents sign buyer representation agreements before showing a property.

The lack of training and guidance by brokerages is dire. They teach their people what the process is. As a result, if the seller does not offer compensation, the buyer and the agent simply move on.

Dwiggins also delves into industry issues surrounding the use of affiliate compensation in other forms.

Dwiggins: Those forms were created by a committee of competing brokerages, which is how we got into the case to begin with. The lawyers even went public in two different interviews and threatened to sue again. Many companies have blocked that. But there is still a conflict going on against the companies that do it.

To close the discussion, Dwiggins explains his advocacy for keeping NAR’s Clear Partnership Policy in place, with minor changes.

Dwiggins: I’m a free guy. But if you’re an MLS member, you have to follow the same rules as everyone else. You can’t pick and choose. If you have to enter an MLS position within 24 to 48 hours, then you play by the same rules.

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