Since becoming CEO of eXp Realty in April, Leo Pareja has put one task above all others: ensuring that eXp’s 72,000 U.S. residential agents are prepared for Aug. 17, when practice changes go into effect following NAR’s proposed settlement that would resolve class action claims brought by home sellers related to broker commissions.
At every step, Pareja has approached change boldly and strategically. He was Keller Williams’ top agent worldwide before transforming himself into a leading REO specialist during the Great Recession. In 2012, he co-founded Washington Capital Partners, a hard-money lender for investors, and just four years later, he co-founded the MLS platform Remine. The company was purchased by a group of MLSs in 2021, and he joined the eXp executive team in 2022.
“My parents taught me to take carpe diem to heart,” Pareja told REALTOR® Magazine back in 2011. “I truly believe this life is about the journey, not the destination. I want my legacy to be the lives I impacted and changed, not the number of houses I sold.”
REALTOR® Magazine spoke with Pareja about the practice changes and the work he’s doing to help not just eXp but the entire industry move forward, one step at a time.
How are you approaching questions about the practice changes at eXp?
We’re less than two weeks away from implementation. This is what I’ve been calling the “messy middle.” I’m hyper focused on providing operational excellence to our agents. I need to empower them as quickly as possible with as much information and as many tools as possible. We’re reaching them anywhere and everywhere. The eXp buyer toolkit [accessible to all] has been very well received.
(Editor’s Note: At NAR’s central hub for all things related to the proposed settlement, facts.realtor, scroll down to “Consumer Resources” for information you can share with buyers and sellers.)
The most important thing is to make sure people are aware of the actual rule changes and about how to support consumers through the process. What are the guidelines—and how do we support practitioners, who then support consumers in a transaction that is infrequent, very expensive and highly emotional. Agents play a pivotal role in that process.
I’m less inclined to tell you how to do things. We are a platform that enables entrepreneurs to build whatever size dream they want while also helping families in the real estate industry. I tell our agents, “As long as its legal, ethical and enforceable under the rules of engagement, I’m here to support you.”
Dwelling on how you feel about something isn’t the most productive. I disagree with the plaintiffs’ attorneys and how it all played out, but these are the new rules that are going into effect. The question I ask myself is, “Do I still want to participate in this marketplace and support families in what I think is the most important transaction of their life? And if the answer is yes, these are the new rules I have to play within.
What is your thinking on how to approach compensation?
Everyone is going to make their own business decisions and determine what is best for them and their companies. Broker-to-broker commission sharing is what we’re not allowed to do on the MLS going forward. Those apparatuses that we grew up with are gone. If the goal is to have the buyer directly negotiate a fee with the buyer’s agent and have that be part of the transaction, then let that be part of the transaction.
I firmly believe in cooperation. We are a cooperative industry. A decision to offer compensation must be at the direction of the seller. Seller can very well instruct us to promote that they are willing to pay a buyer broker compensation because that’s what the market supports, and I think it’s the agent’s fiduciary responsibility to point that out during the listing presentation.
How do you see this playing out long term with respect to buyer representation?
Buyer representation is extremely important. Each side needs their own legitimate representation.
One of the things we’ve been saying is we need to have the discipline and the rigor to make sure we treat buyers the same way we treat sellers in terms of explaining the process and the services we provide. You do a presentation, you provide and lay out your menu of services and what you’re willing to do and not do, and you have a discussion about what you charge for those services. Buyer agents invest time, energy and resources, and there should be a commitment from the consumer in terms of what they’re willing to pay for that.
Taking carpe diem to heart, do you have any final advice for readers navigating these transitional times?
We’re going to digest and process information as we get it, whether it’s from the National Association of REALTORS®, the Department of Justice, or the states. It’s going to be state by state, market by market, to really understand what best practices will evolve.
Be sure to regularly check facts.realtor for useful resources and the latest news on the proposed settlement.
