If you’ve been following real estate news lately, you’re likely aware of the recent settlement between the NAR and plaintiffs, slated to take effect in late July 2024, pending court approval. But what does this mean for agents and coordinators? How can we prepare for the changes ahead? In this blog, we’ll explore the implications of the new deal structure post-NAR settlement and provide actionable steps to navigate deals from both the listing and buying sides.
Before delving into the details, it’s essential to keep three key points in mind regarding the settlement:
- Offers of compensation remain an option for consumers, even off-MLS, through negotiation with real estate professionals.
- You will still be able to advertise seller agent commissions through your owned communications channels but NOT on the MLS directly.
- MLS participants working with buyers will now be required to enter into written agreements with their buyers BEFORE showing them a property.
For those unfamiliar with the terms of the settlement, we recommend reviewing the FAQs provided by the National Association of REALTORS® here.
How to Prepare Your Business
To prepare your business for the new compensation structure, it’s crucial to set clear expectations with both buyers and sellers. Use this opportunity to distinguish yourself in the market by understanding how to leverage these changes to your advantage.
On the listing side, focus on building infrastructure and systems to help sellers grasp key concepts:
- Understand where buyers are coming from.
- Educate sellers on the commission structure.
- Highlight the importance of listing fees.
Ensure transparency by setting expectations for buyer sourcing. If buyers come from your marketing efforts, sellers may need to compensate you for transaction coordination. Alternatively, if buyers have their own agents, sellers should be prepared to cover the buyer agent’s compensation. Recommend concessions if it’s a benefit to the client, but always be ready to explain the rationale behind these decisions.
Anticipate pushback from sellers regarding listing agent fees and be prepared to justify them.
On the buyer side, if you haven’t been doing so already, make sure to sign an Exclusive Buyer Agency Agreement before showing a property. This contract clarifies the agent-client relationship, ensuring transparency and protecting both parties from misunderstandings.
Consider different compensation scenarios for buying agents:
- Request compensation from the seller (buyer not obligated to pay).
- Request compensation from the seller or listing agent (buyer not obligated to pay).
- If neither party covers the compensation, the buyer may need to pay out of pocket, potentially as part of closing costs.
Set clear expectations with buyers regarding potential out-of-pocket expenses if the commission is not covered by the seller or listing agent.
How to talk with buyers and sellers
The way you communicate with clients will be instrumental in your success. Here are some scripts you can edit to address the concerns of both sellers and buyers:
Seller Script
Hi [Seller Name],
The real estate market is constantly evolving, and there’s been a recent development with the National Association of REALTORS® (NAR) settlement that might impact the way commissions are discussed. But don’t worry, my commitment to getting you the best possible outcome on your sale remains unchanged.
Highlighting Your Value:
In this new environment, it’s even more crucial to have a skilled and experienced agent by your side. Here’s how I add value to your selling experience:
- Maximum Exposure: I leverage a proven marketing strategy to attract a pool of qualified buyers, increasing your chances of a quick and profitable sale.
- Expert Negotiation: I have negotiation skills to secure the best possible price for your home, ensuring you get top dollar.
- Streamlined Process: I handle all the paperwork, communication, and legalities, taking the stress off your shoulders.
- Market Knowledge: I stay up-to-date on market trends and pricing strategies, ensuring you make informed decisions.
Addressing Commission Concerns:
With the changes, you might have some questions about fees. Let’s discuss a transparent commission structure that works for you.
Actionable Steps:
I’d love to chat more about how I plan to navigate these changes and how I can get you the best results in this evolving market. Would you be free for a quick call to discuss your specific needs?
Buyer Script
Introduction:
Hi [Buyer Name],
Recently, there have been changes in the real estate industry regarding agent compensation. This might seem confusing, but I want to assure you my dedication to finding your dream home remains the same.
Benefits of Buyer Representation:
Having a buyer’s agent in your corner provides several advantages:
- Market expertise: I can guide you through different neighborhoods, identify properties that meet your needs, and provide valuable insights into the local market.
- Strong negotiation skills: I’ll advocate for your best interests during negotiations, ensuring you get the best possible deal on your new home.
- Seamless communication: I’ll handle all the communication with sellers and agents, saving you time and frustration.
- Protection throughout the process: I’ll guide you through every step of the buying journey, ensuring a smooth and successful transaction.
Addressing Compensation:
Under the new structure, there are different ways my services can be compensated. We can discuss options that work best for your situation.
Actionable Steps:
Let’s schedule a meeting to discuss your home-buying goals and how I can help guide you through this exciting experience.
Remember that these are just templates. Feel free to personalize them based on your individual approach and communication style.
Closing Thoughts
The key to success in this evolving environment is in building trust and transparency with your clients. By effectively communicating your value proposition and leveraging tools like ListedKit’s client portal, you can empower your clients to stay informed and involved throughout the transaction. ListedKit’s mobile-first platform provides a secure space for clients to access documents, track progress, and ask questions, fostering a collaborative relationship throughout the buying or selling process.
By embracing these changes, honing your communication skills, and utilizing technology to enhance the client experience, you can position yourself as an indispensable resource in the new real estate landscape.
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