Agents must get on board with the ‘new way’ of doing business
In just a few months, new compensation and buyer agreement mandates will kick in. Agents who are ready to adopt them will succeed more quickly.
Key points:
- During a T3 Sixty webinar, CEO Jack Miller talked about what agents and brokerage firms should prioritize in preparation for rule changes coming in July.
- First things first: Have your buyer agreement ready, and make sure compensation is clearly spelled out.
- Don’t just look for workarounds — they’ll slow you down and may get you in trouble.
As the real estate industry moves through a period of transition following NAR's Mar. 15 settlement announcement, those who embrace "the new way" will succeed more quickly than those who try to find workarounds for the old way.
That was one of the main messages coming out of Straight Talk on the NAR Settlement, a webinar hosted by real estate consultancy T3 Sixty on March 29. (Note: T3 Sixty and Real Estate News share a founder, Stefan Swanepoel.)
It's been two weeks since the National Association of Realtors reached its $418 million deal in the commission lawsuits, but the rule changes mandated by the settlement agreement will be here before you know it, said T3 Sixty CEO Jack Miller — so get ready for them.
The new way of working with buyer clients
Miller advised brokerage leaders and agents to focus on negotiating a fee and getting a buyer agreement in place right away, noting that it doesn't have to include every detail. That will allow buyer agents to better serve clients, instead of wasting time and energy calling listing agents to ask about seller concessions that could go toward compensation.
"What you're being paid is not being governed by that," Miller said, referring to what will soon be the "old way" of handling commission fees. "It is interesting to know [if a home seller is willing to offer compensation], but it's being governed by what you sign in your buyer agent agreement."
In other words, by around the end of July, the buyer agent agreement will be a critical step in ensuring that agents are compensated. For those who have little or no experience with buyer agreements, it's not uncharted territory, said Dean Cottrill, who leads the brokerage and team consulting division at T3 Sixty.
"It's all about sitting down and presenting value, getting the buyer understanding all the things you're going to do in the process [of buying a home]," Cottrill said. "It's been done every day in a lot of states. So just know that's the case, and then move confidently in that direction — very quickly."
Don't try to get clever with workarounds
While agents are allowed to mention compensation on their brokerage websites, they can no longer do so through the MLS — and Miller cautioned against trying to use another type of forum to get around that prohibition, like a Facebook group, saying that will only lead to trouble.
"That's just recreating the system that we have had that is exactly what the DOJ has been critical of," Miller said, adding that the Department of Justice — as well as lawyers looking for opportunities to file a new class action lawsuit — will be closely watching to see if that's happening.
The buyer agreement is the final word
Miller also emphasized that brokerages and agents cannot accept compensation beyond what is spelled out in the written agreement with the buyer. If the seller — say, a home builder — is willing to offer a bonus to an agent in order to close the deal, the agent needs to go back to the buyer and rework the original agreement.
"You can be compensated more, but everything is predicated on the buyer agreeing to the services and to your compensation," Miller said.
The reason for this, Miller added, is that the DOJ doesn't want the possibility of a bonus to influence which properties an agent will show.
"So that's why they're saying you're only compensated what your buyer has agreed to," Miller said. "It's a big deal."
