KW tackles commissions questions, tries to calm agent fears 

As the industry transitions to a new way of doing business, there will inevitably be a period of awkwardness and fear, but some brokerages are urging agents to focus on the opportunity change will bring.

During a company-wide town hall event, leaders at Keller Williams answered some of the most commonly asked questions about the $418 million NAR settlement and how it will impact the daily work of its agents. 

They also drove home the point that it's time to look past the fear-mongering and instead develop the right mindset around agent value — something that will be key for agents as they explain the benefits of their services to clients.

"Are we going to up our game, or are we going to focus on fear?" Mark Willis, CEO and president of KW, asked the attendees of the June 10 online event. "Fear inhibits us. It keeps us from operating at our higher self level."

Agents' biggest fear? That buyers won't want to pay for real estate services. To help agents articulate their value to consumers, KW has been offering "Value Squared" trainings — and reinforcing the idea that agents provide an essential service. 

"We offer one of the most important services on arguably the largest transaction that most people enter into in their lifetime, and they need representation," Willis said.

Top concerns: Asking for compensation, signing agreements

So what are agents most unsure about? Many of the questions KW leadership has received in recent weeks revolve around how to include compensation in an offer. NAR has clarified that under the new rules, a buyer can ask the seller to compensate the buyer agent.

But the amount must be determined ahead of time, Wendi Harrelson, president of KWRI-Owned Regions, reminded the audience.

"Let's be clear: Since your buyer's rep agreement states a specific amount… you cannot ask for more at the time of purchase," Harrelson said.

Exactly when an agent must get their buyer to sign an agreement has also caused some confusion, KW leaders noted. Willis stressed that once you start working with a client and expect to get paid for those services, a written agreement needs to be in place. That includes touring homes, even virtually.

Litigation and financing remain hot topics

Other questions focused on the company's $70 million settlement that was approved on May 9 by U.S. District Court Missouri Judge Stephen Bough, along with settlements from RE/MAX and Anywhere, but is currently being appealed by two plaintiffs.

John Clidy, vice president of growth, reiterated that while the settlement ends litigation with home sellers, buyers (who have not also sold a home) are not covered, so there can still be future lawsuits, and current cases like Batton can continue.

VA and FHA financing was also a hot topic at the town hall event, as some in the industry have expressed concern that those borrowers may be harmed by the new NAR rules. The Department of Veterans Affairs has said it will temporarily lift its ban on buyers directly paying for professional real estate representation until the agency determines a formal policy. FHA, Freddie Mac and Fannie Mae will continue to exclude commissions from loan limits.

"These are positive developments regarding these loans that make me excited," Clidy said.

Agents should stop focusing on worst-case scenarios

The future of commissions — specifically, how buyer agents will be affected, and whether they will get paid less — remains the million-dollar question, and continues to cause concern for many real estate professionals.

"This is a change, and change is not comfortable," Willis said. "When we imagine how change is going to turn out in the end, we are typically left to our own imagination, and we are going to think of a worst-case scenario and not a probable scenario."

But that way of thinking is not productive, Clidy said. 

"If we have the right mindset, we're going to be fine," Clidy said. "If you go and let this control you and drive you crazy, it will."