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Broker-to-Broker Comp Is Dead in SC — Here's the New Playbook for Getting Paid · Dishin' Dirt with Gary Pickren

• 0:01
  SPEAKER_00: This is Dish and Dirt with Gary Pickering, South Carolina's only podcast dedicated to the real estate agent craft.
• 0:09
  SPEAKER_00: And now the host of Dish and Dirt, Gary Picker.
• 0:24
  SPEAKER_00: And you can already feel the change in the weather.
• 0:26
  SPEAKER_00: About to hit that daylight savings time.
• 0:28
  SPEAKER_00: We're going to have a little bit more sunlight after work, get back to some more golf.
• 0:31
  SPEAKER_00: So really excited about this.
• 0:32
  SPEAKER_00: But we're also getting to be that time of year where we're in the spring selling season.
• 0:37
  SPEAKER_00: So everybody's going to be very, very busy here in the next couple months, and we're very happy to see that the real estate market is off to a great start.
• 0:43
  SPEAKER_00: Before we begin today, we do need to talk about Fen CEN.
• 0:47
  SPEAKER_00: I will spend a quick minute on that because we're now into March.
• 0:50
  SPEAKER_00: And as y'all know, March 1st, Fen CEN became real.
• 0:53
  SPEAKER_00: Some people thought Fen CEN would get delayed, and we kind of believed it would not.
• 0:56
  SPEAKER_00: And so here we are now in March with Fen CEN and it cannot be ignored.
• 1:00
  SPEAKER_00: But for you as a real estate agent, it's very easy.
• 1:03
  SPEAKER_00: If you're working with the buyer that is some type of corporate entity like an LLC or a trust, and that buyer is paying cash or using a non-traditional lender, they're using some hard money lender type deal, then that's going to be a fence in situation.
• 1:18
  SPEAKER_00: And when you find yourself in a fence in situation, you need to inform your buyer that they are now in a fence in reporting type transaction.
• 1:26
  SPEAKER_00: It's going to take them more money and more time to get that process done.
• 1:30
  SPEAKER_00: They're going to provide a lot of information to the closing attorney, whether they want to or not.
• 1:35
  SPEAKER_00: You need to notify the buyer of what's happening, and then you need to notify the closing attorney as soon as you give them the contract that this is a possible fence-in situation.
• 1:43
  SPEAKER_00: So that the closing attorney can go ahead and start their process of going ahead and getting all this information together.
• 1:49
  SPEAKER_00: And believe me, it's a lot of information.
• 1:51
  SPEAKER_00: I could take anywhere between an hour and 45 minutes and two hours to complete the form that's necessary to submit.
• 1:58
  SPEAKER_00: We need to make sure that everybody's on the same page here.
• 2:01
  SPEAKER_00: There is no workaround to this.
• 2:02
  SPEAKER_00: Please don't call the law firm trying to figure out a way to work around this or try to come up with a workaround on your own.
• 2:08
  SPEAKER_00: The penalties and fines are astronomical.
• 2:11
  SPEAKER_00: No one needs to try to figure out some way of getting around this.
• 2:14
  SPEAKER_00: Don't tell them to not put in the LLC now or don't put in the trust now.
• 2:18
  SPEAKER_00: Let's just close it in your name and then we'll come back after and do a simple deed because when they do that deed, then they'll have to report, and then you may be responsible for reporting it.
• 2:25
  SPEAKER_00: Don't want to put yourself in that situation.
• 2:27
  SPEAKER_00: Don't tell them that they need to go find another closing attorney that this is the first you've ever heard of this, or that this is the only firm that's making you do it, or I know a firm who won't make you do it.
• 2:37
  SPEAKER_00: Everybody has to do it.
• 2:39
  SPEAKER_00: This is not an optional thing.
• 2:40
  SPEAKER_00: The federal government is absolutely serious about this.
• 2:43
  SPEAKER_00: That's it.
• 2:44
  SPEAKER_00: Sorry.
• 2:45
  SPEAKER_00: Real easy for you because all you have to do is remember those simple rules.
• 2:49
  SPEAKER_00: And if it falls into that, notify the closing attorney and let your buyer know.
• 2:52
  SPEAKER_00: And then don't put your foot in your mouth by telling them that there's a way to work around this or you don't have to do it.
• 2:57
  SPEAKER_00: So now we're a mere week out from broker-to-broker compensation being no longer part of the South Carolina Realtor Forums.
• 3:04
  SPEAKER_00: In essence, this means we're about a week away from broker to broker essentially being over in South Carolina.
• 3:10
  SPEAKER_00: This follows the footsteps of EXP, who immediately upon the settlement being announced in the Sitzer case came out and said they were no longer going to do broker-to-broker compensation.
• 3:20
  SPEAKER_00: It was then followed by James Dwiggins and his company at Next Home, who came out very shortly thereafter and said the same thing.
• 3:25
  SPEAKER_00: LaMaccia also said the same thing nationwide.
• 3:29
  SPEAKER_00: And then after that happened, then we saw local companies like ERA Water Realty, Olivia Cooley Real Estate, and many, many others come out and end broker-to-broker compensation.
• 3:37
  SPEAKER_00: The positives here are so numerous on getting rid of broker-to-broker compensation.
• 3:42
  SPEAKER_00: And please understand, once again, we're not saying it's illegal to do broker-to-broker compensation.
• 3:46
  SPEAKER_00: But when your Realtors Association says it's not worth the risk, and the major companies in your market are also moving away from it, do you want to be that person that says, I'll buck the trend and hope that I won't get sued?
• 3:58
  SPEAKER_00: No, the positives are way too numerous here.
• 4:00
  SPEAKER_00: This is great news because it's moving the commission negotiation away from the listing agreement time and it's moving it to when it needs to be, which is at the contract.
• 4:10
  SPEAKER_00: This is no different than negotiating closing costs.
• 4:12
  SPEAKER_00: It's the same thing.
• 4:13
  SPEAKER_00: It's negotiating commissions.
• 4:14
  SPEAKER_00: That should be done when we're negotiating a contract, not when we're doing a listing.
• 4:18
  SPEAKER_00: It's a lot more transparent.
• 4:20
  SPEAKER_00: It's a lot more client-centric.
• 4:22
  SPEAKER_00: We're no longer trying to lock a seller into paying for some unknown buyer agent commission before even seeing an offer.
• 4:29
  SPEAKER_00: Why listing agents were so hellbent on trying to figure out how much a client was going to pay a buyer's agent who wasn't you, didn't put money in your pocket, did nothing for you, didn't help you sell a house as some people think it did.
• 4:41
  SPEAKER_00: I don't know.
• 4:41
  SPEAKER_00: But that was it.
• 4:42
  SPEAKER_00: But most importantly, and this is the most important aspect of what South Carolina realtors are doing, is it ends the perception that you are trying to protect buyer agent commissions.
• 4:53
  SPEAKER_00: None of it mattered anyway, because commissions, even under broker-to-broker compensation, wasn't guaranteed.
• 4:58
  SPEAKER_00: And secondly, a buyer agent could only get what was in the buyer agency agreement.
• 5:02
  SPEAKER_00: But the problem was the perception was becoming reality.
• 5:05
  SPEAKER_00: And it was allowing for a lot of the media and a lot of the real estate media to still make this argument that somehow, even though we didn't have guaranteed compensation anymore in the MLA, that by you offering broker-to-broker compensation, you were propping up buyer agent commissions.
• 5:20
  SPEAKER_00: And it really wasn't true because it wasn't guaranteed, but in some ways it might have been true.
• 5:24
  SPEAKER_00: I mean, you're sitting here arguing for a buyer agent compensation before we even have a contract, before we even have an offer, before we even know they want compensation.
• 5:32
  SPEAKER_00: So it just didn't make any sense while we were doing it anymore once compensation was no longer guaranteed.
• 5:38
  SPEAKER_00: In fact, good agents didn't even care what you were offering.
• 5:41
  SPEAKER_00: It made no difference to the top agents.
• 5:43
  SPEAKER_00: You could be offering only X, which would be less than the agreement that they have between the buyer and the buyer's agent, but that didn't stop a buyer or buyer's agent for asking and trying to negotiate for the compensation as part of the contract.
• 5:55
  SPEAKER_00: It was completely irrelevant what your seller said they would pay and what they were willing to pay and what they actually did pay.
• 6:03
  SPEAKER_00: So if you had a seller that says, I'm not paying compensation, that didn't mean that a buyer couldn't ask for it and negotiated as part of their transaction.
• 6:10
  SPEAKER_00: And a lot of times the seller agreed to pay it because the numbers worked out so well.
• 6:14
  SPEAKER_00: One of the problems with broker-to-broker was that if your listing agent said X with half going to the buyer's agent, but then the buyer's agent didn't ask for any compensation, where did the balance go?
• 6:25
  SPEAKER_00: The seller never expected all of X to be kept by that listing agent.
• 6:29
  SPEAKER_00: They expected only half of it to go to the listing agent because they were expecting the other half to go to the buyer's agent.
• 6:35
  SPEAKER_00: But the problem was the way the agreement was written, it said up to blank percent to go to the buyer's agent.
• 6:41
  SPEAKER_00: So if zero went to the buyer's agent, then the remaining portion stayed with the listing agent.
• 6:46
  SPEAKER_00: And I can guarantee you that no seller expected you to get the hole when they were not paying any buyer agent commission.
• 6:52
  SPEAKER_00: But we saw many agents keep that hole or try to negotiate a portion of that hole and it pissed off a lot of sellers.
• 6:59
  SPEAKER_00: And so when you start pissing off sellers, that's when lawyers start getting involved.
• 7:03
  SPEAKER_00: Now, of course, whenever there's a massive upheaval in the market or there's a change in our industry, that's when it comes with consternation and questions.
• 7:11
  SPEAKER_00: And over the past few days, I've had a lot of phone calls and a lot of text messages asking or complaining about the end of broker to broker.
• 7:18
  SPEAKER_00: Those who are complaining just don't understand what the change actually does.
• 7:22
  SPEAKER_00: And some of the questions I've gotten over the last couple of weeks include these.
• 7:26
  SPEAKER_00: This is pro-listing agent, isn't it?
• 7:28
  SPEAKER_00: This is anti-buyer agent, isn't it?
• 7:30
  SPEAKER_00: I should stay on the listing side and not do any more buyers.
• 7:32
  SPEAKER_00: Will this cause buyer agents to try to steer to higher commissions that are being offered?
• 7:36
  SPEAKER_00: Of course, there are no commissions being offered now.
• 7:38
  SPEAKER_00: Am I prevented from even discussing the seller that the fact that the buyer will ask commission to be paid?
• 7:43
  SPEAKER_00: These are questions that we're seeing that agents are showing they don't understand the concept of ending broker to brokers.
• 7:49
  SPEAKER_00: What I'm going to do today is I'm going to address how this works moving forward from both the listing agent side and the buyer agent side.
• 7:57
  SPEAKER_00: And what we're seeing is I actually had an agent call me from the coast and said, these agents are still telling their sellers, if you don't offer this amount, then no one's going to buy your house.
• 8:06
  SPEAKER_00: They're not even understanding the concept that once the multiple listing service no longer guaranteed compensation, it didn't really matter what you wanted.
• 8:14
  SPEAKER_00: But we're having agents who don't even know how to explain compensation post-Sitzer Burnett, who certainly aren't going to understand how to do this post-broker-to-broker ending.
• 8:23
  SPEAKER_00: Let me start today with the listing agent.
• 8:26
  SPEAKER_00: You are no longer going to commit the seller to paying the buyer agent any amount at the listing agreement signing.
• 8:34
  SPEAKER_00: Your only concern when you're going over the listing agreement is what your compensation is going to be for your work.
• 8:41
  SPEAKER_00: This is not going to result in a decrease of listing commissions.
• 8:44
  SPEAKER_00: Quite the contrary, we have not seen any decrease in commissions amongst brokerages that are not doing broker-to-broker compensation.
• 8:51
  SPEAKER_00: I have talked with my EXP friends, my next home friends, my Olivia Cooley friends, my ERA friends, and they're all saying the same thing.
• 8:58
  SPEAKER_00: Their commissions have not gone down.
• 8:59
  SPEAKER_00: In fact, several of the top agents in the Carolinas have said it's actually a lot easier now to get paid what they want, even more than they had been charging in the past, because you're not asking for your side and the buyer's agent side.
• 9:14
  SPEAKER_00: You're only asking for your side.
• 9:15
  SPEAKER_00: When you're only asking for your side, that number's a lot less than when you were asking for your side and the buyer's side.
• 9:20
  SPEAKER_00: In fact, one of the top agents in the Carolinas has already told me he's gone up a half a point on his commission on the listing side because he says, quote, I'm the best.
• 9:28
  SPEAKER_00: If they want to work with the best, they're going to pay for it.
• 9:30
  SPEAKER_00: And he says, I don't get any pushback because I'm not asking for my side and the buyer's side now.
• 9:34
  SPEAKER_00: I'm just asking for my side.
• 9:35
  SPEAKER_00: And my side was half plus a little bit more, and it's still a lot less, less than when you were paying for both sides.
• 9:41
  SPEAKER_00: It's a lot like advertising$4.99 instead of$5.
• 9:46
  SPEAKER_00: It's only a penny, but mentally it seems a lot less.
• 9:49
  SPEAKER_00: Half a commission is in fact a lot less.
• 9:52
  SPEAKER_00: And it may end up being the exact same, but it all depends on what's being negotiated with the buyer at the time of the contract and not at the time of the listing.
• 10:00
  SPEAKER_00: The seller's is hearing half of what they normally paid, and they're giving them hope that maybe they won't have to pay the other half.
• 10:07
  SPEAKER_00: Maybe it'll be less than the other half.
• 10:09
  SPEAKER_00: It's a lot easier sales proposition when you're not trying to ramrod somebody into paying your commission and somebody else.
• 10:16
  SPEAKER_00: Now, once you set your commission, you need to go ahead and have that discussion with your seller about buyer commission.
• 10:23
  SPEAKER_00: The seller is likely to ask how the buyer side is going to get paid.
• 10:28
  SPEAKER_00: Do I have to pay the buyer's agent?
• 10:30
  SPEAKER_00: The answer is no, you don't have to pay anything.
• 10:32
  SPEAKER_00: But here's the key most buyers, particularly in South Carolina and particularly in our price points in South Carolina, will need help paying buyer commission.
• 10:42
  SPEAKER_00: They may ask you to pay some, they may ask you to pay all, but they may also ask you to pay none.
• 10:47
  SPEAKER_00: You're not locked into paying anything today as we go over this listing agreement.
• 10:52
  SPEAKER_00: It's all going to be negotiated based on the buyer's offer.
• 10:56
  SPEAKER_00: And I'm going to provide you with a net sheet so that you can see what each offer means and what you'll put in your pocket.
• 11:02
  SPEAKER_00: The best offer is not always the highest offer.
• 11:05
  SPEAKER_00: In fact, I would go ahead and show them how a net sheet works during your listing presentation.
• 11:11
  SPEAKER_00: I would even have some examples already done on several net sheets and show them how things work.
• 11:17
  SPEAKER_00: One of the things I might do is have an example showing them how the highest offer is not necessarily the best offer.
• 11:22
  SPEAKER_00: For example, you could have a net sheet that shows a$305,000 offer that actually would be worse of a net than a$295,000 offer when that$305,000 offer is asking for$15,000 in commissions and concessions and the$295 is asking for nothing.
• 11:39
  SPEAKER_00: So you can go ahead and show them how the highest offer is not anymore necessarily going to be the best offer.
• 11:45
  SPEAKER_00: We have to look at the net.
• 11:46
  SPEAKER_00: What are we being asked to pay?
• 11:48
  SPEAKER_00: It's no different than closing costs, guys.
• 11:51
  SPEAKER_00: $305 and$295 could be two different offers depending on what they were asking for closing costs prior to the Cits of Burnett.
• 11:58
  SPEAKER_00: But go ahead and let your seller know this is how it's going to work.
• 12:00
  SPEAKER_00: You need to educate your seller.
• 12:02
  SPEAKER_00: And by educating your seller, you're also showing your seller something your seller doesn't even know or understand.
• 12:07
  SPEAKER_00: So you're showing your value.
• 12:09
  SPEAKER_00: If the seller asks you, can I just go ahead and commit now to an amount, even though we don't have broker-to-broker compensation?
• 12:14
  SPEAKER_00: And you can go ahead and advertise that on social media.
• 12:16
  SPEAKER_00: Now there's nothing illegal or improper about doing that, but my answer would be no.
• 12:21
  SPEAKER_00: Again, why are you committing yourself to pay any amount before we see an offer?
• 12:26
  SPEAKER_00: It's not a binding offer, anyways.
• 12:29
  SPEAKER_00: Anything you're out there advertising for your seller is 100% not binding.
• 12:33
  SPEAKER_00: And any buyer's agent worth a damn knows that.
• 12:36
  SPEAKER_00: I mean, you can go out there and advertise all over the place what you're willing to pay, but any buyer's agent looking at should say, I don't care what they say they're offered to pay.
• 12:45
  SPEAKER_00: It has no bearing on what my client's going to offer.
• 12:48
  SPEAKER_00: My client's going to offer what they want to offer in terms of price, in terms of concessions, in terms of commissions.
• 12:53
  SPEAKER_00: That's it.
• 12:54
  SPEAKER_00: It's not binding.
• 12:55
  SPEAKER_00: So why do you even need to advertise a number?
• 12:57
  SPEAKER_00: Secondly, this is where the lawsuits happen.
• 13:00
  SPEAKER_00: This is where lawyers get involved and they start looking at it and say, these guys are still out there offering guaranteed compensation.
• 13:06
  SPEAKER_00: Again, it doesn't matter that it's not really guaranteed.
• 13:10
  SPEAKER_00: It's the perception of it.
• 13:11
  SPEAKER_00: And all they have to do is convince a jury.
• 13:12
  SPEAKER_00: And remember, the jury in Sitzer Burnett, only one of the people had even bought a house.
• 13:16
  SPEAKER_00: So they don't understand it.
• 13:17
  SPEAKER_00: They don't want to understand it.
• 13:18
  SPEAKER_00: They just don't like the way it looks.
• 13:20
  SPEAKER_00: But lastly, you aren't selling houses because you are offering non-binding, non-guaranteed commission to any buyer.
• 13:29
  SPEAKER_00: Please give yourself more credit than that.
• 13:31
  SPEAKER_00: If you think the only reason, the only way you can sell a house is you have to offer buyer broker compensation, then you either are not giving yourself enough credit for your skills, or maybe you just flat out suck at real estate and you shouldn't be in there.
• 13:45
  SPEAKER_00: Go back to my original statement where we're dealing with four and five million dollar houses along the coast, and the listing agent is telling the seller that you have to offer X to the buyer's agent, or we won't be able to sell your house because all these other houses are offering broker compensation at X.
• 14:01
  SPEAKER_00: How incompetent is that agent?
• 14:04
  SPEAKER_00: How incompetent that they don't understand that none of those offers that anybody else has listed on their house is guaranteed.
• 14:11
  SPEAKER_00: It doesn't matter what they're offering or saying they're going to offer.
• 14:14
  SPEAKER_00: It's all negotiated at contract.
• 14:16
  SPEAKER_00: Telling your seller you have to offer X because everybody else is offering X either tells me you don't know what you're doing as an agent, so I shouldn't hire you, or you're flat out lying to your seller because you're lazy and you just want to get it done this way.
• 14:28
  SPEAKER_00: Either way, it's not a good look for you because all commissions are negotiable.
• 14:32
  SPEAKER_00: So no buyer or buyer agents looking at your offer and thinking to themselves, well, this house, you know, we would have an offer on this one, but they're not offering enough compensation, so we're not going to make an offer.
• 14:42
  SPEAKER_00: That's not how it works in the post-sitzer Burnett world.
• 14:45
  SPEAKER_00: What you need to tell your seller is do not say no before you know.
• 14:50
  SPEAKER_00: Let's see what offers come in and what they ask for.
• 14:53
  SPEAKER_00: Right now, you're obligated to pay me X and you're obligated to pay zero to the buyer side.
• 14:58
  SPEAKER_00: That's it, zero.
• 15:00
  SPEAKER_00: You have no obligation to pay a buyer's agent.
• 15:02
  SPEAKER_00: But depending on what the buyer offers, then we'll determine what you might want to pay.
• 15:07
  SPEAKER_00: It may stay at zero.
• 15:08
  SPEAKER_00: The buyer may come in and say, I don't need help with your compensation.
• 15:11
  SPEAKER_00: On the other hand, if the offer's very good or great and it asks for a commission, it could come in at X, Y, or Z.
• 15:17
  SPEAKER_00: We don't know what that commission can be.
• 15:19
  SPEAKER_00: It could be zero, it could be X, it could be Y, it could be Z.
• 15:22
  SPEAKER_00: We'll figure that out based on the offer.
• 15:23
  SPEAKER_00: But here's the thing, seller, you don't have to accept any offer that doesn't net you what you want.
• 15:29
  SPEAKER_00: Well, right now, today, as we sign this listing agreement, we don't know if the buyer is even going to ask for anything.
• 15:35
  SPEAKER_00: So why would we go out there and advertise what we're gonna do?
• 15:38
  SPEAKER_00: Only thing that an agent should be doing on the listing side is advertising that the seller is willing, willing to entertain any offer, including offers for concessions and commissions.
• 15:49
  SPEAKER_00: If some buyer's agent stupidly called me and goes, What are you offering?
• 15:52
  SPEAKER_00: My comment back would be, we're willing to entertain any concessions or any commissions, put it in your offer, put it in your Form 120, and send it over.
• 16:01
  SPEAKER_00: Why would I tell them a number?
• 16:02
  SPEAKER_00: Why am I bidding against myself?
• 16:04
  SPEAKER_00: All I need to do is tell him I'm willing, which kind of brings me up to that stupid drop-down box that a lot of MLSs are adding now.
• 16:11
  SPEAKER_00: And it says, yes or no, is your seller willing or not to consider concessions?
• 16:16
  SPEAKER_00: Check yes or no.
• 16:17
  SPEAKER_00: As a listing agent, if you ever check the word no, you should turn your license in because you're not smart enough to be in real estate.
• 16:24
  SPEAKER_00: Because what you've just done is you told more than half of the market that you aren't even willing or interested in seeing their offer.
• 16:31
  SPEAKER_00: You don't even want to see it because we're already telling you we're not willing to negotiate.
• 16:35
  SPEAKER_00: It's take it or leave it.
• 16:37
  SPEAKER_00: And the reality of it is, is that's not how it works.
• 16:40
  SPEAKER_00: You need to be talking to your sellers and say, we're going to check the box yes here because we don't even know what their offer is.
• 16:46
  SPEAKER_00: They may come in at 125% of what we asked for and ask for you to pay commissions.
• 16:51
  SPEAKER_00: Would you do it then?
• 16:52
  SPEAKER_00: Yeah.
• 16:52
  SPEAKER_00: So why would you say no?
• 16:53
  SPEAKER_00: You're not willing to entertain any concessions or commission offers.
• 16:56
  SPEAKER_00: You have to be willing to entertain every offer.
• 16:58
  SPEAKER_00: In fact, it's quite frankly, it's the law.
• 17:00
  SPEAKER_00: You have to present any offer.
• 17:01
  SPEAKER_00: So telling the majority of the market that you aren't even willing or interested in entertaining any offer with a concession or commission when you don't even know what the issue is, just basically screams incompetency.
• 17:12
  SPEAKER_00: I mean, damn, people, it ain't that hard.
• 17:14
  SPEAKER_00: This is not that hard.
• 17:16
  SPEAKER_00: I don't understand why we continue to screw ourselves in this and make it hard.
• 17:19
  SPEAKER_00: On these drop-down boxes, yes, you're willing to entertain any offer with concessions and commissions.
• 17:25
  SPEAKER_00: That's simple.
• 17:25
  SPEAKER_00: That's how meaningless this box should be.
• 17:28
  SPEAKER_00: Every single person should check the box, yes.
• 17:31
  SPEAKER_00: The fact that anyone is checking the box no's just shows me a level of incompetency in understanding this.
• 17:36
  SPEAKER_00: Brokers, you've got to teach your agents this.
• 17:39
  SPEAKER_00: Tell every one of your agents, check the box, yes.
• 17:41
  SPEAKER_00: You're always willing to consider concessions.
• 17:45
  SPEAKER_00: You need to teach your sellers how to understand this.
• 17:48
  SPEAKER_00: If you have a seller that says, I'm not willing to entertain concessions or commissions, they're telling us they're not willing to negotiate, which means you're never going to sell this house.
• 17:56
  SPEAKER_00: Lastly, listing agents.
• 17:57
  SPEAKER_00: When a buyer agent who doesn't know what they're doing asks you what you're offering, the only thing you need to say is my client is willing to entertain any and all offers, including offers for commissions and concessions.
• 18:10
  SPEAKER_00: Please put it in a contract Form 123.
• 18:12
  SPEAKER_00: Do not engage them on percentages.
• 18:14
  SPEAKER_00: If they say, well, you pay X percent or Y percent, say, I don't know.
• 18:18
  SPEAKER_00: I have no earthly idea what my seller will do.
• 18:22
  SPEAKER_00: It all depends on the offer.
• 18:23
  SPEAKER_00: Send me the offer if you want it in there.
• 18:25
  SPEAKER_00: And then you'll put it in a net sheet and you'll send it to your seller and your seller will look at it and determine whether or not they like it.
• 18:30
  SPEAKER_00: It's that simple.
• 18:31
  SPEAKER_00: It's not hard.
• 18:32
  SPEAKER_00: I have talked to agents all the time that argue that they have to know so they can make their offer.
• 18:38
  SPEAKER_00: I got to know what they're willing to pay.
• 18:40
  SPEAKER_00: You don't know what they're willing to pay.
• 18:42
  SPEAKER_00: Why would a seller show you all my cards?
• 18:43
  SPEAKER_00: I'm not going to tell you what I'm willing to do before you even offer it.
• 18:46
  SPEAKER_00: When top agents in South Carolina, like Will Sawyers and the Patrick O'Connors and the Olivia Cooley's and the Lupez and the Taylor, and all of these people are out there not doing this.
• 18:56
  SPEAKER_00: Why is it you think you need to?
• 18:58
  SPEAKER_00: The top agents aren't calling you asking you what you're offering.
• 19:01
  SPEAKER_00: They don't care what you're offering.
• 19:03
  SPEAKER_00: They're going to submit an offer to you asking you what they want.
• 19:06
  SPEAKER_00: That's simple.
• 19:07
  SPEAKER_00: We make this way too hard.
• 19:09
  SPEAKER_00: It's not this hard on the seller side.
• 19:11
  SPEAKER_00: We'll worry about the buyer when we negotiate the contract.
• 19:14
  SPEAKER_00: Now let's talk about the buyer side.
• 19:16
  SPEAKER_00: Nothing about ending broker-to-broker compensation is anti-buyer agent.
• 19:20
  SPEAKER_00: In fact, I think it helps buyer agents.
• 19:22
  SPEAKER_00: You don't need to stop working with buyers.
• 19:24
  SPEAKER_00: This is not tilted toward listing agents getting paid and you not getting paid.
• 19:28
  SPEAKER_00: The bottom line is the listing agent shouldn't care at all what you get paid.
• 19:32
  SPEAKER_00: Quite frankly, I don't think they ever did.
• 19:34
  SPEAKER_00: They only did because that's the system.
• 19:36
  SPEAKER_00: Under the old system, I would agree with you.
• 19:39
  SPEAKER_00: Under the old system, the MLS guaranteed commission to the buyer agent from the listing agent.
• 19:43
  SPEAKER_00: And buyer didn't determine how much you got paid.
• 19:45
  SPEAKER_00: It was determined by the listing agent.
• 19:47
  SPEAKER_00: And that was a terrible system.
• 19:48
  SPEAKER_00: I can remember how many of you called me over the years complaining that it should be illegal that the listing agent isn't offering you the full amount.
• 19:56
  SPEAKER_00: He's only offering you half or two-thirds of your commission of what you called your normal or your standard commission rate.
• 20:01
  SPEAKER_00: The fact was, your question was what was illegal.
• 20:04
  SPEAKER_00: And the fact that you were calling me saying that they have to pay me X because that's the standard, that's antitrust.
• 20:10
  SPEAKER_00: That fed right into Ketchmark's argument that it was all antitrust, what you were doing.
• 20:16
  SPEAKER_00: There was no standard set commission.
• 20:17
  SPEAKER_00: And calling me or other lawyers and saying, I don't like that this real estate agent's not paying my full commission with his guaranteed commission was stupid that you asked that.
• 20:27
  SPEAKER_00: Your question was absolutely illegal.
• 20:29
  SPEAKER_00: And that's what got this system in trouble in the first place.
• 20:31
  SPEAKER_00: But post-its of Burnett, your compensation was guaranteed, but not by the seller, not by the listing agent.
• 20:38
  SPEAKER_00: Your commission was guaranteed by the buyer.
• 20:40
  SPEAKER_00: You and the buyer had a buyer representation agreement that said what you got paid.
• 20:45
  SPEAKER_00: Period.
• 20:46
  SPEAKER_00: And nothing changes.
• 20:47
  SPEAKER_00: Even today, once broker-to-broker compensation goes away, the buyer representation agreement still has that power.
• 20:54
  SPEAKER_00: It says, you and I have entered into an agreement.
• 20:56
  SPEAKER_00: I'm going to represent you in the buying of this house and you're going to pay me X.
• 21:00
  SPEAKER_00: Nothing's changed.
• 21:01
  SPEAKER_00: It's exactly the same.
• 21:02
  SPEAKER_00: The only thing it says now is that the seller is not going to offer me part of their commission.
• 21:07
  SPEAKER_00: If we want to get paid by the seller, the seller will agree to it at the contract.
• 21:13
  SPEAKER_00: If the buyer or you are unable to negotiate for your full commission to be paid by the seller, then the buyer is going to pay the difference.
• 21:21
  SPEAKER_00: So if you're asking for X and the seller agrees to pay half of X, what happens now, from here on out, is the difference is paid to you on the settlement statement from the buyer.
• 21:31
  SPEAKER_00: In the past, you took that on the chin.
• 21:33
  SPEAKER_00: If the listing agent was only going to pay you half of what your buyer representation agreement was, that was it.
• 21:38
  SPEAKER_00: That's all you got.
• 21:38
  SPEAKER_00: And you didn't get paid the difference from the buyer's agreement.
• 21:41
  SPEAKER_00: You should have if filled out the buy representation agreement correctly.
• 21:44
  SPEAKER_00: Most of you didn't, but most of you wouldn't even ask for it back then because you never had that exponent, had that conversation with your buyer to explain that if the seller's agent doesn't pay me the whole amount, then you'll pay me the difference.
• 21:54
  SPEAKER_00: Everybody was simply telling the buyer's agent, the listing agent's going to pay me.
• 21:57
  SPEAKER_00: It doesn't cost you anything.
• 21:59
  SPEAKER_00: That's different today.
• 22:00
  SPEAKER_00: Now, what happens is you have agreed to pay me X.
• 22:04
  SPEAKER_00: We can ask the seller for some, all or none of it, but whatever's left over, you'll pay me the difference.
• 22:10
  SPEAKER_00: And we're putting that as closing attorneys on the settlement statement every day.
• 22:13
  SPEAKER_00: The difference here today, guys, is when you're meeting with your buyers, unlike the past, is you're having to sell your value.
• 22:19
  SPEAKER_00: It is no different than what a listing agent's always had to do, which is sell their value to the seller.
• 22:25
  SPEAKER_00: This is what I'm going to do for you as a listing agent.
• 22:28
  SPEAKER_00: Now, what you're having to do is the same thing with the buyer.
• 22:30
  SPEAKER_00: This is what I'm going to do.
• 22:32
  SPEAKER_00: Now, you've all perfected it when it comes to the listing side.
• 22:35
  SPEAKER_00: Now you have to perfect it where it comes from the buyer side.
• 22:39
  SPEAKER_00: Your job is not to help a buyer buy a house, it is to protect them while they do.
• 22:44
  SPEAKER_00: Stop thinking about your job in terms of task or in terms of time solely.
• 22:49
  SPEAKER_00: If you are comped on task and time, that's when it allows the buyer to win that argument.
• 22:54
  SPEAKER_00: Well, it didn't take that much time, or I'm only going to look at one or two houses, or I was the one who found the house on the MLS, or I found it on Zillow.
• 23:02
  SPEAKER_00: So you really didn't have to do as much.
• 23:04
  SPEAKER_00: That's when you're going to start getting nickel and dimed to death.
• 23:06
  SPEAKER_00: If your compensation is based on outcomes, I'm going to help you not only find the house, but I'm going to help you make an offer that's going to be accepted.
• 23:13
  SPEAKER_00: I'm going to help navigate you through inspections, the lending process, the closing process, all the way past through closing.
• 23:19
  SPEAKER_00: And during all that, I'm going to do my very best to help protect your identity and your finances.
• 23:23
  SPEAKER_00: Then it's outcome-oriented and not based on tasks that your clients can do.
• 23:28
  SPEAKER_00: Then you explain to your buyer that we can ask the seller to pay for some, for all, or none of the commission.
• 23:34
  SPEAKER_00: If the seller will not pay all of that commission, then we can most likely increase our offer and ask them to pay the difference because the seller will still net the same.
• 23:42
  SPEAKER_00: But if the seller is still too stupid to understand that you're asking them to increase the offer by the same amount, you're asking them to increase the closing cost or compensation costs, and they're too stupid to understand the net cheat, you, the buyer, will can and still will pay me the difference.
• 23:56
  SPEAKER_00: And if that's not going to work for you financially, then we can go look for another house.
• 24:00
  SPEAKER_00: You have to have that conversation up front with them.
• 24:02
  SPEAKER_00: But you do not have to cut your compensation.
• 24:05
  SPEAKER_00: Contrary to what you the what the media constantly says and these so-called consumer protection groups still say is you have a right to be compensated for your work.
• 24:13
  SPEAKER_00: You don't have to cut your pay so that the buyer can buy a house they obviously can't afford.
• 24:18
  SPEAKER_00: No other profession has to do this.
• 24:20
  SPEAKER_00: Go ask your doctor to cut his fees so that you can have the knee surgery that you can't afford.
• 24:25
  SPEAKER_00: They don't do it.
• 24:25
  SPEAKER_00: But for some reason, our media believes that you have this duty to cut your compensation and quit being so greedy so your buyer can buy a house, they can't afford.
• 24:34
  SPEAKER_00: If they can't afford to pay the closing costs and they can't afford to pay your commissions, then they can't afford the house.
• 24:39
  SPEAKER_00: But mostly what we have seen since Sitzer Brunett is that the sellers are willing to work with buyers and cover the compensation in the contract.
• 24:48
  SPEAKER_00: We did this for the closing costs for many years.
• 24:51
  SPEAKER_00: We did.
• 24:52
  SPEAKER_00: Somehow, some way, we were able to get it worked out where, hey, I need$5,000 in closing costs.
• 24:58
  SPEAKER_00: Let's increase the call the contract amount by$5,000 and you pay$5,000 in closing costs.
• 25:03
  SPEAKER_00: And nobody lost their minds.
• 25:04
  SPEAKER_00: They all understood that.
• 25:05
  SPEAKER_00: So I don't understand why this is any different.
• 25:07
  SPEAKER_00: In fact, somehow, somehow, EXP, Next Home, ERA Wilder Realty, Olivia Cooley Real Estate, so many others have already been doing this for the past year without any problem.
• 25:18
  SPEAKER_00: They're still getting paid.
• 25:19
  SPEAKER_00: They're not walking away from comp.
• 25:21
  SPEAKER_00: They're not working for free.
• 25:22
  SPEAKER_00: They're not working with buyer agents.
• 25:25
  SPEAKER_00: Somehow it worked out for these guys.
• 25:27
  SPEAKER_00: Plus, these agents, they know better.
• 25:29
  SPEAKER_00: They're not calling and asking, what are you offering?
• 25:31
  SPEAKER_00: They recognize that makes them look foolish.
• 25:33
  SPEAKER_00: It makes them look like they don't understand what they're doing.
• 25:35
  SPEAKER_00: Plus, they don't care what you say you're offering because they're going to make the offer that their buyer wants to make, not what the seller wants them to make.
• 25:43
  SPEAKER_00: They're going to make the offer what the buyer says.
• 25:45
  SPEAKER_00: And if the buyer wants closing costs, they'll ask.
• 25:47
  SPEAKER_00: If the buyer wants commissions, they'll ask.
• 25:49
  SPEAKER_00: If the buyer doesn't want anything, they won't ask.
• 25:51
  SPEAKER_00: Nothing the seller says when you call them and says, what are you offering is binding.
• 25:56
  SPEAKER_00: It is nothing more than advertisement.
• 25:59
  SPEAKER_00: If a seller's out there advertising and marketing, they're going to pay 10% real estate commission.
• 26:02
  SPEAKER_00: It doesn't matter because it's not binding.
• 26:04
  SPEAKER_00: And secondly, they don't have to take your offer.
• 26:06
  SPEAKER_00: So even though they're offering 10%, if you don't like your offer, they're not going to accept it.
• 26:09
  SPEAKER_00: And thirdly, you can only get what's in your agreement anyway.
• 26:12
  SPEAKER_00: You can't get a penny more than in your buyer agency agreement.
• 26:15
  SPEAKER_00: Please stop with this nonsense of calling the other side and asking them what they're offering.
• 26:19
  SPEAKER_00: Lastly, please stop with the automatic ask.
• 26:22
  SPEAKER_00: Your job is not just to complete the task.
• 26:25
  SPEAKER_00: Your job is to figure out what is in your buyer's best interest.
• 26:29
  SPEAKER_00: Does the buyer need commission paid when they're buying a$4 million house?
• 26:33
  SPEAKER_00: Do they even need it when they're doing an$800,000 house?
• 26:36
  SPEAKER_00: Do they need it when they're buying a$500,000 house?
• 26:39
  SPEAKER_00: Probably not.
• 26:39
  SPEAKER_00: Do they need commission paid if they're paying all cash for a house?
• 26:42
  SPEAKER_00: Should they ask for commission when there's multiple offers on a house or this is a hot property that just came on the market?
• 26:48
  SPEAKER_00: Asking for commission is like asking for closing costs.
• 26:51
  SPEAKER_00: Now, would you ever ask on a$5 million house for$5,000 in closing costs?
• 26:56
  SPEAKER_00: No, you wouldn't.
• 26:57
  SPEAKER_00: The seller would laugh at you.
• 26:58
  SPEAKER_00: Would you ask for$5,000 closing costs on an$800,000 house where they're paying cash?
• 27:03
  SPEAKER_00: No, the seller would laugh at you.
• 27:06
  SPEAKER_00: It makes no sense.
• 27:07
  SPEAKER_00: You have to think through this and think in terms of strategy.
• 27:11
  SPEAKER_00: And this is one of the ways that you can differentiate yourself from other agents and say, look, most buyer agents aren't going to sit down and try to figure this out with you, buyer.
• 27:19
  SPEAKER_00: They're just going to automatically knee jerk reaction ask for commissions.
• 27:23
  SPEAKER_00: You and I are going to sit down with a net sheet and we're going to look at it and see what makes a stronger offer that more than likely the seller will accept that you can afford to pay.
• 27:30
  SPEAKER_00: And if you're going to buy a$4 million house for cash, you certainly don't need any help paying the commissions.
• 27:34
  SPEAKER_00: I want you all to remember this one thing.
• 27:36
  SPEAKER_00: Commission is now negotiated at the contract time, just like any other term in the contract.
• 27:42
  SPEAKER_00: Everything is negotiable.
• 27:43
  SPEAKER_00: If the price is right, the seller will be willing to sell the house.
• 27:46
  SPEAKER_00: It's not that difficult.
• 27:47
  SPEAKER_00: In fact, I think it's a lot easier.
• 27:49
  SPEAKER_00: It's a lot cleaner.
• 27:50
  SPEAKER_00: It only means you have to explain your work.
• 27:52
  SPEAKER_00: So today, here's your homework.
• 27:53
  SPEAKER_00: You need to sit down and you need to figure out your buyer presentation.
• 27:57
  SPEAKER_00: I would start with the phrase, I'm not here to help you buy a house.
• 28:00
  SPEAKER_00: I'm here to protect you while you do.
• 28:02
  SPEAKER_00: Then think about all of the things that you do for a buyer and write them all down.
• 28:05
  SPEAKER_00: Remember, it's not just task and time oriented.
• 28:08
  SPEAKER_00: It's about outcomes.
• 28:09
  SPEAKER_00: It's about protection.
• 28:10
  SPEAKER_00: Don't go look at that 40-something things that Realtors Association says you do, such as I help my clients buy the best house that suits their needs at the best price.
• 28:18
  SPEAKER_00: That's bullshit.
• 28:19
  SPEAKER_00: Nobody cares.
• 28:19
  SPEAKER_00: What they care about with you is what you do for them that's going to be the reason they need to hire you.
• 28:24
  SPEAKER_00: Look, I'm going to help you navigate through this whole process of inspecting the house, deciphering what these inspection reports say, making a request that the seller that more likely they will agree to make these repairs, it doesn't absolutely screw up your contract.
• 28:39
  SPEAKER_00: That's what I'm going to do.
• 28:40
  SPEAKER_00: That's one of the things that you do that separates you.
• 28:42
  SPEAKER_00: They want to hear what you're personally going to do to help them, what you're going to do to protect them.
• 28:46
  SPEAKER_00: Buyers can do it themselves, remember.
• 28:53
  SPEAKER_00: It's no different than when you sell your car.
• 28:55
  SPEAKER_00: I could get more money selling my car myself, but I also could get robbed and killed with somebody on a test drive.
• 29:01
  SPEAKER_00: Or they could steal my car, they could give me a bad check.
• 29:05
  SPEAKER_00: I don't want to deal with it.
• 29:06
  SPEAKER_00: So I sell my car to my car dealer when I buy a new car.
• 29:09
  SPEAKER_00: I don't want the hassle.
• 29:10
  SPEAKER_00: It's not about the time or task involved in selling my car, it's about the risk and protection and the ease of it.
• 29:16
  SPEAKER_00: Same thing here with representing buyers in a real estate transaction.
• 29:20
  SPEAKER_00: Once you write it, memorize it, think about all questions and objections you may get and how are you going to answer them.
• 29:27
  SPEAKER_00: Then you need to use it and then you need to revise it as necessary.
• 29:30
  SPEAKER_00: I hope this helps you.
• 29:32
  SPEAKER_00: This is not that difficult.
• 29:34
  SPEAKER_00: I promise you, in a year from now, we'll be talking about how broker to broker was the greatest thing to happen in real estate since Al Gore invented the internet, or at least claimed he did.
• 29:42
  SPEAKER_00: He kind of lost a presidential election making that claim.
• 29:44
  SPEAKER_00: All right.
• 29:44
  SPEAKER_00: Hope everybody has a great weekend.
• 29:45
  SPEAKER_00: Come back and see us again next week for another episode of Edition Dirt.
• 29:48
  SPEAKER_00: Don't forget to like us, share us, and subscribe.
• 29:50
  SPEAKER_00: Y'all take care.
• 29:51
  SPEAKER_00: Have a good week.