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SC REALTORS Finally Ends Broker-to-Broker Compensation — What Every SC Agent Must Do Next · 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.
• 0:22
  SPEAKER_00: This, the last week of February 2026.
• 0:25
  SPEAKER_00: I am super, super excited about our show today.
• 0:29
  SPEAKER_00: I'm thrilled.
• 0:30
  SPEAKER_00: I even have that tingling sensation going up your thigh, as Chris Matthews would say, because we have big news, hugely news, bigly news from the South Carolina Realtors Association.
• 0:39
  SPEAKER_00: And what that news is, is last week they announced that broker-to-broker compensation will be eliminated from their listing agreement.
• 0:46
  SPEAKER_00: It is the end of that terrible concept of broker-to-broker, a concept that was neither friendly for the consumer nor was it really good for real estate agents.
• 0:55
  SPEAKER_00: We're going to talk all about that today.
• 0:57
  SPEAKER_00: I'm going to give credit where credit is due because Rhea Smith, who is a former president of the South Conor Ruler Association, she has been pushing very hard for the last year.
• 1:04
  SPEAKER_00: She wanted this to be her legacy as she left her leadership position at SCR.
• 1:09
  SPEAKER_00: And she has been advocating all over the state for this position.
• 1:12
  SPEAKER_00: Nick Cromitus, Austin Smallwood, who used to work there, Byron King, everybody's been pushing hard to get this change implemented.
• 1:19
  SPEAKER_00: It's a necessary change.
• 1:20
  SPEAKER_00: Other states are making this change.
• 1:22
  SPEAKER_00: And I would love to give them credit for this.
• 1:24
  SPEAKER_00: And so they have worked very hard to make this happen.
• 1:26
  SPEAKER_00: Dish and dirt, we've also been pushing very hard for this since Leo Perea came on this show and announced to the world that he was no longer doing broker-to-broker compensation at EXP, just weeks after the Sitzer Burnett case settled.
• 1:38
  SPEAKER_00: And the whole world went crazy in the real estate industry saying, Well, we'll never show one of their properties again.
• 1:43
  SPEAKER_00: This is terrible.
• 1:44
  SPEAKER_00: From that time to James Dwiggins coming on from Next Home saying the same thing, to uh Tony Nally talking about the experience at ERA Wilder Realty.
• 1:52
  SPEAKER_00: We've talked to people, we've examined this, and dish and dirt.
• 1:56
  SPEAKER_00: I have been out there for the last year and a half advocating for the end of this.
• 2:00
  SPEAKER_00: It needs to end, and it finally is ending.
• 2:02
  SPEAKER_00: So while Riga got the work done, the association got the work done, we've been here through your help, your support, pushing as hard as we can to get this done.
• 2:12
  SPEAKER_00: And I'm happy to say Dish and Dirt, South Carolina Realtors Association, Rhea Smith, a lot of people that we've worked hard and it is gone.
• 2:20
  SPEAKER_00: So thank you, SER, for making this happen.
• 2:23
  SPEAKER_00: So I'm going to roll real quickly right into this.
• 2:25
  SPEAKER_00: We're not going to waste any time.
• 2:26
  SPEAKER_00: We're going straight in.
• 2:28
  SPEAKER_00: As I mentioned, the South Carolina Realtors Association has officially removed broker-to-broker compensation from the listing agreement.
• 2:34
  SPEAKER_00: What that means is buyers will sign an agreement with the buyer's agent as to their compensation.
• 2:38
  SPEAKER_00: The seller will sign a compensation with the listing agent as to his or her compensation.
• 2:42
  SPEAKER_00: And that's it.
• 2:43
  SPEAKER_00: Now, the buyer may ask either through the contract or the compensation agreement for help on that commission, but each side is only going to be responsible for their own side.
• 2:52
  SPEAKER_00: And there cannot and there will not be a situation where there is a guaranteed compensation or even an offer of compensation from a broker to another broker.
• 3:01
  SPEAKER_00: So that is the end of broker-to-broker compensation.
• 3:04
  SPEAKER_00: I'm going to say something that's probably going to surprise the hell out of all of you.
• 3:06
  SPEAKER_00: I'm thrilled.
• 3:07
  SPEAKER_00: I'm absolutely thrilled.
• 3:08
  SPEAKER_00: I know that absolutely is astonishing to y'all that I'd be thrilled about this, but I'm thrilled.
• 3:13
  SPEAKER_00: I'm not cautiously optimistic.
• 3:15
  SPEAKER_00: I'm not concerned in the least bit.
• 3:17
  SPEAKER_00: I am literally thrilled to death that this has happened because this, guys, is not the end of buyer agents.
• 3:23
  SPEAKER_00: It has not been the end of buyer agents for any of the companies, in fact, that have already implemented no broker-to-broker conversation.
• 3:30
  SPEAKER_00: In fact, when we had Tony Nally here, he said his agents were thriving under this.
• 3:33
  SPEAKER_00: When we talked to Leo Perea, his agents are thriving under this system.
• 3:38
  SPEAKER_00: It has worked and it is a very smart system.
• 3:41
  SPEAKER_00: This is the end of a system that has created confusion, which has allowed litigation risk for you guys, and it has allowed for misplaced loyalty as to where your fiduciary duty belongs.
• 3:52
  SPEAKER_00: When Leo Perea at XP came out with this idea, I literally thought he was nuts because for 30 years we had seen the other system where a listing agent would not only get their commission taken care of from the seller, but also with the buyer, they were guaranteeing that through the MLS.
• 4:06
  SPEAKER_00: And even when the MLS system changed with Sister Burnett, they were still offering that compensation, essentially saying this is what we'll pay you to a buyer's agent who was unknown, who's not even brought a contract, who hasn't asked anything.
• 4:16
  SPEAKER_00: But when I interviewed him, we got it and we got it quickly.
• 4:19
  SPEAKER_00: And so I started pushing for that.
• 4:20
  SPEAKER_00: And since we started pushing for that here on Dish and Dirt, I've had no less than 10 separate brokerages contact me and tell me that they have eliminated broker-to-broker compensation because of my advocacy on this.
• 4:33
  SPEAKER_00: They have all agreed that broker to broker was going to set them up for another lawsuit, and they wanted nothing to do with that.
• 4:38
  SPEAKER_00: So more than 10 brokerages have contacted me, including brokerages up into North Carolina that have told me they listened to Dish and Dirt and they decided to eliminate that.
• 4:47
  SPEAKER_00: Rhea Smith led that charge, as I said, and she and I aligned very quickly on this.
• 4:51
  SPEAKER_00: And together we were doing the podcast, which was actually next to Leo's podcast, was the second most listened to podcast of the year for Dish and Dirt.
• 4:59
  SPEAKER_00: Hard work for a lot of people behind the scenes is really what makes that happen.
• 5:02
  SPEAKER_00: And when you talk about hard work behind the scenes, I think that's what separates Blair Cato from other closing law firms, closing attorneys.
• 5:10
  SPEAKER_00: Name one other law firm in your mind that is advocating for your business, whether it's through the Success Summit, through this podcast, through Candace Coleman's podcast on AI and real estate, whether it's our advocacy to eliminate problematic issues like broker-to-broker compensation or the touring agreement at the state level or Cynthia Blair's advocacy at the national level through the American Land Title Association, Blair Cato is the only real estate law firm in South Carolina doing this.
• 5:37
  SPEAKER_00: No one else is doing it.
• 5:38
  SPEAKER_00: No one else is even trying to do this.
• 5:40
  SPEAKER_00: Think of this, guys.
• 5:41
  SPEAKER_00: If we care this much for you and your position, your job, your income, what you do for a living, imagine what we can do for your clients.
• 5:48
  SPEAKER_00: Imagine what we can do for you at the closing.
• 5:50
  SPEAKER_00: You know, when I'm selecting someone that I want to refer my business to, I'm trying to select that person who cares the most about me, about my job, about my performance, about my legal protections.
• 6:00
  SPEAKER_00: Not someone who just shows up and tells a few jokes and asks people to sign here and there.
• 6:04
  SPEAKER_00: And certainly not someone who's just going to write a check to my broker or my brokerage so that I will steer my client to use their title company or their law firm so that my brokerage can get paid some more money or somebody in higher management gets a bonus.
• 6:16
  SPEAKER_00: No, hell no.
• 6:17
  SPEAKER_00: That does nothing for me.
• 6:19
  SPEAKER_00: What does something for me is knowing someone's in my corner.
• 6:22
  SPEAKER_00: They're fighting for me on the legal aspects, fighting for me on the ethical aspects, putting on summits to help me with sales and marketing.
• 6:29
  SPEAKER_00: That's who's going to fight for me.
• 6:30
  SPEAKER_00: And for my job, that's where I'm going to go.
• 6:33
  SPEAKER_00: That's the person I'm going to use.
• 6:34
  SPEAKER_00: And that for you guys, and that someone is Blair Cato.
• 6:37
  SPEAKER_00: Nobody else.
• 6:38
  SPEAKER_00: Now let me talk to you real quickly about what we're going to do today.
• 6:40
  SPEAKER_00: We're going to talk about why SCR decided now, of all time, to do the broker-to-broker compensation elimination.
• 6:46
  SPEAKER_00: We're going to talk about what's changed, why this eliminates the steering argument that I think a lot of these lawyers along the line of a Sitta Burnett or a Morel lawyer might try to interject at some point.
• 6:56
  SPEAKER_00: We're going to talk about Form 220 and what it says in the new form and how it's going to be used.
• 7:00
  SPEAKER_00: We're going to talk about when this comes out.
• 7:02
  SPEAKER_00: And then we're also going to talk about some legal issues about updating or not updating existing agreements.
• 7:07
  SPEAKER_00: Let's start right now with what SCR says about why they made this change.
• 7:12
  SPEAKER_00: SCR has been very clear about their reasoning.
• 7:14
  SPEAKER_00: In fact, they did a video and you can go find their video on YouTube.
• 7:17
  SPEAKER_00: The change for them was about eliminating commission steering.
• 7:20
  SPEAKER_00: That's it.
• 7:21
  SPEAKER_00: That's one of the absolute main reasons when you have broker-to-broker compensation and you have a listing agent saying that I am offering X amount to you as a buyer's agent if you bring me a contract.
• 7:32
  SPEAKER_00: That's essentially what they're doing.
• 7:34
  SPEAKER_00: They're hoping that because you see that number, you will push your client there.
• 7:38
  SPEAKER_00: And that, whether that is truly what happens, whether that's you're sitting here going, that's not how it works, it does not matter because perception is greater than reality here.
• 7:47
  SPEAKER_00: And that is a perception that most lawyers have in this litigation space right now.
• 7:51
  SPEAKER_00: That's what Ketchmart believes, that's what the Morel lawyers believe, is that by offering compensation through broker-to-broker compensation, that's what that is doing is that is basically allowing you to still artificially keep agent commissions high and by having them steer their clients to you because you're offering the compensation.
• 8:08
  SPEAKER_00: And that is the second thing that the SER talked about in their presentation is stopping the perception that sellers are forced to pay buyer agents.
• 8:17
  SPEAKER_00: They're not.
• 8:18
  SPEAKER_00: Even under the new system, they're not, because everything has to be negotiated, it has to be signed.
• 8:22
  SPEAKER_00: But when you're it creates that perception that the sellers are being forced to pay for a buyer's agent who hasn't made an offer, who hasn't made an appearance, and who is the adversary party.
• 8:32
  SPEAKER_00: Thirdly, they believe it cleans up the fiduciary alignment because that's truly what this is all about is who do you have a duty to?
• 8:40
  SPEAKER_00: Do you have a duty to this other buyer's agent to pay them a commission?
• 8:43
  SPEAKER_00: Is there some duty to pay a buyer's agent?
• 8:45
  SPEAKER_00: The answer is no.
• 8:46
  SPEAKER_00: Your duty is to work with your seller to get them the best offer possible, the best net money, the best terms possible.
• 8:53
  SPEAKER_00: And this cleans up that fiduciary duty.
• 8:55
  SPEAKER_00: And fourth, it creates a cleaner, more transparent system.
• 8:58
  SPEAKER_00: And when you have the most transparent system out there, it's hard to get sued for not disclosing things, for keeping things hidden, for having this system created to compensate buyers' agents, even though the buyer agent may not even be involved in doing anything in this particular transaction.
• 9:14
  SPEAKER_00: This creates a transparent system that says, no, this is what you're paying me.
• 9:18
  SPEAKER_00: This they get their compensation agreement with their buyer, and if they want help, that's fine.
• 9:21
  SPEAKER_00: It's going to be a much cleaner and transparent system.
• 9:23
  SPEAKER_00: So let's unpack that.
• 9:24
  SPEAKER_00: For years, critics, including the Department of Justice, have argued that cooperative compensation creates the potential for steering.
• 9:32
  SPEAKER_00: I've told you this for a long time that one of the dumbest things, and this is the absolutely dumbest thing that realtors ever did, was allowing MLS MLSs to be sorted by commission rates.
• 9:43
  SPEAKER_00: And that's what they could do.
• 9:43
  SPEAKER_00: Prior to sit to Burnett, you could literally go on the MLS and sort properties by who was paying the highest commission rate, which was guaranteeing the opportunity for commission steering.
• 9:54
  SPEAKER_00: Because if I could go and say, well, these people are only offering one and these people are offering four, I'm going to show the four.
• 10:00
  SPEAKER_00: That's commission steering.
• 10:01
  SPEAKER_00: That is a breach of your fiduciary duty and a breach of your code of ethics.
• 10:05
  SPEAKER_00: But what we're looking at here is that a buyer agent might show properties that are based on compensation being offered.
• 10:11
  SPEAKER_00: And I think that still happens today when you have broker to broker, because when you're calling up or you're looking at social media and they're saying, well, we're offering this property and we are offering broker compensation at X, it's telling us what you're willing to pay when other properties are not marketing and advertising that.
• 10:28
  SPEAKER_00: So am I steering those to the people who are advertising?
• 10:30
  SPEAKER_00: Now keep in mind, it doesn't matter what they advertise.
• 10:32
  SPEAKER_00: They could advertise 10% in a new Ferrari.
• 10:34
  SPEAKER_00: Nothing matters because unless it's in writing in your buyer representation agreement, you can't get it.
• 10:40
  SPEAKER_00: You can only get what's in that agreement.
• 10:41
  SPEAKER_00: And secondly, it has to be agreed to by the buyer and the seller.
• 10:44
  SPEAKER_00: So the seller all day long could sit here and say, we are offering 3% co-op, but unless there's an agreement in the contract or through a 10 uh Form 120, it wasn't guaranteed.
• 10:55
  SPEAKER_00: So none of it really matters anyway, but agents were still showing property based on that.
• 11:00
  SPEAKER_00: And whether it happens at any scale, that's not the point.
• 11:04
  SPEAKER_00: The perception alone creates the liability.
• 11:06
  SPEAKER_00: Never let facts get in the way of a good story.
• 11:09
  SPEAKER_00: That's the old adage when it comes to lawyers.
• 11:11
  SPEAKER_00: And that's unfortunate where we are in our society today.
• 11:14
  SPEAKER_00: Nobody wants facts to get in the way of their feelings.
• 11:17
  SPEAKER_00: And as long as I feel that way or I believe it, that's all that matters.
• 11:20
  SPEAKER_00: And that's how it's going, unfortunately, against y'all is that the perception, the reality is that real estate agents are greedy and that they're just working for their commissions, as if nobody else is working for money, as if you're the only industry in the world that actually wants to get paid, but for some reason you're considered greedy because you want to get compensated.
• 11:38
  SPEAKER_00: But now, by removing the broker-to-broker compensation from the listing agreement, there's no longer an argument about steering tied to MLS compensation offers or even to even to a listing agreement.
• 11:49
  SPEAKER_00: This argument is now gone.
• 11:51
  SPEAKER_00: Secondly, the idea that sellers were being forced, force is the word that we hear all the time, to pay buyer agents.
• 11:58
  SPEAKER_00: That's also gone.
• 11:58
  SPEAKER_00: Now we know that nothing was technically forced, but from a consumer optics standpoint, that's the way it looked.
• 12:04
  SPEAKER_00: Well, my agent was telling me we're not going to sell the house unless we offer this co-op.
• 12:08
  SPEAKER_00: And, you know, I haven't even seen an offer.
• 12:09
  SPEAKER_00: I don't even know who the buyer's agent is, but we're having to commit upfront fees to pay some unknown buyer broker.
• 12:15
  SPEAKER_00: This is much cleaner.
• 12:17
  SPEAKER_00: It's much more transparent.
• 12:18
  SPEAKER_00: But here's the best thing it's much more defensible.
• 12:22
  SPEAKER_00: South Carolina isn't the only one who's going away from this.
• 12:24
  SPEAKER_00: Let me give you some numbers that SCR shared with us.
• 12:26
  SPEAKER_00: 18 states have removed broker-to-broker compensation from their forms.
• 12:30
  SPEAKER_00: 19 states.
• 12:31
  SPEAKER_00: We're now going to be the 20th.
• 12:33
  SPEAKER_00: Five states have already gone and either through the regulatory process or the statutory process have made changes, eliminating it from their licensing law.
• 12:41
  SPEAKER_00: And two more states are actively working on doing the same.
• 12:44
  SPEAKER_00: So what we're looking at right now is 27 states, including South Carolina, have gotten rid of broker-to-broker compensation.
• 12:51
  SPEAKER_00: If that doesn't tell you why you should get rid of broker-to-broker compensation, I don't know what else it would.
• 12:56
  SPEAKER_00: Because how are you going to defend something when 27 states, including your own State Realtor Association, says we don't believe it's in the best interest of the consumer?
• 13:04
  SPEAKER_00: We also know the Department of Justice is still actively working to decouple fees nationally.
• 13:09
  SPEAKER_00: Now, they've tried to go as far as saying that buyers pay buyer agents and sellers pay seller agents, and there is no crossover.
• 13:15
  SPEAKER_00: Buyers can't ask seller agents.
• 13:17
  SPEAKER_00: Now, luckily, somebody got the DOJ back in line and said, you do realize our economy will collapse if a buyer cannot ask a seller to pay, but that's where this has gone.
• 13:25
  SPEAKER_00: And so what we're seeing here, this isn't just a South Carolina experiment.
• 13:29
  SPEAKER_00: This isn't something SER is going out on the limb and saying, well, let's just see how it works.
• 13:33
  SPEAKER_00: Um I think SER is simply formalizing what the market is already pushing for.
• 13:37
  SPEAKER_00: And that's the bottom line.
• 13:38
  SPEAKER_00: The market's already going away from it.
• 13:40
  SPEAKER_00: I spoke with Nick Cromitus, who's the CEO of SER a couple of days ago, and he told me it had over 150 emails or telephone calls about this change.
• 13:49
  SPEAKER_00: And he told me 100% have been positive.
• 13:51
  SPEAKER_00: He was expecting an unslaught, an onslaught of agents and brokers complaining about it because they didn't understand it or they didn't want change because we know most people don't like change.
• 14:00
  SPEAKER_00: And that should tell you something.
• 14:01
  SPEAKER_00: The leadership in this state at the realtor level understands where the industry is heading and they understand how to protect its agents.
• 14:10
  SPEAKER_00: Let's talk about something that gets lost in this conversation.
• 14:13
  SPEAKER_00: The name of the game here is fiduciary duty.
• 14:15
  SPEAKER_00: If you're a listing agent, your fiduciary duty belongs to the seller, not the opposing party, not the buyer's agent, and certainly not the buyer's agent's compensation.
• 14:25
  SPEAKER_00: It has never made sense to me that a listing agent would argue for a fee of an unknown buyer agent.
• 14:31
  SPEAKER_00: It also wastes your goodwill as a listing agent, where you have created this great relationship with a seller during your listing presentation, and now you're having to argue with your seller as to compensating an unknown buyer agent and the amount of compensation to somebody who hasn't even asked for compensation.
• 14:48
  SPEAKER_00: It certainly looks like you're out trying to protect other realtors and not protect your seller.
• 14:53
  SPEAKER_00: And thirdly, it's committing the seller to compensate somebody for something that they haven't even seen an offer yet.
• 15:00
  SPEAKER_00: Think about that.
• 15:00
  SPEAKER_00: I'm asking you to guarantee to pay this buyer's agent some set fee, and I haven't even seen an offer.
• 15:06
  SPEAKER_00: I don't even know what that means to me in the end.
• 15:08
  SPEAKER_00: That's just asked backwards.
• 15:09
  SPEAKER_00: There's no other way to talk about it, say it.
• 15:11
  SPEAKER_00: Your job is to protect the seller's net.
• 15:14
  SPEAKER_00: And cooperative compensation was never binding anyway.
• 15:17
  SPEAKER_00: It wasn't guaranteed.
• 15:18
  SPEAKER_00: It had to be negotiated as part of the contract, part of the Form 120.
• 15:21
  SPEAKER_00: It was always subject to the buyer agreement cap as well.
• 15:25
  SPEAKER_00: So it didn't really matter what they offered.
• 15:27
  SPEAKER_00: Referring broker-to-broker compensation, in short, did not, say that again, did not enhance your chances of selling the house.
• 15:35
  SPEAKER_00: And I've had some people try to argue with me, well, that's how I sell my houses.
• 15:38
  SPEAKER_00: I guarantee compensation to the buyers.
• 15:40
  SPEAKER_00: How bad are you as a real estate agent where you think the only way you can sell houses is to guarantee the buyer's agent that you're going to get them paid?
• 15:48
  SPEAKER_00: What does that say to me as a consumer as to why I would want to hire you?
• 15:52
  SPEAKER_00: Because if that's the only way you can get my house sold, is to offer compensation to some unknown buyer's agent as an enticement to get them to steer to my house.
• 16:01
  SPEAKER_00: That doesn't give me a lot of uh good and warm fuzzy feelings about your ability to sell a house.
• 16:06
  SPEAKER_00: But the bottom line is because it's not guaranteed, it's not binding anyway, it's all negotiated as part of the contract.
• 16:12
  SPEAKER_00: It didn't do what you thought it did anyway.
• 16:14
  SPEAKER_00: Now, maybe prior to Sitzer Burnett, which when it was guaranteed in the multiple listing service, maybe that might have had some effect, but it certainly doesn't today because good agents know it doesn't matter if you're advertising one, three, five, or a hundred percent commission rates.
• 16:28
  SPEAKER_00: None of it's binding until we negotiate the contract anyway and get it binding.
• 16:31
  SPEAKER_00: Why you thought it mattered, it really did not.
• 16:34
  SPEAKER_00: It did not increase the probability of sales.
• 16:36
  SPEAKER_00: And we've seen the statistics out there on those who do broker-to-broker compensation and those who don't, the statistics show it does not increase the probability of sale.
• 16:44
  SPEAKER_00: Buyers purchase homes that they won't.
• 16:47
  SPEAKER_00: Buyer agents have a duty to show properties that meet the buyer's criteria, regardless of advertised compensation.
• 16:53
  SPEAKER_00: And any buyer's agent who goes, well, my buyer told me that the only way they could buy a house is if compensation was included and this guy over here says he's not paying comp.
• 17:02
  SPEAKER_00: If you don't show your house, I think you're breaching a fiduciary duty because you could show that house and then make an offer asking for compensation, even though they say they weren't gonna do it.
• 17:10
  SPEAKER_00: Because until the numbers are on a piece of paper, no one knows what the seller's gonna do.
• 17:15
  SPEAKER_00: Sellers could sit here all day long and say they're not gonna do it until they see your offer, and that's gonna change their mind.
• 17:19
  SPEAKER_00: Or they might say they're going to do it and they see how bad your offer is and they're gonna be none at that.
• 17:24
  SPEAKER_00: So if a seller says zero concessions, that's completely irrelevant.
• 17:27
  SPEAKER_00: You still have a duty to show that house, still have a duty to create an offer and present an offer.
• 17:32
  SPEAKER_00: It means nothing what a seller says that they're willing to do.
• 17:35
  SPEAKER_00: You need to look and see what they will do when you make an offer.
• 17:39
  SPEAKER_00: Now, I had a North Carolina broker call me just recently.
• 17:41
  SPEAKER_00: He told me that he had actually saved his sellers about$150,000.
• 17:45
  SPEAKER_00: I said, how's that possible?
• 17:46
  SPEAKER_00: He said, because once he listened to Dish and Dirt and decided no longer to do broker-to-broker compensation, he stopped assuming.
• 17:52
  SPEAKER_00: He stopped assuming that buyers always needed this exact amount of compensation.
• 17:57
  SPEAKER_00: In the past, he was always out advertising for a percentage for the buyer's agent.
• 18:02
  SPEAKER_00: But what he found out was once he quit offering it, buyers' agents were not automatically asking for that amount.
• 18:08
  SPEAKER_00: It was always negotiated.
• 18:10
  SPEAKER_00: Sometimes they asked for some, sometimes they asked for all, sometimes they asked for nothing.
• 18:13
  SPEAKER_00: And what he's done now is he's gone back and looked at it.
• 18:15
  SPEAKER_00: And what he's figured out is in fact, the times that they didn't ask for all, his client still got what they wanted for the property and didn't pay commissions.
• 18:22
  SPEAKER_00: So it was worked out perfect.
• 18:23
  SPEAKER_00: That's market efficiency, guys.
• 18:25
  SPEAKER_00: That's capitalism.
• 18:26
  SPEAKER_00: And that's your fiduciary duty working correctly.
• 18:30
  SPEAKER_00: Now let me break down the new forms.
• 18:31
  SPEAKER_00: We got a few minutes, so I want to spend the next 10 minutes talking about the new forms.
• 18:34
  SPEAKER_00: So we're gonna get very practical here.
• 18:36
  SPEAKER_00: The changes to form 220 are very critical.
• 18:39
  SPEAKER_00: That's the form we're gonna talk about today.
• 18:41
  SPEAKER_00: In section five, the listing broker compensation.
• 18:44
  SPEAKER_00: This used to reference cooperative compensation.
• 18:47
  SPEAKER_00: That language is gone.
• 18:48
  SPEAKER_00: Section five now deals solely with what the buyer or what the seller will pay the listing firm.
• 18:55
  SPEAKER_00: The first sentence makes it clear the fee is solely a matter of negotiation between broker and owner or broker and seller.
• 19:02
  SPEAKER_00: You can still charge percentage, you can still charge flat fee, whatever structure you want to negotiate, but it is for listing broker compensation only.
• 19:10
  SPEAKER_00: There is no co-op language whatsoever listed in this section ever.
• 19:15
  SPEAKER_00: Done.
• 19:16
  SPEAKER_00: Can't do it.
• 19:17
  SPEAKER_00: Section six addresses additional work that comes with the assisting an unrepresented buyer.
• 19:23
  SPEAKER_00: You might take a listing and you've agreed to a listing percentage with your client, and then a customer comes and wants you to help them make an offer.
• 19:31
  SPEAKER_00: Well, in order to get compensated to get not only paid by the seller, but now to get paid by the buyer, you would have to enter into a dual agency agreement, which creates a loyalty issue and confidential issues and all kinds of other issues.
• 19:44
  SPEAKER_00: So what this language here allows you to do is keep your client relationship with your seller, maintain a customer relationship with your buyer, but get paid more than if you were just representing the seller only in the transaction.
• 19:56
  SPEAKER_00: Because you know when there's an unrepresented buyer, they're going to expect you to help with paperwork, aligning up inspections, and all kinds of stuff that you would not normally have to do.
• 20:05
  SPEAKER_00: Under section six, when the buyer is unrepresented, you can charge an additional fee, long as it's agreed to beforehand.
• 20:11
  SPEAKER_00: The question we get is can we amend the agreement?
• 20:15
  SPEAKER_00: Let's say I enter into an agreement for seller compensation with the listing agent only.
• 20:19
  SPEAKER_00: And then sometimes down the road, we find out that we're getting an offer from an unrepresented buyer.
• 20:24
  SPEAKER_00: However, in my section six, when I find the agreement, I put zero or I scratched it out.
• 20:28
  SPEAKER_00: The answer is yes, you can go back to amend, but the only time you can amend is if you do additional work.
• 20:34
  SPEAKER_00: So the question is, is this additional work?
• 20:36
  SPEAKER_00: Well, the very nature of the fact that it's in the listing agreement pretty much says it's additional work.
• 20:40
  SPEAKER_00: Otherwise, we wouldn't need it, right?
• 20:42
  SPEAKER_00: The very fact it exists.
• 20:43
  SPEAKER_00: I believe it is additional work because representing just the seller is a lot different than representing the seller and also helping the buyer as an unrepresented buyer.
• 20:51
  SPEAKER_00: You could go back to your seller and say, look, the offer we're going to get in here is going to be from an unrepresented buyer.
• 20:56
  SPEAKER_00: This is what I have to do to navigate that transaction, which is a benefit to you because if this buyer continues to be without any assistance, this is where it could go wrong.
• 21:06
  SPEAKER_00: I would like to charge more.
• 21:07
  SPEAKER_00: This would be my additional fee.
• 21:09
  SPEAKER_00: If they agree with that, then you can amend it.
• 21:11
  SPEAKER_00: The key here is it has to be additional work.
• 21:13
  SPEAKER_00: We agree that it is.
• 21:14
  SPEAKER_00: And secondly, you need to amend it before doing the work.
• 21:17
  SPEAKER_00: You can't go ahead and do all this work, represent them, and then get to closing and say, you know what, I had to work a lot harder because they were unrepresented.
• 21:23
  SPEAKER_00: Do you mind now if we increase the fee?
• 21:25
  SPEAKER_00: You've got to increase the fee before you do the work.
• 21:27
  SPEAKER_00: Section seven of Form 220 is the buyer broker compensation section.
• 21:32
  SPEAKER_00: And Byron has called this the most critical section of the entire document.
• 21:36
  SPEAKER_00: It clearly states this the listing broker is not authorized to compensate any other buyer or transaction broker.
• 21:44
  SPEAKER_00: Say that again.
• 21:45
  SPEAKER_00: Listing broker is not authorized to compensate any other buyer or transaction broker.
• 21:50
  SPEAKER_00: Make sure your seller understands this.
• 21:52
  SPEAKER_00: Section seven provides two pass and two pass only for buyers' agents to get paid by the seller.
• 21:57
  SPEAKER_00: Direct negotiation using the form 120.
• 22:00
  SPEAKER_00: Which is a beautiful, easy way of doing it.
• 22:02
  SPEAKER_00: The second is direct negotiation through contract cost concessions.
• 22:06
  SPEAKER_00: So we can do through concessions in the contract, or we can do it through a Form 120.
• 22:10
  SPEAKER_00: People ask me all the time which one's best.
• 22:12
  SPEAKER_00: I think they're both good.
• 22:13
  SPEAKER_00: They're both good.
• 22:13
  SPEAKER_00: And I think they both happen at the same time with contract.
• 22:16
  SPEAKER_00: And the language has been added in the contract that if a Form 120 is attached, then it's part of the contract.
• 22:21
  SPEAKER_00: In the past, you would get those signed before and then negotiate the contract.
• 22:24
  SPEAKER_00: No sense in doing that.
• 22:25
  SPEAKER_00: Submit it with your Form 120 with the contract.
• 22:27
  SPEAKER_00: Make sure you check the box that you've attached it there too, or simply ask for it as a cost of concessions.
• 22:33
  SPEAKER_00: In other words, it moves compensation to the offer where it belongs, not in the listing agreement.
• 22:39
  SPEAKER_00: Compensation for a buyer agent should not be determined when we list a property.
• 22:42
  SPEAKER_00: It should be determined in negotiating the offer.
• 22:45
  SPEAKER_00: That's the key, guys.
• 22:46
  SPEAKER_00: That's what makes this so beautiful.
• 22:48
  SPEAKER_00: Section eight, owner concessions are not required or fixed by law.
• 22:51
  SPEAKER_00: That's the key language in section eight.
• 22:53
  SPEAKER_00: Now there is a selection option.
• 22:55
  SPEAKER_00: Does the owner allow the broker to advertise willingness to negotiate concessions?
• 23:00
  SPEAKER_00: And you can check yes or no.
• 23:01
  SPEAKER_00: Let me give you my opinion.
• 23:03
  SPEAKER_00: There should never be a time that you don't select yes.
• 23:05
  SPEAKER_00: You need to manage your seller.
• 23:07
  SPEAKER_00: You need to be able to explain this to the seller.
• 23:09
  SPEAKER_00: And if you let them check no, then you're doing your client a disservice.
• 23:14
  SPEAKER_00: Why in the world would I tell anybody that I am not willing to negotiate on concessions?
• 23:19
  SPEAKER_00: Ever?
• 23:19
  SPEAKER_00: Because the second I say I'm not willing to negotiate concessions, that eliminates half of my offers right off the bat.
• 23:25
  SPEAKER_00: The answer should be yes.
• 23:27
  SPEAKER_00: The seller should always allow you to advertise your willingness to negotiate concessions because you don't even know what the offer is.
• 23:35
  SPEAKER_00: So why are we saying no before we know?
• 23:38
  SPEAKER_00: Do not artificially restrict offers coming in.
• 23:42
  SPEAKER_00: That's the main things that you will see in Form 220.
• 23:45
  SPEAKER_00: SER is also adding this feature to other forms.
• 23:48
  SPEAKER_00: There's a lot of forms that are being updated because they reference indirectly or directly listing agreements.
• 23:54
  SPEAKER_00: What you will also see now is when you log in and start filling out any form under SCR, it's going to automatically populate your information as the agent at the bottom.
• 24:04
  SPEAKER_00: Name, company name, a brokerage name, and so forth.
• 24:07
  SPEAKER_00: What this will do is it will ensure that only realtors are using these forms.
• 24:12
  SPEAKER_00: Because that's the only person that has the authority to use these forms are realtors.
• 24:16
  SPEAKER_00: I'm not a big fan of that.
• 24:17
  SPEAKER_00: I like the fact that it's going on there because I do like to have that information because you'd be amazed how many times we get contracts in with no real estate agent information or the name's written so poorly you can't even see where it came from.
• 24:28
  SPEAKER_00: And so this is good that we have our name on there.
• 24:31
  SPEAKER_00: What I am talking about is I really don't like the limitation of only realtors using forms.
• 24:36
  SPEAKER_00: I understand the argument.
• 24:38
  SPEAKER_00: That's the value of being a realtor is getting the forms.
• 24:41
  SPEAKER_00: I personally don't think that's the value of being a realtor.
• 24:43
  SPEAKER_00: I think the value of the realtor is the advocacy and the support that you get from the Realtors Association, whether it's through the education classes they provide you, or whether it's through the advocacy at the national and the state level.
• 24:53
  SPEAKER_00: That's what interests me about the Realtors Association.
• 24:56
  SPEAKER_00: I like the fact that the form is available to everybody.
• 24:58
  SPEAKER_00: And the reason I say that is I don't think it's good for our industry to have more than that one form in the particular market.
• 25:05
  SPEAKER_00: Now we have the uh Hilton Head contract, we have the CCRA contract, and you have the state contract.
• 25:10
  SPEAKER_00: And that's fine to have three different contracts because those are the one prevailing contract in each of those markets.
• 25:15
  SPEAKER_00: What I don't want to see in any market, whether it's Greenville, Sumter, Myrtle Beach or Columbia, is that you have some people who are using the realtor document, but then you have people who aren't members of the realtor, so they're bringing this document or they're having a lawyer draft this.
• 25:29
  SPEAKER_00: And so we have multiple parties doing multiple contracts.
• 25:32
  SPEAKER_00: And this does affect realtors because if a non-realtor makes the offer and they use their own contract, something you're not familiar with, what are you gonna do?
• 25:42
  SPEAKER_00: You have to present that contract.
• 25:43
  SPEAKER_00: You'll want to obviously respond using the realtor contract, which is allowed, but now we're negotiating which contracts we're using, and now we're getting into an argument.
• 25:51
  SPEAKER_00: And I can see where a non-realtor would be like, well, if you're not gonna let me use a contract, then we're not gonna use it on my transactions either.
• 25:57
  SPEAKER_00: And so I just think that creates unnecessary issues.
• 26:00
  SPEAKER_00: I don't think I'm gonna win that argument, but that's my argument.
• 26:03
  SPEAKER_00: I also want to give you an important reminder that you only have a limited license to use this new form.
• 26:08
  SPEAKER_00: The license can be revoked as a realtor member from the association at any time.
• 26:13
  SPEAKER_00: And it has revoked that license as to old documents.
• 26:17
  SPEAKER_00: So Tiara Pitts, who was on the uh meeting, works for the association.
• 26:21
  SPEAKER_00: She was very clear that you may not use the association's old documents.
• 26:26
  SPEAKER_00: Do not print out the old form that it allows broker to broker and start as of March 9th, when this document will roll out, they are going to revoke your license to use any of their old documents.
• 26:37
  SPEAKER_00: In fact, Nick and I were talking the other day, somebody emailed him a contract to look at because they had a question on it and they were using like the 2002 contract.
• 26:44
  SPEAKER_00: I mean, it was like four versions ago.
• 26:45
  SPEAKER_00: You may only use the most recent documents in the forum library that SER has.
• 26:51
  SPEAKER_00: And you should go look through there because when they finish, they are cleaning up fonts, they are cleaning up signature boxes.
• 26:56
  SPEAKER_00: Nick and his team are spending a lot of time to make all of these documents cohesive, and then you're gonna really like what they're doing.
• 27:03
  SPEAKER_00: The last thing I want to talk about is we get this question constantly.
• 27:06
  SPEAKER_00: Do I have to update the existing listing agreements?
• 27:09
  SPEAKER_00: Legally, you do not.
• 27:10
  SPEAKER_00: What the association is saying is the same thing.
• 27:13
  SPEAKER_00: Legally, you don't have to do it, but maybe for best practices, you do.
• 27:16
  SPEAKER_00: It's gonna be your decision and your broker's decision as to whether or not you need to update these.
• 27:21
  SPEAKER_00: Certainly, properties already under contract.
• 27:23
  SPEAKER_00: I don't think you need to update these.
• 27:25
  SPEAKER_00: Properties that you just put under listing agreements, it probably would be a good idea to update, but you're gonna have to make that decision.
• 27:31
  SPEAKER_00: And I'll give you two reasons I think you have to make a decision.
• 27:33
  SPEAKER_00: If you're a big listing agent, you have 50 or 60 of these agreements out there, updating 60 of them would probably take you at least 30 hours or more because you're gonna at least spend 30 minutes with the consumer talking about why the change and what that means and how we're making these adjustments and so forth.
• 27:50
  SPEAKER_00: And if you got 60 listings, you're gonna spend 30 hours, almost an entire week, just getting these things resigned.
• 27:54
  SPEAKER_00: That's a lot of time that's not necessary.
• 27:56
  SPEAKER_00: Secondly, what if you have a seller who's already pissed at you?
• 27:59
  SPEAKER_00: It's taken too long to sell the house, they're already mad, they're looking for a reason to get rid of you, and now you're going to them saying, hey, we need to re sign this.
• 28:06
  SPEAKER_00: You're not telling them that they have to re-sign it, but you would like to, but they're gonna hear, oh, I have to re sign it.
• 28:11
  SPEAKER_00: And if I don't, then I can cancel my agreement.
• 28:13
  SPEAKER_00: Now you're bringing in that issue as well.
• 28:15
  SPEAKER_00: But if you have a few listing agreements and it's easy for you to update them, I certainly would update them and I certainly would go away from broker-to-broker compensation.
• 28:24
  SPEAKER_00: The association also wants to be very clear that broker to broker right now in its current form is not illegal.
• 28:30
  SPEAKER_00: But if SER is no longer assisting in the structure of it, which they're not, and major brokerages have stopped offering it, if 19 states have removed it, now 20, if five states have eliminated it from its licensing law, it's effectively dead in South Carolina.
• 28:45
  SPEAKER_00: The market has moved on, and you cannot be that agent who holds on to it because you're the one who'll get sued.
• 28:50
  SPEAKER_00: The difference here is now compensation now lives in the offer.
• 28:54
  SPEAKER_00: It's where the negotiations begin, not it when the listing agreement takes effect.
• 28:59
  SPEAKER_00: This eliminates any steering argument, it protects your fiduciary alignment, it creates transparency, it cleans up all of the optics, it modernizes the industry, and the question now becomes can you articulate your value?
• 29:13
  SPEAKER_00: Because that's where it will determine who thrives in this market.
• 29:17
  SPEAKER_00: The agents who understand negotiations, the agents who understand fiducies, those who understand contracts, they will do better than ever in this market.
• 29:26
  SPEAKER_00: This is the isn't the end of buyer agents.
• 29:28
  SPEAKER_00: This is the end of autopilot.
• 29:30
  SPEAKER_00: And honestly, that's a good place for everyone to be.
• 29:34
  SPEAKER_00: Now, the next topic that I'm going to continue to harp on is we've got to eliminate commission steering through bonus structure.
• 29:41
  SPEAKER_00: Builder bonuses, seller bonuses is by its very nature commission steering.
• 29:47
  SPEAKER_00: And that is the next thing that needs to be removed from all agreements.
• 29:52
  SPEAKER_00: We'll take our victory today and we'll continue our fight on others.
• 29:55
  SPEAKER_00: Hope everybody enjoyed the great news that has been shared to us by the South Carolina Realtors Association.
• 30:00
  SPEAKER_00: Again, I want to thank Rhea Smith for her tremendous hard work in pushing that.
• 30:15
  SPEAKER_00: That's all the time we have for our show this week.
• 30:17
  SPEAKER_00: I hope everybody will come back again next week for another episode of Edition Dirt.
• 30:20
  SPEAKER_00: Please like us, share us, and subscribe.
• 30:22
  SPEAKER_00: Y'all have a wonderful week.