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Transcript

Listing Agents: Navigating Seller Conversations Post-NAR Commission Lawsuit · The Real Estate Agent Playbook

• 0:00
  it's almost that day time is here
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  we've all been waiting for this August 17th
• 0:05
  the deadline that was put in place
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  when the National Association of Realtors uh
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  put out that some things needed to change
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  and that commissions were no longer allowed to be
• 0:16
  advertising the MLS commissions that were being paid
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  um on behalf of the seller to the buyer's agent
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  so we are here now
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  we're gonna talk about what this means
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  now that we've seen this
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  we've had all the dialogue over the last
• 0:31
  you know month to six months
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  whatever and now
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  it's time to figure out how this conversation comes
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  how we're gonna talk to our sellers
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  what we need to expect
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  when we're talking to our sellers
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  and how we are going to all be okay
• 0:45
  and the sun will come up August 18th stay tuned
• 0:53
  what's up guys Jeremy Kane
• 0:55
  real estate agent playbook
• 0:56
  thank you so much for tuning in uh
• 0:59
  if you've been paying attention last couple months
• 1:02
  we've
• 1:03
  talked a little bit about this commission lawsuit
• 1:05
  but now it's here I've had the opportunity to really
• 1:08
  you know think about it and collect my thoughts
• 1:10
  it is just my opinion you have brokers
• 1:12
  you have rules in your MLS over 600 across the country
• 1:16
  but I like to bring ideas and mindset ideas
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  and everything I can do to help you win
• 1:21
  at the game of real estate
• 1:22
  every single day so if you like what you hear
• 1:24
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• 1:26
  watching on YouTube or another social media channel
• 1:29
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• 1:31
  follow and so on uh we just like to help you win
• 1:35
  every single day at the game of real estate
• 1:37
  so let's really get into this so ultimately
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  a lot of people have pointed to this
• 1:44
  just being a listing agent conversation
• 1:47
  the industries you know
• 1:48
  said let's just
• 1:50
  have better conversations with their sellers obviously
• 1:53
  you know sellers are going to be asking right
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  this is in the news the headlines that came out
• 1:59
  you know
• 1:59
  shortly after the settlement came down the 6% buyer
• 2:04
  you know real estate commission is dead
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  all the things
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  you've seen those headlines and so have your clients
• 2:09
  so we must now be ready to address them
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  as everything that
• 2:14
  NAR put forward in the settlement option
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  that hasn't been completely agreed upon
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  as I've heard yet
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  but we are gonna make these changes in industry
• 2:26
  because ultimately
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  it was decided that we needed to be more transparent
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  so this starts with the seller conversation so um
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  the obligation of the seller to pay the buyer's agent
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  was always negotiable however
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  how you know
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  it was presented and and the opportunity to you know
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  MLS has said you had to have this percentage
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  you have to have something
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  you have to offer something
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  all of that got pretty convoluted and the
• 2:52
  the judges decided that you know
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  the plaintiff had had a case here
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  and so as agents
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  we need to really step back and figure out okay
• 3:01
  how are we gonna answer this conversation
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  the truth is is that you can talk about all you want
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  you can say everything you want you can say well
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  you know when you bought this house that you know
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  the seller paid your commission for your buyers agent
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  all the things
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  but why don't we just stop there and say yeah
• 3:17
  you know this
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  this is something that
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  industry wide has become fairly normal
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  that the seller offers the buyer's agent commission um
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  through the listing commission
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  some some people set it out as
• 3:31
  you know
• 3:31
  this is how much it costs you to sell your house
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  and me as the listing engine and offer to the buyer
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  that's where the transparency in the back
• 3:39
  back alley deals kind of um
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  that's where the consumer felt slided
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  so we're kind of moving away from that
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  so just have the conversation and say
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  but at the end of the day
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  it's just net to you right
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  just as when we were getting hundred thousand dollars
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  over asking and all the things
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  all you were really concerned about
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  at the end of the day was
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  net to you or XYZ whatever that was
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  so we're gonna talk about net to you
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  we're gonna talk about all that
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  but at the end of the day
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  let's not you know hype this up as more than something
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  that could come through on a contract
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  that is literally a line item right
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  and so as we as we move forward
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  we progress and we get more comfortable with this
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  and this becomes the norm
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  we now have to understand that
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  that's how
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  we're gonna have to have these conversations
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  and it's okay to have these conversations
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  I would suggest having conversations on the front end
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  I would suggest doing a little bit of due diligence
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  picking up the phone calling on comps
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  you know when you're doing pricing to see
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  you know what the concessions were
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  if there was commission offered and so on
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  so you can really get down to the
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  the net of that offer um
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  because all of that information
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  not only if there was compensation offered
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  you know you could talk to the seller about what that
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  that average is
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  and in the neighborhood and what's going on
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  but you can also use that when you're
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  you know creating appraisal packages
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  and things that are within the guidelines of your state
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  I know not all states
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  the listing agent can have contact with the appraiser
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  but in my state they can so find that data
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  go get that data work a little bit harder um
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  for that data so that you have it to lean back on
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  when you're having these conversations
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  then just as you explain the process
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  just talk about okay
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  this is where this this line item is negotiated right
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  we can agree and we can talk about marketing
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  we talk about all that but at the end of the day
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  the contract at time of contract to buy and sell
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  whether it's in your contract
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  like it is here in Colorado or
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  you know somewhere else on a different form
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  that's presented at that time um
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  that is where we will really focus on that that number
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  just explain what's coming
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  explain that this will all be decided at that time
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  you can you know put what they're offering
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  you can tell people what you're offering
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  you can do all the things
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  but that's that's what my approach will be like
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  it's just gonna be part of the offer
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  when we sit down with the listing price or
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  you know pricing strategy say hey
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  this is kind of what the comp say
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  but ultimately the market will tell us right
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  when we were going away up said hey
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  this is where I think it's gonna praise
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  but hopefully the market tells us it's higher
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  and then I can have that data to give to the appraiser
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  to show that 10 people offered
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  you know over asking and all the things
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  so I would I that's
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  that's my thought
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  is just make it one of those contract incentives
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  or decentives whatever you wanna say and you know
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  take it all into account all with a grain of salt
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  when everything's on the paper there
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  so I've been hearing a lot of old school
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  kind of industry professionals be like well
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  you know this is what I'm gonna charge and you know
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  it is what it is and it's a listing agents duty to
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  have that conversation and tell them why a buyers
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  they should offer a buyers agent commission
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  I I understand but the true obligation in you know
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  the fiduciary responsibility and I get it
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  if your transaction brokerage state or whatever
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  we have exclusive rights to sell
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  and Colorado contract agreements
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  and in that we are foduciaries to the seller
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  so isn't it in our fiduciary responsibility to
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  do what's in the sellers best interest
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  and so forcing them
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  or telling them you're not gonna take a listing or
• 7:22
  you know telling them that you're gonna do this
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  is absolutely against your fiduciary responsibility
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  so take a step back
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  take a little bit different approach
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  and understand that
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  agents that are having this conversation
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  and adapting to this change
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  and doing it are not ruining the industry
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  and they're not
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  it's not choose the real estate industry as we know it
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  or their client because contractually
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  we're obligated usually
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  to have a fiduciary responsibility to our client
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  so as we're working through this
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  understand and think about that right
• 7:56
  how passionately are you that this industry
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  you walk into the door and you get X percent
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  because that's what your market is
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  and that's what your MLS you know
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  is used to and all the things or is it hey
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  I'm a way more value to my client
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  if I educate them on what's going on
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  educate them on the situation
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  and then we negotiate that right
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  we use my negotiation skills that they are paying me
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  for as a listing agent
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  at that time
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  to work out the best deal that works for them
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  the deal that the seller wants
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  the deal that the buyer wants
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  buyer wants to buy seller wants to sell
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  you know what that means so um
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  that's that's one note that I wanted to make
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  is that this isn't you know anything crazy
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  it's not anyone trying to ruin the industry
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  but when you really step back and think about it
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  this is your sellers bottom line
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  this is what money is going into their bank account
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  sometimes usually
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  one of the biggest checks that they will receive
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  in their lifetime so um
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  when that comes to that I'm all in on the sellers
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  I'm all in on my clients right
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  I wanna make sure that I am doing everything I can
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  to make the best deal for my client
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  buyer or seller and so
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  just be very careful with
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  how you're talking about that
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  and how you know
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  your uh
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  buyer broker friendly comments and things like that
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  because if you're buyer broker friendly
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  and you're writing a check for your client
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  that's exactly where we started this
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  and we wanna get to that transparency
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  so now let's talk about to disclose or not disclose
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  right 100%
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  you know make sure you're listening your brokerages
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  make sure you listen to your brokers
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  make sure you listen to your state your MLSs
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  all the people that we've signed agreements to follow
• 9:39
  all the rules with
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  but when we step back and talk about this
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  let's have some roleplay scenarios
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  first and foremost
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  I'm just gonna ask a question and you in your head
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  I want you to think about what you would say
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  so first I'm the buyer's agent
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  I call you up uh
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  would your seller accept 10% less uh
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  on on that offer
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  the buyer's agent
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  I'll give you a chance to think about what you're gonna
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  say
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  uh I'm not obligated to tell you that
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  but put in an offer and we'll see what we can do right
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  or you know
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  put it on paper I'll present it
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  I'll let you know what the seller says okay
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  perfect role play scenario No. 2
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  is your seller offering a buyers
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  agent commission of X percent
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  of course they are I'm a good listening no
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  stop respond as you would in scenario 1 to scenario two
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  because both have to do with the net right
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  if you are saying that your seller is offering
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  compensation to a buyer's agent
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  you are
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  telling them that they are willing to accept less
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  than the marketed price
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  because that number is no longer marketed in the MLS
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  and so I I know for a fact I've sat and
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  you know a million
• 11:05
  you know trainings with agents who talk about their
• 11:08
  you know
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  boast about all their stuff and do all the things
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  and they're always you know
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  my sellers best interest my sellers best interest is
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  comes up a lot in divorce situations
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  like you aren't supposed to disclose that there's
• 11:19
  you know anks there that would
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  there's nothing there you're not supposed to disclose
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  there's something in that situation that would cause
• 11:28
  the seller to consider less money right
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  because that's the fiduciary thing
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  so why is it okay to disclose
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  hey my sellers
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  you know now that it's not advertised
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  it's not required to be an MLS
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  why is it okay to disclose that
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  they'll take X percent less
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  by way of a buyer's agent commission
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  just my two cents think about that
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  take from it what you will um
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  like I said I'm not the law
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  I'm not the rules but um
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  I think that again we continue to push that
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  we're gonna negotiate this at time of contract however
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  uh that has been laid out in all cases
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  buyer and seller have to have that transparency
• 12:07
  and understand where the money is coming from
• 12:10
  where the money is going and so on
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  so at the end of the day change is inevitable
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  it's been decided it wasn't our choice to get here
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  but I want you to know that it's gonna be okay
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  have these conversations have these role plays
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  and just come to the table with the heart to
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  have the conversations and prepare your clients for
• 12:29
  the contract process just as we have all along um
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  the non disclosure of compensation as you
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  as I see it it's an advantage to the sellers
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  cause they could have the
• 12:40
  opportunity to pay a little
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  bit less than they might have
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  especially when
• 12:44
  we get in those multiply offer situations again
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  but also
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  it's a very fair way to treat the entire process
• 12:51
  because regardless the buyer on the other end
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  the buyer's agent
• 12:56
  buyer have that agreement and they understand that
• 12:59
  and so why would you take away um
• 13:02
  the cause
• 13:03
  a lot of people
• 13:04
  are gonna have a conversation that says hey
• 13:05
  do you want me to show you a house that is offering
• 13:08
  experts less than you know
• 13:09
  what you are obligated to pay me
• 13:12
  not my suggestion I would not do that
• 13:14
  but they're gonna have those conversations
• 13:17
  so if you just say well
• 13:18
  we'll negotiate at time and contract
• 13:20
  then okay let's go right
• 13:22
  and so you're doing the buyers agent a favor
• 13:25
  it says okay yeah
• 13:26
  I'm gonna give you the opportunity to
• 13:28
  to put what you think you're worth into this contract
• 13:31
  and then you can go take it and
• 13:33
  and we'll we'll figure it out
• 13:34
  we'll negotiate it we'll
• 13:35
  we'll talk about it when all the
• 13:36
  all the
• 13:37
  all the cards are on the table and it'll be okay
• 13:40
  and so let's talk about
• 13:43
  getting to that professional and transparent point
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  and I think this starts with this listing conversation
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  what conversations are we having with the seller
• 13:52
  how are we gonna
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  you know attack this elephant in the room
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  I will tell you that you have done more research and
• 13:58
  you know a lot of the moving
• 14:00
  more of the moving parts
• 14:02
  than your consumers will have done
• 14:04
  so your obligation
• 14:05
  as a licensee is to bring that information to them um
• 14:09
  play within those rules and just be a professional
• 14:13
  the more professional you are right now
• 14:15
  the more market share you're going to take
• 14:18
  the more transparent you can be
• 14:20
  I think you're gonna be ahead of the game
• 14:21
  you're gonna have these conversations
• 14:23
  you're gonna have the reps and I promise you
• 14:26
  if you go to this and you say okay
• 14:29
  I'm gonna play within the guidelines
• 14:31
  I understand exactly what the lawsuit was concerning
• 14:36
  and I'm gonna play by the rules
• 14:37
  it was you know decided by a judge
• 14:41
  then you start to have those conversations
• 14:43
  as these workarounds
• 14:45
  and as all of these things kind of get picked apart
• 14:48
  you're gonna be sitting there
• 14:49
  ton of experience a ton of at bats in that realm
• 14:53
  and it starts as a listing agent to have those reps
• 14:56
  to have those at bats and to make it fully transparent
• 15:00
  and make it as a part of your relationship
• 15:03
  with the seller
• 15:04
  that they understand exactly what's going on
• 15:06
  and how it could benefit them and how
• 15:08
  you know it
• 15:09
  it may be a buyers market at the time
• 15:12
  and they might have to you know
• 15:14
  pony up a little more money
• 15:15
  you never know so it's gonna be okay
• 15:18
  the sun will come up August 18th
• 15:20
  uh this is my last episode before then
• 15:23
  so uh
• 15:25
  we'll catch on the flip side
• 15:26
  I guess and keep getting out there
• 15:28
  being transparent and being the professional
• 15:32
  that you got into this industry
• 15:33
  to be
• 15:34
  and you will continue to be compensated famously for it
• 15:37
  we'll talk to you next time