Guys, you've probably heard about the class-action lawsuits targeting realtor organizations, MLS groups, and large franchises.
The plaintiffs claim that they were unaware they were paying both their own fees and the buyer's fees. The lawsuits aim to either eliminate seller-paid brokerage fees or ensure transparent disclosure of these fees. While similar lawsuits have been filed in the past, these recent cases are gaining traction, resulting in settlements.
For instance, a New England MLS paid a 3 million settlement to resolve the issue.
This poses a significant challenge to our industry's business model, which has operated on the basis of sellers covering the REALTOR fees for decades. We may face a future where we have to approach buyers and inform them that they must pay their fees at closing and make a choice regarding representation. If they want me to represent them, we'll have a conversation, sign a document, and they'll agree to pay me a fee at closing if I successfully find a house they like. While lenders may offer financing options, it's not always straightforward.
Therefore, it's crucial that we initiate these conversations.
The first step is to develop a buyer presentation. Every time we meet a buyer for the first time, we should take a few minutes to show them how we work and explain our process, just like we do with sellers. At the end, we can ask for their loyalty and seal the agreement with a handshake.
This will help us become more comfortable discussing these matters with buyers. The next level would be to have buyers sign an exclusive buyer representation agreement, which may be required in some states. For those who haven't done it yet, I recommend pursuing the Accredited Buyer's Representative (ABR) designation. This program, which I taught for the National Association of REALTORS, will guide you through the process and prepare you for potential industry changes.
These lawsuits may trigger a significant shift in our industry within the next few years. It's important to think ahead and consider how we can adapt to potential changes. Let this information prompt you to think differently and become forward-looking in your approach.
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+ 32 Years of Real Estate Sales, Management, and Coaching Experience
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