We know that NAR lost the lawsuit, totaling $5 billion. It's actually $1.8 billion, but it was tripled during the court process. Additionally, some major franchises in America are also involved in this lawsuit.
You might think that it doesn't affect us because it will get appealed, but that's wrong. The major news outlets have been covering this story since the trial, and now, after the verdict, they're going to continue. Your clients, both buyers and sellers, will be talking about it.
A situation might arise when you or another agent in your market is taking a listing, and the seller asks, "I read in the newspaper that I don't have to pay a buyer agent commission. Is that true?"
How do you respond to that?
Well, here's how your conversation should go:
“You have the option not to offer a buyer agent commission. It's entirely optional. But let me frame this for you as it's a competitive and...
There are some significant changes happening in the real estate industry:
If you've been following the Zillow lawsuit, you might know that recently, two major players, Realogy (which includes Coldwell Banker, Century 21, and Sotheby's) and RE/MAX, settled this lawsuit. While other companies and the National Association of REALTORS are still part of this ongoing lawsuit, these two giants settled for substantial amounts—Realogy for 85 million and RE/MAX for over 55 million.
But what's more crucial is what they agreed to within the settlement itself, not just the financial aspect:
They've agreed to give sellers the option to not pay buyer agent commissions (BAC) when listing their homes. This means that when a property is listed on the MLS, sellers can choose to set the buyer agent commission to zero.
Imagine this scenario:
In your market, a significant portion of sellers start opting not to pay a buyer agent...
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,...
One conversation that can come up as you're out there taking listings is, of course, centered on commissions.
And here's a great script to help your sellers look at the commission, not just cost, but as a marketing incentive to encourage showings and to encourage more offers.
So the script kind of goes like this:
"Hey, Mr. And Mrs. Seller, one thing I wanna talk to you about is the commissions that we charge. Now, I charge a listing marketing fee of X [fill in the blank, whatever you're charging]. And all we have to decide now is what we're gonna pay the buyer's agent. Now there's a little secret sauce here that a lot of people don't understand. Which is, that marketing fee that we're paying to the buyer's agent to bring that buyer in can actually incentivize them to show your home.
"Let me show you an example:
"I did a commission survey in your market area where your home is. I went out about a mile two miles, and I looked at every listing that...
I'm gonna give you two techniques today that can really transform what you're doing on social media.
Because a lot of agents on social media are doing the same old, boring posts. They're not getting a lot of engagement. Nobody really cares. Nobody's really watching. And so they wonder why they're struggling and other agents are doing so well.
There's a few reasons.
Now one is that people are seeing repetitive posts. They're seeing the same posts from the same REALTORS over and over and over again. And they get boring. They just become noise. So how can you break through?
I'm gonna give you two strategies right now:
1. Educational marketing
Educational marketing means you're teaching somebody. So you're the teacher, they're the student. We're experts in this industry. And we could come up with a list of a hundred things we could talk about about the real estate market easily that other people outside the industry don't know.
Now we've all heard of supply chain issues hitting the entire country. Lots of things happening because of COVID breaking down the supply chains.
But is this impacting real estate?
It absolutely is impacting real estate. It's impacting builders. It's impacting all kinds of vendors that are tied to real estate.
My wife and I are remodeling a house and we've had to wait six months for the cabinets to come in. It's impacting remodeling and flipping and all kinds of areas that we don't necessarily consider tied to the supply chain.
But real estate is definitely one of those areas.
So how can we use this?
Here's one way we can use it when we're out prospecting is talking about supply chain issues because everybody can identify with it right now.
So you might just say:
"Hey, you know, what, can you do me a huge favor? Even real estate is facing supply chain issues. We're facing very low inventory compared to most years and huge buyer...
I got a quick note on feedback. This came to me from one of my friends that works with me, Adam McGrew. He started doing this a couple of years ago and I thought it was brilliant.
We're always asked for feedback when we do showings. Number one, give the feedback because the shoe's going to be on the other foot. When you are selling a listing and they show your house and you're going to ask for feedback. And if they don't provide it, it's going to be frustrating. So always give feedback.
But now you want to go further than that. Meaning, when you're giving feedback, it actually can be a pre-negotiation tool.
This is how Adam uses it:
Instead of just saying, "Oh, it's a nice house, but they chose another one" or something super simple that's not meaningful, Adam gives a detailed text.
In the text, he gives an insightful analysis of the home, how it compared to other listings, what the buyer noticed as they're walking through the house...
Jim would like to talk to you about your real estate business with a complimentary 30 minute coaching session.
During the call be prepared to discuss - Your goals for the next twelve months. Your time management and priority management strategies. Your willingness to change and adapt to a changing market landscape, and your biggest choke points - what's really holding you back
The road to transformation starts with small steps. Take your first towards a better real estate business today...