Key Highlights
- This is the third deep dive into agent compensation models according to Inman’s 2020 Agent Appreciation Survey
- In Part III of this multi-part series, we’re focusing on Inman’sthemes of defending your commission, ongoing compensation lawsuitsand compensation isn’t only about money
Let’s get to the final “themes” regarding commission models in Inman’s 2020 Agent Appreciationsurvey: defending your commission, ongoing compensation lawsuits and compensation isn’t only about money.
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Defending your commission
More and more, real estate agents are being put into the position of having to defend their commissions. What to do?
Tiffany McQuaid, president of McQuaid & Company in Naples FL, suggested to Inman that agents have ready a well-practiced script to help them explain their value. McQuaid said,” As a Realtor, your value should be conveyed clearly and concisely in regard to what makes you stand out over and above others…remember your value and worth.”
Missy Yost, an eXp agent who leads the Yost Groupin South Carolina, does offer a discount from 6% to 5.5% due to intense competition in her area. Yost does not discount the buyer’s share of the commission. “…I’ll do 2.5% and give the other side 3%. You need the other agents. So you don’t want to discount the buyer’s agent portion.” Yost is also transparent about where the money goes to in commissions…the brokerage, the photography, the marketing, etc. and then to the agent…to help the client understand the ground rules of commission models.
Yost and McQuaid agree that practice makes perfect in terms of the script an agent uses when defending commissions to clients.
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Ongoing commission lawsuits
Two lawsuits were filed in 2019 and a third was filed in 2020 regarding possible antitrust violations in the way that agents share commissions.
Also in 2020, the Department of Justice filed a case and then settled with the National Association of REALTORS® regarding antitrust issues regarding commission policies plus other things.
None of these cases has made its respective way through the courts but there is a growing trend toward additional legal and regulatory downward pressure on commission structures. Most sophisticated agents are preparing for some industry changes down the road.
Compensation isn’t only about money
It’s important to remember that everything is not about money. Company culture, proper support, quality research and services, camaraderie, an environment that offers agents the tools they need to succeed, quality mentorship/leadership support and opportunities, transparency, fairness, etc. are also important.
McQuaid said, “I believe compensation goes beyond dollar value, and I believe you really have to factor that in. Remember, if you work hard and do the right things, the money always comes.”
Thanks to Inman.
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