Buyer Agent Commission Lawsuit Questions Answered

Listen now as Tim and Julie Harris discuss exactly what agents should be doing now as a result of the commission sharing lawsuits. 

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1.     Commit to using a Buyer Presentation to 100% of your buyer prospects, 100% of the time.  In your presentation, you will discuss what the buying process is, what your buyer client can expect from you, what you expect from them, how Agency works, and how you’ll be paid.  Don’t have different rules for different situations.  It doesn’t matter the lead source, the price range, their personality type, or how long you’ve known them.  Present every time!

2.     Always state the fact that commissions are now and have always been negotiable.  The fees or percentages are set by the broker and their client.  The buyer may also be unrepresented if they choose to be.  Review what your value proposition is and include past client testimonials.

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3.     Have your Buyer Presentation as early as possible in the relationship and practice maximal transparency regarding both their choices and your terms.  Ask if they understand and what questions they still have before closing for their signature on your State Agency form and the Exclusive Buyer Agreement.  Practice your presentation with a role play partner, a friend or a past client until you’re 100% confident and comfortable.

4.     When presenting to your Seller prospectsbe very clear in discussing how offers of compensation are made from a listing broker to a buyer’s broker.  Be clear about terms and amounts and always present a Seller’s Net Sheet.

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5.     Know how to present several different scenarios to your buyer clients regarding how you will be compensated:  -Through offers of compensation via the listing broker of the home they wish to purchase, asking for seller’s concessions if that offer for your compensation isn’t present, a combination of both, or simply paying out of pocket if you’re not otherwise covered.  When you’ve presented your value clearly, they will be happy to sign your agreement.  If you present poorly, they won’t.

When and How Should You Discuss The Lawsuits and Verdicts With Your Prospects and Clients?  

Talking Points.

Note:  Don’t bring up the lawsuits as a talking point with prospects, clients, or customers unless they ask you to.  (Don’t create an objection where there isn’t one!) It’s a fluid situation that we will keep you updated on.  If you do get questions about the lawsuits, try to keep your conversations short and factual.  Here are some talking points to help:

1. The National Association of Realtors (NAR), has stated they believe the jury in the Sitzer Burnett case reached an outcome that is ‘”neither supported by the law nor the facts presented in the case”.  NAR plans to appeal.  The appeal process could take months to get resolution.  Currently, nothing has changed.  

2.     The trial was concerning a rule, which is already quite consumer-friendly.  That rule applies to local MLSs where listing brokers offer compensation to buyer brokers who have introduced a buyer client who wishes to purchase a listed home.  Those offers have always been and are currently negotiable between the listing broker and the seller of the home.  They can be a flat fee, a percentage of the sale price, a sliding scale based on the purchase price, or as little as $0 or $1 depending on the MLS.

3.     Remind the person you’re speaking to that agents and brokers are paid $0 until a closing occurs, and that closing is based on the written agreement between the buyer and seller.  Many people still believe that your broker pays you some sort of salary or base pay!

4.     The way commissions are paid has created an efficient, market-tested, transparent sales environment where sellers often receive more showings and more offers, and sell their homes in less time at a higher price than had they not offered buyer broker compensation.  Think of some examples of your recent transactions which demonstrate this fact.  

5.     Communication and transparency is key.  There will inevitably be some changes in how things are done regarding agent and broker compensation. Right now, as long as you follow the first five points of this podcast, you should continue to thrive, representing both buyers and sellers in the most professional, caring, and competent way possible.  

If and when commission practices change, we will keep you updated with new presentations and scripts through Premier Coaching, as we always have!




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