Brokerages are at the crossroads – they can either encourage sales with all buyer-agents, or go the same way as C.A.R. and make it harder on them (which promotes single agency) and add blustery headlines. I think brokerages should stand up for all buyer-agents; not only because buyers deserve representation but it also gives us more qualified buyers for our listings!
eXp Realty has in recent days taken the notable step of updating its much-discussed listing agreement with language stating the company “does not share commissions with a buyer’s broker” — language that has prompted a flurry of debate online.
The brokerage published its new listing agreement internally on Friday. In a conversation on Wednesday with Holly Mabery — senior vice president of brokerage operations at eXp — she said that the document was updated because “we wanted to make sure our agents are best protected.” She added that “we’re not going to do broker-to-broker compensation.”
“We’re not going to do pre-determined compensation,” she continued, adding that instead, eXp listing agents will provide their clients with “a menu of options.”
The document reflects this approach, stating on the first page that the “broker (eXp) does not share commissions with a buyer’s broker.” However, that language does not mean buyers’ brokers can’t collect compensation from sellers. The document goes on to state that buyers may request concessions from sellers, and those concessions could be used to pay for brokers among other things. Homesellers using eXp agents are free to offer compensation as they see fit.
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Everyone will be able to see the seller-concession amounts on Compass listings:
Compass Technology Platform Enhancements:
On August 15, we will be rolling out enhancements to the Compass technology platform that will empower Compass listing agents to effectively communicate offers of Buyer’s Agent compensation for their listings without relying on data from the MLS.
Compass Listing Agents can open their MLS listing in Listing Editor to add Buyer’s Agent compensation offers for display on Compass.
Compass-entered Buyer’s Agent compensation offers will be displayed on agent and consumer Compass listing pages.
Compass-entered Buyer’s Agent compensation offers will be displayed in agent search results.
Publicizing the seller-concessions amount will make it easier for buyers and their agents to know what to expect, and it feels more like a promise. Those who say they don’t do broker-to-broker compensation or ‘just negotiate it in the offer’ are giving the middle finger to buyer-agents because without some sort of commitment up front, any possible seller concessions during negotiations will be little or none (it’s too late/too easy for seller to say no).
Compass is doing it – can’t every brokerage who believes in buyer-agents at least publicize the seller-concessions amount on their company website? If the seller or agent doesn’t want to disclose, fine – they don’t have to. But buyers and their agents will be flocking to those that do!
“hiring the right (listing) agent also lets buyers know you are serious about selling.”
It’s true, and every decision a seller makes is telegraphing their motivation to sell.
What are buyers hoping to figure out?
Is the list price in the right ballpark?
Do the photos make a good first impression?
Will the listing agent be helpful or a barrier to sale?
It is going to be more critical than ever to hire a great listing agent. Buyers will be deciding if they are going to hire their own buyer-agent, or go direct to the listing agent unrepresented (if they are assuming that going direct will make a difference in winning the property).
How are buyers going to figure it out?
1. If the buyers and/or their buyer-agent have been around for a while, they will recognize the successful listing agents – they have seen their signs around, and have probably seen some of their advertising too. Buyers will have a feel for the pricing accuracy of the listing agents they recognize. Sellers should hire the agents who have a good reputation among those in the buyer pool because buyers and buyer-agents want to work with a listing agent who is transparent and someone they feel good about.
2. But buyers aren’t going to bank on what they think might be a good reputation. In 2024, every buyer is going to check out the agents online. Listing agents with a good track record of sales on Zillow will help put the buyers’ fears at rest. The agents with 12 sales per year have something good to offer in this challenging environment.
Example: I mentioned the 5-offer bidding war last week. I look up the sales of the listing agent every time, and in this case she had six sales in the last 12 months. I knew right then that it would be trouble trying to win it, and after 2-3 days of not delivering the highest-and-best counter that she promised, I knew we were toast (she sold it to a neighbor instead).
The sales history on Zillow is the most revealing data point about any agent.
3. Some listing agents have a reputation for pricing high, and letting it ride. Check how long their listings take to sell – it will tell you a lot about the price accuracy of this new listing they are offering.
4. How is the listing agent going to handle unrepresented buyers? Call them on the phone and ask. Just getting the listing agent on the phone is a miracle these days, so if you get them to answer, you might have a good one.
I guarantee this – every agent will struggle with the ‘unrepresented buyer’ question for months to come. Many already refuse to do dual agency, and an unrepresented buyer is similar so some listing agents won’t have any solution, other than, ‘go find a buyer-agent and pay them’. The other agents who get giddy about ‘unrepresentation’ probably just want to take advantage of the situation. A good listing agent would cover a few of the good and bad points.
5. Is the seller offering concessions? How much? How your listing agent handles these two questions will determine if the buyers will have their own representation, or if you and the listing agent want to take a chance on unrepresentation being a viable solution when everyone in the realtor universe is throwing mountains of disclaimers at you.
Any listing agent who declares that the seller is offering a 2.5% concession will have a parade of buyers through the house. Not only does it fix the buyer’s representation issue, but it also tells them that the listing agent gets it about creating a win-win for all.
These are some of the biggest concerns for buyers, so sellers should hire their listing agent in direct relation to how well they handle these points above! Get Good Help!
The new 19-page listing agreement is out! They didn’t waste any time getting to the listing agent’s pay. Boom, right at the top of the newly revised form, it commits to the commission rate plus a little extra if the buyer is unrepresented.
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All the way down on page 14, the Optional Additional Compensation is described:
We’ve never had this option before and everyone is probably wondering what the extra work is worth? It will look a lot like dual agency in practice and the liability is 2x on those, compared to when two agents are involved. When faced with the buyer wanting to cancel their purchase, most every agent will be forced to provide what’s needed to get them through.
Extra pay is warranted, but how much? It will be interesting to see how this plays out.
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Seller Concessions finally get an explanation on page 11:
The MLS will have an entry for the amount of concessions, but the new form insists that the seller must notify the broker in writing of the amount, BUT THIS FORM DOESN’T PROVIDE A PLACE FOR THE SELLER TO NOTIFY. It is as if the C.A.R. wants to make it near-impossible for buyer-agents to exist.
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They did get around to some explaining on page 15, but if you’re a seller and happen to get this far, it sure looks like the buyer is paying the buyer-agent commission:
Buyer-agents need to rely on their buyers paying their fee, because these forms aren’t giving much hope to sellers paying them any compensation. The authors of these forms have abandoned buyer-agents to cover their own backside. It is embarrassing that they don’t fight for buyer-agents instead.
These are great tips – curb appeal and staging make the best visual impression AND they send the message that the sellers care.
While the process of trying to sell your home can feel daunting, there are some simple yet highly effective hacks that can reel in buyers quickly.
Every seller wants to increase their chances of an offer to avoid having their home on the market for longer than expected, and while making big upgrades can improve your home’s appeal, these can be costly and time-consuming. Fortunately, small details can make a significant difference. The key is to appeal to potential buyers when finding ways to sell a house fast.
We asked property experts what were the simple tricks that they have found make houses sell much quicker. These are the seven techniques and tweaks you can make to ensure selling your home is a smooth and speedy process.
‘When someone looks at your property online you have only eight seconds to capture their attention before they move on to the next one. A well-staged home will make for incredible photos and show in its best possible light.’
The California Association of Realtors had to re-write a few of their new forms in order to comply with the DOJ critique. These revised forms get released tomorrow, and they will probably help chart the final path for buyer-agents.
There are two noteworthy points in them.
1. The old listing agreement mentioned the full commission rate the seller would pay at closing, and then in a separate paragraph at the bottom of the same page, it listed how much of that full commission that would be paid to the buyer-agent. The second rate was determined by the listing agent with little if any involvement of the sellers.
The new listing agreement will dictate the commission rate the seller will pay at closing for seller representation only. There won’t be any mention of the seller paying the buyer-agent.
But there will be a second paragraph where the listing agent can add an additional fee for handling the extra work created if the buyer is unrepresented.
In summary: Agents who only use the basic listing agreement can completely ignore buyer-agents, and can also tack on an extra rate or fee for bringing in unrepresented buyers. It will encourage single agency, and buyers will really have to be committed to getting good help!
2. If the listing agent is committed to having their seller offer “concessions” to a buyer that may be used towards a buyer-agent commission, they will need to include a separate and optional form. The form will ask the seller if they want to offer concessions (Yes or No), and if so, how much do they want to offer.
Ed Zorn is the vice president and general counsel of CRMLS, the largest MLS in the state. When asked about the concessions amount, he said sellers should not ‘commit to any kind of number whatsoever.’ Our Compass management agrees.
To the ivory-tower folks, not offering a specific commission rate to buyer-agents sounds safe and compliant. But it will expedite the death march of the buyer-agent.
The listing agreement will be encouraging single agency and if a buyer-agent can find their way to the negotiating table, there won’t be any guarantee of the seller paying anything towards your commission.
Literally, there was a chance for this to all work itself out by using concessions to pay buyer-agents. But everyone is so nervous about future litigation that these revised forms will lead us down the path of eliminating the buyer-agents. Single agency is upon us!
I’ve been sitting on this photo for about ten years so it’s about time!
The vice president and I have things in common. We were both born in Oakland and she got her start at the same place my grandfather did. Her law career began in 1990 at the Alameda County’s District Attorney’s office – my grandfather was there from 1923-1969, including his 22 years as the district attorney.
My brother’s wife Jill worked at the DA’s office at the same time as Kamala (circled above)!
What does Kamala’s ascent to the top of the ticket mean for home sales?
Biden dropping out of the race has to provide some calming to the real estate market, especially in gloomy blue states where hope was dismissed about three weeks ago. Even though local sales have been healthy, if the hopium causes a critical 10% to 20% of extra demand then we could see a surge over the next 30+ days.
She is a fantastic speaker, and it won’t take long for the polls cast doubt on the outcome. Even if she loses, she will provide enough comfort for the rest of 2024 that our market should survive quite nicely.
As long as nothing gets too negative, home sales should be fine!
It looks like last week may have been the peak inventory for 2024, just like the same week in 2023 was the peak last year. The difference? There will be more listings that fail to sell this year.
The median list price was over $4,000,000 until April 8th this year, and today it is $3,695,000. It was $3,500,000 last week, which was the low point in 2024 and the third time it was that low this year.
Last year, the median list price was in the mid-to-late $3,000,000s all year and only touched $4,000,000 twice until the end of December. So even though the median list price is substantially lower now than it was in 2023, the inventory is around 23% higher.
The other real estate reality shows are so full of drama that they are barely watchable. While they do pack some drama into Ryan’s new show, Owning Manhattan on Netflix, they mix in a few examples of him doing a masterful job of negotiating between agents and principals to make deals. Specifically, listen to his verbal discipline when talking on the phone – Ryan says very little, and keeps all the attention on the price – no stories or verbal vomiting.
He demonstrates a realtor’s most important job:
Say the right things, the right way, at the right time.
And he could give you the list of the things to say – it’s saying them the right way, at the right time that makes the difference between highly productive agents, and the rest.
He makes it look easy, but the mental discipline to gently yet succinctly assist people with making the right decisions is an art form and extremely uncommon.
I watched the eight episodes that have come out and thought Ryan’s negotiating was the most accurate representation of high-level agent deal-making that has ever been documented. Ryan also loses three key agents during the first season, which is another part of the business – agents are known to move around, and aggressive recruiting (particularly by Compass) is a constant threat.
This is just the trailer – if you are an agent or big fan of real estate, watch the whole series:
Floyd Wickman said it best. Don’t sell with blah blah, when you can sell with blah.
Oh, the 5-offer bidding war with my buyers? After a week of kicking it around, the listing agent finally called last night. Her sellers decided to not conduct a legit bidding war (even though the listing agent had promised it all week) and instead they sold the house to a neighbor at an under-market price.
It was a great example of how most potential bidding wars get botched by amateur listing agents. The realtor doesn’t take control of the situation and it just goes where it goes – and buyers get screwed.
