Here’s how buyer’s agents can prepare for upcoming industry changes.
These are uncertain times for real estate agents. In case you aren’t aware, a jury recently ruled in a landmark legal battle within the real estate industry that could have massive implications for the national market. Essentially, the fight is over our current compensation model, specifically buyer’s agents’ commissions. The plaintiffs assert that agents are paid too high for their services, and the National Association of Realtors’ rules on the issue amount to price fixing.
While this current legal battle covers key Missouri markets, similar cases will likely spread across the country, and the impact could dramatically change your business—especially if you work primarily with buyers. To prepare for potential changes, here are three things you can do right now to protect your business and insulate yourself from future shake-ups:
1. Educate and communicate with your clients. At the heart of this legal question is the widespread confusion about how and why buyer’s agents are paid. To combat this, make sure you hone your value proposition to let your clients know exactly what you bring to the table. Since buyer’s agents’ commissions may be open for more negotiation, how well you can demonstrate your value may directly affect how much you get paid for future transactions.
2. Use buyer-broker agreements. While these documents have different names in different states, they all mostly have the same purpose: to legally protect you and your client’s interests. This document will outline exactly how much and how you will get paid for certain services, so there will be no confusion between you and your client. These agreements will guarantee you are compensated for your work and give your client peace of mind that you will be providing worthwhile value.
3. Consider shifting your focus to sellers. While the details of the legal fight haven’t been set yet, it looks like the current commission model for listing agents will remain mostly the same. If you’re looking for stability in this uncertain market, shifting your focus from buyers to sellers might be the best way to set yourself up for long-term success.
If you primarily work with buyers and are looking for advice on making the shift to sellers, please call or email me. This is a complicated topic, but I’d love to help you navigate the current uncertainty in our market.
