South Florida agents and brokers have spent months preparing for policy shifts that will take effect this weekend, affecting how buyer’s agents are compensated.
But buyers and sellers are just catching on, hoping to use the changes to their advantage.
By Saturday, the Multiple Listing Services nationwide will have eliminated the entry field for offers of compensation to the buyer’s broker. Agents will be required to have written agreements with buyers before offering tours of a home. The changes are the result of a settlement reached in March on a class action lawsuit brought against a handful of brokerages and the National Association of Realtors.
Local brokerages have been preparing by hosting seminars for agents, teaching them how to sell buyers and sellers on the changes, and coaching them on the new forms. The biggest challenge will be getting buyers on board, agents say.
Overall, residential realtors in South Florida expect that this will push the part-time agents out of the industry — those who typically only handle deals for friends and family or who have other jobs — weeding out non-performers from the rest. Brokerage revenue will also likely shift, falling for some firms.
“Now that the imminent doom is here, you’ve got to change the mindset,” said Aaron Buchbinder, an agent at Compass. Buchbinder recently met with a seller for a listing agreement, and the seller gave him pushback on the commission.
One strategy is to work backwards with the seller, starting with how much they want to make off the sale of their property, and then work in an acceptable commission structure, Buchbinder said.
Native Realty broker Whitney Dutton said the changes create transparency, showing that the buyer was actually always paying a commission because it was already built into the price.
The sellers of Dutton’s 26 listings are all offering buyer’s compensation, Dutton said. But the total commission offered may come down a bit.
“We’ve definitely seen a little flex toward 5 percent” versus the industry standard of 6 percent, Dutton said.
Because buyers and sellers now have more leverage, or perceive that they do, agents are already having to prove their value more than ever before. This could drive more business to established teams, some agents say.
The changes could particularly affect agents who primarily deal with buyers. Buchbinder referred to the phrase in sales that “buyers are liars.” The agreement forms will help ensure that buyers don’t bypass their agents.
“It takes a burden off your shoulders if they’re going to run away from you. [Buyers] are committed to you now,” he said.
Still, explaining to buyers why they need to sign an agreement with their agent regarding compensation is “a much more difficult conversation to have,” Dutton of Native Realty said. “We’re probably going to see a lot of agents who won’t understand how to explain their value.”
Meanwhile, brokerages are investing time and money into reassuring their agents.
Keyes Company President Christina Pappas said the Miami-based brokerage’s goal has been to “provide clarity and calm.” Keyes has held classes for hundreds of agents since December.
One Sotheby’s International Realty has been offering “nonstop” training since November, said Seth Kaufman, chief sales officer of Coconut Grove-based One Sotheby’s. He said the brokerage recently had performance coach Steve Shull and real estate coach Tom Ferry speak to agents on mindset and negotiation tactics.
“Everyone is just nervous because it’s new. It’s a disruptor,” Buchbinder said. “Once it becomes standard practice, it’s going to be good.”
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