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Real estate is an evolving industry, and it is natural to have questions about how practice changes may impact you and your business. “While the industry adapts to the practice changes following the National Association of REALTORS®’ settlement, it is a wonderful time for brokers to bond with their agents,” says Adorna Carroll, president of Dynamic Directions Inc. and Referrals Only CT LLC. “Agents need the direction, strength and confidence of their brokers.”
Here are some tips to support your team during this transition.
Identify and Share Successful Case Studies
Many states have long required written buyer agreements. In the commercial sector, many practitioners are familiar with offers of compensation not being communicated through an MLS. The point is that for many in the industry, these practices are not new, and they are not scary, because they’ve been a part of the fabric of their businesses for a long time. The industry can look to agents and brokers in those states and markets as guides to help others adjust.
“Those of us who’ve been [using written agreements] for decades feel it’s a non-issue,” says Carroll. “It does not need to create issues for agents, if they have the right skill set and are properly trained.”
Emphasize Adaptability
“Life is filled with choices,” says Lynn Madison, owner of Lynn Madison Seminars “and change is inevitable. You can either wait until the sky falls or change, evolve, and prosper.” Remind agents that the industry has navigated many transitions, including the advent of the internet. “Back then, everyone said we were doomed, would never survive and would go the way of travel agents,” she says.
To highlight agents’ own resilience and skill, point out they’ve likely adapted to other changes throughout their careers. Just like they did in those situations, they’ll be able to pivot as needed in a changing industry, so long as they’re open to it.
Establish Clear Processes
To make the upcoming industry changes easier to navigate, brokerages should set up a process for agents to follow, Carroll advises. Specifically, they should apply the same standards they’ve created on the seller side—detailed presentations, written agreements, representation specifics and compensation specifics—to the buyer side. “Agents like a familiar context in which to do business, so they can free-flow,” she says. “If they don’t have that system to give them context, they’re in unfamiliar territory.”
To standardize the signing process, Carroll provides the following advice when a prospect asks to see a property. First, agents should ask for 20 minutes of the prospect’s time to answer questions and explain their services. During this meeting, the agent should review the process of buying a property and explain the written buyer agreement before asking for a signature. If buyers express concerns, agents can explain how signing is in the buyers’ interest, and a written agreement is required for any MLS participant.
Train Agents to Discuss Their Value
“As with any business, professionals seeking business have to differentiate themselves from the competition,” Carroll says. “There have always been and there will always be different brokerage models and brokerage compensation programs,” Madison adds. “We have dealt with them all these years and will deal with them again.”
All REALTORS® should be able to communicate the value of their experience and expertise to consumers. When agents talk to consumers, they should focus on the big themes that matter to them most, such as a REALTOR®’s ability to reduce stress in a highly complicated, high-stakes transaction; demystify the home buying or selling process; and use their experience to navigate difficult negotiations, write the best offer possible, set the right price for a listing, and help consumers avoid common mistakes—all ultimately saving consumers money and time.
Start Early
To further ease the transition, suggest agents start securing written agreements now, Carroll recommends. Doing so now rather than waiting until the settlement goes into effect is good for the consumer as well, as it sets their transaction up for success. The use of a written buyer agreement ensures that the real estate professional and the buyer have a clear understanding about the value that is being provided and what that equates to in terms of compensation.
Encourage your team to begin with people they know, including current and past clients, friends and family, business vendors, and community members, she adds. “When they’re successful [in getting people to sign], they’ll be less nervous to ask strangers.” Then, celebrate those signings.
Provide the Right Tools
In addition to complying with the mandatory provisions for written buyer agreements, brokerages should make the language in their written buyer agreement simple and understandable, Madison stresses. The document should provide options for the consumer and give both the real estate professional and the consumer the ability to efficiently define the relationship based on the transparent and clear conversation they have when deciding to work together. Ensure that agents are able to explain the options available to buyers and how to communicate the value of an agent.
For the most up-to-date information about the proposed settlement agreement and the practice changes taking effect Aug. 17, 2024—including the requirements for a written buyer agreement—visit facts.realtor.
