Join the movement at Inman Connect Las Vegas, July 30 – Aug. 1! Seize the moment to take charge of the next era in real estate. Through immersive experiences, innovative formats and an unparalleled lineup of speakers, this gathering becomes more than a conference — it becomes a collaborative force shaping the future of our industry. Secure your tickets now!
Pulse is a recurring column where we ask for readers’ takes on varying topics in a weekly survey and report back with our findings.
Commissions have been a hot topic for quite a while now. With the lawsuits and the domino effect of settlements, one thing is clear: How we handle real estate commissions is changing. It’s one thing for agents to know and understand those changes, but what about clients?
Last week, we asked: Are you talking to clients about the commission settlements? Have you changed your approach in having the commission conversation? If so, did you shift how you approached them when the lawsuits began, or are you waiting until decisions are made?
You let us know below how you’re handling commission conversations with your clients now and the changes you’re making due to the commission lawsuits:
- Great. Most saw the headlines but didn’t know what it really meant. I explained that not much has changed. They still have the option to pay or not pay the buyer broker compensation and that I highly recommend doing so because their buyer pool will shrink leading to fewer showings, fewer offers and, potentially, less money. All have said, “Of course I would still pay it.”
- Not yet. I am licensed in two states, Maryland and Florida. In Maryland, in order to represent a buyer, we are required by Maryland law to have a written agreement, so this discussion isn’t new. Explaining that it may be more likely now that a buyer will have to pay the commission, and that the buyer may not know that before seeing a house, will be a change, but not insurmountable. In Maryland, if a buyer balks at signing the agreement, they can work with an agent willing to charge less, or they can always navigate the process without representation. In Florida, transaction brokerage is presumed. We don’t know yet how things will change, but I expect we will see more agents working under single agency agreements with buyers.
- Not at all
- When talking to my clients, I am now focusing on the realities of the settlement, being clear to note that nothing is definitive until the court has approved it. I believe that sellers paying buyer agent commission is going to quickly become a thing of the past. Sellers are grasping the subtleties — if they’re being prohibited to offer compensation through the MLS, why would they seek a “workaround”? That’s only agents I hear discussing that. I believe buyers still need agent representation, but I also believe (as my current sellers have expressed to me) that they plan to pay themselves and offer 1 percent to 1.5 percent. A few have said they would prefer an a la carte menu of services, but from the conversations I’m having with buyers and sellers, I think commission will become and remain decoupled. As a sidebar, I’m fascinated by the discussions agents are having publicly, insisting that sellers will want to find a workaround. Why on earth would sellers voluntarily provide commission (disguised as concessions) when / if a new law is passed that says they shouldn’t? What seller is trying to give $10,000 to $15,000 of their own money away? I could potentially see some concessions if they needed to attract a buyer, but I’ve been an agent for nearly a decade, and during that time, we’ve seen huge periods of multiple offers — more often than not. Right now, it’s common to get five to 10 offers per listing. There is zero incentive for sellers to offer buyer agents anything.
- We talk about our process and the contracts and are transparent about our professional services fee.
- Mostly, I’ve had to spend time explaining to sellers that commission didn’t just go away. Most of them are under the impression [that] as of July, commission will no longer be required. It’s wild how absolutely misleading and wrong the media has been in their coverage of this.
- The essence of these conversations remains because I’ve always practiced complete transparency. Compensation has always been negotiable. However, I will now be prepared to better present the pros for offering cooperating compensation to the buyer side — since not doing so could limit number of buyers who could consider that property. The main question remains about dual agency — how to truly keep things free market. In states that do not even allow dual agency, what happens when buyers go through the listing agent only?
- Lots of explaining to do due to the misinterpretation presented by the media and online platforms. Even many real estate agents are spewing false information. More time is spent now explaining why we can’t work for free as that’s what so many expect. What a fiasco and a disgrace to our profession.
What did we miss? Please share your thoughts in the comments section below.
Editor’s note: These responses were given anonymously and, therefore, are not attributed to anyone specifically. Responses were also edited for grammar and clarity. Inman doesn’t endorse any specific method and regulations may vary from state to state.
