Episode 310: Negotiating Your Commissions in a Post NAR Settlement World

business tips nar settlement negotiating commissions Sep 24, 2024

In this pivotal episode of the WBNL Podcast, we delve into the essential first step of any real estate transaction: executing a professional Buyer or Seller Consultation in light of the recent NAR Settlement changes. These changes aren't just minor adjustments; they're significant shifts in how real estate professionals approach commission negotiations and client interactions.

We unpack the critical talking points you need to address in your consultations, from the introduction of settlement changes to understanding buyer agent compensation options. Discover the invaluable benefits of having an experienced buyer’s agent by your side - from market expertise and negotiation prowess to the potential for saving time and money.

This episode is a treasure trove of insights on becoming the local market expert, building a personal brand that stands out, staying informed about industry changes, and adapting with innovation. Plus, we share strategies for leveraging digital marketing and social media to educate and engage your clients effectively.

Whether you're navigating commission structures or aiming to enhance your client presentations, this episode is your guide to thriving in a post-NAR Settlement world.

The critical first step in any real estate transaction:

Conduct a professional and thorough Buyer or Seller Consultation

Now, with the business practice changes in effect from the NAR Settlement, it is not an option - it’s not something you can take lightly or gloss over. In this episode, we will cover key talking points that address the changes and how to enhance your client presentations.

Initial Buyer Consultation: Key Talking Points

Introduction to the Settlement Changes
1. No offer of buyer agent compensation can be displayed in the MLS
2. Agents must enter into a buyer brokerage agreement before showing homes that disclose agent compensation and how it can be paid

Highlight the key business practice changes:
Outline the commission structure upfront and any fees the buyer might be responsible for.

Understanding Buyer Agent Compensation Options

Please include it in the purchase agreement as a seller-paid concession
Explain that buyers may need to cover some or all of the buyer agent’s commission.

Negotiation Strategies in the New Landscape

Explore strategies for negotiating seller concessions or closing costs that can cover agent fees.
Buyer agent commission paid by seller as a negotiable term in offers to purchase
Each transaction will be unique, with specific scenarios and motivations for both buyer and seller.

Impact on the Home Buying Process

Clarify how the changes could influence a buyer's budget and overall costs.
Explain the importance of understanding the total cost of purchasing a home, including potential agent fees.
Emphasize the importance of collaborating with your local lender(s) to discuss financing options, closing costs, and the total amount needed to close a transaction.

Value Proposition of a Buyer’s Agent

Detail the benefits of having an experienced agent: market expertise, negotiation skills, and streamlined transactions.
Emphasize how a dedicated agent can save time, reduce stress, and save money despite the cost.

Seller Consultation

Introduction to the Settlement Changes
- No offer of buyer agent compensation can be displayed in the MLS
- Agents must enter into a buyer brokerage agreement before showing homes that disclose agent compensation and how it can be paid

Highlight the key business practice changes:

Negotiate your listing side commission in the listing agreement
Prepare sellers for offers that ask for buyer agent commission to be paid as a seller concession. Show sellers the revised purchase agreement or forms utilized in your market, including commission as a term.
Prior to the changes, the buyer's offer considered the co-op commission offer. In a buyer's market, expect the offer to be lower if the buyer has to pay their agent.
Focus on all terms and conditions of each offer individually and always prepare a net sheet.
Be able to clearly and concisely explain your value proposition.

Key Takeaways

Be the Local Market Expert: Know your market area, the inventory of resale and new homes, housing trends, and stats. Market conditions will highly impact negotiations for all terms in an offer including buyer agent compensation!
Build a Personal Brand: Build a solid brand to differentiate yourself in a more competitive marketplace.
Stay Informed: Stay up-to-date with ongoing changes and additional rulings that may further impact the industry.
Adaptability and Innovation: Be flexible and innovative in your approach to business, ready to pivot as the landscape continues to evolve.
Digital Marketing and Social Media: Leverage digital platforms more effectively. Create content that educates clients about market changes and the agent’s role. Use video content to explain complex topics like commission changes.

It's Business Planning Time! Are You Ready to Hit the Ground Running in 2025?

Real Estate Agent Fundamentals & Business Planning

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Video Lessons in this Course:

Real Estate Agent Job Description & Skills
Character Traits for Real Estate Success
Avoid These Common Agent Mistakes
The Four Core Principles for Your Business
Writing SMART Goals
Determine Your Income & Closing Goals
Your Business Action Plan
Tutorial: How to Customize the Business Plan Template
Your Morning Well-Being Practice
Design & Follow Your Perfect Week
Lead Generation for 1-2 Hours Daily
Be an Industry & Market Expert
Master the Key Sales Skills
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Downloads:
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- WBNL Business Plan
- WBNL Income & Expenses
- WBNL Personal Budget
- WBNL Business Budget
- Success Action Plan
- Weekly Performance Scorecard
- My Perfect Week
- Meditation Apps & Resources
- Affirmations for a Successful Career
- Let's Get to Work Checklist