Bernice Ross

The proposed settlement in the National Association of Realtors’ commission lawsuits has created problems for seller’s agents as well as the more obvious questions buyer’s agents face.

How does my conversation on listing and buyer appointments need to change? What should I do when an unrepresented buyer refuses to sign a buyer brokerage agreement to see a property and instead says, “I’ll just contact the listing agent”?

Jeff Lobb, the CEO and President of Spark Tank Media and Coach 52, has been working on crafting the conversations that both listing and buyer agents can use to address their buyers’ and sellers’ questions in today’s highly confusing environment. As I explained in my column last week, he recommends that you keep it simple and ask plenty of questions.

Buyers Who Don’t Want Agents

Starting in July when NAR puts their new rules into an effect that were created to comply with the settlements, most buyers will be required to sign a broker representation agreement before you can show them a home.

Chances are, some of the buyers who call you about a listing won’t initially want to sign a buyer agency agreement. But if they’re calling you, they’re probably willing to have a conversation with you. Lobb recommends that you do a five- to 10-minute consultation on the phone.

“I’d be asking questions on the phone. ‘Tell me about the house you’re looking for,’ or ‘Would you mind taking a few minutes to really let me know what you want, so I can find the right house for you based upon what you’re looking for,’” Lobb said. “You always must make it about them and the value to them.”

After asking them some quick questions about what they’re looking for, key features they want, price range, and location, Lobb said to follow up with this question to set yourself up for getting a face-to-face meeting: “Have you heard about the recent changes in the real estate industry?”

Lobb explained that they’re likely to say that they have, “heard some stuff or that they really don’t understand it.” You can then reply by saying you’d love to spend five or 10 minutes with them explaining how the “really important” changes work before you go showing them properties.

However, Lobb warned that you can’t just hit them with the changes.

“It’s extremely important that you ask them about what they have heard,” Lobb said. “We have to help them understand it. We can’t just tell them.”

An important caveat: If the buyer contacts you directly as the listing agent, you’re now in a dual agency situation since you already will have a signed listing and agency agreement with the seller. Consequently, you must disclose that you are the exclusive agent of the seller.

Check with your broker, attorney and/or state association legal hotline about any changes you may need to make regarding how you should handle this situation in light of the new NAR rules that go into effect in July 2024.

How to Handle Questions About ‘6 Percent’

One of the biggest problems the media has created is sellers no longer have to pay 6 percent commissions. The response to this is that commissions have always been negotiable.

In past buyer’s markets (with lots of inventory but few buyers), sellers would often offer the listing agent a 3 percent commission and 4 percent commission or a $5,000 bonus to the buyer’s agent as an incentive to show the property.

Here are two of my favorite commission scripts when someone tells me that “John from your office” was willing to provide the same company services that I do, but take the listing for a percentage point less:

• “So, John was willing to cut the commission by 1 percent? If he can’t even negotiate a full commission on his own behalf, how effective do you think he will be in helping you to negotiate the highest possible price for your property?”
• “So, John was willing to give away 20 percent of his commission? I wonder if he would give away 20 percent of your equity as easily?”

Lobb suggested that rather than referencing the amount of your equity, that you use the purchase price instead. If the property was listed at $400,000, that would be $80,000 if the other agent was willing to reduce the commission by 20 percent.

In each case, the secret is to ask a question and let the seller come up with their own answer.

Lobb’s final piece of advice: In today’s market you have to be good at going out and getting listing appointments. Unless you get an appointment, this information makes no difference. This means getting back to the core basics of being accountable, constantly learning, and having the right people teach you how to do the business.

Bernice Ross is a nationally syndicated columnist, author, trainer and speaker on real estate topics. She can be reached at bernice@realestatecoach.com.