The Sitzer/Burnett lawsuit has gone to trial. If you’re a real estate agent and don’t know about these commission lawsuits, you’ve been living under a rock and need to get educated.
Yes, I’m being a little forward here. This is the biggest piece of litigation the real estate industry has seen for decades.
Last week—the week of October 16th—the first of the two commission lawsuits went to trial. Opening arguments were made on October 17th. The trial is set to last up until November 3rd with a verdict predicted on November 6th.
As a real estate professional, it’s important for you to stay up to date on these lawsuits so you can answer questions from your database. We’ve already seen questions from consumers asking about these commission lawsuits, and asking if they have to pay a buyer agent. This is going to come up in conversations with both clients and prospects.
As for what you should be doing as a professional—well, there are three things every real estate agent who is serious about their business should be doing in light of these lawsuits.
#1—Get clear on your plan to generate listings.
You’ve heard it before. You got to list to last. You have to list to exist. If you don’t have a listing-focused business—if you don’t have a plan to bring in more listings at scale constantly every week, every month—then you’re losing control of your business.
When you list homes, you have control. Think about what it’s like having offered deadlines to deal with. Some of these agents are out there, they come up with these knucklehead deadlines: “Hey, nine o’clock on Sunday, we’re going to be reviewing offers.”
When you list the home, you can advise the seller when to set the deadline, and you could say something like “We’ll set a deadline of Monday, let me review everything, and let’s talk on Tuesday” to handle things during normal business hours like a true professional—instead of coming up with a cockamamie, ludicrous deadline that gets everyone all riled up.
I would have a specific listing plan in your business plan for 2024, complete with how you’re going to generate X number of listings per month.
Our team goal is to eventually get to a hundred listings per month, and we’ve set a number for this quarter and for the first quarter of 2024. We have a game plan here to do this. And that should be part of your business plan, too.
#2—Make time for self-evaluation
How strong are your scripts? How strong are your objection-handling skills? Because this is going to be coming up.
It’s no different from “Hey, will you cut your commission for me?” It’s actually a very similar conversation. Are you ready to explain to potential sellers and buyers how you’re going to be compensated for your work? Because if you’re not, you’re going to get run over by the people who know the law and know the cases, depending on how this ruling goes.
But forget the ruling for now. Let’s look at what these other major companies have already done. RE/MAX, Anywhere, NAR, they’ve all said, “Hey, you don’t have to offer buyer compensation anymore.” Bright MLS did the same thing, and it’s the second-largest MLS. And starting January 1, the Real Estate Board of New York (REBNY) will prevent listing brokers from paying buyer agents. Instead, sellers will be required to offer commissions directly, with the listing agreement clearly outlining the seller’s offer of compensation to the buyer’s agent.
So you have to have skill-building in your business plan—a clear skill-building strategy that addresses how you’re going to handle these objections more effectively.
#3—Ask yourself, how strong is your appointment?
Are you delivering the appointment when you meet with a seller? Or when you meet with a buyer with conviction, are you setting the expectations upfront?
Are you doing the things you know you need to do right at the first meeting in order to—
- Get them to be on your side
- Win the business, and
- Be able to navigate all this so you get compensated for the work you’re putting in?
There’s a little self-evaluation here. You have three things to be thinking about in light of these commission lawsuits. And if you’re not focused on how you’re generating listings, how you’re handling these objections, and how strong your appointments are so you can almost eliminate the objection before it comes up, you might be primed for disruption once this lawsuit has moved forward.
