What does the DOJ objection filed in the Nosalek case mean for real estate? 

Remember, this is a statement of interest. It’s not a legal change yet. But the DOJ is suggesting that sellers should pay no buyer agent commissions whatsoever. 

If the DOJ gets its way, buyer agents in particular are going to find it more difficult to build a profitable real estate business—especially with folks out there saying buyer agents should work for free. 

This is not the time to panic or throw in the towel. Because there are things you can do to prepare for a decoupled commission environment. 

The DOJ’s proposal to decouple agent commissions is big news. Because this is not a lawsuit. This is the Department of Justice—a federal department of the U.S. government—saying, “Hey, I don’t like this settlement with the MLS PIN in the Nosalek lawsuit up in Massachusetts.”

MLS PIN is a broker-owned MLS, so there’s no involvement with the National Association of Realtors®. The Nosalek plaintiffs alleged MLS PIN adopted a policy similar to NAR, requiring listing agents to offer compensation to buyer agents before they could list a property on the MLS. 

What the DOJ has said in its statement is that the settlement doesn’t really solve the problem. 

Not being required to include an offer of buyer agent commission in the property listing doesn’t mean the seller won’t feel compelled to offer the customary commission. This customary commission offering, according to the DOJ, is to ensure buyer agents don’t steer buyers away from their listing. 

So the DOJ has stuck its nose in this, and that tells me we could very well see the decoupling of commissions for buyer agents and listing agents. 

Of course, it’s not a guarantee that decoupling will happen. But the DOJ is obviously making some noise, and they have the ability to force change. First, it has to get in front of court, which is what it’s done with its statement of interest. 

So, here’s what you should be prepared for as a real estate agent. 

#1—Your presentation must clearly delineate your value prop

The value you can deliver as a real estate professional must be absolutely clear in your buyer/seller presentation. The person you’re talking to should understand what they’re getting in exchange for your commission rate. 

The days of entitlement to commission are over. The days of order-taking are over. Now, more than ever, your buyer/seller presentation has got to be clear and memorable in the best way possible. 

And that leads us to the next point. 

#2—A strong presentation takes weekly practice

Practice your buyer presentation at least once a week to clearly show how you add value to the transaction—including all the things you can do differently to help them buy a home (because there’s value there) and how you can help them navigate the market. 

Here’s an example of how you can lead into this presentation: 

“Most agents are going to do three things. They’re going to meet you or talk to you on the phone once, put you on a property drip, and then wait for you to tell them what you’re interested in. That’s not aggressive enough. Here’s all the things I do differently.” 

Have this in a presentation format with a deliverable you can hand to someone after you meet them. Your buyer presentation has to be as strong as your listing presentation. 

You already know you have to be able to delineate what you do differently on the listing side. 

Most agents have a three-point plan when listing properties: 

  1. They put a sign up
  2. They put it on the internet
  3. They wait for somebody to show up 

That’s not good enough. Both your buyer presentation and listing presentation should be exceptional in highlighting your value proposition. They should also be practiced and rehearsed. 

The ability to deliver a clear and compelling presentation on demand in any situation is a skill that will set apart agents who do a lot of business and sell a lot of homes from the ones that don’t in a decoupled commission environment. 

#3—Be prepared to discuss compensation options

Specifically on the buyer side, you must be prepared to discuss options for how you’re going to be compensated for the value you provide. We may see some law changes or rule changes with the MLS and financing, which would obviously change some of the options. 

In the meantime, let’s assume you want to be able to tell buyers, “Hey, if the seller is not willing to pay a buyer agent commission, we’ve got a few options.”

Option #1: Ask the buyer to pay it as part of the offer you write up. 

Option #2: Negotiate a seller’s assist or a credit. 

Before you offer the second option, check your state and MLS laws to ensure it’s allowed. There are a lot of things happening here. I’m saying that could be an option; it may not be depending on your state or your local MLS. But we could negotiate a seller’s assist or a credit and potentially finance the compensation—roll it into your mortgage just like closing costs. 

Option #3: Work for free and do as little as possible.

Now, I’m not agreeing to that option, but it is an option. And if this is what the buyer wants (namely the “work for free” bit), they might need to find another agent who’s willing to do that. 

Option #4: The buyer could pay you in one lump sum payment at the settlement. 

Chances are, your buyer will gravitate toward the option with the cost they’ll feel the least. But you’ve got to know what the options are and how to clearly articulate them to the buyer. 

To that end, get in touch with a local attorney and talk about what’s going on in your state. You should also be talking to your lender partners to get clear on what they allow in terms of compensation on the settlement sheet. 

Make sure you know everything about the options available, so you can help your buyer understand exactly what you’re willing to do for them, what you’re not, and what they can expect from you if they sign a contract. 

This is getting more real by the day. When NAR said in 2019, “This is going to go away,” they were dead wrong. 

This new statement from the DOJ is not finalized. But my takeaway is that agents who invest in their skills, who can clearly communicate their value, and who present all the options to consumers are the agents most likely to still have a thriving business, no matter what comes of industry lawsuits. 

You’ve got to put in the work now—

  • Do the reps
  • Practice the presentation
  • Get educated
  • Know everything about buyer options

Realize some customers aren’t even going to ask you about it because they’re not as aware of what’s going on. But you’ve got to know everything about this. Get educated, get clear, deliver a killer presentation, and show people what you can do differently. 

That’s how you’ll prepare yourself and your business for a decoupled commission environment.