The National Association of Realtors has agreed to a proposed settlement for $418 million.

If you’re in the real estate space at all, you must prepare for the changes coming in mid-July. And I’m going to share a few key points here to help you prepare your business now, so you’re ready when the changes come later this year. 

This settlement has been coming for a long time. It should not come as a surprise to anyone that NAR ultimately settled. We can talk about that at length. Really, there are three things I see coming out of this:

  1. Compensation is coming off the MLS across the board. Sellers still have the ability to compensate a buyer agent. It’s just not going to be specifically disclosed on the MLS like it is now. 
  2. Buyer agency contracts will be required before showing property. This could present some problems for people based on how they’re running their business right now.
  3. Not every brokerage is covered in this settlement. If you’re in one of the brokerages that was not named, I’d be talking to your attorneys and your legal team to gain a better understanding of your options. 

Below, I’m going to focus on the first two points.

#1: Buyer agent compensation is coming off the MLS

Buyer agent compensation will no longer be included on the MLS. So, when you take a listing, you need to develop a system so you’re not fielding call after call after call about whether you’re paying a buyer agent commission or not.

It could be an email blast or a notification that gets sent out. Come up with a system to minimize phone calls because that’s going to be a time waster and it’s going to take you away from your business. 

When it comes to compensation coming off the MLS, get in the practice of verifying that compensation before you go out and show a property so you can properly advise your client. 

This may seem simple, but it’s some of the most important pieces of advice you’re going to get because this is how commercial real estate has gone for years. 

Then there’s the flip side of the buyer agency contract being required before showings. We’ve been talking about how important it is to have a buyer consultation internally at our team. You’ve heard me say that at length online. Well, now it actually is more important. 

And you have to make sure your buyer presentation is on point. 

Are you clearly delivering your value there? Can you show what you do differently than the average agent? If you can’t communicate that, you’re not going to be able to win buyer clients. And this all of a sudden became the same approach as a listing appointment.

#2: Stay focused on your business

Any time disruption happens, it’s really easy to lose focus. Make sure you stay focused on your business and on the things that are helping you secure more clients, make money and sell houses. 

Once you get away from that and you lose that focus on your core competency, your business is in way more trouble than some legal disruption that’s coming from this NAR commission case.

Stay focused on your business and on finding people who are going to transact no matter what. And start having conversations with them. 

Don’t start shooting your mouth off about talking about this lawsuit. Instead, focus on your client’s needs, whether it’s a buyer or a seller. That’s going to go a long way when you make it about the person and not the property or the process. 

That’s what consumers want. They care about them—not how you’re getting paid or what this lawsuit means. 

It’s how are you going to get them into a house or how are you going to sell their house? 

#3: Buyer rep agreements are good for the industry

Getting a commitment from folks before you start showing them properties is not necessarily a bad thing. Because invariably, when I talk to agents, they’ve been ghosted by buyers after a showing. 

Well, if you’re properly running your presentation and showing that this is the way things are done now, based on this settlement with NAR, the good news is you’re going to have a contractual obligation with people to work with you. 

This is a massive lift for the industry, and it’s going to be really important that you understand the paperwork and the importance of transparency around fees and what’s going on with each individual sale, whether or not it’s being cooperatively compensated. 

That’s going to help you find the clients you want to work with. 

You might have to have a higher volume of conversations. You might need to go through more appointments. But instead of chasing business and hoping things go your way, your intake process is going to have to be a lot stronger. 

Here are the five things I’d be looking at: 

  1. How strong are you at follow up
  2. How strong are you at setting appointments
  3. How strong is your appointment in general? 
  4. Can you explain all the documents?
  5. Are you delivering value

#4: Focus on education—not defending yourself

A lot of people are going to get defensive. And when you get defensive, there’s negative energy that comes off in the conversations you’re having with folks. Instead aim to educate and help people, and the ones who want help will be naturally attracted to you. 

This means you have to know everything about these new rules and regulations and lawsuits. That includes— 

  • what documents to present when
  • what your state requires
  • what the minimum acceptable standard is for an agent on the buyer side and on the seller side
  • all the things you need to do differently

You’ve got to see everything from the standpoint of an educator. Consumers want guidance. They want someone to walk them through the process. 

They want to ensure they can meet deadlines and make their move happen. That’s all about education. It’s not about defending why this was a bad decision or what your value is. 

When you show value instead of telling, you’ll attract a lot of clients. 

When a storm comes, you have three options. One is to stick your head in the sand and hope it goes away. 

The second is to run away from the storm. There are going to be agents who turn in their licenses or simply choose not to renew them. And if real estate is not for them, it makes more sense for them to pivot and find the right path than to keep moving further away from it. 

That said, running away from storms wherever you find them is not a long-term solution. 

The third option is to charge the storm head on and get through it as fast as possible. That means developing solutions in your business that will benefit your clients, your customers, and yourself both now and in the future.