Within 24 hours of yesterday’s episode of The Real Word—in which Byron Lazine and Nicole White discuss two explosive Instagram posts by Ricky Carruth—the CEO of eXp, Leo Pareja, agreed to sit with Byron in a BAM Breaking Live YouTube broadcast to set the record straight.
Tune in here:
CEO Leo Pareja on eXp’s Commission Sharing Policy
eXp has been upfront with changes it is implementing, including sharing its updated buyer agreement forms and Buyer Representation Toolkit which are gaining praise across the industry for their transparency and simplicity.
During this conversation with Byron, Pareja also shared eXp’s updated listing agreement, stating that the entire industry is welcome to use is. You can download eXp’s “Exclusive Authorization and Right to Sell” here.
Pareja began by sharing eXp’s stance on commission sharing. He started off by explaining his sentiment as the industry gears up to August 17th:
“We’re all collectively trying to navigate this. I think what agents do for consumers is noble. You know, it’s the single most expensive transaction of their life. It’s highly emotional and full of friction and complexity.”
From there, he went on to address Carruth’s now-deleted post, as eXp was rolling out its paperwork (which, like its Buyer Representation Toolkit, will be available to all).
“Ricky and I were having a casual conversation…and what I was referencing was broker-to-broker compensation. Broker-to-broker compensation on August 17th will be deleted out of all MLSs.”
At that point, Pareja made clear eXp’s stance on commission sharing:
“Listing agents who take a listing and be the middleman in sharing commission—that is going to no longer be an option. So a listing agent can be instructed to market compensation or concessions, or however your state and MLS allows it to, but you’re just not going to be collecting it on behalf (of the buyer agent).
“So, the seller can absolutely pay concessions towards the buyer/buyer agent fees, but we cannot share commissions anymore. And that’s the crux of the settlement.”
Are Brokerages Looking Ahead to Potential Changes from the DOJ?
Pareja did ask Carruth to take down his original post because eXp was just rolling out its paperwork and educating its agents on how best to adapt to the coming changes.
Byron also brought up Carruth’s new post, which seems to imply that “there is only one business model,” and referenced NAR’s FAQ sheet on the settlement terms before asking Pareja to address the confusion over cooperative compensation off the MLS.
He asked specifically whether it makes sense to operate according to the NAR’s Settlement FAQs on cooperative compensation off the MLS or to interpret it according to where the DOJ seems to be headed.
That’s probably the best question to ask, Byron. So, since it was first announced…we’ve seen the MLSs constantly evolve. Just like with our buyer representation agreements, we took a crack at it, put it in the field, and we got feedback. We’re always looking for feedback, and I can guarantee you over the next six months, we’ll see a constant evolution…
The reality is we’re all just trying to serve consumers because they’re still going to need professional representation…
While many in the industry are waiting for August 17 as some sort of end date, agents and leaders of change know that there will be more changes coming.
Always Adapting
Near the end of the broadcast, Pareja thanked Byron and the BAM team and shared a few parting words on the real estate industry.
I think the biggest thing we all need to remember is we’re all in this together. Our industry cooperates with each other. And I think that’s what delivers phenomenal representation to both buyers and sellers. I think the way we do real estate in this country is the most efficient on the planet. Being someone who operates in other countries, I’m saying this emphatically. And I just think we have the most liquid, the most transparent, most efficient real estate market on the planet. And I just want to protect that for everybody and just be an agent of change like you said…We won’t get it right the first time, right? But I’m here to listen and adapt as quickly as possible to empower you guys with as much information and tools as you guys need.
Block out some time to watch the full 47-minute conversation.
Are brokerages deciding against commission sharing—even off the MLS?
To back up a bit, yesterday’s Real Word shone a spotlight on what seems to be an emerging trend among smaller and independent real estate brokerages.
Some listing agents are choosing to only focus on the listing agent commission, without discussing the benefits of offering a buyer agent commission from the seller’s side. This business model is “one you may have already seen in your market,” Byron Lazine said, “with independent brokers more so than any of the major ones.”
And that last detail is why Ricky Carruth’s recent Instagram posts have blown up. The now-deleted post read: “Just talked to the CEO of our brokerage, and after August 17th, no listing agent at our company will be allowed to share their commission with the selling agent of any of their listings.”
Since Ricky is an agent at eXp, a brokerage with over 80,000 agents, this went viral online.
Tune in to The Real Word for a full breakdown of the original (now deleted) post.
After the original post was deleted, a new post started collecting comments in the hundreds. And while this one does not reference his company CEO, it does address a listing agent prerogative that, so far, is still allowed by the NAR settlement terms:
The post seems like Carruth is saying that the future of commission sharing…is that there’s no future for it.
Which is why we started digging for some clarification, starting with eXp. And CEO Leo Pareja stepped up to clear up the confusion and break down his brokerage’s commission policy going forward.
Watch the BAM Breaking broadcast for eXp’s stance on commission sharing as we near August 17th.
