If you don’t know this yet, I am passionate about the NAR changes that are shaking up our industry. I am passionate about the fact that these changes represent opportunities on many levels.
For those of you who are committed to being professional agents, committed to delivering exceptional service, and committed to creating winning situations for all of your clients—regardless of whether they’re buying or selling—you stand to prosper greatly.
If you stick with the way things have been done, refuse to lean in, and push back on thinking about things in a slightly different way, I suspect you’ll struggle a bit.
Over the past few weeks, I’ve seen countless social media posts, heard podcasts and read article after article about how agents will communicate compensation to each other now that it isn’t possible to post that compensation on the MLS.
Each time I see these posts, I begin to wonder if the people creating them—and worrying about how much compensation a seller is offering—are actually stuck in the past.
I wonder if they’re missing the strategy to make this partially irrelevant, but also the opportunity that exists.
So let’s get tactical. I’ve got four pieces of advice for you if you’re ready to explore the new opportunities for buyer’s agents and get paid what you’re worth.
#1. Ensure Your Own Value-Based Compensation
I know that from the buyer agent perspective, one of the most deeply ingrained aspects of our jobs is that we are used to being paid whatever amount of compensation the listing agent negotiated for us in their listing contract and then posted in MLS. It made things easy.
Historically, a lot of agents haven’t used buyer agency agreements. And for those that did, they would often write into the contract their compensation was “as per MLS,” meaning that they would accept whatever the seller was offering—or, better, what the listing agent negotiated on their behalf.
If you want my truly honest opinion, this has been the single biggest source of commission compression over the past several years. As listing agents have faced the press for lower commissions from sellers, they naturally want to protect their own income first.
So at least in my market, we find that the listing agent may be making 50% to 100% more than the compensation being offered to the buyer’s agent.
I know for a fact that I am worth more than the average agent, and now that it is more socially acceptable, to negotiate my own compensation, I can promise you I will get paid what I am worth.
#2. Get Clear on Your Value Prop—and Think 5 Steps Ahead
I can hear some of you wondering—
- What is it that drives your own personal value?
- How can you tell a buyer you are worth a certain amount?
- How can you ask a buyer to pay you more than what you’ve historically been paid over the years?
Well, let me remind you all of how the seller side of things has morphed over the years.
Do you remember the days when listing agents would show up with their point and shoot cameras to take photos, and it was only the most professional agents who would use a professional photographer? How about staging drone photos or even videography?
I encourage each of you to think about what your real value prop is to buyers. How can you start to articulate it? What is outside the straight transactional things that you provide, do, and bring to the table?
I’d also encourage you to think five steps ahead; what will your next offering be? Once the market catches up to you, how will you continue to adapt and bring even more value to the table?
#3. Remember What the Seller Cares About
Okay, I know what you’re thinking now. You’re in a highly competitive market where there are multiple offers, and you’ll never be able to get compensation worked in without costing your buyer the home of their dreams. Or you’re in a market where you serve mostly first-time buyers who don’t have the extra cash, and they’ll never be able to afford to pay you.
I hear you. I understand your fear and hesitation. My response to you is this: What is the only thing that sellers really care about?
At the end of the day, I promise you it’s not how much you are getting paid, it’s how much they are getting paid. There are absolutely ways to create true win-win scenarios.
Here, you may need to spend some time learning the clauses that you will need to use in a variety of different scenarios. As you start to draft new offers, you may need to take extra time when explaining your offer to the listing agents.
Remember, just because you are educated and committed to being the best agent possible doesn’t mean that the agent on the other side of the transaction gets it at the same level.
#4. Add a Net Sheet to Each Offer
You may need to consider submitting a net sheet with each and every offer, spelling out the exact net to the seller just in case the listing agent isn’t able to adequately articulate what matters most: how much money the seller will walk away with at the end of the transaction.
And who knows? We may even end up in a world where, once again, buyer agents schedule a time to meet with the listing agent and the sellers face-to-face in order to present the offer and talk about the details in depth.
It’s all just really fascinating to stop and think about, right? I’m a huge believer that there is no need to call and ask a listing agent what a seller would be willing to pay for a buyer agency commission.
I’ll say it again. At the end of the day, the only thing that the seller cares about is what they walk home with as their net. It is our job to understand that and find ways to accomplish the goal.
Sellers want to sell and buyers want to buy. So maybe some food for thought for you all:
- How can you take advantage of the opportunities that we’ve been given?
- What tools do you need to add to your arsenal?
- And do you really need to know whether the seller is offering compensation and how much?
