ICYMI: Unpacking NAR Settlement And Buyer Agency: 60 Days Later - What We Know Now

well good afternoon everybody my name is Holly Ma and I'm the vice president for brokerage operations at exp realy uh on the West Side um joining me today and I'm so very excited exed we've got our CEO of exp realy Leo prha as well as Kendra boner I'm so very excited our VP of Industry relations welcome everybody how's everybody doing hey so excited to be here today this is awesome I love this well jumping right in we wanted to get back to you it's been 60 days since the N settlement and it was really important to us to make sure that we were keeping you as up to date as with the information that we know as we prepare you for what's next and and how we work together so one of the things that um we're going to cover today is is is new information right so we went live on March 18th which was the first business day after the settlement was announced which but you know a lot of new information has come out from enforcement to when the actual start date will be it's been pushed back from the original date so we we we were very thoughtful to make sure that this is not the same conversation we had last time but we W did want to remind you guys of one thing so under the Nar settlement every exp agent is covered by the settlement due to the fact that you guys were all du pay member of n so as individuals which is the biggest concern that most agents had you are fully released there were 94 companies that did over $2 billion in volume in a said year that was outlined in the settlement that were exempt from being uh released meaning that we had to represent ourselves but the the the punch line for you guys to remember is we were already in litigation we've retained counsil and we're confident in our strategy that we'll get behind this one way or another but the the punchline is for you guys out there that are licensed agents solo producers team leaders you are all released from any and all liability from this lawsuit from the settlement that n negotiated let's jump on to the and really we wanted to update you on the practices going forward and and Kendall you and I have been talking a lot about this biggest takeaway residential only this is really important for everybody to know as far as we've had a lot of questions around leasing commercial property vacant land it's residential yeah and it's important that we understand especially when you're working with Buyers what this means for you as a buyer agent so of course the big takeaway from that settlement was no offer of buyer compensation will be um living or existing inside of the MLS right so compensation is moving off the MLS and this means agents are going to be responsible for negotiating their own fee for their services now the big deal here not only do you have to negotiate your own fee as a buyer's agent but we must have these agreements signed with the buyer prior to showing properties now the good thing for some states it was already mandatory for some states and some mls's but for others this is a a new change for us or and what that means for you is that these agreements need to have a couple of things in them all right number one they need to have your rate of compensation and how that's determined as well as it must be definitive right so it can't be open-ended and then of course compensation is capped at the amount that's in the agreement meaning you can charge less than that or or accept less you cannot charge more than what you agreed to originally in your agreement before touring homes and then finally if you state that your services are free you can do that assuming or but it must be in fact that you are not collecting fees or compensation from any other resource yeah and and definitely there's some changes seller wise the offer of compensation coming out of the MLS uh we will see buyers agents uh be directed by their client to ask for a concession as part of the contract uh we're expecting that and and we've got got some strategies to assist you as we go forward but it's really important as we move uh we know we thought things were going to happen in July we're gonna start to see um Rules start to take effect so let's break down the timeline real fast the N settlement of course was in March uh April 23rd we saw preliminary approval by the judge and then the Nar practice changes we're going to start to see these roll out through the month of of June July and August and so really looking at what your state and local forms are doing uh the MLS Etc now this is where it gets really interesting and we're going to see more headlines MSNBC CNN everybody's going to pick this up on or around August 17th and this is when plaintiff's council will be issuing the class action notifying sellers of their ability to collect money usually these are when the postcards go out right in a clash action lawsuit of hey please submit if you've been uh were uh sold a house dur in this time frame that's okay this is part of the process now one of the questions we get asked a whole lot is oh my gosh is this going to be pushed again this timeline is is pretty much what the judge has laid out so far and we do see the final hearing for approval going to be about November now could implementation take a little bit longer past August potentially and that's why we want to stay tuned to what's happening locally because that's what's going to impact you in your day-to-day business now Kendall this is this is where it gets really interesting and and breaking down who's going to enforce what goes next yeah I know absolutely it's um it's with the the whole change the question has been who is going to be responsible for enforcing all these changes and Holly you were at n midye last year and basically they announced that or n announced that the MLS is going to be responsible for enforcing these new rules so you know the question becomes what does that mean you know what does that even look like Holly talk to us a little bit about what you learned last week at n midyear thanks Kendall it's it's interesting and so we are going to see the rule changes out of the multiple listing they are going to be the enforcement and much like we saw with clear cooperation where honestly we turned each other in we're a very good organization or industry as far as self policing and so we could see fines assessed by uh multiple listing services for showing a property not having a buyer broker accessing a lockbox without a buyer broker so that becomes really important we've already seen some mls's that on clear cooperation they find and they may remove you from service for a period of time so you might not have access that's something that I know many mls's are considering uh right now we haven't seen those rules in writing and then finally the last and this is the one that that hits home is not getting paid if you don't have a definitive buyer agreement before you start the work getting paid becomes more difficult most recently in the state of Washington as of January 1 we did see actually legislation that changed requiring a buyer broker in order to get paid prior to consummation of a contract well this is a big deal because we've got agents in Washington State that may be doing work don't have the proper paperwork and are not getting paid so it's really important to all of us to make sure that you're protected and Leo this is something that I know is near and dear to us when we keep talking about what's next and what people are concerned about and you've been so incredibly articulate about this statement thanks Holly yeah one of the things I've been focused on is coming up with consumable you know talking points that if if this is only what you remember from this conversation it's this right so um I think it was a conversation with you two last week where we kind of landed on this right buyer agency has been around for since the 90s and Most states have a disclosure rule where you know when this all broke people said well in my state we have to sign something Most states have a required buer agency disclosure which is a unilateral form of saying hey I don't work for you or or I would like to work for you and I work for the other party but it was not a contract right you were just disclosing who you were actually representing and buyer agency was mostly done through implied representation through the services you rendered so it was only a few states that required bu representation agreements and the big distinction between disclosure and representation is one is an employment contract with a said period of time an amount of consideration that will be exchanged basically the ingredients that you need for a two-party contract with meeting of the mind then that's a very legal definition of what a contract is where we were protected as an industry is by belonging to the mls's and endeavoring to work together we agreed to The Rules of Engagement and one of the Rules of Engagement in every MLS was the unilateral offer of compensation that if that commission was offered that was due upon consummation of the contract by using the MLS and there was this um this concept called procuring cause and I said they in past tense because our interpretation of this agreement is it it extinguishes it so most of us could document through conversations through logs in your MLS by unlocking the lock box that you in fact were the procuring cause of that transaction and then if for any reason there was the debate um you could take the other side to arbitration at your MLS and earn the compensation so that reason is why most people probably did not execute a buyer agency buer representation agreement because there was an implied notion that protected that compensation so now assume that is gone right we this is our interpretation of what we're seeing inside of the the agreement which is now completely opposite where there is no implied protection whatsoever you need to execute a bio representation agreement and on that last slide we talk about enforcement but this is still early days that is what Holly and and the leadership team captured from the conversations having uh happening at n midye but I'd like to remind everybody there's 600 plus different mls's in 50 states who may have slight different interpretations and current rules like actual rules in their state of how they do business and more rules coming we we we got murmur from midyear where people were mentioning that their state is probably progressing new legal you know forms of enforcement and so this is going to be very touch and go where not only do we have to pay attention nationally but then localizing it for you guys so if you there's probably two sentences I want you to remember today and this is one of them right if you do not have the buo representation agreement per the rules being laid out you cannot get paid and if like like Kendall mentioned if you say your services are free you're not allowed to own uh earn compensation and also you can go down on fee but you cannot increase so a very common question is let's say you agree to X Commission and the seller's advertising a higher credit than what you agreed to or the Builder offering a higher Co-op than what you've agreed to you not able to variably go up but if in the reverse of it You' you've agreed to a higher compensation with your client and for any reason at settlement or before settlement there's less uh funds available either for a credit you know part of the credit needs to be used for an HVAC or a roof uh you have the the ability to lower your fee you just can't increase it so um agents will only get paid if they have a buyer assigned buyer or listing agreement uh in procuring cause as we understood it is gone there is no more implied earned compensation unless it's in black and white and again per the paperwork prior to the showing I'm still wanting to see this in practice right anytime there's a rule change there is what is said and then there is what is implemented at the local level and again that's just my experience over years and years of seeing this where this is what the statute would say but the state can local it and the MLS rules may vary right and and that's back to the enforcement question that's actually for some of us who've lived through a couple M Market Cycles once upon a time during financial crisis I would take REO listings and my seller would instruct certain things like no one can enter this property because of safety issues unless they sign this agenda um we cannot not review contracts for 14 days only owner occupants can bid for the first 10 days and they in in in in in in real Behavior went against the MLS rules of that local MLS and we would get fined right so we were between a rock in a heart place where the customer was demanding certain behaviors because they were the federal government in most instances who had specific rules on how to sell their property that went completely like in direct contrast with what the rules of engagement that MLS said so reaching back into personal experience I'm fully expecting this to not be a one-size fits-all uh in when it comes to enforcement and policing so we're we're one of the advantages of this company is our size and scale so we'll be getting realtime feedback across the United States and it's on it's on you guys to be our eyes and ears in the field if you're seeing a behavior give it back to your broker team give it back to your Coes reach out to leadership because we want real-time information so we can pivot and agile respond to it create new documents for you amend current documents again our our our our whole side of this partnership is to support you guys it's to create the documentation we need in order for you guys to be able to navigate the shift um because one of the things I've learned across across my career is life is about 10% what happens and 90% what you react because I have these conversations very frequently right now and there are very strong feelings because this is a you know most of us are the opinion we didn't do anything wrong and we're now being penalized and so the reality is probably everybody on this call has very similar feelings but this is the new information we have if we continue to serve families and making the largest decision of their career um which we think is a very Noble profession uh these are the rules we have to operate with and for us it's about being proactive partnering with you in the field and getting you information as quickly as possible so we're in the best position to navigate this the shift and and be able to serve families during this what will will probably be a very confusing time in the beginning especially with the media you know putting out their their clickbait headlines as we can expect you know I I think you you hit such a good point there Leo because there is clickbait there is confusion and so we wanted to make sure that we we addressed procuring cause but even more so we wanted to make sure that everybody understood hey what makes a buyer broker right like what does this actually look like because this is one of the questions Kendall you and I are getting quite a bit right now yeah absolutely and I think it is important for agents to understand when they actually need a an agreement versus perhaps when they may not need one yet so you know there are questions about um you know what does that look like so what is considered brokerage activities that's what n since in the last 60 60 days has helped to Define for us and what we're looking at on the screen are the things that they've identified as activities that relate to being um and requiring an agreement now I would say what I would add to this what you see on the screen is also virtual tours count so if you are at the home on behalf of a buyer to view preview video tour the home you need to have an agreement in place before um doing that virtual tour also I do want to say just taking a phone call maybe perhaps answering a few questions over the phone or perform performing some activity on behalf of the seller right that doesn't necessarily mean you need an agreement yet right and I say yet on purpose but um one of the things I do want to say and tying back what we talked about in terms of MLS enforcement and having these agreements n also clarified that the MLS is required to receive a copy of the written agreement but it can um but it's not required to so but it can request the copy as a matter of its local enforcement so understand that it's important to have these agreements because you may have to produce a copy of it so I think that's really important for agents to understand yeah you know what we we all want the paperwork right your broker wants the paperwork we are we already have a paperwork for for the listing and I think this is something that we're so used to having the conversation around and Leo you and I talked about it the last time we were all together treat your buyers like you do your sellers absolutely I I think it's the biggest Mantra we can remember because you know one of the things I've been talking about for the last 60 days is you know are are we having to imagine the world completely different from scratch or is it some other behavior that we are familiar with and and I think that's one of the key things when you're learning something or uh training a new Behavior it's like hey is there a parallel in my current practice that I can model and the answer is absolutely and the you know for the folks who've been selling for decades this this is where your skill sets can come through so the what what we're saying is in the seller side in the listing representation side there there are things we can't imagine we can't imagine taking a listing without a signed listing agreement mostly because it's required by the MLS and so you know for everyone who's been licensed a couple decades or even a couple weeks the concept of taking a listing without assigned listing agreement is unimaginable right it's it it goes to a couple Reasons Why Real Estate is um operates under What's called the statue of frauds meaning that oral Agreements are not enforcable it has to be in writing to be enforceable uh oral agreements in other Industries or in other moments in life are fully enforceable in the United States real estate a specific federal statute that exempts everything from that so for us in real estate taking a listing without a listing agreement um is unfathomable it's that same thought process and the other thing that we're we're saying to folks is is all the behaviors and systems that you've had on the listing side is what you need to focus on for the buy side so what do I mean by that when you show up to an appointment assume you're in a multiple bidding situation for that piece of business right when we show up as a listing agent especially in the last five six seven eight years there's such low inventory we've always assumed walking into that appointment that that seller is interviewing multiple people and you have to show up with a strong value proposition that you can articulate that's typically done through a solid listing presentation where you actually identify the services you're willing to do I.E signing the ground lock boox on the front door maybe high-end video maybe drone video and when you show up you articulate your value proposition for the fee you're willing to accept you also know all all of your stats as a listing agent you know days on Market you know your Market sharess subdivision you know your list to sales price ratio you have all of the points that make you stand out against other presentations and so as an agent you're prepared to compete and secure that agreement before you spend any money and invest any time in marketing that home and so put your listing agent hat on and build out your buyer agent process so I I would assume including myself after after selling real estate for a very long time I don't think any of us are prepared to articulate those numbers and it's going to be a new muscle we need to develop so the way I'm suggesting you do it is call and interview buyers youve put into homes over the last couple years right ask them what about the services you rendered were amazing they were impressed with right because there are things already do on a regular basis that you don't actually even put that much value in compared to what the consumer experiences right so do you know how many times in the last year or two were you in a multiple contract situation and one do you know what the average concessions you receive for the buyer in the last 12 months were was it an average of two three four six 10% right is it is is is the brag that you were able to find them at home in a week in a month you know do you know the average showings contract that you've been carrying right and once you've identified all this stuff because again I'm making the assumption that none of us know a because it's not a conversation we're used to having right so it's very important that we now de develop this new muscle and develop these presentations that can beated and and my suggestion is while you have these people on the phone in assuming their happy past customers of yours which by the way statistically most of them are I would ask ask them to actually go to your social media preference um you know digital footprint meaning Google reviews Zillow reviews wherever you guide people towards and specifically ask them to review your buyer representation skills right have them say we were in a multiple contract situation and Kendall expertly negotiated not by increasing price but maybe negotiating a rent back so it didn't come out of my pocket I was able to give the seller an item of value that didn't come out of my pocket and just being able to articulate what most of us take for granted right we do this professionally and sometimes we forget the level of service that we're delivering to Consumers so it's putting on your listing agent hat from a marketing standpoint being able to articulate and explain that value proposition right some of you do phenomenal jobs by introduc them into trusted partners that get them a better rate than they found themselves right you were able to identif ify a title or escro company that had better fees than what had been recommended to them by somebody else right that home inspector who was able to uncover a potential liability and either get them out of the contract right because once we're in contracts we forget that these are legally binding documents and you have to have solid timelines with solid contingencies to get the buyer out in case something arises and if they want to move forward be able to quickly get multiple bids from you know reputable contractors and negotiate the proper concession so again I'm telling you guys stuff that you do second nature but now you're going to have to be able to explain itemize just like on that listing presentations I'm going to do X Y and Z as a buyer agent you need to explain this is what I do this is what we get paid for right because we've all been in a conversation where somebody says well I just need that little key thing that you have and I can do this myself not appreciating the fact that the average buyer transaction takes north of 80 hours or the fact that NS identified about 111 you know specific tasks that we complete prior to and even Zillow who puts out a pretty good report about for sale by owner behavior and folks who've gone through the transaction without representation one of the feedbacks they said that was very hard and it was a full-time job I I love that you you crystallized all of that and because Kendall you and I have been talking about like okay what do buyers want how do we crystallize and focus on that like market demand their purchase power because right now their purchase power they're not sure I mean interest rates are at an all-time high your ability to negotiate as Leo is has put down and this is what I love that you've done for us in kind of breaking down this process and taking charge yeah absolutely and Coach Leo Spitting Fire y'all just telling us how to do the job I love it giving really really really great advice thank you Leo and um Holly you're absolutely right you and I have been in the trench is really you know working hard thinking about what agents need to know how they need to rethink the whole process um and and and do what they've already been doing but take it to that next level be more intentional be more proactive and how they manage their buyer process so you know I would say this it's important to start having conversations with your buyers prior to showing the house right and before that showing phase you know normally we go to the open um to the first showing and we use that time to build Rapport to to build that relationship to get that client to work with us well now we need to um build rapport and get them to hire us prior to that appointment and this is the thing guys we are going to be asking a customer to agree to pay us a significant amount of money I mean just anything um it's all relative but but we you know fees are what they are in real estate and we are charging a certain fee and if you want to charge any fee that you decide to charge as an agent you need to be able to show that client why they should be agree to pay that to you right that you've got to be able to articulate that value and so you know you're going to want to uh change your process in that you're you know we're going to start having an appointment first right maybe you want to meet with them in person if they're available in person at a neutral location or you can do it over the phone or I mean sorry over Zoom or Google meet or something along those lines so let's pause right there because what you just said was was really important the Google meet or Zoom tell me why people should be using those two items yes I think that one I think it's some obnoxious number but I think it's like 87 or 83% of people hire the first agent they meet okay so getting face to face getting that visual connection um really matters when you're starting to work with the um a client especially the fact that some of the people you're going to work with yes there sphere of influence there people already know you but we also know there's a lot of people you're going to work with that maybe have only heard of you they found you online or they were referred to you by a third party and so it's your opportunity to sit down with them build that Rapport discuss their needs and wants it's important to talk about the market trends show your leadership show your expertise your knowledge um go over the numbers with them what that looks like um determine their financial comfort zone also introduce them to your partners whether it's your lender partner um and all the resources that you bring to the table and then that will make it so much easier for you to actually negotiate your success fee right which you are now going to need in order to go to work for them so you know um having that professional strategy meeting with them is going to be critical to getting them to understand your value proposition feel comfortable and confident and working with you so that they feel informed they feel empowered they feel taken care of and you you need to be thinking about as you go into those meetings how are your skills how's your knowledge how's your technology how are how are the resources that you bring to the table going to best help them accomplish those goals so you know thinking about these steps and kind of reordering them I think is going to be really important for agents to as they think about how they take charge of that buyer process for the consumer to feel comfortable and to feel like um you know what you're doing so start to take time agents think about that what is your how is your new process going to um be um Amplified how is it going to be more intentional and then get comfortable talking about it right people will trust and follow a process we've been taught process since birth right going to school there was a process when you go to the grocery store there's a process people will trust and follow a process so the more comfortable you are with a very proactive and intentional process with working with your clients the easier it will be for your clients to follow you and to follow along with that process right so um those things I think are super important for agents um to be thinking about and you know so I recommend meeting with them ahead of time 100% And and one of the feedback pieces that we heard in in concern right getting to sign a large or a heavy buyer broker and honestly we've been paying attention to what consumers have been telling us like like some of your stuff is confusing so at exp we've recently released the single property buy buyer broker because we recognize sometimes you just need to meet that person and build a rapport maybe you have a quick conversation quick Zoom meeting and then you go out and show the property and it's just a onetime like hey are we good together are are we gonna mesh am I best for you or you best for me kind of thing because that's important the consumer should have a choice and honestly you as a practi ier a business owner you should as well so we created the single property buyer broker and I wanted to give you a script that we've shared uh when we've met one-on-one and the regional rallies and things like that but we wanted to give it to you because in every state a buyer gets to choose their agent and when they do there's certain paperwork that they're going to sign and when they sign that paperwork it's now going to include the buyer representation or buyer broker agreement and that will be that fee for service now until you sign that buyers need to know that anything they say could be used in against them in a negotiation walk into an open house Say Hey I just won Powerball guess what that guy's working for the seller and guess what they get to tell the seller so those are the things that become really important as we're building Rapport to share with people share with the buyer like this has changed you do sign these things this is why it's important especially if a legis islative action is saying You must have a buyer broker agreement it it's one of those we order a pizza online on our phone we know exactly what we're paying for we we order an Uber we know exactly what we're paying for it's the same going to any kind of Professional Service whether your attorney or your dentist you name it you know what it's going what you're getting why not us why not us taking advantage and taking care of the client and that is what was so important to us we wanted something that was an easy offramp for a conversation with the consumer so they could make a good decision and so could you in representation of them now something we've talked a whole lot about before you move from there if we go back to the single property and this is part of my favorite part about this companies our agility right this was a demand from you all right as soon as as soon as the the settlement broke uh you know we got hundreds and hundreds of emails direct messages and people's main concern conc was if I get a complete cold opportunity meaning sign call internet lead right something's completely different if it's a sphere of infuence it's a repeat customer there's a lot of Rapport they can meet you somewhere but a lot of people they're just trying to get into that property right and the overwhelming feedback from you all was hey signing a six to eight page contract depending on what state you do business in that is exclusive with long-term commits and and you know you owe me the money no matter what was was a very you know not conductive uh form for what the rules came out with we are the first company to put one out period ahead of State Association already ah head of mls's whoever produces the form in that jurisdiction because we're listening to you right and by the way Hol is working on 2.0 coming in weeks uh because we're getting live feedback so you know you we're your platform to support your business any feedback you're getting if it works what doesn't work do you guys think we should improve them Amendment create additional forms right do we need two or three flavors of ice cream like a low medium high right now we have you know this lower commit one and then we have the ones that you guys use in your States and we're also going to give you language that we think works within the state ones but again this this is a collaborative process and we're proud to be proactively leading the way versus waiting till mid August to find out what's going to happen right so we're we're testing getting feedback because ultimately you guys got to remember consumers will decide what happens right I think Kendall touched on it earlier where uh we we truly believe we're a platform that supports real estate entrepreneurs to build whatever business they want our three ingredients I look for is legal ethical and enforcable according to the Rules of Engagement we're not telling you what to charge or what not to charge what menu of services to offer what menu of services not to offer we want to give you the tools for you to serve the customers that you serve in the most fiduciary way possible and what we do know is that different customers have different level of of needs and so there could be a multiple offering but what you guys need to also remember is this this single form as the feedback we're getting could be part of a sequence of events right the cold lead leads to this agreement maybe it leads to one or two showings where you kind of you know both parties feel each other out to see if there's you know a win-win chemistry of working together and then you would potentially drive them to a full presentation whether it's at an office or a coffee shop um at the kitchen table where you actually get to articulate your full value proposition that consumer fully commits to working with you for months on end where you will actually deploy lots of resources time and energy and then you get them to the fully exclusive one so don't don't think of this as a as an ore but maybe as an and right so it could be a first step to get them into Rapport and then you know because there's folks who said hey I I still want to get the exclusive good for you but we wanted to give you a tool so you consumers didn't have one more objection because you know even in the comments I'm seeing folks saying in my area that's going to be a harder cell we hear you and so but the reality is if these rules go into effect which we assume they will mid- August this is what we're being told is required to do the business so we were trying to give you the tools necessary to continue to serve families you know on my team we have a state statement and is having the best mindset skill set tool set and what I want to take a moment to thank you Leo and Holly and all the team at um behind the scenes at exp is that you know I see this as a tool in the tool belt a part of an overall strategy and I appreciate that our leadership took the time to think about that and listen to our needs our concerns and try to provide tools in the toolkit so that as an overall strategy as agents we can be as best prepared as possible and you know I just I do want to take a moment to thank you for that because I I think that's important whether agents decide to use it or not that's not it doesn't have to be used 100% it's not being required that specific document is not being required to use but to be used but it is a great tool and the tool kit for when you need it right it's like having a screwdriver sometimes you need a flathead sometimes you know you absolutely read said different tools and that's really what we're about and and thank you Kendall and and Leo it I think it's so easy to get caught up in what we're doing that you know give we're passionate about giving you what you need and we're passionate about how we take care of our clients and and serve them at the highest level and I know there's a lot of concern out there like some clients are coming to the table firsttime home buyers and they're scared that was one of the feedback pieces that we heard on that single property buyer broker and a guy said hey I'm I can't sign that because I you're not you're telling me you're going to ask the seller but it's not in here and we took that feedback we put it in into the buyer broker immediately so that that at the direction of the client we can write this into the purchase contract we're asking the seller to credit the buyer at close of escrow and what I appreciate over the last few weeks we've seen the gs's FHA Fanny May Freddy um uh Jenny may all come out and say look we recognize that the buyer broker fee should not be part of the Lo the loan costs and so they're keeping those separated which is huge but this is the key for you and I going to work on behalf of our buyers we have to write it in the contract if it's not an MLS and it won't become mid August we have to make sure that if our buyer needs help we're asking for it it's just like asking for the washer and dryer we want to make sure that we're suiting up and showing up in the best way possible for our clients yeah Kendall yeah Holly and I just want to pause and ask you a question because in all of our conversations of the last couple of weeks I I told you I was probably going to ask you this on air and I I hope I don't throw this as a whammy to you but you're are well-prepared woman um agents are concerned about getting first-time home buyers and VA buyers to sign buyer burage agreements right or buyer rep agreements how do would what is your advice because when you and I talked you had great wisdom about this like how should agents approach this agreement um in in in terms of getting this signed off before um going to see homes I I I think I think two things one when you are working in that segment of the market first-time home buyers or VA you have such a passion for those folks um that is second to none and so when you sit with them the strategy is this is how I help help you and I think Leo on our last call he talked about you know you walk side by side with that client you're their Sherpa you're you're their guide the process so when you're doing this I want you to sit and talk to them about what it looks like in totality of buying the house right because when we talk about affordability it's not just the price of the house it's their it's their insurance right is it in a flood zone it's their utilities can they afford the utilities that are on it it's maintenance I've had I've had first-time home buyers back out of buying a property because the home inspection came back and said the roof's got eight years on it in my mind eight years is fantastic for my firsttime home buyer they're like we're planning on being here for quite a while and that is a really expensive thing if the seller won't work with us on the roof we can't buy this house so that's why going back to what you said in the very beginning Kendall sitting with your buyers and understanding their need their concern walking them through what it looks like from beginning to end and also I I find giving them permission sometimes when we we go to buy a house or buy anything sometimes it's just you have the permission to make the decision and that sometimes it's not a good fit so let's cancel or let's not go forward and and showing them what this script does that you can write into the con the the contract is empowering it's like oh I've got another negotiating strategy I've got another way forward I want to empower all of you as agents it doesn't matter if it's a first- Time home buyer or a VA buyer this is an opportunity now I know for those of you who are so passionate about our our veterans this statement does not work for our veterans right because the this says it's coming from the buyer broker we've got you while we're waiting for the VA and and we were part of the Nar legislative uh uh lobbying last week to uh our members of Congress around VA and and modernization of that program we are in development and will have for you probably in June a document that is a direct seller to buyer broker uh payment of commission so that way if you're working with a veteran you can pull that up and say okay you can authorize me on whatever house we go to look at before we show it I'll call the seller the listing agent and ask are you willing to compensate and if they are we'll send that over they'll send it back and if it meets everybody's standards great then we'll go look at the house but I'm not going to put you in a position that you're uncomfortable so we've got that form coming for you I want to protect our veterans and our agents who protect them as well so that's coming very very soon love that thank you for taking a time to answer that because I think it's just such a a critical question and thought process that every agent is out there concerned and worried about and we certainly want to make sure we take care of all of our clients um not just uh any individual one absolutely and so we've talked a lot about buyers right this is where we're all going to make the pivot and and this is something that the three of us are super passionate about having been listing agents in in the various markets right so when we're prepping a seller and I actually took a listing this last week a really good past client and I was like all right let's talk about what's changing we may not be on the market when all this changes but let's have the conversation because you're about to be a buyer in another market and so we walk through it all talked about marketing we talked about the offer of compensation and what that looks like concessions that may get asked for because interest rates are still High um what he's willing to do the process and then at the end of the day his net proceeds because sometimes all of these things kind of trickle down so Kendall you and I were talking a lot about open houses what are people going to do with open houses as the new rules come across yes yes it is important to understand that you do not need a buyer brokage agreement for holding a house open when you are working on behalf of the seller okay so that has been made clear right so this is good news I know that was in the chat agents were asking what do we do with open houses if you are holding an open house on behalf of the seller you don't need a buyer birk agreement for every person that walks in the door if you have an unrepresented um customer either call you or um you know want to to to preview the home or an openhouse buyer wants to make an offer on the home then of course you need to get something in writing uh with that buyer if you expect to get paid by that buyer or on the buyer's behalf for the services and The Brokerage services that you are performing on their behalf to Let's pause there though because you there was so there was so much right so one if you're doing an open house nothing needed until the buyer starts to cross that Gray Line and say you know I think I'd like representation and that's when that's like the trigger right that's why we wanted to set out what makes a buyer broker earlier in our conversation so what if the buyer's like hey I want to make an offer but I don't want an agent great question if they don't want an agent then I think that it's important that you make that clear with the sell and with the buyer what that means you also should talk to your state broker because I know that every state is different um especially as it relates to non-representation we have that um agency status here in Florida um so I definitely recommend you talk to your broker about that but um I would you should expect that without an agreement you cannot get paid for working on behalf of that buyer yeah and and so this is this is the thing that we would say overall make good choices in who you want to represent make good choices in what makes the most sense if you're representing the seller seller may not want you to represent a buyer they want to may want to stay in single agency in that way okay um that the same with calls for compensation having the conversation up front and this is the other thing I would share please don't make that call for your seller always call them they're the ultimate decision maker the minute Kendall calls me and says hey Holly somebody offering compensation on this and I make the call of yes no maybe oh my goodness it's a danger zone so please please make sure you're moving forward uh on all of these things and this is what I will share all of your state Brokers we will be training on this for the next now and forever um because it's always going to be a an evolving process as new rules are created uh we may have new um forms that we create to better assist you in your business but listing agent strategies the opportunity to visit with your sellers right now is Paramount beat them before the headlines do yeah absolutely Holly and I I would say this too you know to my listing agents in the audience I I just want to remind you that it's now more important than ever to have a different type of conversation around compensation meaning you know in the past you when you went into a listing appointment you were advocating to collect a commission for both sides of the trans action and now your job is to advocate for your compensation and of course justify the value that you bring to the seller and you're going to continue to do that but now you'll have to explain to the seller that instead of discussing compensation for the buy side today at the listing appointment we're likely going to have these discussions as we receive offers right so the process going forward right is now that Buyer Agents are going to be working with their buyers to get on the same page of what that success fee looks like like and then in some cases not all but in some we will see and probably many um we will see buyers asking you the seller to help them pay their agent and but again reminding our sellers this is always negotiable um and that you know the other thing I would say is that offering compensation to the buyer agent as a seller is also an incentive to the buyer right so now it's not just an incentive to the buyer's agent it's it's also an incentive to that buyer and so depending on the marketplace and whether it's a buyer's market or a sellers Market these are again negotiating tools that a seller has in order to get everything else that they want right in the transaction so it's still it's an option and it's just important to recognize the role that compensation plays in that transaction um for both sides I I I love the the negotiating strategy and so one of the things that we as we kind of can get close to the end of our time together the three of us we were really passionate about hitting on some key things in the market that we get a lot of questions around and so Market strategies I know Leo that we the three of us had a really healthy debate um around aligning your paperwork with what was going on depending on uh the market you serve and and kicking it off right away with new construction um Kendall I know you see it a lot in your Market Leo you've been asked the question a whole lot what does that look like um where we sit today and and what we think is going to happen yeah so depending on your Market new construction could be a massive amount of the inventory available to you or it could be a limited amount and and again just very specifically what the rules say you can go down but you cannot go up so what that translates to you is once you start showing new construction or potentially showing new construction what would probably behoove you is to just be aware of the compensation that's available explain that to your buyer and have an agreement that's representative of it um because you cannot go up so if you agree to a certain fee and the Builder is offering more than that you would not be eligible to collect that so you know again in practice once a buyer chooses new inventory they normally don't go back and forth between resale and new construction so it'll and again anyone who says they have it figured out is stuff up because none of us have been through this new normal and this is one of this is a perfect example of we believe that will emerge best practices but all we can do is work with the information we have today so the information is you as an educated agent should know the inventory available in your market and educating your consumer and that also translates to because a lot of the times the new construction bonuses are specific to your uh relationship with the builder meaning did you sell one two three four transactions in a said period of 12 months and so the the the bonuses are typically because of your performance and again it's all about education and transparency that you can actually educate the consumer again depending on the market and the relationship that might not be eligible to them if they were walking in the door and represented so what what I think is going to come out of this whole process is transparency transparency transparency the more completely upfront you are with your consumers and explain how you earn a fee for the services rendered the less murkiness the less confusion that will come from this process yeah and just to add to that and piggyback with Leo's saying you know agents it goes back to being proactive in your process if you know that a customer through your consultation or your marketing um or your your your meeting strategy call or um that you've had with them that they are interested in new construction do your homework ahead of time and let me tell you why in fact just recently uh an agent on on one on my team just went under contract on new construction and it offered a flat fee a very low flat fee I'll just say that much and so going knowing ahead of time what Builders are offering is super important to you having those very relevant conversations with the buyer right and so that way you know up front what it looks like again if they're offering bonuses um above and beyond what your agreement um typically would say you need you should do that homework before you have those conversations with your client know your Market know your inventory that is part of our our job that's part of our business so this doesn't change it's just a matter of being more proactive and intentional about knowing that information a how of time so you can have those very relevant conversations with your client absolutely and and the same goes when you start to strategically think about Resort or second home markets and a lot of our second home markets folks come in and they're there for for for a vacation they're there for the weekend and their mindset is different and so you're playing the long game um on average it takes about five years for somebody to make a commitment on a second home because it's such a luxury thing to have and so what I want you to consider is maybe you do a weekend or a week buyer broker but your your followup is so incredibly strategic right you've they wouldn't think of going anywhere else because of the value you can continue to provide in your followup in your messaging and how you contact and reach out and then when they say hey I'm I'm coming up this weekend you send them a buyer broker for the weekend you send them a buyer broker for the week that way you're constantly in in action with them and you're having those conversations openly but they they get used to you you get used to them becomes really important we talked a lot about uh first-time home buyer NBA and I can't stress it enough Kendall like with it comes to first-time home buyer set them for Success walk them through the process they don't know what they don't know and so I love we've got so many of our great agents that do videos online explaining the process and those are great things to drip on people to get them started don't you think absolutely absolutely anytime we can communicate with our client we are building trust and Rapport right so you know so much of communication is and what they see you know is in our actions and and and and the vision of seeing and meeting us so definitely do those videos do those pieces of content allow that customer to experience working with you before they ever work with you as one of the things my coach has always taught me and it has been uh so important for allowing people to know like and trust me sometimes even before they actually ever meet me because I give them uh quality content ahead of the time so definitely such a good piece of advice love it now let's let's ship to investors Leo you worked a lot with investors Kendall I know you have too so there's some some nuances here uh to just explore uh strategy wise yeah again investors have become over the last couple years a bigger piece of the market right so you know knowing your inventory of new construction versus if you were to Resort home or resale understanding if they're active investors in your in your Market whether it's Buy and Hold or by fix and sell um these institutional minded folks have already baked in their expenses right so if you are now having these active conversations with investors in your Market it would be really good to understand the variability right very large institutional customers who could potentially give you one two three 10 20 transactions per year may have an amount that's already in their budget for this and and again with those investors if you can Surface and identify off-market opportunities leading into ex exp exclusives where again one of the best use cases I've seen for exp exclusives is listing a rental property that could have 6 8 12 months left on the lease and because of that and not being able to show it with moment's notice it actually would violate the MLS rules to stick it in the MLS you can mark it in exp exclusives and then find another investor in that town to potentially acquire it and when you're actually surfacing properties that are not on the MLS that becomes a higher value activity for an investor who's looking for an edge in expanding their portfolio so again this new change gives you the the ammunition to have different conversations you may not have had in the past because these rules are you know required in order to practice in the markets that we're going to practice and so it it you know again 10% of life is what happens and 90% is our reaction to it I'm I'm with most of you on the call that you know we we do we completely agree we were taking care of folks and not doing anything wrong but these are the new rules that we're you know left to deal with and so make sure that you're building the systems you're building the talk tracks you're educating yourself and the buyers and sellers in your market for the opportunities that could be available to them for sure so let's set you all for Success what can you expect from your company right now we've got coming soon several forms uh Leo referenced the exclusive buyer broker our 2.0 version we're really focused on making it consumer Centric and easy to sign um we're under the firm belief that if it's conf confusing to you or the consumer nobody should sign it and that actually is a script we want you to use if you're looking at some of the forms that are out there if it's confusing you shouldn't use it you shouldn't sign it and we really want to be able to help you through that we're also uh working on the direct pay seller directly to a buyer broker that way we can work for our V uh veteran buyers and take care of them while we wait for the modernization of the VA loans we are also working on the EXP listing agreement we're going to be taking that state by state because it's a it's a pretty big lift um but we're we're passionate about it because we've seen some of the preview of the listing agreements that that state associations are rolling out and quite frankly they don't meet our standard this is a Brave New World and we made the the decision strategically as a company that we wanted to make sure that we were taking care of you our agent and our and our client and so um we are going to be rolling out listing agreements through the summer to better take care of our clients directly and then of course as we get closer to the implementation rules and the uh uh offer of compensation in a buyer broker coming out of the MLS most of your listing agreements have that now and so we will have to do a modification and so we'll have that for you it'll be super easy we will be training on all of these things like I say through the summer we absolutely have your back but marketing wise I'm really excited because the um the marketing team has been very passionate working with broker jobs um on a buyer presentation which is now live in the marketing uh Center for you all so if you didn't have a buyer presentation now you do and we want to invite you to customize that to your need we want you to play with it give it give us feedback so we can improve it for everyone um also updates on exp.com we''ve been writing video um shooting videos with many of your peers uh throughout the US to actually feature walking through what it takes to buy a home see we want to be able to speak to com um consumers as well and invite them to hire an exp agent that is live on our exp uh realty.com website and we're going to continue to add to that we want to be a resource to our consumers we want to be a resource to all of you so if if you don't have the time to build those videos great we've got your back and then finally listing presentations we continue to to improve those um please customize these things to yourself uh and use them in your business if you see something or you would like something more please reach out let Kendall know let me know Leo we are happy to go to marketing and and help improve that for you as we go forward but we're we're just coming to the end of our time we really wanted to leave you with some best practice tips and Leo you you hit this earlier but this it's such solid gold will you will you break it down for us very simple treat your buyers like you treat your sellers which translates to having a buyer presentation as good as your listing presentation know your stats go research them go find out and again this this is where masterminding with your peers whether they're within our company without outside our company we will come up with the buzzwords like we have for listings and you have to know them cold don't be afraid of agreements knowing your contracts makes you have more powerful Tools in your tool bit again I'm I'm reading as many of the comments as I can some folks said I'm never going to use that that's perfectly okay you can actually choose to operate your business as long as it's legal ethical within the rules however you see fit we're trying to empower you with as many tools and again some of your States will probably have different represent uh specific guidelines give that feedback to us as quickly as possible so we can you know make your specific agreements compliant with your states which just just so you all know there we we've gotten feedback that there is legislation so actual law progressing in many states as we speak that will probably supersede some of the rules in the N settlement agreement that we will have to localize for your state um and again when I was an agent I would actually explain that 90% of the value I offered was after we identified the property right it's it's down to scripts like especially with first-time home buyers because my team would do buyo representation um presentations we would say you know now that you're actively looking for a home understand that everyone you know is going to become a real estate expert and there's a high probability that the home we ultimately write a contract on you will find online on a portal or one of your family or friends will send it to you once we ident ID ify the property that's when my job actually starts is executing that purchase and sale agreement navigating potentially multiple contracts getting you the best possible terms getting you through multiple inspections depending on what type of property and the location navigating the negotiations and getting you to a successful settlement with the terms that are best in your family so you you need to proactively explain where the value you deliver is because if someone thinks all you do is unlock a door this is going to be a much much harder conversation to have going forward yeah Kendall you and I were really passionate as we were putting these best practices together the the don't be afraid of agreements you you feel so strongly about this yeah I I know a lot of you out there are ultimately disc scared right these are big changes they they sound small but they're huge they literally change so much about how we've always done things right and and it has nothing to do with the impact they were intended to have right this isn't about how much we charge this is just the way we've done business it's changing a little bit and I want to tell you guys that don't be afraid get knowledgeable get educated right the education and honestly too when we think about what causes fear it's just a lot of times a lack of experience and this is the beautiful thing is it's new for all of us this new um world is is new for all of us so there's no Brokers that has an um uh Advantage except for us because we're out there talking about it um and we're out there doing something about it but you know there really is you know an opportunity here for everyone to really have a huge impact on how we help our customers right and that's what it's about at the end of the day it's the consumer it's the customer right and as we do our job exceptionally well we will prevail right we will thrive in this environment so get comfortable with your agreement learn them understand them leverage them use them to get the job done right they can work for you and the benefit of the customer and honestly go to the state broker trainings we have some fabulous State brokers in our company I mean truly they care and they work so hard I've sat in so many meetings already in these last couple of weeks with them and they are doing everything that they can to be as prepared as possible ahead of the game and ahead of the changes so that we can support you and help you through and help you navigate all of these changes so um don't Embrace fear Embrace courage and embrace the change and let's move forward together we're so grateful that you guys would take time out of your day to be with us and and and truly we are in a professionals Market as we go forward together we are committed to helping you thrive we're uh committed to helping you communicate better and uh we are also incredibly committed to receptive and of your feedback so if you see something please reach out to your broker please reach out to any of us we want to take care of you as we go forward into this this new next and of course as we learn more we are going to be front and center to be sharing with you because we're not afraid to talk to you directly about what we see where it's going and and that we're going to learn everything together so um thank you all for your time today I just so incredibly honored to spend any time with you thank you guys thank yes

Channel: eXp Realty

Views: 1,210

Keywords: Real Estate

Id: -LVs89YzUBk

Length: 65min 31sec (3931 seconds)

Published: Wed May 29 2024