TRH Consulting
Generating new sources of business and revenue.
0

Blog

The Bridge

BLOG

The Bridge

Do you want to amp up your company generated business game? The Bridge is where the real estate, relocation and mobility industry can discover how taking a new path doesn’t have to be scary. Teresa R. Howe is an expert in her field with years of successful program and services development and management. She has a passion for helping companies be the best they can be. Do you want more revenue, more customers and better experience management? Get tips on how to compete more effectively in a world of constant change and disruption. You might also come across some random thoughts that just pop into her head.

Recap of US Buyer Broker Compensation Session at WERC GWS 2024

I was lucky enough to moderate a panel at WERC GWS 2024 on U.S. Buyer Broker Compensation: Adapting Policies & Program Practices to Reflect Changing Real Estate Requirements with panelists Susan Benevides, Plus Relocation; Bill Mulholland, ARC Relocation; Kate Reisinger, Leading Real Estate Companies of the World; Blythe Sparacino, Ingredion. In case you missed it, we broke down the various elements of the NAR Settlement and had some great perspectives from the panelists. I encourage you to listen to the session recording for the full experience.

1. Sitzer-Burnett Lawsuit Ramifications:

  • The deadline for all changes from the NAR Settlement was August 17, 2024.

  • Multiple Listing Service (MLS) can no longer display commission amounts.

  • Buyers must sign a Buyer’s Agency Agreement before looking at a home with an agent.

  • Buyers must be prepared to pay their own agent (unbundling). The Agreement must include a compensation amount that is “objectively ascertainable and not open-ended.”

  • The agent may not be paid more than listed in the Buyer’s Agreement…unless the consumer amends it.

2. No Steering: Only showing properties that offer buyer’s agent compensation. The Settlement agreement states, “NAR reaffirms its commitment to requiring that MLS participants must not limit the listings their clients see because of broker compensation.”

3. Buying Transferee has six options if their policy doesn’t cover buyer’s agent compensation:

  • Get an exception to their policy for the buyer’s agent’s compensation (money might be grossed up)

  • Pay all or partial buyer’s agent compensation out of their own pocket

  • Try and find an agent to work for free (hope to negotiate that the seller will pay compensation)

  • Represent themselves without an agent

  • Enter into a dual agency situation with the listing agent on a property they want to buy (the listing agent will act as transaction coordinator only)

  • Refuse the transfer or rent

4. Some possible repercussions without policy adjustments:

  • Employee confusion, frustration, and resentment

  • Out-of-pocket expenses for the transferee

  • Job offer rejections and canceled moves

  • Policy exceptions put budgets out of whack and take more manpower to deal with

  • An elongated home search process

  • Legal liability for the transferees (and the RMC and Corporation) if the transferee is unrepresented in the transaction

  • Internal inequity (discrimination) of some based on who gets exceptions

  • The cost of relocation may increase overall (or it may not)

5. What are the next steps for the Corporation?

  • Bite the bullet and set the policy to cover buyer agent compensation

  • Look for other ways to spread the existing budget around or trim other areas to find the money

  • Give the transferee a budget for agent compensation and let them determine how and when they use it (the money may need to be grossed up)

  • Collaborate with all stakeholders to explore options

  • Ensure your leadership understands all possible repercussions

Some of the panelists thought we might see RMC pricing shift to resemble an a la carte menu or an insurance plan with levels of participation. They also said that corporations not only looked to them for guidance but sometimes wanted them to make decisions for them, and they warned against doing that. The consensus was that doing your homework and making decisions now would allow us to preserve the employee experience and not have to make decisions under pressure.

Go to https://www.talenteverywhere.org/Public-Policy/US-Buyer-Broker-Compensation-Litigation or http://www.nar.realtor/the-facts for more information.

From left: Bill Mulholland, me, Susan Benevides, Blythe Sparacino, Kate Reisinger

Teresa Howe