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Buyer Agent Doomsday

LISTINGS! Buyer Agent Doomsday

September 21, 202318 min read



The recent settlement by RE/MAX on two class-action lawsuits related to buyer agency commissions signal a major shift in the real estate landscape... and a big challenge to buyer's agents.

There are three key factors that have put buyer's agency in jeopardy:

1. Class Action Lawsuits: If these lawsuits succeed (targeting major players like RE/MAX and the National Association of Realtors), it could change the way real estate commissions are paid, making it uncertain how buyer's agents will be compensated.

2. Changing Buyer Needs: Because listings and information are accessible online, buyers no longer rely as much on agents.

3. Preference for Listing Agents: Many buyers believe it's better to deal directly with listing agents, especially in competitive markets, as it can increase their chances of getting their offers accepted and may result in a full commission for the listing agent.

The best move now is to pivot towards becoming a listing agent. But to master the listing game, there are three critical aspects:

1. Seller Lead Generation and Conversion: You want to become proficient in generating and converting seller leads, prospecting, handling objections, and delivering effective listing presentations.

2. Connecting with Sellers, Especially FSBOs and Expired Listings: You want to learn how to effectively connect with sellers, especially For Sale By Owners and Expireds, because these are low-hanging fruit for you to get listings.

3. Pricing and Selling Listings: You want to master pricing properties correctly and effectively marketing them to get the best results for your sellers. You can leverage these and get more business from each successful transaction.

If you want more deep dive training on that, join my Master Path Launch Coaching. Just click on the link here and check it out. Because if you want to win and succeed in the real estate business going forward, you're going to need to get that training and coaching. I've got a special offer for you (that's going away soon). So, don't miss this great opportunity.

Full Transcript

Is it doomsday for buyers agents? Yes, with a brand new settlement coming out from RE/MAX settling with two class action lawsuits on buyer agencies and sellers being required to offer a buyer agent commission. My friend, the game is changing for the real estate industry forever, and buyers agents are an endangered species. And in this video I'm going to talk about what is happening and more importantly, I'm going to talk about what to do about it if you're a real estate agent and how to position yourself so that when buyer agency changes and the changes we're already seeing, which has been going on for a long time, what do you do to position yourself to win in the real estate industry with one of the most dramatic changes that will have happened in the history of America in the real estate industry? Yes, it is that big.

Hey there, it's your coach, Kevin Ray Ward, the founder of Yes Masters Real Estate Success training, helping you get more yeses and more successes in your business and in your life. And it's mind numbing what is actually happening. In case you have not been paying attention, for several years now, there have been some major class action lawsuits against some of the biggest players in the real estate space, against number one, National Association of Realtors. Number two, companies like RE/MAX, Keller Williams, the big brokers that own Coldwell Banker, Century 21. All these brokers have been involved in this class action lawsuit saying that it is illegal or unethical, or inappropriate for the MLS, or for realtors to require that the seller offer a commission to the buyer's agent in order to be on the MLS. And that practice is now in jeopardy.

Now to understand, this has been the way it's been done for generations. First, just to talk about the power of this idea of co-broke, cooperating brokers, where that when a listing goes public, the sellers pay the commissions, they pay the seller agent commission and buyer agent commission. Now, this goes back for decades and decades, back to the advent of the MLS, multiple listing service concept, where some brokers figured out, "Hey, if we cooperate and we take all of our listings and we pool them so that we share them amongst each other, so if all your agents buyers, they can see all of our listings and we'll do the same for you guys and we just co-op on that. And then if your brokerage or an agent from your brokerage brings us a buyer, then we're going to share the commission, we'll work together, and this is going to make everything better."

Now the reality is that was a win. It was a win for the listing agents. It was a win for the buyer's agents and it was a win for sellers, and it was a win for buyers because now buyers were able to know all the inventory and they were able to go to one agent that actually could represent them and they could see all the inventory, all the homes that matched their criteria without having to get on the classified ads, without them make a bunch of phone calls and drive all over the place, try to find a listing broker that didn't represent that. It made everything easier for them. It made it easier for sellers because now they knew their listing was going to be marketed not just to the broker and they're inside their own brokerage.

It was going to be listed and it was going to be exposed to all the buyers in the market with all different brokerages. It was a fabulous advent when we came up with this idea of MLS and the idea of cooperating brokers working together to facilitate transactions and then split the commissions. It was a great deal. This was a win-win, win win. It was a win for everybody, but all good things must come to an end. Now, there's a lot of things that has caused this to happen, mainly is the incompetence of real estate agents. Now, you may or may not like this. You may or may not disagree with this, but the fact of the matter is when sellers felt like they were not told the truth, they were not communicated too clearly and they were not represented well, they get upset about having to pay the commission.

And when buyers feel like their buyer's agents aren't representing them well then they're not really crazy about buyer's agents. They're like, "We don't really care. We don't want to pay buyer's agent commission, so we're going to do whatever we want." Now, there are three things that are happening here. I'm going to lay out the three things in this video that have happened that have put buyer's agency in jeopardy and buyer's agents particularly in jeopardy in terms of you getting paid, and next, and what to do about it. As a real estate agent, what do you do when buyer agency is under assault and is in grave jeopardy of actually the way we have done it for generations of it actually going away?

There are three things that have been happening. Number one is the class action lawsuit that we've already discussed about. If that wins, if the plaintiffs in that case win against the big brokerages and especially against the National Association of Realtors, it will forever change the way real estate commissions are paid because no longer will the seller automatically be required to pay commissions to both the seller and the buyers. Now buyer's agents are going to have to figure out how they're going to get paid. That's going to happen. And there is a high likelihood just in case you're going like, "Yeah, but that won't happen and they're not going to win." There is a reason that RE/MAX and anywhere some of the biggest players in the industry have already settled and agreed, "We're going to make changes," because they know they're going to lose. The law firms representing the plaintiffs in these class action lawsuits are known to win. These are law firms that they take on cases they believe they can win and they know how to win. They have the track record to prove it.

This is a real threat. And if that happens and the plaintiffs win and buyer brokerage is no longer paid for by the sellers automatically in the MLS, buyer's agents are now going to be forced to have to figure out and fend for themselves, "How do I get paid? They're going to have to go directly to the buyers, many cases and say, "You're going to have to pay me." Now, why is that a problem? Well, buyers are not sitting around today flush with cash. They're not walking into a deal and saying, "Oh yeah, it's easy. I can afford a home. I can afford the down payment. I can afford all the closing costs. What's another 2 or 3% on top of the sales price to pay your commission?"

Now, my friends, housing affordability is about as bad as it has ever been. Interest rates have doubled over the last year, year and a half. Buyer affordability has already been pressed way down where buyers cannot afford to buy the house they want. They're already having to go to lower price ranges, and because of the lack of inventory, home prices have continued to go up, which has made buying even worse. And now you want to add 2 or 3% on top of that, that I as a buyer, am I going to have to shell out and pay to you, my buyer's agent? That's a problem for me. Not only is it a problem because that could be going the way of extinction with this class action lawsuit, but number two is because buyers don't need you anymore the way they used to need you. Buyers don't need buyer's agents the way they did in decades past, before the advent of the internet, and particularly before the National Association of Realtors brilliantly handed over all the listings and access to Zillow where that now every buyer can find out about every house on the market, and they don't need a realtor to do it.

They just go online, get on a mobile app. They can just go and they can find all the houses out there. They can go look at them themselves. They can go see them. They can Google all kinds of information of how to buy a house, how to make offers, and they don't really trust you that much anymore. When they do studies and be like, "How trusted are different professionals in different service industries, real estate agents rank right down there around used car salesman." They don't trust you. They don't really think you represent them. Before when somebody else, the sellers are paying the commission? Okay. I don't have skin in the game. It's not going to hurt me. I'll use an agent because the seller's going to pay for them, and if I like them, great, if I don't like them, and if they don't really represent me, not that big of a deal, I'll take care of it myself.

And you see more and more of this happening where there is less trust that the public, i.e., buyers, have four agents. And I don't really think you represent me. I think you just want a commission check so you're out showing me houses, and that's fine if you want to show me houses, but if I'm going to have to pay you to show me houses, I don't really need you. And now you may be a highly skilled trained agent who knows how to represent a buyer and takes that very seriously and you know how to negotiate, get your buyer's offers accepted and how to negotiate and get them the best terms and price. But the public perception is most real estate agents don't know how to do that so why would I pay you, especially if I have to pay you out of my own pocket.

Well, we can roll it into the mortgage. Oh, that's going to be exciting. I'm going to add an extra 3%. I'm buying an $800,000 property, so I'm going to add $24,000 to my mortgage and I'm going to pay interest on that $24,000 for the next 30 years. I don't think so. I want you to understand that the perception of buyers is, "I don't really need you that much, and I certainly don't want to pay you a lot." What's going to end up happening very likely is that the commissions to buyer's agents going to be more flat fee. Okay. Now, I want to just throw this in there. This does not mean that sellers cannot pay buyer agent commissions. They still will be able to. They're just not going to be required to. And there's going to be a lot of sellers out there going like, "I'm not paying a buyer's agent commission. A buyer's agent represents the buyer, not me. Why should I pay them?" There's going to be that piece coming.

And then there is the third reason that buyer agency is in danger. And that is many, many buyers believe, and in a lot of cases it's true. In many cases it's true. It is to their advantage to go directly to the listing agent. Why would I go to the buyer's agent? Buyer's agents, all they're going to do is show me the houses and they're going to write the contract, but I can take care of it myself. I don't really need them. And I know this, we have low inventory, which means I'm dealing with multiple offers and a lot of pressure, and I'm competing with other offers.

And if I go directly to the listing agent, that listing agent knows that they're going to double in the deal. They're going to get all the commission, so my chances of getting my offer to win go up if I'm working directly with the listing agent. And this has been happening. This is not new. This is that these last two pieces, they're not new. They've been happening for years. This has just been happening. And in a seller's market, low inventory, a lot of multiple offer situations, the buyers know if I go directly to the listing agent, it's to my benefit. Last time I made an offer on a property, I went directly to the listing agent. Why? Because of this very thing. I'm like, "I can represent myself and I think I can do a better job working directly with the listing agent. I know they're not representing me. I don't need them to represent me. I just need them to tell me the truth, and I need them to facilitate the transaction and I'll be okay. And I know they're going to be pushing harder to get my deal accepted in a multiple offer situation because they get both sides of the commission if that happens."

Because of all of that, my friend, if you are working with buyers, if over 50% of your business is buyers, your business and your future success is in jeopardy, and the time to get ready for this change and prepare for this and to turn your business around is today. How do you turn your business around? Well, here's how you do it. Stay with me on this because at the end I'm going to tell you about something very important that you need to know about if you want to master this game. Here is the deal. You got to learn how to get listings. If you are going to survive, and certainly if you're going to thrive in the real estate industry going forward, you must master the game of winning sellers and getting listings.

There are three things that you got to master. Number one is you have to master seller lead generation and lead conversion. You've got to master how to prospect. You've got to master how to handle objections, how to get listing appointments and go do a great listing presentation and get listings. You have to master how to do that. For decades, it's been easier to get a buyer to work with you than a seller because a buyer doesn't feel any skin in the game. They're like, "Oh, yeah, if you want to show me houses, no problem. If I don't like you, I'll ditch you." Even if you got them to sign a buyer broker agreement, they still don't feel that same commitment that a seller feels when they hire you.

It's easier to get buyers to want to agree to work with you than it is to get sellers. But when you get a seller to agree to work with you, my friend, if you know how to get a listing and you get a price right and you know how to sell it, you just got paid. And you're not going to get jolted like you will with a lot of buyers. Plus, sellers, when you know what you're doing takes way less time than working with buyers. If you look at your top producers, your real top producers, the ones that do 50 plus deals a year, whether they do it as an individual agent or they do it as a team, the rainmakers are the ones who get listings. This is where the time control is. This is where the control of your business and income is. This is where the big money is.

This has always been the case, but now it's even more critical because of what is happening as a threat to buyers agents in general. The number one thing you must do is you must master how to do seller lead generation and do a great listing presentation. Number two, you have to master how to connect and win with sellers, particularly with for sale bay owners and expired's. Because these are not going to change. There's still going to be for sale banners. They're still going to be expired's. They're still going to be canceled listings in any market, and every market. And that is like the low hanging fruit. If you want to generate business quickly and get listings, for sale bay owners and expired's are the best way. You must master how to connect with them, how to get them to set an appointment with you, how to handle their objections, and how to go in and win them to get them to hire you.

And then the third thing that you must master is how to sell it. You must master how to get the listing price right, and then how to sell it and get the best results for your sellers. Because when you learn this game of this listing game and selling game of listing and selling properties and getting great results for sellers, those sellers are going to become testimonials and case studies for you to help you get more sellers. And as you develop that skill and you develop that reputation, you develop the market track record and the market share, your ability to corner the market and dominate in the listing game goes through the roof, but you've got to learn it.

If you know this is happening, number one, you have to make a decision to do that. Number two, you got to get trained. I've got a special offer. I'm going to invite you to click on the link on this video, and I have a special offer, probably the most incredible deal I've ever done for coaching. If you want to master listings, master working with sellers, this is how I built my business. I built my business. Over 80% of my transactions as a real estate agent was getting listings and getting them sold. For sale bay owners and expired's, this is where the game is going to be won. Now, there's way more in that, and I want to invite you to join me in my Master Path Launch Coaching. All you got to do is click on the link here and check it out. If you want to win and succeed in the real estate business going forward, you're going to need to get that training and coaching. I've got a special offer for you. Just click on the link and join me in Master Path Launch Coaching. Again, great opportunity.

Now, the most important thing right now is for you to decide and to commit. I've got to master the listing game. Whether you're going to work with me or somebody else, you've got to work with somebody that can train you and help you master and win in this game of real estate. Your future survival and success absolutely depends on it.

Now, if you disagree with this, I would like to hear your comments. I just want to hear what your perspectives are. What are you seeing? What are you hearing? As RE/MAX has settled for $55 million to the class action lawsuits? As all of this continues to come down, what are you seeing? What are your brokers telling you? What are you hearing? Let me know your comments. Let me know your questions. Let me know how I can help you. Give it a thumbs up if this video has been helpful for you, and I'll see you on the next video. The most important thing is play to win. Learn what to do so that you can always expect "yes."

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