AtInman Connect Las Vegas, July 30-Aug. 1, 2024, the noise and misinformation will be banished, all your big questions will be answered, and new business opportunities will be revealed.Join us.
The National Association of Realtors’ proposed settlement in its commission cases, which has been preliminarily approved by the court, has left agents and brokers struggling with exactly how they will answer their clients’ questions going forward.
On Tuesday, Judge Stephen R. Bough, who presided over Sitzer | Burnett, granted preliminary approval to NAR’s proposed settlement, making it more likely that the rule changes surrounding compensation in the multiple listing service (MLS) that NAR agreed to will come to pass. The judge set a hearing for final approval in November.
According to the trade organization’s website, “NAR has agreed to enact a new rule that would require MLS participants working with buyers to enter into written agreements with their buyers. NAR continues, as it has done for years, to encourage its members to use buyer brokerage agreements that help consumers understand exactly what services and value will be provided, and for how much. These changes will go into effect in mid-July 2024.”
Rather than getting bogged down in long, confusing explanations, Jeff Lobb, CEO and president of Sparktank Media and Coach 52, recommends keeping it simple, asking plenty of questions to determine if you and the lead are a good fit, and creating a strong value proposition that illustrates the value you bring to the buyer side of the transaction.
Lobb has been working on crafting the conversations that both listing and buyer agents can use to address their buyers’ and sellers’ questions in today’s highly confusing environment. Watch the full interview, or read on for examples, scripts and objection-handling tips that you can use now to help you navigate difficult discussions with your clients.
Avoid long explanations: Keep it simple
The biggest source of confusion currently is about our fees and how they have been paid in the past. Before you go into a full-blown discussion about your commission, Lobb urged agents to ask more questions to uncover what their clients’ real motivations are.
“You have to educate them about how we work and how the industry works,” Lobb said. “If they bring up anything about your fee, tell them that you will be happy to talk about fees later, but let’s see if we will be able to work together first.”
Lobb recommends that when you are on alisting appointment, it’s important to explain that commissions have always been negotiable and to describe how we earn our fees. Keep it simple, and avoid getting in the weeds with long explanations.
Lobb said a frequent mistake most agents make is how they present their value proposition.
“A lot of people think their value proposition is a bunch of things that they tell the seller they will do,” Lobb said. “It’s not what you do, but why you do it. As Simon Sinek says, start with ‘Why.’”
This process involves asking lots of questions, such as what they’re looking for or what is motivating them to move. Lobb also urged listing agents to be more consultative and to educate clients about how agents work as well as how the industry works at large.
When clients want to talk about commission fees up front, Lobb recommends that you say the following:
Agent:
I’m happy to talk about fees. But first let’s see if we’re a match, whether I can help you accomplish what you want to accomplish, and that we’re confident about getting your home sold. At that point, I’m happy to talk about my fee structure and how it works.
Listing agents: How to handle incoming phone leads who ‘just want to see the home’
Starting in July, when NAR puts the new rules into effect, most buyers will be required to sign a broker representation agreement before you can show them a home. Lobb described what many callers are likely to say when they call on your listing:
Inbound buyer lead:
Hey, I’m interested in your listing. I was told I had to sign a buyer agency agreement by somebody I called from Zillow or Realtor.com. I didn’t want to do that. I want to deal directly with you.
If they’re calling you, they’re probably willing to have aconversation with you. Lobb recommends that you do a 5- to 10-minute consultation on the phone.
“I’d be asking questions on the phone. ‘Tell me about the house you’re looking for,’ or ‘Would you mind taking a few minutes to really let me know what you want, so I can find the right house for you based upon what you’re looking for,’” Lobb said. “You always must make it about them and the value to them.”
At that point, ask to schedule a Zoom meeting to get a better idea of what they want and to discuss the changes ahead.
Lobb suggested a second approach that you can also use to get a face-to-face consultation, whether in person or on Zoom.
After asking them some quick questions about what they’re looking for, key features they want, price range and location, Lobb said to follow up with this question to set yourself up for getting a face-to-face meeting: “Have you heard about the recent changes in the real estate industry?”
Lobb explained that they’re likely to say that they have heard some stuff or that they really don’t understand it. You can then reply by saying:
Great! I would love to spend five or 10 minutes with you. It’s really important. Do you have time to jump on a Zoom call later tonight, maybe with your significant other? I’m still happy to show you the home, but you need to understand how this works before we go out and see properties.
Lobb warned that you can’t just hit them with the changes.
“It’s extremely important that you ask them about what they have heard,” Lobb said. “We have to help them understand it. We can’t just tell them.”
Caveat: If the buyer contacts you directly as the listing agent, you’re now in a dual-agency situation since you have a signed listing and agency agreement with the seller. Consequently, you must disclose that you are the exclusive agent of the seller.
My recommendation is to check with your broker, attorney and/or state association legal hotline about any changes you may need to make regarding how you should handle this situation in light of the new NAR rules that go into effect in July 2024.
How to handle buyer pushback on paying the commission
When the buyer says “No way” to signing a buyer representation agreement or asks, “Help me understand why I have to pay a fee,” Lobb’s recommendation was to give a brief explanation that commissions have always been negotiable. This hasn’t changed.
Second, since most buyers don’t understand how buyer agents were compensated in the past, you must address that issue.
My recommendation is to tread carefully here because you can never say, “The buyer’s broker commission was free to the buyer.” That has been a huge part of the litigation and must be avoided at all costs.
What you can say is that the lawsuits now require buyers to negotiate the buyer’s commission independently of the listing agent. Here’s how Lobb addresses this situation:
When you hire me as your buyer’s agent, not only is my role to show you the home, but to negotiate any and all fees, whether it comes from the seller’s side, or from the proceeds of the sale, or your funds. You’re hiring me to negotiate these fees from all the other parties.
“It softens the blow of what fee or percentage I’m putting into that agreement,” Lobb said. “My job is to negotiate that.”
Other types of value you bring to the buyer
My advice is to check the current listings on bothRealtor.com andZillow that meet the buyer’s search criteria. If down payment assistance is available on a specific property, both portals now show a list of all the down payment assistance programs available. You can then show the buyers what’s available on one or two of the homes you might show them.
Editor’s Note: Agents should use caution recommending mortgage programs if they are not a licensed mortgage professional. Find a trusted local mortgage partner to help you help your clients. Remember to be the source of the source.
Given that the average amount of down payment assistance in 2023 was $17,000, according to DownPaymentResource.com, sharing that data provides buyers with a pathway to pay you and have money left over to put toward their down payment or other costs.
Another approach would be to share the “Home Ready” programs that allow buyers to purchase with 1 percent down plus an additional 2 percent grant of the loan amount from the lender (provided they meet credit score andincome requirements).
Currently, a number of lenders are working on various ways to roll some or all of the commission into the purchase price. Given how important this situation is, look for more innovative solutions soon.
Sadly, most agents are woefully unprepared to have the conversations required to persuade the buyer to sign a buyer representation agreement. Agents who master thesedialogues, however, will have a huge competitive advantage over almost all other agents.
Create your transaction closing checklist
After you have shared the information above, it’s important to support your contention that you are there to negotiate on their behalf. If you and/or your brokerage have not put together a list of all the steps required to close a transaction, make it a top priority to complete that checklist immediately.
Once you have put that checklist together, Lobb urges agents to “share it with the buyers so they understand what else you do to negotiate on their behalf. Because agents have seldom discussed all these steps in the past, most buyers will be surprised by how much is necessary to close the transaction.”
From my perspective, I would probably point out several of the key items on that list where I, as their buyer’s agent, would be negotiating on their behalf.
Lobb’s final piece of advice
In today’s market, you have to be good at going out and gettinglisting appointments. Unless you get an appointment, this information makes no difference. This means getting back to the core basics of being accountable, constantly learning and having the right people teach you how to do the business.
“It’s what we do for a living,” Lobb said. “It’s never going to go away. This is something that always evolves and changes, with or without you.”
Bernice Ross, president and CEO of BrokerageUP and RealEstateCoach.com, and the founder of RealEstateWealthForWomen.com is a national speaker, author and trainer with over 1,500 published articles.
At Inman Connect Las Vegas, July 30-Aug. 1, 2024, the noise and misinformation will be banished, all your big questions will be answered, and new business opportunities will be revealed. Join us.
As the real estate industry reels from the chaos created by the commission lawsuits and the new Federal Communications Commission(FCC) rules upending the cold calling and paid lead models for lead generation, and with escalating world conflicts and inflation soaring even higher, agents may be feeling discouraged with the economy.
Instead of the long-awaited reduction in interest rates, higher interest rates and even a potential recession are once again on the horizon. Surprisingly, the best possible time in 2024 for sellers and buyers to make their move is probably right now.
Atlanta Fed president Raphael Bostic was already warning that if inflation remains high, there may be zero interest rate cuts in 2024. JP Morgan Chase’s chief executive Jamie Dimon predicted that we may see 8 percent interest rates before the end of the year. Otherswarn the Fed may soon tip us into a recession to control inflation.
Despite the ongoing bad news, appropriate strategies and tactics will help agents cultivate deals while others fall further behind. Here are seven strategies to help turn the sour news cycle into a golden window of opportunity.
Strategy 1:Prepare an ‘equity checkup’ or ‘annual report’
Preparation is the key to your success during this golden window of opportunity.
Here’s how to prepare using the Realtors Property Resource (RPR) app:
Create a mobile comparative market analysis (CMA) for sellers, do buyer tours and provide sharable market trends.
Use your location to easily search and analyze on-and-off market properties, provide mapping and valuations, locate tax and mortgage info, as well as distressed data, flood zones, demographics, schools and neighborhoods.
Most importantly, create beautiful property reports in just seconds to share with your lead from the convenience of your mobile device.
Combine your personal CMA with an RPR report to create an ‘equity checkup’
Compile your CMA and the RPR report into a PDF document that you can send from your mobile device on the spot. When the prospect is a seller, use an “equity checkup” to obtain their contact information. (You can use the same approach with buyers, except call it an “Annual Report” that provides them with general data about the area where they will be looking.)
To convert potential sellers, ask them if they would like an equity checkup to determine how much their property is currently worth. If you’re already face-to-face, bring up the report, ask for their mobile number or email so you can send it to them on the spot — instant lead conversion.
If they’re a phone or internet lead, offer to drop it off in person. You can also use this data to set a face-to-face appointment to view the interior of the property and then provide potential sellers with the most accurate comparative market analysis (CMA) possible.
Strategy 2: Get back in touch via text, email or phone call
If you’re like many agents, you probably have a lot of past clients you haven’t communicated with recently.
Remember that your focus during this current window of opportunity is to schedule a face-to-face appointment. Here’s what to say:
Hi Sally — Way too long since we’ve talked. I would love to buy you a cup of coffee (tea, drink, meal — whatever is appropriate) and get caught up. How’s Wednesday or Thursday after you get off work?
When you meet with them, be sure to print up an Equity Checkup for their property and give it to them when you meet. You can then ask:
If you know of anyone thinking about buying or selling, now is an excellent time for them to transact since the interest rates are likely to go up due to increased inflation from higher oil prices.
Or:
If you know of someone who would like to receive an equity checkup, I’d be happy to prepare one for them as well.
When you reach out to that person, do your best to schedule a face-to-face appointment.
Strategy 3: Apply the 80-20 rule
Focus 80 percent of your lead gen efforts on your sphere of influence and past clients. According to the NAR Home Buyers and Sellers Generational Report, 56 percent of all buyers found their agent from a referral from a neighbor or relative (38 percent), had used the agent previously to buy or sell as home (12 percent), or were referred by another real estate agent or broker (6 percent).
Currently, Likely.AI is offering agents a complimentary Database Refresh Report that allows them to identify the contacts in their database who are most likely to transact in the next 90-180 days.
The Database Refresh Report provides:
The percentage of contacts in your database who have valid contact information
The percentage of your contacts who either listed or sold their property during the past 9 months
The percentage predicted to transact during the next 90-180 days along with who those contacts actually are
The U.S. Census estimates that Americans move on average 11.7 times in their lifetime. If you have 2,500 valid contacts in your database, that means about 250 will move in the next year. Likely.AI identifies who that 10 percent is most likely to be. If their prediction is correct, and hypothetically, 30 percent of your 250 contacts convert, that’s 75 potential listings waiting for you in your current contact database.
This is the quickest and least expensive way to quickly target who your high-probability leads are and where your prospecting time is best spent right now.
Strategy 4: Be hyper-focused on face-to-face lead generation and lead follow-up
You have a narrow window — between now and July, when the new MLS rules go into effect and late December 2024, when the new FCC rules go into effect — to put as many properties under contract as possible. This means spending every spare moment you have doing lead generation.
According to the 2023 NAR Profile of Home Buyers and Sellers, 80 percent of sellers only interview one agent in person whom they subsequently hire. Consequently, always ask for a face-to-face meeting whenever possible. You want to be the first agent they meet with in person when they’re ready to sell.
Second, 58 percent of buyers are living in a property they own and may need to sell. In other words, for every five buyer leads you don’t respond to, you may have missed up to three opportunities to take a listing with a homeowner who is ready to transact.
Third, focus on face-to-face prospecting. Twilight open houses are an excellent way to catch people when they’re out before or after dinner. In terms of which houses to hold open, you can certainly hold your own listings open. However, if there’s a new listing or one that gets a lot of traffic that hasn’t been held open very often, ask the other agent if their sellers would be OK with you doing a twilight open house.
Be sure you have your equity checkup for the subject property with you and have the NARRPR app loaded on your mobile device to share the information about the home you’re holding open. Also, there’s an outstanding app called Spac.io that is, in my opinion, is the best open house lead conversion system on the market.
When you receive an incoming lead by phone or text, immediately respond the same way they contact you, by phone or by text. You can no longer afford to ignore these leads or wait to contact them. If you don’t get there first, your chances of converting that lead later are minimal.
Strategy 5: Show your value to potential buyers
This campaign can also be used in print and digitally on social media. Visit the Fannie Mae Home Ready Mortgage (it has a $2,500 credit) to learn the details about that program.
A number of lenders offer different versions of Fannie Mae’s HomeReady low down payment mortgage program that allows buyers to put 1 percent down and then provides 2 percent of the loan amount as a grant.
Rocket’s One+ Mortgage program is different in that they also pay the buyer’s private mortgage insurance (PMI), which can be over $200 per month.
I suggest teaming up with a local, experienced lender to work on RESPA-compliant mortgage advertising. Many disclosures are required when pitching mortgages to consumers, so team up with an expert to help you find programs to advertise to your database.
Often, lenders have compliance-approved consumer advertising materials you can share on your social media feeds to help buyers understand there are programs out there to help them.
Hot tip: To quickly locate what down payment assistance programs are available on current active listings on Zillow, scroll all the way down to the bottom of the listing, directly below the monthly payment calculator, and click on the tab below that for “down payment assistance.” That will give you all the different down payment assistance programs for that property.
Strategy 6: Talk about the NAR settlement with your clients
Like it or not, you’re going to be asked about commission litigation and what it means for buyers and sellers. Rather than trying to explain this, give them sections 19 and 20 from the NAR fact sheet about the settlement (which are listed below.)
Here’s the script to use:
Agent: Because I’m not an attorney, I’m not qualified to comment on the ongoing litigation or any settlements. The National Association of Realtors, however, has provided Realtors with this information to help our buyers and sellers better understand exactly what is happening with respect to commissions and how they would be handled if the court approves the NAR settlement.
After the new rule goes into effect, listing brokers and sellers could continue to offer compensation for buyer broker services, but such offers could not be communicated via the MLS.
MLS participants acting for buyers would be required to enter into written agreements with their buyers before touring a home. These agreements can help consumers understand exactly what services and value will be provided, and for how much.
[…] using the MLS to communicate offers of compensation would no longer be an option.
Offers of compensation could continue to be an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals.
The types of compensation available for buyer brokers would continue to take multiple forms, depending on broker-consumer negotiations, including but not limited to:
Fixed-fee commission paid directly by consumers
Concessions from the seller
Portion of the listing broker’s compensation
Compensation would continue to be negotiable and should always be negotiated between agents and the consumers they serve.
You can emphasize this last statement by saying:
“Commissions have always been negotiable, and they will continue to be so.”
Although this approach may not be ideal, it’s the best way to stay out of trouble, especially if your brokerage, association or MLS has not released any guidelines about how to handle the commission conversation. Again, it’s business as usual for most agents until your MLS or broker advises you otherwise or until the NAR settlement is approved by the court.
Strategy 7: Eliminate the contingent sale issue
Homeowners often worry that if they sell their homes, they will be unable to find a replacement property. Those who need financing are also concerned that they will be unable to compete with all-cash buyers when there are multiple offers.
You can now eliminate the contingent sale issue with home swap and home trade-in programs from the companies listed below.
These companies either purchase the replacement home for the seller and then sell it to them once they sell their current home, or they provide them with the financing they need to become an all-cash buyer without first selling their existing home.
Don’t wait — The time to take action is now
We are currently in a very short window of opportunity that is unlike any other in the history of real estate. Now is the time to put in those extra hours prospecting and following up on every lead you receive to schedule a face-to-face appointment before the real estate environment becomes even more difficult than it already is.
Bernice Ross, president and CEO of BrokerageUP and RealEstateCoach.com, is a national speaker, author and trainer with over 1,500 published articles.
Join the movement at Inman Connect Las Vegas, July 30 – Aug. 1! Seize the moment to take charge of the next era in real estate. Through immersive experiences, innovative formats and an unparalleled lineup of speakers, this gathering becomes more than a conference — it becomes a collaborative force shaping the future of our industry. Secure your tickets now!
Feeling discouraged about finding the right assistant for your team? Are you worried about how to pay your current assistant(s) due to NAR’s elimination of buyer agent compensation through the listing agent? Are you afraid about what will happen if the portals and lead generation companies shut down your lead pipeline in July when the new FCC regulations go into effect?
National Administrative Professionals Day, sometimes known as Admin or Secretary’s Day, is coming up the last week in April. If finding, training and paying for an IRL admin seems out of reach for you right now, a generative AI assistant may be your dream solution to meeting these challenges.
Before the advent of AI, the best advice for agents building a team was that their first two hires should be administrative, usually a transaction coordinator and assistant. With all the upheaval from the commission lawsuits, the FCC written consent laws, constricted inventory and high interest rates, finding two capable assistants to help you is more difficult and costly than ever.
Enter the generative AI assistant
The big shift that every agent, team and brokerage should take right now is to start working with generative AI. Forget about all the advice you have seen over the last year. The new generative AI tools will transform the business dramatically over the next 12-18 months.
Best of all, these new tools will be what some experts have called “armchair” AI. You can ask the AI the best way to query it (give it a command), where it will produce the best answers.
Better yet, many of these new tools are being designed to respond to voice commands to be virtually identical to talking to a human assistant. However, it’s way more intelligent, requires little or no training, and completes tasks in seconds.
Big data, machine learning, vs generative AI
To understand the amazing pivot that AI has recently made from what MIT Professor David Edelman calls “Vanilla AI” to “true” generative AI, as ChatGPT calls it, you must first understand the differences between “Big data,” “machine learning,” and “generative AI.”
Here’s how ChatGPT defines these differences between Big data, Machine learning, and Generative AI:
Big data: It’s a vast amount of information that, when analyzed, can reveal trends, like what homebuyers are looking for in a neighborhood or when it’s the best time to sell.”
Machine learning: “This is like teaching a computer to become an expert in identifying what makes a house valuable. You show it many examples of houses, tell it which ones sold for more and why, and over time, it learns to predict the value of a house on its own. It’s a type of AI that gets better with experience.”
Whether it’s Zillow, Realtor.com, or Trulia, they all use machine learning to predict the value of houses. ChatGPT also said Compass is using machine learning to optimize their CRM.
Generative AI: “Imagine an artist who can create a masterpiece from just a few words of description. Generative AI is like that artist but in the digital world. It can generate new content, whether it’s images, text, or even realistic voices, based on your instructions. It’s not just copying; it’s creating something new, like designing a house never built.”
According to Edelman, only a tiny fraction (2 percent to 3 percent) of today’s AI applications use generative AI, including 97 percent to 98 percent of all AI in real estate.
Vanilla AI virtual assistants
When I asked ChatGPT to use Python (its generative AI) to identify the top AI virtual assistants, it came back with the following list:
Gabbi.AI offers real estate agents a comprehensive AI assistant that nurtures leads; responds to clients (chatbot); tracks important conversations; responds to texts, phones and emails; can book showings and manage tasks.
Luke is an AI-powered personal assistant that helps agents manage customer interactions, streamline tasks, arrange meetings and set reminders. It can automate responses, schedule tours, collect prospect data and research market trends. There currently is a waitlist to join Luke.
This AI is aimed at the investor market and can provide lists of off-market properties, research contact information, do custom mailing, provide MLS and county comparable sales. It also aids agents in organizing and optimizing their prospecting and follow-up tasks.
These tools, like ChapGPT 3.5, are limited in what they have been trained to do. They can do an amazing number of things, but they’re not true generative AI. For a list of 11 Vanilla AI tools, visitXARA.
What kind of tool does this look like for my team?
I recently interviewed Michael Martin, the founder of Sidekick, a new generative AI Assistant that handles much of what you can do with two administrative assistants at much less than paying two salaries.
Sidekick has just emerged from its public beta. It is currently available to about 500,000 agents nationally through their MLS (and they’re quickly adding more MLSs). What Sidekick can do with minimal direction is remarkable.
“There are a number of different activities that every professional industry has to go through when it comes to research, data analysis, looking at properties, running comps, coming up with marketing strategies, sending emails, managing calendars and scheduling,” Martin said.
“These activities are really important, but you don’t have time to do them. Typically, you have to hire administrative support, but it’s hard to find one or even two people that are good at all those different things.”
Examples of tasks AI assistants can help agents accomplish
Manage your calendar and inbox (setting up appointments, sending emails)
Search the MLS for listings and perform a market analysis
Create CMAs/run comparable sales
Perform data analysis and create/interpret spreadsheets
Generate listing descriptions based on photos
Generate social media strategies and content with dynamic hashtags
Trainable: Requires less training than a human with specific rules
Case study:
A major challenge in pricing high-rises is determining the premiums between different floors, views and a variety of other differentiating factors. While an agent who really knows the building may be able to do this, it’s still hard to quantify. This is where generative AI not only identifies the differences in these premiums but can also spot other factors that make a given location in the building more or less desirable.
One of Martin’s clients in Manhattan had been tracking the sales of one of the major apartment (co-op) buildings for many years. When she entered the data into Sidekick, it came back with two very useful findings:
Sidekick identified how much the premium would be for a seventh-floor unit as compared to the second-floor (or any other location in the building).
Sidekick also determined how many units in the “C” line of the building differed in terms of price per square foot vs. those in the “F” line.
Wrapping up: Do your homework
Many agents are intimidated by this technology. It’s essential to do your research and learn and explore which option is best for your team, and to price out which models to see how you and your team could benefit from using this tech.
Unfortunately, there’s a lot of bad advice and uncertainty about these new technologies. As a result, people are hesitant about trying them. To overcome any reluctance you may have, Martin recommends the following:
“I think the most important thing is to adopt a mindset of curiosity and experimentation so you can wrap your arms around these technologies. Once you do, the value will become obvious, and you will probably ask yourself, ‘Why didn’t I do this sooner?’
Remember that this tech can be an efficiency lifesaver, freeing up time for you to work on your human relationships and grow your business. Don’t be afraid to learn new things; you may find that the solution you have been searching for is just a few clicks away.
Bernice Ross, president and CEO of BrokerageUP and RealEstateCoach.com, is a national speaker, author and trainer with over 1,500 published articles.
On April 2, 2024, Jennifer Berman, one of real estate’s most remarkable and innovative leaders, lost her decade-long battle with melanoma and breast cancer. This feisty, petite blond with the gravelly voice and the courage of a lion had a deep love of the real estate industry and the people in it. Most importantly, she was a friend you could count to be there when you needed her.
Jen’s career started at Homestore. She went on to hold management positions at Keller Williams, First Team Estates and, ultimately, became the general manager of Hilton and Hyland, the No. 1 brokerage in Beverly Hills.
From there, she partnered with Chris Pollinger to found Berman and Pollinger, “Advisors to the Elite in the Business of Luxury.”
In 2022 she joined DirectOffer as their COO. DirectOffer is committed to “breaking down homeownership barriers in a world that is DEI and ADA-focused.”
From 1998 to 2017, Jen was a host and moderator for Inman Connect. Together with Marti Gallardo, in 2014, she helped to launch Luxury Connect at the iconic Beverly Hills house where The Godfather was filmed. Arianna Huffington was the host.
The Godmother to the Million-Dollar real estate agents
As the General Manager of Hilton and Hyland, many of the largest residential transactions in the country crossed her desk. When the Million Dollar Listing TV series first took off, Jen became affectionately known as their “Godmother,” since she played a pivotal role in helping so many of them to get started.
In January 2020, Jen became part of the cast for NBC’s Listing Impossible. Although Aaron Kirman was the star, Jen’s expertise in negotiating ultra-luxury deals was bar none. She was often operating in the background, not only putting the deals together but keeping them together when they started to unravel.
I was riding back from Palm Springs with Jennifer when I had a chance to see her resurrect a $50 million deal that was falling apart. It was unusually complex since there were multiple agents and brokerages in the deal.
What made the deal especially difficult was that the buyers and their agents were from outside the U.S. and were totally clueless about what was required to close a deal of that magnitude.
What I witnessed was a master class in negotiation. There are very few people in the industry who have the negotiation chops it took to put that deal back together like she did.
An indomitable spirit
One of my favorite stories about Jen happened at Inman Disconnect in Palm Springs. I had sprained my ankle badly and had to go to the ER. I ended up with a boot and was advised not to put any weight on my foot. When Jen found out, she showed at my room with a care package in hand.
The next morning, the hotel set me up with a wheelchair. Jen was determined to push me out to breakfast. When she realized pushing me and my wheelchair over the dirt paths wasn’t going to happen, that didn’t deter her. She grabbed Mauricio Umansky and recruited him to help.
Of course, she also made sure she got the picture:
Til the wheels fall off
Jen has always been an active supporter of WomanUP!, as well as my conference at Awesome Females.
In 2018, I was chatting with her about what she wanted to cover at that year’s conference. The theme that year was, “Playing Your Game Your Way.”
Jen wanted to interview three of the top female luxury brokers. That didn’t feel right to me. I kept working with her to find another topic. It took close to an hour until she finally broke down and told me a story that virtually no one had ever heard.
Jen was always so busy she seldom had time to date. A friend set her up on a blind date with someone who supposedly was a great guy. He turned out to be a psychopath who brutally attacked her.
She was screaming as he pounded her head against the floor trying to kill her. Her neighbors called the Beverly Hills Police.
When the police showed up at Jen’s door, she was going in and out of consciousness. Her attacker answered the door and said nothing was wrong. The officer answering the call forced his way in and, in doing so, saved Jen’s life. She had sustained multiple injuries from the beating, including a severe concussion.
It took Jen a long time to recover. The day she was scheduled to see her doctor for the last time for the concussion, she had also had a routine physical and mammogram. When she met with her doctor he advised her to do the following:
“I want you to call several of your closest friends and go the Peninsula Hotel. Have drinks and a beautiful dinner. Unfortunately, you have breast cancer [on top of the melanoma that she had already been fighting] and you need to begin treatment tomorrow.”
I encouraged her to share her story as a keynote for Awesome Females. The title of her session was, “Til the Wheels Come Off.”
She was terrified about going public with the story. The agreement I had with the women in the room was that no one was to discuss this outside our conference. Jen came very close to not doing it.
It was her first keynote and the most powerful one that has ever been delivered during the 18 years that we have held that conference. The room was in such shock no one even moved.
The beauty of what Jen did was that she took us to that dark place she had been to, and then shared her journey about how she had put her life back together. It takes tremendous skill and talent for a speaker to share such a horrific event, and then leave the audience with a vision of a “brightness of the future” that leaves them walking away with hope.
Playing her game her way
Jen certainly played her game her way and inspired so many of us along the way.
Virtually no one knew how sick she was, about the multiple surgeries she went through, round after round of chemo, in and out of the hospital, seizures caused by meds and the tumors that metastasized to her brain.
They didn’t know how she was locked in her condo in West Hollywood during the pandemic, with helicopters overhead and rioting even inside her building, and was unable to access the care she needed for multiple cases of COVID due to her weakened immune system.
All we saw on Zoom was her smile, her unstoppable energy, and her giving heart.
I spoke with Jen earlier yesterday. She could barely speak. She asked me to tell you the following:
“I have been honored to have been to be part of the Inman community for so many years, as well as WomanUP! and Awesome Females. Thank you for your support for all these years. You have touched my heart in ways you cannot imagine. I love you.”
For those of us who loved Jen, admired her indomitable spirit, and the light she brought into our lives, April 2, 2024, was the day that the “wheels fell off.”
Rest in peace, my friend.
Bernice Ross, president and CEO of BrokerageUP and RealEstateCoach.com, is a national speaker, author and trainer with over 1,500 published articles.
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Here’s what you need to know, as well as steps you can take to cope with this fast-moving tsunami of change.
First, it’s important to note that this is a proposed settlement. The Department of Justice (DOJ) and the Federal Trade Commission (FTC) will probably weigh in on this matter. Moreover, the settlement excludes HomeServices of America, their brokerages and agents. It also excludes another 94 large brokerages that had $2 billion or more volume in 2022.
Second, defendants in Batton 1 and Batton 2 in Illinois,where the plaintiffs were buyers (not sellers) and that Inman called “the mother of all commission lawsuits,” are also not included in this settlement.
Will association membership continue to be a requirement to access the MLS?
On the plus side for NAR, this is a major win since they will not be facing bankruptcy. They will also continue to retain control over a number of MLSs nationally. What’s unclear is whether the DOJ or FTC will force MLSs to eliminate association membership as a requirement to access to MLS listings.
According to RETechnology, 350,000 non-Realtors can already access the MLS systems without being Realtors.
“Many states, including California and Florida, have mandated that MLS providers extend their offerings to non-Realtors for a long time. Whether you’re already on board or contemplating this transition, now is the opportune moment to position your organization ahead of the curve.”
The article also calls on associations and MLSs to provide a “non-Realtor” option with a fee for accessing the MLS.
The buyer compensation field disappears in July 2024
Assuming this settlement is approved, the impacted MLSs will be forced to remove the buyer commission field by July 2024. Now is the time to start transitioning any future listings to this new model.
Based on anecdotal information I’ve heard from companies and those working with large teams, about 60 percent of the time sellers are already asking agents on listing appointments about how they should handle the buyer’s commission. Chances are that almost all sellers will be asking about this ruling given how much press this settlement has received.
For the time being, look to your broker, your company’s legal counsel or your state association hotline for advice on how to handle these inquiries. If you’re going to continue to represent buyers, it’s time to start using buyer brokerage agreements if you don’t already, as these will soon be required for all buyer transactions.
Ignore the naysayers who claim prices will come down significantly
According to The New York Times, “Housing experts expect the deal to shake up the housing market and even drive down home prices across the board.”
These so-called “experts” seem to have forgotten that prices are driven by market forces, not the amount of commission, as Steve Murray correctly noted in an article on CBS News.
“It will have the impact of reducing commission costs for sellers; it will save money for sellers to the detriment of buyers,” Murray said, adding, “Sellers don’t set home prices based on what their closing costs will be — the market sets home prices.”
The number of Realtors will drop dramatically
At last summer’s Inman Connect Las Vegas, I spoke with quite a few industry leaders at brokerages, state associations and MLSs. At that time, most were planning for 20 percent to 40 percent declines in their membership if the MLSs were forced to eliminate the buyer compensation field from the MLS.
The good news for Realtor associations is that most Realtors paid their annual MLS/association dues in January. Consequently, the big hit in revenue and membership won’t really show up until at least 2025.
Nevertheless, according to the latest Inman Intel report, 27 percent of agents are considering joining the American Real Estate Association rather than remaining in NAR. Whether the new trade group is actually a viable option remains to be seen.
Is decoupling the buyer’s commission the demise of the MLS?
In aninterview with Next Home CEO James Dwiggins last fall, he warned that even if the parties reach a final settlement, the DOJ and the FTC are likely to become involved.
“What’s super important for everybody to hear is that regardless of how these civil cases play out, you are very likely going to see the Department of Justice and the Federal Trade Commission get involved and find a way to remove compensation being offered in the MLS,” Dwiggins said.
Nevertheless, he explains why, even if buyer commissions were decoupled, this would not reduce the importance of the MLS.
“The MLS is extraordinarily important. Cooperation is extraordinarily important. The way that data is warehoused, the way that data is secured, all of those things are intact. The difference is an offer of compensation is no longer in the MLS,” Dwiggins said.
“Do I think MLSs will consolidate? Yes. Do I think associations will consolidate? Yes, candidly, they should. There should be fewer of them to begin with anyway, but I do think the importance of those two organizations are still intact — they will just act differently.”
Americans are willing to pay a full commission, provided that they see the value
Dwiggins pointed to research done by 1000 Watt that shows Americans are willing to pay a full commission when they see the value of doing so. He went on to explain why this is the case:
“In 1960, 30 percent of Americans had dual-income households. Today, between 60 percent to 70 percent of Americans have a dual-income household. Because everybody is busy with their careers, kids and other activities, they want convenience. They’re not going to wake up one day and say ‘we need to sell our house’ and do it themselves,” Dwiggins said.
“Studies by 1000Watt have also shown that consumers don’t disagree with what agents are getting paid — we just have to learn how to articulate it more clearly.”
Consequently, it’s incredibly important that every buyer’s agent can articulate the value they bring to the transaction. NAR published a very useful document that outlines 179 Ways Realtors are worth every penny of their compensation. Print up this list and share it with both your sellers and buyers on your next listing or buyer interview appointment.
NAR should work with Freddie Mac and Fannie Mae to roll closing costs and commissions into the loan amount
One of NAR’s core strengths is lobbying. It would benefit Realtors everywhere if buyer’s agent commissions could be rolled into their closing costs.
FHA, VA and USDA loans already have provisions that allow borrowers to roll certain closing costs into their loan under certain conditions. These models could be extended to Freddie Mac and Fannie Mae loans.
FHA loans permit the inclusion of closing costs in the loan amount. Additionally, sellers can offer concessions of up to 6 percent of the loan amount to assist with financing needs.
VA loans permit borrowers to include the VA funding fee in the loan amount. Other closing costs may not be financed into the loan, but the VA does allow for seller concessions and lender credits. These concessions can be used to pay closing costs without increasing the loan balance. Closing costs on VA loans can range from 1 percent to 5 percent of the total loan amount. The funding fee varies based on several factors, including the borrower’s type of military service and whether it’s the borrower’s first VA loan. VA loans also prohibit lenders from charging certain expenses, which can save the borrower even more money.
USDA loans require that the property’s appraised value does not exceed the maximum allowable sales price for the borrower if closing costs are being rolled into the loan. Sellers can contribute up to six percent of the loan amount through concessions to lower closing costs for the borrower.
Seller concession fields in the MLS take center stage
Did you notice that the FHA, VA and USDA loans all allow for seller concessions? As we move into this post-settlement environment, seller concessions will be an extremely important tool for putting deals together, especially issues regarding buyer-broker compensation.
Ed Zorn, VP and General Counsel of the California Regional MLS in his ICNY session Anticipating MLS Evolution: The Pathway to Potential Settlements, made a strong case for how the MLSs and the industry should adapt to this new environment by using seller concessions.
Zorn recommends that MLSs create an open seller concessions field. Seller and buyer concessions are a pivotal part of the negotiation process in all transactions. For example, anyone who has ever purchased a home and asked the seller to do repairs, buy down the buyer’s mortgage interest rate, or leave the big screen TV, etc. has negotiated a seller concession.
The open seller concession field will allow the seller to specify if they want to give the buyer a credit that could be used to pay the buyer’s agent a commission, give the buyer a credit towards closing costs, replace the carpet, or any other concession or incentive the seller may want to provide. This is a viable approach that not only allows the sellers and buyers to determine which concessions they would like, but in my opinion, would also be welcomed by the DOJ.
Zorn also suggested that residential agents take a cue from the commercial side of the business. Buyer agents should include the amount of their commission as well as any concessions as a standard part of any offer they present.
Challenges ahead for state and local associations
In the same interview, Dwiggins laid out the challenges facing state and local associations as they go about decoupling buyer commissions.
“Currently, 12 states require broker representation agreements that you must sign before you at least write an offer on a property that’s in the MLS. The 38 other states need to implement the same thing. Local associations or statewide associations need to legislatively go down the path of getting this implemented at the state level,” Dwiggins said.
“State associations need to get together now and go to work at the state level to get a buyer-broker representation agreement implemented as state law like the 12 other states across the U.S. currently do it today.”
This will be especially difficult for the four states that have transaction brokers and for other states that tie the buyer’s broker compensation to sub-agency.
Dwiggins did point out an important benefit for sellers: “They’re not going to have a bunch of looky-loos come through their home who really aren’t serious about buying the property.”
Should the industry move to an hourly rate like attorneys or use a menu of services?
Dwiggins explained the main reason the real estate industry cannot move to an hourly rate model like attorneys use.
“I’ve had a lot of people ask me, do we become hourly? No. Here’s why. First of all, our carve out in that specific statute where we are all 1099 [independent contractors], you can’t charge hourly unless you want to employ everyone,” Dwiggins said.
He also nixed the idea of going to a flat rate or menu of services. The reason? Most flat-rate companies have gone bankrupt. Three notable examples include Foxtons, Purple Bricks and REX.
One step at a time
It’s going to take time to navigate through the changes ahead. There’s going to be chaos and confusion, but the bottom line is that the pent-up demand for real estate is still there and the market is already adjusting to having higher interest rates.
Moreover, today’s transactions are so complex, most people have neither the time nor the ability to navigate today’s real estate transactions on their own.
So, polish up your buyer value proposition (or create one from the NAR 179 ways) and be prepared to help your sellers understand how offering seller concessions can help them attract more buyers, which in turn, will result in a higher price.
Bernice Ross, president and CEO of BrokerageUP and RealEstateCoach.com, is a national speaker, author and trainer with over 1,500 published articles. Learn about her new and experienced agent sales training programs at BrokerageUP.com plus her latest initiative to help women build wealth and secure their financial independence at RealEstateWealthForWomen.com
