It’s very likely that a great many agents have little idea of the industry’s history. Like most people, they chose a profession, learned the ins and outs and began practicing it to earn a living. It is not crucial that they know how buyer agency, in particular, has evolved, but an understanding of it would certainly give them a perspective that could even be valuable when meeting new homeowner hopefuls. And potentially give them a leg up on competing agents.
Joe Rand is the chief creative officer for Howard Hanna | Rand Realty. At his company’s recent HannaCon conference, during a session titled, “Buyer Agency After the NAR Settlement” he provided a thoughtful overview of why history counts.
“If you’ve been in the business long, you remember when buyers were not represented, when everybody represented the seller,” he said. “Now you can’t even imagine a time when you would take a buyer out in your car and drive around to go look at houses the entire time you worked for the seller.
“But you were a sub-agent of the listing agent, and you had no working relationship at all with the buyer. That was a really bad situation. That was not good because buyers didn’t quite understand that the person taking them around was essentially the used car salesman working for the dealership. And it put agents in a terrible position of, ‘I’m working with you, but I’m not working for you.’
“The problem is that we never really built the infrastructure for being buyer representatives. We never really built the materials or the format. You’ve been to tons of conventions, you’ve been through tons of training on how to give a great listing presentation compared to the amount of training and materials and information you’ve got about how to give a great buyer presentation.
“So now, because of the settlement, we have to accelerate, and we have to do it quickly. But we can do this. We need to get ourselves in a frame of mind, get the right infrastructure, the right materials, everything. Learn the scripts, learn the dialogues, learn how to use and articulate our value proposition.”
Agents who follow that advice will very likely succeed more than those who do not. It’s only natural that when change comes there is concern. But rather than worrying, embracing the new normal is the right attitude.
“I’m not scared. In fact, I’m excited. I’m excited to show people what we’re worth,” says Howard Hanna agent team leader Jason Sokody, from the Buffalo, New York, region. “The truth of the matter is (being a real estate agent) is a lot of hard work—a lot of connections, a lot of psychology. And what I see moving forward is more documentation to make sure that each side understands the representation, and an increase in value proposition, especially on the buyer’s agent side.”
Proactively making the necessary mental adjustments is vital, advises Kendall Bonner, vice president of Industry Relations at eXp Realty.
“The great temptation is this desire by agents and brokers to not see things change as a result of this settlement,” she says. “I’m out there trying to debunk that concept because I do think things are going to change, and we need to be prepared for it. The longer it takes us to modify our behaviors, the more traumatic and difficult this evolution of our industry is going to be.”
Having every bit of information is more critical than ever before, adds Brian Donnellan, president and CEO of Bright MLS.
“There is a tremendous amount of data and insight in your MLS, and you can’t fake it,” he says. “You have to know the market. You have to know the area. You have to know everything about your client and what they are looking for. To me, knowledge is king. Let’s not pretend you can’t bring more to the table.”
What hasn’t changed, and what will never change, stresses Lamacchia, is making sure buyers and sellers are served to the utmost degree.
“Though many of us think and know that there are aspects of these changes that are not any better whatsoever for consumers, and in some ways worse for consumers, we have to accept it, and we still have to do what is best for our clients,” he says. “The overarching principles of what we as REALTORS® do, and in teaching REALTORS® to do, haven’t changed. Do what is best for your client, make recommendations that are best for them, help them navigate the sales process and gain an understanding of how things work, how to land the house and how to sell it.”
Allowing yourself to catch your breath is recommended by Gretchen Pearson, owner and president of Berkshire Hathaway HomeServices Drysdale Properties.
“This is a blip and a moment in time for real estate,” she says. “There are quite a few things that are in transition, not just the agent’s or the industry’s understanding of what this is. Buyers are in a blip of who’s in the market right now, sellers are in a blip, and the data is a bit of a blip. It will all settle in.”
A recent RISMedia webinar focused on buyer-agency essentials as they pertain not only to lawsuit-related issues but to overall industry trends as well. Key takeaways included:
Acceptance of the new normal
- While some changes may not be beneficial for consumers, real estate professionals must accept these changes and adapt. The focus should always remain on doing what is best for clients, maintaining core principles such as making the best recommendations, helping clients navigate the sale process and ensuring clients get the best deals.
Formalization of relationships
- The shift toward mandatory buyer agency agreements in some states highlights the need to formalize relationships that were previously based on verbal agreements and trust. Formalization can clarify expectations and ensure both parties are committed, mirroring the formal relationships typically established with sellers.
Comprehensive market approach
- Adopting a comprehensive approach to representing buyers ensures that buyers have access to a full range of options. Explore all potential properties, including new homes and off-market properties, rather than relying solely on the MLS.
Transparency and honesty
- To maintain professional relationships in this industry, agents must clearly communicate what they will do for clients, their professional affiliations and the necessity of signing buyer agreements. This not only builds trust, it demonstrates the value agents bring to the table.
Understanding consumer expectations
- Consumers do not expect real estate services to be free and are aware of the costs involved. Agents should communicate the value they provide by addressing what buyers want: a large selection of properties, good deals and a simplified buying process.
“I am certain that the industry can adapt to what’s going on today, and where the industry is going over the next many years,” says Howard Hanna’s Rand.
To that end, he provided three more pieces of advice for agents.
Market buyer agency. “Our way of generating buyers is we put inventory on the internet and hope buyers will get interested. We do an open house and hope they’ll show up. We advertise our listings but have never said, ‘Let me try to get buyers by marketing the services we provide to buyers.’ So let’s do that, and not just in our marketing. Do that with your presentation materials. Develop presentation materials that are about buyers and the services you provide to buyers. We have to articulate why it is that people need an agent.”
Don’t be afraid to ask to get paid. “People get paid to do work. Be confident in the value you provide. Don’t be self-conscious of your right to ask to get paid. We need to get a lot better at negotiating because we have a whole new cadre of clients that we have to negotiate with. Stop expecting objections. Don’t anticipate them. Be ready for them. Just be firm. If they’re not willing to pay you, you’re not going to work for them. That’s the bottom line.”
Be great at your job. “Learn the skills. Learn how to represent buyers. Take classes, talk to your managers. Read books that are out there. Identify best practices for representing buyers. Get buyers the right home. Keep them informed. Minimize their frustrations. Avoid and solve problems and give them a great experience. Make them feel that they were cared for and they were loved throughout the entire process.”
