You asked for our thoughts on the proposed NAR settlement, so it’s time for us to weigh in. In this SPECIAL BONUS episode we are giving some history on commissions, explaining who NAR is(and how we feel about them) and discussing the terms of the proposed settlement in response to the numerous commission lawsuits. Want to find out which stage of grief we are in or what scene from Friends came up? Then don’t miss this funny, headline debunking, mix of anxiety and optimism. We get into specific scenarios and talk through how this will work logistically and we tackle some big issues like protecting homeownership and our veterans. Come back for Part 2 in a few days and we will give you your action item list to not just prepare for changes, but to thrive in this new real estate landscape.
Leave us a review at RateThisPodcast.com/HustleHumbly
Get your FREE Database Template
Email Templates 101
Agent Systems 101
All Resources
Submit your topic ideas and toasts to Hello@HutleHumblyPodcast.com.
—————–
Rate, Review, & Follow on Apple Podcasts
“I love Katy and Alissa and The Hustle Humbly Podcast.” <– If that sounds like you, Click here, scroll to the bottom, tap to rate with five stars, and select “Write a Review.” Then be sure to let us know what you loved most about the episode!
Also, if you haven’t done so already, follow the podcast. We’re adding a bunch of bonus episodes to the feed and, if you’re not following, there’s a good chance you’ll miss out. Follow now!
The following is a rough transcript provided by Otter.ai.
Katy 0:01
Different back are different good. But he says, I don’t know. Nobody likes change. That’s all I
Alissa 0:07
keep playing in my head. I don’t know.
Katy 0:09
Nobody likes change.
Alissa 0:10
I think that is the perfect way to describe how I feel.
Katy 0:15
In some ways, I would say thanks a lot, Missouri.
Alissa 0:18
Because we were doing just fine wanted to be like what agent was so bad, but that was awesome. It was. Thank you, DOJ. Wow, this isn’t the end of buyer agency. This is the beginning. Hi, y’all. Welcome to hustle humbly. It’s Alyssa and Katie. And we are two top producing realtors in the Baton Rouge market.
Katy 0:42
We work for two different companies where we should be competitors. But we have chosen community over competition.
Alissa 0:47
The goal of our podcasts is to encourage you to find your own way in business to stop comparing yourself and start embracing your strengths.
Katy 0:53
Hi, everyone, a guy at and here’s a list of a it’s a bonus episode.
Alissa 1:01
Yay. Bonuses are fun.
Katy 1:06
I will say for the record. The last time I think we had a bonus was COVID.
Alissa 1:11
Realize it was a disaster.
Katy 1:14
Like emergency emergency. So we’re gonna try and keep it upbeat. But we’re gonna talk about the settlement. Yeah. And if you haven’t heard about it, you’re also clearly living under a rock. And we felt like this was important because first of all, I’m over headlines. And we’re gonna give you practical. Here’s the great news. You and I did not previously discussed this. You’ve been out of town. Yeah, you just got back. So this is gonna be a very candid conversation between the two of us, right? We briefly talked about one thing before we started, but I want to go back in time a little because the headlines are so misleading. And because even in the realtor groups, I feel like people are saying just really wrong information realtors, realtors. So we’re gonna do a little history lesson. Are you ready? Okay, this is from an article I found online. Okay. It is the history of NAR. Okay. Okay, in 1913, the predecessor to Nar and don’t worry, y’all, I’m going to tell you what Nora is in a minute. stated that any listing agent be prepared to share the commission with anyone who brought a buyer 1913
Alissa 2:35
Okay. So like, if you’re getting some be willing to share? Yeah. To
Katy 2:39
Yeah. To anyone who brought you a buyer. So the buyer’s agent? Sure. Okay. 1920s the average commission was around 2.5% of the sales price. Okay, so the total the total it was two and a half and they were still giving something to the buyer side. 1940s the average commissions were around 5%. Okay, okay. 2020 Can you guess what the average commission was for? It was 4.94. Okay, guess what, it wasn’t? Six. Right. If I see another GD headline that says 6% commissions are gone. I’m like, I they were always negotiable. They were not always negotiable. They were not all six. And we have been very mindful as agents. I feel like in our market specifically to never discuss commission like openly because it is an antitrust violation. Yes. And yet the media, some agents have heard I mean, like, they just say it like it’s it’s a known fact that it’s six. It has to be six. It’s not freaking six. It’s a go shovel. I would love to have been paid that much my entire 18 year career same. It was not saying it was not the same. Okay. So I just wanted to make sure we had a little history of commissions because in fact, in 2020, the average was 4.94. Yeah. Okay. Now, let’s move on to what is NAR or NAR KB initials stand for the National Association of Realtors. And this is taken from their website. Also, it was called something different in 1913. It wasn’t called northern but it was just sort of like the group of agents was called something else and then it eventually became norm. Okay. This is literally from Nars website. The National Association of REALTORS is America’s largest trade association representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries. The term realtor is a registered collective membership mark that identifies a real estate professional who is a member of the National Association of Realtors, and subscribes to its strict code of ethics. Okay, NAR has never set commission amounts. Never Never. Never were they did they tell me this is what you’re required to charge? No, never. Okay. That’s all I wanted to do on backstory. That was beautiful. Thank you. Oh, and also, this morning, as I was thinking about recording this, and just real delighted. I was like, you know that scene on friends whenever Ross sleeps with the copy girl, and Rachel finds out and then she says, So how was she? And Ross says, different? And she says different bags are different good. And he says, I don’t know, nobody likes change.
Alissa 5:45
That’s all I keep playing in
Katy 5:47
my head. I don’t know, nobody likes change.
Alissa 5:50
I think that is the perfect way to describe how I feel. I have always been one of those people that can see both sides of everything. It’s hard to vote. It’s hard to like anything like that. Because I’m always like, well, they make great points. Oh, well,
Katy 6:05
that’s a great view. Like I prefer not to choose that. Yeah. Like,
Alissa 6:08
I see both sides always. Right. It’s a problem a lot of times and n has shown up to be somewhat problematic. And my feelings about this because it depends if you catch me at the right top.
Katy 6:21
Right. Okay. So also my new favorite quote is two things can be true.
Alissa 6:25
Two things can be true. Two things can be true, true. And you can feel two things that say, Oh, absolutely. That’s where I’m at, um, to help us. And then we will get into the meat and potatoes of this, but I have written down the five stages of grief.
Katy 6:43
Oh, great. You know, we both came in black, not intentionally out. We’re
Alissa 6:46
just grieving, you know?
Katy 6:48
I mean, look, nobody likes change. Nobody
Alissa 6:50
likes change. So the stages are denial, anger, bargaining, depression, acceptance. Okay. I’m going like back and forth. Right. I will say, you know, when this first all started, how long like over a year ago? Yes,
Katy 7:08
because of this? Well, first of all, the settlement that has sort of instigated all of this. Yeah, I mean, the settlement the lawsuit was filed, I think in 2019. But it just the verdict came in October, we recorded our first episode on this lawsuit in September. Yes. Okay. I’m 2023. Yeah, at
Alissa 7:28
that time, denial, denial, denial, I was very much in denial that this was going to get any headway. I just thought, and I’m also basing it on how I know I operate and how our market operate. Correct. So I don’t know how the whole country and every company and every realtor right in
Katy 7:48
some ways, I would say thanks a lot, Missouri.
Alissa 7:52
Because we were doing just fine. It’d be like what agent was so bad, but that was awesome.
Katy 7:57
It was the market. It was the whole market. Keep going. Okay, keep
Alissa 8:01
in mind denial phase I just kept sticking to they’re wrong. The listing agreement is very clear. Not only do you not have to sign it, not only do you not have to put something in these blanks, but like, you don’t even have to use an agent at all. If you hate agents so much. You don’t have to use them. Yeah, we are optional, right? provide a service.
Katy 8:22
Yeah. And that was true in every market. Yeah.
Alissa 8:26
How can we even have a lawsuit when you signed agreeing to something you said it was very clear, you said I just didn’t think I was very much in denial that we would ever get to where we are now. Okay. Right now I go back for between anger and acceptance at the same time. Sweet. Who
Katy 8:46
are you angry with?
Alissa 8:47
I’m very angry with the National Association of Realtors. I’m just angry with how many Realtors there are that don’t that because it is so easy to get into real estate. There are so many Realtors operating from an unprofessional level correct not having any conversations with their clients. We’re over here trying to start a podcast to bring professionalism back to the realtor brand. And now we’re like, you know a few years in it’s like, they’ll just throw our papers in the air and be like, forget it. Forget the realtor brand part. But on that note, I’m ready to to finish up my my pity party here great and move into acceptance. Okay, because one thing I got to thinking about is how many times have you heard the professional agents say, I wish there wasn’t so many agents. I wish there was a higher barrier to entry. I wish it was harder to be
Katy 9:49
an agent. This is it. Right?
Alissa 9:53
I think when people said those things they were hoping on the front end, that it would be harder to Get your real estate license. Yeah, that I don’t know what that would look like. But it would just be harder. And we sort of got what we asked for in the really backwards way is not on the front end. Yeah. It’s like by it’s like, yeah, now that you are licensed. It is about to be harder. Yes. Much harder, much harder. As we shift. Uh huh. And but I also think that I heard in one of the episodes, one of the researchers that I was listening to say, honestly, I think in the next two to five years, we’re going to be set the agents that make it that are full time and committed to their chosen profession, are going to sit down and say, Thank you, DOJ. Yeah, like, wow, this isn’t the end of buyer agency. This is the beginning.
Katy 10:52
Right? Right.
Alissa 10:55
And when I get in that mindset, I’m good. Yeah. Makes sense to me.
Katy 11:01
Right? Well, because remember, I love that no one has in especially in the media, no one has pointed out, you know, we’re saving consumers, consumers don’t want to pay this 89% of sellers used an agent and 2022. Again, you’re not forced to list your home for sale, it was up 2%. I mean, that was 2023, up 2% from 2022. And guess what 89% of buyers use an agent to buy their home in 2023, up 3% from 20. To the public, the consumer has spoken, they want to use an agent. So you don’t have to we’re not the VO want to not the villain, they call us this, the consumer has said I would like to use an agent, they’re not required to the buyers aren’t required to. Now that’s a little new. Because if you show up and you’re in a dual agency state, and you don’t have an agent, the listing agent kind of does both Right, right. But even still, they could say I don’t want you to represent me, the seller could say I don’t want to list my home. I’m listing it for sale by owner and that number keeps shrinking. Because y’all it’s a full time job. Right. And the consumers need advice on making and I guess selling the largest investment they will likely ever have.
Alissa 12:14
100% So just to back up slightly. Thank you for giving us the history, you know, from you know, from the beginning where we are now. Right now, there’s over 2000 cases out there. Right. Is that right? That is correct. Yeah. They are considered the legacy cases. Okay, Legacy legacy cases are just seller, plaintiffs. Oh, sweet. That is how all this started. Well, yeah, then. Okay. And Ariana, go back. And we will if you go follow us on Instagram, we will reference back our other episodes that we did explaining this lawsuit while it was happening. Okay. It is the National Association of REALTORS versus the DOJ. Okay. Just recently why this is such a big deal right now is that NAR has announced that it has reached terms with the plaintiff on
Katy 13:08
seitzer Burnett, but the terms of the settlement will cover some of the copycats. Okay, so some of the other seller plate, it’ll all be lumped together. Right? Yeah. Should it be approved? Because, again, not the media. This is a proposed settlement. Right. And the DOJ might actually say this isn’t enough.
Alissa 13:29
I know it this all still has to be approved by a judge. Yeah. So this is all proposed. As the day that this is recorded. This is all proposed, nothing is set in stone. So what their proposal what the National Association of REALTORS is proposing is that they will pay $418 million. Correct. And it also means that if they pay this there will be no more copycats. Okay, however, that’s only for sellers. Right? There’s already buyer lawsuits out there there. Yes, the buyer lawsuits are just now beginning which I think is kind of funny if we can just laugh about it for a moment. Like, I bought a house with the realtor and I wanted to pay them myself. Right like, Hey, man, yeah, I
Katy 14:17
don’t know. The realtor helped me yeah, they wanted to they wanted to pick the amount okay, what I well they were like well, the you just say you got this amount. Maybe I wanted to negotiate less because you’re a new agent. Yeah. Or you weren’t so good at it. I really loved
Alissa 14:31
the McDonald’s. Please tell him we’re in this might be better visualize YouTube. But you know, there are so many rants on Facebook right now and may we also tell you that is not the place you need to be if you are a professional Realtor right now,
Katy 14:47
I also would like to point out ranting does no one any good?
Alissa 14:51
Nothing, no good. No good at all. But someone who clearly didn’t follow along in these cases or understand what because
Katy 14:59
if you can See here? How many documents I have I feel entrenched.
Alissa 15:02
Yes, we have been following this. I probably am following it a lot more because of the podcast quite closely. But I would still be following it. Yes, pretty closely. So she wrote to the public. I can’t believe this lawsuit. I mean, if I was going to McDonald’s to buy a cheeseburger, and they wouldn’t tell me how much it cost, I would never buy that cheeseburger. How am I supposed to show houses not even knowing what it costs? The and the I just, I didn’t obviously comment or anything. And thankfully, there were some very professional well spoken, polite realtors that did put her in her place, but it’s like, the pulling of all of this is so that they do know what it called the buyer. The buyer right does know what it costs right? There is no more. You want a free cheeseburger here. This cheeseburgers free? Yeah, would you like it?
Katy 16:05
I’m gonna bring it to you.
Alissa 16:06
I’m gonna bring you a
Katy 16:08
cheeseburger. Do you mind if I bring you the cheeseburger?
Alissa 16:10
Can I bring it to you? Well, it costs me I’ll meet you at the cheeseburger.
Katy 16:14
Don’t worry. Don’t worry. Don’t worry about that. Well, I need to know what the cheeseburger costs three. No.
Alissa 16:20
That’s how buyers have been feeling is that they don’t know what we’re getting paid even though we’re working for them. That’s kind of weird, right? Think about it. It’s quite weird. So it’s not that but i On the flip side. I see that what this settlement is proposing is not that buyer compensation is going away. No. It is proposing that it can not be listed in the MLS correct at all correct. Not in a wink, wink, nudge nudge
Katy 16:56
and I am so over those poke me to the meme with the this house is three bedroom and a three is capital. And it’s got like, whatever. So it’s basically like, like trying to like code. Yeah, like a decode rule. Because as Realtors our job now isn’t to figure out how to work around this and still do the same thing. The point is to actually take stock of how the industry was set up and be like, Okay, if we’re going to make this change, how does it get better for the consumer? How does it get better for the agents? How do we make it more transparent for everyone involved? How do I get paid more easily? Like, let’s just figure it out. Let’s not try to figure out how to keep it the way it was correct. That annoys me loopholes.
Alissa 17:39
You know, if you’re that agent, let’s just go ahead and hang our hat because you may not be here in three years, right? This is a huge change. And you’re either on board or you’re not. This also will require a buyers representation agreement before you show a house.
Katy 17:55
Yeah, this is a big one huge. I would like to say that that they’re gonna, some people are gonna say we always had one, we always use one our state required, there are states that require it, we happen to be in a state that doesn’t. So we have an interesting perspective, this would be a major shift here. Yeah. Which would also mean that I won’t also be pulled into procuring cause mediations, which I have done before and lost $750 of my hard earned commission saying, so this sounds great to me. Yeah, I’m for it. I would love to show them up to my buyer and be like, here, you sign this, this is what I’m gonna get paid. Let’s go see your house. I would also love it as a listing agent to be like, Hey, you can’t come over here with your buyers unless you
Alissa 18:38
have a buyer representation agreement.
Katy 18:40
Thank you. But there are a lot of agents and y’all, you can all be good enough that this isn’t scary. But there are a lot of agents that have used the free cheeseburger plan for too long. Yeah, I agree. I’m fine. You don’t have to pay me anything. Don’t worry. I don’t need you to hire me. I’m just gonna show up and open the store and then write this contract. Yeah, you me and then someone else will pay me? Yeah. Like this is gonna make it a little more difficult for you to be like stranger from the online lead, be like, Hey, I’m gonna need you to sign this and pay me they’re gonna be like, I don’t even know
Alissa 19:10
you wonder about the agents that pay for leads, because they don’t usually get things signed. They’re the boss. Those are the consumers that are click happy. They want to see how they clear they get the agent contacting five different agents. Yes. And so it’s going to be the most professional one that has a system in place.
Katy 19:35
I know hurting. But here’s my question. Who’s going to police this? I don’t know who’s going to say do you have your buyer agency agreement signed? Is it the listing agent who says I need to know you have one before you schedule a showing? Well, that adds more work for me as the listing agent, right? Is it it’s not the Board of Realtors, as far as I know, they have never checked any of my documents for anything because the only documents that you It audited are by the Louisiana real estate commission because those are required by law. Yeah. And this is not a law. This is a settlement term for members of the National Association of Realtors. So it’s in our policing this somehow, right? Who’s policing it? That’s where I have logistical questions. So
Alissa 20:22
as they were saying, during this change, I would love to know how long it is before we’re really comfy again, like, is it a year? Is it this time next year? We’re like, Oh, that was wild. I’m glad that we are where we are. It
Katy 20:33
was pretty uncomfortable for a solid year. I
Alissa 20:35
love it. I know. It’s amazing. But that’s a law. You’re right.
Katy 20:40
That’s the problem I have with this. So
Alissa 20:42
they were saying that during this transition, the liability risk is going to skyrocket, right? The amount of people that are going to be taken to arbitration mediation agent versus agent, consumer versus agent, seller versus buyer, everybody is going to be messy. It’s going to be messy before we get into figure it out. Yeah. And there’s other things too. So one thing that I don’t agree with, I don’t agree with taking compensation out of the MLS, because if we’re doing all of this in the name of transparency, this is making it less transparent to for agents
Katy 21:24
it is made. The problem is they’re trying to do it in the name of transparency for the consumer. And the consumer does not have access to the MLS and maybe that’s what should right. Well, it’s me now.
Alissa 21:37
And I don’t want to I don’t want the whole podcast to be about like how it should have been. But I’m saying that also to say that because it is gone now. We’re going to have to find other ways to you are allowed to post if the seller is offering anything or nothing on your personal website. Okay, that is allowed.
Katy 22:00
I mean, it feels like a moment where it’s like, is everyone going to put it in showingtime? Right, that would make sense. I go to Vegas showing out an email last night. Yeah, I don’t know, there’s got to be a place for the point where it’s still not very transparent, some other centralized database. So this information is going to show up somewhere. And here’s the problem, y’all. ls 2.0. Let’s go back to our initial friends. I’m going to remind you DOJ is the Department of Justice FTC is the Federal Trade Commission. CFPB is the Consumer Financial Protection Bureau. These governmental agencies care about how this shakes out and have a say, it doesn’t, it matters, not that NAR and the lawyers for this settlement have decided that this is what they are willing to agree to. The judge has to approve it, then all of these governmental bodies have to say this is enough of a change. Yeah, because right now the settlement doesn’t say sellers can no longer pay buyer’s agents they’re allowed to Yeah, that is a proposed term. If one of these bureaus says that’s not enough, we don’t want the seller to pay it the buyers got to pay their own the buyer has to know what it is the buyer has to negotiate it the buyer has to pay it then this settlement will not be well it just won’t be approved. Would you like to know the timeline? Yeah. Okay, I will stay for the record two things can be true. I was very very disappointed in nor the second thing is, I think being a member of this trade commission. It’s important this trade association I think having some standardized ethical rules in place for the profession would be terrible to lose. Yeah, I can’t even imagine the kind of shenanigans people would do if they were not held supposed to be held to look at what happens when they’re held Imagine if they weren’t held correct Wild West bad stuff. I don’t like the thought of it. So but I will say nor is literally I feel like they hit rock bottom. And I actually think they are doing a better job now.
Alissa 24:08
Okay, now thanks guys.
Katy 24:10
I wanted to say too little too late and I believe I even put that in one of my emails but I am changing my tune. I have been to the fax dot realtor website Oh, I wrote that down and it is freaking good. Yeah, it’s good. And I have seen many communicates from the mothership know her about how to talk about this what’s going on what we’re doing, how we’re trying to protect you I’m like, I think that whoever was in leadership before I don’t know if it was that I don’t know what we were just like status quo trying to protect the what was normal. They were kind of
Alissa 24:45
like me probably they were probably in denial that the Navy at this point, they
Katy 24:49
definitely didn’t get ahead of it at all, so that I’m disappointed in now that we’ve already gotten where we’ve gotten. I do feel like they’re trying to dig out of the hole. Okay, here’s a hunt. Here’s something else they Get out 179 ways agents who are realtors are worth every penny of their commission love that 179 I didn’t read them all yet but that exist on the website. Okay but in facts dot realtor they have the terms of the settlement. They have talking points for your clients they even have sample social media post. They got it all y’all if you need something faxed at Realtor will help you but I did pull the estimated timeline because I didn’t even know what it was okay, I’m like, when does this proposal get June? Well, here’s the deal. March 15. Obviously, we all remember Black Friday. What do we call that? It was actually on the Ides of March. Anyway. Nar settlement was signed, okay. between the parties of that lawsuit, which was seitzer Burnett. Okay, fine. March 22, plaintiffs file notice of settlement NAR withdraws pending motions and seeks to stay litigation. So basically, appeal stop, right. Okay. early April is when the decision on preliminary approval should come. Okay. Okay. So I don’t know what that means. But that’s what it says April. Uh huh. Next week? Uh huh. Okay. Okay. And then it says the end of March early April, the motion for preliminary approval 60 days later from the motion so I don’t know if this has happened yet as of this earring, but the motion for preliminary approval would be filed and then 60 days later is the deadline for realtor MLS is to execute Appendix B in order to be included as a release party. Okay, because there are some brokers that are not included. Yeah, I’m not going to dig into that
Alissa 26:41
is it because they’re not a part of the National Association from that? Because the settlement only works for companies that did less than 2 billion Oh, that’s right. And volley Yes. Okay for that. So
Katy 26:50
please talk to your broker. Your broker knows if they’re in or out man I’m
Alissa 26:54
glad I’m not a broker right now I’m
Katy 26:56
not listing all the brokers that are in or out because you can also buy in so this is changing by the day if your brokerage was out of the settlement not included then you could buy in I’m included a your I believe you’re included okay. Then 60 Days Later deadline for brokerage who are opting in to execute a pet so basically you’re going to opt in it has to happen within 60 days of this motion for preliminary approval and then the deadline for non realtor MLS is to execute Appendix D in order to also be included so if you’re in an non realtor MLS and you want to because here’s why you want to be included you don’t want to be subject to continued lawsuit Yeah, right yeah, there’s gonna be this kind of everyone’s gonna be like well you know what, we got to all get on this bandwagon so
Alissa 27:42
all these people that were like well my broker does not even include it in this last one that’s bad news. Yeah, you might as well get actually not good news for you. Okay, next
Katy 27:51
on the timeline mid to late July Norwood implement the practice changes so the things that we’re talking about end of July is class notice I guess they’re just trying to let every consumer know if they belong to the class. I would also like to state for the record y’all I received a note card to my home to a woman who does not exist to my knowledge named Sherry days if you’re out there Sherry let me know I’m getting your mail. I’m the only person who’s ever lived at this address. This home was brand new, so no municipal address even existed prior to me owning this home and I Sherry DS who does not live here was eligible to join the class. Oh great. Well, Mike you don’t say tissues person because that’s what lawyers do. Okay, mid late August the realtor MLS isn’t opting in non realtor MLS is and brokerages to implement practice changes. So I guess some things happen in July some things happen in August as far as changing practices maybe that’s the actual doesn’t show on the MLS vibe I don’t know. And then September anticipated motion in support of final approval. So we still haven’t gotten final approval even though we’ve started making these changes. This is what I can’t understand. I got to do all this stuff. But if we what if it doesn’t get approved and my undoing it? Right? Whatever. Oh, all right. And then December final approval hearing estimated date TBD. So December.
Alissa 29:15
Okay, so possibly July is when we’ll have to start implementing if it all gets approved.
Katy 29:21
And you won’t know until December if it’s definitely approved. Here’s I hope
Alissa 29:25
it swift whatever happens, I just want it to be like a light switch.
Katy 29:31
I don’t want to show me quickly. Well, I
Alissa 29:34
think it’s like I what I think one of the reasons because in our market buyer representation agreements aren’t used really. If you tried to get a buyer in Baton Rouge, Louisiana to sign one. They would likely say nobody else. I’ve never heard of this ordeal for me. lico asked another agent to and yeah, that another one make me sign anything because not everyone’s
Katy 29:54
going to be an early adopter, right? Even though you and I are going to tell everyone Hey, now’s a great time. To get your process ready to start doing this, you’re gonna have to do it. Don’t wait till the last minute, right? Does that mean in this next little bit of transition, you could lose a buyer who doesn’t want to sign in and goes to an agent? That isn’t an early adopter? I guess
Alissa 30:15
you could. You could be okay with, you know what extent you could
Katy 30:19
also learn that the public isn’t going to let you down. They’re going to be like, well, I want to work with you, Alyssa, I called you. Yes. And if this is what it takes to work with you, I’m okay. This is how you run your business. It might be harder for people who get online leads because those are strangers. They didn’t seek that particular agent out right one of that house if you’ve been working by repeat referral, I don’t think this is going to be a pro. I agree with
Alissa 30:41
that. And that’s sort of I think, where I’m getting my piece from, also, okay, but um, but yes, I agree that if it’s Swift, then it’s like, no matter what agent you call, they’re going to make you sign a buyer representation agreement. And if they’re not, they will likely like their animation. Yeah, thereby elation. Right? So some of the other liability issues is that because compensation is going to go through so much like if you are steering a buyer at all based on compensation, you will likely lose your license. I mean, you can’t say and you should. And you should you cannot say Oh, well, I’m not showing you that house because the seller is not offering to pay me. Because guess what, that doesn’t matter anymore. Because this buyer that you’re telling that to has already signed a buyer representation agreement with you saying what they will pay you, right. So you that’s where the bright side of this is? Yeah, that. Think about how safe you feel with a listing? Yeah, nobody can go knock on that door and throw your sign out the yard and say, Oh, can you imagine? It’s like the wild way? Yeah, like, Oh,
Katy 31:57
my now yeah,
Alissa 31:58
I took your sign and put mine there. Like surprise, like, No, you can’t do that. You can’t do that with buyers either. Isn’t that beautiful?
Katy 32:07
I love it.
Alissa 32:08
I just think it I love it. Right?
Katy 32:09
Like we’re working together.
Alissa 32:11
Yeah.
Katy 32:12
Okay. Do we want are there any other terms of the settlement that you need to share? Do we cover them all? I think that was the high point. You can’t share the the Commission on the MLS if the seller is offering one but the seller is still allowed to offer one. We just don’t know how they’re gonna get it out. We don’t
Alissa 32:27
know yet. I have heard it’s going to be on the form of like your website, okay. At some point, which is it’s just like another step. You’re gonna have to it’s we do run a business, we do need to know. Yeah, like, it’s
Katy 32:41
not the end of the world for me. If I have to go to click on another website, find out I don’t care. Yes. It’s just doesn’t bother.
Alissa 32:46
So on this buyer representation agreement, it must be on a map. It cannot be up to or it has to be okay. I’m
Katy 32:54
so mad this because if you negotiate with your buyer, at this point, can I just say numbers? Like I’m over it? Yeah, we’re not talking about let’s This is a sample if on your buyer representation and running per se, you say 20 person? Obviously, that’s real high. If you say 20, and then the seller is offering 25, you only get 20. Right?
Alissa 33:16
So with this settlement, it prohibits the buyer’s agents from collecting more than the amount on their buyer representation agreement. I like it. So if you’re selling yourself short, and the seller is offering more, you do not get to collect that more. It will be passed on to the buyer client as extra. Oh, it goes to the buyer
Katy 33:36
though. Yes, that is for them. Yeah. But I think that’s sketch and I’m not sure about that. I know, wouldn’t it? Wouldn’t the seller keep it? And then if I’m the listing agent, what I’d be like, hey, look, it’s been going this way, every buyer’s agent shows up with an agreement that says 20. And you know, you want to give 25 But the extra fives go on to the buyer, you should just offer 20 This is how Commission’s will get pushed down. Right? Because why would I tell my seller to just I don’t know, I don’t get it.
Alissa 34:04
So they’re saying to like you cannot withhold an offer because of compensation. If you’re not pleased with what the seller is offering, then you have to write a written request of compensation that everybody signs. Okay. So that is where transparency is coming in. Okay,
Katy 34:20
I like that. Um, they’re
Alissa 34:24
saying that sellers will majority of sellers at this time because 89% of them did last year by choice. We’ll continue to see the value of offering some sort of concessions, but the way that it will be worded is that seller is offering X amount to a buyer so that could be seller is offering $10,000 In concessions to a buyer. It is up to that buyer, how they use how they use it. Do
Katy 34:53
I want to use hover around the MLS? Yes, but it cannot say that it has to be used for or incur agent commission? Correct? It’s has to just be $10,000 in concessions? Do you whatever you want to do you wanna apply it towards your down payment, you want to do it towards your closing costs. You want to pay an agent, it’s up to you.
Alissa 35:11
Yeah. And here’s the thing. If you do not have a buyer representation agreement signed, you cannot be paid. If you don’t have a listing agreement signed, and you’re, you know, those agents that tell for sale by owners, I’ll do an open house for you. I’ll market your property and make you fliers. They don’t have a listing agreement. You know, they’re looking for buy, they’re looking for buyers, but or hoping that the seller will eventually hire them. Yeah, right. But what I see is that the sellers thinks to some of the agents free marketing, sell their home, and that agent makes nothing, they couldn’t collect anything, because there was no listing agreement. Right. Right. Right. There has to be a buyers representation agreement signed in order for you to be paid. Yeah, on a buyer side of a transaction. A seller can still offer the concession, but you have to clarify how it’s designated with your buyer. Okay, that’s where transparency is got it. When talking to a seller, yeah, Want to hear this. Okay, this is what this is from. I’ll have to source it in the show notes episode because it was really good. It was like some higher ups at the National Association of Realtors. Okay, you can tell the seller, all buyers are under a buyer representation agreement with their realtor, okay, meaning they are agreeing to pay their agent. What does that we don’t know. I don’t know what that realtor charges. Yeah, doesn’t matter. Just as we talk through all of the other concessions on your seller net sheet that we’re going to be looking at, you may or may not want to offer something towards the lump sum for the buyer. Okay, so that we can advertise if you are or are not offering? I do think it is important that I mean, we’re in the trenches of understanding this. Yeah, the sellers and buyers. Some of them are some of them are all they saw was a headline that said no more 6% Commission. Yeah, that’s all they saw. So we have to be educating them that what is going on in your market where you are specifically. Okay, so you could say, Listen, in our market, we’re not seeing sellers offer anything, right. So I don’t think it would hurt you to not but if you say I checked the listings, and the sellers are offering this and this and this if you want to compare and be a competitive advantage.
Katy 37:37
Now I still have a problem with though you do I have a I have a real, like foundational problem with it, because it is just doing what this lawsuit said we were doing, which is telling sellers, your house is more likely to be sold. If you offer a buyer’s agent commission of
Alissa 37:54
X. Okay, that before this, they were saying it from a standpoint of agents are sketchy. And if they’re not getting paid what they want to be paid, they’re not going to show your house. I know we’re flipping the script. Make it make sense for it. Because I’m working with buyers all the time. And this is what I’m seeing. I’m seeing like, Listen, Mr. Seller, not all buyers are able to pay the full amount, okay, offering concessions opens up your buyer pool, because the buyer is selecting to only look at houses that offer a buyer’s agent commission. Yeah. How
Katy 38:33
do you know because we’ve never really had
Alissa 38:35
that, because now it’s gonna be on like,
Katy 38:37
I don’t know, I don’t know, what I’m asking is how do you know what the buyers behavior will actually be?
Alissa 38:42
Well, you’re having a buyer consultation now. And you’re saying
Katy 38:46
I know, but we’re just it’s all conjecture. Yeah, I don’t actually know what the average buyer is going to do when this happens in July. I feel
Alissa 38:56
like I don’t know what they’re going to do. But I know, based on the hundreds of buyers, I’ve helped buy homes, that the majority of them will not be able to cover the cost.
Katy 39:11
Oh, no, no, I agree with that. Yeah,
Alissa 39:15
I know that to be a true statement. Okay. So Mr. And Mrs. Seller, if you would like to open your buyer pool and be more competitive, if you would like to offer something that’s
Katy 39:28
assuming that all buyers even if they can’t afford it still want an agent? Yeah. Which obviously you would if you if you can’t, if you want an agent, you want an agent 89% wanted an agent, right? But what you’re assuming is that they’re saying, Well, I want an agent, oh, I can’t pay. And then if I can’t pay, I want the seller to pay or else I’m not going to go look at their house. I guess I’m trying to ask how do I know that the buyer when presented with two houses and they really like this house but the seller isn’t offering a commission that they just won’t see that house. I think they’ll still see the house. Okay, so
Alissa 40:08
that’s a good example of sort of what we were talking about earlier. Earlier when I first got here. I asked Katie as a listing agent, I’m a listing agent. Yeah. A buyer calls wants to see the house. Do you have an agent? No. And I don’t want one right? Because I don’t want to pay well, I can’t afford an agent. Can you show so now do I have to be a showing agent and a buyer and a listing agent and I’m doing double work as a listing agent to sell the house for you know what I mean? Yeah.
Katy 40:43
This is what I call the BB BB, you know like it’s the reverse of for sale by owner for sale by owner means the owner selling their house with no agent, BB BB is the buyer brokerage by buyer. Like, because they show up and they’re like, I don’t have an agent. I don’t want one. Yeah.
Alissa 41:01
What does that call just sale by owner and a contract?
Katy 41:04
It’s purchase home by buyer. Yeah. Because
Alissa 41:07
all commission is negotiable. Always, always has been always has always has been. Because of that. I think you made a valid point about saying at your seller consultation. Yeah, listen, Mr. And Mrs. Seller, this is how it works. Some buyers will be represented by a realtor and are handling compensation with their realtor themselves. In the event that we have a buyer that doesn’t want a realtor cannot afford a realtor, whatever the reason is, they are not represented. In order for me to handle that showing, I will not be representing them. But the fee will be increased your fee has to increase your fee Hyster. Seller, Mr. Seller, if the buyer comes along and is not represented at all, and I’m gonna have to carry both sides of the transaction to closing, even though I’m not representing you’re still babysitting, I still have to babysit this by and make sure your house sells because that’s what you want. Right? So I’m still going to be doing double time. Right? So if this buyer wants to come along, in the name of no representation, the fee becomes this.
Katy 42:21
Yes. And I think that makes sense. Had the seller been offering a buyer side commission? Yeah, basically they’re offering 10. And the buyers and you tell them upfront, hey, listen, if a buyer comes along and doesn’t there, they don’t want to give their buyer’s agent five. If we’re offering half, then that’s fine. But you’re not saving five, you’re gonna have to pay me six. Yeah, it’s like some percentage higher than you would have gotten or seven or whatever. These are just fake numbers. But because I am going to have to make sure it closes for you. And that means I’m going to have to babysit and show the house and be there for inspections and all the things that a buyer’s agent would have done. And I’m even if I’m not representing them, even if I’m just opening the door and providing them a form and doing ministerial acts, I have to make sure it closes for you. Yes, and you’re gonna have to pay for that extra service.
Alissa 43:13
So this also changes your listing consultation. 100%. So on the wall, we’re talking about listing appointments and buyer appointments. I thought this was an interesting point as well, okay, you get a phone call assigned call, say they want to see a house. And we say, oh, have you been pre approved? Are you working with an agent? What’s your timeframe? When somebody calls us to sell their house? We never asked those questions like, on the phone. We have a listing appointment. We have a consultation, right? We show them what the process is. Uh huh. We show them our value. Yes. Then we present the listing. And
Katy 44:01
there are lots of buyer’s agents that do an awesome job and have an actual consultation. Yes, if you do, that is wonderful. Right? Please don’t yell at us through Oh, speakers. i That is amazing. But I want our listeners to know if you don’t that’s okay. So many of us haven’t done it in the past or don’t currently, but but you’re going to have to add it,
Alissa 44:25
you’re going to have to add it and they said that one of the best lines is really saying I need to learn about your needs. And I’ll educate you on the market that we will be competing in after that we will decide if you want to proceed working together. Yeah.
Katy 44:39
And look, here’s the great news. Now you’re getting them to sign up front so you don’t have to worry about losing them. So in the event that you do spin your wheels a little and they ended up buying like one that there may be their first time buyer. Let’s do a whole scenario. Okay? They’re a first time buyer. They can’t afford a lot so they’re gonna pay they’re saying look I can’t afford a lot, but I’ll pay. But see, that’s what I don’t understand. Because they’re gonna be like, if the sellers paying it, then I want you, but didn’t you sign a contract saying you’d pay me x?
Alissa 45:09
Right? So what? In that I’m working through this? I know, I know, in that scenario, okay, say you signed for 10. Okay. And I have explained to you like, listen, KT buyers, sellers, my sellers might offer to wear. And it’s sort of the similar situation like when I have a buyer who can’t decide how much money they want to put down. Yeah, and alone. I’m like, well, listen, it may depend on the house, if we find a house that needs a lot of renovation or a lot of upfront money needed, you may opt to put less of a downpayment down so that you can cover the costs of the initial things you want to do. Or if it’s a house that’s move in ready, and you get to like, you don’t have to spend a bunch of money after you close, you may put more money down for your down payment. Now, we are that person. So Katie, buyer, I know that we signed for 10. If the seller is offering seven, then you can put seven towards however you want to put an FS at that point in
Katy 46:11
time you could renegotiate your commission
Alissa 46:14
we can with your buyer. Yes. So even if it’s not the amount that what if
Katy 46:20
it’s zero, and your buyer has told you, I can’t pay and then they’re like, this is the house I want. I guess my point was as an agent, who now at least has locked down my buyers instead of them running off. Yeah, I might be like, well, it just didn’t work out. That’s okay. Good luck to you. Do you know what I mean? Like?
Alissa 46:35
So you’re saying like the buyers that sign something hoping a seller’s going to offer and then the seller doesn’t and they don’t have the money?
Katy 46:43
Yeah. And then I’ll just be like, Well, I would have lost some of these buyers to another agent at some point. And do you know what I’m
Alissa 46:49
gonna be some losses along the way? Absolutely. And that’s another thing that lenders are working on right now lenders have got to be scared lenders are trying to figure out what to do to allow buyers to roll some costs. And
Katy 47:06
look, there are federal laws in place that are it’s going to you can’t change a law that quick, like there’s some things that are a big problem. It
Alissa 47:14
is a law, that a veteran can not pay their buyers and
Katy 47:20
I would argue veterans more than anyone need an agent, you serve an agent deserve to be served fully. So I do have actually a note on this here is my take on that. I think we’re all smart enough to know, when you go to a listing appointment, in your market, in certain price ranges, maybe close to the military base, you know, the likelihood of getting a VA buyer, okay, right. If you’re selling a million dollar luxury property, I don’t think 100% loan VA buyer is going to show up, likely, right? So when you go to your listing appointment with Mr. Seller in the $150,000 price range, who you know, the whole like, it’s just very common to have a first time buyer or a VA buyer or someone that doesn’t have a down payment. I think it is your duty and your I will say moral obligation to at least explain to that seller that it is their duty to uphold homeownership for these people. And that means offering a buyer’s agent compensation so that they can afford to have an agent.
Alissa 48:27
I’m surprised to hear you say that.
Katy 48:29
But you see I classified it. I don’t think it is a seller’s duty to pay everyone like look, but if they don’t have any money, and you know you’re in a low price range, that
Alissa 48:40
is where I’m happy to hear you say that.
Unknown Speaker 48:43
I mean, I know the game.
Alissa 48:44
I know. I know. And I never thought that I just think that you felt very strongly about sellers pay their agent buyers pay their age. Oh, that’s
Katy 48:54
not what I said though. And I have I have always stood by as agents. How do we make sure homeownership is protected? Yes,
Alissa 49:02
I but when I was saying that you need to have a consultation with your seller and say Listen, Mr. Seller, let me sit down and explain the market to you and show you that the other listings in your area are offering something you like but I said that here’s the thing.
Katy 49:19
I feel like the post I’m seeing and the first thing I’m seeing and what people are saying reopen the realtor community is like this is all wrong because of VA buyers and because all my buyers are first time buyers. I’m like, I’m gonna call BS y’all, right? Because I’m gonna tell you very plainly, my current average sales price is $330,000. And it’s not first time buyers. I literally have a first time buyer right now. It is the first one I’ve had in several years. Yes. So I am not saying like it’s not all absolute. I think you have to look at the nuance. Yeah.
Alissa 49:52
And I think just like I’m trying to give an example to everything like how you said, so a buyer you think a buyer He’s not going to choose the house they love because the seller is not offering anything. Here’s, I have seen this happen. I have buyers who don’t have money, okay? They are approved rural development, okay? They don’t want to live in Livingston or Ascension Parish, they want to live in this neighborhood. This neighborhood is not Rural Development approved, okay? You have to have a downpayment, okay? Don’t so they can’t live there. That’s where they can live. They had to go buy a house in Ascension Parish, or the rd loan was approved, okay, even though they would have much rather bought that house in that neighborhood?
Katy 50:33
Like, they’ll be like, well, here’s what I’m saying. That, if that makes sense to me, but I just don’t have any proof of concept that buyers will say, when it comes down to it, I need my agent more than I need that house.
Alissa 50:46
You need money.
Katy 50:50
But the choice is how you’re spending the money. Yeah, they needed the money to buy the house. But if someone had said, well, guess what, now we’re offering 100% loans for this house. But only if you don’t have an agent? Are you telling me they wouldn’t have picked the house in that neighborhood? I don’t have any proof of concept it’s
Alissa 51:04
all going to be it’s like we can only base our speculation on what we’ve seen buyer behavior so
Katy 51:10
far. And I totally agree with what you’re saying. You’re like, well, the buyer just went where they had to get what I’m saying is that I’m not sure I don’t know how deeply buyers understand. Because we’re not great at explaining it, the value of their realtor,
Alissa 51:23
every buyer situation is different, right? So will they
Katy 51:27
pitch their realtor when it comes down to it if that means the difference between owning a home and not owning a home? I don’t know for sure. But I’m like, I think it’s a 5050 There’s gonna be some losses. And here’s the thing as an agent listening to this episode, if you’re not able to communicate value, and we’ve said this for years, you have to be able to communicate value not just to your sellers, but also now to your buyers more than ever. Yeah, if the buyer doesn’t see the value of 1000s of dollars to have you help them, then they might just be like, well forget it. I don’t mind buying this house without an agent. Because that house yeah. Right like that. I mean, that’s all I’m saying. But if they did
Alissa 52:07
sign the buyers representation agreement, and you wanted to be a stickler as the realtor you,
Katy 52:13
they you could and you better not say something that isn’t true. Like, oh, I’ll just let you out of it later if we don’t fight like, oh, just sign this, but I’ll let you out. Like, like, no, no, you can’t and almost feels like you’d have to make it a term. Yes. Like, you’re looking because you got to put a number in or else you’re not gonna get it from the seller, right? But let’s just say you’re okay with let’s look, let’s go try and find one. If the seller is paying it, then great. I’ll take x if the seller is not paying it. No worries. I feel like you got
Alissa 52:42
to write it in. Yeah, that’s what they’re saying. It cannot be vague. Yeah. You got to write down to be up to it has to be Yeah, what does number plan? Yeah, transparency. Yeah. Um, I feel like this is a great stopping point. Oh, great. And I think that you call for a part two, I, because I have some really positive mindset points about why I’m actually excited about these changes. I think they’re good that I did. We didn’t get to I still have lots of papers. I know. So we’re gonna have to part two, this bonus episode. Okay. I think this was so helpful. It’s almost like, you know, we joke that it’s podcast therapy. Doing all this research and not being able to talk it out with you has been very hard. Oh, really? You
Katy 53:32
were like, I needed my sounding board? Yeah. Like, I need you to walk me through it. And
Alissa 53:36
I like it. Because we both see things differently that are both correct. I think
Katy 53:42
that we both ultimately want to serve our clients well and be paid for that. Yeah. Right. How I get there is of no concern. I am not romanticizing the way it was. I couldn’t care less. Yeah, All I care is that I serve my clients. Well, they get what they want. And I get paid. Yeah, I don’t care how I get there. I do care when the general media and people out in the world in the public just think that realtors are terrible, and they do nothing and shouldn’t get paid and everything’s going to be great now, right? And I am very concerned and want to make sure that we all work together to figure out how to protect home ownership for all types of homeowners. 100% right. Now we can talk about the next time. Okay, great, but it is very important.
Alissa 54:27
Okay, good. I feel better. All right. Do you? Weights been lifted? I guess we’ll do part two.
Katy 54:33
Oh my god. It’s our alarm. It’s our timer. Do you like that? It’s Mardi Gras music. Okay, goodbye. Oh, welcome back for part two.
Alissa 54:41
Thank you so much for tuning in to the hustle humbly podcast.
Katy 54:45
If you enjoy this episode, please go to rate this podcast.com/hustle humbly and leave us a review or drop a comment if you’re listening on Spotify. If
Alissa 54:53
you have an episode topic or someone you’d like to toast on the show, please email us at team at hustle humbly podcast Come
Katy 55:00
find us on social media at hustle humbly podcast don’t forget to find all of the free resources at hustle humbly podcast.com/resources See you next week this is the good day
