Recap of Adapting to the Changing Real Estate Landscape: How to Navigate Compensation Conversations with Compliance and Integrity, Michigan REALTORS Letter of the Law: Amend Any Active Contracts to Comply with Practice Changes, August State Primary Election Update – We Won!
As I’m sure all of you know, as of this past Saturday, August 17th the practice changes required under the National Association of REALTORS settlement have gone into effect. In this week’s GAD Top Three, we have recapped some recent programming from Aspire North REALTORS® and Michigan REALTORS® provided to help you navigate this new environment. Also, check out the various resources on the practice changes available from the National Association of REALTORS® on facts.realtor and mirealtors.com. The GAD Top 3 then wraps with the August State Primary Election Update. Spoiler Alert, WE WON!
1. Recap of Adapting to the Changing Real Estate Landscape: How to Navigate Compensation Conversations with Compliance and Integrity
We had great attendance at the Adapting to the Changing Real Estate Landscape: How to Navigate Compensation Conversations with Compliance and Integrity Continuing Education course on Friday, August 9th where the presenter Barb Betts provided helpful information and advice on how agents can approach compensation conversations following the institution of practice changes. Unfortunately, our association did not have permission to record the event, so here is a quick recap of the information presented, for those unavailable to attend and as a refresher for attendees.
- Summary of Practice Changes
- Written Agreements with buyers when “working with” before “touring” properties
- Two Triggers for Buyer Agreement
- Agent is an MLS Participant
- Agent and client looking at/touring a home
- Two Triggers for Buyer Agreement
- All references to compensation out of MLS and any third-party aggregator (IDX)
- Agents may not accept more compensation than what is written on any buyer representation agreement
- Removal of Unilateral Offer of Compensation through MLS
- Written Agreements with buyers when “working with” before “touring” properties
- Barb emphasized that members “do not get cute.” You have to think differently, don’t try to go around the rules, or you will get yourself and your brokerage in trouble.
- Barb expressed that she doesn’t think commission sharing will be around forever. She believes that buyers will need to bring an offer and include compensation requests in concessions.
- Advice Barb gave for how to approach a compensation conversation with clients
- Agent conversation with a potential client: “We are going to have a conversation about compensation and how it flows through the transaction, because I don’t work for free.” If you wait for the seller to ask you how much you cost, then you have already lost the compensation conversation. Clients should have a clear understanding of what you cost as an agent and the value you bring.
- Set an expectation of what a seller should expect. Make sure that sellers understand that buyers are cash-strapped. Barb recommended doing this through a sample Seller’s Net Sheet and Buyer’s Home Estimate.
- Barb expressed that an unrepresented buyer can be a legal nightmare for a seller. Ask sellers why they don’t want to pay a buyer’s representation fee. Understand what their holdup is for paying a buyer’s representation fee. Share with sellers that not paying for buyers’ representative, limits buyers' ability to purchase their home.
- Barb mentioned that the reality of seller concessions in the MLS, is they are not a contract. You still have to negotiate.
- Have a rock-solid buyer presentation. Buyers are going to have a conversation with you.
- KNOW YOUR VALUE as an agent, your work begins when your buyer finds the home. Buyers are hiring you to get the home closed, not to find you a home.
- A lot of the issues you will have are with setting expectations.
- Barb expressed that she doesn’t think a lot of buyers will choose dual agency. If buyers understand that a dual agent must work in the best interest of the seller in the transaction, buyers will want their own representation.
- In your buyer agreement conversations explain to buyers all the ways your fee can be paid so they are not scared of this at the end of the transaction.
- Barb expressed that buyer’s agents will have to make some tough game-time decisions when you have the offer on the table and the seller has agreed to everything except paying your fee.
- Barb shared that with the practice changes agents need to be very aware of cooperation and communication. Tell everyone the same thing and get back to everyone in a timely manner.
2. Michigan REALTORS Letter of the Law: Amend Any Active Contracts to Comply with Practice Changes
On Friday, August 9th Michigan REALTORS® released a Letter of the Law video covering the real estate practice changes that have now gone into effect as of this past Saturday, August 17th. This video covers amendment forms that can be used to update any current listing or buyer agency contracts to comply with the required practice changes. These amendment forms are listed below. As they note in the video these amendment forms are only for use with Michigan REALTORS® Exclusive Listing Contract Forms B and BB and Michigan REALTORS Exclusive Buyer Agency Contract Forms J and JJ. If clients have signed a form other than Michigan REALTORS Exclusive Listing Contract or Exclusive Buyer Agency Contract then agents can adapt the Michigan REALTORS amendments for use with their own agency contracts. If you are working with a buyer, but do not have a written agreement, then you will need to use a new settlement-compliant buyer agency contract, which can be found here.
Access the NEW settlement-compliant Michigan REALTORS Forms here, including the Amendment to Exclusive Listing Contract and the Amendment to Exclusive Buyer Agency Contract. All practice change resources from Michigan REALTORS can be found here on their website. You can also get assistance from the Forms Library and Legal Hotline Companion Magazine. Don’t hesitate to contact Michigan REALTORS with any questions. You can contact them via the legal hotline at 800-522-2820.
3. August State Primary Election Update – We Won!
In the August 6th Primary Election both Aspire North REALTORS endorsed candidate, Rep. John R. Roth, and endorsed ballot proposal, YES vote on the Traverse City Public Schools Bond, won handily! Rep. John R. Roth and voting YES on the Traverse City Public Schools Bond were endorsed following our association’s candidates and issues selection and endorsement process.
Aspire North REALTORS endorsed candidate Rep. John R. Roth, who won his Republican primary election with 86% (12,134 votes) of the vote over Owen Suhy (14% or 1,983 votes). The Traverse City Public Schools Bond passed with 64%, or 14,196 YES votes to 36%, or 7,816 NO votes.
Thank you to all our Aspire North REALTORS members in these districts who voted in favor of Rep. John R. Roth and in support of the Traverse City Public Schools Bond! Let’s rack up some more wins for our industry in November!