Embracing the New Nar Commission Changes
Embracing the New NAR Commission Changes: A Positive Shift for Real Estate Agents
Great news! The recent changes in how commission is documented in agreements with our sellers and buyers don’t have to be the stressful adjustment they’ve sometimes been portrayed as. In fact, these changes can be seen as an opportunity to enhance our professional practices and client relationships.
A Look Back
When I started in the real estate industry 20 years ago, it was standard practice for agents to meet their clients face-to-face before going out for showings. Often, these meetings took place at the broker’s office, where the agent would even copy buyer IDs and start a file. This generally included a buyer representation agreement, which was thoroughly reviewed with the prospective buyers as it was being signed.
Fast Forward to Today
In today’s age of technology and e-signatures, whether it’s for listing or purchase agreements, we’ve gotten out of the habit of reviewing paperwork with our clients before they sign. This isn’t to place blame, but rather to acknowledge the shift we’ve made towards convenience as modern technology has developed. Additionally, we’ve lost a sense of our own value to prospects and clients as access to listing information, history, neighborhood details, and more have all become public domain and as easy to locate as a Google search.
The Real Change: Our Mindset
The core of these changes lies in our mindset. Just as our mindset shifted towards recent practices, it can shift back to the expectation of a full consultation with prospective clients. While it might not be “easy” for everyone, it’s ultimately a mindset that we can decide to adopt.
Addressing Fears and Embracing Transparency
There’s been a lot of talk about fears such as not getting paid, our services being devalued, or feeling like we have to negotiate our fees. However, the discussion should focus on the nuts and bolts of these required changes. As agents, we constantly tell sellers to “disclose, disclose, disclose,” and it helps to think of these commission changes in the same way. We must disclose who’s getting paid and how they’re getting paid.
A Dynamic Market
The market has always determined commissions. It wasn’t that long ago when the seller’s market was so hot that more listings in the MLS stated $1 commissions to buyer’s agents. Agents either worked it out with their clients, negotiated their commission as part of the offer negotiations (which was rare), or moved on to the next listing.
Listing brokers can still pay buyer brokers. Sellers can pay buyer brokers, and buyers can pay buyer brokers. Yes, things are changing, but this doesn’t have to be negative. By meeting with our clients, being clear on the value we bring, and confidently reflecting that in our commission agreements, we continue to serve our clients at the level they deserve. We let technology take a step back, have deeper, more authentic conversations, and showcase our skills and value.
Positive Outcomes
By embracing these changes, we improve our position in the industry, enhance our professional standards, and find authentic connections through face-to-face meetings and conversations. Over the coming weeks, we’ll share tips on discussing these changes with buyers and sellers, integrating new processes into your business, and more.
In the meantime, my first recommendations are to:
Know your value and articulate it.
Never sell yourself short.
Always carry listing and buyer representation paperwork in your vehicle.
Texas Realtors: Leading the Way
For Texas Realtors, not much has changed. Texas state law already required buyer representation agreements to be signed to represent buyers. Showing a home without an agreement made the agent a “subagent,” representing the seller by default, with 99.5% of listings showing 0% commission for subagents. So a buyer representation agreement was always central to protecting the buyer agent's commission and part of the sales process.
We're Here for You
We’ll be with you every step of the way. Want to have a personal conversation about how to approach these changes? Give us a call. Let’s embrace this positive shift together and elevate our industry to new heights.
