This is why I’m so skeptical of ‘seller concessions’ being a viable solution.

If agents were united in appreciating buyer-agents (doesn’t every realtor represent a buyer occasionally?), then everyone would take a stand to ensure buyers get adequate representation, and buyer-agents have a pay structure that is reasonable.

But in the chart above, most listing agents would rather just say no to ANY seller concessions. Is that because they believe that the pay system we’ve enjoyed for 100+ years has been wrong and unfair? Or is it because they are too lazy to explain the benefits to sellers?

These are fairly successful agents who read Rob’s blog. The percentage of no answers is probably higher among the general realtor population.

Rob thinks that the seller concessions will fade away over the next 18-36 months, and I agree. Even though offering seller concessions is the perfect compromise to maximize the home’s exposure to the most buyers, it means that listing agents would need to convince their sellers to pay buyer-agents, when many are not.

Will home buyers pay to Get Good Help?

Or will they just go direct to the listing agent, knowing that the new listing forms give those agents additional compensation if the buyer is unrepresented?

The new forms encourage single agency, so it is inevitable that the trend will go that way.

The self-inflicted realtor implosion is happening right before our eyes.

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The elimination of buyer-agents continues:

The following is from MLSPIN regarding Boston condo buyer agency new rules.

Effective immediately, we can accept listings of property for sale without offers of cooperating compensation. If your seller instructs you not to offer compensation, enter a value of 0 into the compensation fields in Pinergy. We would also remind all subscribers that MLS PIN’s Rules and Regulations have never prohibited the seller, the buyer, the listing broker, and the cooperating broker from negotiating and mutually agreeing upon any compensation that differs from the value in MLS PIN.

Soon, we will roll out additional changes set forth in the proposed settlement. First and most importantly, offers of compensation, if any, will be made by the seller. Listing brokers and cooperating brokers will no longer split commissions. Second, listing agreements must disclose that the seller is neither required to offer compensation nor required to accede to any cooperating broker’s request for compensation. The listing broker must disclose this to the seller before the seller signs the listing agreement. Third, if a seller elects to offer compensation, the listing agreement must also say that the cooperating broker will be an intended third-party beneficiary of the agreement with the right to enforce the same. Finally, before posting a listing, the listing broker must certify, in a checkbox designated for this purpose in Pinergy, that it has notified the seller of the seller’s rights not to offer compensation and not to accede to a cooperating broker’s request for compensation.

Click here for a flyer summarizing the above changes.

MLS PIN will implement the proposed changes to our MLS system, Pinergy, that differ from NAR’s settlement as soon as possible, and we will keep you apprised of this timeline. In the meantime, the update that MLS PIN can accept property listings for sale without offers of cooperating compensation is now in effect.

Please remember that the Court has yet to officially approve these changes. If the Court in Boston does not approve our settlement, we may need to further modify our rules and Pinergy or revert to our previous rules.

We recognize that education and training will be necessary to incorporate the abovementioned changes when updates are officially made to Pinergy. We will provide further communication, video, timelines, and details in the following weeks. Please watch for more information directly from MLS PIN, as we remain the most reliable news source regarding MLS PIN updates.

We thank you for your patience and look forward to assisting you in any way we can now and in the future.

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The elimination of Boston condo buyer agents continues

The U.S. Department of Justice broke its silence in court on Tuesday on the impending changes coming for the real estate industry in the wake of settlement agreements by major brokerages and the National Association of Realtors in what experts say was a statement Realtors should heed.

During a status hearing for a case in Massachusetts, Jessica Leal, an attorney for the DOJ, said the regulator would neither support nor oppose the NAR settlement agreement, which will lead to sweeping rule changes this summer.

“We believe offers of compensation should not be made anywhere, but certainly not on the MLS,” Leal said.

My Thoughts

Without any MLSPIN commitment to pay Boston condo buyers agent a commission, what will buyer-agents have to endure? At best, the seller-paid commission will be a moving target, and many, and probably most times it will end up being peanuts.

Any agent who expects to be a successful Boston condo buyer-agent will have to become experts at having their buyers pay them.

But even if an agent can get buyers to sign a commission agreement, the process of buying a home around here will make it event more difficult.

Boston condo buyer-agents are being squeezed out by several market forces. The lack of transparency on MLSPIN, should it become the rule, will make it extremely difficult for a Boston condo buyers agent to succeed in a competitive real estate market.

The real issue now is that buyers HAVE to hire a buyer-agent in writing to buy a Boston condo. Once they figure that out, will they investigate the choices carefully, Or have Aunt Bea handle it? Or just go to the listing agents directly? My thoughts Boston condo buyers will go to the listing agent directly to improve their chances on landing the listing.

But the old-school listing agents will cop an attitude and either not want to do dual agency at all, or they will want the buyers to be unrepresented.

Progressive listing agents will encourage buyers to come to them directly, and it is inevitable that it will become the prevailing trend. It’s how the commercial Boston brokers do it today. If you don’t believe me check out the commercial listings on LoopNet.

In other words, it’s going to be a mess as agents turn their focus on getting buyers to sign an exclusive agreement. It will just complicate further what is already a very challenging environment.

Filed Under: Time to Revise my Business Plan.