Ok, buyer’s agents, I know you’re upset about the proposed NAR settlement. And I get it. Commissions have always been negotiable. The existing system generally worked well for buyers, sellers, and agents. And you may be angry with NAR for what feels like a betrayal.
But, frankly, none of that matters now. The settlement is well underway, just pending court approval. So these changes, however unwelcome, are coming.
You have two choices:
- You can rail against the settlement in vain OR
- You can get onboard and start prepping your business for the inevitable changes that are coming soon.
Interestingly, we don’t exactly know how the changes will play out in the market. We may have so many sellers willing to offer a 3% listing agent commission plus a 3% seller concession that this market-driven equilibrium remains. Or, we may have buyers negotiating flat fees, hourly fees, or commissions they will pay out of pocket.
We need to be ready for anything. So let’s get ready!
Potential Benefits of the NAR Settlement for Buyer’s Agents
We already know there are potential drawbacks to the NAR settlement (including pricing confusion, higher homebuying expenses, and lack of access to buyer representation). But, since we can’t change the settlement, let’s focus on a few potential benefits.
1. More Flexibility in Pricing Models
You’re no longer tethered to the old split commission model, so you can find a pricing strategy that works for your business model.
For example, if you want to limit the amount of time you spend with not-so-serious buyers, simply charge a flat fee for each home tour. Not only will this prevent looky-loos from wasting your time, but it will ensure you get paid for the time you invest with your clients.
2. More Consistent Income
It can be difficult to wait until Closing Day to get your paycheck. Now, you won’t necessarily have to.
You might decide to work on an hourly basis and invoice your buyers monthly for the time you invest in property tours, market research, and contract negotiations.
Or you might decide to charge flat fees for showings. Showings could be booked online, with payment due at the time of booking.
Either way, you can improve cash flows by bringing in money all month, every month.
3. Less Competition from Other Agents
Let’s be honest; some agents won’t be willing to adjust to the new rules. We may see lots of agents switch to another real estate career path, retire, or otherwise quit real estate. And that’s fine. There’s no shame in leaving a position that no longer suits you.
This is good news for the agents who remain. With fewer agents vying for business, you have a greater chance of securing clients of your own.
4. New Agents Can Compete on Price
I’ve seen lots of agents claiming that we all need to stick together to keep our rates stable. Well, that’s exactly what this anti-trust suit was about…agents colluding to keep rates high. So there is no more sticking together to keep rates stable.
And this creates an opportunity, especially for new agents.
Think about it this way: in most industries, consumers pay more for experienced professionals. Rates are lower for novices. Well now, buyers can decide if they want to pay more for an experienced agent or if they want to take a risk on a new agent to save money.
If you’re a new agent, price could be a competitive advantage as you enter the market and build your portfolio. Then you can raise your rates as you gain experience.
5. Innovative Service Offerings
With the pressure to differentiate themselves and prove their value, buyer’s agents might find innovative services to entice buyers.
For example, you could:
- Offer credit repair services to buyers who don’t yet qualify for a home loan.
- Hold new home photo shoots
- Provide annual property tax reviews (and charge for your appeal services if your homeowners are over-taxed).
6. Protection from Personal Liability
If you are one of the million+ NAR members who are covered by this settlement, you are legally protected from personal liability. Your past clients can join the class action lawsuit, but they cannot sue you personally. 
What Buyer’s Agents Should NOT Do Following the NAR Settlement
Wondering what NOT to do? Here’s a list of don’ts for buyer’s agents following the NAR settlement.
1. DON’T Panic
According to NAR’s 2023 Profile of Homebuyers and Sellers, 90% of recent buyers found their real estate
agent to be a useful source of information. Buyer’s agents are still very much in demand, so you don’t have to worry about your job disappearing.
2. DON’T Cancel Your NAR Membership
Lots of agents are angry with NAR for settling. But if you’re one of the legally protected NAR members, canceling your NAR membership now could void your legal protection and open the door for personal legal liability. Regardless of your feelings about the NAR, you’re likely in a better legal position by remaining in the organization for now.
3. DON’T Run Your Mouth on Social Media
I can’t tell you how many agents I’ve seen posting things on social media like, “If we all continue to charge 3% for the seller’s agent and a 3% concession for the buyer’s agent, we can continue business as usual.” This statement violates anti-trust laws by colluding to fix prices. If you are covered by a settlement, you can lose your protection through statements like this.
4. DON’T Try to Skirt the System
The new rules allow you to post seller concessions on your own website for your own listings. But you cannot create any type of database for local agents to enter their own seller’s concessions. You also can’t create some kind of code for alerting other agents to a possible concession through the MLS. Attempts to undermine the new rules could result in forfeiture of your legal protection under the settlement
5. DON’T Wait Until the Changes Go into Effect
If you wait until July to start preparing your business for the changes, you’ll be far behind the other agents who have been preparing for months.
What Buyer’s Agents SHOULD Do Following the NAR Settlement
So what SHOULD you be doing in the wake of the NAR settlement? Here are five ways to prepare your business for the new rules that will likely be implemented in July.
1. DO Show Your Value
You may need to convince buyers to pay you out of pocket. So show them why you’re worth it! Focus on risk mitigation since the financial risk is a key concern for buyers. And explain how you negotiate on your client’s behalf to get them a better price and better terms. Take a look at NAR’s list of 179 Ways REALTORs Are Worthy of Every Penny of Their Compensation for more ideas on demonstrating value.
2. DO Update Your Contracts and Marketing Materials
Your broker, local MLS, or local REALTOR association may already have new contracts ready for you to review and start using. You don’t have to wait until the new rules go into effect. You can begin using them now to get a headstart over your competition. Make sure you update your marketing materials as well. For example, update your Buyer’s Guide to include the tasks you handle on your buyer’s behalf and get ready to treat buyer consultations more like listing appointments. You’re no longer assuming you get the business when a buyer comes to you; now you are essentially interviewing for the job of being their buyer’s agent.
3. DO Reach Out to Your Clients Individually
Start texting your active clients, past clients, and everyone else in your sphere one by one: “Hey, do you have two minutes for a quick business call?” When you get them on the phone, you say, “Hey, I just want to make sure our community is aware of the new real estate rules. Have you heard about the NAR settlement?” This will give you a chance to understand how non-industry locals are hearing the news and set the record straight.
4. DO Create and Practice Your New Scripts
The new rules require new scripts. For example, you’ll need to explain that a buyer’s agency agreement must be signed before you can show a single home. You’ll also need to explain the new payment structure options and respond to a slew of new objections. Start drafting your scripts and practicing asap to get ahead of the curve.
5. DO Establish Yourself as the Authority in Your Market
Many media outlets have sensationalized headlines and gotten the details of this settlement wrong. This gives you a chance to establish yourself as a local authority on the subject while building rapport and trust with area buyers and sellers. Write blog posts on the subject, share social media content, include this topic in your newsletter, and offer to be a guest on local news outlets to set the record straight.
The Bottom Line
Change is coming. You can take the changes kicking and screaming, or you can lean into the inevitable evolution of the industry. Start prepping your business for the new NAR settlement rules today and take advantage of the opportunities offered by this industry adjustment!
