Insights and opinions to cut through the commission lawsuit noise and find your voice

The real estate industry is experiencing transformative shifts in the face of the commission lawsuits, seeing buyer agents under increasing scrutiny to articulate their value proposition to potential clients.

While seller agents’ commission-earning activities are more straightforward, the efforts of buyer agents are often elusive, especially in the context of commission disputes. Facing increased scepticism from sellers, buyer agents must work diligently to showcase their value and prove their worth.

To truly set themselves apart, savvy buyer agents can transform their value proposition into a powerful tool to address any objections clients may have. It is instrumental in highlighting the specific benefits and services agents offer.

Express your values

Essentially, a value proposition is a concise statement that communicates why a client should choose a particular buyer agent’s services. It comprises four essential components that collectively build a compelling case for the agent’s value:

• Prioritize needs: Begin by recognizing the fundamental challenges potential clients may encounter in the buying or selling process.

• Create a plan: Follow up by identifying how your services will address your client’s anticipated issues.

• Highlight the advantages: Detail how special your services are and show ways you will save your clients time, effort, and money.

• A risk-free commitment: Share specific ways your clients are protected when working with you, such as an “easy out” policy whereby they can cancel their agreement or a guarantee to resell their home at no charge within a specific period of time if they are unhappy with their purchase.

Know you state

Recognizing that real estate regulations vary across states, a tailored approach to the value proposition may be necessary to align with local rules and practices. Agents should adapt and enhance their proposition’s components based on their personal or their team’s benefits. This ensures the value proposition resonates with the specific needs of clients and the intricacies of the local real estate market.

Additionally, the value proposition sets clear expectations for potential buyers, emphasizing a commitment to providing enough time for clients to ask relevant questions and gain an understanding of the value being offered. The culmination invites clients to sign a representation agreement, formalizing the relationship.

With client expectations in constant flux, agents must be adaptable and proactively show their value.

Three expert perspectives in the buyer commissions conversation

Grant Clayton, founder and CEO of 1 Percent Lists, advocates for a shift in the real estate industry’s mindset. He emphasizes the need to prioritize client interests over agent debates. Clayton’s brokerage has already challenged the traditional commission model, anticipating the changes seen in recent lawsuits. In an era where the industry faces legal scrutiny and increasing competition, Clayton urges real estate professionals to focus on delivering value to clients through exceptional service and competitive pricing, rather than maintaining the status quo.

Industry leaders, including Joe Rath from Redfin, Russ Cofano of Collabra, Ed Zorn from CRMLS, and James Dwiggins, CEO of NextHome, suggest that a new compensation model for commercial deals could influence how residential commissions are negotiated. Russ Cofano, CEO of Collabra Technology, sees this shift as an opportunity to address a current issue where less-experienced buyer’s agents receive the same compensation as more skilled agents. By negotiating compensation upfront with buyers, high-value agents can advocate for appropriate compensation, improving the fairness of the system.

Carl Medford, CEO of The Medford Team says agents who develop a strong value proposition and a personalized Buyer Bill of Rights not only justify their commission but also establish themselves as trusted partners in the intricate process of buying or selling a home. Creating a tailored Buyer Bill of Rights based on the agent or brokerage’s unique business model is an effective strategy, serving as a tangible representation of commitments and services for clients while reinforcing the agent’s dedication to fulfilling their real estate dreams.