How Full Fee Agents Talk to Sellers About Buyer Broker Commissions

Congratulations!

You’ve made it through your first week in the post-NAR world of real estate.

Last week we covered how to discuss the Exclusive Buyer Representation Agreement with buyers. Today we’ll focus on how you can speak with your sellers about this change in a way that best upholds your fiduciary duties and respects their autonomy. 

We know you’re wondering: how can I preserve business as usual as much as possible? 

This is a natural response. Change is the mother of all fear, and fear is the most powerful driver of human behavior. This fear of change is causing agents to spend a tremendous amount of time and energy constructing the most effective arguments to persuade sellers that the status quo is in their best interest. 

But is it? In all cases? In all markets? Do we know that?

Almost all of the conversations we’re hearing are focused on telling clients what they should be thinking and feeling…

But that’s the exact opposite of Tactical Empathy, and it’s going to undermine the client’s trust in you instead of nurturing it.

So just as we did with buyers, we’re going to flip that script with our sellers. 

We’ll put our focus on the two pillars of Tactical Empathy: Removing yourself as a threat and Curiosity. 

It starts with asking our sellers what they’re thinking and feeling. 

That may sound like:

“In regards to an offer of buyer broker compensation: There have been some changes in the industry lately. You’ve probably heard or read something about the recent lawsuits and the NAR Settlement. You probably have a clear vision as to how this may have changed the real estate process.

Would you be opposed to walking me through your vision of this, whatever that may be?”

Just as with our buyers, our sellers may have a lot to say or very little. It’s unlikely that whatever they say will line up precisely with the realities of the environment. That’s not what’s important. 

What’s important is that you let them go first. 

Be prepared for a possible attack—or at least something you may instinctively perceive as an attack. As we discussed last week, they know you want something from them, which makes you a threat, and people often attack defensively.

Our sellers may enter the conversation with a very strong defensive position against the idea of offering buyer broker compensation. They may come into the conversation expecting that agents will be pushing for that. They may let you know their position, up front, in no uncertain terms. 

If that’s the case, instead of getting up in your own feelings, get curious. 

Remove yourself as a threat by labeling their feelings, whatever they may be. 

That could sound like:

“It sounds like you’re very happy about this change.”

“Saving up to around 3% on the sale of your home probably sounds very very attractive.”

“It seems like you are certain as to how you’d like to proceed in terms of buyer broker compensation.”

However, they may have no such position. They may be completely unclear as to what it all means. If so, label that:

“It sounds like the news of this settlement has left you very confused.”

When it’s clear that your seller feels understood, i.e., you’ve received a “that’s right” response, ask for permission to share your thoughts:

“Would it be a bad idea for me to boil this settlement down to its main point?”

You’ll probably get a “no”. Continue by presenting the bottom line of the NAR settlement:

“Here’s the main point:

Compensation is negotiable and should always be negotiated between agents and the clients they represent. 

In the past, sellers have negotiated—with their listing agent—one fee that was split between the two brokers on the transaction.

Now listing agents will negotiate their fee with their seller.

Buyers agents will negotiate their fee with their buyer.

Each client will have a signed agreement with their own agent.

Each client is responsible for paying their agent’s fee at the closing table.”

Then, let them respond. 

That response may land at any point on the spectrum from “That sounds perfect, so I’m only paying you” to “But shouldn’t I still offer to pay the buyer’s broker? Isn’t that going to be better for the sale?” and anything in between. 

Acknowledge their responses using Labels, Mirrors and Paraphrases.

Now is the point in the conversation where it is crucial to remind ourselves of the 2mm shift from leading to guiding.

Instead of explaining and convincing, we want to lay out the landscape for our client to consider.  

Self awareness is key. What is your underlying intention? Are you using the tools of Tactical Empathy as a weapon to drive your client where you want them to go? 

Or are you using the skills as they are truly intended—to listen, to fully understand the other person’s perspective, to articulate that understanding, and to guide them, using your trust-based influence, in the direction which best supports their goals?

Start by asking for permission to share your perspective:

“Would you be opposed to me walking you through the realities of the current environment?”

Once they give you permission to continue, insert some Accusations Audits before you start explaining. 

Why? Because the realities of the current environment include things that they are not necessarily going to like. That may sound something like:

“Given what I’ve just described about the settlement, what I’m about to say will probably make absolutely no sense at all.”

“It’s going to sound like I’m contradicting myself.”

“You’ll probably feel like agents are still reaching right into your pockets for more of your cash.”

Pause between each Accusations Audit, letting each one land. 

Then present this fact for them to consider:

“Sellers can still choose to offer compensation to the buyer’s broker.

You’ll have to decide if you want to make that offer or not.”

Listen closely to their response. Again, be prepared for a potential “attack.” Again, be prepared to respond with curiosity. Label their thoughts and feelings, whatever they may be. 

Ask for permission before you continue:

“Would you be opposed to me sharing a couple of things that you may want to consider as you make your decision?” 

If no, then continue laying out the landscape for them to consider. Present this slowly and clearly:

“One thing to consider is your competition: You might think of the offer of buyer broker compensation as you would any other marketing incentive.

You’ll have to decide, based on this market and this particular property, what incentives you feel you want or need to offer in order to achieve your goal. 

Would matching or exceeding what your competition is offering enhance your chances of success, or is it unnecessary?

Another thing to consider is how buyers will present their offers: Will a buyer adjust their offer in any way, based on whether or not they have to pay their agent out of pocket, and based on whether or not they’re able to finance that portion of the expense?

So you have to look at those 2 things, and decide if you view an offer of buyer broker compensation as a benefit or not.”

And here you stop talking and you let them think. 

It’s very likely that they will ask for your opinion. As always, keep the responsibility where it belongs by inspiring them, with a Calibrated Question, to think it through for themselves first:

“It sounds like you’re interested in my guidance on this. I will absolutely share all of my thoughts with you. First, would it be a terrible idea for you to let me know what you think the best course of action might be?”

They may have a clear determination. They may be at a complete loss. Most sellers will probably request some specific input as they navigate their way through these uncharted waters. 

After you’ve solicited their thoughts, you can share whatever pertinent information they need in order to make the best decision. 

At Performance Coaching, our approach to this situation is very bottom line…

Listing agents will negotiate their fee with their seller. Buyers agents will negotiate their fee with their buyer. Each client is responsible for paying their agent’s fee at the closing table.

For our sellers, an offer of buyer broker compensation should be considered as a strategic marketing incentive. As with any other marketing incentive, whether or not your seller chooses to utilize it should depend upon the market of the moment as well as their particular circumstances. 

It is also a valuable tool to utilize in terms of structuring a purchase in a way that can allow a buyer to utilize financing and, as such, may be valuable in getting to the best net result for your seller. 

Acting as their trusted advisor, your market expertise will be extremely valuable to your sellers during this time of transition. 

What are you seeing in the market in terms of their competition? What are you seeing in terms of how buyers are making offers? Share what you’re seeing in real time as this change unfolds. 

Again, this is what the tools of Tactical Empathy are made for: Collaborating and working things out, particularly when we don’t have all of the answers.

Disclaimer: We are all working in different markets and brokerages with different processes and requirements.

The specific documents we deal with will dictate, to some extent, how we’ll need to guide our clients through this process. Some of us have listing agreements that contain fields for buyer broker compensation which need to be filled in with a specific value (0% - X%). Some of us have listing agreements which have no mention of buyer broker compensation, but there are optional, addendum agreements which outline a selection of non-binding, potential options for buyer broker compensation. 

We value everyone’s collaboration in this group, and thank each of you for so generously sharing what you’re dealing with in your markets.

Our guidance to you here is on the use of Tactical Empathy toward the goal of growing a repeat and referral business as trusted advisors to your clients. 

We’re here to help you cultivate relationships in the most powerful way possible. 

As always, what we are offering you here is NOT a script. It is a framework for a conversation and sample language compatible with the tools of Tactical Empathy. If you have any concerns about suggested language in relation to this industry change, check with your brokerage or your legal department.

And if you want to truly understand and master Tactical Empathy so you can always be a full fee agent, check out our new Tactical Empathy training programs—including an upcoming bootcamp with me!