Holy Sh*t Commission in the MLS are Going Away

Tech with Ty.

🤖 [T]echnology: Holy Sh*t

🎓 [E]ducation/Entertainment: Holy Sh*t Commission in the MLS are Going Away

💪[C]oaching: Words of Wisdom

📹 [H]ow To: Show your Value

[T]echnology:

In just over a year, we’ve gone from AI videos that look like this: ⬇️⬇️

To AI videos that look like this: ⬇️⬇️

You may be thinking, “I can still tell the difference.”

No, you can’t tell the difference. Not on all of them.

If you were scrolling Facebook and someone posted a video of one of the AI animal clips or drone-like landscapes, you wouldn’t think twice. ❌

And this is just the beginning. Much like when ChatGPT was first released, this is one of those “Holy Sh*t” moments. 😮
 

AI is learning at lightning speed, and the reason this tool is not available to the public yet is because they’re waiting until they can address the potential of misuse.

On the positive side, Imagine the amount of B-Roll footage you could create with a few simple sentences. Imagine integrating property walk-through videos with an AI editor that you could prompt with sentences like, “Speed up transitions between rooms, and focus on the kitchen and bathrooms.” As if there wasn’t enough evidence to start doing videos 4-5 years ago. When you can fully edit a video with a sentence, there is absolutely ZERO excuse...Your clients and consumers deserve it. If you can’t do it, or don’t want to learn how to do it. HIRE SOMEONE! 💰

[E]ducation:

This will be a long section, but it is a must-read. 🚨🚨

Last week the DOJ gave us another “Holy Sh*t” moment.
 

Affirming what they already implied in an earlier memo, the DOJ suggested that the MLS Pin settlement could “prohibit sellers from making commission offers to buyer brokers at all.”
 

The DOJ hates that commission rates are still 5-6% because they believe they should be lower due to technology and the internet. Obviously, they think we are glorified door openers 🚪 and thus should be paid hourly, as they suggest in the statement of interest. 
 

"If buyers set the compensation for their own brokers directly, some buyer brokers might choose to offer flat fees or hourly rates in lieu of percentage commissions, since the amount of time and effort required by a buyer broker has a weak correlation, if any, to the ultimate sales price of the house." - This type of model already made headline news as well.
 

However, the DOJ said this change would not force buyers to pay those commissions out of pocket. 💰

"While some buyers might choose to pay their buyer brokers out of pocket, other buyers might request in an offer that the seller pay a specified amount to the buyer broker from the proceeds of the home sale."
 

How?
 

Please explain to me how a VA buyer (who cannot pay their agent’s commission) is supposed to have adequate representation if the seller is unwilling to pay a co-op compensation.
 

Maybe they plan to change that?
 

They seemingly have thought this through thoroughly. Their statement of interest is 33 pages but, ironically, leaves this out. Hopefully, the wheels for this are in motion.
 

I also found it ironic that the DOJ referenced Rob Hahn (Notorious R.O.B.) on page 21:
 

“You do realize under this system (of the seller paying the buyer’s agent directly inside the contract) you do realize a closing statement at a title company or an escrow company looks 100% identical as it does today. With both commissions on the seller side. Nothing changes. The only thing that changes is the number that shows up for the buyer’s agent in that closing statement was negotiated between the buyer directly and the buyer’s agent and had nothing to do with the seller or the listing agent. That’s the one thing that’s different.”

So, the DOJ wants us to negotiate compensation in the contract. Got it.
 

This goes against everything we’ve been taught and how we’ve done business for 75+ years, but change is coming. 👀👀

As I’ve said before, get your buyer broker agreements ready. Commissions in the MLS are apparently going away.

[C]oaching: 

Words of wisdom from Glenda Baker:

I saw this the same morning as the DOJ statement and immediately thought to myself:  

If your broker isn’t prepping you for the change that is coming, you should ask why. 🤔🤔

Unfortunately, unless your broker is keeping you in the loop or you’re reading this. Most agents have no idea WTF is actually going on. If you know of an agent that needs to be kept in the loop, send them HERE!

[H]ow To:

So if the DOJ thinks you are just glorified door openers, what do potential clients think? With all the changes occurring, you are going to start seeing Buyer Agency Agreements becoming mandatory. Some agents have already been requiring these, so this isn’t really something new. However, when people are told to sign any sort of agreement, they get cold feet. This is where selling yourself and the assets you bring really counts. 💯

You have to show potential clients that what you offer is more than a glorified door opener. How do you do that? ⬇️⬇️
 

In your initial consultation with your buyers guide. 

It is your lucky day, I'm going to show you exactly what we provide to each of our agents via their own guide.

This is what you need to include...

Present just how complex the buying process can be. This flowchart is the perfect way to show your clients that there are SO MANY steps when it comes to buying a home…and you take care of each of them. 

Provide them with the right tools needed to figure out their wants.

Eliminate any confusion. Remember, you may know the basic terms but your client may be seeing these words for the first time.

Go in depth with each step in the home buying process.

Give them reasonable expectations financially.

We’ve discussed in previous Tech with Ty’s that showcasing your value is extremely important. With all the uncertainty surrounding our industry right now, it is crucial to have yourself prepared and organized.