Written by Betsy Urbance
Reading Time: 3 min
REALTORS® are aware of just how competitive this industry is, but it should serve you well to keep these three words top of mind: Educate. Negotiate. Compete.
If you manage your real estate office, educate
- the licensees in your office about using written brokerage agreements for your company’s seller clients AND its buyer clients,
- and remind your licensees about the value they provide to their clients as they guide them through one of the most significant investments in their lives whether they are selling or buying a home,
- and remind them about the fact that not only will MLSs require written buyer agreements soon, but in Illinois, there is legislation pending to require written brokerage agreements for all transactions where a real estate licensee is involved,
- and remind your licensees about the different ways brokerage compensation might be paid.
We are monitoring developments related to the NAR Settlement and in light of the anticipated changes, we will be reviewing and very likely substantially revising all of our brokerage agreements. That will include listing agreements and buyer representation agreements, as well as related resources. Please stay tuned to our media channels for further updates.
NEGOTIATE
Negotiate with your company’s seller clients about what you will charge them for your valuable services.
Negotiate with your company’s buyer clients about what you charge buyers for your services and what options might be available for payment arrangements:
- Buyer client pays the buyer’s brokerage directly,
- Seller could pay the buyer’s brokerage,
- Seller’s brokerage could pay the buyer’s brokerage
- For now, that can happen through the MLS offer of compensation
- SOON, this could happen by OFF MLS negotiation
- If you are unsuccessful negotiating a satisfactory fee, remind the consumer they have options and are free to shop around for the service and compensation level that suits them
COMPETE
If you are the broker of your company, MAKE INDEPENDENT BUSINESS DECISIONS about your own company’s brokerage (not the franchise, but your company’s)
- List of services you will provide,
- Cost/benefit analysis to support what you charge for your services and what you might expect as a reasonable profit for your business,
- What your licensees need to charge for your company’s business,
- Manage your own business and refrain from collusion or boycotts with competitors to freeze out other types of brokerage businesses
- As long as brokerage companies meet all the regulatory requirements of the jurisdiction where they operate, they are free to make their independent business decisions on the scope, level and pricing for their services.
About the writer: Betsy Urbance is Illinois REALTORS® General Counsel and Vice President of Legal Services.
