YesTalk-241 - What to Do When They Cut Your Buyer-Side Commission

Welcome to Kevin Ward's Yes Talk for Realtors. This is Kevin Ward. If you are a buyer's agent or you are working with buyers in this market. I know, I know it's getting incredibly frustrating, but today I got some help for you on what to do with when the listing or the listing agent is trying to cut your buyer side commission. And so I got a question from an agent about what do you do when the buyer's agent. I made an offer on a property that was offering 2% commission to the buyer's agent. And I sent the offer asking for to the commission to increase it to two and a half percent. And she didn't want to do it, the agent didn't want to do it or whatever. And it is, I'm like, we're making above offer price above price, above list price offer. We're giving this, the seller a free month living in the house after closing. But she's being stubborn and she only wants to do 2% even though it's a great offer. Okay, so what do you do in that case? And this is a dilemma that we're running into more and more in this market. And this is a dilemma that comes in a seller's market. And it comes in a time when buyer agency is under assault. Now, you got to understand that buyer's agency right now is under assault. You've got standing lawsuits, you've got Zillow that is working very hard to get to basically eliminate buyers agents from the picture so that that buyers are coming directly to them and then they can use their people. That you got listing agents who are trying to get rid of you by cutting your commissions. And more and more buyers are coming directly to the listing agent. Plus, just the fact is the nature of the market and the pressures of the market right now is that there's no low inventory. And so I don't need to make the listing attractive to the buyer's agent because it's the only, it's the only game in town. And I know we're going to have multiple offers and some agent is going to be willing to take that and so forth. So this is just the problem that is going to become is more and more pressing right now on buyer's age. And if you're working with a lot of buyers, you are feeling this. So in this video, I'm going to give you five things to do about it. Okay? Five things to do about it. Part of its prevention and then part of it is cure. All right, so first, prevention. How do I deal with this, whenever the listing agent or the seller are wanting to cut the buyer side commission, number one, get more listings. Now, this is where I built my business, and this is what I've been coaching my entire career, is when you have listings, you control the market, you control the inventory, you have control, and if you don't, then you are at the mercy of others. Okay? There's a whole lot of reasons that getting listings is more powerful than having buyers. But for this conversation, just understand that that the easiest fix or the most powerful fix is get the listings and then you're in control of the commission, you negotiate with the seller, and then whatever you make, whatever you pay to the buyer, it's up to you. All right? Or up to you and the buyer. So, number one, get more listings. That's preventative. How do you stay out of the situation? Number two, let's say, okay, I have listings, but I also am working with this buyer. What do I do? Because that's not helpful if I have a buyer. Well, here's what's helpful, number two. So first step with buyer is make sure you are in a buyer representation agreement with the commission from the for the selling site for working with the buyer, with the commission both addressed and agreed. Which means when you sit down with a buyer, you should always do a buyer consultation and you should always be in a buyer, broker or buyer representation agreement. And the commission has got to be talked about. So here's the commission. It's 3%, 2.5%, whatever it is that you charge. I have coaching members that literally charge, start at 3% and they'll, if it's a smaller price point, they'll go to three and a half percent and even 4%. Now, they do that because one, they have a great level of skill and two, because they choose who they work with and they don't work with everybody. So they don't work with every buyer. And if the buyer doesn't see the value in them, in their buyer consultation, they're able to demonstrate value. So don't go into this mind talk that says, well, they're not going to do this. No, they will do it, but you have to be good enough to know how to negotiate and get it. So you have to be willing to have this conversation with a buyer. And before you start working with them, get a buyer broker agreement signed, and in it the commission is addressed and agreed to. Now, let's just say it's 3% that you agree. It's 3% and you let them know the good news. Is for you, it typically costs you nothing because the seller normally pays the commission to the selling agent, which is me. So typically it's not going to cost you anything. Now, occasionally you have a seller who's not willing to pay the full commission. And so in that case, you're going to pick up the gap. You'll be responsible for that, and we'll make sure that we're able to negotiate that and get that done at closing. So there's no money out of your pocket except out of your closing costs that it takes to make the deal done. And you can also negotiate it in the offer. We'll get to that in a second. So number two is you've got to address this conversation upfront with your buyer so that they understand and you let them know. I will let you know. Whenever we're looking at homes, I'll let you know if there's a house we're going to look at where the eight where the commission is substandard. All right, Number three, to do that, you always check the MLS for the selling agent commission in the MLS because it's always published how much is going to be paid to the buyer's agent. Okay. You always want to look and notice up front before I go show the property, before I, you know, before I even give the property to the buyer, I want to know what the issues are up front. So the more due diligence you do for yourself and what's going on, I look at it and I'm looking at all the listings before I send it even to the buyer. I'm like, okay, I'm looking at what's the commission? Okay, I'm look as I'm looking at all the property information and what's the showing instructions and all that. I also notice, hey, that's 3%. Good. 3%. Good. 3%. Two and a half percent. 2%, 1%. Okay, we have an issue, right? Whatever it is, that makes it an issue for you, Two and a half percent may be an issue for you. Okay. Whatever it is, that's an issue for you. You want to know before, earlier rather than later so you can address it up front. So, you know. So number one, address commission with the buyer in the buyer broker agreement. Number two, always check the MLS for the commission amount that is going to being offered to the buyer's agent. And then number three, if it is reduced, address it with the listing agent before you show the property. Okay. One, you should always talk to the listing agent before you show a property. I know that sometimes buyers Agent. Listing agents don't want to. They're not good communicators. They don't want to talk. You just text them, say, hey, I'm getting ready to show a property. Got a buyer that's interested in a property at this. Before I show it, I need to make sure. I want to make sure still available and find out what's up with it. So I always call them. I call them. If they don't answer, then I send them that text. Please give me a call so that we can set the. So I can know all this information before I show it. So it basically implies if you don't respond to me, we're not going to look at the property. So they will get back with you. All right? And they, and they should always get back with you. It's just good ethics, good skill, good etiquette. So. And if they don't text them and go to higher levels of, I got to get in touch with this person. So I'm going to call them and say, hey, I just want to make sure the property's still available. Find out if you have any offers on it, if so, what kind, you know, what's happening, where are you in the process, how many offers you have and so forth. And I also noticed, and this, I want to be in a live conversation with them, is I noticed that the commission that is offered, being offered to the buyer's agent here is only 2%. So tell me about that. Now, this is the script. So tell me about that. Because what I want to listen to, I want to hear what the listing agent's perspective is on this. If it's the listing agent who is basically cutting my commission, and they go like, I'm charging 6% to the seller and I'm going to only give 2% to the buyer's agent, I'm going to keep 4% for myself. Well, then it's the listing agent that is probably my, my adversary here, or it may be. They go like, I know, I know. I mean, I. My seller, they're just cheap and they're wanting to. They only the off there. I'm only getting 4%. And so I'm having to give 2% to the buyer's agent so that I can get 2% for me. And it's just, you know, blah, blah, blah. So I want to know what is the. Is the other agent, Is the listing agent on my side or they not on my side? I want to know where this conversation needs to go. And now I'm going to address it. Based on that. So you always address it before showing. Now, this is where you decide what is your business policy or what is your standard when you do this? So look, here's the deal. My sellers, my buyers, know that they're in the buyer broker agreement. They're paying me 3. I'm getting paid 3% commission. And they know that if the, the seller is not willing to pay it all, then they're going to pay the gap. The problem for you and me is that means my buyer is less likely to want to make an offer on this property. And because they've got to be paying an extra 1% to me. Does that make sense? And they're going, yep, that makes sense. Now I'm going to listen. What's the listing agent going to say? I want to know, because this is all negotiation, my friend. This is where you win in real estate, is your ability to negotiate, your ability to negotiate this conversation, this transaction. All right, so then if. Let's just say they go like, I know, I know, and I just can't get them to pay more. So let me ask you this. If we bring an offer and the offer is strong enough, what I'm going to do is I'm going to, and I'll have my conversation with the buyers. If we bring an offer in, that's an extra 1% above what we would otherwise negotiate and stipulate that 1% additional commission goes to the buyer's broker, the selling broker, which means we're getting 3% instead of the 2%. Do you think your seller would be willing to do it that way? Basically, we're saying we'll raise the sales price to cover that extra 1%. Now, why would we do that? Well, it's easier for your buyer. Typically, buyers, if a buyer has to pay you the commission, any amount of the commission, they're having to pay it out of pocket. A seller is not having to pay out of pocket. They're paying out of the proceeds of the sale. So it's typically less painful emotionally for the seller to pay it than it is for the buyer to actually see that I am taking money out of my bank account, money out of my. Adding money into my closing costs, my hard costs out of pocket, all are increased by 1% of the sales price, which can be significant On a, you know, on a $1 million house, you're talking an extra $10,000. On a $500,000 house, you're talking an extra$5,000. It's a significant amount of money. And so then number five is if the seller is not willing to just pay it outright, then add it to the offer, meaning the seller pays it and will increase that we stipulated in the agreement. Check with your broker or your attorney on where in your contract. In the offer you stipulate that the selling agent commission is going to be 3% of the sales price. And if you necessary, then you're going to increase the price, the offer price, to cover that extra 1% of the commission or 1 1/2 or whatever the gap is between what your standard commission that you take is as the buyer's agent and what the seller is is offering. Guys, here's the deal. The stronger you get at negotiating, period, the stronger you are negotiating for your own client, the stronger you are at negotiating for your own value. And when you do that, it's ethical. What I'm telling you to do is a way that is ethical. It's honest, it's fair, it's appropriate, it's professional. Because you have value when you know what you are doing and you're actually able to represent your buyer and get them a better result. Help them get better terms and and prices because you know how to negotiate, how to present, and how to get an offer accepted. And in this market, that, my friend, is gold. So what are you doing? How are you addressing this issue? Please put a comment in below. If you've got other ideas or things you're doing that's working, that is helping you get more commission or get your full commission, please post it down below. Thanks and I'll see you on the next video.

Hey there, it's Kevin. I hope you enjoyed today's podcast. Are you tired of getting no after no when you're out there trying to get listings and trying to inspire sellers to say yes to you? Then I'd like to invite you to download a free copy of my no BS listing presentation. This presentation will guide you through exactly what to say that will have motivated sellers saying yes to you over and over again. Stop getting stumped with skeptical seller objections or the famous we need to sleep on it. Eliminate the resistance and have sellers ready to hire you and give you the listing before you even finish your presentation. To get a complimentary copy of my proven listing presentation, go to yes masters.com forward/download again. That's yes masters.com download to download your free copy today.

Sam.