With the new NAR settlement and all of the miscommunication around it, it’s no wonder that buyers are confused. We, as an industry, must do all we can to help educate the general public. Unfortunately, the unintended consequence of the ruling is that buyers now don’t know whether they should enlist a buyer’s agent when searching for a home.
I recently had a listing that received multiple offers. I had multiple unrepresented buyers call about the property who wanted to work directly with me, the listing agent, because they didn’t want to have to pay a buyer’s agent. I had already worked through the terms in the listing agreement with the seller and they were willing to pay a buyer’s agent.
We ended up getting a few offers, but the strongest two were from a represented buyer and an unrepresented buyer. As the listing agent, I stood to make considerably more money with an unrepresented buyer, as already outlined in my listing agreement with the seller. I recommended the seller go with the represented buyer. Why? There are multiple reasons.
First, the unrepresented buyer was a cash buyer, which may sound great, but anyone who’s been in the industry longer than a minute knows that a cash buyer has to be vetted thoroughly.
Second, the agent for the represented buyer was easy to communicate with and presented his clients’ offer professionally, which told me that the transaction would be more likely to close even if we ran into any hiccups. I could tell that the agent was professional and skilled enough to guide his buyers through the hiccups that are always going to come up in any transaction.
Lastly, the unrepresented buyer wasn’t able to clearly state what their offer was. On the question of what they wanted the purchase price to be, they said, “Whatever the seller wants.” On the question of when they could close, they answered, “Whenever the seller wants to close.” That raised huge red flags. Again, to an unseasoned agent, that may seem like the dream buyer, but what I heard, and my savvy clients heard, in those answers was a lack of clarity, indecisiveness, and a fickleness that made us nervous that they would back out if anything didn’t go their way during their contingency period.
There were some more details about their proof of funds that also made us doubt the viability of their offer, so my clients moved forward with the represented buyer at the end of the day, and we closed on time.
As professionals, we have to help spread the word about what the NAR settlement means. It doesn’t change anything except how we find out what and if the seller is willing to pay a buyer’s brokerage a commission. We all know that if a seller isn’t willing to pay, they will receive fewer showings and even fewer offers on their property, so it’s in their best interest to offer compensation. As buyer’s agents, we have to assure our clients that everything in the transaction is negotiable, and just like when a buyer may have to have closing costs covered, we need to be prepared to negotiate on their behalf to get commissions paid as well. Hopefully, the listing agent on the other side of the table has already done that for you. The worst outcome of this settlement is that buyers don’t seek out representation because they think it is going to cost them more, when in reality it may end up costing them the home they wanted.
Deborah Vahle is a Partner on the CityLiving Group mega team at Parks and has been involved with the STR world since 2016. She is a mom of 5 and is currently being educated by her children on all of the Taylor Swift albums and easter eggs.
