“It needs to be seller directed,” Srivatsaa said of offers of buyer broker compensation. “All we are saying is that it actually puts a seller at a disadvantage if offers of compensation are actually advertised because it gives away the seller’s overall position, but if a seller wants the offer advertised, we are telling people they are free to do so as long as they comply with the settlement and local MLS rules.”
But Srivatsaa said one thing is for certain — the firm will not tolerate agents trying to sneak offers of buyer broker compensation into listings on the MLS.
“There will be no offers of compensation on the MLS either directly, indirectly, or hinting or shoving it in a random field — nothing whatsoever because that goes against the spirit of this entire settlement agreement,” Srivatsaa said.
NextHome CEO James Dwiggins makes a similar argument as Srivatsaa about advertising offers of compensation.
“If you’re in any other market than a strong buyer’s market, what would be the reason to put all your cards on the table and say, ‘We are going to provide cooperative compensation?’” Dwiggins said. “The way this needs to work in a true consumer-centric model is that there shouldn’t be any advertising of commissions or even concessions in advance of an offer, unless there is a really good reason to incentivize a buyer. You just have to say that your seller is willing to entertain any and all requests that are included in an offer.”
While Dwiggins is advocating for his agents to not share offers of buyer broker compensation with buyers ahead of an offer being submitted, Anthony Lamacchia, the broker-owner of Lamacchia Realty, has created a team within his firm to help listing agents handle the influx of inquiries he expects from buyer’s agents asking about the potential for compensation on a given listing.
“We have set up round-the-clock assistance for our agents, so when buyers’ agents inquire about what the commission is, they can inquire at a certain email address, and we have people around the clock that will respond and answer the agents’ questions,” Lamacchia said.
He also noted that like eXp Realty, his firm will not be engaging in cooperative compensation, allowing sellers to be in complete control of how much they offer in buyer broker compensation.
On the West Coast, this type of system is exactly what Gretchen Pearson, the broker-owner of Berkshire Hathaway Drysdale Properties, does not want to see.
“What we feel is the most egregious thing … is if you have an agent call me as the listing broker or agent and ask what the seller is offering, we believe that is even worse than what we had before, because that really creates a secret society and we believe that is far from the settlement,” Pearson said.
“There are some people today who are supporting that sharing of compensation offers via phone or email, and they are arguing that they want to find out if pursuing the listing is worth their clients’ time.”
Instead, what Pearson is instructing her agents to do is “what they’ve been doing for the past 30-plus years.”
“Just like today, when an agent calls and their buyer is qualified for $835,000, but the listing is priced at $850,000, they don’t use numbers, but they tell us that they are going to submit an offer that is a little bit below. And we typically tell them, ‘Write it up and submit.’ This allows our sellers to see all the offers and make a decision based on what works best for them,” Pearson said.
“We never tell them no or that they are wasting the seller’s time — 99.9% of the time, we always say we’ll see what our seller thinks about the offer. And sometimes it works out for the buyer and sometimes it doesn’t.”
With so many firms taking such different approaches to this issue, it is clear that as of early August, there is still no gold standard for sharing offers of buyer broker compensation outside of the MLS.
“I think the friction is going to happen because the entire industry won’t be aligned,” Srivatsaa said. “The hardest part of this is going to be getting all the players on the same page.”
