In the wake of Burnett v. NAR, much uncertainty has gripped the industry. Both agents and those charged with training them haven’t been entirely sure how to adapt to the changes, but luckily, the process has already begun. And according to some, it’s possible to increase your efficacy in the face of the change, instead of allowing it to paralyze you with fear.
“We had done…roughly six months of trainings at the beginning of the year through the summer, and then again in August revolving around the NAR settlement. And every single one of those trainings was about articulating your value and then negotiating your fee that you choose to charge with an agent,” says Ashley Donat, head of coaching at Compass. “We have roughly 35,000 agents at Compass, and we had over 11,000 agents from all of those trainings. It was something that we did very, very, very heavily, even at the end of last year into the beginning of this year, and then into August.”
Compass isn’t the only company adapting to fit with the post-settlement world.
“Going into the negotiations, we had very specific meetings tailored to conversations about getting buyers to sign the buyer’s agreement, as well as working with sellers to explain how things have changed for both of them,” says Karen Arenson, licensed partner/owner, managing broker of Engel & Völkers Chicago. “And a lot of it was about how to demonstrate your value. We also put together a bunch of materials to help us spell it out for our clients in a more robust manner than has been done in the past—not more thorough, just more robust. As far as mentoring, we’ve done roundtables where people could come in and role-play. We’ve also done some video role-play that we’ve distributed to our group, and every Thursday I have classes, so we’ve tied it into those.”
The new classes offered by Arenson appear to have made their mark.
“On our list side, our listing agents are actually getting more compensation because they’re demonstrating the fact that they can focus on their value there. And, interestingly, for our sellers, 72% of them are choosing to compensate the buyers at essentially the same amount, on average, as they were prior,” she says. “Since August, that’s with 136 transactions.”
RISMedia’s own in-depth study of real estate compensation found that offers of so-called “cooperative compensation” from the sell-side to the buyer agent had fallen after the settlement—though mostly among certain subsets of agents.
While it’s possible for REALTORS® to dial in their value more thoroughly in the post-settlement world, Arenson notes that the increased bureaucracy has been something they’ve had to manage.
“Buyer representation is massively important, in that it can’t be one sided. And so now with the shift in the paperwork…there’s just more of it and it’s not familiar. Each document has changed, and each state’s documents have changed to match the needs and requirements of the settlement. It’s not more paperwork, it’s just that it’s different. It’s new,” she says.
“Many of the forms that have existed have not been shifted for and majorly altered well since probably the late ‘80s or early ‘90s because there haven’t been major seismic shifts in our industry,” adds Arenson, who goes on to explain that the last major shift that took place was the creation of buyer agency. “Prior to that, it used to be buyer beware, and actually, buyer agency was created to protect the buyers. The sellers had all of the representation. And this has been an interesting shift on that.”
Story and focus
A major theme for both trainers was value proposition, coupled with rapport building. This was the mechanism by which they felt that agents could most effectively communicate their offerings to potential clients.
“Earlier this year we did something called Back to Basics, and it was defining your value proposition,” says Donat. “The way we support agents in doing that from a training perspective is understanding their value as an individual and then understanding how that value aligns with the ‘Compass value’ through the technology tools and support you get. It’s the combination of both that make our agents the most successful agents, because they’ve been given the tools to understand their unique value and then marry it with the ‘Compass value.’”
Arenson goes on to explain that “there’s definitely more on rapport. It’s hard to build rapport with a brand-new buyer when they have to sign something prior to crossing a threshold.”
“But that’s what we focused on—how can you build that rapport and demonstrate value quickly. Then, how can you maintain that and actually improve upon that as it goes forward.”
Arenson notes that one way to provide clients with a 500-foot overview as to how you operate your business, and move closer to a sale through building rapport and value, centers around utilizing some of what Zillow has implemented.
“That’s been different with the sellers and with the buyers. It’s explaining that there’s no dating period, that we have to sign a document prior to my showing you any property. And (tell the client), ‘I know you don’t know me well, but you need to trust me, and we need to sign this.’ And so that was a major hurdle upfront. Most brokerages have now followed the Zillow example of creating a form that does allow for a shorter term commitment in order to help overcome that hurdle where the buyers are only agreeing to either a certain property or to a shorter amount of time, and then they would reup for a longer period of time if the rapport has been built.”
Donat also made note of the fact that some difficulty has been injected into the process for buy-side agents.
“I think in order to build trust with someone, you have to know what you’re talking about,” she says. “You have to be able to deliver that information with confidence and then answer questions they have. Purchasing a home—if we’re speaking specifically on the buy-side here—is a very complex process, and there are not a lot of resources out there for buyers to really understand what that looks like to them regionally, because purchasing a home looks different—the actual transaction and every different market. Sometimes attorneys are involved, sometimes they aren’t. What we focus on with our agents, and then they focus on (with their clients), (is) setting up really, really great buyer consultations and really educating (clients) on the process of purchasing a home where they can add value.”
Donat feels that educating clients is a key piece in the post-NAR-settlement landscape in order to deliver value through authenticity and professionalism.
“When it comes to increasing trust, our training focuses heavily on education, but also making sure our clients feel heard and understood. So all of our training revolves around leading with curiosity, asking open-ended questions, uncovering a client’s hopes, fears, dreams, aspirations and everything as it revolves around purchasing a home so that our agents can help build that trust and navigate them through that next step,” she says.
The trainings offered by both Donat and Arenson have taken various forms, with Engel and Völkers electing to train agents with more frequent initiatives, while Compass uses a multi-tiered system to move agents at different stages of their careers to different milestones.
“When it comes to our coaching team and how we train agents, we actually train different segments of agents,” explains Donat. “We have our build segments, agents newer to the business who are building their career, then we’ve got agents who are maintaining, our seasoned agents who have been in the business for quite some time and want more training and resources on how to create more work-life balance, save time and use technology. Then we’ve got our grow side, which are agents who are scaling and growing their business—and finally, we’ve got top producers.”
Arenson describes the “thematic” progression of training at Engel & Völkers, with listings being the main focus in the first quarter.
“That was a big piece…as things had changed in November, talking about the decoupling of commissions, etc., and expressing value and explaining it and demonstrating it,” she says. “Then our third quarter is on promoting yourselves…we shifted the entire focus for the third quarter to promoting yourselves and your value, how to do so, how to explain it better and ways to demonstrate it differently, etc. The fourth quarter is all on business planning and building your business to fit your clients.”
When asked about common stumbling blocks for newer agents, the trainers had a few different perspectives to offer.
According to Donat, “The training for a brand-new agent might be very tactical, whereas training for a more experienced agent might be more about elevating the experience and how to increase their level of customer service. But the newer-to-the-business training is very focused on the tactical, transactional components.”
Arenson alludes to the fact that newer agents aren’t always comfortable in certain scenarios, something she’s focused on in a roundtable format. “We’ll run through different scenarios, like they met (the client) at an open house and they want to work with them or (were) referred by somebody they’ve never met or a good friend of theirs who’s never worked with them before but has known them forever. We’ll go through different scenarios and how to make that conversation more comfortable.”
