Different Teams with Common Goals? In Real Estate does everyone win?

Real Estate is a unique business in many ways. One of those is that, in most cases, each side, buying and selling, has a common goal: closing the transaction.

While not on the same team, both sides are seeking the same objective. And unlike sport or games, lawsuits or other situations in our lives where there are two sides, or two teams, the goal (in my opinion and how I do business) doesn't have to leave a winner and a loser. When done right, everyone, in their own way, wins. At least that's how I see it and conduct my business. Let's discuss!

In most all cases each side (whether represented or not) has a goal of it's own. The seller, for whatever their reason or need is, wants to sell. The buyer, investor, owner occupant, whatever, wants to buy.

At some point those sides have come together, drawn up an agreement with terms satisfactory to both, and have begun the process of moving foward towards a closing. As a matter of fact, for me, once I've come to terms with another broker I always end the email or message that does so with "I look forward to working with you".

I want to convey this message because I do feel that way and, for a couple weeks or a couple months, I will be working with them to try and achieve our common goal. I want them to know that's how I see it from the beginning.

That isn't to say I don't work as hard as I can for my client. I most certainly do. It's my job to get my clients the best terms, price, repair negotiations and every part of the deal that I can. But it's also my job to do my best to get us to the closing table.

Do we sometimes not reach that goal? Sure, it happens from time to time. Do we sometimes have to go head-to-head with the other side, pushing as hard as I can for my clients? Yep. All the time. But knowing how hard to push and when, how to advise my client as to what is best, where to dig in and where to give a little bit, that's also part of what I do for my side.

And, from time-to-time, I deal with other brokers who obviously don't see it that way, often pushing so hard they destroy a deal that otherwise might have been at least salvagable. Sometimes pushing so hard that our side, myself and my clients, completely stiffen up and become unbendable when there otherwise might have had a little give. These folks don't seem to understand that negotiating is most often a give & take. And they often seem to just be seeking something to feel victorious about - and that's fine if that's how they want to operate, but more than three decades have taught me that this attitude works less often than not. My take and experience, feel free to disagree.

I know a lot of people see negotiating as a time to show how hard knuckled they can be, but truth is in many situations this is the way to never get what you want, not the other way around. Not that there aren't times for this, and I'm happy to do it when the time comes, but most often working things out is nuance and dancing, not headbutting and fighting. This isn't court. We aren't fighting each other, again, we are trying to arrive at our common goal. And once we reach that goal and walk away from the closing table, we both have effectively won.

Negotiable commissions?

When the news broke this past spring about the lawsuit out West and the national changes to how some elements of real estate were going to be done as a result, I wondered like everyone else what this might mean for my business as well as the industry as a whole.

The media loved the story. Their take on it seemed to be that real estate brokerage as we've known it was about to be turned completely on its' head. That home prices were about to drop, that the way we've done things for years was all going out the window.

Before I had an opportunity to see what it really meant, what the suit and ruling actually meant, I won't lie, I worried.

I've been in this industry so long that I wasn't sure where everything would land or how much I'd have to relearn.

Turns out (at least so far) not much. And in North Carolina in particular, even less than in some states.

I'm not going to go into much detail here, that's not the point of this post which is more about the commission rate part, but in a nutshell Realtors/Agents/Brokers have to have a signed "Buyers Agency Agreement" before showing any homes to perspective buyer clients & the MLS can no longer indicate what commission (if any) is offered to buyers agents by sellers. There may be a few more small changes dealing with access to the MLS by those licensees that aren't members of the Realtors Association (a private, non-goverment group) but really that's about it.

AGENCY AGREEMENTS

I'll only touch on this for this post. The North Carolina Real Estate Commission has required these here in our state for decades. We didn't have to get the buyers go sign until at least before presenting an offer, but we could show homes without one - though that, in practise, isn't what most did anyway. They got them signed at the get go. So no real change here.

COMMISSIONS & COMMISSION RATES

The plaintiffs in the case argued that brokerages colluded to keep commissions 'inflated' and high. They implied or stated that commissions weren't negotiable. Maybe that was the case somewhere and many brokerages certainly restricted their agents & brokers from negotiating commissions that their particular company had set - but that wasn't anything mandated by either the Real Estate Commission (government) or the Realtors Association (private memebership association).

While there were some standard rates, agents and brokers and brokerages have always had the ability to charge their clients whatever those chose to.

SOME brokerages will likey have a hard time with this. They have been unbendable with their rates, but many many many others have been easily negotiable for years. For many years I've seen properties listed with all sorts of different rates.

Personally my rates have always been flexible. For the past 10 years I've worked from home, so my overhead is quite low. I don't have, and pay, transaction coordinators or assistants, etc. I charge what I feel is fair and worthwhile and worthy of my experience, but it's not been, for years, what many have considered the "standard" rate. I've advertised this for many years as one of the selling points with choosing my services: more experience than most and lower commissions than many.

MLS AND COMMISSIONS

One major change, and somehow this will be worked out, is that agencies and brokers can't post  anywhere on the MLS how much commissions the seller is offering buyers agents, if they are offering a commission at all. So there will be a bit more leg for for us brokers, and we'll have to communicate those offerings in a different way...but that's it.

In the end, for me and for many others, these changes likely won't change much in how we work and operate. The lawyers for the plaintiffs argued and the media amplified that this would somehow lower home prices, but my experience and opinion is prices won't be affected by this at all. I don't believe that if sellers are able to negotiate lower commissions to list their properties, and buyer agents are offered lower commissions (again, if any) from sellers, that they'll lower their price as a result. I think they'll happily pocket that savings from the sale...at least that's what I've seen in the past.

Anyway, my two cents. Come August 1st and after we'll see.