If there is one word that summarizes the hoped-for outcome of all the buyer commission lawsuits that have roiled the residential real estate industry over the recent past year, it has to be transparency.
After the now-famous Burnett court decision and subsequent multi-million-dollar settlements from major brokerages and the National Association of REALTORS®, how and how much buyer agents will be compensated has changed. Whether it’s for the better will be determined in the future, but for Real Estate Webmasters (REW) CEO Morgan Carey, being proactive in the present is crucial.
As such, REW has created a new feature for real estate websites that allows agents and brokers to display their compensation for their own listings. It was developed in response to changes in the buyer agent landscape and the inability to showcase buyer commission in the MLS.
The feature is currently being beta tested by some brokerages and will be available to all customers on REW’s Renaissance platform after the testing period. Carey believes the feature will revolutionize real estate websites by providing transparency around listing compensation, attracting more buyers and facilitating conversations about fees.
“In the backend, we have a new tool that allows our customers (team leaders/brokerages) to select their specific listings by offers, team leader or agent, and they can then set (by dollar or %) an estimated buyer agent compensation,” he says. “This will be huge as it solves the problem of buyers’ agents having to call on every single listing and ask/negotiate a buyer’s commission as a portion of seller agent commission.
“For consumers, they can offer with confidence on a listing knowing they won’t have to find an alternative source of funds above and beyond the proceeds of the sale to pay a buyer commission separately.”
Carey said the genesis of the new feature was partially from a phone call he had recently.
“I was on a call with Gary Ashton (CEO/owner of The Ashton Real Estate Group of RE/MAX Advantage in Nashville, Tennessee), and he was like, ‘I don’t know how we’re going to be able to showcase the buyer commission now that they’re not in the MLS,’” he says. “And I basically said, ‘I can do that for you.’ It’s not difficult. We already have his listings. We already have a feature that allows them to enhance their listings, add other photos, and do other stuff. So really, I thought to make an extension of that would be pretty easy and add another field that allows them for their own listings only to display the compensation.”
Next came a few rounds of tinkering and talking through it, as different listings can have different compensation structures.
“We went through a couple of iterations,” notes Carey. “The first was like, you can change the comp on a per-listing basis, but what if it’s a different kind of compensation? So we needed to change the labels as well. Now we’re at a point where it’s completely customizable so they can stay in compliance as well as customize the language that they use for the compensation itself. All of that is unique and different because there isn’t a vendor out there who offers this.
It will be available to all customers on REW’s Renaissance platform. After the beta testing period, which will be over in about 30 days, all customers on Renaissance will automatically get it.”
Current REW clients are aware of the new development, or can become aware via a discussion group with screenshots at rew.com/forums.
Carey explained the significance of the new feature, especially in light of industry changes from results of the commission lawsuits.
“The ability to understand and communicate compensation offers to their buyers is no longer available in a sort of shared setting, and so what we are doing is making that available,” he says. “For companies who are going to use this, the huge advantage is they will become known as the transparent brokerage from a compensation perspective. We don’t know how often this is going to come up with consumers, sellers and buyers, but we absolutely know it’s an issue for agents. Buyer agents publicizing in a transparent way their compensation upfront will be perceived as transparent, and it’ll create an advantage for them because people will share their sites.
“It’s just common sense that buyers are going to gravitate toward a listing that does not require them to pay extra money out of pocket. Buyers are going to gravitate toward listings that offer compensation, and so brokerages that have transparency around listing compensation are going to attract more buyers.”
There are benefits for listing agents as well.
“The feature allows the selling agent to defend their fees when they’re having a conversation from a listing perspective,” says Carey. “Like, ‘We are 6% (or whatever their fees are), but we are actually offering buyer compensation out of our end in order to attract the most buyers possible to sell your listing for a higher price.’ So it’s a value-added conversation for both sides.”
Despite the risk of other developers copying the idea, Carey welcomes it as a testament to the quality of his work.
“People steal my ideas all the time,” he says. “That’s what makes us REW. Every good website out there looks like an REW website from two years ago.”
For more information, visit https://www.realestatewebmasters.com/.
