How to Win Listings and Get Paid Without Broker-to-Broker Comp | Reah Smith's Playbook

Broker-to-broker compensation is gone in South Carolina — but plenty of agents are still confused about what that actually means for how they get paid. This episode clears it up for good.

Gary Pickren is joined by former SC REALTORS President Reah Smith to walk through exactly how listing agents and buyer agents should be handling compensation conversations now that SC REALTORS has removed broker-to-broker comp from its standard forms. If you're a South Carolina real estate agent still fumbling through these conversations with clients or other agents, this is the playbook you need.

What's covered:

• How the new South Carolina compensation model actually works — listing agent handles their side, buyer agent handles theirs
• How to explain seller-direct transactions and compensation to your clients without confusion or pushback
• What to say when other agents call you asking about buyer comp on your listings
• Reah Smith's real-world strategies for navigating compensation conversations professionally and compliantly

South Carolina REALTORS who get this right will win more listings and avoid compliance headaches. Those who don't will keep getting tripped up on conversations that should take 60 seconds.

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Gary

* Gary serves on the South Carolina Real Estate Commission as a Commissioner. The opinions expressed herein are his opinions and are not necessarily the opinions of the SC Real Estate Commission. This podcast is not to be considered legal advice. Please consult an attorney in your area.    

Transcript

SPEAKER_01 0:01

This is Dish and Dirt with Gary Pickering, South Carolina's only podcast dedicated to the real estate agent craft. And now the host of Dish and Dirt, Gary Picker.

SPEAKER_00 0:28

I don't really even need to introduce her. Everybody already knows her because she is a former president of SCR and she's also been on our podcast. In fact, I think that podcast this year, by the way, Rhea, was one of the top watched uh podcasts we've ever had. So thank you for that. So being a smart podcast-get me a raise. Well, I tell you what. Being a smart podcaster, you go get your guests who get you a lot of views and you bring them back. I mean, that's how you do it. I mean, you know. So Rhea Smith is with us today, and she's going to be talking about a topic that, quite frankly, I don't understand why we're having any need to even talk about it anymore. To me, it's the simplest damn thing in the world. But I'm getting questions from brokers. Rhea's having to speak at every realtor association in South Carolina on this topic. And what we're talking about is the end of broker-to-broker compensation in South Carolina and what that means for the listing agent, the buying agent moving forward. So, Rhea, thank you so much for coming in and talking about this very timely topic that frankly I don't even know why we have to talk about.

SPEAKER_01 1:26

I'm so very glad to be here. I've it is this this is all that I have done since March the 9th, other than transact a little bit because I got to keep sharp with my skill set. I've been all over the state. I've been with a lot of different firms individually teaching these concepts. And Gary, we talk about why is this so challenging? I guess just because it is so antitical to the original mindset in the in the land of broker-to-broker compensation. It is time, time, time to let that go. Throw out your old playbook of the way you were doing it, because there's a new playbook in town to follow on how this should work. And the most boiled down simple thing I can say is you better be in consideration of who you are obedient and loyal to in the transaction. That's your first question to ask as to what do I do next? What is in the best interest of the client I represent in this transaction? Simple as that. And we'll build on it from there.

SPEAKER_00 2:26

Well, the two of us were probably the most too outspoken people in the state of South Carolina wanting to get rid of broker to broker. And like you, when I was speaking at the Realtor Association groups, there are many people who just could not accept this change. And as I told one guy, you know, the ship hasn't already sailed. That ship has sailed, hit a rock, and sunk. I mean, it ain't coming back. And you are right when you talk about how different this is than what agents have grow grown up on. And I guess I need to be a little bit more understanding, being that I don't do what y'all do on a daily basis. I just talk about it and opine on it. But I I I can see that. I mean, in 18 months, period, we've gone from no compensation on the multiple listing service at all, which is a massive change, and now we're doing away with a listing agent even being involved in compensation for a buyer agent. So that is true. It is a very big different change. Um, I think the mindset, like you said, if we can just get through our mindset of this and say it's different, and I just got to see how it's different, the actual concepts seem to be a lot easier for me. So my first question for you today is what is the biggest misunderstanding that listing agents have using the seller-direct listing agreement, meaning they're paying directly, seller-to-seller agent, buyer-to-buyer agent?

SPEAKER_01 3:38

The biggest misunderstanding and some of the biggest challenges is listing agents haven't gotten down their scripting or even their listing material and their and their listing consultations, their pre-listing meetings with their sellers to give their seller clients the reality of the transaction. This is somewhat newish now for us, brand new for many seller clients out there who may have transactor over and over again and are accustomed to the idea of broker-to-broker compensation, they've got to fully explain what the scope of the transaction is going to be, breaking down the individual points of the listing agreement and helping sellers to understand that while we are setting the fee for service up front for me and my listing services, for to list your home, put it on the MLS, whatever laundry list of things you are doing, your professional knowledge, diligence, care, and skill, that fee, setting that up front and setting also now the fee to work with an unrepresented buyer in the transaction. We'll talk more on that. They're failing to go a step further and say, Mr. Seller, understand that 88% of the time, and we know that from the NAR 2025 Home Buyers and Sellers Survey, that 88% of the time a buyer coming to a real estate transaction is going to have representation. Mr. Seller, always understand that that representation comes with a fee for service. So in plain talk, what you're going to see, Mr. Seller, is that we are going to receive purchase offers that also include a request and show them the 120 compensation agreement, a request to cover that buyer agent's fee for service. Now, understand, Mr. Seller, that those fees for services are individually set by the firms that that provide that service and agreed to by the individual buyer clients. So you need to prepare yourself of a range of less than X to X to more than X. So when we're pricing your home, we need to have that in consideration of the net value of what you intend to earn on this property. They're not giving them the rundown of it's not, I'm gonna list you for this, I'm gonna get you this, now sign this, I'm gonna stick a sign in the yard and put this on the MLS in 24 hours. If that's the level of consultation as a listing agent you are giving a seller, you have failed and you are not worth your money. Hear me now. You're not worth your money if that's the level of diligence and professionalism you're providing in terms of your professional services over to a seller. You're not telling them the reality of the transaction, which is there there is going to be another licensed competent professional that wishes to sell your home to their client that they're representing. And guess what? They work for money just like you do. There's money gonna come from one direction in a transaction every single time, and that's from the buyer. So when we price, we've got to have that in mind. What's the market say we can get? What does appraisal uh data look like that's gonna secure that price? And what do we have built-in margin to cover all the obligations of the transaction, not just my fee, but a buyer agent's fee. Your mortgage that needs to be satisfied. Maybe you've got tax liens, maybe there are other things. We got one pot of money with strings attached that doesn't even exist yet. It has to materialize through financing, and it comes with contingencies. The second part they're not explaining is that when they as a seller receive an offer and there is a contingency for that fee for service to be covered, if they they as a seller have the option to choose to allow the buyer to have less access to their money to satisfy that fee, but that doesn't mean that that buyer is free of the obligation of that fee. I don't use that. One of the things when I teach forms, I don't use the word pay. In fact, if you sit in my forms class, I have you write the word P A Y at the top of a sheet of paper and strike through it, and out of the side I write obligations because there is no money, right? Money has to come from financing. Financing has fixed contingencies in order for you to get it. The buyer agency fee is similar in that variety where they've already agreed to work for this fee amount, and a seller needs to be considerate of that and negotiate solely for their net proceeds. There's no reason to consider any other avenue. Net's the only thing going to the bank. Everything else is a tool of negotiation.

SPEAKER_00 8:24

Let me unpack. Absolutely. That's a lot to unpack. The first thing I think I want to unpack with you is the scripting. Real estate agents spent a lot of effort learning how to do a listing presentation. It sounds to me it's time to revisit your listing presentation post-Sitzaburnett because it's a Burnett changed it as did getting rid of broker broker. And at the same time, it seems to me that if you're a buyer's agent, you better have a script and you better revise that.

SPEAKER_01 8:49

Right. You know, in the days of the MLS cooperative compensation, that everybody knew what the fee for service was. It was all predetermined, preset. You didn't have to worry about that. You do have to be concerned with that on either side of the transaction. Don't think just because you're a listing agent, you don't need to be concerned about explaining buyer agency fees. They are a part of the transaction. They always have been. There has to be a better explanation. If you've not touched your listing presentation since at least before March the 9th of this year, it's time to look through it and how you're going to explain it. One of the things that I always instruct is after you've given them the full discussion on their listing agreement, the next thing you show them are the next two obligation forms that are going to come their way in an offer situation. Show them what a 120 looks like, and then show them the buyer agency contract and explain very clearly, Mr. Seller, this is a contract. That means two people make it and it takes two people to break it. So this is an expectation of the transaction fulfilling itself as that fee is figured out within the terms of the contract. Now that's not to say that every offer we get will come to an actual agreed-upon contract and make it to close. Sometimes we cannot work out the terms. Sometimes it doesn't work for a number of reasons, but they need to be considerate that those fees are at a fixed point on that side of the contract. That doesn't mean they have to cover them, but it may be in their best interest. And probably 88% of the time, it's in their best interest to consider how do we make that fee work within the contract price amount so that we still get the net that we're looking for. Sellers are not understanding that if they just X out a percent, a half a point, the whole thing, whatever, that doesn't mean it goes away. When I hear, I hear this often from sellers and then subsequently the listing agents working with them where they say, I'm not paying. I'm not paying nothing. I'm not paying. I go, with what money? Who even has money at this moment? Do you mean you're not going to get your checkbook out and write a checkout for this fee? What do you mean by that? Because this money don't even exist in a bank account yet. It's not even made it into wire form. There are conditions to get this money here. That's one of the conditions that each individual buyer has. And the important thing is as listing agents, we shouldn't be setting a standard of you should expect at a standard that buyer agency fees are X. There is no standard. That's individual. Your office policy sets what that fee for service is to work for a buyer client, even if that policy says you may set your own fee. You have that set through office policy. And as a seller, you don't get to opine on what they should or shouldn't be working on. As a listing agent, you do not get to make an opinion on what they should or shouldn't be working for. And the reason is in that buyer agency agreement on page one, in the section that says purpose, you have no idea what that purpose of agency fully encompasses. That buyer agent could be paying for a moving van. That buyer agent could have worked with this buyer for four years straight. You do not know the purpose of agency, just as a buyer agent does not know what that listing agent has agreed to do. And guess what it is? Nobody's business but the two parties that made it. So reserve your opinion on what is going on in individual agency agreements. Negotiate for net for your seller, negotiate to get your fee covered for your buyer, depending on who you are representing, and worry about the net. It got too easy, Gary, when it was all set in front of uh the curtain on the MLS for listing agents to not talk about their value. It got real easy to go, I'm gonna get you a million dollars for your house. Well, a million dollars contract is not a million dollars net. They're failing to they don't want to point out, well, that fee for service looks like it might be more money than I'm worth. I don't want to talk about I'm making$20,000,$50,000,$10,000, whatever it may be. If they're not wanting to explain their value, they're burying it in the list price and contract price when every single time you should start with some estimated net sheets before the listing. And then when you're listed and start receiving offers, every time it should be a net sheet. And when I create a net sheet, I bundle the fee for service together. This is what you're going to pay, total fee for service, what the obligation on your side and the buyer's side is, so we can get you down to what that number is. Only number turning into money is seller net proceeds. The only thing that makes a check or a wire at the end of this thing.

SPEAKER_00 13:44

And I think the theme that I constantly hear here, which kind of goes along with the resolution of the Sitzaburnette uh case, is transparency. And there's been a lack of transparency as to fees, which is what Ketchmark said, particularly when we had MLS, because it was a guaranteed fee and it really wasn't uh discussed about how the fee was paid and why it was paid and what we did. So what you're saying is we need to be more transparent up front, discussing at the time of listing what these offers may entail, what they may ask for, what your net might be, because right now agents that are afraid to discuss what their true value is because they don't know how to explain it, they're not going ahead and having these conversations that says, look, this is only my fee, but the buyer might agent might have a fee that the buyer might ask you to pay, and here's why. And here's how that's going to look on the net sheet. It's just a whole lot easier to go, this is my fee, and this is I'll list your house for this money. It's almost like we're just scared to tell people the truth. Yes. Right now, in this litigious area that we're in right now in real estate, that's the last thing we need to be doing. We need to be a lot more upfront.

SPEAKER_01 14:44

Is your friend in this situation? And helping, you know, for whatever reason, it seems like when a seller receives a unilateral offer to purchase, they act like that money is sitting there on that piece of paper. And that money's not sitting there. That money has to then be found based on the promises made in that contract, helping them understand that money's only coming from one direction. And if you, Mr. Seller, would like your obligations covered using the funds that the buyer brings to the table. I use the visual all the time to explain to listing agents and sellers the buyer's gonna bring a suitcase load of money and throw it down on the closing attorneys' tables, their their conference room table, and then they're gonna start parting those dollar bills out. They're gonna put this amount of money towards your deed stamps, they're gonna put this amount of money towards their attorney fee. The buyer's gonna put this amount of money towards the title search, uh whatever, whatever, whatever. All the things have to be covered by the one suitcase of money that the buyer don't even have. The buyer has to make promises and fulfill on their good to then get that suitcase of money. So if you want that suitcase of money to solve all of your obligations, you've got to let the buyer have the same access. Unfortunately, federal financing regulations will not allow them to directly take that money and pay their representation. Because of the way this has worked for years, this is the way the financing rules are. Mr. Seller, understand if you want your mortgage covered, your deed stamps covered, any outstanding repairs you may have, then you've got to agree to the fixed terms of their contract. And make no mistake, I'm not saying you don't, you don't advocate within best interest of your seller client. Your best interest is to get them the best and most appropriate net and negotiate from that angle. You could choose to take away any type of contingency, and it may not make that money show up. And at the end of the day, you need that money to show up to meet the goals of the transaction.

SPEAKER_00 16:46

And is that where we're failing the most when we're communicating with our sellers about the realities of the transaction under this direct model? Is it that we're failing to really go over net and telling them that net gross doesn't matter? I mean, we can go all day long.$300,000 offers aren't always the same. If I'm asking one is asking for no closing costs and the other one's asking for$10,000 in closing costs. So is that the biggest failure we're seeing right now as we move into this broken broker ending of call?

SPEAKER_01 17:11

Biggest failure on the list side of the transaction is that they're not they're not talking about net, they're not negotiating for net because net net is less, right? Less in a lot of people's minds feel like not good. It's not, it's that I'm getting you less. No, you're getting net no matter what. You helping a seller to understand that, you know, you list your home for$500,000 and it goes on Zillow and your ego feels good. A mouse is listed for$500,000 and all my neighbors see it, that's great. But you're not you're still, even if you get a$500,000 offer, you are not netting$500,000. Same thing. If it sells and your neighbor sees it in the tax records at$500,000, might make your ego feel good, but the bank account is going to have a number that starts with four, plain and simple. Whatever it may be. And that's transparent. It could be a whole lot less than a lot of people. It could be uh that the nut money comes to the bank, could be$90,000. You know, I mean, it depends on what it is. You've got to, and that, and that's the real crux of it here is if you are a trusted advocate, a trusted advisor in the transaction, in a very personal, personal transaction, home is personal, real estate oftentimes is very personal, then you owe them that meaningful explanation of this is what you are going to earn in this transaction. If you're not giving them that fully, then you're failing. You're failing on your fiduciary obligations.

SPEAKER_00 18:41

Fiduciary duty, I was about to say it's exactly that. You have a duciary duty here. And if I'm selling a house for$500,000 and I have a$400,000 mortgage to pay off, the best I'm starting at is$100,000 before I pay my agent, before I pay my closing costs. And I don't understand why we think having to deal with it when the offer comes in and well, I thought we were going to make a lot of money. Well, you have this mortgage to pay off and you have this fee to pay and you have this fee to pay. And they're like, Well, uh, why don't you tell me this earlier? Why, why, how does that help you as an agent to hide it, to only have to deal with it when the offer comes in? I'd rather deal with it up front. I think it just makes a better situation.

SPEAKER_01 19:13

Of course it does. It it makes more sense to to set the expectation. And that's that's another failure, is there is no expectation set. I when I when I take a seller through the listing agreement, and then I show them a buyer agency contract so they see what this looks like, and I flip them over to the set fee for service that a buyer agent is working for, and I go down on the there's in the section, and I I probably could drop it in the show notes that says that upon the directive of that buyer client, they will direct their buyer agent to include this fee as a credit in their purchase price, and that they will also allow them to use the 120. That is a clear direction that a buyer agent is getting from their buyer client. The seller needs to know that direction and that directive, they need to understand this was the expectation on this side. And so when you receive an offer, they have that expectation in mind. And while we would love to be able for each party to just completely part out and pay one another, it's not possible with financing constraint. And if a seller can't understand it there, take them to their next transaction. Mr. Buyer or Mr. Seller, how would you like for this to work for you when you become the buyer? Would you like the seller of the home you go to to allow you to have access to the funds that you are bringing to the table to pay for your representation? You want a represented buyer in the transaction more times than not because they're most likely to perform. Unrepresented buyers oftentimes jump in straight into a contract, get into due diligence, get a home inspection, and freak out. They go, This house has a, you know, a weird board. It's got structural damage, and we're pulling out, and you've come off the market for a buyer that was never really going to buy your home in the first place. If they have representation, they're less likely to jump in without a plan and without preparedness. And at the end of the day, when they close and they're done with it and they're mad at you for some reason, they're the least likely to sue you. Somebody without representation has more opportunity to drag your butt into court because they had no help. So it while we That's right.

SPEAKER_00 21:23

And the court holds you to a higher standard.

SPEAKER_01 21:25

It exactly. And we talk about advocating in the best interest of your seller client. That's why this may be in your best interest to, it's always in your best interest to consider it, to consider any and all offers, but it may be in your best interest to allow that buyer to use their funds to compensate their representation. Listening agents got to explain the win to their sellers of why this has worked well for eons to do it this way. It's never made any sense that the adversarial party decide what the value of the other licensed, competent professional is in that trade. Transaction up front. I don't know why in the world a listing agent would ever want to give me their opinion on what they think I'm worth as a buyer agent. I know that, and Andy Lee, my broker in charge, knows that. And we set that as a firm, and that's what we go out and work for. So I don't need to hear from any other listing agent. I can't believe you're working for this. I can't believe you won't work for that. And in my mindset, I can't believe you won't list your listing side commission to make this deal work. They act like a listing agent acts like the buyer agency agreement can be erased with a pencil eraser because we wrote it all in pencil and it's not real and it doesn't matter. It is a contract. I don't even use the word buyer agency agreement anymore. Sure, it is an agreement, but it is a contract. Both sides need to respect that. It would be insane if I was a buyer agent to send an offer for purchase and say, all right, we want to give you X thousands of dollars for your home, but we want you to agree to reduce your commission, Mr. Listing Agent, by a half a percent because that makes the money work for us. I mean, what if buyers were doing that? What if buyers were sending offers off that said, I'll give you$500,000 for your home, but the only way I can make this work is if the licensed competent professional on the other side works for two and a half points less or a whole$10,000. That's the only way. What if we were doing it that way? It don't make any damn sense. It doesn't make any sense.

SPEAKER_00 23:24

Well, the whole system they're at. No. I mean, nobody would ever create the system the way it was created if you were to start from scratch. I mean, it was it didn't make sense from and and the fact we were negotiating buyer compensation at the time of the listing and not at the time of the actual contract also made zero sense. It didn't work. So as this relates to seller-client confidentiality, what are client listing agents failing to understand about seller direct compensation?

SPEAKER_01 23:46

Oh man, if I could just get everybody to remember the old car one more time. I mean, old car didn't go out the day after the first day of real estate school. It is every day of your life you better understand old car. So here's what I'm seeing go on. And it drives me nuts. A listing agent will list a uh a property using the new 220, which so we're clear, has nowhere whatsoever to include any type of promised fee for service to a buyer agent, even seller direct. There's nowhere to put that on there. In fact, the listing agreement itself straight up says that you won't be sharing any of your compensation with another firm. That's taken out of there. So what are what are listing agents doing? A buyer agent will call and say, hey, I've got somebody interested in your property. Maybe they ask about what may or may not be the fee. Maybe they don't. That listing agent automatically comes out and says, Hey, by the way, my seller's already agreed to pay X percent. Why are you giving away confidential information, confidential to your seller, prior to ever seeing an offer, prior to ever knowing a thing else about this buyer coming to the to the transaction, this situation? What are you doing waiving that confidentiality piece? Number one, SR did not give you anywhere to write in that agreement that you were going to advertise a seller direct fee for what Gary, you know, what does it take to have your confidentiality waived as a client? Express written agreement. There's nowhere written that says, I'm gonna advertise that X percent, X and a half percent, percent and a half, less than that, whatever it is. There's nowhere to set to give you the authority to override their confidentiality. Now, maybe firms have created their own forms that have been vetted by an attorney and hopefully they didn't just write this stuff up themselves that allow them to waive that confidentiality. But I question and go, who in the world are you serving? If you are a listing agent, are you thinking with their best with your seller's best interest in mind, are you just running on autopilot from the leftover days of broker-to-broker compensation because you don't know how to do it any different, because you hadn't been to a single class, cracked open YouTube and learned a thing or done anything to prepare yourself in this marketplace. Stop giving away confidential information, which includes what your seller may be willing to compensate a buyer agent in the transaction. That ain't their business until they have asked for it formally on a 120 compensation agreement. Period.

SPEAKER_00 26:27

Drives me. I think the problem is that they're scared they can't sell the house. I had agents tell me that when I argued that broker to broker needs to go away, they're like, Well, we couldn't sell a house if we can't uh advertise or pay the commission. And I said, then you're not a good agent. Exactly. If the only way you think you can sell houses is that you have to give away the house to get the household, you're you don't know what you're doing. Because if no one is able to list on the MLS compensation, then no one does it, then how is you being able to put it on there affect you one way or the other? It didn't. So how's this any different than when we got rid of the MLS compensation? It's not. No one else is doing broker-to-broker compensation show. Everybody's in the same situation.

SPEAKER_01 27:05

They're doing this quasi-thing of trying to live in the past of broker to broker, but we don't have a form for you to be doing that, number one. And you know, you can argue that it may be in your best interest, and you your seller has said, I want you to advertise this. You need their written consent to do so because you're giving away part of their margin up front. And you better be able to explain why that is in their best interest to do so. And Gary, I want to I don't want to miss this point because it's important when you said they won't show the house. Hear me now by our agents. If you are not showing houses because you do not know what the fee for service may or may not be up front, you are steering, okay? And quit doing that. Quit doing that. If you can't figure it out without knowing that much up front, it's time to call a referral company and put your license on referral because this is the new world. This is the new game that we were, that we are in. It's only gonna go this way from now on. So that's that is so important. Listing age, I had a listing agent call to me at an event yesterday and tell me I'm so frustrated because buyer agents keep calling me and wanting to know what my seller's going to agree to up front to pay them. I tell them, make me an offer, put it on 120, we'll take care of you. Whatever you put on there is what it is, and they won't show the home. I said, So you're telling me they're steering? I'm telling you they're steering. Stop doing that. Get good at your skills.

SPEAKER_00 28:30

It doesn't even matter what those doesn't matter. I mean, if I call you today and say, Rhea, what are you offering me on this house? And you're like, I'll pay you 10%. It doesn't matter because it's just your words. It's not in writing, it's not an agreement, it's an advertisement. So me picking up the phone and calling a listing agent and asking them is a complete and utter freaking waste of time. It is.

SPEAKER_01 28:49

You're obligated to do shit. Yes. Show the house and you're not you're not obligated to do anything. And if you're a a buyer agent that's working with a listing agent that doesn't understand the process that that calls you and blurts out to you, so, oh, by the way, we're my sellers already agreed, they're gonna pay X. Well, okay. It's never a problem, right? If X matches your X on your buyer agreement, but it's a problem either way. If that's more than X and your buyer agreement says less than X, well, you can't get that money. And what did that listing agent do? They gave away margin. Huh? I know as a buyer agent now that there's a percentage and a half, percentage, whatever, that they were willing to give away of their own money. I'm gonna make my offer lower to match that. Or more commonly, we're paying less than X does not match your buyer agency agreement. Your next conversation out of your mouth to that listing agent is I hope, Mr. Listing Agent, that you're negotiating for net. Because I'm gonna disclose to you right now, my fee for service contractually agreed upon with my buyer is X. And that is what you're gonna see from me on a 120 when I submit an offer to you is that fee for X. And I would appreciate, professional to professional, that you help your seller to understand that's a fixed point of this buyer and their ability to purchase. And they're looking to cover that using the funds they bring to the table. So please help them get the most appropriate net for their situation, help them understand it's a contract. I'd hate for either one of us to be put in a position where we are looking at our clients at how do we renegotiate our fees for service to make this work. Either one of us. Listing agents could do it just as easily as buyer agents could do it. That's what they got to get.

SPEAKER_00 30:26

I'm big enough of an asshole that if somebody were to call me and say how much you're offering, I'd be like, you do realize what I say or any other agent tells you in these phone calls doesn't matter. I mean, what number do you want me to tell you? You tell me what you want me to tell you. You want me to tell you 12? You want to tell me 18? I'll give you any number you want. Of course, until you put in a contract offer, my client accepts it. It doesn't matter what any real estate agent says, I don't know why you're calling me. I'm that kind of an ass, but moving on. How should a buyer be interacting with listing agents in communication prior to the offer then?

SPEAKER_01 30:53

Well, I'll I'll tell you a thing that concerns and worries me that as I have done a lot of instruction over the last month, it's become apparent to me that there's a thing going on with buyer agents and their buyers where we hope at minimum they're meeting state required license law plus the NAR settlement if they're a realtor member of the the um disclosure of brokerage relationships form, a meaningful discussion on agency. And if they're an NAR member, they need to have an acknowledgement of that form with their their um the uh buyer agent's signature as well to meet the requirements of the settlement. They go look at a house, they go decide, hey, we're ready to offer, and then they call up that listing agent and ask that very question, are you offering any, is your seller offering, and then fill out their buyer agency agreement. Or I'll go one step worse. They're filling out the buyer agency agreement and saying to their buyer, hey, Mr. Buyer, I'm gonna figure out what the situation is, and then we will put this number in here. You best not be doing that. Oh my gosh, you better not be doing that for a multitude of reasons, for state license law reasons, for settlement reasons. And if I have to just clear call it out, if you signed a buyer agency agreement with no fee in it, dummy, what did you agree to work for? Nothing. You can't go back in and fill that number in.

SPEAKER_00 32:13

I had a I had a builder agent one time tell another agent that, well, you can't amend it, so just tear it up and do a new one. That's an amendment. It's like what you can't fix stupid on some of the some of this stuff. I mean, it's just really crazy.

SPEAKER_02 32:27

If you use a special light it on fire.

SPEAKER_00 32:32

Yeah. So what should a seller consultation look like in practice of seller direct listings now?

SPEAKER_01 32:37

Seller consultations need to be extremely robust. You've got to give number one, a meaningful discussion on agency, which if I'm just being honest in observation, listing agents weren't doing. They weren't doing it like they were more apt to do that in a buyer, buyer, client, or customer situation at a listing appointment. And here's no, when I compete for listings, the very first thing I do, one ten disclosure of brokerage relationships forms. And I the next words I say are, Mr. Seller, I know you've seen this before because you're interviewing other agents, and this is the state required form that I give you. It's required by law of me as a uh licensed real estate professional at the state of South Carolina, they're going, Well, I've never seen this form before. This is news to me. That's how I know they're not giving meaningful discussions on agency. It's just a pencil chip on the pile of uh of the forms they've got to get through. That's the first thing you've got to do is explain that and explain it as it relates to the market you're in. Mr. Seller, you are looking to contract me to sell your home. We are going to be in an agency relationship. This is a good time for me to help you understand that buyers coming to your home are also oftentimes in agency relationships. That there are times when I may be the one that has the buyer that is contractually obligated to me that may be right for your home. I'd like for you to be able to consider those options. Maybe a member of my firm has a buyer. Talk through the dual and designated piece right then and there, and then help them understand the scope of service. Mr. Seller, understand that this purpose of agency is defined to these things. Explain what they are and help them understand the next piece, the unrepresented buyer. And that's something I wanted to get into because people are confused about that. They're like, well, what is an unrepresented buyer? Y'all, it's a customer, okay? Means they do not have an agency relationship with you or another licensed competent professional. So when you're explaining that to a seller, they've got to understand that, you know, when the phone rings on a sign call or somebody reaches out to me directly through Zillow or Lake Hue Realestate.com, then they are coming to me a member of the public and they may not choose to go forward with representation. For me to take an unrepresented buyer, Mr. Seller, through your transaction involves a workload, a measure of risk, and basic transaction management that comes with a fee. And my fee for service for working with any customer is X. And you can understand that if you work with a customer that's working with my firm, the fee for service is X. And it's very important that if you're a listing agent and you're using the unrepresented buyer field and you say, you know what, I'm gonna cut you a break here, Mr. Seller, if I bring the unrepresented buyer and I'm taking care of you, I, I, I, hearing all the eyes here. I take care of this. I'm gonna discount your fee by three points or whatever. This does not set a stand that I'm gonna work for less. Well, understand because we got to remember day one of real estate school and agency. You did not just discount that unrepresented buyer for you as the listing agent, you did it for the whole firm. Every agent of your firm now has agreed at that rate. So get clear on what you're doing. If you are moving numbers around that affect the entirety of your firm, number one, be clear on your office policy if that's allowed, allowable, or even in good sense. And number two, help the seller understand that situation. If you're having a meaningful discussion on agency, the conversation about an unrepresented buyer is very, very simple to have. And then the dual and a dual and designated is very simple to have. You know, Mr. Seller, that if a buyer comes to your transaction and I represent them or a member of my firm represents them, I'm gonna tell you right now so you know we can make plans for your best and most appropriate net that the fee for service that that buyer has agreed to is X. No surprises. But if it comes from outside of Lake Kiwi Real Estate, I don't have any control on that fee. I can only surmise at what it could or could not be, and we should not feel comfortable with the idea that there is some sort of standard or what have you. The only thing we're gonna care about is what I can get you into your bank account given the conditions of the home and the conditions that buyer must meet to get that suitcase of money out of the hands of the bank and into their hands to throw down on the closing attorneys of table and pay all of our obligations. No problems in real estate, only obligations on each side that have to be met. We're one pot of money. They've got to be given that meaningful conversation, plain, you know, dual de dual and designated and unrepresented, represented. That that's confusing for somebody that has no legal background. You got to give it to them plain and simple, just like that. Cut to the meat of what this is. Oh like complicated.

SPEAKER_00 37:27

The suitcase is a great analogy. It's a great analogy. It's easy, it's easy to understand, it's easy to visualize. Yes. Well, in the few minutes we have left here, what is the biggest mistake you're seeing listing agents make on the 220 listing agreement and buyers agents are making on the 130 buyer agency agreement? And I'll even throw a little bit more in there, uh, also on the 120 compensation agreement. So, where where are the problems we're seeing here in our uh the way we're handling this today?

SPEAKER_01 37:51

The biggest mistakes is not understanding that there is no more broker to broker. Even if you wish there was, there is no recreating the concept of broker to broker broker. There is nowhere for your seller to commit to a fee to another party. That 220 is for you and your representation with that seller. That's it. There is no other way to pull a future promise. You could utilize a 120 and go ahead and have a seller sign a 120, but I I challenge you to describe to a member of the real estate commission why that would be in their best interest to give away their money up front. You could choose to do that, but what that doesn't do is give you express written consent to override their confidentiality. That's a huge mess. I also see that listing agents and and and it's a I get how they got here. 2017, when we had license law revision that allowed us to work with a customer, finally be a customer service in 2017. Somewhere along the line, the instruction became and the and the common concept was that transaction services, that customer-based services were discount services. They were less than services. Now you're not getting the whole old car, but it may be the most appropriate position for you and a member of the public is to remain in customer service. That fee for services, whatever the fee is, it's not a discount per se, unless it is, unless that's what you're choosing through your office policy and what makes sense in the deal. So understanding that as it relates to transaction services, I'd almost argue an unrepresented buyer coming through the transaction with no help that the listing agent's having to remember, okay, don't disclose anything confidential, got to get them through and help them understand the pieces of this of this transaction all the way to closing with no help. Shoot, that's almost more work than if just another professional come to the table. So those are the pieces, the two really big pieces. Stop acting like you can just throw broker to broker back into the mix. It's done. It's over. Let it go. You're gonna live in the past, be prepared to become history. Okay, it's done. Now for the 130, the same thing. That buyer agency agreement, either not signing it and waiting to see what you might could get, stop doing that. And so I can just scare the hell everybody out of everybody real quick. If you are not utilizing as a realtor member, a written acknowledgement, and Gary, I'm saying written acknowledgement versus what the settlement says is written agreement. We know in the state of South Carolina that anybody coming to a real estate transaction or real estate situation comes in default mode as a customer, customer service requires no written agreement. But if you're a realtor member and you want to stay in the warm hug that that settlement provides you, you will get a written acknowledgement from your customer at minimum at first contact before you go into a house, plus your own signature. If you want to be in compliance, you will do at least that. Agents that are not abiding by that requirement of the settlement have 1.5 billion reasons to care. Because if you, let's just say you're called up on a sign and you want to take somebody into a house, not your listing, but another listing, and you say, sure, meet me there, let's go, open the door and let them in. You gave them no meaningful discussion on agency, you didn't present the disclosure form, and you're already in the house answering questions. What if that buyer is an enterprising tester from a class action attorney from anywhere USA that says, huh, I bet realtors are dumb enough to override this protection, and now they're gonna open themselves up to a billion and a half dollars in damages that you didn't just do for yourself. You did for you, your broker in charge, and everybody inside of the firm. Get your paperwork in front of the pursuit of the purchase, okay? It's not hard. We got to have more diligence. It's not challenging. We give you your damn forms. You don't even have to come up with this. We give you the forms and we give you the training. Get up to speed on it and stop treating the transaction like it's, you know, a yard sale, like you're selling some old piece of junk on Facebook. This is the most important transaction of most Americans' lives. You better treat it that way. What do you want to know about the 120? What are we messing up on the 120? That's the one thing I didn't bark out at you.

SPEAKER_00 42:05

Yeah, what are we messing with? I I just think the question really I get on the 120 is do they use the 120 or do they put it in the contract? I tell them I don't really care. I I like the 120 better, but if if you feel like you just want to put it in the contract, that's fine. Just don't double state it. That's the biggest problem I see is that they don't and I think that's been fixed by some of the forms, but in the past they would put in a form 120 and then they would restate it again in the contract.

SPEAKER_01 42:28

Well, and unfortunately, there's still some listing agreements lingering. You know, they're still good. They're still valid, even though if they're broken or broker and they were signed. Your poof didn't just go up in air. That's still valid. So there's still agents for whatever reason, you know, right or wrong, whatever, that are still in their old broker-to-broker agreement. So they're they're having to work through that if they're not signing a new agreement with that seller for whatever reason. Maybe they're afraid they're gonna lose listing, or they or it's so close to expiration, it doesn't matter. Your your listing agreement is still valid. Now, the South Carolina realtors will not defend it in court if you get drug in on the so it it is a very good idea to go ahead and have those updated. But there's that creates that situation where maybe you are putting that buyer agent fee for service into the the seller concession, the transaction cost section of the of the contract. Maybe you're doing it there. I'd love to see that go away and that we always handle any type of compensation on the 120 and seller concession be simply that. I'm helping you, Mr. Buyer, pay down points. I'm I'm covering a hardwood floor allowance, whatever the concession may be for, and we go away from that. And I think in probably four months or less, maybe that will be just an absolute thing of the past. It involved too much math, number one, and too many of y'all don't know how to add and certainly not how to get down to a net number. Okay. So it's be good if we could just all do it this this one way. And we were as as we're presenting 120s that listing agents explain to their their clients they're representing. That is a contractual obligation of this purchase. That is a contingency, just like their financing, just like appraisal, just like their closing date may be fixed. There's certain things can't be changed, and you either put a good deal together or you don't. Very simple. We overcomplicate this.

SPEAKER_00 44:18

Well, and knowing you, if that's on your mind, you'll push and get it done. I have no doubt because you were very instrumental in pushing and getting this done. So I can't thank you enough for getting rid of broker to broker. I have been since the sister Burnett saying it needed to go away. It was going to get us back in another lawsuit. But guys, that's all the time we have for our show today. Rhea is always so so gracious to come on our show and share all the information. If you have an opportunity to see her at one of the Realtor Association meetings and she's doing them all over the state, you need to jump into that meeting and listen to what she's talking about because she's one of the few people in this state, maybe even in this country, that truly understands Sitzer Burnett. She was the president of SER during Sitzer Burnett. She spent her entire presidency dealing with the aftermath of Sitzer Burnett. Come see her, Rhea. I'd love to have you back on. There's other topics we still got to get to. So let's get you back in here in the next couple of weeks. We'll do it again.

SPEAKER_01 45:08

Sounds good.

SPEAKER_00 45:09

All right. Well, thanks everybody for showing up and listening to us again today. If you'll like us, subscribe to us, and share us, and coming back again next week for another episode of Dish and Dirt. Y'all take care. Have a great weekend.