Navigating Buyer and Seller Objections Post August 17th: Insights from Industry Experts

At Inman Connect Las Vegas, a dynamic live role-playing session moderated by James Dwiggins, CEO of NextHome, Inc., featured industry leaders Ed Zorn, VP & General Counsel at California Regional MLS, Kendall Bonner, Team Leader of The Kendall Bonner Team, and Cassie Walker Johnson, Managing Broker at Windermere Real Estate Co. They provided valuable strategies for addressing buyer and seller objections in the changing real estate landscape post-August 17th. Here’s a detailed exploration of their insights and practical advice for real estate professionals.

Responding to Seller Concerns About Offering Commission to Buyer’s Agent

Kendall Bonner : Providing Context and Encouragement

When a seller asks, "Should I offer commission to the buyer's agent?" Bonner recommends starting with context:

"Information without context is pretext. Start by explaining to the seller what’s happening today. Up until recently, as part of the participation in the MLS, we would input what percentage of commission would go to the buyer's agent. Going forward, that will not be the case. Now there will be multiple ways for the buyer's agent to get paid. Some buyers will instruct their agent to ask you to pay X, some will ask for Y, and some Z. That being said, I do want to encourage you to pay something towards the buyer’s agent commission as the buyer’s closing costs just went up if we don’t. We must keep in mind that both the list cost and closing cost are going to impact a buyer’s ability to afford a home, and at the end of the day, we want to get your home sold."

James Dwiggins : Focusing on Buyer Affordability

Dwiggins highlighted the importance of explaining the benefits of providing an incentive:

"Buyer affordability is going to be an ongoing issue. Commissions become a part of the negotiating of the entire offer. Explain to the seller that providing an incentive is to help the buyer, not the agent."

Addressing Sellers Who Refuse to Pay Buyer’s Agent Commission

Cassie Walker Johnson : Starting with the Why

When a seller says, "I’m not giving anything to a buyer’s agent," Johnson suggests starting with understanding their reasoning:

"We start with the why. Did you read a clickbait article or are you worried about your net proceeds? We start there and then lean in with education and develop a plan. Do everything we can to reduce friction and get your home sold."

Johnson also pointed out that sellers may not fully understand the work involved on the buyer's side, emphasizing the importance of education and storytelling.

Edward Zorn : Managing Seller Expectations

Zorn discussed how to handle a seller who insists on not paying anything to a buyer’s agent and prefers all-cash offers:

"There are two contracts to consider. We can market at a lower price, and you don’t pay anything to the buyer’s agent, and you can accept an all-cash offer. You can do that, but you won’t get the top price. AND we can also look at offers that are willing to pay a higher list price and ask for you to pay the buyer agent commission. I’d recommend you be open to any and all requests. Look at the math on ALL OFFERS…you may make more on one versus the other. Don’t let the commission piece blind you to what the end result will be."

The Importance of Data and Comparative Market Analysis (CMA)

Ed Zorn: Adapting to New Market Conditions

Zorn emphasized the critical role of MLS data and the need for updated CMAs:

"The data that’s in the MLS is absolutely critical. Every time you do a CMA moving forward, consider doing two versions. One is an adjustment based on what was paid historically by the buyer, and one will be based on what will need to be paid now by the buyer, including the new additional costs of closing."

Collaborative Approach to Comps

Zorn also highlighted the increasing difficulty of comps and the necessity of collaboration:

"Comps are going to become much more difficult. We’re going to have to talk to the other agent, which allows us to prove our value to our clients."

Practical Steps for Real Estate Professionals

1. Provide Context: Always start by explaining the current landscape and how recent changes affect the transaction process.
2. Encourage Incentives: Highlight the benefits of offering commissions as an incentive to help with buyer affordability.
3. Educate Sellers: Address any misconceptions sellers may have and educate them about the implications of their decisions.
4. Show Proof: Use data and storytelling to demonstrate the value of your services and the importance of fair commissions.
5. Update CMAs: Prepare CMAs that reflect both historical and current market conditions to provide a comprehensive view.
6. Collaborate with Peers: Engage with other agents to gather accurate data and enhance your value proposition to clients.

Navigating the New Real Estate Landscape

The insights shared by Ed Zorn, Kendall Bonner, and Cassie Walker Johnson during the live role-playing session at Inman Connect Las Vegas provide real estate professionals with actionable strategies to address buyer and seller objections in a post-August 17th world. By providing context, encouraging incentives, educating sellers, showing proof, updating CMAs, and collaborating with peers, agents can navigate the evolving landscape and continue to deliver exceptional service.

In summary, the changing rules around real estate commissions require agents to adapt their approaches and maintain open, informative communication with clients. By doing so, they can ensure smooth transactions and achieve successful outcomes in a competitive market.

Author: Stacey S. - SVP Community & Engagement | www.insiderealestate.com