My blog last month talked about the recent lawsuits around the country, against several national brokerage firms, as well as NAR. As those lawsuits are settled, or adjudicated by judge and jury, it has become abundantly clear that our way of doing business will soon be a thing of the past.

 While many parts of our daily role working with buyers, sellers, landlords and tenants will stay in place, one major area (and the core basis of many of the suits) will see a 180-degree shift. This primarily deals with how the listing broker and the buyer agent are compensated in a transaction.

The suits had one common thread: price-fixing. While the prosecuting attorneys had no proof of collusion or joint efforts to affix prices between companies, brokers, agents and even Associations of Realtors, including local, state and national, they did make a convincing arguments that the parties were fixing prices based on the messages delivered in marketing and promotion.

Case in point. May an individual broker decide that his agents will charge X%, nothing more, nothing less? Yes, since that is a brokerage operational rule. But the cases pointed to a brokerage with 800 agents, all independent contractors, and thus, what right does the broker have in determining what the IC’s charge? It does raise an interesting question.

As the plaintiff’s attorneys did, if you randomly ask 100 people on the street, “how much do real estate agents get paid”, most will have an answer, based on a number of factors. Mostly, based on what we tell sellers and sometimes buyers the basis for what we charge. Many sellers claimed, when interviewed, that the agent justified what they were charging based on “that’s what everyone else charges…” That alone spells price fixing.

But here is the common situation that gets us all in trouble. An agent is doing several types of marketing to gain listings and uses the tag line “we charge less”.

Then they expand on that concepts, and claim “we charge less than any other broker out there…” You have seen and heard the ads.

First, how does a competing broker know what I charge? They assume, but do not know. But their statements perpetuate the concept of fixing prices.

As Realtors, we see it one way, but the average rank-and-file consumer who is receptive to marketing ads to sell their house would reach the conclusion that “everyone else charges one rate, yet this one broker charges less”. If all the other brokers charge the same, then clearly, in the mind and eyes of the judges and jury, that is price fixing.

So, what is the 180-degree shift? We have already seen the changes in the month since my recent blog. Many Associations of Realtors and ARMLS type entities around the country have changed their guidelines to get away from a minimum or reasonable offers of co-broke compensation, and now allow a broker to offer $0 to the co-broke agent. And many agents have stated, just in the previous few weeks, that all of a sudden, a lot of listings now offer $0 compensation.

The push is to eliminate any offer of co-broke compensation. It is already here. Thus, if you have the buyer, and my listing shows $0 compensation, how and from whom are you paid?

This will push us, kicking and screaming, into using the Buyer Broker form, negotiating with your buyer to pay you (just like when you negotiate your listing compensation with the seller).

This requires many agents in AZ to embrace the use of a form that they have resisted using for decades, for whatever there reason was.

Think about this; most buyers have no concept of how much you will be paid, and who is paying it. We have always negotiated with sellers for our listing compensation, but we almost never have negotiated compensation with a buyer.

On this website calander, you will now find classes on the Buyer/Broker Agreement. Most are done by this author, yet we have a few instructors teaching the same classes around the valley and state.

If you are one of the agents who have rejected the buyer broker form, now is the time to learn it, embrace it and begin using it. Done properly with the conviction of your worth, you should be able to sell it. Sure, some buyers will balk and bolt, yet that is win for you. Let them go waste another broker’s time.

As more of us start using the form, there will be far less chance for a buyer to say “no other agent has asked me to sign it…”.

This is a slow yet sudden movement that will change the way we do business. NAR just imposed a $45 assessment fee on their dues, to start building a war chest to pay any settlements, which are all under appeal. But NAR and probably no brokerage has $1.6 Billion in their checking account to pay a judgement or settlement. We are all in this together.

Stay tuned...