For Sellers
Compensation Overview:
- Current: Explain that the compensation charged is X% to cover all the activities necessary to get the best sale outcome. Emphasize that most buyers include the buyer brokerage compensation in their offer.
- Post-August: Similar to the current approach, but clarify that even though the compensation offer won’t be published in the MLS, it’s still important to offer it. Explain that the buyer’s offer will likely be lower if they have to cover their brokerage fees themselves.
Setting Buyer Brokerage Compensation:
- Discuss with the seller what amount to offer the buyer’s brokerage. Emphasize that not offering compensation may reduce interest in the property and lead to lower offers.
Handling Objections from Sellers:
- If a seller wants to offer little to no compensation to the buyer’s brokerage, explain that it could reduce the pool of interested buyers, potentially lowering the sale price.
For Buyers
Explaining Buyer Brokerage Compensation:
- Current: Buyers control how the brokerage compensation is paid, typically through their offer to the seller. The seller’s price generally includes the buyer’s brokerage fee. If it doesn’t, buyers can choose to pay it at closing, not view the property, or negotiate with the seller to include it.
- Post-August: Buyers will have a couple of options, such as asking the listing broker about compensation or viewing all properties and negotiating compensation through the sales contract.
Handling Objections from Buyers:
Signing an Exclusive Agreement:
- Explain that a significant time commitment requires an exclusive mutual agreement, similar to other professional services.
- If they prefer to work with multiple agents, mention that most brokers require an exclusive agreement.
- Address discomfort by ensuring all concerns are answered and offering a satisfaction guarantee with a 10-day correction period.
- If they don’t want a lengthy contract, offer a shorter time frame or agreement for a specific number of properties.
If They Don’t Want to Sign:
- Respect their decision but leave the door open for them to return, noting that most other agents will also require an agreement.
Addressing Buyers Who Prefer Properties Where the Seller Pays Compensation:
- Suggest that limiting their search could mean missing out on the best property. Recommend that they see all properties meeting their criteria and negotiate compensation as needed.
Buyers Buying Without Representation:
- Clarify that if buyers choose to work directly with the listing agent, they give up certain services and protections. Ensure they understand that the listing agent’s loyalty lies with the seller.
Post-August Specific Points
- Buyers will have more responsibility in ensuring compensation is covered, either by negotiating it into the purchase price or covering it themselves.
- Sellers need to be aware that buyer agents will still expect compensation, even if it’s not listed on the MLS, and this should be accounted for in their pricing strategy.
Handling Objections - Now
Why do I have to sign an exclusive agreement to work with just you?
I am fully committed to dedicating my time and expertise to help you achieve your real estate goals. This commitment requires mutual exclusivity, ensuring that we both invest in this process together. Just as professionals like attorneys or accountants require a signed agreement before beginning their work, I too require an agreement to start working on your behalf.
What if I want to work with another Realtor at the same time?
When hiring any professional, whether it’s a contractor, dentist, or doctor, you choose the best person and commit to working with just one. Similarly, in real estate, working exclusively with one agent ensures that I can dedicate my full attention and resources to finding the right home for you at the best price. Most brokers in our area now require a buyer agreement, and any other agent you work with will likely ask for one as well.
I really don’t feel comfortable signing an agreement like this.
When someone hesitates to sign an agreement, it often means I haven’t fully addressed all their concerns. Is there something specific that’s causing you discomfort, or is there a question I haven’t yet answered?
What if I want out?
If at any time you’re not satisfied with my service, I ask for just 10 days to make things right. If after that period, you’re still unhappy, I will release you from the agreement—unless we’ve already entered into a signed purchase agreement with a seller.
What if I don’t want a lengthy contract?
I’m flexible with the time frame of our agreement. We can sign a contract for a duration that you’re comfortable with or for a specific number of properties.
Closing the Objection:
Based on our discussion today and what I’ve committed to doing, do you feel confident that I am the right agent to represent you?
If yes: Great! Let’s get the agreement signed so I can start working for you. Remember, if things don’t go as you like, you can always fire me, and we can part ways.
If they disagree and do not want to sign:
OK. I respect that decision. While it means we won’t be able to work together, I wish you all the best. If you change your mind at any point, please feel free to return. We would love the opportunity to work with you.
Handling Objections - After August
Why do I have to sign an exclusive agreement to work with just you?
My commitment to you requires a mutual agreement, just as other professionals require agreements before starting work. Additionally, Illinois License Law now mandates that we have a written Buyer Representation agreement signed with buyers before showing property. Any agent you work with will likely ask you to sign one.
What if I want to work with another Realtor at the same time?
Just as you’d only choose one contractor, doctor, or dentist, it’s best to work with one real estate agent who is fully committed to your search. While some brokerages may offer Non-Exclusive Buyer Rep Agreements, I (or we) work exclusively. This ensures that I can dedicate my full resources and commitment to finding the perfect home for you.
I really don’t feel comfortable signing an agreement like this.
If you’re uncertain about signing, it usually means there’s a concern or question I haven’t addressed. Is there something specific that’s holding you back?
What if I want out?
If at any time you’re unhappy with my service, I ask for 10 days to make things right. If you’re still not satisfied, I will release you from the agreement, provided we haven’t signed a purchase agreement with a seller. Note: Releasing a client from an agreement may require brokerage company permission, and it’s a decision that doesn’t have to be taken lightly.
What if I don’t want a lengthy contract?
We can adjust the time frame of the agreement to suit your needs, whether it’s for a shorter duration or a specific number of properties.
Closing the Objection:
After our discussion, do you feel confident that I am the right agent to represent you?
If yes: Great! Let’s get the agreement signed so I can begin working for you.
If they disagree and do not want to sign:
OK. I respect that decision. This means we won’t be able to work together, but I wish you all the best. If you change your mind later, please feel free to come back. We would love the opportunity to work with you.
Compensation and Representation Options
Handling Buyer Compensation:
Buyers, you have control over how our compensation is handled. We have a couple of options to proceed:
I can contact each listing broker before showing you a property to ask whether the seller is offering compensation and how much. If they are, we’ll need to get a written agreement from the managing broker, which could take time.
You could choose to look at all properties that meet your needs, regardless of whether or how much the seller is offering in compensation. You have the option to use the ‘Seller Agreement to Compensate Buyer Brokerage’ addendum or sales contract paragraph to ask the seller to pay the brokerage fee at closing. This is the fastest way to facilitate showings and accommodate your schedule.
The Hard Way:
Buyer agent contacts the listing agent before each showing.
If the listing brokerage offers compensation, they must send the offer to the buyer’s brokerage.
Buyer is informed whether the compensation covers the agreed-upon amount.
Buyer should still use the sales contract to ask the seller to pay any difference.
The Easy Way:
Buyer agrees to compensation in the representation agreement.
Buyer agent educates the buyer on how compensation can be handled.
Buyer agent shows all properties the buyer wants to see, with no need to contact the listing agent beforehand.
Buyer uses the sales contract to ask the seller to pay compensation.
For Buyers Choosing Only to See Properties Where the Seller Compensates the Buyer Brokerage:
While I will respect your preference, this approach may limit your options. There’s no reason to miss out on a potentially perfect property due to a seller’s decision or a listing agent’s mistake in marketing. You always have the right to ask the seller to cover the compensation, whether they initially offered it or not. I recommend seeing all properties that meet your criteria and letting you decide, rather than limiting your choices.
Handling Buyers Who Want to Buy Without Representation (Directly from the Listing Agent):
If you choose to buy directly from the listing agent, be aware that the agent represents the seller, not you. You would be forfeiting the services and representation I provide. I must emphasize that I work for the seller in this case, and everything I do will be to their benefit. If you’re comfortable with that, I’ll need you to sign a form acknowledging that you’re aware of this, and I advise you not to disclose any information to me that you wouldn’t want the seller to know.
