A real estate agent sits at a table with a Black couple signing a contract.

Post-verdict picture: Denial, anger and rethinking buy-side pay 

During a webinar, T3 Sixty leaders acknowledged that emotions are running high as they talked through potential implications of the Sitzer/Burnett verdict.

November 7, 2023
4 minutes

Key points:

  • Jack Miller, president and CEO of T3 Sixty, said he sees the industry experiencing the “seven stages of grief” following last week’s verdict.
  • Miller and co-host Paul Hagey, T3 Sixty EVP of publications, suggested that there are now opportunities to explore new compensation models.
  • Changes to buyer agent compensation will likely have negative impacts on industry professionals and consumers, they warned.

Last week's verdict in the Sitzer/Burnett case has left many in the real estate brokerage world wondering what the future looks like for agents — but the time to act is now.

That was the message from Jack Miller, president and CEO of T3 Sixty, during a webinar on Nov. 7 co-hosted by Paul Hagey, EVP and editor in chief of T3 Sixty publications. (Note: T3 Sixty and Real Estate News share a founder, Stefan Swanepoel.)

Miller acknowledged that many real estate professionals see the verdict as a threat to their business and livelihood, which is likely to prompt an emotional response. And the industry as a whole appears to be going through the "seven stages of grief," Miller remarked, as agents and broker-owners process what has happened and what is yet to come.

"There's a lot of denial. I'm seeing some bargaining. And then there are some people who are understandably angry," Miller said. "I think it's important to acknowledge that as much as it is a legal ruling, it's a civil case. I think it's easy to react emotionally to this, but the fact of the matter is, it's not up to us."

Instead of focusing on a legal decision beyond their control, said Miller, agents and other industry professionals should think about how the verdict could impact their business — bearing in mind that litigation continues and appeals are likely — and take measures to prepare themselves.

Miller and Hagey outlined several implications for brokerages, agents and the industry as a whole. 

The burning question: How will buy-side agents be compensated?

One of the biggest questions on the minds of many real estate professionals right now is how the verdict will affect their compensation and livelihood. 

"Let's be clear: In a new regime like the one that we're moving into where the buyer side commission is not guaranteed, the compensation field in the MLS could go away as a result of either these lawsuits or regulatory action," Miller said. "So there are no guarantees now that when you show a home as a buyer's agent that you will be paid."

But even if compensation is not guaranteed as it is today, there could be opportunities for new agency services and compensation models, Hagey suggested. 

"If compensation gets decoupled on the listing and the buy side, one interesting implication that could happen is like in times where it's really hard to sell a house, maybe the listing broker compensation goes up, or if it's really hard to buy a house — like it is now in a lot of markets — maybe the buyer broker should charge more," Hagey said. 

Other possible arrangements may include buyer's agents working on a monthly retainer or for an hourly fee, Hagey added. 

Effects on consumer and agent behavior

If compensation practices change, both real estate professionals and consumers would be impacted, Miller and Hagey said. 

Buy-side agents will need to better communicate their value to buyers who may have perceived agent services as "free" — and don't understand what they're paying for. Along with explaining and promoting their services, agents should also be prepared for objections and know how to respond.

Still, without a guarantee of compensation on the buy side, some agents might end up leaving the industry. And on the consumer side, if buyers have to pay for agent services directly, they might simply delay a home purchase, potentially reducing opportunities for agent and broker compensation. 

"The challenge is, if I have to pay my agent out of pocket, how am I going to pay more if I can't finance the buyer side commission into the transaction as it is in most cases today," Miller said. "That will then limit your ability to pay."

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