12 Comments

Since the offer of compensation is to removed from MLS, it would be best, I think, to remove it from the Listing Contract as well. With that, the Seller documents the listing agent compensation on the listing agreement and the Buyer documents it on the Buyer's Rep Contract. Now the conversation with the Seller is "we should anticipate that the Buyer will include the compensation for their agent as part of their offer. We will review that aspect of each offer together along with all of the other terms that may apply to each offer." Much more direct and perhaps the point of the lawsuits giving control back to the consumers. If Seller's are required to indicate an amount of compensation or a yes/no flag of some sort, however, I think the "steering" conversation becomes the "driving" conversation alerting the Seller that some Buyer's will "drive right by" if including their agent's compensation in their offer is a required part of their overall plan.

Expand full comment

IRL, the advent of Zillow made it easy for buyers to see homes on their own, with or without their agents' blessings. Indeed, many of my clients only wanted my expert assistance once they'd found "the one" (or didn't, as was so often the case). So much for front end steering, at least here in L.A. As far as the "back end steering" that Sitzer purports to solve -- a problem that didn't exist, by the way -- it just takes transparency completely out of the game.

Expand full comment

Bright MLS did a study to look into steering. Not only did it not find any evidence of it, the study proved the opposite.

Expand full comment

Absence of evidence does not mean evidence of absence.

Expand full comment

Ummmm. Yeah. OK. Sure.

Expand full comment

I thought this would fade away but he just posted an unhinged video response on YT. 🍿

Expand full comment
author

Sad.

Expand full comment

Sorry, Rob. You are wrong on this one. The buyer ultimately does decide which properties they want to see (now that they are ultimately responsible for their agent commission). If they don’t want to see a property that will not cover their negotiated buyer agent commission, there is no more discussion. I’m not sure why this is difficult to understand.

I agree listing agents, ‘on the back half’, can influence a seller regarding offering a buyer agent commission (depending on how it’s presented), but I’m at a loss to see how a buyer, moving forward, can steer. With the required buyer agency agreement, buyer agent steering, by default, is a thing of the past.

Tell me why I’m wrong.

By the way…is it safe to say that attorneys, in many cases, are wrong? Both sides don’t win the same case.

Expand full comment
author

Thanks for the thought, Steven.

I do want to point out that you actually agree with my analysis... since steering includes the "back half". In fact, the back half is where the action is since that's how all of the listing brokers got sued.

With required buyer agency agreement, if a listing agent still uses the threat of steering to get the seller to pay more, that is going to be a problem. In fact, that's the whole problem and always has been.

Sure attorneys are wrong. I'm eager to find out how I am wrong in this instance.

Expand full comment

I agree with the back half...to a point...and how its presented. I also do not agree entirely with "how all of the listing brokers got sued".

The listing agents are going to mention the relationship between [lack of] commissions and showings...or at least they *should". This is important to sellers to know this. Again, it's simply how it's presented. "Buyer's will not view your property unless you pay their commission" might not be the best approach. However, something like, "If you were a buyer and didn't have the money to cover the agent's commission, which properties would you want to see first?" One of these ways might be a better approach.

With that, based on your response, I'd also like to point out that you actually agree with my statement, that BUYERS cannot steer. With the buyer agency agreement, I think the elimination of the CC field in the MLSs and search portals is overkill because [from a buyer] there can't be steering.

Expand full comment
author

Greg and I just recorded an episode of IR on this exact topic, trying to get something positive out of the clown show that is Lamacchia.

Long and short of it is, if you were acting in the selling client's best interests, you would communicate that very differently from "Offer compensation, or else!" Intent would translate most of the time into actual words and action. More on the podcast.

Of course buyers cannot steer; they're the ones being steered. But using the fear of that is in itself steering, which is my point. So glad we both agree. :)

Expand full comment

When NAR finally realized that buyers were interested in their own representation back in the 90s they tweaked seller sub-agency by adding a few rules, but left commission-based compensation the linchpin of the "new" service. A true fiduciary relationship starts with Loyalty and all the steering shows that Realtor buyer agency is not a fiduciary relationship. It's akin to putting a saddle on a pig and calling it a horse.

Expand full comment