Clockwise from top left: Howard Hanna agents Kim Crane, Jason Sekody, Kelly Huff and Ryan Shedlock
Editor’s Note: The Buyer-Agent Playbook is a new iteration of RISMedia’s biweekly Playbook segment, specifically centering on buyer agency and how agents are navigating the changes and trends in a post-NAR-settlement environment. The series will provide brokers and agents with insights and information to ensure they not only survive but thrive in these challenging times. Industry professionals explain the strategies they’re employing and unique ideas they’ve formulated. Tune in every Thursday for another addition to the series.
“I’m not scared. In fact, I’m excited. I’m excited to show people what we’re worth.”
Such bullish sentiments from Howard Hanna agent team leader Jason Sokody fly in the face of the alarm and confusion that has permeated the atmosphere ever since the Burnett vs. NAR verdict, not to mention the March NAR settlement, which has started the clock ticking on new buy-side mandates.
Sokody, who hails from the Buffalo, New York region, and three of his Howard Hanna peers from Ohio, Indiana and Pennsylvania, sat down with RISMedia last month during the company’s biannual conference, HannaCon, to take part in a special buyer-agent focus group. Held at the Rosen Shingle Creek resort in Orlando, Florida, the three-day HannaCon event welcomed some 2,000 agents and executives from across the Howard Hanna multi-state footprint. Not surprisingly, the new buyer-agent commission protocol was a prominent topic, both on the educational agenda and among the conversations taking place in the hallways as real estate professionals scramble to adapt to the forthcoming landscape.
The four agents assembled for our interview, however, represent a contingent of real estate professionals who are already out in front and ready to succeed on the new playing field. Like Sokody, they’re not afraid. While realistic about the unknowns coming down the pike, the group remained unruffled, secure in both their ability to serve clients and be properly compensated for the value they provide. They’re confident and they’re prepared. And that has given them an important competitive advantage.
Amid the Chaos, Opportunity
While there will undoubtedly be many logistics and details to field as the rules and practices surrounding buyer agency unfold, this group of Howard Hanna agents see immediate opportunity in the situation, beginning with the chance to correct an erroneous narrative.
According to Kelly Huff, leader of the Huff Homes Team at F.C. Tucker, a member of the Howard Hanna family in central Indiana, the Burnett verdict and ensuing NAR settlement have people buzzing.
“I have been getting a mix of stuff and most of it is incorrect,” she says. “I have people in my sphere and on social media reaching out saying, ‘Hey, I read that buyer agent commission is going away.’ And so, I’ve had to have a lot of dialogues with them explaining that that’s not necessarily the case. They really don’t know that the crux of it is that we’re not able to communicate (a buyer’s agent commission) on any MLS. They don’t realize that all these headlines have stemmed from that one basic principle.”
Such confusing media messages have created a rare opportunity to connect with clients and prospects, explains Huff. “When somebody comes to me with, ‘Hey, I saw the headline—what’s going on with real estate buyer agent commission?’ I say, ‘Oh, that’s a really great question. Why do you ask?’ And then we can have a very organic and authentic dialogue,” she says. “If somebody’s reaching out to me wanting to talk about real estate, that’s wonderful.”
Like Huff, anyone who is a part of the residential real estate ecosystem has frustratingly witnessed the wrong twists and turns the post-Burnett narrative has taken, misinformation that seems to compound daily. As Sokody says, that’s because “negativity spreads a lot faster than positivity.”
And that’s not necessarily a bad thing. Sokody sees the amped up discourse as an opportunity, presenting a chance for professionals like himself to get out in front of the competition. He refers to it as “occupational Darwinism,” an apt description as the industry heads into survival-of-the fittest mode.
“The truth of the matter is is a lot of hard work—a lot of connections, a lot of psychology,” he says. “And what I see moving forward is more documentation to make sure that each side understands the representation, and an increase in value proposition, especially on the buyer’s agent side.”
For Kim Crane, team leader with the Kim Crane Group at Howard Hanna in Cleveland, Ohio, this more communicative, more detailed level of client communication is “pretty much business as usual.” The 22-year veteran has always made sure clients understand the value she provides and how she gets compensated for it.
“We have a high average sale price, and my clientele has not questioned my value,” says Crane. “They just trust that there’s value in what we do.
Sokody is equally as confident. “I’m not scared at all,” he says. “This is change, and change is necessary. It’s not evil. It’s a good thing. It allows for discussion, and it allows for open-ended and candid conversation.”
Communicating Value to ‘List the Buyer’
Having detailed conversations with clients and prospects in the new era of buyer agency is essential to demonstrating a buyer agent’s value and, therefore, commission-worthiness. According to multimillion dollar producer Ryan Shedlock, approaching his ninth year as an agent with Howard Hanna in Pittsburgh, Pennsylvania, the value-prop conversation needs to begin with an education about the real estate transaction itself. That’s why, when he gets questioned about the lawsuits and commissions, he says, “Let’s talk about the process first.”
“We talk a lot about value proposition from a personal level—what does Ryan offer to a client?” he explains. “But I think the biggest miss, and I think where a lot of came from, is that we don’t talk about the profession’s value proposition.”
With new clients, for example, Shedlock begins by getting detailed about how the client-agent process operates. “Not what am I doing physically every day for you as a client, but what does that whole process look like? Forget the number, forget the dollar amount. People then get more comfortable because maybe they came into it thinking, ‘geez, you’re making all of this money and I’m not sure it’s justified.’ Maybe that’s because they just don’t know the profession.”
As all four agents agreed, the key to winning in the new buyer-agent landscape is providing as much transparency as possible. This also means being upfront about what you don’t know, says Sokody. “The truth is, I don’t know the answer because nobody knows the answer about where this is going,” he says.
Transparent, educational conversations that make clear the value of both the agent and the real estate profession as a whole will be essential for “listing the buyer” in the new era of buyer-agent contracts. It will also require an emphasis on old-school, relationship-building people skills, the agents agreed.
“Let’s get away from technology for a minute,” says Sokody. “Let’s embrace a handshake. Let’s figure out the enunciation in people’s voices. Let’s figure out their body mannerisms. Let’s figure out how they’re talking to us without speaking.”
Listing the buyer will also require a deep well of support materials, such as buyer’s-agent information packets, and the strong reputation of one’s local team, brokerage and brand in the marketplace. “These things have to be touted,” says Sokody.
Shedlock also emphasizes the value of being able to offer a full menu of services when it comes to listing the buyer. “It’s a one-stop shop,” he says. “‘To be able to say, ‘I’ve got title, I’ve got insurance, I’ve got mortgage’—that in itself is its own value proposition.”
Having the Contract Conversation
Of top concern among buyer agents as the industry approaches the August 17 deadline (as of press time), is asking buyers to now sign contracts…and potentially be responsible for paying their agent a commission.
For many agents, this is new territory. For Crane, this has always been part of the process, viewing the contract as a way to establish mutual loyalty between herself and a client. Signing the contract also gives Crane’s buyer clients access to as many listings as possible in a tight inventory market.
“They want my network, and in order to do so, we have to have an agreement,” she explains. “When you have a buyer who says, ‘I’m going to work with a bunch of people and see who finds me something first,’ well then, I’m not your person. I look for loyalty. If you’re going to play the field and talk to a bunch of agents, then there’s no loyalty. So, this just puts it in writing that we have a commitment to each other.”
“As soon as I saw what was starting to happen, I said, this is a massive opportunity for us to grow and do better,” says Huff. “So, I started putting together systems and buyer consultation guides for my team members. The buyer exclusive agency agreement that our Indiana Association of REALTORSⓇ provides, the company didn’t love it or think it was right for our buyers. So, we have our own and we’re utilizing that right now. The more you start having these conversations, the easier it becomes for you to talk to people. It’s just so nice to be able to reiterate to ourselves, but also to the clients, our value.”
According to Shedlock, agents shouldn’t fear the commission conversation with buyer clients as it’s ultimately nothing new in areas where buyer agency has been common practice. “It’s scary if we’re saying this is a brand new idea, whereas really it’s just a change of how is allocated on a settlement statement. I would never want a client to see that at the end of the transaction and say, ‘Hey, where did this come from?’ At the end of the day, they should get that settlement statement and say, ‘this all looks good.'”
And for buyers who express concern about signing the contract, Sokody suggests the following dialogue: “I want exactly what you want. So our goals are completely correlated—if I don’t get you what you want, you don’t have to pay me what I should get. At the end of the day, you don’t pay anything unless I bring you what you’re looking for.”
Sokody also emphasizes the need to have real dollars and cents conversations with buyers, providing a level of detail regarding the future return on investment of their home purchase. He advises saying, “Hey, this is something that you might be paying up front right now but look at the cost of this down the road. You’re making an investment.”
The Support of Strong Leaders
While agents in the new landscape will need to strongly advocate for themselves on the ground level, sustainable success will take leadership from forces larger than themselves. Agents will need to lean into both their brokerage and brand, as well as leadership from the industry at large.
All four members of the focus group agree that they are in good hands with their Howard Hanna family, who is covering all the bases by providing agents with an understanding of the legal landscape and providing them with compliant materials and targeted training in order to make the coming months as seamless as possible.
” is not an easy path from start to finish, and clients want the best of the best, and that is what Howard Hanna provides,” says Crane. “We’re able to show our value proposition. I do think the smaller companies that don’t have the training that we have will lose out.”
Shedlock appreciates how Howard Hanna has been able to keep agents up-to-date and in the know in a rapidly changing environment. “Howard Hanna does a great job of supplying us with information, which is nice because a lot of us don’t have time to go digging for things,” he explains. “I’ve gotten almost everything that I’ve needed from the company, which is wonderful.
Looking ahead, Sokody stresses the need to stand by while things continue to shake out. “I think that we remain calm and we wait for additional details while we prep ourselves for what is going to be inevitable.”
And Shedlock reminds everyone to stay focused on sellers, too. “We’re so focused on the buyer side of things, but for me, I’m talking to sellers in advance now and saying, ‘if you want maximum exposure, I’m encouraging you to offer a great compensation because you’re going to bring more buyers to the table. If you’re looking for those FHA and VA buyers, you might have to come to the table, you might have to assist.’ We need to talk about it now.”
Crane, meanwhile, relies on the simple yet powerful advice made famous in the movie Jerry Maguire: “‘Help me help you.’ Help me help you get the most dollar. And eventually, hopefully the lenders can help us navigate how we can finance it.”
