Agent Commissions Under Attack: What Will & Won't Change

With the recent rollout of new NAR rules nationwide on August 17th, there continues to be a lot of noise and uncertainty about the future of commissions and the role of the buyer’s agents.

CINC CEO, Alvaro Erize, is here to help teams and agents put the changing market dynamics in perspective and share his view on how best to chart a path forward in the new landscape.

In our latest webinar, he discusses: 

• An examination of past threats on GCI and their effects over the past 2+ decades
• Current threats post-NAR settlement and expected outcomes explained
• How to lean into growing opportunities for top teams and agents in this new world

Watch the full video or read the transcript below. 

Transcript

Alvaro Erize: If you take two things from this webinar, the first one is that Redfin offered a 1 percent for 10 years and spent 500 million in marketing. And was not able to change the agent commission. The second one is the president of the United States and every major news outlet spent six months telling you and telling people that they should not pay as much for the buyer agent and has had less impact than any normal fluctuation of the previous years.

[Intro]

Richard Kaiser: Hello there. I'm Richard Kaiser, the Director of Demand Generation and Sales Operations here at CINC. I'm here with our CEO Alvaro Erize. We're here in lovely Atlanta, Georgia. If you look Alvaro's got a better view than my desk. You can see the Braves Stadium back there. So quick background is as people are filing in here.

So a month ago, Alvaro gave an internal presentation about what we see with all the NAR changes. What we see is the future of the real estate industry and how it. Intersects with some of the changes on the technology front and where the marketing department thought our our real estate clients and also a lot of other real realtors out there, they needed to hear this.

So we pushed Alvaro. Alvaro said, I said, set aside some time to share his thoughts on what he sees playing out. Before we get started I do have to give a legal disclaimer out here because we get here in legal questions. I have no training in law. I'm not a lawyer. Alvaro, he's got strong opinions. He's also not a lawyer.

Alvaro Erize: Not giving out legal advice here. I apologize in advance for butchering people's names. I, run with the advantage that almost no one can pronounce my name correctly. So including Richard.

I want to have the chat here. Although, Richard will let me know when people ask questions. I've just seen that coming. Hey, Jamie, how are you doing?

CINC Client: Hey, I'm good. I actually run an Internet lead team for my office that I coach and train on CINC. And it's new construction. So we'll see it's I'm waiting for it to close.

I was going to wait to share it. I did tell my account rep, but the money goes, the earnest money goes hard on September 26th and it's like a 500, 000 deposit. So we're going to look real good after September 26.

Alvaro Erize: For people that are not reading the chat, how much is the buy? Say again. What's the price of the buy for people that are not seeing the chat?

CINC Client: It's 6, 250, 000 cash buyer coming from California into Nashville, Tennessee, and took nine months of my agent working with the lead to nurture it and get it under contract. And that's a good teaching moment for my whole team because I always tell them you just keep reaching out until you reach a person.

What you think is bogus is probably not and it just proves it. And we're actually, we've got 11, we've got 10 closed this year and another one under contract. So we're going for number 11 and other people are working. So it's been a great year. We've only been on a year and a half, by the way. Only been on CINC a year and a half.

Alvaro Erize: Love it. Love it. That's great. Great to hear. We know it's a matter of consistency and fighting hard for it. And so congratulations on running a good team that, that keeps pounding the phones and and gets results. Thank you. Love your system. And Vanessa, 40 million. Wow. That's amazing.

I think that was before your time, just. But the biggest message from that particular lead was the entire team missed it. It went round and round Robin and everybody thought it was fake. It came to me eventually as the broker owner. I called and eventually that turned into a 40 million, both sides of the deal.

Love that. Wow, that's awesome. But I'm going to jump into it to tell a little bit of people why we're here. So as Richard advanced I did this presentation a month ago internally for CINC. A lot of everyone at CINC, not everyone is a realtor at CINC, right? And so they're all like, what's happening?

Will this change the world for realtors? As we are seeing everyone, we're reading everywhere. And I had to give our opinion that I will say this is my personal opinion. It's not even since the dissolvers opinion. Of the history and the future of the commission, right? And usually I tried to make my webinars very to do oriented, right?

What does this mean for me? What do I do different tomorrow? And there is a little bit of that here, but mostly we're going to be doing 2 things. We're going to look at the threats that have attacked the agent's value proposition in the past and see what happened with those sets. And then we're going to see, okay, but then with the current threads that are very real and that are.

Basically scaring a lot of this industry, what should we expect and what can I do to prepare? So those are the two main things. It's a little bit of the history lesson at the beginning, but I think it's extremely relevant. I know so many team leaders whose buyer agents are saying, do I need to change jobs?

Do I need to get out of the team and go start waiting tables, right? Which is what I was doing before I was pulled into this team. And I want to give good arguments. We are going to share the slides. I asked. As a personal favor that you're careful with disseminating this because it is an opinion and I don't want to get stuck with it.

But but it is something that hopefully you can use as you plan yourself for the next year, but also, when you need good answers for your agents out of, hey, what's happening, what's going to change, what's not going to change. Does that make sense? And again, I'll go through this right in the chat when you have thoughts and Richard will interrupt me and ask a question if you have.

I'll jump into it. Now, if you've been in this game for a while. You've been when they told you that the agent was going away, right? This is not the first time that you're hearing that. And I have three specific moments that I'm going to go after. First, when they told you, oh, all the tasks that the real estate agent was doing are now going to be done by technology.

So the real estate agent is going to cease to exist and is going to get replaced by technology. Then the second one is a. Oh okay. It didn't go away because of technology, but the commissions are crazy. These real estate agents are insane. They're charging these huge commissions. Obviously, this is all a scam and it's all going away the moment the true competition comes into play.

That was the second that we've heard. And if you've heard one of these, write one, two or three on the chat so that I know if I, if this is true or just, I imagine that, but the third one is Oh, wow. It's all going to be replaced by centralized entities now, whether it's the eye buyers or whether it's still a flex or whether it is this, there's someone that is going to have it and do it all in one is going to do it so much better than all of these crazy agents spread around.

And so I wanted to address these 3 specifically and see when they happened and what really happened. Through time, right? And again, feel free to interrupt me. Richard will pick up if you have a question, but if not, I'll keep going. So the first one is. Like you need an agent to sell your home basically because you don't know how to price your home.

So when Zestimate appeared, it was like, okay, this is done. We don't need the agents anymore because we know how much our house is, worth now. And then but you still have to share it and you have to market it. And that's why Visbo. com appeared and all these companies that were basically Do it yourself fist bump, right?

And you can have that article from the Wall Street Journal back saying this 6 percent thing, it does not exist anymore. People are going to start selling their houses on their own. Now, if I ask you, this is a number that many of you know, what percent of your, what percent of transactions do you think happen?

Sales that are, that end up being fist bumps, what would you say it is? Lynette or Vanessa you can venture out live if you want. 0%. Come on. Some people percent, 3%. Some people sell their homes. There's a 5% there, Melinda, 12% by Jason. 11 by Emily. And so you are all pretty close here. Not Emily, not Lynette, who was too optimistic, but but you're pretty close.

And this is a widely shown, shown percentage. Basically, what you can see is it has been going down in spite of all these do it yourself praise. The truth is, this was have been going down. The 2023 was the lowest year at 7%. And I must say, a lot of those are people selling to their family. If you take people selling to someone they know out, that really makes it that are more like what Lynette is saying, like 1, 2, 3%.

Because most of those Fizzbuzz are just people that know the buyer and go I'm not going to pay an agent if we are all in the same page here, or I'm selling it to my son. So that I think probably hasn't surprised you. And the other number that is not going to be a surprise to you is this, because NAR wildly advertises this number, which is, Oh, Fizzbuzz actually sell much lower than, than normal people represented by an agent.

Now, what do you think this means? NAR tends to say. This is, this means that when you sell on your own, you're going to undersell for 20%. That's not true, right? We know that. I think that the, main thing here is not that, what this is telling you is that I'm going to say harshly, poor people sell their homes on their own, right?

Rich people are not choosing to sell their homes as a fist bump. The average Person selling their home on their own is usually a well below the average home price. Now, this is because a lot of physicals happen in rural areas. And again, it happens with a lot of selling that goes between people that know each other, right?

And for all those reasons, also, there's a discount sometimes if you are selling your home to your son. So basically, this does not really mean that if you sell without an agent, you're going to undersell your home by 30%. You may undersell it by five or 10. Not 30%, but it does mean that all this graze of like intelligent people sell their homes on their own.

The people selling $10 million homes don't believe it. So my first point here is the whole Facebook raise went nowhere. And today only 7% of homes get sold by their by their rate by, their owners. And Satna has been going down. Now there's the opposite side of that, which is the buyers, right?

And this is where the real craze of the two thou, early two thousands came, which is. The main reason to buy a buyer agent was to help them find you a home, right? And they had these folders with, they have these homes where there's folders with all the homes that you want to look at, and you cannot get to that folder on your own.

So you have to use an agent. When Zillow appeared, suddenly it's who's going to need an agent anymore? A buyer agent. So seller agents, you may need, but buyer agents, you don't. It turns out that If you ask people that actually bought a home, and you ask them what were the main reasons where the agent helped them, finding a home is almost to the bottom of the list.

It's seventh place in this thing that I'm telling you. And so on the buy side where you, there's a much more like, how many of you have heard Oh buyer agents are worthless. Like we don't, you don't really need it. Like that's the craze today, right? That's what you're hearing today. Correct.

So what do you think is that percentage? What do you think is the percentage of people that buy a home without using an agent?

Yeah, you have to throw something. Vanessa, you need to give me some, number. You're muted, Vanessa.

Well, 7 percent says Denise. Okay. And that, again I've influenced you all towards, towards low numbers. I think it's a lot lower to me. I feel like I'm going to put it out there again. 2%, 3%, 5%, 15, 7%. I'll give you the number here. This is the number of people that buy with not using an agent, right?

So you are at 10, 12%, very similar to the fiscal, right? In the end, again, there is, you have institutional buyers there that have their own in house people. Sometimes you have different things going on. But the biggest takeaway from this to all of you should be it hasn't changed through time.

Right in 2008 or 2023, it's more or less the same. In fact, it's lower today than it was in 2008. And you can see that in buyer markets, it becomes a little higher, right? When you can, when you don't have competing offers and all of that, it's easier to do it on your own, but then tougher markets make it where You go back to using an agent.

And so that's why 2008 was higher than 2011. But overall, the final point is all of this meant nothing, right? All of this grace of replacing the agent tasks has not made a difference on, on who people use of how many people use an agent. And that leads me to the most, for me, if you take nothing else from this webinar, I'm going to use this point as the main thing of why.

I don't believe that any of the changes that are coming now with NAR, which we'll get to at the end, make any difference, which is the main argument of everything we've been hearing is, oh, no one knew that you could negotiate commissions, right? Or no one actually like this. There's this collusion going on through NAR that allowed commissions to be high.

Here is the main player that disabuses that notion completely. Redfin has been selling at a 1 percent seller commission and then a 1 percent buyer commission giving a 2 percent rebate for a decade now, right? It has been doing, and some people I say but Redfin is just one player. There's been a lot of discount brokers, right?

But Redfin has been the biggest, right? How much money do you think Redfin I want to ask this, I'll tell you, this is how much money Redfin has spent in marketing to tell people that they are giving a 1%, right? So think about this. Redfin is a company that has come into this industry and said, I'm going to do it for a third of what everyone else is charging, right?

And I'm going to spend 500, 500 million in marketing to tell everyone that I am doing right. And in fact, Redfin has lost a billion dollars since 2017 to now. In any other industry, when China does this, we scream for tariffs, right? Oh, they sell cheap to destroy our industry, but it's at a loss. This is what Redfin has been doing.

It has been, and look, I'm not trying to be aggressive with Redfin, but this is, Economically speaking, what Redfin has been doing has been offering a third of the price that everyone else offers in this industry, has spent a ton of money on marketing so that everyone knows that they're doing it, right?

And They've been doing it at a loss. It's not that they've managed to found the economics that make that work. In fact, anyone that follows Redfin today, I'm an investor in Redfin knows that they've been changing their model more towards the traditional model, which is the one we know works and that's why Redfin has been bumping up a little bit of stock, right?

But this idea of the 1 percent agent has resulted in a billion dollars of loss. And so I'm going to ask it one more time. How, which percentage of the industry do you think Redfin has?

Three percents at 70. Okay. 500 million dollars to get three percent, one percent, two percent. 7%. Jamie? 2.5%. Four. Okay. I'm gonna reveal Lynette, do you wanna throw, one before I reveal ? I'll go. Can go with the two and the three? . Two and the three. You were all too high. All of you? Absolutely. All of you were too high.

Redfin at its best moment was 0.8%, 0.8% of the transactions. This is a company that has offered in any other industry. When I went to Stanford here in the US, which was an awesome experience, I learned that if someone could offer a third of the prize in any industry, in a sustainable manner, they're going to be able to dominate.

Not in this one. And we'll talk about why, right? But here's a player that has been a third of the prize, spent a 500 million and has gotten no penetration on the market. Why? Because people don't care. Why do people don't care about paying 10, 000 to an agent? Buyers, because it goes into the mortgage because it's part of their 600, 000.

And so we're going to talk about whether that changes, whether the DOJ is going to split that up. But here is the, and there is a quote that I don't hear that I have here from Glenn himself, the CEO of Redfin. When all of this happened, he said, We've tried the thing of getting people to buy without an agent.

And we've discovered that people do want representation, right? They've been trying this for 10 years and they failed. So anyone that says that you didn't know that you could negotiate commission, you didn't know that you could sell your home for 1 percent is lying. These people are have been living under a rock.

These people have been making a big effort. They spent a billion dollars. For you to be able to buy for them at 1 percent and no one wanted it. This for me, and we'll come back to this later in this presentation, is the biggest argument of why this is all BS. Why this whole argument of the collusion to bring commissions up, the commissions of the real estate agent are correctly marked by the market and they're the evolution of the value that the agents have been presenting for all these years.

And when you have a discount player that comes in, not only did they not succeed, you would say maybe they didn't get market share, but they forced the industry down. This is the evolution of the total agent commission in the last 10 years in the United States. And you can see that the. Introduction of the discount brokers has had zero influence.

You've had a fluctuating commission that the response to the market when there's a seller market sellers are willing to pay less because they think they can sell their homes easier. Those things are the things that matter in the agent commission. It's not, it's not I wonder why then our attendance brought didn't bring this up.

I won't go deep into the lawsuit, but the main reason is that the lawsuit is about something else, even though people talk about the collusion and all of that. The lawsuit is a very specific technical thing about whether the disclaimers were correctly done to the seller that some of their commission was going to be paid to the buyer.

So that's why this did not happen to be such a big argument as part of the lawsuit itself, but it should be an argument on the public discourse on all of this crazy attack that the real estate agents are having. And again, I want to pull it back a second here and say. This is what your agents need to know, which is the agent commission has been negotiable and fluctuating through the last 10 years.

And it's still where it has been all along, which is between five and 6%. It varies by state, it varies by different things, and it's always been fluctuated. Nothing should change that now. And then the third one, the third argument, let me see how I'm doing on time. The third argument is, but now if we have a centralized person that can do this better, it's going to replace this whole broken system, right?

Same way that Carvana was going to change the way that you buy and sell cars in the U. S. This is going to this new buying system is going to replace. And of course, here, I won't even ask you because the end of this story, because it's closer to your memory. But. It was in 2021, iBuying was going to replace it.

I have a professor, one name from Stanford that invited me every year to talk about real estate and he was a huge proponent that iBuying was going to replace, normal buying and selling, right? You're going to have these big entities, right? That is going to monopolize this. The best that they got, the best that they got before it all came crashing down was 1.

23%. In the process of doing that,

they lost billions of dollars. Opendoor offer Pet the worst of all. Zillow. Zillow came in, Zillow. ZEO came in saying this is the biggest thing since Slide Red. All everything that Zillow did before, which was super valuable, what Zillow did before, which is moving home, searching to the hands of the of the searcher.

All that doesn't matter. It's all going to be I buying, it's all gonna be I buying. This is the future. A year later, 25 percent of their workforce is gone. They're closing business. And it's not because a mark because the markets turned and they didn't see it or anything like that. It is because the market is a great force that has operated very efficiently in the U.

1. When we talk about you hear people saying nowhere else in the U. S. You, have buyer agents and seller agents and yes, the U. S. is the most efficient real estate market in the world. And you do have representation on both sides in Argentina. If you want to buy a home. You have to go to five different brokers and each one is going to show you only the homes that they're listing.

Because you have no representation. You're in the hands of these people that are on the other side and you have to trust government through a public notary that they are going to defend your interests in this transaction. Luckily, the U. S. was built on some basis of markets and where each party has their defense.

Right? And. If you're getting a divorce, you don't want to use your spouse's lawyer, right? That's not what you do, right? And so in all of this has evolved in a way where these, whenever these centralized entities have tried to take it away from the agent, they have failed. And so that's, In a nutshell is and I didn't want to make this too long because the story and you have lived it, but I do think that we just walk through these things without stopping to think about that.

And every time that we get scared with the next 1, we don't stop and remember how scared we were 5 years ago. I was here 7 years ago when. Redfin was going to end the 3 percent commission, right? And Redfin has been longer here, but that was when they did the big push. And for me, it's important that you have this, that when you're talking with agents that have been in the market, I don't know, Lynette, what's the average that your agents have been in the market that are in your team?

They've been on average within ABIO, I'd say 7 years. Eight years, some that are one, two years, and we have others that have been 30 years. And so if I asked you the median, you're going to have many more on those three, four year marks, right? And we forget us that have been in this game for a little bit, that They haven't lived through these things, right?

When they hear now that the commission is completely over inflated and it's BS and it shouldn't be where it is. They forget that was said 7 years ago, right? And they forget that Redfin has spent billion dollars trying to sell real estate at a discount and has failed, right? And so it's. It's important that we bring this up that we tell them and I'm going to address now what's happening now because some people might tell me who cares.

This was years ago. Why are we spending time on this? We're going to go on to the now in a 2nd, but I wanted to make sure that we recognize this and we have it in our minds as we now address the new the new threats.

Any questions before I move on?

Ten years, Vanessa. Ten years is the average agent in your team. You have some veterans there.

Yeah no, that's okay. Okay. Now let's talk about what's going on here, right? We have the real threats that you've been all hearing here. And I've also classified them in three. Basically you have the changes that NARA is making and how will that affect the business. We'll go over those shortly.

Then you have The actual massive push of, hey, conditions are negotiable and you should negotiate that. And those are separate from now, right? It's all been bunched together, but there are separate things. The NAR settlement actually doesn't talk about what the commission should be. And then the third one big shark there in the water.

Is, will the DOJ come in, decouple the commissions and actually make it the buyer is forced to pay the buyer commission out of pocket and that the seller is only paying for their side. So this in my mind are, this is how I classify the current, market scare. And so let's go into the first one.

So this one, I assume most of you are very familiar with. Because this is what's been most in the press, right? So we know that the changes that NAR is making are actually very specific, right? And again, let's remember NAR is not the government. NAR is just an entity that nucleates agents.

The basic things that they're saying is, one, that sellers are not required to make an offer of compensation, which we know was true before. Two, that you do need written representation before touring homes with a buyer. And three, that the MLSs. are not able or allowed to show or aggregate how much commission you're gonna, you're gonna share, right?

And so what does that mean for you? For me, that is specifically means One, the first one, that's in my opinion, doesn't change anything. And I'm going to see in a minute whether I'm right or wrong or not on that. So for me, the commissions have been negotiable all along. We've seen how they fluctuate through time, the sellers had a good real incentive to be offering this compensation, and they still have that incentive.

And I'll go to the DOJ in a second, Laura. That's my third one in this. But I'll tell you, there is no DOJ mandate. But we'll go into that. So first, okay, the fact that yes, now people know that commissions are negotiable for me, that doesn't change anything. The 2nd, 1 is for me, 1 of the most interesting if you think about the new world versus the old world of buyer agents, the biggest difference is that before most by agents operated on the world of.

Don't worry. Sometimes they said, which they shouldn't, you don't, you're not paying for me anyway, which is not correct. So just let me show you some homes. And if I find something you like, it's you're, going to use me right now. You have to face the buyer consultation just yet. Like you do a seller consultation, right?

You need to go, you need to sell yourself. You need to explain why your services are valuable and you get to, you need to get that person to say yes. And now will this Can you really not walk into a home with a buyer if you haven't signed a contract? I don't believe that's true. This is a rule from NARC.

It's not a law. You could still do it. But this gives you as an agent a perfect argument, a perfect opportunity to say to your to your prospect hey, look, in order to start showing you houses, we need to put something in writing. We can change later if you want. We can put premises for you to be able to, but we need to have something in writing.

And I think that's Very important. And we'll see at the end of this webinar. How do we think that this what tools were giving from saying to get you to be able to deploy contracts very, easy. And then the last time is. Now the MLS are not going to show whether you are as a seller, you're still the right choice is still for you to offer buyer compensation, but the NAR will not allow you to show it in the MLS.

And so this will make it that it is very important for you to have some kind, whether it's your CINC website, or whether it's a different website, wherever you are showing your listings, you need to be able to show the seller concession because this is a seller concession at the end of the day. If you think about it.

Offering to put that buyer agent compensation within the mortgage is one more seller concession, just like it is to give money to change the roof, right? And when you do a seller concession, you want to show them. And unfortunately now, because of this lawsuit and the NAR reaction to it, you won't be able to do it in the MLS.

But you're still allowed by NAR and encouraged, I think, by all of us to put that seller concession somewhere where people can see it. So you, wherever you're showing your listing, that should include whether your seller is giving this set of concessions or not. That's your fiduciary duty to your clients, right?

Writers website, agent to agent communication. Yes. Those are the right methods to be able to communicate with our agents. I am personally, I believe in, in, in free market and I believe in consumers having this information. So you need to give a place, you can always call and ask the agent, but the consumers will.

Have the possibility of looking at. So we'll CINC allow agents to input commission our website at some point. We already do. I'm going to show it at the end. You have a way of putting that circumcision within your listings so that it is shown to everyone that goes to, your to your listing and CINC what we cannot do today, although I think at some point we should do it.

Is aggregate that, but that's not something that now wants today and we're going to respect that. But we are certainly allowing you to show that in your, on your personal website. And Ricky, as I see that you say, caution still needs to be exercised. I agree and again, I'm not a lawyer and you have a direct relationship with.

All that I'm saying is. Your sellers, if they decide to give a seller a concession, they deserve to be able to show that seller a concession. NAR has agreed that they can sell it, that they can show it on their website. We are going to show it in your website. You're going to see at the end, or if you don't stay for the whole thing, our team can send you just the steps or talk to your account manager.

It's very easy to put that on your listing. We're not aggregating it. So we're only going to show the ones that you provide for yourself. So you're, we're not going to show it in some other client site, right? We cannot do that. But people that come to your site will be able to see in your listings that seller position.

Does that make sense? Are we clear on these 3 things? Again, these are the actual changes of NAR, which are not the real danger. I know people are saying all of this is what, is what technically NAR said, but the real danger here is the pressure on commissions, right? And we'll go over. The idea of the DOJ changing things because if buyer commission had to come out of pocket, that will impact commission.

If people have to pay up front for this, that would be a disaster. I am totally on board with everyone. All of the panic, fear mongering people out there that I don't agree with. I do agree with this thing, which is if the buyers had to pay by our compensation out of pocket, that would be a disaster. We'll talk in a second why I don't think that will happen.

But let's go to the, second one, the most real and present danger, right? Which are all of these. Headlines of the New York Times of CNN that are actually lying, right? They're saying things that they know are untrue, which is that the commission is 6 percent which is not that. Am I getting in trouble, Richard?

But it's that, that, now you can negotiate commissions. And before you could have all of those things we know are untrue. And I actually, and again. I don't want this to be political in any way. This is not me judging the person or the party, but I judge actions, right? This speech for me is very relevant.

So let's hear it out. Let's see. In addition, last week, the National Association of Realtors agreed for the first time that Americans can negotiate lower commissions when they buy or sell their home

on a typical home purchase. That alone could save folks an average of 10, 000 on a sale or purchase. I'm calling on realtors to follow through on lowering the commissions to protect homebuyers and folks. By the way, I'm sorry, this is not a thing against Biden, right? I'm not I know, I don't want this to turn into a big political thing.

I am talking about this particular action, which is government first saying that this was non negotiable when it always was, and second, actively the President of the United States going on national TV and saying, You should lower your rate. You need to charge less for your work, right? So that, is something that I consider deeply wrong.

I'm hoping it was a mistake, whatever it was, without making moral judgment, the action itself is ridiculous. But the bigger question here is, We've had this since February of this year, right? We've had every major newspaper going down the route of, you need to pay less, you don't need to use an agent, buyer agents don't need to make what they're made.

All of this has been in every major newspaper of the U. S. for eight months or seven months, right? And you had the president, Of the United States going and saying it on TV. How much do you think the buyer agent commission dropped? If I told you at the beginning of the year, 2. 55 percent was the average buyer commission after six months.

And the president of the United States going on national TV and saying you should negotiate your agent's commissions. How much do you think it is today? Okay. It is though. You're absolutely right. The ones that put it there, it is 2. 5. Okay. It has dropped. And this information, just to be clear, comes from our sister company, SkySlope.

Each of these data points here has over 100, 000 transactions in it. So this is not some I put 10 numbers together. There's a lot of data misuse out there. This is not perfect because it's only probably 20 percent of the total transactions of the U. S. But this is a pretty pretty big sample, right?

We're talking about a hundred thousand transactions in each of these months that I'm putting here. And you can see that it dropped by a totally negligible amount, five basis points, which if you don't knew it, that's the most normal fluctuation that agent commissions have between years, any of the years of the past Three or four years.

So all of this massive attack on the agent commission, If you take two things from this webinar, the first one is that Redfin offered a 1 percent for 10 years and spent 500 million in marketing and was not able to change the agent commission. The second one is the President of the United States and every major news outlet spent six months telling you and telling people that they should.

not pay as much for the buyer agent and has had less impact than any normal fluctuation of the previous years. But again, I did not mean to go into, political bashing. You have plenty of that in your life and I'm not here to add to it. And so my point is going to the facts and going specifically to the things that affect real estate, right?

So, please take it only as that. And then so for me, this is a fundamentally proof that And as long as the buyer commission still gets put as part of the mortgage, as long as that, then I don't think that anything will change in the buyer commission. I don't. I may be wrong, but I've given you my arguments of why and I think they're pretty strong.

Now, it does, there is one remaining shark, right? And it is the DOJ. And I will say here out loud that yes, if the DOJ decouples the commission, that will have a massive impact in this industry. If buyers are forced to pay up front for their buyer commission, there's no reason. No one wants this.

The seller doesn't want it. The buyer doesn't want it. The buyer agent doesn't want it. The seller agent doesn't want it. Mortgage banks don't want it. They're fine getting that in the mortgage. They've been fine for all these years. They've been doing it all along. They know they haven't been tricked. And so no one wants that.

But if for some bizarre reason, the DOJ really did this, that would have a massive impact. Because if people have to pay out of pocket up front, veterans are going to get screwed. Oh, sorry, please explain the coupling. The coupling would mean that the DOJ says the buyer agent commission cannot be part of the sell price.

It cannot be included, basically, in what goes into getting you the mortgage. And so you have to pay up front. You buyer, you need to pay your agent in any way you can. It cannot come out of the price of the house. That's what decoupling means. Does that make sense, Joe? Okay. And yes, I'm with Clint, right?

It will destroy low income buyers. Absolutely. It will either destroy their ability to buy or force them to buy unrepresented. So think about this. The president of the United States and the DOJ have done this amazing thing. They've managed to get first time homebuyers and veterans to not be represented and then have a ton of transactions where they're going to get screwed and they're going to be too plain.

If that's not argument enough in the U. S. where veterans and first time homebuyers are the most protected class in the world, if that doesn't convince you, I have some more arguments now. And so here on the DOJ, first of all, I really don't think that the DOJ is ever going to do something that would destroy veterans and first time homebuyers in America.

which is two classes that the government always has wanted to protect. If my word is not enough for it, you should take the DOJ's word. So you can see this is a statement of interest made by the DOJ in February of this year that everyone that was writing those headlines was ignoring. The DOJ specifically said, and you can see it there, I put a big red frame around it, specifically say, While some buyers might choose to pay their buyer brokers out of pocket, other buyers might request an offer that the seller pay a specified amount to the buyer broker.

So they're specifically saying we do not want to change that. What we want is more transparency. What we want is not to feel that this is happening at the backs of the consumers, right? Buyers and sellers need to know what's going on. We're all in agreement. But DOJ specifically say. No, that's okay.

This should still be in the mortgage for the very reasons that I just gave you. And if this doesn't convince you, I'm going to give you my final, which is this. Talking with my friend Jason Mitchell at the beginning of this a few months ago, he was like, Alvar, I agree with all of you on this, but if this now is going to be treated as a seller concession, that's going to hit on the caps of the seller concession we already have.

And I was like but Fannie Mae and Freddie Mac are going to adjust it. It's no, those are government entities. It takes ages for them to do anything, which is true. But look how quick they came out and they said out loud no, don't worry. You're still going to be able to put this, it's going to be a set of concessions, it doesn't count towards the caps, so you can do it exactly as before.

You can still do this, you can still pay for the buyer agent, if you want to, it's not going to affect anything on your appraisal, valuation, what comes with the cap. And it's not just Freddie and Fannie. It's, the Mortgage Bankers Association, which is the other people that you might say are they okay?

Like giving loans on agents commissions because they are and the FHA. So you have every government or government related agency saying out loud. This will not happen. And if the commission's get decoupled in the next year, I'm going to get a lot of angry emails for a fight that I didn't need to pick but that I'm picking anyway.

Because I have no need to say this, but I honestly tell you, I see no chance that the buyer commission is going to be forced to be paid out of pocket up the front. I don't see a government agency doing that. And that's the end of my broken English diatribe on why things won't change, right? Yes, by the way, the one saying there that it also restricts the seller.

Actually, all of these things that we're seeing are shackles put on the seller, right? The seller is the one giving the seller concession, not the seller agent, the seller is. And me as a seller, if I'm going to pay for the buyer agent, I want to scream it from the from the rooftops, right? Because when you're looking at my house, you should consider that compared to a different house that is not proposing it.

And so again I think this is, this is why I think most things are not changing. There are a few things that are changing. Let me see the time check on myself. So I'm going to go a little quickly of this because I want to tell you about things that Zync is doing, even though this is not a Zync pitch in any way, this is market and economy, but I have a few toys at the end that we want you to use.

So I'm going to get to that. The first thing is. A lot of what has been happening in all of this is I've had a ton of clients coming to me and saying, can I move my span from buyer leads to seller leads, right? That is the biggest, knee jerk reaction that I've seen from a lot of clients. And I am always having this unpopular with my sales team reaction of saying, no, I don't, we're not going to let them do things that make no sense.

And moving towards the seller business right now is probably the worst move you can make. In fact the, buyer side of online lead generation is growing faster than anything else. So if you think in 2017, only 15% of people, reported having found their agent, that they used to buy a house online. But in 2023, it's 27%.

That's an 80% growth. So with all of the other roles, you have to couple the fact that more people are now for finding their buyer agent, they're trusting online sources. Now for seller, I don't have it in a slide, it has remained flat at 11%. You are all obsessing over getting seller leads when only 1 in 10 sellers is going to end up choosing their agent through someone they bought or they met online, right?

What buyers? Three in 10 are going to do it and those you are just blowing off right now. No. Give me this stuff. That makes no sense. And for me as a non realtor that sees only the math of things, I look at it and I am forced to say to my clients, I'll do whatever you want. It makes no difference for me whether you want to spend it all on seller or buyer.

I can do it both. CINC is very good at both sides of the equation. I have to tell you what I think is right. And what I know is buyer lead generation is on the rise. In fact, if you look at how much GCI will happen from online lead generation on the buyer side, it is three times as much as on the seller side.

So you are, when you're investing in buyer leads, you're going at a pool of 13 billion. While when you're going selling it, you're going to a pool of 5 billion. With one more thing that I think is important, which is half of people that have a hope. That are buying a home, have a home to sell. And of those, half will use the same agent for buying and selling.

So one in four buyer leads should be a seller lead. If you are if you're asking the right questions, if you're using HomePulse, which you should if you're doing the right things to trigger people to tell you that they have a home to sell, of course, if they're selling out on a different state, that's a different thing.

But for all of those that are close, You have a very high chance of getting that seller. So if you add that the pool of buyer of the pool of GCI that comes from original buyer leads is actually 13 billion plus three more billion dollars of seller sellers that are in, think of that. The pure seller leads are going after 5 billion.

And the seller leads that come attached to the buyers are already 3 billion. So it's more than half of that. It's a strong argument for you guys, just for me to tell you, buyers are still, the commission is still going to be there. The actual put through of buyer lead spend is higher and it's going to continue to be higher.

And then that is resulting. I'm going to skip this slide. This just tells you people start looking for a home well before they start looking for an agent and you have to go in there, right? That is what online lead generation means. What it means is you're catching them at the beginning when they come into the store, you're asking them, Hey, do you need something?

And nine out of 10 times, they'll tell you no, I'm okay. I'm just looking, but you have to be there with them through that process. And, then, and so you have to. Again, when people ask me, can I trash a lead when they don't want to speak with me? I go, no, that's if you stand at Nordstrom's and when they come in and you say, do it, can I help you?

If they say no, you just run them off the store. That's not what you want to do. You want to let them into the store. You want to let them be looking and you want to be present. You want to be there for them at the moment that they choose to buy. And through these things. The one thing that has changed in the seven years that I've been in this industry is that the best agents are taking more and more market share from the amateur agents.

The people that are just like, Hey, I sell three homes a year that the collective pool of that is going down. You can see now that the top 1 percent agents are, have increased from being 29 times the number of transactions of the average agent to 37 times, right? So the giants are not the giants, the super pro agents and their teams are guiding more and more of that market share and breaking up is other people hearing me chopped up.

I'm hearing you pretty clear. Okay. So perfect. So I'll keep going. So in the end, after all of this broken English tirades that you've been subjected to, I'm going to give you three conclusions. First one is, I strongly believe, and hopefully I've made an argument to you that the commission will not substantially change unless it gets decoupled and I do think it will get decoupled.

It will not change. It has not changed. It will continue to fluctuate as it always has. It might go a little down. I have my own money in that in no world will it ever go under 2 percent for the buyer agent. I think it will be really around the 2. 4 where it will stay. So with a very slight change. Second, this is very important.

Buyers are now going to lock themselves into a contract earlier in the funnel, right? So you, the idea of you need, if you get upset at talking to people that are six months away from buying, I am sorry, but you're, when you catch them one month before buying, which will make you feel great, they're going to have a contract with someone else.

So you, it will force you. To work on those six months away leads so that you secure by providing value and by establishing a relationship, you secure that business early. The advantage is you're not going to be able to be swiped at the end by someone that met them on Zillow, right? If you have a buyer agent's contract signed, you're pretty safe there, right?

And then the last one is Now, being able to explain your value proposition as a buyer agent will be more important than ever before. You're usually training your seller agents how to do the listing presentation. If you're not training your buyer agents into how to do a buyer presentation to sell their value, then you're going to be in trouble.

And if you don't have reviews, I'll go into that in a second, you're going to be in trouble. But I'll go to so what here, right? So first keep your buyer agents motivated. I, think if hopefully I gave you some tools to help you in that pitch, they have a bright future ahead of them. There's no reason that they should be running for the, sidelines, as part of a team that will give them the things that I will explain the next 2.

They should be successful. The facts throw towards it. I don't see a reason to change that. The 2nd 1 is. You have to continue to invest in the on the buy side if you want to be an online lead generation. If you don't want to be an online lead generation, work your sphere, do all sellers. I'm totally fine with that.

You want to be an online lead generation and you're not going to go after buyers. I think you're going to miss the boat, especially in this up market that will come. I'm not going to talk today about the market. That's a different webinar. But in that rebound market, you want to be on that side. And you absolutely need your early funnel.

So all of you that use pro link or agent pronto, I love it. And it's going to continue to be there. It's going to continue to give you some good closings there. Those are late funnel leads and they might feel super good because you have a higher percentage. That's going to be tougher with this new world where buyer contracts are signed early.

All the Zillow Flexes of the world, all of those will suffer with this rule. That's why Zillow put that contract, sorry, on their website that allows you to have a non buyer contract that doesn't basically mean anything. That's because this is the biggest threat to Zillow and Zillow Flex. In a very long time.

But this is the thing. This is a big threat to them. It is a big threat to the Zillow Flexes of the world. The fact that you are going to establish a relationship with your agents on six months before they buy, right? Or three months before they buy. And you're going to have a buyer contract signed and that's going to help you and it's going to hurt them, right?

So you need to invest in your hourly funnel. That needs to be part of your scripts. If you come to CQ, you will see us talking about this. But, you should have it as part of yours. And then the last part is if you don't have today, if I take a quick exit, so give me, an answer on the chat.

Which of you have a dedicated page with your reviews? Tell me yes or no. Just give me yes, no, yes, no, yes, no. How many of you have a dedicated page? You always ask for a review every time you close and it all goes to a page that you aggregate, right? And I'm seeing half and half. I'm seeing no, yes, no, yes, no, yes.

This used to be optional. It's not optional anymore. If you don't have this six months from now, you're not going to be able. People look at reviews before buying a TV for 400. You are gonna and for listing agency, I'm sure you have for your listing agents. I'm pretty sure you have reviews and all that.

But for your buyer agents, you might not, right? Because you didn't care. You have to do it. There's no option. You're gonna have to do it. So I'm gonna give you a solution that CINC is bringing to you now. You can use that or you can use anything else you want. But if you don't take anything else from this webinar, you should take that, which is if you don't have An online presence that defends the value proposition and reviews of every agent in your team.

You should not complain later about the fact that you're not being able to sign by our contracts, right? Because that is going to be a necessary part. And if you are sending them to Zillow to look at your reviews. I'm just going to shut down this webinar and walk away because if you are actively taking your.

Your consumers, your leads or whatever you want to call it and telling them, go to Zillow to look at my reviews. By the way, they're going to show you another five agents in the area that maybe sell 10 times more homes than me, then you're just like, I hope you're sending them a muffin basket after, because if you're going to, that they are sending you a muffin basket if you're sending them clients, unless they're getting your referral for that, you should not do that.

Yeah. Don't send people to Zillow to look at your reviews. That's just wrong. You have to have a place where you have your own reviews. Google Business, super important. If you don't have your Google Business account with good reviews in there, you're in trouble. You have to have that. And so with that, I've gone through all of my reviews.

Nice. I'm now going to talk about the three thing. Actually, I'm going to go super fast over them, and then I'm going to open it up to questions so that if anyone wants to leave, they have the free thing. So first, if you want to deploy by agents, you can do it through CINC. Now, it's free. It's part of our partnership with Sky Slope.

Here is the part, but you can you can ask your account manager how to do it. It's very easy. You can now start a buyer contract from whenever you are working with a client, it goes to them. Did you sign? You don't need anything else. They're already completed per state with the rules of that States.

Sky slope is very good at that as part of their transaction management. Use it, get your buyer contracts in. Second. put your commissions in on your listings, right? This is allowed by NAR check it with your broker. I don't want to step on anyone's toes, but if you want, this is how you do it. We have the place for you to put the concessions so that they show up with your listing in our website.

So go do it. Super, important. And then third, We haven't made a big announcement, but actually we have brought into the family, a great company called Real Satisfied which actually does what I've been saying, and it's not by chance, right? I believe it's important. And so that's why we acquired this company.

We love it. It's been a way along for a long time in the industry. We're just bringing it in with CINC so that we can absolutely reinforce it, make it awesome, and integrate it with CINC. What Real Satisfied does is it's, It's basically a review platform, right? So every time that you close a deal, you should either manually or automatically, and we'll discuss that in a second, send an email asking for a review, asking for a referral.

It is insane how many people don't do this, and it should be syndicated. Real Satisfied syndicates it to realtor. com, helps you publish it in all your social media. It also has it's not here. It does a very easy entry point for people to put the review in Google. We cannot syndicate it to Google. That's Google will not allow it, but we make it one more click for people to put the same review on Google.

You need those. Those reviews in Google, right? You need your Google business page to be strong. And so with that, all those reviews, apart from being syndicated to all those places, go into your value proposition page. This is a page. It's not an IDX. It's a page about you, about why, and this should be about each of your agents.

And it's about, what is the value proposition of your team and of your age, right? You should have the team when you should have the agents. One I love this company. That's why, and ironically, we were working on this transaction well before all of this craziness happened and started last year.

And then I just became so convinced that this is a necessary part. Now you can use this, you can use any of the competitors. I don't care who you use at the very least. If you don't want to use anyone in particular, do it with Google, your business, have a strong, this is going to make or break the buyer agent business in the next year.

This is the one thing that is really changing, right here. We're going to give you a one year free. So if you go there to the QR code, you get a one year free pro account with them. We're actually going to integrate it into CINC so that every time that you move A lead to closed it automatically sends the email out asking for the review.

You don't have to remember. You don't have to put the email. So that's going to come soon. I'm not going to give a date so that my product team doesn't hit me after, but it's going to be very soon. But irrespective of whether we have that automated or not, and we're also going to be. Populating your reviews into your website.

If you have a branded website with CINC, we're going to be populating it there. All of that is part of our vision that the value proposition of the agents, of the buy side agents need to be out there, very reinforced, and you're going to need it to do business in this coming industry, right? So sign up for free, get your ear in this or do it with someone else.

But do it. Please get your your online reputation up so that you can use it in all your process. And with that, I have talked nonstop for an hour and now I am not in a rush, but now that everyone has the QR code, I'm in any questions. One. So Alvaro, one quick tactical question Jeff Adams and somebody else was asking.

I think it was more related to the past webinar. We were talking about the sky slope integration to help out with written buyer agreements. What's the best net? I didn't quite have the link. What's the best next step for them to get more info on that? If you ask your account manager, they'll show you how to do it.

But if not, if for some reason, just why don't you put an email to yourself Richard, I can just connect them, but yes, it, I have it there. Like the steps. I just didn't want to distract too much here, but basically it's very easy. It's. You can see that, you have the, in the more button here when you press there, it says start a contract and it's as easy as that.

But again, you have an account manager for a reason, use it call them, have them walk you through it. But yes. And Lisa asked there can we load reviews from past into CINC? So CINC today doesn't have the idea, the place to show reviews. We're going to do that in the future in your branded site.

We don't necessarily want it in the unbranded. Remember that your unbranded sites only goal is to convert into leads, but we'll go into that. But certainly in Real Satisfied, if you sign up for Real Satisfied, you have a way of doing that. I think the other, we had a few other questions there, but one other, we had Diana Roach I don't know if you've got a hard stop, but one of the things Diana was saying in the chat earlier on is that with the change, her team has used this as an opportunity to get to get a raise 3 percent of the buyer side, 6 percent on the listing, Dan, if you're open and coming off chat, I'm curious if you could speak a little bit more to that.

While she comes in, I have heard, so the actual reason now is now there's a the having a discussion about price can well both ways, right? And so now I have a lot of times that are going well, yes, I do give tiers of service, right? But now in the tiers, they don't put 3 percent as the top, they put 3 percent in the middle, right?

They're putting well, you have the 2%, you have the 3 percent and you have the 3. 5 percent here, right? As a buyer agent. And people do the truth is they don't care because it's going to be at the end in the mortgage. And so if I can get a better service by paying a 3. 5 percent instead of a 3, why wouldn't I do it?

If I trust who you are. We live in a world, especially in the US where you can buy tennis shoes for 10. 20 or 500, right? Branding is everything in this world. And so being able to discuss your value proposition should not be something that intimidates you. If you have the right tools, can we use our own buyers agreement into Skyslope?

You can modify the Skyslope one in any way you want. So I'm pretty sure you can go and do it. What we've done is We've given you a freeway of using both the contracts part and the digicycle of SkySlow. So that, that is the, but yes, once you're in the SkySlow platform, you could do everything that you could do.

You were going to say something else, Richard? No. I was asking Jul, if Juliana wanted to come off mute she had another story there where she was talking about your about those buyer leads that turn into listings. Yes. Yeah. So they were, buyers last year for a property. They were buying an investment property for their daughter.

And then this year I just got a call out of the blue. They have another investment property they wanted to sell. We just closed that three weeks ago. That's amazing. But, still Juliana, I will say, You got a call out of the blue, right? That call might not have happened. So I don't want to be, the teacher here, but that's the main thing, which is we allow so much business to slip through our fingers of where we've done great impressions, right?

So those people need to be asked regularly for a referral. People don't usually take it the wrong way. And these systems like real satisfied or whatever you're using. Are meant to do that, right? You spend so much on this leads up front, and I don't just mean the money or saying the effort in establishing a relationship that once you have it and you have done great work for them, you should not lose that

I had, Wagner there asking if you already have real satisfied and you want to jump into the free year. Absolutely. We can do that. I don't have a specific system to do it. But if you tell her, Richard, we're gonna make it so so so happy to and maybe if you can jump online, give us your impression of Real satisfied so far if it has worked for you.

Hey, everybody. Hey, did I pronounce your name? Correct? How do you mention it? Yeah, Wagner Ferreira. Perfect. Perfect. Yeah, my experience with, with with this product has been really great. And literally. 80 to 90 percent of my clients, they they reply is very easy, very friendly.

They also have a two ways where they can write a review. I just got a one right now as is speaking with you guys. And and there's the other one they put a points and they literally grade you, give you stars for every aspect of your performance. So there's two different things.

That you can request to your buyers or sellers and it really worked good. And, if they write you a review you can place, like you showed the frame is really nice. You'll send it then a Starbucks whatever price, whatever. 10, 20, 15, whatever you can pick how much you want to give it to your that person that wrote you a review is very simple and a very straightforward.

I really like it. I just want to see if it was able to utilize this offer. How can integrate those two if you can integrate. I don't want to lose the reviews. No, you won't. We will integrate it so soon. It will be where it's automatic from CINC. Whenever you should use our pipeline.

And whenever you use our pipeline it will add it there. And I'd immediately throw off the review. And as you say, one of the things I like about real certified, it's interesting that they send the gift card after you get the review. So it's not a quid pro quo thing. It's really Oh, thank you.

And I love it. I think it's, it generates such a great long lasting relationship out of Hey, I'm not milking you for a review or anything I really want to know. What do you think about me? And I'm glad you think about my work.

CINC Client: And, it's not a promise of anything in exchange to the review.

You get the review first and then you show your appreciation for that. That's very well done. Awesome. I love it. I'm glad that you're happy with it reinforces that we made a good choice and bringing it into the family. And again we'll do a lot. Hopefully you'll see if you haven't seen already some upgrades in the last two months, you will see a lot of aesthetic upgrades.

We're bringing all of the CINC love into it into making it look better and be smoother and faster. So hopefully you'll, see a lot of upside out of real satisfied coming into the same family. No, I have. I appreciate that. It's a very nice addition.

Alvaro Erize: Cool. I don't see many more questions. Richard, do you have anything?

Richard Kaiser: Yeah, I think that's about all we've got.

Alvaro Erize: I will say this again. This is my honest opinion. I'm not a lawyer. You should consult your lawyer, your broker for anything that you do. I'm telling you what I see on the industry, what I see, what I've seen in the past and my interpretation out of the future.

Of course, I can be wrong and things can go a different way and the buyer agent commission could be at half when we talk about this next year. I have seen no proof or any fact that would lead to any of that. If it if I did, I would be making different decisions in general. I think. I think this is.

There has been such a coordinated misinformation campaign on this subject that if we don't have more people in the industry that know what they're talking about going loud about it, we're just going to get drowned in the noise.

CINC Client: Alvaro, this was fantastic. Seriously, I like you, but you really pushed out an amazing webinar that I'm going to bring back to my team.

I'm going to watch it again. And you really broke it down with facts and you simplified it and it was really assuring. So I'm excited to share that. You're reinforcing my goal for October to do an Oktoberfest review contest. I love it. Because our clients love it when I say, Hey, I want to bait everybody else. This is a contest. Will you please review me? And you'd be surprised how everyone wants to help you win.

Alvaro Erize: And especially because I know that you gave them great service, right? Like people love talking about the things that went well for them. That's so much in our life is crappy. So whenever we call any client service department, we're stuck hours on the phone, right?

And we hate it. And then they, ask us at the end. How did we do it? We're like, we hate you when you have an agent that has poured their heart and soul into giving you service. Why wouldn't you want to talk? And you just. And it's almost I'm not gonna say I hate the word offensive. It is almost unpolite not to ask about it means you don't care about my opinion.

I love working with you. Why won't you ask me about it? I'll be happy to do it. And so that is the one thing that yes, thank you for bringing it up. I think that's a great goal for you. And I know. Your team is going to get awesome results from it. You all are the pro agents of the world. What we do, what CINC does is try to move more business from amateur agents that don't know what they're doing into the pro agents that are willing to put their heart and souls into serving their clients.

That's why we believe the commission should be where it is because in the end, the service is worth it. And we want to. It's so easy for people that do this as a hobby to say, Oh, no, it's not the commissioners. No, it's not worth it because you are not doing real work, right? The people that are, absolutely worth it.

And if, one gold, one goal that saying has the one guiding light is our goal in life is to move more market share from amateur agents into pro agents, whether they're a team or a single agent, it's people that do this for living professionals that are going to pour their hearts and souls and people need to know about it. So get those reviews going. And thank you, Linda. I deeply appreciate your words.