Show Me the Money! - REBACrebac.net/sites/default/files/Getting_Paid_ABR.pdfShow Me the Money! Connection Presented by: ... LinkedIn: AdornaCarroll ... the SRS – Seller Representative

Show Me the Money!

Connection

Presented by:

Adorna Carroll, DSA ABR/M, SRS, CNE, GRI, SRES, SFR, PMN, e-PRO [email protected] Facebook: AdornaSpeaks Tweet: @AdornaCarroll LinkedIn: AdornaCarroll

•  When compensation offered in the MLS is not sufficient

•  Unrepresented Sellers – FSBOs

•  Limited Service transactions •  Entry Only transactions •  Short Sales •  Foreclosures

Securing ‘fair’ compensation is easy, however …

Situa&ons Can Impact Your Compensa&on

(c) 2013 Dynamic Directions, Inc. All Rights Reserved

Warning! •  None of this can be done if you don’t

have a written buyer contract with compensation detailed

•  You cannot use any of the suggested clauses unless your broker provides approval and your company attorney reviews them

•  The best outcome you can expect without a buyer agreement is that you will probably get what someone wants to give you


Article 16 – SOP 16*

Realtors®, acting as subagents or buyer/tenant representatives or brokers, shall not use the terms of an offer to purchase/lease to

•  attempt to modify the listing broker’s offer of compensation to subagents or buyer/tenant representatives or brokers

•  nor make the submission of an executed offer to purchase/lease contingent on the listing broker’s agreement to modify the offer of compensation.

(Amended 1/04)

Modifying the Offer of Compensation


Buyer Funds the Fee


Buyer Funds the Fee

“Without your ‘bag of money’ at the closing table Mr/Ms Buyer, nobody gets paid. The buyer has always paid the fee and funded the transaction.

When a property is offered as a‘FSBO’you just paying for my professional services.

When a property is listed by a RE Firm, you are compensating me & funding the listing professional’s service fee as well.

The fee can be structured so that it doesn’t have to be paid directly from your pocket”


Buyer Pays – Seller Structures •  COE and Fiduciary/Statutory Obligations ▫  Listing Firm details the Commission/Split Policy to the seller prior

to entering into a Listing Contract

•  With informed consent, validated in listing contract ▫  Seller agrees on an amount for listing firm

▫  Types of co-op agents and amounts they will receive through the MLS

•  No MLS rule, license law regulation or COE requires that amounts be equal


Before entering into listing contracts, Realtors® must advise sellers/landlords of:

•  Company policies regarding cooperation and the amount(s) of any compensation offered to subagents, buyer agents, and/or transaction brokers

•  The fact that buyer agents, even if compensated by listing brokers, or by sellers may represent the interests of buyers/tenants; and

•  Any potential for listing brokers to act as disclosed dual agents, e.g. buyer/tenant agents. (Adopted 1/93, Renumbered 1/98, Amended 1/03)

LA required to disclose co-broke compensation

Article 1 – SOP 12


When entering into buyer/tenant agreements, Realtors® must advise potential clients of:

•  Company policies regarding cooperation; •  Amount of compensation to be paid by the client; •  The potential for additional or offsetting compensation from other

brokers, from the seller or landlord, or from other parties; •  Any potential for the buyer/tenant agent to act as a disclosed dual

agent, e.g. listing broker, subagent, landlord’s agent, etc. •  The possibility that sellers or sellers’ representatives may not treat the

existence, terms, or conditions of offers as confidential unless confidentiality is required by law, regulation, or by any confidentiality agreement between the parties. (Adopted 1/93, 1/98, 1/06)

BA required to disclose co-broke fee Non-confidentiality of offers

Article 1 – SOP 13


Buyer Agent Required to Disclose Prior to showing property Buyer Agents are obligated to identify when the co-broke fee offered won’t cover amount agreed to in buyer agreement by COE 1-13 •  Buyer chooses what to see •  Seller’s Market - buyer will view all property

since there is no inventory •  Buyer’s Market – they may or may not

(c) 2013 Dynamic Directions, Inc. All Rights Reserved (c) 2013 Dynamic Directions, Inc.

All Rights Reserved

Insufficient Compensation •  When compensation offered through the MLS is not

sufficient to satisfy your ‘employment’ agreement with the buyer

▫  Offer of compensation could be rejected OR

▫  A clause may be inserted into the conditions of sale to satisfy the amount agreed

•  It functions like any seller concession

•  Must be worded properly to avoid violating COE or any license laws

•  No listing agent can interfere


Compensation Issues Neutralized • Contractual representation of the buyer

neutralizes all concerns for fair compensation

• No longer matters what type of listing it is • No longer matters how much the co-broke fee

offered is

•  Listing agents cannot ▫  require you to remove residual

compensation clauses or

▫  Refuse to present your offer


Compensation Clause Components Short Sales & Foreclosures

ABC Realty Rejects XYZ Realty’s offer of compensation offered in the MLS •  Seller and/or any third party to settlement and

transfer of this property agrees to pay

•  The buyer

•  X% of the sale price

•  to settle their contractual agreement with their buyer agent at closing

The following clause is

taught in the ABR Designation Course and borrowed from

the course content of the SRS – Seller Representative

Specialist Designation Course


Compensation Clause Components FSBOs – For Sale By Owners

OMIT - ABC Realty Rejects XYZ Realty’s offer of compensation offered in the MLS •  Seller and/or any third party to

settlement and transfer of this property agrees to pay

•  The buyer

•  X% of the sale price

•  to settle their contractual agreement with their buyer agent at closing


The following clause is

taught in the ABR Designation Course and borrowed from

the course content of the SRS – Seller Representative

Specialist Designation Course

Presenting the Compensation Clause to the Unrepresented Seller


Dialogue Strategy for FSBOs, Limited Service and Entry Only “My buyer clients are offering you $X for

your property … if that’s agreeable to you, I will be structuring the offer differently so that my buyer client can finance my professional service fee. The amount that you agreed to, will not change …”


Presenting the $$$ •  Keep negotiation simple •  Tell the owner what they will get rather than discuss the

gross amount ▫  Gross offer less your fee

•  When agreement reached on amount ▫  Inform seller the offer will be structured

so that buyer clients can ‘finance’ your services

•  If the buyer doesn’t need to ‘finance’ you ▫  They can elect to pay your agency directly


ü Strategic Planning and Leadership Training ü Meetings in a Box – Live Virtual Training ü Designation Course Training

ü ABR, CRB, WCR Courses and more ü SRS – Seller Representative Specialist

ü GRI, CE and Conventions & Ed Fairs ü Course Development ü [email protected] ü @AdornaCarroll – Twitter ü AdornaSpeaks - Facebook

Training Today’s Professionals for Tomorrow’s Business [email protected] * 860-344-9931 * http://www.DynamicDirections.com

Adorna Carroll, DSA ABR, SRS, CRB, CNE, GRI. SRES, SFR, e-‐PRO

Documents

Show Me the Money! - REBACrebac.net/sites/default/files/Getting_Paid_ABR.pdfShow Me the Money! Connection Presented by: ... LinkedIn: AdornaCarroll ... the SRS – Seller Representative