In 1980 Herb Cohen, a self-proclaimed world’s best negotiator, wrote a best-selling book; “You Can Negotiate Anything," that still holds true 40 years later. Cohen tackles a topic, negotiation, that has been present in daily life for centuries. Negotiation, specifically the outcome of negotiations has led to common phrases that you either love or hate; it’s a “win win”, or “give and take”, and “split the difference.”
Negotiation is typically a critical point on the path to achieving your desired outcome. To be best prepared to succeed in negotiation you need a mastery of your desired outcome, inclusive of what you’re willing to give up in order to achieve it. An excellent negotiator also understands the wants and needs of the party they’re negotiating against - knowledge is power. Facts matter, emotion must be managed, and beliefs addressed. Success is dependent on your preparation, ability to articulate your message, to actively listen to the other side, and then adapt to achieve your desired outcome.
As of August 2024, Buyers and Sellers in nationwide real estate transactions will negotiate compensation with their chosen Broker independent of each other. Historically, it was customary for a home seller to negotiate the broker compensation for both seller and buyer brokers, as part of the listing process. The selling (or listing) broker would then offer approximately half of that negotiated compensation to the buyer broker who brought a qualified buyer to execute a purchase. Compensation has always been negotiable; that’s not new. The change is that buyers will agree to compensation with their broker and be responsible for paying compensation, with concessions negotiated with sellers and/or out of their own pocket. Home buyers should more carefully consider who they are working with; competence, professionalism, and local expertise will be more important than ever. Buyers will need to be confident and feel empowered in partnership with their representing broker to negotiate from a position of strength in competitive markets. Interviewing and more thoroughly vetting buyer brokers will become more common practice and part of the standard process for buyers moving forward.
Also changing this month are the requirements around the “Exclusive Right to Represent Agreement:" commonly known as buyer broker agreements. The contracts allow buyer brokers to legally and exclusively represent buyers and their interests. It establishes a formal relationship, outlining the terms and conditions under which the buyer broker represents a buyer through the property search, contracting, and closing process; including how the buyer broker will be compensated through the transaction. These agreements have been in place and customary across our Mid-Atlantic Region for over 20 years. As of August 14th, across the US, these agreements now require signature prior to touring any homes virtually or in person; even the first one.
The real estate industry is forever evolving. It is our job to adjust and stay one step ahead of these changes for our clients. We do this through continuing education and daily investment in our practice. We offer full time, dedicated, professional, real estate advisory and services to Buyers, Sellers, and Investors. Just as we have since our practice began in 2001; we stand ready to support you, your families, and your friends.
