Insiders Insight: NAR Settlement with the Chairman of FREC

Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:15):
okay, guys.
Uh, well, first and foremost,congratulations for uh caring
about your careers and andwanting to get better.
Um, I think these are veryinteresting times, cadillac
right?
Is it fair to say that we aregoing to experience more change
in the next I don't know twomonths, three months than we

(00:35):
have in the last 100 years inthis business?

Speaker 2 (00:38):
Yeah, no, I think it's going to really sort of
shake Because of the nationalchange.
Typically, these changes happenon the state level.
They have rule level, yeah,they change, they have rule
changes and they change thedocuments, but now nationally,
as a result of a lawsuit too,which I think the thing that we
saw from colorado that was goingaround that now the state is
pushing back on the settlementof a lawsuit I don't think

(01:00):
that's going to be the onlystate doing that, you know I, I
know I was listening to aconversation that was going to
be the only state doing that.
You know I, I know I waslistening to a conversation that
was going back and forth on itand the pushback that I have
against the idea that that'sjust for clarity sake for
everybody to know, the state ofColorado is pushing back against
the need of buyers to sign abuyer brokerage because
consumers don't like it.

(01:20):
They don't want to have to dothat commitment so early.

Speaker 1 (01:23):
And, um, well, it's like me going to, let's say I
was a single man and uh, yes, Iam assuming my own gender.
Um, uh, let's say I was asingle man.
Let's say I was a single manand I was, um, you know, going
to a bar, right, and, and goingto meet young ladies.
That's usually the way ithappens, right, you go to a bar,

(01:45):
you go to I don't know a publicsetting and, and, you know,
instead of asking for a phonenumber, I have them sign a
marriage agreement, you know,and when it comes to, well, the
argument is should also be that,you know, unfortunately, in
this business, there's a lotmore unprofessional people than
there are professional people.
This business, there's a lotmore unprofessional people than

(02:06):
there are professional people.
So now this consumer is goingto have to, you know, tie up to
a certain extent with somebodythat they have no idea, if they
are working professionally, ifthey are going to show up on
time, if they're going to dowhat they have to do, if they're
ready.
So and here's my pushback, thisis going to cause more.
Yeah, I definitely want to hearthe pushback.
Here's my first fact.

Speaker 2 (02:26):
How is that different than a listing?
Because it because mycontention is this right, the
process we have for the listingagreement should be something
that we are duplicating on thebuyer side.
It is that the buyers havebecome used to this walk-in just
grab any agent to show you ahouse and treating agents like a
commodity.
Yeah, and agent had allowed itto go on because, in order to

(02:47):
stay competitive, they've had to.
Because, while I want to takeit from my business profession,
which you and I both know what'sthe right way to work with a
buyer, let's sit down.
Let me explain to you whatyou're getting into.
Let's talk about the market.
Let's get you pre-qualified.
Let's be part of fixing this.
Let's go jump in the car, lookat houses.
We don't know what you canafford.
We don't know who you are.

Speaker 1 (03:07):
I see that point there and, as you were talking,
I was really thinking of ananswer on how it's different in
the listing agreement and Ireally just can't think of an
actual reason.
One way I mean it's different.
I'm sure I'll think about itthroughout these next couple of
hours, but she definitely youdefinitely stumped me there and
that's one of the things thatwhen I gave the meeting the

(03:29):
other day.
So you know I'm I'm one ofthose guys that just likes to
argue points I could argue.
I have several arguments goingthat I'm arguing both sides.
Of course you know what I mean.
So so the other day I started mysales meeting.
It was a sales meetingregarding this subject,
regarding what's going to happenand how it's going to happen,
and I started literally my firstwords in the meeting where I'm
like raise your hand if you evergotten a listing before.

(03:51):
Everybody or a large majority,because there was an experienced
group there raised their handand I'm like, okay, did any of
you get that listing agreementwithout that?
Sorry.
Did any of you get that listingagreement without that?
Sorry.
Did any of you get that listingwithout a listing agreement?
Okay, and nobody raised theirhand on that.

(04:12):
I'm like, so, not one person inthis room has ever gotten a
listing without a listingagreement.
Correct, none of them raisedtheir hand.
I'm like, well, now we're justhaving to get a listing
agreement for the buyer.

Speaker 2 (04:26):
And I think that two things.
One, I think as much as I loveto hit the ground running, we've
gotten some calls in there tointroduce ourselves, so that's
probably a place to start.

Speaker 1 (04:37):
Oh, you know, it's true, we were used to talking
about each other, all right, somy name's well, I guess we got
to start with.
Well, we're not neither one ofour guests here, but I guess
I'll introduce you to you first,cadillac.
Cadillac and I have beenfriends for a very long time.
We've done a lot of businesstogether.
We have a podcast together, theReal Talk Podcast.

(05:00):
And Cad you know I don't wantto just say that because he's
here, but because I go aroundsaying it all the time he is
absolutely by far the bestinstructor in the country.
He's a gentleman who is atwo-time award winner, you know
instructor of the year.
Right For the FloridaAssociation of Realtors.

(05:22):
Miami Association of Realtors.
All right for the FloridaAssociation of Realtors.
Miami Association of RealtorsAll right, somebody who travels
the country right Teaching.
Leaving later today you go toWichita, kansas, a lot, for some
reason.
One of my favorite states tomention?
Yeah.

Speaker 2 (05:34):
I know Denver Iowa this next group is Denver
National Association of Realtors.
I cover their stuff.

Speaker 1 (05:41):
Right, they fly around everywhere.
Different associations fromdifferent states fly you around
everywhere um, this topic.

Speaker 2 (05:47):
Actually, I was just recently in conversation with
miami's legal counsel talkingabout the pushback to some of
the new forms that we have rightthat uh, actually are going to
be in the breach of thesettlement agreement.
So there's, there's some stuffgoing on right behind the scenes
that was so right in the middleof so is there anybody who has
more courses approved to teachin the state of florida than you

(06:08):
not?
That I'm aware of.
I don't believe, so that meansno he's very humble.

Speaker 1 (06:12):
Yeah, yeah, there's nobody even close to the
gentleman who writes the mostcourses in the state of florida
and has gotten the most mostcourses approved is, by far, mr
cadillac over here.
So so you know somebody who'sat the leading edge of
everything that's going on.
You know, it's awesome to haveyou know he is.
In this particular case, he isbasically the horse's mouth

(06:35):
because he is you're in directcontact with the legal counsel.
For who exactly?
Miami?

Speaker 2 (06:40):
Realtors.
For Miami Realtors.
We were just on a pretty longconversation going through our
pushback on some of the newforms that have been released
and you know they were actuallyputting in their complaints to
Florida Realtors on how theselike the guidance that I've been
getting is that some of thesenew forms.

(07:01):
We are not going to Miami'sgoing to give guidance to their
agents not to use these forms atall because they're so bad.

Speaker 1 (07:09):
So, yeah, yeah, so, so a lot of so, cause I called
you the other day and I askedyou and I said, hey, kind of
like, you know this is what I'mgoing to.
You know, this is a class I'mgoing to teach now and this is
the form that I'm going to talkabout.
And you're like, dude, don't dothat, like this.
So, and I had just gottenthrough a class, right that was
given by the board, yep, and and, and you're telling you know,

(07:31):
so again, it's, it's we, we.
There's not many people thatare going to have the
information as updated as youhave.
And later on, around what timedoes Richard get here?
Around what time does Richardget here?
He's at 11.
He's 11.
So Richard should get here at11.
Richard is the current chairmanof the Florida Real Estate

(07:52):
Commission.
So, guys, who am I?
I guess I'm just a guy whoknows both of them and I am also
being humble now.
I'm also president of RealEstate Empire Group.
I've been in the business 25years.
I've done thousands andthousands of transactions.
I have about 500 realtors rightnow, three different offices

(08:21):
working on a fourth right now.
So I've done commercial,residential, everything, any
type of property that you canpossibly imagine.
But what I, what I enjoy doing,is teaching and and and and.
That's that's really how youknow a lot of the stuff that we
do together.
We've written some coursestogether.
We're writing a book togethernow, kind of like that is the

(08:41):
plan.
Right, that is the plan.
That is the plan.
So that's cool.
So, yeah, today, we, we gave thethe reason for that.
By the way, guys, I'm also I'mgoing to say it again I hate
this side of it.
Guys, believe it or not, I havea better side, but, for
whatever reason, I'm on thewrong side today.
I usually sit over there, butwhen I got here, the cameraman
told me to sit on that sidebecause we want to note again
how upset I am at sitting onthis side.
Um, but uh, yeah, it's, we havethe horse.

(09:09):
Both horses mouths, right, didI pronounce that?
I say that correctly as long asthe mouth.
And yes, here today.
So, um, we're gonna cadillac'sgonna go into his nitty-gritty
pretty much right now.
In a couple minutes he's gonnago into the nitty-gritty stuff.
Um, on the stuff that he feelsyou guys need to know, we're
kind of limited to about an hourish, or an hour and a half-ish.

Speaker 2 (09:26):
I will do my level best to keep it as close to an
hour as I can.

Speaker 1 (09:30):
And then I think that what I'm most excited about is
going to be the question andanswer stuff.
So when Richard gets here we'llstart with the question and
answers, and I think that's themost interesting stuff.
I actually even have a bunch ofquestions that people were
asking me and I asked the girlsto kind of write it down so we
could kind of go through thoseAwesome.

Speaker 2 (09:51):
Did I miss anything?
Cadillac?
Not as far as I know.
I know that they're having alittle bit of sound issues right
now that they're trying to sortthrough.
Oh really, yeah, well, Did wefix the sound issues.

Speaker 1 (10:10):
I am doing my level best to increase the volume for
you guys.
People are saying that theycan't hear us.

Speaker 2 (10:13):
It's better now, Matt .
As long as you're okay, Matt,that's really all I care about.
It's totally about Matt for meat this point, so I'm glad it's
working for you.
Now it's the caffeine is isworking its way home too, so all
right, all right, fantasticGood Cause.

Speaker 4 (10:33):
my blood pressure was rising real quick If we were
going to have Mike issues rightnow we were going to turn the
camera around.
I'm fighting somebody.

Speaker 1 (10:41):
They're going to be carrying people out of the room.

Speaker 2 (10:44):
There's, there will be, there will be an issue today
all right, so I'm gonna takeand hit my screen share right
now and share what we're gonnabe talking about right now.
Let me go ahead and yeah, that'sit all right, let me get this
uh all set up.
Now.
That's where everybody is.
Let's get you guys where I cansee you Fantastic, all right.

(11:05):
So this is what we got.
Everybody sees my screen.
Okay, I hope so.
I wanted to give you somethingdifferent than what you're
getting from legal, which isbasically the attorneys telling
us how, legally, we have to takeand do what we do now going
forward.
Right, I wanted to give youmore how we, as real estate

(11:31):
agents, have to translate thatinto how we work with each other
, how we get our forms signedand, frankly, how we have to
talk to our customers.
To get past the objections thatwe know are going to come Guys,
they're going to be objections.
To get past the objections thatwe know are going to come, guys
, they're going to be objections.
What do you think I mean?
Can we anticipate a bunch ofobjections coming on this

(11:53):
nonsense?
Of course, right.
So I guess, in way ofintroducing myself hey, sosa's
already done it, but this is mea little bit I've got real
estate designations for days.
I've got a bunch of otherlicenses, been a top selling
agent for a long time.
Now I run a real estateinvestment fund, wrote the eight
series of classes, which atthis point is 44.
We have a 45th one that justwent into the state for approval
.
Wrote a couple of books one'scalled Close for Life on well

(12:16):
fixing the problem we have inthis business, which is that we
do a good job of closing dealsand a terrible job of
maintaining those relationships.
We only maintain 13% of thecustomers, we close 87%, we lose
.
And we're a book called Roadmapto the American Dream about how
money and investing works.
And yeah, these are all theclasses.

Speaker 1 (12:37):
So can you talk a little bit about your mastermind
program?

Speaker 2 (12:40):
Sure.
So what I was getting constantcalls for when I would teach is
people wanting more of what wewere doing, and so I wanted to
make a way for folks to haveaccess to the stuff that we
already were teaching theclasses.
A lot of times, even in Miami,which is my home board, I'm here
.
Somebody will see one of myclasses.

(13:00):
They'll come to Ace Investor 4.
Well, there's seven in theseries.
They're like when's one goingto be again?
And I'm like I don't know, itcould be months from now,
whatever.
So it was a place for me to putit all together and also a
place to have ongoing trainingon stuff that's happening right
now, as well as a place foragents to come ask questions.
We have a dedicated Slackchannel so I'm in communication

(13:20):
with those folks.
I'm usually talking to folks onthere almost every day to try
to solve individual problems.

Speaker 1 (13:26):
It's a way for people to have access to you on a
weekly basis.

Speaker 2 (13:29):
Sure, it's almost like having me on your team,
sort of as far as like to giveyou ideas about how to fix.
Well, you know, even heresometimes it's like oh, you got
a weird deal, go get Josh, he'llhelp you out, and so I don't
know why, but I get put in thatposition a lot Because you know
how to fix weird deals, and soyeah, what does that cost a

(13:51):
month and how does that work?

Speaker 1 (13:52):
Well?

Speaker 2 (13:53):
with the code that we have for you today, it's $19.99
.
It's $20 a month.
$20 a month yeah, I mean, I'mnot a person that's a fan of
these programs.
That are ridiculous amounts ofmoney.
I want to give stuff tosomebody that-.
So for $20 a month, I getaccess to you, to me, to the
A-series of classes, to thefinancial calculator that I use

(14:14):
for differential cash flow, bothwith cash and financing.
So how many times a week do Isee you?
How does that work?
I see them once a week on aZoom that's recorded.

Speaker 1 (14:24):
And so I'll either and they get feedback on each
other.

Speaker 2 (14:26):
Oh yeah, it's like an open forum we talk and then we
have a dedicated Slack channelwhere those folks now can take
and send me messages.
I had somebody the other daywas working his first seller
finance deal and he sent me theterms to ask what was missing.
It was an adjustable ratemortgage and there was no index,
and especially now especiallynow, with all this stuff that's

(14:49):
happening right now, the factthat you know, listen again
you're, you're my friend and I,I know I have access to you
whenever the hell I want.

Speaker 1 (14:52):
I mean, that's that's our, that's our our.
You know, arrangement,friendship, whatever you want to
call it, we could always reacheach other, no matter what and
when I, when I needed to callyou the other day in the morning
or before my class, I mean Ifelt pretty good to know hey, I
could talk to Cadillac and I'mgoing to get the most updated
information on the stuff andguys, I will tell you the people
that are.
You know the thing aboutstarting in real estate.

(15:15):
There's a book by DonaldRumsfeld and I always use this
title, right.
His book is called you Don'tKnow what you Don't know.
Right, it is the best title inthe world because real estate
you know so little about realestate that you don't even know
what you don't know Totally.
It's so much information thatyou have no clue if you're

(15:36):
starting in this business, whatyou don't know.
So, but the unique thing aboutthese next 90 days is that, man,
these are probably the mostimportant next 90 days in
anybody's career.
Sure, adjusting to thesechanges right, being at the
leading edge, at the tip of thespear of these changes, right,

(16:00):
I'm lucky, right that you know Ihave you and I have Richard as
my friends, that I have on speeddial and we have a group chat
together and everything likethat, right.
The fact that anybody couldhave that, you know, hey,
there's a membership and I getto ask, write my questions down
and every week, ask you what thehell's going on.

(16:21):
Might be the difference betweenmaking it in the business and
not today, in these next 90 days, in my opinion and I'm not just
trying to sell out, I'm justbeing honest I mean, I don't
have to pay the 20 bucks and I'mhappy.

Speaker 2 (16:32):
No, I mean I.
I think that there's figuringout how to get on the right side
of what's coming is huge.
I came in this business in 2008and I made it in this business
because I figured out where themarket was, which was short
sales, and I learned how to dothem and I knew I had to do them
better than anyone else.
And more than anything, what Ilearned was how to take an

(16:52):
approach to customer with it andto anticipate.
And that's going to be guys.
First word I want to give youto be on the right side of this
business and where things aregoing to go is to anticipate.
Great businesses alwaysanticipate their customer.
They are expecting what theircustomer is going to be like
before they walk in the door andfor some reason, in real estate
, we're hesitant to do thisbecause we think it's almost a

(17:14):
fair housing violation orsomething you shouldn't
anticipate customers.
But the example that I give allthe time people in here that
know me may get sick of this,but if I own a restaurant, time
people in here that know me mayget sick of this, but if I own a
restaurant and I did used toown restaurants I always
anticipated that people thatcame in the door were going to
be hungry.
Now that just seems so basic.

(17:35):
But I mean, here's the thing Ifpeople come in, they're hungry.
There's a thing called beinghangry.
There's commercials about it,like with Snickers and stuff,
but it's a real thing.
If, when people come in, theycan be nice people, but when
they're hungry, man, they sprouthorns and a tail, I mean they
are grumpy and it's a problemand it causes problems in the
business.
So what we would do, and whatmost businesses, most

(17:56):
restaurants do, is they putbread on the table.
I'm trying to sell food and I'mputting free food on the table.
How does the free food getthere.
I want you to understand, guys.
When you see bread on the table, it is because you have been
judged and found hungry, right,right.
And I've never seen anybody onthe restaurant flip the bread
across the room and be like I amso offended.

(18:18):
How dare you assume that I'mhungry?
Yeah, so fair housing is animportant thing and we're
actually going to touch on fairhousing for a second.
Well, richard may touch on it,because I don't have the buyer
brokerage agreement in thisversion of this class.
The longer version does.
But fair housing is a reallygood rule, meant for really good
things.
You should never pick on people.
You should never take and treatpeople differently because of

(18:40):
never Right For anything, rightfor anything.
But if you're looking, ifyou're looking, uh to, I
appreciate what you're saying,robin and han, this is the meat
of it.
If you want just taking thedetails of what's going to
change, you're in the wrongplace.
If you want to know how toactually close customers, then
you're in the right place.
What did you say?
Uh, they want to know we'regetting to meet.

(19:02):
This is the meat.
This is where it's at.
What's the guy's name If?

Speaker 1 (19:09):
you want to be positioned well.

Speaker 2 (19:10):
You have to close the customer.
Your ability to close thecustomer is going to be based
upon your ability to anticipatethem.

Speaker 1 (19:16):
But if you're not realizing that this is the meat,
this might not be the meat teamfor you.

Speaker 2 (19:22):
You might want to hang up.
By all means, have anotherattorney tell you what the
changes are going to be.
That's going to make you goodat sales.
Can we hang him up?
I don't know how to do that.
Who cares?
It doesn't matter.

Speaker 1 (19:32):
All right, but here's the thing though.
So, you know, I had a buddy, mybuddy Mark, which you know he
has a saying that you know, agood attorney knows the law
Right and a great attorney knowsthe judge right.
So, you know, I was telling,talking to my agents, you know,
just last week, in the salesmeeting regarding this, and I'm
like, look, you know, becausethe fact that we are, you know,

(19:54):
and this is this is to you guysbeing in this meeting right now
is going to give you the mostupdated information out there,
which is going to almost ensurethat you're going to be at the
leading edge of this.
You know what I mean.
So I congratulate you guys forbeing here.
And yeah, and that mastermindprogram to have access to
Cadillac on a regular basis iskey.

Speaker 2 (20:16):
So I mean, I think the basic thing is well, my
point is this that the shortsale market, every agent out
there, could do them, but noneof them bought up to learn how
to do it.
None of them learned how to goout there and make the actual
pitch to the customer.
What are you going to say tothe buyer when they don't want
to sign?
That's the question that reallyhas got to be answered.

(20:37):
How do you create theenvironment to take in place the
blame in the places that itreally belongs, rather than you
being the one that is now takingthe hit because you're taking
and trying to get documents onit?
We have to position that well,and that's a critical part of
understanding how this is goingto work.
And so I think that getting ourhead wrapped around what the

(20:59):
genesis of this is, because as Ilearn more about the antitrust,
what the actual rules were, Irealized that we in real estate
are dancing up against this allthe stinking time.
Right.
And so the antitrust stufforiginally came from the idea
that they wanted to keepbusinesses from creating an
unfair business environment.
Right To get together and talkabout stuff like hey, if we work

(21:22):
for different companies, mesaying to you hey look, let's
agree to charge this.
The example I like to give isthis the conspiracy.
Let's say Walmart, target andPublix all got together and said
you know what, guys?
We should charge this fortoilet paper and nothing less.
Well, it would make it veryhard to get toilet paper at a
cheaper price because theyrepresent the vast majority of

(21:43):
the market Right to get toiletpaper at a cheaper price because
they represent the vastmajority of the market, right.
So it's designed to keep usfrom fixing prices and make sure
the consumer has a market thatis competing.
So one of the things I love togo on cruises right.
I love the fact that RoyalCaribbean and Norwegian go at it
with each other constantly totake and make bigger boats and
better shows and morerestaurants, because I'm the
winner in that environment andthat's what the antitrust laws

(22:06):
is designed to do.
The beginnings of it not sogreat as far as why they came to
be the Standard Oil and allthat fun stuff.
It was really their StandardOil's competitors that brought
it to be so.
Colluding means, basically,where there's multiple
competitors in the same room.
There's certain things youcan't do Now.

(22:26):
This is an importantdistinction to make, because a
lot of the stuff that we'regoing to talk about right now is
stuff that I can't answer foryou because it would be
collusion, because I don't workfor your company.
These are conversations thatneed to be had with the broker.
You, as the broker of RealEstate Empire Group, you can
talk about all these policieswith your agents.
You can set policy and you cantell all of them how they need

(22:46):
to do business.
And that's not collusionbecause it's one company, right.
But when it's multiplecompanies, like we have here,
where we have multiple agentsfrom different companies, we
can't talk about specifics ofwhat we're going to charge, how
we're going to take it when theydon't want to pay us, what
we're going to do and we can'tdo that.
That's got to be a businessdecision at the broker level.
That being said, the individualagents in this room need to

(23:09):
check with their brokers and seehow much leeway their brokers
are giving them in making thosedecisions.
I know for me what I charge onmy listing agreement.
I have flexibility there.
That's been granted to be by mybroker, right.
You need to find out what thepolicies are, what the hills the
broker is going to die on andwhere they're going to leave you
room to move in, right To takeand try to close the business.
So things you're not allowed totalk about for sure in a mixed

(23:33):
room.
Talk about fixing prices in anyway.
Prices, terms, products,anything like that.
Our listing agreements, ourbuyer brokerage agreements are
going to be for this much timeIn a mixed room.
Can't say it In your brokerageoffice.
Yes, that's the kind of placeyou'd do that.
So one of the big things thatyou're never going to see in a
mixed room, or even to theconsumer, is the standard

(23:53):
commission is.
That implies that it's anagreement across the community.

Speaker 1 (23:57):
But that's a negative and could be a positive.
Right, because now you couldnegotiate your commission
Totally Right, and before youcouldn't.
If it said 2%, you couldn't goand ask for 4%, believe it or
not, you could.

Speaker 2 (24:12):
I mean the association would tell us.
But that's it Right, because itwas an assumption by the
association, which is that youdid not have a buyer brokerage
agreement signed.

Speaker 1 (24:19):
So if you have a buyer brokerage agreement signed
, so even back then, if you hada buyer broker agreement that
would supersede whatever,agreement.

Speaker 2 (24:27):
Here's what it is.
The code of ethics says thatyou as an agent are not allowed
to negotiate your compensation,especially in a contract where
you're a third party.
You're not a part of thatcontract between the buyer and
seller.
But when you have a signedbuyer brokerage agreement, the
person negotiating thecompensation in the agreement is
not you, the agent, it's thebuyer, because the buyer has

(24:49):
already committed to paying youthe compensation.
So the buyer is saying, hey,look, in order to buy this house
, I need you to offer me theseller's credit to cover this
commitment that I have to payfor my compensation.
So that was always doable, butbecause it was Well the norm was
for sure.

Speaker 1 (25:07):
The rule of thumb was absolutely, and they even
specifically told us as acompany, we could not do that.
Yeah Right.
So, now it is open to.
But right now I don't knowwherever you guys are from, but
in Miami right now I asked, um,I asked the girls the other day
my what percentage of thesedeals right now are 3%?

(25:28):
And they said very, very little.
I'm like, okay, well, what'sthe majority?
They're like 2% 2.5%.
I'm like, well, what percentageof deals now are 2% 2.5%?
They're like 80%.
So the majority of the dealsright now, the large majority of
the deals right now, and thathas to do with the market that
is still a little bit hot andthat always fluctuates, right,
sure, market gets slower, biggercommissions start coming right,

(25:50):
but as of right now, it's 2% isthe norm.
So if you're doing, you'reallowed now to say, well, I want
to make three, right, and sowhen you submit that offer and
you have a buyer brokeragreement at three, then you
submit that offering, you get anextra 1% than what they're
offering, correct?

Speaker 2 (26:08):
Sure, Well, I mean, the cool thing is that and
you're right the factor ofcompensation, having been slowly
working its way down,especially in our market, has
been a factor of the strongseller's market.
That it's been Right, Becausewho has been the determiner of
what?
The compensation?

Speaker 3 (26:25):
you know, properties are starting to sit in.

Speaker 2 (26:28):
If you're talking about condo, condos are sitting,
for I have three and four yearsupplies, luxury stuff.
I just did an analysisyesterday for a friend of mine
and a year I did luxury resales,so 2020 to 2024 in Fort
Lauderdale, dania and hollywood,27 and a half months supply in

(26:49):
those buildings, that condos,that's condos, condo resales,
luxury condo resales right, sothere's no worse market to be in
right now than a luxury condono, there's no market worse to
be in than condo the marketthat's heard even worse than
that.

Speaker 1 (27:03):
Is your country to that?

Speaker 2 (27:04):
30, 40 year old condo buildings.

Speaker 1 (27:06):
Right, they're really those, if you have a 30 year
old luxury, three million dollarcondo on the beach you're,
you're gonna sit there for ayear.

Speaker 2 (27:14):
It's very likely that you're gonna have a hard time
because there's a lot of optionsright, but you know what I was.

Speaker 1 (27:18):
You know I was talking about the other day too,
like it, this whole transitionthat we're going to.
There's no better market to belanding in than this right here.

Speaker 2 (27:25):
Sure, because it's shifting to the buyer side and
so there's going to be a littlebit more leverage there.
So back to this idea of what wecan't do.
We can't talk about commissions, so like when we talk about I
know we threw some numbersaround right now, but we're
supposed to use like X, we'resupposed to not talk about
specific numbers, all right,talk about withholding services.
We're not allowed to do that.
So sitting here and sayingwe're not going to show a
property if they don't pay X inco-brokerage, you can't do that

(27:48):
in a mixed room, all right.
Can't draw turf lines.
Can't say, hey, we'll work theinland side, you guys work the
ocean.
Can't do that as well?
All right, that's not going tofly.
Another big thing is you can'ttalk about limiting advertising.

(28:10):
Hey, look, man, you got to stoprunning the ads about my
company having the most agentsfound guilty of fraud and we'll
stop doing the ads we have aboutall the junk fees that you've
been tacking on for years andbeen getting away with.
This is one of the big oneshere.
This is one of the agents aresuper guilty of talking about
discouraging competitors in themarket.
So what that looks like istalking about discouraging
competitors in the market.
So what that looks like is well, there are way too many agents.

(28:32):
We need to lobby the state totake and make the test harder to
reduce the number of agentsthat are out there.
All of these actually arethings.
Thank God they don't hit ushard on that one, because we are
so guilty.
Who says that?
Who says that the test is nothard enough?
Guys, is the most dangerousthing in the world a newly
licensed real estate agent?
Are they the most dangerousthing in the universe?
They have been ordained by thestate as being able to sell real

(28:57):
estate.
Were any of you equipped toactually sell real estate when
you got your license?
No.
Are there a lot of bad agentsout there?
Yes.
Are there a lot of agents thatdon't know nearly enough?
Yes.
So somebody's saying that man,the test needs to be harder.
I've heard that all over thecountry.

(29:19):
Guys so acting like it's notsomething we say.
Agents say it all the timethere's too many agents, the
test needs to be harder.
It's very common.
If you've never heard it, youneed to hang around a little
longer.
There's always enough food forall.
I think, angela, there's goingto be a little bit less food on
the table.
For some, that could be a thing.

(29:42):
So what's an example wherecollusion is possible?
It's possible in an environmentlike this.
We have agents from differentbrokerages here.
Possibly so, cindy, but I mean,even so, continuing education.
You're talking about two yearsafter the fact.
Actually, more than that, right?
Because they do thepost-license, they're good for
the next two years.
Well, now, that's four years ofthe agent not knowing what the

(30:03):
hell they're doing, right?
I think it needs to be upfronta little bit more.
So the issue with collusion theissue with collusion it creates
an environment where, if acompany has a bad policy,
customers could be stuck withthat bad policy because they're
not going to have othercompanies competing trying to
fix it.
If you were one of those cruisepeople that didn't like having

(30:25):
either the early time or thelate time to eat, well, if all
the cruises did it, you werestuck.
But then again Norwegian comesalong and they have their
freestyle or whatever, and nowyou can eat anytime you want to.
And now what happens after that?
Well, the good folks over atRoyal Caribbean copy it because
it's so successful and it worksright.
This is the environment they'relooking to take and do and to

(30:49):
get people away from badpolicies.
So let's talk about what'schanging.
Some documents are going to beneeded.
This says a buyer brokerageagreement.
I know that there's a formthat's come out this pre-turing
and there's another one that'scome out.
Frankly, the guidance I'mgetting is those forms are
garbage.
They're in violation of the,the settlement agreement.
The buyer brokerage is the oneagreement that is is righteous

(31:12):
that you'll always be on theright side of it If you're using
it.
It's possible, lisa, that ifyou have a good broker, you
could be good.
Good brokers are few and farbetween now.
That is a part of it.
The brokerage business haschanged a lot and it's created
an environment where brokersspend a lot more time recruiting
than they do training.
It's just kind of the nature ofthe business.

(31:34):
So you're going to need asigned form that has your
compensation agreed to andestablishes your relationship
with the customer.
It's got to be done.
It's got to be done.
It's got to be done up front.
All right, the MLS was alwaysthe place that secured our
co-brokerage compensation.
It not only listed it, and notonly for a long time required in
order to list the property, butit also guaranteed you would

(31:55):
get it.
On the back end, it also wasthe one that said hey look, they
offered this.
They have to pay you this.
So that is the big differencemaker.
Right, we're not going to callit commission anymore, we're
going to call it compensation.
It's going to be calledcompensation because commission

(32:18):
is once again saying it's likethe standard compensation.
The standard commission iscan't do it anymore, can't say
it because it implies thatthat's the way to get paid.
The reality of it is there'smultiple ways to get paid.
We'll talk about it.
We'll look at it.
How you choose to get paid,though, guys, I'm not going to
take and tell you what to do.
I'm going to treat you likeadults and tell you it's a

(32:39):
business decision what you do.
I'm going to tell you beingprepared.
I decision what you do.
I'm going to tell you beingprepared.
I don't think that's an option.
I think you have to be prepared, but I think it being a
business decision is somethingthat you're going to have to
sort through, either you or withyour broker to sort out.
The other thing that changed isthe bank account balances of
some attorneys in Missouri.
They got very, very rich frommaking the consumer's experience

(33:03):
of working with a real estateagent harder, more arduous, and
making it harder on us as agentsand making it harder on the
customer as well, who now has to, usually has an aversion to
negotiating, doesn't want to, ishire an agent so they don't
have to negotiate.
Now they have to negotiate withan agent up front All right.
The other thing that's changedis amateur hour is over.
You no longer can just kind ofhey, I got a driver's license

(33:25):
and a real estate agent, let'sget in the car and go see some
houses.
That nonsense probably isn'tgoing to fly anymore.
You're going to have to bebetter than that.
So is there some misinformationout there I would put forth to
you?
There is a lot ofmisinformation out there.
One of the big ones we'rehearing is co-brokerage is not
allowed.
Co-brokerage is still allowed.
Co-brokerage is not allowed.

(33:49):
Co-brokerage is still allowed.
Co-brokerage is still allowedbig time.
It is only not going to be inthe MLS anymore.
That is the big change.
It's not going to be in the MLSanymore and you're going to
have to agree to compensationbeforehand.
Sellers will still offer it.
Any seller that's not offeringco-brokerage is probably making
a choice that is going to makeit much harder to sell their
house and reduce the number ofbuyers that can afford the house
.
That is not me discouragingthem.

(34:10):
That is an economic factor ofnot allowing buyers the ability
to finance their cost ofrepresentation into the purchase
price of the asset.
We'll talk more about that aswe go.
We can't advertise co-brokeragecommission anywhere.
Also, not true.
You can advertise it.
The rule right now that they'regoing with is two clicks away.
So you're going to be able totake and have your domain, your

(34:33):
brokerage website, in the MLSand they can click on that and
then it was going to require onemore click to get to the
compensation that will beallowed.
So compensation can be foundthrough the MLS, through people
having their brokerage websitethere and having an additional
click.
So click to get on the websiteand then another click to get to
the co-brokerage compensation.

(34:53):
That is currently where theyare Okay.
So sellers will not be offeringco-brokerage anymore.
Sellers will.
Guys.
Sellers always have, even whenthey haven't needed to like on
commercial deals where there'sabsolutely no requirement.
Almost always on commercialdeals, there is some sellers

(35:16):
offering co-brokeragecompensation because they know
it nets a higher final saleprice.
So we're not going to talk toyou guys about any of that
you've been hearing.
Right now we're just going tokeep moving on with what's going
on with the buyers.
Well, for starters, we can't belazy On the buyer side.
We have been Buyers, has beenthe training grounds of real

(35:39):
estate for a long time.
Oh, you're brand new, you don'tknow what you're doing.
Go work buyers In fact for along time.
Oh, you're brand new, you don'tknow what you're doing.
Go work buyers In fact.
Renee, I hear what you'resaying.
The DOJ says that, but theydon't have any rulings to that.
So, right now, co-brokeragecompensation based upon the

(36:01):
changes coming August 17th I wasgoing to go into that.
The DOJ may take and push backand change it at some point, but
the DOJ has not gotten anycourt cases of that effect.
We're going to talk about that.
Jesus, there's actually achange they made in the buyer
brokerage agreement to deal withthat.
We'll talk about that.
The selling agent and the buyeragent.

(36:22):
Why should the buyer's agent beresponsible for verifying all
the information in this thing?
The agent should be responsiblefor this.
If the seller is paying 0% tothe buyer, how would you know
the seller is paying 0% to thebuyer if you haven't gone to
their website to see what theco-brokerage compensation is.
The co-brokerage compensationcan't be on the MLS.

(36:43):
It's going to have to be twoclicks away.
That's what we're talking about, not verifying the information
in the MLS.
So maybe I wasn't clear on that.
I apologize if I wasn't.
So the big thing is, guys, wecannot be lazy anymore.
We have to take and know whatwe're talking about before we
take them out, and we can'tdepend upon the listing side to
maintain our co-brokeragecompensation for us.

(37:05):
It's not their responsibilityanymore to maintain it.
They should.
They need to if they want totake and get top dollar for the
seller.
But we can't just rely on them.
We actually have to know how toget our documentation signed
because, let's be honest, as alisting agent, I walk in the
room and I say, hey look, I needexclusivity, I need you to pay

(37:25):
me and I need you to pay someother agent you haven't met and
I get that document signed.
All the time I don't say itlike that, but that's basically
the case that I'm making.
The case that agents arefreaking out about right now is
going in and saying to thecustomer hey look, I'm going to
work for you and I just need youto take and make sure that I
get paid.
I feel like that's a mucheasier case to make.

(37:50):
Well, you're more than welcometo take and do that, lisa.
Until the DOJ says differently,you can advertise it all sorts
of other places If you thinkyard signs are really what
people, what agents look at.
Suggest dual variablecommission is now to be

(38:18):
disclosed.
Ah guys, there are these thingscalled phone calls, where you
call the other agent.
You guys do know that thecompensation on commercial deals
is often much more complex,much more convoluted than what
we do in the residential deal.
And we pick up the phone and wecall the other agent.
We say, hey, is it available?
What kind of co-brokeragecompensation are you offering?

(38:40):
And based upon that we buildthe deal.
The idea that somehow, withoutthe MLS, co-brokerage,
compensation is going to be thisunfathomable thing to grasp at
is just ludicrous.
All right, it's.
Not only is it going to beavailable by phone call, it's
also many brokerages are goingto take and have it in their

(39:02):
website.
So I don't understand why thisis such a concern.
In agreements of compensation.
Do we have all listingsre-signed?
Realistically, corrine?
No, there is an additionaldisclosure that they're adding
to the listing agreement, andthere's a doc that's come out
recently that just adds thatdisclosure language in there.
So you can basically have thatsupplemental disclosure signed

(39:25):
by your customer and yourlisting agreement is signed.
We're going to take and coverall that, linda.
I'm going to cover that.
I'm going to cover all that,both, mark, all right, so we've
established credibility up front.
Guys, we have to do it.
The idea of let's just jump inthe car and drive around and

(39:47):
you'll eventually learn to likeme isn't going to fly.
So how are we going to do that?
I want to give you guys thebest path I can think of to do
that.
It's three things that we cantake and talk to the customer
about.
Guys, and I'm going to putforth to you the way we've been

(40:10):
taught to do this in thisindustry frankly sucks.
We've been told go in, ask abunch of questions, ask
open-ended questions, get thecustomer talking, make them feel
heard.
Guys, that's standard rapportbuilding tactics.
And the problem with standardrapport building tactics is
that's exactly what they trainused car salesmen and timeshare
people to do.
Your customer thinks, when youwalk in the door, that you're

(40:32):
lazy, not very smart, overpaidand all about commission.
That's what they think.
That's what the studies showthat customers think of real
estate agents when they walk inthe door.
If you just go in there askinga bunch of salesy sounding,
friend building type questions,you play right into that
preconception.
No wonder they're not going towant to send a document with you
.
Nice and easy.

(40:54):
I gave you anticipate.
Are there things that we cananticipate about the customer?
Does the customer know theprocess better than us?
Do they need to understand theprocess by showing them that we
know the process?
Doesn't that make the case thatthere is a knowledge
differential between us and themthat justifies why they need us

(41:17):
, and not just how the processworks, but the problems along
the way in the normal processwhere other agents maybe make
mistakes or their customers gethurt, and how you make sure in
the way that you handle theprocess it's not going to be a
problem for them.
Do you think a customer wouldbe interested in talking about
that, especially when they'regetting ready to invest hundreds

(41:39):
of thousands of dollars,possibly millions of dollars,
going to the real estate marketwith a real estate professional?
Would they want somebody?
Can I anticipate they mightwant somebody who knows what the
hell they're doing, maybe.
That might be fair.
The next one is the market theability to discuss, not just

(41:59):
guys.
I hear the market conversationsfrom agents and it just kills
me.
I hear the market conversationsfrom agents and it just kills
me.
How's the market?
Oh, inventory's low, interestrates are high.
Are we going to have hot dogsor hamburgers for lunch?

(42:20):
Has anybody ever consideredwhat the buyer is actually
buying?
When they buy real estate, thebuyer is buying the future.
Almost no one buys real estateat breakfast and sells it at
lunch.
People buy real estate and theyhold it for a period of time.
It's that type of asset whichmeans what they're buying is
actually the future.
Now, I know we don't think aboutit much in real estate because

(42:40):
all we think about is theclosing.
Once we get to the closing, weget our check and then we're
good, because we're all aboutTinder, real estate.
Hook up with the customer, getwhat we want and never call them
the next day Not what I'm a fanof, not what I'm a believer in.
If the customer is buying theproperty, that closing is

(43:02):
actually the beginning of theirrelationship with that property,
which is going to typicallyextend for years.
So when I'm explaining themarket, I need to explain where
the market is, how it got thereand where it looks like it's
going, because what's mycustomer buying?
They're buying the.
This is where it looks likeit's going.
Now I know my residential agentssometimes push back on that.

(43:24):
How am I supposed to know wherethe market's going Now?
I know my residential agentssometimes push back on that.
How am I supposed to know wherethe market's going?
Well, guys, there's this veryexpensive bill in real estate
called paying attention, thatmost agents are unwilling to pay
.
When there's inflation.
What happens to real estateprices?
They go up.
How do I know this?

(43:44):
Because I picked up a freakinghistory book and I looked at
every time there was inflationever in the history of this
country, what happened to theprice of real estate.
Duh, and so when it was coming,I was telling my customers this
is the time to get in.
There's also times when I tellmy customers not to buy because
the environment isn't good forit.
I'm telling my customers inSoutheast Florida to stay away
from condo right now.
It's not the environment to bebuying.

(44:06):
And I'm literally telling themplease don't pay me a commission
, don't do this.
I don't want it on my recordthat you did this on my watch
Because the environment is suchthat it's not going to look the
near future for that doesn'tlook good.
The longer term looks great,the near term not so good.
Right, we have to make the case,guys, that before they met us

(44:29):
we were doing a lot of work tobe really worth the compensation
that we're asking them to payus.
Just walking up and saying, hi,I'm friendly, pay me a bunch of
money isn't really a compellingcase.
But if you could talk about theprocess and how you're going to
look out for them within theprocess, if you could talk about
the market where it is, whereit's going, what it looks like,

(44:53):
well, I think that you've gone along way to showing them that
maybe you're worthy of gettingcompensation.
Because, guess what Most agentscan't do, that Most agents
won't do that?
Most agents are too lazy or toobusy advertising.
Because, guys, once again, whenyou have a 13% customer
retention rate, that means 87out of 100 customers you've got
to take an advertised replace,because after they work with you
, they don't use you again.
That is the national averagefor our industry, guys, it's

(45:16):
pathetic bad.
The last piece is the numbers,the investment we have to be
able to talk about theinvestment.
If we want to take andunderstand this well, we have to
be able to have thatconversation.
Well, william realized they'renot going to be marketing to

(45:37):
consumers, they're going to bemarketing to agents.
So, frankly, I don't care whattheir two-click website is as an
agent.
Agents.
So, frankly, I don't care whattheir two-click website is as an
agent.
It was the consumers.
Yeah, I could see your point,william, but it's not going to
consumers.
I mean, if you think thatlittle of real estate agents,
then yeah, that's viable,totally a thing.
So let's take and talk about theinvestment for a second.

(46:02):
Let me share this with you.
I'm going to change my screenshare to this.
Wait for this to load here.
Fantastic, you guys see thegigantic calculator.
If you don't, I don't know whatto tell you.

(46:24):
Let's go ahead and buy aproperty, guys.
Let's go ahead and buy aproperty, guys.
Let's go ahead and buy aproperty for $750,000.
Okay, and let's assume thatthey're going to give us I don't
know 80% loan to value.
We're borrowing $600,000.
That's $600,000.
Let's say we're going to get a7.5% interest rate on it.

(46:46):
Eh, let's do 7.25%.
7.25% is nicer For 30 years, bythe way, what I'm showing you
is a $6 cell phone app.
That's the fully amortizedmortgage payment on the loan.
That's the full amortizationschedule for the loan that I can
send to my customer from mycell phone.
Here's the breakdown ofprincipal and interest paid.

(47:08):
Interest paid, principal paidtotal amount paid for the life
of the loan.
And oh, just in case you'rehaving trouble getting your
customer to commit to buyinstead of stop renting and buy,
here is their mortgage interesttax deduction for year one of
that loan on a $6 cell phone appin your hand in front of them
$43,000 in tax deductions thatthey are missing out on.

(47:28):
But let's say they lived therefor 10 years.
They lived there for 10 years.
They're going to owe the banklet's call it 518,000.
At the end of 10 years ofpayments they owe the bank
518,000.
We got the property, we boughtit for 750,000 bucks.

(47:52):
Let's say real estateappreciates at 5%.
Why are we saying 5% and notthree to three and a half, which
was the traditional number thatwe used for decades?
Well, two reasons.
One, we're still in aninflationary market.
I know that we had labornumbers that came in that's
making it seem like we might bethe tail end of this.
Hopefully that's the case, butinflation tends to resurge.

(48:13):
If you look at the history ofinflation, it has gone down and
come back up and gone down andcome back up.
It has been very traditionallyvery hard to get rid of once it
manifests itself in an economy.
So inflation makes real estateprices appreciate faster than
they normally do.
The other reason why is because,if we're talking about single
family homes, builders haveunderproduced single family
homes for since basically 2012.
So we're about 12 years intothem, building about 400,000

(48:35):
fewer homes than what the demandis every year.
Last year, the demand forsingle family homes was 2.115
million homes.
They built a little bit morethan 1.6 million homes.
Was 2.115 million homes.
They built a little bit morethan 1.6 million homes.
So right now, the aggregate,the total shortfall of housing,
is about 5 million homes.
We have about 5 million homesfewer new construction than we
should have.
So I'm going to use 5% it's alittle bit more aggressive and

(48:58):
say if that home you bought itfor $750,000, if it appreciates
at 5% for the next 10 years,that's what you should be able
to sell the home for.
We owe the bank.
What?
What was it?
$571,000?
Something like that.
Let's say it's $571,000.
I remember what the number was.
That's my sale proceeds andthat's my profit on an

(49:26):
investment.
Of how much money?
$150,000.
Who here is okay with making333% over a 10-year hold?
See, I'm cool with it.
But, as it turns out, when Italk to my customers, they're

(49:46):
pretty cool with it too.
They kind of like that stuffand they kind of like the fact
that I know how to do it.
And when I do it in front ofthe customers and show them what
we're actually doing with theirmoney, what we're actually
trying to do, they're kind ofexcited.
I don't know why that happens.
So, yeah, that is the 10B2Financial Calculator app, guys.
$6 app.

(50:06):
It's something I learned.
Where did I learn that, guys?
You saw those designations.
I took every residentialcertification and designation
that was offered all of them.
None of them ever showed me howto get my head wrapped around
what I was asking buyers to buy.
None of them.
It's not part of real estate.
Part of real estate.

(50:28):
Real estate is all aboutselling people, as opposed to
showing people what you'reactually.
Guys, the real estate will sellitself if you show them what
they're buying.
We don't do it.
We'd rather use salestechniques they're buying.
We don't do it, we'd rather usesales techniques.

(50:50):
$19.99 on the desktop, marie,kay, marie, how long have I had
it?
If you go in the app store onyour phone, it will be $6.
I just had about 140 people buyit yesterday.
I'm promising you.
So, guys, if you want thetutorial video on that, there's
a free tutorial video, right,that QR code is for a free

(51:14):
tutorial video that I do on howto do it as well, with my PDF
cheat sheets on that.
So, yeah, it's six bucks If youdo it on the desktop and I'll
tell you this, marie, on thedesktop, the one that you saw
that I just used right now thatversion of his desktop version
of it.
It is very nice.
It does a couple of otherlittle cool things, but the cell
phone app does all of it aswell, just sometimes not on the
same screen, sometimes you haveto switch from screen to screen

(51:35):
to do it, but it's a reallypowerful tool and I have no
problem.
Guys, I will tell you that apphas made me on residential
customers.
It's made me more than amillion dollars in extra
commissions I would never havegotten, just because I now have
the ability to explain theinvestment that I'm asking them
to make.
Understand you're always askingthe customer to reduce cash.

(51:57):
When you're working with buyers, you're asking them to reduce
cash to extend their position inreal estate.
That's the position we're in.
If you can make the investmentconversation and you haven't
been do you realize how muchleverage is on there to take and
increase the buyer's desire forthe real estate?

(52:17):
Because the things that you'renot talking about are really
strong.
They make the product look waybetter.
So, in order to take and getthese buyer brokerage agreements
signed, what we have to do isdo a much better value.
The way they like to take andsay it in real estate is to make
your value proposition.
The thing is, I heard that amillion times and nobody ever
told me how.
What I'm showing you here, guys, is how to actually do it right

(52:39):
Now.
This is not the class where Iactually teach the calculator.
There's lots of other classeswhere I do that.
I'm not looking to sell classes.
If it's a business decision andthat's all I want to do.
Nobody ever showed it to me.
I had to go learn it in CCIM.
I'm showing it to you so youguys can take and make the
business decision If you thinkyou need more of that in your
business or not.

(53:00):
It's a one-time $6 fee.
Yes, I'm glad you like it,cindy.
I'm a big fan as well.
Was the app for the cell phoneand laptop, angela, because I
teach I have to buy the desktopversion for my laptop, which is
$20.

(53:20):
The one that's on my cell phone, which is the one that I use
with customers, I don't use theone on my desktop with customers
.
The one on my cell phone is $20.
The one that's on my cell phone, which is the one that I use
with customers, I don't use theone on my desktop with customers
.
The one on my cell phone is $6.
Okay, so we have to anticipateobjections.
We're going to have to do that.
But here's the cool thing thebiggest objection is off the
table.
What was the biggest objection,guys?

(53:41):
The biggest objection always tosigning a buyer brokerage
agreement was very simple Nobodyelse is making me sign one.
Why should I sign one with you?
Well, now everybody's got tosign one, so that objection is
gone.
So, if that's the case, thatobjection was hard to get by.

(54:01):
I mean, you could sit there andmake the case, because I'm that
much better and all you coulddo that and there were ways to
get them signed and we got themsigned plenty of times.
It's not a big deal, but thatobjection was one of the tougher
ones.
It's now gone.
The other thing, the reason whyit is this way.
So my customer comes to me whyis it this way?
I'm going to say, look, becausesome sleazy attorneys out in

(54:22):
the middle of the country wantedto get really rich on the back
of real estate.
They saw NAR as a fat cow thatthey could milk.
They went in there, got a boguslawsuit, got it, got a
settlement.
They kicked our ass becausethey made the case that there's

(54:43):
no way that buyer's agents wouldever get compensated as much as
they are, based upon how littlethey do.
And a jury of our peers waseating it up with a spoon.
Actually, it was also thatsellers would never have paid
the co-brokerage compensationhad they realized that it was
negotiable.
That being said, isn't itamazing how people forget what
they agreed to after the fact?
When it's convenient, there's apossible settlement that they

(55:05):
can get.
So when the customer asks mewhy is it this way?
Look, I have to make you signthis because some sleazy
attorneys pulled this nonsenseto take and make the process of
buying a home for you that muchmore complicated and arduous.
I'm sorry, it's got to be thisway.
This is just how the new worldworks.
I am totally blaming attorneys,because guess what Customers

(55:25):
already don't like them anyway,so they're going to buy right
into that and have no problemwith it.
Seller's not offeringco-brokerage.
If the seller if there's ahouse you want to see and the
seller is not offeringco-brokerage, there's a few
things that it could be.
One, the seller just flat outdoes not care about what it
costs you to buy.
They have made that home incash the cash requirement to buy

(55:50):
that home significantly moreexpensive for you.
So I want you to know thatabout this seller is one of
three things it could really be.
Or the seller wants youunrepresented.
Why would a seller want youunrepresented?
Only if they're looking to pullthe wool over your eyes.
They're looking to get awaywith something right.

(56:11):
Or they have a lousy listingagent who didn't explain to them
how important it is to offerco-brokerage compensation to
allow you to be able to pay morefor that house.
All of those are things that Ineed to think through.
Guys, I don't know that I wouldexplain them specifically like
that For me.

(56:32):
Actually, I probably wouldexplain them to my customer very
much like that, but that's verymuch more my style and what my
customers like and respect forme.
They expect that from me.
Right, figuring out.
Those are the germs of the idea.
I'm not giving you scripts here, guys.
I'm just giving you the germ ofthe idea, the seed to plant to
figure out how you're going totake and pitch that to your

(56:53):
customer.
Because I am totally okay withmy customer being upset at the
other side.
They're not offeringco-brokerage.
I just don't want them mad atme for something that's not my
fault that they're not offeringco-brokerage.
I just don't want them mad atme for something that's not my
fault that they're not offeringco-brokerage, right?
That being said, just becausethey're not offering it doesn't
mean we can't get it.
We can talk about that.
So why they should sign with me?
Well, they're going to have tosign with somebody if they want

(57:16):
to see houses.
Anyone that doesn't make themsign is a sleazeball how can I
say that Very technical termsleazeball?
How can I say that?
Because, guys, if you're arealtor and you don't have them
sign, you're going to get finedif they catch it.
You could lose your license andyou're in contempt of court.

(57:36):
For the settlement agreementyou're not asking to sign.
You're allowed to not ask himto sign, but you are behaving in
a way the court has alreadydeemed to be a breach, or at
least the court was gettingready to rule that it was a
breach of the antitrust law sothat non-realtor could
theoretically become part ofthat lawsuit as well.

(57:57):
All right, it doesn't meanyou're going to pay me a nickel
Just because you take an agreedcompensation.
It doesn't mean that that'sgoing to be a check you write
for me.
I am going to do everything Ican to get that from the seller.
It doesn't mean that if theyall it does.
What it does mean is if theyoffer up to the amount that we
agreed to, I can get thatcompensation from them.
So if I agree to X minus oneand they offer X, I can't get X.

(58:26):
If the co-brokerage commissionis X and my agreement is for X
minus one, I can only get what Iagree to.
The limit is what's in my buyerbroker dream, or I can modify
the agreement with mutualconsent of the buyer.
Here's the thing.
The buyer asks where's thatmoney going to come from the

(58:46):
thing?
The buyer asks where's thatmoney going to come from?
They know it's going to comefrom their pocket.
So this agreement is going toallow me to represent you.
It's also going to allow me toget paid and, more importantly
and, guys, if you've done thework, I'm suggesting up front to
have a really good, strongconversation, showing your value
to them, how you know theprocess, the market and the

(59:10):
investment.
I can look them in the eyes andsay and this is where it shows
me that you're committed to meI'm going to take and go whole
hog.
I'm going to go in full boreand get this done for you.
You want to get a house?
Let's go get it.
I'll get it done for you.
But this is what shows mebecause, guys, I have lots of
these conversations.
I have customers that disappearand all this kind of stuff.
This is what shows me you'refor real.
If I'm going to go full bore, Iwant to know that you're for

(59:30):
real, because I think you cantell right now I don't play
around.
Some version of that is aconversation you can have with
the customer.
Guys, it's a lot.
It's okay to say look, I wantsomething to show me that you're
in.
I'm in, are you in?
All right, there's lots ofdifferent ways to get paid.
Were you guys aware you couldget a commission, managed buyers

(59:55):
getting a mortgage.
And how commission now notbeing advertised affects their
pre-approval ratios?
It doesn't affect it at all,jennifer, because the
co-brokerage compensation comingfrom the seller is not going to
count against any credits.
The idea that co-brokerage isgoing away, guys, is not real.
I would be shocked if 98% ofthe listings are not still
offering co-brokerage for thevery reason that you're kind of

(01:00:18):
alluding to, jennifer.
Most people don't have the cashto pay for representation, so
we're going to talk about that alittle bit more as we go.
We could charge a retainer fee.
The agreement now has aretainer fee in there.
We could agree to a flat amount, a fixed amount, no matter what
happens.
We could charge, like anattorney, for billable hours or
per house that we show.
We could have a cafeteria planwhere they pick which services

(01:00:40):
they're going to get.
We could work for free and justaccept their eternal gratitude.
Yeah, you're going to have torun that by your broker because,
understand, even if you workfor free, you are totally on the
hook for liability for the deal.
So you're not really workingfor free, you're working at a
deficit.
You can do some mix of all theoptions of above.
Now, guys, I want you tounderstand these are some of the

(01:01:02):
ways to get paid.
They're not all of them.
I want you to understand theseare some of the ways to get paid
.
They're not all of them.
There's some ways to get paid.
You don't have to offer all ofthem.
You could pick one if yourbroker allows it, and have that
be how you get paid.
I'm sorry, our policy is.
My policy is.
This is how I work.
As it turned out in the 1860s,slavery was outlawed in the

(01:01:23):
United States of America.
Out in the 1860s, slavery wasoutlawed in the United States of
America, which means they can'tmake you work for them for
terms different than termsyou're okay with accepting.
You can always tell them I'msorry, mr and Mrs Buyer, go
pound sand.
You're allowed to do that.
If the seller won't allow youto finance which, offering
co-brokerage that's really whatthe seller is doing is allowing

(01:01:45):
the buyer to finance into thepurchase price their cost of
representation.
If they're not going to let youdo that, then maybe your broker
and some brokers have alreadylooked into this will allow them
to finance their cost ofcompensation.
These are all viable.
So what's not going to happen,mr and Mrs Buyer?
One you're not going to have topay me without knowing it right

(01:02:06):
.
We agree to this agreement.
We go, I take and get a list ofhouses you want to see.
I call them.
All of them are offering somecompensation, some offer, none
whatever.
I'm going to tell you up frontwhich ones are offering, which
ones aren't, what they'reoffering, everything.
Then we are going to decide, mrand Mrs Buyer, which one we

(01:02:27):
want to see.
If we see one that isn'toffering compensation, we can
still place an offer on thathouse, even if you don't have
the financial wherewithal to buyit, unless they pay the
And we can take and negotiatethe co-brokerage compensation on
the contract, becauseunderstand the reason we

(01:02:48):
couldn't do it before, guys, isbecause our code of ethics
precluded us from doing so, andit did it because we were not
parties to the contract.
We, as agents, could notnegotiate our compensation on
the contract and we did not havesigned agreements, typically on
the buyer's side, stipulatingour compensation on the contract
, and we did not have signedagreements, typically on the
buyer side, stipulating ourcompensation, and so you got to

(01:03:18):
love it, man, you got to love it.
When the contract goes in nowand it's asking for co-brokerage
compensation from the seller,who's the one negotiating it?
It's not the agent, it's thebuyer.
Because the buyer has alreadyagreed to this compensation with

(01:03:38):
their agent.
They're saying I will pay youthis much for the house, but as
a term of the agreement I needyou to give me a credit back,
because that never happens right.
Sellers give credits back allthe time, especially in a market
that's not a ridiculouslystrong seller's market.
And understand this, guysco-brokerage compensation has
always been a seller's credit tobuyer's closing costs.

(01:03:58):
It just allows the buyer towrap the cost up in, so they're
never going to have to pay mewithout knowing it.
Let's say the seller comes backand they say, no, I'm not going
to pay that, or they're goingto pay some reduced amount of
co-brokerage compensation lessthan what they owe.
The buyer has the opportunitythen to say, well, I'm just not
going to sign.
No, we're walking away, we'redone.
Or they can agree to it, butthey're never going to have to

(01:04:20):
pay me anything without knowingit first.
Signing the contract is what isthe step that's going to lock in
?
Whether or not they have to payme out of cash or we're going
to get it from the seller.
Now you'll have to pay me andyou don't buy.

(01:04:41):
I want them to understand look,when you sign this agreement,
if you don't buy, they couldhave to pay you.
If you have a retainer in there, they could pay you the
retainer.
The retainer is due immediately, but if they don't buy, they
don't have to pay me.
But the agreement's going tolast until the end of time.
The agreement's going to have afixed end date.
It must have a fixed end date,guys, and it cannot be

(01:05:02):
auto-renewable, or it's anillegal agreement in this state
that you're going to be stuckwith me if I suck.
Is there a conditionaltermination section in the buyer
brokerage agreement?
Absolutely there is.
They can get out of it and thenI won't move heaven and earth
to make sure that seller paysevery nickel of my compensation,
so you don't have to come upwith it in cash.

(01:05:24):
These are all things that I willsay to a buyer.
All of these are things basedupon how I plan to do business,
and these are all the germs ofthe ideas that are objections
that they could raise.
Does that make sense that theycould care about?
You know how long theagreement's going to be for, and

(01:05:45):
all of these are things thatthey could raise.
Does that make sense that theycould care about?
You know how long theagreement's going to be for, and
all of these are things thatthey could reasonably care about
.
I want to take sure I'maddressing them up front, before
they even get a chance to raisethem, and I'm not going to call
it a contract.
Typically, I call my buyerbrokerage agreement and I call
my listing agreement the samething, lisa.

(01:06:05):
The seller could say anythingthey wanted.
The seller could say I want tobe taller and better looking at
the closing.
It doesn't mean it's going tohappen If they've agreed to it,
which is why there is a buyer'sbroker to seller's broker
co-brokerage compensationagreement and there's also a
seller to buyer's brokerco-brokerage compensation
agreement form that exists nowto lock that in.

(01:06:26):
We're not going to take andmake a handshake deal and say,
gee, I really hope they do whatthey said they're going to do.
We're going to lock it up inwriting the way we do everything
else as it turns out, guys,there is a form for that, as if
we haven't heard that before.
I call my buyer brokerageagreement and my listing
agreement.
I call them permission forms.
This is the permissionpaperwork.
Look, if anybody comes into myoffice wanting to know why am I

(01:06:50):
working with this buyer, why amI working with you, I need to
have this form in my folder thatsays look, this is where I have
permission to work with them.
They ask why the listing is onthe MLS.
Here's the form that gives mepermission to put on the MLS.
It's permission paperwork.
It gives me permission to dothe thing we want to do.
So why?
I don't think that shoppingagents on price is a wise choice

(01:07:12):
, guys, when it matters, do youshop on price Like if you needed
a used car desperately to getto work and you could not afford
to miss one more day or youwould lose this job?
Do you go to the used car lotand say what's the cheapest
piece of crap you got?
I don't think so.

(01:07:35):
And so what I usually would sayto customers as, like a quick
and dirty line do you reallywant the spirit airlines of real
estate agents agents?
I think it's important tounderstand, guys, that idea If
you were on trial for murder,would you say who's the cheapest

(01:08:00):
attorney?
They got?
No.
When it really matters, youwant quality.
So I think price when somethingreally matters I think price is
probably the last thing youshould be looking at when it
comes to choosing who is goingto represent you, which is the
reason why I tried to show youhow to pre-negotiate that
position by having a reallystrong conversation up front,
showing them what differentiatesyou from the other agents,

(01:08:32):
other agents.
Can a realtor use a referralagreement with a listing agent
and still work with the buyer?
Robin, I don't know what you'resaying there.
If you're going to getcompensation from the buyer's
side period, you're going to getcompensation from the buyer's
side period.
You need a buyer brokerageagreement, even if you are the
listing agreement One of thelines that I like to use a lot.
Guys, if you think it'sexpensive to hire a good agent,

(01:08:55):
wait till you see how much it'sgoing to cost you to hire a bad
one, right?
So let's talk about workingwith listings, the listing side.
What this is going to look like, this is going to bring some
different objections with it.
There's going to be objectionsthat come from sellers that are
misinformed.
Understand this, guys, to keepit clear in your own mind.
Co-brokerage has always been aseller's contribution to buyer's
closing costs.

(01:09:15):
That's always been what it'sbeen.
It's been money the seller hasbasically given back to the
buyer to pay their agent.
It is a way for buyers tofinance their cost of
representation.
One of the ways I like to takeand put this is, as we look at
this last one, has anybody evergone to a furniture store?
And when you go to thefurniture store, do they make

(01:09:39):
you pay cash?
I like to go to Eldorado.
Eldorado has beautifulfurniture.
I go into Eldorado.
Do I have to pay cash forwhatever I buy?
No, they offer me theopportunity to finance.
Why do you think a store wouldallow you the ability to not pay
them now, but pay them later,on small amounts over time?

(01:10:00):
That would be great for theircash flow, right?
Why would they do it?
Because they know Americanswill pay more.
Anyone will pay more if theycan finance it.
So if a furniture store does itbecause they know it allows
buyers to pay more, doesn't itmake sense for sellers to do it

(01:10:20):
if it'll make buyers pay morefor their house, in fact, more
than what the cost of theseller's contribution actually
is, because their seller'scontribution reduces the amount
of cash the buyer needs bywhatever the loan-to-value ratio
is in the house.
In other words, if it was$25,000 in closing costs that

(01:10:41):
they had and a $10,000compensation they owed, that's
$35,000 in cash if the seller isnot allowing them to finance it
.
But if the seller, if the buyeris using, let's say, 80%
loan-to-value and the buyer nowoffers $10,000 more in purchase
price and the seller allows them, offers them the co-brokerage

(01:11:06):
to cover the $10,000 gap, iftheir mortgage is at 80-20, that
buyer's going to need $25,000plus only 20% of that higher
price.
They're going to need $27,000instead of $35,000.
Angela, I'm finding a lot ofsellers that have no idea what
happened.
They've heard a lot of sellersthat have no idea what happened.

(01:11:26):
They've heard a lot of stuff onsocial media and guys, we know
that for finding out what's trueand real in the world, social
media is the bastion of all realtruth.
Right, they are totallymisinformed?
No, not at all, karen, becauseunderstand this the appraised
value of these homes has alreadytaken into account the idea.

(01:11:48):
We're going to get to theappraiser in just a second,
karen, but it's already beentaken into account what the
contribution that sellers havemade when it comes to
That's baked into the pricesthat we have right now.
Baked into the prices that wehave right now, karen, I want

(01:12:12):
you to understand.
We've been adding the $10,000for co-brokerage compensation
all this time.
The retail prices on the marketare reflective of the seller
offering co-brokeragecompensation back to the agents,
because that's the vastmajority of sales that's
happening.
Does that make sense?
So the prices that we see?
Well, christy, I hope you knowlike I am totally being

(01:12:39):
sarcastic when I say that theinternet is the bastion of all
real truth.
That was as much sarcasm as Icould pack into a comment.
Not needed for commercial, notneeded for land and not needed
for leasing.
Except, john, here's the thingWith commercial they're probably
righteous With leasing.

(01:13:00):
If your MLS has leasingcommissions in there they
already nailed them once on thisI would imagine most boards are
going to move away from havingthe compensation for leasing in
the MLS and if they do, I thinkit creates the exact same
situation.
We're going to have to use thebuyer brokerage agreement, which
also has a place for leasing onit, to lock in our compensation

(01:13:23):
.
All right, without co-brokerage.
This is what the seller has tounderstand.
Fewer buyers can afford it.
Yes, the buyer brokerageagreement, maria, has a section
for leases in there.
If the customer that you'vesigned it with, even though it
says buyer brokerage agreement,it has a section on leasing.
So it is a place where you canlock in the leasing compensation

(01:13:44):
.
Few buyers will be able toafford it, because now you're
asking the buyer to come up withthe entire down payment plus
100% of their cost forrepresentation.
It is a lot of money.
Typically, what's the biglimiting factor of how much
people can afford, how much cashthey have?
It's more expensive to buy thanthe nicer house.
At least it's more expensive incash.
So what I'm saying is the housefor 500 and the house for 540,

(01:14:06):
the house for 540, that's thenicer house that's offering
co-brokerage compensation mayactually wind up making it so
that the buyer needs to come upwith less cash out of pocket to
buy than the house at 500.
Because now they have to payfor their co-brokerage on top of
the down payment.

(01:14:27):
What about post-inspectiondeficiency seller contributions?
So that is not going to changeburden?
Um, there's limits to whatsellers can contribute to buyers
based upon the mortgage, butall the major lenders have said
basically, we're not going toupset the apple cart.
The co-brokerage compensationis not going to be counted

(01:14:49):
toward any of those percentages.
So typically you're going totake the way it's been normally
expressed.
When we've ever done it, it hasbeen that if there's a repair
credit like what you're talkingabout, as long as that buyer is
not up against their mortgagecontribution credit limit from
the seller's side, we'll justtake and rather than say it's a

(01:15:09):
credit for repairs, we're goingto say, hey, the seller is
contributing to buyers prepaidsand closing costs.
In other words, we'recontributing cash to reduce how
much cash the buyer is going toneed to allow them to have the
cash to fix the stuff that's gotto be fixed in the house.
Fix the stuff that's got to befixed in the house.

(01:15:30):
Yeah, guys, that's, I think,what you're hitting on puff and
everybody is.
This is nothing new, it is.
It is the longest standingseller's contribution to buyers,
closing costs out there and allthe prices out there are
reflective of that seller'scontribution.

(01:15:50):
Being there Is the new law ofcompensation the MLS forever.
Yeah, there will never becompensation in the MLS forever
unless the Colorado law takesand makes a major change and
maybe new law gets passed, butfor right now that's what it
says.
The appraiser guys understandthis.
The house does not become morevaluable because the seller is
not offering compensation.
So imagine we have three closedlistings in an area.

(01:16:13):
Let's not talk aboutco-brokerage compensation
because I don't want to runagainst the fair housing.
Let's say we're talking aboutthe sellers.
In all three of these homesthat closed for $500,000, all
three sellers offered a $10,000buyer credit.
And now this new seller seesthose $500,000 close prices and

(01:16:34):
they want to sell theiridentical home for $500,000, but
they are not going to offer the$10,000 buyer credit.
Is that home worth $500,000?
Well, the other three homesthat closed and netted to the
seller $490,000.

(01:17:01):
So, no, no, the house that'snot offering the credit is not
going to be able to appraise for$500,000.
It's going to appraise for$490,000.
This is the reason why, forthose of you that have been
doing this a while and theappraiser calls you and asks you
hey, were there any sellercontributions?
Yeah, richard is here.

(01:17:21):
Gene Richard is here.
You got to love it.
You got to love it.
You got to love it, cool, cool.

(01:17:43):
For those of you that want toactually understand how it's
going to work with the appraiser.
The appraiser is going to dowhat they've always done when it
comes to a seller'scontribution.
They're going to mark down thevalue of the property.
They're going to reduce thevalue of the property to offset
the compensation, to offset thecredit that was given, because
the net value of the house isactually lower.
Okay, appraisers will ask formuch lower home values.

(01:18:06):
Appraisers will ask and marklower of the values of the homes
that do not offer co-brokeragecompensation.
A seller will not net any more.
Now, guys, there are instanceswhere the seller will net more.
If it is a cash deal and thereis no appraisal contingency,
then the appraiser doesn't getinvolved.
But that would assume that acash buyer is willing to pay

(01:18:28):
more than any of the financebuyers Maybe very high end homes
.
A situation like that couldexist, but typically it's going
to be a buyer that's borrowingmoney that's going to pay the
most for a home.
So what I'm saying is you know,uh, gabrielle, I have asked that

(01:18:53):
question and I'm still waitingto get the final answer on it.
I've asked the heads of miami,the largest realtor association,
what their plan is.
They have had in our mls for avery long time what the sellers
can say, if there were anysellers concessions and what
they were.
I don't think it's a problemafter the fact to mark down what
the compensation that was paidis, because it helps to do
better valuations on propertiesand I don't think that is in any

(01:19:15):
way antitrust.
So hopefully it will be,because it's gonna help both us
as agents and the appraisers.
It is also gonna be very muchincumbent on agents to correctly
put the correct information inthe MLS so the correct
valuations can be done.
So what am I saying?
I'm going to tell my sellerslook, only stupid agents would
do this.
And any agent that's going totake your listing without

(01:19:36):
co-brokerage compensation onthere has literally shown you
how much they are willing tosacrifice of your best interest
in order to get another listing,because the number of people
that can buy your home will besignificantly reduced and in
addition to the number of peoplethat will be significantly
reduced, it will not increasethe value of your home.
So you're going to have fewerpeople seeing it and the number

(01:19:56):
of people that can buy it isgoing to be reduced and you're
not going to want to put moremoney for the benefit of doing
all this.
Some repairs, the credit statesit's a seller's contribution
toward closing costs.
Now, what are we saying aboutthe commission, angela?
What we're saying is that we'regoing to have an agreement with

(01:20:17):
the seller or the seller'sbroker.
There are two forms to do this.
There is the seller'scontribution or seller to buyer
broker co-brokerage form, whichis going to spell out what the
seller is offering to thebuyer's broker for compensation.
And there's a seller's brokerto buyer's broker compensation

(01:20:38):
form which spells out the amountof co-brokerage compensation
that was in the listingagreement.
So let's say you call thelisting and the amount of
compensation they have is thesame or greater than what is in
your buyer brokerage agreement.
You're going to send them aseller's broker to buyer broker
agreement form when you'replacing the offer to lock in the
agreement of what thecompensation amount is going to

(01:20:59):
be.
That's going to be given to you, that is going to be expressed
to the title company andeverything will proceed as
normal.
Expressed to the title companyand everything will proceed as
normal.
If the amount in theco-brokerage offered is below
what you have agreed to withyour seller and you negotiate on
the contract that the seller isgoing to make up the difference

(01:21:19):
, you're going to need to useboth forms.
The form's name is seller'sbroker to buyer's broker
compensation.
It may be slightly differentthan that, but there's a
seller's broker to buyer brokercompensation form.
I believe that's the correctname and there's also a seller
to buyer's broker compensationform.
So in an instance where theseller has now agreed to make up

(01:21:42):
an amount greater than theamount that was in their listing
agreement let's say they wereoffering X minus one and your
agreement was for X Now they'regoing to take and give you two
forms.
The seller's broker is going toprovide you for the form for X
minus one and the seller isgoing to take and provide you a
form for the missing one.
If that's what you agreed to,none of that is going to count

(01:22:02):
against their mortgage creditsthough the limits for their
mortgage.
It's not going to count.
The guidance has already comeout from Fannie and Freddie, va,
fha.
They're not going to count itSoon.
They would continue to track.
They're going to have tobecause otherwise, ellen,
they're going to have to totallycome back.
Yeah, they have those yes-nofields in there.

(01:22:26):
We're going to see whether ornot that stands up.
There's a bunch of stuff thatthey're doing that's really
running up against having aproblem with the settlement.
We'll see.
They are excluded from thechange, patricia, except that
what they're doing with therental listings is the exact
same thing they just got suedfor in the purchase listings,
which means that it's just amatter of time till we get sued

(01:22:51):
on that front as well.
So I would not be surprised ifthe MLS takes those
compensations out as well.
Not saying it's going to happen, I just wouldn't be surprised.
The only alternative would befor buyers to pay cash.

(01:23:12):
Totally agree, andrew, totallyagree.
And frankly, it makes thebuyer's experience of working
with us more complicated.
Yeah, that's what I would haveexpected, ellen.
That's what I would haveexpected.
My big question wasn't on that.
My big question is whether ornot, post-closing, we're going

(01:23:34):
to be able to put the amount ofco-brokerage compensation that
is in there All right.
It's going to make your homeless desirable to buyers if
you're not offering it.
If you don't offer the peoplecoming into the furniture store
the ability to finance theirfurniture, they're going to buy
less furniture or not buy any atall.
It gives you a competitiveadvantage over every other

(01:24:02):
listing that's not offering ittoo.
So it's going to make yourhouse look better.
It doesn't hurt your net at all, unless it's a cash deal, where
the cash buyer happens to bethe highest paying offer, and
even commercial deals havealmost always offered it All
right Working with other agents.
Well, guys, you're going to needto answer your phone.
Linda, you will always need toask that.

(01:24:26):
You will always need to.
You cannot modify any formwithout mutual consent to amend
a BBA If the seller offers morethan they agreed on the BBA new
home builders offering.
But no, linda, there's actuallya potential way around it.
We are gonna see if it flies.
I don't have.
This is the shorter version ofthis class.

(01:24:47):
Usually it's a three-hour class.
In section 14 of the buyerbrokerage agreement, the last
line that is there basicallyallows the seller to pay you
additional compensation.
That is not co-brokeragecompensation to the buyer's
agent, that the buyer is notresponsible for, and basically
it is the buyer giving you thatthe buyer is not responsible for
and basically it is the buyergiving you permission to access

(01:25:08):
that.
So if the seller is offering abonus or things like that, that
is what that's designed to doRereading the settlement and the
specific language that's inthere about the buyer needing to
know about any compensationupfront.
I don't know if that's going tostand, but frankly, the buyer

(01:25:29):
brokerage agreement is the bestand closest document that we
have.
So I will tell the appraiserthat there was no.
What I'm saying to you, angela,is the seller.
If it's not disclosed in theMLS, the appraiser will.
There was no.
What I'm saying to you, angela,is the seller.
If it's not disclosed in theMLS, the appraiser will call you

(01:25:49):
and ask you if there was anyco-brokerage compensation and
they will also ask you, as aseparate line item, if there was
any seller's contributions tobuyer's closing costs.
It will probably still be twoseparate categories.
If it's not, you'll justaggregate the two and tell them
the total.
All right, the difference is wecan negotiate as part of the
offer.
We've covered that as well.

(01:26:10):
If the seller offers more.
You can't ask for more thanyour agreement was.
For guys, there is nothing inthe settlement that precludes
you from putting theco-brokerage compensation
anywhere else, linda.

(01:26:30):
Anywhere else it's just notgoing to be in the MLS.
The good news for you guys isthis and let's cover one other
thing, because I saw before I dothat Open houses.
How do we handle open houses.
You are allowed to show anunrepresented buyer an open
house property as a service tothe seller.
But even if you know yourseller is offering co-brokerage

(01:26:52):
compensation, you cannot getthat co-brokerage compensation
without a signed buyer brokerageagreement from the buyer of the
property.
So if the seller is offering Xtimes two X for the seller and X
for the buyer of the property,so if the seller is offering X
times two X for the seller and Xfor the buyer side, if you work
with that seller and you closethe deal without a buyer

(01:27:13):
brokerage agreement, you willonly get the listing side of the
deal.
No, giovanna, not at all.
Listings are no good withoutsomebody to buy them.
And here's the thing I want youto understand.
This is really cool, giovanna,because now this listing agent
doesn't have a competitiveadvantage.
If the listing agent wants theextra compensation for working

(01:27:38):
both sides of the deal, theyhave to get a buyer brokerage
agreement signed as well.
So every single time that abuyer goes into a house, they're
going to go around the agent.
They're going to have to get adoc signed as well.
So it's not that bad.
It really isn't.
Now one of the big things toconsider is if a buyer comes to
you unrepresented, what are yougoing to do?
What's your play?
Because you're going to need tohave a play.

(01:27:59):
Are you going to sit there andsay what if they say, yeah, I
want this property, but I don'twant to pay you?
What are you going to do?
You do have the right to say no, go jump off a bridge.
You have the right to say well,you know what.
I need you to sign this nobrokerage agreement right here
that stipulates that I am notonly going to not negotiate for
you, I'm going to negotiateagainst you.

(01:28:19):
I'm going to do everything, I'mgoing to move heaven and earth
to make sure my side comes outahead and you lose on this deal.
You could absolutely, guys,whatever you want, but you need
to anticipate it, becausesomebody is going to come to you
and they need to know ifthey're not paying you and you
intend not to represent them.
They need to know that you'renot representing them.

(01:28:40):
You need to make it clear Allright, what is this?
Can we create an externalwebsite and have no, marcus?
No, you will totally get nailedfor that.
Buyer agreement could have beenin place anyway.
Connecticut always has buyer'sagreement.
Absolutely, angela.
I mean, florida is just one ofthose places where there was no

(01:29:02):
agreement.
In most states, you needsomething signed to work with a
buyer at all.
So the good news is the numberof agents in the industry is
going to decrease.
The number of transactions willnot.
The deals that close will bespread among fewer agents, which
means, if you get your headwrapped around this, you'll make
more money.
All right, get yourself in theright place.
So these objectives are goingto come in.

(01:29:23):
Be ready to take a deal withthem, commit to overcome them
and, guys, get yourself around agroup of people that are going
to help you.
All right, that's really thebig stuff that I can give you
for this.
That being said, that's thething that Jesus told you about.
I know everybody is excited toget the questions and answers
with Richard, so we candefinitely get them in here.
And yeah, thank you, linda, Iappreciate it.

Speaker 1 (01:29:48):
All right, guys, we're back.
We have Richard Barber here,Just for those of you that
weren't around when I gave theintro before.
So, richard, aside from beingthe that camera all right, great
Aside from being the currentchairman of the Florida Real
Estate Commission, which I'massuming all of you know what
the Florida Real EstateCommission is he's also been an
attorney.
Richard, you've been a realestate attorney for man almost

(01:30:11):
20 years, almost 20 years, it'sbeen a long time.
Yeah, so I'm getting old and youknow the thing is this.
So you know, when you've beenin the business as long as I
have, you know there's realestate attorneys, and then
there's real estate attorneys,right.
What I mean by that is there'sthe ones that do you know 10

(01:30:34):
different things, and you know,one of those 10 different things
is real estate, right?
So Richard is a hardcoretransactional guy.
You know we have a titlecompany together Coral Gables
title, by the way, send businessour way and so he's in the
thick of it every single daywith the nitty gritty stuff.
So, you know, in his role asthe chairman of the Florida Real
Estate Commission, he, you know, understands what realtors are

(01:30:55):
going through, what they shouldand shouldn't do, and you know,
as a transactional guy, heunderstands the.
You know there's always Ialways see the distinction
between the classroom and thestreet, right, so he's in both.
So today we're going to go overthe buyer broker agreement,
right, buyer brokerage agreement, yeah.
So you guys should see that onyour screen.

(01:31:17):
We're going to go through thatagreement together and then
we're going to go right intoquestion and answers.
We've gotten a ton of questionsalready.
So, yeah, richard, there you go.

Speaker 4 (01:31:28):
Thank you, jesus.
All right, everybody, thanksfor being here.
So the reason why we're goingto go over this what is pretty?
It's a pretty basic form.
It's only got, you know, twofull pages of text and a little
bit on a third page.
And the reason why we got to gothrough it is because, if you
are going to continue to be inthis business now, you have to
have a mastery over this form.

(01:31:49):
You're going to have to be ableto explain it to a prospective
buyer, client, and you're goingto have to be able to make sense
of it so that they will feelcomfortable signing it.
I mean, it's a very difficulttime now for agents that
primarily represent buyersbecause, you know, prior to the
NAR settlement, this form wasvery rarely used.
In fact, it might have almostnever been used.

(01:32:11):
So it's very important that youunderstand the form and you
understand how to complete itand how to put yourself in an
advantageous position and,obviously, be able to take care
of the buyer so that you canstay in the business All right.
So what we're seeing on thescreen is the first three
sections of the form, and it'simportant that we understand the

(01:32:32):
concept of what's going on here.
Ok.
So first is the parties.
This may sound obvious, butwhen you're filling this out,
you as a licensee, as anon-broker if you are a sales
associate or just a brokerassociate broker if you are a
sales associate or just a brokerassociate, you are not the
party to the agreement.
Okay.
So you are not going to beputting your name on the line

(01:32:53):
where it says consumer, brokerat the end.
Okay.
So you know the customer isobviously going to go on the
consumer line and then thebroker your brokerage is the
party to the agreement.
Okay, the commission belongs tothe broker.
The broker pays you a split asa function of being employed by
the broker.
So make sure that you fill thatout correctly, because that's

(01:33:13):
an automatic and easy way to geta complaint filed against you
on your license and it would bea serious issue.
The second item is the term.
So everybody is afraid oflong-term contracts.
Nobody likes long-termcontracts and this is true in
all areas.
This is true when you knowyou're leasing a copier for your
office.
You don't want a long-termcontract.

(01:33:34):
You know, when you're signingup for a membership at the gym,
you may recall back in the daythere was these Bali,
scandinavian places and you'dsign these agreements and you
know people didn't realize thatthey were very long-term
agreements and that you couldn'tget out of them Right, and so a
lot of people's credits wereruined as a as a result of that.

(01:33:54):
So you want to be able to tokind of be flexible on the term
that you propose to the buyer sothat the buyer doesn't feel
locked in, even though there isconditional termination, and we
can talk about that during the Qand a is there a minimum?

Speaker 1 (01:34:07):
is there like a minimum time that we're allowed
to put in there?

Speaker 2 (01:34:10):
No, I mean it could be for, it could be for a day,
it could be for a single house.

Speaker 3 (01:34:14):
Yeah.

Speaker 2 (01:34:14):
It could be as specific as that.
So if they say hey look, I justwant to work with you to see
this house and you know thesituation and that's that's how
you choose the business decision.

Speaker 1 (01:34:22):
Because again, so as long as the house is not shown
without it.
So it could be a 24 houragreement, right, absolutely.

Speaker 4 (01:34:30):
And you need to have it in place before you show
property, all right, and that's,and that's really the, that's
really the trick.
So be flexible on the term atthe same, and also be cognizant
of the fact that the agreementhas what's called a built in
protection period.
So you know, it's not that easyto get screwed, which is what
everyone's concern is.
Oh, I'm going to show a bunchof houses and then you know the

(01:34:50):
agree, I make the agreement fora week and then the next week
the guy you know the customerbuys one of the houses I showed
him and I get screwed.
That's not the way it works,okay.
So just be ready to be flexibleon the on the term, okay.
And the third is the property.
So this is the first sectionthat has some art to it, and so

(01:35:11):
if you read, it says consumer isinterested in acquiring real
property as follows or asotherwise acceptable to consumer
, and then it says type ofproperty and location Okay.
So here you want to kind of tryand be as broad as possible.
Obviously, if you have a buyerthat says I only want two-story
single family homes with poolsin Coral Gables, well, you're

(01:35:35):
dealing with a guy that knowswhat he wants or a lady that
knows what she wants.
But other than that, you wantto try and be a little bit broad
.
This way you're casting a widernet in terms of where and when
you're going to be entitled tocompensation.
So, type of property, obviously, there it's probably going to
be something like single familyor condominium townhome,

(01:35:56):
something like that.
Right, you put them all you can, you can, no restriction on
what you can put in.
And again, my advice would be totry to cast as wide a net as
possible this way.
If you, otherwise, what couldhappen?
Let's say, you say singlefamily home and the guy ends up
buying a condo.
Well, that's arguably not goingto be covered by the agreement.
So again, what you're trying todo is avoid a situation where

(01:36:19):
someone's trying to avoid payingyou.
All right, and to do that yougot to be careful about how you
set up the parameters of the doc.
Same thing with location.
Ok, like I'm looking at onehere.
That's a form, an example form,and you know the location says
Hialeah.
If you're not from Miami youprobably don't know.
But Hialeah is like this littletown, it's famous for being

(01:36:40):
terrible, although it's a littlecountry.
Yeah, it's really not that bad,but it has a bad rap.

Speaker 1 (01:36:46):
Well, there's more fraud in Hialeah than all other
states combined.
Combined states.
That city commits more fraudthan all other states combined,
and that's an actual fact.

Speaker 4 (01:36:58):
Well, not the city, but the humans in the city.
Right.

Speaker 2 (01:37:01):
So let me talk this out.
There's a couple of questionsthat have come through that I
want to take and hit you withSure.
Let me talk this out.
There's a couple of questionsthat have come through that I
want to take and hit you withSure Because I'm looking at the
chat.

Speaker 1 (01:37:08):
Yeah, yeah, absolutely.
I got the laptop right here.
That's great, isn't that cool?
I like this.

Speaker 2 (01:37:11):
So, yeah, they're asking if they can just put
residential there, whether thatwould be too much of a blanket
term, or is it better to breakit down?

Speaker 4 (01:37:18):
You can absolutely put residential Residential real
estate Right.
So so everybody knows there isno set of rules or statutes that
says hey, for section three,you know, section a, three, a
type of property.
You can and cannot say this.
You know, this is just the artof contract drafting.
So you can put residential, youcould put commercial, you could

(01:37:39):
put you know, whatever you, you, you, you wouldn't put
commercial, but you could, youcould use a word like
residential.

Speaker 1 (01:37:44):
So, richard, I have a client comes into the office.
He says he wants to buy right.
I do not know that he signedanother seven of these for two
months.
Okay, I take him to closing.
I'm the one that actually getsto closing and collect my
commission, these other brokersand this would happen to me

(01:38:08):
before where I had to go tothese arbitrations, and it's
because of procuring cause.
What the hell are they going todo now with procuring cause?
Because I have no way.
There's no registry that I canlook at and see that this
particular buyer signed anotherfive, six, seven agreements.
And how does that happen withtime overlapping?

(01:38:30):
Is it the one who signed itlast?
I mean, how are they going tohandle that?
And Cadillac, maybe you know?

Speaker 2 (01:38:35):
Yeah, I'll defer to Richard.
I mean, I think I know.

Speaker 4 (01:38:39):
Well, there were several questions in there, but
let's Number one.
The promulgated buyer brokerageagreement form is not sexy,
okay.
In fact, I find it to be lessthan spectacular, particularly
because it lasts.
Problematic yeah, potentially,and the reason why is that it's

(01:38:59):
too simple, okay, and so I'mworking on one.
So I'm working on one, I'mdrafting one that I will share
with clients and people who, youknow, who want to obviously use
it.
That will contain somewarranties and representations
from the buyer or the companysaying I've not signed other
agreements.

(01:39:19):
Now they could lie.
Ok, so it doesn't, or nothaving that in the document
doesn't solve the problem thatyou're talking about.
What it does is it gives usammunition for when the problem
comes up.
That's number one.
Number two in terms of the we'dhave to understand that what a
situation where a buyer orconsumer signs more than one of

(01:39:40):
these agreements?
Ok, that puts the consumer atrisk of breaching their
obligations to the other brokeror potentially to you.
Ok, it doesn't really affectyour entitlement to commission
under the buyer brokerageagreement that you sign.
Now where it could getcomplicated is if you show the
buyer a property that anotherbroker had already shown him.

(01:40:03):
Now we get into a procuringcause.
Right Now we're into gettinginto the world of the procuring
cause, right?
So, to the extent that aconsumer has more than one
active buyer brokerage agreementand you show, or each broker is
showing, different properties,what's going to happen is
probably nothing Right, unless,like I said, it just so happens

(01:40:26):
that both brokers show the sameproperty and then, when it comes
time to pay commission on that,you know there's going to be a
problem, there's going to be adispute and and we, you know,
we'll see how that shakes out.

Speaker 1 (01:40:37):
I'm going to spit fire.
I'm sorry I'm throwing a coupleof these out there here, but,
but, um, okay, one that I knowis going to happen.
Um buyer shows up and says heyman, I signed a buyer broker
agreement with this particularperson because I absolutely had
to.
Ok, and this person's notanswering my phone calls.
This person is not working in aprofessional manner.

(01:40:57):
I want to go with you.
How do I protect myself?
Right, Because the way it washappening before and the way I
realized that before Richard andI'm going to obviously I'm
going to exaggerate and make it,make a kind of a joke out of it
, but the association and theNAR didn't really give a shit.
If, if realtors shot each other, right is when you affected the

(01:41:17):
customer, when you affected theconsumer nowadays, like what
they call it nowadays Right.
So I always stayed out oftrouble and I always kept my
nose clean, knowing that as longas I did what was good for the
customer, for the consumer, Iwas good, right.
So if this particular person isstuck with somebody that's not
helping them out has a highlevel of unprofessionalism,

(01:41:39):
right, the way I see it is, I'mgoing to rescue them, I'm going
to get the job done and I'mgoing to find them a house Right
, but now I'm putting myself atrisk.
I'm putting them at risk.
What's happening exactly?

Speaker 4 (01:41:49):
No, I don't think you're putting yourself at risk.
I mean, section 9 of the buyerbrokerage agreement contemplates
what's called a conditionalterminationate the agreement
Okay, and if the broker agreesyou can also provide for a fee

(01:42:09):
there.
So let's say you've alreadyshown 10 properties.
You're a little upset that theguy doesn't want to.
Well, you got to anticipatethis.
So at the time of formation,right in the law, we call the
moment when the contract is iscoming into being.
We call that the moment offormation Okay.
So at formation, in sectionnine, you may want to consider
putting some fee in there thatsays hey, if you are going to

(01:42:33):
fire me, basically, and I'vealready done some work for you,
you're going to pay me X money,okay, and you should.
You should.
You know again, the exampleform I'm looking at has zero,
because that's being aggressive.
That's you wanting to get thebuyer to sign.
Unfortunately, we're going tohave to get a little better
about protecting ourselves andso a little background noise

(01:42:55):
there, and so what we're goingto want to do is put something
in there that makes it so thatthe consumer thinks twice about
terminating the agreement for nogood reason.
Now, a situation like you'redescribing, where the broker
they hired or the agent.
These people are a disaster,you know.
This is why a buyer, a savvybuyer, is only going to want to

(01:43:18):
be tied up for a relativelyshort term.
And that takes us back to theconcept of section two.
What is the term of theagreement?
You know, if you try to lock ina buyer for a year, in my view
you're not going to have a wholelot of success.

Speaker 1 (01:43:30):
Right, but here's the thing.
So I was talking to a friend ofmine the other day, and
yesterday actually, and I said,man, you know what these changes
?
I'm not worried about me, I'mnot worried about my business in
these changes.
Right, like I've been doingthis 25 years, I've got you guys
that are direct source ofinformation.
We're going to be all right,we're going to thrive out of

(01:43:50):
this right.
What I'm more concerned aboutis as a purist, as a guy who's
been only done this business andit's probably only going to do
this business for the rest of mylife, right, it's the
reputation, it's the damage thatcould potentially happen to the
business, right?
So what I mean by that issomebody comes to me and says,

(01:44:10):
hey, I signed with this person,I don't want to work with them
anymore.
And now I don't know how itworks in Wichita, kansas, when
you do these classes over there,cadillac, but over here people
don't answer the phone right,it's everywhere.

Speaker 2 (01:44:23):
And we can't it's a hundred percent of everything.

Speaker 1 (01:44:24):
So I come and now they can't get in contact with
that person, or that person hasno motivation whatsoever to
cancel that agreement Right.
So now, what do we do with thatcustomer?
We can't work with thatcustomer because he has a
contract with a buyer, brokeragreement with somebody who
doesn't answer the phone anddoesn't answer emails.
You can work with that person.

Speaker 4 (01:44:42):
So let's go through.
It's a great question.
Let's go through some analysisFirst.
You're going to want to be verycareful, and the reason why is
because, in Florida at least, wehave a cause of action called
tortious interference withadvantageous business
relationships.
And what that means is, if youand I have a contract, okay, and

(01:45:04):
we're doing business together,and then Cadillac is in a
competing business with me andhe knows he's aware of our
contractual agreement, okay, andhe comes to you and he
interferes with it and causesyou to terminate and come with
me.
I could potentially sueCadillac for tortious
interference, okay.

(01:45:24):
Now you may say to yourself well, shit, I mean, I see it all the
time that we have.
You know you're a customer ofAT&T and T-Mobile, all day is
running these commercials.
You know, telling you thatthey're going to give you a
better deal.
Okay, now, that's indirectinfluence.
That's not the same.
That's not quite the same assaying, hey, I want you to

(01:45:48):
violate your contract with Jesus.
So the fact that you advertiseor that you promote that you
provide a better service thanagents who, for example, don't
answer the phone and don't dothe things they're supposed to
do, that's not going to get youin trouble If somebody comes to
you and they say I signed withsomebody else and I don't want
to work with them anymore.
You're going to have to thinklong and hard about what are the
questions that you're going toask, to make sure that you're

(01:46:09):
not going to waste your own time.

Speaker 1 (01:46:11):
Do we have a form that we create to make that
transfer?

Speaker 4 (01:46:15):
to say, Well, you can't.
No, there's no form that wouldmake the transfer, because you
can't get rid of.
The consumer cannot get out oftheir buyer broker agreement
without the assistance of thebroker, right?

Speaker 1 (01:46:29):
That's what the conditional termination is If
that guy does not answer thephone, then Doesn't matter.

Speaker 4 (01:46:32):
So what you have to do is you have to find out, you
have to ask for a copy of it,you have to figure out what the
term of the agreement is.
You have to ask him what he hasseen you got to ask him what
he's been shown right.
And that's why a lot of theseagents, if you notice and I've
noticed in the past severalyears when you sign up with a
broker or an agent, you want tolook at houses.

(01:46:53):
What they do is they put you onthis email feeder and every day
you'll get 50 houses in youremail, even if it's not at all
what you're looking at.
And what they're doing there ismaking it so that they have a
good argument that they're theprocuring costs right.
So you need to be aware You'dhave to go through a vetting
process with this consumer tosee how long have you been a

(01:47:14):
part of this agreement.
You know who's the broker, doyou know them?
You know how many propertieshave been shown, et cetera.
So I figure out if it's evenworth your time.

Speaker 1 (01:47:23):
I've had.
I've had to go to the board, tothe association a couple of
times to go through thesearbitrations, these procuring
cause arbitrations or whatever.
And just seeing a property,just seeing an email or anything
is nowhere near enough.
In my in the cases that I'vebeen there, it's been who
actually not only even shows it,like the cases that I've been
in that I've won has not beenwho shows it, it's been who

(01:47:46):
actually puts the offer.

Speaker 2 (01:47:48):
And I think that's I mean realistically, and the
cases that we're seeing here,the questions that we're seeing,
is you know if the buyer signsrepresents to you that they
don't have anything signed andthey actually do have one sign
and you find out about it afterthe fact.
You know you've gone based uponwhat the buyer has represented
to you and then you move forward.
I mean realistically, the onethat's on the hook potentially
is the buyer for two commissionsAgreed and that's why.

Speaker 4 (01:48:09):
but I think these forms you know like look, if
you're not going to use one madefrom scratch, you should have
like an addendum or a rider tothe exclusive buyer broker
agreement that containsrepresentations like that.
Hey, I am not a party to anyother buyer brokerage agreement.
Right, you know, not been aparty, because here's the thing,
just saying it could end.

(01:48:29):
It could have ended last week,but the protection period is
still in place.

Speaker 3 (01:48:33):
So they're still subject to it, right?

Speaker 4 (01:48:34):
So the phraseology has to be clear.
But you're just going to haveto vet these buyers.

Speaker 1 (01:48:42):
I mean, you're just going to have to be sure, Like I
said, I'm not worried about mybusiness, or I'm just worried
about the industry and having todeal with this bullshit, right
and just these buyers havingmore steps to have to go through
to actually buy a home.

Speaker 2 (01:48:56):
So so let me just take what it is, the question,
one of the questions in heredoes the listing agreement have
a clause about consent of alimited, of a limited
representation?
There's three different listingagreements and there's three
different buyer brokerageagreements, all of which take
and cover the three differenttypes of brokerage
representation that we'reallowed to give no brokerage
transaction, brokerage or singleagencies.
I think that answers yourquestion, but I'm not sure.

(01:49:18):
Connie basically asked thequestion which Richard just
answered, which is the idea ofadding a section and if they're
not party to that, they're notparty to that.
They're not party to otheragreements and it's hard to hear
me.
All right, let me try to getthe mic a little closer, play
musical microphone and see ifthat helps any.
All right, can you guys hear menow Better?

(01:49:38):
And fantastic guys, all yourcomments on the sound.
The mic lost where thequestions are.
Give me one second here.
Um, yes, angela, obviously weneed to educate the consumer on
what the document that we'regoing to ask them to agree to is
.
But just like any good, anygood interaction with the buyer,

(01:49:59):
I think first you need to makethe case why you're worthy of
getting a doc sign before you goover the document.
The document in the listingpresentation is usually the last
thing that I bring out and thenI go over that as the end of my
agreement.
I think mirroring your buyerpresentation upon your listing
agreement and the format thattypically is most successful is
probably going to serve you well.

(01:50:20):
It was my understanding that,like the listing agreement, once
the buyer signs a new BBA, itautomatically terminates the
protection period.
Not necessarily so Well, we'llget there.
We haven't let Richard do histhing, jose, good question.

Speaker 4 (01:50:38):
So sections four and five, cadillac, if you can pull
them up, I mean, these are.
They're not worth going over intoo much detail, although it's
important for you to know whatyour obligations are.
So that's what.
Section four is the broker'sobligations.
Okay, you're going to use yourknowledge and skill.
You're going to discussproperty requirements.
You're going to assist innegotiating all the usual things

(01:51:00):
, okay.
Other consumers so consumerunderstands that broker may work
with other prospectiveconsumers who want to acquire
the same property as consumers.
So there you could have morethan one buyer that wants to
look at the same property orwants to buy the same property.
This is a disclosure that letsthem know.
You know that that's in play,ok, and the fair housing broker

(01:51:22):
Obviously, we all know what thatis.
And the service providers.
This is important.
Okay, you want to be careful inthis business.
I recently had a case where anagent that I've known for a very
long time she's very good atwhat she does.
She sold a house to some verywealthy people and prior to the
closing they were already askingher for a referral for a

(01:51:45):
general contractor because theywanted to make some renovations.
To the closing, they werealready asking her for a
referral for a generalcontractor because they wanted
to make some renovations to theproperty.
It just so happens that she wasdoing some renovations to her
house at the time and at thattime she was happy with the
contractor and she referred thecontractor to these buyers who
eventually closed on that houseand eventually did business with
the contractor and the guyfleeced them out of like two

(01:52:07):
million bucks.
Ok, and then, to make mattersworse in that process, ok, after
the referral, but before thecontractor screwed the you know
her customers.
The guy said you know, hey, ifyou refer me business, I will
give you money, like, I willgive you a cut of like what I
made.

(01:52:27):
And while that in and of itselfis not illegal or a violation of
any of the licensing statutesor rules, had it happened before
, had that arrangement been inplace before.
In other words, you know youmeet, you're an agent out there
and you meet with a GC or a homeinspector or any number of the
service providers that we areexposed to in this business, and

(01:52:50):
you have this referral fee typearrangement.
You are then obligated todisclose that there is such an
arrangement to any buyer orseller to whom you are going to
refer that service provider, ok.
Failure to do so can get youinto a lot of trouble, both with
the licensing statute and incivil court.
So long story short, of course,these people they lawyered up.

(01:53:14):
These people were very wealthyand they were very upset that
they'd lost over two millionbucks to this guy.
And here's where it gets worse.
That guy wasn't even licensed.
The guy wasn't even a licensedcontractor.
And so imagine, you know you'rereferring a guy that is not a
licensed contractor.
So word of advice on thissection even though this

(01:53:35):
document, this section 4D,provides some cover for you,
broker does not warrant orguarantee products or services
provided by any third party whombroker, at consumer's request,
refers or recommends to consumerin connection with property
acquisition.
You should still, to hit on thepoint that Jesus was talking

(01:53:56):
about earlier reputation,goodwill, the integrity of the
business.
You need to make sure that youdo a little bit of homework on
the people you're going to refer.
The state of Florida literallyhas a website on which you can
check any license under the sun,except driver licenses, okay so
alcohol licenses, you know.
Liquor licenses, um.

(01:54:16):
Firearm permits, um.
Real estate licenses, you knowbarber licenses.
All these things are availableonline.
You go to myfloridalicensecomand you can search you know for,
by the type of license, by thename of the licensee, by the
name of the establishment, etcetera.
So so, just as a cautionarytale, don't be referring anybody
that you haven't done yourhomework on because you know

(01:54:38):
it's it's a bad scene whenthings go bad.

Speaker 2 (01:54:40):
So really quickly, they, they, they hit, they hit
us on one, yanni hit us on onethat absolutely I know that
there's a lot of questions onwhich is and you said it already
being general, but location.
So back from section three whenit talks about we talked about
property type, but location, Ihave agents that are all the
time I'm just going to putFlorida in there and I say, well
, the world, yeah, you know theUnited States of America kind of

(01:55:02):
thing, this you know the MilkyWay galaxy, you know, and I
don't know what your position onthis, richard, but my thinking
is, if you can't do businessthere, you don't have access to
the MLS, you don't have specificarea knowledge.
One is broad, one is broad, toobroad.
Yeah, I think that's the thing.
And then really quickly forMelanie no, melanie, this does
not apply to commercial.
The settlement has nothing todo with commercial or rents.

(01:55:25):
Right now they're saying orrents.
That's correct, although theyare going to pull the rental
commissions out of the MLS.
I was informed.
Somebody said that in here.
So if that's accurate, thenthose are coming out of the MLS,
which I wouldn't be surprised.
But yeah, maybe if you want tospeak about location a little
bit, yeah.

Speaker 4 (01:55:39):
So look, obviously there is such a thing as
overdoing it.
You know, Florida might be alittle broad.
You're licensed in.
Florida the world absolutely toobroad because you're not light.
So I would say you can't bebroader than where you're
entitled to practice OK.
So is Florida too broad?
I mean technically, not becauseyour license works anywhere in

(01:56:00):
the state of Florida, is it?
Is it practically too broad?
It might be in the state ofFlorida.
Is it practically too broad?
It might be.
But again, I didn't mean tooverstate the importance or the
danger of not being sufficientlybroad.
It's not really going to be theend of the world.
I don't anticipate too manybuyers, especially during the

(01:56:23):
pendency of the agreement, maybeafter the agreement ends and
you're questionable in terms ofthe protection period and you're
questionable whether or not youwere the procuring cause for
that property.
But as a general premise, youjust want to make sure that
you're casting a wide enough netto give you some leeway.
People change their minds allthe time.
When they come to sign up withyou they may think they want to

(01:56:44):
live in Coral Gables come hellor high water, and then you show
them 10 houses and they can'tafford any of them.
And then you know the wife orthe mother-in-law finds a house
in Kendall, for example.

Speaker 1 (01:56:53):
There's more bang for the buck and what's that
neighborhood right across fromCoral Gables?
Uh, uh uh.
Shenley park, shenley park.

Speaker 4 (01:57:01):
You find something outside of that area.
Again, you just want to.
You just want to be covered.
Ok, so you know, is Florida toobroad?
Technically?
Not, because you're licensed inall of Florida.
Practically it might be Allright, so section five if we can
get that slide.

Speaker 2 (01:57:17):
You got it, I have.
I have a question here,actually from what is a pretty
good one, sure, how am I reallygoing to know if a buyer who has
signed a buyer brokerage hasghosted me and bought with
another agent?
I am not going to know really,and my position is that's what
the tax roll is.
You can go search the tax rollby their name and see if they
close on the house.
That would be the way, thatonly way that I know of the

(01:57:37):
check.

Speaker 4 (01:57:38):
Yeah Well, I mean, here's the thing.
This is true of the of thebusiness right now.
Right, right, I mean right.
In fact, with a buyer brokeragreement, I mean your chances
are better, you're slightly moreprotected because now there's
at least a contractualobligation.
Otherwise, I mean, you couldget a phone call from a random
buyer, show them 10 propertiesand never hear from them again
and you're not going to know.

(01:57:58):
So you know that's an issue wealready have and at least with
the buyer broker agreement youhave something.
And then when you show certainproperties you can look, you
have access to the MLS.
So all of a sudden, if thelisting goes inactive or sale
pending or whatever it showswhen there's a contract pending,
then you can inquire, bit ofwork to protect yourself, but

(01:58:27):
nothing in the settlementaffects that.
That's the same playing fieldwe're dealing with now.
Last year, five, 10 years ago,the requirement to use this form
does not implicate that issuethat we're being asked Sure,
sure, so anyway, consumerobligations right.
So this is where it talks aboutwhat the consumer is obligated
to do.
And this goes back to Jesus'squestion about what happens with

(01:58:50):
a guy that has like seven ofthese agreements signed out
there and it's like well, theconsumer then could potentially
be in violation.
Let's say that you're thebroker that's first in time, ok.
So they signed the first buyerbrokerage agreement they sign is
with you, and then you show aproperty and then later on they
sign another buyer brokerageagreement with another broker OK

(01:59:12):
, and then that broker ends upshowing the same property OK.
Now I think that the broker, afirst in time broker, has the
superior procuring causeargument, especially if, as
Jesus said, offers weresubmitted but the buyer would
theoretically be in violation ofSection 5A, conducting all

(01:59:34):
negotiations and efforts tolocate suitable property only
through broker.
Now you may ask yourself OK, sothey're in breach of my
agreement.
What can I do?
Well, you could file a cause ofaction for breach of contract
and if you're working on a,let's say, 3% of the purchase
price and these guys are lookingat a million dollar property,
you know, then it might be worth, you know, hiring a lawyer and
kind of shaking the trees.

(01:59:54):
So again, you know, this isgoing to be a brave new world
for people and we're going tohave to kind of, you know, make
sure that people stick to theirobligations, right?
So B, providing broker andnecessary third parties with
accurate information.
C being available to meet withthe broker.
D indemnifying and holdingbroker harmless from and against

(02:00:15):
all losses, damages, costs andexpenses of any kind, including
attorney's fees, and fromliability to any person that
broker incurs because of actingon consumer's behalf.
So this is where all of asudden, let's say, a guy has two
buyer brokerage agreements.
Jesus goes out and shows anumber of properties pursuant to

(02:00:36):
his buyer broker agreement.
The other broker finds out,feels that Jesus might have
tortiously interfered with hiscustomer, files a lawsuit
against Jesus.
Under this provision, theconsumer is going to have to
indemnify Jesus.
Now you might be asking yourselfwell, what good is
indemnification from somebodywith no money?
And the answer is it's not it's,but you know what?

(02:00:58):
It puts them in the middle andthat's another pocket at the
table.
So you know again.
This is why I say I thinksomebody brought it up to
Cadillac on the chat that youknow we have to educate the
consumer on the document we wantthem to sign.
That's true, but the firstthing you got to do is educate
yourself, because I guaranteeyou that 95% of the licensees,

(02:01:20):
at least here in Miami, areunfamiliar with the form, don't
know what indemnification meansto begin with.
Why Is it in English?
Yeah, primarily.
That's one good reason.
So you know you have to be ableto explain what you're asking
people to sign.
So, yes, you got to educate theconsumer, but you got to

(02:01:40):
educate yourself first, allright, so that's basically an
overview of section five.
It's not a real big deal, orit's not the barn burner
provision of the agreement.
We're now getting into kind ofmore of the meat and potatoes of
where we're going, so retainer.
So this is something that youmay want to consider.
Ok, and again, in this formthat I'm looking at, I'm looking

(02:02:00):
at a form that says zero,because again, the mindset is I
need to just get the buyer tosign, ok, and if and if I
require five thousand bucks upfront, you know they're unlikely
to sign my agreement, and thatmight be true.
Ok, so a lot of this is going tobe about business acumen and
what you're willing to do to getbuyers to sign up with you what

(02:02:23):
you're willing to do, whatyou're not willing to do.
So section six talks about anon-refundable retainer fee of X
dollars.
You could put any amount inthere for broker services
provided for consumer and isearned and payable upon
execution of the agreement.
The retainer is in addition toany compensation earned by
broker.
Broker and consumer agree thatthe retainer is for the real

(02:02:45):
estate services described hereinand does not constitute a fee
paid for rental informationlisted as described in section
475453.
So you might want to considertaking a little bit of money up
front.
That's the objective of this.
The objective is to hedge betsagainst and, by the way, this
has always been in the buyerbroker agreement.

Speaker 1 (02:03:06):
So well, here's another thing.
The guys, by the way and again,I'm not a fan of this, I'm not
defending this, this, this wholesituation at all, but let's not
forget the facts this buyerbroker agreement has been around
since we've been.
I mean, it's never not beenthere in my 25 year career Now,
I said frankly, the thing thatsurprises me is the change that

(02:03:26):
they made.

Speaker 2 (02:03:27):
That used to be.
That used to be that you couldtake and credit the retainer on
the backend against whatever thecompensation was.
Now it's straight up.
In addition to there used to bea box to check whether it was
going to be credited or notagainst the earned compensation.
That's no longer there, butit's always been there.

Speaker 1 (02:03:44):
Now, the fact of the matter is that my personal
opinion with my realtors, okay,and I got what?
500 realtors.
I would tell them that, untilrecently, that this agreement is
a cancer to the business.
Right, it's an absolute-.
The agreement, or therequirement of the agreement.
Well, the agreement meaningthat, the use of the agreement,
right.
So basically saying, hey, marryme before we date, right, I

(02:04:08):
hated that about it, right, soyou know, I say I would tell him
.

Speaker 4 (02:04:15):
You're going to to a car dealership and say, hey,
before I commit to buying thiscar, I'd like to drive it around
for a month, right.
Same thing with the cell phoneLike it doesn't.
It just doesn't work that way.
Same thing with hiring a lawyerLike you go, yeah, Think about
what you're talking about.
Yeah, you're going to getmarried before like dating,

(02:04:36):
right.
So it's like you can't go to,you can't walk into Porsche.
I know Guys, let me take a carhome for a couple weeks to make
sure I like it.

Speaker 1 (02:04:43):
Well, the attorney I know Richard.
I know Richard, but I know mybusiness and I know my business
in my city.
Okay, and you and I havediscussed this a million times
and again, guys, I'm going to beall right, my company will
thrive through this right.
But going back to worryingabout the business, I the the

(02:05:07):
crap that we have in thisbusiness.
I know the fucking part timersthat we have.
That don't answer the fuckingphone and they don't do what
they're going to say.
They're not going to be able toget anybody to sign I don't know
man, there and again, we're thenumber one, the fraud capital
of the united states.
So, yeah, I do think they'regoing to get it signed.
And now we're going to have ahuge clusterfuck, okay, of, uh,
of buyer broker agreement signed, procuring cause issues.

(02:05:29):
You know, people not clientsnot being taken care of and
getting frustrated with it.
So that's why you know, it's,it's, it's.
I find I, I don't mind thecommission thing, I don't mind
all the other advertising thing,I get, I kind of get where
they're coming with this.
I don't know where.
Who came up with this part.
Is it?
Is it because the settlementthat they, the, the, the NAR, uh
, kind of give into this thatthey want this?

Speaker 4 (02:05:52):
or Wait, wait, wait, it came up.
Well, when you say this, whatare you talking?

Speaker 1 (02:05:54):
about this having to have every buyer sign a buyer
broker agreement.

Speaker 4 (02:05:58):
Well, because it's the only way to to come to
ensure that the buyer's brokerwill be able to collect to
demonstrate entitlement, beforethe payment for working for the
buyer was coming from the sellerright.

Speaker 1 (02:06:12):
But the, the, but it still.
It still is, I think, theobligating them if well, if I,
if I don't use it, I don't useit, right, I could, I'm allowed
to risk it the the actualobligating that everybody to
show one property has to do it.
So let's say I'm a broker,right, and I feel confident
enough that I don't have to.
I feel confident enough thatwhen I submit an offer, the
offer is going to specify thatI'm going to make X amount of

(02:06:34):
dollars.
Why do I need to get one ofthese signed right from the
get-go, right from showing themthe first property?
That's where it becomesproblematic, not the fact that
at some point it's going to haveto be spelled out clearly, but
that point should be when wesubmit an offer right.

Speaker 4 (02:06:48):
Well, the reason why the settlement requires that the
agreement be signed beforeshowing a property is because
this is the only way to ensurethat you're not going out there
and showing properties where youknow the seller is going to
compensate the buyer's broker.
That's the objective.

(02:07:10):
The objective is to avoid yourbeing able to go out there and
only show properties where youknow that the seller is in
agreement with their brokercompensating you.
I mean, that's the whole heartof the lawsuit.
So if they don't, if they don't.

Speaker 1 (02:07:24):
If they don't force you.

Speaker 4 (02:07:25):
if they don't force you to have an agreement in
place beforehand, then you willstifle competition in other ways
, Like you will literally onlyshow properties where sellers
are willing to compensate thebuyer's broker.

Speaker 1 (02:07:37):
Or you will.
You will say that I'm going tocharge 3% and when you show a
property, that's 2%.
Okay, now you're going to haveto get 1% from the buyer, right.
So you're still going to getyour right.
Now, the average commissionsand I've asked around the
average commission paid on thebuyer side right now, about 80%
of them are 2% commission right.
That's what people are, that'sin my world.

(02:07:59):
Okay, miami blue collar, callit price ranges.
You know people are going tostart putting 3%, so the
consumer is going to have to paymore.
Now, I mean that's it's goingto become customary for them to
ask yeah, I mean frankly.

Speaker 4 (02:08:14):
I just I disagree because I think that what I fear
for my business being that inMiami Dade County and when I say
my business I don't mean my, mylegal practice, I mean the
title is that in Miami-Dade andBroward counties the custom is
that the buyer pays for thetitle insurance premium.

(02:08:35):
But in what you described asthe blue collar market, most
buyers of real property, that is, let's say, $600,000 and below,
those people don't know thatthey have a need for a title
company.
They don't know title companies, they don't have lawyers.
Okay.
So the source of business whosends my title company?
Business Agents that representbuyers, agents that don't speak

(02:08:59):
English, okay, that don't havecommand of the language, that
aren't the best agents in theworld, okay.
And why do they represent buyers?
Because those agents don't havecommand of the language.
That aren't the best agents inthe world, okay.
And why do they representbuyers?
Because those agents don't getlistings, okay.
So in our town, as you know,the sexy agents they represent
sellers.
They have listings.
And why do they have listings?
Because they're able to conveytheir value.

(02:09:20):
And so people that are sellinghigh-end properties they hire
you know, audrey Ross, rileySmith Group, the Jills these
people and these people.
They have these listingagreements.

Speaker 1 (02:09:31):
We have lunch with Audrey next week.
She's good.
She's good people.

Speaker 4 (02:09:34):
And.
But what ends up happening isthat in the blue collar world I
don't see too many guys that youknow that are.
You know, firefighters, firstresponders.
You know people teachers,people on like fixed incomes
first responders, teachers,people on fixed incomes the
middle class to lower middleclass these people are not going
to commit to paying a buyer'sbroker 3%.
They're just not going to dothat In my view, that's the real

(02:09:58):
danger for the consumer thatthey're going to end up going a
cappella, as we say into intothese deals and they're going to
get trampled.
So I've already spoken to manybrokers let's call them white
glove brokerage house typeplaces and they're not having

(02:10:19):
too much difficulty gettingbuyers to sign the agreements
because these are sophisticatedbuyers that quite frankly, they
don't want to be doing the workthemselves.
But it's like how manymillionaires have you ever seen
do a for sale by owner?
Okay.
Like there aren't too many forsale by owners in Cocoa Plum,
okay.
And that's because the moresophisticated you are, the more
you understand the value ofprofessionals.
It's people who quite frankly,feel like they can't afford to
pay the commission or thatthey're getting jacked right,

(02:10:42):
they're getting taken by theserealtors.
Just today I was at the gym thismorning.
There was a guy who happened tobe training at the same time
and he was talking about how hethinks realtors are a complete
waste of time and money.
He's like I bought my housewith my wife last year and I had
an agent representing us andthat person didn't do anything

(02:11:03):
the exact point you were talkingabout.
Number one they showed ushouses for like the first two
days, and then we were sendingthem the houses and we were on
Zillow and we were doing thisand we were doing that.
And I mean I don't understand.
And it's like, and I'm tellingthem, and imagine that nowadays
you're going to have to pay,you're going to have to commit
to paying these people inadvance.
So, in my view, that's why Ithink it's been discussed that a

(02:11:26):
lot of agents are going toleave the business because
agents that can't get listings,don't know how to get listings
and then can't get buyers tosign these agreements, they're
going to leave the business.
And, by the way, and I thinkthat there's two things you
could be like I forgot what itwas that we, we, what scenario
we were dealing with?
we were talking about explainingcontracts to people that were

(02:11:49):
like, not sophisticated and youwere like, yeah, maybe our
people weren't doing a great jobof explaining it, but we could
have a harvard professorexplaining it and they were
never going to understand, right, and that's that's.
Where was that?
I forgot where I was, raul,think in the project.
So you know that's the samething we're going to see here.
People are just not, they'rejust not going to sign these

(02:12:11):
agreements.
They're going to say, forget it.
Number one I can't afford it.
I can't afford to pay 3%.
And number two you know, Idon't think you do much anyway.
Okay, and this is where, again,the art of being able to
explain your value, your worth,and to be able to explain.

Speaker 1 (02:12:26):
There's one very good thing about it it's going to
really weed out theunprofessional part timers.

Speaker 4 (02:12:31):
And, by the way, that's when.
That's why, again, havingknowledge of the form is going
to be important, because in thecompensation section it makes it
very clear that if the buyeragrees to pay 2%, but the seller
on a house that we end upshowing agrees to pay the 2%,
then the buyer doesn't payanything.
So you have to be able toconvey to the buyer that the
only time they're going to payyou is if they buy a house where

(02:12:54):
the seller isn't willing to payanything.
Okay, and then you're going tohave to explain how you can get
those concessions somewhere else.

Speaker 3 (02:13:02):
A lot of these banks are starting to allow for
additional credits.

Speaker 1 (02:13:07):
Yeah.
So, fannie Mae, I read, and I'mgoing to destroy it verbatim,
so I'm just going to give youthe summary.
But Fannie Mae already sent outa notice that they're going to
allow.
They're basically going toseparate the compensation, okay,
from compensation.
So basically you could go ahead.
If the loan only allows for 3%seller contribution, right,

(02:13:30):
they're going to allow foranother.
You know, let's call it Xpercent, right and not really
call it contribution.
So in addition to so it's notgoing to fit into that for
commission.
So those are the adjustmentsthat are going to be made right,
that for commission.
So those are the adjustmentsthat are going to be made right.
You know I've also said thatwe're kind of lucky as an
industry that we're going into asofter.

(02:13:52):
This is landing.
This August 17th is landing ona softer market where properties
now, at least here in Miami,are taking 90 days 120 days,
that's the average to to sell.
So it's not the fly off theshelf market anymore.
If that were the case, thetemplate would be set in this
market where you don't really Imean listen, in a hot market

(02:14:12):
here in miami you could put asign outside your house with the
wrong number, and I'm not evenexaggerating, and you're still
going to sell the house, right?
So, um, nowadays, yes, you'regoing to have to see certain
properties, you're going to haveto have somebody take you to
the lender and get you qualifiedthe whole situation.
So we're landing as an industry.
We're landing, if we're luckyon anything in this.
We're landing at the right timefor this, where our services
are needed.

Speaker 4 (02:14:33):
And, by the way, I would, just as a general premise
, I would strongly recommendthat if you're a broker and you
own your brokerage, you shouldprobably hire counsel to draft
one or a variety of buyerbrokerage agreements for you, so
that you're not tied to thisform which, like I said, is, in
my opinion, less thanspectacular.

Speaker 1 (02:14:54):
Richard, can you draft me a couple of these?

Speaker 4 (02:15:00):
Yeah, thanks, man.
And what I mean by that is thatyou may want to make one
non-exclusive OK, to solve thisproblem.
You know so that, so that thebuyer isn't married to you, ok,
so you might have a buyer thatsays yeah, I don't want to marry
you on day one, and you mightsay you know what, no problem,
here's a non-exclusive one youcan work with me, I cover my ass
.
You're good, right, you're good,I'm good and you know, and so

(02:15:22):
again, you want warranties andrepresentations in there.
You want to be able to dodifferent things.
So what we're talking about isthis form, because that's what,
that's what is promulgated,that's what everybody has access
to.

Speaker 2 (02:15:33):
And I want to, just because there is lots of
conversations going on while youguys are talking, but one of
the big ones here is a commentthat you know they don't have to
sign a buyer brokerageagreement, they just have to
sign something, and that there'sthe pre-touring agreement out
there and all Guys, I'm hearinga lot from legal counsel and

(02:15:57):
Miami Realtors in particularthat they do not feel that those
forms that were made availableare going to stand.
They are not consistent withwhat the settlement agreement
stipulates and there's probablygoing to be guidance coming out
from many of the local realestate associations if florida
realtors continues to have thatdocument out there giving
guidance not to use it becauseit does not comply with what was

(02:16:18):
agreed to in the settlementagreement.
So just just be aware of that.
That's the rumblings that I'mhearing in the backside.
You hear it here first, right,guys?
I just want to tell you.

Speaker 1 (02:16:26):
Whatever we're doing today, guys, is in 90 days is
going to look drasticallydifferent.

Speaker 4 (02:16:31):
Let me just add something by the way everyone,
you could feel free to wipe yourass with the settlement, okay,
so so, just so you know, the NARsettlement only covers members
of NAR, ok, so if you are not amember of the National

(02:16:54):
Association of Realtors, you arenot quote protected by the
settlement.
And what I mean by protected isthat you could continue doing
business, business as usual.
Ok, god bless you.
And if you're big enough andyou may end up getting sued, and
if you're big enough and youmay end up getting sued, ok, and
then you'll be sued for thesame exact thing that was
adjudicated or that was resolvedin the NAR.
It was not adjudicated, it wassettled in the NAR litigation,

(02:17:16):
ok, and in the severallitigations.
So again, you know, listen, youcan, you can continue to do
whatever you want.
The question is how long beforesomebody you know, before you
get stung for doing that, okay.
So again, it's it's likeanything else and I tell people
all the time.
I'm in the business of givingadvice, I, I give advice in
exchange for money.
I can't tell you how often myadvice is ignored, advice that

(02:17:38):
people paid for it.
Now, listen, by the way.
I kind of like that, because ifyou follow my advice the first
time I give it to you, I'llstarve.
Okay it's.
You know, it's preciselybecause people don't take advice
, and not just from theirlawyers, like from their doctors
.
How many of us have gone to thedoctor and the doctor's like
hey, man, you really got to lose40 pounds and, by the way, you
can't drink so much and yourcholesterol is a little high,

(02:18:01):
you know you probably.
And a beer.
Okay, because humans are notreal good with advice or
lifestyle changes.
Okay, so again you can continueto operate like like you were
operating before.
You just run the risk.

Speaker 1 (02:18:14):
Who's going to?
Who's going?

Speaker 4 (02:18:15):
to police this whole?
There is no police, that's thewhole thing.

Speaker 1 (02:18:21):
There is no police, but there is no police there is
no there, there is no police,there is no realtor.
There's not going to besomebody knocking on my door
checking if I have all thesebuyer-broker agreements, do I
need to store them for fiveyears, like all the other ones?
And this, and that no one isgoing to come out and speak for
copies of your buyer-brokerageagreement.

Speaker 4 (02:18:43):
What's going to happen is that's him man no, no.
Do you know this?
For a fact, yeah, it's the samething.
Listen, take it right now withthe Conveyances to Foreign
Entities Act in Florida.
Oh, yeah, okay.

Speaker 1 (02:18:54):
Right now there is that's the governor saying.

Speaker 4 (02:18:56):
There is a requirement that every purchaser
of real property has to sign anaffidavit, and that affidavit
at the closing has to it has.
It's very simple and theFlorida Real Estate Commission
drafted it, so I happen to befamiliar with it.
And it basically says no, no,it was a team effort, Okay, so

(02:19:17):
so it says.
It says either I.
I, I am an American citizen andtherefore I am not covered by
the Conveyances to ForeignEntities Act.
Okay, or I'm not.
I'm not prohibited frompurchasing because I'm a US
citizen or I'm not a US citizen.
But here's why my purchase doesnot violate the statute.

(02:19:39):
Okay, and every singlepurchaser of real property in
Florida has to sign it.
Okay, including, including ourfriend Mike Gow, which is the
document that requirednotarization, remember?
Ok, so what now?
What?
Unlike, unlike the FinCEN, thefederal government's forms,
where you have to submittransactions that close by LLCs

(02:20:03):
or buyers and they're more thana million bucks it's at these
geographic targeting orders thatyou must submit those to the
IRS.
There is no obligation tosubmit these affidavits that the
buyers are signing anywhere.
There is no obligation tosubmit them.
No one is collecting.

Speaker 1 (02:20:19):
By the way, what's the name of that moron that says
we weren't in meat and potatoessoon enough?
What's the guy's name?
Yeah, is this meat and potatoes, enough, buddy so look, I mean
so so, for example.

Speaker 4 (02:20:30):
So going back to this form, yeah, no one wants.
No one is going to knock on yourdoor to find out if you have
these things.
What's what's going to happenis sellers just like what
happened in the NAR litigationsellers who've talked to their
buyers for some reason and findout that there is no buyer

(02:20:52):
brokerage agreement and that theexpectation is that they
compensate you.
And if they end up compensatingyou, those people are going to
have a cause of action.
And then there are theselawyers out there that they're
going to hear it.
Okay, because it's going to getout there.
Ex-broker doesn't do this.
Ex-broker doesn't use a buyerbroker agreement.
He doesn't care.

Speaker 1 (02:21:09):
But what about use the buyer broker?
You know what?
I'll ask you stuff later.

Speaker 4 (02:21:12):
Yeah, yeah, yeah, let's not don't ask me about how
you're going to shirk thesettlement, like while we're
transmitting live.

Speaker 1 (02:21:19):
So you see what I'm saying there is one more, that
that's Just think this isbullshit and it's not good for
the business.
So I mean it's not good for theForget the business, it's just
not good for the consumer.

Speaker 2 (02:21:30):
Your objection is noted.

Speaker 4 (02:21:32):
It's just not.
It's just not.

Speaker 1 (02:21:34):
It's not still the consumer, it's just not.

Speaker 2 (02:21:37):
The one that I want to touch on and because I and
there's been quite a few on thisis agency status, that somehow
signing a buyer brokerageagreement transitions you into
single agency or precludes youfrom transaction brokerage.
And there are three differentversions of that form, I believe
a no brokerage, a transactionbroker and a single agency.
It doesn't affect your agencystatus.

(02:21:57):
You can still represent.
If I'm a listing agent and thebuyer comes to me, I have to.
If I'm not a transaction brokerwith the seller, I have to
either get a no brokerage buyerbrokerage agreement and sign
with the buyer, or I have totransition to transaction
brokerage with my seller, whichis just a pain in the butt.
If you're a transaction brokerwith the seller, you can then

(02:22:19):
take and sign a transactionbroker agreement.
As a buyer brokerage agreement,it is literally you providing
the services that you alwayshave.
Nothing has changed.
It is a gigantic nothing burgeras far as changing how we do
what we do, except that there'sthis form now that kind of
codifies it and actually, nicelyenough, has the buyer
responsible to do a few things.

Speaker 4 (02:22:40):
Okay, and so, like I said, moving on, remember the
important part of thecompensation section of the
agreement is to be able toconvey to your consumer that
they only pay you to the extentthat the seller does not pay you
.
Ok, and you cannot make moremoney than the buyer agreed to

(02:23:00):
pay you unless and we'll get tothat, unless it's in the last
section of the agreement agreedto pay you, unless and we'll get
to that unless it's in the lastsection of the agreement.
But as a general premise, ifthe buyer agrees to pay you 2%
and you end up showing a houseand that house, the seller, for
whatever reason, is willing topay 3% of commission to buyer's
broker, you're stuck with the 2%.
You cannot take the extrapercentage.
All right, that's important,right?

(02:23:22):
So now let's talk about theprotection period.
But three percent, what?
What people also get concernedabout?
So the protection period thisis what protects you from
getting screwed out of acommission If a buyer buys a
house that you showed them afterthe expiration of the buyer
brokerage agreement.
Okay, so you have a buyerbrokerage agreement.

(02:23:43):
It's going to last two monthson day 71.
The consumer it gets into acontract to purchase a house you
showed them and it closes, youwill be covered.
Okay, because the protectionperiod clearly states consumer
will compensate broker if withinblank Now here blank line, just
like on the, as is just like onall the contracts, there is a

(02:24:06):
default.
If you do not fill anything intothis line, the default is 30
days, okay.
So if left blank 30 days aftertermination date, consumer
contracts to acquire anyproperty which was called to
consumer's attention by brokeror any other person or found by
consumer during the term of thisagreement.

(02:24:26):
Ok, so it's a housekeeping theyfound on their own.
So consumer's obligation to paybrokers fee ceases upon
consumer entering into a goodfaith exclusive buyer brokerage
agreement with another brokerafter the termination date.
Ok, so what does that mean?
So you left it blank.
Your buyer broker agreement wastermination date, okay.
So what does that mean?
So you left it blank?

(02:24:46):
Your term, your buyer brokeragreement was for 60 days.
If on day 61, day 61, theysigned a new buyer broker
agreement, you you might bescrewed.
Okay, if they do not, you'recovered by the protection period
that you defined here, whetherit's 30 days, 45 days, 90 days,

(02:25:07):
whatever it is.

Speaker 2 (02:25:08):
So specifically designed to keep them from going
to the seller waiting for it toexpire, then going directly to
the seller with the propertythat you showed them and saying
hey look, I just got rid of myagent.
Now we can take and work it.
That's what it exists to do.

Speaker 4 (02:25:21):
And sellers are less incentivized to do this nowadays
as well, because before theywere paying, I think them paying
is not going anywhere.

Speaker 2 (02:25:29):
Co-brokerage is just such an important part of making
the home affordable.
The buyer is never going towrite that check, and the reason
why is because the net on thatproperty isn't going to change.

Speaker 1 (02:25:38):
This system that is currently working before this
August 17th thing.
It wasn't made up, it startedevolving and the reason why it
started happening the way ithappened.
So when I started in thebusiness in 99, every single
sale for about two years when Istarted in the business it was
every sale was FHA Right, Iremember, because everything was

(02:26:00):
FHA limits, pretty much Rightand everything was 6% seller
contribution, everything Like Ididn't do on one of those deals,
a deal that was something elsefor years.
Buyers always need help, that'sjust it.
The reason why the seller paysis the same reason why real
estate is awesome is becausethere's equity built into it.

(02:26:21):
So they have the money in there.

Speaker 2 (02:26:24):
Built in it's to allow the buyer to finance their
cost of representation into thepurchase price of the deal.
It is the reason why and theanalogy that I give is like you
go to the furniture store, right, they don't make you pay cash,
they give you the ability tofinance, because if you can
finance, you'll buy more crap.
The buyer can pay more for thehouse if that seller allows them
the ability to finance it intothe purchase price.

Speaker 4 (02:26:44):
And the crazy thing is this I know, but you realize
that this argument lost right,like we're screwed, like it
doesn't, no, but I mean, you'restill allowed to have, I get it,
but I mean, but it's so muchharder.

Speaker 2 (02:26:55):
No, but here's the thing Rich, why does?

Speaker 1 (02:26:57):
100% financing exist.
Why does FHA exist?
You need first time home buyersin this, this world.
You just need that are in this.
Are not our society collapses?
I'm just saying you'repreaching to the choir but I'm
not even preaching.
But remember I'm not talking toyou, dude, I'm talking to 300
people online.
You know what I'm saying.
I know it looks like I'mlooking at you, but I'm trying

(02:27:17):
to.

Speaker 4 (02:27:18):
No, no you are, I'm gonna look at them.
I mean, from now on, I'm gonnasay well, I'm looking at,
looking at them.
I'm just saying that.

Speaker 1 (02:27:24):
It's fucking stupid.
I'm not going to.
This is a money grab.
Ok, it's a money grab by theattorneys and I know you don't
like when I say that, but it's amoney grab.

Speaker 4 (02:27:32):
It's fair.

Speaker 1 (02:27:35):
They said that we're the ones fixing the fee, fixing
the rate, and we charge only 6%and they're charging them 40%.
These only 6%, and they'recharging them 40%.
These poor sellers that wereaffected so much, they're
getting 40% of it.
So it is what it is.
We got our ass kicked.
Hey man, I'm not a sore loser.
We lost.
Now we got to figure it out.

Speaker 2 (02:27:55):
I wish I had a way to fix it.
But if I'm on the listing sideand I'm coming to your house,
rich, to take the listing, I'mgoing to say to you look Rich,
if you don't offer, if you don'tmake this available, the number
of buyers who can afford to notonly pay the down payment,
whatever it's going to be the$90,000, now it's another
$25,000 in cash the number ofpeople that have $90,000 is
already a small group.

(02:28:15):
Now the amount of people thathave $115,000 laying around that
they can do this is an evensmaller group.
If you do this, understand, ifyou don't offer it, the
currently appraised value of thehomes that are out there has
assumed that to be the case.
They were all offeringco-brokerage.
If you don't offer that buyercontribution, that seller's
contribution to buyer's closingcosts, they're going to actually

(02:28:36):
mark the value of your housedown, because everybody else did
.
Because if your house is a$500,000 house and all the other
houses that are $500,000 housesall offered a $10,000 buyer
compensation for a mortgage,mortgage, prepaid, whatever,
your house is not more valuablethan theirs.
So if they offer $10,000 eachand they're appraised at

(02:28:57):
$500,000 and you're not offeringthe $10,000, is your house
$10,000 more valuable thantheirs?
It's not.
The appraiser always calls usand asks us was there any
seller's contribution?
The reason why is, when they doit, when they're doing their
valuation, they subtract thatfrom the value of the house to
the comp.

Speaker 1 (02:29:16):
Does that make sense?
Yeah, yeah, guys, we've got tohaul ass a little bit.

Speaker 2 (02:29:19):
We've got to go.

Speaker 1 (02:29:21):
Let's go on to the question and answer, but hold on
.
Well, let's go on to thequestion and answer, but hold on
.

Speaker 4 (02:29:24):
Well, let me just.
Let me just get through.
Conditional termination isdispute resolution is hopefully
you're never going to use it, ok.
So the conditional terminationprovision is important.
It protects the broker.
Ok, it says at consumer'srequest, the broker may agree to
conditionally terminate theagreement.

(02:29:45):
In other words, guy's not happy, consumer's not happy says hey,
I want to get out of theagreement, you can agree.
And if you agree to thisconditional termination, the
consumer must enter into awritten agreement to this effect
.
In other words, a terminationof the buyer broker agreement
and pay a cancellation fee of Xdollars.
My recommendation is if youthink you are a valuable agent,
you provide a good service andyou speak the language and

(02:30:06):
things like that you knowminimally important things you
might want to put something inhere, okay.
You might want to put a fee inhere to cancel, all right.
So you want to get rid of meafter I've done a bunch of work
for you, no problem.
But you're going to pay me,okay, because I don't work for
free, because I don't work forfree.
So then it says broker may voidthe conditional termination and

(02:30:28):
consumer will pay the feestated in the compensation
section, which is up in sectionseven, less the cancellation fee
If, from the early terminationdate to the termination date,
plus the protection period ifapplicable, consumer contracts
to acquire any property which,prior to the early termination
date, was found by consumer orcalled to consumer's attention

(02:30:48):
by broker.
So what does that mean?
This is so that they don't trickyou into canceling and then
turn around and buy a house thatyou showed them.
Okay, so long story short, ifyou agree to a conditional
termination, you sign thetermination of buyer brokerage
agreement, you collect yourlittle fee 500 bucks, a thousand
bucks, whatever the number isand then you find out that the

(02:31:09):
buyer got into contract topurchase something that you had
shown them or that they foundthemselves during the pendency
of the agreement, prior to theearly termination date.
Then you can void thattermination and you can insist
on being paid your fee.
This goes back to the younglady's question.
Whoever it was, it was like howdo I know if they just like
listen, you didn't know before,but you got to keep an eye on it

(02:31:31):
.
So, houses that you, that youtruly show, properties that you
bring to the consumer'sattention, or houses that the
consumer brings to yourattention that you then end up
showing, you need to keep a listof those so that if and when
you agree to these conditionalterminations, you can then be
checking on that.

Speaker 1 (02:31:47):
Whoever asked that question?
My love, it's not practical.
You're not going to be able tocheck every single house that
you showed for every damn buyer.
That's true.
You got it.

Speaker 4 (02:31:55):
You got, you're going to have to know which ones they
really like.

Speaker 1 (02:31:59):
But if you're working enough people I mean you're
talking, that's a part-time jobchecking every damn property for
the, for the team yeah.
So listen, um, I gotta, I gotta.
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(02:32:19):
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(02:32:44):
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Again, it's to have hisknowledge there.
No, he's not going to be yourattorney If you send work there.

(02:33:07):
That doesn't mean that, but itdoes mean that you could.
You know, if things get tough,you do have somebody who
actually knows the business.
Is this camera I'm supposed tobe looking at?
So yeah, coral Gables title.
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(02:33:35):
And my commercial is I'm lookingup to hire, you know, actually,
guys like you guys thatactually spend, you know, three
hours, four hours, you know,trying to learn the business.
I want people that care aboutthe business.
I'm done with these part-timersthat don't care.
This industry is changing, sowhat I'm looking for is brokers
that actually care and want toget better and want to make
money and want to make theadjustments.
So where would they hit me up?

(02:33:56):
Kevin, I guess, or what?
At Real Estate Empire GroupInstagram and yeah, and also,
and we also have a podcasttogether um, us, us three, we
talk about stuff like this.
So it's at real talk, at retalk, at re talk podcast, all

(02:34:16):
right, so, um and um.
So yeah, give me a call.
All right, last thing we got,we got to cover the question and
answers.

Speaker 2 (02:34:22):
Well, I richard is vast majority of questions.
Richard is is the rock star.
I mean I listen to him morethan anything.
But uh, they are as a requestand it is the last little bit,
section 14, the bottom.
Yeah, I want to definitely takeand cover that, um, because we
actually already have a requestso so what they've done.

Speaker 4 (02:34:42):
If you you recall, we talked earlier about how, if
your buyer, the consumer,commits to pay you 2%, you end
up showing a property that theconsumer buys and the seller was
willing to pay 3%.
You left that 1% on the table.
Okay, and that's the fact.
There's no getting around that,however, okay, and I don't know
why the Florida Association ofRealtors did this.

(02:35:04):
To me, it's just a Pandora'sbox.

Speaker 2 (02:35:06):
They told me it was for the developers Right, that's
really.

Speaker 4 (02:35:09):
So they have added in Section 14, and it's it's
bolded and underlined OK.
It says brokerage commissionsare not set by law and are fully
negotiable.
Broker may not receivecompensation from any source
that exceeds the amount or rateagreed with the consumer.
That's what we were justtalking about.

(02:35:29):
Then it says, however, consumeragrees that broker may receive
separate compensation from theowner of the property for
services rendered to the ownerby the broker and for which
consumer will not be responsive.
Ok, so I don't have very manycreative examples, but let's

(02:35:51):
assume that you, as the buyer'sbroker, get into an agreement
with the seller that you'regoing to mow the lawn, ok, or
you're going to help them,you're going to stage the
property for them or do thingsthat for some reason, the
listing agent is not doing, ormaybe it's a for sale by owner
type situation.
Okay, you will be able toreceive compensation from the

(02:36:12):
seller directly, over and abovethe amount that the buyer is
willing to pay you okay.
But it has to be as it says here.
For services rendered to ownerby broker, Okay, and what those
services are?
No, there is no definition.
There's no glossary or index ofterms that I could refer you to
.
That'll tell you what it is.
But again, for example, you'regoing to wash the owner's car,

(02:36:34):
no problem.
You're going to help them takedown the satellite no problem.

Speaker 1 (02:36:37):
Marketing.

Speaker 4 (02:36:38):
Mow the lawn, no problem Marketing.
But again they have a listingagent, presumably, or they might
.
It's got to be things thatlisten.
If there is no listing agentand there's no listing agreement
, because again I don't know whyyou wouldn't do that, but it's
short, it could be marketing.

Speaker 1 (02:36:56):
But just so you know.
So there's a lot of cases wherethere's even a button on the
MLS where you allow other peopleto advertise your property,
right, you click here and yousay, hey, other brokers are
allowed to advertise theirproperty.
And this happens because if I'mselling, right, I'm marketing
where I know how to market.
But there's a Colombian broker,for example, that his specialty

(02:37:16):
is, you know Colombian buyers,right, and he has a network of
Colombian buyers.
I'm going to allow him tomarket right To Colombia, to his
network.
Now, this might mean that hemight have to spend a certain
amount of dollars and might do aconvention over there.
And it happens with developersa lot too.
Right, where it's you know, yougo to Colombia and give a
presentation on the project.
So I think marketing, you know,should be a you know.

Speaker 4 (02:37:41):
Yeah, and it could be .
It could be.
I'm not saying it's not.
What I'm saying is a seller theowner of a property, is
unlikely to agree to compensatea buyer's broker for a service
that their agent should berendering to them.
So it has to be some.
It has to be a scenario whereeither the there is no listing

(02:38:03):
agent or B it's something likeyou're describing where it's
some extra service right thatthe listing agent can't provide.
Or won't Right, or won't, soyou know you are entitled to do
that.

Speaker 2 (02:38:16):
All right, so a couple of quick things.
One, alicia, on what you'resaying.
It will require a modificationof your listing agreement to
take and change the compensationthat you agreed to with your
seller to have you representboth sides that the buyer
doesn't want to take and pay you.
The other thing would be, Ithink really what was explained
to me this is designed fordevelopers.

(02:38:37):
Instead of offering theseaccelerated compensation levels
that they have, typically,developers offer extra
compensation to agents Like abonus.

Speaker 1 (02:38:46):
It will be a bonus, bonuses are their way of
screwing the broker out of outof it, because a lot of these
people are like well, I'm goingto pay you x amount of
commission and a bonus that theonly reason it's called a bonus
is because they think that youknow they, they could get away
from you know they don't have topay a split on it basically?
no, they do they absolutely well.
They do, but that's just whythey do it, because a lot of

(02:39:07):
these people have brokers comingto me all the time with that.

Speaker 2 (02:39:10):
So what developers are going to do to try to keep
their thumb on the scale withagents showing their properties
over others is going to take,and instead of offering
accelerated higher commissionsplits, they're going to offer a
commission plus a finder fee orsome other bonus type thing to
take and provide the buyer.
And that's how they're going totry to get around.
That's why that's there, that'swhy I, that's what I was told,

(02:39:31):
why that is there and, frankly,to me it lies in the face of
keeping the thumb off the scale,which is what they were I think
was part of what they weretrying to do is to keep the
agent's thumb off the scale ofsteering the buyer toward-.

Speaker 1 (02:39:44):
Now I was texting and I was not paying attention when
Richard was reading thatsection, so I apologize if this
is a super stupid, but doesn'tthat contradict with if they're
offering two right and I goahead and put two and later on
I'm able to negotiate 3%commission.
I'm not able to do it my exactwords.

Speaker 2 (02:40:04):
When I saw that that because that was the big change
in the buyer brokerage agreementwhen I called their legal
counsel, I was like what thehell is this?
Like, all the guidance I had isexactly what rich everybody
I've talked to the exact youcan't get an extra nickel above
right.
What's in?

Speaker 1 (02:40:19):
it contradicts.

Speaker 2 (02:40:19):
They just pulled the pen in the hand, grenade tossed
in the middle of the room andkind of ran away on is what it
looks like.

Speaker 1 (02:40:24):
It leaves an opening to be able to charge warren,
right, richard?
I mean, it's a shitty document.
Everybody's agreeing on it.

Speaker 2 (02:40:29):
Right leaves yes, it leaves an opening for the broker
to be able to receivecompensation over and above what
the consumer agrees to pay, andwhat which has not been
disclosed up front clearly, andand that was all part of the
settlement was that the amountof compensation the agent was
going to get had to be clearlydefined before they showed the
first property.
I mean, it was all.
So, even this document, whichis the best of the ones that I

(02:40:52):
think that we have, I think it'sa flawed document because that
line.

Speaker 4 (02:40:55):
I couldn't agree more .

Speaker 2 (02:40:58):
I'm going to leave you guys to Q&A.

Speaker 1 (02:40:59):
OK, we don't have.
How do we?
Can you guys read the questionsover there?
Okay, yeah but, let's.
Let's maybe Richard another 10minutes.
10 minutes, all right, let's doit all right, josh, no, no, no,
he's out yeah, I gotta, I gottago.

Speaker 2 (02:41:14):
Thank you, no problem , my pleasure all right, throw
me the questions.

Speaker 3 (02:41:19):
Ellen wants to know hi Ellen, what about?
Developers, offering developers, offering buyer agent
additional incentives.
We just talked.
That's exactly what we justtalked about.

Speaker 4 (02:41:29):
That's in Section 14.
The new buyer brokerageagreement contemplates that a
broker may receive acompensation over and above the
amount the consumer has agreedto pay for services rendered to
the owner and for which theconsumer is not responsible.
And that's the thing.
What those are is anybody'sguess.
Like I said, you mow the lawn,you wash cars, you're going to

(02:41:52):
help me stage it, you're goingto help with the landscaping.

Speaker 2 (02:41:55):
whatever the case may be, that's the important thing
I think I'm sorry to butt in,but it's not co-brokerage
compensation.
It's not from the other broker.
It's not from the other broker,it's directly from the owner
and that's who they'recontemplating is because the
developer sits there and, as theowner says, hey look, I want to
give you an extra X On a normallisting.
I don't have any seller sittinghere saying hey, josh, you did
such a great job, we're going tobuy her.

(02:42:16):
I want to give you an extra.

Speaker 4 (02:42:17):
X, that's right.
It's not from the seller'sbroker.
It's from the seller themselves, not from the seller's broker.

Speaker 2 (02:42:28):
It's from the seller themselves here from Susan.

Speaker 3 (02:42:31):
Susan asks the Board of Realtors consult with other
states outside of Florida to theeffectiveness of those states
and their longstanding brokeragrees.

Speaker 4 (02:42:39):
I'm not a part of Florida Realtors, so I don't
know the answer.
I assume that they communicatewith their counterparts in other
states, but so I don't know theanswer.
I assume that they communicatewith their counterparts in other
states, but I really don't know.

Speaker 2 (02:42:49):
I can tell you that as a real estate commission, we
do that.

Speaker 4 (02:42:52):
There's an annual conference called Arello.
That's a conference where realestate licensing officers, like
commissioners, basically gettogether and talk about what's
going on in different states orin their state.

Speaker 1 (02:43:07):
Yeah, I doubt it.
That's my answer to that.

Speaker 3 (02:43:11):
And then they're asking about Michael's asking.
Well, first are we open todoing this event in Spanish?

Speaker 1 (02:43:20):
Yeah, I'm opening to do it in Spanish.
He asked that question inEnglish.
Sí, google Trans English, sí,google Translate, sí, vamos a
hacerlo en español.
Lo único que perdemos a Carlasi lo hacemos en español, así
que por eso empezamos en inglés.
Pero si Richard quiere hacerloen español, lo podemos hacer en
español.

Speaker 3 (02:43:42):
For clarification, if he wants to know.
Is it a law or rule that weneed to have a broker agreement?

Speaker 4 (02:43:48):
That's a great question and, like I said, the
requirement of the buyerbrokerage agreement is not
codified.
There is no statute or law thatrequires it.
It is a function of thesettlement and the National
Association of Realtors got intothe settlement, in what they'll
tell you, to protect theirmembers.

(02:44:09):
So if you are a member of theNational Association of Realtors
, you are covered by thesettlement, but you have to
comply with it.
Okay, if you're not a member ofthe National Association of
Realtors or you just don't wantto comply with it, you don't
have to.
Might you be sued?
Yes, you might.
And so, again, everybody canfigure out if they want to roll

(02:44:32):
the dice or not.
So it's not a law.

Speaker 1 (02:44:34):
No, it's not a law.
It's a stipulation of asettlement.
That's correct.
That you are a party of, if youare part of, the National
Association of Realtors, if youare a member of the National
Association of Realtors.

Speaker 4 (02:44:44):
If you are a member of the National Association of
Realtors, you are covered by thesettlement.
If you play by the rulesCorrect, so that nothing you've
done in the past can get you introuble If you are a member of
the National Association ofRealtors and you do not abide by
the settlement you can be sued.

Speaker 1 (02:45:04):
Got it Okay.
You want to switch mics.
They want to switch mics.

Speaker 2 (02:45:05):
Oh, got it.
Okay, you want to switch mics?

Speaker 1 (02:45:06):
They want to switch mics?
Oh, got it.
Who said that?
The people yes.

Speaker 3 (02:45:13):
The people have spoken.

Speaker 1 (02:45:14):
The people have spoken, All right.

Speaker 3 (02:45:17):
So Michael Davis is asking should we modify our
existing listing agreements tocross out compensation fields in
the initial day?

Speaker 1 (02:45:24):
They already did.
The new one that came out Ithink it came out today or
yesterday, yesterday, it cameout recently, but yesterday
there was one that came outyesterday that that um that
changed, that made those changesalready.
So check, check um formsimplicity or whatever Um, and
it should be, it should bealready changed, yeah All right.

Speaker 3 (02:45:41):
So, larry, can we offer to the buyer that they may
choose for the buyer agent todecline showing any properties
that are not paying buyer'scommission?
No, you can't do that.
You can't.

Speaker 4 (02:45:50):
Yeah, yeah, yeah.

Speaker 1 (02:45:52):
Well, that that OK.

Speaker 4 (02:45:53):
But OK, so, if you, so, if you do that, if you say,
hey, I'm not working for free,right, I'm only going to show
properties that pay commission,but that's not no, because the
buyer's agreeing to pay you yourcommission, irrespective of
what the, but I know my buyerdoesn't have the money, then
that's the issue, though that'sthe issue that's precisely I

(02:46:15):
have a buyer that does not havethe money, by the way, Richard,
like fucking 98, 99% of buyers.

Speaker 1 (02:46:21):
That's why they're first-time home buyers, so they
don't have the money to buyunless they get seller
contribution or anything.
I say to them, hey, all right,you got to pay me this 3%, but
I'm going to go and bust my assto go get the 3% for you, right?
Am I breaking the rule by onlyshowing properties that pay the
commission?

Speaker 3 (02:46:45):
That's what that person is asking right, yeah,
the second question and the samequestion.
He also said the buyers wouldhave to agree to the stipulation
to avoid steering before this.

Speaker 4 (02:46:54):
So I see everything in writing.
Yeah, I mean, listen, this is aclusterfuck.
It's better to have it inwriting than it's.
My advice would be yes, get itin writing.
My advice would be Get what inwriting?
Yeah, that the buyer's okaywith only being shown properties
where the seller's payingcommission.
But again, the buyer is not theaggrieved party in that issue.
That's what's being missed here, guys.
The aggrieved party in thisit's the sellers Right that

(02:47:18):
we're taking advantage of thisentire issue is the sellers.
So now what you're doing isfurther disadvantaging sellers
that now want to availthemselves of the settlement.
So, and I'm telling you now,large brokerages, many of them,
are literally telling theirsellers to not offer any
commission period.

(02:47:38):
End of story.
That's what's being told, Likeif you're a seller and you're
being told-.

Speaker 1 (02:47:42):
They can do whatever they want right now, but they're
going to have to play the gamethat.
I think that's an enormousmistake, because you are getting
away from, from, from fromthese first time home buyers.
So they're going to I suspectthey're going to.
They're going to, they're goingto pull back it just depends on
the market, man.

Speaker 4 (02:47:56):
It just depends on the market.
If your house is the type ofhouse that a first time home
buyer buys, then listen, youprobably have a greater
incentive to offer compensationto the buyer's broker.
If your house is in fuckingCocoa Plum, okay, or you know
Westin or these high-endneighborhoods, I think you can
avoid it.

Speaker 1 (02:48:11):
Absolutely, absolutely.

Speaker 3 (02:48:13):
Next question.
All right, so Yanni wants toknow can the buyer broker
agreement be signed usingDocuSign or does it have to be
physical pen and paper?
No DocuSign.

Speaker 1 (02:48:20):
No, DocuSign is fine.
Docus sign is legal nowadays.
It that?
When was that that changed?
Like what?
Like 20?

Speaker 4 (02:48:27):
years ago or 10 years ago.
There's a statute on it.
There's a statute on it thatthat it doesn't say docu sign is
legal statute that says that ifyou agree to conduct business
with electronic signatures,they're valid correct john dow
once said john dow john.

Speaker 3 (02:48:45):
D-O-W-D, but NAR can enforce this upon its members as
a condition of membership.

Speaker 4 (02:48:54):
They can.
I'm not an expert on NARmembership rules.
I'm not a member of NAR, I'mnot a real estate licensee, I'm
a consumer member of thecommission.
So I have no idea.
Sounds right to me becauseobviously they're a private
entity and they can have theirown requirements for membership.

Speaker 1 (02:49:10):
But they're not going to police it.
At least so far that's whatthey've said.
They're not going to check andknock on every door and see if
every house you've shown has abuyer broker agreement.

Speaker 3 (02:49:21):
I agree, yeah, all right.
So Robin asks can your buyerbroker agreement say 3%, but on
line 13, write in that you willaccept less if the seller offers
less.
You understood that.
Say it again.
Can your buyer broker agreementsay 3%, but on line 13, write
in that you will accept less ifthe seller offers less.

Speaker 1 (02:49:44):
Well, I don't think you have to write it.
I mean, if they're acceptingless than no, no, no, no.

Speaker 4 (02:49:50):
The question is can you make the buyer feel better
about the fact that you're notgoing to charge them the extra
1%?
And the answer is yeah, youcould do that.
Or you could just not chargethe extra 1%, you could just
tell them that, Of course, ifthe smart buyer is going to be
like, well, write it down.

Speaker 3 (02:50:10):
The answer to that is yes.
All right, Jose asked will E&Ocover silly mistakes as this
gets figured out?

Speaker 4 (02:50:18):
That's a great question.
It's going to depend on thepolicy.

Speaker 1 (02:50:22):
I didn't even think about that.
All coverage issues depend onthe policy.

Speaker 4 (02:50:24):
Good one, jose.
I didn't even think about that.
More shit to stress out about.
All coverage issues depend onthe policies, but it's a good
question.
I really don't know the answer.
Yeah, it's so good, and wedon't have the answer.

Speaker 3 (02:50:36):
A different.
Jose asks regarding sectioneight, the protection period.
I understand, richard, that thelast line negates the
protection if the buyer signsanother buyer broker agreement
with a different broker.
Is this correct?
That is correct.
If yes, what protects theoriginal broker from a buyer
waiting for the contract tolapse and to sign a new one on
day 61 with their cousin?

Speaker 4 (02:50:59):
Nothing, especially if the cousin is going to charge
less than you are going tocharge Nothing, especially if
the cousin is going to chargeless than you were going to
charge Presumably.
You know again, unless it's acousin, someone with no interest
in making money, the onlyincentive for a buyer.

Speaker 3 (02:51:17):
to do that would be that they found a buyer broker
that's willing to work for lessmoney.
All right, michael wrote again.
He just wants someclarification about the listing
agreements that exist before.
That's just the.

Speaker 1 (02:51:25):
Yeah, I haven't even read the new one, man, to be
honest with you.
I know that there was changes.
I know that there were specificchanges on how the commission,
how the whole cold broke thingand it was.
It was just kind of specified.
It was updated to include allthis crap, but I have not read
it.
It was literally.
It was sent to me yesterday Atthe end of the day.

Speaker 3 (02:51:43):
I didn't feel like I think for new or existing
listings are just a disclosureright.

Speaker 1 (02:51:48):
There's supposed to be a disclosure that you're
supposed to sign for allexisting listings, all existing
contracts.
I don't understand how they'regoing to.
I mean, if you're already incontract, how are you going to
force somebody to sign some sortof addendum or something like
that?
So yeah, I don't know.
I don't know.

Speaker 4 (02:52:07):
Guys listen man.

Speaker 1 (02:52:08):
Whoever tells you they know everything here is
absolutely lying.
These things are changing as aswe go.
You know, so you do.
You know we're going to do ourbest and we're going to follow
as many rules as we possibly can.

Speaker 3 (02:52:19):
So let's do three more, all right, so we lloyd.
He has an example.
I represent a buyer.
Buyer has a max five hundredthousand dollar buying power.
We find a house.
The lowest offer agreed is 500,but seller refuses to pay my
commission.
So effectively I have twochoices walk away from the deal,

(02:52:42):
or my buyer loses the home orwork for free.

Speaker 4 (02:52:47):
I'm not sure that that's a question, so so so
first of all a question mark.

Speaker 3 (02:52:53):
Yes, he did.

Speaker 4 (02:52:54):
So so first of all, you're going to have a buyer
brokerage agreement in placebefore you show the property.
So the buyer is committed topaying you the commission.
He can't afford to pay thecommission.
That's a problem.
You have a cause of actionagainst the guy.
So if he closes, he owes youthe money.

(02:53:16):
So you might have to sue yourbuyer.
I mean, that's just the way itis.

Speaker 3 (02:53:27):
Yeah, michael, to answer your question, there's
going to be a disclosure.
He keeps asking about theexisting listings.

Speaker 4 (02:53:36):
Michael, can we just trouble you to use your form,
simplicity buddy, and read it.
I mean, it just came out.

Speaker 1 (02:53:41):
Yeah, what does he want us to do?
Exactly?

Speaker 3 (02:53:45):
He asked again previous listing agreement with
seller that stated compensationin a listing with seller.
His name is Michael.
Yeah, michael read it.

Speaker 4 (02:53:54):
It's been removed.
The compensation for thebuyer's broker section has been
removed.
It is no longer in there.

Speaker 1 (02:54:00):
Yeah, and Michael reaches quota of 10 questions.
So let's go, let's move on tothe next one.
Let's not even count, let's dotwo more.

Speaker 3 (02:54:12):
I think we're out Great, wonderful, awesome.

Speaker 1 (02:54:14):
All right guys, thank you, reach out to us for all
the stuff that we said that wecan do, all the commercials that
I did.
Everybody will get a videoemail, so thank you.

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