From Fringe To Forefront? What Agent “Steering” Will Look Like Now

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It’s hard to get a large group of real estate agents to agree on anything, but they’re pretty consistent when it comes to this topic.

Prior to the NAR settlement, the practice of agents “shunning” buyers away from properties that offer them a lower commission was always rare, with many agents even going so far as to say it probably wouldn’t even be worth their agents’ time, regardless of the ethical issues.

But with the NAR’s new settlement rules set to go into effect on MLSs across the U.S. later this week, there’s an emerging industry consensus that so-called “steering” will become more prevalent — even though it’s more often led by buyers than agents.

• Less 13 percent Seventy percent of real estate agents who responded to the Inman Intel Index in late July said MLS disclosures about compensation offers to buyers of properties have “sometimes influenced” the advice they give to clients.
• Of that relatively small group, More than half They said they simply communicate the fee information to their buyer clients and let them decide.
• only 5 percent % of all real estate agents said they have engaged in hidden “inducing”-like behavior, such as withholding listings from clients based on MLS information or discouraging clients from buying a home.

In a monthly survey of 611 real estate industry professionals, Intel explored the actual prevalence of steering, how steering has actually impacted the agent-client relationship, and how agents and brokers think steering is likely to evolve going forward under NAR’s new settlement rules.

For the full findings, read the analysis below.

What exactly is “steering”?

By Saturday, MLSs across the country will no longer have compensation columns in listings, leaving buyers’ agents with no go-to place to see their commission.

To understand what this change means for agents, Intel first sought to look at what agents say they are getting from the field.

When working with buyers throughout your real estate career, did you regularly check the MLS to see the buyer’s commission for the property?

• 61 percent — Yes, but it doesn’t affect the advice I give to my clients.
• 23 percent No, I didn’t feel the need to check.
• 13 percent — Yes, it sometimes influences how I advise my clients.
• 3 percent — No, it felt wrong to check.

The majority of agents Nearly three in four people — Only a few people said they regularly check the MLS compensation column. Only 1 in 20 people — They said they used this information to steer customers away without informing them.

So What value did agents get? By having an MLS compensation field?

Agents offered a long list of answers, often selecting multiple options. Below are some of the most popular choices among all agents:

• 39 percent Of agent respondents, 100% told Intel that having a compensation section on the MLS has reduced the need to contact a real estate agent to get the same information.
• 21 percent 100% of agents said it helped them understand how different brokerages approach commissions.
• 20 percent 100% of agents said compensation fields made it easier for them to track market changes over time.
• 19 percent 100% of agents said the tool helped them better understand their company’s short-term revenue outlook.

Among the agents Not checked regularly Here are some of the main reasons you might want to search for fee information for a property on the MLS:

• 13 percent of agents overall said they don’t check buyer fees because it “doesn’t help me serve my clients.”
• 7 percent A third of all agents said it doesn’t matter whether the buyer’s commission is 2 percent, 3 percent or something else entirely.
• 5 percent Real estate agents said they don’t see the need to check the seller’s fee because it’s standard in the market.

Interestingly, of the few agents who said they didn’t check the MLS compensation field for purely ethical reasons, nearly all believe that the NAR settlement will make steering more common, not less, going forward.

One real estate agent, who responded to the survey anonymously, said the new terms were “terrible for buyers and the real estate agents who work with buyers.”

“Of course there will be many more inducements at the buyer’s behest,” the agent wrote, “in fact I have never heard of anyone being induced because of the amount of commission. Now that buyers are telling them to do so, it will be happening on a daily basis.”

To explain why this is the case, Intel asked agents and brokers how they plan to verify this information in the new environment.

A framework for the future

So what will the steering actually be like once Saturday’s changes go into effect?

In the short term, buyer-side brokerage agreements appear to be the new norm, and if sellers refuse to cover buyer-side fees, it is the buyers, not the brokers, who will be affected.

But some questions still remain: Without a compensation field in the MLS, how will an agent know if and how much the seller is willing to cover?

Brokers primarily adopt one of two main approaches in their broker policies or guidelines:

• 43 percent In a late July survey by Intel, 50% of real estate brokerage leaders said buyer’s agents would be encouraged to contact the selling agent before their clients make an offer on a home.
• meanwhile, 24 percent Many brokerage leaders recommend a more indirect approach, where you submit an offer with the seller paying the full commission, and then learn the seller’s position as part of normal negotiations.

Notably, in late July, a few weeks before the changes were to take effect, About one in five brokerage leaders He told Intel he was waiting for more information before formulating policies or guidelines on how buyer’s agents should review sellers’ commission concessions.

One potential solution being discussed in some MLSs is the inclusion of a “seller concession field” that would allow sellers to indicate their willingness to cover all or part of the commission.

But most real estate agents surveyed by Intel don’t believe this is a viable option, at least for now.

Now that buyer’s fees are no longer included in the compensation field on MLS listings, how do you plan to verify this information on future listings?

• 60 percent — If possible, I plan to contact the listing agent to confirm buyer’s fees before my client purchases the home.
• 24 percent — I encourage my clients to submit offers that require the seller to cover all of the buyer’s fees, and then I will learn the seller’s position as part of the normal negotiations.
• 4 percent — I wouldn’t contact the agent for this information, but I would check the MLS listing to see if they are willing to cover the buyer’s fee in the area of ​​seller’s concessions.
• One percent — I would never contact a for sale agent or encourage a buyer client to have the seller cover the buyer’s fees.
• 10 percent – other

It is clear that under the new rules, most buyer agents will feel the need to find out what percentage of commission the seller is willing to pay, even if they didn’t feel the need to find out before when it was available on the MLS.

And a July survey found that real estate agents expect this to play out primarily outside of the MLS, not in the area of ​​seller concessions or through other workarounds.

Methodology notes: Inman of the Month Intel index investigation The survey ran from July 22 to August 5, 2024 and received 611 responses. The entire Inman reader community was invited to participate, and randomly selected community members were invited to participate via email.Users answered a series of questions related to their self-identified sector of the real estate industry, including real estate agents, brokers, lenders and real estate tech entrepreneurs.The results reflect the opinions of the Inman community and do not necessarily represent the opinions of the real estate industry as a whole. investigation It is conducted monthly.

Email Daniel Houston