Two Big 2024 Changes for Real Estate Agents: Buyer Compensation & Lead Companies

As we step into 2024, we can quickly see that the real estate landscape is evolving, presenting challenges and opportunities for professionals in the industry.

In this article, we'll explore two significant changes discussed by Greg Harrelson in recent conversations within the Real Geeks community. These changes involve the aftermath of the NAR  lawsuit and a recent FCC ruling on lead generation companies.

"Things are going to change, and I believe those who've changed early have nothing to worry about. But those who stay still could have a rude awakening." Greg warns.

Changes in Buyer Compensation

The National Association of Realtors (NAR) lawsuit raised questions about the ramifications and potential changes in our industry.

Despite the initial buzz, Greg notes that the topic seems to be fading from the forefront of industry discussions, and he raises a critical question: should real estate professionals be worried?

The Potential Changes in Buyer Compensation

The heart of the matter revolves around potential shifts in the compensation structure for buyer agents. 

"Future MLS changes might prohibit listing agents from directly paying buyer agents." says Greg.

And while this might not seem immediately alarming, he emphasizes the need for real estate professionals to consider the possible consequences and proactively prepare for changes.

Harrelson delves into a crucial aspect of the conversation - the consumer's understanding of the value provided by buyer's agents.

The value of a listing agent is well established. But buyer agents need to articulate more effectively the different ways in which they help their customers.

Greg points out that consumers may not fully grasp the complexities and efforts invested by buyer's agents, especially after a contract is secured.

He believes the best way a buyer agent can communicate his or her value is by creating a buyer presentation.

This presentation should:

• give the buyer a detailed action plan on how you'll find them the best property
• set expectations for the buyer, in terms of what you'll find and what they can expect to pay
• state clear goals and a clear timeframe for finding them the perfect home
• explain why they should choose you over your competitors

We've created an entire guide about this, that you can download here.

So the first thing you'll want to do is revamp your buyer agency agreement. But that's not all.

"Every state is different." Greg notes, "Some of you may be required to have a compensation agreement. If you are, start practicing it, and start presenting it."

And if you've never used compensation agreements with buyers before, you have to understand, it's going to be awkward in the beginning.

But everything is awkward in the beginning. With practice, you'll find out the best ways to bring this up in conversation, and the different ways to handle the buyer's response.

The Role of a Real Estate Coach

Greg makes it his mission to always stay informed about the changes happening across our industry. In his private coaching community for Real Geeks users, he shares the advanced strategies he and his team use for consistent lead generation, workflow optimization, and effective communication.

Join RG Mastery today for less than $200/month, with no long-term commitment.

Changes in Lead Generation

The second big change we'll experience in 2024 is related to our lead generation.

Greg emphasizes the importance of being aware of changes brought about by the Federal Communications Commission (FCC) regarding leads.

The focus of the discussion revolves around third-party lead referral companies, such as Realtor.com, Zillow, and others. These companies send leads to real estate agents in exchange for a fee or referral. 

One of the key changes outlined by the FCC is that a lead company can no longer distribute a lead to more than one real estate agent or entity. 

This marks a significant departure from the existing practice, where a lead might be sent to multiple agents simultaneously or even sold to various industries beyond real estate.

Because, even if you believe these companies are selling you leads that they aren't selling to anyone else, at the end of the year they recycle these leads and sell them again. Or, they have exclusivity within a given industry, but the same leads they're selling to you, they're also selling to insurance companies.

This FCC ruling is going to apply to every single industry out there.

If implemented strictly, this rule could reshape the way leads are distributed and sold, affecting the revenue streams of these companies.

And make no mistake – these companies will adapt to this change in one way or another.

Perhaps they'll only distribute leads to their highest converters. Perhaps they'll create exclusive, subscription-based communities where only the members get the leads. Perhaps they'll just source less leads overall, and sell them for a higher price.

One thing's for certain: if this ruling is implemented strictly, you'll be getting less leads.

Diversifying Lead Sources

To adapt to these changes, Grer recommends diversifying your lead sources. Relying solely on one-dimensional lead generation, especially from third-party referral companies, could pose risks.

Greg suggests exploring pay-per-click (PPC) leads and social media marketing as alternative methods to generate leads directly to your website.

This is exactly what he does with Real Leads, Real Geek's PPC branch. He establishes a budget, and he gets a steady flow of high-quality PPC leads, month after month.

By taking control of lead generation, real estate agents can mitigate the impact of potential changes in third-party lead distribution. Harrelson advocates for being proactive in owning a portion of the lead flow, ensuring a more stable and self-sufficient business model.

Final Thoughts
So there you have them: two of the big changes we're going to experience this year throughout the real estate industry.

What's next? Get proactive. 

Start diversifying your channels for lead generation, and start creating (or optimizing) your buyer's presentation. Make sure you're not relying solely on lead generation companies, and make sure your customers understand your value.

And, if you want to take the guesswork out of the equation, join Greg at RGMastery.com. Through his weekly sessions, Greg ensures you're not just aware of the changes in our industry, but that you're taking the right steps to make these changes work in your favor.