WERC recently conducted a survey asking corporate and government mobility professionals to share their insights around potential process and policy changes within their organizations related to U.S. buyer broker compensation. The results of the survey highlight key trends in mobility practices across the United States, in light of recent and upcoming changes to buyer agent compensation related to the National Association of Realtors (NAR) proposed settlement and associated process changes. Results feature responses from 47 organizations, representing a significant portion of the industry, with nearly three-quarters of respondents representing organizations with 20,000 employees or more.
Organizations were queried on how they plan to handle buyer agent compensation following implementation of the NAR process changes, as well as how they plan to handle cases where transferees have responsibility for buyer agent compensation.
“The catalyst for the survey was feedback we received from volunteer members who are part of our buyer broker ad hoc group, as well as other corporate members who are looking to see how companies are thinking about navigating these changes,” says Michael T. Jackson, WERC’s vice president of membership and public policy. “These changes represent a significant shift in the operations and processes related to real estate transactions. Companies have to think through how this impacts the overall transferee experience, as well as how this fits into the policies that they set,” he says. Ultimately, these policies shape the transferee experience and provide the parameters for relocation and mobility programs to work within.
“While there have been a lot of anecdotal conversations, the survey was designed to provide a broader snapshot, with real data, on how people in the industry are navigating changes,” Jackson says.
Key Findings
Survey results showed that all but two respondents offer benefits for home sales and purchases. About 83% of organizations also use a full-service managed policy in relation to domestic moves, while 36% use a lump-sum policy. All organizations provide tax gross-up to their employees for moves, and 43% plan to provide a tax gross-up related to any additional tax liability following the NAR proposed settlement. All but one organization currently uses relocation management companies, and 70% are in contact with their relocation management company about the NAR proposed settlement.
Sixty-two percent of organizations are still considering their options for handling home sales and 64% for home purchases after the NAR proposed settlement-related changes, while 13% for home sales and 17% for home purchases have decided how they will handle buyer agent compensation related to their programs. For home sales, organizations are mainly considering covering the full amount of the buyer agent’s compensation (45%) or covering up to a set percentage (40%). Similarly, for home purchases, organizations are mainly considering covering the full amount of the buyer agent’s compensation if the seller declines to pay it (43%) or covering up to a set percentage (40%).
When it comes to changing their mobility program policies for home sales, 38% of organizations plan to amend existing policies, while 28% plan to update formal policies to include provisions around buyer agent compensation.
How to Use the Data
The NAR changes are shaping discussions within the talent mobility industry, and a one-size-fits-all framework is not expected to emerge. “Right now, conversations are happening between relocation management companies and their client companies about their particular programs. A lot of this comes down to what policies will or won’t work for each company,” Jackson says, noting this issue is a fragmented one with requirements and processes related to buyer agent/representation agreements and MLS listings varying by location.
While it’s ultimately at the discretion of each company to decide how to move forward, by seeing what others are doing, a roadmap of best practices can emerge. “This survey provides data that companies can use to have data-driven information on what the broader ecosystem is looking at,” Jackson says.
WERC will continue to engage with the broader membership on this topic, with potential future surveys to come. Roughly two months after the NAR process changes go into effect on 17 August, a concurrent workshop session at GWS (22-25 October) will take place as well, focusing on how to navigate policy and process changes.