Episode summary
Two years after the Sitzer/Burnett v. National Association of Realtors settlement upended how real estate commissions work, the honest answer to "what actually changed?" is: less than you'd think. In episode two, Dave and I dig into why.
We start where most people have never been taken — the actual mechanics. How the legacy 6% model worked, where buyer agency came from in the first place (it didn't exist before the late '80s), and why a system built for legitimate reasons quietly stopped serving the people it was meant to protect. Then the lawsuit itself: the ~$1.6 billion settlement, the three rule changes that came out of it, and why buyer-agent commissions have actually crept up since the dust settled — the phenomenon the New York Times called "The Great Workaround."
From there it gets practical. How we counsel sellers now (hint: don't make an upfront offer of compensation — you're only negotiating against yourself). Why steering is the real heart of the whole case. And the part every buyer should hear: what you pay your agent gets penciled into the deal at closing whether you notice it or not, so a cheaper buyer's agent makes your offer more competitive at no extra cost to you. We close on why we walked away from percentage-based commissions entirely in favor of a flat-fee model — full service at $15,000, limited service at $9,000, and hourly consulting — and tease the retainer and the sell-side breakdown coming in episode three.
Hosted by Nick Aufenkamp and Dave Miller of The Tartan Team, brokered by Real Broker, LLC. Serving Clark County and Southwest Washington.
In this episode
- [01:47] What this episode is really about — what we're doing different with the business
- [04:56] The legacy commission model, explained for anyone who's never bought or sold
- [06:22] A short history of buyer agency — and why it didn't exist before the late '80s
- [11:43] The NAR lawsuit: before and after, and the ~$1.6B settlement
- [14:04] What the MLS actually is — and why Zillow can't exist without it
- [16:01] Steering: the two-identical-houses example that explains the whole case
- [22:00] The three rule changes that came out of the settlement
- [25:08] What's actually changed since August 2024 — "The Great Workaround"
- [35:00] How we advise sellers now: make compensation negotiable, not upfront
- [46:47] The million-dollar-home example: how a cheaper agent makes a buyer more competitive
- [53:00] Why percentage-based commissions are structurally broken
- [55:10] Our flat-fee tiers: full service, limited service, and hourly consulting
- [1:05:18] Teaser: the retainer and the sell-side model — coming in episode three
Links from this episode
- Why the Buyer-Agent Commission Model Is Broken — Nick's deep dive on the history of buyer agency, on Realtor Gone Rogue
- Book a free consultation with The Tartan Team
Transcript
Lightly edited for readability.
Nick (00:00): Hi everybody, and welcome back to Disclosures with Nick and Dave. I'm Nick Aufenkamp, and this is my wonderful co-host, Dave Miller. Dave, how are you today?
Dave (00:12): Nick, I am wonderful. How's your weekend?
Nick (00:15): It was good. And honestly, I'm impressed — here we are, doubling the episode count. Last week was totally on the fly, like "I think we need to do this," and I came up with the proposed name for the podcast about fifteen seconds before we hit record. I think it went down as the worst podcast name in all of history.
Dave (00:21): Yeah. It only gets harder from here. No — it's okay. No one will ever see it. It's buried deep in the history of the internet at this point. Long forgotten.
Nick (00:52): You say that, but there were eight viewers on YouTube. So there are eight people who now know this forever as the "Mostly True Real Estate Podcast." I feel like I need to justify it. It's not that we wanted to do a podcast about lying — it was this whole idea of "make it fun." What's the part that's exaggerated?
Dave (01:03): Mostly true. That's right. It was a good thought. I liked it. Come up with a new name and add it to episode two, I guess.
Nick (01:47): Speaking of terrible ideas we've put out into the world — we want to talk about what we're actually doing with our business, and hopefully this one isn't a terrible idea. I'll say that while my hit rate on ideas is probably in the low single digits, when I get a hit, it tends to be all right.
Dave (02:15): It's TBD as of now. But who knows — with enough shameless self-promotion, maybe we can bump it up to at least an average tier, if not slightly higher.
Nick (02:31): We're going for baseball numbers here. If we can get it to thirty-three percent, we're golden. So that's really what this whole episode is — I want to dive into something we teased last time: the fact that you and I have connected over the last eighteen months talking about real estate incentives. Going all the way back to the lawsuit — Sitzer/Burnett v. the National Association of Realtors — where NAR and a bunch of the top brokerages in the country got sued over issues related to real estate commissions on both the seller and the buyer side. A bunch of big changes came out of that, and it really got me critically thinking: what is the future of real estate compensation? Let's rethink the models. You've been the main sounding board I've had over the last eighteen months, and it's been interesting how we've landed in a lot of the same spots and rebuilt the model for The Tartan Team. Right at the beginning of this year we relaunched the way we do business. So — what are the key issues we've had with real estate compensation models, and what are we doing differently?
Dave (04:06): Absolutely. A lot of people who aren't in the industry probably don't have a great idea of what the options even are. People come to us and ask, "How does all this work?" And unless you're in the industry — or one that's adjacent to real estate — you probably don't have a good sense of what we'd consider the legacy model for commission. So maybe explain that real quick for anyone listening who isn't privy to exactly how it works. Give us a quick rundown of what it's looked like for the last thirty or forty years.
Nick (04:56): That's a great place to start, because historically, compensation has been dictated almost exclusively by the home seller. There'd be a listing agreement where an agent like one of us would sit down with a seller and say, "Here's the price we're agreeing to list your house for, and for a job well done we'll get compensated, let's say, six percent." That could change by market or by individual agent — it's true that commissions have always technically been negotiable — but six percent has been about the average across the US. Then the listing agent would tell the seller, "Of that six percent, if there's a buyer's agent, I'm going to give half of it to the cooperating buyer's agent." This is called cooperative compensation, or a co-broke arrangement. And this is the thing the lawsuit was primarily about — because sellers were essentially being pushed by their listing agent to compensate a buyer's agent who, at least in theory, should be negotiating against the seller's best outcomes. That's the whole point of a buyer's agent.
Dave (06:22): Double-click on that a little. Tell me if my understanding is right. Even further back than the '80s, my understanding is that what we'd now think of as the buyer's agent wasn't really representing the buyer — it was more like a freelance guy who knew people, was in the industry, and acted almost like a secondary broker. He had a connection, and you'd say, "Hey, if you can find a guy and help me sell this house, I'll give you X percent of my commission." Is that right?
Nick (07:05): That's a super sharp observation — and I'll put a link in the show notes; a couple of months ago I wrote an article on the history of buyer agency. You're exactly right that in the '80s and before, there was no such thing as buyer agency. Every agent was a sub-agent of the seller. Everybody worked for the seller, and buyers had no official representation — even if a different agent helped them submit an offer and negotiate, the understanding was always that that agent was paid by and working for the seller. That led to a ton of lawsuits in the late '80s and early '90s, so the National Association of Realtors created buyer agency: somebody with a fiduciary responsibility to the buyer. What's interesting is that while buyer agency was created, the compensation model never changed. We created this carve-out where an agent has fiduciary responsibility to a buyer, but they were still compensated by the seller. And that made sense in a lot of ways — buyers thinking about hiring a buyer's agent assume it'll be expensive, especially when buyer's agents have been accustomed to making two, two-and-a-half, three percent of the purchase price. If a buyer is already stretched for closing costs and a down payment, are they really going to want to add another two-and-a-half or three percent to pay an agent? The answer is no. So it made sense that sellers would continue to offer compensation to a buyer's agent. But the problem was that buyers never had any say in how much their own agent got paid. And that was one of the other big pieces of the 2024 lawsuit — buyers saying, "This is fundamentally anti-competitive. I should be able to negotiate fees with my buyer's agent." I might be getting a little ahead of myself there — what can I clarify?
Dave (09:38): I think you are a little. And the first observation we should take from the background is that — as with a lot of industries and a lot of things that stop serving the people they were intended to serve — it's not necessarily some malicious scheme. It's something developed for legitimate reasons, and as the market and the needs of the consumer changed, a holdover from a bygone age gets propped up. It can be propped up for nefarious reasons, sure — people not wanting to lose their cut — but in a lot of cases it's just resistance to change. It's hard to change these huge institutionalized mechanisms of how we do business. So I think it's fair to say you and I have looked at this and thought, this feels a little monumental to try to change when it's been this way for so many years. And you're right on with the fact that it's fundamentally anti-competitive if you don't have somebody in your corner who you're paying. If somebody else is paying your buyer's agent, even the most honest person — how can they act fully on your behalf with total clarity of mind? So maybe to help clarify, we should touch on the specifics of the NAR lawsuit. Take us into some of that so people have a reference point.
Nick (11:43): Yeah. We'll do a before and after. Up until 2024 — and there are still some agents who try this line of reasoning today — buyer's agents rarely talked about compensation with their buyer clients, because they could say, "Buyer agency is free to you, because I'm paid by the seller." You'd have to be really sharp as a consumer to think through what that actually means and press deeper. If a service provider tells you their service is free, there's no incentive to negotiate. How do you negotiate a better deal than free? It's really hard. And then think about disruptive companies like Redfin, which launched in the early 2000s with the whole model of bringing real estate commissions down and focusing on consumer experience. One of the big things Redfin ran into was advertising discounted buyer-agency fees — but if the public perception is that buyer agency is free, a discount doesn't make any sense. So that sleight of hand and misrepresentation of the true cost of buyer agency, and the inability for buyers to negotiate, was one prong of the lawsuit. The other prong was that many MLSs — especially those controlled by NAR — required that sellers offer compensation, even if it was just a dollar, to a buyer's agent in order for the home to be listed at all. And sellers took huge issue with that: "Why would I offer compensation up front to somebody who's negotiating against me?"
Dave (14:04): Let me jump in real quick. For anyone who's new to this and trying to figure out what it's all about — the MLS deserves its own podcast, because it has its own issues going on right now. But the MLS is essentially the cooperation of multiple real estate agents and associations in a local area. Everybody puts the houses they're selling on the MLS — which just stands for Multiple Listing Service — so all those cooperating brokerages put their listings in the same place, and the data gets consolidated. If you're familiar with Zillow or any of the online sites — at least in their current form, speaking in 2026 terms — they can't exist without the MLS. So if you think, "Why does the MLS matter, I'll just go look at the houses on Zillow," — no. As it stands, you as a consumer have no access to see all the available houses outside of that cooperative agreement between agents in your metro area. It was a way to get awareness of every house for sale out there — so a buyer's agent could find their client the best house, and a seller could get maximum exposure. Sorry to interrupt. Back to the MLS —
Nick (16:01): No, that's really good — and I'm glad you highlight it, because this came up in the lawsuit. A key component of the MLS was that it's where listing agents could show what the seller was offering for compensation to buyer's agents. And that created huge steering issues. Buyer's agents doing searches would see how much buyer-agent compensation was offered — something that often wasn't shown on public portals like Zillow. So some buyer's agents were filtering listings based on offers of compensation. For a given buyer there might be two ideal homes that fit their criteria, but the agent might only show one, or steer the client toward one over the other, because it had a higher offer of buyer-agent compensation. This is a massive part of the settlement, because — isn't the buyer's agent supposed to be looking out for the best interests of the buyer? Why should they be incentivized to push their client toward one home just because they'll make more money?
Dave (17:16): Exactly right. Let's run a quick example to drive it home. Say we have two houses, both asking $200,000. I'm representing a client, and he likes both houses — maybe one serves his purposes slightly better. The house that serves him better offers a 2% commission to any buyer's agent who brings a buyer. Prior to this lawsuit, that 2% was typically only advertised on a gated page of your local MLS. Meaning you, as consumer Joe, could not see what I was getting compensated. You'd find out eventually in the closing documents, but it wouldn't be clear. You'd have no way of knowing that the other $200,000 house I ended up pushing you toward had a two-and-a-half percent commission on it. And $200,000 is pretty low for most West Coast markets now, so even half a percent could mean several thousand dollars for a buyer's agent. I like to think of myself as an honest, upstanding guy — but if times were tight, you don't have to be a villain. That's the issue here. It's not a wholesale condemnation. It's "money talks," in every industry, to everyone. So even the most honest agent thinks, "Both are $200,000... I could see why the lower-commission one might help my client better, but I don't know — the paint on this one looks..." — and you start to have these internal conflicts.
Nick (19:37): "I've been working with this guy for six months..."
Dave (19:59): Right. And I'd say we're both guilty of this — realtors have the reputation of being fast-talking, slick guys. We'll hit you with a bunch of terms you're not familiar with. "What even is buyer's-agent compensation?" A lot of the time it's a whirlwind. The last ten years have been primarily a seller's market, so you might be working with an agent who's saying, "You've got to do this, this, and this," and they're not taking the time to explain what the commission is, what's going on, why they're even helping you, how they get paid. Those are the questions a lot of agents don't take the time to really explain.
Nick (20:42): Yep. And there was no transparency, especially prior to the 2024 settlement, because for the most part buyers had no idea — to your point — how much their agent was making or how they got paid. They'd have no idea one house might offer three percent and another one-and-a-half, or how that might shape the way their agent guided their decisions. So as you talk through it, you can see it was going to be a hard case for NAR to make — why sellers must advertise a buyer-agent commission — and they were going to lose badly. They decided to settle. I think it was around $1.6 billion — I should have verified, but it was in the billions. And then there were three key rule changes the court dictated. One: sellers no longer have to make any offer of compensation in order for their home to be in the MLS. Two: they took it a step further — buyer-agent compensation, or offers thereof, cannot be advertised in any way in the MLS. Every field where it used to be noted was removed; you can't put it in private or public remarks. You can still do it on social media, but not on any official MLS platform. And third — the big one for buyers — buyers must now sign a buyer-agency agreement before they're allowed to tour any homes with a buyer's agent. That agreement has a term — how long it lasts. It's geographically bound — a specific property, a county, a whole state. And it outlines compensation, putting a maximum on how much the agent can be paid. So if you put two-and-a-half percent, even if a seller is offering three or three-and-a-half, the agent would have to amend the agreement to receive more. That was designed to help prevent steering. Those were the three big outcomes — and that third one, having to talk about compensation up front, is the one you and I have spent the most time thinking through. Because now, for the first time ever, the buyer is saying in writing that they're obligated to compensate their agent up to the amount on that form. It makes it explicit that the buyer is on the hook — even if the seller offers to pay, it's still fundamentally the buyer's responsibility.
Dave (24:26): So the question is: what have we seen as a result? The rule changes went into effect — that was August 2024, right?
Nick (24:36): August of 2024 is when the rule changes went into effect. It started in 2021 and took forever to litigate.
Dave (25:08): Gotcha. So what have we seen since? How has the industry started to change — or have we not really seen a change? Is it more of the same, just some back-end rule changes but everything staying similar? What's your experience?
Nick (25:08): Great question. I'd ask the listener — what would you expect? If buyers now have to look at these agreements and they're being encouraged to negotiate compensation, what would you expect to happen? Most of us would think: on a $700,000 or $800,000 home, which is pretty common around Clark County, even at two percent — that's $14,000 on $700,000, $16,000 on $800,000. At three percent it's $21,000 to $24,000. You'd think buyers would say, "Wow, that's a lot of money that I'm on the hook for — and what am I actually getting for it?" You'd think they might want to negotiate. But when you look at studies from Redfin and others, what we've actually seen since August 2024 is that buyer-agent commissions have crept up ever so slightly. The national average last I looked was about 2.56 percent — they were closer to 2.4 percent when the settlement went into effect. So it's defied what I would have expected. And not to name-drop, but back in March of last year I got to be part of a piece Debra Kamin at the New York Times did. We had a long discussion, and the piece she published was titled "The Great Workaround" — the whole idea being how the industry, and buyer's agents in particular, have worked around the rule changes to essentially keep it business as usual. Sellers are still paying buyer's agents, it's not framed as a real cost to buyers, "now we just have a little extra paperwork." Depending on who you ask — and both you and I have much more of a consumer-advocacy bent — it's a real disappointment that we had this huge lawsuit responding to real issues, and here we are almost two years later and the effects have been lackluster at best. It doesn't feel like consumers have actually been empowered to think through, much less renegotiate, compensation structures.
Dave (28:14): A big part of that is that this is a pretty esoteric conversation until you actually need to buy a house. Everyone knows how fast headlines move now. It's, "Yeah, there was something about a lawsuit with the realtors, they got sued, but I don't really know what it was about." If you're not adjacent to real estate — or a lawyer interested in the legal side — you have to really be paying attention to know what was going on before, what's going on now, and what actually changed. And in general, the answer is: not a ton. It's also hard to know how effective the rule change has been, because these failures to represent your clients — to throw out another nine-dollar term, "fiduciary duty" — by law, that's what we're supposed to have for our clients. There's a list of things; I wouldn't want to get quizzed on all of them. But to boil it down: you work for your client. Whether by negligence or malice, you're not supposed to work against their interest. Their interest above yours. That's what it means to be someone's fiduciary. The problem is, a lot of these agency violations get submitted to the state Department of Licensing after the fact. The whirlwind happens, you feel pushed and steered, the house closes, you move in, you're getting set up — and a couple months later the dust settles and you think, "What happened?" A lot of people just take it. Some have the gumption, or the time, to do something. People hire an agent because they don't know how to do all this. So if they feel taken, it's, "Now what am I supposed to do?" You have to submit a complaint — and that's not at all to say don't. If you feel misrepresented, absolutely contact the Department of Licensing. But the data on these issues takes time to come out. So I'm very interested to see, over the next half-decade, whether we get an uptick or a downtick in steering and other claims — because on the ground, the difference doesn't feel particularly different. So maybe let's set this up from the seller's perspective. Before the lawsuit, it would've been almost anathema not to offer some buyer's-agent commission. There was very much an unspoken, subtle assumption: "You're going to sell this house for five-and-a-half or six percent — what are you offering for the buyer's side?" If a listing agent said, "I want to save my seller money, so I'm not going to offer a buyer's-agent commission," there was always this concern: is everyone going to give my listing a fair shake? If the MLS shows zero for the buyer's-agent commission, that's a hard sell — because the buyer's agent has to go back to their client and say, "You love the house Dave is selling, but he's not offering any compensation for my work, so you're going to have to come up with that yourself." On $700,000 that's $14,000. So this didn't just put buyers in a compromised position with their agent — it put sellers in a compromised position too, because of that unspoken understanding: "If I'm offering nothing, how many agents are going to be enthusiastic?" It was bad on both sides. I think the new law about disclosing your maximum commission is good — I'm just curious, long term, whether it'll really have the effect it was supposed to.
Nick (35:00): Let's turn the corner and make this practical for the buyers and sellers listening. On the seller side, here's how we counsel sellers. The reality is most transactions in Clark County still have both a listing agent and a buyer's agent. That buyer's agent isn't working for free — they need to be compensated. And most buyers don't have an extra $15,000 or $20,000 on top of their down payment and closing costs to pay their agent out of pocket. So most buyers will be looking to the seller to cover or offset that. But the mindset that needs to shift is this: before the lawsuit, seller offers of compensation were really a way of incentivizing buyer's agents to procure a buyer — another nine-dollar term, "procuring cause," which in the popular vernacular is "bring me a buyer." Going back to that sub-agency conversation, sellers were saying, "By offering higher compensation, I'm strategically capturing the top agents to encourage buyers toward my property over others in the neighborhood." Our stance is that sellers should not think of compensation that way at all. The buyer's agent does not work for you, and trying to incentivize a buyer's agent to steer their client toward your property actually puts you in a tricky spot legally — you're trying to incentivize somebody who has a fiduciary responsibility, financial accountability, to the other party. So I would not recommend any of our seller clients try to incentivize buyers that way. There are other ways to incentivize — closing-cost credits, or really just pricing your home competitively. That's the very best thing to do, rather than offering additional compensation to a buyer's agent. So what we'd say is: make no upfront offer of compensation. Instead, say it's negotiable. We're not refusing to compensate buyer's agents — we're saying it's TBD, make it part of the offer, and we'll review it as a total part of the offer. It becomes a point of negotiation. So if the buyer and their agent have an agreement for something crazy like five percent, and that's what the buyer offers — well, maybe that offer is $100,000 higher than any other, all cash. As a seller you say, "Five percent is crazy high, but it's all cash and $100,000 more — that nets us the most. Happy to help these buyers compensate their agent by building it into the price." You never know what the offer's going to look like. It may also become a point where you counter: "We're not going to do five, but we'll do two, or two-and-a-half."
Dave (38:53): Absolutely. And — maybe this is the wrong way to think about it — but as we advise our sellers, we're taking into account the history and legacy this system has left us with. Things are starting to shift toward a more balanced market; sellers don't have the leverage they've had for almost a decade, especially the last five years. So if you're a seller without multiple offers — a lot of buyers are always shopping at their max threshold, trying to buy as much house as they can, which is a whole other discussion as to whether that's a good idea — but if a buyer runs their numbers at the razor's edge of what they can afford, with the preconceived notion that the seller will compensate their buyer's agent, and they put in an offer... now we're on the sell side. We know some buyers, especially in the lower price bands, have maybe been informed poorly by their agent: "Don't worry about it, I'm getting two-and-a-half percent, but the seller's going to pay for that." So as we advise our seller clients, we're also acknowledging that this lawsuit hasn't completely undone the last 20 years. Offering that in negotiation, as you said, might be what gets the deal done — because maybe the only offer you get can't afford the house unless you compensate their buyer's agent. If you've owned the house a while and you're in a decent equity position, that might make more sense than rejecting the offer, kicking it back to the market, and eating the holding costs. These are things we help our seller clients think through. And I think you're exactly right — the best strategy is to say it's TBD and can be negotiated. It leaves the door open. Saying "zero" up front, or stating it ahead of time, might disqualify a lot of buyers right off the hop, because a buyer's agent and their client will look at it and say, "That house looks great, but we already talked about my commission and what you can afford." So whether you're representing sellers or buyers, the strategy is a little different, and it's a changing landscape. If things change down the road such that it makes more sense to not offer a buyer's-agent commission as a standard from the sell side, that might be what we do. But for now, that's how we advise seller clients.
Nick (42:48): That's really good. It's all part of the conversation we have with sellers at the listing agreement — the strategy fluctuates depending on the home, the competition, what it all looks like. But the main caution for any seller listening: if you have an agent telling you to offer something up front, I'd really question why. At the end of the day, by making an upfront offer of compensation, you're only negotiating against yourself. Say you offer two-and-a-half percent — you might get a buyer with no agent, or one working on a flat fee, and you could be offering more than you have to. You could also disqualify yourself from a much better offer. This is where the judgment of having an agent who really thinks these things through — rather than defaulting to "the way it's always been done" — becomes really important. And it transitions us to the buyer side. In Clark County, most sellers are still offering some form of upfront compensation. Even if they aren't, most sellers are being prepared by their listing agent — rightfully so — to expect offers that come in with a percentage concession to a buyer's agent. So what uncritical agents — I'll say uncritical to unscrupulous, that's the range — will still be telling their buyer clients at the time of signing the buyer-agency agreement is, "Here's the percentage I charge, let's say two-and-a-half percent. But don't worry about it — we'll negotiate it in, the seller will cover it, I've never had a seller not cover it, you won't be on the hook." Most buyers feel good about that and sign. And honestly, that's pretty true — I haven't had a buyer come out of pocket to pay my compensation yet, which is cool. But the thing most buyers don't consider is that whatever that two-and-a-half percent is, it objectively adds to the transaction costs no matter how you cut it — and sellers aren't offering to pay buyer-agent compensation out of the goodness of their hearts. Sellers have a bottom line based on what they net. The lower that fee, the more it reduces transaction costs, which means the more affordable the home is. Let me make this explicit. Let's do a million-dollar home, because I'm terrible at math. Two-and-a-half percent on a million is $25,000. Say the seller covers it. Now another buyer comes along —
Dave (46:47): That is correct, as far as I'm aware.
Nick (47:09): The savvy buyer working with The Tartan Team on a full-service flat fee — $15,000. The seller's still offering two-and-a-half percent, but our flat fee of $15,000 is $10,000 less in agent compensation. What does that mean for the buyer? A couple of things. On one hand, because the seller's offering two-and-a-half percent and we only take $15,000, there's $10,000 extra that usually goes back to our buyer — either as a purchase-price reduction, or as a seller credit that buys down the interest rate or covers closing costs. That's one option. The other: if there are multiple offers on this million-dollar property and every other buyer's agent wants two-and-a-half percent, then all of a sudden our client's offer is at least $10,000 more attractive to the seller — at no additional cost to the buyer. That's how doing something different on the fee side actually makes a buyer more competitive, and why buyers should be aware of how much — to the absolute dollar — that percentage adds to transaction costs, and how they might leverage it. I feel like that was a bit of a word salad. What questions does it raise?
Dave (48:58): No, I thought that was fairly clear. And worth mentioning: if you're watching and thinking, "I have no idea what these guys are talking about" — sometimes we get lost in our own back-and-forth. If you have any questions about any of this, or you're about to work with somebody and you're not sure, we'd be happy to talk to you. Go to thetartanteam.com, book a call — even if it's just for advice. This is a point of passion that Nick and I both have: advocating for the consumer, and being compensated fairly for a fair day's work. To boil it down to layman's terms: even with all this lawsuit stuff, sellers are still compensating buyers' agents. If your buyer's agent is cheaper, that gets penciled into the equation at the end of the home sale. In Nick's example, it's a $10,000 difference. And if you speed through all the compensation talk — or your buyer's agent does — that's something that might be lost on you. So it matters. If you take one thing out of this, even if you're not going to work with The Tartan Team: understand that what you pay your buyer's agent makes a difference in your ability to have leverage on any deal. If your buyer's agent is cheaper, that makes a difference — whether it's monetary to you, to the seller, or just in the overall attractiveness of the offer. That's the news we're trying to get out. All of this stuff doesn't get explained well, and we want consumers to have a clear understanding — as clear as they're interested in having — instead of speeding by and hiding very high fees in a deal that's already hundreds of thousands of dollars, where $10,000 can get lost pretty easily as "just the cost of doing business." Maybe talk a little about what's different — you already alluded to it: $15,000 is what we charge for full service. Explain what we mean by full service, and what the difference is. Where's the brass tacks?
Nick (53:00): Yeah. We may need to do a part two — we're already running close to an hour. But the teaser: I think it's better to start from the philosophical standpoint. Hopefully our heart comes through, like you articulated. We're really trying to think through fairness and alignment — making sure our goals and our clients' goals are always in lockstep. And especially on the buyer-agency side, percentage-based commissions have a fundamental issue. If you're buying a product and you've hired somebody to represent you, protect your interests, and negotiate the best possible deal — there's a problem with them getting paid a percentage of the final sales price, because they make more when you spend more. But you hired them to help you get the best deal and terms possible. That should be pretty clear.
Dave (54:12): Sounds a little fuzzy, right?
Nick (54:14): Right. And that's not trying to impugn bad motives — there are good agents who work against their own self-interest all the time. But to the points you made so well earlier: if human nature tends toward selfishness, and times are tight, and you've got to choose between doing right by your client or putting bread on the table — when push comes to shove, why would we even have a structure that incentivizes bad behavior?
Dave (54:49): It's like being on a diet while your spouse is constantly buying cookies and leaving them on the counter. You can leave them — but there's no reason to set it up that way. No reason to set yourself up for failure.
Nick (55:10): A hundred percent. Well said. So on the buyer side in particular, we've moved away from percentage-based commissions — because we don't believe the value of the service we provide should be calculated based on the asset being purchased, which is fairly arbitrary. It should be tied to the services we render: the strategic judgment under pressure, the expert knowledge of the local market, the guidance throughout the transaction. That judgment is extremely valuable — but it doesn't linearly scale the way a percentage model implies. The amount of judgment and care we give someone buying a $500,000 home is really the same as someone buying a million-dollar home. So why would we either discount our service by half for the $500,000 buyer, or charge twice as much for the million-dollar buyer, when the work is fundamentally the same? That's why we've moved to a flat fee with multiple tiers. There's full-service agency on the buyer side, which is what you'd imagine — we're setting up your tours, performing your search, attending your inspection, physically present in all the ways you'd expect. We've also got a limited-service tier, where you're compensating us for our judgment, guidance, and expertise, but in a more remote setting — instead of meeting you for every showing, you attend those on your own, whether open houses or some creative ways we have to get you into homes at a nominal cost with a showing agent. We don't have to be on site as much, which lets us be more efficient with our time, and we pass those efficiencies along —
Nick (57:31): — by charging less. That's a $9,000 flat fee. And then we've got some hourly consulting that's non-agency, for someone who totally wants to do it themselves but might want guidance at a few critical points. The nice thing is we have a conversation about your goals and your comfort level in the process, and we recommend the right tier based on the value we'll provide. We always want the value we provide to exceed what we're compensated. In whatever tier you choose, we're not fundamentally trying to compete on price — we're competing on alignment. But honestly, especially at the higher price points — eight, nine hundred thousand, a million — we generally do come out less expensive than most agents in the area. And because our transaction fees are lower, we still believe we're compensated fairly, and we're able to leverage that — like the $10,000 credit in the million-dollar example — in whatever way serves you best, whether a price reduction or a more competitive offer. So it's not that we're just trying to be the cheap guys — at some price points, full service might actually be more expensive to work with us. It's just that we're pricing based on the value and service we bring, rather than pegging it to an arbitrary asset price.
Dave (59:27): Absolutely. And — to pat ourselves on the back a little — it's hard to understate having two agents working for you at the same time. You're not paying Nick's commission fee and Dave's commission fee; we're a team. Something I've carried from past business ventures: one plus one doesn't equal two, it equals three. We cover each other's gaps — in vision when we walk houses, in thinking about negotiation, even in the process of hammering out this new model over the last eighteen months. We wouldn't be where we are without many hours discussing the implications of the lawsuit, of representing our clients well, of the ethos — doing the best work you can for a fair rate. There's so much more to touch on, and we're running long, but: percentage doesn't scale linearly. If you're buying a $1.5 million house, it wasn't three times harder for me to help you than a $500,000 house. We're not competing on price — we're priced where we think our expertise and our joint venture working together is genuinely worth, from a real standpoint of my experience and yours. Not that we're perfect, but that's part of the beauty of having a team behind you. There's a lot more we can go into, and probably will in the next episode — what we're doing differently on the sell side versus the standard model.
Nick (1:02:02): Totally. There's so much more to talk about. But at the end of the day, it's trust — and we value that so much. That's easy to say; every agent claims to be the most trusted advisor. But trust starts at a structural level. It starts with incentives. That's one of the really nice things — as we've implemented this model over the past six or seven months, the thing our buyer clients have really appreciated... I had a client whose budget was $1.2 to $2 million — an $800,000 swing. The fact that the fee was fixed, and that he knew throughout the entire process I had no financial incentive to push him toward the $2 million end, created a whole other level of sincerity in our conversations — stress-testing ideas, going back and forth. He landed right in the middle of that range, around $1.375 million. The point is, we were able to have really sincere discussions with no cloud of doubt hanging over them about how I'm financially incentivized in the guidance I'm giving. That was clear from the very get-go. That means a ton to both of us, and to our clients — being able to put our money where our mouth is, with alignment and trust, and give as unbiased as possible advice throughout the process.
Nick (1:04:18): And lest this turn into an hour-long self-congratulatory episode — there is real enthusiasm about the model, and it still feels like an uphill battle in a lot of ways. When we talk flat fee, people look at that full-service $15,000 and it sounds more expensive than two-and-a-half percent, because it's a bigger number, and because we're honest about how compensation actually works — whereas many agents would gloss over it and say "don't worry about that." So even talking about it, there's a risk of coming off as expensive. But for anybody who's hung on this long, hopefully you can really see where the value of transparency, honesty, and clarity comes into play.
Dave (1:05:18): Absolutely. And — lest we seem like we're playing a bait and switch — it's worth mentioning that our flat fee does come with a retainer. We're running out of time to really explain the reasoning behind that, and we'll probably touch on it in the next episode. If you're interested in hearing why, you can tune in to episode three. The retainer makes sense for a lot of reasons, and it helps protect both us and our clients, believe it or not. So we'll dive into that in episode three. It is exciting — and as much as it feels uphill, there's a real sense from different people in the industry that this is going to change over the next decade. The old model... these institutional-level changes take time, but they do happen. So it's fun to be here in 2026 talking about all this, and I like to hope, on the cutting edge of making the industry a little better for consumers.
Nick (1:06:36): A hundred percent. If you just can't wait until next week's episode for us to dive in further — thetartanteam.com. I've spent I-don't-know-how-many hours trying to make things as clear as possible.
Dave (1:06:51): More than one, let's say that.
Nick (1:06:53): More than one — less than a million. There are some great calculators and explainers on there that help explain what we're doing. But of course the very best way for us to explain is to apply it to your situation, so there are also links on the site — we'll put one in the show notes — to book a free consultation. We'll dive into your situation, ask some clarifying questions, make a recommendation, and just talk about whether it's a good fit. Appreciate y'all coming along with us on this journey. This has been another episode of Disclosures. Before you go, please subscribe to the show. If you've got thoughts, leave a comment, leave a review, share it with somebody if you found anything interesting — all of that helps the algorithm push us to more aligned clients we can hopefully serve better than anyone else in Clark County. That's the goal. All right, y'all — we'll see you in the next one. Thanks.
Nick (1:08:01): There it is.