Kaplan Launches Buyer Agency Professional Designation to Help Real Estate Agents Navigate Looming Major Changes to the Industry’s Business Model

Rhea-AI Summary

Kaplan introduces Buyer Agency Professional (BAP) designation amidst real estate industry changes due to a federal court ruling. National Association of Realtors settles class action lawsuit, shifting commission payment responsibility to buyer agents, potentially causing friction.

Insights

Real Estate Analyst

The introduction of the Buyer Agency Professional (BAP) designation by Kaplan is a strategic response to the recent court ruling that alters the traditional payment structure for buyer agents. With buyer agents now required to negotiate their commissions directly with clients, the real estate industry faces a paradigm shift that could influence the behavior of both agents and clients.

From a financial perspective, this change may initially create market friction, as clients adjust to the new responsibility of paying buyer agent commissions out-of-pocket. This could lead to a short-term decrease in transactions if buyers are reluctant to incur additional costs. Conversely, the transparency in commission negotiations could empower buyers, potentially leading to more competitive pricing and a long-term increase in market efficiency.

Moreover, the BAP designation could become a differentiating factor for buyer agents, potentially raising the standard of service and professionalism in the industry. Agents with this designation may command higher commissions, reflecting their enhanced expertise and value to the client. This could lead to a bifurcation in the market, where certified agents cater to a premium segment, while others compete on cost.

Consumer Behavior Specialist

Understanding the impact of the new commission structure on consumer behavior is key to gauging its long-term effects on the real estate market. With buyers now directly responsible for agent commissions, we may see a shift in how consumers approach the home-buying process. Buyers might become more discerning, seeking agents who provide substantial value or opting for less traditional services that offer lower commission rates.

This could accelerate the growth of online real estate platforms and alternative service models that have been gaining traction in recent years. As consumers become more cost-conscious, these platforms could see increased usage due to their often lower fees and innovative approaches to home buying and selling.

Additionally, the increased financial burden on buyers could impact overall demand, particularly among first-time homebuyers or those in lower income brackets. It will be important to monitor how this change affects the broader housing market, especially in terms of home affordability and accessibility.

Market Research Analyst

From a market research perspective, the introduction of the BAP designation and the shift in commission payments is likely to have significant implications for the real estate industry's competitive landscape. Agents who quickly adapt to the new model and acquire the BAP designation may gain a competitive edge, attracting clients who value certified expertise.

Long-term industry trends will likely include consolidation as agents who fail to adapt to the new payment structure may exit the market, while larger firms with the resources to invest in training and certification could gain market share. Additionally, the change could stimulate innovation within the industry, with new business models and technologies emerging to cater to the evolving needs of both agents and buyers.

It is also possible that the traditional commission-based model could see a decline in favor of fixed-fee or subscription-based models, as the industry seeks to align with the new consumer payment expectations. Tracking these developments will be important for stakeholders to understand the evolving dynamics of the real estate market.

FORT LAUDERDALE, Fla.--(BUSINESS WIRE)-- Kaplan has launched a Buyer Agency Professional (BAP) designation to help buyer agents succeed as they face a drastically different real estate business model on the horizon. A landmark federal court ruling in October 2023 has resulted in the National Association of Realtors announcing on March 15, 2024 a settlement in the class action lawsuit, upending a system in place for generations and shifting the burden of how buyer agents get paid to buyer agents themselves. Now they’ll have to negotiate their commission with their clients, who will have to pay them directly, potentially causing significant early friction. For more than three decades, in most states, the business has worked like this: Seller agents and buyer agents split a commission based upon the final price of the home sale, pre-decided on and paid for by the seller. The home purchaser generally has never had to even think about this part of the process…until now.

Among the skills that real estate professionals will learn in the eight-hour, live online course:

• Buyer Agency and Responsibilities: Learn the responsibilities of a buyer agent.
• Unique Value Proposition: Create a compelling buyer agent value proposition that fits your style and demonstrates your value to potential buyers.
• Professional Fees: Find out the steps to secure your professional fees, including who can and can’t pay you.
• Service Menu Approach: Create a menu of services that allow you to deliver the services the buyer needs.
• Professional Service Agreement: Learn what this is, how to use it, and when to use this type of written agreement.

“On a scale of 1-10, the National Association of Realtors’ decision to change how commissions are secured is a 10. This is by far the biggest change to hit the real estate industry in more than 30 years, and has added a new dimension of uncertainty among agents on how they are going to secure their fees when representing buyers. That’s not good for them, their clients, or the market. The Buyer Agency Professional (BAP) designation not only educates agents on the best processes and tactics to use when securing their fees, but also teaches them how to compete and market their services to get ahead on this significantly different landscape,” said Toby Schifsky, vice president of real estate education, Kaplan. “We also believe that potential buyers are going to look to hire agents who have this designation, as it demonstrates both their command of the new buyer representative/agency model and commitment to excellence.”

Upon successful completion, agents will receive their BAP designation and a digital badge to use in their marketing efforts.

The course launch comes amid a potential rebound in the real estate market, with sales of previously owned homes on the rise in January and mortgage rates creeping down. The increase in sales helped boost home prices compared with a year earlier for the seventh consecutive month. And the national median sales price rose 5.1 percent from January last year to $379,100 — the highest median sales price for January on records going back to 1999.

The Buyer Agency Professional (BAP) course is now open for enrollment.

About Kaplan

Kaplan, Inc. is a global educational services company that helps individuals and institutions advance their goals in an ever-changing world. Our broad portfolio of solutions help students and professionals further their education and careers, universities and educational institutions attract and support students, and businesses maximize employee recruitment, retainment, and development. Stanley Kaplan founded our company in 1938 with a mission to expand educational opportunities for students of all backgrounds. Today, our thousands of employees working in 27 countries continue Stanley’s mission as they serve about 1.2 million students and professionals, 15,000 corporate clients, and 3,300 schools, school districts, colleges, and universities worldwide. Kaplan is a subsidiary of the Graham Holdings Company (NYSE: GHC). Learn more at kaplan.com.

Note to editors:
Kaplan is a subsidiary of Graham Holdings Company (NYSE: GHC)

X: @KaplanEdNews

View source version on businesswire.com: https://www.businesswire.com/news/home/20240320127181/en/

Press Contact: Russell Schaffer, russell.schaffer@kaplan.com

Source: Kaplan

FAQ

What is the new designation launched by Kaplan in the real estate industry?

Kaplan has launched the Buyer Agency Professional (BAP) designation.

What led to the changes in commission payment responsibility for buyer agents?

A federal court ruling in October 2023 resulted in the National Association of Realtors settling a class action lawsuit, shifting the burden of commission payment to buyer agents.

How will buyer agents have to negotiate their commission under the new system?

Buyer agents will now have to negotiate their commission directly with their clients, who will be responsible for paying them.

What impact could the new system have on buyer agents and their clients?

The new system could potentially cause significant early friction as buyer agents and their clients navigate the new commission payment structure.