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Exclusive Buyer Agency Agreement when to sign?

By
Managing Real Estate Broker with Fathom Realty PB00068179

Okay it's time to ask.  I've approached it several ways and I know I've lost out either way I've gone.  I have been told to go about it several ways and I guess now is as good as any to discuss the variables so why wait:

•1.    During class I was told after first contact and before you first show a property to have a prospective client sign an Exclusive Buyer Agency Agreement to protect you (agent).

•2.    After class and passing test I spoke to several agents and most of them have never had a client sign the form and some have always had a client sign the form.

•3.    I have actually lost clients because I will not show property until they agree and sign the form.  In fact after sending the form to some clients I have never heard from them again.

My thoughts are if the client is not going to sign the form to protect me just on the property I will tell them or show them and believe me it is thoroughly explained to them (client).  Then they will likely bypass me and go directly to the listing agent. 

Even if the client does not buy a home with me by signing the form I will bust my back side for that client and do whatever it takes to find that property.  So tell me what you think I'm interested to know although I've lost about 3-5 buyers I feel they would have dropped me in a heartbeat as soon as they would have found the right property.  Let me know I'm all ears until then remember "It's a great day to buy or sell a home."

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Comments (6)

Sally English
The English Team - Atlanta, GA
Sally English Atlanta Real Estate Agent

You correctly assessed the delimma.  I am still juggling this one.   Needs to be a soft sell but have to get a signature to protect yourself. 

Aug 26, 2009 12:03 AM
Richard Iarossi
Coldwell Banker Residential Brokerage - Crofton, MD
Crofton MD Real Estate, Annapolis MD Real Estate

James,

I use a one day Buyer Agency Agreement to start. We get to feel each other out to see if we're interested in working together.

The one day agreement is pretty non-threatening. If we do decide to work together, the next agreement is for 30 days, or more.

Rich

Aug 26, 2009 12:09 AM
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

James, I have to agree with you. With properly educating the potential client and explaining the benefits of a Buyer Broker Agreement, most people will sign one. The agreement not only protects the agent, but it also benefits the client. I'm usually up front when asking. I'm sure I may lose some buyers, but in the long run I believe it saves a lot of time for both parties. Like a listing agreement, the length of the agreement depends on the market.

Aug 26, 2009 12:35 AM
Donna Schoby
Liberty Bank of Arkansas - Bentonville, AR

James~ not a Realtor, but it seems to me that buyers that will not sign such an agreement may not be totally committed to buying in the first place. Just my 2 cents!

Aug 26, 2009 06:41 AM
Anonymous
Janine J Wilson, CEBA-M, CEBA, ABR, CRB, GRI, SRES, e-PRO

I think that one problem is that Buyers are being told by agents in states they are leaving, NOT to sign an agency agreement with a buyer agent.  I just had a buyer tell me his FL agent explained to him that some states, such as ours in TN, have Exclusive Buyer Agency agreements, but the agent is NOT an Exclusive Buyer Agent.  According to NAR's 1993 publication,  "Agency Choices, Challenges, Opportunities,"® (p. 25), Exclusive Buyer Agency is defined as follows:

"Exclusive buyer agency - The practice of representing only buyers and never sellers in a transaction. The company never lists a seller's property and thus never has a seller as a client."® NAR

Many states are confusing customers/buyers by using the term Exclusive Buyer Agent/Agency (EBA) Contract or Agreement in a very deceiving way, which violates NAR's COE (Code of Ethics).  Instead of the buyer signing a TRUE EBA agreement, this misnomer only locks the Buyer to the Buyer Agent who may at some point have a conflict of interest or may default to another Agency type during the so-called representation.  The entire COMPANY is NOT committed to the buyer ONLY UNLESS the COMPANY is an Exclusive Buyer Agency COMPANY.... meaning NO ONE in the company ever lists a property or represents a seller.  This eliminates the conflict inherent in Selling agencies. 

It is easy for True EBA's, Nationally Certified EBA's (a.k.a. CEBA's), and the higher, more experienced "Master Level" CEBA-M to explain that CEBAs are giving a service like no other. The CEBA (or CEBA-M) is committed ONLY and ALWAYS to Buyers!  We are proud to be Realtors, and and we are proud to be EBA's!  We have the best of both worlds :)

For more information, see our website at www.TNBuyerBroker.com and/or go to the www.NAEBA.org website

Janine J. Wilson, CEBA-M, CEBA, ABR, CRB, GRI, SRES, e-PRO, 2008 TN/VA MLS President, serving the Tri-Cities TN areas of Johnson City, Kingsport, Bristol, Tennessee/Virginia (Northeast TN's 6 Counties) as the area's ONLY Nationally Accredited Exclusive Buyer Agency for 15 years!

Aug 27, 2009 08:40 AM
#5
Nicky Dou
Collier & Associates - Fayetteville, AR
The BEST REAL ESTATE AGENT in Northwest Arkansas

After some of the buyers I would like to ask for a non refundable deposit for gas LOL! Just kidding - no really, James - I do not usually get the buyers rep signed up front - never have probably should but I feel that if I do my job and properly explain how things work that they will not bypass me - plus they will want to work with me because I do bring value to the table. All in all - if they do not want to work with me - I do not want to work with them. So far I would say I have maybe had 1 case in which I got burned on this - but probably better than losing out on some buyers... just my 2 cents.

Sep 03, 2009 06:30 AM