Home : Blogs : J Philip Faranda : J. Philip's Westchester Real Estate Blog (914) 723-8900

Use Your Buyer Agent. That's What They're Paid For!

Most consumers sort of understand how real estate works. These days, if they see a home they are interested in, they'll contact their buyer agent and have them arrange a showing. If that is THE place, that agent writes the offer, guides the transaction, and gets paid at closing. It is an uncomplicated process, and one that the vast majority of souls who have mastered walking on their hind legs grasp.

However, there is a misguided minority of prospective home buyers who, due to either ignorance or selfishness, don't get it. Ignorance is not their fault. Selfishness, however, is. This past Sunday I received an email from a new buyer who saw a property on my IDX site that they wanted to see right away. I emailed and called them a number of times, and several hours later I got the following response:

Thanks

Our realtor decided not to go out of town so we will continue with him
Thanks so much anyway
David

I actually breathed a sigh of relief that I did not waste my time re arranging my Sunday to accommodate them, only to find out that I was a pro-bono tour guide for the day. These people do not understand that real estate agents are not interchangeable. If I had shown them this property and they used their agent to buy it, I would have had the double whammy of losing not only that commission, but whatever I would have earned spending my time in a more productive endeavor.

I averted a disappointment. One of my licensees was not so lucky this past week. I referred a buyer email inquiry on one of my listings to him, and he contacted the prospective buyer to set up the showing. At the showing, a "friend" accompanied the buyer, who identified herself as a licensee. Not so much as a business card. A friend. Of course, this "friend," a week later is now claiming to be the guy's agent (she didn't even set up the original appointment) and entitled to the commission. There is no meeting of the minds yet, but guess who the buyer keeps calling and emailing? You guessed it, my agent.

This "friend" is not a board or MLS member, has not produced any representation or agency paperwork, and hasn't adhered to the usual protocols when a buyer oversteps their agent. She is a licensee; that much has been verified. But she did nothing to earn her fee! She didn't set the appointment, write the offer or hold the buyer's hand this past week! If this deal goes together, I'll have to jump through extra hoops to avert a mess, and my guy has a baby due in a month.

If you are buying a home and use an agent, use your agent from the start. You have no idea the can of worms you'll open by not doing so. Agents are NOT interchangeable. We are not free tour guides, and we have mouths to feed just like you do. Think about that before you ask for our time.

J. Philip Faranda, Broker-owner, J. Philip Real Estate, LLC. 2010 Vice President, Westchester Putnam MLS. Read my short sale bog here. J. Philip Serves Briarcliff Manor, Ossining, Croton, the River Towns, Westchester County, and the bedroom counties of New York City.

Subscribe to the 40 Somethings Group. Reach Phil at (914) 723-8900.

Posted by J Philip Faranda on 09/30/2009 08:01 AM

Comments (56)

Buyer Agents in the Home Buying Channel

buying a westchester home, westchester real estate market, buyer agency, using a real estate agent, top westchester realtor

Originally posted at: J. Philip's Briarcliff, Ossining & Westchester Real Estate Blog: Use Your Buyer Agent. That's What They're Paid For!

Post is included in group: War Stories
Post is included in group: The Vent
Post is included in group: The Ninety-ninth Percentile
Post is included in group: Diary of a Realtor
Post is included in group: ActiveRain Rockstars

56 Comments on Use Your Buyer Agent. That's What They're Paid For!

SEP

Couple of thoughts here.

If the offer is presented by the "friend", by accepting the offer, it would be assumed that, since they are not a member of the MLS, that their buyer was paying their fee. Yep.

That said, if they are not a member of the MLS, there is no reason to pay them the co-op offered to the buyer's agent.

Put that in their pipe and see if they can smoke it.

In fact, unless the offer and accepted contract included a request by the buyer and acceptance by the seller for the seller to pay the buyer's agent, I wouldn't say a word about a buyer's agent's fee. Get to the settlement table and see what justification the agent can produce to show that they are entitiled to the co-op.

I would simply tell them that, since they are not a member of the MLS, the offer of compensation therein did not apply to them and that the seller's agent assumed that the buyer was paying their fee.

Speaking from experience, I have proceeded in the above manner two times. Surprise, surprise. At no time would I jeopardize the seller's ability to sell the home. Just putting an agent on notice that they need to get their act together. Since they are not a board member, the consumer, nor the listing agent and seller have the benfits of knowing that the buyer's agent has even read the COE.

Ditto Lenn...assumptions can go both ways and I wouldn't hesitate to let it play out to the closing table. The buyer wants the property more than he wants to assure his "friends" paycheck.

Thank you for the very interesting post. i totally agree with Lenn. I never cease to be amazed at the way some agents try to exploit their "friends".

A couple of years ago I had a buyer call and wanted to see a home in my neighborhhod and I was the local expert. After a 10 minute discussion she let loose that her Uncle was a Realtor. So after a little digging I got the answer I needed. Oh my Uncle said to find a local Realtor to show me the property and then I could go with him to write and make the offer. That fact that this was a Raeltor not even a friend blew my mind! Apparently the Uncle did not want to drive 50 miles just to show one home. I said no thanks in the politest possible way. We meet all sorts in this business.

I, too, agree with Lenn. If you don't belong to the MLS, first of all, WHY? and secondly, too bad for you! You are not getting my commission. By the way, I am sure this is not anything new, but one of the first questions we ask a buyer is "Are you working with another agent?" before we get into any sort of conversation, much less a car.

My partner and I just fired a cash buyer last night that was a referral from someone we trust in the industry. After spending weeks, researching, emailing, contacting hime, 4 hours scheduling and setting up an all day buyers tour, driving him around all day he casually mentions that he will be going out with another agent later in the week. While discussing the problem we have with this he admitted that we had 'already done more for us then he expected', and he 'wasn't that impressed with the other agent'. To him agents and their time were a dime a dozen. Since he isn't willing to sign a broker agreements we are done working with him. Our bad for not getting one prior to spending time with him (mistep because we 'assumed' his loyalty because of the source of the referral).

My heart goes out to your agent. But, this also demonstrates the need for a Buyer Agency Contract. If he is still communicating with the buyer maybe he can convince her to sign one now. After all, he seems to be the one doing all of the work. Buyers aren't going to get this on their own. They have to be told.

Also, no agency disclosure? Here that is mandatory before showing anyone a property. It sounds as though this friend has no paper trail and should be fair game for a procurement issue. But, I know how unpleasant that can be. Good luck.

Thanks for posting this Philip. I don't necessarily think that it is selfishness on people's part as much as it is willful ignorance. They choose not to understand the process, or fein ignorance. And shame on other agents who slough off their work on to other unsuspecting agents and then expect compensation. We've had several calls from prospective buyers who tell us their agent cannot make the appointment and told them to call us to show the home. We politely tell the buyers that if we show them the home we will be entitled to the compensation should they choose to purchase said home. And then we ask them if want to proceed, knowing that they are going to be leaving their agent high and dry. Often times that gets them to get their agent off their behinds to show them the house. Best of luck to you.

"pro-bono tour guide" I LOVE this phrase! I don't know if I am just getting grumpy in my old age, but if a Buyer won't sign a Buyer Rep agreement, I would rather stay home and play with my dog than act as the possible pro-bono tour guide:)

you can argue all day about commissions etc. but why put yourself in that position if you can avoid just ask are you working with anyone before you go any further. The public or prospects sometimes are not just ignorant but just inconsiderate.

The IDX sites can be confusing to the average person trying to figure out who is who.

I guess these misunderstandings are part of the price of having those sites. You just have to be able to weed out the time wasters and hopefully get enough of the buyers who can actually be good clients.

At first contact, I ask "Oh, by the way, are you working with any other agents?" A little hard to do via email, but this question has saved me quite a bit of time & frustration.

BUT I have had a customer recently who said "No, I'm not" and then wrote an offer with another agent, with another office. After my team had shown the house 3x to this specific customer. (venting does feel a little better)

The public is learning, but they don't understand. Most in my area think Realtors are "employees" and driving a company car, too! Lol

Is the lesson here.... Be wary of Sunday afternoon calls for showings?!

Between the two of you, Philip, you and Lenn provided sound advice. Why the buyer brought the person along is anyone's guess, but for that agent to not have buyer-brokerage signed and insist on being paid a commission is absolutely absurd.

As usual, I too, agree with Lenn. I'm glad she weighed in because I was anxious to have my opinion confirmed.

I once closed a deal working as a dual agent. No other agent involved. A few days later, a local Realtor (Yes, actually a member of our local MLS) called to say the buyer was her sister and would I please mail her a referral check. HELLOOO. Referral check?

Believe me, I love referrals and gladly pay the fee when I get a referral. Send them on! But this agent simply thought that by virtue of being related to the person (who never once mentioned she had a sister in the business) she should be paid.

People drive me crazy some times! You are absolutely correct: You saved yourself a big headache by avoiding those people.

Wow. Imagine the email their Realtor received: Hey, since you are going out of town, we decided to use another Realtor to help us.

The poor guy or lady probably had to cancel his plans because of these folks.

People can be very demanding. We do have a life, and do go on a vacation on occassion. If I was that realtor, I would have at least made arrangements for someone else with my brokerage to handle the client for the weekend though. Buyers don't want to miss out on something just because of our schedule, and that is understandable too.

Go Phil - i totally agree we are not tour agents where you can buy us a $ 3.00 burger to compensate for a $50.. tankful of gas for an area tour.... get with it buyers....

J Phillip, good post. I had a buyer that called another agent when she couldn't get me yesterday morning. She called around 8:30 am (I was in the shower). I returned the buyer's call, and after talking about some listings, she informed me that she had called another agentr in my office. It worked out as the agent found out the buyer was working with me.

I feel that buyer counseling session prior to showing buyers a home helps to resolve most of the buyer agency issues.

perfectly said....trying to make a buyer understand sometimes has to be put in first grader terms. blessings

Philip, I especially like your not interchangeable thought there. Very, very true.

A couple of weeks ago, I received a call from a potential Buyer wanting to see a property. I asked whether she had representation and she said yes but her Realtor was far too busy just to show a house - so could I. I told her since she had an agent she should deal through him. What I'm not busy???? Buyer agents should educate their buyers about home buying etiquette.

It seems like these type of situations are growing more frequent ... desperate people, desperate times, desperate measures ... none of which work when attempting to squeeze commission from a professional who knows and understands the process. What is the term: No Deal!

Amen to Lenn. Once again, she gives sage advice from a position of experience. I would act as if the "friend" doesn't exist, make sure your guy documents all inquiries from the buyer to prove he was the advisor/agent in the transaction, and wait for the "friend" to create a stink at the settlement table.

How is that going to look for the buyer when he knows he used your agent, and the "friend" is the one being the fly in the ointment? Not really a friend after all, was he/she?

I hope my friendship is worth more than this....

Patricia

Wow, what a sad story. I have to agree with what I have read from a few different people above. There is no way this lady has earned anything, & I would also document everything that has happened, so that if it is needed, your agent will be the one who is ready.

Agent hopping is a common thing with buyers. If they live in the area and you provide them with MLS client reports, they go to the location and call the listing agent. If they fly in there is no guarantee that the neighbor on the plane or waiting area is not a real estate agent. The best policy here is disregard absolutely unfaithful and position yourself within a certain real estate niche where you can claim superiority. Even absolute superiority, then it becomes much easier. For example I work a lot with Russian buyers and market a whole lot in Russia. Even the bestest of the best of Naples luxury and waterfront real estate agents will be unable to provide a fraction of services Russians require, i.e. buy not only their home, but furniture, cars, start a business, go to Key west etc. All of that in Russian language of course. Now I have a luxury of sending my fellow US compadre unfaithful buyers to the nearest real estate office with no regret.

Makes logical sense.

I know this situation is not fun, but it is a reality of the Real Estate business. I had a buyer who specifically called me to represent them. After some phone tag I received a call saying that they had already found a place with another agent and already in the offer writing process!

This was pretty discouraging, but you can either complain about it for the next year or get up and find more business!

Okay I really enjoyed reading Lenn's response to this. She really knows her stuff! I hope that it works out this way for you with this transaction. Crazy things that people try to pull with commissions!

Phil

Thank you for the line: real estate agents are not interchangeable. That is a simple and succinct message.

I always ask as many questions as I can anymore for example, I've been dragged out on Christmas Eve to show a property to a guy who after seeing the house wanted to know if the sellers would rent as he was moving back to Japan in a year and never planned on buying in the first place.

I understand your frustration. We can do our best to see if they are working with another Realtor, and explain to them the buyers perogatives. I have shown property where a buyers Realtor is out of town. The way I look at it, my primary job is to represent the best ineterest of my seller. What my objective is not, is to work to get both sides of the commission.

One of the first questions I ask of a Buyer when they call me is, "Are you already working with an agent"?

If the answer is yes, then I tell them that they need to contact them.

It's funny that everybody says they ask their client if they are working with another agent....don't we all and then 3 weeks later guess what.... here comes that agent that they said they were not working with!

I don't think some people understand commission only salespeople. Sometimes I think people assume we go to an office and recieve a weekly paycheck just like them.

Phillip-Great post. I never used the Buyer's Agency agreement until six months ago and will continue to use it regardless of who the buyers are. I have been burned several times by clients who are not honest with you. I too, have run into many who think we are on a payroll somewhere. Many think we get paid no matter what. WE need to educate our clients on how WE are compensated. I always love to hear what Lenn's perspective; she is almost always dead on target.

Great post Phillip! Topic like this should be featured once a week.

If the agent does not belong to a MLS board that you are advertising on... no co-broke can be assumed.

Another thought. A while ago I showed one of my listings to a buyer who said NO she was not working with another agent. I did indeed rearrange my schedule and show her the house. At the house, again, I asked if she was working with an agent--and she replied NO. She even set up a 2nd showing so her husband could be there. We emailed back and forth, and when the time came to make the 2nd showing, another agent called me and said there was a mix-up and she was their agent.

She did write an offer--and it was rejected. But it tought me a lesson. I now have BUYERS sign a paper when I show them a home stating they understand I am showing them the home and that they have no agent. If they choose to bring an agent in later, I will not pay him/her.

Interesting post & comments. I not only ask if the buyer already has representation, at the first meeting I give them agency documents and explain what I expect of our relationship. They understand that I'm working for them, no other agent. And of course if they don't like me down the road, the can always fire me ;-).

"Most consumers sort of understand how real estate works. These days, if they see a home they are interested in, they'll contact their buyer agent and have them arrange a showing. If that is THE place, that agent writes the offer, guides the transaction, and gets paid at closing. It is an uncomplicated process, and one that the vast majority of souls who have mastered walking on their hind legs grasp."

I cant believe you really said that

Lets see if I understand it (although Im getting old, I can still walk on my hind legs)

the customer picks out a home, a buyers agent unlocks it;
The customer makes a decision, The buyers agent fills in some blanks on a pre printed form,:
and the buyers agent guides the transactiom. (whatever that means.)
And for that you get paid,

it seems to me that if you present your self this way; real estate agents are interchangable.

I feel a blog coming on.."what do buyers agents do to earn those high commissions??" Hint: it's not just unlocking doors

I think you opened a can of worms. We as agents need to educate the public. Perhaps a buyer consultation explaining the role of the buyer's agent.

What about during the initial phone call the question, "Are you currently working with an agent?"

Just a few thoughts....

Ron- Baseball players run the bases counter clockwise. That's how baseball works. That doesn't explain the whole game, just how it works. My post wasn't meant to encapsulate our industry, just trying to educate the public as to what direction they need to run the bases.

Thanks for sharing this blog post J. So far I've not had any bad experiences, but am being cautious and trying to ask as many questions as possible, before hand, after hearing all the "terrific" buyer stories from agents.

I like the phrase "Pro-bone tour guide" .

Buyer Agency prevents all of this.

I could tell a dozen stories about buyers calling on my listings because their agent was out of town or otherwise unavailable. I really wish that I could tell them to get a better agent, but I don't.

OCT

If they are not a member of the MLS or any MLS in your state their is no obligation to pay.

We got an inquiry yesterday a 900K buyer, asking for information on a home they saw from our IDX. One of my buyer agents did the research, and then asked if he would like to see the home.

"oh, I have a Realtor, just don't want to bother him." I do the research for him.

So my buyer agent said, that is fine, you can continue to use the site, but your agent will need to do the research.

I'm confused - WHO wrote the actual offer?

I don't mind showing MY listings to a Buyer if their Realtor is out of town, because I'm representing my Seller's interests.

Phil, I hate to say this, but sometimes agents/brokers are at least partially responsible for how buyers/sellers treat us. If a buyer calls you for one of your listings, you should make sure that they have a buyers agent representing them (even if it's someone that you set up).

They may be fishing for commission cuts by going directly to the listing agent. If they think that they won't get it, they stick their own agent in and try to get something from them.

Too many times, agents just assume the position of a buyers agent without first finding out if the buyer is already working with another agent. This happened with me recently. Another agent came "as a friend" to help one of my clients (btw, they knew each other, but they were not friends). He never asked her if she was working with another agent. Needless to say he was unhappy when he found out and I was unhappy that he was trying to hijack my client.

Has the buyer signed an agreement with another agent? Is the buyer working with another agent but has not signed any agreements? Does the buyer need someone to represent them as a Buyers Agent?

I agree with Lenn. If they don't understand how it works, you need to explain it to them. Education is part of our job. Most civilians don't understand how this process works. It is up to us to help them "get it".

We had a similar situation. A buyer brought her friend along. After the 3rd home, she said well my friend here is also a Realtor and I wanted to make sure I got all the facts. Well we furious, but we didn't show it. Why would she call us to show her homes, do all the facts and figures ect? Turned out the next day she made an offer on the home through her "friend". We did all the searches, drove 60 miles or more showing her and her friend these properties...I don't think it was ignorance, just plan nastiness...of course we have moved on...but these things happen all the time to Realtors.

Great post. I think you are putting something out there that needs to be read and understood. It does come down to being up front on what our job entails to the client. Most people respect an honest straight forward approach and that approach usually can avoid misunderstandings.

I talk with my clients about using me as their agent and usually discuss the broker buyer agreement at the intitial consultation.

I think a lot of buyers don't understand how we work or how we are paid and need to have it explained to them.

OCT

It's like ethics.....some people have it and some don't!

Patricia

OCT

It really is a misunderstood business model. And some of y'all propagate it. Usually in the interest of double dipping both sides of the deal.

Clients are confused about who is representing who and who they need to be talking to.

Fortunately, during my first purcchase experience, I found an Exclusive Buyer's Agent. It was wonderful. He spent the time needed to make sure I understood how it worked. I haven't had any problems, and neither have the agents representing me on subsequent purchases.

Gotta Educate The Consumer!

Leave a response…

Name:

Email:
(optional)

Comment:

What does the graphic say?