I Hope I Didn't "Steal" Your Buyer!! I was just doing my job.

These are some very interesting comments showing that, once again, all real estate is local. And, practices are so varied.

My first two transactions, years ago, were without buyer agency agreements.  After that I started using them and have never worked with a buyer without having an agreement signed. But I market myself as a buyer broker so I think people actually expect to sign an agreement.

With regard to the buyer in question, he called you and you asked the appropriate questions. You are fine working with him under an agreement with the exception of the properties he has already seen with another agent. You might, in fact, have a procurement issue with those.

I use a two-step process, generally. I first give buyers an agency disclosure, which is required by California Civil Code. I tell them it's just a disclosure, not an agreement. How they handle signing that sets the tone for our entire relationship.

I had a guy email me several days ago about wanting to work with me to look at homes in East Sacramento. Then, a couple of days later, he called and left me a voice mail, saying he had gone out to look at homes with another agent his wife had located, and he really liked the guy. He had not signed an agreement. I called him anyway; we talked, and now he's back working with me. Did I "steal" him? I dunno. Will I sign him to a BBA? Probably not until he writes an offer.

Can you really steal a client?

Bryant,

Until they sign, they are not your client. It amazes me why some REALTORS don't simply get the document signed. Once this simple act is done, they are YOURS. Would you list a house without a signed exclusive listing agreement?

...and to your question about pursuing them as a client, heck yes. They are interviewing REALTORS until they sign...

-Brent

BB ~ I too like Elizabeth first go over the agency disclosure and highlight where it says its NOT a contract.  This way I can see how they handle that and move on from there.  I don't have them sign a BBA at that point.  I build a relationship first.  If I was in Elizabeth's shoes I would get one signed because they already strayed. 

I recently asked a email client if they were working with a agent because all the sudden they were in town on Friday night and if I could get some answers on a piece of land by Sunday they would like to see it.  I didn't have a good feeling with this couple and they didn't respond to my question so I take that as Yes they were working with another agent so I won't be wasting my time scrambling to get answers so quickly for another agent.  I think you can weed out most of them by asking simple questions. 

Then again, YES I have been burned... haven't we all. 

We see this all the time in this market area.

I look at the BBA from a different angle. The way the law reads in MO, unless there is a relationship agreed upon between buyer and broker in writing, the broker is considered to be working as a sub agent to the seller. If I am working WITH a buyer I fully intend to be working FOR the buyer.

I don't have them sign it at first contact, but certainly before I start running them all over the county showing properties. In this area, several agents won't get them signed because of the responsibility of the agent that goes along with it.

Great thought provoking post BB.

Why ARE we still having to explain this?

BTW, I thought BBA stood for Broker Bryant's Agreement.  :=)

Alan #25. If a buyer won't at least sign an agency disclosure, I will not proceed. To me, it's not enough for them to shake their head, and say, "I understand." I need to be covered. It's only an acknowledgment that I explained agency, it is not a commitment to purchase with me.
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@ Mike (sorry for the mini-hijack BB), since all Illinois requires is the acknowledgement ("I understand"), I'm not going to jeopardize a potential client, by insisting on something that's not required by the state.  Consumers are so gunshy, these days, that we're asking them to "sign some unknown rights away", and I understand that.

Buyers don't always care about our contracts.  I've had several people who told me that they were not working with anyone, but had signed Exclusive Right to Represent.

Last year a past client who I've known for 7 years and worked with frequently, wanted to downsize. She wanted a town home, and would rent her house.  I got her approved for the loan. Then, she told me that she was busy with her church work for a the next six weeks.  After that we looked at about 15 properties and finally wrote an offer on one.

When I submitted the accepted purchase agreement to the loan officer, I got a surprising response. 

"We already have an accepted offer submitted a couple weeks ago with another agent."  Wow!  Not only did she lie to me, she lied to the other agent, and had signed two Exclusive Right to Represent contracts.  So much for her taking time for church work. 

The sad truth is that agents work in a finite market.  Regardless of all the advertising and prodding we do, those darn buyers and sellers just go off and do whatever they want (the nerve!).  We can only nominally grow or shrink the market, the best we can do is fight for our piece of the pie, which means that the bigger our slice, the smaller another agent's slice is going to be.  There will be winners and losers.  In my market, a recent report said there are only enough local transactions to provide a reasonable living for about 20% of the active agents.  Knowing that, I'm amazed that agents continue to share their most effective sales secrets with other agents at office sales meetings.  Is there a rule that two or more agents in the same office can't go after the same clients?  I think not.  I often see two agents from the same office competing with each other - and me - for the same listing.  ANYWAY... When I receive an offer as a listing agent, I now ask for a copy of the selling agent's exclusive buyer rep agreement so that my seller won't be drawn into a commission battle that could hold up closing.

I believe that we should all be getting our clients/customers to sign buyer agreements before showing them homes.  Sure, it may not be the easiest thing to do sometimes, but it's the professional thing to do.  Unless you want to have potential clients stolen from you.  We need to make sure that we educate our buyers so that they understand the advantages of having a good Realtor represent them when viewing homes.  They agreement is there to protect all parties involved.  If they still don't want to sign it after they understand it's benefits, they you probably don't want to work with that buyer anyways!

this is a great post!! keep them coming!

this is a great post!! keep them coming!

Yet another excellent post highlighting the sound business decision of getting an exclusive Buyer Broker Agreement if you are going to work with Buyers.  If you choose not to - that's your call - and also potentially your loss!

BB,

I agree with your basic premise. However, even a signed BRA does not insure the broker will be paid or is it in itself proof of procuring cause. I also think there are other things to consider.

If a buyer enters into two agreements, the "losing" broker has to file suit against the buyer for breech of contract and attempt to recover the loss in court. This is not often done as the bad PR usually creates more damage than the commission IMHO. It's a far better business decision to simply let it go.

I can't speak for Florida but Texas acknowledges that while written is the best way to go, an agency relationship can be created verbally. Given your scenario it will be hard to prove you violated the COE unless the client is willing to testify.

I don't try to poach clients from other agents when they call in on my listings. I always try to send them back to the other agent first. If that relationship is not working out and they tell me they have not signed a BRA, I hand them off to one of my buyer's agents.

As a heavy listing broker, I don't want a bad reputation with the selling agents just to pick up a couple of extra sides a year. 

Tom

John #53,

There should be no commission battle with the seller that would hold up closing. Are you willing to provide the selling agent a copy of your listing agreement?

Tom

I have to agree with the other New Yorkers.  BBA's are not used here, although I think some brokers will eventually start using them. I have had out-of-town buyers offer to sign a BBA. As others have mentioned we have agency disclosure. I disclose and have them sign BA. Beginning Jan 2011 it becomes the law in multi-family apartments even though I have already been doing it for the past year. I've always disclosed but now it has to be in writing.

There seems to be a misconception on activerain (all states are different) that a buyer is not a client but only a customer and there is no fiduciary without an exclusive contract. They are two different issues. On our state agency disclosure form it clearly states This Is Not A Contract.

I represent the buyers interest and have a fiduciary duty to them, but it is per transaction and not an exclusive contract. In fact, my agency relationship can change during the course of finding a buyer a home depending on the properties I show. It may become a dual agency with designated agents if another agent from my brokerage is the exclusive listing agent on a property I show.

In Manhattan, we are not members of NAR. We have our own powerful local real estate board (REBNY) The real estate board of New York. REBNY is not affilliated with any national trade association. REBNY has it's own COE and very specific rules that apply to NYC real estate and our very unique housing market.

Our board rule is that the consumer has the right to work with or have any agent they choose represent them. For example, If a buyer goes to an open house on Sunday on their own without an agent and they call me Monday morning that they want me to represent them, I will. Consumers have the right in New York state to have buyer representation. If they have not started negotiating with the listing agent, I gladly will represent them. It's irrelevant how they found the property. I've also had buyers come to my open houses, un represented, I disclose I represent the seller but I treat everyone fair and honestly. They often have come back 2 or 3 times unrepresented and then bring in an agent because they have that right.

On the other hand, as you point out, state laws trump board rules, so procuring cause is the bottom line. However contrary to popular belief, showing a property or a buyer finding the property is not procuring cause. It is series of events without a break.

A wise agent several years ago told me: "you want loyalty? get a dog, You will never get it in this business"  IMHO loyalty is earned it can't be forced on someone with a piece of paper.

Bryant, this is so funny. I had this happen to me, where I was already working with a lead and about to sign a BBA with them, when they called my office and the floor agent promply presumed that the caller was exclusively "their" lead. I don't think so...she got over it after awhile.

I like the comparison to the Exclusive Seller's Agreement.  I hadn't had it prese ted to me like that before.  It makes perfect sense.  Thanks  margaret C.

This is GOOD stuff!  Thank you for the new perspective on the BBA!  I agree 110%!!