You Are Fired! or Not? - Do You Use a Buyer's Representation Agreement?

Always have your Buyer sign an agency agreement, as soon as possible. Why run the risk of doing all that work without some guarantee of payment? No wonder clients take such advantage of realtors! We don't require any commitment from them!

I have actually had this happen. I fire myself. I write up an addendum that cancels and voids the agreement. Most Buyers don't want to work with an agent who doesn't want to represent them for whatever reason. Refer them to someone else. Any contract can be voided as long as it's agreed to by both parties, in writing.

I handle it with professional diplomacy. I try to put things in a positive light. "Mr. Buyer, you really need someone else to represent you. I appreciate you giving me this opportunity, but I think another agent might be better suited to meet you specific needs....

Well, typically, both parties realize when the relationship isn't working out. Most buyers aren't going to want to force someone to represent them.

Randy:

You bring up good points but I'm sure you can address the  "termination clause" in your BAA.

I'm alwyas a fan of the signed piece of paper.  Kind of follows the old saw "good fences make good neighbors" 

Two words Procuring Cause. One result Commission.

In CT it is the law.  We cannot even show a property without one.  So if I am unsure of someone I sign a short term agreement say for one month.  You can even sign for one day if you like.  At least protect yourself on the homes you have shown them.

Every class that I take that deals with this topic, the instructor always says that this form should be used.  I dont agree with asking my buyers (mainly first time military buyers with almost no savings) to sign a form that says they will pay me out of their pockets if the commission paid isnt equal to.......or that they will pay me a commission if they go for a FSBO.  The majority of them only have enough for the earnest money deposit to start with and they are getting ready to make the biggest purchase of their life.  And now I should get them to commit to paying me out of their pockets if they dont comply with the agreement?  Maybe if I was dealing with a different category of buyers then I may be more inclined to use it.

Partner Paul & I work mainly as Transaction Brokers. Occasionally I will have a buyer that insists on a buyers broker agreement and then I use one.

We always use a written Buyer Agency contract when representing the buyer just as we do with our sellers...use a written listing agreement.

If the buyer is a "customer" and not a "client" than all we need is a written agency disclosure stating that we either #1 representing the seller or #2 are acting as a non agent...representing no one. 

 

"preferred REALTOR" taking a deal away, with a tie to a lender that gives a better loan deal?  Sounds like an ethical breach to take up with NAR, not to mention a civil case of tortous interference with a business relationship.  I think it might even be illegal in some states, but I'm not certain (as it effectively is collusion and something like an undisclosed fee sharing agreement).  If you showed the buyer the property, you are procuring cause. 

I like the short-term agreement, and/or one that both parties can cancel.  It's in the buyer's best interest anyway - few would list their home without an exclusive agreement (or the MLS wouldn't even allow it in), why would they do the same for buying - do they really want to tell all their confidential personal, family, financial, etc. details to a whole bunch of agents, only to have all of them working essentially for the sellers whose properties they respectively took the buyer to, instead of whichever one is in the buyer's best interest?

Randy, I agree with everything you say.  I do use the form once in a while.  Really depends on the situation.  Good old clients, never!!!  New one's that wasn't a referral and just got placed in my lap somehow, Yes!  I keep the dates fairly short, about 90 days or so.  This helps with creating a mindset that I'm not here to show you homes forever and it also allows the opportunity to get out of the contract if needed.  Plus I don't ever see myself really acting on these contracts legally, it's there more to help set precedence.

Great write though.

I've always used one here in Idaho, but across the river in Washington, it isn't used at all.  This past week I went to a class in Washington, and the instructor had a really good BRA for Washington that I think I will start using.  Up until the class, I didn't know that one existed for Washington.  I will run it by my broker first.