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Question About Buyers Agents For Buyers Agents or Employers of Buyers Agents

By Brandon Hoffman

Real Estate Broker/Owner with RE/MAX Connected 54894

October 15, 2007 03:19 PM

I am in the market for a new buyer specialist and I got the inspiration to post here thanks to Carl Berg's http://activerain.com/blogsview/237041/How-much-do-you . My buyer specialist who gets most of my buyer leads will be moving back to where she grew up in about 6 months so I've starting leaking the word that I'll be hiring another buyer agent soon.

I currently pay her 50% on all of her closings where I give her the leads (they close in my name). If she generates the lead I pay her 25% on listings (so if she generates the buyer lead and closes it she gets 75%). She is a single mom so it works because she doesn't have to worry about prospecting. Most of the buyer leads I set an appointment and sign the agency agreement/get them pre-qualified. At that point I turn them over to her and she shows and takes them contract to close. Sometimes she has a unmotivated buyer and I make her call them once a week or every 2 weeks. She has to work a little harder on these but I figure that's her job. I also paid a lot of her dues for her up front (NAR/MLS/E&O). All in all, for what she puts in I think she has a pretty sweet gig.

I would like to know what some of the other systems and payment methods for buyer agents you have used and how successful you been with them. I may do things a bit different with my next agent so I would like as many opinions as I can get. Thank you!

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Karen Anne Stone

New Home Hunters of Fort Worth and Tarrant County - Fort Worth, TX

Fort Worth Real Estate

Brandon: It sounds like your current system is working so well with this agent. Why would you change something when it is working so well ? If it ain't broke, don't "fix" it... as the saying goes.

Oct 15, 2007 05:32 PM

Gita Bantwal

RE/MAX Centre Realtors - Warwick, PA

REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

It looks like a fair deal. Wish you good luck. It is a buyer's mamrekt and you will need a good agent.

Oct 16, 2007 12:37 AM

Carl Berg

ERA Wilder Realty, Inc - Columbia, SC

Karen - I think Brandon is looking for different options. If you do not learn about what else is out there you are pretty much putting yourself in a box and limiting your overall growth and potential.

Brandon - I think that is a heck of a deal. I mean you set up the interview and conduct the screening process, fill out all the forms with the exception of the contract, get them prequalified, do the farming to get that buyer. Really all your buyers agent has to do is conduct another interview / session (yes can be conducted over the phone) to ensure that she really knows their needs and concerns and show them the (hopefully) 5 houses maybe less if she did a good job screening and LISTENING to them. write the contract and go to closing. I think you also left out in your blog that you go to all the inspections, etc.... Really I think your buyers agent has a heck of a great job. Lets look at it this way.... show 5 houses (3-4 hours on a bad day), write up a contract......we will say she is slow for all intents and purposes (1 hour), 1 hour at closing = 50 %

Now lets look at it from your end of the deal:

Pay her / his MLS / NAR /E & O (- minus your $$$)
Pay for prospecting (- minus your $$$$)
Your time knocking on doors ( - your time PRICELESS)
Conduct the interview and education process (2-3 hours again time priceless)
Get them prequalified (again your time and minutes)
Conduct all the inspections (again minus your time)

Yes Activerain members I do not have a buyers agent, but it does appear to me that Brandon is doing a heck of a lot of work and spending the money to make this happen. Please give him your thoughts.

Oct 16, 2007 11:53 PM

Karen Anne Stone

New Home Hunters of Fort Worth and Tarrant County - Fort Worth, TX

Fort Worth Real Estate

Carl: I seen to remember reading at the top of this post that it was written by Brandon Hoffman. And Carl, in keeping with your above recommendation... I humbly add: Brandon, if you do not learn about how to answer your own comments... you are pretty much putting yourself in a box and limiting your overal growth and potential.

Brandon asked for opinions, I gave him mine. Now, you two have a wonderful day. Take care now...

Oct 17, 2007 04:20 AM

Jeff Payne

The Payne Group at Keller Williams Success Realty - Panama City, FL

Panama City Real Estate

Brandon:

I pay for everything for my buyer specialists except licensing, board dues and continuing ed. I generate the leads and hand them over to my admin who then puts them on an action plan and then gives them to the buyers agent. The buyers agent then works the buyer and upon closing, the buyers agent gets 50% of the buyers side. If they sell on of my listings, they get 70% and if they refer a seller to me, they get 25% referral at closing meaning that if they refer a listing to me and sell it they get 70% of buyers side and 25% of listing side. I do help with qualifying buyers when I am needed and help in any other way that I might be needed.

Carl: If Brandon did everything himself without a buyers agent, he would be the one driving buyers around and showing those 5 homes which is probably alot more than 5. I am assuming that Brandon concentrates on listings; therefore, a buyers agent is very much needed to sell those listings.

Brandons system sounds like a win/win to me.

Oct 17, 2007 05:47 AM

Brandon Hoffman

RE/MAX Connected - Irmo, SC

First to clarify I was working directly with the 2 buyers which Carl mentioned earlier from start to finish. One I would have worked with anyway because I was their listing agent and they were an acquaintance already. The other because my buyer agent started dropping the ball and I didn't want her blowing another easy one so I'm doing it myself until I hire someone. I like for the buyer agent to be present during the pre-qual and paperwork so they meet her upfront. After that, she'll take them to the computer and start looking at listings with them.

Jeff- Thank you. Seems pretty similar set up and it sounds like a good system.

Joe- Thank you for the support. It never hurts to know others think it's a fair system.

Gita- You are correct. I definitely need a closer!

Karen- I was looking to see if there was anything possibly more effective out there. It never hurts to see if I can get some good ideas that I may want to implement up front when I hire someone new. Also, I think your comment was a bit out of line about not responding to my own blogs but I'm going to leave it. It has only been 24 hours and I've been busy w/o a buyers agent. As a matter of fact, it's 8:30 pm and I'm about to leave the office after a 12 hour day.

Carl- Sounds like your system works for you also. That's the great thing about real estate: often there isn't a wrong or right system and I'm glad you explore options also to see if you can find a better way. You will only continue to get better as an agent if you do that.

Oct 17, 2007 12:36 PM

Brandon Hoffman

RE/MAX Connected - Irmo, SC

Oh, and I don't have a buyers agent now. She had some people send her business and rather than follow the guidelines in our contract she thought it would be a good time to split and go out on her own (as in earlier today). I'm not real happy right now but these problems usually work themselves out if you give them time. I get to find someone that will be a better fit for what I expect.

Oct 17, 2007 12:43 PM

Karen Anne Stone

New Home Hunters of Fort Worth and Tarrant County - Fort Worth, TX

Fort Worth Real Estate

Hi Brandon: I am sorry if my comment made you think I was being impatient about you not responding. I am sure you work extremely hard at what you do, and I am also sure that you are very successful. What my comment was aimed at... was that "someone else" took it upon himself to answer for you. I was simply suggesting to him, and trying to do it in a kindly way, that I knew that, in time, you were very capable of responding to your own comments... and not needing "him" to answer for you. Believe me, there was no negative intent whatsoever... directed at you. If you took that to be my intent... I apologize for my poor communication.

I myself have a team, and the different types of compensation for buyer's agents can be as different as the number of agents in question. Each one can be tailored to fit that particular agent's strengths and weaknesses. In my initial comment, I was also trying to say that it appeared that what you were doing with the agent described seemed extremely fair for both of you, and that I was glad it was working well. It truly seemed like a -win-win situation.

On my team... what I usually do is simply provide the lead. My leads usually come from my website... or from my two page ad in Homes and Land magazine. The leads I provice are usually my "overflow"... which means that if I did not have buyer's agents to hand them to... the leads would go to waste.

My "split" for those agents is 70/30. I usually have no additional work involved once my buyer's agent gets them on contract. They do that, process it, follow the loan, set up the closing, pretty much everything needed... and unless they call upon me for help... that ball is in their court.

If you need to bounce any other "split" arrangements off of someone, I would be glad to share my ideas further with you. Take care... and best of luck to you.

Oct 17, 2007 12:54 PM

Jeff Payne

The Payne Group at Keller Williams Success Realty - Panama City, FL

Panama City Real Estate

Brandon, if you are looking for a new buyers agent, check out your local board. Find the agents that have closed a few deals and interview them. You already know that they know how to write a contract and close a deal. By getting someone like this, train them on your systems and give them the leads and they should turn into a success. Just live by one rule, hire slowly and fire quickly so that you don't prolong the agony of a bad hire.

One thing that I did not mention is that I work personally with my wealth determiners and don't give them to the buyer specialist. They are the people closest to me.

Oct 17, 2007 01:06 PM

Karen Anne Stone

New Home Hunters of Fort Worth and Tarrant County - Fort Worth, TX

Fort Worth Real Estate

Ouch ! That really hurts when that happens, Brandon. You take on a buyer's agent, give them leads, all is well, and then something like that happens... and... all of a sudden... they forget how much help you were to them when they needed you ! That really stings. Also... it really stinks, too.

Sometimes... when a buyer's agent has a lead they totally come up with themselves... I have in the past taken back a lesser fee... perhaps 20% or even 15%... in view of the source of the lead. Or, when the buyer's agent is on a hot streak, I might only take 20% on the third closing of the month... and maybe 20% or even 15% on each additional closing... of that particular month.

Having a buyer's agent requires quite a balancing act. If they are doing very well, they can get to the point of feeling they don't need your help at all. This usually does not work out for them, but that remains to be seen.

One problem I had with a previous buyer's agent is that I appeared to make what I was doing look very, very easy. So easy, that the buyer's agent in question figured that "oh, I don't need her... heck, anyone can do that. Of course, that agent left, and then had to face the reality that perhaps there was some talent behind what I was doing. Oh well... live and learn.

Oct 17, 2007 01:08 PM

Brandon Hoffman

RE/MAX Connected - Irmo, SC

Karen-Thank you for clearing up your post. I really appreciate the valuable input and I think you've given some excellent advice there. The one thing I hate about the internet is that it is so easy to misunderstand and I apologize if I offended. I hope that everyone pays attention to to what you said if they intend to grow a team. I have actually given her on the only 3 closings she ever generated on her own more than her split in hopes of motivating her. It didn't work and now I wish I hadn't. But anyway, let me get back on topic because I'm not here to bash anyone. I think your last bit about MAKING IT LOOK EASY applies here.

Jeff- I wish I had that advice sooner!

Oct 17, 2007 01:47 PM

Jeff Payne

The Payne Group at Keller Williams Success Realty - Panama City, FL

Panama City Real Estate

I just hired a buyer specialist with a great customer service background. Super sharp, smart but very little training from her previous broker. She had closed some nice deals in the past few years. I was very impressed with her interview. Long story short, she closed her first deal with me in 3 weeks and has 2 more under contract and is working on a half million dollar contract. I know this might not be the norm but these agents that need some training to succeed are out there.

Oct 17, 2007 01:56 PM

Karen Anne Stone

New Home Hunters of Fort Worth and Tarrant County - Fort Worth, TX

Fort Worth Real Estate

Hi Brandon: Yes... I really regret losing this particular agent. I thought he was doing really well with me. He had a confidence problem, and just him having the ability to call me if he needed to... seemed to make all the difference in the world to him. Then, when he thought it looked so easy... he left. He is on his third company since them. I tried.

Oct 17, 2007 05:20 PM

Carl Berg

ERA Wilder Realty, Inc - Columbia, SC

Jeff,

I never said that Brandon did not need a buyers agent, admin, etc... not at all.

Oct 17, 2007 11:02 PM

Jeff Payne

The Payne Group at Keller Williams Success Realty - Panama City, FL

Panama City Real Estate

Great post, this is a topic that is very relevant to many of our businesses. I am going to post about listinga specialists and how to compemsate them.

Oct 18, 2007 02:03 AM

Brandon Hoffman

RE/MAX Connected - Irmo, SC

I'll have to check in on that listings post as thats foreign territory for me but I'm very interested. I'm not there yet but hopefully within the next year or so

Oct 18, 2007 04:32 AM

J Perrin Cornell

Coldwell Banker Cascade Real Estate - Wenatchee, WA

Broker, ABR, VAMRES

Ok (becasue I am going there) what kind of a split for a buyers agent when the generate the lead and close?

Also what abouot the listings they bring to the table... to keep them from going elsewhere?

Oct 18, 2007 10:11 AM

Brandon Hoffman

RE/MAX Connected - Irmo, SC

Additional 25% for buyers leads giving them 75%.

25% for listings and I do all the work and advertising. They get paid 25% for giving me a name/number/address basically.

It also doesn't hurt to give bonuses for multiple closings per month or multiple listing leads.

Oct 18, 2007 10:56 AM

Christopher Pike, 803.727.7800

Keller Williams® Realty - Columbia, SC

Brandon,

Are you having any luck finding a buyers agent!

Nov 10, 2007 07:43 AM

Brandon Hoffman

RE/MAX Connected - Irmo, SC

Holding off right now. But I did work with a couple of buyers this week and remember how much time it can eat up so I may reconsider and do something soon. My biggest problem is working the leads I get from buyers. I neglect them in lieu of other things so I need someone who'll be diligent with them.

Nov 11, 2007 02:25 PM