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Working with Buyers on a wing and a prayer!

Hi folks. Today I want to talk a little bit about our responsibility to ask Buyers and Sellers if they are working with another REALTOR®. Is this something we are obligated to do by our CoE, or not? What do you think?

Here's an example: Last week, a Buyer contacted me by phone to get some information on a couple of my listings. I asked him if he was working with another REALTOR®. He said that he had gone out looking at properties with a REALTOR® the previous week. I then asked him if he had signed an agreement with them, he said "No". What would you have done next?

What I did was make an appointment to meet with him to go over his situation AND to get a Buyer's Broker Agreement (BBA) signed....if I felt I could help him.

The fact that he had told me he had been working with another REALTOR®, the week before, meant absolutely nothing to me. Would it have mattered to you? Would you have missed out on an opportunity to work with a qualified Buyer because you are not familiar with our CoE?

If so, let's clear up this misconception of having to ask the "Are you working with another REALTOR®?" question.

This is what our CoE states:

Standard of Practice 16-9

REALTORS®, prior to entering into a representation agreement, have an affirmative obligation to make reasonable efforts to determine whether the prospect is subject to a current, valid exclusive agreement to provide the same type of real estate service. (Amended 1/04)

What this means is, that as a REALTOR®, I am under absolutely no ethical obligation to ask the question, unless I am in the process of entering into an agreement. Now, of course, it would make good business sense to ask the question, prior to writing a contract to purchase, to avoid a procuring cause dispute, although we are not obligated to.

This also means, that if you are working with Buyers, without a BBA, then they are NOT your Buyers. They are open territory. And chances are, that if they bump into me, they may very well be my Buyers from that point on.

Could there be any better reason to learn how to present a BBA to your potential Buyers and to get it signed before you start spending much time working for them? Here are a few posts that will help with this.

I ain't signin' no frickin' agreement!

Taxi! Taxi! Sorry, not me, I'm a professional REALTOR®!

Sorry....I won't work for that!

Look at this way, if a Seller invited you over to see about listing their property and they told you they had already met with a REALTOR® and had another one coming over in the morning would you hesitate getting them to sign an agreement? Of course not. Buyers are no different. Until they have agreed to work with someone in writing......they are just a lead. What say you?

***Please remember, your State's real esate laws trump the REALTOR(R) Code of Ethics.

FOR BUYER'S READY TO PROTECT THEIR INTERESTS.....VISIT MY WEB SITES BELOW.

Posted by Bryant Tutas Broker/REALTOR(R) Tutas Towne Realty, Inc on 06/05/2008 11:26 AM

Comments (97)

buyers broker agreement, ethics, educational

97 Comments on Working with Buyers on a wing and a prayer!

JUN

2008

Reserved Parking For "The Lovely Wife"...TLW...ROAR!

Blog Boy...

I have to say just cuzz you didn't :)

A Salesperson without a signed contract is unemployed :)

Who am I quoting? Wink :)

TLW...ROAR!

Until an agreement is signed I agree, they are just a lead. If they already have representation, they should be working with that agent. People make this harder than it needs to be. You just have to be up front with people.

Good post.. I totally agree with you.we must get that contract signed..

I would have to agree with you on this Bryant. I am very confident my buyers are with me when they sign a BBA.

BB,

Yep, get it signed, make it part of the process (not optional), eliminate misunderstandings. And now with the New State of Washington Distressed Homeowner and Distressed Home Consultant Laws, the buyers agent must make it clear to the "distressed seller" and the potentially "distressed buyer".

List and Sell (ask the question, get the answer, sign the agreement) Gary @ RentonHomeFinder

Thank you for posting this, Bryant. Good point! Actually, I just read all of Article 16 again and realized I should do this more often. There are a number of really stupid things I have done, causing me to lose business. Yikes!

Hey BB,

Most of my business is listings like yourself and I always ask them that question. Sometimes buyers don't want to sign them. I try to get them to but I'll admit some would rather not. When they don't want to sign them then I know they are afraid. you really have to make them understand it by explaining it. Honestly i rather build the relationship with them first and base it on trust. I've been lucky enough not to get burned maybe twice in my entire 12.5 yrs and maybe because they like me:) Call it old fashion.

BB, I liked the post because it should get everyone on the same page. Sure, it sounds like everyone should be getting their buyers to sign a BBA, but how many are really getting them signed. AJ

If the agent were doing their job, the buyer would never have called you.

I agree with you. I am currently in a situation where a buyer lead went to look at a house with the listing agent. After the showing felt they needed buyer representation. They contacted me and we signed an agreement. Now my buyer clients want to take a second look at the listing they saw with the listing agent. She is claiming procuring cause of course. However I have been told that procuring cause only stands up when there has been no broken chain of events. My becoming their buyer's agent is the broken chain of events and she has no claim on them or the selling side of the commission. I would be interested in knowing what everyone thinks...

BB _ I too agree with you. The situation is no different from a seller asking you over although still considering other agents. Yes it is important to get the BBA signed.

Hey BB - yep, you're right - unless and until they sign a buyer agency agreement with someone, they are fair game and I would have done just as you did. I always ask the question when I get inquiries on my properties, and depending on the answer, I probe further to find out more.

Ann

Before blogging, it was a rare day when one of my new clients had NEVER seen a house with another agent before meeting me. It's part of the agent selection process. How can they choose unless they "date a few" first?

Since I started blogging, I don't have that happen as often as people choose me from the blog before they go out to see property or to list their house. Most times they are calling me first since blogging. But before that, EVERY buyer I ever worked with had an agent before me. Pretty much all of them. But "the buck stops here" and without an agency agreement. I don't use them.

I want to build a relationship based on trust. Why should they trust me if I don't trust them? No agreements unless they want one.

Folks...

Do you know that if Tutas Towne Realty doesn't get a signed BBA we let the Buyer walk? :)

No Contract. No Work. Pretty straight shooting I'd say :)

TLW...ROAR!

I say let them take a test drive before they buy :)

No papers = no Jesse. Sorry, but I'm just not going there.

I hear folks cry all the time about buyers who walked or agents who 'stole' other buyers but the fact of the matter is... "...A Salesperson without a signed contract is unemployed..." Couldn't have said it better myself.

Good info. I have had many agents lose buyers because they are afraid to ask the buyer to commit to a buyer broker agreement. I've recommended to my agents who work with buyers to take the ABR designation classes. They teach about this agreement and how to overcome buyer objections.

You can bet your stapler that if a buyer in North Texas calls me and another agent didn't get them to sign, they are mine, too. If you can't sell a signature, how do you expect to sell a house?

My buyer agent had the toughest time getting them signed until I explained it and made it "Amandatory". Now she has no trouble at all. Imagine that!

I was going to feature this article, but then I realized you've exceeded your 'feature' quota for this year. Sorry!

Oh Bryant, you read my random thoughts today (with writer's block, all I could come up with to write about were my random thoughts!). Anyway, I have a buyer who wants to look at foreclosures...and sometimes the bank won't pay the full amount offered in the MLS. If they sign a buyer's agency agreement, they would be agreeing to compensate me, or pay the difference between what the bank pays and the 2.5% offered in the MLS...I've asked them, but I'm afraid the buyer might walk. Hubby says maybe I should take my chances...I'm torn. This post makes me feel I should stand by my convictions but convictions don't pay the bills either.

BB - Buyer Agency is the road to go but the interview comes first to avoid disaster.

With people nervous about buyer agency contracts (many in NY consult with lawyers before signing, and get nixed), if we can't justify it before getting the agreement signed, then they are open game. It's that knowledge that is motivating- makes it a good thing, contract or not, for buyers, as there is a reason to keep them engaged. There's going to be an unhappy tour guide, BB.

But what if they say they won't sign the Buyers agreement? Get over it and ask for the order or spend $4.00 a gallon and run a taxi for free.

BB,

Sounds like your opinion is the popular one. I only have one slight difference of opinion, yet it's been a while (truthfully) since I've read the COE so I'd need to double check before I shoot my mouth off any more.

As for buyer broker contracts it seems like they're used more effectively in other places than my area of Orange Co. CA. Some do, yet I think most do not. To this day, I've never used one myself. Thinking back on it, I don't think I've ever been stiffed by a buyer in 38 years in r.e., obviously that's an exception. Maybe dumb luck.

I agree whole heartedly...though I'm not that big on pressing people into buyer's agency until they've had a chance to get to know me, I do at my own peril. If they jump ship, I have nobody to blame but myself.

Bob Mitchell

ValueList Real Estate Services, Inc.

JUN

2008

Bryant, I'm always interested in the area practices and agency representation that can vary from state to state. For some reason I thought in Florida that there wasn't an exclusive buyers representation - that everyone was a transaction agent. (Could have been misreading others posts on how they handle customers instead of the word/relationship clients.)

Thanks for posting this. I'm cleared up now on that matter in regards to the practice in Florida. (Sorry, this went a bit off topic didn't it? Didn't mean to hijack it in that manner...)

Hi everyone. Great comments and truly appreciated. Let me see if I can answer a couple of the questions and add some additional insight.

Kris Wales had a question about Florida's agency laws. In Florida we are presumed to be Transaction Brokers(No fiduciary) unless we choose to work as agents. AS a default we work with customers NOT clients. I do NOT Have to be an agent to work under a BBA. AS a transaction broker I am still working as a representative just not as an agent. I can also still work exclusively for the buyer and work with his best interest in mind. If we are making an offer on another brokers listings then I am a TB for the buyer and I do not represent the seller at all. If it's my listing them I am a TB for both parties.

Getting a BBA signed is all about timing. It's not something you just whip out at first contact. You certainly have to build trust first and then may very well require taking the buyer out for a trial run to look at properties. If you feel you need to do this then just be sure to get a BBA signed before making an offer or by the end of day 1, whichever comes first.

Compensation is only a very small element of the BBA. The BBA is mainly to put the buyers needs and expectation AND how you work, in writing, so everyone is on the same page. It's really a very uncomplicated agreement. You can certainly place a minimum amount of $$ you are willing to work for in the agreement. But just because it's there doesn't mean you have to enforce it. But wouldn't it be nice to know you can use the agreement, with your buyer, to have the buyer ask for more pay for you via the purchase contract?

ARDELL< I am actually very surprised that you do not use BBAs. As strong as you are on agency and consumer centric realty why in the world would you NOT want your buyers to sign an agreement. If nothing else so you can show them, in writing, that they can hold you accountable?

Accountability is actually the part of the agreement that I harp on. I am not only telling the buyer how I work and what they can expect form me but I am also willing to put it in writing so they can hold me to it. If I don't perform they can fire me and vice versa.

The BBA is probably the most power sales tool you can have in your tool box. Using it will make you a MUCH stronger REALTOR(R).

Just get your head around the accountability aspect and get off the compensation and loyalty hang up. If you present a BBA based on the accountability apsect the Buyer will want to sign it.

BB,

I agree with Ardell...I build trust...if the client doesn't sign it and the walk then that's my fault. If they don't like me or the way I work then I don't want them anyway. If I show them like a bunch of properties they asked to see and then still don't buy then I might just want to know their agenda and where we go from there. Like I said...most of the business is from listings and the buyers that I usually get are loyal thankfully.

BB, one of the first things I always ask is they are already working with an agent...if they say yes, I am a client of ...... then I send them back to them. If they say, well I have talked to a few agents...then I asked a secondary question to see if they have signed a buyers agency agreement. If they did that, fuhghetaboutit.

Gracious Rich...

I am a little surprised by the 'featured' quota. Didn't know there was such an animal.

In thinking about it...I find myself wondering if it's more like Members bitching because those who excell at Blogging get featured? :)

And to think...It's only June :)

TLW...ROAR!

OK Neal, Lynda and ARDELL, Let me see if I can approach this another way. I like you am very good at what I do and have never has a buyer go else well after talking with me. BUT....a BBA is not about trust it's about putting together a document that will be the guideline for the entire transaction. Think of it as a covenant instead of a contract.

I mainly work with Sellers as does Neal. I would never think of taking a listing without a contract between me and the seller. Even though they trust me and I trust them we do a contract to outline pricing, showing procedures etc. Now how come we treat buyers differently? Shouldn't they too have the benefit of being under a contract with us? Shouldn't we as professional make an obligation to work them and give them our best AND do it in writing?

In my opinion, the BBA needs to be a required form.

I use a BBA agreement as well, but believe it's important to build the trust. So the first meeting the BBA is modified to only the properties I'm showing that day. The fact that most other agents (if they've met/toured with others) don't present this agreement works to my advantage I think because I've added something to their experience and shown them the value in signing it. If they don't see the value, or if I can't create that value then I'm lucky to know that very early in the process and don't have to spend time with someone that sees me as a tour guide.

Yep, I've learned a very expensive lesson recently and I will never ever work without a BBA. PERIOD!!!

Featured Quota? What the heck is THAT about?

BB,

The reason I have a contract with the seller is so that I can promise the agent who sells it a commission in the MLS. The Seller agress to pay me that portion of the commission, and I promise to pay it via the mls. That's why a seller can't list in the mls without a signed contract, unless the listing broker wants to be on the hook for the buyer agent commission. I may totally trust the seller, but I can't ask every agent who shows my seller's house to do that without a written agreement as to their compensation.

I don't always do the same thing for all buyers. Some find the houses themselves. Some handle their loans more than adequately. I do what they don't. I beef up my services in areas where they are weak. Here in Seattle many buyers like to do some of it themselves, and everyone has different talents and strengths. They like to participate and be a bigger part of what is happening. Actually that is often more work for me vs. less, as I have to consult with them instead of just doing it. But in any event, there is no one size fits all real estate here. If the buyer wants an agreement I am more than willing to have one, of course. But if THEY don't ask for it and want it...I don't need it.

I offer to give them one to hold me accountable and to confirm the basis of our relationship, but they like handshake or hug better. So no discussion. They don't see the value for THEM, then discussion is over.

Often we simply confirm our arrangement in email. Maybe we just don't want to kill another tree :)

"A Salesperson without a signed contract is unemployed :)"

I'm not a "salesperson" and I'm not selling anything. I'm representing people for a living and a good relationship based on mutual trust is tantamount to the success of my clients objectives. Clients who don't trust me don't tell me what I need to know in order to help them. Good relationship = no lawsuits. Lots of reasons to have strong personal relationships with your buyer clients.

Bryant, thanks so much for the explanation regarding agency relationships in your state. I will have a clearer picture in my head now when I read articles from Florida brokers and agents.

BTW, I don't believe in quotas. I flagged this one for a feature because I felt that it deserved one. Timely, articulate and to-the-point.

Broker Bryant, I have always worked on trust as well. If they don't trust me and I don't trust them they are more than welcome to buy from some one else.

Bryant,

I have started using the BBA form because I have had some deals taken out of my pocket! Used to, a good hand shake was the word of the agent and buyer but no more.

Great discussion, as usual. I have nothing legitamate to add here other than I can't believe this was featured:-) What about those quotas?

I have had several such calls this week due to the fact that buyers are submitting multiple offers in this current market. All were crazy "yes I am working with a Realtor BUT I haven't signed a buyer's agency agreement." That to me sends up RED FLAGS when they say they they haven't signed an agreement without me asking. We all have to work harder and smarter and I don't want to do another agent's work if they (the buyer) just needs someone to open doors for them.

Too many "rebate agencies", too little time.

Really, how enforceable is the BAA?

I still scrutinize the entire content of the calls and listen very well when someone is talking. I ask questions and read between the lines. Sometimes maybe I read too much between the lines and maybe I have lost a sale.

Hey Bryant,

This ain't nothing to do with your excellent blog...... But, I enjoy those two bottom videos you've posted on the page to the right. That gold necklass sure does look like a hot piece of BLING!!!!

Sean Allen

Broker Bryant - When someone tell me they were working with someone else, but didn't sign an agreement, I usually ask why. If they tell me they won't sign one, I usually tell them that I don't work for free. At that point, I usually have their attention, because most realtors don't say anything.

Am I running off buyers by doing this. I'm not sure, but the ones I have now are loyal, and seriously interesting in buying a home.

I think it depends on the conventions in your area. What are the unspoken courtesies as opposed to the letter of the CoE. I dont use BAA's because people here rarely do. I want them to know that I intend to continue to earn their loyalty long after we've had a meeting of the minds to work together.

Thought-provoking discussion. Staying tuned...

Great information, I have always been told to ask if they are working with another agent? It is then it may go one way or another. What do you say to get the buyer to sign a BBA? I have never done that.

Thanks Heidi

Bryant.. I will NOT show property until a buyer agreement is signed. If they hesitate, then they are just "lookers", and not serious and I will not waste my time.

I haven't signed one yet. ....as for me asking if they are working with another agent ...if yes....then they can have their agent call me to schedule a showing.

I think it's best to get the buyer agreement signed as soon as possible for this very reason. I couldn't agree with your post more, thanks!

A salesperson WITH a signed contract is still unemployed.

A salesperson with a closed escrow check got paid.

I think you should ask if they have signed a buyers rep with another Realtor. If their answer is no, they are fair game. I will go out looking with them without the buyers rep, but I am re-thinking this policy. Week before last, I spent a lot of time working with 2 differnt buyers. After all my wasted time,gas and effort, 1 dissapeared on me. The other told my broker he didn't like me, so my broker is putting in 2 offers for him, and if either goes through, I only get a referral fee.

Are you working with buyers now...I thought you only represented sellers?

In NH we have buyer agency and non agency relationships. Unless the buyer signs a Buyer agency they are free to broker hop.

As an agent I let the Golden Rule...rule my actions. If they have been working with an agent...with or with a contract, I'm not going to insert myself into the mix. I wouldn't want someone to do that to me.

I work with buyers as a buyers agent via a contract. Those that broker hop can do so with out my help.

A throught provoking post----I absolutely agree with how you handled this.

Signing does creat a more "official" relationship. However, I have seen buyers that were in a written agreement with one agent cancel this relationship in writing to work with another agent. Actually, I think the best insurance when working with buyers is doing your best to understand what they are looking for and then being there for them when they need you. I do think written agreements are important, however. It does often indicate the seriousness of the buyer and their committment to you.

Matt, That's an excellent comment!! I am in complete agreement. The key to the BBA, as you stated, is making it a benefit to the buyer not a stumbling block. I think the problem REALTORS(R) have with using it is nothing more than the wrong mindset. It truly is about the buyer not us.

ARDELL, I think the fact that you give different services and advices to your clients is another reason why utilizing a BBA would work so well for you. The BBA could be tailored to meet each buyers individual needs. Again it's not about trust it's about providing the consumer with something that they rarely get any where else and that's a solid commitment from their agent. Not verbally but in writing. It would give them an extra layer of security. And in your case, you could map out, very specifically, what those buyers need from you. Think of this post as an exercise to help other REALTORS(R) become better at what they do. If what you do work then there is certainly nothing to fix.

Renee, I don't think a BBA is any more, or less, enforceable than a listing agreement. I would think of it, not so much as a binding agreement, as I would a covenant and a written outline of mutual expectations.

Jennifer, You wrote: "I want them to know that I intend to continue to earn their loyalty long after we've had a meeting of the minds to work together." This is exactly why I only take 45 day listing agreements in a market where average DOMs is about 7 months. I ask my sellers to commit to me for 45 days and during this time I will earn their trust and their business. A BBA can be used the same way. If they aren't happy "then fire me!!" My thought on the BBA not being used in your area is that that would be the reason I would want to do it. It would make you stand out in the crowd. You would be offering the consumer something they can't get any where else. It's a very strong reason for them to want to work with you.

Heidi, Click on the links in my post. One of the post has a very basic "pitch" in it. If that doesn't help come back and let me know and I will write another post about how and when to present a BBA.

Valerie, I actually will show property without getting a BBA signed first. But only a couple and only my listings. From there we sit down and go over their needs more thoroughly and then put it in writing by use of the BBA. I think you have to build a level of trust first.

Ann, That sucks!!!! Yes....you need to become a master at building trust then getting a BBA signed. There is nothing worse than wasting your time and the buyers time on a relationship that won't work.

Monika, I am working with some buyers and I dislike it very much!!!! Even though I'm very good at it I just do not enjoy it at all. But in this market.....I do what it takes to get paid:)

TO ALL: OK I'm sorry I didn't respond to every one but I wanted to make sure to answer the questions asked. I do love you though:) That line does NOT work on my wife!!! Maybe it'll work here :)

Grrr..sore subject for me right now...I think I will just kep my mouth shut for now...grrrr!!!

BB, for me, the comments were very enlighening and very enjoyable to read. Bye the way, this was a featured post. AJ

You are absolutely BRILLIANT! I would never have thought to meet with them anyway to get the Buyer Broker Agreement signed. Pure poetry. :)

Great featured post! Agents here have a different point of view on when, where and how to give a buyer a BBA. I always have a BBA on hand ready for the buyer to sign if they want to. Yes, if they want to. If not, then I'll counsel them about my committment and service to them. If they are not satisfied with my services, they can fire me at any given time.

Kristi....just let it out. you'll feel better:)

AJ, Good to see you my friend. I was just talking to TLW about you. It was ALL good. I was telling her that I seem to abuse my commenters by rarely commenting on their post. You came to mind. So sorry. I promise to get better at it:) TLW says hi by the way. She's been too busy working on her tan to blog this week!!!

Hi Lisa,

Your comment made me smile
If only for a little while
But while I did
My frown it hid
Only to return in a while :)

Thanks Petra. I hope all is well with you.

Touche' to Lenn's comment "If the Agent were doing their job - they wouldn't have called you..."

I soo agree with you! They need to sign...

After I give my hello speech at an open house, my next verse is asking them about Buyer Representation, if they're represented etc:, if not they are fair game. We go over this often in the office meetings. I have been sucessful a couple of times at the open house signing buyers.

BB- You are right- as long as you ask with a smile on your face...anything is possible!

I have avoided doing this for a long time, but with the most recent law in WA state, I have decided it is going to be something I do from now on. I still have about half of my buyers come to me as return clients, so this will be an interesting conversation about the change I am taking with this. In fact, I just out a note about it in my newsletter to my whole database.

I've never had a BBA and admittedly there has been a time or two when I should have. I have always worked under the presumption that nobody owns a buyer and therefore I don't need to contractually obligate them. You make several valid points as do some of the comments so I may have to rethink my position.

I usually offer a free ride once. I want to know if I am going to be confortable with them and they with me. After that... we need the agreement.

Code of ethics. If they are working with somebody else then don't step on their toes.

If they are happy with the agent they worked with, I don't go there. If they aren't, that's a different story. Sadly, many brokers won't fight for their agents with a signed agreement, and after being in the business 10 years, I 've seen many that went on to another agent, and those agents were "out". I'm sure some were not doing their jobs, but probably a few were...it's only worth the paper it is written on, depending on the office you are in and if you are willing to spend the $$$ to fight them.

I show first, then decide if I want to work for THEM....If I feel we are a good match, sign here please! I make sure they FULLY understand what they are signing as well.

BB,

When a buyer switches agents it's not because the agent didn't get a piece of paper signed. Maybe I'm influenced by the fact that most every agent who asked me about Buyer Agreements had problems with losing buyer clients. Perhaps they should look into a mirror and not at a piece of paper.

Becoming a better agent that rarely if ever loses a client should be the goal. Being worthy of the client to the extent that they will not lose as many, should be the goal. Shackling people to an agent should never be a matter of discussion in our industry. Only raising the bar.

BA agreements don't help to raise the bar. That said, there are a few examples where a buyer agency agreement is warranted, and I have used them a few times. I think "require them as needed" is more appropriate to most everything than...sign or get the out. Often when a bit of time is invested by the agent, and the client has had a long enough time to get to know the agent, would be a more appropriate time than at first meeting.

I am influenced by the fact that I have seen agents slack off once they have an agreement. I have seen buyers lose a house in a hot market when their agent by agreement took off without a backup person. Agent said "oh well, there's always another house". I don't think people should lose a house they want...ever.

I've never used BBA, but I'm going to start. You did the right thing, you offered a different form of representation with the BBA, so you're okay.

In our bba, it spits out verbage about being a transaction broker and ability to show the listings we have listed. Transistion to transaction broker. Say that 10 times fast! :)

LOL! It got featured! So much for quotas. Did you mean for this to be a public post?

Still the very best Agency verbiage I have ever seen was in Florida back when it said ONE LINE:

"I do not represent you until and unless you hire me to do so." I loved the simplicity of that.

In a State like mine, WA, where a buyer is represented at first contact under the agency law, contracts give agents the impression that they don't represent the people who don't sign them. That is dangerous around here, since the law says otherwise.

Maybe my perspective makes more sense given that last paragraph and our local laws.

Okay BB, I'm really a rural girl when it comes to geography. Maybe I need to explore the BRA agreement more in my daily life. I don't need a bra in real life so I figure I don't need a bra for Real Estate. Everything holds up just fine.

I'll grant you though, I have had many a customer claim to have not been working with an agent that turned out to actually have BEEN working with an agent. My bad. Don't think I don't ask them. I just turn around to the fax machine and there's an offer from the same buyer and a "new buyer's agent" that appears.

I've been notating within the Agent's Comments section of the MLS that full compensation will not be paid unless the buyer's agent accompanies the buyer from the first showing...that seems to help.

I will admit though, the idea of a bra is okay...I'll open my rural girl mind and explore the possibility. Thanks for the nudge.

Later in the rain~Deb

I agree with the test drive option. I do not make them sign it the first time I take them out because to be honest, I am test driving them also. I don't want to work with an unmotivated buyer, I don't want to work with someone I am uncomfortable. I believe my buyers need to see if I am going to what I say I am going to do.

Way tooooooo many times, I have run across buyers who have signed the contract and the realtor doesn't return their phone calls. They ask me what to do. Then what do we say? I actually had one that after I told him to probe a little further with the broker, he found out the agent had moved out of the state. Shame on him!

All that said, I would like to work toward getting them to sign more often after our first "date". :-0) I very much appreciate the links to help me start getting it signed!

In our state (Connecticut), you cannot show another broker's listings without a signed buyer's agreement, unless you make special arrangements to become a sub-agent of the listing broker, which no one does as they don't want to assume the liability. I have had other agents get angry at me for signing up their clients for my market area, because they failed to include my market area in their buyer's agreement. I actually had one agent who strong-armed his clients into signing a revised Buyer's Agreement to include my market area after they checked with the agent to see what areas were included in the agreement (they couldn't find their copy and I suggested they get a copy of the agreement from their agent). Then the agent had the nerve to call me and ask me to call his client to assure them that they weren't missing out on "the best agent to show them homes in my market area". Amazing, huh?

It's amazing how many people call me about properties that have been out with another REALTOR... yet they have no agreement signed....

I always ask and if they say no written agreement, I always try to get one with me. They have already demonstrated a lack of loyalty, assuming the other agent did a good job. I don't want to waste my time and have them move on to someone else.

JUN

2008

I AGREE - I see it the same way - unless another agent has something signed the buyer is fair game - we compete for everything in life including Buyers

A lot of people say that if the Realtor were doing his or her job, then the buyer woldn't be looking. But the bottom line is buyers are fickle. So if there's nothing signed, I go for it. If not, I say go work with the agent you already have!

I agree that even if they went out with another agent, the fact that they called me said either that they were not impressed with that other agent, that other agent didn't have them sign anything and didn't explain how they work. Completely makes the client ripe for the picking and like you said, they come in to the office and we get them qualified and have them sign the paperwork to get them in to a home including a buyer-broker agreement.

Bryant, I have not use one Buyer's Broker Agreement in my five years in the business, hardly anybody use them around here. When someone call me about my listings I always ask if they are working with a realtor. What I have find out is that when buyers working with an agent is calling the listing agent most of the time the buyers agent is not doing their job and they are looking for a new agent.

LOL,

Did anyone else go look to see why Deb didn't need a BRA in real life. LOL!!! I thought she'd look like "Twiggy" :)

Bryant, my dear, you've hit the nail on the head!! If they don't sign, I don't have time!!! Gas is way too expensive now a days to just be givng tours. I learned very early on to do 2 things before taking buyers out:

1. Get the BBA signed (& of course explain it to them);

2: If they say they've been Prequal/Preapproved, I must see that letter & speak to the lender or they've got to get an approval with my preferred lender.

I refuse to chase my tail in regards to buyers!! Thanks so much for sharing & have a wonderful weekend!

A liar is a liar, with or without an agreement. Likewise someone of integrity, I know it sounds silly but if it does not feel right dump them...

And in this market how many times have you seen you get the papers signed and go past the signed date and they leave you any way? probably does not happen much, but I am seeing it more and more in this market than a couple of years ago.

Broker Bryant, I think the only important question to get answered is if they are under contract with a buyer broker. And ya know, if they're been looking at places with a friend of mine or someone in my own office, I might step aside and give the colleague a call. I think we all have an obligation to educate our buyer clients about how it works.

When I ask if the consumer if they are working with another agent, I have them clarify if they have a signed BBA. Then they are fair game.

I have a Buyer listing appointment that I do for all of my potential buyers. It is very in depth as to the educate my clients. When I have this appointment, I go into a very detailed discussion about how we work and get paid. They get it. I also tell them that the "first time is for free with me". When I go somewhere I don't want to be pressured into signing anything, I don't pressure them to sign anything at their first meeting with me. Then They can go out with me, see how I work, see if they feel I am a fit for them and what they are trying to accomplish.

After that I will ask them to sign the agreement. 99% this works. If you know your stuff it is a clear benefit to you and the consumer.

Hi all, EXCELLENT comments! After reading through all of these I can see where State laws would certainly come into play as well. I think it's interesting that WA has presumed agency at first contact. Am I understanding that right ARDELL? If so to me that sounds very scary for the consumer.

And CN having to have a signed BBA PRIOR to showing another broker's listings. Gail, do you have to work as an agent under a BBA or are there other choices of representation i.e transaction brokerage?

Audrey, I LOVE your "buyer's listing appointment". Now that's what should be done even if folks do chose to work without a written agreement. It is our duty to make sure the consumer understands how we work and who we do or don;t represent and in what capacity we are representing them.

If we all worked smarter it would benefit us and the consumer. We need to step it up a notch.

I really appreciate everybody stopping by and participating in this conversation. THANK YOU!!!!

I'm on your side with the Buyer's Agreement.

Recently an agent in the office had been showing homes - around 30 - without an agreement. Then her buyers ask to see a home listed by a minimum service company where the home wasn't in the MLS (yard sign only) and the co-op was half what is usually provided in the MLS. Her buyers wrote an offer on this home. She was grumbling because after showing all those homes, her pay would be half what she thought it would. At that point, without the BBA, she couldn't ask the buyer to pay the other half. However, the seller refused to drop their price, thus preventing the Offer from going into contract.

So, she had a good, trusting RELATIONSHIP, but because there was no BBA, she couldn't bring up or expect to ask the buyer to pay the "unpaid" coop. Had she had the buyer sign the BBA up front, she would have been assured of being paid for her work. She told me she has since had them sign the BBA to prevent the same thing from happening again.

Using the above example, what would she have said to the buyer if they had chosen a FSBO that didn't want to pay any co-op. Would she have told the buyer "sorry" I won't write a contract for you because I won't get paid? That sounds really petty, plus, it would most likely ruin that good relationship. It's just best to get the BBA signed first so there are no surprises and everybody stays happy.

The agent who is truly serving the buyers needs to have the agreement signed. Obviously if they are doing a good job that buyer is going to stick with them. Kaleb Kunz

JUN

2008

I'm definitely the minority here on AR. I have never used a buyer's agreement. Have I lost a buyer as a result, yes...one time. I find my buyers stick with me and most of them actually become friends I'd like to see often. Sometimes they take longer than I'd like to buy that home, but I don't mind. I have sold several houses that I have seen with buyers who didn't buy it; I love seeing the inventory. Now a days, most of my clients are referrals, so I would never have them sign an agreement. It may make sense for a website lead though, I just never did it. It probably makes sense too if you are driving far from home.

Good dialogue from all though.

JUN

2008

In florida if a buyer is a customer and not a client can you still reveal personal information about the customer without their permission? (not referring to you. Another Florida agent does this and it's had me curious as to the boundaries of a transaction relationship)

It depends. If working as a transaction broker we can not divulge confidential information to either party related to their reasons for purchasing/selling. Also, if the customer ask us to keep something confidential then we should do so or let them know up front that we can't. This is another reason to utilize the BBA. It gives us the opportunity to discuss these things with our buyers so we both know our boundaries.

Even if we are working as a non-rep, which means we are not representing them in any capacity, we still have to treat all parties fairly and honestly.

Do you have a specific example?

Elaine, That is a perfect example of why it is prudent to have a BBA signed. I hear so many REALTORS(R) that say things like, "I'll show my buyer anything regardless of commission" or "I never look at he co-broke" or the winner, in my opinion, "It is unethical for me to not show a property offering a low co-broke"

All of these statements are either incorrect or just folks not being honest with themselves. The FSBO is a perfect example. Without a BBA, either knowingly or conveniently this property will not get shown. With a BBA you can certainly show it and sell it. The BBA allows the buyer to ask the seller to pay the buyers agent for his services. This is also true with listed properties that offering a lower co-broke than I'm willing to work for.

The BBA is not about locking the buyer in so they can't work with another agent it's about outlining the transaction and how we are going to be working and what we expect from them.

BB, I don't know about transaction brokerage because I haven't seen that used around here. Upon first face-to-face contact with a potential client in Connecticut, we must have an Agency Disclosure form signed that states there are only three ways that a real estate agent can work with a client - as a Listing Agent, a Buyer's Agent, or Dual Agency (agency runs to the firm, not just the agent, although there is a special form both the Seller and Buyer have to sign for Dual Agency, Single Agent situations). You could theoretically have an Open Buyer's Agreement where you are representing the client, but other agents can represent them as well, but personally I'd rather narrow down an Exclusive Buyer's Agreement to one property than do that. I don't know any agent who would sign an Open Buyer's Agreement.

JUN

2008

If you feel this way about this situation, then I would contend that this rationale would also apply to those buyers who say they have no agent when they are looking at one of your listings; then after thinking about it and doing research, they engage a buyer's agent for that particular home.

Is there any difference? No. Why? While the seller pays the commission at closing, the buyer bears some of the burden through the sales price; therefore, the buyer is entitled to their own representation -- which he/she is paying for through the sales price.

Most agents in my area do not use this. The trend has not spread. However, I have had since the 1st of the year and with gas prices I had to stop being shy about asking for this to be signed. It's the only way an agent can test the mutual loyalty of a buyer. Without the BBA I am taking a big risk. I am as commted as the people who want to work with me.

JUN

2008

You did your job by asking first. Now its the first agents loss and your gain.

JUN

2008

Great post featuring excellent information.

I really appreciated the fact that you noted that State real estate law trumps the Code of Ethics. State law trumps many opinions, but we can certainly learn from each other.

While not extremly common in Illinois, I woud agree that exclusive buyer agency is the way for the licensee to go provided he gives his client the service that he promises in the agreement.

Having said that, the first question that an Illinois licensee must ask at first significant contact is the question "Are you working with another agent?" It is a violation of the Illinois Real Estate License Act for a Licensee to induce a party to break a contract or brokerage agreement for the purpose of substituting an a new agreement with a third party. Article 20, Section 20 paragraph (h), sub-paragraph (23).

If the anwser is yes, the licensee must walk away just like an exclusive listing agreement with the seller.

If the answer is no, or there is a non-exclusive buyer agncy agreement, This would now be the best time to discuss the benefits and offer service as an exclusive buyer agent and get employed as your post proposes.

Mike Fair

JUL

2008

I think I am the only agent in my office that gets a BBA signed before I take clients out. They just don't do it. Clients fully expect that they can spend the day with you driving them around and then they can go to another realtor next weekend. I blame agency for not setting a standard for the BBA to be signed and realtors getting a non-refundable retainer.

SEP

Bryant, I think the buyer's willingness to sign the BBA is an indication of trust. And a good business practice when their can be a tendency towards like of commitment to agents after too much time has been serving a potential client. I think the BBA just causes agent and buyer to settle into the commitment.

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