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Buyer Broker Agreements-Its Not Always About The Deposit!

There always seems to be a great debate on buyer broker agreements. Do you provide a buyer's consultation? If not you should! Why would you make the assumption that a buyer knows every step of the process. Even if they say they do...often times they do not! Funny thing, we never do this to a real estate seller and on many occasions buyers get shortchanged and we wonder why so many dislike real estate agents.

Through out the years I have learned many lessons when it comes to buyers and their commitment to buy real estate.

Don't assume because you know someone well that it is not necessary to use this vital document.

I have seen it and experienced it..sometimes friendships don't mean a thing.

Buying a home is business..a very large investment..friendships do not matter...when money comes into play.

Often times associates strive to get the buyer broker agreement signed with no avail..often times that is the reason they are not used and at the end...

No commission check for you and sometimes the buyer walks away or works with someone else.

A couple of things you should know about Buyer Broker Agreements.

It's not about the deposit..or escrow received! A retainer fee not necessary..if I have your word..in writing..via an agreement..a buyer broker agreement.....the escrow will be collected once we find a buyer a home.

Keep in mind for me its a commitment from the buyer to work with me...and only me..whether it is one house...get it signed...spending a day with the same buyer on several properties...get it signed...or for a longer commitment.

Plain and simple use it and get it signed.

When I hear agents complain about the price of gas...get a buyer broker agreement signed. When I hear agents upset because they feel used....get a buyer broker agreement signed.

We as real estate agents are expected to protect the public from harm...we protect buyers...we protect sellers...

But whose responsibility is it to protect ourselves? You and only you.

I guess it really comes down to this.

As a profession imagine if we raised the standard and used some of these legal and binding documents to ensure our compensation.

Is this charity or are you trying earn a living? I said it before and I will say it again...Real Estate is not my charity of choice! What about you? Do you use a buyer broker agreement and is it difficult for you to have a customer sign it?

Disclaimer: The opinions expressed by The Activerain Network and it's members and those providing comments are theirs alone, and do not reflect the opinions of Midori Miller AKA Daytona Real Estate Trainer and CENTURY 21 Sundance Realty. Midori Miller and CENTURY 21 Sundance Realty are not responsible for the accuracy or content provided by The Community.

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Posted by Florida Real Estate Trainer | Daytona Beach After School Training | Midori on 07/23/2008 02:04 PM

Comments (62)

buyer broker agreement, use with one house showing or a whole day, the price of gas, real estate agents feeling used, midori miller, daytona

Originally posted at: Daytona Real Estate Training: Buyer Broker Agreements-Its Not Always About The Deposit!

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62 Comments on Buyer Broker Agreements-Its Not Always About The Deposit!

JUL

2008

I have to be honest here. I've never used one. The reason I've never used one is because I personally would never sign one. I don't feel comfortable asking someone to sign something I wouldn't myself. I don't see how using a buyers broker agreement 'raises the standard'.

Good post. You nailed it with "Is this a charity or are you trying to earn a living?"

Hi Cyd-that is the beauty of independent contractor don't you think? I would sign one if it was explained to me in terms that would benefit all parties...and the way you write them out will also make a difference. As far as raising the standard...well I believe slamming someone in your car...with no expectations except to show property...and hope they buy something from you..is not a high standard at all. Buyers just like sellers deserve consultations as well as agreement...letting them know you are working for them! I appreciate the honesty and believe me there are many out there who feel the way you do! For me...it shows a level of professionalism..not different from a lawyer or doctor! But just like you if I do not believe in what I am using..or saying..well its not for me! :)

Midori,

I don't have a problem with them but some consumers feel that they just don't want to sign anything. I really try to make them feel comfortable and hope that our relationship will go far beyond the piece of paper.

We always use them. Office policy and glad for it. The agreement doesn't only protect your interests, but the brokers as well. They have the attorneys that will litigate for any commissions owed to them and you. Just one of the many pluses for working with a large brokerage. And if anyone doesn't want to sign it, shouldn't that send up a red flag for you?

Our liability is huge, thus is our commission checks. This is the only career where you get paid after you've done all of the work. Do you really want to spend time, money, ga$ on someone who doesn't want to sign a buyers agency agreement?

Ah, but see? There's the catch. What benefit does it provide the buyer? It doesn't. It provides the sales associate protection. It does nothing for the buyer. As a sales associate (broker) you are going to do the same job whether you have a signed piece of paper or not.

I don't 'slam' someone in my car with no expectations except to show them homes. Because most of my customers are people from out of the area, I spend quite a bit of time with them via email and telephone. They get the drift of my personality and what I will/won't do for them and what I expect out of them before we meet face to face. For those here in town, most of them come to me via recommendation and again, we spend time together BEFORE they get in my car. They don't all get in there. :)

Are there customers I lose? Yep. I'm losing less as I learn from those I've lost and modify what I'm doing. But, lock someone in who may not be thrilled with me on their team just because I showed them a house? No.

I don't disagree with someone using a buyer's broker agreement but I do disagree with classifying not using one as a lower standard or running a charity.

I always use them. Especially now with the market the way it is. Other Agents are hungry...I need to protect myself in the sense that if they are not serious buyers they move on. I would rather know that up front than find out after 2 tanks of gas and that they went to an open house and made an offer with the Agent sitting at the kitchen table....

I believe in having a Buyer Broker Agreement signed because it commits the buyer. Would an agent list a property without getting an Exclusive Right to Sell listing agreement? I don't think so. Then why not get the buyer to sign an agreement? It's all about education. A seller would not sign an agreement until the agent properly educated them on the benefits of listing. The same applies to a buyer. With proper education about the benefits for representation, there is no reason why a buyer wouldn't want to sign a Buyer Broker Agreement.

Also note under the law of agency you cannot represent a buyer without an agreement. I think we take it for granted that we automatically represent the buyer. When in fact we always represent the seller unless we have an agreement to the contrary with the buyer.

As always, check with your State laws regarding agency.

Well, we need a little clarification here. In Florida, a majority of your sales associates are transaction brokers. I am a transaction broker. There's a huge difference between getting a buyer's broker agreement signed by someone practicing as a buyer's broker in the true sense vs a transaction broker locking a buyer into them. It is possible to have a buyer sign a buyer's broker agreement and still be functioning as a transaction broker. It is that practice that lends nothing in favor of the buyer, just protects the agent.

This is a really smart post. The smarter, better Realtors are using them. It is more important than ever to have your agreements in writing so everyone understands.

All the best.

Listing agents sign formal listing agreements with sellers spelling out expectations of both the seller and the agent and yes in our listing agreement we have a service pledge so they have the right to fire us at anytime.

As a buyers agent using buyer broker agreements are both for the buyer and the agent as well. Expectations... just like listing agreements, buyer broker agreements are bilateral whether its one house or a committment from both parties for months on end, you know your customer...you know whether you need a buyer broker agreement..its always a case by case situation.

Keep in mind a buyer broker agreement spells out the rights and duties of both parties both agent and customer. If the agent doesn't perform, termination!

If you drive a buyer around in your car and they do not commit or never buy...what would you call it? You can call it anything like and if you find my words offensive...I apologize but I have to ask again what exactly would you call it? To me somehow, somewhere someone has dropped the ball and at the end...that buyer buys through someone else or is so turned off they never buy at all.

In Ormond by the Sea it is not uncommon for 1 buyer to be out with a few agents..many farm in the same areas and there are many agents to choose from. I have seen where agents get upset with one another...or a buyer..walks away because they do not want to get in the middle of a mess...a mess that really has nothing to do with them.

A few years ago, I was working with a milllion dollar buyer...and the million dollar buyer was a friend of mine. Needless to say they bought from someone else and I asked why? These were there exact words...

"The other agent had me sign an agreement it was a buyer broker agreement..and they said to me..because we are friends we did not need that formalilty? I felt that the other agent treated me much more professional by committing to me! When I heard that I was very surprised but could see where they are coming from!"

Each buyer expects certain things.and sometimes different things..as an agent you have the right to expect certain things as well. If I provide a true service I expect to get paid. It's not a matter of tying someone in long term its about consulting...and servicing and at the end a successful closing.

For me its not about tying the customer in some long term agreement its to do a job they hired me for and just like everything else in real estate...I want it in writing.

Midori, great post. Business is business, people seem to forget that too easily when they deal with friends or someone they think they know.

I beleive the only time you should work without an agreement, is when you don't expect any commission.

Kevin, that's just plain rude to say. We're going to very much have to agree to disagree.

"If you drive a buyer around in your car and they do not commit or never buy...what would you call it? You can call it anything like and if you find my words offensive...I apologize but I have to ask again what exactly would you call it? To me somehow, somewhere someone has dropped the ball and at the end...that buyer buys through someone else or is so turned off they never buy at all."

I would call it the same thing if I was driving a buyer around in my car and had a buyer's agreement stuck in the visor or the folder on my visor and they didn't buy. Part of the business. Not everyone that comes to Florida or even living in a different part of Florida actually purchases a property...signed agreement or not. It's a numbers game just like any other sales/commission profession. You (meaning the general you), don't close everything. It's quite an assumption that those of us who do not use a BBA do not fully explain the ins and outs. The ethical and legal duties do not change just because you have someone sign a piece of paper. The personal and work ethics you bring to the table do not just disappear because a piece of paper is not signed.

Like I said...I don't think it's that you or anyone else using buyers agreements are better or worse than others that don't and visa versa. To put it on any other level than it's just a business model, IMO, ESPECIALLY, in Florida, the land of transaction brokers, isn't something I agree with. Offended...well, I would say that is a little extreme. I do disagree with some of the statements made. I do find smarter/better offensive but that didn't come from you.

As I said... if you are working as a buyer's broker in the true Floridian definition, then that's a different story.

I am a rookie agent. I like the idea of consulting with the buyers first and having them sign a buyer agency agreement. However, neither of those are common in my area. It seems it's still about answering the phone and then jump in your car. How do you present this to a new client who you're speaking with for the first time? Or even after you've shown them a few homes, how do you bring it up?

Hi Stacie- I have tons of training on my website on daytonarealestatetrainer.com/training. If you read a few of the posts..you will see a buyer consultation unfold! Sit down and ask the right questions screening the customer...get them approved for a mortgage...provide service and you will see..if you have a service guarantee..present it to them...and the buyer broker agreement...it let's them know you are working for them! Mutual commitment..even if its just one property you show them!

I always use the buyer agency agreement...in our area, if you aren't representing the buyer, some sellers won't pay you!

Midori, I get BBAs signed and have no problem doing it. Most of the time I just email it over and they sign it. No biggie.

As you pointed out the BBA is a bilateral agreement. The compensation part of the BBA is actually only a very small part of the agreement. The BBA is the outline for the entire transaction. It spells out exactly what the buyer can expect from me and what I expect from them. Buyers LOVE them if presented properly. Also, just because the buyer signs one doesn't mean I will hold them to paying me more money or that I will "lock them in" to working only with me. In fact my agreements are normally for a very short period of time, 30 days, and very specific to properties in Poinciana. They can go look at homes outside of Poinciana with whoever they want. And if they want out of the BBA because we aren't getting along, then so be it, I'll cancel it on the spot, just as I would a listing agreement. I only work with folks that want to work with me.

A BBA let's the buyer know I am serious about finding them a home. Even as a Transaction Broker I am still representing my buyer, just not in an agency(fiduciary) capacity. And a BBA tells him how I will do that.

The BBA gives me the freedom to work with my buyer on any property including FSBOs. It takes my compensation right out of the equation. I can show my buyer a listing offering a $1 co-broke if he wants to see it and is wiling to pay me to do so. That's a very a good thing.

JUL

2008

This blog has certainly created a stir! And as Michael Setunsky stated in his post, the laws vary state by state. Maryland is quite clear about the fact that if you show someone a house without buyer agency, you represent the sellers best interests. That is your fiduciary duty.

Say you walk into a home and there in the middle of the living room ceiling is a huge hole in the roof. Without buyer agency, that becomes a whole house ventilation system, or "What a marvelous place for a skylite!". With a signed B.A.A., it becomes an instant focal point of price depreciation and negotiation. If you are ever found to have discussed pricing negotiation or strategy in association with showing a home without buyer representation, you will be subject to fines and suspension of your R.E. License. And our state has testers who will periodically send people out posing as buyers to check on agents procedures on every fact pertaining to R.E. law, not just fair housing issues.

So when does it matter to have a signed buyers agency agreement with your prospective clients?

When it matters. $$$$$

The BA Agreement is fundamental to working as a BA in Maryland. There are things you cannot do for a buyer without a written BA Agreement to Represent that buyer. You can't negotiate. You can't write a contract.

We have "presumed buyer agency", and many agents rely on this agency disclosure. However, the buyer can work with 10 agents with "presumed buyer's agency". It just means that if an agent shows a house with a buyer, it is "presumed" that the agent will represent the buyer on any home that they show.

My Buyer Listing Agreement is 15 days to start. I don't want long agreements. We want to know that the buyer is serious and ready. Otherwise, we don't want to play taxi cab driver. If it appears that the buyer is slow to get loan approval or not available when a "perfect" comes on the market, best we spend time with another buyer.

Or go fishing.

Buyer education is so important. I started my career as an exclusive buyer agent and was surprised at how little the buyer know regarding the homebuying process. Even after they came to me from firing a previous agent. So I agree fully. Get the agreements signed.

It never ceases to amaze me, how little our buyers know about the process. I find myself having to do some education in ever transaction.

I like your post Midori! I agree with you. Here you really cannot provide a service to the buyer other than a taxi cab door opening service without a BBA. I think they are important for the reason you outlined. This is NOT a hobby or a past time... this is how I earn a living. Using a BBA does not eliminate the chance that you loose a buyer but I have found that it decreases it GREATLY.

I use them all the time but it does not always solve the problem of procuring cause. You can show somone 20 homes and then one day they take off on their own to an open house, love what they see, and have the open house agent draw up the contract. At that point you, the buyer's agent, have no claim to the commission because you did not initiate the contract and were thus not part of the procuring cause. For this reason I sometimes feel the buyer's agency agreement is kind of pointless for the agent. This has not happened to me yet and I hope it never will. Rules need to be changed to protect the buyers agent in the same way that a listing agent is protected with the agency agreement.

HELLO MIDORI! A well derserved featured post!!! You've spoken multitudes of truth. It is more important than ever to get the buyer broker agreement signed!

Thanks for posting & keeping the standards!

Midori~I loved this post. Thanks for promoting the BBA. I started using them this year and it's been great. The Buyers appreciate knowing what services I will provide and what type of compensation I am entitled to for those services. Like Bryant, I offer a exit clause also...no point in forcing a relationship that's not mutually beneficial. Congrats on a post!

It depends on the individual or couple if I ask them to sign a buyer's rep. agreement. You just know if it is going to work out or not. I for one don't like to waste paper or ink.

I ALWAYS get a BB agreement signed, before showing a single home, and RARELY have any objection from the buyer. On the rare occasions that I do, it's pretty simple to overcome. I've only had one buyer walk as a result... all the others resulted in my protected commission. Great post and advice I would give any agent, old or new in the business. Don't be taken advantage of!

I have buyer sign the agreement at the end of the first day of working together. That way we can BOTH decide if we want to continue. However, an agreement is only as good as the person who signs it. If someone wants to screw you they will, regardless of whether they signed and agreement or not. However, when the ramifications of the agreement are explained, at least it may be some sort of a deterrent for wasted time. When it comes to business even the "nicest" people can turn on you if they think there is something better on the other side of the street. They can find a FSBO, walk into a builder model, etc...it doesn't have to be with another agent. Then who will comensate you for your lost time and money. I am in the process of tightening up my agreement. I frankly am sick and tired of dragging people around for weeks and weeks, acting as their therapist only for them to discover that they really "should" buy in another State, or should "hold off" right now. Bla bla bla

JUL

2008

That is spot on advice Midori. We are afraid to ask for them, but it is much easier to work with people who give us that vote of confidence.

I am fairly new to the business and always prefer to have a Buyers Consultation and signed BBA. My explanation of having it signed is simple, I'm in the business as a full time Realtor, and I only work with a few serious buyers this shows their committment to me and vice versa. I also always provide a sample BBA as well as Disclosure of Agency Relations to get them prepared of what will be discussed and needs signatures.

I usually do a buyers' consultation and show the buyers the first time. Then I have them sign the broker buyer agreement if they want to continue to work with me.

I have yet to use one although I agree wholeheartedly with you here. There have been times I really felt I should've had one in place.

Some people say there is no benefit for the buyer in a buyer's agreement.

That is a misconception, and I have seen it in living color - here are a few examples of benefits for the buyer who chooses to sign a BA.

BAs protect buyers from greedy FSBO sellers (they aren't all greedy, but they do exist) by allowing the buyer to have a third party negotiate price, inspection repairs and follow-up. Timid buyers don't want to offend the seller (They seem sooo nice).

BAs guarantee that someone will dig in and check a price, market conditions, upcoming tax assessments, easements, utility averages, previous insurance claims and more.

BAs guarantee that the agent won't bid against the buyer in Ohio.

BAs guarantee that the agent will show the buyer every home on the market, not just what is on the MLS.

BAs help the buyer get the best price, best value and best representation and highest level of commitment from an agent, because they know they are not competing against other agents due to their agreement with the buyer.

In Ohio, agents have a much higher level of legal commitment to buyers when a BA is in force.

There is much more, but I don't want to hijack this post!!

My thought: If an agent doesn't know how to protect his/her own interests, how can they be expected to look out for the buyer's best interests?

Hi Midori, just wanted to say I enjoyed your post and all the great comments here. The jury is still out on this subject for me for many reasons. The entire business is changing too much and too quickly right now, and I can't wait to find out how things change over the next year or two.

Midori

Nicely presented. The agreement will protect a large portion of realtors as you suggested from charity work.

I am a Real Estate Broker with a firm in the DC area. As an agent I never used Buyer Broker Agreements and as a Broker I encourage my agents to do the same. We start every relationship by explaining to our clients that we don't believe in Buyer Broker Agreements (most of our competitors do). We explain that we aim to represent them as Homebuyers and how the commission process works. We ask for a simple agreement, if we work hard for them and provide valuable information, they will look out for our commission. However, if they are not happy with our work ethic or what we bring to the table from a knowledge standpoint, we would never go after them for a commission. I think this is a fair policy that keeps everyone on their toes and we rarely (in fact I can't think of a single time) have any issues.

Hi Edward-just curious...what type of agreement if it is not a buyer broker agreement? A disclosure you created? I find that interesting and another great alternative. Is it verbal a conversation that you have? The buyer broker is not about going after the commission to me either...it's about a mutual agreement and committment of spelling out what I will do..what they expect and what they deserve. When we use them we rarely take a retainer...or a escrow...its about committment plain and simple for all parties. That is how I use a buyer broker agreement. Thanks for you input and I would really love to hear!

Well it's about time! Midori, thank you so much for your post. Not only do I get a buyer broker agreement signed, but I also collect a retainer fee up front as well. During my initial buyer consultation, which usually lasts one hour, I review what to expect, the contract they'll be signing, different contingencies, closing costs, and answer any questions that the perspective buyer has.

I give all of the paperwork to the buyer to review, and tell them that if they would like to continue, then to bring it back signed to our next appointment. I think it has enabled me to weed out buyers who are not serious.

There's nothing wrong with having someone sign the agreement. The retainer fee is fully refundable if they buy from me, but if for any reason they don't, then my company keeps it, and it is disbursed to me.

Bravo, to those brokers who require it of their agents. I think that agents who don't use it or 'refuse' are really scared to ask for it because they cannot articulate their value, their services, and how they benefit the buyer.

As part of my consultation, I provide my resume, testimonials of past clients, a list of the homes that I have recently sold, and information about my company. Remember, they're interviewing you, and you're interviewing them.

And you have to qualify a buyer before even putting them in your car. You're right, this is serious business. I'm still amazed when I hear of agents showing houses to buyers who are not qualified or pre-approved. Isn't that what open houses are for?

It has nothing to do with gas. There's nothing wrong with expecting to receive payment for the services, information, advise that you provide a buyer. Whether they buy or not. Consumers don't understand that for every listed home they see online, there is an agent who paid to be a member of the local association, paid to be a member of the local MLS, paid to be a subscriber of numerous websites where their listings are displayed. Providing this information is not FREE. Our knowledge is not FREE. And Lord knows that our experience is not FREE.

I think that every agent should do this. It would definitely change the way consumers initially approach us and it also holds us more accountable for the services that we should provide.

Dear Midori: As of right now it is a verbal conversation that we have. I have been intending to construct a written version of this conversation for quite some time now. To touch on another subject that some other folks have brought up on this blob, I also encourage my agents to take clients out on a first appointment before insisting that they meet with a lender. Our agents are all knowledgeable about mortgage finance and I think that a first appointment is a great way to effectively pre-qualify a client. During conversation during the course of this initial appointment we will find out- where they live, where they work (and what they do), if they've ever owned a home before, etc. This information is a great segue into a loan application. My belief is that the loan application is a scary process for buyers and that many people need to get excited about a property (or at least the process) before they make a loan application.

Edward; Aren't you doing your brokerage, your agents and their clients a dis-service by encouraging them not to partake in a buyers agency agreement?

First of all depending on how you fill it out, the buyer isn't paying the agent one dime. The commission for sale of property comes from the listing brokerage.

Second, it is consumer protection for the buyer.

Third, it really doesn't hold much water anyway as the buyer can dissolve the agreement at any time.

Finally, if someone has a problem signing the agreement even to expire at midnight, is that someone you want your sales agents to invest time and money in? How serious are they as buyers? In addition to having the agreement we also require that they pre-qualify with our in house lender.

Life is short, and we like to take our clients all the way to the settlement table. We do an in office buyer consultation presentation with prospects where we discover every aspect of their needs. They also meet with our lender at that time and receive a free credit report so as to evaluate their true buying power. Why drive around to properties all willie nillie not knowing if they can afford the payment or even qualify for the loan? If for some reason they are in need our credit repair and D.T.I. counseling, we address that at that point and help them in the process. The end result may be a sale down the road, and in the mean time not a drop of gas is burned in window shopping houses.

I am assuming that in DC it is not required by law as it is in MD? How strange.

Midori, i think the bottom line is "when you hear". I believe your clients will inevitably tell you if they in one way or another will be loyal or not. If my initial meeting prompts me to think, I need a brokerage agreement, that is a sign that I need to move on... Good Luck!

I believe we have more trouble with buyer agency agency agreements than our buyers. Once you explain the benfits and what you can do for them as their agent most are happy to sign.

Since agency law differs greatly from state to state this is a tough subject to generalize about.

My practice is actually in Virginia. We are required to have a Disclosure of Brokerage Relationship signed, but not a Buyers Broker Agreement (aka Exclusive Right to Represent Buyer Agreement). It is my opinion that a conversation is simply more powerful and effective than asking a buyer to sign a document that I would never enforce. If my agents are out there taking good care of our clients and thoroughly explaining the process, they are likely not going to taken advantage of.

When an agent comes to me complaining that they feel a client (buying or selling) has "done them wrong", we sit down and analyze everything that has happened and think of things that we could have done differently that may have caused the buyer not to have "done us wrong". Many time, our instincts tell us that we did everything perfect, but upon in depth analysis we see the picture more clearly. While this isn't fun- I believe that it is much more constructive and healthy than discussing- "how can we go get our money"! As I stated before, these conversations rarely ever have to happen (good job, guys).

As for requiring pre-qualification before getting in the car, see my above response. In my opinion that policy leads to many qualified, but understandably nervous buyers slipping through the cracks.

BTW- This is Edward Berenbaum (again)- I just created an account, but my name isn't showing.

Whew! After reading this post and many comments I am concerned in the lack of understanding of agents and agency relationships.

I am further disenchanted by the fact that FREC and all the agencies of Realtors are not promoting buyer agency.
Recently in Florida they removed transactional agency notice. No warning to the public.

Are all concerned about losing half of the commission?

IN the future, I predict, Listing agents will represent sellers interest only and Buyer's agents will represent Buyers only.

I will not even attempt to enlighten those that have little concern about agency. "you just want to get paid".
I have seen many professional agents doing things right and representing their clients properly. I also have see a lot of irresponsible agents.

Policing these rogue agents is not my job, many say. It is our job. If they bring the industry down, it will bring you down.

My opinion for what is worth.

Joseph Beauvais Owner/agent
SunnySpotRealty.net
239-770-0686

"Third, it really doesn't hold much water anyway as the buyer can dissolve the agreement at any time."

And there it is. If it doesn't hold much water, what is the purpose of it? If you are explaining agency, the differences, qualifying them and yourself, then I don't see the point of getting a piece of paper signed, except to protect the agent by making the consumer feel that they have signed some official 'contract' and they need to only work with that one agent...be it for one house, one area, whatever. I'm talking about sales associates practicing as transaction brokers.

I don't like the buyer agency contract (fiduciary to the buyer here) because the whole concept is too new on Long Island. There are too many agents that view it simply as a conduit for a paycheck. Let them learn the nuances of buyer representation by following the fiduciary requirements inherent in the representation first; when they demonstrate the ability to put the paycheck on the back burner without making buyers feel "stuck, and achieve success with buyers that choose them for the right reasons, maybe I'll view it differently. Until then, the buyer agency agreements are doing more harm than good in NY. Particularly with some that feel that, absent the contract, no representation will be offered. Clearly, a bad real estate candidate to practice buyer agency.

Besides, BA never required a contract in my previous experience (diff. state)- why not just earn the money by locating the right property at the right price for the buyer?

I just want to say that I was burned once by not having buyers sign a Buyers Brokerage. I listed their home then sold their home, we had not found them a home so they moved into temporary housing while we looked. I showed them a custom $420,000 home that the builder had not listed yet but was known to work with Realtors and pay commissions. Because of working with the couple for almost a year, selling their home took 8 months, the market was just beginning to slow and the builder was desperate. Needless to say after showing my buyers the home I had to go out of town for a ouple of days. The buyers went back to walk around the home the builder happened to be there and told them if they cut me out of the deal she would drop the price of the house by the amount of the commission. They took the deal. Needless to say I learned my lesson. I will require a Buyers Brokerage with all buyers. By the way the builder has now gone under and the buyers found out the house had flooded prior to them buying it and the builder did not disclose, no home inspection was done, no seller's disclosure was given. Great example to use for buyers who don't want to sign one. With that we as Real Estate agents want to protest our buyers.

I meant we want to protect our buyers.

Midori- for a while I didn't like working with buyers because I was doing it all wrong. It's posts like yours that have led me to test the "buyer waters" again. Thanks for sharing it.

Terri: Your complaint about not having a BA was about your commission and had nothing to do with protecting the buyers. You were the one that introduced them to a builder who eventually went under. Having signed a BA with you would have done nothing to change that.

Edward-great thoughts...I take the prequalification process very serious and usually they have mortgage letter in hand before we even meet. It happens via the phone and with a great conversation. I think that a disclosure is pretty effective especially if you do not encourage a buyer broker agreement. It's a great thing we are all independent contractors its quite clear...there are a few that do not agree!

Thanks so much for answering my questions!

Terri- Thanks for you input and I agree we should protect ourselves. I appreciate your honesty and you know what...in life...what goes around comes around..life happens! :) Did those buyers call you for assistance?

Joseph-I cannot agree with you enough..pulling the transaction broker notice..it will be back I am sure. I think its strange..FREC believes that the general public understands and knows the various ways of representation! We are still using them for now but The Daytona Area Association of REALTORS is working on a different type of disclosure! I think for us it will help.

I always work with a contract -- end of story -lots of good advice here - and I agree with your points 100%. I always have a consultation, have the buyer get pre-approved before going to see properties, and they must sign a written agreement (which they can cancel).

Great post. I try to get them to sign but dont succeed all the time.

It amazes me the amount of agents who don't use them. I know laws are different depending on your state but I would not work beyond a few days/meetings without one. Usually around our second or third time out we enter into an exclusive buyer agency agreement.

JUL

2008

Midori - I've explained to my buyers that I want to work hard to find their dream home. But I don't want to show them houses for weeks - then find out they bought a house from someone else. If we committ to each other - we each have expectations. I expect they will buy a house with me and only me. They expect that I will "jump" when they need me and I do. Any buyer who has felt disappointed from past experiences will understand this and see the value.

Midori,

I enjoyed reading your excellent post and believe and agree with your statement :

As a profession imagine if we raised the standard and used some of these legal and binding documents to ensure our compensation.

AUG

2008

I received an email from an interested buyer on a listing I have that is an hour away on non commute time. She wanted to meet me at the property and possibly show her other properties. While she kept confirming our appointment, I brought up that I will ask her to sign the buyer broker agreement after our meeting. After continually stalling, she finally admitted that she is working with two other agents and cannot commit. Wow, it saved me from wasting my energy and my gas since the mention of the agreement revealed her other associations. She probably would have let me chauffeur her around and have one of the other agents write the offer.

AUG

Great post Midori -- I can definitely see the pros and cons of each side, of which there are many. I personally don't use them and have been raked over the coals a few times, but I think overall, the fact that I tell buyers I want to earn their trust, that usually works.

Also, at least in Ohio, procuring cause trumps bba, so apart from a court suit, it doesn't mean much.

SEP

I agree with you...and the ones that don't appear to be sales people always on the prowl. I am a professional, I have earned my designations, invested my money in technology and my time researching to be the best I can be.

For the commentor who keeps mentioning what is in it for the buyer? This is what it is: I have invested in myself, expertise in my market, understanding disclosures, knowledge about the community and strategy about negotiating, servicing the buyer with other like minded professionals. I attend the premier real estate conferences with MY money and time. If all you are about is putting someone in your car and if they buy ok, if not well I'll go home at wait for the next one, you are not a professional.

You get what you pay for is also true in real estate

There is a difference.

OCT

Hmmm! interesting views. Unfortunately some of the public views agents with little respect and appreciation regardless of designations, experience and dedication. Loyalty and appreciation for the work you have done is conveyed by a few in our society. Why? Because they feel we need them not the other way around. They only need us for information on homes available and to drive them around sometimes.

When you have a buyer wanting you to assist them as a buyers agent, then it is your job to explain the advantages of doing so in the same energy and enthusiasm as when an agent list a home. No less. This should come automatically.

Why?
With my exclusive buyer broker agreement, they are allowed and encouraged to get the best deal they can whether it be a foreclosure, short sale, auction, for sale by owner or any other type of available homes. You see my agreement is a contract between buyer and Buyers exclusive agent. If they purchase any home I receive a minimum of 3%. They are told before making an offer which ones they will have to contribute to. I agree to give them 100% loyalty and in return I expect no less.

No tricks only gains for the buyer and they are fully aware of all terms of the agreement. I keep them busy but also give them a copy to present to any agent or developer upon meeting them at an open house or while viewing any home for sale.

You must have some sales training and believe in yourself and your value as a practitioner of real estate to present an agreement that is agreeable. I hate to see how many try this by saying, "I need you to sign this".

"All information in the mls is deemed reliable but not guaranteed." As well as any form of advertisement. I, in my 28 years of serving the public have found countless costly errors in print. Should the buyers not have been working with me "Exclusive buyers agent", they would have only found out the expensive way. When explaining the agency form, I give the buyers a couple of examples.

After so many years doing this, I am not jaded and still get excited when my buyer finds a beautiful home at a great price. They now will be my source of future business.
Not to brag too much, but, I just had an attorney purchase a home and gave me a very high complement on my knowledge of contractual law. It is a testimonial on my website.

Words used to present anything is critical in the outcome. Failure to convince the buyers to have an agreement can so easily be blamed on the agreement or the lack of the publics awareness. That is your job. Do it well.
I have only had one person this year that did not want to sign. I walked. After explaining all of the advantages of working with me as an Exclusive buyers broker and they did not agree means they either did not believe me or they had intentions of sticking it to me. Trust me! This is 95% of the time not a good buyer if you did your job. Walk!

If you would like to see a high tech website, with a lot of bells and whistles including most any information a buyer could dream of, visit my website.

Cape Coral Real Estate Search thousands of Cape Coral, Bonita Springs, Naples & Ft Myers homes for sale with our Free MLS Search. We have the Largest list of homes for sale in Lee County.

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