Realtor tips - Protecting yourself when working with buyers

By
Real Estate Agent with Sand Dollar Realty Group, Inc. BK627826

The following are some tips for Realtors® when working with buyers.  If you are a buyer, then you know you have a good Realtor® when they make you follow these steps.  If they don't make you follow these steps that tells you something about your Realtor® too.

With the high inventory of homes for sale, it has been a buyer's market for quite a while now.  Today the Realtor® who has access to a steady stream of qualified buyers is in a golden position.  The issue that most often plagues buyer agents is working with a buyer only to have them flake out and end up either not buying a property or not buying it through you.  These issues have caused many a buyer agent to want to pull their own hair out in disgust. 

The current economy has gotten many people nervous, especially people who are potentially buying big ticket items like a new home.  So you certainly cannot expect every prospective buyer to become a homeowner.  However, there are ways to screen out the wannabe buyers who may want to try and buy a house at some point in the future from the serious buyers who are going to buy a house within the next 90 days or so, and that is what this article is all about.  Working with buyers is a three-step process.  The first step is the qualifying interview, the second step is the buyer agency agreement, and the third step is finding and selling them a property. 

The qualifying interview may be a longer process for some Realtors® and it may be a shorter process for others. There is no set way to do it, but at some point you are going to want to sit down with a prospective buyer, learn their needs and desires, get them pre-approved for a mortgage, verify their financial situation, and get them started on their home-buying journey. I urge all Realtors® to not skip this step.  Just because a buyer calls you up out of the blue one day and asks you to show them a property, don't drop everything and drive over to meet them just because you have nothing else going on.  Showing properties to un-interviewed, un-qualified buyers is not only a potentially big waste of time. It can also be a potentially dangerous situation.  How many other businesspeople go out and meet strangers at vacant houses on a regular basis?  Be wise, screen them first.  If your mortgage broker has all their financial information and has approved them for a loan, odds are they are a real buyer and not a time waster or worse, a criminal.

The second step is the buyer agency agreement.  No Realtor® would ever list a house for sale without a signed listing agreement. In fact the MLS requires you to have one.  But I would guess that 80% or more Realtors® will spend hours and days of their time working with a buyer without having a signed buyer agency agreement in place.  These agreements not only legally protect your commission, but they also provide you other protections.  Other Realtors® must inquire if a buyer is represented by another Realtor® under a signed buyer agency agreement.  If the buyer is represented, the other Realtor® is ethically prohibited from working with that buyer (See NAR Code of Ethics Standard of Practice 16-5.)  If the buyer is not represented, another Realtor® could ethically get them to sign an agreement and potentially snatch your customer away from you. Lastly, a signed buyer agency agreement can help mentally reinforce to a buyer that they are working with you as "their" Realtor®.

The third step is finding and selling them a property.  This is probably the easiest step right now.  There are plenty of homes for sale and many sellers are very motivated to make a deal happen.  Getting the buyer's financing to go through is a different story for a different article. 

I will recommend to any Realtor® that is focusing on buyers to get your Accredited Buyer's Representative (A.B.R.) designation.  The course goes into great detail regarding all three steps that I have outlined in this article.  Sales are up, so get out there and sell a home to your buyer today.

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(Copyright © 2008. Sand Dollar Realty Group, Inc. All rights reserved.)

Rob Arnold - Your full service and investor friendly Realtor in Orlando and Central Florida.

ABR, CPL, CRB, GRI, Managing real estate broker, Licensed mortgage broker, Notary Public

407-389-7318 / 1-877-389-7318    www.SDRhouses.com/   www.WeBuyHousesFlorida.com/

Learn to invest in Central Florida real estate and Orlando real estate. Investor mentoring and counseling available. We sell properties, list properties, and we buy houses cash throughout the Central Florida & metro Orlando area.  

I also provide flat fee MLS listings, For Sale By Owner, and menu-based services in most parts of Central & South Florida, the Space Coast, and the Treasure Coast including Orlando, Winter Park, Maitland, Ocoee, Winter Garden, Apopka, Altamonte Springs, Casselberry, Longwood, Winter Springs, Oviedo, Lake Mary, Sanford, Deltona, Debary, Deland, Mount Dora, Eustis, Clermont, Kissimmee, Winter Haven, Lakeland, Tampa, Sarasota, Bradenton, Miami-Dade, Fort Lauderdale, West Palm Beach, Port Saint Lucie, Melbourne, Daytona Beach, Ocala, Gainesville, Volusia, Brevard, and more.

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Joyce Kelley 02/22/2013 11:15 AM
Groups:
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ETHICS and the REALTOR
Florida Realtor® Network
Florida Rain Makers
Tags:
orlando real estate
buyer broker
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realtor tips
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Rainmaker
52,762
Bill Parecki
Savio Realty, Ltd - Hilo, HI
RS, ABR, RDCPro, SFR, E-Pro, SRS, AHWD

Nice blog!! There was a lot of good solid advise that everyone should listen to.  I always take the time to sit down with my clients and go over those details.

Aug 15, 2008 11:32 AM #1
Rainmaker
430,388
Frances C. Rokicki
Fran Rokicki Realty, LLC - Bolton, CT
Broker-Mentor,CRS

Rob, I interview with the clients and then we sign our buyer contract.  First.  Then, we work on the pre-approval before we talk or see properties.  I have worked that way for years.  It stops everyone from wasting valuable time.  Mine and theirs.

It's a Good Life!

Fran

Aug 15, 2008 12:02 PM #2
Rainer
85,414
Rich Mielke
REMAX Results, Frederick MD - Frederick, MD
REALTOR, Frederick Maryland Real Estate

These are important points to cover with buyers. The more they understand the process, including how and when the agent gets paid, the better for everyone involved.

Aug 15, 2008 12:14 PM #3
Ambassador
1,042,477
Russ Ravary ~ Metro Detroit Realtor call (248) 310-6239
Keller Williams Commerce - Commerce, MI
Michigan homes for sale ~ yesmyrealtor@gmail.com

Getting a buyer qualified and in the right frame of mind in this market is very very important

Aug 15, 2008 12:16 PM #4
Rainer
36,471
Addie Scharff
Beautiful Homes Realty - Los Banos, CA
HomeStaging REALTOR - Beautiful Homes Realty

Thank you for sharing this great advise, Rob!  I've never done this with buyer, and have often regreted it!  I have to work on learning to do it going forward.  I always seem to find an excuse as why I don't need it this time, but I think it's only a matter of trying it a time or two then it's most likely a breeze!  

Aug 15, 2008 02:15 PM #5
Rainmaker
1,136,378
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

Rob, Are you trying to imply that BAs actually need to do their jobs? I for one finds it very hard to understand why anyone would work with a buyer without doing their homework first. And getting a BBA signed? Why would we want to do that? Why should we waste our time being professional and getting our buyers to make a commitment? I'd much rather just be a buyer taxi service :)

Aug 16, 2008 04:01 AM #6
Rainmaker
1,315,708
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

The second step is the buyer agency agreement.  No Realtor® would ever list a house for sale without a signed listing agreement.  I think we need to do a better job of educating buyers about the benefits of having a buyer agency agreement.

Feb 22, 2013 11:21 AM #7
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Rainmaker
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Rob Arnold

Metro Orlando Full Service - Investor Friendly & F
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