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Working Exclusively Is An Important Message Your Client Needs To Know

Working exclusively (in real estate) means a client who grants a real estate broker sole rights with regards to his/ her real estate/ housing needs. This subject can be pretty straight-forward in a selling (listing) situation where the seller appoints one real estate broker to handle the sale of his/ her home. On the other hand, the purchasing side may be a little more "tricky" for some.

Most real estate buyers - if not educated about the "exclusivity" will usually call a few real estate agents. They would call around town with their criteria to work with. If you are one of them who received the call and did not talk about the exclusivity agreement, you might end up "working" for free ie. those hours you use to research properties, preview properties and yes, even show properties.

You would not have done your job if you did not spell out this nitty-gritty, often times sore subject of "Exclusivity" for agents.

Why? Because talking about HARD subject is difficult. So, most avoid it. Then, we end up venting and ranting on blogs here. I understand this because I went through it myself.

Today, my business has gone to the next level. There are some policies that I have put in place for my clients, exclusivity included (Read how I get mine below). Just as much as they interview me as a realtor(R) candidate, now I have confidence to interview them. Sometimes I say, No Thank You. I can do that now because I have limited time and a good pool of clients to choose from. (Please understand my heart that I speaking with humility here, not arrogance). Just for clarification, I do not select clients because of their price range. I select clients whom I can meet their needs, time and schedule. Often times, I have clients that I counsel through the "clean-up" credit process. So, no, I don't just work with clients with high price ranges. During this interview process, I never fail to explain how I get paid and how the exclusive agreement works.

Back then when I was just green in the business, I was just excited that I got called at all. I definitely did not mention about this sticking point because I was afraid that when I do, they would not want to use my services. Then I would not stand a chance at all. I wanted to impress them with my work ethics in hopes that they would use me. Thinking back about a few past incidences, sometimes I wish those people would have done just that (jump ship). Then I wouldn't have wasted my time and energy on those buyers.

What a difference it was just from a few years ago. Now, I do know that when I talk about this, I am sure I will have many that will leave a comment about, "Yeah, I never work any other ways".... So, this next message may not be for you. It is for those "Loreenas" who didn't dare to speak up about Exclusivity. My advice to you is to Do Your Best. I understand your situation. When you have a "client" to work with, at least it keeps you busy and off the chair. Maybe not in terms of a paycheck at the end, but your research, preview and showings will not turn to waste. Many times, because I have done ALL these work for nothing, the next client who calls and fit the area profile, I just whiz them away with my knowledge about the market. How did you think I became THIS good - if I didn't work freebies at all? No sweat. It's all good. I still encourage the agreement whenever possible though.

How Do I Do It Now?

I never fail to mention about the exclusivity. I talk about it during our first conversation - either on the phone or face-to-face. Then I explain to them how I work: I require a hand-shake on exclusivity and start a "let's get to know each other" trial period. Should the relationship we want head in a positive way, we can sign an exclusive agreement then. Or the way I do it, at the time we put an offer on the house, I include that as a formal paperwork. I can do business with a handshake. My words are worth gold. I trust that my clients will do the same.

[Yes, when it did not turn out the way I want, they either end up not purchasing at all or doing something else, look at the above about how I view those times I spent with or on them. In my books, nothing goes to waste!]

It is your job to discuss about this very difficult subject. I feel my method may be a bridge between the HARD stuff and yet it gives the client a chance to evaluate you. So, let your personality, knowledge about the markets and work ethics shine.

Note: All contents are original. Consider subscribing to my blog for fresh business ideas, often creative and unique. It is my intentions to bring you effective blog contents that will could make you feel that it was worth your time to subscribe.

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I proudly serve and sell real estate in the northern suburb cities of the Dallas metroplex. If you are thinking about purchasing or selling your home in neighborhoods of Frisco, Plano, Dallas, McKinney, Allen, Little Elm, Prosper, Celina, Richardson, Dallas M-Streets, Dallas White Rock Lake area and other surrounding areas and more importantly, want to work with a local area expert, contact me immediately.

It is a competitive market, hence it is important that you choose to work with the realtor who knows these communities like none other. I employ a systematic market approach in selling your home - an intentionally unique proposal that most real estate agents do not use. If you care to be on your way to a successful closing, contact me immediately to see how different my proposition will be.

Contact:
Loreena Yeo
Realtor®/ Broker of 3:16 team REALTY
(214) 783-2210
loreena@loreenayeo.com

Posted by Loreena Yeo - Broker|Realtor(R) of www.Frisco-TX-Homes.com (214) 783-2210 on 10/01/2008 05:17 PM

Comments (23)

Understanding Exclusivity in the Home Buying Channel

realtor success tips, real estate agency

Originally posted at: faithfully frisco tx homes for sale: Working Exclusively Is An Important Message Your Client Needs To Know

This post has been included in Texas Information Collin County, TX Information Frisco, TX Information
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23 Comments on Working Exclusively Is An Important Message Your Client Needs To Know

OCT

2008

New clients must become familiar with the way a real estate transaction works. Each local Realtor in every state educates consumers on how it works. Exclusive agency is important.

Thanks,

Tom Davis

World Class Delaware Realtor

I agree with what you say. I was one of the "green" Realtors complaining about buyers not honoring their contracts even after explaining them in depth. But after getting burnt once, I realized 2 things. 1. I had a feeling that there was something about the client that didn't sit well and the way it ended wasn't a shocker (always go with your gut feelings and 2. that there are no wasted experiences. I have learned a lot from the good and bad. Thanks for the blog.

Loreena, It has been my experience that most buyers have no problem at all with signing a BBA. In fact they prefer it. The consumer wants exclusivity. It's agent that have the issue with BBAs. Their issue, and misunderstanding, is that the BBA is all about commission when the reality is that is just a very small part of a BBA. The BBA is the outline for the entire transaction. It is also a bi-lateral agreement. It's an obligation for a buyer to be loyal and for the agent to perform.

Loreena,

Thanks for the post. This is so important especially for buyers. We cannot assume that they have the correct information. Educating the buyer and seller is in fact our job!

Loreena

My opinion is that if we are hesitant to approach the buyer with our contract, we already know they do not want to sign it and we already know that these buyers will not be exclusive to us. Call it instinct or whatever, we already know!! We have only ourselves to blame if we work for nothing..,As William Collins mentions above, educating the buyer and seller is in fact our job!! Nice post.

Loreena, being exclusive is the ONLY way to go. Educating clients on the benefits of this is the only way to go.

Loreena, another great article about one of the fundamental things of our industry that we need to take care of up front. Why gamble or invest the time without one considering the gas prices and credit markets right now. Realtors have to protect themselves as well.

OCT

2008

The Texas form is 4 pages and scary to look at as a buyer. I've been thinking about creating my own form that would just outline the basics and have my buyers sign it upon first "email" since email is usually the first contact I have with most of my clients.

I have been in real estate for almost 2 years and when I was taking courses there was alot of emphasis on the Buyer's agreement so I have had some good experiences with getting this form signed however the other agents in my office always ask how I get anyone to sign them. If we as agents do not see a benefit in them then there is no way that a Buyer will see a benefit.

There have been times that I did not have the form signed and they have gone elsewhere however it is all a learning curve as well. In Ontario, the form is 3 pages which can be a little intimidating but I just keep things light and explain everything and it does not seem so bad.

In our office you don't have a choice if you are going to represent the buyer.

Gene - I understand that some offices may implement this. It is a good one, actually.

Your'e right on on this one Loreena, I like what you said here "I do not select clients because of their price range. I select clients whom I can meet their needs, time and schedule". You go!

OCT

2008

Good information in this post. We need to help buyers understand that the buyer's agency agreement binds us as the agent to protect their interest. If you put it this way then they are not as hesitant.

OCT

2008

Loreena,

It is important to explain exclusitivity to buyers. Many simply don't understand how the industry works and how we get paid or don't really think about it if they do know.

I don't use EBAs/BBAs at all. Never have. And as far as I can recall, I've never regretted it. Sure, I've lost buyers to other agents, but in every single case, it was a good decision for the buyer - either because we weren't clicking or because they found an agent who better met their needs for one reason or another. I lost someone earlier this year because they changed their search parameters and realized that they could probably do better with someone more familiar with their new desired location. It hurt my feelings and made me mad for about 15 minutes, but if I'd had a BBA with them, I'd have NEVER enforced it and within 20 minutes I realized they were right.

I do like your approach of asking for a handshake agreement and if I ever feel the need to insist on exclusivity, I might give it a try. But I guess I just don't see the necessity of it at all. I know I'll work hard for them (so no written agreement needed there) and I figure if I do that, they'll stick with me.

All that said, I do remember back in the days of a Seller's Market (when every breathing agent had 20 buyers to work with and nothing to sell), I felt that an EBA made some sense. Those who were willing to commit to their buyer agent might get first dibs on hot new listings, or be the one the agent chooses to spend his Saturday with.

I felt exactly the way you did, Jennifer. Here are my renewed thoughts though:

In the State of Texas, if you do not have a signed EBA, you are the Seller's subagent. A signed EBA makes the clients the principal - to whom all our fiduciary duties are owed to. Since I am the broker ie. the rule maker of my brokerage, I could enforce it or not. But I think it is my duty to explain to my clients what my expectations are of them, and what theirs of me are.

I also tell them and give them a termination agreement, should ever they need to execute it.

This is also a test of how well you can get these clients "loyal" to you. I am a very loyal person - as you know and I only work with loyal clients. Those that send me around chasing wild geese with other agents, I'm very politely going to rescind myself. First, I do not want to waste my time. Second, I'll give others the chance. I am very busy that I cannot afford to work with non-exclusive clients.

I see a slightly different problem... We have prospects who walk into a display home and select one sales associate and then return unannounced to buy from another sales associate. We are seller's agents so we can't demand exclusivity or even the courtesy of working with a single agent. We emphasize the importance of developing meaningful rapport, prompt followup, adding value to the sales process, and constant contact with the goal of setting appointments.

Ryan - I understand your concerns. They are real and valid. All I can say about it is that the agent needs to understand the difficulty of working with several salesperson at the same community could pose a real problem about commission at the end of the day. I feel this is not a difficult education for an agent to grasp and therefore must be mentioned (not in front of the buyers, of course!).

My thoughts about exclusivity with one salesperson - perhaps that's not necessarily for different buyers. But if that salesperson has done a great job the first time, there is no reason why the agent would not look for the salesperson again when he/she has another new buyer.

OCT

2008

The Secret

Loreena - Thanks for this blog. I fall under that "who wouldn't dare speak about exclusivity" group. I usually had an issue about asking someone to commit to me before I earned the right and I think there was a little bit of fear of talking about how I earned a living, especially since there are so many buyers out there who really think we make all this money. So I like your approach to the conversation. I'm going to use it next time. So for what it's worth...Thanks!

OCT

2008

Jessica - I just want to encourage you to take your time to bring this up. There is no rush. I understand how you feel because I was in your shoes. Your confidence of bringing this topic will come with time and more transactions. I know it because that's how I did it.

OCT

2008

Thanks for the words of encouragement. I needed that :)

OCT

2008

You're right, it is difficult to pick and choose when you are dying to be chosen. The focus you suggested can be considered as "giving back to the community" if you will. There is always so much to learn, green or seasoned. Enjoyed your post.

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