Buyer Broker Agreement... Is it still effective in today's market?

By
Real Estate Agent with Essential Properties Inc

Through my career, I have heard both sides to the buyer broker agreement. For many Realtors using the agreement, they are very effective and they would not consider working with a client without it. On the flip side, Realtors who do not use it, have found they are successful and see no need.

This past year, I have come in contact with many Buyers who have a buyer broker agreement with another agent, yet they are still in need of information. Of course, I limit my conversation and never advise to cancel the agreement. But, I am still curious as to why they are calling other Realtors and not their agent of choice?

In some cases, the buyers with Buyer Broker Agreements are wanting to change agents and/or cancel their agreement as if their current business relationship is meaningless. I understand that not every client is going to be a business match. But do you think that buyers today are taking the agreement lightly and feel that it's just another piece of paper and they can just cancel when they want? Is it even worth it to use in today's market? What are your thoughts?

 

 

Comments (6)

Mike Russell
Mike Russell Real Estate Group - Overland Park, KS
Overland Park Kansas Real Estate

How can you effectively councel a buyer if you are not their agent. Without a signed agreement you are a glorified tour guide. Not only that the buyer may think you are working as their agent when in fact all they are is unrepresented or defacto transactoion broker. I don't see how that helps anyone. It also open you up to a lawsuit.

Jun 17, 2009 08:28 AM
Ralph Gorgoglione
Maui Life Homes / Metro Life Homes - Kihei, HI
Hawaii and California Real Estate (310) 497-9407

In theory,  it sounds like the best thing to do.

But when you get right down to it, it can be cancelled by the buyers.

So the real element is your sense of loyalty that you can develop.  If you feel that is there, then that probably means more than any piece of paper.

In some cases, you may suspect buyers who have their own hidden agendas where a buyer broker agreement might seem to fit the cause.  But even then you have to ask yourself if you really want to work with someone like that.

Jun 17, 2009 08:28 AM
Mike Russell
Mike Russell Real Estate Group - Overland Park, KS
Overland Park Kansas Real Estate

Our buyer broker agreement can't be cancelled by them. It is a legal document.

Jun 17, 2009 08:40 AM
The Scott Loper Team Bux-Mont Premier Properties
Keller Williams Real Estate - Montgomeryville - Lansdale, PA

If used and presented properly, I believe Buyer Broker Agreements are effective (at least in increasing buyer loyalty).  If nothing else, they're in the buyers' minds and cut down on the "accidental" loss of a buyer who just happens to stroll into an open house, new construction site, or call the agent on the sign.  For an unscrupulous buyer who doesn't want to honor the Agreement, maybe they seem meaningless to that buyer.  The Agreement could still be enforced, however, if the broker thought is was worthwhile.  On the flip side, if the buyers are not getting the information/service that they need, perhaps those agents are breaching their own Agreements and giving the buyers good cause to terminate.

-Scott

Jun 17, 2009 08:41 AM
Rodney Barnes
Essential Properties Inc - Goodyear, AZ
Real Estate

Hi Michael, John and Scott, Thank you for your comments.

Our buyer broker agreement would need the Brokers authorization to cancel as well. But why would you deny it and continue to keep a business relationship with someone who no longer wants it. That would drain my energy.

I am not saying having one or not having one is right or wrong, I simply wonder where the loyalty truly lies with buyers today?

Jun 17, 2009 09:02 AM
Dan Grammatica
Realty Experts, LLC - Torrington, CT
e-PRO

Some States like CT require a buyer broker agreement before you can show another office's listings.
I get buyers signing into my website to search the MLS because their agents don't have a very good website. Saying "they are working with an agent".
Search 30,000 CT listings http://realtybydan.com

Jun 17, 2009 09:03 AM