I don't like Buyer Broker Agreements

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The other day and agent asked me what I thought of Buyer Broker Agreements.  He had recently lost a buyer to another agents and felt he needed to do something different.  I think he was a little shocked when I told him I would not use one.

In California, we actually have three forms developed by our association.  Two are non-exclusive and one is exclusive.  The exclusive one is actually 4 pages long and very scary.  It has lots of language of what the agent is NOT going to do and very little about what we are going  to do.  I am bothered by the concept that if the buyer buys anything,  anywhere during this contract (defaults) to one year,  the agent gets paid his buyer's agent commission,  even if the buyer used another broker. It also does not offer an opportunity to fire the agent.

He is my test. Would you sign it if you were a buyer.  Let's say you move to another area.  You meet an agent who wants you to sign an exclusive agreement,  meaning you have to use them,  no matter what.  Even if this is the world's greatest agent (which is questionable since you just met him) does any agent really know an entire market area.  I guess if you know EXACTLY where you want to live,  one agent could cover it but in most areas,  very few agents are really qualified for the entire market. 

But,  even if the agent says,  Yes,  I know every market in the area,  what would you gain from giving them an exclusive.    Don't you think that most of us would be better off with agents competing against each other .  Many times if is a race and another agent knows about a house or neighborhood that the buyer's agent missed.  It happens all the time.

For me,  I would never sign one .................. and if i am not going to sign it,  I will not ask my clients to sign it.

But,  there are buyers who use agents.  Maybe their agent is not available,  on vacation or is a part-timer with no lockbox key.  They let some dumb agent (like me) show them houses but call their agent when they find the house they want.

So,  what i did was to write a simple one page agreement stating that the buyer can use any agent but agree to use me if I introduce them to the house or show them the house.  It is my belief that if a client is a weasel,  they will not sign it.

Posted by


Guy Berry

Email - guy@guyberry.com

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Comments (9)

Wendy Montoya, REALTOR® Broker Associate, 254-315-4906
Towne Adams REALTORS - Waco, TX

I use the same "test". If I don't think I would like it or do it as a client, I don't try to use it on my potential or current clients. It's the golden rule. I really try to treat people the way I want to be treated as cliche as that sounds. So I understand your philosophy.

Aug 22, 2009 02:32 PM
Susan Emo
Sotheby's International Realty Canada - Brokerage - Kingston, ON
Kingston and the 1000 Islands Area

Obviously, in Canada we have different contracts than you.  I will not work with a buyer without our Buyer Rep Agreement signed.  If they only want to sign it for the specific homes I show them, that's fine but I don't get too excited as I know they will most likely use other agents.   When it is explained correctly to an honest, ethical buyer, they have no problem signing the agreement covering any homes in the area.  No signature, no showings as they have just shown me who they are!  Pun intended :0)

Aug 22, 2009 02:33 PM
John Rakoci
Eagle Realty - North Myrtle Beach, SC
North Myrtle Beach Coastal Carolinas

The buyers agent agreements by state associations would scare anyone. A small agency made up a 1 page (very large type) agreement and passed it by the house lawyer and state association legal dept. It works much better. Still doubt anyone could afford the lawyer fees to have one enforced.

Aug 22, 2009 02:33 PM
Marchel Peterson
Results Realty - Spring, TX
Spring TX Real Estate E-Pro

Years ago as a Manufacturer's Rep I worked with a gentleman who would get so carried away with the contracts that he would tick our principals off.  It left a bad taste in my mouth.  I want someone to use me because I'm providing them incredible service.  I don't want them to use me because they feel that they have to because they have signed a contract.  I have had a successful real estate career for almost 13 years now using this philosophy.

Aug 22, 2009 02:49 PM
Ron Parise
LocateHomes.com - Cape Coral, FL

One dumb agent to another....I dont like them either, I firmly believe that  buyers are shopping for real estate and a real estate agent and there is no need to force them to use me.  Im confident that if a buyer is talking to several agents, they will want to use me.  

 I have been persuaded,However. to use buyers brokers agreements for one purpose and that is to to provide me with a minimum commission, (if they choose to use me in the transaction)

Here (Fort Myers Fl)  we have a lot of property offered at prices less than $75000, (lots and lots of condos priced under $50000) I dont like the way it sounds but after expenses and my brokers share, there isnt enough "payday" for me to give these buyers my full attention. So if I have a buyer interested in the low end of our market, I use the buyers brokers agreement to set a minimum commission of $2000.

I haven't used the retainer section of the agreement to ask for money before taking someone out, but Im thinking about it for the folks that tell me "we are just looking this trip" 

Aug 22, 2009 04:36 PM
Leslie Helm
Tennessee Recreational Properties - Jamestown, TN
Real Estate For Trail Riders

Buyers have so much latitude now to research properties online, use their GPS to do a drive by and..if they like what they see...they may call the number on the listing agent's sign in the yard to jump start the process, rather than letting me work it for them. With a Buyer's Agency agreement already in place, I am less fearful of being left out of the loop when this happens. More and more, people have less loyalty and want instant gratification; it's very disheartening when you've already put alot of time into them and they connect with another agent on their own. When they tell that other agent, "I have a Buyer's Agency agreement," it put the other agent on notice that they are already working with someone else."

Aug 22, 2009 11:44 PM
Erby Crofutt
B4 U Close Home Inspections&Radon Testing (www.b4uclose.com) - Lexington, KY
The Central Kentucky Home Inspector, Lexington KY

I doubt I'd sign the one you mention, Guy.  Way too restrictive with no out.

BUT, I used Buyer Agent agreements when I bought houses.  The agreements were fair to me as the buyer and fair to the agent.  I don't mind committing to one person, but they've got to be willing to commit to me too and actually do the work I'm paying for.  Yeah, everybody says the seller pays it, but where does the seller get the money.

Too many users out there to spend much time with them without some commitment!



Aug 23, 2009 12:07 AM
Betina Foreman
WJK Realty - Austin, TX
Realtor, C.N.E., with WJK REALTY

Our Buyers Rep protects Agents who show/sell homes. It is voidable by either party, but it protects agents if they are the procuring cause for the sale. I don't work for free, do you? I always have my buyers sign one. It is a litmus test on wether they are serious or not in my opinion.

Aug 23, 2009 02:48 AM
Tom Boos
Sine & Monaghan Realtors, Real Living - Grosse Pointe Farms, MI
Providing the very best of service to Sellers and

They are a necessary evil.  If you are acting as a "Buyer's agent", you must have one in place.  I always tell my Buyers that if they ever want to end our relationship, all they need to do is inform me.  I'll be happy to tear-up the agreement and release them to work with another agent.  Nobody wants to be forced to work with an agent who, in their opinion, is not helping them achieve their buying goals.

Aug 23, 2009 03:49 AM