"Sign here" - why I ask for a buyer's agreement

By
Real Estate Broker/Owner with Robin Rogers, Silverbridge Realty, San Antonio, Texas 398351

When I work with real estate investors, I ask for an exclusive agreement in writing before I start searching for their next investment property. Here's why:

 

6015 Wood Pass San Antonio Texas 78249The San Antonio metro area is huge. There are a lot of properties for sale here, including potential flips, multi-family, and single-family rentals. Most of the good multi-family properties, the ones that are making money, aren’t for sale. Most of the bad ones are for sale because they’re not making money and/or because they are a real pain to manage. The good single-family properties will appeal to home buyers as well as other investors.

 

I don’t want to waste your time by sending you every single property for sale, including the bad ones. I could save a lot of my time by just emailing you every single property on the market for you to analyze, including the ones that are in sketchy areas of town—you may not even know which ones they are. Some agents, especially those who don't specialize in rental properties, will send you everything that is on the market in the hopes that one will stick.

 

I have access to all the properties on the MLS, including foreclosures, and I will go through them to narrow the list down to omit those I believe wouldn't meet your investment goals. Not that I am a snob, but a rental property’s location is crucial: it will be easier to manage and more appealing to prospective tenants.

 

I do the research for you; that is my job. I analyze rental rates and average sales prices to find opportunities for return on investment. I read between the lines of every listing to figure out if it would meet your criteria before I schedule a showing.

 

You could deal directly with the listing agent and not work with a buyer’s agent. The listing agent would be thrilled with that arrangement: they would represent the seller, not you, and keep the full commission instead of sharing it with a buyer’s agent. In return, you’d get to do all the legwork.

 

I don't want to waste my time. I work on a contingency basis. In order to have a shot at getting paid for all the work I do, I ask you to commit to working with me. I think that's fair. After all, I won't get paid at all unless I find you a great investment.

 

And if you don’t like working with me, then you can cancel the agreement. Just give me 24 hours' notice so I can cancel the showings.

 

Posted by

 

Robin Rogers, REALTOR, Broker-owner, TRC, MRP, CRS

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Comments (79)

Anonymous
Kathy Marshall

Great post...and oh so true!

May 06, 2015 05:41 AM
#60
Anonymous
Grace Ruud-Papadopoulos

I absolutely love this post! Here is another reason why: I worked with a buyer where I showed him many homes and was the procuring cause which included writing the offer, negotiating and securing a contract, home inspection, pool inspection( 0 down, great pricing deal on this home, closing costs paid and pool repairs over 4000.00 that I found seller is going to pay + GREAT DEAL). After 2 months of working with a mortgage company I got a text from the lender that said the buyer needed to amend his taxes????Next day the Listing Realtor sends a message to let me know buyer is NOT qualified to purchase a home? buyer or mortgage company is responding to me. A few days later new lender contacts me to let me know she is working with buyer to give a loan commitment by April 10th as in the contract. Deal is to close April 30th. Listing realtor puts home back on the market, not responding to me at all. One week later lender says she is sending mortgage commitment........Listing Realtor nor her Broker answer any of my emails........ My Buyer and Lender continue moving forward on the contract to schedule closing. I email the buyer and let him know that we need to do a walk through before closing. This gets me a phone call from the buyer to schedule. There is still the question, has the pool repairs been done? I email the Listing realtor once again and this time I receive a response that says "Have you spoken to your client?" talk to him. Speaking to my client he then sends me a text message where the Listing Realtor has plans of doing the walk through with my client and explains that the lock box was taken off so I couldn't access the home. Pool has not yet been fixed and we are 4 days from closing. I work with pool Inspector( ours) to get an estimate of what needed to be fixed and totals for him to do them as stated per our Addendum. After finishing this estimate and sending over to the Listing Realtor, later in the afternoon I received an email from my Buyer with two sentences stating that my services were no longer needed, thanks for the time spent on the endeavor. Then another email from the Listing Realtors Broker that says he is in receipt of my clients email and The Broker will be doing the closing with my client. Do not email the Title Company or Speak to anyone else about this transaction. What do you think? This is Definitely why you need a buyers agreement. In my 12 years as being a Realtor, never, never have a deal so unethical! Listing Realtor was working with my client the whole time........

May 06, 2015 05:53 AM
#61
Ruthmarie Hicks
Keller Williams NY Realty - 120 Bloomingdale Road #101, White Plains NY 10605 - White Plains, NY

@Marte Cliff - I've seen this several times.  It seems to happen when the market has a ton of listings. Sometimes it can be because the buyer has run the buyers agent ragged, sometimes it happens because the buyers agent has agreed to work at a discount,  but more often than not its simply a lazy buyers agent. I admit, I was sorely tempted to offer a discount during the peak of the bear market for some buyers to do their own legwork.  These  buyers were all over the map with no end in sight and weren't about to pull the trigger until they saw all 100 homes they might be remotely interested in.  

 

At the end of the day, I decided this type of activity wasn't fair to listing agents who would have to pick up the slack and show the home.  I ended up dropping many of these buyers because they were simply never going to commit and I was spending way too much time and a fortune on gas. 

May 06, 2015 06:24 AM
Shannon Aspeslagh
Inteam Realty - Mesa, AZ
In touch, In tune, In to you! Let us get you IN!

Robin,

Great article!  I love that you are looking for a "serious" buyer because you have lots of foot work to do before hand! 

Great job!

May 06, 2015 08:05 AM
Nathan Gesner
American West Realty and Management - Cody, WY
Broker / Property Manager

Buyer agreements are required in my state, though most agents don't sign them until they are ready to draw up an offer. It's just smart business.

May 06, 2015 08:09 AM
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

Book and MARKED!!  This is a great post Robin.  Not only is the buyer rep agreement important, but an unrepresented buyer has NO FIDICUARY.  Listing agents who double-end can't run comps.  If they do, that would be a conflict of interest. 

May 06, 2015 09:55 AM
Kimo Jarrett
WikiWiki Realty - Huntington Beach, CA
Pro Lifestyle Solutions

Great post. Unfortunately, many agents lack the confidence to be a professional. Therefore they end up as order takers and dreamers, hoping that their buyer who isn't under contract will use their services to the closing table. Without a contract, you don't have a client, just like the agent, another dreamer IMO.

May 06, 2015 11:42 AM
alain raynaud
RE/MAX OLSON - Westlake Village, CA
The alain & Angel Raynaud Team

Great post however the demanding investors are not the ennemies. They do not know better  at least most of the time. We have to educate them on what we're doing and what they would gain signing an agreement with us. I  have more problems with what they read online from some "specialists" that depict us as monsters

May 06, 2015 12:03 PM
Pat and Ed Okenica
DRAKE REALTY Lake Oconee Ga - Greensboro, GA
Lake Oconee Ga Real Estate

Excellent words of wisdom for all of us! Thanks for reminder of what our time is worth!

May 06, 2015 12:51 PM
Sharon Parisi
United Real Estate Dallas - Dallas, TX
Dallas Homes

Robin, I like your approach to explaining this sensitive topic and document. Ninety-nine percent of the people we work with would not work the hours we work, with no assurance of being paid.  Well done!

May 06, 2015 03:51 PM
Mary Hutchison, SRES, ABR
Better Homes and Gardens Real Estate-Kansas City Homes - Kansas City, MO
Experienced Agent in Kansas City Metro area

Very smart policy--and I'm sure the investors respect you right from the start as well, knowing you are a serious professional and will work hard for them once they hire you!

May 07, 2015 12:13 AM
Monica Roselli
Coldwell Banker Realty - Pembroke Pines, FL
18+ Years of Experience

What worries us is we don`t see any other agents responding from the Miami area!!! We need to make this a standard practice!!!

May 07, 2015 12:30 AM
Linda Love-Rose
J. Rockcliff Realtors Inc. - Oakland, CA

Compelling argument.  You NEED to get paid.  Continue to stand your ground.  Well said!

May 07, 2015 02:42 AM
Anonymous
Mary Duperre

Can you legally write up your own buyer contract? Can I go to my lawyer and have them write it up? I was told I needed to use the Realtor contracts.

May 08, 2015 12:00 AM
#73
Grace Ruud-Papadopoulos
Grace Ruud-Papadopoulos - Destin, FL
Trusted in more neighborhoods

Mary if you are working under a Broker then you have to follow what your Broker instructs.  It is always better to follow the Realtor Contracts as most often it is less liablility.

May 08, 2015 02:29 AM
M.C. Dwyer
Century 21 Showcase REALTORs - Felton, CA
MC Dwyer-Santa Cruz Mountains Property Specialist

Very well articulated post about what you do and why your work is worth an exclusive agreement, Robin.    Kudos for getting it featured!

May 11, 2015 01:53 AM
Margaret Kapranos
Berkshire Hathaway Home Services - Novato, CA
San Francisco Bay Area REALTOR. 415-608-5070

  Totally fair!  Go get em...

May 12, 2015 10:07 AM
Donna & Larry Johnson
Keller Williams Real Estate - West Chester, PA
Chester & Delaware County

Our office requires that we have a buyers agreement! Once you get acquainted with them it rolls of your tongue.

May 14, 2015 01:57 AM
Eileen Burns
Trans State Commercial RE Ft. Lauderdale/Miami/Palm Beach - Fort Lauderdale, FL
FL Probate Agent, Hotel & Land Specialist

Discussed this very subject at our Palm Beach Active Rain meetup with Donald Urschalitz as he received a referral from another AR community member two years ago.  Take about vasilating buyer!  Then he calls and is ready again.  Time to get that buyer's agreement out if it is even worth working with these folks.

May 14, 2015 08:32 AM
Dama Scott
One World Realty, Inc. - Palm Beach Gardens, FL
Evergrene Resident Specialist

Ok, we have the agreement out.  And, he's coming next week!

May 14, 2015 09:27 PM