Special offer

"List" Your Buyer Clients

By
Managing Real Estate Broker with Howard Hanna Rand Realty License # 49FA1074963

Change is here. 

Soon, if it hasn't already occurred, you'll log onto the MLS and see offers of compensation to buyer agents of $1. Or $0. Or a figure lower than you may be accustomed to. 

While this makes some agents fearful that they will no longer be able to earn a living, other licensees see opportunity. This is their chance to differentiate themselves from their competition. For years, too many agents' value proposition to the public was that they were "free," or a code word of no extra charge, or nothing out of pocket, or you won't pay extra for the house, or some other useless dog whistle that suggested they didn't add value proportionate to their fee. 

Those days are coming to an end. 

The opportunity now is to get real with the buying public, and educate them on the crucial importance of having professional representation for what for most people is the largest transaction of their life. Housing is something that costs so much that for many it will take 30 years to actually pay off. It should never be a do it yourself project. 

How that looks is to have a buyer consultation that has the same shiny offering to buyers that we've been giving sellers for decades. A professional, informative slide deck or presentation that clearly spells out that not all agents are the same, and that who you choose to represent you makes a big difference. And once that proposition is clearly spelled out, an exclusive representation agreement should be executed that makes it official, just like when you list a property for sale. 

The act of hiring an agent should be official, on paper, signed by all parties, and with clear terms on the service rendered and the compensation paid, either from the MLS offering, the buyer client, or both in some cases. 

The smart agent who thrives in the new world we are stepping into will list their buyers the same way we list sellers. A professional consultation. A clearly spelled out service rendered. Compensation terms transparently disclosed. And a promise of performance that fosters confidence in the client where the buyer broker fee, whether rolled onto the purchase or paid additionally, is money well spent. 

List your buyer clients. 

Comments (26)

Kathy Streib
Cypress, TX
Home Stager/Redesign

I did a double take when I saw your name on the blogroll. What a nice and pleasant surprise. And, it goes without saying...excellent advice. 

Feb 20, 2024 05:32 PM
J. Philip Faranda

Thank you Kathy, I appreciate it! 

Feb 21, 2024 01:35 PM
Kat Palmiotti
eXp Commercial, Referral Divison - Kalispell, MT
Helping your Montana dreams take root

How nice to see you back here in ActiveRain. And yes, we need to have meetings with buyers the same as we've had with sellers. What do we offer and why? And what does that cost? For some, that's the way things have always worked. For others, times they are a'changing.

Feb 20, 2024 06:04 PM
Debe Maxwell, CRS
Savvy + Company (704) 491-3310 - Charlotte, NC
The RIGHT CHARLOTTE REALTOR!

PHIL!!!!!

SO good to see you here and guess what? In true Phil Faranda style! Great advice and you are spot-on. We REQUIRE seller clients to sign a Contract before any work is done, why do agents think buyers shouldn't hold us accountable per Contract too?

Loved seeing your face on my blog roll! Welcome back.

Feb 20, 2024 08:20 PM
Debe Maxwell, CRS

Just watched the video too - well done, Phil! 

Feb 20, 2024 08:26 PM
J. Philip Faranda

Thanks Debe, I appreciate it! I have fun with the videos, yapping is my super power

Feb 21, 2024 01:37 PM
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

They are a lot of boys that still work and be very effective and I agree with you overall in your premise.

Feb 20, 2024 09:11 PM
Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Wow hard to believe it has been a year since you last posted, and I just commented on that one now with that said will you be posting more or should we look for you next February?:)Endre

Feb 20, 2024 10:36 PM
Adam Feinberg
Elegran - Manhattan, NY
NYC Condo, Co-op, and Townhouse Advisor

That day is already here in Manhattan. We are members of REBNY in the city- and REBNY changed the structure effective Jan 1. It's now about 7 weeks in- and so far, most of the commissions offered to buyers agents are around what I would see prior to the new agreement.  It's still early though. I do suspect that quite a bit of the unchanged commissions is likely due to the concentration of co-op's - where a buyer's agent has a lot of work to do to ensure a buyer is qualified to buy in any particular building. 

I did make my first "pitch" to a buyer for a buyer's agent commission agreement. I briefly discussed it with the buyer in person when we met last week- but just sent out the agreement late tonight.  Honestly, while it's extra work (on top of all the growing list of extra work that I didn't have to deal with a few years ago), it's not that big of a deal. If you know your business well, then it's easy to convey value. In this example- I was telling my Upper West Side buyer that I suspect her ultimate match was more likely to be found on Riverside Drive or West End Avenue rather than between Broadway and Amsterdam- and she readily agreed with my assessment since she grew up on the UWS and while a first time buyer, has had friends in various buildings all over the neighborhood her entire life.  At this point, she knew that I was an expert in the buildings in her search area. I have a feeling despite all the scary headlines - my commissions as a buyers agent might actually go up (though that isn't likely to hold true with weaker agents). I am glad I have this experience, but for new agents entering the business, it's going to be a lot more challenging. 

FYI- I grew up in Rockland, and lived/worked in Westchester. I have lived in Harlem for 18 years this week. 

Feb 21, 2024 12:16 AM
Edward Gilmartin
CRE - Boston, MA

I wonder how AI will change real estate transactions in future. Buyers and sellers can receive information on home pricing and neighborhood as well as future of region 

Feb 21, 2024 04:31 AM
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

A Buyers Consultation Session turns a “Have To” into a “WANT TO” have Representation ! 
Now Fannie , Fredi , FHA,VA,USDA will all have to increase Buyers Allowable Closing Costs from 6% to 9%  !

Feb 21, 2024 06:16 AM
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

At a conference I attended in December... just after the GA lawsuit was filed I will be interested to see the outcome.  The representative for GAR seems to think because of our contract differences it won't end the same.  However, I have addressed with buyers my compensation for a decade in my BBA.

Feb 21, 2024 08:33 AM
J. Philip Faranda

Oh, I absolutely believe that the original suits were filed in Minnesota and Missouri for a reason. I don't think the copycat suits elsewhere will be the same either. 

Feb 21, 2024 01:38 PM
Jan Green - Scottsdale, AZ
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

I just wrote an article for a national publication to this effect. It's never been more important than to stress what we do and how we do it for what fee.  True professionals who follow your advice will be fine.  Those that don't take this seriously will be left off the gravy train. 

Feb 21, 2024 08:39 AM
J. Philip Faranda

Please post a link, I'd love to read it!

Feb 21, 2024 01:39 PM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

I have always had a consultation with buyers and sellers.  They all need to know what to expect in a transaction.   Still have not seen .01 or .00 for compensation in our MLS YET!

Feb 21, 2024 12:32 PM
J. Philip Faranda

the key word is YET!

Feb 21, 2024 01:39 PM
Elizabeth Weintraub Sacramento Broker
Elizabeth Anne Weintraub, Broker - Sacramento, CA
Put 40 years of experience to work for you

I began using buyer broker agreements in the early 1980s and rarely encountered any resistance all through the 2000's. You are absolutely correct that the agents who will be most affected are those who advertise themselves as FREE and do not the value of their own worth.

Feb 21, 2024 06:20 PM
Erika Madsen
eXp Realty - Mesa, AZ
eXp Realty Broker ~ CE Instructor ~ elm Biz De

J. Phillip it is SO good to see you in the rain again my friend! 

It is BEYOND time for licensees to learn, adapt and USE the Buyer Broker Agreement in their businesses. 

 

Last we spoke I was recreating my career in NC - we've since returned to AZ. Now I am an approved instructor with AZ Dept of RE

 

I have been teaching the Buyer Broker Agreement I'm my CE classes.

 

I've been saying out loud for years... our brokers require us to sign listing agreements or the Broker won't take the listing. WHY have we never done the same for our Buyers?!?!?!

 

Would you mind if I use some of your thoughts when I wake a video tomorrow to gain more student for my Feb 27 class. 

https://www.eventbrite.com/e/buyer-broker-now-is-the-time-3-hours-contract-tickets-843082581697

 

SO great to see you! Erika 

Feb 21, 2024 08:32 PM
J. Philip Faranda

Erika, please feel free! I appreciate it. 

Feb 22, 2024 06:48 AM
Beth Atalay
Cam Realty and Property Management - Clermont, FL
Cam Realty of Clermont FL

Hello J. Philip Faranda, it's great to see you in the rain. Nothing has changed in FL yet, as far as buyer consultation, why wouldn't we do that regardless? This would definitely stop buyers working with multiple agents as well as agents who work for free and actually give buyer credit from their commission.

Feb 21, 2024 08:38 PM
Michael Lamirande
Long & Foster - Devon, PA
Listing&buyer Agent/ leasing and investment proper

Great info! Also sparking a lot of useful comments. As a newer agent I'm bracing for this change.

Feb 22, 2024 05:42 AM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good morning J. Philip Faranda ,

As many have already said...glad to see you back and posting! It is BEYOND time for licensees to learn, adapt and USE the Buyer Broker Agreement in their businesses. I have been using this forever so nothing new ..always have that buyer consultation and go over agency and fee charged (I like that word better than commission). Great post..I so agree with your statement "The smart agent who thrives in the new world we are stepping into will list their buyers the same way we list sellers!"

Feb 22, 2024 06:17 AM
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Prop. Mgr, Wenatchee, WA

Hi Phil,
I envision this creating the need to separate the wheat from the chaff, so to speak. Some agents haven't been worth the .01 that might be offered in the future. Those who can't articulate and provide value are going to go hungry and leave the business. Maybe this is what's needed to elevate the reputation of the industry.  Currently, the level required to enter the business is pathetically low.

My tagline was always "Information Is Free. Knowledge, Experience & Integrity are Priceless."  It's time to show how priceless having a professional agent is.

On the other hand, I'd hate to see buyers go back to entering contracts without representation because they don't want to pay an agent.  It will be interesting to see how it all shakes out.

Feb 22, 2024 06:33 AM
Andrea Bedard
Thompson Company, REALTORS® 240.593.2860 - Silver Spring, MD
Fluent in Real Estate & German, M.A. ABR ASP CIPS

Yes, yes, yes! Some of the opinion pieces and comments flying around on the interwebz regarding this topic are mind-boggling. I've been licensed for 20 years this year and we've always executed buyer-broker agreements in Maryland during those 20 years. The document was tweaked several times over the years but it has always been in place since I started. I have not represented one buyer in my career without one. Our agency disclosure spells out that without a written agreement I would be considered a sub-agent of the seller and obligated to represent their best interest. I have yet to meet a buyer who wants that. 

Feb 22, 2024 08:29 AM
Nick Vandekar, 610-203-4543
Realty ONE Group Advocates 484-237-2055 - Downingtown, PA
Selling the Main Line & Chester County

Those brokerages who are trying to maintain the status quo are going to have trouble. We all need to be prepared to tell our buyer clients what we do for them specifically, not in an arbitrary way, but point by point and how that helps them. Good post, but I do not expect anything but good from you.

Feb 22, 2024 10:15 AM
Elyse Berman, PA
LoKation Real Estate - Boca Raton, FL
Boca Raton FL (561) 716-7824

Nice to see you J. Philip Faranda !

I used them 15 years ago but people would balk.  And since it takes just 63 hours to get a license in Florida, everyone has one - but not everyone has the knowledge to go along with it.  A key difference.  Eventually I stopped using them until recently.   

Now we are required to use Exclusive Buyer Brokerage Agreements or Showing Agreements and, would you believe, some people still balk?    I'm over it.  If they won't sign after we go through it, I'm onto the next person.  

Great post and great video!  

The slides are a great idea.   If the person is long distance, do you go over them on Facetime?

 

Mar 10, 2024 02:32 PM