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Buyers Agency Agreement.....The Great Debate

By
Real Estate Agent with (RSVP Real Estate) 425.890.0878
Ah the great debate......To Use Or Not To Use A Buyers Agency Agreement.  I have read many a posts with varying opinions on using the form.  All good legitimate reasons to or not to use it.  Personally I do not require my buyers to sign one.  I believe that they have chosen to work with me because they want to work with me and I count on their loyalty in exchange for all the hard work I do for them.



Has my opinion changed?????

My Scenario:

Recently I had a listing and an interested buyer who was driving around the neighborhoods,  saw the home and called me to schedule a showing.  My first questions is always "Are you working with an agent?" to which he replied "no".  Because he was going to be coming from work, which was 5 minutes from the home, I agreed to meet him there but not before getting a faxed copy of his drivers license and yr make and model of his car.  He promoptly sent that information over but forgot to send his license plate number so when I arrived I quickly texted it to my husband who had all the other information.  I discussed dual agency with him and phoned my sellers and all parties were fine with a dual agency arrangement.

Upon arriving I showed him the home.  He liked it and wanted to write an offer so we went downtown to Denny's and wrote up an offer.  It was rather low, so I told him I was almost certain my sellers would submit a counteroffer.  He said "ok and would I look for other properties for him as well".  Additionally he had not gotten preapproval from a lender yet and asked for a referral to a lender.  I gave him the name of my preferred lender and he said he'd call first thing the next day.  I said I don't generally have my clients sign a Buyers Agency Agreement as long as they assured me they weren't working with other agents.  He said "oh no I'm happy to work with you, things have gone well, I'm pleased".  

I left the meeting and called my sellers and we discussed the offer.  Long story short.....they submitted a counter, buyer submitted a counter, seller submitted a counter and buyer declined.  The day we had met to view the home, my sellers had dropped their price $20k and we were generating quite a bit of activity.  The day Mr. Buyer declined, we got an offer and had mutual acceptance.  That property was now off the table.  
 
From our first meeting I started sending Mr. Buyer listings and I kept him apprised of where things stood with my listing.  He had given me a cell number that didn't have a voice mail set up and his email address.  I could see he was viewing the listings I was sending and I suggested we meet on a Tuesday at 5pm.  On that Tuesday at 2pm he called and said yes lets meet at 5pm.  I drove out to the home he was interested in and showed him around.  He was somewhat interested but a little concerned about things like the roof and wanted his father to see the home on Saturday.  I told him I was probably not going to be able to make Saturday, but I'd let him know for sure later in the week.  As it turned out I was not available so I tried his cell and got no answer.  I then emailed him and suggested we meet on Tuesday at 5pm.

I continued sending listings and trying his phone and got no response.  I sent out my 4th of July ecards.  No response.  Finally on the 8th of July I got a call from my preferred lender.  His exact words were "Sandy, I have some not so good news......Mr. Buyer has submitted an offer with another agent!".  I thought I had been punched in the stomach and all my air was gone!  My lender felt at a loss because of course he was going to provide the loan, but that was supposed to be my client and it made him uncomfortable.  I told him "well you can't win'em all" and I tried really hard not to let it bother me.

Later that evening I called Mr. Buyer and he finally answered.  Here is our conversation:

Me:  Hi Mr. Buyer, just touching base, I've sent several listings and wanted to set up an appointment to show you some of them
Mr. Buyer:  Oh well I think I've found something so I won't be needing your services any longer
Me:  Well I have to say I'm a little disappointed given our conversation about not signing a Buyers Agency Agreement and yet you sought the services of another agent.
Mr. Buyer:  Well I didn't plan to, but thank you for your time.

End of conversation!

I can hear it now, "if only you'd had a Buyers Agency Agreement".  But I still won't use one.  You see after getting over the shock of being cheated I realized that the hardest part of the whole thing was wrapping my head around someone being so disloyal and dishonest.  I am a very loyal and honest person and I just couldn't fathom doing that to someone.  My lender told me that Mr. Buyer had told him he was out driving around and just had to jump on this home they'd come across.  Ironically, I had asked him to go out that Sunday and look at several listings.

I would like to hope that this was an honest mistake.  Adam Waldman summed it up quite well and said "half the time they don't even realize that they just cost you money".

As a Realtor® I work very hard for all my clients.  There are many behind the scenes things happening including countless hours spent combing through properties on the MLS or previewing properties.  Sometimes we get lucky and it's one property, one offer and off to closing.  Most often though that is not the case.  Being someones Realtor® is more then simply writing up an offer and collecting a commission.  It's about really getting in tune with your clients needs and helping them to achieve their dream of homeownership!

Buyers and Sellers:  Please be loyal to your Realtor®, we work hard for you even when you don't see it!  It goes back to "Do unto others........."

Sandy Noll
Realtor®
Keller Williams Realty
NWREA, LLC
425-890-0878
sandranoll@kw.com
www.letsachieveyourgoals.com
Posted by

Sandy Noll
Broker
RSVP Real Estate
425-890-0878
SN@SandyNollRealEstateTeam.com

Christina Cavins
Irongate Inc. REALTORS - Centerville, OH
www.BuySellOH.com Search Ohio Homes For Sale

Not using a Buyer Agency is like not having a Seller sign a Listing Agreement. Why would you work for free?

Christina

Jul 21, 2008 07:19 PM
Dagmar Sands
Real Estate International, Inc. - Johns Creek, GA
International Real Estate Agent, CIPS, FIPC, ABR

Dear Sandy, it is good practice on the first meeting with any prospect who wants you to work with
them establish the kind of relationship you will have with them.  In the state of Georgia it states
on our Agreement that they sign that it's the GA Law to establish agency.  DUAL AGENCY always
loses in the court.  You should be happy that you didn't sign a DUAL AGENCY and then had your
seller whom you were representing FIRST have a problem with it later and try to sue you that
you didn't represent him fully.  It's best if this buyer contacts you on your listing have them
sign that they understand that you already represent the Seller and that you will ACT as a
transaction agent in this transaction but should he not like your listing and decide to find another
property you can then offer to represent him.  In today's market the most professional thing to
do no matter how loyal, nice you are and how you treat others, GET IT IN WRITING who you
represent on the first initial contact with prospective buyer/client.  Yes, it has happened to all
of us that we've run across buyers with NO loyalty and it does make it very difficult in our business.
Your message to all the buyers out there is a good one.  Good luck with everything!

Jul 21, 2008 07:24 PM
Sandy Noll
(RSVP Real Estate) 425.890.0878 - Gig Harbor, WA
RE Pro Serving Snohomish to Thurston Counties

Christina  I guess I believe in the good in people.  But having just completed my Ethics renewal, even with a Buyers Agency it is VERY difficult to prove your case.  I have a colleague in my office that had a signed agreement which his client also signed with three other agents.....try figuring out who gets what in that deal!! 

Jul 21, 2008 07:24 PM
Sandy Noll
(RSVP Real Estate) 425.890.0878 - Gig Harbor, WA
RE Pro Serving Snohomish to Thurston Counties

Dagmar  I did actually have both parties sign a statement that they agreed to a dual agency relationship.  I was very up front with both and have done a couple successful dual agencies in the past.  I think being up front from the beginning is what made them work.  As for this buyer, I think he just didn't get how hard I worked for him and didn't really understand what he had done. 

Jul 21, 2008 07:32 PM
Damon Botticelli
Vegas Real Estate Photography - Las Vegas, NV
Real Estate Photographer

Thanks for the post, Sandy.  I don't usually require an exclusive on the first meeting, because I feel like people wouldn't want to commit until they know what to expect from me.  I'd like to work on having a better buyers consultation where I can give the client a clear understanding of the service I provide, and then require the exclusive.  What do you think about an exclusive agreement with a cancellation clause to make the client feel more comfortable committing?

Jul 21, 2008 08:35 PM
Chip Jefferson
Gibbs Realty and Auction Company - Columbia, SC

I will not show a home without a BA. Even if its a short term or specific to that property I am showing. I dont work for free or use my gas to play tour guide!

Jul 22, 2008 12:09 AM
Roland Woodworth
Blue Cord Realty - Clarksville, TN
Blue Cord Realty

I say use it.. they are good to keep an homest buyer honest.....and they protect your commissions

Jul 22, 2008 12:32 PM
Adam Waldman
Westcott Group Real Estate Company - Hauppauge, NY
Realtor - Long Island

SANDY - As you know from our conversations, I have just started practicing buyer agency.  It is still not the norm on Long Island.  I do believe in the agreements, but with a caveat.  I will provide a termination clause which lets them out if they are not satisfied.  As we discussed, I think that some of them are just careless and don't realize that they've taken money out of our pockets, but the agreement will make them realize that we must be part of the process.  I am willing to give them the option of acting as a seller's agent (typical for Long Island), and not have an agreement, or act as a buyer's agent with and agreement.  At least this way, they are making the choice, not me. 

Jul 23, 2008 04:49 AM
Sandy Noll
(RSVP Real Estate) 425.890.0878 - Gig Harbor, WA
RE Pro Serving Snohomish to Thurston Counties

Damon that seems like a good idea....may have to consider that.

Laura I hear you.  I guess because I have had great success without I haven't felt the need to use one.

Roland from what I just learned in my Ethics renewal even with the agreement there is no guarantee the commission is mine, but I do see your point.

Adam I'm thinking if nothing else it might make them think twice before seeking out another agents services.  Although someone from my office had a client that signed with three agents total!  They are still working out that mess.

Jul 23, 2008 11:33 AM