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Buyer Broker Agreements...Do you use them?

By
Real Estate Broker/Owner with Abacus Properties Inc.

Sometimes, my agents will come crying to me about these buyers they have been working with for 6 months and they bought a FSBO on their own, or went to an open house and wrote an offer with the listing agent. Sounds familiar? They would swear they would never work with a buyer unless they sign the buyer broker agreement. But most of the time, they will go back to their old ways, driving buyers around for free and hoping they will stay loyal.

I would like to do a simple survey:

1. How many of you use the buyer broker agreement?

2. When do you have the buyers sign it?

3. How do you overcome objections?

4. If your buyers refuse to sign, will you still work with them?

5. Why/what do you think the Buyer Broker Agreement is so different from the listing agreement that many agents feel intimidated to have their buyers sign?

I appreciate your time.

Comments (21)

Abacus Properties, Inc. DBA Apple Dream Homes
Abacus Properties Inc. - San Diego, CA

I guess I can assume that the buyer broker agreement is not very popular, since I have not had one response from my fellow rainers yet! That's very interesting...

Sep 05, 2008 12:07 PM
Cyd Weeks
Palmcoasting.com Real Estate Corp - Palm Coast, FL
Realtor Palm Coast, Fl

I don't use them.  I don't know too many in my area that do.  

Sep 06, 2008 01:45 AM
Abacus Properties, Inc. DBA Apple Dream Homes
Abacus Properties Inc. - San Diego, CA

That's interesting...How do you keep your buyers loyal? I guess that will be my next blog.

Sep 06, 2008 11:56 AM
Cyd Weeks
Palmcoasting.com Real Estate Corp - Palm Coast, FL
Realtor Palm Coast, Fl

Well, I'm in Florida, things are a little different here from California, I would suspect.  But..I approach it as team work.  We are a team.  Buyers are either going to like me and work it that way or they are going to move on.  They're going to do that with a brokers agreement also, so?

I was part of a discussion recently where I stated I am of the opinion that a buyer's broker agreement is more for the protection of the agent than for the buyer.  You question of 'loyalty' insinuates that is what you are thinking it's for.   If I were a buyer, I would NOT sign one.  Not in this state. (most of us are transaction brokers).  If I were in a state of absolute agency/non-agency, I would sign one at the last possible moment.    That's just me.  :)

Sep 06, 2008 04:30 PM
Lenny Schwartz
TexasRealty.us - Austin, TX

i remember VERY clearly (just before i got my license) when i bought a house... when my agent explained the "value" to me of a buyers rep agreement... it meant nothing to me... i could not see ANY value in it!.... i had spoken to a few realtors and chose this one... i felt we had connected... now she wanted mt to "sign my life away"!... i really freaked out at the thought of being chained!!!... yet i didn't hesitate to sign whatever my dentist-doctor-accountant-attorney-lawn guy-mechanic.... i think it comes down to commitment.... with these other trades i am at the point of commitment- ready to pull the triger... so basically i think the real estate "system" is basically flawed... i think buyers should have to pay for the agents time... or something...

Sep 06, 2008 05:08 PM
Frances C. Rokicki
Fran Rokicki Realty, LLC - Bolton, CT
Broker-Mentor,CRS

Kathy, In my state of Connecticut, it is the law.  If you do not comply, they will take away your real estate license.  There are, actually, testers who are out in the field, checking on agents to make sure that they are complying to the law.  We cannot show properties, give real estate advice, etc., until that contract is signed.  It is the same as listing a property, except, it is listing your buyers:)

The only time that you may show a property to someone without it, is if it is your company's listing.  However, you must make sure that they know that they are not represented and should be, by someone.  There is even a form, Disclosed Non-Representation, for that showing.

It probably, sounds worse than it is.  Most people have no issue with it.

It's a Good Life!

Fran

Sep 07, 2008 03:48 AM
David W. Bolick
Network Real Estate, Inc. - Little Rock, AR

Frances....You've GOT to be talking about a "BUYER AGENCY DISCLOSURE" and NOT a BUYER AGENT AGREEMENT.  Big difference!  There is zero logic behind HAVING to legally commit to paying a commission to an agent you don't even know!  That's like having to sign a contract with a used car salesman before he'll even show me a house.

If you do that in Connecticut...then you're state needs some new government!!

Sep 07, 2008 04:43 AM
David W. Bolick
Network Real Estate, Inc. - Little Rock, AR

Oh...Kathy...No I don't use Buyer Agent Agreements.  I can tell most always who will be loyal and who will not be and if you're not going to be committed to me by choice then the street runs both directions.  I can do that because 90% of my business comes from referrals and their presold before they come to me.

Sep 07, 2008 04:45 AM
Abacus Properties, Inc. DBA Apple Dream Homes
Abacus Properties Inc. - San Diego, CA

David, is that what you think of yourself, a used car salesman or someone selling vacuum cleaners? Maybe it is different in your area, but in CA, we don't even use attorneys, we just have escrows. The real estate agent has to be a PROFESSIONAL, with a lot of knowledge in real estate transactions, knowledge of real estate laws(although we don't give out legal advice), sometimes even knowledge of plumbing...REAL ESTATE PROFESSIONALS are helping people buy and sell their most valuable asset(or one of the most valuable assets). People rely on the real estate agent to guide them through the process with our expertise.

Most attorneys or accountants will not start working with you without a retainer. Why are real estate agents driving people around in their cars for free without even a commitment that these people will work with them?

I guess it goes back to my first comment, if you view yourselves and conduct business as a real estate professional, other people will respect you as a professional. Vice versa, if you view yourselves as used car salesmen, than expect other people to treat you the same way.

Disclaimer: I think used car salesmen and vacuum cleaner salesmen are honest, hardworking people. I believe they have very tough jobs and I respect them.

Sep 07, 2008 08:38 AM
David W. Bolick
Network Real Estate, Inc. - Little Rock, AR

Abacus...that's not what I was implying.  I was saying that you don't sign a contract with a used car salesman just to see a car and you don't sign a contract just to have a doctor look at your either.  The only time you sign a contract with an attorney is WHEN you hire them and only IF you've never hired them before...so Why does a real estate agent think they have to have a "contract" before they will show a house?

Anybody, including any profession that would require me to sign a contract BEFORE I get to know them or know IF I want to use them...I would NOT. 

Contracts are made to be broken and anytime you sue a "client" to collect on a commission because they used another agent....you're reputation will fly right out the window in my opinion.  And I don't use contracts as scare tactics to stay with me.  My clients stick with me because I WORK.

Sep 07, 2008 08:46 AM
Abacus Properties, Inc. DBA Apple Dream Homes
Abacus Properties Inc. - San Diego, CA

David, I am sure what you are doing is working for you and I wish you all the best in life as well as real estate.

Sep 07, 2008 09:01 AM
Cyd Weeks
Palmcoasting.com Real Estate Corp - Palm Coast, FL
Realtor Palm Coast, Fl

Well, Kathy... do YOU use them?  I'm assuming you are a broker since you refer to 'your' agents.  So if you are using them, obviously you must know how to overcome the objections, no?

By the way, why I don't use them has nothing to do with feeling intimidated.  And I'm wondering why you feel a buyer *should* pay you for finding their own FSBO and going into contract without you, if they don't need your help?  

This whole concept comes up time and again.  There are different models for real estate.  Some people use them some people don't.  I don't because I personally wouldn't sign one.  I won't ask someone that's on my team to do something I myself won't.

 

Sep 07, 2008 09:22 AM
Abacus Properties, Inc. DBA Apple Dream Homes
Abacus Properties Inc. - San Diego, CA

Cyd, thanks for you comments. I appreciate your opinions. One interesting point, you are the first agent that thinks your buyers shouldn't pay you when they buy from a FSBO, if they don't need your help. But you have for the past 4 months shown them 50+ homes and have been educating them all about real estate, for free. My agents come to me time and time again crying about this. It happens to the most seasoned agents.

No, I don't have a good grip on how to overcome the objections, that is why I am looking for help. It is really hard because most agents will be more than willing to show them homes for free. I wish we are like some of these other states where it is mandatory to have it signed.

I don't make my agents use the BBA, but I do recommend they use it. All my agents have their own unique styles that I respect. My agents are their own bosses. I merely service them and help them when they have problems or questions.

 

Sep 07, 2008 09:42 AM
Abacus Properties, Inc. DBA Apple Dream Homes
Abacus Properties Inc. - San Diego, CA

There is this relatively new brokerage in my area that is charging an hourly rate for showing buyers properties. Any thoughts on this model?

Sep 07, 2008 09:47 AM
Abacus Properties, Inc. DBA Apple Dream Homes
Abacus Properties Inc. - San Diego, CA

I am glad I posted this blog. I did not know untill now that there is so much opposition to the BBA from real estate agents...

Sep 07, 2008 09:55 AM
Cyd Weeks
Palmcoasting.com Real Estate Corp - Palm Coast, FL
Realtor Palm Coast, Fl

Ahhh... see, there is the difference.  I'm not showing my buyers 50+ homes for 4 months.  Long before that time I would know them well enough to know if I am wasting my time or not.   And that's why I call it team work.  Either we're a team and have a full understanding or we don't and I move on.   If I'm not showing them FSBO's then...I do not deserve to be paid.   What kind of buyers agreement are you using?  Something that locks them into a particular territory?   The ones used around here are generally something that is easily cancelled and is generally for homes shown by the agent.  I can understand utilizing one for homes shown...it helps to eliminate the possibility of a procuring cause situation but it doesn't even guarantee that.

Have you or would you sue the buyer for a commission if they purchased a FSBO?

If you think that the buyers are learning anything more about buying a house on their own from the agent than they can on the internet in this day and age, I think you are mistaken.  But, that's just my opinion. 

Sep 07, 2008 09:56 AM
Cyd Weeks
Palmcoasting.com Real Estate Corp - Palm Coast, FL
Realtor Palm Coast, Fl

lol... trust me, there are more agents for them than against them.  Just read some of the other blogs about it.  I am definately in the minority.

Sep 07, 2008 09:58 AM
David W. Bolick
Network Real Estate, Inc. - Little Rock, AR

Well Cyd...that's all the more reason to NOT use them!  I don't want to be "lost" in the crowd, but rather "separated" from it.

Sep 07, 2008 09:59 AM
Valerie Osterhoudt
Johnson Real Estate, Inc. - Cromwell, CT
ABR, Cromwell, CT Real Estate ~ 860.883.8889

Kathy.. Every single buyer/tenant signs one of these before I show them property.  I don't want to waste my time.  I don't work with them if they don't sign it.  To me they aren't serious if they don't and they will waste my time in the long run.

Sep 07, 2008 01:24 PM
Abacus Properties, Inc. DBA Apple Dream Homes
Abacus Properties Inc. - San Diego, CA

Valerie, thanks for you post and I agree with you.

Sep 07, 2008 01:33 PM