Buyer Broker Agreements

By
Real Estate Broker/Owner with Aiken Homes Buyers Agency

Before owning an EBA firm, I practiced full service brokerage for 21 years. I made a lot of money and never got sued or had a grievance filled against me. As a result, I have experience from both vantage points.

I know how difficult it is to switch hats and deal with seller representation, buyer representation, dual agency, designated agency, and customers. It is exhausting and agents who  continue to do all of that have my admiration and respect, but, it is too much for me.

My point is  I  no longer work with anyone except under a signed buyer broker agreement, short term or long term. I have a very workable procedure that works for me and others in my firm. 

IS that how the rest of you do it? I am curious. Kit Parker

Comments (12)

Patrick (Pat) Dardis
RE/MAX Fort McMurray - Fort McMurray, AB

If you are not using a buyer broker agreement you are like a fisherman, on the catch and release after each showing.

Sep 04, 2008 05:22 AM
Bobby Stevens
Windermere Real Estate/Lane County - Eugene, OR
Realtor, Eugene, Oregon

Congrats on making the commitment to buyer agency Kit. Seems a little scary to me since at this point almost all my buyers come from sign calls on my listings!

So far I have only used a buyer contract when the representing a buyer purchasing a FSBO that won't pay commission. I get the buyer signed up to pay for representation.

Perhaps I've been lucky with the rest of my buyers, because I haven't been burned despite not having an agreement in writing. I have declined to represent a few that wouldn't take the time to meet in my office for a consultation prior to showings, and so far that seems like  a pretty good screening process.

Sep 04, 2008 05:24 AM
John Morrison
Buyer's Choice Realty - Ipswich, MA
Exclusive Buyernulls Agent, CBR - Boston Area Real Estate

Hi Kit, Way to go with being an EBA! I will go out and meet with a prospect/consumer/lead once to show them property, or maybe twice if I like them before signing a contract to work exclusively with them and vice versa. As my broker says, you have to give them a little of you so they know what you can do. It does stink to spend money and time on a dead end, but that's the business for me so far.

Sep 04, 2008 05:30 AM
Retired Notworking
Tallahassee, FL

Our broker recommends we get a buyer broker agreement (BBA) for all the buyers we work with. We wouldn't market someone's house without a written contract (listing agreement), so why would we want to spend our valuable time working with buyers without a contractual agreement.  He says that if you require all your buyers to sign a BBA, you may chase away the ones that aren't really serious about buying, and that's probably a good thing.

It's been my experience that a BBA doesn't guarantee a sale, however. We don't require a non-refundable deposit (to be credited toward purchase), nor charge a termination fee, and I've had two clients sign a BBA, spend months looking at property,  and end up not buying any property at all.

Sep 04, 2008 05:31 AM
Steve Graham
Inactive - Atlanta, GA

Are you paid through co-op fees or directly by the buyer?

Sep 04, 2008 05:33 AM
Benjamin Clark
Homebuyer Representation, Inc. - Salt Lake City, UT
Buyer's Agent - Certified Negotiation Expert

Kit - Congratulations on practicing Exclusive Buyer Agency! When did you open your brokerage? We always use a signed Buyer Broker Agreement. If we don't protect ourselves, doesn't that leave doubt in a prospect's mind that we will do everything to protect them in the transaction?

We do our best to cover all the bases all the time. For clients... and for ourselves.

After all. the agreement is signed by both parties: they commit to us, and we are committing time, resources and expertise to them. We're not "trapping" them, they are "tying us up" so they have us on their side throughout their transaction. If a prospect doesn't want to commit to me, I have no problem letting them work somewhere else. There is enough business for everybody and I want to work with the people who want to work with me.

 

Sep 04, 2008 05:36 AM
Sheila Santini
Waterfront and Boaters paradise Realtor! - Tarpon Springs, FL
GRI

I do indeed use a byer broker agreement, this allows me to explain responsibilites on my side as well as the buyers side!! 

Sep 04, 2008 05:46 AM
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

Good luck to you.  I have been an EBA for 11 years and always work with a buyer agency contract.  There have only been a couple of instances were I think it may have "cost" a posssible client -- but on the other hand, I have to believe, it would not have been a good fit for me.  We do allow our buyers to cancel the contact (in writing) if things aren't working out.  Good luck to you and if you ever need any help in NH, I would be glad to assist.

Sep 04, 2008 05:53 AM
A. J. Fischer
Keller Williams Ft Myers & The Islands - Fort Myers, FL
CDPE, CRS, ABR, GRI, ASP, CREA, SFR

Hi Kit...I have to agree with the everyone about listing our buyers.  If we can list a sellers home and in some states we represent them only as a transaction broker, why is it so hard for agent to list their buyers.?  I believe it is a matter for us as professionals to retrain and educate the buying public.  Just because we haven't done it in the past doesn't mean we can't start now.  With the market the way it is in many areas and the gas prices high, getting them to committ to you for the period of time they are looking to buy a home in, will create their loyalty and yours too.  I know I would work even harder than I do now if they listed with me as their "Exclusive Broker Agent."

I believe it is all about our mind set...not theirs.  Everytime we have to explain something new like, agency we have to be able to sell them the concept and why it is important for them.  Agents are so scared that if they ask the buyers to sign an exclusive buyer broker agreement and they balk, then the buyer will go somewhere else and work with someone else.  Not always true.  A serious buyer with a limited amount of time or money will appreciate someone working for them.  But we have to educate the buyers on what the benefits are for them. But first we must educate ourselves.        

  AJ Fischer Banner Elk NC and Naples FL

Sep 04, 2008 06:05 AM
Jon Boyd
Home Buyer's Agent of Ann Arbor - Ann Arbor, MI
Ann Arbor Real Estate Buyers Agent

Hello Kit,

And welcome to the world of Exclusive Buyer Agency.

I've been in the real estate business for 20 years and I've never listed or sold a home! (We've helped hundreds of buyers BUY, just never SOLD a home.)

It can be challenging to survive without the listing side income, but I think the unique service we offer to consumers more than makes up for it.

And to get to your original question... we've used an agency agreement for the last twenty years.

Sep 04, 2008 01:20 PM
Kit Parker
Aiken Homes Buyers Agency - Aiken, SC

Thank you to everyone who commented postively about me being an EBA.

To answer a few questions, I am new to ActiveRain, but, not new to Exclusive Buyer Agency. I own my Agency and love it. In 2006, even though an EBA, I was elected President of our Board of REALTORS. It was a three year commitment, Pres-Elect, Pres, and Past Pres. I also serve on the Grievence and Education Cmtes.

I get paid based the terms the buyer clients and I agree to in writing in the BB agreement. I use our State Association forms which have many options for both buyer and buyer agent to settle on. I discuss all of them clearly and get everything signed and dated BEFORE we tour homes.

By not representing sellers, I convince by buyers that by using me as their EBA  I can share detailed  buyer favorable information, and that I do not ever have to worry about breaching any seller protected information. Buyers want the information and expertise I have in my market and I want them to sign on with me to get it. We are BOTH protected then.

I have another question...I want to be fair and co-operative. For you all to get more points, should I have answered each of you individually, or this way okay. It seems very time intensive the former way, But, I want to give as well as receive. Thanks, Kit

 

Sep 05, 2008 01:34 AM
Tony and Suzanne Marriott, Associate Brokers
Serving the Greater Phoenix and Scottsdale Metropolitan Area - Scottsdale, AZ
Haven Express @ Keller Williams Arizona Realty

Although we are now exclusively listing agents we ALWAYS used Buyer Broker Agreements. Period.

Jul 31, 2010 10:52 AM