On Monday, I wrote a post, about a Buyer that had looked at one of my listings, with another REALTOR® and had called me the next day trying to go behind her REALTORS® back and make an offer directly through me, the listing Broker. Anyway in that post I had mentioned using a Showing Agreement (SA) to protect your interests and then switching over to a Buyer's Broker Agreement (BBA) after the first couple of showings. I had a couple of folks, in the comments, ask me about a SA, so I thought I would write this post to explain what it is and the benefits of using one.
Now folks, I feel it's only fair to let you know that I rarely work with Buyers. So a SA or a BBA is not something I get the opportunity to use very often. BUT I have been in this business for quite awhile and I have been in sales for about 30 years. So I feel qualified to give my thoughts on the advantages of using a SA. Also, please remember I'm a Florida Broker, so our laws may differ from yours. But whatever your laws state, the reasons for getting an agreement signed should be very similar. OK, so here goes.
A SA is a very simple, non-threatening, one page agreement that is very specific to the properties being shown. It is basically letting the Buyer know that you are going to show them the few properties listed on the agreement and if they decide to buy one of these properties you will get paid for your services. It is "registering" your Buyer as your customer or client. You can use it prior to showing one of your listings, a MLS listing, new construction or even a FSBO. The agreement is between the Buyer and your Broker. Here's a sample. Take a minute to look it over. It's pretty self explanatory.
The advantages of getting a SA signed prior to showing properties are numerous. Here are a few.
- It will show you if the Buyer is serious or not.
- It will ensure that you are paid for your services.
- It will reveal if the Buyer is working with another REALTOR® or not.
- It will let the Buyer know you take your job serious.
- It will let the Buyer know what your obligations are.
- It will make getting the BBA signed, easier. (sample BBA)
The above advantages are important but to me the most important thing is, it will get your potential Buyer in decision making mode. The Buyer will have to make a decision whether or not to work with you and they will have to agree to it in writing. They will realize that purchasing a home is serious business and that they are going to be required to make decisions. How much easier will this make getting the BBA signed at the next appointment? How much do you think this will help when it comes time for them to make an offer on a property? You are setting the tone for the entire process. Had you thought about that?
Granted, some Buyers may balk at signing anything. At that time you can use your judgment whether or not you want to work with them or not. Personally, I don't understand why they would have a problem. It really is a simple agreement and it only commits them to one day and a few properties. It gives you time to build a relationship so you can proceed to the next step which is the BBA.
Try this: Meet the Buyer in your office or a neutral place before showing them homes and simply say "Hey Mr. and Mrs. Buyer, here is a list of the properties we are looking at today (hand them the agreement). Did I get them all? Good. OK sign here and here and let's get started." "What this?" "It's a Showing Agreement, it basically states the properties we are looking at today and says that, if any interest you, I will assist you to the best of my ability to negotiate an acceptable purchase and I will assist you in all aspects of getting it closed.. It also states that if I do that I will get paid. I'm just making sure we are on the same page before we get started. If you don't like any of these properties, we can go back my to my office and see what else we can find in the MLS. I'll get rid of this agreement and we will start over. Fair enough? Good, sign here and here and let's go."
Present it just as if it's a normal part of doing business with you. If you present it with confidence it will be a piece of cake. Practice makes perfect. After a few times you will be an old pro at it and you will be able to work with your Buyers with complete confidence. It will make you a better REALTOR®.
Now don't forget, a SA and a BBA are bi-lateral agreements. You too, have to perform. But hopefully knowing that your Buyers have made a commitment to you will motivate you to make a commitment to them. And together, you will be able to find the home they are looking for and will build a long term relationship in the process. Win, win.
OK, so how did I do? Are you willing to give it a try?
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