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David Silver…, Other/Just Looking in

Listing a house for sale requires the Seller to sign a listing agreement. Do you insist that your Buyers sign an exclusive Buyers agency agreement?

Asked by David Silverman, Tue Jan 15, 2013

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Hi David,

It's a pity that NAR cannot move to a national consensus on Buyer/Broker Agreements. If it became law or strict policy that while working with a buyer, they must sign exclusively with ONE agent, it would save tremendous heartache, resources, time, money, etc., etc., etc.

I cannot think of one subject in the past 7 years that has created more financial losses for real estate agents than the lack of having a written agreement with their 'supposed clients'. If 'all agreements in real estate must be in writing', why isn't this MOST important relationship required to be in writing?

Where do we start?

Scott Miller
Realty Asssociates
Boca Raton-Miami Beach, FL
3 votes Thank Flag Link Wed Jan 16, 2013
If THAT is not the TRUTH I don't know what is!!
Flag Wed Jan 30, 2013
The answer is yes, I work with all clients by contract, and have for most of my career. I love knowing who my "Clients" are, and they love knowing that I am working diligently to locate their next home.

If I represent a Seller, there is a contract. If I represent a Buyer, there is a contract. If we are to work together, there must be a complete understanding of that relationship - and what better way to solidify that understanding than to have it in a written form.

If an Agent is unsure of of the level of committment they are willing to offer a Buyer, they would not offer such an agreement, to sell a home to a buyer.

Now, it is not an ideal situation to insist or force a buyer to sign this agreement. Better to present the agreement and if there is reluctance to sign, then an Agent should continue on to either Plan A, B or C. But before we discuss this further, either always offer or never offer this contract. You should be consistent in your business practices.

Plan A: Further discuss why the Buyer is hesitant to sign the agreement, then decide if you will let them "try you out" for a day (give them a copy, with plans to sign on Day 2); Plan B: As an Agent, decide if the Buyer "qualifies" to work with you and go forward with them signing that they reject the Offer to work exclusively with you; or Plan C: Allow the Buyer work with another Agent.

In Nevada, the Duties Owed Disclosure which is a non-committal form explaining the Agent's Duties must be presented to the Buyer.

If an Agent has not presented any of the above documents to a Buyer at the first meeting, then a Buyer should interview with other Agents until they find "the right one".
2 votes Thank Flag Link Tue Jan 29, 2013
Hi David, I ask for the exclusive buyer with an easy exit for the buyer if they decide to change.
2 votes Thank Flag Link Thu Jan 17, 2013
- In my humble opinion, expecting less from the consumer than they expect from us devalues the importance of what we do and our efforts.

I don't see what that has to do with the question at hand. I don't expect the "consumer" to have completed licensing courses, to have obtained a license, to maintain that license with continuing education courses, and to gather experience by brokering however many transactions a year for however many years.

I think it's okay to expect less of the consumer, who just wants to buy a freaking house, than they expect from us - which is a high level of professionalism, ethical and honest behavior, and an integrity that puts our professional position above our personal position.

We would never tell a seller, "you don't have to sign an agreement with me, I'll just go to work for you and if someone else finds you a buyer, well they can get paid," but we do that with buyers - "you don't have to sign an agreement with me, but if after a dozen trips to look at houses and my educating you about the market and negotiation strategies and house conditions and Heaven knows what else, you walk into an open house and decide to buy from the listing agent, that's okay because I Have Somehow Failed."

1 vote Thank Flag Link Wed Jan 30, 2013
The reason we don't is because, if we haven't earned their loyalty, then we deserve to have them write with someone else. Which is not the logic we use with sellers. How many of us have said, "Let me have an open listing and work it like it was an exclusive?"
1 vote Thank Flag Link Thu Jan 17, 2013
Hi Mack, I agree in premise and I admire your intent to represent steadfastly. However, with bilateral commitment comes bilateral loyalty. In my humble opinion, expecting less from the consumer than they expect from us devalues the importance of what we do and our efforts.
Flag Thu Jan 17, 2013
I definitely ask for the buyers rep. It's an easy transition to me from explaining the IABS, then on to stating that if they want me to represent them, here's how we make that happen. We walk through the buyers rep. I've had a few refuse to sign, but not many. If we've met at the property, I do all that before we open the front door. Unless they sign the IABS, I'm not opening the door. I'll show that one house without the buyer's rep, but no more.
1 vote Thank Flag Link Thu Jan 17, 2013
Hi David,

I do not insist that my Buyers sign an Exclusive Buyers agreement right away because I like to develop a relationship. When we are working together for a while then I present the form for signature.

Another option would be to have your client sign the Exclusive Buyer Agreement just for the day you show them properties which has a limited commitment for the buyer while covering you for your time should they return and purchase the property with another Realtor.

All the Best!
1 vote Thank Flag Link Thu Jan 17, 2013
I usually do not on the first or 2nd showing. If they contact me and agree to work with me than I make them sign it.
1 vote Thank Flag Link Thu Jan 17, 2013
In the first meeting with a prospect I share with them a disclosure of relationships that we can have in Colorado. Depending on the situation a Buyers agency agreement may be used.
1 vote Thank Flag Link Wed Jan 16, 2013
Generally, my first showing or two I will use the state disclosure form and identify myself as a facilitator. I do this for mutually beneficial reasons; in short, to ensure it's an all around good fit for both myself and the client. Once we've spend some time together and are comfortable, I have a discussion about buyer agency and why it may be in the consumer's best interest. At that point, it's totally up to them, but in an ideal world, everything's gone well and I will be their buyers agent! Ultimately, if a client is unwilling to sign a buyer's agency agreement, I have to say it makes me a bit nervous, as loyalty is everything in this business!
1 vote Thank Flag Link Wed Jan 16, 2013
You certainly should. it lets the buyer know what to expect from you and what you expect from them. Without one afterall you are not really their buyer broker as oral agreements are not binding.
1 vote Thank Flag Link Wed Jan 16, 2013
It is a good idea to have a buyers agreement and is now required. Ask your agent to explain your options and pick one that works for you. It is part of doing business and a major part of our being professionals in our industry.
1 vote Thank Flag Link Tue Jan 15, 2013
It's better if you have it and you both would have a clear understanding as to what is expected of each party. But, I would not spend too much energy trying to get them to sign it (would rather use that energy in getting to know them) speally if you have built a good rapport, explained the services and how you work and there is some level of trust and loyalty.
1 vote Thank Flag Link Tue Jan 15, 2013
Wayne, you make an excellent point. Building rapport and trust, and thus the relationship, is the key to any successful business endeavor.
Flag Tue Jan 15, 2013
Hello David,

An Exclusive Buyer Agency Agreement demonstrates a commitment from both parties that creates, in my considered opinion, a more sound foundation on which to work together to the ultimate goal … the successful identification and purchase of a property.

In this arrangement, the Buyer is committed to the agent to get the job done (usually under specific terms and timeline) and the agent is committed to perform under those terms and guidelines.

To make a fun analogy, I’ve been married for nearly a quarter century …. The more committed the parties are to each other, the harder they work and the more productive the outcome.
1 vote Thank Flag Link Tue Jan 15, 2013
It is best to have an exclusive agreement. As you explain it to the buyer s/he will better understand the services that you do provide.
1 vote Thank Flag Link Tue Jan 15, 2013
In this day and age, I would highly recommend it.
Many clients are confused because of all the input they are getting on line.
Best regards,
1 vote Thank Flag Link Tue Jan 15, 2013
Yes. In my opinion it is part of "Best Practices" and an integral component of a Professional Working Relationship with my clients. It outlines our duties and responsibilities to each other during the sometimes many months long, Buyer Relationship.
0 votes Thank Flag Link Wed Jan 30, 2013
I offer it.

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0 votes Thank Flag Link Tue Jan 29, 2013
I want a buyer to work with me because they are comfortable working with me and trust me, not because they've signed an exclusive contract. This approach has worked well.
0 votes Thank Flag Link Thu Jan 17, 2013
I do not require a buyer to sign this. Mainly because it's not really a binding contract, (was told by one of my brokers) The other reason is sometimes the relationship is not a good fit. They may be unwilling to take advice that would be helpful.
0 votes Thank Flag Link Wed Jan 16, 2013
No, but I ask them not to make me work hard for them if they don't plan to place an offer with me. I don't mind showing one or two homes but 25 I need contract signed. Unless I know them very well.
0 votes Thank Flag Link Wed Jan 16, 2013
Never. Once in a great while someone asks me to serve as a buyer's agent, which I am willing to do. Most of the folks I see do not confine their looking to a small area and I would not feel comfortable to require them to be "exclusive" with me when I only cover 5000 square miles as a home territory. Within that area, yes.
0 votes Thank Flag Link Wed Jan 16, 2013
I usually don’t ask buyers to sign an exclusive buyer’s agency agreement. I’m not certain it’s legally binding. The buyers can opt out due to none performance. I’ve only had 1 experience of a buyer going behind my back. She was viewing home with me and had her Realtor friend write the contract. Buyers are liars!

I think the way I handle the situation is to make it clear from day 1 that if the buyers intend to work with other Realtors their relationship with me is over.
0 votes Thank Flag Link Wed Jan 16, 2013
Legally (in Florida anyway) a listing does not have to be a written agreement. But CYA and convention wisdom propels the agency to get one. Contract to purchase must be in writing, fully executed by both parties.
0 votes Thank Flag Link Wed Jan 16, 2013
I really don't insist. I think that if a buyer has the confidence on you they will honor your relationship. I do try to get my all my buyers to sign an exclusive agency agreement but I don't make it a requirement.
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0 votes Thank Flag Link Tue Jan 15, 2013
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