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Emily Webb J…, Real Estate Pro in Midvale, UT

How many of you require the Buyer Broker Agreement before showing a home?

Asked by Emily Webb Jones, Midvale, UT Fri Jun 21, 2013

I am in the business and I see a lot of tire kickers out there. And well, I have not made it a point to get that Buyer Broker agreement signed even if it is for one day to show them the house. Because If I do not get that, I am not going to spend my money on gas and my time helping someone who refuses to sign. Thoughts?

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BEST ANSWER
That's the first sale you need to make. They are buying your services.

There are fallacies that some among buyers have - not a lot. Here are examples:

Fallacy No. 1) Real estate agents raise the cost of the house with their commissions.

Fallacy No. 2) Or, they can't use an agent when they are buying a dirt start home.

The seller pays the cost of the commission for the buyer's agent. Sellers who use agents typically get more for their homes. Buyers get convenience and someone who will work hard to negotiate a price for them.

Typically, a Realtor can fetch a better price for a home. The do-it-yourself seller forgets we network constantly. And, we use the big and powerful MLS. Sellers may not need all that marketing power to get their home sold, not these days. That's the rationale of the media. And, the media are wrong, wrong, wrong! Why would you ever fish in a small spot when you can fish in the ocean? Craigslist is no longer trusted. Newspapers have conceded they lost the war for ad dollars. These two services represent a tiny, tiny exposure to the real estate market.

A buyer who finds a home on their own these days, often arrives too late. The home was sold when the sign went into the yard. By the time, they drive up to the curb and call the seller's agent, the house has already been under contract for days.

A buyer absolutely needs representation. Just in terms of having someone take them on tours, they will save all kinds of time. For myself, I have extensive knowledge of home construction from having worked in the industry for more than a decade. That knowledge has value. Other agents are lawyers or bring other strengths to what they do as real estate agents. We're not just filling out forms and buying ads all day.

Representing yourself as a buyer is like stepping into the ring with a professional fighter.

Politely ask them to sign an agreement. If they decline or dodge the question, you make your pitch again. If there is nothing but silence after you ask for their signature, they will get up to leave or hang up.

I am a business person. I have to manage my time. I spend my time with clients first. When I see a home about to go onto the market, Mr. and Mrs. Prospect, you do want me to call you first?
1 vote Thank Flag Link Fri Jun 21, 2013
Great rundown.
Flag Sun Feb 16, 2014
Thank you, lately in my market I have had people dodge the question. And I have had many discussions about this with others. I am glad you get it too. Thank you for such a great answer.
Flag Fri Jun 21, 2013
What do you think buyers really want?
Your delima is you think they want to look at homes.
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Ask your buyers what are their greatest challenges, their greatest frustrations regarding buying a home at this time.
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You can provide the REAL solutioin to these challenges and frustrations. HOWEVER.., before you can INVEST YOUR RESOURCES in those solutions, it requires membership.
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Remember, you WANT the 'jelly beans' to opt out.
3 votes Thank Flag Link Fri Jun 21, 2013
Actually, just as a point of information.............those agreements are not used in my area
2 votes Thank Flag Link Sat Jun 22, 2013
We have the buyer sign an agency disclosure statement explaining that we are working as buyer's agents OR disclosed dual agents if the opportunity arises (anytime we show a company listing, not just our own listing, we are considered to be dual agents in NJ) , but they are not bound to us as far as a time frame or in regard to paying a commission. We just establish the agency relationship.
Flag Sun Feb 16, 2014
How then do you establish a legal agency between the brokerage and the buyer to act on their behalf?
Flag Sun Dec 29, 2013
I don't believe in them. But I use the fact that other agents and companies use them as a selling point and as an opportunity to make the point that I will work very hard for them and will spend many hours researching available houses for them as well as protecting their interests. I say something to the effect of "I am not going to try locking you into a buyer's contract because we don't even know if we are going to work well together. But before I spend a lot of my time researching houses and doing all the other things I am going to do to protect you, I just want you to promise to be honest with me and work only with me until we either find you a house or you decide to fire me. If I don't live up to your standards, be honest enough to tell me just I promise to be honest with you at all times." I have been burned a couple of times but I don't think having the paper signed is going to make a difference with those that don't have the intestinal fortitude to be honorable in the first place. I don't get burned often.
1 vote Thank Flag Link Thu Jan 9, 2014
I love it!
Flag Fri Jan 24, 2014
I wanted to add that educating my buyers is probably the number one thing that will keep you from getting burned. As Boulder Suz points out., many buyers, probably most, have many fallacies about working with an agent. I am amazed how many buyers don't know that they do not pay for the services of their realtor. I find that at least half don't understand what the MLS is and why "sign hopping" actually hurts them more often than helps them.
Flag Thu Jan 9, 2014
BoulderSuz said it perfectly - "that's the first sale you need to make."
I don't sell real estate for a living. I sell my services. The goal is to help a property and a buyer that fit together find each other. I am a broker, not a salesman. There's a world of difference.
But I do require a buyer's agreement and I like that about 50% of buyers refuse to sign. It's good to weed out them out early, because those who won't sign will surely disappear before an offer gets written.
1 vote Thank Flag Link Sun Jun 23, 2013
I fall back on the addage that "Contracts are for honest people";
The liars, dishonest people and time-wasters are going to do it any way.
I figure that I'm ahead of the game if I just weed them out before I've wasted any gas.
The successes and failures come with the territory.
I'm not going to start out a relationship by telling my Clients that I don't trust them!
1 vote Thank Flag Link Sat Jun 22, 2013
You should definitely have this document signed every time you take a client out. After all, this is how you earn your paycheck. I have a friend and fellow agent who just suffered the consequences of not having a client sign this document a few weeks ago while showing them a few homes. They'd been looking at homes in the $400-$450k range and then stopped looking. He hadn't followed up with them and hadn't heard from them in a week or so. I ran across the couple by chance at the new home they'd just purchased for $750k. Had he had them sign the BB, he'd have protected himself and earned a nice paycheck. Instead, the other agent earned a great commission as a dual agent on a $750k home. Bottom line, it's an easy piece of paper to have signed that will protect you.
1 vote Thank Flag Link Sat Jun 22, 2013
Hi Emily,

I agree. Get their commitment to you first.

best of luck
0 votes Thank Flag Link Sun Feb 16, 2014
It is good to ask, because it will help you judge their level of commitment to purchasing a home. When I present a buyer agreement, I make it for shorter periods of time. This can give the buyer a comfort level as they haven't been pushed into a long term contract. I have worked with a buyer that signed an agreement with another agent that was written for over 20 years.
The face of real estate is changing. You have to try to pre-qualify every person before you drop everything, run and show them a property. Gas prices are rising, there are more agents than ever and my time is worth something, so if they are just "tire kickers" they will usually move on.
0 votes Thank Flag Link Sun Feb 16, 2014
My practice is to take buyers out on a home shopping trip for a day or two to be sure that we are a good fit for each other. I liken signing a buyer agent agreement to a getting engage. The first day of shopping for a home we are dating. After that, it's time to make a commitment to each and get engaged!
0 votes Thank Flag Link Sun Feb 16, 2014
I don't get one signed on the first meeting - there has to be a level of trust and respect from both parties. After I've shown them a few homes, and if we're confortable with each other --- then I'll ask them to sign one. Sometimes they will, sometimes they wont.
0 votes Thank Flag Link Sun Feb 16, 2014
I always spend the the time to do an afternoon of showings to make sure that both of us are comfortable with each other. No sense in both parties not enjoying working with each other.
I like to have my clients give me referrals "saying I was a pleasure to deal with not a pain."

Just my 2 pennies though.
0 votes Thank Flag Link Fri Jan 24, 2014
It looks like some of you are mistaking a Buyer Broker Agreement with an Agency Relationship form.

I'd like to hear a brief pitch given to buyers to get them to agree to sign a Buyer Broker Agreement. Because clearly such an agreement would serve to weed out the serious buyers from the tire kickers. But it also could easily scare away serious buyers who don't want to commit to an agent they don't yet know or trust.

So how do you present this agreement without sounding like you're asking for them to take a huge leap of faith in you?
0 votes Thank Flag Link Fri Jan 10, 2014
My response is very counter to what most have said. I agree with the agents that require a buyers contract logic and reasoning, and may someday require it. However, to date I have not asked one buyer to sign one. I am aware of only "loosing" two clients to other agents. It stung, but I looked inward and reviewed their file to see what I could have done better. With one I saw I there were steps I could improve on and implemented for all future clients, the other walked into an open house without me and the selling agent sold them on rebates if she represented them on this purchase.

I do have to say I have met with or spoken with potential buyer clients and have removed myself as an option. I realized we were not a good fit, or they viewed my roll as a gatekeeper with MLS and home access. I have also removed myself from potential buyers that repeatedly talk about "buyers rebates", I don't do that (I am one of the most experienced brokers in San Diego - holding an appraisal and general contractors license as well and have worked on more than $1 billion in real estate related transactions)

So in short, I don't ask for buyers to sign a contract because if I feel like it is the type of client that lacks loyalty I don't accept them as a client.

Best of luck,

David Rudd
Kindred Real Estate
0 votes Thank Flag Link Fri Jan 10, 2014
This is a great question and something that I go back and forth with. It's good to hear different perspectives on the topic.
0 votes Thank Flag Link Fri Jan 10, 2014
I would recommend signing a buyers agency agreement when working with an agent. This way, the agent knows that you are serious about purchasing a home and they can work for you knowing that you're not running around with other realtors as well. If a buyer signs an exclusive with an agent they can rest assure knowing that the agent is going to focus their time and energy on finding that buyer a home that fits their parameters. Even if they have to door knock neighborhoods to do so.
0 votes Thank Flag Link Fri Jan 10, 2014
I do not require it... I know this is not the absolute smartest way of conducting business but in a way this keeps me accountable. If they wont sign one, I will make a hand shake agreement. I tell them that I am old school and if I don't meet or exceed their expectations they can use someone else. This business is built on word of mouth and I feel like this is something people respect and I have rarely been burned. Great question, it's nice to hear other agents opinions. -Brandon
0 votes Thank Flag Link Thu Jan 9, 2014
I personally don't. I like to show a couple of houses before the buyer or myself commit to each other. After a few homes, we know if we will work well together.
0 votes Thank Flag Link Wed Jan 8, 2014
I handle it the exact same way!
Flag Thu Jan 9, 2014
I've learned the hard way-going to start a habit of using them every time.
0 votes Thank Flag Link Tue Dec 17, 2013
Before you take buyers out, do you meet them at your office?

I like to show buyers what I can offer them and let them know it is not a big deal to have the paper signed, just part of the process to buy a home.

If you go to a property and they want to write an offer won't they need to sign it anyways? Just speeds up the process while on the road.
0 votes Thank Flag Link Tue Dec 17, 2013
Before I even take someone out to look, that agreement is signed. I look at it from a Utah law compliance issue. If you go out looking at houses, have you disclosed agency? Are you working on implied agency... which can come back and bite you later.

Honestly, instead of having to ask myself these questions, I just get it signed. Surprisingly, I have only lost one potential buyer. I found that when you explain why, almost all buyers understand.
Web Reference: http://alexanderlovell.pro
0 votes Thank Flag Link Fri Dec 6, 2013
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