"We just want to look at houses, but every agent we call wants us to sign a contract before we ever go out and look. We feel that the agent that finds the house we want should be the one that gets paid."
This is a common response I get when a potential buyer is presented with a brokerage agreement. They feel that I am trying to force them into a commitment before that have seen the first property. They think I'm painting them into a corner, forcing them against their will. But Consider this:
The widespread use of the buyer's brokerage agreement was a CONSUMER DEMAND, not a concoction of the real estate industry. It s the aftermath of litigation involving agency and the duties of the agent. Buyers demanded representation, and brokerage firms paid huge damages for creating the illusion of representation without a contractual agreement.
Now think about this: Would you hire a roofer, a plumber, or even someone to cut your grass without a written proposal? I doubt that you would. Yet on the biggest single ticket item you will be purchasing, your home, you don't expect the agent's duties, responsibilities and fees to be clearly defined in writing? That's not really very practical, is it?
In Georgia, it is also codified. The Official Code of Georgia, 10-6a et al seq. states that no one is represented as a client by an agent in a real estate transaction without first entering into a written agreement defining the relationship between a real estate agent and a client.
So when I ask you to sign the agreement, I am obeying the law, and endeavoring to protect your interest by offering full representation, and I will work hard for you.
For more information: What is a Buyer's Agent in Georgia.
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Richard Weisser, Broker, Associate Broker, Auctioneer, E-Pro, CE Instructor |
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All content, including text, original art, photographs and images, is the exclusive property of Coweta Fayette Real Estate, Inc., and may not be used without the expressed written permission of Coweta Fayette Real Estate Better Homes and Gardens Metro Brokers, Newnan Georgia. All information is believed to be accurate but is not warranted, Copyright 2003-2009. Richard Weisser REOS, E-Pro. licensed Auctioneer. 770-827-6225.
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good post. We have this here in Las Vegas. I am starting to use this when I work with buyers...thanks
I guess buyers agency is different in every state, but this post is helpful. I just completed my ABR and am waiting for my designation. This will help me fine tune my buyers presentation! Thanks!
Richard.. In Connecticut this is also mandated. I put the potential buyer in my shoes. I let them know what the agreement is all about. Next, I explain to them that would they jeopardize their livelyhood and family, and pay a fine for a stranger? For this is the postition they are puting me in. I try turning the tables for the buyer to have empathy for the realtor... it is amazing when you put it this way they understand better.
Glad here in florida we are automatically Transactional brokers and do not have to sign anything. Right now we do just for our files but it's not mandatory and nor is buyers agreement.
Richard - a very good point. In Arizona, the state demands agents have the Agency discussion and have the Agency disclosure declaration signed before we talk about anything else. The Buyer Broker Agreement only has to be signed before an offer is presented. So many agents don't want to scare off the buyer until that point.
Personally I have the employment agreement signed at the same time as the agency doc. It's all a choice of how much time one is willing to gamble away or give away for free. I use the analogy of asking the client to imagine that their boss came to them on Friday and asked them to work the weekend for free. I then ask how they would feel about it. Usually they sign.
I recently took a class and the instructor suggested getting the Buyers Agency Agreement at least signed for the day that you are taking them out showing property, that way you are both protected and you represent them as your client and their best interest is protected.
I rarely use the agreement in residential transactions. Commercial transactions are another story. In recent months I have heard very good arguments to do so. I am interested in what other agents have to say. Great post!
In Georgia a buyers agency agreement is not required. Yes, a contract is required to have agency, however, we are not required to be a buyers agent, we can be a "transaction broker". (Unless something has changed in the last month or so that I am not aware of).
We do have to disclose, at some poorly defined point in the relationship, what are roles are under the various types of agency. Yes, that disclosure has to be signed but is not a contract.
I try to inform customers, as early as I can regarding this, and do point out the benefits, risks and responsibilities, to both myself and them, of each type. To tell the customers that they have to have that agency agreement to buy might be breaking the law, unless you state that it is your policy not to represent buyers without an agency agreement.
Thanks for reminding me to include that it was buyers who demanded some type of agency buyers representation.
As for hiring a contractor, a bid, or a proposal, is entirely different than a contract for those same services. Buyers should understand your terms/fees/services/etc. before an agency agreement is placed in front of them.
But hey, I haven't been in the business that long, so what do I know?
To all...
Please read my members only follow up to continue the discussion!
Let's continue the discussion behind closed doors, Members only Buyer's Brokerage Part 2
Michael...
I would suggest that you learn more about this instrument than any other you use. Thanks for the comment.
Laura...
Please keep in mind that it was consumers that DEMANDED agency! Thanks.
Heather..
Thanks for you continued comments, I appreciate you support very much. May I respectfully suggest that you read my follow up post above and you might discover that transactional brokerage isn't all that great!
To all...
Please read my members only follow up to continue the discussion!
Let's continue the discussion behind closed doors, Members only Buyer's Brokerage Part 2
Valerie...
Good for you. Might I suggest that you hold the line that it is your desire to HELP them by representing them. Thanks for your comment.
Brian...
Thanks for your comment about Arizona. But if properly presented, the Buyer's Agency Agreement will develop MORE CUSTOMER LOYALTY! It's all in the delivery!
To all...
Please read my members only follow up to continue the discussion!
Let's continue the discussion behind closed doors, Members only Buyer's Brokerage Part 2
Allison...
There is only one reason that the customer would not want to sign the agreement for one day. And that is, they know you are NOT the one that will be getting paid!
To all...
Please read my members only follow up to continue the discussion!
Let's continue the discussion behind closed doors, Members only Buyer's Brokerage Part 2
Mel...
This is a consumer protection, so why hold off until the last minute? I say, the sooner the better, but that's my Georgia Dawg opinion! Thanks, as always.
To all...
Please read my members only follow up to continue the discussion!
Let's continue the discussion behind closed doors, Members only Buyer's Brokerage Part 2
Mike...
While it is possible to be only a functionary in Georgia, I doubt that you ever have actually done so.
If you have ever offered an opinion as to value, as to what should be offered, as to wheter of not an inspection should be done, as to how many day of diligence ... or any other non-miniterial act, thet you have become an unprotected de facto agent. and you your broker, and your company are one lawsuit away from bankruptcy. I respectfully suggest that you read the instrument front to back and you will never want to proceed without getting it signed again!
I will show someone a property if they call from the sign or an ad and we make an appointment to meet at the property. But, we do not look at any other properties nor do they get in my car without a signed agreement.
Richard, again, a very well presented post of yours and a fresh approach for buyers to understand why to sign the agency agreement. I think the buyer like to hold out as long as possible. It seems to go hand in hand with wanting to, of course, pay the lowest price for the home and also feeling like they are in control, and they don't realize that maybe they actually have more control over both with an agency agreement.
JL...
I think that if we commit as an industry to the buyers agreement, it won't be such an ordeal to get them signed!
Mary...
Thank for for the kind words. I try very hard to convince buyers that all of my skills and expertise are unleashed at the tme of signing! I believe you're right, it is a contol issue for the buyer, which I think can be rationally overcome!
My buyer agent used to be intimidated by getting buyers to sign...as soon as I made it Amandatory to use them, she hasn't had any issues since. It's when it's an option that it is easy to avoid it.
I hear every argrument imaginable about why not to use them from "I don't need a piece of paper to prove loyalty" to "It's hard to get them signed since the competition doesn't do it"...
That's horse hockey! When presented properly, they sign every time.
I agree with Amanda. If it's the only way you work, they will sign. If they don't, they have their own Agenda. That agenda is usually wanting a free ride.
This is an excellent post. I am struggling with the buyer broker agreement, love the concept, hate the buyer objections. Lot so great points here, thanks for sharing I am going to share this post with my teammates! Thanks!
Amanda...
Why is this any different from getting a listing signed? How much money and time would you give to a seller that was unwilling to sign a listing.
With Gasoline hovering at $4 per gallon, it isn't a matter of loyalty, it's a matter of business. Amandatory! lol
Sandra...
If they won't sign they are telling you that you won't be paid! It's that simple!
Leslie...
Always remember that consumers DEMANDED representation! Put t back on them.
Thanks for the comments.
Please read my members only follow up to continue the discussion!
Let's continue the discussion behind closed doors, Members only Buyer's Brokerage Part 2
Richard: Great explanation of the Buyer Brokerage agreement and why it's necessary.