Buyer-broker Exclusive Agreements

By: Robert Nachman

Visualize this... you're lying in bed late one night, thinking about what you accomplished that day. You took a new buyer, a couple and their two children, out to look at some resale homes in the morning and early afternoon. After you dropped them back at the office, you headed over to the title company to.. wait a second... let's go back... you dropped them back at the office - as panic starts to set in, you wonder ... what if... "no"... they were a nice couple... but... what if... what if they went back to that area they really liked, and went into that new home complex, and signed in with the builder you really don't care for? What if... what if they went back to that For Sale By Owner (FSBO) home that was down the block from one of the listings you showed, (the one you turned down another street to avoid passing?) What if... what if, tomorrow, while you're at another client's home inspection, the couple and their children go into an "open house" they see, like the home, and "strike a deal" with the listing agent? What if...?

Did this "visualization" cause you any anxiety? Can you relate to the emotions evoked from this "fictitious" scenario? Chances are, you said yes to one, if not both! Good news! You can do something to alleviate these anxieties and fears. It's called the Buyer-Broker Exclusive Employment Agreement. Wait...a few of you...maybe even most of you... just said, "I don't use that," or "I would never sign that myself; how can I make my client sign that?"

Let me ask you a question. Let's say you go to a listing appointment, and agree on terms/pricing. Would you go back to your office, order full-color flyers, arrange for a virtual home tour on the Internet, order an ad in Homes and Land, call in line ads for your local newspaper, put the home on office tour, set up an "open house" schedule, send out "Just Listed" cards to the homes surrounding the listing, etc., without a listing agreement? Of course not! Then why would you spend dozens of hours of your time (the equivalent of spending your money), with a buyer, without a Buyer-Broker Agreement (which is basically the same as "listing" your buyer?

If you're asking, "Well, how do I get them to sign it?", I will tell you that it's all in the approach. You can't "fear" the agreement, or you will never be able to present it, let alone ask anyone to sign it. Try sitting down with your client, after you get them pre-approved, and before you show them any homes. Conduct a buyer counseling session with them, discussing all facets of the home-buying process. In the course of your presentation, present the Agency Agreement and Buyer-Broker agreement, then set it aside until the end of your discussion. After you have developed rapport, and a confidence/comfort level, you can re-introduce the agreements, and ask for their signatures.

No, it's not always as easy as it sounds! Many consumers have never been exposed to the Buyer-Broker agreement, and ask why other Realtors have never asked them to sign it. I usually say that it is similar to signing a listing agreement to market their home; this is a "listing" agreement to help them purchase a home. I go on to explain that most Realtors give "customer service", while I give "client service", which is on a much higher plane of care and commitment to them, their needs and objectives.

Another objection I get occasionally is the client saying they will work with me in finding a resale home, but not a new home. I explain to them they will not be paying any more for my services on a new home; the builder/developer pays my compensation, and I am able to represent them (the client) exclusively, in the transaction. If the prospective client continues to hedge, I explain that since I can help them with resale or new, we must commit our allegiance to each other fully, or not at all. Don't hesitate to "walk away" from these "customers". You can't lose what you don't have!

One final point: practice your Buyer-Broker presentation, as you would your listing presentation. Try it out on an associate in your office, or record it on a video camera and/or on an audio tape. The more comfortable you get with the approach and presentation, the more relaxed your prospective client will be!

Just remember... it's just like listing a home!

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