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It has happened to us all. It will happen again but I still do not use a Exclusive Buyers agreement Paul. It is like a prenuptial marriage agreement and can ruin the relationship. I have to agree with Alan May about holding on through excellent service but sometimes that does not work.
Nina Hollander, Broker
San Jose, CA
1. Buyer Broker agreeements mean "O" unless the buyer understands what they are signing. There must be "informed consent" which means that the buyer needs to be given a meaningful disclosure so they are fully informed before they give their consent to stay loyal.
2. I suspect that most agents just slip it in or gloss over it, which is evidenced by the number of AR agents who have a buyer sign a BBA at the time of contract, or before closing...why then? because state law requires a disclose?
3. If you are not planning on enforcing the provisions in the BBA agreement, why bother with one? All listing agents have no problem enforcing listing contracts but turn to mush when it comes to a buyer "listing contract". Same thing, why the different standard?
4. In Kat Palmiotti comment, she did not enforce the contract because the buyers counld not afford it. If the buyers understood their exclusive responsibility and blew her off, who cares that they are buying a home they can't afford? They could have made payments.
5. As far as the other agent...it is not the responsibility of the buyer to educate the other realtor as to their ethics. It is however EVERY agents duty to ask the buyer if they are under contract with another agent,...just like they do before they take a sellers lisiting. That agent in Kats story is not off the hook, because he should have asked. Unfortunately this is business and no room for the buddy system. What if an agent has to negotiate a contract with an agent friend? Will the buyer loose out because of it?
6. Yes, I always use a buyer broker agreement. I have personally not been burned but I had a couple of my agents who did. One I did not persue, because agent had buyer sign it on the hood of a car with vague explanation...not a disclosure they understood, The other buyer I sued in court and won...she made payments for 2 years.
We do not list properties, so every buyer has to count. Our buyers seek out our services, so signing a BBA is never a problem.
If you decide to use an agreement, you will find that you will start doing better business with clients that respect you.
La Pointe, WI
Candice A. Donofrio
Fort Mohave, AZ
Yes. It someone doesn't want to sign one, that is what I call a clue to stop wasting my time.
Tony and Suzanne Marri...
Thomas J. Nelson, REAL...
La Jolla, CA
Colorado Springs, CO
Non-negotiable 100% sign one or I refer them to another agent. They are not their to create loyalty; they are there to prevent to one in a million occurrence. It's more about commission than loyalty for me. 95% of my clients are referred to me and it's just a formality to set up proper commission expectations and minimums. That way I can show all properties and the buyer knows that below 2.5% they are participating in my commission. Oh by the way, if you make your clients sign a listing agreement, it's the same thing with a buyer agreement and creates equal treatment of clients.
Paul S. Henderson, REALTOR®, Broker, Tacoma Washington BBA's are mandatory in my State.
Yes...play to stay or go away
if i were an agent...i am not, but if i were. i would have them sign it if they wanted to use me. i would sell it as it is no different than a listing agreement
The only people who have burned me are close friends. I use it with everyone now. I let them know up front 'it's company policy,' I'll go out for a day, if we get along, they need to sign it before I get too far into the relationship. I let them know it protects them and allows me to 'advocate' for them. I've never had anyone balk . . . except those that only want to work with the listing agent . . . and I don't want them anyway.
Tony and Suzanne Marri...
In Colorado, if you represent a buyer as a buyer's agent, you must have the Buyer Agency Agreement signed. Not often do I work as a transaction broker, so every buyer signs.
Paul S. Henderson, RE...
It is a good practice. Some prospects do not want to sign them.
We always use a buyer agency agreement, without exception. If a buyer prospect won't sign a contract, why would a real estate professional waste time with them?
The idea of "excellent service" being some sort of guarantee of loyalty is a non sequitur. And the concept that agents who trust non-signers makes those agents superior service providers is a pretty big stretch.
Real estate is a contract business, from beginning to end. If the consumer doesn't like that, they will eventually learn.
As soon as I am sure that I want to accept them as a client, we sign an agreement before moving forward.
I won't take a customer out without an agreement to become a client - even if it is just for the day. As they say in France "No ticky - No laundry".
Paul, I will say that I hardly ever used the buyer agreements some time back & most clients were loyal but with that being said I use them now. So valuable time is not wasted & separates the lookers from the serious buyers.
Colorado Springs, CO
Yes, but the "when" isn't always the same. I like to meet with new buyers in the office and get the agreement signed that day, but it doesn't always work out and I sometimes do it subsequently.
I do have to say, though, that using a buyer/broker agreement is NOT 100% guaranteed to result in loyalty. I had clients sign one once, and they went to another agent anyway, which I didn't find out about until after they went into contract with another agent as their representation (they were not responding to my calls/emails but I thought they were "healing" from the deal they lost). It is quite a story, and I could have sued them for the commission but decided not to because that extra commission would have meant they wouldn't have been able to afford the house and not only wouldn't they get the house, but the other agent (who I knew) wouldn't have received his commission, and he did work for them also and didn't know about my broker/buyer agreement.
Anyway, the short answer is yes, I use it with every buyer.
Colorado Springs, CO
I stopped by.
I do, but you're not going to hold them with a piece of papaer! I have a clause I insert that lets either one of us out.
Never been burned. Don't use them, unless I'm taking a buyer to an "off market pocket listing" of another agent (aka a home under construction and not ready for the MLS yet).
Actually, more often than not my buyers ask me when they should sign an agreement. I've never been burned. My attitude is if someone decides they really don't want to work with me they'll find a way out of the agreement--mostly because I'll give it to them. Why hold someone who doesn't want to work with you hostage?
I get many of mine signed just before we start making offers so I can be completely legal in my representation of their interests.
Buyers get pre approved and sign a buyers rep or they can find someone else to work with.
Always. Is this another tale of being burned when not using one?
I encourage each agent to have their clients sign a buyer agency either before of just after the first showing. If the clients refuse they should walk.
Nah, it's just piece of paper - if they don't want to work with me, what am I going to do - Sue them?
I think not.
At a certain point we use them, but i don't pressure anyone to sign one the first time we meet.
Paul S. Henderson, REALTOR®, Broker, Tacoma Washington - not always. However, rarely I am burned.
In fact, I fire some buyers if our frequncy don't match.
I use them at least for every home I show someone
Almost never... No one here will sign.
If I was to work with a buyer, they have to sign up. Yet, it would be subject to the actual person & circumstances. I am glad I lean toward listing to be sure
When I set out working with a buyer I have the converstion about the buyer representation agreement and how and why they need my fiduciary duties. I have not had a buyer not sign it when asked to do so.
great question - i love reading the answers
In my 30+ years, I have never used a Buyer-Broker Agreement.
I use on occasion.
I don't use them at all.
I have been burned once or twice in my career, but when that happens, I find that it's more my lack of educating the client, than a desire, on their part, to screw me.
I figure: "If I'm doing my job properly, they'll purchase with me... If I'm not doing a good job, they'll go elsewhere... and I don't want to hold a client to me based on a contract. I want to hold the to me based on truly excellent service."
when those for whom I market work a buyer, they never have a contract with them....
I hardly use it; if I am doing my job shouldn't need it.
I always use one. I discuss it up front as that is how I work. Always best to lay out guidelines. If I'm going to work hard for them I expect their loyalty.
I don't use it much except where I feel like I really need to protect myself. For example, a buyer came to me who had been working with the LISTING agent in a dual capacity. He realized that this agent wasn't on his side, and contacted me. I needed the contract to let the listing agent know she was now dealing with him through me. And, to her credit, there was no argument.
I usually get it signed up front !
No, some won't sign them or just don't get it. I agree with Chris Ann.
Not always; I have so much repeat and referral that I am pretty confident I have secured that client at the get. I WILL get a fee arrangement up front when a client is going for lots of off-market or FSBO deals where cooperation is not yet secured, or we know that a co-broker will not cooperate.