How to Present and Use Buyer's Representation Agreements
As the broker and owner of a company with almost 20 agents, I have mulled over the topic of buyer's representation agreements with fellow brokers and Realtors for years. Not to toot my own horn (well, maybe a little), but I have represented buyers in almost every area of Austin and central Texas, in every conceivable price range (from a $15,000 lot to a $4.1 million ranch property). I typically represent more buyers than sellers (probably 75% or so).
So, you are probably wondering, how does Jason present his buyer's representation contracts? I'm guessing that if you aren't wondering this, you probably wouldn't have made it past the title of this post. Well, the short answer is: I don't. You heard me right. I have never made it a habit to require someone to sign a document to work with me as a buyer, and it just works better for my personal style. That being said, I wouldn't recommend this for everybody. In eleven years of real estate, I have had only two buyers sign an agreement with me, both out of necessity (one for a builder deal, and the other one was just too flaky, so I had him sign it).
Even though I don't personally use them, I developed a VERY low-pressure form for our agents to use. It is only one page, whereas the standard form in Texas is eight pages long. Ours states that the buyer agrees to use our company to represent them for 120 days from the date that it is signed, and it defines the market area very broadly (basically all of Austin and surrounding counties). It provides for a one-week written notice to break the contract by either party. Beyond that, it contains some brief disclaimers and that's it.
Obviously, I am not requiring our agents to get a signed agreement, but some do prefer to do this. I have trained about 35 agents thus far, and I have a method for presenting this document or any similar paperwork that I think works really well. In Texas, we are required to have any potential buyers sign an "Information about Brokerage Services" form, which essentially just lays out how various agency relationships work. This may also be the case where you work, or perhaps there is another form that you have to use.
At any rate, I suggest that our agents present both forms upon meeting the client, but DON"T make them sign the buyer's rep agreement until you are finished for the day. Here's the basic script (although it is really free-form and you should put it into your own words to make it more effective):
YOU: I have a couple of forms that I need to show you. One of them is required by the Real Estate Commission, and the other one is for our files here in the office (yes, I let the agents put the blame on me if they want to).
Then, you proceed to briefly explain each document, have them sign the completely innocuous form, then,
YOU (again): So, since I don't want to assume anything yet, I won't require you to sign the agreement until we are ready to wrap things up today. That way you get a chance to preview the way I work with no obligation on your part. I'll let you keep it to look over as we are driving around.
This has pretty much always worked for our agents, even those who aren't as smooth.
The bottom line is, if someone is unwilling to sign under those terms, you probably shouldn't waste another second of your time with them. They are simply not worth the effort and you are probably spinning your wheels if you continue. Make them find someone else to take them to lunch and play "cab driver" for weeks.
With that in mind, however, if the buyers do sign the agreement to work with you, I can virtually assure you that you never needed it in the first place. The simplest way to look at it is that some people are loyal, and some (unfortunately) are not.
Please feel free to post any questions or comments below, or email or call me if you like. I honestly enjoy helping people in this business! Thanks for taking time to read my post. I hope you find it helpful to you.
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