Working with buyers is a must if you want a successful real estate career in today’s market. However, if your buyers, like many other buyers out there, are working with multiple agents or out touring open houses, your efforts may be at risk.
Most brokers have come to the realization that a signed buyer’s listing agreement (also known as a buyer’s agency agreement or a buyer’s representation agreement) is necessary to produce the maximum financial return for the time, effort and money agents invest when representing buyers in negotiations. Why should you require a lesser commitment from a buyer when locating property than from a seller for selling property? Your services are valuable; you need to be guaranteed of a fee for them before commencing efforts to locate qualifying properties for a buyer.
To accomplish this level of financial certainty, you should present your prospective buyer with a written employment agreement — the buyer’s listing agreement — at the initial consultation. [See first tuesday Form 103]
If a buyer refuses to enter into a written agreement for your services, that tells you the buyer does not want a representative. What this type of buyer wants is someone to act as a locator or finder of properties — free of charge. Ask around — agents who end up assisting this kind of buyer soon discovers the buyer has turned to a friend or relative licensed as a real estate agent to submit an offer on the property. Alternatively, the buyer may simply submit an offer directly to the listing agent or seller himself.
Without the buyer’s written promise to pay a fee, you’re not entitled to receive a fee should the buyer acquire property by “going around” you. No fee has been earned which is collectable from anyone, unless the listing broker entered into a fee-sharing agreement with you documenting the buyer’s name and establishing your right, as the original buyer’s agent, to a fee as the “procuring cause.” [See first tuesday Form 105]
Be professional, be courteous, but be smart: protect your fee with a signed buyer’s listing agreement!