Top 3 Reasons for Working Under a Buyer Representation Agreement

If you're looking at a buyer representation (agency) agreement only as protection for the real estate agent or broker, you're missing a good deal of its value. There are significant values that can accrue to the buyer client as well. If you have trouble broaching the subject with buyers or asking for a signature on this document, here's some help.

1
The Buyer is Assured of Your Best Efforts

Buyer representation agreement

If a buyer might be working with multiple agents, or they're out cruising the open houses, you are at risk of losing them at any time. It's only logical that you would have a significantly higher level of comfort with a representation agreement, and thus you'd be willing to spend more time and effort in scouring the market for the right properties for your buyer clients.

To help you put this in front of your buyer prospect in a positive way, you might say that you do pre-showing drive-by of properties for your agreement clients. Due to the time and expense requirements, you're unable to offer this to non-clients.

Sometimes you may run into resistance to sign before they know you a little, so you may start working with them with the agreement that you'll present it again once they get to know you.

2
Your Buyer Representation Clients are Exposed to Every Eligible Property

Mapping IDX
Diverse Solutions Mapping IDX. Jim Kimmons

This is a big one for them. If this doesn't get them into the mode to sign the agreement, then nothing else is likely to do so. This might also indicate a less-than-serious buyer.

Basically, "Mr. & Mrs. Buyers, I am aware of some properties that might possibly meet your requirements but are not listed in the MLS. I feel it's in your best interests, and my duty, to look for FSBO properties that you might want to see. But we'll need to agree that I'll get paid a minimum commission if one of these properties turns out to be the right one for you. You can negotiate its payment as part of the transaction."

Believe it or not, buyers have been known to sue later when they see a home listed that they weren't shown.  It's just good practice to show them all homes that meet their criteria and keep a record of doing so.

3
Last, But Not Least, You Get Paid for Sure

Commission cash
iStockPhoto

This one is for your mental and financial comfort level. It's a whole lot nicer going to the office each day knowing that you'll be showing properties to buyers who are serious enough to guarantee that you'll get paid. There's also that better feeling you'll get knowing that you were able to show them all the homes that met their requirements, as well as having them well-informed as to their choices in representation. It's not fun having a buyer ask you after a purchase why they didn't see the home three streets over at a better price.