Sign an exclusive Buyer-Broker agreement?

howard11792 · 10-17-2007, 10:43 PM

I have a client flying in from out of state to look at vacation homes. We have been emailing and talking about available properties on the phone.

Here is my dilemma…

I have asked him to sign an exclusive Buyer-Broker agreement and he is now claiming that. He’s a bit uncomfortable with the exclusive agreement. So, for this early stage of our relationship he is asking that I consider working informally with him, or under a version of the non exclusive Buyer-Broker agreement. Additionally, he claims to have no plans to work with anyone else. He would be happy to discuss pro and con of converting to my exclusive agreement.

I just sent him 12 benefits of an exclusive agreement.

What is the best way to handle this situation? Do I spend my day showing homes to him without the agreement?

Comments are appreciated.

Thanks

ericbadgley · 10-17-2007, 10:58 PM

Sometimes the older generation does not like to sign these. Young buyers are easy to get the to sign them.. I would just lock him down and explain to him that this is how you pay the bills and what you are going to to for him. Then ask for a commitment to working with you. Allot of times a verbal agreement has just as much power as a signed doc. I have 10 minute buyers presentation that I sit down and get a commitment either in writing or verbal before I show any property.

darrenwoodard · 10-17-2007, 11:03 PM

What will most likely happen is that you will be out looking at property and you will see plenty of those little red and white signs. That's right, FSBOs. Now, I feel very confident that he is not going to work with another agent, but what if he finds a "For Sale By Owner" while you are driving him around. How would you handle that situation?

webmaster · 10-17-2007, 11:08 PM

Quote:

he claims to have no plans to work with anyone else

So he should sign - full stop! Explain to him that this is not a contract obliging that he MUST purchase something through you - merely that if you agree to lend your professional wisdom and experience to his home search, he guarantees that you will be justly rewarded for your work should he decide to purchase.

If he won't sign - then he is not being truthful about not working with anyone else, sounds like he likes to have an out.

ericbadgley · 10-17-2007, 11:09 PM

I closed 37 transactions last year and 34 already this year. I have yet lost a deal to a fsbo. Some buyers will not & don't feel comfortable signing agreement. I wouldn't loose the buyer over a small percentage that they may be lost to a fsbo. Out of those 37 transactions, I never had any buyer sign agreement. It maybe different in your area but its not our areas style.

OCTeam · 11:42 PM

Maybe we have been lucky, but we don't use them either as I would never sign one when I was a buyer. If we do what we say we will do, we don't lose them. To us, it's all about trust...if you earn their trust, you earn their business as they want to work with you.
Most don't use a BBA in our area, but we applaud you for doing so.

We'd show property unless we felt it was not a good fit for us or if we felt he was not forthcoming with the information we need to do the job. In other words, for each step we take forward, the client needs to do the same.

u2man · 10-18-2007, 06:55 AM

Take him out for one day and show your expertise. Then bring up the baa and see what happens. Also, I've found bringing up the baa prior to the client arriving doesn't work as well as waiting to the initial meeting.

A few years back I had two clients coming in the same weekend and both leads were 4-500k. I gave another agent one of these leads who bought a 485k home. The one I kept bought fsbo "without" me and used my lender. Wouldn't return phone calls etc and bought a fsbo 40 miles away from the area they just had to live in. It was a good fit and we saw some homes they loved. I had no baa agreement. About a 12k learning experience.

I get clients all the time who are working with other agents but haven't signed baa (red flag #1) I get them to sign or don't work with them period. About 95% sign and I close the deal. One of these cleints had viewed over 75homes with some agent. Every market is different concerning baa but customer loyalty is unpredictable!

After many years working with "only" buyers I've found I'm more productive using baa.

jessiesc · 10-18-2007, 07:15 AM

We stumble on this topic constantly.

While we do try to get the agreements by pointing out that the agreement is specifically for the properties we will show and does not include other properties, it is a very difficult sell.

Most times to date (about 99%) it hasn't been an issue. Either the customer continues to work with us, or they don't buy at all. Rarely do we get someone go to another agent (it has happened, but was a unique situation early in our career) and purchase.

I'm a numbers guy and if 99% is working, and 1% is a loss... I'm going with the 99%

darrenwoodard · 10-18-2007, 07:31 AM

I have closed about 42 transactions this year without a single buyer's agency agreement signed. She asked a question and I stated what could happen to make her feel uncomfortable; FSBO. When I was a new agent out with buyer's, I would cringe at the site of a FSBO sign.

I only take out buyer's that are personal referrals that know that they are working with me exclusively. In your situation Jessie, I would get it signed. If he is only coming to town for a few days and you are making yourself available to him for whenever he wants to look at properties, he should have no problem signing. These buyer's agency agreements are two way contracts, therefore you have to make sure that you are ready to provide services for your clients.

I wouldn't lose the buyer either, but you have to push your services and explain to him that hiring you is a great thing, because as a client you get these A+ Services.

jessiesc · 10-18-2007, 07:39 AM

Um, I believe Granda is the OP, LOL... Not Jessie

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