Top 3 Reasons for Working Under a Buyer Representation Agreement
A buyer representation (agency) agreement is a contract which delineates your relationship as a prospective home purchaser with a real estate broker or agency. 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. Significant value 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.
The Buyer Is Assured of Your Best Efforts
If a buyer is working with multiple agents or is out cruising the open houses, you are at risk of losing that buyer's business 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 a preshowing drive-by of properties for your agreement clients. Due to the time commitment and expense of doing so, you're unable to offer this service to nonclients. People are very risk averse and will dislike the idea of missing out on great properties as a result of not having access to this additional service.
A buyer might feel resistant to signing a binding and, in their mind, limiting agreement with you before they know you a little. In this case, you may choose to start working with the buyer with the agreement that you'll present the buyer representation (agency) agreement again once they get to know and trust you.
Your Buyer Representation Clients Are Exposed to Every Eligible Property
Seeing every eligible property is a very important part of your representation clients buying process. If the assurance of plenty of choice doesn't get potential clients into the mood to sign the agreement, then nothing else is likely to do so. Continued resistance to signing might also indicate a less-than-serious buyer.
Basically, you should say something along the lines of the following: "Mr. and Mrs. Buyer, I am aware of some properties that might possibly meet your requirements that 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 FBSO properties that I find you 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.
You Get Paid for Sure
The knowledge that you will get paid for your work will help with your own mental and financial comfort. 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. You'll also be able to enjoy that great feeling of 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.