Buyer?s Agency Contract, Who Uses Them?

Buyer’s Agency Contract, Who Uses Them?

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Home Page > Finance > Real Estate > Buyer’s Agency Contract, Who Uses Them?

Buyer’s Agency Contract, Who Uses Them?

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Posted: Jul 26, 2009 |Comments: 0
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The selling of Real Estate has obviously changed over the years, specifically in regards to the procedure of how we as agents work with our clients, how we spend our valuable time with clients and also how we find interesting property for our clients.

 Before the internet came into play buyers and sellers were forced to rely on real estate professionals to find and show them homes that match what they were looking for as they didn’t have the ability to view every single home for sale in North America from the comfort of home by entering some quick data and clicking a mouse a few times.  Now don’t get me wrong, I love the internet, and it has made the lives of real estate professionals much easier in many ways, but in other ways it has hampered the profession in one way, but there is a solution to this problem….I’ll explain a little more….

 Back “in the day” because the client had no access to listing sheets and online listings etc, they needed an agent to find and show them everything, and therefore there wasn’t really any possibility of the agent getting screwed after spending months or sometimes years working with a buyer. 

Of course relationships were sometimes broken after a while due to certain reasons and the agent might not get paid…but for the most part agents didn’t have to worry so much about their client finding a new home for sale on their own, calling up the listing agent or walking into the open house an purchasing it because the public just didn’t have access to the information they do now without getting that info from their representative. 

Nowadays though, anyone, regardless if they are in the industry or if they are Joe smith from the bakery down the street can find every single piece of information about a home right from where it is located, to the price, to how long it’s been for sale, to seeing 20 photos of the interior, to finding tax info about the property.  It’s all available to the public, and although like I said before this has made industry professionals jobs easier in a lot of ways it has also cost a lot of buyer’s agents a crap load of both money and time. 

Why?  Because an agent, and I know of many stories exactly like this, can spend months if not years with a client, and that client can now see a new listing come up on their own, view all the relevant information about the home, go check it out without their agent perhaps and make an offer right there and now their rep has lost his or her paycheque.  It happens more than people think and it’s not always right to blame the clients, sometimes they need to act fast, sometimes they don’t realize how agents get paid , who knows.  But any agent that has had this happen to them will tell you it sucks.

Now this brings me to the actual topic of this article, and that is the use of Buyers Agent Contracts.  How many agents out there use them?  How many agents even know much about them? How many of the buyers out there are even aware of them?  And for those that are how many have said no when an agent has brought up the idea of signing one? 

 The buyer’s agent contract seems to almost be taboo in a lot of areas and I don’t understand why.  The whole point of them is to confirm the relationship with a client as a two way street.  The agent promises to spend the time, energy and expertise in assisting the buyer  with finding their desired home, and the client promises to use your services  and acknowledges that agent, and only that agent, is their representation ensuring the agent eventually gets paid for their work. 

I have heard agents that have been in the business a long time state that they don’t believe in them, that its wrong and that it’s not how “this “ business is done.  But I’ve also heard these agents complain about a client that has walked into an open house for example, and bought without them.  When you think about it, agents get signed listing contracts when they list a house stating that they, and only they, are that seller’s representation, so why would buyer’s agents not do the same?

 I have also heard agents say that they brought up the contract idea with a client and that the client said no.  My first thought is this is because the contract was not explained to the client properly because if it is why would the client say no unless they want to keep the option of buying without their agent open, in which case this should be very alarming to the agent. 

If the contract is explained properly, and this means it is explained that the agent is going to represent the client and dedicate their time and energy as long as need be to assist in finding the right home for them, and that the contract can be ripped up at any point if either party is not happy with the way things are going, just like a listing contract, then there aren’t many legitimate reasons why a client should say no.

I think if you are starting out in the real estate industry  you should make it part of your real estate practices to incorporate the buyers contract into your way of doing business. I actually think all agents should regardless of their experience, but especially if you’re on the newer side.

 I don’t know of any downside to using them, and there is obviously huge upside.  If you as an agent have one signed, and that specific client buys a home, you will get paid …bottom line.  And that’s why you are in this business right, to give good service and then get paid for your efforts.  Bottom line.

To read and learn more about buyer agency contracts and real estate topics please visit us at our Daily Updated Real Estate Blog  

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Article Tags:
buying, agency, contract, selling, market, realestate, investment, property, agent, investing, house, home, agents

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