Metro Detroit Real Estate Homes For Sale

I am not an attorney nor your broker and in saying that - does your state not require an explanation of agency law as soon as possible - one this explanation is made (as required by law), it is a great time to ask if the buyer wants representation when they realize the value of same.....

I tend to agree. I've never had a buyer leave me to work with someone else after we already started working together. However, once we find a home and agree to submit an offer, I always include a buyers agency agreement along with the other forms.

My broker requires us to give the prospective Buyer "The ABCs of an Agency Agreement" disclosure at our first meeting.  As far as asking them to sign a Exclusive Buyer Brokerage Agreement, well I must admit I take it on a per case basis.  Not that I don't want them to sign one as soon as possible, it's just that if a Buyer is not getting the help they need from me I know they will likely go elsewhere.  Aside from that, I have seen multiple occasions where Buyer's abdandon an agent even though they did have a Buyer's Brokerage agreement with them.  So the question is, how much water does a Buyer's Brokerage agreement actually hold (aside from being required by law in some states)?  Sure you could go after them if they broke the contract, but who wants to be known as the Realtor that sues their clients...? 

I'm not pushy either.  I look at the big picture of relationships and they don't develop well over contracts.  Nice blog.  Thanks for sharing!

Rob

Kathy, I go over Agency Discloure of Relationships at the first meeting and have them sign it. I tell them at the time I am required by MI Licensing Law to go over the ways they can be represented in the State of MI. I explain this in not a buyer contract just the different ways they can be represented in Michigan.

 I do a Buyer Agency contract after I have been or my Team has been out with them once. Either they want to work with us or not. I think that is great that you haven't lost anyone but it really isn't about that, it is about loyality. I don't want to waste time with buyers that are not willing to be committed to us and loyal to us in helping find them a home.

It is all about relationships and that's why we don't ask them to sign one the first time out. Our office practises designated agency too. After one trip out and many,many emails they are usually ready. In fact, I can't think of one that hasn't signed up. But, I do take the pressure off before we have gotten to know one another.

Cathy, I take the same approach as I did when I was single. If you want to work with or date me, and I want to work with or date you, great! I have a lot to offer you. If you don't, that's fine too. I really wonder what realtors do when their relationship with a buyer sours that they have under contract?

Respectfully, I feel working with a buyer agency agreement is the professional way to conduct business.  No one lists a home without a listing agreement.  Why represent a buyer without an agency agreement?  Meet with your potential client and explain to them all of the benefits of working with their own dedicated agent.  Rather than a short trial period before asking them to sign an agreement, my agreement states that it can be cancelled by either party at any time upon the giving of written notice.  What could be so terrible about that?  If they aren't satisfied with the arrangement, they can cancel?  Of course, I have a protection period also, in the event they try to do an end run.  Business is business.  Written agreements which clarify the rights of the parties are the professional way to do business, in my opinion.  I think that my clients find comfort in the fact that they have an agreement which is definitive, and which they can refer to if they have any questions.

Cathy, I'm not sure about your state's laws but in most states you MUST discuss agency at first contact. Now this could very well be a separate issue from getting a Buyers Broker Agreement(BBA) signed. Personally, I would not try to get a BBA signed prior to building a relationship. If you are having difficulties getting one signed you may be asking too soon. Also, a proper BBA should as much to the advantage of the buyer as it is the agent. I think all agents that work with buyers should have a BBA. It doesn't mean you are locking the buyer in to a rock solid agreement but it certainly helps to ensure they are motivated and it does create loyalty. Not to mention it's the perfect time to negotiate your compensation so you can take the commission out of the equation and free yourself up to show ANY property that meets their parameters regardless of what the co-broke is or if it is FSBO. 

Thanks for the link love!!

Julie:  Each office in Michigan has a choice to be a designated agency or not so it is not law.  When I first became a Realtor, I was told to always have an agency agreement and when I did, buyers would be put off by it - I definitely don't have the right conversation which is why I asked this question and there is a lot of good thoughts here - thanks for your comment.

David:  Because we are a designated agency, I always have to have an agency agreement when I submit an offer and that is when I get it signed.  But because it comes up in our office (just came up at our continuing education), I am trying to sort out my approach.  Thanks for commenting.

Lee:  I agree with you--I would not want to be known as the Realtor who sues clients - not to mention the time etc.  A couple of us were discussing it in my office and we agreed that it really is not worth so much as we would not hold someone to it if they were unhappy working with us.

Rob:  I agree that relationships don't develop (or continue) over contracts that's why it always occurs to me like something I have to do and not something my buyers and I choose to do.

I explain how agency works.  I explain that without the written agreement that I (by law) MUST represent the seller and am in essence; working against the buyers best interest.  When a buyer still balks at signing; I say - sign it for the weekend (or day) and if you still want to work with me after- we can extend it.  I have never had anyone NOT re-sign.

 

Missy:  I have never separated the two situations - describing agency relationships and getting the contract signed.  I feel comfortable with the one but struggle with the second (hence this post).  Something came up at continuing ed that had me think that I am being unlawful in a way so definitely need to get a set practice - there are many different opinions in our office even though we are a designated agency.

Lee:  I feel the same as you do - plus the person I share my office with has had people work with another realtor after having a contract signed.  What can you really do but let them go if they really want to.

Stefan:  You have a very good point - in fact, when I was thinking about it and writing this post, I realized that I often meet sellers for the first time and they sign a listing contact with me.  In other words, we develop a relationship in a very short time.  So, I am still puzzled as to why I have such a hard time asking it of a buyer.

Bryant:  Michigan recommends that we be a designated agency but it is not law--each office can choose.  I don't understand what you meant by negtiating our commission - that never comes up with buyers only sellers - except to talk about what happens if they see a FSBO.  I always show any properties that meet their criteria (have to discuss FSBO).  You are welcome for the link - your post reminded me of my confusion over this matter.  Thanks.

James:

I had an investor who was very relunctant when we first started working together and he likes to find deals on his own.  In the beginning, we signed agreements just for a particular deal but not he is not so particular.  I do know that, when making appointments, the front office at the other agency often asks whether I represent the seller or buyer since, in Michigan, each office has a choice.