Buyer's Agent Agreements: What states and how clients repsond? (contract, Realtors, agreement)

[cynmkolohe]

Just curious about how this works in other locations. We don't use these agreements often in general residential/land sales in my area, so not many people are aware of it. I'm beginning to wish we were required to do it.

Bumped into a situation this week where an individual I've shown property to recently (and have been in communication with by phone and email for about two weeks) decided to call the listing agent for a particular property I recommended he check out--he told her he would work with her on "this" lot. Further conversation reveals the he likes to "call the agent on the sign" and is currently "working" with several realtors. He told her this when she asked if he was the same person for whom I had called her to get information earlier that day.

Your thoughts on Buyer's Agency agreements? How does the process work for those who use them? What are reactions of buyers who are unfamiliar with them?

[mrsengle]

Aloha cynmkolohe! How's the weather on the Big Island?

In Texas, we do use buyer rep agreements, and we have to ask a potential buyer if they are working with an agent. If a buyer is working with an agent, but has not signed the agreement (subagency), the agent's loyalty lies with the seller by default. Every buyer is given the Information About Brokerage Services form which clearly outlines who represents whom, so that there is no misunderstanding about this, and the agent is relieved of that liability. It is not a contract - just an acknowledgement that the buyer is fully aware of representation before they enter a contractual agreement. By law, an agent is required to present the IBAS form, but the buyer is not required to sign it (although most brokers require this before their agent(s) enter into a buyer's rep agreement). It is my understanding that some rural areas do it old school and don't bother with buyer's rep. It's only been around for about 20 years or so in this state.

It would be interesting to see how other states do it, although I can't imagine that it's much different.

[ISellAddison]

I'm in Texas, too. On the back of my Information About Brokerage Services form, I print out two columns, one explaining what I can and cannot do for "customers", the other explaining what I must do for "clients". Clients are those who sign a buyer representation agreement.

For buyer customers, I can:
provide information regarding properties
show properties available through MLS
prepare offers they wish to submit
assist them with financing
work with them to facilitate the closing
coordinate access to the property for inspections
disclose any known defects

For buyer customers, I cannot:
give advice on how much to offer on a property
disclose what amount the seller will take
disclose seller's motivation for selling
provide information about previous offers
disclose any of the seller's deadlines
give advice on a position to take during negotiations
disclose any information that could be detrimental to the seller's negotiating position

For buyer clients, I must:
provide everything known about former negotiations, offers, etc.
disclose how long the property has been on the market
assist the buyer to develop a negotiating strategy
develop and interpret a competitive market analysis
disclose conversations with the listing agent
give advice on a position to take during negotiations
while showing a property, solicit information from the seller

I find the IABS is a great lead-in to presenting the buyer rep agreement. Once they understand a little bit about agency, they want to be represented.

[PghREA]

I'm in PA and we need an agency relationship form for every person we work with. We explain the different types of agency that are available and the customer picks one to determine if he remains a customer or becomes a client.

[Greatday]

Arizona - Buyer Broker agreements very common and well recieved

[cynmkolohe]

Originally Posted by mrsengle

Aloha cynmkolohe! How's the weather on the Big Island?

Rainy and humid in Hilo today (no complaints, we like things to stay green on this side). So we've decided to head to the Kohala coast for a beach day. Sun and sand!

Thanks all for the replys so far. I've been discussing this with a few agents here who have worked in different states in the past...and continue to get mixed responses.

BTW, my brokerage is one of the best about discussing agency with clients...we have a nice brochure that discusses the difference between customer/client relationship...a useful tool. And we have a Standard Form that we can use for Exclusive Right to Represent--but the only time I've really seen that used is in commerical brokerage.

[Tish Thompson]

I'm licensed in VA and MD and we do things a lot like TX does. Every buyer I work with signs an agency agreement.

[Roselvr]

Originally Posted by cynmkolohe

Just curious about how this works in other locations. We don't use these agreements often in general residential/land sales in my area, so not many people are aware of it. I'm beginning to wish we were required to do it.

Bumped into a situation this week where an individual I've shown property to recently (and have been in communication with by phone and email for about two weeks) decided to call the listing agent for a particular property I recommended he check out--he told her he would work with her on "this" lot. Further conversation reveals the he likes to "call the agent on the sign" and is currently "working" with several realtors. He told her this when she asked if he was the same person for whom I had called her to get information earlier that day.

Your thoughts on Buyer's Agency agreements? How does the process work for those who use them? What are reactions of buyers who are unfamiliar with them?

As a buyer myself, I do a lot of looking online. I am signed up at all of the major sites (realtor.com, ReMax, Caldwell Banker, Weichert, Prudential Fox & Roach, Yahoo; haven't gotten to MSN or C21 yet)

Anyway, the gal that listed my house was taking me to see properties I've found myself. This was a courtesy since she listed my house. It was rare that she sent me something I hadn't already seen. I remember 1 such occassion where we talked on the phone, she then sent me some stuff from the NJ Trend. I got the MLS #'s from that, then put it into ReMax, since I didn't have a lot of time, I made a new folder titled her name Trend. When I had more time to go back and look, 1 out of 8 properties I hadn't already ruled out myself.

I go to another forum, some people do not want to work exclusively with one agent. They feel that if they find a property, do the leg work (drive by) call the listing agent for them to open the door. If they like the house, they may decide to give a low offer, basically less what an agent (had they brought one) would get in commission.

In your situation, since this person appears to do his own leg-work, can you really say that he didn't find the property by himself before you brought it up? Since you used email and also called the listing agent, you have proof that you were working with them; how far do you want to go with that?

[cynmkolohe]

Originally Posted by Roselvr

I go to another forum, some people do not want to work exclusively with one agent. They feel that if they find a property, do the leg work (drive by) call the listing agent for them to open the door. If they like the house, they may decide to give a low offer, basically less what an agent (had they brought one) would get in commission.

In your situation, since this person appears to do his own leg-work, can you really say that he didn't find the property by himself before you brought it up? Since you used email and also called the listing agent, you have proof that you were working with them; how far do you want to go with that?

Just curious, if you are contacting a listing agent to show you property, are you making clear that you want to be a "customer" not a "client" and that you do not want representation? And do the listing agents thoroughly explain to you that their duty is to the seller for as long as you are considered a "customer"? Also, if the agent who has your house listed is showing you property, is she aware that you are not considering her your representative/agent in your property search?

In my situation, I am not planning to pursue this at all. I provided information to "Mr. X" and was in communication with him for several days about a vacant lot down the street from a house I had shown him earlier. He had stated that he wanted to find a "good deal". While investigating on his behalf, I was made aware by the listing agent for this lot that the seller would consider offers up to $100,000 less than the list price. Mr. X would have had no way of knowing that just by being aware of the properties for sale in his area. But since there was no agency agreement, if he chooses to work with the listing agent I am going to move on and put my energy elsewhere. When I contacted Mr. X to answer the last question he had asked me, I told him that I was aware he had been in communication with the listing agent. We discussed agency briefly and then I wished him the best if he decided to put in an offer on that lot, and let him know that if he sees a listing from our company that interests him, I would be happy to help him with that.

[Roselvr]

Sounds like you handled him well.

I've never called a listing agent. There was one time I thought I might have to but my agent was able to help me.

If you'd like the link of where I go, I can give it via pm. You can post a question there; hopefully those that have done this will respond.