I wrote a post last week titled “Working with Buyers on a wing and a prayer!” This one is a follow with some pointers that may help in getting a Buyer Brokers Agreement (BBA) signed if you choose to work with one. And I hope you do. Here’s what I do.
First, if a buyer calls me to see one of my listings I will meet them at my listing to show it to them. At this time, I will not show them any other properties unless I happen to have another listing that’s similar.
If Buyers are just calling in, for any other reason, my goal is to make an appointment to meet with them. Since I don’t have an office it will either be at one of my listings or a coffee shop.
In either case, I’m going to sit down with them to find out what their needs are before I spend time showing them properties. Now I’ll assume that you have already asked them some basic qualifying questions over the phone. I won’t get into those here but will later if you need me to.
Anyway, I am now sitting in front of the Buyers. The next step, of course, is to just talk with them. This is your opportunity to bond with them a little and build some level of trust. This may take you 15-30 minutes. Just chit chat. Forget about trying to get their business at this stage and concentrate on a sincere conversation. You want them to like you.
Next you want to get down to business. The first thing you need to do is whip out a BBA and have it in front of you. You will be filling this out as you speak with them.
I would start out with asking if they have been pre-qualified. If they say yes you want to ask them for the letter. If they don’t have it see if they have the contact information for the lender or broker. You need this information.
They may say, “We don’t have a letter yet but we know we can get qualified, it won’t be problem.”
My response to this would be something like this “Well folks we need to get this information before I can help you find the right house. Most Sellers will not even look at an offer without a pre-approval letter. Also, your financing and how it is structured will determine the location and the type of property we can consider. For example if you are going FHA there may be some areas we can’t look in. If you are using a USDA Rural housing loan then we won’t be able to look at pool homes. If you need down payment assistance we will probably have to steer clear of short sales and foreclosures…….”
I could go on and on but basically what I’m doing is showing my knowledge and building value. I’m telling them things they have probably not thought of before. Once I’ve explained why I need it, they will give me the information, if they have it, or I will be able to connect them with one of my trusted Mortgage Brokers. I will be entering this info on the BBA as we are talking.
Next, I need to talk with them about what they are looking for. Style, price range, location etc. This is also being entered on the BBA as we talk.
I need to know their time frame for purchasing. Whether or not it is a primary resident, second home or investment property. Do they need to sell a home before buying a home. All of this information is being entered on the BBA.
OK, once I have gone over their needs. I need to tell them how I work. Agency or non-agency relationship. When they can reach me by phone. How often I check my email etc. When I work and when I don’t work. This info is also being entered on the BBA as we talk.
Now we have to discuss how I get paid. I’m bringing up commission now, so once we have agreed, it is no longer an issue. This is probably where they will stop you. “I thought the Seller paid you.” “Well they do in most cases. However, there are properties on the market that may not be offering at least x% and that is the lowest I’m willing to work for. But I still want you to be able see these properties with me if they meet your criteria. As a Buyer you are in a position to ask the Seller to pay me more commission if what they are offering is not adequate. The majority of the time this will not be an issue but if it is I just want to make sure we understand how I get paid. OK?”
“OK, so let’s go over everything we have discussed.” This is when I flip the BBA around and go over it. Remember I have already completed it as we talked.
“What’s that? I ain’t signin’ no frickin’ ageement!!!”
“Folks, the reality is you can’t purchase a home without signing contracts. You are going to have to sign purchase contracts, loan application documents and this Buyer Broker Agreement. But, the good thing is, once you sign this agreement I will be there to help you with the others. This BBA outlines everything we just discussed to make sure we are both on the same page. It also assures that you will have my services all the way up to closing on your new home. I promise to work my ass off to help you and you are promising to work with me exclusively and promising that I will get paid for my services. You do want me to help you don’t you?”
“Good….sign here and here. Now, lets go ahead and block off a few days on our calendars so we get down to business. How about we get started this Saturday at 10?”
Folks, this post is very basic. I am also not a fan of scripts since all Buyers are different. But hopefully this post will give you some ideas. The BBA should NEVER be a stumbling block for you or your potential Buyer. Don’t dwell on it too much. The Buyers really just want to work with someone they trust and who has the knowledge and ability to help them find a new home. The BBA is your opportunity to show them you care and that you take their home buying seriously. It’s for THEIR protection.
Now, if you are serious about using a BBA but have some questions or are trying to use one but keep getting shot down PLEASE leave your concerns in the comments and I will do my best to help. And this time…….you do not have to sign an agreement. My services are free……for now. Fair enough?