Recently I have read lots of discussions on the benefits of using a “Buyer’s Broker Agreement”(BBA). While I think we all agree they are a good thing to use, some Realtors seem to be having problems getting them signed and are not quite sure when to do this. As most of you know, I do not make it a practice of working with Buyers. However, since I am an expert salesperson, I am going to attempt to make using this agreement easier for you.
First, let’s all get a clear understanding of what it is we do as Realtors. What are we selling? The answer is, we are selling ourselves and our services. We do not sell houses. Houses sell themselves. If you listen to what your Buyers are saying, they will tell you exactly what they are looking for in a home, then the rest is easy, show them what they are looking for and they will find one that they like and buy it. Simple. May take time. But it’s not complicated.
Secondly, you need to understand, that a Realtor without a contract (listing, purchase or BBA) is unemployed. The contract is everything. The contract is your future paycheck. Working without one, is a gamble I am not willing to take. So in my opinion, getting a BBA signed by the Buyers, is essential, if the Buyers want to work with me. But how do you get this signed without scaring the Buyers away? When do you get it signed?
Well to answer the first question. Timing and presentation. And to answer the second question. Very early in the relationship. The key word is relationship. You must build trust quickly. Presenting Buyers with a BBA before you have built trust will result in failure every time. Think of it this way, you are “listing” the Buyers. Would you walk into a listing presentation with a potential Seller and whip out a listing agreement? Of course not. First you build trust and then you sell your services. Same with Buyers.
There is nothing wrong with showing Buyers a house or two while you are building a relationship. In fact I recommend it. Give them a hour or so of your time. But after that, you need to get down to business and get your BBA signed. Take them back to your office or take them to a neutral place and have a cup of coffee. Where ever you go, the first thing you want to do is sit down and pull out the agreement. Get it out in the open and on the table.
Now you can start asking questions about the Buyers' needs, wants, timeframe and qualifications. Write the answers on the BBA. The BBA is your employment agreement, it is used to outline the type of property the Buyers are looking for, their price range, their down payment, their expectations etc. Explain to the Buyers that you will be working with them to help them find the perfect house and you need this information to be able to help them better. Buyers like this. You are already showing them you are serious about what you do. Let them know you are able to show them any house that meets their parameters. Sell your services. You are an excellent negotiator, you have access to all properties through the MLS, you will coordinate all inspections, you will write an air tight purchase agreement, you will solve any problems that may come up, you will coordinate with their mortgage company. We do a lot of things, make sure they are aware of what you offer. You are creating value. This is also the time to let them know what they can expect of you and what you expect of them. Remember this is when you are selling yourself and your services. You goal is to build value and trust. Stay focused on it.
Now you are ready to go for the close. The Buyers should be dazzled by now and more than ready to work with you. Then you say, so let’s sign this agreement and I will be ready to go to work. This is a BBA, this agreement is between you and I and outlines what we just discussed and what I will do to help you achieve your goals. This is also how I get paid.
Mr. and Mrs. Buyer, when we find a house that you like, 9 times out of 10 the home will be listed by another Realtor. That Realtor is offering me a commission to bring a buyer for his property. It could be x%, y% or z%. As your Realtor, I work for x%, that is what I charge for my services. If the house we find is not offering at least x%, then with this agreement, we can ask the Seller to provide an additional amount of money, to apply to my commission, to bring it up to x%. If they are not willing to do this, then I will have to get the difference from you or we can put it in the deal. The advantage to you Mr. and Mrs. Buyer is that I will be free to show you every property that meets your needs, regardless of what the commission offered is. Including FSBOs, new construction or whatever. We are taking my commission out of the equation. After all, this is all about finding you the right house, not me worrying about whether or not I will get paid for my services. My fee is already set. Believe me I will work my …..off to find you the right house. My wife is expensive and I need to bring home the bacon.
I can assure you that by signing this you will have my full attention and all of my many years of experience at your disposal. So, sign here and here and lets get started. When you finish, let’s coordinate our calendars so I can block in the time you need.
Now if you have sold your services well enough and built trust, they should be more than willing to sign the agreement and move forward.
If the Buyers are not willing to commit, then thank them, tell them you understand their position and refer them to another Realtor for a fee. Leave them on good terms. Let them know you will be there if they have questions or if things don’t work out and they change their mind. Be strong. Be confident. You can’t help every one. The more you do this the better you will become at it. Just think how much more secure and professional you will be by having all of your Buyers on a BBA.
So folks, give it a try. Make the decision today! Taxi! Taxi! Sorry, not me, I’m a professional Realtor.