That's why I have never asked a buyer to sign a representation agreement.  Its an unenforceable agreement.  That's why I operate as a Transaction Broker.  I earn the loyalty of buyers and sellers or I lose them.  

I have my clients sign it and they do understand what they are signing I have never had a problem. When I am the listing agent, I ask if they have ever signed a buyers agreement. This protects me and the other agent.

My company requires a Buyers Brokerage agreement signed at the time you present an offer.  I will have them sign it prior to showing homes.  I go over it with them.

I would think the Broker would enforce the agreement.

we have had them signed and had them not signed... I agree with Mark. Make a friend and gain there loyalty. If they dont like us for some reason where is it in the client interest to continue useing us. They wont tell you they dont like you, so why force trem to use you, its not in there best interest at all.

I have my buyers sign an agreement at the time we present an offer and I make it specific to the property we're interested in. The main reason for getting it signed at all is that the box I check off on the contract says that I represent the buyer. The buyer's rep agreement formalizes that relationship.

I figure that if I've done my job right, any buyer I've worked with will have me write that offer and If I haven't done my job right, I don't deserve their business.

My way may not work for everyone, but it works for me and I'm comfortable with it.

Just my 2¢

At what point after you meet the client should you ask them to sign the BRA? I have had prospects walk-away when I present them with the form the second time I meet them. They wanted the option to work with multiple buyer agent and don't want to be locked into anything.

I, too, have worked with and without the buyer rep agreement.  I did have an instance years ago where the buyer tried to go around me and the agreement and work directly with a builder.  The builder did know that the buyer was represented because the buyer told him and I also had told the rep at the house they viewed.  My broker backed me up, the builder backed down, we were paid.  The buyer should have known better as he deals with complicated government contracts all the time himself. He even admitted he was wrong but he was mad because we called him on it.

As I tell every buyer I work with, without the representation agreement I cannot represent their interests and MUST represent the best interests of the seller.  I also tell them point blank that until they sign an agreement, they should not tell me anything they wouldn't want the seller/seller's agent to know.  Another good point is to mention is that the seller has someone representing them, don't you want to be on equal footing with me representing you?  More times than not, the buyer signs the agreement.  Sometimes it is only after they decide they want to negotiate on a particular property but these are the critical points and reasons for getting a representation agreement.  Protecting your income is second to providing protection to an unknowing public.

I know that we get very close emotionally to our buyers.  I'm real bad about that...I'm very protective.  You could be opening your broker up for legal issues from a seller if you don't have a buyer rep agreement and you work to the best interest of a buyer.  Even as a sub-agent for the seller, you must not represent the buyer's interests....you must do what is best for the seller and still treat all parties honestly.  

Some companies in our area state on the MLS that compensation is offered only to buyer agents, not sub-agents because of liability issues.  I'm one of them.

I usually charge a retainer fee to my buyer clients if they are not a referral from a previous client.  This ensures their loyalty and mine.  If they are unwilling to pay a retainer fee for my services, than I am unwilling to work with them.  If a buyer is willing to give a retainer fee they are certainly ready to buy and will not be wasting my time.  Either way, I always have them sign a Buyers Agency Agreement.

Simple answer,  You are!    It is up to you and your broker to enforce it also.  I also inform my clients that they can get out of the BBA by writing a simple note stating they don't want to be represented by me.

The buyer's agent has a document saying they represent the buyer in their next purchase through a certain length of time. Why does the agent not stay on top of that by contacting the buyers on occassion when something new comes on the market or a property meets the buyers needs? It is of course, the agents responsibility. But I also know that buyers run around like free-range chickens so you need to tell them how it works and if they want to roam around on their own for awhile be sure to let the sellers agent know you are represented. A frequent call to the buyers will remind them they are represented. I have a buyer we have an agreement with that I haven't shown anything to in 2 weeks. But I am emailing her to let her know I am watching and what is new on the market or price reductions etc. It is the agents JOB.

It is the law in Georgia that you must have this signed in order to represent someone on a "client" level.  Fortunately this is printed at the top of the Exclusive Buyer Brokerage Agreement:  "State law prohibits Broker from representing Buyer as a client without first entering into a written agreement with Buyer under O.C.G.A. § 10-6A-1 et. seq."  Otherwise you are only a transaction coordinator or "referee" and you represent no one.  You have to let them know that when they sign this agreement that it is like dating and that they cannot date anyone else while under the agreement.  If they are not willing to sign it then "NEXT".

In the ABR class I recently completed, Buyer's Agency Agreements was more than encouraged.  The only reason it seems uncomfortable to get one signed is because it's probably not something you're use to doing.   If you are not comfortable in asking, it will be sensed.  And, as in most things, it's all in the presentation.

I now have any prospective buyer sign the agreement on our first meeting.  I just state that everything in real estate is done in writing.  We all know verbal agreements are only as good as the paper they're written on.  ;0)   When the seller makes an agreement to sell their house there is a listing agreement; when a buyer offers to buy a house it's a purchase and sale agreement, and that as buyer and agent there is a buyer's agreement.  Like any other paperwork, I go through the form and explain and we come to an agreement.

If you have a customer that refuses to sign, I would ask them what their concern is.  Keep it positive and respond constructively.  Try to reassure them in their concerns and emphasize your services and that you have full access to all properties they might want to look at.  Explain that this is just part of the process and required by your broker (whether it is or isn't, though it should be), and without a commitment from them that you are unable to business with them.  If still a no, then you have just saved yourself time, money, and a headache.

One of the beauties of what we do, is that we can choose who we like to work with.  And when we do, among other things, we are making an economic and time investment in support of helping them obtain their goal.  And we don't get paid until we do.

Any relationship is built on trust.   If they are not willing to make a commitment to you, they are not trustworthy of your time and money.  So, invest wisely.

Steve  

I forgot to mention that I'm in Texas....it makes a difference.  :-)

I think a buyer broker agreement takes your service with a buyer to a new level.  The name changed with the new release of forms in April it's now called (in CA) Buyer representation agreement - exclusive.  I have my buyers sign after our first meeting before our second tour of homes.  I explain buyers should be represented just like a seller.  Once the agreement is in place I have an obligation to them by contract it's just the oppsite of a listing agreement, I think the industry would be better off if everyone used one.

I'm in Florida, like Mark, and as a transaction broker, buyers rep doesn't apply.  

You Realtors(R) are all full of yourselves. I am a buyer who foolishly locked himself into a Buyer Representation Agreement. My Realtor(R) has not been able to find any properties to my liking on the MLS. I went on Craigslist and found a property listed FSBO that fits my criteria and the price is right. The only problem is, they (rightly) don't want to pay my Realtor(R)! According to the agreement, I am responsible to pay the commission, which amounts to about $7,000 and is CASH ON TOP OF CLOSING COSTS. My Realtor(R) has done nothing to find or show this property and has earned $0 of his commission. This will be the last time I ever sign a BRA and I will certainly warn my friends about the dangers of buyer agency.

John, why don't you have your agent go look at the property with you, maybe he/she can make some suggestions for an offer and negotiate some terms for you that you may not be aware you can do. People that sign these agreements are free to wander and look for themselves as you chose to do but believe me, it is not over until you are at the closing table with signed Huds. I would be calling your agent and let them finish this job for you since you will be paying him/her anyway. Finding the property isn't always the tough part.

Hi John,

Thanks much for sharing your thoughts and frustrations.  I'm sure we've all had similar feelings regarding some type of service or another at some time in our lives.

I'm also aware that most folks haven't a clue what their agent is doing on their behalf 'behind the scenes' so to speak... we should do a better job of keeping our clients informed, I suppose.

Last year I had a sore throat and a few other symptoms.  I was pretty sure it was strepp so I went to the doctor to get a prescription.  I diagnosed myself and suggested that amoxycillin works well for me in treating this illness.  He concurred with my opinion and quickly wrote out a subscription for the amoxycillin.

I walked out to the reception desk and was presented a bill... even though I diagnosed the problem myself, determined the best course of treatment and took up only about 5 minutes of his time, the doctor still charged me the full amount.

What was I charged for?  

Now, if your agent really did nothing for you... he provided no knowledge of the market, no insight and knowledge regarding mortgage options and how they affect your long term financial goals, did nothing to help negotiate a contract acceptable to you, spent no TIME looking for properties and showing properties, etc, etc... then you may have an argument.  However, we often spend multiple hours doing research for our clients and I can't begin to tell you how many hours we spend educating ourselves so that we can serve our clients better.

Bottom line is that we do not get paid for 'finding and showing houses'... there is far more involved than you would imagine and without a buyer's agreement there is no guarantee of compensation for all that time invested.  Ours is a profession... not a free public service.

John,

You may have a valid beef with your Agent.  I would ask for some clarification, though.

Did this FSBO meet your requirements as stated to your Agent?  For example, I had a similar situation.  A client gave me all her requirements, one of which was, under no circumstance did she want a raised ranch.  We discussed the pros and cons of excluding this type of home from the search because I believed that it would actually meet her needs perfectly.  She insisted so I eliminated them.  Through a friend of a friend of a friend, she toured a FSBO that was on my original list.  One that she specified she did NOT want to see.  She fell in love with it, called to tell me and I represented her in negotiations, ensuring that she didn't over pay, home inspection (further negotiations), contracts, glitches in the mortgage, etc.  Because the Seller was not represented by an Agent, I also had to perform several functions for them to keep them out of legal hot water and navigate the transaction to a smooth closing.

If the home you are purchasing was one that your Agent should have found, based on what you told him/her, then you may have a point.  However, as I pointed out, we don't just earn our money by being a tour guide of homes for sale.  Finding the house is generally the easy part, getting it to closing is full of danger if you want to go it alone.

Much success in your closing.

John, utilize your agent!  He's on YOUR side.  Even though you found the property; your agent has already done a lot of work behind the scenes and is ready, willing and able to assist you through the hard part.....getting it to close.  

John Buyer, I am surprised that the seller FSBO didn't cooperate with realtors, most do.  Are you sure they are not telling you this because they think they can now get away with not paying?  What else will they try to get away with.

Good luck on your transaction!

John Buyer,  Where are you?  Are you a "hit and run"?  Are you a legit Buyer or just a "drive by" wasting your Agent's time?

I wanted to respond to some of the comments that have been posted so far in response to my situation so that I could give some more detail. This will be my last post and I leave it to you all to come up with some constructive ways to address this situation should it arise with a future client.

I am indeed a serious buyer, having sold my own house FSBO working with a buyer represented by an agent and the deal will close in 30 days. I offered the buyer broker 3% and listed for about $500 through a "discount" broker on the MLS - simply because I wanted to be taken seriously and get full attention from buyer brokers. Money talks, after all, and I believe that a 3% co-broke will get more buyers than a 2.5% or lower. On the market a week, then under contract within 1% of asking price. I feel pretty confident having handled my own sale so far that I could handle my own purchase as far as the "back end" work goes (inspections, lawyers, agreements, conditions, financing, etc.). I don't require handholding and I don't require a tour guide. I pay my attorney a flat fee and he provides the experience I need to avoid problems. I take advice freely but rely heavily and so far successfully on information from the internet.

My only reason for working with a buyer broker as I search for a new home is because I thought I could get his services (specifically "hidden" MLS information like addresses and days on market, easy access to houses, and copyrighted offer forms) without any cost to me. My agent would be compensated by sharing the seller's agent's commission. This is exactly how it is marketed by buyer brokers - "it won't cost you anything". This was my mistake. If the seller is paying the bill, buyer's don't care how much their agent wants. However, in a situation where FSBOs want to deal direct, price becomes an issue. I only want the services I specifically listed above, and I value those services at about $1000 tops, not the 3% in the BRA which would work out to about $7000.

Someone will probably suggest that I offer 3% more than asking price and stipulate in the offer that 3% goes to my agent. This isn't really a solution because I still have to pay for it - it's just that the majority of his fees will be rolled into my mortgage which I'll pay off over the next 30 years. This does not change the fact that I don't value his services at the price he (or any other real estate agent because 95% of agents want 2.5-3%) wants.

Bottom line: if a seller wants to offer 6% to his agent and his agent is willing to split it with a buyer broker, I'm happy to play along because that's the only way to get the house, no way around it. If I'm setting the commissions, then it's a different story.

John, your agent should have let you know that if you went through a fsbo it would be different if the seller didn't want to pay. Sorry, you have been left with a bad experience. Please don't judge us all by one mistake. And we do make mistakes as it is human nature. Good luck to you.

Mr. Buyer...

I may not understand your situation completely, but it sounds like you have been working with this agent for quite a while.  Though you did not find the home you wanted through the agent's research, I am curious how many houses you did look at with your agent?  Also am curious as to whether you approached the FSBO first, or did you allow the agent to make original contact the fisbo seller?

Also, was the FSBO market priced or was the asking price lower because no commissions were built in?  If it wasn't lower, then all the FSBO seller was doing was charging you for No realtor services and pocketing the money themself.  Do you find that acceptable?  

While not eliminating any responsibility of your agent as their performance is not clear, it seems that you also have accountability in this.

When you sold your home using a discount brokerage, i.e.  limited service company, the services being provided by that company were clear from the beginning.  Marketing, research, showing your home, handling the offer, etc were all things you were willing to take on yourself.  And it seems that you were very capable of doing so.

Was your ability and willingness to handle many of these similar services in your search as a buyer communicated up front to your agent?  

If so, the structure of your buyer's agreement could have reflected that.  With that being said, you did agree willingly to the agreement as it was presented.  With that agreement, the agent also agreed and was apparently providing full service to you.  That you chose to also contribute to the project should not diminish the efforts of your agent.

If your agent was not performing to your expectation, that would have been an issue to communicate and deal with within your ongoing relationship with that agent.  

It wasn't stated, so assumption is that your agent was working diligently for you and to your satisfaction.

To look back at what transpired seems to be looking for a way out of accepting responsibility ...after the fact.  It also seems to be a lack of recognition and appreciation of what your agent did do for you prior to you finding this FSBO.

Don't get me wrong, I am not trying to lobby here for the necessity of a real estate agent.  I am only stating that you choose to utilize the services of one and agreed to compensate the agent for their time and service to you.  

The fact, as things worked out, that you later found a home of your liking that may have been found without an agent is total hindsight.  And though FSBO, was your agent given the opportunity to do what you contracted them to do?   In looking at the final result, you are eliminating many things along the way that got you there.

In your profession, (assuming you are not self-employed) how would you feel if your boss said that since someone else ended up completing a project you would not be paid for the past couple weeks that you spent working on it?  Or that based on the end result, he was going to cut your pay to what he felt you were worth regardless of what you contributed along the way or any agreement that might be in place.

Self-employed or not, you likely know the most valuable commodity offered is ones time.  Yes, there is skill and knowledge and maybe a product, but in a service industry such as ours,  ... nothing is provided without a committment of our main resource.... time.  We invest our time in our clients, and only get paid when our investment bears fruit.

You apparently are a type A personality and prefer to be in contol of situations.  That's all fine and it does seem that you are very capable in your knowledge and grasp of the real estate process.

However, for you to determine what the value of the agent was ("$1000 tops"), is really a control issue.  Even disrespectful and demeaning to the agent.

Had your agent found the home for you through the MLS you would not have had a problem with the compensation, as you stated.  Had the FSBO seller already built a buyer's agent commission into the asking price, it appears that you would have been okay with that as well.  But now that you believe the real estate fee is coming straight out of your pocket, then there is an issue.

Directly or indirectly, you are obviously intelligent enough to know that it's always coming out of your pocket.  Even if added on top of the FSBO asking price as you mentioned, the fact is ... the end result is the same.  In each situation, the real estate fees are incorporated in the final selling price.  No different than your pay and your benefits, among other things, being added into the price of the product or service your company provides.  It's not a mistake.  It is not wrong.  It is Econ 101.

This part is all about expecation.

You accepted the commission structure because you Expected it to be incorporated into the selling price.  You don't like it though!  But because you were not in contol and 'saw no way around it', you would 'play the game'.

But now you see an opportunity to regain control and fight back against something to which you "don't value".  Now You're setting the commission.  

The thing is, you DID set the commission when you agreed to the Buyer's Agreement.  Key word... "agreed".  That was a negotiation situation in which you had a part.

The fact that you don't value the services of a real estate agent, doesn't mean there is no value.

For your "only reason" to utilize a buyer broker to be because there would be 'no cost to you' is a clear statement of your hidden intent all along.    

There are good and bad in every walk of life, including good and bad real estate agents.  And good and bad clients.

I consider myself a very good agent and I highly value the experience, skill set, and services I bring to the table.  That doesn't mean that I always charge the full commission.  It is real estate after all, where everything is negotiable.  And where everything is in writing.

Bottom Line: In writing, you made a commitment to utilize a real person's time and service and agreed to pay for it.  There was a beginning and a middle to this 'story'.  The story doesn't change, just because you now want a different ending.

I know none of this will probably change your perception of a real estate agent's value.

However, with my current and future clients, your story is constructive as it will remind me to always keep doing what I should be doing.  A large part of that is to make sure there is solid two-way communication.  Oh, and always working with someone who respects the value I bring and choosing wisely those that I would want to work with and invest in.  

Very well said Steve!

Steve,

All I can add to your comment is 'WOW!

Very thorough and succinct explanation.

Thank you!

Tim

Regarding the Buyer Agency Agreements:

Did it ever occur to you, agents, that in most of the cases you are actually the most significant if not the only source of the stress? Why? Because unlike everything and everyone else involved, you actually create an AVOIDABLE, and completely UNNECESSARY, additional stress. Just reading through some, no, make that all of these arrogant and downright obnoxious postings I wonder how you get anyone to work with you at all, never mind exclusively? You talk about the wealth of experience and skills that you bring to the table, blah, blah... no wonder you don't go into details about what exactly these entail, because you have NO MORE knowledge about the houses you're selling and showing to your clients. What you do bring to the table is your self-centered rhetoric. And yet this entire ordeal is not about you, it so doesn't require your services, and would go on, indeed more efficiently, if it did not involve you at all. Your work in this complex world of ours is so very meaningless...