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Bryan Spann

Clients and New Homes

By: Bryan Spann
Thursday, September 06, 2007 10:25 AM

I use lead a generating program for some if my internet leads. I have a client interested in a new home. Before we started out on our search, I presented to client with the Buyers' Rep. agreement. Which they looked over but never signed. I took the client out, showed about 8 homes. They were interested in purchasing the last home I showed. Nice home and a great deal. I took introduced the client to the builder notifying to the builder that the client will come back to write the contract. In my haste, I never received a copy of the registration card. My client is using a lender who wants to use their own title company. Most new home builders use their own title company. What are some of my mistakes and how can I overcome them?

  • Get Representation Agreement in advance
  • Get all copies of registration
  • Ask more question about your clients before you show properties
  • Contact mortgage broker in advance to discuss a purchase strategy
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Comments

Michael Klijanowicz
Member Since '07

Michael Klijanowicz said:

Each state has different laws about agency and who represents who and when that needs to be disclosed.  In my state for instance we have whats called "presumed buyer agency" and if your prospects don't sign the exclusive right to represent agreement, they still understand that you will be showing them properties as a "presumed buyer agent!"  

I too have been burned before by taking people out and have not pressured them into signing the exclusive right to represent agreement only to find out later that another agent actually wrote the contract on the same property that I showed them.  However, I was the procuring cause for the sale because I was the one who made it happen by initially showing the buyer the property, so therefore in my state I am entitled to a commission.  What I have to do in my state is file for an arbitration hearing with my local realtor board that I am affiliated with and take the other broker/agent into that hearing to dispute the commission and then the panel makes a decision on who the commission should have went to.

However, your situation seems to be different because it is new construction and you are dealing strictly with a builder.  Was the builder offering to pay a co-op agents commission?  If not, you probably have absolutely no recourse, but I'm not an attorney and don't know for sure.  If so, I would consult with your broker/manager and ask for their professional advice as to what to do in your state.

Hope this helps...

September 6, 2007 11:21 AM
Shelly  Constantz
Member Since '07

Shelly Constantz said:

Bryan, are you just asking about the title company being used?  In my state, builders will offer incentives to use their lender and title company... but no one can "make" your client use anyone they don't want to. Now, everyone will try to hijack your client to use their title company: the lender, the builder, your broker... everyone wants a peice of that pie.  Ultimately, you need to let your client know that they have choices.  However, their choice can have consequences and they need to be factored in as well.

Shelly

September 6, 2007 11:26 AM
Brian Kennedy
Member Since '07

Brian Kennedy said:

B -

You still have control of this situation. It is your responsibility to advise your client that they are not obligated to use any of the preferred vendors including the title company. The great things about this business is the regulation. The client is in control and will look to you very often for guidance. The sellers or developers may offer incentives to use their preferred vendors but that does not make it mandatory. The client may not be able to take advantage of some of the incentives beign offered if they stray fromt he "approved" list, but at least the client should have the opportunity to have all the facts before making the decision.

As for all the documentation, most clients don't want to sign. You mayh have to spend extra time explaing the agreement with them but eventually they sign.

September 6, 2007 11:41 AM

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Bryan Spann
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