The Buyer Representation Agreement
Have you ever watched the movie Jerry Maguire or even the new hit series Suits where hot shot lawyers play Russian Roulette with clients and colleagues alike? If you haven’t seen SUITS you are missing out big-time…
It’s my favorite show and I would absolutely watch the seasons again. Watch a couple of episodes and you’ll see what I mean. You can find it on NETFLIX
In Suits you’ll see the lawyers asking clients to sign an engagement letter. In Jerry Maguire you’ll see Tom Cruise asking clients to sign on with him as their agent. The one constant theme you’re going to see is that top professionals in any industry don’t waste time with clients that aren’t serious.
And signing a contract with someone in any profession is the first step to showing them you’re serious about doing business. Their time is extremely valuable and most of the time they will only represent clients who commit to them and the process from the beginning.
(In case you haven’t figured it out yet, that’s why all top lawyers will ask for a retainer to be signed before they ever lift a finger!)
So let me ask you a question?
How likely do you think it would be that either Jerry Maguire or Harvey Specter would represent anyone who didn’t fully commit to working with them? Not very likely! And although we are talking about reality TV, the real world isn’t much different.
The Harveys and Jerrys of the real world wouldn’t either.
Top Agents Will Always Get A Buyer Representation Agreement Signed! IT’S RISKY BUSINESS WITHOUT IT!!!
I’m not going to spend too much time discussing why it’s risky on the Agent’s part without one and no it involves more then just protecting the Agent’s commission.
But a big reason why is to get everything reduced to writing IN CASE SOMETHING HAPPENS!
Some home buyers are hesitant to sign one and I’m not sure the reasons why justify this.
Here are some of the reasons why they don’t:
- They don’t want to be locked into a contract
- They don’t understand what they are signing
- Past bad experience with other Agents
So lets discuss these reasons
1: This one is simple to explain. If you don’t want to be locked into a contract then don’t lock yourself into a contract. But don’t be surprised if the Agent you want tells you thanks but no thanks. And if they do that you’ve probably got a good Agent on your hands. Top Agents walk away from deals. Average Agents take anything they can get and worry about everything else later.
You can find plenty of Agents who will work for you without a signed buyer representation agreement but that would never be someone I wanted working for me. EVER! If they couldn’t sway me into signing with them as my Agent what do you think is going to happen at negotiation time?
2: Sometimes the sole reason home buyers don’t understand the buyer representation agreement is because the Agent did a terrible job explaining it. Unless you are completely familiar and understand the terms and interpretations of contracts, you should never sign anything unless you understand it completely. Don’t be afraid to ask questions. Your Agent should walk you through the agreement and explain exactly what it means and what you’re signing. A last resort can be a quick call to your lawyer.
3: They have had a bad experience in the past with another Agent or real estate brokerage and are trying to avoid that happening again. I completely understand where home buyers come from on this point and they should approach this with care. But the reality here is if you want a good Agent, not signing a buyer representation agreement will almost guarantee you will have to find another Agent willing to work without one. Again no top lawyer is going to work on your behalf without a retainer being signed and the same goes for a top Agent.
Don’t be afraid to press the Agent you’re interviewing and see how they respond. You’ll quickly be able to separate the average Agents who are just after a commission from the top Agents that are after long term clients and building a sustainable viable business.
Now let’s talk about the benefits to signing a buyer representation agreement with your Agent?
1: The first answer is simple. 100% commitment from the Agent working on your behalf. If you find the right Agent, they will be worth their weight in gold. They will turn over every stone to find you a deal that will earn you money because guess what! When it comes time to sell your home down the road they know you’re going to call them! Remember they’re only interested in building a long term business. That’s how top Agents think!
2: The second answer is because you’ll get access to your Agent’s network of professionals like real estate lawyers, mortgage brokers, home stagers, appraisers, private lenders, hard money lenders for investors, contractors, interior designers and much more… Top Agents already have deals cut with these professionals to save their clients money because again they want their clients to be stress free when buying and selling real estate, but more importantly turning a profit when it comes time to sell.
3: Here is the big one. Having a top Agent on your side will open the door to all the best deals. Especially if you want to invest in real estate long term and get to a point where the homes you buy and sell end up being responsible for paying off your mortgage. Top Agents are always on the lookout for good deals for investor clients because that is how they build a long term business. And let’s be honest. Anyone buying real estate is buying it as an investment no matter if they plan to live in it, rent it, or flip it!
So get yourself a good Agent you plan on working with for life because they will ensure your interests are always the top priority. Interview as many Agents as you have to until you find the one that gets you excited to work with!
Once you find your Agent you’ll be set and signing a Buyer Representation Agreement will be the least of your worries!