Because I work on commission as a realtor, I can invest a lot of time showing properties to a client and make nothing at all if they decide not to go ahead with a purchase. I accept that; so do my fellow realtors. It’s the nature of this business.
But what rankles is when we do all of that, only to find out that they’ve decided at the last minute to buy through another realtor. Or even worse. A colleague of mine found out this week that a buyer he’d been working with for months had gone ahead and bought a property she had originally dismissed as too expensive when he first sent her the listing–a week after she’d told him it was out of her budget.
Not only she did use a different agent, she didn’t bother to tell him. You can imagine how shocked he was, and how disappointed, to find out months later what had happened.
After hearing what happened to my colleague, I plan to start asking buyers to sign a Buyer’s Representation Agreement (BRA) before I take them to see any property. These are contractual agreements in which we agree to the time period of the search, the area we’ll be searching in, and the holdover period (see below). More importantly, it sets out the commission the client will have to pay if they buy from the seller directly without using my services, after I’ve introduced them to the property.
Once we have a BRA, no other realtor can work with my client without breaching our legislation. It’s like a cone of silence; they can’t even communicate with them without my written consent.
In other words, while it sounds a little draconian, it guarantees that the client and I are actually working together, and that I’m not being taken advantage of when it comes to my time and expertise. Which is only fair, after all: why should someone else get the benefit (i.e. commission) for groundwork I’ve done?
If a prospective client won’t sign a Buyer’s Representation Agreement, what they’re really saying is that they want to reserve the right to use another agent when the time comes to buy a property, regardless of how much time I may spend working with them. In other words, they have no commitment or loyalty to me. And I’d rather find that out now, before I waste my time, than later on.
In my business model, it’s about long term relationships and respect. A BRA reminds both parties (the client and me) of what those rules are, and lets us negotiate the parameters. We can terminate it by agreement at any time, subject to the hold-over period. That’s usually 60 days, but the actual length is negotiated and agreed to– it’s the period after the agreement expires, during which the buyer will have to pay my commission if they go ahead and buy a property that I’ve introduced them to without involving me. Again, only fair.
Before we can legally submit an offer on behalf of a buyer, we have to have a signed BRA. I think I’ll feel more comfortable if we have one from the get-go. This is my business, it’s how I earn my living, and I think it’s a good idea to have a meeting of the minds from the outset as to what those services will be so that no-one is surprised or disappointed.