Buyer's Broker Agreements and what's it all mean?
Buyer Broker Agreements seem to cause a lot of confusion lately and I'm not quite sure why. I guess it's because buyers are out there on the internet looking, looking looking for the perfect house, although today it doesn't seem to need to be perfect, just CHEAP. They come into town armed with all these listings they've printed out, all generally listed by different agents. And they go past the house. And the call the agent from the car outside the property.
The first agent they call should and probably does ask... "Are you working with another agent?". Of course, because this is the first house the answer, rightfully so, will be "No". The agent jumps in the car, meets the buyer at the house, the buyer likes it but prefers to keep looking. The agent asks.."Would you like to go back to my office and see what else is available?". The answer of course is going to be "No, we're just looking around, we have some other houses to drive past". And the agent if doesn't know how to handle the situation says, "well, call me if you'd like to get inside." No mention of a buyer's broker agreement.
So the buyer drives around, looking at the other houses, calling the listing agents who jump in the car and show them their listing. Until...the buyer finally decides, "I liked the first house" and the agent that just happens to be with them at the time shows them the house again. They do up an offer and away we go.
This of course creates a situation. The buyer hasn't intentionally set anyone up, they don't know about 'situations', all they know is they want the house. None of the agents explained to them what the situation may be. And that situation is called procuring cause.
So, what is procuring cause? Well, it's a term used to define the sales associate/broker that has earned the commission. How's it work? Well, you look at my advertising on the internet, you print out the listing, you call me either form the number on the listing or from my sign, I show you the house, we discuss the pros/cons of the property, the way to write up an offer, how to structure it, etc. and you tell me you'll get back to me. You go to the next house, the next house, you're working with a Realtor® here, a different Realtor® there and then decide, hey, that first house was great and she said this and that, sharing this information with the Realtor® you just happen do be with at the time. She says...let's write it up! So..who actually 'sold' you the house? The first agent. But the other agent is bringing in the offer so...procuring cause issues arise. It's not something that really is a buyer problem but it was caused by all the players with the buyer in the front of the line. There are some exceptions to the procuring cause claims and it's rather complicated but it's cured by having a buyer's broker agreement in place.
You see, purchasing property is a team effort, unless..you're going to write up offers yourself, negotiate yourself, deal directly with the seller yourself. You can't do that if you're hunting online looking at properties listed on the MLS. You need to know how this all works even with all the homes online for you to readily check out yourself.
Enter the buyer broker agreement. This is an agreement between the sales associate/agent/broker and the buyer. This agreement can cover a territory, a state, a city, a neighborhood, a county or just one or a couple of houses. It can be for a day, a week, a month, a year. Had the first agent gotten a buyers agreement signed by the buyer when she showed the first house, just for that house even, it would have ended the procuring cause situation for that property. Had she explained what a Realtor® does, how they get paid, how the 'system' works, the buyer would be educated, understand and know what their responsibilites are and what complications can arise.
With Palmcoasting.com Real Estate Corp, you can expect that you will be required to sign a buyers broker agreement for homes you are shown by me. I love what I do, I love to see the gleam in your eye when you close and my goal is to have the least complicated easy going deal from start to finish. But I do this for a living. I want to get paid for what I do, just as the buyers want to get paid for what they do in their profession. With an explanation of how all this works, how we get paid, why we do what we do and what we do do,what my responsiblities are to you, and you to me, there should be no objection from a buyer to sign.
I look forward to meeting with you and being on your team. I'm happy to answer any questions you may have. I'll be offering you a lot of information to make sure you know what to expect. Call me anytime at 386-793-7302 or visit my website www.palmcoasting.com.
Cyd Weeks, Broker, SFR®, ABR®
Looking for homes for sale in Palm Coast, Flagler County? Let Cyd Weeks be your guide to the listings in the MLS, Short Sales, Bank Owned properties, REO's, Rentals