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May 17, 2012


Are You Sure You Didn’t Sign a Buyer Representation Agreement?

by mark mclean

When the market is as hot as it has been, every buyer out there is looking for a little edge. And why not? After many failed attempts, buyers will resort to nearly anything to win that house. Buyer fatigue is a real malady.  Bully offers are just the tip of the iceberg. A few weeks ago I proposed a possibility that one buyer might eventually resort to paying off another buyer to rescind his offer. It hasn’t happened as far as I know but desperate times calls for desperate measures. And when buyers are desperate, agents can get raked over the coals. The pressure is on and their commissions are at stake.

 Here’s what I mean; More than ever, buyers are contacting listing agents directly because they believe working with them will not only give them the inside scoop but will also help them get the house for less. I suppose, in a perfect world, that might happen but it is important for buyer and agent to both recognize that it is easy to make costly mistakes. Working with the listing agent means the buyer may accept that you are working for both parties (multiple representation). Maybe not a terrible thing but you needs to be especially vigilant not to divulge a sellers motivation. Seems easy enough, but let’s say the buyer asks why they are selling. Can you answer honestly? What if the seller lost his job and you let it slip out. Would you be liable in any way?

 What if a buyer has a previous Buyer Representation Agreement (BRA) with another broker but got frustrated and bought through you directly? Did you ask the right questions? Simply asking if the buyer if he has signed a BRA before is not enough and will not hold up in arbitration. This is not the time to be shy so consider asking these questions;

  •  Have you signed a BRA before?
  • Has this form been explained to you before?
  • Have you been looking for a long time?
  • Have you seen houses with other agents?
  • Have you put any offers on any properties?
  • Who did you work with so I can call them?

 While these might seem like painful questions to ask, I can guarantee that it will be even more painful when you have to turn over your entire commission to an agent with a previous BRA in place. Explaining the BRA is the key. In the heat of a tight time line and quick decision-making, agents have been known to simply shove the agreement in front of a client to sign without taking adequate time to explain it in full detail. Again, one defense we often hear from buyers is ” oh yeah I signed a bunch of stuff because the agent told me to”. Take the time to explain the form to a buyer and let them know that they may be required to pay two commissions if they sign two BRAs.

4 Comments Post a comment
  1. Jul 3 2012

    Thanks Mark, great post. If an agent is too shy to ask their cient about a BRA I don’t quite know how they’ll hold up in real negotiations with another seasoned agent.

    • Jul 3 2012

      Thanks Chris. Sometimes agents won’t even do the simple things to protect themselves. I suppose fear of the wrong answer keeps them from asking. Thanks for checking in!

  2. ARH
    Oct 18 2012

    If a buyer signs multiple BRAs with different agents, will the earlier of the two always be accepted as valid? Will the buyer ever be responsible for two commissions?

    • Oct 19 2012

      Hi Amelia, thanks for the question. Generally speaking the first BRA has priority. Like everything else, there are always extenuating circumstances. When you meet a potential client it is important to have a conversation, no matter how uncomfortable, about any past relationships. It is not enough to ask if they have signed a BRA. You need to ask, Have you been lloking for long? Are you working with an agent? have you signed a BRA before? Did you make any offers on any properties? What was the name of the agent you where working with so I can call them? Any yes, if a client lies, they most definately would be responsible for two commissions.


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