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Posted by Jay Reifert on April 1, 2006, 6:00 pm
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Scott...this is just another example of Horillo's total
lack of understanding of the matter at hand. Rather
than reinvent the wheel, down below you'll find an answer
from me to another participant, which will answer your
question.
The short answer, though, is there is no exclusive buyer
agency secret. My clients know that my agreement covers
any property that they may wish to purchase. The secret
contract arises when buyers go out to look at property
with licensees who do not disclose agency options and do
not disclose the existence of Realtor® Procuring Cause.
Here's the post that answers your question, and more:
Big A wrote:
> Jay,
> Just out of curosity. What does your buyer agency agreement
> provide about compensation?
My agreement is exclusive. If the client buys any home, during
the term of our agreement, I'm due a fee.
Before anyone tries being a wiseguy, the difference between
my having the buyer under contract and the secret contract
that arises as a result of Realtor® Procuring Cause, PC, is
that my clients know they are signing a contract, and know
they are creating an exclusive obligation. With PC, the
buyer had no idea that they were creating an obligation...at
least not until it's too late for them to do anything about
it.
> Specifically, if during the term of your representing your
> buyer client he or she runs off and buys a house with
> someone other agent, or worse yet buys a house you introduced
> them to with another agent.
> Do you leave the buyer free to do that?
No. And my agreement covers for sale by owner properties, too.
You see, I will not extend services until the buyer understands
what I do, how I'm different and that I'm going to be paid if
they buy a property. Believe me, by the time I have walked them
through my program, anything they hear from anyone else is going
to demonstrate two things:
1) No one else, in this marketplace, knows how to save buyers
time, money and effort like I do. (Or has the service features
to achieve those goals that I do.)
2) No one else, again, in this marketplace, has any idea how
to present the concept of buyer agency.
> I realize the "sales pitch" answer would be to say you educate
> the buyer not to do that and service (read that watch them
> like a hawk) so well it never happens. But, let's just for
> a minute say that it does happen, would you just let them walk
> away?
My clients ARE educated up front of the dangers of PC and they
understand that if I can't get my fee through the transaction,
because they went and looked at a home with another licensee,
they will be paying me out of pocket. I have a contract. It
is an enforceable contract. The difference between me and most
people who claim to be buyer agents, is that I know the value
of my time, and don't work with people who don't respect the
value of my time.
What you describe, has never happened to me.
Below, you mention Open Houses. I do allow my clients to attend
Open Houses, unescorted, with two contractual caveats which I've
paraphrased, below:
1) Upon entering ANY Open House, they will immediately walk over
to the licensee holding the Open House, introduce themselves, and
say, "I just wanted to let you know that I'm represented by a
buyer's agent."
2) The next thing they are to do, is go over to the Guest
Register and sign in, placing after their names, "Represented
by Buyer's Agent". (Alternatively, they can put my contact
information.)
Once again, this is to keep them from being trapped by the
PC concept...cause you know the Open House licensee is
happy to trap as many unsuspecting buyers, as possible, as
a result of sitting that Open House.
See balance of my comments below your final points...
> BTW I agree with your point that the agency relationship
> should, no make that must be disclosed up front, before an
> agent enters into substantive discussion with any prospiective
> buyer. I would also agree that any agent who begins showing
> property before qualifying the buyer is wasting his/her time.
> Likewise I would say any agent who does not interview an
> propective buyer well enough to know that they have seen a
> particular porperty before is looking to have their
> pay check tied up and possibly lost in a procurring cause case.
> Asking a few pointed questions can yield not only valuable
> information about what houses then have seen, what they liked
> and disliked about them, but what houses you do not want to
> show them. When I was actively doing real estate I would always
> use that bit of disclosure time to tell the buyer, that even
> if there was one of those houses they liked, I would NOT be
> showing it to them again.....and why (PC). It was always a
> good oppurtunity to inform them if they wanted me to represent
> them they should not just walk in to open houses for the same
> reason.
Here's where I would handle it differently. I will educate
the buyer on PC and, provided they did not know the trap
exists...and provided they were never mirandized on Agency,
I will still represent them, IF they are truly angered by
the theft and are willing to formally--in writing--fire that
first agent who, ironically, they never even knew they hired.
If they'll do that, I'll run them through my entire program,
we'll go out and see all of the homes in the marketplace
that meet up with their criteria, and if the home that they
thought they wanted is still the one, then we'll pursue it.
However, it will be exempt from my Guaranteed Savings
Pledge and any other feature that might cause me to
have to come out of pocket to them, as I will not go
before a Realtor® Kangaroo Court, (PC), risk losing and
then have to give over the fee I earned, plus any
money I may have given the client. Just one more way
the buyer loses, as a result of undisclosed PC, as
every client I have--except those where PC may raise
it's ugly, secretive, head--is entitled to a ZERO closing
cost first mortgage, with NO games played to increase the
rate, in addition to the Guaranteed Savings Pledge. (A
sixteen hundred to twenty three hundred dollar value.)
Just one of the many differences between me and those
who might claim to be my competitors.
One more time on that PC link:
http://www.real-reform.org/pcnonebas.pdf
Exclusive Buyer Agents are a different breed. We do nothing
but represent home buyers for a living. Anyone who wants to
read a really good article on EBAs should do a little research.
A very well respected consumer organization, which also has
an online presence, reported favorably on the concept in
their magazine and on their website.
Some may find the following to be interesting reading, too:
http://www.usdoj.gov/atr/public/workshops/rewcom/213172.htm
Jay Reifert -- Fitchburg/Madison ****** http://www.real-reform.org
http://profiles.yahoo.com/jay_reifert ** http://www.true-agent.com
http://www.madison-real-estate.com
mailto:true-agents@12345true-agent.com <-----------Remember to
remove the numbers from
the email address before
hitting send.
>
> Steve Horrillo wrote:
>>
>> Why aren't you telling the public the exclusive agent's "dirty little
>> secret?" That during the contract period they're stuck with you. That
>> even
>> if they find a FSBO on their own they will owe you your commisssion.
>>
>> --
>> Warmest regards,
>>
>> Steve Horrillo, Realtor / C.Ht. =^..^=
>> http://BrokerAgentTraining.com http://over100percent.com
>
> Did not know that; how is the FSBO clause enforceable?
>
> Regards,
>
> Scott Miller
> National Commercial and Residential Lender/Broker
> 1.877.716.6495
> EZMortgageLoanz@aol.com
>
> www.RealEstate-IQ.com
> www.EZMortgageLoanz.com
>
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