Buyer brokerage agreements are nothing to fear.

BC may make it mandatory that buyer’s agents and Homeseekers sign a contract; that’s not a bad thing.

Date24.07.2024
Words byErin Best
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BEST ON REAL ESTATE
Earlier this year, BCREA sent out a survey about the implementation of mandatory buyer brokerage agreements. While it’s not mandatory yet in BC, I can only presume it’s only a matter of time before it is.

If you recall, BCREA stated in an email “...the Buyer’s Agency Exclusive Contract, formalize[s] an agency relationship between a real estate trading services licensee, brokerage, and a buyer client, as well as outlining the obligations of each party. This is different from a Buyer Agency Acknowledgement form, which does not constitute a binding contract between the licensee, brokerage, and client.”

Now, I’ve been licensed for over a decade. And for over five years I helped buyers buy real estate in the Greater Edmonton area. I first got licensed in March of 2014 and by July of the same year, buyer brokerage agreements were made mandatory for all licensees in Alberta. For provinces yet to adapt these practices, I hear so much hesitation, fear and kick back from agents.

After a decade, here’s what I’ve learned about using buyer brokerage agreements and why you shouldn’t be afraid to execute them.

1. It helps handle objections better from the start.

You can understand buyers’ worries and talk about them right away. Let them know you understand their hesitations. Being able to handle objections early on in the process actually helps you build credibility with clients. Be patient and answer any questions they have. Giving them extra information, like brochures or links to helpful articles, can also be useful.

2. They’re not really different from the seller representation agreements.

Seller representation agreements are used all the time. Are buyer agreements really that different? After ten years of being licensed, I’ll tell you right now they aren’t. After all, without a buyer, a seller can’t sell. Both forms go over similar information: services offered, duration of the agreement, method of calculating remuneration and how it’s going to be paid.

You need to be able to understand it yourself before you explain it to someone else and this form needs to be explained in plain language. Avoid the realtor jargon and explain it to your clients like they’re in the second grade. Competency brings confidence. The more you do it, the better you get at it.

3. It demonstrates professionalism.

In my opinion? A buyer agreement is an extension of the “DORT” (Disclosure of Representation Trading Services) and it gives you a prime opportunity to explain what it actually means to be working with a buyer’s agent.

By being able to explain the document in plain language and the benefits this acknowledgment brings to all parties involved, it shows that you fully understand the process. Plus, it means you can explain the documents your clients will be exposed to in the buying journey.

Erin BestErin Best

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If you don’t want to be held accountable for the things you say you’re going to do, then I guess I can understand why you wouldn’t want to use a buyer agreement.

Erin Best
Director of Real Estate & Industry Engagement. 

4. They add transparency to the services being provided.

Transparency and education are key elements in a buying process and in the real estate industry in general. You’ll be able to outline all the things your buyer can expect from you in this process. Emphasize how it protects their interests and enhances their buying experience.

Transparency builds trust and reduces resistance. I mean, if you don’t want to be held accountable for the things you say you’re going to do, then I guess I can understand why you wouldn’t want to use a buyer agreement.

5. You learn your value as a buyer’s agent.

When you prepare for a listing presentation, you come fully prepped with a CMA and a marketing strategy – a fully baked listing presentation to secure that business. By giving your buyer services the same attention and detail as your seller services, it allows you to build out a service offering that you can clearly explain to clients.

You become more confident in advocating for your service fees, even if your fee continues to be baked into the purchase price. By doing so, you’re able to enhance your buyer client value in a way that’s clearly understood by your clients.

6. You learn how to part ways amicably.

One of the most common reasons I hear why agents don’t use buyer agreements is because their buyer doesn’t want to feel trapped. That’s my favorite part of the agreement. I broach it by saying, “Here's the part where I teach you how to fire me if you’re not happy with my services. All I ask is that if you are unhappy that you give me the opportunity to change it so you’re satisfied.” And then you go over the ways this agreement can end.

Nobody wants to work with someone they aren’t getting along with, so why are we so scared of letting them go? In my experience, when you terminate a relationship that isn’t serving you, it opens up the opportunity to work with people who you are aligned with.

I don’t see buyer agreements as something to be scared of. I see them as a tool to enhance clients’ understanding of services offered and value being conveyed. The faster you develop a buyer package and understand how to explain the agreement, the better off you’ll be in the long run for your business. You’ll get ahead before any mandatory changes are implemented by governing bodies. By having all parties acknowledge and sign off on an agreement like this, it paves the way for a smoother relationship moving forward.

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