A Buyer-Broker Agreement proteects both the Buyer and Realtors. In New Mexico where there isn't an agreement until it is in writing, I find it hard to think that Realtors would do business with a buyer without a BBA. Kymberly Wright brought this issue to the forefront to shed light on what's going on in today's market.
I received a lead through my web page recently, and have been working with a couple to take them out to see houses in Village Park. Our initial contact was fairly simple and I was able to have them call to get pre approved and ready to go shopping. I asked if we could meet before we went out this weekend so that I could have them sign some paperwork. I explained I needed an agency disclosure signed and that I was requesting they sign a buyer representation agreement (BRE), prior to showing them the house. I sent them a copy of the forms and we were set to meet the next morning, this morning.
Since we had never met, I met them at a coffee house around the corner from our first home that we were viewing. We discussed the disclosure and then proceeded to the BRE. They were both hesitant and were not sure if this was good to sign. I explained to the couple that I like to look at the BRE as an employment contract. Imagine, if you will, that I am a consultant coming to work for your company, to work with you on a project, where you need a professional with extensive knowledge in the area to assist. Would I, the employee, show up without a contract in place? No knowledge of the length of employment or if I would be paid for my efforts? Or would you, the employer, want me to come and work with you with no contract in place? You would want a guarantee that my efforts would be to have your project suceed within budget and know the scope of my duty to you. The BRE does exactly that for both the agent and the buyer. Also because the BRE is an employment contract, it is negotiable. I wanted them comfortable with the terms of the contract, their obligations as the employer and my responsibilities as their employee. I further told them that if they are unhappy with my efforts or if I fail to fulfill the scope of my duties, they can, in essence, terminate my employment. In return, I am guaranteed that they will work with me, as long as I fulfill my duties, and am guaranteed compensation for the work I am contractually obligated to fulfill (closing escrow on a home of their choosing)
I suggested that the guarantee be 1%, and considering most escrows pay 2.5% - 3%, this would clearly cover the guarantee. The fee, in this case, would be paid by the seller's broker. Only in the event they were to enter into an escrow during the agreement period, and close escrow, would the buyers be in a position to pay a fee to me. However, I suggested that if we write the time frame for 60 or 90 days, the shorter term would allow both us to see if we work well together. I do not want to earn a fee for not working, and if a client is unhappy with my services, I would release them from the contract. If the time frame extended out and they were still happy, we could sign another BRE for an additional length of time. The shorter window and smaller guarantee made them comfortable and we ended up with a 90 day contract.
I know some Realtors are strongly against the BRE and some would never step foot into a home without one. Every Realtor is different. However, most Realtors, when working with clients that they have no personal referral, will require a BRE. Most clients, looking for an agent to represent them in finding the best home at the lowest possible price, should also consider the BRE. This contract protects both the buyer in getting the best representation, just as the seller receives in their exclusive agreement with the listing agent, and the agent is given the knowledge that their time and effort can be focused on advising and finding the best possible home for the client and that effort will not be wasted. The BRE is a win, win for buyer and agent!
Areas Served: Albuquerque Metro/ Algodones/ Bernalillo/ Cedar Crest/ Corrales/ Edgewood/ Los Lunas/ Los Ranchos de Albuquerque/ Placitas/ Rio Rancho/ Sandia Park/ Tijeras