I have been blessed by being able to travel all over the world. I am truly a person who loves diversity. I appreciate the differences in culture, language, food, religion, arts, and so forth. In Real Estate, a great benefit to hosting open houses is the chance to talk with as many people who are willing, in return, to talk to me. To this point, I have noticed a significant increase in the number of people originating from elsewhere around the world, who now live in this country. I often ask them, “so what impresses you most about this country”. Without fail the two most common themes are (1) freedom and, (2) the overwhelming burden of legal documents. Sounds somewhat contradictory, doesn’t it, yet to which I respond… “welcome to the United States of Litigation”.
So… what is a buyer-broker agreement, and why is it becoming more popular. Obviously, assisting people to buy and sell houses is my business, and I am delighted to help people to achieve their goals and bring happiness to their lives. Having said that though, then abiding by my standards of service, I do request that my clients review and sign a buyer-broker agreement. There we have it again … the freedom to choose a Real Estate agent, but one who requires a signed document.
The minute that people hear the words contract or agreement, they tend to get nervous and concerned. I watch them push away from the conference table as if they just smelled something really nasty. They generally look at each other, look at the ceiling, pretend they don’t see the agreement, check their watches or cell phones, and then after the “pregnant pause”, will ask why they have to sign a document, when after-all, they only want me, to take my valuable time, to show them some properties.
Let me briefly explain. The buyer-broker agreement simply creates under California law, an agency relationship. This means that you have selected me, the agent (employee), to represent you, the principal (employer), during the search phase to find a house, and thereafter to present offers and to negotiate the terms and conditions of the purchase contract, and then, all-the-while to protect your interests throughout the transaction until escrow is closed. So, you see, as with so many other laws in our country, this as well, is meant to provide protection to the consumer. By civil law, I have certain responsibilities which obligate me to discharge my duties according to the principles of care, obedience, accountability, loyalty, and disclosure.
Without such an agreement, you are at risk of not having your interests properly represented. Here is what often happens. Buyers in this do-it-yourself world, conduct their own market analysis and then present an offer to the listing agent thinking they will avoid paying commission. What is important to understand, is that the listing agent, by a similar agency relationship created via the listing contract, is an agent for the seller, and therefore is obligated to protect the seller’s interests – not the buyer. Does that make sense? If this happens, then you are purchasing a very, very expensive asset without the guidance and representation from a qualified Real Estate agent. Also realize that, by going directly to the listing agent, the buyer has fulfilled the dreams of that listing agent, since the listing agent will likely be able to “double-end” the deal, meaning they double their commission split. Now, in exchange for signing a buyer-broker agreement, the buyer’s agent is due to receive a commission for their endeavors, provided they bring a willing and able buyer to the transaction. All too often without such an agreement, agents spend time and money to search, schedule appointments, and show property, only to learn at a later time that the client, on their own, saw an open house, and in a state of uncontrolled emotion, made an offer directly to the listing agent. Sad as it is, without an agreement, the agent then representing the buyer does not receive a commission. And by-the-way, in most cases all commissions are paid from the seller, and not the buyer.
The truth be told, if either you or the agent are dissatisfied with the business relationship, you will likely be able to mutually terminate the agreement. Be aware however, that, if and when you choose to associate with another Real Estate agent, whether it be with or without a buyer-broker agreement, you should definitely mention that a prior buyer-broker agreement was in force. Should you purchase a home that was shown to you by the previous agent under a buyer-broker agreement, you may have liability for the payment of commissions to that agent.
In addition to what has already been said above, the buyer-broker agreement allows the agent to seek out homes for you, by using non-traditional methods. Most agents will simply “plug-in” search parameters to a MLS (Multiple Listing Service), and view the results. This often works adequately. However, some home buyers, and especially in the current market, are looking for homes that are turn-key and move-in condition, and at a price that is below market value. An aggressive agent will seek out houses through networking, phone prospecting or door knocking in an attempt to determine if a home owner would be willing to consider a sale. An aggressive agent using these non-traditional approaches can legally do so, because they have an agreement from the buyer to provide representation.
So, consider that the next time a Real Estate agent asks you to sign a buyer-broker agreement, you should do so with enthusiasm, because this most likely means that you have found a competent, hard-working, professional agent willing to provide you with a level of service several clicks above all the rest. As a caution, and this stands true for anything you sign, be sure to read, and ask questions about the agreement before signing.
Almost certainly, a car dealership, electrician, plumber, lawyer, dentist or physician asks us to sign an agreement before they proceed with their services – and we simply do so automatically without question.
Our goal is to help and guide people to buy and sell San Diego Homes: Contact us soon - and let us apply for the job of being your Real Estate agent.
Charles M. Schevker (CPA)
DRE # 01875556
Broker Associate
Prudential California Realty
1299 Prospect St.
La Jolla, CA. 92037
Google Keyword = Homes in La Jolla CA
Charles M. Schevker (CPA)
DRE # 01875556
Broker Associate
Prudential California Realty
1299 Prospect St.
La Jolla, CA. 92037
Google Keyword = Homes in La Jolla CA
Main Office: (858) 357-9814
Satellite Office: (858) 459-0501 ext. 319
Home Office # 1: (858) 750-2578
Home Office # 1: (858) 750-2578
Home Office # 2: (858) 412-6082
Mobile: (858) 449-8250
http://realestate.yahoo.com/California/San_Diego
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