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Buyer Broker Agreements and the Final Straw … Maybe

You are told from the beginning of your training as a real estate professional (assuming you go to a brokerage with training) that you need to utilize a Buyer Broker Agreement with all of your buyer clients. This agreement not only specifies your compensation (generally the same as what’s offered in the MLS but not always) but also that the buyer in question will be working with you exclusively.

I’ve used the agreements sparingly over my first three-plus years. In fact, I probably can count on one hand the number of times I have used it. Most of the time, especially early on, it was a fear of losing the buyer that kept me from doing it. There’s also the thought that a handshake’s still supposed to mean something in this world … that was the speech I used for one client recently who did sign one.

Today was the perfect example of why such agreements are necessary.

Last week I had a buyer referred to me. They were planning on driving areas on their own yesterday and scheduled an appointment with me for this morning.

Except they weren’t driving areas on their own. They were meeting with another agent who also had responded to their initial e-mail inquiry. After meeting with this agent they decided to use his services; even if they’d met with both of us, he would have earned the business because he responded before I received the referring e-mail.

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(Can anyone say procuring cause? But that’s another story for another day.)

What’s funny is I had been sitting at my desk debating whether to pull out the Buyer Broker agreement when I saw the e-mail canceling the appointment. When someone schedules a dozen showings in multiple areas I usually bring out the form – I’m not a taxi driver, after all, I’m a professional real estate agent.

Use of this form once helped me fight off an after-the-fact referral fee from a relocation company. The client had found me online, contacted me, they signed the agreement, I showed them houses and a month later the relo company wanted a referral. Too bad.

Today’s story has a happy ending in that as soon as I told my daughter my appointment had canceled and I’d be home she jumped into my arms for a huge hug.

But it also has led me to the conclusion that I should not work with any buyer unwilling to sign off on a Buyer Broker agreement. If they can’t or won’t commit to working with me, I have clients who will value my knowledge and expertise enough to do so.

As for overcoming objections, that’s what blog posts are for.

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Written By

Jonathan Dalton is a Realtor with RE/MAX Desert Showcase in Peoria, Arizona and is the author of the All Phoenix Real Estate blog as well as a half-dozen neighborhood sites. His partner, Tobey, is a somewhat rotund beagle who sleeps 21 hours a day.



  1. Jeff Brown

    December 2, 2007 at 1:21 pm

    Been using them forever. With the hug, you came out way ahead anyway.

    Go ASU!

  2. monika

    December 2, 2007 at 5:08 pm

    I use them all the time as well. No handshake for me.
    I’m glad you made your daughter happy…that must have been sweet!

  3. Athol Kay

    December 2, 2007 at 6:37 pm

    Connecticut is a somewhat strict buyer broker state. I can’t show another brokers listings without a signed buyer broker agreement.

    So we get that weird thing where buyers don’t want to sign up with anyone and mess around trying to pump information from everyone.

    “What would they take for this house?” (how the fluffy bunnies would I know what some other brokers seller would take???)

    “What is it like inside?” (well I can rattle off what I can see on the MLS at least)

    “I need a CMA on Enfield” (er… Enfield is a whole town, and about 50 miles north of my office to boot)

    “I just want to see the house.” (well before I sign a buyer broker with you, I need a mortgage pre-approval, otherwise I could be wasting my time driving you around like a chump)


    “Why are you asking all these questions.” (because every time I don’t, I don’t end up getting paid. After a while, that chafes.)

  4. Jeff Brown

    December 2, 2007 at 6:44 pm

    Perfect Athol. It reminds me of one of the sayings Grandma passed on. It says what you just did.

    About the time the farmer got the old mare to work without eating — she died. 🙂

  5. Patrick Hake

    December 2, 2007 at 11:49 pm

    I have used buyer broker agreements since entering the business 5 years ago.

    I find it is easier for me to ask for them, because I always have.

    Many of the more seasoned agents I work with really struggle with the concept of buyer brokers and work without them.

    I will typically show a home or even a couple homes as an introductory appointment. If buyers then want to set another appointment, I request that we formalize our relationship.

    At the very least, every agent should be able to get a 90 day buyer broker when writing an offer and giving agency disclosures.

  6. Teresa Boardman

    December 3, 2007 at 12:58 pm

    The only service I will provide with out a signed buyer broker agreement is an initial consultation. I won’t show anyone houses unless they can show me a pre-approval letter as well. When I have someone sign the buyers agreement I get a chance to explain how it all works. Consumers really don’t understand.

  7. Charleston real estate blog

    December 3, 2007 at 4:17 pm

    I’ve always been a handshake is my word kind of guy like Jonathan and thankfully haven’t been burned … yet. I explain agency, show the agreement but don’t require a signature at that time.

    But nobody sees a house without a preapproval letter. As I’ve said to buyers, If you like a house and want to make an offer, no seller will consider your offer without one. Additionally, I won’t leave the comfort of my office and show anyone homes unless they have been preapproved for a loan.

    And not to offend the Longhorn fans but I’m with Jonathan on ASU having lived in Phoenix in the mid 90’s.

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