Brokers’ opinions may vary on the best way to use buyer representation agreements. It’s hard to argue, however, against their crucial role in establishing rights and responsibilities between buyer agents and their clients.
The Accredited Buyer’s Representative (ABR®) designation course argues strongly in favor of written agreements, pointing out their significance in establishing mutual expectations, preventing misunderstandings and instilling loyalty.
In some states, agreements are required. Even where they aren’t mandated, some agents believe that language in the REALTOR® Code of Ethics implicitly requires one.
Buyer agreements are also an excellent risk management tool. If your agents have a firm grasp of what they should and shouldn’t do in various situations—and can explain this to clients—they’re less likely to invite complaints or litigation.
While it’s hard to punch holes in the value of buyer representation agreements, it’s easy to understand why many agents resist them. Various human emotions are typically at play, including:
Confidence. Agents may feel timid about explaining the benefits buyers gain by working with them. Of course, too much confidence can be off-putting to buyers, who want to feel center stage in the agent/client relationship.
Fear. Buyers and agents alike may experience a fear of commitment. Buyers think “I don’t want to be locked in,” whereas agents worry about a buyer tying up their time.
Agents also worry that asking for a signed agreement could drive buyers away, especially if agreements aren’t commonly used in their market. (If buyers are reluctant to sign one, agents may opt to offer a short-term agreement, a nonexclusive agreement, a trial basis or employ other strategies.)
Trust. Some agents say they’d rather trust their clients—that the best relationships are built on trust. However, how is trust established? Is it merely a matter of building rapport?
Or does establishing trust also entail demonstrating that you’re professional, knowledgeable and capable of helping buyers achieve their goals? That’s trust built on competence, which is fully supported by buyer representation agreements.
The ABR® designation course tackles each of these obstacles, and others, helping agents gain knowledge and skills in all aspects of buyer representation, including buyer agreements and the initial buyer consultation.
Each year, we survey ABR® designees to gain their perspectives on multiple topics, including buyer agreements. As a group, they have more industry experience (median of 13 years versus 8 years) and are more successful (median gross income of $76,700 versus $41,800 in 2018) than NAR members, as a whole.
While NAR’s member survey doesn’t ask about buyer representation agreements, anecdotal evidence tells us ABR® designees are much more likely to use one.
When asked about formalizing working relationships with buyers, 75 percent of ABR® designees indicate using some type of buyer representation agreement, predominantly an exclusive right to represent (67 percent).
Among those who don’t use buyer representation agreements, many concede, in verbatim comments, that they should be using one or are heading in that direction.
Helping Your Agents
If your agents would benefit from honing their buyer representation skills, consider supporting their efforts to earn the ABR® designation, starting with the ABR® designation course. The training is offered across the U.S., Canada, and beyond, as well as online. To learn more, visit REBAC.net /abr/course.
Marc D. Gould is senior vice president of Member Development for NAR, overseeing a wide range of professional development programs for REALTORS®, including the Real Estate Buyer’s Agent Council (REBAC). REBAC is the world’s largest association of real estate professionals focusing specifically on representing the real estate buyer. With more than 30,000 active members, REBAC awards the Accredited Buyer’s Representative (ABR®) designation to REALTORS® who have completed the specialized education and documented experience in working with consumers purchasing a home. To learn more, visit REBAC.net.