Bullet-Proofing Your Pitch for a Buyer Agency Agreement
Real estate agents know the ins and outs of contracts for their clients. After all, among a fiduciary’s primary duties is putting together and understanding the documents that protect their clients during and after the legal process of purchasing and selling property. But there are also contracts in place that help agents protect themselves and their businesses.
For example, it’s practically a given to have a seller sign an agency agreement soon after their initial consultation with a listing agent. This solidifies that they want to continue receiving an agent’s services and are committed to their representation. But, on the buyer side, potential clients (and even agents themselves) have different expectations. According to the National Association of REALTORS® Profile of Home Buyers and Sellers, only 56 percent of buyers signed an agent representation disclosure in 2022.
A buyer’s agency agreement is a contract buyers enter with their agent in which they sign over the exclusive right for that agent or their business to represent them in their next purchase of real property. In simpler terms, it’s a guarantee that they will end up doing business with the agent they sign with.
Although many agents treat buyer agency agreements as optional, they are actually imperative—not only to the security of your business, but also to the quality of the services you’re able to provide. For you to run a successful business and continue to provide exceptional service to your clients, you need assurance that you aren’t giving your time away for free and are putting your efforts toward the right endeavors. Think of it as a win-win: you get assurance your business will continue to thrive, and your clients benefit from your fiduciary values for life.
So, if buyer agency agreements are so important, why do so many agents not require them? Either they fear an awkward conversation or are not confident enough in the value of the services they provide. To reduce the pressure on this conversation, we advise making a list of the services you offer and doubling down on your value proposition during buyer consultations. To help guide you through the process, we will go over the four major value buckets of a buyer agency agreement—expertise, convenience, exclusivity, and personalization—and how they can drive your buyer business.
Not only do agents facilitate the purchase of real property through their knowledge of the paperwork and laws that define the deal, but they also act as a concierge to a host of other associated services. Your connectedness as an agent provides your clients access to a network of vetted vendors. This is convenient whether a first-time home buyer needs access to a trusted inspector in a pinch, or if an investor needs contractors for bids prior to committing to a purchase. As an agent, you already have access to a host of contacts that they can call on.
Some agents will go the extra mile and provide in-house services to make their client’s buying process or move easier. This could include professional organization services or movers included in the price of your services. One agent we know even has someone in their office who aids their niche of international buyers in coordinating specialized paperwork.
Project management also falls under this umbrella. This means you handle communication with the lender, especially during critical times during the contract-to-close period. You most likely schedule appointments like the inspection on behalf of your buyer. All in all, you provide a level of convenience to your clients that should not be overlooked when asking for a signed agreement.
Agents are specialists and—just like electricians, plumbers, cosmetologists, and other skilled tradespeople—must be licensed to practice. Knowledge of this specialized (and often very complicated) field has inherent value. But, as a fiduciary, you go above and beyond to offer even more knowledge at different stages of the deal.
The market knowledge you gain by studying listings in your area, keeping up with industry news, working with lenders, and just generally paying attention to your field will inform your buyers throughout their purchasing process. You help them identify deals, strategize financing, and give advice on smart investments for their future.
Finally, you also have experience handling negotiations. Not just any strong-willed individual succeeds in this stage of the deal. You must be well-versed in all areas of the contract and have a strong grasp on the needs and wants of the seller, the market, and customs regarding appropriate and inappropriate asks.
Through the network of connections you’ve built in your database, as well as through the work you do prospecting, you may have access to off-market properties. These are exclusive purchase opportunities you can offer your buyers. This exclusivity may represent better deals, or simply the experience of access to an opportunity offered to few others.
Klarissa Skinner, an agent based on Overland Park, Kansas, sends out a deal of the day to her database. As a result, the vast majority of her business comes from repeat, investor clients. Exclusivity may also come in handy for agents catering to a luxury market, in which the experience of exclusivity is something people will pay for.
Many agents will do a detailed needs analysis with their clients early on in the buying process. This added service helps clients receive a tailor-made purchasing experience. Not only will it help them find a better deal that fits their needs, but it will also make the experience more personal as the agent gets to know their client.
Buyers’ agent services are valuable because of the knowledge, network, leg work, and customization they provide throughout the transaction. Using each of these four buckets as guidance, you can explain to your clients the depths of services your business provides.
Whether you’re getting paid out of the cost of sale or not, it’s never a bad idea to protect your time and the longevity of your business by building a bullet-proof pitch for your buyer agency agreement. And, with the upcoming new year in sight, there is no better time to review your buyer’s agency agreements and improve your communication of the values you provide. Want some extra credit? Try a strategy one agent recently described to us: Pre-record your value proposition and explanation of the buyer agency agreement to take the awkwardness out of your request for signatures.
What unique value do you add to your clients’ buyer experiences? How do you advertise them when asking potential clients to sign with you? Let us know on our Facebook page. And don’t forget to check out our blog for more insightful articles and research.