much more carefully before coming to such a decision. Some buyers spend a great deal of time evaluating their choices before making an offer. For others, it is a straight forward decision.
REALTORS® have to adjust to the pace of their clients and, generally, do. A little communication usually clears up the problem. REALTORS® are there to facilitate the process by ensuring that you, as buyers, have all the information necessary to make informed decisions -- at your pace.
The ‘Door Opener’
There are times that I receive a call from a consumer who wishes to see a property. I don’t normally respond to such a request but ask the potential buyers to first come to my office to discuss their requirements. Often they do and occasionally they don’t.
In the past, I responded to such requests but soon learned from them. The following is an example of what transpired on one occasion.
The caller wanted to see a property later that same day. I agreed to this instead of suggesting that we should first meet. It was my listing, close to my office and it was vacant. I asked the caller some important questions: “Are you working with a REALTOR®?” The answer was “No” and so I felt I was not infringing on another REALTOR® or wasting my time.
There are occasions when a consumer calls on several REALTORS® to view properties. If that is the case, it is only the REALTOR® who eventually writes the offer who is not wasting his time. All those who show homes that are not of interest are simply ‘Door Openers’. They are wasting their time and really have no recourse because they know nothing about the buyer’s wants or needs.
Another question: “Have you been pre-qualified for a mortgage?” “Yes, up to $500,000.” A good answer since it attests to the seriousness of the buyer. So, I agreed to meet Joyce, this potential buyer, at the vacant house at 4:30 p.m.
I arrived a few minutes ahead of time to open the house and put on the lights. Shortly, a gentleman came by but I wasn’t sure why he was there. I was expecting a female. I soon found out, that this was apparently a relative of the potential buyer who might co-sign for the mortgage and was, therefore, previewing the home.
At this point, I was somewhat uneasy as I knew nothing about this person or the person who actually made the call. Nor did I notify anyone in my office that I was showing a property. As he viewed this house, I allowed the gentlemen to browse through this vacant home on his own as I stayed close to the open front door with my cell phone in hand with the emergency number on speed dial. When he was finished, he simply thanked me and returned to his car. He had no questions nor was I prepared to address anything either. I was simply glad that he left.
I didn’t know how serious these buyers were or what their timing might have been. They obviously didn’t want a REALTOR®. They wanted a ‘Door Opener’! In not having buyers first come to my office where I could have obtained information about them and their housing needs, I not only wasted my time but could also have unnecessarily exposed myself to danger.
Meeting with the REALTOR®
Now when I get a phone call from you, the consumer, indicating that you plan on making a real estate purchase, I ask you to come to my office. This is a serious purchase and it requires setting up some important ground work.
From your point of view, you should know all the aspects that make up the buying process. This also includes gathering all available information so that you can make the best decisions.
From my point of view, as your REALTOR®, I would like to know details about your real estate needs and wants, your timing and whether you have been pre-approved for a mortgage.
I generally begin by obtaining your legal names (essential for contracts), address, home phone number, work numbers, cell numbers, fax numbers and email addresses.
Usually, I provide you with some highlights about my real estate company and my professional background. I then want to know about you so may ask you some general questions about yourself-- perhaps your work or other places you have lived. At this point, this is not a fact gathering session but an opportunity to build some rapport. I find that a little personal information enhances a work relationship.
I then proceed to the kind of home you are looking for -- house, condo, townhouse or mobile --what size, how many bedrooms, bathrooms, garage, yard requirements and location. I have an outline of my questions and make notes as we go along. I enquire as to whether or not you have been pre-qualified for a mortgage and whether or not you have a down payment. I also ask you about timing -- when you wish to be in your new home.
In discussing all these elements, we develop a sense of how we would work together. I actually address that point and make sure that you are comfortable with me and feel that I have a good grasp of what you are looking for in a home. I then proceed.
Agency Relationship - ‘Working with a REALTOR®’ Brochure
After establishing the kind of home you are looking for, I begin with some of the paperwork. I explain the agency relationship to you at this point and have you sign the form. This has been described at the outset of the book so I will not elaborate further here.
Exclusive Buyer Agency Contract
Next is the Exclusive Buyer Agency Contract. I highlight the key clauses of this contract. Essentially, it is a commitment between the Brokerage, represented by me, the REALTOR®, and you, the buyer- similar in intent to the Listing Contract signed by sellers.
Since we will be investing time in each other, this contract commits us to each other for a specific period of time. Such loyalty creates a positive and productive relationship.
I will be making you aware of all listed properties in your areas of interest and acting as your agent working on your behalf. If a property is for sale but not listed on the board’s MLS® System, I, representing my Brokerage, can enter into a fee agreement with the seller without acting as an agent for the seller but still working on your behalf.
You as the buyer, agree to use my REALTOR® services exclusively for the agreed upon time period and provide me with sufficient information so that I can act in an informed manner on your behalf.
This contract also provides the buyer’s Brokerage with a guaranteed fee which is then stipulated in the contract. Fees vary from REALTOR® to REALTOR® and from Brokerage to Brokerage. It is against the Competition Act to have fixed fees. So I would set the fee that my Brokerage would receive through this contract.
When you, the buyer, select a home that you wish to purchase, I will advise you what fee is offered, if any. If it is less than stipulated in the contract, you will pay my Brokerage the shortfall plus applicable taxes or, I can, with your permission, see if I can obtain my stipulated fee through the other Brokerage or via a fee agreement. You also have the option of by-passing that home and selecting another.
To put this in perspective, when such a situation arises, my fee has generally been met by the listing Brokerages or I have been able to negotiate my fee through a fee agreement.
Once you understand and agree with the terms of the Exclusive Buyer Agency Contract, and we have signed the contract, you are no longer simply a consumer or customer but become my client. As such, this gives me the authority to represent you and legally obligates me to look after your interests. It does NOT give me the authority to sign on your behalf - such authority would have to be provided in writing.
It should be noted,
