Yet another excellent post highlighting the sound business decision of getting an exclusive Buyer Broker Agreement if you are going to work with Buyers. If you choose not to - that's your call - and also potentially your loss!
Hi folks. Today I want to talk a little bit about our responsibility to ask Buyers and Sellers if they are working with another REALTOR®. Is this something we are obligated to do by our Code of Ethics, or not? What do you think?
Here's an example: Recently, a Buyer contacted me by phone to get some information on a couple of my listings. I asked him if he was working with another REALTOR®. He said that he had gone out looking at properties with a REALTOR® the previous week. I then asked him if he had signed an agreement with them, he said "No".
What would you have done next?
What I did was make an appointment to meet with him to go over his situation AND to get a Buyer's Broker Agreement (BBA) signed....since I felt I could help him.
The fact that he had told me he had been working with another REALTOR®, the week before, meant absolutely nothing to me. Would it have mattered to you? Would you have missed out on an opportunity to work with a qualified Buyer because you are not familiar with our CoE?
If so, let's clear up this misconception of having to ask the "Are you working with another REALTOR®?" question.
This is what our CoE states:
Standard of Practice 16-9
- REALTORS®, prior to entering into a representation agreement, have an affirmative obligation to make reasonable efforts to determine whether the prospect is subject to a current, valid exclusive agreement to provide the same type of real estate service. (Amended 1/04)
What this means is, that as a REALTOR®, I am under absolutely no ethical obligation to ask the question, unless I am in the process of entering into an agreement. Now, of course, it would make good business sense to ask the question prior to writing a contract to purchase, to avoid a procuring cause dispute, although we are not obligated to.
This also means, that if you are working with Buyers, without a BBA, then they are NOT your Buyers. They are open territory. And chances are that if they bump into me they may very well be my Buyers from that point on.
Could there be any better reason to learn how to present a BBA to your potential Buyers and to get it signed before you start spending much time working for them? Here are a few posts that will help with this.
Here's another way to look at it. If a Seller invited you over to see about listing their property and they told you they had already met with a REALTOR® and had another one coming over in the morning would you hesitate getting them to sign an agreement? Of course not. Buyers are no different. Until they have agreed to work with someone in writing......they are just a lead. What say you?
***This article was originally posted in June 2008. The 97 comments back then are awesome and well worth a read!!
***Please remember, your State's real esate laws trump the REALTOR(R) Code of Ethics.
***I am NOT an Attorney nor do I play one on TV. Click the button below for my Bio.
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