Yesterday, I met with someone I thought would become a new buyer client and it turned out that he wants to be a buyer customer. I’m hoping that his decision is based on insufficient information and not that he isn’t a serious buyer. If you aren’t in real estate, you might wonder what the difference is between a client and a customer. With a buyer client, your obligations are to the buyer. With a buyer customer, your obligations are to the seller. You are a Buyer’s Agent with a client, you are a Seller’s Sub-Agent with a customer.
Many people at this point are simply saying, “huh”? When working with buyers, we have always acted as Buyer’s Agents. We are both Accredited Buyer’s Agents. An actual contract exists between Buyer’s Agents and Buyer-clients. There are lots of duties and responsibilities, but the most important one is that the buyer is agreeing to work exclusively with their Buyer’s Agent and if compensation cannot be gotten through the seller or the seller’s agency, the buyer will pay the commission. Without this agreement, an agent can work months with someone spending a huge amount of time, effort, car expense and administrative expense and risk the buyer finding a property on their own or through another agent and the original agent will never be compensated.
An agent MUST know who they are working FOR and how they will be paid. Otherwise, you take the chance that you will be doing volunteer work. As Buyer’s Agents, there are many things we can do for the buyer throughout the course of the buying process…because of the nature of the process, we get to know the buyer extremely well and can be of tremendous benefit in the end result. If we aren’t working FOR the buyer this way, we HAVE to work for the seller, whether we know the seller or not. This includes providing the seller with every sensitive thing we can find out about the buyer. So, in essence, you work against the person who is in your car and company the most often.
To further complicate matters, many companies (our own, for example) do not compensate Seller’s sub-agents. It is a matter of liability. If an agent does not work directly for your company and your seller, do you really want them out there representing your seller’s interests?
So, Leslie and I have decided to give this gentleman one more explanation and chance to sign us as Buyer’s Agents. If he can not be made to understand this relationship is in his best interest, he is not a serious buyer and we can’t afford to waste time that we could be spending with a serious buyer.
During my walk today, I was trying to think of analogies to utilize with this man so that he could make an informed decision. He is a banker and I think that if he considers all of the services he is able to offer to members of his bank, that would be similar to what I can offer him. If his employer all of a sudden said everyone else in the bank could offer all of the services to his members but he could only offer one service…and maybe or maybe not get compensated for his effort…perhaps that will help him make a decision.
We’ll see. I guess the problem is that during the last two years it has been so difficult to get a good buyer, that if someone even seems like they are a buyer – it is easy to be tempted to set aside your standards. However, life is tough enough that it isn’t worth not knowing who you work for and who will pay you.
Wish me luck in the conversation later today.