New Buyer Agent Rules: Exclusive Buyer Agency Agreements

It's time to polish your Buyer Process. There has never been more urgency than now to ensure you're operating professionally, showing your value, and staying compliant!

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Get out of freak-out mode and into action so you can survive the changes and thrive in the new market.

Just in case you've had your head in the sand for the past week and a half, there are two significant changes to pay attention to as a result of the NAR Commission's Lawsuit Settlement.

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The settlement agreement mandates two critical changes to how members and MLS participants transact.  

• #1:  NAR agreed to create a new MLS rule prohibiting offers of compensation on the MLS. This would mean that offers of compensation could not be communicated via an MLS. Still, they will continue to be an option consumers could pursue off-MLS through negotiation and consultation with real estate professionals.  Remember: just because commission isn't listed in the MLS does not mean that commissions have disappeared.  Don't believe the media; they're wrong!

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• #2:  NAR also agreed to create a new rule requiring MLS participants working with buyers to enter into written representation agreements with their buyers before the buyer tours a home. NAR has long encouraged its members to use written agreements to help consumers understand exactly what services and value they provide and for how much.

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Today, we'll concentrate on #2.  What is your plan to obtain a buyer's signature on the representation agreement?  What is your experience with this so far?  You probably fall into one of these three categories:

1.  No problem. You've been doing this for months, years, or even decades. You have a presentation and a buyer system, and it's business as usual for you. You're relieved that now, everyone will have to be as professional as you've been!  Nice work!

2.  What are you talking about? I work with people who already trust me, and I've never had to worry about their loyalty.  How do I ask a friend to sign an agreement with me?

3.  What's a Buyer Agency Agreement? You've only completed the state agency form and have yet to really consider this.

Whatever category you fall into, it's time to get serious about following a system that will result in the required agreement. This isn't just to be compliant; it's to have a transparent, specific agreement and expectations with your buyer clients.

Of course, we drill down on this more completely in Premier Coaching.  On this podcast, we're giving you an overview.  

Your 8-Step Buyer System

1.  Generate the lead.  Things to consider:  Where do your buyer leads come from currently?  What are you spending (or not spending) per lead?  

2.  Follow up using Furiously Fast Lead Follow-Up practices.  It doesn't matter what the source was: voicemail, email, text, referral, internet, social media.  Follow up immediately by voice and then in person for your presentation.

3.  Prequalify your buyer leads using a proven and effective buyer prequalification script.  This script should help you discover the following:

-Which home in the area do they plan on selling? 

-Are they already working with an agent?

-Are they pursuing financing, all cash, or not sure?  What price has their lender told them not to go over?

-What is motivating their desire to move?

-What is their ideal time frame?

4.  Present your Buyer Presentation in person or via Zoom.  Your buyer presentation will cover the following:

-The buyer process.  When to speak to a lender; what's the difference between being prequalified, preapproved or loan-committed?  When should you start seeing homes?  How do home inspections and appraisals work?

-What to expect from you, and what you expect from them.  Why it's essential to commit to you as their buyer's representative.

-Establish their goals. What's a must-have, what's a deal killer? Compare goals if more than one buyer is buying. Are spouses on the same page?

-Discuss how you are compensated for your work. Examine the different possibilities for covering your commission: A) It's included by the seller via the listing agreement, B) Part of it is included by the seller, C) It's offered by the builder they may build with, D) They could be out of pocket, or E) Negotiate this as a seller's concession.

-Create a buyer's net sheet, which includes costs like the home inspection, loan-application fee, credit report fee, and possibly your compensation.

-Close for the signature on the net sheet and the Exclusive Buyer Representation agreement. 

5.  Schedule showings if they're ready or set up a task list if they aren't.  This could include meeting with their accountant, the right lender, you for a listing appointment, a stager, a credit counselor, or any number of other items necessary BEFORE you get busy working for them.

6.  Negotiate on their behalf and go pending!

7.  CLOSE.  After closing, record a testimonial video, get a written testimonial, and ask who else they know who could use your help buying or selling real estate.

8.  Lather, rinse, repeat.

Need more help? Sign up for Premier Coaching today for free.  Need a turn-key buyer presentation?  Sign up for coaching.  Need buyer prequalification scripts? Same!

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