What if Buyers Won't Sign a Buyer's Agency Agreement?

Navigating Buyer Agreements: What Realtors Need to Know

As a real estate professional in Cleveland, it’s crucial to stay ahead of industry changes and understand how they impact your business. One significant change on the horizon is the mandatory buyer’s agreements, which will soon become a requirement for showing properties. This shift can bring about various challenges, especially when dealing with new clients unfamiliar with this process. In this post, we’ll explore strategies for handling buyer agreements effectively, ensuring you remain compliant while maintaining positive client relationships.

The New Reality: Mandatory Buyer Agreements

Starting August 17th, 2024, the National Association of Realtors (NAR) will implement a rule requiring buyer’s agreements to be signed before showing any properties. This means every potential buyer must sign a formal agreement with you, the Realtor, before you can proceed with showings. The only exception to this rule is for open houses, where no buyer agreement is necessary.

Understanding Buyer Hesitation

Imagine this scenario: a new lead reaches out to you, excited about a property they’ve seen online. However, when you mention the need to sign a buyer agreement before you can show the property, they hesitate. They might say, “I’ve never had to sign anything like this before!” or “I just met you; why should I sign an agreement?” Such responses are likely, especially in states like Ohio, where mandatory buyer agreements are a new concept.

Strategies to Address Buyer Concerns

To overcome these objections, consider the following approaches:

1. Property-Specific Agreements

One effective strategy is to offer a property-specific agreement. If a buyer is hesitant to sign a broad agreement, suggest signing an agreement that applies only to the property they’re interested in. For example, you can specify in the agreement that it only covers 123 Main Street. This approach can help ease their concerns by limiting the scope of the agreement.

2. Short-Term Agreements

Another option is to propose a short-term buyer agreement. Explain that the agreement is only valid for a day or a few days. This way, the buyer doesn’t feel overly committed. You can say, “I understand we just met. How about we sign an agreement just for today? This allows us to view the property, and if you like it, we can discuss a longer-term arrangement.”

3. Non-Exclusive Agreements

Consider offering a non-exclusive buyer agreement. This type of agreement allows the buyer to work with other agents while also working with you. It’s a flexible option that can build trust. Explain, “This non-exclusive agreement allows you to continue exploring other options while we work together. It’s just a way to ensure we’re on the same page when viewing properties.”

Educating Buyers About the Process

Educating your clients about the need for buyer agreements is essential. Many buyers may not understand why this change is happening. Explain the benefits of having a buyer agreement, such as:

Clarity and Commitment: It outlines the responsibilities of both parties, ensuring transparency.
Loyalty and Dedication: It protects both the buyer and the agent, fostering a dedicated working relationship.
Professionalism: It elevates the level of service, showing that you are committed to providing top-notch professional assistance.

Overcoming Objections

Buyers may still have objections, particularly concerning the potential cost implications. Be prepared to explain how commissions work and reassure them that you will strive to negotiate with sellers to cover your fees. A simple script might be, “While this agreement outlines how I get paid, know that I will always work to have the seller cover my commission. This agreement just ensures that we’re clear on the terms of our professional relationship.”

Role-Playing and Practice

To effectively implement these strategies, practice is key. Role-playing different scenarios with your team or a mentor can help you become more comfortable with these conversations. Anticipate common objections and rehearse your responses until they feel natural.

The Bottom Line

Mandatory buyer agreements are becoming the norm, and it’s essential to adapt to this change smoothly. By offering flexible agreement options, educating your clients, and preparing for objections, you can navigate this transition effectively. Embrace this change as an opportunity to strengthen your professional relationships and provide even better service to your clients.

If you have any questions or need further assistance, feel free to reach out to me, Mike Ferrante, and the 21 Mike Team at Century 21 HomeStar. We’re here to help you navigate these changes and continue thriving in the Cleveland real estate market.

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