Discover Strategic Insights into Buyer Broker Agreements
[00:00:00] Nazar Kalayji: I’m super excited about this ’cause I think that it’s interesting to, as I’ve inquired about people that signed buyer broker agreements, I think there’s some states that like, it’s a no brainer. Everyone. Everyone does it. And there’s some states that no one does it like California like.
You’ll hardly find anybody that signs buyer broker agreements. But with all the lawsuits coming out and all these things, I think this is a, a tremendous important thing that most agents need to learn how to do. ’cause if they don’t, then they’re gonna be blindsided and they’re gonna be working for free.
Because if you get to the point where your commission. The MLS is zero or it’s a dollar or $500, and your client wants to see, wants to see that property, right? Like if you truly are representing them in their best interest, you’re gonna show ’em the home. You’re not gonna say, oh, I’m not gonna share that property because they’re not paying me enough.
And so I think having that clear conversation with somebody be be able to articulate your value proposition and say, Hey, this, that’s what my fee is. I think is a, is a, a tremendous skillset that not a lot of agents have unfortunately, but they need to obtain so, We’ll give another minute for Ray to join.
Hopefully he does. You guys, I can’t see you unless your camera’s on. Unfortunately, I, I don’t know who’s changed my settings, but they did. So if you are on here and you want me to see you, or if you have a question, whatever, please don’t hesitate to, to set yourself or to share your sa or your share, share your face.
All right. Well, we are at least my time. It’s 1131 and we have Enough people here, I think we should start to get going. So I think the way I’d like to do this is I’d like to kind of give you guys an opportunity to be able to just do your quick little intros. And then once you do that, then maybe we can go dive in deep into, okay, like, this is what I do, this is, you know, what works for me.
You know, your value proposition, those types of things. So Juanita, why don’t we have you go first, don’t you, unmute yourself and just give us like a, a one minute you know who you are. We’ve known each other for several years. And, and just kind of go tell us what you do and then, and then we’ll get into the, you know, the nitty gritty.
[00:02:02] Juanita Buskard: Sure. So when need a bus card, I’ve been, I just had my 19th anniversary in real estate. The first nine years approximately of that, I worked a lot with buyers. It was, you know, the market where we had tons of listings and you’d show 40 houses before someone picked one. It, it was definitely different than it is now.
But now I’m a team leader broker of a small boutique brokerage, and I work. 95% of the time listings. But I train on the buy side and still work a few select buyers here and there. And we’ve been doing buyer agency contracts for probably a good 15 years. So it’s not something new to us at all.
It’s definitely as a expectation within our, our team in brokerage and yeah, we’re in the West Michigan area.
[00:02:47] Nazar Kalayji: Awesome. Thank so Much. Janelle, do you go.
[00:02:53] Juanita Buskard: Sure. I’m Janelle Ralston.
[00:02:56] Janelle Rawlston: I’m in Dallas. I started in real estate in 2007 with my business partner, Judy Parsons on the investing side. And we flipped houses for several years. And kind of rode the market down and then decided to just continue on in residential. Formed our team in 2014. And so Judy and I have a team.
We’re the Indigo Sky Group here in Dallas. And we range from one to two other agents at a time and an admin in marketing and all of that that goes with it. Our business kind of fluctuates a little bit, but it’s. Pretty close to almost 50 50 buyers and sellers. Texas is a state that I don’t, I they encourage you or to have buyer rep agreements at Compass where we are if we want to get paid.
We have a buyer rep agreement, so we do for every buyer that we represent. And so it’s not new to us, but there will be some nuances. I think that change in the way that we approach those Because of changing buyer and seller expectations. So glad to be here. Thanks Nazar for this invitation and getting to be here today with all of you.
I’ve known Juanita and, and Nazar both for a long time in coaching, so I’m excited for today.
[00:04:18] Nazar Kalayji: Cool. Awesome. And Ray finally is in the house late, but you know, better than late than never, I guess. Oh, you’re also muted, Ray. So what I’d ask you,
[00:04:28] Ray Ellen: I was bobbing and weaving through the traffic, so sorry.
[00:04:32] Nazar Kalayji: It’s good. I’m, I’m glad you bobbed and weaved and didn’t get into a car accident. So why don’t you just tell us like a, a quick synopsis of like, you know, who you are and where you work and, and then we’ll, we’ll dive right into the, to why we’re here today.
[00:04:42] Ray Ellen: Yeah, I’m in Arkansas. I’m with Real Broker.
We have some pretty phenomenal contracts here, so nothing’s gonna change in our state that I’m aware of. It might just be a little bit of clarification, but for the most part we’ve, we are going to be insulated from this whole thing. So I’m here just to basically share what our contracts say and how they say it so that you guys can take that and, and run with it.
Hopefully it’ll help. Cool.
[00:05:02] Nazar Kalayji: Yeah. I mean, obviously every single state and there’s lots of pe, lots of states being represented in this, in this call. It’s not necessarily for me about what exactly sit on the contract more so like how you guys are able to articulate to a buyer when you meet with them.
Like, I’d like to know, you know, when you guys put that contract out, do you, do you meet ’em in person and immediately say, I need you to sign this. Do you show ’em one home, two homes? Is it like, you know, after the second appointment, like what are the steps you take and you know, how do you make that. How do you deliver enough value to them?
Because you’re virtually asking them to marry you in an essence, right? You’re saying, here’s a contract between us. And so how do you, how do you get over that and how do you make that process as smooth as possible so that they don’t feel like you’re handcuffing them? When they don’t really know who you are and all those types of things.
So why don’t we just go back in the circle again. So, Juanita, if you wanna unmute yourself and tell us a little bit more about like, you know, what’s the process that you guys go through and what, what have you felt like are the roadblocks that you’ve had to, to overcome in those [00:06:00] situations where people are not, are a little bit more reluctant to sell or to sign?
[00:06:04] Juanita Buskard: Absolutely. So there’s two different scenarios that typically come up. One is where we’re contacted by a buyer who’s been referred to us, or a lead that comes in offline or, or that kind of thing. And typically the first thing we do try to do is set an appointment to share with them what to expect from the process of buying.
And so we use, you know, Phil Jones. Style. We use questions in our conversations with them to help them understand that they don’t know everything that they know. And once we get them to that point where they realize, yes, I do need some help, we offer them a buyer consultation. So we might say something like, would it be helpful if we sat down, I bought you coffee, I shared with you what to expect on the buying process, what the market’s like right now, and the different tools that we’ve been using in our tool belt to help buyers.
To win in this very competitive market. Our area is still very competitive. We’re not having 24 to 40 offers on each house like we were, but we’re still sometimes having three to 10. So buyers do need the help to navigate that market if they wanna get a house quite literally. So that, that is our first, you know, scenario that we see a lot.
And a lot of, most of the time we can get them to sit down. Sometimes we have to nurture ’em a little longer and wait till there’s a house that they wanna see. If we get a Zillow lead or something like that where they wanna see a home, I have what I call the one house rule. I’ll go and show them a house.
But my goal. In that appointment is not just to show them the house, but again, to go through that process of asking them questions, that helps them to come to the realization that they do need our help. And then we offer to take them again, sit down. For coffee, we go through we have a really good flow chart that shows them what to expect.
And the first two things on the flow chart are choose your agent, choose your lender. And we share, once we go through that, we’ve had agent or buyers who say they had quote, worked with a. An agent for nine months and they never understood the process. They never understood what it meant to have somebody in their corner.
They never knew all the steps and even how long the process was. And quite often, just by us going through and taking that time to educate them, 95% of the time does sign up up with us right then and there because they. Realize what they didn’t know. And they realize they do want us in their corner and they don’t wanna go on their own.
And quite often they’ve been trying to go on their own and they’re failing. They’re not getting the house. And so that’s how we’ve done it. And like I said if they don’t sign us, I. With us right then and there. We don’t necessarily keep showing them houses. We’ll keep nurturing them. But we explain to them the difference between a client and a customer.
And a customer is just someone interested in buying a home, and a client is someone that has our fiduciary like. We represent you. We’re in your corner. We’re gonna do everything we can. We share what some of those things are, the resources that we have so that if you do come up with an issue with a house, we’ve got people that can deal with that.
There’s really so much value that we bring, and I think the biggest thing that we had to overcome as a team was getting our agents to realize that we’re not asking these people for a favor. We’re offering them a service that is in the end, gonna get them exactly what they need. And we are bringing a lot of value to them.
And when you come at it humbly, but confident that you’re gonna help them get what they want people are just much more likely to sign up. Okay,
[00:09:22] Nazar Kalayji: awesome. I literally have like a million questions, so we’ll, we’ll, we’ll spread the wealth around. So, Janelle, what, what do you do? Like, what are, you know, what does that process, you know, either be, obviously it’s a, there, there’s, we handle sphere business versus online, you know, online lead differently.
But at the end of the day, you know, do you show ’em a property first? Do you say, Nope, I’m not gonna do anything unless you come to my office and go through this process? Like, how do you handle that currently?
[00:09:50] Janelle Rawlston: The way things are right now, we don’t really push them to sign a buyer rep agreement in at our first meeting.
With, especially with fear and referral, people that are already invested in working with us, they know us, they trust us because of how they got to us. We kind of have a same, a similar rule or a goal like Juanita does with online leads of, you know, we. It’s a one freebie thing. We’re gonna go meet with you, show you a house, maybe two if they’re close together, and try and have a conversation then to help you understand all the things you don’t know, or if you’re new to buying a house or new to the market, whatever that looks like.
The biggest thing that we’re talking about right now that will change with the lawsuits that are coming out is timing for that agreement and how we approach that because of the, the language that’s going to be involved there. Right now, it’s really easy. To get. We’ve never had a buyer refuse to sign a buyer rep agreement or say, no, I don’t wanna do that.
I just want you to show me houses because of the language that’s involved, you know? A hundred percent of the time we’re going to the seller to pay our commission. And yes, if there’s an instance where, you know, the seller’s only paying 1% to the buyer agent, which is rare, we just let them know, Hey, we’re gonna let you know when that happens.
You can decide if you want to go see the house or not. You know, and, and here’s how that works. That’s going to change because now the language for that buyer rep agreement is not, we’re gonna go to the seller. To get paid and you get, you have to decide or make up the difference. If that changes, depending on how those lawsuits turn out, that’s gonna change the tone of that buyer rep agreement.
So I think that’s the biggest shift is we do buyer rep agreements all the time. It’s no big deal. Hey, you wanna work with us? Here’s what we do. We’re your, we’re your people. We take care of you. Here’s the list of things we do. Everybody’s on board. Yeah. That’s awesome. Because the seller’s gonna pay. So now I think that will change a little bit and it will be more important to [00:12:00] really talk about the things that you do for them.
Maybe they might’ve heard about it, they might’ve thought about it. Maybe they haven’t even imagined all the things that we actually do for them. And how, how do you, how do you go about explaining that in such a way that the buyer’s gonna go. Yeah, I’m signing that. I’ll pay you. That’s a different conversation.
So we’re very adept at by our rep agreements. I think it will change the tone and the timing a lot.
[00:12:28] Nazar Kalayji: Very good. Ray, you’re muted again, bud.
[00:12:34] Ray Ellen: We have a couple of different ways to do it. The first, the first way is just with a general, we have this little disclosure document that I think is a nationwide thing.
That disclosure document says basically who we represent that we don’t or do represent you. So we do tell ’em kind of at the first touch especially whenever we meet in person, we give ’em this little pamphlet. Then we, what we wanna do, our goal is to schedule a consultation. So we might go on one appointment, but that’s it.
We don’t show any other houses or anything until they sign up with us. So we go to the a buyer consult and we treat it just like a listing consult. We take ’em through what we offer, and then at the end they hire us and if they don’t sign the document, we don’t work with them. So it’s pretty cut and dry for us.
It’s not a. You know, it’s, we’ve been, we have different value props and stuff like that, that we offer our buyers different ways that we search for properties, how we negotiate. You know, I think everybody’s gonna kind of have to go through their, their presentation to a buyer to figure out exactly what their, their unique selling proposition might be.
A big part of what we do is just education on the process, because I think that’s one of our differentiators, that we have a pretty smooth process. And so we take them through like, here’s the process of buying a home. Here’s what you can anticipate. We bulletproof the transaction by letting them know that their inspector’s gonna make ’em feel like they’re buying a pile of rubble.
And that’s okay. You know, so we, we take them through all those expectations. We also tell them that and I ran my own personal numbers to find this out, so you’ll have to too, but 82% of our buyers buy one of the first properties we showed them. So they buy one of the first five homes, and that’s usually on the first outing.
And so we give them permission to write offers early. And just yesterday we had an appointment. They wanted to see a house. We said, great. We set the house appointment, I think for four 15. We set a buyer’s consult for three o’clock. We took them through the whole consult At the end, they were excited to work with us.
They went out with my buyer agent. She wrote the offer last night. We got it accepted. So that’s the, but they signed up with this, you know, they did the whole, the whole nine yards right there at the appointment. So, and ours is you know, our, our buyer contract says that they owe us, they’re obligated to pay us a certain percentage, but then it gives us a permission to accept partial or complete payment of that from someone else.
But it doesn’t change their obligation. I think that’s the key part of the buyer agreement. On the listing side of the agreement, it’s kind of written differently where the listing agent collects all the commission. Then they get to figure out what to do with it. So it’s never in our listing agreement that the seller is paying the buyer agent anything.
So that’s one of the things that we have done to kind of avoid this whole fiasco, I believe. Okay.
[00:15:00] Nazar Kalayji: So a couple questions and, and you guys, if anyone here has some questions, please post ’em in the chat and I, and I’ll, I’ll ask it. My question is, if you’re dealing with someone that is not a first time home buyer, right?
Is a very knowledgeable buyer. Buying another property is not someone that you know, so it’s not in your sphere. How are you showing value to that to prospective buyer? Instead of that buyer saying, I don’t need you, you’re just a door opener. I’m not gonna sign anything with you. I’m gonna go directly to the listing agent, or I’m gonna figure out a way to see that property on my own.
Or just call someone from Zillow, see the home, and then go directly to the listing agent. Who wants to take that?
[00:15:36] Ray Ellen: Are you asking me or are you, are you going around Any, any one. Any one of you? Three. Oh, well, I’ll, I’ll just go ahead and answer real quick. We we even make our investors sign exclusive agreements with us.
So we have a lot of investors, probably about 40%. For a while there was like 60%, but some reg regular clients have come back. But we make our investors sign exclusive agreements with us as well. So then exclusive agreement, they can only use us, can’t use anyone else, and they’ve promised to do that.
In order to get them to sign that, especially investors, we have to have a unique selling proposition that they’re excited to sign up for, and we have to show them how we’re gonna go above and beyond for them. And we have to show them that our exclusive clients get the best options. But on the regular residential side, if somebody buys a house every now and then, then we still go through the entire buyer consult.
So if they don’t wanna go through the buyer consult and they don’t wanna sign a document, we don’t work with them. You know, there’ve been some, some occasions where someone says, well, I don’t wanna sign up with anyone. And I just basically say, okay, well if you wanna take that risk, that’s fine. And they’re like, what risk?
Well, why don’t we meet? And I can. Talk to you about it. And so then we meet in person, go through our value prop, and at the end of that, it’s like a no-brainer because I don’t charge a cancellation. If somebody wants to cancel with me, they, they’re out. I don’t wanna waste my time worrying about taking ’em to court because they don’t wanna pay a cancellation.
So if I’m not gonna take ’em to court to get money, then I’m not gonna put it in the contract. So I, I don’t have a cancellation fee. There’s no extra fees or anything like that that I charge them. So because of that, it makes it very easy for them to sign up for us because I assure them that, Hey, tomorrow, if you hate my guts or find somebody better, then you just text me or email me, let me know it’s canceled and it’s done.
And it’s really easy to get them sign a piece of paper like that.
[00:17:16] Nazar Kalayji: Have you had a situation where someone has said, okay, cool, and then they find something you may have shown them and like, oh, hey, I need you to, I wanna cancel my agreement. And they went behind your back and bought that property.
[00:17:28] Ray Ellen: No, we had, there was something in our I, I explained the contracts to them as they go through.
You know, of course as real estate agents, I’m not an attorney, so I recommend they get an attorney, but our contracts have been drafted by a great attorney, and so I take them through the documents. I. One of them is a expired listing condition. And basically what that means is I, I tell them as I’m taking ’em through it, like this is the stab me in the back protection.
And they’re like, what? I was like, this is stab me in the back protection. You, you can’t go to a seller and say, Hey, you fire your agent. I’ll fire my agent. We can get a better deal. And then I say, well, you can do [00:18:00] that. You just have to wait 90 days. And they usually laugh like, ha ha, I’ll never do that. And then they, I’ve never had anybody do that, but we have a 90 day clause in there, so theoretically someone could fire us and then 90 days later go and find that house and close on it.
Such a small likelihood. And if someone does that good ridden, there’s so many more clients. Mm-hmm. Juan, did you know.
[00:18:22] Juanita Buskard: Yeah, I’ll, I’ll chime it. And there’s always gonna be a few people who aren’t gonna wanna, no matter how much value you bring, they’re not gonna wanna sign up. And like Ray said, then we just don’t, we don’t waste our time with them, you know, let it roll off your back.
But I love third party stories. My husband is my buyer’s agent. He just helped a doctor from our office or from our church who had a budget that was three times our average price point. Said. In 15 years, they’d never used an agent. My husband just went above and beyond for them. And they bought a house V R B O on Lake Michigan, which out here is like being on the ocean when you’re in Michigan.
Had a $15,000 repair that it needed on the foundation and another $8,000 repair buyer was perfectly willing to pay all those, just wrap it up. It, you know, the thing was gonna cash flow. My husband said, gimme a minute. You know, let me, let me see what I can do. Got the salary to pay all 22,000 of that plus update the, the R B O license in the, in the neighborhood.
And they said, you know what, Todd? No one’s ever. Really brought us enough value for us to feel like we need an agent and you just did it. And we have three doctor friends we’re sending your way because they all want that same thing. So when you have that reputation that you really bring the value, and even if you don’t, they don’t know you.
If you can say, I understand you might be really good at doing this on your own. Here’s what someone else found. I’d love to be able to do that for you. And just have that, that attitude that, you know, you bring the value and if they, they choose not to use it, that’s okay.
[00:19:57] Nazar Kalayji: First of all, I love that story.
It gave me tingles. Like I love when we’re able to,
[00:20:00] Juanita Buskard: it was literally like last month.
[00:20:01] Nazar Kalayji: It’s awesome. Yeah. Yeah. That’s freaking amazing. All right, cool. So someone asked a, a question like, do you get them like, ’cause in California there’s a specific section that says, what’s the total commission? And it says, from that, how much are you paying to the buyer side, which I think will eventually go away.
You don’t leave that blank, like, you know, you, you have to fill that out. As of right now, when the laws change you, like you have, stick with the contracts you currently have with, with your own state. But by a broker agreement on the buying side is important to be able to make sure that you get that filled out so you can share that value.
Have you guys ever been in a situation before where you’re, you know, like, well, first of all, what is your fee? Like, what, what, what do you say is your minimum fee that you have on your buyer broker agreement?
[00:20:44] Ray Ellen: Should we share that with antitrust?
[00:20:46] Nazar Kalayji: Probably not. That that’s, that’s a fair point. I mean, I, I’m not, I’m not saying like for us to like, you know, decide what we’re gonna do together.
I’m just saying, I guess whatever that fee is, let let’s, you know, call it blah blah percent. I. If the, the buyer or the seller’s not offering that for you, are you then going back to the, to the buyer and saying, Hey, my fee was X and they offered less than that. I need you to make up the difference. Have you guys had that experience before or that situation, or do you guys just sit you, I’m just gonna eat the cost?
[00:21:15] Juanita Buskard: We, we haven’t seen that a lot. We’ve seen it just a little bit recently where there’s about a half a percent less than what is Acceptable to us. We’ll use that, that phraseology. And it’s typically on much higher priced homes. Mm-hmm. And, and so we might come up with some kind of a, a tier system for that as well.
I think we’re all gonna have to change what we’ve been doing. Back when there was a lot of foreclosures here, there were times when we saw that more. And I think our plan is going to be to have our minimum and to just have that conversation like I don’t know if it was Janelle or Ray said earlier, you know, here’s, here’s what I charge.
I most of the time can get the seller to contribute this, but, you know, if not here, here’s what the fee would be to you. And I’m, I’m kind of really kind of anxious to see how this is all gonna play out. We’re in a very Conservative area here. But I can see buyers who are now pinched with the rates and the prices and everything, starting to just ask for a seller concession for that amount.
Okay, you didn’t offer it out, but if I’m gonna buy your house, I need, you know, x percent seller concession. So I’m anxious to see how that’s gonna work. But our, our buyer agency contract is gonna have a minimum right now. And
[00:22:27] Janelle Rawlston: we do the same with where our, where our rate is. And we’re, we’re seeing a lot more.
Or I would say it’s becoming more prevalent to see that fee drop on the what’s offered to the buyer agent. Unless it’s. Unreasonably huge for the most part right now. We eat that difference. We have not gone back to our buyers and said, Hey, we need this extra half a percent from you. Like Juanita said, a lot of times that’s on larger listings and higher priced homes, and it kind of gets to be to the point where you just, I mean, It’s just part of real estate at the moment.
If that changes, which it probably will with the lawsuits that are out there to where, you know, there is no. Buyer agent commission on the listing agreement. That’s just, it’s just optional all the way around. A seller can offer that as, you know, part of their, in, in a buyer’s market. The seller’s probably gonna go, Hey, I’ll help, you know, I’ll give you $10,000 to help pay for your agent.
But we haven’t been in a buyer’s market. In quite a while. So that’s gonna be, that’s gonna take some maneuvering in the market to get to that point. Mm-hmm. But I agree with Juanita at the same time, as a buyer, maybe I’m, I’m making a really good offer with the understanding that the seller’s willing to give me a concession to help me pay for my agent.
I think there’s a lot more negotiations that are gonna be involved [00:24:00] in those kind of contracts. It’s gonna create. Some nuances that we haven’t had before, kind of muddy the water a little bit and just, you know, you have a whole lot more options to get to the point where you’ve got an agreed upon contract now because there’s a lot more pieces in play, whereas before it’s just kind of laid out in black and white.
[00:24:22] Nazar Kalayji: Ray, did you have anything?
[00:24:23] Ray Ellen: Yeah, I mean we number one, I may be in the minority, but I don’t think buyer. Require agencies going away. I don’t think that the compensation from the listing side is going away. I think the clarification is gonna be the most important and the reason why it’s not gonna go away because it would disenfranchise millions of people that can’t afford representation.
And that needs to probably be the drum that everybody’s beating to say, look, the the rich listing people get the real estate agent who’s a professional negotiator and they’re gonna be negotiating and get somebody that is getting, you know, ADDIE or ADFA funds in order to purchase their first home, finally, and can’t afford any kind of representation on their own.
That doesn’t sound fair. So I don’t think that this is gonna go away. I think it’s gonna be clarified in that how the listing agent receives the commission and then what they do with that commission once they receive it, if they’re gonna split it or not split it. And for instance, our listings, if I sell my listing, there’s no change in the compensation.
I don’t discount because then if I’m discounting, then that proves all the lawsuits true. That if there wasn’t another agent on the other side, it would’ve been cheaper for the seller. So there’s no discount for me having to deal with multiple for more people. If anything, I should charge more. I don’t bullshit.
So I think, I don’t think it’s gonna go away. However, I do think there’s gonna be a lot more negotiating. I think there’s gonna be a lot of agents in every market that don’t fully understand what’s happening and just say, all right, we’re gonna offer a dollar on the buyer side ’cause we don’t have to do this anymore.
And they’re gonna misunderstand the way that’s going to affect the market, the way that’s gonna affect them and their client. You know, we, whenever a client asks me if my commission’s negotiable, I let them know that they’re more than welcome to pay more. But in this market, I don’t think they should offer a bonus on the buyer’s side.
’cause I don’t think they have to. But I never say that I’m gonna take less, because if I take less, then it starts to come out of their pocket, not mine. It starts to come out of the marketing, it starts to come out of these budgets that we use to actually sell their property. But in this market, I don’t think they should offer a huge bonus for a buying agent.
But they’re more than welcome to. I think what’s gonna happen is you’re gonna have some people that try these little flat fee, like, Hey, we’re gonna list for $1, and then you’re gonna have professional agents that say, Hey, I have a client interested in your property. They refuse to accept $1 to pay their agent.
Here’s, here’s the fee that they’ve agreed upon and they want that rolled into the purchase of the home. And the seller’s probably going to say, okay, we’ll pay that depending on what the offer is. Fine. And then we put in the offer. And if they say, well, this offer’s too low, okay, negotiate the offer, send us a counter.
But I think that’s what’s gonna happen is it’s gonna lead to more negotiation. I don’t think it’s gonna make properties less expensive. I think it’s gonna increase the closing costs on the buyer side. Right now, the, in a, in a buyer’s market, I mean, buyers are getting all of their fees paid for on the lender side.
And we don’t ever have a problem about the seller paying the lender fees. It’s gonna be the same thing, just with representation of an agent for them. Yeah. I think
[00:27:21] Nazar Kalayji: it’s interesting, again, like you guys are, you know, in, in, in more extremely high competitive markets like California and, and probably New York or whatever it is, where the dollar amounts are higher and there’s just more competition.
I bet you that, or in those areas there is a lot more where the buyer’s like, Wait a minute. So now I’m responsible to pay X amount towards your fee. Like are you really worth $30,000 or whatever that dollar amount is? I don’t think so. I’m gonna go directly to the listing agent, and the listing agent’s gonna say, well, you know, ’cause they’re gonna have to.
They can’t not represent that buyer, right? ’cause they’re, that’s a viable buyer that wants, that wants to buy their client’s property. They’re gonna have to represent them, but then they’re gonna have to charge a fee, whatever that fee is, which obviously, hopefully will be negotiated in advance. I think there’s just gonna be a lot of more buyers that are gonna say, you know what?
I don’t need it. I’m, I’m an experienced buyer, I’m savvy, I’m a doctor, I’m a whatever. You know, I’m not, I’m not a blue collar worker or whatever. Like, obviously there’s all these scenarios, but they’re can go directly to the, the listing agent. So I think that buyers agents need to have some level of ammunition and say, well, here’s why you want me to work with you.
Or why you’d wanna work with We can’t,
[00:28:34] Janelle Rawlston: we can’t do, we can’t represent both parties in Texas, we don’t have dual agency. So if a, if a seller, or sorry, if a buyer approached me directly as a listing agent, I have to find another agent for them to work with. So, I, we don’t have dual agency here. I can find another member of my team, another agent at Compass, but I can’t work with that buyer directly because I already represent the seller.
[00:29:01] Ray Ellen: So your, so your state interprets dual agency as the agent themselves? My state interprets dual agency as the brokerage.
[00:29:09] Janelle Rawlston: Yeah. Well see. And I can refer them to another. Yeah, and exactly what you said. I can’t work with them individually, but they could work with another agent on my team. I could hand them off Interesting to a buyer agent on my team, but I know I know too much about the seller’s situation, why they’re selling where they’re going.
We’ve already talked about maybe the minimum amount that they’re willing to sell their house for or whatever. All those things are that they’re telling me, so I can’t. I’ve gotta hand that buyer off. I could show the house to the buyer. I have to let them know. Don’t say anything you wouldn’t want the seller to hear because I’m legally responsible, ethically required to tell my client.
Everything that buyer says about the house, about what they think about the price, what they [00:30:00] questions they had on the neighborhood. So for me, it’s kinda like I can show you the house, but we gotta be pretty quiet here. Don’t say anything. And then if they are interested, let me get you, you know, with a buyer agent for my team, they can represent you. I can’t.
[00:30:16] Ray Ellen: So do you do non representation? Oh, sorry. There, so, so yes we can, if somebody says, I don’t want, I don’t wanna work with any agent, you can do non representation. You can’t represent.
[00:30:26] Janelle Rawlston: Okay. Same thing. We have a full stack of disclosures they’ve gotta sign and, and all of that. And I can’t advise them on anything.
I can’t answer any questions for them. I can’t help them put their offer together. And a lot of times we’ll do what’s called a reverse offer from the seller to that buyer. ’cause the buyer has no idea how to fill out the forms or do whatever they gotta do. So we’ll do a reverse offer from the seller to the buyer just to get the offer on the table and get negotiations started.
[00:30:56] Juanita Buskard: Yeah. We can, we can write it up in Michigan, we can write it up, we can do dual agency. I don’t encourage it within our brokerage. It’s allowed, but not within the agent themselves. So we just explain and have them sign a disclosure that says they’re a non-represented, you know, buyer. And they’re basically, they’re a, they’re a customer, a consumer.
They’re not a client. And so they don’t have, you know, representation. I like something that Ray said that I think. If everybody did this, we, we may have a different scenario with where we’re at right now. When I list a home, I say I charge X percent and I choose to share. This much of my commission, my commission with the other the agent that brings us the offer that you accept.
And I think if we realize that if the, if the buyer agency does go away, which I’m like, Ray, I’m not sure that I believe that that’s gonna happen here, but if it does, we’re all gonna be working twice as much because every person that’s unrepresented that wants to see our listings, we’re either getting ’em in there or one of our agents are.
And so, I don’t necessarily plan on cutting my commission in half if buyer agency goes away because I’m gonna have to be paying people to go out there and, and doing all that. So I don’t think in the end it’s going to save the sellers. Really. And I could be wrong. We’ll see how this all plays out. But
[00:32:15] Nazar Kalayji: Do you guys charge or do you guys have your own created forms as a buyer, a broker representation, or are you guys doing like your state.
Approved documents. Okay, so all you guys are doing that? We have a state form. Yeah. State form. Do you guys have a fancy little booklet that has all of your value props on there? Like a listing presentation would, or do you guys just kind of go off the cuff and say, Hey, this is what we’re doing for you?
[00:32:40] Janelle Rawlston: We have a book that we put together. We just, like we do for our listings, we have a book about our team. Here’s, here’s what we do, here’s our value proposition, here’s the steps in buying, here’s all the things that you probably didn’t know, that you don’t know, all of those things. And we give that to all of our buyers that we’re meeting the first time we go meet them.
And, and that’s really our goal, is to talk through that process with them. So that they know what that value proposition is. ’cause they, most of them don’t know, you know, unless they’re a seasoned buyer, they’ve bought multiple homes. Most of them don’t know what they don’t know, and they don’t, they’ve never even imagined all the things that they don’t know.
So we do that every, you know, we developed that this last year with our buyers, especially, we started doing more online leads. And with online leads it’s the same. I mean, you have to. Talk to way more buyers to actually get to the point where somebody’s ready to buy than you do sellers. ’cause a seller is ready to sell, then you know they’re gonna sell.
Buyers aren’t always ready to buy when you first meet with them, so we wanna, that’s our hook is here’s our value proposition. And that’s what keeps come people coming back to you. That’s why they keep calling you to go, you know, to, Hey, I need, I need this, answer, this question. Help me with this. Do whatever is because your value’s there.
[00:33:58] Nazar Kalayji: Awesome. If any of you guys w wouldn’t mind sharing what with, with the group, like, I don’t dunno if you have it in a digital format or whatever, but I’m sure people would love to be able to see that. I think a lot of people don’t have them just because they haven’t needed to. You know, another interesting thing for me at least, again, going back to I’m, I’m thinking of all states here in the states, that is not a normal aspect of the business.
Just like at a listing presentation, unless it was a come list me call from past client or sphere, a lot of times we’re going up against multiple agents and competing for that business, right at, at a listing presentation. Now, you guys probably haven’t had the, the, the, like, you’ve haven’t had to do that with a buyer, right?
Where a buyer isn’t saying, Hey, I’m interviewing three agents for the job of representing me as a buyer, and you are gonna be here at three o’clock. You’ll be here at four and you’ll be here at five. You know, tell me why I should use you. I think you might get to the point, at least I would do that because, so I just recently bought a car for my son and freaking drives me insane buying a car at a dealership.
And when I walked into the lot I. Some just random Joe Schmo that happens to be his turn, or her turn comes up to me and I had to work with him and I remember like asking him questions about the car and he like knew nothing about the car that I wanted to buy. And I was like, why am I working with you?
And it was like a horrible experience. And so I left and I, the next dealership I went to, I just called the sales manager, or I requested to speak to the sales manager and I said, this is what I want. This is what I’m looking for. And just gave ’em all my specs, what I’m willing to pay for the car. And they got me to a sales rep that knew exactly what I wanted, knew everything about the car, and that was a lot easier of a transaction.
So we might get there, right? We might get to where you are now going just like a listening presentation. You’re gonna go to a buyer presentation where you are being interviewed for the job of representing them in the purchase, especially if they have to actually dole out the cash to be able to have you represent them.
So how would you handle that? How would you handle. How would you prepare yourself differently going to an appointment where, you know, you’re one of three other or two other agents competing for the job of representing as a buyer? [00:36:00]
[00:36:01] Juanita Buskard: We do treat it almost like a listing appointment and we’re. Dave Ramsey, e l p agents.
So even on the buy side sometimes they are sitting down with three different agents that they’re assigned to three agents. And so we have compete on that side. So we do, I’ll see if I can put it up in there, but, but we have a packet that’s a lot like our seller packet that we have a whole printed. Nice quality brochure.
The first part of our brochures always starts with what’s important to them so that I teach my agents, don’t start telling them anything about you until you know what’s important to them. ’cause if you’re not catering that consultation to their needs, you haven’t really met their needs. But once you know what they don’t know and what they need and what’s important to them, then everything that we train you can tweak your verbiage to hit that.
We’ve got the, the flow chart in there. I’ll see if I can put these up. I’m not a super techie person for you guys, but sometimes I think you and I, we know so much about this stuff that we think it’s just like, even me, I, I joke that I could fall asleep ’cause I’m so sick of going through these stupid packets and consultations, but it’s not, they don’t know all this stuff.
Like it’s so elementary to us, but it really is valuable to them. And I think when you sit down with a buyer and you show them that they are valuable to you, that you wanna know what’s important to them and that you have a. Full laid out plan with printed materials. I’ve gone back where they’ve decided not to do anything and three years later they call me and they pull out the packet and they say, we need, I kept this ’cause this just seemed like it was important.
And so it, I think it really shows buyers that they are important to us and then they do wanna work with us. And like I said, we’ve had people who are like, I’ve been working with someone else for nine months, I didn’t know what the heck I was doing. And then a week later we have ’em pending in a contract.
And the difference was taking that time to educate ’em. I
[00:37:52] Janelle Rawlston: I just wanna say something real quick about buyers never let you know that they’re shopping other agents, but they always are. Mm-hmm. So instead of a seller calling you and saying, Hey, let’s sit down, you know, we’re interviewing agents, you just have to assume buyers are are shopping agents. You might not think of it that way, but they are.
[00:38:12] Nazar Kalayji: Yeah. What’s also interesting about that is that, again in the states that I’m used to, they do that behind your back, like you said, and you might get that call and be like, oh, hey, just wanna let you know we found a property, we’re in escrow. Thank you so much for your help.
And you’re like, what? And so, It’s a very frustrating conversation to have. So I’m excited actually for getting buyers tax or agents assigned buyer broker agreements in states. That is not a normal, common thing. Ray, what do you think if you’re, if you’re going to an appointment and you knew you were one of, you know, two other agents vying for the job of representing to, to sell their home or to help ’em buy a property, how would you show up differently?
[00:38:49] Ray Ellen: Well, I mean, we would show up the same. We do this now. So we are in a competitive environment because it’s likely because of our contracts. We, we have two different documents that an agent can use. One is a non-exclusive agreement, which is just like them saying, Hey, you can work with any agent in the marketplace.
It doesn’t matter. Whatever I show you, I wanna get credit for, and I’m gonna take whatever the seller gives me. That’s what the non-exclusive agreement does. However, that allows multiple agents to invoice that person once they close. So what the buyer sees is, oh, I can work with all these agents at the same time.
What they don’t realize is that yes, and then once you close, all of those agents can send you an invoice for their time. So we use an exclusive agreement, and the exclusive agreement means they have to use us, there’s no one else, and they’re also obligated to pay our fee. And because of that, and because we’re exclusive.
There are always, there’s always almost always another person that’s in the mix. The one that we met with yesterday, they said at the meeting, yeah, we’re interviewing several agents. They signed up with us and bought a house the same day, so we just kind of ignore that. They’re interviewing other agents.
We go through our process and it’s so thorough that by the end of it, We ask ’em, you know, well, the next step is to hire us. You know, does this, does this all sound great to you? And you’re like, yeah, it sounds great. Well, the next step is to hire us. Here’s that agreement we go through. The agreement that we’ve already told ’em is coming, they sign up and it’s over.
So I think the difference in buyers and sellers is that sellers will have a buyer. Or sellers will have an agent come to their home and they have appointments to come to their home. Buyers have appointment with agents either by the buyer going to the office or by the buyer going to the coffee shop. We, we work a ton of coffee shops, and so I think it’s easier for that buyer to cancel those appointments than it is for a listing agent or a listing, a, a, a seller.
To cancel appointments for a listing agent. So whenever we’re working with buyers, we know they’re interviewing multiples. They almost always tell us they’re interviewing multiples. I give them a sheet of paper that is a list of questions that they should ask real estate agents, and I basically interview myself in front of them.
Then we interview them. We ask them about everything they’re looking for their criteria. I tell ’em that anyone in the market can show them bedrooms, bathrooms, square footage. So that’s the least important thing they can tell me. I wanna know how they want to live in their home. And we ask ’em questions like, you know, tell me about the home that you’re currently living in.
What do you love most about it? We go through all the way, like, what’s your dream home look like? If you were to close your eyes and see your dream home, what is it? And they’re like, well, our next home is not our dream home. Well, we know, but sometimes. There’s an element of your dream home in the next house, and it’s fun for us to find it, so let’s just play.
But that it gets ’em to open up to us by the end of it. They’ve been talking most of the way through it. And then we have a brief, like 15 minute thing where we say, okay, so here’s what happens once you go under contract. But it’s very conversational. It’s very, you know, us asking them questions and them telling us, and us saying, yes, we could do that for you, or them telling us something that’s a totally unrealistic expectation and we have to clarify that for them.
So it’s, it’s. By the end of the deal, like 99% of the people [00:42:00] just sign up with us. It’s very, very rare that someone says, I don’t wanna sign up with you. And I think that’s because if they are interviewing multiple agents, they’ve never seen anything like we just showed them. They’ve never seen anyone talk about our approach to off market properties or talk about our approach to negotiations because I’ve spent 17 years coming up with a unique value proposition and I know what’s out there.
So if you know what the other agents in the marketplace are doing, then just spend some time thinking, okay, what, what makes me unique in every aspect of the process? From showing houses to finding off market properties, to negotiating contracts. Sorry, I got a kiddo losing their mind to so, you know, all, every step of the process, just go through each one of those steps and figure out what can you uniquely do that no one else in your marketplace can do that could be of value for that client, and then put that in your presentation.
The trick is, You have to perform. So once you go under contract with them, you gotta pull that off. And so don’t make promises you can’t keep in it, but that’s the way we developed our presentation and we have very good luck closing it.
[00:43:00] Nazar Kalayji: That’s awesome. You know, I I, I think it’s interesting in a marketplace where it’s common for buyers to sign buyer broker agreements where then, then it’s just, you know, you explain your value proposition, I think in, in markets.
Currently where buyer broker agreements are not normal. Or if I come up to you and I say, Hey, I want you to show me this house. You’re like, oh, well first, let me tell you about all these things. And by the way, I need you to sign a commitment that you can work with me. And if you. Find a home that you’re gonna pay me.
If the buyer or the seller doesn’t offer that compensation to me and they’re like okay thank you. I’ll call you back. And they’ll just go to some other schmuck that will just show ’em the property without signing anything. I think it’s gonna be harder for those people to like get people to get them to sign broker agreements, but it’s coming.
Right? So it’s better to be able to practice Oh, get in the habit of it, knowing how it is so that when everybody and their mom has to do it then you know you’re gonna be a lot more better prepared than you would otherwise. Does anybody have any of the last questions or do you guys have any other last statements or, or
[00:43:57] Kristina Kendig: I have one last question. Yeah. Oh my gosh, echo. Sorry. How easy is it for the buyer? Like let’s say that you’re not performing or they don’t feel like you’re performing on your end. How easy is it for them to cancel that contract and how many times have you guys been fired, if at all?
[00:44:14] Ray Ellen: I make it super easy. I tell them I want a text or an email and it’s canceled.
There’s no cancellation fee. It’s canceled at that minute that they send it to me. So I want them out easy. And you know, that that also kinda holds us to a certain standard of trying to be a performer every day for them, you know? ’cause if we know that they can get out so quickly. There’s not, there is expense that we have on the buyer’s side.
There’s gas, we do marketing, we do door knocking. So we, you know, we do have expenses on the buyer’s side, but we usually, having a buyer helps us turn a couple of listings too. So it’s okay if they get out and we’ve been working with them for a while. It’s very rare that someone cancels with us because where are they gonna go?
Like, like there’s no one else in the marketplace that even touches our level of service. So it, it would really take something special for them to leave us. I did have a situation in which someone’s aunt was mad because we weren’t using, they weren’t using her and they were getting a lot of flack from the whole family for using us, and they had found a home they loved.
So we just agreed to pay the aunt a referral fee. And that kind of, They said, yeah, we’ll just do that. And it was a little bit higher than average referral fee. Usually we do 25, I think we did 35 to her because, you know, they wanted to make her happy and she took it and everyone was happy after that. So, but we really haven’t had that many people cancel.
[00:45:29] Juanita Buskard: Usually if we come to that You wanna, oh, go ahead. Sorry. Go ahead Janelle. Sorry.
[00:45:33] Janelle Rawlston: I was just gonna say, we do the same. If anybody wants to cancel their buyer rep agreement with us, we just ask them to send us something in writing and to say, you know, Hey, we’re done. It’s over. Whatever the direction is, it’s not right for them and it’s not right for us, and, and we’re not a fit for whatever they have in mind.
It’s happened rarely, most of the time for us it happens because, The buyer decides to step away from the market for a while. Hey, we’re, we’re out. We’re not buying now. We’ve decided to wait. We’re gonna stay in our current home for the next year or two. You know, we’ll get back in touch with you. And whether that’s true or not, you know, it just isn’t the right fit.
And there’s, we just next, you know, we’ve gotta find the right people that wanna work with us, that are a fit.
[00:46:17] Juanita Buskard: As the broker, I, I usually try to have a conversation myself with the people if it’s one of my agents and sometimes I’m able to switch them over to a different agent that maybe is a better personality fit for them.
For us, most of the time, if someone wants to leave, we usually wanted them to leave before they wanted to leave, if you know what I’m saying. And so you’re like, that sounds like a good idea, but it, it’s pretty rare. Like Ray said, if you’re doing, if you’re really doing your due diligence, it, it’s not that common.
[00:46:47] Nazar Kalayji: Yeah, I I, I think it’s interesting that. It helps us step up or gain, right? If you’re making a commitment to them and you’re expecting them to make a commitment, then you gotta step up and and actually deliver on that value. Same with the listing, honestly. Right? If you’re dealing with the seller. So, awesome.
Well, you guys, thank you so much for taking time to be able to be on here and kind of sharing with us what you guys do and, and I think that’s great. I think we could all get some good value out of this and, and ultimately, This is what needs to happen. I mean, you would never go to an attorney and say, Hey, help me, you know, do this without them like signing something or making you sign something that’s gonna help you or help them represent you.
So it it, it is what it is. So I’m, I’m, I’m glad it’s coming down the pike for everybody and I’m glad that you guys have a leg up and, and being able to do this ’cause it’s, you know, it’s just a smart thing to do. Alright guys, well thank you so much for your time. Hopefully you guys found value otherwise we’ll see you guys next week.
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