So, I get the call on Thursday...an excited investor that found me (of all places) on ActiveRain. The investor is pre-approved, and unlike many calls I've been receiving from graduates of some awful "investor class" they are actually looking to take title to properties rather than wholesale, and start a portfolio of rental properties. We discuss some strategies, and decide to meet on Sunday.
I set up eight showings on some rather distressed properties requiring total rehab. The investors gladly watched as I unboarded home after home with my screw-gun so that they could take a look. The second to last one of the day was a winner, they asked me how we would go about writing an offer. I explained the process, and notified them that there were special bank addendums that would be required, and that I would obtain them from the listing agent.
Of course, that morning when we met, I provided the buyers with "Understanding whom Agents Represent" and with a copy of my buyer broker agreement.
So, after 45 minutes or so on the initial phone call, 30 min setting up appointments, and five hours away from my beautiful wife and child on a Sunday morning...you all know what's coming.
The investor is not comfortable signing a buyer broker agreement. They have located an agent who will work without one. They wrote an offer on the property with that agent.
Now, really, this was a very small sale, and a very small commission, but we have worked long term with some investors in Baltimore City who have bought multiple properties through us, and I am all about building the long-term relationships. I realize that we all "waste" a few hours here and there with buyers that end up going elsewhere, and that my tiny payday on this sale is hardly worth crying over, but I realized something this time around. The general public has a really poor understanding of how our industry works. Occasionally, someone will get enough information to be dangerous, and really miss the forest for the trees.
I explained to these folks that my exclusive agency agreement is pretty buyer friendly. They can cancel the agreement at any time if they are not happy with my work, and 14days later, they are free to work with whomever they wish. Of course, I am entitled to comission, should they purchase anything that I had showed to them (for a period of three months after the agreement is ended). Yet, they don't really listen to that...all they hear is "I am commited to working with this person only..."
We generally try to have a "sit down" meeting with anyone before we will take them out to view properties but occasionally people will balk at that idea, and I realize that it's a gamble if we decide to meet with them anyway, but I have a few questions for the group:
1) what is it about our industry that gives the public the perception that they can abuse our time and take advantage of us?
2) what are some ways that we can further limit our risk?
In the end, when I look at the big picture, this is all for the best...I don't really believe that these particular investors are experienced, motivated, intelligent or realistic enough to really build a portfolio that would be an important part of our business. They were seemingly incredibly naive about costs of renovation and what kind of work it would entail to manage a portfolio of rental properties in Baltimore City. I did my best to share my knowledge with them (free of charge) whilst risking life and limb to show them $20k shells...but again, they obviously had their own information and ideas from another source.
I'm really not sure why they would have jumped to another agent, after seeing the homes with you! Doesn't seem fair - will be interested in seeing the other responses. Sounds like you did everything exactly right.
Yes, we've all had it done to us at one time or another. I had someone call me and after we spoke a few minutes actually told me he was working with other agents, I nicely told him that imho its unethical for me to continue or begin to work with him - he started arguing with me - lol, I wasn't going that route, I wished him well and hung up - I am sure you are better off in the long run.
Hang in there!!!!
It is sad that people do not understand or do not care that we get paid based off of a commission but the ones that do understand are the people we will all work with and have a successful closing upon going into contract.
Brendan - I generally amend by "Buyer Agency" agreements for investors to include the properties I am showing them that day. Most investors have multiple sources that they rely on , so protecting yourself and the properties you showed them is the best you can do.
This way I am protected , and if they buy another property with someone else that I didn't show them , thats fair.
It really is no different than a Seller who "fires" the listing agent because the seller did not listen to advise given to them in regards to pricing or preparing their home for the current market.
We do tend to get used and abused from both sides , always remember we have the right to fire them , or refuse to show them property first
Laura
Brendan,
I will probably get a lot of flak over my comment, but here goes anyway...
1. The Realtors out there who are available 24/7, 7 days a week give the impression that our time is NOT valuable. If we would all set some basic groundrules with our clients, I think we'd all be better off. Being upfront about what a client can expect from you, the professional, helps set the tone for the long-term relationship.
And its not exactly a secret that the real estate industry has taken a hit over the last couple of years. From reading lots of posts here on AR, the general public seems to think we have nothing better to do right now than spin our wheels showing property to "buyers" who have no intention of buying. They clearly don't understand or don't care that they're taking advantage of us.
As you said, we can sit down with clients and give them some education, explain the process, etc. Sometimes that makes the difference but not always.
2. So how do we protect ourselves? My thought is that we take back control over our lives and our business! Don't show property until you have a buyer's agency agreement signed. Don't schedule appointments during the time you have set aside to spend with your family. Don't answer the phone after hours (whatever hours you set.)
I believe clients will respect us more if we respect ourselves first.
Thanks for letting me have my say...and better luck next time!
Amy
Hi Brendan,
Sorry that has happened to you. Unfortunately many realtors/agents are so excited about a commission, that they do not take time to even inquire if a buyer or a seller are currently working with another realtor/agent. I share the same views as Colleen, Amy and Laura on this issue, and I believe that if we start standing up for each other and not allowing the general public to go from agent to agent they will start to somehow understand. I always ask if they have an agent. If they say that they do, I ask for proof of some form showing that either they or their agent have decided to terminate their agreement. On the other hand, if there is no agreement (most of them will say they didn't sign anything) I explain to them the problems with procuring cause and ask that they send a certified letter to their agent terminating their relationship, just to be safe. I even offer to pay for the postage. I have been criticized by others for this process, however I can truly say that in all my years of practicing real estate, I have never had a case brought against me for procuring cause.
Lillie,
The first thing that I ALWAYS ask whenever someone calls is whether or not they are working with a realtor. It boggles my mind how many people ARE working with realtors and unabashedly say so...why then is their realtor not doing their job? In any case, I was told in no uncertain terms that they were not working with anyone...Again, I know that this scenario has happened to everyone, and we definately have had our share of disappointments, but I want to try my best to not let a few "bad eggs" ruin a great time in our business. We have never been busier!
I've had agents who get one of my referals have them sign a one day agreement. If at the end of the day they aren't happy with the relationship then they can cancel and are only "on the hook" if they decide to buy a property they were show that day. It seems to work and break the ice.
Hi Brendan,
I"M SORRY if it seemed as if I was implying that you did not ask. I was not. I was only stating that OTHER AGENTS DON'T bother to ASK, and if WE as realtors STICK TOGETHER the general public would be more less inclined to go from realtor to realtor!