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How to justify your commission with a Buyer Bill of Rights

As the real estate landscape changes thanks to commission-related lawsuits, Carl Medford writes, pressure is being levied on buyer agents to demonstrate their value to potential clients.



While the listing process has been well-defined for years, the experience buyers receive has been a bit more ephemeral. Sellers can see tangible efforts made by their listing agent, including improvements to make the home more saleable, online pictures, brochures, a sign in their yard, open houses, and more.


Buyers, on the other hand, other than tours of homes, can be left wondering what their agent actually does. As some sellers are now refusing to offer a commission to the buyer’s agent, those agents, if they wish to receive compensation for their representation, need to be able to demonstrate their value tangibly.


Called a value proposition, the goal is not to convey how great you might be as an agent but to communicate, very specifically, how you will meet the client’s perceived needs. At its most basic, “a value proposition is a simple statement that summarizes why a customer would choose your product or service. It communicates the clearest benefit that customers receive by giving you their business” and has four key components:


  • A focus on needs: Start by identifying the core issues potential clients will face when buying or selling a home.

  • A clear and specific roadmap: Follow up by identifying how your services will address your client’s anticipated issues.

  • A list of benefits: Continue by explaining how your services are unique and how you will save your clients time, effort, and money.

  • A risk-free commitment: Conclude with specific ways your clients are protected when working with you. Examples could include an “easy out” policy whereby they can cancel their representation agreement or a guarantee to resell their home for free within a specific period if they are unhappy with their purchase.

The following is an example of what one California-based real estate team is providing to their buying clients to demonstrate their value. It is given to potential buyers during their initial consultation and is explained in detail so the clients fully understand all their agent will do for them.


After a careful review, buyers are then asked to sign the California Buyer Representation and Broker Compensation Agreement. Please keep in mind that rules vary from state to state, and what is contained below, while a suggestion of what could be used nationwide, is specific to California.


This is certainly not a comprehensive list but provides a good outline for the level of service you will provide, which in turn justifies the fact that you deserve a commission. Items could be added or subtracted based on your personal or team’s programming and benefits.


Additionally, this value proposition clarifies what the Realtor expects from buyers:

Time is provided for buyers to ask any relevant questions. Once the value being offered by the Realtor is understood, they are then asked to sign the Representation Agreement to formalize their working relationship.


If for some reason the potential clients do not wish to sign, they are told, “OK, I can respect that. It means we will not be able to work together, but I wish you all the best. If, at some point, you change your mind, then please feel free to come back; we would love the opportunity to work with you.”


As the real estate landscape continues to morph, so will client expectations. To demonstrate your value and stand out from the rest of the pack, take time to develop a Buyer Bill of Rights specific to your business model, print it out, go over it in detail with your buyers, have them sign your agreement, and then head out to fulfill their real estate dreams.


By Carl Medford


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