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Chapter One - Objectives
• Evolution of buyer agency• How buyers benefit• Duties of a fiduciary agent• Creating the relationship• Define agency options
Buyers Who Must Be Represented• Agent purchasing for own
account
• Buyers who want to remain anonymous
Buyers Who Should Be Represented
• Current seller clients• Former clients• First-time buyers• Out-of-town or relo
buyers• Close friends
Regulations
• Common law of agency created confusion
• Laws passed to clarify role of buyer agent
• Abrogation of common law• States dictate disclosure and
contract requirements
Risk Management
• Licensees must know common law of agency and state statutes that address buyer representation
Fiduciary Agency
• Obedience• Loyalty• Disclosure• Confidentiality• Accounting• Reasonable Care and
Diligence
Risk Management
• Agent should avoid exaggeration, misrepresentation, concealment of pertinent facts
• Agent should recommend use of outside professionals
Vicarious Liability
• Principal may be responsible for, and may be bound by, the actions of his or her agent
Creating Agency Relationships • Oral agency
– verbal agreement
• Implied agency – words and actions of the parties
• Written or Contractual – documented in an agreement
between the parties
Contracts in Writing
• Required by some states
• Required by NAR code of ethics Article 9
• Reduces risk for agent
Termination of Agency
• Completion of task• Agreement expires• Mutual agreement to terminate• Death of one of the parties
Termination of Agency
• Broker files bankruptcy• Death or insanity of principal or
agent• Actions of agent warrant
cancellation by principal
Statutory Agency
• State law replaces common law as basis for agent – principal relationship
• Duties may vary from state to state
Chapter Two – Objectives
• Understand reluctance to enter into an agreement
• Respond to buyers questions• Determine service option• Describe consultation meeting
Starting Out
• Key Terms• Reasons some purchasers are
reluctant to enter into representation agreements
Service Options in Office Policy• Multiple buyer clients• Agreements• Services for self- represented
buyers
Buyer Consultation Meeting• Should follow an agenda• Check for existing buyer-agency
agreements• Prepare interview questions
Sample Meeting Agenda
• Confirm basic data• Introduce concept• Elicit wants and needs• Identify features they desire
Sample Meeting Agenda
• Identify urgency and barriers• Review financing issues• Identify actions that you and
buyer are going to take
Responding to Buyer Questions• Agent must be confident• Avoid confronting buyer• Focus on buyer’s concerns• Buyers must be comfortable with
commitment
Chapter Three – Objectives• Identify components• Explain compensation options• Describe types of fees• Discuss areas to be negotiated• Understand importance of a
signed agreement
Discussing the Agreement
• Buyer disclosure• Purpose of the
agreement• Broker’s duties• Buyer’s commitments• Compensation
Discussing the Agreement
• Start and end dates• Disclosed dual or designated
representation (if applicable)• Equal opportunity clause• Multiple-buyer clients
Compensation Options
• Contingent fee• Non-contingent fee• Buyers are reluctant to accept
obligation to compensate agent• Listing broker often shares
fee with buyer agent
Methods of Paying Fee
• Fee due from buyer at closing• Receipt of funds from a third
party• Acceptable fee range • Retainer fee• Hourly rate
Determining Compensation• % of sales price• Flat fee• Hourly rate• Cooperative fee credited to
buyer
Self Represented Sellers
• Inform client that property is not listed
• No fee available from another agent
• Buyer must decide whether to pay agent directly or to include in offered price
• Agent must inform seller
Retainer Fees
• Amount must be the same for all clients
• Refundable• Creditable• Stated in representation
agreement
Presenting Buyer Agreement• Buyers are often concerned
about selecting the wrong agent• Issue of exclusivity is best
resolved by creating a strong relationship during consultation meeting
Presenting Buyer Agreement• Exclusivity• Fees• Fair housing issues• Multiple-buyer clients• Limitations to representation
Negotiating the Buyer Agreement • Length of term• Exclusivity• Compensation issues• Shared representation issues• Termination options
Chapter Four - Objectives
• Showing properties• Duties after property is selected• Preparing the buyers’ offer• Responding to counteroffers
Chapter Four - Objectives
• Ancillary services• Critical issues• Resolving conflicts• Effective
communications
Mutual Task List – Agent
• MLS, newspaper, and Internet search
• Preview properties and schedule showings
• Place ‘searching for’ ad in local newspaper
Mutual Task List – Purchasers• Apply with lender• Confirm ability to extend lease,
if necessary• Gather documents for loan
application
Property Research
• Locating properties• Showing properties• Narrowing the search• Controlling emotions
Property Research
• Determining property condition• Providing pricing assistance• Performing resale analysis• Uncovering use restrictions
Creating and Negotiating the Agreement
• Disclose what you know about seller
• Establish priorities• Advocate for buyer (unless in
dual agency)
Creating and Negotiatingthe Agreement
• Creating reasonable offers
• Adding contingencies• Presenting the offer• Handling counteroffers
From Contract to Closing
• Property inspection and re-negotiation, if required
• Environmental inspections• Appraisal contingencies• Survey
From Contract to Closing
• Termite, infestation, or moisture inspections
• Title inspection • Eliminating contingencies• Final walk through
Client-Care Program
• Help them handle paperwork• Spell out client obligations and
timeline• Establish communication system• Pre-closing review • Turn closing into a celebration
Closing the Property
• Resolve walk-through issues• Review HUD-1• Identify post-closing tasks • Thank clients, other agents,
and the seller
Beyond Closing
• Visit client 30 – 60 days after closing– ‘See what you’ve done to the
property’– ‘Here is a gift for you’– ‘Do you know anyone else who
might benefit from my services?’
Chapter Five - Objectives
• Generate buyer leads• Develop effective marketing
message• Conduct effective buyer
seminars• Survey clients
Let’s Get Started
• Key terms
• Success requires discipline– Prospecting– Quality service– Obtaining feedback– Adjusting service
delivery
Generating Opportunities
• Receiving referrals • Converting incoming buyer calls• Conducting buying seminars
Buyer Seminars
• One of the most effective tools• Schedule on a 12 month basis• By written invitation• Written thank you notes and
mail the day after
Effective Marketing Plan
• Define your vision• Create the plan
– What do you want to say?
– What benefits do you offer?
– What is your message?
Differing Purposes for Marketing• Awareness or Corporate• Targeting specific buyers• Performance testimonials,
statistics etc.• Prospecting
Marketing Mistakes to Avoid• Copycat marketing• Confrontational marketing• Promising more than you can
deliver• Failing to convey value• Underestimating the
cost and effort
Generating Referrals
• Past buyer clients• Must have a plan• Discuss at initial consultation• 75% of business should come
from past client referrals
Client Feedback
• Every transaction should be surveyed
• Conveys message that agent cares about service
• Different buyers require different service plans
• Written or oral• External company is best
Chapter Six - Objectives
• Using technology to locate potential clients
• Using technology to analyze market for them
• Providing client-level communication
Farming for Clients
• Primary activity for all buyer agents
• Use Windows-based database software
• Pre-designed templates • Consider purchasing data lists
Farming for Clients
• Gather e-mail addresses• Permission-based marketing is
best• Consistency is critical• Professional should create
Analyzing the Market
• Maintain data base of contacts to match with properties
• Use market analysis software that downloads from MLS systems
• Use MLS systems for reverse prospecting
Analyzing the Market
• Maintain profiles of clients’ needs and desires
• Cross-match new listings to internal database
Meeting Clients’ Needs
• Selecting community• Data bases from government
sources• Geodata sources display
maps • Agent should have ability to
access Internet everywhere
Maintaining Profitability
• Regular training and reinvestment
• Personal tech trainer • Train in small increments
followed by continuous practice
• Be patient