Buyer's agents are using several strategies to coax contract-shy buyers into agreements, but most still rely on the soft-sell. There are always agents down the street who are willing to cart buyers around to view homes without getting an agreement. That makes it harder for agents who make their livings working with buyers, but that only encourages them to work smarter.

The Three-home rule

"I soft-sell with limitations," says Florida Realtor Maria Ojeda. "I feel that my market is so competitive that I really don't have a choice. I'd love to get all buyers under contract from the first meeting, but it just doesn't work that way in South Florida, that I know of."

According to Ojeda, a first-year agent, it's easy to get burned by buyers. "I would spend countless days driving folks around showing them properties only to have them bypass me by dealing either with the selling agent directly or the seller," recalls Ojeda. "In one case, I must have shown at least 25 properties to a couple. They had very specific demands. I found them properties within those parameters, and they would refuse to see any others that did not meet all of their criteria. One day they called me and told me that they had made an offer directly to a selling agent and they would no longer be in need of my services. The property that they purchased did not meet all the criteria that they were so insistent with me to meet."

Ojeda says she learned her lesson. "I continue to get very specific information from buyers as to what they want," explains Ojeda. "I then show them three properties that best meet those criteria. If they want to see more properties than that, I have them sign a buyer's agreement. Otherwise I will not work with them. In this business, time really is money, and I have none of either to waste!"

Why the magic number - three houses?

"Mainly because of the competitive market here in South Florida," says Ojeda. "If I insist upon a buyer's contract from the get-go, most potential buyers will walk away and go to the guy next door who is most likely willing to show them homes without a contract.

"We also have a market where many folks have no idea as to what they really want or better yet, what they can afford," she continues. "When they walk into our office, few potential buyers have gotten prequalified for a mortgage. So in initial meetings I sort of play the role of real estate "guidance counselor". I personally have chosen to show three properties without a contract so that if I happen upon a serious buyer, they will develop a taste for the high quality of service that I offer, and with any luck...they'll sign on. Basically, I not only tell them that I am willing to work hard in return for their loyalty (i.e. buyer's contract) but I show them."

The closing cost rebate approach

Arkansas Realtor Warren J. Hagen, says, "Before I work with a buyer, they must be preapproved by a lender, be ready to buy now, sign my buyer's agency contract that gives me the exclusive right to represent them in buying a home for a period of a minimum of two weeks, or a maximum of one month. My contract also stipulates that any home I show them or even bring to their attention, can't be bought by them for 180 days after the contract expires without paying me a commission."

Hagan says that buyer's agency contracts should also include FSBOs.

"They could buy a FSBO that I haven't shown them after the contract has expired without paying me a commission, but this has never happened," says Hagan. "I always tell them I can negotiate with a FSBO much better then they ever could because of my experience, and I have ways to prove this to them."

Do buyers get on board right away?

"If they want to just look at homes I offer what I call a two-day tour for a nonrefundable retainer of $350," says Hagan. "This way they don't have to sign a contract or be preapproved for a loan. If they do buy a home through my company, I will pay $350 of their closing costs at closing. If they don't, at least I have my expenses covered."

Hagan admits that so far, only one buyer has agreed to pay the $350 up front, but the notion that his time isn't free still gets across to other buyers.

"I have had several buyers that wouldn't pay the $350, but came back to my office when they were pre-approved, and ready to buy," says Hagan. "Some even looked at homes with other agents. From what they told me, none of the other agents asked them to sign any kind of contract, and none said anything about agency. I know other agents don't work like me, that's why buyers who take the time to be informed come to me.

"I am not a 'pop tart,' one who pops up every time somebody wants to see a property, no questions asked. I am a professional, and I want to make sure any buyer I work with is ready, able, and willing to buy now," he explains. "Listing agents know when I bring them an offer, their listing is sold if accepted, subject only to a satisfactory home inspection, and survey."

The logical assumption

"Logic is our best way to soft-sell exclusive buyer representation," says Ohio Realtor Andrew Show. "We take a low-key approach. What are your best choices? A traditional designated agent may be a good choice, but they may not be the best choice."

Show says he has two analogies that he uses to get buyers to commit to exclusive buyer's agency - the lawsuit analogy and the sports competitor analogy. He uses these analogies to explain what he calls the sham of designated and dual agency.

"I ask the consumer, 'If you were sued and had to go to court, would you use the attorney who is representing the person who is suing you to represent you?'" says Show. "Then when you get the response, 'No, I'd get my own attorney,' I ask, 'Would you use a different attorney in the same law firm as the attorney who is suing you?'

The sports analogy he uses to underscore that the buyer and sellers are, in fact, competitors.

"Take any local rivalry like the Ohio State Buckeyes and the Michigan Wolverines, or Texas and OU," says Show. "Let's say you let the coaching staff from the Buckeyes take a vacation, and the head coach of the Wolverines agrees to let half his coaching staff coach the Buckeyes and half coach the Wolverines before the big game. Will the Buckeyes get fair coaching?"

"That is what happens when you claim to be a designated agent," explains Show. "Your broker is the head coach so you've got opposing sides, you don't have to be adversarial, but your positions are adverse because the seller wants to sell for the most and the buyer wants to buy for the least."

Show seals the deal with this question, 'You realize that the seller has a written contract representing them, do you understand that? Don't you feel that you should have the same representation that the seller has?'

Published: September 12, 2002

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