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This article was last updated April 24, 2024.
Editor’s note: On April 23, 2024, the judge in the Sitzer | Burnett case granted preliminary approval to the National Association of Realtors’ proposed settlement and set a final approval hearing for November. Rule changes are expected to go into effect beginning in July.
There is no question that scripts are effective at producing a result. Whether we know it or not, we use scripts to respond to almost every situation in life. The problem is that most “scripts” happen automatically without any thought or pre-planning and can have the opposite effect to the response we are hoping for.
Just imagine, for a moment, what is said when a child spills their milk. The next few seconds are critical: Will what is said by the parent bring peace to the situation and calmly resolve the crisis or will the words spoken produce tension and even shame?
Nurturing parents have taken the time before a crisis happens to think through effective responses. They may have even rehearsed them so that when the milk hits the floor, they automatically respond with grace instead of anger and frustration.
With all of the lawsuits milling around us, the latest intervention from the DOJ and the NAR settlement awaiting final approval, it is clear we need to change our approach to working with buyers. While I cannot speak for the rest of the country, I do know with certainty that the number of agents in our California market that have used buyer representation agreements in the past has been negligible.
In the case of our own team, we had developed a proprietary agreement that laid out what we would provide for a buyer in return for what we expected from them. It did not, however, deal with commissions and had no teeth should the buyer decide, for any reason, to buy using someone else as their agent. Even then, we were one of the very few that had their buyers sign anything at all.
Things have changed, and a significant majority of brokerages are now demanding that their agents use standardized buyer agreements. In California, this is called the Buyer Representation and Broker Compensation Agreement (C.A.R. Form BRBC, 12/22).
As with any new practice, there is a lot of confusion on behalf of Realtors about how to implement the use of these agreements. There is also a good deal of confusion on behalf of buyers.
One of the things we have learned over the years is that buyers do not just talk to their agent about buying a home. They discuss every facet of the process with family, friends, workmates and so on.
In fact, real estate seems to be one of the arenas where more credence is given to the opinions of others than the agents themselves. Since most buyers in our area have never had to sign a representation agreement of any kind, new buyers are questioning why, all of a sudden, they are now being required to do so.
Why use scripts?
Effective Realtors use scripts. Whether conscious or otherwise, seasoned agents have developed responses to specific client questions and situations. Whether officially scripted or not, they know what to say.
With this in mind, there is now a need for scripts dealing with how to respond to buyer questions and concerns about buyer representation agreements, especially since commission conversations going forward are morphing into a new reality.
The following scripts are now being used by some California-based agents. As practices and regulations vary from state to state, these are to serve as an example only and should be tailored to fit a specific locale. As an example, dual agency is allowed in California, but not in some other states.
Why do I have to sign an exclusive agreement to work with just you?
“I am committed to spending a significant amount of time and expertise to represent you as a real estate professional and help you achieve your real estate dreams. I cannot make that commitment to you unless I know that we have an exclusive mutual agreement to work together. Like all professionals — attorneys, accountants — even your auto mechanic — we require a signed agreement before we can begin.”
What if I want to work with another Realtor at the same time?
“It’s like being married – you can only be married to one person at a time. A buyer agreement is now required by brokers in our area — any other buyer’s agent you may want to work with is going to ask for an exclusive agreement as well.”
I really don’t feel comfortable signing an agreement like this.
“I’ve discovered that if someone is uncertain about signing this agreement, it usually means either I haven’t answered their questions to their satisfaction or there is something they haven’t told me. Is there something that concerns you that I haven’t covered today?”
What if I just want to work with the listing agent? (in states allowing dual agency)
“First of all, our team is highly trained and has extensive experience representing buyers. If you are looking to hire the best representation possible, you are rolling the dice by considering working with a listing agent you do not know and whose track record with buyers is uncertain.
Real estate transactions are full of land mines — the listing agent is there to represent the seller – so if you run into difficulties, it will not come down in your favor. Our goal is to prepare offers so they represent your goals, negotiate the best terms on your behalf, prepare all the necessary legal documentation and even help you get out of the transaction if something goes wrong.
If you think you will get all we offer by going to the listing agent, you are mistaken. The listing agent is legally and contractually bound to the seller. Let’s say the house you are buying is one million dollars – that is a lot of liability. If for some reason something goes wrong and you need to go to court, would you and the seller use the same attorney?
Buyer: [RESPONDS]
If that is the case, can you see that using the same real estate agent as the seller is clearly not in your best interest? Many listing agents like working with both the buyer and the seller because they get more commission — that is an obvious conflict of interest. Do you agree?”
What if I want out?
“If at any time you are unhappy with the service I am providing, all I ask is that you give me 10 days to correct things to your satisfaction. If, after that time you are still not satisfied, I will immediately release you from the agreement, up until we have a signed purchase agreement with a seller.”
What if I do not want a lengthy contract?
“We are happy to sign an agreement with you for a time frame that works for you.”
What if the seller does not pay any commission? Am I obliged to pay the commission?
“As a real estate professional, I have a set fee structure. In the event you wish to see a home where the compensation offered is less than my fee, I will alert you before we view the home that the compensation being offered is either low or none. I will then explain what your options are and ask you how you would like to proceed.
First, if you choose to write an offer, I will do my best to negotiate with the seller to have them cover my fee in its entirety.
In the event the seller refuses to negotiate, I will come back to you and ask how you would like to proceed. If you still wish to purchase that home, in that case, you would be responsible for paying my fee.
If the compensation paid by the seller ends up being less than my fee, then, if you still wish to buy the home, you would pay me the difference.”
After you have dealt with their objections, all that is left is the close:
“After our discussion today, and based on what I’ve committed to, do you feel comfortable and confident that I am the agent to represent you?
If so, let’s go ahead and get the agreement signed so I can begin to work for you. And, just remember, if you do not feel this is going the way you like, then you can fire me and we can go our separate ways.”
If they disagree and do not wish to sign, then you say:
“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.”
In the event they do not wish to sign, leave the door open for them to return. Chances are the next agent they talk to is going to ask them to sign an agreement as well, causing them to rethink the process and potentially come back to you.
We are entering a new world, one that we should have entered years ago, but are transitioning to now whether we like it or not. In response, Debbie De Grote, co-founder and CEO of Forward Coaching states, “Agents need to upgrade and improve their entire buyer process, everything from the services they offer, conducting a powerful consultation and asking for the exclusive commitment.”
Carl Medford is the CEO of The Medford Team.
