William French is founder of St. Louis--based Wm. French Buyer's Real Estate Services, an exclusive buyer agency that had sales of $50 million in 1995. You can reach him at 314/469-2220.
Yes, Buyer's Agents and Traditional Salespeople Can Work Together
July 1, 1996
Let's face it, there's still a them-against-us mentality in the agency arena. Although industry pundits and state legislatures wrangle over procedures and legalities, proponents of all forms of agency should retreat from their confrontational postures and refocus on the business at hand---serving the client.
Having worked with buyers exclusively for 20 years, I've observed that a major stumbling block to successful negotiation is the adversarial attitude many salespeople bring to the bargaining table. Traditional and buyer's agents are inclined to perceive each other as the enemy simply because they represent different approaches. But it doesn't have to be that way.
Over the years, my company and our attorneys have modified standard forms and contracts to strengthen our clients' stance in any transaction. For instance, we'll let buyers out of a contract if defects are discovered in the home inspection and the buyers don't want to wait to see them fixed. Understandably, traditional companies and builders are resistant to these addenda.
Recently, my company represented a buyer considering a property listed with a company antagonistic to buyer agency. The listing salesperson advised the seller to reject our contract because of an addendum. The buyer then submitted an offer on a home listed with another company. The second listing salesperson never lost sight of the objective---serving his client. After some give-and-take, both sides finalized the transaction with the addendum intact.
Another successful negotiation involved a homebuilder. In general, builders would prefer to see any outside salesperson removed from the negotiating loop, since that diminishes their control of the purchase, and the site sales consultant must share the commission with the buyer's agent. In fact, some builders view buyer agency as a threat because the salesperson isn't there to deliver clients but to represent them proactively.
After repeated conflict with our salespeople over the addendum, the builder's representatives sat down with our attorney and worked with us to develop a modified addendum acceptable to both sides. The builder agreed to a solid definition of the time frame within which construction would be completed. In return, we agreed to allow for possible extensions due to circumstances beyond the builder's control, such as weather, strikes, and material availability.
The upshot is that future buyers are now the beneficiaries. They can opt for our standard addendum or the modified addendum, which the builder will accept.
When buyer agency is involved, procuring cause can be another confusing arena. Some buyer's agents don't really practice buyer agency. Instead, they behave more like subagents, simply delivering the customer and waiting for the commission to arrive. For instance, one of our salespeople took a couple to a new-home community and showed them an inventory model that they purchased. The couple had previously terminated a relationship with a subagent who'd taken them to the same community but hadn't shown them the home they bought.
Nonetheless, the other salesperson's office manager called demanding a portion of the commission. I refused because procuring cause wasn't applicable here. If the subagent had an argument about procuring cause, it should have been directed to the listing salesperson. We didn't hear from the manager again. Until real estate associations define who's entitled to commissions under the guidelines of buyer agency, the salespeople who negotiate the contracts should receive the commissions, in my opinion.
But what's key to success for any practitioner is learning to negotiate effectively, adopting an assertive but flexible attitude, and, above all, keeping in mind that agency is a service that leads to the ultimate goal: client satisfaction.
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Updated: November 30, 2020