Leap of Faith, Risks for Both Parties

No, it’s not “Buyer Rep Contract” week on this blog, and this isn’t going to turn into a serial installment.

It’s just that the subject is so seldom discussed, and such a fertile topic.

So here’s the last thought (to go with my earlier posts, “Real Estate Representation Contracts” and “Parachuting and Buyer Rep Contracts“):

Signing a Rep Contract does represent a risk — and a leap of faith — for both parties.

It’s just that the risk comes at different points.

Buyer Risk

For the Buyer, it’s up front: ‘exactly who is this Bozo/Snake oil salesman/[your stereotype here] who I barely know and who wants me to sign an unfamiliar contract tying me to them for the next decade?’

“What if he doesn’t know anything about real estate?”

“Or doesn’t work hard for me?”

“Or I can’t stand him (or her)?”

Realtor Risk

For the Realtor, the risks primarily come later.

That would be after they’ve invested a substantial amount of time scouring the market for the client, showing them properties, and educating them about how the market works.

Normally, the pay-off for that investment of time is a commission check (and ideally, some loyalty and down-the-road referrals).

However, if the client never buys, or buys from another Realtor they just met . . . all of that investment is for naught.

Yes, it’s a commission business, “that’s the way the cookie crumbles” — blah, blah, blah.

But Realtors ultimately just sell one thing: their time.

Wasting it is the surest way to go broke.

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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