In today's current climate of short sales and lender owned properties, there is an ever-increasing downward pressure on commissions being paid. In so many cases, brokers representing buyers are finding that the co-broke commission that was originally offered in the MLS was reduced somewhat and often significantly at close of escrow.

Certainly, there may be an issue with the listing broker owing additional commission to the selling broker, yet that process could take months to resolve with an uncertain outcome. The process is arbitration through the Association of Realtors, which up front requires a deposit, sometimes reaching $500. If you ultimately win, you get that deposit returned. But if you lose the case, you also lose the deposit.

So, how can you insure that you will receive the full, anticipated commission at close of escrow? Have the buyer execute an Exclusive Buyer Retainer Agreement, whereby the buyer would agree to pay you a commission if the listing broker does not offer one, the seller does not offer one, or if the agreed upon commission changes.

There tends to be a resistance in the real estate community to bind the buyers to an obligation to pay a commission. That resistance tends to come from years of doing it one way, which was relying upon the listing broker to pay the commission and not involve the buyer.

But, times have changed. Not only is there pressure on our commissions from the listing side, we have to ask ourselves; “Are we entitled to be paid if our buyer buys?” Many agents fear that if presented with such an agreement, most buyers will bolt and find another agent.

That is simply not true. Explained properly and thoroughly, a buyer should understand that you do not work for nothing and that you have a right to make a living. With such an agreement, most buyers would have no exposure anyway, if the listing agent pays what is owed. The buyers would only have an obligation to pay you if you end up with less than what they agreed to pay you, or if they wander out alone and buy something without you.

So, for example, let's say you tell your buyer that in signing the form, they agree that you will receive $10,000 for any property they buy. If you sell them a listing that offers $10,000 and you receive that, the buyer owes you nothing.

If you sell them a listing that offers $8,000, and the buyer knows that when you show it, then they would owe you $2,000 at close of escrow.

If you sell them a FSBO who refuses to pay you, and they know that, they would owe you $10,000 at close of escrow.

Just like a listing agreement, a Buyer Agreement is a contract whereby the buyer would owe you commission if they buy and the listing broker or seller does not pay you. In a listing, the seller would owe you a commission if the property sells. Why not have the same assurances to be paid for your hard work from the buyer?

The choice to use this form belongs to you and your broker. Be sure your broker supports your use of this form and also be sure to know what rules your broker imposes in such usage.