A Primer On Exclusive Buyer Agency
What the heck is an Exclusive Buyer Agent?
Wikipedia says:
An exclusive buyer agent (or EBA) is a U.S. real estate firm (or an agent or broker who works in such a company) that represents only buyers of real estate. EBA firms never take listings and, therefore, never represent the seller in a real estate transaction. Exclusive buyer agent firms have chosen this business model in order eliminate the conflict of interest that exists when one firm attempts to represent both buyer and seller in the same transaction.
Does using an exclusive buyer agent matter to me, the buyer?
Honestly, it may or may not. Studies have shown that people working with buyers agents see more homes, pay less and buy more quickly than those who do not have this representation. This does not mean the agent had to be an exclusive buyer agent, just one who discloses that he or she is acting as the buyers and not the sellers representative for this transaction. It probably makes it more likely that you will get a good result if you use someone who exclusively represents buyers, but to be absolutely honest about it, there is no guaranteedepends entirely on the agent.
But think about it. If all a company does is represent buyers, wont that slant their entire process to favor them? Wont they look for the best houses, the most thorough inspectors, the best lenders with the lowest rates? Wont their passion for the buyers side translate into a better home at a better set of terms?
What do buyers think about
exclusive buyers agency?
The whole agency concept is way too complicated for most buyers. Who wants to be bothered trying to figure out how this crazy industry works? Most buyers just want to get into that house they saw on that great street. Sometimes buyers think they have to use a popular company or they wont see everything. That is not the casealmost every property is available on the local Multiple Listing Service (and by extension, many public websites as well) to be shown by any agent. That is the best way for sellers to get the most exposure and that is the way it is set up.
How is
Exclusive Buyers Agency different?
Many companies in this area practice representing both sides of the transaction. This is called dual agency. Even though dual agency is permitted in many states, it is widely misunderstood. According to Realtor News, in a national survey conducted by the National Association of Realtors, most agents reported that they did not even understand their obligations under those circumstances and they thought it created confusion among all the parties. The magazine further reported that the practice is a constant source of disputes and legal problems.
A typical situation would be to call the phone number on the sign in the yard. You speak with someone at the company and ask the price. They then ask you if you want to go see it. Of course you do! Do they tell you that you can come with your own agent? Of course they dont. The company gets twice the commission in most cases if you go with their agent. But the seller pays exactly the same amount of commission regardless of whether you bring your own agent in almost all cases.
Buyers deserve true conflict-free representation. If you buy a home and use the sellers agent or EVEN IF you are referred to another agent in that same office (both agents with the same company), you are at risk that you are not receiving the best representation.
What do the experts say about exclusive buyers agency?
One financial writer at bankrate.com, says:
Any licensed real estate agent in the United States can legally act as a "buyer's agent," although not all have experience doing so. You can also engage what's called an "exclusive buyer's agent." This is the purest form of buyer representation, but unfortunately, few firms are able to make a go of representing only buyers, since listings are the lifeblood of real estate, and listings are what make the phone ring.
And the National Association of Exclusive Buyers Agents suggests:
As your advocate, an EBA works solely on your side of the transaction. You can put your trust in an EBA. An EBA will advise you on deal-breakers as well as positives. In most states, this is something a non-EBA Realtor isnt required to do. Only when you have complete disclosure, the kind you get from an EBA, will you be satisfied that your deal is the right deal for you.
Or listen to Money Magazine:
The best buyer brokers are so-called exclusive agents - that is, they represent only buyers, never sellers..."
Consider what other financial writers have suggested:
"Only an exclusive buyer agent can give the buyer an objective, experienced opinion of the homes viewed to ensure the buyer gets the right home, in the right location, at the right price."
Mobility
"Exclusive Buyer's Agents only work for consumers and often can save them money - and they don't cost more to hire"
Los Angeles Times
Your goal should be to engage an agent who will represent your interests. Not just a buyer broker, but an exclusive buyer broker. Make sure that is what you are getting."
Joseph Eamon Cummins, Author, NOT ONE DOLLAR MORE!
How do other agents feel about exclusive buyer agency?
Actually, that is a good question. You might be surprised to learn that most are vehemently against it. Why? It threatens a very lucrative practice that is misunderstood and they want it to stay that way. An honest, successful agent in the Mid-Atlantic region is one of the few to speak out, saying:
Heres what I think about that GRAND OXYMORON OF REAL ESTATE, a dual agent: What I have observed over the many years is that dual agency permits the seller to get their price, terms, conditions through representation under the dual agency disclosure. The buyer gets. . . . the house.
What do we think about it?
Dual agency is a no-win situation. It is impossible to decide how to be fair to two parties on opposite sides of a deal.
Exclusive agency, by contrast, is a win-win. We never represent both sides because it cannot be done. Home buyers need an advocate for them, instead of the way the industry has it set up, which is to get the deal done regardless. Here is the real testwe are willing to forego the income from listings to do thisthat is how strongly we feel about it. We put our money where our mouth is for YOU, the buyer.
by: SAGE Realty LLC