What is Exclusive Buyer Agency?

According to recent articles in mainstream publications such as Newsweek, USA Today, Washington Post, SmartMoney Magazine, Good Housekeeping and U.S. News & World Report, hiring an Exclusive Buyer’s Agent may be one of the smartest moves a home buyer can make. If you are a buyer who is considering asking a real estate broker to help you find a home, you have a choice of whether that broker works with you either as a "buyer’s agent" or as a "transaction broker." The difference is both simple and dramatic. A buyer’s agent (BA) commits to representing you and your interests. A transaction broker (TB) simply facilitates the transaction and is prohibited by law from doing anything that might be interpreted as advancing your interests over those of the seller. A TB has no obligation to try to make you aware of all the homes on the market that meet your needs or to represent your interests. Almost any useful advice they might give you would violate their legally mandated neutrality. They’ll open doors so you can see houses. That, and transferring money and papers back and forth, is their job. That said, it’s obvious that any buyer who works with a broker who is not representing them under a buyer agency agreement is probably making a serious mistake.
Any agent in Colorado can represent buyers under a buyer agency agreement. What’s so special about an exclusive buyer agent (EBA)?
The broker in a traditional real estate office, where he and his colleagues not only work with buyers but also market properties for sellers, is constantly faced with a myriad of conflicts of interest which can create impediments to first rate representation of home buyers. Agents in traditional real estate offices have moral and legal obligations to market the specific homes that they have "listed" for their seller clients. They also have substantial financial incentives for pushing these homes, since they could double their income when their listings sell to a buyer they are working with. This obligation is in direct conflict with the buyer’s interest in having unbiased exposure to the whole market. According to agency law, if a buyer becomes interested a property that is listed by her "buyer’s agent", the agent won’t be able to provide true buyer agency representation in helping the buyer through the transaction. Remember, she agreed to represent the seller too. Typically, in this context, the agent must take the neutral, mediating role of a transaction broker. And because of the inherent conflicts between the interests of the company, the seller, and the buyer that arise in this context, it is precisely here that the buyer most needs the loyalty, fidelity and good faith — which the buyer has now lost.
It’s true that many of the brokers doing buyer agency with traditional companies take their responsibilities in representing buyers’ interests very seriously, and that’s a good thing. If traditional real estate offices weren’t offering buyer agency representation, most buyers wouldn’t have the option. Still, it is just more difficult for traditional agents to do a consistent, first rate job for buyers than it is for agents who work with EBA companies. All real estate agents have to deal with conflicts of interest everyday. That’s true for the exclusive buyer agent (EBA) as well as for the traditional agent. But the "buyer’s agent" working for the traditional company has to deal with a whole host of potential conflicts that simply don’t exist for the EBA.
As a group, exclusive buyer’s agents are true believers in pure buyer representation. They feel strongly that residential home buyers need and deserve the best representation they can get throughout the home buying process. This commitment to the EBA concept requires very real sacrifices. To operate as a true EBA office, all agents must agree not to market homes for sellers, passing up a huge source of potential income in what is generally considered to be the easier and more profitable side of the real estate business — listing properties for sellers. EBAs pass up the seller side of the business not because they have anything against people who are trying to sell their homes. Past buyer clients, at some point, will become "sellers." EBAs forgo this potential income stream on the listing side because they know that it is only by refusing to represent both buyers and sellers that they can provide the best possible service and representation to home buyers. And that’s what EBAs are all about. Exclusive Buyer’s Agents never represent homeowners, or otherwise assist them, in marketing of their properties. They represent buyers — and only buyers — 100% of the time. Exclusive Buyer’s Agents are truly the consumer advocates of the real estate industry.

Claudia Lewis, ABR, e-Pro is an Exclusive Buyer’s Agent with Agents for Home Buyers, serving Boulder County and the Front Range. Claudia can be reached at her office at 303-448-8808 or on her cell at 303-530-1534, or by emailing buyerrep@bod.net. For more information on Exclusive Buyer Agency, go to www.rightwayhome.com.