What exactly is an “Exclusive Buyer’s Agent”?
A: An agent who represents only buyers, never sellers, with no risk to their buyers of dual or designated agency on any home they want to buy.
B: An agent who represents their buyers as a designated agent if they want to buy a home that is an in-house listing.
C: An agent who gets paid regardless of whether the agent finds their buyers the home they want to buy or not.
The correct answer is “It depends on who you ask”. Let’s discuss each of the scenarios above:
A: An exclusive buyer’s agent is an agent who represents only buyers, never sellers, with no risk to their buyers of dual or designated agency on any home they want to buy.
This is the definition you would find in “Don’t Risk It! A Broker’s Guide to Risk Management”, published by the National Association of Realtors in 2000: “Exclusive Buyer Representation – Also called exclusive buyer agency, this the practice of representing only buyers, never sellers. The company never lists a seller’s property and thus never has a seller as a client.”
The definition above is also the definition used by the news media in articles written for the benefit of home buyers who are looking for consumer advice in preparation for the purchase of real estate. Internationally acclaimed finance specialist Suze Orman endorses the National Association of Exclusive Buyer’s Agents in the “Finding a Buyer’s Agent” section of her popular web site, www.suzeorman.com. Consumer advice columnists Ilyce Glink and Robert Bruss recommend exclusive buyer agency as an alternative to buyer agency to consumers who want to avoid the risk of dual agency – when one broker represents both parties. Ilyce Glink advises: “If you’re trying to eliminate potential conflicts in your deal, you may want to try (exclusive buyer agency). Exclusive buyer’s agents never represent sellers. They only represent buyers, and they typically will take buyers wherever they want to go in a metro area.”. Robert Bruss differentiates between the different types of buyer agency services in his article Do Home Buyers Need Their Own Agent?: “Any real estate agent can be a buyer’s agent to help locate your home purchase. In addition, there are a few exclusive buyers’ agents who represent only home buyers, never accepting listings from home sellers.”
And June Fletcher from the Wall St. Journal.com writes:
“Exclusive buyers agents can focus on their customers and their needs in a way many sellers agents can’t. They don’t have to spend their time holding open houses, staging properties, or doing all the other marketing tasks that consume much of a listing agent’s time. They can concentrate on previewing homes, investigating comparable houses, helping the buyer understand financing options, negotiating the deal and making sure all the inspections and escrow items are done in a timely manner.
What’s more, home shoppers who use exclusive buyers agents don’t run the risk of falling in love with one of their agent’s own listings. When that happens, the agent becomes a dual agent — beholden to both the seller and the buyer, and thus, beholden to no one. Because this limits the amount of advocacy and advice the professional can give either party (for instance, a dual agent can’t tell the seller the highest price that a buyer is willing to pay), it’s illegal in some states.“: www.realestatejournal.com
B: An exclusive buyer’s agent is an agent who represents their buyers as a designated agent if they want to buy a home that is an in-house listing.
The news media is doing a great job of advising consumers to ask for an exclusive buyer’s agent in order to avoid the the conflict of interests that exists with dual and designated agency (which legally is “dual agency” in NC, since the same broker represents both parties.) But the problem is now that consumers have started asking for an exclusive buyer’s agent, listing agents are representing themselves to consumers as “exclusive buyer’s agents,” and are advising consumers they can provide exclusive buyer agency representation – even on in-house listings! The reason for this is that the NC Real Estate Commission does not recognize the definition for exclusive buyer’s agent published by NAR in 2000, and since then, picked up and popularized by the mainstream news media. As a result, many real estate agents who practice designated agency on in-house listings regularly advertise themselves to consumers as “exclusive buyer’s agents.”
C: An exclusive buyer’s agent is an agent who gets paid regardless of whether the agent finds their buyers the home they want to buy or not.
The NC Real Estate Commission allows NC real estate agents to call themselves an exclusive buyer’s agent if their buyer client signs an “Exclusive Buyer Agency Agreement.” The NC Exclusive Buyer Agency Agreement is a contract which states that the buyer’s agent gets paid no matter who finds the home, and restricts the buyer to the buyer agency services of the agent/firm with whom the buyer has the buyer agency agreement. The NC Real Estate Commission acknowledges this usage of the term is pervasive throughout the industry in NC, but does not consider it a deceptive practice because no legal definition for this term exists in NC. The following terms: “Buyer’s Agent, Seller’s Agent, Dual Agent, and Designated Agent” are all defined in the state mandated Consumer Disclosure Brochure called “Working With Real Estate Agents,” but the definition for “Exclusive Buyer’s/Seller’s Agent” is a glaring omission from the agency options that are disclosed to consumers in this brochure.
In many states including NC, “Buyer Beware” remains the adage for consumers who want an exclusive buyer’s agent to represent them in their next real estate purchase transaction. A refreshing exception is Ohio, where their state legal disclosure, “Consumer Guide to Agency Relationships,” was developed jointly by the Ohio Association of Realtors and the Ohio Division of Real Estate and Professional Licensing. Under Ohio license law, each brokerage must disclose which of five agency policy options their company practices and offers to consumers, including an option for exclusive buyer agency: “Under this policy, your brokerage only represents buyers, and does not take listings, practice subagency or dual agency.”
Real Estate industry expert and columnist Peter Miller sums up the argument best for including exclusive buyer agency as an additional agency option in the NC Consumer Disclosure Brochure: “Brokerages should always include listing brokers and buyer brokers, exclusive or not, so that individual professionals can pick the practice strategy they prefer while consumers can find the widest array of services. Exclusive buyer brokers changed the marketplace by popularizing the core concept of buyer brokerage. That’s a transition which now helps millions of purchasers get a better deal in the marketplace – and that is a significant accomplishment.”
Since no legal regulation for exclusive buyer agency exists in NC, before proceeding with a self-proclaimed “Exclusive Buyer’s Agent,” consumers are advised to question their real estate agent’s interpretation of this loaded real estate term.
…
Julie P. Tuggle is broker-owner of Carolina Buyer’s Agent, an exclusive buyer agency in Charlotte, North Carolina that represents only buyers, never sellers, on the purchase of Charlotte homes with no risk to their buyer-clients of dual or designated agency representation on any home they want to buy. Julie can be reached at: juliet@charlotte-eba.com
Read more articles written by Julie P. Tuggle
Related posts:
- Saving Time and Money Working with a Real Estate Buyer’s Agent
In residential real estate transactions, sellers commonly take pains to interview and to select a Realtor. They will talk to friends, get referrals, ask for references, and generally interview prospects. Buyers, on the other hand, tend to just respond to an ad, as if “University Park homes for sale” tells... - Finding More About A Potential Expired Domain Buyer
Selling your expired domains to a potential buyer could be a very tricky issue. Segregating a serious buyer from a casual one is very difficult as you may deal and interact with hundreds of them. Some of them may be very dedicated expired domain traders who are looking for very... - How To Find The Best Real Estate For Sale In Tuscany
For those that have traveled to Tuscany and fallen in love with the region, it is not uncommon to harbor a dream of buying a home there. Where do you begin when you are in a position to realize the dream? As any decent real estate agent will tell you,... - How To Buy Real Estate in Mexico
Buying Property In Mexico Buying property in Mexico has become more popular every year. Whether you would like to purchase a vacation home or are planning on retiring there, owning real estate in Mexico is easy and safe. With its incredible natural resources, rapidly improving economy and modern facilities and... - Creative Real Estate Investing: 4 Basic Strategies You Should Know
Creative Real Estate Investing refers to those methods of purchasing and selling real estate that are considered rather unconventional. The answer to the question whether the techniques are unconventional largely depends on whom you ask. While professional investors argue that the techniques below are fairly commonplace, the na ... - Zig When They Zag – And Stand Out
The internet has become all the rage these days. Don’t send a letter, pop it on an email. Don’t mail the customer anything, pop it in an email. In fact, let’s forget about letters altogether and do everything electronically. I’m as guilty of this as the next person. But recently... - Using Sales Strategies That Stand The Test Of Time
Here are a few sales strategies that will stand the test of time and you can apply it to any business you are in: Find Only People Who Want Your Wares This is a very simple mindset that most salesmen fail to understand. If you want to sell and you... - Relocate to Dallas: High Value Real Estate, High Quality Living
People who decide to relocate to Dallas will be buying a home or renting a home in a major metropolitan area where real estate values have remained stable. Both the cost of living and the unemployment rate are well below the national averages. [B]Major Population Center in North Texas[/B] With... - When Considering A Tattoo, Put Some Real Thought Into Your Decisions
The story of my first tattoo is not an exciting one: no one was drunk, nothing was misspelled, and it didn’t happen in jail. I was 21 years old, living away from my parents for the first time, in college in New York. I had wanted a tattoo since I... - The Importance of Real Time Forex Charting
Do you want to earn money in the arena of foreign exchange? In order to accomplish so, you should possess in-depth technical knowledge, focused on the capability of tracking currency exchange rates, through interpreting actual forex charts. If you are an amateur in this field, you should quickly discover authentic... - Never Underestimate The Real Power Of Long-Tail Keywords
Before 2010, May Day simply referred to May 1st, a celebration of the beginning of Spring, or International Workers’ Day (Labour Day), as practiced in many countries, most notably in Russia… The alternate spelling Mayday was a signal used by ships’ captains and airplane pilots to announce “Come and Help... - Buyer’s Market, Seller’s Market? A Market in Transition
With a few exceptions, most of the nation is either in transition or has already made the transition from a sellers market to a buyers market. What this means exactly is that now may be the best time in years to purchase a first home. Because inventories are increasing in... - Find The Right Property For Sale In Tuscany
Those that have spent any significant amount of time in Tuscany know the draw that the region has. Anyone that has been a student in Florence or has soaked up the agritourism side of the most famous region of Italy understands the desire to return. The desire may be for... - How To Effectively Find And Work With Sales Reps
Outside sales reps, or agents, can be an excellent tool for rapidly growing a business. But, like any tool, they are only effective if they fit the job. So before you sign up your first agent, you’ll want to take time to consider your needs. First, consider whether you need... - Understanding The Due On Sale Clause On Your Home Mortgage
The “Due On Sale Clause” is among the most frequently misunderstood and most-feared legal terms in American contractual law. In this article, we are going to take a look at what it is, what it is not, and how to avoid violating it. What Is The Due On Sale Clause?...