Loyalty and Advocacy in Real Estate (Exclusive Buyer Agency) vs. Dual Agency and Seller Agency

Loyalty and Advocacy in Real Estate (Exclusive Buyer Agency) vs. Dual Agency and Seller Agency

In the case of SNIDER v. OKLAHOMA REAL ESTATE COMMISSION, June 1, 1999 the Oklahoma Supreme Court said: "Sellers' agents and dual agents do not and cannot by law give a buyer the same degree of loyalty as an agent who acts on behalf of a buyer. Sellers' agents owe their allegiance to the seller. Dual agency invites a conflict of interest. A buyer who relies on the seller's agent or on dual agency does not receive the same degree of legal protection as that afforded by an agent acting solely on behalf of the buyer".

Though it has always been the buyer whose purchase money allowed for payment of ALL real estate brokerage fees in a transaction, only recently has the buyer been afforded a right to representation of their own, at no additional expense, through the concept of buyer agency.

Yet, even with the advent and acceptance of buyer agency, the home buyer is still not guaranteed of receiving the most important benefits of buyer agency--advice and advocacy--because of the conflicts that can arise when using "buyer agents" whose firms--and often themselves--have loyalty obligations to sellers.

The only legitimate way to avoid this conflict, is to use agents who do not work for companies that list property. These agents are called..."exclusive buyer agents."

Traditional Real Estate companies continue to represent both sides of the transaction - because listing property is how they obtain their next buyer clients. Traditional Real Estate companies get their buyers from "Sign calls" or the ads they run that purportedly help sell the home - when in fact - the ads only give them more "buyer calls." Thus - the dysfunctionalism in the Real Estate industry continues - because one hand feeds the other. When you use a so-called "buyers agent" at a traditional Real Estate company, they may start out representing you - but half way through the transaction, get into a "dual agency" situation which means that you have to consent to be represented equally with the seller. Or - if not that - a "Designated Agency" situation where are are passed off to another agent in the same office that lists property for sale. Not only are you no longer represented by the agent that you wanted to represent you - you are still represented by an agent in an office that lists property for sale. Plus - your confidential information might find it's way into the wrong hands in an office filled with listing agents (shared fax machines, a glance at someone's desk etc.)

Is it any wonder that home buyers are stressed when they feel that they really aren't being represented very well - and don't have all the unbiased information that they need?

The stress level of buying or selling a home is equivalent to the stress level of a death of a spouse or a divorce. This was determined in a study conducted by HUD where it was established that buying and selling houses was way up there on stressful events in families' lives. That study was performed back in the 80's.

We have found that what many people hate most of all is being horn-swoggled. If they know what is going on from the very beginning and can make an informed judgment of their own, then they readily accept responsibility for the events that follow.

What they don't like is not being told something that would have made a difference in how they saw things and how they approached the decision-making process. That's partly why being an exclusive buyers' agent has so much appeal to us. It allows us to secure all the information we can about a property and share it with you so that you can make informed intelligent decisions about the most important investment in your life.

Listing agents can't do that for a buyer. They are obligated through the laws of agency to represent the sellers. What this means in reality is that it is their job to get the most money and best terms and information from you as they can, for their sellers. It is the way real estate has been conducted for years. Isn't it about time someone had your interests in mind as the most important aspect of this transaction?

Nothing is more emotional and more highly charged than purchasing the place where you are going to raise your family, put down roots in the community, become involved in schools and other civic organizations. And to make that decision without having an advocate is nothing short of foolhardy.

It is in your best interests to be adequately represented in this, the most important of all financial investments for your family's well being. A time will come in the not too distant future where no knowledgeable consumer would even consider buying a home without using an exclusive buyer agent. Be happy that you are at the forefront of this trend, and that you have the vision to protect your family's interests in this way.