The Consumer Federation of America Comments on Real Estate

This isn't anything earth shattering to people who are educated about Real Estate - but unfortunately - the general public still doesn't understand how things work in the business...

The following (link text) should have said "agents" not brokers...though if the broker of a firm is also a "working agent" for a buyer well - it can apply of course. (Some brokers don't compete with their agents and only manage the agents in their office - while others also do business with clients on their own in addition to managing the office.)

Brokers"double dip," promoting their own listings or the listing of their firm over properties better suited for their clients.

The Consumer Federation also said:

"Traditional brokers who work with both seller and buyer in a home sale almost always function as facilitators. Brokers try to make sure a sale is completed (and they get paid), rather than as fiduciary agents acting in the best interests of their clients, as the brokers claim to do."

My comment is that this is for sure the case in dual agency situations or in states that legalize "facilitator" representation (such as Florida) - and again - this should say agents - not brokers. In Illinois - a buyer agent is presumed to be representing the buyer and is supposed to be a fiduciary to the buyer - but the problem is potentially promoting in-house listings or the current commission structure that is just accepting the "co-op" commission listed on the MLS sheet - which is is a flat percentage - meaning that the agent gets paid more when the buyers price goes up. So the tendency CAN BE that they work over their buyer to come up in price to get the deal done - rather than working harder to get the seller to come down. In that sense - even though they are SUPPOSED TO be representing their buyer client fully - the way their compensation is structured and the potential bias towards the seller when in-house listings are shown is really a hidden conflict of interest - and CAN make they way things really happen - lean a bit more towards facilitation.

Exclusive Buyer Brokerages (and their Exclusive Buyer Agents) - choose to not list property for sale - so that they may represent you 100% - 100% of the time without the conflicts of interest you may have if you use a "buyer agent" who lists property for sale (represents sellers). This is the main difference between an Exclusive Buyer Agent and a Buyer Agent.