The Definition of an Exclusive Buyer(s) Agent

Exclusive buyers' agent: A licenced real estate practioner who represents only buyers and neither accepts listings nor works in an brokerage which represents the interests of sellers or accepts listings.

Exclusive buyer agency

1. A real estate brokerage that employs only buyers' agents and never engages in the agency representation of sellers.
2. A real estate brokerage that exercises a fiduciary obligation to serve only buyers interests, thus being independent of all obligations and inducements owed sellers.

Exclusive Buyer Agency observes the virtue of the Common Law axiom that an agent may represent a seller or a buyer, but never both.

We believe most buyers want their interests to be represented -- but not necessarily by a "buyers' agent" that is employed by and owes allegiance to a "seller agency"

There are real differences between being the agent for a buyer, whose primary goal is to find and beneficially purchase the ideal home, and the seller agent, whose goal it is to reap the highest possible profit for the seller.

We are building a business based on the principle of providing consumers with a clearly defined choice -- representation independent of interest or obligation to any other party.

Thus, we provide our clients with the opportunity to make informed choices based on purely objective guidance - in what is usually the most expensive and important purchase of their lives.

We Warn Our Buyer Clients About "Staged Homes"

We warn our buyer clients about staged homes. It is easy to tell when a home is staged....and when I see one - I point it out to my client - and try to have them picture the home stripped bare of the decorations.

Here is an article talking about the member survey taken by NAEBA - The National Association of Exclusive Buyer Agents - the association that Relocation Advisors Group Inc. - the Exclusive Buyer Brokerage for Chicago - and Chicago's Northwest Suburbs belongs to.

Before I became an Exclusive Buyer Broker - I was personally trained by Barb Schwarz in California - in her most advanced home staging course, after her the initial designation. So I know what home staging is - and what Barb teaches - and what the drawbacks are to a buyer. We know how to warn our buyer clients what to look for.

In reference to her comment in that article - it is not true that homes are never staged to cover things up. I've seen it happen any number of times - from rugs put over discolored floors to things covering up holes in walls.

Barb was even noted on a national TV show during the past year - talking about spray painting dead grass in the yard with green paint. Now - if that isn't a cover up - what is?

We insure that our buyer client pay the "unstaged price" - not the "staged price." Typically staged homes can be overpriced. The seller is trying to get more than the home is really worth. That is their whole rational behind staging it in the first place...

Newsweek Article - Find An Exclusive Buyer Agent if Possible - When Purchasing Real Estate

There's a new article in Newsweek about the advantages of using an Exclusive Buyer Agent - as opposed to a "Buyer Agent." Now - if you are in the Chicago Illinois area - there is one near you -- Relocation Advisors Group - an Exclusive Buyer Brokerage

The article references - "If there isn't one in your neighborhood, you can use a selling agent as a buyer agent, but do some screening." I'd have to agree with that... If you can't find an Exclusive Buyer Agent - the next best thing is a so-called Buyer Agent - preferably one with the ABR designation.

But you need to ask them what percentage of their time they spend with buyers versus trying to obtain and market listings. Obviously - the agents who spend more of their time with buyers are the better bet.

In contrast - Exclusive Buyer Agents are specialists - spending 100% of their time serving home buyers - so they are very good at what they do. The analogy is - if you need heart surgery - do you want a general practitioner or a specialist? A purchase of your home is just as important (well almost!)

The problem with buyer agents is their home showing biases (perhaps showing more of their own company's listings or "selling" higher co-op payout properties), and that they can get into dual-agency conflict of interest situations where they may be representing the seller equally with you - which is really non-representation. They may also be reluctant to show for-sale-by-owner (FSBO) properties to you.

An Exclusive Buyer Agent can never get into those types of situations - and many of them actually align their compensation to be in your best interests - instead of the other way around. They show you all FSBO properties meeting your criteria.

The article states, "What about the fear that listing agents won't want to work with you if they know they have to split a commission with your buyer agent?"

In Illinois - every listing in the MLS has a certain payout (called the co-op - which doesn't mean that the agent with the buyer has to "cooperate" (as in give in) to the listing agent) - to someone who brings a buyer - so that is a non-issue.

Also - the payout is not necessarily a split of the total listing agent commission to the seller. Say the listing agent negotiated a 5.5% commission with the seller. The co-op may be 2.5% and the listing agent and their broker would then be keeping 3% (split between them based on whatever split the agent is on.) The seller can choose the payout to be whatever they want - and in fact - negotiate with a listing agent - to pay out more to someone bringing the buyer - than their listing agent - which may be beneficial in the current "buyers market."

Why? Some agents may "sell" the higher payout property to their buyer client - especially if the client isn't under contract with them. When the buyer has no contract with their agent - their agent can pocket the entire co-op payout.

The public thinks that the listing commission is "split" with the buy-side - which is not necessarily the case.

If you contract for a specific rate with your Exclusive Buyer Agent or Buyer Agent in writing - you are reimbursed for what you contract for - by the co-op payout. If the co-op payout is higher than your contract rate - you - the buyer - pocket the difference.

When you contract for a rate - there are no home showing biases - because your agent isn't going to push a higher commission property on you. They have no reason to - because you know your agent will get paid the fixed rate that you contracted for.

If the co-op is less than your fixed rate - your agent can negotiate to have the seller pay the difference - so you are nothing out of pocket to your Exclusive Buyer agent or Buyer Agent. Everything is always built into the price anyway - including the listing agent's cut. Agent's commissions are usually built into the purchase price.

Just as an Exclusive Buyer Agent or Buyer Agent does not dictate to the listing agent what they are going to get paid - neither should the listing agent dictate to the agent bringing the buyer - what they are to be paid. So - the "co-op" payout is really just a proposed payout by the seller / listing firm. The agent representing the buyer - may be worth more or less than that - so by having their buyer decide what they are worth - in writing - the co-op payout may or may not be acceptable to the buyer. If not - they can ask for closing cost credits as part of the negotiation.

HUD considers buyer broker fees to be an allowable closing cost.

We have found that buyers enjoy performance-based compensation for agents - in addition to just a flat fee. But very few agents structure their compensation to be performance based. In fact - a traditional buyer agent usually makes more when their buyer's price goes up. We believe that the opposite makes more sense. So do our clients.

If you want to learn more -- call an Exclusive Buyer Agent in your area.

The Difference Between an Exclusive Buyer Agent and a "Buyer Agent"

Unfortunately - most of the general public isn't aware of the distinction...

In the 1990's NAR defined the difference in one of their brochures - but that is the last we've heard from them in terms of the definition. Only two states proactively let the public know that Exclusive Buyer Agency is a choice that they can have when they are purchasing Real Estate -- Ohio and California.



An Exclusive Buyer Agency is a real estate agency employing only agents working with buyers - and never engaging in agency for sellers. They have a fiduciary obligation and service to buyers, independent of all obligations and inducements to adverse interests (example - sellers, other agents, service providers).

An Exclusive Buyer Broker would be the managing broker of such an agency.

An Exclusive Buyer Agent is an agent who represents only buyers and neither accepts listings nor works in an agency which represents sellers or accepts listings. They work for the broker of the Exclusive Buyer Agency. They can never get in a dual-agency conflict of interest situation with their client.

A "Buyer Agent" works for a company who lists property for sale - and they list property for sale themselves. They can get into dual-agency conflict of interest situations with their buyer client - and unfortunately for the consumer - typically disclose that they can when the contract is written - rather than up-front with the consumer - as is typically required by most state laws.

An Exclusive Right to Represent Agreement does not give the right for a Buyer Agent to call themselves an Exclusive Buyer Agent. It only means that their buyer is working exclusively with them - and no other agent. They can still get in dual agency situations for example.