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.

How Real Estate Firms and State Associations are Confusing the General Public

If your are a potential home buyer - please be aware that agents and their companies are prostituting the term "Exclusive" - by sometimes calling themselves an "Exclusive Buyer Agent" or having you enter into an "Exclusive Buyer Agreement"

The official definition from NAR back in the 1990s is that an Exclusive Buyer Agent never lists property for sale - nor does their company - to avoid the conflicts of interest that typical "buyer agents" have. The term "Exclusive" is critical - because the meaning is just that --- exclusively representing buyers.

A traditional buyer agent - can offer you no more than Exclusive Right to Represent Agreement (which means that they are the only agent that is representing you) - which is a far cry from an "Exclusive Buyer Agency Agreement" which means that you are working with an agent that is representing you, but that they and their office never represent sellers. BIG DIFFERENCE.

When they dilute the meaning of the term "Exclusive", and confuse the general public - no one can understand the difference in the type of representation that is offered.

In fact - under an Exclusive Right to Represent Agreement-- that agent may only be temporarily "designated" to represent you. If you become interested in one of their own listings- they suddenly don't represent you anymore -- either declare dual agency on you - or shuffle you off to another agent in their office for you to work with ("Designating them") -- who you may not want to work with at all.

At that point - that agent that WAS supposed to be representing you - is not supposed to tell the seller what they know about you...but at the same time, they are legally representing the seller and working in their best interest. So - as a consumer - can you see the problem here??

I hope so.

And what you - as a home buyer - aren't told - is that every other agent in that agent's office is your adversary....and that there could be overheard phone conversations, that there are shared fax machines and file cabinets, and that your agent may have biases towards showing more in-house listings or worse - their own listing -- because perhaps they get a bigger commission split if they push an "in-house" listing on you. Agents don't disclose these 'issues" to you.

When you understand that this can happen with a traditional agent - and that you get better representation from an Exclusive Buyer Agent for no extra cost (everything is built into the transaction) - using an Exclusive Buyer Agent when you are buying becomes a "no brainer."

Unfortunately - as a home buyer - you aren't told upfront what an Exclusive Right to Represent Agreement really means. And worse yet - most buyers in Illinois sign no agreement at all. This means that agents have carte blanche ability to deceive you. Across the US (and in Illinois) there is less than a 12% disclosure rate.

If you have no contract with an agent - they are supposed to disclose that they might suddenly not be representing you at one point -- upon first contact with you (or if you sign an Exclusive Right to Represent agreement with them - within that agreement) but since most buyers don't have a contract with an agent in Illinois - most of the agents are disclosing this fact way too late -- contract signing (which isn't legal).

Consumers deserve better...