Exclusive Buyer's Agency and Exclusive Seller's Agency - Consumers Need to Understand the Real Choices Available when Buying or Selling Real Estate in Today's Market
June 25, 2012
Today there are numerous blogs, magazine and newspaper articles out there that hit on many of the problems related to agency relationships in the home buying and selling process. Steve Israel, President of Buyer's Edge Company, Inc. says that, "Unfortunately, the majority of them skip over the most obvious solution for home and condominium Buyers and Sellers. Sometimes there is a brief mention of working with a Single Agency Firm in order to avoid the inherent conflicts of interests found when working with a traditional real estate company, but rarely do these articles ever mention the existence of Exclusive Buyer Agency or Exclusive Seller Agency."
This seems strange since there are thousands of Exclusive Buyer's Agents covering territory all over the USA. The National Association of Exclusive Buyer's Agents(NAEBA) has been in existence for 20 years. The National Association of Realtors (NAR) also provides the following definition of Exclusive Buyer Agency - "The practice of representing only buyers and never sellers in a transaction. The company never lists a seller's property and thus never has a seller as a client..." In other words, there are many Exclusive Buyer's Agents today that represent home and condo Buyers 100% of the time.
This was not always the case. In a recent blog by Marshall and Victoria Henderson, Exclusive Buyer’s Agents at Buyer’s Edge, they wrote, “Until 1983, Home Buyers
did not have the option of choosing an Exclusive Buyer’s Agent. In fact, a study done by the Federal Trade Commission at that time showed that most Home Buyers in the United States thought that the agent who was showing the homes actually worked for them. As people became more aware of the fact that most real estate agents work for the Home Seller, they began to demand they have their own representation.” This lack of clear cut representation has been an issue for consumers for close to thirty years.
During this time, some real estate companies have tried to eliminate the conflicts of interests of large, traditional firms by establishing Exclusive Seller’s Agencies. Today there are Exclusive Seller’s Agencies that represent home and condo sellers 100% of the time operating throughout the marketplace. Many of these companies provide limited service packages (MLS listing only) or are happy to provide full services to Home Sellers.
Many smaller real estate companies created Single Agency Firms and agreed to represent only one side of a transaction - period. They may in some cases represent
a seller and in another a buyer, but will always release one of those clients to be represented by an agent in another
firm if they end up with a conflict that people are uncomfortable with.
Clearly the best option for consumers who are concerned about all of the conflicts is to work with an Exclusive Buyer's Agency or Exclusive Seller's Agency. John Sullivan, Associate Broker with Buyer’s Edge, writes that “buyers and sellers have different goals. Keeping in mind the seller’s goal of obtaining the highest possible price and best terms for his or her property, it’s clear that a Seller’s Agent couldn’t remain popular with Home Sellers if she were also trying to help Buyers get more favorable prices and terms. She might be an excellent choice if you were selling a home in her specialty zip code.” In his analysis of consumers’ needs, John writes that “an Exclusive Buyer’s Agent, on the other hand, has no sellers to please, no future listings that she is hoping to get, and no financial incentive for you to choose a house listed with her brokerage rather than one listed at a rival company or by owner.” John Sullivan has hit the nail on the head when he explains that Exclusive Buyer’s Agents are “free to use well-developed negotiating skills to help you get the best possible price and contract terms on a home in the geographic area of your choice.”
So when you are you ready to make that important choice, please remember to consider what kind of real estate company will best represent your goals and objectives? Clearly, those goals are very different if you are a Home Buyer or Home Seller.
When you are ready to BUY a home or condominium in Bethesda, Potomac, Kensington, Chevy Chase, Baltimore, Arlington, Vienna, McLean, Alexandria, American University Park, Cleveland Park, Woodley Park, Capitol Hill, Logan Circle……….
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At Buyer’s Edge, we just look at things differently. We go out of our way to illuminate all of the positives and negatives about every house our clients see. We really have such a clear vision and such an obvious job to do. To help our clients find the very best homes available, evaluate them correctly and then negotiate the best possible deals at the Lowest prices…
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