Smart Homebuyers Choosing New Kind of broker
"Exclusive Buyer Brokers" Help Save You Thousands of Dollars

If you're in the market for a home, you may think the real estate agent who chauffeurs you around town is looking out for your best interests. Don't bet on it.
 
In the traditional way of selling houses, both the agent who lists a house and the one who brings a buyer to the table are legally working for the seller. Both agents are required to get the seller the highest possible price. Even if "your" agent learns that the seller is willing to cut the price or pay some of the closing costs, you may be kept in the dark. At the same time, information you give to "your" agent, such as how much you really can afford and how soon you need to buy, must be reported back to the sellers, giving them a negotiating advantage.
 
In this system, the deck is stacked against the buyer.
 
That's why more and more buyers are getting their own agents to help them find a house, negotiate the best deal, and close with the least amount of hassle. These agents, called Exclusive Buyer Brokers, are licensed real estate agents. They have access to all of the usual resources used to find houses, including the Multiple Listing Service (MLS), as well as sources not usually accessible to traditional agents, such as homes for sale by owner. But there is one very big difference between traditional agents and Exclusive Buyer Brokers: the Exclusive Buyer Broker represents the buyer and is legally bound to get the best deal possible for the buyer. Exclusive Buyer Brokers do not represent sellers; they do not list homes for sale.
 
What's more, a good Exclusive Buyer Broker actually turns the tables on the seller and the seller's agent by digging up facts on the house and the seller's position that can work to the benefit of the buyer. Stephen Israel, President of BUYER'S EDGE (301-657-1475), a Washington, D.C. area Exclusive Buyer Brokerage, says agents with his firm always try to find out things like a house's past selling price, time on the market, offers received, how much similar houses are selling for and even how anxious the seller is to make a deal -- information most sellers would like to keep hidden.
 
Any information that might give a buyer more leverage -- like a seller's imminent job transfer, or the fact that the sale is part of a divorce settlement -- is fair game. "These are the kinds of things traditional agents have always done for sellers," Israel says. "Our job is to level the playing field for Buyers."
 
Study Confirms Savings
As more people use Exclusive Buyer Brokers, there's mounting evidence that the old-fashioned way simply doesn't get buyers the best deal. When U.S.Sprint studied the home purchases of relocating employees, it found that those who worked with traditional real estate agents ended up paying about 5 per cent more than those who used buyer brokers. On a $500,000 house, that's $25,000 of the buyer's money wasted.
 
In one recent case, Israel found a house in Bethesda, MD listed for $379,000 that suited the buyer's needs and had been on the market for nearly six months. In several rounds of negotiations, the price was reduced to $352,000 and the sellers agreed to pay $20,000 of the buyer's closing costs as well as $8,200 for repairs and renovations prior to settlement. Net savings to the buyer: $55,000. "We come to the negotiating table playing hardball," says Israel.
 
As you might expect, many traditional real estate agents don't like the idea of an Exclusive Buyer Broker fighting for a lower price. But the trend toward equal representation is proving unstoppable. Consumer advocates ( including Money magazine, The National Home Buying Institute, and syndicated real estate columnist Robert Bruss) have gone on record urging consumers to seek buyer representation in purchasing a home. Exclusive Buyer Brokers nationwide have formed the National Association of Exclusive Buyer Agents (NAEBA) to educate consumers and to help them find an exclusive buyer broker anywhere in the country.
 
As more buyers educate themselves, many large brokerages are attempting to jump on the bandwagon by "designating" one agent within the firm to represent the seller and another to represent the buyer. That's a problem, says Israel, when the buyer is interested in one of the company's listings. The brokerage firm is already under contract to the seller to get the highest price on the best terms for the seller. Regardless of the agent's "designation," the responsible party, the broker, remains a dual agent, obligated to the seller, yet trying to represent the buyer, in effect working both sides of the fence and creating enormous potential for conflict of interest. "In a dual agency situation, neither side is fully represented and the risk increases with the size of the firm," Israel says. "The more listings a company has, the greater the possibility a buyer will end up negotiating for one of those properties to the exclusion of all others."
 
That means the only way for buyers to ensure they'll have a crack at every house available that meets their needs AND have an advocate all the way through the deal, is to work with a brokerage that only represents buyers. "We don't take any listings from sellers, period." says Stephen Israel of BUYER'S EDGE. "We're here to get the best deals for buyers. We don't put ourselves in a position where there's even the potential for a conflict of interest.- BUYER'S EDGE does NOT charge up-front fees for their services and almost all deals are done with no out-of-pocket costs to the purchasers. Buyers are given three choices regarding the type of contract they can enter into with BUYER'S EDGE, choices geared to save home buyers money while assuring their interests are protected throughout the home buying process.
 
"Most listing agents do a great job for the sellers," says Stephen Israel. "We're here to do the same for the buyers."
 
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