When John Ciccone and his wife decided it was time to buy a home, he read a few books and happily went house hunting with an agent from a large company.
But three months and two Realtors later, Mr. Ciccone grew disgruntled with the process and sought help from the Buyer's Edge, a firm that accepts no listings and works exclusively with buyers.
A short time later, the Ciccones purchased a four-bedroom single-family home in Bethesda, large enough, he says, for the twins they are expecting.
"Using a buyer broker made more sense to me," he said. "The seller's agent cannot represent you as a buyer if he has a previous agreement with a seller. They say they can, but that's nonsense. At best they're compromised."
Even using a buyer agent from a large organization proved unacceptable, Mr. Ciccone said, because the Realtor steered him and his wife toward listings from that company.
"I don't think it's possible for a large organization to be free of conflict," he said. "Those mixed-agency relationships should be outlawed, in my opinion."
More and more home buyers are turning to exclusive buyer brokerages-- agencies that only represent buyers and refuse to take listings--for assistance in purchasing a home. At least seven such firms have cropped up in the Washington area since 1992. And just four months ago, a national organization of exclusive buyer agents was formed, evidence of the growth of this new area of real estate services.
"I believe that exclusive buyer agency is the only way to go," said Maggie DelGallo, who recently opened the Reston office of Buyer's Resource Capitol Realty, a nationwide franchise with an office soon to open in Alexandria. "We don't accept listings, so we have no conflicts."
In Northern Virginia, 70 percent of the transactions are done by buyer agents, said Valerie Huffman, Weichert Realtors' training director. In Maryland, she said, buyer brokers account for about 45 percent of business.
While buyer brokers at large real estate organizations have practiced for a number of years, Ms. DelGallo called the emergence of exclusive buyer agencies "the most significant paradigm shift since the Realtors formed their own national trade association in 1908."
A lot of people thought this was just a trend and it wasn't going to stay," she said. "But we're not going anywhere."
To be sure, some 300 exclusive buyer brokers formed the National Association of Exclusive Buyer Agents in Colorado last February. Group officials say they plan to create state chapters and lobby for change in agency-related laws. They are also intent on educating the public about this relatively new service that is making fundamental changes in the way people do business.
"It's our biggest obstacle, letting people know such a thing exists and they have a choice," said Dave Kolakowski, vice president of the Buyer's Edge in Bethesda. "The concept is 10 years old, but for all practical purposes . . . it's still in its infancy.
"We never put the client in the position of trying to represent you and sell something we've listed," he said. "There's a huge potential for conflict of interest."
Under current law, agents affiliated with the same firm but on opposite sides of a transaction with--one representing a buyer and one representing a sellerÒ.Æ Ò--Ò.Æ ÒÒ Ø Ò Ò.Ø Òare not permitted to fully represent either party in disclosed dual agency. Consequently, agents cannot advise, counsel or offer negotiating assistance to their clients.
However, a new law that becomes effective in Northern Virginia on Oct. 1 is expected to diminish, if not eliminate, such conflicts. It will allow Realtors to represent their clients entirely, regardless of whether the buyer broker and selling agent work for the same firm.
In a situation in which there is only a Realtor involved in a transaction, the new law will require firms to designate another Realtor to a client so that each party is represented. "If a Long &; Foster agent sold to his buyer a Long &; Foster listing, both agents were required to be disclosed dual agents, so if the buyer asked for help in negotiating a price, the agent couldn't help," said Cherry Carnell, a Realtor who was on a task force that helped draft the new legislation.
"With the new law, you have designated representation, where the company remains the dual agent but the salesperson can fully represent their party, so the agent can fight like crazy for each client and neither will be considered a dual agent," she said.
Beginning in August, real estate instructors will educate licensees en mass throughout Virginia about the new law, said Jo Lankenau, director of professional services at the Northern Virginia Association of Realtors (NVAR). She said the change was prompted by agents and individuals who considered the current laws defining agency "nebulous."
But even with new legislation designed to give agents more latitude in representing their clients, buyer brokers such as Mr. Kolakowski say home buyers are still better off with firms that work exclusively with purchasers.
"If someone were suing you, would you walk into the same law firm that represents the person suing you and ask them to defend you? It's a ludicrous concept.
"When you look at what has traditionally happened in the real estate industry, up until a few years ago there was a large movement to let consumers know the agent had a fiduciary duty to the seller of the property, even when they were working with a buyer," Mr. Kolakowski said. "They didn't represent you, but you thought they did. That's why buyer brokers became popular."
