Exclusive buyers agents don’t get a lot of press in the real estate world. Because the market is inundated with traditional real estate agents and agencies, alternative representation for buying a house isn’t discussed much. However, things are changing.
Exclusive buyers agents are the disruptors of the real estate world. Their reason for being is to ensure that home buyers get the representation they not only deserve but are legally entitled to have. But because traditional real estate agencies are the status quo, it can be slightly more challenging to find an exclusive buyer’s agent. So how do you know that you are working with an agent who has your best interests at heart?
How Do I Find the Right Type of Agent?
When it comes to finding an agent to work with, homebuyers usually run into three options:
- Listing Agent – a real estate licensee who represents the seller
- Buyer’s Agent – a real estate licensee who represents the buyer
- Dual or Designated Agent – a real estate licensee who represents both buyers and sellers (also called a transaction broker or facilitator)
A listing agent, by law, is obligated to look out of the seller’s best interest. They are interested in getting the highest price for their client that they possibly can. These agents are usually who you see at open houses, encouraging you to make an offer. Don’t do it. Instead, find an agent who knows the market and will negotiate the sale with your best interests at heart.
A dual or designated agent, working with both the buyer and the seller on the same property, ends up compromising their relationship with both parties. They cannot provide true fiduciary duties and services to a buyer and a seller. That means they can’t provide you with information about a home that could be detrimental to the seller or hurt the seller’s negotiation position.
That leaves the buyer’s agent. Guess who they work for? Buyers agents are legally obligated to look out for your interests alone and act on your behalf during real estate transactions.
What is an Exclusive Buyer’s Agent?
We have a whole post on this topic here. But the condensed version is that an exclusive buyer’s agent only works with people who are buying a home. Traditional real estate agents often represent both buyers and sellers. They call themselves “agents,” but the reality is that home buyers and sellers have conflicting interests. Buyers want the best deal on a home, and sellers want the best price they can get for their property. There is no way for a real estate agent handling both buyers and sellers to be genuinely loyal to only one party they represent. Add in the common practice of real estate agents double-dipping on commissions from both buyers and sellers, and you have a situation that just isn’t good for a buyer.
Exclusive buyer’s agents, on the other hand, are real estate licensees who are committed to looking out for your best interests at all times and in every situation related to buying a home. They never take on sellers or do anything that would compromise their legal ability to represent you. They offer true legally-binding fiduciary services.
Why Should I Work With an Exclusive Buyers Agent?
Buying a home is one of the most significant purchases you will likely make in your lifetime. It is the type of investment you want to get right. You want to make sure that the home you end up with is one that genuinely meets the needs of you and your family, that it is in good shape, and that any issues are clearly presented upfront. In short, it’s the type of purchase you should not feel pressured to make. Unfortunately, that is what often happens with traditional real estate agents.
Because many traditional real estate agents represent both buyers and sellers within the same agency, there is a huge temptation to do in-house deals. They often point buyers in the direction of properties they also represent, even if those homes are not a good fit. Why? Because then the agency gets commissions from both the buyer and the seller (i.e., double-dipping). The goal of these agents is to sell as many homes as they can, not to make sure you are getting the right house for you and your family.
Exclusive buyers agents, on the other hand, are committed to you, the buyer. As they never represent sellers, they don’t have the same conflicts-of-interest as many traditional real estate agents have. Exclusive buyers agents are legally obligated to look out for your best interests at all times and in every situation. Their goal is to provide you with the information you need to make the best decisions on your home purchase and legally represent you when making the arrangements with the seller’s representative.
How Do I Know I’m Working With an Exclusive Buyers Agent?
You need to ask a few questions when looking for an exclusive buyer’s agent. It has become popular for traditional real estate agents to refer to themselves using terms like “agent” or “buyer’s agent” to capitalize on the reputation of exclusive buyer’s agents. Beware of the so-called buyer’s agent who takes listings or works for a real estate company that also represents sellers.
These types of “buyer’s agents” sometimes work with buyers, and then steer them in the direction of an in-house listing. At that point, the agent will likely be required to change the status of their relationship with you to a dual agent. That means you lose out on the fiduciary protection provided by an actual buyer’s agent. Be sure to read the fine print on anything you sign. Some contracts and disclosures will automatically convert the agent relationship from a buyer agent to a dual agent if you are interested in an in-house listing.
The easiest way to know if you’re working with an exclusive buyer’s agent is to contact us directly. We work in Franklin, Worcester, Hampshire, Middlesex, Berkshire, and Hampden Counties in Massachusetts. In Florida, we work in Palm Beach and Broward Counties. If you live elsewhere, we are happy to put you in touch with an agent. Click here to contact us, and we will get back to you with the information you need.
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