Sunday, March 12, 2006

Hiring an Exclusive Buyer Agent is like having your very own Sherpa

By Peter C. Fyler - Exclusive Buyer's Agent

The other day I was having a slightly heated yet healthy discussion with a prospective client; she was arguing against making a contractual commitment to an Exclusive Buyer Agent. It was her belief that she would stand a much better chance negotiating a lower purchase price for a property if she dealt directly with the listing agent. Obviously, my argument was to the contrary as I tried to explain to her about fiduciary responsibility, seller agency, buyer agency, dual agency, designated agency, transaction agency and the nature of the beast in the real estate jungle.

I explained to her that a listing agent works exclusively for the seller. Therefore, it is the listing agent’s explicit duty and responsibility to get the highest and best possible price and terms for their seller, and that is exactly what they will strive to do. “Isn’t that what you would want and expect from your agent if you were selling your house?” I asked. A seller’s agent cannot and will not advise a buyer on creating an offer that works against their seller’s best interests.

I challenged her by asking, “If you walked into a real estate office and presented yourself as a ready, willing and able buyer, expressed an interest in a listing that was controlled, marketed and advertised by that office, do you really believe the agents in that office would advise you on how to negotiate to your best advantage?” Furthermore, real estate is a business and it is a costly business to operate; therefore, the more money an agent can make for the seller, the more they also make for the office, and for themselves.

I went on to describe a recent real-life experience I had in hopes of further illustrating the need for exclusive buyer representation. I told her I was communicating with a broker/co-owner of a small office in another state. I was trying to find an exclusive buyer agent to represent my son in a home purchase. I did a search through the professional exclusive buyer agency organizations I belong to. Unfortunately, exclusive buyer agency is still a relatively new concept, and not practiced in many smaller communities. I told the broker I was looking for an exclusive buyer agent. She perked up and said, “That’s me!” I responded quizzically, “You represent sellers by taking listings so how can you represent buyers exclusively? What happens when someone is interested in one of your properties? Don’t you have to become a disclosed dual agent?” She exclaimed, “Oh no, we don’t do that, we don’t believe in representing both parties in the same transaction.” “So” I asked, “then you become a transaction broker or facilitator and represent neither the buyer nor the seller?” “Yes,” she proudly proclaimed, “That’s right, and we have a b-i-g safe where we lock everything up.” Not being at all familiar with the market in that area, needless to say, her assurances did nothing to further my comfort level. I was looking for someone to advocate for my son, someone with his best interests at heart who would guide him through the process of buying a home. I hung up the phone wondering to myself how many people have the combination to that b-i-g safe.

Getting back to the outcome of my conversation with the prospective client, when I was finished explaining all the nuances of agency law to her, she looked at me like a stunned deer does at night when a car’s headlights shine into its eyes. She said, “Wow, that sure is complicated, but I see what you mean. I would be much more comfortable knowing that my relationship with an agent was going to stay the same until after I bought my new home.” I presented her with my contract, explained it in detail and together we crafted it to fully satisfy her needs. She happily signed it and together we will find the right home for her.

In all of my marketing materials I stress the fact that finally buyers have the opportunity to be represented and to have their interests protected. In order for that representation to be 100% Exclusive 100% of the time, that buyer agent cannot represent the seller in any way. As an Exclusive Buyer Agent, I am committed to working very hard for my buyer clients and I know one day consumers will “get it”. They will truly understand the concept and seek out exclusive buyer agents. I was reading an article by Ilyce Glink, an award-winning, nationally-syndicated columnist, television reporter, radio talk show host and best-selling book author. She said, “A good buyer's agent earns much more than the 2%-to-3% commission. That's because buyers don't have the deep knowledge of neighborhoods, comparable homes and current prices of an experienced agent.” She went on to say,”Your agent is more than just someone who drives you around. Your agent is supposed to be your eyes and your ears, helping you sift through what information is valuable or not when constructing an offer." Now don’t worry, that commission Ms. Glink is referring to is usually offered by the seller and we accept it, so it should not cost you any extra to have exclusive representation.

If you want to buy real estate on Martha’s Vineyard and you want to do the responsible thing, start out by engaging an Exclusive Buyer Agent. Contact SplitRock Real Estate for professional and knowledgeable service. You’ll be glad you did when you’re sitting at the closing table.