The National Association of REALTORS® (NAR) created the Accredited Buyer Representation (ABR®) designation to coincide with the change in Massachusetts agency law in 2005. Simply stated the law says, if a real estate agent doesn't represent the seller, they represent the buyer. But it is not that cut-and-dry, as you will soon realize. Any licensed real estate agent can earn the ABR® designation. I have the ABR® designation, along with a number of other designations.

In an NAR sanctioned publication titled Agency – Choices, Challenges & Opportunities (Agent’s Guide), the definition of an EXCLUSIVE Buyer Agency reads as follows: “The practice of representing only buyers and never sellers in a transaction. The company never lists a sellers’ property and thus never has a seller as a client.”

Only a licensed real estate broker whose business model is ‘Exclusive Buyer Agency’, and who is a member of the National Association of Exclusive Buyer's Agents (NAEBA) can receive the EBA certification. Exclusive Buyer’s Agents (EBA’s) are required to adhere to a strict EBA Code of ETHICS.

Think about this: Most often, when you contact a traditional real estate company, isn’t it to inquire about one of their listed properties that you saw in a print ad or on the Web? Did you know the agent you are contacting represents the Seller, not you? At that moment you are a customer.

What if you need help finding and buying your dream home? You want buyer representation. You contact that same traditional real estate agency, perhaps because you like the look of their website or the name of their company. Maybe you just flipped a coin. You are not calling about one of their listed properties. You ask to speak to an agent and tell him or her you want buyer representation. The agent responds enthusiastically, ‘I’m a buyer’s agent’. Wow! That was easy. But, are all buyer's agents the same?

Okay, the agent gave you their schpeal and you signed their buyer agency agreement, so you feel confident knowing your best interests will be represented. Right? But, what if you want to look at a specific property listed by your buyer agent’s office? Will your buyer agent still represent you? NO! They will explain to you how they are now going to act as a ‘Disclosed Dual Agent’ and work with both you and their seller. How can they do that and still represent YOUR best interests? They can’t. That’s right; they’re going to take off the buyer agent’s hat, put on the dual agent’s hat and represent neither you -- the buyer, nor their seller. The agent assures you they will not give any advantage to either party and they will keep all information confidential. Did you already tell the agent something you wouldn’t want the seller to know?

Allow me to pose a question using my favorite analogy: Two sports teams sharing the same locker room, and the same coach. Is the coach really going to be able to keep one team’s plays a secret from the other team? Which team will be favored and get the advantage? What kind of game do you think they are going to be playing? It sounds to me like this is a job for a Facilitator, a deaf mute or Jimmy the Greek. Perhaps your best bet would be to engage the services of an Exclusive Buyer's Agent, someone who is not conflicted and only coaches one team throughout the entire game. I look at every commitment I make to a buyer client as preparation for the Super Bowl, and I want my team to win.

I’ve done my best to explain the eccentricities of buyer agency, but you’re probably still confused – most people are. And you are probably suspicious too. That's why it’s not surprising more and more homebuyers are hiring an Exclusive Buyer's Agent to help them find that perfect home. Without exclusive buyer advocacy, in the time it takes you to find and buy a home, you would have to learn and put into practice a special set of skills an experienced full-time real estate professional spends years honing.

To help you buy a home, your exclusive buyer's agent must have a vast working knowledge of the Martha’s Vineyard real estate market, including price trends and neighborhood conditions and amenities. They need to know the differences in each town’s zoning bylaws, the differences in waterfront properties and water view properties, the impact of conservation restrictions, as well as rules and regulations concerning planned community association membership or condominium ownership. They also have to have an understanding of real estate law, financing, taxes, insurance and negotiating. The best exclusive buyer's agents are also "street smart" in the psychology of home buying and the stresses that accompany the often-esoteric nature of the process. When you have a question, concern or idea as you search for your new home, your exclusive buyer agent should be able to respond either directly or by referring you to someone who can help and give you an authoritative answer.

An exclusive buyer's agent is responsible for protecting the buyer-client's best interests (and wallet) at all times. Research by the National Association of REALTORS® has shown that when an exclusive buyer's agent is used, the prospective buyer found their perfect home one week faster and examined three more properties than consumers who did not use an exclusive buyer's agent.

An Exclusive Buyer's Agent will:

1. Evaluate the specific needs and wants of the buyer-client and locate properties that fit those specifications.
2. Assist the buyer-client in determining the amount that they can afford (pre-qualify), and show properties in that price range and locale.
3. Assist in viewing properties -- accompany the buyer-client on the showings, or preview the properties on behalf of the buyer-client to insure that the identified specifications are met and furnish the buyer-client with descriptive information including explicit photos of the property the buyer-client is interested in exposing the good, the bad and the ugly details of the property and the property location.
4. Using an exclusive buyer's agent also means that, when available, you will be shown homes that are For Sale By Owner (FSBO) by unrepresented sellers.
5. Research the selected properties to identify any problems or issues to help the buyer-client make an informed decision prior to making an offer to purchase the property. An exclusive buyer's agent never wears rose colored glasses when working with a buyer-client.
6. Advise the buyer-client on structuring an appropriate offer to purchase the selected property.
7. Present the offer to the seller's agent and/or the seller on behalf of the buyer-client.
8. Negotiate on behalf of the buyer-client to help obtain the identified property -- keeping the buyer-client's best interests in mind.
9. Assist in securing appropriate financing for the selected property.
10. Provide a list of potential qualified vendors (e.g. movers, attorneys, carpenters and contractors, environmental specialists, etc.) if these services are needed.
11. Most importantly, SplitRock Real Estate will represent their buyer-client 100% throughout the real estate transaction and beyond.

It might seem as though engaging an exclusive buyer's agent on Martha’s Vineyard Island means you are going to pay more -- but that is not the case. In most situations, an exclusive buyer's agent will accept the co-fee offered by the seller's listing agent. When no compensation is offered by the seller, your exclusive buyer agent will build the fee into the Offer to Purchase, and advise the seller of the net Offer amount. Personally, I think the transaction would be a lot cleaner if the seller paid the seller’s agent and the buyer paid the buyer’s agent. If you think about it, all fees come out of the same bag of money and it’s the buyer that brings that bag of money to the game.

While there is still some argument that receiving compensation from the proceeds of the transaction paid by the seller opens the possibility of conflict of interest or leaves the incentive for a higher sales price, exclusive buyer's agents counter by pointing out that a $10,000 savings for the buyer only amounts to a $150 difference in commission for the exclusive buyer's agent. They feel that the future business they will derive as a result of your satisfaction with a job well done is priceless and certainly worth the loss of a few hundred dollars. Besides, when you are an exclusive buyer's agent, your responsibility is to get the best terms at the best price and put the buyer's interest above your own --- THAT IS THE JOB!

SplitRock Real Estate is an Exclusive Buyer's Agency for Martha’s Vineyard real estate. As I have illustrated above, any real estate company can offer buyer agency. However, if you are considering using a non-exclusive buyer's agent, be on the lookout for:

Neglecting Agency Disclosure: By law, in Massachusetts all real estate licensees must present a potential buyer with the Massachusetts Mandatory Licensee Consumer Relationship Disclosure at the first formal meeting to discuss a particular piece of property. Any responsible agent will present you with that form disclosing the agent’s relationship. There are three options: 1) The agent is representing the seller; 2) Offering buyer representation; 3) To be a Facilitator. This means the agent represents neither the buyer nor the seller. As a consumer, you can decline signing the disclosure form; however, signing does not imply a legal agency relationship. The agency disclosure form is confusing and is generally misunderstood and misrepresented by many real estate agents. This is not a contract and does not establish a legal fiduciary responsibility. I repeat, this is not a legally binding contract. Only by entering into a buyer agency agreement (read: contract) does the agent have a legally binding fiduciary responsibility to the client. Otherwise, you are just a customer. It is expected that you will be treated fairly, but the agent’s obligations to a customer are limited to Honesty, Agency Disclosure, Material Fact Disclosures and Accounting of Funds. “The buyer should be aware that wrongful action by the real estate agent or sub-agents may subject the buyer to legal liability for those wrongful actions.” That’s a direct quote taken from the Massachusetts Mandatory Licensee Consumer Relationship Disclosure.

Avoiding Dual Agency: More and more, buyers are hiring an EXCLUSIVE Buyer's Agent to avoid "Dual Agency". In a recent on-line survey conducted by Zoomerang who gathered information from 2,100 home owners between the ages of 18 and 55, thirty-seven percent (37%) were unaware that in some cases real estate agents can represent both the buyer and seller in the same transaction by what is called "Dual Agency”. Put simply that means the agent (or agents) are working on both sides of the fence. For example, an agent with ABC Realty may represent the seller, while another agent (or the same agent) also with ABC Realty represents the buyer. The word representation is used, but what they really mean is ‘limited’ representation – very limited.

In a Dual Agency situation, both the buyer (you) and the seller must agree to the arrangement and the disclosed dual agent has to keep the confidence of both parties. Massachusetts law prohibits undisclosed dual agency. As I said before, Dual Agency does not make sense to me. How can an agent be an ‘exclusive’ agent for either the buyer or the seller if at some point that agent will have to alter the agreement because the agent or broker has a relationship with both parties, but is now expected to withhold confidential information about the buyer or the seller. The agent’s relationship to the buyer then becomes one of no relationship: the agent is now acting as a Transaction Broker or Facilitator. A Transaction Broker or Facilitator is not an agent of the buyer and the broker is not acting in a fiduciary capacity. Furthermore, it is understood that the agent is not an advocate for the interests of either the buyer or the seller. Unless the buyer and seller are totally naïve, this switching of hats surely belies a betrayal of trust. Disclosed dual agency is legal in many states but as you can see, it comes with an inherent conflict of interest as the agent, broker or company attempts to fairly exercise fiduciary duty, represent two opposing clients and collect the full commission. If this is confusing to you, don’t you think it is also confusing to the real estate agents? I believe that eventually sellers are going to refuse to consent to dual agency, and I certainly think buyers should not consent to dual agency. After all, the time when you most need advice and guidance is when you find that perfect property. That is not the time for an agent to say, I can’t help you anymore – you’re on your own.

In the case of SNIDER vs OKLAHOMA REAL ESTATE COMMISSION, June 1, 1999, the Oklahoma Supreme Court said: "Sellers' agents and dual agents do not and cannot by law give a buyer the same degree of loyalty as an agent who acts on behalf of the buyer". In order to completely remove the potential of any conflict of interest, exclusive buyer agencies like SplitRock Real Estate work 100% exclusively with buyers and do not list homes for sale.

What about the Buyer Agency Agreement? When interviewing a buyer's agent it is important to ask two questions before you agree to sign a Buyer Agency Agreement: 1) Do you or your firm take listings? 2) Do you practice dual agency? If the answer to these questions is 'yes', you will not be represented by an EXCLUSIVE Buyer's Agent. As I understand the definition of the word EXCLUSIVE, it means single, sole, not divided or shared. Many brokers are still misusing the term EXCLUSIVE in order to capture a buyer. They offer an EXCLUSIVE Buyer Agency Agreement (with consent to Dual Agency). What the heck does that mean? That is like saying, I’ll be married to you, but if I see someone I want to fool around with, I’ll do it. I don’t know about you, but my wife would have none of that and I am perfectly happy being her EXCLUSIVE husband. I prefer to keep my life simple and be respectful of consumer intelligence.

Buyers' Agency Clause: I want to caution you on one potential problem with signing a buyer's agency agreement or exclusive buyer's agency agreement contract. There may be a blanket clause stating that the agent gets a commission on any home purchase, no matter what and no matter where. If you think it is likely that you will find something without the help of the agent then you may want to specify in the agreement that a For Sale By Owner (FSBO) home you find on your own will not require payment of the standard commission. You can negotiate an adjusted commission for exceptions if your agent agrees. You also may want to stipulate the geographical areas your relationship covers. For example, if you buy a property on Cape Cod, you may not want the counsel of your buyer's agent and do not want to owe the agent a fee. SplitRock Real Estate can refer you to a competent exclusive buyer's agent on Cape Cod, or anywhere else in the USA. You can also go to The Buyer's Voice, The Buyer's Choice to find an EBA in another area of the country or state. Once you are on the NAEBA website go to the 'find an agent' section.

"In-house" Listings: Another word of caution: If you are working with a traditional agent (or listing agent) rather than an exclusive buyer's agent, be aware that you might get a little harder sales pitch for their own listings, or the listings held by their brokerage firm simply because they are obligated to make every effort to "sell" their listings first --and they make more money that way, too. SplitRock Real Estate is an Exclusive Buyer Agency and our committed task is to find the best property, with the best terms, that best suits your needs no matter how long it takes.

Release Clause: Make sure you have a "release clause" in your buyer's agency agreement just in case you find out you just don't get along with your agent. This will allow you to sever ties without any future problems. It is better to end an unhappy or uncomfortable relationship before you get too deeply into the home buying process. The contract may stipulate a protection period. This means, even if your contract is no longer in effect, should you buy one of the properties your buyer agent introduced you to during the term of that contract, being the procuring cause, the buyer agent gets paid. I think this is only fair.

If you would like to learn more about Exclusive Buyer Representation please follow this link > What is an Exclusive Buyer's Agent?