Buyers Agency, the Best Kept Secret—Part 3
Seller Acceptance Of Buyer Agency
Sellers, however, are slowly coming around to the idea of buyer agency. They see the buyers´ agents as bringing them a group of motivated, well-informed, financially-qualified buyers who can get to closing with little difficulty. Sellers are also happy not to be responsible for an agent´s mistakes, which was the case when cooperative agency was the norm and the agent was considered a subagent of the listing agent. A buyer might sue everyone for failure to disclose a problem with the house that the subagent knew about but did not disclose and the seller might end up with legal exposure even though they had never spoken to that agent about the house.
Buyer agency is still a tough sell, however, for the individual agent. It is always better to have 100% of the commission than to share with another agent. Agents try to find buyers for their listings and get those deals to finalize without violating their obligation to get the best price for the seller. So most companies practice what is known as “dual agency”, allowing their agents to be on both sides of the transactions and setting guidelines to avoid sharing of confidential information and to minimize conflicts between the duties to opposing parties. The listing agent brings the buyer and attempts to be fair to both as the terms are set. This is in conflict with common law agency principles and is a tight rope that is tough to walk, but is permitted under current Pennsylvania law. Sometimes two agents in the same office represent both sides of the deal, and if there is an issue that needs to be addressed at a higher level, their broker in charge has the unenviable position of having to decide between two clients to whom he or she has the same duties.
Exclusive Buyer agents
Foregoing listings, which is what a true exclusive buyer agent does, can mean loss of income in an already crowded field. (The barriers to entry in real estate are low, with many companies hiring anyone who passes the test as an independent contractor, requiring no payment of benefits or other employment costs.) Many agents will not represent both sides of a transaction, and act only as a buyer´s agent in a particular deal under an agreement that says they have duties to the buyer and not the seller. But only one-half of one percent of agents in the United State practice exclusive buyer´s agency-they only represent buyers, according to the National Association of Exclusive Buyers Agents. The concept has gained recognition in the commercial arena, with several nationally recognized companies touting themselves as “tenant-representatives” with success. But few companies sell themselves as buyer-only residential companies.
Benefits Of Buyer’s Agents
Studies have shown that people working with buyers´ agents see more homes, pay less and buy more quickly than those who do not have this representation. The National Association of Realtors recognizes that buyer agency is desirable and offers a course called Accredited Buyer Agency to its members, but there is no requirement that the graduates adhere to any stricter requirements than their state law permits, so they are free to practice dual agency. Those that practice exclusive buyer agency have charted their own course.