Byline: Barbara E. Hernandez
Apr. 27--It's a buyer's market, and that means it could be time for a buyer agent.
Exclusive buyer agents never list property. They never sell. And, they say, unlike many agents working at big real estate firms, they will not have their loyalties divided between representing a buyer and a seller.
"It's a buyer's market, and clients shouldn't feel pressured or tricked into making decisions because sellers up the line are desperate," said Jon Boyd, the Ann Arbor, Mich.-based president of the National Association of Exclusive Buyer Agents.
According to the National Association of Realtors, the fastest-growing designation is its accredited buyer representative, or buyer agent. Although only 3 percent of Real Estate Buyer's Agent Council members are exclusive buyer agents, more and more agents are turning to those with the money and power in today's tougher housing market: the buyers.
Although many people think of exclusive buyer agents as working with corporate-transferred captains of industry or socialites, that's not the case. Buyer agents are typically paid the same as any real estate agent, at closing with both the buyer's and the seller's agents dividing the commission.
"The people are working with us because we have a niche in the market they like," said Ron Porter, the Northern California manager of HomeBuyer Agents, an exclusive buyer brokerage that covers eight counties, including Contra Costa and Alameda. "We don't cater to the wealthy, but it may be that some people in a higher income bracket realize what they're getting with us."
National Association of Exclusive Buyer Agents was created in 1995, an era when the real estate market slowed to a crawl and home inventory rose. The Real Estate Buyer's Agent Council, which started in 1988, became an affiliate of the National Association of Realtors in 1996.
About 9 percent of NAR members are members of the buyer's agent council, and 11 percent of firms are exclusively for buyers, said NAR spokesman Walt Molony.
Marc Gould, executive director of the council, said that the majority of buyer agents work in real estate brokerages that both sell homes and assist home buyers.
An accredited agent takes two days of classes and one or two elective courses, and must complete five buyer transactions in five years to become certified, Gould said.
"It is one of the largest accreditations and one of the fastest-growing," he said. "Consumers realize they need someone with that extra step of training."
Michael Tejeda, 62, and his wife, Ellen Geisler, 59, work together at RE/MAX Allied Brokers in Walnut Creek .
Tejeda, an accredited buyer representative, works exclusively with buyers despite being affiliated with a brokerage that accepts listings and sells homes. He chooses to work without a written agreement, something many buyer agents use.
Tejeda said he started in the real estate industry in 1995, when brokers would tell agents, "Go out and get buyers!"
"At first, it was an easy way to get started in a slow market," he said. He said listing agents would laugh at being called a buyer agent because at that time transactions were so seller-focused.
"That doesn't happen anymore," he said. "They take the deals where they can get them."
Tejeda said that clients also have changed. He said that many people, now used to keeping agents at arm's length with Internet listings and virtual tours, are wary of making a connection at an open house, which is how buyers find their agents 7 percent of the time, the NAR reported. The majority of home buyers, 40 percent, depend on referrals, ensuring little exposure to multiple agents.
Corrina Dominguez, an accredited buyer agent with Marples & Associates Realtors in Brentwood, said that being a buyer agent makes her stand out in a crowded field.
"People are dissatisfied where you see your agent at the start of escrow and don't hear from them again until the end of escrow, or one that disappears until you're willing to make an offer," she said. Although Dominguez still takes listings occasionally, she considers herself primarily a buyer agent.
Although buyer agents and other agents share the same basic knowledge, education and ability, buyer agents said they spend more time understanding and advocating for their client. And the main difference between a buyer agent and a standard one can be significant to a buyer.
In the past, because the commission is usually paid by the seller, most agents wanted to represent sellers. They had a fiduciary responsibility to that client to get the best deal, so if they brought in a buyer it was questionable whether they would be as equally trustworthy to that client.
Today, agents are legally bound to disclose that they may represent both buyer and seller, but exclusive buyer agents can sit firmly on only the buyer's side.
Both Dominguez and Tejeda said that buyers can be manipulated in a dual agency scenario. Tejeda called it "double endings," and she has heard some listing agents brag about how they doubled their usual commission by representing both parties. "I'm sure if their clients heard them, it probably would have cost them the transactions," he said.
Boyd is quick to say that NAEBA doesn't advocate against dual agency, but that the consumer needs to understand its ramifications.
"There are a lot of Realtors who will not be in business a year from now, so maybe a few will be a little less ethical," he said. "The consumer needs to know there's a 30 percent chance they can end up in a dual agency situation."
One way to avoid the dual agency situation when an exclusive buyer agent isn't available is by using an agent or brokerage with no listings in the area, Tejeda said. "I think both sides are better off having their own advocate."
Carol Heath-Kim, an agent with Prudential California Realty in El Cerrito, handles mostly listings but doesn't think exclusive buyer agents are better than agents who deal with both sellers and buyers.
"I think representing both sellers and buyers is the way to go," she said. "Exclusive buyer agents are really rare."
Heath-Kim said that because Prudential is a large company, like Coldwell Banker, the chances of a buyer getting into a dual agency scenario are higher, but she doesn't see it as an ethical crisis that hurts clients.
"We walk a fine line and we've got to be straightforward and honest," she said. "It's been very successful and works well for us."
Barbara E. Hernandez covers real estate. Reach her at 925-952-5063 or bhernandez@cctimes.com.
Copyright (c) 2007, Contra Costa Times, Walnut Creek, Calif.
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