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I have been looking for a house and have gone through numerous real estate agents because I never quite feel like they are working very hard for me. I just learned about the National Association of Exclusive Buyer's Agents and am considering working with them. Does anyone have any experience with this group?
Please forgive the long post - but I wish all home buyers always asked the sort of question you've asked!
I cannot answer your very specific questions about the organization you mention.
But I may be able to offer some general observations which can help a great deal.
First - I'm a Realtor, and I've been representing buyers for many years. It's likely we're in different states. But these general principals should apply wherever you are:
I'm guessing you've been calling about various houses having seen advertisements for them. If that's the case, you are, of course, absolutely right: unless your state is utterly different than mine, the agent you wind up speaking with is actually bound by law to represent the other party, the seller.*
My experience is that, yes, depending on the specific person you find, you'd be better served by settling in with one Realtor (perhaps from the organization you mentioned on your original post) who can actually put your interests first, and advocate for you. In Vermont, consumers have choices to make (this must be disclosed in writing at "first substantial contact") and one of those choices is to be represented by an agent or not. To do this you'd actually enter into an agreement, but only after being satisfied that this was to your advantage. In Vermont, an agent can even be compensated with a Buyer Agent fee which is made available out of the dollars the seller pays out of his/her proceeds - as commission - which allows the buyer actual representation and advocacy, without having to pay extra for it - (if it wasn't paid to a buyer's agent, it would typically remain with the listing agency). To restate this - let's say you end up buying a house for (round numbers for simplicity) $100,000. And let's imagine the Listing Agency (the company with the yard sign in front of the house) is charging the seller 6 % commission. The listing agency offers a commission split and labels the dollars two different ways for convenience. The listing agency will pay the company that brings a buyer CLIENT to a closing, a 3% fee for representing the buyer - or the same dollars (just labeled differently) if the buyer is a CUSTOMER, not a client. In Vermont the buyer, as a consumer, has a great deal of choice over how this works.
I've made this a bit complicated, by trying to fill in a lot of detail - but the idea is simple: you, as a consumer, have a choice. At least in Vermont you would... That's partly a consumer protection, demanded by generations of buyers before you. And since the laws of agency were rewritten and passed on July 1 1995, to reflect current practice, as demanded by consumers of real estate services.
So my suggestion would be to find a local agent who's part of the organization you mentioned, and/or ask some friends, neighbors, coworkers or Real Estate Attorneys for recommendations. Then interview the agents who's names you hear until you find one who seems to have solid answers.
Call and ask for an hour free of any obligation or cost to interview the agent in his/her office. Ask things like: Do you represent buyers? May I see some written references from buyers? How exactly and under exactly what circumstances will you and your company be paid? What exactly is the source of the funds which you'll collect? To whom will you owe legal duties while assisting me? How long have you been representing buyers as clients? Do you have any advanced certification? Will I be working directly with you, or will you pass me on to an assistant? Is this your full time occupation? How will you provide me information and details about all the properties which fit my criteria. How often will we speak on the phone? What if I decide to buy something your company has listed? What if I decide to buy a property from an unrepresented seller (fsbo)? What mortgage lenders would you suggest a person in my situation speak with? What Real Estate attorney? What professional property inspector?
Best of luck!
David Beckett
Burlington, VT
* The laws of agency vary greatly by state. A good agent should begin by helping you understand the choices you as a consumer have in the state in question.
Marc, have you ever signed a Buyer Agency Agreement with any of these Agents you've not been happy with? If you want a commitment from an Agent, it's a two-way street. When I first became an Agent, I would show anything to anyone, with no agreement. I spent a lot of time on them only to find that they drove by a house and called the listing agent.
I am not a member of the organization you mention, but if a Buyer signs a BAA with me, they commit to me and I commit to them. We have a business relationship. In signing the agreement, they are telling me that they are serious and worth my time and effort. They can vacate the Agency Agreement if, at any time, they believe I am not living up to the Agreement.
If you don't sign an agreement committing to an Agent, don't expect that Agent to drop all of their "signed" clients for an "iffy" client, at best.
I would venture to say that if you go with an Agent who is a member of this organization, they will want you to sign a contract. As any Agent should.
How licensees can work with buyers or sellers is state specific.
NAEBA is a fringe group that only represents buyers. Most licensees can and do represent both buyers and sellers.
NAEBA will tell you that by working with a member of NAEBA, you will not be persuaded to buy an in house listing, and that there are potential dual agency conflicts if you do.
NAEBA won' tell you that they might also have a buyer with the same interests and qualifications as you, so there is a risk that a property you like will also be liked by another client.
Look for a Realtor with their ABR designation. CRS and ePRO a close second. Better yet, find one with all three.
Realize that as long as a buyer's agent is paid a commission by the seller, it is in their personal best interest to have you pay top dollar for whatever home you buy. Not saying all buyers agents work that way, but it is how the system works.
Realize that as long as a buyer's agent is paid a commission by the seller, it is in their personal best interest to have you pay top dollar for whatever home you buy. Not saying all buyers agents work that way, but it is how the system works.
Maf, I resectfully disagree with you. For some reason you have been terribly misguided by this myth.
If a buyers agent is working against his client to have them pay more for the home so he can make a higher commission, then what difference would it make whether the buyer or the seller is paying the commission?
The sellers agent is going to negotiate for the best price and terms for his/her seller.
The buyers agent is going to negotiate for the best price and terms for his/her buyer.
The amount of commission has absolutely nothing to do with negotiating the price and terms of a property.
It would be foolhardy and counter productive, and a serious violation of the Realtors Code of Ethics and a possible violation of the fraud laws for an agents to get their clients to pay more money so they can make a slightly larger commission.
Realize that as long as a buyer's agent is paid a commission by the seller, it is in their personal best interest to have you pay top dollar for whatever home you buy. Not saying all buyers agents work that way, but it is how the system works.
What you are implying here is that money rules, that some people are willing to sell their integrity for money. You may be right (some will), but think about the math here for a second...
On a $220,000 home a 3% commission would be $6,600; if that home were sold for say $230,000 because I was illegally colluding with the selling agent, that commission is now...$6,900. Now remember, that commission doesn't go directly to ME. It goes to my brokerage, who takes a percentage (in some cases 50%)...so now the difference is between $3,300 and $3,450.
I'm sorry, but I wouldn't risk my license status, and the ability to look in the mirror each morning for $150!
Realize that as long as a buyer's agent is paid a commission by the seller, it is in their personal best interest to have you pay top dollar for whatever home you buy. Not saying all buyers agents work that way, but it is how the system works.
Actually maf, the way the system works is that we as realtors are required to do what is in our client's best interests. That's not saying that all realtors do it that way but I believe that most full time professional realtors are more interested in satisfying their client's interests with hope of getting future business and referrals from those satisfied clients. After all, that's how you build and maintain a successful business. In general, realtors who put their client's interests second to theirs don't stay in business very long. If what you say had validity I would be getting full price offers on all of my listings and that is just not happening.
Realize that as long as a buyer's agent is paid a commission by the seller, it is in their personal best interest to have you pay top dollar for whatever home you buy. Not saying all buyers agents work that way, but it is how the system works.
Buyer's Agents get the majority of their work through referrals from happy former clients.
Buyer’s Agents make their clients happy by negotiating the best deal for the home buyer.
I picked my agent based on a great referral from a friend who was very happy with his agent's services and the price negotiated for their home purchase.
The agent earned $ from my friend's home purchase + $ from my purchase + $ from a client I referred to him...and so on.
If my friend had been displeased with the performance of the agent or felt the agent was not negotiating the deal in their (the buyer’s) best interests, he would not have recommended the agent to me and the agent would have missed out on a lot of future business as a result.
Providing superb services for your clients is the best business model in a referral-based industry.
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