Article Archive

Buyer brokers are a new trend

Our consumer-oriented society has shown a lot of interest in the newest trend to impact the real estate industry - buyer brokerage. Homebuyers now have the option to choose a real estate agent who will represent them exclusively in the purchase of their new home. In the traditional home-buying relationship, all agents in a real estate transaction automatically represent the seller.

Many buyers have assumed that traditional real estate agents were actually representing them. In fact, a Federal Trade Commission study released in 1984 revealed that 72 percent of homebuyers believed that the agent represented them in their real estate transactions. Many homebuyers would still be surprised to learn that the traditional agent has a legal and ethical duty to the seller because of the agency relationship between agent and seller.

A new contingent of real estate agents who practice exclusive buyer brokerage have become advocates for the buyer, placing them on an equal negotiating level with the seller. The practice originated in California and has spread to the East Coast. In Massachusetts, home buyers can look for a “buyer’s broker” before they begin their search for a new home. First time homebuyers may find the services particularly appealing because they are unfamiliar with the entire home buying process.

Buyer brokers are still considered unique, but their impact has grown tremendously. The real estate industry has addressed this trend by supporting agency disclosure laws in 44 states, including Massachusetts.

You may be wondering just how a traditional real estate differs from a buyer broker. The buyer broker uses training and professional expertise to get the best deal for the buyer. The traditional agent uses the same skills and expertise to get the best deal for the seller. The selling agent is required to work fairly and honestly with buyers, but must put the seller’s interest ahead of all others.

Buyer brokers commit their professional services only to the buyer. The buyer is a client, not a customer. A buyer’s broker won’t waste the buyer’s time with strong sales pitches for incompatible properties. Since they’re not trying to sell a particular house, the entire market is open to buyer brokers, including those for sale by owner, multiple listings, auctioned properties and those owned by banks. Buyer brokers have even been known to solicit neighborhoods for clients when necessary.

Home Source, Worcester Telegram & Gazette, August 26 - September, 1992

Back To The Article Archive