Buyer’s Choice Realty blog

Are you aware that the EBA difference is to your advantage?
 

If the real estate company your are considering represents both sellers and buyers, ask yourself these questions:

1. Do they benefit more from you paying a lower or higher purchase price?
   
2.  Why would they choose to protect you over the seller?
   
3. How many of their own firm’s listings will they nudge you toward?
   
4. Would they prefer you buy their listing or some other firm’s?
   
5. How many problems and issues will they want to uncover for you?
   
6. Will they recommend a thorough home inspector and inspections?
   
7. Will they negotiate repairs and price cuts after the home inspection?
   
8. Will they help you walk away from a lemon, or try to convince you to buy?
   
9. How eager will they be to help you walk away from their own firm’s listing?
   
10. How will they insure confidentiality to you and the seller? 
    
11. How does their company explain this conflicted relationship?
    
12. Will they hold back money for you to cover your walk-through issues?

A recent Wall Street Journal article raised the question as to whether or not real estate agents have a secret agenda in steering buyers toward properties that will put more money in the agent’s pocket.

Certainly the idea of pocketing an extra $10,000 on a purchase has a lot of appeal to an agent as does a cooperating commission as high as 10%.   But the National Association of Realtor representatives say the Realtor Code of Ethics should keep buyer agents away from steering. 

Laurie Janik, NAR’s general counsel comments that the  NAR “group’s code of ethics requires members to show customers properties that meet their needs, regardless of the compensation offered to agentsâ€?.   

And Danny O’Sullivan, a Senior V.P. for Long and Foster says “Ethically, if you are representing the buyer and taking the buyer to a place where you are getting an increased commission, the right thing to do is tell them.”  More:

And for those Buyer Agents who have had training such as is given in the ABR designation program (which is one of the courses I happen to teach), there is a strong emphasis to disclose and gain the permission of your client to accept such a bonus.
 

But one might ask the question if it is at all appropriate to accept such compensation.  Some builders are builders are offering the buyer’s agent jumbo commissions of 10% or more.  Some bonuses offered to buyer agents are premised on the condition that the buyer pays the full asking price.  Can a buyer’s agent in a fiduciary relationship with a buyer take advantage of these lucrative offerings? 
 

It seems pretty clear to me that anything that would entice a buyer’s agent to have their buyer purchase one property over another is dead wrong.  In fact, it might even be a crime.   While this may have been an acceptable enticement to an agent working as a seller’s subagent, an agent working for the buyer it is just not acceptable.
 

This speaks to the importance of a home buyer contracting with their buyer’s agent and agreeing upon a fee to be paid the buyer’s agent at closing.  Why should the Listing Broker or the seller determine how much compensation or how much additional bonus a buyer’s agent should receive?   They shouldn’t.
 

The way I see it, any compensation or bonuses offered in the transaction above the amount agreed to in the buyer agency agreement should go back to the buyer.  To quote Tom Early’s words in the WSJ article, “It’s their money�.