Tuesday, August 14, 2007

United We Stand, Divided We Fall: Buyer Agency and the Fragmented World of Real Estate

exclusive buyer agent seattle, exclusive buyer's agent seattle, exclusive buyers agent seattle, real estate, buyer agent

In a recent Accredited Buyer Representative class, it came as no surprise that out of approximately 36 attendees, there was only one exclusive buyer’s broker in attendance. Although most of the information presented in the class was informative, insightful, and the content was well-delivered, it was alarming when two Realtors announced to the class--on two separate occasions--the “old saying” that “buyers are liars.” The first thought that came to mind was, why?” If these Realtors really believe that buyers are “liars,” then why are they even in this class to begin with? Unfortunately, with the exception of a very small few, this is a pervasive belief among traditional agents and brokers—a belief not shared by those who have chosen to serve buyers only.

This was a three-day class, and each day was eight hours in length. It was just enough time to experience the “niceties” of certain traditional Realtors, who demonstrated their narrow-minded worldviews, values, and norms. Some had behaved abrasively, as well as, condescending. They revealed their own prejudice beliefs, as many before have done in the past, that unless one is part of the herd, they do not deserve any professional courtesy.

It was an eye-opener to see the friendly expressions of certain Realtors suddenly change into seething animosity, when told of the decision to represent buyers only. You would have thought a mortal sin had been committed. The consumer value of having the option to avoid dual agency completely did not compute within the minds of these people.

Some traditional agents have gone as far as to say that dual agency is not even an issue, as long as consumers liked them. However, it is an issue when the dual agent cannot negotiate for either side; or when a dual agent company has to remain neutral in the midst of a transactional conflict. What are dual agents being paid for, if they cannot provide the valuable service of negotiation, and if they cannot provide advocacy for neither side?

Now we turn our attention to the culture of exclusive buyer agency. This culture is small, but growing—struggling for recognition and acceptance by Realtor associations that normally favor traditional real estate brokerages. The associations they struggle with do little to educate the public about the option of exclusive buyer agency. Furthermore, they add to the confusion by blurring the real meaning of this agency option. For example—the Washington Association of Realtors has a standard pre-printed form called an “Exclusive Buyer Agency Agreement,” yet there is a clause within this form that gives the option to consent to dual agency. If an agreement is truly for exclusive buyer agency, then dual agency should not even be a part of it, because dual agency is a non-issue where this agency option is concerned.

Honestly, a buyer agency agreement becomes exclusive only when the option of dual agency has been removed--otherwise, it is just a buyer agency agreement.

Delving further into the world of exclusive buyer agency, we see a rift within the fragment. This culture is centered on an association that has let former members down in the past. This association is NAEBA. Instead of unity and camaraderie, there were arms-length adversarial attitudes within the group, and no support—as promised in their membership literature. When an exclusive buyer agent breaks away from the disappointing experience, they are then discredited for not belonging to the organization anymore. For example—in a recent Blog—an exclusive buyer’s broker touted the news of an article he claimed was recommending that buyers only work with exclusive buyer agents who are members of NAEBA. However, upon review, it was realized that the article only mentioned that buyers can find an exclusive buyer’s agent through NAEBA. The article made no specific endorsement advocating the sole use of NAEBA members.

It needs to be said that not all professional exclusive buyer agents are NAEBA members, mostly for the reasons already mentioned above.

The final fragment we will explore in the real estate industry is the culture of the discount brokers. Like the exclusive buyer agents, they are new to the industry, and they have also drawn the ire of the industry for going against the traditional ways of doing business. However, they have taken an adversarial position against all Realtors, including buyer agents, and inadvertently exclusive buyer agents. They have unfairly shrouded the entire industry under a cloak of suspicion—leading many consumers to believe that they are the only credible option available. Because certain discount brokers have ties to the media—which is notorious for delivering biased information—they are able to spread their inaccuracies nationwide. They profess that consumers are victimized by the industry, yet they fail to take into consideration that not all real estate professionals are alike. They are content to make sweeping generalizations about matters they are not fully informed on. Certain discount brokers contradict themselves by claiming that they do not practice dual representation (dual agency), yet if a buyer purchases a property through them, and the property is listed with their company, this is dual representation on the part of the company.

Bottom line:

The real estate industry is about serving the best interests of our clients, period. It is not about our egos. It is not about our “net gross sales last year,” nor is it about out-selling “Sally Sells-A-Lot” next door. It is not about spreading deceitful propaganda and half-truths to induce consumer action, and it is not about suppressing valuable agency optionsnor alienating the practitioners that choose to make these agency options available. It is only about the welfare of consumers, respecting their right to be represented, and respecting their freedom to choose how they want to be represented. They have a right to full disclosure as to what their agency options are, because without full disclosure, they cannot make fully informed decisions on matters that can materially affect them.

Food for thought:

Will the real estate industry ever gather and reconcile its fragments for the sake of consumer welfare? Will real estate professionals ever learn to respect each other, and the diverse cultures that have evolved within the industry? Will old-school Realtors ever learn to understand that these diverse cultures are no less deserving of professional courtesy and mutual respect? Will certain discount brokers ever stop spreading inaccurate propaganda and half-truths to induce consumer behavior? Time will surely tell.

Positive change in the real estate industry will require integrity, diplomacy, transparency, tolerance, mutual respect, and understanding. Until we have these ingredients, we cannot fully serve the best interests of consumers, nor can we become a united industry.

1 comment:

Anonymous said...

amen! from an east coast EBA

my blog