Exclusive Buyer Brokerage" is becoming a mode for serving the business or corporate transferee. The following is a compendium of articles that have appeared in professional and consumer media supporting the concept. (These references relate to corporate and relocation benefits....a bibliography of consumer-oriented articles appears on our web site....
"A buyer agency program is the best homesale assistance program you can have. Most buyers need representation to "buy right". It is in the corporation's best interest to help the transferee make the best possible house purchase, because one day, that buyer will turn into a seller. The well-bought transferee house either sells promptly and never shows up in the employee relocation program inventory or shows up as a saleable property.
"I submit that the best possible real estate transaction for the buyer (the incoming transferee) does not happen through the traditional real estate process. In that process, the purchaser relies on agents for the seller for help in finding a property, for information, and for advice. No matter how many agents the buyer works with, all of those agents represent the seller via the listing agreement...
..."There is an alternative. The better choice for the buyer is to employ his or her own agent through a written buyer agency agreement. Buyer agency is specifically and knowingly formed. The buyer agent represents only the buyer and has no other loyalty in the transaction. The buyer agent puts and keeps the buyer first. The buyer and the buyer agent have a clear understanding about the buyer's housing needs, objectives, money and financing situation, time frames, and compensation. This understanding is kept confidential between the buyer and his agent.
"The buyer agent refuses all agency duties to the seller and to the seller's agent(s).
Buyer agency is separate and distinct representation for the express benefit of the buyer so that the buyer has better information and can make better buying decisions.
"Buyer agency is value added. Buyer agency saves time, money and hassles."
Earl Guss, in "Buyer's Agency", in Relocation/Realty Update
"While residential buyer brokerage is still working for acceptance inside the real estate industry, corporate America is rapidly giving the concept its stamp of approval.
"For companies that relocate hundreds or even thousands, of employees annually, embracing buyer brokerage is not a matter of philosophy. It's a matter of money.
"The savings come in a variety of ways", says Tim Stockwell, head of relocation for U.S. Sprint, headquartered in Kansas City, Mo. "The feedback we get from our employees tells us they are more comfortable and confident in the transaction if they have an agent working for them.
"Employees get a better idea of housing in their new community and tend to find what they're looking for faster. From the company's viewpoint, that means the employee is out of interim living faster, they get settled into a community faster, which means they are more productive faster, and all that is a savings to us.....
Agency Law Quarterly
"Exclusive agencies are best. They remove any conflict of interest, which is the main reason for considering a Buyer Broker in the first place".
Changing Times
"A buyer agency program is the best homesale assistance program you can have. A well-bought transferee house either sells promptly and never shows in inventory, or shows as a salable property."
Earl Guss, in "Buyer Agency, ...the Best Homesale Assistance Program", Mobility.
"Sprint's enthusiastic endorsement of buyer brokerage is clearly the company's most talked about relocation program. It is a concept on which Stockwell has spoken extensively and supports wholeheartedly:
From our viewpoint, the primary motivation is that we can finally give our employees factual information to balance some of the emotionalism involved with purchasing a property. Given facts, people will make wiser buying decisions".
"Stockwell says that while Sprint's new relocation programs have been in effect for three years, "We are running about $ 3,000 less per move than we did in 1987. We are able to offer more benefits than we did then and we're doing it for less money".
"Relocation may become one of the driving forces in this growth, (of Buyer Brokers). Stockwell cites two advantages for relocation departments. First, they have happier transferees because as they move to a new and unfamiliar community, they have a representative on their side who knows the territory. Second, very often the buyer broker helps the relocation employee make a smarter buy. And a wiser home purchase decision means the property will be easier to sell in the event that the employee is transferred again in a few years."
"Relocation at Sprint has a Special Ring To It", from National Relocation and Real Estate
In recent years, companies have recognized that educating the transferee on making a wise home purchase decision could help alleviate growing problems caused by employees' dissatisfaction with the appraised value of their home and corporate homes in inventory. Toward this end, most corporations are encouraging or requiring the use of home finding and other similar destination services.
"Checking the Pulse of the Relocation Policy"
Mobility
Meanwhile, on the real estate side, there is an emerging trend called "buyer brokerage".
As agents begin to take their responsibilities to their sellers more seriously, the attractaiveness of buyer brokerage will become even more evident to the incoming transferee and to the corporation seeking to help them make their best move.
"First of all, for the corporation it signals another opportunity to serve the transferee's needs better - and perhaps to save some money, directly and indirectly - in the process."
Charles M. Dahlheimer, "Buyer Brokerage: a Trend for the Nineties". National Relocation & Real Estate
What's the future of the buyer-brokerage business?" Some traditional brokers refuse to even recognize its existence. Consumers are becoming more aware of the realty of agency relationships and the corporate client is paying attention more and more to the destination purchase.
From the corporate employer's point of view, this seems to be holding the door wide open to sell the corporation on some very specific brokerage services, ranging from simply re-packaging some existing programs, such as turning listing services into marketing services; offering advanced area counseling, pre-purchase destination appraisals and inspections services; all the way to offering a radically new (but totally logical) approach to the destination purchase; buyer brokerage service.
For the Relocation Director, National Relocation Magazine by Charles Dahlheimer
"The corporation that supports a buyer agency program reaps other benefits as well. The transferee feels good about the move. The interaction between the transferee and the agent is very positive. The transferee does not feel alone in the process and feels good about the company Sponsoring and supporting a buyer agency program shows that the company cares about the transferee. "Some companies are reluctant to begin a buyer broker agency program because they believe that the legal exposure created by becoming so involved with the employee's home purchase is too great. great. I suggest that they already have liability exposure because they are expected to know what they are selling, whether or not they are in the chain of title. Corporations make attractive lawsuit targets because of their "deep pockets". Therefore, by promoting good buying decisions among transferees, support for a buyer agency program not only helps decrease loss-on-sale and inventory costs, it may help reduce the exposure corporations face as sellers of inventory properties when that employee is transferred again.
"Buyer agency does not cost, it pays. Do not make another move without it."
"Buyer Agency...the Best Homesale Assistance Program, by Earl Guss, Mobility
"Nader again held up exclusive buyer brokerage as the only legitimate option for homebuying consumers."
Agency Law Quarterly.
"Work with a brokerage
where the realtor will represent you, the buyer, exclusively".
"Consumer Watch" the Boston Globe.
"The feedback we get from our employees tells us they are more comfortable and confident in the transaction if they have an agent working for them...From the company's viewpoint, that means they get settled into a community faster, are more productive faster, and that saves us money, too."
Tim Stockwell of Sprint, in Agency Law Quarterly.
Employers Say Hiring Buyer's Broker is Good Business:
Corporations are waking up to the fact that buyer's brokers may save them money when they are relocating employees.
"Corporate relocation professionals are realizing the benefits of offering transferees destination services.
"Exclusive buyer brokers can save corporations money" by negotiating the lowest possible price for a home, the consultants said. "They can save transferees time, expense and stress by providing lists of reliable service vendors in the new city, thereby helping them make wise buying decisions."
A Runzheimer Report
"(Exclusive representation enables)
comprehensive assistance and representation which would enable the buyer to make the best possible decisions.Exclusivity becomes the key...buyer representation can't be a neutral position. In good conscience I have never believed that I could properly advertise, market or represent myself as serving the buyer if I also carried listings. Accepting listings creates an inherent conflict of interest, diluting the value of buyer agency to the consumer.
Exclusivity is therefore the key...that feature which would give our clients the added measure of confidence when enlisting our services.
In its continuing effort to increase profits, the real estate industry has managed to achieve exemptions to the common law of agency in many states. Understand these exceptions enhance business, they are really not addressing the major concerns of consumers.
The buying public has been educated to be suspicious of anyone selling anything, and homebuyers are instinctively wary of any real estate system which attempts to service everyone's needs...
Exclusivity has been the key to reducing the suspicion quotient...by eliminating the opportunity for business conflicts, a comfort zone is created for the client a higher level of trust when dealing with an exclusive agent. There is no question as to where our allegiance lies."
Bill French; William French Buyers' Services.
"And therein lies the rub. The shift to buyer agency is not a simple as just saying, "I are one!" Representing buyers involves a whole new set of skills and practices if it is to be effective and provide a real service to the buyer. The alternative, lip-service to buyer representation, just might not pass muster, particularly as the legal spotlights focus more closely on this issue and consumers become more aware of their options. ...
"The buyer's agent has no such help, (from other agents helping sell their listings.) Either he or she performs well and satisfies agency obligations to the buyer-or the buyer's interests are not proper-ly represented. There is no one else who will pinch hit.
"The buyer's agent has to know the marketplace well in order to advise on values, pricing, terms and conditions of sale. The buyer's agent has to really understand the ins and outs of negotiation. He or she is no longer just taking an offer from a buyer and explaining it to the seller or the seller's agent.
"The buyer's agent must be able to adapt skills learned and practices as a seller's agent to the new conditions of the buyer-agency playing field. For example, sellers' agents must know how to look for defects in a property, as the law holds them liable for conditions that they "should have known" as professionals. The buyer's agent must look for these conditions - disclosed or hidden - when counseling his or her buyer client.
"Just as the listing agent must know how to select and present "comps" to help the seller arrive at a listing price, so the buyer's agent must know how to use comps properly to determine a reasonable offer. Knowledge of changing marketplace conditions becomes critical for the buyer agent, as, such factors can have a great impact on the buyer's future resale value.
"But the real complication occurs when an agent works as a buyer's agent showing a prospective purchaser homes in the MLS, then finds a new listing i her own company's inventory that fits the buyer's needs. What to do? Through her relationship as an agent of the company, she is already committed to represent her company's listing clients. But, she also has a buyer client who needs to be shown one or more of her own company's listings.
"The solution is not a simple as terminating the relationship with the buyer and slipping back into the seller-agent role. The buyer has probably shared information, confidences, etc. with his or her agent that could have an impact on the negotiation process.
"The agent cannot do anything about her relationship with the seller, as this comes from the listing contract and her legal relationship as an agent of her broker. She cannot opt to not show her client any of her own company's listings. That would violate fiduciary relationships on both sides!
Yet excluding suitable properties because they are listed by her company can hardly be consistent with that obligation.
"An agent in such a position could decide to shift to a "disclosed dual agency" role"..."but because of the complexity - and perhaps even duplicity - inherent in the role of disclosed dual agents, some practitioners are exploring a "facilitator" mode, where neither party is promised representation." (The author goes on under a paragraph entitled, "The Middle Ground is Muddy"!, and it becomes a convoluted and complex area.)
Charles M. Dahlheimer, in Buyer Brokerage: A Trend for the Nineties, in National Relocation and Real Estate, Jan/Feb, 1989.
