What is an exclusive buyer’s broker and what is not
When we say “exclusive buyer’s agent,” we mean an agent who works in a company that always supports buyer’s in their quest for the best property at the best possible price, without exception. Exclusive buyer’s agents, like us, never represent sellers who are trying to get the highest price for a property.
Designated: In Massachusetts, companies either allow designated agents or they don’t.
A non-designated agency company makes a conscious choice to focus on the needs of buyers (or sellers) only. It means that the company is referring business out in order to avoid the conflict of interest inherent in working for a buyer wanting the lowest price, and the seller seeking the highest price. Non-designated agency firms focus all their training and office meeting time on doing the best job for the single side of the purchase, buyers or sellers. Currently, I know of no sellers-only companies in Massachusetts.
In a designated agency company, some of the time one agent in the company will be supporting a lower price and more buyer rights (like mortgage and inspection contingencies) while another agent will be supporting the higher price and no contingencies on the same property.
If the agent works in a designated agency firm, their company represents buyers and sellers. They are not exclusive buyer’s agents, as defined by the National Association of Exclusive Buyer’s Agents. They are agents who work as buyer’s agents in a company that also values the needs of sellers.
They can say “exclusive” because their buyer clients are bound to them with an exclusive contract (this means the agent will be paid when the buyer purchases a house). House listings that are on the Multiple Listing Service, Zillow, or other data service are mostly “exclusive right to sell” contracts. This means that the listing agent will be paid when the property sells, no matter who the buyer’s agents is at closing.
Why do we choose exclusive buyer’s agency, non-designated agency?
Why do so few firms do this?
Our agents work cooperatively. Our focus can stay on what is working for buyers in the current market. We don’t have agents who are negotiating against one another, as buyer vs seller agent. We don’t need to train our agents in how to market property to get the highest price. Instead, we learn how to identify ways to save buyers money and retain their rights when they purchase.
There are very few brokerages in Massachusetts who choose to only work on one side. Why? Because working on both sides is more lucrative. My goal was to work as conflict-free as possible and be able to share and learn with my colleagues. It works for us.
There are fewer and fewer companies that are willing to be non-designated companies and only represent one side of a purchase and sales. Therefore, when our clients move out of state, sometimes there are no real exclusive buyer’s agents. Then, we refer them to good agents who work in designated firms.
Interview questions for a buyer’s agent:
Whether you are hiring an exclusive buyer’s agent, or there are none in your area, you should interview at least two agents.
- How many buyers did you work with last year? How many sellers? Hint: a buyer’s agent who is good at what they do works with all buyers, or mostly buyers.
- What was your best buyer purchase last year? Hint: this will tell you what the agent is proud of accomplishing in a purchase. Pay attention to whether they are talking about price, great house, easy deal, fun along the way, or something else.
- Who were your favorite buyers last year? Hint: people generally like people who are like themselves. If the agent talks about someone who is funny, or smart, or caring, that means the agent sees themselves as funny, or smart, or caring.
- Have you helped someone buy in the area I am looking in? In the price range? With first time buyers? With single women? With mountain climbers? Hint: Choose categories that match your needs as a buyer.
Ask for some blind references. These are references where you contact the former client directly. Almost anyone can get someone to write a recommendation, even if they are a mediocre agent. What you want is to talk to or write to someone who has experience buying with this agent.
If the agent is willing, ask them to show you one house before signing a contract. Some agents will do this, some won’t. Very busy agents are less likely, so don’t make this a rule-out criteria.