What is a Buyers Broker?

In the mid 1980’s a lawsuit occurred between the Sunnyvale Association of Realtors and the National Association of Realtors resulting in the term “Exclusive Buyer Agent”. From this outcome the Real Estate agents and state agency laws were affected throughout the United States.

Sellers and the listing agent they used were legally responsible for any mistakes prior to this lawsuit’s ruling. Many subagents working on seller listings acquired off the multiple listing service (MLS) told half truths and lies. Buyers were expected to be told the truth by the agents who were actually subagents of the seller, being paid by the sellers and legally working for the sellers, thereby leaving the buyer without fair and honest representation. At that time the law actually mandated that they had to get the “highest price possible” for the seller. If it was proven to the contrary, they were subject to a law suit or risk of losing their license. Buyers were considered customers. Sellers were the clients.

Upon conclusion of the law suit in the mid 1980’s, agents could choose to work strictly as a “Buyers Agent” regardless of who pays them, as long as certain paperwork is properly done. A “Buyers Agent” is now obligated to get the “lowest price possible” for the buyer.

Another important fact stemming from this court decision, is that listing agents everywhere can now declare “No Sub-agency Offered”, creating protection from consequences occurring from any misrepresentation made by any subagents.

When a buyer’s agent shows their own listing to a buyer, or they show an office listing to a buyer, they then become legally and morally obligated to the seller. This of course brings up the question of who are they really working for? In this case, when showing their own listing, or as a subagent showing an office listing, they are working for the seller. In order to be an agent for the buyer, they would have to be a dual agent, thereby lessening their full responsibility and obligation to the buyer.

Even though subagents or dual agents can work with buyers, they are not “Exclusively” for the buyer. As an Exclusive Buyers Agent, an agent must fill out certain disclosure forms, making sure the buyer understand and signs. As an Exclusive Buyers Agent, I guarantee exclusive representation and loyalty to my buyers. This includes making my best efforts to get the lowest price possible with the best terms.

Less than 1% of all agents in the San Diego area are Exclusive Buyer Agents according to estimates. Remember that an exclusive Buyer Agent will typically inform you up front of the type of agency, explaining the laws and providing a copy of the state mandated agency disclosure form as well as put their own commitment in writing in the form of a “Buyer Broker Agreement”. This guarantees that they do not take any seller property listings. If an agent doesn’t meet these requirements, they are most likely not an “Exclusive Buyer Agent”.