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Is 'your' agent really working for you?
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A listing of exclusive buyer agents can be found at the Web site of the National Association of Exclusive Buyer Agents.

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Why choose a buyer's agency? While any agent will arrange property showings, suggest sources of financing, provide accurate information, explain the forms and agreements, and monitor the entire process, a buyer's agent should perform services for you that the seller's agents can't, such as show you reasons not to buy a particular property; negotiate the best price and terms for you; include contingencies in the contract that protect you, rather than the seller as in most standard contracts; and keep confidential any information that could hurt your bargaining position.

Other types of agencies
What if the house you want is listed by the same agent or firm that's representing you as buyer's agent? In that case, you can agree to:

Types of agencies

Perhaps the best way out of this dilemma is simply to terminate your agreement with that buyer agent and find another buyer agent not affiliated with that firm, according to exclusive buyer agent Roy Flanders, owner of ProBuyer Associates of Nantucket, Mass.

"Designated agency is a loser for consumers," says Flanders, who has been licensed for over 25 years and an exclusive buyer agent for more than 10 of those.

The designated agency or transaction broker concept, Flanders says, "is being pushed by the mega-brokers who want to keep both sides of the transaction," and works to the detriment of both seller and buyer. He says keeping information private within an office is too difficult.

"Designated agency is nothing but a new way to describe disclosed dual agency," he says. "It's really nothing more than a more lofty sounding name to still allow the mega brokers to capture a buyer and still do an in-house sale and keep both sides of the transaction and all of the commission. It is designed to circumvent the potential loss of a buyer who wants true fiduciary representation."

You get what you pay for
One thing hasn't changed: Almost without exception, the seller is going to pay an average of 6 percent of the sales price to a real estate firm. Most sellers agree to allow the listing agent to split the commission with the buyer's agent, which means the seller is paying the buyer's agent to represent the buyer against the seller. While many people think that whoever is paying the lawyer or agent is the one getting the best representation, courts have made clear that paying an agent does not automatically mean the payor is the client.

Why would a seller agree to allow half of the commission to go to a buyer's agent who is representing a buyer against the seller? Simple -- the seller wants to sell. And as some real estate agents note, the transaction really funds the commission. Yes, the seller is paying the commission, but the house might be 6 percent cheaper if no agent were involved, so the buyer is really paying the commission in the increased price of the home. The whole idea here is fairness: If the buyer is bringing the money to the table to buy the house, shouldn't that buyer get representation? Finally, after nearly a century, the answer is yes.

"The struggle is over. Buyer agency is here. We still need to educate the consumer, but buyer agency has come of age," says REBAC's Branton.

Christopher Cruise is a senior mortgage banker and freelance writer based in Silver Spring, Md.

Bankrate.com's corrections policy

-- Updated: June 9, 2006

 
 
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