The Home Buyer's Agent
Links Request Information Home
Helping Buyers Locate. Evaluate. Negotiate.
PH: 734.662.6240   FAX: 734.662.4297 Why Us? Photo Top Why Us? Classes Property Search Testimonials FAQs Newsroom
Why Us? Header
Free Reports in Your Inbox in Minutes! Why Us? Photo Bottom

3 Annoying Tricks Real Estate Companies are Probably Playing On You Right Now!
Audio Report

Receive Home Buying Tips via email and:

Report #1. 37 Expensive Mistakes Ann Arbor Home Buyers Should Never Make Again!

Report #2. Home Buying on the Net: Ten Time Tested Tips to Avoid Disaster!

First Name:


  Click here if you would like the two reports but you prefer not to leave your email address
  Privacy Policy: We are respectful of your privacy. Your email address will not be shared, sold or rented.  

Buyer's Agent or Traditional Seller's Agent?

For the past twenty five years or so home buyers have had two kinds of agents they could use to buy a home: buyers agents or sellers agents. The problem was that very few home buyers knew that buyers agents were available. Traditional real estate agents were taught to make the best of this confusion and as a result most home buyers thought the agent showing them homes represented them. In fact, the agents were legally obligated to represent the sellers unless there was a written agreement with the home buyer to represent them.

This confusion about the roles of the real estate agents is one of the major reasons the public has such a low opinion of the real estate industry. The Federal Trade Commission (FTC) did a study of the real estate brokerage industry in 1983 and determined that the vast majority of home buyers thought that the real estate agent showing them homes was working in their best interest. The vast majority were wrong! The FTC then started putting pressure on the states to have real estate agents disclose in writing to consumers who's side they were representing.

In the early nineties, most states adopted agency disclosure laws requiring real estate agents to finally tell consumers the truth about who they were working for. The National Association of REALTORS (NAR) had long been against buyer representation in the market place, but with the requirement that real estate agents now tell consumers the truth, the handwriting was on the wall. Few buyers would knowingly want to work with agents that are working for the seller's best interests.

The NAR did a reversal and endorsed buyer agency as an alternative in 1993. In 1994 Michigan's agency disclosure law prompted the general manager of the area's largest real estate company to say "It's the single most important change in real estate law in all my 19 years in real estate" It is a sad statement about the real estate industry that a law requiring agents to tell the truth can by itself be a tremendous change.

Now in Michigan most home buyers use some form of buyer's agent.

The Real Question For a Home Buyer is:
Do I want to use a part time buyer agent from a traditional office and expose myself to the dual agent double cross?
Do I want to use an exclusive buyer's agent and get 100% loyalty,
100% of the time?

More on Agency - Who Represents Whom?

Basic definitions:

One operating under the protection of another. (There is a client relationship when a seller works with a seller's agent or when a buyer works with a buyer's agent.)

One who buys goods or services. (A buyer working with a traditional real estate agent is a customer. Just like when a car buyer goes into the showroom to buy a car.)

In michigan real estate, refers to the company policy of representation. Agents have no individual agency identity, they must follow the company identity. There are four variations:

1. The traditional seller's agency. This firm represents only sellers. They have signed an agreement with sellers in their office and from other offices to try to get them the highest price and best terms. They usually still serve buyers as customers because they can't serve them as clients.

2. Dual agency office.
This firm was a type 1 above until they had to tell home buyers the truth. Now they want to offer buyer agency services to buyers while still hanging on to their listings. They promise to get sellers the highest price unless there is an agent from their office who is acting as a buyer's agent. In this case they represent both the buyer and the seller without giving full service to either. This conflict of interest is bad for both the buyer and the seller but great for the company because they get to pocket both sides of the commission. On houses that are not listed inside the firm they may still be dual agents if one agent from their company is trying to sell the house as a traditional seller's agent while another is acting as a buyer's agent.

3. Buyers only office. This is a company that never takes listings and only works for the buyer's best interest. This allows a higher level of service and a higher level of loyalty. The Home Buyer's Agent of Ann Arbor is a buyers only office.

4. Single agency office.
This is a company that will represent sellers and buyers, just never both in the same transaction.

5. Designated agency office. This is a creation of the real estate industry lobbyists. They wanted to have a way of convincing consumers they were receiving loyalty without while still keeping the lucrative "double dip" in-house. (A double dip is when the same brokerages represents the sellers and buyers, thus greatly increasing their profits.)
Michigan's designated agency law allows the broker of a real estate company to designate one salesperson to represent the seller and other to represent the buyer in the same transaction.
Designated agency is beneficial for the larger real estate brokerages at the expense of the real estate consumer. It is also potentially quite complicated so it requires a written agreement.
It also has allowed regular real estate agents to claim to be "buyer's agents" when in fact they are not "buyer's agents" at all. They are "designated buyer's agents".

What the Press Has to Say About Buyer's Agents Versus Seller's Agents:

"Like it of not, the real estate agent helping you house hunt is usually working for the seller and is legally bound to try to get the seller the highest price. But buyers no longer have to fend for themselves. You can hire a buyer agent to work on your behalf." - U.S. News and World Report

"Buyer agents work only for consumers and can save them money - and they don't cost more to hire." - Los Angeles Times

"Unlike the traditional agent who looks out for the seller, the buyer broker acts as your advocate, helping you find the home you want and then negotiating the lowest possible price." - Money Magazine

Which "Buyer's" Agent?

The question now comes to which kind of buyer's agent to pick; a buyer's agent from am office that takes listings (a dual agent), or a buyer's agent from a buyer only office. (Often referred to as an exclusive buyer's agent.)
Note: As reported on the Today show, an agent will never introduce themselves as a dual agent. You must look at their buyer agency agreement to see if it contains the dual agent double cross or find out if their company lists homes for sale. In either case you are talking to someone who acts as a dual agent. Unfortunately, even with the agency disclosure laws, some real estate agents are still trying to hide the truth.

What the Press Has to Say About Dual Agents Versus Exclusive Buyer's Agents:

"Buyers and sellers get less service in a deal with dual agents because they no longer have someone bargaining on their behalf, but the brokerage reaps a higher profit because it keeps the whole commission." - Detroit Free Press

"Consumers should be aware that any buyer's agent agreement that includes a dual agency possibility (representing both the buyer and seller) is not acceptable." - Alan Fields, co-author of "Your New House"

"Exclusive agencies are the best. They remove any conflict of interest, which is the main reason for considering a Buyer Broker in the first place." - U.S. News and World Report

"You'll get the surest representation from a single-agency broker or an exclusive buyer's broker." - Kiplingers Personal Finance Magazine

"You have a choice of working with a traditional Realtor who spends 90% of their time soliciting listings and representing sellers. Or choosing an Exclusive Buyer's Broker, who spends 100% of the time helping the home buyer get the best house possible. Make sure you choose an exclusive buyer's broker. There is a difference." - Dan Birchman, Texas Real Estate Expert

"To protect themselves, buyers can retain their own exclusive representative, but be aware that a buyer's agent who also works as a seller's agent can sometimes end up on both sides of the deal." - Business Week

"Conflicts of interest occur when home buyers want to buy a home that is listed with their buyer agent's company. This situation is called the in-house sale and according to national statistics it happens to one out of every three home buyers. Since a real estate agent cannot legally provide undivided loyalty to both the home buyer and home seller at the same time, the agent must ask both buyer and seller to give up their right to undivided loyalty by signing a disclosed dual agency agreement. The dual agency agreement supposedly facilitates the in-house sale and means double commissions to the only real estate company involved in the transaction. The tactic of baiting the consumer with undivided loyalty and switching to dual agency may be illegal according to the guidelines of the Federal Trade Commission. These bait and switch tactics are proving to be costly to home buyers..." - National Home Buying Institute Press Release

"The best buyer brokers are so-called exclusive agents - that is, they represent buyers, never sellers..." - Money Magazine

"Only by using an exclusive buyer agent can a buyer be sure all information is kept confidential. Only an exclusive buyer agent can give the buyer an objective, experienced opinion of the homes viewed to ensure the buyer gets the right home, in the right location, at the right price." - Mobility Magazine

We helped area home buyers save over one million dollars last year. If you are interested in saving money on your next home, send us a note. Or, give us a call at (734) 662-6240.


Why Us? \ Classes \ Property Search \ Testimonials \ FAQs \ Newsroom \ Links \ Request Information \ Home