Buyer agents work only for home seekers

By Linda Goodspeed, Correspondent
Courtesy of  Boston Homes, 254 Second Ave., Needham, MA 02494

Would-be Boston-area homebuyers now have access to the same kind of exclusive representation long enjoyed by sellers.

Jebb & Driggin, the first exclusive buyers' brokerage in Boston, opened last month. The firm represents only buyers.

"I worked for another real estate agency as a buyer's agent, but I didn't feel comfortable with it because of the inherent conflict," said Bill Jebb, co-founder of the new agency. "The firm had other listings and the question came up about motivation.

When you represent a buyer and you work for a listing agency, what properties do you show the buyer? You can't represent two masters, the buyer and the seller.  Buyer agents and agencies are fairly common in other parts of the country. They are not so widely used in Massachusetts where seller agents and agencies are the norm.

A seller's agent works for the seller to market and sell the seller's property. The agent signs a contract with the seller and has a fiduciary responsibility to get the highest and best price for the property.

"A seller's agent is obligated to put the listing in the best possible light," Jebb said. "As a buyer's agent my fiduciary responsibility is to the buyer to get the lowest possible price for a property. In that capacity I can divulge all information, negative and positive, about a property. I can advise the buyer what price to offer and pay for the property." Buyer agents are not unheard of in Massachusetts, but most operate in what is called a "disclosed dual agency" -- i.e. an agency that represents both sellers and buyers. Jebb says buyer agents working in a disclosed dual agency can be conflicted not only to put the best possible face on a property but also to show prospective buyers only properties listed by their firm. He says exclusive buyer agents and agencies, because they do not take listings, do not have that appearance of conflict. "We have access to the Multiple Listing Service and other services any other broker has," Jebb said. "We can show them for-sale-by-owner properties, anything that's out there." In terms of payment, buyer agents are usually paid by commission just like what listing agents receive. The commission is based on a percentage of the sale price. In Massachusetts realtor commissions typically range between 4 and 6 percent. If the buyer is introduced to the property by a buyer's agent, the buyer's agent and seller's agent split the commission. "It's a typical co-broke kind of arrangement," Jebb said. "Buyer agencies are a pretty popular method of doing business in other parts of the country, and I think they are going to become more popular here. The dual agency concept just has too many inherent conflicts, whether real or perceived."

Linda Godspeed has been writing about real estate in Boston for various publications for many years. To submit questions about real estate issues, mail them to Linda Godspeed, c/o Boston Homes, 254 Second Ave., Needham, MA 02494.