Buyer’s Agents: Giving Howard County Home Buyers A Fair Deal And Honest Advice

I confess I’ve been asleep at the wheel on my own blog.  Over the past few months I’ve written about topics I thought Howard county home buyers were most interested in these days – foreclosures in Ellicott City, short sales in Columbia, Maryland, and current home price trends in Howard County.  (See prior blog entries, or click here for a list of current foreclosures and short sales in Howard County). But I’ve forgotten to speak about using a “buyer’s agent” despite the fact that for over 20 years I’ve been a pioneer of buyer’s agency in Howard County. 

Forgive me.  I’ll do my best to succinctly address key issues concerning buyer’s agents in Howard County and in Maryland in general in this and the next few posts.

Definitions: Buyer’s Agents, Seller’s Agents, And Dual Agents

Traditionally all real estate agents worked for the seller’s best interests, either as “listing agent” (with a written listing agreement between agent and seller) or as a “sub-agent” (working with buyers but as a “sub-agent” of the listing agent of the home the buyer purchased and thus a seller’s agent).  Crazy, huh? Your agent emotionally bonds with you as home buyer, shows you tons of homes owned by sellers she’s never met, yet she owes 100% loyalty to them, 0% to you.  Wikipedia.org partly explains this system here.

It’s unclear exactly how this agents-always-work-for-sellers system came about. At least, no one has offered an explanation which I find fully satisfying. But it must have been due in part to the fact that, generally, the agent’s best interests are more naturally aligned  with sellers than with buyers.  Both seller and agent want the highest price – the seller to receive more money, and the agent to receive a higher commission.  Both seller and agent want few, if any, “escape clauses” in a purchase contract – because, once a deal has been agreed to, they both want it to go through despite any buyer concerns.

Regardless of how it came about, the fact remains that the basic legal framework in U.S. real estate for nearly a century has been that all agents worked for the seller.  This was certainly true for Howard County Maryland real estate sales.

Then in the late 1970’s and 1980’s some upstart real estate brokers introduced the concept of “buyer’s agency”, where the agent would actually commit in writing to break with the traditional, sellers-only, system and work for the buyer’s best interests. 

This was risky at the time, because “dual agency” – the act of representing both buyer and seller on the same transaction – was completely illegal in all 50 states. If Agent-A with ACME Realty represented the buyer and Agent-B of ACME Realty represented the seller in the same deal this was considered dual agency – representing conflicting interests in the same transaction – and was completely illegal in all 50 states.  Both agents and the broker could lose their licenses for committing just one act of dual agency.

The biggest brokerages, then, never offered buyer’s agency. If the firm had, say, a 25% share of the home listings in an area, there would be a 25% chance of dual agency if that firm represented buyers also.  Since dual agency was blatantly illegal, big firms never offered it to buyers.

This meant that, initially, buyer’s agency was only offered through small, innovative brokerages. Some were “Exclusive Buyer’s Agents”, or EBA’s, where the firm only represented home buyers with a 0% chance of dual agency.  Other small firms practiced “Single Agency”, where they would represent a handful of buyers and sellers, but never both on the same deal. If such a Single Agency firm represented, say, three home sellers out of 1,500 homes for sale in the area, there’d be a 0.2% chance of dual agency.

(If you can’t tell already, yes, I was one of those “innovative”, upity brokers that practiced buyer’s agency in Howard County Maryland as far back as 1989).

However, these small firms offering buyer’s agency apparently posed a threat to the big firms. Over a matter of a few years, from 1991 to 1997, all 50 states made major changes to their dual agency laws and most repealed them. Why? Well, it wasn’t because consumers demanded the “right” to work with “dual agents.”  Rather, it was because the big firms felt threatened by “buyer’s agency” and they wanted to be able to offer something they called buyer’s agency, even if it was simply a repackaged version of the old dual agency that had been illegal for a century.

Locally us ‘little guys’ lobbied against such big boys as Long & Foster, ReMax and O’Conner, Piper & Flynn (now Coldwell Banker). We didn’t want dual agency legalized, as it seemed a blatant ripoff of the consumer.  Alas I found it’s true: you can’t fight city hall (or, in this case, the Maryland Legislature and big brokerage houses at the Maryland Association of Realtors®).

Result Today?  Virtually every agent in Howard County claims to be a “buyer’s agent.”  But precious few will GUARANTEE in writing to give you 100% loyalty.  We do.

For 12 years we practiced Exclusive Buyer’s Agency in Howard County Maryland and for the past eight years we’ve practiced Single Agency for our Howard County home buyer and seller clients.  For reasons I’ll state in a future post, I find Single Agency more beneficial to our clients than even Exclusive Buyer’s Agency.

If you’d like copies of any of our buyer’s agency forms, including a copy of our written loyalty guarantee, click here and we’ll be glad to send it to you.

You can check my OLD website for more info on Buyer’s Agency In Howard County Maryland here (with apologies, it needs a bit of updating), or request our “Home Buyer’s Guide To Maryland Real Estate” here.

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