Finding, And Choosing, A Buyer’s Agent In Howard County Maryland

OK, so you want to buy a home in Columbia or Ellicott City or somewhere else in Howard County Maryland. And, you’ve decided you want “someone on your side” – a “buyer’s agent”. Great.  However, you have to realize there are different types of so-called “buyer’s agents.”

Types of “Buyer’s Agents”

The purpose of having a so-called “buyer’s agent” is to have that agent give YOU, the buyer, 100% loyalty. However, each real estate agent must work for a real estate broker, and the loyalty an agent can offer you is enhanced, or limited, by the business chosen by your agent’s broker. Since about 1995 Maryland real estate brokers have selected one of three types of practices: Exclusive Buyer’s Agency (“EBA”); Single Agency (“SA”); or Dual Agency (“DA”).

Exclusive Buyer’s Agency (“EBA”)

In an EBA firm the brokerage only represents home buyers – never sellers.  The advantage to a buyer is that the broker and your agent can give you 100% loyalty, with 0% chance of a conflict of interest of also representing the seller.

Today there are no firms offering Exclusive Buyer’s Agent service in Howard County.  (If you contact the National Association of Exclusive Buyer’s Agents for a buyer’s agent in Howard County, they’ll tell you there are no exclusive buyer’s agents here – and they’ll recommend that you contact John Toner of Providence Real Estate).

In the early 1990’s there were four Exclusive Buyer’s Agent brokers, but since then one went out of business, one moved out of state, and two (including our firm) converted to Single Agency practices.  (The website Buyers-Agents.com traces some of the history of buyer’s agents in Howard County Maryland).

Single Agency (“SA”)

A Single Agency firm represents both buyers (as buyer’s agents) and sellers (as seller’s agents) but never both at the same time (so-called “dual agents”).   Single Agency firms by definition tend to be smaller brokerages with a handful of agents and no more than, say, a half dozen buyer or seller clients at any given time.  Think “craftsman” vs mass-production.

A Single Agency brokerage can’t offer the 100% loyalty of an EBA but, because Single Agencies are small, the odds of an actual conflict of interest are low. Suppose the broker represents four sellers at the moment amidst 1200 homes currently for sale.  The odds that you, as buyer, want to buy one of these homes is just 0.3% (4 divided by 1200).

Most Single Agency firms use a “first in time” rule for representing clients. Say you come to our office today and want to buy a home in the $550,000 – $700,000 range, and of our current five listings one fits that description. We’d show you the home first. If you don’t like it, we’d sign a buyer’s agent agreement with you promising to give you 100% loyalty on all other homes on the market in your price range.  However, if you did like the home we have listed, we would have to represent the seller (he was our client “first”). At that point you could choose to work through us to buy the home, knowing we represent the seller, or you could hire a completely different buyer’s agent from another firm to represent your interests.

(Wow – that was weird, huh? A Realtor® actually honest enough to say that, on occasion, you might actually want to work with someone else!?)

Currently there are three Single Agency firms offering buyer’s agent service in Howard County Maryland that we are aware of: the John & Angela Team at Providence Real Estate, and two other small firms in Howard County.

Dual Agency (“DA”)

Dual Agency is what the overwhelming majority of all Maryland firms practice.  They work with buyers and sellers, but get all their clients to sign a “dual agency consent” form, which allows the brokerage and the agent to represent both the buyer and the seller in the same transaction.  The purpose for this is so that the company, and agent, can secure your loyalty to them 100% while they only “maybe” give you 100% loyalty back.

If you think you have a buyer’s agent in Howard County, but are working with an agent with one of the big firms, you probably have merely a dual agent.

If it is a firm that has a huge local market share, for example Long & Foster in our local market, it is difficult for them to offer true 100% loyalty to either buyers or sellers.  If Long & Foster has, say, a 25% market share of homes for sale in Ellicott City, then there is a 25% chance your agent can’t serve as truly your buyer’s agent in Ellicott City.  If Coldwell Banker has a 32% market share of homes for sale in Columbia Maryland, then there is a 32% chance your agent can’t be your buyer’s agent in Columbia Maryland.  In both cases, the agent would be a “dual agent” at best.

Is dual agency legal?  Yes, sort of.  Is dual agency right or fair?  Well, we don’t think so.   Maryland, like most states, passed laws in the 1990’s “legalizing” dual agency.  But the practice is prone to legal problems – for agents, brokers, buyers and sellers – that there is a network of real estate attorney who specialize in protecting the victims of dual agency after the fact – see Real Estate Lawyers.Com.

In essence dual agency is designed to protect the agent (making sure that you remain loyal to them) while allowing your so-called “buyer’s agent” to give you compromised loyalty if you happen to buy one of her firm’s listings.

Here is a simple test: Ask a prospective Howard County buyer’s agent to specify how their broker’s agency policy will allow them to provide you with the Six Fiduciary Duties of a Buyer’s Agent.   (My next blog will outline the Six Fiduciary Duties of a Buyer’s Agent).

If the agent squirms – or worse – looks confused, as if they’ve never even heard of the Six Fiduciary Duties, you might want to look for a different Howard County Buyer’s Agent.  Contact us by email for more information about homes for sale in Howard County and/or how our buyer’s agent services can help you get a great deal on a Howard County home.

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.