Some real estate brokerages will try to advertise themselves as an exclusive buyers agent as a gimmick to win more business. The rationale of working with a home buyers agent that exclusively works with buyers versus sellers is that supposed conflicts of interests will go away.
We’ll explain in this article why having a buyers advocate who doesn’t have any sell side listings is an unnecessary precaution and why it’s quite uncommon to have an exclusive buyers agent in NYC.
Having an exclusive buyers agent in NYC is uncommon precisely because the vast majority of real estate agents work for mid to large sized brokerages who also cater to sellers by default.
A brokerage that is anything more than a one man shop cannot decline to serve home sellers if they want to stay in business. Remember that having an exclusive buyers agent means the principal broker cannot simultaneously represent a seller. Because all of the licensed salespeople are agents of the principal broker, that would prohibit everyone from the firm from working with sellers. This is obviously quite unrealistic for any firm that has more than one or two people.
Think about it, why would any real estate agent join a firm that denies everyone at that firm from working with sellers?
Having an exclusive buyers agent in NYC is uncommon precisely because the vast majority of real estate agents work for mid to large sized brokerages who also cater to sellers by default.
A brokerage that is anything more than a one man shop cannot decline to serve home sellers if they want to stay in business. Remember that having an exclusive buyers agent means the principal broker cannot simultaneously represent a seller.
Because all of the licensed salespeople are agents of the principal broker, that would prohibit everyone from the firm from working with sellers. This is obviously quite unrealistic for any firm that has more than one or two people.
Think about it, why would any real estate agent join a firm that denies everyone at that firm from working with sellers?
What if an agent gets a seller referral worth the typical 6% commission to sell? There’s no way that an agent would turn away that kind of upside by sticking with a firm that only exclusively works with home buyers. As a result, a self-purported exclusive buyers agent will truly be a one man shop typically consisting of the principal broker only.
Just because having an exclusive buyers agent who refuses to work with sellers is overkill doesn’t mean you should agree to dual agency and work with a listing agent directly.
Dual agency does present a conflict of interest because the listing agent is supposed to represent the interests of both the seller and the buyer at the same time. This is impossible in practice unless the listing agent communicates as little as possible and simply relays information so he or she can maintain as much neutrality as possible. A listing agent who doesn’t speak will not be helpful to either the buyer or seller, and will be even more overpaid than normal for doing nothing!
You can still work with a seasoned buyers advocate and have a buy side agent that represents only your interests.
Just because having an exclusive buyers agent who refuses to work with sellers is overkill doesn’t mean you should agree to dual agency and work with a listing agent directly.
Dual agency does present a conflict of interest because the listing agent is supposed to represent the interests of both the seller and the buyer at the same time. This is impossible in practice unless the listing agent communicates as little as possible and simply relays information so he or she can maintain as much neutrality as possible.
A listing agent who doesn’t speak will not be helpful to either the buyer or seller, and will be even more overpaid than normal for doing nothing!
You can still work with a seasoned buyers advocate and have a buy side agent that represents only your interests.
You can even check “buyer’s agent” on the NY State Agency Disclosure Form. However, this does not mean your buyer’s brokerage needs to be so extreme as to ban working with seller clients altogether. In the off chance that you become interested in one of your buyer brokerage’s exclusive listings, you and the seller would simply agree to dual agency or dual agency with designated sales agents.
The primary reason that you should have a buyers advocate is so you can discreetly receive a rebate of the buyer’s agent fee post-closing. A commission rebate is worth $20,000 or more in post-closing equity on your typical $2 million New York City home.
However, as tempting as it is to sign up with the first discount broker offering a rebate that you find, it’s important to understand the importance of discretion in getting a rebate.
The last thing you’ll want to do is to jeopardize your purchase by alerting the seller and the listing agent to the fact that you’re getting a better deal. In fact, there’s no better way to make a listing broker absolutely furious than to loop in a shady discount broker who openly advertises rebates. It’s not exactly difficult for even your most simple listing agent to find out what your typical mom and pop rebate broker is up to.
The primary reason that you should have a buyers advocate is so you can discreetly receive a rebate of the buyer’s agent fee post-closing. A commission rebate is worth $20,000 or more in post-closing equity on your typical $2 million New York City home.
However, as tempting as it is to sign up with the first discount broker offering a rebate that you find, it’s important to understand the importance of discretion in getting a rebate.
