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Buying a home is usually the biggest financial purchase a person will make, and you want an agent that is truly working for YOU. But, not all agents are created equal. In fact, many home buyers find out the hard way that their agent wasn’t solely on their side. In this segment, we explain “Exclusive Buyer Agents” and what they can do best for you… not just at contract time, but throughout the entire process.


Protecting the 'Interest' of Real Estate Buyers..

A home is usually the biggest purchase most people make in their lifetime, so it makes sense to research the options and make smart decisions. The Balancing Act gives viewers expert advice on how to choose a real estate agent who will be in their corner and on their side when purchasing real estate.

According to Kim Kahl, the Executive Director of The National Association of Exclusive Buyer Agents (NAEBA), the organization was founded in 1995 with the goal to help protect the interests of real estate buyers. Ben Clark, the President of the organization, joins her in discussing how exclusive buyer agents avoid the conflict of interest of dual or designated agency, which can occur in traditional real estate transactions.

Their advice is to avoid going into a real estate transaction that has the other party's best interest in mind. By using an Exclusive Buyer Agent, a consumer can rest assured that they have someone on their side working for them and representing their best interests.

Exclusive Buyer Agents (EBA's) work solely for buyers, avoiding the conflicts of interest inherent in the traditional seller-oriented purchase transactions. This unique relationship of committed trust and care assures buyers the best possible home buying experience.

The biggest misconception among home buyers is that all real estate agents are the same, but they are definitely not. Furthermore, consumers want to believe that their real estate agent is representing them. Unfortunately, this isn’t always the case. Lawsuits happen every year because buyers who didn't feel “quite right” about their transaction as it was happening found out after their purchase that "their" real estate agent wasn’t fully representing them… Instead, the agent was actually representing both the buyer and seller.
Historically, real estate agents represented sellers.

Exclusive Buyer Agents, on the other hand, represent only the buyer. An EBA has no dual agenda. An EBA has your back, specifically helping you to:

• locate and evaluate property
• negotiate the best price and terms
• evaluate loans and financing options
• facilitate inspections, disclosures, contract compliance and the closing.

An agent who knows the market in your area can help a buyer avoid wrong turns along the road to home ownership. EBA's can help buyers identify everything from preferential school districts to mass transit options--issues that are (or should be) concerns of every buyer. An EBA’s insights are priceless, particularly because the EBA is concerned solely with solutions that fit the buyer’s needs, versus trying to balance the buyers’ and sellers’ desires.

Exclusive agencies are best."

The Wall Street Journal
"Buyer advocacy appears to be taking off." "I´ll never buy a house any other way." - Mrs. Renee Talley, Highland Park, TX


Good Housekeeping
"Many people don´t realize that, unless specifically stated otherwise, broker are legal representatives of sellers. A buyer´s broker, representing only the buyer, may be able to secure a better price and better terms."


U.S. News
"Buyer brokers: agents that buyers can call their own." "If your real estate agent isn´t a buyer broker, he works for the seller." "Buyers no longer have to fend for themselves."

USA Today
"Agents: How to hire one for your side." "Most agents who show you homes don´t represent your interests. They work for the seller, and their object is to sell the house at the highest possible price."


The Washington Post
"You have a whole new evolution of practice in the marketplace," said Sharon Millett, a Maine real estate broker who headed the 22-member NAR task force that issued the report. Millett said that report´s recommendations are designed to give home buyers and sellers access to the "kind of representation" that they want.

Changing Times

Medical Economics
"Level the playing field when you buy a home." "You may get a better deal with your own broker pulling for you." "The introduction of buyer´s brokers takes a horribly one-sided process and simply makes it fair," says one broker.

Florida Today
"Buyer´s brokerage is becoming accepted. Unlike a traditional real estate arrangement, under which the agent works for the seller, buyer brokers work for the buyer."

Changing Times
"Exclusive agencies are best. They remove any conflict of interest, which is the main reason for considering a Buyer Broker in the first place."

"Unlike the traditional agent who looks out for the seller, a buyer broker acts as your advocate, helping you find the home you want and then negotiating the lowest possible price. The best buyer brokers are so-called exclusive agents - that is, they represent only buyers, never sellers..."

Smart Money

"Groups such as the Consumer Federation of America and the American Association of Retired Persons recommend using buyer´s agents... The reason is that they work."


"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 buy gets the right home, in the right location, at the right price."

Consumer Federation of America

"To Buyers: If you want representation, work with a buyer broker. They are legally obligated to represent your interests in any negotiations with sellers."

Los Angeles Times

"Exclusive buyer´s agents work only for consumers and often can save them money - and they don´t cost more to hire... Buyer´s agents are not tied to any particular property or agency, so they will show buyers any home, even those for sale by owner."

"Hire a buyer´s broker. When in the market for a home, the best defense is a strong offence."


Not One Dollar More!

"Your goal should be to engage an agent who will represent only your interests. Not just a `buyer broker´, but an exclusive buyer broker. Make sure that is what you are getting." - Joseph Eamon Cummins, Author, Not One Dollar More!

 "To protect themselves, buyers can retain their own exclusive representative, called a "buyer´s broker." Your local agent may offer sure services, but be aware that buyers´ brokers who also work as sellers´ brokers can sometimes end up on both sides of the deal."

Articles About Us.  Community Newspaper Week of October 21, 1998

Buyer's Brokers: Advocates for the Real Estate Shopper
Hiring an agent who works for the customer can save time, money

By Kathryn Pearson, Community Newspapers Staff

A proposed radio tower down the street, a faulty furnace, or loud traffic from an unseen highway could present future problems to unsuspecting home buyers who are preoccupied with myriad issues during a home search.

Enter the buyers broker, an unbiased person whose job it is to find and expose such flaws to the home buyer.

Representation for the buyer has become an accepted practice in the 1990s, yet it remains a touchy issue in today's hot real estate market where competition for the sales commission is fierce.

Buyers often have the wrong impression that an agent who shows them a house is working on their behalf. Worse yet, naive buyers who are not aware of the different forms of agent representation might disclose information to this agent who they believe is representing them. For instance, it is very common for a buyer to mention to the broker who just showed them a home that they are willing to offer a price of $210,000 even though they can afford to go as high as $250,000. In the end, a slip of the tongue could cost the buyer several thousand dollars.

Brokers like Ronn Huth of Hamilton and Susan Cain of Essex, who limit their services strictly to buyer representation, have found many appreciative home buyers who like having an advocate on their side. Often it is the first-time buyers who opt to hire buyer's brokers, real estate agents who devote I 00% of their attention to the home purchase for a client.

Most of the large real estate companies on the North Shore also have jumped on the buyer's broker bandwagon. Almost all of the big firms now offer home buyers the choice of being represented exclusively by a buyer's broker who is on their staff. This decision is usually made shortly after the house hunters meet with a prospective broker and an agency disclosure form is presented for them to sign.

State law requires that all home buyers be given the chance to sign such a contract with their real estate agent at the start of a home search. It's up to each buyer to decide whether they want to work with an exclusive buyer's agent or contact a handful of listing agents from different companies.

"We had a buyer tell us that a real estate company showed him only houses that posted their sign on the front lawn. This is a dangerous set-up," Huth says. Real estate companies should be showing a buyer all the listings that meet its clients needs, he says.

In most listing offices that offer the buyer's broker service, the company will show a buyer its own listings first, then go into the Multiple Listings Service (MLS) to see what other firms have to offer, Huth says.

"As a buyer's agent, I listen to my buyer's wants and needs and then search the MLS, For Sale By Owner (FSBO) homes, auction properties, expired listings and properties not even on the market," he says. The so-called FSBO sellers love working with him, he says, because he brings "only capable buyers to their home."

But buyers should remember that exclusive buyer's brokers do not have home listings of their own to show. A Medford / Melrose broker points out that a number of prime real estate listings are sold within a real estate office, often going under agreement before they hit the Multiple Listings Service. In larger active companies, the brokers on staff often have first dibs on the homes listed by their co-workers, keeping some of the more desirable properties out of the reach of their competitors.

In a hot seller's market where properties fly in and out of a real estate office in less than a week, a home buyer who works with an exclusive buyer's broker might be left out of the loop when it comes to the availability of some homes, the Medford broker warns.

A growing trend
Huth, a North Shore broker who started up his first Buyer's Choice company in 1990, now represents only the buyers on a home sales transaction, and his company has grown to include branches in Winchester, Andover, and Melrose.

Choosing a buyer's agent has become an accepted practice by both buyers and traditional brokers in the late 1990s, says exclusive buyer's broker Susan Cain. Buyers are particularly vulnerable when a seller's market prevails, she says. She notes the current market conditions remind her of the late 1980S.

"Buyers are often pressured into making quick decisions and paying too much for a home," Cain says. " I suggest buyers take six months to a year to narrow down their home selection." A buyer's broker is willing to spend more time with clients. "I'm not pushing for the sale. I'm pushing for my buyer to find a property they love at a price tag that is reasonable," she says.

As a buyer's broker, Cain says that she is free to sit down with the buyer and "strategize about submitting a well-thought-out offer." She says repeat buyers who are trading up or down benefit from the kind of advice she can offer, such as recent sales data, to help deter- mine a home's value.

Disclosing dual agency
An real estate agent who works as a buyer's broker in a large office must disclose " dual agency" if he intends to show his customer a home listing that belongs to some- one in the same office.

Companies like Hunneman, DeWolfe, and Carlson offer buyers the opportunity to contract with an agent who works solely for them.

First-time buyers are more likely to choose a buyer's broker, says Carlson manager Francine Cecieta. She says she has witnessed an increase in people opting for buyer's representation.

Hunneman's Lois Williams explains that as a buyer's broker "we sit down at the first meeting and tell the client about recent sales data and show them what's available in the different price ranges." If they go out to look at a Hunneman property, "we can facilitate the sale, but the buyer must make the offer on their own," Williams says. "We cannot tell a buyer what to offer if they are purchasing one of Hunneman's listings."

Williams, who is president this year of the North Shore Association of Realtors, agrees there has been an increase in the number of customers choosing to hire buyer's brokers. This specialty is an important one for transferees who depend on local realtors to help them choose not only a house but a community and a neighborhood, says the Topsfield / Boxford broker.

"A seller is not being served by a broker who does not compensate the buyer's broker the same as a regular seller's broker," Williams says, adding the initial resistance to buyer's brokers in the Topsfield / Boxford area has disappeared. "We're working for the seller," she says. "Whatever offer comes in, we evaluate it."

Normally, a commission is split evenly between a listing and selling broker, but some traditional brokers still refuse to give an equal cut to the buyer's broker.

"Ninety-five percent of the time it's split evenly," Cain says. Brokers who decide not to split the commission with a buyer's broker "are only hurting the sellers" because a buyer s agent will not take their customers to a home if they know they're not going to get paid. "They're eliminating some good buyers," she says.

In Medford and Newburyport, buyer's brokers have received a cold shoulder from some traditional brokers who refuse to share the commission, say some brokers.

The earlier a buyer's broker is brought in to assist, the more she or he can help the customer, Cain says. If the buyer has already seen a property a couple of times and then asks for help from a buyer's broker, splitting the commission becomes a difficult issue to resolve unless the buyer is willing to pay the buyer's agent. She stresses that the "purest form of representation" is to work with an exclusive buyer's broker.

No extra costs

A buyer's broker since 1993, Helen Phaneuf is sales manager at the Melrose office of Buyer's Choice.

"Our job is to find the home of their dreams, not sell the one we have listed," Phaneuf says. A buyer's broker is there from the start to finish, she says. Buyer's brokers walk their clients through all of the home-buying steps from finding a home to the home inspection to the closing day.

"This process does not cost the buyer anything extra," Phaneuf says. The commission is split the same way that a regular listing and selling broker split it.

"Some listing brokers pay us a lesser commission, but we do not let that stop us," Phaneuf says. Her main job is to protect the buyer.

A buyer's broker could even help you save money by negotiating a lower price on a property or connecting a home buyer to a good lender, Huth says.

People are not aware that they can be protected, Phaneuf says. They see an ad in the paper, and call up that realtor to make an appointment for a showing. " They do not realize that the broker is working for the seller," she adds.

"We begin a home search for our client by using the database provided by the Multiple Listings Service," Huth says. He also tells his clients about properties that are for sale by the owner. About one-third of the deals completed by Huth's Buyer's Choice company are homes advertised as "For Sale by Owner," he says.

If a client wants to live in a neighborhood where no homes are currently on the market, Huth says he calls every home in the area and tries to find someone who might want to sell their property.

During a seller's market, Huth says his job is to "package" his buyers to be very appealing to a seller. Buyers can facilitate the home transaction by getting pre-approved by a lender for a certain amount. That includes a complete credit check, Huth says.

"If we think it's in the best interest of a client to walk away from a deal, then we assist them in getting back the deposit and moving on to purchase something else," he says. However, if the buyer has his heart set on a house that has certain failings, the buyer agent would suggest ways to negotiate the deal to his advantage, Huth adds.

"We feel the neighbors have a lot to tell potential buyers," he says. He gives the names and numbers of neighbors to buyers so that they can call and ask questions. "Our focus is that of a consultant. We want to provide information that allows the buyer to move for- ward in the process," he says.

Huth is glad that recent legislation to establish "designated dual agency" was shot down by the State Legislature.

"This would have allowed situations that would be comparable to a law firm having one lawyer represent the plaintiff and another attorney represent the defendant," Huth says.

Anyone who contacts Buyer's Choice by e-mail has the opportunity to receive free information and daily updates on home listings, Huth says.

On a sheet of more than 100 services offered by his buyer's broker company, Huth lists the following: how much home can a buyer afford; understanding exclusive listings; comparing tax assessed values; how to know when to walk from a home deal; checks with the child molester registry; when to involve an attorney; interpreting the inspection report; the final walk-through; and even picking up the keys from the seller.

"Buyers don't want to find out about the defects after they purchase the home. After a thorough home inspection, it's better to renegotiate the price of a home," Cain says.

Brokers in a dual agency situation cannot give advice or counsel to either party if they are representing both sides, Huth says.

"They are put in an awkward position and can't give full fiduciary services to either party," he says. "The more the sale is kept at arm's length, the better it is for the buyer."


from Banker & Tradesman

Nader Group Gives Boost to Cause of Buyer Brokers

Massachusetts' growing ranks of buyers' agents have a new friend in consumer advocate Ralph Nader.

Backed by Nader's Real Estate Consumer Network and the U.S. Consumer Federation of America, the National Association for Exclusive Buyer Agents is targeting the Bay State, along with Pennsylvania, for a three-pronged campaign on behalf of buyer agency.

On one front, the groups have mounted a consumer crusade to alert home buyers to what all three consider the benefits of using a buyer's agent rather than a traditional seller's agent. To that end, they have called for a clearinghouse of contract and real estate abuses against consumers to keep the public informed.

In addition, within the next month, consumer fact sheets will be made available to home buyers and sellers throughout the state, said Leda Huta, project coordinator for the NRECN's umbrella organization, the Institute for Civic Renewal. Both NRECN and ICR are based in Oil City, Pa.

The Nader / NAEBA alliance is also campaigning against what it calls anti-consumer regulations in Massachusetts - namely the National Association of Realtors' procuring cause guidelines voted in at last November's meeting, said Torn Early, president of the Evergreen, Colo. - based NAEBA.

Procuring cause is when an agent or broker "causes" a buyer or seller to purchase or list a property for sale. For example, if a customer who attends an open house decides to buy that home, the agent holding that open house can claim the commission.

In cases where three agents are involved in a transaction, the third agent, not under contract to the buyer or seller, may go to the buyer's agent for part of the commission.

NAEBA has submitted a statement taking exception to the revised rules. Early maintains that NAR's guidelines directly target incomes of buyer brokers and that their contracts with home buyers are being disregarded.

Targeting Massachusetts
NAEBA has spearheaded the growth of buyer agency on the national level, as more agents have chosen to quit listing homes and instead represent buyers exclusively.

Nader's NRECN is working with NAEBA to advance the rights of consumers who are buying or selling real estate. Nader has charged that consumers are overcharged more than $10 billion a year because they are not adequately represented in real estate transactions.

Citing figures compiled by the Consumer Federation of America, which does public advocacy and education on consumer issues, Nader said that 'real estate is difficult to get organized from a consumer point of view because there's a lot of money at stake."

On the subject of procuring cause, Nader called NAR's requirement of mandatory arbitration to resolve commission disputes as opposed to litigation a way of "forcing people to give up their constitutional rights."

Stephen Brobek, the Consumer Federation's executive director, said Massachusetts is ideal for the group's efforts because the cornmonwealth is known as being pro-consumer. Brobek also said that the state's agency disclosure laws are a model for the rest of the country in their clarity.

However, legislation that is supposed to clarify the duties of brokers - House Bill No. 2465 - has stagnated. The bill, which would definitively outline the relationship between a client and agent, was remanded to study by the House and Senate last August, according to co-sponsor Arthur J. Broadhurst, D-Methuen.

The answer may be in the numbers. With 38 members, Massachusetts ranks second behind California in the number of NAEBA-mernber brokers, according to NAEBA Public Relations Representative Kathleen Chiras. The two-and-one-half-year-old organization has approximately 450 members nationwide.

Buyer brokers in Massachusetts are also more organized than in other states, said Brobek.  The Massachusetts Association of Buyer Brokers has between 200 and 300 members, estimated Milton Attorney Frank Barry, the association's treasurer. Moreover, MABA recently joined five other states to form the New England Association of Buyer Agents.

Indeed, the buyer agency business seems to be humming along. Leo Berard, a founder of NAEBA and owner of Buyer Brokers of Cape Cod, said his revenues have doubled annually and is opening a new office in Martha's Vineyard next month.

Leo Berard

Leo Berard
Revenues have doubled

Ronn Huth

Ronn Huth
Four new offices

For Ronn Huth, owner of Buyer's Choice Realty in Hamilton, business has been so brisk he opened four new offices in Winchester, Melrose, Peabody and Andover in the past year.

North Shore Sunday
December 6, 1992


Real estate brokers have always represented sellers.  Now, a few agents are working for the buyer.

Ronn and Shawn Huth

Ronn and Shawn Huth review a purchase and sale agreement for a client. The Huths are the only agents on the North Shore working exclusively for buyers, although other agents do so occasionally.

(Photo by Owen O'Rourke)

By Taylor Armerding

Good Friday was a bad day for Peter and Pat McKay. But then, it was also the start of something very good - what Pat calls a "miracle," that came in the somewhat mundane form of one of the newer concepts in local real estate.

For the second time in a year, their car, parked outside their Beverly apartment, had been struck by a hit-and-run driver.

"I just said, 'That's it, I'm getting out of here'," Pat recalls.

The only problem was, like most people, they weren't flush with the kind of cash that lets one immediately go out and start making real estate deals.

Even when Pat learned the following day that she and her husband were eligible for housing assistance through her employer, Gordon College in Wenham, they still figured a move to their own home in a less hazardous neighborhood was a somewhat distant dream.

Then she recalled a conversation with a tax consultant who had told her that if she were ever house hunting, call a "buyer-broker" named Ronn Ruth of Hamilton.

Huth, a former minister who for years headed the North Shore chapter of Young Life, a youth ministry, is one of the first local examples of a new breed of real estate agents who exclusively represent the buyer.

And according to McKay, it was one of the best calls she ever made.

"He came over the very next night and answered every question we had," she says.

"The nice thing about it was that he was on our side - not so much working for the sale of a house as he was for us to be able to buy a house."

The result of his efforts, she says, is evident both in their new home in Beverly's Ryal Side and in the speed of the process.

"We had found a house by the end of May," she says. "We were approved by the bank on June 17, and we closed on July 23" - just about three months after the anonymous driver wiped out their car.

"And he was with us all along the way," she says, through some bumpy moments with the bank, right up to the closing.

"For us, we really needed it," she says. "There are too many complicated things you could miss in something like this."

Fledgling industry
For proponents of buyer brokers, also known as buyer agents, the only question is why they have been so long in coming.

In fact they haven't really come in any numbers even yet. The concept isn't new - buyer agents have been common in commercial transactions for years. And they are well established in a number of Western and Southern states. But Huth, as far as he knows, is the only agent on the North Shore who exclusively represents residential buyers.

Marge Frith, owner of Cove Realty in Salem, does part of her work as a buyer's agent, and hopes to do that exclusively in the future. "But I'm not there yet," she says.

Leo Berard, owner of Buyers Brokers of Cape Cod and president of the new Massachusetts Association of Buyers' Agents, says his organization is up to 180 members. He thinks there are at least twice that many agents in the state, and is convinced those numbers are going to "grow tremendously."

Of course, that still barely registers a blip as a percentage of the membership of the Massachusetts Association of Realtors, with 14,000 members.

If buyer agents do become the wave of the future, it will basically be because of one advantage - it levels the playing field between buyer and seller.

In the traditional system, the seller has an advocate. The buyer doesn't.  This changes all that.

While the real estate code of ethics requires all agents to "show honesty and fairness to the buyer in all transactions," they still represent the seller.

Thus, if the buyer tells them anything that might be advantageous to the seller, they have a duty to provide that information to the seller. That is true even when Real Estate Company A lists a property for sale, but Real Estate Company B brings in a buyer.

'Unique' approach
Huth, who had worked as a "conventional" agent for a couple of years before starting his current business, Buyer's Choice Realty, says the existing system "never seemed quite fair to me."

And when a local high school teacher approached him in February 1990, he signed on his first client.

"I had studied about buyer agencies at conferences," he says, "and so I ended up drafting a buyer-broker agreement, and I found that I loved it.

"It let me approach the purchase as if I were doing it for myself. That is really the unique thing about what we do."

But not the only thing, he and his very few colleagues on the North Shore would add.

Frith says she believes some agents, like herself, simply work better with buyers. "I think it is exciting to find somebody what they are looking for. It is a little like a puzzle. That's really why I got into it."

The advantages buyer agents say they bring include:

  • Broader inventory. Most seller's agents are committed first to showing properties in their own company's inventory, and next those that are in the MLS. A buyer agent can also show properties up for auction, foreclosure or for sale by owner. As a brochure for a California firm states, "it opens up the entire market- place for the buyer."
  • Money. A seller's broker is committed to getting the highest reasonable price for his client. A buyer's broker is out for just the opposite.

    "Not that we're trying to undercut prices," Huth insists, "but we can let a buyer know what a fair offer is. And when we make the offer, we can include reasons to back it up."
  • Anonymity (if desired). Selling prices can become very firm if a buyer is known to have deep pockets.
  • Negotiation assistance. Huth says he is allowed to do things for his clients that would be illegal for a regular realtor to do. "There are issues of confidentiality, loyalty, protection, representation, negotiation and information sharing," he says, "that a traditional agency is obligated to do only for the seller."
  • Money again. In most situations, buyer agents say it does not cost the buyer any more to hire them than it would to go through the traditional process.

    Under current MLS practice, if one agent lists the property and another finds the buyer, the two split the commission. Huth says most selling agencies are willing to do the same with him, although he arranges in advance for his check to come at the closing from the bank, not through the selling agency.

    "It's cleaner that way," he says, "because I want it clear that I don't have any connection with the selling agency."

A touch of hostility
But then, that concept of splitting the fee is one reason some realtors are not exactly applauding the rising of buyer agents.

David King, vice president of the Greater Salem Association of Realtors, says the organization is officially neutral, but acknowledges that some members are hostile to it.

"Certainly there are benefits," he says. "I guess the drawback would be anxiety over asking the seller to pay part of the fee for somebody representing the buyer."

That is exactly the problem Jay Burnham has.

Burnham, president of the MLS of the Greater Salem Association and manager of DeWolfe New England Real Estate's North Shore office, says he is not opposed to buyer agents.

"I think they're great under certain conditions. I've acted as one myself several times during the past 12 years."

But he says in those cases, he has always collected a fee from his client that was separate from the commission that goes to the seller.

Asking the selling agency to split the commission with a buyer agent is, "tantamount to asking an attorney representing one party to pay the fee of the attorney on the opposite side. I take issue with that," he says.

And how is that different from simply sharing a commission with a broker from another conventional agency?

There is indeed a difference, he says. "My major expense is advertising the inventory of homes in this office," he says. "I have about 100, and we spend tens of thousands of dollars to advertise them.

"I don't mind splitting that with another selling agent, be- cause I have the same opportunity through MLS to sell a property he may have listed. But I don't have that option with a buyer agent."

Burnham says he would "give my eyeteeth" to have the advertising budget of a buyer agent.

"All they have to do is take out a half-page ad promoting their business," he says.

Huth counters that buyer agents, because they don't list any properties, don't get the sort of steady, "bread and butter" income of the listing agencies.

Still, because of the fee issue and also because of liability issues, DeWolfe will cooperate with, but will not compensate, a buyer agent.

If a real estate company splits a fee with a buyer agent Burnham says, that is at least an implication that the company approves of what that agent has done. And if something goes wrong, "there are big liability issues."

Of course, there are ways around that. Frith says buyer agents frequently have their clients make an offer that includes paying a certain amount to the selling broker.

And while there is no absolute industry standard, in general when two agents split a fee, both take about 3 percent. So the offer generally tends to provide for payment to the selling agent in that range.

Huth says while technically the seller "pays" the commission, both the buyer and seller believe they are paying it. The buyer pays a higher price for the house than he would have, and the seller collects less than he would have.

"Actually, it is the transaction that provides the commission, both for the listing side and the selling side," he says. "The seller brings the equity to' the table, and the buyer brings the cash."

Changing the rules
Some of this may become a bit more academic on Jan. 1, when the rules of the MLS game will change.

The new rule will give selling agencies the option of co-operating with buyer brokers, compensating them, or both. While there is no rule against agencies cooperating now, this will make it more standard throughout the industry.

And according to those involved in tracking the real estate trade, that is just one reason traditional agencies probably had better get used to buyer brokers, because they are coming whether wanted or not.

Several suggest that it is much less a threat to conventional real estate than the advent of HomeView, which allows potential customers to get a close-up look at any home that interests their through an interactive computer program.

Berard, president of the state organization, says the growth will come partially because of the MLS rule change, partially because regulators in many states are "pushing full disclosure to consumers of all their options," and third, because national consumer groups like the American Association of Retired Persons, the Consumer Federation of America and even Ralph Nader are all in favor of it.

"It's really the only way to protect the consumer," he says.

King says the Greater Salem Association is not in the business of promoting or discouraging any specialty within the industry, but will provide all the education it can to its members.

"We want to help all the different specialties to flourish," he says, "and this is one where there is a lot of confusion and a need for education."

To help educate its members, the Association will be holding seminars on Dec. 11 in cooperation with the Greater Lawrence Association, and again Dec. 16 for MLS managers.

Huth believes once the adjustment is made, that all sides of the industry can get along.

And Burnham is willing to try out the coming changes. Allowing a choice in cooperating or compensating buyer brokers is good, he says.

"Ultimately, what you want is what is in the best interests of your customer," he says.

Source: Taylor Armerding, North Shore Sunday, December 6, 1992


Hamilton-Wenham Chronicle
June 9, 1993

Home buyers often don´t realize the agents they´re dealing with don´t necessarily have their best interests in mind. A new trend could change all that.

By Micky Baca

David and Danielle Dalton

David and Danielle Dalton found an agent who would represent them - and not the seller - when they bought their home in Newburyport three years ago.

(Photo by David Scott)

When David and Danielle Dalton of Newburyport began shopping for their first home several years ago, they were surprised to discover the real estate agents shepherding them through the process weren't working on their behalf.

In fact, like would-be home buyers around the state, David and Danielle had to sign a form stating they understood the agents helping them take one of the biggest steps of their lives were actually working on the other side of the negotiating table - for the property sellers.

"After they showed you a few homes, after they gained your trust, they'd sit you down in the office and show you the form," David says. "Then they'd say, 'Oh don't worry about it. Everybody has to sign it.'  And that's it."

"It was a real eye opener," he says. "Here you are, you're the one who's putting in all this money and you feel like you're the one who's got something to lose."

The Daltons finally shared their concern with Ronn Huth, an agent who had been recommended to them by a friend.  Huth offered to take part in an arrangement he had heard was being used in other parts of the country.

He would represent them in their home purchase by serving as a "buyer's agent," committed to looking out for their interests and getting the best possible deal for them instead of the seller.

With Huth's help, the Dalton's in June of 1990 found a house in Newburyport and ended up negotiating the price down well below what the seller was asking. And that was no fluke.

In 1992, U.S. Sprint, one of many large, corporations that often pay to transfer executives to new homes, wanted to know if it could save money by buyer's agents. The study concluded that house prices negotiated with the help of buyer's agents were 5.5 percent lower than deals done with traditional real estate agents.

On a $150,000 home, that translates into an $8,250 savings for the buyer.

"It makes the whole thing a lot more tolerable," Dalton says of working with a buyer's agent. "Buying a house is an ordeal. Knowing that a person is representing you makes you feel a lot better,"

Starting July 2, Massachusetts house shoppers like the Daltons will no longer have to stumble across the notion of engaging a buyer's agent. Under a new Massachusetts Real Estate Board rule, real estate agents will be required to present buyers and sellers with a new disclosure form spelling out that option, along with the other choices they have for working with agents.

"Whether you are a buyer or a seller, you can choose to have the advice, assistance and representation of your own agent," the form states. "Do not assume that a broker is acting on your behalf unless you have contracted with that broker to represent you."

The form goes on to describe the traditional seller's agents, buyer's agents and so-called disclosed dual agents that work for both sides. It will have to be presented to buyers or sellers during the first personal meeting they have with a real estate agent to discuss a specific property.

Even before the rule change acknowledging their existence, buyer's agents had been cropping up in the Massachusetts real estate market in the past several years.

More recently, consumer advocate Ralph Nader has been urging consumers to challenge the traditional real estate "cartel," by seeking out buyer's agents.

Both buyer's agents and their traditional seller's agent counterparts agree the advent of this new brand of real estate brokers could well turn the real estate industry as we know it on its head.

Seeking Fairness
Years ago, there was an agreement in the industry that agents should treat everybody fairly. It wasn't a very specific goal, but buyers pretty much hoped for the best.

Real estate agents back then functioned more as "finders" linking buyers and sellers.

But, according to Huth - who operates a buyer's agency called Buyer's Choice Realty out of Hamilton - the scales tipped substantially in the seller's favor around 1981 when the concept of "subagents" came into vogue. That was when real estate agents listing property through the Multiple Listing Service began the practice of offering a percentage of real estate sales commissions to brokers at other agencies (subagents) who came up with a buyer for the properties they listed.

What that meant, Huth says, is that subagents, like the real estate agents that originally listed a property for sale, were working for the seller. So, when a buyer showed up at a real estate agency seeking a house, he was dealing with two agents that represented the seller and no agent representing his or her interests.

What's more, the real estate industry was becoming more professional and began to define the role of agents more stringently. Seller's agents, under an increasing honed set of duties, were committed to getting the best possible terms for the seller. They could not reveal any key information about the seller to the would-be buyer, but were obligated to share any tactical information they learned about the buyer with the seller.

For example, if an agent knew that a seller was eager to get rid of a property - because he or she was moving or had divorced - and might likely take a lower price for it, the broker could not reveal that to the buyer who had walked in to his office seeking a house. On the other hand, if a seller's agent knew how much money the buyer was prepared to spend on a property or whether or not the buyer was under any time constraint, he or she was obliged to tell the seller.

David Hanna, who found a house in Hamilton with Huth's help, said this factor was a big plus.

"I had full confidence in him. I could tell him information, and know that he wasn't going to share that with the seller," says Hanna.

Subagents were also much more likely to have developed a personal relationship with the buyer, with whom they were spending far more time showing them various houses.

If subagents faced a convoluted set of demands, buyers were really confused by the whole arrangement In fact, recent studies have shown that many buyers feel real estate agents are working for them, even though the agents are actually working for the seller.

It was a concept Huth always had difficulty with.

"It just didn't seem fair to me that two (real estate agents) were on the seller's side," he says. "I was supposed to be having full loyalty to a seller I never met, when I was spending months with a buyer - driving them around in my car, forming a relationship."

Huth was something of a pioneer, he says, in launching a buyer's agency back in early 1990. At first, he served as a buyer's agent out of the traditional agency he worked for. But, he says, he found that to be too much of a potential conflict, so he struck out on his own.

Two years ago, buyer's agents formed their own professional group, the Massachusetts Association of Buyers Agents, for which Huth serves on the board of directors. MABA now has approximately 300 members, only about one quarter of whom are exclusively buyer's agents. Locally, there is one in Newburyport, and another, Cain & Polley Real Estate, in Essex. Overall, there are about 14,000 real estate brokers in the state.

Doing their homework
Huth says buyer's agents get better deals for their clients because they, unlike seller's agents, put their knowledge and research efforts into strengthening the buyer's position. He does a full review of any property a buyer is looking at, checking registry records and comparing the prices of other houses in the area.

That means a seller's agent has to do a lot more homework as well to justify the price they're asking for the seller, he says.

This extra effort by Huth was essential in his case, says Hanna, because he and his wife were moving from out of state, and couldn't check out proper- ties in person.

"He really paid attention to things, whereas if the agent had been working for the seller, he might not have checked," he says. "After doing it this way, I'd never do it any other way."

Huth also helped Nancy and Roger Thompson find their Western Avenue, Hamilton, home. The two had just married and it was the first house that they had bought.

"We didn't have time to look around," says Nancy.

The arrangement with Huth, she says, "worked wonderfully." In about a month, the couple was closing on a house in the neighborhood of Cutler School.

Seeking a fair return
Compensation of buyer's agents for their services appears to be a key sticking point to this new, consumer-oriented type of real estate representation.

Under the more traditional real estate transaction, it is perceived that the seller is the one paying real estate agent fees. A seller generally negotiates with his or her listing agent as to what percentage of the property's selling price (let's say 6 percent) that agent will get in commission.

The listing agent, in turn, pays out a portion of that commission to the selling broker (possibly 3 percent) who can either be from the listing agency or, in most cases, from another agency.

But what happens when a buyer's agent enters the scenario is a pretty gray area at this point, many real estate agents agree.

For example, Huth charges buyers a flat fee for his services, contending that tying his payment to the sale price of the house would be a similar conflict of interest to that of the seller's agent. The higher the amount the buyer pays for the property, the higher the agent's commission is.

But that means that the buyer appears to be paying a fee that they wouldn't have had to pay using a traditional real estate agent. It also means that the listing agent, if they still collect the full 6 percent, can be perceived as double dipping - unless some arrangement can be made to reduce the listing agent's fee and pass the savings on to the buyer or the seller.

Huth contends, however, that buyers have always paid the broker fees indirectly in the price of the houses they purchase. And the Sprint study indicates buyers may more than make up any buyer's agent fees they pay through a better sales price.

Some buyer's agents do choose to base their commissions on a percentage of the sales price and collect their fee from the listing agent, much like a subagent does.

But not all traditional real estate brokers are willing to pay a commission to buyer's agents. Some traditional agents fear that buyer's agents will "disrupt normal business in such a way as to effect market share. It's hard to understand the financial repercussions of this new development.

A Hamilton realtor said, however, that she doesn't feel particularly threatened by the new development. Indeed, she said the market for buyer's agents is understandable.

Rae Scott, a realtor with Hunneman, said there are uncomfortable aspects of the cur- rent arrangement.

"It's always struck me as somewhat strange that here I am developing this fabulous rapport with Mrs. Buyer, and I'm working for Mr. Seller," says Scott.

But in general, she says, buyers understand that the agent is working for the seller.

"Buyers are sophisticated enough to understand that," she says.

The affect of the new disclosure law, Scott says, will be "minimal," although she said there were some groans in her office when it was announced.

Just how buyer's agents should be paid and who is actually doing the paying isn't a debate that is likely to be resolved soon.

"If you want to upset a group of brokers, that's the question you raise," Says Monica Staaf, legal affairs manager for the Massachusetts Association of Realtors.

Generally, Staaf says, the association sees the recognition of buyer's agents as a good thing. "In some ways, I feel that it will level the playing field. Overall, people are beginning to accept the concept"

Serving two clients?
If the industry is to be divided into buyer's agents and seller's agents, just how that reshuffling should take place is another sticking point. Should a single agency have both buyer's agents and seller's agents? Should agents act as buyer's representatives in some contract agreements and seller's representatives in others?

And, Perhaps most controversial, can agents effectively serve both the buyer and the seller by acting as a "disclosed dual agent?"

Some brokers are viewing the option of adding buyer's agents to their offices as a means of adapting the traditional seller's agency to the new demands by buyers as consumers.

Others, like Huth, say the two can't be mixed in the same office without conflict.

Huth calls dual agents "the equivalent of Russian roulette."

A dual agent serves neither party with the same level of service as an agent representing one or the other, he says. A dual agent would be acting more as "facilitators," he says.

Explaining the options
That leads to a whole other school of thought regarding the future of real estate. According to Staaf, there are those in the industry in Massachusetts who think real estate agents should become facilitators, not representing either party.

For now, as Of July 2, the choice will be up to consumers.

David Dalton expects the new options will be heartily welcomed by first-time buyers like he was three years ago. "I know for young people coming in, the mountain of money you have to put up is staggering," he says, adding he would definitely use a buyer's agent again if he bought another house.

"There's such a conflict of interest," he adds. "Why didn't this come along sooner?"

Source: Micky Baca, Hamilton-Wenham Chronicle, June 9, 1993

The Buyer´s Agent

Buyer broker concept slowly catching on in North Shore


When Janice and Allan Gauthier were house bunting last year, they wanted a broker who "would truly be on our side," recalled Janice.

Moving from Connecticut to the North Shore, the Gauthiers needed a broker willing to preview the homes before they made five or six weekend visits, someone who would weed out homes on busy streets or properties too small for a growing family.

Janice and Allan Gauthier

Janice and Allan Gauthier stand on the front steps of the Hamilton home they purchased with the help of Buyer´s Choice Realty of Hamilton, a company that works with buyers only.

After attending a home-buying seminar and talking with friends, the Gauthiers decided to hire a "buyer's broker," a real estate agent who works exclusively for the buyer.

Although this was their first home purchase Janice and Allan Gauthier recall the experience as a pleasant one.

"This is the most money we've ever spent on anything in our lives. We wanted an ally, someone who would advocate for us," said Gauthier. The couple chose broker Ronn Huth of Buyer's Choice Realty of Hamilton, an exclusive buyer's agent.

As parents of two young boys, the Gauthiers had researched the local school system and decided Hamilton was wanted to live.

Since they were limited to a price range of $150,000-$160,000, the Gauthiers spent a lot of time searching for a home they could afford, looking at more than 20 homes in Danvers, Beverly and Essex.

"We never thought we'd be able to buy a house in Hamilton.  But we think we got the sale of the century," said Janice Gauthier from the living room of her Victorian cottage-style home, which sold for $159,800.

She credits Huth with providing "a personal touch" that helped them successfully conclude the deal on their eight-room home when three other offers were on the table.

"Ours was not the highest bid," added Gauthier, who believed their broker's recommendation to obtain a letter of mortgage approval from the bank gave them the edge on the deal.

The early 1990s have seen a growing trend of hiring buyers' agents, although only a sprinkling of independent companies offer the service here.

Statewide, only 130 brokers work for the buyer only, and another 100 brokers belong to the Massachusetts Association of Buyer's Agents (MABA), according to Ronn Huth, executive vice president of MABA.

Those who opt to work exclusively for the buyer do not list properties, explained Huth, who recalled that his real estate colleagues thought he was crazy in the law 1980s when he decided to become a buyer's broker.

"The buyers are the people who bring the cash to a transaction.  They should be represented too," said Huth, who pointed out that real estate agents traditionally have expended most of their efforts to obtaining listings.

Because buyer's agents do not list properties, their livelihood depends upon finding a house for their client, the buyer, whether the property is in the multiple listing service computer, for sale by owner, or a foreclosed or auction property.

Huth stressed, "We represent the buyers.  Any agent in my office will tell you they sleep better at night" in their quest for a buyer's best interest, he added.

The Hamilton broker predicted that consumer awareness and the demand for buyer's agents will determine the ultimate success of this approach, which is relatively new in the real estate industry in the New England area.

Source: Kathryn Pearson, North Shore Community Newspapers, September 13, 1995


Essex County Newspapers

Ron Huth knew something felt wrong soon after he became a Realtor in 1989.

"I felt very uneasy about taking buyers around and knowing my relationship and duty was to the seller," he says. "I told them not to tell me anything they wouldn't tell the seller."

"We protect people who buy real estate. There are a lot of ways in which a buyer of real estate can get into a real mess." - Ronn Huth

But still, a young couple trying to buy their first home would often say things that Huth knew he had to tell the seller. This led him to become the first real estate agent on the North Shore exclusively working for home buyers instead of sellers.

"For me, never being in the industry until I became a Realtor, it was very difficult. I couldn't do this day-to-day and live with myself," says Huth.

When an Ipswich teacher who was looking for a home asked Huth to represent him instead of the seller, he researched it and decided to open Buyer's Choice Realty in Hamilton.

Five years later, he has seven agents working for him in a growing field that is still unfamiliar to many.

"Everything that a traditional real estate agent or subagent owes to a seller, we owe to the buyer of property," says Huth. "The difference is our approach is really a consulting and informational approach rather than a selling approach."

There isn't as much money in it for Huth as for traditional real estate agencies, since his firm does not "double dip" by providing house listings and negotiating for a sale. The agency that lists a home can either sell it or subcontract another agent to sell it.

"Most listing services offer the same fee to a buyer agent as a seller's broker," he says. The fees are also negotiable.

Huth says he will provide a would-be buyer with information on listed and other properties available, then compare a property with others to determine a fair market value. This includes looking at the history of the house and talking to neighbors, he adds.

"We will then go in and negotiate for you. Our intent and mode of operating is not to gouge the seller," says Huth. "We protect people who buy real estate. There are a lot of ways in which a buyer of real estate can get into a real mess."

Traditional real estate agents feel they can offer plenty of information for buyers.

"Most buyers will find working with a traditional agent more than satisfies their needs," says David King, spokesman for Wakefield-based Carlson Real Estate / Better Homes and Gardens. "I think the vast majority of buyers would not need buyer representation."

While he concedes that the traditional agent works for the seller but with the buyer, King says he only sees a need for a buyer agent in extreme cases.

"It would be difficult for me to say where they'd be best served by a buyer agent," he says. "With a traditional agent, they can get all the information they need. I believe strongly that the vast majority are better off working with a traditional agent."

But Huth feels there is a big difference between the two types of agents.

"It is distinctively different. It is night and day," he says. "I can't see why any buyer of real estate would want to do it any different. If you're a traditional agent and you tell a buyer what they should offer for a property, you can lose your license if the seller finds out."

Buyer agencies are growing throughout the country in areas like California and Hawaii, says Huth.

"It's definitely a growing factor in the marketplace," he adds. "More and more consumers are going to have representation."

Source: Jay Kumar, Essex County Newspapers, April 28, 1995


Real Estate Superstar
1998 Realtor of the Year

Susan Warnick congratulates Ronn Huth

Susan Warnick congratulates Ronn Huth

Recently a North Shore resident was singled out as a real estate superstar when he was named Realtor of the Year by his local professional association. Even though Ronn Huth of Hamilton is a top-performing agent, he received the award because he is a star outside the sales arena.

The term Realtor of the Year evokes an image of a super salesperson, someone who can close a deal in 15 seconds and travel from the office to the Registry of Deeds faster than the fabled "speeding bullet." While the Realtor of the Year award does not necessarily require that the recipient is a superman or superwoman, it does mean that the recipient is indeed a superb Realtor, a super citizen, and a consummate professional.

The purpose of the award is not to honor individuals as super achievers in sales. Rather, it is intended to spotlight individuals who exemplify the values and ethics of the Realtor organization, says Linda Skory, executive director of the North Shore Association of Realtors.

Potential candidates are nominated by fellow Realtors and judged according to standards established by the National Association of Realtors. These include participation in local, state, and national Realtor associations as well as community service.

The standard for professional achievement, according to he National Association of Realtors, "is not the number of dollars earned, but the public recognition gained from the manner in which she/he conducts her/his business, such as outstanding advertising programs, imaginative and creative land utilization, local press recognition, general reputation for professional competence."

While the criteria are the same and nominations are solicited from fellow Realtors, the selection process differs by local association. For members of the North Shore Association of Realtors, a committee of affiliates, members of related professions who participate in the Realtor association, makes the decision. Typically these include home inspection companies lenders, publishers, and law firms.

Since the North Shore association's Realtor of the Year candidates are asked to complete extensive documentation, they know they are under consideration for this award. Other associations, like the Newburyport Board of Realtors, complete the nominating process without any direct involvement from the candidates, who usually have no idea that they are even being considered for the award.

Prior knowledge of his nomination did not lessen the satisfaction, Ronn Huth says he felt when he heard his name announced at the North Shore Association of Realtors' lunch on June 11. One of the first agents on the North Shore to solely represent buyers, Huth describes himself as "a pioneer of the buyer-broker movement in the Boston area." Huth believes the award signifies greater acceptance among traditional agents for buyer brokers, even though it is based on his significant personal contribution to the community.

Huth is a volunteer assistant pastor of Community Covenant Church in West Peabody, a position he shares with Dr. Timothy Johnson. He says he is happy to be able to be of service in a pastoral capacity and to use his theological background. However, Huth, who is committed to an ethic of customer service and helping people, does see real estate as a ministry of sorts.

Source: Camilla McLaughlin, Essex County Newspapers, June 26, 1998

Hall of Fame Names a REBAC

Who’s Who

Real Estate Buyer Agent Council - 2000


When a professional organization has more than 34,000 members, to sort out a select few for special recognition is no small task. Nor, can it be characterized by accuracy in any sense of chronological significance.

Thus, the initial induction of seven people into the REBAC "Hall of Fame" should be regarded as honoring individuals who are representative of the high caliber of professionalism exhibited by thousands of REBAC members.

To be sure, each of the original honorees are well deserving of recognition and are representative of the standards established by REBAC in instituting the Hall of Fame earlier this year.

Nominated by their peers, these men and women – all Accredited Buyer Representatives – have proven records of outstanding service to their clients, their communities, their profession – and – to the growth and development of buyer representation and the Real Estate Buyer’s Agent Council.