REALTOR® Magazine convened a roundtable of what it describes as some of the nation's most innovative and successful residential brokers to get their views on where the real estate business is headed.  The first question posed concerned Exclusive Buyer Agency, specifically, "Where do you see exclusive buyer agency going in the years to come?" 

Dave Jenks, President of Keller Williams Realty, does not feel that exclusive buyer agency will gain much traction.  He cited the fact that "seller listings create market presence and serve as a magnet for buyers", going on to state that "Those agents and companies that have seller listings will continue to get the lion's share of buyer leads."  While I do agree with Mr. Jenks that not having listings does curtail the amount of leads which exclusive buyer agents might otherwise receive, the advent of IDX and VOWs has leveled the playing field to a certain extent.

I do think that the main reason that NAR has not gotten serious about addressing the serious non-compliance with existing agency disclosure laws is the fact that such compliance poses a threat to the practice of double-dipping.  Informed and educated consumers are much more likely to seek out the services of an exclusive buyer agent, in my opinion, than those who are corralled into working with a seller's agent or dual agent without their knowledge or consent.

Lyle Martin, Co-Founder and CEO of Assist-2-Sell, doesn't feel as though an agency just for buyers is needed.  He also feels as though fees paid to buyer representatives will be going down, pointing to the example of rebates being offered to buyers.  While Mr. Martin is obviously entitled to his opinion, I respectfully disagree on both points.  Saying that an agency just for buyers isn't needed flies in the face of everything we know about agency.  Simply stated, the listing agent's job is to get the seller the highest price possible on terms most favorable to the seller.  The buyer agent's job is to get the buyer the lowest price possible on terms most favorable to the buyer.  When a buyer deals with an agent working for a broker that also takes listings, these roles can be in direct conflict.  Hence the need for exclusive buyer agencies, who can give objective advice and opinions, and negotiate on behalf of their clients in furtherance of their fiduciary duties.  Single agents also have the ability to provide the same level of fiduciary service with respect to a particular transaction, never engaging in the practice of dual agency. 

Jaren Davis, Vice President of Coldwell Banker, believes that consumers are interested in one stop shopping, and that those adopting a single-purpose business model are moving in the wrong direction.  Mr. Davis' opinion flies in the face of almost everything I have read recently from real estate coaches and others advising their clients that they must develop a niche to survive and thrive.  As Realtors are no longer the gatekeepers to listing information, they will be forced to demonstrate their value proposition to consumers, or they will be left by the wayside.  I just don't think that the one-stop-shop business model is a compelling value proposition for consumers.

I wonder if Mr. Davis may eventually be singing a different tune now that Coldwell Banker has been sued for breaching its fiduciary duties to its clients?  According to a recent article in the Washington Post, two buyers in Minnesota filed suit Feb. 21 against Coldwell Banker Burnet Realty, one of the largest brokerage firms in the state, charging it breached its fiduciary duties under state law by steering the buyers to its own title and settlement affiliate, Burnet Title, despite knowing that the affiliate's fees were significantly higher than those available elsewhere.  Nothing like a little one-stop shopping for the consumer, heh?

Unfortunately, no exclusive buyer agent practitioners were consulted by Realtor Magazine Online for an opinion regarding this question.  In my opinion, exclusive buyer agency will continue to grow in popularity as consumers become more educated about agency choices and as the real estate industry faces increasing pressure from both regulators and the plaintiffs' bar.  Contrary to Mr. Martin, I believe that seller fees will come under just as much or more pressure than buyer fees.  We will all be forced to become more competitive to succeed.  Just my opinion as an exclusive buyer agent, for what it's worth.  I also think that real estate practitioners will need to specialize to thrive in the information age, and that the practice of exclusive buyer agency is a specialized niche which will continue to grow in popularity with consumers and practitioners.