An exclusive buyer agent (EBA) (also known as an exclusive buyer broker (EBB)) is a

U.S. The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territori ...

real estate Real estate is property consisting of land and the buildings on it, along with its natural resources such as crops, minerals or water; immovable property of this nature; an interest vested in this (also) an item of real property, (more genera ...

firm (or an agent or broker who works in such a company) that represents only buyers of real estate. EBA firms never take listings and, therefore, never represent the seller in a real estate transaction. Exclusive buyer agent firms have chosen this business model in order to eliminate the

conflict of interest A conflict of interest (COI) is a situation in which a person or organization is involved in multiple interests, financial or otherwise, and serving one interest could involve working against another. Typically, this relates to situations i ...

that exists when one firm attempts to represent both buyer and seller in the same transaction. An EBA or associated broker does not take or hold listings or represent the seller or

landlord A landlord is the owner of a house, apartment, condominium, land, or real estate which is rented or leased to an individual or business, who is called a tenant (also a ''lessee'' or ''renter''). When a juristic person is in this position, t ...

in any way, nor do the agents working under or for him/her. This includes advertising "

for sale by owner For Sale By Owner (FSBO) is the process of selling real estate without the representation of a broker or agent. Homeowners may employ the services of marketing or online listing companies or market their own property. Typically, they represent th ...

" properties. In many states, by law, the broker, or agent must have a written

agency agreement An agency agreement is a legal contract creating a fiduciary relationship whereby the first party ("the principal") agrees that the actions of a second party ("the agent") binds the principal to later agreements made by the agent as if the princi ...

to represent the buyer exclusively. Without one, the broker or agent may be working for the seller or in a limited capacity.

History

In 1983, a

Federal Trade Commission The Federal Trade Commission (FTC) is an independent agency of the United States government whose principal mission is the enforcement of civil (non-criminal) antitrust law and the promotion of consumer protection. The FTC shares jurisdiction o ...

study revealed that more than 72 percent of home buyers in the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country Continental United States, primarily located in North America. It consists of 50 U.S. state, states, a Washington, D.C., ...

mistakenly believed that the agent who was showing them homes was representing their interests. As a result, laws requiring agents to disclose whom they actually represent have been passed across the country. As consumers generally became aware that most agents worked for the seller, many began demanding their own representation. Around the same time, these ideas were being advocated by Honolulu attorney, educator and author of many books, John W, Reilly. His 1987 book "Agency Relationships in Real Estate" was the culmination of several years working with the

National Association of Realtors The National Association of Realtors (NAR) is an American trade association for those who work in the real estate industry. It has over 1.4 million members, making it one of the biggest trade associations in the USA including NAR's institutes, so ...

(NAR) and NARELLO the license law arm of the association. In November 1985 California entrepreneur Ridgely Evers' America's First Home Store opened in Chandler, Arizona, as the first Exclusive Buyer Brokerage in the USA. In 1986 the name was changed to Buyer One and the company had its first public offering. The first national franchise to offer Exclusive Buyer Brokerage was The Buyer's Agent Inc., which was formed in July 1988 by Tom Hathaway, a former state

highway patrol A highway patrol, or state patrol is either a police unit created primarily for the purpose of overseeing and enforcing traffic safety compliance on roads and highways, or a detail within an existing local or regional police agency that is prima ...

man and investigator/compliance officer for the

Missouri Missouri is a state in the Midwestern region of the United States. Ranking 21st in land area, it is bordered by eight states (tied for the most with Tennessee): Iowa to the north, Illinois, Kentucky and Tennessee to the east, Arkansas t ...

Real Estate Commission.

Method of exclusive service

Real estate Real estate is property consisting of land and the buildings on it, along with its natural resources such as crops, minerals or water; immovable property of this nature; an interest vested in this (also) an item of real property, (more genera ...

firms in the United States can represent both buyers and sellers in the same transaction, and when representing both, derive profit from both the seller and buyer side of the transaction. While some states have, at the insistence of

Realtor A real estate agent or real estate broker is a person who represents sellers or buyers of real estate or real property. While a broker may work independently, an agent usually works under a licensed broker to represent clients. Brokers and agen ...

trade groups, created various forms of dual agency to allow one company and in some cases an individual agent to represent both sides, other states have continued to hold such practices as illegal. In the opinion of EBAs, it is not possible to faithfully represent the best interests of opposing clients, in the same transaction, simultaneously. The service structure for EBA real estate practitioners is to show buyers all possible listings from other cooperating brokers as well as all other sources, such as

s. Then, they assist the buyer with evaluation and negotiation and advocate in the buyer's best interests without restriction. In their booklet "Shopping for a Home Loan" The United States Department of Housing and Urban Development's (HUD's) settlement cost bookle

(page 6) recommends that home buyers consider using an Exclusive Buyer's Agent in their home search. EBA firms amount to less than 1/2 of 1 percent of all real estate firms in the US. The EBA business model of unconflicted buyer representation eliminates the possibility of the buyer being confronted with the conflicts of interest which may be associated with the Dual, Limited or Designated Agency business models.

References

External links

National Association of Exclusive Buyer Agents official website
{{Real estate Real estate in the United States Real estate in Australia