All transactions have a buyer and a seller, but agent representation is overwhelmingly in favor of sellers, a carryover from the tradition of subagency. That means there is an opportunity for agents to represent buyers as exclusive agents or as single agents, and in some states as facilitators, dual agents, or designated agents.

Four out of five homes are sold through a real estate professional according to the National Association of REALTORs®. But, says the National Association of Exclusive Buyer Agents,(NAEBA) less than fifty percent of buyers go to the closing table represented. The National Association of REALTORS® puts that same number even higher. According to its most recent buyer/seller survey, 79 percent of homebuyers purchased a home through an agent, but only 51 percent were represented by an agent at closing.

What do these statistics mean? Do buyers not want representation? Are they not aware that representation is available? Or are they buying properties through listing agents? Are they aware that the listing agent represents the seller in the transaction and can only be a facilitator for the buyer?

Clearly, many Realtors are dropping the ball when they fail to market to and or properly serve the buyer's side of the transaction. Granted, buyers can be skittish. Many prefer to surf the Internet and shop for homes anonymously. They may work with more than one agent, thinking they will get a better home or a better deal somehow. They are more difficult to get under contract particularly if they are told that the seller pays the commission and that real estate services are free.

Surprisingly Internet home buyers are more likely to use an agent than offline buyers, says the N.A.R. by more than 10 percent. The N.A.R. report has some interesting statistics that show that buyer's agency has a very real customer - 60% of all buyers surveyed most want the real estate professional to help them find a home; 12% want help with pricing; and 8% want help with financing.

About 15 percent of agents are exclusive buyer's agents, according to the N.A.R. That number can be even fewer in certain regions. According to Carol Frick, 2000 president of the Michigan Association of REALTORS, approximately five percent of brokers operate single agencies. The rest of the membership practices disclosed dual agency.

But two new buyer's brokerages believe the timing is right to expand the numbers of exclusive agents. Both Tom Hathaway, president of the Buyer's Agent, out of Memphis, and Robert Harple, president of Fidelis based in Sunrise, Fla., believe the timing is right to expand buyer's agency. These companies offer master franchises and are planning on targeting top producers at traditional real estate companies to woo them into owning their own franchises.

According to the two men, the opportunity is very real, and the groundwork has already been done. Points out Harple," Coldwell Banker and Re/Max are sold out of franchises in prime locations. That means that top producers who are ready to make the move are going to start considering (exclusive buyer brokerage) as a viable option."

The Buyer's Agent, which was founded in 1988, has offices in 65 cities around the country. Fidelis has about 30 markets.

"We've spent the last decade designing the best marketing and management tools and exclusive buyer agency training," said Hathaway in a recent interview. "We wanted to make sure that we were able to offer the highest level of service possible before we aggressively sought new franchises."

Groundbreaking has been done indeed. Hathaway, among other buyer's agents across the country, experienced every intimidation tactic in the book over the last two decades to prevent them from gaining a following. One of his franchisers was taken to court in Oklahoma for advertising that he could save consumers money. The Oklahoma Supreme Court not only vindicated the agent, but admonished the Oklahoma Real Estate Commission for failing to understand its own by-laws.

Hathaway has won other battles, particularly in getting buyer's agents paid. Traditional agents still want to collect both sides of the transaction, and most brokerage firms business models are based on being able to do so. In house sales are encouraged and rewarded with extra incentives by many brokerages. Listing agents still promote sub-agency by arranging for buyer's agents to be paid out of the seller's proceeds. Hathaway's legal staff simply puts language in the offer in which the buyer's agent will be paid out of the proceeds of the transaction, working within the legal guidelines set by MLS rules of engagement and the N.A.R. Code of Ethics.

The problem for would-be buyer's agents is in getting their names known so that they can build a business the way listing agents do off of signage, listings, and ads.

Right now, buyer's agents are getting little help, but they are making headway. The NAEBA says its membership is growing, but the organization serves only exclusive buyer's agents. The Real Estate Buyer's Agent Council, (REBAC) which allows transactional agents as well as single agents in its membership also reports more growth.

To give buyer's agency a real shot in the arm, several traditions will have to change. The buyer's agent who can successfully adopt or influence these changes will emerge as a new model of service for the real estate industry, but it won't be easy. Perhaps that's where the Internet can help. Buyer's agents can offer disclosures and explanations of buyer's agency and put them in their newsletters and on their Web sites.

All agents must be willing to put their faith in the referral system. If buyer's agency takes hold beyond its minority positioning, then there will be a new cooperative standard among agents. Agents must be willing to pay and accept referral fees instead of serving as many sides of the transaction. The market can bear what that fee may be.

Published: May 30, 2000

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