Like underdog Rocky Balboa, the National Association of Exclusive Buyer's Agents (NAEBA) is bloodied but unbowed as it overcomes internal problems to face its biggest foes - states who want to do away with agency disclosures or agency relationships.

Arguments over FSBO representation hurt NAEBA earlier this year, just when it was gaining growth momentum. The association lost significant membership due to some members' practice of advertising FSBOs to show the range of properties available in their markets and daring NAEBA to do anything about it.

Ed Hein, spokesperson for NAEBA, said, "We did lose people, but now people are saying NAEBA is a viable organization. We stepped up recruitment, and a lot of people joined to influence the direction the organization would go in the future."

Among significant changes by NAEBA was the redefinition of what an exclusive buyer's agent is. "The debate went on for months," explains Hein. "To a person outside of NAEBA, it was making a mountain out of a molehill, but it was a very big issue."

"Some members saw incorporating FSBOs as an attempt to better market their services, advertising for sale by owners as a means of demonstrating to clients what kind of properties were on the market. NAEBA disallows anyone from working with active listings on the MLS, because that means you are representing sellers. Some felt that if you use FSBOs, you wouldn't be representing the seller. Another group said no - we want to be completely pure, no MLS, no FSBOs."

NAEBA resolved the issues by adopting a definition of exclusive buyer's agency which did not include restrictions on advertising.

"Some members said if you put prohibitions on how we advertise you are telling us how to advertise our business. That should not be the goal of any organization," explains Hein.

"They were right," continues Hein. "All we can do is establish a set of standards for membership to abide by. NAEBA members do not represent sellers in any form whatsoever. If they do use FSBOS in their advertising, they are doing it with any intention of representing the seller and it is made clear."

NAEBA is bouncing back with an all-time high membership and ready to train its lobbying power on bigger problems - states who want to do away with agency disclosures or agency relationships. Either enactment would deal a mortal blow to buyer's agency, which already suffers from poor acceptance and recognition by some industry professionals and consumers.

"Agency is more common than not," says Kathleen Chiras, NAEBA spokesperson. "In most cases, an agent must inform all parties whom they represent before the contract is written or upon the first meeting. It's different in all states, but some states are working to remove agency level services."

"In Oklahoma there is a move afoot to eliminate agency level services to buyers. NAEBA mounted a vigorous campaign in the Oklahoma legislature," says Chiras.

"In Florida, the Florida statute requires that consumers receive a notice of non-representation when an agent is not going to work for them, and cautions consumers not to give away their intentions. It tells them they have the right to hire an agent to represent them. But there is already movement in the legislature to rescind this notice."

If consumers are not disclosed by licensees (licensed real estate professionals) whom they represent, consumers would have no way of knowing if they can be represented by an agent (a buyer's agent.) The licensee could be a facilitator which works as a transactional agent - an advocate for neither the buyer nor the seller.

"Connecticut is working toward designated agency," says Hein. "Designated agency allows agencies that have listings to designate someone in their office to be a buyer's agent. That is strange that when someone lists property with an agency that every agent has a responsibility to those listing clients. This would allow someone in the office to represent buyers alone. It renames dual agency and will dupe the public with new language. Buyers are not well served by designated agency."

"Messing around with these rules in state after state, one has to wonder where the influence is coming from that would cause state legislatures to do things that are not in the best interest of home buying consumers," accuses Hein. "Our goal is to educate the consumer that they have the right to full representation if they choose. Exclusive buyer's agents have the ability to provide full fiduciary responsibility."

Published: April 26, 1999

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