As consumers are demanding more for their money and pressuring the listing side of commissions, the outlook couldn't be better for a niche specialty such as exclusive buyer's agency. Yet, despite such a favorable business climate, exclusive buyer's agency is stagnating.

According to the National Association of Exclusive Buyer Agents (NAEBA), whose members do not take listings or affiliate with brokerages which accept listings, the organization has plateaued at approximately 450 members. In the middle of the nation's largest real estate boom in recent history, infighting, ineffective management, and a resistant industry have taken their toll, says Tom Early, spokesperson for NAEBA.

The situation had deteriorated so badly that one board member threatened to sue the other members as well as the NAEBA organization over inactivity and gridlock, and was subsequently removed. While he agrees that the banished board member was right about the organization's problems, says Early, it went too far when NAEBA was threatened.

"Every year we start over with a new group of leaders because we are an all-volunteer organization," says Early. "It's impossible to lead people that way when you are spending the year working on the past and present instead of planning for the future."

So, NAEBA decided to do something about it. The organization hired an association management company and submitted to a tough audit. "We need to be managed by professionals," says Early. "Now we have a three-year strategic plan."

"What we are going to concentrate on is doing fewer things and doing them better and getting away from telling people how to run their business," says Early. "A national organization should do a better job of presenting the concept of what an EBA is."

One of the first things the new management team and consulting company will look at is member attrition.

"We get new members and they drop out. You have people who go into business with no idea how to run it. They fail and look at something else to do," says Early. "Very few have left NAEBA because they don't believe that EBA is a good concept. But some have trouble for being an EBA, and they just can't make a living."

Early recalls that when he became an EBA over 10 years ago, he encountered a great amount of resistance from the traditional brokerage community, and he says these prejudices still exist. "We have people who say that in their areas there are brokers offering adverse splits to EBA's, not allowing them to present buyers' offers, throwing up roadblocks to showings, and they get away with it," says Early. "You try to take it to the board of Realtors, and you don't get anywhere because it is run by the same brokers you're complaining about. There's no enforcement."

This negative trend has come to a grinding halt in the major markets, says Early. "Buyer representation is part of the business whether you are traditional or an EBA, but when you get into the smaller outlying markets, things haven't changed much."

However, dropping listing fees may cause all markets to reconsider the positive points of buyer representation. EBA's don't take listings, and aren't in competition with agents on the listing side. That puts them into the position of referring buyers with homes to sell to the agents of their choice.

Another advantage is the new buyer. Buyers are more informed because they have access to so much information on the Internet, says Early, and that's an advantage. "I locate, evaluate and negotiate," says Early. "The Internet is about locating, and buyers can go out and locate property, but they do not have 20 years experience in evaluating and negotiating. Out of a neighborhood of 30-year-old homes, how do they know the differentiating feature of those homes? There is only one - condition. They can see what it sold for but not that it had new windows, furnace, AC, roof and the other home didn't. That's where buyers depend on me."

The new NAEBA also plans to address the image and profitability of EBAs.

Early acknowledges that he among other EBAs have chafed some in the Realtor community by criticizing the ethics of agents taking double dips. "An EBA is bull-headed and egotistical," admits an unrepentant Early. "These are the people willing to go against the tradition of the industry, the real mavericks in the market.

"We are also the light for those who want to be mavericks, but what we have failed to do is show anyone that there is light at the end of the tunnel," he continues. "You can give up half of the business and make a living."

"I do it everyday."

Published: July 27, 2001

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