Be careful how you run your business. The Feds could not only be watching you – they may make their decisions on whether to use your services based on what their peers have to say, say some brokers.

”Buyer representation is a natural for law enforcement because they are private by nature,” explains Tom Hathaway, founder of The Buyer's Agent franchise. “They don't want people to know they are police, or that they have guns in their houses, or that they are undercover. They want someone who will absolutely represent them.”

While there are no official contracts with any government organizations, Hathaway reports that The Buyer's Agent appears to have a growing niche with law enforcement officers who like their privacy - including wearing concealed weapons to showings.

Hathaway began his connections with law enforcement in 1977 when he worked for the Division of Professional Licensing as an investigator, and became Chief of Enforcement for the Missouri Real Estate Commission.

"We were represented by the State Attorney General's office, headed then by John Ashcroft," recalls Hathaway. "I was paid by the real estate commission, but the investigative division I reported to was coordinated through the Attorney General's office."

”That’s where I got the idea for exclusive buyer’s agency,” says Hathaway. “It was so obvious it was needed. Ninety-five percent of complaints were from buyers, and they are the ones with the money.”

When he began his exclusive buyer's agency business in 1988, it was easy to promote his services through the government channels with people who already knew him.

"We used to help people through a link with the Department of Transportation," says Hathaway. "That included reaching the Coast Guard, the FAA, the Highway Administration, and they told other people about us. We've mostly grown through word of mouth. There’s been a change of administration and now they contract with Cendant, but we are still getting lots of referrals. Half of our business is related to the federal government. We represent people from the U.S. Marshall’s office, the DEA, and the FBI.”

Business is growing from the FBI for a couple of reasons. One of Hathaway’s newer agents is the son of the federal agent who headed the FBI office for northern Mississippi.

”I helped him buy his first home. Eventually he quit his job and came to work with us,” says Hathaway. “He handles a lot of FBI clients now.”

But there’s another reason why more business is coming from holster-wearing clients - The Buyer’s Agent’s peripheral involvement with a recently settled real estate lawsuit.

Vince Hathaway, a Buyer’s Agent franchisee with Best Buy Realty and brother to Tom, explains.

”We had an agent named Paul Arco, who has since passed away, who helped a buyer purchase a home in an upscale neighborhood. When our buyer had the home inspected, structural problems were revealed. We write a contract that allows our buyers to walk away if the seller is unwilling to make extraordinary repairs which are uncovered. In fact, the seller didn’t want to give back the buyer’s earnest money, which came back to haunt him later. Our buyer bought another home.

”Another buyer, an engineer, bought the damaged home without having an inspection. Nobody told him that there was a structural problem. When the buyer found out, he sued the broker, the seller, the builder, the architect, and the listing agent. He did not sue the agent who helped him buy the house. The reason is after he closed, he called the agent, and told the agent that he had just found out there were major problems with the house.

”Both the agent and the buyer recalled that the house had been marketed as “back on the market.” When the agent asked the listing agent why the home was back on the market, the listing agent said the buyer (our buyer) couldn’t qualify, and further she said some disparaging things about our agency.

"The homebuyer's agent called us and asked us why our buyer backed out of the house, and Paul told them the whole story – that it didn’t meet inspection. He asked if our buyer would be willing to share a copy of the inspection report. Our buyer, recalling how the seller had behaved over the earnest money, was only too glad to comply. He said, “Give it to them!”

"The inspection report was used in the lawsuit and it proved that the seller and the seller’s agent knew about the structural damage and failed to disclose it to their buyer. We could prove that the seller knew because the report said that it had already been repaired. The house was only two years old, so the seller had to have known. The agent was nailed for about $75,000. She appealed and settled.”

Where does the FBI come in? The next door neighbor to the hapless engineer is a retired FBI agent. When he gets wind of the trouble next door, he offers to make inquiries. He contacted a colleague who had recently purchased a home through our agency. Our client called us and we shared what we knew and he got back to the retired agent.

Vince says since then, The Buyer's Agent has been getting more business from FBI personnel wanting to buy homes with exclusive buyer’s agents.

Tom Hathaway says that's because the big issue with law enforcement clients is trust.

”It's obvious from this story that they talk among themselves, they are tightknit, and confidentiality is crucial,” he explains. “They want somebody to protect them, they are very bright and know the law, they have plenty of lawyers to consult with, they appreciate the amount of research we do (investigative work we do about the properties, neighborhood, neighbors.)

Most of all, Hathaway says, they appreciate agency.

Published: October 21, 2002

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