The View From Off Shore
By Roy Flanders ©Banker & Tradesman 2/9/94
They asked that I do a piece from my perspective here on Nantucket Island...(Uhhm.)
Here's what doesn't happen: "Honey, it's time for us to find the house of our dreams; what we need is a good fiduciary."
If all a buyer wanted was a person he could trust, he'd ask his mother. He comes to a real estate broker for help because all brokers provide at least two things most buyers need: access and expertise.
A growing number of sophisticated buyers are coming to a buyer's broker because they understand the value of having those needs met within a legal relationship of total trust.
Trust is what a fiduciary is all about, and it is in the almost transforming context of this new relationship that buyers and brokers are setting off on a very productive and exciting adventure.
But if the Buyer Broker is ever to make the final passage from the island of small but growing "alternative," over to the mainland of legitimate broker of choice for homebuyers, we'd best not loose sight of the basics of what consumers are looking for, and how they must figure in to our successful crossing. (And that's it for the "Nantucket" touch)
A buyer looks to a broker for access to any and all information that has to do with his real estate needs.
Of course, the primary thing he wants access to is the housing inventory available to him.
For the time being at least, Realtors still effectively control the access to the majority of inventory on the market. Growing consumer awareness along with tremendous new technological possibilites has many in the industry scrambling.
The buyer broker provides a buyer client direct, efficient and truly complete access to all property on the market.
The buyer can rely on a buyer broker for assurance that he has indeed seen everything that he might want to consider. And although the appeal of a home is subjective, its value to a buyer is derived only in relation to, and as a function of, the rest of the market. Since an exclusive buyer broker is not trying to sell any particular listings, there shouldn't be the nagging doubts as to a double agenda. The buyer can make choices with more confidence.
The buyer can look to a buyer agent for access to the tools and resources necessary for a successful transaction from property search to closing (and usually beyond). Inspectors, environmental experts, financing options and sources, tax experts, legal and professional referrals: since the buyer's agent is quarterbacking the buyer's team he can- indeed, he must- point out to his client when outside experts are needed and recommend those in whom he has confidence.
Perhaps most importantly, a buyer needs access to his agent, and as a client, he's entitled to that agent's attention and responsiveness.
Any good broker must simply know a lot about a lot of things; he is expected to be an expert in real estate and all that goes with it: the local real estate market, construction, real estate law, financing, zoning, taxes, town services, and so on. And he's the one who should know how to put all the pieces in the deal together.
No two homes are the same; and the same goes for brokers. A buyer can just drive on by a home which doesn't fit his needs; it's not that easy with a broker, especially when a buyer ends up stuck working with a broker who either has the listing for, or just happens to point out at 35 mph, the house of the buyer's dreams.
The buyer can, and certainly should, choose his agent independently of property considerations. A prospective buyer should evaluate each buyer broker on the areas of his expertise, talk to current or former clients, weigh intelligence heavily and, very importantly, look for a good "chemistry" between them.
The fact that a broker has a fiduciary relationship with the buyer doesn't make him a better broker if he isn't very good to begin with. But a talented broker, working within a legal relationship of trust, can use all his expertise and skills in the full service of his client. It's a very powerful combination, one that, until the recent movement toward buyer representation, has been, in effect, denied residential buyers AND brokers. For, let's not be shy about this, a good part of the momentum towards buyer agency has come from within the traditional real estate community.
There are plenty of us who just never felt right about how the whole subagency thing works; wanting to do the best job for the buyer we were working with, but when it came down to the areas he needed our help most- advice and assistance in negotiating- we couldn't, or shouldn't, be able to come to his aid.
Once it is clear that this launch of ours is well stocked and out away from the rocks, there will be many more weary, but still well fed, "refugees" waiting to jump on board.
When a buyer client hires his own agent, he is acknowledging that the agent possesses special skills, knowledge, and expertise which are superior to his own, and rather than contend with them (as a customer), he chooses to have them on his side, working for him ( as a client). So they make a deal: the client puts himself in the agent's hands for safekeeping, in return for that trust, the agent puts his clients's interests above all others, including his own. And these fiduciary responsibilities are in addition to whatever other duties the agent owes that buyer; they wrap around everything that happens in their professional relationship.
This is a mighty responsibility, so an agent should choose his clients wisely. The agent who possesses the proper professionial gifts can provide his client with powerful results and benefits which might never occur outside the matrix of this special relationship.
The buyer now has the benefit of the help he needs most, yet is not legally entitled to under the traditional marketing system: Total and unbiased access to the entire market; Expert advice and counsel (not just information and marketing assistance); Guidance and advocacy throughout the negotiating process.
A New Perspective
I like what Fred Barry said to a group of us a few weeks back, "The battle is over, and guess what? We've won." He was speaking on future trends affecting buyer agency, and his reference was to the enormous accomplishments thus far. What a exciting year it's been.
It's time for us stop concentrating on each hurtle of "acceptance" for buyer agency, not that we've seen the last of them, but we might perhaps lift our vision to take in what lies beyond, and in the process offer it as a Vision of what is possible now. To fool with Fred's metaphor a bit more, we can't let ourselves remain trapped in the trenches of a battle which we may have already won. Sure there is still resistance and a few guerillas out there snipping from the hills, but there's work to be done.
Let's not remain victim to having to define our Vision with a language which keeps us just poor relations to an archaic order. We should no longer be confined by the very reference points (traditional broker, agent, subagent) whose shortcomings and inequities brought about the necessity of our emergence in the first place.
I think we must- individually and as a trade association- figure out what business we're really in.
Speaking for myself, I know I'm not in the marketing of real estate; what I am marketing are professional service and skills- my talent. And I'm not a "consumer advocate." Sure, I like consumers, I'm sure they're very nice people, but I work for my clients, I'm a Client Advocate, and if I do my job well, it's my clients' fees which make me a living.
I don't mean that to sound flip, as buyer brokers we're now in a position to bring incredible benefits to a lot of people; I think we have to be clear about what we do.
It's a truly creative thing we do, creating physical answers to needs which are part physical, part financial, part emotional, and part spiritual. We start from what there is but a yearning for, and we find it, we discover it.
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Roy Flanders is the owner of Pro Buyer Associates on Nantucket Island, and a consultant on Internet strategies. He can be reached at: email@example.com, (508) 228-7500, http://probuyer.com