Does a Seller Orientated Industry Look out for the Buyer? ….YES!
In 1983, a Federal Trade Commission study revealed that over 70% of all home buyers mistakenly thought that they were represented by the agent who was showing them properties. The fact was that most agents showing properties were representing sellers and had the legal requirement to represent the best interest of their seller clients. When consumers became aware of this, they demanded their own representation, and as a result, laws requiring disclosing representation were passed all over the country.
Florida is known as a "Transaction Brokerage" state. Due to the FTC and the widespread practice of "Dual Agency", where the sellers agent would represent both the Seller and the Buyer, Conflict of Interest was a legal nightmare that more and more brokerages were having to deal with. Today's Florida Transaction broker walks a tightrope between the Buyer and the Seller. He can't provide Full Disclosure or Fiduciary Representation to either the Buyer or Seller. In fact, he doesn't represent either one. He is a "Facilitator" only. That's why they're called "Transaction Brokers" instead of Buyer Agents, Buyer Brokerages or Exclusive Buyer Agents.
Why would an agent choose to operate in this fashion.... ? He is able to collect the commission from the seller which he originally contracted for as the Listing Agent, as well as the commission the Seller would have paid the Buyers Agent to represent the Best Interest of the Buyer.
Some will argue that today, Florida Law protects the Buyer's interest from a Seller orientated Real Estate industry. However, in 2008, the state dropped the standing (FTC originated) requirement that an Agent identify whom he/she was working for or represented at the very first meeting with a new client. This law was originally written to protect buyers from agents showing properties and not disclosing they were really working for the seller.
Last month the department of Housing and Urban Development (HUD.gov) added the following statement to their “Home Buyers Handbook”,
“It is your responsibility to search for an agent who will represent your interests in the real estate transaction. If you want someone to represent only your interests, consider hiring an “exclusive buyer’s agent”, who will be working for you.”
The Bottom Line...
A Buyers Brokerage and its Exclusive Buyer Agents (EBA), provide Florida home buyers the Fiduciary Representation that Listing Brokerages simply and legally can't. EBA's never represent the seller or contract to sell property. That's why they are called Exclusive Buyer Agents..
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