An exclusive buyers agent is an agent that acts solely on behalf of buyers.
The term exclusive also encompasses the following.
1. The buying agency does not sell property.
2. The buyer works with only one buying agent exclusively.
3. The buyer does not work in competition with the Buyers Agent.
Some estate agencies have a buying division within the company. This situation can create issues if the same company represents both buyer and seller.
1. The buying agent could prioritise showing their company’s listings and not what is best for their client.
2. The agencies are often financially incentivised to keep all commissions “in house”.
3. The buyer will not receive independent objective advice.
4. They cannot negotiate the best price or terms if both buyer and seller agents are on the “same team”.
Some estate agents offer an acquisition service. This service is not the same as employing a buying agent. As the estate agent is not retained, they are not paid the by the buyer. Non retained agents can only offer property where other agents will share the commission. This agreement is known as a Split Commission or Split Comm, for short. Unlike other countries where selling fees are much higher, UK fees are on average, only 1.5 – 2.5%. As a result, many agents are reluctant to share commissions. Subsequently, the acquisition agent can only offer a small percentage of property on the market.
As the buyer pays an exclusive buyers agent, they can offer every property on and off-market. Also, estate agents do not view Exclusive Buyers Agents as rivals or competition. As a result, estate agents prefer working with buying agents.
Retaining two or more buyers agents will not increase the chances of success. Experienced and reputable buying agents will not work on this basis. There is far too much opportunity for confusion and potential dispute.
It is worth remembering the reasons for retaining an exclusive buyers agent. One of the most significant benefits is that the agents and sellers know you are serious. If an agent or contact discovers the buyer has retained two buying agents, they will not take the buyer seriously.
The property industry is a close-knit community, and everyone will find out. Buying agents regularly share information on what they are looking for to source off-market instructions. All though very discreet, they will often outline the requirement and the profile of the buyer. All three parties would instantly lose all credibility with the agents and various channels. Once credibility is lost, the agent will not take any party in earnest.
Retaining two buyers agents will not create competition and get them working harder. The reality is that only desperate or inexperienced buying agents would work non-exclusively. If they did agree to work in this way, both would probably do very little at all. No one will invest too much time into the search if there is a chance they would not get paid. They would essentially just take the retainer/registration fee and not bother looking for a property.
Most buying agents will not enter into a situation where they are competing against their client. Buyers only request non-exclusivity if they do not fully understand how the industry works. This confusion is usually down to an inexperienced buying agent, not communicating the process and benefits.
The first question any buying agent or estate agent would ask is;
Why would a serious buyer retain a buying agent and then continue to search themselves?
The moment there is an element of doubt, the buyer will lose all credibility. The best Exclusive Buyers Agents are busy and will not waste their time if something does not seem right.
One of the crucial roles of a buying agent is to position their client as the preferred buyer. If the buying agent and client are not working together, this will be evident. If an agent or seller suspects something is not right, both buying agent and client will lose all credibility. It does not portray the buyer positively if they are not upfront with their buying agent.
One of the main reasons a buying agent does not compete with clients is to avoid confusion or potential misunderstandings. The process can be very involved; buying agents often speak with over one hundred estate agents during a single search. The opportunity to duplicate calls and viewings is far too great. Again, both parties would instantly lose all credibility, even if it was accidental.
Reputable buying agents will not search for an off-market property while the buyer looks at the open market. There is far too much opportunity for confusion. They will primarily be speaking with the same agents. The buyer and buying agent could end up talking with two different negotiators in the same estate agency.
One of the primary reasons for using a buying agent is to save time. Why would a motivated buyer retain a buying agent and then continue to search themselves?
It is not a good start to a working relationship to know there is potential to work for free. Due to the possible complications and confusion, the terms of business would have to be extremely thorough. Anyone prepared to go to these lengths to avoid payment is probably not the type of person anyone would want to work with. The best Exclusive Buyers Agents only work with a handful of clients at one time. As a result, they are usually oversubscribed and can choose with whom they work.
Working together always achieves the best results. There may be occasions where the client sees something not highlighted by their buying agent. This irregularity could be for any one of the following reasons.
1. The price, size, location, for example, could be slightly different from the brief given to the buying agent.
2. Good buying agents receive hundreds of emails a day. The property may already be on the list ready to send to the client or added to the system.
3. The client may have changed their mind about criteria not considered or refused before.
In these situations, the buyer would usually just let them know. The buying agent can then take over the evaluation and previewing process. After all, finding property from the internet, for example, is only a small part of the process. It is also the due diligence, negotiation and conveyancing where the skill, knowledge and experience are required.
The service is as much about impartial advice, market knowledge and experience, as it is about saving the client’s time. The buying agent could keep finding unnecessary fault with any property if they did not shortlist it.
If you have further questions or would like more information on the many benefits of using an Exclusive Buyers Agent, please contact us below.