The term exclusive buyer agency was defined many years ago by both the major association of real estate agents and The National Association of Exclusive Buyer Agents. The definition was the same: “The practice of representing only buyers and never sellers in a transaction. The company never lists a seller’s property and thus never has a seller as a client.”

This is also the definition used by the news media in articles written for the benefit of home buyers who are looking for advice in preparation for the purchase of real estate.

But, there is an underlying issue bubbling up for home buyers:

Buyer agency and its variations have become very common since it was introduced to consumers over twenty years ago.

But home buyers should also be aware of the important differences between the different ways that the term exclusive buyer’s agency is used by real estate agents in Michigan before they select an agent to represent them on their next home purchase.

Exclusive buyer agency offices have usually signed contracts with home buyers to represent them and to be assured of compensation for the services rendered. The brokerage is usually paid out of the seller’s proceeds so it doesn’t cost the buyer any more than if they had used a regular real estate agent. The obligation for the buyer to make sure the brokerage gets paid has been termed an “exclusive right to buy” clause. The mirror image on the listing side is often termed an “exclusive right to sell”.

Once traditional real estate companies started promoting buyer agency and the resulting dual agency, they also incorporated these exclusive right to buy clauses and signed contracts with home buyers for representation.

However, since the term “exclusive buyer agency” is not defined by law in Michigan, some real estate groups decided to take advantage of consumers and call these exclusive right to buy agreements by the label “exclusive buyer agency”.

In Michigan some agents from traditional real estate companies claim they are an exclusive buyer agent. Since many books and articles written by consumer advocates recommend exclusive buyer agency, these traditional real estate agents feel they can capture some of that business by misusing the term.

Remember, the business relationship you have with a real estate professional is determined by the brokerage they work for. And exclusive buyer agency means the brokerage works only for buyers.

Here is an easy check: If a real estate firm has listings, it is not an exclusive buyer agency.

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