Table of Contents
Latest posts by Larry Rothman (see all)
- Co-op Rejection – Is Your Co-op Illiquid? - May 16, 2018
- Questions to Ask Property Management before Buying a Condo or Co-op - May 10, 2018
- Negotiating Issues After A Home Inspection - April 28, 2018
Real estate brokers and agents have seen their reputation tarnished, particularly in the last several years, spanning from the start of the recession. Working on commission, the rogue agents, have been known to go to desperate lengths to close a deal, including pushing buyers into inappropriate homes at prices they cannot afford and repairs they weren’t expecting.
However, it does not have to be that way. The National Association of Exclusive Buyers Agents (NAEBA) is a professional organization of real estate agents and brokers. If you are searching for a home in the US, a buyer’s agent might be right for you. It is worth exploring the NAEBA in further detail.
Image by Son of Groucho / Flickr
What is the NAEBA?
Members of the NAEBA exclusively represent buyers, unlike the traditional real estate brokerage that stand for the seller’s interest. This means there is a fiduciary duty owed to the buyers, including loyalty, obedience, confidentiality, accounting, reasonable care and skill, and disclosure. These agents must disclose information to the home buyer; that materially affects the buyer’s interest. This is in contrast to a traditional agent, who owes his fiduciary duty to the seller, and cannot reveal anything that would be detrimental to him.
Turning this relationship on its head can be an enormous help to the buyer. For instance, the exclusive buyer’s agent can advise you on how much the property is worth, not just by sharing comparable sales data, but any information that would influence the price to your advantage. For instance, if there is a divorce situation or a pending foreclosure, the buyer’s agent would be required to inform you. The buyer’s agent also negotiates on your behalf, seeking the best price for you while also protecting you by potentially putting in contingencies.
Why it might be for you
NAEBA founded in the 1990s with the idea that there was a better way for the real estate industry to conduct its business. The previous creation of a dual agency structure appeared to be a positive step, allowing agents to collect commissions from buying and selling transactions. However, there was still an incentive for the agent to try to obtain the highest price for the seller, meaning there is still a need for an exclusive buyers agent.
The NAEBA, with its standards and ethics, created a fiduciary duty to the buyer, a set of legal obligations and standard of care that must be followed.
You will only conduct a couple of real estate transactions in your lifetime unless you are a professional real estate investor. The real estate agent will almost certainly know a great deal more about the process, how to get the best price and help you evaluate the condition of the home. Many complexities can get you hooked into a lousy deal. If you are in the market to buy a house, having a buyer’s agent that is legally bound to protect your interests is an excellent place to start.