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Exclusive Representation FOR BUYERS ONLY with over three decades of Martha's Vineyard Real Estate knowledge and experience.

What is a Buyer's Agent?
... and do you want just a Buyer's Agent or Representation with more Security?

Agency is all the buzz these days on Martha's Vineyard. For years, the consumer has been lead to believe "My realtor is my best friend". I feel this statement has been rather misleading. For one thing the term REALTOR® applies to a designation given to a real estate professional who agrees to adhere to a strict Code of Ethics. Many times consumers have purchased property on Martha's Vineyard only to learn after the fact that they did not get the best deal. This is because prior to mandatory disclosure in Massachusetts the agent working with the buyer was the seller's fiduciary; they did not represent the buyer.

In an attempt to correct this misconception, the National Association of Realtors® (NAR) and the Massachusetts Board of Registration of Real Estate Brokers and Salespersons set out in the mid-80's to correct this misconception and in 1990 implemented the Mandatory Agency Disclosure - Agency Relationship Form-705 with the hope that there would no longer be any misunderstanding.

When you select a real estate agent to work with, at the first physical meeting to discuss or preview a specific property, the agent you select is required by law to inform you that he or she is either a Seller's Agent, a Buyer's Agent (who could also work as a Disclosed Dual Agent) or a Facilitator. What does all this mean to the buyer of Martha's Vineyard real estate?

Let us break it down:

SELLER'S AGENT: When a seller engages the services of a listing agent, the seller becomes the agent's client. This means the agent, and his/her subagents represent the seller. They owe the seller undivided loyalty, utmost care, disclosure, obedience to lawful instruction, confidentiality and accountability. They must put the seller's interest first and negotiate for the best price for their client, the seller. (The seller may also authorize subagents to represent him/her in marketing the property to the buyers.)

Don't you want the same kind of representation as a Martha's Vineyard real estate buyer? Well, you can have it --- or can you?

BUYER'S AGENT: When a buyer engages the services of a real estate agent, in theory, the buyer becomes that agent's client. This means that agent represents the buyer. The agent owes the buyer undivided loyalty, utmost care, disclosure, obedience to lawful instruction, confidentiality and accountability. The agent must put the buyer's interest first and negotiate for the best price and terms for his/her client, the buyer. (The buyer may authorize subagents to represent him/her in locating property.) However, unless there is a written contractual agreement between the buyer and the real estate agent the way there is between a seller and their listing agent, how sincere can this relationship be? Remember, the Mandatory Agency Disclosure is not a contract.

Now we come to what I consider a curious form of representation and one that implies no representation at all and minimal assistance --- not a good idea in a complicated and diverse market like Martha's Vineyard.

DISCLOSED DUAL AGENT: A real estate agent can work for both the buyer and the seller on the same property provided such agent obtains the informed consent of both parties. The agent is then considered a disclosed dual agent. The agent owes the seller and the buyer a duty to deal with them fairly and honestly. In this type of agency relationship the real estate agent does not represent either the seller or buyer and they cannot expect the agent's undivided loyalty. Also, undisclosed dual agency is illegal.

The agent may know personal information about both the buyer and the seller, but as a disclosed dual agent is bound not to reveal that information to either party. I think that's a difficult line to follow and creates a serious conflict of interest. The dual agent cannot provide undivided loyalty to both clients. The duty of confidentiality to one compromises the duty of full disclosure to the other. It is very important that you to have a good understanding of the (Disclosed) Dual Agency relationship, so I suggest you read a little more to learn about Avoiding Dual Agency.

Talk about not having representation; a facilitator is an agent that represents no one. The buyer is in essentially a customer and in many cases the agent does not represent the seller either.

FACILITATOR: When a real estate agent works as a facilitator, the agent agrees to assist both the buyer and seller, but the agent represents neither the buyer nor the seller in the transaction. The facilitator and the broker with whom the facilitator is affiliated owe the buyer and the seller a duty to present each property honestly and accurately by disclosing known material defects about the property and the duty of accountability for funds. The facilitator has no duty to keep information received from a buyer or the seller confidential. The role of facilitator applies only to the buyer and seller within the specific property transaction involving that buyer and seller. Should the buyer and seller agree, a facilitator relationship can transition to become an exclusive agency relationship with either the buyer or the seller.

If you're not totally confused by now, let's see how you feel about Designated Agency:

DESIGNATED AGENCY: This is a brokerage practice used when the brokerage is representing both the buyer and the seller. NAR has recommended designated representation since 1992 as an alternative to dual agency. Designated representation, sometimes called "designated agency" or "appointed agency," enables a managing broker to designate, or appoint, a buyer's representative and a seller's representative within the same company to work on the same transaction. The managing broker is like the line coach who holds the playbooks for both teams --- they can control the game. The broker has the responsibility of supervising both licensees, but the designated agents are expected to give their respective clients full representation. The hope and purpose for this type of agency is that it would avoid the problems of Dual Agency. (Are there problems with dual agency? Hmmm.) However, the idea that a brokerage can transfer the agency relationships created by the contractual representation agreements it has with consumers to licensees, who are agents of the brokerage and not the consumer, just doesn't make sense to me, and I don't think it will hold up in court. Some critics say designated agency tries to reduce the agent's liability by reducing service to the consumer, but designated representation doesn't alter a managing broker's responsibility for the licensees or the transaction. I think that Designated agency is merely a disguise for undisclosed dual agency. It is a deceptive practice very similar to the conflicts of interest and self-dealing recently exposed in the investment-banking and insurance-brokerage sectors. I don't know of one Martha's Vineyard real estate agency that practices designated agency, because they realize how prickly this kind of representation can be. The only hope for this practice to be successful is in a really big real estate agency with dozens of agents.

So, if designated agency is too prickly, why then are brokers willing to practice dual agency? We've already said they're pretty much the same thing. The answer is because they have no choice under today's new agency law. Under all the confusing labels, what has really changed? The only real change is that we now have 100% Exclusive Buyer Representation, and you are also starting to see 100% Exclusive Seller Representation. Now, that makes real sense because each team will have their own locker room and coach.

In a recent independent survey conducted by Harris Interactive, fifty-two percent of the nation wide respondents said that a dual agent, who is an agent that represents both the buyer and seller in the same real estate transaction, "cannot effectively represent (the) financial interests of buyers and sellers."

Even though the consumer should now have a clear understanding as to the different types of agency, and is able to request and get representation from the agent they select, do all buyer's agents offer the same level of service? The answer is, "No they cannot". Only with an EXCLUSIVE Buyer's Agent can you be assured that your relationship will remain intact throughout the Martha's Vineyard real estate buying process.

What is an EXCLUSIVE Buyer's Agent?

Exclusive Buyer Representation is a partnership in every sense of the word. The goal of the exclusive buyer's agent must be the same as the buyer's goal --- find the best property at the best possible terms and advantage. The exclusive buyer's agent must assist the buyer in each and every aspect of purchasing a property from start to finish. The first step in beginning a relationship is for a prospective buyer to sit down with an exclusive buyer's agent and outline in detail exactly what their goal is. In this way, the exclusive buyer's agent can assess whether or not the buyer's objectives are realistic and if the exclusive buyer's agent has the ability to accomplish those objectives.

Any and all information that is disclosed to an exclusive buyer's agent must always be kept in the strictest confidence, unlike when a buyer is working with a seller's agent where all information is fair game and will be relayed to the seller. Not only are objectives discussed but also the compensation and contractual policy of the firm. The responsibilities of both the buyer and the exclusive buyer's agent are discussed and how the entire search process works. At the end of the meeting, a decision can be made whether the relationship should be consummated via a simple Exclusive Buyer Representation Agreement. By signing the Exclusive Buyer Representation Agreement, the buyer is now the firm's client to whom the exclusive buyer's agent owes complete fiduciary duties as outlined in the agreement. This is not unlike the Exclusive Listing Agreement that a seller signs with their listing agent.

As an Exclusive Buyer Agency, SplitRock Real Estate searches the complete Multiple Listing Service (MLS) inventory of Martha's Vineyard real estate available on the market, including For Sale by Owners (FSBOs) and properties that are not on the market. At SplitRock Real Estate, we cover the entire Island or Martha's Vineyard and work comfortably with all traditional Martha's Vineyard real estate agencies. We have absolutely no allegiance to any seller, serving only one master --- the buyer.
Our task is to find the property that best suits the wants and needs of our buyer clients at the best possible terms and advantage. It doesn't matter how long that process takes --- 1 month, 6 months, 3 years. We will represent you 100% until your goal is achieved.

When a property is found that best matches the buyer's criteria, the next step is to research everything possible about the property that may affect the buyer's enjoyment of that property. We investigate the seller's situation, town restrictions, neighborhood idiosyncrasies, and any concerns the buyer may have. Research is done at the Dukes County Registry of Deeds, the town hall, and when possible, information from residents in the neighborhood is solicited to uncover any problem areas. All the compiled data is studied in order to give a clearer picture of the property being considered. If the information gathered proves favorable, a sales evaluation is made of comparable properties in the area. The buyer can now make a reasonably informed decision on whether or not to pursue the property.

We counsel the buyer on what they can expect during the negotiation process in terms of price, and if the buyer wishes to continue, an Offer To Purchase strategy is formulated and an Offer To Purchase is presented to the seller. As an Exclusive Buyer's Agent, our intent at SplitRock Real Estate is to create the best possible advantage for the buyer prior to creation of the Purchase And Sale Agreement by getting as many contingencies, terms and conditions beneficial to the buyer agreed upon during the Offer To Purchase phase of negotiations. In this way, we are able to minimize any expenditure for inspections and possibly legal fees. This process deserves explanation because Massachusetts has a two-step process; first, an Offer To Purchase Agreement and then a Purchase and Sale Agreement. Both are legal contracts binding both parties; however, the Offer To Purchase is intended to outline and memorialize the major items of importance and is then superseded by the Purchase and Sale Agreement, cementing all the details of the previous agreement along with any other items that may arise that the buyer or seller wish to solidify.

The partnership between the buyer and the Exclusive Buyer's Agent serves to make the buyer well informed and empower their Martha's Vineyard real estate decision-making. As a result, they become comfortable with any decision they make, even if they decide not to buy. We recognize that this is probably the largest investment decision you will make and we do not take our responsibility lightly. As the #1 Exclusive Buyer Agency on Martha's Vineyard, SplitRock Real Estate offers complete client level services and is your partner and ally all the way .

After the seller accepts an Offer To Purchase we enter the next phase of the purchase process. We recommend the professional services necessary to conduct all the various inspections that may be necessary as well as any other contingencies that the buyer may face. As your exclusive buyer's agent, we will help you to interpret the details of the inspections and counsel you on those items that require attention. We will advocate on your behalf to the seller those items found defective that we feel are the responsibility of the seller to repair or replace. Subsequently, credits or price reductions are negotiated or we may elect to terminate the contract with no harm to either party.

Buyers want to know how an Exclusive Buyer's Agent is compensated for the purchase of Martha's Vineyard real estate. In my opinion, this is the classic chicken and egg debate. It is understood that the seller pays the commission and the simple answer is yes, that is true. In most cases, we accept the compensation offered by the seller. Therefore, it costs you nothing extra for the client level service you receive from an Exclusive Buyer's Agent--- but who brings the bag of money to the closing table? The buyer. In essence, real estate broker commissions are just one of the many closing costs associated with purchasing property.

Please feel free to ask any and all questions during the initial consultation session with an Exclusive Buyer's Agent. At SplitRock Real Estate, we do not sell, we service. We are focused on being your partner in realizing your dream of owning real estate on Martha's Vineyard. Our exclusive goal is to make this the best real estate experience you have ever had.

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