Is Florida.. Looking out for Home Buyers

Looking out for the Buyers

In 1983, a Federal Trade Commission study revealed that over 72% of all home buyers mistakenly believed that they were represented by the agent who was showing them homes. The fact was that most agents showing homes were representing sellers. And by the legal requirements of "agency representation", a Real Estate agent must negotiate in the best interest of their client. This requires not withholding any information from them (possibly meaning they would reveal such important information as buyer's motivation, financial qualification etc.) and presenting their property in most favorable way. When consumers became aware of this, they demanded their own representation. Consequently, laws requiring disclosing representation were passed all over the country... Enter the "exclusive buyer agent", an agent that does not have a conflict of interest since he/she only represents the buyer in a transaction. An Exclusive buyer agent works in the Buyer's best interest getting back to the legal definition of "Agency Representation".

Florida’s Dual Agency Solution ?

Florida is now a "Transaction Brokerage" state. Due to the FTC finding and the widespread practice of "Dual Agency", where the seller’s agent would represent both the Seller and the Buyer… "Conflict of Interest" was a legal problem that more and more brokerages had to deal with. Todays Transaction Brokers must walk a tightrope between the Buyer and the Seller. The Transaction Broker can't provide Full Disclosure or Fiduciary Representation to either the Buyer or Seller (some would call this leveling the field). In fact, They can't represent either one. They are simply "Facilitators". This is why they are called "Transaction Brokers". Why would an agent choose to do this.... ? Because, he/she is able to collect both commissions, the same as if he/she were Dual agents..

About Face….

Some have argued that today, Florida Law protects the Buyer's interest from a Seller orientated Real Estate industry and Dual agency. However, in 2008 the state of Florida DROPPED the long standing requirement that a Real Estate Agent must identify who he/she was working for or representing at the very first meeting with a new client. This law was originally written to protect buyers from agents not disclosing they were really working for the seller. Since then there has been a rush to "Buyer Brokerages" and the "Exclusive Buyer Agent".

The Informed Home Buyer

In December of 2009, 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."