CHRISTOPHER COY
Confidentiality issues
A growing number of Bay State Realtors are representing homebuyers as well as sellers in real estate transactions these days, but buyer agency has especially gained popularity on Cape Cod in the last few years.
Where once there were only a handful of Realtors on the Cape providing client-level services to homebuyers, today the practice is much more common.
“There’s been a tremendous increase in the popularity of [buyer agency] and in the number of licensees practicing buyer agency,” said Leo Berard, an exclusive buyer agent on Cape Cod who was among the first Realtors to offer buyer representation in Massachusetts.
Part of the reason the practice has become more widespread is because the Cape Cod & Islands Association of Realtors has been promoting and offering educational courses on buyer agency on a regular basis for the past two years. So far, the association has had 14 Accredited Buyers Representative designation courses, and 1,110 Realtors have participated.
In fact, the Cape Realtor association has offered such a large number of ABR courses that it is being recognized by the Real Estate Buyers Agent Council, an affiliate of the National Association of Realtors with over 40,000 members.
REBAC will induct the association into its Hall of Fame at an awards reception that will take place on Nov. 6 at the NAR annual conference and exposition in Orlando, Fla. It is only the second local Realtor group in the country to be inducted into the REBAC Hall of Fame, according to Henry J. DiGiacomo, chief executive officer of the Cape Cod & Islands Association of Realtors.
‘Positive Experiences’
DiGiacomo estimates that about half to two-thirds of the 2,100 Realtors who are members of the Cape association now offer buyer agency. More Realtors have gone through the ABR courses offered by the Cape association than in California and Texas, he said.
“In the two years that we’ve been offering these classes, there has been a dramatic increase in firms and offices and agents who are offering buyer representation,” he said. “Previous to our association taking a leadership role in offering these courses, many agents were not familiar with the skills and tools necessary to represent buyers in the transaction.”
In addition to the education provided by the Cape association, changes in the real estate industry have fueled interest in buyer agency. Some larger real estate firms have adjusted their business practices by providing only client-level services to consumers.
Some have eliminated subagency, a common practice in the Bay State that allows agents other than the listing agent to represent sellers in a real estate transaction.
In March, three local firms of GMAC Real Estate– including Kinlin Grover GMAC, which operates primarily on the Cape– announced they were dropping subagency in order to offer buyer representation exclusively. Company officials said the changes would help eliminate the liability issues surrounding subagency.
Industry leaders maintain that subagency can be risky for home sellers, as well as listing agents, because they are liable for any misrepresentation a subagent from another firm makes about properties.
Decisions to back off from subagency and move toward buyer agency come at a time when agency practices in Massachusetts are evolving. This summer, the Legislature approved a proposal to clarify the types of agency relationships Realtors have with consumers. As part of the proposal, companies that want to offer subagency must have seller clients sign consent forms to allow the practice.
Consumers also are driving the changes, with more and more homebuyers seeking representation. On the Cape, particularly, a larger percentage of homebuyers come from other parts of the country searching for second homes, and some may be accustomed to having buyer representation services.
“Some of them seek services because they have had positive experiences with buyer agents in other real estate transactions in other parts of the country prior to coming to Cape Cod,” said Bob Churchill, an exclusive buyer agent who owns Buyer Brokers of Cape Cod, Churchill-Liebert in Yarmouthport.
Churchill said homebuyers are more aware that buyer representation is available and are requesting it. Prospective buyers searching for a property in an area or region with which they are not familiar may feel more comfortable working with someone who “will provide them with the information that they need to know to make informed decisions,” he said.
Even though Churchill has been an exclusive buyer agent since 1994, meaning that he does not list homes and never represents sellers in a transaction, he decided to take the ABR designation course earlier this year.
“This is a good thing for our industry because it provides real estate practitioners and consumers alike with good positive options,” he said.
Churchill’s partner, Iva Liebert, and Berard were the first real estate professionals to introduce buyer agency in the Bay State.
“There was a lot of opposition,” said Berard, who helped form the Massachusetts Association of Buyer Agents in 1991 and later became the first president of the National Association of Exclusive Buyer Agents.
Berard, who owned Buyer Brokers of Cape Cod, Berard Assoc., with his wife Anne until he transferred ownership to his niece earlier this summer, started in the real estate business by representing home sellers.
At the time, the whole industry was built around the concept that all agents worked on the sellers’ behalf and represented their interests, said Berard. But Berard felt it was “unnatural” to take friends and former business associates to see properties and not be able to counsel and advise them.
Within two years, the Berards transitioned their business and began representing homebuyers only. “We wanted to be specialists in that area … we didn’t want to represent sellers,” he said.
Unlike Berard, real estate broker Christopher Coy represents both buyers and sellers. Coy, who owns Realty Executives, a six-office firm based in Hyannis, said his company is cautious about the confidentiality and liability issues associated with representing both sellers and buyers, and requires all of the 105 agents who work at his firm to take some formal buyer agency educational courses.
As president of the Cape Cod & Islands Association of Realtors in 2002, Coy initiated the ABR course offerings because he felt there was a void in the marketplace that needed to be addressed. While real estate brokers in other states were providing buyer representation, Massachusetts was one of the last to “grab onto the notion that consumers might want representation,” he said.
After meeting Adorna Carroll, a certified instructor from Connecticut who teaches ABR courses, Coy drafted her to teach the courses to Cape Realtors.
