Twenty-four hours before she was to close escrow on a $135,000 condo in Santa Monica, Tracey Tapp broke into tears and fired her real estate agent.
The first-time home buyer was being pressured to close the deal even though her agent had been avoiding her persistent questions about the condo's aging roof, a defective heating system and Santa Monica's rent-control policies.
"I went to the agent one evening after work, and she handed me a three-inch stack of papers," Tapp, 32, recalled. "She said, 'You need to have these back to me tomorrow.' But the straw that broke the camel's back was when she still didn't have the answers to my questions. Instead, she said, 'Oh, let me write those down.' I lost it and started crying in her office. I was just so frustrated and so overwhelmed."
When her agent told her she was being too compulsive and expecting too much, Tapp walked out.
It wasn't until she called David Feigin of the firm Buyer's Agent of Ojai that she learned one possible reason her agent had been so elusive and so eager to close the deal. Feigin is an "exclusive buyer's broker," one of a small number of real estate agents in the state who represent only buyers and who do not list homes for sale.
Feigin explained to Tapp that because her former agent worked for the same company as the seller's agent, she was working as a "dual agent" and therefore obligated by law to represent the seller's interests.
"[Buyers] often think their agent is working for them," said Stephen Brobeck, executive director of Consumer Federation of America in Washington, which represents more than 200 consumer groups and advocates buyer agency. "They disclose to their agent what they are willing to spend on the house and their income--information which, if passed on to the seller, would greatly disadvantage the buyer."
Although most traditional agents say they try hard not to violate buyers' confidences, they see their role as bringing the two sides together, and they admit that sensitive information occasionally gets passed along. Experts advise both buyers and sellers not to tell their agents anything they do not want the other party to know.
In California, agents are allowed to be dual agents, representing both buyer and seller. They must disclose that information in writing to their clients as soon as possible before or at the same time as the buyer's offer to purchase, said Steve Sokol, an attorney for the California Assn. of Realtors, which sponsored state legislation to pass disclosure laws in the late 1980s.
The problem, say exclusive buyer's agents, is that the agent can wait until the buyer makes an offer on a house before disclosing who he or she represents. By then, the buyer often has fallen in love with the home and won't want to sever ties with the agent, he said.
"It's the most misconceived concept I've ever seen in the consumer world, especially since it's the largest purchase a consumer usually will ever make," said Steve Alexander, president and co-founder of the California Assn. of Buyer's Agents, a San Diego-based group that promotes consumer awareness of buyer representation. "If you were going through a lawsuit, you would never have a plaintiff and a defendant represented by the same attorney."
Agents who work for a traditional real estate agency and offer to represent the buyer exclusively can remain exclusive until they show the prospective buyer a home listed by their agency. That's when it gets tricky, said Pam Luckey, a traditional agent with Prudential California in Long Beach.
"It's wearing two different hats," said Luckey. "It's very difficult, but it can be done as long as you're being truthful and honest and representing both sides to the best of your ability."
But some consumers say they're not comfortable with the arrangement. "I just feel there's an agenda there somehow," said Lynne Yadlin, who used exclusive buyer's agents to purchase homes in New Hampshire and Irvine. "They're probably going to steer you toward their own listings or toward their company's listings."
When disclosure laws took effect in 1988, exclusive buyer agents became more common, increasing to an estimated 600 in California (there are no formal statistics) and about 3,000 nationwide. In the consumer-oriented '90s, the concept is slowly catching on, especially among educated and research-conscious buyers.
"It sure is the wave of the future," Luckey said. "We're seeing more and more of it. You find buyers who know more than we do. They're concerned about making a bad investment, how their property values have gone down."
Hiring an exclusive buyer's agent shouldn't cost any more than hiring a traditional agent, Brobeck said. Most are paid according to the normal commission structure, getting half the commission offered by the seller (usually 6% of the home's selling price). Others charge a flat fee or hourly rate or work on retainer.