Today’s Home Buyer may hire a Buyer’s Broker to represent them
(the scale is balanced as each side has representation)
The National Association of Exclusive Buyer Agents Standards of Practice
The National Association of Exclusive Buyer Agents (referred to asMembers) is an independent alliance of real estate professionals who provide full fiduciary client-level services to Buyers and only represent Buyer-Clients exclusively. NAEBA members do not accept seller property listings or represent sellers in any capacity and therefore will never be a dual or designated agent representing both Buyer and seller in a transaction. We set forth the following NAEBA Standards of Practice which will guide us in serving our Buyer-Clients and requires that we operate according to these fundamental commitments. The essence of Exclusive Buyer Agency is undivided loyalty to our Buyer-Clients and we recognize that it is our duty to serve our Buyer-Clients with full fidelity and provide equal service to all Buyer-Clients.
A. SERVICES PROVIDED IN THE INITIAL COUNSELING PHASE
Standard A (1): A NAEBA member will disclose they are an Exclusive Buyer’s Agent and define their Exclusive Buyer’s Agency relationship to a prospective Buyer. They will explain how different agency relationships may affect the level and type of service a Buyer may receive from a real estate agent. When representing a Buyer-Client a NAEBA Member owes the full fiduciary duties of loyalty, advocacy, obedience, confidentiality, accounting, reasonable skill and care, and full disclosure in the performance these duties. We are required to act solely on behalf of the Buyer-Client’s interest to seek the best price and terms and have a duty to disclose all material information we obtain from the seller or other sources.
Standard A (2): Before entering into an agreement with a Buyer a Member will determine if any conflict of interest may exist on their part or that of the Buyer. If a conflict should occur an Exclusive Buyer Agent should be precluded from representing a Buyer who should have the option of seeking exclusive representation elsewhere. Members must disclose a present or contemplated interest in any property to the Buyer-Client.
Standard A (3): A Member will present a written Exclusive Buyer Agent agreement or pledge of service with their buyer client. The agreement will include beginning and ending dates, the service fee structure and payment method, and the responsibilities of both parties. As Exclusive Buyer’s Agents we will negotiate and seek our compensation from the seller or builder on the Buyers behalf as a seller paid fee, however we still represent only the Buyer-Client. In rare cases the Buyer-Client may desire to compensate the Member directly pursuant to a written Exclusive Buyer Agency Agreement. Although the seller may pay this fee on behalf of the Buyer-Client the payment of any fee by the seller or seller’s broker shall not in any way make the Member the agent or subagent of the seller. Any “side deals” without the Buyer-Client’s informed consent and approval is prohibited.
Standard A (4): A Member will make themselves available to his/her Buyer-Client in a timely manner.
Standard A (5): A Member will pledge absolute confidentiality to a Buyer-Client when representing them thereby protecting that Buyer-Client’s ability to negotiate all aspects of the transaction.
Standard A (6): A Member will counsel a Buyer-Client regarding their financial qualifications and will assist that Buyer-Client in seeking and working with mortgage lenders. A Member will not steer their Buyer-Client to any one lender but instead will assist them in evaluating financing options, interest rates and closing costs.
B. SERVICES PROVIDED IN THE GENERAL PROPERTY SEARCH PHASE
Standard B(1): A Member will discuss objectives and preferences in property styles, age, floor plans, and so forth with a Buyer-Client then develop from this information a property profile for them.
Standard B (2): Based upon the property profile, a Member and their Buyer-Client will determine the appropriate level of property preview services to be provided.
Standard B (3): With a Buyer-Client’s property profile in mind, a Member will search the real estate market, including properties that are for sale by owners and builders, to locate properties to show the Buyer-Client.
C. SERVICES PROVIDED IN THE PROPERTY SELECTION/CONTRACT OFFER PHASE
Standard C (1): A Member will discuss and evaluate the properties viewed with their Buyer-Client comparing each property shown with the property profile.
Standard C (2): Before preparing an offer to purchase, a Member will inform a Buyer-Client about any defects or problems they have observed or in any way discovered regarding the property.
Standard C (3): Before preparing a contract offer on behalf of his/her Buyer-Client, a Member will prepare a comparative market analysis, including explanations and documentation, to determine the property’s market value. A Member will not prepare an offer to purchase a property they have not seen and must avoid exaggeration, misrepresentation or concealment of pertinent facts.
Standard C (4): Before a Buyer-Client signs an offer to purchase a Member will provide that Buyer-Client with an estimate of closing costs and, whenever possible, with the truth-in-lending estimate provided by the mortgage lender.
Standard C (5): A Member will counsel their Buyer-Client and explain the choices available in completing a real estate contract. This real estate counseling is based upon a Members experience in negotiation and real estate business decisions and is not legal advice. Legal matters should be identified and a Buyer-Client advised to seek representation by an Attorney At Law competent in real estate for legal questions, advice and counsel. Members shall not engage in the unauthorized practice of law.
Standard C (6): Whenever possible, a Member will prepare the purchase offer on a form which has been designed to protect a Buyer-Client’s interest. A Member will provide proper disclosures regarding agency representation and other matters as required by law. A Member will not reveal facts that are confidential under the scope of the Exclusive Buyer Agency relationship.
Standard C (7): A Member will develop negotiation strategies with their Buyer-Client establishing pre-set limits on key points of negotiation when that Buyer-Client wishes to do so. A Member will actively negotiate only on behalf of their Buyer-Client.
Standard C (8): Before submitting a purchase offer to a Seller, a Member will counsel their Buyer-Client regarding the time requirements specified in the purchase offer and will encourage that Buyer-Client to have professional inspections completed if the purchase offer is accepted.
D. SERVICES PROVIDED IN THE ESCROW-TO-CLOSING PHASE
Standard D (1): A Member will counsel a Buyer-Client regarding the types of home inspectors, the suggested criteria for selecting home inspectors, and the comparative costs of inspection services. A Buyer-Client will select the inspectors and Members will encourage their Buyer-Client to be present during the inspections.
Standard D (2): A Member will notify a Seller or a Seller’s Agent in writing of the inspectors’ findings and of corrections/repairs requested by a Buyer-Client. A Member will specify a Buyer- Client’s desire to proceed or cancel the purchase contract whenever such notification is required.
Standard D (3): A Member will maintain contact with the title company and mortgage lender to make sure that their Buyer-Client’s interests are being protected.
Standard D (4): A Member will review a settlement statement with his/her Buyer-Client at or before closing if possible.
Standard D (5): A Member will accompany a Buyer-Client on a property walk-through before closing.
Standard D (6): A Member will attend the closing with a Buyer-Client. A Member should be prepared to support their Buyer-Client’s position at closing.
Standard D (7): A Member assure, whenever possible, that transactional details are in writing and will keep records for a reasonable period of time and will provide copies of this information to a Buyer-Client on request. All information obtained during the term of this Exclusive Buyer’s Agency Agreement will remain confidential at all times.
SERVICES PROVIDED OVERALL
Standard E (1): Buyer-Client understands that the Member may be working with more than one buyer at any given time. Nothing shall prohibit the Member before, during or after from representing other Buyers. However it would be a conflict of interest for the Member to represent more than one Buyer-Client at the same time on a specific property. Otherwise they would be involved in setting negotiation strategies, pricing and terms for two Buyer-Clients at the same time on the same property, pitting one against the other. Therefore, the Member will negotiate a purchase offer to a conclusion on behalf of the first Buyer-Client who submits an offer on such property. The Member shall preserve any confidential information disclosed by any Buyer-Client and shall not disclose the existence or terms of any offer prepared on behalf of one Buyer-Client to another unless permitted by the Buyer, including but not limited to terms, financial information, qualifications, names, etc. Should this situation arise and be unacceptable the Buyer-Client may cancel this agreement in writing.
Standard E (2): In the event any Builder, listing broker or Seller offers any cash or non-cash inducement, bonus or other compensation above the Members fees then they agree to refund or return same to the Buyer-Client at closing. Should the inducement, bonus, or other compensation be part of or based upon other purchase contracts or closings then the Member has sole discretion to distribute these in any way it considers fair and equitable to all of the Buyer(s) involved.
Standard E (3): Should the Buyer-Client need to sell a property as part of the purchase then the Member may refer outside licensed listing brokerages for consideration and may receive a referral (finder’s) fee should the Buyer-Client close the transaction through one of these licensed listing brokerages. Buyer also understands that Members may pay a referral (finder’s) fee to other licensed brokerages that refer a Buyer.
Standard E (4): Members will be knowledgeable and competent in Exclusive Buyer Agency and the ancillary fields of practice in which they normally engage and will obtain outside assistance or disclose the lack of experience if necessary to a Buyer-Client.
Standard E (5): Members will ensure their comments about other real estate professionals are truthful and not misleading and be a willing participant in NAEBA Code of Ethics and Standards of Practice procedures.
These NAEBA Standards of Practice establish obligations that include all those consistent with the “Common Law of Agency” and are always considered to be client-level services and never “customer-level.” These obligations are, in many instances, higher than those mandated by local law, state law, and other trade associations. If there is any case where local law requires a greater obligation or duty than these Standards of Practice then the requirements of the law must be followed. It is the duty of each individual Member to make themselves aware of the laws which may affect them. While protecting and promoting the Buyer-Client’s best interests the Member must be honest with all parties involved with a transaction.