How to become EBA?

QUESTION: Sir John, how can I become an Exclusive Buyer Agent (EBA)? ANSWER: Read The EBA Society - Philippines.

Vital guide for buyer agents

QUESTION: Sir John, who are the first people your contact when you are looking for properties to meet the demand of buyer?

ANSWER: Contact the four major Banks that holds huge investory of foreclosed properties. Combined listing of BPI, Metrobank, BDO, PNB is around 10,000 properties. With banks, buyers can go DIRECT, and referral fee is straighforward without any additional layer, and I don't have to go through the hassle of checking out if the property or owner really exists. The last that I check-out is the classified ads because there are many non-exiting properties advertised in internet, classified ads, and clandestine MLS, advertised by some desperate Brokers who just want to capture buyers.

PROCEDURE: Always be ready with the Buyer Registration Forms of the four banks. The moment the buyer confirms that he/she wants your assistance (may license ka man or wala), let him sign kaagad the Form and transmit it to the banks, put your name and address as the Referral Agent. Kapag merong mag-fit na property, kocontakin ka naman ng bank to assist them with the buyer on the additional paperwork.

QUESTION: do you have to do a "salestalk" or any function of a Broker or Salesperson?

ANSWER: Kapag Referral Agent ka, hindi mo kailangan magpaka-salesperson or magpaka-broker. Hindi mo nga kailangan ng license eh. You can be anyone, with or without nowledge in real estate. The bank have Salespersons and Brokers who will take care of those things for you.

Buyers' agent will not recognize brokers licensed under the anomalous PRB-RES

QUESTION: Sir John, as an Exclusive Buyer Agent kind of a Broker, do you consider real estate properties that are represented by seller-side licensed brokers who are licensed under the PRB-RES?

ANSWER: I used to, but this time NO, because I do not recognize the anomalous installation of the current PRB-RES of PRC. For the best interest of my client, I will have to bypass the Broker and deal directly with Seller.

The RA 9646 requires the formation of AIPORESP first before PRB-RES can be nominated, before oathtaking can be done, before exam can be done. There is no AIPORESP yet, so there should be no PRB-RES yet, there should be no oathtaking yet, there should be no exam yet.

Follow up Question: Sir John, how do you know who is the owner of the property being advertised for sale?

ANSWER: That is easy. Just check out the location of the property, sketch the map, and verify it in the Real Estate Property Tax Assessors Office of the Local Government Unit, then pay P160 in the Registry of Deeds to get a Certified Copy of the Title of Property. That's how easy to know the papers and owner of a property being offered/advertised for sale.

The Exclusive Buyer Agent (EBA) - Part 1 of 2

[Full Lecture on Exclusive Buyer Agent]

The simple truth is, a buyer or seller cannot avoid agents -- so if given a choice, he might as well deal with the RIGHT kind of professional agent who functions according to his need.

This article will describe in detail one particular type of real estate agent (among the 5 types), which is the Exclusive Buyer Agent or EBA. I will discuss (1) how to distinguish an EBA, (2) who are the clients of EBAs, (3) who needs EBAs, (4) why do buyers need representation, (5) what an EBA does best for a buyer, (6) who pays the agents, (7) how EBAs are make a living, (8) when should buyers consult with an EBA, and (9) where do EBAs get listing information.

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Go to PART 2
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INTRODUCTION

A Buyer Agent is also known as Independent Shopping Assistant, or Price Bargaining Assistant, Purchasing Professional, Consumer Representative, Buyer Advocate, and Property Finder.

An Exclusive Buyer Agent (EBA) is a buyer agent who is not tied up to any seller or real estate developer, therefore free from any conflict of interest. An EBA is a professional real estate agent who renders 100% loyalty representation services on the buyer side.

The word "exclusive" refers to his "entire career", which means that an EBA is an agent who has made a decision and choice to represent buyers only and never sellers in his entire career.

While Traditional Listing Agents (TLA) train on salesmanship negotiation, EBAs train on purchasing negotiation. Through the years of experience, he sharpens his skills in negotiation, concentrates his research in knowing where to get best-value listings, and focuses his learning activities in this specialized field of price bargaining. An EBA is not a product of an overnight reading on how to become an EBA, but a product of years of experience and study in this specialized field.

An Exclusive Buyer Agent is the ideal agent for first-time home buyers. For bigger transactions, the EBA is highly recommended to be engaged in expropriation proceedings by Government and major land or business acquisition by Real Estate Investment Trust Corporations (REITS).

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HOW TO DISTINGUISH AN EBA?

The other type of real estate agent who is always confused with the EBA is the Dual Agent. I have described what a dual agent is in my blog article entitled Types of Real Estate Agents.

If you are a prospective buyer in search for a real EBA, it is necessary that you interview the agent first before releasing any piece of buying information (budget, prefered location, etc). An EBA is distinguished by the following characteristics:

Formal Office. Look for license and registration. An EBA is a professional licensed real estate broker who has a legitimate office and official receipt.

One-sided Servicing. Test the agent's loyalty. An EBA is one-sided in his entire career, represents buyers only. I would say that this is the most distinguishing mark of an EBA that you can easily catch. Here is the trick - tell him that you are a property owner and you want a help of an agent to sell it and willing to pay a commission. If that agent is not an EBA, he will say YES he accept that deal. If that agent is an EBA, he will respond with something like "I can help you advertise your property for free in various multiple listings but I am not interested on the commission that you offer because I represent buyers only".

Remember, an EBA is not on the seller side. An EBA does not peddle properties. EBAs never never never never NEVER approach a property seller and offer his buyer-hunting services with a stipulation (asking) of commission. If you force the EBA to help you sell your property, he might help but will refer the buyer directly to you for you to negotiate directly to the buyer because he won't care about the commission.

Unlimited Listing Sources. Ask the agent if he will help you buy a property by which the seller is not willing to give any commission. something An EBA presents an unlimited and unrestricted source of listings to buyers. Unlike the other types of agents who will confine you in their "fence", an EBA is comfortable in telling you all his sources of listings.

One-sided Protection. An EBA protects the interest of buyers only and never sellers in real estate transactions. EBA will read all those fine prints in the Master Deed and in Contracts and watch your back about the advantages and disadvantages on your part in the written instruments before you sign. The only reasonable price of a property he knows is the lowest possible price.



Non-aggressive Salesman. An EBA does not pressure a client to buy on a "rush". The EBA will normally advise you on the "best timing" and he does not care if the correct timing is years from now.

Professional Satisfaction Fee instead of Commission. The first consultation is usually free. When you present yourself as a client, he will normally conduct a needs-analysis interview on you. Then he will enumerate the breakdown of workload that needs to be done in order to achieve your goal. You will see that each item in the workload will have a corresponding specific professional fee based on the time-period needed to accomplish the task. You will be given a chance and option to participate in any part of the workload so that you will save money. You will get the best value for your money for every sweat that is rendered by an EBA.

Price Bargainer. An EBA has a passion of pulling the price down to extreme depth to maximize the savings of the buyer. Passion could be an understatement, perhaps obsession is the right word.

Always with a Written Contract. An EBA will not start working for a buyer client without a written EBA engagement contract. This contract binds the buyer and EBA so they will work as a team towards a common and specific objective. This contract is what makes EBAs obliged to render 100% representation loyalty to the buyer.

No Conflict of Interest. An EBA avoids conflict of interest inherent in the traditional seller-oriented purchase transactions. Please read the article about Conflict of Interest in My Blogs.

Secret-keeper. An EBA does not disclose identities of current and former clients. The other types of agents normally brag about their clients and wave their names to attract a bandwagon of more clients. EBAs don't, because they believe that client identities are private information that must not be used for personal gain of the agent.

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WHO ARE THE CLIENTS OF EBAs?

-INVESTORS, especially Purchasing and Investment Portfolio Managers are individuals who habitually buy good quality real estate at the lowest price possible.

-Procurement for the purpose of Right of Way (government and consolidators)

-Organizations who watch over, review, and investigate real estate procurement of any of the other types listed above

-First-time home buyers in general, such as newly-weds (see Themes and Motiffs)

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WHO NEEDS EBAs?

Practically, an EBA is needed by every real estate buyer who (1) wants to make a decision based on unlimited line up of choices and (2) who needs assistance in bargaining the price! So basically, I am saying that "all" real estate buyers need EBAs, not just first time home buyers.

Even a lawyer needs an attorney representation if he becomes primary respondents in a court trial. A dentist needs to go to another dentist if he has teeth problems.

Using the same analogy, we can say that even the most skilled real estate broker needs an EBA if he buys a property for himself. Everyone needs an EBA. Even an EBA needs another EBA when he buys a property for himself.

Without an EBA, a buyer is always defeated in the price bargaining process because a buyer is a decision-maker of the purchase. A buyer could lose hundreds of thousands and even millions without an EBA.

For those who have used an EBA, they know it’s a win-win situation. Under the present market situation, even more so than ever before, the best interest of the buyer sits on the hands of a true EBA.

How about property owners? In what instances they go to EBAs for services? Property seller or a listing broker goes to an EBA to advertise in the multiple listing database of the EBA because loading data in the database of an EBA is totally free and it does not require stipulation of commission or share of commission.

Although everyone needs an EBA, there is not much available EBAs in the field of real estate service because EBAs provide more services but gets lesser income compared to what listing agents get from commissions.

Below is is a YouTube short video clip by book author and consumer guru Jean Chatzky that will supplement my explanation why a buyer should go to an EBA. Jean Chatzky will be discusing the different types of real estate agents in the U.S.A.



By the way, in the U.S., the number of EBAs has already increased to at least 4,000 members. They have an organization called National Association of Exclusive Buyer Agents (NAEBA) and their website is at http://www.naeba.org/.

In the Philippines, as of today, December 3, 2009, I am the one and only Exclusive Buyer Agent yet so far; and I have been an EBA since 1998. I am recently starting up a group called EBA Society, hoping I could pass on principles of consumerism to more real estate brokers so that more buyers will enjoy our loyalty-based services.

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WHY DO BUYERS NEED REPRESENTATION?



There is an old wisdom that says only a fool represents himself.

It is always advantageous for any wise buyer if he will come in represented by a highly skilled buyer's agent. If the buyer will personally go into that negotiation ring all by himself, the sellers agents can always defeat the buyer in almost any part of the transaction.

Unrepresented buyers normally end up (1) buying something without exploring a wide range of choices and (2) paying more than how much they could have paid with an EBA representation.

Listing agents love it when the buyer is not represented because they know they will be dealing with a "soft target" -- this is the reason why you always see signs saying "For Sale, Direct Buyers Only".

Remember, when listing agents ask questions about the buyer, the question is always centered towards qualifying the buyer and determining the maximum limits of his purchasing power -- this is how listing agents are able to sell on overprice.

Just like any other normal human being, most buyers feel stupid and dishonest if they cannot answer a question of seller, so they answer almost all questions. When a buyer is put in this scenario, he normally becomes careless in answering the questions of sellers. Every piece of information given by a buyer to the seller-side is a disadvantage of the buyer.

A buyer is the decision maker -- just like a Commanding General of the Army, he is not supposed to do a soldier's work at the front-line. A buyer gets the services of an EBA so that the expert agents from the seller-side will find their match in the negotiation ring.

Do you know when a negotiation starts? It is at the moment the buyer or the buyer's agent makes the first contact call to the seller or the listing agent. This first contact is most critical, even more critical of the end-part of haggling the price, and this first-contact is the moment the buyer must be represented by an EBA.

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Go to PART 2

Five Types of Real Estate Agents -- Engage the Right One

Agents play a big role in real estate transactions. If you are a seller, your agent will present the property in the best manner so it will be sold at the best price. If you are a buyer, your agent will help you in research to find a wide array of choices and will assist you in negotiation so you can buy the property at the lowest possible price.

Whether you are a buyer or a seller, if you go into the market ring without agent representation, you will most likely end up defeated.

Therefore, I strongly suggest, be represented by the appropriate type of agent of your choice.

There are many agents out there, but the appropriate agent for you is not necessarily the one you personally know, nor the one who is referred to you by a friend, nor the one who is aggressively pursuing you.

The best agent is one who possesses the qualities, license, and registration of a professional broker. Select your agent sincerely though interview, just like a job interview, so you will know how he operates and what is in his mind. The moment you show that you do not know how to say a firm "NO" to an agent you are not comfortable with, you are already doomed to regret it in the end.

KNOW YOUR RIGHTS AS A BUYER

1. Demand your right to 100% loyalty representation from your agent. Your agent works for you, you pay him, therefore he is obliged to protect your interest.

2. Claim your right to be represented by your own agent. Get a professional one and let him do the work of dealing with the agents of the other side of the transaction.

3. Do not tolerate your agent to work with conflict of interest. You have a right to terminate your business relationship with the agent immediately if you detect that he does something (convinces you to do something or releases crucial information) that you believe is more favorable to the other side and less favorable to you.

Before anything else, I would like you to watch the YouTube short video clip by book author and consumer guru Jean Chatzky. She will be discussing the different types of real estate agents in the U.S.A.

THE DIFFERENT TYPES OF REAL ESTATE AGENTS

In the U.S. however, they have only classified four types of real estate agents because there are no Colorum Agents being tolerated there. But in how I see things around the Philippine market, there are actually five types of Real Estate Agents that exists.

Real Estate agents switch characteristics from one type to another for various reasons. Among which is their search for better earning opportunity or greener field of pasture (they just simply want to earn for a living).

1. Traditional Listing Agent (TLA)

2. Non-Exclusive Buyer Agent (NEBA)

3. Dual Agent

4. Colorum Agent

5. Exclusive Buyer Agent (EBA)

I. Traditional Listing Agents

Traditional Listing Agents or TLA are in the business of "selling" real estate. The TLAs are trained in sales persuasion and negotiation. They are the marketing experts and skilled in the art of salesmanship. TLAs represent the sellers or the developers. TLAs work for sellers who are willing to pay a commission. They normally secure an Authority to Sell from the property owner (seller) with a stipulated commission. Some agents are authorized by the seller to offer the property at an overprice.

If you are a buyer and you contact anyone who is advertising a property for sale or lease, you will most probably be encountering a TLA or the seller himself. The brokers who work as full-time employees of developers fall under this TLA classification. These are the type of agents who are heavily trained on marketing techniques on how to entice and court buyers. TLAs are rationally not interested to pull the price down because they are bound to represent the price mandated by the seller and their commission is based on the final price.

The three kinds of traditional listing agents are In-House, Independent, and Dealers.

In-House Agents work exclusively in a realty firm or a developer, they only present and sell properties that are carried by the developer or the firm. In-house agents earn salaries from the developer or realty firm.

Independent Listing Agents are sometimes called external brokers or freelance brokers. They are agents who sell whatever projects and properties come into their opportunities.

Dealers are agents who have a lot of financial resources, they buy good properties at a very low price and sell it at a profiteering price.

These three types of agents are highly recommended if the client is a property owner who wants to sell his property and willing to pay a commission. However, if the client is a buyer, it is best for him to get a representation of an Exclusive Buyer Agent before contacting any listing agent.

II. Non-Exclusive Buyer Agents

Non-Exclusive Buyer Agents or NEBA are two agents from the same firm are representing the buyer and seller in the same transaction (double-blade). NEBA are agents within a realty firm who has two departments of agents within the company - a marketing staff and a customer representative. The marketing staff is the selling agent. The customer representative is assigned by the company to capture the needs of buyers and represent buyers in their dealings with the firm. It is like two agents in the same firm playing bad-guy-good-guy on a buyer. It is the firm who employs the non-exclusive buyer's agents and will assign him to negotiate with listing agents within the firm. In short, the NEBA can only present and negotiate listings that are within the firm. A NEBA type of agent is almost similar to a dual agent except that his being a buyer's agent is directed by the management of the firm and it has a switch on/off characteristic. We recommend that if the client is a buyer, he can settle to a NEBA if he cannot find any EBA.

The best reference about NEBA is the YouTube - Spencer: on Buyer's Agent (Part 1), and Spencer: on Buyer's Agent (Part 2). Alternatively, you can just play the embedded YouTube below.

III. Dual Agent

A Dual Agent is an agent who offers representation services for the buyer and seller in the same transaction (balimbing - two faced agent). The dual agent tailorfits his service to capture the trust of the customer.

A dual agent is capable of switching characteristic from listing agent to buyer agent (back-and-forth) in response to the opportunity to earn a commission. When facing his seller customer, he will present himself as seller's agent. When facing his buyer customer on the other side, a dual agent will pretend will all his might to appear like a buyer's agent.

If the negotiating table is likened into a boxing ring, a dual agent shows that he plays three roles simultaneously like a trinity -- the role of a referee, a boxer of the left corner, and a boxer of the right corner. He is like alone in the ring and the customer is watching a show.

This type of agent is the one any wise buyer must avoid because of conflict of interest. A dual agent most often (if not always) get his compensation from sellers who are willing to pay commission. His loyalty is most likely on the seller. If you ask a dual agent to help you find a property to buy, the dual agent will do the search but will normally not present a possible property to the buyer if the seller is not willing to pay a commission.

From the point of view of buyers, in terms of loyalty, a dual agent is an epitome of conflict of interest. He is sent out by the buyer to look for properties and he connive with sellers on the overprice -- very unethical.

For the buyers, in dealing with a dual agent, all I can say is Caveat Emptor (buyers beware). At the moment the buyer divulges his "budget" to a dual agent, the buyer is already deemed to be defeated on the negotiation table. The dual agent would look for properties with lower value than the budget and then present it to the buyer at budget price -- with profiteering intent.

Even Exclusive Buyer's Agents are very very very very careful and cautious when they deal with dual agents. Dual agents are very flexible, resourceful, and effective in looking for properties but also very opportunistic to the vulnerability of buyers.

IV. Colorum Agents

Colorum Agents are those without license and registration who pretend that they are traditional listing agents, dual agents, non-exclusive buyer agent, and exclusive buyer agent. Colorum agents compose at least 95% of the real estate agents all over the Philippines. Colorum agents are illegal, punishable by 4 years imprisonment and fine not lower than P200,000. The irony is that the government tolerates them in such a way that if you complain them to HLURB, you have to pay PhP 1,010 filing fee and shoulder the investigation effort and expense (funny huh).

Most, if not all, of colorum agents are being exploited by in-house traditional listing agents. You can easily spot these colorums in malls handing out marketing fliers of condominium and subdivision house and lots. You can easily detect them by just looking at the back of their fliers where they write their own name without professional license and HLURB registration.

Colorum Agents come in two types. First is what we call "underground agents", those who have no license from the government agency regulating the real estate service. The second is the "informal agents", or those who have licenses but are not complying with the government's registration and office set-up requirements for real estate service practitioners. Aside from these two terms I am using here, the other similar terms referring to colorum agents are illegal agents, illicit agents, backdoor agents, and quack agents.

To detect a colorum, the key words we are looking at here are license and registration. Now here is the rule, which applies similarly to individual and independent brokers. The proof of license is a DTI/HLURB/PRC License Registration Certificate. The final proof of registration are DTI Business Name Registration, Mayor's Business Permit, Principal Place of Business (office), and BIR-registered Official Receipts.

Although colorums can be easily detected, it is very difficult for buyers to avoid them because they comprise around 95% of the agents scattered all over the places you can imagine. You can easily spot these guys in the malls, street-side, and project sites, distributing fliers. They usually have no performance bonds, no offices, no receipts of their own, no proper schooling in real estate service, no ethics, no reputation to protect. These are the kinds of agents who simply want to earn commission, they don't care about government regulation on the real estate profession.

Colorums, just like in the medical world, are like ordinary persons posing as dentists. The colorum have no professional license and no registration of the service they are offering to the public. Well, they colorum dentists have the capability and long experience of extracting people's teeth, they can show you a plastic-bag full of teeth and will promise you that they can do it faster than anyone else. But you will notice that their methodology and facility is different compared to the professional dentists. The colorums can't explain service contracts, can't explain things in that field, will not tell you the cons or the possible after-operation "infections", but yes they sure can extract you teeth fairly fast with a set of rusty pliers. Would you allow these guys to work on your body? The hell, big NO!

If you are willing to pay extra two thousand pesos to get the services of a real dentist, instead of a backyard witch dentist; then I think you should get a professional broker instead of a colorum agent because what we are talking about in a real estate transaction is hundreds of thousands and even millions of pesos. Do you get what I am trying to emphasize here?

Cautious clients (sellers and buyers) don't deal with colorum agents. Even if the agent is representing himself as in-house agent, you must always look for his personal professional license and HLURB registration as broker or salesperson.

Watch out guys, in September 2009, I launched a research to determine if those people handing out fliers in the malls and streets are colorum or not. The findings of the study is shocking, only one out of one thousand is a licensed and registered broker or salesman. I have concluded that even prestigious developers illegally employ colorum agents. They send out colorum agents to capture clients in the field. So you have to be very careful.

Watch your back also, there are a lot of real estate agents in the Philippines who can show IDs as Licensed Brokers but cannot show their offices. These are called fly-by-night agents and the mere fact that they do not have official receipts as professionals, they are already showing that they can get away from their duties to the government.

Colorum agents are already used to eluding their obligation to government, therefore they can easily elude their obligation to ordinary customers. No wise customer would want to deal with this kind of agent.

Now the classic question is, "is it cheaper to engage the services of the colorum compared to a licensed agent"?

My perpetual answer is straightforward. You pay more to colorums and get unskilled service. More often, you will regret about the price you paid for the property later on, because colorum agents have this bank-robber mentality, they want one big hit out of any rare opportunity to capture a buyer.

Colorums are not skilled in perfecting transactions before clients sign the documents. If your transaction will end up into an unexpected "infection", you can't run after colorums because they have no offices and they have no performance bonds, colorums can't help you fix the problem -- you will have no choice but to go to lawyers and courts and end up paying even more.

V. Exclusive Buyer Agent Exclusive Buyer Agent (EBA) is also known as Personal Shopping Assistant or Price Bargaining Assistant who is not tied up to any seller or real estate developer. An EBA is a professional real estate agent who renders 100% loyalty representation services on the buyer side only and never on the seller side. The word "exclusive" refers to his "entire career", which means that an EBA is an agent who has made a decision and choice to represent buyers only and never sellers in his entire career. In the U.S., the number of Exclusive Buyer Agent has already increased to at least 4,000 members. They have an organization called National Association of Exclusive Buyer Agents (NAEBA) and their website is at http://www.naeba.org/. In the Philippines, as of today, December 3, 2009, I am the one and only Exclusive Buyer Agent yet so far; and I have been an EBA since 1998. I am recently starting up a group called EBA Society, hoping I could pass on principles of consumerism to more real estate brokers so that more buyers will enjoy our loyalty-based services. While Traditional Listing Agents train hard on salesmanship negotiation, EBAs train harder on purchasing negotiation. Through the years of experience, he sharpens his skills in negotiation, concentrates his research in knowing where to get best-value listings, and focuses his learning activities in this specialized field of price bargaining. An EBA is not a product of an overnight reading on how to become an EBA, but a product of years of experience and study in this specialized field. Exclusive Buyer Agents (EBA) represent the buyer in case the buyer have after-purchase complaints against the seller or against the seller's agent. These complaints are lodged and settled in the arbiters' offices of the Housing and Land Use Regulatory Board (HLURB), wherein only licensed real estate professionals can make representation. The HLURB is also the place where complaints are filed against colorum agents who sell real estate projects.

The Part-2 of this article, which is the most important blog of all my blogs, is entitled Exclusive Buyer Agent (EBA), which is a detailed description of the EBA. xxxxx REFERENCES and RECOMMENDED READINGS The Buyer Broker. http://www.fool.com/homecenter/find/find02.htm Choosing Your Agent. http://www.fool.com/homecenter/find/find03.htm Buying Without an Agent. http://www.fool.com/homecenter/find/find01.htm

The Exclusive Buyer Agent (EBA) - Part 2 of 2

[Full Lecture on Exclusive Buyer Agent]

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Go to PART 1
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WHAT ARE THE FUNCTIONS OF AN EBA?

Functions for Buyer-Clients

- Assist the buyer in researching the various listing from unlimited sources.

- Ensure that all properties that will be shortlisted have proper property information folder or full disclosure paperwork.

- Research and inform the buyer of any hidden defects and hazards of the property and location (i.e. flood, fault-line, soft-soil, undesirable neighborhood, water utility monopoly, etc.).

- Reverses any overpricing and represents the buyer in negotiation to pull the price down.

- Prevent future problems by ensure that all details of the contract does not put the buyer in a disadvantageous position in scenarios involving "surprise" expenses after the signing of sales contract such as special taxes, charges, and fees that are not previously known.

- Represents the buyer in case the buyer have after-purchase complaints against the seller or against the seller's agent. These complaints are lodged and settled in the arbiters' offices of the Housing and Land Use Regulatory Board (HLURB), wherein only licensed real estate professionals can make representation. The HLURB is also the place where complaints against unregistered agents who sell real estate projects are filed.

Special Function for Non-Buyer-Clients

Another special function of an EBA is related to private investigation. Some clients discretely engage an EBA to watch over, review, investigate, and look for irregularities in a specific real estate purchasing transaction. Some are being conducted for political mileage purposes, some are for journalism purposes, and some are for anti-corruption advocacy purposes. This is the reason why I took advance courses in the US Academy of Private Investigation to supplement my professional expertise in real estate broker services.

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WHO PAYS THE AGENTS?

This is a classic frequently asked question -- "who pays the agents"? Even brokers ask me this question.

My repeated answer was always "wherever that money came from" - in short the BUYER.

So, regardless of whoever actually does pay the agent, regardless of whoever issued the check to the agent, whether the seller or the developer, it is always the buyer's money that is used to pay the agent. It is the buyer who pays for the property being purchased, the closing fees and taxes, and the agent's commission.

With an EBA, it is not only the price of the property that will be pulled down, but all the add-ons that are calculated based on the final price. Every peso that these items go down is a savings of the buyer. The term "buyer's savings" is the reason why EBA exists. A buyer could save half a million pesos by just spending a hundred thousand pesos to an EBA.

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HOW ARE EBA's PAID?

Before I jump into the discussion of how EBAs get compensated, let me beg to disagree to the classic trending of EBAs in the United States. They are saying that getting an Exclusive Buyer Agent will cost a buyer nothing. Well, that is true if you will not consider the commission of the agents as one of the proceeds of the money that is used to pay the price of the property that comes only from the buyer. In how I see things clearly, I would rather honestly say that getting a services of the EBA will cost the buyer less.

There are two best options to pay the professional services of an EBA. You will need to talk freely with your EBA and ask for a presentation of comparative analysis of the options so you can decide which option works well in your case.

Split Commission

The first and simplest option is called Split of the Commission between the listing agent and the buyer's agent. This option is always taken when (1) the buyer agrees to this option, and (2) the seller agrees to this arrangement.

Under this option, the buyer gets the representation without directly paying the EBA. This option is always acceptable, as it is inevitable, because in most cases, the seller of the property almost always offers a commission to agents.

Professional Fee

The second option is called Professional Fee. This fee could be a (1) pre-agreed fixed amount, (2) periodic retainer, (3) percentage reward out of the amount the EBA can pull the price down from the listing price down to a negotiated price, or (4) combination of the three.

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WHEN SHOULD BUYERS CONSULT WITH AN EBA?

This part will discuss TIMING. There are two parts of EBA services. The first is Needs Analysis, and the second is Actual Engagement.


Needs Analysis is the focus of discussion during initial consultation with an EBA. A potential buyer should go to the EBA at the moment the idea of purchasing a property crosses his mind. An EBA usually interviews a potential buyers financial situation to come up with a recommendation as to the correct timing to buy.

For buyers with big wants but limited resources, the EBA can explain long term planning, savings preparation, and credit strengthening -- no hurry and no pressure. For buyers who have ready money and tight deadline, an EBA, during initial consultation, can immediately develop a workplan to achieve the goal on time. EBAs can work well and effectively in the fullest extent when the buyer signs up for his services before the buyer start searching for properties in the market.

Everything the buyer does or says, without EBA representation, are pieces of actions and information that are released to the market that can be used by sellers agents to defeat the strategy of the EBA. In short, the buyer must get an EBA before talking or dealing with anyone, even with their internal purchasing staff.

If it is a huge buy, it is very important that the buyer must remain silent, or much better if identity is unexposed, all throughout the pre-buying period while the EBA leads the negotiation with listing agents and sellers. The reason being is that once the intent of a huge buy is exposed to the market, it naturally increases the prices of properties in that particular area -- and this is not good for the buyer.

There are moments when the EBA will turn down a client's request for services. One is when the EBA already has an existing client with almost similar requirement - same budget, type of property, location, and intended use. The reason being is that the EBA cannot present the best property to two clients for some reason that it may contaminate the "100% loyalty principle". Besides, it will create an "auction effect" that will push the price up, which is basically contrary to the mission of the EBA. When this happens, the second client must wait after the EBA is done with the first client.

The other instance that may lead to EBA non-acceptance of a client is when the EBA detects during the first consultation that the buyers does not need EBAs -- buyers who believe (1) that they can find their best choice as a result of their own research and (2) that it is much easier to bargain the price with sellers if they go in without a professional price bargainer.

Actual Engagement of an EBA the the implementation of the planned workload. Most EBAs are very selective of their clients under this part of the workload -- acceptance of engagement has three criteria. The primary criteria is financial readiness of the buyer. The second criteria is the price of the property that is intended to be purchased. The third criteria is the work schedule capacity of the EBA to accept a new workload.

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WHERE DO EBAs GET LISTING INFORMATION?

Take note that EBAs are not listing agents. They don't have listings. They don't have an inventory of properties to sell where they can get commission from. But they know where these listings can be found.

In order to meet the reqirement of client buyers, EBAs get their listing information from various sources, such as:

- Various Multiple Listing Services
- Suggestions of the buyer
- Properties foreclosed and are nearly foreclosed by banks
- Properties expropriated by local government units for failure of owners to pay real estate tax
- Properties advertised in the newspapers, classified ads, and internet
- Developers (big and small)
- Various realty companies
- Multiple listing baskets of brokers' associations
- Search on foot and saturate the whole area with an offer to buy fliers

Will the EBA broker any property a buyer points his/her finger to? Yes, even if it is not advertised for sale, an EBA can talk to the owner to present an offer to buy such property. Take note that finding probable properties is a joint effort of the EBA and the client buyer. The main objective of the EBA-Buyer teamwork and collaboration is to come up with sufficient number of comparisons. After the teamwork comes up with the wide range of choices, it has to be the EBA who will do the initial contact with the sellers to ensure that the shortlist of properties that will be inspected by the buyer are readily screened and worry-free.

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WHO ARE THE IDEAL CLIENTS OF EBAs?

An Exclusive Buyer Agent is highly recommended to be engaged in expropriation proceedings by Government and major land or business acquisition by Real Estate Investment Trust Corporations (REITS).



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