Real estate listings can be a real estate agency's bread and butter: Property sales guarantee sales-commission dollars for the listing agent and agency.
But some brokers are forgoing some of those profits and are not listing properties. Instead, they focus solely on finding properties for their clients, offering buyers undivided attention and service in finding the right real estate opportunities.
"It's a big sacrifice to be an exclusive buyer's agent, there's no doubt about it," said Maureen DiFulgentiz, who, with her husband, Martin DiFulgentiz, is broker/owner of The Buyer's Agent of Steamboat Springs, one of two exclusive buyer brokerages in town.
The couple started the business in 1996 after spending about 30 years running a real estate and property management company in Connecticut. They are among experienced brokers who, after years in the industry, recognized and decided to meet the demand for brokers who only represent buyers' interests.
With consumers' increasing awareness of buyer representation, more brokers like the DiFulgentizes -- though still a small minority of licensed real estate agents -- are giving up residential listings and avoiding the potential confusion and conflicts of interest that can occur when brokers in the same office are representing both buyer and seller.
"We can spend more of our time for our buyer clients because that's all we do," said Doug Labor, broker/owner of Buyer's Resource, the other exclusive buyer brokerage in Steamboat.
The idea of buyer representation began to surface in the 1980s, when courts were dealing with cases involving buyers saying their real estate agents should have done more to represent the buyers' interests.
At the time in Colorado, there were no laws regarding Realtor representation, and the courts ruled that brokers were presumed to work solely on behalf of the seller, Debbie Campagnola, director of the Colorado Real Estate Commission explained.
A self-described "old timer" in the exclusive buyer-brokerage business, Barry Miller, brokerowner of Buyer's Only America Realty in Denver and president-elect of the National Association of Exclusive Buyer's Agents, started a company focused on buyer representation in 1982. There were only two similar companies nationwide at the time, he said.
Miller remembers the late 1980s as dramatic years, when brokers began shifting from representing only sellers to representing buyers also. The change became so prevalent that he trained hundreds of real estate brokers on how to represent buyers.
Much of the trend took place in traditional real estate firms, which invited Miller to train managers on how to deal with the new concept, he said.
There gradually was more mention of buyers in real estate contracts, which helped facilitate new real estate laws in Colorado, Miller said.
"Our contracts started changing long before the laws started changing," he said.
The first big change came in 1993, when the real estate commission, which governs licensed real estate agents, defined brokerage relationships with buyers and sellers while adding the idea of a transaction broker, who is not an advocate for the buyer or seller but exists to facilitate a transaction, Miller said.
A confusing component of the law allowed dual agencies, those with real estate agents representing a buyer and seller in the same transaction. The rule stipulated that in those cases, the company had to have a policy specifying whether it would act as a transaction broker or represent the buyer and seller as dual agent, Miller said.
"It was confusing. ... Realtors never got it," he said.
To help make the laws less perplexing, the real estate commission enacted the designated brokerage system in 2003. Under the new law, a company representative acts as a supervisor, designating whether two brokers involved in the same transaction are to act as transaction brokers or agents for the buyer or seller.
Under the law, one agent cannot represent both the buyer and seller in a transaction and must instead act as a transaction broker, which has a much lower level of responsibility with regard to the buyer or seller, Campagnola said.
Though meant to be less confusing, Miller stressed that by allowing two agents from the same company to be involved in the same transaction, the law leaves open the possibility that buyers' and sellers' confidential information -- including financial situation and motivations -- may be shared.
"It's going to happen day in and day out, inadvertently or intentionally," he said.
Helping buyers and sellers is the state-required disclosure form that defines the different forms of representation.
"Whenever a person works with a Realtor, one of the first things they should ask is to provide a definition of their working relationship," said Bob Brown, president of the Colorado Association of Realtors.
Foreseeing the potential conflicts involved with buyer and seller representation, Miller in 1986 stopped listing properties and began to represent buyers exclusively.
Similar to Miller, Labor became an exclusive buyer's agent in 2001 after working about 16 years in the development and sales of ski resort properties.
"I knew once I went out on my own, buyers needed as much protection as possible," he said.
The focus of exclusive buyer's agents is negotiating the best prices and terms for their clients, who can freely share personal information without worrying that it might be compromised, Labor said.
"It's best to have your own representation when it comes to real estate," he said. "That way, your best interests are recognized. Plus, that gives the broker the best information to search for the best property," he said.
Although they don't list properties, exclusive buyer's brokers show clients listed and unlisted properties, including those that are for sale by owner. When former clients want to sell, exclusive buyer's agents refer them to seller's agents, Labor said.
Whereas buyers may have to meet with several real estate agents to get a complete sense of a market, working with one exclusive buyer's agent usually gives buyers a well-rounded view of a market in less time, Maureen DiFulgentiz said.
"They are expecting us to give them an idea of the whole market and expedite the process," she said.
That can be particularly beneficial in resort areas where potential buyers often come from out of town or out of the country and are not familiar with the nuances of the market, Labor said.
To have two buyer's brokerages in a small town such as Steamboat is fairly rare, especially considering that some large cities don't have more than one, Miller said.
There are about 50 exclusive buyer's agents in Colorado, compared with about 20,000 licensed brokers, said Miller, who regularly gives talks at real estate schools throughout the country.
Nationally, only about 2,000 of more than 1 million licensed brokers are exclusive buyer's agents, he said.
Consumer awareness of exclusive buyer's brokerages has been increasing gradually. It wasn't until about 1 1/2 years ago that Miller's office began receiving calls from potential clients who deliberately sought him out as an exclusive buyer's representative, he said.
Although some of Maureen DiFulgentiz's clients are first-time buyers, others come from referrals or are returning customers, she said.
Labor has had real estate agents who are looking to buy and understand the process and advantages for exclusive buyer's agent services, he said.
Although awareness has been slow, exclusive buyer's agents are optimistic the concept will continue to establish a firm foothold in the real estate industry.
"In my opinion, it's both buyers' and sellers' money being used for the transaction, and it's slowly being recognized that both parties should be represented," Labor said.
-- To reach Tamera Manzanares call 871-4204 or e-mail firstname.lastname@example.org