Opinions on real estate buyer's agents

Hello Lou.

I have used a buyer's agent on the mainland and the main feature of that relationship was that I felt relatively comfortable sharing details about my situation with my agent without worrying that those details would filter back to the listing agent and seller.

Island real estate firms, like their counterparts on the mainland, generally subscribe to the MLS so all agents have the same basic knowledge of available properties. Individual agents may have personal knowledge of available properties that are not advertised in the MLS and occasionally offices retain listings in-house, which would limit the general knowledge of the availability of those properties.

Earlier this year I was discussing the issue of buyer's agency with a principal of a real estate firm on STT and I was informed that unlike the mainland, in the USVI all agents still have a primary fiduciary responsibility to the seller.

Thanks for the response. Do you know of any buyer's agents on St. Thomas and do they have a web site I might check out? Also, what about St. John?

Thanks again,
Lou

Lou,

What do you mean by "buyer's agent?"

An agent cannot have a fiduciary responsibility to both a buyer and a seller. All USVI real estate agents will assist buyers but they represent the sellers i.e. they are paid a commission by the sellers and have a fiduciary responsibility to the sellers. In many U.S. states, sellers can agree when they list their property to pay a commission to any agent who brings the buyer, even if that agent is a "buyer's agent" i.e. has a fiduciary responsibility to the buyer rather than the seller. This duty obligates a real estate agent to act at all times solely in the best interests of whomever he or she represents to the exclusion of all other interests, including the broker's own self-interest! Thus, an agent representing a seller cannot disclose to a buyer that the seller would sell his property below the listed price. Conversely, a broker representing a buyer is prohibited from disclosing to a seller that the buyer would pay more for a property than what has been offered.

My understanding is that the buyer's agent option is not available in the USVI; all agents, even those who show you properties, help you negotiate a price and follow your contract through to closing, work for the seller as seller's agents. Until the mid 1980s this was also the case on the mainland but that has been slowly changing.

As far as recommending agents, I believe those who responded to your 10/31/05 query for agent recommendations had some good suggestions: https://www.vimovingcenter.com/talk/read.php?4,39011,39045

What I'm referring to is someone who solely represents the buyer. I did a search on the board and there was a buyer's agent listed for STX http://www.st-croix.net/realestate/buyersagent.html but I couldn't find any on STT. The agent in STX was Chuck Ulrich. Just wondering if there is anyone listed here in STT. I appreciate the feedback that I received from my last post. I'm just trying to gather as much info as I can before I decide to purchase.

Lou

Chuck Ulrich advertises as a buyer's agent, but he does not sign contracts with buyers to represent them solely and does not charge the buyers a fee/commission. He is paid by the seller as are all the other agents. He advertises as a buyer's agent because he does not list properties. He prefers to work only with buyers.

Typically, the agent working with the buyer has the buyer's best interests in mind and that's who the agent has the relationship with. The listing agent has a relationship with the seller. All agents are officially representing the seller if the seller is paying the agents on both sides, but that doesn't mean the agent representing the buyer is working to the detriment of the buyer!

It is in the seller's best interest for the buyer to be happy with the process and to feel secure enough to make an offer and talk to his/her agent about the transaction. For a buyer's agent to "spy" on a buyer would ultimately be against the seller's interest, as deals would fall apart. A buyer doesn't want to work with an agent he/she doesn't trust and have a good relationship with.

Agents working with buyers have a fine line to walk to keep their relationship with that buyer intact and at the same time work to get a fair price for the seller. Real Estate negotiations are always a compromise. If the lowest price the seller will accept and the highest price the buyer will pay allow for some cross-over between them, then the deal can happen. That's in the best interest of both the buyer and the seller. It's nice when everyone is happy with the end result!

Lou,

I've seen Mr. Ulrich's site before but a long-time realtor and firm owner claimed that the only conditions under which buyer agency is permitted in the USVI is if the seller is informed of the agency and agrees to it and if the buyer pays his or her own agent. Perhaps my source is incorrect and someone like Alexandra or one of the recommended agents can shed some light on the issue for you.

Alexandra thanks for the post. I guess I have a better understanding of the term "buyer's agent" 🙂

Lou

We purchased our villa in September and used a John Foster Real Estate Agent, her name was Dawn Wheatley, She was excellent, one of the best real estate agents I have every worked with, she went beyond and above her call of duty, and really worked with us through a difficult purchase. She was always available and had good contacts throughout the island. I highly recommend her.

Good luck,
Gary

Yes, dntw8tup, you are correct. If an agent is going to work specifically for the buyer and put their interests above those of the seller, then that must be disclosed clearly in any offer to purchase submitted. Some sellers will pay the buyer's agent a commission anyway and some will not. In this kind of situation, a buyer's agent will usually have the buyer sign a contract agreeing to pay a fee or commission to the buyer's agent for working for their interests in the transaction.

However... due to the seller's listing agreement with the listing agent, the seller will still pay the full commission, even if it all goes to the listing agent and none to the selling agent (buyer's agent). That means there isn't any additional bargaining room to bring down the price so that the buyer would be better off paying his agent's commission on top of the purchase price. For very expensive properties, there might be enough bargaining room and the buyer's agent might be able to advise the buyer on negotiation tactics to use to get the seller to discount the listing price by a significant enough amount to make the buyer's agent contract worthwhile.

For any serious developers who are buying multi-million dollar tracts of land, having a buyer's agent they trust with their financial information and a good lawyer to assist with the complicated negotiations is important. For most single family home purchases under $1M, it's usually not going to make much difference to the buyer if the seller is paying the buyer's agent's commission.

For all buyers, find an agent you trust who understands your needs. If an agent shows you two properties and tells you to choose one of them... either they are extremely unique properties or there are more you should see before making your selection and the agent is being lazy.

If you find a property your first day out that you absolutely love, go ahead and put in an offer. Most purchase and sale agreements allow time to review your selection and back out of a contract if there turns out to be a problem with it. You can continue to see other properties available and if something better shows up, you can usually change your selection. Sometimes a great new listing will sell quickly and if you delay to see more properties, you might miss the one you want once you realize you saw the best there was on the first day. There are 2 kinds of buyer's remorse... from buying a property without doing your homework first... and from delaying too long and missing out on the one you really love and thought you had time to think about.

Alexandra and dntw8up have most of the facts but let me clear up some slight mistakes. I am the Assistant to the Managing Broker at RE/MAX st croix. Roland Groder, one of the owners of REMAX st croix , is THE ONLY Nationally Accredited Buyer Representative (ABR) licensed on St Croix. He was accredited by the National Association of Realtors in 2000 and is the only Realtor on st croix who can sign a contract to work for and on behalf of a buyer.

His loyalty is to the BUYER ONLY when he works as a Buyers Rep. He has no obligation whatsoever to "get a decent price etc for the seller!"

He has to tell any listing agent upfront that he is working as a Buyer's Agent and will use any information given to him to get the best deal for his client, the BUYER.
We will be pleased to answer any questions on this or any other matter and can supply Roland's credentials on request.
I might add that roland is also President of the St Croix Board of Realtors and a past territorial President.

You may want to check out our web page at www.buyersagentvi.com
Our real estate agency Gotts & Associates, Buyers Agent VI is the only Exclusive Buyers Agent in the US Virgin Islands and the only local member of NAEBA, the National Association of Exclusive Buyers Agents, www.naeba.org.
The major distinction with an Exclusive Buyers Agent is that our agency accepts no listings. We act solely on behalf of the buyer, maintaining your confidentiality and providing unbiased assessments of the properties.
True, some traditional realtors do act as "buyers agents" for their customers on an ad hoc basis, however all of them ultimately work for listing agencies.

Lou previously mentioned Chuck Ulrich as being a buyer's agent. Mr. Ulrich used to be affiliated with Mr. Gott's brokerage. In a conversation I had with Mr. Ulrich the week he left Mr. Gott's company, he told me that he did not sign contracts with buyers he worked with to act as their exclusive agent and that he took his fee from the seller as other agents do... yet considered himself to be, and advertised as, a buyer's agent.

While working WITH a buyer there is a natural (and necessary) tendency to try to put a deal together that will work for that buyer and that will also be acceptable to a seller. That still doesn't make the agent a "buyer's agent" unless the buyer is the one paying the commission or fee for the agency service provided. Even in that situation, the relationship must be disclosed to the seller and listing agent from the very first moment of contact to set up the first showing on the property in question and again in all contract documents that come later. I am curious to learn if Mr. Gott's brokerage is receiving their fees directly from buyers they work with or from the sellers in the transactions?

I was told by someone that my name was being used in this thread, so I thought I would join the party.

First of all I have to say that I am not a fan of these on-line forums. They seem good on the surface, but are filled with self-serving misinformation that people take as good advice. There are a lot of things being said here that are just dead wrong, and I would like correct them. If you need information on how buyer agency works you should ask a buyer agent.

A little background.
I was the first Exclusive Buyer Agent in the U.S. Virgin Islands (I was not the first buyer agent). I did a lot of research on buyer agency, developed Buyer Agent St. Croix as well as Buyer Agent VI, while working with an inactive broker Gotts and Associates. I now have my own brokerage Buyer Agent St. Croix.

dntw8up SAID
""Earlier this year I was discussing the issue of buyer's agency with a principal of a real estate firm on STT and I was informed that unlike the mainland, in the USVI all agents still have a primary fiduciary responsibility to the seller. All USVI real estate agents will assist buyers, but they represent the sellers i.e. they are paid a commission by the sellers and have a fiduciary responsibility to the sellers."”
dntw8up, You were misinformed. The buyer agent option is available here. All agents do not have a fiduciary responsibility to the seller. Who pays their commission has nothing to do with it.

dntw8up SAID
“"An agent cannot have a fiduciary responsibility to both a buyer and a seller."”
Sure they can, but they will be acting as a dual agent. A dual agent represents both the buyer and seller. If an agent represents a buyer who wishes to show a listing held by the agent or the agents firm they are acting as a dual agent, and must disclose this to both the buyer and seller. This is not a good practice as it is similar to a husband and wife using the same divorce attorney.

dntw8up SAID
“"buyer's agent" i.e. has a fiduciary responsibility to the buyer rather than the seller. This duty obligates a real estate agent to act at all times solely in the best interests of whomever he or she represents to the exclusion of all other interests, including the broker's own self-interest!"”
Correct, and this is where not listing properties comes in. The difference between an exclusive buyer agent and a buyer agent is that the Exclusive Buyer Agent does not list property and the Buyer Agent does. Assume you are a buyer agent and are showing two $500,000 properties. One you listed and one you didn't. If you sell the one you listed you get a $30,000 commission and if you sell the other you get a $15,000. Which one would you want to sell? Exactly. And even if you can forget about the extra $15,000, you are obligated to the seller to try your best to sell their property. But that property might not be the best property for the buyer, therefore It is a conflict of interest.

Carl Gotts SAID
“"Our real estate agency Gotts & Associates, Buyers Agent VI is the only Exclusive Buyers Agent in the US Virgin Islands and the only local member of NAEBA, the National Association of Exclusive Buyers Agents, www.naeba.org."”
Wrong on both of those Carl. I am an Exclusive Buyers Agent and a member of the National Association of Exclusive Buyer Agents.

Jane SAID
"”Roland Groder, one of the owners of REMAX St Croix , is THE ONLY Nationally Accredited Buyer Representative (ABR) licensed on St Croix. He was accredited by the National Association of Realtors in 2000 and is the only Realtor on St Croix who can sign a contract to work for and on behalf of a buyer."”
Jane??? What is a nice girl like you doing in a place like this. You need to talk to Roland or Joe. You do not need a designation to be a buyer agent and Roland is not the only agent who can sign a contract to work on behalf of a buyer. Where did you come up with that?

Alexandra Marshall SAID
""Typically, the agent working with the buyer has the buyer's best interests in mind.......""
Why wouldn't a buyer working with an agent ALWAYS want to have their best interest in mind?

Alexandra Marshall SAID
""If you find a property your first day out that you absolutely love, go ahead and put in an offer. Most purchase and sale agreements allow time to review your selection and back out of a contract if there turns out to be a problem with it. You can continue to see other properties available and if something better shows up, you can usually change your selection.""
This seems a little unfair to the seller. Isn't that who you, as a listing agent, represent? What happened to good faith?

Alexandra Marshall SAID
""All agents are officially representing the seller if the seller is paying the agents on both sides......
However... due to the seller's listing agreement with the listing agent, the seller will still pay the full commission, even if it all goes to the listing agent and none to the selling agent (buyer's agent). That means there isn't any additional bargaining room to bring down the price so that the buyer would be better off paying his agent's commission on top of the purchase price.""
Who is paying whom has nothing to do with who you are representing. I have never had (to my knowledge) a transaction I was involved in where the listing agent was paid the full commission. Sellers are not stupid. They are not going to want to pay a full commission to a listing agent if a buyer agent brings them a contract (although you are correct in saying that the listing agent has a right to). Sellers don't care who brings an offer, they want to sell their house. But some listing agents would prefer not to have buyer agents around, and seem to forget that it is not about them, it is about the buyer and seller. If the listing agent wants to double dip, the market would soon come to bear on this practice. I get paid a commission from the transaction on behalf of the buyer. The Buyer could reduce the amount offered and pay a commission directly, but it is the same net to the Seller. The transaction happens all at once. It is not like the seller gets paid and the agent goes to his house and picks up a check a couple of days later. Who is actually paying this commission is debatable. Both commissions usually come off the sellers side of the closing statement, but the buyer is the only one who brings any money to the table. And I think I could make a good case for the buyer being the one who pays the listing agents commission.

Alexandra Marshall SAID
""Chuck Ulrich advertises as a buyer's agent, but he does not sign contracts with buyers to represent them solely and does not charge the buyers a fee/commission. He is paid by the seller as are all the other agents. In a conversation I had with Mr. Ulrich the week he left Mr. Gott's company, he told me that he did not sign contracts with buyers he worked with to act as their exclusive agent and that he took his fee from the seller as other agents do... yet considered himself to be, and advertised as, a buyer's agent"".
I do not just advertise as a buyer agent, I am one. One way you can tell who is and who isn't is to ask the agent how many properties they helped buyers find while looking out exclusively for their interests. I helped buyers find over 20 properties this year, and I will give (with their permission) the contact information of all of them to anyone who is interested in finding how they felt about the service.
I never told you that I did not sign contracts with buyers. But to be a buyer agent, you do not have to sign a contract with a buyer. You have to give the buyer your loyalty and honesty, and disclose this representation to both the buyer and seller. By the way, A listing agent also has an obligation to disclose to a buyer that they represent the seller, and provide written confirmation of that disclosure to the buyer not later than execution of a purchase agreement. How often is that done around here?
I do not take the sub-agent commission. I do typically take what is offered (the percentage) as the sub agent commission. As a buyer agent you cannot ask for the sub-agent commission as it will be interfering with the listing agents listing. But how I get paid and do my contracts and agreements does not involve you and I suggest you take a look at the Code of Ethics (specifically Article 15).

In developing exclusive buyer agency here, I have found that there are lots of good agents and agencies on St. Croix. As a buyer agent you get to see who is working for the seller and transaction, and who is not. And just because an agent is working for the seller, it doesn't mean that they won't treat a buyer fairly. In most cases they will simply want to, and they are also obligated to do so. It is a question of who they owe their loyalty and fiduciary duty to. Does it matter? I have had transactions where it didn't matter, and transactions where it mattered a lot. And most transactions fell somewhere in between.

Chuck Ulrich
Buyer Agent St. Croix

Dear Chuck,
Excellent job in responding to Ms. Marshall. When I made my initial post, I didn't realize that last Friday you had filed the paperwork to open your own real estate brokerage. Congratulations and good luck. Carl

Chuck, I do agree with the vast majority of your response. The buyer's agent versus the seller's agent and how it is practiced in the USVI is extremely different than how it is practiced in Washington State where I sold real estate before relocating to STX. In Washington, it is understood that the agent who brings the buyer to the table is representing the buyer, while the listing agent is representing the seller, and the standard form contracts provided through the MLS there already include that wording. I, too, was confused by Jane's statement that Roland was the only agent on the island who could legally sign a contract to act as a buyer's agent.

Since starting to work in the industry on STX, I have had it hammered into me by agents, brokers, and lawyers that the way the USVI interprets agency law, all agents whose commissions are distributed at closing from the seller's proceeds are supposed to be representing the seller. Most of the time when I am working with a buyer, I know nothing at all about the seller and have no direct contact with them. My direct relationship is with the buyer and I work to help them locate a property that suits their needs, as I am sure you do as well. It is in the seller's best interest for the agent working with the buyer to make sure that buyer is comfortable with their selection and not feeling taken advantage of. If the buyer's needs are met, fewer deals fall apart.

I'm not sure why you objected to my statement that buyers have a right to back out of a contract if there turns out to be something wrong with a property... and that it's OK to continue looking at more properties after submitting an offer on their first selection. Up until all the contingencies clear on a contract, the buyer might still need a fall back position, as transactions do fall apart sometimes for various reasons. There is more than one seller with a property listed in the MLS and presumably some of them would love to receive an offer on their property if the buyer's initial choice falls through.

I was not attacking you or your position as a buyer's agent. I have only heard good things about the work you do. You did tell me in an email last May that you used to have buyers sign a contract with you as their agent but that you no longer do unless they specifically request one... and that you take the sub-agent commission rather than a fee from the buyer. The thread had been discussing who pays commissions for which kind of agent in the USVI. You act as a buyer's agent and receive a commission from the seller. As long as agency disclosures occur, this is how it's done in most transactions all over the USA. I found it odd that the USVI has a different interpretation of how to define the agent who works with the buyer than what I was used to in Washington.

The practicality of working "with" a buyer versus "for" a buyer is complex. I believe that virtually all agents working with a buyer develop a relationship with that buyer that ultimately does protect the buyer's interests. If the buyer is unhappy, a deal isn't going to happen. So being fair with the buyer is also in the seller's best interest. Bottom line is that real estate transactions work best when nobody is being taken advantage of and dealings in all directions are negotiated fairly and result in a contract that both buyer and seller feel they can live with. The seller wants to sell and the buyer wants to buy. Real Estate agents are matchmakers who line up properties compatible with a buyer's needs.

I would like to join Carl in congratulating you on your new brokerage. I wish you much success.

I can throw in my $.02. As someone who has bought and sold a lot of real estate and taken the courses to become a broker (although never actually went through with it) IMHO a buyer's agent is not necessary unless you cannot physically be there to look the property or don’t have time, etc.

There is no greater risk to the buyer without a buyer’s agent - the seller's agent still has to meet a minimum standard of care in disclosing anything they know about the property, even if they still retain a fiduciary responsibility to the seller. In my experience, a buyer’s agent adds little value to the sale, except if as a buyer you do not have time to run around and scope out lots of properties or choose to remain uninformed about the needs and challenges of the transaction. An educated consumer with a certain degree of confidence can and should be able to shop for real estate, and with the assistance of a closing attorney (which you should have anyway), complete the transaction solo.

With or without a buyer’s agent – “Caveat emptor”

Things that make you go hmmm???:S

I noticed that most of this thread is from 2005

OK, the post I responded to, that didn't make any sense and had a link to a virginia real estate page (that I did NOT open), is gone. It was posted at 2:00 AM, today. I assume Islander pulled it because it was some scam. I don't know.

I reported all the posts by that person. None of them made sense and were obviously hokey.

I reported all the posts by that person. None of them made sense and were obviously hokey.

I reported them all too. It was comment spam, which can be recognized because it was a brand-new user, and it contained a web link. Additional clues: They dug up ancient threads, and the text and link had low relevance. That person only signed up to post a link to some web site that he/she is promoting.