Must Buyer Brokers Be “Exclusive”?

For several years there has been a debate within real estate regarding who or what may use the term “EBA” or “exclusive buyer agency.” At first this may seem like an obscure dispute, as in “who cares?” But in fact, the matter has importance for buyers, sellers, and the brokers who work with them.

On one side we have those who argue that only licensees who never take listings are properly entitled to use the term “EBA.” On the other side, we have those who contend that the term “EBA” can also be used by licensees who both represent buyers and represent sellers — as long as such representation does not occur within the same transaction.

For a very long the practice in real estate was to have brokers represent only sellers. Why? Because at the end of a transaction the buyer got the property and the owner got cash — money that could be used to pay brokerage fees.

The result was that you routinely had a situation where there was a broker who listed a home, and a broker who worked with a buyer, and they both represented the seller.

Why did the broker who worked with the buyer have an obligation to the seller? Because when the home was listed, the owner and the listing broker established a commission arrangement and the broker became an agent of the seller. The broker who assisted the buyer obtained permission to sell the property by becoming a “subagent” of the listing broker.

In the 1970s, brokers such as James B. Warkentin of McLean, VA began doing something different: They started to identify themselves as “buyer brokers” and began representing purchasers. Rather than being “sub-agents” of a seller, they became agents of the purchaser. Instead of working under the authority of the listing broker’s contract with an owner, buyer brokers worked directly for purchasers.

While it may seem obvious today that buyers and sellers have conflicting interests and thus benefit from separate representation, at the time the concept of buyer brokerage was regarded as revolutionary — and threatening. Some listing brokers refused to show their properties to buyer representatives, while others were entirely perplexed by the notion.

All of which gets us back to the term “EBA.”

Within real estate are those who believe that use of the term “EBA” should be reserved for licensees who only represent purchasers and never take listings. On the other side, we have those who argue that the term “EBA” can be used by licensees who represent buyers one day and sellers the next.

Despite loud, lengthy, and repeated efforts to dance around the issue, the term “EBA” has not been copyrighted or trademarked. Period.

  • If “EBA” is not trademarked and not copyrighted, it’s not owned by anyone. It’s in the public domain. No association, coalition, or cabal can control the use of this term. (It may be possible for a state regulatory body to govern the use of a given expression, as — for example — use of the term “no cost” financing is regulated in California. Brokers should speak with attorneys for specifics.)
  • If “EBA” is not trademarked and not copyrighted, it does not matter that other terms have been trademarked and copyrighted. They are not the issue.
  • If “EBA” is not trademarked and not copyrighted, then there can be no test of purity, no standard to determine who is most virtuous and who is not, and no penalty for the alleged mis-use of the term.
  • If a group or individual has attempted to trademark or copyright the term “EBA” and failed, then it is not trademarked or copyrighted.
  • If “EBA” is not trademarked and not copyrighted, then any licensee can use the expression “EBA” anyway he or she elects.
  • If “EBA” is not trademarked and not copyrighted, then to say that a licensee cannot use a term which is manifestly public may well raise cries of restrained competition.

There have been good and honorable folks on both sides of this debate, but it’s time to move on and not be distracted from the central question which concerns consumers: Will you represent my interests and seek the best possible price and terms for me in my transaction?

Published originally by Realty Times on October 19, 1999 and posted with permission.

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