Like sellers agents, many buyers agents work on a commission based scale. The more money a buyer spends the more money the agent stands to make. This gives less than reputable agents the opportunity to generate false bids and encourage the buyer to overpay.

To determine what buyers can do to protect themselves, we recently interviewed Barry L. Nystedt, the current President of MassBuyerAgents.org--one of the oldest buyer agency groups in the country. Nystedt was one of the earliest pioneers of residential buyer brokerage in the Boston area, starting in 1989.

We also spoke with buyer representative Thomas A. Early, who was the former president of the National Association of Exclusive Buyer Agents (NAEBA), as well as Renee Burrows, a licensed Las Vegas Realtor with 20 years experience.

Here is what they had to say in response to our questions:

An agent does not normally get paid unless a buyer buys, and gets paid more if a buyer pays too much for a home. Is there any way to align the self-interest of a buyer's agent with that of the client?

Nystedt: Yes, the short answer is the use of flat fees instead of percentage commissions. Many specialized buyer agents whose firms choose not to represent the seller in the same purchase will establish flat fees with their consumer clients that are not based on the purchase price of the home. The offered co-operating commissions available in the transaction from the seller's side can be collected and than reconciled directly with the Client based on their Buyer Agency Agreement. Retainer fees as part of the Buyer Agency Agreement can help offset the anxiety an agent may feel on whether the buyer is serious about purchasing or will just consume the agent's energy and time with no return at the end of the road. That anxiety can lead to a lot of sales pressure from an unprofessional agent. Entering into a good Buyer Agency Agreement itself can also be a hedge in aligning the buyer's agent's interest with that of the client. The agreement should address the expectations of the consumer and agent with realistic time frames and price ranges.

Early: The first thing needed would be a promise of fidelity. The buyer needs to hire an Exclusive Buyer Brokerage who does not have the conflict of dual agency and will promise to represent the buyers best interest in all things at all times. If the buyer is worried about the fee being percentage based, he can enter into an agreement for a flat fee, hourly fee, or a flat fee plus a percentage of the savings off of the list price. There are many ways to skin this cat, but making sure your AGENT (Brokerage) will remain by your side no mater which home you choose is a good start.

Burrows: Working with a buyer's agent who has been in the business for awhile and who is interested in future referrals would be the best type of buyer's agent to work with. One who isn't in a hurry, one who realizes the magnitude of the transaction for the buyer and one who puts their commission aside to work in their client's best interest. I do feel that there are too many hard core sales agents out there who are just out for the next commission check and do not care what kind of payment and pain their client may experience after a purchase and that is just plain sad.

In addition, every buyer should request a CMA (comparative market analysis) prior to putting an offer in on a home so they know they are paying the best price and the best value they are looking for! With the advent of www.zillow.com and other online home valuation tools, it is getting harder and harder to pull a fast one on the consumer. It doesn't necessarily mean those tools are accurate, I am just saying they exist.

Is there any sure-fire way for a buyer to know whether or not they are being given sound advice?

Nystedt: No, I don't think there are any sure-fire routes to anything in life. The buyer needs to use his/her best consumer instincts and ask all the questions they have in order to get clear on the reasons behind specific advice. If it does not feel right, if the agent cannot communicate in a way the consumer understands than the consumer should seek out a second opinion. In getting a second opinion, the consumer should be willing to pay directly for professional advice from another buyer agent or a real estate attorney for legal matters. It may cost them a little out of pocket to avoid a real disaster on one of their biggest investments in their life time.

Early: Sure fire? Not really. Best bet would of course to speak to buyers who have used the Brokerage in the past (referral). Years experience will help and of course using someone who specializes in buyer representation such as an Exclusive Buyer Agency or Brokerage takes you a long way down that road.

Burrows: Unfortunately not, unless they are internet savvy and there is an abundance of information about real estate on the internet - including most state real estate laws. There is too much law and theory in the average real estate transaction so unless the buyer is a sponge, there is no way to absorb and understand all of that information at once. If a buyer feels something is fishy or not right, they can contact their agent's broker. Complaints can be made to the agent's local board or division. Unfortunately, the average consumer does not know this so the average buyer's agent never feels their license is on the line if they do something unethical or illegal.

Are there any other ways a buyer can make sure there best interests are being protected by the agent?

Nystedt: Avoid any agent who acts like a sales person. You want an objective professional consultant that will troubleshoot the potential purchase, and will give you the reasons not to buy as well as the reasons to buy. If the buyer does not have that confidence, he/she should find another agent. If your buyer agent's company may potentially also represent the seller of the home you want to buy, then make sure you have an escape clause in the buyer agency agreement so that you can hire another buyer agent from another firm that will be on your side 100% without any connections to the seller's side.

Early: Again, check their references. Most people know this is sound advice but fail to ether ask for the reference or fail to do what needs to be done to make contact with them. I have a policy which allows a prospective buyer to go to my files of closed homes and pick two or there files without my intervention. I will then check with these past clients to make sure they will be comfortable talking to the prospective buyer and get the new buyer the information necessary for contact either phone or email address. Most of my buyer are very impressed with the idea of picking past clients at random rather that having me pick who they will talk to.

Burrows: By law and theory they SHOULD be protecting their client's best interests. There is a code of ethics every Realtor must adhere to. Again, on the internet there is a multitude of real estate advice, but a buyer must also wade through what is true and what is false. If they are already in an agency relationship (with a buyer's brokerage agreement) the buyer cannot seek advice of other real estate professionals. If a buyer is in an agency relationship they are uncomfortable with, again they can go to the broker to get reassigned to a new agent. A buyer should trust their instincts and ask a lot of questions. If they feel those questions are not getting answered in a timely or truthfully manner, then by all means it is time to fire the buyer's agent!

What advice can you offer to buyers who are looking for a qualified agent?

Nystedt: There are the typical qualifications like experience, credentials, personal referrals, professional referrals, activity in trade associations, etc. Don't forget the role of the real estate firm to whom the agent answers. Most of the real estate firms across the country now claim they can represent both the buyer and the seller in the same transaction, i.e. serve two masters. Dual agency situations like that should be avoided if at all possible; they are fraught with conflicting interests. Choose an agent and company that will not represent both seller and buyer in the same purchase. Look for an agent who is a member of MassBuyerAgents.org and/or nationally NAEBA, the National Association of Exclusive Buyer Agents. Also, beware of the 'one stop shop' that offers financing, title, moving, insurance, warranty, and other services. Remember, these are all profit centers for the firm and the charges are less likely to be the most competitive in the marketplace. Additionally, your confidential information may be circulating through the office and could also leak to the agent representing the seller of the home you want to buy, thereby undermining your ability to negotiate a fair price.

Early: Just as when you are selling a home, you should enter into a contract for representation when purchasing a home. Make sure the contract is not one which ties the buyer to the Brokerage, but does not tie the Brokerage to the buyer. Most traditional companies will have a contract with what I call a renege clause, which allows the Brokerage to move directly into Dual Agency. Dual Agency is an oxymoron; no brokerage can represent the best interest of both the buyer and the seller. One wants the lowest possible price on the best possible terms, while the other wants the highest possible price on the best terms. These are conflicting interests and one brokerage has no business being involved on both sides. Remember that agents who are affiliated with a brokerage represent the interests of the brokerage while the Brokerage is who you will sign a contact with for representation. Exclusive Buyer Brokerages or Agents do not take listings and therefore NEVER find themselves on both sides of the fence. They specialize in providing true fiduciary level service to the buyer and only the buyer.

Burrows: Interview your agent! Do NOT instantly go with the friend or relative agent. Make sure you are compatible with the agent you choose and that they are knowledgeable, patient and diligent enough to walk you through the entire process from the beginning to the close of escrow. Questions that should be asked:

• What type of experience do you have with buyers? (Not how long, agents that have been in the business for not very long can still be a good option!)
• What types of housing have you sold: New construction, Resales, Condos, Townhomes, Single Family Homes, High Rises (etc)?
• How would you describe the perfect buyer? (This is a loaded question to make sure they do not pander to you!)
• What can you tell me about mortgage products?
• What can you tell me about title insurance?
• What can you tell me about the escrow process?
• What is your availability for your buyers?
• What is your phone policy?
• Do you have an assistant?

So, what have we learned? Is there a way to align the self interests of an agent with those of a buyer? According to those we interviewed, it all comes down to the agent you choose. You want someone who is willing to work for you, willing to work on the pay scale you are comfortable with, and willing to represent you exclusively. And you need to remember, there are no guarantees.