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Exclusive Seller's Broker Struggles With New Business Model
by Blanche Evans, Realty Times

Boulder, Colorado broker Betsy Miller is the only exclusive seller's
broker in Boulder County, and possibly the whole state. She says
other brokers think she's crazy to try exclusive representation,
considering that the way has been nicely paved by designated
brokerage statutes for brokers to work both "sides" of the
transaction as non-fiduciaries.

But to Miller, designated brokerage doesn't work. The definitions are
confusing, and the conflicts of interest are too apparent. Under
Colorado's law, all licensees are brokers, and can offer
fiduciary-level service or transaction-level service, and both forms
of service in the same transaction to either side. A broker can be a
seller's or a buyer's agent and a transaction broker to the other
party, but if they want to close a deal, the broker can alter
fiduciary-level service to transaction broker-level service by
presenting this form to his or her former client.

"How can you represent someone as an exclusive seller's agent, and
then later tell them that now that you brought the buyer you are only
representing them as a transaction broker?" says Miller of the
dilemma. "That's a betrayal of trust. You were their agent, and now
they don't know what you are. I just can't do it. I prefer to tell
buyers that I can't help them. I'll refer them to a good exclusive
buyer's broker."

Is a clear conscience worth making less money?

Miller says she is sleeping better at night, but she admits that
principles don't come cheaply.

As an exclusive seller's broker, Miller has lost two income streams -
one from buyers, and another from sellers she's represented as a
fiduciary who want her to represent them on their next purchase.

She has no blueprint to follow. As an independent working out of her
house, she is too small to be a threat, but finds it that much more
difficult to differ from traditional practices. "If I say there is a
conflict of interest," says Miller, "that's like saying everyone else
has the conflict."

Anyone on the cutting edge is bound to get a little bloody, and
Miller is no exception. She's had the occasional threatening phone
call to give up her exclusive status, and some brokers have simply
told her that they don't understand the point she's trying to make.

Others have told her they believe that her method is how real estate
ought to be practiced and will be practiced ten years from now. Its
main strength is that it eliminates confusion, something Miller says
the Colorado real estate commission has failed to accomplish with its
real estate statutes that change almost yearly.

"It's getting ready to change again," laments Miller. "Someone files
a lawsuit, and they just reach for another band-aid. I don't think
anyone is really thinking this through."

Miller decided that she had had enough when she found that she simply
couldn't explain the brokerage laws to consumers satisfactorily. One
client, a buyer who also happened to be an attorney, hit the roof
when Miller suggested that if she were to buy one of Miller's
listings, Miller would have to modify their agreement to
transactional brokerage. Miller took classes to try to sort it out,
taught by an attorney, but still couldn't get the relationships to
reconcile in her minds or those of her customers and clients.

"The buyer still thinks you are representing them, even when you
aren't," says Miller. "That's where the conflict comes in."

"We present the buyer or seller with a sheet of paper that the real
estate commission authorizes us to give to them," says Miller, "but
they don't have to sign it. We ask them to, for our records. Some
brokers will ask them if they want the broker to act as a fiduciary
client broker or a transaction broker, to be an advocate or not.
Later, you can go back to your client and tell them that you are now
acting as a transaction broker. Some say absolutely not. Then what do
you do? Now you are standing in the way of the buyer and seller. It's
very confusing, and it confuses the consumer."

But advocacy isn't as clear as it should be, either, Miller has
learned. "I've had sellers I've worked with ask me to represent them
as buyers. They tell me they 'won't tell anyone.' They don't
understand."

So Miller is starting to refer these former sellers and buyers who
contact her through ads and the Internet to exclusive buyer's
brokers. She realizes that if she is going to make up the lost income
of not being able to collect from both sides of the transaction that
referral fees will make up a good bit if not more in the long run.

The exclusive buyer's brokers love the business she's sending their
way, and Miller is positioned to get their referrals as an exclusive
seller's representative.

"I don't try to be adversarial between the buyer and seller," says Miller.

So why take the less traveled path of seller agency?

"I think I m good at negotiating and pricing property to sell
quickly," says Miller. "I analyze listings, prices, and see many
properties to see what's going on, and I always keep ahead of the
trends - not behind. I don't like stale listings - they create lower
property values, and buyers always want to know how long a property
has been on the market, and they offer less."

Her unique service advantage is staging. "I was former director of
the Boulder Museum of Contemporary Art, so I have an art background.
I used to buy properties to fix them up and sell them, and I learned
that sparse furnishings made them sell faster and for more money. As
a matter of course, I stage all my listings by using the seller's own
furnishings or bringing in other furniture and accessories to bring
that property to another level.

"I give a personal approach to my listings."

Miller says she feels good about becoming a specialist. "When you
need a gynecologist," she says, "you don't go to an ears, nose and
throat doctor."

Published: September 5, 2003