Israel said his company's exclusive buyer-broker approach saves buyers money. While most real estate agents make money on commissions, Israel's customers may pay by the hour or by setting a flat fee, often less than the usual agent's fee of 6 percent. Israel, who has a business degree from the University of Maryland, maintains that with this system, the agent has the same incentive to sell a lower priced house as a higher priced house. Customers can also choose to pay Israel on an hourly basis. That's what Jackie Confrey did just a few weeks ago when she bought a house in Olney.
Sellers sometimes offer bonuses in an attempt to get agents to show certain houses ahead of others.
But Israel said that when he sells a house with a bonus commission, that bonus is credited to the client. Realty agents were initially resistant when exclusive buyer- brokers came on the market, said Forrest Pafenberg, economist in the Washington office of the National Association of Realtors. The issue was clarified when consumer groups led by Ralph Nader, as well as some realty groups, successfully pressed many states to pass laws requiring that real estate agents who represent both buyers and sellers disclose that fact to customers, Pafenberg said. In addition, the National Association of Realtors now requires its 720,000 members to disclose who they represent in a real estate transaction, Pafenberg said. In fact, most realty companies still represent both buyers and sellers according to a recent poll by the National Association of Realtors, which found that 70 percent of those polled represented buyers and sellers.