We ask REINSW members which side of the debate they fall on.
Buyers’ agent at Buyside
There’s a saying that you make your money when you buy, not when you sell.
Buying well is fundamental to increasing your wealth as you build your investments in property.
Yet for all the steps involved in successful property investment, most investors will choose a DIY approach rather than engaging a professional buyers’ agent.
To shed some light on the profession, a buyers’ agent acts in the same capacity as a stockbroker does for the share market. If looking to buy shares, for example, people call a stockbroker for advice about the stock market – advice on the best strategy, help with executing the deal and even managing your portfolio.
A buyers’ agent will do the same thing in the property market.
A buyers’ agent can research ideal areas, locate suitable properties that are available through both public and private sources and they can also negotiate the best property deals on a client’s behalf.
It can be an extremely useful service for those who are time poor or simply can’t make it out into the market themselves. Engaging a buyers’ agent is effectively outsourcing the act of buying property to an expert.
In the meantime, clients can get on with their lives and spend that valuable time with friends or family, rather than spending weekends hopping from inspection to inspection or trawling the internet each evening looking for that perfect property. While many companies claim to work for the buyer, sourcing properties Australia wide at no cost, many of these services are driven by developers who need a selling channel to move their stock.
Buyers’ agents, on the other hand, get paid directly by the buyer which means that they’re looking after the buyer’s best interests.
Principal at Better Homes Realty
While there is definitely a place for buyers’ agents in some situations, I find that there is a great deal of inconsistency and many buyers’ agents are a hindrance from our side of the fence.
I see buyers’ agents being engaged by their clients to find them the right home, negotiate or bid on their behalf, or on many occasions to do both.
Buyers’ agents who possess negotiating skills can help their clients negotiate the best price with an agent in a private treaty situation, but how many homes are sold by private treaty today?
I love chatting about properties with prospective purchasers. Most properties are being auctioned now, so price conversations are difficult. I understand that buyers’ agents don’t want to go and see every single house, but many become very pushy trying to extract from us the future selling price.
We are finding a great deal of conflict and confusion where both the buyer and buyers’ agent contact us and we end up dealing with both. In most cases we are under the impression that we are dealing with two different people when in fact we are not.This maybe a tactic to see if we are giving the same information to both parties or the buyers' agent may not have their brief clear enough.
When buyers are coming from overseas or interstate, they can’t be here to view homes or know the correct value. It is also difficult for some professional couples who just don’t have the time to research new areas. Buyers’ agents provide an invaluable service to prospective buyers in this situation. These buyers need to be able to trust someone to research the area and search around and do the legwork on our behalf.
The next question is: are we becoming more like the US where everyone deals through a buyers’ agent and a selling agent? Will our market ever warrant this?
This article was first published in the November 2014 edition of the REINSW Real Estate Journal.