Ask most people about buyers’ agency and they’ll say the specialisation is a relatively new industry phenomenon. But, in fact, buyers’ agents first popped up in Australia as far back as the mid-1970s. Here’s how this unique scope of practice has established a foothold in the industry and is now going from strength to strength.
In so many aspects of our lives we engage professional advisors to represent our interests.
When planning to secure our financial future, we talk to a financial advisor. When writing our will, we seek advice from a solicitor. When tax time comes around, we go to an accountant to ensure our return is maximised. And when we sell our home, we engage the services of a real estate agent to ensure we achieve top dollar.
So why is it different when it comes to buying a property?
“Buying a property, whether as a home or an investment, is one of the biggest and most significant transactions most people will ever undertake,” Nick Viner, Principal at Buyer’s Domain and Chair of the REINSW Buyers’ Agents Chapter Committee, said. “Even so, it’s largely done without professional representation. While buyers’ agents have long been popular in the United States, Canada and the United Kingdom, it’s been much more of a slow burn in Australia.
“When you think about it, it’s quite a curious situation, because there’s a real imbalance at play.
“The vast majority of people only buy property irregularly, but they find themselves in a situation where they’re dealing with a seasoned selling agent who negotiates for a living. The scales certainly aren’t balanced.”
While buyers’ agents aren’t the norm in every real estate transaction, their popularity is growing as more and more people realise the value they bring to the table.
“The number of buyers’ agents operating in New South Wales has increased hugely in recent years.All you need to do is look at the ever-increasing numbers of members of the REINSW Buyers’ Agents Chapter, as well as the REBAA, to understand that this scope of practice is here to stay and is of growing importance.”
– Brendan Jack, Buyer’s Service for Real Estate
Rise of buyers’ agency
Buyers’ agency had its genesis in Australia in the mid-1970s, when a small number of buyers’ agents went about their work in Melbourne with little fanfare and no publicity – and this is how the fledgling specialisation quietly trundled along for almost 20 years.
It wasn’t until the early 1990s that buyers’ agents began to stretch their legs and step into the public domain. At the same time as leading Melbourne buyers’ agencies Morrell & Koren and Wakelin Property Advisory came to prominence, the specialty crept over the border into New South Wales.
Among the very first buyers’ agents to pop up in Sydney, Brendan Jack established his agency, Buyer’s Service for Real Estate in 1993.
“We opened our doors in January 1993,” he said. “It was also in 1993 that Janne Sutcliffe started her business, Change of Address. Together, we were the first buyers’ agents to operate in Sydney and, indeed, in New South Wales.”
Brendan admitted that becoming a buyers’ agent happened quite by accident.
“I sold my real estate agency in the Sutherland Shire in 1992, after operating it for 23 years,” he remembered. “At the same time, I also had a valuation practice in Artarmon and was doing a lot of work for solicitors in family law matters relating to property disputes. I relocated my valuation to the CBD and solicitors started asking if I could help their clients buy a property and I was happy to do so.
“That’s where it all started. These clients had identified the property they wanted to buy. I came in and did all the due diligence, and then worked out the best way to negotiate the purchase. Soon after, a young woman asked me to find a property for her in North Sydney, and this was my first full end-to-end service.”
Brendan confessed that, at the time, he wasn’t even aware that the term “buyers’ agent” existed. But, having enjoyed the buying experience so much, he decided to delve deeper and find out if others were providing a similar service.
“I discovered that buyers’ agents were operating in Melbourne and, indeed, internationally,” Brendan said. “I headed off to the United Kingdom in 1994 and then to Canada in 1996 to learn how buyers’ agency was working there.
In those early days, with buyers’ agency being a largely unknown concept for consumers, Brendan’s business operated purely on referrals – and, in fact, the same can be said through to today.
“In our business, we’ve never had to ‘sell’ the concept of using a buyers’ agent,” he said. “By the time our clients come to us, they already know what we do and have pretty much made their decision about whether to engage us.”
Brendan said that Australian buyers’ agents have grown up in a similar way to the industries in the United Kingdom and Canada, but as a polar opposite to the industry in the United States.
“It’s the norm in the US for both sellers and buyers to be represented in the transaction and their commissions are higher and structured differently, in that they are split between the agent acting for the seller and the agent acting for the buyer,” Brendan explained. “In Australia, as buyers’ agents, we’re paid a fee for the service level we’re providing.”
Growing in numbers
Over almost three decades, the buyers’ agency scope of industry practice has grown to maturity.
“The number of buyers’ agents operating in New South Wales has increased hugely in recent years,” Brendan said. “All you need to do is look at the ever-increasing numbers of members of the REINSW Buyers’ Agents Chapter, as well as the Real Estate Buyers’ Agents Association, to understand that this scope of practice is here to stay and is of growing importance.”
Both Brendan and Nick agreed that the backgrounds and skillsets of those working as buyers’ agents are diverse.
“There are buyers’ agents who have come from another specialisation within the real estate industry,” Brendan said. “And there are others, like Nick, who started out in entirely different sectors. Each bring a unique outlook to their role.”
Nick was working as a property solicitor, but it was his own house search, and those of some friends, that resulted in a lightbulb career moment back in 2009.
“I’d come out from the UK and was looking for a property to buy,” he said. “I was doing all my own research and going to lots of inspections. At the same time, I was talking to friends who were also looking to buy. They were busy, they weren’t as interested in the property search experience as I was, and they didn’t understand the legal side of things – so I started helping them.
“In two instances, I found the perfect properties. From the search through to negotiation and then helping them close the deal, I loved it – much more than my day job as a lawyer! I followed my passion and here I am today.”
With more buyers’ agents now operating in the market, Nick added that there’s a noticeable move toward specialising in particular geographic areas.
“When I first started as a buyers’ agent in 2009, the tendency was not to specialise in one area,” he said. “One day you could find yourself buying a property in Sydney’s Eastern Suburbs and the next day you’d be on the North Shore or in the Inner West.
“But now, buyers’ agents are definitely finding their own niches and focusing on particular areas.”
Nick conceded that buyers’ agents are aplenty in Sydney, but pointed out that they are also now finding a foothold in areas further afield.
“Buyers’ agents are popping up in other regional hubs, as Sydneysiders are casting their eyes towards areas such as the Central Coast and Southern Highlands,” he said.
“There’s a distinct difference between someone acting as an exclusive buyers’ agent and someone working for a selling agent who is charged with nurturing buyers. By defining a ‘buyers’ agent’ in the Act, any confusion regarding the capacity in which the agent is acting will be alleviated.”
– Nick Viner, Buyer’s Domain
Coming of age
While buyers’ agency has been around for almost 30 years in New South Wales, you might say that it came of age in 2014.
“REINSW and the Buyers’ Agents Chapter Committee had lobbied for many years for official recognition of the role of buyers’ agents in the transaction,” Nick said. “Changing the name from ‘Contract for Sale of Land’ to ‘Contract for the Sale and Purchase of Land’, and including the name and contact details of buyers’ agents on the front page of the contract, was a real achievement for us.
“It’s official recognition of the importance of our role in the transaction and acknowledges the value we bring to the process.”
Nick said the next step is for a clear definition of “buyers’ agent” to be included in the Property and Stock Agents Act 2002.
“There’s a distinct difference between someone acting as an exclusive buyers’ agent and someone working for a selling agent who is charged with nurturing buyers,” he said. “By defining a ‘buyers’ agent’ in the Act, any confusion regarding the capacity in which the agent is acting will be alleviated.”
The future is bright, as awareness and recognition grow, both in the industry and among consumers, of the valuable role buyers’ agents play in the real estate transaction.
“Selling agents understand and appreciate what we bring to the table,” Brendan said. “It goes without saying that not all buyers are genuine or ready to buy. Some are serial time wasters. Others don’t have their finances sorted. And then there are those who are unrealistic in their expectations.
“Buyers’ agents’ clients are serious and committed to the process, otherwise they wouldn’t have engaged a buyers’ agent. They’re motivated and ready to transact – and what selling agent doesn’t want that!”
Equally, Nick added, consumers are recognising the value of engaging a buyers’ agent.
“In the past, a lot of people had the perception that buyers’ agents were just for the wealthy,” he said. “But nothing could be further from the truth. Increasingly, we’re working with people from a wide range of demographics – first home buyers, up-graders, down-sizers, investors, commercial buyers and developers.
“More and more, people are recognising the value we offer. They see us as professionals who provide a professional service.
“And having agents on both sides of the transaction can only have a positive impact on consumers’ opinions of the real estate industry.”