There’s been a bit of press of late about the rise and rise of buyers’ agents. In fact, I’ve been asked for comment for numerous stories on the topic over the past few months. Of course, given the heat in the property market over these last few years, it should come as no surprise that using a buyers’ agent is now something that many people are considering in order to give them a competitive advantage.
On one hand, I think this is fantastic! And on the other, I really hope that consumers do their homework because not all buyers agents are equal.
Through my role as co-host of Location Location Location Australia, I have helped raise the profile of buyers’ agency as a profession. I love what I do in my day job as Principal of Good Deeds Property Buyers: I truly believe that our clients buy better with our help than they would on their own. Through my involvement with REBAA I have met many like-minded professionals across the country and I think it’s fabulous that property buyers can get access to such expertise.
So here’s where I am not so enthusiastic. Unfortunately, it’s really easy to become a buyers’ agent. You might be surprised to find that you can get a license online within a week, then set up a home office and offer your services to property buyers without ever having worked in the industry. This really worries me, especially now, as the demand for buyers’ agents is on the increase, more people will be clambering over the ease in becoming qualified.
If you are thinking of using a buyers’ agent, I wholeheartedly encourage you to do so – and do your homework before signing an agreement.
Questions to ask:
- Appropriately licensed? (check the OFT in your state)
- Who trained them? (have they been mentored?)
- Who pays them? (are they exclusive or do they take vendor/developer kickbacks?)
- REBAA member? (min 2 yrs experience + exclusive BA + abide by Code of Conduct)
- Due diligence process? (inhouse or outsourced, what is included + who pays?)
- Conflict of interest policies?
- What are their personal values?
- Do they have the resources (one-man-band or team?)
- How long have they been in business?
- Case studies and testimonials? (evidence?)
- Look for value (the price differential can be considerable – make sure you know what is included)
When I started out as a buyers’ agent some 10 years ago, I’d already had 6 years experience as a sales agent and thought I knew pretty much everything I needed to know. I look back now and I am amazed at how far I have come! Back then the industry was very immature and there were few mentors around, I had to learn everything from scratch, create my own systems and procedures, determine what due diligence was required, etc. I set up a home office and managed a handful of clients while I worked out the best way to advise them.
10 years on nothing much has changed! There is no clear path to becoming a buyers’ agent, there is still a dearth of recognised training programs, no industry benchmarks, no established procedures. So you can see why it’s important to choose a buyers’ agent (or agency) who has been in business for a while and has the experience and tools in place to protect your interests.
Now that I have a team working for me, I can also clearly see the limitations I had when working as a one-man-band. For starters, I had nobody to bounce ideas off, nobody to play the “good cop” to my “bad cop” when negotiating with agents, nobody to work on due diligence while I was out inspecting properties, nobody to help me cover 5 inspections that are all open from 11-11.30 on a Saturday… the list goes on.
When you work with a team your industry contacts are leveraged. I might not know an agent as well as one of my colleagues – his insights and introduction could give an incredible advantage to our client if there’s a race to buy pre-auction. Or I could have a great relationship with an agent who tells me about an off-market property that would perfectly suit the client of another buyers’ agent in the team.
For us, our team meetings are collaborative and often result in outside-the-box solutions to offer our clients. And the team challenges each other to make sure we are relentless in our quest to help our clients to buy the right property. I liken it to the difference between listening to a singer unaccompanied and then backed by great musicians. The first might be pretty good, but the band is far better.
I’d never go back to the days of being a lone ranger working from home. I really believe that I buy better by being part of a team – and so do my clients.
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Good Deeds buyers tips are intended to be of a general nature. Please contact us for advice that is specific to your individual circumstances. You may also need to get advice from other professionals such as an accountant, mortgage broker, financial planner or solicitor.