What is a buyers agent?
A buyers agent or buyers’ advocate is a licensed real estate agent who is procured by a prospective property purchaser to facilitate the acquisition of a property based on achieving the specific goals of the buyer. The buyers’ agent is tasked with sourcing, evaluating, appraising, negotiating, and securing property on behalf of their client.
What is the difference between a buyers agent and a sales agent?
A buyer agent represents the buyer in the purchase of property whereas the sale agent represents the seller in the sale of a property. A buyers agent is paid by the buyer of a property for the purchase of property and the additional services associated with the acquisitions whereas a sale agent is paid by the seller of the property for the service of selling the property. A ‘buyers agent/advocate’ who works within a sale agency will be motivated to push properties that the agents in the sales agency have listed for sale. They are less likely to gain access to off-market properties from other sales agents as they are in direct competition.
What does a buyer agent do?
Structuring a Brief
A buyers agent needs to understand what the buyer is trying to achieve. An understanding of the buyer’s goals, needs, and wants will help structure the foundation of their ‘Buyer Brief.’ An analysis of their budget, ideal locations, and property specifications will help determine whether their brief is achievable and realistic. If not, a buyer agent can suggest changes and compromises to the brief to calibrate an achievable buyer brief that meets the buyer’s expectations. The buyer should detail exactly what they expect from the buyers’ agent. In return, the buyers’ agent should be able to confide in the buyer about what they can provide to the buyer.
Search
A buyers agent will be able to uncover the full spectrum of properties that are available for sale. This includes off-market, pre-market, and on-market properties that meet the buyer’s brief parameters. These properties are sourced through their network of real estate professionals and sometimes directly with vendors. An agent is searching every single day of the week and through the daily process of talking with buyers and sellers. They find opportunities that most buyers who only rely on realestate.com.au, Domain, and agent database email blasts don’t see for days sometimes even weeks.
Calibration
Properties that suit and within budget will be short-listed and sent to the buyer for review. The buyer will choose which properties are worthy of an inspection. The buyer will select the properties that they would like to inspect. The buyers’ agent will organise a private inspection if required and then accompany the buyer to inspections. The buyers’ agent will draw attention to any issues, and highlight any opportunities with the property that may be overlooked. Ultimately it is up to the buyer to decide if this particular property suits them. This activity is repeated until a property is found.
Due Diligence/Evaluation
A buyers agent will be able to provide the buyer with information regarding any potential skeletons in the closet which could affect the enjoyment of the property. This can include current flight paths, potential flooding etc. They should accurately analyse the likely selling price of the property based on all factors influencing the sale and be able to justify their analysis. The problem of underquoting should no longer be an issue for the buyer.
Project Management
The buyers’ agent will project manage other third parties such as solicitors, building inspectors, and strata inspectors, to ensure the seamless process of exchange preparation. The buyer should be able to rely on the agent’s extensive network of professionals to provide comfort that the property meets their expectations. If the buyer would like to know the cost and time frames for a kitchen renovation, they should be able to call the right people to provide the right advice.
Negotiation
Being a professional in the industry, buyer agents gain access to information not privy to the general public. An experienced buyer agent should be able to provide you certainty in the negotiation process and revert the power back to the buyer. Through helping them understand the likely roadblocks and pitfalls that the real estate agents may set up that surprise other buyers who do not have representation into emotionally overpaying for the property. Certainty in the negotiation should provide you comfort in the price that you will pay for the property.
Execution
Whether it is bidding at an auction, or driving to the sales agent’s house at 10 pm with a signed contract. The buyer’s agent needs to know the playing field and key players for every property sale campaign to implement the most effective strategy that closes the deal quickly before other buyers even have a chance to speak with their solicitor.
General Property Advice
A buyers’ agent will be able to advise you of the current market conditions and provide professional insight that should place you in a better position to purchase the property.
Why might you use a buyer agent?
Let’s be honest, buying a home is stressful and time-consuming. Buyers are tasked with making big decisions that could impact their financial futures all the while juggling jobs, kids, and activities while trying to understand the intricacies and nuances of the property market. Which is not just governed by economics but by the emotional psychology of buyers and sellers.
Buyers are fumbling in the dark, making mistakes, and learning from experience when it comes to buying property. How many properties will most buyers purchase in a lifetime? Corelogic states that the average length of tenure is 11.3 years for houses and 9.3 years for units. This means if you started purchasing houses when you were 20 years old. You will have purchased only five (5) properties until your retirement age at 66. A buyers’ agent has the tried and tested methods that forego the learning by experience that buyers go through to get the best result for the buyer each time on the biggest asset purchase of their lives.
Time, Knowledge, and Expertise
Simply, do you have the time, knowledge, or expertise to keep up-to-date with the property market? This includes knowing what to look for when inspecting a property. Understanding how to properly search for property. Being up to speed with conducting and understanding how to complete proper due diligence on a property. Knowing the negotiation tactics of real estate agents while negotiating and jumping through the hoops to secure a property. If this is the case, you should at least speak with a buyers’ agent.
How to choose a buyers agent
Qualifications and Experience
As a legislative requirement, buyer agents must have a class 1 or class 2 real estate licence in NSW. As these courses are generally 10 weeks. Buyers should look for tertiary qualifications. As this shows that the buyers’ agent has the capacity to think creatively and critically analyse in general and not someone off the street. A good track record, reputation, and experience in the real estate industry are imperative when considering a buyers’ agent.
Local Knowledge and Network
The buyers’ agent should know your local market, which are the best and worst streets in the suburb and why. The median house prices; new developments and infrastructure plans in general. It’s impossible for a buyers’ agent to service an entire city. A buyers agent of all regions is a master of none.
Meet with more than one
Interviewing and getting to know the buyers’ agent face-to-face. Meeting with multiple agents can help give you an idea of the comparisons between each one. You should go with the buyers’ agent that you trust the most.
Ask your friends, family, and business associates
Asking friends, family, and work colleagues is a good place to start the search. Any positive experiences should be helpful indication of the calibre of the buyers’ agent
Test them
Learn and use the basic elements of a buyer agent’s trade and test them on it. This is not about knowing whether a they can memorise the weekly auction results. You should ask them questions like “what are the schools in the area?” “Who are the main real estate agents in the area?”
Ethical
It is illegal for buyers’ agents to accept a fee or commission from the sale of a property. Unfortunately, this is very difficult to prove. Simply asking a buyer agent if they accept vendor commissions or asking for that in writing does not allude that they do not do it.
How much does a buyers agent cost?
There are a lot of buyers agents out there who may charge a fixed fee or percentage fee. There is also usually an upfront payment which is a professional retainer used to show commitment to the purchase. I’m not like most buyers agent and I have a carefully calibrated process to structure fees which you can read in this article.
Alexander Gibson
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