The power of buyer’s agents
Buyer’s agents are a relatively new phenomena in Australia. Unlike in the United States where using a buyer’s agent is standard, it’s a relatively new concept here. Purchasing property is one of the biggest commitments you can make. It’s a huge asset usually funded by substantial debt and a transaction that’s not easily undone. Yet traditionally purchasers have been expected to research and transact themselves. All while the counter-party to the transaction has a professional in the form of a real estate agent working on getting the highest price – at the expense of the buyer.
A good buyer’s agent levels the playing field and advocates on behalf of the purchaser. They also often get access to so called off-market properties. What this really means is that if a property is coming up for sale the agent will ring up a buyer’s agent that they have a good relationship with and offer it to their clients first. Buyer’s agents are repeat players in this game. Like a bank pitching an IPO to their clients there will be many more transactions that they will be involved in, so credibility is key. They have no incentive to waste a real estate agent’s time and similarly a real estate agent has every incentive to get a hassle-free deal done with a credible buyer.
Aside from the time one should reasonably allocate to one of the biggest purchases of their lives, there are a number of other reasons to consider a buyer’s agent:
- You don’t know what you don’t know. When you’re purchasing a property you likely get a building report from a construction professional, legal advice from a solicitor, and source your finance from a mortgage broker. Similarly, it makes sense to be advised on the purchasing process by an expert in purchasing property.
- They have a great network of contacts that they have cultivated in the industry. A good buyer’s agent will let the needs of their client be known and quite often real estate agents will come across a property and remember the needs of the buyer’s agent’s client’s months after.
- Buyer’s agents can often secure better deals. There is real value for a vendor in securing a quick sale without the expense of advertising and often this is passed through to the buyer.
- They often have regional expertise. The suburb knowledge of non-property professionals is often limited to their area of residence. If you are Sydney based and looking to acquire a property in Melbourne it’s unlikely that you will have the kind of knowledge required to make an informed purchasing decision. A local buyer’s agent can assist.
So, what makes a good buyer’s agent? Well there are a couple of considerations that one should consider when selecting a buyer’s agent.
- Independence. A buyer’s agent should work for (and be paid by) you only.
- Willingness to consider varying their fee based on success. For example, if you have very specific goals from the relationship and they are not met, or met to a lower standard, is the buyer’s agent happy to be paid accordingly? Similarly, you should be happy to pay for excellent results.
- A strong track record and customer testimonials or success stories.
- Desire to build a long-term relationship.
At Certainty Property we have strong relationships with a number of buyer’s agents. In fact, a number of buyer’s agents utilise our rent guarantees when their clients purchase investment properties so that they have guaranteed, predictable cash flows from their investments.