How buyer’s agents can tilt the odds in your favour
There are a lot of frustrated buyers out there, overwhelmed by selling agents’ tactics and sick of underquoting. Buyer’s agents exist to help these people.
Finding and then buying the right property is hard enough, especially when there isn’t an abundance of options on the market. That’s why it’s worth looking at finding an edge and engaging the exclusive services of an expert fully committed to getting you the right property at the best price.
Buyer’s agents, or advocates, are real estate specialists. They are experts in property values and know the hottest markets and the best properties for sale, even those not seen on popular property websites or apps. What separates them from real estate agents, though, is they work one-on-one with buyers to find the best deal on a home or investment that suits their precise purposes.
Shiju Thomas, senior marketing manager at Sydney-based buyer’s agency Cohen Handler, says property seekers choose advocates for many reasons. They may have struggled for a long time to find the right property themselves or found it difficult to find enough hours in their busy schedules to do the appropriate amount of research. Also, Thomas says, prospective buyers might dislike dealing with real estate agents, or find themselves frustrated by researching underquoted properties and getting outbid at auctions.
“Buyer’s agents find the right strategy,” Thomas says. “We often get a deal done before auction. Let’s say there’s this great property, with 10 buyers all waiting for the auction in four weeks. We might get our client to see the property before everyone else, put in an offer and get it accepted within 24 hours. The property no longer goes to auction.”
Buyer’s agents take the emotion out of a property deal. “People end up paying way more than the property is worth,” Thomas says. “We have auction-only services, where buyers hire us just to represent them in an auction. We make sure they don’t get carried away.”
Michael Pickham, a real estate buyers agent with Propertunity, says there are a lot frustrated buyers out there who are overwhelmed with the tactics used by selling agents and sick of underquoting. Buyers agents exist to help these people, he says.
“Our strategy can change daily, as can the market conditions,” says Pickham. “Evolving with the market is essential to applying suitable strategy. Being on the front line every single day ensures that we are up to speed with the market in real time and gives us the advantage over buyers and sellers who only get to it once a week or fortnight.”
He once helped a Sydney couple with a small child upsize from a squishy 2-bed unit, to a bigger home. “These people worked long hours and spent every weekend for months trying to secure a home for their family. Not one real estate agent helped them secure anything,” he says.
“They were left feeling defeated and were physically and emotionally exhausted from being gazumped, being the under bidder at auction and being under quoted to by the local agents.
“I quickly aligned with their search and made some recommendations on better suburbs (although a bit more expensive) for their needs. It only took four weeks to find them a better house in a better area for a better price than they were trying to find on their own. These people still email me every few months to thank me for helping their family. This is the reason I love what I do.”
So, what makes a good buyer’s agent?
Aside from a passion for the job, Thomas says it’s important to find an agency with good client testimonials and one that specialises in advocacy. Agencies that act on behalf of buyers and sellers – especially developers – may have a conflict of interest.
“The other mark of a good buyer’s agent is they have a good network,” Thomas says. “That’s what gives them access to off-market properties. Usually, if it’s a one-man, two-man band, they don’t have access to the kind of properties that a 40-member or even 20-member team has.”
Before they engage the exclusive services of a buyer’s agent, prospective clients need a clear idea of what they want. Whether it’s buying a family home or investment property, an advocate needs to know where their client wants to buy, how many bedrooms they need and the price they’re prepared to pay. (It’s also important for buyers to know how much they can borrow, using UNO home loans as a guide.)
In short, if you’re looking to use a buyer’s agent, you need a good working knowledge of the market you’re looking to buy in. After all, it’s your money. “A lot of times,” Thomas says, “we tell potential clients that they should try to buy a place on their own first, and then come to us [if they aren’t successful].”
By law, buyer’s agents must only act in their client’s best interests. They can’t allow external factors to override their duty of care. How much a buyer pays for this service depends on the complexity of the brief. “Sometimes you have clients who want a particular type of house on a particular street,” Thomas says.
A typical buyer’s agent fee to offer advice to a client until a property deal is closed is 1.8-2.3 percent of the purchase price, and this may include a monthly retainer. Alternatively, a buyer’s agent might be simply enlisted to bid on a client’s behalf at auction for $800-$5000, depending on the situation and sale price.