What does a Buyer's Agent do?
What does a Buyer’s Agent do?
It’s a question I’m often asked when meeting people and the topic of work comes up; “so Claire, what do you do?”. It’s not immediately obvious just how much the role entails, and why buyers would engage one.
In a nutshell, a buyer’s agent helps you to select and acquire quality real estate. Whether it’s your new home or an investment for your portfolio, a buyer’s agent is an impartial real estate professional who can identify how well a potential property will meet your needs. That’s the first part of the job.
They identify how well a potential property will meet your specific needs.
A buyer’s agent will help you identify the likely purchase price for a property and will report to you on where it sits in comparison to other properties. Beyond looking up past sales, they have a unique insight into how various agents operate around town, how an auction campaign is orchestrated and various ways to work with selling agents to negotiate and/or bid to purchase your chosen property for the best possible price. A buyer’s agent is in the market every day, looking at potential properties and knows their location inside-out. The best streets, the best parts of the best streets and importantly, where to avoid.
A buyer’s agent will inform you on how much to pay, and how best to go about doing that.
Their level of involvement throughout the process can vary with different services on offer to suit how much you require of them. Whether you need a little help once you’ve found a place, or you’re seeking more guidance and involvement to have potential homes shortlisted and assessed for you, it’s a sliding scale of how involved a buyer’s agent can be. As a buyer’s agent I have a legal duty of care to my clients to ensure the property fits their needs and is purchased at the lowest possible price.
A buyer’s agent works only for their client - the buyer.
By contrast, a selling agent’s duty of care is to their client - the vendor - and they are required by law to obtain the highest possible price for their client. I know I’d be extremely upset and angry if I were selling my property and discovered my agent hadn’t gotten the highest sale price for me. High-calibre selling agents work hard and the vendors pay handsomely for it, usually between 2.2-3.5% of the sale price achieved. Selling agents work solely for the vendor and it’s illegal to represent both the buyer and the seller. They leave themselves open to litigation if they represent the buyer.
It’s illegal to act for both the buyer and the seller in a property transaction.
Where I see problems and bad news brewing, is where buyers are being ‘assisted’ by those who aren’t acting in the buyer’s best interests. They may seem helpful but there’s a line where it becomes a conflict of interest. Selling agents can give you information on the property and the vendor, but it’s not their place to advise you how much the property might fetch at auction, nor how to bid at an auction to pay the lowest possible price. And when it comes time to bid, they are not there to help you get the best price. It may sound obvious, but the helpful crowd surfers are there to help the auction along and keep you bidding. Ever heard an agent ask for another thousand? And then another? They are employed by the vendor, not by you as the buyer. They aren’t there to help you buy for the lowest possible price or to ascertain if this is the right one for you. That’s your responsibility as the buyer. You’re paying hundreds of thousands - if not millions - of dollars to repay the loan on a property and it makes no sense to seek advice from the person who is paid to extract the most money from you.
Other professionals involved in property can often pipe up with their own recommendations. “Always bid first - at least you’ll get the box of chocolates'“, was the advice given by a mortgage broker to a young first home buyer couple. Hardly a well-planned approach. When I’m asked a good question that isn’t my area to answer (eg. what’s the cost of renovating this place, is a frequent one) I always tell my clients, it’s important to ask the right questions of the right people.
Ask the right questions of the right people.
Recognise that the skillset of a broker may not extend beyond their area of expertise - loan structuring and finance. It’s understandable as brokers, solicitors and accountants are in a position of trust with their clients. Buyers need to acknowledge the limitations of each provider. Seeking professional advice from experts who are skilled in their field in order to have confidence in the recommendations they’re given is essential. A jack of all trades is a master of none, after all. It’s for this reason that I don’t offer mortgage broking, conveyancing, property management nor rental assistance. I’m a buyer’s agent whose skillset is in purchasing property. The right property, at the right price.
There’s a need to differentiate between an independent or ‘true’ buyer’s agent, and those who call themselves a buyer’s agent (or buyer’s assistant/advisor/concierge/insert other meaningless name) but aren’t actually working in the buyer’s best interest. A buyer’s agent is not a regulated term so there’s a risk to consumers that anyone can purport to be a buyer’s agent. A friend sent me a link to someone on Gumtree, who claimed they would make you rich but in fact, had no credentials or experience to speak of. Buyer beware.
Like all industries, not all Buyer’s Agents are equal. Buyer Beware.
Look for someone whose interests are uncompromised and has the experience to help you get a superior outcome. If you check for these indicators and upon speaking with them feel they’ll be someone you can place your trust in to advise you, it’s a solid place to start a working relationship.
A buyer’s agent is:
not paid by the seller or developer for shifting their stock to unwitting buyers
a licenced Real Estate Agent in the state/territory in which they are buying*
actively working full-time as a buyer’s agent (doesn’t ‘moonlight’ on the weekend)
paid only by the buyer - no splitting of commissions with the selling agent
independent from real estate agents who sell property. They are not employed, contracted or affiliated in any way with a selling agency
a good listener. Their role is to understand your needs, and then help to find and purchase the best property for you
well-informed on their location. There’s no point working with a Sydney specialist to buy in Canberra, and vice versa
a member of REBAA (www.rebaa.com.au). This gives you peace of mind that they are a qualified buyer’s agent who meets their stringent membership requirements.
*A list of licensed ACT real estate agents can be searched at https://www.accesscanberra.act.gov.au/app/services/occupational/#/RA
Remember, as a buyer it’s your responsibility to ensure you get the best deal. If you lack the time, experience or inclination to do the necessary legwork, please get in touch to see how I may be able to assist you.