Time-poor investors still seek to be information-rich, especially when it comes to their property portfolio.
In the increasingly competitive real estate market, many canny buyers are looking to gain an advantage by working smart, not hard.
Instead of attending the weekly inspections and witnessing the cut and thrust of auctions, they are turning to buyer’s advocates or buyer’s agents, also known as professional house hunters, to seal their deals.
Evolving from the deregulation of estate agency services, buyer’s advocates and, to a lesser degree, vendor’s advocates are proving increasingly popular as a cost-efficient method of speeding up the buying-and-selling process. They also provide keen professional insights and can gain early access to potential purchase opportunities.
How they operate
Buyers simply nominate a suburb or area, budget and any particulars (brick, Victorian, three bedrooms, etc.) about the property they wish to buy.
They negotiate a fee, which may be a percentage success fee (such as two per cent of the sale price), a fee for service, or a combination of both. And the advocate is left to do the rest.
The advantage is that advocates are not emotionally involved in any property and can act in an impartial capacity, which takes the pressure off when bidding at an auction or negotiating on price.
Benefits of using buyer’s agents
They can provide significant financial benefits in the purchase or lease of properties, can eliminate time-wasting, and can provide professional advice and a choice of properties that match the purchaser’s needs.
Their modus operandi is to counteract the very system that they employed previously when they worked as real estate agents.
In effect, they use the agent’s training against them for the benefit of the buyer.
When time is not on your side, buyer’s advocates can be a vital component to keep control in the buyer’s favour.
Where to find a buyer’s advocate
It’s important to look for a buyer’s agent or advocate who is a certified buyer’s agent or accredited buyer representative. ABR agents hold qualifications that have met certain criteria and passed an exam administered by the Real Estate Buyer’s Agent Council. There are national associations for exclusive buyer’s agents in Australia and New Zealand, which provide local contacts.
What to ask
You should first inquire about their experience as a buyer’s agent and seek referrals to previous clients. Do they own property? How many successful purchases have they made as a buyer’s agent and, importantly, what value has their advocacy given to the investor?
Finding out if they are a dual buyer’s agent and real estate agent will eliminate potential conflict of interest.
When inquiring about their fee structure, it’s also mandatory to discover if they hold professional indemnity cover.
This is a legal requirement designed to safeguard the investor in the event of wrongdoing, whether inadvertent or otherwise. Read all contracts carefully before committing.