7 Tips When Choosing A Buyer Agent
Not all buyer agents are equal.
Here are 7 key things you should know before employing a buyer agent in Australia
1 - Make sure you’re paying your advocate. Some buyer advocacy services are promoted as ‘free’. Nobody works for free in real estate.
An agent in Australia cannot (by law) accept a fee from both buyer and seller in any one negotiation.
If you are not paying the agent, the seller is. In this circumstance he agent is not working for you, they are working for the seller, and most likely getting a 'kick back from the seller'
They are not a buying agent - they are a selling agent. Walk away.
2 - Some buyer advocates will charge a percentage of the purchase price as their fee.
In other words – the more you pay for a property, the higher their fee.
In such circumstances, the advocate as a motivation to push you to pay more.
This is a clear conflict of interest.
Make sure you find an agent that agrees to fix their fees in advance, regardless of how much you pay for the property.
3 - Is your advocate licensed? The Business Licensing Authority (BLA) in each state regulates the real estate industry.
All real estate agents (including buyer advocates) must be licensed.
Make sure you are engaging with a fully licensed agent. A name check is available on each state’s BLA website. If they’re not licensed – you are advised to report them.
4 - Don’t sign up with an agent that tries to restrict you to only purchasing within certain areas of the city.
Some agents only recommend buying within 5 – 10km of the CBD (very convenient for those offices that are centrally located).
Others recommend just apartments or townhouses (speculating on the myth that we’re all a nation of down-sizers and this is the best long term investment).
They do this because it often suits their business model.
There’s an abundance of apartments in the city – too many for the current market.
They are a quick and easy buy.
Your advocate should be thinking outside the square. Everyone has different investment goals and needs. All need to be assessed individually.
There are other options available for a modest budget that are as good, if not better, for you as an investor than apartments.
Buying on the doorstep of the CBD is not always the best strategy.
There is no ‘golden egg’ to real estate investing.
Work with an advocate that is flexible enough to suggest and consider all options suited to your needs – not theirs.
5 - Don’t believe the hype. If your advocate starts to sound like a property spruiker or sales agent, it should be a red flag.
Comments such as “all property prices double every 7 - 10 years,” or “there’s a shortage of homes in Australia” (insinuating prices will never crash or drop) are a good indication the agent lacks knowledge and integrity. Cashmore & Co real estate advocates will never lead you down this path.
6 - Do not be afraid to ask to speak to someone the buyer agent has purchased for previously or check company testimonials.
You need to understand exactly what their costs are and the level of service you can expect in return for your money.
7 - It’s important you trust the agent you are working with.
If you have not worked for them before, complete your own due diligence concerning the information you have received.
Do not feel rushed into making a decision.
Buyer advocates should be pointing out both the positive and negative in every home – they are not there to sell you the property or pressure you into buying or paying more.
Make sure you sign a contract that enables you to walk away and employ someone else if you’re not happy with the service you are receiving.
Please contact us for more information.