A quick internet search reveals that that there are a total of around 50 buyers’ agents in NSW, 20 of whom are accredited members of the REBAA (Real Estate Buyers’ Agency Association of Australia). Of the total number only 20 or so appear on a web search, and these tech-savvy businesses appear to have the lion’s share of the market.
There is something intriguing about buyers’ agents. They appear seemingly out of nowhere at open inspections with clients in tow, and at many auctions nowadays their presence is noted with alarm by prospective bidders who hadn’t thought about bringing one with them. This does seem like a killer tactic if you are determined to buy that ideal property and scare the daylights out of the competition at the same time.
But the question is: who really needs a buyers’ agent? After all, buyers have been successfully purchasing property for themselves for centuries without needing to engage a professional to do it for them.
My industry colleagues and I constantly face the same arguments, and to a certain extent they do make sense until you understand our logic.
Here are some of them from both points of view:
- Why would I engage a property buyer in what is clearly a buyers’ market?
- I wouldn’t engage a property buyer because I have purchased before and always got the best price.
- I know the market very well and don’t need to pay for someone to advise me on that score.
- Even in a buyers’ market an experienced buyers’ agent can ensure that 1) you have been provided with extensive market information related to your proposed purchase and are able to make an informed decision on price, and 2) endeavour to buy the property for you at the best possible price (and not the price the vendor or his real estate agent had anticipated). Expectation is one thing; reality is another.
- From our viewpoint everyone needs the best advice they can get when investing large amounts of money in purchasing either a home or investment property. It is not enough to rely on the mother-in-law’s advice (with great respect to those lovely ladies). There are a number of critical factors that can affect the successful negotiation of a purchase (at auction or by private treaty), but the best known of these are market knowledge, the emotional cost factor, nerves on the day and negotiation skills.
If you had a toothache would you pull the offending thing out yourself just to save money? Would you represent yourself in court, or try to fix your broken boiler at home? As buyers’ agents we believe you should have a professional on your side of the fence. The vendor will have retained a real estate agent, whose only objective is to get the highest possible price he can for your property. What about you? In your own best interest you need representation too.
Pulitzer Prize-winning humourist Dave Barry said about negotiating: “I strongly advise you to use a broker, for the same reason that I'd advise you to pay somebody else to repair your automobile transmission, namely: no matter how incompetent or overpaid this person is, he or she can't possibly screw things up as badly as you would if you did it yourself.”
On the more serious side John McGrath of McGrath Real Estate said: “Often seen as ‘the other side of the coin’, buyers’ agents comprise a very professional industry group. The majority have spent a large part of their careers working as real estate agents before changing roles and have gained invaluable market experience as well as perfecting their negotiating skills.”
Engaging a property buyer may be one of the best decisions you have ever made.
Tim Mansfield is founder and principal of Sydney-based buyers' agency Prime Property Buyer.