The difference between choosing a good buyer’s agent and a great buyer’s agent requires a little bit of research. We’ve put together a simple guide on how to qualify your buyer’s agent to make sure your getting the best buyer’s agent for your needs.
Local Agents Are King
Why is being a local agent important?
- A Melbourne buyer’s agent understands how local real estate agents negotiate. This is different in every state as governing laws are different. Selling agents adapt to different rules and the best buyer’s agent needs to know how to play the game.
- They understand the demographics of the suburbs, the reputation of areas at large and access to a network of real estate agents.
- They should be licensed to practice real estate in that state.
Watch out for: companies that are great marketers, that are more than capable of being found to generating leads (your enquiry) which they then sell to your local buyer’s agents whom you haven’t qualified.
How do you spot them? There office is located in another state, even if their business name quotes your home state!
Can they demonstrate competence?
Ask questions like ‘what deals have they done recently’ and ‘how the B.A added value to the process.’ A buyers agents biggest value propositions are:
- Saving a buyer time or money.
- Negotiating favourable terms.
- Sound advice on the property purchased around market value and rental appraisal.
- Making the real estate agent behave ethically.
- Generally buying the best property on the market for the money.
- Representing a buyer at auction.
- Access to off market listings.
Proof Of Competence? Of course every B.A can tell you about how good they are. To spot the best buyer’s agent, verify their stories against previous customer reviews.
Customer reviews are the best sign of clients that have become advocates of the service they have received. You will notice many of the above B.A value propositions quoted within the reviews.
Don’t get fooled by website reviews. Make sure the buyer’s agent uses a public platform for reviews, for instance: Google reviews. This insures they cannot be manipulated as large companies usually have filters in place to stop dodgy reviews.
Reviews also demonstrate how long a particular buyer’s agent has been servicing customers over a period of time.
Each real estate agent must complete a minimum 1 year of experience working under a fully qualified agent. This is recorded on a public register maintained by Consumer Affairs Victoria. This register will display the estate agents entire work history, if they’re fully licenced, licence number and any open disputes that consumer affairs are managing.
Member of a Code of Ethics Organisation.
Each state in Australia has a real estate governing body that sets the best practices for real estate businesses and their employees. In Victoria it’s called Real-Estate Institute Of Victoria.
They offer training courses that cover all aspect of a real estate transaction. Even tertiary certificates on completion.
More importantly, they can offer fines for non-complying members or have the right to refuse membership.
How does a buyer’s agent get paid?
One of the biggest value propositions of a buyer’s agent is their ability to save their client’s money. Why then do many buyer’s agents work on a commission basis where the pay increases when they spend more of their client’s money?
A buyer’s agent shouldn’t work on incentives. They are a skilled advisor offering their service for a fixed fee, regardless of their client’s budget or time spent on buying a property. The best buyer’s agent will help shape their client’s criteria and expectations during the journey of buying a property, lessening time spent on the market.
What if things don’t work out?
Just like wedding vowels, terms of separation should be listed within the agreement. Is it death till you part or can you break it off easy, without penalty?
Read the agreement carefully as all contracts are binding, even if you haven’t read them.
It’s a critical ingredient in a successful buyer’s agent skill recipe. Otherwise, how would a buyer’s agent know a real estate agent’s game if he has never played it?
To make this point, please see below the different roles both agents play.
Selling agents role (traditional real estate agent):
- Advisory service to property sellers on getting their property ready for sale, marketing their property and market appraisal / price.
- Running open for inspections, managing buyer’s expectations and run an auction campaign.
- Negotiating with buyers and seller, goal is to get the best terms and price for the seller.
Buyers Agents Roles:
- Make sure their clients are ready to purchase (finance and buying criteria).
- Short list properties, inspection and all due diligence.
- Negotiation with real estate agent, goal is to get the best term and price for the buyer.
The best buyer’s agent will have sold hundreds of homes as a selling agent. It’s also important for them to have worked over a few different real estate cycles, an up market and a down market.
A buyer’s agent approach to market varies dramatically depending on if it’s a seller’s market of buyer’s market.
Do they practice what they preach?
Everyone’s received this phone call once in their lives, a strong accented life insurance sales person selling you something they would never buy. Likewise, a good buyer’s agent must own property, the best buyer’s agent must own a portfolio of property’s.
Why? It’s important to understand the financial burden a property brings, the finality of a purchase and the pressure a buying the right property for the long term and sticking with your purchase.