My take on buyer’s agents
Serving the property market for several years now, I note that selling for vendors has become very interesting with low stock, high demand, and the inclusion of buyer’s agents into the mix.
The practicalities of using a buyer’s agent are obvious. 1) A person of stature usually needs a buyers agent – Mostly someone with high profile or celebrity status would prefer to check out properties via private appointments as ‘their status’ may affect the natural way in which a property sales agent interacts and deals with them. They simply see properties on the shortlist of the buyer’s agent and once they’ve picked the property for them, they leave all negotiations and completion to their (buyer’s) agent. Upon completion of the transaction, they pay the buyer’s agent the same way a vendor pays the selling agent.
2) A busy person will usually make good use of a buyers agent – If the buyer simply has no time to look over the details of suitable properties, let alone compete in the buying frenzy atmosphere that plagues the property market at the moment, then having a buyers agent can be very handy. They only see the properties the buyer’s agent has chosen for them.
3) An inexperienced buyer could benefit from using a buyer’s agent if they are prepared to pay for it. These are the buyers who have their finance approved or have the cash ready but don’t know where to start, what to look for, how to go about securing their home. When they see the home of their dreams, they may be overwhelmed with fear of losing the property to another buyer, they may procrastinate and lose it to someone else, not knowing what to do next. They may end up paying too much or buying without doing their due diligence and could be saddled with a dud property with all sorts of problems they discover after becoming the new owner.
Where the use of a buyer’s agents may not be beneficial.
1) Buyers are not always realistic. They sometimes want what they cannot afford. They may lack decisiveness which may lead to them missing out on the ideal property purchase or they may be uncompromising when considering the less desirable aspects of a particular property and choose to keep looking endlessly for the ‘perfect property’. Such buyers are likely to be ‘in the market’ for a considerable period of time, paying a buyers agent may not be the solution.
2) Buyer’s agent can be rendered ineffective by market forces and real life situations. If the buyer wants the property that’s listed and if the property is going to auction, the instructions from the buyer to their buyer’s agents is ” That’s the one, just GET IT FOR ME EVEN BEFORE AUCTION!” guess who’s got the advantage? – Of course, the vendor and the selling agent has the advantage. The vendor owns what the buyer wants. Given it is rare to find a suitable property, when the buyer does find one and wants it, one has to ask what can the buyer’s agent really do? To complicate things further, the buyer has to hope their buyer’s agent does the right thing by them and this is where I’ve seen some blatant exchanges. I have observed situations where the buyer has paid more (unknowingly) as a result of engaging an unscrupulous agent, hence if a buyer wants to engage a buyer’s agent, reference checks are essential. Like in any industry, there are some very good buyer’s agents around too.
contributed by Juliet Mutia