Although more and more real estate buyers are finding value in using a buyer's agent, it is also true that many more are going unrepresented. The question is: is it worth it for a property buyer to have their own agent when they purchase a property?
Currently, the vast majority of property buyers purchase without representation. They use the selling agent, online resources, family and friends to assist them with their purchasing decisions. And for the most part, this approach seems to be working well - or is it?
Strictly speaking, the selling agent is not there for the buyer. They are there (ie they have a fiduciary duty) to the seller. The seller has engaged the agent; the seller is paying the agent; the agent has a contractual - and fiduciary - obligation to the seller. So, in effect, a buyer who relies on the advice of the agent who is selling the property is somewhat akin to a spouse turning to their soon-to-be ex spouse's lawyer for advice on the divorce.
The main tasks of a selling agent are to:
Market the property
Draw in interested buyers
Elicit offers from interested buyers
Negotiate the sale of the property in their vendor's best interests
Nowhere in this description does, "act for the buyer; represent their interests; ensure that this home really is right for the buyer; negotiate the purchase price in the purchaser's best interests" come into it. These are all the tasks of the buyer's agent - who has a contractual - and fiduciary - duty to the buyer.
The average person buying a home purchases only two to five times in their life. The average buyer's agent purchases two to five times per month.
A buyer’s agent has education, experience and training to know:
Market value, ie, whether a property is over-priced, well-priced or under market value
How to negotiate the best terms and price for their client
A dud from a great property
How to interpret and analyse all of the data to make sense of it
The best places to go to find a great purchase
Cut through to secure the best home in the earliest possible time-frame
Purchasing a home takes most people at least 12 months. In a rising market, this costs the buyer. The reason that purchasing takes the average buyer at least 12 months is that a) for most people, purchasing a home is not their full-time job: in fact, they already have a full-time job, and house-hunting is done on the side, in amongst everything else that happens in normal daily life. A buyer's agent is focused on property all of the time. There are efficiencies to be gained from this. Most buyer's agents purchase in 4-8 weeks, sometimes sooner. This means that clients actually purchase for less and have more money in their pockets due to the time advantage against increasing capital growth. This fact alone means that people who use a buyer's agent are ahead, even when the buyer's agent's fees are taken into account.
Why use a buyer's agent?
Tap into the knowledge, wisdom and advice of a real estate expert who is on your team, with a fiduciary duty to represent your best interests
Decisions are objective because the buyer's agent is able to remove emotion from the decision
Access to off market properties
Sound number crunching, data analysis and synthesis of multiple sources of information
Access to information that is not available without paid subscription - advantageous information that in itself, can point to excellent buys, homes to avoid, allow the market value to be calculated and so on
Save huge amounts of time (hours + months), save money, save stress (and potentially relationships, too!)
Are there any reasons not to use a buyer's agent?
The main reason that people are hesitant to use a buyer's agent is the cost. Some agents charge anywhere from 2% - 3% of the property's purchase price; others around 1%; others have a fixed fee that increases along with the property's purchase price and so on. At Melissa Maimann Buyer's Agent, the fee structure is as fair as fair can be. A quote is provided based on the complexity of the search, rather than the purchase price.
Melissa Maimann is a licensed Real Estate Agent and Buyer's Agent in Sydney. She assists home owners and investors alike with an affordable service that empowers you to make smart purchase decisions. Melissa's service is fast, efficient and accurate. If you need a hand with your next purchase, don't hesitate to make contact.