Why I don't use buyer's agents

FYI, buyers agents as are selling agents are governed by the Department of Fair Trading in each state. Most of which have their own code of conduct - e.g. http://www.fairtrading.nsw.gov.au/f..._managers/Rules_of_conduct/Buyers_agent.page?

I find it interesting that many BA's offer (and advertise) a 'vendor advocacy' service where they accept part of the selling agents commission for referring one of their clients to the selling agent.

In NSW, this is a breach of the OFT code of conduct - I don't think its breaches REBAA's code of conduct though??


25. Licensee must not accept payment for a referral
"A licensee must not demand or accept a fee or other valuable consideration for referring the principal to a selling agent".


One can usually get a feel for the level of a business's integrity by speaking to enough of their customers.

Any transparent business should be happy to provide the names and numbers (with permission) of past and present customers.

 

An agent is not required to operate under a company license. An agent may operate as a sole trader.

 

Hi Bingo
Every BA operates slightly differently depending on a number of factors.
If the BA is also a licensed Financial Planner they can offer financial advice and assess your end goals and requirements and make suitable suggestions.
If the BA is also a Mortgage Broker they can offer credit advice and make suggestions to structure your loan accordingly.
Cheers


Richard

 

Membership eligibility is as per the info on the REBAA website and includes a provisional membership category (less than 24 mths operating in a BA business). It's certainly not a restrictive trade practice but rather an easier way for consumers to validate those agencies on the basis of their experience in buyers agency. I would like to reiterate that any buyers' agent, regardless of years in business, can apply for membership. There are simply different categories of membership. As you would know, REBAA is an assoc so is governed by the Associations Incorporations Act (2009) and has to abide accordingly and with it's current constitution.

I don't disagree with you here, as I'm sure there are great BAs who aren't members (yet ) of REBAA and experience doesn't necessarily always equate with superior service/results, however it at least provides consumers with a starting point and some further information regarding genuine experience in the field. Membership also provides surety that all REBAA BAs have the appropriate licences and insurances for their state m'ship status as well. REBAA members also are exposed to and have the opportunity to engage in further professional development with their peers, attend networking events and have access to useful resources (including our own members forum).
*We have our own fossils too but I don't regard myself quite in this category just yet

Agree 100% and that is what the OFT is set up for. Interestingly, and cheeringly for both our industry and REBAA's and the REINSW's BA Chapter's ongoing push for increased training standards (for both buyers and sellers agents) just this week OFT NSW released the announcement of a new specific division for auditing and overseeing the regulation of the RE sector. We are very pleased with this initiative and trust that it makes an impact in an industry that requires a tightening of standards and adherence to regulation. It's long overdue.
http://www.yourinvestmentpropertyma...state-industry-in-new-south-wales-204391.aspx

Nothing at all though given that REBAA is the only national association for our industry (and has been going since 2000) I would assume that most interested BAs would check REBAA out first. Many years ago I believe there was another association set up for buyers agents however I believe it tanked as it only ever had 4-5 members...

 

100% correct however I was obviously referring to agencies who are companies. Make sure, though, that if you are hiring an interstate BA that they are using the contract paperwork compliant for that state. QLD, for example, have specific forms that are mandatory and different from other states.

 

Firstly, this makes me so mad to hear stories like that. There are companies and representatives out there calling themsleves BA's when they are not so it is important to firstly identify the difference so consumers know how to select a BA who is a true BA. Whilst I am not a member of the REBAA there is some good information on their website about how to choose a buyers advocate. (And there are many BA's who would qualify to be a member but choose not to be, so do look outside of the list of members also)

Secondly, I have itemised my time for a number of client projects and I can confirm what others on the thread have already mentioned. In some instances the hourly rate may be high and in other cases you may be earning very little once over heads are time are taken into consideration. However as Jacque has mentioned, a service like a BA's isn't charged on an hourly rate so it is not really relevant to the discussion.

It is a service which is provided which offers value in many different ways to a variety of circumstances.

To illustrate, I have had a property for my client within a day or a week of taking our service. Not becuase I am willing to introduce them to any old property (because I will not. My desire is to build long term relationships with my clients and word of mouth referrals), but becuase I have built strong network of selling agents who let me know what they have coming up allowing me to do my DD on them before they hit the market, and because I know the areas I work in extremely well I know what the property is worth. If the property is a match and the price is right my client can have a property very quickly. Now while that may take 10 hours of my time, it has taken me 11 years of experience to get here to enable me to do that job for my client and that is worth something to a client who chooses an experienced BA.

Additionally, it has saved my client 6-12 months of their own time shopping for a property every weekend and not feeling confident or sure of themselves. The fee they pay for the service is valuable on many levels.


On the other hand, I have spent 6 months looking for property for clients (and I have heard others say they have worked with a buyer for 12 months). Perhaps the market is tightly held, the client has a very specific brief which is not the norm or missing out on multiple auctions bc I don't encourage clients to overpay for a property. What ever the reason is, an ethical BA will work with their clients best interest in mind and will keep working to get the desired result.


At the end of the day there are many people out there who are not adequately skilled to buy property on their own. Yes, there are free tools available on the Internet, but many people do not know how to use or interpret the data with a degree of competency.

While many people come here to educate themselves and have a desire to DIY, it is important to understand that many people do not share this desire or enthusiasm and would prefer to outsource the job.

Each to their own.

 

Buyers advocates can also choose to be a member of their relevant state Real Estate Industry and by doing so agree to a code of ethics and a requirement for insurances set out by the real estate industry.

In Victoria for example there are roughly 70 buyers advocates who are members of the REIV. We have a Buyers Advocacy chapter specifically for Buyers Advocates. The chapter hold a bi- monthly breakfast and education session for members and we have opportunities to earn our CPD points through these education sessions to stay complaint with the REIV's requirements for membership.

I receive a lot of value in being a member and particularly enjoy the opportunity to contact the legal team for advice specifically relating to compliance issues and new laws as they are rolled out.

 

Just checked out the ASIC site for your new business name,no one yet has that one yet,well at least not in the last minute,good luck..

 

It's funny that you say that because I must admit I have given it some thought. I remember on SS I told an experience of where effectively as lawyer for the seller I was acting as a Real estate agent fielding all the calls from prospective buyers etc.
When I posted this experience I remember copping a bit of flak from real estate agents demanding to know how I could do this without an agent's licence. The reaction was so strong and sudden that I wondered what nerve I had hit. Must be a pretty sweet wicket I expect. The beauty of being a lawyer is that you can do this stuff on instruction from a client. Now- to be a buyer's agent I wouldn't need to advertise. I could put parties in touch and claim a slice. I get a few deceased estates a year. Just get them valued professionally and then offer them at the valued price to buyers off market. Buyers would need to get their own lawyers - but conflict issues could be overridden with informed client consent. If conflict of interest was an issue I could get around it by doing a contra deal with another lawyer to take his referrals for my "buyer's agency" and he take mine- once again with fully informed client consent. Everyone happy (except the local agents I expect).

 

I think your onto something with this mate,look at it from another angle just like the taxi industry and so many others I can think of some people like the on demand way and with mercenary change ,and with yourself being a Solicitor who also is a property investor then there would be no incorrectness,i have a mate was a blue collar worker tradesman who went out about one year ago paid something like 3k or so,became a lic real estate agent but not to sell he wanted to start up a property sideshow rental company,he doing real well runs the whole set-up from the front bar of the Holland park hotel
last week when I had a chat he has about 50 plus people signed up,and how hard can it be and he has not been sober in 30 years,good luck with the idea..

 

That would be ok for the buyers as the valuations would be on the conservative side, i.e if not valued off the back of a contract of sale.

Not so great for your seller clients though. But i guess if its a deceased estate maybe they dont care

 

The only issue being is that you wouldn't actually be a buyers agent. What you are describing is something different altogether.

 

Tell me more. The guy's name isn't Nev is it?

I've got a valuer who I've known for 20 years. His valuations, with 1 exception have always been within 1% of the final sale price. I'm comfortable with that.

 

First of all I am not drawing any parallels between what you are suggesting above and what got Peter Mericka (a lawyer acting as a REA without a licence) into trouble, but before you embark on such a course, may I suggest you google his name, if you are not familiar with the case.

http://www.business2.com.au/2012/03/judgement-day-for-peter-mericka-and-lawyers-real-estate/

Cheers,
Alan

 

Can I have his details, he sounds exceptional. I would have some work for him.

 

I did some research on BA's by interviewing them (literally - had a set of questions) it was easy to chose the right one for me this way. I feel confident that they were able to achieve what I couldn't. As a new investor I was mentored and given advise that fast tracked my purchase so well worth the money I paid. Effective purchasing skills meant that I got an IP for a better price than one purchased in the same block 6 months previously where the prices had increased by around 5%. Feel that for me this was a great move forward in my investing journey. I am also confident that I have purchased well - will use them again.

 

Really interesting comments and I find it interesting that negative comments made about BA's are more frequent than positive (but generally by those who have not used them). Maybe the likely clientele would not take a step such as frequenting a forum like this?

I actually wonder how one could ever get started as a BA even if qualified/registered with all these requirements about x number of previous clients x years in business etc.. Nobody asks a selling agent these questions and they make potentially way more and do a lot less for it.

 

Hi Helen

You raise a valid point- the overwhelming majority of our clients don't come to us from these forums and experiences/opinions with BAs do vary. Just like selling one's property, using an advocate/agent is something that should be researched well and several candidates considered and interviewed.

Of the forumites on here (and the old SS) who used our services I do know that they were all very happy so I guess we must be doing something right Lucky I love what I do too!

 

Would it not be a conflict of interest if you are paying a BA a % of the purchase price - yet you are ultimately appointing them to try and achieve the lowest possible price for you?

 

Hi @Jacque - couldn't agree more with points 2 and 3 - if you are appointing a BA (whether local or interstate) you should make sure the BA is licensed in that particular state and make sure the form you sign is relevant to the state you are purchasing in (wonderful how property legislation is different in every state of Australia - makes our jobs so easy!).

Regarding point 1 though - I know you covered yourself by saying that it isn't mandatory a BA has staff or an office where they are investing - but just because it maybe a different process to a traditional BA doesn't mean it is wrong. As BA's there is (or should be) an advisory component to our service. Ultimately, would I be 'acting in my clients best interest' if I was ONLY recommending Brisbane just because it's where I live and work, or I was ONLY recommending locations which we just happened to have offices or staff.

Where I live, where I work, where we have office and where we have staff has absolutely no impact on where in this huge country called Australia is best at any particular time for a client to invest. Furthermore, every client is different, every client has different goals and objectives and to assist in diversifying a portfolio and minimising risks, what maybe best for one client is unlikely to be best for the next.

Anyone looking to appoint a BA should ask as many questions about the BA's process and methodology as it takes to get them (the client) comfortable. Ultimately, if they can't get themselves comfortable with the service the BA provides, the reasons a BA does what they do, the reasons a BA assists with purchases in particular markets, or they don't see value in the service BA is offering - don't appoint them and don't pay them!