A New Generation of Buyer Advocates
As an industry we are deeply concerned about something that is occurring in the Buyer Agent’s space at the moment. If you are thinking about hiring or becoming a buyer’s agent, this is critical reading before embarking on your quest to find the best buyers agent for you. In this article we will explore the dangerous practices of a new generation of buyer advocates hitting the market in Australia.
The sad reality is that the new generation of Buyer Advocates are no more experienced at buying property than you are. Yet they are charging a professional fee without the professional experience you would expect to go with hiring a professional.
In a nutshell, the new generation of buyer advocates have;
- No industry experience
- No supervision by a licensed, experienced principal
- None would typically be qualified or be eligible to work in Melbourne as a Buyers Agent
- And most are working two jobs (ie. a full time job and part time buyer advocacy)
Direct Industry Experience Is a minimum Standard
The preferred pathway for a professional advocate is to work underneath a master advocate for a minimum of two years. During this time, new entrants are supervised and receive on the job training by more experienced advocates.
Even those who have significant years in other sectors of the real estate industry have a steep learning curve when it comes to transitioning to a buyer advocacy role. The skill set required to be an outstanding advocate is very different to any other role in the industry. Many try to switch only to find it is not for them. Whilst experience in the real estate industry is helpful, bringing an understanding of property, the legislation and processes, it is really just the beginning of getting to know how things work from the buyer side of the transaction.
The new generation of buyer advocates have ZERO industry experience.
From stay at home mums, electricians, trades people, accountants and financial planners, each industry type is being specifically approached with a pitch to try their hand at this amazing lifestyle business while earning multiple 6 figures.
As an industry we are deeply concerned by the claims and sensational marketing attached to the advertising. We are concerned because courses are being pitched at get rich quick seminars as a way to make $15,000 per deal. Any dedicated advocates will tell you they work a 6 day week, often late nights mid week and that buyer advocacy is hard work. It is far from a get-rich-quick industry. In fact many make a start but don’t last. The focus of the advertising for the new generation of buyer agents is on the money and the pitch hits the demographic perfectly.
The marketing companies aim is to produce 1000 new generation buyer advocates over the next year. The truth is we don’t want 1000 unqualified, inexperienced advocates tarnishing the reputation of the industry and placing consumers at risk.
I take my role as an advocate with a great deal of respect and care.
One mistake and I could lose my client money, cost them money or waste their money.
This is an incredibly serious responsibility.
Anyone who thinks they can take on this job without any experience or a proper trainee-ship is not taking their career seriously enough. Consequently these new advocates are a risk to the clients brave enough to pay them. And they are a risk the industry.
No supervision by a licensed, experienced principal
In Melbourne, a real estate professional is required to work in the industry for a minimum of 2 years under the supervision of a licensed and experienced agent or advocate before obtaining their own real estate license.
After working as a cadet under supervision for 2 years, the new entrant will then complete 16 units of competency, handing in an assignment and sitting an exam for every unit. This process usually takes 6 – 12 months of study and attending a few days of class per week at the Real Estate Institute of Victoria in Camberwell or Swinburne University
In Melbourne, this new generation of Buyer Agents would not be qualified to obtain their licence.
However there is a back door.
There are a few online Registered Training Organisations who create an easy pathway for people to obtain their real estate licence. Some of these organisations advertise a quick 24 hour course, I have seen one advertise 4 hours! No industry experience, a back door, online course and suddenly you can be licensed to handle millions of dollars in real estate transactions.
Once licensed in NSW via these back door avenues, new entrants then apply for their license in Victoria under a loop hole called Mutual Recognition.
Bingo! The new entrant has bi- passed their 2 year apprenticeship, skipped the opportunity to be trained by an experienced advocate or agent, missed out on the exposure to all sorts of curly and interesting situations that need to be navigated on a weekly basis (and don’t get taught in a class) and suddenly there is a brand new advocate working in the industry charging thousands, if not tens of thousands of dollars. Essentially consumers are paying a full professional fee for an inexperienced advocate.
Working as an advocate part-time
Almost all of the new recruits short-cutting their way into buyer advocacy maintain their full time job while starting their new business working as a buyers agent.
The thing about being a good buyers advocate is that you need to be honing your skills and practising your craft daily. And you cannot do the best job for your clients working part time, after hours on weekends.
Henny Stier of OH Property Group in Sydney adds ” The nature of client work is such that you are often required to work irregular hours as and when the clients need you. The buying process is also highly unpredictable and often move very fast. So it would not be possible to work only 3 days a week for example because the property could be sold on your day off'”
You simply can not do what you need to do for clients after hours without compromising the clients search and outcome in some way.
Last week I heard about an advocate who was at his full time job and couldn’t take his client to see a property.
He instead phoned the selling agent asking them to meet and show his clients through the property.
I was mortified upon hearing this because it is vitally important that an advocate represents their client at all times. This includes taking the client through the property pointing out both the good and the bad aspects of the property.
Do you think the selling agent is going to point out the bad stuff? No, they are not. They will actually turn it into a positive or get your attention onto a more positive aspect of the property.
In addition, the advocate would need to inspect the property to determine if it is actually a good property (photos on the internet can be deceiving), check the surrounding homes and area to ensure nothing detrimental and would need to inspect the property to determine the true market value of the property.
Without doing these important parts of the job the client is exposed to risk, overpaying or buying a lemon.
You will never see a job advertisement looking for a part time, inexperienced advocate. But unfortunately, over 300 of them have just entered the industry in the last 12 months and we expect that to double in the next 10 months.
Unfortunately it will take us as an industry some time to prevent inexperienced new entrants from starting businesses in the industry, so it is really important you use your common sense when hiring.
Here are some things you need to look for in an advocate
Ask for experience
Genuine Buyer Advocacy experience. If they have none – you may as well keep your money and do it yourself. You may have more experience than the buyers advocate. Personal property investment experience is simply not an adequate replacement for many reasons.
Ask where they obtained their license
The most respected training provider in the industry is the REIV (Real Estate Institute of Victoria) or Swinburne University in Melbourne. If you are provided with a different answer, simply google the training provider and see how easy or hard it is to get a license via that training provider.
If they have passed the minimum requirements outlined above, here are some more checks you need to make.
Ask to see a certificate of insurance
Ensure the certificate of insurance wasn’t dated the day or close to the day you asked for it, because that will show they only just got it and may not even pay for the policy in a month when it is due. Many will not carry insurance because it is expensive.
Since they are unlikely to be a member of a reputable industry body, no-one will be checking to ensure they have an up to date insurance policy. So you will need to do that to protect yourself.
Ask how many transactions they have handled where they have been paid a full buyer advocacy fee
New entrants often work for free in return for testimonials to gain social proof which will later help them win the business of legitimate paying customers. When you see testimonials or google reviews, ask if they are all from paying customers and if the customer paid a full professional fee or a reduced fee. I have seen some with a recommendation by their business coach for example, so don’t just assume.
As an industry are working together along with other key property related industry bodies to create change at a legislative level. We are campaigning for better standards and higher entrant requirements which will prevent new entrants from skipping the necessary apprenticeship they need in order to serve consumers safely. We will not accomplish this quickly due to the nature and complexity of creating change at a government level.
However we will continue advocating for these changes so that you as a customer can receive the expertise and representation you deserve for your money.
Until then, please protect yourself and do your research. If it doesn’t feel right, seems to be good to be true and doesn’t feel like the real deal, keep looking.
REBAA can be a great start when looking for a genuine advocate who has been vetted and endorsed by colleagues to be able to obtain membership.
Of course we not only meet the minimum requirements outlined in this article, we exceed them. With 15 years dedicated to Buyer Advocacy we are genuine masters at our craft and would be delighted to assist you with your purchase. If you would like to get in contact with us to book a complimentary phone consultation.
For those of you who have stumbled across this article in the hopes of becoming an advocate – this blog post is for you.
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