A quick google search will reveal that there are a large number of buyer advocates working across each state of Australia. Although most will only be licensed to work in one state and the majority will focus on a particular capital city or region you’re still left with a large number of advocates to sift through before choosing “the one”.
We’ve prepared a list of questions you should ask your buyer’s agent before you engage them.
Are they a licensed Buyer Advocate?
To work as a buyer advocate an individual needs to have completed an Agents Representative licence and work under the guidance and licence of a fully licensed agent.
Many people are unaware of this fact and unknowingly (or knowingly) decide to start working as an advocate without the proper licence or training.
Sadly, there are companies out there intentionally helping newcomers to start their own business as an advocate even when the minimum requirements have not been met. For this reason you need to be very careful when selecting an advocate and ensure you only work with those who are appropriately licensed.
To be very clear – no-one except a licensed real estate agent or an agent’s representative working underneath a fully licensed agent can accept money in return for selling, leasing or purchasing related services or advice.
How much experience do they have as a Buyer Advocate?
We recommend that your Buyer Advocate have a minimum of five years of experience. If they are new to the industry the advocate should be working under the guidance and direction of an experienced and licensed buyers agent who has a minimum of five years experience, but preferably more.
Watch out for “collectively we have over 25 years experience” This doesn’t mean much if the person you are trusting to guide you is only six months into their traineeship. Advertising experience in this way is a red flag and should prompt you to look more carefully at how many employees account for this total number of years of experience.
What industry memberships do they have?
Advocates don’t have to be part of any professional industry bodies, however those with a genuine commitment and love of the industry will be. Being a member of an industry body demonstrates a willingness to be held to account by industry peers, a desire to uphold the industry body code of ethics and code of conduct and values access to additional and on going professional development.
The main industry associations in the real estate industry are:
REIV – Real estate industry of Victoria (or your state)
The Real Estate Buyers Agents Association of Australia (REBAA) is the peak industry body for buyer advocacy. Not only is there a strict criteria to meet before being able to qualify for membership, there is also a need to be endorsed by two existing members. Meaning, not everyone can become a member and many membership applications are rejected because the advocate or business does not meet the minimum standards set by REBAA. Not only are we proud members of both the REIV and REBAA, we also volunteer or hold a position on a committee. You can ask us about our work with these two industry bodies if you would like to know more.
Will you receive any commission or referral fee or commission from any other party?
If you are looking for a genuinely independent buyers agent, you don’t want to miss asking this question.
INDEPENDENT BUYER AGENTS WILL NEVER RECEIVE A REFERRAL FEE OR COMMISSION FROM ANY THIRD PARTY.
Watch out for “introducers” who are earning $35,000 or more behind the scenes if they introduce you to a property.
Who is their typical client?
Some buyer advocates work with specific kinds of clients. This could be high end investors and homeowners ($2.5m+), new home buyers, regional home buyers and investors. It is essential to find a buyer advocate who works in your specific area of property purchasing so that your needs align with their area of expertise.
How many clients do you work with at one time?
Avoid “burn and churn” advocates by asking how many properties the advocate is buying in a month. If they are buying alone without any administration or research support you would want to see no more than 8 properties on a full search service. If the advocate is buying more than this amount it can be a sign that the advocate may be overpaying for off-market and on-market properties just to churn through clients. It may also mean they are not conducting thorough due-diligence on the properties they assess or they may not be applying strict criteria to the properties they are purchasing.
A high turnover company will be buying 40 plus houses every month. A boutique advocacy in comparison will be purchasing between 5 – 10 typically.
A more experienced advocate will naturally be able to assist more clients than someone who is newer to the industry because they are more efficient and experienced. However there is still a limit to the number of clients a single buyers agent can assist at any one time while still maintaining a high level of service and not short cutting the process. Here is a rough guide to help you identify if you are going to get the right level of service from your advocate.
Is there a limit to how many properties I can attempt to purchase or look at before buying?
Advocates will each have their own set way of working. While one advocate may cap the amount of properties you can attempt to purchase before needing to pay a higher fee, others will have an unlimited number of purchase attempts.
You can avoid the shock of having a mismatched set of expectations by asking this question upfront.
How will you balance the needs of your clients who have requested similar criteria?
Surprising as it may be and even with clients looking in the same suburb, two briefs are rarely the same. However the higher number of clients an advocate looks after at one time, the higher the likelihood of a cross over.
Look for an advocate that has a clearly defined way of dealing with clients looking for the same property at the same time. We offer our clients the security of a transparent process that is fair to all parties.
BONUS Question – What other special skills do they bring to the table?
Many Buyer Agent’s move into this type of role having started their careers outside of real estate and hold tertiary qualifications in areas such as business, commerce, marketing, accounting, science and law. Some will have worked as real estate (selling) agents. Others will come to the industry based because of their personal property experience and interest in property. Like any profession, having a wide range of skills and knowledge helps to shape the overall industry and improve the outcomes for clients. Find out if your advocate has a special skill they bring to the table that gives them a competitive edge over other advocates.
In summary:
Hiring the right advocate to assist you with your home purchase will make an incredible difference to your outcome.
A quality, experienced advocate will
– Save you time
– Help you avoid mistakes
– Significantly reduce your risk via rigorous due diligence processes
– Access more opportunities via their extensive, long standing network of selling agents who love to deal with the advocate
By contrast, hiring an inexperienced, lazy advocate who doesn’t have the passion or worse, is just in it for the money, will likely cost you financially due to inexperience or cut corners. Hiring the wrong advocate leads to disappointment, especially when you discover that you are not receiving the benefits of the service you have paid for and deserve.
If you would like to partner with us for your home or investment search, we would be happy to go through each of these due diligence items with you so you can be certain of your decision to work with us.
Call us today on 03 8680 2377 or book a time for a 15 minute discussion.
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