The peak industry body for buyers’ agents has issued a warning to consumers to avoid “volume-based” buyers’ agents who are more interested in upfront fees than providing a professional and objective service to their clients.
According to the Real Estate Buyers Agents Association of Australia (REBAA), there had been a noticeable increase in buyers’ agents whose business models revolve around client volumes, rather than helping a limited number of clients strategically purchase a home or investment property at any one time.
“I recently heard of a sales agent who received a ‘shopping list’ from a volume buyer’s agent, which simply outlined the types of properties they needed to secure to satisfy the dozens of clients they were supposedly currently representing,” REBAA President Melinda Jennison said.
“This type of example is unfortunately not uncommon, with these buyers’ agents clearly more interested in nabbing upfront fees from their clients and then doing the absolute minimum to fulfill the briefs.”
Ms Jennison said while it was standard practice for buyers to pay a retainer fee, the service provided by professional and experienced buyers’ agents included assessing the best properties for their clients’ budgets.
“Buyers caught out by unethical buyers’ agents probably have no idea that the person they have already potentially given thousands of dollars to is doing very little work on their behalf and is often just approaching sales agents to see what listings they have on their books,” she said.
Ms Jennison said while it could sometimes be difficult to identify a quality buyers’ agent over a quantity one, there were a number of questions that buyers could ask to sort the wheat from the chaff.
“Every buyer should undertake due diligence before engaging a buyers’ agent to assist them in purchasing a home or investment property,” she said.
“Just because they have a strong social media presence, or they have cutting-edge marketing, doesn’t mean they are the right fit for you or have your best interests at heart,” she said.
“One of the most important questions to ask your prospective buyer’s agent is how many buyers they currently represent because it shouldn’t be any more than four or five per agent at any one time.”
Ms Jennison said as well as working with a limited number of clients concurrently, the best buyers’ agents also did not work with buyers who had conflicting briefs at the same time.
“Working with clients who have the same briefs is unethical because how on earth would they determine which buyer deserves which property – unless it was influenced by who has paid the highest fee, or who is prepared to make the quickest decision,” Ms Jennison said.
“Consumers should also ask how a buyer’s agent sources properties for their clients, with a big red flag being those who say it’s always ‘off-market’, because this is not only highly unlikely, but also those properties often require a premium to be paid.
“Another warning sign is if an agent promises to fulfil your property brief within a fortnight, because sometimes it can take a month or two for the ideal property to be found for your client.”
Ms Jennison said consumers must also be on the look-out for pressure tactics such as missing out on an off-the-market opportunity or a “special” retainer fee unless they signed up immediately.
“Ethical buyers’ agents not only provide a high level of service to a limited number of clients, they also would never resort to cheap marketing tactics to win business,” she said.
“The very best operators are also appropriately licensed in every state they buy in, are members of industry associations such as REBAA, and are more than happy for prospective clients to speak with current or former clients for objective testimonials.”
