In the early part of the naughties, we saw the emergence of the Buyers Agent. Their flock were few, but they are now emerging into a blossoming industry. One of the fastest emerging businesses within the estate agent’s marketplace is the Buyers Agent. The Buyers Agent represents purchasers in the sale process. Unlike the average purchase, the Buyers Agent comes to the stage with much of the same knowledge and skills of the Sales Agent. Both parties know the rules, both know the marketplace, and both are vested with skills of negotiations.
The true Buyers Agent will honestly and diligently work for their client. Meaning that, they will utilise their skills and knowledge to get the best outcome for their purchaser. The battle lines are therefore drawn!
When one knows the rules, you can play the game by using those rules. A good Buyers Agent will use the rules against the Selling Agent to gain an advantage.
The first job of a Buyers Agent is to make the property on sale unmarketable. The second is to move the Selling Agent from acting as an agent to a person who just wants to collect commission.
Let’s give an example of this:-
- An agent has a property on the market for the price the vendor is seeking. As normal, the Selling Agent knows that this price is not reflected by the marketplace.
- The Buyers Agent selects a good pest and building inspector to undertake a report on the building. As everyone knows, building reports never tell good news but focus on the bad.
- The pest and building is provided to the Sellers Agent as a means of identifying the reasons why the property is not worth the advertised price. Not only has the Buyers Agent created a negotiating point, they have now placed the Selling Agent in a difficult position. If the agent is therefore aware of the defects, it must quote this “material fact” to all other purchasers. In other words, Section 52 of the Property and Stock Agents Act 2002 places the Selling Agent in a position where they must advise all buyers of the defects. These defects will not go away and place the Selling Agent in a position where they are advising people that the property is unmarketable at the market price, leaving the vendor in a position whereby they will refuse all offers and may move to another agent.
- The Buyers Agent doesn’t want to let the Seller’s Agent off the hook and should provide incentive to the Sellers Agent that a deal can be done, thereby moving the Sellers Agent to a commission collector. A good Buyers Agent will offer a good respectful but lower price to the selling agent, giving a signed Contract with a cheque to the Seller’s Agent as a means of demonstrating their bona fides. The Selling Agent has now been moved to a commission collector and will condition their Vendor to the price. Temptation is now before the Selling Agent, usually leading to a re-negotiation of price.
Obviously, everything changes depending of the marketplace, nonetheless, the marketplace we are now in provides a new industry with energy and direction.