Disclaimer: These comments are the writer’s own and do not necessarily reflect the current opinions and policies of the Real Estate Institute of Western Australia.
When first deciding to buy a property whether it be your first or fifteenth, one to live in or rent out, most buyers look to the internet for inspiration, information and insight. The sheer volume of property information available on line is staggering; the days of having to pour over the classifieds and spend countless hours dashing through home opens are behind us.
Lessened too are the days of buyers asking an agent to seek out suitable property for them. Before property industry de-regulation and the re-writing of REIWA’s Rules of Practise, it was common for an agent to introduce a buyer to another agent’s listing under a conjunctional arrangement and receive a handsome slice of the listing agent’s fee. A 60/40 split was almost always a given.
The demise of the multi-listing service (a system whereby all properties on the market have a lock-box secured on the property and participating agents could simply access the property at anytime) has contributed to the reduction of conjunctional arrangements too.
The boom of the mid noughties brought with it limited market supply and high demand thereby limiting the need for a listing agent to give up a portion of their fee to a sub-agent; they were simply able to deal with the buyers themselves. In such market conditions, buyers worked out pretty quickly there was no advantage using a sub-agent because the listing agent was more likely to favour offers from buyers that she’d introduced.
The quieter, well supplied market of post GFC where buyers were scarce saw the conjunctional come back into popularity but with a well priced listing still an agent’s priority, running about after a buyer on the chance of securing a sale for a small portion of the listing agent’s fee no longer seemed worth it.
Enter Buyer Agents. Seizing on a growing gap in the market, a buyer’s agent acts for and is paid by the purchaser. Time poor investor types find this service particularly worthwhile. A good buyer agent will undertake substantial research before choosing a property to buy for their client, assessing yields, rents, affordability, suburb infrastructure, growth history, etc. And because the buyer agent is acting for their purchaser, they negotiate with the listing agent in a manner that sets out to buy the property for the lowest possible price on favourable buyer terms.
Neatly, the buyer’s agent is not seeking to claim a portion of the selling fee. The vendor’s agent need not find or deal with the buyer either; all negotiations are done through the buyer’s agent. Buyer agents are growing in number, provide an excellent service to their clients and make the listing agent’s job easier.
By Hayden Groves – REIWA President & dG Principal