Buyer representation is an untapped source of income for agents and principals says one of the UK’s leading authorities in radical real estate.
At the recent Real Estate Institute of Queensland (REIQ) North Queensland Convention held in Townsville, Richard Rawlings of Estate Agency Insight told principals and agents that the next chapter in real estate was harnessing potential buyers as clients.
“Sales and buyer representation does not have to be mutually exclusive,” he said to delegates.
“Estate agents have loads of buyers already communicating with them, that they can sell their services too.
“They’ve already built a relationship with them, they’ve shown them properties. They get to the end of the properties they’ve got and nothing has been suitable. This is often where an agent and buyer will part ways.
“This is a great opportunity to say, ‘well I haven’t got anything for you but why don’t you let me represent you, and I’ll go out and find you something. I’ll speak to all the other agents on your behalf and I’ll look at everything on the market for you’.
Mr Rawlings has already seen great success with smaller agencies in the UK rolling this service out to their clients.
“I am increasingly helping implement these services to a number of agencies in the UK,” he said.
“The smaller agencies are seeing their revenue doubling.
According to Mr Rawlings most UK agents only sell property to about six per cent of their registered buyers.
“So that is 94 per cent who are buying elsewhere. They walk into your office and walk straight out and put their money elsewhere,” he said.
When it comes to negotiating a price Mr Rawlings said he charges 15-20 per cent of the difference between the asking price and selling price as a brokerage fee. In the event there was no advertised price an agent would charge a commission of the actual price, he said.
“I don’t know of any agencies in Australia who are actively using this technique,” he said.
“Effectively you are using your client’s properties to draw in buyers, and if they don’t want to buy that particular property then you can offer them this service.”