The president of Australia’s leading body of professional buyers’ agents has slammed certain real estate companies for misrepresenting themselves as buyers’ agents, and offering so-called ‘free’ services.
Real Estate Buyer’s Agents Association of Australia (REBAA) president, Rich Harvey, has warned about possible conflicts of interest on the back of the announcement of a new-to-market ‘free’ property buyers’ service, saying it is regrettable that an “unfortunate minority” is giving the industry a bad name.
Mr Harvey’s comments were a reaction to REB’s story Revolutionary property investment service launched, in which Australian Properties International subsidiary Seekology broke the news that it is offering its buyer’s agency service at no cost – breaking the traditional buyer’s agent mould.
But Mr Harvey said red flags instantly start waving when words like ‘the seller pays the fee’ and ‘your perfect property for free’ start to appear, because property advisers will ultimately act for whomever is paying their fee.
Companies need to make up their minds as to which side of the fence they are sitting on, he told REB.
“Calling yourself an independent buyer’s agent while selling property is simply dressing up the wolf in sheep’s clothing.
“True, buyers’ agents have a fiduciary duty by law to act in the best interests of their clients and this is legislated in each individual state’s real estate law,” Mr Harvey said.
He also said that usually agents who want to work for free do so because they want to buy developer stock, or take their fee from the vendor.
“This is hardly exclusive or independent advice,” Mr Harvey added. “Essentially, these ‘free buyers' agents’ are selling agents in disguise. They have a huge financial incentive to help you buy that property, and that’s not necessarily in the investor’s best interest.”
Seekology unveiled its new business model on Wednesday. It said it would find suitable properties for buyers, but instead of the buyer paying for the service, it would be paid by the seller or the seller’s agent.
Claiming the new service will save buyers thousands of dollars, Tim Godden, national director of Seekology, said it was established to break down ‘unnecessary’ price burdens, and to make the property market more affordable for investors.