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Australia’s leading industry body for buyer’s agents has revealed the red flags to watch out for when separating “the wheat from the chaff”.
In recent years, Melinda Jennison has been concerned by a notable increase in buyer’s agents who value quantity over quality.
Jennison, who is the president of the Real Estate Buyers Agents Association of Australia (REBAA), has delivered a powerful warning about buyer’s agents who are “clearly more interested in nabbing upfront fees from their clients and then doing to absolute minimum to fulfil the briefs”.
“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,” Jennison said.
“Buyers caught out by unethical buyer’s 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.”
According to the REBAA president, there are six red flags to watch out for when choosing a buyer’s agent.
1. Large number of clients
Beware of buyer’s agents who boast that they service many buyers at once – this is a strong indication that they prefer large volumes of clients over quality service provision.
“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,” said Jennison.
2. Competing briefs
Within the small pool of clients who they currently represent, the buyer’s agent should not service customers who have exactly the same brief.
“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,” Jennison said.
Diversity of location, budget, size, condition and property type makes for a more ethical buyer’s agent.
3. Only buys off-market
Buyer’s agents who claim to source all of their properties off-market is “a big red flag” according to Jennison, who noted that these properties “often require a premium to be paid”.
In addition, sourcing all properties is highly unlikely, and is a sign that other claims the buyer’s agent makes may also be false.
4. Short time frames
“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,” said Jennison.
As with other overblown claims, time frames that seem too good to be true probably are.
5. Pressure tactics
Jennison warned buyers to beware any claims that create a sense of urgency, such as claims that the buyer has missed out on an off-market opportunity or a special retainer fee unless they sign up on the spot.
“Ethical buyer’s 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,” said Jennison.
6. Unlicensed
Finally, Jennison noted that quality buyer’s agents are “appropriately licensed in every state they buy in” and are “members of industry associations such as REBAA”.
In addition, she stated they are “more than happy for prospective clients to speak with current or former clients for objective testimonials”.
