Buyers Agent Beware Checklist
Since PK Property introduced the concept of Buyer’s Agents to Sydney in 1997, the industry has evolved rapidly Australia wide. It has been standard practice to engage the services of a Buyer’s Agent when purchasing property in the USA and many other parts of the world for a number of years, and it is finally becoming standard practice here in Australia.
Below is a checklist we have compiled to help you identify if you are engaging a genuine industry professional. Many overseas clients have no choice but to hire a Buyer’s Agent based on nothing more than a website.
This checklist is designed for people interested in property investment in Sydney but cannot choose their Buyer’s Agent in person, and for those who simply want to decide which Buyer’s Agents they will meet with.
If you are unable to answer YES to the following questions after researching your Buyer’s Agent, we strongly recommend you think twice about engaging their services.
Choosing the wrong Buyer’s Agent can cost you valuable time and a lot of money.
Even if the answer to these questions is YES, it is most important the proposed Buyer’s Agent provides you with written evidence of their claims along with client testimonials which clearly indicate a high level of negotiation skills and successful outcomes.
- Does your Buyer’s Agent have personal dealings with real estate sales agents throughout the industry?
1. Does the Buyer’s Agent have the required licenses from fair trading, and also hold at least $2m in Professional Indemnity Insurance?
Should something go wrong with your property purchase you will need to make sure that your buyer’s agent has all licenses and insurances up to date, otherwise you will have no recourse.
2. Is the Buyer’s Agent a fully licensed real estate agent with no less than five years experience and have they been a Buyer’s Agent for at least 3 years?
If the Buyer’s Agent you are considering engaging has not been a real estate agent in the past for at least five years, they may not be adequately experienced to negotiate the lowest possible price for the purchase of your property. Be wary of anyone who does not hold a full real estate license and whose only qualifications are the result of a 10-day course, and remember that a Buyer’s Agent who promises you low fees is also likely to deliver poor service and a disappointing result.
3. Are they a full member of the Real Estate Institute of NSW and The Property Buyer’s Agents Association of Australia?
This will provide some reassurance that they are operating to a professional industry standard.
4. Does your Buyer’s Agent do everything themselves?
Some Buyer’s Agents will say ‘yes’ to everything. They may say they have an office close to where you want to purchase, when in fact their only address is a post office box because they work from home and nowhere near the intended purchase location. A sole operator who does everything themselves cannot possibly offer a high standard of service when searching and negotiating a property on your behalf. Many are trying to run their business singlehandedly which ends up adding to the time it takes to deliver your dream home or investment. You need a dedicated team of professionals focused entirely on the purchase of your property.
5. Do they expect a percentage of the final purchase price?
It doesn’t make business sense or create an incentive to purchase the property at the lowest possible price if a Buyer’s Agent charges a percentage of the final price. The higher the price, the greater the cost to you.
6. Does your Buyer’s Agent specialise in the location and price range you are purchasing in?
If the Buyer’s Agent lacks a solid track record of buying in the area, you are strongly urged not to engage their services. They should be forthcoming with evidence of at least 10 recent purchases in the area backed by written and/or verbal testimonials from former clients.
7. Does the Buyer’s Agent purchase for expatriates and foreign investors?
There are many confidentialities and ‘tricks of the trade’ when it comes to purchasing for international clients to help them avoid paying above market value. You should ask the Buyer’s Agent for a list of their 20 most recent overseas clients backed by written and/or verbal testimonials. They should also be able to refer you to a reputable property manager to look after your investment while you are abroad.
8. Do they specialise in property investment?
When purchasing property for investment purposes only, certain experience and strategies need to be employed by a Buyer’s Agent to ensure capital gain is maximised in the future. Once again, ask your proposed Buyer’s Agent what experience they have in purchasing investment property and for written and/or verbal testimonials from their last 10 clients.
9. Can your Buyer’s Agent refer you to reputable property industry professionals if you decide to sell in the future?
The Buyer’s Agent you are considering engaging should have a database of property managers, solicitors, conveyancers, architects, building/pest inspectors, tax experts, accountants, builders, property stylists, interior designers and real estate agents you can contact should you consider selling your property.
10.Does your Buyer’s Agent have personal dealings with real estate sales agents throughout the industry?
A large number of properties available for purchase are not advertised to the general public. These are what we call ‘Silent Sales’. It is imperative your proposed Buyer’s Agent has developed long term relationships with all the real estate agencies so that when these ‘Silent Sales’ are available, your Buyer’s Agent is immediately informed and can therefore inform you.