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While most people soon stop enjoying their exhaustive weekend property hunting house inspections, this obsession still rules others. Commonly, I hear potential purchasers revelling in the fact they have great agent relationships and that they are being given off-market house buying opportunities. They feel the relationship is good and they are getting ready to acquire a property. They are ready to commit.
That’s great…. but be wary. The agent solely represents the vendors who pay them, and their mandate is about getting the best price for the vendor… and rightly so. So how does having this selling agent relationship work in your best interests?… Newsflash… it doesn’t.
I continually represent people who realise a little too late the error of their ways, why they were missing property, why they were continually being elevated in price, and why the transparency in discussions is just never there. This forms part of one of the biggest shortcomings with property buyers, a pitfall where they fail in the execution phase of acquiring the property.
The execution of a successful property purchase starts with the formulation of a strategy and understanding the playing field. It starts on day one. Understanding all the participants – yourselves, buyers’ agents, the property, selling agents, the legal representatives, and the vendors. All are different participants, and every property is unique.
Aligning with favourite agents and absorbing the rapport and conversation is great for a social experience but not good when your goal is to acquire a property for your family. By entertaining these relationships you can get some good market insights, but you are compromising yourself. The compromise comes from the human desire to be liked and the inclusiveness of such a relationship. The trust and satisfaction of finding a property through such relationships, and the social proof that your decision has been good and buying process sound. You have been in the vortex and have cost yourself.
What if the paradigm is changed? The influence of an agent, the price guides that are provided, and the narrative that is delivered are all flipped. The old way is giving the agent control in the narrative. A new paradigm would look to shift the control to one that favours the purchaser.
How can this be done you ask?… the answer is it is a process, it is the psychology and the strategy.
Not all agents are equal. There are some you would buy through others you would sell-through and some you just would be better off avoiding. The essence of the shift is to create a scenario where you know your pricing, a property’s fair value, and done where it is isolated from what the agent is telling you. Fair Value then becomes the benchmark for price and negotiations. To just follow the narrative of the agent is ultimately foolish and invariably leads to the purchaser negotiating against themselves. It is not about fair value but the agent’s value.
When a negotiation has been well structured the discussions on price and offers will change dramatically in their context. The locus of control shifts from being ‘selling agent dominated’ to one where the buyers are becoming engaged in honest pricing discussions. The art at this point is identifying the point of price reality where the agent will start to work for you (buyer) to close the deal. When this shift occurs, you are on the home run. It is then about the details.
I specialise in defining and creating ‘frictionless’ offers where the only consideration for a vendor is price. Such offers are strategic and cleverly constructed so that they can be executed to maximise your chances of having your offer accepted. In effect, they shift the control bias from the selling agent to the buyer… something that will increase more in a falling market.
Most purchasers don’t know what they don’t know. They feel a buying scenario is easy and they have it under control. Sure you might, but I have noticed no single transaction is identical. It is when the process stalls, has complications or hits the speedbumps that a professional Buyers Agent can help you navigate the process.
For example, when you go to bed at night they might be doing the exchange, when you having breakfast the Buyers Agent might be making an offer at an early morning inspection. It is all about the execution and knowing your value.
The irony is that it is throughout the process and getting the great end result I often hear the same thing, “I could not have done this without you”, “how did you know they were going to respond like that”, ” I can’t believe how much you have saved us”. The best advocates for a Buyers Agency service are the ones who have been through the process and benefited from it. I am regualry told by industry participants and clients that the approach I use is remarkably different to other Buyers Agents.
Listening to the selling agent is only one perspective on the value and a biased one at that. Where is your extra set of eyes in due diligence and care? How will you truly understand the property’s Fair Value and where the market is at this point. The Selling agent won’t care, and they just are not the right person to assist you here.
In the US they get it. Most real estate transactions are supported by Vendor agents and Buyers’ Agents. Why? Consumer protection ensures that professionals facilitate smooth, honest property transactions where fraudulent or misleading behaviour is minimised. The Selling Agent and Buying Agent are paid intermediatories who get the best for the cleints in a fast professional manner. Without emotional involvement things happen in a logical and effecient manner.
Quality, not Quantity – As a Buyers Agent, I am often asked how many transactions do you close in a month? My answer is “Whatever it takes”, a quality Buyers Agent is not in a rush to complete a transaction. They will not have conflicting briefs or similar clients being represented at the same time. In my case, I work exclusively. Once I commit to the client, I do not take on someone else with that brief. Why? Because acquiring a property can become intense, particularly with the multiple scenarios and problems that can play out. By being focussed on a select few each client gets a high-quality focus and commitment. Pushing numbers will have the quality of transactions to suffer immensely. If you were purchasing, what would you rather? Bespoke High-quality service or generic low-quality high-volume approach? I will outperform the latter on every occasion.
The quality of a transaction is far superior to Quantity. This is a question that is often suited to Sales Agents where their business model reflects the number of sales closed in a month. This generates their commissions and generates their fees. Buyers Agents provide more of a bespoke and personalised service where “you can run but cannot hide” you must pay attention to detail and process. You are covering your client and you are paid to do this. The results will then speak for themselves with happy clients.
