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Home / Real Estate
Jul 21 2016 at 1:30 PM Updated Jul 21 2016 at 1:30 PM Save article
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Home buyer's agents: what you need to know
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Buyer's agent Frank Valentic, best known for his role on The Block, caught taking fees from buyers and sellers.
Supplied
With buyer's agents' fees as high as 3 per cent of the value of the
property they find for you, does it really pay to use their services?
Further, if you're selling a property as well, you'll also be paying a
real estate agent about 2 per cent of your sale price – in total a
by Duncan Hughes
whopping 5 per cent across the two transactions.
Some buyers have found their services invaluable, helping them locate the right
property as well as negotiate price. But buyers need to check the qualifications,
experience and independence of their agent.
Some claim to be providing a bespoke service when, behind your back, they're
actually receiving commissions from sellers and kickbacks from developers.
Properties
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Checklist
For Sale Via Public Auction 1
September 2016
For Sale
17 Jumal Place SMITHFIELD NSW
Industrial / Warehouse
13,444m²
Contact agents
Ten questions to ask a buyer’s agent
1 What specialist knowledge do they have of the overall market and the
specific property?
2 Do they have a䔩砀iliations with developers, lawyers, accountants or real
estate agents that could create conflicts of interest?
3 How long have they been in the business? Check on their industry
knowledge and contacts.
4 How well do they know the postcode, property class, market where you
want to buy?
For Lease
Level 1/379 Collins Street MELBOU…
Offices
164m²
5 How are they paid? Fixed fee, commission, a mixture of both? Is there a
flat fee and additional charges for extra services or does one fee cover all?
6 How experienced are they in property transactions? Can they read
contracts and interpret building and pest reports to provide useful
intelligence?
7
Are they licensed with professional indemnity? Every state and territory
has di䔩砀erent licensing requirements so ensure authorisation with relevant
body.
8 Are they a member of a relevant professional institute? Have they had any
issues with the industry regulator that might create concern about their
qualifications and practices?
9 What ongoing management services are provided?
10 Can they provide client testimonials and references? Ask to speak to
previous clients and get information on recent purchases. This
information could provide insight into their specialty areas.
SOURCE: WAKELIN PROPERTY ADVISORY
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Former industry kingpin Frank Valentic, who was a judge on The Block, a hit reality
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Valentic, who claimed to be a buyers' agent, bought four apartments and then on-sold
each to different purchasers acting as the owner of the apartments and having his
company, Advantage Property Consulting, represent buyers.
http://www.afr.com/real­estate/buyers­agents­what­you­need­to­know­20160719­gq93m8
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towers rise in value,
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20 mins ago 2/5
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Home buyer's agents: what you need to know | afr.com
Valentic, whose real estate licence has been suspended for six months for professional
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21 mins ago "A buyer's agent needs to act exclusively for the buyer," says Rich Harvey, president of
Real Estate Buyers' Agent Association, a professional body that sets and monitors
professional standards.
The agents are typically engaged by luxury and prestige buyers in a discreet sector
where nearly half the properties are sold off-market, which usually means the
property has not been widely advertised.
director of propertybuyer, a Sydney-based agency.
Advertisement
"Members only get paid by the buyer," says Harvey, who is also founder and managing
"Someone calling themselves a buyer's agent who receives kickbacks or commissions
from other parties is not impartial," says Harvey.
Requirements
Members must be fully licensed real estate agents in the state or territory they
operate in, have a minimum of two years' experience as a buyer's agent, five years'
experience in the property industry and hold professional indemnity insurance.
"They must be able to offer advice to the buyer without fear or favour," Rich says.
A Sydney-based yoga teacher, who does not wish to be named, recently used Debbie
Upward, a buyer's agent and principal of Upward Real Estate, to find, negotiate and
settle a one-bedroomed apartment in Maroubra, 9 kms east of Sydney's central
business district.
The yoga teacher says she decided to seek help after weeks of fruitless and frustrating
online searches, weekends spent inspecting properties and unsuccessful attempts at
bidding.
"I was also flabbergasted by what people were paying," she adds.
She negotiated a three-month (extended to four because it was in winter when there
were fewer sales) contract that cost 2 per cent of the sale price, or $13,750.
How they are paid
In return properties were found for her, she was driven to open houses each
Saturday and, when the right property was found, settlement was negotiated.
"I was paying for her industry knowledge and experience. It was money well spent.
I've got a little gem," she says.
Agents' commissions, fees and expenses charged should be set out in writing and be
based upon the level of service.
It can be a percentage of the fixed amount for the property, with a maximum
negotiated by the agent and client.
Fees range from 1.5 per cent to 3 per cent of the purchase price to source and secure a
property and between 0.5 per cent and 1 per cent of the purchase price to secure a
property the client has already found.
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The price for bidding at an auction or negotiating a contract of sale appears to vary
widely. Agents quote from $200 to $1000 for turning up, bidding and finalising a
contract.
Are they impartial?
Basic fixed fees for a complete service involving finding a property, buying, settling
and finding a tenant are $12,000-$15,000. But these will vary depending on the value of
the property, complexity of the deal and time taken.
By contrast, a real estate agent is generally paid a commission upon completion of a
sale.
Lucrative incentives for unscrupulous operators claiming to exclusively represent the
buyer – or failing to disclose other interests – can include fees from both the buyer
and seller plus other incentives, such as kickbacks from developers.
LJ Hooker Real Estate Agency, a national network of real estate franchises, has a
separate agency it claims provides independent, impartial advice.
Principal of the buyer's agency Kiril Ruvinsky says there is no conflict of interest
between the real estate and agency.
"We do not sell any property," says Ruvinsky, who declined to disclose fees. "We
search for properties across the market. The association with LJ Hooker is irrelevant
when it comes to recommending property."
Conflict of interest
Other agents claim they can demarcate their work both as estate and agents by not
recommending properties in their own portfolio when acting as a buyer's agent.
For example, Adrian Bartholomeusz, principal of Utopia Real Estate, Seaforth, about
12 kilometres north-east of Sydney, says he negotiates deals for clients buying
properties from other agents.
"If I have no specific property to sell, then I can negotiate one for my client from
another agent. There is nothing dodgy about it and plenty of agents are doing it," he
says.
He charges the client a negotiation fee and another fee if the deal is successful.
"I definitely cannot be an estate and buyer's agent at the same time – that would be a
conflict of interest. I am always careful to demarcate."
Richard Wakelin, director of Wakelin Property Advisory, a Melbourne-based agent
with 40 years' industry experience, says being a good agent requires dedicated focus
on specialist markets.
"They are expert at identifying, evaluating and negotiating the right property for their
brief," Wakelin says. "It is a completely different relationship to what a buyer might
have with a real estate agent."
In addition to finding the right property, buyer's agents will also co-ordinate and
complete sales and contracts, surveys, inspections and insurances.
"They should also have strong relationships within the market that come from years
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of operating with real estate people," Wakelin adds.
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