Today, real estate agents often find themselves dancing a commercial tango with buyer’s agents. Australia’s highly competitive property market can resemble a buying frenzy. Owners and sales agents engage with prospective property investors, aspiring first home buyers, potential owner-occupiers and their buying agents.
In many ways, sales agents and buyer’s agents represent two sides of the real estate coin.
Given the contrasting roles sales agents and buyers played in a real estate transaction, it is clear a sales agent cannot represent a buyer without raising the spectre of a conflict of interest.
Role of A Sales Agent
One critical question posed by Australia’s property market dynamics, is the vexed one of can a sales agent co-exist and work with a buyer to achieve a great result for both parties?
Every sales agent represents the vendor. Their only mission in life is to achieve the best price possible on their client’s behalf. End of story.
Given a typical buyer is out to buy the best possible property in line with their investment strategy, at the lowest possible price and with the least amount of drama and delays in completing the transaction, it’s hard to see how a sales agent can ethically work closely with a buyer.
Role of A Buyer’s Agent
In any real estate transaction, it’s inevitably the buyer who does most of the heavy lifting. Responsibility for getting the transaction completed lies predominantly with them.
Buyers or their agents should ensure they are fully informed about the property. Posing the right questions about the property to the sales agent, evaluating their reply, sourcing a reputable pest and building inspector, engaging a professional Conveyancer to check the property title – it’s all up to the buyer or their agent and the process can make for a long list.
Then there’s the delicate art of a sales negotiation, negotiating the price and hammering out the terms. Again, all this lies on the buyer’s shoulders.
Plus, every buyer needs a Plan B in case the purchase doesn’t go to plan or veers off track. Unless the buyer engages a buyer’s agent, they are left to their own devices to navigate the transaction process!
Where Sales Agents and Buyer’s Agents Can Mutually Benefit
Sales agents benefit from dealing with a buyer’s agent who understands market dynamics and industry processes. Dealing with a property professional helps a sales agent to cut through to the chase.
Dealing with a buyer’s agent can fast-track establishing their vendor’s best market price without burning time and effort chasing dead ends.
For their part, a buyer’s agent understands the details of the contracts they’re negotiating and knows what questions to ask. Not every property’s selling features can be communicated via a video fly-through or glossy images.
Inadequate information and poor due diligence can derail a transaction. This is frustrating for both sides. Confidence is integral to the property market.
Sales agents are often faced with numerous potential buyers chasing a single property. Servicing their enquiries and information needs can be time-consuming. Similarly, sales agents need to work with sellers to create a continuous pipeline of high-quality listings for their business.
Buyer’s agents can streamline the purchase process for the sales agent while ensuring their clients feel confident they have a dogged advocate on the ground, determined to deliver a quality outcome for them.
For their part, buyer’s agents also need to build professional relationships with sales agents. After all, these are the people they source properties from. Those selling agents represent the source of the property seed stock the buyer’s agent’s clients are seeking.
Ultimately, in any sales negotiation, the price a vendor is satisfied with is the price a buyer’s agent’s client is prepared to pay.
Avoiding Conflicts of Interest?
Many professional real estate industry associations would deem a sales agent representing a buyer a conflict of interest. Remember, the sales agent always represents the vendor. The vendor is their client and the source of their income.
A prospective buyer may genuinely believe a sales agent is being ‘nice’ to them in answering their questions and proving them with information and even advice. However, when buying property, it’s useful not to lose sight of the phrase – Buyer Beware!
The reality is the sales agent is looking to build up interest in their listed property and stimulate competitive offers when a property is listed for private sale, or bids when the property goes to auction. The name of the sales game is to extract as full a price as possible from the buyer. They’re ultimately acting on behalf of their client – the seller!
Final Observation
In any property transaction, there are occasions where sales agents and buyers can cooperate to successfully conclude a transaction. Seamless, transparent and equitable property transactions where both sides understand their respective roles, can deliver a drama-free, seamless purchase and sales experience while flagging potential conflicts of interest early enough in the process to be dealt with.