How Buyers Advocates Have Dramatically Changed the Market - October 2023
October 31, 2023 / Written by Rich Harvey
Australian real estate is one of the most dynamic sectors of our economy. The way we have adapted to rapid changes across the property landscape is impressive.
Not too many years ago, the only way to find a home was to directly contact each local agent in a suburb and see what listings they had. It was even the case you might climb into an agent’s car and take a drive around the suburb to look at each home.
Nowadays of course, you’re just a few clicks away from seeing every publicly listed property that meets your criteria. You can set up alerts, build an open-home inspection calendar and even find recent sale prices for comparable sales.
But the rapid pace of change in how we buy property has really accelerated in the past few years, particularly in relation to the professionals now available to assist purchasers.
By understanding these “buying revolutionaries” and what they do, you not only stay ahead of the process, but often beat out the competition in securing an excellent home.
Here are some of the fast-paced professional evolutions I’ve seen across the property landscape lately.
A profession which was virtually non-existent 30 years ago is mine… the buyers’ advocate or buyers’ agent. While there were some small operators opening in Australia as far back as the mid-1970s, it’s taken decades for the role to become mainstream.
It’s a service that was more established overseas with the United Kingdom and Canada having buyers’ agents early on. By far the country leading the buyers’ agent charge is the United States. Almost every property transaction in the US has a professional representing the buyer’s side of the transaction.
The establishment of the Real Estate Buyers Agents Association (REBAA) in Australia in 2000 was a watershed moment for the profession. I am proud to have been REBAA’s president for more than four years and I continue to be a very active member of the association.
REBAA has watched over the evolution of my profession for more than two decades, and it shows. The vocation now boasts many accredited, licenced and experienced buyers’ agents, and the Australian public has really taken to utilising them in the past five years.
To that end, the Property Investment Professionals of Australia (PIPA) released its 2023 Investor Sentiment Survey just a few weeks ago which revealed 41 per cent of respondents sought out the services of a buyers’ agent or advocate.
And as a profession it’s become such an attractive option that we’re now seeing an increasing number of selling agents choose to flip from their roles into becoming buyers’ agents.
Independent mortgage brokers
Long-term allegiance to a single lender went by the wayside many moons ago. Borrowers grew to realise there was little benefit in attaching yourself to one bank for all your finance needs.
It was once the case that you knew your local branch manager and could have a one-on-one discussion to arrange a loan, with tentative approval occurring almost on the spot over a cup of tea. I remember getting approval in 10 minutes back in the late 1990’s after providing my payslips to a local bank manager.
But our evolution toward a more rigorous lending landscape has put paid to that approach. In fact, new customers are often able to secure far better loan terms than long-standing clients now.
This has fuelled the rise of the independent mortgage broker.
These professionals guide you through the borrowing process. Not only do they assist in pulling together the required information for a loan application, they’re also skilled at finding solutions to the unique challenges some borrowers might face.
Best of all, independents will secure a loan with the best possible terms on their client’s behalf whether it be from a big bank, second-tier lender or some other option.
By casting this wide net, the mortgage broker removes any suggestion of lender bias.
And this independent approach is working. I’d suggest more than half of the deals we see involve a mortgage broker – a proportion that’s been rapidly rising in recent years.
Independent selling agents
Selling agents usually cut their teeth in big franchise agencies. These operations were seen as essential for anyone wanting to make their mark in sales. Why? Because franchises paid big money to advertise their brand to attract buyers and sellers through their office doors. As a selling agent, you once needed to be rostered on so when a vendor came to the office, you could make a pitch for their business.
Nowadays that’s changed dramatically, and at a rapid clip. Yes, the big franchises still exist, but their importance as a facilitator of both listings and sales for their agents is diminishing. Now, the agents themselves have become the brand. They will specialise in certain locations, property types or price points (or a combination of those) and market their expertise in that sector. Sellers will seek them out when it comes time to list. Many of these professionals are now opening smaller, independent businesses with administration supplied by third party platforms such as UrbanX or Agent Admin.
Given that the importance of not just the agency but the experience of the individual agent is so crucial, we have also seen an increase in the role of the vendors’ advocate. This is a professional who will assist sellers in selecting the best possible agent to market their property. A vendors’ advocate can cut through the spin and ensure the agent a seller chooses has the experience and skills to secure an excellent price for their home.
Related to the evolution of professionals is perhaps one of the most striking changes I’ve seen. It’s how much easier it’s become to trade property over vast distances.
The accessibility of advisors is key to this. Most can be contacted almost any time of day and will respond quickly to queries. Independent representatives such as buyers’ agents can easily represent their clients regardless of their location.
Getting information about the property is instantaneous too.
The result is that the entire Australian property market opens up. There’s no longer a need for homebuyers or investors to physically inspect the property they want to buy. Quick decisions can be made remotely, and the advent of services such as DocuSign – which allows you to contract from anywhere via your mobile phone – means being locationally removed is no longer an impediment to success. And our buyers’ agents use WhatsApp to provide detailed photos and videos of the subject property – so they deliver a virtual property inspection service for remote clients. They also have connections to local solicitors and building inspectors to make the buying process seamless and stress free.
It’s not just professional services that have helped fuel change. Another area which has brought upheaval is access to comprehensive data. For individual properties, that will include sales and marketing histories, land sizes, house plans, nearby services and facilities, flood and heritage protection zones… a whole host of important information is readily available, and most of it is free.
It’s also much easier to find comparable sales data along with suburb level statistics such as median sale prices and rentals, days on market, listings numbers, rental vacancy rates and so on. There’s also the challenge of getting the most recent sales data – as with “sold” listings where the price is typically not disclosed. Buyers Agents are much more likely to uncover this important price data due to their close professional relationships with local agents.
All of this data is most valuable to those who can correctly interpret it however. You need someone who is unemotional and has years of training and experience to draw the best from the information. This sort of specialist will also make more accurate assessments of value which in turn lead to successful transactions.
The variety of buyers and sellers operating in the modern market is vast, and the way each conducts their business can vary dramatically. It is for this reason that staying abreast of advancement and utilising the range of professional services available are essential to getting the best possible results from your property dealings.
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