Many agents think they can fulfill the role of a buyer’s agent without charging the client. They simply can’t
Topic – The industry from the inside out
Mentor – Veronica Morgan
- Should sellers agents bid at auction for a future seller?
- Not all buyer’s agents are buyer’s agents.
- There should be different licensing
Tech Talk with Joel Leslie – What is the internet of things and how does that work with us and how can we benefit from understanding it?
Kevin: Well here we go, big subject today with our guest mentor. All this week I’m talking to Veronica Morgan who is from Good Deeds Property Buyers. They are buyers agents and also co-host of the Elephant in the Room podcast, property podcast. Today Veronica we are going to talk about the role of the sale’s agent and this representing both the buyer and the seller. Obviously representing the seller because that’s where the commission comes from. But can they also give advice to a buyer?
Veronica: Yes. Interesting.
Kevin: Well I, here am I asking a buyer’s agent, so I know what the answers gonna be, but I just think we need to talk about it though.
Veronica: Yeah, absolutely. Look obviously and just to make it really clear, I am a licenced real estate agent. I used to be a sales agent and now I’m a buyer’s agent. So I’ve done both.
Veronica: A sale’s agent does need to look after buyers. Of course they do, they need to be able to handle their inquiries, to explain the process to them, to you know, show them the property, they need to be able negotiate with them, they need to actually keep them in the fold, keep them informed all those sorts of things in order be able to get the, you know to fulfil their objectives, which is to sell the property at the best price for their vendor.
Veronica: The thing is though, that as you know, certainly in Sydney we’ve noticed this, but I know in other parts of Australia, where listing numbers have been falling over the recent years. So we might have had a boom and we may have, you know, having a crash or whatever you want to call it now. But the sheer reality is when you look at the amount of property that is transacting over the last say five years. There’s been a steady fall in the numbers of properties that have been transacting.
Veronica: And yet when we have had a boom, certainly in Sydney and Melbourne you get a proliferation of new agents entering into the market, cause they want to make their money, you know in a hot market, where it’s easy to sell. And so what you get there, you get a pie that is shrinking and you get more people trying to get an increasingly smaller piece of those pies. And so, what they’re trying to do is actually increase their relevance. And by increasing their relevance, one of the things that a lot of smart, and they’re smart agents, they’re doing this, they’re actually proactively going out there and looking to help buyers.
Veronica: And I get it, I do get it. One of the reasons they do it for instance is because they’re trying to actually get that person’s listing when they’re ready to sell. And so, there’s a lot of this sort of happening.
Veronica: And, we’ve been interviewing agents on the Elephant in the Room podcast. And you know, time and time again they tell us about this. And they are quite happy to talk about, you know the advice that they’re giving buyers, the advice they give buyers on properties that they’re not even selling themselves and why that’s a good thing. But I think fundamentally and I know that they think they are doing a good thing for the buyer, but fundamentally they’re actually doing marketing for themselves.
Kevin: Well it’s not totally the agents fault here you know? Just I oughta come to their defence just very quickly and I know you’re not picking on them. But you know it is really buyer beware. I mean it-
Kevin: It’s not only the agents who put that theory forward. That’s the law and it’s, the solicitor will tell you that, you know buyer beware. Do your own due diligence. You are representing yourself. Don’t think you’re being represented by an agent in this.
Veronica: Yeah. One hundred percent, I absolutely believe that buyers need to be aware so that they can beware. And that’s one of the reasons that why, why we have the podcast. And it’s one of the reasons why I talk about these things. It might be a little unpopular, but a sales agent may think I’m having a go at them, I’m not. But when we’re talking about this pathway to professionalism which is a big push in the industry and I’m absolutely all for. We have to understand that we cannot be everything to everybody. There are specialist skills. I no longer try to sell property, I am not, my skills are not sharp in that area any longer. Sales agents need to understand they are not skilled in helping buyers determine value, determine the purchasing strategy, work out whether that property is in fact suitable to their needs. There are a whole range of skills that a buyer’s agent brings to the table that a selling agent just simply doesn’t have or doesn’t exercise day-to-day in their business.
Veronica: And so, by recognising that area of specialisation, I am good at this. And when I am outside, you know the bounds of my skillset, in order to have the buyer or the seller or whoever it is to have the best outcome, they need to go to an expert in that part of the deal.
Veronica: You know and I’ll just give the example of property managers versus sales agents. We’re all real estate agents, but you very rarely get somebody trying to do both jobs.
Kevin: If, an agent were to, if the scene changed and we became a bit more like America, where there was a clear definition, you’re either a seller’s agent or a buyer’s agent. What impact do you think that would have on the amount of property that sold? And the time it takes to sell them? Because then you’ll have two key negotiators, one representing the buyer, one representing the seller. Which is going to put a bit of a halt on emotional buying. It’s going to put a bit of a halt on premium buying and maybe even make it longer to sell a property. Your comment on that?
Veronica: Well, I would argue, well for starters, lets look at the American system is very very different to the Australian system. In America they, the vendor pays maybe five or six percent seller’s fee or seller’s commission. And that gets split in two between the buyer’s agent or the buyer’s advocate or the brokers they’re called, and the seller’s agent. And quite often you’ll have a broker actually does do both jobs and they jump from one side of the fence to the other. But in most states, I think all but two states I think from memory, it’s actually illegal to handle both sides of-
Kevin: Both sides.
Veronica: The transaction, and so it should be. A lawyer can’t do it so, you know. So the model over there is very different. I would actually say, you know and I’ve gotta be careful how I explain this I guess but, I know when we’re involved with a client and we’ve found a property or they’ve found a property they’re really keen on and we’re in the evaluation process and negotiating for that property. You know especially in a slower market like it is now, that sale will get done quicker because we’re involved. As long as it’s the right property at the right price and all of those things are covered off, we’ve done our due diligence, et cetra, et cetra.
Veronica: Because we give the client confidence that it is the right property for them, assuming it is, you know. We give the client confidence in terms of the right price to pay in the current market conditions. And then we also give that client confidence that we’re following a strategy of negotiation with that agent so that they don’t feel their being strung along, or manipulated or whatever they may feel. You know if they were handling it by themselves.
Veronica: So I do think that having two professionals, one on each side of the fence, can actually facilitate a transaction a lot quicker than if you’ve got a very uncertain buyer, not really sure what to do, how to jump, how to negotiate, how to navigate the market conditions and how to make sense of them.
Kevin: Great stuff, very good conversation, Veronica Morgan my guest. We’re gonna touch tomorrow on technology, but not in the sense that you’ve heard us speak about it in the past because technology certainly is reshaping how we do business. But it’s also bringing about some emerging problems in terms of additional income stream which we’ll talk about tomorrow, when I’m rejoined by Veronica Morgan.
Kevin: Thanks for your time Veronica, talk to you in the morning.
Veronica: Thanks Kevin.