Buyer's Agent vs Real Estate Agent?
"What's in a name? That which we call a rose By any other name would smell as sweet,"
Shakespeare eloquently put it in "Romeo and Juliet." However, when it comes to real estate agents, names matter, and they hold the key to understanding the intricate roles of these professionals.
In Australia, the term "Realtor" is not commonly used, although some agents across the Pacific in the US proudly embrace it. In the United States, a Realtor is an agent who serves either the seller or the buyer, striving to find the perfect match for their clients. As you might suspect, this dual role can create potential conflicts of interest, a concept that Australians often struggle to comprehend.
Buyer's agent, Seller's Agent, who else wants in?
So, you might wonder, how can you be certain that an agent has your best interests at heart when searching for your dream home as a buyer? It's a valid concern. If an agent has a collection of properties to sell, their primary incentive is to move these properties quickly. This means you might not have access to the full spectrum of the real estate market, potentially forcing you to settle for a house that the agent is eager to offload onto you. To mitigate this, agents in the US typically earn a commission from the sale of the property, usually around 4-6%. This commission is then divided among the multiple brokers and agents involved in the sale, which could be as many as four different parties:
Listing Agent
Listing Broker
Buyer's Agent
Buyer's Broker
The fact remains, the agent is working for who ever pays them, If your agent gets paid commission from the sale of the property by the seller, then there is a good chance the agent is working for the seller.
When it comes to Buyer's agent Vs Real Estate Agent argument, they aren't really in competition, rather they work together to make sure the job is done correctly.
Let's get specific, Australian Specific
Now, contrast this with the Australian standard real estate commission, which is significantly lower than that in the US. In Australia, the Listing or Seller's agent may have the seller approach them directly, handling the transaction alone. Alternatively, a buyer's agent may approach a property owner they know or have previous dealings with and negotiate without the involvement of a Listing agent. Sometimes, the Seller's agent may 'conjunct' with another agent to sell, perhaps using the other agent's contact list, in which case the commission would be split between the two agents. In both scenarios, the commission typically falls within the standard 2-3% range, depending on the agreement. Often, this arrangement proves to be the best option for both the vendor and the buyer.
In Australia, we are all familiar with the local Real Estate agent, particularly those in our own neighborhood. They keep us in the loop, staying top of mind just in case we decide to sell our homes. These agents typically act as listing agents, working for the seller. They compile all the available properties in their area and list them for potential buyers to peruse on platforms like RealEstate.com.au (REA) and Domain. In recent times, many listing agents have expanded their horizons to keep up with the demand and to protect their clients' interests. They have begun inviting their inner circle of buyers, as well as Buyer's agents, to make offers on properties even before they officially hit the market.
As a result, we are witnessing a surge in the visibility of Buyer's agents in the Australian real estate landscape. You might come across them at open houses, on social media, or through recommendations from friends. They've long been a lifeline for international workers relocating to Australia, saving them precious time and money. Now, local buyers are also reaping the benefits of Buyer's agents, securing their dream homes more swiftly and efficiently. Instead of entering a negotiation solo, facing off against a seasoned real estate agent, and often never even meeting the property owner, buyers now have expert guidance. They are accompanied by professionals who possess an in-depth understanding of the market, property construction, and the art of negotiation to secure the best possible price.
If you've been keeping an eye on the real estate market recently, you've probably noticed an unusual trend. Properties are frequently selling well above their initial listing prices or even before they are officially listed. The reasons behind this phenomenon are complex, touching on basic economics—supply versus demand. In established areas, there is a substantial demand for new properties while the supply has been insufficient for over a decade, with no immediate signs of improvement.
So what does that mean for me?
In this current market climate, buying property can be a costly and time-consuming endeavor filled with both excitement and stress. In a follow-up blog, we'll delve deeper into the reasons behind these market dynamics. For now, though, it's evident that understanding the roles of Realtors, Buyer's agents, and Seller's agents can be your first step toward navigating the real estate terrain with confidence and success.
In the realm of real estate, the adage "The customer is always right" has been a guiding principle across industries. However, in Australia's real estate landscape over the last two decades, this maxim hasn't always held true. With property prices on a steady, and at times meteoric, rise and a lack of effective representation, the average Australian property buyer has often found themselves at a disadvantage in the pursuit of their dream home. It might have seemed like the status quo was to "you get what you get and you don't get upset," but this need not be the case.
Ultimately, the goal of the entire real estate transaction is to secure the home you truly desire. While it's true that the market may still experience boom cycles, where you need to gauge when to dig a little deeper to outbid the competition or when to call the agent's bluff, this is precisely where the value of a Buyer's agent shines. We understand these agents; in many cases, we've been in negotiations with them before. We've had those important discussions, asked the right questions, and uncovered what the seller truly wants. We know how to get the agent to work on our behalf and put us at the forefront of their priorities.
Buying a house is an investment, and when done right, it can pay off in more ways than one. A Buyer's Agent is your partner in making that investment pay off sooner rather than later. We have the ability to not only read your desires but also to decipher the unspoken signals, guiding you toward the neighborhoods and property types that you didn't even know you needed. Additionally, we assist in sidestepping the common and often costly mistakes that might not be immediately apparent.
In the ever-evolving real estate market, where dynamics can be complex and opaque, a Buyer's agent is your beacon, illuminating the path to your dream home and ensuring that your investment pays off in both satisfaction and financial gain. So, in your real estate journey, remember that with the right guidance and representation, the adage holds true – the customer is indeed always right.
We offer a free 30 minute consultation for you to ask about our services and see if what we do is right for you? Contact us via the contact page on our website
Or email us at hello@paragonpurchase.com.au
We look forward to hearing from you soon.
Commentaires