Buyers warned to avoid ‘free’ buyer’s agents
Industry experts have warned about the emergence of “free” buyer’s agent services.
The Real Estate Buyers Agents Association of Australia (REBAA) has raised a red flag regarding the growing trend of advertisements for “free” buyers’ agents, noting that these services are not what they seem, and risk obscuring the important function of real buyers’ agents.
REBAA president Melinda Jennison shared that she was recently emailed a “free” buyer’s agent service promotion, commenting that the advertisement looked to have been “targeted to mortgage brokers from a development marketer”.
“The use of the term ‘buyer’s agent’ as well as the addition of some mainstream media logos is an attempt to give the business legitimacy, when in fact what they are offering has nothing to do with buying a property and everything to do with selling one instead,” Jennison said.
She highlighted the importance of considering whether any party in a property transaction has a vested interest in the outcome, explaining that “free” buyer’s agents are commonly trying to urge buyers to either “buy developer stock or take their fee from the vendor”.
Jennison noted genuine buyer’s agents will always charge a fee for their professional services, given that they “work exclusively for the purchaser”.
“Essentially, these ‘free buyers’ agents are selling agents in disguise. They have a huge financial incentive to help you buy that property and that’s not necessarily in the buyer’s best interest.”
The president advised that it’s important to educate consumers, stressing that they should always check the credentials of any buyer’s agent and ensure they are appropriately licensed in the state or territory where a property is being purchased.
“Buyers should also ask questions about their experience, time in the industry, research methods, relevant industry body membership status including if they are a REBAA accredited member, as well as how they are paid and by whom.”
She said these checks would help buyers to discern individuals or companies who outwardly present themselves as buyer’s agents, but will not offer the same level of service that a professional provider would.
Jennison emphasised that consumers relying on professional help should feel “confident” in those relationships and be able to “trust that recommendations are made with their best interests in mind, rather than being influenced by commissions or financial gain from suggesting property options”.
This sentiment was echoed by Property Investment Professionals of Australia (PIPA) chair, Nicola McDougall, who commented that “free advice has long been the domain of spruikers” and decried the tactic as “just another example of unscrupulous operators seeking to profit from unsuspecting property buyers”.
“Regardless of where consumers find their property investment information, it is vital that they only ever work with professionals who are appropriately licensed, independent, and who are working exclusively for the buyer,” said McDougall.