There’s a saying that you get what you pay for – nothing truer than when you’re dealing with buyer’s agents. How do you distinguish a good buyer’s agent from an average one? Joining me to talk about that is Miriam Sandkuhler from Property Mavens.
Kevin: There’s a saying that you get what you pay for – nothing truer when you’re dealing with people like buyer’s agents. Joining me to talk about that – that you get what you pay for – is Miriam Sandkuhler from Property Mavens.
Good day, Miriam.
Miriam: Hi, Kevin.
Kevin: True, isn’t it – you get what you pay for. I guess that raises the question: how do you distinguish a good buyer’s agent from an average one, Miriam?
Miriam: That’s a great question, Kevin. What I say to people is it’s like any industry: there will always be those who are more qualified, more experienced, have more expertise than some others, and so like any industry, it’s important to ask the right questions of the person you’re looking to engage.
Kevin: Sometimes it’s hard to know what questions to ask, and even then, Miriam, what answers to expect, because salespeople are very good at selling themselves, aren’t they?
Miriam: Absolutely. A lot of it is really around evidence. It doesn’t matter what someone says; it’s “Where’s the evidence that you can provide to support that?” And that evidence can be through case studies, it can be through client testimonials or success stories, but particularly testimonials and case studies and evidence of expertise and outcomes is certainly something to be asking for when dealing with a buyer’s advocate.
But more importantly, to start with, you want to make sure that you’re genuinely dealing with an independent, licensed estate agent who’s acting as a buyer’s agent, because there are some selling agents who masquerade and pretend they’re buyer’s agents but they get paid by the vendor, which means they’re not – in fact – a buyer’s advocate.
Kevin: Is there a certain qualification that you need to have to be a buyer’s agent?
Miriam: No, you don’t. Sorry, I’ll take that back. You need to be a licensed estate agent, and that way you’re legally allowed to transact in real estate and charge for those services. But where someone isn’t a licensed real estate agent – they might be an accountant or a solicitor or just someone with no qualifications whatsoever in terms of a real estate agent’s license – they can’t charge you for those services if they don’t have a qualification.
Kevin: It’s a very gray area, because traditional agency is where a real estate agent will deal with both the buyer and the seller, but they normally get paid by the seller. That’s where they earn their commission. Is it possible for an agent to get a commission from both sides, if they declare it?
Miriam: Legally, they shouldn’t be getting paid from both sides. That’s an absolute conflict of interest. Whether they declare it or not, they’re legally not entitled to do that.
Kevin: What about if it’s in the same office? You might have a seller’s agent and a buyer’s agent in the same office.
Miriam: Again, I see that as a conflict of interest. You want to be dealing with people who are exclusively a buyer’s advocate or exclusively a selling agent.
The only thing to add to that is they might do a little bit of vendor advocacy, which means they’re not actually selling property but they’re helping their clients and recommending agents for their clients to deal with if, in fact, they do have a property to sell.
That often comes about as a lot of us have got very good relationships and we know who the good, the bad, and the ugly agents are on the selling side, so we can really cut down and shorten that process for potential vendors.
Kevin: Use of buyer’s agents is becoming much more accepted in Australia. For quite some time, it wasn’t, and it’s very accepted in the States, as an example. Now, there is an organization in Australia that we’ve talked about, the Real Estate Buyer’s Agents Association of Australia. Is that a good recognition?
Miriam: Absolutely. At a minimum, you want to be dealing with somebody who is a member of the Real Estate Buyer’s Agents Association, and that’s because they have code of conduct and minimum qualification standards that we have to meet to be able to be a member. Really, that’s the only body in Australia that can really help consumers to have access to qualified or pre-qualified buyer’s agents.
Kevin: I have to say that there are heaps of people out there who have written books. Does that necessarily make them a good buyer’s agent or a good expert?
Miriam: Myself included in that category!
Kevin: Well, I’m sorry.
Miriam: No, that’s fine. Look, it depends on the content of the book. And I’m not intending this to be a plug, but in my experience, a lot of people write books specific to a single strategy that they’ve implemented, that they recommend, that they’ve done, and suddenly everybody else should be doing it. My book takes more of a financial planning approach to direct property investing and is a series of steps like an expert to get an outcome in a certain manner.
I think it depends really on the content of the book, and not all books are great quality and not all books are bestsellers, and not all books necessarily meet what the investor’s needs are.
Kevin: To muddy up the waters even further, there are a lot of people also who do seminars. They go on the road with seminars and purport to help people. We’ve spoken in the show before about some of those, especially when they sell property. They’re the ones you have to be very careful of.
Miriam: Again, they’re not buyer’s agents; they’re selling agents. There’s a lot of what I call “edutainment” that goes on in these particular road shows and seminars. They get so-called experts up there, they play whiz bang music, they show slides, they put a whole lot of stuff up there without necessarily any evidence or data to support what they’re saying. And then there’s usually a limited opportunity at the end of it, and if they sign up now, they’ll have the opportunity to get in and try this whiz bang new strategy or concept or whatever it is they’re selling. The main point there being that they are selling agents. They are not a buying agent.
No buyer advocate will ever engage a client with a property that they’re recommending to them, because their role is to get a brief, to confirm that brief or to potentially even develop a strategy with the client, and then once that’s signed off, they will go into the open marketplace and usually buy established property for their client. But you don’t come to a client with a property solution. That’s what a selling agent does.
Kevin: We’ve had a big discussion here. Let’s clarify a little bit. Getting back to the earlier question, how can we distinguish a good buyer’s agent from an average one – bullet points?
Miriam: They absolutely have to be a licensed estate agent operating as a buyer’s advocate. They have to be absolutely independent and only deriving income from the buyer, not from the vendor or no kickbacks from a selling agent.
You want someone with at least three to five years’ experience in buyer advocacy, because there are a lot of ex-selling agents who jump into buyer advocacy thinking it’s easy, but they often learn the hard way that it’s a lot harder to be a buyer’s advocate, it’s harder to get outcomes, and you can’t take the same approach that you do in selling when it comes to buyer advocacy.
Qualifications: you want to make sure that if someone has an investing qualification in addition to being a buyer’s advocate, then that means they have investing expertise, which is a whole skillset in itself.
And some may just specialize in owner occupiers and limit themselves to particular territory. Other buyer’s advocates, such as myself, might have investment qualifications – as I said – and we buy in multiple areas according to strategy and brief.
You want to be able to check whether or not a buyer’s advocate has been awarded any recognitions, so if they have awards or something pertaining to their expertise as a buyer’s advocate.
Ideally, you absolutely want them to be a member of REBAA, the Real Estate Buyers Agents Association, because they’ve invested and they meet minimum standards in the industry and they work to a code of conduct.
As I said, testimonials, success stories: you want evidence to the outcomes they’ve been able to get for clients to support what they’re saying. Yes, things like a book or media commentary do identify expertise, but it obviously depends on the content of the book.
And you really want to be comparing apples with apples. Not every buyer’s advocate is the same. The questions you ask of one, you need to ask of another if you’re going to compare, and see what you’re getting form that point of view.
But one thing I will say is people often think they know what buyer advocacy is and their focus becomes about price and price alone, and that’s where they frequently make a mistake, because it’s not so much about the price but the value delivery of what they offer. And more importantly, you get what you pay for in life, as we all know.
Kevin: That’s right.
Miriam: And to sign off on that, I frequently see situations where people think it’s easy – “I’ll do it myself” – but if they’ve been searching for six months and they haven’t bought in that time, and the market has escalated and risen in that time, frequently it has cost them more in terms of the market increasing and the shortfall that they now have than if they had employed a buyer agent at the beginning. They would have paid less, got a really good outcome in a timely manner, and they now wouldn’t be behind or potentially missing out on getting into the market.
Kevin: You raise some very good, valid points there. Miriam Sandkuhler has been my guest, CEO and buyer’s agent. She’s at Property Mavens. Miriam, thank you so much for your time.
Miriam: Thanks, Kevin. I appreciate it.