The proliferation of buyers agents in NSW and QLD is really only a recent phenomenon. 5 years ago it was quite rare to have a buyers agent working on a transaction but nowadays it seems like almost every second transaction involves one, particularly in the ‘hotter’ suburbs of Sydney, Brisbane and the Gold Coast.
As a conveyancer, there are some challenges dealing with buyers agents while representing a purchaser.
They tend to want contract reviews turned over very quickly and a lot of the time they expect out-of-hours service from their client’s conveyancer.
Not every conveyancer appreciates this additional intensity on top of what is already a very challenging job.
The plus side with this, however, is that purchasers represented by buyers agent tend to be more successful in securing properties earlier on. In our experience, the average purchaser normally requires 4-5 contract reviews before they secure a property whereas one represented by a buyers agent normally secures a property after 1-2 reviews.
But it is not just the intensity of the buyers agents approach that makes their clients more successful.
They tend to be better at selecting the right opportunities and avoiding those properties which are going to be out of the purchaser’s budget.
The perennial challenge purchasers have these days is dealing with ‘underquoting’. Unless you’re an experienced market participant, you will almost certainly underestimate just how rife underquoting is, particularly in Sydney where it is almost out of control.
It’s becoming a torrid ritual for conveyancers at the moment: almost every Monday morning touching base with dismayed buyers who got massively outbid at an auction on the weekend which sold well above the guide.
Wasted time, wasted energy and often wasted money on purchasing due diligence reports.
The good buyers agents pay very little regard to the quoted guide and instead focus on the ‘real value’ of a property, based on actual comparable data, when targeting a property. It tends to lead to less disappointment for their clients.
The other challenging thing about a buyers agent for a conveyancer is that they sometimes like to scrutinize the advice we give to clients, pushing harder for conveyancers to identify which points are ‘deal breakers’ and which ones aren’t.
While this can again add additional stress on conveyancers, it normally leads to a better quality of advice for clients. It is true that not every point in a contract is of equal importance and good advice should try and make this distinction.
This is of course is different from the situation where buyers agents pressure conveyancers to concede important legal points just to secure the deal. Fortunately, we don’t see this kind of thing too often any more – most buyers agents do realise that there are some legal points where we need to stand our ground. Over the long term, buyers agent who don’t place on emphasis and value on due diligence tend to get weeded out.
The biggest challenge for a conveyancer working with a buyers agents is ensuring that there is good working relationship. If there is mutual lack of appreciation of one another’s roles and poor communication between the conveyancer and buyers agent this tends to undo a lot of the benefits of having a buyers agent in the first place.
In conclusion, it seems that buyers agents are here to stay. While there are some challenges for conveyancers when working alongside them, they do seem to more effective in securing properties for buyers and demystifying the market for mutual clients.
