The Rise of the Fake Buyer’s agent and what consumers need to know
Have you noticed that the rise of the professional Property Advocate is here. More and more people are suddenly claiming to be a Buyer’s Agent, with many having NEVER worked in the real estate industry. I call them FAKE buyer agents. Shocking, isn't it!
It's really important for consumers to understand, because it means these rookies have bypassed their ‘apprenticeship’ in the industry and don’t have the actual training or experience required, if you are considering engaging their services as a buyer or vendor advocate.
A lack of practical experience means a lack of knowledge and insight, all of which is vital to advise clients correctly. They also have no understanding of ethics, due diligence, their fiduciary duty to clients or have even had their skillset or competency tested formally. And they have no industry active mentor overseeing the quality or accuracy of their work, so they are a danger to you and to themselves.
Its the equivalent of dealing with someone who has 'kindergarten' level real estate knowledge when you need an advocate who has effectively graduated at 'university' level.
Would you engage a surgeon who has never practiced before, making you their guinea pig and risking your health ? Or an electrician who has never had practical training before they rewire your house?
Or even a hairdresser who hasn't been properly trained to color and cut your hair ?
Of course not, so why be a guinea pig for a fake buyers agent and risk your money ?
Advocacy is about protecting, advising, guiding, and supporting clients.
It is about helping clients to buy and sell property, by providing independent professional advice, based on years of industry experience.
But how do consumers navigate the journey to understanding the difference between one Property Advocate / Advisor and the next?
Buyer Advocacy is much more complex than selling real estate , so its imperative that buyers choose the right advocate. Here are 17 important questions to ask when interviewing an advocate…
- Do they provide a genuinely independent and unbiased service and take a client best interest approach ? i.e. they are NOT attached to a sales agency (brand) as this does NOT provide genuine independence. There is no such a thing as a Chinese Wall" in practice. Other selling agencies don't want to deal with them as they are effectively competitors who compete for listings, so you will miss out on off market opportunities as a result."
- Do they charge you a fee for service – fixed or % based - directly ? They also do not earn commissions, fees, or kickbacks from any third parties.
- Do they have a single in-depth area of expertise – Buyers Advocacy or Vendors Advocacy, or in depth and practical experience in both?
- Have they worked in the industry for an absolute minimum of 2 years doing their mentored ‘apprenticeship’ under a senior agent,? Are they a licensed estate agent who qualified for their License in the State they operate in (they have not merely done a non-accredited course and secured a License via Mutual Recognition, bypassing significant training AND an understanding of local legislation). This includes having transacted on at least 100 properties in that time.
- Check out their LinkedIn profile to see what they did before becoming a Buyers Agent. If they don't have genuine real estate sales experience, RUN! If they are "invisible" on Linked In before stating their career as a Buyers Agent, RUN! If they have their name as John B. with no picture of who they are RUN!
- Do they have formal property investment qualifications if working with investors?
- Do they take a consultative, and not a sales approach? They ask you the right questions to understand your brief and they do not try to ‘sell’ you into a property. In other words, they are not an 'order taker', they can develop a tailored strategy for you
- Do they think like an advocate, and not a sales agent? They negotiate like an advocate, not like a sales agent. They bid like an advocate, not a sales agent. If they cannot demonstrate or explain this to you, they are not an advocate!
- When they suggest they are an ‘expert’ with ‘experience’, can they demonstrate 5+ years and dozens of case studies of the results they have secured for their clients, while working as a real estate agent or buyer and/or vendor advocate? You are not interested in their ‘experience’ in non-real estate professions or their personal passion for property. It must be actual real estate industry experience, otherwise your hard-earned dollars are very much at at risk!
- Are they pretending to be a buyer’s agent while charging you a ‘strategy’ or ‘management’ fee then ‘find’ you off the plan or new property, while also being paid a sales commission from a developer. This is misleading and illegal, as real estate agents are not allowed by law to receive money from the buyer and the seller in a real estate transaction. These so called ‘buyers’ agents’ should be reported to the ACCC, as they are in fact selling agents masquerading as buyer agents.
- Are they promoting 'off market property' to purchase like a selling agent, but want to charge you a fee to buy it? If so, run a mile ! They are trying to sell you a property but charge you for the privilege and are therefore NOT acting as a Buyers Agent. Contact the local selling agents in that suburb instead.
- Do they work in the business/industry full time ? They must be a 100% full time advocate ( ie not part time, working for someone else fulltime or running other businesses ad palming you off to junior staff). Real estate advocacy is NOT a part time 'property buying gig'. A lack of fulltime commitment to the role and clients, puts you at very high risk of receiving inadequate service for your fee and errors being made, at your expense. Part time Fake BAs will have nothing on their website that identifies who they are, including their name, photo, or real estate experience, because they don't want their current employer to know. They often have a super basic website, a Gmail email address or an info@ email. They are invisible ( to their employer). Being a part time BA means they can't attend to important and crucial matters that present during the day, when they are busy working for someone else. It also means they miss opportunities because deals don't happen at their convenience.
- FAKE or 'Rookie' BA websites have usually been built in 2018 - 2023. Some have now woken up this and are not putting a date at all!
- Does the About Us section of their (often sophisticated and convincing) website provide a detailed description of the business owner and advocate, including their name, photo, mobile number and actual real estate experience ? If not, it is all smoke and mirrors, they most l likely have a full-time job elsewhere and this is a RED FLAG, so avoid at all costs !
- They use KPI's to promote themselves that are FAKE. eg someone with only 3 years real estate has inspected over 10,000 homes. That's 64 per week , 52 weeks a year. Yeah right !
- They are skilled at using impressive 'statistics to con(vince) you of their 'success' eg 74% of all property bought off market! Average buy time of 32 days! That actually means they churn (and burn) clients, buy inferior property and usually always overpay significantly for property to get a deal done. It also reflects a limited skillset and lack of experience re the ability to negotiate, price property and bid at auctions. Experienced and ethical operators don't have high stats like that because they don't allow their clients to buy inferior property and/or pay any price for it, so they can transact and move onto the next client. That's what selling agents do, not buyer agents. Buyer beware! As the market softens, their FAKE BA's significant overpayment and/or inferior property will bite buyers and they will find their property has lost value!
- They are skilled at writing their business and personal profiles that talk about 'sales' , 'real estate' or property 'experience' while avoiding identifying that they have never worked in the real estate industry. Meaning they have had no industry training or mentoring and don't know what they are doing, yet they are happy to use consumers (and their money) as guinea pigs, to serve their apprenticeship, at their client's expense.
- They use phrases like ' data driven research' or ' big data' to sound impressive, whereas they are merely accessing the same reporting as others in the sector.
- They call themselves 'borderless buyer agents' , who may NOT be licensed to buy interstate and/or they search online but buy property SIGHT UNSEEN, or they outsource the inspections to selling agents and unrelated 3rd parties who are not covered under their PI insurance, putting their clients at significant risk.
In summary
- Ask what real estate industry experience they have. Be very wary if they don’t have any!
- Ask them to demonstrate multiple case studies, over many years of their client success story’s
- Ask for past client testimonials spanning at least 2 - 5 years
- Check the REBAA website to find y our local REBAA Accredited local buyers agent
Property Prosperity
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