Take-aways from a Newbie: What is a buyer’s advocate?
Ali Butler, Sales and Marketing Consultant at Harcourts Silverdale, started in real estate in 2022.
The market was falling and it was the grounds for setting some solid foundations for hard work and long term planning.
It was no longer an industry for people to wait for listings to come to them, or expect buyers’ to walk through the door and buy a property without negotiation.
That might have been a shock to those who hadn't seen a turn in the market before - but for Ms Butler, it was paving the way to learn exceptional negotiating skills and understanding the importance of working with buyers.
"One of the biggest things I have learned is how undervalued, and underutilised buyer’s agents are in New Zealand - and the lack of knowledge that most homeowners and purchasers have regarding the function (and pay) of an agent that works with the buyer" she says. "Most purchasers are unaware it can be done at no additional cost."
“More recently this is complicated by the fact that an agent working with a buyer without a contract and fee, now needs different terminology and cannot use the term ‘buyers agent’. For the remainder of the article, they will be referred to as buyers advocates. But a lot of salespeople will act in the buyers interest!
As the New Zealand property market continues on its natural cycle, it's becoming increasingly challenging for buyers to navigate the complex and competitive market.
In this situation, buyer's advocates can provide much-needed support and guidance, yet it's alarming how little knowledge there is about these professionals.
Buyer's advocates, or buyer's representatives, are licensed professionals who work alongside property buyers, with their focus being on finding and securing the perfect home for the buyer.
Their primary role is to help buyers find the right property at the right price and negotiate on their behalf with the seller or their agent. They can also provide invaluable advice on property inspections, contracts, and legal matters.
"But, despite their expertise and value, many potential buyers have no idea about the benefits of working with a buyer's advocate," says Ms Butler.
"Many (or even most!) buyers in New Zealand remain unaware of the existence of buyer's agents. So few Kiwi’s are aware that it is possible to have a dedicated professional on their side as a buyer, and have little information as to how it works." she says.
There are some agents who avoid working with buyers during busier periods of the market, as a collaborative deal on a property may mean a shared commission, or they may consider themselves too busy to do the legwork involved with hunting down properties and negotiating deals with other agencies.
There is also the misconception that buyers advocates cost the buyer an additional commission (or flat fee). While it is possible to have a contracted buyer’s advocate that would charge a fee to the purchasers, most agents will choose to work alongside a buyer, and work in conjunction with the listing agent of a property and take a share of the selling commission (therefore not costing the purchaser anything additional).
The benefits of using a buyer's advocate are clear. They have extensive knowledge of the local property market and can provide access to off-market listings that may not be advertised to the public. Another one of the primary advantages of using a buyer's agent is their ability to negotiate on behalf of their clients.
As experienced professionals in the industry, they have the knowledge and skill set to negotiate the best possible price and terms for their clients.
Buyer's advocates can help buyers navigate the often-complex process of purchasing a property. From finding the right property to assisting in arranging financing and completing the necessary paperwork, a buyer's agent can help streamline the process and ensure a successful transaction.
This is particularly true for first-time homebuyers, who may be unfamiliar with the intricacies of the real estate market. In many cases, these buyers may be at a disadvantage when negotiating with sellers, who have professional representation in the form of listing agents.
Ms Butler is hoping to raise the awareness of buyer's advocates in New Zealand. More education is needed to raise awareness of the benefits of using a buyer's agent, and buyers should be encouraged to seek out these professionals when purchasing property.
Ultimately, having a buyer's advocate on your side can make all the difference in securing your dream home and ensuring a smooth and successful property purchase, and a great experience to refer on to others!
So, if you have an agent that you enjoy working with and you’re looking to purchase, consider asking them if they will work alongside you in your buying journey too.