If You Do Not Understand Buyer Agency Today, You Will Miss Income Tomorrow!
Ask, any 10 randomly selected real estate agents, "What is Buyer Agency?"
and you will likely receive answers like this:
- A Buyer Agent works for the listing agent.
- A Buyer Agent assists a listing agent in finding possible buyers.
- A Buyer Agent assists a listing agent with "Open Homes".
- All of the above.
- None of the above.
So what did you select?
OK, so you have been in practice for decades; have had Buyer Agents assist with sales and are at a loss to understand what this is all about. So, just a wee bit of history.
When MP Clayton Cosgrove placed the 2008 REAA Act before Parliament, its stated purpose was to reduce marketplace confusion, with regard to agent/salesperson fiduciary responsibilities and how the consumers were being negatively impacted by this confusion.
Accordingly, the REA (then REAA) was empowered to establish a clear set of licensing and conduct rules, which were to make it finally clear to both vendors and purchasers, exactly what relationship they had with their real estate agent and what services they could expect to receive.
So, here are the bits you might misunderstand the most and care about less than is desirable. One thing for sure; ignore them and pain is just around the corner, along with lost profits.
- Just as a vendor is entitled to have and benefits from a professional listing agent, so is the purchaser.
- When you look at Australia; the U.K.; Canada and the U.S., you will find that buyer agency has been in place for up to 25 years and for the same reasons it has made its way to New Zealand. Actually, the majority of U.S. agents are involved in transactions as a buyer agent and nearly 70% of their commissions are derived from buyer agency clients!
- A Buyers Agent in New Zealand represents the Buyer and accordingly is looking to find the best property and at price and terms beneficial to the buyer. They do not "collaborate" with the listing agent in the process, nor do they have listings.
- What about my Exclusive Listing Commission you ask? It is unchanged and completely unaffected by the buyer agent, as they are being paid by the purchaser and will not and indeed cannot claim any portion of your commission!
- Under the Act, as an exclusive listing agent, you are still required to present any contract, including one from a buyer agent to your vendor on receipt. You will also need to provide access for showings. But, remember that none of these requirements will affect your commission in any manner
Finally, as we head into buyer markets, you just might want to consider acting as a buyer agent yourself; the water is fine and so is the income! As always your comments are most welcome.