Experts from the Real Estate Buyers Agents Association (REBAA) stated that Australian buyers have lost out on great property deals because they aren’t able to trust agents.
Cate Bakos, vice president of REBAA, stated that buyers must be able to distinguish between agents who are selling bluff from when a property is actually being sold.
Bakos said buyers seem to be wary of the intentions of selling agents — in fact, a report by Roy Morgan showed that only 7% of buyers rank real estate agents highly for their ethics and honesty.
The agent is paid by the vendor, even though buyers might not like the idea that they are forced to purchase a property in a difficult market. They are primarily motivated to sell the property at the highest possible price. She stated that it is their job.
Bakos said that selling agents are under a fiduciary obligation towards their vendor in order to secure the best possible price. Agents are free in how they deal to potential buyers. She believes there is a big difference between being smart and trusting agents.
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Bakos stated, “A mistrusting buyer will be able to tell the difference by being clear and honest about their rules, being open about trust-related doubts and asking for a specific negotiation style.”
Signs your property may be being sold
REBAA identified three situations when selling agents should not be foolish. These are indications that the property is about to be sold.
These are where multiple agents work together to sell the same property. Because the commissions are not split, agents may prefer a higher commission.
“Each agent wants their buyer to be the buyer and will feel a duty towards their buyer. REBAA stated that agents should not lie about an offer from another agent if their income is at risk.
Another example is when an agent gets an offer before an auction. Agents lying about accepting an offer prior to the auction would be exposed. An agent lying about receiving an acceptable offer before the auction would indicate that the agent is lying. REBAA said that although it was possible that an offer was genuine, it didn’t proceed.
REBAA stated, “It wouldn’t be considered good practice for an Auction to be called off without a formally supported offer. It is highly unlikely that this scenario is a bluff.
Agents shouldn’t lie about multiple offers.
Buyers who are worried about the seller refusing to accept their offer can later find out the winning bid. It could be a risk to the reputation of the agent if they under-sold the property. REBAA said that it is best to contact the principal before you make any offers.