Finding the right property for your hard-earned dollars is only one part of the investment equation. Choosing the right agent is an important variable in that calculation and it can either lose you thousands or put thousands back into your pocket.
Engineering officer Adrian Bedoya and his wife, Rosa, found this to be the case when they sold a house in Sydney’s west last year.
With two small children and a busy job, the couple had little time to scope out local agents. Bedoya turned his search online and stumbled across OpenAgent, an organisation which connects home owners with the best agents in their area.
Bedoya registered with the organisation and received a list of three agents. The difference between the valuations was a staggering 25 per cent he says.
“I was amazed and surprised by the difference in the three appraisals. One valued the property at $300,000 while the other at $420,000. It was easy to choose which one to go with; we went with the highest appraisal.
“Two weeks later, the house sold for $400,000. It was worth every cent to get the three appraisals. The 25 per cent we got from the sale means our initial investment paid off and we have more money to play with.”
Co-founder of OpenAgent, Marta Higuera advises vendors to choose agents who have experience in the area, a strong track record and superior negotiating skills.
“OpenAgent only list 10 per cent of all agents in the marketplace,” says Higuera.
“In Bondi Beach there are 199 agents, but we only recommend about 20 of them. It is not that the rest are bad agents, but there is a big difference between the best and the rest and this can translate to tens of thousands of dollars.
“Upfront honesty is sometimes really hard to get and it’s why we encourage customer reviews. If an agent is unresponsive, or who doesn’t deliver, this is definitely a red flag.
“Think twice before you sign a contract as you will be committed to them for a few months.”
Higuera offers these tips to avoid dodgy agents:
- Research their sales history There is no substitute for experience. Being a real estate agent is something that you learn on the job. Agents should have a solid sales track record in your area and should have sold similar properties.
- Read customer reviews or testimonials An agent’s past clients have the inside story. They are your best way to find a trustworthy agent who will deliver the best price for you.
- Test their knowledge of the local market Active real estate agents will have their finger on the pulse and should be able to provide examples and data about the local real estate market.
- Judge them on actions, not words Do they do what they actually say or are they making excuses or regularly changing their story.
Publisher Lesley Williams and her husband, Tom recently missed out on a property due to the inactions of an agent. After repeated calls, they discovered the property sold before they had a chance to make a counter offer.
“We placed the offer and I heard nothing for five days,” says Williams.
“I called the agent to see whether the vendors had accepted our offer. The agent gave excuses why he hadn’t responded such as he was away and the vendor was in Hong Kong.
“Another week passed and I called again and still no answer. In the end I rang the real estate agent office and spoke to someone who told me the property had been sold for$1.2 million.
“Understandably, we were very upset. We had not been advised if our offer was rejected or given an opportunity to increase our offer. Moreover, I think the vendors were poorly represented because we might have beaten the offer.”
Amanda Lynch, chief executive of the Real Estate Institute of Australia, says that while Williams’ example is disappointing, there are relevant consumer affairs organisations across the states that take these matters seriously.
She says that disgruntled buyers or vendors should definitely notify the relevant organisation in their state. There is a code of conduct which is enforced and membership can be removed if an agent does not comply, or is found to have acted improperly, then they are likely to be fined or penalised.
Lynch offers these additional tips:
- Develop a good relationship with your agent Choose an agent who understands your needs, this is crucial to a purchase or sale. It is best to meet with a couple of agents before making a decision. If you don’t feel that they are taking your individual circumstances into account, then try another agent. A good agent will value you as a client.
- Check to see if they are a member of an industry group and have they won any awards State and national awards are independently accessed and can be a very good indication of the reputation of an agent.
- Lodging a complaint Either obtain your own legal advice or contact the Office of Fair Trading or the equivalent. REIA has a national list of regulatory offices at http://reia.asn.au/complaints/complaint/