Buyer’s agents offering vendor advocacy services have become far more widespread, particularly in Melbourne. A vendor advocate is an independent agent who acts on the behalf of the seller of a property, predominately to advise on which real estate agent should be used to market a property, and to hold the agent accountable.
Initially I had reservations about the value of a buyer’s agent acting as a vendor advocate, particularly with the idea that, in essence, one agent would be overseeing another. As a standalone service, I still am not entirely convinced there is a large benefit, however for a client with a strong, established relationship to a buyer’s agent who had been closely involved in developing a property investment strategy (ideally portfolio) vendor advocacy is a natural extension of services. A trusted buyer’s agent can help their clients secure the best possible services when disposing of property assets.
Vendor advocacy is NOT free. Vendor advocates enter into a conjunctional agent agreement and receive payment of between 20 per cent and 45 per cent of the selling agent’s commission on the successful sale of a property. This commission share should always be disclosed to the client, and as a client you need to be convinced that the vendor advocate is impartial and has not made the decision based on commission revenue. This can be easily ensured by negotiating suitable terms, for example, requiring a flat fee, full disclosure of communications or another condition agreed by all parties. Again, the ability to do this also comes back to trust and having an existing relationship with the buyer’s agent.
What to do when selecting a vendor’s advocate to act on your behalf
- Check they are a licensed real estate agent within the appropriate state or territory;
- Don’t take things at face value – seek out recommendations or testimonials;
- Be clear about fees;
- Be privy to and retain copies of all agreements between the selling agent and vendor advocate (in relation to the sale of your property, or agreements whereby one party will benefit by the sale of your property).
Benefits of using a vendor’s advocate
Having a vendor’s advocate to guide you through a property sale, and the transparency and objectivity this can bring, has the potential to make the process a lot easier for a seller and deliver a better outcome. Below are some points to consider when deciding whether to use a vendor’s advocate.
- Time and stress: Do you have the time to interview 4 or more real estate agents and evaluate their current market performance and suitability to your property type? Do you have time to oversee the sale process? (Side note: thanks to online aggregators, there is increasing visibility of agent performance).
- Eyes on the ground for interstate and overseas sellers: Overseeing a sale process can be prohibitively costly when not based locally and needing to travel to ensure the sales process is being managed appropriately.
- Commission negotiation: Agents have knowledge of what a fair and reasonable commission structure is and how best to incentivise a real estate agent – this is something that comes with experience.
- Assessing services offered, sale method and marketing campaign: Vendor advocates can provide unbiased advice as to what is required to market (including advertising budget) a property effectively in the local area and maximise market interest.
- Property value: Most importantly, advocates are well positioned to establish what the true market value of your property is. This not only helps when vetting buyers’ offers presented through the real estate agent (preventing any rash sale decisions) but also ensures that you don’t decide to appoint the agent on the basis of an inflated valuation.