I read an article recently in one of the investment magazines which was written with the aim of “improving the quality of advice” given by people in the property industry, the basic gist of the article was that approximately 80,000 professionals were directly and indirectly related to the property investment industry whom are not currently regulated and that we should all become accountable to a group called PIPA (Property Investment Professionals of Australia).
What I found really interesting about this article was that of the 7 main board members of this group only 2 were licensed real estate agents; most of their backgrounds were in finance, mortgage broking, finance broking, economist or personal investor and here they were saying that basically all buyers agents amongst others, should be governed by PIPA. I found this particularly interesting because I am a buyers agents, I am a licensed agent, i am the office in effective control, I am a member of the REIV, my company is a member of the REIV and I along with all of my employees are all registered with the Business Licensing Authority – all of these bodies directly relate to the professional conduct in which we (buyers agents, estate agents & property managers) operate.
There are 2 main factors to consider here… buying property for clients and buying investment grade property for clients. When we are engaged as a buyers advocate to purchase a family home for a particular client our main job is to act as the purchasers representative, to level the playing field between the agent and the purchaser, our other aim is to help our client find property that best matches their criteria and minimise the amount of time our clients’ need to spend looking on their own. Most often when it comes to buying a home there is no element of investment of advice, we find property that matches the clients criteria then we negotiate the best deal possible on their behalf, this task fully falls under the Estate Agents act and is governed by the BLA and if you are reputable you will also be governed by the REIV.
So now we come to investment buying. We are not like many of our competitors who like to be jack of all trades… We have an investment model that we use when purchasing investment properties for our clients, this model is transparent, driven by historical data but by no means do we offer guarantees that it will be the key to financial success, what we do is stick to buying property that we feel will perform well over time we then leave the strategy of financing and financial planning up to the experts in their field and refer our valued clients onto people who specialise in that field.
What I am finding difficult to understand is why PIPA want Buyers Agents to be governed by their group when generally buyers agents don’t offer ‘investment’ advice, they offer property advice which already adheres to the strict codes developed within the industry, that’s why you need to be a sub agent or licensed agent to act as a buyer’s agent – what this looks like to me is a bunch of mortgage brokers & financial planners creating a code to try and make them “appear” to be part of the property industry when they are not – they have not sold property, they have not managed property, they have often not bought property but have decided that they now will as it creates a lucrative arm to their businesses. There may very well may be a place for a group like this to work with those in the industry that do offer financial planning property advice, however the average buyers agent is there to offer advice on buying and buying alone much like a seller offers advice on selling and as mentioned this is already well covered within the real estate industry.
If you are looking for a buyer’s agent you want someone who can negotiate harder than you, who is well connected in the property industry and as such opens up opportunities to view properties with ease or that are un-advertised. You want someone who has been around long enough that they have witnessed market trends and understands different suburbs and what they offer & who’s attracted to them, you want someone who walks the walk and understand property and the people within the industry…. You shouldn’t be selecting a buyer’s agent because they offer to show you how you can purchase 5 properties in 4 years in suburbs you have never heard of. You want a buyer’s agent who can illustrate to you their results on how they have bought property for a fair price, saving their clients personal time, and increasing the value with strong capital growth, has a great tenant or has bought you a family home which you would otherwise never have seen because it wasn’t advertised to the wider market…. That’s what you look for in a property advisor. So what i say to you is be careful as to who is spruking their wares, what is their experience in actual property & negotiation as that is where the true value will be found when you put someone on your team to offer you advice on property.