Buyers’ agents – the latest property dilemma
There is a growing trend for homebuyers to appoint their own agents to help them buy a home. But is that a good idea? asks Paula Higgins
December 3, 2012 | post last updated on September 5th, 2016
When you sell your home, you have a professional acting for you making sure you get the best deal – the estate agent. But what about when you buy? When it comes to finding a home and negotiating a deal, you are normally on your lonesome. One of the most unnerving things for homebuyers – particularly first timers – is that they have to negotiate deals worth many hundreds of thousands of pounds with professional estate agents who do this every day of their lives and know all the tricks of the trade. Should you really bid much below the asking price? How much should you offer in a sealed bid? How much should you try to knock off because of the roof needs repairing? It can be a bit of an unequal battle.
Anecdotally, it seems an increasing number of homebuyers are calling in reinforcements, by instructing buyer’s agents, where homebuyers get an agent to find a suitable property and then negotiate the sale (similar to the American model of realtors). There are already buyer’s agents out there – normally just serving the top end of the market – but estate agents tell us they are seeing an increasing business in acting for buyers as well as sellers (but must be wary of conflicts of interest).
In a tight market, where there is a real shortage of properties for sale and the sellers hold all the cards, buyers might feel a greater need of professional help. But is it a good idea? The biggest – perhaps the only – downside is the cost. Typically buyer’s agents charge 1% of the price of the house (so if you are buying a £250,000 property, it would cost you £2,500). But they could easily save you that amount of money, by having a clearer idea of when a property is overpriced, being more experienced at tough negotiations – and resolving tricky situations. They should have a professional’s knowledge of what properties are worth, and know which estate agents tend to inflate the prices.
For buyers with little time on their hands, a buyer’s agent can also take out much of the hassle of househunting, by scouring what’s on the market and providing the details to you – and even do viewings for you. The one concern is that if the buyer’s agent is charging a percentage fee, then they actually have a financial incentive not to negotiate the price of the house down, and you are just relying on their professionalism to do a good job for you. So should you get a buyer’s agent? If you are less experienced, worried about your negotiating skills, or simply don’t have time to become an expert on the market and hunt for properties, then they may make sense. But if you have time and experience, you probably won’t feel the need for professional support. What do you think?