Paid too much: due to Buyers Agent

[Blacky]

Unless the BA had a conflict of interest in the property or transaction, I would be very surprised if you were able to recover any costs.

Provided that they can show suitable research which justifies the value, they will be off the hook and it will be put down to "market conditions" or "individuality of each transaction".

I have heard of BA's being associated with a REA, and therefore they are in a position to collect a % of the listing agents fees, plus charge you for the privilege.
Its unscrupulous and rare, but it does happen.

Blacky

 

[Ace in the Hole]

at the end of the day, BA is to assist their client to achieve better result than their client can achieve it themselves.

otherwise what's the point to engage professional BA ??

anyone can pay a premium and get the deal cross the line.

The point to engage a BA and pay a fee is to leverage their skill to get a discounted price on property or at very least get a fair market value..... not to pay premuim.

Is there anyone here willing to pay a BA fee and also pay a premium ($90k) on a property, otherwise can get it at fair market price themselves ?

with all respect, I think BA should have a very basic understand when they should walk away the deal. Integrity is the key.

just a thought

It's not always about money though, is it?

Some clients would engage a BA simply because they don't have time or can't be bothered going through the whole purchasing process.
However, I would assume these are the more wealthy clients who have better things to do with their time than worry about a few hundered k here or there.

 

[Bigtone]

Whilst I think it's important to share these experiences so others can learn I feel that generic slander undoes the hard work that respectable Buyer's Agents strive for day in, day out...

I'm sorry your friend feels like they paid too much. It unfortunately isn't uncommon. I saw a unit in Armadale recently sell for 18% over the reserve price at Auction just because two opposing BA's were competing against each other, most likely motivated as they get paid as a % of the sale price.
.

well that is generic slander right there.

unless u know what the instructions were to the BA's involved u r doing exactly what u r criticizing the other poster for.

there can be multiple reasons a buyer is prepared to pay over the real value for a property and that may be been the case in armadale purchase, to say it was because the BA is getting a % of sale price is slander in itself without the facts

 

[Propertunity]

I have heard of BA's being associated with a REA, and therefore they are in a position to collect a % of the listing agents fees, plus charge you for the privilege.
Its unscrupulous and rare, but it does happen.

Not just unscrupulous, but actually illegal, if indeed it happened..... and yes I know that agents sometimes get fined and lose their license to practice (and a good thing too, as far as I'm concerned) when they act in this kind of manner.

 

[Rolf Latham]

I have heard of BA's being associated with a REA, and therefore they are in a position to collect a % of the listing agents fees, plus charge you for the privilege.
Its unscrupulous and rare, but it does happen.

Blacky

I suspect dual comms is a little illegal

ta
rolf

 

[knightm]

Hi Knight

No, Prop's referring to Professional Indemnity insurance. If the BA is a member of REBAA it is mandatory that they carry this insurance. You'd be foolish to engage a BA who doesn't carry PI these days. REINSW is also making it compulsory for all its members as well.

thanks jacque - i had my tla's (two letter acronyms) mixed up
out of curiosity do most have both PI and PL?

 

[bump]

I suspect dual comms is a little illegal

ta
rolf

A lot of things are illegal but they still happen.
The law is a rule we are meant to follow but if enough money is dangled then some get greedy. More info is needed in this case but i think it sux so far.

 

[Scott No Mates]

PI & PL are two totally different risks. PI is for the financial exposure for the service provided whereas PL covers 3rd parties against damage eg tripping over the BA's front door step.

 

[bump]

However, I would assume these are the more wealthy clients who have better things to do with their time than worry about a few hundered k here or there.

I think you'd be surprised that a few hundred thousand dollars is still a lot on this planet even if you're worth 10 million.

 

[Jake Milne]

well that is generic slander right there.

unless u know what the instructions were to the BA's involved u r doing exactly what u r criticizing the other poster for.

there can be multiple reasons a buyer is prepared to pay over the real value for a property and that may be been the case in armadale purchase, to say it was because the BA is getting a % of sale price is slander in itself without the facts

You're right, I'm sorry... I shouldn't make wild claims about peoples motivations.

The facts are simply:
Purchaser paid $712,500 for a property listed at $550-$600K.
The BA who purchased works under a % of sale price.
The property was the most expensive 2 bedroom unit purchased in the street ever, and it was an original condition 1960's apartment.

 

[Ace in the Hole]

Ok, so why did the purchasor hand over the money if it was advertised for 550-600k ?

 

[Aaron_C]

Ok, so why did the purchasor hand over the money if it was advertised for 550-600k ?

Obviously they really wanted the property.

 

[Big Will]

I haven't read the whole thread, but read first page and I would never use a BA.

My reason is that normally (unless times have changed) is that the BA works off a % of what your house is bought for.

So what incentive is there for him to get you the lowest price? As he is just hurting his own commission (I understand lack of refereals).

I still cannot think of a system that would be effective where BA can get paid more the more he saves you, the only thing I have gotten close to would be to use an independant valuation of the property and commission him from that. E.g. 3% for savings of 30k or more under bank value sliding down to 2% for 0-10k under value and 1% for anything over valuation...Do not know if that would fly.

BA can have their place for people who are not confident, however surely a friend may know someone who is experienced in buying property that can assist and most likely will do it as a friend.

I was asked one time to represent my old neighbours (elderly couple) as a BA and bid on their behalf, however I couldn't represent them as the auction was the sametime as I was going to be in the air flying to QLD and I would of done this for free!

 

[devank]

My reason is that normally (unless times have changed) is that the BA works off a % of what your house is bought for.

I don't think any BAs here works on the %. The popular ones here all charge a flat fee. Some may charge differently for different price ranges.

 

[scha9799]

I think by now everyone just want to know who this BA is.

please kindly tell us who he/she is ? so very can avoid him/her.

Also if he/she is on the forum, I believe everyone would love to hear what he/her own justification and comment on this. so we can have better understanding in this situation.

 

[Jake D]

I think by now everyone just want to know who this BA is.

I think you're mistaken.

 

[Big Will]

Without having which properties are in question, and the timeframe and what happened in the market it will be hard to tell if the BA made their clients pay to much.

However at the end of the day your friends gave him the allowance to buy it up to x dollars, being a PPOR people are more likely going to pay more as the house fits their lifestyle, an investor would only buy it to a certain price if the sums added up.

I hope you friends are not to upset from the situation and tell them the best truth in Australian property, it isnt timing of the market but time in the market.

If they hold onto the property for long enough they will recoup their potential overspending, just it will take longer.

 

[Big Will]

I don't think any BAs here works on the %. The popular ones here all charge a flat fee. Some may charge differently for different price ranges.

Every region maybe different but from http://www.buyersadvocate.com.au/fee_structure :

An initial registration fee of $990 (incl. GST) to commence the process. This is fully deducted from the success fee once the property is secured.
Full Search & Acqusition Service is between 1.1% to 2.2% (incl. GST) of the purchase price. Negotiation & Auction Bidding Service is 0.55% (incl. GST) of the purchase price.
Mortgage Brokering Service is provided at no charge to our clients.

Cannot see how this isnt considered a conflict of interest?

 

[knightm]

Every region maybe different but from http://www.buyersadvocate.com.au/fee_structure :

An initial registration fee of $990 (incl. GST) to commence the process. This is fully deducted from the success fee once the property is secured.
Full Search & Acqusition Service is between 1.1% to 2.2% (incl. GST) of the purchase price. Negotiation & Auction Bidding Service is 0.55% (incl. GST) of the purchase price.
Mortgage Brokering Service is provided at no charge to our clients.

Cannot see how this isnt considered a conflict of interest?

Nor I, whilst I think most good BA's charge flat rate which I would prefer if it was me (as a BA or a client) the extra few dollars on paying a bit more for a property wouldn't add up to much on a commission and if it ruins your rep as someone who scores the bargains for clients then the business is dead pretty quickly.

 

[Rolf Latham]

Every region maybe different but from http://www.buyersadvocate.com.au/fee_structure :

An initial registration fee of $990 (incl. GST) to commence the process. This is fully deducted from the success fee once the property is secured.
Full Search & Acqusition Service is between 1.1% to 2.2% (incl. GST) of the purchase price. Negotiation & Auction Bidding Service is 0.55% (incl. GST) of the purchase price.
Mortgage Brokering Service is provided at no charge to our clients.

Cannot see how this isnt considered a conflict of interest?

The good things are

1. One isnt forced to use a BA
2. You can choose the BA the BA you want to work with. If its important to you that a BA is paid a fixed fee, negotiate it accordingly.

There are dozens more reasons why folks use Buyers Agents, other than a lack of confidence or knowledge of a particular market.

The vast majority of our clients use a BA because they value THEIR time at higher than what the BA's fee VALUE is to the user of the service.

ta
rolf