Vendor Advocates... Thoughts?
- Thread starter BFT
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Never heard of them?
But a Google search turned up this article....
yourbuyersadvocate.com.au/Content/templates/tmp_news.asp?articleid=137&zoneid=19
Cheers
But a Google search turned up this article....
yourbuyersadvocate.com.au/Content/templates/tmp_news.asp?articleid=137&zoneid=19
Cheers
A vendors advocate is basically an agent who employs another agent on your behalf. If that sounds like a good idea to you then I don’t know what else to say?
Generally, they only have a small group of agents who they work with. Most of the time, they have already selected the agent before you even approach them.
I have a group who refer me business all the time. They charge the vendor and then take 30% of our sale fee. They do very little except ask for a weekly report which is rarely read.
I know firsthand they care little about what price is achieved, only that they want it sold ASAP. They work on turnover and achieving the best results is not high on their agenda.
I highly recommend you do not sell via this method. The best advice you can get right now is to price the property correctly, don’t choose an agent just because they tell you the most money; don’t choose an agent solely because they are the cheapest and remember presentation is the main key.
Generally, they only have a small group of agents who they work with. Most of the time, they have already selected the agent before you even approach them.
I have a group who refer me business all the time. They charge the vendor and then take 30% of our sale fee. They do very little except ask for a weekly report which is rarely read.
I know firsthand they care little about what price is achieved, only that they want it sold ASAP. They work on turnover and achieving the best results is not high on their agenda.
I highly recommend you do not sell via this method. The best advice you can get right now is to price the property correctly, don’t choose an agent just because they tell you the most money; don’t choose an agent solely because they are the cheapest and remember presentation is the main key.
I agree with most of this article except for the bit that claims valuers are “conservative”. That’s bull****, they’re only conservative compared to agents who in most cases, tell vendors what they want to hear.
Not sure I agree or disagree completely...
Valuers appear to be inconsistent at the moment -- that's how I'd put it. I've seen and heard of vals coming in at huge differences just days apart through different lenders. That's without any changes of approach to the valuer or to the property.
Buyer's agents are saying similar things, for what it's worth.
I got half way through reading this and thought it necessary to clarify the mis-information.
Incorrect. As a Vendor Advocate myself I interview the three top real estate agents in the local area. The definition of "top" is the agency with the most listings/market share, 12 month rolling performance (sales volume / results above median) and then finally topped off with any relationships that I have with agents in the area that I know to be more proactive than others.
It is illegal to take a fee from the agent and vendor. No V.A in their right mind would do this so you either misunderstand their model or you're associating with dodgy agents.
The correct structure is a percentage of sales commission as agreed by the V.A and selling agent which is then approved by the vendor.
This completely defeats the purpose of V.A. I have many examples of having to enter post auction negotiations to get a better result than what the REA is willing to take because they're tempted to get the deal done to earn their commission. At a nominal percentile of the sale price I'm happy to walk away from a deal if the price isn't right to then aim at selling for a better amount through private sale at later stage.
In my experience people genuinely don't know which agent is the best for them; and they're often bedazzled by presentation rather than looking at the things that matter to the sale. Knowing price, having realistic appraisals, the appropriate selling method, the market reach, the correct advertising campaign are more important than what suit you wear to the listing meeting.
Incorrect. As a Vendor Advocate myself I interview the three top real estate agents in the local area. The definition of "top" is the agency with the most listings/market share, 12 month rolling performance (sales volume / results above median) and then finally topped off with any relationships that I have with agents in the area that I know to be more proactive than others.
It is illegal to take a fee from the agent and vendor. No V.A in their right mind would do this so you either misunderstand their model or you're associating with dodgy agents.
The correct structure is a percentage of sales commission as agreed by the V.A and selling agent which is then approved by the vendor.
This completely defeats the purpose of V.A. I have many examples of having to enter post auction negotiations to get a better result than what the REA is willing to take because they're tempted to get the deal done to earn their commission. At a nominal percentile of the sale price I'm happy to walk away from a deal if the price isn't right to then aim at selling for a better amount through private sale at later stage.
In my experience people genuinely don't know which agent is the best for them; and they're often bedazzled by presentation rather than looking at the things that matter to the sale. Knowing price, having realistic appraisals, the appropriate selling method, the market reach, the correct advertising campaign are more important than what suit you wear to the listing meeting.
Furthermore I'd like to add I'm helping a couple of sellers from somersoft at the moment...
One of these vendors decided to go it alone and has had his property on the market now for more than two months.
I've appraisals lined up for tomorrow and expect a sales result within 45 days.
Watch this space.
EDIT: I just noticed who wrote this article... Peter, the author, wanted to work for/with infolio during our inception; but his approach was declined for several reasons.
One of these vendors decided to go it alone and has had his property on the market now for more than two months.
I've appraisals lined up for tomorrow and expect a sales result within 45 days.
Watch this space.
EDIT: I just noticed who wrote this article... Peter, the author, wanted to work for/with infolio during our inception; but his approach was declined for several reasons.
@ Milne,
Being a V.A, I would expect that response. You have to defend your job title, I understand.
But you won’t be convincing me. I’m sure you’re a good kid; I mean you look Justin Bieber so you at least look trustworthy, you probably give to charity and help old ladies cross the street. So by no means take offence to my personal opinion on vendor advocates. I’m sure you don’t personally come under my V.A umbrella.
No doubt you work in the best interest for all your clients. So do I but that doesn’t mean other agents do. Same can be said for V.A’s.
But my personal experience is not positive, in which I expressed. My opinion is also unbiased, I have nothing to gain or lose regardless of what I say. I don’t troll the forums looking for clients nor promote myself.
Some V.A’s hit me for a “referral fee”. Especially the ones who give me mortgagee sales. I will accept that they may be under a different system. However, at the end of the day, I don’t see the difference. They are representing the vendor and getting a cut from both sides.
But hey, they are give me business and I at least do the right thing when promoting/selling the property so who am I to complain? In a parallel universe the evil version of me gets the business regardless… Which is my main point.
A quick question… As a buyer’s agent are you allowed to introduce a client to a property which you are the vendors advocate for?
Being a V.A, I would expect that response. You have to defend your job title, I understand.
But you won’t be convincing me. I’m sure you’re a good kid; I mean you look Justin Bieber so you at least look trustworthy, you probably give to charity and help old ladies cross the street. So by no means take offence to my personal opinion on vendor advocates. I’m sure you don’t personally come under my V.A umbrella.
No doubt you work in the best interest for all your clients. So do I but that doesn’t mean other agents do. Same can be said for V.A’s.
But my personal experience is not positive, in which I expressed. My opinion is also unbiased, I have nothing to gain or lose regardless of what I say. I don’t troll the forums looking for clients nor promote myself.
Some V.A’s hit me for a “referral fee”. Especially the ones who give me mortgagee sales. I will accept that they may be under a different system. However, at the end of the day, I don’t see the difference. They are representing the vendor and getting a cut from both sides.
But hey, they are give me business and I at least do the right thing when promoting/selling the property so who am I to complain? In a parallel universe the evil version of me gets the business regardless… Which is my main point.
A quick question… As a buyer’s agent are you allowed to introduce a client to a property which you are the vendors advocate for?
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thepeoplesagent, Are you sure you are going to stand by your earlier comments about taking referrals from these vendors agents that you describe ?
It just sounds a little silly to me, can you go into a little more detail as to what your thinking is here? Why would you work and associate yourself with unethical practices? Surely your reputation is more important than a couple of referrals?
It just sounds a little silly to me, can you go into a little more detail as to what your thinking is here? Why would you work and associate yourself with unethical practices? Surely your reputation is more important than a couple of referrals?
If a VA is taking cuts from two sides they're doing so illegally.
And as a BA I cannot introduce buyer's to a VA client... Conflict of interest.
PS, I'm much more handsome than Bieber
And as a BA I cannot introduce buyer's to a VA client... Conflict of interest.
PS, I'm much more handsome than Bieber
Toby, I am doing the right thing. Also, I dont take any referals. What the VA does behind the scenes is little concern to me and irrelevant to my duties as a selling agent. I work in the best interest of the vendor regardless if it were Hitler giving me the referral or the Pope. Regardless, these VA’s are large firms and what they do would be legal providing it is disclosed to the vendor. But, I guess large firms are not privy to breaking the law.
As for my handsome friend Milne, I would argue that working as both a vendor’s advocate and buyer’s agent is not in the best interest of all.
Example: You represent a buyer, that buyer would buy a home in which you advocated an agent for. In the real world, that buyer would fall in love with that home and buy it. But in your world, you can’t introduce that buyer to the home and a seemingly heavenly match is never eventuated. The buyer doesn’t buy, the seller doesn’t sell, the transaction never happens. I guess you will have to sell your client something else right?
So as a vendor, ask a buyer’s agent/agents advocate how many buyers they represent. Whatever that number is, it will be the same number as buyers not able to purchase your home. As a buyer, vice-versa this question and the outcome will be the same.
So, you are not permitted to act as a selling and buying agent in the same transaction- fair enough. But, you can work as both within the same area providing you don’t introduce the very people who need to be introduced. Instead treating clients with common interests as two positively charged ions. A bit like working on a dating site and not being allowed to introduce males with females.
This is a slightly exaggerated example but I’m sure you see where I’m going?
As for my handsome friend Milne, I would argue that working as both a vendor’s advocate and buyer’s agent is not in the best interest of all.
Example: You represent a buyer, that buyer would buy a home in which you advocated an agent for. In the real world, that buyer would fall in love with that home and buy it. But in your world, you can’t introduce that buyer to the home and a seemingly heavenly match is never eventuated. The buyer doesn’t buy, the seller doesn’t sell, the transaction never happens. I guess you will have to sell your client something else right?
So as a vendor, ask a buyer’s agent/agents advocate how many buyers they represent. Whatever that number is, it will be the same number as buyers not able to purchase your home. As a buyer, vice-versa this question and the outcome will be the same.
So, you are not permitted to act as a selling and buying agent in the same transaction- fair enough. But, you can work as both within the same area providing you don’t introduce the very people who need to be introduced. Instead treating clients with common interests as two positively charged ions. A bit like working on a dating site and not being allowed to introduce males with females.
This is a slightly exaggerated example but I’m sure you see where I’m going?
Vendor advocacy is not new and is particularly popular (for some reason which we've yet to work out!) for our fellow Victorian BAs. Here in NSW, however, BAs are bound by Clause 6 of Schedule 5 of the PSBA Regulation 2003 which states:
Clause 6 of Schedule 5 of the PSBA Regulation, applies to buyers’ agents and registered persons they employ, and provides:
An agent must not demand or accept a fee or other valuable consideration for referring the principal to a selling agent.
BAs who actually receive a fee from a vendors agent for referring them business are supposed to be listed as a co-agent on the listing agreement, thus making them effectively a sellers agent. Alternatively, other BAs charge their vendors a set fee for this service, in interviewing and recommending top agents in the vendors selling area.
Clause 6 of Schedule 5 of the PSBA Regulation, applies to buyers’ agents and registered persons they employ, and provides:
An agent must not demand or accept a fee or other valuable consideration for referring the principal to a selling agent.
BAs who actually receive a fee from a vendors agent for referring them business are supposed to be listed as a co-agent on the listing agreement, thus making them effectively a sellers agent. Alternatively, other BAs charge their vendors a set fee for this service, in interviewing and recommending top agents in the vendors selling area.
Possible conflicts certainly can occur, hence the reason you will find most buyers agencies choose not to go down this path. I believe charging a fee (from the vendor) for providing this service is the fairest and most transparent way here. For our buyer clients, we have no problems in assisting and recommending selling agents when the time is right. However we elect not to charge for our advice or time in doing so.
Sorry Tobes, I don’t get access to the vendor as I deal directly through the VA. I could stand on my high horse, refuse their business and cut my nose to spite my face. No thanks. If their doing something wrong (which I doubt they are) that’s their problem. It doesn’t affect my ability or duties. Nor does it affect the vendor’s final sale price.
The only one getting the raw deal here is actually me.
We sign an agreement which states we are to pay 30% referral fee. All parties are privy to this document. The document states that the VA and our agency are conjunction agents. All payments are electronically transferred from our trust account. It’s not like we’re handing them a paper bag full of hundred dollar notes and cocaine.
We also get surprise visits from department of fair trading who raid through our files and trust accounts. We get audited around once a year too. So, feel free to ring up fair trading, REI, Tracy Grimshaw, Julia Gillard or whoever. If something was out of order I’m sure they would have picked it up.
Perhaps the VA’s who I deal with are providing their service pro-bono and are only making a dollar from the referral fee? It’s not my position to dig through their accounting books or query their business structure.
I also find it hard to believe there is no way a company could claim moneys from both the vendor and selling agent. Is there no fancy lingo, agreements or disclosures that could achieve this? At the end of the day, you could charge for anything providing your client agrees.
After all, as agents, we can claim a referral fee from an advertiser or mortgage broker providing we disclose this information to the vendor/purchaser. So what’s the difference for a VA?
This aside, my point from the beginning was using a VA, in my opinion, is not the best way to sell. Again, I am speaking from personal experiences and observations.
The only one getting the raw deal here is actually me.
We sign an agreement which states we are to pay 30% referral fee. All parties are privy to this document. The document states that the VA and our agency are conjunction agents. All payments are electronically transferred from our trust account. It’s not like we’re handing them a paper bag full of hundred dollar notes and cocaine.
We also get surprise visits from department of fair trading who raid through our files and trust accounts. We get audited around once a year too. So, feel free to ring up fair trading, REI, Tracy Grimshaw, Julia Gillard or whoever. If something was out of order I’m sure they would have picked it up.
Perhaps the VA’s who I deal with are providing their service pro-bono and are only making a dollar from the referral fee? It’s not my position to dig through their accounting books or query their business structure.
I also find it hard to believe there is no way a company could claim moneys from both the vendor and selling agent. Is there no fancy lingo, agreements or disclosures that could achieve this? At the end of the day, you could charge for anything providing your client agrees.
After all, as agents, we can claim a referral fee from an advertiser or mortgage broker providing we disclose this information to the vendor/purchaser. So what’s the difference for a VA?
This aside, my point from the beginning was using a VA, in my opinion, is not the best way to sell. Again, I am speaking from personal experiences and observations.
I'm thinking that some people might not know who the best agent is for them, but equally may have trouble choosing a Vendor's Advocate.
I'm seriously thinking of a career change and becoming a Vendor's Advocate Advocate, who will help potential sellers choose the best Vendor's Advocate to help them choose the best Agent to sell their house.
Of course, some people may not value that service, so for them I'm also thinking I could operate as a Vendor's Advocate Advocate Advocate, helping them choose the best Vendor's Advocate Advocate to help them choose the best Vendor's Advocate to help them choose the best Agent.
Anyone got any advice for a future VAAA?
I'm seriously thinking of a career change and becoming a Vendor's Advocate Advocate, who will help potential sellers choose the best Vendor's Advocate to help them choose the best Agent to sell their house.
Of course, some people may not value that service, so for them I'm also thinking I could operate as a Vendor's Advocate Advocate Advocate, helping them choose the best Vendor's Advocate Advocate to help them choose the best Vendor's Advocate to help them choose the best Agent.
Anyone got any advice for a future VAAA?
Sounds like a lot of trouble to go to, and then you dont have the satisfaction of helping out a vendor in person.
We all have to make a dollar... Some dollars are just easier then others.
VA take a cut from the REA some 30-40% of the total commission.
Lets break it down, 2% commission (using this as an example/simplistic sake) on $500k = $10k commission.
From that the VA will take 30-40% (3-4k)
The REA will have the remainder of 6-7k, from this the principal (boss) will take about 60% usually to run the business 4.2k leaving 2.8 for the sale agents.
From this the listing agent would get 50% and the selling agent (agent who introduced the buyer and negoitated) the other 50%.
Meaning if the agent only did one part they would only receive 1.4k commission. Compared to $2,000 per part or $4,000 for both. if it was listed exclusively direct with the REA.
QUESTION: Which property would the REA be likely to work on harder?
You are really taking over $1,000 from the pockets of the REA.
With the average home taking with the average home taking 79 days to sell his pay per day (including weekends) with a VA is $17.72 per day to $35.44. Without the VA it is $25.31 - $50.63. This is not including the time till settlement which is when the REA usually gets paid commission.
My ethics are strong and work on all properties to the best of my ability, including VA as I can see the bigger picture of doing a good job and hopefully getting a refferal down the track. However it still hurts when you lose over $1,000 cause they used a VA over you just for the VA with the vendor to choose you at the end of the day.
BA I have a hard time understanding. A good REA will recommend properties that suit what you are looking for and don't ask for any extra money. A BA can charge 1-3% of the sale price depending on what you expect them to do which you (as the buyer) have to pay. Also I see a conflict of interest being the more you pay for a house the more they charge you in fees....
Lets break it down, 2% commission (using this as an example/simplistic sake) on $500k = $10k commission.
From that the VA will take 30-40% (3-4k)
The REA will have the remainder of 6-7k, from this the principal (boss) will take about 60% usually to run the business 4.2k leaving 2.8 for the sale agents.
From this the listing agent would get 50% and the selling agent (agent who introduced the buyer and negoitated) the other 50%.
Meaning if the agent only did one part they would only receive 1.4k commission. Compared to $2,000 per part or $4,000 for both. if it was listed exclusively direct with the REA.
QUESTION: Which property would the REA be likely to work on harder?
You are really taking over $1,000 from the pockets of the REA.
With the average home taking with the average home taking 79 days to sell his pay per day (including weekends) with a VA is $17.72 per day to $35.44. Without the VA it is $25.31 - $50.63. This is not including the time till settlement which is when the REA usually gets paid commission.
My ethics are strong and work on all properties to the best of my ability, including VA as I can see the bigger picture of doing a good job and hopefully getting a refferal down the track. However it still hurts when you lose over $1,000 cause they used a VA over you just for the VA with the vendor to choose you at the end of the day.
BA I have a hard time understanding. A good REA will recommend properties that suit what you are looking for and don't ask for any extra money. A BA can charge 1-3% of the sale price depending on what you expect them to do which you (as the buyer) have to pay. Also I see a conflict of interest being the more you pay for a house the more they charge you in fees....
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