The terms Buyers Agent and Buyers Advocate are often used as if they were interchangeable, but in reality they’re not exactly the same thing. And that difference really matters when something goes wrong. In Victoria, both roles need a current real estate agent licence under the Estate Agents Act 1980, but that’s where the similarity ends. Someone working as a sales rep under a principal licensee has a different kind of authority, different levels of accountability and a completely different chain of command to answer if things start to go pear-shaped. And yet you’d be hard-pressed to find that mentioned in a firm’s marketing materials.
The Advocacy Part That’s Notably Missing from a Lot of Promises
True advocacy in property buying is about more than just finding a place to live. It’s about advising a client to walk away from a property they’ve developed an emotional attachment to, even though it means they might have to delay their move or go back to searching. It’s a tough call, but that’s what they’re paying for when they engage a Melbourne Buyers Advocate to act on their behalf. It’s the kind of thing that costs time, patience and resources. But it’s also precisely what the engagement fee is supposed to buy.
Now some Melbourne advocacy fee structures have a bit of a problem here. When the fee is a percentage of the sale price, it creates an incentive for the advocate to push the client to pay over the odds. That’s not always in the client’s best interests, and it’s definitely not in their best interests when the market is soft and prices are dropping. Flat fee structures get around this problem, but only if the client knows about it and agrees to it up front. Neither model is dodgy; it’s just a matter of whether the client is being treated fairly and transparently.
How Melbourne’s Current Market is Changing What a Great Buyer’s Advocate Does?
The auction clearance rates in Melbourne have been stuck in the mid-50s for a while now. And that changes everything. In a market that’s clearing at over 70%, it’s all about being quick and having access to the right people. But in a softer market where properties are passing in and vendors are more willing to negotiate, the quality of the advocate’s negotiation skills becomes everything.
So if an advocate built their reputation by getting clients into auctions during the growth phase, they may not be the best fit for this kind of market. What they need is someone with a strong track record of getting the best deal in a tough market, and that means looking at their recent results, not their whole career.
Post-Engagement Agreement: What a Good Advocate Will Do for You
- A written search brief including a suburb shortlist and reasoning behind the choice, rather than verbal discussions followed by sporadic property suggestions.
- Weekly reporting on inspected properties, rejected properties and a detailed explanation of the reason for each rejection.
- Presence of an advocate at every inspection, not leaving this job to their assistants or relying on vendors’ reports about building conditions.
The lack of any documentation in all those processes is already enough to say how the engagement will go. Buying property is worth some paperwork.
What to Ask Prior to Signing the Engagement Agreement?
How many of their recommendations during the past 12 months have led the client to sell the property later for a loss or for a price lower than the acquisition cost? This question says more about the purchasing ability of an advocate than all testimonials pages.
Ask if referral fees are paid by conveyancers, building inspectors and mortgage brokers who are recommended by the advocate. Ask what happens to the engagement fee if the contract is cancelled before the purchase takes place. The advocate who answers this question openly and provides some evidence shows the behaviour that engagement promises.
The advocate who refuses to answer the questions in favour of explaining something else has just told you much about how the search process will go after the payment of the retainer.
