Business, Legal & Accounting Glossary
Buying agents (also known as relocation agents or property search agents) is a term used in the UK to describe people acting as agents on behalf of a buyer and not the seller, as do traditional Estate agents (or, in the United States, Real estate brokers) whose job is to obtain the maximum price for a property for the seller. Buying agents represent the buyer’s interests and normally undertake negotiations on their behalf to acquire a property for the best possible price and terms.
According to The Observer, around 63% of homes in the USA were bought using Buying Agents (or, as they are known there, Buyers agents) whilst the figure in the UK was closer to 1%. However, as the British property market booms, the figure is rising dramatically.
In the UK, the concept of Buying Agents first appeared in the 1980s, with one major pioneering company being founded in 1984, and it developed the trend for buyer representation, leading to a noticeable increase in private sales (without the need for estate agents). Buying Agents have always been the preserve of the seriously wealthy with million pound-plus houses, but ‘entry-levels’ are falling all the time, with many Agents now taking on searches for property valued at under £300,000.
Television shows such as Location, Location, Location have raised the profile of Buying Agents in the UK, and have facilitated the emergence of national ‘chains’.
The main advantages of using a buying agent are the savings in time and money and access to properties not available on the open market. Whilst nearly all charge a registration fee (anything between £500 and £2500) and a percentage of the purchase price of the property (usually between 1.5% and 2% of the sale price), the agent’s negotiating skills and access to properties before they reach the open market often mean that clients purchase properties for substantially less than they would if they went to estate agents or vendors directly.
Buying agents will preview properties for each client, shortlist the most suitable, and usually accompany clients on viewings of the shortlisted properties. Many offer services such as helicopter viewings and chauffers for high-end clients.
Most Buying Agents specialise in a particular location: a large part of their expertise is derived from local knowledge, personal contacts with local estate agents, and inside-information about properties that are not yet on the open market. Buying Agents generally form lasting symbiotic relationships with estate agents, ensuring estate agents have access to a steady supply of qualified, serious buyers and in return, buying agents receive access to the most desirable properties before they reach the open market. Situations can arise where Buying Agents and Estate Agents ‘wrap-up’ areas, dealing so regularly with each other that ‘normal’ buyers are excluded from the market.
Agency sizes vary from the one-man-band with an encyclopaedic knowledge of their chosen village or town (there can be huge variations in the level of service) to the mid-size, which specialise in one or two popular locations such as London and Devon, to the nationwide ‘chain’ services. Some estate agents also offer successful buying services despite reservations over conflict of interest.
AFPBA.org (Association of Property Finders and Buyers Agents) is the industry body for the UK and International property finders and buyers agents. A non-profit organisation, APFBA.org has been set up to improve standards of professionalism in this industry sector. In a largely unregulated market, APFBA Members voluntarily agree to follow a professional Code of Ethics and Standards of Practice.
APFBA was founded in 2008 to raise the profile of the industry and to establish guidelines for the professional conduct of property finders and buyers’ agents in the UK and International property markets.
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This glossary post was last updated: 1st May, 2020 | 0 Views.