Power to the Buyers
New Zealand Herald article – By Maria Slade
A Northland real estate firm has set itself up as a “buyer’s agent” – whereby a property buyer pays it to work for them, rather than the seller.
Waipu-based goodGround Real Estate says it has done three deals in which it has worked exclusively for the buyer, and it believes there’s a demand for the service.
Founder Martin Albrecht says through the firm’s new Buyer Agency Agreements, agents work to get the buyer the best deal on a property.
For example, a client to whom he had sold a farm wanted to also buy the farm next door and asked Albrecht to work for him rather than the seller. He managed to save the buyer $90,000.
“At the time there wasn’t a lot around about how you set that up. We managed to do it … and that’s what gave me the idea.”
At one point he got a call from a woman in Wellington wanting help to find a house for her in-laws who had arrived from the United Kingdom.
No Wellington agents were able to do it.
“They all put her on their list of buyers, but she wanted to pay someone to get her the best deal.”
At the time, goodGround couldn’t cover Wellington but now it would be able to, Albrecht said.
The cost of the buyer’s agent service is an engagement fee plus 4 per cent of the agreed value of the property, and 10 per cent for every dollar goodGround saves the buyer under that agreed value.
“When you think about it, it’s absolutely illogical for a buyer to be operating through an agent who is representing the vendor.”
Albrecht said the idea wasn’t new and he was aware of at least one company offering it. However, that firm did not style itself as a real estate agency.
Alistair Helm, CEO of website realestate.co.nz, said buyer’s agents were an American phenomenon.
“The benefit is you effectively have professionals working for both parties.”
However, in the United States the buyers and listing agents are both paid out of the commission from the vendor.
Likewise, there were deals done in this country whereby an agent with a buyer would approach the listing agent and negotiate to split the commission on a sale.
He had not heard of anyone just charging the buyer, and the internet allowed potential buyers to do a lot of research themselves.
But there was room for innovation in the market and it could be a service that worked along the lines of a personal shopper – for example, for an overseas buyer seeking a luxury holiday home in New Zealand.
“Why wouldn’t you pay somebody who’s in New Zealand to act as a filter to recommend, to negotiate?”
Albrecht confirmed his service was aimed at the upper end of the market.
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