Property - US style Buyers Agent in the UK

Do you mean something like this company:

2. Mouse.

In message , wooks writes

There are a few people who do it, we've had a few viewings over the years from such people but it never led anywhere. I think it would only really work for the multi-millionaire who instructs someone to go and buy him a mansion within so many miles of a capital city somewhere, I don't think there would be too much demand for that sort of thing.

Rather more common, however, are buyers acting for property investment companies.

Yes see

County Homesearch are one of the biggest operations -

Daytona

It works in the US because it is (usually) the seller who picks up the bill.

In the UK it would be the buyer who pays and there are few buyers who are prepared to pay someone to trawl Estate Agent ads for them. There are some who are prepared to pay for this, so there are a small number of agents who provide such a service, but I doubt that a extensive chain could be established for this service.

tim

I think thats a misleading oversimplification of what happens in the US.

Well if you put it like that..... and alternative way of viewing it is having expert advice on hand for the biggest purchase most people make in their lifetime. For those who get it wrong it is the most expensive mistake they will ever make.

Perhaps you'd like to tell us the system then.

It is my understanding that when you sell a house in (some states of) the US the seller is obliged to pay the buyer's agent. How else would they get away with charging 3% for ringing around a few selling agents for details and then taking the buyer on viewings (something that is done by the selling agent in the UK).

The fact that the majority of people don't use such agents suggests that they don't see it this way either

For a very small minority. For most people who make a mistake, selling it on to some other _mug_ is usually not too difficult.

tim

This would be the same majority that were persuaded that endowment mortgages were a good idea.

The economic viability for the Realtor acting as buyers agent depends (amongst other things) on their ability to save their clients money by using their professional skills to get them a better deal than they can manage by themselves.

The relevance of this is?

This is patently obvious.

What is not patently obvious is the whether they do, in fact, achieve this. As it would be impossible, after the negotiation, to tell if the agent had done better than you could, it is unsurprising that people won't commit to spending circa

tim

it's as relevant as the point it responds to.

Of course it's possible. Everybody has a notional figure of what they were prepared to pay for a purchase. You simply compare that with the deal the buyers agent negotiates for you.

Fees are not due until completion - you are obviously not going to complete on a deal if you are not happy with it. The kind of people that can nail down to the nearest 5k the optimum price of a 250k home obviously don't need an agent.

I don't agree.

The point is that endowments were actively sold.

The services of a selling agent are passively sold (if available at all).

You can't compare the take up of one, with the take up of the other and use that to compare the usefullness of the product when the real reason for the difference is the selling process.

No they don't. The average buyer doesn't have the slightest idea what price he 'ought' to pay for a specific house when he first visits. You have no way of determining what price he would have achieved on his own.

This discussion isn't about whether they 'need' an agent. It's about whether they can be persuaded that they offer value for money.

tim

Right. So the real reason that the majority of people don't use buyers agent is because they haven't been informed/exposed to/sold the concept.

It's not because the majority think they are a bad idea or don't believe in them which is what you seemed to suggest.

Exactly. But in his mind, he has a price that he is prepared to pay for a property that interests him - which is actually what I said.

It may be too low - in which case a good buyers agent would save him from missing out on a good deal.It could be too high in which case the buyers agent would save him money.

Replace "buyers agent" with estate agent in that scenario and the clients dilemma should be apparent. The estate agent trying to persuade a buyer that he is undervaluing a property wouldn't be believed and he isn't going to dissuade a punter from overpaying.

I don't have to.

Right. So like anything else in life you apply your own value for money criteria to the service on offer. It could be how much money or time you save. It could be how much trouble (in the legalistic/contractual sense) you could have got into if you were not represented by a licensed professional. The analogy you present is that of an estate agent - but really a more appropriate analogy when you consider the type of service a buyers agent would have to offer would be an accountant.

OK, but the original question was a comparison with the US. You (or anyone) still hasn't addressed my point that these agents are used by buyers in the US because they (the buyer) does not directly pay the fees, whereas in the UK they would. It's easy to get good vfm from something that you aren't paying for.

You might be right, but I still suggest that you cannot prove it.

You do if you wish to establish whether the buying agent has achieved a better price.

Are you really suggesting that I am talking about 'my' position or did you mean "one applies....."

What I am doing here is suggesting why people don't use buying agents in the UK.

ISTM that using a buying agent doesn't save very much time. Selling agents will convey prospective purchasors to out of the way properties (a job performed by a buying agent in the US I believe), and many people will find the idea that the agent looks around properties before picking a 'few' to show them, rather strange. People like looking around all the properties for themselves, I am sure that they would fell that they had missed something they might have liked if they weren't shown it.

I understand the claimed 'cost' implications, but you really do have to show that there *is* a cost implication before you can sell it.

We have solicitors who do this. No-one need get in a contractual mess buying a house in the UK. I understand that the position in this respect is not so clear in other European countries.

I don't think I made this analogy.

tim

Even if the American system operates as you say the buyer still pays indirectly in the price he pays for the property. Inevitably the price could have been lower but for the agent fees.

It's like anything else. If customers are happy with the service and the price they paid for it thats all that matters.

It's not a service that is widely available at this time nor is there much information about it so its hardly surprising.

Imagine how much better a job your solicitor could do for you if he/she actually came round to the property - viewed it - and asked the seller (or his agent) questions on your behalf and advised you accordingly. Negotiating points could be identified, points of contention dealt with in the contract. Thats the sort of thing buyers agents do in the US.

Maybe analogy is not the right word then but you certainly made the comparison.

If everyone did it this way yes. But AIUI the problem is the seller has no choice but to pay the buyers agent. He has to price his property on the basis that he will do so, and I think that he is not allowed to discriminate against buyers who are using one.

I not sure what your point is.

I agree that the service isn't widely available. But the discussion is about whether it would be purchased if it was. You can't use the fact that the service isn't widely available as 'evidence' in such a discussion.

They do ask the seller questions. I think you are underestimating the UK legal system.

tim

Up until the late 80's the Americans were operating a system similar to ours. The concept of Buyers agents started taking hold in the early

You are focusing solely on the increased costs of real estate transactions in the US, but the fact is the Americans pay more to their realtors and get more of a service. They deal with regulated licensed professionals who can be sued for failing in their obligations to their clients. In the UK estate agents still get a hefty whack for providing far less of a service and you put your trust in him at your peril - Latinos have a saying - the cheap can turn out to be very expensive.

such an innovation. Time will tell.