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New UK trade body launches for buyers' agents

20 February 2009
Written by Rosalind Renshaw

A new UK trade body, the Association of Property Finders and Buyers Agents, has opened for American-style agents who represent buyers only, often handling all price negotiations with the selling agent.

AFPBA members will be chiefly focused on representing the buyer during the sales process and chief executive Tim Hammond says it will help address the balance between sellers and purchasers.

He said the new organisation – which has already recruited 15 members – would promote standards of professionalism, raise the profile of the industry, provide a united voice for buyers’ agents and restore confidence to homebuyers.

He said: “In general, homebuyers harbour a mistrust of estate agent valuations and are worried that the media’s worst-case scenario of further double-digit percentage drops in house prices in 2009/10 would result in anyone buying at today’s asking price suffering a considerable loss in their property’s equity within a year.

“In the US, well over 50% of the population use a buyers’ agent to assist in the home-buying process, and regulations have long been in place there to protect the buyer and eliminate the conflict of interest which exists when one firm attempts to represent both buyer and seller in the same transaction.

“For UK homebuyers there are no such regulations and estate agents have been free to act as the intermediary between vendors and buyers.”

He claimed: “Estate agents have used their position on the high street to present themselves as the ‘intermediary’ between property sellers and buyers, but this has left homebuyers at a disadvantage. How can prospective buyers get fair representation in negotiating their property purchase from an estate agent who is paid by the vendor to sell their property for the highest price? Why has this conflict of interest that estate agents have, been allowed to continue for so long in the UK?”

Hammond, a buyers’ agent for nine years, went on: “Historically, the traditional estate agency model has only served to drive up the asking prices of property, as competition between local estate agents has led to higher valuations, with most vendors naturally going with the estate agent with the highest valuation.

“Lack of awareness that buyers’ agents exist (for the general public) has meant that most homebuyers have relied on the estate agent to advise them on what price the vendor would accept. As estate agents are paid a commission by the vendor as a percentage of the sale price achieved, then this ‘conflict of interest’ is always going to be to the detriment of the homebuyer until they get their own professional representation.

“Until recently, ‘professional buyer representation’ was considered the preserve of the well-off. But buyers’ agents (or property finders as they are also known) are now dealing with an array of house hunters, including first-time buyers and the general homebuyer who wants someone to help them research, plan and negotiate on their property purchase.

Hammond said the new body could be of interest to estate agents thinking of opening buyers’ agent operations and who would like guidance.

An existing body, the Association for Relocation Agents, has been going nearly 21 years and has some 200 members, but Hammond said its scope was too broad and concentrated more on relocation than representing a buyer.

www.apfba.org

Comments

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    The post from Chesil was interesting. In the US fees and representation are not always joined together. In a typical real estate transaction the Seller pays both the Sellers (listing) agent's fee and the cooperating commission, or buyers agent's fee.
    The goal is to open up the property to as many buyers as possible thereby raising it's ultimate selling price.
    We typically split commissions equally. In the event that I as the listing agent negotiates a lower than normal commission(for me), I offer the buyer's agent a commission more than what I make so as to make the property attractive to other agents. That will also insure that it is not exlcuded in the search by a buyer's agent who can make more on the house across the street.(which is unethical-agents should show all properties that fit a buyer's parameters regardless of compensation). But that's another topic.

    My question is, how do buyer's agents determine the value of a property? Do you have access to all of the sales data?
    We have a MLS(Multiple Listing System and I can go back as far as 1988 for comparable sales.

    I'm also stunned by the lack of regulation in the UK. We have state Labor Licensing and Regulation and have to take 60hrs of education and pass 2 tests before we get a license. Then after 1 yr we have to go through another 60hrs of education. Every 2 yrs. we have 12 hrs of Mandatory Continuing Education. If we get a grievance filed against us it goes to the local board of Realtors then to the State. Fines are large and many Realtors lose their license every year for improper conduct.

    • 02 March 2009 01:10 AM
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    Tim i think you talk alot of sense i wish your association great success.

    • 21 February 2009 07:11 AM
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    Sure. That's very likely in the current market as buyer's are not prepared to pay the inflated valuations, when the media are reporting further falls in house prices in 2009/10. The fact remains that the estate agent technically works for and is paid by the vendor, and the buyer is disadvantaged in the negotiation unless he has the professional representation of a buyers agent. The APFBA will help readdress this imbalance by increasing the consumer awareness of the benefits of using a certified buyers agent. I am also encouraged by the formation of new 'buyer' agencies such as Richard Rawling's Homebuyers Agency as I strongly believe that more buyer representation will lead to greater buyer confidence and in turn more sales transactions for estate agents.

    • 20 February 2009 20:55 PM
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    I suspect that in the current market agents are working hard to get sellers to accept offers from buyers even though they may well be considerably lower than the agents "instruction winning" valuation. In this capacity I woud say that agents are in fact working with the buyer against the vendor. Come to think about it isn't that always the case in reality.

    • 20 February 2009 18:28 PM
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    Spot on! Having just launched a homebuyers agency on a national franchise basis, we had thought to start our own such organisation, but my next call will be to Tim Hammond with a view to establishing a relationship. And if their code of conduct reflects our standards or professionalism, integrity and great service, then membership of the APFBA will be mandatory for our franchisees and their consultants.Well done!

    • 20 February 2009 15:04 PM
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    Chesil, I'm sorry but I have to agree with Hammond. Buyers are being left in the hands of Estate Agents that work for the vendor, so who works for the buyer?? It's long overdue Estate Agents walletts have been getting fat by pushing prices up just to make an extra buck... don't get me wron if you can make an extra buck then fair play. On the other hand buyers need protecting from some Estate Agents that are just out of order when dealing with buyers I know of another company that works for buyers and I will be putting them in touch with Hammond because frankly enough is enough.

    There is a new dawn coming and I can't wait well done Hammond if you get negative reports baack from Estate Agents you can bet your bottom dollar they wont be the honest ones.

    • 20 February 2009 13:03 PM
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    Yes at the APFBA we do have a formal system to ensure our members adhere to a strict code of practice and members charter. We have also been carrying out a comprehensive consumer study, results of which will be published soon. BTW. none of our members are bored housefwifes as far as I am aware !

    • 20 February 2009 12:56 PM
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    It always strikes me as odd that in order to justify your own position you have rubbish someone elses. As agents we are called many things but I think the public are generally aware that we are not intermediaries and are in fact working on the sellers side as the fee obviously comes from that direction. Whilst there are a few very good buyers agents, in the main they seem to be a lot of bored housewives with little to no experince in the property market doing this job. They will only be of use if they are like the NAEA with a formal system of examination or merit based on practical experience. That of course would be too difficult - because everybody wants something for nothing these days and that includes being called a professional with no proof of understanding or justification for fee and service.

    • 20 February 2009 12:12 PM
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