Do you really need a vendor’s advocate?
As Australia’s hot property markets start to cool, the vendor’s advocate seems to have become the latest accessory for sellers looking to get the best price from their home. But are they really necessary? Or are there lower cost alternatives?
Who uses a vendor’s advocate?
The vendor’s advocate has been around for about a decade now but they’ve only really grown in popularity in Australia in the past couple of years.
As the name implies a vendor’s advocate acts as an advocate on behalf of someone selling their house. In other words, they claim to hold the real estate agent to account by making sure that they’re using the right marketing strategy, spending money efficiently when it comes to advertising and otherwise keeping the seller’s best interests at heart.
Vendor’s advocates claim that they save vendors money by negotiating better terms for the sales process, as well as making them money by delivering a better sales price. But, while this may sound valuable, there could be some very big downsides to using their services.
The limitations on using a vendor’s advocate
For starters, vendor’s advocates are unregulated and it requires no formal qualifications to become one. One real estate industry veteran told Domain he was shocked when he found out a former pool builder had started a new career as a vendor’s advocate despite no real estate training.
However, the majority of vendor’s advocates are former real estate agents, who now earn their living by claiming to hold other real estate agents to account. That in itself can create enormous friction.
(Imagine if you had someone with the same qualifications as you telling you how to do your job).
But there’s even more to it than that...
The problems with the way vendor’s advocates are paid
One survey found that many vendor’s advocates charge no fee to the seller. Instead, they get their money via a conjunction fee from whichever agent they give your sale too.
Sometimes this fee can be as high as 50 per cent of the total commission.
So, while paying nothing up front may sound appealing, this arrangement has led to reports of vendors advocates simply auctioning out their clients’ sale to whichever agent offers them the biggest slice of the commission pie.
It also raises questions of the quality of real estate agents they engage...
Busy professionals don’t usually work for half their normal salary.
Other issues with vendor’s advocates
That said, not all vendor’s advocates take a slice of the agent’s commission. Some vendor’s advocates will charge you a flat fee and still allow the agent they choose to charge their full commission: meaning you can pay substantially more to get your property sold.
To justify their fee, vendor’s advocates often insist on also using their own auctioneers, bringing in their own home stylists and even turning their hand to the marketing of the property.
When this happens, the waters can be muddied when it comes to which of your two agents is supposed to handle a particular aspect of the sale. There’s the ever-present risk that nothing will get done, or it will get done twice.
There’s also the risk that the listing agent will put your sale in the ‘too hard basket’ or will make it their lowest priority.
So you’re likely to get less attention and ultimately have less control over the sales process rather than more.
A better alternative to vendor’s advocates
Agent Select is based on the premise that most real estate agents really do know how to do their jobs. And the best - and cheapest - way to have your own effective vendor’s advocate is by choosing the right real estate agent in the first place.
To do that you need to be in a position to make an informed call based on the real and independent data from real estate agents’ past sales. You also need to be able to analyse and compare agents’ strategies and commissions in a transparent way.
That’s why, when it comes time to sell your home, Agent Select lets you immediately pinpoint the top performing real estate agents in your local area and for your specific property type. Our comparison report lets you see every agent’s pitch for your business side-by-side and in the same format.
You’ll see exactly how much they expect your property for, how they’ll market your property and - most importantly - what they’ll charge.
All you have to do is let them compete for your work.
And best of all, Agent Select is completely free to you the seller. We earn our money by receiving the same nominal referral fee from whichever agent you ultimately choose. This fee is much cheaper than usual advertising costs Agents employ to get a listing opportunity. So it’s a win for all parties involved.
Find out more about how Agent Select can empower you to get the best price for your home on 1300 040 463.
Agent Select is Australia's only truly independent agent comparison site. We’re the only platform that has access to all the data on the best performing agents and, unlike many of our competitors we’re also not tied to any Real Estate agencies.