Make sure your Buyer’s Agent’s Incentives are Optimal
Mar 15, 2023
The whole point of a buyer’s agent is having someone in your corner working to get you the best outcome. So make sure you don’t inadvertently incentivise your buyer’s agent to act like a seller’s agent.
A cynical old man I know said to me “The problem with buyer’s agents is they only get paid when they buy something, so they’re incentivised to just do any deal they can … even if it means their client is overpaying.”
As a buyer’s agent who only works on exclusive engagements and with an up front retainer I explained to him that I have no temptation to buy just any property. In the case of my briefs I know that if we don’t secure the property at hand we will end up securing something else. Essentially I am going to get paid in the end either way so my focus is on getting the client the absolute optimal outcome. THAT is my job and THAT is what is going to get me repeat business and referrals.
Don’t kid yourself that you’ve done a clever thing if you engage a buyer’s agent on a non-exclusive engagement and not paid an up-front retainer. In that case you are incentivising your buyers agent to get you to do any deal they can otherwise they may not get paid. Effectively you will have got yourself someone who will act like a seller’s agent only you have to pay them!
In the film “All The Money In the World”, Fletcher Chase (played by Mark Wahlberg) is asked who’s side he is on. He responds “I’m on my own side. Always.”. Remember that ultimately everyone in life is on their own side and going to do whatever they believe is in their own best interests. The difference is some play the long game and some think short term only.