Both are real estate agents, so apart from the obvious, that one represents the seller and the other looks after the purchaser, what sets them apart?

Well, most selling agents have never been buyers’ agents and a lot of buyers’ agents have never been selling agents, but I have been both and there are some key philosophical and practical differences.

Now, believe it or not, selling agents have a bit of a reputation for over-paying for property. John McGrath, probably Australia’s most famous real estate agent, has a particularly stellar record for losing money on his real estate transactions. Only the other weekend, it was noted in Title Deeds that he “copped a loss on Tallowwood, his weekend retreat at Duffys Forest”. Over the 12 months in which he owned the house he managed to lose nearly $700,000 plus renovation costs. When you add in the stamp duty, whch would have been over $240,000, that’s a million dollar change of mind. Adding insult to injury, he sold another property earlier this year, this time in Walsh Bay, for $45,000 less than he paid for it in 2009. If my memory serves me correctly he also took a bath a few years ago on a Potts point apartment that he “unimproved” by converting it from a three bedder into a giant bachelor pad.

Selling agents simply aren’t as critical as buyers agents. Why is this?

Bryce Holdaway, my partner in crime on Location Location Location Australia, sums up the differences in this way: a selling agent is skilled in marketing and negotiation, a buyers agent is skilled in property selection and negotiation. I can take it a step further. The selling agent doesn’t get to choose what they have to sell. In some cases they list a property that will be very popular but often they list something that is a bit of a challenge. So a good agent will be very skilled at objection handling. They become very adept at seeing the positives and glossing over the negatives. Consequently, they have a cup half full approach to buying property. On the flipside, by casting a critical eye over a prospective purchase, a buyers agent will be more objective when determining what is a good property and then establishing the right price to pay.

Careful of free advice from your friendly agent.

We come across quite a few people who have such a good relationship with their selling agent that they seek out their advice when it comes time to buy. They recognize that they need expert help, which is a great thing, but the selling agent is not the expert that they need. Apart from the fact that their favourite agent views property through different lenses, they are usually receiving free advice. And free advice is worth what you pay for it...

Not that I charge my friends and family for my professional opinion, but I can’t help but notice that those who benefit from our free pearls of wisdom are much less likely to actually take the advice. But our clients, on the other hand, who have made a commitment and paid upfront for access to our expertise, always place a high value on what we tell them.

But, I digress. It is about getting the right person for the job. Let the selling agents stick to selling and the buyers agents stick to buying. That way, when you sell you will get the best price and when you buy, you are more likely to have a property that will be easier for a selling agent to market down the track. That is, there will be less objections that need to be handled.

You’ve made the decision to get professional help. After all, purchasing a property is costly and carries huge risks. So how do you find a buyers’ agent and then decide which one will do the best job for you?

Ask the local selling agents – they will tell you who is active in the area, who has the best local knowledge and who are the best negotiators. Possibly more importantly, they will tell you who they respect, which means that they often give a better quality of information to these advocates.

Look for an agent who takes the time to ensure that their clients are very comfortable with what the market is doing and what they can expect to get for their money. Sometimes this means that early opportunities aren’t grasped as the client may not be ready at the time, however they will be prepared so they can be confident when they do buy.

We think that past performance is the best predictor of success. Don’t rely on written testimonials, ask for the phone numbers of past AND PRESENT clients so you can get a sense of the way they work and the quality of advice and service along the way.

Don’t go with the cheapest. There are a variety of operators out there, and a range of pricing structures. Personally, I do not understand how a buyer’s agent can charge a percentage of the purchase price, so my advice is to ask for a fixed fee. Beware that there are low budget operators who may feel the financial pressure to push you to buy and get you off their books quicker than a professional who has quoted you based on the work they believe will be involved in getting you the best outcome.

Beware of those who impose time limits and postcode restrictions. In our experience many clients’ briefs are adjusted and sometimes completely rewritten as we go through the purchasing process with them. You can’t expect to buy what you initially thought you wanted before you knew what you didn’t know!! Sometimes it is a straightforward process, but not always…

Lastly, if you live in the same city, meet with them. How do they come across? Do you like them? Most importantly, do you TRUST them?

We are starting to see increased media accounts of slowing housing price growth, falling auction clearance rates and lower borrowing figures. Call me a cynic, but I often see these stories before we see any evidence at “ground level” of a slowing market. However, they often end up being self-fulfilling prophesies. As buyers start to read more negative property stories, they begin to believe them. Add this to a healthy dose of wishful thinking (haven’t we all been wanting prices to drop?) and we begin to see caution creeping into the market.

What happens when buyers are cautious? Usually the first thing we see is a fall in auction clearance rates. People suddenly no longer want to compete for property. We hear the phrase “we’ll just wait and see what happens.” Instead of deciding what they are prepared to pay (then bidding over their limit), the punters wait to see what price the vendor wants and then decide whether that represents value or not. So, if you are the only buyer prepared to bid at an auction, the power is actually in your hands to negotiate a good deal.

If a property is passed in at auction then advertised at a reasonable price, you can still see competition as buyers will react to a well-priced property. However, if it is perceived as being over-priced, buyers will not make offers. Then the property gets a stigma (there must be something wrong with it). Often these turn out to be great buys after spending a long time languishing on the market.