Source: Melbourne Investor Feb/March 2007

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The Emerging Giant Of Real Estate

Source: Melbourne Investor Feb/March 2007

Written by David McRea

David McRea & Co

David is a Buyers Advocate based in South Yarra. He has been in real estate since 1965, first as a qualified valuer, then a licensed real estate agent, before moving into senior management in listed development companies. David has been an Advocate since 2001.

 

The Emerging Giant Of Real Estate

The last seven years has seen the arrival, consolidation and acceptance of the Property Buyers Advocate in the Australian Real Estate industry.

The Advocate’s function

A Property Buyers Advocate represents the Buyer in all facets of the process of a property purchase. An Advocate stands between the Selling Agent and the Buyer and has the specific task of acting for a Buyer, exclusively, to provide an in-depth and professional approach to each element of a property purchase.

Until now, buyers have been left largely to their own devices in an increasingly complicated property domain without an independent and professional body to service their requirements at a time when making major investment/personal financial decisions.

The Advocate’s qualifications

Advocates work under The Real Estate Agents Act in each state and therefore the Principal of any Advocate Company must be a Licensed Real Estate Agent and staff must be at the least, Licensed Sub-Agents.

A competent Advocate and in particular one who is a Valuer, will draw on broad industry experience and in-depth analytical skills. They are up to date with the latest property trends and direction as well as being abreast of current and future economic forecasts.

The Advocate is therefore able to provide the Buyer, with an informed direction for sound property investment and future capital growth.

Critical steps of the Advocate’s role

The prime role and responsibility of the Advocate is to buy the right property at the right price for the Buyer and at the same time ensure that the Buyer has an educated understanding of all of the options available at the time of purchase.

1. Right property or wrong property. There is a great difference between buying a property that will perform well and one that will not.
2. Right price or wrong price. The old adage of ‘the profit is made in the buying’ still applies.
3. Right property at the right price. This can only be achieved if the due process of valuation and negotiation are understood and executed in a professional manner by the Advocate.
4. Fiduciary Duty of The Advocate. The Advocate who performs his task professionally has, by purchase time, educated the buyer into a comfort zone of knowledge.
5. Near enough is not good enough and the process of disclosure to the buyer of comparable sales combined with commercial advice is elementary to the Advocate carrying out his Fiduciary Duty.

Advocate to be client, not fee driven

The Advocate industry is currently in a rapid growth stage. In this pressured business environment, Buyers have less time available to source property in a market considerably under quoted by agents and lack the confidence/knowledge to successfully negotiate a deal.

Buyers are increasingly missing out at auctions and accordingly many end up in the Advocate’s hands, sometimes as a matter of last resort. At this stage, the Buyers look to the Advocate to get them into the market, but at the same time save them as much money and time as possible.

It is imperative that in these circumstances an Advocate be able to advise in both a responsible and commercial manner and at the same time be client driven and not just fee driven.

Future of the Advocate

This is not a game for tired Real Estate Agents who failed as selling agents. This is a platform for credible and ethical players wishing to genuinely assist Buyers and add an extremely responsible role to otherwise questionable practices in the Real Estate Industry.