Buyers warned of "free buyers agent" trap

By Terry Ryder, 4th December 2009

It’s a trap for inexperienced players: real estate operators advertising themselves as “free buyers agents”. 

These shonky operators purport to be acting in the best interests of buyers, while charging no fee – but the reality is they have links to selling agents who pay them commissions if they steer buyers towards the selling agents’ properties.  

The marketing pitch includes claims of “free buyers agent” services and promises of cash-back offers. These operators should not be confused with genuine buyers agents, who are paid by the buyer to represent their interests in finding suitable property from the broad market. 

The Real Estate Buyers Agents Association of Australia (REBAA) says the so-called “free buyers agents” are acting in the best interests of sellers, not buyers. It says only a buyer’s agent paid by the buyer has a legal obligation to act in their best interests. 

REBAA president Byron Rose says there’s no such thing as a free lunch, especially in the real estate industry. “These operators rely on taking a cut of the selling agent’s commission, known as ‘conjuncting’, says Rose.  “Many of the larger and more professional selling agents have a policy of not accepting conjunctions, while other selling agents will only conjunct on properties that they have had difficulty selling.  

“The reality is that these ‘free buyers agents’ only have access to second-rate properties that the rest of the market has rejected and unsuspecting buyers could be stuck with a lemon. 

“The industry has always attracted its fair share of shonky selling agents and it is disappointing to see some of these unscrupulous operators are now  promoting themselves under the guise of being a ‘free buyer’s agent’ to take advantage of  innocent buyers.  

“Some of them claim to be selling agents, buyers agents and financiers all-in-one, so they have a complete lack of independence in the buying process.” 

ENDS