« Back to Blog
Educated consumers are changing the real estate industry
April 26, 2013
It wasn’t too long ago that people buying or selling a home knew very little about real estate. In recent times, both the industry and consumers have transformed. A major factor is technology, which has changed the way real estate agents carry out the sales process (for the better) but more importantly, property seekers are becoming better informed through a variety of initiatives in the real estate industry.
Painting the picture of education
Social media and the internet have enabled property seekers to find information and also share their displeasure publicly which makes people involved in real estate more accountable for their actions. In addition, regulations have changed to record all commission payments, prevent dummy bidding and disclose details of sales to friends or family so this changes what actually happens during the sales process
Consumer publications have become readily available – for instance, Consumer Affairs Victoria produces handbooks on Buying and Selling Property. To educate those in the market, property information seminars for first home buyers, investors, self-managed superannuation funds and retirement planning often include information about buying and selling real estate
Further, changes in the real estate industry require Real Estate Institute Members to continue with professional development every year to maintain their membership of the professional association
The amount of property data and information has increased exponentially via auction reports, suburb profiles, newspapers, magazines, television programs, webinars, YouTube videos and online member portals.
Selecting the right information
There is now such a huge amount of information available – but selecting the most appropriate information to make a buying decision has become more complex. It’s easy to become trapped by the data and believe that all of the information can be collected online when a quick due diligence physical tour of the surrounding streets may reveal undesirable lifestyle factors (pollution, noise, difficult neighbours etc).
The vendor selling the property is usually represented by a sales agent but the purchaser is not always represented by a buyer’s agent. Tony Brasier, Managing Director and Chairman at PRDnationwide has recently said that many complaints against real estate professionals stem from buyers failing to understand who the agent is representing in a property transaction. “In my experience, any problems that arise through a transaction, and where an agent gets a bad reputation as a result, is because a purchaser believes that the agent is acting for [them] when in fact they’re acting for the person who is paying them and that is the vendor.”
Rich Harvey, Managing Director at propertybuyer.com.au and the NSW spokesperson for the Real Estate Buyers Agent Association of Australia (REBAA), agrees that buyers’ agents were important in the property transaction process because the majority of real estate agents he dealt with could see the benefits of dealing with a buyers’ agent who usually presented a qualified buyer to the transaction.
The best knowledge – a Buyers Advocate
From my experience, it is clear that once a consumer is well educated, they can see the benefit of paying for professional representation. A Buyer’s Agent can bid at an auction without emotion, appear anonymously if you are buying the property next door and negotiate effectively in difficult circumstances. If you are not personally working in real estate full time, it is unrealistic to expect that that you can generate the best deal for your circumstances or more importantly, for the longer term investment value.
An important factor is ensuring that your investment will hold its value and sales appeal in the event of any future emergency (loss of work, illness or change in family circumstances). An over capitalised family home on a main road next to a train line crossing and a freeway exit could be difficult to sell at short notice.
Ultimately, the vendor and the purchaser are both consumers and ensuring that both parties have adequate representation in this usually expensive transaction is more likely to increase the possibility of a successful outcome.
Given the increased complexity of the real estate market, it is no surprise that the most well educated consumers are outsourcing professional representation for their own transaction and consequently improving their own outcomes and the quality of the real estate industry in the process.