Historically, the use of buyer’s agents in the UK had largely been the reserve of professional property investors or affluent buyers looking to outsource the transaction to a third party expert.
Recent years have seen a marked increase in the number of domestic and overseas buyers leveraging the benefits of buyer’s agency services, including access to impartial, expert representation, off-market properties, an outsourced due diligence function, professional transaction management and a network of expert service providers.
Read on to learn more about the factors driving this growing trend.
1. Impartial, expert representation for Buyers – at last
Buyer’s agents offer impartial, expert representation and guidance for buyers, levelling a playing field that has historically been tilted in favour of sellers.
The English law concept of "caveat emptor" (roughly, "let the buyer beware"), places responsibility on buyers to conduct their own due diligence, investigate a property thoroughly and assess its condition, price and any potential hidden defects before finalising a purchase. There are limited obligations on sellers to disclose issues and limited recourse for buyers if they miss any.
In light of this, it is perhaps surprising that buyers in the UK have traditionally benefitted from only limited representation, principally through their solicitors. They have largely had to progress the purchase, assess the market and diligence the property themselves, across the table from selling agents, who are engaged to act in the best interests of sellers, with few incentives to highlight pricing, structural or other issues with properties they are selling.
Buyer’s agents seek to address this historical imbalance by advising buyers as to the extent of any potential issues, giving them up-to-date information on the property market and local area, guiding them through the process and managing the transaction as their trusted representatives.
2. Access to off-market opportunities
Acquiring ‘off-market’ properties – those that are not publicly listed – can offer a host of potential advantages to buyers. However, finding them can be challenging - it often requires strong industry connections, a skilled agent and participation in exclusive networks. By leveraging their connections, Buyer’s agents can open the doors to this market. There are several potential advantages to acquiring property through an 'off-market' transaction, including:
Exclusive access. Gaining exclusive access to properties that are not be available to the general public broadens the number and range of potential properties, and can provide the opportunity to find 'hidden gems'. It also gives comfort to buyers that no stone has been left unturned in the search, as it is truly ‘whole of market’.
Reduced competition. Off-market properties typically have fewer potential buyers, which can lower the level of competition. This can result in a better purchase price and more favourable terms for the buyer. It also reduces the risk of the buyer being caught in a bidding war, and in buyers consequently paying over the asking price for a property.
Efficiency. Off-market transactions can often proceed more quickly because they don’t involve the extensive marketing and viewing processes associated with publicly listed properties.
Less stress, more privacy. The lower visibility of off-market transactions can mean a more relaxed and less stressful buying experience, with reduced pressure on buyers to make a quick decision. They are also beneficial for purchasers who value privacy in their transactions.
3. Expert due diligence
The best buyer’s agents also carry out ‘deep dive’ diligence on potential properties for purchasers.
They can provide purchasers with financial analysis such as recent sold prices for comparable properties, average recent sold prices per square foot, expected rental cash flows and yields, as well as demographic and location data such as crime rates, local transport links and amenities. This raw data can give purchasers the confidence to ensure they are not over-paying for a residential property, that they are not looking in the wrong area or that their investment is more likely to achieve their desired returns.
Similarly, sourcing agents can perform initial viewings on properties for their clients - a process which tends to be very time consuming. These initial checks help flag issues that are not identifiable from photographs or estate agent listings (such as whether the property is on a flight path, in poor decorative condition, etc.). Buyer’s agent viewings can narrow the number of potential properties down materially and save significant time for buyers.
4. Transaction management
Buyers agents act as transaction managers on behalf of buyers, actively driving the process forward by carrying out the search, liaising with selling agents, undertaking initial viewings, conducting negotiations and arranging closing. They also help to provide feedback on properties that clients do not wish to pursue direct with selling agents, saving their clients time.
The best buyer's agents are well versed in the acquisition process and can provide step-by-step guidance for buyers, helping to negotiate the purchase price on their behalf, as well as acting as a trusted sounding board. They can impart local knowledge and insights which buyers would otherwise be reliant on the selling agent to provide.
5. Access to other expert service providers
Acquiring a UK property typically involves a buyer obtaining advice from a solicitor and surveyor, but for many also it also includes the need to consult with tax advisors, accountants, mortgage brokers (including specialist overseas or holiday let brokers) and others.
Buyers agents can leverage their network to provide connections to trusted service providers with the necessary expertise to help buyers. Having access to reliable and competent service providers helps increase the chances the transaction will run smoothly and reduce stress for the purchaser.
Summary
Impartial, expert representation and guidance, the ability to access off-market properties, detailed due diligence, driven transaction management and access to a network of expert service providers are just some of the factors behind the increasing popularity of the use of buyer's agents in UK property transactions.
About Oxstone
Oxstone is a market-leading UK property sourcing company and purchaser's agency. Our deep and long-standing connections across the UK property industry means our clients obtain access to residential and investment properties that are not available to the general public.
We also offer our clients expert property analysis services, superior transaction management and connections to recommended service providers. Our expert guidance through each step of the buying process ensures our clients are among the best placed in the market to succeed in their relocations or investments.
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