For the last few years, Asian investors have been buying off-plan London properties at weekend exhibitions. But given that the sales agents at these exhibitions agents are often paid their commissions directly by the developers, and hence have strong personal interest in closing the sale, could this represent a conflict of interest?

As Asian investors often spend a few hundred thousand pounds and often more on a London property, a common source of stress is whether they may be making the wrong buying decision and missing possible flaws in a property or its location. This is particularly the case in cities such as London, as a good neighborhood could be just one street away from a bad one. Overseas investors do not have the advantage of being familiar with the housing market as locals do, and subsequently may make an emotional impulse purchase decision based off a glossy brochure or snazzy sales presentation. But this means they run a higher risk of not making a prudent business decision, which could cost them dearly down the road.

In recent years in Singapore, the CEA (Council of Estate Agents) passed laws stating that property agents must represent either the buyer or seller, and cannot collect commission from both. Prior to this, many homebuyers in Singapore would contact a property agent directly to view available properties on the market, convey offers to the seller, and complete the purchase. However, as many agents collect a percentage of commission directly from the seller, they may lack the incentive to show homes that are listed as “for sale by owner”, particularly if the owner is unwilling to pay a commission. The seller’s agent also does not have the obligation to disclose unflattering characteristics about a property, such as the number of break-ins in the neighborhood or whether there had been a recent death in the home. These are all factors a buyer would definitely want to consider, but it is not in the seller’s agent interests to disclose these facts to the buyer.

As a result, experienced home buyers and renters have increasingly been turning to using a “buyer’s agent”, who exclusively represents the buyer. In return for a fee or percentage commission, they work exclusively on behalf of the buyer.

Buyers agents are very familiar with local neighborhoods and can provide insights to buyers. They will also check housing databases such as the land registry to access the recently transacted prices of an area, and use this information to negotiate with the seller for a lower price for the house. They are also able to negotiate for the seller to cover a portion of costs such as stamp duty, and will help buyers find a lawyer to examine the sales contracts and surveyors to examine the property being purchased.

As a buyers agent is a local property expert on the buyer’s side to represent their interests, they will also show homes that are listed as for sale by owner and for sale by other developers if a buyer is interested in a particular area, so the buyer can weigh the pros and cons of each property and make a prudent business decision.

How do I find a Buyer’s Agent?

If you are considering engaging a buyers agent to help you find a property in London, a good starting step would be to first arrange for a discussion so you can understand the terms of the agreement in writing, including the services included and the upfront commitment fees you have to pay before the agent embarks on a search for you. Most importantly, you should feel comfortable with the agent and be confident he or she will represent your best interests. Once you have signed the agency agreement with them, they will help you with making arrangements for your travel to London, and personally spend at least two full days taking you around to see at least ten properties which meet your price range and other requirements. They will advise on the pros and cons of each property, and once you have shortlisted the ones you are most interested in, they will make the offer on your behalf to the seller and negotiate for a discount, and make sure all the paperwork is in place so things don’t go wrong and the sale can go through without unnecessary delays.