Property finder

Property finder

Property Finders (or "Property Search Agents" as they are also known) are companies and individuals representing a buyer in a property transaction. The term is more common in the United Kingdom, but in the United States the situation is referred to as buyer brokerage, and in Australia it is known as Buyer Advocacy.

Property Finders specialise in sourcing and negotiating the purchase of property on behalf of the buyer. In essence, the Property Finder will develop an in-depth understanding of his client's requirements, desires and property goals, and then attempt to find a property which matches all of these requirements for his client to acquire.

In Britain until the early 1990s, agents involved in a property transaction worked for the seller as Estate agents. Now, property finders exist to represent the interests of the buyer or tenant. Today in the United States where fiduciary obligations exist, if the buyer is working with a broker other than the brokerage which represents the seller by "listing" the property for sale, he may choose to enter into a buyer brokerage agreement to be represented. (In some cases where dual agency is permitted by law, even the listing broker may represent the buyer). If the buyer does not enter into this agreement, he/she remains as a "customer" of the broker, who is then the sub-agent of seller's broker.

History

Property Finders/Buyers' Agents originated in the United States during the early 1990s and have grown to become involved in over 67% of property transactions there. In recent years, stemming primarily from the relocation industry, property finders now have a prominent involvement in property purchases and rentals across Europe.

Fees

The majority of property finders charge an engagement/retainer fee before they begin the search for a property. Users of full service estate agents in the UK can expect to pay a flat fee while, more typically in the US, a percentage of the property purchase price may be received from the seller's broker by means of an offer of compensation to cooperating brokers or it can be paid directly by the buyer.

Based on US tax laws, investors may find that the cost of using a property finder is tax-deductible when purchasing an investment property. However, for the owner-occupier, no tax break may exist unless the total acquisition costs versus the eventual sales price and gain can be verified if any capital gains tax is due. In some cases the Property Finder will only charge a percentage based on what they can save with a transaction.

Why people use Property Finders

For some, the appeal is the time savings. Having the property finder search out ideal properties keeps many buyers’ weekends free from scouring through newspapers, meeting with agents and attending inspections. Some firms offer evaluation services in addition to basic finding services; that is, properties are evaluated in terms of potential for Capital Gain and Rental Return, quality of location, potential for renovation or redevelopment, etc. The benefits of local market knowledge and expertise have been found to be a key benefit of using a property finder.

Property finders are a particularly useful resource for buyers of overseas property, eg. ski property. The advantages of using a property finder in a foreign country include:- an established network of local contacts- 'on the ground' representation- knowledge and understanding of the different tax and legal systems.

In contrast to most US states' common law (where Realtors work for and represent the interests of the seller and not the buyer -unless they enter into an agency agreement to do so- and their function is to obtain the highest price on the best terms for the seller), a property finder/buyer's broker is working for and represents the buyer, thus creating a balance between the skills and expertise available to both parties in a transaction.

See also

*Buying agent
*Buyer brokerage
*Real estate broker
*Realtor
*Estate agent (United Kingdom)

External links

* [http://www.naeba.org National Association of Exclusive Buyers Agents]


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