The idea that one real estate agent would oversee another real estate agent in the sale of a property seems absurd. Yet it happens: it’s called vendor advocacy. Vendor advocacy is a service whereby a real estate agent who calls himself a vendor’s advocate will appoint another real estate agent to sell a property in Melbourne. The vendor’s advocate will then oversee the real estate agent in Melbourne ensuring he performs his duties properly. This relatively new phenomenon preys on uninformed vendors. The vendor’s advocate has essentially convinced the vendor that he is the good guy and the real estate agent is the bad guy. This is a dangerous situation for the vendor as unquestioned trust – which is essentially what the vendor’s advocate is expecting – in any substantial financial transaction often results in a less than satisfactory outcome.
The service of vendor advocacy is mostly provided by buyer’s advocates as a means of increasing their revenue base. This is clearly unacceptable and potentially unethical as it could easily lead to a conflict of interest where one person found themselves advising both parties to a transaction.
The service of vendor advocacy is riddled with anomalies. For instance, if a vendor’s advocate purports to be so highly competent that they are qualified to manage another real estate agent in Melbourne, why aren’t they performing the role of the real estate agent directly? The answer is that a vendor’s advocate does little of the work yet claims a substantial proportion of the commission: it’s easy money. Vendor’s advocates don’t carry out open for inspections, don’t liaise with buyers, and have minimal influence on the marketing campaign. Their main role is to review offers before they are presented to the vendor. Occasionally they will affect the outcome of the negotiation, but in the greater majority of situations a vendor’s advocate will have no positive impact on the property’s sale price at all. Many real estate agents in Melbourne who are overseen by a vendor’s advocate certainly believe this to be the reality.
When a vendor’s advocate is used, sales commission is shared between the advocate and the real estate agent. In other words the real estate agent’s normal fee is substantially reduced, though they are still doing the same amount of work. This is all bad news for the vendor. First, the overall level of service they are provided with is likely to suffer. It’s quite simple: when you are being underpaid for a professional service it is likely that the quality of your service will suffer. Nobody likes working for substantially less than they are worth, and real estate agents in Melbourne are no different. Second, in those situations where the real estate agent receives their normal commission, the vendor ends up paying a substantially higher total commission in order to reimburse the vendor’s advocate as well. Either way, real estate agents in Melbourne loath these arrangements, though most reluctantly agree as it is difficult for a real estate agent in these tough times to decline a listing when a vendor’s advocate calls. In their eyes, a small fee is better than no fee.
As vendor’s advocacy grows, we hear of more and more situations in which vendor’s advocates deceive their client (the vendor) into thinking they have achieved a higher sales price through the skills and efforts of the advocate. The concept of vendor advocacy suggests that the real estate agents they oversee are either not trustworthy enough or lack the skill set to market and sell real estate. This is an insult to real estate agents as their area of expertise is marketing and selling property.
