Most people have a good idea of what an estate agent does. But when it comes to a property sourcer, understandably, not so much. It’s not a common job title after all – and there aren’t many jobs advertised for property sourcers online (although we are recruiting, check out our job posting here!)
For many people, titles and terminology in the property market can be confusing. With complex jargon like listing agent, property buying agent, estate agent, selling agent and so on, it can be difficult to know which service you require.
The only similarities between property sourcing and estate agents are that they both involve property.
Role of a Estate Agent
- Seller and estate agent get together to set a price for the seller’s property;
- Estate agent advertises the property as a ‘Sole Agent’ and shows potential buyers around;
- Estate agent receives offers for the property and tells the seller who then chooses one of the offers;
- The property is sold and the estate agent receives a percentage of the sale from the seller.
It’s clear that the estate agent will be working to secure the best possible price for the seller (since that is where their commission comes from). A property sourcer, on the other hand, gets their commission from the buyer and will be working in line with their best interests.
In contrast to the estate agency model, a sourcing agent works in a different way:
Role of a Sourcing Agent
- Sourcer meets with the seller (or someone selling on his or her behalf);
- The purchase price is agreed and a ‘Sole Agency’ or ‘Option’ agreement to sell;
- Sourcer markets the property to clients and an investor agrees on the deal;
- Solicitors are engaged and the property purchased;
- Sourcer receives a fee from the investor (either a percentage of the purchase price or a fixed fee agreed earlier).
The brokering process between the estate agent and sourcing agent may not appear to differ hugely, but the effect that this can have on achieving your goal could be huge.
Let’s say for example you’re an investor looking for a standard two bedroom Buy to Let property and you decide to work with a local estate agent to help you find this.
If we look closely at how an estate agent works, especially how they earn their commission, this should start to become apparent. Their fees are paid by the seller, so naturally this is who their loyalty is with. They must provide the best service that they can for the seller and that means achieve the highest price possible, which is usually the opposite of what an investor wants.
In comparison, a sourcing agent usually gets their fee from the investor, so again, naturally their loyalty is with them and so it’s in their best interest to negotiate the best deal that they can for their client; which usually means a lower purchase price; and overall potentially providing a much better investment return.
If you’re an aspiring property sourcer or an investor looking for your next investment opportunity, get in touch.