Let me tell you about a message I received recently from a friend who was knee-deep in a property purchase gone awry. They were under the impression that there was a power generator in the apartment building they were buying into, only to find out later that it wasn’t the case. Some money had already changed hands, and they were left wondering how to back out of the sale. This situation was another reminder about the importance of having a buyer’s agent, especially for expats navigating the real estate scene here in Cuenca.
We’ve been providing this service for several years now, mainly via client referrals, but we’re only now openly promoting the service as we feel the need for it continues to grow.
“But Jason, the realtor, told me several times there was a power generator in the apartment building. I’ve already paid the deposit. Now what can I do to get out of the sale?”
Potential issues with Dual Agents
Let’s talk about dual agents. In Ecuador, they’re not spies or undercover operatives (though it can sometimes feel like they are). Instead, they’re real estate agents who represent both the seller and the buyer during a transaction. Now, you might think, “Isn’t that a conflict of interest?” Well, yes and no. It can be tricky for dual agents to juggle their responsibilities to both parties, often leading to complications, especially when it comes to prioritizing one side over the other. If there is a loser, it is generally the buyer.
“In Ecuador, there really are only listing agents that act as dual agents. Dual agents represent both seller and the buyer during a real estate purchase transaction.”
Problems that can arise
Let’s face it: buying property can be a minefield, especially for expats who might not be familiar with the local market. One common issue is misrepresentation by agents. They might exaggerate the features of a property or conveniently overlook crucial details, like the absence of that mythical power generator my friend was promised. Then there’s the risk of overpaying. Some agents prey on expats’ lack of market knowledge, convincing them that they’re getting a steal when, in reality, they’re paying way above the market price.
Some agents will even blatantly steal from both the buyer and the seller. One trick is to sell the property at an inflated price, but convince the seller that it was sold for much less. Then, the agent pockets the difference. I’d argue this is straight-up theft. I know this scenario can sound a bit far fetched and I wish it was. Unfortunately, it does happen.
“Like my friend’s example, agents misrepresenting what the buyer would receive as part of the sale does happen all too often.”
How our Buyer’s Agency service helps
Now, onto how our buyer’s agent service can save you from real estate nightmares. Picture this: you’ve got someone in your corner, looking out for your best interests every step of the way. That’s where we come in. At YapaTree Properties, we take on the role of the buyer’s advocate, ensuring that you have a smooth, fair, and transparent transaction. From negotiation to closing, we’ve got your back, making sure there are no surprises lurking in the fine print.
“At YapaTree Properties, I routinely take on this role as the buyer’s agent or buyer’s advocate, but we also have other team members that help out with this too.”
Cons of our service?
You might be wondering, “What’s the catch?” Well, I’d love for you to challenge me on this, but I just can’t find one. Using our buyer’s agent service won’t cost you a dime. The seller pays the commission, so you get all the benefits without any of the financial burden. The only reason you might hesitate to use our service is if you trust the dual agent more than us. And hey, if you’ve got a lifelong friendship with them and they’ve consistently delivered top-notch service, then by all means, stick with them. But for everyone else, we’re here to make your real estate journey as smooth as possible.
“But for the vast majority of expats, it’s hard to find other scenarios where this makes sense.”
FAQs
Here are some common queries about our buyer’s agent service.
What properties do we have access to?
Well, thanks to our extensive network of local agents, we’ve got our finger on the pulse of the Cuenca real estate market. Whether it’s listed on our website or not, chances are, we can get you in the door.
Do we also operate as dual agents?
Yes, we do. That is how the vast majority of the Cuenca real estate agents work. Our buyer’s agent service is a new offering in the market.
Is the service always free?
For the majority of our buyers, it is 100% free. The only exception is if you are asking us to find something very specific that takes us a lot of manual effort to track down for you. In this circumstance, we may request you to pay a retainer which is refunded should you purchase through our service.
I’m not sure I’m ready to buy, should I still use this service?
If you’re still in the decision-making phase, I suggest checking out our real estate trips. This will give you the education on the neighborhoods and market prices to make an informed decision on whether you want to buy in Cuenca.
Once you’ve decided buying in Cuenca is right for you, then I suggest providing your buying preferences here.
“If you’re using our buyer’s agent service, you’ll have a representative that is exclusively looking after your interest as a buyer.”
Contact Jason
Ready to talk? Shoot me an email at [email protected] or fill out our online form to get the ball rolling. Whether you’re a seasoned pro or a first-time buyer, we’re here to help you find your ideal home in Cuenca & surrounds.
Further reading:
View full video transcript
Cuenca Buyer’s Agent: Why you need it (Transcript)
00:00 Intro
“But Jason, the realtor, told me several times there was a power generator in the apartment building. I’ve already paid the deposit. Now what can I do to get out of the sale?”
Man, this is the message that I received over the weekend from a friend who was trying to purchase an apartment through another agent. We’ve now stepped in and are trying to renegotiate with the seller and it’s a very tricky situation. But this misrepresentation issue is just one of the many common traps that expats can easily find themselves facing when buying property in Cuenca. I’m making this video now because this friend didn’t even realize that we provided a buyer’s agent service. If he did, he certainly would have used us to help with this apartment purchase. So this video is going to cover what our buyer’s agent service is, why we do it, and how it fits into our other real estate services.
00:57 Potential issues with Dual Agents
In Ecuador, there really are only listing agents that act as dual agents. No, not the double agents, but dual agents. Dual agents represent both the seller and the buyer during a real estate purchase transaction. This can be hard because they need to balance their responsibilities to both the selling and buying parties, and often this is where the problem lies. Let’s dig into a scenario I see a lot. An expat from the US wants to buy a property and move to Cuenca.
They find what looks to be a suitable property online for let’s say two hundred thousand dollars and they start the negotiation process with the dual agent. In theory, this agent should be looking after the interests of the buyer, but do they? And why would they? Real estate in Cuenca is all about local connections. I cannot stress that enough. These connections are vital for getting listings for sale and rent, and often the agent has the listing because they are a friend or family member of the owner.
This relationship likely matters to them as they don’t want to lose face if they provide a poor result for the seller or the landlord. But what is their incentive to do a good job for the expat buyer they barely know? They certainly don’t have the same social pressures. I’d argue the best incentive for doing a good job is growing their business via referrals from happy customers and avoiding negative reviews, which could harm their reputation. But this is Ecuador, where legal threats of defamation are very real, and businesses do choose to hide behind these laws instead of actually improving their service.
So the threat of negative reviews doesn’t have the same punch as it would in the US or elsewhere. Their only incentive is to grow a long-term real estate business via referrals from happy customers. But I’d argue that very few agents here have this type of long-term thinking. They generally prefer to maximize income from one sale than maximize lifetime income from the client. And I’d also argue that many agents here don’t have the luxury of thinking long-term. Selling real estate is a very difficult way to generate reliable income and most are just earning enough to keep their heads above water. That is the reality of being an agent here and it is my learning from being in the market for over three years now.
So on the one hand, we have the agent’s responsibilities to the seller. The agent has clear social and financial incentives to keep the seller happy. But when it comes to the buyer, the incentives are often not as clear and this can often lead to treating the seller better than the buyer.
03:51 Problems that can arise
Now what are some of the outcomes that this imbalance can cause? I’m glad you asked because this is really why we started our buyers agency service. I was seeing a lot of expats disappointed with the experience of their real estate agent.
Like my friend’s example, agents misrepresenting what the buyer would receive as part of the sale does happen all too often. Maybe the agent hasn’t read the deed properly, if at all, to understand exactly what is included in the sale and what is not. Overpaying is a big one too. In its simplest form, the agent will only be targeting expats who don’t have any real market knowledge and convince them that it is a great deal, all the while knowing it’s significantly above the market price. Their commission is linked to the sale price, so a higher sales price also equals a higher commission.
The more malicious scenario is where an agent will actually play both the seller and the buyer. For example, let’s assume the agent knows the true market price of a property is a hundred thousand dollars. Maybe they squeeze the seller a little bit just to get a listing price of 90K, but they’ll actually sell the property at an inflated price of 200,000 thousand. Then they managed to convince the new owner to agree to setting the lower price of ninety thousand dollars on the title deed so they could pay less in council taxes.
Throw in the language barrier and you have a scenario where the agent then managed to walk away with the entire hundred and ten thousand dollar difference. Both the seller and buyer have been taken advantage of, and it’s only if they happen to meet again to discuss the purchase the truth starts to emerge. This can take years if it ever happens at all. If this sounds like something from out of the Wild West, it is. Buying real estate in Cuenca is still the Wild West. Buyer beware reigns supreme. There are a lot of other negative outcomes that this incentive imbalance can lead to.
I am going to be creating an entire video on what sort of issues to look out for, so if this is of interest, please subscribe so you get notified when it’s released.
06:11 How our Buyer’s Agency service helps
Protecting ex-pats from the more predatory agents is a key outcome of our buyer’s agent servers. But how do we do this? If you’re coming from the US, or to a lesser extent Canada, Australia, or a host of other countries that use both a listing agent and a buyer’s agent, then you most likely already have a good idea.
A buyer’s agent looks after the interests of the buyer. At YapaTree Properties, I routinely take on this role as the buyer’s agent or buyer’s advocate, but we also have other team members that help out with this too. To me, the core outcome is that my buyers have a safe, fair, and transparent transaction. This is particularly true during the negotiation and closing processes for our buyer’s agent clients. We handle the negotiation and overview the closing process so there are no surprises. Some of these surprises are only realized when you go to sell the property at a later date.
One key advantage of using this service as a buyer is there is zero cost to you. Much like in the US, the seller pays a commission to the agents, which is the same regardless of whether you use a buyer’s agent or not. As a buyer’s agent, we share the commission with the listing agent. The start of the process is for you to provide your buying preferences to me via our website here. This can include links to any property you like or dislike on our website, or any other website for that matter. Even if we don’t have the property listed on our site, we most likely have access to it. If we don’t have access, then we can always approach that other agent on your behalf.
07:53 Video call
The next step is to arrange a time for a video call so we can get to know each other a little bit better and dig into what you’re looking for more. This is also the time to define our commitment to each other. Ideally, you commit to using me or my team as your buyer’s agent and we happily and completely commit to you. But if you are on the fence about making a commitment to us, then this is perhaps not the right service for you. I simply cannot ask my team to work for free. You’re very much still welcome to inquire about any of our current listings and will help you buy, but you won’t necessarily have someone exclusively looking after your interest as a buyer.
08:33 Cons of our service?
Given you won’t pay anything for using this service, the question then becomes, why wouldn’t you use this service? I’m obviously biased, but I think the service is very attractive for new buyers, especially for expats who are new to the area and the market. The pros are pretty compelling. There is no cost to you. There is no additional cost to the seller, which means that there is no impact on the sale price. We negotiate the selling price and the other key items and we overview the closing process even if you have your own attorney. So feel free to challenge me on this, but the only real reason I see why you wouldn’t use our buyer’s agent service is because you don’t trust it or me.
No, that’s not quite right let me rephrase. I think it’s more accurate to say that you trust the dual agent more than you trust our buyer’s agent service. Perhaps you are lifelong friends with the dual agent and you’ve seen them do quality work day in, and day out, and you barely know me. That’s completely valid and under that scenario, I would expect you to use the dual agent.
But for the vast majority of expats, it’s hard to find other scenarios where this makes sense. But that’s just me. Please do what is right for you, but just promise me that if something does feel off about the transaction, pause and trust your gut.
Then come see me. You won’t get an “I told you so”, but you will get someone that will listen to your concerns and act in your best interest. Of course, I’d much rather you see me before you run into any trouble, as prevention is always better than cure.
10:19 FAQs
I’m going to finish off with some facts. Firstly, does YapaTree Properties also act as a dual agent? Yes, we do. That is how the market here operates. What we’re doing with our buyer’s agent service is bringing something new to the market.
If you’re using our buyer’s agent service, you’ll have a representative who is exclusively looking after your interest as a buyer. The listing or the seller’s agent will be a different person looking after the seller’s interests. So what properties do we have access to? A core part of our success today, has been the local agents that we work with. They are very well connected to the local market, which also means that we have access to many properties. This matters a lot, especially in the Wild West where there is no functioning MLS or similar aggregator of property listings. The end result is that it’s very rare that we don’t have access to any particular property currently on the market.
Is the service always free? For the vast majority of clients, yes, it is. The seller pays the commission which we share with the listing or seller’s agent. Only in rare circumstances do we charge the buyer a sort of retainer before we start working together. This is really when you’re asking for something that is going to be very difficult to find. Maybe you want to find specific land outside of Cuenca, and if I or the team need to spend a lot of time and effort just to find some suitable properties, then we may charge you a retainer upfront which is refundable should you purchase through our service.
11:55 Contact Jason
If you’ve got any other questions, do feel free to email me at [email protected]. Or to start the conversation on having us represent you as your buyer’s agent, provide your preferences here and I’ll be in touch. I hope you got value from this video. Thanks for watching until the end. We do have a bunch of other Cuenca real estate videos if that’s what you’re after.
I’ll catch you in one of those. Chao chao.
