8 Vendor Advocacy Traps Property Sellers Should Know

Choosing a vendor advocate can provide property sellers with independent advice and support throughout the selling process. But, as with any professional service, it is important to understand exactly what you are engaging, how the advocate is paid and whether any commercial relationships could influence the advice you receive.

Not all vendor advocacy services operate in the same way.

Some advocates charge the seller a transparent professional fee, while others may receive remuneration from a selling agent or operate under different commercial arrangements.

This doesn’t automatically make one model right or wrong. What matters is that you understand the arrangement before you sign.

Here are 8 vendor advocacy traps property sellers should consider when choosing a vendor advocate.

1. Assuming “Free” Vendor Advocacy Is Actually Free

One of the most common things sellers should investigate is the offer of free vendor advocacy.

A vendor advocacy service may be described as “free” because the seller does not pay a separate professional fee.

However, the absence of a direct fee does not necessarily mean the advocate is not being remunerated.

The important question is:

Who pays the vendor advocate?

If an advocate receives payment from a selling agent, agency group or another party, you should understand the arrangement and how the payment is calculated.

Ask:

• Who pays the advocate?
• How much are they paid?
• Is the payment a fixed amount or percentage?
• Is the payment linked to the selling agent’s commission?
• Does the advocate receive different remuneration depending on which agent is appointed?

Understanding the remuneration model allows you to assess the service on an informed basis.

2. Vendor Advocate Commission Sharing

Vendor advocate commission sharing is another issue sellers should understand.

In some arrangements, a vendor advocate may receive a payment connected with the selling agent’s commission.

Consumer Affairs Victoria states that where a real estate agent shares commission with someone outside their own agency, the agent must advise the seller in writing and provide a list of the people who will share the commission before the sales authority is signed.

This makes it important to ask whether any commission-sharing arrangement exists between the selling agent and your vendor advocate.

You should also ask whether the advocate receives any other referral payment, introduction fee or financial benefit connected with recommending an agent.

The objective is not to assume that commission sharing is necessarily inappropriate. It is to ensure that the arrangement is transparent.

3. Undisclosed Conflicts of Interest

A vendor advocate conflict of interest can arise when the advocate has a financial or commercial relationship with a party they are recommending to you.

For example, if an advocate recommends a particular selling agent, you should be able to understand whether the advocate has any financial relationship with that agency or receives remuneration if that agent is appointed.

A conflict does not necessarily mean that the recommendation is unsuitable. However, it is something the seller should know about when assessing the advice.

Ask directly:

“Do you have any financial, ownership, referral or commission relationship with the selling agents you recommend?”

A straightforward answer should be part of the conversation before you appoint the advocate.

4. Focusing on the Fee Rather Than the Service

Another potential vendor advocacy trap is comparing advocates solely on price.

A lower fee does not necessarily mean a lower-quality service, just as a higher fee does not automatically mean a better service.

Instead, compare what you actually receive.

For example:

• Does the advocate personally assess the selling agents?
• Do they negotiate commission and fees?
• Do they review the marketing strategy?
• Do they remain involved after the agent is appointed?
• Will they attend meetings?
• Will they challenge recommendations?
• How accessible are they during the campaign?
• Who will actually be handling your property?

The real comparison is between fee, service, experience, independence and level of involvement.

5. An Advocate Who Disappears After Appointing the Agent

A seller may assume that engaging a vendor advocate means having an experienced professional involved throughout the sale.

However, the level of involvement can vary significantly between providers.

Some services may focus primarily on helping the seller select a real estate agent. Others provide ongoing campaign management and advice.

Before signing a vendor advocacy agreement, ask:

“What happens after the selling agent is appointed?”

Find out whether your advocate will:

• Monitor the campaign
• Review buyer feedback
• Discuss pricing strategy
• Attend meetings
• Challenge recommendations
• Assist with negotiations
• Remain available until settlement

If ongoing support is important to you, make sure it is clearly included in the agreement.

6. Not Understanding the Vendor Advocacy Agreement

A vendor advocacy agreement is an important document, so don’t simply sign it because the advocate’s service sounds appealing.

Read the agreement carefully and understand:

• The services being provided
• The fee payable
• How and when the fee is payable
• The term of the agreement
• How the agreement can be terminated
• Any additional charges
• Any commission or referral arrangements
• Any ongoing obligations after the property is sold

Consumer Affairs Victoria recommends that sellers obtain and understand written terms when engaging professionals and, in relation to selling agents, notes that a sales authority is a legally binding contract.

The same principle is sensible when assessing any vendor advocacy agreement: know what you are signing before you sign it.

7. Limited Choice of Selling Agents

A vendor advocate’s role may include helping you select a selling agent.

But sellers should understand how that selection is made.

Ask whether the advocate:

• Has access to multiple agencies
• Can recommend agents outside a particular network
• Independently assesses the agents
• Conducts a competitive selection or tender process
• Has any commercial relationship with the agents being considered

A vendor advocate should be able to explain why a particular agent is being recommended and how that recommendation was reached.

The important issue is not simply the number of agents presented to you. It is whether the selection process is genuinely appropriate for your property.

8. Assuming a Vendor Advocate Guarantees a Better Sale Price

Perhaps the most important trap is expecting a vendor advocate to guarantee a particular sale price or outcome.

A vendor advocate can provide experience, advice, negotiation and representation, but no advocate can guarantee the price a property will achieve.

The final result depends on many factors, including:

• The property itself
• Market conditions
• Buyer demand
• Competition between buyers
• Pricing strategy
• Marketing
• Presentation
• The selling agent
• Timing
• Negotiation

Be cautious of any service that presents its involvement as a guarantee of a particular sale price.

A credible vendor advocate should explain what they can control, what they can influence and what remains outside their control.

How to Avoid Vendor Advocacy Traps

The easiest way to avoid potential problems is to ask questions before engaging an advocate.

Ask How They Are Paid

Find out whether the advocate charges you directly or receives remuneration from another party.

Ask About Commission Sharing

If any part of the advocate’s remuneration is connected with the selling agent’s commission, ask for the arrangement to be explained clearly.

Ask About Conflicts of Interest

Find out whether the advocate has any financial, ownership, referral or commercial relationship with the agencies they recommend.

Ask What Is Included

Don’t assume that ongoing campaign management is included simply because the service is described as vendor advocacy.

Ask Who Will Personally Handle Your Sale

Find out whether you will deal directly with the principal or an allocated consultant.

Read the Agreement

Make sure the fee, services, obligations, termination provisions and remuneration arrangements are clearly documented.

Compare More Than the Fee

Consider experience, independence, service level, accessibility and the advocate’s actual involvement.

What Does an Independent Vendor Advocate Look Like?

Independence is particularly important when the advocate is helping you select the real estate agent who will ultimately sell your property.

An independent advocate should be able to explain:

• How they are remunerated
• Whether they receive payments from selling agents
• Whether they have agency affiliations
• How agents are selected
• How recommendations are made
• What services they provide
• What happens after the agent is appointed

Transparency allows you to understand the relationship before making your decision.

Vendor Marketing: Independent Vendor Advocacy

Vendor Marketing provides independent vendor advocacy in Melbourne, representing property sellers throughout the selling process.

The service is structured around a fixed fee-for-service model, with the professional fee agreed with the seller upfront.

Vendor Marketing does not receive a percentage of the selling agent’s commission for recommending an agent.

The service can include:

• Selecting and assessing selling agents
• Conducting a real estate agent tender process
• Negotiating agent fees and commission
• Reviewing marketing strategies
• Managing the selling agent
• Challenging recommendations
• Providing ongoing advice throughout the campaign

Led by Principal Advisor Craig Knudsen, Vendor Marketing specialises in property marketing and real estate agent selection.

Unlike a real estate agent, a vendor advocate does not sell your property. The role is to represent the seller and provide independent advice throughout the selling process.

Choosing a Vendor Advocate

Choosing a vendor advocate is ultimately about understanding who is representing you, how they are paid and what they will actually do for you.

Don’t be distracted by the headline fee or the promise of a “free” service.

Instead, ask the important questions:

Who pays the advocate?

Are there any commission-sharing or referral arrangements?

Are there any conflicts of interest?

What exactly is included in the service?

Who will personally represent me?

Will the advocate remain involved throughout the campaign?

What does the vendor advocacy agreement require me to pay or do?

The answers will help you compare different vendor advocacy services and determine which arrangement best suits your circumstances.

The best protection for a property seller is transparency: know who represents you, understand how they are paid and know exactly what service you are receiving.