Choosing the right buyer’s agency
Australians have a unique love affair with property and this is reflected by the trillions of dollars invested in real estate in this country.
Money in property far outweighs that in shares, cash or any other asset class.
The problem is that, just like anything popular enough to attract a lot of investment, there are plenty of opportunists and dodgy operators wanting to get themselves a slice of the pie.
Buyer’s agents are beneficial for property investors serious about building a smart portfolio, as long as you choose the right one.
But self-anointed ‘experts’ and property ‘gurus’ tend to start popping up wherever there has been growth in a property market, claiming they can get you great purchase value and big rental returns.
So how do you choose a buyer’s agent that will give you value for money and a service that gets you to where you need to be?
Why engage a buyer’s agent?
Many people engage a buyer’s agent when shopping for investment properties and there are a number of things they can do to help:
- Buyer’s agents know and are known to many real estate agents if they have been in the game for any amount of time. They know which agents are likely to strike the best deals with minimum fuss and game playing.
- They often have access to off market properties, where vendors’ agents give them an early heads up ahead of listing a property.
- Buyer’s agents can not only find you one property, but can look for multiple pieces of a portfolio puzzle, with assets in different price ranges and geographical areas that will complement each other.
- They are great at filtering the many listed properties out there and doing the research for you, before presenting you with only the most suitable properties for your situation.
- They may also bid on your behalf at auction, taking emotion out of the process, sticking to your budget and employing the bidding tricks of the trade to increase your likelihood of success.
- A buyer’s agent’s services are also not expensive in the scheme of things and, for investors, those costs are tax deductible.
Get in touch with your own goals
First, set your goals. Once you know what you want, be it one or 101 properties, it makes it easier to find a buyer’s agent that matches your needs.
And just like goals, it won’t hurt to come up with your own strategy too, or at least storyboard it.
For example, you may want to purchase a house and subdivide for two rental income streams, and then offset that speculative buy with a more conservative investment.
Tell the buyer’s agent this and they can understand where your head is at and help you get to where you want to be.
What does a good buyer’s agent look like?
A good buyer’s agent should be able to extensively research an area, plus the properties within it.
They should be able to carry out inspections for you, give you all the feedback you need and then negotiate a deal on your behalf.
They should have a track record of good results for clients over a number of years and during up and down markets.
These results should be across a range of property types also.
Be wary if a buyer’s agent only negotiates new off the plan properties for clients, as there’s a good chance they may be taking commission from a developer.
They should be able to refer you to providers of the other services you may need, such as finance, accountancy, legal advice and so on.
Finally, they should be able to teach you a thing or two.
Rather than just buying a property on your behalf, a good agent will be prepared to coach or mentor you, engage with you on the reasons that certain decisions do and don’t make sense. So you are not just getting a service, but an ongoing educational partnership.
What about the price?
Australian Consumer Law stipulates that buyer’s agents must provide you with a single price for their services. Some agents charge a fixed fee and others base their charges on a commission model.
By all means shop around on price, but your main focus should be on the service.
If you choose a buyer’s agent based purely on price, you will end up getting what you paid for, which could be way more costly in the long run.
We go in to choosing the right buyer’s agency for you in much more detail in our next monthly webinar!