WHY INVESTORS SHOULD USE A BUYER’S AGENT
As any Binvested client would know, successful investing is about knowing your goals and situation and then devising a strategy to achieve them. When it comes down to purchasing properties that are in-line with these goals, however, many investors find themselves frozen with analysis paralysis – a condition that can prevent even the most determined investor from taking that initial plunge. For others who may have bought a couple of bad investments, the fear of making the same mistakes again is often enough to stop them from investing further. In both of these situations, hiring a good buyer’s agent can be the turning point towards success. Many people think they are saving money by buying properties themselves, but they fail to see all of the ways in which using a buyer’s agent pays. Here are five good reasons investors should use a buyer’s agent, as well as what they should look for when choosing one and what they should avoid.
THEY CAN SAVE YOU MONEY
“As a buyer’s agent, my role is a professional negotiator,” says Nathan Birch, co-founder of the Binvested group and property tycoon. “I’ve spent over a decade working to build relationships with agents and finding out the best ways to negotiate prices with them,” he says. To those who think they are saving money by not using a buyer’s agent, he says, “If some one can save you $50,000 on a property and get it below market value, and you have to pay a small fee for it, I’d rather pay someone a fee for getting a better amount.”
WHAT TO LOOK FOR
Proof of results. Sophie Sicurella, Buyers Support Administrator for Property Investment Agents (PIA), says a good buyer’s agent should have a good sized handful of testimonials and case studies they can show to prove their clients’ success. At PIA, the best case studies are those of Nathan Birch and Daniel Young, the company’s co-founders, who have amassed more than 250 properties between them. Every day they share their expertise and strategic genius with PIA clients by sourcing the right kinds of properties for their portfolios at a competitive price, below market value.
Fakers. Steer clear of people who claim to be buyer’s agents but have little or no experience. Nathan says, the best way to find out if a buyer’s agent is genuine is to cross-examine them like a prosecutor. If a buyer’s agent is more like a glorified salesman, it is unlikely they will get you the best price on a property – but you will still be paying for their services.
THEY SAVE YOU TIME
Every week, you devote around 40 hours of your time to doing your job and building your career. If you have children, you spend most of your remaining time looking after them. If you’re lucky, you might be able to find a few hours here and there that you can devote to your own interests – making time the most sought after commodity in the average Australian’s life. As an investor, you have a choice: do you sacrifice the little free time you have to research the property market, or do you use a buyer’s agent – someone who spends their working week researching the market for you? Sicurella says, “Our clients have a job, a career that they are good at and do everyday.” At PIA, she says, “We are good at researching the market and knowing where the deals are – this is our job everyday.”
WHAT TO LOOK FOR
The properties they line up. Check out the types of properties they advise clients to buy, what markets they look at and comparable sales in those markets. Ask if they focus on a wide range of markets or are limited to a few and why.
Agents who only go for one type of property or market. If you want to build a portfolio, you shouldn’t limit yourself to just one market. By watching The Vault each week on the Binvested blog, it is clear to see that PIA source a wide range of properties from different markets for their clients, that are in-line with their goals. They know where the client is at, and what type of property is best for them to purchase next. If they only looked at one particular market, they would be limiting the client’s investing potential.
THEY CAN TELL YOU WHAT YOU NEED
A good buyer’s agent will use their expertise (proven by strong results), as well as their ability to build a good relationship with you, in order to assess what type of property is best for you. Some buyer’s agents focus on buying principle place of residences for their clients rather than investment properties. These agents will be given a list of what to look for and then they’ll go out and find it. This is not the type of buyer’s agent an investor should use. Sicurella says, investors need to choose buyer’s agents who can tell them what they need to buy, and not the other way around. “You go to someone for advice, and that is what you should be receiving, otherwise you will just end up getting stuck.” She says, in order to devise a plan of attack, a good buyer’s agent will take the time to have a detailed discussion with their clients around the following points:
• The type of properties they look for (with examples of growth)
• The type of strategy you are looking to use
• The type of strategies they use
• What you and they think is the best way forward for you.
WHAT TO LOOK FOR
Expertise in helping investors. You will get more out of using a buyer’s agent who can demonstrate consistent success in helping investors build property portfolios. Ask about the type of clients they deal with and their investment strategies and see if they line up with your own goals and strategies.
Agents who don’t invest in the things they tell you to invest in. If a buyer’s agent isn’t willing to put their own money into the investments they are suggesting, you should steer well clear of them.
THEY CAN BE YOUR MIDDLE MAN
Sicurella says, when it comes to making a purchase, a good buyer’s agent can act as the middle man between the selling agent, the solicitor, your mortgage broker and yourself. They can coordinate the purchase process for you and deal with the tactics that selling agents often use to get a higher price and secure the sale. She gives an example of a PIA client who, after finding out through the Pest and Building Report that the property she was purchasing had extensive water damage, contacted the selling agent directly. “We wanted to negotiate a price reduction,” says Sicurella, “but because the client had contacted the selling agent without us knowing, the agent got her contact number.” When PIA submitted a request to extend the cooling off period so that they could negotiate a cheaper price, the selling agent called the client directly and was “not being very friendly.” Sicurella says, the agent was trying to find out why they wanted to extend the cooling off period, which put the client in a rather awkward position. “We deal with agents and the tactics that they use to get a higher price,” says Sicurella, “that’s something that we don’t want our clients to have to deal with.”
WHAT TO LOOK FOR
A good relationship. It is important to choose a buyer’s agent who can build good rapport and will give you the time of day to support you at every step of the purchasing journey.
Seminar spruikers. Be wary of so-called buyer’s agents who run seminars where participants get so swept away by the atmosphere they sign up to buy investments on the spot, without doing their own research first. They are really just salesmen who will not be there to support you throughout your investing journey.
THEY CAN STREAMLINE THE PURCHASING PROCESS
Sicurella says, there are a lot of important things that need to be arranged during the purchase of an investment property, such as setting up landlord’s insurance and arranging property management before settlement. She says, the PIA team “Pre-empt” all of the important things an investor should do while waiting for settlement and “send it to them before they even think about it.” They can help you to arrange a Pest and Building report and discuss the results with you. If they think a lot of repair work needs to be done, they can (in some circumstances) negotiate a price reduction. Without a buyer’s agent on your side, you would have to sign the contract of sale and fly blindly through the purchase process. A buyer’s agent can help streamline the process and control the situation in order to avoid or reduce any complications.
WHAT TO LOOK FOR
A buyer’s agent who will partner with you to help you build success. Sicurella says, at PIA, “It’s a very long-term relationship with us, whereas a lot of buyer’s agents just sort of love you and leave you.” Nathan says, PIA exists to help investors build successful portfolios, “We do this because we want to do it, not because we have to do it.”
Agencies that don’t accommodate their clients. If you are going to pay someone to find investments for you that could make or break your portfolio, it is important to find someone who will provide excellent customer service. PIA has a lot of overseas and interstate investors, says Sicurella, who can’t always be there in person to finalise deals. She says, PIA are very accommodating to the needs of their clients and they do as much via email or phone as they can to make the purchasing process as convenient as possible.
To find out how PIA can be the turning point in your success story, contact the Binvested team on 1300 367 925 or email them at firstname.lastname@example.org