Property Buying - Cost of Inactivity
Updated: Jul 21
When it comes to engaging the services of a buyer's agent, many would look at the fees, question why they should engage a property buying service when they can do it themselves for free, and walk away. Many compare the cost to the seemingly 'zero' costs if they were to buy the property on their own.
Is this a smart move?
Let's look at the basics. What are the costs of a typical property purchase? Many would quickly and correctly mention stamp duties, conveyancing, due diligence costs. However, not many buyers would factor in these intangible costs:
cost of inaction
cost of delays
cost of stress
cost of anxiety
cost of frustration at trying to contact the sales agent
cost of frustration at missing out on a seemingly good price for a property
cost of taking time off work to make the calls to the real estate agents
cost of wasted weekends
cost of missing out on growth, for every month they spend searching for the property
How do you put a number to these costs?
Cost of delays in buying a house
This is the easy one to put a value to. The cost of delays. The cost of not doing anything. Every week that you fail to buy the house, is costing you money. Here's why.
A research conducted by UBank shows that it can take a person in Victoria between 7-12 months to buy a property on their own. That is up to 12 months of lost rentals or, if you are renting, additional rental payments. And, given that property prices grow 6.8% annually [Corelogic] on average, you would have missed that 6.8% capital growth in a year, AND, (since I can take you up to 1 year to buy your property on your own), you would have to pay 6.8% more for a similar property when you find one. WOW!
Now let’s put the sums together. As at 2021, considering the median Melbourne house price of $1,000,000, and a median rental of $440 per week. That’s $22,880 in missed rentals, $68,000 in missed capital growth, and, remember, you’ll be paying $68,000 more for the property after a year of searching.
That’s a total of $158,880 (or more)! Or about 16% of the median house price.
It cost you $13,240 for every month of delay!
And that does not take into account the hours and months spent researching, and searching, doing property inspections, the angst, the anxiety, the disappointment, blah blah blah...
What can a buyer agent save?
How can you reduce this? Engaging a Buyer's Agent is one option. The buyer's agents at Concierge Buyers Advocates have been helping property buyers buy their properties in under 3 months. That is a average savings of 9 months. Yes, you buy your properties up to 9 months faster with our service. Now, remember, it cost your $13,000 for every months delay, a buyer agent service can help you save over $119,000!
Considering that a typical buyer's agency fee of 2-3% of the property cost, you will only pay $20,000 to get a savings of $119,000! Question to you:
Will you invest 2% to get a ROI of 16%?
Does that now make engaging a professional Buyer’s Agent, a cost effective, and smarter idea in your property search journey? Does using a buyer agent save you money?
As Buyer's Agents, we've utilise our network and smart property research tools and listings to get access to properties from a variety of sources, including off-market properties, new and upcoming listings, and properties which aren't even on the open market yet. At Concierge Buyer's Advocates, we invest hundreds of thousands in property research data, smart tools with artificial intelligence, combine them with industry insider news, with insider knowledge and we run our own analytics to determine where the market cycle is and which areas are anticipated to grow. Data never lie. Combining data and our insights into the property market gives us the unique ability to forecast growth with confidence.
Our buyer's advocacy service is NOT for everyone. We keep it exclusive, so that we can service our clients better. But if you are interested in saving over $119,000 in your home purchase, or interested in realising the benefits of your investment property sooner, have a no obligations chat with us. Let's discuss if our service is right for you. Mention this blog and we’re pleased to offer a special deal just for you.