How do you find the right buyers agent?
If you're in the market looking for a property, one of the questions you would have asked yourself is: who are buyer's advocates or buyer's agents? How are they different from your usual selling agents? How do you find the right buyer's agent? Does the property buying reality TV show, House Hunters ring any bells?
When we first started out as property investors over 20 years ago, buyer's agents are rare. Very rare. And only the mega rich or professional investors can afford the services of the buyer's agents. 20 odd years later, and after traded and accumulated over $500million worth of properties, the Melbourne property market is very different. Property buying has become a complex investment vehicle, with lots of strategies, options and methodologies.
Of course, if all you are after is just a property to stay in, and if do not mind if you're wasting months and months on property inspections, not worried if you're going to pay too much for the property and buying in the wrong area, you do not necessarily need a buyer's agent service.
Who are Buyer's Advocates? or Buyer's Agents?
A buyer's advocate (commonly known as buyer's agent), as the name suggests, is someone who works for the buyers. He/she is someone who makes sure you buy the right property at the right price, and suits what you need.
How are Buyer's Advocates different from the usual Selling Agents?
Selling Agents are required by law, to look after the interests of the sellers. In layman's terms, they help to make sure they get the highest possible price for the property, and on the terms asked for, by the seller.
Unlike selling agents, Buyer's Advocates, are required by law, to work for the buyers. They have same knowledge and skillsets, but they work solely for the buyers. They help ensure that buyers are not taken for a ride by the selling agents. They ensure you are not unknowingly overpaying for the property. Of course, if you decide if the property has a special reason for paying a bit more, you will still get their support. The buyer agent will also ensure the property suits what you are looking for, and suits what you intend to use it for. In short, they are your personal property consultant.
Are all Buyer's Advocates the same?
Now that you know who are buyer's advocates, are they all the same? Short answer is NO. They are not the same. Many are selling agents masquerading as buyer's agents.
Many promise financial freedom through property investing. Which is possible, but... They would only recommend properties which they have a monetary interest in. They are in fact, paid directly or indirectly by the vendors, and marketers to sell their properties.
Some masquerade themselves as property experts, property investment consultants, claiming to have reached financial freedom nirvana, have sufficient income from their 20-property portfolio, and are now in retirement, so they have some free time to help share their knowledge. However, you have to sign up to their mentoring program, before you are eligible to access their premium, paid services to help you 'fast-track' your investment portfolio. Ask yourself... If they are out urging everyone to sign up to their mentoring program, are they really in retirement? Or are they, in fact, working? Who is really funding their so-called retirement? Who paid tens of thousands of dollars to attend their mentoring program? Why are they only recommending new properties from their 'select' team of developers?
Are they are, in fact, marketing agents, helping to sell developer stocks, getting paid commission by the developers, and at the same time, charging you a premium for these "premium", "fast-track" "mentoring" membership services? Any licenced real estate agent would know, charging the client a fee, and getting an incentives to sell, is illegal. But, how do they get away with that? Easy. Many aren't licenced at all.
How do you find the right Buyer's Advocates?
Buying a property is easily one of your biggest investment in life. Engaging an expert to help you invest these money is definitely a wise choice to ensuring you are getting a property that suits your needs. Ask yourself this: You would invest on a financial advisor to invest $100,000. Why wouldn't you engage an advisor when you invest on a $1,000,000 property?
Finding a buyer's agent is not difficult. Google it, and you'll get pages of listings and ads about buyer's advocates.
However, finding the right buyer's advocate for you can be tricky. Many wrongly believed, if the buyer advocate listing appear in the first couple of pages in Google searches, they are automatically the best. Many are not aware that advertisers can pay top dollar, for Google to display their listing on the first page of google. They paid thousands a month on search engine optimisations (SEO), so that their listings appear in the top 10. Guess where their advertising budget comes from and who funds them...
So, what about word of mouth in popular social media and forum pages? You'll be surprised that they aren't that independant anymore these days as well. Businesses can now engage services whereby people recommend their services on social media and forum pages. Again, guess where their million dollar advertising budget comes from.
Here are some pointers to help find the right Buyer's Advocates:
Let's assume they are legally registered real estate agents and fully licenced. It is a non-negotiable legal requirement.
1. They have the Necessary Experience
Isn't this obvious? The more experience the agent has in real estate, the more experience he/she will be. From experience, I find a minimum of 3 years as a buyer's agent and over 10 years of property investment experience as a guide.
2. They have a Good Honest Network
With experience, comes a good connection into good network of connections, support services and property database. This is critical if you only want a good reliable service that truely supports you. You need someone who is prepared to tell you, honestly , everything you have to know about the property.
How many times have you heard a selling agent say, "we have a good conveyancer, building and pest inspector who will give you the best service"? Really? Remember, the role of a selling agent is to help the vendor sell the property. Would they be prepared to recommend a conveyancer or building and pest inspector who will tell you EVERYTHING you have to know, even if there is a problem with the property which can eventually affect its value and potentially your decision to proceed with the purchase?
3. They have a Good Property Portfolio
You pay for their experience. Only a person with years of hands-on experience would know what to anticipate, what is likely to happen and know how to manage it.
So, have they done it themselves? I would be more prepared to trust my buyer's agent's lead if they have done it themselves.
4. They Specialise in Properties in the Area
Again, this is what I would pay for. We pay Buyer's Agents for their expertise in the area and region. They know about the region, the suburb, the good areas. We engage them for their experience and expertise in the area.
A lot of Buyers Agents I come across are willing to buy from Darwin, Cairns to Tasmania, from Sydney to Perth. We know some so-called buyer's advocates who fly from Brisbane or Sydney to Melbourne occasionally, and claimed they are area experts in Melbourne. You would have heard of the saying “When you are a Jack of all trades, you are a Master of none”. You paid for the expertise and specialised experience in your Buyers Agent, make sure you get a specialist, not a General Practitioner.
5. They are Truly Independent
They should be truly independent and not be paid by any other selling agents and developer / marketers to push their listings. They should be able to prove they are independent and open to answering any questions about the property. I would also want to ensure they are working 100% for me and they are focussed on achieving my goal.
Our clients have brought to our attention, evidence of some so-called Buyers Agents recommending properties from one of their affiliated developers, getting paid commissions and also charging you for their services. A Toyota salesperson wouldn't recommend a Honda to you, even if a Honda model suits you better, would he/she? Would you pay that sales person a service fee, for recommending one of his/her cars to you? I wouldn't.
I have also seem some Buyers Agents recommending properties and then farming it out to their database. This is not really independent. It is not working in your best interests. They probably short listed the property knowing someone else would buy, if you don't.
So, while some selling agents call themselves a Buyer’s Agent, and simply push what they have, the Real, independent Buyer's Advocates are more difficult to find.
If you are buying in an popular location, a good buyer's advocate should have the experience to better educate you and guide you in your decision-making process, to provide an honest opinion of the property and to provide alternate views, recommendations and options. You definitely want someone who has the experience and years of property investment experience to be working with you.