Technology we take for granted as making our lives easier. However, it seems the more tech-savvy we become, the more complicated we make things. In priperty, a buyer’s agent is what we overlook. How?
Take Property Transactions as an example:
There was a time when it was a just a real estate agent working to arrange a few inspections, a willing buyer would come along, and a purchase negotiated.
Now there seems to be an entourage in most agencies, including administrative and marketing staff lending and supporting the agent creating a distinct advantage during ongoing negotiations.
ARISE – THE BUYER’S AGENT
As Australia becomes more like America with regards to the business of real estate deals, the tables are starting to turn.
For many years in the US, in a property transaction, third-party representation was present for both participants to parley on their mutual behalves.
THE 1 PER CENT
On the American playing field, buyer’s agents are an accepted part of it. Since the millennium, using a buyer’s agent or advocate is becoming more prevalent by the year.
Gaining the absolute highest price a vendor can get, in-turn the commission being reciprocated to the agent for the highest possible sales price has been the agenda, supported by smart sales and marketing campaigns, it is little wonder buyers agents are becoming more popular; It’s a simple case of levelling the playing field.
Buyer’s agent’s services are attracting property investors and owner-occupiers especially around inner-city markets; this growing trend is not surprising considering how the million dollar plus price tags are in high demand in urban areas.
Today people are very unlikely over the phone or even with a physical form to put more than $20,000 into the equity markets with no professional advice from an expert.
So if you are not a savvy and experienced real estate investor why would you even consider handing over $500,000+ without proper consultation and the groundwork being done by a buyer’s agent who knows his or her marketplace inside out? The same as a good stockbroker does consider that for a moment.
CATCHING ON & CATCHING UP FAST
In the ever more dynamic Australian property sector buyer’s agents are adding an interesting twist.
It’s argued that the massive surge at the end of the century in property investment interest was the rise of the Australian buyer’s agent.
At that particular time an agent was stereotyped as someone who worked alongside the new generation of young executives appearing riding the back of the dot.com boom, executives who suddenly wanted property retirement portfolios and back then an agent was seen as somewhat of a luxury for the yuppie.
Then there were ex-pats, working extended periods abroad who were either returning from long working stints or looking to invest from overseas.
However, the landscape has changed. With a vastly diverse clientele and the world becoming a truly global marketplace, working abroad is more and more prevalent. For these type of clients, local representation is an absolute must.
It has come to the point that today the vast majority of property investors regardless of their experience in the marketplace turn to a buyer’s agent and won’t do transactions without their representation. With more first-timers looking for this kind of assistance of course.
However, here in Australia we still have a little way to go before agents are a mainstream feature of the local housing market as they are in the US.
But the trend is undoubtedly gathering pace, and awareness of how vital representation is with such an amount of money, and what benefits it reaps especially for property investors is becoming common knowledge.
THE MANY ADVANTAGES FOR INVESTORS OF USING A BUYER’S AGENT:
Enables you to save valuable time researching the market when it’s not your forte.
Identifying your investment objective and devising a strategy in line with these to look at the best property for the price.
Negotiate the price in line with current market value and making sure you don’t get into an overcapitalisation situation and risk capital at the point of purchase.
Showing you facts regarding all aspects of the deal leaving you to make an informed decision and levelling the playing field.
In a property purchase, local market knowledge is something money cannot buy.
Buyers Agents have their ear to the ground and can arrange for you to see a property before it even gets listed, less competition equals less asking price.
Peace of Mind
Ensuring you don’t make common mistakes many investors have and continue to.
WHAT IS THE COST?
The perception of how much it costs to hire a buyer’s agent is that it is expensive, this somewhat can deter people from considering it as an option.
However, consider this, a buyer’s agents fee can be fixed or a percentage of the sale, however, unlike a lawyer, their fee is payable upon a successful transaction, meaning they will look out for your interests. Commissions can range from around 2 to 2.5% of the final purchase price, or a set fee agreement can be reached. Depending on the size of the transaction and relative dealings required anywhere between $6000 and $15,000 may be charged for negotiating a sale.
For those who think this is expensive, think back to the many hours even days searching, phone calls and disappointments. Dealing with pushy agents, and turning up at auctions every weekend only to leave empty-handed and frustrated. When you put that into context that fee doesn’t seem so bad does it?
FINDING THE RIGHT AGENT
Not all buyers’ agents are the same.
So here a few qualifying tips to assess in this is the right agent to work with to assist you in your property purchase:
Level of Experience
Local market value knowledge and general experience are the two main factors. Find out if they have their own property investment portfolio.
When dealing with both sides, the winner is the agent. Ensure they are representing your best interests and importantly if you find a particular product being pushed a little too much, especially off-plan apartment buildings and offers like that, turn the other way.
Referrals from previous clients are an excellent way to gauge the qualifications and quality of what a buyer’s agent can bring to your table. You should be very wary of an agent who does not have or will not give any referrals, and if he genuinely has no clients, then find someone with experience.
When you are in the market for a property of some description and considering doing this by yourself or with your partner due to the cost involved of an agent, take time think about the bigger picture, the time saving and peace of mind it can give you during the process. In reality in today’s market you should ask yourself, ‘Can I afford NOT to?’
Jessica Wicks is an avid blogger who likes adventure holidays and food critiquing in Sydney. She likes to blog about the property market and subjects relating to it, is associated with NSW South Coast Buyers Agency who are a regulated buyer’s agent Batemans Bay