News & Media

Source: The Property Tribune

By: Lloyd Edge

 

• A buyer’s agent combines industry expertise, a sharp eye, and removes the tedium of house hunting.
• Opportunities such as off-market properties are more likely to crop up through a buyer’s agent, compared to searching for the ideal property on the open market.
• An experienced buyer’s agent can educate you on the current market conditions and provide you with reliable comparable sales in the relevant markets.

The main role of a buyer’s agent is to represent and protect the buyer’s interests when purchasing a property. Buyer’s agents are professionals who specialise in searching for, scoping out, researching, performing due diligence, and evaluating properties, as well as negotiating to purchase properties or bidding at auction on your behalf.

Whether you are looking to purchase your first home, upgrade/down-size, or buy an investment property, everyone can benefit from using a buyer’s agent to purchase their next property.

What to expect when using a buyer’s agent?

A buyer’s agent will always want to understand what your individual goals are, alongside your budget and requirements. This will set your “buying strategy” whether it is a home or an investment property you are after.

Because they understand the market, buyer’s agents can help you to set realistic expectations for your circumstances so that you don’t fall into the trap of disappointment when you continually miss out at auctions or have offers rejected, which wastes a lot of time and leaves you feeling deflated.

They also understand the market intimately so can prevent you from falling for real estate sales tactics which lead you to pay too much for a property.

What can a buyer’s agent do for you?

• Set a strategy,
• Perform all the research,
• Provide expert knowledge,
• Be free of distractions,
• Bid at an auction,
• Negotiate,
• Be by your side, and
• Take advantage of the market.

Buyer’s agents can help you set a strategy

A buyer’s agent should always discuss with you what you are trying to achieve and set a purchase strategy to help you get there.

A buyer’s agent will be able to help you set realistic expectations when it comes to buying a home or advise you on your next investment purchase that will start your portfolio or complement your existing property portfolio.

The process of setting a strategy will recognise the type of property to be purchased to best suit your needs and for investors, this will determine whether you will be searching for a cash flow positive property, a high growth property, etc.

Do the research for you

A buyer’s agent will perform the tedious location research, saving you time, and assist you to narrow down your key criteria. Because a buyer’s agent knows what you are looking for, they can focus on searching only for properties that match your specific criteria and won’t be distracted to start looking at other properties that arise during the search process – which often leads to a lot of time wasted on looking at properties that aren’t suitable for you!

A buyer’s agent will shortlist only the properties that best match your criteria.

Buyer’s agents also have access to many tools that are used by professionals or require expensive subscriptions to access all the right data on a location or a property’s background. This knowledge can truly be valuable and assist you to avoid buying the wrong property.

A buyer’s agent will also attend property inspections, so you don’t need to rearrange your weekend around open homes. This is also very convenient because you might be looking to buy interstate and often investment properties are purchased in locations not close to where you live, so a buyer’s agent will be able to guide you on the best locations to achieve your strategy due to their vast knowledge of the markets because they are working in the markets every day.

Your buyer’s agent will be able to explain all the requirements for an “investment grade property” and assist you in understanding yields, returns, capital growth, equity, and cash flow.

Provide expert knowledge

A buyer’s agent is an expert in the field, and they have a wealth of knowledge on how to untap the full potential of a property.

They will also be familiar with all the common mistakes made in purchasing property and help you to avoid them.

They will also have developed relationships with industry contacts such as Mortgage Brokers, Financial Advisers, Property Managers, Accountants, that they trust and will be able to provide you sound advice.

Not be distracted

It is easy to get caught up in the emotion of buying a property when it is your hard-earned cash that you are spending.

A buyer’s agent will search for a property without any emotional attachment and only decide based on hard facts and research.

Buyer’s agents will often get access to properties before they hit the market or are even advertised so you will gain a competitive advantage in the market above other buyers.

A buyer’s agent has the experience to know what to look for in a property, as well as the right questions to ask to avoid you purchasing a lemon, they will attend property inspections and have their eyes out for anything that may be hidden.

Bid at an auction

The auction experience can be very overwhelming as well as costly if you are inexperienced.

You need to fully understand the process of the auction as well as how to bid at auction.

Employing a buyer’s agent to bid on your behalf may save you from getting caught up in the emotion and paying too much. 

Buyer’s agents will be strict about keeping to your budget and understand your maximum price, so you don’t over-capitalise on your investment. 

If you get caught up in the hype of the auction, you may end up paying too much for a property which could put your investment strategy in jeopardy.

Negotiate for you

A buyer’s agent is a professional negotiator and won’t be fooled by real estate sales tactics.

A buyer’s agent is also prepared to walk away from a deal if you cannot secure it for the price, you want or what the property is worth.

This will also save you a lot of stress as your buyer’s agent will take all the calls from real estate agents.

Be by your side

Your buyer’s agent will be by your side through the whole process which is truly invaluable.

They will be able to keep you on track and be able to answer all your questions about acquiring your new property.

After you’ve exchanged contracts, they will also be by your side until settlement ensuring that the process can run as smoothly as possible until you get your hands on those keys.

Take advantage of the market

A buyer’s agent understands the current market conditions and understands when there is an urgency to buy property due to lack of supply, or whether you should slow down the pace of your offers to make the seller ‘sweat under the collar’.

An experienced buyer’s agent can educate you on the current market conditions and provide you with reliable comparable sales in the relevant markets so that you are able to determine the right price for a property this is how they can help to prevent you from overpaying for a property.

Real estate agents prefer to deal with buyer’s agents

One of the biggest advantages of using a buyer’s agent is that you become an industry insider because real estate agents prefer to deal with buyer’s agents.

Did you know that one in five properties sold in Australia is sold off-market? This means that most people don’t even get a chance to see these properties before they are snapped up.

If you keep wondering why you are missing out on properties or if there just seems to be nothing suitable for you on the market, this is likely because real estate agents prefer to deal with buyer’s agents who get “first dibs” on new properties.

It might seem counterintuitive because a real estate agent Is trying to get the highest price possible and a buyer’s agent is trying to get the best deal possible, but actually, it is beneficial for a real estate selling agent to work with a buyer’s agent.

Why do real estate agents prefer to deal with buyer’s agents?

Buyer’s agents build their careers around the professional relationships they build in the industry which allows them to gain access to off-market, pre-market, and exclusive access to new projects before the general public.

This means they have the chance to complete all their due diligence and checks in order to snap up the property really quickly before the regular buyer has a chance.

These relationships are built on trust, and real estate agents know who they want to deal with to save them time and to ensure the transaction will run smoothly for their clients.

For the buyer and the seller, it can be a “win-win” situation,  but unfortunately, the losers in this scenario are the average buyers looking to find a property that is listed on the open market, because a lot of properties won’t make it there.

When it comes to real estate, it’s “who you know” that makes all the difference.

Don’t forget that real estate agents get paid on commission when they sell a property so they certainly do not want to waste their time with a regular buyer who might be unsure what they want or aren’t ready to buy.

That’s where a buyer’s agent becomes a key contact for real estate agents- to be able to tap into a source of serious buyers and the sale can be done quickly.

A buyer’s agent is familiar with the process; they will complete their due diligence from the get-go, organise building and pest inspections, and they will only put an offer on the property if they are prepared to buy the property. 

They will hold the hand of their client, help them through the process, and ensure the deal is secured.

Having qualified clients ready to purchase means that a buyer’s agent will be more efficient in completing a deal than a regular buyer.

This means their clients are ready to buy the property if their offer is accepted because they have their finances in place with pre-approvals ready to go.

When a buyer’s agent places an offer on a property for a client, they have already made a short list of properties and have decided this property is the right type and has the right characteristics they are looking for. This is another reason why real estate agents prefer to deal with buyer’s agents.

It is especially beneficial for selling agents to build their relationships with buyer’s agents because they understand the importance of referrals in the property industry.

Buyer’s agents will buy property on behalf of their clients, but they do not sell properties.

Real estate agents understand that often when someone is buying a property, they might likely need help selling their property or they will have a property to sell in the future. Developing a strong professional relationship means that the buyer’s agent is likely to recommend their services to clients who want to sell a property.

Why would a seller go off market?

This could be due to several reasons, but it is because the seller wants to keep their privacy.

Sometimes this is due to a divorce situation, an elderly person being moved into a nursing home, and they don’t want the stress of a listed property, the seller might not want nosey neighbours/family/friends to know they are selling, or they just prefer to keep their situation private.

How much does a buyer’s agent cost? And is it worth it?

Due to most real estate agents preferring to deal with buyer’s agents this alone proves that a buyer’s agent is really worth their weight in gold.

A buyer’s agent isn’t just about negotiating and buying a property, they will conduct extensive due diligence and market research on the property, which will save you a lot of time. As well as they know what to ask and what to look for in a property, including any red flags!

A buyer’s agent will also not fall for real estate sales tactics as they have seen every trick in the book. A selling agent will not try these tactics on a buyer’s agent because they want to build a long-standing relationship so they can offer them more properties over time.

A selling agent will also be more transparent and honest with a buyer’s agent to build this relationship and so offer special deals and new properties to buyer’s agents to secure a quick deal.

A buyer’s agent will also know how to negotiate with each of their selling agents as they would have dealt with them over a long period. They begin to understand what they are willing to negotiate on and their negotiation tactics which is likely to secure a better deal for the buyer.