Investing in property is a big decision that can keep even the most seasoned property investor awake at night. How do you know if you’ve got your investment strategy right? How can you make sure you’re choosing the right property? Where can you find the time to do the necessary research? What is the right price to pay?
A good buyer’s agent is the property investor’s secret weapon. They provide professional guidance on every aspect of your property investment journey, with the objective of saving you time, money and many sleepless nights. A buyer’s agent can help you take a more professional, balanced approach to your property investment activities, removing the emotional aspects of the process and saving you from the natural human tendency to make unwise, impulsive decision under pressure.
Before getting a buyer’s agent involved, speak to us first, so we can get your finances sorted and a preapproval in place for you.
What does a buyer’s agent do?
Buyer’s agents specialise in representing a buyer’s interests during a property purchase. Whilst they are most commonly used by property investors, buyer’s agents are also frequently used by families searching for exactly the right home, and people moving interstate or overseas, making the process much easier by doing all the leg-work and narrowing down the options.
Buyer’s agents usually offer differing levels of service, depending on your requirements. The full service covers every aspect of the property investment journey including:
- Formulating an investment strategy that maximises your funds
- Searching for suitable properties to fit your buying strategy
- Researching every aspect of a property to ensure profitability
- Arranging inspections with vendors and real estate agents
- Negotiating a price and terms of sale
- Bidding at auctions on your behalf
- Co-ordinating your professional team – solicitors, finance brokers etc.
- Ongoing service to help you establish a complete portfolio.
Getting the property research and selection process right is arguably the most important part of your property investment journey. It certainly takes the most amount of time and getting the right information requires a certain amount of know-how too. A professional buyer’s agent knows which questions to ask and where to look for the answers. They can often access information from developers, councils and other relevant bodies that is not readily available to the ordinary consumer.
However, you don’t necessarily need to engage the full services of a buyer’s agent. You can also engage a buyer’s agent just to do research for you, to negotiate a price for you, or to bid for you at an auction if you would rather not do it yourself. This can be a good idea if you are nervous, inexperienced, you can’t attend the action yourself, or you feel you may get carried away by the auction process and pay too much.
Benefits of using a buyer’s agent
- To research rezoning or any potential infrastructure in the area that can affect values
- To help negotiate a better deal
- To provide a different perspective and real estate expertise
- To do the legwork for you
- To source properties within your budget
- To help with auction tactics
- Provide access to off-market properties
- Knowledge of the purchasing process
- If you are interstate or overseas, a buyer’s agent is your eyes and ears on the ground
How much does a buyer’s agent cost?
There are many buyer’s agents and the cost will vary according to the agent you choose, your location and your requirements. Qualified, professional buyer’s agents generally charge between 1.5 – 3% + GST of the purchase price of the property for their full services, however, this can often be negotiated in favour of a flat fee and savings may be obtained if you are planning on purchasing multiple properties.
When providing a research service only, a negotiating service only, or a bidding service only, your buyer’s agent will usually charge a fee for their time. Again, this will vary according to the agent, the location and your requirements. You can generally expect these services to cost around $1,000 + GST depending on how much of their time you require.
If you are purchasing a property for investment purposes, the cost of a buyer’s agent is generally tax deductible as are most of the professional services you will require as part of the process.
How do you find a good buyer’s agent?
A good way to locate a great buyer’s agent is by asking us or generally by word of mouth – there’s nothing like a recommendation from a friend, colleague or trusted business advisor (like us) to make you feel confident about someone’s credentials. However, you can also find some reputable buyer’s agents through the Real Estate Buyers Agents Association of Australia (REBAA) website.
Choosing a buyer’s agent:
- Do not make the decision on fees alone
- A good buyer’s agent will challenge their client, not always agree with them, so look for someone with authority
- Interview a number of buyer’s agents, understand their property background and seek references
- Ask to speak to past clients
What to look for when assessing a property
- Bones of the property
- Signs of major structural damage
- Damp odours
- Significant cracking
- Ongoing maintenance (state of hot water systems, fences and gutters)
- Strata levies
- Sinking fund
- Check the state of the lifts, lobbies, and any shared amenities that may require upgrading
Sometimes, outsourcing is the sensible option
Engaging a buyer’s agent can save you hours of time and loads of stress. If you’re new to property investment, then a buyer’s agent can also be invaluable in helping you to avoid costly mistakes. When you do find a property you want to buy, all the hard work in locating it can easily be lost in the final hurdle – the purchasing process. Having an expert on your side to negotiate the price you need, or to bid for you at the auction, can reduce the risks and make all the difference. Using a buyer’s agent is one case where outsourcing can take a lot of the frustration out of the process.
For more information, or to get your property investment finance in place, give us a call. We’ll be happy to help.
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