Buyer agents are not the same as real estate agents. The buyer agent is the advocate and intermediary between buyer and seller. A real estate agent’s client is the seller (or vendor) of the property. A buyer’s agent client is the purchaser and does everything they can to find the perfect property to execute your strategy. While the professional real estate agent will maximise the sale price for their client, the vendor. There are many benefits to having buyer representation in addition to selling on your own – one being that it can save you money! Investors Benefit the most from using a Buyers Agent, we will focus on Investment Buyers Agents.
The advantage of using a buyer’s agent
Using a buyers agent can save you time and money through researching the market, identifying properties best for your investment objectives and strategy. They negotiate the fairest purchase price in line with intrinsic value so as not to overcapitalize or risk sacrificing equity at the point of purchase- plus this local knowledge can’t be bought!
- Save you Time
- Existing Expert Local Knowledge
- Identify the best possible property aligned to your strategic plan and investment objectives.
- Connected to Professional Network
- Access to off market property deals
- Access to the latest property research and data
- Stop novices investors make huge investment mistakes
- Save you Money
- Negotiate the best possible purchase price aligned with intrinsic value that won’t overcapitalise or risk sacrificing equity at point of purchase.
- Expert Negotiation Skills – buyer’s agent have been schooled in negotiation and possess a high level of expertise to ensure your investment is well protected!
What does a buyers agent do?
The best buyers agents always work for a fee paid from you “the client”. That fee should always be paid by you, their client. Be cautious of buyers agents that are paid by developers – whoever is paying the bill is who the agent is working for.
Great buyers agents should take you through a process that is roughly outlined below:
- Negotiate & Secure
What to look for in a Buyers Agent?
Purchasing investment properties is completely different to buying a home. You should seek a specialist investment buyers agent. Typically they will only work with investors assisting them in identifying the right property for their investment strategy.
A buyer’s agent will invest time with you to understand your goals, objectives and limitations before they start looking at properties. This means that when a buyer’s agent presents you with potential options – it’s because they are relevant to what you’re trying to accomplish.
A buyer’s agent should have a good understanding of investment principles and the local property market they are recommending, they should offer a few. They will be up to date with what properties are selling for, how long they’re taking in the sale and any other pertinent information that can help you make an informed decision about your investment purchase.
Go with your gut – it’s important you feel confident.
What is the Process?
A buyer’s agent should take you through the following process:
Strategy Session – What are your goals and objectives? What do you want to achieve, when? How much risk can you handle? What is my investment time horizon (think time in property)? Review your net worth, balance sheet and income statement. Identify your level of experience, property knowledge and understanding.
Present Strategic Plan – buyer’s agent should present you with a strategic plan that aligns with your goals and objectives. It will include the investment strategy, buyer’s agent’s fee structure, what they do and when key milestones occur. It will identify all the activates that each party is responsible Eg: Lending, conveyancing, inspections (pest/building/strata) etc.
Research – identify and present property locations that will be suitable to execute your strategic plan. You should then approve various areas that you are interested in after completing your own due diligence research yourself.
Shortlist Evaluation – buyer’s agent should provide a detailed analysis of the shortlist of properties to ensure they are aligned with your strategic plan and investment goals. The shortlist will be identified through research, evaluation and some existing negotiation. The property report should include current market conditions on suburbs including but not limited to median growth, average rental yield, average days on the market and number of current listings. Upcoming and new projects in the
Negotiate – buyer’s agent should negotiate on your behalf to get the best-purchasing terms and possible outcome for you. This includes getting the property at a price that is below market value and having key terms in the contract advantageous to you as an investor. These terms are deposit amount, settlement period, access to the property and condition the property will be transferred in amongst other terms.
Secure – buyer’s agent should work with your team to secure the property as per the terms of the contract.
Settlement – buyer’s agent should coordinate settlement on your behalf. This involves getting buyer’s lender, buyer and seller to sign off at the nominated date/time.
Post Settlement – buyer’s agent should ensure that all stakeholders are provided with any post-settlement documents required (eg: property transfer).
Questions to ask a prospective buyers agent
- Are you a member of a professional body? Why that one?
- Do you hold a certificate of registration or how long have you been fully licensed as a buyers agent?
- How manly listings have you secured in the last 2 years?
- How long has the process has taken, from initiation to sale, for your last 5 clients? Can I speak with two?
- Do you work with both investors and owner-occupiers?
- What does financial security mean to you?
- Tell me about yourself?
I would also strongly recommend that you negotiate hard on their fees. What you are looking for is a buyers agent that is excellent at the negotiating process. The is a primary skill to negotiating a great deal on your investment purchase. They should never reduce their price. If they quickly reduce their price it’s due to them not being busy and needing the work – you don’t necessarily want a buyer agent representing you that desperately needs the work.
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