Buyer's advocate - Opinions

[7smurfs]

I am currently looking at breaking into the property investment market with my first property, however being relatively young (23) with my hard worked savings at stake (~$125,000), I have had issues selecting and taking the plunge on an apartment within my price range.

In light of my situation, I have setup an appointment with Infolio to hopefully remove the emotion attached to looking at a purchase however am also quite skeptical of the results/value a buyers advocate provides over what I've done thus far - simply spending every Saturday going out there into the inner city and looking at physical properties/apartments myself, liasing with real estate agents.

What are people's experiences and opinions on using buyer's advocates and what of their value?

 

[tobe]

I have worked with in the past, and have used to purchase 2 properties, frank valentic, advantagepropertyconsulting.com.au

I found it worthwhile, and saved me a lot of money. It also cost a lot of money.

Im a bit worried about 'simply spending every Saturday going out there into the inner city and looking at physical properties/apartments myself, liasing with real estate agents.'

I would suggest getting some actual sold data, onthehouse.com.au or rpdata etc, and honing in on a particular suburb, or apartment type. Simply spending your saturdays at open for inspections is only going to tell you how much vendors are asking. Your only looking at the bit estate agents want you to see, 'the front end'. Do a bit more research first, at the very least you will have a better understanding of what a buyers agents work involves and appreciate it more, rather than just grumble about the fee.

 

[7smurfs]

Thanks tobe, I will use my time more effectively with research than spending my whole day out there.

Will keep everyone updated on my status with Infolio!

Regarding cost of a buyers advocate - I have seen figures between 5-10k on average! It really does cost a lot !!

 

[Propertunity]

OK - I'm biased as I am a BA.

On low value purchase like the one you are considering - around $125K, the cost of using a BA who may charge, say $10K, is a significant % - i.e. 8% of the purchase price.

On a purchase price of $800K this same fee only represents 1.25% of the purchase price.

You might have to either understand that $10K will save you from making a $100K mistake OR you say it is too much and learn all you can, and do it yourself.

 

[7smurfs]

OK - I'm biased as I am a BA.

On low value purchase like the one you are considering - around $125K, the cost of using a BA who may charge, say $10K, is a significant % - i.e. 8% of the purchase price.

On a purchase price of $800K this same fee only represents 1.25% of the purchase price.

You might have to either understand that $10K will save you from making a $100K mistake OR you say it is too much and learn all you can, and do it yourself.

Apologies, to clarify myself i meant that I've saved up $125K to use as an offset on the purchase on my investment.
The actual purchase price of the apartment/property will be between $400-500K.

In regards to using a BA, I think it may be best to get me started. Will just need to consider the fees as you described.

 

[Jamie M]

Without knowing your particular circumstances, and as a general comment, I'd be hesitant to drop that entire $125k into an IP. Particularly if you ever think you'll purchase a PPOR down the track.

Cheers

Jamie

 

[Propertunity]

The actual purchase price of the apartment/property will be between $400-500K.

I think if you are going to invest up to $0.5M, most of it borrowed, I'd have no hesitation in recommedning you spend 2% on a good BA. He/she could probably save you more than that anyway. Happy hunting!

 

[younguns]

Hi 7smurfs. We used a BA to help purchase our PPOR last year. My husband works away and with two small children I needed someone to take the reins. It was a very positive experience and took the stress out of the process and I could sleep well at night knowing someone who does this day-in-day-out was looking after us.

Because I was wanting to learn along the way and because it was our PPOR, the BA and I agreed I would do allot of the research on area, type of property etc. She then came with me to inspect the properties, provide advice on pricing, help negotiate and ultimately seal the deal. Because she wasn't spending time compiling a shortlist for me, we paid a reduced fee.

We had purchased 3 IPs prior to this on our own, with varying results. I think if you don't have the time to educate yourself and properly research your chosen areas, a BA will save you lots of time and money. Especially if you get it wrong! Just my two cents worth anyway Good luck!

 

[buster]

Smurf your right you have to get of your **** and look in the area you are interested in, it isnt that hard. If you dont want to do it then invest in something else unless you have money to burn. You have to compare apples with apples, to do that it is better to eyeball. You will get more usefull information from talking to agents and checking out the neighborhood, put in low ball offers the response will give you more idea of what price maybe accepted, than the prices some agents decided to submit to RP data to show positive data. You may be surprized at what price is accepted, compared to what RP data indicate. Things such as which sewage line a house is on could cause a discrapancy in prices on houses side by side if one is on a line with collapased pipes and blocking drains. You dont get local onfo like that from RP data. I suppose their are good BAs but using those is like russian roulette. I was bidding on a house, had the auctioneer slowed down to accept 1k bids and was 2k from my limit when a previous mentioned BA strutted around like a peacock in a flash suit and esculated the bidding with a 10k bid, even tho I didnt want the property at that price, he was so cocky I thought this guy is willing to go higher so I breifly flicked the index finger out that was construed by the auctioneer as a 1k bid the BA put in another 10k. I was just stunned this guy paid 20k more than he needed .

 

[Rolf Latham]

I suppose their are good BAs but using those is like russian roulette.

Actually no................

This is only true of you are silly enough to not do much homewwork.

Not all BAs are worth the money, for sure, like all things in life, but by taking on a recommendation from someone (from more than on service user especially) that has good results, you have eliminated "chance" pretty much altogether.

I have seen some "interesting " BA stuff too, but we can choose to be careful with generalisations and assumptions in life.

ta
rolf

 

[devank]

BA strutted around like a peacock in a flash suit and esculated the bidding with a 10k bid,

You never know... that might be an auction technique to scare others off.

I think, BA's are useful when you buy interstate. I might also use a BA if I'm buying my PPOR to have an expert on my side and also remove the emotion. However, I may do it myself if I'm buying an IP within my state.