Experiences with a Buyers Agent

[lostis]

Hi Guys,

Looking at the current situation in the low end of the market, it is getting harder and harder to find decent properties, let alone bargins.

We are now seeing a sellers market in the bottom end and anything that is advertised is snapped up immediately, I've tried calling REA and Emailing them to express my interest but my requests seem to go on deaf ears.

Due to this I am highly considering organising a Buyer's Agent.

Would it be feasible to get one at this point in time with properties getting snapped up so quickly? I'm sure they will greatly assist me in finding a decent property and the negotiations but are the costs of this going to outweigh the service is, seeing as people are putting through ridiculous offers?

Also, what are people's experiences with Buyer's Agents, both good and bad.

 

[Propertunity]

We are now seeing a sellers market in the bottom end and anything that is advertised is snapped up immediately, I've tried calling REA and Emailing them to express my interest but my requests seem to go on deaf ears.

Yep, even in quiet times REAs are not good with e-mail at all. It has to be the mobile phone....and in these times it is the quick or the dead - don't expect ANY service or followup

Due to this I am highly considering organising a Buyer's Agent.

Yep, you a couple of others We are fielding calls everyday from FHBs with the same problems.

Would it be feasible to get one at this point in time with properties getting snapped up so quickly?

Why? do you want to wait until the real panic buying sets in in May & June?

I'm sure they will greatly assist me in finding a decent property and the negotiations

Yep, that's what they are good at. They are in the marketplace every day. They also have access to off-market or silent lisings. We had an REA call us this mornig with exactly that - so it will be sold and the first the general public will know about it is when the sold signs goes up.

but are the costs of this going to outweigh the service is,

If the costs outweighed the benefits - how long do you think BAs would stay in business?

seeing as people are putting through ridiculous offers?

A BAs fees represent an investment. They can often save their clients many times* their fees through their knowledge of the local property market and Their negotiating abilities. (*Please note that at various stages of the property market and more specifically during periods of a “seller’s” market, that this is not always possible. However, you will still benefit from all the other skills they bring to the transaction).

Also, what are people's experiences with Buyer's Agents, both good and bad.

I use one when buying interstate but I'm kinda sold on the concept.

 

[Propertunity]

Also in the interests of a balanced argument, there is an older thread that discusses this exact issue:
http://www.somersoft.com/forums/showthread.php?t=45935

 

[lostis]

Why? do you want to wait until the real panic buying sets in in May & June?

I was actually thinking about waiting past the FHOG date where there wouldn't be such a rush to purchase, and even possibly a drop in First Home Purchases if the amount was reduced or the campaign ended.

If the costs outweighed the benefits - how long do you think BAs would stay in business?

I am more looking to how much the costs will outweigh the benefits at this current point in time.

A BAs fees represent an investment. They can often save their clients many times* their fees through their knowledge of the local property market and Their negotiating abilities. (*Please note that at various stages of the property market and more specifically during periods of a “seller’s” market, that this is not always possible. However, you will still benefit from all the other skills they bring to the transaction).

Its the "Please note" part that has kind of got me hesitant, i don't doubt the extensive knowledge i can gain from Buyer's agents or the advantages they produce in the right market, but in this current environment how financially beneficial can they be?

Also in the interests of a balanced argument, there is an older thread that discusses this exact issue:
http://www.somersoft.com/forums/showthread.php?t=45935

I appreciate your opinions Propertunity and thanks for the thread, brought up some other advantages for having a BA.

 

[csc]

i cant understand this reasoning to be honest....id much prefer to make my own offers rather than have some unknown trying to stitch up a deal for me...

anything that isnt an exclusive agency that i have purchased before i simply do a rate search or check data for owners details and approach them myself........thereby cutting out the vultures of society ie: agents...its worked several times before.

i dont know why more people dont put the effort in to be honest cause that days end the buyer (you or i) are paying that comission really that they often get for no real effort.

buyers agent and r/e agents unnecessary money grabbers if you ask me.

more of a challenge to deal personally..

others may disagree i guess.

 

[Propertunity]

I was actually thinking about waiting past the FHOG date where there wouldn't be such a rush to purchase, and even possibly a drop in First Home Purchases if the amount was reduced or the campaign ended.

At least you have a strategy. I don't know how to call the removal or extension of the FHOG past June 30. It really is line ball atm. If they remove it post June 30 there is every chance the market will halt again or go backwards. If they extend it - well it has already produced price rises in the lower quartile. It is like trying to call the last RBA decision.

Its the "Please note" part that has kind of got me hesitant, i don't doubt the extensive knowledge i can gain from Buyer's agents or the advantages they produce in the right market, but in this current environment how financially beneficial can they be?

Financially beneficial - these are some of the possibilities:
1. Finding you an off-market deal where you don't have to bid the price up to be the 'winner'
2. Better negotiators than you perhaps?
3. Un-emotional and less prone to offer more to get the place you have fallen in love with
4. Experienced enough to see a property is not worth wasting a Pest & Building report on - saves a few $550's each time perhaps
5. Finding you a distressed sale where the vendors are willing to sell below market

However, all of that has to be tempered with your budget price range, which in the past you said was "low to mid 200K". Is that still where you are at?

 

[exsyd]

I've had both 'good' and 'ordinary' experiences with the same buyer's agent. We pretty much had to use one since we were buying from overseas, and I felt what we really got out of it was someone to make all the phone calls and deal with the agents, sort out problems, etc. on our behalf. Not knocking this - it was very, very helpful.

As far as getting a good price goes, I would say that was only secondary, and we did not get particuarly good deals in my opinion. Not saying that we could have done better, but I thought we got 'fair value' given the market rather than 'amazing value' given the market. One house we couldn't get enough finance for eventually sold for 10% less than the buyer's agent had advised us was fair value (which was again 5% less than the sellers originally wanted), although this was several months and at least one change of agents down the track. Possibly the market really had fallen that much in the meantime, but I'm still glad we didn't buy it. However, the BA knew how to deal with agents, how to present an offer, etc., and I think got much better co-operation than we would have gotten on our own. It was good to have someone objective and experienced 'on your side', so to speak. So my opinion: mixed, depending on your level of experience. I also prefer to source my own properties, but might do it again for the negotiation process.

 

[lostis]

At least you have a strategy. I don't know how to call the removal or extension of the FHOG past June 30. It really is line ball atm. If they remove it post June 30 there is every chance the market will halt again or go backwards. If they extend it - well it has already produced price rises in the lower quartile. It is like trying to call the last RBA decision.

Financially beneficial - these are some of the possibilities:
1. Finding you an off-market deal where you don't have to bid the price up to be the 'winner'
2. Better negotiators than you perhaps?
3. Un-emotional and less prone to offer more to get the place you have fallen in love with
4. Experienced enough to see a property is not worth wasting a Pest & Building report on - saves a few $550's each time perhaps
5. Finding you a distressed sale where the vendors are willing to sell below market

However, all of that has to be tempered with your budget price range, which in the past you said was "low to mid 200K". Is that still where you are at?

Yes unfortunately its a toss of the coin at the moment as to what is going to happen with this FHOG

Yes I am still at this range, just like every other Tom Dick and Harry in the market.

 

[buzzlightyear]

I've had both 'good' and 'ordinary' experiences with the same buyer's agent......

Exsyd, did you learn anything from the BA's in terms of negotiation, dealing with agents that you could the same or adopt their approach next time for yourself?

 

[exsyd]

buzzlightyear, a bit, but not a huge amount - bearing in mind I didn't see any of this in action, only reports over the phone and email. I learned small things such as they believed in always stating exactly how long your offer was valid (say, 24 hours) and under what conditions you were making it (subject to finance, etc.) but I expect these are things experienced buyers would probably know already, and techniques might change with the market.

I had done extensive amounts of research on the specific areas I was buying in, so I think I knew those areas of the market at least as well as they did - I didn't have access to the 'professional' databases, but I did purchase lists of property sales figures, etc. as well as studying sale/asking prices as they came over the net for at least a year beforehand.

I was going to add that I don't see negotiation as one of my strengths, and I tend to get emotionally attached to properties, so in that way the buyer's agent did pay for himself in the sense that in total I paid about as much as I was satisfied-if-not-necessarily-delighted with, and I saw it as getting the additional services - negotiation, communication, persistence, objective assessment - thrown in, more or less. I'm 50/50 on using one again - it would depend on how confident I felt, I suppose.

 

[lostis]

buzzlightyear, a bit, but not a huge amount - bearing in mind I didn't see any of this in action, only reports over the phone and email. I learned small things such as they believed in always stating exactly how long your offer was valid (say, 24 hours) and under what conditions you were making it (subject to finance, etc.) but I expect these are things experienced buyers would probably know already, and techniques might change with the market.

Exsyd, What expectations did you have in terms of learning the process and techniques and such? and what advise do you have for someone looking at getting one? Anything which I should avoid or be ready for?

 

[Nathan]

Market is going crazy at present, and from my relationships with agents i am seeing this is getting worse...

all listings are selling with 0 effort on REA bahalf..

i know of many agents relisting old listings at higher prices which they couldnt sell and they are now selling first day on the market for full prices...

i guess its a matter of keeping up the relationships with the agents to get the bargains as they arise...

 

[exsyd]

Exsyd, What expectations did you have in terms of learning the process and techniques and such? and what advise do you have for someone looking at getting one? Anything which I should avoid or be ready for?

I wouldn't say I had any expectations as such - I was overseas and wanted someone on the ground in Australia to act on my behalf, and that was the main thing I really had to have. It was also nice that they knew exactly how the process worked from beginning to end, so you could ask questions along the way if you weren't sure about something. I'm guessing one advantage they might also have is that they already have relationships with agents, which the average person does not have, and can't be 'replicated' without a lot of time and effort, but I imagine they can't have relationships with everyone. Agents probably take them more seriously, though.

What I did beforehand was to call a few people, establish costs, and also see whether I, personally, felt I had a rapport with them. I must say that all of the agents I tried were very very good with returning calls and so on, which I think is a must. Some of them were higher pressure than others, which I didn't like. I wanted to know their background, how much experience they had in the areas I was looking at, how many people would be involved, how many jobs they had on at the moment. In the end it came down to personality and cost. I'm not necessarily sure it would be worth it if you were able to handle the process in person, knew exactly what you wanted, and how much you were prepared to pay.

 

[stumunro]

on a forum full of savvy investors i'm not sure many people here can't already stand up on their own two feet and purchase.

In a world full of unsavvy people with lives away from investing, BA's are more then worth it (bias opinion of course)

being more specific to your questions... in todays market is a BA worth it?

I think alot can be said for being able to see selling agents all day in the flesh and doing deals in person.

 

[Xenia]

We own a buyers agency. Typical clients are professional investors who focus their efforts in their profession and just want to buy good quality real estate without the effort of sourcing and analysing. Some are interstate.

Some of these people are buying their 9th or 10th property and have immense wealth.

Some people value time more than money so they use services to save them time. This is by far a strengh not a weakness and this mindset is a contributer to their wealth.

 

[Xenia]

I think alot can be said for being able to see selling agents all day in the flesh and doing deals in person.

True! However whether it is fair or unfair selling agents will typically ring people who they have a relationship with first. That's why developers with a proven record for buying properties get all the deals off market. Buyer's agents also get a call if they have a relationship with selling agents so they have access to off market properties for clients.

People also sell through buyers agents to save a selling agent commission. Buyers agents therefore have access to non-public properties and these are all the fantastic value-add ones!

The last 2 subdividable properties we purchased, one for a client, and one for our own portfolio, were fantastic deals that we secured before being made public.

 

[sash]

No shortage of bargains.....as for agents....they don't change...they get cocky in times like now and treat you like a king when sales are slow.

Personally, I don't buy the areas which are hot at the moment...rather I buy the areas that will be hot in the future....so bargains are always there.

Nathan, I see you have been fairly active....I am presuming that you are still concentrating on Mt Druitt??

Market is going crazy at present, and from my relationships with agents i am seeing this is getting worse...

all listings are selling with 0 effort on REA bahalf..

i know of many agents relisting old listings at higher prices which they couldnt sell and they are now selling first day on the market for full prices...

i guess its a matter of keeping up the relationships with the agents to get the bargains as they arise...

 

[Sheryn]

Worth getting up early to read this little gem

People also sell through buyers agents to save a selling agent commission. Buyers agents therefore have access to non-public properties and these are all the fantastic value-add ones!

I didn't know that I could sell a property through a buyer's agent and save the REA commission, what a great idea!

Beats trying to market and sell own property.


Regards
Sheryn

 

[Propertunity]

I didn't know that I could sell a property through a buyer's agent and save the REA commission, what a great idea!

Sheryn this can & does work but bear in mind this only will work if the BA has a buyer for your specific type of property. The BA normally would not be "marketing" your property.

 

[evand]

Its not exactly rocket surgery. Just get out there and compete on price, put in offers, hustle. If you cant find a good deal in this low end market, i doubt a BA could.

I think you're taking the easy way out and just want someone to do the 'grunt work' for you.

As Xenia says, BA's have their role, but it sounds like you think its just too hard. How hard are you really trying?