My friend is looking for an inner city property in Melbourne and has engaged a BA to find them one because they live overseas. Their budget is $3-3.2m and it will be an IP until they return to live there in about 2 years with a young family. They've been quoted $30k which I think is an insane amount. I think this BA is taking them for a ride because of their budget and a $1m property shouldn't require more work to find than a $3m property? Can anyone recommend a reasonably priced BA for an inner east Melbourne property?
Is $30k too much for a buyer's agent fee?
- Thread starter dex
- Start date
The property is inner eastern Melbourne
They are using this BA. Has anyone dealt with them before and are they worth $30k?
http://qura.com.au/
But do you think it's good value for a $3m property?
It seems like they charge 1% of the property value.
Hi
I notice a lot of people think that 1% of the value of the property is not good value.
I think the value should be determined by the person employing the services of a buyer's agent. For example if the buyer is a knowledgeable investor with the know how and nous to buy properties in the $3million price range well spending $30,000 on a buyer's agent would be plain silly.
But if the buyer has money and is simply a wood duck well then a buyer's agent could be very good value at only 1% of the property value.
Regards,
alicudi
I notice a lot of people think that 1% of the value of the property is not good value.
I think the value should be determined by the person employing the services of a buyer's agent. For example if the buyer is a knowledgeable investor with the know how and nous to buy properties in the $3million price range well spending $30,000 on a buyer's agent would be plain silly.
But if the buyer has money and is simply a wood duck well then a buyer's agent could be very good value at only 1% of the property value.
Regards,
alicudi
What if the buyers were experienced investors but they live in NYC so they can't pop out to inspect Melbourne properties on the weekend? Their budget is $3m so is charging a percentage a fair way to price their service? I wonder if this BA would charge $2,000 to find a $200k property.
Hi
I think this type of service could still take advantage of a BA but without opting for the full service that a BA could provide if required.
In other words the experienced investor would in fact spend the time searching for the properties online and through contacts but simply send the BA to inspect the property which I am thinking will be a lot less than $30,000 even on a $3million property, but who knows maybe I'm wrong?
Regards,
alicudi
1% on the first million.
Half of one per cent on the second million.
one Quarter of one percent on third million.
Therefore circa $17500 on a 3 million property.
Or another way of doing it - lets say $10,000 up front and then let the buyers agent have some skin in the game by getting 3 different valuers value the property and taking an average. For every one thousand dollars the buyers agent paid above the value they get docked $100 but for every one thousand dollars below the average they earn an extra $100.
Half of one per cent on the second million.
one Quarter of one percent on third million.
Therefore circa $17500 on a 3 million property.
Or another way of doing it - lets say $10,000 up front and then let the buyers agent have some skin in the game by getting 3 different valuers value the property and taking an average. For every one thousand dollars the buyers agent paid above the value they get docked $100 but for every one thousand dollars below the average they earn an extra $100.
For me it depends on what service they are providing and how competent they are. In that price range it's not about getting a cheap deal but getting the exact property I want.
For that sort of money I would expect more than just assessing what's on the market and picking the best of the bunch.
I'd want my BA to be well connected. I'd want them to know about properties that are not on the market, but for sale at the right price. eg - Mrs Jones passed in her house at auction last year at $2.5m and was expecting $3.0m - it ticks all the boxes and my BA could successfully approach Mrs J to sell at $3.0m.
'Evening all,
It's been quite awhile since I last posted here. I still check in daily though (it's a long-standing addiction now) and just wanted to make sure that the correct facts were being discussed on this one, if I may.
D.T is correct in that I am not involved in the accounting firm anymore. The how/why of that is another story but in the meantime I've been helping my wife (Lil_Skater here) with Qura and using my property experience and networks in helping a small number of clients recently with their own purchases and strategies.
We are currently helping only two clients with making a purchase. I personally never take on more than two at once to ensure that I am not stretched too thinly. They also must have substantially different targets to ensure that they are not competing with each other and I don't have to "choose" who is presented with each property!
So, one of those clients is a "standard" investment purchase by a local investor with a much lower budget than Dex's friend. That deal is currently on hold until after Christmas.
The other is based overseas, but I want to stress that they are not looking in the $3m - $3.2m budget and nor were they quoted the fee mentioned in this thread.
However even with that said;
In general terms a PPOR purchase, and particularly as the budget increases, does have an added "degree of difficulty" compared to an objective investment purchase and so yes, the fee can be a little higher. We always quote a fixed amount to ensure that everyone is happy before we even start - and do not operate on a percentage at all.
For whatever it might be worth, after the first week or two of the search most of the homes that I have been inspecting have been "off market". Not many new listings become publicly available at their price range in the lead-up to Christmas.
I am not comfortable sharing much more than the above on this case - particularly if you actually know the client in question, Dex. All the same, I do hope that my comments have helped to clarify some aspects of this thread a little.
It's been quite awhile since I last posted here. I still check in daily though (it's a long-standing addiction now) and just wanted to make sure that the correct facts were being discussed on this one, if I may.
D.T is correct in that I am not involved in the accounting firm anymore. The how/why of that is another story but in the meantime I've been helping my wife (Lil_Skater here) with Qura and using my property experience and networks in helping a small number of clients recently with their own purchases and strategies.
We are currently helping only two clients with making a purchase. I personally never take on more than two at once to ensure that I am not stretched too thinly. They also must have substantially different targets to ensure that they are not competing with each other and I don't have to "choose" who is presented with each property!
So, one of those clients is a "standard" investment purchase by a local investor with a much lower budget than Dex's friend. That deal is currently on hold until after Christmas.
The other is based overseas, but I want to stress that they are not looking in the $3m - $3.2m budget and nor were they quoted the fee mentioned in this thread.
However even with that said;
In general terms a PPOR purchase, and particularly as the budget increases, does have an added "degree of difficulty" compared to an objective investment purchase and so yes, the fee can be a little higher. We always quote a fixed amount to ensure that everyone is happy before we even start - and do not operate on a percentage at all.
For whatever it might be worth, after the first week or two of the search most of the homes that I have been inspecting have been "off market". Not many new listings become publicly available at their price range in the lead-up to Christmas.
I am not comfortable sharing much more than the above on this case - particularly if you actually know the client in question, Dex. All the same, I do hope that my comments have helped to clarify some aspects of this thread a little.
Most BAs I know charge approximately $10k in flat fees to source, negotiate and settle a property. To be fair however, they're mostly dealing with properties under $1M in value.
The $3M market is probably going to be more specialized, especially in Melbourne. Whilst many of these properties still get listed in the paper, a lot don't. They tend to change hands more discretely. This is the market where insider connections and relationships do become more valuable.
I agree that $30k is probably too much and I don't like BAs charging a percentage fee in general. I do think that if this BA can deliver, then their service is probably worth more than the standard $10k in this instance however.
At the other end of the market there's a very well known company (individual) that charges about $10k to source property and they tend to operate in the low end positive cash flow markets. Given that they're essentially using a search engine with very basic parameters and almost no due diligence, I think they're charging way too much for what they're actually providing.
The $3M market is probably going to be more specialized, especially in Melbourne. Whilst many of these properties still get listed in the paper, a lot don't. They tend to change hands more discretely. This is the market where insider connections and relationships do become more valuable.
I agree that $30k is probably too much and I don't like BAs charging a percentage fee in general. I do think that if this BA can deliver, then their service is probably worth more than the standard $10k in this instance however.
At the other end of the market there's a very well known company (individual) that charges about $10k to source property and they tend to operate in the low end positive cash flow markets. Given that they're essentially using a search engine with very basic parameters and almost no due diligence, I think they're charging way too much for what they're actually providing.
I'd just like to add if James Buyer Advocates, Morell & Koren, or infolio were handling a $3+ mil property the price would be somewhere around 1.5%.
I've heard In New York advocates can get 3%-6% ...not sure if it's right but maybe I'm in the wrong country?
I've heard In New York advocates can get 3%-6% ...not sure if it's right but maybe I'm in the wrong country?
Value vs cost
Some ba services aren't worth 100 dollars, indeed some are worth - 50 000 or more.....
Some are worth many more time than the investment in the Ba fee
It is the users position to discern which is which, and then choose and move
Ta
Rolf
Some ba services aren't worth 100 dollars, indeed some are worth - 50 000 or more.....
Some are worth many more time than the investment in the Ba fee
It is the users position to discern which is which, and then choose and move
Ta
Rolf
