Metropole Property Strategists

[Peter_Tersteeg]

I don't understand why buyer agents commissions are based on the purchase price ie. 2.5% of purchase price.

That's the same commission structure sales agents use. It's used to provide an incentive for them to sell as high as they can. The higher the price, the higher the commission.

I don't think this structure is suited for buyer agents.

Andrew

I can't recall the last time I met a BA charging a percentage of the purchase price. It was once common practice, but I can assure you that's no longer the case.

Most buyers agents charge about $8k - $11k for the full service. Most will also have a fee structure for limited services.

 

[superAndrew]

I can't recall the last time I met a BA charging a percentage of the purchase price. It was once common practice, but I can assure you that's no longer the case.

Most buyers agents charge about $8k - $11k for the full service. Most will also have a fee structure for limited services.

The "Real Estate Buyers Agents Association of Australia" should probably update their buyer agent fees page.

http://rebaa.com.au/buyers-agent-fees/

I know that a fixed fee structure is also used but it is based on the price range. Else it wouldn't be fair to charge $10k for a $300k property and a $2m property.

But I guess everyone can just set their own fee structure.

Andrew

 

[Greg Reid]

MMM,
Thanks for the update. It highlights one of the misconceptions about investing in an asset class, whether it be residential property or anything else. It is not the asset itself that is the critical component, it is the finance aspect that needs to be right for you and your goals.

There are many BA's and property investor companies out there who can sell property, whether their sales pitch is for new and OTP properties (it won't cost you anything) to established properties (only those that are on the market at the time) which you pay a fee for, but most do not take into account how you can then build your portfolio. As many of these posts have said, ultimately they are sales people wanting to sell and move on to the next sale.

As you have discovered, if you buy a property which then does not leave you any room get to the next stage when you want to, you may need to sit for some years. It could be the price was higher than was optimal for your circumstances so used all of your available cash/equity, it may have been too low a rent yield so servicing became an issue to be able to borrow again or a combination of the two. Get the finance strategy right first, then look to see what properties meet your criteria on price, capital growth and rent yield.

Manufactured growth may be a possibility but again you need to have the finance in place to do it and then buy the right property that can benefit from such a strategy.
Good luck with it.

 

[MTR]

I can't recall the last time I met a BA charging a percentage of the purchase price. It was once common practice, but I can assure you that's no longer the case.

Most buyers agents charge about $8k - $11k for the full service. Most will also have a fee structure for limited services.

Herron Todd charges %, one of the big one.
Momentum in Perth I think also charge %

They are out there

 

[HD_ACE]

Herron Todd charges %, one of the big one.
Momentum in Perth I think also charge %

They are out there

Mw have large price brackets and charge a straight fee per bracket. You know what your paying upfront.

Cheers

 

[map]

I went to an event their Sydney bloke (George Raptis I think?) spoke at and they showed a photo of a place they'd bought in the inner west for a client recently.

I happened to have inspected it.

Richard, mind mentioning the suburb/street, what type of property and price?

Curious as I went through metropole in 2010 to buy a 2 bed apartment in marrickville.

 

[D.T.]

I don't think this structure is suited for buyer agents.

Andrew

Why, what structure do you use for your licensed buyers agency clients?

 

[vegemite]

Do Not Use Metropole as a Buyer's Agent!!! The so called Property Strategists are very convincing in terms of the investing strategy but the Buyer's Agents who goes out and seemingly finds the "right" property for you, certainly do not practice what they preach!!! Because they get commission when they buy any property for you, they just about "force" the property on you. We were shown a 2BR "dilapidated" unit in St Kilda and informed it was a great buy, off the market, for $520K. The renovation cost (which they also receive commission) was about $40-50K and their commission about $30K! So, all in all, the unit would have cost us $600K in 2013! Now bear in mind that this is just a normal unit, NOT art deco, about 60m2, no land component, ground floor, lower ceiling than normal, etc. As we were seasoned Investor, we purchased an RP Data report and it was only valued at $480K! Luckily we backed out.

We also used Metropole in Brisbane, as we were looking to purchase in Melbourne and Brisbane concurrently, which was another big mistake!

The unit they bought us were far from our key selection criteria and it comes to a point where they "force" the sale on you and because you were so eager to buy "something for fear of missing out", you will eventually submit to their coercion. The unit they bought us in Brisbane was WITHOUT AIR COND/FAN, which is supposed to be a key criteria over there and being from Melbourne, we overlooked this. They also initially told us there is good land component for the unit only to find out later that the supposedly land component is common area and does not belong to the unit!

Believe us, you are way better off working for yourself, doing your own research about which growth suburb to purchase, etc!

Hi Bearsticky

I consulted Metropole recently (a staff left and and my case was forwarded to a new Property Strategist) and was considering using them as my BA to purchase an IP in Melbourne.

Strategy-wise: The type of properties, areas and $50K renovation are very very similar to what you mentioned here.

Wasn't 100% convinced by them as it seems I am being 'funneled' to use all of their services (2.5% BA fee, mortgage broker, conveyance, accountants, renovation tradies, etc)

Was wondering if you could tell more of your experiences etc. PM me if that suits you.

I looking at a BA for Melbourne so if anyone has any recommendations please let us know. Thanks!

 

[vegemite]

Hi Bearsticky,

Since my original post I ended up going with Metropole to purchase my first IP. Primarily to ensure I moved forward in starting my portfolio. Otherwise I would suffer analysis paralysis and would most likely stall and achieve nothing other than wast time.

All in all the service was average and yes I did experience a little bullying when I hesitated on a few properties that were presented to me. I settled on a property that ended up costing me a further 40K in upgrades.

I know that I have potentially payed too much in total and will need to sit on the property for at least 10 years to break even. (I consider break even to mean if I had to sell, the captial gain minus all costs would restore my original working capital before the purchase was made.)

Another interesting thing, although I was prepared to buy anywhere in Oz depending on where the best deals would be I ended up buying in Melbourne. Might be coincidence.

Ultimately the process has taken me through the motions of finding, purchasing and renovating my first IP. Including setting up the financial structures and obtaining a LOC. If I didn't pay someone to push me through this I would not have started.

The unfortunate reality of this whole exercise is that although I have enough funds in my LOC to pull the trigger again it all falls apart once servicability is considered. The reality is my income is not about to increase to where it needs to be in order to purchase more property which will be -ve geared if you want any chance of capital growth.

The way I see it you will need a minumum of four properties substantially paid off to make this game work for you in retirement. To get that you need a serious amount of cashflow income to service the purchases while rents grow.

Accessing Equity is pointless without servicability.

Hi MMM

Was this in Melbourne and would you recommend Metropole?

I am considering using them as BA to purchase an IP in Melbourne a bit wary of what they recommend.

 

[Peter_Tersteeg]

I've had some dealings with them in the past, mutual clients. I'm good friends with some people who know them very well.

I'll share my observations over the phone or face to face if people are interested. I also know several excellent BAs across various states who I'm happy to recommend.

 

[Jacque]

Hi Bearsticky

I consulted Metropole recently (a staff left and and my case was forwarded to a new Property Strategist) and was considering using them as my BA to purchase an IP in Melbourne.

Strategy-wise: The type of properties, areas and $50K renovation are very very similar to what you mentioned here.

Wasn't 100% convinced by them as it seems I am being 'funneled' to use all of their services (2.5% BA fee, mortgage broker, conveyance, accountants, renovation tradies, etc)

Was wondering if you could tell more of your experiences etc. PM me if that suits you.

I looking at a BA for Melbourne so if anyone has any recommendations please let us know. Thanks!

Have you checked out the Victorian REBAA members? Metropole are not members. http://rebaa.com.au/members/vic/

 

[vegemite]

Thanks Jacque.

IMO, being a member does not not warrant a BA's competency.

However, correct me if I'm wrong: Say someone chooses to go with a non-REBAA member, and should something goes sour, the client will be on its own because that BA is not bound to serve under the Code of Ethics or Legal Principles.

 

[TMNT]

Hi Bearsticky

I consulted Metropole recently (a staff left and and my case was forwarded to a new Property Strategist) and was considering using them as my BA to purchase an IP in Melbourne.

Strategy-wise: The type of properties, areas and $50K renovation are very very similar to what you mentioned here.

Wasn't 100% convinced by them as it seems I am being 'funneled' to use all of their services (2.5% BA fee, mortgage broker, conveyance, accountants, renovation tradies, etc)

Was wondering if you could tell more of your experiences etc. PM me if that suits you.

I looking at a BA for Melbourne so if anyone has any recommendations please let us know. Thanks!

just on curiosity
can you give us figures of area, purcahse price, reno costs, new value, equity gains type please

 

[Aaron_C]

Have you checked out the Victorian REBAA members? Metropole are not members. http://rebaa.com.au/members/vic/

My mother is one of the best GPs around and she revoked her AMA membership a long time ago. I would place more credence on how their investment goes which by the sounds from the person posting, isn't that great.

 

[Scott No Mates]

Thanks Jacque.

IMO, being a member does not not warrant a BA's competency.

However, correct me if I'm wrong: Say someone chooses to go with a non-REBAA member, and should something goes sour, the client will be on its own because that BA is not bound to serve under the Code of Ethics or Legal Principles.

Being a member of an association is for the benefit of the members not for the public's protection. I have to hold certain licences through the OFT which prescribe levels of competency, the API, REI, MBA, REBA etc have codes of conduct but are essentially employer's organisations with skilled legal counsel to provide services to members and defend members not for the benefit of the public who have a grievance, these need to be taken to Fair Trading.

 

[Jacque]

Being a member of an association is for the benefit of the members not for the public's protection. I have to hold certain licences through the OFT which prescribe levels of competency, the API, REI, MBA, REBA etc have codes of conduct but are essentially employer's organisations with skilled legal counsel to provide services to members and defend members not for the benefit of the public who have a grievance, these need to be taken to Fair Trading.

Hi Scott

Whilst I agree that complaints need to be taken to the appropriate regulatory bodies I believe that consumers can at least take comfort from associations that have minimum standards for their members, such as REBAA. It certainly cuts down on the list of questions that buyers need to ask individual agencies! Knowing that all our members are appropriately licensed, carry PI insurance, adhere to a code of conduct, have verifiable references from agents and clients and have min. 12mths experience certainly assists in the weeding out process.

 

[ARG]

Metropole is primarily a buyers advocacy/agent service. If memory serves they initially started as property developers (which they still do a lot of), extended into managing developments for others (which implies buyers advocacy), then further diversified into property management.

Realistically their current business model of helping people to build property portfolios to create wealth is no different from any other buyers agent service creating a model of repeat clients for their business. It's a logical progression for this type of business to grow. It's also a service that's likely to be in demand by many clients.

As far as I'm aware, they don't do a much marketing of the properties they develop to clients as buyers agents. They don't market mass off the plan developments to uneducated investors unless that property specifically meets the investors requirements.

I think it's also fair to say Metropole go to great lengths to ensure that their clients are educated. They do charge fees for some of this, but these fees are very reasonable - $50 to $100 for a day long property udpate seminar is not unreasonable by any standard. Their education is also 'real education', not marketing rubbish like many sprukers I've seen.

I don't have any problem with their business model or the way in which it's executed (although I do wish they wouldn't send quite so many emails).

I don't use Metropoles services because I either have no need for them or I have others I prefer to use. I do however think that some of the comments previously stated are a bit unfair.

People do need to do their own due dilligence when working with any service provider. Take the advice you're comfortable with and avoid the areas you're not. I don't like everything that comes out of Metropole, but I also think you could do a lot worse.

I'm happy to discuss further offline if anyone's interested.

Hi Peter,

Which agenst do you prefer to use and why?

Cheers
Sarah

 

[Peter_Tersteeg]

Hi Peter,

Which agenst do you prefer to use and why?

Cheers
Sarah

What area are you looking to buy into?

 

[ToGetProperty]

Why need a buyer agent?

The step bellowed is much better than a buy agent mentioned in this thread:
1. Go to NRMA to get a map of Brisbane/Adelaide;
2. drop a dice into the map to see where it lands. This is location you are going to buy.
3. Go to realestate.com.au to pull all cheap (bottom 20%) properties on the area;
4. Call agents to put an offer on some of them and choose the one with minimum maintenance, big land and high yield.

It will beat the properties mentioned in this thread.
In fact, if you do this in Sydney 2 years ago, you have at least 30% CG.

 

[Michael Yardney]

Bearsticky

I find it fascinating that your first visit to this forum you post a negative comment about us. Your first and only comment - now that's interesting isn't it?

And many of the numbers and assumptions you've made are wrong. Maybe you're our friendly competition, maybe not

However to get to the point you describe, you must have become a client and paid us a registration fee.

So if your complaint is genuine please call me personally and I'll refund your money

Michael Yardney

Do Not Use Metropole as a Buyer's Agent!!! The so called Property Strategists are very convincing in terms of the investing strategy but the Buyer's Agents who goes out and seemingly finds the "right" property for you, certainly do not practice what they preach!!! Because they get commission when they buy any property for you, they just about "force" the property on you. We were shown a 2BR "dilapidated" unit in St Kilda and informed it was a great buy, off the market, for $520K. The renovation cost (which they also receive commission) was about $40-50K and their commission about $30K! So, all in all, the unit would have cost us $600K in 2013! Now bear in mind that this is just a normal unit, NOT art deco, about 60m2, no land component, ground floor, lower ceiling than normal, etc. As we were seasoned Investor, we purchased an RP Data report and it was only valued at $480K! Luckily we backed out.

We also used Metropole in Brisbane, as we were looking to purchase in Melbourne and Brisbane concurrently, which was another big mistake!

The unit they bought us were far from our key selection criteria and it comes to a point where they "force" the sale on you and because you were so eager to buy "something for fear of missing out", you will eventually submit to their coercion. The unit they bought us in Brisbane was WITHOUT AIR COND/FAN, which is supposed to be a key criteria over there and being from Melbourne, we overlooked this. They also initially told us there is good land component for the unit only to find out later that the supposedly land component is common area and does not belong to the unit!

Believe us, you are way better off working for yourself, doing your own research about which growth suburb to purchase, etc!