Using a buyers agent, Is it worth it?

[mykie]

Hi everyone,

I am really keen on purchasing a property in Invermay Tasmania due to affordability and its potential for high capital growth given it is only 2km from launceston and right near York Park (second home of the hawks) As I live in Melbourne I am looking at using a buyer's agent to go through with the purchase I am just wondering whether anyone has ever used such an agent or advocate and what their experiences were with them? It seems like the way to go given they have a proven track record in negoiation. Any thoughts on Tasmania or buyers agents would be very helpful.

cheers Mykie

 

[Rolf Latham]

Hiya

Almost all ofmy clients that have used BAs are happy with the outcome and the cost to benefit ratio.

Choose someone with a bit of experience and pref via referral

ta
rolf

 

[units4me]

With $1000, you can fly to tassie, have a few nights in a nice motel and car rental.
This would give you ample opportunity to get a feel for, and knowledge of the market you're interested in.

Why pay a third party who may or may not have your best interest at heart?

How do you know any agents or vendors aren't in the pockets of the BA?

Sorry, but these are questions you need to ask yourself.

 

[geoffw]

I agree witgh Rolf that BAs can be very useful.

But, you are talking about a very small area where there may not be much help available.

I would also look at your reasons for expectations of capital growth.

If it is in an area where there is high demand, and low supply, go for it.

But I'm not sure that there is low supply around Launceston. I don't know it well- so do your own due diligence. Carefully.

 

[units4me]

So if you do your own careful due dilligence, what purpose does a BA serve?

 

[Aimjoy]

So if you do your own careful due dilligence, what purpose does a BA serve?

Avoid the pressure and 'sales techniques' employed by Real Estate Selling Agents. Remember, a Real Estate Agent is legally bound to represent the Seller (vendor) in a real property transaction. Their purpose is to obtain the highest possible price in the quickest possible time for the Seller. How then can a Selling Agent, provide a Buyer with the best service? Conflict of interest.

Make money / lock in equity
You’ve heard the old adage, “You make money when you buy”. Buyer’s Agents, negotiate the lowest possible price on the best possible terms for the Buyer. This can often mean that you can “lock in equity” early in the life of a real property asset before the compounding effect of capital growth does its work.

Market Appraisals/ Capital Growth/ Local Knowledge
Buyer’s Agents, have access to the same industry data accessed by real estate agents like RPData, Residex etc. They know statistically what areas have shown superior capital growth in the past. If you chose a local BA they also know what is happening in the area that might improve one suburb’s capital growth over another.

Get access to properties before the general public does
A significant number of properties BA's purchase never hit the public market. Because a good BA will have spent years building personal relationships with Real Estate Agents, when properties come up for sale they have immediate access to these properties before the general public does. Think of it this way: Why would a Real Estate Agency spend time, effort & money advertising a property, putting up signs and window displays and holding “Open For Inspections”, when they could make one or two simple phone calls to their “contacts” (Buyers Agents) to gain a quick sale on a good property?

Save Time
Searching for the right property can take a considerable amount of time and effort. This is even harder if you live out of the area like mykie. Many BA's have clients that are busy, time-poor professionals who understand the need to leverage their time. BA's can do all the investigative work and only present a shortlist of suitable properties for you to inspect.

Reduce Stress
Buying property can be a very emotional and stressful experience for some people. This is because it represents the purchase of the most expensive item you may ever buy. On top of that you may only do it one or two, or at most a few times in their entire life-time. BA's get to do it all the time on a regular basis. They can remain emotionally detached and apply predetermined criteria to see if it stacks up. For newbies, once a BA has located the ideal property and negotiated the lowest price, they can guide a buyer through the process, & co-ordinate the support services needed like solicitors, mortgage brokers, pest & building inspectors and insurance brokers. If it is to be an investment property, they can also direct you to tax accountants, quantity surveyors and property managers.

So maybe a BA is not for everyone if you can do all that on your own but as Rolf says - he gets results using them.

 

[MissHoney]

With $1000, you can fly to tassie, have a few nights in a nice motel and car rental.
This would give you ample opportunity to get a feel for, and knowledge of the market you're interested in.

Totally agree with units4me!! We have just returned from Adelaide trip to do just this...all research done before hand (tons of phone calls and emails), appts scheduled and confirmed and then lots of driving and talking over 3 days (plus a trip to the Barossa for fun). We did investigate using a BA but with a fee of about 7K this was totally NOT worth it. I trust my own judgement over a BA. Remember that there are great property research tools such as realestate.com.au and rpdata where you can buy the suburb sales reports.

MH

 

[ianvestor]

[A few nights] would give you ample opportunity to get a feel for, and knowledge of the market you're interested in.

And here I am thinking it takes years and years...

 

[units4me]

Hey look, if you like to throw $1000's at a BA for putting together some deal, that may suit them more than it suits you, then good for you. You should be in control of your own future with a decision so important. Can't beat your own due dilligence i think.
If you're not experienced, don't worry, shop around for a while first and you'll pick up the skills very quickly.

What i'm saying is that the things mentioned in some of the above posts are just plain commonsense and negotiating skills. Not rocket science.

People pay enormous amounts for some seminars, financial planners etc for "independant" advice which invariably leads to a sales pitch (surprise). Are some BAs in that category too? If so, would you know which ones?

Can i have my 7K now please?

BTW, it doesn't take "years" to figure out whether you're paying too much, bad area, wrong type of IP for area etc of any given suburb or town.

 

[Aimjoy]

We did investigate using a BA but with a fee of about 7K this was totally NOT worth it.

A good BA would save you many times this perhaps?

I trust my own judgement over a BA.

I think this is the key to the whole discussion. If you feel comfortable, have the skills & experience, enjoy the hunt, are a good negotiator, can be on-the-spot at short notice, don't have a job that means you are away someplace when the deal arrives, then go for it. I have - and so far netted 5 IPs without a BA and I still remain happy with my purchases and have not had to 'shoot any dogs'.

But there are some newbies on here along with some professional investors that just see a BA as another professional service they make use of.

They don't do their own conveyancing - although it is not difficult to do.
They don't do their own building inspections - they hire a building inspector
They don't do their own pest reports - they hire a pest inspector
They don't choose their own colour schemes if doing a reno - they get a colour consultant
They don't approach 30 different lenders looking for the best deal - they use a good MB
And I kinda see using a BA in that same light..............

Would I use one? Well probably not if I was buying locally. But certainly if I was buying interstate - well, Yes I would - for my situation it would represent value.

 

[ianvestor]

I guess personally I wouldn't use a BA for a PPoR or an apartment. Like MissHoney, I'd probably prefer to trust my own judgment there.

However I'll definitely continue to use one for development sites, as I just don't have the time or inclination to know everything there is to know about demolition controls, vegetation protection orders, storm water drains, set backs, etc.

-Ian

 

[Xenia]

It is very much a personal thing. We have a buyer's agency but in the initial interview with clients we establish whether there is a genuine need or not. If people tend to live in the area they are interested in buying or have alot of time or are very detailed people in terms of due diligence analysis then they do not need a buyer's agent.

Believe it or not we recomend that some people do not use our buyer's agency simply because we do not think we can help everyone. Miss honey will not be a typical client becuase she has the time and willingness to attend to detail. Many people do not.

Our typical clients are professional investors: Those who make alot of money in a profession or business and want to buy good quaility properties but do not have time to research areas or conduct due diligence nor the inclination to learn how to do it. Their time is much better spent in their business or profession.

Aside from leveraging time however there are other benefits to consider: buyer's agents recieve calls from new listings with agents before they are marketed to the public and we also recieve private sales from vendors who do not want to use an agent to sell their properties.

Many of the properties we have sourced for clients in the past have not been available to the general public.

 

[YLC]

Hey look, if you like to throw $1000's at a BA for putting together some deal, that may suit them more than it suits you, then good for you. You should be in control of your own future with a decision so important. Can't beat your own due dilligence i think.
If you're not experienced, don't worry, shop around for a while first and you'll pick up the skills very quickly.

What i'm saying is that the things mentioned in some of the above posts are just plain commonsense and negotiating skills. Not rocket science.

People pay enormous amounts for some seminars, financial planners etc for "independant" advice which invariably leads to a sales pitch (surprise). Are some BAs in that category too? If so, would you know which ones?

Can i have my 7K now please?

BTW, it doesn't take "years" to figure out whether you're paying too much, bad area, wrong type of IP for area etc of any given suburb or town.

I agree with you unit4me. I used 2 different BAs for 2 interstate purchases and I believe I could have done better. I learnt from my own experience and won't use a BA again. People use the excuse of not having time so they use a BA. Even if you use a BA you have to spend time doing due diligence on BA.
At the end of the day, you have to be responsible for your own investment.

 

[KJL]

I used a BA in Tassie cos we wanted to buy there but had no time to spend enough time doing the requisite amount of DD. We were more than happy with the service and our eventual purchase. Happy to dig out the details of the agent if you're still keen. Let me know.

 

[mykie]

I used a BA in Tassie cos we wanted to buy there but had no time to spend enough time doing the requisite amount of DD. We were more than happy with the service and our eventual purchase. Happy to dig out the details of the agent if you're still keen. Let me know.

I am still keen cheers KJL if you can provide the details that would be so helpful.........cheers everyone for the feedback!

 

[bent]

Hi Mykie,

I'm a professional commercial real estate broker and I use a BA for resi property. Many of my clients are Fortune 500 companies and they trust my advice when making decisions involving very large expenses and business risks. They also trust me to negotiate the best deal for them on leases and acquisitions. In my experience in the commercial world, tenants need a representative to help them get the best deal.

In the resi world, for me making use of a BA is a good way to leverage my time and be sure that I'm getting the best deal possible.

Cheers,
Ben

 

[MF35]

Hi All,

I agree it depends on your circumstances and your ability and inclination to devote the time to the task of thorough due diligence. I know with my wife and I working full time, with a young child and more planned, and no family living close by time is precious. If it meant I'd find a suitable IP sooner rather than much later and I wouldn't have to give up all my family time I'd use one.

Another benefit can be their ability to buy in bulk. For example with units. I know of BAs buying whole blocks (usually small to medium ones) on behalf of a group of clients. They negotiate a discount for buying the lot in one line and you save on the purchase price. Good ones can also match you with clients with similar goals. For example, those that want to buy, add value through reno. If I purchased one unit in a block I'd be able to reno inside the unit but I'd have to convince all (or the vast majority) of the other owners to cough up their share if I wanted to get the common areas, exterior of the building, grounds etc improved. I don't like the chances of getting that many people who weren't planning for such an expenditure to agree to this. If however I buy a unit using a BA with a group of other buyers all wanting to do (and budgeting for) the same thing I can get this done. Leaving greater opportunity to add value to the IP on purchase. Just another thing to consider.

MF35

 

[burstock]

Has anyone here had a good experience with a Brisbane nased BA ?