- IP FreelyMember@ip-freelyJoin Date: 2008Post Count: 353
I am considering using a buyers agent
For those that have used one before:
What does a buyers agent do?
What and how much information do they provide (photos, property descriptions, sales data, investment analysis incl dcf/irr etc)? (or am I expecting too much)?
What inspections do they do or do they organise building/pest inspections etc?
How much work does it save you?
What negotiations do they undertake on your behalf?
What do they cost – is it a fixed fee, hourly rate or % of purchase price? Is it based on success only or payment for services?
I'm not sure if it is the same thing, but I asked a RE agent to find a property for me once.
It worked a treat and didn't cost me a cent. He split commission with the selling agent.
I was travelleing to where IP1 was and only had about 2 days there, during which we had to do the obligatory family visit too. We wanted to purchase another IP, so gave the agent a list of what we were looking for and asked him to find what we wanted. He had a list of about 4 properties to look at. He said that he thought the first one best suited what we were after, and after looking at it we were thrilled and didn't bother looking any further. We bought that property and profited well from it before we sold it a couple of years later when we bought a PPOR. I used the same agent to sell the property, and if I were to do any other business in his area, I would use him again. He was just a good, experienced and knoweldgeable agent who was willing to do the work, and didn't bother with all the usual bull.
Shales, what you got the agent to do was go 'conjunctional' with the other agent and split the commission ie he was helping out a mate, not working exclusively for the buyer.
I thought it might have been different. Whatever you call it, we were lucky to get a good agent, who listened carefully to what we wanted and delivered. I don't know if they were mates. I remember the original asking price was well above what we paid for it, and our agent scoffed at the little local agency that was always overpricing stuff and having it sit on the market for months on end. I think when he presented a qualified buyer, and made an offer well below what the other fella wanted, and threatened to go direct to the owner with it, any vestige of friendship was gone!
I do realise that this strategy could go wrong with mates deals happening etc etc. We got lucky.moana_fusionMember@moana_fusionJoin Date: 2009Post Count: 35
Hi IP Freely,I used a Buyer’s Agent for my first investment purchase – as I wanted to see the process that they put in place, and also walk away with a file of their research so I might replicate it for myself in the future.Some agents offer varying degrees of service – some will only do everything, but others will do the auction/negotiating for you, or the research. I went the whole hog, and I think they earned their money.Each will no doubt have their own process, but the main steps are below:· Establish terms and length of engagement· Workout what you are looking for, what reasons you have for buying, and where· They do their homework and only come back to you with properties that tick all the boxes· Once you select a property, they handle all negotiations and any bidding at auction, and the building/pest inspections that may need to be done· At the end you “should” be presented with a file of their research, including depreciation schedules etc – what you get will depend on the buyer’s agent, so tell them what you expect upfrontI ended up playing about 1% + GST, but I have heard the standard fee could be as high as 2% + GST plus. In the end I felt that they saved me more than that during the negotiation – they do it every day, and they know how to handle the negotiations. I paid a deposit of $500 upfront, and would not have had to pay anymore if an appropriate property wasn’t found.Cheers,Mike
Moana_fusion is right on the money!
I work as a buyers agent in NZ and have a good clientele of NZ and Aussie buyers simply because I can find them deals they can't find themselves, and I do ALL their legwork! A good buyers agent can save you thousands of dollars because they will know their buying patch intimately and will be way more experienced at negotiating than someone who has only bought one or two houses in their lifetime.
So, IP Freely, when you're looking for a buyer agent it's important to find out up front what you're paying for and how much of the due diligence process they're going to help you with because some agents will just feed you medicore properties and leave you to figure out what to do next, which is basically useless – anyone can do that!
IMHO anyone worth their weight should be:
1. finding out what your buying criteria is
2. presenting you with deals that meet your specific buying criteria
3. negotiating hard on your behalf
4. helping you through the whole due diligence procedure, i.e. rounding up tenancy forms and bond lodgements, making appointment for the valuer, building inspector, rental manager, and getting access to the property for them, plus putting together a spreadsheet with depreciation, income, expenses, which takes into account your exact situation so you know down to the last few dollars how the deal is going to look.
5. present you with everything you need to make an informed decision about the property
Basically, all you should be left to do is read the reports, sort your finance and sign the transfer documents!
All the best,
How does a person become a Buyers Agent? Is there a qualification?
In NSW you need to hold a real estate licence (restricted).moana_fusionMember@moana_fusionJoin Date: 2009Post Count: 35
Here's the link for the accreditation needed to be a buyers agent in VIC – http://www.reiv.com.au/_uploads/training/accreditation/BuyersAgent_AccreditationGuide.pdf
SHales, that's the BIG problem in NZ, anyone can hang a shingle up calling themselves a buyers agent. At the moment there is no accreditation program and there needs to be one.
I have assigned more than 100 contracts and I'm grouped under the same umbrella as someone who has done one contract and is calling themselves a buyers agent. That said, newbies do definitely struggle to set themselves up here as buyers agents and if they're only doing one contract every few months they quickly decide it's not as glorified and fun as it sounds!
Just like being a real estate agent, it takes time to build your database and reputation. Fortunately, the cream does still float to the top!
I was just wondering because I was considering it for myself. I'd need to learn from someone, though, I think. I love RE, love the game. I'm a strong and shameless negotiator, but I don't take things personally – everyone is just doing their little part of the dance. Don't get to play as much as I'd like cause I don't have the money (working on that one, though). I've considered becoming a RE agent, but they have to work Saturday's too much (like every Saturday), and people ring them up too much and annoy them ( I know I'm always annoying them). Perhaps being a buyers agent might satisfy my love of RE, my desire to operate my own business (as I do now), my enjoyment of professional services, and not be too insane on the weekends and evenings for me to enjoy a normal family life with my young family. If I could work for a really good buyers agent, I could learn an awful lot that would help me with my own investment portfolio. It's just an idea. If they have a life like a RE agent, then I'll think of something else, thanks. That's not what I want. But I could do that research, I understand numbers and statistics well. I have an accounting qualification and investment experience of my own.
The other thing I'm thinking about is a business broker.
As a buyers agents I do NO weekends unless I choose to (i.e. checking out open homes) and NO staffing of open homes because I'm selling to my database not the general public. Depending on how you are on-selling, being a buyers agent can be more behind the scenes, at least the way I have it set up in NZ is. I do most of my buying privately, or from very motivated and/or stale listings. All my on-selling is from home to my database and that usually means identifying a property and matching it up to a buyer's criteria.
One thing that I think is important to remember is that you are working for the BUYER. So getting that buyer the best deal is paramount. I think a lot of RE agents struggle with differentiating when they are working with both the buyer and seller on a single transaction and don't always do the best job for either, i.e. if you are working for the seller and your commission split is 2%, it is very little motivation to get the seller an extra $20,000 more because your extra commission is only $400.
However, if you're working as a buyers agent and your client is equity and CF+ yield-driven, your buy price will likely, as a minimum, need to meet a more stringent criteria and you may not have the wiggle room that a RE might have, especially if you are wanting to do more business with the investor!! I find I have to be more of a "negotiator" than "messenger" because I'm not just delivering an offer I am presenting a property that the buyer will have for many many years. Get it wrong and the price can be costly! Basically, if I wouldn't hold it on my own portfolio, I won't on sell it.
Personally, I feel it is easier to over deliver and have a repeat buyer than under deliver and never get the deal over the line!
Playa, in Unzud (sorry I couldn't resist), do you have to purchase on the investor's behalf and then assign the contract or are you engaged & paid a success fee by your investors?blogsParticipant@blogsJoin Date: 2005Post Count: 418
Pffft buyers agent, property advisors are shonks. Do it yourself and save the money…..
SCOTT NO MATES — I contract the property from the vendor and assign the same contract to the investor for a fee. Over time, I often sell more than one property to the same investor because I build a relationship with the people I work with, and if there's a renovation to be done, I project manage that, so the income stream doesn't necessarily end at one contract.
As I said above, it's all about giving the buyer what they want.
BLOGS — Clearly you have a lot of spare time and know you can do a better job yourself, so you wouldn't need the services of a buyers agent.
Happy buying everyone!
Playa, isn't that a risky strategy? ie if the purchaser decides that they don't want to proceed aren't you stuck with the property? or what is in place to ensure you do no land with properties that you can't finance?LinarMember@linarJoin Date: 2004Post Count: 567blogs wrote:Pffft buyers agent, property advisors are shonks. Do it yourself and save the money…..
I bought my first IP, a 2br unit in Darwin, through a buyer's agent. That was 5 years ago. The unit cost about $85,000 and I paid the agent about $3,500. That was a huge percentage to pay the buyer's agent.
However, after that purchase, I discovered the Darwin market and went on to buy over 20 properties there on my own, ALL of which were positively geared and doubled in value over 2 – 3 years. I have now sold all of them so the profit is realised profit, not just my estimate of value.
If I hadn't used the buyer's agent, sure I would have "saved" myself the $3,500 but then I wouldn't be financially independent today. My job today is buying, selling and developing properties. I haven't worked as an employee for over 4 years and my husband hasn't worked as an employee for two and a half years.
There are so many negative comments on this forum about property advisers with people saying "save yourself the money and read a book". It's not as simple as that. Often people need a kick start to get involved in property investing and sometimes getting others to do the initial work is well worth the money. Sure I think that there should be caution in which property adviser you choose to go with but I find the blanket rubbishing of all property advisers on this forum to be incredibly narrow sighted.
I managed to turn that three and a half grand into a couple of million in 5 years. Best money I ever spent.
Interesting post Linar. I agree, there are good and bad in every profession. People shouldn't condemn all Property advisors just because of a bad experience with one.
In your opinion, how would you compare the advantages and disadvantages of property advisory with bird dogging from both the perspective of the buyer and the advisor / bird dogger?
Do you think bird dogging would be a good way to get a bit of experience on the way to becoming a buyers agent?
SblogsParticipant@blogsJoin Date: 2005Post Count: 418
Every man and his dog has been able to make money out of property over the last 10 years-hardley an amazing feat. When they get it right they are 'worth every cent' and when they get it wrong 'they cant be right every time'? Kinda reminds me of used car yards-why on earth people got to a car yard and spend another $3k more than they would by buying privately is beyoned me??
re spare time-it doesnt exactly take a huge amount of timke looking at property reports and doing some research to get an idea of fair value for an area. I fyou have an interest in this then you should bne across it all, but if you have absolutely no interest and no inclanation to spend any time on it yourself then sure spend $20k on a agent I guess….
Linar, so you are crediting the agent for the 20 properties you bought yourself? Interesting. I suppose you could use the same logic for a magazine that tells you to buy in place 'x' which see gains in the future..?