WHAT IS A BUYER’S AGENT
AND DO YOU NEED ONE?
Property investment expert,
Chris Gray, explains the
importance of a buyer’s agent
Many people have bought property themselves or have seen
close friends and family do the same. As such, it’s a very
common question to ask: “Why do I need a buyer’s agent,
when I can do it myself?”
It’s a good question to ask and there are many reasons why
you should consider one.
A buyer’s agent is a professional buyer of real estate. He or
she searches the market to find the ideal property that best
suits your needs, and then negotiates to buy it at the lowest
possible price.
A buyer’s agent is almost the complete opposite to a real
estate sales agent who works for the seller and tries to find
them the ideal buyer at the highest possible price.
WHY USE A BUYER’S AGENT?
People are time-poor. These days we’re
all extremely busy, often working 40-plus
hours a week on top of a packed diary
of social and family activities. Looking
for that ideal home or investment,
and understanding what’s available
on the market at which prices, takes a
lot of time. It typically takes over 100
property inspections to really know an
area, therefore even if you manage to
see 10 each week, that’s two to three
months spent looking at a minimum.
Buyer’s agents can do that leg work for
you and discard 80 to 90 per cent of the
properties that don’t meet your needs,
leaving you to inspect only the select
few that do meet your criteria.
• have found their next property
and need to move quickly
•only need a certain figure to
progress on in life
• not have the budget for a full
advertising campaign.
Sales agents will often bring silent sales
to buyer’s agents they know and trust,
as they’re aware they have a list of pre-
Good properties always sell well.
While you might think you’re a unique
individual, many buyers are often
looking for similarly-priced properties
in similar areas that are close to work,
schools, transport and leisure facilities.
Therefore, when a good property comes
up which ticks all the boxes, there is
often a large amount of competition
for it regardless of the state of the
local economy. That increased demand
means there will likely be less chance
of you securing it when you do find it,
and if you can win at auction it’s often
for an inflated price. Buyer’s agents can
assist you to find that property sooner
and secure it before the demand gets
too high.
qualified buyers that are keen to move
forward. It’s harder for sales agents to
give silent sales to the general public,
as they need to deal with many more
people, and they don’t know who is
serious and who is just a serial looker.
Buyer’s agents know about off market
Buyer’s agents have negotiation
sales. Many properties get sold without
ever hitting the general market, and are
not seen on the classic www.realestate.
com.au or www.domain.com.au
websites. These are called silent sales,
and there are several reasons why a
vendor might wish to sell a property
without it going on the market. A
vendor might:
•not want the neighbours
knowing their property is for
sale
•be going through a divorce
and want privacy and speed
experience. If the average buyer only
buys a property once every three to five
years, and a professional buyer’s agent
buys daily or weekly, who do you think
is more experienced in negotiation?
Any skill takes practice - the more times
you negotiate, the more you experience
the different ways a negotiation can go.
Over time you learn to avoid the classic
mistakes, and will have a much better
chance of securing a property at a more
favourable price.
Buyer’s agents are unemotional and
factual. As buyer’s agents are not going
to live in the property and transact
multiple times, they are often less
emotional about the transaction than
owners when purchasing property. It’s
therefore much harder for the sales
agents to put emotional pressure on
them to pay more money. Buyer’s
agents will buy properties based
on comparable sales prices of other
properties that have sold recently, and
are more likely to remain focused and
objective throughout the process.
Buyer’s agents have insider knowledge.
As buyer’s agents deal with sales agents
every day, they generally build up a
trusting relationship. They will have
transacted many properties together
and built a mutual understanding of
how they like to do deals. A professional
sales agent would not want to damage
a long-standing relationship with a
buyer’s agent as it could mean the
buyer’s agent no longer uses or trusts
them. While the sales agent can still
sell properties to the general public,
it generally takes much more time and
effort to deal with many individual
transactions from multiple buyers, who
may be unsure or indecisive. Sales
agents will often give vital information
to buyer’s agents that they may not
share with the general public, such
as the vendor’s circumstances, other
comparable properties in the area or
potential areas of concern. This can give
you the inside track on whether to walk
away from a potential headache, or how
to secure it under more preferential
terms.
Buyer’s agents have local expertise. A
buyer’s agent will often be an expert in
the local area. This information can be
imperative in understanding which is the
better, more valuable side of the street.
They’ll often also know which buildings
or streets have a bad reputation, or
are harder to sell. For instance, I know
a building which looks great on the
outside and inside, however it generally
takes three to six months to sell a unit in
there. It has a bland feeling and there’s
often more than one property for sale
at a time. The property next door
has an older red brick look, however
always sells quickly and for high prices.
Unfortunately first impressions don’t
always make the best investments.
It’s not always about price. I often find
it’s better to secure a property that
ticks all the boxes at a fair price, than a
property that has some major flaws that
you pick up cheap. A cheap property
will always be cheap and will always be
hard to sell, however good properties
can always fetch a premium. Buyer’s
agents help you to focus on what really
matters.
You can avoid going to auction. While a
large number of properties in our main
capital cities are advertised as going to
auction, there’s nothing stopping you
buying beforehand. I often find that at
auction, buyers will buy based on what
the bank will lend them, not what the
property is worth. That’s where you
get the headline news of a property
selling for $100k or more over reserve.
Buyer’s agents often avoid auction for
that reason as they want to pay a factual
price.
You’ve got to spend a dollar to make
two. Our parents’ generation was
taught to get wealthy by saving money.
Look after the pennies and the pennies
look after the pounds. However, this
generation knows that you’ve got to
spend money to make money. While
a buyer’s agent may cost you two per
cent of the purchase price, they can
easily save you five to ten per cent by
not going to auction and not paying an
inflated, emotional price. If a buyer’s
agent helps you choose a property that
grows at eight per cent rather than six
per cent, that can make hundreds of
thousands of dollars difference over the
life of the investment.
Chris Gray
Chris Gray has over 20 years
experience in property investing
and education. Chris is CEO of Your
Empire, which searches, negotiates
and renovates properties on behalf
of time-poor professionals. He is
also host of Sky News Business
Channel’s Your Property Empire
every Friday, and was Financial
Judge on Network Ten’s The
Renovators. Chris is additionally a
qualified accountant, buyer’s agent
and mortgage broker.
For more information visit www.
yourempire.com.au or www.
chrisgray.com.au and follow Chris
on Twitter: @ChrisGrayEmpire.
This article was first published in ‘It’s My Home’, Summer 2015 edition, proudly brought to you by Genworth Australia.
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