By Rich Harvey, CEO & Founder, propertybuyer.com.au
It’s pleasing to see more purchasers than ever seeking professional assistance when buying property. It makes sense really, given we already outsource so many things to specialists – from garden maintenance to tax returns. It’s smart to ask those with the talent, experience and know how to complete work far more efficiently and effectively than we could by ourselves.
But as the public’s use of buyers’ advocates (BAs) has grown, so too have the options. Each year, more and more BAs are starting up operation. Unfortunately, their skills can range from exceptional to ordinary (to downright unscrupulous in some cases).
So, how do you select the best possible BA for your property search?
Well, I’ve identified seven categories that encapsulate what you should seek when securing the services of a BA.
1. Industry experience
The property price cycle generally runs somewhere around seven to 12 years depending on variables like location and property type. Any BA with real experience will have experienced at least one to two of these full cycles.
One of the big challenges our industry faces is those with almost no experience deciding to set up as a BA. All the study in the world cannot match being a hands-on BA through the rollercoaster of property price movements.
Seek an advocate with 10 years or more experience as a real estate professional. This could include roles as an advisor, valuer, economist or sales agent.
2. Market coverage
This should incorporate the three main variables of location, price and property type.
It’s crucial your BA has intimate knowledge of the geographic area you want to buy in. For starters, different jurisdictions will also have varied regulations around the trading of property. Using a BA from Melbourne to buy a home in Brisbane will never work. Local knowledge is essential.
Also, seek a BA with a track record in the types of property you want to purchase. Buying a $5+ million waterfront home requires a completely different skillset to acquiring a $1 million investment apartment in the CBD.
Make sure your BA’s skillset and coverage meet your needs.
3. Results
A great BA can demonstrate how they’ve achieved a successful outcome for their clients. Of course, “success” can mean different things to different buyers. Some clients want to save on time and hassle. Most will want to pay the lowest possible price for the right property, while others will want to avoid the stress of a negotiation or auction.
A great BA can describe example where they’ve fulfilled the needs of their buyers by drawing on knowledge, expertise and extensive networks.
So, ask for testimonials… and see if you can reach out to past clients for personal references too.
4. Networks
There’s little doubt the most successful BAs have an extensive network of local contacts that will help them achieve extraordinary outcomes.
These networks will be dominated by sales agents who will happily direct listings to a BA they know and trust. Agents love dealing with BAs. Through experience and interaction, the BA will have demonstrated their no-nonsense ability to quickly assess a property prospect and determine its suitability for their client. This saves the selling agent the time and grief around dealing with a less experienced buyer.
Other BA network contacts will include professionals they can recommend to their client. This could encompass legal advisors, town planners, valuers, building and pest inspectors, mortgage brokers and accountants. The BA will filter the best from the rest, so the client knows they’re dealing with the right professionals for their job.
5. Research
Research is the foundation of successful property buying. Your BA can demonstrate exactly how they’re selecting locations and properties. It’s not about just where to buy, but also what to buy and why it’s worth buying.
A well-researched BA can show why certain suburbs are an excellent opportunity for your needs – be it a home or investment. They will also identify other potential locations and property types that you perhaps hadn’t considered.
This sort of research and ultimate due diligence will be a combination of both qualitative and qualitative analysis. The BA should have access to data on price movements, rental levels, recent sales, vacancy rates and other metrics. They will also be tracking gentrification, infrastructure, town planning changes and other key drivers of rents and values.
Finally, their research will encompass ongoing feedback from local agents and other professionals.
6. Credentials
Reputation is everything in this business, and you want to deal with people who are qualified to deliver advice you can trust.
BAs are subject to some regulation. All need to be licenced to act as an agent in their state or territory. In addition, most will need to gain experience in the field under a more experienced BA to help earn their stripes.
Beyond the mandatory credentials, there are additional affiliations and qualifications you should seek as well. REBBA is the Real Estate Buyers Agents Association of Australia. It’s the professional association your BA should be a member of. REBBA delivers educational and networking opportunities to their members. The association also ensures members maintain the highest possible ethics in their dealings with the public. Poor conduct will result in expulsion from REBBA.
Those BAs who hold qualifications in other fields can service you well too. From studies in property economics and accounting through to business administration and project management – all sorts of additional learnings are an advantage.
The other elements to seek is their market commentary – whether through regular media coverage or self-published newsletters and posts. Look to see their values and approaches align with your own.
7. Fee structure
Understanding the fee structure adopted by the BA helps identify the best professional for you.
There are a variety of cost structures that BAs apply, from fixed fees to percentage of sale price. The key is to ensure that the value they add to the transaction exceeds their fee.
This raises another point. Make sure you’re dealing with a BA who is paid by you and only you as the buyer. If a BA is collects additional commissions or fees from a selling agent or developer, then their interest will be compromised. When researching a BA, ask them who pays their fee. Also, conduct some research via REBBA and past clients.
Buying a home or investment is a huge undertaking where the best results are delivered by the right industry professionals. Working through this list of seven criteria should help deliver a fabulous buying outcome, and help you avoid bad decisions that could cost tens-of-thousands of dollars.
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