Am I being unrealistic?

Hello guys,

I was dealing with a BA up until today when they unfortunately decided to cancel our contract. The 1st property the BA offered was quite interesting, however our offer was unsuccessful. Two weeks later, the BA came up with a 2nd (off-market) opportunity. However I thought the valuation was way off the mark. I spoke to a several Real Estate agents as well as 3 very knowledgeable investors from this forum and they all thought the property was 30-50k overvalued.

I have respectfully let the BA know that we don't agree with the valuation. The BA was noticeably upset (I'd say unprofessional) and said how they know their job very well and their valuation was based on facts. They said (I would even say threatened) they would not want to continue the search for us if we "keep battling them on comparable sales".

Over the next 2 days, I've made 3 phone calls and sent 2 emails in efforts to clarify whether our criteria is too difficult as well as agree on the best way forward. However I didn't get a single response.

Eventually the BA emailed me back stating that our contract was cancelled and 100% engagement fee transferred to our account. They said the reason for this was because we did not agree with the valuation that was based on factual comparable sales. I will not state the name of the BA as I believe it would not be professional. At the same time I feel sorry for all their future clients, especially because the BA is highly recommended on this site, although only from MB's and other BA's, not from the actual clients.

Parallel to this, I got in touch via PC (completely randomly) with one of the BA's ex clients who was extremely disappointed. He is a busy professional, very time poor, who let the BA do all the work with zero control over the process from his side. He strongly believes his property is 50k overvalued and even his PM told him that. Unfortunately it is too late now.

What are your thoughts? Honestly, I'm super disappointed.

Many thanks!

 

Which city / area are you looking in?

 

that sucks, at least he's let you move on. I think you can find a good BA. I'll let you know of one I used before. I'll PM you.

 

It's for Melbourne, but if I name the area it will be too obvious. There is only one BA in the area.

 

Too bad to hear this @Realist35 ... at the very least they refunded your engagement fee. How available are you to fly down and have a look yourself?

 

Ah, your buying in Melbourne, my BA is in WA, I just read your location.

 

Best thing is to move on, do what you were doing and get in there. Keep calling those agents, go there, and get to know the area better than any ba. It's your money, own it so no one else is responsible if you buy a lemon. In a short period of time you will know the area better than anyone else looking as you've put the hard work into it.
When you know it well, you'll see many opportunities present themselves and you will know exactly what to pay, you won't even question it. Well done that you spotted this prior to purchasing.

 

Good advice, but a good BA will also know more areas, making them more valuable. I find it difficult to pick just one area and stick to it. Plus the pitfalls of buying the wrong place can be very expensive, even if I've done my own research it still happens.

I'd happily use a BA again but I'd also do what you suggest so when a place is suggested I've already got some idea if it's a lemon or not.

 

If you have the right ba then it's great. But you still need to put the work into it so you know the ba is on the ball.
BA can present you deals before they hit the market giving you the best chance to get a great deal, but how would you know it's a great deal if you don't know what you don't know.

 

100% agree.

 

That is dissapointing but one thing you can take from it is you have done great DD to make a BA feel threatened!
BA's are a great resource.... provided you get the right one. I think you can hold your head high and find another ba or buy yourself.

It could have been worse if they kept searching for you and made it difficult to get your fee refunded. Plus loss of time

Keep going

 

The way you cam and asked each question on PC chat. You already have access to the most successful people and opinions of pro investors.
I wonder if any BA would be able to satisfy the expectations, especially when you are going to challenge each evaluation.
In this case it seems that the BA was not doing due diligence rather just satisfying his own interests ahead of the customer.
Best target yourself or follow people who are still buying in Melb.

Regards

 

At the end of the day, if the price or place does not look suitable, it is your choice.

As none of us know the exact conversation/s, it is hard to say if maybe something abrasive, but not intended, was sent, but I do think asking how did someone come to believe a place is of value has to be a reasonable question.

Maybe if finding another BA, let them know you do your own checks as well and you won't buy anything inflated if it is not offering something such as a rare dev opportunity etc. Or just take any old average place if you think the price is not fair. Let them know your hands on and will have some questions & that is part of helping you make decisions.

 

Good on you for not being pressured into buying something you didn't feel comfortable buying. It's a real shame that someone who puts themselves out there as a professional can say buy it, don't question it, and then expect you to be happy with there service. It's great they refunded your fee though. Good luck finding the right property for you.

 

I believe you actually should state the name of the BA so others on the forum will not go down this road and perhaps the BA will get his/her act together and learn from this.

I posted some time ago that it is important to verify and view evidence provided by BA, however if you need to do this then why not take the next step and buy it yourself????? you are already putting in the hard yards and the best way to learn. Time poor??? If you are spending 500K I would be making the time for this one.

BTW, I have met 2 investors this week that used BA and both received very poor advice, different States.... this has cost them dearly, why? because they did not go with their gut, they thought the BA knew better. Really.... your money...your risk, you wont get that time back and you may be stuck with a lemon. BA become mentors? but are they good mentors.... Not bagging all BA but clearly there are risks associated with using BA.

Just my thoughts

MTR

 

Unless they were selling you Sydney in 11-12....ever BA has been a star !

 

Although I've never used a BA, I've always thought that when a deal was presented, I'd want to be armed with the market knowledge to know it was a good deal. To look at the numbers presented, price, yields and see how it stacks up to comparable sales etc.

You're paying for a service so you have every right to ask questions and challenge the deal presented if it doesn't look right. Either your concerns are addressed by the BA and resolved or they remain unanswered and you move on to the next deal.

If you don't feel it's a good deal, then you have every right to refuse. It's your money. If the BA wants to take it personally, then so be it.

If I was spending circa 10k on a BA, and 500k on a property. I'd definitely be asking questions, looking at comparable data and doing whatever i could to ensue it's a good deal. Not just taking someones word for it. And if the BA couldn't substantiate what they're presenting. I'd be gone.

 

Hi guys,

Thanks for all your comments. I really appreciate it because they confirm my original thoughts that me, as a client, should be treated respectfully and have every right to question a valuation.

I don't want to disclose the BA's name on this forum. I think that would convert this thread to a public argument between myself and the BA and I don't think that's the purpose of this forum. However I'm happy to share in private my experience with this agent. Several participants in this thread are already aware of who the BA is.

In summary, I'm very disappointed because U was honest with the BA and treated then respectfully over the whole find. At the same time I'm very happy that my initial fee was fully refunded. Me and my partner have learned the lesson - always question and ask about their previous deals.

 

Nobody cares about your wellbeing more than you.

 

Spot on! I just bought a property in Brisbane using services of @Andrew Allen and I couldn't be happier. It was well worth it!

In saying that, I would have to agree with @Barny. Until the time we start doing all the hard work ourselves, we won't be real investors.