Interstate buying experience

Hi all,

I am currently looking to buy a property in Brisbane and as I am based in Melbourne, considering using a buyers agent to make my life easier. (I have a full time job in the IT sector, so can only make it a weekend pursuit)

However before i contact any buyers agents, i wanted to see what peoples' experiences have been buying a property themselves interstate. How many trips did you end up making interstate, what issues did you typically get, what tools and information other than PC did you use to make an informed decision and ultimately was the hassle worth a) saving an additional 10K+ and b) the fact that you were completely committed to your cause while a BA might have multiple clients they will be busy with.

What would you do? Thanks for sharing.

P.S: Thank to the posters on PC, I have had some direction and i am considering the Moreton bay areas: Radcliff, Deception bay and leaning the most towards Brighton which might be too far out from my budget. Budget wise can spend from 250K to 400K and most comfortable spending about 300K or early 300s.

 

All depends on the time you have and confidence in your ability to research/negotiate.

Personally - if I buy interstate I'm not going to do it without a decent BA.

The good thing with Brisbane is that you're spoilt with options when it comes to good BA's plenty of recommendations have already been posted in other threads.

Cheers

Jamie

 

I've got eight interstate IPs, two of them aren't great, one of which is a dog (both in Rockhampton, bought before the downturn) however the other six are strong performers. I'd never use a BA to purchase a property interstate. Once you take into account the fees, you should always be better off finding properties and negotiating yourself. This is even more true if you look at the out of pocket expenses, which is the more crucial part of investing. Usually all of the $10k+ BA fee will have to come out of your own pocket, meaning that you've just pushed back the purchase of your next property by a lot.

You'll also miss out on a lot of lessons if you outsource all the hard bits. And yes, I did say the "hard bits". It's not easy to buy interstate, but it is rewarding and it will make your next interstate purchase easier.

 

We have had someone buy from Kazakhstan - expat Aussie working over there.

Our interstate clients tend to fall in 3 distinct categories

1. Use a Buyer's Agent
2. Fly up, spend some decent time on ground and lots of time researching
3. Buy purely on numbers without even inspecting property let alone spending decent time on ground

 

Hi Gypsyblood,

Did you post under the Paul Glossop thread? It can be a minefield of information, can't it?

I guess we are pretty much in the same situation in being pretty busy in our own lives with very little time to follow through on this property investment stuff. I've always been interested in property and have been looking on and off for many years (last purchased in 2011 prior to buying again recently). I guess going with a BA, helped me buy something that I wouldn't have been able to find by myself. I wanted to buy in another state as Sydney wasn't feasible and already paying Land Tax in NSW, so QLD and Brisbane seemed to be the best option. Sure I could have flown up there and had a look around, but I wouldn't have known where to look or what to look for. Sure experience and practice will help, but Im sure I would still be researching now instead of having bought something where there are strong growth drivers and other positive aspects. Yes it costs money to use a BA, but for me, it is worth it and I can concentrate more on what I do best. Also, you do learn much more and more quickly with a mentor or BA, so you might use one for IP1 and IP2 to reaffirm that your research is spot on and then head out on your own.

Everyone is different and I hope you gather the information you need to buy with confidence.

All the best

 

I would only use a BA if you have researched areas/suburbs, done the hard yards/homework yourself because you don't know what you don't know, if that makes sense.

.......So if you do the homework yourself why would you need a BA?

I buy overseas and around Australia, I would prefer to take advantage of local knowledge, re agents, google, I like to identify areas that provide opportunity and then fly over myself. For me it does not make sense to use a BA because the information will be biased and not necessarily providing me with the best opportunities.

No one is going to work as hard as you will, your money, your risk.

 

Myself and my investment partner bought in Melbourne in 2007. I spent 3 or 4 months desktop researching and shortlisting then 2 weeks on the ground, all day, every day. Best 'holiday' ever!

The property performed ok over the time we owned it. Although, the dog suburb next door ended up performing better than ours in the last 12 months. We still dud well. I am not sure a buyers agent could have done better

 

And don't forget to check out the largest list of accredited BAs nationally over at www.rebaa.com.au
Best of luck with your impending purchase

 

I'm roaming in Melbourne with family ATM. Lots of things to look at. I think it's always good to get on ground to check things out. Once you know what you want it would be easier to brief a BA if that's what you want eventually.

 

Hi Tony! Yes I asked for your experience with Paul. I've already had a chat with him and he seems like a dedicated guy. I especially liked the bit about buying under market (if you claim it you must be? And I can verify) However what's confused me a bit is the fact that he's based in Syd. Did you find that counting when you purchased through him? Personally I love researching and exploring properties, nothing makes my day more than walking through an inspection and I've driven quite some friends up the wall cz I watch only house shows! (house nerd alert) BUT this interstate is a tall order.. And only my second ip.. So short of me landing an IT project in brisie (I'm pushing for one!) im not very confident traveling now and then will work..

But 10k is a decent amount. So I was planning on doing some research, checking if I came to any conclusions, engaging someone for the initial fee while I sort my finances and then compare my findings with theirs. If there's a massive difference in the conclusions And the value of engaging them stares me in the face, that will sell it for me.

 

I 110% agree!

 

I'm wondering if people form partnerships here.. I.e. I'm based in Melbourne and happy to check out properties someone in Brisbane might be interested in and take pics etc. while they do the same for me?

Any takers?

 

Also I don't know what happened but for some reason I only saw my own question on the thread for a few days and no replies.. Hence the late reply, sorry.. I thought I was being silently encouraged to read up before I post questions by the good people here!

 

The only thing I can think of is reading an example off of Somerset when the property twins engaged a BA and thought that it provided great learning and set them up for doing it themselves later.. I won't know what they can teach me.. And an engagement costs about 500 dollars with the full payment only if the property goes unconditional.. So I'm thinking, its worth that initial price?
Although I will have to try super hard not to let my guilt of engaging and not using push me into going with them.. IF I don't find it to be the experience I am looking for, that is.

 

I recommend you need to do enough research yourself to determine the areas in which you are interested in buying. It takes a trip or two to get a feel for an area - Irrespective of whether you use a BA.

I used a BA for both my Brisbane purchases.

If tackling the challenge independently, you may miss out on good buying opportunities that pop up at short notice ( e.g. Mid week, local competition). My last purchase was in the hotly-contested Petrie market and I was only able to secure a good property because I had a BA to do the leg work mid week when a previous buyer contract crashed due to finance.

 

Hi @Gypsyblood obviously you may elect to take my thoughts with a grain of salt as I'm a BA
(however not in QLD) but I certainly agree with @wombat777 and @larrylarry in that it's best to at least initially visit the areas of choice in person first to build up a feel (even if brief) before engaging a BA to do the legwork for you.

It's also important to understand that a BA isn't a financial advisor: as the property investment industry is so unregulated it's vital to note that any investment purchase is ultimately your decision and thus will require some groundwork/research in understanding the market, level of risk you're willing to undertake and in which areas to purchase. There is also no BA "guru" who knows the entire Australian or individual state market (despite some claims to the contrary) and is able to magically pinpoint hotspots, future growth areas or guaranteed continuing yield honeypots. As investors, we all want the utopia of rising growth/rental income and if there was a "sure thing" and it was that easy we'd all be out making $$$ on property. Like all investment classes, property is risky and requires careful thought, research, selection and strategy.

Purchasers end up using trusted and experienced independent BAs to outsource the legwork on a search, provide them with recommendations, market knowledge, experience, skills (including negotiation) increased exposure to the market (via industry contacts, relationships, canvassing etc) and ultimately a good result. Akin to selling a home, there are many valid reasons for engaging an advocate to work on your behalf. This doesn't mean BAs are for everyone- just like selling there are always those who prefer to adopt the DIY approach and also there is a cost to a BA service (unlike the all-too-convenient option of a sales agent's fees coming out of settlement funds ) In the end, it comes down to your decision to outsource and your personal circumstances.

Re: hiring a BA to search interstate. I have written a blog on this on my site (Sep 2015) so please excuse the cut and paste below but I think it's important to consider the ramifications of hiring a BA to fly up and do the work for you. Whatever you do, plan well, interview several experienced BAs (there are some great questions on www.rebaa.com.au) ensure you have references from recent clients and are 100% happy before you sign on the dotted line. Good luck

"There is a growing trend with some buyers agencies at the moment to expand their services to include other states and territories. If they have a local office and staff in that state or are a franchise business with sufficient resources I have no problem with this. However, what I do have a problem with is those buyers agents who adopt a “fly-in fly-out” approach and search sporadically for their clients, despite being based in a completely different state.

Always use a locally-based and knowledgeable buyers agent! Why some clients hire interstate buyers agents to fly from one capital city to another (at the moment it seems to be popular from VIC and NSW to QLD) is honestly lost on me and devalues the search service… The constant contact you need with selling agents as a BA is something that is vastly underrated and valued by buyers- until you’re in the game you really don’t understand how important this ongoing contact and rapport is in staying on top of the listings, as well as learning about those coming up/or off market. It’s all about constant and systemised communication when saturating any market.

A perfect example this past month- I actually flew interstate to inspect a couple of personally-owned investment properties in Brisbane and decided to take a look at some houses whilst there (I can’t help myself, even when on a break )… one agent I know well told me that he sold a “corker” of a house last Thursday, after he listed it on Monday (pics/ad made it to the web on Wed) to a local buyer who jumped on it straight away. The price offered was fair (I would have paid more myself if I was in the market) the seller was happy but he had a string of disappointed would-be buyers when he cancelled the first open house for the Saturday, including TWO INTERSTATE BUYERS AGENTS… now had these BAs been local and on the ground, in constant contact with this agent (as opposed to only contacting him on an irregular basis and flying up every few weeks or so) would it have been a different story? One will never know, however I thought it was a timely reminder of the importance of “being on the ground constantly” in a local property market.

Interestingly, another agent (whom I didn’t know and never revealed myself to as a NSW BA) was boasting about the strength of the market and some record sales he made, to yet another interstate BA, who he said “was happy to pay over the asking price and very good prices they were too”…. all in all a tad concerning actually. It seems, upon further inquiry, that the particular BA in question had a practice of flying up on every 3rd or 4th weekend, inspecting Saturdays only and making offers the same day (sometimes for more than one client at a time) The agent was, needless to say, using this example as a way of ramping his own local market- after all, if interstate buyers are paying market+++ it’s a great way to create urgency for other local buyers.

The problem I see, with hiring an out-of-area BA to do a job for you, is the tempting incentive to get the job done sooner rather than later. Unless you’re paying a BA every time they jump on a plane for you (and it adds up) or a travelling levy (or similar add-on cost) it simply can’t always be viable for them to be on the ground sufficiently in order to provide a full service. I believe that the temptation by the BA to take the easier route and buy sooner (and therefore sometimes at a higher price) may compromise the outcome and the quality of service a client receives. One of our recent client searches took 11 weeks to secure a property, with some 40+ inspections spread over a 10 week period. This included every Saturday and midweek inspections. This was the 5th house we attempted to secure for a fair price (after missing out on 4 that went above our “fair market appraisals”) and there is no way we would have done this by jumping on a plane every weekend for 10 weeks…. it’s uneconomically viable.

Hiring a BA should entail careful research, backed up by genuine references and a solid local knowledge in the particular areas of focus. Speak to the actual BA who will be conducting your search (not just the office or LIC) – look for experience, accreditation, reputation and enthusiasm"

 

It is only through years of experience that you really start to learn with some more clarity what and where you should buy based on you own circumstances. Not knowing exactly what you want and what is best for your strategy can be mis-guided with a BA. If you know what you want and are time / skill poor it may be worthwhile in connecting with a BA that specialises in that precise end type of buy.

Otherwise if you don't know what you really want and what represents a great deal the BA can lead you to a situation of telling you what is a great buy for you based on what they are good at buying which may not be best for you.

 

@Jacque

Just a suggestion for the REEBA site. The way the agents are listed is very time consuming to read.

Can you put a map of Australia and then show where the agents are?

For example, if I am looking around the Tweed Coast, I have to look in NSW & QLD. Then I need to click & read on each to see if they do that area , as name alone does not always tell me which locations they focus on.

Thanks!

 

Hi
Who did you engage with? I think you mentioned Allen in a post before?

 

That's some amazing information Jacque. Thank you for taking the time to find and post this here as this is exactly the concern I do have. This article was great and the questions are really helpful!