Is a Buyer’s Agent worth it?

Discussion in 'Property Experts' started by jinx77, 27th Aug, 2019.

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  1. sash

    sash Well-Known Member

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    Anyone who has built significant wealth has not used BAs. Maybe the initial purchases. By all means do that...but you need to learn the tricks of trade to develop significant wealth. In some cases some BAs have actually hamstrung clients by buying properties and concentrating in one location (i.e. Logan....Detroit.....etc). People are not managing risks if everything goes pear shaped in a particular market. Concentration risk...is huge downside in major downturn.
     
  2. Willy

    Willy Well-Known Member

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    BA's come into their own when purchasing interstate......to avoid concentration risk.
     
  3. jinx77

    jinx77 Well-Known Member

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    So I hired the BA for negotiation only ( he has dozens of perfect reviews online from happy clients) and he’s already paid for himself. He came to look at a property I was wondering putting in an offer for and could tell within 5 minutes that it had structural issues and wasn’t worth it. Really glad I have a BA now and considering paying for the full package as he clearly knows his stuff and has my best interests in mind. If I had a friend or relative who knew about construction and renovation then I wouldn’t need a BA, but I don’t have relatives who are knowledgeable enough to guide me in the right direction so the BA is worth it for me!
     
  4. Codie

    Codie Well-Known Member

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    May I ask where you purchased?
     
  5. sash

    sash Well-Known Member

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    Nope........
     
  6. Sackie

    Sackie Well-Known Member

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    BAs definitely have a place in the wealth creation world imo.

    The important thing is to understand how they can help add value to you in certain circumstances.

    And above all, BAs should never be a substitute for an investor to know nothing about RE investing and handing over every decision to a 3rd party. That's a big no-no.
     
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  7. Willy

    Willy Well-Known Member

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    If I wasn't using a BA at the moment I'd end up buying my next property in fairly close proximity to where I live because I don't have the time to do the necessary due diligence, research and ground work further a field.
    So I have a PPOR and an IP already in the same general region and to buy another property in the same region is concentrating risk. Even to go a bit further a field I'd still be concentrating my risk in the same state. By using a BA I can spread my risk over the whole country if I want to.
    I agree a BA is no substitute for increasing your own knowledge. Extra knowledge can certainly be gained but extra time can't and if you don't have the time to execute your next purchase from interstate then all the knowledge in the world is of no use to you.
    Everyones situation is different.

    Willy
     
  8. Patrico1966

    Patrico1966 Well-Known Member

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    I have used a BA twice- The first property I would not have picked but I did buy it and made good money when I sold. The 2nd property wasn't so good and needed nil research from the BA as I had spotted that property myself in research but had already signed the contract. I have not sold the 2nd property but wont lose on it. So all in all I believe I have come out in front. I probably wont use a BA again though. One of the factors that influence your potential for profit is the state of the market at the time you want to buy. For e.g in the Perth market now you would not need a BA, it is a buyers market.
     
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  9. Eric Wu

    Eric Wu Well-Known Member Business Member

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    depending on what you are expecting from a BA, it is not cheap to employ a good reputable BA, but need to look at how much value you could get from the BA service, rather than the cost.

    often re the value, good BA can spot the potentials of a particular property, knowing the council regu ......
     
  10. Mavis

    Mavis Well-Known Member

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  11. Dan Wood

    Dan Wood Well-Known Member

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    Really... I used to live there, where abouts if I may ask?

    I probably wouldn't purchase anywhere there unless it's pretty much right on the beach.
     
  12. Mavis

    Mavis Well-Known Member

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    haha fair enough.. we aren't on the beach..we're on the slight uphill-side of shellharbour road looking into warrawong. it's access to convenience and we get a little view of water.. a little bit of hills on the horizon and great breeze through on a lovely day.

    at the time of purchase, we bought into an area within our budget and our BA found us a property that met quite alot of what we wanted :)
     
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  13. Lisa Parker

    Lisa Parker Well-Known Member

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    Being a buyers advocate, I am clearly not an objective point of view, however I do see a lot and have learnt a lot about buyers over the 15 years I have been working as an advocate.

    I will dot point with as much transparency and objectivity I can

    • Some buyers are amazing and do not need a buyers agent. They are competent in all aspects of searching, inspecting and negotiating a property
    • - Many buyers make so many mistakes they don't even realise because you don't know what you don't know
    • - Are buyer advocates worth it, it depends on the advocate. I have seen some that do not do anything to add value, so assuming you get a decent advocate, chances are they purchase 5-8 properties every month, look at 20 houses a week and will be far better positioned than a person who has never purchase a property before.
    • - The real estate system is designed to benefit the seller. The technology and processes are designed to gain maximum exposure, more bodies through the door to create competition and then the vendor and agent control the proceedings in the way that will get the vendor the very best outcome. The process favours the vendor.
    • - selling agents are in training weekly - they are already good at their job, but still continue to up-skill and train so they can increase the ways they add value to their client (the vendor), are you equally positioned to compete against that and have a fair match (some buyers are, many aren't)
    • If you negotiate daily in your job, love negotiating or understand the different ways selling agents will work to get an advantage on you, then you can probably handle the negotiations yourself.
    • If not, you will likely cost yourself $30K-$40k (based on what I have seen of first home buyers and knowing the intimate details of many sales campaigns)
    • There are many ways an advocate will add value, it depends on what you need the most help with
    • People say you should do it yourself to learn, I have seen clients learn more by walking the path beside a professional because learners often miss the learning opportunities unless there is a pretty big error, then they realise there was something to learn.
    • Seeing an expert handle things and explain what is happening short cuts the learning curve. If you don't want to hire an advocate, perhaps have someone guide you with a lot of experience so you can learn from them

      Lastly, the first thing that is concerning me is your asset selection for the areas you have mentioned. I would want to dig into that a lot deeper and ensure it is the right area and asset for what you are wanting top achieve.

      A strategist buyers agent will be able to assist you with that analysis, whereas a regular buyers agent will just source the asset you determine you want.

      A strategist will come at a higher fee than a regular advocate, however you are more likely to set yourself up to build a portfolio rather than approach it in an adhoc way that may limit your capacity to grow beyond 1.
     
  14. BuyersAgent

    BuyersAgent Well-Known Member Business Member

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    Thanks so much for your kind words Mavis! Great reno by the way, thanks for letting me come have a sneaky look! You were both such a pleasure to work with. I doubt that view will ever get old and hope you have many happy yrs in that place.
     
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  15. Steph Hon

    Steph Hon Member

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    I've been into property for 15 years, usually did my own research. I had 2 deals where I paid the agent. Basically, I asked an agent to door knock on a street for me as I wanted to buy there. I paid over $50k for 2 properties but I didn't get the feeling that the agent was working for me. Especially when he said one owner wanted $1m for his place when it's the worst location on that street. I bought a couple other properties but a couple months later he said, how about $800k? I can't work out if he was trying to sell the block for $1m so he can get more commission as he charged a % of purchase price.

    After those 2 deals, I got into real estate myself. I feel like the industry is lacking trust worthy real estate agents.

    Besides, my company help people look for property for free- that is, we ask the listing agent for a small part of his commission (called conjunction).

    Of course, we can't provide this free service to everyone because it is very time consuming and sometimes the properties are not listed on the market yet. I usually only work with people I know or friend's referral.

    Maybe you can ask a local agent to look out for properties for you.

    BA may be a good idea if you are interstate. Even then, the question is finding someone who is trust worthy instead of an agent just wanting to make the commission quickly.

    Good luck and have fun.
     
  16. Travelbug

    Travelbug Well-Known Member

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    I used a buyers agent to start. I never would have had the confidence to buy multiple properties by myself. I would have bought one a year at best and would have gone into the last Sydney boom with less than half the properties I owned. We never thought of renos when the BA suggested a rundown house to us (affectionately known as the nicotine house). We bought it and made a 20% equity gain after a 5 week reno. We liked the idea so did more.
    I'm pretty sure I'd still be working if I hadn't used a BA to get me started.
     
  17. Gen-Y

    Gen-Y Well-Known Member

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    IMO - Buyers agent are worth it. I would only pick the best for the job.
    I am not paying peanuts for them, why not get the best BA.
    Their knowledge and skills are worth $10k alone for such a big investment of your life time.

    PS: I have used them twice as I am time poor and hate the crap you need to deal with.
    BA and their lingos between themselves.

    Set unrealistic demands, and let them work hard for the money.
     
  18. Richard

    Richard Active Member

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    How much did you pay for the BA?
     
  19. TheRayTracer

    TheRayTracer Well-Known Member

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    What are peoples thoughts on the following:

    "I think the auction could have spiralled out of control but didn’t because he [Buyers Agent] was controlling the bidding."

    $50k ‘hidden cost’ stinging homebuyers
     
  20. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    I think in some scenarios this would be an accurate statement. I have seen buyers agents or individuals who know what they're doing intimidate others out of bidding and thus secure a property for less than it might have gone for.

    In a rational auction, it wouldn't make a difference. Everyone would know what their maximum price is and they'd all bid up to that, then stop. But that's not what always happens.

    I've also seen some examples where a BA paid significantly more than what was needed to secure the property. There was an auction in my street about 2 years ago where the property was passed in to the BA who then spent all of 3 minutes negotiating to the buyers limit, about $100k more than the vendor would have accepted. Needless to say I'm never recommending that BA to clients.

    Overall I think the BA service is a very valuable one, but like any industry there are those who are good at their jobs and those who aren't. When engaging a service provider, the first thing a consumer needs to do if figure out which provider is going to be the most appropriate for their needs.
     
    Last edited: 18th Nov, 2019
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