Why I don't use buyer's agents

Preamble (again): I posted a thread of a private conversation that I'd had with a new investor about why I buy in low socio-economic areas.
As that thread got at least some interest, I thought I'd post a similar one again where I was asked about my views on using BAs.

Again, feel free to challenge and/or critique my views!

 

I get your points. I wouldn't use one either, but I can see why they are useful to many investors. To each his own.

 

Agreed, I'm not campaigning against using them or anything like that. There will be people out there that benefit from using a BA. For example if you don't have the confidence to buy on your own, you're still a lot better off buying through a BA than not buying at all.

 

This is how I approach it too. Lady at work said they wanted to charge her some stunning figure to re-tile her bathroom. I said you could do it yourself, screw it up, and rip it all out and redo it about 10 times over before you're worse off. But at the end you'd have gained a new skill

 

When purchasing we have avoided REA as well by dealing directly with the vendor. Not always possible I know, but has been very beneficial for both parties in the purchases we have made.

 

This is my view on BAs. A good BA allows you to leverage your time and their knowledge of certain markets. I have used Bas in the past when I had no time to do it myself and for the most part I just view them as another consultant that I work with on my team to help me achieve a certain outcome. I know many experienced investors/developers who have no qualms to enlist the assistance of a BA, especially in times when they are very busy. Now that doesn't mean on every purchase, but at certain times they can definitely assist by working with you towards a desired outcome. Need to keep an open mind, imo.

 

That's exactly the way I feel!
The only time I'd ever consider a buyer's agent is if I was purchasing interstate (but I would still prefer to do it myself).

 

I used a BA to buy in Brisbane recently. Didn't have the time for numerous weekend trips to QLD, also like to save my holidays for holidays.

I visit Hobart relatively regularly so know certain parts of it fairly well. I would happily buy there without a BA. Could twist the arm of my sister to look at properties for me. Maybe my nephews / niece as well - easily bribed I would think.

Obviously wouldn't use a BA if it was anywhere within a couple of hours of Sydney.

 

@wombat777 ill be off to Tasmania next weekend...any areas to look at while on holiday?

 

I didn't know Tassy properties increase in value...

 

BA do have there place. Get early access to properties that REA want moved fast. Saying that, I guess that's why people build relationships with REAs.

 

I didn't know either but who knows eh.

 

For better quality properties, I like the area around Kingston - although that is just because I am familiar with it. I have had family living in Tas in '03. It is a rapidly growing area.

Apparently the Loganish areas are on the North Side of Hobart.

Public Transport isn't great in Hobart ( only buses ). Try to look at places close to bus routes into town. Probably not as important as the big mainland capitals. You can drive from anywhere in Hobart to anywhere in Hobart in about 25 minutes.

 

Thanks @wombat777 besides good food and scenic routes, real estate in tassie has got to be looked at.

 

@See Change is an expert on Tassie as well.

 

Im not sure how a buyers agent would be usefull when in the town I am in nearly every single house gos for auction, there is 30 people at the open on day 1 and someome is always willing to overpay.

I guess they would be handy for interstate.

 

All information you need these days is available instantly through the net. In a few hours research you can no everything about every house in the suburb and street your interested in so I couldnt justify the cost.

 

Disclaimer: Obviously I am a buyers agent However, just as selling agents aren't for those who wish to sell privately and go the DIY route instead, the same applies for buyers agents. Important to keep the following in mind (and thanks to several articles on the subject from which I've used bits and pieces):

1. A good BA is a seasoned professional on the buyer's side. They know what to look for/what to ask as they’ve seen it all before. They add a constructive, impartial and informed layer to the buying process, filtering emotion out and presenting the facts. Even if you think you know what you’re doing (and let's face it- a few weekends flying interstate DOESN'T CUT IT!) they’re doing it every day and are in the market.

2. BAs know when "to hold and when to fold" so to speak. They’re not infallible, but their experience means you have a committed champion on your side in a market that can sometimes feel like a battlefield. That selling agent may be friendly with you but the fact is that they're always going to be better friends with the vendor

3. Just as a good selling agent should help you sell for top dollar because they know the local market ins and outs, a BA also knows the specific areas they operate in, and will be able to advise you honestly and accurately (hence why it's even more important to only hire local BAs - those with the runs on the board in the areas you're looking)

4. They’ll know if a property is overpriced, has detracting surrounding features/affecting development etc or is a poor buy for a myriad of reasons. They’ll know the reality between the numbers on the page.

5. A firm grip on the past means an educated forecast for the future. And while no one can know what’s going to happen in the future market, you’re better off in the hands of someone with an informed opinion at least in the current one. Having access to data in regards to growth, yields, median, market movements (DOM, vendor discounting etc) certainly gives you a leg up compared to the average buyer as well.

6. Who do you think is going to be the better negotiator? A professional who buys properties every week or someone who enters the fray once a year or so?

Sure, not everyone can afford the services of a good BA nor may they ever need one. It's a service-based industry that is growing, however, and as more buyers utilise our services, it's clear that there's a need out there. When you're spending hundreds of thousands of dollars (or millions) having a local professional on your side can make all the difference in getting it right- though not always quantifiable in terms of the $$$ spent it's an outsourcing service that is available.

Oh ...And something else that I've just remembered and I believe is an important consideration in getting a BA involved- Believe it or not, not every buyer out there (possibly with the exception of the vast majority of PropertyChat/Somersoft members here!!! ) is ENTHUSIASTIC and MOTIVATED enough to conduct the research required to actually transact in the property market. Whilst armchair property searchers are a dime a dozen let's keep it real. You can't buy a property sitting on your sofa, and having to eventually get out there and into the physical market is not something that every buyer actually ENJOYS DOING! I've lost count of the no. of clients we've helped over the years who just couldn't be bothered attending inspections, undertaking the necessary research into the local market, buying the sales data, calling council/inspectors/solicitors etc as it was all too mundane for them, not to mention time-consuming. Each to their own but luckily we love what we do

Sorry for the rave but perhaps the above may shed a couple of differing points of view on other reasons why a BA might be a good idea rather than just saving some $$$.

 

I've used a buyer's agent for the first time and for the amount of money I paid I won't be using one again. A lot of the time my calls weren't answered and wouldn't call me back most of the time, emails weren't replied back most of the time as well, I always had to email houses to them check out and I had to follow them up. Overall I won't be doing that again.