Why use a Professional Buyers Agent’s help when you are looking to spend $300,000 up to Millions of dollars of your own money?
As HPS Buyers Agents, we have seen and heard it all from buyers, regarding the numerous mistakes they have made in the past.
Unfortunately, these mistakes have cost buyers of Real Estate many thousands of dollars, and have undoubtedly contributed to significant amount of stress, ill health and yes we have seen where making the wrong or uniformed decisions regarding property investment have even broken up families. You may be sitting there right now reading this thinking ‘This would never happen to me.....’ but let me tell you that these people thought that too. Don’t be fooled – It can happen to you too!
We emphasise the importance of getting the buying decision right when investing in real estate. We find it interesting that about 96% of all sellers use Real Estate Agents or other property specialists when selling their home, whilst less than 2% of purchasers use professional Buyers Agents when buying Real Estate. The irony is that many more problems occur when purchasing (as apposed to selling) real estate.
As the seller employ’s a selling agent to sell their property - here are a few reasons behind why you should use a selling agent:
To get the highest price possible from the buyer
To get buyer’s emotionally attached to the property before they submit an offer, this way they have already purchased the property in their own mind.
To get buyers driving from one open home to the next. It has been researched that people do things subconsciously and the subconscious mind is a very powerful thing. A perfect example is: the more people think someone else wants to buy a house, the more buyers want to buy it (the ‘rent a crowd’ saying). Based on my experience in selling real estate – this definitely works!
Buyers end up so frustrated and sick of the whole process they will end up settling for less than they had planned and pay more for it.
Selling agents know that if you pay your deposit up front when placing offers then you are 82% committed to the buying decision. The more deposit paid the odds go up even more.
To ensure the standard and special conditions on the contracts are in the favour of the sellers at all times, not the buyers.
Sellers need to be able to continue to work and going about their everyday lives whilst trying to sell. Selling a property can be very time consuming and interruptive.
You can not ‘sell a secret’ and sellers need to have their property listed where buyers can find it. The major website used by buyers in Queensland when searching for real estate is www.realestate.com.au. Only Real Estate Agents have access to list property on this site, it is not open to Private Sellers
Now let us reverse the rolls.
Professional Buyers Agents are employed by the buyers of Real Estate to represent them (the buyer) only. This works in the complete opposite way to a selling agent.
Further down I will explain how to choose your buyers agent and what to look out for when engaging your buyers’ agent.
Here are the Top 15 reasons behind using a Buyers Agent:
First and foremost: Buyers Agents never work for the seller.
To take the emotional side away for the buyer, so the selling agent can not use this against the buyer to get them to pay more
To prevent bad buying decisions made by unrepresented buyers, such as buying properties with easements or encroachments that may adversely affect the property e.g. flood-affected land; adjoining land held for future infrastructure projects; new roads or tunnels; city or water views that can be built-out by unexpected development. All of this is researched by your buyers’ agent as they have access to research and data that is not publicly available. This helps to take the guesswork out of buying property and makes buyers that are represented by a buyers agent a step ahead of others buyers as they well informed buyers and are not ‘buying blind’.
To do all the running around - looking, inspecting and researching properties that may suit and ruling out the ones that would have wasted your time. This gives the buyer back their evenings and their weekend family time, as family time is a very precious thing these days.
Buyers without a Buyers Agent on their side will often miss out on the good properties because they have to wait until the open house on the weekends or after they finish work to inspect it – only to find that that the property is already under contract.
In a rising market, if buyers keep missing out then it takes longer to buy and as the market does not wait for anyone, the buyer ends up paying more and more and in turn this means your mortgage and repayment rise as well.
Because your Buyer Agent researches properties every day single day and have done for years, they have developed good relationships with local Selling Agents. We have access to properties as soon as they’re listed for sale and often before they’re advertised. Your Buyers Agents aim is to provide buyers with the first choice of properties that will be in high demand.
In a slow market, your buyers’ agent may need to educate the selling agent and the sellers on what the ‘market price’ of the property is. Sellers are usually delusional and behind the market conditions and still want the best price for their property (which is usually well above what it is worth!)
To ensure the Buyer never pays more then a property is worth under any market conditions.
To purchase the property at the lowest possible price.
To ensure the contract conditions and special conditions are in the buyers favour, not the sellers.
To ensure the buyer places minimal deposit down, only after the sellers has agreed on the contract and not before.
To give you help and guidance after the property is under contract, making sure all conditions on the contract are met on time, liaise with your lending institution and Solicitor, attend building and pest inspections for you - this way you do not have to take time out from your everyday lives to attend to the details
Your Buyers Agent should attend the pre settlement inspect as they have the written report and took the photo’s for you when the property was first placed under contract and will know if something is missing or damaged since then.
There is a lot more things your Buyers Agent does when looking after the Buyer but we would be here all day, the above are just the tip of the iceberg!
Things to consider when choosing your Buyers Agent
Truly independent:
They should not receive any kickbacks or commissions from real estate agents, developers, and insurance or property management companies. Nor should they have a vested interest in, or receive kickbacks from Finance Companies – Their sole source of income should be from representing buyers of Real Estate
Business Focus:
Should solely be focused on buying Real Estate and helping buyers when they are buying Real Estate.
Fees and Charges: Fees calculated as a Commission or percentage of buying price is not in the buyers’ best interests – why should they get paid more, the more money you spend? Best practise is a professional fee stated upfront in writing before signing the PAMD Form 22a ‘Appointment of a Real Estate Agent – (Sales and Purchases).’ This Queensland Government prescribed form is legally binding and must be used when acting for buyers or sellers in a Real Estate transaction.On this form, there should be nothing placed in the commission section.
Referrals:
Some companies pay for referrals, which takes place in all industries and there is nothing wrong with this practice, but make sure that this referral fee is not being adding to the price you are paying. E.g. lets say without referral you would be quoted $8,000 but as the company who referred you charges a 20% referral fee then you would be quoted the $8,000 plus the 20% ($1,600) which means your quote will be $9,600. Why should you pay that much for an email or a phone call from one party to another? - Just something to be wary of. The average referral fee should be $100 - $500 and should be absorbed by the company, not paid for by you.
REIQ:
All Buyers Agents in Queensland should be a member of the REIQ (Real Estate Institute of Queensland)
REBAA:
Best practise is for a Buyers Agency to be a member of REBAA (Real Estate Buyers Association of Australia). All Buyers Agents have the opportunity to become a member just like REIQ but they must meet the strict code of conduct and ethics upheld by REBAA. You can visit REBAA, www.rebaa.com.au to find out more. There are other associations and memberships - some have no membership requirements only that you pay your fees every year, and there are others that only allow 1 company per state to join - this does not mean they are the best.
It is not all about the Agency:
When choosing which company to use, it should be about the Buyers Agent who will be looking after you. Yes, most offices work as a team but only the Buyers Agent that you are working closely with will know everything about your needs and requirements and understand your personal Property Goals.
So, how do you really choose who the best person for the job is?
It is actually very simple – Here are a few questions to ask yourself.....
Do they have the service that best suits your needs, not their own?
Have they given you help & advice before you have become a client?
Did they listen to what you wanted and explained if your expectations are achievable or not?
Did they give you different alternates to think about?
Were you able to access information out of normal office hours?
Did you have a ‘connection’ with the Buyer Agent that you will be working closely with?
Did they tell what you wanted to hear or what you needed to hear and what would be best for you based on your requirements?
Do you think you can work closely with that Buyers Agent?
Did you get the feeling that they understand your requirements and short and long term property goals?
It is not always about the cost of using a buyers Agent - it should be about what will it cost you not to use a Buyers Agent. Just be sure you are not paying for the big flash office in the most expensive suburb as the best Buyers Agent should be spending more time in their cars, out on the road, researching suburbs, speaking to agents and inspecting properties.
Hot Property Specialists Buyers Agency hope that this information can help you now or in the future, when you are looking to buy Real Estate in South East Queensland.
Please Note: this information is to be used as a guide and at all times, when looking to purchase Real Estate you should use more than one source to base your discussions and you should consult you financial advisor as they will know your personal circumstances. We also recommend you engage the services of a Solicitor to aid in the legal side of the transaction.
Disclaimer:The information contained in this article has been carefully compiled and is not intended to be treated as a warranty or promise of the correctness of information.
Copyright Hot Property Specialists Buyers Agency 2009
Dear Liz,
We would like to thank you for your Gold Level Service, which was Gold for us. As you already know but the people reading this Testimonial do not, we live interstate and trying to buy...
uted to significant amount of stress, ill health and yes we have seen where making the wrong or uniformed decisions regarding property investment have even broken up families. You may be sitting there right now reading this thinking ‘This would never happen to me.....’ but let me tell you that these people thought that too. Don’t be fooled – It can happen to you too!
sly and the subconscious mind is a very powerful thing. A perfect example is: the more people think someone else wants to buy a house, the more buyers want to buy it (the ‘rent a crowd’ saying). Based on my experience in selling real estate – this definitely works!
the ones that would have wasted your time. This gives the buyer back their evenings and their weekend family time, as family time is a very precious thing these days.
in writing before signing the PAMD Form 22a ‘Appointment of a Real Estate Agent – (Sales and Purchases).’ This Queensland Government prescribed form is legally binding and must be used when acting for buyers or sellers in a Real Estate transaction.On this form, there should be nothing placed in the commission section.
