Many prospective property investors fail to follow through in making a purchase due to their fear of “getting it wrong” and not having the confidence that their own research and negotiating skills are adequate.
One method of addressing this is to engage a property expert, commonly known as a Buyer’s Agent.
What is a Buyer’s Agent?
In summary a Buyer’s Agent is used by a purchaser to represent them when purchasing a property.
What services do they provide?
A Buyer’s Agent can help you locate a range of suitable properties that you are looking to purchase based on the instructions you have given them, they can profile or review properties you have already selected and are looking to purchase, they can represent you and bid on your behalf at a property auction or negotiate on your behalf when making offers on a property.
What are the benefits of using a Buyer’s Agent?
- A Buyer’s Agent should have a greater understanding of the markets you are looking at – therefore resulting in a greater understanding of the market value for properties you are looking at.
- A good Buyer’s Agent will hopefully prevent you from paying too much for a property.
- A good Buyer’s Agent will have a number of contacts/networks with real estate agents in order to get access to properties, sometimes even before they are listed on the market for sale.
- A good Buyer’s Agent will also be an excellent communicator, a skilled negotiator, researcher as well as a professional who can act quickly.
How much do Buyer’s Agents charge?
Everything is negotiable, however it is common for a Buyer’s Agent to charge a retainer as well as a scale of fees depending on the purchase price of the property. This may vary between 1.5% and 2.5%, depending on the size of the transaction.
Should you always use a Buyer’s Agent?
Not necessarily – if you feel you already know the property market in the area you are looking to purchase, or if you think you possess excellent negotiating skills a Buyer’s Agent might not add a lot of value. You also need to make sure that if you appoint a Buyer’s Agent, that they can provide you with references/testimonials of clients who have used their services.
Remember, the cost of a Buyer’s Agent is added to the cost of your property purchase and will therefore impact your potential return.
Ideally a good Buyer’s Agent will help you find an investment property with excellent future growth and/or income prospects, help you make sure you pay an acceptable price and save you a lot of time and stress with the transaction.
I have used a Buyer’s Agent in February 2013 and found the whole process extremely worthwhile. The research I received (and still continue to receive) was very detailed and timely, he was a great communicator who moved quickly when opportunities presented themselves and did all the negotiating on my behalf.
Just remember – using a Buyer’s Agent does not guarantee success, but a good Buyer’s Agent should help you optimise your property investment prospects.