What Does A Buyers Agent Actually Do?
What does a buyers agent actually do and are they worth the money it costs to hire them?
Hey guys, Ryan here from onproperty.com.au, helping you find positive cash flow property. And today, I’m spending the day with Ben Everingham from Pumped on Property and we’re just going out to get some food at the moment. But I thought I would take this time to make a quick video for you guys and to ask Ben, what exactly is it that buyer’s agents do? You know, people pay buyer’s agents to help them buy properties and stuff like that, but at the end of the day, what do they actually do? Why are they paid for? So, I thought the best person to answer this would probably be Ben who is a buyer’s agent and does it every single day.
Ryan: So, what do you do?
Ben: I’m going to try my best to not crash the car while I give a bit of eye contact here. It would seem right now that what we do is lunch because it is a Friday. This is probably the first time I’ve actually been out for lunch in a month, so it’s awesome.
In terms of what we do as a buyer’s agent, I would just give you a sort of run down of what an average week would look like. Monday, the whole team is in the office. We’ve just stopped at the lot, guys, so it’s all good. Monday, we jump into the office together and go through the weekly goals, the weekly feedback. Then, I’d sit down with the property acquisition team.
They’re the guys that go out and physically look at all of the properties on our clients’ behalf. Let’s say they inspected 20 properties the week or 30 properties the week before, we’d go through every single one of those properties against our checklist and identify the best properties that we are now going to send back to our clients. So, the Monday is spent really going through the deals and seeing what’s on offer and seeing what options have come up and seeing what new properties are up, what properties sold over the weekend. And that’s a pretty full-on research day.
Tuesdays and Wednesdays for me are spend talking to new people. People that are interested in a strategy session and those sorts of guys that are sort of thinking a little bit about what they’re trying to do and want to understand how to do it a little bit more strategically, I suppose. So, in that session, we really talk about your goals and where you’re looking to go and where you’ve been and your current investment strategy and I might throw in some ideas around how we can tweak that. A thing to get you there a little bit quicker.
Thursdays, again, I spend with the acquisition team and filming videos and doing some fun marketing stuff. And then at Friday is generally spent speaking with all of our clients and getting feedback and getting all the deals across the line. Pretty action-packed week.
Ryan: So, basically, you spend your time either talking with new people or you spend your time looking at properties and qualifying properties for existing customers and stuff like that?
Ben: Exactly. Pretty much speaking to people and helping them get a strategy and then we buy at least 15 properties a month and it looks like we’ll buy about $60 to $100 million worth of property this year for our clients. So my life is just looking at, inspecting and churning through as many properties as possible until we find those little snippets of gold, which do exist.
Ryan: So what do you think a buyer’s agent does differently to what a normal person would do or like when you’re inspecting the property, when you’re researching, what makes a buyer’s agent different to someone doing it by themselves?
Ben: There’s all sorts of different buyer’s agents out there, so I’m not going to comment on everybody and what they do. But in terms of us, from a research perspective, as team, we sit down 4 times a year for a full day or 2 days and literally identify which suburbs and which markets we’re going to target for the next 12 months. For example, in Brisbane, we’ll sit down and review every single suburb in Brissy and compare apples with apples.
There’s about 35 key performance indicators that are important to us from a suburb. Simple stuff like rental vacancy rates way through to more complicated stuff like sales history data and days on market and all of the things they look at in a DSR score, etc. So, understand what we’re buying is super important. And then, what was your other question? Sorry, I’m driving
Ryan: It was just what you do differently. So, obviously, at the start you’re doing massive research on lots of different areas, which people might not do. They might just choose one area and go with it or not even research at all. They might just go and really say and be like, “That house looks nice.” So, obviously, at the beginning, you choose your areas and you choose your suburbs very strategically based on the ones you think are going to perform the best. And then, when it comes to inspections, how does a buyer’s agent inspect a property, deal with the real estate agent, etc. differently or better to what a regular person would do?
Ben: Sure. Sorry. So just to re-confirm there. In terms of the research side of things, I suppose 80% of the future value of your property actually comes from the suburb that you purchase in, not the property that you buy. So suburb identification is the key and that’s the number one thing that we specialise in. Once we get to a point we’ve identified the suburbs, we are obsessed with the data.
So looking at how that suburb’s been performing and potentially will perform and then we really get deep into the sales history so we know every single opportunity and property that’s sold in that suburb in the last couple of years and go – 3-bedroom, 1-bathroom houses sell for $400,000 un-renovated, but 4-bedroom, 2-bathroom houses renovated sell for $550,000. When over that time we’re going to cost our client $50,000 to do the reno and they’ve just made $100,000. So that’s powerful as well.
Once we actually get to inspecting properties, we’ve got a 100-point inspection checklist that we use for every property that we inspect, which provides our clients with a 5-page report on every property. Looking the inside of the property, the outside, the street, the strategic questions. Because we buy so much property, in every suburb, there’s about 3 agents that sell 90% of the properties.
So we’ve got extremely tight relationships with those guys and every couple of weeks, we brief them in on what our clients are looking for and we just touch base with them to see how everything is going. A big part of all of that sort of stuff is just those agency relationships.
I’m not sure if you can see out the window of the car, but we’re in my favourite street on the Sunshine Coast for bars, cafes. This is Ocean Street. Going to take Ryan from some vegetarian lunch and it is an awesome little place for anyone that ever gets up here.
Ryan: Yup. I’m a veggo. So if you guys, if you’re not going through 100-point checklist when you’re inspecting property, you’re probably not doing as much as a buyer’s agent would. If you’re not looking at all the potential suburbs out there, you’re probably not doing as much as they would either. Buyer’s agents aren’t for everyone. Obviously, if you want to do it yourself, then that’s great.
It’s a great skill to learn. It’s a great thing to do. But if you are someone that wants help, then getting a buyer’s agent who is someone that doesn’t have conflict of interest because you’re paying them. But then, also, they’re doing all this work for you. So they’re helping to find the good suburbs. They’re helping to set decent strategies like the properties Ben was talking about where you could do renovations and get some extra equity and things like that. And then, when they inspect it, they’re doing thorough inspections.
I’ve been to inspections before and not known what to do or what to look for and you’re just kind of like, “Oh, that was a nice house.” and you forget about it. But then, Ben and his team are going through and checking everything that you probably wouldn’t check. So you just get so many more qualified properties and get rid of the crappy ones straightaway.
Ben: Honestly, I think we would literally look at a 1,000 properties online. Probably, I think, even in the suburbs that we know that offer great property, inspect 30 of those. And of those 30 properties, we would only actually buy 1 or 2 for our clients. It is insanely amount of churn that you’ve got to go through to actually find something that will make you money in the short term, medium, and long term. That you can actually manufacture some value into and also get that above average rent return, which we’re all chasing, of 6%, 7%, 8%.
Ryan: Yup. So it’s not an easy job being a buyer’s agent.
Ben: It’s a lot of fun, a lot of stress. I probably lost like 5 kilos over the last couple of years.
Ryan: And some grey hairs?
Ben: My body looks like rubbish, but I love this stuff. I’m obsessed with property and it’s a lot of fun as well.
Ryan: Alright. Well, let’s go get some lunch, hey?
Ben: Let’s get some lunch.
Ryan: Let’s get some lunch. Alright guys, peace out from me. If you are interested in working with a buyer’s agent like Ben or you’d like to get on one of those strategy sessions, Ben does offer them for free to On Property listeners, watchers. So head over to onproperty.com.au/session to check that out. We’re just going to go ahead and grab some lunch. I wish you the best today and until next time, stay positive.