What is a Buyer’s Agent and Should You Hire One?
ARVE Error: Mode: lazyload not available (ARVE Pro not active?), switching to normal mode
Purchasing the right property that is going to move you towards your financial goals is very important and a buyer’s agent can help you do that. But what is exactly is a buyer’s agent, what do they do and should you hire one?
0:00 – Introduction to Buyer’s Agent Ben Everingham
0:53 – In Australia, what is a buyer’s agent?
1:39 – What is a buyer’s agent quick summary
2:18 – How does a buyer’s agent help people create a successful property investment strategy?
7:46 – If you need help getting a clear strategy, get a free property strategy session https://onproperty.com.au/session/
8:31 – How does a buyer’s agent choose the best markets to invest in?
9:53 – How does a buyer’s agent pick the best suburb in a market?
12:46 – How does a buyer’s agent pick the best properties in a suburb?
14:50 – A buyer’s agent inspects the property on a client’s behalf
15:18 – What happens if the client doesn’t want to buy the property a buyer’s agent recommends?
19:44 – A buyer’s agent should be educating you on how to become better investors
20:16 – What a buyer’s agent isn’t
23:15 – The buyer of today needs to be fully educated to make their own decisions
24:27 – A buyer’s agent negotiates on behalf of the client
27:00 – A buyer’s agent should hold your hand through to settlement
28:11 – Once you own the property the buyer’s agent role is mostly finished
29:58 – Should you hire a buyer’s agent?
Success story: Simon bought his first property! – https://www.youtube.com/watch?v=HP376QV3qi4
How to choose the best property in a suburb – https://www.youtube.com/watch?v=7f0ETsKRD0U
when investing in property purchasing the right property that’s going to help move you towards your financial goals and get the growth that you want is really important and the buyer’s agent can actually help you to identify those properties but what exactly is a buyer’s agent what do they do and should you hire one hey i’m ryan from on-property comdata you helping you achieve financial freedom and today I have with me the buyer’s agent Ben Everingham from pumped on property how are you today Ben awesome mate hey very good so who better to explain what a buyer’s agent is and what a buyer’s agent does than a buyer’s agent himself and I’m not gonna ask Ben whether or not you should hire a buyer’s agent because I feel like he’s just gonna say yes but we will let you understand what a buyer’s agent is and then decide for yourself is this something that’s going to suit you or would you rather go out and do it by yourself so let’s talk in Australia Ben what is a buyer’s agent and what does a buyer’s agent do so a buyer’s agent is effectively a person that invests in property and helps other people invest in property full-time and so a lot of people go out there and buy properties on their own as you mentioned we’re a buyer’s agent is actually that bridge between you and the market and like we talked about can help you actually get the right plan in place educate you on the marketplace educate you on the process of buying a property inspect properties on your behalf help you negotiate the best possible price and then hopefully introduce you to a really really high-quality team of advisers that can become yours long term and hold your hand through that buying process okay so a buyer’s agent effectively is someone that you hire so if I’m an investor going out to invest in property I don’t know where to buy I’m scared to negotiate I can pay you and hire you to basically do that for me so help me create a strategy help me find the best suburbs help me find the best properties inspect them for me and then negotiate on my behalf is that right absolutely that’s exactly right yeah so that’s basically what a buyer’s agent is and what they do I’m going to now ask Ben a bunch of questions to talk about how they go through this process and what is it that makes a buyer’s agent different from doing it by yourself so I think first thing Ben is why is strategy so important I know that there’s there’s two types of buyers agents right there’s buyer’s agents that help people buy their own home there’s buyer’s agents that help people buy investment properties you’re the second type where you help people buy investment properties why is strategy so important and how do you help people create a successful property investment strategy strategy to me is the most important thing and for 90% of investors in the Australian market it’s the missing link so it’s kind of like getting in the car and driving but without having a destination to go to and it’s like so crazy when you think about it like sometimes on a Sunday my wife and I jump in the car and we go for a cruise and we don’t have a plan but most of the time I’m actually trying to get from A to B in the shortest period of time possible so that’s what a plan or working without a plan in the property industry is like it’s kind of like you hope that what you buy is actually helping you get into a better position long term but the reality is most of the time you probably could have got there a lot quicker by having a clear plan and a clear plan you know isn’t just a one-stop-shop for everyone it should be really really specific to your income your savings position your risk profile and then slowly and comfortably help you work through the market and to use the market to your advantage over the next five to 15 years to get to where you want to be yeah so as as we’ve mentioned in previous videos so many people invest without actually knowing what their end goal is I know I should invest in property I’m gonna go and buy a property well what why are you buying the property what’s your end goal and they’re like I don’t know just I should buy property right and that can work well and I’ve spoken to investors who have done that and ended up with five properties in a great equity position but often it happens to things like my parents where they didn’t have a plan they invested in property they didn’t know what that property was going to do was negatively geared they’re not selling at the wrong time and losing money on that property and they never at any point kind of had a oh love how is this property a stepping stone to where you want to be financially so that’s why strategy is so important so important to know where you are now where you want to go and one of the stepping stones or what are the properties you need to buy in order to get there you know I’ve said this to my brother who’s just getting started so at the time recording this I’m 33 years of age and I’ve just bought my twelfth property in 11 years now thank gosh I don’t own all of those properties I’ve sold most of them away but what I’ve learned from that process is a huge amount like I’ve made so many mistakes because the first six the seven maybe even eight I didn’t have a clear plan in place for for example the types of markets I like to buy I now know that I like to Sydney Melbourne Brisbane because based on history they perform the best at the time I would sort of buy units or houses where now I only buy houses because I know based on core logic starter houses outperform units I also know that I like cash flow and I don’t want the properties to cost me anything during that holding period and that long term I want to aim them out right so it’s you know understanding these things in creating a strategy or some rules around what I do that stops me making the mistakes that I did in the past and for my brother because he’s getting all of that strategy up front I think you know he’s going to save himself between five and seven years of all of the marking around that I had to do to try and figure this stuff out properly yeah and having a strategy can really help you narrow down the markets and the suburbs that you’re looking at I actually did an interview with Simon about him buying his first property which I will link up down below but in that he said he had such a strong criteria of exactly what he wanted in the market what’s our burbs for what price he was willing to spend and so he said it made it really easy for him to just look at properties and quickly discard ones that didn’t fit and then find great properties that he would then make offers on and I think he made offers on maybe two or three properties before he landed his property but he knew that there were opportunities in the market he just had to wait for the properties that suited his needs so having the strategy really helps you narrow your focus and to choose the properties that are going to be right for you and move you towards your financial goals rather than just buying anything and you know just hoping you end up somewhere you know there’s so many questions that people are asking at the moment talk to both you and I you know is it the right time to buy which market should I be looking at I’m feeling completely overloaded with information I don’t have a team of advisors around me and I think as soon as you get clarity almost all of those questions go quiet obviously you still feel emotional you still feel you know a little bit under pressure during that period of buying a property that’s human nature I still feel exactly the same way when I buy for myself but a clear strategy cuts out a lot of the noise because instead of looking at everything and everything counts sounding interesting there’s just one thing that you need to do and it’s very very specific which means you know all that noise goes away and that’s the biggest thing that I wish I had have known about I spent years and years and years running myself around in circles listening to so many different things when I could have spent that time effectively executing and buying a few more properties at the right time of the Sydney or Melbourne markets for example yeah and so a buyer’s agent should help you create the right strategy for you that moves you from where you are to what your financial goals are and if you do need help setting your strategy then bending the team over pumped on property they do offer free strategy session so free property strategy sessions where you can get on the phone talk about where you’re at talk about where you want to be and what sort of strategy is going to get you there so that’s an absolutely complimentary service after which you can then go and you can implement that strategy yourself or if you decide that pumped on property a good fit then you can hire them so go to onproperty.com.au/mortgage e session at a time that suits you so yeah go to onproperty.com.au/mortgage e the next thing that I want to ask you Ben is how do you then go ahead and identify suburbs for growth for your clients yes so there’s this beautiful thing called a real estate cycle and the great thing about this cycle is that sometimes areas are really really cheap and sometimes they’re really expensive now a lot of Australians at the moment have bought into the hype that the media’s been putting out which is an Australian market but the reality is Australia is you know hundreds of markets and a couple of capital cities or a handful of capital cities that represent really interesting long-term values so while you’re Sydney’s and Melvins might be in the declining phase right now because prices can’t go up by a hundred percent forever every five years like they did other places like your pervs have been declining for seven years or you’re brisbin’s for example of being almost completely flat when you factor in inflation for the last 11 years so you know while Sydney and Melbourne might not be the hot thing for the next five years in Australia people start realizing very soon that there are other opportunities outside of that so that’s where you start and you really want to nail it down to one market like a Sydney Melbourne Brisbane Perth that you feel comfortable with learning more about and then once you learn that then how do you kind of pick the suburbs from there you then want to pick the most premium area of that market so the northern beaches of Sydney or the southern beaches the north side of Brisbane or the eastern side for example and once you’re comfortable with that we then start looking at things like average household incomes average vacancy rates which isn’t extremely important to me because I want to make sure that my property obviously rents out I want to look at you know the average house prices in the area the average rent returns what the cheaper properties in the suburb are worth and what the more expensive properties are worth so that I can find some value there and I want to start looking at all of those little things like school catchment districts train stations shopping centres across a number of suburbs until I’ve got a picture of maybe three or four that I can do further further analysis on from there yeah so when you are investing in property it’s very important to pick the right suburb because some suburbs obviously grow faster than other suburbs so you can get more growth by investing in the best suburb and that’s something that a buyer’s agent should be doing for you is knowing the area inside and out looking through all that data which can be very confusing nobody has a crystal ball we can’t say that yes guaranteed this summer is going to outperform this suburb but by looking at the data of the suburb as well as two-strokes historical trends of the suburbs you can get a picture of which suburbs are most likely to grow and most likely to outperform as well as which suburbs are the lowest risk so a buyer’s agent should be doing that sort of research for you to help you pick the best suburb that is going to get you the best growth or have the lowest risk it really depends on your risk profile and how you want to invest which suburb is going to be best for you but the buyer’s agent should know that sort of stuff inside and out and should be doing that research and should be able to communicate that to you in a way that you understand as well yeah so you know there’s things that are complicated about suburb research or analysis and there’s things that are really logical that we all understand and it’s a combination of applying that data and logic to making a decision and more importantly than the suburb you’re choosing is does that suburb and the type of property you can buy in it or create in that suburb actually along with your longer-term strategic goals because we’ve all got to remember that a property is nothing more than a vehicle to achieve what we want to achieve in the future and we get really really caught up in focusing on the wrong things which is like the emotional side of investing and forgetting about the things that really matter like potential for growth in an area like cash an answer you get where you are to where you want to be sooner rather than doing what most people doing waiting 30 or 40 years to achieve what they should have achieved a long time before that yeah so once you pick the suburbs how do you then go about identifying what the best properties in that suburb are for your clients sure so we as a business believe that based on history houses outperform units and so we’re always looking for well located houses in the middle to most expensive pockets of the suburbs in nice quiet streets close to the schools close to the train stations I like to buy it either walking distance to the beach for our clients or within 20 or somewhere between 10 and 25 in the CBD because Michael Mateus its analysis of history in the last 10 years in Sydney Melbourne and Brisbane shows property closer to the city perform better than properties further away and then we want a nice big piece of land with a well located lower maintenance house that might have some upside in the future either through cleaning it up if you want to do that or potentially putting something like a secondary dwelling on the back in the backyard yeah and so I know because I’ve been in the offices with you guys I’ve been on the road with you guys how you look at a suburb and how you analyze the suburb and look at where the main streets are to avoid the main streets look at where the train lines are to avoid the train lines just all so many little things like that and we did do a video on how to choose the best property in the suburb which I’ll link up down below where we talk about your entire process and how you go about doing that but that’s another thing a buyer’s agent should be doing for you is picking the right properties within that suburb and I’ve been on the road with you guys inspecting properties within a suburb we’ve gone to see a property which we thought was good and it ended up being too close to the train line and we could see the train station from the property and so then it got scrapped and the mental map of what the suburb looks like then changed for your company and you knew that properties within that Street we were now going to avoid because they were just too close to the train line so over time you guys learn these sorts of things and you’re able to more accurately find those properties for your clients so once they find once you find a property within a suburb then a buyer’s agent will go ahead and inspect that property on the client’s behalf I know that you guys go through a checklist which provides clients with a full report of that inspection what you thought about it where the opportunities were etc so you want to look for a buyer’s agent who can provide you with quite accurate and detailed feedback as I know you guys do talking about the process of working with a buyer’s agent now what happens if you inspect a property for a client you send them through the report and they decide look I don’t think those property is quite right for me yes so obviously there’s the things that are important to us from a numbers perspective and there’s the things that are important to a client and before we even start talking about market suburb or property that’s what we’re trying to align you know the expectations around what’s possible in the market plus aligning our goals and there’s because there’s a lot of things that people that don’t do this every day miss you know what you didn’t say is that reports about 150 points long there’s just so many things that the average person that doesn’t get to invest every day misses and so you know if there’s a property that we really liked from a data perspective that the client doesn’t like that is completely flying it’s their money their decision what we do is we put that property aside and then next week we start inspecting more properties and and that is so common because you know a good buyer’s agent shouldn’t just be forcing a property down somebody’s throat they should be actively working with that person to learn more about what’s important to them and then slowly and cautiously over time get them the right outcome we’re unfortunately so many buyers agents in the marketplace just give people one option or two options and then really put pressure on them to close now two examples of that in Brisbane that I’ve seen literally in the last month one of them was from one of the biggest buyers agencies in Melbourne that also has a huge online profile we inspected a property which we thought was priced at $400,000 in terms of absolute top of market value they just communicated with the agent over the phone from their Melbourne office and then we found out that they paid four hundred and fifty five thousand dollars sight unseen for a property that was actually worth four hundred K and that sort of thing is just you know unfortunately having in the current market places companies that don’t naturally reside in a market are coming into it because the place that they’re being able to do business isn’t working anymore and you just got to be really really careful with that like making sure your buyer’s agents on the ground physically inspecting properties and doesn’t just have a relationship with an agent which is how much should we pay cool it’s you know really doing the right thing by you and making sure you get the best outcome yeah so I wanted to make that clear that if customers or if they’ve hired a buyer’s agent and if they’re not happy with the property they don’t have to you don’t buy it it’s about my property yeah and one that you feel comfortable with buying that suits your financial needs and as I think you explained it so well about getting mixing the data and what looks good from a data perspective with what the client wants finding a property where that matches and their client feels happy and as you said it’s their money it’s their investment they’re making they’re ultimately making that decision and I think that’s something really key a buyer’s agents there to help you and facilitate you to buy a great property but ultimately it’s your decision what you buy which means you should do your due diligence on what the buyer’s agents presenting you as well and it’s not that hard to check previous sales history for a suburb and see how the property compares to other properties in the suburb and to do your checks yourself because it is your decision ultimately it’s not the buyer’s agents decision what you buy so let’s say those I think they’re brave before we move on that I’m sorry to hijack that but I you know before we even talk about property or start inspecting we send people every single sale in the suburb over the last two years we provide the maps we provide the infrastructure we provide the housing commission Maps you know we provide properties that have sold at a comparable to the goals that have rented out that are for sale so that so much of that education with a quality agency should be done upfront before you even start looking at properties like how can a client in Sydney or Melbourne make a really solid decision just from looking at a little bit of data online like I believe that people need a proper education so that they know this suburb better than they know the suburb they’re living in and that enables them to have the confidence to take the action when the perfect property for their long term strategy comes up like I don’t think your property should just be like hey it’s week one here you go there’s so much education that goes in to feel comfortable about strategy and market first and I guess that’s something that we haven’t talked about is that a buyer’s agent should be educating you on how to invest and why a market is good yeah like if you and I’ve helped people buy over 350 million dollars worth of property there’s probably a fair bit of stuff that you know like we can pass on that can massively improve the performance of what someone else buyers and so it is a knowledge transfer in a good buyer’s agent shouldn’t hide all of that stuff they should really help someone to become a better investor so that they can next time around do it on their own with confidence can I just say something which we probably should have mentioned at the start of the video a true buyer’s agent is licensed to help you buy a property and charges your fee but there’s a lot of these people they can sometimes look like accountants they can sometimes look like financial advisors they can sometimes be mortgage brokers or solicitors and sometimes they’re just property people that don’t charge you anything upfront and that is not a buyer’s agent that is someone making a huge Commission behind the scenes selling you off the plan or brand-new property somewhere in Australia that generally performs about half as well as the average annual return in that marketplace and that’s unfortunately how 80% of people in Australia buy a brand-new product I just want to make that really clear like if someone’s saying they’re an agent to help you but they’re actually getting paid by the Builder or the developer that is absolutely not a buyer’s agent and you’ve just got to be really careful there because there’s unfortunately big Commission’s 30 to 50 grand behind the scenes which means they’re actually working for the Builder and not the person that they’re saying that they’re helping yes I think it’s very important to know that a buyer’s agent is someone that you hire that works for your interest and if you’ve got people out there that are offering new services for free it’s really important that you get clear on exactly how those people are getting paid and how much they are getting paid and for you to assess whether or not there is a conflict of interest there so buyer’s agents should be really clear on their fees and that could be a fixed fee it could be a percentage of the purchase price depending on what buyer’s agent you work with but you should be very clear on what fee you’re paying them how they’re getting paid because if they’re getting paid from a builder to sell a new-build product then they are effectively a seller for that builder not a buyer’s agent for you I see that personally as a conflict of interest it is legal but I definitely don’t like work with buyers agents who do that I don’t see that as a true buyers agent I see a true buyers agent as someone who you pay you’re completely aware and transparent of all the money that they’re making and how they’re making that money which primarily all that completely comes from you so they’re working on your behalf and they definitely have your best interests at heart so I guess that’s something to be wary of because that’s right and the summer I didn’t think of when we set out to record this video is that yes there are people in the market saying that they are buyers agents that you know even though technically they are on paper they’re probably not people that you actually want to work with yeah and unfortunately that’s how almost every brand new unit in Sydney Melbourne Brisbane was sold in the last 10 years and every new townhouse in every new greenfield estate in Australia so just be very very very careful with that stuff because the last thing I want to see is someone pay way too much more buy the wrong product because they didn’t think about strategy upfront and then that comes back to some of the stuff that you provide your clients with before you go ahead and look at properties for them which is what are the sales what are the comparable sales in the suburb what does the suburb look like etc rather than just giving them growth perspectives of what you expect the suburb to grow by saying no here’s the history here’s how much stuff sold for in the past and here’s why we think the property is worth this much and you get really clear on that I think is so important yeah absolutely I that the buyer of today needs to be fully educated regardless of if they’re doing it on their own or with someone else it shouldn’t change and I’ve unfortunately made mistakes in the past where I’ve trusted people that were very close to me and they’re like effectively like I’ve paid a buyer’s agent to find me this really really overpriced piece of land and build and I lost money and since then I’ve just been much more rigorous around strategy and the rules that I follow and really dedicated to learning so that that never happens to me again and I know there’ll be a lot of people watching this that it’s happened to unfortunately you know just make sure the next choice that you make on your own or with someone’s help isn’t like that yeah and so getting towards I guess the end of the process now let’s say we have matched up the data with what a client once and the client does want to move ahead then what happens and I’m guessing okay what I’m not guessing I know as a buyer’s agent negotiates on behalf of the client so you actually do the negotiation with the real estate agent is that correct yeah so we educate the client on what the negotiation process is going to look like and then we start the conversation generally with a lower offer and really bad terms and then the agent rejects it we come back to the client obviously it’s the clients decision so there’s no negotiation that happens without the clients approval and then we increase the price slightly with better terms and then that gets rejected and then we put in our best and final and really pressure close the agent and that generally in a market like this one results in a really good outcome but what I think it’s important before you start talking about price and negotiating is knowing what the property’s worth and what market value is so that you absolutely don’t pay anything more than it’s worth and that’s a thing because you’re working with a buyer’s agent who’s looking at multiple properties there’s so many opportunities right that even if you negotiate and the negotiation falls through someone pays more like that person who paid four hundred fifty five thousand for the four hundred thousand dollar property if that happens and it falls through there’s another one round the corner that you can negotiate on again in the future yeah absolutely there’s always another fish in the sea and for example you know we only take on seven clients a month at the moment sometimes that adds and flows but we’ve got access to suburbs with over 2,000 property sales per year that our clients have access to you know when you’re only buying 60 or 70 properties a year there are so many good ones that just sort of slip through the cracks or go to the other buyers agents or the other people in the marketplace like there is so many good deals around at the moment in different markets around Australia if you have that local knowledge to get the right result yeah and so a buyer’s agent should be good at negotiating on your behalf and I really liked what you said where it’s always going to be the clients decision to negotiate so when an offers rejected then you’ll obviously go back to the client let them know that it’s been rejected what you suggest to be the next offer and then they obviously make that decision of what the next offer is going to be and then you present that on their behalf so they don’t have to do with the agent but they get to be there definitely a big part of the negotiation and making the decisions yeah and then you know once the right property is accepted at the right price a great buyer’s agent should then hold your hand all the way through settlement process so I’m assuming that you know people have to become borderless investors over the next five years because the traditional Sydney and Melbourne is just not going to work and so you know having the right property manager on the ground in the state that you’re looking at with the right building and pest inspector the right solicitor the right town plan or a granny flat builder etc etc is just so important and all of those introductions should occur at the right time to make sure that the clients journey is really facilitated and there’s no freaking out going on at that stage scrambling on Google to try and find the right people yeah and a buyer’s agent should also help you with once you do own the property what is the strategy going to be and ultimately that’s going to be your decision as well as to winner whether you go ahead and do a renovation or build a granny flat or what it may be but a buyer’s agent should be able to help you through okay what are the options for this property what’s the potential upside for this property and then you can then as the investor decide what you want to do with the property where you want to invest your money how you want to manage it etc once the property is purchased and once you own it yourself then the buyer’s agents job is mostly done you now own that property and you manage that property those decisions are yours and a buyer’s agents really there to I guess coach and mentor you and if you then want to buy another property then you could re-engage their services but I guess I just want to make clear what a buyer’s agent doesn’t do after you own the property yes so a lot of buyers agents in Australia are very transactional around that one property but I personally believe that every relationship should like be sort of and you taught me this is a 15-year relationship and so we provide people with really detailed updates on their property each year and then we actually add we reach out to them on the phone at least a couple of times a year to book a session and have a full market update and hold them accountable to where they said they wanted to be and so that they’re always aware of what that strategy is or that next step looks like whether they do it we’ve asked or someone else or on their own is completely cool and I think as you said it shouldn’t just be you know buying a property which is a great result it should be education and training as well as that longer-term coaching and support that people need and that that’s what the modern-day buyers agency should be doing and because ultimately we’re investing in property as a vehicle to achieve our financial goals and so the buyer’s agent that you hire is going to be one of your most valuable team members till you get towards those goals and so a good buyers agent should not just leave you with one property and be done and dusted and that’s it a good buyer’s agent should be there as your coach and mentor to ensure that you are continuing to move towards your financial goals because for most people that’s going to take more than one property yeah and so should you hire a buyer’s agent ultimately that decision lies with you you need to look at what a buyer’s agent offers you need to look at whether or not that is worth it for you or if you want to go out there and do it yourself and you know I’ve got over 650 videos on my channel teaching you guys how to invest in property yourself so I’m definitely not against people investing in property themselves people can go out there and do it successfully some people who are short on time but have the money to do it or who are short on knowledge but they want to get into the market they can be people that can really benefit from a buyer’s agent so ultimately it’s up to you you need to weigh the pros and cons of hiring a buyer’s agent for yourself but if you do want to get clear on strategy if you do want to look at where you’re at now where you want to go and how a successful property investment portfolio can get you there then bending the team over at pumped on property are offering free strategy session so you can jump on the phone with them you can go through that and then decide do you want to hire this buyer’s agency team do you want to go and hire another buyer’s agent do you want to go and do it yourself it’s completely up to you but that strategy session is there and complimentary and I think Ben and the team for offering that so go to onproperty.com.au/contact that out and book a time that suits you it’s just over the phone and you get to pick the time so yeah onproperty.com.au/free your time today then – I guess shed some light for people on what exactly a buyer’s agent does and so that they can make a more educated decision automate thank you very much thanks so much for tuning in today everyone and until next time stay positive