If you are already a property investor, you’ve most likely considered using a Property Buyer. However, if you’re a first home buyer or someone seeking a property to live in, you may not have considered it. There are quite a few benefits to using Property Buyer for property purchases and it is not just a service for investors.
BTW – we don’t get any sort of kickbacks from Property Buyers, just more successful purchasers!
What is a property buyer
Property Buyers (also called Property Agents and Property Advocates) are licenced real estate agents that work on the property buyers’ behalf. When you want to sell your property you may engage a real estate agent to sell your property on your behalf, if you are looking to buy property you may engage a property buyer to carry out this service for you. Many people overlook this, particularly as real estate agents may give the impression that they are assisting both the seller and the buyer. This is not the case. Real estate agents are being paid, a commission by the seller, to sell their house for the best possible price.
Real estate agents work for the sellers. Property buyers work for the buyers.
What do property buyers do?
Property Buyers can do a full service or partial service for you. Services include managing:
- searching and researching properties,
- evaluating markets and pricing,
- inspect properties and shortlisting,
- overseeing due diligence such as pest inspections etc,
- negotiate purchase,
- overseeing exchange of contracts,
- settlement inspections,
- asset, property management and leasing.
According to REEBAA (The Real Estate Buyers Agents Association of Australia) “Property Agents aim to ensure you’re as fully informed as possible and that you don’t overpay.”
Why would you consider using a property buyer?
1. Save time
Many people use property buyers to simply save themselves time. The process of purchasing property can be very time consuming. How much is your time worth? Even if you do decide to do it yourself, there can be quite a few expenses to access available property research tools, with many of the tools simply too expensive or unavailable to individual punters.
2. Remove potential to emotionally buy property
This is one of the key benefits of using a property buyer. Purchasing property can be a pretty stressful process in general. If you are new to the process, prone to stress with big decisions or prone to buy now, regret later, then you could probably do with some help. Things like high buyer demand/competition and tough negotiators can put you under pressure and cloud the rational part of your brain. Making a bad decision can cost you thousands and put you back before you’ve even begun your property journey. That’s before you’ve even started with the legal side of the process and scrambling to meet settlement deadlines. Eeek!!
Experienced Property Buyers are not phased if a property becomes a no-go because the negotiator is too tough and won’t budge on an unfair price, or if the building report comes back with major issues that make the purchase a bad decision. They are use to getting to the pointy end of the process and walking away if it is not ticking all the boxes.
3. Remove fear of taking action
Some people would really like to get into the property market but they struggle with the fear of making the right decision. It keeps them stuck, not taking any action at all, also costing them in the long run, with delay in building their retirement nest egg.
Property Buyers work for you. They get to know what your goals are and what sort of property you’re hoping to buy. They will educate you about the different choices you could make and do the property research, evaluation and inspections for you to shortlist the best investment opportunities for you to review. Even if you are buying a property to live in yourself, you’ll want that property to be building your wealth, not eroding it. The process of having someone else, who’s experienced, assists you with finding your solid investment. This can help to alleviate the fear of making the wrong decision and get you set on the path to building wealth for yours and your family’s future.
- Due diligence
- Dealing with agents who are employed by sellers
- Investing in the right areas – having all technology available and skill to understand and decipher it
- Fees and charges known
- Getting the deal over the line
4. Save you money at the time of buying
Property Buyers are experienced negotiators, they do this all day, every day for their clients. A good one will save you money off the price of the property at the purchase. This is key to making money from real estate, you buy the property and have instant equity. It doesn’t really matter what the market is doing at the time, just that you were able to get a good deal at the time of buying. If you don’t manage this, then you will need to really bide your time until the market rises in the area you bought the property.
5. Create an instant equity plan and have assistance through the process
Many Property Buyers will have building experience and can also provide you with property improvement advice that will increase the value of your property quickly, once you own it. Targeted property renovations and improvements can instantly increase the value of your property, providing you with equity as a deposit for your next investment property. This is a niche wealth strategy. Make sure your Property Buyer has a lot of experience in this area and can help with the process of project managing the improvements if it isn’t your forte.
6. Have a long term strategy for wealth through property and someone to help you through the process
Much like Accountants and Lawyers, many Property Investors will have relationships with their Property Buyers that span many years, assisting them to build their property portfolios. We also suggest you have a similar relationship with your Broker to ensure your Home Loans are also in line with your long term strategies.
7. Build your knowledge about property investment from the experts
Some people spend thousands of dollars per year attending all the latest Property Investment Seminars and joining Property Investor Clubs. This is also a great way to build your knowledge and expertise in the area, however referring to point 1. above – do you have the time? Wouldn’t you prefer to engage someone to do it all for you, and educate you along the way? This is what Property Buyers do. They’ll bring you along for the ride, sharing with you the information they’ve found out, what the pros and cons are, and what data really matters in the long run. You’ll get the education from the experts who do it all day every day and they will do the actual work for you.
What does it cost to use a Property Buyer?
Property Buyers can operate on fixed fees or commission or a mixture of both. They will generally charge an upfront fee to begin the process and a final fee on settlement. The fees will vary according to how much of the process you engage them for e.g. some people just use them to negotiate the purchase price, others use them for the entire process.
- Upfront fees can start at around $1,000.
- Total fixed fees can be anywhere between a few thousand dollars up to $15,000.
- Commission payments are based on the purchase price of your property and can range from 1-3%. They generally differ according to the price bracket of your purchase.
Beware – some Property Buyers do not charge you a fee at all. That’s because they are getting paid a commission from the sellers. This is common with Property Buyers who have a range of property developers on their books and the property developers give the Property Buyers a commission when they sell something off their books.
The problem with this type of Property Buyer is that they are limited to offering you property options that are only available from their pool of developers. If you are looking to buy a new property in the areas they offer and you do your due diligence to make sure what they offer are good purchase decision, then they may still be a suitable choice for your situation.
How to find a Property Buyer
Talk to your Broker. They’ll probably know a reputable Property Buyers who’ve been doing business for many years. Or visit the Real Estate Buyers Agents Association of Australia’s website. They list a bunch of Property Buyers that they’ve already vetted to be members of the Association. Make sure you do your due diligence before engaging them – Read ‘How do I choose a Buyers Agent’.