Working with a buyer’s agent – Is it worth the fee?
Katie Simpson has spent over 15 years in an investment journey with her husband. After acquiring several properties, all while she was mostly in control, the couple decided to bring in a buyer’s agent to assist in their transactions.
Over the years, the couple has worked with an agent, a financial adviser, a mortgage broker and a solicitor as they are building their six-property strong portfolio worth over $3 million.
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From being gung-ho in her investment partnership with her husband, Kate tells Smart Property Investment why they decided to put together their own financial team as a part of their journey.
Why did you start using a buyer’s agent?
The main reason we used a buyer’s agent was because the purchase [was] our first interstate. It’s in Queensland, in Brisbane, and we don’t know the area at all. I've just been watching those and reading a lot more online.
Another reason was so that we don’t have to go out there and look at the property, because sometimes we don’t have a lot of time to go and see them. That would allow them to be able to find the property that meets all the criteria that we have, and just to narrow it down to the best areas.
Did you have doubts in working with a buyer’s agent because of the fee that you have to pay for them to source the property for you?
Yeah. So, originally, we didn’t go with a buyer’s agent for our previous purchases because there was a fee involved, and we knew it would be probably at least $10,000. Now, we’re at the point where we can afford that. To me, it’s saving me time and stress, so I’d rather pay that money and get someone else to do it for us.
Aside from reducing stress, did getting a buyer’s agent actually help you find a better deal?
One of the other reasons we went through a buyer’s agent is because some of them get off-market properties that don’t go online to Domain or realestate.com. They’ve got the knowledge, they’ve got the contacts within the industry – makes it easier. So, would I have found that property if I was looking online? Maybe, because it was actually advertised on Domain, whereas other properties that they might put forward in the future may not be. When I was doing my original searches, I was looking for a different subset of properties. I was trying to keep it a bit lower so that we could buy more, so the purchase price was for maybe a $250,000 property that could have been a townhouse or a unit, more a townhouse or a house.
I wasn’t looking at the size of the land, because I wasn’t looking at the laws for, like putting a granny flat on the back. Apparently, they’re quite relaxed in Queensland as opposed to other states. Now, going into the future, I’ve got that in my head so I will be looking at different properties with those sorts of features moving forward.
If you go back in time 10 years, would have you told yourself to start using a buyer’s agent earlier?
I wouldn’t have used a buyer’s agent in my first few properties because I started buying in the 2000s, when buyer’s agents weren’t really heard of.
I think I would have used one when we bought our principal place of residence about three-and-a-half years ago. It drives us mad going around every weekend looking for something because it was for us to live in. We were thinking about using one back then, but again, the fee was the main driver that stopped us from doing it, even though we didn’t realise at the time how hard it was, how many people we were trying to beat. But then, the extra $10,000 or whatever you pay as a buyer’s agent fee, with all that time that goes into trying to find somewhere, you just think I should’ve just bit the bullet and got it done.
What would you like to tell a new investor about property investing?
Do your research and don’t listen to everyone that tells you not to do it. Also, to go and buy. Even if you don’t want to live in Mount Druitt, still go and buy there because no one wanted to live in Parramatta or Granville when I was living there and buying there, and now it’s seen as really big cities, like Sydney’s second CBD.
Tune in to Katie Simpson’s episode in The Smart Property Investment Show to find out the importance of property as financial security, and why she believes investing is much like being your own boss and taking control of your financial future.
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