Identifying a good buyer's agent: Why empathy is key
Jodie Pyke is in the process of selling an investment property, and like many smart investors, she has been looking into employing the services of a buyer's agent to make the best sale—but how exactly does one know if the agent is the right choice for them?
According to propertybuyer's Rich Harvey, a good buyer's agent is a tough—but not robotic— negotiator who has really good exposure, good local reputation, and good marketing expertise.
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"[Look for] someone who actually has empathy. I think a lot of agents sort of—they run this process really in a regimented way and they don't connect with the buyer. You want someone that can actually have empathy with the buyers and have really consistent communication," Rich said.
Buyer's agents must also prioritize good and graceful communication in dealing with both their clients and the buyers, no matter the circumstance.
"In terms of their personality, you've got to have an agent that's very, very confident, but not arrogant. You see a lot of arrogant agents that are up themselves. You've got to have agents that are really confident about their ability and prove that with their best results," Rich explained further.
"They might have some street records or some suburb records, so ask them, how they handle offers? What if you've given them an instruction not to take an offer, what do they do with that? They've got to have a certain way that they communicate with the buyers around those offers."
For Smart Property Investment's Phil Tarrant, property investors must avoid being "commission-focused" and instead take note of an agent's process and the quality of their past works. After all, as in most business transactions, cheapest is not always the best.
"Not all agents are created equal," Phil said.
"A lot of people, when they're selling a property, all they care about is the commission. They want to pay as little as possible and therefore they'll choose the agent that has the lowest commission payable and they'll negotiate with those agents on whoever can give them the lowest commission.
"That's not always the best way to go and I'd probably argue that if you're going down a path of just haggling with agents to try and screw them down on commission, you're probably not going to get a very good job out of them."
Phil's advice to property investors looking to sell, shop around for agents and be discerning in terms of the way they can present and handle your property through the entire process—from the way they determine the value of the property to their advertising strategy.
"If I was shopping for an agent, I'd get sort of three or four of them to come in and give me a listing presentation. I'd be asking questions about... what sort of records sales they've had... [and] buying the listing—that's not the way to go. An agent is a professional, so I'd be choosing someone who is an expert in a local area that you're selling and I would get them to do their job to tell you how much is this property worth and how are you going to sell it?" Phil explained.
"A lot of the times, agents will look to give any listing a lot of boost through advertising—vendor paid advertising... A lot of investors who are trying to make as much money as possible go, 'No, I don't want to spend any money on marketing or you need to pay, Mr. Agent. You need to take it out of your commission'.
"The good agents, and there are some exceptionally good agents, will be able to control the process with you very well, have confidence and control... and they'll tell you ‘no’ as well. The good agent will say, 'You're not going to get that. You're not going to sell it for that. If you put it up there, it's not going to sell. It's going to be sitting there languishing on the market for ages and ages and ages.'"
Rich and Phil's final reminder for property investors looking for a buyer's agent: Always keep in mind the three Ps—pricing, positioning, and presentation.
Tune in to The Smart Property Investment Show's special Q&A episode to know the answers to some of the most frequently asked questions about property investment, including off-the-plan risks, creating equity, and the financial backing you need to get started.
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