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Here are our top tips on how to find the best buyer’s agent for your next property purchase.
Buying an investment property is likely one of the largest purchases you’ll make in your lifetime. However, the overwhelming (and sometimes confusing) journey of purchasing a property can result in some investors making common but costly mistakes.
If you’re not sure about the ins and outs of this complex process, working with a buyer’s agent may be the best option for you.
A buyer’s agent is a real estate professional whose role is to provide guidance to homebuyers or property buyers throughout the process of purchasing a property. As a representative of a buyer in a real estate transaction, a buyer’s agent protects the interests of the buyer and makes sure that they’re getting the right property at the right price.
But how do you find the best buyer’s agent for you? Here are our top tips for choosing a buyer’s agent that suits your needs.
What is a buyer’s agent?
A buyer’s agent or a buyer’s advocate is a licensed professional who works for you (the buyer) and acts on your behalf to search, evaluate, and negotiate a property purchase. Simply put, buyers’ agents represent the purchaser’s interests in a real estate transaction.
You have the option of enlisting the full or partial services of a buyer’s agent to help you find the ideal property. If you choose to hire a buyer’s agent for their full services, the buyer’s agent manages the entire buying process for you.
Some of a buyer’s agent’s responsibilities include:
How to find the best buyer’s agent
Using a buyer’s agency or a buyer’s agent can improve your overall real estate buying experience. A good buyer’s agent will save you time and money, guide you in choosing the best property in a good suburb, and most importantly help you avoid the pitfalls of buying a property.
If you’re shopping around for a buyer’s agent, here are our tips to finding the best one:
1. Determine their experience as a buyer’s agent.
It’s important that your buyer’s agent is highly skilled and experienced in the real estate market.
If they don’t have the right experience, you will find yourself missing out on profitable investment property opportunities. In some cases, they can cost you money if you overpay for a property or they led you to buy a property that was less profitable than expected.
Before choosing a buyer’s agent to represent you in a purchase transaction, here are some of the things to consider with regards to their experience:
2. Check their credentials and memberships
Buyer’s agents are required to hold a relevant real estate licence in each state and territory in which they operate. For example, in Brisbane, a buyer’s agent must hold a full real estate agent’s licence and be registered with the Office of Fair Trading Queensland to be able to legally act on behalf of a client in a property transaction.
Ask to see the buyer’s agent’s real estate license and check the expiry. You can run a search for licenced and real estate agents.
The agent must also be a member of an ethical body, which keeps her/him accountable to demonstrate a code of ethics.
Make sure that the agent also has full indemnity insurance in case of an unforeseen circumstance.
For more information on your prospective buyer’s agent’s credentials or affiliations, you can check the following websites:
Real Estate Institute of the ACT
New South Wales Office of Fair Trading
Real Estate Institute of Northern Territory
Northern Territory Consumer Affairs
Queensland Office of Fair Trading
Real Estate Institute of Queensland
Real Estate Institute of South Australia
Consumer and Business Services
Real Estate Institute of Tasmania
Consumer, Building and Occupational Services
Real Estate Institute of Western Australia
Consumer Protection, Western Australia
Consumer Affairs Victoria
3. Ask if they are independent or if they have connections with third parties.
One of the most important things to ask a buyer is if they are “totally independent” or “exclusive”.
If they receive financial incentives or sales commissions from vendors or developers (third parties), they cannot be classified as “independent”, as they are also acting in the interest of the seller.
They are legally obligated to disclose this information, but it’s always better to take the initiative and ask the agent. You don’t want a buyer’s agent recommending a property to you just because they will receive a financial incentive from the property developer or builder and not because it’s the right one for you.
4. Owning an investment property.
Experience is the best teacher. This adage also applies to buyer’s agents. Ideally, you want your buyer’s agent to have experience owning investment properties. Preferably, they have also sold at least one property to have a full understanding of what they’re getting their clients into.
Why is this important? A big part of what makes up a buyer’s agent’s skill set comes from owning a home or investment property. This is because property ownership comes with maintenance, renovations, paying a mortgage, and repairs, paying property taxes, etc. They also have experience trying to sell a property, dealing with low offers, and difficult buyers and the whole process of selling. This teaches a property owner about buying property correctly, right from the start.
During the buying process, your buyer’s agent will give you a lot of advice on what or what not to do when buying property. A buyer’s agent also considers things like their client’s financing, renovation costs, and client’s exit strategy. Therefore, it’s important to deal with someone that understands property ownership.
After all, there is nothing worse than someone selling you products that they use or own themselves.
5. Ask them about their network.
Good buyer’s agents are well connected. Not only should they have a good network, but they must also be reputable within the local industry and the real state community in general. If selling agents are not willing to do business or to work with a certain buyer’s agent, you will miss out on certain properties.
Well-connected and respected agents often get the first pick of properties before they hit the open market and can get their clients in the door as a priority over other buyers. Good buyer’s agents are also privy to off-market properties and secret listings because of their network.
Sample questions to ask before choosing a buyer’s agent.
Based on our tips, here are some questions that you can put to your list when inquiring about a buyer’s agent’s services:
Smart Property Investment provides Australian property investors with must-have insight, strategies and real-life experiences to help guide successful buying and selling decisions in the Australian property market. Tune in to our podcasts covering a variety of topics related to the real estate market. You can also follow Smart Property Investment on social media: Facebook, Twitter and LinkedIn.
The purchase price is the amount of money an investor or buyer pays for an asset, property, or security, which becomes the basis for the loss or gain when selling the investment.