Podcast #8 | How Qualified Is Your Buyers Agent?

Podcast #8 | How Qualified Is Your Buyers Agent?

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Buyer’s Agent Qualifications Transcript

Today we’re talking about what a good buyer’s agent will bring to the table for you, the buyer. The reason why you’re looking for a buyer’s agent is you’re probably concerned about spending so much money and making sure you’re spending it correctly on the right kind of home that will attract future buyers, that will attract future tenants, maybe, that will attract a good capital growth for the long run.

00:51 MR: So you’re wondering, will a buyer’s agent kind of fill that gap, my knowledge gap, to be able to add value to this buying process so I don’t make a mistake. So we’ll be looking at what a good buyer’s agent will bring to the table and how they’ll benefit you for the buying process. And also how to qualify one when you’re trying to hire one, the questions to ask and what to look out for. Okay, you pretty quickly discover, online, that a good buyer’s agent will save you time, save you money, when you’re buying a property. They should have access to more listings than the average person that’s looking for real estate because they have relationships with real estate agents and also buying property that would generate high capital growth.

01:35 MR: The other tangible immediate benefits of hiring a buyer’s agent, a lot of people don’t realise though but hiring a buyer’s agent can have intangible benefits as well. And the reason for that is, life is short and you really don’t get many opportunities to have many real estate transactions through your life. 

So what I’m trying to say is, is that once you purchase property you’re kinda stuck with it for a long period of time so you wanna make sure it’s the right kind of property. A good property purchase will shorten the time or the cycle between your next purchase. So your capital growth will be quicker. So you’ll be able to generate more income or more wealth to look at your next transaction and the track, whether it’s buying your dream home or your second or third investment property.

02:20 MR: More importantly a good buyer’s agent will help you win the right property when you’re negotiating. He will make you realise, “Look, this is the property that is correct for you and you need to really act when it comes time to acting.” When it comes time to negotiating or paying that extra $10,000 to win an auction or a private negotiation, a good buyer’s agent will help you realise the importance of your decisions at that time. So how do you qualify and hire a good buyer’s agent? 

So when you are out there looking for a buyer’s agent and you’re checking out their resumes, you wanna look for two factors that really stand out. So you wanna make sure you check their experience and also have they ever owned property, built property, renovated property.

03:05 MR: They’re the two main areas that you wanna make sure your buyer’s agent has got detailed experience in both. I once had a friend that was a insurance salesman, and he was selling his product, life insurance, I believe. He was selling his product with conviction to people that were… I think he was just cold calling them and telling them how much they need this insurance. Out of interest, I was asking him, “So, what kind of life insurance do you have?” And he basically responded saying that, “Look, I don’t really believe in the product. I think it’s a very hard thing to claim on if you were to ever claim on it and it’s probably just a bit of a waste of money.” And I was really shocked to hear that, that there’s people out there that are happy to sell you something, but they don’t actually believe in the product themselves.

03:51 MR: So on the same kind of note, when I hire anyone, particularly if I was to hire a buyer’s agent I’d wanna make sure that they own a property, that they’ve renovated a property or even built a property. And the reason for that is because when they walk into a house, they need to understand the cost involved in repairing something, the cost involved… Or the effort involved in what it’s like to knock down a wall and how long something can take when it comes to, I guess, having a house that’s uninhabitable so that you can’t live in it, you can’t rent out because it needs this kind of renovation. You also wanna make sure that they understand what it’s like to repay a mortgage. So when your buyer’s agent says, “Look, you need to spend an extra 10 or 20 or $50,000 on this property or you need to spend $100,000 to renovate it for example that they truly understand what it means when it comes to repaying this kind of money.

04:46 MR: The second point that you should be looking out for is your buyer’s agent’s experience. Now, a really simple way to check out your agent’s experience is go to Consumer Affairs and there find the real estate agent’s register and you’ll be able to find if they’ve actually completed a course and they’re a fully qualified real estate agent. And I think you can also find out if you can find their experience, where they’ve actually served their time under, which real estate agency. So your buyer’s agent should also have experience in the two types or real estate markets. A market where prices are going up and a market where the prices are going down. The reason why that’s so important is when they’re on the other side of it, when they’re becoming buyers and they need to negotiate, there’s different ways of negotiating depending on what market you’re in.

05:32 MR: So for example, when prices are going up, a real estate agent is typically under-quoting property. So they’re advertising a price that’s cheaper than really what the property’s worth. So your buyer’s agent needs to know how to handle that situation. Firstly, what is the true market value of the property? Now, understanding this will tell you how far you can negotiate, how far you can push and whether or not you’re even looking at the right property. So that’s key to making sure you’re buying at a soon or quick enough pace and basically not missing out on the property that you wanna buy and not paying more for property if you’re still in the market a few months down the track. Because when a market is going up, sometimes it can move up so aggressively that it can actually cost you a lot of money by taking a very long time to purchase.

06:20 MR: On the flip side when the market’s going down, the real estate agents are typically discounting property on a regular basis till they get a good reaction from the marketplace, until they get people at opens, and they’re actually getting offers in writing. Now, as a buyer’s agent, the skill in this area is knowing how to throw your weight around correctly when you have a buyer that has money to purchase. So for example, sometimes it’s offering something that’s fair and reasonable to both parties where you’re not offending the sellers and you’re actually able to negotiate a deal on a property that your client wants to purchase. Secondly, it’s actually understanding how to use terms to negotiate, terms like no finance clauses or using a building pest inspection the right way to actually get a discount on the property. And there’s more on that in other episodes if you check that out, but that’s a really big one.

07:15 MR: And typically, you’re using settlement terms to leverage and benefit you, the buyer, and the seller to get a deal across the line. So a lot of people think that price is the only way to negotiate, but there’s a lot more to the picture. So if your buyer’s agent is able to demonstrate that, “Yes, I’ve worked in both these markets,” you know that you’ve got a balanced agent that has that experience to basically leverage whatever happens in a scenario and make sure it benefits you because you’ve hired them to make sure they benefit you.

Okay, thank you for listening. We’ve come to an end for today’s topic and I hope you’ve enjoyed it and gotten some good benefit out of it. If you have any more questions, check out our website and leave your details there, I would be happy to get in touch and have a chat with you. So if you go to propertyinvestorpodcast.com.au or check out wiserealestateadvice.com.au.

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