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What is a Buyer’s Agent?

A Buyer’s Agent or Vendor Advocate provides the confidence you might need to enter a hot property market and stay ahead of the exponential growth of property value. I often work with Buyer’s Agents when organising the legal aspects of my client’s property purchases, so I sat down with a local Buyer’s Agent Kathryn Fantov to find out more about what they do, and the benefits they can provide.

In 2012, Kathryn launched Innovative Property Advocates in an effort to improve the standard and reputation of the industry.

She stands by her highest core values of honesty, integrity, trust and transparency, with the goal of helping protect clients from the tactics of pressured selling or overpaying, for both vendors and purchasers respectively.

Kathryn has 3 decades of experience and specialises in the Sutherland and St George areas which continues to experience growth.

“When selling your property, you want confidence knowing the agent has done everything possible to achieve the highest price” says Kathryn.

Using a Buyer’s Agent when buying a property:

What does a Buyer’s Agent do?

  • Property search including gaining access to properties not yet publicly advertised;
  • Property and area research including expected growth, recent sales and past growth;
  • Evaluating the pros and cons of different properties to allow for a more logical purchase by the client;
  • Negotiating with the seller on behalf of the buyer;
  • Can work for clients in both purchasing of their home, or an investment property.

WHY USE A BUYER’S AGENT?

  • They are highly convenient for those who are time poor and can only view properties at weekends;
  • They protect first time or inexperienced buyers from emotional purchasing or paying too much;
  • They assist frustrated buyers who have been looking for a long time and keep missing out due to lack of agent communication or being priced out at auction;
  • They are skilled negotiators and can speed up the buying process drastically;
  • They allow buyers access to off market opportunities and make an offer before the property hits the market;
  • They have excellent relationships with real estate agents who understand Buyer’s Agent clients are pre-approved by lenders, want to move quickly, and therefore preference them above the general public.

What a Buyer’s Agent might offer:

1. Full Service – Search and Secure

  • Identify the client’s criteria, inspect properties, short list, then inspect with the client, and organise building and pest reports;
  • Secure the property – negotiation with agent or bid at auction on the client’s behalf to a predetermined value.

2. Secure Only

  • The buyer finds the property themselves and the agent is engaged to inspect, assess value, and advise the client on due diligence e.g. legal, pest, building and strata reports;
  • Negotiate with the agent or bid at auction on the client’s behalf to a predetermined value.

3. Bidding at Auction

  • Bids on behalf of the client at auction to a predetermined value;
  • This is ideal for people who can’t physically attend, are emotional buyers who might overspend, or are too nervous about doing it themselves.

How to interview a Buyer’s Agent

Choose three different Buyer’s Agents and ask the following questions:

  • Are you a licensed real estate agent? Buyer’s agents typically have real estate licenses and because of this, you need to ask them about conflicts of interest. If they are actively selling properties, you need to ensure they are not presenting you properties they are trying to sell, rather than finding the property you want. They are required to disclose such conflicts, but asking them outright is always recommended.
  • If you are an ex-real estate agent, how much experience do you have, with what companies, and for how long? This will help you determine their network connections, as well as their experience in the industry.
  • What areas and property types do you specialise in? This will help you determine what location they know best, what types of property they know best, and the markets they operate in. There is no use hiring an agent who specialises in apartments in Bondi if you are looking for a house in Cronulla.
  • What type of properties have you purchased for clients and what savings have you made? This will provide you with an understanding of whether they have secured similar properties to your requirements, and if your investment in them will be worthwhile.
  • Have you got phone numbers or email addresses of previous clients that I can contact? You should always get references before engaging with a Buyer’s Agent. In addition to the references they provide, google them and read their online reviews.
  • What relationships do you have with other agents? You should find out what real estate agents they know, and how long they have been working with them. This will help you assess if their network is sufficient to be beneficial to your property search.

And lastly, assess whether you like their personality traits, and whether they seem approachable and honest. If something feels a little fake or slightly off, then don’t engage them. The Buyer’s Agent and Advocacy industry has taken off over the past few years, so it’s important to find someone you feel comfortable with and who you feel you can trust with such a significant purchase.

HOW TO ENGAGE A BUYER’S AGENT:

  • Do you due diligence as described above, and then sign an agreement for service with your chosen agent;
  • Note that costs for Buyer’s Agents vary, but should sit between 1.5% – 3.5% of the property purchase price;
  • The industry average is 2% of the purchase price, including an engagement deposit fee of around $1500;
  • The balance is payable to the Buyer’s Agent by the buyer upon settlement of the property;
  • A fixed fee agreement for full service might also be available, but this varies from agent to agent.
  • You can expect to pay a Buyer’s Agent $300 for representation at an Auction – plus success fee (flat or percentage) if they purchase the property on your behalf.

Benefits of a Buyer’s Agent.

Whether it’s saving time, eliminating unwanted property options, or simply planning for the smooth purchase of a property, the benefits of a Buyer’s Agent can give you back your Saturdays and take away the stress of wondering if you are paying too much.

What you can expect from a Buyer’s Agent is listed below to help you manage expectations.

Kathryn recommends interviewing your Buyer’s Agent as if they were a nanny who might look after your children. You should expect them to spend time with you discussing your current financial position, resources and your dream property.

1. Discovery session – write a wish list and go through:

  • Things you must have that are non-negotiable;
  • Things you would like to have in an ideal world;
  • Things you won’t consider.

2. Buyer’s Agents are often the first to look at properties before the general public. They have a great relationship with local agencies, have developed and nurtured their life-long property contacts, and understand how each agent works.

  • The Buyer’s Agent can front up prepared to negotiate purchase price, submit settlement terms, and place a quick deposit – making it attractive to the seller.

3. They work within your nominated budget, with some purchases resulting in a 15% gain in capital growth in less than 12 months – because their expertise in their specialised area is well researched and accomplished.

4. Buyer’s Agents are a purchasing cost saving strategy, as money is often spent on reports only to discover that the property is not up to standard or requires significant works. Buyer’s agents can assess the property and compare current values to a standard a buyer could not, as it’s their expertise and an activity they conduct all day, every day.

5. They are a time saving strategy when it comes to searching and researching properties – time that buyers often don’t have to spare.

6. Buyers receive the benefits of the Buyer’s Agents many years of experience and expertise who have usually worked as a real estate agent or within the industry for a significant period of time.

You can find more about Buyer’s Agents in my conversation with Kathryn Fantov on The Curious Lawyer podcast here or contact her on 0411 522 233 or via email at info@innovativeproperty.com.au

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