As mortgage brokers, we’re at the coal face of market demand. One thing we know for sure is that demand for quality homes, investments, developments, and commercial property is not subsiding anytime soon with buyers regularly purchasing at overinflated prices to beat the competition.
Talking to buyers, we can feel their frustration at turning up to auctions or open homes and having to compete with many others, some coming from interstate or abroad, and able to pay a premium price. If you are feeling this frustration, now might be a good time to look at some alternative strategies to assist you in your search for property.
One of the more popular options we are seeing now in terms of levelling the playing field is engaging a buyer’s agent to represent you in searching for and acquiring your next property. They’re pretty much agents who act on behalf of the buyer instead of the real estate agent who is focused on getting the best result for the seller.
So, we thought we’d get one of our good friends along for a bit of a Q & A on what a buyer’s agent is and how they can help you in your property journey. To do this, Mark Williams sat down with Joe Rogers from Yoku Property, a leading Brisbane-based buyer’s agency.
So, without further ado, let’s have a chat with Joe!
MW – Joe, welcome! Can you tell us exactly what a buyer’s agent does to get things started?
JR – It’s a great question, Mark, and one we hear only too often as buyer’s agents! Despite buyer’s agents being around for a very long-time, we are now firmly in the limelight due to the current overheated and high-demand market we are now experiencing. To answer your question most straightforwardly, a buyer’s agent is someone who acts on behalf of the buyer. We offer a full-scope service when engaged, which means we take the time to understand our buyer’s goals and objectives, budget, desired suburbs and put an acquisition plan in place.
We’ll leverage our significant database of real estate agents to try and identify properties coming to the market soon or off-market opportunities and present these to our clients. We conduct all the market research, handle open home visits, conduct negotiations, manage the contract, and assist our buyers right until settlement. We pretty much facilitate the entire buying process, so our buyers don’t have to!
MW – What do you mean by off-market and pre-market opportunities, and why is this important?
JR – It’s vital to understand that once a home is listed and promoted on real estate websites, it will be far more challenging to secure the property within a specific price range due to additional competition from other buyers, local and interstate. Yes, we can still conduct negotiations with on-market property agents (we regularly do this). However, the real value of a buyer’s agent is their market knowledge and ability to tap into pre-market and off-market homes.
Securing a home pre-market means not competing with open home/auction scenarios. Off-market is even better, where we either prospect homes in desired suburbs and see if they are interested in selling, or an agent tells us they know someone who wants to sell but does not want the rigmarole of having to list (open homes and auctions are hindrances).
Off-market properties mean you can secure properties at a fair market price (most of the time) and not have to expose yourself to the pressures of an open home (multiple offers) or auction scenario.
MW – How much do buyer’s agents cost to engage, and what does the engagement look like?
JR – This depends on who you engage; however, you will usually need to pay a retainer fee to start the process (and show your commitment). Once paid, you will usually sit down with a buyer’s agent with experience in your local market. They will develop a comprehensive property brief and then begin identifying ideal properties based on this brief. They’ll start presenting these properties, and from there, you’ll work with them until you secure something.
For most buyer’s agents, you’ll pay a commission on the sale after settlement – it can range from 2% and more depending on who you elect to go with.
At Yoku Property, we charge a flat success fee no matter the property’s price. This is a much more affordable option when compared to other buyer’s agents, who do charge upwards of 2% on the purchase price as outlined above. This means we can give our clients extra comfort in knowing we are constantly working in their best interests to secure the property for the best price for them, the buyer.
In both scenarios, having to pay for someone to find your property may seem risky or excessive, but consider the savings you may make with an off-market sale – in some scenarios, you might secure a property for more than 5-10% cheaper than the current market.
MW – When should one look at engaging a buyer’s agent?
JR – I always say, ‘as soon as you are looking to purchase or sell’. Why? The sooner you start the process, the quicker you’ll be able to find something, and in doing so, you’ll save yourself plenty of pain and suffering.
I regularly hear from clients who engaged us that they wish they had done so earlier rather than waiting until they were six months into a fruitless search which included countless hours researching real estate websites, turning up to open homes and auctions, and of course, re-applying for finance approval every time it expired (I know Mark loves re-doing applications).
All I can say is don’t wait – and if you’re not sure, give us a call, and we can cover any concerns you may have.
MW – Thanks for having a chat – you’ve given our readers some great food for thought.