I am certain that most people assume that all Buyers Agents are equal and in some ways, they are.
However, I find the high majority of Buyers Agents are really just order takers.
You give them a call and tell them how much you want to spend and where you would like to buy and they oblige with your preferences.
This may work well if you are looking to buy a new home or just need assistance with some minor parts of the acquisition process.
But what if you are entrusting someone to buy a large priced asset for you, that you are hoping to hold for the longer term to create wealth and set you up for retirement.
The key decision of where you place your hard-earned money for the next decade or two should not be taken lightly, as it may end up costing you hundreds of thousands of dollars.
If you were to invest $550,000 in an average property that performed at 5% per annum for the next 20 years, the asset would be worth almost $1.5mil.
But, if you were to invest that same $550,000 in an asset that performs at 7% per annum (so 2% better) it would be worth more than $2.1mil in 20 years.
Amazing to think that an extra 2% can make more than half a million dollars difference in 20 years’ time.
So, choosing the right agent to represent you should not be taken lightly.
Here are a number of non-negotiables that I put together when finding a Buyer’s Agent to represent me;
(Let’s assume they are already registered and fully licenced)
In Malcolm Gladwell’s book, Outliers, he explains the concept of the 10,000-hour rule.
To become an expert in your field, you must have accumulated 10,000 hours or more and I have found it to be a useful guide to follow in many areas.
By this time, they would have had all of their systems finely tuned and worked out what works well and what doesn’t.
For a property expert working a 40 hour week (min), this would be 2,000 hours per year.
I would want to ensure they have a minimum of 5 years’ experience as a Buyer’s Agent (=10,000 hours) and it would be important to ensure that their experience is in the same location I am going to be investing.
They have a Strong Network
With that 10,000 hours not only comes experience but also a strong network and database.
Do they have strong industry connections and at the top of sales agents’ speed dial?
They should be showing you every property that is available for sale, from on market opportunities to off market opportunities and even pre-market opportunities.
They should also have access to strong independent resources from building inspectors, finance experts and solicitors.
Everything they do or recommend, should be designed around simplifying the process and making life easier for you, while maximising the outcome.
They have a Successful Property Portfolio
They walk the talk and believe in investing in property for the longer term and have created a property portfolio for themselves.
Also, if they are asking you to invest somewhere or to consider renovating or developing a property, have they also done this themselves?
I would be more inclined to follow my Buyers Agents lead if I knew they have invested in that location or purchased a similar type of property.
This gives them the Authority and Expertise that I am looking for.
Are they a part of a professional agency or working as a man band out of the back of a car?
Also, a lot of Buyers Agents I come across are willing to buy from the Gold Coast to Noosa and beyond.
We even have Buyers Agents from Melbourne and Sydney fly up to Queensland occasionally claiming they know what they are doing.
As the saying goes “When you are a Jack of all trades, you are a Master of none”
I would want my Buyers Agent to be a Specialist not a General Practitioner.
They are Independent
They should be able to prove they are independent and be happy and open to answering any questions and showing you everything you need to know before moving forward.
They should also give you access to things like reviews from existing clients or case studies from recent purchasers, especially in the areas they are recommending.
I would also want to ensure they are working 100% for me and their focussed on achieving my goal.
I have heard stories of Buyers Agents finding “suitable” properties and then farming it out to their database and it is a case of first in gets the property.
This is not Independent and not working in your best interests.
So, while some agents may be order takers, a Buyer’s Agent that meets the following criteria should be vastly different.
If you are looking to buy in an average location, they should have the experience and market depth to be able to better educate you in your decision-making process.
They should also be able to recommend alternative points of views and different options when growing your asset base.
If you are the expert here and the Buyer’s Agent just goes along with everything you say, you may be dealing with an order taker.
While some people may only purchase 1 or 2 properties in their lifetime. I want some who is purchasing 1 – 2 per week and has the experience, knowledge and depth to be an industry leader.
If I can find an expert who outperforms, chances are my property portfolio will do the same.