Anyone can buy a property, right. I mean how hard can it be? Wrong! It turns out buying a property is trickier than it seems, particularly if you’re an investor looking to come in under your budget and achieve a certain rental yield.

Buying a property is exciting, particularly if it’s your first investment. However, it can also be fraught with peril. After all, you’re potentially making a life-changing decision.

Why A Buyer’s Agent?

Some people elect to go it alone. Others lack the time, experience or confidence to buy a property. If you’re concerned about spending too much or making a mistake somewhere in the process you should consider engaging a buyer’s agent to act on your behalf.

An experienced buyer’s agent can save you time, heartache, numerous Google searches and ultimately money by helping you research potential properties, bid on your behalf at auction or negotiate a private sale to acquire your target property.

A professional Buyer’s Agent can source a property that fits your criteria, undertake the due diligence and have the property independently inspected on your behalf to ensure that it is well maintained and presented.

7 Questions To Ask A Prospective Buyer’s Agent

1. How Much Experience Do You Have?

A property is a big-ticket item so look for a buyer’s agent with a minimum of 5 to 10 years of experience as a bona fide buyer’s agent to ensure that they have the expertise and experience to identify the right property opportunity for you and execute the purchase correctly. Remember, you get what you pay for!

2. Check Their Reference and Past Purchase History

Ask your prospective buyer’s agent about their experience with previous acquisitions in locations on your target list and seek proof from past clients.

3. What Industry Associations Do They Belong To?

Are they a member of their state Real Estate Institute? Are they members of REBAA? The REBAA is the Real Estate Buyers Agents Association. if they’re not a member, ask why not.

4. Do They Act As Buyer’s Agents Exclusively, Or Do They Also Sell Real Estate?

The last thing you need when buying a property is to have to deal with an undeclared conflict of interest. Ask the question. It will help flush out any potential conflicts of interest.

5. Ask For Evidence Of Professional Indemnity Insurance

In Australia, all buyer’s agents or agencies are legally obliged to hold a minimum of $1 million in Professional Indemnity insurance. This cover is intended to help protect clients in the event they are found to have been negligent in executing their duties on their clients’ behalf. If they don’t have Professional Indemnity insurance or seem reluctant to provide proof of cover, look elsewhere!

6. Clarify Their Fee Structure

This one should be comparatively straightforward. Ask precisely how much your prospective buyer’s agent charges. Once you have their fee structure, cross-check it against the industry standard for buyer’s agent fees and commissions. One rule of thumb is a buyer’s agent’s fee should fall between 1 per cent and 3 per cent of the property’s value or price depending on the agreed service.

7. How Established Are Your Prospective Buyer’s Agent’s Networks?

If real estate is all about location, location, location, so too is the right buyer’s agent. Intimate knowledge of the dynamics of your preferred suburbs is critical to having the widest choice of potential properties and ultimately in buying well.
Look for an agent who can provide you with current reports showing the data trends and population forecasts for their selected locations to purchase an investment property. Research is paramount to the outcome and they need to show ‘why’ those locations are more favourable than others.

Choosing The Right Buyer’s Agent For You

• When dealing with their clients, a good, ethical buyer’s agent will:
• Guide the client through alternative options that apply to their property acquisition and assist the client in shaping that strategy and in putting together the key building blocks in their strategy
• Ensure they and their buyer are clear on their strategy moving forward and on the type of property they are looking for
• Provide research on the locations that are classified as ‘growth’ locations around the country for the buyer’s consideration
• Help the buyer to understand the cash flow position of the property under consideration, to ensure it aligns with the agreed property investment strategy
• Present properties that fit the agreed strategy
• Organise pest and building inspections for the selected property
• Negotiate the price and agree on the contractual terms and conditions
• Track the property purchase through to settlement and ‘troubleshoot’ any issues encountered along the way
• Ensure clear communication with their client to deliver the best possible outcome for their client.

Final Observation

No two property transactions are ever the same. And buyer’s acquisition strategies and briefs vary, as do their budgets. If you’re just starting on your property acquisition journey and are using a buyer’s agent for the first time, keep your ears to the ground and ask plenty of questions.