Whether you have dozens of investment properties under your belt or are looking for your first, it’s always a good idea to consider enlisting the services of a buyer’s agent. Of course, one of the many things that make people hesitate at the thought of getting a buyer’s agent is money.
How much does a buyer’s agent cost?
The actual cost of a buyer’s agent will vary – some charge a flat engagement fee, while others charge a percentage (anything from 1-3%) of the property purchase price plus GST. Overall, the price will depend on a number of factors including your property price bracket, the area you’re looking to buy in, and the complexity of the search.
How much money will a buyer’s agent save me?
Some buyer’s agents will say that they can secure you a lower purchase price. However, it’s important to remember that this is, by no means, guaranteed.
Yet, it’s not just the purchase price you need to think about. What are the ongoing costs of running this property? Will it be easy to rent? Will it be easy to sell? Which neighbourhood has the best growth potential? Beyond the purchase price, there are multitude of things to consider when buying an investment property. I believe that using a buyer’s agent offers financial – and emotional – benefits that should be considered when weighing up the pros and cons of using a buyer’s agent.
- Time is money
If you have the inclination and time to invest in educating yourself and making an informed decision, then managing the buying process yourself is achievable. However, if you’re someone who is time-poor, then a buyer’s agent would be a wise investment as they will do all of the legwork and research for you, discarding 60-90% of unsuitable properties before you even go to any viewings.
Let me put it this way. Have you ever thought about how much your time is worth? In a recent survey, participants said their spare time was worth $170 per hour on average. It can take up to 55 hours to buy a property (from research to purchase), so that’s almost $10,000 worth of your time before you even purchase.
- You’re investing in knowledge
Most buyer’s agents are former real estate agents or investors themselves, they will have access to off-market properties and insights. To put it simply: property investment is their bread and butter; it’s what they do every day. Because of that they know the neighbourhoods, the streets and even the apartment blocks that offer the best return on investment. Furthermore, sales agents will usually bring silent sales to buyer’s agents because they know they are serious about purchasing.
Good buyer’s agents have a robust set of criteria that they use to assess whether a property is a good investment. Tapping into this expertise will help you secure a property that fulfills your brief at a fair price which is preferable to buying a ‘cheap’ place with major flaws. Good properties will always fetch a premium and a buyer’s agent helps you focus on the things that matter.
So, when you enlist a buyer’s agent, you’re not just investing in time-savings. You’re also gaining access to experience, knowledge, and industry collections.
- They know how to negotiate
Negotiation is a skill that develops with use; I’m sure you can attest to the fact that you are better at negotiating your salary now than you were 10 years ago. That’s because you’ve become better with time and practice – you’ve learned which techniques work and which don’t.
Buyer’s agents are professional negotiators who buy property regularly, often weekly. That means that they would, at a minimum, negotiate the price of 50 properties a year. As such, they’ve developed the tactics and emotional detachment necessary for a successful bid, often managing to conduct the sale without the volatility of an auction.
Finally, I want to stress that there is never a guarantee a buyer’s agent will save you money. However, what they will do is save you the cost that comes with overpaying or buying the wrong property.
By finding you a property that grows at a rate of 8% rather than 6%, a buyer’s agent will actually make you hundreds of thousands dollars over a lifetime. With the right property, the buyer’s agent’s fee will repay itself many times over.
If you’d like to talk to a property investment expert and see if a buyer’s agent is right for you, simply get in touch with us for an informal chat.