How to pick the perfect buyer’s agent

Chris also shares what he would have said to himself a year ago with what he knows now, as well as where he hopes to be in a years’ time.

Tune in to hear about why it’s okay to be a “pain in the ass” toward your buyer’s agent, the invaluable education processes and why thinking like an investor for your first home will change the game. 

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SUBURBS MENTIONED IN THIS EPISODE:

Newcastle
St Leonards
Marrickville
Brunswick
St Kilda
Erskineville
Bondi
Mosman
Coburg
Flemington
Lismore
Zetland

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Chris McMullen's story he shared with us: 

The Naive Property Investor

At the end of last year I thought it might be nice to buy an investment property. I’m an Art Director btw, Not real Art, Ad’s, I work in Advertising, I basically annoy people for a living.

While it’s fair to say I don’t know a lot about real estate and investing, I have created work for banks and brokers. So it was interesting to see how helpful my knowledge in advertising was when it came to making a purchase. Thankfully, in retrospect, my experience in advertising has also given me a pretty good bullshit filter.

So I gave myself the goal of buying a place and getting some renters in by EOFY 17.

No real reason at the time, just thought it would be easier for my accountant if I had it all wrapped up by then.

Roughly 6 months to buy a place and fill it with paying tenants, how hard could it be?

Step one. Set goal. Tick.

I mentioned it to my broker, she organised a valuation of my property and recommended a seminar. I went along to the seminar and they showed me how I could express interest in buying a property in one of their developments.

They would then show me some options to choose from and it would be guaranteed 12% yield (whatever that meant). I could even give them my super as a deposit if I wanted to, they’ll sort it out through a SMSF for me. Cool! 

Seemed easy, plenty of time, I’ll do it in the new year.

Luckily, I had bought a 2 bedroom unit off the plans in 2012. I say luckily because I had no idea at the time what I was doing when bought it. I was saving for a deposit and someone told me there was a development nearby selling off the plan, so I went and had a look in their show room. Then I just picked one, which I could barely afford at the time. It was a bit more because it had a yard and I wanted a dog so that was good enough for me. It wasn’t til my broker got back to me with the valuation that I realised I had actually not bought a lemon. Incredible. My apartment in Marrickville was quite well timed, it had doubled in value in just 4 years. And I got a dog. I was actually in good shape, I just had to do it again. Simple.

Over the xmas break I started researching online, mainly following up on tips and recommendations from BBQ chats. At one BBQ a friend said he had just bought from JDL strategies and they were great, they just did everything. So I googled them. Through that search I found this thread, which is someones story over five years (research, mistakes and all). 

It gave me a good start. https://forums.whirlpool.net.au/archive/1732871 

It was the first time I was listening to other people in the same situation as me. It didn’t take long to discover there were a lot of scammers out there, spruikers were rampant and came in many different forms. I stumbled across a few good forums such as property chat and somersoft and I began to see the light.

It wasn’t long after that a friend recommended your podcast. I became obsessed.

Hearing other peoples stories was the best education I could find. Every Monday night after work I’d listen to your show to get myself in the mindset, then research til midnight. This soon became most nights of the week and my room soon looked like Rusty’s room in a A Beautiful mind.

I researched all the Capital cities plus Gold coast, Newcastle, Wollongong and so on. I researched Investment advisors, coaches and mentors and went to as many seminars as I could. Some were educational, some were blatant sales pitches and some just felt like a bizarre cult. I learn’t how to come up with a strategy and the meaning of capital gains and yield. Importantly I learnt what sort of property to buy, not just something because it was shiny and new. I also discovered what a Buyers Agent was.

I really enjoyed researching where to buy and why, but the more I learnt the more I would change my mind. In the end I played it safe. I decided to buy a two bedroom unit 5kms from the CBD, much like I had done in Sydney. Earlier on my location searches had been based on yield, but I soon saw the strength in capital gains and could see the benefits of big cities. Sydney was looking like it was hitting the peak of its cycle and I knew a little bit about Melbourne geographically so I felt like this was the next best bet. I was also interested in getting into Melbourne before the new First home owners grants kicked in which validated my deadline (eofy17). I could also see the same thing happening down there that was happening in Sydney, North Melbourne was following the same trend as Marrickville.

High speed Gentrification. Best of all, it was half the price.

So I drove down to Melbourne to have a look around and took my dog (she’s a great dog btw). I had a theory that walking the dog is a great way to wander around and suss out a suburb without looking too dodgy. yep. I stayed at a friends place and looked around Brunswick, Collingwood, Coburg and the surrounding suburbs. It might sound like I was really diligent but it was closer to a pub crawl in the end and I’m not really sure what suburbs we saw but they seemed nice. Most importantly I met up with Buyer agents, as many as I could. I had lined up two interviews in the mornings each day I was there. It gave me an excellent insight into the local areas and it taught me more than I could’ve known just wandering around. Or at the pub. I had a very long drive home ahead to think about it. 

Through your show I found ‘The Property Couch' so I listened to that and I spent the trip and deciding on a BA. I had already listened to each SPI cast twice (sometimes more) times over so it was a refreshing change and helpful for the Melbourne market. When I got back to Sydney I decided on a Buyers Agent, I had shortlisted 10 down to 3 in the car.

I signed the contract and I was off. It wasn’t an easy choice either, oddly harder than deciding on a property in some ways. 

Within 2-3 weeks I had bought a unit. I was a property investor. Wooooo!

https://www.realestate.com.au/property/16-60-farnham-st-flemington-vic-3031

In the end the BA won the auction for me at 50k under my budget. I was very happy… numb… relieved. The BA couldn’t have been better and for the right reasons I knew I had made the right choice. Now the only frustration is having to wait a few years before I can do it all again. And it will probably be quite different the next time.

Astonishingly, I had succeeded in achieving my goal, however it was a very different path to what I had anticipated. I was surprised at how long I had spent researching location and strategy, compared to purchasing the property itself. It was also empowering buying an IP and knowing why you are buying it, not letting someone do the whole journey for you. By just listening to your podcast I was able to to turn myself from a naive property owner into a smart property investor.

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