Three important factors to consider when looking for a buyer’s agent

“I got more and more addicted to the research side of it, [then I realised] what a buyer's agent was [so I started] looking into that and trying to find the right one,” he said.

Here are three of the most important lessons he learned about finding the best buyer’s agent:

1. A buyer’s agent must have local knowledge of the area

Knowing that he could probably make an unwise decision by himself, Chris met up with a buyer’s agent before driving around Newcastle to look for his first investment property.

According to him: “[I] met up with a buyer's agent, Teyren … who was fantastic. The guy should be mayor of Newcastle [because] he knows everything about it.”

“It was interesting talking to him over coffee about where to buy property. I said, ‘Where's a good spot—near the railway line … ?’ He said, ‘That's where you're wrong. That's where you've got a city mentality.’

“ ‘In Newcastle, you stay away from the railway lines because they're industrial … People don't buy units up here. They buy the little workman's houses and do those up … ’ That was a learning just straightaway,” the budding investor shared further.

Chris quickly realised that a good buyer’s agent who can actually help you select the best property based on your goals and capabilities as a property investor is someone who has a local knowledge of the area you are considering to buy in.

“That's [called] ground truth, right? Which you're trying to get if you actually visit a place,” Smart Property Investment’s Phil Tarrant said.

2. A buyer’s agent must ‘know the numbers’

Aside from knowing the factors that can impact an investment based on its location, a good buyer’s agent is also able to determine the significant role a particular property can play in an investor’s property portfolio. For example, they can tell their clients about the difference between capital gains and yield, and which of the two should they be chasing based on the current status of their portfolio and the level of growth that you want to achieve over a period of time.

In a seminar conducted by Dr. Andrew Wilson, Chris learned that different locations and different types of property could mean different gains for him.

According to him: “He talked about Melbourne and how the first homeowners' grant was going to kick in after July and how there'll be a bit of a rush on properties under that $500,000 [to] $600,000-mark, which is where I was buying.”

“So I thought, ‘Maybe it's good to get in just before that and purchase a property in Melbourne.’ I went and saw one of the guys from their office in Sydney and I told him what I was thinking about Brisbane and Gold Coast.

“He said, 'I think you're crazy, I think you should just buy a place in Sydney, go for the capital growth and move from there … ' It really shocked me … and I came away from it thinking, ‘Maybe I'm completely wrong in my thinking,’ ” he added.

Chris then bought a property in Marrickville—his principal place of residence—which has already nearly doubled in value after only four years.

3. You and your buyer’s agent must get along

Last but not the least, property investors must remember that their relationship with their buyer’s agent will most likely affect the kind of service that they receive. Chris has lined up six different agents before finally choosing a new guy from Cohen-Handler.

According to him, the experienced ones tend to work for many clients, which means he would have more competition for good properties in the open market. Moreover, among all of his choices, only the budding buyer’s agent took the time to drive him around different areas and look at properties with him.

Chris said: “I got comfortable with him … We went and stopped at a few properties and he pointed out some things and I got a gauge of what he'd be like to work with.”

“And I knew that, because he was new, he didn't have anyone else. He'd be … going headstrong, fighting just to find me a place and make a name ... in this new place that he'd joined,” he added.

Tune in to Chris McMullen’s episode on The Smart Property Investment Show to know more about the invaluable education processes and why, sometimes, it’s okay to be a “pain in the ass” towards your buyer’s agent.

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