Should your buyer’s agent be from the area you intend to buy in?

According to him: “You need to find someone who lives, breathes, understands, and has access to everything that's happening in the area that you're looking in … [so he could] answer your question—[it’s the] most important, vital part of who you hire.”

“You might find a property, but you might not know that there's a preschool next door, or there's a block of apartments being built, or it's just known as a C-grade street ... Whatever it might be, you want someone who knows that to give you that advice,” he added.

A good buyer’s agent will not only sit around and look at realestate.com.au for you and tell you which properties to buy. Instead, he’s familiar with a particular property market’s ins and outs—warts and all—and he can most likely give you access to assets that are both on- and off-market to help you find the best property deals that will otherwise be unknown to you had you chosen not to employ an agent.

In general, around 50 per cent of real estate stocks across different property markets in Australia are off-market, so having a buyer’s agent who has already established a good relationship with sellers essentially doubles the stocks that are available to you. Moreover, by using a buyer’s agent, you often get the first look at certain properties, minimising competition and the need for thorough negotiation.

Simon said: “Making sure you get access to everything that exists in the marketplace—that's what you want out of the buyer's agent.”

Once you have found the right buyer’s agent for you, it’s going to be hard for other investors to compete against you in the property markets, Smart Property Investment’s Phil Tarrant believes.

The risks of not using a buyer’s agent

There are several mistakes you can make when you refuse to get help from a buyer’s agent with local ground knowledge.

For one, according to Simon, you could be buying a property without knowing that there’s going to be a block of flats next door built in the next few months, or there might be a highway going across the road, or that there might be a nightmare neighbor, or even a kennel behind the property.

The property professional shared: “There's a property I heard about in St. Ives, in Sydney, on the National Park. The people bought the property [and] didn't realise that it had power lines on the roof, which … you can't take off.”

“[They] paid $2 million for the property, got a bank evaluation because, obviously, they were getting a mortgage, [and the issue] reduced the evaluation by a lot of money … because it makes it hard to sell [the] property due to radiation and all that sort of stuff.

“They couldn't get financed for the property … That's a huge mistake. You want to have someone on your side who's making sure that these mistakes don't happen,” he added.

Some property investors remain reluctant about getting a buyer’s agent to assist them in their investment journey, but Simon and Phil believe that it’s always going to be worth its weight in gold.

If you will be spending $15,000 for a buyer’s agent who can save you $60,000 worth of unexpected costs due to structural and cosmetic issues or a $100,000-dip in evaluation, then isn’t it the best $15,000 that you’re going to spend?

Phil said: “That's money well spent … [Don’t hesitate to use] a buyer's agent [who is] going to help [you] make a more informed, educated property investment decision.”

Simon advised property investors: “As long as the buyer's agent you use is on the ground … and is going out, and looking, and feeling at the property ... [then you’ve got the right one].”

“Anyone can sit online and we all know how good photographs look …. You need someone to be on the ground and looking at the property to make sure what's next door, what's behind it.

“Employ an area expert and I can assure you that, if they know the market and they're going to work for you like a buyer's agent should, the fee should really be irrelevant,” he concluded.

Tune in to Simon Cohen’s Q&A episode on the Smart Property Investment Show to know more about identifying assets that can be subdivided and why it’s important to do your research before implementing specific strategies, as well as the most useful measures to evaluate the performance of your property portfolio.

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