Engaging a buyer’s agent: The difference between ‘knowing neighbourhoods’ and ‘knowing markets’
Buyer’s agents are considered as one of the most valuable members of a property investor’s financial team, but how do you know that you’re engaging the right one?
According to Propertyology’s Simon Pressley, there are different skills you should look for in a buyer’s agent depending on your goal.
For instance, when you’re buying a principal place of residence, you may want to work with someone who has knowledge about the particular area you want to live in. Meanwhile, purchasing property as an asset will require a more in-depth understanding of the markets and how their movements can impact your portfolio.
Smart Property Investment’s Phil Tarrant explained: “If you're buying a house to live in ... It's pretty much … ‘I need a five-bedroom house with the pool and a backyard that's flat … and ... a little granny flat so mother-in-law could live in it,’ [so] it's good to get someone who actually knows that particular suburb intimately.”
“Whereas ... if it's an investment ... it's about ‘I want to find the best investment possible for my particular strategy and the point I’m at in my portfolio,’ and that can be anywhere,” he added.
Ultimately, investors are urged to engage buyer’s agents who know the market, rather than those who merely know the neighbourhood, Mr Pressley said.
Knowing the neighbourhood will help in more “emotional” purchases, such as picking your family home, but knowing the market will lead to creating more wealth, according to the property professional.
“If you want to invest, where you live [or] where you go to school has got nothing to do with it,” he highlighted.
A functional team
In order to make the best investment decisions, Mr Pressley strongly encouraged working not only with a buyer’s agent but with other property professionals whose expertise will add value to your portfolio.
As a property investor, your entire market is a total of eight states and territories with around 550 city councils. Before a buyer’s agent can help you pick the right property, you have to be able to identify the right market for you.
He said: “A buyer's agent will help you find a good property and negotiate a good price. But first, how do you find the market? Which market do you start the search in?”
A strategist and key members of a research company are some of the professionals that he recommends investors to engage with.
At the end of the day, Mr Pressley said, these professionals will work hand-in-hand to protect your investment by helping you do your due diligence and ultimately build a substantial portfolio.
“You ... need to have quality assurance in place to find the right property on the right street and to help the due diligence … so that your hard-earned investment dollar is protected,” the property professional concluded.
Tune in to Simon Pressley’s Q&A episode on The Smart Property Investment Show to know more about getting your foot in the door of property investment.
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