Australian Property Market Update: Latest Data by State – November 12, 2024
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October 25, 2024
6 Essential questions to consider before hiring a buyer’s agent.
The way property is bought and sold has changed significantly in Australia over the past few decades.
Not only have listings transitioned from shop windows to online portals, but buyer agents have also become a growing part of the sector.
While they have long been established in the US, it is only recently that they have staked a claim here.
Compared to selling agents, they remain a small minority in the sector, and as with many changes, legislation is taking time to catch up.
This makes it imperative to do your homework before engaging someone to buy property on your behalf—because sometimes they might be not what they seem.
To help you navigate this process, here are five essential questions to ask before hiring a buyer’s agent.
1. Are you licensed?
While real estate legislation varies across each State and Territory, property professionals typically hold a real estate license. You can verify whether the person you are dealing with is appropriately licensed by checking with your local Office of Fair Trading.
A licensed buyer’s agent works solely for the buyer, meaning they do not sell the property themselves; in fact, it is illegal to operate on both sides of a transaction in Australia. In contrast, spruikers often lack any qualifications and aim to market inferior properties to unsuspecting buyers, which underscores the importance of this question.
Additionally, it’s essential to consider transparency and trustworthiness in your dealings to ensure professional standards are met.
2. How are you paid?
Professional buyer’s agents work exclusively for buyers, meaning they are paid by them. They are 100 percent independent and have a legal duty to operate in the best interest of their client, the buyer. In contrast, marketers and some so-called “property mentors” lack such an ethical standpoint. Often unlicensed, they don’t face any legal ramifications for their actions.
Unfortunately, this situation may lead them to charge a buyer a fee for locating a property while also receiving a sales commission kickback for recommending a property—typically one that is off-the-plan. If you ask them about this and they refuse to answer, then something is not quite right. Transparency is crucial for a trustworthy relationship, and it’s essential to seek out client-focused agents who provide unbiased advice and demonstrate accountability in their dealings.
3. Which associations do you belong to?
This brings us to an important question regarding the professionalism of the individual you are dealing with. Buyer’s agents and property investment advisers typically belong to relevant industry associations, demonstrating their commitment to an ethical sector.
They may be members of the Property Investment Professionals of Australia, like myself, or the Real Estate Buyers Association of Australia, as well as various local real estate institutes, all of which require their members to abide by strict codes of conduct.
In contrast, spruikers do not belong to any associations because their time in the sector is often short-lived. They make their money from unwary buyers and then promptly disappear into the night, lacking the trustworthy integrity and long-term commitment that reputable professionals uphold.
4. Are you a property investor?
Buyer’s agents are committed to property investment because they believe heart and soul in its potential as a wealth creation vehicle for both their clients and themselves.
It’s essential to ensure that your buyer’s agent is also a personal investment enthusiast. If they aren’t, how can you trust that they are knowledgeable about the market?
Additionally, inquire whether they actively follow the investment strategy they are recommending to you. If they don’t, you should question whether their suggestions are merely an avenue for profit—an opportunity for them to make money at your expense.
Look for a trustworthy, client-focused agent who provides authentic guidance, upholds professional integrity, and is dedicated to your financial success. A value-driven approach will empower you to achieve your investment goals.
5. Are you part of a team?
Although the buyer’s agency sector is growing and attracting new talent consistently, experience remains vitally important. Your buyer’s agent should be part of a team with substantial property investment experience across various market cycles, offering a depth of experience and thorough research.
They should not operate as one-man bands using only a mobile phone and a PO Box number. Being part of a team provides access to a wider range of industry contacts, which often leads to more off-market properties. Additionally, it offers the opportunity to challenge your ideas and creates better opportunities for ongoing training.
A good buyer’s agent will have a strong support team, and their company will feature a dedicated research department to ensure comprehensive insights and enhanced service through a collaborative environment of trusted expertise.
6. How long have they been in the game?
Believe it or not, we’ve faced three significant property slumps over the last decade.
The downturn in 2009 was triggered by interest rates rising to 9%.
In 2012, we experienced another slump, again caused by rising interest rates, which peaked at 8%.
Now, we are dealing with the current credit squeeze-induced slump.
However, many of today’s buyers’ agents have not experienced downturns firsthand. Consider the recent price surge in Sydney—if your potential agent only has experience from this most recent cycle, their success may simply be due to the fact that a rising tide lifts all ships.
On the other hand, if they can provide solid evidence of investment success in soft market conditions, it shows they clearly know what they’re doing. Be cautious of spruikers, as they will likely share only recent examples of growth, which may simply reflect a market upswing rather than any sophisticated investment strategy.
While some people still get caught out by promises that are just too good to be true, the smartest investors know who is who in the real estate zoo – and can spot a spruiker from a mile away.
Are you wondering how you should invest in this interesting phase of the property cycle?
If you’re like many property investors, you may be questioning what the right thing to do is at present.
Should you buy, sell, or simply wait?
You can trust the buyers’ agents in Sydney at Ash Buyers Agency to provide you with the direction, guidance, and results you need.
Whether you’re a beginner or an experienced investor, in times like those we are currently experiencing, you require an advisor who employs a holistic approach to your wealth creation. With their proven expertise and strategic insights, you get the support necessary to make informed decisions.
We help our clients grow, protect, and pass on their wealth through a range of services including:
- Strategic Property Advice – Let us help you build a Strategic Property Plan for you and your family. Planning is about bringing the future into the present so you can take action today! Click here to learn more.
- Buyer’s Agency – As Australia’s most trusted buyers’ agents, We can do the same for you. Our on-the-ground teams in Sydney offer years of experience and perspective—insights that money simply can’t buy. We’ll assist you in finding your next home or an investment-grade property. Click here to learn how we can help you.
- Wealth Advisory – Our team can provide you with tailored financial planning and wealth advice. Click here to learn more about how we can assist you.
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