Expert Advice with Kate Forbes
Using a buyer’s agent for an investment property purchase is becoming more common by the day.
That’s because savvy investors understand that it pays to work with experts to secure the very best investment grade properties. However, using a buyer’s agent to buy your home is not so well understood.
That’s mainly because many home buyers don’t even think about the investment potential of their homes before they purchase them. Rather, they are too caught up in their emotional connection with their potential new home.
Of course, that often means they pay too much – especially at auction.
The thing is, there are four solid reasons why home buyers should use a buyer’s agent.
As I’ve already mentioned, buying a home is usually synonymous with emotions. People get caught up in living in their dream suburb or location and often go over their budget to achieve it. What most home buyers don’t understand is that your home is also a property investment, so the same fundamentals apply, including keeping your emotions at the front door. Clearly, there is where a buyer’s agent comes to the fore because they are professionals who won’t let a home buyer buy with their heart and not their head.
2. Future performance
In a similar vein, most home buyers give scant regard to the future price performance of their new abode.
Usually that’s because they are yet to shift in, so they can’t imagine ever shifting out. The truth of the matter is that most people sell within about five years for myriad reasons.
A buyer’s agent knows this and will ensure that your home has the very best chance of achieving solid annual capital growth.
3. Speed and precision
Home buyers usually compete for similar properties and that ultimately drives up prices. Consider suburbs close to capital cities, which generally are in strong demand from owner occupiers. Even in flat market conditions, competition for these homes is strong, so home buyers need to have all of their ducks in a row to have the best chance of success.
Working with a buyer’s agent means that the buyer is ready to buy, including finance pre-approval. Selling agents know this, too, which means that home buyers working with buyer’s agents have a step up on the competition already.
At the end of the day, a sales agent wants to achieve the best price for the property for their vendor. However, they also want to work with qualified buyers who aren’t going to offer an absurd number that they will never get finance for.
4. Secret sales
Home buyers generally desire to live in specific suburbs, or if they already live in their ideal location, they only move a few streets away. However, it can be difficult for them to purchase a home in those locations because of the similar aspirations of many other potential buyers. Again, this is where a buyer’s agent comes into his or her own, because they have strong networks with local selling agents. Those sales agents often have properties that are being sold off-market – which means they are not publicly listed for sale.
Sometimes that’s because of privacy reasons or sometimes it’s because it’s a deceased estate or there has been a divorce. Regardless of the reason, ordinary home buyers would never know about these opportunities.
Therefore, they would likely sit and wait in vain for the house of their dreams to come on the market.
Of course, behind the scenes, that home is being sold to another buyer who was savvy enough to enlist a professional to help them achieve their home ownership goal.
You see, most people will own a number of homes during their lifetimes.
They will upgrade along the way to hopefully end up in the house of their dreams – one day.
The thing is, those likely to achieve their ultimately property goal are the ones who treated each home purchase as an investment decision and worked with experts to make it happen.
Kate Forbes is a National Director at Metropole Property Strategists. She has 15 years of investment experience in financial markets in two continents, is qualified in multiple disciplines and is also a chartered financial analyst (CFA).
She is a regular commentator for Michael Yardney’s Property Update
Read more Expert Advice from Kate here!
Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.