The pros and cons of using a buyer’s agent

Like all things in life, hiring a buyer’s agent comes with pros and cons. For many investors, though, the positives are likely to outweigh the negatives.

Property investors have two main concerns when it comes to using a buyer’s agent. The first is trust – will this buyer’s agent look out for our best interests? The second is money – should we really pay for a service that we could do ourselves?

These are legitimate concerns, which is why some investors will ultimately choose the self- service option. We respect their decision.

But we also believe that if you pick an ethical and skilful buyer’s agent, the positives will almost certainly outweigh the negatives.

A trusted expert could make you hundreds of thousands of dollars

Let’s address the first concern, which is trust. When you search for a buyer’s agent, look for one with strong testimonials. That’s a really good sign that the buyer’s agent is ethical and will look out for your best interests.

The second concern is fee. No one likes spending money, so it’s understandable that some investors might choose the cheap option of buying the property themselves. However, it’s important to put the fee into perspective.

If you plan to hold your investment property for several decades, the price growth differential between buying a quality asset (which a skilful buyer’s agent will choose) and a substandard asset (which an amateur investor might choose) could add up to hundreds of thousands of dollars – making the fee you paid look like a bargain.

Even better, a skilful buyer’s agent will be not only a great researcher but also a great negotiator. A skilful buyer’s agent will know how much a property is really worth, and how hot the local market is, which means they will know exactly how high or low to place their bid.

Why cheap and expensive might not be all they seem

Many investors don’t have time to research and buy property. They’re sick of missing out. They’re afraid of buying the wrong property. Often, they don’t know where to start with research – or they’ve done so much research they’ve become afflicted with analysis paralysis.

A buyer’s agent who spends his days researching economic data, inspecting properties and negotiating deals is far more likely to buy a quality asset at a fair price than an amateur investor who might only buy a handful of properties in their lifetime.

Similarly, a professional athlete who plays and trains every day is going to perform at a much higher level than someone who kicks a ball around every now and then.

That’s why the cheap option of doing it yourself offer turns out to be the expensive option, while the expensive option of using a professional buyer’s agent often turns out to be the cheap option.