Investing in Residential Real Estate is one of the easiest ways to build long term wealth and financial security but, like most investments, it doesn’t come without its risks. Buying a home to live in and buying an Investment Property are two very different purchases. Choosing a home in which to live and potentially raise a family is typically a very emotional purchase where the decision is made factoring in many variables which will impact your quality of life. These variables can include proximity to infrastructure such as transport, schools, shopping centres, employment and quite often the visual appeal of the home is a considerable factor.
While these variables also come into play with an Investment property and are factors potential tenants will take into account, as the owner of an Investment property other factors are equally, if not, more important. Rental returns, vacancy rates, timing of the property cycle, maintenance requirements, body corporate fees, finance options etc are just some of the additional considerations which need to be carefully thought through when making a wise purchase of an Investment property.
The team at PPA can help you navigate your way through all of these factors to ensure you purchase the right property in the right location at the right time to ensure the maximum possible return on your investment.
Other reasons to use Buyer’s Agents include:
The bottom line is that a Buyers Agent removes a lot of the emotional turmoil, hassle, time and unnecessary financial expense involved with purchasing a property
As an example, for the Full Service Buyers Agency, these are some of the steps involved in the process of purchasing a property on behalf of a client.
Prices vary depending on the service required by each client.
Bidding at Auction – Flat Fee of $1200
Real Estate Agent Selection – Flat fee of $1200
Negotiation Only – Typically this will either be a flat fee or a percentage of the purchase price. The fee can vary depending on the complexity of the negotiation, whether travel is required and a host of other factors.
Full Service – Again this can vary but ordinarily it’s either a flat fee or a percentage of the purchase price.
This often depends on exactly the type of property we are looking to purchase but as a general rule, you can expect 4-6 weeks for an Investment Property and anywhere from 4-12 for a Residential Property. Of course there are always exceptions to this and quite often clients are surprised to find that we can find suitable properties within a week or two.
When a potential purchaser expresses interest in a particular property, they will invariably end up talking to the Real Estate Agent who is working for the Vendor. The Real Estate Agent will attempt to extract as much information as they can from a purchaser such as their budget, how long they have been looking, properties they have missed out on and by how much etc. This is extremely valuable information that the Agent can potentially use at the Auction to get a purchaser emotionally invested in a property and potentially pay more than they need to.
By having P.P.A represent you at the Auction, the Agent cannot see you in the crowd and therefore cannot use any tactics to get you too emotionally invested in the Auction process and drive up the price. Auctioneers often use FOMO (Fear Of Missing Out) and experienced Auctioneers can drive the price of the property closer to your maximum budget available by liaising with the Agent with whom you’ve previously disclosed this information.
Quite often when we hear of properties being sold at Auction way above the reserve price, it’s because an Agent has had two emotionally invested people and more often than not, knows their budget and can use this to the Agents / Vendors advantage. When you are being represented by an emotionally neutral 3rd party who understands what Agents are doing at the Auction you are in a far better position to not overpay for the property.