Sydney Morning Herald, 4 April 2009
By Susan Wellings
A buyer’s agent can be your secret weapon when purchasing property in a complex market.
The house was originally listed for $1.5 million but was eventually bought for slightly more than $1.1 million. The soft market and falling prices obviously did their bit but Theresa Simonsen is adamant the credit should be shared elsewhere.
“Taking on a buyer’s agent really helped us,” she says. “They’re so much better at negotiating and knowing exactly how much a property is worth. They won’t let you pay over the odds.”
Buyer’s agents are qualified real-estate professionals who work exclusively on behalf of property buyers, while the traditional agent works for the seller and is intent on achieving the highest possible price.
The negotiation skills of buyer’s agents, access to price and neighbourhood research and knowledge of not only who’s selling but who is thinking of selling, as well as who might be amenable to selling, have seen their popularity increase.
The number of buyer’s agents is increasing, according to the Real Estate Institute of NSW (REINSW). It says 257 of its members have indicated it is part of their practice, while the Real Estate Buyers Agents Association of Australia (REBAAA) says about 50 firms around Australia act exclusively as buyer’s agents (25 are in NSW), compared with just two 10 years ago.
“I’d say we’re still eight to 10 years behind the UK market, where this system started,” says Byron Rose, the REBAAA president. “In central London, currently over 90 per cent of all $5 million-plus property is conducted by buyer’s agents but here we’re growing all the time.”
Yanking the bridle
“I actually think buyer’s agents are terrific,” says Mr Sold auctioneer Scott Gibbons. “If they make buyers feel more comfortable in today’s market by doing the search then bidding for them at auction, why not?
“And you don’t have to worry they’ll do anything without your knowledge. They have a bridle on them so you can yank them back at any time. They’re another tool people can use whenever they want to buy property, whenever they’re trying to be more strategic.”
We employ lawyers when there’s a legal problem to tackle, or surveyors when we need a building checked, so why not take on a professional to help in what’s likely to be the biggest purchase you’ll make in your life, asks Tim McKibbin, the chief executive of the REINSW.
“It’s an increasingly complex marketplace and I think, at the end of the day, it’s good to have a professional acting for you,” he says.
A director at Cooley Auctions, Damien Cooley, agrees there has been a definite rise in demand for buyer’s agents, particularly in the market for million-dollar-plus homes on the lower North Shore, in the eastern suburbs and around the inner west. “We were a little bit taken aback when they first turned up,” he says.
“But in the last four years they’ve become a lot more prominent and we’ve got a lot of respect for them.”
A former lawyer and worker for the children’s educational charity Room To Read, Kathryn Chiba, hired a buyer’s agent to help her find her dream house when she returned to Sydney after 18 years overseas and interstate.
“I was also time-poor and I wanted to take the stress away from buying a house,” she says. “I’ve got two small children, so I didn’t want to spend a lot of time looking for a house.”
She chose Dennis Kalofonos, the principal of Sydney Property Finders, to help her. He found a number of houses in Woollahra that matched her criteria, including some that hadn’t even gone on the market, some whose marketing campaign had yet to start and one or two rental properties, the owners of which he knew would sell if the price were right.
After viewing 27 properties in three days, Chiba knew exactly what she wanted. Kalofonos and his team then hunted down the perfect buy – a four-bedroom house with a five-car garage and an in-ground pool – did all the research about the building, its value, the street and the area and finally went in to negotiate on her behalf.
“We have a valuer, a property analyst and an administrator on staff, so we have four, if not five, specialists all focused on each client,” says Kalofonos, who charges a fixed fee, which tends to work out at about 1.5 per cent of the house price.
As for Chiba, 42, she’s now very happy in her new $5.9 million home. “I got to see a lot of things that hadn’thit the radar,” she says. “And then we were able to choose a house that’s right for us at this particular time.”
When Theresa Simonsen’s husband, Tony, decided he’d like to buy a property with the help of a buyer’s agent, she was appalled. She was adamant it’d be a waste of money. He’d bought three homes previously without any outside help but thought a buyer’s agent could make the most of the opportunity to buy a more expensive house in a buyer’s market.
The results speak for themselves. “I think that decision saved us tens of thousands of dollars in the end,” says Tony, 44. “The agent had a quite unemotional approach. We were: ‘We want this house! Maybe we’ll pay a little bit more.’ But she negotiated with the agent without any of that emotion.”
Jacque Parker, who became a buyer’s agent after a career as a teacher and 17 years investing in property, says her catch-phrase is: search, locate, evaluate, negotiate. “Most people only buy a property once every seven years, so they’re not used to the whole process and the games people play,” she says.
In addition, buyer’s agents find out as soon as a property is listed on the Monday – and a good one could be gone by the Saturday, when most people start looking. Parker’s fee starts at $495 for a single property report and at $5990 for her full search, evaluation and negotiation service.
The five-bedroom house on two acres at Box Hill she bought for the Simonsens was originally listed at $1.5 million but ended up going for just more than $1.1 million.
Sitting in a restaurant over dinner, design consultant Andrew Lewis and his wife Susanne were thrilled someone else was at the auction doing their bidding and negotiating for them.
“I’m working and I have three young kids,” says Lewis, 54, “so it would have been difficult for us to go from house to house to house, looking for what’d be right.”
Instead, Lewis called Peter Kelaher, of PK Property Search & Negotiators, who looked, evaluated and then bid on his behalf. He’s now bought five properties through him, including his home in Mosman.
“We know the market and getting the right price and terms for our clients,” Kelaher says. “The average buyer sees only 70 per cent of what’s on the market through newspapers and the internet. We have access to a lot more and, in 95 per cent of cases, I will negate my fee on the savings.”
Lewis says Kelaher, whose fees start at $425 to bid at auction and up to 2 per cent of the purchase price for the full search, valuation and negotiation, often varies his buying strategy. Once, for instance, he asked Lewis to come to the auction and play the role of the disinterested onlooker who just couldn’t afford the price.
Mostly, though, he’s persuaded not to attend, to give the impression that he’s definitely not in the running.
Those times, Lewis and his wife simply go out for dinner and wait for the call. “Sometimes, it’s debatable if it saves you money,” Lewis says. “But as you finish your main and go for dessert, then get the call, it’s much, much lower on the scale of anxiety.”