Speaker 1: Welcome to the Friends with Money podcast, brought to you
Speaker 1: by Money Magazine, creating financial freedom for Australians since nineteen
Speaker 1: ninety nine.
Speaker 2: Hello and thanks for joining us for another episode of
Speaker 2: Friends with Money, money Magazines podcast to help you earn, save,
Speaker 2: and achieve your financial goals. My name is Tom Watson,
Speaker 2: a senior journalist here at Money Magazine, and as always,
Speaker 2: it is a pleasure to be with you all. Buying
Speaker 2: a property is not an easy process, and to be fair,
Speaker 2: most people probably don't expect it to be. It's time consuming,
Speaker 2: you know, trawling through listings on domain and real estate
Speaker 2: during the week, plus you know, attending open homes on
Speaker 2: Saturday and Sunday. That can all take up a decent
Speaker 2: chunk of time, and then it can also be emotionally draining.
Speaker 2: Finding the right property itself is hard enough, but then
Speaker 2: you'll probably be in the position where you need to
Speaker 2: beat out other in trusted parties in order to secure it,
Speaker 2: which might not happen, so you've got to tank that
Speaker 2: setback in your stride. Definitely haven't done this myself recently anyway.
Speaker 2: That's all to say that it can be a lot.
Speaker 2: What people might not know though, is that there are
Speaker 2: actually professionals out there who can help with the buying process,
Speaker 2: and not just for investment properties, also for own occupier
Speaker 2: homes as well. These are called buyers agents. Some today's episode,
Speaker 2: we are going to run through all the various things
Speaker 2: that buyas agents can and can't do to help buyers,
Speaker 2: how much they will typically charge for their services, what
Speaker 2: to look for and avoid in a buyer's agent, and
Speaker 2: we'll finish off with some tips for budding buyers and
Speaker 2: to do all that. I am very pleased to say
Speaker 2: that we are joined today by Michelle May, the founder
Speaker 2: and principal buyas Agent and Michelle May buyas Agents. Michelle,
Speaker 2: welcome to Friends with Money.
Speaker 3: Hello, what an introduct that was amazing. I hope I.
Speaker 2: Set the scene for our chats today. Well enough, Michelle,
Speaker 2: but fantastic. I guess we'll see.
Speaker 1: Yeah.
Speaker 3: Well, I hope I can deliver. I mean I'm under
Speaker 3: the pump now.
Speaker 2: Oh, definitely definitely pressures on Michelle before we jump into
Speaker 2: some of the other questions today, I think it'd be
Speaker 2: great to focus on you for a second. So how
Speaker 2: long have you been working as a bias agent? You know,
Speaker 2: where is your agency base and what sort of buyers
Speaker 2: do you kind of typically work with.
Speaker 3: Yeah, so I've been a buyer's agent since two thousand
Speaker 3: and eight, which you know, it's a fair while now.
Speaker 3: I was probably one of the OG virus agents in Australia.
Speaker 3: I was very lucky to get an apprenticeship with really
Speaker 3: the true Ogs in Brisbane. When I first moved to Australia,
Speaker 3: I knocked on the door and said, please give me
Speaker 3: a job. I was an apprentice really for a year
Speaker 3: and obviously getting my license, et cetera, and I worked
Speaker 3: for other agencies before setting up my own agency seven
Speaker 3: years go. Now we focus on the Sydney metropolitan area
Speaker 3: and we have found that we are now venturing. You know,
Speaker 3: usually our cut off was in a west of Sydney,
Speaker 3: but as buyer demand has you know, grown, we're now
Speaker 3: doing Saint George River area as well a little bit
Speaker 3: of the suthern Shire Eastern suburbs and not sure but
Speaker 3: my team and I service those areas. Besides that, I
Speaker 3: also have a podcast called the Buyer Side Podcast, which
Speaker 3: is aimed at really educating those people that are new
Speaker 3: to buying, you know, talking about really practical things like
Speaker 3: looking at what do you need to look for in
Speaker 3: a strata report. When an agent says this, what do
Speaker 3: they actually mean? How to get ready for auction? All
Speaker 3: that kind of stuff. So they're short, sharp episodes that
Speaker 3: hopefully will bring a lot of value to those unassisted
Speaker 3: buyers out there.
Speaker 2: Sounds fantastic and I would definitely recommend if anyone else
Speaker 2: would like to go and check that out, especially, as
Speaker 2: you said, Michelle, for people who were just about to
Speaker 2: end of the market for the first time. Because as
Speaker 2: someone who has just done that, as the painful intro
Speaker 2: or the pain of my voice in the intro might
Speaker 2: have indicated, it is a process, I will say that,
Speaker 2: and that is.
Speaker 3: All I is a journey. And to answer your question
Speaker 3: of who do we look after, I think there's a
Speaker 3: little bit of a myth that using a bar's agent
Speaker 3: is only for the wealthy and famous and rich and famous.
Speaker 3: In fact, we work with a lot of first home
Speaker 3: buyers and I actually think that taking that first step
Speaker 3: on the property ladder is the most important one because
Speaker 3: if you buy dud, that really can really change the
Speaker 3: whole future of your property journey. You know, just to
Speaker 3: think about all those new apartments or that have been
Speaker 3: built in the last twenty years, the build quality is
Speaker 3: not the same as before, and so young buyers, you know,
Speaker 3: fresh buyers will fall for the traps of the new
Speaker 3: kitchen and the en suite and all that kind of
Speaker 3: stuff without really understanding the risks that are present in
Speaker 3: the strat report and the build quality and the running
Speaker 3: of the building, for example. So we actually really love
Speaker 3: working with those buyers because we add so much value
Speaker 3: to the journey as well as people who have bought
Speaker 3: numerous times. We do do have the rich and famous
Speaker 3: who remain anonymous, but we also you know, across the board,
Speaker 3: we service a range of different clients.
Speaker 2: I was about to ask you for names, but I
Speaker 2: guess that's not going to happen the sealed fair enough.
Speaker 2: Fair enough, you've already given us a little bit of
Speaker 2: a taste of what a bias agent does there than Michelle,
Speaker 2: But can we just start with the basics and get
Speaker 2: you to kind of expand on that. So what do
Speaker 2: buias agents do? And to be really clear, we are
Speaker 2: definitely not talking about the kind of selling agents that
Speaker 2: people probably might be more familiar with.
Speaker 3: Right, So a sales agent represents the vendor. A true
Speaker 3: bias agent because I know there are people out there
Speaker 3: that are dipping in both pools. A true bias agent
Speaker 3: will only ever represent the buyer. So I am working
Speaker 3: in the best interest of my client, the buyer, and
Speaker 3: I will always look out, you know, at the transaction.
Speaker 3: From that perspective, I'm protecting their rights. I'm protecting, you know,
Speaker 3: the quality of the property that they buy, the risks,
Speaker 3: the pitfalls, and through an enormous amount of due diligence.
Speaker 3: So a buyer's agent typically will offer different kinds of
Speaker 3: services that will go from anywhere from just auction bidding,
Speaker 3: so being the hired hand on the day if you're
Speaker 3: simply too nervous, you know, and I'm not familiar with
Speaker 3: in the auction process, and they can come in and
Speaker 3: they will represent you on the day and put their
Speaker 3: hand up and help you, you know, signing the contract,
Speaker 3: et cetera, to you finding a property, and then they
Speaker 3: come in and do the whole evaluation process and then
Speaker 3: help you decide a strategy whether to either go to
Speaker 3: auction or try and buy prior. That's when you have
Speaker 3: found the property yourself as the buyer. But then there's
Speaker 3: also the fully comprehensive search which is where. You know,
Speaker 3: you give us a brief and a budget, you know,
Speaker 3: an outline of what it is you're looking for where,
Speaker 3: and then we take that and run with it. So
Speaker 3: we do all the legwork for you. You know, that
Speaker 3: means uncovering off markets, pre markets, doing all the inspections,
Speaker 3: giving you you know, a video photos, an outline of
Speaker 3: the positives and negatives, and then we do all our
Speaker 3: due diligence. So that means comprehensive price evaluation, looking at
Speaker 3: you know, the pitfalls that could be detrimental to your
Speaker 3: enjoyment of living there or also the future value of
Speaker 3: the property, So think about things like infrastructure projects, development applications, rezoning, flooding, bushfire,
Speaker 3: you know, all that kind of stuff. We really take
Speaker 3: a real comprehensive look at the property and then give
Speaker 3: you an advice as to you know, you should or
Speaker 3: should not proceed and at what level price point would
Speaker 3: be a reasonable level to go forward. And then we
Speaker 3: also you know, devise a strategy with you know, the
Speaker 3: agent in mind, the vendors in mind, the market conditions
Speaker 3: and go, okay, well we need to move fast here
Speaker 3: because of X, Y Z or you know, we're better
Speaker 3: off waiting to auction and then snapping it up at auction,
Speaker 3: and that that process keeps repeating itself until you purchase,
Speaker 3: and that could be you know, a couple of weeks,
Speaker 3: it could be a couple of months, depending on you know,
Speaker 3: the type I guess, the specificity of the brief, but
Speaker 3: also market conditions, you know, things like that, because obviously,
Speaker 3: you know, you never know when the right property may
Speaker 3: may come on the market for you.
Speaker 2: Michelle I said that that was an excellent, excellent kind
Speaker 2: of run through of the various services that you can provide.
Speaker 2: So I think that's so helpful. One of the points
Speaker 2: I want to pick up on that you mentioned there,
Speaker 2: and this is someone that's always interested me when I've
Speaker 2: written about bias agents in the past, is this concept
Speaker 2: of off market listings. What does that term actually mean?
Speaker 2: And do buyers agents, I guess, really have access to
Speaker 2: a you know, pool of properties that regular buyers don't.
Speaker 3: Yeah, we really do. But I think it's really important
Speaker 3: because obviously, like well, you know, my clients have been
Speaker 3: honing their skills and their chosen professions. You know, whether
Speaker 3: their doctors are working in office, their teachers, whatever the
Speaker 3: case may be, about which I have no clue. I
Speaker 3: have been buying property since the age of twenty two,
Speaker 3: and so I've been honing my skills and also you know,
Speaker 3: honing relationships with agents and you know, in the local area,
Speaker 3: I know exactly where to look for what, you know,
Speaker 3: who to talk to to uncover those off market opportunities.
Speaker 3: But I think it's really important for those that are
Speaker 3: listening to understand that the term off market because it
Speaker 3: is seen as something exclusive and oh, there's less competition
Speaker 3: and I'm going to get my foot in the door.
Speaker 3: I'm going to get a better deal. There's a lot
Speaker 3: of misconceptions about that because there's it's actually now being
Speaker 3: used as a marketing tool by sales agents and by
Speaker 3: even domain for example, they have an off market portal,
Speaker 3: which the true meaning of an off market is of
Speaker 3: course that there has been no marketing done at all,
Speaker 3: and it's a transaction between one vendor and one buyer,
Speaker 3: you know, and they get a deal done as soon
Speaker 3: as there's any marketing involved. So as soon as you
Speaker 3: get an agent's email saying off market, it's been sent
Speaker 3: to everyone in their database people, which is thousands and
Speaker 3: thousands of people. So it is effectively just another open
Speaker 3: for inspection, and so strategically, a lot of those agents
Speaker 3: will use the term off market for a two week
Speaker 3: period where they just use their database, okay, and if
Speaker 3: they can get a deal done in those two weeks, fantastic.
Speaker 3: Then the vendor hasn't spent the money on advertising, it
Speaker 3: on domain and real estate and all those other portals.
Speaker 3: But they've very often already done the photos, they're very
Speaker 3: often already done the styling, okay, so the ideas and
Speaker 3: that they get the premium that they want. Sometimes it
Speaker 3: is used also by the sales agent to condition the
Speaker 3: vendor because potentially the vendor has unrealistic expectations, right if
Speaker 3: they don't get the premium and then goes on the market.
Speaker 3: But don't forget that two week period. Every you know,
Speaker 3: everybody is a grandmother and their dog are coming through
Speaker 3: just like you are, because they also got the email.
Speaker 3: So there's that to take into consideration. The other thing
Speaker 3: is also to remember that an off market doesn't mean
Speaker 3: it's a better property. It still needs to go through
Speaker 3: the filter of due diligence, It still needs to stack
Speaker 3: up financially, it still needs to you know, make sure
Speaker 3: it's not in a flood plane, it's not on a
Speaker 3: major road. All those things, right, you still need to
Speaker 3: look at it and really take your time to ensure
Speaker 3: that you're not being sort of pulled in by the
Speaker 3: allure of it being an off market.
Speaker 2: And where do you come across these off market properties, Michelle,
Speaker 2: Obviously the true ones, these connections that you already have
Speaker 2: in the areas that you're kind of you know, helping
Speaker 2: buyers buying, or where do they come from?
Speaker 3: So they do come from sales agents. Also, don't don't
Speaker 3: forget that they do come from sales agents because as
Speaker 3: a bar's agent, I speak their language. I have qualified buyers,
Speaker 3: people who have pre approval in place, who are serious
Speaker 3: obviously about purchasing because they have engaged me and are
Speaker 3: paying for my services. So selling agents know this right.
Speaker 3: And there are some selling agents who predominantly work off
Speaker 3: market with bars agents only, so obviously I'm on speed
Speaker 3: deal with them. So as soon as I have a
Speaker 3: client with a brief, I will reach out to them
Speaker 3: and go, hey, what have you got? And don't forget
Speaker 3: the good selling agents they have been, you know, talking
Speaker 3: to owners over many many months, sometimes years, to say hey,
Speaker 3: are you ready to sell? Oh I'm not ready yet. Okay,
Speaker 3: I'll get in touch with you in six months. So
Speaker 3: if they then have a bar's agent in front of
Speaker 3: them who has a client who's ready to act, they
Speaker 3: may then go, oh, actually I spoke to mister Johnson
Speaker 3: four months ago. Let me just call out to him
Speaker 3: and see whether he would be willing to show you through.
Speaker 3: So there's that aspect of it. I have been in
Speaker 3: my area in the Inno west of Sydney for quite
Speaker 3: a number of years now, so I have a local
Speaker 3: community and they all know that I'm a barer's agent,
Speaker 3: so you know, they will contact me directly and say, hey,
Speaker 3: I'm thinking of selling, have you got a client? All
Speaker 3: that kind of stuff. But also the marketing that we do,
Speaker 3: the social media, people know where we are. You're easy
Speaker 3: to find, so we have people from all over contacting
Speaker 3: us directly saying hey, I'm wanting to sell. I'm not
Speaker 3: necessarily wanting to use a sales agent. Have you got someone?
Speaker 3: So there's different avenues how I find them and how
Speaker 3: they come to us.
Speaker 2: That's so interesting and as again as someone who just
Speaker 2: bought and didn't have access to that, it's fascinating that
Speaker 2: that that's out there, Mitchelle. Before we get into some
Speaker 2: buying tips, I've got two kind of fundamental questions left
Speaker 2: about buyers agents that I definitely want to run by you.
Speaker 2: And the first of these is how much should you
Speaker 2: know a prospective buyer you know, put away or how
Speaker 2: much should they expect it to pay for the service
Speaker 2: of a buyer's agent. And I assume that there's a
Speaker 2: bit of a spectrum involved in Yeah.
Speaker 3: Look, there's three main ways on how buyers agents tend
Speaker 3: to charge. There is the fixed fee system, which is
Speaker 3: what we do, which I believe is the fairest. It
Speaker 3: is looking at your brief and your budget and looking
Speaker 3: at the complexity of the search and going okay, this
Speaker 3: is how much we're going to charge you. We do
Speaker 3: not have a time limit in our agency agreements because
Speaker 3: I do not believe that it's fair to put a
Speaker 3: ticking time clock above your head going you have to
Speaker 3: buy within three months. So for us, we only take
Speaker 3: on clients that we know we can actually help, and
Speaker 3: so we charge a fixed fee. And that sometimes does
Speaker 3: mean that for a first you know, a first home
Speaker 3: buy we bring so much education to the table, right
Speaker 3: which for us is more labor intensive. But we've got
Speaker 3: a baseline fee that we charge minimum for everybody. And
Speaker 3: then there are those BARS agents that will charge a
Speaker 3: tiered system, so depending on where your budget sits, the
Speaker 3: fee will be higher or lower. And then there is
Speaker 3: the percentage fee, which could be anywhere between one to
Speaker 3: two two and a half percent. Now to me, I
Speaker 3: think any BARS agents who charges that, I find it
Speaker 3: hard how they can justify this. I mean, to me,
Speaker 3: it's a complete conflict of interest because as.
Speaker 2: A percentage fee we're talking about right.
Speaker 3: Now, yes, correct, I mean, the more you pay as
Speaker 3: my client, the more I get paid. You certainly take
Speaker 3: away the incentive to negotiate hard when it's probably the
Speaker 3: most needed, right because why would you try for the
Speaker 3: last ten percent because you know it's actually cutting your income.
Speaker 3: So I would be I would be weary of of
Speaker 3: stepping into the barer's agency, you know, bolt with someone
Speaker 3: who does that. Same with the tiered system, because it
Speaker 3: would imply that the bigger your budget, the more I
Speaker 3: should get paid, which actually it's quite opposite. You know,
Speaker 3: Usually the opposite is true. The bigger budgets are usually
Speaker 3: easier to satisfy, and it's a different type of client
Speaker 3: as well. So yeah, those are typically the three different
Speaker 3: kinds of charging.
Speaker 2: Makes a lot of sense, Michelle. We are fast running
Speaker 2: out of time today, but before I let you go,
Speaker 2: I really want to kind of tap into your experience
Speaker 2: and the knowledge that you have that you've accumulated over
Speaker 2: the past and trying to do the mess down two
Speaker 2: thousand and eight to twenty twenty four. What's that? Sixteen years?
Speaker 3: Don't say it out.
Speaker 1: Loud, I know.
Speaker 2: Sorry, sorry, So I guess on that note, do you
Speaker 2: have any tips for buyers about the buying process in general?
Speaker 2: I guess, especially as you've been talking about for people
Speaker 2: looking to enter the market for the first time.
Speaker 3: Yeah. Absolutely, Look it's not everyone starts it off all
Speaker 3: fun and games and they love going to inspections and
Speaker 3: it's you know, exciting. But and I get that. I
Speaker 3: understand that because it's you know, buying a property is
Speaker 3: a very emotional experience and it usually goes hand in
Speaker 3: hand with the life experience. You know, a new job,
Speaker 3: a new city, potentially baby, et cetera. And you get
Speaker 3: lured in by the pretty pictures and the salespiel and
Speaker 3: you know all that kind of stuff. So it's really
Speaker 3: important to take the emotion out of it initially and
Speaker 3: do your due diligence upfront. So make sure you go
Speaker 3: to a broker, get your finance approve before you start
Speaker 3: shopping around. Really, you can do your research before, but
Speaker 3: don't fall in love with something before you have your
Speaker 3: pre approval in place. I recommend looking at the soul
Speaker 3: section of the big portals and the agent's website as
Speaker 3: opposed to what is for sale, because you and I
Speaker 3: both know that guides can may or may not be accurate.
Speaker 3: Let's leave it at that, yes, So rather than getting
Speaker 3: lured in, go to the sold section and then put
Speaker 3: in say the address the area that you want to
Speaker 3: be in, and see and put in your max budget right,
Speaker 3: so say it's eight hundred whether you know five hundred
Speaker 3: two mil, and see what you could have bought in
Speaker 3: the last two to three months, because then you'll see
Speaker 3: a real pattern arriving right, You'll see it's our all
Speaker 3: two bedrooms. If it's a three better, it's on a
Speaker 3: really main road, you know, big busy road, So then
Speaker 3: you'll see, okay, I can actually only afford it two better.
Speaker 3: If you need a three better, do the map search
Speaker 3: and see where three betters are all falling within your budget,
Speaker 3: because then you can start your search with so much
Speaker 3: more focus rather than giving into that wishful thinking, which
Speaker 3: actually will work so against you because you'll get to
Speaker 3: a point where you've been, you know, let up garden paths.
Speaker 3: So you go to a couple of auctions, you miss out,
Speaker 3: you spend money on strata reports, you spend money on
Speaker 3: building a pest, and you never really had a chance
Speaker 3: in the first place. Then you get burnt out, you
Speaker 3: leave the market. You come back a couple of months later,
Speaker 3: the market has gone up, and in that time there
Speaker 3: was something you could have bought, but you didn't see
Speaker 3: it because you were over it, you know. So you
Speaker 3: really got to ensure that you don't get to that point,
Speaker 3: because the other risk is that you'll end up buying
Speaker 3: something that you never would have bought at the beginning
Speaker 3: of your search, but you're so over it you this
Speaker 3: will do. It's a little bit like the rebound boyfriend
Speaker 3: or girlfriend. You know, it's like, nah, this is never
Speaker 3: gonna this is not a good idea. So that's you
Speaker 3: don't want to do that with the property because obviously
Speaker 3: the costs are huge to get out. You know, you
Speaker 3: think of stamp duty's selling, moving, all that stress, so
Speaker 3: you got to get it right. So do that a
Speaker 3: little bit upfront. It'll help you.
Speaker 2: I think that's excellent advice, and I think it really
Speaker 2: kind of emphasized is the bit that I was talking
Speaker 2: about up top, about the emotional kind of toil that
Speaker 2: the search process takes on people. You know, I've experienced
Speaker 2: that first time quite recently and can attest to the
Speaker 2: fact that the more realistic you are going in, the
Speaker 2: better it will be and the less likely, as you said,
Speaker 2: that you're going to to dip out or find the
Speaker 2: process to overwhelming. Michelle. I think that's an excellent place
Speaker 2: to end things today. So thank you so much for
Speaker 2: joining us on Friends with Money. It's been a pleasure,
Speaker 2: and I one want to get you back on to
Speaker 2: chat about auctions and other bits and pieces in the future,
Speaker 2: so if you're keen, we'll definitely have you back before
Speaker 2: too long.
Speaker 1: Yeah.
Speaker 3: Absolutely, it's been my Fletcher. Thank you so much for
Speaker 3: the great questions and yeah, I mean, once I get
Speaker 3: started about talking about property, you'll never shut me up.
Speaker 3: So for you, thank you so much.
Speaker 2: That's it for this episode of the Friends of Money podcast,
Speaker 2: but don't forget to jump on our website moneymag dot
Speaker 2: com dot Au for your daily dose of financial news,
Speaker 2: or you can go grabe yourself a copy of the
Speaker 2: led US edition of Money Magazine in all good news agents.
Speaker 2: As always, Frends of Money will be all right back
Speaker 2: in your podcast feed next week, so until then, I
Speaker 2: am Tom Watson.
Speaker 1: Goodbye for now, Thanks for listening to the Friends with
Speaker 1: Money podcast. For credible, independent and easy to understand financial commentary,
Speaker 1: visit moneymag dot com au. Please remember that the views
Speaker 1: and opinions expressed in this podcast are general in nature
Speaker 1: and further independent advice and research based on your personal
Speaker 1: circumstances should be sought before making an investment decision