Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. Welcome to Merin Talks
Speaker 1: Your Money, the personal finance edition of Merin Talks Money.
Speaker 1: In these bonus podcasts, we talk about the best strategies
Speaker 1: for making the most of your money. I'm Merin sumst Web,
Speaker 1: Bloomberg UK Wealth Editor at Large and with me senior
Speaker 1: reporter and author of the Money Distilled newsletter, John Steberg. Hi, John, him. So,
Speaker 1: we are rattling through this housing business right So so
Speaker 1: far we've been through the general state of UK housing.
Speaker 1: We've looked at where and how to get a mortgage broker,
Speaker 1: We've looked at shared ownership properties, etc. And we've looked
Speaker 1: at why new bills might or might not be a
Speaker 1: good thing to buy. I think we know what we
Speaker 1: think on that. I was going to ask you what
Speaker 1: your favorite is so far, John, but actually you've been
Speaker 1: kind of outraged at every step of the way. So
Speaker 1: you haven't had a favorite. You've probably had one that's
Speaker 1: made you most angry and most upset. Which one is
Speaker 1: being so far?
Speaker 2: I think I'm getting a reputation.
Speaker 1: Here age John.
Speaker 2: To be honest, I'm just a grumpy old mind. No,
Speaker 2: it's the new build one. I mean, I'd heard the
Speaker 2: turn fleecehold, and obviously I do a fair bit about leasehold,
Speaker 2: but just the extent of the kind of badness and
Speaker 2: how people are being coined basically just to just blew
Speaker 2: my mind if I'm honest, which basically means it's my
Speaker 2: favorite because I like it and angry.
Speaker 1: Okay, So how do we avoid this kind of thing?
Speaker 1: How do we make sure that no merin talks your money.
Speaker 1: Listeners ever end up with a house that brings them
Speaker 1: nasty surprises that turns out to be a liability not
Speaker 1: an asset. Well, this podcast always has an answer, and
Speaker 1: today we have the perfect guest to talk about this,
Speaker 1: because what you actually need to make sure that your
Speaker 1: life is not destroyed by buying the wrong house at
Speaker 1: the wrong price is a buying agent. So today we
Speaker 1: are joined by camilladel Kimilidell is managing partner and founder
Speaker 1: of Black Brick Property Solutions and has worked in the
Speaker 1: London property markets and it's two thousand and two, very
Speaker 1: experienced meeting the needs of demanding domestic and international property buyers.
Speaker 1: Welcome to the show, Camilla.
Speaker 3: Thank you, Maren, thanks so much for having me.
Speaker 1: Oh, it's a pleasure right, So you are a buying agent.
Speaker 1: So first two questions, One what is a buying agent?
Speaker 1: And two why do we need one?
Speaker 3: A buying agent is a property professional that represents the
Speaker 3: interests of the buyer on a property transaction. I think
Speaker 3: the best way to think of us is the complete
Speaker 3: opposite to an estate agent. State agents are there to
Speaker 3: represent the interests of the seller. They're there to market
Speaker 3: and advertise properties for sale, and they're there to try
Speaker 3: and sell, primarily stock that they're directly instructed on as
Speaker 3: a priority, and then to try and get the highest
Speaker 3: possible price they can for their client, being the seller. Typically,
Speaker 3: buyers have nobody represent them. I often love to use
Speaker 3: the analogy that going into the property market without a
Speaker 3: buying agent is a bit like going to court without
Speaker 3: a lawyer. You'd never dream of representing yourself. And yet
Speaker 3: when it comes to buying property, which is often one
Speaker 3: of the most significant and largest financial commitments that somebody
Speaker 3: will do in their entire lifetimes, people tend to do
Speaker 3: that without proper representation. So the best way to describe
Speaker 3: what a buying agent does is we are professionals that
Speaker 3: are there to purely represent the interests of the buyer
Speaker 3: on a property transaction, and that's everything from helping the
Speaker 3: buyer to understand the market and identify and find the
Speaker 3: right property for them, and then help to negotiate the
Speaker 3: best possible price on their behalf and then manage and
Speaker 3: oversee the whole legal process as well.
Speaker 1: Okay, that's fascinating, and we've talked about this John and
Speaker 1: I in the past. It is extraordinary that people go
Speaker 1: into the one financial transaction that will in many ways
Speaker 1: really set the direction of their financial life, and of
Speaker 1: their domestic life, and of their home life, of their
Speaker 1: family life, of everything. Go into this transaction that very
Speaker 1: often means they have twenty twenty five, sometimes thirty years
Speaker 1: worth of payments to make, etc. Do we know how
Speaker 1: all this works? They go into that with absolutely nobody
Speaker 1: representing them or helping them at all, even though they
Speaker 1: may only have bought one house before or no houses before,
Speaker 1: so they know nothing about this market. And they go
Speaker 1: into effectively not fight, but come up against an a
Speaker 1: state agent or a group of state agents who have
Speaker 1: decades and decades of experience in this and do this
Speaker 1: for a living. It's an extraordinary dynamic when you think
Speaker 1: about it, like that.
Speaker 3: Absolutely it is, you know, and I'm not quite sure
Speaker 3: how it's played out like that. Fortunately, I think things
Speaker 3: asked the tide is starting to change, and certainly in
Speaker 3: the London property market. I would say the concept of
Speaker 3: you and working with a buying agent now, if I
Speaker 3: compare today to two thousand and seven when I first
Speaker 3: set Black Brick up, yeah, I would say the concept
Speaker 3: of working with buying agents is much better known today
Speaker 3: than it was, you know, eighteen years ago.
Speaker 1: People often think that if you are going to have
Speaker 1: a buying agent, people know a little bit about the concept,
Speaker 1: but they think this is for very very high end stuff.
Speaker 1: You only need a buying agent if you're looking for
Speaker 1: something huge, something unique, something particularly in demand, major townhouse
Speaker 1: in Mayfair, a statelier six bedroom house in the Cotswolds, etc.
Speaker 1: But it seems to me, based on even our conversations
Speaker 1: so far, that this is something that everyone should have,
Speaker 1: right down to someone buying their first small apartment for
Speaker 1: two hundred thousand pounds, because if you get it wrong,
Speaker 1: the long term expense is always going to be higher
Speaker 1: than the fee you might pay upfront.
Speaker 3: Absolutely, I firmly believe that anybody buying should have a
Speaker 3: buying agent represent them. It's one of the reasons why
Speaker 3: when I originally set the firm up, we actually set
Speaker 3: on minute them to work with us quite low. We
Speaker 3: sett it at five hundred thousand pounds back in two
Speaker 3: thousand and seven. We're now at a million plus. But
Speaker 3: there are plenty of buying agents out there that are
Speaker 3: more than happy to look after buyers with much lower
Speaker 3: budgets than where we start.
Speaker 1: When you say much lower, what do you mean if
Speaker 1: I'm looking to buy a flat for two hundred thousand pounds?
Speaker 1: Is there anybody out there who would help me?
Speaker 3: There is. There's one individual in particular who actually started
Speaker 3: his career at Black Brick working with us, and now
Speaker 3: whenever we get inquiries below our minimum threshold, we passed
Speaker 3: them to him. He really saw, I think a bit
Speaker 3: of a gap in the market to look after buyers
Speaker 3: lower price ranges, and he's spilled his business around that.
Speaker 3: So I think there's a lot of choice out there.
Speaker 3: There's a lot of different buying agents out there. There's
Speaker 3: not lots of them, but there are. There are a
Speaker 3: few buying agents out there that are catered to looking
Speaker 3: after clients with lower budgets.
Speaker 1: And then there is Henry Pryor isn't it our old
Speaker 1: friend Henry Bradjohn who has something called pocket agent, which
Speaker 1: is not quite a buying agent in that you don't
Speaker 1: go out, it'll go to look for a house for you,
Speaker 1: but helps you through the searchers and negotiations, etc. And
Speaker 1: that's that can come in at one thousand pounds. So
Speaker 1: even something like that is better than nothing. Gives you,
Speaker 1: gives you value to make sure you're not going to
Speaker 1: make a webbing great mistake.
Speaker 3: Absolutely. I think just having a sounding board somebody that's
Speaker 3: totally removed from the transaction and then it's not incentivized
Speaker 3: by selling the property give you that bird's eye view.
Speaker 3: I think it is crucial.
Speaker 1: Yeah, and that's the key, isn't it incentive? So let's
Speaker 1: talk about some of the things that you would do
Speaker 1: for a buyer that they wouldn't get if they were
Speaker 1: using an estate agent. So things like the classics. You
Speaker 1: might be able to find houses that are not on
Speaker 1: the market yet, so get to them before the ordinary
Speaker 1: buyer would, right. And then things like being able to
Speaker 1: figure out what you should really pay based on prices
Speaker 1: that people have paid locally or per square foot nearby,
Speaker 1: and this kind of thing looking at things that maybe
Speaker 1: an ordinary buyer wouldn't think of immediately, you know you've
Speaker 1: fallen love the house, and you don't necessarily think, well,
Speaker 1: hang on, what about the traffic flow nearby? What about
Speaker 1: the crime? What about that hotel at the end of
Speaker 1: the road, what about and in John's case, of course,
Speaker 1: what about those flights going overhead? And that's the sort
Speaker 1: of thing that I that I think about when I
Speaker 1: think about a buying agent. Are those the main things
Speaker 1: around my missing some things in there?
Speaker 3: We help with all of those elements. I think initially
Speaker 3: a buying agent can be quite helpful in helping you
Speaker 3: to build a brief, to kind of work out what
Speaker 3: it is that you're looking for, and then to look
Speaker 3: at can you actually afford it? Have you thought about
Speaker 3: things like getting finance? And if you haven't, then we
Speaker 3: can help recommend and put clients in touch with the
Speaker 3: right people. Have you thought about getting tax advice? Have
Speaker 3: you thought about who's going to represent you on the
Speaker 3: legal side of the transaction. What we like to do
Speaker 3: with our clients before we start the buying journey is
Speaker 3: to make sure that they've got all of their ducks
Speaker 3: lined up in a row, because what you don't want
Speaker 3: to happen is you go down this process and sometimes
Speaker 3: it can be quite let and you end up finding
Speaker 3: your dream property and then you try and sort everything
Speaker 3: out your finances, finding a lawyer, etc. And another buy
Speaker 3: who's more organized beats you to it. So what we
Speaker 3: like to try and do with our clients is get
Speaker 3: them really organized and thinking about all of these things
Speaker 3: before they start the search with us. And then once
Speaker 3: we've nailed their brief and we've got a good understanding
Speaker 3: of what they're looking for, we then go out into
Speaker 3: the market and represent them. And that is I would
Speaker 3: say over the last eighteen years that process of searching
Speaker 3: for clients has become more and more complicated and more
Speaker 3: time consuming as time has gone on. In interesting statistic,
Speaker 3: if you go on to Google and type how many
Speaker 3: estate agents are there operating in London, the figure is
Speaker 3: just over seven four hundred agents. There has been an
Speaker 3: explosion of people selling properties in London over the past
Speaker 3: few years. So you know, think of your big corporate firms,
Speaker 3: your Night Franks, your A lot of great agents working
Speaker 3: for those companies over the last few years have left
Speaker 3: and set up much smaller, tiny independent operations. Sometimes one
Speaker 3: man band's working from home. There's much more choice for
Speaker 3: people into who are selling in terms of who they
Speaker 3: want to work with. From the buyer's perspective, what that
Speaker 3: means is it's so much more difficult now to find
Speaker 3: because you can't just rely on the portals like right
Speaker 3: Move for example, I would estimate that only fifty percent
Speaker 3: of what's available for sale are on portals. There's a
Speaker 3: whole other world of property that never makes the portals
Speaker 3: for all sorts of different reasons. Sometimes it's confidentiality, Sometimes
Speaker 3: it's because the property is so great, so desirable, that
Speaker 3: it sells before it ever gets onto the portal. So
Speaker 3: you know, as a buy you cannot you can no
Speaker 3: longer just rely on the portals. You've got to also
Speaker 3: be speaking directly to the stakeholders, to the agents who
Speaker 3: have these instructions, and lots of those instructions will not
Speaker 3: be marketed.
Speaker 1: Okay. Interesting, So going back a tiny bit to what
Speaker 1: you were saying about getting on your duct in a
Speaker 1: row before you go and put an offer another house,
Speaker 1: is it also the case there's another benefit possibly of
Speaker 1: using a buying agent in a very competitive market is it.
Speaker 1: The agent might suggest to the sellers that they prefer
Speaker 1: a buyer that comes with the help of an agent
Speaker 1: because they know that it's a real offer, the cash
Speaker 1: is there, it will go through.
Speaker 3: One hundred percent. This is where professional representation I think
Speaker 3: is just invaluable to buyers because you know, imagine you're
Speaker 3: a state agent. You're trying to find a buyer for
Speaker 3: a property that you're selling, and you're presented with two offers.
Speaker 3: One is from a buyer that you don't know, and
Speaker 3: then you're presented with another offer from a credible buying
Speaker 3: agent who you've got a track record with that you've
Speaker 3: transacted with on lots of other property transactions in the past.
Speaker 3: Who are you going to recommend your client the seller
Speaker 3: on the negotiation process, not just in terms of collating
Speaker 3: all of the comparable evidence and helping to negotiate the deal,
Speaker 3: but also just the relationships that we've built over these years,
Speaker 3: and the track record means that often our offers are
Speaker 3: preferred over and above unrepresented buyers offers.
Speaker 1: Interesting, John, I'm sorry I'm hugging the questions again, not
Speaker 1: at all.
Speaker 2: Thanks, Thanks quite good to take tons well. What I
Speaker 2: wanted to ask you was from the I guess the
Speaker 2: perspective of people perhaps at the lower end of the
Speaker 2: market or first time buyers. So you've been doing this
Speaker 2: for over twenty years now, so you must know a
Speaker 2: lot about buying properties. So let's say I'm not quite
Speaker 2: at the stage where I'm able to employ a buying
Speaker 2: agent yet, or I'm too worried about the amount after
Speaker 2: reason for my deposit is. Then you would say to
Speaker 2: an amateur buyer, if you like that, the what's your
Speaker 2: maybe your top three tips? What are the things that
Speaker 2: normal people focus on that they are mistakenly focusing on,
Speaker 2: and what should they be paying much more attention into
Speaker 2: whenever they're buying a house. I'm looking for the host.
Speaker 3: The first thing is get your docks in a row.
Speaker 3: I've said that already, but I can't emphasize the importance
Speaker 3: of that, because if you're not organized, if you don't
Speaker 3: know how you're going to buy the property, none of
Speaker 3: the agents are going to take you seriously. They're not
Speaker 3: going to want to take your own viewings, they're not
Speaker 3: going to take your offers seriously. So I think making
Speaker 3: sure that you've got your docks lined up in a
Speaker 3: row and I think this was on a previous episode
Speaker 3: on this series. Not taking the recommendation of the state
Speaker 3: agent when it comes to financing, when it comes to solicitors,
Speaker 3: when it comes to surveyors, always make sure that you
Speaker 3: are just independently finding your own advisors on the transaction
Speaker 3: and you're not using the preferred broker or solicitor of
Speaker 3: the agent that you're trying to buy the house. Film
Speaker 3: that's really important, I think in terms of my other
Speaker 3: top tips for people embarking on this process is don't
Speaker 3: just be driven by the deal. I think often a
Speaker 3: lot of clients come to me and the first thing
Speaker 3: they say is they want a deal, they want to bargain,
Speaker 3: And I say, look what you trying to achieve here.
Speaker 3: You know you're trying to buy a forever family home.
Speaker 3: The most important thing is that this is a property
Speaker 3: that is going to work for you and your family
Speaker 3: for the foreseeable And I think when you look at
Speaker 3: the associated costs of buying today, they are so high.
Speaker 3: Stamp duty rates have never been higher, so the stakes
Speaker 3: have never been higher. You cannot afford to get this
Speaker 3: decision wrong. And whatever you end up buying needs to
Speaker 3: serve you for the long term. I think we're seeing
Speaker 3: buyers now take fewer jumps up the property ladder and
Speaker 3: make fewer moves, And so when you are moving, that's
Speaker 3: got to be your home for the next ten years
Speaker 3: or longer. So don't focus on the wrong things. Don't
Speaker 3: focus on is it cheap? Is it a deal? Focus
Speaker 3: on is this right for me and my family for
Speaker 3: the long term. Often I see buyers just get so
Speaker 3: totally sidetracked with whether it's a good deal or not
Speaker 3: when they're trying to buy a family home. I think
Speaker 3: other good top tips are make sure that you walk
Speaker 3: the neighborhood at different times of the day, look at
Speaker 3: how things change during peak traffic periods, have a really
Speaker 3: good look at who the neighbors are, have a look
Speaker 3: at what your commute looks like from the property. If
Speaker 3: you've got children involved, what does that journey look like
Speaker 3: for the kids to school. Just looking at the practical
Speaker 3: elements and then actually physically going and doing them to
Speaker 3: see how it all works, I think is really really
Speaker 3: useful as well.
Speaker 2: Getting down to the kind of grim practicalities of money,
Speaker 2: because I know that obviously whenever you're I can allan
Speaker 2: kind a buyer negotiating with the sale out of the
Speaker 2: state agent always feels like quite a fraught process from
Speaker 2: a professional point of view, What would you see at
Speaker 2: the kind of best things to do, as you know,
Speaker 2: can alan buyer if it comes to try and make
Speaker 2: an offer that perhaps is lawer than the asking place.
Speaker 3: Yeah, I mean, I think the first thing that you
Speaker 3: need to do as a buyer is understand is the
Speaker 3: asking price realistic. What we do as buying agents is
Speaker 3: we look at that asking price, and we look at
Speaker 3: at price square foot, and then we look at we
Speaker 3: try and find as many comparable sales that we can
Speaker 3: of similar properties that have sold recently and look at
Speaker 3: what they achieved on a price per square foot basis.
Speaker 3: That will give you a really good understanding of whether
Speaker 3: this asking price is realistic or whether it's sky high
Speaker 3: and back in two thousand and two territory. So that's
Speaker 3: always a good basis. I think for mortgage buyers the
Speaker 3: end of the day, what we say to a state
Speaker 3: agent's you know, if we're putting in offers that are
Speaker 3: significantly below the asking price based on evidence, is look,
Speaker 3: you know, you need to feed this back to your seller.
Speaker 3: You need to make them aware of the evidence of
Speaker 3: things that are happening in the market. We're not putting
Speaker 3: this offer forward because we're trying to be cheeky or
Speaker 3: we're trying to do a deal. We've put this offer forward.
Speaker 3: It's very carefully considered, it's based on market evidence, and
Speaker 3: because the buyer is taking funuts, there's going to be
Speaker 3: a bank valuation anyway, so it's pointless to get a
Speaker 3: deal agreed at an inflated price that will then just
Speaker 3: fall out of bed when the valuer comes along for
Speaker 3: the bank and values it and it's a lower value
Speaker 3: than the agreed purchase price, and everybody gets upset at
Speaker 3: that point, and then the deal doesn't go through. Look
Speaker 3: a good A state agent will be having these conversations
Speaker 3: with their sellers already, and I think in the current
Speaker 3: market we are seeing much more realistic pricing. As buying agents,
Speaker 3: when we see properties that are on the market for
Speaker 3: very inflated levels before suggesting one of our clients comes
Speaker 3: and has a look at it, we'll have a conversation
Speaker 3: with that a state agent saying, look, is this just
Speaker 3: wishful thinking? Are they serious sellers? Because an unrealistic selling price,
Speaker 3: particularly in the current market, suggests that the seller is
Speaker 3: just not serious about selling, and we don't want to
Speaker 3: waste our client's time taking them to see properties and
Speaker 3: getting them excited about something when the seller is just
Speaker 3: not really that serious or motivated. I think also understanding
Speaker 3: the motivation of the seller is really important in the
Speaker 3: negotiation strategy and the psychology of it. We always like
Speaker 3: to understand the seller's situation. Why are they selling, what's
Speaker 3: the reason? How all they own the property, what did
Speaker 3: they buy it for? Do they have a mortgage on it?
Speaker 3: So really understanding that whole background as well, I think
Speaker 3: is important to help with the negotiation process.
Speaker 1: It's interesting, isn't it how having a buying agent can
Speaker 1: take some of the emotion out of that, because negotiating
Speaker 1: directly is really hard and John's right that, you know,
Speaker 1: sellers in particular can get really upset if the house
Speaker 1: that they love is not valued by buyers in the
Speaker 1: way that it feel it should be. Shout out to
Speaker 1: the person we bought our house from, who took out
Speaker 1: all the shelves, all the titles, and every single light.
Speaker 3: We always like to sort of, haven't you know, put
Speaker 3: a little bit of a bio in with our offer?
Speaker 3: Letters as well, because I think it is emotional and
Speaker 3: I think if you are buying from somebody and it's
Speaker 3: been the family home for many, many years, you know,
Speaker 3: So we loved on our offer letters a bit about
Speaker 3: our clients. Our clives are looking for there forra a home.
Speaker 3: They really love your property, They can see themselves living
Speaker 3: there for the next you know, ten years or plus.
Speaker 3: Giving the seller some information about yourself as the buyer
Speaker 3: and why you like their property, I think can often
Speaker 3: soften the blow if it's a slightly lower bid as well.
Speaker 2: Who does our buying agent's fee typically work?
Speaker 3: So most buying agents tend to work on a similar
Speaker 3: ish model. You know. We charge clients and initial registration
Speaker 3: fee to make sure that they're serious about working with
Speaker 3: us and to start the relationship, and then on success,
Speaker 3: we charge whatever works out to be the greater of
Speaker 3: either two point five percent of the purchase price or
Speaker 3: twenty percent of what we managed to save our client
Speaker 3: from the asking price as a result of our negotiations
Speaker 3: on their behalf. So that's what we charge. I think
Speaker 3: there are, as I said, there's lots of buying agents
Speaker 3: out there catering to all sorts of different budgets. So
Speaker 3: you will find a range of fees out.
Speaker 1: There, and you'll find that there are a few fixed
Speaker 1: fee arrangements, are there?
Speaker 3: Some do fixed fee? I mean for us, you know,
Speaker 3: once we start to sort of you know, get into
Speaker 3: the kind of twenty thirty forty million pound budgets, some
Speaker 3: of our clients we might agree with some sort of
Speaker 3: fixed fee on those kinds of searches. We're flexible. We
Speaker 3: never want fees to get in the way of working
Speaker 3: with really great clients. That's kind of very much our
Speaker 3: ethos at Black Brick.
Speaker 1: But I love the idea of charging based on how
Speaker 1: much you save. No one can argue with the value
Speaker 1: there can I. Kimilla, thank you so much for coming
Speaker 1: on today.
Speaker 2: That was good. Thanks Camela, thank.
Speaker 1: You thanks for listening to this week's Maren Talks Your Money.
Speaker 1: If you like our show, rate review and subscribe wherever
Speaker 1: you listen to podcasts. Also be short follow me and
Speaker 1: John on x or Twitter at marinas w and John
Speaker 1: Underscore Steppic. This episode was produced by Moses and and Samasadi.
Speaker 1: Sound designed by Blake Maple's Special thanks to Camilla Dell
Speaker 1: questions and comments on the show and all Our shows
Speaker 1: are always welcome. Our show email is merin Money at
Speaker 1: blmberg dot net