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Oasis Property: Sydney Buyers Agents

Property news as it happens, from the desk of Managing Director Gavin McPherson.

Current Edition – April 2009

BUYER (AGENT) BEWARE

While I don't usually like to focus on my competition, this is one time where I felt compelled to at least add some commentary on other Buyers Agents, and the benefits to you the purchaser. The bottom line is - we are employed to provide a service which is to:

- locate a property
- for the best possible price
- in the shortest possible time frame

But...unfortunately I have seen far too many examples of overpriced property purchased by some colleagues. This hasn't gone down too well within the industry, as many of us fear that the GFC has hit some of our competitors so hard that they need to focus on transacting (purchasing) on a property at any cost.

Let me explain further. One of the most obvious challenges of a Buyers Agent is to advise their clients on purchasing price, strategy and timing - and one characteristic obviously required is patience. As an example, I am a big believer that the $450K - $600K bracket inner city apartment price bracket is enjoying a very shortlived 'day in the sun' right now. No greater reason can be provided than the Government's healthy stimulus package - and as good as this is for the economy, it doesn't always help our clients for me to encourage them to buy right now. This doesn't mean that I think the market will collapse (post budget annoucement of keeping or axing the FHB plus package) just that I believe the purchaser is paying a net surplus of far more than they are being given in another $7K to up.  

I have told them as much. I am confident they appreciate that they are being given the right advice, and not being compelled to BUY NOW, only to see heavier discounting come the 1st July. So, back to my major point, I saw one example recently of a Buyers Agent capturing a property for their client in the Inner West that made me shudder to think "how many others" had been fooled by their service.

This property, in my eyes, was worth purchased, at auction for what I believed to be 10% over market value. This view was also shared by a colleague of mine in another Buyers Agency. It was EVEN the view of the Real Estate agent selling the property to this Buyers Agent who couldn't believe his luck he had captured this buyers agent who either:

a) Either had a client who really loved the property OR
b) Really needed their commission, and subsequently trumped the value of the property up.

In fact, it was also revealed that once the auction ended and contracts were being exchanged, the Buyers Agent had to present the 10% equivalent cheque to the agent - that cheque in fact catered for more than 10% again from what they paid for the property. The point I make is, that in my eyes, it seemed most of the Buyers Agents attention was spent in trumping up the property price. After seeing this property myself,  in this market, and finding it a very homogenous product, but with glossy 'smoke and mirror' renovations - I would have happy passed on it only to find a viable alternative for my client at a price that it was truly worth. Which brings to my questions. Is your Buyers Agent sounding a lot like a sales agent?

- "Now is the right time to buy?" Sure it is......
- "Those buying premium property are in the best time of their purchasing lives"
- "Buy before you miss out on the First Home Buyer benefits"

These are all pointers in the wrong direction. I can't tell you the last time someone made money from following mainstream advice, but when your Buyers Agent is spitting out these pearls of wisdom, its time to wonder if s/he should just be selling Real Estate again. 

That isn't to say there isn't great bargains out there right now, but the market is a segmented thing, and to answer on all these points right now isn't them theme of this commentary. I wrote this this month because I have been a  little disheartened by some of these deals done by counterparts which lead me to other questions raised:

- Is the Agency themselves feeling the pinch of the GFC, and subsequently telling their staff "Go and transact at all costs"...or
- Is the Agent (taking up to 50% of the commission) feeling their own domestic GFC and going against sound advice because they need the commission

I'd like to think neither are true, but some of the prices I have seen some BA's pay in recent months makes me think otherwise. I would hope that any potential subscriber to our servcies diligence went a lot deeper than "how much do you charge?", because the story can raise a lot more questions than cost.

- Who will be doing your work within the agency, and what is their status?
- What are the overheads of the business, and as such, is 'sustaining' the business (in these times) a priority for the agency that means you might just be a deal that 'has to happen!' - irrespective of timing or property.

I can't tell you who to choose, but obviously I always continue to promote Oasis as one of the most trustworthy entities with regards to proeprty purchase. Not only for our Buyers Agency service, but because our office also gets to feel the 'pulse' of the market with our additional services of:

- Conveyancing (legals) - this always demonstrates how much volume is circulating in the property market
- Mortgage Broking (finance) - this usually gives a good reflection of sentiment, and how many people are 'ready to purchase'.
- Property Managament (Rentals) - this usually gives a good reflection of vacancy rates and turnover to show the drift between renting and buying.

So we would like to think that we have the most current 'pulse' of the Sydney property market - probably more so than any other company would in Sydney, if not for our range of services, but for our volumes of transactions.

That said, to put a fair compulsion for the marketplace to find considered alternatives, I would only encourage those considering using a Buyers Agent to ONLY consult a member of the REBAA group - of which we are a member. REBAA represents the largest conglomerate of Buyers Agents in Australia, and with our code or ethics, barriers to entry (exprience) and qualifications, these should serve as a industry benchmark to ensure that you are getting a tried and tested performer.

Lets keep the rogue's out, and make this industry a long and profitable one, for Buyers Agents and consumers alike!

I look forward to my next update, but as always if you need anything with regards to:

- Buying Property
- Conveyancing
- Finance, or
- Property Management
 
I look forward to being of assistance. Please feel free to call us on (02) 8705 3252




Gavin




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      November 2007 - "Investors back to market & new addition to Oasis team!"

About the Authors:

Gavin McPherson is managing director of Oasis Property Buyers and also serves as a Director of the McPherson Property Group. He has authored a range of articles and papers that present empirical data and solid research in a bipartisan fashion. Operating one of Sydney premier buyer's agencies also identifies him as having his ears to the ground to see emerging trends as they occur – not after they happen. He can be contacted at:
gavin(AT)oasisproperty.com.au