Are you earning good money overseas and want to invest in Australian property, but keep putting the decision off? Is it because you :
- don’t have enough time to research the market;
- are worried that you may pay too much money for the house;
- don’t know how you will manage the process (or bid at auction) when living 10,000km or more away; or
- are just not comfortable buying a property from abroad?
Well, a buyers agent may be the solution you are looking for. In this article, we will explore the benefits of using a Buyers agent, particularly for Australian expats.
Buyers agents have been a regular feature in many parts of America for a long time – according to the USA National Association of Realtors some 63 per cent of buyers used an agent. However, many people in Australia are against paying money to use a Buyers agent to assist in what is often the biggest investment decision of their lives, but happily pay thousands of dollars in fees (most of the time largely hidden) to financial advisers or fund managers to advise on or manage much smaller investments. Why is that?
Firstly, though, what is a Buyers Agent?
What is a Buyers Agent?
A Buyers Agent is is a licenced professional who specialises in searching, locating, evaluating and negotiating the purchase of property on behalf of buyers.
A reputable buyers agent does not sell real estate (nor collect sales commissions), and are independently engaged by the buyer to act on their behalf in a property transaction, and protect the Buyer’s interests.
Now let’s have a look at some of the benefits of using a buyers agent for Australian expats.
Benefits of Using a Buyers Agent
1. Save You Time & Help You To Take Action
I remember having a conversation with a university friend a number of years ago. He spent the more than ten years working in the Middle East. He recognised the value of investing in Australian property while living abroad, but never found the time. As an ambitious graduate engineer he was working long hours and partying hard. On his annual trips back to Australia, he was so busy visiting friends and family, that he never found the time to find a property to buy. Consequently, when he moved back to Perth to live in 2007, he found that property prices in Perth had nearly tripled during the time he was away, and his savings were no longer going to enable him to live in the beachside location he had always planned.
Do not let not having enough time prevent you from investing in the property market. There are many reasons I believe Australian expats should invest in property, and a buyers agent is a great solution if you want to get a foot on the property ladder, but just don’t have the time, or you want to spend more time surfing!
2. Understand the market
Its easy to convince yourself that simply by reading the Australian newspapers and researching properties online, that you understand what is really happening in the property market in Australia. A good buyers agent will have their finger on the pulse of what properties are selling for in the current market, and what the level of interest is in the type of property you want to buy, or even more specifically the interest in your preferred property. Only, with that on-the-ground understanding do you really know what price you should pay for a property.
A good Buyers agent will want to understand your investment or selection criteria for the property you want to purchase. Are you looking for a future home for you to move into when you return from working overseas, or are you purely looking for a good investment property? Do you know what location you are wanting, whether you want new or old, renovated or un-renovated? Once you and your Buyers Agent have worked out the type of property and location you are looking for, the Buyers agent will be able to undertake all the research for you.
If you are not sure where you want to buy a property, then a good Buyers Agent will have access to a lot of market and historical data, and be able to advise or guide on suburbs or locations that both suit your general criteria and will be a good long term investment.
3. Access to More Listings
An active and experienced Buyers Agent will have developed good relationships with many real estate agents and have access to properties before they officially come on the market or properties that are silently listed (where the Seller does not want it publicly known they are selling their house).
4. Physical Inspection of the Property
After you and your Buyers Agent have shortlisted potential properties, your Buyers agent is able to physically inspect the short listed properties (something that is a bit difficult when living abroad!). While many people think that they can now do all their research online, photos of the property you find online are only ever going to present the property in the best possible light. An inspection by the Buyers agent will enable you to verify that the rooms are as big as they looked in the photos, or there are no other hidden problems not shown in the photos online (rising damp, termite damage etc). Did the real estate agent conveniently forget to highlight the high voltage power line running behind the house, or that the view of the ocean in the photo was taken standing on the roof of the house (not the balcony)?
Even if you still want to fly back to Australia and inspect the property before you purchase, you can still do this, but you will do it knowing that the Buyers Agent has already made sure it meets all of your selection criteria, and already narrowed your selection down to the minimum possible.
4. Negotiation Experience
Negotiating the purchase of a property can be a terrifying experience for many people. You have invested a huge amount of time finding a property and now that you have found the property you want, you don’t want to lose it when it comes to negotiating a deal (or bidding at auction). Emotional attachment to the deal and lack of experience will result in you paying too much. Having a middle man, who is experienced in negotiating the purchase of property and who has no emotional attachment to the outcome, will ensure you get the best possible deal.
Depending on which market in Australia you are looking, the most likely way to purchase a property may be through an auction. Not exactly the easiest thing to be doing when living abroad, but another advantage of having a buyers agent on your side.
5. Managing the Paperwork
One of the most difficult things about buying property in Australia when living abroad is the paperwork. Depending on your bank’s requirements getting mortgage documents signed can be very difficult. Often witnessing requirements mean that you will need to visit a local Australian embassy or consulate to have someone there witness your signature. That is easy for me (I live a 15 minute bike ride from the local Australian embassy), but for other people that might mean an 8 hour drive or 4 hour plane trip. So one of the benefits of using a buyers agent is to assist with the settlement process, and with some Buyers agents you may be able to give them power of attorney to sign documents on your behalf.
There are also other administrative tasks which you may be able to get your buyers agent to organise. These tasks might include arranging termite and building inspections, following up with settlement agents and mortgage brokers to ensure the transaction proceeds on schedule, arranging for a depreciation schedule to be completed, and even assist you in finding a property manager to get your house rented as quickly as possible after settlement.
Is a Buyers Agent Right For You?
Take the stress out of buying a property in Australia by working with Milk Chocolate Purchase Concierge. Milk Chocolate specialise in purchasing property and undertaking renovations for Australians living abroad. They work exclusively for the buyer.
Milk Chocolate offer a true concierge service, taking care of every last detail of your property purchase. Using the latest technology, data and communicating in your time zone ensuring the experience is rewarding and enjoyable.
Mention the Australian Expat Investor when contacting Milk Chocolate, or complete the form below, and you will be entitled to not only a free initial consultation to discuss your needs and to see if Milk Chocolate is right for you, but you will also receive a free voucher to the value of A$500 to treat yourself to a celebratory dinner in your country of residence when you sign up to use their services (and pay your initial fee).
Disclaimer : This information is for educational purposes only and does not constitute financial or taxation advice. As this information is not advice and has been prepared without taking into account your objectives, financial situation or needs you should, before acting on this information, consider its appropriateness for your circumstances. Independent advice should be obtained from an Australian financial services licensee before making investment decisions, and a registered (tax) financial advisor/accountant in relation to taxation decisions. To the extent permitted by law, we exclude all liability for any loss or damage arising in any way. We may receive referral commissions from companies mentioned in this article.