S2E11 - 12 Questions First-Time Investors Ask About Buyers' Agents

[00:00:00]

Skye: Today we're doing a quick fire episode, 12 questions about buyer's agents that catch a lot of first-time investors off guard. ' Cause most people aren't against using one, but I still see that most people aren't actually using one. They just assume things like, "They'll push me into a deal," or, "It's only worth it for off market." and that's usually where the confusion starts. So we're gonna go through some common questions, give you the short version, and hopefully make this decision feel a bit clearer and less loaded.

1

Skye: So Pete, do you think buyer's agents are just trying to get a deal done quickly? And where do you think this perception comes from?

Pete: No, I don't think they are. It obviously comes down to the particular buyer's agent. But no, I think most buyer's agents are actually taking the time to get the right deal for their clients. The perception really comes from, where I think it comes from is organised buyer's agents.

So a good buyer's agent or an organised buyer's agent is constantly sourcing deals in the area that they're looking at or investing in for clients. So if they're constantly looking in these areas, they're constantly getting access to off markets and on markets. [00:01:00] And I think the perception does come from people who sign up with a buyer's agent, and then all of a sudden they've got a great deal in front of them within two weeks, and they just assume that that was the first deal that came across the buyer's agent's desk.

Skye: Mm.

Pete: And that's what they're presenting to the client. But the reality is they're actively buying in the market and have probably been buying there for years

Skye: Mm

Pete: ... and of course they're gonna continue to get access every single week to properties. So I think that's where the perception comes from.

Skye: Feels easy on their side.

Pete: Yes.

Skye: They haven't seen all the work that went into it prior.

Pete: Yeah, too good to be true. You've signed up, you've gone through the research phase, you've got the strategy locked in.

Skye: And then bang,

Pete: here's the property.

Skye: But they've missed all the 12 months of work in the area before.

Pete: Yeah, exactly. They've missed all the connections with the agents, the due diligence that's already been done. I mean, from my point of view, we're constantly trying to source properties, and even if they don't suit our current client list, we've still got them somewhere on our system-

Skye: As a backup somewhere

Pete: as a backup, yeah. 'Cause we know if we get a new client who suits that property within the next week or so, it's gonna be a great buy.

Skye: And that's how it lands really quickly.

Pete: Yeah.

Skye: Okay. Knowing that in mind, [00:02:00] how do good buyer's agents avoid rushing clients? Is that something that you're setting up with them prior?

Pete: Yeah, definitely because we are hearing things where some buyer's agents are putting deals in front of their clients, and they're saying, "You've pretty much got four to six hours to make a decision." So we try and pre-frame it a little bit differently before clients come on board and throughout the research and onboarding process. We'll generally try and give you 48 to 72 hours to think about the deal before they make the decision

Skye: Mm.

Pete: So we do a lot of backend work to present the property to the client Mm. But we've gotta make sure they've got the time to actually absorb it and ask questions, so-

Skye: Mm

Pete: ... we try to avoid that whole scenario of a four to six-hour window because that's when clients do feel pressured-

Skye: Stressed

Pete: ...

and I yeah, stressed. They've gotta make this $700,000 decision in a couple of hours. And it could be the very first property they've looked at. So from my point of view, it's making sure that they've got a couple of days, but also the prep work at the beginning, too, before they even see a property or a deal presented. They've got a bit of an idea of recent [00:03:00] sales in the area. They've seen and agreed if something comes up that's similar to that particular property that sold a month ago- that they'd be keen to take the next step and make an offer. So it's all the prep work in the beginning stages, and not just slapping a deal in front of a client a day after signing up.

Skye: Yeah.

Pete: There's a good week or two process from our point of view, where we take them through the research, the recent sales, and get them locked in to the type of property they're keen to invest in- Yeah ... But that said, it could still take up to four or five weeks to source a property.

Skye: Mm. Interesting. 'cause I could see that if someone hasn't gone through this process before, they wouldn't necessarily know yes, they're going to feel stressed when they have four to six hours to make a decision, but they wouldn't know is this how it all works.

Pete: Yeah. Nothing to compare it to either sometimes, so- No

yeah.

2

Skye: So do you think that buyer's agents are incentivised to recommend certain properties? And where can conflicts of interest actually show up in this space?

Pete: I think a majority of buyer's agents are actually doing the right thing. It's like any industry. There's always going to be a couple that are creating that negative image. We think about real estate agents, property managers, too.

Skye: Mm.

Pete: There's always gonna [00:04:00] be a couple. That's what hits the media. That's what people see.

Skye: Mm.

Pete: People are naturally attracted to the negative side of things.

But, look, there are buyer's agents out there, or they call themselves buyer's agents- but they're really working for a developer, and they are incentivised by the developer. So they will get a fee from the developer. It could be anywhere between 20 to $40,000 to present the property to their client- Mm

And they also get a fee from the client as well, so they're double-dipping. There are people out there like that. But for the majority, most are doing the right thing.

Skye: I have two follow-on questions for that. One, can that still work for the investor if that is the situation?

And two, how do clients ask this upfront? How do they be certain that that's not happening?

Pete: It depends on the stage of the development, so you can definitely make money from buying at the early stage of the development, so that's when it does work, when you're buying these house and land packages at the early stage. And when I say it does work, it's not a broad rule.

It's in very specific locations. I know some of your clients-

Skye: Yeah

Pete: ... Skye, have done quite well from that.

Skye: Yep.

Pete: we've [00:05:00] talked about it on the podcast before. If you're buying early enough, then time will do its thing, and with inflation, high build costs, and all that. Mm-hmm. But for the most part, I don't believe it does work because often when we get to this point, developers are getting a little bit desperate, and that's when they start to offer the bigger incentives to so-called buyer's agents to start selling off their stock when it's stage three and stage four.

Mm-hmm. Because people just aren't buying into the area anymore 'cause a lot of the demand's already been met.

Skye: It's gone. Yeah.

Pete: So yes, you can make some kinda money from it. It's not the strategy that I encourage-

Skye: Yeah. So not to be afraid of that if it's coming through. Yeah.

Pete: Yeah. Yeah. And if it comes up, it comes up, but push back on your buyer's agent if that's what they're presenting.

Skye: Mm.

Pete: And really try and challenge them in terms of why they think that's actually a good move for you. But in terms- Mm ... of also the conflict of interest question, being very upfront and direct with them around how they're getting paid, and making sure the service agreement that you are signing specifically does say that you are paying the buyer's agent, and the buyer's agent is not collecting any other commissions-

Skye: Mm

Pete: from anyone else. So-

Skye: Do you have to declare [00:06:00] that?

Pete: Yeah. So I declare that in my agreements that we don't take the commissions from anyone else. It's purely from the client and- Mm-hmm ... act in their best interest, so yeah.

Skye: Okay.

Pete: But again, if the buyer's agent thinks that particular property, I can't see a world where it would be, but with that particular house and land package actually is in their best interest.

If they can somehow justify it, then-

Skye: Mm

Pete: ... sure, great, but really challenge it because I, I don't think it works for most people.

Skye: Yeah.

Pete: Yeah. It just doesn't really suit a lot of people's investing strategy 'cause at the end of the day, those types of properties are getting, built.

There's a surplus. So yeah.

Skye: Yeah, which is not the environment we wanna be in.

Pete: No. You might get a short-term win, but long-term it, I just don't see the value there.

3

Skye: Yeah. so moving on to question three: do buyer's agents only add value through off-market deals? And I'm really curious to understand how much of your work is actually off market versus on market.

Pete: So in terms of our work, a majority of our deals are still off market. We were pushing around the 67, 68% mark from off market to on market deals. It probably falls now around the 58% mark, and that's just purely because we are finding better deals on [00:07:00] market at the moment.

A lot of the stuff that we do source is off market, but for every 10 off markets, probably only one or two of them actually make it in front of a client as an option to purchase.

Skye: I have a follow-on question to that because as a sales agent, I essentially tell my clients, "Yes, you can sell off market," 'cause that was a strategy that sales agents were pushing to vendors for a long time because it was a way that they could get the listing softly.

Pete: Mm.

Skye: But I truly do believe that you don't know if that's your highest price, and so I push my clients to on market because then you know whatever offer you accept, it's met everyone in the market and this is what the market's telling you.

So my follow-on for you was why has that shifted, do you think? And when you are passing on deals, why are you passing on them?

Pete: So to answer the first question, I think it's shifted because we're just starting to see, from what I'm seeing, more vendors wanting to put their properties on the market now.

Skye: Mm.

Pete: Although it may shift now with all the changes happening.

Skye: Mm.

Pete: we're seeing more quality properties come to market.

Skye: Interesting.

Pete: That's what I'm seeing in the markets we are [00:08:00] buying in.

Skye: Yeah.

Pete: But also, there's a bit of reluctance as well from buyers.

Skye: Yeah.

Pete: So there's not as much competition as what there was a couple of years ago-

Skye: Mm

Pete: when rates were on the way down and the demand was a lot higher than what it is now. So we're not competing as much as what we are for on-markets anymore-

Skye: mm

...

Pete: which I think is the shift that's naturally happening now, where less competition, great on-market opportunities. We can pretty much go in there and buy at fair value now. We're not having to pay overs for on-markets.

Skye: So the off-market, on-market thing could actually just be dependent on the property market at the time.

Pete: Yeah, I definitely agree, and also the property market that you're operating in too.

Skye: Mm.

Pete: if we're operating in parts of Melbourne at the moment, there's a lot of off markets that are coming up, but they're in terrible locations.

-: Yeah.

Pete: And agents are just trying to sell them off to investors who don't know what they're really doing. Mm. And a lot of people just assume any off-market deal is great because it's off market, and the way the agent pitches it to first time investors, even first time buyers, and if you don't have the support of a buyer's agent, you're not [00:09:00] protected there.

Skye: Mm.

Pete: They're just paying above market value for an inferior property-

Skye: Mm

Pete: ... which you could get a much better deal on market.

Skye: They believe it's a good deal because it's off market. Yeah.

Pete: Because it's got that kind of, advertising and sales pitch behind it of being an off market and-

Skye: Mm

Pete: exclusively for that buyer that no one else knows about.

Skye: But that could be a database of 15,000 people strong.

Yeah, 100%. And I'll just refresh on that ' cause the next question I was gonna ask you, I think you've already answered it here. But is that essentially why you would pass on an off market, just that it's not presenting a fair price?

Pete: Yeah, ' it's interesting 'cause agents will use it and you'd know this, not that you do this.

Skye: I won't get offended, it's fine. But ...

Pete: Yeah, yeah, but not that this is something you'd do, but... Sometimes they haven't even got the agency. Mm. So-

Skye: They're like, "Oh, I've got a buyer's agent who wants this."

Pete: Mm-hmm. Yep.

Skye: Yeah.

Pete: They'll go to a listing presentation-

Skye: Mm ...

Pete: and they haven't signed up. For people that don't know, an agency agreement is basically once you sign up with an agent, you're locked in with them to sell the property. If the agent hasn't actually got that agency agreement, they can't sell the property.

Skye: Mm.

Pete: So that-

Skye: But they can bring a buyer's [00:10:00] agent through because-

Pete: They can

Skye: ... they haven't actually done anything-

Pete: Yes

Skye: To be able to go to contract, they then need the agency agreement

Pete: It's part of their sales pitch, "Oh, we can get an off market-"

Skye: Mm-hmm

Pete: buyer's agent or investor to come through here and buy the property for the price that you want."

Skye: Yes.

Pete: But they haven't.

Skye: I lost a listing for that.

Pete: Yep.

Skye: Friends of mine that I was surprised that they're quite smart people, but they got sucked in. And what do you know? They ended up on market because their

-: Mm

Skye: Investor or buyer's agent turned to nothing, and it's like a funnel for the sales agent to actually... And that's why I think as the market has shifted and listings have become harder and harder to get, I can imagine you get a lot of rubbish off markets as well as the good ones.

Pete: Yeah. And that's one of the questions as well. Have you got the agency to avoid what you've just spoken about because that's when we know it just goes in the bin. We don't even bother. It's a complete waste of time. Can't put it in front of the client because-

we could put it in a- and they could fall in love with it, but then all of a sudden the agent doesn't have agency and they can't sell it, and the vendor's decided to go with someone else or something like that because-

Skye: Mm ...

Pete: another thing is as well, sometimes we get the same off market from multiple [00:11:00] agents.

Skye: Interesting.

Pete: Yeah. So we've had that a bit lately, particularly in Victoria. It's a- ... bit cutthroat in Melbourne actually. it happens, and it's quite funny. And-

Skye: Mm

Pete: ... we don't call agents out or anything for that-

Skye: Yeah

Pete: because we've obviously gotta keep the relationships there. But again, that's a big flag cause we've had agents again say, "Oh yeah, we've got agency" but then we get that same off market from another one.

Skye: From someone else.

Pete: and they just, they're clearly lying. But that is one way to work out whether or not it's going to be a good option, and that's one way that I can completely bin a off market if it doesn't suit.

Skye: Mm-hmm.

Pete: But also reasons as to why it's off market as well. You gotta have-

Skye: Yeah

Pete: ... a couple of genuine reasons. You might have a, not so much a difficult tenant, but you don't wanna put your tenant through multiple open homes. You want a quiet sale where the street doesn't know. There's gotta be a couple of legitimate reasons there-

Skye: Mm

Pete: as to why it's off market because at the end of the day-

Skye: Why wouldn't you take it to market?

Pete: Exa- you're gonna get top dollar on market. So if it can meet the criteria that we've got internally, and then we look at the due diligence and it checks out, that's when we'll present it, but it has to go through a number of checks first.

Skye: I assume you're sharing those checks with your clients.

Pete: Yep. Definitely.

4

Skye: Moving on to [00:12:00] question four, is using a buyer's agent too expensive? I speak to a lot of landlords and I get this hesitation often, how do you think people should think about the fee in a grounded way?

Pete: I think they've gotta think about it as an investment rather than a fee or an expense because if you pick the right buyer's agent, what they're gonna do for you in terms of selecting the right property in a growth market is going to significantly outweigh that small fee that you're gonna have to pay-

Skye: Yeah

Pete: to engage the buyer's agent.

Skye: Because that's the thing, right? It's the same with what I do. Yes, people can manage their properties themselves, but you're gonna have a significantly better outcome using a professional. And I think for a lot of people, because they're at that point and they're considering, say, making a $700,000 expense, adding another expense is the wrong way to look at it, right?

It's about, okay, this is just part of your purchase price.

Yeah, What mistakes do you think people are trying to avoid here?

Pete: Ugh, paying too much for a buyer's agent, you can pay someone as little as probably six grand these days all the way up to 30.

[00:13:00] Mm-hmm. The discrepancy between a buyer's agent fee is just, is huge at the moment. So I think the mistake people are trying to avoid is paying too much, but I also think that's a mistake in itself. 'Cause like what we say from a property management point of view too, and a sales agent, I'm a big believer in paying a sales agent their top-end fee.

Skye: Mm.

Pete: Because they will likely get the better outcome for you.

Skye: They're more motivated to.

Pete: They're more motivated. they're gonna get the deal done. ' again, when you're paying someone a more expensive fee, it means they've got probably better access to resources.

Skye: Mm.

Pete: They've got people working with them.

There's a reason that the fee's expensive.

Skye: Correct. You get what you pay for.

Pete: Exactly right. what's the saying?

Skye: Price is what you pay, value is what you get.

Pete: That's it. Yeah. That's it. And that is something that I have front of mind for everything that I, I do as well. Even outside of the property space for when I'm making expensive purchases or decisions.

Skye: Mm.

Pete: I do try and engage the best people out there.

Skye: Yeah. I feel like you would analyse that quite well.

Pete: Yeah. Yes.Takes too much time sometimes, but you gotta keep 'em accountable too. So if you're paying top dollar, then you have to expect top dollar service.

Skye: Absolutely. Yeah. I couldn't agree with that more. I think the [00:14:00] mistake is when you're paying top dollar and you're not getting value for that. I think I've told you before, I had a client who found their buyer's agent on Facebook, in a Facebook group, and it probably would've been around that 6 to 8K.

And it didn't go anywhere. It was just one of those catalogs of everything that could go wrong went wrong.

Pete: Yeah.

Skye: and he lost his money, so it's-

Pete: it's time too. What I'm hearing is those cheap BAs are just presenting on markets. Whatever comes across their inbox, if it's an on-market property, they'll send it.

Skye: Send it.

Pete: If it's an off-market property, they'll just forward it on. But again, you can't expect much more for that kind of fee. They're not doing the checks and the due diligence behind it. and then-

Skye: Yeah

time out of the market too, which I'm-

This is probably throwing you-

Pete: Mm

Skye: ... under the bus here. Is there a limit to how many clients a BA should be working with?

Pete: Look, from my point of view, we don't like to work with more than seven or eight.

-: Yep.

Pete: And that's predominantly with one or two people working-

Skye: Mm

Pete: with those clients, but it depends on the markets you're operating in. If you're-

Skye: okay

...

Pete: predominantly in one market, you might be able to do a bit more than that. But- no more than around eight clients a month, I'd say. Yeah.

Skye: Yeah. Feel that's something that could [00:15:00] be easy to assess whether the $6,000 buyer's agents has 20 people on their books-

Pete: Yep

Skye: and they're just sending it to everyone-

Pete: Yep

Skye: ... as if it's for you,

Pete: On the flip side, though, they could also be new into the industry and have no one.

Skye: Have no clients.

Pete: and the fee might just be cheap because it's a cheap service too.

Skye: That's a fair point. It's similar to the question people always ask property managers, "How many properties do you manage?"

Pete: Yeah.

Skye: And it's ... I could see you struggle to answer that because it's not that simple.

Pete: No.

Skye: But it could be used as a yardstick-

Pete: Yeah

Skye: ... to help you make a better decision.

5

Skye: The next question I really like, because I'm a control freak, but do I lose control if I use a buyer's agent?

Pete: Look, you have to relinquish some level of control but it depends on the buyer's agent, right? Some buyer's agents will take full control, and there's not a lot of room for movement for the client. They'll sign up, they'll get told the location, they'll get the property type, and then they'll get the property put in front of them, and then they get their three-hour kinda timeframe

Skye: And that's it

Pete: to, to make a decision. That's it. The buyer's agent's in full control. I don't like to operate like that. I like to get a bit of buy-in from clients, [00:16:00] and it really starts at the beginning in terms of the type of property they're comfortable with. Are they comfortable with going out and buying a property on a large block, might need some work, maintenance is gonna be a pain.

Skye: Mm.

Pete: There's gonna be a lot of headaches with tenant.

Skye: What's their risk factor?

Pete: What's their risk tolerance? And it's around the property first before the location. because depending on the location, depends on what property you can buy.

But at the end of the day, I wanna know what type of property they're comfortable with. Mm. If they want something that's been built in the last five, six years, that then informs me to go into the best location that I can find them to buy that type of property. So once we get an idea of their comfort levels, their go to sleep factor, then we look at the locations.

But it's not just, "Hey, this is the one location." Mm. This is two or three locations across Australia.

Skye: Yep.

Pete: At the moment, it's a lot of South Australia Vic and Tassie. They're the different options at the moment where we see a lot of value, where we can find the property that you're looking for, which one do you like?

Skye: Mm.

Pete: We'll rank them and say, "Look, we think you should go into this market, A, B, C."

Skye: Mm.

Pete: But if clients aren't comfortable, then we'll move to B and to C. It really is a bit of an open discussion.

Skye: Yeah.

Pete: And they do get buy-in, so there is a level [00:17:00] of control there. Yeah.

Skye: That makes so much sense to me that you're starting with the property first, because obviously working in a budget.

Pete: Mm.

Skye: And then that will dictate what location you can afford, if that's the property. Whereas if you did it the other way, and you're focused on locations, 'cause I'm sure everyone comes to you and says, "Oh, where should I be buying?"

Mm. That's the secondary point, because it's dictated by the property and the budget. I love that.

Pete: Yeah. That's the thing, a lot of BAs will do it that way. Yeah. They'll go to location and property, where I try and flip it.

Skye: Yeah.

Pete: I've had shit properties before that have cost me a lot. I've been there, and I was just told, buy in the location, buy the biggest property you can. whatever's available in that location, go out and buy it.

Skye: Mm.

Pete: And when I've gone and done that, those are the properties that have caused me-

Skye: It's come with problems

Pete: yeah, the biggest headaches. Now they've grown and they've done great from a growth point of view, but from a mental capacity-

Skye: Mm ...

Pete: maintenance, all that kinda stuff.

Skye: Which I think people underestimate.

Pete: people forget that.

Skye: 'Cause they don't get past-

Pete: Mm ...

Skye: the purchase.

Pete: Yeah.

Skye: It's just, "Okay, we're gonna buy this and then we're done."

Pete: Yeah.

Skye: No, no, what happens after that? '

Pete: Cause you gotta hold it.

Skye: Yeah, you've gotta deal with it after.

Pete: that suburb might outperform [00:18:00] some other options, but, are you gonna be actually able to hold it for 5, 10 years to see that result- when you've gotta deal with all the headaches? Now, most people can't. I don't believe a lot of people can, 'cause there's a lot of shit going on in people's lives.

Skye: Mm-hmm.

Pete: The extra stress of an older property. I mean, you see it all the time with your, landlords.

Skye: Yeah.

Pete: it does take a toll.

Skye: Yeah, which is where I'd kinda do similar and try and lead them into that, pre-frame it-

and go, "These are the problems you're gonna have."

Pete: Yeah.

Skye: Tell them to have a maintenance buffer, just like you do.

Pete: Yeah.

Skye: it's about preparing them because generally by the time I meet them, it's too late. They've already bought it. so I think definitely that's a useful thing to think about. What do you think a good working relationship looks like with a buyer's agent?

Pete: A lot of back and forth.

Skye: Mm.

Pete: It's not just the buyer's agent telling-

Skye: " Here's the deal. Take it or leave it"

Pete: ... "Here's the deal, here's the location, no more questions" kinda thing. It's the buyer's agent presenting a number of different options, a number of different scenarios to the client, and the client getting to actually pick that.

Skye: Mm.

Pete: Similar to a financial planner. I'm going through that process now actually, and I notice that they do something similar to me, where it's-

Skye: Presenting the options

Pete: ... scenario A, [00:19:00] B, and C. Mm. And it kinda made me think that that's what I do for my clients, but a lot of other buyer's agents don't do that.

Skye: Don't do that.

Pete: It's scenario A and scenario A only. Mm. So yeah, the collaboration is the big one.

Skye: Interesting. Think that's really helpful for people to know.

6

Skye: Moving into question six, all buyer's agents basically the same?

I think this is a common perception for anyone in the property space. What are your thoughts, Pete?

Pete: look, we all do the same thing in the sense of purchase property for clients.

But I think it's in the process, which is very different. at a holistic point of view, yes, but their process, their research, their location methodology, their sourcing and what they believe to be a good property in terms of due diligence checks- they do differ across buyer's agents. So at a high level, yes, but when you get down to the crux of it, no.

Skye: Absolutely. And how could someone tell early on if it's a good fit?

Pete: When you get on those initial calls with a buyer's agent, it's asking questions, so don't let the buyer's agent dictate the whole meeting.

Mm. This is before you, decide to sign up. Normally a buyer's agent will have one or two calls with you to see whether or not you're a good fit. Make sure you're the [00:20:00] one doing the talking.

Skye: Asking questions.

Pete: Yeah. Yeah, don't let the buyer's agent just dictate to you what they do, how they're gonna do it, and how it suits you.

What you need to do is, as the client, is to ask the right questions. Mm-hmm. So asking the questions in terms of how many people you're working with at the same time, what's your process like in terms of your due diligence, sourcing, research? Do I have buy-in? What if I don't like the property or the location you present? Because if you can get your answers you need there, and you can see there's a bit of a pattern or a trend where you 're gonna get some buy-in, and that's the level that you're comfortable with, then you should be all good from there.

Skye: So aside from the fees, and I'll say this loosely, how can I tell whether the buyer's agent that I'm dealing with is technically a $6,000 buyer's agent dressed up in a $12,000 fee? Like, how can I tell the difference, when I'm having that conversation with them early on?

Pete: It comes down to their process. We're pretty methodical in terms of our process, where it's one to two weeks understanding what they want. What we call developing the brief, getting [00:21:00] firm on their goals and where they wanna be in the next 10, 15, 20 years. We call them the destination calls.

Skye: I love that. Which is a fancy word.

Pete: Better than a discovery call, but it's a couple of destination calls to firm that up.

Skye: Mm.

Pete: And then from there, when we've got their goals around budgets and the number of properties they want, where they wanna be, income goals so we spent a good week or two just on their goals. That might be one or two meetings. We'll send some information back and forth. Then we move into the research phase, which normally takes probably about a week, where we develop all the research. We do what we call, our Loom video. So we'll actually record ourselves talking through the different locations, the different property types, because again, in the destination call, we would have worked out the type of property that they're comfortable with.

And then we'll go through the research for about a week or two, get clients comfortable- Mm ... so that they know why they're buying in those locations. My big thing is I don't want my clients saying, "Oh, my buyer's agent's just recommending me buy in that area." Mm. I want them to list off-

Skye: You want to understand why they're buying there

Pete: I want them to list off the reasons why.

Skye: Can you understand why your buyer's agent is telling you to buy there? What's the [00:22:00] theory? 'cause you're right. I think when I hear the negatives, it's just because, well, that's what the BA presented.

Pete: Yeah.

Skye: I love that.

Pete: So that's a two to three-week process in total, from destination calls into the research. Then we start the sourcing. Again, that can take anywhere between one to six weeks, but it does happen quickly 'cause we do have properties already

... in the pipeline. We're buying in those areas actively as well, which again should be a question, to the buyer's agent.

"Have you bought in those areas before, and how many properties have you bought in those areas?"

Skye: Mm. Good one.

Pete: So yeah, we'll go through the sourcing, and then as I've already said, we try and give clients two to three days to think about the property before we actually make that offer, and then we guide 'em through the next steps around building and pest, conveyance introductions, contract reviews, property management, and all that kinda stuff.

So it's about a five-step process. And if you ask the buyer's agent on the call, I'm pretty sure you'll be able to tell the difference between a 6 and a $12-15,000 buyer's agent because

Skye: They have a clear framework versus-

Pete: They have a framework, correct. Yeah, versus-

Skye: "Oh, I've just been buying lots in this area, and my clients have made 100 [00:23:00] grand, and-"

Pete: Yeah

Client testimonials are also very important, too. I'll just throw that one in there.

Skye: Okay.

Pete: If you're feeling a bit nervous, particularly with some of the, the cheaper BAs, actually ask them for client referrals.

Skye: So when you say client testimonials, 'cause I think this is important to define- Mm

because a lot of people don't think about reviews. So, Google reviews, for example, are very difficult to fake. But testimonials on a website, well, anyone can write them.

Pete: Yes. That's true

Skye: ... what do you say when people ask for testimonials?

Pete: So I obviously point them towards the Google reviews.

Skye: Yeah

Pete: But also, I've got clients that are happy to take a call. that's the important part

Skye: the fact that your clients are so happy they're happy to tell other people why you're amazing- Yep ... Is a really strong sign. Yeah.

I bet there's a lot of BAs that couldn't do that.

Pete: No, no, and that's any profession, though. it's just so easy to present yourself as an expert when you're not really these days.

Skye: Yeah, absolutely, but to hear it from someone who is not getting paid, not affiliated, but genuinely doing it because they had a good outcome There's lots of businesses that couldn't do that

7

Skye: so moving into question seven. Can a buyer's agent actually help me avoid [00:24:00] mistakes? And what do you think are the common mistakes first-time investors make?

Pete: Well, that's what they're there for. They're to help you avoid those mistakes.

Skye: Hmm.

Pete: There's even more value add there if the buyer's agent's an active investor as well.

Hmm. Because, from my point of view, I try and guide my clients to not make the same mistakes that I made. Hmm. 'Cause I've been in their shoes before. So yes, 100%, that's kinda what they're there for. the, look, the common mistakes are those kind of ones that we hear about all the time. House and land packages, buying in the wrong location, buying houses that are lemons.

Those really common ones that lead people to sell early and lose money on property. 'Cause if you hold property long enough, you are gonna make money.

Skye: Yeah.

Pete: Which is something you are a big advocate for, and me too.

Skye: Yeah.

Pete: But if you get it wrong and you make those common mistakes, you're gonna sell too early. It's very hard to recoup the stamp duty. It's very hard to recoup-

Skye: Any investment

Pete: ... The selling agent fees and all that. You gotta wait a couple of years. So if you're selling within the first two years because you bought a lemon or bought in the wrong location or the wrong property type that doesn't suit your comfort go to sleep factor Then yeah, you're gonna sell early- You've made a mistake ... and you've made a mistake. So yeah, buyer's agents will definitely help you [00:25:00] avoid those mistakes because- Mm-hmm

they'll get you into the right locations, into the right property types. But again, there can be another layer to that if they've actually done the thing, like they've actually invested in property, made the mistakes, then they're trying to help you not make those same mistakes.

Skye: Yeah. I feel like that should be a mandatory prerequisite for your job. I mean, it should be in property management too, quite frankly. And from what you see are there buyer's agents out there who aren't doing the thing? They've never bought an investment property.

Pete: Yep. Yep. Yeah. There's a low barrier. I really think you need to have done it. From a buyer's agent point of view, you're recommending a property and a location, you've been through it.

Skye: Mm.

Pete: You should have done the thing. This is a big decision.

Skye: I think it needs-

Pete: Like it's huge

Skye: ... to be property management too, though, because it may be that 10 year hold. Mm. And if they don't understand what you're trying to achieve because they've never even owned a property, let alone- Mm ... an investment property, the complaints that I hear are because they don't understand they don't understand the challenges of hanging onto a property, the stress.

Pete: Yeah, that's fair. Yep.

Skye: if you've never owned a property, you're just not going to understand that. It's not [00:26:00] to say that they can't be good. They might be good, but if they haven't made those mistakes, how are they going to help you avoid- yours?

Pete: It's the maintenance side of things, I think that's the big buy-in for PM. Just recognising what maintenance needs to be done now rather than waiting.

Skye: Preventative.

Pete: Preventative maintenance, yeah. That's a fair point.

Skye: So a lot of the value isn't obvious upfront with a buyer's agent. It's over time because you bought it well, you're able to hold it.

Pete: Yeah, so performance is not the most ... It is obviously important, but that sleep at night factor, having an easier hold, not having headaches and maintenance and all that kind of stuff, that to me is important as well.

Skye: That's the long-term value.

Pete: Yeah, that allows you to hold it for another five, 10 years.

Mm. And that's when you're gonna really see, the value. Yeah. Yeah.

Skye: Love that. Now let's talk timing.

8

Skye: Question eight, should I wait until I know exactly what I want before I engage a buyer's agent?

Pete: No. I think engaging a buyer's agent early on is probably the wiser decision. If you can get with a buyer's agent who works really well with a mortgage broker, the two of them will be able to nut out a really good strategy.

Skye: Strategy.

Pete: Yeah. You only [00:27:00] know what you know. A broker can't also advise on locations and strategies, or they shouldn't be. I don't think they should wait, as long as they've got the deposit and the means -

though, and

Skye: Is this like when is it too early if they're not actually ready to purchase?

Pete: Yeah. From my point of view, if someone jumps on a call when they've got, let's say $40,000 in savings, probably a little bit too early.

But when they get to that 60, $70,000 mark, that's when it starts to make a little bit more sense to get on, engage a buyer's agent. They can work with your broker, come up with a strategy, get you into the best location possible. So I guess it might be too early when it comes down to your deposit- Mm or your means. If you've got someone who can go guarantor, happy days for you. Mm. You can pretty much engage a buyer's agent right away because you can buy investment properties via guarantors now. But-

Skye: I didn't know that.

Pete: Yeah, it's crazy. We've done a few deals now where parents Yeah ... Have gone guarantor for their kids. The kids have got no money.

Skye: Yeah.

Pete: But they've all of a sudden got an investment property a couple months later and-

Skye: That's awesome

Pete: ... they've engaged a buyer's agent or myself to do it. Which is great.

Skye: Yeah. Great strategy.

Pete: But that's when the broker and buyer's agent relationship works really well.

Mm. But yeah, I think it would come down to the deposit you [00:28:00] have.

Skye: Mm-hmm.

Pete: I love having those conversations though. Don't let that deter you from reaching out to a buyer's agent though as well.

Skye: Yeah.

Pete: Like, if you've got 40,000 in the bank, you're saving well.

Skye: Yeah.

Pete: You might only be 12 months away.

Skye: Yeah.

Pete: So it's good to get in early.

Skye: An understanding of- Yeah ... yeah, where you're headed.

Pete: Yeah. Because a good buyer's agent will point you in the right direction of a good mortgage broker as well. You can start the process early. You might not necessarily sign up with a buyer's agent.

Skye: Early, yeah.

Pete: Yeah, but you start to get into the ecosystem.

Skye: Mm-hmm.

Pete: With us, we've got Imti as well for broker.

Skye: Have the experts on your side.

Pete: You're the expert property management. Like, You get into that-

Skye: Mm ...

Pete: ecosystem and you're gonna get a better result 'cause whatever comes out in that 12 months is gonna get you-

Skye: Where you're headed

Pete: Where you wanna be. It's gonna get you thinking differently. And yeah, the earlier you can surround yourself with experts, the better.

Skye: When is it too late?

Pete: I don't think there's ever too late because look, property will continue to go up over time. We had a client, the one you're talking about. Yeah, like- He's famous ... reached, reached out to me on Instagram. We ended up settling on something January 2026. Three years out of the market. Mm. 200 and something thousand dollars of capital growth [00:29:00] missed.

Yeah, yeah. People could look at that and say that was too late when reality is, yeah, they could have bought in 2023. They had the means, the deposit, the equity in their home to do it. They just didn't feel comfortable.

Skye: Mm.

Pete: I don't think there is a too late as long as you actually do the thing. Mm. It's only too late if you never do the thing.

Skye: Yep. That's great advice, ' cause we come across that a lot.

Pete: Yeah.

9

Skye: Moving into question nine, do buyer's agents just push certain locations or hotspots?

And where do you think this perception comes from?

Pete: Oh, I think it's a lot of what we're seeing in the Reddit forums and TikToks and- Mm ... people's opinions, particularly around regional locations.

Skye: Mm-hmm. People's opinions.

Pete: and that's where it's stemming from, because, we've got some pretty good regional markets that we're buying in for clients, but these are major regions where you put the region side to side with a capital city from an industry and employment perspective, and they're the same thing. So they're very diversified areas, and they're pretty much mini capital cities. Mm-hmm. But a lot of people will think regions are not worth investing in, and that anyone's investing in there are, trying to chase hotspots.

Skye: Yep.

Pete: [00:30:00] But the reality is there's a strategy behind it. The yields are better in regions. There's reasons why we would recommend that, and I think that's where the perception comes from, though, is where they see buyer's agents heavily buying in regions instead of capital cities. But what they don't realise is a lot of people don't have 800, $900,000 which is basically what you need now to buy- Mm

into any capital city aside from Hobart and parts of Melbourne. Mm. But the rest of them now, you need that kind of money to buy anything of quality. People don't have that. No. Most people are sitting between that 5 to 700k bracket, and that's most likely gonna put you into a regional market, where you're still gonna get the high performance.

Mm. But I guess when people see that, they're like, "All these investors are buying into this region, and it's pumping the market." I don't think that's necessarily true. Unless you're going into those single industry towns like Whyalla, Port Pirie, or Mount Isa.

there are certain locations where I think there's certain investors that are pumping and inflating those markets. But for the most part- Mm ... I don't think, chasing hotspots is what a lot of buyer's agents are doing.

Skye: What do you think the risk is with chasing the hotspots?

Because [00:31:00] I come up against this a lot with the conversations I have, and my advice is usually the same. When you're hearing about a hotspot, it's too late.

Pete: Yeah, if it hits the media, it's too late.

Yeah. We look at markets like Perth and Brisbane, which are flying at the moment.

they are still what I would consider a hotspot. I think they'll still get some good growth, but we look at it from a five, 10-year window. So can we really see some of those markets doing another 120% in the next five years? On the balance of probability's unlikely, but again, you're just running into risks of stagnant growth as well.

You might get- Mm ... a really good uplift- Yeah ... in these markets. You might get 20%, 30% in two years, which is fantastic, but then what's the next three to five years- Yeah ... gonna be? So we try and get into the right time in the growth cycle. It's how I built my portfolio. The first year or two might not be great growth, but after that-

Skye: It's consistent

Pete: growth normally follows. Yep. And it's consistent and, yeah, you're not, getting those above average returns straight away, but over a five, 10-year period you will.

Skye: Mm.

Pete: But the other risk is if you do chase what I just think are hotspots, which are those single industry towns, you can make your quick gains, but you can also lose them just as [00:32:00] quickly as well.

Skye: Plus the, other headaches that you have in, doing that. Yeah. Taking that riskier approach.

Pete: You gotta be very strategic if you're chasing those hotspots.

Skye: Yeah. And maybe this is an opinion piece, and definitely not on our list of questions, but for people who are chasing hotspots and that's their strategy, they're not necessarily buying for long-term view, are they?

Pete: No. If you're a strategic investor, you can make a lot of money in what I believe are hotspots. Mm. Which again, single industry towns which just don't have- Mm ... a lot of good economic fundamentals behind them. You can make great money.

Skye: This is a different-

Pete: But you gotta get out

Skye: level of risk, right?

Pete: You gotta get out, yeah.

Skye: This is not, who we're hoping to speak to that have- Mm ... the long-term view in mind.

Pete: Yeah.

Skye: It's a different playing field.

Pete: They're speculative. And you gotta treat it like a stock-

Skye: It's like day trading, right?

Pete: It is. You gotta treat it like the stock market. You've gotta be looking at it regularly. You can buy somewhere in Bendigo or Ballarat in Victoria, you don't have to look at it. You know it's gonna perform over the next five, 10 years. But if you're buying Mount Isa or Whyalla, I know a lot of people are buying there, which I'm not a big fan of.

Skye: Risky.

Pete: But it's too risky because, if you're not watching the [00:33:00] market, you could very much be, "Yep, great, we got 20% in 12 months," then not look at it again-

Skye: But then what?

Pete: ... for 12 months.

Skye: Mm.

Pete: It might have come back again 20% or more. it's very high risk. So they're good for the speculative investor who understands what they're doing, they're getting in and getting out. But for 99% of people-

Skye: And they can afford to lose 20%.

Pete: Yeah, exactly. And they're normally people who have built a portfolio. Yeah. They've got the portfolio behind them already. Yeah. And they're bored or they wanna make quick money.

Mm. That's what they gear themselves towards, and they do that speculative- Yeah ... investing. But for the most part-

Skye: They have the ability to absorb it if it doesn't work out. Yeah. Whereas I think a lot of the clients that we like to work with, they're not in that position.

Pete: It's their savings, it's something they've worked so hard to get, you don't wanna be putting it into a market where they- Into risk ... could lose it. Yeah. Yep.

10

Skye: Moving into question 10: will using a buyer's agent actually improve my long-term outcome?

Where do you think long-term value is created?

Pete: Yeah, definitely. And it's similar to what we talked about in the previous question around getting into the right growth markets at the right time. If you take a long-term perspective, if you've bought right into those markets, you're gonna get a better return.

it- [00:34:00] What does a good outcome look like, though?

Yeah, so it's doesn't always come down to growth. It comes down to getting the process easygoing. They're guiding you in the right direction. There's, a lot of collaboration there as well.

And you got a property that you're comfortable with that isn't causing you enough headaches to want to sell it.

then you overlay that with the good long-term growth, then to me that's the perfect outcome.

Skye: Mm. Is it fair to say that, a good outcome is something that feels calm and under control versus something that gives you the headaches, stressful, might play out well later, but it's been a nightmare in the meantime?

Pete: Yeah. if you're having a bit of stress and rush decision-making and nightmare at the beginning- At the beginning ... yeah, it's gonna flow to the whole period as well. The rest of the process. Yeah. 'Cause you're buying something you're not comfortable with, and you're feeling rushed. Any issue that comes from that, you're always gonna remember that feeling. Anytime you get a call from a property manager on the property that you didn't really wanna buy, that your buyer's agent pushed you to buy, you're gonna feel a sense of anxiety and stress.

So I think calm process upfront in the buying side will then lead to a nice calm and easy hold. But the opposite, [00:35:00] if you're stressed upfront, it's gonna lead to that stress throughout the hold as well. That's

Skye: I could tell you off the top of my head, I know the clients of mine that shouldn't have bought it, or they shouldn't have made an investment because I know they freak out every time I ring them, because I'm never ringing with good news.

But the ones who were intentional in it, they were prepared for it. Yeah, okay, maybe they're like, "Oh, what's wrong now?" But they're not overly stressed by it when my name pops up on their phone. They're just preparing for what's coming.

11

Skye: Moving into question 11, who should actually use a buyer's agent and who shouldn't?

Pete: Look, my opinion of this has changed over the years, but I think we're at a point now where I think most people should be, and

I'm not trying to say that to self-promote what I do for clients, but it's the inaction I'm finding at the moment. So yes, at a high level, all investors should be trying to get the advice from a buyer's agent who has done the thing, and then they can help guide them in that direction.

Because it's like in business or in anything, if you can get access to someone who's done it-

Skye: Mm

Pete: ... then you're going to avoid all the mistakes they've made, and you're gonna make a lot more money and better decisions over that time period. That's anything. That's-

Skye: Mm

Pete: ... coaching whether you're in the gym [00:36:00] or business-

Skye: Yeah

Pete: or even in your profession as well at work, Mm ... getting around the right mentors,

Skye: People who've done it, and people who are ahead of you.

Pete: And unfortunately, you need to pay for that. That's just how the world operates. So I think getting around people like that is gonna put people into a better position.

In terms of like, people who shouldn't, I do struggle to think about that now because there's a lot of times now where I've helped first-time investors who they've been very, reluctant and nervous to actually buy. Had they not engaged the buyer's agent, aside from the research side of things, they wouldn't have made the decision. They didn't know what they were doing. They were kinda stuck, analysis paralysis. They had opinions from their parents. Even opinions from brokers as well, family, friends, and they didn't know which direction to take, and that's something that I think a lot of people are struggling with at the moment.

Skye: Mm.

Pete: market just kinda runs away from 'em.

Skye: Yep.

Pete: it's helping people make the decision to buy.

Skye: That's essentially what you do.

Pete: Yeah, and that's essentially what we're doing.

Skye: Because they could do it themselves, right?

Pete: People can self-manage property themselves. Yeah. They can sell a property themselves. They can buy a property themselves. But it-

Skye: Why would you?

Pete: Yeah, exactly. At the end of the day, if you get a expert to [00:37:00] help you do that and you're paying them what they're worth, they're gonna definitely get you the results that you need, and they're more than likely gonna actually outperform whatever you decide to do. Mm. Because for most people, it's actually not to make a decision.

Skye: Yeah, absolutely. I think there's a reason why the industry exists, right? Yeah. ' cause you wouldn't all be able to charge these fees if you weren't providing some sort of value.

Mm. If there wasn't a need for it, like-

Pete: No one would be paying for it. Yeah.

Skye: I started as a buyer's agent. Had no training. But before I became a sales agent, I was working with a buyer's agency, and this was back in the time of the market where you just throw out 50 offers and one of them's gonna buy it, and you got lucky. Different marketplace now, but that was 20-odd years ago.

Pete: Yeah.

Skye: And so it's not like this is a new thing, although people seem to think that it is.

Pete: Mm.

Skye: And so my point of all that is, I think when people are considering hiring a buyer's agent, the resistance I see is that they could just do it themselves.

Pete: Yeah. That's a huge one.

Skye: Yes, you can.

Pete: And they justify it in their head that they can, which they can.

Skye: But then you spend two years researching-

Pete: Yeah, and that- ...

Skye: not making a decision ...

Pete: that [00:38:00] $15,000 fee you've just-

Skye: Burnt ...

You could've made 100

grand.

Pete: 100%, yeah, especially when markets are moving at 5, 10 grand a month.

Skye: Which really the market has moved fairly fast since, what, COVID?

Pete: Yeah. Yeah. And I think it will continue to do so. I think we're entering a stage now- where it's a bit more stagnant. But again-

Skye: I think it We're still in a housing crisis. Yeah. If you look at the numbers of migration, the people who need housing, those available houses, the numbers are so far apart

Pete: there's just not enough to go around and- it'll be an interesting time over the next couple of months, but a good opportunity as well. And- Mm ... Another pushback people will think about from a buyer's agent point of view as well, if there's less competition, yeah, I can do it myself, but- Mm again, it's that whole thing of the negativity in the media or getting sucked into that off friends and family- Doubting yourself ... doubting yourself. You're not gonna make the decision. You're most likely not going to engage a buyer's agent, think you can do it yourself, and then six, seven months later you've done nothing because you've heard all the negative media and everything.

But

Skye: you've spoken to everyone about you doing this.

Pete: Yeah. And then you haven't done anything, and then all of a sudden the economy's turned and the market's started to shoot off again.

Skye: Mm.

Pete: That's the most likely [00:39:00] outcome for people who I personally think.

Skye: In the next 12 months.

Pete: who are gonna not engage a buyer's agent 'cause they think they can do it themselves even though they've been thinking about doing it for quite some time already. They're most likely still not going to buy.

Skye: To do something.

Pete: Yeah.

Skye: And not buying, you can't make the money until you buy, right?

Exactly. We're not making money sitting on the sidelines.

12

Skye: Last question: What should I do next if I'm still unsure?

Pete: So ideally you'd meet with a couple of buyer's agents. If you haven't done that already, and just get an understanding of their process, and start to ask the questions.

Skye: What questions?

Pete: Yeah. That's a good question. So- ... it would be what's their process?

Skye: Yeah.

Pete: Do they have a process? Yeah. Do they have a process and how long does that take? Mm. If it's really condensed, then that's a bit of a worrying sign, but making sure they can- Mm

step you through the process,

Skye: And it's clear.

Pete: Yeah, that it's clear and that they allow you to ask some questions. I mean, you don't wanna ask too many, but you should be able to challenge some of that.

Skye: Mm.

Pete: the second question would be around fees and just making sure you've got a clear understanding that the only fees that they're getting is from you the client- Mm ... And not from anyone else.

Skye: Oh, real estate [00:40:00] agents?

Pete: Yeah, I have had situations where agents have offered me-

Skye: A commission

Pete: a little commission on the side- Mm ... to recommend properties that they are currently listed-

Skye: Yep ...

Pete: Now these are in dead zones where we would never even look, but- ... of course some of these agents do have properties where we are looking to buy and- Mm ... and we like those suburbs.

I have had that quite a bit lately and it's-

Skye: Yeah

Pete: ... it's not good.

Skye: I think that's a sign of the times, that's a new thing. so I wanted to bring that up. Yeah. That in asking and perhaps considering where the buyer's agent is getting paid from is something that people might not be aware of.

Pete: Actually being really specific. Yeah. Like, Do you get commissions from developers? Do you get-

Skye: Do you get commissions from real estate agents? Yeah. Exactly

Pete: right. Like being very direct, and just seeing how they answer that, and then obviously overlaying that with the service agreement.

Now look, it's a hard one, people can lie, but you should be able to get a good sense for how they react, and if-

Skye: Yeah

Pete: ... at the end of the day, what you're signing on the contract should be what the buyer's agent does, so.

Skye: I think that's a valid point, that people can lie, but yeah, you should be able to-

feel a sense of trust with the person you're employing.

Pete: Yeah.

Skye: Quick follow on though. What do you think are red flags [00:41:00] with, someone who's feeling unsure?

Pete: Just following on from the previous point too, asking them what types of properties they're

buying.

For me, a red flag would be if the buyer's agent shows you recent purchases and they're all brand new house and land packages.

-: Mm.

Pete: Get them to show you what they've recently purchased. So when you get on these calls, they should be able to show you some recent deals that would suit what you're looking for. If they've actually done the right thing on the initial call and asked the questions and get a feel for what you're looking for, the buyer's agent should be able to come to that call and show you recent deals.

Skye: Yeah.

Pete: But if they're all house and land packages and they've just told you that they don't take cuts from developers, then to me that's a red flag.

Skye: That's a bit fishy. Yeah. Love that. So wrapping up, I think the key things here is you don't need to rush. You should definitely be asking a lot of questions and trying to understand how they work and if that fits what you're looking for, and whether you feel steady and calm throughout that process.

so thanks so much for filling us in on this process, Pete. I think it's been really beneficial. Even to me, there [00:42:00] were things here I wasn't aware of , and I meet with you every week. So if you have a moment, please leave us a review. Thanks for listening, and we will see you next week.