Are you Struggling with your Property Buying Decisions?
Aug 04, 2017
Property buyers may also struggle to distinguish between property spruikers and trustworthy buyers agents. As a result, they may inadvertently trust the wrong people, and go on to make the wrong decisions – which can cost them thousands of dollars, with an impact that could last years.
When property owners sell their property, whether they are an owner occupier or an investor, they almost always use a seller’s agent. The standard commission is 2-3%, and on top of that, thousands of dollars are required for a marketing campaign.
Put simply, vendors strongly believe the value of a seller’s agent is worth at least 3% of the property price, as they’re willing to invest that much in their agent to make a quality sale.
Interestingly, on the flip side, only a relatively small number of transactions are completed with the involvement of buyers’ agents. This could indicate that the vast majority of property buyers do not believe a buyers’ agent is worth their commission, even when they can help investors to source quality properties.
Research and Execution
How can we explain this? The simple explanation is that the vendor performs an independent research. When a buyer knows an area very well and is informed regarding the most recently sold properties, they only engage with a few seller’s agents to ask for feedback. The selected seller’s agent only needs to execute the research results and the agreed terms.
Which means, there is a clear segregation between the research and the execution.
However, when a person looks to buy an investment property using a property advisor (including property spruikers on one hand and trust-worthy buyers agents’ on the other hand), the vast majority of them offer both the research and the execution.
As a research company, we get plenty of insights from property buyers. Based on our clients’ feedback, we have found that the lack of segregation between the research (i.e. recommendations) and the execution creates a high level of confusion and lack of trust amongst buyers.
Can you blame them? The recommendations made by different property professionals are often completely different; there is no independent validation; it is often unclear to the buyers who the mysterious ‘research team’ is and what their qualifications are; and the research itself may be confusing to interpret.
As a result, many buyers politely thank the property professionals for their time, and then continue with their own journey… At this point, they may be so overwhelmed, they decide not to buy anything at all.
RiskWise Property Research has created a new model to address this. We are an independent research company that provides custom made reports, including risk assessment and projected returns on any individual property in Australia. We also validate assessments made by property professionals, such as developers.
An example of a professional partnership that we have is Invest In Properties Australia (www.investinproperties.com.au).
Yaron Gal, the CEO of the company, confirms:
‘We offer great customer service and add a lot of value to our clients, and the cooperation with RiskWise brought plenty of depth to our company. RiskWise is truly a top-quality research company that deliver outstanding research services with a great turnaround time, and as a result of our partnership we see a higher level of confidence with our customers. You need to remember that even people who have few properties are nervous when they need to make a half a million to a million dollars decision. Our collaboration has significantly improved both the quality and the efficiency of the process, where our clients are very clear on their objectives and focus areas.”
RiskWise Property Research