CHAMPAGNE TASTE ON A BEER BUDGET

Getting new purchasers correlated to the reality of the market or the current fair value of a property can be an interesting dilemma and conundrum for a Buyer’s Agent.

Often people in this position will revert to a buyer’s agent hoping to change this scenario. The core underlying problem has not changed. Education about the market prices is one thing and using a BA to find and facilitate getting property is another. It is about being realistic and competitive in the market where a buyer has reasonable expectations… It saves time, money, and heartache. However, a key problem can remain – how can the gap of expectation be closed compared to the actual price of the market. The truth is the Buyer must understand their capability before they start searching.

Procrastination is a dilemma that can occur in this scenario as more properties do not meet their expectations and frustration sets in with comments such as ‘too much money for what is on offer’, ‘The quality is just not there’… meanwhile the market moves on and they often spend months if not years of searching. Many forget the difficulty in acquiring that initial deposit versus waiting and watching prices and capital growth pass them by. Understanding your capability helps makes purchase decisions very easy when the budget is controlling the emotion.

Indecision is exasperated when buyers cannot accurately assess a property value or understand the true market value of a property. This problem always inhibits a good purchase decision. The non-purchase conundrum continues.

Understanding the buyer’s journey and where they are up to is critical. However, so is the Buyer’s understanding of where they have potentially been failing and what must happen next to effectively execute on buying a property. If a purchaser has sought help in their journey and engaged a professional to do so they are surrendering to professional advice and expertise.

With a Buyer’s Agent, the outcome can often be a faster purchase without the pain. After all, you sought advice for a reason, you prepared to pay money for this advice, and it stands to reason you should listen to it…Not always so. Control is a big factor.

Good Buyers Agents will always allow the client to retain control or have the final say. This is why getting alignment is critical. Poor alignment or lack of due diligence on a purchaser can be a problematic issue on several fronts. No finance, Non-compatibility, and inability to make a decision, can just frustrate the purchase process and lead to a termination of the arrangement and no property for the client.

If you demand control, these parameters have to be clearly outlined and understood at the onset and importantly be accepted as the basis for a suitable relationship with the Buyer’s Agent. The best business is where synergy exists in relationships, inclusive of trust, realistic expectations, and understanding of the true nature of the market. The aim is to give the purchaser an enjoyable experience with leadership and guidance that reduces the stress and anxiety of a property purchase.

The workloads in finding the right property can be quite intense in time and effort to get the ‘shortlist’ of the right properties. The real work dollar value work starts in the negotiations. Much of the nuance and drama involved in certain transactions will not be transferred to the Buyer as this would taint the customer experience. The Buyers Agent is employed to navigate and buffer these problems and to create a smooth transaction for the buyer.

Client budget alignment and capability are crucial factors in completing a good transaction. There are many instances where buyers have not had the financial ability they have stated and have narrowly averted large financial penalties or have experienced them. Many Buyers Agents will only proceed with a client once they have physical confirmation of purchasers’ funding. This is to protect the Client.

It is also necessary to protect the Buyers Agents reputation as well so client due diligence is essential. Often if they are not ready – they need to save or originate more funds or downgrade their expectations. Usually, it is the latter. These can be awkward conversations for some.

Continually I have dealt with interstate purchasers typically migrating from Melbourne who is looking at Sydney for their new residence. They may have left a relatively newly built home on good size piece of land and expect an entry into Sydney in the Eastern Suburbs with a small budget. What is a lot of money in one area may not even get you a simple start in other areas.

For example – Some potential clients had $1.8 Million, expecting a 4-bedroom home under five years old with 3 bathrooms, 2 car spaces on 860m2 of level land with a specific open plan layout… THIS IS NOT GOING TO HAPPEN. These properties were typically x3 plus this price.

Aligning budgets to your desired area is very important. Perhaps most importantly is having a preapproval of funds or knowing your financial ability before even commencing the search.

A simple tip is to search the median house price in your target area to understand a comparable basic value for a home similar to what you would like. It saves a lot of time and embarrassment.

For more information contact Gary Damp at [email protected]