Depending on how vested you are in the ‘property investment market’ will depend entirely on whether you know about what I’m talking about, but if you don’t – I intend to shed some light for you anyway.
Basically, every month there are articles being written in property magazines about who should be able to discuss property investing, what makes someone qualified to do so, and what attributes and qualifications should they have under their belt. The reason I get a little annoyed by these articles is because 9/10 times they are written by someone with an agenda, little experience in property and rarely are they a licensed real estate agent.
The people who generally give advice on buying property are as follows:
- Buyers advocates
- Real estate agents
- Property spruikers
- Investment advisers
Before meeting with any of the above it’s important to know what skills they offer and qualifications they should have. I’ll break it down for you:
Works exclusively for the buyer, must be a licensed agent, should be a REIV member and will be bound by the laws of the Real Estate Agents act.
Real estate agent
Works exclusively for the vendor, must be a licensed agent, should be a REIV member and will be bound by the laws of the Real Estate Agents act.
Sales person working for the developer, no license or training required
None, they don’t even need to have completed their VCE
So as you can see above, when looking for help when buying a property the most qualified person to speak with is a buyer’s advocate, but how do you tell a good one apart from a bad one? This can be tricky because as a career property professional, I have never seen so many start-up advocacy firms. You would never see a real-estate agent go out on his/her own or be made partner after only 2-3 years experience, yet it’s happening in bucket loads in the buyer’s advocacy category.
A good buyer’s advocate should tick the following boxes:
- Be licensed
- Be a REIV member
- Have previously sold real estate
- Be able to tell you how many clients they have purchased for / sold for (this indicates their negotiation experience which is close to the top of the list in importance)
- Have a minimum of 4 years buyers agency experience (this should be a minimum only where they have a senior manager with 10 plus years experience to monitor/guide them). Without that I would stay well away
- Be able to provide you with clear statistics as to a) how many properties they negotiate on each year that are not advertised to the wider market, b) the average saving they offer their clients and c) most common method of purchase
In addition to the above, there are also groups who recommend that advocates join them in order to give advice (effectively pay them money) in order to give property investment advice – yet these groups don’t require you to be licensed, don’t offer any training, and don’t have any guidelines as to what makes a property a good investment choice. So also be wary of buyer’s agents that suggest that you should only deal with agents that are part of these groups.
All advocates will differ in what they believe makes a good investment. We at Infolio focus on capital growth in premium suburbs but others may help you buy in regional towns and look for yield. This is all fine so long as it meets with your budget and personal requirements. Advice on finances and structure should be handled by your financial planner/accountant and mortgage broker. If you follow the above, you should be as ‘safe as houses’!