05 Jul Buyer’s Agents – Simon Cohen
In today’s show we talk to Simon Cohen, a partner in Cohen Handler. He and his good friend, founding partner and young entrepreneur, Ben Handler, started the agency some time ago, and it’s one of those great buyer’s agencies in Australia.
Kevin: I love talking to buyer’s agents, because I see that buyer’s agents in Australia are really a great emerging trend. If you look overseas, in fact, some of the figures we’re going to share with you are staggering to me, and I’m sure they will be to you, too. About 80% of property buyers actually engage an agent to help them buy a property in America, but who pays the commission? This is the interesting thing.
I’m talking now to Simon Cohen is a partner in Cohen Handler. He and his good friend, founding partner and young entrepreneur, Ben Handler, started the agency some time ago, and it’s one of those great buyer’s agencies in Australia.
Good day, Simon. Thanks for your time.
Simon: My absolute pleasure. How are you?
Kevin: I’m fantastic, thank you. Simon, in the States, the commissions are a lot higher than they are in Australia. Who pays over there?
Simon: Typically, the commissions are around 6%, and the seller pays that, and it’s split between selling agent and buying agent – a bit of an interesting model, but all paid by the selling side.
Kevin: That is incredible – 6%. When you look at the average in Australia, it’s around about 2.5% to 3%. I know some agencies actually charge more than that, but that’s quite staggering, that figure.
Simon: Absolutely right.
Kevin: I want to talk to you about a couple of trends that you’re noticing and also help me dispel a myth. I commonly am asked whether there are good or bad times to sell and buy property in Australia. What’s your view on that?
Simon: Typically, everyone says springtime is the best time to buy – everything comes on the market then. I think definitely, over the past two years, we’ve seen that that hasn’t been the case. The markets across the Sydney and Melbourne markets have been dry, and there hasn’t been a lot of stock.
Personally, we found at Cohen Handler some of the best times to buy are December, January, and July, when most of the other buyers are out of the market and you actually are competing with fewer buyers.
Typically, if you’re looking to buy, always find the times where there are fewer people that you’re competing against, but most people do think that September, October, November is the time. But in the last couple of years, it hasn’t really been the case.
Kevin: It’s easier to take that general view, and I think, even, if you look at some of the micro-markets around Australia, too, you look at the Gold Coast, you wouldn’t buy a property on the Gold Coast, I wouldn’t have thought, in that Christmas period because that’s actually when most of the stock is actually on the market.
Simon: Absolutely, or in Palm Beach. You’ll pay a higher price because everyone falls in love with the glowing water, but if you buy in winter where it’s damp and miserable, you’re likely to get a better deal.
Kevin: Let’s look at a similar situation, whether or not you should buy in a seller’s market, because you’d assume that in a seller’s market, all the momentum is for the seller, not so much the buyer.
Simon: Yes. Look, it really depends. In every market, people have to buy and sell for different reasons. People have kids, they get married, they get divorced. Unfortunately, people pass away; that’s just life. If you know where to look and you work with the right people, there are always opportunities.
Sellers buy themselves in seller’s markets, so they have pressure to sell themselves. There are a whole number of reasons why you can get good opportunities. It’s just making sure you’re aware of them and you know where to look.
Kevin: When you’re looking around for clients, Simon, do you look for things like how long the property has been on the market, how negotiable these sellers might be, and even what their motivation is?
Simon: I think the first thing is what their motivation is. If we can figure out why they’re selling, and if we can try and match up terms that benefit them that might not necessarily mean paying more money, that’s an ultimate win for our clients, and also for them, if they’ve bought and now they want bridging finance or they need six months in the house and we can give them a long settlement. Those are really, really helpful things for us.
Kevin: The Internet, of course, has opened up real estate to a worldwide market, and we’re seeing a lot of interest coming from overseas. Technology like virtual reality – is that helping us sell properties in Australia to overseas buyers?
Simon: I think we’ve seen video and smartphone, being able to send our client photos and videos in real time straight away. We were one of the first companies to adopt the Google Glasses. Unfortunately, Google have had a few technical issues with those, but we’re always looking to adopt these new technologies to help people overseas see property as if they were looking through their own eyes when they were here, if that makes sense.
Absolutely, as technology gets better and as smartphones get quicker and pixels are greater, and all of that, it makes it a lot easier for people to buy sight unseen.
Kevin: Yes, indeed. Mate, it’s great talking to you. We are out of time, unfortunately, but I thank you. We’d love to have you back in the show in sometime in the future.
Simon Cohen from Cohen Handler has been my guest. Simon, thanks again for your time.
Simon: My absolute pleasure. Thank you.