\nIn today’s show Patrick Bright<\/b>,\u00a0from EPS Property Search, joins us with some timely tips on buying at auction and, in particular, ways to make sure you don\u2019t pay too much.
\n <\/p>\nTranscript:<\/h4>\n
Kevin:\u00a0 <\/b>We talk about it from time to time, but buying at auction is both exciting and also can be a very good way to buy a property; it\u2019s certainly a good way to sell one. What are some of the tips if you are going to an auction this weekend, and you\u2019re a bit concerned that you may pay a little bit too much?
\nLet\u2019s talk to Patrick Bright from EPS Property Search; they\u2019re buyer\u2019s agents in Sydney. I guess this is something you do quite often, Patrick, is it?
\nPatrick:\u00a0 <\/b>Yes, it is.
\nKevin:\u00a0 <\/b>I\u2019ve asked you to put together some tips for our listeners on what they should be doing if they\u2019re in fact going to go and buy. What would you suggest?
\nPatrick:\u00a0 <\/b>If you\u2019re going to go buy at auction, the first thing to do is essentially work out your finances so you know what your preapproval limit is and obviously don\u2019t go above that, so you\u2019re not looking at properties that you can\u2019t afford. Then you have to look at the value of the property and assess the value, so you can make an informed decision.
\nYou shouldn\u2019t go to an auction thinking that other people that have done research and if you just pay $1000 or $5000 more than they do, then you have a good deal. A lot of people do go to an auction thinking that, and if you have a couple of unaware, uninformed buyers outbidding each other, that\u2019s where silly prices can be paid.
\nKevin:\u00a0 <\/b>Just talking about the price for a minute, Patrick, you mentioned about doing your homework and so on. How much notice can you take of what an agent tells you? We\u2019ve heard a lot about price ranging and low-balling and so on. What would be your advice there?
\nPatrick:\u00a0 <\/b>Yes, it happens. The problem with under-quoting particularly in the Sydney and Melbourne markets\u2026 I think now, with the changes of law in Queensland, that you\u2019ll probably eradicate the under-quoting problem; you\u2019re forced now to do research, whereas in Sydney and Melbourne, people are a bit lazy, and they take the agent\u2019s guidance. Sometimes you just don\u2019t know whether you have to add 5%, 10%, 20%, or 30% \u2013 and I\u2019ve seen many agents under-quote by more \u2013 so you need to do your research.
\nYou really have to treat every property like it hasn\u2019t got a price and do your own research, so you\u2019re not influenced by that \u2013 as in led up the garden path by paying too much \u2013 or coming to the auction without enough money in your back pocket to be a serious contender.
\nKevin:\u00a0 <\/b>Do you think it\u2019s a good idea to have a professional valuation done?
\nPatrick:\u00a0 <\/b>They can certainly help. If you want to get a valuation done, that will certainly help take a bit of emotion out of it. But you also have to understand that in a rising market you\u2019re going to have to add some money to that valuation, because the valuer is going to be pricing that up based on historical sales over the past few months, maybe even three to six months back. In a rising market, where we\u2019ve seen markets sometimes lifting by 3% to 5% in a quarter, you\u2019re going to have to factor that in.
\nKevin:\u00a0 <\/b>As a buyer at an auction, you\u2019re going into a scenario where the odds are pretty well stacked against you, aren\u2019t they? The agent is working for the seller; you\u2019d assume, too, the auctioneer is also working for the seller. So you really do have to do your homework and know that you\u2019re on a firm footing when you start to bid.
\nPatrick:\u00a0 <\/b>Very good point, Kevin. You are essentially on your own when you\u2019re going into buying any property, because unless you have a buyer\u2019s agent or an advocate representing you, you are essentially on your own. Everyone else in the transaction is working for the seller\u2019s best interest, so you certainly have to have your wits about you.
\nKevin:\u00a0 <\/b>It\u2019s certainly made the buyer\u2019s agent a lot more important in this scenario. As we\u2019ve come to realize, agents can\u2019t work on both sides; they technically have to work for the seller. No wonder that buyer\u2019s agents have become so popular.
\nPatrick:\u00a0 <\/b>Yes, they are becoming more popular. I think it\u2019s becoming more normalized. It\u2019s been around in the US for 30-plus years. In Europe, it\u2019s quite common. It\u2019s been in Australia probably about 15 years now, and it\u2019s starting to really catch on, in particular over the last five years.
\nIt makes sense. You don\u2019t have a lawyer representing the buyer and the seller in the same transaction, so why would you have an agent representing the buyer and the seller in the same transaction? It does make sense.
\nJust as a good, quality sales agent can have a great influence on the sale of a property over and above what other sales agents or even the vendor would get themselves, the same thing can happen with a buyer\u2019s agent. If you get a good buyer\u2019s agent, they can certainly have an influence on the outcome for you.
\nKevin:\u00a0 <\/b>If you talk to an American agent, to them it\u2019s totally foreign that they would actually work on behalf of both parties, and I wonder therefore why traditional agents tend to want to hang on to both sides of the transactions. Do you think it\u2019s because it gives them a little bit more control of the negotiation?
\nPatrick:\u00a0 <\/b>Yes, some sales agents don\u2019t like buyer\u2019s agents because they can\u2019t control them as much and they don\u2019t have as much influence over them. I know that does frustrate some. But at the end of the day, a lot of the sales agents do use it. I\u2019ve helped three sales agents in the last six months buy their homes. I get a lot of them as clients, because they can see the value that we add when we\u2019re buying from them, and they think, \u201cGee, I would like to have that on my side. I\u2019m working most weekends selling stuff, so I barely have time to look myself anyway.\u201d
\nKevin:\u00a0 <\/b>It\u2019s crazy when you think of it, because agents do actually earn their commission out of the seller, not out of the buyer, so you\u2019d think they\u2019d be more than willing to give up that side of the business that actually earns them no money.
\nPatrick:\u00a0 <\/b>Yes. At the end of the day, they either deal with two parties \u2013 as in managing the buyer and managing the seller \u2013 to try and get the transaction together, or they actually just focus on working with their sellers. I think the experienced agents \u2013 the majority of them \u2013 are certainly in favor of working with a professional on the other side. They\u2019re very happy to do it. But as I said, there are some out there who are a bit fearful about it because they don\u2019t like not being able to pull the wool over buyers\u2019 eyes.
\nKevin:\u00a0 <\/b>It\u2019s certainly a changing environment, that\u2019s for sure. Mate, we\u2019re out of time, but I want to thank you for giving us your time.
\nPatrick Bright, who is a buyer\u2019s agent. He\u2019s from EPS Property Search; they\u2019re based in Sydney. Thanks for your time; we\u2019ll catch you again soon.
\nPatrick:\u00a0 <\/b>Pleasure. Thanks, Kevin.<\/p>\n","protected":false},"excerpt":{"rendered":"
In today’s show Patrick Bright,\u00a0from EPS Property Search, joins us with some timely tips on buying at auction and, in particular, ways to make sure you don\u2019t pay too much. Transcript: Kevin:\u00a0 We talk about it from time to time, but buying at…<\/p>\n","protected":false},"author":176692471,"featured_media":4549,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[10,13,25],"tags":[101],"class_list":["post-4546","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-kevin-turner-sponsored-channels","category-latest-story","category-sponsored-channels","tag-podcast"],"yoast_head":"\n