Buying your first home can be an exciting experience. For many first-time home buyers however, it can also be a stressful journey. Recent research commissioned by St George Bank revealed that first-time home buyers can experience disturbed sleep and low productivity at work. Their relationships with partners, family and friends can also suffer as a result of the home buying process.
Being new to the process, the paperwork and complexities involved in buying your new home such as finance, market research, arranging property inspections or attending auctions can make you feel overwhelmed, confused and anxious.
Knowing that you have someone by your side who can help you through the entire experience can make a world of a difference. This is why many first-time home buyers turn to a buyer’s advocate who can help make home buying a less stressful and more successful process.
What is a Buyer’s Advocate?
A buyer’s advocate, also known as a buyer’s agent, is someone who looks for and purchases property on a buyer’s behalf. They are NOT real estate agents and have no connection with the seller or the agency representing them; hence they earn no commission on the sale of the house. The key difference between a real estate agent and a buyer’s agent is who they represent as, by law, a buyer’s agent can’t act for and accept a commission from both parties in the same transaction.
This means a buyer’s advocate or agent acts exclusively for the buyer and works on behalf of the buyer from searching, evaluation and negotiation through to the purchase of the property.
How can first-time home buyers benefit from working with a Buyer’s Advocate?
Buyer’s advocates are commonly used in the US, where a survey by the National Association of Realtors showed 63 percent of buyers purchased their property through a buyer’s advocate. Buyer’s advocates are also quickly gaining popularity in Australia, as many first-time home buyers and property investors see the value they offer in terms of time and cost savings, as well as helping ensure long-term increased value and returns on the property which often far outweigh the cost of the advocate.
If you are a first-time home buyer, here are the benefits of working with a buyer’s advocate.
They remove emotions from the purchase
Do you have your heart set on buying a particular property? As a first-time home buyer, it’s easy to “fall in love” with a home based on aesthetics, without careful consideration of location, cost, and potential issues of the property.
A buyer’s advocate is an objective party in the process – they won’t let their decisions become clouded by emotion. Buyer’s advocates do their research thoroughly and objectively, and present you with all the facts. They can help you find a home that you’ll not only love but will also have promising capital growth potential, giving you peace of mind that you are making an informed purchase.
Leverage their market knowledge
Buyer’s advocates have vast experience and knowledge in the property market, and are the best people who can advise you on the location and property that best fits your needs. This means you can use their experience to help you make the right decision and achieve the right balance between your financial growth and lifestyle objectives.
Buyer’s advocates are also aware of key market trends and can identify strong performing suburbs and those with the potential to do well in the long term, so a buyer can get into the market and purchase a property knowing that their purchase will perform financially over the long-term. They also have access to off-market listings that aren’t advertised online. Buyers can usually get better outcomes from these listings than in a competitive auction setting.
Potential time and cost savings
House hunting can be very time consuming and expensive. In Victoria the average buyer spends 7-12 months looking at properties and spends between $300-$499 when looking at a property. Imagine how much time and money you’ll spend going through countless listings and open homes yourself! A buyer’s advocate has the expertise and market knowledge that enables you to save time and money as you only have to look at properties that meet your criteria.
Get the best price for the property
Unless you’re an expert negotiator, you might not feel confident about having to bid or make an offer on a property. A buyer’s advocate is skilled and experienced in all aspects of bidding, negotiation, contracts, financing and the settlement process. They’ll bid on your behalf at an auction and support you during the negotiation process so you secure the property at the best possible price.
Some buyers, feeling quite desperate after having searched for a home for several months, tend to readily agree with the price set by the seller. With their experience in negotiations and armed with the right valuation data, a buyer’s advocate can challenge vendor’s price expectations. This means that the buyer can end up paying less than what they were ready to pay for.
Is getting a Buyer’s Advocate worth it?
There’s no doubt that having a professional by your side, working on your behalf through the entire process of purchasing a home can be helpful. For many people, navigating through the property market is tricky and stressful, so enlisting the services of someone with knowledge and experience can be well worth it.
Getting a buyer’s advocate comes at a price though. Some buyer’s advocates offer a fixed fee while others charge a percentage of the property purchase. You’ll need to account for their fee in your budget. It’s also worth considering that a buyer’s advocates main objective is to make sure they’ve secured the best property for your financial and lifestyle objectives as they want you to use them again for your next property purchase. If their service and purchase leads to a positive financial outcome for you, you are going to entrust future investments to your advocate.
If you do choose to buy your first home with a buyer’s advocate, check that they are licensed and experienced in the specific area you’re looking at. They must be strategic and have specific market knowledge to help you find the property that best fits your criteria.
Buying your first home is a big decision so make sure you enlist a buyer’s advocate that you trust and feel comfortable with. Working with the right buyer’s advocate can make the process of buying a home an enjoyable one whilst saving you valuable time and effort.
Category: Property Investment
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