Should You Use a Buying Agent? - Part Five

In summary the main things to think about are how much are you prepared to pay a buying agent and are they any good.
If you have checked them out and they have a track record of doing good work for other people, then not only can they save you time spent looking for a property but they may be able to use their connections with agents to access better property deals than you could find yourself.
But they are not cheap.
So, the best advice is to check them out carefully and give them a tight brief.
That way you could be on to a good thing.
Read parts one to four of this guide on the rest of the blog.
Copyright David Lawrenson 2007
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Should You Use a Buying Agent? - Part Four

Good buying agents know their patch well and they will have bought quite a lot of property in the area for their own account and / or for other buyers.
As we have already said, good ones can take the hassle out of the search process and can get good prices from agents and other sellers by using their buying power and knowledge of the market.
And for an estate agent, the existence of buying agents makes their job that much easier and what can happen is a property comes up where the estate agent knows he has a buying agent waiting for exactly that kind of property for a client.
In this situation, the estate agent knows the property can be sold easily with a minimum of aggravation. Indeed, to make sure he gets the business from other estate agents, the estate agent may make it known to the vendor that he has a buyer just waiting to snap up the property.
This can mean that there are some properties which may never even make it into the estate agents windows - they go straight to a buying agent.
So, if you use a buying agent who has good relations with an estate agent this gives you a clear advantage over other buyers.
Final part tomorrow.
Copyright David Lawrenson 2007.
Back to site www.lettingfocus.com

Should You Use a Buying Agent? - Part Three

Of course, buying agents should use their skill to buy at a good (i.e. below market) price and you may want to structure the deal you have with them to incentivise this.
Ask about the agents degree of local knowledge in terms of capital values and rental income and get at least three references. If they are unwilling to give them, then go to someone else.
Buying agents charging structures vary a great deal.
Some work on a free initial service with fees only payable on exchange of contracts or completion. Others will charge a basic retainer or registration fee – typically this will about £1,250 in London, though this can be much higher or lower depending on how up or down market you are going.
The fees will typically be 1.5% to 2% plus VAT of the purchase price. Some companies will deduct the retainer fee from this, some will not.
If you vary the percentage to incentivise them to get a good price, that's fine but this implies you know something about market values where you are buying.
See also part one and part two of this guide on earlier blogs.
Part four out tomorrow.
Or go back to main site at www.lettingfocus.com
David Lawrenson

Should You Use a Buying Agent? - Part Two

Ask what aspects of the buying agents’ activities they outsource because if they subcontract say the letting and management they will have less control.
Usually you are better off using a different specialist agent to find tenants and maybe another one to manage tenants (or do it yourself).
This is because there are different skills involved in finding a property to those involved in furnishing it and different skills again are required for letting and management.
At the very least, you should consider using another company for the letting management side.
In particular, be wary of buying agents that are part of estate agency arms as there is the obvious temptation for the buying agent to recommend a property that the estate agency side is trying to sell - and which might not be best for you.
Part Three Tomorrow.
Back to site: www.lettingfocus.com
Copyright David Lawrenson 2007

Should You Use a Buying Agent? - Part One

Firstly you should know that the house search / buying agent / property finder market is unregulated.
And we have already seen the collapse of one major property investment company which specialised in buying properties in depressed parts of the north of England with the intention of letting them to social housing tenants.
Many of their investors were from the south east who had bought “sight unseen” after seeing the company’s ads in the quality papers. They had not even bothered to do any research on the area that they are buying.
So one of the key rules is to ask questions about the area you are buying in.
Go and see the areas for yourself and give the buying agent a tight brief -this road, not that road, this postal area, not that one!
Unless you are rich enough to risk losing a lot of money, you must get involved a bit – you cannot afford to be too “hands off”
Part two of this guide tomorrow.
Back to site www.lettingfocus.com
Copyright David Lawrenson 2006