Ep 41. So You want to be a Buyer’s Agent?
In this episode, Michelle explores the role of buyer's agents and highlights the qualities and responsibilities of buyer's agents in the property market.
Here’s what you’ll learn from today’s episode:
We understand the role of buyer's agents and discuss how this profession has gained popularity in the property buying landscape in recent years
The different pathways to becoming a buyer's agent, including the need for a license, which varies by state in Australia.
The value of working with experienced professionals and the need for apprenticeships or mentorships to learn critical skills such as negotiation, property selection, and due diligence.
What the qualities and responsibilities of a buyer's agent are,, including the ability to critically evaluate properties, read strata reports, appraise properties accurately, and provide value to clients by helping them make sound property investments.
Speakers in today’s episode:
Michelle May - Michelle May Buyers Agents
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VIEW TRANSCRIPT
Hi, and welcome to another episode of the Buy Your Side podcast, the property podcast to help you make smarter property buying decisions. My name is Michelle May, and I am the principal of Michelle May Buyer's Agents here in Sydney.
So today, a little bit of a different episode. You want become a buyer's agent, do you? Well, let me fill you in. I think that the rise of the buyer's agents has been particularly interesting in the last five years or so. It's become a much more common thing for the buyers in the property buying equation, in the property landscape, to reach out for someone like me and actually invest in the advice and expertise of a buyer's agent.
So with that comes, of course, a whole mass of people who want to join that industry. And I say, good for you. It's a fantastic job. I love what I do and I'm always very encouraging for new people to join the industry. I get a lot of people reaching out through my socials and through the website asking me for advice on the best pathway to follow and just to get a better understanding of what it is that we actually do, because I don't think a lot of people actually understand.
You know, the day-to-day of a buyer's agent's life, I mean, we've all seen, Location, Location, Location, maybe The Block or other property shows like Luxe Listings and you get a kind of glimpse. But of course, you know, that's reality tv. And let me tell you, my day-to-day work life is nothing like it.
So I thought I'd do this episode to help you, potentially get more enthusiastic, or less so, but just to lift the veil a little bit. So I think the biggest misconception that people have about our job is that it's just all about property inspections and helping people match with their dream home.
And that's certainly a part of the job, but there's so much more to it. I think the biggest difference between sales agents and buyer's agents, of course, is actually critical thinking. A sales agent's skills are predominantly all around, like I said, sales. So it's all about presenting the property that you are selling for your vendor in the best possible light.
You know, having chats with potential buyers and showing off the major positives and helping them fall in love with the property. As a buyer's agent, it's actually your job to show them the good, the bad, and the ugly, and really show the potential risks with making a purchase of this magnitude because, particularly in Sydney and Melbourne, but even around all of Australia, we're not talking about small change here.
We're talking about a million dollars or more. It doesn't even buy you a lot anymore. So it's a lot of money. And you know, these people, your buyers, your clients have saved and scrimped for a long time. And it's a big financial risk if obviously they buy the wrong thing. So with becoming a buyer's agent, it's not just about connecting clients with properties.
It's so much more because that's actually the easy part. It's about what you know, what to do next. You know, clients come to you because you are the expert. You are paid to advise them to make the right decision. You are paid to have the experience to negotiate, to go to auction, and to know what to look out for.
So at the moment, there are different pathways to becoming a buyer's agent. Obviously you need a licence and it's different in every state. But here in New South Wales, you've got your certificate of registration, you've got your Class two, class one licence and then when you are a class one licensee, you can actually start your own business.
It's different in Queensland, I'm sure, and Victoria again. So you'd have to do your own research there. There are different course providers. You know, you've got the REI courses, which you know, are fantastic. You've got KAPLAN courses, but most of the courses that are provided are very much geared to the sales side of things.
There are not many providers that will actually spend time and truly dedicate educating people who just want to be on the buying side of things. So there's definitely a lack of those courses available. They're getting there, but how is it then that as a person entering the industry, how do you make sure that you know actually everything there is to know that you should be providing for your clients?
Well, let me tell you a little bit about how I started, and maybe that'll help you, but I actually flipped properties for 12 years before I became a buyer's agent's apprentice. So I was in the UK, had a normal job, bought one property a year, spent it renovating, and reinstating period features. Going through the whole process and then selling it at the end through a sales agent. I would never sell it myself, but I was involved in the whole process from purchase to sale basically for 12 years. At that time in the UK the show Location,Location, Location had just started and I thought, gosh, that's fantastic. That sounds like something I want to do. So when I moved to Australia, I actually knocked on the door of the president of the Buyer's Association of Australia at the time and said, can you please give me a job? That was in 2008 when the concept of buyer's agency was very much at its inception.
And, many sales agents would look at us very weary. I was very lucky to be offered an apprenticeship, which meant that really for a whole year all I did was look over the shoulder of a very experienced buyer's agent. You know, they taught me everything they knew. And after which I was supervised with my first couple of clients.
I worked for three different agencies over my time and then learned more and more about negotiations and building up my contacts, et cetera, et cetera, until I set up my own agency and now I have a team working with me. It was a slow process. And the reason for that, I think that a lot of people don't really understand is that even if you do all the courses, even if you do get yourself licence, it is not like, a salesperson who, sales, you can learn, you know if you are a salesperson, you can sell cars, you can sell houses, you can sell, you know, secondhand shoes to whoever wants to buy them.
Being a buyer's agent is so much more than just matching people with property. Again, it is about having connections, which, you know, you need to have really good sales agent relationships because you want them to come to you with their pre-market and off-market things. You want to know actually how sales agents work because many sales agents will have one standard way of doing business. You know, there's some agents that we know love doing deals and none of their listings ever make it through the four week campaign. You need to have that knowledge to give your client the advantage to go, okay, we love this property, this agent, we're going to have to move fast, and you have to relay that to your clients and get them ready.
It's also about, negotiations. You know, you don't learn how to negotiate just out of a book. You can learn the basics, but there's nothing like a lived and learned experience by actually going through the process and actually being a part of a negotiation process as you know. An experienced buyer's agent is a sidekick to listen and watch and see how it all transpires and learn how to play chess that way. That is the human side of things. You need to build up those contacts. You need to build up that experience. You know, going to auctions, the same thing, you know, auctions are a very high stress environment. And even now, after so many years of going to auctions and having been in so many different types of auctions, my heart rate still goes up, you know, and I'm very experienced.
I think you'd probably have to be dead inside if your heart rate doesn't go up even as a buyer’s agent, you know, but I need to be extremely focused on people's body language. Who is at the auction? Have I, you know, heard everything from the sales agent? What is the vendor's motivation, and then put it all together and come up with a strategy that will allow my client to be successful and hopefully with quite a bit of change left in their pocket. You've got to be able to dominate when you need to. You know, you've gotta be able to know when to hold back and also when a property gets passed in, you need to stand your ground and not be bullied by an agent or an auctioneer even, and manage your clients through that process as well.
Again I think that is something that needs to be lived and experienced. And even now, after all these years, I can safely say that I'm still picking things up, you know, from different situations and meeting different people. There's nothing as queer as folk, I always say. And you just keep learning.
So actually coming from a sales background experience, I know some people enter the industry that way. I would say that is not necessarily an advantage. It could actually be a disadvantage because critical thinking is another component that is really important when you are a buyer agent, you know, as an expert.
Do you know the difference between Art Deco and Victorian and Federation, and the pitfalls with all these different type era properties? Are you able to guide your clients through those things? Do you understand the difference between having foundations on sand or on clay? Do you know how to read a strata report? Do you know what to pick out and highlight to help the client understand, okay, well this is something you can probably live with and negotiate and you know, work with versus this is a deal breaker. You need to walk away from this and this is why.
But it also starts at the very end, just going back a little bit. Understanding property selection and not every property is worth buying. Just because it's for sale doesn't mean you should be buying it. Even if your clients fell in love with it. You know you need to be able to walk away from the wrong properties before your client does and help them understand that.
So you are the expert. They're paying you a lot of money to be that expert. Are you confident to call yourself an expert? So property selection is crucial. How do you know which properties are better than others? For many properties that we see come through on our emails, my team and I, we just have to look at a floor plan to say yes or no.
Because we've already got so many criteria in place that are written down, but also in our heads from so many years of looking at them. Going, no, that's not going to work. This is not good enough. And simple things like, you know, windows and bedrooms, for example. You can tell that from a floor plan you know whether the land rises, you know, undulation in the land things like then further in-depth research like, you know, floodplains, but overland floodplains. Do you know that? They exist. Do you know where to find them? Do you know how to interpret these council maps?
But also, how do you appraise a property? I do not use auto estimators from RP data or Price Finder. We do our own price research. You know, looking at medium price changes, looking at, summation, valuation, comparable sales properties.
But we also do a capital growth assessment for the clients. How do you determine which property is going to be an overperformer and which is going to be an underperformer? I truly believe that if a person is to invest in a buyer’s agent, they have to be able to justify that cost. So for us, we always say, you can buy shitty property all by yourself, you do not need to pay a buyer’s agent to do that for you.
So we only go for quality properties. We don't buy B or C grade properties unless there is an exceptional reason why we should. I can't think of any, but we always recommend quality properties only because most of our clients are owner occupiers and we want them to understand their home is probably going to be their biggest asset, you know, a massive investment, so we want make sure that it's going to outperform the rest of the market. And helping clients understand to look at their homes in that light is very important. And vice versa for our investors. We want them to have a property that the tenants will love living in, you know, because it is their home.
So, you know, you have to put on the owner occupier hat when you're an investor and vice versa. That is what you as a buyer's agent should bring to the table. You know, it's not just about, oh, I found you an off market, let's go look at it, you know, because you need to understand the quality of your property selection is what helps you make that difference.
And then whatever happens after that, your due diligence is what helps you with your clients make the best possible property decision and then, you know, get it across the line for them. One thing, for example, that we don't have in our agency agreements is a time limit. I don't want my clients to feel that they have to buy within a certain period of time. I want them to feel that we have bought them the best possible property for their budget. Having a ticking time bomb over their heads because they have to do it within three months, I don't think is fair. Would you be comfortable doing that? It's a good question, isn't it? So you've got to think about, how much of an expert are you now and how much of an expert do you need to be to be a buyer's agent that is actually going to add value, and you are in a position that you can actually ask money for your expertise. So get yourself a licence. But then I think the only true pathway to becoming a good buyer's agent is to put in the hard yards and work for someone else. I think it would be almost lunacy to try and set yourself up independently without ever having had any experience with anybody else. I think it would be grossly irresponsible. And you know, there are some courses that say, work part-time, get six figures. Well, let me tell you, that's absolute, can I swear on this podcast? Yes I can, because it's my podcast. It's bullshit. That should not be allowed. I think you need to really work with someone else.
And whether that is, you know, I have apprentices from time to time and they come with me on Saturdays and we talk through the inspections and they get to see what I do on a weekly basis. I had someone join me a number of years ago who said, oh, I want be a buyer’s agent and set up my own business. And she was very upfront about that. And I said, okay, come join me in the car and see what you think. And she quickly realised that there was a whole lot more to it than what she had envisioned. And credit to her, she stayed with me for about a year, coming in the car, going on inspections, having a notebook, taking notes you know, and she ended up working for other buyer's agencies and she's fantastic at what she does. Yet she's not working for herself yet because I think she needs to build up more experience. So if you want become the kind of buyer's agent that truly adds value, you need to get yourself an apprenticeship and start yourself at the bottom. Be prepared to not get paid a lot, but it'll be worth it in the end because I can tell you, even though I work six days a week, and that is the reality of working in real estate.
If you want do a good job, you know, you're constantly on. It is worth it. I love every minute of it, you know? My clients are amazing. The process that we go through, the journey that I take them on is different every time, and you bring so much value to their journey. You know, I've had people cry on my shoulders when they missed out, but also cry on my shoulders when we did win the property and it was the right one.
And I've never had a client turn around to me and say, you know what, we've bought it now, but I wish I'd bought the one previously. You know we do everything that we can to move forward on a property if we think it's the right one, but if it isn't the right one, there's a reason for it, and that's because the real true winner is actually just around the corner. You know, I've had people burst into tears because when we finally won at auction, they say, oh my gosh, we've been waiting to buy a house, so now we can start thinking about having a second child. You know, that's huge. So, yes it's a fantastic, rewarding career.
But I think that you need to really think about how much hard work it is before you get into it. You know, reach out to me if you think that you might want get some work experience. I'd be happy to talk to you and, you know, answer all the questions you may have, and reach out to accredited people and institutions like the REI.
If you're thinking about signing up for an online course, make sure it's not just a glorified sales course. That's just taking your money and just teaching you how to sell because that's not what a buyer's agent should be doing. In fact, it's quite the opposite.
I hope that's helped you. I hope I haven't scared you off because I think there's room for everyone in this industry. As long as you know they are properly qualified and have the right experience. I welcome everyone to join as a buyer agent. It is a fantastic job, like I said, and I'd love to hear your questions.
Get in touch hello@buyyourside.com.au. Hit me up via email or on Instagram or TikTok even. And until next time.