More and more interstate investors are rushing to the Brisbane property market, but there are a few traps you need to be wary of.
Blogger: Kristy Smith, founder, Agility Property
Over the past few months we have noticed an increase in the number of interstate buyer’s agents flying to Brisbane from the southern states to view and inspect a property on behalf of one of their clients. They're doing this fast (in under five minutes) and potentially over paying on the purchase price!
A recent example we saw was a Melbourne-based buyer’s agent who had flown up for the day to view and inspect two properties. The property which I was also inspecting for a client was going to auction. My client decided not to proceed at auction but I went along on auction day to see the result.
The Melbourne buyer’s agent had flown in for the auction and was bidding on the day. They were successful, but did they pay too much? From my knowledge of the property, the area and recent activity I think ‘yes’.
Yes, I think the Melbourne buyer most probably paid $50,000 – $60,000 more than the property was valued at. The property also has limited capacity to manufacture capital growth as it had been raised and beautifully renovated, but the property does reside in a sought-after area for lifestyle, schools and the Brisbane CBD, so market-driven capital growth should hopefully see the buyer match their purchase price within five years. Well I hope they do. Rental yield? Well that may take a few more years!
If you think you are paying too much for property research or purchase in Brisbane, here are our suggestions to ensure you don’t pay too much for property:
1. How agile is your buyer’s agent?
A local buyer’s agent should be able to discuss and potentially view a new property within 24 hours and most on the same day, whereas an interstate agent will need to re-arrange their diary for a day to a day and half which takes time and is a lag on local competition. To turn it around quickly, they'll have to book flights at the last minute which are a higher cost.
A local agent can pretty safely negate all these additional time and financial costs, saving clients' money and time. A local service will usually cost less as the travel and administration costs are drastically reduced, and they should be able to provide you with a result in a shorter period of time as locals can attend to listings more quickly. Local buyer's agents often have strong rapport with local selling agents which wull enable them to tap into off-the-market opportunities and VIP openings.
2. How current is your buyer’s agent’s local knowledge?
A local buyer’s agent will be able to advise you on local infrastructure plans, residential development plans and community communication. They will know what is happening in the area, by street, by house and in Brisbane by flood risk, which is an important consideration.
3. Does your buyer’s agent have rapport with local agents and other related professional services?
A local buyer’s agent will be in contact with local selling agents and other professional services such as stylists and tradespeople, weekly and sometimes daily. We see them in during routine business activities, appointed times and just by living or enjoying the local community and its activities. A local buyer’s agent is part of the community, we know the community and we are involved in the community and through that we build familiarity, communication and rapport and information.
4. The Brisbane property market is not as ferocious as the southern states can be
You usually have time to consider the property and your position without rushing or throwing money into a decision you are unsure of but feel market pressure to do something. Buyer's agents will help slow the pace down and provide you with the information and time to decide what is right for you. So why pay more than you need to?
5. Comparative market analysis is only as good as the data that is used
Local market knowledge can provide valuable insights into market analysis in real-time, rather than the “settlement period” lag which occurs with subscription data providers. A local buyer’s agent will know which properties are moving, have sold, were just contracted and can liase with the selling agent to ensure their clients have the most up-to-date data available. This market insight alone, could save you thousands when negotiating.
In my opinion it pays to have a local, independent and unbiased buyer’s agent help you research and negotiate a great property at a great price!