How much money can you save me?

I get this question all the time. And I understand why. Buyer’s Advocate fees are a serious dent in some buyer’s pool of savings, and for those who need to see a tangible and guaranteed benefit, it can be a tough fee for an advocate to explain.

But the thing is; it’s not measurable.

For example, unlike a parcel of shares, a property sale can’t be replicated. I can’t stand in the sun a second time and simulate the same auction for the same property. The auction has passed, (or the negotiation has concluded), and those same sets of conditions, buyers, time, and emotions have been and gone. I can’t easily measure my own performance against a controlled trial or set of experiments. I can’t even find one additional data point to support the magnitude of savings I could have enabled my buyer.

Every property is unique.

What one buyer may pay for it at 1pm is potentially different to what a newly-introduced buyer could pay for it at 2pm. I’ve experienced plenty of auctions that have exhibited a finite list of likely buyers, only to find that a last-minute arrival inspects the property 30 mins prior to auction and decides to bid. Property is just so unpredictable at times.

Our job is to understand value, facilitate due diligence, weigh up market sentiment, consider competition and navigate risk.

Buyers often misunderstand the expertise that a seasoned property professional can bring to the table. We know the questions to ask, the moments to pounce, the bluffs to exercise and we can read the play. Clients are often surprised that we can establish the vendor’s reserve or the likely buyer numbers on the day of auction, but it is the questions that we ask which give us this intel, for example:

“How many requests for contracts have you had?”,

“Do you have any other advocates on the property?”,

“How many bidders do you expect to bid on the day?”, (interesting question, but surprisingly most experienced agents know and are happy to answer this),

“Which comparable sale do you think is closest to this property?”, and

“Where are you confident you will have the reserve set at on the day?” (as opposed to asking what the vendor wants, or what the auction quote range is).

Not only do we know the questions to ask and the pace to move at, but we also have long-standing professional relationships with the agents. We know how long their days are, how hard they work for their vendors, what techniques they’ve applied in the past, how they auction, etc. We just know them. And we have a mutual industry respect. Agents know how to chat agent-to-agent, they know our buyers are finance-approved and serious, and they know we will approach things sensibly and without risk to their vendor. Buyer’s Advocates aren’t the agents’ foe. We actually (generally) get along.

So when a buyer asks if I can negotiate a discount at a stronger magnitude than my fee, I tell them, “not necessarily. I’d rather pay market value for a good-quality property than a heavy discount on a compromised one.” But obviously a professional buyer who bids at more than 150 auctions per year will have a stronger grasp of the task than someone who does it once or twice in their lifetime.

This leads me to the next point which is measurable, but only over the longer-term.

It’s the properties that we say no to that make the most serious difference to a buyer. There is little point haggling over our negotiating ability and only placing a value on our bidding style, when the most serious element at stake is the performance of the property itself.

Just yesterday I was inspecting two properties with a lovely client who had shortlisted each and wanted me to weigh in with my opinion. Both were in blocks of four single-level townhouses, yet one was more dated, bigger, more private, managed well, surrounded by quality houses in the street and closer to the local shops and station. The other was modern, smaller, darker, and surrounded not only by many blocks of flats and units, but in close proximity with a block of units entirely held by the Department of Human Services. The whole block was commission housing and as judgemental as this reads, the grass was long, the fronts were untidy and the junk in the front looked like hard rubbish collection was scheduled. But it wasn’t. All emotions aside, this block looked particularly shabby. I identified it as soon as I pulled into the street and my client hadn’t even realised.

When he asked how I knew, I explained, “This is what you pay me for.”

Could the surrounds, (multiple unit developments and the DHS block) hold back his property’s growth trajectory? Yes, indeed they could. Street appeal ranks highly in the eyes of a BA.

Today’s auction was another example of judgement-calls and tactics. Our clients could have purchased prior but the limited interest in the property signalled that we should forge ahead to auction. They were very nervous about missing out on the property but equally knew that the price tag prior to auction would be the vendor’s desired price. A price tag after a property passes in is invariably going to reflect the outcome of the auction.

Not only did we make the decision to ignore the opportunity to purchase prior to auction, but we also prepared for the auction to ensure we were in a position of strength. We’d established a formulated approach with budget limits to eradicate the chances of last-minute, stressful decision-making, and my clients made use of the article I share with auction clients. We had the findings of the builder’s report on hand, and most-importantly, I had a powerful cheque in my wallet. My client had written me a personal cheque for $200,000. It’s hard for a vendor to stare down an offer when it’s genuine-ness is backed up with a serious commitment.

We can’t prove to every prospect at the time of sign-up how to measure our worth, but come auction day, our calmness, our strategy, our tactics and our read of the situation are evident.

As we say to clients, “This is what we do. Every day.” And we love our job.