Property Hub - Investment Insights & Inspiration - Realty Talk: Dark Art of Auctions - Damien Cooley + Self Employed Borrowing Barriers

Episode Date: December 9, 2022

This week’s show covers all corners as we delve into auctions, commercial property, the self-employed, and Buyers Agents with a cast of property all stars! To kick things off, celebrity auctioneer Damien Cooley helps sellers to uncover the dark art of auctions. Is there still capital growth potential for commercial property? Scott O’Neill from Rethink Investing reveals the opportunities. If you are self-employed and struggle to borrow from the banks, Ryan Gair from Rate Money can open your eyes to better lending options. And to close out the show, leading Buyers Agent Veronica Morgan of Location, Location, Location fame answers the question – Are Buyers agents good for you?  RealtyTalk is part of the Property Hub podcast channel, your home for property investment insights, inspiration, and stories from Australia’s top property experts, investors, leaders, and analysts. Subscribe now to get every RealtyTalk episode delivered to you each week for free, and also get full access to Get Invested, the leading podcast for Australians who want to unlock their full ‘self, health, and wealth’ potential and get inspired by the stories of investors, founders, and entrepreneurs. Subscribe to RealtyTalk on the Property Hub channel: Apple Podcasts | Spotify | Google Podcasts | Email Property Hub is a collaboration between Bushy Martin from KnowHow Property, Kevin Turner from Realty, Andrew Montesi from Apiro Marketing and Apiro Media, and Australia’s largest independent podcast network DM Media. Business and partnership enquiries: [e-mail] omnystudio.com/listener for privacy information.

Welcome to Realty Talk, the show that brings together the country's most authoritative and respected property experts. Follow us on all the socials and subscribe for updates and exclusive offers. Realty Talk is powered by realty.com.au, connecting buyers, sellers and agents differently. Hi and welcome to this week's Realty Talk show, the flagship of the Property Hub, your home for property investment insights, inspiration and stories from Australia's top property experts, leaders and analysts, which is done in collaboration with Apiro Marketing and DM Media, Australia's largest independent podcast network as part of Nova FM.

I'm Bushy Martin from Know How Property Finance, and we've got a jam-packed show for you this week that covers the full spectrum of auctions, commercial property, self-employed borrowers and buyers agents. To kick things off, we delve into the anxiety-charged world of auctions that are often described as bizarre combinations of slave market, trading floor, street theatre and burlesque. So, award-winning celebrity auctioneer Damien Cooley joins us to demystify the dark art of auctions for sellers. Now, is there still capital growth potential in commercial property? Well, Scott O'Neill from Rethink Investing joins us to reveal the opportunities. And if you're self-employed and struggle to borrow from the banks,

Ryan Gare from Rate Money opens your eyes to much better lending opportunities. And to close out the show, leading buyers advocate Veronica Morgan of location, location, location fame, helps you to answer the questions, are buyers agents good for you? And how do you select a good one? Now, before we get into it, make sure you don't miss another episode of Realty Talk

by subscribing to Nova FM's Property Hub on your favourite podcast player, where you'll also get two powerful episodes of both Realty Talk as well as the Get Invested podcast delivered to you each and every week. And make sure you also sign up on the realty.com.au homepage, where you'll also get a free copy of my award-winning book, Get Invested, just for making the effort. We've got lots to unpack, so let's get on with the show. As we jump into this, it's really important to know that if you've watched the series The Block in recent times, where two similar properties achieve massively different sales

prices, you'll know that there's a lot more to auctions than just the quality of the property. And it's probably why auctions are often described as bizarre combinations of a slave market, a trading floor, street theater, and burlesque. So to help you better understand the dark art of auctions in a two-part special feature. We're joined by the most booked auctioneer on the block, Damien Cooley, who leads Australia's largest and most award-winning independent auctioneering company. So welcome to the show, Damien. Thanks for having me, Bushy. Thanks for, yeah, most booked auctioneer on the block. One of the producers said to me just before I went on this year, he said, Damien, how many episodes have you been on? I said, I think I've been on,

this will be my 13th, Julian. He goes, how many times have you won? I said, five times. He goes, not a bad clearance right I thought I thought I was a chance at winning this year clearly that wasn't meant to be well it's got nothing to do with you mate but that's that's for sure and that's what a lot of people don't get but mate I'm really looking forward to diving into a two-part special feature on this and this week I want to focus on auctions from the seller's perspective so to sort of kick things off around that subject mate when and why should sellers actually consider auctioning in a property? Yeah, a lot of people often ask me, is my property an auction property? I think that's probably the biggest misconception about the word auction and the process of auction

is that auction is a marketing strategy that we use to get the best price for the owner in the most respectable way and transparent way for the buyer to compete in and the best price for the property in the shortest period of time. We know that the longer a property sits on the market, the more chance it has at selling at a discounted price. So our goal is to try and reduce the amount of days a property sits on the market, and that's what auction is about. So forget about whether a property is suited to auction or not suited to auction, or whether an owner should be going

to auction or using private treaty or for sale or expressions of interest. Auction is, in my opinion, the only method of sale that any owner should consider. Yeah, I love it. There's been a big shift in recent times, but particularly in some of the other states around this best offer buy exercise, which is almost a quasi auction without the face-to-face present. Why would you auction a property over going down that sort of a campaign? Yeah, so a lot of people often say, well, you know, if you auction your property, you're going to have a buyer that is a standout buyer above the second best buyer.

Yes, of course, you'll have a standout buyer. but that's where the real estate agent needs to use what hopefully they have and that's the ability to negotiate and that's where they negotiate with that buyer to get a better price i literally had an auction an hour ago um which was in st mary's we got to the point we got to 2.2 million dollars we could have sold it at 2.2 million but we sold it for 2 million 225 000 because we had we were able to negotiate with the highest bidder and we were able to get them to increase their bid to $2,225,000. The auction process brought six buyers to the auction room floor and we auctioned the property. It got to the best price with competition just under it. And then we negotiated

with the buyer and got the owner a better result. Everyone was thrilled, including the buyer. Yeah, you're absolutely right. The ability face-to-face to draw on some of that emotion in the heat of the moment, it's certainly a standout from any other way of trying to sell property, mate. So yeah, some good points there. Let's shift now. I'd sort of love your thoughts on what you think are the biggest mistakes that you see sellers make when it comes to the auction process. I think sellers don't listen as much as they can to the agent. The agent they should be entrusting, who is it they are entrusting to sell the property is the market expert. They're the marketing expert, the advertising expert, I think a lot of vendors try to get too involved in the

campaign, too involved in the process. They get involved in how they want the property to be presented. They get involved in what the agent is allowed to be quoting in terms of pricing to the market. We have been seeing lately quite a few scenarios where, you know, the agent's been quoting one and a half million and they get to auction and the owner will sell it to 1.4, you know, and what I call that they've cooked it, you know, like they've cooked it because they've quoted too high um the market was never prepared to pay that and they've cooked it so my biggest advice to a vendor is if you're entrusting this agent to market your property trust them to market your property yeah yeah extremely well said there mate so uh under what circumstances or situations

would a vendor choose between an on-site an in-room an online or other form of auction what's your thoughts around that yeah good question um they've all got their pros and pros and cons to a certain degree. A lot of people have often said, if you do an on-site auction, the buyers are more emotive, they're at the property, they're more inclined to pay more. I disagree with that because I feel like the buyer has built up their emotional connection between the property throughout the course of the open for inspections. So the purpose of doing a property at an in-room auction, which I'm standing right now in our Double Bay auction room, the Homely Auction Centre in Double Bay, we do our auctions here every Tuesday night. I think I've got 15 or 16 going up tonight.

The buyers have already got their emotional connection with the property. They've already established in their own minds probably what they'd like to buy the property for and what they think it might go for. Now, regardless of whether that's in room or on site, they've still had those conversations in their own mind. So as an auctioneer, I love in rooms because I feel like I have more control over the environment that I'm selling in. I like the fact that it's not whether it's too hot or too cold or whether it's pouring with rain I like the fact that I can control the environment

but at the same time Bushy like I did an on-site auction in St Mary's the one I just explained to you today and I loved being on site and those buyers in St Mary's I can tell you right now they didn't want to come to Dublin Bay so both have their advantages

I don't think one's right or one's wrong to be frank I think it's personal preference and some cases it's up to the agent and what they love Yeah, and good commentary. There's a field of opportunities about having that conversation to look at what's going to get you the best result. Look, as always, mate, I really appreciate you sharing some time and your insights with us, and thanks for your generous time

on the show today. My pleasure. Thanks, Toshi. Thanks, mate. Well, it's clear that achieving auction sale success is both a science and an art form that revolves around how well prepared you are in all aspects of the exercise, and it's about switching from stress to the excitement of seeing a great opportunity in that event. So if you're looking

to auction your property to get the best achievable sale price, reach out to Damien and his team at cooley.com.au. Stay with us for more here on the Property Hub's Realty Talk. Property deductions can save you thousands of dollars each year. To make sure you maximise deductions, you need to work with the most experienced quantity surveyor in the country. BMT Tax Depreciation is the leading specialist in the industry. They've completed over 700,000 tax deduction schedules for residential investment and commercial properties Australia-wide. BMT guarantee to find double your fee in the first full financial year deductions.

Call BMT on 1300 728 726 today for an obligation free quote. Now following the artificial COVID catalyst that threw petrol on the fire for all classes of property, with a rising tide floating all property value ships, the question is now, is there still strong capital growth happening for commercial property? Well, to help answer this, we're joined by commercial property specialist and Realty Talk regular, Scott O'Neill, the founder of Rethink Investing, a leading commercial buyers agency that specialises in finding rare, positively geared commercial properties right across the country. So welcome back to the show, Scott. G'day, Bushy. Good to be back, mate.

Always good to see you, mate. And you've always got a lot of insights to share with us. So let's jump straight into the big question. Is there still strong capital growth happening for commercial property at the moment? Yeah, it's a very good question. And there's sort of two levers of growth in commercial property. So one is the old yield compression, which is what we've probably got a little bit used to, where people are paying more and more for the same value of rent.

So that's effectively when a 6% yield turns into a 5% yield because the cost of money is lower or the demand's higher. And that's what we've probably experienced since, I'd probably say since 2015. It's been yield compressing since then. So everyone who's owned a commercial property has had a massive re-kick with growth because of that yield compression scenario.

So now that the cost of lending has gone up, we're now entering a different phase. So we're seeing yield compression stop effectively. So people are not paying more and more for the same value of rent. but we are seeing the rental growth of all asset classes grow at a faster rate than they have in the last 40 years so it's a different cycle it's a different type of growth if anything it's a better long-term growth because you're here for the grow you know rental income of commercial property so

we want to see these rents grow because that's the base that the value will be determined on long term as well so different asset classes are growing at different rates so I'd say number one by a distance at the moment would be industrial. There's basically just an absolute shortage of industrial property around the country. The headline number is a 0.8% vacancy rate. That's CBRE's number. Australia-wide, and normally it's about 4% or 5%. It's incredible. Yeah, they're very tight numbers. So we're seeing how that relates on the ground is we're seeing double-digit rental growth. And you might wonder how it's growing more than 10%, even with most

rents are kind of capped at three or four percent per annum growth rates well it happens when the rent reviews come up so at the end of leases people are getting like 20 percent odd growth rates and i'm involved in at least two or three of these discussions a day with my previous clients where we kind of get comparable rentals up and yeah it's all about just trying to get the fair market rent because that will determine your value so that's um that's what we're seeing and And yeah, look, retail is growing, office space is improving. It's in a state of recovery. But yeah, the growth rates are not as quick as they are

versus the yield compression scenario because those numbers were ridiculous during the COVID years. So yeah, everything's kind of going around in different speeds. So yeah, there is growth on hand, but different type of growth. Yeah, good to hear. So are certain price points more resilient than others that you're finding around the traps? Yeah, good question, Bush.

Actually, I'm seeing an interesting one, which many people probably won't pick up, is the fund managers are struggling the most at the moment. So these are the guys purchasing your 20 mil plus assets. You may remember people spruiking, you know, 6% returns and all that, but that's like cash on cash. So if you invest your money into a fund and now your interest rate is higher than that, it doesn't look like an attractive option. So fund managers, and they're going off quite bullish valuations a lot of the time. So we're seeing there's going to be a bit of weakness in the plus 20 mil range. And there are more resiliences in the lower price points because your mums and dads, a lot of them are cash buyers or a lot of them are a high percentage, you know, like 40% cash down and the rest is a loan. The numbers still make a lot of sense.

And there's an oversupply of buyers, like to the factor of 100 times the amount in some, you know, especially about the sub-million dollar range. Like there's dead set 100 buyers for every decent property out there. so if half of those guys just want to wait till next year the other half is still buying this year so it's uh very competitive and we're seeing the resilience there um almost no change to peak periods so interesting yeah i think the increased awareness of commercial property given the yield pressure that residential was under has really flooded the interest in the commercial sector which is obviously flowing through now into buyers at those lower price points that uh is increasing demand so that's that's very interesting to see mate uh i'd love to go

around the grounds nationally and and get your feeling on how different states are performing relative to each other if you don't mind yeah so we'll start in new south wales so sydney we're actually becoming a lot more active in this market as a company mostly just because we can find those you know plus 5.5 net yields again which haven't been there since 2018 so yields have increased so So it's a yield decompression, for lack of a better word, is there. And that's now brought some buying opportunities back into the city I'm born in. So it's nice to be able to purchase a decent yielding asset here again, first time for a while. And that kind of flows towards, you know, your major regional centres in New South Wales as well.

The yields are a little bit better. um queensland where it got the most tight which is probably your you know your brisbane metro industrial the yields have gone from say five percent back towards about a six percent so again the buying activity is very heavy at six percent so we're seeing there's no there's no falls from that point they're going to i reckon remain at that number because there's just so much demand at a certain yield price point yeah and the depth of buyers is amazing and and that will continue it's just people are a little bit more careful than they once were so and this this sort of just to quickly backtrack those guys that are in that sub-million dollar range do not rush this is not

a market where you need to get desperate and feel like you're missing out because there's going to be good buyers next year and a lot of them are unfortunately quite impatient looking for that just to get into the market but there's going to be good times next year to get into the market and and um yeah back to sort of the the different areas like north queensland that's probably where you're going to get the best mix of yields and growth in queensland at the moment but you're still looking seven percent plus uh rental growth rates are fantastic as well just going to do your local research on whatever asset you purchase yeah um i'm a big fan of perth at the moment we're buying probably one out of three of our properties for clients in perth at the moment

and the surrounding areas it's it's like going back to brisbane two years in time you know you feel like you're getting a little bit more bang for bucks um the savvy investors will realize that the square meter rates for rents are lower versus brisbane so there's actually a little bit more upside in the rent for a rainy day out there which is important for growth absolutely south australia is kind of still tight because you've got this stamp duty concession where you don't pay it so there's almost a little bit of irrational zoom rooms out there where people are just ignoring the numbers a little bit more than they should and going for that sharper yield but it's a steady market it represents value for for many so uh slow and steady does often win

the race in commercial and that's uh that's a good market for that yep that's up south australia that's always been the slow and steady yeah it crawled to the finish line yeah and um melbourne melbourne's uh still the lowest yields in the city it's there's a little bit less business confidence in that market i think they struggled through covert particularly more than any other area so that's there's still going to be a hangover effect from that market a lot more vacancy for retail down there so that's a tread carefully type market especially when the yields aren't really justified versus other parts of the country but you know if you're fixated on that market you'll you'll get a better deal than you once did um act another market where we're

very busy and there is just so much stability down there like you've got the government uh jobs like even office investments down there are just incredible down there because that market actually grew in strength during covert it's almost i think the only office market in the world that did that so it's uh just they played by their own rules down there and that's sometimes good for commercial property well about the only thing that grew during COVID from that perspective was government and that baby epicenter I can imagine there would be a fair bit of increase in the employment side which would flow directly onto the the need for office space so it's really interesting in sharing that look around the various states it's very similar to

relatively how the residential markets are performing as a consequence so it's I've got interested with the parallels there, mate. But as always, really love your insights, mate. And I really want to thank you for joining us on the show to discuss this important topic, Scott. And thanks for your time on the show today. Thanks again, Bushy. Thanks for your time as well, mate. Thanks, Scott. Well, it's clear that regardless of market conditions, there's still plenty of opportunity in the commercial property arena if you know how and where to look. So reach out to a specialist commercial buyers agent like Scott and the Rethink Investing team at rethinkinvesting.com.au to investigate your options. You're watching

Australia's longest running and most popular property show here on the Property Hub's Realty Talk. Successful property investment is a game of finance. Do you have the right team and the right game plan? Realty Talk is brought to you by Know How Property. More than mortgage brokers, Bushy Martin and his team of investment architects set you up with a sustainable strategy structured to lower your costs, tax, risk and stress while increasing your capacity for growth. KnowHow has helped over 1,900 homeowners and investors secure more than $800 million in property wealth. So get set to live more, work less and live your legacy. Want to know how to invest in your freedom? Visit knowhowproperty.com.au.

Are you one of Australia's 2.1 million or so self-employeds who now account for a growing 18% or so of the workforce who still struggle to borrow money for any purpose, whether it be for a home loan, a business loan, or in fact, any form of loan? Well, it's probably cold comfort to hear that you're not alone. And while some of the banks are starting to soften

in relation to significant hurdles that you need to jump over in order to get a loan approved, it's still much more onerous than if you're an employee. And I actually find this pretty amusing in this current age, where your servicing income is actually less at risk when you're self-employed than if you have a job that may be here today, but gone tomorrow. And if you're self-employed and have a good accountant that minimises your gross taxable income in order to reduce how much tax you pay, this generally then works against you when you present your financials and your tax returns to a lender or a bank, when you're trying to borrow money. So what's the answer? Well, as always, it's a matter of

horses for courses and getting a specialist to assist you with your lending needs. So to shed some light on better self-employed borrowing opportunities, we're joined by Ryan Gare, the CEO and co-founder of Rate Money, an award-winning home loan provider specialising in servicing self-employed Australians. So welcome to Realty Talk, Ryan. Thanks for having me, Bushy. mate uh really keen to jump into this subject because the self-employed's uh pretty much an ignored area generally when it comes to the whole lending uh landscape so to sort of kick things off and set the same made what what are some of the main challenges that self-employed people face

when they're trying to secure a home loan yeah well obviously this even goes for myself i've been self-employed now for about 15 years and when i was trying to get my first first home or second property I should say is the key challenges is the length of time how long you've been self-employed for inconsistent income obviously a lot of self-employed businesses have up and down years especially coming out of COVID and those sorts of things the other thing too is showing genuine savings obviously with self-employed businesses they sometimes need to use their funds and then lump sums come back in and those sorts of things. And then the last one is the CRAA or your VEDA report.

That's especially these days one of the key factors as well, moving to positive reporting. You know, so paying your bills on time and those sorts of things is really prevalent to ensure that you can get good finance. Yeah, good points. And that last one's an area that a lot of people aren't really paying enough attention to, given that the open banking environment now allows a lot of lenders to access your records without you even knowing it to some degree. So sort of moving on from there then,

what can self-employeds do to improve their chances of getting approved for a home loan? Yeah, first off is being self-employed is making sure that you are registered for GST. That's a really important factor of obviously then if you're not registered for GST, the max you can declare is under 75 000 obviously 75 000 these days may not get you to the property that you're looking for uh i go back to is having a clear cra again that gives you the best chance to get the best rate and the best product available for you as well in your current situation the other thing too is speaking to somebody as well who has multiple options the The one factor that we see is someone walks into a bank, that single bank, and they say no and they say, well, I can't get finance now.

So make sure you do speak to somebody who has multiple options and multiple products and multiple offerings. The other thing, too, is speaking to somebody who actually understands self-employment. Now, you might have trust, you might have multiple companies, multiple entities, different income strings and those sorts of things and different flows. so it's really important to speak to somebody who can actually dissect that income and work out what income can and can't be used and the other thing which is more of a tip for the for the for the borrowers and the customers is be flexible in the options that are presented to you yeah that's a very good summary there mate and as you would know more intimately than than I do. There's a massive variation across the banks in terms of what they'll let you do

based on exactly the same circumstances and a massive difference in the borrowing capacity that's on offer from many of the lenders. So as you say, banks ain't banks. They're not all the same. There's a massive variation. And just because you've spoken to one, there's a good 39 or more others out there and thousands of loan solutions. It's just a matter of getting someone like yourself to actually find the right solution to suit that particular circumstance so sort of segue into that then and just to reinforce the point why is it important for self-employed borrowers to go to a home loan provider who really understands their financial position their income stream their taxes as well as their challenges mate yeah so the first thing is if you

don't structure loan correctly when you're submitting it to a lender and we're also we have our own home loan products as well and we're a home loan provider ourselves and then of course we have have other lenders available too is you generally get one shot if you don't structure the loan correctly or your broker or your lender or your business banker whatever it might be hasn't structured the loan correctly the first time you're already on the back foot the other things as well is making sure that somebody can actually, as I say, I go back to is dissect your income too. Now, there's things like depreciation that can be added back. There's franked credit and unfranked credits that you might have too and being able to dissect where that goes in

the calculator. You might receive, pardon me, some form of benefit as well and being able to is that as untaxed income and those sorts of things so it's really important to speak to somebody who knows how to get the most out of the serviceability for you as well because again that might that might actually get you into the property that you're looking for compared to the property that you don't want to purchase as well and the last thing is as well is making sure that someone that can actually read company financials yeah it's not just about what you're personally making it's also which I was speaking about a little bit more in detail is what company income you can use to really maximise that borrowing capacity for you. Absolutely and someone

like yourself is also very good at packaging that in a way that the credit assessors who are looking at this can understand and appreciate because there's no doubt certainly seen occasions where the people on the other side who are assessing the exercise don't have the understanding either. So unless you package it and present it in the right fashion, you can make things a lot harder than they need to be. That's exactly right. No, that's extremely well said, mate. And look, I really want to thank you for opening our self-employed eyes to these insights and opportunities, Ryan. And thanks for your time on the show today. Appreciate your time. Thanks, Bushy.

Thanks, Ryan. Well, as you've heard, an issue is never a problem, but more of a challenge to be overcome if you've got the right people helping you. So if you're self-employed and want to bypass or jump the usual bank hurdles to secure finance, reach out to a specialist home loan provider like Ryan and his team at Rate Money. And you can find them at ratemoney.com.au or through one of their savvy mortgage broking referral partners. Keep watching your trusted voice for all things property on Nova FM's Property Hub flagship show here on Realty Talk. Property depreciation is the natural wear and tear of a building and its assets. Property investors can claim depreciation as a tax deduction each financial year.

Depreciation is a non-cash deduction. This means you don't need to spend any money in order to claim it. On average, BMT tax depreciation find residential investors almost $9,000 in first full financial year deductions. Call BMT on 1300 728 726 today for an obligation free quote. Did you know that the average DIY property buyer spends about 90 hours spread over seven months researching over 300 properties and often misses out at least five times before they finally secure their property. So it's no surprise that the

majority of buyers find this whole process very stressful, overwhelming and time-consuming and still 45% of them reportedly suffer buyer remorse from compromising on the property that they actually really wanted. So what's the answer to improve this experience and better level your playing field? Well, enter the rise of buyers agents to your rescue, but are they really any good for you? Well, to answer this, we're joined by leading industry stalwart and celebrity TV presenter, Veronica Morgan, who's also a residential property expert, a buyers agent, a podcast host and author. So welcome back to the show, Veronica. Thanks, Wushy. Good to see you. I've been on the show for a long time, actually.

Been too long and we'll change that. We'll get you back on far more regularly. But look, it's an interesting exercise what's happening in buyer's agent world. And look, let's face it, 10 years ago, we barely knew what a buyer's agent was. So why is it that we're now hearing a lot more about them? Yeah, it's interesting. I mean, so I've been in real estate now for about 22 years and I've been on the buying side of the fence for 15. And certainly 10 years ago, we were still educating people in sydney anyway as to what a buyer's agent is but it's like now everyone here knows i know talking to buyers agents around the country that that conversation is a lot more in its early stages but you're finding even in regional areas now there's a demand for buyers

agents a part of it i put down to 2021 being such a hot year that buyers were thinking how am i going to get an edge so they're thinking i know i'll use a buyer's agent but i also think that a lot of it has to do with television um i'm a little bit guilty myself there obviously from our show but it's now been sort of eight years since location location location australia on foxtel last last aired a fresh uh series anyway yeah um but you know we've got the block we've got lux listings and dream listing in byron bay i'm a little concerned that it's great that we're raising the profile of buyers agency and the awareness that there's people out there to help buyers but I'm a little bit worried about the I guess the caliber what they're putting forward

is the job that we do you know because what makes good television isn't necessarily the same as really what makes a good buyers agent yeah it's a really good call and now you know you'd normally think that the increased awareness around buyers ages and helping to level the playing field Veronica would surely be a good thing for property buyers what's your thoughts on that Well, it should. But then there's a bit of a problem with the calibre that's out there. There's a very wide spread of, I guess, skills and experience. There's a lot of very clever and very persuasive marketing that's going on. um but and it's quite difficult for consumers to really i guess sort through the wheat from the chaff particularly in an emerging industry it's it's hard for people with the runs on the board to really stand out separate from from i guess new entrants that are very good at marketing

themselves so when you say it's leveling the playing field it can and certainly there's amazing um outcomes for consumers that are able to choose an experienced local specialist uh when they're choosing a buyer's agent but unfortunately there's a lot of noise out there and a lot of confusion as to what makes a good buyer's agent. Yeah, good call. Well, I'd love you to put some perspective around the profession then. So, and tell us a bit about how does someone actually become a buyer's agent? Often, and my pathway into becoming a buyer's agent was through the sales agency. So, I spent six years as a sales agent before becoming a buyer's agent. And so, obviously, you learn a lot of what's really going on in the industry. And you also learn what sells

well, you know, over time. That's a very important factor there. The problem is that the pathway to become a buyer's agent is A, too easy, too short. And B, it's not specific to teaching buyer's agents the skills of buyer's agency, right? So when I went from being a sales agent to being a buyer's agent, I had to unlearn a lot of things and then learn stuff and then become very critical thinker. And there's a lot of different skills and mindset that really need to bring to the table as a buyer's agent that aren't the same as being a sales agent. However, the licensing pathway that everybody takes in this country or needs to take in this country to become a buyer's agent means you get a real estate license. And these all vary state to state. But the one thing that is in

common is that these license courses are designed to basically help you learn to sell property or to be a property manager. And so you can come out of a course knowing how to market a property or knowing how to prepare to go to tribunal, for instance, but not knowing how to do fundamental basic due diligence in order to protect your client from buying a lemon. And the thing is that in three, okay, Victoria, New South Wales and ACT, you do have to have a minimum period of experience before you can get the class one license to become a licensee and run your own business. Everywhere else, you can go and get one of these licenses, not know the simplest of most basic skills that you need in order to be a buyer's agent, and yet you can set up business,

hang your shingle on the door, start selling your services, and off you go. Scary stuff. Very scary stuff. Well, given that background, how can property buyers tell a difference then between a buyer's agent who's actually likely to save the money versus one who may end up actually costing them oh my god and look the costing is just appalling what i can't get over is that a lot of these buyers agents are learning with the client's money and that's actually alarming that is not a good thing um so the very first thing that i recommend that anybody look at when they're talking about um you know engaging a buyers agent is the person a local specialist now there's a couple of different types of buyers agents out there there's some that tend

to generalize and think that they can buy anywhere and it's not that hard. The local specialist will know so much more about the pitfalls and what to avoid than a generalist. And further to that, their experience. Really and truly, I surveyed buyers agents recently, and on average, it takes five years before they really feel like they're mastering it. And you want someone who's mastering it. You don't want a beginner who's, once again, learning with your money. And so ideally, even more than five years, you want someone who understands a complete property cycle, you know, the ups and the downs. Also, they've got to care enough to protect their clients through due diligence. So I'd be saying, ask them what the

due diligence process is. Ask them, you know, to demonstrate their methodology. I give you examples of it. And looking at all sorts of things, you want to find whether they're checking flood zones, You want to local development activities, see if you could lose privacy or review or potential and also price research. If they give you, they press a button and give you an AVM out of RP Data or CoreLogic, don't sign up with them. You know?

Yep, yep. And I think, yeah, you and I could, I could do that and I'm not a buyer's agent. So not a lot of intricacy in pressing that button. So I'm absolutely clear there's a lot more to it. Anything else you want to add to that, Veronica? I would add voluntary memberships. Now, this is not the sole way to test whether you're getting a good buyer's agent or not, but it's a good indication as to whether somebody's taking

their career seriously enough to really want to lift the bar. And so if they're a member of an organization such as REBA, which is the Real Estate Buyer's Agents Association, or if they're a member of something like PIPA, the Property Investment Professionals Association, that's an indication that they're taking things a little bit more serious so it's not the only thing but it's sort of at the end of checking out a whole bunch of other things that I've just mentioned earlier I look to that as well yeah it's uh we've only just scratched the surface there and we'll definitely get you back to dive into that in a little bit more detail but uh I really want to thank you for improving our understanding of this growth profession Veronica and thanks again for

your time on the show today pleasure Bushy thank you thank you well the conclusions are pretty clear here, if you want to reduce the cost, time and stress of buying your next property, reach out to a good proven buyers agent like Veronica and her team. And if you want to find out more, check out veronicamorgan.com.au. Stay with us on Nova FM's Property Hub flagship here on Realty Talk. Now, before I leave you, here's a final thought from me. As you know, I'm a big supporter of high-quality buyers agents to ensure you purchase high-performing properties right around the country. And there's no doubt that their popularity has grown exponentially in recent times. But unfortunately, many self-professed buyers agents are extremely

inexperienced when it comes to the critical aspects of searching, selecting, and negotiating on good investment-grade property that also has owner-occupier appeal. So it's really important to ensure that you engage an experienced buyer's agent who has demonstrated expertise in both quantifiable research and data along with intimate local knowledge. And don't just take their word for it because many buyer's agents can look good on the surface

and can bury you in BS and slick marketing, but they need to walk their talk. So make sure you benchmark them by talking directly to a range of their past clients with examples of how their properties have performed over the last five years or more. and ignore the last two years' performance because anyone with a property pulse

would have enjoyed value growth in recent times due to the artificial COVID catalyst. And if you need help with this, email me directly at bushey at knowhowproperty.com.au and I'll email you a copy of our detailed questionnaire that gives you all of the questions you need to ask buyers' agents to help you sift through the good

and separate them from the bad and the downright ugly. That's more food for thought. And that also brings us to the close of this week's show. Another big thanks to our special guests, Damian Cooley, Scott O'Neill, Ryan Gere and Veronica Morgan. And make sure you don't miss another episode of your trusted voice for all things property by subscribing to Property Hub on your favourite podcast player now, where you'll also enjoy the Get Invested podcast delivered to you each and every week. and make sure you also sign up on the realty.com.au homepage to get a free copy of my award-winning book, Get Invested. And while you're there,

check out one of Australia's most extensive range of properties for sale from over 7,000 agents nationally where you'll even get to find properties that just aren't listed or can be found anywhere else. Thanks again to realty.com.au, BMT Tax Depreciation, Apiro Marketing and DM Media for their ongoing support. I'm Bushy Martin from KnowHow Property Finance. Remember to invest in your knowledge before you invest in property.

And I look forward to seeing you again next week. Miss something in this week's show or want to catch up on past shows? Do it anytime at realty.com.au where we connect buyers, sellers and agents differently.