How to choose a great buyer’s agent?  

I have written a lot about the importance of investing in the highest-quality, investment-grade property that your budget allows. The quality of the asset you choose will likely have the greatest impact on its future capital growth rate over the long term. Simply put, you can’t expect above-average capital growth from an average-quality property. 

To ensure you invest in the best assets within your budget, the most effective strategy is to work with an excellent buyer’s agent. In this blog, I outline the key qualities I believe a great buyer’s agent must possess. 

Good advice pays for itself  

Making a mistake when investing in property can be incredibly costly. It might take you more than five years to realise you have bought the wrong asset, and by then, you are faced with the time-consuming and expensive process of selling. On top of that, you will have to cover all the upfront costs again, like stamp duty, to replace the investment. 

Even if you don’t make a full-blown mistake, investing in a slightly substandard property can still cost you dearly. For example, a $1 million property growing at 6.5% per annum will be worth $3.15 million in 30 years (in today’s dollars). But if you had bought a higher-quality asset that grows at 7.5% per annum, it would be worth $4.15 million – an extra $1 million in equity in today’s dollars. Both assets have the same acquisition costs. Same loan interest. But one delivers a third more wealth. 

This is why investing money in obtaining expert advice from a great buyer’s agent can pay for itself many times over in the long run. 

Invest time to find the answers  

Below, I have outlined seven key factors I believe are critical to identifying a great buyer’s agent.  

It’s completely natural to ask buyer’s agents about these points to get a sense of how they measure up. However, it’s important not to rely solely on their own claims. Always take the extra step to verify this information by doing your own research online, speaking with other professionals in related industries, and getting referrals from past clients – ideally, someone you know, trust and respect who has been successful with building wealth as a result of the advice. 

10 years of experience or a collaborative firm  

Experience is an essential ingredient when it comes to professional advice.  

With the rise of AI and the internet, there’s no shortage of knowledge available, especially about property. But knowledge alone can be risky without the backing of real-world experience. 

In my view, the primary reason to hire a buyer’s agent is to reduce the risk of making costly mistakes i.e., not buying the best property within your budget. The key benefit of working with a buyer’s agent is that they have far more experience with inspecting and purchasing properties in the area you are interested in. They have observed how properties perform in different market conditions, and that long-term perspective helps them spot opportunities that will deliver solid returns over decades, not just during a short-term market boom. 

The more experience an individual buyer’s agent has, the more willing you should be to pay for their advice, and the reverse holds true too. Personally, I think 10 years of experience should be the minimum standard. 

If a buyer’s agent doesn’t have that level of experience, they should be part of a team that collaborates to assess properties. But be cautious here. Many firms operate more like sales businesses than advisory ones, so individual agents might be less inclined to work together, especially if they are competing for commission income. In my experience, smaller teams tend to collaborate well together.  

Questions to ask: How much experience does the buyer’s agent have, and do they work in a team that encourages collaboration? Are multiple team members involved in inspecting target properties and deciding which ones to recommend? 

Local area expert  

I firmly believe that when selecting a buyer’s agent, you should choose someone who is a true local expert – someone who has been active in the property market in that area for over 10 years. This kind of experience ensures they have a deep understanding of the area’s nuances, including trends, local amenities and even hidden risks. 

Some buyer’s agents offer borderless advice, meaning they purchase property outside their home state or location. While strategies like hot-spotting or data-driven decisions might seem appealing, without in-depth local knowledge, agents can easily overlook significant risks. These could include environmental hazards or upcoming infrastructure projects that might impact long-term property values. In fact, sometimes there’s no clear, data-driven reason why certain streets, or even specific sides of the street, underperform – it’s simply a characteristic of that area, something that only years of local experience can reveal. 

If you agree that the most valuable thing you’re paying for when hiring a buyer’s agent is their experience, then it only makes sense that you should want them to have extensive, long-term experience in the specific location where you’re investing. The absence of this experience is risky.  

Questions to ask: What locations do you buy property in and how long have you operated in these markets?  

Thorough due diligence: You don’t know what you don’t know  

Once a potential property has been identified, it’s crucial for the buyer’s agent to have a thorough due diligence process in place. This should go well beyond just looking at the listed price, estimated value, and projected income and expenses. 

A good agent digs into all aspects of the property, including potential risks like pollution, possible zoning changes, the quality of renovations, the layout and floor plan, and the type of tenants the property is likely to attract. They should also consider any undesirable developments, such as new infrastructure projects or issues with local amenities that could affect the property’s appeal. 

Experience is key here – an agent needs to know exactly what to check to identify any hidden risks. 

The buyer’s agent must also be transparent about these risks, even if it means missing out on purchasing a property. A true professional will be willing to reverse a recommendation if new information arises during due diligence. If an agent isn’t willing to admit, “This deal may not be right for you anymore,” after investing time in evaluating it, that’s a huge red flag. 

Key questions to ask: What does your due diligence process include? How do you approach pricing advice? Can you give me an example of when you walked away from a deal due to new findings during your due diligence process? 

A process to manage potential conflicts of interest  

It’s essential for a buyer’s agent to have a clear process for managing potential conflicts of interest, especially when handling multiple clients with similar briefs. This is particularly important in smaller, competitive markets where two clients may be bidding on the same property or with the same budget. This creates a conflict of interest as the agent or firm could be swayed by their own gain rather than working in the client’s best interest. 

Some agencies choose not to take on new clients if their property brief is too similar to an existing one. Others operate with a strict first-come, first-served policy to avoid these conflicts. Either way, it’s crucial to ensure the agent’s approach safeguards your interests.  

Never compromise just to get a deal done  

A buyer’s agent only gets paid when they successfully purchase a property for their client, which can create a potential conflict of interest. This financial incentive might make them more inclined to push through a deal, even if it means compromising on their advice. 

You want a buyer’s agent who is selective about the properties they recommend and who can help you understand the true market value of those options. Their focus should be on identifying assets with strong long-term growth potential. 

A red flag for a less-than-ideal agent is one who constantly boasts about securing off-market properties at “bargain” prices. Property professionals often point out that many off-market deals are overpriced or of poor quality. A savvy agent won’t jump at these opportunities just for the sake of exclusivity. Instead, they should be transparent about pricing and clearly explain why a property is worth the asking price, even if it’s a bit above market value. 

Question to ask: What’s your typical timeframe for finding and securing a property for your clients? 

Great communication  

Clear communication is essential when working with a buyer’s agent. A strong agent goes beyond just providing basic information – they offer valuable insights and should be able to highlight potential advantages and risks you might not have thought of. This commentary should reflect their deep experience and knowledge, both of the property market in general and the local area in particular.  

Transparency is critical, especially when it comes to pricing, due diligence, and overall strategy. You should expect to hear the good, the bad and the ugly. 

If a buyer’s agent is vague or only provides minimal information, like a list of comparable sales or a basic report, it’s likely they’re not offering real advice. A good agent will make sure you’re fully informed, showing you both the potential benefits and risks of any property you are considering. 

Remember, property is both an art and a science. So, you don’t want all their advice and information to be purely data-driven. It’s just as important that they provide qualitative insights, showing their understanding of the local area and their experience in the market. 

Question to ask: Ask them about recent properties they have purchased and the reasons they concluded why it was a good long-term investment and fit the client’s brief.  

A great reputation  

Ask the buyers’ agents to share examples of times they have walked away from a property or declined to represent a potential client. This demonstrates strong critical thinking and integrity. A great agent is not afraid to advise clients to walk away from a property if it’s not in their best interest, even after investing time and effort into the search. 

The decision to walk away reflects a commitment to your long-term success, not just making a sale at any cost. It shows the agent’s ability to adjust their recommendation based on new information. If an agent cannot promptly provide any examples of walking away from a deal, they might be more focused on closing sales than ensuring quality investments. 

A great buyer’s agent is an important member of your team 

In summary, a great buyer’s agent brings together extensive experience, local knowledge, a thorough due diligence process, integrity, and transparency to help clients make smart, long-term investment decisions. These agents won’t just secure any property – they will guide you towards investment-grade assets with strong potential for long-term capital growth. 

Getting a referral is often the best way to find any reputable and trustworthy professional who will add real value to your investment journey. 

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I need to acknowledge Veronica Morgan for her indirect assistance with this blog. In 2024, she generously shared her time with us, leading a training session that helped our whole team better understand how to guide our clients in choosing the right buyers’ agent. Thank you, Veronica, for your support.