The role of a buyer’s agent in real estate transactions

Transcript

Peter Fletcher

[00:00:00] Peter Fletcher: Welcome to the WA Property Q& A, the podcast where I explore the ins and outs of buying property in Western Australia. I’m your host, Peter Fletcher, and each week I interview local property experts to help you to develop a deep understanding of the nuances of buying property in WA. From markup trends to legal considerations, no topic is off limits.

But before we dive in, a friendly reminder, while we provide valuable information, it’s important to note that nothing discussed in this podcast should be construed as personal investment advice. Always remember to seek the appropriate professional advice for your specific circumstances. Now, let’s get started and unlock the secrets to successful property buying in WA.

So welcome to another episode of the WA Property Q& A podcast. And I’m excited to have with me today all the way from Sydney. Veronica Morgan. Veronica Morgan is someone I look up to and have taken a lot of cues from over, over my time as a buyers agent. And I’m excited to be, be having a chat to Veronica today.

Now, Veronica is the founder of Good Deeds Buyers Agency in Sydney. She’s the, was a host on Location, Location Australia and Relocation, Relocation Australia. Host of the Elephant in the Room podcast and that’s one of my favourite podcasts ever. It’s really good quality information.

Veronica’s commitment to speaking the truth and without fear or favor is just fantastic and I just am honored to have you on board, Veronica. What have I missed as part of that intro?

[00:01:49] Veronica Morgan: Well, thanks, Peter. Yeah, it’s funny whenever anyone reads an intro of me I think to myself, God, I’m busy, aren’t I?

I mean, I wrote a book, too, about auctions. Not that that really applies in the WA market. I’m aware of that. I also am a mentor of new buyers agents. So, I’ve put together a training program because, and we’ll get to this, no doubt, the, the, the, Difficulty in finding well qualified and well experienced buyers agents and I’ve got a first time buyer course as well of, of co founded Homebuyer Academy with Megan Welch.

She’s a buyer’s agent based in Brisbane and we have an online course for first homebuyers who can’t afford a good buyer’s agent so they can learn the process and, and buy better as a result. So there’s just a few extra things.

[00:02:35] Peter Fletcher: I can’t believe you get all that done. You must have

[00:02:37] Veronica Morgan: I can’t either.

[00:02:38] Peter Fletcher: A cast of thousands behind you surely.

[00:02:41] Veronica Morgan: I don’t, I don’t. And it’s funny cause half the time I don’t feel like I’m that productive. And then I do sort of sit down and look back at the things that I work on. And we’ve built yeah, it’s pretty amazing. I’m excited because my mission is really, well, my mission is to help people make good property decisions.

So really everything I do is aimed at that. And so I’m, I like to see everything that I’m putting together. Cause it excites me because it’s all to that end.

[00:03:06] Peter Fletcher: What drives your mission? Yeah. Why is it that you, you see the need to give people the, you know, empower people to make smarter property decisions?

[00:03:17] Veronica Morgan: Well, because I see so much evidence of really poor decisions. And I also, in this property space, there’s just a lot of misinformation. And there’s a lot of people who often, they’re licensed and they’re practicing legally, but they often don’t know. you know, the big picture or they don’t understand really the implications of, you know, their little piece and the whole jigsaw puzzle.

And, and I see that it’s very difficult for people to get holistic property advice and there’s self interest everywhere you look. And that’s just the makeup of the industry. This is not a judgment in terms of individuals in it. That is just the way in which the industry is structured. And so I guess it’s that I’ve always had this sense of justice all my life, you know.

Didn’t become a lawyer, but I became a buyer’s agent, so ultimately I want to help people make better decisions. So it’s really that. I just see that people are adrift. Not everyone actually wants to make good decisions. I think people think they do, but I think most people tend to actually like to be sold to.

I know it’s a bit weird. But there are as a subset of people out there that really do value good advice and really do value making wise decisions. And that’s what I’m here to help them find a pathway, I guess, to, to make better decisions.

[00:04:27] Peter Fletcher: When you talk, it sounds almost idealistic. And It is. But that’s not my experience with all buyers agency.

What’s your take on it? Do you know like do you think most buyers agents have this? Well, we want to make help people make smarter decisions

[00:04:46] Veronica Morgan: No, and even if they say it I don’t think most buyers agents even realize that there’s a difference between a smart decision and a poor decision I think a lot of buyers agents come into the industry because they like property and They’re you know, like built their own portfolio or whatever, but there’s very little understanding, I guess, deep understanding as to how to benchmark and how to really measure the performance of property over time.

And because there is no real established methodology there, everyone’s free to come up with their own and there’s very little focus on the long term. So I think that there’s a lot of, you know, People are well, well intentioned, but I just don’t believe that they’ve probably been around long enough to, to, or there haven’t been a critical thinking, the critical thinking skills aren’t strong enough for them to really assess and analyze, you know, what they’ve done in their own lives, but also what’s happened around them to really work out what’s a good decision or what is a long term outcome of good decisions versus poor ones.

[00:05:43] Peter Fletcher: Buyers agents in, is a common thing in Sydney, right?

[00:05:50] Veronica Morgan: Becoming a lot more common, that’s for sure. And, you know, certainly I think the boom we had in 2021, you know, coming out of the first lot of COVID lockdowns that created such incredible heat in the market that consumers were desperately trying to get an advantage and that sort of fed into the rise of the buyers agent for sure.

[00:06:11] Peter Fletcher: And so why, why do people employ a buyers agent? What’s the value there?

[00:06:17] Veronica Morgan: Well, weirdly enough, you know, I don’t think anybody really wants to hire a buyers agent and, and I say that because most people like, well, you know, it’s going to cost me tens of thousands of dollars depending on where you are at top property, you’re looking for the budget, et cetera, et cetera.

Really isn’t that money better spent on the property itself, you know? And I think that, so the, There’s, and in some cases, yes, it is. Honestly, I can tell you, I’ve seen some buyers agents in action. And I thought to myself, I, I’m, my heart actually hurts for their clients because they trying to get an advantage, trying to

get ahead, trying to do something to give themselves the opportunity to make better decisions.

And they’re actually worse off. Now I’ve seen many, many situations where they’ve been worse off because they’ve hired a buyer’s agent and they haven’t hired a good one. And So back to your question as to why people would hire a buyers agent most because they can’t achieve what they want to achieve under their own steam.

So it’s, there’s pressures either hot, hot, hot market, and they’re desperately trying to think, well, how can I get, give myself an advantage? Typically they think, Oh, I know I need access to this hidden market, the off markets, which a lot of buyers agents do go out there and promote rightly or wrongly. We can get into that.

So they’re trying to get an edge. They’re trying to get an advantage. Now, a small percentage of people, and certainly a lot of our clients in Sydney, they are of the mindset, look, I’m not an expert in this area and therefore I value expertise and I’m going to find an expert. So we do have a small percentage of people out there that, that would use a buyers agent.

With that intent, but I think a lot of people turn to a bias agent as I want you to pull a rabbit out of a hat, Bullwinkle, if you remember, if you’re old enough to remember Rocky and Bullwinkle. Watch me pull a rabbit out of my hat, Bullwinkle. They, they’re wanting magic. They’re wanting magic and in, in wanting magic and a magical solution, they’re setting themselves up to be sold to, to be given all sorts of false hope.

It’s, you know, it’s a bit sad watching that in slow motion from a distance.

[00:08:21] Peter Fletcher: Talk to me about off market stuff, because that’s the sell for a lot of buyers agents. It’s like, we’ve, we can give you access to off market. Is that a thing?

[00:08:33] Veronica Morgan: Well, it’s a thing, but let me explain what that thing is, right?

And I’ve seen buyers agents bragging about these off markets that they’ve had access to, and I’m like, we got the same emails. And if I’d got myself on that agent’s database as a buyer, I would’ve got that email too. You know what I mean? And I’ve seen brags on LinkedIn about properties that really, they’re not really off market.

Because if you know that agency, you’re going to get the email telling you that this is an off market. And if you’re not watching the video, I’m putting rabbit ears up. So. because it’s a pre market effectively. Often off market properties, it’s going to come on the market. It’s just that at first it will go to the agents database before it goes to the wider market via realestate.

com. au etc. So that’s the first type of off market, if you like. The second type of off market is a real off market. And every now and then we do come across one of those and it comes through your relationships with agents and it’s a gem of a property and they’ve got a legitimate reason for not wanting it to go to the open market, et cetera, et cetera.

And you evaluate that property and think this is a real cracker. We’re going to go for it. But the vast majority of off market that I see, the type of buyers, Asian who brags about having something like five, access to 500 off markets in a month or whatever. Is shit that agents feed. So am I allowed to swear on your podcast?

It’s the shit that these sales agents will feed to the willing buyers agents that they know are transactional, that they know can get a deal over the line because they’ve sold their clients on this idea of the hidden market, the off markets, and I’ve had agents brag to me quietly off the record that, you know, Veronica, we don’t give your team.

access to these sorts of properties because we know you’re too fussy. And we know the buyer’s agents that basically are not fussy. They, it’s their sales pitch that they get access to off markets. And so we basically feed them all the shit that we know you wouldn’t jump at. And that’s appalling.

And that is not just one agent that said that to me. And it’s not just in our area. I speak to agents across the country and I’ve heard that type of story from agents over and over again. And even worse is when they’re selling this. Junk listings to out of area buyers agents. What we used to call them fly in, fly out, that buy in regions outside of where they operate.

We used to call them fly in, fly out, but they don’t even fly in, fly out anymore. They buy sight unseen and they buy junk that these sales agents are only too happy to send them their off market lists because the real market in the, in these areas wouldn’t touch it with a barge pole.

You know, the local buyers wouldn’t touch a lot of this stuff. So this is the myth of the off market. And it’s awful. It’s some of the stuff I’ve seen and some of the deals I’ve seen done are awful.

[00:11:26] Peter Fletcher: Are people too keen to, to get off markets as in, could it lead to somebody actually paying too much?

[00:11:35] Veronica Morgan: Oh, absolutely. It can. I’ve seen it. And in fact, I had one agent actually, Remy one day, and he said You know, Veronica, we’ve got this property. Oh, actually, you know how I found out about this? It was someone I, a small world, somebody I know happened to be at the pub on a Saturday afternoon, having a chat to a friend of a friend who says I’m selling this property and, you know, got these two people making offers on it.

And I don’t know, I don’t know whether, I’m getting enough for it, you know, it, I reckon I should probably take it off the market, take it to auction. Right. And so this friend of mine said, Oh, you should ring Veronica. So the guy rings me out of the blue and I’m like, Saturday afternoon, I’ve really got to stop taking these calls.

And I, but I’m curious, I want to know the backstory. So the backstory is is it’s a local agent. it’s an off market. It hasn’t been given to my team cause it was a shit listing. And You know, the three people on it were all bias agents. three of whom I knew, one of them was half decent and he bowed out.

The other two were basically having an ego driven bidding war. They didn’t want the other buyer’s agent to win. It had nothing to do with their clients, nothing to do with the value of the property. Because when this guy rings me and I get the backstory, I then ring the agent and the agent’s like going, mate, I cannot believe this vendor.

Won’t jump at these offers. Like it’s so stupid this money that these two buyer’s agents and their egos have got involved are throwing at this. In the end, I ring the guy back and I said, mate, you are not gonna see that money in the open market. You need to sell it . You know you need to sell it. But I thought, what’s horrific for the clients of the buyer’s agents and they thought they were getting access to something nobody else was getting access to.

You know, so they were sold on this idea of you are getting something special and it’s a human, you know, behavioral bias that makes us go, it’s the scarcity bias just for you. Oh, I’m going to jump for it. But it was not, it’s just manufactured scarcity.

[00:13:35] Peter Fletcher: agents and, in fact, I spoke to one last night and I said, have you got anything coming onto the market, anything off market?

And he says, Bjorn, you know I won’t do off market Pete. And I said, well, why? And he says, well, sell them too cheap. And, but what you’re saying is that sometimes it actually works the other way. Where,

[00:13:56] Veronica Morgan: yeah,

[00:13:57] Peter Fletcher: people that want to secure a property are actually willing to pay a premium just to be able to negotiate with the seller one on one and get a deal done.

[00:14:06] Veronica Morgan: It’s the perception that the market is difficult. And so this is, I’ve got an inside run on something that no one else has got access to. It’s a very false perception in many cases. In, I would say the lion’s share of cases, it’s false. But it plays into all of our human biases. And on the flip side of that though, you know, certainly from a, Selling agents point of view, you know, your argument is you don’t sell it off market.

Why sell a secret? You want to take it to the full market. But when those sell selling agents have direct access to the type of buyers agent who will upsell it to their clients, what they’ve done. What that buyer’s agent is doing is, is rather than being there to protect their clients, they’re actually taking out one of the sales agent’s main problems.

And that is objections. And they’re handling the sales agent’s objections for them and effectively upselling this property. Right? So it’s a really, really scary thing. It’s awful. That

[00:15:07] Peter Fletcher: is just terrible.

[00:15:09] Veronica Morgan: Oh, it is.

[00:15:10] Peter Fletcher: And you know. Yeah. Paying somebody. You know, for the privilege of thousands of dollars to, to get sold to that is just, yeah, that sucks.

[00:15:21] Veronica Morgan: This is why I say to you, I think the majority of people actually prefer to get sold to they prefer to be bullshitted too. And this is why I actually say, I recognize I am idealistic. And I also recognize I know enough about human behavior. There’s only a subset of people who really truly want to make good decisions.

Most would prefer the easy option and they just hope they close their eyes across their fingers and they hope that it actually works. Property is too serious to do that with though, in my view.

[00:15:49] Peter Fletcher: Oh, we’re playing with a lot of money. We’re playing with some, with people’s lives. We’re, you know, for, for first home buyers, it’s the, well, first rung of the ladder.

And you, it, it’s either going to set you up or set you back.

[00:16:05] Veronica Morgan: Yeah.

[00:16:05] Peter Fletcher: Yeah. To muck around with that is, is pretty tragic. So talk to me about regulations for buyers agents, because. I know that we are regulated, but it feels very Wild West out there when it comes to buyers agents.

[00:16:23] Veronica Morgan: Look it is okay, just for the listeners every buyers agent in any state or territory of this country has to have a real estate license.

Right? In order to operate their own agency, they need to have well, it depends on the term of it, but in, like in New South Wales, it’s a Class 1 license versus a Class 2. You can operate as a buyers agent, but you can’t own your own agency. And the regulations are somewhat similar in WAs.

They are in New South Wales in the sense that you can’t get your, your license to run an agency until you’ve actually had some work experience. So that’s good, but some states you don’t need that. And in fact Queensland’s the easiest state to get licensed in. You don’t need any work experience whatsoever.

And in fact, there’s the qualification to upgrade from class two to class one or the equivalent is one module of a diploma. Like not even the entire diploma, just one module of it, right? So there are a lot of people who are on a shortcut to become a BIS agent. They will get licensed in Queensland and then they will go for mutual recognition in another state or territory.

And so that’s sort of the worst kept secret out there for those people who want a shortcut. And become a buyers agency and run a buyers agency and take money from clients to help them make supposedly better decisions. And I’ve been appalled and horrified at some of the people I’ve spoken to who are appropriately qualified and yet absolutely inappropriately experienced.

And Let me just also add another little bit of shock and awe in there. In this, the first part of the first part of this licensing process is called well, the first part is associate license, but the first qualification is a certificate for right cert for in that there are zero, zero. subjects on due diligence.

None. You’re taught how to appraise a property like a sales agent does, which is good. That’s something, but you’re, but most sales agents will just go and press a button on CoreLogic and spits out an AVM or automated valuation model. And so even though they’re taught it, they don’t do it. And a lot of buyers agents do that too, which is absolutely mortifying.

And but they’re not taught anything about due diligence. You know, what’s missing from Vendor Disclosure, how to interpret what is to be disclosed, how to know what to look for, what isn’t disclosed, none of that. Right. And in every state and territory is varying degrees of vendor disclosure as well.

And even in the States where it’s at a high level, say in Victoria and New South Wales, it’s still not enough. It’s not enough to properly buy a property and know everything you need to know or know what you don’t know, you know? And so we’ve got buyers agents being spat out of the system with zero understanding of the, that they even need to do it, let alone.

Knowing it needs to be done, but not knowing how to do it. They don’t even know they need to do it. And the reason it’s like that is because there’s something like 70, 000 real estate agents out there in this country, qualified real estate agents. And only best guess, no one really knows exactly how many buyers agents there are, but the best guess is around about 2000.

Maybe 3000 out of 70, 000. Right. So, and then you split them amongst eight states and territories, and then you wonder why our regulators don’t seem to bother. to put in place proper training and proper qualifications for buyers agents, because we’re a drop in the ocean. We’re dropping the bucket in terms of the number of real estate agents out there.

And our regulators don’t have the understanding of the damage we can cause, but our actual exposure is limited when you think about it, given The amount of transactions are done every year in the amount of us that are out there. So from an individual they can be catastrophic the damage it can do to you if you choose a bad buyers agent But as far as our regulators are concerned and the whole the 25 million people in australia, it’s a very minimal risk

[00:20:25] Peter Fletcher: It strikes me that the regulators are asleep at the wheel

[00:20:30] Veronica Morgan: They are, but once again, they’ve got to, they’ve got to be com Maybe not commercial is not the word to, to use in this, in the way of regulators, the squeaky wheel, right?

Where it, you know, our squeak in our wheel is not loud enough.

[00:20:43] Peter Fletcher: And you know, in a bullish market, well, the market over here is just insane. I’ve never seen it this crazy. It’s it is just nuts in a bullish, in a bull market it’s forgives a lot of sins because someone pays 20 or 50 grand too much in three months time, it’s going to be a market value and three months after that, it’s going to be worth another 50 grand.

So you just go, well, you know what? I paid too much. It doesn’t matter. The market took care of it.

[00:21:18] Veronica Morgan: However, and I’m sure that, you know, recent history hasn’t been that long ago that Perth sat in its haunches for a good decade. So in many places went backwards. So when

[00:21:30] Peter Fletcher: you see the other side, sorry, Veronica, that’s the other side of that is, well, yes, a bull market will hide a lot of sins, but if the market corrects there’s going to be people dancing on the dance floor when the music stopped.

[00:21:46] Veronica Morgan: Well, and that’s yeah musical chairs, you know, there’s no chairs left. Yeah. I mean look A bull market also creates FOMO, you know, Fear of Missing Out, and that, that is absolutely drives property markets. You know, we might think that they’re it’s our single biggest asset class in this country. I mean, property, residential property that is, is worth like 11 trillion, a ridiculous amount of money.

It’s worth more than the share market fund balances commercial property and super, sorry, superannuation fund balances and the share market and commercial property combined is roughly around seven, 7. 7 or 8 trillion. So we’re, we’re a good 3 trillion more in residential property in terms of value.

You would think it might be, sophisticated way, but it doesn’t because individuals purchasing these properties were all driven by emotion. And, you know, when we think that we’re going to miss out, all of a sudden we pile in. You know, people would have been sitting on their hands for years, I would think, in Perth.

All of a sudden, oh, now’s the time to buy when everyone else is buying.

[00:22:46] Peter Fletcher: It is insane. Let’s talk about these FIFO buyers agents. Because I think that they are just a real problem. We own a settlement agency, so a conveyancing firm. So that’s a big part of what we do. And we see contracts all the time that have been organised by a, buyer’s agent. So, the buyer’s agent from, let’s say, a lot of them coming from Queensland. They’re buying properties in WA. Their DNA is nowhere on the contract.

So they use, they, they approach the local real estate agent. So, the contract is written by the real estate agent here. And All the inspections are organized by the real estate agent here. The conveyancing is all done here by a local conveyancer. And there is exactly zero DN, of the buyer’s agent’s DNA on that file.

Now, if, if something, you know, if a problem came up I think that, The buyer’s agent, well I didn’t, I just organised it as a transaction facilitator. I didn’t actually, I wasn’t actually a buyer’s agent here. To me that just is a terrible, terrible system. What’s your thoughts?

[00:24:11] Veronica Morgan: Oh, I agree.

I mean, I think if you quizzed most consumers and you said to them, look, you know, what do you expect a buyer’s agent to do? Then, You would think that they must expect that the Biosasian would inspect the property or would do, carry out fundamental, at least, due diligence. And I’m talking about things like, not just the building and pest inspection and getting the contract reviewed prior to making an offer, but, you know, where’s the sewer line?

Is there been a structure over the sewer line? Where’s the boundary? Are there encroachments? Has any developments on the property been approved? I mean, what’s likely to get developed around the property? I mean, there’s just, that’s just scratching at the surface of what we do. And I know that these sort of buyers agents that don’t actually physically inspect a property, I know that they don’t do that sort of due diligence.

Because, A, it’s not in their cost model, it’s not their business model, you know, they are, often they’re low fee but not always. Some of them charge a lot of money to do this, to do nothing. When you say there’s no DNA on it, they’re also, they’re pitching data based decisions to their clients, so, and data can be very misleading in the wrong hands, and you can slice up data in any, you can, how to lie with statistics, there’s a fantastic book written in 1954 that I read on the advice of Kent Lardner, who’s a property data specialist, and it’s, You know, everyone should read that book if you’re going to rely on a data expert.

And so data takes you only so far. Right. If you do not have local smarts, if you do not understand what, what makes a good asset in any particular location or why one particular location might look good in terms of the data, but actually is not good for these reasons, then you are missing a massive trick.

When you’re making property decisions and this is what I, something I see a lot and people we do it is, you know, we’re human beings and our brains are wired in such a way that when we’re making a big decision, we seek for ways to make ourselves feel good about that decision and data is very, very tricky.

in that way because it often makes people feel like it’s a well considered decision. And yet I have seen database decisions when it comes to property that have led people to buy really terrible assets. What I also see from a lot of these, we call them FIFO buyers agents, but they don’t fly in fly out.

Remember they’re sitting in a desk and they’re, and sometimes they’re engaging a property manager to do the inspection for them. Yes. Now, What property managers look for in a property is very different to what a bias agent should be looking for in a property, but also the property manager is to some degree, I mean, they are not trained in this area, but they also to some degree wanting to win the business, you know?

So there’s a, there’s an automatic bias in or, you know, what do you call it? A double,

[00:26:59] Peter Fletcher: oh, yeah, it’s a conflict of interest.

[00:27:01] Veronica Morgan: That’s the word I’m looking for, a conflict of interest. So you’ve got this sort of situation, but you know, the way it’s packaged up and there’s some very sophisticated operators in this space, the way it’s packaged up is done in such a way to allay people’s fears.

But when you look at these performances over a long period of time, you realize, Oh my God. And so this is, it reminds me of the current boom of Eastern States buyers agents buying over in Perth. Reminds me very much of what was happening in the Brisbane, and I’ll use the word loosely, boom probably about 2017 when Sydney and Melbourne sort of was dying in the butt because of, you know, APRID.

constraining investor borrowing, et cetera, et cetera. Brisbane sort of rose up as an affordable option and Brisbane was the fancy place that everybody wanted to buy in. And you had all these Brisbane buyers agents all complaining about the

buyers agents from the Southern States buying shit property in their neck of the woods.

And you know what, over the years I’ve sort of kept a little log of properties that I know have transacted and I’ve looked at their performance and anything Really bought by people who do not know local dynamics as often. woefully underperformed what those local buyers agents were buying for their clients.

So, you know, I’ve seen

[00:28:17] Peter Fletcher: there’s a good end and a bad end of every suburb. I was speaking to to Peter Peter Robertson from William Porteous Properties and he, his average sale price over here is 3 million and you know to you guys, that’s first home buyer territory, but over here that, that is the top end of the market.

And and I said, you know, is there a good end and a bad end of Peppermint Grove, which is like the suburb in Perth. And he said, yeah, and there’s a good end and bad end of Claremont and of Cottesloe and, you know, these are prestige suburbs, but there’s, in every suburb and in every, pretty much in every street there’s a good end of the street or a good side of the street and a bad side of the street.

And as you say that, those data base or, well, you know, the data says that it’s a great buy. Well, BSII call, yeah, it’s

[00:29:04] Veronica Morgan: comfort. Yeah. And also when they do that revaluation after a, you know, six months or 12 months or whatever in claims, instant equity uplift, it just makes me wanna howl, you know, I mean.

But, you know, the thing that people don’t realise, and this is something that sort of, it dawned on me over time. I mean, I was originally a sales agent. I sold property for six years and then I moved into the buying space. And I started really tracking different properties that had sold over the same periods of time.

And I could see that, you know, whilst a suburb might, might rise or fall in value at a median rate, Every property rises or falls at a different rate. And in fact, in some cases, you can have a property boom and some individual properties lose value over that time. You can have a, you have a crashing market and some properties make money over that time without being renovated.

And so that sort of, once I started sort of noticing these sorts of anomalies and that’s when I really started researching, and this is way back in the day, About

15 years ago now, and I started really researching individual case studies and really pulling them apart. So why would this property do so well and this property here do so poorly, even in the same suburb in the same time period?

Some of them similar price brackets, you know, so it’s like a buyer had two choices and day dot and then in 10 years down the track, you know, one of them that chose well is hundreds of thousands of dollars ahead of one that didn’t choose well. Why? You know, and that’s the sort of thing that a really, really good buyers agent with good critical analysis and good critical thinking skills is able to be able to explain.

And you’re talking about the good end of the bad end. I mean, my office is in Balmain in Sydney. I mean, it’s a, that’s a premium suburb and I know people have lost money and property in Balmain, you know, and people think, how can that be? Well, because I bought a poor asset and it’s not even about timing the market.

It’s actually about the asset. So, you know, and this is the thing that, that if. What I see with many, many, many buyers agents and almost every new buyers agent that comes into the marketplace, they don’t understand that because it’s not taught.

[00:31:15] Peter Fletcher: We we see some, some very interesting ones come through from the Eastern States buyers agents and one I shared with you I think I sent it on, you know, social media or something.

I’m not sure. But it was this Eastern States Buyers Agents saying how they’ve just bought this property for, I think it was, you know, 390, 000 and it was this it was, you know, six kilometers from the city and five kilometers from the beach and I did an image search of it and this property turns out that it was on Canning Highway in in Como.

Now, Canning Highway is one of the busiest. Roads in Perth, like to get onto it is like you’ve got to pray and just hope. It’s just a, it’s a, it is a terrible, in terms of location, it’s a terrible location. Como is a good spot, but that was a particularly bad location. And they’re sprucing out how, what a great buy it was.

And they’re saying it was six kilometers from the beach. Well, I don’t know how you get Como within six kilometers of the beach unless you call a beach on the one of the, you know, reaches of the Swan River, maybe a beach, I don’t know. But

[00:32:31] Veronica Morgan: I was talking to somebody recently who lives in Dubbo, and they were talking about the beach on the river.

[00:32:37] Peter Fletcher: Oh yes.

[00:32:38] Veronica Morgan: So it could have been that, it could have been that.

[00:32:42] Peter Fletcher: So, you know, there, to your point about data driven decisions it’s, it doesn’t replace that on the ground nuanced feel for what a physical inspection is going to get you.

[00:32:58] Veronica Morgan: Yeah. I mean, look, there’s lots of things that a physical inspection will show you.

Ceiling height is a really good one. The smell of damp, you can’t pick that up if you don’t actually go into the property. There’s, you know, there’s lots of selective photography by real estate agents and you can argue, oh, I can do Google Earth. I can do all these things, but as I said, ceiling heights and, and the smell of damp two things, just two.

There’s loads and loads and loads of other things that we detect when we go and inspect properties that we know. You’re never going to see, never going to notice when you’re online. But also most people don’t know what to look for in a property. We take clients out here and we say, right, come with us.

And we’re just going to give you a running commentary. In fact, we do videos if they’re not with us anyway. Just sort of, it’s a stream of consciousness, effectively walking from the front door through a property. And they’re like, always come back to us saying, I cannot believe what you notice, what you pick out, what you pick out.

Point out that I’ve inspected it, you know, some of our clients come to us after founding a property and recently we had a client that came to us after seeing this apartment, brought it to us and said, we’d inspected it three times and we hadn’t noticed half of those things, you know, and they were deal breakers, they didn’t buy it.

Thank God they didn’t buy it.

[00:34:11] Peter Fletcher: How do buyers agents get paid?

[00:34:15] Veronica Morgan: Well, it’s fee for service, right? And this is one thing that is a big difference between sales agent and buyers agent. A sales agent gets paid a commission on exchange, or in Sydney, New South Wales, exchange contracts on the, sorry, It’s not actually, it’s on settlement.

It’s on the sale of a property, right? So it’s contingent on the property being sold. And so the pressure is always on to make sure that owner sells that property. Otherwise they don’t get anything, right? Whereas a buyer’s agent is paid a fee for service. There’s a mix of ways in which buyer’s agents are paid.

Typically there’s a, an upfront retainer and then the balance on a unconditional contract We and a lot of other buyers agents will charge an upfront retainer and then a monthly retainer with a smaller balance at the end. Sometimes that fee, the total fee, is calculated as a percentage of the purchase price.

I personally don’t like that model. I think that that’s counterintuitive. We charge a fixed fee based on, you know, effectively how complex the search is and how much work we know is going to be involved. So there’s a judgment call there around the type of property, the geographic, the geographical spread how unique it is, how long it’s likely to take to find it, et cetera, how much education the client actually needs versus how much they think they need.

There’s a lot of, there’s a lot of moving parts there. So yes, there was some variety in terms of how buyers agents pay, but typically it, as I said, it’s fee for service with starting with an engagement fee.

[00:35:44] Peter Fletcher: So finally, what makes a good buyers agent?

[00:35:51] Veronica Morgan: Look, a good buyer’s agent, let’s talk from the consumer’s point of view for a minute.

So a consumer is going out there to find a buyer’s agent. How do you work out if they’re good or not, right? The first thing I say you need to look for is, are they a local specialist? You know, if you’re going in for a fly in, fly out, someone who says they buy all over the country, they cannot possibly know enough.

about the areas in which they’re buying. And I’m sorry, if they say they rely on data, they run a mile. If they say that they’re getting 500 off market deals a month, run a mile. You know, there’s certain things that they say. so the local experience is absolutely critical, right? The second thing you got to look for is a longevity of experience, right?

I really say they need to have been in business for 10 years, right? Now, if they themselves haven’t got 10 years experience, are they working for somebody under the direction of a licensed agent who’s got a good 10 years experience? And the reason 10 years is important is because you want them to have experienced full cycles.

Tough times and good times. Yep. Because the tough times teach you a hell of a lot in property. That’s when you know that the really crappy assets really stand out and shine in a bad way. In a crap market, they’re difficult to sell. They are on the market for a long time. Buyers give them a wide ber. You don’t wanna be buying that sort of a stuff in a hot market when everything’s selling and everything’s competitive.

You know, so teacher’s discernment. There’s a whole bunch of things that being in the market long enough to have rode those cycles and really understand the difference of them is really important. And the third thing I look for in a buyers agent is somebody who has robust due diligence processes.

Now, they will do that if they have their ethics in place. Cause they care about you, their client, and they want to make sure that you are protected, right? I see, and I look at so many buyer’s agent websites, and I see their processes, and it’s like one, two, three, four, and due diligence not mentioned, find a property, make an offer.

Oh my God, what could possibly go wrong? You know, so if you see somebody’s website and they, and that’s their process, no mention of due diligence, run a mile. If you see somebody’s website. And their bio says, I’ve been in property for 20 years, because effectively ever since I could live in one. And I’ve been investing for 20 years.

It is a difference between being in property and being in the property profession. Right, if they’ve been in the property profession for 20 years, that speaks a hell of a lot louder than someone who’s just happened to have been an investor for 20 years. And a lot of them you just believe. Check the wording because they’re not exactly misleading you, but they’re sort of designed to make you think that they’re a lot more experienced than they really are.

Now, what makes a good bias agent? Somebody who is very, very good at critical thinking. Somebody who’s good at Working with clients and being able to draw out of them what they really want, but also advise them, not just take their order and go, Yeah, you want one of them for sure. I’ll find one of those crappy properties for you on a main road.

They will actually give you advice and actually push back on, on what you think you need. If it doesn’t work. It isn’t necessarily in your best interest and if you knew more you might choose differently. So a good buyers agent is a trusted advisor, is not an order taker, right? And a good bias agent is someone who really gets people and recognizes and respects the what, the role that emotion plays in their life.

In this industry. So you’ve got to work with clients through their roller coasters of their roller coasters of emotions. And you’ve got to work with agents and their roller coasters of emotions. Like this is not bricks and mortar people. This is a people business. And in order to be able to negotiate and be, you know, negotiation skills is obviously really important as well, but you know, you’ve got to be able to bring it all together.

You’ve got to be able to coach and guide your client through difficult decision making and hold them down and hose them down when they get stressed. Keep a steady hand and lead them to the point where they buy a property that we better than they would have bought without you. And yes, if you can save money in the process.

Fantastic, but the real savings comes in that increased growth rate you’ll get from a better asset.

[00:40:06] Peter Fletcher: Yeah, quality asset, yeah. And that’s one of the things that’s drawn me to your work, Veronica, is and I can’t remember where I saw it, but it’s a persistent theme through what, the message that comes through from what you say is buy the best quality asset your budget can afford.

And yeah, it just keeps coming through again and again and again. And I just think that for people looking to buy property, you just can’t get better advice than that. Buy the best quality asset your, your budget can afford.

[00:40:38] Veronica Morgan: So then the real challenge comes in understanding what makes a quality asset.

Yeah. And I’ll come back to that local experience because in every area, what might be a quality asset in your neck of the woods, you drop that in a different suburb, could be still be in Perth or could be in another city or could be in a regional area, that same property won’t be as desirable.

So it’s really important that people understand, you know, what it is in each particular area that is quality.

[00:41:06] Peter Fletcher: Who are you learning from? Who do you take who are your mentors or you take advice from?

[00:41:13] Veronica Morgan: I don’t, you know, it’s funny actually. I’ve got what I call a secret society of there’s a two other buyers agents, one in Melbourne, one in Brisbane.

I could probably say who it is actually. It’s Kate Bacos in Melbourne and Megan Wells, Brisbane. And. We call ourselves Secret Society, we’re just three, you know, female buyers agents running our boutique buyers agencies for many, many years in our different cities and we meet once a month and we just chat about the challenges in our marketing and our businesses and all the rest of it and so we do give each other great advice, I mean like literally we caught up last night I posed to something I’ve, I have a challenge with at the moment and they gave me amazing advice and I’m so much more confident about moving forward with what I’m going to do next with that.

So that’s one avenue. So peer mentoring is effectively what that is. I also do have a business coach as well. I also have a therapist, that I have been using as my mental health professional for, well, the last 20 odd years, and I check in with her.

[00:42:13] Peter Fletcher: It’s an important piece of the puzzle, I’ll have to say.

[00:42:16] Veronica Morgan: Absolutely. I check in with her every now and then. So I look at an examined life I think is a life worth living. You know, I think an unexamined life is pretty sad. So I, and I bring all of the things that I learned from these different angles or different aspects into my practice as well.

And obviously I’ve got a bias agent mentoring program as well. And I bring into the training that I put together for the mentees, but I also I find on the Elephant in the Room podcast, and I love that you said it’s one of your favourite, thank you.

[00:42:46] Peter Fletcher: Oh, you’ve got some really, really good people on there.

[00:42:50] Veronica Morgan: Yeah, we have been going for six years now, and I have had the privilege to interview some of the best minds in the property space. And the way that my thinking and my ability to use data too, and I don’t diss data. I think data has its place. It’s very important. But my critical thinking skills have been honed through that period of time.

My knowledge, my ability to hold a conversation at different levels and in different facets of property and just the finance space that I was unable to do, I would say confidently six years ago. So that is a constant learning for me, that particular podcast. And it’s been an absolute gift in many ways.

I’m, you know, I know that we’ve got a receptive audience that really values it, but for me personally, I have to say that that gift of learning has been awesome. It’s way, way over what I anticipated.

[00:43:50] Peter Fletcher: Well, it’s a gift to you and it’s a gift to the the community Veronica, because it is a great resource.

There’s so many pearls of wisdom in that podcast for people that are, are thinking of of making a purchase. Now, tell me, if people want to use your services, employ you or get mentored by you, how would they get in touch?

[00:44:12] Veronica Morgan: The easiest way to find me and everything I’m working on is VeronicaMorgan.com.Au And on the landing page there, you can choose whichever pathway you want. So, you can, you can go to Good Deeds, which is my buyer’s agency. You can go to Home Buyer Academy for first home buyers. You can, I think I’ve got the elephant in the room on there. Yeah, I do. You can buy my book, Auction Ready, if you want to buy at auction.

I mean, this is a WA podcast. Nobody’s going to be wanting to read about property auctions over there. And you can also get into the mentoring program if you want to understand what that’s about. So, that’s the best place. VeronicaMorgan. com. au. Thanks for the the allowing me the plug.

[00:44:49] Peter Fletcher: Veronica, this has been just terrific. I’ve you know, just loved every minute of this conversation. I appreciate that you’re very busy and you’ve taken the time to have a chat to somebody from WA. And I wish you all the very best.

[00:45:04] Veronica Morgan: Well, thank you very much. I appreciate you inviting me on and I wish you the very best as well.

[00:45:10] Peter Fletcher: Thanks. And until next week, this has been Peter Fletcher on the WA Property Q& A podcast. And that wraps up another episode of the WA Property Q& A. We hope you found our discussion valuable and gained some valuable insights into the world of property buying in Western Australia. Remember, while we strive to provide useful information, It’s crucial to consult with the appropriate professionals before making any investment decisions.

Don’t forget to tune in next week for another exciting episode where we continue to unravel the mysteries of the WA property market. If you have any questions or topic suggestions, feel free to reach out to us. Until then, happy property hunting, and remember to seek the right advice for your personal circumstances.

Thank you for listening.