The 97% Standard: Why Australia is Following the US Lead

In America, 97% of people use a buyer’s agent. Is Australia next? We recap our latest trip to the Gold Coast to discuss the evolving role of the advocate in the Australian property market. From conference takeaways to boots-on-the-ground conversations with industry veterans, we look at why the "standard" way of buying property is changing forever.

This conversation get's a bit spicy towards the end!

 Connect with Karl: https://www.thebarnardgroup.com.au

 Connect with Cameron: https://www.thewaytoinvest.com.au

Transcript

SPEAKER_00 0:05

Welcome to the Bold Property Podcast, where informed decisions shape stronger property portfolios. Your hosts are Carl from the Barnard Group and Cameron from the Way to Invest. Each week they cut through the noise and guide you to invest with clarity, strategy, and confidence.

SPEAKER_01 0:25

Right, hey Cameron, we are back for another episode of the Bold Property Podcast. We actually caught up last week, so I do know how you're going. And um we spent a fair bit of time on the lovely Gold Coast. Uh great as always to catch up.

SPEAKER_02 0:43

It is, mate. Yeah, it was a good time. Um learned lots as we were both at the uh Buyers Agent Institute conference and um yeah, had some amazing speakers there and lots of takeaways that um I'm going to implement as well to um you know help grow my business and also have the best uh deals to get done for the clients.

SPEAKER_01 1:05

Yeah, it was uh it was a really good, good two days, really intense, and it's really interesting to see where the real estate industry is going and where we are going as buyers agents and the way that's coming into the Australian market. Now, you and I do this every day, we're in our little bubble, but what are you seeing out in the broader market?

SPEAKER_02 1:30

Yeah, look, it's it's interesting because I had a conversation with a few people, um other buyers agents, while I was on the Gold Coast, and you know, the way that the buyers agents are perceived in Gold Coast is completely different to other areas that I've um, you know, bought property with and had interactions with other agents and just in the general public with. I had a really, really uh good in-depth conversation with the lady in the Gold Coast, and she's a buyer's agent. She um, you know, has been doing it for a number of years, and her and her husband have really built their business and created some great relationships. But she was saying that not all properties, but there's a large, large majority of properties are actually bought by buyers agents now. And it's just a norm. It's becoming one of the norms to buy properties through buyers agents in Gold Coast. So, um, and that's one of the things that's uh I've sort of been talking about for the last, you know, 12 months that you know the the perception of buyers agents and the industry is going to grow that's a bit like the US is that you know 97% of people buy properties through buyers agents in in America, and that's the way it's sort of heading here. I mean, it's we always are pushing that point is to have someone on your side as an advocate to buy their right property for you, whether it's an investment property or if it's an owner-occupier. Um, you know, we're separate identities when it comes to real estate. We are the buyers' agents, we're on the buyer's agent side, we're on the buyer's side. And the real estate, they're on the seller's side. It's very clear. There's very clear lines drawn. Um in Australia, I think we do it better better when it comes to like our fee structure and stuff like that. The US, they've got their way of doing things and they've been doing it for a while. But buyers agents isn't globally a new concept. It's a a new concept to Australia. It's it's well known in Europe, it's well known in um North America, and you know, it's becoming more popular um and better well known in Australia. Um, to have an advocate on your side when you're buying your biggest purchase in your life, um, like why wouldn't you?

SPEAKER_01 3:44

Yeah, and the the Gold Coast is very interesting in the fact that they've just adopted it. Like that is using a bias agent is the norm, not the exception. Whereas a lot of other places in in the country, it becomes more of an exception. And one of the big things we do talk about is off-market properties. And look, not all off-market properties are good properties, but they're certainly good opportunities that do come up. And another place that you know we were both active in was Darwin, where it was really interesting that they really adopted the sort of bias agent mindset from the selling agents. Because if you looked at the data, days on market were one day. But in reality, most of those properties never actually made it to market. And I spoke to a couple of the really, really big real estate agents up there, and they said, yeah, you know, when we get a property, we don't even list it. We just send it out to the bias agent database and we sell it off market. And that's when the data comes up, you think one day, well, it never hit real estate, it never hit domain, and those properties are just flying. And it really becomes a business-to-business relationship. So you've got your selling agent sitting there with the seller behind them, and then you've got your buyer's agent sitting there with the buyer behind them, and now you're going to business negotiations, right? When we work with selling agents, if you walk in and they see there's a buyer's agent, they know that first of all, it's a serious buyer. Second of all, they know you've done your due diligence on this property and it's the final ticks and balances. And they know typically that finance is going to be sorted for this buyer. So the odds that a deal falls over is really, really small. You know, if the building of pest throws something up, then of course you'd walk away from the deal, or if the deal doesn't make sense, you'd walk away from the deal. But they are very open to working with bias agents because they know, you know, this deal is if the numbers are right, it all stacks up, emotion isn't going to pull the buyer away, or you know, change of mind isn't going to pull the buyer away. So they know that it's a serious buyer coming in to get the deal done. And most real estate agents are running around, they are looking for their next deal. So they want to get it done, they want to put it to bed, and they want to move forward. And there are some agents, as you said, that are a bit more open to it than others. Some are still learning, some are still figuring this thing out. Um, I've had a couple recently, this weekend, actually, where they give me the building pest inspection report. And as you know, we always do our own building pest inspection reports. And quick sidetrack, there was a story where we were buying a property in Gladstone, they gave us the building pest inspection report. We put our offer in, we were the best offer, but we had the building pest inspection clause in there, and they wanted to walk away from that deal saying, Oh, we'll take the lower offer because you know they don't want to do their building a pest. Because we've done it, it's perfect. Anyway, we kept on negotiating, we kept on pushing, and we you know got to the point where we did our own building and pest and we found it an entire legal structure worth$20,000 on the block that the council could come and make you knock down, and that was not covered in the building pest inspection report that the agent gave us. That's just one of the issues. So yeah, some of the agents are very surprised that we want to do our own, and uneducated buyers just accept what they are given. But as we both know, if it you're not the person named on that report, you cannot rely on it. So if the house is termite-ridden, tough cookie, right? Your problem. So I am pushing back against a lot of agents at the moment saying it's not negotiable. We are more than happy to walk away from the house if you don't want us to do building a pest, because if everything is perfect, there should be no issue to have a second set of eyes run across that property. So there'll be a bit of back and forth until they figure out how things are done. But ultimately, we are there to protect the buyer and the buyer's interest, they're there to protect the seller and the seller's interests, and we need to find a middle ground to get the deal done where both parties are really happy in the end.

SPEAKER_02 8:06

Yeah, you're right. And um, you know, the wonderful Victorian government has just uh tried to implement a new thing, and uh I don't think I've seen this lady pop up on my feed so many times in a week, um, just since her Alan, she's just brought out the whole new policies that every seller needs to uh have a building and pest report done. And like I don't know where she comes with or whoever her team who's implemented this has come up with, and any good buyer's agent wouldn't be just going off that anyway. Like, you know, we look after our clients, we give them the best advice, and my advice is every time you get your own building and pest done. Like it's just a joke. Like, I don't know if she's trying to boost up the income for building and pest inspectors, or like is it a dying trade down there, or what's going on? But um, yeah, it's smart people, and I think what might happen is that I'm assuming this, but I'll again I wouldn't do this for my clients who said when people go to auction, you know, you need to have everything sorted out prior, um, because it's essentially as soon as the hammer's down, you're unconditional. Um, so a lot of buyers might see the um building and pest report there. Oh, look, yep, that's great. Don't need to worry about that more anymore, and that's boxes ticked. Um, well, you go unconditional, and then you're like, oh gosh, um, there is so many other issues that weren't dis displayed on this building and pest report. So again, I'll still get an independent one prior to the auction um to make sure that it's all up to standard. Um, but yeah, it's just like, you know, you gotta think outside the box. And who, again, going back to the the seller is the real estate agent is on the seller's side to get the best deal done for them. So again, a buyer's agent would have your back on that and directing you in the best way to make sure that rides are auction that you're ready and all your ducks are in the line. Um, you know, and another thing that's um I was talking before about relationships with the agents, and what's happening is um on the coast is that there's a few agents actually doing that like you know, LA listing style um type thing where they're inviting all the buyer's agents to this property, they're putting on a bit of a you know show for ones that they work with um to you know um get buyers' agents to have first glance at these properties to then you know boost up their um well one I guess the presentation of the property, but then maybe to get that done first properly. But do these agents also have a bit of hindsight that this is the way that the market's going to go? And we need to start working with these buyers agents and to instead of start being against them, we need to work with them. Um I've you know heard heard multiple stories of agents that are you know working as agents in real estate agents, and then they say, Oh, look, I'm going onto the buyer's agent side, and they just get laughed out of the office as like, why would you want to do that? Like small, small town mentality, I guess you could say. But yeah, that's um that's on them. And as I say over and over again, buyers' agents are a lot like AI. We're here, we're not going anywhere. So you can either work with us or you know, work against us, and you know, we know the ones that we're gonna get the best deals done for everyone, um, for our clients. We know the properties that our clients want to buy, so we will go for them, and the best way to do it is with relationships that work for everyone.

SPEAKER_01 11:44

Ultimately, our job is to to look after the buyer because a lot of these real estate agents are very smart, right? No matter how nice they are to you at the open home, they are not there to represent you. Legally, they represent the seller, and by law, they need to make the best of it, and they need to get the most amount of money out of a potential buyer for that property. That is their job. Yes, they might greet you with a smile, they might say hello, and yeah, a lot of them are nice people, but they're not there to represent you, they are paid by the seller. And some real estate agents, it's like any industry, you're gonna have amazing people, you're gonna have good people, and you're gonna have crappy people, right? That that goes for any industry. There are some real estate agents out there that can be sharks, but as a buyer, if you're not educated, you could end up either overpaying a lot for a property, or you might buy a terrible property. Because at the end of the day, in most property contracts, it's buyer-beware. The moment you've passed your conditions, that contract is settled, that property is yours. No seller, no real estate agent provides a warranty on that property. Like you get what you get, and you have a very short amount of time, sometimes even just a couple of days, to work through a property to determine whether it's the right location, it's the right property, are there risks, is this a fair price? And if you're not educated enough about that, you could buy yourself into a bit of a corner. You know, if we have seen some real estate agents, especially when the market was running hot, and it still is, um, in in parts of the country where they were just sticking very high prices on properties. And sometimes you're talking about$100,000,$200,000 over what that property is realistically worth in the market. Now, if you're an uneducated buyer, you know, you just go, oh, that's the price. I need to be around that. But in reality, it's not even close to that. And if you don't do the research, you don't take the time to understand the market, the pocket, the value of property, you could end up overpaying. And look, that's the agent's job. Their job is to get as much as much money out of you as possible. A buyer's agent's job is to ensure that you get into the market at a fair price, if not less than that. Now, that changes, like when the market's hot and you've got 15 offers on a property, it's about getting in at a fair price. When things slow down a bit, then you can start you know moving back on price a bit and you know, you can play with conditions. But ultimately, when you go into an open home and you talk to a sales agent, you are going up against a professional. This is what they do day in and day out. Their job is to get as much money out of your pocket as possible, and that's the job, right? It's not it's not being negative, that is their job. So the best way to balance that out is to have someone in your corner to protect your interest uh as part of the deal. And at the end, you know, you want to bring people to the party, but if there's a bad property or the pricing isn't right, you also should be ready to walk away.

SPEAKER_02 15:20

Yeah, that's right. But if you're talking about investors, like how long is it going to take for you to get your money back to get the valuation of the property? If you're talking about owner-occupier, it's a another different sort of kettle of fish because it's a lifestyle choice, it's where you want to live, it's the ideal drink property. Um, and I find that some people are willing to pay that little bit extra. But, you know, again, as we've said, it's a buyers' agents to at least get it to that closest um point to what the value of that property is. And, you know, if we're going in a multiple offer situation, which we've all been in multiple times, you still don't want to be overpaying um to a point where it's just ridiculous. And, you know, we don't know what's going to go on with the markets. You know, we're recording this on a Tuesday and we're waiting for the interest rate um decision from the RBA, and I'm pretty sure we all know where that's going. Um, another point on that is what's really interesting is that um, you know, all the um banks around the world uh meeting in Europe, and you know, we're talking Bank of England, you know, Central Banks of Europe and all this, all the big wigs. They're talking about cutting rates. So Australia's on their own because of our inflation due to many factors, and all we talk about is um increasing the rates. Like, why is this so? What are we doing here? Like our housing market is so big and reliant, and we're just killing investors. Like, where are they getting off? What are they trying to achieve here? Like these capital gains and talking about negative gearing. Like very simple answer. Who who are they helping? You know? We've got no petrol. We're chucking out 20% of our re reserves to help up. That's going to increase our inflation because the farms can't um keep up with everything, you know. So we're in trouble again. And who's gonna cop it? Investors. And it's not investors, we're not talking about big, big wigs here. We're talking about everyday nurses, doctors, teachers, everyday people that have investment properties, and they're the ones that are gonna cop it. Not yeah, not yeah, billionaires that, you know, are really that worried about it. So um yeah, uh it's all comes down to your strategy. Personally, I'm not that concerned because I've set these roadblocks in place, you know, for my strategy. And if if something is to happen, you know, I still can afford to pay my mortgage and still live comfortably, but you know, it's not about me, it's about everyone that's investing in property here. And so you'd when they label this is for the rich and we're taxing the rich people, well, no, you're not. You're taxing people to try to make it in life that are trying to set themselves up to be comfortable so that when they retire they're not going to get your pension that your taxpayers are paying for.

SPEAKER_01 18:08

Yeah, I mean looking at the Australian economy, it's to me it's very clear what's happening, right? We have again, we're going into government bashing now, but uh you've got the Labor government overspending, like they cannot throw money out faster. So it's really government spending that's been driving up inflation, and a lot of the government spending is packaged as help, but in reality it's just buying boats. Like we had energy rebates. Well, hang on, how about we do something to make electricity more affordable overall, as opposed to just throwing out money into rebates? Um, and just the amount of money that's being spent in in the country, like the 5% deposit scheme. Now, if you're a first-time buyer, you use that by all means, it's available, go for it, right? But at the same time, you could see people in markets with negative equity, just because the government is going, let's spend taxpayers' money, and effectively they can say whatever the hell they want. They can dolly this up as oh, it's more fair, it's this, it's that. At the end of the day, they are buying votes, they're using taxpayers' money to buy votes through their government spending, and at the same time, they go, Oh, we need more money because we're giving all of it away. Let's go and chase the people who've decided to make something of themselves, right? Getting into investment property does not happen by accident, it happens through hard work, dedication, sacrifice. And I'm not talking a week or two weeks of sacrifice, right? I'm and I'm gonna you're gonna get a bit personal now, but thinking back on my own life, like my decisions started at primary school level, right? It was working hard at school, going through high school, working my ass off at high school, making sure I got good grades, then going off to university, again, not going out, not drinking up all my money, like going through uni, getting educated, getting a degree. Then when I started working, right, not a new iPhone every new year, every year, or brand fancy cars, right? It's sacrifice upon sacrifice upon sacrifice for decades. You know, I moved to Australia, right? When when I landed in Australia about six months worth of income, no jobs, and that was it, right? We had to rebuild our lives. And we did that through working our absolute asses off. And a lot of property investors have done exactly that to get where they are. They then go on and they invest because they want to better themselves, they want to be, you know, they want to do something better for them, their kids, the next generation. And then you get a lot of people who don't make those sacrifices. They coast through life, they throw their money out, they spend it like you know, there's no tomorrow, and then a decade or two decades down the line, they go, Oh, I don't have an investment property. You know, all these property investors are assholes. It's like, well, mate, you made those decisions in life. So and you see a lot of that sort of backlash, I call it backlash online. But if you met a lot of these people, you wouldn't give them you know two seconds of your time. So I think like you know, property investors have been get getting a bit of flack. At the end of the day, the government is just seeing them as quick money so they can go and buy votes from those people who have decided not to do anything with their life. Like these people are on their couches, they made no sacrifice, but they want everything. It's that generation when they were kids, they threw a tantrum and mum and dad just gave them what they wanted. We now have that generation with a vote, throwing their toys and wanting the government, mum and dad, to give them what they want as opposed to. To working hard for themselves. Rant over.

SPEAKER_02 22:04

I I I agree. Like um, you know, it's one of these things that's it's all about mindset and changing the way you think about things. And if you want to get ahead like most people do, um, you know, you need to work hard to get to it. I the amount of double shifts I did as a nurse uh in the emergency department shift, uh in the emergency department to go from like an afternoon shift to a night shift, so an 18-hour shift, um, and we're not talking about putting band-aids on people, um, you know, it was intense, but it also got me to where I am today. So from working hard and not just saying I wish, and you know, I love that I don't love the phrase, but it's a phrase that comes around quite a lot, is geez, I wish I did this 10 years ago. Well, your ten years ago is right now, so why not say in 10 years I'm so glad I bought that property in ten uh 10 years ago because it's doubled or tripled in price. So it's where your mentality is instead of saying I wish I'm saying I did. And that's where you reap your rewards. And look, we're gonna, you know, we the RBA has literally just announced that it's arisen, so we're at 4.1%, and it's just gonna be we'll just go with it. That's what Australians do. Um, how much longer are we gonna take it? Well, I think the we'll have to wait and see because you know there's a massive backlash and Labour, again, government, but Labour obviously elected this lady because they thought she was gonna best be the best fit for our economy and our country. And you know, everyone else seems every other country seems to be cutting rates, so why in Australia? So let's have a look at things uh and how we can improve as a country and actually support people, not welfare people.

SPEAKER_01 23:56

And you're quite right. I was having this conversation today with my wife. We're becoming a socialist economy. That's really what we are. It's like let's take the money from the top end for people who've worked hard and just give it to the people off the bottom who haven't. Right? So that that just means, okay, more people are gonna end up on the government pension. That means we've got an aging population at the same time, and you go, well, hang on, who's gonna pay the tax for those people who need to go on pension? They go, oh, we need to bring in more immigrants into the country. We'd be importing a tax base. But at the same time, we're importing them faster than we are building properties. You know, thinking of Brisbane at the moment, we've got billions with a B of dollars of infrastructure spending about to kick off for the Olympics. And what I saw when I was doing my project in Melbourne, you know, I was building down there, and they had the the Westgate tunnel going in. Like trades closed down their businesses to go and take a job on the infrastructure projects because they were being paid an absolute fortune to do that. So they don't build houses because why would they want to worry about making$250,000 a year building a house? They go pick up nine to five forty uh$350,000 a year on a big build project, and all those trades just disappear and they stop building houses. So we are really perpetuating some of these issues. Um, and again, I I've seen some I've known some people who couldn't make it in the private sector, they couldn't make it on their own, but they got into government and now they're making decisions to to help run the country, which is scary if you think about it. Because ultimately getting into government is a popularity contest. There's no basic test you have to take to prove that you're competent. Uh, and just think about that, right? That that is that is scary on so many levels. Um, like if you work at a business or you worked as a nurse, you have to be competent at what you do, right? People don't pick you for your looks and go, oh, go to your job if you're bad at it, so what? But that's government for you, right? And we have to wait and wait and wait until we can make a change, but then at the same time, I think there's a population in this country that they all quite quitting or laying flat or whatever the current buzzword is, but any excuse and reason not to work hard, and then they're the ones who complain and say, give, give, give, right? So I think as an investor, you just have to ignore all of that. I I think as a country, yeah, tall poppy syndrome is a thing. People hate seeing other people succeed. They really, really do, and they want to cut them down as much as they can. And if you're gonna let that stuff get to you, you're gonna end up with the masses. Where if you want to invest, you want to be strategic about it, get your head on straight, ignore the noise, and really push forward with your investing, because no one else is gonna do it for you. The government handouts can only go so far, right? Every government handout is a short-term fix and it creates a much larger long-term problem. Like even though rates are going up, even though there is, we call it a war, it's a strike in in you know in the Middle East at the moment, I don't think that's gonna last long. Um and there's still some markets with you know double digit growth predicted behind them, even with rate rises this year. So a lot of people go, oh I'm scared, I don't want to invest. Well, you're not investing for a year, you're investing for 10 years from now. And the amount of momentum we're still seeing in some markets, it's like be smart, have your strategy, don't be fearful, push forward. There's always going to be someone in life who wants to keep you behind, who wants to keep you back. Get rid of those shackles, push forward. And if you need someone in your corner that can help you do that, that takes the emotion out of it, bias agents. Back to that. And if you want some good ones, there's two on this podcast.

SPEAKER_02 28:02

And another one, yes, us too. It'd be great. Um, and we do, you know, that's our main priorities in our businesses is to look after our clients and make sure they're making the right decisions. And um, you know, we obviously talk a lot, you and me, and we um have a great relationship. And, you know, I think that's because the way we build our businesses and um we look after our clients with, you know, strategy bases and you know, buying the right areas, buying the right assets. So it's um yeah, it's it's great for everyone. I guess the bold statement of the week for me is have an advocate on your side when you're buying, uh, because the the um buying aspect is changing, the way that the real estate agents are looking at us and the way that the markets are changing all the time. So to have an advocate on your side to get you the right deal and the right property done is the way to go.

SPEAKER_01 28:55

My bold statement is don't let the opinions of people who've decided to float through life stop you from moving ahead and building something amazing. I think people get way too impacted by opinions on social media, and if that's gonna hold you back, it could hold you back from an amazing life, and an amazing life you could build financially. So ignore the noise and do what's best for you and your family. Perfect. Great. Alright, well, we've still done a bit of government bashing. We said we wouldn't, but I think it's hard not to.

SPEAKER_02 29:40

It is a little bit in this uh this time of um politicalness, I guess you could say, at this this rate with lots of noise.

SPEAKER_01 29:48

Yeah, it's it's like comedians who just stay at the obvious. Well, they give us new ammo every week to talk about. So you know, until they pull their head in and do the right thing, I think it'll it'll be a continuing topic of conversation, and we try to keep it neutral, but we did call out Labor in this podcast. So I'm not committing to not bashing the government going forward. Uh, I think if there's topics of conversation, we're gonna talk about it. That's right, and it's in the best interest of our listeners. Absolutely, that's why it's called the bold property podcast. It's got nothing to do with our two bold heads. All right, well, Cam, that was a that was a fiery episode. Um, as always, I love these conversations, and I really hope our listeners do get some value from it. If you haven't connected with Cam, links are somewhere in the podcast description. Same with me, we'd love to have a chat and uh see how we can help.

SPEAKER_00 30:46

Thanks for tuning in to the Bold Property Podcast. If you found value in today's episode, share it with someone who wants to make smarter moves in the property market. For more insights and support, connect with Carl at the Barnard Group or Cameron at the Way to Invest. Join us next week as we continue to break down the market and help you invest with clarity and confidence.