Episode 110 | Selecting the Best Asset | Veronica Morgan, Good Deeds

Tables turn, Chris interviews Veronica to get the scoop on how buyers agents select the best properties.
In this special episode, our hosts breakdown the purchasing process from the view of a new client and all of their needs and wants.. Veronica Morgan, asks all the right questions in understanding their story and how best to deliver their perfect property whilst also answering all of your questions on where the value lies when it comes to purchasing property with the advice of a buyer's agent.

Chris and Veronica, share opinions, frequently asked questions and peculiar case studies in their line of work, asking the right questions that you should be asking yourself when purchasing your next property.

Here’s what we covered:

• The good the bad and the ugly of buyers agents.

• Where the value lies in a buyer's agent.

• What questions do Buyers Agents ask you?

• Are you saving money or spending more?

• Understanding what your capacity is.

• What makes you ready to buy?

• Procrastinating purchases and the associated costs.

• The 3 P's of a property searching.

• Chasing the market and not having the budget.

• What education do you do to become a buyers agent?

• Where do buyers agents loyalty lies?

• Why to never do business with buyers agents who are partners with developers.

• Why you should buy a buyers agent.

MENTIONED EPISODES:
Episode 2 | Damien Cooley
Episode 46 | Lorna Patten

HOST LINKS:
Looking for a Sydney Buyers Agent? www.gooddeeds.com.au
Work with Veronica: info@gooddeeds.com.au 

Looking for a Mortgage Broker? www.wealthful.com.au
Work with Chris: hello@wealthful.com.au

AUCTION READY: HOW TO BUY PROPERTY AT AUCTION EVEN THOUGH YOU'RE SCARED S#!TLESS

By Veronica Morgan

EPISODE TRANSCRIPT: 
Please note that this has been transcribed by half-human-half-robot, so brace yourself for typos and the odd bit of weirdness…
This episode was recorded in January, 2020.

Veronica Morgan: You're listening to the elephant in the room property podcast where the big things that never get talked about actually get talked about. I'm Veronica Morgan real estate agent buyer's agent cohost of Foxtel's location, location, location Australia and author of a new book called auction ready, how to buy property at auction. Even though you're scared shitless.

Chris Bates: And I'm Chris Bates, financial planner, mortgage broker, and together we're going to uncover who's really making the decisions when you buy a property.

Veronica Morgan: Don't forget that you can access the transcript for this episode on the website as well as download our free fool or forecast report. Which experts can you trust to get it right. The elephantintheroom.com.au.

Chris Bates: Please stick around for this week's elephant rider boot camp and we have a cracking Dumbo, the weight

Chris Bates: Before we get started. Everything we talk about on this podcast is generally nature and should never be considered to be personal financial advice. If you're looking to get advice, please seek the help of a licensed financial adviser or buyers agent. They will tailor and document their advice to your personal circumstances. Now let's get cracking.

Veronica Morgan: Well, this is a bit of an episode with a difference. Now at full disclaimer, Chris is going to interview me. Okay. Which means we're going to be talking all about how our buyer's agent might be able to add value to property search. Oh, the good, the bad, the ugly around buyer's agents and I guess what we do, what we charge for it, et cetera, et cetera, et cetera. And I want to say full disclaimer, I don't want you to feel like this whole episode is going to be a sales pitch for me, my business or buyer's agency.

Veronica Morgan: But Chris has said that he's finding it difficult dealing with his clients who are a bit no at all. At times. He is getting a little bit frustrated. Buyer's not fully understanding the risks that they're taking when they're buying a property. So he said, look, can I interview you? I want to quiz you on, I find out all the dirt about buyer's agents so that the listeners can understand better, I guess how they can add value. So. There you go. I'm at Chris's mercy. You're at our mercy because I'm going to answer his questions and hopefully help you guys in the process.

Chris Bates: The reason I was keen to do this episode was a kind of a bit of a go to source that if clients are considering, you know, using a buyer's agent to, to talk through, I guess some of the things that they're thinking about, to highlight some of the value where a buyer's agents potentially they think the value is, but it's not some way that potentially they don't know it is and it is. And just start to talk about that. But I think there are, the best way to do this is for me to pretend I'm a new client of Veronica's and so I'm going to just probably am not gonna I haven't told her anything. She doesn't know anything about this.

Veronica Morgan: No idea. I promise.

Chris Bates: About this episode. But I'm just gonna pretend I'm a new client and I want you to kind of see how you can start to talk me through the process and win me as a customer, because I think that would be interesting for me to hear. What your pitch is really where, where, what is the value and where is it because, and I handle, how many years have you been a buyer's agent for now?

Veronica Morgan: Well go on. I'm coming out to 13 years as a buyer's agent, 20 years in the industry. And this is interesting because of course I do have a sort of set list of questions that I do go through with potential clients because I want to know obviously what's driving them, what they want to achieve.

Chris Bates: So let's go for it then. I've called you and.

Veronica Morgan: I'm going off the bat here and this is out of my memory cause I don't have these questions with me, but that's okay.

Chris Bates: No, that's okay. Let's, let's, I've just called you up. What do you really want to know?

Veronica Morgan: So first thing I want to know is, well, okay, are you looking to buy a home or an investment?

Chris Bates: This is a home home.

Veronica Morgan: Okay. And how long have you been looking for a home?

Chris Bates: We're been thinking about it for two years.

Veronica Morgan: Right. So when you say thinking about it, have you been out looking at property or are you just been sort of considering that you need a home?

Chris Bates: We're always looking at property where we're you know, flicking the paper. We're always looking at things that are selling in the area and, and things like that. But we haven't really gone too much out to look at property cause we're a bit scared of, you know, we're going to fall in love with something.

Veronica Morgan: Huh. So what's led you then to decide that now's the time to put your toe in the market and actually start getting serious?

Chris Bates: Well there's a lifestyle need for you. We have a family and that's going to drive us. We, we wanna have more space. But also we think potentially it's a good time. Yeah.

Veronica Morgan: So can you tell me about what you've been looking for and where?

Chris Bates: Well we, we've been looking in say the North of Sydney because, you know, my wife's family's from that area. But also been looking in the East, cause we spent a lot of time over there. And then, but we also like going to, all the cafes and stuff in the inner West.

Veronica Morgan: Okay. So at this stage it's fairly open slather by the sounds of it. And, and have you gone through the process of working out what your budget is going to be?

Chris Bates: Yeah, we, we just generally don't want to spend more than, you know, we like this as low as possible. Really. you know, maybe 1.3.

Veronica Morgan: Right. And what are you hoping to get for 1.3, whatever.

Chris Bates: Everything that we want, I guess.

Veronica Morgan: Which is? Bathrooms, parking style of house, hit me with it.

Chris Bates: Well really we probably want like a, we're probably gonna have another one, so it's, we've got one, we might have another child, so we want at least three. My parents aren't from Sydney and so they, they need some way of, you know, friends and stuff that stays ideally, maybe another bedroom. Yeah.

Veronica Morgan: And what I guess when you've been online and looking around heavier, she's seen anything that liked and you thought that you would have gone for?

Chris Bates: Um yeah, we saw something in the North that we really liked, but we never went and saw it, so we just saw something online. But I guess it was a nice looking house. So we, we were attracted to that.

Veronica Morgan: And what did it sell for?

Chris Bates: 1.4.

Veronica Morgan: Okay. So your budget's already under a bit of stress, isn't it? You mentioned that you want to spend 1.3, we don't want to spend more than 1.3. Is that because if your comfort level, is it because of your budget, is that because of what the broker has told you you can borrow? Where did, where does that figure come from?

Chris Bates: Uh just to use to somebody. We don't, you know, we don't have that additional stress in our life of a big mortgage. Um yeah, we want to still go on holidays and do these things and you know, you got cafes and not have to make it at home. Yeah.

Veronica Morgan: And that that is a struggle. I mean the first time you have a mortgage and presuming this is your first home or have you had wife had I apartment and with her ex.

Veronica Morgan: Okay. That said to me your first mortgage. Yeah, I mean it's a big thing taking on a mortgage for the first time. And a lot of people do have that, that sticker shock if you're liking terms of repayments and that does feel like an enormous responsibility. Okay. So, but I'm already sensing a bit of a trouble ahead if you like, because one, your you haven't been out and about, so therefore you're, you're yet to find out exactly what you can get for your money and then that can often be a challenge.

Veronica Morgan: So, okay. So, so we've got the idea that the one property you have seen sold for a hundred grand more than you want to spend. Okay. So have you got your finance approved?

Chris Bates: Um yeah.

Veronica Morgan: You do?

Chris Bates: We yeah, we went to the bank and we asked for a preapproval up to 1.3. Yup. And the bank said, yeah, we can do that. Okay.

Veronica Morgan: So you haven't actually asked the question, what could we get if we needed?

Chris Bates: No, we told the bank that we wanted, didn't want to spend more than one, three, and then the bank person and what we said and gave what we want. Okay.

Veronica Morgan: And in terms of where do you see yourself say in five years time?

Chris Bates: Um we're still asked though, staying in Sydney, we don't see ourselves living anywhere else and in this house. Yeah, potentially.

Veronica Morgan: Yeah. Yeah. So, and you've got one child so far, how old is that child?

Chris Bates: Um 22 months.

Veronica Morgan: Right. Quite specific. Most parents aren't there and you're planning and are about three or something and you're planning. Yay. You know that there's also the, there's this, there's this key points at which we see people want to buy a house who want to upgrade as well. So I be keen to know what you're thinking in terms of schooling. Have you thought that far ahead? Have you thought about, you know, you know, where you want to settle for the longer term?

Chris Bates: Um yeah, we've thought about a public. Mine is, you know there's a good little local one, but we haven't really thought too much cause we just thought, well, wherever we live we just going to send them to the local public school. We haven't really I guess thought of private schools and things like that.

Veronica Morgan: Okay. So that's not a big, big driver for you that you know the schools or where you're hoping little Johnny is gonna

Chris Bates: It potentially is. We just haven't thought about that. That's the first time someone's asked me that question. Okay.

Veronica Morgan: And the other question for you is if this house, have you sort of considered whether or how you might outgrow this property and when that might happen?

Chris Bates: No. Well that's probably the challenge we're in now where we've gotten we're in an apartment and we think that that's not possible because it's the little ones now running. And we can't keep up for that. So there might be another one. So we were probably feeling that pain now, but we haven't thought, we just think when need into something bigger. So we haven't thought we need something big or a bigger for when the kids, how much we go. Yeah. Yeah. We just thought we need something bigger.

Veronica Morgan: And what about you and your partner, wife, husband, wife, going to be careful here. So you, you and your wife, are you on the same page? Do you think that you really are completely in alignment in terms of what you're after?

Chris Bates: My wife thinks we're completely on the same page, but I think sometimes we're off the same.

Veronica Morgan: Right. It's often the case. Okay. And what has led you to actually, I guess put the feelers out and think I might need some help. What do you see as the greatest challenges ahead for you?

Chris Bates: I think the greatest challenge is finding the property. Yep.

Veronica Morgan: The greatest challenge. And then once you've found it, then what do you foresee any other challenges?

Chris Bates: Oh, well, I think I can negotiate. I mean, not do this sort of stuff at work, so I think that I'll be able to negotiate and deal with the agents.

Veronica Morgan: And when have you dealt with agents before?

Chris Bates: Uh yes. Well we've, you know, when we kind of go to open homes sometimes to do it and they follow up, don't they? Every Monday and sometimes, yup.

Veronica Morgan: Then they follow up in a buyer's market, they won't follow you up much in a sellers market. Right. And when you said that the, your biggest challenge was finding the property, what do you foresee, what do you sort of anticipate to be the solution to that?

Chris Bates: Well I, I just think you just do your normal sort of domain real estate, sort of, you know, going around the agents and the weekends and asking me if they've got stuff coming on and things like that. And that's probably the only options you've got.

Veronica Morgan: So what's the challenge for you then? If you've, you've, you're able to do that, why would you consider that you might need help?

Chris Bates: Well, I think that not only is finding the property, the problem is that someone else might find it and so they might get it before me and et cetera. So it's about, I just, I don't want to even know about it and I, if it's just comes on and it goes and,

Veronica Morgan: Okay. So it's this, it's the speed at which you might need to act and the competitive situation there also challenges you you're anticipating.

Chris Bates: Yeah. Well yeah, I hope not, but yeah, probably, but yeah.

Veronica Morgan: Mmm. Okay. And what are you reading about the market at the moment? I guess what, what are you paying attention to in terms of market commentary?

Chris Bates: Well know it's been pretty poor and that now it's a good time to buy because there's, you know, there's a market's rising again and so yeah, I've been told that I probably should just go out and buy and it's, you know, there's now we'll never was an article I read yesterday

Veronica Morgan: Now whenever. It's pretty interesting. That's certainly putting some pressure on buyers, isn't it? Okay. So in terms of your, just going back to sort of where you were saying you were looking, you said you like the East, cause you know, you're like the cafes and all the rest of it.

Chris Bates: I like the inner-west.

Veronica Morgan: Oh, sorry. The cafes in the West, you, you spend a bit of time in the East, so you like the East and in the North shore obviously is where your wife's family are from and sort of, you know, there's some connections and family connections there. What I guess, how confident are you in terms of your knowledge of, of the type of property you can get, where exactly it's going to be and how much that's gonna cost you?

Chris Bates: Well, we don't really know to be honest. I think yeah, we, we don't know how to compare. Well, we don't really visualized what we can get in that market or that market and that market. So we don't really know what yeah. What's, what's the best move for us? Yeah. We actually looking for advice as I'm going to tell us which is the best, but we don't actually know what's best.

Veronica Morgan: Yeah. And also we haven't touched on capital growth at this point of time and.

Chris Bates: Well it's my home, so I don't,

Veronica Morgan: You don't, worry about it.

Chris Bates: No.

Veronica Morgan: It's amazing how many people say that. What I would want to talk to you about is the, in, because in your timeframe, you know, you don't have a finite timeframe in terms of how long you may or may not own this property, how long you may or may not enjoy it before you may or may not need to upgrade for instance. Some of them are sort of gone into that and that's, that's a big deeper conversation. Going up in value. I mean, would you be surprised to know that some properties go up in value more than others in the same suburb?

Chris Bates: Oh yeah. Well it's, I guess I, yeah, but I mean I think that generally still they all perform pretty similar though cause the market all goes up together and

Veronica Morgan: Yeah, and that is a, that is something that a lot of people will actually believe. And then when they sort of sit down and look deeper, they actually realize that, Oh actually it doesn't really behave that way. And if I bought, if I buy wisely now I'm going to be better positioned down the track. And so therefore there's a lot of moving parts in, in your search thus far that I've sort of just thinking about in terms of what I'd like to talk to you in more depth about. So fundamentally what it, like I say, I haven't found out a good analogy for these, but you know, it takes a village to raise a child. You often hear that and it sort of takes a village to buy a property, right? So, and what I mean by that is that, so I'm a buyer's agent, right?

Veronica Morgan: I can advise you on property selection, what it's worth, how much you should pay for ahead and negotiate for that, all that sort of stuff. How to handle auctions, et cetera, et cetera, et cetera. But there's, there's a lot of decisions that get made and the whole lead up to buying a property then when you own it and then down the track when you sell it as well. And so anticipating what a lot of those could be is very important to get you, you know, to make sure that you're getting good advice from a lot of different sources. So that whole journey and you did mention that you'd been dealing with a bank for instance and sometimes, and you also mentioned that you told the bank what you wanted to get financed for and they've come back to you saying, well there you go.

Veronica Morgan: You can be pre-approved. Sometimes. a broker can actually add more value and this is not pissing the pocket of if Chris, by the way listeners, but this one, the reasons I do like brokers is because brokers can advise on borrowing strategy and they can also ask a lot of questions about the future and possibilities as well. Because maybe for argument's sake, depending on your financial situation, this might at some future point become an investment property or it might be that you renovated or there's a whole bunch of possibilities and if we anticipate at the outset what some of those things could be, you're going to have a greater understanding of, of making sure you structure it right at the outset. But also in terms of the property search, we're going to have an under a better understanding about what the possibilities are for the property search.

Veronica Morgan: So that's just one example of where getting advice, the right advice from different quarters throughout a property search or property journey is very important. So that's the very first thing I'd be talking to you about is there, I'd want to make sure that you had a full understanding of what your capacity was because once you know exactly what your capacity is in terms of total borrowing capacity, then we can find out exactly what you want and that is current wants and needs in terms of lifestyle and and actual accommodation, but also future wants and needs in terms of schooling, in terms of how many kids you planning on having.

Chris Bates: So do I need to go back to the need to go test my borrowing capacity before.

Veronica Morgan: Yeah, and that's not to say that you need to spend that money, it's because you need to fully understand what your possibilities are in terms of capacity before you go down the path of looking at property. And the reason I say to do it that way around and isn't so much to encourage you to spend more money, as I said, but the, it particularly in a rising market as we have now, you've touched on, you said you think now might be a good time to buy because the prices are moving. And unfortunately, you know, I hear alarm bells with that because it's like really 2018 was a great time to buy. It's just most buyers were sitting on their hands waiting for a good time to buy. And it's like the good time to buy is when nobody else is. Now prices are moving again. And of course everyone said, Oh, it's a good time to buy. It's social proof. You know, we look around and we are encouraged by the fact other people are buying. And so that's a dangerous time for buyers. So in this particular instance with you, you know, you've,

Chris Bates: But I can't wait any longer, cause you know, that's gonna miss the market, right?

Veronica Morgan: Well exactly what I mean is you sort of left the best time to buy a little bit in the past. So the best time to buy is really when you are ready to buy. And then it's about finding the right property. But first of all, before that we, so in order to, so you're not chasing the market, let's sort of get you fully understanding your capacities so that you don't think go out there and do what so many other buyers do, which is basically starting one Serb suburb. They're looking around, they go, Oh I can't really get what I want for 1.3 I'll look at another suburb and then I look and I think I don't really like that suburb. Go back to the first sub, you're doing this sort of zigzagging thing that happens and by that time prices have risen. Then you go back to the bank and you actually get more money and you end up

Chris Bates: Prices have risen because it's taken me cause prices are rising and it's take, I've gone to one suburb that's just not nor sure what I can get and I'm taking the timing issue.

Veronica Morgan: It will take years. Sometimes doing this is process can take years and particularly if the couple isn't completely on the same page as well, because what often happens is you've got one who's doing all the research and they really up to date with what prices are and the other one isn't necessarily up to date. They go and look at property go, he kidding me on not paying that for, that's crazy. The market's insane. I'm not buying, you know, so there's this sort of stuff that goes on in the background. So in order to circumvent that

Chris Bates: That does, I'm heading in my family. I'm the one who's looking at the apps all the time and I've got the notifications. Our wife doesn't say decides on the baby, not, this is not stereotypical at all. I can't hear you completely the other way. And I've got lots of clients who, you know, it's the other way around. But yeah, you know, one party generally is the more actively engaged person and he's also carrying a lot of the stress of that essentially the decision because they're investing so much time and energy into it that they really want the outcome because they've researched their partner as well. And then the partner might be enough at this recently where you know, I'm pretty sure that one party didn't want to buy the property and one did. And it was complete mismatch. 

Veronica Morgan: Did they buy it?

Chris Bates: Well they bought, they bought it and you know, it was a great investment and you know, it's a great thing, but you know, there was one party that potentially wanted more than what they got and the reality is the market couldn't do get that and no one wanted to take action and one, wanted to wait and try to get the perfect property. And and so that's, it's a real problem when you've got two parties and one's doing the research and one's not doing the research because it just can take years. Well, that's until they go to five, auctions get blown out. And then the other person businesses, I've got to get involved here. I then I get to the shock that they can't get what they want.

Veronica Morgan: We had, yeah, numerous times in my office over the last boom that we had. People met couples like that and yeah. So that's.

Chris Bates: What they do is they leave the market,

Veronica Morgan: They do their, they go in the foxhole and then they disappear and then they come out and they go, Oh my God, now I'm going to go on a pump. Whereas before I could have bought a house for argument's sake, or I've got two bedrooms less than I was going to get, or I'm not in the suburb I want to be in or will this happen?

Chris Bates: Originally last night I got a pretty horrible text, actually. She thought she'd bought apartment. You know, it was told by the agent that she'd got it come to our office. And sign the contract. And went and signed the contract they, you know, pushed around for four or five hours, said, ah, I know we'll come back to you can't get waste of time. And then said, Oh, we've got an investor's paint, it's going to give us more. And then went to a silent beating war. 

Veronica Morgan: So we jumped, we jumping around a bit.

Chris Bates: As an example or shift back. But you know, that was just an example where, you know, the know I just completely didn't know. Right.

Veronica Morgan: Well that's, that's a classic example of being completely and utterly out of depth and not realizing you're at a depth until you're already swimming. And so it's as like, I use the analogy of you know, I run on the football field, not that I've ever run a football field, just quietly, well, I mean I was a kid, but you know, I went on a football field, I think I'm playing rugby league and I suddenly look around and there's all these weird stuff going on with the ball and I'm like, Whoa, there's a rules that completely different. I find myself actually playing AFL and I don't know what I'm doing. The balls are different size and shape and you know, and they're, the rules are different and that's a bit what happens to buyers when they go into this negotiation thinking they know what they're doing, thinking they know what the rules are and then they suddenly discover and it's too late cause it in it and they thinking under pressure. And that is when they make terrible decisions and panic decisions. And horrible. Anyway, so let's rewind back.

Chris Bates: So, I'm going to get back to the broker. I'm going to figure out what my borrowing capacity is, but I'm also probably going to find out my repayment. It's the difference of what the repayments will be on those high mortgages.

Veronica Morgan: And you should be, you know, with your broker as well, talking about things like buffers and talking about ways to, to give yourself you know, protection against unforeseen things or having another baby or those sorts of setting itself up so that you're not actually backing yourself into a corner financially. And that's what a good broker will be able to have those conversations with you.

Chris Bates: Okay. So I had this conversation with a pro. The bro said, I can borrow one seven mm, that's our max. You don't want to of course spend more than three, but yeah. Based on our incomes and our deposits and that still gives us a buff, are we, you know and he also said we should potentially go for a LMI or 

Veronica Morgan: Lenders mortgage insurance

Chris Bates: We can get a bit of a discount on that because I'm a CPA or a you, et cetera. So, but we've, we've found out that we can borrow more and potentially the repayments aren't much more than we thought they were going to be yet. We could still afford it, but we still want to kind of spend maybe that one, four, one five. Yep.

Veronica Morgan: And that's great because the reality is now you've got a clearer idea of where you can push yourself to if you find the perfect property. Right. So let's, let's go through the process now that you've got that clarity and say, well, how do we educate you so that you can make decisions on where you should be focusing your property search? And so the very first thing that we will take all of our clients through and certainly a search client, we offered various services. So let's just talk about search for the moment.

Veronica Morgan: And we offer this as a standalone service as well. This, this onboarding process if you like, but we also, it's, it's fundamental to our search and that is, we call it a getting started session. It's very boring name. I get that. But you know, it does what it says in the tin, you know, gets you started. And what we want to do, we want to understand there's three PS in every property search, right? There's the price or your budget, there's the property itself and then there's the position or the location, right? Three P's. And this is something that absolutely crystallized to me when we were filming the show actually, because every single time you'd actually come up with these three issues, one of those PS is going to flex more than the other two. It's always the way, it's like the human condition of buying property.

Veronica Morgan: No one can get everything I want because the more money you've got, the more you want. So it's just this, we all striving for a bit more than what we've, you know, what we've got in our bank account or what we've got it at a accessible in terms of money.

Chris Bates: So I'm willing to be flexible and one of the three or is the property's willing to be like,

Veronica Morgan: No, this is you. So this is you finding out the discovery sessions so that you will actually through an educator or be educating you as to what the possibilities are for your search so that you can actually determine yourself what you're prepared to team most flexible on.

Chris Bates: So what are you going to ask me that can figure out which I'm going to be flexible.

Veronica Morgan: There you go. So, and it's also, you've got a wife as well here. So we've got tools you, hello? It's very nice to meet you one on one. What I want you both to do, I want you both to feel in a full property wishlist for me and I'll give you this to fill in, right? Sorry. And both of you grab a glass of wine each separately, fill this thing in separately. People who cheat and, and you know, I think you should go and separate rooms. I don't think you should talk. I think you should.

Chris Bates: Actually Is the wine helping the situation.

Veronica Morgan: The wine definitely helps the situation. If you're a tea toast, I'll get yourself a lovely cup of herbal tea, but sit down and go through, because there are wishlist asks a whole bunch of stuff about the property, about your lifestyle, about a future, all those sorts of things, right? So what we will then do.

Chris Bates: When you say lifestyle is that things that was, I mean I understand the property. You may have any bear James and maybe light and et cetera, et cetera. But the lifestyle, wha what sort of questions you ask,

Veronica Morgan: How do you get to work? What do you do on weekends? You know, where do you family leave? Like schooling or all those sorts of things. Because, because when we get to the P the position P and we have a systematic way of going about this, but when we get to the position P, what we then thinking is, well, if the budget is fixed right, which it is for many people, if the property requirements are fixed as they are for many people, then they can't in and they can't afford those what they want in the suburbs that they really want to be in. Then we have to look at where else will you enjoy living, where you're more likely to get the property that you want for the budget that you've got.

Chris Bates: So that's interesting. So let's say we want a you said, you know, after a discussion with my wife, and sorry, she's been a bit quiet here. She's not saying too much, but she, we've agreed that we're going to go from one, three, two, one five. That's our absolute limit for the perfect property. And we do want safe four bedrooms because yeah. Or it can be three if it's potentially, you know, we could have a spare bed, you know, in a, in a second living room or something like that. But yeah. So what, how would, how would you then kinda, we've got, we've got the property per se and we've got the price.

Veronica Morgan: Well, what we're going to do, what, want to know what one, what I want to know is all this stuff about you, right? Then we go away and we research recent sales because at the end of the day, the most compelling evidence for you is going to be what actually has sold, not what's on the market, not what the agents are quoting now. You know, but what has sold very recently. And so the first thing we do, we look at, well look at exactly what you've told us you want. And we, and we look at both of your wish lists and sometimes there's immediate hurdles we need to discuss and tackle as well. But sometimes most of the time is, majority's is overlapping. It's just a couple of little bits and pieces that might be outliers. So what we want to do is say, well what could you have bought in the last say three months that has met your budget, met your property requirements and met your position requirements and look, sometimes there are few options there and sometimes there's nothing. And so that's very telling in itself

Chris Bates: How deep are you going on this property though, you're just looking at like three bedrooms in Killara.

Veronica Morgan: Well we're looking at what has sold in that area that according to what you've told us you want would meet your brief

Speaker 4: And are you double matching that for other things you wanted from a property. Like we wanted a second living area we wanted. Yeah, so you're going quite deep to make sure that, yeah,

Veronica Morgan: Absolutely. So we see how many met you requirements and if it's nothing then, well the wig would have a conversation about that. And if it's a lot, well happy days, but it's very unusual. Usually there's a few but there's something wrong with them all and didn't like them or whatever, you know. So we were going to look at that first. The next thing

Chris Bates: Finding that too is why those potentially, because we have looked and there are properties out there that are dead boxes. Are you then explaining why potentially they cheaper or why they're not great investment?

Veronica Morgan: Absolutely. Yeah. And talking about the pros and cons because we like our clients to make decisions with their eyes wide open and so that means an educated client makes educated decisions. So sometimes people do decide to buy what we would term a B or a C grade property. But for them it makes sense. And then we've got to be extra careful obviously on the price they pay, but they've got their eyes wide open. They're making very clear decisions, was very good reasoning. Right. 

Chris Bates: Let's say we found something, you found some properties in a, we've got the properties out, then there are properties out there that have sold. Are you potentially going to know the backstory of why they potentially sold for a good price?

Veronica Morgan: Yeah. And I might've just been one, one, you know, unlucky buyer, you know, that's, and sometimes too, can I tell you, buyers hang their hat on one property that's sold that was a bargain and it's like that was the one and it's gone and it's never gonna happen again. You know? So sometimes, you know, you can fix site and God, but I'm waiting for the next one. It's like you can be waiting a long time. He might be waiting another lifetime.

Chris Bates: Yeah. I mean that definitely has happened to some clients where they they've seen one property sell within an area that they want to buy. That property is sold and then that's given them the confidence to go out and buy. So then they've got an entered the market, but they're not the only one thinking last night, you know, that's also wow. We can buy in the suburb from the two mill, let's call it. I think it's six people all thinking the same thing. And the next auction comes around and sells it to one. Oh, it must be another one comes on and the next one sells it to one five. And everyone's still thinking about that one property and time's ticking over.

Veronica Morgan: That's, and that's the, that is it does happen. So what we want to do is take you through, okay, so we looked at what has matched your brief. If anything's much too brief, then we're going to say right now, let's just for a moment suspend our understanding of your budget. What I want to do is show you how much money you need to buy the perfect property for you. Cause we need to get this on the table. And this is number one very confronting, but it has to be done. And so you don't want to spend 1.7 either, even though you can. Right? So we say, right, well.

Chris Bates: You take me to you taking me to these properties.

Veronica Morgan: We showing you online. We're looking at them online, they've all sold, you know,

Chris Bates: Have you pre done this research?

Veronica Morgan: Yeah, absolutely. This is all been pre done. So we sit there and vary over a two hour period. We'll do this. So we look at how much do you really need? Now, for some people, this is all they need to understand that they need to go to the top of their budget because they can see very clearly that if they do, they will get what they want, right? Other people don't have that flexibility of their budget, and so they have to basically realize that they have to, you know, it's very painful, but they have to actually realize to stop chasing a dream, it's never going to happen. You know,

Chris Bates: What are you going to do today? Let's say, well, I want something at one eight. Yeah, we're going to tell me that I'm going to need to lose that third bedroom or, and we'll

Veronica Morgan: Go, okay, well let's park that for a minute because you can spend a long, a lot of time with your 1.7 budget. You don't even want to spend because you only want to spend 1.5 and yet I've just shown you the perfect property. So 1.8 that means the next time it comes on the market, probably 1.85 anyway. You're chasing the market and you don't actually have that budget. And I know this is a really hard conversation to be had and I'm sort of a bit gentler when I'm face to face with you know, I'm a little bit harsher with you right here now, but I mean, but this is a, you know, it, there's no point pussyfooting around these because if you, if you don't accept and acknowledge this, you are going to miss the market. And that is more painful than sitting in a room with me or one of my team and having to acknowledge this stuff, you know now because we can move forward and actually do something positive from now on. So,

Chris Bates: So you're getting it, you're getting us a lawn before we're searching? Yes. Okay.

Veronica Morgan: Yeah. Haven't even moved on. I've got two more things to talk about. We've got property itself, so we'd say, okay, budget. Okay. Are you going to extend your budget? No, I'm not. Well now I can't. Right. Okay, good. Well, let's look at the property itself. So you've said you want four bedrooms, here's what you can get with three bedrooms. And one living area and they're within your budget, you know, or you said you wanted 500 square meter block of land or these ones are three 50. They're within your budget. Or you said you wanted a three bedroom, two bathroom house with parking. Well they're outside of your budget, but there are townhouses in the era that a three bedroom, two bathroom with parking and there's a bit of outdoor area and they're within your budget. So I'm looking at the actual property itself or I might say, well, you know what? You said you wanted a three bedroom, two bathroom and parking with all these outdoor space. He's a property that is two bedroom potential for renovation down the track. You know, you're on a career trajectory, you expect to earn a lot of money down the track. You, you might be in a position where you can actually add value to this. Would you be prepared to look at that? So we will go through those alternatives for you, that keep you within your budget and in the area that you want to be in.

Chris Bates: And would you then tell me which one is potentially the better investment decision there as well? '.

Veronica Morgan: Well, we would discuss that, but that doesn't always factor into the decision making of an owner occupy.

Chris Bates: But I haven't, like I can't go the two bedroom option because we've got another one coming. And for example, I'm a con or I kind of, I think I'm going to quit my job and I'm going to start a business and that's going to take us a few years to get borrowing money. So I can't do the renovation options. So you know, but you know,

Veronica Morgan: We do discuss that with clients who've got to understand if they've got an upside to their income earning capacity down the track. And if they don't, then obviously we don't send them down the path of buying something to renovate cause they gonna be stuck in it. Whatever it is, they gonna be stuck in that.

Chris Bates: Yeah, I think that's a it's a definitely a wishful kind of Rose colored glasses thing. I can't afford the renovation in the future. And you've gotta be certain, I've got a client at the moment and got a terrorist in Paddington. He's got money, he wants to buy an investment property. And I don't know. He's, he's single dating someone, but you know, it doesn't, who knows where that's going to go. Right. You never know in life. And, but he's potentially, there's massive upside in the reno just because it'll transform the property and increase the value. So it's great bang for buck also works in the industry. So he's known how to get it cheaper and do it. So we can't sacrifice his reno at all. So, and so if we go and buy an investment property and that then uses all these cash for the Reno and then he can't do the reno on a couple of years and then he has to sell the property where we should live playing changes. He's kind of wish he did the Reno. And so, you know what I mean? Like it's, it's a, so you've just gotta be careful of really understanding that you know how to afford the Reno.

Veronica Morgan: Yeah. And look, so many. Look, genuinely, people will underestimate what it costs and they'll overestimate their own ability to get it done.

Chris Bates: Go and get a quote on there and then know that fixed building prices aren't fixed. I mean, five, six years ago, $4,000 a square meter, let's say. Now there's seven.

Veronica Morgan: Yeah. And not only that, but you've got a lot of on costs as well. I mean, I'm, I'm literally three weeks away from moving into my house. I've been renovating it now since June. It's a massive rebuild really. And you know, I'm very, very excited by it, but even I have budgeted very tightly, there's been a couple of two on unforeseen issues both in subfloors, so that's okay. But you know, I sort of knew that there may need to be a tackle, but that's at a sort of probably 25 grand. But then you add on, you've got to add on all the landscaping or the external stuff, you know, I mean, there they are additional costs that often, that people don't factor in. And, and there's all the consultants fees as well. So it's not just the actual build, but you know, back to, you know, so we want, what we want to do when we're looking at that property P if you like, is, is really what level of flexes there on the property itself in order to stay within budget and within the area that you want to be in.

Veronica Morgan: And look for some people that is the decision is the, you know, it's the ultimate property versus position, you know, property versus location. And for some people it's like, no I can't, I cannot you know, give up on anything, you know, anything in terms of the accommodation of their property, a car, I need it and I need it now. In which case we say it right, the budgets, fixed property requirements are fixed. Now we need to look at the location or the P position, the position P of the three piece. Right? And this is where you can't have it all. I hate to tell you. So, so

Chris Bates: It's interesting though, cause people do go two ways. I've seen this as well. Like, yeah, the price is sometimes inflexible because the borrowing capacity savings and you know what it is what it is. So I'd love to spend two, but I can only borrow one for let's say, or whatever it is. But you're right. Like it is going those, those two are flexing. I may that potentially moving further away from where I'd ideally like to be. And then potentially sacrificing my time for commute and potentially my friends. Yeah. And then having to remake friends and networks, new gym and all these sort of things that I've got set up to reconnect to a new community. That might not be people that I'm used to and different set shop, but I still get the house I want still big or whatever size. Oh. I'm potentially having to reframe and maybe going and considering moving into an a bigger apartment, first time, more townhouse or et cetera. Thats a valuable,

Veronica Morgan: What's a continuum? It's a continuum as well. And some people are very, very clear as to what they're prepared to do. And some people are still even at the end of the session. So we will, it's why we need to understand your lifestyle. And obviously because you know that Tim, PLU, people like us, well, you know, we all do. We want to be part of a community. We want to, we want to settle into an area where we can be part of it and we can belong and that connection. And so that's really important. So we're, what we're looking at is, okay, well where else can you get that? And so that's unique to everybody. I mean, and we'll often send people on homework afterwards to go, right, go and check this area out, go on, sort of get a sense of the community, get a sense of the people in the area, the parks, the dah, dah, dah, what did the cafes, whatever you know is important to you.

Veronica Morgan: And sometimes we, our clients come back and say, don't send us back there. That's so off base. It's not funny. I'm like, okay, cool. We know that. Now we know that. And other times I go, Oh my God, I had no idea. That's actually, you know, that yes, I really liked it. You know, and so once we've got that, we can start working on, okay well let's look at in more depth in terms of that area, but we never give up on the ideal area as well because you never know one of those, you know, total fluke, smart happen and, and, but you know, if that's 10% chance of happening versus 90% chance of happening in another area, we've got to look at both and see individual buyers can't cover that sort of spectrum. They can't, there are the looking in the area where they don't really want to be wishing all the time. They could find something in the area they want to be and that's going to stop them from buying or they're looking in the area they want to be in. They're always priced out and they're getting knocked out at auction constantly and it's stopping them buying where they can afford. And so I love that

Chris Bates: Percentage thing cause you know, that's the thing I see. Exactly. You know, there is a chance it's not not going to potentially happen. And, but it's not put in a percentage term or likely hood. And so it's cause it could happen. We should just try. But what the reality is, is unlikely to happen. And so what's happening is it's time's ticking, they losing out and then over time generally that odds are getting lower is the budget is not going high. Right. And so the, you know, what was already unlikely to happens now almost impossible. And then they start to shift and then they go to the other suburb and then it's unlikely there and things like that. So I do think, yeah, yes, keep shoe shopping in the market that might happen. But lease be having plan B underway before plan a sort of, yeah.

Veronica Morgan: And look, a good buyer's agent is going to coach and guide you through this process. And I have to tell you, I, I, I'm not, not all buyer's agents are capable of doing this. A lot of them are very transactional. You tell them what you want, how much you want to spend. They go and find it for you and then they bully you into buying it because they go, well, I gave you what you told me you wanted and they haven't explored any of this stuff. And it really needs to be explored because it's not just for now, it's for the future. And often people, particularly when they've got kids at different ages, they don't actually know what's next. They don't know that things are going to change and their priorities are going to change.

Chris Bates: So would you say, I'm interviewing a few buyer's agents, I'm not just, you know, always just got the gig. I mean online, I've got a few referrals from people that my mortgage broker send to me, some person knows and et cetera. So do you think that's a real good litmus test as well? Is the buyer's agent asking me the sort of rule 100% property question.

Veronica Morgan: Or lifestyle goals? It's, it's so much more than just buying a house or an apartment because if you just focus on buying a house or an apartment, you've got a high probability of buying with regret.

Chris Bates: So the elephant in the room is 100% for you.

Veronica Morgan: The reason that Chris and I do this podcast is because we passionately believe that property buyers can do it better. We really want to help all of you understand all the risks, but also the ways in which you can avoid your elephant making the decisions.

Chris Bates: But what we would love for you to do is just to share this episode and share other episodes with people around you that are going through the property process.

Veronica Morgan: Give us a review on iTunes. Five-Star, please would be very appreciated because this is about making sure that we all benefit from the wonderful information that our guests have been sharing with us.

Chris Bates: Experience was, I mean, do you think there's a minimum sort of years that someone needs to be doing a Basel? I know that you know, I've seen there's lots of popping up online at the moment doing it two weeks. I know it's easy to say this when you've got the experience that everyone needs, experience, stop giving the new people that starts. But what's your view on, for example, someone who's only been a buyer's agent for a couple of years, whether they've actually got the runs on the board? Well, I'm going to put it out there right now. I'm actually recruiting at the moment, right? So anyone who wants to, anyone who is a buyer's agent or a real estate agent that is interested in working with me, reach out info@gooddeeds.Com.Au You, but that's not why we're doing this. But I just thought I'd put it out there.

Veronica Morgan: One of the big challenges,

Chris Bates: We don't do any advertisements on this podcast.

Veronica Morgan: I'm sponsored by good deeds this episode, sorry. One of the big challenges for me when recruiting buyer's agents and I've resisted recruiting experienced buyer's agents in the past. Mainly because, you know, you've got to unlearn a bunch of bad habits. And same with sales agents. You know, mind you, I haven't S not to say I haven't recruited sales agents. In fact, in a way I prefer someone to have been a sales agent because they understand the other side of the equation that invaluable. But they've got to unlearn how to, they've got unlearn to unlearn trying to sell a property to a client. Right? So that's a very important thing. And the other thing that a lot of sales agents believe is that all property is good is just the price. And it's not true. And I believe that until I became a buyer's agent and really sort of applied much more critical thinking.

Veronica Morgan: So the real thing, and the problem is of course we're saying, Oh, how much experience DNA does. It's like you could have one year's experience 20 times or you could have 20 years cumulative experience or two years cumulative versus one year times two. It's the layer upon layer upon layer of, of really deepening that experience that makes the difference.

Chris Bates: But let's say it's a one person band and they've just started to get into the industry and they've got, don't go, don't go with them. They've got no guidance. There's no one there watching them. More training danger.

Veronica Morgan: Yeah, unfortunately that's a problem is with our industry, it's a low barrier to entry. It has been the education do you do to become advisors. You get a license and that's it. Now he's changing and new South Wales but it hasn't changed yet. So therefore you can go and get a license without an experience and you can actually become a buyer's agent and start working with.

Chris Bates: How fast could you do that?

Veronica Morgan: Well I think the quickest is five days or something.

Chris Bates: Um so just, I mean, so that's obviously an issue and that is creating more people to answer cause I think it's become a cool job. Buyer's agents.

Veronica Morgan: Yeah, it does seem to be,

Chris Bates: I think there's a, yeah, I feel like there's lots of people just becoming buyer's agents. They're popping up a lot.

Veronica Morgan: But as I like helping people and I like property and unfortunately, and I've done it myself and I build an investment portfolio, et cetera, et cetera, you know, look, that is extraordinarily dangerous. And 

Chris Bates: So what sort of places can I go to avoid?

Veronica Morgan: Avoid that? Yeah, look, the first thing I say, always look for a member of Ari Reb, a, that's a real estate buyers agents association of Australia. Now it's not a guarantee. It's not fail safe. Let me tell you. But you don't vouch for all Reba members. Well, I, I don't vouch for all buyer's agents. Let's just say it that way. The thing was, at least with rebar, you know, and I used to be the vice president, so in, in, in my time when I was there, we actually, we put in place a learner membership category and we also come in for the provisional was there at the time, but we made a distinction between provisional and and sort of full members a much clearer. And so it's actually a way for people entering the industry to actually getting into a community of least exclusive buyers agents who are not taking commissions and kickbacks from other sources. And that, that that's really important that you have to pay the buyer's agent yourself. Otherwise somebody else is paying them, which means that their,utheir loyalty is not 100% to you. Right. So that's an important distinction.

Chris Bates: While we've done over a hundred episodes, sometimes I think that you, it's just this morning I've literally got a email from a client or not really a client. He's not a client yet, but you're saying, you know, what's your thoughts on buying a property in super? And I'm a bit unsure about you know, buying this property and, you know, they think it's other financial planners trying to sell me into this new development. And he's, he's already listed the reasons why he's feeling nervous, but I could already sense he's, he's already made the decision. He's buying it and he's asking me to validate the decision and I'm like, no, it's not a good idea. And it's like, it's like he has to be, Oh, that said, even though people are aware that they're getting sold to, that someone's getting paid there where the commissions are there, they still signed the contract. So, you know, it's just an, if you go into a buyer's agent and they're doing this and they say that I, and I've heard this, I've had buyers agents take me out for coffee.

Chris Bates: And say to me that they do some new and they do some old, I do somewhere, I get the developer and I get some paid when it's new and I do somewhere I go and buy established property and you pay me and I do both. Yeah. That is not good enough. It needs to be where you pay me a fee and I'll go and find you a property or I go, I'm a spruiker and I'll go sell developments and things like that and get paid from developers don't fall for the buyer's agent that's doing both. It's just not on.

Veronica Morgan: Definitely not. And look, the thing is too is that I think what really annoys me with that is that it's the client that doesn't want to pay as well. You know what I mean? So it's sort of like they're signing up to get sold to and, but anyway, that's another issue.

Chris Bates: Yeah. But it's a good point. So REBA is, I think definitely I'll go check out REBA. Yes. Sorry.

Veronica Morgan: So Rieber is sort of the, the other hurdle that I think you need to get, make sure that anybody is a member of Reba is a very first hurdle on that. And the reason is, first of all, you know that they're exclusive buyer's agents. They're only getting paid by their clients and not by anybody else. Ubut secondly, because at least they've got a willingness to be part of something that is,uyou know, not just being a one man band trying to fly by the seat of their pants is a willingness to learn. It's a demonstration of a willingness to be part of something. And I think that that in itself is a really good thing. Thirdly, you know, they've got tiered membership, which basically means that you don't become a full member until you've got at least two years practicing experience. Now, once again, you know, two years in terms of hiring a buyer's agent or I'd really want someone with a hell of a lot more experience in two years.

Veronica Morgan: Particularly if they're a woman band. And obviously I've had people in my team that, you know, have been working with clients after two years, but people are in my team. They spend a lot of time learning everything before they actually let loose on a client. And then even then, I'm very involved in that whole you know, recommendation process and due diligence process, et cetera, et cetera. And we work as a team and we keep each other, you know, on track there. And so we really help collective learning through that process so that our clients benefit from that. Now that is, that is not commonly utilize it on the same, the only buyers agent that would do it that way. But I'm saying that we're a small group.

Chris Bates: Yeah. So let's say we we get a rebar, we find a good buyer's agent and we know they're not taking commissions. I mean, I think we did a lot of work there around the search where, let's say you've, we've gone out when they are shopping for properties, like where are the values after, where's the value after that? Where are you going to help me as a customer? Really make sure that this is the right thing for me. I guess,

Veronica Morgan: Look, it's finding the property. So if you sort of go through the whole process, you know, we start with the potentials or the possibilities I should say, the possibilities is, is really that getting started session and really understanding that you're making sure you're looking for the right property and the right place for the right money, right? So you get that established. The next thing is going through the potentials as well. We love peas as you can tell. So it's actually looking for potential opportunities.

Veronica Morgan: So we're looking on market and off market. So the reality is that a buyer's agent with her with research and capability and that, so I've got a researcher in my team we are constantly looking for what's on the market. We're also constantly looking at what's not on the Mark or what's about to be coming on the market. And so we're constantly talking to agents, et cetera, et cetera. And so we really draw, you know, beating that drum.

Chris Bates: I was to, I can do that myself though. Can't I can call the agents.

Veronica Morgan: You can do whatever you want yourself. You can do all this yourself if you want to, but if you have a full time job, you're going to find it difficult. You're.

Chris Bates: Am I actually going to call the agent and say, you know Johnny, I called you last Monday. Yeah. You again. You know, I find that, you know, even though I'll say I will, life takes over. Yeah, exactly. Secondly, Johnny doesn't want to ask my court now.

Veronica Morgan: He doesn't want to answer your Call.

Chris Bates: But he will answer your call.

Veronica Morgan: He's more likely to answer ours and he's to answer yours. Yes. 

Chris Bates: But is Johnny going to tell you that amazing Johnny as the agent, but is he going to tell you whether there's a pre-market coming up? Would he tell me about the premarket.

Veronica Morgan: Look, Johnny will tell the squeaky wheel, right? So if you're a buyer who's a squeaky wheel, yeah, he was going to tell you if he knows that you've been the underbidder, it's something else. He will tell you. Or she will join us. Johnny or Joanna.

Chris Bates: But what if he doesn't know , you could think I'm a bit of a punch on the street. He could be annoyed by you. I might tell you.

Veronica Morgan: I mean there's lots of reasons why they wouldn't bother telling you or they just don't remember you at that point of time. Someone else's called them and then, Oh yeah, I'll tell you about it. So different agents have different sort of approaches to that. So you know, if you, and if you don't like agents then you're going to hate the process of trying to find out what's off market because you have to make them your best friend and you have to let them know that you're not a tight talkie. You're not a time waster. You are ready to buy. You will act when you find the right property. This is it. There's a lot lot in that.

Chris Bates: But the problem is you want to do that and I going to tell them too much.

Veronica Morgan: And then you got that. So all, sorry. They know how many you've missed out on that. I had desperate. You are. And they absolutely 100% know which buyers I can push harder than others, you know? So all of that goes on those agents, that's what they're doing day in, day out, you know, that's their job. So with us, you know, where there is a bit of a buffer and a protector and as sometimes the agents get a bit frustrated by that cause I much rather be able to deal with the gullible bar directly. But at the end of the day they want to sell the property as well.

Chris Bates: So what are you saying to the agents around us? Are you saying that you'd mentioned our budget to them or are you saying like, well how are you telling them that you've got a really good buyer? Like how

Veronica Morgan: It's the thing, you got to tell them your budget because if you don't, they're not going to tell you about the property that you could afford. So you know, there's no way out of that. Yeah. But then the next thing is, Rob, that's great. You've told me now I'm going to work out really what it's worth. And then our client's going to determine, well what's it worth to them? And so there's a whole process that we go through, which is there's no shortcuts in working that out. I have to tell you, that is a very, very library intensive part of the process for us. You know, so finding it is one thing, then you go through the whole protection process, which is all the due diligence. But pricing is very, very important. Working out whether it's got the potential to be an above median capital growth performer or not.

Veronica Morgan: So really looking to the future, I'm not predicting what it could go up in value, but how it will perform relative to everything else. That's really important. That's something most buyer's agents don't discuss. And most of them don't have a framework to even measure that when we actually do, I have developed a tool to help us they should that. But the thing around the pricing, you know, you have three types of buyers agents, right? You've got the first type will press a button on RP data and spit out computer generated price. And we've had many conversations around how algorithms are really unreliable when it comes to trying to work out what what price you should pay for property. And I'll tell you, there are buyers agents, many of whom are sparked, I speak to irregularly who they do exactly that. They've got a subscription, they press a button and that's what they give their client, right?

Veronica Morgan: That's lazy in my view. And dangerous. Well, it's dangerous and lazy and also that's what you sort of going to get with the cheaper buyer's agents because they're not going to invest that the time and the expertise and the knowledge, et cetera, et cetera, to really arrive at a very well considered price recommendation. So that's a false economy. The sick, you know, I say you could save yourself a few grand and you could pay hundreds or 50 or 20 or whatever, a lot more than you need to. The second type of buyer's agent is one that actually engages in external value or every time they evaluate a property. So that once again, they usually a less expensive buyer's agent. But then to change every time you evaluate a property, the bill goes up because you have to pay a value on,

Chris Bates: Sorry. I mean the value as a, you know, bless them and I'm pro, hopefully this from valuers was listening to this, I got to do a great job, et cetera. But you know, they're not probably coming at it always on the most a realistic price and they're probably not buffering in the emotional or at least being able to tell you what the emotional element is here as well. Like, and it is a price. The prices, are they really going to spend enough time really going through a lot of comparables and putting enough disciplining, actually figuring out what this is really worth or are they just going to get their two 50 and move on?

Veronica Morgan: Well, see, in my view, yeah, you have to pay thousands of dollars in order to get that type of valuation. And that's the fictive really what you get when you engage us. We, and there are other buyer's agents out there that do what we do. But I have to say that, you know, once again, it's not the majority. We go through, we don't just go, I want one inferior, one equivalent, one superior. We want to know everything that's sold in recent times. And if there's not enough information in that to give us a real confidence in what we recommend, then we need to go further back in time and adjusted according to market conditions. And there's a lot of work involved in doing that. Or we need to go further a field and look in surrounding suburbs. And once again adjusted according to the location and there's a lot of work in that.

Veronica Morgan: And then there's a lot of understanding of the backstories of these properties and why one might've solved for that. And that one didn't sell for that. And just yesterday I was on the phone to agents, I'm on a property on pricing at the moment that going, well, you know, that seemed like a cheap price. Why was that? And then I'll get the back story. And because I know them and I speak the language and I am an agent, they'll tell it to me, you know? And that's invaluable information. Cause then that goes into understanding really where that property is likely to sit in the current market. And then we go through a process of helping a client determine, okay, so that's, that's sort of the scientific part of it. Now what about the emotional part? How does that play in, you know, what's the subjective elements of you determining what you should prepare? You know, what you should be prepared to pay for for this particular property. And so, you know, so we take our clients through that as well. So when you get to the point of negotiating, you have tested that limit, right? You've tested it when before we go to auction, you've already tested your limit. We have, we've dry run in, we've had a dry run of it, you know, so we want you to feel the fear of missing out before you actually feel the fear of missing out.

Chris Bates: So before we uh make an offer to the agents, we figure out what, how do we test our limits of, you know, let's say I haven't engaged a buyer's agent. Amazed. It's very good advice, right? Like if you're going, well, I you know, I want it for one, for this tribe is that it's not a good idea cause I've already inserted negotiation. So what, so what are the things, you know, I guess, how does a buyer's agent really, you know, be that independent party?

Veronica Morgan: Well, once again, I've seen buyer's agents go to auction and you see it on the block, right? You see those, those buyer's agents bid on the block and you see them on the phone at the pointy end of the auction, still asking the client if they want to continue bidding. We're not naming names, but that sort of behavior. And I see it at real auctions as well. I mean, I'm not that the blocks on a real auction, they've actually, by buying these properties, but I see that sort of behavior at, at auctions elsewhere where they either the buyer's agent is pressuring their client. Do you go, do you want to go up? Do you want to go, Oh, you know, one more might buy it. All this sort of stuff. That's salesy activity, right? That is not having given your client really good guidance leading up to that point to say, okay, you've given me this limit.

Veronica Morgan: What if someone comes in with a $10,000 over that? Are you in or out? Do you wake up the next morning wishing you paid it or wishing you didn't or glad you didn't? If they go, Oh yeah, I'll probably would regret it then. Okay, we need to rethink what your limit is. If it's like, no, actually no, I'm really out hood with the established your limit. Because what happens is that, you know, you get that you're at your limit and then someone comes in one in $1,000 bid. Now what? I want to push it, I want to push it. Well, we want to push, push, push, push, push that limit and test it before you're actually in the auction because it's then you wake up the day after having bought it, regretting that you pushed yourself or you wake up the next day regretting it. Didn't push yourself when you should have. And both of those scenarios are not great outcomes, so we want to make sure that you, we've clarified all of that beforehand.

Chris Bates: So let's say, I mean, I, I really, I do, I mean a lot of, as a customer I really see the value in the auction. I think I, I, I go to auctions, I get scared. I don't want to do that myself. I mean I would want to have a crack at it if it was a bit of a game, but I know it's more than a game. This is my life. Sleep.

Veronica Morgan: Every listener should go back to episode two with Damien Cooley. You'd never get at auction without listening to that one.

Chris Bates: It's not our running timezone. Yeah. If we, and I get some tickets to it's a property here. So I get that. I do get the negotiation. I've seen there's value in, in that. Because I, I do think that you know, agents aren't really my friend. I can't really trust.

Veronica Morgan: No. But also earlier on you said, Oh, I'm pretty good at negotiating. I'm negotiating my job and I hate this a lot from clients because it all potential clients because of course, you know, I deal with the type of professional that often does negotiate. The thing is when you're negotiating with your own money, it's very different to negotiating in a, in a commercial sense. But also the thing is those agents know more than you do, right? You only know your own situation and you know, your own interpretation of whatever that agent has told you. What that agent knows is really what the vendor's motivation is really where that vendor will sell, where they should know or they've got a very good idea of it. They actually know how many other buyers are out there. Whether or not those buyers really have made offers or not exactly what those offers are, that agent, and that agent also knows what you've told them and what you've offered. So that agent has a hell of a lot more information than you do. So.

Chris Bates: And even still, I probably only have one. I could probably come up with maybe three ways of making that offer. I could email it, do whatever the fine, maybe I can go in there with a contract, the 66 w in a hard sell, but I don't really know what the vendor really wants. I don't know where the agent's at. So I've got my one strategy that I think is going to work, but if that doesn't work, I haven't got a plan B.

Veronica Morgan: Oh, so it might've worked last time you bought a property and then you think, Oh, I'm going to do it. Wait slightly separate.

Chris Bates: Maybe I should have went for longer settlements or maybe I should wait for lease back or these sort of things. Or I didn't really know that was even an option within negotiation. So which probably was the best strategy. So I didn't even have any tools in my kit with the negotiation. But what happens with when I fall in love with the wrong property or I'm potentially going down the wrong path out as a buyer's agent. Really help on that part of the conversation. Let's say my, my wife's in love with the property and I'm not,

Veronica Morgan: Yeah, well that's a challenge. One of the values in our business, you know, one of the ways we do things around here, if you like or KPI, we in my business, we don't have a KPI of how many properties you buy a month. And you know, from business perspective, people think, Oh, that's ridiculous. Fancy not having, having that as a KPI KPI on Abby's and sees, so how many properties did you actually recommend the client not buy because it's not what you bought weighs what you buy, but it's also what you don't buy. And there are plenty of times when we've, we've seen and heard clients justifying or, or people justifying while they're about to do something and you sorta just think really get a sense of that's not really going to give you the outcome that you want. That's really there's niggles going on in the back of your mind.

Speaker 3: Remember when we llaurna patton back in the 30s, I think it was, it was about the Neagle versus genuine fear and normal fear about such a big decision. So, you know, if there's a niggle we need to explore that rather than override it. Your off the plan, the superannuation guide, you know, that Scott is being sold down the down the path. He's got an niggles but he's not heating them, you know, so we've got to explore that. We've got to say, okay, well let's just pause for a minute. There are worse things are missing out on this property. You know, worse is buying it when it's not the right one. Even paying too much is not as bad as buying it when it's not the right one. You know? So there is so many worst things that can come from buying the wrong property and we want to be very, very careful that our clients are not going to buy and then have regrets, you know, so,

Chris Bates: So when you're feeling that there's potentially a niggle, you're going deeper and asking probing and questioning and or potentially if you've got two optimists opposition to super realist, see the balance going on a minute. Let's be really negative here. Yeah, exactly. Let's try to like work with it and make sure that, you know, it's the one thing yeah. Is everything. And I guess it's when we're looking at seven open homes on the Saturday, we're ruling out three that there's just no point even looking at, you know, because it's a potentially I mean a client literally it's wakes interested on a property and a referral from a client. They send us an address of a property. I was like, bang brought up the property. I was like Charlotte RP data. Type the property and not cause I wanted to evaluation.

Chris Bates: I just want to have some information on it. And bank seats on the market was hundred and 60 days. Is that warning sign, a massive warning sign. Right. And I was like, okay, well let's have a look and you can just price, but it could also mean it's crap. Yes, that's exactly. So yeah, you're right. In this situation it was been three agents has been true. So you know, di Jones had a crack, LJ hooker had a crack. Now McGraw's having a crack at it. So I'm like poor agents, right man hours. But they, cause they're fresh in the market and the situation had changed just recently. Yeah, through inheritance.

Veronica Morgan: So they are looking at a different prospects that they weren't looking at before where.

Chris Bates: They just weren't looking and then money's come and we can buy it and bang gone into the market seeing these thing cause it's cheaper and they've been offered promised a bargain agent's got a lovely backstory. Aged care going into the aged care. It needs to happen fast. So their thinking is the faster, but just by doing that RP data I found out was on the map for six Oh six days. I said, did you guys know it's been on the market for nearly two years? And they're like, Oh no. And so yeah, I mean it's just the sort of things where,

Veronica Morgan: And we're recording this in January. Yeah. At the end of January. And that happens in January a lot. You know why? Because people come fresh into the market after Christmas often haven't really been seriously looking in in the end of the year before. They might've got their finance ready, but they're actually had time. They rested, energize, like coming to the market and all the crap that's been sitting on the Marcus tiles sale stuff gets snapped up. Fresh eyes.

Chris Bates: Yeah. So I think there's, I mean, like you say this, hopefully this is helping people. I really understand all the different elements to the conversations with buyers. I just noticed that we really have, I mean, there's a few things that im going to, you know, these are kind of curly ones that I think I'll niggles for people stopping them engaging in. So I'm sure you've heard them all over the years before and you probably, you know, got pre-vetted answers to answer them. But I think it's important to talk about them quite openly and bluntly because there's some of the experiences I've seen for clients going through the process where potentially poor outcomes have come out, but also things that may be an issue that just need to be talked about. So fees, let's go there. Yeah. It's expensive. It is. And so like, is it really worth it? I mean, ha, I mean it's, it's a lot of money, you know, can I, you know, is it, you know, is it any luxury like the fees, I mean, can you explain how it actually works for a lot of buyer's agents and how much it is and why I should pay it?

Veronica Morgan: Is that, Oh, actually I'll include a link to a blog I wrote on this many years ago in the, in the show notes, which is about sort of, you know, how buyer's agent fees work. But just very broadly, there's sort of two camps. One is the fixed fee camp. I'm in the fixed fee camp by the way. Yep. And the other one is the percentage of your budget camp. Now I find the percentage weed because to be honest, that means the more you spend, the more you pay your buyer's agent. That's sort of a bit counterintuitive. So the fixed fee, a lot of our clients do come to us and say, well one of the reasons I came to you is because you do fix fee. And so it is something certainly that certainly buyers seem to value. I do it because I, I want them to understand that we've made a commitment and our fees based on, not on your budget, but on the parameters of your search and are complicated. It's going to be fundamentally, you know, time, geographical area and your knowledge and, and you know, there's this, there's a lot of elements that come into it, right?

Chris Bates: So that's why you break out your fee, I guess. And not in lots of somebody do do this under it, just a flat fee a year engaging me or it's not, and it's this or some will potentially break it up for search negotiation and tailored fee.

Veronica Morgan: Exactly. So how it's broken up can vary. And so typically, and some of the fixed fees, they just have a schedule that's based around budget, right? So it's, it's still fixed, but it's not about, it's pretty arbitrary in reality, it's just on your budget. As I said, well, we take into account a lot of, a lot of elements when we actually quote a fee. And so therefore we've anticipated or what's involved and there's less pressure on us to try to get you to buy quickly, you know? And so you will have buyers agents that do, you know, they do have very cheap fees, but there's, you know, it's, you've got to realize it's a commercial entity. If they've, they've quoted you a very cheap fee, then they're gonna want you off their books quickly.

Chris Bates: Yeah, that's mine. That's my next one. We'll go to that one. But I mean, just on the fees, in terms of

Veronica Morgan: The value.

Chris Bates: Well it just, I mean it's a lot of money but just is a lot of time. Right? So I mean, how many hours is there, you know, would you roughly think you spend for say a home buyer through the process? I mean, yes, some are lucky where you potentially, you buy fast but sometimes it can be very months. And that's the hard thing, isn't it?

Veronica Morgan: Well, especially in the current market is become very tough to buy. So I liked, I'll just give an example and I look, it goes all over the shop. I mean we do keep time sheets, but that's sort of in the back end. We don't charge an hourly rate and one client recently, and we have gone to auction for them a few times and look at, and in their particular case they, you know, even though we went through their getting started session, they didn't push their budget early on and they should have. And now we know that they know that we're all there, we all get it. So that's a bit unfortunate. That also coincided with the market suddenly taking off. So, you know, that's, that's you know, we asked the questions, we don't always get the answer when we need it. You know,

Chris Bates: That's last year was a tough year I think as well. Because it takes a while for things to sink in that it's actually, you know, I bought, people were sitting on the fence the market's moving and it's not until people feel that pain that they want to get moving. Very

Veronica Morgan: True. And we try to truncate that and that sort of see one of the benefits of having us to, to try to educate you through that. But yes, it's human nature and it is a difficult thing to tackle and in anyway. So in that particular case, you know, we're, we've clocked up 130 odd hours on that search, so that's more than normal. But certainly it can, it can be that, you know, and we still haven't bought for them. We will buy for them, but you know,

Chris Bates: Well cause it was a couple of hours a week potentially.

Veronica Morgan: Oh couple God. I mean wait hours now as particularly think about where every time we price a property that's going to take upwards of five hours. You know, so that's a lot of work and a lot of and we don't take shortcuts. You know, I didn't care. It could get 200. We've made a commitment, we will buy them a property and it will be thoroughly evaluated each and every one until we get that right one. And if it takes you a hundred hours, it takes 200 hours. You know, we made that commitment, but that's, we don't put a time limit on our search either where some buyer's agents do.

Chris Bates: So the timer thing there's no time limit on it, but isn't. This is, and this is a conflict. There's lots of jobs. We've got conflicts. You've got a mechanic. It's a conflict. It's a thing. But every, you know, you go to a Erin's seat with limited resources and I, there's potentially a need to end time and conflict. If you've got two buyers at the same price point, a lot of buyer's agents can't have two clients both trying to buy lease Eastern suburbs at $2 million in these suburbs because who do you give the property to?

Veronica Morgan: You've got to have a policy around that. And we do have one and our policies not to take on two competing briefs, but we also recognize that sometimes briefs morph a little bit over time. And we've had a couple of instances where they've got very close to each other and with due. So we have a policy in principle, which is utter transparency. We haven't actually had to enact it yet, but we've a couple of times we've discussed it might be time but hasn't actually needed to happen.

Chris Bates: But also you can't take another customer on with my brief at my price point in my area until you sell. What's a lie by. Yeah. And so do you gotta be careful a little bit, just making sure that the buyer's agent pretends he doesn't try to get you off the books.

Veronica Morgan: That's exactly right. And he's V this is really where it comes down to values and as a city, my business, you know our values, we talk about that a lot and we have to be so clear that our clients best interests need to be paramount. We really talk about, you know, examples of where we do that where it's quite clear that our client's interests are really looked at over and above our own individual short term interests. We have very long term view in our business and and that is something that yes, that is something that I'm absolutely 100% you know, and and you know, I did say we were recruiting for buyer's agents. If you're transactionally you just want to smash and grab then don't, don't send me an email. I'm not interested in talking to you because we are interested in authentic longterm relationships with our clients. We've got clients that we buy multigenerational for, you know, over many years. You know it, you can't do that if you've got a smash and grab sort of attitude.

Chris Bates: Yeah. The heart human values is, it's just so hard to, to know that sometimes when you are engaging professionals, they'll say all the right things. But it's so hard to know. It's been a client literally this week, and this is just, this is not my own trumpet or whatever, the drama program, trumpet, but you know, come to me and they said, Oh yeah, we really want to buy in the Eastern suburbs. There's a referral from another client. We've got, you know, we want to buy something mid twos and then, you know, just three, four questions found out that their English and they want to move back to the UK and for four years and want to get back to London. And I said to them, it's just crazy idea to buy. You know, it's such, you can't borrow that much cause your incomes, you're gonna have to put all your cash.

Chris Bates: I could make it happen, but you're gonna have this house in Sydney and you're gonna be moving back to London. You gotta have all your money tied up in this house and Sydney, what are you gonna want to do? You're going to sell it. And the reason you want to do that, now you might decide that it's the best thing to do. And we will talk about that and we haven't decided what the right thing to do is. But you know, it's a big decision. And you know, you're gonna have this house and you're gonna pump all your acid in. So I think I can, most brokers wouldn't do that. Is that what is an easy million dollar loan? But it was the right advice was the least explore not buying

Veronica Morgan: And that you've touched on something that's 100%. Okay. So go for a buyer's agent who's prepared to tell you not to buy. And I, and I honestly, that is, that is at the core of it. I mean, I stand up, I do these, these, Oh, if you listen to this long enough, you know, I talk about, you know, probably 90% of property is not worth buying. I've got a presentation, which is 10 ways to lose money in property. You know, like how many buyer's agents stand up there and go on like these 10 fricking big risky areas. Most of them are trying to push you into where they buy and encourage you to spend the money in their area because that's fundamentally their business and that's all they can sell you. Whereas I've got a much greater longterm view and I really do believe it's why we'll point you in the direction of getting advice, go to accountant workout, whether it's even sensible from a taxation position to borrow, invest and probably go to a financial planner and sought that out first. You know, because, cause I don't want you regretting whatever you buying. You don't regret not buying. Don't regret buying either way. Don't regret it.

Chris Bates: So my final objection is, is I've heard out there the buyer's agents pay too much and that the, the transaction and I'm, I'm worried that if I engage you okay, I understand the fee cause I can see the value in all those other things plus getting it. But I'm worried that you're just going to potentially, when the push comes to shove encouraged me to just offer more and just to get you off the book cause you don't like dealing with me cause I'm quite peculiar and I actually have, you know, I haven't been, I'm taking this extremely serious. How are you going to make sure that we don't pay too much?

Veronica Morgan: Yeah. So, and this is a very real issue, you know, let me tell you. And then the other thing too is that quite often we get on the flip side of this with clients wanting to pay more, weirdly enough, we actually hold them back. But yes and it's a very real fear and I think everyone should be very cognizant of that when they're talking to buyers agents now I guess, you know, talking reference, checking past clients and really asking them about what process did you go through to determine what price you should pay for that property and did you end up having to pay that whole, that whole money or not? You know what I mean? Like, I think the best way to find out how that actually worked, how other people's experience is. So that's a really good way to do it. But that you have to ask specific questions. You have to specifically ask about that negotiation process. How was that done? Now our pricing research is so rigorous and so thorough client can go through there themselves and actually look at everything like, you know, you've got the rapport plus the spreadsheet, plus all the links and et cetera, et cetera. And they

Chris Bates: Guests really figured out as is, are you going to tell me what you think it's worth before I tell you what I think it's worth? And what I'm willing to pay because it's easy for you. If for example, I say I'm willing to pay one seven, you'll come back on the price guide and say, I think it's worth one seven.

Veronica Morgan: Yeah, yeah.

Chris Bates: It goes through the, through the, you know, through to the caper. Basically.

Veronica Morgan: I'm actually not worried about what my client is thinking. It's worth because they actually don't know exactly. You know? So what I'm gonna do is demonstrate based on recent sales and what the market's doing, where it sits, and then we're going to have a conversation is the caliber of the property. I've mentioned back about their capital growth predictive indicator, how we actually, we, we measure that. We, we, we got a tool to sort of give ourselves a clue as to how these property will perform against the others in the area. You know, that's part of the decision making process. How good an asset is this property? Would you push yourself for this or not? And then it's back to onto the subjective side of things. How uniquely does it suit your needs? And then look at all those recent sales, how many of those would you bought? How likely is another one gonna come up? You know, and then you budget. So it's a process we go through with our clients. They make the decision, right? And it's a very, very clean, educated framework to use. And we don't rush that. And we'd certainly don't pluck figures, figures out of the air. And if they do need to pay more because they're not going to buy it, then we tell them that. But we've got the evidence to support.

Chris Bates: So it's all about doing the research prior to the offer, knowing exactly testing your limits, those sorts of things rather than just dealing with the, the hits or the balls as they come I guess, which are, I have found that some buyers agents will just, just, just basically do whatever happens basically and just get the, get the transaction done and hope that time will be forgiving. So hopefully for our listeners that is, you know, provide a lot of insights into buyers agents and this one wasn't about banging a Veronica's trumpet. It was about though, highlighting all the things with buyer's agents where you know, the values potentially, and also this, the care and discipline you need to go into to actually select a buyer's agents. So we hope you found that valuable. Thank you for that.

Veronica Morgan: My pleasure Chris. And I hope everyone got a lot out of that. And this week's elephant rider boot camp, how do you bang a trumpet? And I don't have an answer for that. Thank you for joining us. Please join us for our next episode. It's one with a difference. We interview Sharon Bradley now. Sharon is a writer and a journalist and she recently published in the good weekend a story about in Australia.

Veronica Morgan: Now the reason that we are doing this episode is because what we want to do is shine a light on what's really happening and how easily it can happen if you aren't prepared and then how do we get prepared to make sure that we are not susceptible to a life changing situation where we might end up homeless. So please join us. It is well worth listening to this. I think we all need to understand this as a nation.

Chris Bates: Don't forget we're on all the social channels. We're on Facebook, we're on LinkedIn or on Twitter.

Veronica Morgan: Or you can connect with us on the elephant in the room.com today you, the links are all there for you.

Chris Bates: Please connect and send us a message we'd love to hear from you. The elephant in the room property podcast is recorded at the Sydney sound brewery.

Veronica Morgan: This week's podcast was recorded by John risk editorial by Gordie Fletcher.

Chris Bates: Until next week, don't be done by now.

Veronica Morgan: Remember, everything we talked about on this podcast is general in nature and should never be considered to be personal financial advice. If you're looking to get advice, please seek the help of a licensed financial advisor or buyer's agent who will tailor and document their advice to your personal circumstances with a statement of advice.