Finally got my first mortgage at 42 and here’s what I learnt

[integra]

@shaynaleab Thanks for sharing; encouragement for those of use who, for whatever combination of reasons, are starting this part of the journey later than most.

 

[shaynaleab]

@integra You’re welcome. I’d have appreciated a post like this during my journey and TBF, there were some helpful posts occasionally.

 

[kempoutzzz]

@shaynaleab

Use a buyer’s agent (BA) if you can.

Don't use a buyer's agent. The two interactions I've had with them have been them overpaying at auctions for absolutely no reason.

House worth $420-$450k, auction is between BA and a couple and the couple is all but out at $460k and then the BA bids $490k for some reason. House passed in. BA and selling agent go inside and chat, house sells for $550k to Audible gasps from the crowd.

A BA has no incentive to get you a good deal, their incentive is to foster a good relationship with a selling agent. Don't waste your money on them

 

[juliajaygrey]

@kempoutzzz I had a fantastic experience with my buyers agent, but there are a lot of shonky grifters out there.

 

[shaynaleab]

@kempoutzzz That wasn’t my experience but I guess we all have different experiences. Mine was pretty positive

 

[kempoutzzz]

@shaynaleab How did they save you $100k, especially at an auction?

 

[kjeldsen13]

@kempoutzzz Reads like due to his nerves he likely would have over bid and just gone all in. Having a BA meant he want able to do that.

 

[kempoutzzz]

@kjeldsen13 Sounds like an auction though? If you win then you stop bidding

 

[kjeldsen13]

@kempoutzzz I meant that he would go beyond his own limit, not that he would do the old 'shut up and take my money'.

 

[billyc115]

@kjeldsen13 Yeah but, say OP's limit was 500k, and the competing bidder's last bid was 490k... OP probably wasn't going to bid 600k in that position, so I'd also like to know how the agent saved money.

The scenario that comes to mind is the agent represented OP at two different auctions, losing out on the first, and OP feels that they would have gone on tilt and bid over limit. i.e a different property selling to someone else for ~100k over limit

 

[revalexandergerber]

@kempoutzzz Sounds like his emotional involvement would have meant he kept bidding past his cut-off. The agent stopped at the agreed limit. Whether he then ended up with that particular house or bought a different one is not known.

 

[kerensa]

@kempoutzzz This is what I was thinking, also weird OP recommending a buyer's agent that they had to convince of the lower prices in a market..?

 

[innerfire89]

@kempoutzzz Sample size of two is what I am reading here.

Like any other professional services provider, do your homework when selecting one or get hosed.

FWIW we have used the same buyers agent as a number of family members and friends (melb inner east houses) and the experience has been exceptionally valuable, even as one who negotiates (in a different context) for a living.

 

[kempoutzzz]

@innerfire89 And that's a sample of one.

They don't offer a useful service in Australia, especially with auctions.

 

[innerfire89]

@kempoutzzz As I said, four or five of us bought houses through a common buyers agent at auction, and all went very well. The other, broader data point is that the profession itself exists and endures, which it wouldn't if it was 100% devoid of value to 100% of people 100% of the time.

For many professions - lawyers, financial planners, car salespeople, recruiters, property managers, real estate agents etc, the old saying applies that 'the majority give the rest a bad name'. That doesn't mean the service they offer isn't legit and that one can just handwave away the profession in its entirety. It just means the low barrier to entry and substantial potential rewards for dubious ethical behaviour make it all the more important to be selective when choosing one.

 

[kempoutzzz]

@innerfire89

The other, broader data point is that the profession itself exists and endures, which it wouldn't if it was 100% devoid of value to 100% of people 100% of the time.

It provides a very niche service - help people who can't see houses or learn about the local market buy houses. Outside of those scenarios they are useless which is why 99% of people buying houses don't use them.

For many professions - lawyers, financial planners, car salespeople, recruiters, property managers, real estate agents

Are you really comparing the service a lawyer provides with a buyers agent? All of those jobs provide a useful service for pretty much anybody using them. The same can't be said of buyers agents.

What did your buyers agent do to justify their cost? Assuming you knew the area and market. Were they like OPs one where he had to argue with them on price?

 

[innerfire89]

@kempoutzzz I am comparing buyers agents to lawyers insofar as both can be included in a list called 'professional services', yes. You give them money, and they give you back time and/or take away risk, in comparison to doing yourself whatever it is they do.

Our buyers agent did three things for us that were valuable - noting all of this is in the context of two busy professionals who are happy to pay for the expertise of others where it can save time and/or reduce risk. For example, we pay someone to wash our second story outside windows (not that complex a task), to save the time and risk of doing it ourselves. As with any 'do it myself or pay someone to do it' decision, the calculus is a personal one based on resources (time and money) and risk appetite. And, as previously noted, choose a poor professional service provider, and any time/risk savings can flip into the negative. Your mileage may vary, buyer beware etc.

But yes, three things. First, they dug deep to help us make a determination on where to pitch an offer for a specific off-market property that we were in negotiations with, where neither party had a clear understanding of the value of the place, for reasons. Based on the guidance provided, we had confidence in our 'walk away' price, and were able to do with complete peace of mind (which is of course the same reason people buy insurance).

Second, they were our 'rapid response' eyes and ears for a very specific neighbourhood that we were determined to get in to within a short period of time, identifying a number of off-market properties for us, and giving us a good heads up on properties that were about to come on the market, in useful regular digests that we could work through each week, with a degree of confidence we were 'across the market' while also both working 60+ hour workweeks.

Third, when we found our dream property, they provided a valuable 'voice of reason' throughout the process. This includes having led what was a very heated/strategic auction process in a manner that we believe worked very much to our advantage.

Oh yes, fourth bonus thing - they also bid at auction for us at one property when the auction was the same as we had an out-of-town wedding to attend.

 

[trustingindestiny]

@kempoutzzz Absolutely agree. Buyers agent are an absolute waste of time and money.

 

[resjudicata]

@trustingindestiny Sounds like they’re worth the money only if you are utterly hopeless under pressure lol

 

[trustingindestiny]

@resjudicata I’d say that is about right. If you have a lot of money to waste then they would be worth it.