Sydney Property Muppets
33. Becoming a Buyers Agent!
- So when I was first applying, my idea about working or trying to find a job was like, I'm not going to try and pick and choose. I'm just going to apply for as many as I could. And I remember in like 15 to 20. - Right, so no filter, yep. - Yeah. - No filter, it was just like, see the new way, let's see what I can find. - Yeah, yeah. - And I managed to get the interview with the MacArthur group, which was like, Candle Town, Camden, all that. Probably a good reason why I didn't get accepted. - But yeah, so I was just like, yeah, I was applying for anything. I think that's what people need to do. But applying to be like wanting to be in real estate, I only thought there was a real estate agent. I never thought of anything like that. There was a buyer's agent. So it would have been interesting if I had of no. - May you have applied, I'm glad you didn't know, but it's a buyer's agent, very growing and changing field. So it's exciting times. - Yes, and welcome to the Sydney Property Muppet Podcast. My name's Kurt Lalfa, I'm the real estate agent, and with me, and forever is Chris Clark, the buyer's agent. - So last week, Chris, I wouldn't say you grew me. You just have interview stard me about becoming a real estate agent, why are some of the ins and outs. I did my best to not do a shoddy job. Hope you guys decide. Go watch that episode. But this week, tables are turned. I'm just sort of gonna be interviewing you, and I think this is gonna be a very interesting one because the buyer's agents is still very, what was the word you use, embryonic? - I do like that word, it's one of my keywords. - A new industry, and I think there's some, it seems you can lift the lid on. - It's a very interesting, I think. I use the term embryonic, but I also put a pause on it because there's actually some, already some buyer's agents out there being known for a couple of decades, and have some real mature practices. But embryonic, 'cause there's still people entering who are very new, fresh, start and run businesses up and away they go. - And the general public, I wouldn't say, is fully aware. - Yeah, so that's probably, yeah, the embryonic and the standpoint that only about less than 5% if not even near that, the deal is cross Australia, utilize a buyer's agent. - Yep. So if you're in the eastern suburbs in Sydney, buyer's agents galore, long and offshore, up and offshore, they're starting to become a lot more. - Yep, in a west. - You go up to the central coast, maybe a couple, maybe I don't need one. - It's a few good ones, actually, a new guy, I saw at the region, central coast and I want to take a bunch. - But it's still very rare at the moment up there. - Yeah. - So questions start with background. What were you in beforehand? I think this is an important question because real estate's one of these industries. I think people think they need to have 20 years of selling experience or certain degrees background. What was your background and what led you? What was the change or cuddles that led you to jump into the real estate industry? - Look, I've got to, like I threw it too much, but unique background, I was a school teacher, traveled overseas, worked in bars, worked in Rio de Janeiro in teaching judges and PAs. Came back to study three years in origin energy and the marketing role. Wanted to get in sales and join recruitment and join a global recruitment firm, Michael Page, where I was all about helping people's careers and there's a hadn't done property, but I guess I know it's a very close synergy to what a buyer's agent does. And I've said this before often is in recruitment, we are helping individuals understand what their criteria is, what the salary they want, the location, their career potential. We also know their family situations typically. When it comes buying a house, we know their budget, we know their location, we know their criteria, we know what they want out of a longer term, and we know their family situation. So the discussions that we have is almost identical. I'm really like, I feel like I'm a weapon in that space. Obviously, property being new. Before I was selling people, helping people find jobs in Canadian businesses, now it's property, so there's physical bricks and mortar, it's definitely a new element. - Yep, what drove you down the buyer's agents path? I know last week you mentioned that you potentially wouldn't want to rock up to the same house selling it for the real estate agent. - As a real estate agent. What sort of drew into the buyer's agent? And where did you start and did you start your own company? Or did you have to join someone else? What was the story? - You didn't have to join someone else, but I did. So my brother's a buyer's agent, Simon Clark. He set up settler buyer's agents now. We're both part of a previous firm, which is still an existence in Universal, which is a typically more Brisbane-based buyer's agent firm. So we sort of bolted into there and gleaned some really good useful experience about what a buyer's agent does and how we get about it. And we also did Ben Handler. So part of it was originally a founder of Coen Handler, which is probably one of the more established buyer's agents firm in Australia. He has a training program called BIBI, buyer's agent institute, and I went through that. So there was education, there was class one license, and there was all this experience, but then that gave me all the weapons and the power to set up Clark buyer's agents on my own 18 months ago now. - And were you nervous? Or was it trying to have the fund, where did the fund become, or was it a bit of a risk that's, 'cause buyer's agents, once again, are generally paid on performance, once you see the deal. How did that go to be like taking that leap from 12 years in recruitment, where you're constantly getting income? - No, no, then you started up with Simon and Universal, but then taking that leap where the responsibility is all on you, how did that feel, or? - Well, there's three certain things in life. There's the pay slip, taxes, and death, right? These are three things that are going to happen typically. And we're addicted to a pay slip. When you're in a job like that, P-A-Y-J, the company's known that exact number's gonna hit. You're okay, you might get bonuses, but that number's gonna hit, you can't every month. Crazy sound, I think partly, 'cause my brother's belief in me, and partly 'cause of the years of experience in corporate, and that I could, I just had self belief. So I knew it'd work in a crazy way, and even when the first start of the first 12 months, you're toughest, you know? I purchased seven properties in the first 12 months, which is definitely good, really happy with that. Not enough if anything, it drove backwards from my own personal clients, but I had very much a blind belief that we would be able to succeed, and I did 17 properties in my second year, and I think I'm gonna do 35 this year. - So a couple of points. Where, for those people that sort of wanna get into it, where, what is the blind belief or that motivation, or just that some people, I think, will ask themselves, how, like, where does it come from? What is it, like, is it just driven? Can you work on it, or? - Yeah, I don't, I can only talk for myself, so I think that the fact that I could see the cross over with the career, along with our 12 year career, in a similar, different, but similar industry, how they're there. So I think if you're sitting there listening going, I've got a similar, now I've got a career that I believe has an imprint to come across, it doesn't have to in the property, but it has a similar, so to get to know you and pipeline. I don't think if you don't have that, simply making the mistake of, you know, there is, you know, ads, and so forth, it's only been quite new, there is an attractive, you type this into Google, you'll get 1,000 ads about how easy it is, and I can show you, I can show you, it's not. - Are you sure, isn't it just, can we get a billion dollars in, you know what I mean? - No, no, no, well, not for my experience, but I think you need to be, I would encourage you to join, you know, similar we talk about your, we talk about real estate, join someone established, I mean, the fear for that established business is you're gonna join and leave within a short period, it's up to them, create culture and remuneration, that is gonna mean you're gonna stick their longer term, but I think that's a great way for you to go through your own self-interest, to join someone established, to gain, okay, what are the calls, what am I learning of, what are the faux pas, where people fallen short before, rather than be on your own day one, and not have anyone to learn about, you've got your clients trusting you to spend, you know, in Sydney the lowest property perch, I've done $610,000, which is a lot of money. - So compared to the rest of Australia? - Yeah, or regardless, I just think it's a lot of money, and I purchased up to $13 million, a lot of money. So you don't wanna disrespect that by any sense, by having that support around you, I think you'd have some confidence, you're not doing the wrong thing by them. - Well, I think, and I actually learned this from when I was chasing the music dream, is I think a lot of people feel they're cheating, if they don't learn it on their own, or learn from their mistakes, or I actually think learn from people that have already done it. I was like, if someone's already gone through, you know, that hard jackal, or the hard yard, have seen mistakes, learn from that. - The best, you know, the best learning is when you make the mistake yourself, absolutely. But the second best learning is learning from all the people's mistakes. And if you can harness that and make that important to you to learn off, it will put you in good step where you wanna go. I think learning through your own mistakes is great, but then if those mistakes are damaging and hurting other people, and potentially hurting your business as you're embryonic. - Yeah. - I'll make that word again. You know, for me, this, part of the other traction of going off and doing this was, I'm a strong person of ethics. I don't like to have massive push tactics involved. I like to give people time to make a decision, when you're part of a larger firm, whether that's in recruitment or whatever it is in buyers agent, it's a little bit metrics and forces encouraging people to buy, whereas I've had clients take eight months and I've had clients take four days, it doesn't bother me either way. As long as it's the right property for them and they're comfortable. And I can actually go, and I'm confident to go, okay, in months and years to come, I'm gonna look back and still be confident that there was a right deal. And then that's great to be part of. - Okay, a question I wanna ask is networking. Obviously when if you're in a real estate company or you're joining a big buyers agent company, this sort of got the brand, the name out there, so that basically helps. Even though you still need to get your name out there, you've kind of got that backing or that recognition sort of in a way. Starting out in your own company, I know a lot of people try and go to networking events. The hard thing about them is, it could be 10 other buyers agents and people end up just selling them, everyone's, it can sometimes become a bit of a sell-fest of that. What's, and I know the answer to this, but what something you do, and piece of networking that you do weekly, that you would recommend this? - Yeah, I mean, it's out nicely. Ben, I, I mean, there's, you go online, you can read good things and bad things about it, but for me, it's been absolutely revolutionary. Craig Foreman, a mortgage broker actually invited me along one week, so that's a, that's a new agreement we meet on Wednesday mornings. There's one of each profession, so there's one broker, there's one buyer's agent, there's one marketing, there's one, you know, whatever it may be. There's, there's other who can visit, but those are the people who are there week in, week out as members. And the referrals that a mortgage broker has a client, they need to buy a property, they need to sell a property, they need to use a property sister. It really connects through. - Yeah. - And something about 40% of my business actually comes from, from that. - Okay, perfect. - Yeah. - Okay, other than that, how does the commission or pay work with a buyer's agent? So selling agent, you might be just say 1.5, 2%, 2.5, whatever it is. - Yes. - Once you sell, what's the next part? Like as in that's for a selling agent, but as a buyer's agent, how does it work? - So as a buyer's agent, there are typically two payments. There is an upfront retaining fee to engage our services. A good opportunity to talk about. So it does two things for my business. One, it means if you, we have a contract typically six months, if you don't buy something happens, there's no cancellation fee. So that retaining fee stays with me, but it basically pays my petrol. It's not an exorbitant amount of money, but it's enough to keep things running. We have more incentivized to secure the property, we would get a larger fee. But also my business, that also locks away your position. So if you're looking to buy, you know, a three bedroom town has some chat squad. When you're engaged to use me, I cannot take on somebody who's looking to buy a three bedroom townhouse and chats with around the same level. I'll tell that next person you need to wait until I buy for this person. So I don't, and the reason that is, is I don't have the conflict of interest. That's not a standard norm, but that's my own norm. - Yeah, but I do know some companies also have that as well. - Yeah, it's not uncommon, but it's not also common. Flat fee or a percentage? - So my business works pretty much primarily on a flat fee model. The only time we work on a percentage is where sometimes with investors, they might be looking to spend a varied amount. So it might be, oh, of course, you might find a province one minute, a three minute, very hard of a flat fee there, because it's such a big variant, particularly it's a fixed fee. And it's just similar sort of percentages, I guess, as a selling agent. - And I guess probably before we start wrapping up, what, who is a buyer's agent suited for? So comparing a selling agent or a real estate agent to a buyer's agent, what is the difference? And who should look at going down the selling agent, are the buyer's agent part? - It's become a buyer's agent. - Yeah, like personality traits, sort of goals, aspirations, sort of ethics even. - Yeah, I don't know if there's a difference so much in terms of the person from, if they're looking at real estate or buyer's agent, I think, yeah, you make your own decision on where that's comfortable for you to do so. I joke last week, but it's also in series, and it's like real estate agent to me, happen to go back and see the same property over and over again. I love the fact that I can see a property and never see it again, or I could see a property and probably the maximum I'm gonna see, it's three to four times through that process. And the other part that's attractive in the buyer's agent world, again, it's my own perspective is it is growing. The barrier in entry, there's the same license. We actually share the exact same real estate license. Not share, but we are the same umbrella. - You did 10 units, I did 10 units. - Correct, but there are a lot more established real estate agents, and also you look at it from a real estate agent to gain a client, you have to do it on a property that everyone else is do not, and so forth. To gain a buyer, you can't do it on somebody 'cause I might be buying in Elizabeth Bay, right? But the person wanting to buy there actually currently lives in Melbourne. - Yep. - It's like a doorknob Melbourne to buy on Elizabeth Bay. So there's a different way of capturing clients. That's why mortgage brokers and property producers are my best friend, because they're aware of those people looking to buy, who might be buying in different areas, and then they can connect me to be their expert on the ground. - Well, I can say from a real estate agent's perspective, this week on a very conservative number, I've spoken to 100 different buyers. - Yep. - So, you know, you can only, as a buyer's agent, have so many clients, and I've spoken to 100 different. - Yeah, how many of those people have had a buyer's agent representing them? - Maybe two. - Yeah, too. So you look at that, it's 2%. - Yep. - Why is there's 98% of people out there that are right? - Yep. Whereas there could be, in just say, a suburb roughly maybe 50 houses on the market. - Yep. - Now, some of them are gonna have more than the same agent. And, but there's plenty of agents out there, so the pool of you being able to secure a client as a real estate agent is a lot more difficult. - Yep. - Than a buyer's agent. So you could say a buyer's agent. The business can be, maybe it's a positive or a little bit, I don't wanna say easier, but then on the flip side, it's harder for buyers agent to win that business, because we've got all the data to speak to our potential clients. - Well, I think it's also maturity, like, if those 50 properties have been sold in the area, how many of them are not using real estate agent? - No. - Right. How to be a buying without using buyers agent, 98 out of 100, right? - Yep. - So why is that? It's probably not 'cause they don't need it, not that it's not valid. A lot of them just don't know. Or they don't know someone who's used one, they don't know the positive experience, they don't know the savings. Well, they just don't know. You said it in their own about, and I think in the previous episode, this one talking about when you became a real estate agent, you weren't even aware of buyers agent in the field. Well, that's our buyers, quite often, I think 30% of the time when I'm speaking to somebody through a lead or connection, the star of the conversation is Chris, I've never actually even heard of a buyers agent until Sanso said to call you, what do you do? Whereas I'm guessing for a real estate agent, never someone say, hey, I'm connected with you, but I've never heard of a real estate agent, what do you do? - That's a great question, Chris. - And this is a great question, but it's also not a question you're going to have. They might ask, do you do different to somebody else, but they in essence believe that, which actually is a detriment because they've got a lot of assumptions with you, with me, there's no assumptions, beautiful, because I can actually paint them a very clear picture of what I do. - Yep, and I was going to say, I think this is the one advantage buyers agents have over real estate agents, is that you guys can create an industry that when most people are satisfied with your service, whereas in the selling agent, there is just that perception, a bit of negativity, because some people don't think, and I don't think real estate agents have helped them, that we haven't given the industry the best look sometimes, whereas the buyers agents up and coming, you guys can control how people perceive you in the long run. - Well, you also, you have a product, right? So someone's saying that house, and they think it's worth three. So if you sell for 2.8, even if that's above the market expectation, everything else, and you know that's amazing, the person who's in contact, you're hoping for three. So they're already going to have a negative, potentially a negative. With me, they're going, okay, we've got 2.8 to spend this area, and we go through a journey, and we look at various properties, we find the one that's going to fit them, and might not have all the bells and whistles, but the satisfactory is high, because they're like, you've achieved in 2.8, what we're looking to achieve. - And even if you're a hundred K over, that generally someone lives in a property five, 10 years. I don't think it's about the extra hundred K that they think they paid over it. - No, but also if they spend a hundred K more, that's through a journey, it's not through a flipping comment of, "Oh, let's spend a hundred K more." There's a reason and validity. Anyway, we should wrap it up, because we know we're dribbling here. - Yes. - Not the basketball, MJ dribbling. - Three quick questions my way. - That is true. So as per you last time? - Yes. - How many buyers agencies can you name? You got 10 seconds. - Cohen Handler? - Yep. - 10. - Clark's buyers agent? - The best. - Dan Grantham buyers agent? - Yeah, no Dan. - Mayfield property buyers? - Mayfield property? - You can get one more. - Who's the lady from your been on? Is that one you've already mentioned? - Oh, Lance, probably buyers. Lance, it's a-- - Sounds like you need to one to one with her. Okay. - Oh no, she's changed. She was on Mayfield. We got a different guy. - Oh, she got a different guy. - All right, okay. Next question. What are your thoughts on vendors' advocacy? So these are people who help people find a sales agent. What are your thoughts on them as individuals, or an industry? - I think there's positives and negatives. - Okay, I reckon there's a, I don't know if we've done an episode on vendors' advocacy. - All right, and that's great at this. - There you go. This one comes up. All right. - Chris can't read his own, right? - I can't always struggle with this part. You got your trip coming up? - Yes. - That is the one thing, the biggest thing you're looking forward to in that trip. Can't be a country. - I love flying on planes. - You're flying business class? - For a small part of it. - Are you really? - I like from Italy to England. - That's been nice. But I love the whole process of waking up, going to the airport. You know that whole thing of being in the airport, checking your passport. I love it. I know people will hate it. You know, about halfway through the flight of the 14 and a half hour journey. I'm a little bit like he enjoys a process. Well, thank you all for this. It's been useful if you're looking to become a buyer's agent. Feel free to read it, reach out or read this agent and reach out. Please like, share. If you've known someone who's looking for a career change, please send in the episode and see what they think. - And if you think this podcast can help just one friend, please share, also like and subscribe. You guys are amazing. - Thank you so much.