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Ahead of an anticipated first home buyer boom, a seasoned real estate agent has revealed how building relationships based on trust and honesty can prove advantageous in the long term.
First National Real Estate Daystar director, Paul Davis, has revealed how agents can use positive relationships to their advantage, as the government’s 5 per cent deposit scheme is projected to create a first home buyer boom.
According to Davis, a lasting impression based on respect and trust means buyers are more likely to use an agent in the future if they decide to sell their house.
“I think that whether you are a buyer, first home buyer, tenant, landlord, seller, whatever, a genuine relationship is crucial,” Davis said.
“One day, if the agent is smart enough, buyers become sellers.
“The more you help people and do the right thing without any incentives, it’ll come back one day.”
Over the years, Davis said being kind and helpful has been rewarding, as countless sellers left with a good impression contacted him to sell their properties.
“I’m getting a phone call saying, ‘Hey Paul, I don’t know if you remember me, but about a couple of years ago, you were helping me buy a property … You didn’t ask for anything, but now we want to sell the property, we want you to sell it’.
“Even though we might help buyers find properties and secure properties, we don’t get paid by the buyer. We get paid by the seller. However, one day, these people will be sellers.
“I would like to think that because of the way they got assisted, when they do become a seller, they’ll know that yes, I’ll have their best interest being a seller.”
For Davis, a major part of forming connections with buyers is educating them on the property purchasing process, particularly for first-time buyers who aren’t so familiar with the property market.
He said when buyers come to inspections, he likes to give them a step-by-step rundown of the procedure to ensure they are informed.
“I’ll have buyers come to an open house, and the first question I’ll ask them is, are you ready to buy? And probably 80 per cent of the time people say no,” he said.
“I usually tell them to get their finances in order and then come back to see me.
“Even if they’re not financed, we put them on the mailing list and give them updates on new listings and sold properties.”
While Davis admitted that it’s not the agent’s job to educate the buyer, he maintained that honesty is vital to earning their trust.
“Our job is to maximise the price for the seller because that’s who pays us, but it’s also important to be an all-rounder,” he said.
“Yes we act for the vendor, and yes, our job is to get the vendor the best price, but at the same time, we want to make sure we’re being honest with buyers and giving them the right information.”
With the First Home Guarantee changes starting in October, Davis predicted that first home buyers will benefit from lower deposits but will face challenges with higher mortgage repayments.
Giving the example of a property worth $1.3 million, Davis said a deposit would be around $65,000 while repayments on the remaining $1.2 million would be $8,000 or $9,000 a month.
“Then you have to chuck in water rates, counter rates, strata, gas bills, electricity bills, cost of living,” he said.
“So I think people think, ‘Oh, this is a great idea to have a 5 per cent deposit’. But I think the reality is that people forget that servicing a loan of $8k, $9k a month, that’s a lot of money.”
“Although I think the 5 per cent deposit scheme is good, I think that if you have the ability to put down more, put down more so your repayments are less – I think people will struggle,” he concluded.
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