How to throw away $200,000: Rich Harvey

GUEST OBSERVER

One of the many advantages in using a buyer’s advocate is to capitalise on both their knowledge of the property market and their relationships with the sales agents.

As a result of such a relationship, I managed to obtain access to an off-market property in the Lower North Show and set up a private inspection with my client.

At the time I suspected the property would be beyond my client’s budget but my client still insisted on viewing the property.

It was a lovely family home in excellent condition and as it was of interest to my client, we completed an appraisal, concluding that the property would be very fair buying in the range of $3.79m to $3.84m.

After discussions with the agent, it was revealed that the vendor ideally wanted $3.9m but we suspected that there would be some room for negotiation.

At the time, I anticipated we would be able to secure the property for around $3.8m to $3.85m but unfortunately this was well beyond my client’s limit so we moved onto another property.

As it would turn out, the vendor’s motivation actually increased a month later once they had purchased and they decided to list the property on the open market.

A couple of weeks later we were contacted by another person who expressed interest in our service.

They initially wanted to purchase a home in Sydney’s Eastern Suburbs and so I arranged for a meeting with my colleague who specialises in the East.

We outlined our services and put forward our fee schedule. However, unfortunately after further discussions with this prospect they decided not to proceed, but rather to attempt to secure a home themselves.

This is not an unusual occurrence as I have to admit that it can be a little difficult for some people to see the value in our service prior to engaging us.  

As we usually do, we followed up a few more times over a two-week period before finally making contact. 

They told us they had decided not to purchase a home in the Eastern Suburbs, but changed track and preferred a house in the Lower North Shore and of course, you guessed it – it was the same one that I had seen prior to it coming to market.

But the sad part about this story is that this person ended up buying the property in question for an inflated price of $4.07m. 

I will always respect one’s decision to do it alone, using a buyer’s agent is not for everyone.

This was another example of a good selling agent doing their job well and taking advantage of an inexperienced and possibly emotional buyer.

I believe that even after the buyer would have paid our fees, I would have saved them around $200k.

However, this buyer was no Robinson Crusoe – sadly I’ve seen it many times before. Another win for a vendor – I only wish I could have been involved.

Rich Harvey is REBAA president and can be contacted here.