NOTE: The following topic discusses the benefit of using the service of a land buyers advocate. In reality, engaging the service of a land buyers advocate may not be that easy. It's a service we talk about here because we feel many people could benefit from it.
However, the purpose of this Module and indeed this course, is that you become armed with enough knowledge and information that you can become your own advocate. After taking this module you will know the most important things to look out for and most valuable questions to ask.
If you do happen to seek the services of a land buying advocate the service to search for is simply 'buyers advocate'. Unlike a real estate agent a buyers advocate works for you, whereas the real estate agent works for the vendor (seller).
why use a land buyers advocate
When buying land it's important you get authentic advice. A land buyers advocate can give you that. Seeking advice from a person who specialises in home building rather than home buying makes a whole lot of sense. Home buying and home building are, after all, two completely different processes. While a real estate agent specialises in helping you find the perfect home, a land buying advocate specialises in helping you find the perfect block of land.
So, if you want the journey towards your best lifestyle to be smooth sailing, get expert advice from the very beginning from someone who understands every element of the home building process.
The value of being empowered with knowledge lies in the protection from being misled
When we are thinking of upgrading our home, the first thing we do is contact a real estate agent, whether that’s to appraise our existing home for its value or just to see what’s available in the area.
Without a doubt they wield some powerful influence when it comes to the way we think and feel about buying a new home.
In regional areas in particular, the chances are that even without knowing it, you look to agents for advice. But what you mightn’t know is that agents have a conflict of interest when it comes to selling vacant residential land over existing homes. Why? Because agents are paid on a commission basis to sell property. An existing home could be worth two to three times more than a residential block of land. If an agent can have their client purchase an existing home over a block of land they will, at the very least, more than double and in some cases triple their commission. What incentive does an agent have to promote home building? It’s understandable that the resources of the real estate sales team are directed towards clients purchasing existing homes.
An agent will sell land to someone who is already aware of the advantages of building and walks in the door to buy a block of land. Easiest sale ever … done. However, if someone walks in who needs to upgrade and who is exploring their options for available properties, are they going to suggest they build? Most likely not, because that suggestion could see them miss out on a much larger commission. What they are more likely to say to someone who comes in voicing their indecision between buying and building is this: ‘I’ve got a property that’s almost brand new, in the area you’re looking at and you can save yourself the hassle of building.’
Result? Tick, commission more than doubled.
You can’t begrudge them for that; it’s their livelihood and any smart business person will work to sell their highest return product.
When you meet with a real estate agent, they’ll ask you lots of questions to find out exactly what you are looking for. But here are five questions they won’t ask you.
- Do you want a house that’s been tailor-made for you?
- Would you like to save anywhere up to $20,000 in stamp duty?
- Do you want the opportunity to create instant equity?
- Do you want to spend your budget on the areas of your home that will bring you the most happiness?
- Do you want a property that will be maintenance free for five to ten years?
It's a real 'Uh Ha' moment whenever I tell this story. I don't know what it's not talked about more often as I see it as being a real issue hindering the growth in new home builds in regional areas where most smaller developers have no other choice but to use generic agents to sell their product. This problem was one of the motivators for creating Build In Oz - a place for you to come to get unbiased advice about the process of planning to build a new home.
You can engage the services of a buyers advocate or you can educate yourself here and have a good handle on the most valuable about what's involved in buying a block of land.
Distrust and caution are the parents of security.
- Benjamin Franklin
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