What is property sourcing?
If you’ve been looking into property investment, you have probably come across various property sourcers advertising their services. But what is property sourcing, and how can it benefit you as an investor? Not all property sourcers are made equal, so in this article we explain everything you need to know.
So, what is property sourcing?
In its simplest form, property sourcing is a service to help you find and purchase a property.
A property sourcer will identify a suitable property and negotiate the best price on your behalf. They should also help to guide you through every step of the purchase process.
Here in the UK, estate agents act on behalf of the seller to get their property sold at the best price. However, there’s usually nobody to help the buyers.
Over in the USA, it’s commonplace for most buyers to use a buyer’s agent, even to purchase their own home. This is somebody who acts on their behalf to secure the right property for their needs at the best price. They will then guide them through the purchase process from start to finish.
While it’s rare to find buyers agents in the UK, there are plenty of property sourcers.
A property sourcer usually works specifically with investors to source investment properties.
Why would you use a property sourcer?
When you think logically, it makes sense to seek expert help when making the most expensive purchase of your life! Especially when you’re investing your hard-earned savings with no prior experience.
Working with an expert property sourcer should make you far more money than they cost. They should also save you money by helping to avoid bad investments too.
There are lots of reasons why you could be better off working with a property sourcer.
Finding the right property
Estate agents work on behalf of the seller, so their loyalty is getting their properties sold at the highest price. You might consult a property investment company, but they employ salespeople who are paid commission to sell properties to you.
Can you really trust them to advise what is a good or bad investment?
What are the chances the properties they have available to sell are the best investments you could make?
An independent property sourcer can advise what properties would perform best for you and your strategy.
Save you time
It’s possible to waste many hours, days, and weekends on travel to and from property viewings. Not to mention the hassle of calling agents to arrange viewings in the first place. Most of whom are terrible at answering and responding!
Then once you’ve made travel plans and taken time out of work, they call to cancel or reschedule last minute. It’s a common story!
To invest in property, you need money. That usually means you’ll have a business or job that pays you a good income. Your time will be better spent earning money and delegating.
Benefit from experience
Think about the average estate agent who shows you around a property. They are usually in their early 20’s and living with parents. Not necessarily well placed to advise what makes a good long-term investment!
Maybe you have a mate who dabbles in property after renting out his former home. Or a bloke down the pub who excitedly tells you about the latest get-rich-quick strategy. Not the most reliable sources of advice to build a sustainable portfolio!
A property sourcer should have personal experience that they can pass on to you.
Taking advice from somebody who has already achieved the same goal as you makes success far more likely.
Expert negotiations
Once you’ve found the right property, you still need to make an offer and agree terms with the seller. That means speaking to the estate agent, but they work for the seller. They want the highest price possible to maximise their commission.
Price negotiations are often awkward uncomfortable conversations for a buyer to have.
A good property sourcer will have experience speaking to agents and know exactly how to position an offer. This skill is vital to achieve the best price. That’s why an investor will usually be better off financially, even after paying the sourcers fee.
Reliable contacts
Do you remember when you bought your first home, and the estate agent said you must use their in-house mortgage broker? Also, the solicitors they said you must use too?
That’s just because they get paid a big commission to refer you.
Then the whole process was a nightmare. They were hard to contact, unresponsive, and you had no end of hassle, problems, and delays. It’s a very common story.
A property sourcer will put you in contact with third parties specialising in investment purchases. Experienced brokers and solicitors who put you first and understand the importance of good service.
Fintentional offers a bespoke property sourcing service to find properties tailored to your requirements. We develop a plan to achieve your goals and recommend the best strategy. We then find the perfect properties to implement your plan and ensure your success. Every step is managed on your behalf for ease and convenience.
How to choose a property sourcer
Each property sourcer will offer something slightly different, so it’s important to know what service you need.
We recommend chatting to a potential sourcing agent before working with them. Ask them questions to build confidence that they know what they are talking about. Treat it as an interview to understand if they would be a good fit.
Here are some of the main qualities that a good property sourcer should have.
Experience
Without experience, it’s hard to know which properties and which strategies perform best over time. Having the experience to understand what makes a great investment and how to manage it effectively is key.
An inexperienced sourcer may sell you a property because it has a big discount. But if there’s only a discount because there’s no demand, it won’t make a good long-term investment. An experienced sourcer will understand how an investment performs in real life.
There are lots of challenges that will arise along your investment journey. When starting out, you don’t know what you don’t know. An experienced property sourcer should be able to advise you to make better decisions.
Always ask any prospective sourcer what experience they have before working with them.
Personal success
Would you trust an overweight personal trainer? Probably not. So why would you trust a property sourcer who hasn’t been successful investing in property themselves?
The best way to fast track your own success is to find somebody who has already been successful at the same thing, then copy their formula. This is a very strong indicator that they can help you be successful too.
Independent
The ideal property sourcer should be working for you and your best interests. They should be unbiased to enable them to offer the best advice.
If they are incentivised to sell specific properties, their advice is conflicted.
Look for a property sourcer who is fully independent.
Trust
Building wealth through property investment takes time. The biggest returns come over the long term. That’s why you should find somebody you trust to work with over the long term too.
They should give you honest advice about what’s best for you, rather than just trying to make a quick sale.
If they are offering something too good to be true or promising to “get rich quick” that’s a red flag.
Property sourcers to avoid
Keep in mind when you ask, “what is property sourcing”, there’s no one-size-fits-all answer. Not all property sourcers are the same. Experience and knowledge levels will differ wildly, as will their level of bias or independence. That means the service you can expect will be very different too.
Recently, there has been a rise in online property training courses. These course providers sell the dream that property sourcing is a path to easy riches. Unfortunately, that means the market is flooded with people claiming to be property sourcers but with no real-life experience. Many have never purchased a property in their life and still live with parents! They may have theoretical knowledge about how to search for property deals and sell them. But do you think they are likely to have the best experience to help build a successful investment portfolio?
If you search online social media platforms, there are lots of people claiming to be property sourcers. However, there are no formal qualifications needed, and no minimum experience levels required to make this claim. Therefore, it’s hard to know who to trust.
You could go to a property sourcing company, but they usually employ salespeople with no investment experience. They are paid commission and incentivised to sell to you, so it’s unlikely they will offer the best option.
That’s why it’s so important to select the right property sourcer to partner with.
Where to find a property sourcer
Personal recommendations are a good way to start, but let’s assume you don’t know anybody.
Experienced investors with successful personal portfolios usually make the best property sourcers. They often have similar financial freedom goals to you. That means they usually work flexibly and independently, rather than for an employer.
This can make it very hard to find a great property sourcer!
Professional social media networks like LinkedIn are a good place to look. This gives you a chance to read their content and get a flavour of the advice they offer. It’s worth taking your time to find the right person. You often need to kiss a lot of frogs before you find a prince!
The best way is to consider the property sourcing service offered by Fintentional.
Fintentional is an independent company set up by Chris Hancox in 2021. Chris began investing in property in 2012. After six years personal investing experience, he began working for a national property investment company in 2018. After another four years building industry knowledge and expanding his personal portfolio, he quit the rat race.
Property investment was the vehicle to provide the financial freedom to leave employment. Chris now works independently, advising investors and helping them to build successful portfolios of their own.
If you have a similar goal, you can book a call with Chris to find out more about property sourcing.
