Buying Property in Australia vs UK

I was recently in London and was keen to know how the property buying system works in the UK compared to Australia. It's a relatively new concept here compared to a sales agent, so our job still has some way to go to improve its awareness with home buyers and property investors.

Here's what I learned:

1. Buyers are booking private inspections with estate agents (sales agents). There are no public inspections or four-week auction campaigns. The Aussie way is designed to create maximum competition and emotional bidding, and in my core areas of the Inner West and surrounds in particular, the buyer pool is bigger and there is more competition. In Central London, the barrier to entry is so high (a minimum of £2M to get a decent flat) that the buying pool is smaller, so agents are much more selective about the buyers they let through.
2. Price is agreed upfront between seller and buyer, and then due diligence commences prior to contract exchange. The buyer commits tens of thousands of pounds toward due diligence with the risk of being gazumped. This means the reputation of the buying agent and the estate agent (sales agent) is paramount.
3. Many more overseas buyers are using buying agents than in Sydney. Most buyer's agents in Sydney represent local home buyers or investors. This is likely because there are no residency rules to purchase property in the UK. Perhaps that also has something to do with the astronomical budget required to enter the London property market. That aside, it is a no-brainer for international buyers to use a buying agent, but London still faces a lack of awareness among local buyers.

Here's how it translates to us in Australia, and how buyers can get the competitive edge:

1. There are many more buyers you are competing against in Sydney. This is because of the very public nature of, and public access to, properties compared to the UK. In the UK there is a natural barrier of the buyer needing to contact the estate agent, so there is much less chance of the estate agent bidding up emotional prices through initially reluctant buyers, or through parents who just happen to go to an open home on a Saturday and BOOM, they've downloaded the contract and are emotionally committed.
2. We do our due diligence upfront or during cooling off. But even if there is a cooling-off period, I highly recommend that buyers conduct lengthy due diligence prior to cooling off, because there is 0.25% (and sunk cost bias) at stake. Not to mention, it is much harder to reduce the price during cooling off than before it (sunk cost bias, as the agent already has you somewhat committed and is much less willing to budge on price). I often do most of my due diligence before submitting a formal offer. This is because the risk of gazumping is much higher here, given there are more buyers per property.
3. It is very difficult for international buyers to purchase property in Australia, and it's limited to off the plan, vacant land, and new builds. Aussies should be taking full advantage of the first home buyer incentives available to them. Even in Sydney, it's possible to access the first home buyer grants. The most common are the 5% deposit scheme on property purchases up to $1.5M in NSW, and the stamp duty concession scheme up to a $1M purchase price.

During my chat with the UK buying agents, I found their buying terms have different meanings. For example, a survey includes a building and pest inspection. So when I mentioned cooling off, campaign, title insurance, planning certificate, and so on, they weren't aware what these things meant.

Here's what I take for granted as assumed knowledge:

Buying property anywhere is complicated. I realised I would have zero idea how to purchase in the UK, because I've never done it before. Which makes me think, yes we have parents and friends who have bought property in Sydney, but the system, market dynamics, and tactics change, so really, first home buyers have zero idea (sorry, but it's true). Even some of you may think, I have a mortgage broker and conveyancer who can help. I can tell you from experience, the best mortgage brokers and conveyancers will not try to help you with the actual buying process, they will outsource it. The ones that give you their two cents are often wrong, because they only see what happens from a second-hand perspective. And nearly every time a mortgage broker or conveyancer has gotten involved in the mechanics of the property itself, the due diligence, or the negotiation for my clients, they actually do more harm than good.

This is all to say that meeting the UK buying agents, while they are experts and absolute guns at what they do here in London, they would be so lost if they tried to buy Sydney. And I would do absolutely the same thing if I was trying to buy here in London, even for us as literal buyer's agents.

So the moral of my rant is to outsource, outsource, outsource.