What makes a good property sourcer?
Understand what makes a good property sourcer and what the benefits are
A property sourcer should be someone with a good understanding of the property market who will research a variety of properties available to investors to buy and rent out to increase their monthly income or sell on for profit.
A professional property sourcer will know that under Section one of the Estate Agents Act 1979 they will be considered an estate agent if they do estate agency work as they are effectively buying a property for their client.
For a full definition, see Bristol City Council’s useful definition on what estate agency work is.
• Understands the numbers and figures – where are they coming from? • Knows why a property would be priced at below market value • Understands the needs of the person they are representing • Knows how the regulations apply to what you do as a specific activity, which includes a good understanding of consumer law
Some investors will not purchase the property outright but look for the agent to source rent to rent deals.
Read our ‘rent to rent’ guides, on the pros and cons of this model, in our resource section on the PRS website. Our partner, mydeposits has also written a detailed guide on rent to rent.
Refurbishment of the property may be arranged by the sourcer or the investor themselves.
The benefits of a good property sourcer is their understanding of the properties on offer at below market value. They save investors time and introduce new investors into the market.
They are in effect the middleman between investor and seller.
A good property sourcer will analyse potential deals based on:
• the investor’s risk appetite • payback period • return on capital employed • yield • return on investment
Professional property sourcers must also:
• be registered for anti money laundering (AML) supervision • have professional indemnity insurance, to cover the appropriate level of risk for any mistakes they make that result in client financial or reputational loss • be a member of one of the Government authorised redress schemes which provide dispute resolution as an alternative to court and improve industry standards* • be registered with the Information Commissioners Office to comply with data protection rules, as they handle personal information as well as their own privacy policy, and GDPR statement for those whose data they are handling • have client money protection, if handling money, and have a separate account**
* Who must join a redress scheme ** Who must have client money protection
Compliance is an essential first step before starting as a property sourcer. You must get your ducks lined up if you are to keep your clients safe and protect yourself from complaints or legal action. The landscape is also constantly changing so even experienced professionals need to keep up to date in order to keep on the right side of the law.”
