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From scouting for properties to final settlement, buying a property is stressful and time-consuming at the best of times. Enter the buyer’s agent. Sometimes called buyer’s advocates, these licensed professionals help you navigate the property market and find your dream home or investment at the best possible price. In exchange, they charge a fee or commission.
What does a buyer’s agent do?
A buyer’s agent specialises in researching, evaluating and negotiating a property purchase on behalf of an interested buyer. There are 2 main services an agent can perform for you:
Sometimes referred to as full service, this is a common option if you’d like assistance with your purchase from start to finish. It includes searching for properties that meet your criteria, negotiating the sale price and bidding at auction.
Auction bidding only
You can also employ a buyer's agent just to bid on a property that you have found yourself. Auction bidding is not for the faint-hearted, so it can be helpful to have an experienced professional represent you on the day. This option is often taken up by interstate or overseas buyers.
How much does a buyer’s agent cost?
Like most things related to buying a house, buyer’s agents don’t come cheap. Fees vary according to the services the agent is employed to perform and usually fall into one of these categories:
- Fixed fee. Some agents may lock in a flat rate or fixed fee, which is usually segmented into price brackets according to the value of the property you’re looking to purchase.
- Commission. Usually charged at 1.5–3% of the final purchase price, plus GST.
- Retainer. Be mindful that regardless of whether an agent is using the fixed fee or commission model, you may be asked to pay an upfront fee of anything from $1,000 to 50% of the total fee payable.
In spite of the cost, provided you do your research and choose an agent who’s transparent about their fees from the outset, a buyer’s agent could save you significant money in the long run.
The benefits of using a buyer’s agent
Working with an experienced agent can make a significant difference to your property purchase. Agents can help with:
- Expert insights. A good buyer’s agent has extensive knowledge of different markets and can help you locate properties in areas with strong capital growth potential.
- Time savings and reduced stress. The services of a buyer’s agent can reduce your stress and save you from having to spend your own time researching the market, scouting different locations, inspecting multiple properties and negotiating competitive deals.
- An objective view. Choosing a property can be an emotionally charged process, particularly if it’s a home where you plan to raise a family. By providing a candid and professional opinion, a buyer’s agent can guide you towards a strategic investment and ensure you don’t overpay.
- Early property access. Well-connected agents can access off-the-market properties, which means you’ll be able to pip your competition at the post and inspect properties before they’re even advertised for sale.
- Professional negotiation. Attending an auction can be intimidating, particularly if you’ve never bid on a property before, so it’s beneficial to have someone representing you who knows when to bid – and when to throw in the towel.
How to find a good buyer's agent
Choosing the right buyer’s agent could be the difference between finding your dream home and investing in a dud. One word is key and bears repeating: research, research and research.
Being clear about your objectives from the get-go is essential if you want to find a buyer’s agent who meets your expectations. Explain your budget, exactly what sort of property you’re after, your location preferences and, if applicable, how you want the property to complement your investment strategy. Then it’s time to make the potential buyer’s agents really work for your business.
Questions to ask a prospective buyer's agent
Once you have a shortlist of potential agents, ask each of them a set of questions to narrow the field even further. Treat this as though you’re interviewing someone for a job:
- How much experience do you have? Consider buyer’s agents with at least 5–10 years of experience to ensure that they have the skills and expertise to identify good investment opportunities.
- Are you an exclusive buyer’s agent or do you also sell property? This question will help you identify whether there is a potential conflict of interest. The last thing you want is pressure from buyer’s agents who are attempting to steer you towards purchasing one of their properties.
- What previous purchases have you made in my preferred location and/or price range? Can they walk the walk? Ask to see at least 10 examples of previous buys in the locations on your hit list, as proof of local knowledge.
- How extensive is your network of contacts? Real estate is all about who you know, and a well-connected buyer’s agent could help you snap up properties before they even hit the market.
- Are you a member of REBAA? The Real Estate Buyers Agents Association of Australia has strict admission criteria and all members are accountable to a professional code of conduct.
- What is your fee structure? This is a no-brainer. Ask exactly how much the agent charges, then check that amount against the industry standard for buyer’s agent commissions and fees.
- Why should I use your services over another buyer’s agent? This is an opportunity for agents to convince you that they are able to offer you something their peers can’t. Keep an ear out for empty sales-speak and unrealistic promises.
- Can I talk to some of your previous clients? First-hand testimonials will give you unfiltered insight into whether the buyer’s agent can truly deliver. Alarm bells should start ringing if this request is declined.
More questions about using a buyer's agent
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