A buyer’s agent (or buyer’s advocate) is a real estate professional who works with potential buyers to help them find and purchase their ideal property.
In this comprehensive guide, we outline exactly how buyer’s agents do this and why it may be worth bringing an agent on board to help you with the purchase process of your next property.
What You’ll Learn From This Guide:
- What does a buyer’s agent do?
- What services does a buyer’s agent offer?
- Why should I use a buyer’s agent?
- How much does a buyer’s agent cost?
- How to choose a good buyer’s agent.
What does a buyer’s agent do?
Buyer’s agents draw on their experience and expertise in the property market to assist you with the entire process of buying a residential, commercial, or investment property.
By hiring an agent, you save the time and hard work involved in carrying out any number of different tasks, such as:
- Finding a Property – A good agent can use their resources to find suitable properties that meet your specific requirements, including off-market properties.
- Property Purchasing – Relying on their up-to-the-minute knowledge of the current real estate climate, buyer’s agents can serve as your representatives during the purchase process. Their job involves working to ensure that you get the best possible deal on a residential or commercial property.
- Post-Purchase Paperwork – If you’ve ever purchased a property, you’ll know how tedious and headache-inducing it can be to manage the financial and legal paperwork associated with a real estate transaction.
A reputable buyer’s agent simplifies the entire process by liaising with your conveyancer, advising on offer and acceptance contracts and managing the transfer of title deeds.
What services does a buyer’s agent provide?
Buyer’s agents typically offer three levels of service:
1. Full Service
Full-service support encompasses all of the tasks listed above, from finding a property to arranging inspections and property appraisals and securing you a good deal on your chosen property through either direct negotiation with the seller or bidding at auction.
2. Appraisal and Negotiation
If you’ve already identified a property you want to buy, an appraisal and negotiation service can be used to determine its true worth and negotiate a fair price with the seller.
3. Auction Bidding
If your chosen property is up for auction, a buyer’s agent can attend on your behalf. This not only saves you the trouble of doing it yourself but also ensures you won’t get swept away in the excitement and bid more than you can afford.
Why should I use a buyer’s agent?
Guidance and Expertise
Buying a new home can be a significantly stressful experience.
In fact, research carried out by insurance specialists Allianz Australia in 2019 reported that as many as 55% of Australians would rather stay in their current home for longer than go through the stress of buying a new property.
When you think about it, this makes a lot of sense.
For first-time buyers in particular, it involves navigating a whole new world of legalities, inspections, and endless property searches. This can all seem complicated and confusing, especially if you’re going it alone.
An experienced buyer’s agent can offer practical guidance and professional advice to simplify and demystify the buying process.
Example:
As a prospective buyer, there may come a time when you’ve whittled your options down to three potential properties all of which, at first glance, seem ideal.
Through a combination of property appraisals and in-depth knowledge of the local property market, an agent can guide you towards making an informed decision on which property to put an offer on.
Time Savings
For first-time buyers in particular, one big factor contributing to the stress of buying a new home is the sheer length of time it takes to find the perfect property, schedule tours and inspections, and navigate the closing process.
Finder’s First Home Buyers Report notes that it takes 20% of first-time property buyers a year or more to go from initial search to finalising the purchase of property, while 39% take between 3-6 months.
Even if you’re a more experienced buyer, buying real estate can still be a time-consuming process, which is why some choose to save time by having a buyer’s agent do most of the work for them.
Example:
Go it alone, and you’re likely to spend many hours researching a list of suitable properties. Once you’ve got that list of properties, you’ll then spend even more time travelling out to view those properties, most of which may prove to be not quite right after all.
Work with an agent instead, and they’ll take the time to narrow down your options to only those properties that really match your requirements, meaning you’re not wasting time viewing ill-suited homes.
Invest in Long-Distance Markets
Buyer’s agents can prove invaluable when it comes to purchasing a property in far-off locations.
Example:
Let’s say you live in Melbourne, but you’re relocating to Brisbane, or you’re a Sydney-based real estate investor looking to expand your portfolio with new properties in Perth.
Hiring an agent in those locations not only gives you access to local market knowledge but also saves you the time and expense of travelling back and forth to find a property and make a purchase.
Cost Savings
One of the biggest assets a buyer’s agent brings to the table is their in-depth knowledge of the local market. They can utilise this knowledge to negotiate a lower sale price than you may be able to come up with on their own.
Example:
If you’re looking at a $500,000 home, a buyer’s agent might identify comparable properties that recently sold for $480,000 and use that data to argue for a similar price reduction.
This could save you thousands of dollars even after your agent’s fees have been deducted.
How much does a buyer’s agent cost?
As you’ll read in our complete guide to buyer’s agent fees, the cost to hire a reputable agent varies depending on the level of service provided, the pricing model, and the location.
Typical costs range from 1.5% – 3% of the purchase price plus GST for full-service support and 0.75% – 1% of the purchase price plus GST for negotiations and appraisals only.
If your agent charges a fixed fee, this could range from as little as $500 for auction attendance plus a fixed success fee of $1,000 up to $25,000+, depending on the property price.
The table below outlines the typical fixed rate and percentage fees across Australia.
This is in addition to upfront costs such as an engagement fee (also called a retainer fee), which is later deducted from the final invoice.
How do I choose a good buyer’s agent?
Faced with a growing number of options, the key to choosing the best buyer’s agent for your next property purchase is all about finding an experienced professional who meets the following criteria:
- Licensed and registered – A legitimate buyer’s agent will have a legitimate real estate license issued by the relevant authority in their territory. Ideally, they will also be registered with organisations such as REBAA (Real Estate Buyers Agent Association of Australia).
These accreditations are a strong sign that your agent is above board and can be trusted.
- Local expertise – Can your agent demonstrate an in-depth knowledge of your chosen search areas? Do they have a proven track record of successful purchases in those areas?
- A positive reputation – What’s it really like to work the agent you’re considering? Look for reviews and testimonials from past clients to discover if they’re truly a good fit for your needs.
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FAQs
What’s the difference between a buyer’s agent and real estate agent?
The key difference between a real estate agent and a buyer’s agent is that the latter works exclusively with property buyers, while the former can work with buyers, sellers, or, in some cases, both.
What’s the difference between a buyer’s agent and a mortgage broker?
The job of a buyer’s agent is to help you find a property to buy and get the best price for it, while a mortgage broker’s job is to help you secure the financing for the purchase.
Is using a buyer’s agent worth the money?
Although buyer’s agent’s fees can be expensive, they’re worth the money as they can not only save you more on the cost of your purchase but also save you the time and effort it takes to secure the ideal property.
Do you need a licence to be a Buyer’s Agent in Australia?
Buyer’s agents need to be licensed to operate in Australia. Licensing requirements typically vary from state to state or territory.
What’s the difference between a buyer’s agent and a buyer’s advocate?
A buyer’s advocate is just a different name for a buyer’s agent. In some places, such as Melbourne, the term buyer’s advocate is more common, while in others, buyer’s agent is more widely used.
Who pays a buyer’s agent?
The buyer’s agent fees are paid by the property buyer. There will typically be upfront costs in the form of a retainer, with the remainder of the fee paid upon completion of a successful purchase.
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