What is a buyer’s agent and do I need one?
- October 30, 2019
Whether you’re in the market for an investment property or your home, enlisting the help of a buyer’s agent is an option that is worth considering. Buying property is one of the most stressful and expensive life events that many of us will go through in our lifetimes and professional help can help ease that burden.
Searcing for the right property can be a full-time job. Identifying the right area, online searches, contacting various agents, it’s exhausting! If it all sounds a bit too hard basket a buyers agent can take a lot of the hard work away.
What exactly is a buyer’s agent??
A buyer’s agent is kind of the opposite of a real estate agent. A real estate agent’s job is to sell you a property and a buyer’s agent is there to help you purchase a property. A good buyer’s agent:
- Has excellent knowledge of the property market in the area you are looking to purchase
- Can provide advice on pricing and potential growth
- Has excellent relationships with agents and therefore gets access to off-market listings and other properties before they are advertised
- Is in regular contact with relevant shortlists of properties
- Can help take the emotion out of purchasing a property
- Will arrange for building and other inspection reports to be conducted
- Will bid for you at an auction
- Is an excellent negotiator and will help you bring the price of the property down
What does a buyer’s agent cost?
The cost of a buyer’s agent varies greatly. Some charge a percentage of the cost of purchasing the house and others have a flat rate.
When working on a percentage, many agents will set that cost as well. For example if you are in the market for a $1million property but are happy to spend up to $1.25million, you can negotiate with the agent to set the fee at the $1million rate. The flat rate seems to start at around $10K when purchasing a lower value property and varies from agent to agent for high value.
It’s standard practice for a buyer’s agent to charge an engagement fee prior to starting work and then the remainder of the fee is to be paid once the property as been purchased. This fee can be up to 50per cent of the total cost and is non-refundable. So, keep in mind that you will have to fork out some cash pre-purchase.
A few things to consider
Check to see if the buyer’s agent you’re thinking of engaging is a member of the Real Estate Buyers Agents Association of Australia (REBAA). This industry association has strict guidelines that members adhere to so that customers are seeing the best results.
Looking for an impartial buyer’s agent is imperative. Start by checking the agent’s website to see if they also sell property. Also, ask the agent straight up if they receive kickbacks on the sale of any property. Finally, go through your agreement with a fine-tooth comb, ensuring you look for any clauses about commissions received from third-parties.
We’re all leading busy lives, working long hours, socialising, raising families, educating ourselves and trying to keep fit and healthy. If you don’t have the time to find the right property, a buyer’s agent might be right for you. Make sure you do your due diligence and engage the best buyer’s agent for you.
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The views, information, or opinions expressed in this blog post are for general information purposes only and should not be relied upon. We have not taken into account specific situations, facts or circumstances, and no part of this blog post constitutes personal financial, legal, or tax advice to you. You should seek tax advice from your accountant, specific to your situation.