Buyer's agent fees
As with all contractors, the fees for hiring buyer’s agents vary depending on the level of service you choose, the scope of job you require and their expertise. Prices also vary depending on what state your property is purchased in.
As a very general guide buyer’s agents full service fees work out to typically be 1.5-2% + GST of the purchase price. This is similar to what most selling agents charge for selling a property. However, some buyer’s agents will negotiate a set or fixed fee in advance depending on price brackets, degree of difficulty and other search criteria.
For ‘negotiation only’ buyer agent services, where they are required to negotiate a property price before, during or after an auction, fees are typically set at 1% + GST of the total purchase price or an agreed fixed fee.
If you want to hire a buyer’s agent purely to bid at auction, fees vary from $500+ for each auction they attend, with a potential additional fee payable on a successful purchase.
Buyer’s agent fees also vary depending on budget, search area, specific brief aspects and/or degree of difficulty. Remember you’re paying an exclusive buyer’s agent to search specifically for you and to be completely independent and impartial. This is different to the service some selling agents offer where they have in house ‘buyer’s helpers’ that assist you to buy properties their colleagues are being paid to sell.
Retainer/initial fees
Most buyer’s agents will ask for a proportion of their total fee to be paid upon signing the contract. This initial fee can range from $1,000 to 50% of the total fee payable. Often that fee is non-refundable and sometimes a portion is refundable if the purchase does not proceed. Non-refundable fees are paid to compensate buyer’s agents for the amount of time they have spent searching for properties. Also known as chargeable time, this non-refundable portion should be stipulated in the contract prior to signing.
Fixed fees
Whilst many buyer’s agents do charge fees based on a percentage of the purchase price, they will often lock in a fixed price for your search so that there is no incentive for a higher price. For example if you’re looking at spending $1m – $1.5m they may fix the fee regardless of whether the property costs $1m or $1.5m.