If you’re looking to purchase a new home, investment or commercial property, a REBAA accredited buyer’s agent can help.
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Find Out About JoiningBuying a new home or investment property is likely to be the biggest purchase you’ll make in your
lifetime, so it pays to understand how the real estate game works.
If you’re just starting out, you probably haven’t heard of a buyer’s agent. Just like real estate agents
who help you sell a property, a buyer’s agent, or buyer’s advocate, is a licensed professional who
works for you and acts on your behalf to search, evaluate and negotiate a property purchase. They
aim to ensure you’re as fully informed as possible and that you don’t overpay.
Buyer’s agents can offer either full or partial services to help you find the ideal property. Full service
means the buyer’s agent manages the entire process for you, which includes:
Buyer’s agents are licensed professionals who specialise in searching, locating, evaluating and negotiating the purchase of property on behalf of buyers. They do not sell real estate. They are engaged independently and paid for by the buyer to act on their behalf. The key difference between a selling agent and buyer’s agent is who they represent as, by law, an agent cannot act for and accept a commission from both parties in the same transaction.
Buyer’s agents offer a number of different service options, ranging from complete searches through to auction bidding and single property reports. Their aim is to ensure that the purchaser is as fully informed as possible and doesn’t overpay for the property. Having an experienced buyer’s advocate on side who is familiar with suburb values and the purchasing process also assists in maintaining objectivity when it comes to negotiating the best possible outcome.
A buyer’s agent helps you:
Choose your buyer’s agent carefully. Selecting the right agent is likely to result in you making the right purchase at the right price, saving you both time and money. The results achieved by a buyer’s agent will benefit you in the long-term and should amount to substantially more than the fee. The choice of agent also comes down to who you feel most comfortable with, as a good relationship is also important in achieving a satisfactory outcome.
When choosing a buyer’s agent ask the following:
An important question to ask a buyer’s agent is whether they are truly “exclusive” or “independent”. If they accept sales commission from vendors or developers, then they cannot be classified as “independent” as they are acting in the interests of the seller. Independent buyer’s agents do not sell real estate or accept any fees for doing so.
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.
When looking to purchase a home, having the knowledge and expertise of a buyer’s agent on your side can ensure peace of mind when making your investment. Find your local buyer’s advocate by visiting our Australia wide directory today.
