Buying a home is one of the most important things you’ll ever do, but it can also be overwhelming. A buyer’s agent is an intermediary between the buyer and seller of a property, simplifying the entire home-buying process. They manage all the stressful aspects of purchasing a home so you don’t have to.
As a buyer’s agent with decades of experience, and through my added experience in the finance industry, I’m no stranger to negotiating for the best price for my clients in New South Wales and beyond. I’ll use that skillset as your buying agent to get you the best price possible for the home of your dreams.
From identifying the best properties to negotiating favourable terms, my expertise as a real estate buyers agent ensures you secure a home that fits your needs and budget.
In this article, I’ll break down what a buyer’s agent is, how we can help you buy a property and whether it’s the right choice for you when buying your first home.
What Does A Buyer’s Agent Do?
A buyer’s agent, sometimes called a buyer’s advocate, is a type of real estate agent responsible for helping home buyers navigate the home buying process. They are licensed real estate agents in their state or territory but represent the best interests of a home buyer.
Buyer’s agents and selling agents are two sides of the same coin. Selling agents represent the best interests of the property seller, and the two often work together to negotiate the purchase prices of homes.
What Services Does A Buyer’s Agent Offer?
Buyer’s agents like myself offer many services to our clients that span the entire home-buying process. Here are some of the primary services I offer to my clients.
- Help with a property search based on buyer’s criteria.
- Provide market analysis and property evaluation to ensure you’re getting a fair price.
- Negotiating a purchase price with a seller’s agent or with sellers directly.
- Assistance with legal documentation and processes.
- Provide optional bidding representation on homes purchased at auctions.
Real estate buyer’s agents can be hired to perform any one of these services or all of them.
How Much Does A Buyer’s Agent Cost?
Buyer agents generally charge a percentage of the purchase price of your home relative to the job they’ve been hired to do. Fees can vary greatly depending on the location, property value and the job they’ve been hired to do. The job structure is broken down into three types:
- Full service.
- Appraisal and negotiation.
- Auction bidding.
There are two common fee structures:
- Commission: The above-mentioned percentage of the purchase price. A buyer’s agent commission rate generally ranges from 1.5% to 3% of the final purchase price of the home, plus GST.
- Fixed fee: If you’re not hiring a full-service buyer’s agent, they can also charge a fixed fee for their services. Although this fixed fee varies depending on the complexity of the purchase, it is generally a cheaper option.
Fixed fees are most suitable for simple purchases or hiring a buyer’s agent for a specific part of the home-buying process, like negotiation only or representing you in auction bids.
Related: How to Calculate Equity in Home (Step By Step)
The Benefits Of Using A Buyer’s Agent
There are many benefits to using a buyer’s agent when buying a property, particularly if you’re buying your first home. Let’s go over these benefits below.
Access To A Wider Range Of Properties
Rather than driving endlessly around the area where you want to purchase property, hiring a buyer’s agent will save you time and energy. They have access to a wider range of properties and can search through property databases you won’t have access to. They can also search auction websites for biddable properties that match your budget.
Expert Negotiation Skills To Secure A Better Deal
Buyer’s agents are typically good with people and have excellent negotiation skills. Their understanding of the Australian market is unparalleled, and they use this knowledge to their advantage when negotiating property purchase prices. They’re experts in communication and work to get you the best deal possible.
Saves Time And Effort In Property Searches
If you’re buying your first home, you already have a lot on your mind. Buyer’s agents take all of the extra effort and stress off your plate by doing the property search for you. Whether they use local contacts, online databases or auction websites, hiring a buyer’s agent will save you time and effort that you can put toward ensuring that you’re ready for the big move.
Provides Guidance And Support Throughout The Buying Process
Buyer’s agents understand that buying a home can be a stressful process, but they’re here to provide you with all the support you’ll need. Whether you need guidance on which property might suit your needs and budget best, or help to find financing options through a mortgage broker, credit representative or dealing with the Australian credit bureaus to finance your home purchase.
Acts As An Objective Party To Ensure Fair Deals
Buyer’s agents are required under ethical obligations to remain objective in offering their assistance to home buyers. While they do represent the home buyer’s best interests, they work to avoid conflicts of interest and ensure that fair deals are struck.
Related: How to Get a Private Loan (and Why You Should)
How Does A Buyer’s Agent Get Paid?
I’ve already mentioned that buyer agents are paid a percentage of the final purchase price of a home, plus GST, or a fixed fee for a particular service, but exactly how do they get paid for their services?
- The buyer’s agent fees are typically paid by the buyer.
- This fee is typically negotiated upfront when hiring a buyer’s agent and is stipulated in a contract, along with any associated condition of their services.
- A third party can pay the buyer’s agent fee instead of the buyer, but this must be stipulated in the buyer’s agent agreement. These are less common circumstances, but they are still possible.
Is A Buyer’s Agent Right For You?
There are many factors to consider when deciding whether a buyer’s agent is right for you in your quest to buy a property. These factors include:
Your Budget
What is your budget for your dream home? Do you have enough money to buy a property and pay the 1% to 3% buyer’s agent fees on top of that? If not, you may consider the cheaper option of hiring a buyer’s agent for a specific part of the purchase process or bidding at auction for house and land packages.
Time Constraints And Availability For Property Hunting
Many people who want to buy a home simply don’t have the time to go searching for their dream home. They’re busy with jobs, kids and all manner of other time constraints.
By hiring a buyer’s agent, you’ll give them the task of locating and compiling a list of ideal properties that fit within your budget, desired location and any other considerations you’ve mentioned in conversations with them.
Complexity Of The Buying Process
Real estate purchases can be complicated. Strongly consider hiring a buyer’s agent if you’re in one of the following situations:
1. First-Time Home Buyers
For first-time home buyers, the purchase process can be a bit daunting and overwhelming. That’s where buyer’s agents shine. They take all of the stress, time, and effort off your plate. Buyer’s agents can also help negotiate financing options, so you won’t have to deal with the bank, mortgage brokers, or other home loan companies.
2. Purchasing In An Unfamiliar Area
Buyer’s agents always have their ears to the ground for the latest ‘steal of a deal’ on properties in their local area. Even if you’re looking to buy a home in an unfamiliar area, your buyer’s agent will have access to property databases and local contacts to find your ideal property in an area that you love.
3. Investment Properties
Some people who buy an investment property will use a buyer’s agent to ensure they’re getting the best deal for a return on investment.
Related: How do First-Home Buyers Obtain a Loan?
Frequently Asked Questions
As a real estate professional, I receive all manner of questions about using a buyer’s agent. Below are some of the most popular ones.
Do You Need A Buyer’s Agent To Buy Property?
In short, no. You don’t need a buyer’s agent to buy property. For very simple transactions, such as inheriting a property from a deceased relative or buying a house and land package at auction, you may not feel that a buyer’s agent’s services are warranted.
However, it is a good idea to hire a buyer’s agent if you’re a first-time home buyer or are dealing with a more complex purchase process.
Can You Ask A Broker For A Buyer’s Agent?
Yes, you can. Mortgage brokers work with both sides of any property negotiation, including the seller’s agent.
Can The Seller’s Agent Represent The Buyer?
Legally, it depends on the laws in your state or territory. In Queensland, for example, it is illegal for an agent to represent both sides of a real estate sale because it creates a clear conflict of interest. Even if it isn’t illegal for a seller’s agent to represent the buyer of a property, it is most definitely unethical because of this conflict.
Does A Buyer’s Agent Need A License?
Yes. While certain rules vary by state, Australian buyer’s agents must hold a real estate license to act as a buyer’s agent. Bear this in mind when conversing with buyer’s agents.
They should always have their physical license on hand in their offices or readily available as a PDF in electronic correspondence. Verify this license with the local authorities before proceeding with any contracts or financial exchanges.
Summing Up
When buying a house, you want to ensure you’re making the best investment possible. Using the guidance and expertise of a buyer’s agent will save you time, money and effort in the long run, despite the buyer’s agent fees. It’s essential to use a buyer’s agent if you’re dealing with complex purchases or are a first-time home buyer.
Are you a first-time home buyer in need of assistance? Or buying in an area that you’re unfamiliar with?
Feel free to contact me via email at tony@themortgageagency.com.au or connect with me on Linkedin. I’d be more than happy to use my years of experience as a buyer’s agent to help you secure your dream home at the best possible price. Check out The Mortgage Agency’s website to read our testimonials and explore how our company can best help you.
