What is a Buyer’s Agent and do I need one?
The term “Buyer’s Agent” used to be little known and is slowly becoming more commonplace. But what is it, who is it, and why is it important to “have one” in this market?
Firstly, a buyer’s agent is a property professional hired by home buyers to be their advocate and representative throughout the property buying process. These agents or “angels” (some may say) are distinctly in the corner of the buyer, ensuring the buyer is properly guided, supported, and is represented fairly in an often cut-throat, seller-focussed real estate world.
A buyer’s agent is a licensed property professional who has extensive industry and market knowledge. Their main aim is to alleviate buyer’s stress, save time, and ensure the purchaser gets the best and most suited property at the right price.
It is the Buyer’s Agents role to find, inspect, negotiate and bid on the behalf of their property buying client. It’s a buyer’s agent’s aim to assist their client in feeling confident at all stages in the process, in control and well-versed at all times of the property buying journey. Having a buyer’s agent on your team is designed to relieve the stress and hassle throughout what some may say is the most challenging time of their lives.
Buyer’s Agents live and breathe property and can help provide that feeling of safety and certainty throughout the search, evaluation and negotiation of buying real estate on behalf of the buyer.
While a real estate agent or selling agent works for the seller/vendor of the property, a buyer’s agent works for you, the buyer. It is their absolute priority to ensure you find your dream home, or most perfectly suited investment, at the best price.
What does a buyer’s agent do?
A good buyer’s agent generally offers three types of services – a full service, a negotiation service, and an auction service.
The full service sees a buyer’s agent work with the buyer from day one to the day the contract is signed (and sometimes beyond). Using a client’s detailed criteria, they will search for the ideal property and negotiate the purchase of the property, whether by private sale or auction.
A negotiation service is often used where a buyer has already found the property they would like to buy but needs assistance with determining the true market value and negotiating the best price to secure the property.
Buyers may also enlist the help of a buyer’s agent purely to bid for them on a home they have already chosen at an auction. This service is particularly useful if the buyer lives interstate, or internationally. Some buyers prefer to be represented at auction, even if local, as having an experienced and objective buyers agent on the team for this purpose ensures they do not overbid or overpay.
How much does it cost?
The price of a buyer’s agent will vary from agent to agent.
Generally speaking, buyers agents charge an upfront engagement fee to commence the property search. Upon successful sourcing, negotiation, and exchange of contracts, the Buyer’s Agents will also charge a success fee. This is usually a percent of the purchase price. We see the industry average range between 1.5 to 3%, although Buyer’s Agents can determine what they charge as there is no defined industry standard.
The purpose of engaging a buyers agent is to ensure that their fees enable you, the buyer, access to property that you wouldn’t have had access to otherwise. They purchase real estate that compares fairly to the market at that time. Their fees are designed to be a good investment. The ultimate aim for the buyer is to save money in the process rather than overpay for their property, and to avoid purchasing the wrong property that could lead to unexpected property costs and hidden traps in the future. Ultimately, a buyers agents role is to mitigate risk for the buyer, and it has been well-documented that the investment in this service pays off time and again.
Some Buyer’s Agents charge a flat fee or scalable fee determined by the purchase price. We see this trend in the property investment space rather than the owner-occupier space, typically.
Auction bidding services usually have a lower price tag attached as no due diligence is performed. In it’s place are strategic conversations around auction tactics, budget limits, and allotted time for post-auction negotiation if the property is passed in.
P.S. Keep in mind all Buyer’s Agent fees may be tax deductible if the property is an investment.
Why use a buyer’s agent?
A buyer’s agent is like your very own VIP property search professional. They will have great relationships and connections throughout the real estate industry which enables them to be invited to inspect properties that are off-market. Even if you have trawled the internet and know all the stock available online, there will certainly be properties that the Buyers Agent has exclusive access to, and can inspect before anyone else, on your behalf. This means the general public will never be competing for the same properties, and this gives you a much better chance of getting a good price and an often quicker sale. A buyers agent will also have inside knowledge of market trends in the area so you can feel confident that your investment and purchase is a wise one.
They save you precious time
One of the most challenging parts of the property search is working around busy work, family and life schedules to find the perfect home. Countless hours, days, weeks, and sometimes months can often be spent scrolling through thousands of properties online, travelling, and spending weekends viewing properties.
Tell a buyers agent exactly what you are looking for, and they will do the searching for you saving you countless hours – with the added bonus of full access to off-market stock. How would you like to get access to more stock and have less competition from the other buyers out there?
They can give insider tips
If you are buying an investment property, a buyer’s agent will be a valuable asset to you. They can help you source the right type of property in the right locations with great opportunities for capital growth.
A buyer’s agent has a deep understanding of the property market and will ensure you make the best decision financially.
They are expert negotiators
This is one of the most common reasons people use a buyer’s agents. Negotiating can be daunting, especially with persuasive selling agents, and particularly for first homebuyers. For even the most seasoned negotiator buyer, if they’re unable to access off-market stock or if they’re not completely across the market trends, they can very easily end up overpaying without the use of a Buyer’s Agent by their side.
Bidding at auction can be an emotionally daunting task, with buyers often making decisions with their hearts instead of their head. Emotion can be the biggest price drive when purchasing a property, and it can seriously cost a buyer in the long-term.
Enlisting the help of a buyer’s agent will help avoid any of these issues occurring and ensure a buyer makes the best decisions when it comes to purchasing a home.
Buyer’s agents are there to guide the buyer, keep a logical mindset and keep the emotion out of the transaction, therefore buying at the lowest price.
They also know all the tricks of the trade and often use their expert negotiation skills to get a better-than-expected purchasing price.
How do you find a good buyer’s agent?
Like anything, research is key when making a decision to find the right buyers agent to assist you in your real estate journey.
A few things to consider…
Are they local to the area that you’re buying in? Having a feet-on-the-ground representative ensures that you have the best knowledge of the nuances of each suburb/township within an area. The best (and worst) streets are known. Lifestyles factors, conveniences, transport options, council plans are all well understood by the buyers agent. Get yourself a local buyers agent to alleviate any buying mistakes.
Check out their reviews on Google, and other platforms. Get in touch with some of the reviewers and ask their opinion.
Take advantage of a 15 min obligation-free discovery call to determine if it is a good fit to work together. Like many success stories, having a good rapport and feeling that “click” will make the process so much more enjoyable. Nothing worse than paying money to a person you feel doesn’t fully understand you or you don’t have full confidence in.
Ensure your buyers agent has a lot of experience with sales, negotiation, and in the property and building industry. Seek to understand what accolades, licences and reputation the buyers agent and their agency has within their industry and within their individual careers.
Be certain about what you’re looking for in a property. Sometimes it’s easier to say what you would not like to see in a property. Shortlist these criteria and be clear and transparent with your buyers agent to get the best out of their service.
But most importantly, let an industry professional show you how much more seamless and enjoyable buying real estate can be. That peace-of-mind and getting your time back probably will be the wisest decision you’ll ever make.
To ensure you buy the best property at the right price give our team a call now on 0418 797 701.