A Buyers Agent is a licensed real estate professional who specialise in searching, negotiating and purchasing property. They represent the buyers interests in a property transaction.
On the other side of the transaction, the selling agent has the legal and ethical responsibility to achieve the highest possible price and best terms for their clients, the vendors. A selling agent cannot impartially represent a buyer regardless of any rhetoric that you may hear.
Buyers Agents represent all types of property purchasers and can assist with the purchase of both residential and commercial properties. Buyers Agents (also known as buyer’s advocates) have been around since around the late 1990’s. Since then buyer’s agents have grown considerably in popularity throughout the capital cities and major regional areas.
Who Would Find a Buyers Agent Useful?
- Those with little real estate knowledge and/or experience
- Overseas, interstate and regional buyers
- Busy executives, working couples
- Property investors seeking to identify key areas for growth and rental return
- Those seeking confidentiality
- Buyers not wanting to deal directly with selling agent
- People intimidated by auctions
What does a Buyers Agent Service Offer?
A typical buyer’s agent will offer a range of services including:
A buyer’s agent will search for suitable properties based on your unique purchasing requirements and then follow through on all matters until the completion of a deal. They will firstly advise on what is realistically achievable with a specific budget and the best areas for capital growth potential.
Once the search criteria is established the buyer’s agent will go out into the market place and screen and inspect all properties that fit your criteria. Naturally, only suitable properties will be recommended for viewing. Details of the recommended properties will be accompanied by extensive digital photos, floor plans and website links where possible. Inspections will then be organised, as well as transport to the property if required.
Once you decide on a property, the buyer’s agent will:
- give you a professional appraisal and price guide
- advise on the best strategy to purchase the property, depending on the sale circumstances (auction or private treaty)
- arrange all of the other necessary services such as building and pest reports, strata reports and conveyancing. Other assistance may involve the appointment of a property manager for investor rental properties, recommending contractors for building work or even managing renovations for the client.
If you find a property and want an independent analysis, rather than simply relying on the vendor’s or agent, the buyer’s agent can assist. The buyer’s agent’s report will usually involve research into comparable recent sales and an objective opinion of the positives and negatives of the property, as well as a price estimate or range of what the property is worth in the current market.
The fine art of negotiation can be a difficult matter if you are an inexperienced property buyer. A buyer’s agent will establish all the information useful for negotiation (eg, length of time on the market, price the vendor paid for the property, whether the vendor has bought elsewhere, etc) and then develop a strategy to secure the property for the lowest possible price and best contract terms.
The buyer’s agent is aware of all the tricks used in the auction room and they will be able to make confident and calculated bids to try to outwit the other bidders. They also understand all of the laws regarding auction procedures and registration, and will be able to manage all of the relevant paperwork on your behalf, particularly for bidding nomination forms, powers of attorney and deposit payment alternatives.
The benefits of using a buyer’s agent
By using a buyer’s agent, you will gain a number of benefits:
- a full property search service will save you time and stress
- a buyer’s agent’s negotiation skills and knowledge can save significant amounts off a property’s asking price and/or a your purchasing budget
- you will gain access to all listed and unlisted properties on the market
- you won’t have to deal with selling agents directly and be confronted with the high pressure sales talk
- buyer’s agent’s have online databases of all comparable recent sales to help establish a property’s real worth and ensure you don’t pay too much, which is particularly important in the current market
- you will have professional representation to counter the skills of the selling agent
- you will have confidentiality, particularly if you have made offers which have been rejected on a property and want to remain anonymous to the selling agent. This is also useful for high profile community members
- the emotion is taken out of the purchasing process ensuring you do not overpay
- buyer’s agents can help you find properties with good capital growth potential and better rental returns.
How to find a buyer’s agent
The best to find a buyer’s agent is to get a referral from a friend or associate who has used one before. Alternatively you can do a search for a buyers agent on the REBAA (Real Estate Buyers Agents Association of Australia) website. REBAA is Australia’s leading professional body for buyer’s agents. By choosing a REBAA member, buyers can be confident they are dealing with an experienced and professional buyer’s agent.
How to select your buyer’s agent
Ensure that your buyer’s agent has a full real estate licence issued by the relevant state government authority. The licence requires several years of real estate experience as well as educational qualifications. Some newcomers to the industry are issued with a conditional buyer’s agent licence that can be obtained with limited experience.
It is always a good idea to see a copy of the buyer’s agents property licence. Check how long the buyer’s agent has been in business, ask for detailed references and enquire about their experience in the area that you are looking at buying into. Ensure that the buyer’s agent is not owned or aligned to a selling agency or developer.
It is better to select a buyer’s agent who gives a fixed price quotation for their services. Buyer’s agents who charge a commission on the total purchase price for their services will hardly have the personal incentive to get you the lowest possible price on a property purchase.
Full property search service
Prices vary significantly between 1 to 2.5 per cent of the property purchase price for this service. It will be either in the form of a fixed quote based on the buyer’s purchase price budget or a direct commission on the final sales price. A retainer is usually charged at the commencement of the search, mainly to ensure that the buyer is committed to buy and to cover initial costs incurred with the search.
The charge on a property that you have found yourself can vary between a couple of thousand dollars for a success fee through to 1.1 per cent of the purchase price for the more expensive operators. Some buyer’s agents will also work on an incentive basis where they may take a percentage of the money saved from the asking price in a private treaty sale.
Charges usually depend on the outcome of the auction and will have two components – attendance without success is usually around $500-$600, and attendance with success can vary between $1000 and $1500. The cost of a buyer’s agent’s fees are tax deductible for investment purchases.
If you have any queries about the Sydney property market or selecting a buyer’s agent contact Henry Wilkinson for your free property consultation.