What is a buyer's agent?
Buying 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 is a licensed real estate 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 full 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:
A ‘wish list’ analysis to understand your requirements to determine your ‘needs’ versus ‘wants’. We work on identifying 4 must haves and 6 nice to have criteria’s in helping you identify the key parameters that must be in your desired property. Our Buyers Agency work includes but not limited to the following:
- Search available listings
- Inspect and short-list suitable properties
- Evaluate recent sales data and provide a written appraisal
- Oversee and arrange due diligence such as building inspections, pest, survey and engineering reports
- Negotiate the property purchase price and terms
- Oversee the contracts and exchange
- Pre-settlement inspections
- Settlement
- Asset/property management/leasing(Through our partners)
Why & When to Use Buyer’s Agent?
Buyer’s agents are licensed real estate professionals who specialize 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 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.
Please note that Latitude 33 Property & Education provides both Real Estate Sales and Buyer’s Agency services, based on your needs we agree on the type of service and all fees and charges are discussed upfront before we commence our clients work.
Benefits of using a buyer's agent
A buyer’s agent helps you:
- Gain an edge by having your own advocate who is representing your interests 100% throughout the purchasing process.
- Understand the complexities and processes of buying by providing objective information, advice and support.
- Save time by searching for and analysing property on your behalf. Having someone do this for the buyer often results in a more efficient and faster outcome.
- Negotiate to obtain the very best price and terms.
- Source the correct property in the right location with better prospects for capital growth and/or rental yield.
- Access databases and information not readily available to the public, including increased access to properties off market.
- Eliminate stress by having one representative looking after your needs, rather than dealing with several different selling agents.
How do I choose a buyer's agent?
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 ensure the following:
- How experienced is the buyer’s agent?
- Do they have a solid local knowledge of the area they’ll be searching in for you
- What qualifications do they have?
- What are their most recent purchases?
- Can they provide recent client testimonials/references?
- Do they own property themselves?
- Do they have the contacts to find you the property that best suits your criteria?
An important question to ask a buyer’s agent is whether they are truly “exclusive” or “independent”. Get their service proposition and terms in writing before you assign them your work.
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 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 $400-$600+ 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 $1.5M or more – they may fix the fee regardless of whether the property costs $1.5M or more.
Property Buyers
If you’re looking to purchase a new home, investment, retail or commercial property,
please contact us.