Do I need a Buyer’s Agent when buying a house?
Buying a home is a major life step. It can be exciting, fun and more than a little intimidating. For many home buyers, it can feel as though the property market is stacked against them, particularly because real estate agents work in the seller’s interest.
To help ease the stress and uncertainty, many people turn to buyer’s agents when buying a property. Having an expert in your corner can help balance the scales while giving you the guidance you need to purchase with confidence. It is important to remember that even a parent may wish to help advise you, but they may have only bought or sold a single property in the last 10 years, whereas a selling agent does this full time and probably sell a few a week!
But what is a buyer’s agent, and what do they really do? In this article, we’ll be exploring the benefits of buyer’s agents – plus some of the drawbacks – and how to decide if you need one.
What is a Buyer’s Agent?
A buyer’s agent – also known as a buyer’s advocate or a property advocate – is an expert in purchasing property. They specialise in finding and evaluating a property, as well as negotiating prices or bidding at auction on your behalf.
Compared to a real estate agent who works for the property seller, a buyer’s agent’s (who is also a registered Real Estate Agent) job is to represent the interests of the home buyer.
What Exactly Does a Buyer’s Agent Do?
How much your buyer’s agent does is up to you. Here are some of the services they may offer:
- Identify your needs: This can include things like location, land size, proximity to shops, schools zone boundaries, rental yield, and more.
- Find properties that meet your specifications: Your buyer’s agent can create a shortlist of potential matches and organise private inspections.
- Research and carry out due diligence: Your agent can conduct an assessment of a property or location and report back to you with their findings.
- Negotiate on price: Your agent can make an offer and negotiate with the seller and their agent on your behalf.
- Bid at auction: Some buyers engage an agent purely to bid for them at auction, taking the emotion out of the process, plus also if they can’t physically attend or want additional privacy.
How to Pick a Buyer’s Agent
Here’s a brief list of things to look out for when choosing a buyer’s agent:
- Experience: Property cycles typically last between 7-10 years, so you’ll want to find an agent with over 10 years of experience who’s seen both the ups and downs in their target areas.
- Accreditation: They should be a licenced Real Estate Agent in the state or territory that you are buying property in, and be a member of REBAA (Real Estate Buyers Agents Association of Australia). If they’ve won awards for their work, then this is a huge bonus.
- Results & Feedback: High Trust Pilot, Google, Facebook scores and lots of positive (real) reviews/feedback from past clients.
- Independence: Your agent should represent your interests, not theirs. If they (or their Agency) also sell the property, for example, then they may not have your best interests at heart. In Victoria (like most states), the law says that Real Estate Agents (which includes Buyers Agents) can only be paid by one party (eg the Seller OR the Buyer, not both).
- Local: An agent who has in-depth knowledge of the area may have insights that a generalist may not be able to provide.
- Connections: Having the right connections to valuers, home inspectors, solicitors/conveyancers, and especially selling agents can be a huge advantage when buying a property (especially ‘off-market’ ones that haven’t been publicly advertised yet).
- Likeable: If you don’t like your agent, it’s going to be hard to work with them. Choose someone you get along with. Sometimes, to help you get a result, a buyers agent may need to chase you up for information, or require you to make important decisions in a timely manner.
Do I Have to Pay My Buyer’s Agent a Commission?
So how much does a buyer’s agent cost? And how do they charge?
In Australia, buyer’s agents typically operate on one of two fee structures: fixed fee or commission. Many charge an upfront ‘engagement fee’ before commencing work, while the rest is paid after their job is done.
The fixed fee will vary based on the services you request, ranging anywhere from a few thousand to well over $10,000. If your buyer’s agent works on commission, the fee typically ranges between 1% to 3% of the property’s purchase price. Some will do a combination of this eg a fixed engagement fee, then a % of the overall final price.
What are the Benefits of a Buyer’s Agent?
So is a buyer’s agent worth it? To help you decide if you need a buyer’s agent, start by considering the benefits.
- Save Time: Your buyer’s agent will do most of the heavy lifting when it comes to researching and locating properties. Once you’ve discussed your needs, it’s their job to create a short-list of properties that match your requirements.
- Access Off-Market Properties: Sometimes it’s not what you know, it’s who you know. A well-connected agent may get you access to off-market and pre-market properties.
- Save Money: Your buyer’s agent has likely been negotiating deals and bidding at auctions for many years, so there’s a good chance they’ll be able to negotiate a better deal than a buyer could ever hope for.
- An Objective Party: Many of the mistakes made when buying a house come down to home buyers letting their emotions cloud their judgement. A buyer’s agent will remain objective to ensure the best outcomes when purchasing a property.
- Make Informed Decisions: Buyer’s agents can provide you with all the advice, information, and market research you need to make a good purchasing decision. Their expert knowledge can also help identify potential problems and direct you away from bad investments that may have seen you stuck with a lemon.
Are There Downsides to Using a Buyer’s Agent?
Now that you’re familiar with some of the benefits of enlisting the help of a buyer’s agent, it’s time to explore some of the downsides:
- Fees: Buyer’s agents often charge five-figure fees.
- Communication: Poor understanding or communication can result in your agent shortlisting unsuitable properties.
- Overlooked gems: No one knows your mind better than you. An agent may overlook properties that you would have loved if you’d seen them in person.
- Finding an agent: Finding a reliable agent that you trust can be almost as challenging as finding your dream home.
Deciding whether you need a buyer’s agent is a very personal decision. While there are many advantages to having an expert representing your interests, it can be difficult to trust such a life-changing decision to a stranger. Buyers Agents really shine and add the most value when finding you a very specific property matched to your unique needs, especially for an established property in an area that you’re unfamiliar with prior to it being advertised to the public.
If you choose to work with a buyer’s agent, pick someone who’s experienced, accredited, independent, and has lots of great connections. Don’t be blinded by credentials either, as their personality needs to be a match as well. Having the best buyer’s agent in the world isn’t going to matter if you don’t like them or struggle to communicate with them.
Looking for Your Dream Home?
From house-and-land packages to townhouses, at Eynesbury Estate we have a variety of home options to suit every lifestyle and budget. We also have plenty of land for sale, ranging from premium blocks to smaller lots for budget-conscious buyers.
Demand is high, so get in quick or contact us today to discuss upcoming releases.