There are two possible ways to go about the home-buying journey. If you feel confident in your knowledge of the market, you may be able to handle the entire process yourself. But if you are a first timer who is still learning the ropes, then enlisting the help of a buyer’s agent may be a better option.
But what is a buyer’s agent and what services do they offer? What will it cost to hire one? Let’s take a closer look.
What is a buyer’s agent?
The Real Estate Buyer’s Agents Association of Australia (REBAA) describes buyer’s agents, sometimes called buyer’s advocates, as licensed professionals who work for homebuyers, “acting on their behalf to search, evaluate, and negotiate a property purchase.” They also aim to ensure that homebuyers are “fully informed as possible and that they don’t overpay.”
A buyer’s agent is different from a real estate agent, who acts primarily for property owners in the sale of their homes.
According to REBAA, a buyer’s agent can offer either partial or full services. They will handle all aspects of the process. If you decide to take advantage of all the services, your agent will handle the following:
- Performing “wish list” analysis to understand your requirements to determine your “needs” versus “wants”
- You can search for available listings
- Shortlisting the most suitable properties
- Assessing recent sales data and providing written appraisal
- Assisting in the preparation of due diligence reports, such as pest, survey and engineering reports, by overseeing and organizing.
- Negotiating the terms and price of property acquisition
- Responsible for the supervision of contracts and exchanges
- Auctions: Bidding
- Pre-settlement inspections
- Asset/property management/leasing
How much will hiring a buyer’s agent cost you?
A buyer’s agent may charge a fixed fee or a percentage of the property’s purchase price. There is no standard for how agents charge clients. It is up to the buyer and their agent to negotiate the price.
A fixed fee can start at $2,000 and exceed $15,000, depending on the property’s value and type of services given. A couple of agents charge their clients using a two-tiered method. These include:
- A retainer or initial fee starting at $1,000, depending on the property’s value and payable when you sign up with them. If you do not wish to proceed with the purchase, this fee will cover their costs.
- A commission based on the property’s value and payable upon the completion of the transaction. The standard rate is 1% to 3%, and includes goods and services tax (GST).
Why should your hire a buyer’s agent?
There are many potential benefits of hiring a buyer’s agent. A good agent can ease the process for first-time or inexperienced buyers. Here are the things a buyer’s agent can do to make the process easier, according to REBAA.
- Interpreting sales jargon
- If you’re moving or buying in a new place, it is important to have local knowledge.
- You can remove the emotion from the process so that you don’t make an impulsive buy
- More properties available, including unlisted or premarket listings.
- Save money by buying the property faster and for a cheaper price
- This allows you to save time searching the internet, calling agents and inspecting open houses.
What should you look for in a buyer’s agent?
When picking the right buyer’s agent, it pays to practice due diligence. The right mix of industry knowledge, experience, and contacts is essential for a great agent. To help you screen potential agents, the REBAA has prepared a list.
- How long have you been a buyer’s agent?
- What are your qualifications as a buyer’s agent?
- What were your most recent purchases?
- What experience do you have in the area I’m searching in?
- Could you please provide references or testimonials from recent years?
- Do you own a property?
- Do you have the contacts necessary to locate the best property for me?
- Are you a REBAA-accredited member?
In today’s competitive housing market, having a good buyer’s agent can play a crucial role in helping you find your dream home or investment property at the best possible price. You should take the time to screen potential candidates. The right buyer’s agent should have the right mix of industry experience and interpersonal skills, making your home-buying journey a pleasant and memorable one.