What is a Buyers Agent?
Are you wondering what does a buyers agent do?
A Buyers Agent or Buyers Advocate is the opposite of a selling agent, because they exclusively work for and are paid by the purchaser and act in their client’s best interest. They are licensed real estate agents and their job is to work for you and protect your interests. They help you buy the right property for your needs, at the right price, on the right terms and with unbiased advice. A Buyers Agent does not sell real estate!
What does a buyers agent do to make it worthwhile spending my money on one instead of me doing the work myself?
I’ll give you 5 reasons how a good Buyers Agent will help you;
- Their research saves you money – they know what’s really going on in the property market – after all they’re in it all day.
- Their skills reduce your stress. Buying a home or investment property can be about as nerve-racking as it gets. It’s emotional, exhausting and sometimes terribly discouraging. A Buyers Agents job is to make the process as hassle free as possible for you.
- Their experience saves you time – and this is one of your most precious assets. Using a Buyers Agent they can do all the property researching, searching, inspecting and property due-diligence which will also give you back your weekends from inspecting properties.
- Their industry knowledge levels the playing field – selling agents are not your friend, they represent their client – the seller.
- Due to extensive and strong agent relationships they have access to every property for sale and a good Buyers Agent even has access to “off market properties” that you may never find out about.
- Improve confidence to not overpay because you are being professionally represented.
Why doesn’t everybody use a Buyers Agent?
Actually, many people do, especially overseas. The process of buying and selling property in Australia is somewhat different to many other countries around the world. In America, for example, most people buying property are represented by a Buyers Agent and most people selling property are represented by a Sales Agent. In Australia, the role of a Buyer’s Agent is just emerging.
Why can’t a selling agent help me?
A selling agent must act in the best interests of their client – the seller. They do not, and should not, work for you – the buyer. We know some agents would like to work for both sides and have it both ways, but when you think about it, they cannot possibly do both effectively as this would create a clear conflict of interest.
How do I find a good Buyers Agent?
Not all buyers’ agents are the same. Here are some questions you could ask your Buyers Agent before engaging them:
- Are you a fully licensed real estate agent?
Be wary of hiring someone who doesn’t hold a real estate licence. There are many people out there calling themselves a Buyers Agent or Buyers Advocate who are not licensed estate agents.
- Are you a member of any property organisations or associations?
This should give you the reassurance that they are operating to professional industry standards.
- Do you have current professional indemnity insurance?
If something goes wrong with your property purchase, you will have absolutely no recourse if this is not the case.
- Are you a dedicated buyers’ agent?
Or are they just a division of a real estate agency.
They can’t offer a high standard of service when searching and negotiating for properties for their clients unless they are dedicated professionals focused on this process.
- Do you have access to “off market sales?”
Many properties that are sold never hit the public market. It is imperative that your buyers’ agent has personal relationships with all of the real estate agents in the area you are looking at purchasing in, so as soon as properties come up for sale you have access to these before they go to the general public.
How can a Buyers Agent add value?
Using a Buyers Agent may be worthwhile if:
- You don’t know the local market very well
- You are time poor and don’t have time to search for and inspect properties
- You keep missing out on properties that you like because other buyers act faster than you
- You are uncertain about what to pay
- You are frustrated dealing with Sales Agents
- You feel overwhelmed with the entire process or certain parts of the process
- You don’t know where to buy
- You are having trouble finding properties to buy
- You have found a property, but you are not confident to bid at auction
- You would simply prefer to be professionally represented.
How much do Buyers Agents charge?
This can be a fixed fee, but it is usually a percentage (1.5% – 2.5% plus Gst) of the final property purchase price. In terms of the fee structure, most buyer’s agents offer several options with prices differing accordingly:
- Full service
- Negotiation only
- Auction bidding service
There are several different ways to structure a fee agreement. For example, it could be a fixed fee for auction bidding or a percentage of the sale price for the full buyer’s agent service. If your buyer’s agent isn’t starting from this baseline, you must ask yourself why. Don’t be tempted to engage somebody just because they offer lower fees. If they can provide great service and add real value for their clients, they wouldn’t have to win new business by offering low fees. A lack of experience, especially in appraising what a property is really worth, can end up costing you much more than you might have saved in fees.
So what do Buyers Agents charge? Generally charge an engagement fee between $3,000 and $6,000 and will then charge the remaining as a success fee when they find the right property for you and successfully negotiate its purchase on your behalf. If you are considering buying a home in the near future, why not employ a buyers agent on your side, working for you and not the seller?
This blog has explained some of the benefits of working with a Buyers Agent. It is not for everyone, but for those who are looking to be professionally represented, there are huge advantages for property buyers.
If you’re looking at buying your next home or investment property here’s 4 way’s we can help you:
Why not get independent advice from our buyer’s agent and qualified property investment adviser at Monopoly Wealth to help you level the playing field?
- Property Portfolio Plan – Allow us to build a Property Portfolio Plan for you and your family to generate passive income. Click here to learn more about how we can help you.
- Buyer’s Agency – We’ll help you find your next home or an investment grade property without mistakes and avoid paying too much. Click here to learn more about how we can help you.
- Property Research – We can conduct research and provide you with tailored advice to avoid costly mistakes. Click here to learn more about we can help you.
- Mortgage Broking – We can recommend you to our investment savvy mortgage brokers. Click here to learn more about how we can help you