There’s a lot to take into consideration when investing in property. The buying process can be pretty expensive between the stamp duty, legal fees, conveyancing costs, and of course the purchase price itself. This may leave you weighing up whether you really need the help of a buyer’s agent or not.

Here at Monopoly Wealth, we understand everybody’s property investment price bracket will vary depending on circumstances and disposable income levels. Much like buying shoes or clothes, there really is no one-size-fits-all number that any investor can fit into.

Any property buyers agency worth their salt will take into account the unique needs and goals of their clients. They will perform their due diligence and build a suitable property portfolio that is sustainable and provides a return on their investment that covers any buyer’s agent costs and then some.

The aim of this article is to demystify the fee structure of buyers agents in Australia. But before we talk dollars, we need to unpack the services that are provided by property buyers agents.

What do buyers advocates or agents do?

In its most simple terms, buyers agents assist you with the whole process of buying a property. More specifically, most buyers agents offer tangible services including:

• Performing research and due diligence to find the ideal property investment for you.
• Networking with local real estate agents, selling agents, mortgage brokers and lawyers.
• Negotiating purchase prices based on your goals and budget.
• Attending inspections and representing you, the buyer, whenever necessary (such as auction bidding etc).
• Organising all the legal stuff such as strata reports and pest inspections.

Beyond these tangible services, buyers agents can also provide a deep understanding of the property industry that will help you get the most out of your investment.

How is cost determined?

There are three different models that property buyers agents in Australia base their pricing off. Each buyer’s agent is different so you will need to consult with them to determine which model they use and how it will affect your budget overall.

The first pricing model is fixed fee. This means that the fee charged by the agent or advocate is pre-set and doesn’t change based on purchase prices. It could differ based on whether you’re using the full gold star research, inspection and negotiation service or simply recruiting the agent’s help for one particular part of the process. In general, this model can be priced as little as $2k and reach up to $15k and beyond for luxury investments. The greatest benefit of this model is that it is upfront so you know what you will be paying from the word go.

The second pricing model is tiered fixed fee. Like fixed fee, this model is preset but will change depending on the price bracket of the property purchase. Lower price brackets will incur a smaller fee while higher price brackets incur larger fees. With this model, you also have a solid idea of what you will be paying, however pricing brackets can cover a wide range so you may be paying the same amount as someone buying a more expensive investment property.

The third pricing model is a percentage of property purchase price. As the name suggests, this pricing model is completely dependent on the property price agreed upon, usually to the tune of 1%-3% overall. This model means advocate fees cannot be determined until negotiations are finished. 

Regardless of which pricing model a buyer’s agent uses, it is important to know that some may ask for a deposit or additional fees. This is dependent on services used, reports needed, interstate travel required, and other engagement fees.

Do I really need a buyer’s advocate or agent?

Ultimately, there is nobody that can decide whether or not you need a buyer’s agent except for you. If you are still stuck on your decision, here are some of the benefits of using a buyers agent:

• Saves you time if you’re a busy professional with no time to do all the busy legwork.
• Can represent you if you’re an interstate or international investor.
• Ensures a return on your investment if they have strong research and negotiating skills.
• Their local knowledge and network makes the process so much easier.

Ready to invest?

Monopoly Wealth stands out from the crowd because not only do we offer the full gold star search, inspection and negotiation service but we build you a tailored property portfolio based around your goals. We’re also proudly PIPA certified so you know you’re in good hands with us.

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