What is a buyers’ agent?

So, you’re doing the regular weekend real estate rounds, lining up for the open for inspections behind 50 other people, discovering the price is severely under-quoted, attending auctions and watching the price go sailing over your head, and walking away quite disheartened from the whole property buying process. Is there a better way? Can there be a shortcut to success? Does anyone represent the buyer? What is a buyers’ agent?

What is a Buyers’ Agent?

Buyers’ agents are licensed real estate professionals that exclusively represent home buyers and investors in purchasing residential and commercial property. A Buyers’ Agent specialises in searching, evaluating and negotiating the ideal property on behalf of the buyer.

Is a buyers’ agent the same as a real estate agent?

The key distinction between a buyers’ agent and a traditional selling agent is who they represent. A buyers’ agent works solely for the buyer, while the selling agent works for the vendor (seller). An agent that represents the buyer does not sell real estate. The law prohibits a real estate agent acting for both buyer and sell on the same transaction.

What does a Buyers’ Agent do?

The first task of the Buyers’ Agent is to create a “buyers brief” by listening to the individual requirements of the buyer and documenting the clients’ stated budget, property features and suburbs they prefer (or if they are an investor, guiding them on the correct property investment strategy to achieve their long-term goals). The buyers’ agent responsibilities start with ensuring that the requirements are realistic and achievable in the current market conditions for their budget.

The next step is to give the buyer some examples using recent sales of similar properties in the area that they’re targeting. This serves as a benchmarking exercise for the client so that they can easily compare new listings that come up and get a clear understanding of what their budget can buy in the locality.

The Buyers’ Agent will then commence the searching process by screening and inspecting all available properties on the market. There are both online and offline sources for finding properties available for sale. A highly experienced Buyers’ Agent should have extensive connections and established relationships with selling agents in the target area in order to access off market properties as well. The most suitable properties are shortlisted and inspections are arranged for the client to view.

It may take several weeks/months and iterations of the searching process to find the ideal property for the clients’ needs. Once the client has provided feedback and indicated they are happy to proceed on the most ideal property, the Buyers’ Agent undertakes a detailed evaluation of the subject property and gives the client an appraisal report showing the current market value.

The Buyers’ Agent then steps into the due diligence and negotiation phase of the buying process, acting on behalf of the buyer. This entails arranging a pest and building inspection (unless a report is already available), or in the case of an apartment, a strata inspection, and any other required research to help the client make a safe and sensible decision. Based on the appraisal, the Buyers’ Agent then enters into a negotiation with the selling agent if it is a private treaty sale. In the case of an auction property, the Buyers’ Agent would attend the auction on the buyer’s behalf, and bid up to a pre-agreed maximum limit.

Once price has been agreed (or won at auction) the property contracts are exchanged and the property is secured – time to break out the champagne and celebrate!

What are the benefits of using a Buyers’ Agent?

Confidence: One of the best things about working with a buyers’ agent is they provide localised expertise and inside knowledge and give you greater confidence with decision making.

Removes emotion: An experienced buyers’ agent will not be swayed by emotion at an auction and have plan B up their sleeve for a client.

Time savings: Rather than you trawling the property portals every night, and running to inspections every weekend the buyers’ agent does the leg work for you.

Negotiation skill: Using their professional negotiation skills on a daily basis the buyers’ agent will obtain the lowest possible price (even in a hot market). View more negotiation tactics when buying property.

Off market deals: An experienced Buyers’ Agent will be able to show a client a range of off- properties via their personal network.

Objectivity: Pointing out the good and bad points – the buyers’ agent is on your side, giving independent advice.

Teamwork: The buyers’ agent should have strong alliances with finance brokers, building inspectors, solicitors, conveyancers, accountants and others that can make your purchase seamless. Having the right team of experts on your side makes things that much easier.

How much does a Buyers’ Agent cost?

A buyers’ agent will typically charge either a fixed fee or a percentage of the purchase price. The total fee will depend on the service level that you choose. Most buyers’ agents offer a full search service or a separate fee for appraising and negotiating or just auction bidding only. At property buyer – we offer a fixed fee schedule that is calculated by price brackets and ranges between 1.5% to 2% of the purchase price.

For investors, the buyers’ agents fees are tax deductible as they are considered an acquisition cost. The investment in the Buyers’ Agent fee is usually significantly offset by the considerable time savings and negotiation that they deliver in the process, and the quality of the property they find.

Are buyers’ agents regulated?

Buyers’ agents are regulated in Australia and are subject to the same rules of professional conduct as any other estate agents. Nevertheless, licensing varies from state to state.

How do you select a good agent?

An essential question to ask your potential buyers’ agent is whether they are truly “exclusive” or “independent”. Ask if they ever “sell” property. Only deal with a licensed buyers’ agent in the state you are purchasing, check licenses via the Office of Fair Trading in each state:

Queensland

New South Wales

Victoria

South Australia

Western Australia

And only use a buyers’ agent that is an accredited member of your state Real Estate Institute and the Real Estate Buyers Agents Association of Australia (REBAA).

A professional buyers’ agent can provide you with the expert knowledge you need to make an informed decision about the value of a property without all the sales “hype” often generated by sales agents and glossy photos. Keep in mind the following tips to select a good Buyers’ agent that fit in with your objectives and expectations:

• Experience: ask prospective agents about their qualifications and how long they’ve been working in the industry. Feel free to ask them about past results and clientele.
• Knowledge and contacts: make sure the agents have deep knowledge of the industry, specially in the areas you are looking to buy. This would mean they more likely have a larger network of contacts and more listings in your areas of interest.
• Costs: have the cost-talk upfront and make sure it is within your budget. Negotiate the fee arrangement: if it’s a percentage of the property or a fixed fee.
• Independence: if the agent is solely focused on buying and negotiating, there’s no risk of having a conflict of interest.
• The right fit: make sure you understand each other and you feel comfortable discussing your wants and needs with your representing agent. It’s important you are on the same page if they are going to get you that dream home.

Learn more about how to buy a home.