A buyer’s agent (or buyer’s advocate) can be a valuable resource when it comes to finding your dream home or investment property. In Australia, you can usually hire these licensed professionals to perform one of three main services:
- Full search
- Appraisal and negotiation
- Bidding at auction
But how much do buyer’s agents charge for these services, and are they worth the investment? Below, we'll explore what’s involved in each and the different pricing models involved.
Full service: 1.5% - 3% of the purchase price
This is the most expensive level of service an Australian buyer’s agent offers, as it involves managing the whole process of finding and purchasing a new home on your behalf. A full-service package will typically include:
- Discussing the type of property you want
- Sourcing properties within your price bracket and creating a shortlist
- Providing access to off-market properties
- Arranging inspections and appraisals
- Performing thorough due diligence
- Arranging pest inspections
- Negotiating with the real estate agent once the right property has been found
- Bidding on your behalf if the property goes to auction
- Handling all the paperwork involved in the property purchase
- Connecting you with industry professionals such as conveyancers and property managers
This service is especially useful for first-home buyers, property investors looking to buy in a different state, and those whose work or other obligations don’t allow enough time to conduct a thorough property search themselves.
Buyer's Agent fees will vary depending on the location and your specific requirements. In metropolitan areas such as Sydney and Melbourne, the average fee will range from 1.5% to 3% of the purchase price + GST. In other areas, the fee may be lower.
Appraisal and negotiation: 0.9% of the purchase price
Some homebuyers only engage a buyer’s agent to appraise and negotiate a sale price for a property. If you’ve got your eyes on a new home, an agent will inspect it in person and take note of the following:
- The property size
- The number of rooms and bathrooms
- The condition of the property
- Fixtures and fittings
- The location
- Proximity to schools, shops and public transport
They will then take this information and compare it against similar homes that recently sold in the area. Once broader real estate trends are factored in, they can suggest a fair market price, which can be used as the basis for negotiations with the vendor.
A buyer’s agent typically charges a percentage of the property purchase price (usually around 0.9%) + GST or a flat fee model equivalent for an appraisal and negotiation service.
Auction bidding: $500 attendance fee
Some property buyers only need a buyer’s agent once they’ve found their ideal home and need someone to represent them at the auction. This can remove much of the stress and put you in a prime position to beat other bidders.
Their emotional detachment can also be valuable in such a high-pressure setting. By handing over bidding duties to the agent, you can avoid getting swept up in the excitement and offering more than a property is worth.
The cost of an auction bidding service will usually be much cheaper than other buyer’s agent services as there is much less work involved. They typically charge an upfront fixed fee of $500 + GST to attend and a $1,000 + GST success fee.
Are buyer’s agent costs tax deductible?
If you’re a property investor, the total cost of using a buyer’s agent will be tax deductible. That means if you sell later, the fees can increase the cost base of your investment property and reduce the amount you pay in capital gains tax.
If you’re an owner occupier, buyer’s agents’ fees are not tax deductible.
Is the buyer’s agent fee worth it?
The total fee of hiring a buyer's agent can seem high at first glance, but if they can negotiate a lower purchase price — and the savings are more significant than their cost — then they more than make up for the price tag.
An experienced buyer’s agent can also save you time by doing the legwork of house hunting for you. No matter if you want a family home, you’re relocating interstate, looking for an investment property, or unsure how the home-buying process works.
OwnHome Buyer’s Agent Service
At OwnHome, our expertise is homebuying. When you take out a Deposit Boost Loan, you are assigned your own dedicated personal buyer’s agent. Our agents know the ins and outs of your local market and can do the leg work needed for you to make a confident decision. Our team considers market trends, independent valuations, comparable properties and more to help you find ‘the one’ at the right price.
Learn more about OwnHome's Buyer's Agent service.