A buyer’s agent (also known as a buyer’s advocate) is a real estate expert who helps prospective buyers navigate the market, find suitable properties, and negotiate with sellers.
Whether you’re a first home buyer, an investor purchasing in an unfamiliar area, or just someone who doesn’t have the time to scour listings all day, a buyer’s agent can give you an edge over the competition and help you land your dream home. In short, they can help you make buying a home a breeze.
What are a buyer's agent's responsibilities?
A buyer’s agent’s services can be as wide-ranging as their clients need them to be. Some property buyers only bring them in when it’s time to negotiate a purchase price, while others might outsource the job of finding a home entirely to their agent (known as ‘full service’).
Here are a few things a buyer’s agent might be able to do on behalf of the buyer in a real estate transaction:
Determine what type of property you need
Buyer’s agents will typically sit down with a client to understand their preferences. Things like size, location, price range, and proximity to schools and shops will be used to create a buyer’s brief, which the agent will rely on when the search for your property begins.
Share knowledge about the housing market
A good buyer's agent will have extensive local knowledge of the real estate market and can help steer you towards good opportunities and away from less-than-ideal ones. Through their network of contacts, they might also be able to provide access to off-market properties.
Create a shortlist of properties
With your stated criteria in mind, a buyer’s agent will create a shortlist of acceptable properties and arrange a time for you to inspect them in person. This can spare you the hassle of showing up to homes that might have looked promising online only to be disappointed.
Hunt for properties interstate
If you plan to buy an investment property in another state, a local buyer’s agent can help familiarise you with the area and identify the best spots for capital growth. They can also attend inspections and auctions for you if you don’t have the time to travel back and forth.
Arrange property appraisals
If you have your heart set on a particular property, a buyer’s agent will conduct an appraisal to determine its current market value. They will also perform thorough due diligence to make sure you aren’t blindsided by any potential problems down the track. This is usually in the form of reviewing building and pest inspection reports and strata reports.
Negotiate a purchase price
When it comes time to make an offer, a buyer’s agent can help you calculate the value of a home, negotiate the right price with the seller and can even bid on your behalf if the property goes to auction.
How much do buyer’s agents cost?
Buyer’s agent fees will vary depending on their experience and the range of services they provide. Costs may take the form of:
- A fixed fee.
- A percentage of the purchase price. This is usually around 1.5% to 3%, so if you purchase a new home for $500,000, the commission paid to the buyer's agent would be around $7,500 to $15,000.
- A retainer fee, which is paid upfront once you engage the buyer’s agent
Some agents will waive the fee if they fail to find the right property within an agreed-upon time frame, say six months after you enlist their services.
Is it worth it to use a buyer’s agent?
There are plenty of reasons why you might want to work with a buyer's agent when purchasing a home. Here are a few of the most common:
- Expertise: A good buyer's agent will have a deep understanding of the local housing market and can provide valuable insights and advice throughout the home-buying process.
- Time savings: Between monitoring online listings and attending inspections, searching for a home can be time-consuming. A buyer's agent can help streamline the purchasing process by handling most of the job from start to finish.
- Negotiation skills: A buyer's agent can leverage their knowledge to negotiate the best price with the seller and their real estate agent, potentially saving you thousands of dollars.
- Access to resources: A buyer's agent can connect you with other professionals such as conveyancers, mortgage brokers and (if you intend to rent out the property) property managers.
What’s the difference between a buyer’s agent and real estate agent?
The main difference between a buyer’s agent and a real estate agent is who they work for. A buyer’s agent, as the name suggests, represents the interests of a homebuyer. Their job is to help their clients find a property that meets their needs and budget.
A real estate agent (or selling agent) works on behalf of a vendor. They specialise in creating promotional materials, staging and showing properties, and communicating with potential buyers, all with the goal of attracting the highest sale price.
What’s the difference between a buyer’s agent and a buyer’s advocate?
In Australia, the terms ‘buyer’s advocate’ and ‘buyer’s agent’ are used interchangeably. Both refer to a licensed professional who helps homebuyers find, evaluate and purchase a property, whether it’s an investment property or a home to live in.
Do you have to use a buyer’s agent?
While it’s by no means necessary to work with a buyer's agent, doing so can be a smart move for anyone looking to streamline the purchasing process. Their understanding of the current market and access to resources can help you save money, not to mention turn a potentially painstaking experience into a breezy one.
How do you find a buyer’s agent?
Word of mouth is a good way to start. If you know someone who recently made a property purchase with help from a buyer’s agent, ask them about their experience. If it was positive, it might be worth getting the agent’s details and giving them a call.
To make sure a buyer’s agent is acting in your best interests, you should ask them the following questions:
- Are they a licensed agent? If so, how long have they been licensed?
- Are there any conflicts of interest, such as obligations to other parties besides the homebuyer?
- Do they receive any commission from the seller?
- Do they receive any commission or rebates from referrals to third parties?
- How much do they charge and is it still payable if an acceptable property is not found?