In today's complex property market, many prospective buyers are turning to buyer's agents to gain an edge. With Australia's property market prices continuing to challenge home buyers and property investors alike, it's worth examining whether professional support can make a difference in your property search and the entire purchase process.
What is a Buyer's Agent?
A buyer’s agent (also known as a buyer’s advocate) is a licensed professional who exclusively represents property buyers throughout the real estate process. Buyer’s agents must declare any potential conflicts of interest and are required to be licensed and recognised by professional bodies. Unlike selling agents who work for the vendors to get them the highest price, a buyer’s agent’s sole focus is on protecting the buyer’s interests and securing the best possible purchase price.
What are the responsibilities of a Buyer's Agent?
A buyer’s agent can take on as much or as little of the home-buying process as you need. Some buyers only seek their help for negotiating the property price, while others opt for a full-service approach, where the agent handles the entire process—from finding a home to sealing the deal. A buyers agency represents the interests of buyers in property transactions and helps them understand the fee structures involved.
Here’s how a buyer’s agent can assist you:
Help define what you're looking for
A buyer’s agent will help you to understand your needs—things like budget, location, property size, and lifestyle preferences. This information forms a buyer’s brief, which helps guide your property search. A property buyer's agent can also assist with investment property acquisitions, leveraging their extensive experience in property investment.
Provide market insights
With their in-depth knowledge of the local property market, buyer’s agents help identify great opportunities and steer you away from bad investments. Their industry connections may even give you access to off-market properties.
Shortlist suitable properties
Based on your strict criteria, a buyer’s agent will help you narrow down the options, saving you from wasting time on homes that look promising online but don’t hold up in person. Some buyer's agents may provide you with a vetted shortlist, others will help line up building inspections, but all must ensure that the home you're considering is worth the inspection by sense checking valuation.
Assist with interstate purchases
If you're looking to invest in property in another state, a local buyer’s agent can provide area insights, highlight locations with strong growth potential, information on rental yield and even attend auctions on your behalf.
Organise property appraisals & due diligence
Before committing to a purchase, a buyer’s agent can assess the property's market value and review key reports—such as building and pest inspection reports and strata reports.—to uncover any hidden risks.
Negotiate & secure the best deal
When it’s time to make an offer, your buyer’s agent will help you calculate the value of your home to determine fair market value, negotiate with the seller, and, if needed, bid on your behalf at auction.
The Cost Structure
Buyer's agent's fees typically come as either a fixed fee service for one particular property or as a percentage of the purchase price.
Fixed fee
A fixed fee means you pay a set amount for the buyer’s agent’s services, regardless of the property’s purchase price. We believe this is the fairest price model for home buyers as it offers:
- Cost transparency: You know exactly what you’re paying upfront, making it easier to budget.
- No bias toward expensive properties: The agent’s commission isn’t tied to the price, reducing any incentive to push higher-priced homes.
- Equal treatment: There is no incentive for a buyers agent to give priority treatment to a client with a bigger budget, a relief for most buyers.
Percentage-Based Fees
In this model, the agent charges a percentage of the final purchase price, typically ranging from 1% to 3%. What to watch out for:
- Incentive For Expensive Purchases: Agents may be incentivised to steer you toward higher-priced properties.
- Potential Conflict of Interest: Negotiations often take place with vendor agents privately. A percentage based fee provides no incentive to negotiate hard for a lower purchase price on your behalf.
- Unpredictable Costs: Since the final fee depends on the purchase price, you may pay more than expected if you opt for a pricier home.
Which buyers agent fee structure is better?
While it isn't clear cut, the fixed pricing structure is likely better for home buyers than then percentage-based buyers agent fee structure.
While considering these fees, remember they're an investment in:
- Professional advice
- Time savings
- Negotiation expertise
- Local knowledge
- Risk reduction
Are property buyers agents worth it?
In competitive metropolitan markets like Sydney, Brisbane and Melbourne having professional representation can make a significant difference in your property purchase. A buyer’s agent’s local knowledge, negotiation skills, and professional advice can help secure your ideal property at the right price. Property buyers agents offer expert guidance in property investments, helping clients make informed decisions and achieve their financial goals.
Whether you’re looking for a family home or first investment property, the right buyer’s agent can:
- Save time in your property search
- Provide valuable insider knowledge
- Help navigate the whole process
- Potentially secure a better purchase price
- Offer expert guidance in wealth creation through property
For those serious about property investment or lacking the time to navigate the property market effectively, a buyer’s agent can be a worthwhile investment. Their expertise often justifies their fees through better purchase outcomes and long-term property performance.
Remember, buying property is one of the biggest financial decisions most people make. Having a professional advocate on your side can make the whole process smoother and potentially more profitable.
OwnHome's Buyers Agent Service
Buy the right property at the right price and change your financial future with OwnHome's award-winning Buyer's Agent Service. Last year, our service set the industry standard with:
- 485 clients purchase their perfect property
- 10.39% house price capital growth - 2X the national average
- $89,393 annual capital gains on average across the property portfolio
- 32 days to purchase on average
We help you save time, money and stress by handling all of the hard parts of purchasing property in Australia, including:
- Deep market intelligence and research: custom insights platform for investment properties, family homes and real estate insights.
- Thorough due diligence: including professional reports from trusted third-parties identifying key risks and structural defects
- Valuation appraisal and price guides: gain access to custom valuations for each property based on leading research tools and our custom platform
- All agent communication: from phone calls, to texts to negotiations s you never need to speak with a real estate agent (most buyers love this!)
- Negotiation and bidding: at auction or via a private treaty sale.
Working with one of OwnHome's Buyer's Agent team means you can have confidence that you're buying a great property, at a great price.
Investment Property
Investing in property can be a lucrative venture, but it requires careful planning and research. A buyer’s agent can help you buy the right investment property by considering several factors:
- Rental Yields and Capital Growth: crucial for a successful investment.
- Property Types: Different properties have varying levels of investment potential. A buyer’s agent can help you choose the right type based on your goals.
- Local Market Trends and Conditions: Understanding the market can help you identify areas with high growth potential.
- Tax Implications and Financial Benefits: Investing in property comes with various tax implications and financial benefits. A buyer’s agent can put you in touch with finance professionals who can help you navigate these complexities.
By working with a buyer’s agent, you can identify investment opportunities that align with your goals and risk tolerance. They can also help you navigate the buying process and ensure a smooth transaction.
Property Buying Process
The property buying process can be complex and time-consuming. A buyer’s agent can guide you through each step, ensuring that you:
- Identify Your Needs and Goals: Understanding your requirements and objectives is the first step in finding the right property.
- Conduct a Thorough Market Analysis: A comprehensive analysis of the market can help you make informed decisions.
- Find the Right Property: A buyer’s agent can help you identify properties that meet your criteria and have good investment potential.
- Negotiate the Best Price: With their negotiation expertise, a buyer’s agent can help you secure the best possible price.
- Complete the Transaction Smoothly: From handling paperwork to coordinating with other professionals, a buyer’s agent ensures a smooth transaction.
By working with a buyer’s agent, you can avoid costly mistakes, save time, and ensure a successful property purchase. They can also provide personalised advice and support throughout the buying process.
Understanding the Current Market: The Role of a Buyer Agent
The Australian property market, particularly in major cities, presents unique challenges:
- Intense competition for quality properties
- Complex negotiation environments
- Time-consuming property search processes
- Need for professional advice and local knowledge
- Rising property values in sought-after areas
Understanding buyer's agent's fees is crucial, especially considering the tax implications for both personal residences and investment properties.
Navigating the Property Market
Navigating the property market can be a daunting task, especially for first-time buyers or property investors. The complexities of the market, from understanding local trends to identifying the right property, can be overwhelming. This is where a buyer’s agent can be invaluable. With their extensive knowledge of the local property market, they can provide the guidance and expertise needed to make informed decisions.
When navigating the property market, several factors must be considered:
- Market Trends and Conditions: Understanding the current state of the market, including price trends and demand-supply dynamics, is crucial.
- Local Market Analysis: Each area has its unique characteristics and potential for capital growth. A thorough analysis can help identify the best locations for your needs.
- Property Types: Different properties serve different purposes. Whether you’re looking for a family home or an investment property, it’s essential to choose the right type.
- Investment Potential: Evaluating the potential for rental yields and capital growth can help ensure a profitable investment.
- Off-Market Properties: These properties are not publicly listed and can offer unique opportunities. A buyer’s agent often has access to these exclusive listings.
A buyer’s agent can help you navigate these complexities, providing personalised advice to ensure you find the right property for your needs.
Market Trends and Conditions
Understanding market trends and conditions is crucial when buying a property. The property market is influenced by various factors, and staying informed can help you make better decisions. A buyer’s agent can provide you with up-to-date information on the local market, including:
- Current Market Prices and Trends: Knowing the average prices and how they are trending can help you gauge the right time to buy.
- Demand and Supply Dynamics: Understanding the balance between demand and supply in the market can indicate whether it’s a buyer’s or seller’s market.
- Interest Rates: Interest rates significantly impact property prices and affordability. Keeping an eye on rate changes can help you plan your purchase.
- Government Policies and Regulations: Policies such as tax incentives, common zoning laws, and housing regulations can affect the property market.
By staying informed about market trends and conditions, you can make informed decisions and avoid costly mistakes. A buyer’s agent can help you analyse the market and identify opportunities that align with your goals.
Market Analysis
A thorough market analysis is essential when buying a property. It involves evaluating various aspects of the local market to make informed decisions. A buyer’s agent can provide you with a comprehensive analysis, including:
- Property Prices and Trends: Understanding the historical and current price trends can help you predict future movements and make a sound investment.
- Rental Yields and Capital Growth: Evaluating the potential rental income and capital growth can help you choose properties that offer good returns.
- Demographic and Socioeconomic Data: Analysing the population, income levels, and employment rates can provide insights into the area’s growth potential.
- Infrastructure and Development Plans: Future infrastructure projects and developments can significantly impact property values.
By analysing the market, you can identify areas with high growth potential, understand the local economy, and make informed decisions about your property purchase. A buyer’s agent can help you conduct a thorough market analysis and provide personalised recommendations.
Frequently asked questions
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 qualified professional who helps home buyers find, analyse and purchase a property, whether it’s an investment property or a home to live in.
What's the difference between a buyer's agent and a real estate agent?
In Australia, both real estate agents and property buyers agents are qualified under the same course. The difference is that a real estate agent acts for the property vendor, and the buyers agent acts for the home buyer.
What kind of contract do I sign with a buyer's agent?
A buyer's agency agreement is a straightforward contract that outlines the roles and responsibilities of a buyer's agent and how they will help you buy property.
How important is access to off-market properties?
Access to off-market properties is a hook used by local buyer's advocates to suggest that you need their services to gain access to private real estate agent listings in order to find the best properties. For homes greater than $5,000,000 the off-market property listing access is a real advantage, as most high value homes are sold via private inspections. For homes under $5,000,000 off-market access tends to mean pre-campaign access or before the official marketing campaign kicks off. In practise, off-market access is a tool real estate agents or seller's agents use to build their email database of prospective home buyers and Buyer's Agents. In our experience, the best properties come to market with a campaign, because they generate the highest value marketing campaigns for real estate agents.
Are Buyer’s Agents Qualified?
Yes, buyer’s agents must be licensed to operate in their state, with licensing requirements varying based on local regulations.
It’s also a good sign if a buyer’s agent is a member of a professional body, such as:
- Real Estate Institute (NSW, QLD, VIC, WA, etc.)
- Property Investment Professionals of Australia (PIPA)
- Real Estate Buyers Agents Association (REBAA)
You can verify a buyer’s agent’s licence through your state’s Fair Trading website.
Who Pays the Buyer’s Agent?
Since buyer’s agents work exclusively for the buyer, their fees are paid by the client.
Their pricing structure varies, but they typically charge either a fixed fee or a commission based on the property’s price. Before signing a buyers’ agency agreement, the agent will explain their payment terms.
Most buyer’s agents also require an engagement fee upfront to begin the property hunt, with the remaining balance due when the contract goes unconditional.
How do I evaluate a buyer's agent?
To be confident in your buyer's advocate, you can consider:
- The qualifications of your buyer's advocate
- The experience of your buyer's advocate: # of homes they have purchased, knowledge and understanding of the buying process and all that the buying process involves, the size of property portfolio they usually work with, budgets they specialise in, relationships with property managers, mortgage brokers, real estate agents and due diligence specialists such as Building and Pest inspectors.
- Experience they deliver: reviews and ratings from previous clients
Learn more about OwnHome's Buyer's Agent service.
