We can outsource so many things in our lives these days so why not the buying of property? Buyer’s agents have gained popularity in Australia in recent years as our ever-complicated world demands more of us. Handing over complex tasks that we will only need to do a few times in our life is too hard to resist. For this a buyer’s agent is perfect! However, the costs involved and the thought of handing over a large part of the process to a stranger can be off-putting to some.
Firstly, it helps to know what a buyer’s agent is and what they actually do. In a nutshell, a buyer’s agent is a person who works for you, to look for your ideal property, help you to narrow your choices down and negotiate the purchase of the property. Like a real estate agent, they are also a licensed real estate professional, but rather than the full suite of services an agent has to be across, a buyer’s agent is basically a professional house hunter. Buyer’s agents can help you navigate the complexities of purchasing a property while also negotiating and hustling to get you the best deal possible.
People often choose to use a buyer’s agent when their purchasing needs are time sensitive, or they are looking in an area not local to them and need someone knowledgeable on the ground. Sometimes the need to purchase comes at exactly the wrong time and paying someone else to execute the most laborious parts of the process – such as curating a short list of properties to review - can be a huge relief. Or maybe buyers prefer to use a buyer’s agent because they don’t feel confident enough to work their way through the process, without professional support and expertise. This can be especially true for first home buyers, who have never been through the process before.
Some of the specific things a buyer’s agent can do include looking for properties that fit your brief, creating a shortlist for you to review, negotiating prices, advising you on suitable offers to make, bidding on your behalf at auction and providing a buffer between you and vendors, or others involved in the sale process. A buyer’s agent will help you make smart decisions between the houses that you love in your heart, and the ones that are actually good investments. One of the greatest perks you get from having a buyer’s agent is someone who can exercise objectivity on your behalf – an often difficult skill to master when so much money is on the line.
Of course, using a buyer’s agent can be an expensive proposition, so you must decide exactly why you want to invest in one and whether that investment will be worth it for you, given your budget and your desired outcomes. It all comes down to opportunity cost really – if you can invest your time in the whole process – from searching for properties, to negotiating the sale and so on, the you can save yourself some money. However, if you have been able to allocate some extra cash in your budget for miscellaneous expenses, the buyer’s agent may be the best place to spend it. Buyer’s agents’ fees vary as much as the tasks they do can. Some may bill you a percentage of the purchase price of the property for the entire job – usually around 1 to 2 % - while others may bill for individual services such as a flat fee of $500 or more for bidding at auction, or for negotiations and so on.
Buyer’s agents tend to have a unique skill set that can be useful if you want to really nail down a great deal. If you choose the right one, they can be extremely knowledgeable about the area you want to buy in – from demographics to sales history of other properties, to hot tips for properties that are about to come onto the market. They are usually well connected and have good industry contacts that they can utilise to get you the information you need quickly. Many can also get you access to properties that aren’t even advertised yet, putting you a little further ahead of the competition. Most importantly, a good buyer’s agent will be a skilled and experienced negotiator and be willing and able to challenge a vendor’s expectations around price and contract terms to get you the deal you want.
When choosing a buyer’s agent you should of course make sure they have relevant qualifications. Asking around amongst your friends and family is a good way to find an agent, as personal recommendations give you the first-hand experience of others. You can also use your favourite search engine online. There are a number of things you should ask about when first talking to the buyer’s agent. They should have considerable industry experience and be well versed and connected in the location where you want to buy. You can ask them what their process is – how they find properties and what kind of contacts they have, as well as what kind of fee structure they prefer. If you are trying to get the best price possible and paying them a percentage of that price, then this arrangement immediately contradicts itself – the better deal they get for you, the less they get paid. It’s worth discussing payment structures that motivate them and offer incentives for results, to ensure they are results oriented.
A buyer’s agent can be very useful for those who feel they need professional guidance in what can be a complicated and daunting process. From putting you at ease during an auction, to advising you on how not to overspend or overbid, the buyer’s agent definitely offers you the potential to save money and make money. However, you of course have to spend money on the chance that either of those things will happen – and that really is up to fate and the house you are meant to have.