We won’t be the first ones to tell you that buying a property is a *process*. It’s an exciting time – buuut it can also be involved, confusing, expensive and time-consuming.
And throughout the process, the vendor typically has a real estate agent on their team. So it’s only natural to want someone on your team, too.
Enter, buyer’s agents.
A buyer’s agent or buyer’s advocate is a property buying professional who can search for, evaluate and negotiate a property purchase on your behalf. Just like a real estate agent works for the vendor (seller), the buyer’s agent works for YOU. Sounds ideal, right?
But there’s no such thing as a free lunch. This (incredibly helpful) service comes at a cost.
So are buyer’s agents worth it?
Just how much does a buyer’s agent cost?
And could they save you money in the long run?
What does a buyer’s agent *actually* do?
Quite a lot, actually. A buyer’s agent works with a whole range of property hunters – from first time buyers all the way to experienced investors.
A buyer’s agent can be involved in all or just specific parts of the property buying process. Their role may include:
Getting to know you and your goals
A good buyer’s agent will start here. They’ll take the time to get to know you to discover your goals, purchasing power and exactly what sort of property you’re after (everything from the number of bedrooms to lifestyle preferences).
Scoping out properties
Once a buyer’s agent has a clear idea of what you want, they can scope out properties on your behalf. Hello, time-saving. It helps they’ve got industry connections and can even access “off-market” properties that you wouldn’t otherwise be able to. Then they’ll shortlist properties that meet your criteria and present them to you. They can even go to inspections with you or on your behalf to suss things out.
Evaluating
Property caught your eye? A buyer’s agent can assess the value and give you a clear indication of where it sits in the current market. This can help you keep those emotions in check, and guide you towards paying what the property’s truly ‘worth’.
Auction bidding
So, you’ve found your dream home and it’s going up for auction or you want to submit an offer. But there’s only one problem — you don’t know how. Well, a buyer’s agent can submit an offer or bid on your behalf – phew. It also helps that they know the rules of the game, how to keep their cool and manage bidding situations strategically.
Negotiating
Once you’ve found a property, a buyer’s agent can help with the tricky part – negotiating. They’ll deal with real estate agents on your behalf and ultimately work to get you the best possible price and settlement conditions. They’ll also help liaise with other third parties, like conveyancers, or building and pest inspections.
So there’s a *bit on* in the life of a buyer’s agent. But as you can see, they’re basically your go-to person for the whole process (well, them, and your mortgage broker – but this isn’t about us).
So, what’s the difference between a buyer’s agent and a buyer’s advocate?
There is none. Zilch. A buyer’s agent and buyer’s advocate are the same thing and the terms are often used interchangeably.
But to recap, there IS a difference between a buyer’s agent and a real estate agent – the real estate agent works for the vendor to sell their property at the highest price, and the buyer’s agent works for you to secure a great property at the lowest price.
The benefits: why do people use a buyer’s advocate?
Would you rather fold a fitted bed sheet than spend every spare waking moment hunting for properties or liaising with real estate agents? Then a buyer’s advocate *may* be for you.
Here are some of the top reasons property hunters choose to work with a buyer’s advocate.
It saves time
This one’s a biggy.
They can tap into “off-market” properties
If you want to maximise your chance of finding *the one*, then knowing a buyer’s agent who can tap into off-market properties might appeal to you.
They know how to play the game
Remember, they’re experts. They know the right questions to ask, what information to share (and not share) with real estate agents, as well as the timing that may put you in the best position to secure a particular property.
They’ve built solid relationships with real estate agents
They’ve built strong industry connections and can speak (decode) the real estate lingo.
They’re on YOUR team
It’s handy knowing you’ve got a person who is looking after your interests, and only your interests. You can go to a buyer’s agent with any questions or concerns the whole way through.
They can look out for red flags
Particularly if it’s your first property purchase, you might not know the red flags to look for when buying a property. Thankfully, a good buyer’s agent can often spot them from a mile away.
They can help determine the market value of properties
The thing is, just because an agent lists a property at a certain price, doesn’t necessarily mean that’s what it’s worth. A buyer’s agent can help you get to the market value and make sure you’re not overpaying.
They can set and execute a bidding strategy
Turn a nerve-wracking experience into a positive one and put your best foot forward at an auction.
They can liaise with third parties
A lot of property hunters might not know how to go about dealing with conveyancers and building inspectors. That, or they don’t have time for the back-and-forth. A buyer’s advocate can often have them on speed dial and liaise with them directly for you.
They can negotiate with the vendor or real estate agent
Negotiating with agents not your cup of tea? A buyer’s agent can deal with vendors and real estate agents on your behalf so you can stress (way) less and focus on the fun parts (ahem, planning where the bar cart will go).
It *may* save you money in the long run
Finally, a lot of people use a buyer’s advocate in the hope that it’ll save them money in the long run. Having the industry insights and the skills of a professional can definitely pay off (although there’s no guarantee).
What are the downsides of a buyer’s advocate?
The single biggest downside of a buyer’s advocate is, you guessed it, fees. This awesome service comes straight out of your pocket. And it’s not guaranteed you’ll save money on the purchase price or get more value for your $$$ by going through a buyer’s advocate (although in many cases you might).
There’s another downside (although this one can be avoided). If you don’t find the right fit in a buyer’s advocate, you might not get the service that best suits you. Unfortunately, some buyer’s agents out there take on a lot of clients at once, so you may not get that personal touch you’re really after. What’s worse, some buyer’s agents may have a conflict of interest (like accepting sales commissions from vendors or developers), so it’s best to ask them about this so you’re clear from the outset.
At Finspo, we know a few goodies we can happily refer you to.
The elephant in the room: how much does a buyer’s agent cost?
Like many things in the property world, it depends on a whole bunch of factors. Your location, the price range of the property you’re looking for, desired level of service, as well as the agent’s experience.
One big factor is the level of service you’re after. For example, if you just engage a buyer’s agent to help you bid at an auction, this will typically cost a lot less than if you engaged someone to help you with the searching and buying process from start to finish.
But if we had to put a figure on it, we’d say typically anywhere between $5,000 – $20,000. Pricing models can be fixed fee, tiered fixed fee or percentage (commission) based – and this will generally be around 2% of your purchase price.
So is it worth using a buyer’s agent?
Sometimes, yes. Sometimes, no.
It all depends on YOU. Your budget, needs, prior knowledge and time constraints. It also depends on who you might already have on your team (you might already have a property expert in the family that you can lean on – or even just know somebody who’s switched on with this stuff).
Lastly, know that you technically don’t *need* a buyer’s agent (it’s not a requirement to buy a house). But a lot of people choose to work with one to save time and effort and have a property expert on their team!
Want to dive deeper or be connected with a recommended buyer’s agent? Our team of home loan experts can point you in the right direction. Plus, help you get your home loan pre-approved so you’re ready to roll.
