What is a buyer's agent?

Buying property is likely one of the largest financial decisions you will make in your life. Navigating the complexities of the Australian property market can be a daunting task, especially for first-time buyers or those who lack the necessary experience. It involves significant research, evaluation, negotiation, and paperwork – processes that can overwhelm even the most diligent among us. But what if there was someone who could guide you through the process, working exclusively for you, to secure your dream property? This is where a Buyer’s Agent comes into play.

A buyer’s agent, also known as a buyer’s advocate, is a licensed professional specialising in searching, evaluating and negotiating the purchase of property on behalf of the buyer. Unlike traditional real estate agents, who work on behalf of the seller to secure the best possible sale price, a buyer’s agent is fully dedicated to representing the buyer’s interests. A competent buyer’s agent equips you with in-depth market knowledge, local networks, local knowledge, astute negotiation skills, and a keen eye for property potential, ensuring you secure the best property within your budget. Furthermore, their role extends beyond merely locating properties; they assist you through every stage of the property buying process, from the initial search to final settlement, providing a stress-free, streamlined experience.

In Australia’s property market, the role of a real estate agent and a buyer’s agent may seem overlapping at first glance, but their responsibilities and who they represent are markedly different. A real estate agent primarily represents the seller. Their key goal is to market the property and negotiate the best sale price for the seller. Therefore, their interests are inherently inclined towards achieving the highest sale price.

In contrast, a buyer’s agent is solely dedicated to the buyer’s interests. They work to identify properties that meet the buyer’s specific requirements, assess the fair market value of these properties, and negotiate the purchase on your behalf, aiming to secure the property at the lowest possible price with the best conditions. A buyer’s agent will only work in your interest and not in the interest of any seller or any selling agent. In short, while a real estate agent sells properties, a buyer’s agent buys them for clients.

A Buyer’s Agent provides an array of services designed to simplify and optimise your property purchasing process. These services can be categorised as follows:

• Property Search, Selection and Due Diligence: Your Buyer’s Agent will conduct a comprehensive search based on your criteria, considering factors such as location, property type, budget, potential for growth, and specific requirements such as proximity to schools, public transport or healthcare facilities. Their extensive network and access to off-market listings can uncover opportunities that you would likely miss when searching alone.

• Negotiation and Auction Bidding: Skilled in the art of negotiation, your Buyer’s Agent will work to ensure you don’t pay a cent more than you have to. They have the expertise to accurately assess property value, formulate a strategic bidding plan, and conduct negotiations with professionalism and finesse. If the property is going to auction, they can also act as your bidder, applying tried-and-tested strategies to secure the property at the best price.

• Coordination of Other Professionals and Services: Buying property involves a myriad of other professionals, from solicitors to building inspectors. Your Buyer’s Agent will liaise with these professionals, ensuring that all necessary checks are conducted, paperwork is completed accurately, and deadlines are met. This coordination role ensures everything proceeds seamlessly, mitigating potential hiccups in the process.

• Overseeing the Settlement Process: The process doesn’t end after successfully purchasing a property. Your Buyer’s Agent continues their work, coordinating with conveyancers and lenders to ensure the settlement process is smooth and stress-free. They’ll keep you updated at every step, ensuring you’re well informed and that the transition to property ownership is as smooth as possible.

• Auction Bidding Only Services: Some buyer’s agents offers an “auction bidding only” service for clients. This is where a buyer’s agent will bid on behalf of a purchaser for a property at an auction. Many clients will find bidding at an auction nerve wracking and not know the true value of the property they are purchasing. An auction bidding service can help potential clients with setting their limit and in turn the agent to bid of their behalf to try and purchase the property.

• Due Diligence and Negotiation Only Services: Some buyer’s agents offers an “due diligence and negotiation only” service for clients. This is where a buyer’s agent assists a client in evaluating a potential property, going through the due diligence checks and also help negotiate on the buyer’s behalf. This service is useful for buyers who are actively searching the market for the property but are uncertain about taking the step to purchase or never seem to make an offer that gets accepted.

Engaging a Buyer’s Agent offers numerous benefits that can significantly enhance your property buying experience:

• Insider Knowledge and Expertise: Buyer’s Agents have their finger on the pulse of the property market. They have extensive knowledge of market trends, potential growth areas, and property values, including access to off-market properties you wouldn’t otherwise know about. They also understand the nuances of different neighbourhoods, property types, and can provide valuable advice about potential resale value and rental yields.

• Time-saving and Stress Reduction: Buying a property can be a time-consuming and stressful process, especially when juggling other commitments like work or family. A Buyer’s Agent takes on the legwork of property search, due diligence and negotiation. Their expertise helps navigate complex processes and paperwork, ensuring a stress-free buying experience.

• Objective Professional Judgment and Negotiation Skills: It’s easy to let emotions drive decision-making in the property buying process. A Buyer’s Agent provides an objective professional perspective, preventing costly mistakes. Moreover, their expert negotiation skills can secure properties at fair or below market prices, potentially saving you thousands of dollars.
• Potential to save money: Buyer’s agents can potentially help you save money, this comes down to their networks and the right time and place and it is not always guaranteed. Through off-market listings or through their deep knowledge of the market, they can, through their negotiations skills help accurately identify the market value price of a property in order to guide you on your purchases. For example, if your buyer’s agent has access to an off-market listing, AND the seller is looking for a quick sale as long as it hits a certain price, you can potentially save money, especially if the selling agent has incorrectly priced the property or does not know the local area as well.
• Access to a strong support network and advisors: Buyer’s agents typically have access to a large network of advisors including (but not limited to) accountants, mortgage brokers, building and pest inspectors, property managers and more. By having access to their network, you can potentially save further time if these advisors are trusted and have had other clients use them. Be aware some buyer’s agents may be paid a referral fee, please alway check with the buyer’s agent and any agreements you sign which should disclose any referral fees paid.

The fees for a Buyer’s Agent in Australia are typically either:

• a flat fee (such as $19,990 for a buyer’s agent service to purchase property valued up to $1 million.), or,
• a percentage of the property purchase price. Usually this ranges between 1.5% – 3%.

Despite this cost, many clients find the benefits of using a Buyer’s Agent far outweigh the fee, thanks to their potential to secure properties at lower prices, save time, provide invaluable peace of mind and potentially avoid costly mistakes.

Other fees that buyer’s agents may charge can include:

• Set up fee – a non-refundable deposit to account for the time and effort it may take for a buyer’s agent to initially engage with you
• Change of Brief fee – typically a buyer’s agent works to a brief set out by the client. If the client, part way through the engagement, changes the brief significantly, most buyer’s agent will charge a fee in order to account for the time spent on the previous brief and for the new brief.
• Per Property service fee – this is typical if you do not choose to engage a buyer’s agent full service offering (from location selection down to inspections, due diligence and negotiations) to help you with your purchase. For example, if you are asking an buyer’s agent to only help you with auctions, then they will generally charge on a per auction basis or a flat fee for a set number of properties.

When considering the cost, it’s important to factor in these benefits and the value of professional expertise in navigating one of life’s most significant financial decisions.

Choosing the right Buyer’s Agent is crucial for a successful property buying experience. It’s vital to conduct thorough research and consider their experience, reputation, local market knowledge, and fee structure. D not hesitate to ask for references and ensure they’re fully licensed and a member of a recognised industry body, such as the Real Estate Buyers Agents Association of Australia (REBAA).

Ask them about their experience with properties within your budget and target location, their negotiation strategy, and how they will keep you informed throughout the process. Remember, this is a person you will be entrusting with a significant financial decision. You want to find someone who aligns with your property goals and with whom you feel comfortable.

Most buyer’s agents will offer a free strategy or consultation session that is obligation free. Do not hesitate to use it as it can help gain an insight to how they work. Another tip is to make sure you ask for samples of their property briefs, any data that they use to make decisions and samples of their due diligence reports and samples of their inspection reports. If these reports are hard to read or understand and the agent you are speaking with cannot explain it, then it may not be a right fit for you.

At Think Property HQ, we believe a buyer’s agent needs to be hyper focused on local, deep in the data, great listeners, have strong networks and great negotiators to be a great fit for clients. These are part of the values we instill in our team and across our brand.