Most people appoint a real estate agent to help them sell a property. However, a real estate agent can also help people who are buying property.
Real estate agents who act for the buyer of land, also known as a ‘buyer’s agent’, can do as much or as little as a prospective buyer needs, from simply helping them determine what and where they want to buy, through to acting on a buyer’s behalf through every stage of the purchase process.
The key difference between a buyer’s agent and a traditional selling agent is the person they represent. A buyer’s agent works exclusively for the buyer, whereas the selling agent works for the vendor (seller).
Is A Buyer’s Agent Licenced?
A buyer’s agent is required to:
- hold a real estate agents licence or
- have a Certificate of Registration and work under the direction of a licensed real estate agent.
If you are engaging a buyers agent, we recommend you perform an online licence check to make sure you are dealing with a qualified person.
What Are The Benefits Of Using A Buyer’s Agent?
The buyer’s agent should work with you to discover exactly what sort of property you are looking for: everything from location, to number of bedrooms, proximity to schools, and other lifestyle preferences.
The buyer’s agent can help you narrow down your property search, especially if this is your first home purchase. If you are an investor, the buyer’s agent can help you focus on potential capital growth or rental yield.
In summary, a buyer’s agent can help you:
- find, assess and shortlist properties meeting your search criteria
- research properties to determine a fair price
- inspect a property
- evaluate and negotiate a price on your behalf
- bid at auction
- follow up until the sale is finalised and liaise with related parties during the process
- provide objective information, advice and support
- access databases and information not readily available to the public, including increased access to properties off market
- assist with property manager selection
- eliminate stress by having one representative looking after your needs, rather than dealing with several different selling agents.
How To Choose A Buyer’s Agent?
When considering which buyer’s agent to use, NSW Fair Trading recommends you consider these questions:
- Are they a licensed real estate agent, and if so how long have they been licensed?
- Do they exclusively represent only the buyer in the property purchasing transaction?
- What experience do they have in property research and negotiating prices?
- What fees are they charging and will there be fees or charges if they don’t find you a property you like?
- What are the terms and conditions of the agreement, and if you are not happy with their performance how can you terminate the agreement?
- How is she/he different from other buyer’s agents?
- Do they have a large network of contacts with selling agents?
- How often will they give you feedback?
- Do they have professional indemnity insurance? (Under licensing laws, they must hold this insurance)
- Do they receive any rebates, discounts, commissions or other benefits from third parties or service providers they may refer you to?
- Are they a member of an industry association such as the Real Estate Institute of NSW, or the Real Estate Buyers Association of Australia or other?
How Much Does A Buyer’s Agent Cost?
There’s no set rule as to what you’d pay for the services of a buyer’s agent.
Some agents charge a fixed fee, whereas others charge a percentage of the purchase price (generally ranging around 1.5%-3.5%). Some buyer’s agents charge an up-front retainer fee when you first engage them.
When you appoint a buyer’s agent you will need to sign an agency agreement which sets out the services they will provide and the terms and conditions of the agreement.
We strongly recommend you do not sign the agency agreement until you understand what it means for you in terms of costs and what the agent is committing to do for you. If there is anything you don’t understand, contact our office for advice.
Are you buying property? Ask us about our fixed fee conveyancing packages or head over to our website to find out more about buying property.
This article is intended to be general information only and is not legal advice. You should obtain specialist advice based on your specific circumstances before taking any action concerning the matters discussed in this article. The content is current at the date of publication.