For many Australians, the process of selecting and purchasing a new property is both exciting and stressful.
But for some, it can be more time-consuming than expected, and even intimidating.
There are several variables and unknowns – such as the budgets of other buyers and the seller’s expectations – that can lead some buyers to spend more time, energy and money on the transaction than anticipated.
That’s why an increasing number of investors, and even owner-occupiers, are using a buyer’s agent to help them buy a home.
What does a buyer’s agent do?
A buyer’s agent – sometimes referred to as a buyer’s advocate – is a professional enlisted by a prospective investor or owner-occupier to help find them a suitable property within their price range.
While a real estate agent manages the sale of the property from the seller’s perspective, a buyer’s agent helps manage the interests of the future buyer, including:
- Discovering the buyer’s objectives
- Creating a shortlist of properties that meet those objectives
- Understanding the market value of those properties
- Providing expert knowledge about market trends
- Bidding and negotiating on the buyer’s behalf
Before engaging a buyer’s agent, it’s important to consider the pros and cons.
The pros of using a buyer’s agent for investors
- A good buyer’s agent will understand the benefits and pitfalls of buying in a particular suburb, which may be handy for those investing outside their area
- They can do due diligence on particular properties to ensure there are no structural blemishes or cosmetic problems that could cost money down the line
- They can take the emotion out of the purchase, which could matter to those with a tendency to overlook flaws if a place has the right charm
The cons of using a buyer’s agent for investors
- Buyer’s agents often charge a five-figure fee
- Some buyers will feel uncomfortable buying a property that they themselves have never inspected
- Choosing the right buyer’s agent can take time, as it’s important to ensure they are licensed and don’t have conflicts of interest
The pros of using a buyer’s agent for owner-occupiers
- A buyer’s agent can save time for buyers by doing all the legwork on their behalf
- They may be able to negotiate a better deal
- They take away much of the stress that comes from looking for a home and negotiating its purchase
The cons of using a buyer’s agent for owner-occupiers
- The fee can seem expensive
- If the two parties don’t communicate clearly, the buyer’s agent choose unsuitable properties
- The buyer’s agent might not provide enough value to justify their fee
Important things to remember when considering a buyer’s agent
While a buyer’s agent’s offering may be attractive to some, it certainly won’t be right for all investors and owner-occupiers.
For those who are considering a buyer’s agent, it’s important to shop around.
Some operate on a fixed-fee model, while others charge a percentage of the sale price.
Some don’t take commissions from third parties (such as vendors), while others do.
There are also various tiers of service on offer in the buyer’s agent market. It’s critical to negotiate upfront to ensure both parties have a detailed understanding of what services are being offered for the price.