Is A Buyer’s Agent Worth The Money?

Buyer’s agents were once reserved for the prestige market or buyers who were trying to transact in the Sydney market when they were based somewhere else.

However, they’re becoming a standard feature in today’s property market and are being engaged by buyers at all price points, including first home buyers and investors. We meet more and more of them every year at open homes and auctions.

We look at why people are increasingly choosing to use a buyer’s agent and look at the benefits of engaging one for your next property purchase.

The benefits of using a buyer’s agent

There are several reasons buyers consider using a buyer’s agent, including:

  • Saving time. A big part of a buyer’s agent’s job is to listen to your brief when it comes to buying a home and then help you fulfil it. That means finding properties that match your search criteria, making a shortlist and showing them to you so that you don’t have to constantly search and inspect properties yourself.
  • A reality check. One of the main things holding back many homebuyers is a lack of clarity on what it is they’re looking for in a home. A good buyer’s agent can often cut through the indecision and help you pinpoint exactly what you need in your next home. They also help buyers who can’t secure home because of their very rigid – even unreasonable – search criteria. If you fall into this boat, a good buyer’s agent could help you to expand your horizons so that you find the right place. That can be a real benefit if you keep missing out on properties.
  • Access to properties. Buyer’s agents usually have strong relationships with the real estate agents in the areas in which they work. They actively maintain this industry network, and this can give them access to off-market properties that haven’t yet made it (and often won’t make it) onto the public property portals like Domain and realestate.com.au. By engaging a buyer’s agent you can give yourself access to more properties and also get a crucial ‘first mover advantage’ – something that can make all the difference in a hot property market like the current one.
  • Market knowledge. Buyer’s agents should understand all the data and comparable sales in the area you’re looking in. That means they understand fair value and can give you a genuine insight into how much any property you’re booking at is really worth. This should give you a real sense of confidence when it comes to putting forward an offer.
  • Due diligence. A buyer’s agent can do full due diligence on a property, including organising pest and building reports, performing strata searches and more.
  • Negotiation skills. Speaking of which, a buyer’s agent should be a good negotiator and will know ‘when to hold ‘em and when to fold ‘em’. This means they should make sure you get the best price on your home.
  • Auction strategies and bidding. Finally, many buyers engage a buyer’s agent specifically to bid for them at auction, tapping into their expertise on bidding techniques and also taking the emotion out of the process so they don’t overpay.

What do buyer’s agents charge?

Generally speaking, buyer’s agents charge different fees depending on what services you use. If you only want them to bid for you at auction, you may get away with paying just a few hundred dollars.

At the other end of the spectrum, if you engage a buyer’s agent to perform their full-service search, you’re likely to be up for several thousand dollars.

Buyer’s agents and investment properties

We find a lot of investors use a buyer’s agent. That’s often because they’re not as emotionally invested in their purchase and see it more as a transaction. A buyer’s agent can help you crunch the numbers and make sure that a property is likely to work for you as an investment. The fees you pay may also form part of your cost base for Capital Gains Tax, even if you can’t deduct them.

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Buyer’s agent versus real estate agent

Given as real estate agents, we act for the vendor, and a buyer’s agent acts for the buyer, you may be imagining conflict and opposition. Many people mistakenly believe that real estate agents and buyer’s agents don’t get along but nothing could be further from the truth. We find buyer’s agents actually make our lives easier. That’s because they understand the negotiation process and also how we work. Deals often get done more quickly and productively, with better outcomes for both parties.

We also know that when a purchaser uses a buyer’s agent they’re genuinely interested, prequalified and educated about the market. That means we’re usually operating on the same level. So there are flow-on impacts to the vendor, which are positive too – the sale is completed more smoothly.

How to choose the right buyer’s agent

If you’re looking to engage a buyer’s agent, we recommend you always look for certain characteristics.

  • Local experience. It’s important that your agent knows the local area, has connections with local real estate agents and understands property prices in the area in which you’re searching.
  • Their qualifications. You should always make sure they have genuine experience in the real estate industry, which could include a real estate licence.
  • Their openness. They should be willing to listen to your brief and also to be honest about your search.
  • Their track record. Hopefully, they should have a history of good results and testimonials from satisfied clients in the area you’re looking to buy.
  • Their costs. They should be upfront about their costs or fee structure and how and when they expect to be paid.
  • Their personality. You’re going to have a close relationship with this person – it’s vital you get along.

Some of the best buyer’s agents don’t advertise at all and get all of their work via word of mouth. We’ve worked with a number of excellent buyer’s agents over the years and we’re happy to point you in the right direction. They can really help buyers get ahead in a competitive market like Green Square and Waterloo.

Want more?

If you’re interested in buying, selling or renting a property in our local area, contact us today.

Article by Brendon Clark
‘The details matter - through every part of the process.’ With decades of runs on the board alongside a fresh outlook, Brendon is co-director of Clark - and one half of one of Sydney’s most dynamic and successful real estate duos. Having carved out a reputation for results in the… Read More
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