Buyers agents in Australia have grown in prominent throughout the past decade. What started as a niche profession has evolved into an industry that assists purchasers in locations across the nation.
But while we’ve gained recognition as a profession, there’s still some hesitancy among the wider population because many don’t know what our fees are and how much value we bring to the transaction.
Well, I’d like to set that straight and show why buyers agents deliver so much benefit to the clients they serve.
How much do buyers agents charge?
Subject to a range of factors, there are three main fee structures buyers agent use:
Fixed fees
Some buyers agents will charge a fixed amount to purchase property on your behalf.
This structure works for professionals who are consistently purchasing for clients at a certain price point, and usually where the property type they buy is fairly standard.
As such, you often see the fixed fee structure adopted by those who specialise in purchasing investment properties for their clients – particularly in an around the $500,000 to $600,000 price point. The assets they buy require a reasonably generic approach to sourcing and acquisition and will usually be in a particular “hotspot” location and of formulaic design and style.
Fixed fee agents often charge between $10,000 and $15,000 per transactions depending on the variables.
Percentage of purchase price
A common question is ‘does a buyers agent get commission?’ – Brisbane buyers agents who charge a percentage of the property’s purchase price normally specialise in homeowner acquisitions or more complex investment deals. It’s commonly applied by boutique, premier-service agencies like ours where clients require a more comprehensive service to unearth bespoke property options.
Percentage fee agents often operate in mid- to high-price locations where values are usually well above of $750,000, and often into the multi-millions.
Most of these agent charge around 2.5 per cent of the property’s purchase price.
Bracket fees
This is a kind of hybrid of the above two structures.
With bracket fees, the agent will charge different fixed fees based on which price bracket the property sits in. A crude example might be charging $15,000 for purchases up to $500,000, then $25,000 for purchases up to $1 million, and $30,000 for purchases to $2 million, with a quoted fee for any acquisitions above that top amount.
What value do buyers agents add?
So, how do buyers agents deliver benefits well in excess of the fees they charge? I think it’s best described across four primary components.
- Time
Sourcing an ideal property takes time. It involves constantly trawling through listing portals, reading papers and contacting agents. Then you need to schedule time for open homes on your Saturdays, which might include multiple follow up inspections.
I’ve calculated this effort will take about six hours a week for the average buyer, which reflects around 150 to 160 hours over a six-month period.
The buyers agent takes on all this labour, handing you back those precious hours to work within your own specialty or enjoy time with family.
Also, time spent hunting for a property also leads to frustration and fatigue. Most buyers will eventually burn out, and many end up paying an “emotional exhaustion” premium for a less-than-ideal property.
- Expertise
Buyers agents bring extensive experience to your property hunt. We will be better at completing the task than average everyday Aussies because it’s what we do daily.
It can be compared to people thinking about their own tax return. Most folks can submit their financials to the ATO, but they won’t do nearly as a good a job as an experienced tax agent. Deductions, deadlines and important information are sure to be missed without a specialist’s keen eye to look over the numbers.
Buyers agents operate in their markets every day. They know what can go right, what can go wrong and how to solve most problems. They also know about the latest sales and what will influence value.
Expertise also delivers speed in this instance. It means we can get across more properties faster, so you get to see more options that tick your boxes.
Our expertise can save you from a real-dollar mistake too. A five per cent error on a $1 million property is well above the 2.5 per cent fee we charge.
- Access
Buyers agents have extensive professional networks with one of their biggest contact groups being selling agents.
As such, we hear about listing well before anyone else – often in advance of them being advertised on realestate.com.au or Domain.
There are other specialists we’ve formed relationships with too, such as conveyancers, mortgage brokers, building inspectors and alike. Not only do these affiliate professionals help service our client’s needs, but they can also be another source of potential listings. They’re happy to send us any property options that come through their own client base.
In shorts, buyers agents will be able to present you with more buying opportunities because of our access.
- Negotiation
Buyers agents are expert negotiators.
We can quickly assess a property’s market value without emotion and based on solid data.
Because we’ve completed hundreds of transactions, we’ve gained extensive knowledge on how to approach a negotiation to secure the best overall outcome. This includes buying strategies, as well as working with your “must haves” and “like to haves”. Buyers agents also know where to flex on terms and conditions, so you land the best possible deal.
There’s no doubt a skilled buyers agent can deliver excellent value for your dollar. They’re a huge advantage to purchasers looking at acquiring real estate that meets their needs and budget with minimal fuss and maximum benefit.