How to choose a buyer’s agent

From scouting for potential properties to the day of final settlement, buying a property can be stressful and time-consuming at the best of times. Enter the buyer’s agent. Sometimes called buyer’s advocates, these licensed professionals help you navigate the property market and find your dream home or investment at the best possible price. In exchange, they charge a fee or commission.

What does a buyer’s agent do?

A buyer’s agent specialises in researching, evaluating and negotiating a property purchase on behalf of an interested buyer. There are 2 main services an agent can perform for you:

Full search

Sometimes referred to as full service, this is a common option if you’d like assistance with your purchase from start to finish. It includes searching for properties that meet your criteria, negotiating the sale price and bidding at auction.

Auction bidding only

You can also employ a buyer's agent just to bid on a property that you have found yourself. Auction bidding is not for the faint-hearted, so it can be helpful to have an experienced professional represent you on the day. This option is often taken up by interstate or overseas buyers.

How much does a buyer’s agent cost?

Like most things related to buying a house, buyer’s agents don’t come cheap. Fees vary according to the services the agent is employed to perform and usually fall into one of these categories:

• Fixed fee. Some agents may lock in a flat rate or fixed fee, which is usually segmented into price brackets according to the value of the property you’re looking to purchase.
• Commission. Usually charged at 1.5–3% of the final purchase price, plus GST.
• Retainer. Be mindful that regardless of whether an agent is using the fixed fee or commission model, you may be asked to pay an upfront fee of anything from $1,000 to 50% of the total fee payable.

In spite of the cost, provided you do your research and choose an agent who’s transparent about their fees from the outset, a buyer’s agent could save you significant money in the long run.

You can read more about buyer's agent fees in our handy guide

The benefits of using a buyer’s agent

Working with an experienced agent can make a significant difference to your property purchase. Agents can help with:

• Expert insights. A good buyer’s agent has extensive knowledge of different markets and can help you locate properties in areas with strong capital growth potential.
• Time savings and reduced stress. The services of a buyer’s agent can reduce your stress and save you from having to spend your own time researching the market, scouting different locations, inspecting multiple properties and negotiating competitive deals.
• An objective view. Choosing a property can be an emotionally charged process, particularly if it’s a home where you plan to raise a family. By providing a candid and professional opinion, a buyer’s agent can guide you towards a strategic investment and ensure you don’t overpay.
• Early property access. Well-connected agents can access off-the-market properties, which means you’ll be able to pip your competition at the post and inspect properties before they’re even advertised for sale.
• Professional negotiation. Attending an auction can be intimidating, particularly if you’ve never bid on a property before, so it’s beneficial to have someone representing you who knows when to bid – and when to throw in the towel.

5 questions to qualify your buyers' agent

Once you have a shortlist of 2 or 3 potential agents, ask each of them some questions to land on your perfect match. You might even want to treat this as though you’re interviewing someone for a job:

• Are you an exclusive buyer’s agent or do you also sell property? This question helps you work out whether there's a potential conflict of interest. A genuine buyer's agent ONLY represents buyers – if they are also selling properties and earning a commission doing so, while charging you for theri services, there is a conflict.
• What previous purchases have you made in my chosen location and/or price range? Can they walk the walk? Ask to see at least 5 examples of recent buys in the locations on your hit list, as evidence of their local knowledge and results.
• How extensive is your network of contacts? Real estate is all about who you know, and a well-connected buyer’s agent could help you snap up properties before they even hit the market.
• Why should I use your services over another buyer’s agent? This is an opportunity for agents to explain that they are able to offer you something their peers can’t. Keep an ear out for empty sales-speak like "trust me" without any effort to share their results, and don't fall for unrealistic promises – like someone promising to secure you a property in 2 weeks when the market average is more like 2 months.
• Can I hear about your previous clients' experiences? Testimonials and reviews from previous clients will give you unfiltered insights into what it was actually like to work with the buyer’s agent.

More questions about using a buyer's agent

• What's the difference between a buyer's agent and a real estate agent?

  A buyer’s agent sources and assesses properties and represents the buyer in the bidding and negotiating process, whereas real estate agents typically represent the seller of the property. While buyer’s agents negotiate for the lowest possible price, real estate agents are usually compensated by the vendor, so they want to get the highest possible price for the property.

• Are buyer’s agent fees regulated?

  It may come as a surprise that buyer’s agent fees have been deregulated in all states of Australia. It’s therefore crucial to be aware of the industry fee guidelines and understand that there’s always room to negotiate.

• Are agent fees tax-deductible?

  If the property is an investment, the buyer’s agent fee is generally tax-deductible. It’s a good idea to check with your accountant or financial adviser.

• How does a buyers' agent property price guide differ to an online report?

  A good buyers' agent will provide their client with a detailed appraisal report outlining recent comparable sales of similar properties and an estimate of fair-market value. Buyer's agent Rich Harvey warns to be careful to choose a buyers' agent who completes their own independent analysis, and not one who is merely influenced by a selling agent's guide or just uses a computer generated or automated valuation report. A good buyers' agent will take time to analyse recent sales and provide a written comparison. The automatic reports do not accurately assess renovations, aspect, street appeal, land size, floor plans, internal condition, construction type.

• How does it work if you hire a buyer's agent just to negotiate?

  In this instance, a buyers' agent will negotiate with the selling agent to get the best possible price for your property. Harvey recommends you ask potential buyers agents about their negotiation strategies and past successes in securing favourable deals for clients. "Strong negotiation skills can save you thousands of dollars," he says."An agent who is confident and skilled in negotiation will be able to advocate effectively on your behalf. They should be able to accurately advise you on current market value and give advice on how they will position each offer."

• How do buyer's agents get access to off-market properties?

  An agent with extensive connections in the real estate industry can draw on their network to give you exclusive opportunities that you might not find otherwise, Harvey says. Buying an off-market property can provide you with the benefit of buying with less competition and potentially a lower price.

To make sure you get accurate and helpful information, this guide has been edited by Jason Loewenthal as part of our fact-checking process.

Written by

Richard Whitten

Editor

Richard Whitten is a money editor at Finder, and has been covering home loans, property and personal finance for 6+ years. He has written for Yahoo Finance, Money Magazine and Homely; and has appeared on various radio shows nationwide. He holds a Certificate IV in mortgage broking and finance (RG 206), a Tier 1 Generic Knowledge certification and a Tier 2 General Advice Deposit Products (RG 146) certification. See full bio

Richard's expertise

Richard has written 538 Finder guides across topics including:

• Home loans
• Property
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Co-written by

Sarah Megginson

Head of editorial

As an authority on all things personal finance, Sarah Megginson is passionate about helping you save money and make money. She is an editor and money expert with 20 years’ experience and an extensive background in property and finance journalism. Sarah holds ASIC RG146-compliant Tier 1 Generic Knowledge certification, and she's a regular media commentator, appearing weekly on TV (Sunrise, Channel 7 news, Nine news), radio (KIIS FM, Triple M, 3AW, 2GB, 6PR) and in digital and print media. See full bio

Sarah's expertise

Sarah has written 190 Finder guides across topics including:

• Home loans
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