Using a buyer’s agent? What you need to know
Spring is the most competitive time of year when it comes to buying property, meaning house hunters need to do everything they can to get value for money.
One strategy an increasing number of Australians are employing to get an edge when it comes to purchasing property is to use a buyer’s agent or advocate.
What does a buyer’s agent do?
While it’s an old concept in many countries, using a buyer’s agent is something that is relatively new in Australia, although it is said to be gaining popularity.
For a fee, a buyer’s agent works for a purchaser to search for properties, evaluate them and then negotiate with sellers or agents. They then finalise the property deal at the best price for the client.
What to look for in a buyer’s agent
Most importantly, a buyer’s agent should be qualified and accredited. That’s according to the Real Estate Buyers Agents Association of Australia (REBAA), the peak body for the industry in Australia.
“Every state and territory in Australia has different licensing requirements so you need to make sure that the agency you’re dealing with holds a real estate qualification in the state you’ll be buying property in,” the REEBA says on its website.
The REBAA, Australia’s largest industry body of accredited buyer’s agents with licensed professionals in every state of Australia, requires its members to follow its rules of conduct.
“We strongly recommend buyers use an accredited REBAA member or risk entrusting what is likely to be the most important purchase of their life to someone who is not wholly independent.”
In addition to REBAA membership, buyer’s agents should also hold a real estate licence to practise, although it often doesn’t take long to obtain this type of qualification.
A good buyer’s agent is able to assess your needs and also possesses the expertise required to conduct relevant research on things like local developments or potential re-zonings in the area.
Other potential benefits include saving you time, emotional detachment and the ability of an agent to find off-market properties that are not publicly advertised.
What to discuss with a potential buyer’s agent
The big thing to discuss when considering using a buyer’s agent is price. Prices vary widely across the industry, so it’s worth the effort to shop around to get the best value.
There’s also the fee structure to get clear on with a prospective agent. These can take the form of a fixed fee or a percentage of the sale price.
Consumer group Choice’s Jemma Castle warns that in some cases the fee structure can impact the ability of the buyer’s agent to get you best value for money.
She says a buyer’s agent is generally required by law to represent your best interests, but cautions that “a percentage fee structure provides a potential disincentive for the agent to seek the lowest sale price, as their commission may increase”.