Buyer agents (aka buyer advocates or property finders) are people who, unlike selling agents, work on behalf of the buyer. Even though real estate agents who you contact in the process of house-hunting will try to create the impression they are acting in your best interest, the truth is they are working for the vendor. This is why, if you need an agent to act in your interest, you should hire one.
What do buyer agents do?
They find a house that matches your search criteria and negotiate a good deal on it. Different companies offer different service packages, but it is common to include property search, evaluation, negotiation and then coordination of the professionals (such as building inspectors, solicitors, lenders, etc) involved in the process of purchase.
Why use buyer agents?
For several reasons:
- If you’re an expat, buying a property in Australia when you’re living somewhere else in the world can be quite difficult – buyer agents can really help here.
- If you would like to remain anonymous as a buyer.
- If you’re not familiar with the market and don’t have the time to gain the knowledge, using a buyer agent can save lots of time and leg work. You won’t have to follow the market religiously, check property listings on the internet every day and spend every weekend inspecting houses you won’t end up buying.
- I must say here I’ve never used buyer agents so this information is not from my personal experience, but most of them claim to have access to silent listings of houses that never appear on the internet because they are sold prior, through “word of mouth” and the estate agents’ networks.
- They do not get emotionally attached to a property, so won’t lose their cool at an auction or during negotiation with the vendor, potentially saving the client some money that way. Not many buyers possess the kind of ability to walk away as buyer agents do.
Aren’t buyer agents expensive?
They certainly aren’t cheap. Their fees range from several thousands to 2%-3% of the purchase price. But even someone with my sense of thrift understands that there are cases when using buyer agents is worthwhile.
If you are purchasing a property in the high end of the market the amount of money saved by using a buyer’s agent can be much more significant than the fees they charge. If you are buying an investment property all the expenses incurred in the process can be written off tax. If you have no idea what the property you’re buying is worth (not what the vendor is willing to sell for – but what it is REALLY worth) – the risk of misinformation causing you to overpay is quite high.
How to choose buyer agents
Pay a visit to the website of REBAA (Real Estate Buyers Agents Association of Australia) and have a look at their Standards of Practice. This is what you should be looking for when choosing a company to represent you as a buyer in a property transaction.
In short, they should be in this business for at least 12 months, be licensed, have a professional indemnity insurance, tell you when your expectations are unrealistic, disclose any conflicts of interests (existing or potential) and sign a written agreement with you. And, of course, a recommendation from someone you know means a lot.
Have you ever used a buyer agent? Was is a success or a disaster?
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Great article, this is a good educational reading, just wanted to add that US expats also have to worry about tax and should get well informed in this area before moving to another country. We offer valuable free expat tax information under the “free advice” tab on our site, or you can try giving us a call at 713-774-4467 for a paid consultation with our firm’s expat tax specialist.