Property Insights

After years of working hard and saving money, you’re finally ready to purchase a property. So why would you consider engaging a buyer’s agent? What value do they really add for the savvy modern-day buyer?

“They are just for rich people”

“I’ll get a better deal if I go directly through the sales agent”

“It’ll cost me more to money to use one”

“I can do my own research, what do they know that I can’t get from the internet”

These are just some of the remarks that get thrown around about buyer’s agents, which aren’t necessarily true. Depending on what your situation, a buyer’s agent could potentially save you thousands!

What does a Buyer’s Agent do?

A traditional buyer’s agent will simply represent the buyer in a property transaction and are paid separately by the buyer for their efforts.

They will search/assess properties that suit their client’s criteria/budget and then present these options along with pros and cons. They will also negotiate the price with the selling agent or attend auctions and bid on behalf of their client.

In a nutshell, a buyer’s agent will save their client a lot of time and take the stress out of buying a property. There is a range of different reasons someone would engage a buyer’s agent, some of which are listed below:

• You live overseas or interstate and need someone on the ground who can attend inspections and help facilitate the transaction
• You’re unfamiliar with the market in a specific area
• You’re time poor and need someone to do the heavy lifting for you
• You don’t know what to look out for and need an unbiased person to trust

How much does a Buyer’s Agent cost and who pays them?

This varies depending on the agent/agency. Some buyer’s agents will charge an upfront fee of $2000 before they will start searching/analysing/comparing and valuing for you. Then once they find something suitable, they could charge, for example, a set ‘success-based’ fee of $10k if the purchase price is under $500k or if the property is over $500k they will charge 1% to 2.5% of the purchase price. Some may charge the set ‘success-based’ fee as well as a percentage of the purchase price. 

Some Buyer’s agents might only charge an upfront fee and will then aim to conjunct with the selling agent (if they find a suitable property for you) meaning they’re paid a portion of the selling agents commission for introducing the buyer to them. The portion they are paid is negotiated between the two agents (this arrangement is more common in a ‘buyer’s market’, when stock is harder to move for the selling agents).

What is a ‘Builder Broker’?

Then there’s the agents you didn’t know you needed. The external agents. They facilitate the purchase of apartments, townhouses (often off-the plan) or even house and land packages on behalf of a Builder or Developer (but represent the Buyer and offer a concierge type service) however, they are usually paid by the Builder/Developer and essentially replace their sales channel; a confusing concept for some, “how can you be a buyer’s agent if you are being paid by the seller?”

To put it simply, they are like a finance broker, they provide a service to their clients but get paid by the bank (or in this case, the Builder/Developer). Commonly referred to as a ‘builder broker’. These agents will have relationships with many different Builders and Developers as well as Architects and Town Planners. These valuable connections and knowledge can be the difference between you securing the best block of land in an area you want or missing out.

When it comes to a ‘builder broker’, something a lot of people don’t understand is that they a paying someone’s commission whether they go directly to the developer/builder/selling agent anyway, so why not go through an agent who trying to get the best result for you, and not the seller. 

Why should I use a Buyer’s Agent or Builder Broker?

There are many benefits to using a buyer’s agent or builder broker, but the value may vary depending on your individual situation and the type of buyer’s agent you engage.

One of the main benefits would be the fact that they are unbiased. They will work to get the best outcome for the buyer, and with no emotional ties to a property, they ensure you see things from a different perspective. Another main benefit is they will often have access to off-market stock or be the first to know when stock is released which gives you a ‘first in, best dressed’ advantage.

If you’d like to know more about Ozzilat Property and how we can assist you on your buying journey, please contact us today.