Finding your dream home isn’t always easy. There’s no doubt it can be time consuming and sometimes a little exhausting, and that’s why having help by your side could make all the difference. Should you use a buyer’s agent to help you along the way?
If you’ve ever bought a house or are in the process of looking for your dream home, you’ll know it can be a challenging experience. In fact, a recent study found that buying or selling a home is more stressful than having a child, getting married or changing jobs.
That’s why some people are turning to buyer’s agents in the hope of making the home buying process easier and less stressful.
What does a buyer’s agent do?
Unlike real estate agents whose job is to help you sell a property, buyer’s agents help you buy a new home – that includes searching, evaluating and negotiating a fair price on your behalf. They can also offer valuable market knowledge, including spotting new hot spots, and do the auction bidding for you.
Other services can also include refining your wish list into a realistic ‘buyer’s brief’, preparing a shortlist of suitable properties, contract negotiation and overseeing the exchange, as well as conducting due diligence such as building inspections, pest, survey and engineering reports.
Buyer’s agent Rich Harvey, Founder & CEO of Propertybuyer.com.au, says an added bonus of using a buyer’s agent is that they can help you remove emotion from the purchase so you can make a smart decision, faster.
“We can help people find and buy a house pretty quickly,” he adds. “Our record is two days, but on average it takes about 30 to 40 days.”
Harvey also says that professional buying agents have the advantage of market knowledge and insight. “It takes a lot of people 12 months to get up to speed with the market and the market could have moved 10% in that time. Buying agents have access to all of the records and statistics for where the market is heading in individual areas.”
How much does it cost?
According to REBAA, the Real Estate Buyers Agents Association of Australia, most buyer’s agents charge 2% plus GST on the purchase price, but there are also many who charge a fixed fee.
Propertybuyer.com.au, for example, charges a fixed fee, beginning at $9,900 and rising based on the value of the property.
As a guide, 2% of the purchase price of a $1 million property (the median price of a home in Sydney) is $20,000, so if you plan to use a buyer’s guide you have to allow for the extra cost in your budget. For some buyers, the cost may be prohibitive.
What are the pros?
The biggest benefit of using a buyer’s agent is that they have broad historic knowledge of the market and can provide accurate advice on pricing. In addition:
* They access more properties, including off-market listings, before they’re advertised.
* By creating a realistic buyer’s brief, they can help you buy a home faster – potentially before property prices increase.
* They do the hard work of searching and shortlisting suitable properties, which saves you time and stress.
* They can help you save money by negotiating the price.
* If you’re nervous about bidding at auction, they’ll do it for you.
* They attempt to remove the emotion from your purchase, which means you end up with a home that will also be a good investment in the long term.
What should you watch out for?
A buyer’s agent should be impartial and independent – in other words, working for you and not taking money from the owner for securing a sale.
REBAA advises checking your prospective buyer’s agent website to see if they also sell real estate and outright asking them if they receive any commissions or kick-backs Also check your buyer’s agency agreement carefully as they are legally required to disclose if they are receiving commissions from a third party (such as the vendors or real estate agents).
Before engaging a buyer’s agent, you should be conscious of the fact that you will be signing a binding agreement – you can’t change your mind part-way through the process.
Many buyer’s agents charge an engagement fee at the beginning and the final fee once you exchange on the property. So there is an upfront cost that you’ll have to meet before you can proceed.
Finally, you have to be really clear about what you are looking for otherwise you won’t get the right property. If you don’t communicate exactly what you want to the buyer’s agent – or if you keep changing your mind – the whole process can go pear shaped.
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