A buyer’s agent is a licensed professional who specialises in researching, finding and evaluating a property before negotiating a purchase price and/or bidding at auction on your behalf.
Essentially you are paying them for their skills to find and negotiate a property in the right locations, in line with your needs/wants and in an investment sense; goals. With so many different markets/locations around Australia all performing differently, as well as literally millions of properties to choose from, the whole process can get very confusing.
In most other aspects of our lives we pay professionals to assist us in tasks that we aren’t educated on, from accountants to do our taxes or personal trainers for our fitness. Being that for the majority of people, purchasing a property will be one, if not THE biggest purchase/outlay of their lives, it would make sense to hire an educated professional to assist with the process.
It’s important to note that while real estate/selling agents work solely to get the best outcome for the seller, A Buyers Agent represents the buyer and has their best interests at heart. A buyer’s agent should have no properties to sell, instead they should have access to all Properties on the market, and sometimes before they even get to market!
A few questions that may help you decide whether or not you need to use a buyer’s agent…
Are you ready to Invest?
Once you are ready to invest, including having your finances in order, a deposit saved and an outline of your plan you are ready to speak with a buyer’s agent.
Do you need help building your property investment plan?
A buyer’s agent may be able to assist you in planning your next (and future) purchases for your portfolio. They can assist you in minimising ‘Road blocks’ along the way.
Do you have time?
Do you have the time to do the market research, including state, city & suburb markets? Do you have time to research the best streets in the area? do you have time to narrow down to individual properties and then potentially travel interstate, inspect these properties, bid at auction, liaise with real estate agents etc.?
Do you have the knowledge?
This is a critical one. While you may spend your lunch break or an hour in the evening in between watching TV researching markets and properties, Buyers agents are doing this full time, across numerous markets. This experience and knowledge of the different markets is invaluable when selecting and negotiating a property. A good buyer’s agent will know an area inside out from lifestyle factors, future infrastructure plans to economic drivers and projected long term capital growth.
What is your strategy?
As above, a buyer’s agent may assist in building out your investment strategy plans. If you already have a strategy and it is quite aggressive i.e. you plan to grow your portfolio in a short period of time, leveraging a buyer’s agents time and knowledge could be a crucial step in achieving your goals.
Don’t know where to start?
Fairly self-explanatory, but a good question to ask yourself.
Are you good at managing stress?
For most people, purchasing property is a stressful and emotional time. It is often said that successful property investing or even purchasing requires leaving your emotions out of the equation. Buyers agents can take a non-emotional, planned approach to the property purchase to ensure you get the right property for the right price.
How are your negotiation and/or bidding skills?
Buyers agents are inspecting properties and dealing with sales agents and auctioneers almost daily. Chances are their negotiating skills are quite strong.
How Are Buyer’s Agents paid?
Buyer’s Agents do not get commissions from the sale of the property, they are paid by you, the buyer.
Buyers Agents generally charge a flat fee for their services. A retainer is usually charged up front/upon engagement, with the remainder of the fee due upon unconditional exchange or settlement. When discussing fees with a Buyer’s Agent, it’s important to keep in mind that it is extremely easy to make an extremely costly mistake when purchasing properties worth hundreds of thousands of dollars. Generally, a Buyer’s agent will also save you far more than their fee in knowledge, groundwork and negotiating.