What is a buyer's agent?

Researching properties

By telling your buyer’s agent everything you want from a property, the agent can use their expertise to search for some of the best options that could suit your needs. They can objectively prepare a shortlist of potential properties, without being emotionally influenced by some aspects of a property, which can be a risk when you’re house-hunting. They can also conduct the appropriate due diligence, checking the property, the area, and the legal documents for any surprises or risks that could potentially be missed by a less experienced buyer.

Buyer’s agents can even connect you with pre-market properties that haven’t gone on the market yet. This could help you to save even more time and energy delving through listings and attending open houses, as you could potentially snap up the perfect property without competition from other buyers.

Negotiating offers

A property is almost always a significant purchase that will make an impact on your finances, so it’s important to do what you can to get the best deal possible. If you’re not especially familiar or confident with real estate transactions or haggling, a buyer’s agent can serve as your representative when negotiating with the selling agent and/or vendor, to help everybody get a fair deal.

Bidding at auction

If you can’t make it to an auction in person, such as if you live far away, have other important commitments, or even if you’re just not confident in an auction environment, you can send a buyer’s agent in your stead to make bids on your behalf. Some buyers also prefer to send buyer’s agents to bid on their behalf at auctions to better maintain their anonymity.

Different buyer agents may use different structure, such as:

• Fixed fee: May apply for handling specific tasks for you, such as bidding at an auction
• Commission: May cost anywhere from 1.5% to 3% of the property’s purchase price.
• Retainer: Some agents may charge an ongoing fee while they are providing you with their services.

Keep in mind that in some cases, like when buying an investment property, your buyer’s agent fees may be tax deductible. Consider contacting a tax accountant or the ATO to confirm.

Buying a property can be a very personal decision, especially if you’re buying a home to live in. By relying on a third party to handle this for you, it’s possible there could be misunderstandings about which property features are dealbreakers and which are must-haves. There’s a risk you could end up owning a home that you don’t like as much as the agent thought you would. 

A property can also be an expensive purchase, with every dollar counting when you’re saving a deposit or calculating how much you can borrow. You’ll need to consider whether the fees charged by a buyer’s agent will be worth the value their services offer.

There’s a risk that a buyer’s agent may not always act in your best interest. For example, an agent could have relationships with property developers or vendors that may also pay them commissions for referring buyers their way. While licensed and professionally accredited buyer’s agents should always act in your best interests, it’s often worth doing some research and asking some questions of the agent first.