Thinking of using a buyer’s agent but want to know how much it could cost you in fees?
If you have never used the services of a buyer’s agent before you are likely to have a lot of questions. In case you’re unsure of what a buyer’s agent is, they’re a professional you hire to help you through the notoriously complex property buying process. They offer property negotiating skills, their relationships with real estate agents, and deep knowledge of the local property market. The best buyer’s agents also have a good idea of the true value of a property, with access to off-market properties before they list.
So how much will it set you back to access all of this? This article will answer all the critical questions you have about buyer’s agent fees and costs. It will also detail all the different pricing models you may encounter, as well as typical fees you can expect in our capital cities.
Let’s start by looking at what a buyer’s agent factors into their pricing and fees.
A buyer’s agent takes a range of factors into account when they calculate their fees. The biggest consideration is how much time they will spend working on your property purchase. This is largely dependent on what level of service you require from them.
Some buyers need a buyer’s agent to do everything, from sourcing properties to negotiating with the vendor, bidding at auction and ensuring all paperwork is appropriately processed. As you can imagine, this ‘full service’ option means they need to do more than if they just help with sale negotiations or bidding at auction.
The biggest consideration is how much time your buyer's agent will spend working on your property purchase.
It’s important to note that most buyer’s agents charge for affiliated services, like pest and building inspections, separately. So make sure to budget for these accordingly.
Let’s now look at the most common pricing models buyer’s agents use.
Buyer’s agents in Australia are likely to quote you a fee structure based on these three pricing models.
In this fee model, you pay for a buyer’s agent’s services based on a percentage of the final purchase price. In Australia, this is generally between 1 per cent and 3 per cent, depending on the level of service provided.
The table below shows what you would be paying based on this percentage range, here comparing an entry-level home with a larger family home.
The percentage model does have a few drawbacks. The first is that you won’t know how much you owe until negotiations are complete.
It is also not in the interests of the buyer’s agent to help negotiate a lower purchase price. Some buyer’s agents get around this by charging a higher percentage for securing a lower price, and capping their fee above a certain amount. For example, they may charge a 2 per cent fee if the purchase price is above $600,000, but 2.5 per cent if they negotiate a price below that figure.
In this pricing model, a buyer’s agent charges a fixed fee which varies depending on which tier or price bracket the property falls in. This gives you certainty how much you pay, but it could seem expensive if the price ranges of the tiers are large.
Let’s now look at buyer’s agent fees across our capital cities.
As the name suggests, you pay a flat fee to your buyer’s agent, and it is not tied to the final purchase price of the property. This can be anywhere from a few thousand dollars to tens of thousands for luxury homes. Some agents require you to pay the fixed fee in instalments when you hire them and then a success fee on completion.
The fixed fee approach means you know what your outlay will be, though if you are buying a relatively affordable home this fee could seem pricey.
How much do buyer’s agents charge in Brisbane? Brisbane-based buyer’s agents have a variety of fee models, and most will fit into the 1 per cent - 3 per cent percentage fee model. For those who charge a flat fee, expect to pay anywhere from $5,000 - $16,000. For example, Universal Buyer’s Agents, a Brisbane-based property buyer's agency we named one of the best buyer’s agent’s in Brisbane in 2022, works on a flat fee, paid upfront basis.
Meanwhile, Streamline Property, which we also named one of the best in the city, charges their full service fees in two instalments. The first is an engagement fee payable upfront ($5,000+ GST) and a success fee once the purchase becomes unconditional.
You should expect to pay higher buyer’s agent fees in Sydney, which is the country’s most expensive property market, though they can vary greatly. For agents working on a percentage fee, expect to pay anywhere from 1.5 per cent to 3 per cent of the property purchase price.
Fixed fee buyers agents in Sydney will charge in the range of $7,000 – $20,000, with an average in the region of $12,000.
Be aware that most agent’s in Sydney will charge you separately for things like property and pest inspections. They will also have distinct fees for a partial service, like only negotiating or bidding at auction.
Fixed fee buyers agents in Sydney will charge in the range of $7,000 – $20,000.
If you’d like to find out the specifics of how much to expect, reach out directly to some top buyer’s agents in Sydney.
Buyer’s agents are more commonly called buyer’s advocates in Melbourne, so don’t be confused as they’re the same thing. Like Sydney, property prices are higher in the Victorian capital and typical buyer’s agent fees are anywhere from 1.2 per cent to 2.75 per cent of the purchase price.
To give you an idea of what to expect, consider the following examples. Cate Bakos Property, which is one of the best buyer’s agents in Melbourne, has a fixed fee structure. In contrast, Gardenvale agency James Buy Sell adjust their fees depending on if you source the property and they negotiate (1 per cent + GST), or if they source and close the deal (2 per cent + GST).
Like elsewhere, buyer’s agents on the Sunshine Coast will charge for their services in a variety of ways, such as a flat fixed fee, or a flat search fee plus 1 per cent of the purchase price of the property (plus GST).
Sunshine Coast Buyers Agency quotes the following fee structure for their services, including:
You can expect buyer’s agents in Adelaide to charge anywhere from 1.5 per cent to 2.5 per cent of the purchase price, or a fixed fee in the region of $10,000.
In terms of buyer’s agent costs in Perth, those located in the WA capital tend to charge anywhere from 1.5 per cent to 2.5 per cent of the purchase price, or a fixed fee in the region of $9,000.
If you’re a property investor, you will also need to know if buyer’s agent fees are tax deductible.
If you use a buyer's agent to help purchase an investment property, their fee is tax deductible. This can help offset the overall cost of holding your investment when it comes time tax time. If you’re unfamiliar with your tax status as a property investor, we recommend getting professional advice or getting in touch with the Australian Tax Office (ATO). If you’re an owner-occupier their fee is not tax deductible.
Using a buyer’s agent to help in your property purchase can help you save money. If time is money, and you are time-poor, then they can take care of the search and shortlisting phase.
Their local knowledge and insights can also help locate properties with high growth potential, which are skills that could also help prevent you from paying too much for a property.
Well-connected buyer’s agents will also have access to off-market properties, which you could bid on before others get a chance.
If you’re looking for some numbers, Sydney-based agents Cohen Handler claim they aim to, “save our clients 7%-13% of the purchase on average.”
You should now have a clear idea of what buyer’s agents charge where you live, and know what to expect when it comes to negotiating their fee. We also have other useful resources on Doorsteps, like the latest property price predictions, financial advice for buying a house, and our detailed home buying guide.
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