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In a competitive housing market like today’s, the process of buying a property can be quite daunting for prospective buyers. The stresses, hurdles, and time it takes to find a property that meets your preferences, budget, and goals can quickly feel overwhelming.
While many choose to buy a home on their own, it can be useful to get professional help along the way.
This is where buyer’s agents come in.
Buyer’s agents are a way for prospective buyers to find their desired home or property at the best price, while taking the work out of different steps of the purchasing process.
So what does a buyer’s agent do and are they worth it for your budget?
In this guide, we’ll discuss the potential benefits and downsides of using a buyer’s agent, so you can decide if hiring one is right for you.
Simply put, a buyer’s agent is a licensed professional who acts on behalf or advocates for the interests of someone looking to buy a property. They need to be licensed real estate agents or working under the direction of a licensed real estate agent with a certification of registration.
Buyer's agents do everything from researching and sourcing homes, to working out a deal on a given property.
Many are independent, which lets them work specifically in the interest of buyers when it concerns researching, sourcing homes, and working out a deal on a given property. They should not be tied to a single selling agency, and instead, have strong connections with different selling agencies.
A real estate buyer’s agent can assist prospective buyers with a range of steps during the purchasing process including:
Depending on how a buyer’s agent or their agency operates, they will usually charge a commission or a fixed fee to provide such services.
Simply put, buyer’s agents and buyer’s advocates are interchangeable terms that refer to the same thing. These terms describe real estate professionals who advocate for the interests of buyers during the property buying process.
Compared to real estate agents, who ultimately work for the interests of the vendors or sellers, buyer’s advocates look after you, the buyer.
What a buyer’s agent does for a potential buyer depends on how much help a prospective buyer needs and wants. They can help with as many steps in the purchasing process as the client requires, so the costs can be tailored to both a modest or generous budget.
This includes tasks that can be time-consuming, expensive, and stressful such as:
Buyer's agents can help with as many steps in the purchasing process as the client requires, so the costs can be tailored to both a modest or generous budget.
Whether a buyer’s agent is worth hiring will depend on a range of factors including what the buyer is looking for in a property, the expertise of the agent, and how much assistance they require with buying property.
Buyer’s agents can offer a number of benefits over toughing it out in the market alone.
For many people, especially those who are inexperienced with purchasing property or are time-poor, a buyer’s agent may be worth the expense. They can offer a number of benefits over toughing it out in the market alone. This can give a buyer who hires one a competitive advantage over other buyers in the market.
Some of the key reasons people choose to hire a buyer’s agent include the potential to:
When it comes to shortlisting properties and researching the market, buyer’s agents can help reduce the time and hassle buyers face when searching for a property.
After all, making phone calls, sifting through real estate listings, building a shortlist of properties, organising inspections, and driving from property to property can be a tiring and drawn-out process. Buyer’s agents can make finding and selecting the right property much faster and easier by taking care of these tasks for you.
With access to wide and deep networks of real estate agents, buyer’s agents can also efficiently pool listings and build a qualified list of properties to choose from. Those who have particularly strong relationships with real estate agents may even have access to off-market listings that prospective buyers can access.
If you’re looking to make an interstate purchase, hiring a buyer’s agent to act on your behalf in that state can make the whole process far quicker and easier. This proved to be particularly helpful during the pandemic, when Covid-driven border closures made interstate property purchases particularly taxing.
If you’re buying and selling property at the same time, a buyer’s agent can help guide you through the process. Knowing a professional is there to help you can provide you with significant peace of mind, letting you focus on organising your property sale.
Having a skilled and experienced buyer’s agent with you when you’re buying a property can be the difference between a good and great deal.
With the current levels of inflation in the housing market, knowledgeable buyer’s agents can help keep up with the huge rises in property values and determine what a given property is actually worth in the market.
Depending on your needs, they may also be able to secure more competitive pricing on certain vendor services through their network.
Knowledgeable buyer’s agents can help keep up with the huge rises in property values.
Negotiating is an art that demands a level of practice and confidence, particularly when it comes to purchasing a property. A real estate buyer’s agent is well-versed in negotiating on behalf of buyers, as they have a range of tricks and strategies to get the best deal for their clients.
Having one in your corner could therefore help to keep your costs down and ensure you’re not overpaying for a property or any associated costs.
Buyer’s agents can take away the stress and fear of navigating the buying process, especially for first home buyers or those unfamiliar with the industry.
If you aren’t comfortable with engaging with real estate agents or bidding at an auction, buyer’s agents can also do that on your behalf. This relieves the pressure on you at auction and can help you secure a more favourable deal. A good buyer’s advocate will also know if a price point you’ve received is serious or if you’re being under- or over-quoted.
Buyer's agents can relieve the pressure on you at auction and can help you secure a more favourable deal.
As hiring a buyer’s agent is an additional cost in the purchasing process, it’s important to take the time to decide if hiring one is right for your circumstances. It’s critical to keep in mind that hiring one doesn’t guarantee that you’ll save more money overall.
Buyer’s agents offer their services as either a fixed fee or a percentage of the purchase price of a property. The fees can be as much as 3% of the purchase price of a home, which in a housing market where properties can go for six to seven figures, can amount to tens of thousands of dollars. You may need to also pay an engagement fee as a retainer for the time and effort the buyer’s agent will spend researching properties and the local market.
Buyer’s agents often move quickly and secure a purchase.
Whatever money an agent can save you through negotiation may not be enough to justify this cost. For first-home buyers or low deposit holders, the extra cost of a buyer's agent may not be an expense they can justify spending.
Buyer’s agents often move quickly and secure a purchase, which may make some prospective buyers who want to take their time during the process feel a bit rushed. Needless to say, with a serious commitment like buying a house, it’s important to never feel too rushed or pressured into a purchase. That’s why it’s vital to work with a professional who you feel comfortable communicating your needs to.
While most buyer’s agents are consummate professionals, there are some who may try to take advantage of naive buyers or act outside the interest of their clients. Unethical ones may charge an excessive full-service rate or engagement fees simply for consultations.
To ensure you work with a trustworthy buyer’s agent, make sure to read reviews of buyer’s agents and seek out recommendations.
We’ve done the research and tracked down the top buyer’s in major cities across the country. Our buyer’s agents guides put a spotlight on the 10 best buyer’s agents in each city. Check them out here:
Want to make the most out of hiring a buyer’s agent? Be sure to ask yourself the following questions before settling on one:
Professional buyer’s agents are required to be licensed real estate agents and have appropriate certifications to provide their services. Before deciding on one, it's essential to check whether they have the legal authority to act on your behalf. To ensure you get the best possible service, take the time to research how reputable a buyer’s agent is, and ultimately, whether they're worth hiring.
A buyer’s advocate is meant to work exclusively for one party in the transaction of property. If they receive any income from sellers or developers, these are serious red flags. When researching buyer’s agents, it’s also useful to check to see if they receive any rebates, discounts, or commissions from third parties or service providers they refer to you or any other conflicts of interest. If they do, it’s not necessarily a red flag, but they should be upfront about this from the very beginning.
Buyers need to ensure their buyer’s agents have the tools, skills, and experience to secure their property of choice. A good buyer’s agent will have a large network of contacts and selling agents to choose from.
They should also have a wealth of experience to draw on to advise you through the selection stage of finding a home. As previously mentioned, negotiation is a key skill buyer’s agents should have. So make sure to choose one that is an experienced negotiator.
Final thoughts
Hiring a buyer’s agent is one option a buyer can take in the journey of securing and purchasing real estate. But they’re not the only one a buyer has at their disposal.
These professionals can be very useful for people unfamiliar with the buying process. They may also help those who are looking to reduce the time, energy, and stress associated with buying a property. But for some, the cost of a buyer's agent may outweigh the potential savings.
Regardless of whether you're thinking about seeking the services of a buyer’s agent or going about it solo, it's always a good idea to be educated and as informed as possible when it comes to buying a property.
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