A buyers agent is a real estate professional who assists clients in identifying and negotiating in the purchase of properties of their behalf.
There’s a variety of scenarios where a buyers agent can help their clients. From full service research based on a brief, negotiation and ensuring a smooth purchase, through to helping clients who have already found a specific property and need negotiation or auction bidding, a buyers agent can help with their knowledge of the real estate transaction process and providing a third party who can take emotion out of what is a significant purchase.
What’s the difference between the role of a buyers agent and a real estate agent
Both buyers and real estate agents operate under the same regulatory environment and organisations, however their function in the industry is very different. A buyers agent focuses solely from the purchasers perspective, whilst the real estate agent assists the vendor selling their property. With this, this means that the buyers agent is only paid by the buyer of the property, and likewise a real estate agent is only paid by their vendor who they sell the property for – to avoid any potential conflicts of interest.
How are buyers agents regulated?
Regulations for real estate professionals are State based, with buyers agents being required to be licenced in all States and territories in Australia. Buyers agents go under specific training for the real estate industry and must maintain licencing by their States business regulatory organisation. Licencing is two tiered, with employee licencing and agency licences. For a buyers agent to operate their own business, they are required to have a full real estate agency licence, whilst any direct employees only require a less employee licence underneath them.
An In-depth understanding of the buyers agency process
As real estate transactions can be complex, the entire buyers agent process is significant.
When onboarding a client, the buyers agent will generally get you to complete a fact find document and conduct an analysis to find the exact parameters of the clients desired property. This step is essential in ensuring the agent spends their time efficiently in shortlisting the right properties for the client to review. Information required will generally include how the property will be purchased (using finance, cash, what mortgage broker you will be using etc), budget requirements, general locations, whether specific rental yields are required if for investment, land size, number of rooms/size of living space etc. For properties which they client wants to live in, proximity to public transports, schools and amenities are common considerations.
All of this information is used to generate the client brief which will then be used to generate the purchase strategy for the desired property. Melbourne based buyers agent Paul Murphy notes that providing accurate information for your brief is essential for achieving the best results as it drives the entire process of the real estate professional.
The buyers agent will then begin the property search based on the information provided. Short listed properties will generally be shown to the client which they can confirm whether it meets their brief. If so, the buyers agent will negotiate on the property or if at auction, bid on your behalf. Some buyers agent may charge a separate price if auction bidding is required, so check what is covered by their fees.
How much do buyers agents charge?
There is no industry standard pricing for buyers agent fees. Some will charge a flat fee based on all circumstances, or separate levels dependent on the features required. Others will charge a percentage of the end purchase price. Some will have a hybrid approach, with set fees with percentage fees based on parameters such as negotiating below a certain price or meeting the brief under a certain budget. It’s important to discuss the fee structure prior to engagement so you’re fully aware of the end costs and that the scope of services to be provided.