Buyer’s agents

Hi,

Just wondering if someone could let me know what buyer’s agents do?

Also, how do they get paid? I’ve had some people say that you as the buyer pay their fees then i’ve had someone tell me that they get paid by taking some of the commission from the sale that the real estate agent would get.

 

There are buyers agents and then there are buyers agents.

The bad ones will send you properties that their mates / colleagues have recently built, or listings off of the web etc. Sometimes this goes under the guise of 'investment advisor' or other such names to make you think they're helping you out.

A good one will listen to your criteria and hunt until they find something that matches that. Quite often, because they've been buying a few houses for others, they've built up a rapport with the local sales agents who can show the buyers agent houses before they're marketed to the public. To do this well, they'll have a geographic range that they'll be restricted to. I'd probably avoid one that can help you buy anywhere in a whole city, let-alone in multiple states.

In terms of charging. From what I've seen, most will charge a smallish engagement fee which gets you on the list and the search started with the rest of their fee usually due once the contract goes unconditional or settlement occurs. Some charge a few thousand, some charge a percent of the property etc. This is paid by the buyer not by the sales agent in Australia but is different in other countries.

 

Hi @Brisbuyer

A buyers agent can source and negotiate to buy property for you, in order to help you get a good,timely result and make money on your property investments. In many cases the properties are not advertised and/or purchased under market value.

An independent buyers agent should work closely with you, and on your behalf, and should not have any vested interests or commissions attached to selling you a particular property – meaning they should be working in your corner, and with your best interests in mind.

As a buyers agent, I get paid on a fee for service basis. There are no hidden commissions.

Regards Kate

 

A BA should work for you and nobody else to ensure no conflict of interest.

Some pretend to be buyers agents but are actually getting a commission from selling you specific stock. These also often tend to be cheap or free services - because they get commission from the seller instead (red flag - conflict of interest), and this commission comes out of your pocket in an underhanded way via selling you over priced property.

A BA should be a fee for service (ie you the buyer pay them to work for you and you alone), and I think tends to be around 2% of purchase price for the 500k range (so 10k for a 500k property).

But even with a BA that works only for you, it doesn't mean they are actually any good. You need to know in detail what your strategy is and what your goals are and how certain types of purchases will give you an advantage over just any property because they may ask for a list of criteria and not actually explain the options and strategies available to you, and if you don't know what strategies are available, they will just find something that fits your basic specification and you have lost a huge opportunity to buy something that can perform much better. If you use a BA, rely on them only for the work of looking at property, not the knowledge/strategy/goal. If you don't know this stuff, go and learn it before you get in touch with a BA. You can learn this stuff - there are some fantastic books out there.
I would also say go and learn the locations yourself as much as possible. This is a lot of work, but don't assume that a BA is actually good and will pick locations that will help you reach your goals. They may push just one suburb and ignore all others.
The way you do due diligence is to learn as much as you can in advance about strategy and locations so that you have the best chance of knowing if a certain BA is actually worthwhile to you or a waste of money - and it will give you the best chance of finding a quality property that performs well in the short and long term. Don't assume they will fill your missing knowledge gap. You need to be the brain while they are only your eyes and ears.

 

Have a read here: Buyer’s Agents | Real Estate Buyers Agents Association of Australia (REBAA) Inc

 

This is a real estate agent calling themselves a buyers agent.

 

Hi Simon,
Could you explain how real estate agents do this? Do they try and sell a property to you that’s not marketed by them the try and get the comission? Thanks

 

Its usually under the guise of helping you or providing investment advice. They say hey look at this house it matches what I think you should buy. They then get a comm from the vendor or sales agent, and probably charges you a fee as well.

 

This ^^. And if its off the plan or new they can get BIG commissions from builder direct, or if it is an existing property on the market they can "conjunct" which means they split the marketing agents fee from the seller (the marketing agent will refuse in a hot market but if it is slow and they need to get a buyer, then the agent who brings the buyer gets half the comm)

 

Agents that receive commission splits from selling agents cannot refer to themselves as buyers' agents. They are conjuncting selling agents.