Engaging a buyer's agent...

Hi all,
I had couple of questions come up in my mind regarding engaging buyers agents for buying a PPOR:

1. Whats the usual fee structure for a buyers agent?
2. Is there a set time-period for the engagement? i.e. 3-months, 6-months etc
3. What if we don't like any of the properties (aesthetics or price) the buyers agent is showcasing, will we be pressured to a "deal"? Industry's answer to this will be "obviously no pressure" but I would like to know what really happens out there in the real world.

Might sound like naive questions, I am new to this process hence asking.

 

What is stopping you from going out and looking for a PPOR yourself? To me a PPOR is a more emotive purchase than an IP, so the chance of a BA actually getting the right home for you is much less.

For instance, we've just moved into our new PPOR. I wanted new and shiny in a nice spot, Hubby wanted a nice view. We found many along the way that fitted that criterior and could have been purchased for much less than we paid. We settled for an older home on a canal, so Hubby got his nice view, I got a fixer-upper (again) grrrr.

 

I am not a buyers agent but have worked with a couple of them consistently so have an understanding of their processes.

Using a buyer's agent for your PPOR is a great idea if you are time-poor and would like to benefit from their negotiation skills.

1) This will depend on the buyer's agent you choose and their level of service. Generally under a certain amount ($700k) for example will be a flat fee, whilst above this will be a percentage. The percentage varies heavily from agent to agent and is generally around 1% to 2%.

2) This will vary from agent to agent.

3) In my experience, have never had a customer pressured to purchase from a buyer's agent to complete a purchase. At the end of the day, they want you to refer them and this is why it pays to ensure you research them first, check their google reviews and if possible, use one someone has referred to you from previous good experience.

If this is your first property, it may be more beneficial to explore property coaching, rather than the full buyer's agent's service.

This comes at a much lower cost of around $350 to $4k depending on the service you are seeking. They will help you with strategy and coaching as well as one on one sessions to discuss potential properties you have seen and guide you through the process.

Plenty of options, however in saying that, almost all my customers don't use a buyer's agent unless they are time poor or are struggling at the negotiation stage.

Good luck!

 

To be honest, in all 3 of these questions the answer is "it depends on the buyer's agent", so you should probably give a few that you're interested in a call with these same questions. In the end it doesn't matter what the "usual practise" is across most BA's, it will matter what terms YOU agree to when you engage the service of a specific BA.

 

Time. As a pleb, I have to work 3 jobs to afford a roof. Don't have time to run around searching. Also, being a pleb, cannot afford emotive purchases, need to be pragmatic.

 

Thanks @NickClunes.

 

Thanks @Rekke

 

Whether you like it or not, a PPOR purchase is emotive.

 

It is always case by case - and I've seen these scenarios go really well as well as really badly.

Can you get a BA to assist in your objectives? Absolutely - but my suggestion would be to talk to multiple experts in the specific area you are looking at and find one that you feel can be the best fit for your individual needs.

What geographic area are you looking? I'm sure there will be recommendations of good BA's that people can put forward for you.

 

This is true and it's actually one of the reasons people use us for PPoRs - they tend to make poor decisions when guided by emotion i.e. taking risks they shouldn't, offering more than they should pay, buying assets that have 'warts' on them that they just look through because of the street or school zone. Of course, whether they care or not about those items after the fact is another matter, but on balance most people prefer to minimise risk and minimise purchase price.

Also very true. As with any industry and field, there are good and not so good businesses and professionals. Start with using a REBAA BA who has been vetted for the membership as this will at least provide some level of confidence that they have the ethics and expertise you're looking for.

 

Purchased eventual PPoR not too long ago with a BA. My BA offered a flat fee, depending on the level of service, e.g. bidding at auction only, single property due diligence or the lot with analysis of needs/wants/search/dd/price negotiation and auction bidding. Contract period was for 6 months, but I did not need that long. I never felt any pressure on selecting a property, as we were going through the process my comments on the rejections helped the BA narrow down my likes and dislikes (and frankly helped me narrow down as well), but I found what I wanted well before the 6 months was up.

I used a BA as I didn't have the time, patience or expertise to do all the ground work myself, but I had been monitoring the area I was interested in for 4 months prior so had a decent idea of what was available and price, plus I had lived in the area previously and frequently visit, so I was broadly familiar with the right streets and good/bad pockets. We dealt with each other exclusively over Zoom.

Overall I found the experience very worthwhile, specifically the due diligence process as some things came up that I would not have understood the impact of on my own, and may have decided against the property without the further analysis we did, plus additional dd checks turned out ok, but they were things I never would have contemplated checking if I did this alone. Additionally the price and contract negotiation process was very valuable and more than saved me the money I spent on the BA. I got a 1.x mil property that ticked all my boxes for a 6 figure sum less than I was prepared to pay.

However depending on which BA you select, YMMV.

 

Thanks @Morgs. All NSW based, looking around Ryde, Epping, Thornleigh, Hornsby, Pymble, Lane Cove and all suburbs surrounding/inbetween these.

 

Thanks @BeautifulBicycle. If you dont mind me asking, who was your BA?

 

Not Sydney, so I did a google search then crossed referenced on this forum and some others google searching to the most recommended. Emailed a few of them and some responded, some didn't, so that narrowed it down. Then it came down to personal rapport. For Sydney I would do the same.

I actually contacted a few BA in Sydney several years ago as I was looking at diversifying interstate in the Eastern Suburbs, and one of the BA's I did contact told me point blank that everything was overvalued for investment, and they wouldn't recommend buying at that time! They basically gave up some revenue, unfortunately I cannot recall who they were, otherwise I would recommend them for sure....

 

I've had clients sucessfully buy in those areas via BAs. More than happy to put forward a couple of recommendations on those BAs that I know have been genuinely client focused (not revenue focused) experts in the area if you want me to message you recommendations.

 

Thanks @BeautifulBicycle. Looks like you bumped into a principled BA

 

Thanks @Morgs. It will be very helpful if you can message me your recommendations.

 

1 Varies - but $12-20k is a common range (more for higher price points) with flat fee to percentage 1.2-1.8% fairly common individual situation depending.
2 Some have no limit but most will be 3, 6 or 12 months. I used to be 4 months but when covid hit everyone was nervous about time blowouts so I made 6 months standard and offer 12 months for particularly nervous clients.
3 Not if they are good. Honest conversations are par for the course but pressure tactics are the mark of a sleazy agent. Avoid.
4 (not a question but a piece of advice) I suggest to use a REBAA agent. They have to abide by a higher code of conduct and the admissions process weeds out a lot of questionable players.

There are some great REBAA members on this forum who service that region of Sydney.

 

Thanks @BuyersAgent

 

Anyone would think I'm against using a BA. I'm not! They serve a purpose for many people, however I think for a PPOR, if you are already living in an area nearby, it could be the wrong choice, based on your skillset.

I'm basing this on the many times that an agent has asked me what I want, and has presented the exact opposite. Mind you, I can see potential in homes that many can not and I'm usually looking for a home 'with potential' so I can add value, whereas many looking for a PPOR are looking for a house that is ready to move into.