Buyers Agents, what they actually do, how much they charge, and when you should use one.
Buyers agents, also known as buyers advocates are different from sellers agents, which are commonly known as “Real Estate Agents”. Sellers agents work for a property owner to get the best possible current market price for their property.
What can Buyers Agent do for you?
Buyers Agents on the other hand, as you may have guessed work for the buyer and are primarily focused on finding good quality properties, evaluating if they are going to work for you and once you are happy, negotiate the lowest possible price.
A good buyers agent should walk with you throughout the entire buying process, initially, they should ask you about your goals, not only the short term but even your future retirement goals, what your preferences and requirements are and what sort of price range you are looking for.
From there, they should search for available listings and fine-tune a property wish list that matches all your criteria, a well-renowned buyer’s agent might also have access to off-market properties.
They have access to these off-market properties because they work quite heavily with sellers agents, and some sellers would rather a quick, hassle-free sale at a lower price. Especially if the owners are in a rush to sell or don’t want to go through a 5-week campaign.
Beware of property spruikers
A word of caution here though, if you are talking to a buyers agent that is forcefully stating they can get you off-market properties, without considering all of the options available on the market, they could be something we call property spruikers.
Property spruikers often work with developers or sales agents that offer them a kick-back for finding a buyer for their property, and once it’s sold they get paid a lump sum from the sale proceeds.
This is heavily frowned upon in the industry and unfortunately, because it’s unregulated they can get away with it, the best way to avoid these types spruikers is to confront them about how they are getting paid.
The agents that you are paying for advice generally have your best interest at heart, agents that offer a free service are obviously getting paid from someone else. There’s more on how to find a good buyers agent later on in this video.
Once you have confirmed with the buyer’s agent that you are happy with their selection of properties, they will attend property inspections, evaluate recent comparable property sales and oversee all the due diligence.
Always do your due diligence
Due diligence should be taken very seriously, at a very high level it includes ensuring there’s good future capital growth, commutability, liveability, building and pest inspections, strata documentation checks, the list is almost endless.
For more on due diligence checks watch my video on “Do your due diligence“.
Once all the checks are in play and both you and your buyer’s agent are happy, they will then proceed to negotiate for the best price, or if it’s going to action your buyer’s agent can bid for you on auction day, they will also oversee the sale contracts and exchange.
After contracts have been signed and the property is officially sold, your buyer’s agent should carry out pre-settlement inspections and ensure that settlement continues to go smoothly.
A proactive buyers agent will want repeat business either from you or from a recommendation by you, they should continue to be engaged with you through on-going communication, this generally happens in form of property and portfolio management.