Buyer's Agents in Australia
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What’s a buyer’s agent?
A buyer’s agent (also called a buyer’s advocate) represents the buyer in a property transaction. A real estate agent works for the seller who appointed them. A buyer’s agent works for you: finding properties that fit your brief, working out what they’re worth, and negotiating the purchase.
More Australians are using one, especially investors buying interstate and anyone up against a hot capital city market.
What does a buyer’s agent do? Service scope
What you get depends on the agent, but a full-service engagement usually covers:
- Setting a purchase brief: your budget, the type of property, the suburbs you want
- Searching listed and off-market properties that fit that brief
- Inspecting and shortlisting, including for interstate and overseas buyers
- Checking property values against recent comparable sales
- Due diligence: contract review, strata and building reports, planning checks
- Negotiating with the selling agent, or bidding at auction for you
- Working with your mortgage broker, conveyancer and inspectors through to settlement
Plenty of agents will do these jobs separately. Auction bidding and negotiation-only work is common, and it costs a lot less than a full search.
How much does a buyer’s agent cost?
Buyer’s agents in Australia charge one of three ways:
- A fixed fee for the service.
- A percentage of the purchase price, usually 1% to 3% plus GST.
- An engagement fee plus a success fee. You pay an amount upfront to appoint the agent, and the rest when a property is secured.
Which one works out cheapest comes down to your budget. A percentage fee tends to suit lower-priced purchases. A fixed fee usually wins once you’re above $1.5 million. Auction bidding and prestige purchases cost more again.
Buyer’s agent fees vary with the location, the type of service and the agent’s experience.
Are buyer’s agents licensed?
Yes. In every state and territory a buyer’s agent has to hold the same real estate licence as a selling agent, issued by the state regulator. In the three markets we cover that’s NSW Fair Trading, Consumer Affairs Victoria and the Queensland Office of Fair Trading. Each keeps a public register, so you can check a licence before you sign anything.
Licensing is the floor. It’s also worth asking whether the agent belongs to REBAA (the Real Estate Buyers Agents Association of Australia) or PIPA (the Property Investment Professionals of Australia). Neither is compulsory. Both require members to act only for buyers, which rules out anyone taking referral commissions from developers or sellers.
When is a buyer’s agent worth it?
A buyer’s agent earns their fee when you’re buying somewhere you don’t know well, interstate or from overseas, and can’t get to inspections yourself. They’re also worth it in fast markets where the good stock sells in days, or where a lot of property changes hands off-market and an agent’s relationships get you in front of listings you’d never see advertised.
They earn their keep too if you’ve been looking for months and keep missing out. After a run of failed auctions it gets hard to judge what a place is actually worth, and harder still to walk away from one. Someone doing this for a living doesn’t have that problem.
The fee is harder to justify if you already know the area, you have time to do the research and your brief is straightforward. That goes double in a softer market, where there’s stock sitting around, fewer buyers to beat and room to negotiate with the selling agent yourself.
“Most buyers call us after they’ve missed out three or four times. By then they’re bidding on emotion instead of value. A big part of our job is talking a client out of the wrong property, not just winning them the right one.”
Jay Pace, Director, Providence Property Group