Buyer's Agents in Australia

What a buyer's agent actually does

A buyer's agent is a licensed property professional you hire to buy for you. The selling agent at every open home works for the vendor and is paid by the vendor. A buyer's agent is the only licensed person in the transaction whose fee comes from your side of the table.

The job is not "finding houses". Listings are free and public. What you are paying for is the four things buyers cannot do well on their own.

• Access. Off-market and pre-market stock never reaches a portal. It moves through selling agents who only call the buyers they deal with every week.
• Appraisal. Working out what a property is worth today, from recent comparable sales rather than from the price guide, which is a marketing number.
• Negotiation. Dealing with the selling agent as a professional counterpart rather than as the emotionally invested person who has lost four auctions already.
• Due diligence. Ordering and reading the building, pest, strata and title checks, and knowing which findings are a discount and which are an exit.

Full service, or just the bidding

Three products get sold under the same job title, and they cost very different amounts.

Full search

The agent runs the whole thing: brief, shortlist, inspections, appraisals, due diligence, negotiation, contract. You see three or four properties instead of forty. This is the service most people mean, and it runs from engagement to unconditional contract, typically six to twelve weeks.

Auction bidding only

You have found the house yourself. The agent turns up on the day and bids for you, to a limit you set in writing beforehand. A flat fee, usually several hundred to a couple of thousand dollars. It is the cheapest way to use a buyer's agent and it exists because auctions are the one part of the process where an amateur is most obviously outmatched.

Negotiation only

Same idea for a private treaty sale. You have found the property, the agent handles the offer and the back-and-forth. Priced between the other two.

What it costs

Two structures dominate. A percentage of the purchase price, usually 1.5% to 3%, which means the fee grows as the price does. Or a fixed fee agreed up front, commonly $8,000 to $21,000 depending on the city and the brief, which does not. Most firms also charge an engagement or retainer fee at the start, often $1,000 to $5,000, credited against the final bill.

Percentage pricing has an obvious tension in it: the agent's fee rises when the price you pay rises. Fixed pricing removes that and is the reason a growing number of firms have moved to it. Our full breakdown, with worked numbers for each structure, is in the buyer's agent fees guide.

Licensing, state by state

A buyer's agent must hold a real estate licence or be a registered salesperson working under one. It is the same licence a selling agent holds, issued by the same regulator.

• New South Wales: licensed by NSW Fair Trading
• Victoria: Consumer Affairs Victoria
• Queensland: the Office of Fair Trading, which issues a separate resident letting and real estate licence
• South Australia: Consumer and Business Services
• Western Australia: the Department of Mines, Industry Regulation and Safety
• Tasmania: the Property Agents Board
• ACT and Northern Territory: their own fair trading bodies

Every state regulator publishes a public register. Search the person's name, not the company's, before you sign anything. A licence tells you they are allowed to act. It does not tell you they are good.

The conflict to check for

A genuine buyer's agent takes money from one party: you. Some firms that call themselves buyer's agents also collect a commission from developers, project marketers or vendors on the properties they place clients into. That is a different business, and the property you are shown is chosen partly by who pays the referral.

The question to ask, in writing, is short: do you receive any payment, commission, rebate or benefit from any party other than me, on any property you might recommend? The answer should be one word. If it is a paragraph, you have your answer.

When a buyer's agent earns their fee

The fee is worth paying when one of these is true:

• You are buying in a city you do not live in, so you cannot inspect, and you have no feel for which streets carry a discount
• The market is moving faster than you can, and properties are gone before you have arranged a second inspection
• You have lost at auction more than twice and have started bidding to win rather than to buy
• You are buying an investment, where a 5% overpayment compounds against you for a decade
• Your time has a high hourly value and the search is eating your weekends
• You are buying something unusual: a development site, a knock-down, a heritage property, something with a title problem

When it is not worth it

Be honest about the other side of it. A buyer's agent is poor value when you are buying a very standard property in a suburb you already know well, at the lower end of the market where the fee is a large share of the price. It is poor value when you have plenty of time and genuinely enjoy the search. And it is poor value when you cannot afford the fee out of savings, because it is paid in cash on top of the deposit and cannot be added to the loan.

On a $500,000 purchase, a 2.5% fee is $12,500. The agent has to find you a property $12,500 cheaper than you would have found, or a materially better one, just to break even. In a thin market with few comparable sales, that is a real ask.

How to choose between two agents

Once you have shortlisted, the difference between firms shows up in six questions.

1. How many clients are you working with right now? More than eight or ten at once and you are sharing attention.
2. Which suburbs do you buy in most weeks? A firm that names its actual patch is more useful than one that says all of Sydney.
3. What share of your purchases came from off-market stock last year? This is the access question, and it has a number for an answer.
4. Is your fee fixed or a percentage, and what is the engagement fee? Get both in writing before you sign.
5. What happens if I do not buy? Some agreements refund the retainer, most do not, and some have a time limit.
6. Can I speak to two clients you worked with this year who did not buy? The clients who bought are always happy. The ones who walked away tell you how the agent behaves when there is no fee at the end.

Common questions

Does a buyer's agent get properties cheaper?

Sometimes, but the saving is not the main event. The bigger effects are buying the right property rather than the available one, avoiding a purchase with a problem in it, and not paying a fatigue premium after months of losing. A saving on price is easy to measure and is often the smallest of the three.

Can I use one as a first home buyer?

Yes, and bidding-only services exist precisely for this. The full-service fee is harder to justify at the lower end because it is a bigger share of the purchase and it comes out of the same savings as your deposit and stamp duty.

Do they help with the loan?

No. A buyer's agent is not licensed to give credit advice and most will insist you have finance pre-approved before they start. That is a separate job for a mortgage broker or your lender.

Are buyer's agent fees tax deductible?

Not as an expense in the year you pay them. On an investment property the fee forms part of the cost base, which reduces the capital gain when you eventually sell. That is covered in the investment property tax guide.

How long does the process take?

Six to twelve weeks from engagement to an unconditional contract is normal for a full search. Faster is possible in a soft market. Much faster than that usually means the brief was too broad.

Can two people share one buyer's agent?

Not on the same property. An agent acting for two buyers chasing the same house has a conflict they cannot resolve. Reputable firms decline the second client or refer them on.