How to choose a buyer’s agent
17 February 2020 319 Views
A good buyer’s agent can save you money, provide you with expert advice, and secure you a great property. But how do you make sure you’re engaging the right one?
Generally, a buyer’s agent who has been in the game for at least 10 years is the safest bet. A property cycle usually runs for 7-10 years, so you’ll want your advice from someone who has seen the ups and downs of the property market.
The best buyer’s agents only buy properties, so ask if they also sell houses. Some past sales experience is valuable, but to ensure that they will work in your best interest, they should be solely focused on buying properties.
2. Local knowledge
When interviewing a buyer’s agent, ensure that they are familiar with the area you want to buy in. Some buyer’s agents specialise in certain suburbs and can provide you with really knowledge about where is best to buy in a suburb, what the future developments around the area look like, and which areas you should avoid.
Each suburb has its own idiosyncrasies and unique demographic of people, so engaging a buyer’s agent who knows the local area is paramount.
3. Value for money
Asking for references or testimonials from a buyer’s agent is a good way to gauge the level of service they will provide. The whole point of hiring a buyer’s agent is to save yourself time, acquire the optimum property and for them to act on your behalf. If you can’t see a potential buyer’s agent providing you with these basic things, then it’s time to look elsewhere.
A good buyer’s agent will have a strong network of selling agents which they can use to benefit their buyer. They could find you an off-market listing that you would otherwise never see and open the door to some quality properties that never hit the market.
But more than this, they will have a professional relationship many selling agents and will therefore be able to better negotiate on your behalf. Sales agents treat buyers very differently when they realise that they have a buyer’s agent on their side.
5. Method of research
Ask a potential buyer’s agent how they research property. They should know the major markers of a good property, including capital growth, rental yield, proximity to transport etc. Buyer’s agents will often go into a lot more depth than the average person so your buyer’s agent should be able to explain their criteria for finding the perfect property.
Also ask how they will communicate all this information to you, and if they will call you weekly to update you on their progress.
6. Relevant qualifications
The rules and regulations concerning real estate differ around the states in Australia, but qualified estate agents can buy houses for people outside of their home state if they wish.
It is important to ensure that your buyer’s agent has a qualification from the state you wish to buy in. The legislation and rules can differ quite significantly from state to state, and your agent should be on top of all the relevant requirements for buying property in the right state.
The best buyer’s agents will also belong to an industry body in their relevant state. This provides credibility to an agent and ensures that they are keeping up to date with all the changes in the industry. Examples of industry bodies include the Real Estate Institute of Victoria and the Real Estate Institute of New South Wales.
7. Cost of doing business
The industry norm is usually 1.5 – 2% of the purchase price of the property. This turns out to be around $9000 - $12,000 for a $600,000 property. However, more buyer’s agents are starting to charge a flat fee and this is generally the better option.
You will know exactly how much you own them upfront, and the buyer’s agent will not be incentivised to push a more expensive property on you. A flat fee ensures the agent is working in your best interest and not in the interest of their pocket.
A standard fee for a buyer’s agent in Melbourne is around the $9,000 - $12,000 mark. Be sceptical of agents who try to charge you more than this.
By Mark Ribarsky.