Is It Worth Using A Buyers Agent?
✅Good for High Income Earners that can earn a lot more within their businesses and professions than the buyers agent fee.
✅Good for High End Properties. Buyers agents have access to unlisted properties that the general public does not know about. The fee can be easily negotiated within a high priced property, even if the buyers agent only negotiates the prices lower by a few percentage points.
✅Can be okay for Time Poor people in shift work that can't attend open houses on weekends etc. In the future we may even see a trend towards middle income shift workers utilising buyers agencies.
✅They tend to be well connected and know many of the off market properties for sale in their area. This is great for investors who need something quite specific to fit their risk model. They have well practiced negotiation and auction skills to navigate this process for you.
✅Interstate buyers benefit from a local agent on the ground that can attend many viewings and knows their area well. Remember a real estate sales agent knows an unskilled buyer, so if you're buying interstate it may pay handsomely to enlist the help of a local.
✅A buyers agent aims to save you money on the purchase price which more than pays their fee. And they do all the work that comes with buying a home.
✅Great for investors buying multiple properties within a defined risk model. This tends to reason: investors want properties that will make them money and become cash flow positive as quickly as possible. They are generally unconcerned about the properties 'cosmetics. The investor manages their portfolio and finances, then outsources the 'hunting' to a professional.
✅Commercial property investors can be assisted in finding premises within their risk models.
✅Overseas Investors usually purchase the property 'sight unseen'.
✅Great for 'hot markets'. A good buyers agent can take all the emotion out of the process and just hunt for what you need. They can sometimes negotiate for the properties otherwise going to auction.
What does the process look like?
✅They will gain an understanding of your risk tolerance, investment strategy, type of property you're after, price consideration vs rent (if investing), and then council you on the typical off market properties they are privy to in those areas.
✅A good buyers agent will then talk to you about your finances, and may even advise you to get your pre-approval in place. This will protect you from paying for the buyers agents services only for your finance to be knocked back. Mortgage Broker Revesby can help here.
✅A good buyers agent will know the demographics, gentrification, government expenditure on things like hospitals and train lines, the types of professions moving into the area, and help guide you as to whether the areas you are looking at will fit your investment model.
✅Real estate agents know an unskilled buyer when they see one. Having a buyers agent in your corner may just tip the scales back in your favour in a hot market environment.
✅They will do all the research and short list properties. You don't even have to accompany them to the open houses if you're time poor. We recommend you do; this is the time to ask questions on how they come up with their valuations and see the amount of work they put into your acquisition.
✅Sometimes they will consult with your mortgage broker to 'guesstimate' the bank valuation vs the market valuation to see if it's even worth making an offer. Remember your pre-approval only lasts 3-6 months, so they will be under pressure to perform. A good broker knows the lender wait times for approval and can push your application forward with the right bank quicker than you can do on your own.
✅A good buyers agent can source the property and finalise the sale several weeks sooner than you could do on your own. They will liaise with your solicitor and mortgage broker to create a seamless transition from paying the deposit to signing the contracts.
What does a Buyers Agent cost?
✅Usually around 2-3% of the purchase price, so for a Sydney home sold for $900,000, you are looking at $18,000 to $27,000. Saying that, there are PLENTY of buyers agents that charge a flat fee in the region of $8,000 - $12,000 - so do your home work! Although we are not currently aligned with a buyers agent, Mortgage Broker Revesby can help connect you with some potentials.
✅If your buyers agent has a history of 'shaving' 4 or 5% (sometimes more) off the purchase price, then it may pay handsomely not to go it alone. On top of this - 'they do all the work' and get your deal closed sooner. So win-win.
✅Most buyers agents allow you to pay a 'sign on' fee of around $1,200. Once the deal is completed you with pay the rest of the fee, which is fair for both parties in the event you pull out, or the agent can't source a property within your requirements.
✅A buyers agent fee may be tax deductible in some cases. Your accountant can advise you.
Can a buyers agent really save me enough money on my purchase to offset their fee?
✅Ask for a track record! If they really do consistently beat the market then speak to them about previous deals; they can only say 'no.'
✅I've heard it put like this, "I charge 2% of the purchase price because I negotiate a lower price by 4%." Which is harder to achieve in a red hot first home buyers market, but it's at least worth the conversation.
✅If you're still unconvinced, find a buyers agent that does not charge an 'engagement' fee, but invoices after they find your property. These are becoming few and far between. Most will charge their fee in stages with a small retainer at the front, followed by the bulk of it after the deal settlement - 'success fee'..
✅Make sure your buyers agent is a specialist within a geographic location or area. It may pay to be cautious of those who claim to operate Australia wide. You are paying for a specialist within your area who can get better deals than you could on your own.
No fee service.
Matthew Stack
matthew@mortgagebrokerrevesby.com.au
www.mortgagebrokerrevesby.com.au
0423 237 242
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