There are many roles in the real estate sector, with one becoming more popular with homebuyers, the buyer’s agent. So what exactly is the role of a buyer’s agent and when do you need to engage one? Real Estate Sales is not a regulated occupation in all countries; however, in the USA, a realtor selling vendors’ property, and a buyer’s agent representing home buyers are expected to be licensed professionals.
We all know what a real estate agent does and that their loyalties are with their clients – the vendors. However, little is understood about the agents who represent home buyers and why they’ve got a job. Most buyers agents are qualified licensed realtors and this experience is put to good use when they’re representing the homebuyer.
The property sales process includes prospecting to secure property listings. Then the role switches to marketing and representing the home for the seller (vendor) at open home days. Then there’s the negotiation between seller and buyer and the real estate agent represents the vendor and their requirements for the sale to go ahead.
In real estate sales there are components of the job sales agents love to do, and other tasks they prefer to put off until there’s no way to avoid them to complete a sale.
The art of selling is learned; however, not everyone enjoys it. The extroverts among us love the front of house role, where their face is their brand, so it’s plastered on billboards, on websites, also on the for sale signs and vehicles.
If selling is not your comfort zone then being a buyer’s agent will be more your thing as the role is more back-office and as such ‘order taking’ rather than prospecting for listings and ‘asking for the business’.
Many people who start out in sales switch to the buyer’s agent role as they enjoy tasks including gathering homebuyer requirements, conducting research, analysing homes for sale to find the perfect match, negotiating the terms on behalf of the buyer, and when trust is at an all-time high, they also buy the property on behalf of their client.
All these services are fee-based and they’re tailored per client. Generally, you can engage a buyer’s agent for:
- Full service. Property research to find a property that suits your criteria, inspection of the property, evaluation, negotiation, purchase, and attending an auction if necessary, all the way to settlement.
- Auction Representation. You can also hire buyer’s agents to attend an auction on your behalf. They are experienced bidders and know how to approach an auction for the best outcome.
Cost of a Buyer’s Agent
Most buyer’s agents charge a deposit (a percentage of the final fee) to begin conducting research. They can charge either a flat fee or a percentage of the final sale price of the property. Flat fees are better because they ensure that the agent is working in your interest, and not trying to push more expensive properties on you to increase their fee.
You should expect to pay between $9,000 and $12,000 for a qualified buyer’s agent.
Engaging a buyer’s agent to bid at an auction for you will attract a flat fee of around $700 – $1000.
Benefits of hiring a buyer’s agent
The main reasons you would engage a buyer’s agent are:
1. Time saving
They will do all the property research and present you with a shortlist of properties that suit your criteria. This will save you a lot of time searching online and talking to real estate agents. You won’t have to attend countless inspections every week and can focus on a select few properties that you like.
2. Early access
A well-connected buyer’s agent may receive the opportunity to view and bid on properties before they hit the market. They will have a network of real estate agents, mortgage brokers, solicitors, valuations experts and other professionals which will give you the inside edge.
3. Investing expertise
Buyer’s agents often work with investors to find where is the best place to buy for high capital growth and/or strong rental yield. They can, therefore, provide you with advice on where the best place to buy is considering your budget and requirements.
They understand how the property market works and can increase your chances of choosing a property that will experience strong capital growth in the long term.
4. Bidding and negotiation
Negotiating with real estate agents can be an uncomfortable process for the average buyer, and they likely don’t know the best way to go about it. Buyer’s agents do this daily, so they know how to get the right price for a good property. They can talk to sales agents as professional equals and ensure that they are not taking advantage of the buyer.
Bidding at auction can also be stressful for inexperienced buyers. Buyer’s agents do this most weekends and know all the tips and tricks to secure a competitive property. Bidding at auction is as much art as it is science, and it is often experienced buyer’s agents who win at auction even if their budget is lower than the next person.
Buyer’s agents simply understand how the whole process of buying a property works, from research to settlement. They will answer all your questions and make sure you’re not falling prey to the traps of the sales process.
How to find a buyer’s agent
Word of mouth is a good way to start looking for a buyer’s agent. Friends or family who has used one in the past can give you an idea of the process and whether they are happy with the level of service provided by their agent.
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