Should You Be Using a Buyer’s Agent?

At a BBQ last weekend, it appeared all the cool people were using buyers agents, and I was asked by someone whether they needed one? So, do you?

The short answer? Whilst the upfront cost can appear a lot for a property purchaser who has not used one before, a great buyers agent can save you a lot more than they cost.

They can secure your dream home you are emotionally invested in in your dream suburb without letting the selling agent know this crucial (and pocket damaging) fact. 

But beware, this industry is like the Wild West.
It’s surprisingly easy to do a short course and start calling yourself a buyer’s agent. There’s very little regulation so buyer beware (pun fully intended).

We recommend different buyer’s agents for different needs. Here are two common scenarios:

1. You’re investing strategically (e.g. via your SMSF), and location is flexible.

Let’s say your brief looks like this:

• You want to build long term, tax effective equity

• Land is a must

• Budget up to $1.2 million

• You prefer low maintenance assets

• It’s for an SMSF, and you’re 10 years from retirement

For this strategy, we only recommend a data driven buyer’s agent with a national scope. This type of agent will use evidence such as market cycles, infrastructure investment, vacancy rates, demographic trends to uncover locations Australia wide with strong growth potential.

2. You know where you want to buy (or even what property), but want professional support.

You might already have a suburb in mind, or even a specific home. What you need is someone who:

• Understands the local market inside out

• Can uncover the property’s true value

• Will negotiate calmly and confidently on your behalf when you are emotionally invested in your dream home, so the selling agent doesn’t smell blood in the water

In this case, look for someone with proven expertise in that exact area and a strong reputation for handling negotiations.

Key questions to ask before engaging a buyer’s agent:

• Are they acting solely in your best interest or theirs?

• Are they being paid by developers, vendors, or other third parties?

• Do they operate across multiple areas, or just one?

• Will you deal directly with the expert, or be handed off to a junior staff member?

• Is this a core, full time service, or just a side hustle?

• Are their fees transparent? For example, a 2% success fee is common. · I can guarantee you if you aren’t paying a direct fee, you will be paying an indirect one in the form of hidden commissions (the ‘agent’ being paid by a developer or other arrangement), followed by many years of poor performance in a sub optimal property with low growth (costing you hundreds of thousands of dollars in lost upside).

• If they specialise in one area, how many clients are they managing? How do they navigate competing interests?

I’ve personally used buyer’s agents with excellent results, and I’ve also seen situations where poor advice led to underperforming property (this cost being in thousands of dollars of lost capital growth over the cycle) and disappointed clients.

So yes, using a buyer’s agent can be a cool move, but only if you ask the right questions first.

If you’d like a full list of what to ask before you commit hit reply or call me.

I’m happy to help you make a confident, well informed decision.