A special agent on your side
SHOULD I USE A HOME BUYER’S AGENT?
NHow many buyer’s agents are there? A: There are about 50 accredited buyer’s agents in Victoria, according to the Real Estate Buyer’s Agents Association. In 2001, there were three.
‘‘It is true there are more people representing themselves as buyer’s agents in 2013 than there were 10 years ago,’’ Brad Straughair, of Domain Property Advocates, said.
‘‘It is the way buying real estate is moving, as more time-poor buyers outsource aspects of their lives to professional service providers, including choosing and buying a home.’’
What does a buyer’s agent actually do? A: A buyer’s agent, also known as a buyer’s advocate, searches for properties based on a client’s criteria. They attend inspections and auctions on behalf of their buyer. They have access to home sale results unavailable to the public, which allows them to find comparable sales and determine the true market value of a prospective home, which underpins their negotiations with vendors.
They should have a good understanding of building reports and be able to liaise with solicitors and mortgage brokers on behalf of clients, REBAA president Byron Rose said.
Why use a buyer’s agent? A: Potential perks include avoiding properties that are unsuitable, having access to sales data, in-depth market O haggling with sales agents or enduring the crush of Saturday morning inspections — and lower home prices to boot.
Buyer’s agents pose a pretty compelling case. But what exactly do they do?
Still too much like ‘‘secret’’ agents to many home buyers, we put BAs under the microscope.
How do you select one? A: Carefully. According to peak body the REBAA, questions to ask include: HOW experienced are they? WHAT qualifications do they have? WHAT is their most recent purchase? CAN they provide recent client testimonials/references? DO they own property themselves? ARE they accredited with the REBAA and/or REIV? WHO pays their commission?
‘‘Lots of agents use the name ‘buyer’s agent’ when they are really selling off-the-plan properties of developers and getting commission from it; effectively getting paid twice, so definitely ask who pays commissions,’’ Mr Straughair said.
How much does an agent cost? A: The buyer usually pays a SAVE time inspecting unsuitable homes ACCESS to comprehensive sale price information NO stress dealing with sales agents USUALLY pay at or below market price knowledge, and the fact you will have a crack negotiator on your side when deal-making.
‘‘A good buyer agent will save you time and money, not just by negotiating a fair price at the time of purchase but also by identifying properties more likely to grow in value over time,’’ Mr Straughair said.
‘‘It can mean the difference between buying a home that earns 7-12 per cent capital value growth every year over another property in the same suburb with virtually the same features that only grows by 3-4 per cent each year, simply because it is in a fundamentally less desirable location.
‘‘Buyer’s agents can often have that degree of local market knowledge.’’ TAP expert knowledge of the real estate game NO guarantee suitable homes will be found UP-FRONT fees often paid before search begins MISS the thrills of deal-making percentage of the purchase price, typically 1.5 to 3 per cent plus GST, depending on the challenge of the brief.
Some agents negotiate a set fee in advance and many demand an upfront fee to cover pre-purchase costs, including property searches, petrol and time spent inspecting homes.
If you want to do the home hunting yourself you can engage a buyer’s agent for negotiations only and they will act as your rep in all dealcrunching, usually for a fixed fee or one per cent plus GST of the final purchase price, the REBAA states.
If you want to hire a BA purely to bid at auction, fees vary from $500 to $1000 for each auction they attend.
How do you know who is reputable? A: Buyer’s agents should be licensed real estate agents, just like selling agents, Real Estate Institute of Victoria spokesman Robert Larocca said.
‘‘Consumers need to ensure that . . . they have an estate agent’s licence if they are sourcing and negotiating on a purchase,’’ Mr Larocca said.
The buyer’s agent should also have professional indemnity insurance.
Their industry is heavily regulated, Mr Rose said. For a complete list, visit reia.com.au.
Are there any pitfalls? Some buyers will find up-front fees steep on top of saving for a deposit and stamp duty. And just because an agent is hunting for your dream home (at a dream price), it doesn’t mean it won’t still take months.